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House of Commons
Tuesday 5 July 2011
The House met at half-past Two o’clock
[Mr Speaker in the Chair]
Oral Answers to Questions
Deputy Prime Minister
The Deputy Prime Minister was asked—
House of Lords Reform
The Deputy Prime Minister (Mr Nick Clegg): The Government have received many representations on all aspects of House of Lords reform, including from constitutional experts. We recognise that a variety of views were expressed in recent debates in both Houses, and we are sure that the Joint Committee will take account of the debates when scrutinising the draft Bill and White Paper.
Penny Mordaunt: The elegance of our unwritten constitution allows it to adapt when necessary to meet a pressing need, but change for some other reason could be regarded as constitutional vandalism. Has the Deputy Prime Minister reflected on the fact that if a pressing need is not articulated, his plans for reform of the other place might fall into the latter category?
The Deputy Prime Minister: I do not think it is a new need, and in that sense it is not a pressing need, but there is an enduring need to make decisions in this place and the other House as accountable to the British people as possible. The simple principle that those who shape the laws of the land should be held to account by people who have to obey the laws of the land is a long-standing democratic principle.
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Laura Sandys (South Thanet) (Con): One matter of great concern in this Chamber is that the other place is most certainly secondary to it. Does my right hon. Friend see the opportunity to remove any ability for the other place to initiate legislation as a way to ensure the hierarchy between this place and the other place?
The Deputy Prime Minister: As we explained in our White Paper, we believe that the different mandates, electoral systems and terms of office, and of course the conventions enshrined in the Parliament Acts, will guarantee that although there will no doubt be an evolution in the relationship between the two Houses—that is bound to happen under any arrangement—the hierarchy between this place and the other place will remain intact.
Nicky Morgan (Loughborough) (Con): The Deputy Prime Minister has just referred to the different mandates of Members of the other place, if it is reformed, and of this House. Does he not think, though, that the reforms would benefit from some clarification of those different mandates, so that the essential and long-standing relationship between MPs and constituents is not eroded?
The Deputy Prime Minister: We already have a system, of course, in which politicians are elected to different assemblies and Parliaments with different mandates, and as long as those mandates are clearly differentiated, as they would be under the proposed arrangements, there is no clash between them. Let us remember that what the Government suggest in the draft Bill is that elected Members of a reformed House of Lords would represent vastly larger areas than the smaller constituencies that we in this House represent.
Andrew George (St Ives) (LD): Given that in our debates so far no one has rushed to the defence of the hereditary principle or patronage, does my right hon. Friend not agree that if we are to make haste in delivering the principles behind Lords reform, it would be best to get on with removing the hereditary principle and patronage now? No one disagrees with that.
The Deputy Prime Minister: I certainly agree that we aspire to create a reform that, although evolutionary in its implementation—it will take several years rather than happen overnight—will at least be comprehensive and create a reformed House of Lords with a far greater mandate and democratic legitimacy than is currently the case.
Mr David Hanson (Delyn) (Lab): In the Deputy Prime Minister’s nirvana of 15-year terms, will he consider ruling out Members of the newly elected other place standing for this place, so that we do not have people roaming around one individual constituency trying to unseat the Member of Parliament by using their democratically elected 15-year position in the other place?
The Deputy Prime Minister: The right hon. Gentleman may have noticed that in the White Paper we suggest precisely that. We suggest that there should be a cooling-off period of at least one term, so that those who leave the other place cannot instantly stand for this place. That is precisely to avoid the clash that he rightly identifies.
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The Deputy Prime Minister: We are not in favour of that, but we are in favour of many provisions of Lord Steel’s private Member’s Bill and look forward to incorporating many of its transitional arrangements and so on into the Government Bill.
Steve Rotheram (Liverpool, Walton) (Lab): Does the Deputy Prime Minister not understand that even those of us who support Lords reform cannot help wondering whether he has masochistic tendencies in trying to win this fight with one hand tied behind his back, and with the Prime Minister simply holding his coat and egging him on from the sidelines? Does he believe that he has the overwhelming support of his coalition partners to steer the Bill through both Houses? If not, is he not just wasting—
The Deputy Prime Minister: I remind the hon. Gentleman that all parties went to the country in last year’s general election with a clear manifesto commitment to reform the House of Lords. As I have said, it does not strike most people as a radical suggestion that the democratic principle that operates in Parliaments around the world should gently and incrementally be applied to the other place.
Sir Alan Beith (Berwick-upon-Tweed) (LD): Has my right hon. Friend read the debates in which the argument was advanced that the House of Lords does its job, and therefore should not be changed in any way? If so, did he think he was reading the right issue of Hansard, or the one dated 1911, or perhaps the one dated 1832?
The Deputy Prime Minister: Whatever their views about the proposals for House of Lords reform that the Government made in the White Paper and the draft Bill, I believe that everybody accepts that the House of Lords is not immune to reform or improvement. My view is that political institutions are always susceptible to some improvement over time, and I believe that that package of carefully considered reforms, which I hope, over time, will enjoy cross-party support, will finally allow us to make progress on something that has been debated for more than a century.
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The Parliamentary Secretary, Cabinet Office (Mr Mark Harper): The Fixed-term Parliaments Bill has been debated almost fully in both Houses. We have received representations from the public, and I feel sure that, very shortly, another will emanate from the hon. Gentleman.
“If we are entering a world of hung parliaments, there is no reason for dissolutions to be made more difficult.”
Mr Harper: Not at all. I know the opinions of Vernon Bogdanor very well, because he was my tutor. He and I disagreed while we were at university, and we continue to do so on many matters now. The Bill is very much in the interests of Parliament, and of having a stable situation in which the Prime Minister, for the first time, has given up the power to call an election to suit his political party. That is a huge constitutional improvement.
The Parliamentary Secretary, Cabinet Office (Mr Mark Harper): My hon. Friend will know that last Thursday the Government published their White Paper and draft legislation on individual electoral registration, to improve both the accuracy of the electoral register and its completeness.
Mr Harper: I very much agree with my hon. Friend. We made it very clear in our proposals that we are interested in reducing the vulnerability of our electoral register to fraud and in ensuring its accuracy. We are also interested in ensuring that it is as easy as possible for anyone who is eligible to vote to get on the register. To that end, we are taking part in some data-matching pilots to improve that situation.
Mr Graham Allen (Nottingham North) (Lab): Does the Minister accept that not only registration but counting the votes properly is important? Is he aware that in most constituencies there are a handful of spoilt papers, whereas in mayoral elections there are sometimes more than 1,000? On two occasions at least, the number of spoilt papers has been larger than the majority of the election winner. Will he take that up with the Electoral Commission?
I am grateful to the hon. Gentleman, who chairs the Select Committee on Political and Constitutional Reform, which will look at our individual elector registration proposals and carry out pre-legislative scrutiny. He has raised that question with me before,
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and I can confirm that I will ask officials to look into that matter. I will come back to him and the House in due course.
Priti Patel (Witham) (Con): Specific to the electoral register, will the Minister provide precise details on the Government’s plans to extend the franchise to prisoners? Will proposed legislation on that come to the House, or will he defy Europe and uphold the will of the House?
Mr Harper: I am grateful to my hon. Friend for her question—this is a subject on which she is pursuing Ministers relentlessly both in the House and in written questions. The Prime Minister was asked a similar question at Prime Minister’s questions, and I can do no better than to say that the Government do not want to enfranchise prisoners, but there has been a clear decision by a court to which we have signed up. The Prime Minister said that the Government will ensure that any legislative proposals are as close as possible to the House’s decision earlier this year.
Chris Bryant (Rhondda) (Lab): On 26 October last year, I asked the Deputy Prime Minister how he was going to ensure that everyone forced to move out of central London because of the changes to housing benefit would be enfranchised and end up on the register. He pooh-poohed that at the time, saying it was not going to happen. Now we know that the Department for Communities and Local Government believes that up to 40,000 people are going to have to move. How are Ministers going to ensure that those people are enfranchised?
Mr Harper: The hon. Gentleman will know that the Department does not say that at all—it is not what is stated in the impact assessment that Ministers have signed up to. I do not believe either that that is what the article in the newspaper said. On enfranchisement, we are very clear: our proposals will make it easier for people who are entitled to be registered to be registered. He will know that we are carrying out data-matching pilots across the country, and we will take forward and roll out any lessons from that to make it easier for people who are eligible to be registered.
Political Party Funding
The Deputy Prime Minister (Mr Nick Clegg): The Government are committed to work to reform party funding. The Committee on Standards in Public Life is conducting a review and the Government will consider its recommendations, alongside other relevant evidence before taking this forward.
I thank my right hon. Friend for his answer. Does he agree that the unseemly spectacle last week of union leaders criticising the Labour leadership for not overtly supporting the strikes while the Labour
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leadership looked uncomfortably at the floor shows exactly why we need to get big money out of party funding and why we need real reform?
The Deputy Prime Minister: I agree that it cannot be healthy in a democracy if any political party is over-reliant on one source of funding to the exclusion of others. [Hon. Members: “Michael Brown!”] It is worth saying that the current situation is unsustainable and has done damage to all political parties, which is why it is something that we should look to reform on a cross-party basis.
Duncan Hames: If reforms to party funding are to have any meaningful effect they need to come into force at least 18 months before the next general election. Does the Deputy Prime Minister recognise that if his timetable cannot deliver, it might be overtaken by one that simply commands the support of a majority of the House?
The Deputy Prime Minister: We are first waiting to see the recommendations of the Committee on Standards in Public Life to consider whether they might kick-start a process of discussions between the parties, so that we can finally move beyond the shadow of the party funding scandals that have blighted all the political parties, and so that we can put the arrangements on a much more sustainable and transparent footing.
John Cryer (Leyton and Wanstead) (Lab): Does the Deputy Prime Minister recognise the difference between 1 million trade union members donating £1 each to a political party and a wealthy individual writing out a cheque for a million quid?
The Deputy Prime Minister: As I said, I think that it is unhealthy if any political party is over-reliant on particular organisations, individuals or vested interests for their financial survival, and that is why I hope that all of us—given that all political parties have been affected by this in one way or another—can work together after the Committee on Standards in Public Life has produced its recommendations so that we can find a solution.
Sadiq Khan (Tooting) (Lab): The Deputy Prime Minister is right that all three major political parties entered the election with a commitment to reform the way in which political parties are funded. Will he confirm that he will follow convention and seek cross-party agreement on the way forward? Will he also outline the timeline he has in mind? There has obviously been a delay in relation to the Committee on Standards in Public Life. When does he think we will be able to start the discussions to resolve this issue?
