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Chris Green (Bolton West) (Con): In the third quarter of this year, turnover of small businesses in my constituency had increased by 20% over the previous year—well ahead of the national average. May we have a debate on the importance of small businesses not just to our national economy but to the future of the northern powerhouse?

Chris Grayling: I thank all the Members—I know my hon. Friend was one of them—who took part in events around small business Saturday. I know his constituency well, and I know what an important role small business plays in the area that he represents. I pay tribute to him for the work he does in championing these efforts and supporting members of his local business community; I have no doubt they will express gratitude to him for doing so.

Martyn Day (Linlithgow and East Falkirk) (SNP): I have been contacted by Ballantine Castings of Bo’ness, a local foundry in my constituency, to highlight its concerns about the severe hike in the energy costs it is facing—some 17% year on year. Can a statement be made about the progress of discussions with the European Commission in relation to further compensation for heavy industries such as the iron and steel industry?

Chris Grayling: The hon. Gentleman makes an important point. He knows that this is a matter of ongoing concern for the Government. The Secretary of State for Energy and Climate Change will be here on the Thursday after we return. I will make sure that her office is aware of his concern so that if he would like to raise it then, she will be better prepared to answer him.

Tim Loughton (East Worthing and Shoreham) (Con): In the previous session of business questions I raised with my right hon. Friend the subject of the WASPI—Women Against State Pension Inequality—campaign and the problems with the pension equalisation measures. I am glad to say that the Backbench Business Committee has granted a debate in the first week back. The campaign petition by WASPI has now exceeded 70,000 signatures, while my own podcast has now been listened to over 141,000 times. Will he make sure that the Secretary of State himself comes to respond to that debate, particularly given the comment by the former Minister for Pensions, Steve Webb, that the Government got it wrong?

Chris Grayling: My hon. Friend is clearly making very effective use of social media in his campaigning, and I commend him for that. I will make sure that his request is passed on to the Secretary of State.

Andrew Gwynne (Denton and Reddish) (Lab): The Manchester Evening News recently ran a piece highlighting premises in Greater Manchester with poor food hygiene ratings, and featured the Red Lion in Denton. Unfortunately for the Manchester Evening News, the Red Lion is under new ownership. The editor has apologised to the proprietors, but they tell me that it got the information from the gov.uk website. May we have a debate in Government time on how up to date the information on Government websites is, and whether, when information is incorrect, it can be corrected promptly?

Chris Grayling: Most importantly, before any newspaper publishes a list of people to name and shame them, it is

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good practice to telephone them first to put it to them. If the newspaper had done that, it would have been able to be corrected. I always want and expect gov.uk to be as up to date as possible, but tracking every change of management in an organisation that has had a poor report would be impossible. It is good journalistic practice to phone up and ask for a comment and then discover that the change has happened.

Matt Warman (Boston and Skegness) (Con): The number of off-licences in my constituency has led to a rise in antisocial behaviour and street drinking. May we have a debate on what it means to be a socially responsible business in the 21st century and the cumulative impact of businesses that do not take their social responsibilities seriously?

Chris Grayling: Of course, local authorities have extensive powers, which are not always used, to deal with problem premises. However, if local planning rules are not working, the whole Department for Communities and Local Government team are now sitting on the Front Bench and I am sure they would be very happy to look at specific issues, to see whether the situation can be improved.

Tom Brake (Carshalton and Wallington) (LD): If the Leader of the House is going to get Southern, Network Rail and the Transport Secretary to write to Members on the subject of abysmal train services, may I add my name to the list of people who would like to receive those letters?

Has the Leader of the House had a request from either the Home Office or the Department for Business, Innovation and Skills to debate the Disclosure and Barring Service? I am not sure whether he is aware that the DBS has 70,000 outstanding cases at present, which is having a huge impact on people’s ability to take up jobs.

Chris Grayling: This issue has come up in some of my constituency cases in the past. I have not had any such cases recently, but it is always a matter of concern to us. We do not want people not to get jobs because the appropriate certification has not come through. I will make sure that the Home Secretary is aware of the concerns raised by the right hon. Gentleman.

Cat Smith (Lancaster and Fleetwood) (Lab): Happy Christmas, Mr Speaker. May we have a debate on the access to elected office fund, which supports disabled candidates in elections, given the Government’s decision to cut funding?

Chris Grayling: Of course. We have regular Electoral Commission questions—we have just had them—so the hon. Lady has an opportunity to raise such issues. We continue to try to provide support where we can for things that require it. In recent years, however, we have had to take some difficult decisions in order to make sure that we have stable public finances.

Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP): Will the Leader of the House arrange for an early

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statement in the new year about progress towards the publication of the Chilcot report?

Chris Grayling: Sadly, that is not a matter for Government; otherwise, it would have been published a long time ago. It is entirely in the hands of Sir John, who has set out a timetable to publish the report next year. The Government, the Conservatives and, frankly, the whole House have been very clear that we want the report to be published as quickly as possible. There is absolutely no benefit or incentive for the Government to delay publication, because we were not in power at the time of the events it covers. It is in all our interests that the report is published quickly, and I hope Sir John will be able to do so as soon as possible in the new year.

Dr Rupa Huq (Ealing Central and Acton) (Lab): We all agree on the importance of the NHS and its staff, yet my constituent Sharmila Chowdhury faces Christmas jobless because, as a radiographer at Ealing hospital, she exposed the malpractice of consultants taking extra financial inducements. May we have a debate on whistleblowers in the NHS? According to the House of Commons Library, there has not been such a debate since 2009, despite the Francis review. Can the Leader of the House not be a Scrooge and at least grant us a debate or, if not, a statement?

Chris Grayling: What I can offer the hon. Lady is the Health Secretary on the first day back. The hon. Lady makes an important point. It is not our Government’s policy to see whistleblowers penalised. Obviously, I do not know all the details of the case she raises, but if she writes to the Secretary of State or to me, I will make sure he has the information available to him before he comes to the House on the first day back.

Chris Stephens (Glasgow South West) (SNP): Merry Christmas to you and yours, Mr Speaker. I have received a letter from a constituent—a Mr J. Marley—who confirms that a Government Minister is to receive a visit from three spirits on Christmas eve. Will the Government make a statement in the new year, having confirmed a new and munificent attitude to life, to address the many iniquitous parts of our current social security system, or are the hopes and aspirations of many merely a humbug?

Chris Grayling: If anyone received a visit from the three spirits of Christmas these days, the spirit of Christmas past would show them a country in trouble, in debt and with high unemployment, the spirit of Christmas present would show them a country moving forward, with falling unemployment and a falling deficit, and the spirit of Christmas future would show them a high-tech, exciting country, with opportunities for all.

Christian Matheson (City of Chester) (Lab): I warmly endorse the Leader of the House’s tributes to the staff of this place. Talking about them, may we have a debate on staffing in Parliament to give the Government an opportunity to explain why, at the same time as they are allowing the number and cost of special advisers to skyrocket unchecked, they are reducing by almost 20% the amount of Short money support given to opposition parties?

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Chris Grayling: This Government spend more right now and will carry on spending more on Short money than on special advisers.

Alan Brown (Kilmarnock and Loudoun) (SNP): I have been contacted by a constituent, Stephen from Newmilns, who thinks Scottish National party Members are doing a great job of providing a real opposition to the Tory Government and wants us to keep asking tough questions. He would like a statement on how we can afford to fund bombs for Syria and nuclear weapons while people in this country have to use food banks. I would add that we do not want to hear any waffle about their use in Germany. How can we afford such things in this country while people are going to food banks?

Chris Grayling: Let me tell the hon. Gentleman that we are affording military support to people who, last year, rescued Yazidi refugees from Mount Sinjar. We are funding support to try to rescue a civilian population who have been through a trauma unlike any experienced almost anywhere on the planet in the past 50 years. The job or goal of our forces in Syria and Iraq is to restore peace to people wandering around the region desperately looking for a home, because we need them to be able to go back to their own homes.

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Local Government Finance

11.41 am

The Secretary of State for Communities and Local Government (Greg Clark): I believe that our gloriously diverse country will prosper more if the districts, counties, towns and cities that make it up have more power. If we accept that, it follows that we must believe councils to be capable of exercising that power.

Over the past five years, councils have shown great responsibility. Given that local authorities account for a quarter of public spending, it was always going to be the case that they would have to carry their share of the burden of reducing the largest deficit in peacetime history. Not only have they done so, but public satisfaction with their services has been maintained or has improved. I especially want to thank the staff of councils most deeply involved with the recent floods: their commitment to their residents is exemplary. However, I cannot credit councils with acumen and then deny them candour. More savings need to be made as we finish the job of eliminating the remaining deficit.

I listened carefully to councils as I prepared this settlement. Councils asked for the right to spend locally what they raise locally; for help with adult social care costs; for expenditure savings that recognise what has already been achieved by local government; for recognition of the higher costs of providing services to sparsely populated rural areas; for encouragement for cost-saving innovation; for rewards for new homes; for complete transparency with regard to resource allocation; and for a move beyond one-year-at-a-time budgeting. As I will explain, this provisional settlement meets all those objectives.

Local government will be transformed by localism. In 2010, councils were 80%-dependent on central Government grants. By 2020, they will be 100%-funded by council tax, business rates and other local revenues. The retention of 100% of business rates will forge the necessary link between local business success and local civic success. To support that further, we will increase the local growth fund to £12 billion by 2021. This is a Conservative-led revolution, transforming over-centralised Britain into one of the most decentralised countries in the world. Authorities will also be able to spend 100% of capital receipts from asset sales to fund cost-saving reforms. We will publish guidance for local authorities on that matter.

The spending review set out that, based on the forecasts of the Office for Budget Responsibility, overall local government spending would be slightly higher in 2019-20 than in 2015-16. In this settlement, the core spending power for councils will also remain virtually unchanged at £44.5 billion in 2015-16 and £44.3 billion in 2019-20. In real terms, that requires savings of about 6.7% over the spending review period, compared with the 14% required at the beginning of the spending review period in 2010.

The unanimous view across local government is that the biggest cost pressure is care for our growing elderly population. In September, the county councils and the Local Government Association wrote to me, estimating that those costs would require an additional £2.9 billion by 2019-20. Some local government leaders proposed an innovation: a social care council tax precept of 2% a year, guaranteed to be spent on social care. That is

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equivalent to £23 per year on an average band D home. In the spending review, the Chancellor and I agreed, and we will ensure that the precept is transparently itemised on residents’ bills.

However, we will go further. We know that for some councils, the precept will not raise enough to meet the growing costs, so we have announced a fund of £1.5 billion a year to support councils in working with their local NHS to address the pressures on care. Today, I allocate that £1.5 billion to complement the new precept, so that more goes to councils that raise least from the precept. We recognise in the distribution of resources the particular needs of councils with social care responsibilities.

Local government has asked for £2.9 billion by 2020 as a contribution to the costs of social care. In this settlement, we make up to £3.5 billion available by that year, distributed fairly towards local authorities with social care responsibilities. I applaud the maturity of local government as a whole in telling me that it accepts that this prioritisation implies that, over the next few years, those councils with social care responsibilities should have relatively more resources than those councils which do not have them. Some district councils—those with low council tax bases or those which serve the most rural areas—face particular pressures, so while this settlement maintains the core referendum threshold at 2%, the threshold for the lowest cost district councils will be £5 a year, so that they are not punished for being economical while those who have spent more in the past are allowed to spend more now.

I will increase support for the most sparsely populated rural areas by more than quadrupling the rural services delivery grant from £15.5 million this year to £65 million in 2019-2020, by which time, when 100% business rate retention has been achieved, we will be able to consider what further correction is due. I will also protect, in real terms, the £30 million funding for lead local flood authorities, and the £2 million for those authorities to act as statutory consultees in planning sustainable drainage systems.

The new homes bonus provides valuable funding and, as importantly, encourages house building. I can announce today that I will extend the new homes bonus indefinitely, but with some changes on which I am consulting. All savings will be retained by local government to contribute towards social care.