The Deputy Prime Minister: I agree that we should always seek to deal with this issue on a cross-party basis where possible. However, I cannot give the right hon. Gentleman a precise timetable because it is not within the gift of the Government to decide when Sir Christopher Kelly produces his committee’s report. As soon as he does, I hope that we can consider the recommendations together to see whether they provide a basis for cross-party discussions.
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The Parliamentary Secretary, Cabinet Office (Mr Mark Harper): The hon. Gentleman will know that it is the individual responsibility of electoral registration officers to improve registration rates, but the Government are committed to helping them. He will know that the local council in his area is taking part in one of our data-matching pilots. I hope that that will have a positive effect on driving up registration rates, and then we can see whether it has lessons for rolling out such a system across the country.
Michael Connarty: Although it gave me great pleasure that Iain McKenzie was elected comfortably as the Labour candidate in the Inverclyde by-election—I was doubly joyous that the Liberal Democrats lost their deposit—I was concerned by the number of people I met who did not have an electoral registration card and were somewhat confused. Will the Minister assure me that the data-matching that he mentioned will be followed up by the Government, so that the responsibility, and the blame, is not left to electoral registration officers? It is a Government responsibility, if they want equal votes of equal value, to ensure that everyone is on the register.
Mr Harper: I very much agree with the last sentiment that the hon. Gentleman expressed. My officials are working closely with all local authorities that are looking at matching electoral registers with other existing government databases, to see whether we can identify people who are eligible to vote, but not on the register, and to follow them up. The evidence from the pilots will be looked at not just by the Government but by the Electoral Commission, and if the pilots prove successful we will look at rolling them out across the country. I welcome the hon. Gentleman’s support for that initiative.
Mr Gary Streeter (South West Devon) (Con): Given that a key issue in increasing voter registration is the performance of electoral registration officers in every locality, which we know can vary enormously, is it not time that the Government gave the Electoral Commission the power to direct, and not just to issue advice?
Mr Harper: My hon. Friend, who answers very ably for the Electoral Commission in this House, will know that it has made that point strongly to the Government. We will look at the analysis of the referendum this year, when the head of the Electoral Commission, as the chief counting officer, had that power of direction. We will look at how that worked in practice and then take a view on whether it makes sense to consider it for elections more widely.
The Deputy Prime Minister (Mr Nick Clegg): As Deputy Prime Minister, I support the Prime Minister on the full range of Government policy and initiatives, taking special responsibility for this Government’s programme of political and constitutional reform.
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The Deputy Prime Minister: I do not think that it is an either/or choice. As the hon. Lady knows, there is a commitment in the coalition agreement to establish a commission to look into the West Lothian question, but I do not think that that precludes the Joint Committee looking at proposals for reform of the House of Lords at the same time.
Ms Harriet Harman (Camberwell and Peckham) (Lab): Will the Deputy Prime Minister join me in expressing heartfelt concern for the horrendous ordeal of Milly Dowler’s family? There are now allegations that even as the police searched for Milly Dowler and as her parents waited and hoped, the News of the World was hacking into her phone. Today the Leader of the Opposition has called for a full public inquiry into illegality in the newspaper industry. Will the Deputy Prime Minister say that the Government will back that call?
The Deputy Prime Minister: I entirely agree with the right hon. and learned Lady, and I am sure that we both speak on behalf of the whole House and the rest of the country in saying that if the allegations are true such behaviour is simply beneath contempt. To hack into the phone of a missing child is grotesque, and the suggestion that that might have given false hope to Milly’s parents that she might have been alive only makes it all the more heart-rending. The absolute priority now is to get to the bottom of what actually happened—what is the truth—and that requires, above and beyond everything else, a police investigation that pursues the evidence ruthlessly, wherever it leads.
Ms Harman: Of course, this time the police investigations must be thorough and rigorous, but there must also be a public inquiry. There has been widespread malpractice and criminality, and there is a stain on the whole system. We must protect people from this and clean up the British press. Is the Deputy Prime Minister going to act?
The Deputy Prime Minister: If there are wider issues that need to be looked at once the police investigation is complete, of course we can return to them. However, I am sure that the right hon. and learned Lady will agree that the key thing—this is what Milly Dowler’s family and families up and down the country want to know—is: who did what when, who knew what they were doing and who will be held to account? We will be able to get to the bottom of that only when the police ruthlessly pursue the evidence, wherever it leads.
T3.  Stephen Metcalfe (South Basildon and East Thurrock) (Con): A constituent of mine who wishes to remain nameless has contacted me because she believes that a “YES! To Fairer Votes” preaddressed postal vote form was fraudulently completed on her behalf. Can my right hon. Friend tell me what action my constituent can take to establish who might have signed the form on her behalf and what measures we can introduce to prevent this from happening again in future?
The Deputy Prime Minister: If my hon. Friend has evidence from his constituent of criminal or fraudulent behaviour, it should of course be referred to the police. I suggest that should be done as quickly as possible.
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T2.  Ian Murray (Edinburgh South) (Lab): The NSPCC has announced the closure of ChildLine in Edinburgh, which will result in the loss of 14 staff and hundreds of volunteers. The thrust of the closure is to encourage children to use the internet, but there is concern that those who are most in need of ChildLine have the least access to the internet. Will the Deputy Prime Minister meet me, the NSPCC and the many hundreds of ChildLine volunteers in Edinburgh to see whether we can get this decision reversed?
The Deputy Prime Minister: I am sure that the hon. Gentleman is right to raise his concerns about the effect of that closure, given that ChildLine exists precisely to help the most vulnerable children. I am more than happy to establish meetings for him, and I would also suggest that meetings take place in Edinburgh with the Scottish Government, whose responsibilities have a bearing on this issue—[ Interruption. ] They might be able to help.
T4.  Esther McVey (Wirral West) (Con): Is it not about time that we introduced a British Bill of Rights to address ludicrous cases such as that of the convicted foreign killer Mohammed Ibrahim, who is avoiding deportation by claiming the right to family life, even though he killed Amy Houston, thereby denying all her relatives the right to family life?
The Deputy Prime Minister: I hear my hon. Friend’s concern about these matters, and she is quite right to raise them. The Government have established a commission to look into the case for a British Bill of Rights that will incorporate and build on the existing rights that we already enjoy and extend them further where we can.
T6.  Angela Smith (Penistone and Stocksbridge) (Lab): The right to form coalitions is very much part of our constitution. In Sheffield recently, Lib Dem councillors have co-opted a United Kingdom Independence party candidate on to one of our local town councils in order to maintain their grip on power. Does not this show that the Lib Dems will do anything, and do deals with any party, to maintain their grip on power?
T5.  Gordon Henderson (Sittingbourne and Sheppey) (Con): Does my right hon. Friend the Deputy Prime Minister understand the resentment felt by many taxpayers in my constituency when they see their taxes being used to help to provide a range of free services in Scotland that are not enjoyed by the English? When will the Government take action to bring that unfair subsidy to an end?
The Deputy Prime Minister: One of the reasons we are transferring a great deal of new fiscal freedom to the Scottish Administration through the Scotland Bill is to ensure not only that the Scottish Government enjoy greater freedom to raise and spend money but that they are held to account for it. That is exactly what we are seeking to achieve in the Scotland Bill.
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T9.  Graham Stringer (Blackley and Broughton) (Lab): The Deputy Prime Minister has said on many occasions that if the House of Lords was reformed, this House would retain its primacy over the other place. In an article last week in The Times, his predecessor as leader of the Lib Dems, Lord Ashdown, said that if the House of Lords was reformed, it would have the right of veto over the decision to go to war. Who is right: the Deputy Prime Minister or his predecessor?
The Deputy Prime Minister: The House of Lords will clearly enjoy greater democratic legitimacy if it is wholly or largely elected, but that does not call into question the primacy of this House. Bicameral chambers all round the world manage this relationship perfectly adequately, with two directly elected chambers that have a relationship of subservience between the one and the other. That is precisely what will continue under the reforms that we have proposed.
T7.  Peter Aldous (Waveney) (Con): Later this week, I shall attend a meeting of Waveney youth council in my constituency. Given the declining proportion of young people voting at recent elections, I would welcome an update to pass on to the youth council on the steps that my right hon. Friend is taking to ensure the early registration of young people and their active engagement in the political process.
The Deputy Prime Minister: We hope that the process of individual electoral registration that we are pressing ahead with, and particularly the practice of comparing existing databases with the electoral register, will enable us to identify voters, old and young, who should be on the register but are not.
Chris Ruane (Vale of Clwyd) (Lab): The finest databases in the country are run by Experian. I recently had a meeting with it to discuss the 3.5 million people who are not on the electoral register. It informed me that not 3.5 million but 6.5 million people are not on the electoral register. What steps is the Deputy Prime Minister taking to use the private sector—companies such as Experian and others—to increase the number of registered voters?
The Deputy Prime Minister: It is precisely to get to the bottom of exactly how many people who are not on the register but should be that we commissioned detailed research from the Electoral Commission to establish the facts. As I said earlier, we are running these projects so that we can have access to other publicly available databases to make sure that they are consistent with the electoral register.
T8.  Mark Menzies (Fylde) (Con): Does the Deputy Prime Minister agree that by delivering 103,000 more adult apprentices than were promised by the previous Government, this Government are delivering on their promise to rebuild the economy?
The Deputy Prime Minister: Yes, and I would add that those 103,000 apprenticeships are twice the target number that had originally been set for this year. In total, we will deliver 250,000 more apprenticeships during this Parliament than Labour would have delivered if they had been in power. We believe that apprenticeships are a tried, tested and successful way of getting people from full-time education into full-time work. That is what we are absolutely dedicated to deliver.
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Kelvin Hopkins (Luton North) (Lab): The recent referendum showed an enormous majority of the British people in favour of first past the post for British elections. May I suggest to the Deputy Prime Minister that a return to first past the post for European elections would be equally popular and that the Government should legislate accordingly?
T10.  Paul Uppal (Wolverhampton South West) (Con): Will the Deputy Prime Minister tell us what plans are in place to inform voters of the proposed changes to the House of Lords, particularly regarding an election in 2015—and how much will that cost?
The Deputy Prime Minister: The costs will, of course, be dependent on the final shape of the reforms—on exactly how large the House of Lords is and what proportion of its Members will be elected, and so forth. We have made suggestions on these issues, but we have been entirely open about wanting to listen to alternative suggestions with an open mind. That is why the Joint Committee process, which brings people together from both Houses to look at this in greater detail, is immensely important not only for improving the proposals but for giving the public a chance to scrutinise the proposals, as the hon. Gentleman suggests.
Mr David Winnick (Walsall North) (Lab): As police investigations into phone hacking have been going on for some considerable time, is there not now a strong case for having a public inquiry, as requested from the Front Bench by my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman), particularly in view of the latest information about the hacking of a murdered person’s phone. That is so disgraceful that a public inquiry is absolutely essential.
The Deputy Prime Minister: I totally understand the instinct for wanting something more to be done than the current police investigations. If we want the truth established, however, and if we want to turn allegations into facts and then to hold people to account and, where necessary and justified, to see prosecutions delivered, I strongly suggest to the hon. Gentleman that it is in his interest and that of all who want to see the truth properly exposed that we allow the police to get on with the investigation and ruthlessly pursue the facts and the evidence, wherever they might lead.
T11.  Mr David Amess (Southend West) (Con): With the whole country gripped by Southend mania, in the knowledge that it is the finest seaside resort with a pier in the world and entirely deserving of city status, will the Minister tell us when local residents in Southend can expect the crowning to take place?
The Deputy Prime Minister: I recognise the enthusiasm for the Southend bid, which I know is shared by many other Members who come from other places applying for city status. This will work its way through in the normal way, and I know that the hon. Gentleman will be waiting for the results with bated breath.
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Dr William McCrea (South Antrim) (DUP): What comparison has been made between the system of individual electoral registration operating in Northern Ireland and the one that operates in the rest of the United Kingdom?
The Deputy Prime Minister: We have learned all the lessons about the flaws in the electoral register here. That is exactly what we are seeking to address, not least by looking at the experience in Northern Ireland and elsewhere.
T12.  Miss Anne McIntosh (Thirsk and Malton) (Con): I wish to place on record my admiration for the ambition shown by the Deputy Prime Minister, but does he not agree that if he sticks to his present programme and allows the first elections to the House of Lords to be held in 2015, it is over-ambitious—even according to his own test—to hold them in the same month and year as the next rural district elections and the next general election?
The Deputy Prime Minister: “Ambition” was clearly intended as faint praise, and I will take it in that spirit. I think we have shown in past elections that the problems involved in the principle of combined elections can be overcome, as long as there is a clear distinction between the mandates for the bodies that are being elected on the same day.
Mr Ben Bradshaw (Exeter) (Lab): As the Deputy Prime Minister’s right hon. Friend the Business Secretary felt that there were clear grounds for a full referral of the BSkyB takeover to the competition authorities on the basis of plurality, will he tell the Prime Minister, in the light of the latest shocking developments, that it would be totally unacceptable to wave through that takeover, and that he should put a stop to the dirty deal being hatched by the Culture Secretary with News Corp?
The Deputy Prime Minister: The right hon. Gentleman will know, as he has followed events very closely, that the competition aspect was determined by the European Commission. It cleared the transaction on competition grounds. The decision will be made by the Secretary of State for Culture, Olympics, Media and Sport, acting in a quasi-judicial manner. He will not consult me, the Prime Minister or any other member of the Government while reaching his decision, and he is meticulously following the advice supplied to him by Ofcom and other regulators.
Jo Swinson (East Dunbartonshire) (LD): The coalition agreement committed the Government to setting up a fund to support people with disabilities who wish to stand for election—a move that was also recommended by the cross-party Speaker’s Conference. Following the conclusion of the Government’s consultation on the matter, will the Deputy Prime Minister update the House on the progress being made towards that goal?
The Deputy Prime Minister: I pay tribute to my hon. Friend, who has taken a great interest in this matter and has been remorseless in asking the Government when they will deliver on their commitments. We are determined to do so. As my hon. Friend said, the consultation ended recently, and we are keen to make progress as soon as we can.
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“we are worried about the impact…to build social housing for families”
“23,000 could be lost…disproportionately impacting on families and…children.”
Why was that information not shared with Parliament? What else is the Secretary of State for Communities and Local Government holding back, and why should anyone ever again believe anything that this Government say about housing and benefits?
The Deputy Prime Minister: I remind the hon. Gentleman that the manifesto on which he fought the election last year advocated a housing benefit cap. I assume that, like us, he advocated the cap because it is fair to those who do not receive benefits that those who do receive them cannot do so to the tune that would require someone in work to earn £35,000 or more. It is a fair proposal. Notwithstanding the contents of that leaked letter—which, in any case, was written six months ago; things have moved on since then—we have made it clear that when people, especially large families, need help they will be given that help, and that we will introduce transitional arrangements to provide it.
Harriett Baldwin (West Worcestershire) (Con): On 5 April the Deputy Prime Minister said there was “a need to ensure” that reform of the other place did not “overlap” with the establishment of the West Lothian commission. Given that reform of the other place may take some time, can the Deputy Prime Minister reassure us that the West Lothian commission will be in place by the time of the Report stage and Third Reading of my private Member’s Bill on 9 September?
Helen Goodman (Bishop Auckland) (Lab): Does the Deputy Prime Minister agree with the Secretary of State for Culture, Olympics, Media and Sport that the “fit and proper persons” test is irrelevant in the case of the merger between BSkyB and News International?
The Deputy Prime Minister: As I said earlier, the Culture Secretary is acting in a quasi-judicial role, he is doing so in line with advice that he has received from Ofcom and the Office of Fair Trading, and he is reflecting the legal position as it currently is. The hon. Lady may shake her head and wish that the law were different; she may wish that competition provisions could somehow be applied here, although the European Commission cleared the transaction on in competition grounds—but that is the legal position as we currently find it.
Mr Alan Reid (Argyll and Bute) (LD): Sex discrimination and religious discrimination should have no place in our society, so I am pleased that the Government are bringing forward measures to reform the succession to the Crown. However, the discussions with other Commonwealth Governments do seem to be dragging on for a long time. What is my right hon. Friend doing to ensure that those discussions come to a speedy and successful conclusion?
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The Deputy Prime Minister: As my hon. Friend knows, both the Prime Minister and I have made it clear that we think there is a strong case for looking at the rules of the succession, as they clearly need updating in this day and age, but it is not quite as simple as that, because this is subject to consultation with all Commonwealth Governments. Discussions at official level are taking place between this Government and Commonwealth Governments. I acknowledge that that is not a very rapid process, but it is right that we should deal with this sensitive topic as collaboratively as possible with other Commonwealth Governments.
Paul Goggins (Wythenshawe and Sale East) (Lab): At the recent British-Irish Council, which I understand the Deputy Prime Minister chaired, was there any discussion of the economic impact of different levels of aviation taxes, given that for a long-haul flight from the UK that is currently levied at £85 a head, whereas from Ireland the tax is just €3?
Mrs Eleanor Laing (Epping Forest) (Con): Pursuant to the answer that the Deputy Prime Minister has just given to the hon. Member for Argyll and Bute (Mr Reid), does the Deputy Prime Minister not understand that his constant answer that negotiations with Commonwealth countries about reforming the Act of Settlement are ongoing sounds rather like an excuse for inaction, given that no Commonwealth country has shown anything but respect, reverence and adoration for our female monarch for the past half century?
I totally accept—I have spoken publicly about this—that it seems a little anachronistic that we have rules of succession that appear to discriminate against women, and that clearly should be looked at, but as my hon. Friend the Member for Epping Forest (Mrs Laing) rightly pointed out, this affects many other Governments as well, and it would be wrong of us to act in haste when we need to act in a way that is open and following discussions—not negotiations, but discussions—between ourselves and other Commonwealth Governments.
The Attorney-General was asked—
1. Diana Johnson (Kingston upon Hull North) (Lab): What recent discussions he has had with the Director of Public Prosecutions on prosecution rates for cases involving allegations of trafficking of children. 
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The Solicitor-General (Mr Edward Garnier): None recently, but I can assure the hon. Lady that the DPP, the Law Officers, the Home Office—which I believe she shadows—and the Foreign and Commonwealth Office take the crime of human trafficking extremely seriously.
Diana Johnson: Can the Solicitor-General explain to me exactly how merging the Child Exploitation and Online Protection Centre into the national crime agency, against the advice of all the specialists in the field, will improve prosecution rates and the support given to victims of trafficking?
The Solicitor-General: If Parliament permits its creation, the national crime agency will not come into operation until at least 2012-13. Meanwhile, CEOP and the other necessary agencies are working together to ensure that the crime of human trafficking, which the hon. Lady takes as seriously as we do, is properly borne down upon, and I can assure her that nothing will be done to impede the efforts of the prosecuting authorities in that regard.
Tom Brake (Carshalton and Wallington) (LD): Does the Solicitor-General agree that one way to improve prosecution rates would be to ensure that all resources are used to prosecute traffickers, rather than sometimes prosecuting the trafficked children?
The Solicitor-General: Of course I do, and it is imperative that trafficked children, who are the victims of this hideous crime, are not prosecuted but are treated as victims. Equally, it is imperative that adults under such duress, too, are not prosecuted but treated as victims. The Crown Prosecution Service recently published a public policy statement, which I am sure my hon. Friend has read, and the Home Office will shortly publish a human trafficking strategy that will deal very much with the points that he has made.
Miss McIntosh: Does the Solicitor-General have any idea about the level of prosecution of rape cases in Scotland compared with that in England? Will he undertake to remove all barriers to prosecution? In particular, will he facilitate the reporting of rape cases, which will speed up the prosecution rate in due course?
The Solicitor-General: I am sure that what is similar in Scotland and in this jurisdiction is not only that rape is taken extremely seriously by the prosecuting authorities and the police, but that prosecution requires evidence. It is essential that victims of rape and sexual assault are enabled to give their evidence and to withstand the hideous stress that necessarily follows from being a witness in a rape or sexual assault case. I can assure my hon. Friend that the Director of Public Prosecutions has personally overseen the drive to improve the approach of the CPS to rape prosecutions.
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The Solicitor-General: That is a decision not only for the DPP but for the chief Crown prosecutors in the various areas throughout the jurisdiction. This will depend on business need, but I assure the hon. Lady that rape prosecutions will be pursued with the same vigour both now and in the future.
The Solicitor-General: The CPS is taking a number of steps to encourage victims of human trafficking to support criminal proceedings, including the publication of a new public policy statement setting out its prosecution policy and how it will support victims. As I said to my hon. Friend the Member for Carshalton and Wallington (Tom Brake) a moment ago, the Home Secretary will shortly publish her Department’s human trafficking strategy. The CPS is also working with non-governmental organisations to develop further measures to assist and support victims.