In a world in which only a small proportion of councils’ funding will come from central Government grant, we require transparency on the components of the financial resources available to councils. I have noted the criticism from the Public Accounts Committee and the Communities and Local Government Committee of previous inclusions of the existing better care fund and the public health grant in councils’ spending power. I will follow their advice and, henceforth, report only resources over which councils have discretion.

In addition, in all the figures in the settlement, I have chosen to understate the maximum resources available to councils. For example, in line with the OBR, I assume that councils will increase council tax in line with inflation, rather than the referendum threshold of 2%. I expect that, as previously, councils will increase bills by less than their full entitlement. Had I assumed

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the maximum figure, more than a quarter of a billion pounds extra in total resources would have been recorded as being available to councils.

The main reason councils keep liquid reserves is as a buffer against unpredictable year-to-year budgets. Local government has consistently told me, and for generations told my predecessors, that greater certainty about their income over the medium term would allow local authorities to organise more efficiently and strategically, and to put some of those safety-net reserves to more productive use.

Therefore, in this settlement, I do something that local leaders have yearned for. For the first time ever, I offer a guaranteed budget to every council that desires one and can demonstrate efficiency savings, for next year, and every year of this Parliament—a four-year budget to give certainty and confidence. It is a settlement that maintains the financial resources available to councils in 2020 at around the same level as they are today, while giving incentives for local government to make significant savings, and it directs up to £3.5 billion to care for our elderly citizens. This historic settlement does what campaigners for devolution thought they would never live to see: local councils answerable to local people, rather than to central Government, and I commend it to the House.

11.50 am

Jon Trickett (Hemsworth) (Lab): I am grateful for advance notice of the statement. That is particularly welcome given that the Secretary of State’s predecessor rarely turned up in person on these occasions, and when he did it was often with a snarl, rather than with the Secretary of State’s customary smile.

Labour Members join the Secretary of State in rightly paying tribute to local councils and all their staff. The statement contains a number of details that look welcome, and we shall return to them in due course. Sadly, however, the central message is the same as always: cuts, cuts and more cuts.

The Secretary of State admits to a cash decrease of £200 million between now and 2019-20, but he forgets to say that the additional spending pressures amount to at least £6.3 billion, according to the Local Government Association. That is the scale of the cuts that will be inflicted on our communities by this settlement. What calculation has he made of the additional cost to local government caused by inflation? What about demographic change, which means that more elderly people need support than ever before? What about the additional statutory duties that he is giving to local government? How will all that be paid for?

This settlement massively reduces the central Government grant to local government. Does the Secretary of State agree with the House of Commons Library, which has calculated that even if the central Government grant was maintained at its current level throughout this Parliament, the Government would still run an overall surplus on the revenue account of more than £4 billion a year in 2019-2020? Is it not the truth that these cuts are a political choice made in No. 11, rather than an economic necessity?

Does the right hon. Gentleman agree with his Conservative colleague, Lord Porter, chair of the LGA, who said:

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“It is wrong that the services our local communities rely on will face deeper cuts than the rest of the public sector yet again and for local taxpayers to be left to pick up the bill for new government policies without any additional funding. Even if councils stopped filling in potholes, maintaining parks, closed all children’s centres, libraries, museums, leisure centres and turned off every street light, they will not have saved enough money to plug the financial black hole they face by 2020.”?

The Government promised not to cut the budget for the NHS, but then they delegated public health functions to councils. Now they have cut that budget. Does the Secretary of State think that anyone is fooled when the Government act in such a way? Is it not a false economy to cut council funding for adult social care and public health? What is his estimate of the impact of those local government cuts on the NHS? Is it not obvious that if there is less care in the community and preventive health action by councils, there will inevitably be more pressure on more expensive acute provision within the NHS? Is that not the worst kind of Osbornomics? It is short-termist and tactical, rather than strategic and long term.

Does the Secretary of State accept that some of the councils facing the greatest needs in social care have the least ability to raise extra funds by levying the 2% precept? What about the northern powerhouse? Does he agree that cuts to northern local councils amount to tens of millions of pounds more than the relatively small sums that constitute the so-called powerhouse? No wonder the latest economic indicators show the north falling further behind.

The Minister mentioned council reserves, as if he thinks that councils are underspending on the revenue account and thereby building them up. What is his estimate of the quantity of the reserves earmarked by the Government for the Government’s specific objectives? What is his estimate of the amount of the reserves that are in schools’ accounts, and therefore inaccessible to councils? In any event, is it not the case that the reserves are often built up from asset sales and should not generally be used to prop up day-to-day spending?

The Secretary of State mentioned business rates. It is right that the money should be directed into town hall budgets—we welcome that—but the question he has failed to answer is this: how will business rates be distributed? Given that that income is notoriously uneven as between one council and another, how does he intend to make an equitable distribution of those funds? Does he accept the wise words of the Institute for Fiscal Studies:

“If you’re somewhere like Westminster, it’s easier to win from this system than if you’re somewhere like Wolverhampton”?

What estimate has he made of the distributional impact of the settlement on different councils? Does it maintain the trend of the past five years, when poorer urban councils lost out relative to more prosperous areas? Does some of his announcement not make the situation worse? The Joseph Rowntree Foundation has said that local authorities in deprived areas have seen cuts of £220 a head while more affluent areas have seen cuts of £40 a head.

Will the Secretary of State agree to look once more at the formula by which the Government distribute support to local government? He was not the author of the formula, but will he now re-examine the patent injustice in the way in which the money is distributed?

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Finally, the country needs a new political and democratic settlement. A renaissance of democratic, relatively fiscally autonomous and locally accountable councils needs to be at the heart of a new settlement. The recent floods showed councils and their employees at their best. We welcome any additional funding to help with flooding, and we also welcome the multi-year funding that the right hon. Gentleman talked about—the Opposition proposed it in the Cities and Local Devolution Bill but the Government voted against it. Will he come back to the House with more details as soon as possible?

The Secretary of State pays lip service to local government renaissance, but does not the announcement, with top line cuts of billions of pounds invariably falling on the poorest areas, reveal that the Treasury’s heavy hand means that the Government are unlikely to deliver the renaissance that is so necessary for our country?

Greg Clark: In the spirit of Christmas, I will be charitable to the hon. Gentleman, who understandably wrote his response before hearing the statement. Far from its being a tactical settlement—that is how he put it—there could be nothing more strategic than a settlement that, for the first time ever, gives what local council leaders have long called for: the certainty of a four-year funding settlement, previously denied them, which gives them the chance to manage their affairs in exactly the way they want.

As the hon. Gentleman might have expected from our previous exchanges, during the past few months I have spent a lot of time with local government leaders, listening to them talk about the most important pressures on them and the most important concerns that they would like to see reflected. They communicated very clearly that funding adult social care was the major priority for all kinds of councils, and in this settlement we deliver the extra resources that we promised. The distribution among the authorities reflects that—something I would have thought he would give us credit for.

On the overall settlement, few authorities would even a few months ago have expected the Secretary of State for Communities and Local Government to be able to announce, in effect, a flat cash settlement for local government for the whole of the spending review period.

The hon. Gentleman mentioned reserves. The fact is that local council reserves have increased over the past five years from £13 billion to more than £22.5 billion—a 71% increase. We do not assume in the settlement that local councils will make use of them, but they have the opportunity to do so because of the four-year settlement we have granted them.

The hon. Gentleman also mentioned the head of the LGA. I have met all the leading groups in the LGA, including his Labour colleagues. Because we are the biggest party in local government the hon. Gentleman suggests that the LGA is Conservative-controlled, but I have met local government leaders of all sorts. Lord Porter regards our discussions as fruitful and thinks that this is a fair financial settlement for all types of council and addresses the concerns they have put to me during the past few years.

Let me just refer to the expectations and the advice we received from those on the Labour Front Bench. When we had the financial statement last, year the

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previous shadow Secretary of State said that what councils needed was help with longer-term funding settlements so they could plan to protect services, and more devolution of power so they could work with other public services locally to get the most out of every pound of public funding, and that nowhere was that needed more than in social care. That is exactly what we deliver in this spending review settlement: prioritising social care, exactly what local government asked for; multi-year settlements, for which local government campaigned for many years; and the devolution of power to councils through the localisation of income, with councils responsible to electors and not to Whitehall.

Robert Neill (Bromley and Chislehurst) (Con): May I, too, wish you, Mr Speaker, and other Members a happy Christmas? I wish I could wish a happy Christmas to those on the Opposition Front Bench, but given that they look as flat as a soufflé that has gone off, we need not bother.

I congratulate my right hon. Friend on delivering what is, frankly, the most imaginative local government settlement I have heard in my time in the House, including those that I had to deliver myself. He has listened to local government. I particularly welcome the reflection he has made on the importance, stressed by the London Borough of Bromley and others, of the pressures on adult social care. Will he ensure that the same can-do attitude, which my local authority and all the people he talked to in the LGA have, is reflected in the health sector? Where we have co-terminosity with clinical commissioning groups, we really need the drive of local government, and the accountability of local government, to take those partnerships forward.

Greg Clark: My hon. Friend is absolutely right and characteristically self-effacing. During his time as a Minister in the Department, he made an enormous contribution to reforming and driving forward decentralisation.

I can confirm that part of the point of the money we have secured for the Better Care fund is that local authorities and the NHS work closely together, and to recognise that our elderly people, whether they are cared for in hospital, care homes or at home, are our joint responsibility. This provides the opportunity for councils to work together in the interests of our growing elderly population.

Mr Clive Betts (Sheffield South East) (Lab): To show there is some charity, at least on the Labour Benches, I welcome what the Secretary of State says about the ending of double-counting of the Better Care fund. On the four-year settlement, we may have disagreements about the details, but the principle is correct.

May I draw the attention of the Secretary of State to the 6% real cuts figure? According to the LGA, it does not take account of increasing demand from the growing number of elderly people, nor of the extra costs imposed on local government by specific central Government policies. I also draw his attention to two other things: the increase in the minimum wage will have a particular impact on the cost of social care, and the pension changes will have a cost in national insurance. Do the

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Government recognise them as new burdens? If they do not fund them as new burdens, does the right hon. Gentleman recognise there will be extra cuts to local government services that are not recognised in his statement?

Greg Clark: I am grateful to the hon. Gentleman for his comments. His Select Committee and its predecessors have long called for four-year settlements and the devolution of powers. We have made a choice, advised by local government, on a flat cash settlement over the spending review period to prioritise adult social care. That is what we have done in this settlement. As I made clear when I talked about candour at the beginning of my statement, that of course means that authorities need to continue to make savings in areas outside those for which we have provided extra funds. That is accepted and understood. We have also agreed that they should be at a lower rate than was necessary at the beginning of the previous Parliament. I think local councils will welcome that.

David Tredinnick (Bosworth) (Con): Conservative-controlled Leicestershire County Council is one of the best in the country, but its funding is the worst. I am sure the Secretary of State’s innovative statement today will be welcomed in the county, not least because it gives additional freedoms. Market Bosworth is now world-famous since the reinterment of Richard III, something my right hon. Friend can check when he goes overseas and asks anybody. The initiatives for rural areas will be very welcome. In the rural parts of my constituency, there is a feeling that they have been neglected. Will my right hon. Friend explain a little more about the social care precept of 2% and how it will affect hard-pressed Leicestershire, which has terrific difficulties in meeting its social care targets at the moment?

Greg Clark: I join my hon. Friend in praising Leicestershire County Council, which was one of those that made representations asking that its substantial social care costs be recognised. As a result of the settlement, by the end of the spending review period, in 2019-20, the resources available to Leicestershire will have increased by 3.5%, which will help to meet the costs he describes. I am certain that a council as well run as Leicestershire will make use of that to the great benefit of his elderly constituents.

Jack Dromey (Birmingham, Erdington) (Lab): Erdington, which is rich in talent but one of the poorest constituencies in England, lies in a city, Birmingham, suffering the biggest cuts in local government history. The consequences for the city will be serious: for children’s safety when travelling to school, with the cutting of school crossing patrols: for vulnerable families, with the end of Home-Start after 25 years; and for vulnerable and disabled people in need of social care. In my experience, the Secretary of State is a decent man, and he said today he was prepared to listen. Will he therefore agree to meet me and my Birmingham colleagues to hear the case for a fair deal for Birmingham?