Michael Connarty: I am very heartened by the general replies and that specific reply from the Solicitor-General on this question, but we are aware of reported cases of magistrates saying to a 14-year-old girl who had been trafficked and found in a cannabis factory that she had clearly made a lifestyle choice. Did the Attorney-General give any evidence, or a submission, to the Home Secretary in the upcoming review? If not, why not? If so, will he place a copy of his contribution in the Library for us all to read?
The Solicitor-General: It would not be sensible for me to comment on unattributable, or unattributed, remarks by unidentified magistrates. If what the hon. Gentleman suggests was said in that case was said, it was clearly unwise. The Law Officers’ Department did make a contribution to the thinking behind the Home Secretary’s human trafficking strategy. The hon. Gentleman will be able to read the strategy in full when it is published next week, and it will doubtless refer to all sorts of sources.
“Some potential and confirmed trafficking victims, including children, were prosecuted and imprisoned for committing offenses as a direct result of being trafficked.”
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The Solicitor-General: As I said in answer to the hon. Member for Linlithgow and East Falkirk (Michael Connarty), and in connection with an earlier question, the Crown Prosecution Service public policy statement makes it clear that those who are trafficked—those who are victims of the trafficking—should not be prosecuted.
Mr Peter Bone (Wellingborough) (Con): We are having rather lovely weather at the moment, and this spring seems to be going on for a very long time. Did the Solicitor-General let it slip that spring was going to end next week, and are we actually going to see the trafficking policy next week? If so, can he confirm that an oral statement will be given, rather than a written one?
Gavin Shuker (Luton South) (Lab/Co-op): Paying for sex with a trafficked woman is a criminal offence under section 14 of the Policing and Crime Act 2009. What steps are the Government taking to ensure that section 14 is fully used by the police and Crown Prosecution Service? Will the Solicitor-General confirm that he is considering a pause in issuing CPS guidance, which could be a wasted opportunity at this stage?
The Solicitor-General: The Crown Prosecution Service assesses the evidence given to it by the police. If that evidence passes the evidential test and it is in the public interest to prosecute, those who commit such crimes will be prosecuted. Beyond that, I am not sure that I can usefully help the hon. Gentleman other than by repeating myself.
Domestic and Sexual Violence
5. Mrs Siân C. James (Swansea East) (Lab): What recent assessment he has made of the role of specialist domestic and sexual violence services in supporting prosecutions in cases involving allegations of such offences. 
The Solicitor-General: The evaluations of specialist domestic violence courts conducted between 2005 and 2008 demonstrated that specialist domestic violence support services contributed to improving prosecution rates as well as to the safety of domestic violence victims. More recent analysis, conducted on behalf of the Crown Prosecution Service, has also shown a significant reduction in domestic violence against supported victims. There has been no formal assessment of sexual violence services.
Mrs Siân C. James: The Swansea sexual assault referral centre, or SARC, is one of four across Wales run by the New Pathways organisation. I have been informed that the centre receives no statutory funding for any work that it undertakes with children and young people, who often suffer the worst types of sexual abuse and violence. The majority of its referrals come from the statutory sector. Will the Solicitor-General promise me that he will look at the issue and at the gap in the funding that the centre receives?
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The Solicitor-General: I can certainly promise to look into that. This Government, including my Department, value the work that such agencies perform. As the hon. Lady will know, in her part of Wales there are two SDVCs—or specialist domestic violence courts—one in Neath and one in Swansea, as well as other necessary advisory services. I appreciate that we are in a time of great economic constraint, but we will do our best with the resources that we can make available to them.
Mr Robert Buckland (South Swindon) (Con): One of the main challenges facing vulnerable complainants and their families is the sometimes lengthy time gap between the making of their complaint and their appearance in court. Does my hon. and learned Friend agree that the work of women’s refuges, such as the one in my constituency, and of police family liaison officers is vital if we are to maintain the confidence we need in complainants in order for them to follow their complaints through the criminal justice process?
The Solicitor-General: I know that that is true not only in my hon. Friend’s constituency but throughout the rest of the country. It is important that the advisory services and family liaison staff are there to help those affected by such crimes of violence, whether they involve sexual or non-sexual assault, so that they can bring their evidence to court and the perpetrators can be convicted.
Arrest Warrants (War Crimes)
6. Ann Clwyd (Cynon Valley) (Lab): Whether the Government plan to make additional resources available to the Director of Public Prosecutions to enable him to discharge the new responsibilities contained in the Police Reform and Social Responsibility Bill to consider arrest warrants in war crimes cases. 
Ann Clwyd: The Solicitor-General will have read the report of the Joint Committee on Human Rights on this issue, which finds that the Government have not made their case and that they should think again. I find it particularly ironic that we are prepared to change the law to protect one Israeli opposition leader when another opposition leader, the Palestinian Sheikh Salah, comes here and is put straight in jail. Where is the justice in that?
The Solicitor-General: I appreciate the right hon. Lady’s interest in this aspect of public policy, and I also appreciate that she has firm opinions on the matter. She is fully entitled to those opinions. In short, the law was changed not in order to solve the problems of one individual but to deal with a public policy problem. She knows that really.
Duncan Hames (Chippenham) (LD):
On 11 January, in this House, a Justice Minister assured me that allegations under universal jurisdiction offences would be accorded the highest priority. Does the Solicitor-General accept
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the need for an out-of-hours response so that we can be confident that those suspected of such serious crimes will not evade arrest?
The Solicitor-General: The criminal justice system, as the hon. Gentleman knows, never rests. If someone is arrested or brought into custody, he will have available to him, or should have, not only the benefit of the attention of the police and the Crown Prosecution Service but also of his own defence lawyers.
Female Genital Mutilation
7. Kerry McCarthy (Bristol East) (Lab): What steps the Crown Prosecution Service is taking to bring prosecutions under the provisions of the Female Genital Mutilation Act 2003; and if he will make a statement. 
The Solicitor-General: The Crown Prosecution Service is due to publish new legal guidance on female genital mutilation—FGM—later this summer as part of its commitment to the cross-Government strategy on the prevention of violence against women and girls. I know that the hon. Lady has done a good deal to draw attention to the issue of FGM in Bristol, not least through her work with the Bristol safeguarding children board, which has raised awareness of FGM among midwives and other health professionals, the police and social workers.
Kerry McCarthy: I thank the Solicitor-General for that response. He made reference to the safeguarding children board, which estimates that up to 2,000 girls in Bristol are at risk. Obviously, the summer holidays are a particular problem period. May I urge the hon. and learned Gentleman to do all he can to work with teachers in schools and through his colleagues at the Department for Education to make sure that girls at risk are identified and steps are taken to prevent FGM, rather than just prosecuting people when the offence has been committed?
The Solicitor-General: Yes, and I can tell the hon. Lady that the Home Office, the Metropolitan police and the Foreign and Commonwealth Office launched a DVD on the subject on 4 July—yesterday. It was produced by young people for young people, and seeks to raise awareness of FGM among potential victims. It will be distributed to all schools by September 2011, so I hope the hon. Lady is reassured by that.
Contempt of Court
8. Chi Onwurah (Newcastle upon Tyne Central) (Lab): Whether he plans to take steps to reduce the likelihood of any future prosecutions for contempt of court arising from the use of social media. 
As guardians of the public interest, the Law Officers bring contempt of court proceedings when it is appropriate to do so. I did so in the case of Fraill and Sewart in the divisional court, in which the Lord Chief Justice presided on 14 and 16 June. It is for the trial court judge to warn parties, and the public, not to publish prejudicial reports, and when
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appropriate to impose reporting restrictions. Juries in particular are warned repeatedly by the court not to use the internet to research cases in which they are involved.
Chi Onwurah: I do not know whether the Solicitor-General is on Twitter, but I am concerned that not only he, but UK law, appears to be on the back foot when facing what is not even new technology. Twitter is five years old next month. Is it not time we demonstrated that UK law is as at home online as on the streets?
The Solicitor-General: Let me confess: I do not tweet, nor do I have a Facebook account; perhaps the hon. Lady is not terribly surprised by that. In the relationship between social media and the law of contempt, the principle and the issues are exactly the same. The means of communicating may have evolved, but the principles we need to apply to ensure that the due administration of justice is not impeded or prejudiced remain the same for talking over the garden fence as for exchanging information through modern internet and social media.
Anna Soubry (Broxtowe) (Con): Would the Solicitor-General confirm that judges always give strict directions to juries that they must not access any form of internet or other information sources when considering their deliberations in a criminal trial?
The Solicitor-General: Yes they do, and I have done it myself when sitting as a judge. What one cannot guarantee, of course, is that members of juries will obey those instructions and directions when they get home—but we have to rely on the good sense and public duty of citizens whose public duty it is to serve on juries.
Catherine McKinnell (Newcastle upon Tyne North) (Lab): Public concern about the misuse of modern communication technology, including social media, is growing, particularly about its impact on the pursuit of justice. That was most recently highlighted by the truly sickening allegations of phone hacking in the Milly Dowler case. The CPS announced a review of hacking evidence almost six months ago. When will the public and victims receive an update? Will further criminal prosecutions be brought, and will the Solicitor-General confirm whether any criminal investigations may have been jeopardised by the behaviour of the press and the rest of the media?
The Solicitor-General: With the greatest respect, I think that if the hon. Lady had thought about it a little more, she would understand that I am not going to give a running commentary either on the police investigations or on the likely consequences of any police investigations. She may rest assured that investigations will continue, and they will continue to follow the evidence wherever it may be—and if the evidence warrants prosecutions, they will be brought. That is work that we need to do in future; it is not something that I need to make announcements about here in the absence of any direct or relevant information immediately to hand.
Legal Advice (Declaration of War)
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The Solicitor-General: The hon. Gentleman’s Political and Constitutional Reform Committee reported in May on Parliament’s role in conflict decisions, and the Government will respond to his report shortly. The Foreign Secretary told the House on 21 March in the Libya debate that the Cabinet had the Attorney-General’s advice before it when the decision was made to take action in Libya. A Government note on the legal basis was placed in the Library that day, and was available to right hon. and hon. Members for that debate.
The Solicitor-General knows better than most of us that there is a separation of powers, at least theoretically, in our constitution, and that the problems that we had over legal advice in relation to the Iraq war
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centred on the legal advice given to the Government by their own Attorney-General. Will he also take into account that Parliament has no right whatever to consult and get its own legal advice? Will he discuss with the House authorities putting that right, so that on future occasions when there is a conflict, Members can get their own advice rather than relying on trying to wheedle the Attorney-General’s advice out of Government?
The Solicitor-General: It is not for me to stop Members of Parliament getting whatever advice they think it appropriate to have, but the decision that has to be considered and accounted for to Parliament is that of the Prime Minister and the Government. That can be debated here, irrespective of one’s access to legal advice.