Greg Clark: Of course I will. I am always delighted to meet the hon. Gentleman and his Birmingham colleagues, as well as my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell) who shares his commitment to that great city. The spending review recognises the increased

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costs faced by social services authorities such as Birmingham;, and in recognition of those pressures, by the end of the spending review period, in 2019-20, his city will have a spending power per dwelling £200 higher than the national average.

Dr Tania Mathias (Twickenham) (Con): Mr Speaker, I wish you and everyone else in the House a very merry Christmas.

I ask the Minister not to penalise councils that are already very efficient. In the £3.5 billion made available for social care, will he please take into account Richmond upon Thames Council, which is efficient but has great needs because of the disproportionate number of over-65s living alone? Will he please meet me and council leaders to discuss next year’s budget?

Greg Clark: I think that my colleagues and I are going to be busy after Christmas meeting many hon. Members, but I am certainly happy to meet my hon. Friend. I pay tribute to the efficiency of Richmond upon Thames Borough Council. The two contributions—the proposed precept and the addition to the better care fund—will be allocated in complementary ways, which is what local government leaders across the country have recommended to us.

Mr Nicholas Brown (Newcastle upon Tyne East) (Lab): This is a highly political statement dressed up as localism. Will the Secretary of State acknowledge that the distributional effect of his proposal means that every single local authority in the north-east of England will lose out? Will the intervention he announced on social care cover children in care as well as adults?

Greg Clark: The right hon. Gentleman must have second sight to know what the impacts will be before he has looked at the figures for those particular authorities. Of course, by prioritising social care we are directing resources to authorities with responsibility for children’s social services as well as adult social services. Compared with what would have happened in the steady state, as it were, authorities such as his own in Newcastle upon Tyne will benefit.

Mrs Anne Main (St Albans) (Con): Conservative-led Hertfordshire County Council and St Albans District Council are among the most efficient councils in the country, but they face a large problem in the form of a sinkhole that is costing millions and will be an ongoing event. This is a big deal in St Albans. Will recognition be given to special events, such as the Cumbria floods, that require from councils a significant ongoing commitment to emergency repairs?

Greg Clark: I understand that every local authority has unique circumstances and faces unique pressures. Part of the responsibility of local government is to anticipate and prepare for them. In the course of the consultation on the settlement, either I or one of my ministerial colleagues would be happy to meet my hon. Friend to understand the particular circumstances of her council.

Mr David Winnick (Walsall North) (Lab): I do not know what happens in Tunbridge Wells, but let me tell the Secretary of State that in the real world of the

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Walsall borough hardly a week goes by without news of further cuts to essential services and facilities or of services being abolished altogether. Even the Tory leader of the council has made it known how concerned he is at the impact of these cuts on the borough. Would it not be wise to understand that in areas of deprivation and low income, it is essential for the Government to adopt a different direction of policy? Otherwise, it will certainly not be a merry Christmas or a happy new year for the people most vulnerable to the cuts.

Greg Clark: I have some news that might cheer up the hon. Gentleman—it looks as though he may need it. By 2019-20, as a result of this settlement that, as I have said, recognises the pressure on authorities with social care responsibilities, the resources available to the hon. Gentleman’s council in Walsall will have increased by 1.5%.

Nusrat Ghani (Wealden) (Con): Yesterday, together with my hon. Friend the Member for Lewes (Maria Caulfield), I met the leaders of East Sussex County Council to discuss their budget plans and priorities. They will welcome today’s announcement, especially the focus on longer-term funding and the recognition of the difficulties of rural councils. East Sussex has the highest number of 85-year-olds of any county in the country, and I believe that my Wealden constituency has the highest number in the country. Will the Secretary of State give my council further confirmation that the differing demands on local authorities in respect of adult social care will be taken into account?

Greg Clark: I know my hon. Friend’s constituency very well as she is my parliamentary neighbour. I understand that the pressures on adult social care for elderly people are significant. She will be pleased to know that by 2019-20 the resources available to East Sussex County Council will increase by 1%.

Clive Efford (Eltham) (Lab): My local authority faces cuts of £77 million next year, and as the Secretary of State has indicated, there will be precious little left to invest back into social care costs. If my council is to meet the growing demand for social care, it certainly needs to be able to ensure that extra funds are made available from the savings it can make. Is the Secretary of State confident that the funds made available will mean that people will not miss out on social care over the next five years?

Greg Clark: These are, of course, decisions for the local council. In the settlement we have prioritised councils that have social care responsibilities. In his own borough, the un-ring-fenced reserves are nearly a fifth of a billion pounds, so the council can itself make some contribution to meeting those costs.

Jason McCartney (Colne Valley) (Con): The Secretary of State is absolutely right that local councils are answerable to local people. As he is aware, there is a very lively debate going on in Yorkshire at the moment about the relative merits of a West Yorkshire model and a Greater Yorkshire model of devolution. Will my right hon. Friend update us on when he sees a deal eventually being done in Yorkshire?

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Greg Clark: I am keen to see a deal in that great county. I know that discussions are at an advanced stage. I do not think it is going to be an early Christmas present for my hon. Friend, but I hope that early in the new year, the good people of Yorkshire will agree to take on the powers and resources on offer through our devolution programme.

Valerie Vaz (Walsall South) (Lab): A merry Christmas to you, Mr Speaker, and thank you for calling me earlier. I am afraid I came into the House after the start of the statement, so I did not deserve to be called in that way.

In Walsall South, libraries are closing, there is a disproportionate cut to the public health budget, and it is difficult to recruit and retain social workers. Will the Secretary of State confirm that under the settlement that he has just announced, all those services will be protected and there will be no need for further cuts in those areas?

Mr Speaker: The hon. Lady is a model of candour, whose example should be imitated by all Members.

Greg Clark: I am happy to answer the hon. Lady’s question. As I said to her hon. Friend the Member for Walsall North (Mr Winnick), the resources available to Walsall will increase by 1.5% by 2019-20. Of course, as I said in my statement, savings will continue to need to be made in other areas right across local government. It is for the councils themselves to make those decisions, but they now have the ability with the certainty of four-year budgets and a possibility of reform within those years to make those savings, to protect those services and to make sure that elderly and vulnerable people are well looked after.

Graham Stuart (Beverley and Holderness) (Con): I welcome today’s statement and the increase in the rural services delivery grant, which will increase the amount per head from around £1.10 to about £5.50, I assume. I also note that in comparison with urban authorities the gap in central Government grant will remain at £130 per head. Will the Secretary of State meet me and other colleagues to discuss the next steps beyond this to make sure that we get a fair settlement for rural and urban alike and so determine whether rural colleagues will be able to join the Secretary of State in the Lobby in support of the settlement in February?

Greg Clark: I pay tribute to my hon. Friend, who has been a persistent and effective campaigner, drawing attention to the special costs that the most sparse rural authorities face in providing services. We have gone a long way, based on the evidence we have seen, to address those needs. I and my colleagues will be happy to meet my hon. Friend and other colleagues to discuss how it will work out in practice.

Mr Graham Allen (Nottingham North) (Lab): Does the Secretary of State accept that the paradox of the statement is exemplified by my own city council, which has had a reduction of nearly 50% in its central Government grant since 2010, yet also a massive increase in responsibilities? Pretending that adult social care can be picked up by a 2% increase in council tax is obviously nonsense. He realises, I am sure, that to resolve his

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dilemma, he should enable—as every other western democracy has—local authorities throughout England to retain and raise funds of their own so that they can effectively no longer be an agent of central Government. That, surely, is the difference between devolution and decentralisation.

Greg Clark: The hon. Gentleman will know more than most that simply looking at central Government grant in an age in which local councils, at their own request and following their own campaign, are increasingly in charge of their own resources, is not the right way to consider the issue. We should look at the total resources available, including the business rate revenues, in respect of which Nottingham and Nottinghamshire authorities are doing very well, rightly attracting more businesses and expanding businesses. That is a buoyant source of income for his city and his county.

Maria Caulfield (Lewes) (Con): As my hon. Friend the Member for Wealden (Nusrat Ghani) said, we met local councils yesterday and we were told that the counties of East Sussex, West Sussex and Surrey are joining together for a devolution bid, called “The three southern counties” bid. Currently the area’s contribution to the Exchequer’s revenue is second only to that of the City of London. Can the Secretary of State inform us what influence, if any, devolution bids such as “The three southern counties” bid will have on today’s funding settlement?

Greg Clark: I am grateful to my hon. Friend for her question, and I look forward to the discussions with the council leaders about the devolution deal. Today’s settlement does not include the effects of those deals. One proposal that we will consider is for the earlier retention of business rates. I am delighted that such imaginative proposals have been put forward locally.

Ms Gisela Stuart (Birmingham, Edgbaston) (Lab): The Secretary of State said that he would take account of demography: the ageing population and the density of population. I also urge him to take note of the few places in the country that have an extremely young population. In Birmingham, 30% of the population is below the age of 15. When he meets the group of MPs, can we discuss how his settlement will affect the special needs of the city?

Greg Clark: Of course I will, and when we have that conversation, the right hon. Lady will make the case for Birmingham. As I have said, it is important to recognise the need to help with social care pressures, and that is what we have done in the settlement.

Bill Wiggin (North Herefordshire) (Con): I welcome this excellent statement on behalf of the people of Herefordshire, but may I ask the Secretary of State to keep a watching brief? I know that he has set four-year budgets, but each county faces specific challenges.

Greg Clark: I will certainly consider the case that my hon. Friend has made. However, one of the advantages of a four-year settlement is that local authorities can prepare for the future and manage their resources well, rather than being subject to occasional year-to-year variations in the national Government income. It gives

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them a greater proof against the uncertainty that they have experienced for a long time about what is coming each year.

Karin Smyth (Bristol South) (Lab): I am pleased that the Secretary of State has noted the criticism by the Public Accounts Committee of the handling of the better care fund and the public health grant. However, a year ago the National Audit Office reported that his Department had

“a limited understanding of the financial stability of local authorities”,

and the position is being made worse by the complexity of devolution.

The Public Accounts Committee, of which I am a member, considered city deals, the Care Act 2014, and—as was mentioned by my hon. Friend the Member for Sheffield South East (Mr Betts)—the new burdens that are being imposed. Bristol’s people service was already £6.3 million overspent by November. What assurance can the Secretary of State give us that he is heeding the Committee’s recommendations, and that, given the various announcements about policy and cuts, he really understands and has a grip on the financial sustainability of local authorities?

Greg Clark: The hon. Lady suggests that uncertainty is a source of concern in local government. That is exactly why we heeded the calls of local government for us to provide the certainty of four-year budgets.

Mr David Burrowes (Enfield, Southgate) (Con): Enfield council lays the blame for the cuts in adult social care provision fairly and squarely at the Government’s door. It has already consulted my constituents, and it says that the cuts will amount to some £10 million by 2018, including £900,000 of transport cuts that will affect vulnerable people. Can the Secretary of State confirm—not least to Enfield council and my constituents—that the council will have the resources and the choice that will enable it to protect the vulnerable?

Greg Clark: We responded to what local authorities had said about the need to recognise the importance of social services. My hon. Friend’s borough council has both upper-tier and lower-tier responsibilities, and in respect of the activities that it is required to perform in order to discharge its social services responsibility, it will benefit from this allocation.

Ruth Cadbury (Brentford and Isleworth) (Lab): My best wishes for Christmas to you and all your staff, Mr Speaker.

I do not think that the Secretary of State answered the question asked by my hon. Friend the Member for Bristol South (Karin Smyth). Let me repeat, according to the National Audit Office,

“The Department has a limited understanding of the financial sustainability of local authorities”.

The NAO advised the Department to

“look for evidence of financial stress in local authorities”

to assure itself that they were able

“to deliver the services they are responsible for.”

May I give the Secretary of State another opportunity to explain in detail—rather than repeating his mantra

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about a four-year budget—what work he did, before making his announcement, in order to understand the financial sustainability of different authorities?

Greg Clark: Every council has a statutory responsibility and a section 151 officer who is required to report, in real time, on the financial sustainability of the council. I have received no representations from a section 151 officer suggesting that a council is unviable. In recent years, the Local Government Association has been helping councils that require advice and assistance, and I expect that it will wish to go on doing so.

Martin Vickers (Cleethorpes) (Con): The Secretary of State is shortly to visit my constituency to discuss generation in the local economy. Will he expand a little on how the settlement will help local authorities in that regard? The other major challenge facing my authority is adult social care. When he visits the constituency, will he also discuss that with council leaders?

Greg Clark: I will indeed. My hon. Friend is a long-time campaigner for more independence and autonomy in local government. I know that his council will welcome the certainty of a four-year budget, and I shall be happy to meet its representatives when I visit his constituency again.

Mr Chuka Umunna (Streatham) (Lab): Whatever the Secretary of State says about available resources and reserves, he should be in no doubt that, in Lambeth and elsewhere, the reduction in central Government grant has led to, and will continue to lead to, cuts in front-line services. It is important that those who object to those cuts, and who demonstrate against them peacefully, protest not about our Labour councillors who have been forced to make the cuts, but about this Tory Government. Protesters should not be doing the Government’s dirty work by misattributing blame.

May I ask the Secretary of State how he expects my borough of Lambeth to carry on providing basic services when the Government have cut its budget by 56% since 2010?

Greg Clark: I think the hon. Gentleman’s local residents will be relieved that a Labour Government were not returned after the general election, not least because it was the Labour party’s stated commitment to cut local government funding. As for Lambeth, we have, against all expectations, been able to protect the resources available to the council so that it can make decisions that will help vulnerable residents, as I know it will wish to do.

Bob Blackman (Harrow East) (Con): I commend my right hon. Friend’s wise decision to heed the recommendations of the Select Committee on Communities and Local Government. I trust that that will continue into 2016 and beyond.

My right hon. Friend will be aware of concern about the fact that councils are increasing charges for monopoly services above the rate of inflation. What action is he taking to ensure that residents are not overcharged for services that they cannot obtain anywhere else?

Greg Clark: I entirely agree with my hon. Friend. When councils charge for services, the general principle should be cost recovery and no more. I would expect

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councils then to become more efficient and to pass on their efficiency savings to their residents, as they ought to do.

Mr Iain Wright (Hartlepool) (Lab): Hartlepool borough council’s grant has been reduced by 40% over the past five years. That equates to a cut in spending power of £313 per Hartlepool resident, which is twice the national average. In addition, the council has lost—this year, and in recurring years—£3.9 million from the business rates of the nuclear power station, which previously equated to a quarter of all business rates collected in the town. The council had no say, no power and no influence in regard to that decision, which makes a mockery of the Secretary of State’s claim in his statement that retaining 100% of business rates would “forge the necessary link between local business success and local civic success.”

Given the real threats to the provision of local services, and the somewhat distinctive nature of the local economy and the business rates base, will the Secretary of State acknowledge that Hartlepool faces a real problem, and will he agree to meet me and discuss ways of mitigating the massive pressure on the council’s budgets?

Greg Clark: Of course I recognise that in particular instances—such as the nuclear power station that the hon. Gentleman mentioned—there is a very specific impact, and I shall be happy to meet him to discuss that. However, as Chairman of the Business, Innovation and Skills Committee, he will know that businesses have long called for a closer connection between councils and the businesses in their areas. The 100% retention of business rates will create an unbreakable link between the success of businesses and councils, and I would expect the hon. Gentleman to welcome that in his capacity as Chairman of the Committee.

Kevin Foster (Torbay) (Con): Coastal communities such as Torbay, which has both an ageing and a younger population, face a range of unique challenges. How will the settlement deal with the needs of such communities?

Greg Clark: My hon. Friend has made a good point in drawing attention to the fact that coastal communities such as his contain a high proportion of elderly people, and often require child social services as well. The settlement will direct funds to authorities such as his for precisely the reasons that he has mentioned.

Tom Brake (Carshalton and Wallington) (LD): Following your earlier entreaty, Mr Speaker, that Members should demonstrate candour, I should perhaps start by declaring an interest in that my wife works for a district council.

The Secretary of State casually shrugs off the impact on councils of the cuts they will have to make by 2020, ignoring the fact that now the number of children’s services rated as inadequate outnumber those rated as good, well-run councils are having to consider closing youth centres and adult social care services are under huge pressure. Does he accept that a shortfall in central Government funding for local services risks hitting the most vulnerable first and that devolving responsibilities

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to local councils without associated funding simply puts councils in charge of implementing his Government’s cuts?

Greg Clark: From listening to the right hon. Gentleman, we would think he wanted to centralise the power and take the resources back to the centre. I seem to remember working with his colleagues in government who purported to be in favour of decentralisation. When I was in the Department at the beginning of the previous Government, of which his party was a member, the savings that were required of local government were higher than we are proposing in this settlement.

Mr David Nuttall (Bury North) (Con): Does the Secretary of State agree that the ongoing need to control costs means it is more important than ever for local councils to look at innovative ways of combining back-office functions across local authority boundaries?

Greg Clark: I agree with my hon. Friend and, as I have said throughout the statement, prioritising social care means savings do need to be made in other parts of councils’ operations. An excellent way to do that is to combine councils’ administrative services that cross borders.

Mr John Spellar (Warley) (Lab): May I put it to the Secretary of State, the Member for Tunbridge Wells, that while the Government talk about the revival of our great cities of the north and midlands, this statement follows the long-standing policy of discrimination against the metropolitan boroughs, with disproportionate cuts not only to local council budgets, but to police and fire services as well? Will he now answer the question posed by the Opposition spokesman as to how he will deal with the dramatically different income levels from the business rate to boroughs, especially those in central London compared with the rest?

Greg Clark: I would have thought the right hon. Gentleman would have taken the opportunity of being here today to applaud the success of the west midlands. It has agreed a devolution deal that will bring £1 billion of extra resources into his area. On the 100% business rate retention, of course that needs to recognise that some places will need to contribute to others. That is well understood and during the months ahead we will be working with local government to find the best way to address that requirement. That is not part of this settlement because that comes in from 2019-20.

Tim Loughton (East Worthing and Shoreham) (Con): I applaud the certainty of long-term budgeting that the Secretary of State has brought in, but what is not certain is how the 2% precept for elderly social care will stretch for areas with very high very elderly populations such as mine. Some 4.6% of the population of Worthing is over the age of 85; they live a long time in Worthing, thank goodness. What consideration has he given to those additional costs on social care for the very elderly?

Greg Clark: I understand the point my hon. Friend makes. In moving money within the system to authorities with social care responsibilities, we have taken account of the pressures. I am sure he will want to meet me and my colleagues to talk about the particular circumstances of Worthing. West Sussex as a whole has the responsibility

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for this, and I can tell my hon. Friend that its funding will increase by 2.9% by 2019-20, which will provide a big help in meeting these costs.

Andrew Gwynne (Denton and Reddish) (Lab): The full integration of health and social care in Tameside has already led to £30 million of recurring savings being identified, but that still leaves £40 million to find through other efficiencies. The Chancellor’s social care levy on the council tax only raises £1.4 million because of the low council tax base, against a social care shortfall of £16 million. So how much of that extra money announced today will Tameside receive—not as a percentage, but in real cash terms—and how much of that £16 million social care gap does the Secretary of State anticipate will be filled?

Greg Clark: What I can tell the hon. Gentleman is that the allocation of the better care fund is done in a way that is complementary to the 2%, to recognise the particular pressures in authorities such as his. The answer to his question is that the package for adult social care, including both elements, will add almost £16 million to Tameside by 2019-20.

Marcus Fysh (Yeovil) (Con): Somerset county council, of which I am a member, has faced significant challenges over the last few years both on account of the fact that it is a rural council, which means it has not had as much money as some of the urban ones, and because it has had to deal with nearly £400 million-worth of debt, which the previous Liberal Democrat administration had run up. Will my right hon. Friend meet me and the council leaders to help to welcome this, and also to talk about how things will work for Somerset in practice over the next four years?

Greg Clark: I and my team stand ready to meet with colleagues to discuss local circumstances. I can tell my hon. Friend that as a result of this settlement Somerset will receive an increase in its spending power of 4% by 2019-20, which I know will be a big help.

Christian Matheson (City of Chester) (Lab): Cheshire West and Chester Council’s budget is being cut by central Government by £47 million. I hope the Secretary of State is clear that when local services are scrapped or cut, responsibility for that will lie squarely at the feet of himself and the Chancellor.

May I ask the Secretary of State about the new homes bonus grant, particularly in the light of his longer-term and four-year budgetary proposals? I understand that when it was first introduced, payments were to be made to councils for six years, and councils have planned their income on that basis. We understand now that payments might be made for only four years, which will of course restrict the ability of councils to respond to that grant. Will the Secretary of State clarify the situation?

Greg Clark: If the hon. Gentleman believes councils should be in charge of their own destiny and count on their own resources, he will need to understand that we are moving into a world in which councils are financed locally, not centrally. He will want, I am sure, to discuss with his council how it is going to make spending decisions.

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On the new homes bonus, the good news for councils across the country is that we are continuing that very successful policy. We are consulting on some possible changes, and one option is to reduce the period from six years to four for new developments. Councils will continue to receive the funding that they have expected for developments they have approved. If we do go with that option, the funds that are released will be invested in social care.

Matt Warman (Boston and Skegness) (Con): The people of Lincolnshire will particularly welcome increased funding for rural, sparsely populated areas, but may I ask the Secretary to State to continue—he has done this previously—to bear in mind that in areas such as Fenside in Boston and Skegness there is also genuine deprivation? Can he tell us a little more about what he will be able to do for those areas of deprivation through means such as the attendance allowance?

Greg Clark: One of the things we will be doing over the years ahead is looking at what services and responsibilities can be devolved to local councils, recognising the fact that if we are going to devolve 100% of business rates, it is an opportunity to devolve some functions that have previously been in central Government. Attendance allowance has been suggested, and we will consult on that, alongside other services that could potentially be in the hands of local councils.

Stephen Pound (Ealing North) (Lab): I congratulate the Secretary of State on the appointment of his Parliamentary Private Secretary, the hon. Member for Burton (Andrew Griffiths), who has demonstrated the most remarkable level of assiduity this afternoon, ripping off crib sheets on every single constituency—and let me just say, for the sake of clarity, Ealing. [Interruption.] And here it is! But my question is not about Ealing—we have suffered enough. My question is about the new homes bonus, which has not been markedly successful. The Secretary of State has announced that he is extending it indefinitely, but at the same time he says he is consulting. Why is he extending before the consultation period finishes, what form will the consultation take, and how will he report it to the House?

Greg Clark: I am very disappointed that the hon. Gentleman has not asked me about Ealing, as I now have lots of information about Ealing that I could have shared with him. Perhaps I will give it to him at another time. The answer to his question on the new homes bonus is very simple: we are going to continue it, but in doing so, there will be different options as to how it might work. That is what we are consulting on, and we will publish the consultation. I am sure that the Select Committee will want to give its advice, as will other hon. Members.

Julian Knight (Solihull) (Con): In Solihull, we have an average age of 43 compared with a UK average of 39. We have an ageing population, so the focus on adult social care is particularly welcome for my constituency. Can my right hon. Friend tell the House what specific discussions he is having with local government on the funding of adult social care? What assurances can he

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give us about councils not using up the £22 billion of reserves, bearing in mind that it is six weeks’ worth of cash?

Greg Clark: In the case of Solihull, there will be £12 million available from the social care package for it to use. The great advantage of a four-year settlement is that reserves can be used to smooth the transition over the spending review period with the certainty and confidence that comes from knowing what the budgets are going to be for each of those years.

Mr Dennis Skinner (Bolsover) (Lab): In the hour since the Secretary of State got to his feet, he has not once acknowledged that this statement today is set against a background of Derbyshire, for example, having a 40% cut in its grant a few years ago. It has still not recovered from that £157 million cut. That is what he does not recognise. And I will tell him something else, in a question. Does he understand that this is like a Budget statement made by his pal Osborne, of the northern poorhouse variety? It is going to unravel as it goes along. The Minister had better glory in these few moments because by tomorrow, and certainly by next week when the detail is out, people will realise that it is nothing but another Tory con.