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Chris Bryant (Rhondda) (Lab): I rise to propose that the House should debate a specific and important matter that should have urgent consideration: whether there should be a public inquiry into phone hacking at the News of the World and the related conduct of the Metropolitan Police Service between 2006 and 2011.
There cannot be a single person in the land who is not sickened by the news that a private investigator working for the News of the World hacked the phone of the missing teenager, Milly Dowler, and deleted some of her messages, thereby leading the family to believe that she might still be alive. That is not just a paper out of control; that is not just a paper believing it is above the law. It is a national newspaper playing God with a family’s emotions. Those involved, those whose negligence allowed it to happen, and those who covered it up should be truly ashamed, and the paper cannot pretend that this comes as a massive surprise to it. The News of the World ran a story directly referring to one of the messages. Even more cynically, only last weekend it wrote that people should be rightly disgusted at the “courtroom torture” of Milly Dowler’s family. What about the newspaper torture as well?
This is not just about one incident, as hideous as it is. It is about systematic criminality that has perverted police investigations and seriously damaged the reputation of British journalism and of the Metropolitan police. It is about a pattern of lies and half truths told to Parliament by the News of the World—that there was just one lone reporter; that no senior managers knew anything about all of this.
What makes it really important and urgent, however, is that this is about the behaviour of the Metropolitan police, in whom we put our trust. They had all this information in their hands in 2006, and yet they did nothing with it. Why have they lied time and time again to Parliament, saying that a full investigation had been done and that all the victims had been informed when self-evidently they have not been? In the end, the problem and the scandal is that the Metropolitan police, as the Deputy Prime Minister mentioned earlier, did not pursue the evidence and it is only because of the current campaign that a full investigation is now going on.
The only way we can get to the full truth and to the heart of the cover-up is by having a public inquiry, led by a judge, in addition to the police investigation. This is urgent. The inquiry should start now while memories are fresh and before people leave the scene or shred the evidence. We should not be spineless. Warm words will make no odds. We must have an inquiry.
Mr Speaker: The hon. Gentleman seeks leave to move a motion relating to a public inquiry into phone hacking at the News of the World and the conduct of the Metropolitan Police Service between 2006 and 2011. I have listened carefully and am satisfied that the matter is proper to be debated under Standing Order No. 24. Does he have the leave of the House?
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Mr Speaker: The hon. Gentleman—[ Interruption. ] Order. The hon. Gentleman has the leave of the House. Members may resume their seats. He has the leave of the House to move his motion. As required by the Standing Order, I announce—[ Interruption. ] Order. As required by the Standing Order, I announce that the debate will be held tomorrow at the commencement of public business and that it will last for up to three hours. I think that that is clear.
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Points of Order
Caroline Flint (Don Valley) (Lab): On a point of order, Mr Speaker. The disclosure of a letter sent by the Secretary of State for Communities and Local Government’s private secretary to the Prime Minister’s Office has revealed that according to the Government’s own estimates the introduction of a benefits cap will lead to greater homelessness, higher costs for the taxpayer and fewer homes being built. The only answer the Deputy Prime Minister could muster this afternoon was that things have moved on. He had no answer on why this information was not made available to Parliament in the first place or why Ministers have denied that such an assessment has been made, and arrogantly dismissed out of hand questions about what else they might be hiding. I have raised the matter directly with the Secretary of State and asked him to come to the House to clarify how many families he believes will lose their homes and whether that information was shared with the Department for Work and Pensions. He has failed to reply. Will you advise me on whether you have received any indication from the Secretary of State that he intends to follow my suggestion by making a statement to the House?
Mr Speaker: I am grateful to the shadow Secretary of State for her point of order. As she will be aware, and as the House will appreciate, this matter was raised from the Opposition Front Bench yesterday. On that occasion I undertook to look into the matter, and I can assure her and the House that I am doing so. As and when there is anything further to report to the House—I recognise the premium on time—she may rest assured that I will do so without hesitation. I hope that that is clear.
“I do not believe in making tax changes outside a Budget, which is the proper way we do things in this country.”—[Official Report, 26 January 2011; Vol. 522, c. 284.]
Yet today, the Chancellor has announced a decision on North sea oil and gas taxation which will cost the taxpayer £50 million a year. He did so not only outside a Budget, but outside this Chamber, despite the Government having an opportunity during yesterday’s Finance Bill debate, when the House discussed at some length an amendment on the North sea tax regime, to discuss the issue and to make the announcement then. Is it in order for the Chancellor to announce a tax decision in this way?
Mr Speaker: I am grateful to the hon. Lady for her point of order, of which on this occasion I did not have notice. She certainly raises a very serious concern that she and others feel. My initial response and advice is that she should look for other opportunities to debate the matter, possibly using the Order Paper. I do not know whether it would be in order to debate the matters within the context of consideration of the Finance Bill, because I have not looked at the groups of amendments. If that opportunity exists, I have a keen sense that the hon. Lady will be aware of it. If not, she will pursue it on other occasions. I hope that also is helpful.
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Police (detention and bail) bill
Mrs Secretary Theresa May, supported by the Prime Minister, the Deputy Prime Minister, Mr Chancellor of the Exchequer, Mr Secretary Kenneth Clarke, Mr Attorney-General and Nick Herbert, presented a Bill to make provision about the calculation of certain periods of time for the purposes of Part 4 of the Police and Criminal Evidence Act 1984, and for connected purposes.
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Electricity Transmission (Protection of Landscape)
Mr Speaker: Order. Just before the hon. Lady gets under way, may I appeal to Members who are unaccountably leaving the Chamber, and not remaining to hear her, to do so quickly and quietly, so that we can afford the same courtesy to her that we would want extended to ourselves in such circumstances?
That leave be given to bring in a Bill to make provision to require factors other than cost to be considered for schemes for the transmission of high voltage electricity where infrastructure would impact on the visual and other amenity of a landscape; to provide that in certain cases such infrastructure be installed by visually unobtrusive works; to require that public consultation be undertaken and inform the selection of the method and technology for the transmission infrastructures used; and for connected purposes.
The purpose of the Bill is simple. It seeks to update the Electricity Act 1989, which recognises the transmission of high-voltage electricity only on cables strung between transmission towers, which we all know as pylons. Concerns have been raised by thousands of people throughout the country, many of whom live in rural areas and do not have the protection afforded to those in urban or suburban communities, where power lines are automatically put underground.
People who live in towns and cities, however, often enjoy their leisure time and holidays in the countryside, and I draw attention particularly to the 26,000 people whose livelihoods are dependent on tourism in my constituency, just one of many that would be damaged beyond belief if new lines on 152 ft pylons were introduced. The Somerset levels were in contention to become the 17th world heritage site until the proposal was made.
There are such problems for rural communities all over the country, as new pylons are planned to bring new supplies of energy from whatever source, be it turbines, gas, coal, wind, nuclear or tidal. What happens when we want to install cable TV? Automatically, we dig up high streets and roads all over the place. What happens when we host the Olympics? Around the whole Olympic village, power cables have been put underground. We do not suspend blue water pipes or yellow gas pipes from transmission towers, so why do we do so for electricity power cables?
National Grid has drawn to my attention the fact that it is holding a competition on pylon design, but that is purely a diversion and certainly not the answer to the country’s questions about transmission. The county council, district councils and parish councils are all against the proposals, but all that National Grid, our monopoly supplier, does is hear; it does not listen. There are alternatives, and they are underground and undersea.
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listening, not just hearing. Consultation responses should inform the method and technology for the infrastructure used. This is also about being green. Losses during transmission are about 7% once one gets the power to the cables. It is clear that undergrounding or putting cables undersea would reduce those losses significantly.
There are health reasons why we should put cables underground. The Government continue to be very poorly advised on the adverse health effects associated with high-voltage overhead power lines. Extensive studies have established a clear correlation between increased risk of childhood leukaemia, adult leukaemia, adult brain tumours, motor neurone disease, miscarriage and Alzheimer’s disease and the electromagnetic fields associated with such lines. The risk to children and adults easily satisfies a cost-benefit analysis in favour of burying high-voltage power lines.
The UK Health Protection Agency considers only a fraction—typically less than 10%—of the available scientific evidence. Included in major studies showing increased risk of childhood leukaemia are the 2005 study by Dr Gerald Draper of Oxford university, published in the British Medical Journal, and studies in Tasmania and, particularly, in Iran, where all power lines go overground. One of the many studies showing increased risks of Alzheimer’s disease is the 2008 whole-population study by Dr Anke Huss of the university of Berne, which revealed particular risks in populations living near overhead power lines in Switzerland.
National Grid is not the National Gallery, the National Trust or the national health service, but it is a massive, monopoly, multinational provider with a primary aim—to seek the maximum return for its shareholders. We have no choice but to use this super-sized company to get our power from its source to the places where it can be distributed to us in our homes and businesses. In June 2009, National Grid’s own chief executive officer, Steve Holliday, went on the record to say that undergrounding transmission lines was a “ no-brainer”. Cost is not everything.
In October 2010, Sir Michael Pitt, the chief executive of the Infrastructure Planning Commission, requested an independent and authoritative evaluation of undergrounding. The Department of Energy and Climate Change sought the assistance of the Institution of Engineering and Technology as an independent assessor of that study by a company called KEMA. The study was to be funded by none other than National Grid. None the less, it went ahead, and the results were meant to be produced on 25 January. However, nothing happened. On 3 June, the IET issued a press release stating that KEMA had not been able to issue a report with which it was satisfied owing to a lack of data from National Grid, and so the IET could not endorse its work.
It is surely time to open up this debate—to put it right into the light and demand that all these figures be provided. I am calling for openness in deciding whether power cables should be put underground or undersea instead of overground. The costs are not an issue—we all pay them through our bills. In November 2009, National Grid admitted that the cost of undersea or undergrounding would put just 1% on our electricity bills. Siemens has produced figures showing that using gas-insulated lines would reduce the whole-life costs of underground cables to under half the costs of pylons.
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I pay tribute to the work of my many colleagues across the House who are interested in this subject, particularly my right hon. Friend the Member for North Somerset (Dr Fox) and my hon. Friends the Members for Weston-super-Mare (John Penrose), for South Suffolk (Mr Yeo) and for Suffolk Coastal (Dr Coffey), as well as many others. There have been objections to pylons in Wales, Scotland, the north-east, the south-west and throughout East Anglia. I understand that there is a statement on record from Carwyn Jones, the First Minister in the Welsh Assembly Government in Cardiff, who said no to pylons too.