Greg Clark: The hon. Gentleman is characteristically churlish. If he had listened to my statement, he would have heard me pay tribute to the savings that councils have made, and of course they had to make them because we had the biggest deficit in peacetime history bequeathed to us by the party of which he is a member. What we are doing in this settlement is providing extra resources to meet the pressures on social services that have been identified. In the case of Derbyshire, that includes an increase of nearly £50 million in funding for adult social care from the package announced in the spending review.

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Strathclyde Review

12.43 pm

The Leader of the House of Commons (Chris Grayling): With permission, Mr Speaker, I will make a statement on Lord Strathclyde’s review. The Government have today published “Strathclyde Review: Secondary legislation and the primacy of the House of Commons”. On behalf of the House, I should like to thank Lord Strathclyde for his work.

The Prime Minister invited Lord Strathclyde to undertake this review after constitutional questions were raised about the primacy of this elected House of Commons. There is a balance to be struck between the interests of proper parliamentary scrutiny and the certainty that Government business can be conducted in a reasonable manner and time. The House of Lords is a revising Chamber with an important core purpose: to complement the House of Commons and, in doing so, give the public confidence in what Parliament decides. On primary legislation, it can fulfil this purpose by asking the House of Commons to think again, through the process known as ping-pong. But ultimately, with the backstop of the Parliament Acts, the will of the elected House can prevail.

That is not the case for secondary legislation, in relation to which the House of Lords can only approve or withhold its approval. Given this, Lord Strathclyde was asked whether there was a better way to handle secondary legislation that would give the elected House of Commons the decisive say. He consulted parliamentarians in both Houses and from across the political spectrum in the course of the review.

In his report, Lord Strathclyde has outlined three options to provide the House of Commons with that decisive vote. Option 1 would remove the House of Lords from the statutory instrument procedure altogether. Option 2 would retain the present role of the House of Lords but clarify the restrictions on how its powers to withhold approval or to annul should be exercised. Option 3 would create a new procedure in statute. That is a compromise option that would provide the House of Lords with the ability to ask the House of Commons to think again but would give the final say to the House of Commons. This would be achieved by allowing the Commons to override a vote by the House of Lords to reject a statutory instrument. Lord Strathclyde has recommended the third option. He also recommended that the Government, with the involvement of the Procedure Committee, should review the circumstances in which statutory instrument powers should be subject to Commons-only procedures, especially on financial matters, and that the Government should ensure the appropriate use of primary and secondary legislation.

The Government will need to consider Lord Strathclyde’s review and his recommendations carefully, and we will respond fully when we have done so. Clearly there will be views in both Houses as to the best way forward, and we will want to listen to those views as we decide on our preferred approach. We have begun doing so today by making oral statements in both Houses.

We are very clear that all Governments require, and indeed benefit from, a strong Parliament holding them to account and providing scrutiny. As Lord Strathclyde’s report highlights, the House of Lords has long played

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its scrutiny role effectively. It provides that scrutiny and challenge, but we also think it important that the elected House should be able to have the decisive say on secondary legislation as well as on primary legislation. Such a balance will allow the other House to deliver its core purpose more effectively. We will therefore study Lord Strathclyde’s review in detail and respond fully next year. I commend this statement to the House.

12.46 pm

Chris Bryant (Rhondda) (Lab): I am grateful to the Leader of the House for giving me advance notice of his statement, which I received in exemplary fashion before 10 o’clock this morning.

I am afraid that this has all the hallmarks of government by fit of pique. The Leader of the House says that the review was set up “after constitutional questions were raised about the primacy of this elected House of Commons”. What utter tosh! The only people who were raising constitutional questions were the Prime Minister, the Chancellor and the Leader of the House himself, who were stamping their little feet because they had not got their way. There were protests, yes, but people were not protesting against the Lords. They were protesting against the Government’s miserly attempt to cut working tax credits. The truth is that this is payback time. It has absolutely nothing to do with principle. Maybe the Leader of the House is still smarting from losing more votes in the House of Lords as a Minister than any other Minister in the last Parliament—24 in all, or a quarter of the total number of lost votes.

The most astonishing thing, however, is how Lord Strathclyde has done an about-turn. In 1999, when in opposition, he said of the convention that the House of Lords did not strike down statutory instruments:

“I declare this convention dead.”

But now he wants to resurrect it. There’s a word for that. Between 2001 and 2010, when Lord Strathclyde was Leader of the Opposition in the House of Lords, he led his colleagues through the Division Lobby to defeat the Labour Government 390 times, including once on a fatal motion on a statutory instrument. Now he thinks that that is a disgraceful way to behave. There’s a word for that.

This was meant to be all about the financial privilege of the House of Commons, but can the Leader of the House confirm that the review makes no distinction whatever between secondary legislation where financial privilege is concerned and any other form of secondary legislation? In essence, the Government are seeking to stop the Lords having any right to oppose any secondary legislation, whatever they might put through in it.

Does the Leader of the House accept that the other problem with secondary legislation is that because it is unamendable, each House is simply asked to say aye or no, content or not content? So ping-pong does not make any kind of sense. The report does not make sense, either. It seems to imagine a statutory instrument being sent back to the Commons, but the two Houses have completely distinct processes for deciding on secondary legislation. Every piece of secondary legislation that is now advanced depends on a parent Act. Each of them specifies whether the regulations shall be subject to the affirmative or negative decision process and whether there has to be a vote in one or both Houses before

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coming into force. Are the Government really intending retrospective amendment of each one of these Acts of Parliament? There is a simple answer to this problem: use less secondary legislation and only use secondary legislation for non-contentious matters—do not use it for significant matters that dramatically affect households in this country.

The House of Lords is far from perfect—the Prime Minister has packed it with 240 new Members, doing so faster than any Prime Minister in history—but surely it would be wrong to deal with aspects of the powers and the role of the Lords without considering its composition. Is it not time we had a constitutional convention and proper, thoroughgoing reform? There is a pattern here: the Government have changed the voting rights in this House; they have curtailed the rights of trade unions and voluntary organisations to campaign; they have made it more difficult for the poor and the young to register; and today we learn that they have increased the number of Conservative special advisers from 74 to 96, costing an additional £1.6 million a year, even as they want to cut the support for Opposition scrutiny of this Government by 20%. Where there is dissent, they crush it. Where a body opposes them, they neuter it. That is not a Conservative Government, respectful of the constitution, dutiful in their dealings with their opponents, cautious in advancing radical change and determined to govern for the whole nation. It is not a Conservative Government; in the words of one of their former leaders, Disraeli, it is an “organised hypocrisy”.

Madam Deputy Speaker (Mrs Eleanor Laing): Order. The hon. Gentleman knows that I will not allow him to use that word that he has just used—the very last one.

Chris Bryant: Those were words used by Disraeli in this House. I am not maintaining that any Member has acted hypocritically, but I am saying that this set of proposals is an organised hypocrisy.

Madam Deputy Speaker: I accept what the hon. Gentleman is saying, but the fact that Disraeli was also wrong does not make him right. I am sure he will find a better way of putting that last sentence he used.

Chris Bryant: Well, Madam Deputy Speaker, what word would you use for it? Let me make it absolutely clear that I am not imputing any sense of dishonourableness to any hon. Member of this House or any other House, but I am saying that the Government are trying to get something through the back door and that that is not fundamentally, for the Government, an honest way of behaving.

Madam Deputy Speaker: I accept that the hon. Gentleman is not impugning any Member of this House, so for the moment I will let him away with it.

Chris Grayling: It does not feel as though we are trying to move anything through the back door, given that I am standing in front of the House making a statement and setting out a report that has been prepared with a number of options for the Government to consider and undoubtedly for this House to debate before any legislative change could happen—if legislative change

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were to be adopted as a result of this report. There is a degree of faux outrage from the other side on this matter.

Let us be clear about what happens. This House has an elected mandate, unlike the House of Lords. Our majority Government have a democratic mandate to implement our manifesto, and that is what we have sought to do. The conventions that have guided the relationship between the House of Lords and the House of Commons have existed for a very long time, and they have indeed broken down over many years. The Government’s view is that it is time to re-establish a framework for the relationship between the two Houses which reflects the fact that this is the elected House of Commons. That is the purpose of the report, and it sets out three options for all of us to consider. Of course it makes specific reference to the issue of financial matters. The Commons has had primacy over financial matters for centuries; there are already Commons-only statutory instruments on financial matters. What occurred this autumn was the first time that a financial matter that had come before the House of Lords had been rejected—it was the first time a fatal motion had been used. Over the previous decades there had been hardly any fatal motions on SIs. On reading this report—I again thank Lord Strathclyde for his work—it is my view that in many respects it gives the Lords a clearer and broader role in the consideration of secondary legislation, while also making it clear that ultimately the democratically elected Chamber has to have the final say.

When the shadow Leader of the House talks about using less secondary legislation and about the composition of the House of Lords, I simply look back to my first few years in this House, and indeed yours, Madam Deputy Speaker, given that you were first elected in 1997, and I can say that I have no memory of a shortage of SIs being brought forward under the Labour Governments. I also have no memory of a shortage of appointments by Tony Blair of his friends and cronies to the House of Lords over an extended period, so I will take no lessons from Labour Members.

Mr Bernard Jenkin (Harwich and North Essex) (Con): May I welcome my right hon. Friend’s statement and join him in thanking Lord Strathclyde for his report? The Government could not have chosen a safer pair of hands for such an inquiry, and of course it does avoid the whole issue of the composition and other aspects of the House of Lords. Perhaps that is timely and convenient, but we will have to address those things.

May I welcome the proposal for dealing with this by primary legislation? The Public Administration and Constitutional Affairs Committee will wish to look at this, just as the Procedure Committee will. We have some questions: how often will this procedure be used? What kind of behaviour of the two Houses will we adopt? Would it be justified in using this procedure to deal with particular SIs that amend primary legislation through the so-called Henry VIII clauses? Would it be right to be able to use what one might call a “ding-dong” procedure, as opposed to a ping-pong procedure, simply to force through amendment to primary legislation in this way? I assure my right hon. Friend that we will be looking at these matters in great detail.

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Chris Grayling: I am grateful to my hon. Friend for his comments about the report and the work done by Lord Strathclyde. I would expect nothing less of my hon. Friend’s Committee or of the Procedure Committee than the approach he has set out—both will want to express views on this. In Lord Strathclyde’s comments about financial matters, he expressly makes reference to the need to work with the Committees of the House of Commons to do these things. I look forward to seeing my hon. Friend’s work on this subject, as debate and discussion will be an important part of shaping a better relationship between the two Houses.

Pete Wishart (Perth and North Perthshire) (SNP): May I thank the Leader of the House for early sight of his statement? Rarely has there been a review of such pointlessness, with such a pre-arranged outcome, as this endeavour in absolute uselessness. In the battle of blue verses ermine there was only ever going to be one victor, and it was not going to be our unelected friends down the corridor. The House of Lords as the be-ermined tribunes of the people was always an unlikely concept, but this Government have decided that they will never allow themselves to be embarrassed by the Lords again.

I quite like option 1. I like it up to a certain part, as it says it would

“remove the House of Lords”.

Why could we not just leave it at that and get on with it? Let us be frank: the House of Lords is perhaps the most absurd, ridiculous legislature anywhere in the world. Stuffed full of unelected cronies, party donors, hereditaries and Church of England bishops, and with its 800 Members, it is becoming a national embarrassment. The only thing I can take comfort from in this statement is the fact that we may be starting to get rid of the whole ridiculous circus. We are poorly served with an unelected House whose rules a Government can simply change when it does not do their bidding, just because they can and because that place is accountable to absolutely nobody. Let us work together, and if we need to retain a secondary Chamber, let us make sure it is one equipped for the 21st century, not the 16th.

Chris Grayling: The hon. Gentleman talked about pre-arranged outcomes, but I think I could have written his speech in advance by anticipating what he had to say. He spoke with his customary flowing prose, talking about a pre-arranged outcome for the review. He knows Lord Strathclyde well enough to know that he is the last person to be given a script and then told to write a review around it and publish it. He has done a lot of work, he has talked to a lot of people and he has thought about it carefully. I understand the Scottish National party’s position of not wanting the House of Lords, but it is here and it is not about to disappear. It makes good sense for us to make sure that the relationships and workings between the two Houses are well structured and appropriate, and that is what we intend to do.

Iain Stewart (Milton Keynes South) (Con): I also welcome my right hon. Friend’s statement. I wonder whether the views of the Opposition would be somewhat different if the other place had blocked a left-wing financial measure, rather than the measure that was introduced. May I urge him to give serious consideration to option 1? I suspect that my motives in that regard are

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different from those of the hon. Member for Perth and North Perthshire (Pete Wishart). The advantage of that option is its simplicity and clarity, and I fear that the other two options, although they would be an improvement, would still be open to different interpretations, as with the current convention.

Chris Grayling: I heard the shadow Leader of the House say that what took place has happened to a Labour Government many times. This of course was the first time that a financial measure has been blocked in the way that it was in the House of Lords. Although my hon. Friend and the hon. Member for Perth and North Perthshire (Pete Wishart) share the same accent, I suspect that they do not share the same view for quite the same reasons. I take on board what my hon. Friend says. We will have to consider all three options very carefully, and we will bring forward our proposals in due course. None the less, I note the point that he makes.

Mr Graham Allen (Nottingham North) (Lab): It is a pleasure to be in the Chamber today for the First Reading of the Punishment of the Tax Credit Whistleblowers (Lords) Bill. I fully support what you said, Madam Deputy Speaker, in taking to task the shadow Leader of the House when he used the words, “disorganised hypocrisy.”[Interruption.] I meant organised hypocrisy. I have never seen anything more disorganised—other than me trying to make a joke out of it.

Once again, we have crisis management and firefighting instead of a clear strategy on what the Government want to do on democracy and constitutional change. We are in the middle of great change with English votes for English laws, Scottish devolution and the mess around English devolution, and the Government do not quite know what to do, so they are doing it bit by bit. I urge the Leader of the House to bite the bullet and create a constitutional or citizens’ convention that can look in the round at all those issues together—whether they involve the composition of the Lords and how they affect federalism in the United Kingdom and English devolution—and take a strategic view, rather than having this constant piecemeal firefighting.

Chris Grayling: I will not use any words to describe the views of the Opposition party, but given that, after 13 years of Labour, I was left with the clear impression that what it did was to take our constitutional arrangements and throw them up in the air with no idea of how they would land, it is a bit ripe to talk about our having a piecemeal approach to constitutional affairs. What we are trying to do is to sort out some of the mess that was left behind and to put back some stability into our constitutional arrangements, and this is a part of doing that.

Dr Andrew Murrison (South West Wiltshire) (Con): Whatever happens to the Lord Strathclyde’s workman-like review, all of us who believe in democracy will have to agree with his conclusions. Does my right hon. Friend agree that, since we are in the business of quoting literary and political figures, it is important that we should at least try to see ourselves as others see us? Democracies, especially nascent democracies across the world, look somewhat aghast at some of the more archaic features of our constitutional arrangements.

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Chris Grayling: There is always a case for modernisation in a parliamentary or constitutional process, and that should continue to be the case. None the less, the long-standing traditions of this House and of our constitutional arrangements provide a bedrock to how this country is governed and how this country works, which makes it admired around the world, and it should continue to be so.

Mr Alistair Carmichael (Orkney and Shetland) (LD): I am afraid that, yet again, when we need comprehensive review and reform, the Government are offering us piecemeal change. I deeply regret how this matter has been brought forward. The Leader of the House speaks of this as if it is something for the Government alone. It is not; this concerns Parliament as a whole. If change is to be required, it must be owned by Parliament as a whole. This matter was last dealt with in 2006 in a Joint Committee report on recommendations. The Leader of the House threatens to drive a coach and horses through that. If he is to achieve anything, he will need to reconstitute some sort of Joint Committee between this House and the other place; otherwise all his efforts will come to naught.

Chris Grayling: I am not trying to drive anything through this House. We are considering a report that has been produced by a senior and respected member of the House of Lords with an expert panel that is drawn from some of the most experienced past officials of this House—people who have great knowledge of parliamentary process. He has brought forward a series of recommendations for us to consider, which we will duly do. Those recommendations will be discussed again in this House when the Government make clear their own view about which option to take. It seems that that is an entirely right and proper way to do this.

Tim Loughton (East Worthing and Shoreham) (Con): This latest constitutional skirmish is just another symptom of a second Chamber that is far too large and that lacks a democratic mandate. Will the Leader of the House say when in this Parliament he will bring forward substantive reforms to make that Chamber democratically accountable with clearly defined powers vis-à-vis this House?

Chris Grayling: The reason I have not in the past supported an elected House of Lords is that it would create significant constitutional problems for this House. This matter has been considered three times since I was first elected in 2001. This House has not yet reached a clear view. What we do have in the House of Lords is an enormous wealth of expertise that adds to the value of our democratic process. I absolutely accept what my hon. Friend says about some of the issues and challenges around the structure and nature of the House of Lords at the moment. Right now, the best people to make proposals about how to address those are the Lords themselves, and I know that there is a move for them to do that.

Ms Gisela Stuart (Birmingham, Edgbaston) (Lab): Madam Deputy Speaker, may I wish you a happy new year and a merry Christmas?

It is a fine review, except that it is into the wrong thing. Would it not have saved the Leader of the House a lot of trouble if his Ministers had gone on a weekend

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course on when it is appropriate to use primary legislation and when it is appropriate to use secondary legislation? That would have saved us a lot of effort.

Chris Grayling: I can only repeat what I said earlier: Governments use primary and secondary legislation. When the right hon. Lady’s party was in power, we were deluged with secondary legislation. I suspect that Governments in future will continue to use such legislation on a widespread basis. We will do so now—if some of these recommendations are enacted—in a more structured and balanced way between the two Houses.

Martin Vickers (Cleethorpes) (Con): I echo the words of other Members who have spoken and urge my right hon. Friend to move forward with a fundamental change to the upper House, rather than tinker at the edges. Can we please think again on how we can move forward towards a mainly elected upper House?

Chris Grayling: I do not imagine that we have heard the last of this debate, but when it comes to enacting our manifesto and the measures in the spending review, our legislative priority is to do things that will make a real difference to the country. That is what the country expected of us when it elected us in May.

Mr David Winnick (Walsall North) (Lab): Is the Leader of the House aware that people will recognise this as one big sulk, because of the decision taken by the House of Lords on tax credits? The Lords were right, and they were sustained in their decision by Members on the Opposition Benches, by public opinion and even by Members on the Government side. That is why this nonsense has come before us today.

Chris Grayling: The reason this matter has come before us today is that, by general acknowledgement, the conventions that have existed for a long time between the House of Lords and the House of Commons have somewhat broken down. It is time to sort that out and to put in place arrangements that give certainty and continuity for the future.

Marcus Fysh (Yeovil) (Con): As a new Member of this House, I must say that I find the other place a completely ridiculous anachronism. The people of Somerset are very confused as to why it should have any power at all in this place. I would rather see a much more wide-ranging review of what is going on with it. To limit our powers to countermand it to financial matters with regard to statutory instruments is too narrow. In my constituency, we have one elected Member of this Parliament, which is me, and three appointed residents, all of whom are Liberal Democrats with no mandate whatsoever, claiming £900 a day to be there. It is a purely political House now, and it is completely unacceptable that its Members do not need to be elected.

Chris Grayling: My hon. Friend expresses a sincerely held view and one which I know is shared by many in the House. The matter has been debated on many occasions. Right now, the important thing is to ensure that he has the final say. As a result of what is set out in

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the Strathclyde review, we will return to a situation in which he does indeed have that final say as the elected representative of his constituency.

Patrick Grady (Glasgow North) (SNP): As people have been wishing the occupant of the Chair a happy Christmas, having been at the Star Wars movie last night I feel I should say, “May the force be with you.” Having watched the dark lords of the Sith at their nefarious business—I am not referring to the other place amending the Scotland Bill—may I ask the Leader of the House what impact the procedure that he is introducing today will have on the procedures for English votes for English laws that were introduced recently in this House?

Chris Grayling: If the hon. Gentleman went to both the Star Wars movie last night and the Scottish National party’s Christmas party, he is doing well to be here today. That is perhaps why he has a glass of water in his hand. The proposals will not change the EVEL procedures. If a matter is an English-only statutory instrument, it will be passed in the ways described in the EVEL process. What will change is not the process for EVEL, but the process for statutory instruments. Every statutory instrument would therefore operate in a different way in future, not just English-only ones, but all of them.

Ben Howlett (Bath) (Con): Given that the House of Lords barely pay regard to a convention these days, I welcome the statement today and the report by Lord Strathclyde. Echoing the comments of many of my hon. Friends, does my right hon. Friend agree that the first option, removing the House of Lords from statutory instrument procedure, would be the best option?

Chris Grayling: I note what my hon. Friend and others have said today. That is something the Government will have to take into account as they consider how best to respond to the report, so I thank him for his contribution.

Clive Efford (Eltham) (Lab): Thank you, Madam Deputy Speaker, and merry Christmas to you and to everyone in the House. The power under discussion is one that the Lords seldom use. The fact that it has been used so rarely in its history probably proves why it should be there for a House that is required to make the Government think again. The Lords knew that what the Government had claimed at the Budget was wrong, and they discovered with the benefit of hindsight that the claims of the Chancellor that people would not be worse off were incorrect, and that working families with children would have been thousands of pounds a year worse off. It was not just the Opposition who were pointing that out to the Government. A significant number of Government Back Benchers were doing so as well. The Lords listened to that and used the power that they rarely use to make the Government think again. The Chancellor came back to the House and wanted to be cheered for saying that he would never do it again. The Lords were proven to be correct, so the power was proven to be useful. This is just a spat and a tantrum from the Government because the Lords had the temerity to make the Government think again.

Chris Grayling: I remind the hon. Gentleman that the changes that he is referring to were voted on and passed five times by this elected House. There comes a point

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where the elected House needs to be able to assert its will. Lord Strathclyde has recommended a number of options that enable it to do that.

Kevin Foster (Torbay) (Con): If we have a revising Chamber in the form that we have, it makes sense that it still has a role in secondary legislation, much of which is of a more technical nature. I therefore welcome the fact that option 3 has been chosen. Will the Leader of the House confirm that this will not stop the Government looking at options to deal with some of the things that make the other place almost a laughing stock, such as those who do not attend and others whose reason for being there has perhaps now disappeared?

Chris Grayling: Of course, we need to look at all three options carefully before we respond. On other matters related to the House of Lords, there has been a push for reform in the House of Lords in recent years. A Bill was introduced by Lord Steel in the previous Parliament and I suspect that we will see further proposals for change over the next few years from that House. Right now our priority is to implement the manifesto that we were elected on, and the country expects that of us.

Patricia Gibson (North Ayrshire and Arran) (SNP): I listened carefully to the Leader of the House when he talked about the House of Lords giving the public confidence in what Parliament decides, and it will come as no surprise to the right hon. Gentleman if I urge him to seriously consider the abolition of the House of Lords. That would give the public confidence in democratic accountability. I remind the right hon. Gentleman that the House of Lords is the only legislature in the world, with the exception of Iran, whose Members include unelected clerics. It is unelected and unaccountable, and the public do not have confidence in it. Will he consider abolishing this museum piece, which is filled with cronies and failed politicians who have been rejected at the ballot box?

Chris Grayling: If we talked to the public about the way our Parliament works and said that we have an elected House which, as a result of these proposals on secondary legislation, will have the final say, but that we also have a group of people who have been eminent in their very different professions—people ranging from Lord Lloyd-Webber in the arts to some of the most senior business people—whose job it is to advise and guide the elected House about when it might be getting it right and when it might be getting it wrong, I think they might form a different view. I accept that there are strong opinions about this, but right now this is about solving a structural problem in the relationship between the two Houses that has emerged in the past few months. Lord Strathclyde has given us three sensible options to work with.