I also recognise the work of the many pressure groups. I am grateful to some of them for information, in particular Pylon Moor Pressure, No Moor Pylons, Save Our Valley, REVOLT, Bury Not Blight, Highlands before Pylons, North East Pylon Pressure, Montgomeryshire Against Pylons and Stour Valley Underground.
It is time to consider the impact of what we are doing to our countryside, our tourism, our health and our environment. We know the cost of everything, but this matter indicates that we might not spot the value of what we have. Changing the law would at least give us the opportunity to get it right for everyone’s sake. I am delighted to introduce this measure to the House.
That Tessa Munt, Martin Horwood, Roger Williams, Sir Robert Smith, Tim Farron, Mr Tim Yeo, Dr Thérèse Coffey, Glyn Davies, Natascha Engel, Dr Alan Whitehead, Mrs Anne McGuire and Caroline Lucas present the Bill.
The Parliamentary Secretary, Office of the Leader of the House of Commons (Mr David Heath): On a point of order, Mr Speaker. Earlier, you heard a point of order from the hon. Member for Bristol East (Kerry McCarthy), which suggested that the Government had not made Parliament aware of fundamental changes in tax policy by a statement in the House. I believe that that was incorrect. I think that she was referring to the ring fence expenditure supplement for the North sea fiscal regime. I am sure you will recall, Mr Speaker, that that was presaged in the March Budget. Further to that, a very detailed written ministerial statement was issued by the Treasury this morning and was available in the House of Commons Library at 10 o’clock. Indeed, had the hon. Lady taken the trouble to look at the Order Paper, she would have found it at No. 3 on the list of today’s written ministerial statements. I just wanted to put the record straight.
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Mr Hanson: I am grateful, Mr Speaker. In defence of my hon. Friend the Member for Bristol East (Kerry McCarthy), she was referring to the fact that there was a debate on this very issue last night in the Commons and the Exchequer Secretary made no reference to the statement being due the following day.
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Finance (No. 3) Bill
‘(2) The Chancellor of the Exchequer shall review the possibility of incorporating a bank payroll tax within the bank levy and publish a report, within six months of the passing of this Act, on how the additional revenue raised would be invested to create new jobs and tackle unemployment.’.
‘(2) The Chancellor of the Exchequer shall review the possibility of incorporating a bank financial transaction tax within the bank levy, levied on trading in financial products including stocks, bonds, currencies, commodities, futures and options and publish a report within six months of the passing of this Act, on how the additional revenue raised would be invested to tackle unemployment and reduce poverty in the United Kingdom and to assist in tackling deprivation in the developing world.’.
Chris Leslie: We now come to our general debate on taxation in respect of the Finance Bill. Clearly, one of the major omissions from the Bill is a repeat of the bank payroll levy or bonus tax that the previous Labour Administration implemented in 2009. It is not only a matter of fairness that bankers should pay some of their substantial bonuses to support people far less fortunate than them and to rebuild public trust; it makes economic sense too. I hope that our amendment 13 will persuade the Government of the merits of a review of how the bank bonus arrangement could be incorporated into the bank levy. A fair tax on bank bonuses would help to get people off the dole and into work, and it is the best way to get the deficit down and stop Britain’s talent going to waste.
Youth unemployment rose sharply in the recession, as we know, but a year ago it was starting to fall steadily thanks in part to the youth jobs programme and the future jobs fund advocated by the previous Administration. One of the first things that the current Chancellor of the Exchequer did was to scrap that successful programme. Before the election the leader of the Liberal Democrats, now the Deputy Prime Minister, said:
“Parents used to worry about whether their children could get onto the housing ladder, now the concern has spread to whether they can even get a job…We must provide a lifeboat to this lost generation.”
In the 1980s, youth unemployment continued to rise for four years after the recession was over, and whole communities were scarred as a result. Many of the effects can still be seen and felt in places across the country. That is why we believe we need to act urgently to prevent disastrous mistakes from being repeated. There are now 31,000 more young people unemployed than there were last summer, and one in five 16 to
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24-year-olds is now out of work. Although there has been a welcome fall in unemployment in the past two months, the claimant count is still rising, vacancies are down and job creation has slowed in the six months since the spending review. Unemployment is set to be 200,000 higher over the coming years than was expected just a few months ago, and the Office for Budget Responsibility keeps revising the figure upwards, just as it keeps revising the growth figures downwards.
We believe that a repeat of the bank bonus tax could be used to create more than 100,000 jobs, build 25,000 affordable homes, rescue construction apprenticeships and of course boost investment in businesses. Putting young people on the dole is not just a waste of talent but a waste of money, and failing to get Britain back to work fast enough is helping to push the benefits bill and welfare costs up by more than £12 billion, or more than £500 a household. It is not rocket science—more young people out of work means more money spent on benefits and less money coming in through tax receipts to pay down the deficit.
Considering how the future jobs fund and the bank bonus levy worked, we believe that sufficient revenue could be raised to invest the money in creating 90,000 good jobs to get young people into work and ensure that we do not make the mistakes of the past. It could also be used to build 25,000 homes to support people as they get back to work. Our plan could generate more than 20,000 jobs in that sector and save several times more jobs in the supply chain and as many as 1,500 construction apprenticeships. That would leave sufficient resources to boost the regional growth fund by £200 million, to support companies that want to start projects that will create more jobs, meaning more help for small businesses in regions up and down our country.
Our amendment is pretty straightforward and, I hope, fairly unobjectionable. It asks the Chancellor of the Exchequer to review the possibility of incorporating a bank payroll tax within the bank levy, and to publish within six months of the passing of the Finance Bill a report on how the additional revenue would be used.
Mr Chuka Umunna (Streatham) (Lab): One of the objections that has been raised to reintroducing the bank bonus tax is that it would lead to a flight of talent abroad. We have often been told that a number of people would go from the City to Switzerland, for example. Has my hon. Friend noticed that in 2011, just under 400 of the 330,000 people working in banking and financial services in the City went to Switzerland, and that the year before the number going there fell by 7%?
Chris Leslie: An excellent statistic from my hon. Friend. We are often told that the reason we cannot take any action is that complex descriptor “regulatory arbitrage”. It is a term that belies what it actually means—people fleeing the country, usually because they want to pay lower taxes. Actually, there are good reasons for the financial services sector to stay and thrive in this country, and they are not just about tax and regulation. They are not always financial reasons. We have Greenwich mean time, and we have a great rule of law that can ensure that businesses succeed and thrive. I believe that that is ample for our financial services sector to be rejuvenated and sustainable. The talk of “regulatory arbitrage” is in many cases the last refuge of the scoundrel.
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The Government are letting the banks off the hook. They are taking a light-touch approach on taxing the banks by failing to repeat the banker bonus tax that the previous Labour Government levied, which brought in £3.5 billion.
David Rutley (Macclesfield) (Con): Is the hon. Gentleman not aware that this Government’s banking levy raises £2.5 billion, compared with the £2.3 billion one-off net yield of the bonus tax that the previous Government levied? The bank levy is a proactive statement by this Government—action that will lead to the raising of more than £10 billion over the course of this Parliament.
Chris Leslie: The problem is that we should have not either/or, but both. The bank levy and the banker bonus tax would be a fair contribution from the banking sector—[ Interruption. ] The Minister disagrees, but that is his opinion. The OBR says that the yield of a bonus tax could be £3.5 billion, but even a conservative estimate of, say, £2 billion would mean significant money that could eat into youth unemployment.
Mr Hoban: I will make my remarks in my own time, but I remind the hon. Gentleman that he and his colleagues stood on a manifesto that rejected the bank levy. It is a bit rich for him now to talk of having both a bank levy and a bonus tax, because at the last election he and his colleagues rejected both ideas.
Chris Leslie: Let us assume that the Minister is mistaken in his understanding of the Labour manifesto; I certainly would not accuse him of twisting our hope of an international agreement on a bank levy. Many countries are adopting the bank levy idea, and it is often much higher than the one we are pursuing. The Opposition believe that the bank levy is important, and we support it as it is, but—
Chris Leslie: The question the Minister must answer is this: why is he taking no action at all on banker bonuses, and specifically on repeating the previous Government’s banker bonus? Why does he refuse to do that?
“coordinated internationally to avoid jeopardizing the UK’s competitiveness”.
The previous Government were not even thinking about a bank levy—they ruled it out. They said that we should not set the tone of the international debate. This Government have had the courage to do so. It is about time that the hon. Gentleman recognised our willingness to take that tough decision to raise more money from the banks than the previous Government raised from their bank payroll tax.
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Chris Leslie: I am sorry that the Minister repeats the point he made earlier. Of course, if the previous Government could have got international agreement writ large on a bank levy, so much the better, but this Government have introduced their bank levy at a puny level. It is a shame that the Minister refuses to repeat the bonus tax on senior executive bankers who take home obscene amounts of money, when that revenue could be used to help to get young people off benefit and into work. It is a shame that he turns his face against that idea. He thinks that the revenue raised by the levy is adequate, but the Opposition do not. We believe that it is necessary for the banks to do more to pay their fair share.
Bill Esterson (Sefton Central) (Lab): My hon. Friend is right. Does he agree that the Government’s arguments on the levy would be more credible if their corporation tax cuts did not substantially benefit the banks? It would be better if they supported amendment 13.
Chris Leslie: Indeed. Sometimes Government Members protest too much. The Opposition simply want a review of what the bank levy combined with the bonus tax could yield. My hon. Friend is right about the corporation tax cuts from which the financial sector will benefit. The sector will have a tax cut of £100 million in 2011-12, £200 million in 2012-13, £300 million in 2013-14, and £400 million in 2014-15. That is a £1 billion corporation tax cut over this Parliament. The Treasury ought to supplement its very modest bank levy plan with the bank bonus tax because it is only fair that those who played such a central role in the global economic downturn make a greater contribution to help to secure the economic recovery by supporting jobs and growth.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC): I agree with the thrust of the hon. Gentleman’s argument—the bankers are getting off far too lightly—but rather than introducing a payroll tax, as he suggests in the amendment, would it not be better to increase the corporate levy? Would that not deal with the bonuses issue?
Chris Leslie: We discussed in Committee how the bank levy might be altered, and I will come in a moment to my own criticisms of how the Government have framed the bank levy. Their original plans would have brought in far more revenue, but the banks started complaining so the levy was shrunk back to a level that the banks felt was acceptable, not to a level the taxpayer felt was acceptable.
Frank Dobson (Holborn and St Pancras) (Lab): Will my hon. Friend confirm that in order to pay for the corporation tax reduction, which has greatly benefited the banks, the Government withdrew quite a bit of the special funding that had previously been provided for investment in industrial activity? So much for their claim to be promoting British manufacturing! In fact, their taxation policies continue to over-promote the banks.
Chris Leslie: Indeed, they have imposed stealth tax after stealth tax on ordinary working people and small—and larger—businesses in this country. For some reason—we know not why—they have sought to give help and support to the banks at a time when they ought to be paying their fair share.
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Stephen Williams (Bristol West) (LD): I thank the hon. Gentleman for giving way three times on the same point. My recollection of the Committee stage upstairs was that he and his colleagues did not oppose the Government’s reduction in corporation tax and actually thought it a good thing. Perhaps he will recall that the reason the bank levy was increased was to take account of the fact that some banks might benefit from that reduction.
Chris Leslie: I agree with my right hon. Friend—they definitely will benefit from the reduction. I am not sure that the counteracting change—the tweak to the bank levy—goes far enough to counteract that corporation tax change. There are ways in which the bank levy could be amended further, but in general we support the principle; it is the design and the level at which it is set that we object to.
Amendment 31, tabled by my hon. Friend the Member for Hayes and Harlington (John McDonnell), relates to a financial transaction tax, for which a strong and impressive case can be made. Many of us, on both sides of the House, will have received letters and e-mails from constituents through the Robin Hood Tax campaign, which many charities have advocated. I pay tribute to the technical work that they have done on that issue. What may well be very minor changes to transaction levies could, according to many of these designs, generate significant and useful resources. Clearly, though, we need a design that does not jeopardise the rejuvenation of a stable and well-balanced financial services sector, so we would need an honest assessment of the impact of such a tax.
I am appalled that the Government have for now ruled out a financial transaction tax. It should not only stay on the table, but be actively examined and reviewed. Government Members might say that they are pursuing a financial activities tax—a slight variant in this policy area—instead, but the Chancellor, having talked about that last June, has made absolutely no progress with international jurisdictions in advocating or gaining support for it. We see no action by Ministers on what were ultimately G20 discussions about a financial transaction tax. We have not seen them explore either that possibility or a financial activities tax. The only qualm I have with my hon. Friend’s amendment is whether it stresses sufficiently the need for international agreement and discussion. Nevertheless, it is certainly something that, in broad terms, we think needs to stay on the table to be examined further.
Alison McGovern (Wirral South) (Lab): That is a crucial point, because moving ahead on this suggestion will take leadership from the very top of all Governments around the world, yet that is the very thing that seems to be lacking in Britain at the moment.
Chris Leslie: It is a shame that the leadership we need—not just at the G20, but at the European level and elsewhere—on the financial transaction tax and in a number of other areas is lacking. The Chancellor of the Exchequer has not reported any progress on the financial activities tax, for example. Perhaps the Minister would care to tell us today what progress he has made with other Heads of Government and Finance Ministers on the financial activities tax.
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David Rutley: Might not the Government’s position have something to do with the fact that the International Monetary Fund does not endorse a financial transaction tax and that there is a stronger case for an activities tax? Should the hon. Gentleman not consider that more fully?
Chris Leslie: I know that the Government have such a close relationship with the IMF that they take their policy lead from it on almost every issue, but I am sure that they can think for themselves on this issue. Given that there was discussion at the G20 about exploring many of those things, I would have thought that the Government ought to keep the issue on the table and under review because it has potential, as most hon. Members seem to recognise.
Mr Umunna: I think the Minister was seeking to raise the IMF earlier, but the IMF has argued—I am sure that my hon. Friend knows this—that the Government should be looking to raise a lot more from the bank levy than they are currently.
Chris Leslie: Indeed, and there are ways the bank levy could be improved. It might be appropriate at this point to refer to the Government amendments 32 to 50, which are technical amendments. It would be useful if the Minister said whether the bank levy’s yield will be affected by those technical changes. Generally speaking, although the bank levy is a fine idea in theory, the way the Government are implementing it in practice is inadequate. It has been designed around a fixed yield of £2.5 billion to £2.6 billion, but when the Treasury originally published its design for the bank levy last June the banks complained that it would cost them £3.9 billion. The Chancellor listened to their complaints and, as a result, watered down his original plans. Indeed, he gave the banks a £20 billion tax-free allowance before they start paying the bank levy, thus bringing the yield back down to £2.5 billion to £2.6 billion.
Mr Geoffrey Robinson (Coventry North West) (Lab): Does my hon. Friend agree that the Government’s bank levy was watered down as part of an agreement in their Project Merlin to secure a wider arrangement for lending by the banks into the economy, which we desperately need? Merlin has turned out to be an absolute flop: the first quarter figures for private sector lending to small and medium-sized businesses show that they are £2 billion short already. What a deal!
Chris Leslie: It is difficult to see how the Government thought that that would be the moment of catharsis—the moment when everybody said, “Yes, aren’t the banks doing their just bit? They’re now completely free from their obligations to the taxpayer.” Project Merlin clearly did not achieve that. The Chancellor made some tweaks to the negotiations on the Project Merlin arrangements—he did so in February, on the day of Treasury questions—and he then tweaked the rate again in the March Budget, after criticisms of the big corporation tax cut that the banks will enjoy. However, the bank levy is set at a relatively low rate, especially when we look at what is happening in France, Hungary, Portugal or Austria. Indeed, we even read in today’s Financial Times about the quasi-bank levy arrangements pursued by the Dutch Government.
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picking up the bill for the crisis caused by the irresponsible actions that the banks pursued. That is why in May we called for the Government to review the bank levy and to publish a report of the analysis behind the rates that they had set and the thresholds that they had chosen. They refused to do that; however, as we have seen, they are now refusing even to review the possibility of repeating the bank bonus tax.
“bring forward detailed proposals for robust action to tackle unacceptable bonuses in the financial services sector; in developing these proposals, we will ensure they are effective in reducing risk.”
That is on page 9; it is one of the first things that the coalition put into its agreement. The Business Secretary recently described the bankers’ bonuses paid for this year as “offensive”, yet the Government could not even promote proper transparency on bonuses and remuneration, never mind taking action to ensure that they were fair and reasonable. The most that the Government could extract voluntarily from the banks was an agreement in Project Merlin to report anonymously on the total remuneration of the five highest-paid bank senior executives outside the board. The Government are not even forcing the banks to disclose all the bonuses over £1 million, which was a key recommendation of the Walker review. That would have been easy to implement, given that it was part of Labour’s own legislation. The provision is on the statute book, ready to be triggered.
The Government’s excuse for inaction is apparently that they are trying to get other countries to sign up to the transparency arrangements, but we have seen absolutely no evidence of any attempt to secure such an agreement. In a written parliamentary question in June, I asked the Minister
“what meetings he has had with his EU counterparts to discuss disclosure by banks of the number of employees paid salary and bonuses of more than £1 million per year.”
“Treasury Ministers and officials have meetings with a wide variety of organisations in the public and private sectors as part of the process of policy development and delivery.”—[Official Report, 15 June 2011; Vol. 529, c. 801W.]
My hon. Friends will be used to getting that kind of answer to written questions. We must therefore take it that there have been no meetings whatever with the Minister’s European counterparts to get agreement on transparency on bonuses—[ Interruption. ] If he has had such meetings, I would be delighted if he informed the House of the progress that has been made. It does not sound as though he has talked to a single one of his counterparts about this issue, however. Bonuses remain staggeringly high, and the Government must say why they are scared of transparency.
Bill Esterson: Does my hon. Friend remember hon. Members talking in Committee about the large-scale donations that bankers had made to the Conservative party? Has he had cause to reflect on whether that might be the reason for the Government being so reluctant to act on this matter?
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Chris Leslie: I cannot answer for the motivations of Ministers. It is difficult to know what motivates them. Is this a question of omissions? Is it incompetence? Is there some other devious motivation, or malice for those who might benefit from the proceeds of these revenues? We do not know, but we look forward to hearing the Minister’s justification for failing to get transparency and failing to repeat the bonus levy.
Recent figures suggest that some of the largest investment banks are actually increasing the slice of their revenues that they pay to their staff. The ratio between remuneration and revenues is known as the compensation ratio, and it is interesting to note from the detailed figures that even the Royal Bank of Scotland’s global banking and markets division paid 34% of its net revenues in remuneration in the first nine months of 2010, compared with just 27% of net revenues in the full year of 2009. The amount of compensation, in the form of salaries and bonuses, is therefore going up as a proportion of revenues. That was also the case for J. P. Morgan, which paid 39% of its net revenues in the first nine months of 2010, compared with 33% in the full year of 2009. Barclays paid 43% of its net revenues compared with 38% over the same periods. Compensations are strong and still growing.
Frank Dobson: Does my hon. Friend agree that the Orwellian use of the term “compensation” in relation to working for a bank suggests an effort to increase public sympathy for some of the greediest and most stupid business people this country has ever seen?
The bonuses that I have described are really excessive. For example, we know from the limited disclosures that we have seen that John Varley, the former chief executive of Barclays, received a £2.2 million bonus in 2010 and that, between them, the top five earners at Barclays, excluding executive directors, received more than £38 million in salary and bonuses in 2010 alone. That amount was shared between five individuals. Bob Diamond, the chief executive of Barclays, has received £6.5 million in bonuses for 2010 since January. As many will know, Mr Diamond lost out in the bonanza compared to his two senior managers at Barclays, with Tom Kalaris receiving a cool £10.9 million in salary and bonuses, and the other top manager, Rich Ricci—my hon. Friends might remember his name—receiving a cool £10.6 million. Those two individuals earned enough money—£17 million—in 2010 to pay the wages of more than 500 qualified nurses.
Alison McGovern: My hon. Friend is pointing out some of the excesses at the top of the financial services sector, but does he agree that it is also a matter of concern to those at the bottom end of the pay scales in the financial services sector to see such inequality in the organisations they work in, just as it is to workers in other sectors?
Indeed. That is precisely why the bonus payroll levy arrangements that we advocated excluded bonuses of up to £25,000 going to those working on the front line in the banks. We thought that those working
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at that level should not be affected by that particular payroll tax. What we are talking about now are senior executives. Stuart Gulliver, chief executive of HSBC, gained a £5.2 million bonus while Eric Daniels, the former chief executive of Lloyds, secured £1.45 million.
Mr Robinson: Does it occur to my hon. Friend, as it does to me from time to time, to ask what sort of activity these bankers engage in that can generate such enormous profits? Anybody who has worked in any competitive commercial sector in the UK, let alone the manufacturing sector, operating in the international economy, knows that those sorts of margins and returns cannot be generated in the real world. Are we heading back to the same sort of distortions that led to the previous crash?