Stephen Timms (East Ham) (Lab): Surely the episode that gave rise to the report was simply an example of Parliament functioning as it is supposed to do. The

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Chancellor has since been trying to take the credit for the change. Will the Leader of the House accept, as I think the great majority of his hon. Friends now do, that the other place was right on tax credits?

Chris Grayling: What really happened was that having set out some tough decisions that we said we would have to take—we have always been clear about the tough decisions that we were going to have to take—and having discovered that the public finances were doing better than expected because of the success of his economic policies, the Chancellor was able not to take some of those difficult decisions, and that is a good thing.

Alan Brown (Kilmarnock and Loudoun) (SNP): Since I was elected democratically in May, 62 new Lords have been appointed to the other place. That includes 11 Liberal Democrat Lords. There are more new Liberal Democrat Lords than there are elected MPs of the same party, which stinks of the word that the hon. Member for Rhondda (Chris Bryant) was not allowed to use earlier. The Leader of the House knows the position of the SNP, which is to abolish the House of Lords. Will he come clean and get Lord Strathclyde to print the real option 4, which is to continue stuffing the other place with cronies and donors?

Chris Grayling: I know that the Scottish National party believes in abolishing the House of Lords, and I know it uses the language of cronies and donors, but if the hon. Gentleman looks across the House of Lords, he will find people who have contributed vastly to our public life, have achieved great things for our society and have a role to play in advising the elected House on the final decisions it should take.

Margaret Ferrier (Rutherglen and Hamilton West) (SNP): The removal of the veto from the House of Lords effectively leads to the formation of the most expensive, over-subscribed think-tank in history. I seldom see the point of the current unelected affront to democracy, but how could any rational person justify spending such a disgraceful amount of taxpayers’ money on an impotent talking shop? Surely this is the ideal opportunity to abolish the House of Lords and create a democratically elected second Chamber. Although I welcome any recommendation that seeks to remove legitimacy from an institution that lacks any, it does not go far enough.

Chris Grayling: Scottish National party Members are both consistent and not terribly shy in their views on the House of Lords. I know these views exist and those hon. Members are not alone in the House in holding those views of the House of Lords. Our priority is to get on with the job of sorting out the mess that we inherited in 2010. We have done much of the job up till now; we still have further to go and our priorities should be to deliver the rest of the changes that will transform this country.

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Points of Order

1.18 pm

Mr Graham Allen (Nottingham North) (Lab): On a point of order, Madam Deputy Speaker. A number of colleagues are here for the two debates later today. I understand that there may be a number of speakers in the first debate and that it is a time-limited debate. Every colleague who wishes to speak would get in if there was some rough guidance from the Chair that 10 minutes for Back Benchers and Front Benchers would allow everyone to make their points in the debate.

Madam Deputy Speaker (Mrs Eleanor Laing): The hon. Gentleman makes a reasonable point. I will consider how much time is available and how many Members indicate that they wish to speak. When the House is operating at its best, there should be no need for me to set a formal time limit because all hon. Members ought to be courteous to all other hon. Members and limit their remarks to a reasonable amount of time, which is usually less than 10 minutes, as the hon. Gentleman suggests.

Mary Creagh (Wakefield) (Lab): On a point of order, Madam Deputy Speaker. On 21 July I asked the Secretary of State for Defence how many UK troops were embedded with the armed forces of the US and other countries and whether that was paid for from the Department for International Development budget. In September I was told that the Department was compiling an answer. I chased that answer in November but have still not received it, five months after asking my original question. Surely Members of this House deserve timely answers to questions. More importantly, we need to understand the role that our troops are playing on the ground around the world and which arm of Government is paying for that involvement.

Madam Deputy Speaker: As the hon. Lady knows, how Departments and Ministers organise their answers to parliamentary questions is not a matter for the Chair, but I will happily repeat what Mr Speaker and his predecessors have said for many years: Ministers must answer questions from Members of Parliament in a timely and reasonable fashion. I understand that the Procedure Committee is looking into the matter, because this is not the first time—I am sure that it will not be the last—that a Member has had no alternative but to ask the Chair to intervene in such a case. At the same time, I am sure that those on the Treasury Bench will have heard what the hon. Lady has said, and what I have said, and I expect that she will receive a proper answer to her question as soon as possible.

Bill Presented

Marriage Registration Bill

Presentation and First Reading (Standing Order No. 57)

Mrs Caroline Spelman, supported Caroline Lucas, Victoria Prentis, Julian Knight, Frank Field and Christina Rees, Huw Irranca Davies presented a Bill to make provision about the registration of marriages.

Bill read the First time; to be read a Second time on Friday 22 January, and to be printed (Bill 113).

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Backbench Business

Sexual Exploitation: Protection of 16 and 17-year-olds

1.22 pm

Kit Malthouse (North West Hampshire) (Con): I beg to move,

That this House notes the findings of The Children’s Society’s report entitled Old enough to know better? which looked at the sexual exploitation of 16 and 17 year olds; further notes the particular vulnerability of that age group as they transition from childhood to adulthood and the role that aggravated offences and harsher sentences have in deterring crimes against 16 and 17 year olds; calls on the Government to clarify for prosecution and sentencing purposes the role drugs and alcohol, mental health problems, being in care and learning disabilities have in adding to the vulnerability of that age group; and further calls on the Government to give police the same tools to intervene when a 16 or 17 year old is being targeted and groomed for exploitation as they have for younger children.

Over the past few weeks it has been said a number of times in this House that our success as parliamentarians is measured by how we defend the vulnerable. In recent years we have seen all too clearly that children fall into that category. On the subject of this debate, the horrendous crime of child sexual exploitation, our first instinct is to recoil, and our next is to hide our children away, wrapped up so that no harm could ever come to them. But hiding from the problem because it is too grisly or, even more impossibly, stopping our children growing up would be markers of neither a brave society and brave lawmakers nor good parents.

As well as recognising that children are especially vulnerable, our approach must reflect the fact that they are also fully fledged adults in waiting, steadily gaining the experience, knowledge and mental development they need to take up all their rights and responsibilities. The protection of children and the maintenance of the environment in which they can grow therefore go hand in hand. On the whole, we do that well for most children, even if we need to think hard about how new technologic developments, such as the internet and social media, and cultural issues, such as body image problems and academic pressures, will impact on them.

However, our efforts to protect children and maintain that healthy environment run into the greatest difficulty at the very end of childhood—the transition to adulthood between 16 and 18—and on the issue of sex. It is a time of life that requires nuance, a nuance that does not come easily in laws that must deal in precision and definites. The age of consent for sexual activity is set at 16, and we are not suggesting that should be changed. But we start this debate in the light of the Children’s Society report “Old enough to know better?”, which shows that we still do not get the balance right in the case of the sexual exploitation of 16 and 17-year-olds. The report highlights the particular vulnerability of that age group and the awkwardness that exists between the fact they are children, their position over the age of consent and the expectations that society has of them.

Our motion therefore looks at what we can do in law to better protect 16 and 17-year-olds from being sexually exploited without changing the age of consent. In particular, we look at the role that aggravated offences could have

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in better deterring sexual exploitation of those children and clarifying in the mind of the public their special vulnerability as they stand on the threshold of adulthood. If we can clarify, for prosecution and sentencing purposes, the guidance for judges and juries on the role that drugs, alcohol, mental health problems, learning disabilities and being in care have in adding to the vulnerability of that already vulnerable age group, I believe we can achieve some progress. The motion also suggests that the powers that the police possess to enable them to intervene when a child under 16 is in danger should be extended to situations in which a child over 16 is under threat. I cannot stress enough how necessary all this is. I suspect that I do not need to do so for those present in the Chamber today.

At that age, abuse and exploitation can cause profound damage that can last a lifetime. It will irrevocably shape how a child grows to see both the world and themselves. They will see the world as forever hostile and threatening. They will cling to any security or affection, no matter how bad it is for them or how malevolent the source—a vulnerability that many predators exploit in the first place. It risks their forever seeing themselves as a victim or as someone who cannot take the risk of trusting anyone. It can stop them ever becoming a healthy, independent adult.

We also know from research conducted by the Children’s Society that those young people can end up feeling that they deserve the abuse, and that on occasion juries have not taken the fact of their vulnerability seriously enough: they have refused to recognise that the fact that the child was over the legal age of consent did not mean that their attacker was not guilty of sexual exploitation. When they did that, they failed and betrayed those young people.

All sexual crimes are extremely serious, but I think we can all agree that those committed against children are doubly cruel. That is why we must achieve some changes in the law. Although the proposed changes would protect all 16 and 17-year-olds, this is particularly pressing in the case of children in care. I expect that all Members of the House will agree that we could and should do better for them. The Prime Minister said as much recently. He noted that children in care today are almost guaranteed to live in poverty, and that 84 % of them leave school without five good GCSEs. He noted in a speech this year that 70% of prostitutes were once in care and that, tragically, care leavers are four times more likely to commit suicide than anyone else. We cannot go on setting those children up for a life on the streets, on welfare because they are unable to find work, or an early grave. Please God, the Prime Minister will make some progress on the issue. I understand that he will make a statement about children in care after the Christmas recess.

Mr Barry Sheerman (Huddersfield) (Lab/Co-op): The hon. Gentleman’s remarks so far have been music to my ears. When I chaired the Children, Schools and Families Committee we looked at children in care. He is absolutely right about vulnerability. Does he agree that access to therapeutic care for those children at that crucial age is often just not there?

Kit Malthouse: I agree with the hon. Gentleman. Indeed, progress needs to be made in all manner of policy areas to deal with this issue.

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Their vulnerability to child sexual exploitation is one area where we can stop failing those young people now. Their characteristics mean that this particular group of young people are in desperate need of the changes we are proposing today. While most children’s vulnerability is shielded by family, friends and the support networks that come through good communities and good schools, those children are not so fortunate. Their backgrounds are chaotic, frightening or cruel, putting them in a nearly hopeless situation. Combine that fragility with the fact that there is no one actively looking out for them, and it quickly becomes clear that they are easy prey for evil people. We have seen from case notes that that kind of background is so often part of the trajectory of an abused child—a trajectory that sees an abused and vulnerable child become a troubled adult. The Children’s Society report shows that these predators target children systematically and lie in wait near where they live, study or socialise. They stalk them on social media. They offer the child everything they have missed, win their trust, isolate them from the adults who would intervene, ply them with drink and drugs, and then strike. Every time they are successful, they leave a life in tatters; every time they fail, they just move on to the next target.

In the past few years we have seen several sickening cases of hundreds of children targeted by gangs and by predatory individuals. These cases of exploitation sometimes occurred in collusion with, or at least with the knowledge of, those who should have been protecting and caring for them. In some cases, the police or those responsible for the children wanted to intervene but lacked the authority or confidence to do so. Right now, the police, children’s services and the courts look on without the legal teeth or power to stop it.

Some will immediately think of high-profile cases like those in Rotherham or Oxford, but let us be clear: this is not a problem with one demographic, even if divisive and unhelpful groups want to pretend that it is in order to further their own agendas. Child sexual exploitation affects, and is perpetrated by, all races, colours and creeds. The papers focus on the big cases, but there are thousands of individuals whose lives have been turned upside down by these crimes. As I have said, these children do not have parents who can look after them or family to care for them, so it is our collective duty as a society to be those parents and that family. We, us, you and me have to be the arms that catch them if they fall and the voices calling them back when they wander and stray. Now, too often, we fail them just when they need us most.

More broadly, these issues point to a wider problem in the way we protect children. To reflect the importance of ending this national scandal, it is time that we tilted the law and the criminal justice system decisively in favour of children and those who wish to protect them, not just in this instance but across the board. In thinking about protected groups, it seems strange to me that children are not among them. Gay people, minority racial groups and religious groups are all protected specifically in law, and rightly so, but children are not, and they should be. We have to add them as a category for special protection, at least to send a signal to society and the justice system that more effort is required. The upcoming policing and criminal justice Bill that was announced in the Queen’s Speech offers just such an opportunity.

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On the distinct matter of child sexual exploitation, the crux is that 16 and 17-year-olds are not protected in the same way because they are over the age of consent. Children under 16 are already protected by the fact that they cannot consent to sex, and the rightly harsher sentencing that exists because of this is a strong deterrent. Sexual crimes against children under 16 are further prevented by the extra powers and tools that the police possess to intervene when someone is targeting and grooming them for exploitation. These include child abduction warning notices, which are used to disrupt an adult’s association with a child under 16. We should take note of this deterrent effect and extend the power to 18. There is already backing for this.

In 2012, the Office of the Children’s Commissioner asked the Government to extend the use of these notices and allow them to be served without parental consent where necessary. There is solid statistical backing for this change too. In 2012-13, 306,118 incidents of missing persons were reported to the police in England, Scotland and Wales. During that year, children accounted for 64% of all missing person incidents, and 15 to 17-year-olds were the most common missing persons, accounting for 36% of all such incidents. This means that in over a third of cases, the police did not have the right powers to intervene to protect a child. That must change.

The fact that 16 and 17-year-olds are still children, and that children are vulnerable and more likely to be targeted, is enough to warrant extending these protections to them.

Mr Sheerman: Does the hon. Gentleman share my misgivings—I make myself very unpopular on the Labour Benches in this regard—about introducing the vote at 16, which would be a move towards adulthood at 16 and therefore reinforce the problem of the shrinking of childhood? We must be very careful about that as the length of time that someone is child, as a percentage of their now very long life, becomes shorter and shorter.

Kit Malthouse: I realise that the House is divided over the issue of votes at 16. My personal view is that we should stay at 18. I am trying to illustrate the fact that the two years between sexual consent and legal majority is a particular zone of childhood which, as I hope the hon. Gentleman agrees, requires particular attention from a legal and a parliamentary point of view.

We also have to consider the psychological impact that the lack of protection has on society. It makes people think that these children should not have this protection, that they are not really vulnerable, and that they are, in the words very deliberately chosen by the Children’s Society, “old enough to know better”. Furthermore, in many cases, because they lack these protections and are above the age of consent, they are all the more likely to be denied justice, and that is why predators are drawn to them. The fact that they are above the legal age of consent has had a big psychological impact on how crimes committed against them have been interpreted. There is evidence that juries have lacked sympathy with their cases when these crimes have come to court. Their vulnerability and the cruel effectiveness of grooming are not well understood across the population, and attackers are aware of the public’s complacency.

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Mark Durkan (Foyle) (SDLP): On the topic of public attitudes and misperception, is the hon. Gentleman aware of the case of Maria Cahill, who bravely came forward to the authorities, and eventually to the media, with her story of abuse within the republican movement, as a member of that movement, and how her story was suppressed? Ever since the BBC revealed it, she has been subjected to punishment tweeting by Sinn Féin supporters and, indeed, by Sinn Féin politicians, who have cast slurs on what age she was to imply that she did “know better” and was somehow complicit in her own victimhood.

Kit Malthouse: I am sad to say that I do not know of that particular case, but the hon. Gentleman makes a powerful point.

This point is so obvious that it should not need stating, but I will do so anyway, because even when it is intellectually understood, people still do not “get it”: not fighting someone off, not objecting vociferously, or not attempting to take oneself away from a situation does not equal consent. That is even more obvious when we think of common factors in the cases that have come before the courts. We are talking about victims with mental health problems and learning disabilities. We are talking about children recovering from traumas and encouraged to take drugs or drink alcohol so that they would submit. Complacency about this matter is the biggest encouragement that the attackers look for. It needs to be clear in law that these children are to be considered vulnerable and that the targeting of vulnerable people will never be accepted in the United Kingdom.

All this points to the fact that the sudden removal of protections at 16 is not working, and that we can protect children better with our actions in this House. Let me reiterate what we are asking for: the Government must clarify, and put the clarification in statute, that when a victim of sexual assault is aged 16 or 17, it is an aggravated offence. They must make it clear that drugs and alcohol can never be viewed as consent for a sexual act. They must recognise that vulnerable people are deliberately targeted, and that this should be further considered as an aggravating condition. Passing this motion will move us towards doing a better job of helping parents, police and child protective services to look after children, and we must do so.

I do not advocate these reforms as a Conservative but as a father and as a Member of Parliament. I believe that it is in that spirit that other hon. Members joining us today also back this motion. As we do so, we lay claim to the best traditions of social reform that Britons have offered from within and without these walls through the ages. Every party in this House can lay claim to this, the most honourable of political traditions—the tradition that looks the vulnerable in the eye and says to them, “I will use the good fortune and power that society has given me to protect you.” When it comes to this kind of reform, I do not believe that any Member is sitting on a particular side of the House.

1.39 pm

Patricia Gibson (North Ayrshire and Arran) (SNP): I am grateful to have an opportunity to speak in this debate and grateful that it has been secured.

The focus of the debate could not be more serious. Protecting our young people from sexual exploitation as they make the transition from childhood to adulthood

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must be a priority of this House. It goes to the heart of the kind of values we have—the value we place on our young people, the value we place on protecting the vulnerable, and the values we have around dignity, fairness and consent.

Child sexual exploitation is abhorrent and can have devastating and lifelong consequences for those who are victims of it, not to mention the effects on their families and those closest to them. All children and young people have a fundamental right to be cared for and protected from harm, and to be able to grow and thrive in an environment where they feel safe and where their rights are respected, as outlined by the United Nations convention on the rights of the child, which applies to all young people up to the age of 18.

Yet the report “Old enough to know better?”, which was published in November, makes for truly harrowing reading. The Children’s Society report examined why older teenagers are particularly at risk of child sexual victimisation and the extent to which 16 and 17-year-olds are victims of sexual offences. It also considered why they find it so very difficult to disclose their experiences and to access help and support.

We know that the justice system is not always as kind and supportive as it should be to victims of sexual crimes, and nowhere is that more true than in its treatment of our young and vulnerable. Of course, the law recognises that those in the age range under discussion can legally consent to sexual relationships, but under the Children Act 1989 they are still considered to be children. As such, professionals and, indeed, wider society have a legal duty to safeguard those young people from exploitation.

Although 16 and 17-year-olds continue to be protected from sexual abuse within the family or by those in a position of trust, and from sexual exploitation offences such as child prostitution and pornography offences, they simply, and appallingly, do not receive the same kinds of protections as younger children if they are targeted for sexual abuse by predatory adults. That is shocking and it is put sharply into focus by the Children’s Society report, which shows that 16 and 17-year-olds are more likely to be victims of rape or sexual offences than any other age group. That situation demands our considered response.

Just as we find it appalling and evil when young children are sexually exploited, mistreated and abused, so too we should be outraged when those going through the transition from childhood to adulthood face such exploitation. It is concerning that it seems that professionals are more likely to see those in the age range of 16 and 17 as complicit in their own exploitation. Such a view fails to understand the targeted and intense nature of grooming, and it mistakes consent to drink alcohol or to participate in risky behaviours as consent to having sex. Clearly, professionals need more training so that young people who need support and understanding—not to mention justice—receive it. Pointing to the age of legal sexual consent cannot be the means by which we fail to live up to our collective duty to protect our young people on the threshold of adulthood.

In England and Wales there is no specific offence of child sexual exploitation, and that is worth examining. In Scotland the definition of child sexual exploitation states:

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“Any involvement of a child or young person below 18 in sexual activity for which remuneration of cash or in kind is given to the young person or a third person or persons. The perpetrator will have power over the child by virtue of one or more of the following—age, emotional maturity, gender, physical strength, intellect and economic and other resources e.g. access to drugs.”

Under Scots law, there are specific protections for those aged 16 and 17 who are at risk of exploitation, with offences specifically to protect that particular demographic. The offence of sexual abuse of trust makes it a criminal offence in Scotland for a person in a recognised position of authority to engage in sexual activity with anyone under the age of 18 in their care. The Protection of Children and Prevention of Sexual Offences (Scotland) Act 2009 makes it a criminal offence to involve children in child pornography, extends protection against indecent images to 16 and 17-year-olds, and provides for restrictions to be placed on sex offenders.

The Scottish Government introduced Scotland’s national action plan to tackle child sexual exploitation, which represents a comprehensive and ambitious strategy to address that complex challenge. The “Getting it right for every child” strategy aims to improve outcomes in Scotland’s public services that support the wellbeing of children and young people. It is part of a framework for responding to sexual exploitation and it applies to young people up to the age of 18. That, as well as the sex offender community disclosure scheme, also offers protection for 16 and 17-year-olds. The keeping children safe scheme enables parents, carers and guardians of those under the age of 18 to make a formal request for disclosure of information about a named person who may have contact with their child, if they are concerned that he or she might be a registered sex offender.

The Scottish Government will launch a campaign to raise awareness of child sexual exploitation in the week beginning 25 January 2016. This high-profile campaign will be aimed primarily at parents, carers and those aged between 11 and 17-years-old. It will include TV advertising and poster material that will run for three weeks. In addition, partnership material is being developed in order to reach the youth audience, and a campaign website, which is also being developed, will highlight the risks, as well as offer advice and support. A practitioner’s toolkit will be made available on the website ahead of the launch, so interested parties will be able to download material for use in their local communities.

We must continue to be vigilant in the protection of our young people, wherever they live in the UK. The Scottish Government have done much good work in this area, but there can be no room for complacency and we must always examine all protections offered with a critical eye, to ensure that they continue to offer robust protections for all our young people, including those in the 16 and 17-year-old age bracket. I am not going to stand here today and argue that in Scotland we think it is job done—absolutely not. We must continue to be vigilant, as are those who would exploit young people. As the hon. Member for North West Hampshire (Kit Malthouse) pointed out, those in care are at particular risk. Moreover, the Children’s Society’s call for increasing the age for the application of child abduction warning notices is eminently sensible.

I sincerely hope that Members can learn from the good work and initiatives being undertaken by the Scottish Government, because I know that the Scottish

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Government will examine all measures taken by this House, to see what they can learn in turn. We should also be learning lessons from how countries further afield tackle the issue. As technology grows ever more sophisticated and those who would exploit our young people become ever more creative, we must all continue to be vigilant. We must not let our young people down. We must not allow the law to let our young people down.

Young people travelling down the road of transition from childhood to adulthood are not being protected as they should be. They are not telling those in authority when they experience sexual exploitation. The Children’s Society report points out how chronically under-reported such exploitation is to the authorities. We know that young people often feel that it is their fault when they are sexually exploited, and we know that it can have huge consequences for their development into full adulthood. The more we talk about it, and the more we recognise it as a problem that actually exists, the more likely those who are exploited will feel able to report their ordeals.

This is an issue that must be brought out of the shadows. We must talk about it, how it can occur and the ways and means through which these young people may be sexually exploited. We must remember that the onus for what happens to them cannot be placed on the shoulders of young, vulnerable people who can be manipulated by others who are far more worldly wise and cunning than them. Concluding that vulnerable young people of 16 and 17 years of age are complicit in their exploitation lets the exploiters and sexual predators off the hook, and that serves only to heap insult on to injury.

Let us not kid ourselves: child sexual exploitation is as much a reality in Scotland and across the UK as it is anywhere else around the world. That is the reality we cannot ignore, and we must tackle it collectively. No one is saying this will be easy, but it must not and cannot be beyond the wit of politicians to draft laws fully to protect our young people from exploitation. Everything that may help must be explored fully. We need to make sure we create an environment that is as difficult as possible for those who would prey on and sexually exploit our young and vulnerable. We also need to create an environment in which the victims of sexual predators and exploiters feel able to speak up, and are confident about doing so, in order to receive the support that they need. Surely, that it is the least we can do.

Several hon. Members rose

Madam Deputy Speaker (Mrs Eleanor Laing): Order. In his point of order, the hon. Member for Nottingham North (Mr Allen) was a little generous in estimating that 10 minutes might be the correct amount of time that hon. Members can take to speak. If everyone who has indicated that they wish to speak is to have an opportunity to do so, I ask hon. Members to take no more than eight minutes each.

1.50 pm

Tim Loughton (East Worthing and Shoreham) (Con): I will quickly knock two minutes off my speech, Madam Deputy Speaker.