Chris Leslie: There are serious issues about the balance of power between management and ownership. Many shareholders are also very exercised about excessive remuneration, compensation pay or call it what we will, and I believe that the balance of power needs addressing in the longer term. It is interesting to note how banks have tried to shift their remuneration approaches according to the political and tax arrangements of the day. While the Minister will no doubt tell us that bonus payouts for the City in 2010-11 were predicted to come down by 8% in comparison with 2009-10, what he will not tell us is that that apparent fall in bonuses was largely offset by a 7% increase in salaries for senior banking executives. The roundabout continues, but some people never lose out when it comes to this particular game.
Analysis of official earning figures by pay research specialists Income Data Services showed that large payouts in the financial sector during February and March this year helped to maintain payments during the 2011 bonus season at a similarly high level to that recorded in 2010. Not enough has changed; Ministers are not exercised or angry enough about this particular scandal, and action is necessary.
The fact is that banks are now more likely to pay discretionary bonuses, which would be captured by our proposed bonus tax, instead of paying the guaranteed bonuses that they used to get away with—the multi-year contractual bonuses that looked to the rest of us like salaries but that they called bonuses, which would not be caught. If the guaranteed bonuses become the exception and not the rule, as the Chancellor says, it might provide us with an opportunity to capture more of the discretionary bonuses through our bank bonus tax. As I said, we estimate the yield to be £2 billion.
We have to resolve the sense of anger felt by UK taxpayers towards the banking institutions that they had to bail out. The public are still rightly angry about the greed and irresponsibility of some of the senior executives at our largest banks and about the size of the bonuses. There is simmering anger out there still about the bonuses that continue to be paid when austerity is biting very hard for many of our constituents. Real and visible action is needed on bonuses, not secret voluntary arrangements behind closed doors between the big banks—as with Project Merlin, which the Chancellor pursued before. As my hon. Friend the Member for Coventry North West (Mr Robinson) described it, it was little more than a damp squib.
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The banks provide an important utility in our society. They are a key part of our economy, and a strong banking sector is in all our interests. However, by talking tough and acting weak the Government are fuelling public anger while doing little to address the issues. They should stop treating people like fools, and do far more to ensure that the banks and senor banking executives are paying back their fair share—a fair share that could generate money to repair some of the damage to jobs and the economy, and help tens of thousands of young people to secure a decent start in employment.
We are not asking very much. We just want a review of whether the bank levy could be augmented with a repeat of the bonus tax. We want the taxpayer to be given a fair deal in return for rescuing the banks, and we want the Government to take seriously the threat of a lost generation of young people struggling to find work. A fair tax on banker bonuses to help people off the dole and into work is the best way to get the deficit down and stop Britain’s talent going to waste.
John McDonnell (Hayes and Harlington) (Lab): Amendment 31, which stands in my name, proposes a report reviewing the possibility of incorporating a financial transaction tax within the Government’s proposed bank levy, which would also examine ways in which any funds raised through such a tax could be invested in tackling not just unemployment and poverty in this country, but deprivation in the developing world. Many will remember the financial transaction tax in its former life as the Tobin tax; last year it was relaunched as the Robin Hood tax, focusing largely on the campaign to tackle poverty in the developing world.
I can think of no better day on which to debate this issue, having seen the pictures shown on our television screens last night and today of the tragedy that is taking place in the horn of Africa. This morning, Radio 4 broadcast the story of a family—parents with one child—who had walked for miles to the aid station, only to find that the one-year-old child had died as a result of suffering the drought and famine. I also commend last night’s “Dispatches” programme, presented by Jon Snow, which identified the activities of Rachmanite landlords in west London. Some of those landlords operate in my constituency, and the matter has been raised in the Chamber in the past. It demonstrates the poverty that still exists in this country.
On a personal note, let me say that this morning I received letters from children at Cherry Lane primary school in my constituency as part of their campaign to encourage politicians to think about how we can fund education in the developing world so that children there can go to school. That is what my proposal is all about.
When the transaction tax was relaunched last year as the Robin Hood tax, it was supported by a wide range of churches and religious organisations. I will not name them all, but let me give Members a flavour of them. They included the Trades Union Congress, Crisis, Action Aid, Article 12 in Scotland, Barnardo’s, the Catholic Fund for Overseas Development, Christian Aid, Church Action on Poverty, Comic Relief, the Church of Scotland’s Church and Society Council, the Christian Socialist Movement, the Disability Alliance, the Ecumenical Council for Corporate Responsibility, EveryChild, Family Action, Faith2Share, Friends of the Earth, the General Assembly
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of Unitarian and Free Christian Churches, Greenpeace, Oxfam, Quaker Peace and Social Witness, Save the Children, Tearfund and the Salvation Army.
That was the largest alliance of civil society organisations that we have seen in generations campaigning on a single issue, and, as you know, Mr Speaker, they came here last month. Twelve hundred people came to Parliament, and met us in Central Hall over a cup of tea. The event was organised in particular by Oxfam, Action Aid, Save the Children, Tearfund, CAFOD and Christian Aid, and their message was simple: 1 billion people have no access to clean water and 2.5 billion lack basic sanitation, and it is time for change and action.
Those organisations pointed out that—as we have seen in the horn of Africa—the situation is dramatically worsening as a result of drought and famine. They raised three issues with us: the need to ensure that all Governments commit themselves to devoting 0.7% of gross national income to aid, the need to tackle tax evasion and avoidance, and—this was their key demand—the need for a Robin Hood transaction tax on banks. The amendment does not ask the Government to make an instant decision; it simply asks them to help us move the debate on. It is an attempt at a bipartisan—or whatever the correct term is as so many parties are represented in the Chamber—or consensual approach to enable us to move forward. I am not asking for its immediate adoption, although I would like that; rather, it specifically asks for a report to be prepared so that we can be convinced about the way forward both in principle and in respect of the practical arrangements, to ensure that whatever Government introduce this tax, it proves to be successful. It simply asks the Government to review and report.
There is now a sense of urgency, as the problems are escalating in the developing world. That is why I have set a six-month deadline for the report. It is not an unrealistic time scale given the work that has already been undertaken by the past and present Governments. It is not only our Government who are being lobbied about this matter; this is happening across the world, from New Zealand to New York.
Let me run through the proposal and what I would like the Government to examine and report upon. Most Members know the details following last month’s lobby. The proposal is for a small tax to be included in the bank levy. The sum proposed is 0.05%, which is 5p in every £1,000, which would be levied on financial transactions including in stocks, bonds, foreign currencies and derivatives. There are already some transaction taxes in place in this country, such as the stamp duty of 0.5%, but this proposed tax is nowhere near that level; it is a relatively trivial sum for an overall tax. However, it is estimated that if that trivial sum were introduced globally, it would raise £250 billion, and in the UK alone it would raise about £20 billion. It is argued that it could reduce speculation, and certainly some of the riskiest speculation that caused the last financial crisis.
The Robin Hood tax campaign lobbied us saying that it would like 50% of the income from this tax to be spent on fighting poverty in the UK, 25% to be spent on tackling poverty in developing countries and a further 25% to be spent on tackling climate change.
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Andrew Gwynne (Denton and Reddish) (Lab): My hon. Friend is setting out his case very well. In recent years, there has been an ever-speedier move towards the globalisation of our economies, and he is absolutely right that this assessment and review is needed in respect of our obligations to global society. My hon. Friend has set out that case perfectly. Does he agree that it is crucial that we do not overlook some of the global challenges in tackling poverty and climate change?
John McDonnell: Yes, and when the various groups lobbied us last month it was interesting to note how the debate had progressed since the original discussions about the Tobin tax. The debate had become much more refined and concretely related to the global needs that my hon. Friend mentioned. There has been a debate about how we allocate these resources and what the greatest priorities are, and so far it has been about poverty in this country so that we do not in any way undermine support for such taxation among people in the UK, but we must balance that with support for efforts in the developing world. The climate change issue has also come on to the agenda since the Tobin tax was first proposed.
One question that arose in the discussions in Central Hall was what the effect would be if we did raise, for example, £20 billion in this country. It was said that if we spent £4 billion, we could halve child poverty in this country overnight, and if we spent £5 billion, we could insulate every home and therefore take people out of fuel poverty. Such examples bring home the reality of what could be done through such a tax.
It is not a tax on normal retail banking or on savings or mortgages. It does not hit the ordinary saver. It is a micro-tax, and in some ways a tax on short-term speculation banking. It does not fall on UK banks alone either, as foreign banks operate in the City. I would take particular delight in taxing Goldman Sachs in this way—that is a personal grudge—but there are also other hedge funds operating in the City of London. A strong argument, which we have heard today, has been made for seeking international agreement. Negotiations are taking place and there is consensus, even within the European Parliament, on introducing a European-wide financial transaction tax. My concern about that is that the European discussions were about using that tax to fund the European Commission—I might have more than reservations about that proposal.
Nigel Adams (Selby and Ainsty) (Con): The idea of a Robin Hood tax is noble, but does the hon. Gentleman not agree that without international agreement across all countries, it is very unlikely to get off the ground?
John McDonnell: No. If that was the case, we would not have introduced a stamp tax on transactions. It brings in £5 billion and has been an incredibly successful tax. The concern has been expressed that this country would be disadvantaged if it acted unilaterally, but the International Monetary Fund’s study does not say that. It cites the stamp duty as an example of a transaction tax that has not affected UK business and states that financial transaction taxes
“do not automatically drive out financial activity to an unacceptable extent”.
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The argument that London’s advantages would evaporate overnight as a result of this sort of tax are just not accurate. The reason this country has these advantages, apart from the experience in dealing with financial transactions that we have built up over generations and centuries, is that it is time zone-critical—it is located between the Asian and New York markets—so it is ideally placed to ensure that financial operations are carried out in London. If companies were to move elsewhere in Europe, where would they go? Germany, our main competitor in the European time zone, is already committed, under Chancellor Merkel, to implementing a financial transaction tax.
The argument that is made now about needing some form of global international agreement is exactly the same one that was used to say that we should not introduce any form of taxation on bank bonuses. When we introduced the one-off tax on bonuses in 2010 we were told of fears that there would be a mass exodus of bankers leaving the country. In fact, the recruitment of bankers has increased—perhaps that is a debate for another day.
Alison McGovern: On the argument that my hon. Friend has just made about whether or not people would leave as a result of such a tax, does he agree that we should support what J. K. Rowling said in 2010 about people who might leave this country because of taxation? She said: