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House of Commons
Monday 25 June 2012
The House met at half-past Two o’clock
[Mr Speaker in the Chair]
Oral Answers to Questions
Work and Pensions
The Secretary of State was asked—
Employment and Support Allowance (Appeals)
The Minister of State, Department for Work and Pensions (Chris Grayling): The Department does not hold statistics specifically on destinations after appeals, but we carried out a detailed report, published earlier this year, on the destinations of people on jobseeker’s allowance, income support and ESA. Individuals found fit for work by the tribunal may claim jobseeker’s allowance. Jobcentre Plus will provide employment support, or the claimant can access support through the Work programme at a time that is right for them.
Natascha Engel: Our experience in Derbyshire is of people moving from the employment support allowance on to jobseeker’s allowance, and not into work. What is the Minister doing to move people off the employment support allowance and not on to another benefit, but into work?
Chris Grayling: Of course, the purpose of the Work programme is to provide specialist back-to-work support. Those moving off ESA have early access to the Work programme, and those still on it can volunteer for the programme at any time, if they are not mandated to it.
Mr Peter Lilley (Hitchin and Harpenden) (Con): Given that there are now 400,000 more jobs in the economy, the bulk of which have been taken by people who, by and large, are not eligible for benefits, because they are workers from abroad, might not loss of entitlement to benefit—for good cause—spur some people to get jobs and thus result in more jobs going to British people?
Chris Grayling: I absolutely agree with my right hon. Friend. I have made it clear that I would like employers in this country to offer opportunities to local workers, but those workers need to be there—they need to be keen, energetic and wanting that work. I hope and expect that our Work programme providers will provide that energisation.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op): The Minister will know that, as well as the people looking for work following a refusal of appeal, many people win their appeal. Having won an appeal, however, they then have another work capability assessment, but the information that led to their appeal being won is not made available to the people undertaking the second WCA. Will he look at this situation in order to prevent people from going through a cycle of assessment, followed by appeal, followed by assessment?
The hon. Gentleman will know that the system set up by the previous Labour Government set a prognosis time for an individual—an estimate of how long before they could return to work. It is that, rather than anything else, which guides the timetable for repeat assessments. I have taken steps to stretch that
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timetable post-appeal, but I do not want to leave people stranded on benefits for the rest of their lives if we can possibly help them find employment.
Mr David Ruffley (Bury St Edmunds) (Con): The Minister will be aware of the 1996 personal responsibility Act, passed by President Clinton, which limited an individual’s entitlement to out-of-work benefits to a period of five years over their lifetime, and which, according to American research, cut the welfare roll by 60%. Will he follow that model?
Chris Grayling: I studied that model carefully. One reason why we have adopted various programmes requiring people to undertake full-time work is to create a sense of urgency for them in finding employment. I am not convinced, however, that government is good enough at managing data to manage, for long periods—many decades—at a time, the kind of systems set up in the United States.
Stephen Timms (East Ham) (Lab): The Minister did not provide the data that my hon. Friend the Member for North East Derbyshire (Natascha Engel) asked for. He holds the parliamentary record for the abuse of statistics, having been rebuked for three separate offences by the UK Statistics Authority. Will he now sort out the shambles in his Department, do what he promised in January and lift the Work programme data ban?
Chris Grayling: The right hon. Gentleman does talk a lot of nonsense sometimes. First, he cannot add up—I have not been rebuked three times by the Statistics Authority. Secondly, the Work programme is progressing well, and I will publish further data on it soon.
Stephen Timms: Until today, the Government have told us that benefit reform plus the Work programme would sort out the welfare system, but this morning the Prime Minister said that they will not be enough. Will Ministers now sort out this chaos? Would not lifting the ban on data be a good place to start?
The Minister of State, Department for Work and Pensions (Steve Webb): The Chancellor confirmed in Budget 2012 that the Government will introduce a simpler, single-tier pension for future pensioners set above the basic level of the means test to better support saving for retirement—and I am pleased to say that the Prime Minister has reiterated that commitment today.
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new pensioners? If that is the case, is it possible to explain it in plain and straightforward language so that everyone can understand it?
Steve Webb: I am grateful to my hon. Friend. We need to explain what are often very complex matters in simple language. The simple truth is that today’s pensioners have got the best deal in a generation through the restoration of the earnings link, which will be real cash in their pockets year after year, and that the new system will cost no more than was going to be spent in any case. We are taking a planned budget, simplifying the system, but not treating anyone adversely.
Peter Aldous: I am grateful to the Minister for that answer, but there is real anxiety among current pensioners that with the introduction of the single-tier pension they will become second-class citizens. Will he give an assurance and take that point on board?
Steve Webb: I do appreciate that point. It is often not well understood that pensioners coming down the track—tomorrow’s pensioners—are due to receive substantially higher pensions on average without our reform because the state system has been maturing. Our reforms are not doing that—it is in the system anyway—but our reforms do take the money and simplify so that today’s workers have a simpler system into which to retire.
Mr Frank Field (Birkenhead) (Lab): Will the Minister give an undertaking that those coming down the track—[Interruption.] I am already there; I am one of those pensioners being discriminated against. Will he give an undertaking that those who would be entitled to a higher pension than his flat-rate pension would provide will get the entitlement that they have paid for and not his lower flat-rate pension?
Steve Webb: I can reassure the right hon. Gentleman that the next generation of pensioners will be well looked after and specifically that the starting point for our calculation will be what people have in the bank—that is to say, rights already accrued—and specifically, therefore, if people are heading for a pension of more than £140 at the point we change it and have got that in the bank, it will be respected.
Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab): We are hearing from all sides today concern and anxiety about the move to a flat-rate, single-tier state pension. In order to end that anxiety and to answer these questions, will the Minister confirm that a White Paper will be published on this reform? Will he tell us when it will appear?
Work Capability Test (Cancer)
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The Minister of State, Department for Work and Pensions (Chris Grayling): We are committed to supporting people who are diagnosed with cancer in the most sensitive, fair and appropriate way. We are currently analysing responses from our informal consultation on the effects of cancer treatment and will publish a consultation response later in the summer. However, we have already put in place changes that have increased the range of cancer patients who receive ongoing unconditional support.
Helen Goodman: My constituent was treated for breast cancer in July 2010. She was deemed fit for work by Atos before the post-op results were received. The tribunal found in her favour and awarded her employment and support allowance in January 2012. However, her ESA entitlement was stopped in April because of the introduction of the Government’s 365 day rule. She was reassessed in May 2012 and found fit for work again. Her employer has held her job open but cannot re-employ her until she is deemed fit for work by her doctor. This is obviously extremely bad for her health. Will the Minister agree to meet me about this case?
Chris Grayling: It is obviously very difficult to talk about an individual case, and I am afraid that I make it a matter of policy that Ministers do not become involved in individual cases. What I would say is that it is extremely important that we provide support for all cancer sufferers who can potentially return to work to do so at the earliest opportunity. That is much better for them than being stuck at home on benefits.
Andrew Bridgen (North West Leicestershire) (Con): As a result of the Government’s review, will the Minister confirm that there is now much better understanding of cancer treatments, and that many people undergoing oral chemotherapy, for example, will now be placed automatically in a support group, which did not happen previously?
Chris Grayling: It is absolutely our intention to include for the first time people going through oral chemotherapy in the support group. The actual detail will be resolved in the review that is being carried out at the moment. We shall publish the outcome later in the summer. I stress again that this Government have broadened the range of cancer patients in the support group who receive long-term unconditional support until they are potentially able to make a return to work.
The Minister of State, Department for Work and Pensions (Chris Grayling): I have regular meetings with the Minister for Further Education, Skills and Lifelong Learning, my hon. Friend the Member for South Holland and The Deepings (Mr Hayes), at the Department for Business, Innovation and Skills to discuss provision for the unemployed. We believe that we have forged a closer partnership between the two Departments than has existed in the past. We want to ensure that all unemployed people who have a skills gap receive the support that they need in order to fill that gap and return to work.
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Mary Macleod: Starting new businesses could generate real growth for the UK economy and create more jobs. I recently held a seminar in Hounslow on entrepreneurship for women to encourage them to accept the start-up challenge. What is my right hon. Friend doing to encourage jobseekers to become entrepreneurs, and to help them acquire the skills that will enable them to succeed?
Chris Grayling: I pay tribute to my hon. Friend for the work that she has done, not only in holding the seminar but in organising an extremely successful jobs fair to help her unemployed constituents to find work. I believe that, through the launch of the new enterprise allowance, we have created a mechanism that will allow unemployed women in particular, and also unemployed older workers, to move into self-employment. They have a wealth of experience to bring to it, and I hope that the allowance will create a bridge, supported by mentoring, to enable them to do so.
Mr David Hanson (Delyn) (Lab): Training and benefit levels are inexorably linked by the Government. This morning the Prime Minister said that regional variations in benefit rates would affect areas such as mine in Wales, the north of England and Scotland much more than areas elsewhere. Will the Minister tell us whether he supports that, and whether it is supported by his hon. Friend the Pensions Minister?
Chris Grayling: I congratulate Opposition Front Benchers: this is one area in which they have made a major contribution to the debate. It was the Labour party that began the argument about the regionalisation of benefits. It was entirely sensible for the Prime Minister to take up that challenge, and we should have a proper national debate about whether this is the right approach for the future.
Stephen Lloyd (Eastbourne) (LD): I welcome what the Minister has said about training. Does he agree, irrespective of certain quite loud noises off that have been heard recently, that the coalition is making the fundamental changes that will ensure that work always pays in future? That is a policy that I heartily endorse.
Chris Grayling: My hon. Friend is absolutely right. The universal credit, which my right hon. Friend the Secretary of State is pioneering and which will be launched next year, will make a huge difference. As for the skills agenda, one of the coalition’s other achievements is the big expansion of apprenticeships. That is making a real difference to the prospects of unemployed people, particularly young unemployed people, giving them a chance to build up skills that can lead to a lasting career.
Kerry McCarthy (Bristol East) (Lab): The recent scandal involving the unpaid jubilee steward has exposed the fact that some companies out there, under the guise of offering training to Work programme participants, are exploiting them as cheap or unpaid labour. What checks does the Minister carry out on companies that use Work programme participants?
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fact, as part of a training and development programme, a group of volunteers were participating in a national experience that would build skills which could take them into other employment. I think that the hon. Lady should welcome that and not criticise it.
Karen Bradley (Staffordshire Moorlands) (Con): What support is available to 16 and 17-year-olds who are released from young offender institutions such as the one in Werrington, in my constituency, to ensure that they receive the training that they need so that they can get back on the right track?
Chris Grayling: That is an important issue. One of the challenges that we face is that 16 and 17-year-olds are often not on benefits. Together with the Department for Education, we are introducing a new programme, which will begin in autumn and will be funded by Payment by Results, to engage, support and develop the skills of that particular cohort of young people. We cannot abandon them, as has happened far too often in the past.
Benefit Claimants (Medical Assessments)
The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller): We asked Professor Harrington to carry out a series of reviews of the work capability assessment, and have implemented the recommendations of his first review. We are continuing to work closely with him, and are ensuring that lessons learnt from the assessment are built into the design of the new personal independence payment.
Maria Miller: As the hon. Gentleman will know, there were problems with the system that we inherited. It was a harsh system, which we have been working hard to make work better, and I hope he will join us in supporting Professor Harrington’s work in this area, which is leaving us with a work capability assessment that better serves the people of this country.
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The Secretary of State for Work and Pensions (Mr Iain Duncan Smith): Early analysis shows that approximately half of participants are off benefit within 21 weeks of starting a work experience placement. I am delighted that, despite a campaign run by anarchists and members of the Labour party, just like hon. Gentlemen on the Benches opposite me, to try to blight the chances of these young people, employers continue to come forward to join this excellent scheme. Young people have overwhelmingly shown that they want this valuable experience by continuing to volunteer to do their part.
Mr Duncan Smith: It compares very favourably. First, it is better. Secondly, it costs a lot less. Labour paid huge sums of money up front, whereas we pay the jobseeker’s allowance. The key point is that not once has any Opposition Front-Bench Member got up to defend this work experience programme, which many of their colleagues attack and try to destroy.
Stephen Metcalfe: Will my right hon. Friend remind us how long a young person can stay on the work experience scheme before they lose their benefit, and how that compares with the situation under the previous Government?
Mr Duncan Smith: This is the interesting bit, because the previous Government legislated for work experience before they left office and now attack it, but they allowed people only two weeks, which was not enough time for them to get the experience they needed. We have given people two months, and a third month if the employer offers them either an apprenticeship or a job.
Eric Ollerenshaw: Does the Secretary of State agree that, much like work experience for students in education, work experience for the unemployed plays a vital role in their securing the right habits in order to secure full-time employment eventually?
Mr Duncan Smith: Yes, and one interesting fact is that although the ex-Deputy Prime Minister, Lord Prescott, attacked the scheme that had some difficulties in relation to young people learning and training, it turns out that the vast majority of them wanted to do it. Moreover, they got an experience that has allowed them to go after jobs at the Olympic park paying over £9 an hour, which they would not have had an opportunity to do if the Opposition had had their way.
Jackie Doyle-Price: Clearly, young people in particular will benefit from being able to acquire and demonstrate skills that are of value in the workplace. Does my right hon. Friend agree that we should be doing everything we can to encourage employers to give similar placements?
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Mr Duncan Smith: I agree with my hon. Friend. One of the big problems we had was that some people, including the Labour party and those anarchists, have tried to stop those companies from doing that. I sometimes get confused as to who the anarchists are and who the Labour party members are when I look at the Opposition line-up, but the reality is that this is good for the young people who do it; it is good in terms of their experience; and they actually ask for it in the first place.
Angie Bray: When travelling around my constituency, I have been very struck by how enthusiastic young people are to get work experience. Does my right hon. Friend agree that, despite what the cynics say, young people are very keen to get work experience because they know that it helps prepare them for a real job?
Mr Barry Sheerman (Huddersfield) (Lab/Co-op): It is very difficult for Opposition Members to get a word in on this one. Is not the Secretary of State being rather silly, because most people know that if the work experience is of high quality and does not displace other people’s jobs, we are all in favour of it? Is it not about time that all of us on both sides of the House made sure that we had decent schemes for young people, which are of high quality and lead to jobs?
Mr Duncan Smith: I respect the hon. Gentleman and I am grateful for those comments; I wish that everybody else on his side of the House approached this issue with the same attitude. Work experience has resulted in about half those going on to it getting off the benefits roll. They want to do it—this is really important—and what they are getting from it is experience they cannot otherwise get. Employers say to people time and again, “We can’t employ you because you don’t have experience,” yet they could not get that experience. Surely this has got to be a good thing for them and a good thing for all of us.
Kate Green (Stretford and Urmston) (Lab): I, too, support good quality work experience that genuinely enhances employability, but as the Secretary of State seeks to roll out this initiative, what steps are his Department taking to ensure that high quality is maintained and that such work experience does not become a way for employers to churn cheap labour at the bottom?
Mr Duncan Smith: Of course, the hon. Lady is absolutely right, and the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling), is absolutely focusing on this issue with Jobcentre Plus. If we hear of any programmes that are not in that category, we will not allow young people to go on them. However, the key thing to bear in mind here is that this gives young people a real chance to get something they can sell to an employer. We should all back that, and I wish that more people were like the hon. Members who have just spoken.
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by talking about figures that he has been punting for several months now. Has he carried out any further assessment since the pilot project that produced those figures, which is nearly a year old now, given that the only other published assessment, of mandatory work experience, suggested that it did not work?
Ms Gisela Stuart (Birmingham, Edgbaston) (Lab): The Secretary of State may be interested to hear that Birmingham Labour went into the local election campaign promising work experience, so it is wrong to say that the Opposition are against it. However, the purpose of all this is to get people into work, and that requires a skills base. Has he assessed how much of the extra training of some people within companies is merely replacing what they are already doing, and how much is genuinely new commitment by companies to the training of young people?
Mr Duncan Smith: We believe that the programmes brought forward to us, and which these young people are volunteering for, constitute genuine experience that they will gain and that the companies were not necessarily providing before. Of course, I fully accept that we want to ensure that those are high quality, and I congratulate the hon. Lady, not for the first time, on genuinely looking at this issue from the point of view of the problem and how we solve it. I wish there were more people doing that, but the trouble is that Opposition Front Benchers absolutely do not attack those who spend their time trying to destroy the work experience programme.
Ian Austin (Dudley North) (Lab): We introduced mandatory work experience under the flexible new deal and we support, as we have heard from a number of my hon. Friends, proper work experience that leads to jobs. However, why did the Secretary of State scrap our scheme and instead pour millions into a mandatory work activity scheme that his own Department says has no impact? Should he not sort out this shambles before announcing his next set of half-baked changes?
Mr Duncan Smith: I see that the Opposition have discovered one word that they can now all say because it is not too long for them: shambles. The only shambles that we see is what is going on on their Front Bench. The reality is that we did not persist with the two-week work experience programme because all the young people told us that it did not work—they needed more time. That is what you do: when you hear the truth from people who need your support, you act on it, like we did, and give them that extra time.
Social Security (European Commission)
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The Minister of State, Department for Work and Pensions (Chris Grayling): I continue to have concerns about the efforts of the European Commission to increase its influence over the social security policies adopted by national Governments. I am working closely with European colleagues to resist encroachment on our national welfare systems, and last week met with some of them to discuss this. I am determined that social security should remain a national matter, and will continue to resist efforts by the EU to interfere.
Richard Graham: I am very grateful to the Minister, who has almost answered my question. Does he share my view that social security policy should be left entirely to member states, and what does he believe that we can do in practice to ensure that that is the case?
Chris Grayling: I think that it has to be overwhelming pressure from member states. The Austrians, for example, are now facing a case in the European Court that would have a similar impact on them as the court cases we are facing in this country. I increasingly find that other member states are recognising that this is a problem. The best way for us to deal with it quickly is to work together to get the Commission to rethink policy totally on this front and to do what member states believe is right.
Neil Parish: My experience, Minister, of the European Commission is that it always wants to seek more powers, so I welcome your answer but I think you need to redouble your efforts to make sure that we do not hand over social security policy to the Commission.
Chris Grayling: I am absolutely clear that we have to get the Commission to change. It is, after all, part of a collection of member states, all of which believe that the current direction of travel is wrong. We have to win battles in the Commission, the Parliament and the European Court. I will not hesitate to take legal action in the European Court wherever we have grounds for arguing that the Commission is acting against the terms of the Lisbon treaty and its predecessors.
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businesses, including bids that are social enterprise models. I, and DWP officials, have met social enterprise organisations, and I have also announced that funding of up to £10,000 is available to support employee-led proposals, including social enterprises. That money can be used for expert advice and support, including legal and accountancy support.
Ian Lavery: Many social enterprises feel as though they have been totally excluded from the consultation at Remploy. The consultation period has been an utter shambles; it has been chaos and confusion from day one. As a result, will the Minister consider restarting the consultation period in the best interests of the disabled people at Remploy?
Maria Miller: The hon. Gentleman and I have a shared objective of wanting to make sure that we work together with people affected by these announcements, and I do not think he would want to create any situation where we had to continue with this period of uncertainty for any longer than we already have. He is wrong to say that we should rerun this consultation; it is going forward in the way that it should. We have received 65 expressions of interest for Remploy businesses, and I am looking forward to working with those individuals and those organisations to see how many of those bids we can take forward.
Maria Miller: The process that we have been undertaking involves all the individuals affected by the announcements that we have made. I have made it plain to the Remploy board that communication through this period of 90 days is very important; we have put a great deal of emphasis on that. Under the previous Administration, 29 factories were closed and none of them was taken forward outside Government control, whereas we are working hard and we have received 65 expressions of interest for Remploy businesses to move outside Government control. The House should welcome that.
Paul Maynard (Blackpool North and Cleveleys) (Con): Does the Minister recall that the Sayce review stated clearly that there was “total consensus” among disabled charities and organisations that Remploy factories were
“not a model for the 21st century”?
Maria Miller: I have to applaud my hon. Friend for saying things that Labour Members sometimes do not agree with. He is very courageous in that. The Government have set out their commitment to equality. It would not be right for us to see an increase in the amount of money being spent on segregated employment if we have equality at the centre of our thoughts—and we do.
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The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller): It is unacceptable that only 50% of children in separated families benefit from an effective child maintenance arrangement. That is why we are fundamentally reforming the child maintenance system, and it is also why we recently launched our consultation on shared parenting.
Charlie Elphicke: To turn to the issue of contact, does the Minister agree that it is a fundamental right of every child to know and have a relationship with both parents, and that parents who stand in the way of that right are abusing the rights of their children?
Maria Miller: I pay tribute to my hon. Friend for the work he has done in this area and for his private Member’s Bill. He is absolutely right that all the evidence shows that children who maintain contact with both parents have a much better outlook on life. We are considering not only shared parenting in our consultation, but how we can help more families to work together on child maintenance outside the statutory system in a way that will help them work together on all the issues around a child’s life.
Catherine McKinnell (Newcastle upon Tyne North) (Lab): Does the Minister think that making it more difficult and more expensive for parents to access their maintenance payments will make life easier or more difficult for children of separated parents?
Maria Miller: The hon. Lady will know that today we have announced a £15 million scheme to put in place the sort of support that I know she would want for separated parents, so that they can work together more effectively. I do not agree with her that our proposals will do anything other than make life better for children in separated families by ensuring that more money is flowing to them, whether that is inside the statutory system or outside it.
Tessa Munt (Wells) (LD): To return to the point made by my hon. Friend the Member for Dover (Charlie Elphicke), does the Minister agree that it is essential that children automatically have access to both their parents, and that should not be the case only when it is proven to be unsafe? Up until now, the Government’s wording has been that it should happen when it is safe, but it should be only when it is unsafe that it should not.
Maria Miller: My hon. Friend is absolutely right. There should be a presumption of a meaningful relationship with both parents post-separation, and the proposals we are working on for child maintenance will underline that by helping parents to realise that it is their responsibility to work together to support their children, whether they are in a relationship together or whether they are living apart.
“to help them through the painful process of separation.”
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Maria Miller: My hon. Friend is potentially selling short our announcement today. Indeed, working with all the leading charitable and third sector organisations in the sector, we are looking for new ways to ensure that we have the appropriate support in place for families, whether through telephony, local face-to-face support or a web application. Perhaps Mrs Bone might like to take a look at that and give me her views, too.
Work Capability Assessments (Appeal Tribunals)
The Minister of State, Department for Work and Pensions (Chris Grayling): At 31 December 2011, the latest date for which data have been published, 63,500 appeals were outstanding in which the work capability assessment was a factor, down from 84,100 in October 2010. There are always a number of live appeals at the various stages of processing before being listed for a tribunal hearing.
Pamela Nash: The fact that 63,500 people are in limbo is a disgrace, and waiting for appeal results is damaging people’s health, particularly those who have mental health problems. What is the Minister doing to try to rectify the situation, and when can we expect waiting times for appeals to be at a reasonable level?
Chris Grayling: I think that the hon. Lady has misunderstood the situation. There will always be people who are waiting for appeals. If they put in an appeal submission today, they will not have a tribunal hearing this afternoon. There is always a gap to allow everyone involved to prepare for the hearing itself. We are doing everything we can to reduce the backlog of appeals, as we inherited a massive backlog two years ago from the previous Government. The figures I have just set out show that we have succeeded in reducing that. We have reduced it as far as possible, but there will always be people in the pipeline waiting for appeals, because they simply do not happen on the same day as the application goes in.
Mrs Moon: My constituent, Mrs W, was placed in a work capability assessment group on 7 April. She appealed and waited until September when she was successful, like 40% of those who appeal. Shortly afterwards, she was recalled for a further assessment. Will the Minister consider giving work capability assessments tribunals the ability not just to assess the rightness of decisions at the time they are made but to decide when the assessments need to be made, cutting the number of people in the revolving door, waiting for appeals?
The hon. Lady will know that when the present system was set up by the previous Government, they built in a system of prognosis times, which set a rough estimate of the next time an assessment should be held. As I said, I have now taken steps to lengthen
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that period when somebody has been through an appeal, but she should be under no illusion: the system she talks about is the one set up by her own party.
Duncan Hames (Chippenham) (LD): The Minister should know that, at the end of last year, more than twice as many people as the Courts and Tribunals Service’s target figure were having to wait more than six months for appeals, at a cost to the Ministry of Justice of more than £40 million in the first year of this Government. When the tendering process for assessments for personal independence payments begins, will he seek options to ensure that any contractor that partners with the Government takes its share of the risk and of meeting the costs of decisions that are overturned on appeal?
Chris Grayling: The decision-making process lies within Jobcentre Plus and the decision makers work to a template established by the Department for Work and Pensions, but the reality is that under the Human Rights Act 1998, passed by the previous Government, the courts have decided that everyone has a right to appeal, and if people do not like the decision made, whether it is right or wrong, a large number will choose to appeal. We will do everything we can to get the decisions right, but we will not be able to stop people appealing.
Unemployment and Housing Benefit Costs
21. Mr William Bain (Glasgow North East) (Lab): If he will estimate the likely change in unemployment and housing benefit costs in 2015 compared with estimates made in the 2010 autumn statement. 
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith): In 2015-16, we expect to spend around £220 billion on benefits and personal tax credits. That includes an estimate of spending on jobseeker's allowance and housing benefit which, taking account of the latest assumptions from the Office for Budget Responsibility, is around £1.4 billion higher than was expected in 2010.
Mr Bain: Is not the truth that just one in eight of housing benefit recipients are unemployed and that 93% of new claimants are in households struggling in low-paid work, with falling real wages but paying soaring rents to largely private sector landlords? Instead of forcing 380,000 young people under 25 back in with their parents or onto the streets, should not the Government be dealing with surging rent rises, building social housing and introducing a proper living wage, to deal with the biggest squeeze on living standards for 90 years?
Mr Duncan Smith: Can I remind the hon. Gentleman which Government introduced the local housing allowance, as a direct result of which rents rocketed? As for our changes to housing benefit, the latest report, published about a week ago, shows that only about 1% of those affected have to move; a third have now said that they will seek work, which is a positive effect; and something near a half have not seen any rent rises or negotiated them downwards, so rents have been falling.
Philip Davies (Shipley) (Con):
I congratulate my right hon. Friend on introducing the benefits cap. Can he give more details of what has happened since housing benefit was capped? Also, in the light of the Prime
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Minister’s speech today, will he commit the Government to consider reducing the benefits cap from £26,000, which my constituents think is still far too high?
Mr Duncan Smith: I shall certainly relay my hon. Friend’s views to the Prime Minister as part of the overall review. When we made the changes to housing benefit, we were attacked by the Opposition for “social cleansing” and all those dangerous things we were supposed to be dealing in—[Interruption.] No, no, by the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) and his team. On the one hand, his team accuse us of social cleansing; on the other, he accused me the other day of not cutting deep enough on housing benefit. The only shambles here is their position on housing benefit.
Jack Dromey (Birmingham, Erdington) (Lab): A million young people are out of work. Now, the Prime Minister wants to deny housing benefit to under-25s, pushing thousands into becoming homeless and punishing workers on low pay or in an apprenticeship who need housing benefit to keep a roof over their head. Does the Secretary of State agree with the chief executive of the YMCA, who says it is
“difficult…to think in our 168-year history of a proposal more detrimental and having a negative impact”,
Mr Duncan Smith: We are doing all those things. The housing benefit changes are necessary to bring back under control a budget that was spiralling under the Government the hon. Gentleman supported. In almost 10 years, we saw that budget rise from about £11 billion to £21 billion. That was madness, and it was their lack of control and their creation of the local housing allowance that led to that problem, so we will take no lectures from him or his hon. Friends about what is right or wrong in relation to housing benefit.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op): How many young people under 25 does the Secretary of State think will lose their jobs as a result of the measures that his Prime Minister is proposing?
Mr Duncan Smith: I am not aware that any would lose their jobs. I am aware that, as I said to my hon. Friend the Member for Shipley (Philip Davies), the housing benefit changes that we have introduced are already leading to a large number of those who were not in work now seeking work. That is the difference between us and the Opposition—we believe that these changes should be about helping people to become independent; they think welfare is about making people dependent on them.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith):
Today I am announcing the Department’s plans better to support jobseekers allowance claimants who are members of Her Majesty’s reserve forces. We
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plan to amend the JSA regulations with effect from next month so that claimants who are in the military reserve can attend their required 15-day annual training camp without having to terminate their claim. This will mean that Jobcentre Plus can actively encourage claimants to join the Territorial Army without facing unnecessary and burdensome administration difficulties.
Mr Jones: I thank my right hon. Friend. In Nuneaton and the north of Warwickshire, unemployment has decreased since the last general election. Not being complacent, my hon. Friend the Member for North Warwickshire (Dan Byles) and I are running a jobs fair this Thursday, where a number of local and regional companies will be offering 220 jobs and 50 apprenticeship placements. Will my right hon. Friend welcome this and give a message of support and encouragement both to those companies and to the people in our constituencies looking for work?
The Minister of State, Department for Work and Pensions (Chris Grayling): I am very much aware of the event being held by my hon. Friend and his colleague. This is another great initiative by Members on the Government Benches. There have been a number of extremely successful jobs fairs. This one is poised to be another, with really good jobs on offer to unemployed people. I commend my hon. Friend enormously. I am grateful to all the organisations taking part. It is a credit to the community in his area that they are coming together to help the unemployed.
Mr Byrne: That is very interesting. The Minister with responsibility for unemployment told the House that all out-of-work benefits were supposed to be treated as universal credit applications from October 2013. The DWP newsletter from last month says that that now will not happen until mid-2014—nine months late. The project is supposed to cost £2 billion, but answers to my right hon. Friend the Member for East Ham (Stephen Timms) say that it is £100 million over budget. Universal credit is not on time and it is not on budget, and the Secretary of State does not know what is going on in his own Department, so is it any surprise that the Prime Minister had to announce another revolution in welfare reform this morning? The last one appears to be collapsing into chaos.
Mr Duncan Smith: Universal credit is on time and on budget. This is so typical of the right hon. Gentleman. He knows that universal credit is a programme that will be introduced over four years. He needs to go and check his figures again. There is something rather pathetic about the way he pauses on little figures and seems to think that that spells something. Universal credit will do more to get people back to work and it will rectify the mess that the previous Government left. It is on time and it is on budget.
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Chris Grayling: I am pleased to say that there are 80,000 fewer people on out-of-work benefits today than there were at the time of the general election. It is worth the Opposition noting that as regards youth unemployment, when we take into account all the policy changes that have taken place, and if we strip out the ways in which the previous Government hid people and kept them off the unemployment register, youth unemployment is down as well.
T3.  Nick Smith (Blaenau Gwent) (Lab): A constituent has contacted me about a Work programme placement that is both unsupervised and offers no training. Is not the Minister worried that Work programme providers, such as A4e, deem that satisfactory?
Chris Grayling: If the Work programme providers do not deliver the right support, they will not be successful and they will not be paid. That is the joy of the system that we have put in place. The previous Government put hundreds and hundreds of millions of pounds up front into the pockets of providers. We make the providers put their own money up front in a commitment to deliver support to the long-term unemployed, get them into work and help them stay there.
T9.  Charlie Elphicke (Dover) (Con): Does the Minister agree that pensions tax and pensions means-testing help destroy our pensions system? What are the Government doing to ensure that it always pays to save for a pension?
The Minister of State, Department for Work and Pensions (Steve Webb): My hon. Friend is right that at the moment there is a concern that if people save small amounts of money, all they do is deprive themselves of means-tested benefits. That is why our state pension reform is absolutely essential to ensure that when people do save they are better off as a result, and we look forward to that being a firm foundation for auto-enrolment when it starts later this year.
T4.  Mr Dave Watts (St Helens North) (Lab): Is not the problem with the Government’s benefit to work programme the fact that due to economic policies and failures there are no jobs for people to go to? For every five vacancies, there are so many people chasing them that there is no chance of them getting work. When will the Government do something about growth so that people can get back into jobs?
Chris Grayling: We are working extremely hard to support our economy and to support businesses to encourage them to grow and develop. We have had some very good news in the past few weeks at Ellesmere Port, with Jaguar Land Rover, and in the north-east with the investments in Redcar. Those developments are all good news for jobs. Since the election, there are 400,000 more people in work in this country. Our challenge is to ensure that we get young British unemployed people into those jobs and that we have fewer people coming from overseas and getting them.
Nick de Bois (Enfield North) (Con):
May I press the Minister on the answer he gave earlier to my hon. Friend the Member for Southend West (Mr Amess)? Notwithstanding the difficulties of those facing youth
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unemployment, can he confirm that the youth unemployment figure today is lower than it was under the last Government?
Chris Grayling: When we take into account all the policy changes, I can indeed confirm that. The Opposition keep saying that long-term youth unemployment has gone up under this Government, but the previous Government hid the true picture of youth unemployment by moving people on to a training allowance. They did not then show up in the figures and that masked the true picture. We are being open and honest and telling the truth about the challenges that we face.
T6.  Huw Irranca-Davies (Ogmore) (Lab): As Member of Parliament for Ogmore, I have a direct and democratic interest in knowing how many of my constituents who are ex-incapacity benefit and are now on jobseeker’s allowance have been referred to the Work programme. Has the Minister now lifted the ban on disclosure of that information, as he promised in January, and if not, why not?
Chris Grayling: We have already published the referral numbers to the Work programme and we continue to publish estimates of the number of referrals to the Work programme. Every single person on employment and support allowance has access to the Work programme today, and every single person who moves from employment and support allowance to jobseeker’s allowance has access to the Work programme within three months.
Mr David Ward (Bradford East) (LD): While we must all welcome the public acclaim given to the Olympians taking part in the Paralympics, does the Minister agree that those with learning difficulties who have their own special Olympics are seldom given the same level of acknowledgement for their skills and abilities?
The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller): My hon. Friend is right to raise this issue. However, the Paralympics will give this country a once-in-a-lifetime opportunity for us to showcase the talents of disabled people. I recently had the privilege of speaking to Channel 4 about how it will be covering this event and to meet some of the six disabled people who are now trained commentators who will be showcasing this amazing event.
T8.  Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op): Perhaps my earlier question was not clear, because I did not get a clear answer from the Minister, so I wonder if he could answer my question this time. With the number of people who go through a process of work capability assessment, followed by appeal, followed by assessment again, will he undertake to ensure that the information on which tribunals decide that people are not fit for work is made available to those making the decisions for the following work capability assessment, so that people do not get caught in that cycle?
Chris Grayling: Yes, I get what the hon. Gentleman is talking about. We are currently working with the tribunals service to get written decisions passed back to Jobcentre Plus for decision makers. That will be introduced within the next month.
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Steve Brine (Winchester) (Con): Having had a very useful meeting with Winchester Mencap on Friday, may I tell the Minister that it is particularly concerned that some of the flexibility of incapacity benefit should be built into employment and support allowance, as in the experience of many people with a learning disability, any paid work offered often peters out after only a few months?
Chris Grayling: These are issues that we are very sensitive to. We do everything we can to ensure that the support we provide to people with different forms of challenge and disabilities, through the Work programme and work choice, delivers the best possible and most tailored support. We will always engage with the charities involved and discuss how we can enhance the support we provide.
Alison Seabeck (Plymouth, Moor View) (Lab): The food bank in Plymouth has seen the number of people using it increase by 700 since April. It has clear evidence that the reason for this is the problem in the transition from contribution-based to income-based benefits, which in some cases lasts between four and eight weeks. Families are being left without money and are having to resort to the food bank, or in some cases, the skips behind supermarkets. What is the Secretary of State doing in his Department to ensure that that gap is reduced significantly?
Mr Duncan Smith: I accept the hon. Lady’s point and will look at the situation carefully to ensure that that does not happen. I will say that when we came into office food banks were not allowed to put their literature in jobcentres; the previous Government did not allow that and did not want them anywhere near jobcentres. We have since allowed them to put their literature in jobcentres. Jobcentre advisers are also telling people about that, so some of that expansion is due to the fact that people did not even know about this before we told them about it, which I think is fairly reasonable.
David Mowat (Warrington South) (Con): Given the increasing evidence of market failure in the private pensions system and the Financial Services Authority’s recent estimate that between 30 % and 50% of private pension pots now go on charges, will the Government consider putting a cap on charges before auto-enrolment comes in?
Steve Webb: I am pleased to say that the early evidence from auto-enrolment—firms are already choosing schemes —is that average charge levels are coming down very dramatically, compared with the stakeholder charge caps that used to be in force, for example, with a norm of around 0.5% for last firms, which is radically below the levels we have seen in the market in the past. However, we need to keep this under review and have reserve powers to cap charges if we think they are becoming a problem as auto-enrolment is rolled out.
Mrs Jenny Chapman (Darlington) (Lab):
In their efforts to get people back into work, will Ministers please make more of an effort to work with colleagues in the Treasury on tax credits? Constituents of mine are taking three-month contracts, ringing up to get the forms, which then take six or seven weeks to arrive, and
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when they are returned they are being refused the tax credit because there is only four weeks of the employment left. This is putting people off taking temporary work and really is—I use the word again—a shambles.
Mr Duncan Smith: The hon. Lady knows that we are not yet responsible for tax credits, although under universal credit they will eventually come in. I will certainly relay her comments to the Treasury and ensure that that does not happen. I agree with her that everything we do to promote work, even part-time work, is very important.
Harriett Baldwin (West Worcestershire) (Con): Can the Minister confirm that over 800,000 new jobs have been created in the private sector since the election and that one of the fastest growing sectors in the sector is cyber-security, as it is in my constituency, where there is an insatiable desire to hire young people who have skills, particularly in ethical hacking?
Mr Duncan Smith: My hon. Friend is absolutely right. The point she should make, quite rightly, is that these are new and growing industries where there are real threats to computers and people using them, and that is why the industry is growing. More than that, in the past three months we have seen a fall in unemployment and a rise in private sector employment, even though we have been moving more people from incapacity benefit, ESA and lone parent benefits to jobseeker’s allowance, so it has been a success in difficult times and we should applaud that.
John Cryer (Leyton and Wanstead) (Lab): Of the 54 existing Remploy factories, how many does the Minister expect still to be running at the end of this Parliament, whether they are called Remploy or go under another name?
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hope that as a result of the work being done we can, as Liz Sayce’s recommendations suggest, set those factories free from Government control. I remind him of the comments made by the right hon. Member for Neath (Mr Hain) back in November 2007:
“The reality is that without modernisation Remploy deficits would obliterate our other programmes to help disabled people into mainstream work.”—[Official Report, 29 November 2007; Vol. 468, c. 448.]
George Freeman (Mid Norfolk) (Con): The Labour party has been critical of the proposed regionalisation of benefits. Will the Secretary of State remind the House which senior politician first recommended the idea?
Mr Duncan Smith: I understand that it was the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), who actually called for a debate, but as soon as we got a debate he told us that we were debating the wrong thing, which is rather strange.
Emma Reynolds (Wolverhampton North East) (Lab): Many of my constituents have raised concerns with me about the forthcoming bedroom tax, especially given the lack of affordable alternative housing in Wolverhampton. Specifically, can the Secretary of State reassure me that individuals or families with disabilities who are in adapted housing, and who have waited some time to secure it, will not be subject to reductions in their housing benefit as of April next year?
Chris Grayling: We have ensured that local authorities have a substantial amount of money in discretionary funds to take into account the kind of situation that the hon. Lady describes, but the reality is that in the social rented sector we have about 1 million spare rooms, and at a time when people are queuing up on waiting lists throughout the country, it makes no sense for the taxpayer to pay for that.
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The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman): Over recent weeks we have seen extraordinary amounts of rainfall, culminating in the flooding earlier this month when parts of Sussex experienced almost two months’ rainfall in just 36 hours, and most recently over the past weekend.
Some areas in Cumbria, Lancashire and west Yorkshire saw a month’s worth of rain in 24 hours, but Cumbria had the highest rainfall, at 210 mm, with 200 mm in Honister, compared with between 80 mm and 100 mm elsewhere in the region. That extreme rainfall caused rivers to rise to unprecedented levels in some cases, and to flooding being experienced on Friday and overnight into Saturday.
I do understand the devastation that is caused to people whose homes and businesses are flooded; it has happened to me. We expect the number of properties affected to be at least 1,200 as final numbers are collated throughout the impacted areas. My thoughts go out to all those who have suffered flooding, especially those in the worst affected areas, including Crawshawbooth, Todmorden, Hebden Bridge and Mytholmroyd. I know that local communities rallied round as the recovery operation began in earnest, and I hope that all will be able to return to their homes as soon as possible.
I should also like to take this opportunity to praise the excellent response from our front-line emergency services. I am delighted to report that, thanks in no small part to their efforts, there was no loss of life and few serious injuries. I am also very grateful for the diligent work of the Met Office and the Environment Agency staff in the Flood Forecasting Centre. Their forecasts, from the middle of last week, foresaw the event unfolding and meant that much work was possible in advance to lessen its impact.
Teams of Environment Agency and local authority staff were out before the flood waters arrived, clearing drains, testing defences and preparing flood basins. Flood warnings were issued to more than 7,000 properties, and flood warning sirens sounded in Todmorden and Hebden Bridge.
Protecting our communities against flooding is a vital area of the work of government, and I am pleased to say that the Environment Agency estimates that 11,000 properties were protected in the areas affected through a combination of flood defences, maintenance work, storage basins and temporary measures. For every property flooded, another 10 or so were not.
In Carlisle, the defences built following the 2005 floods have now prevented a repeat of that devastating event twice: in 2009 and this weekend. On Saturday, river levels in Carlisle were actually higher than they were in 2005.
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preparations and work of front-line responders, including the police, the fire service, the Environment Agency and local authorities, and through the more than £2 billion of investment being made by the Government, however, we are better prepared for flooding than ever before.
Mary Creagh: I thank the Secretary of State for updating the House on the flooding in the north of England over the weekend, and I echo her tributes to the emergency services and voluntary sector, who worked to evacuate homes and keep people safe. I also thank the Environment Agency and local authority staff, who worked throughout Friday night to ensure that flood defences were activated in places such as my constituency of Wakefield, which was flooded in 2007, and the Lower Aire valley in Leeds.
Will the right hon. Lady join me in paying tribute to businesses that have offered help to businesses affected? Hon. Members on both sides will be relieved that no lives were lost, but the severity of the floods has meant that the communities affected face months of disruption and upheaval. What contact did the right hon. Lady have with the Cabinet Office civil contingency secretariat? What detailed information does she have on the number of homes and businesses affected in the areas of Hebden Bridge, Mytholmroyd and Todmorden?
What will happen to those who have been made homeless by the floods, and what housing arrangements are in place—particularly for the frail elderly and the disabled? What contact has the right hon. Lady had with the Secretary of State for Communities and Local Government about the recovery effort? I see that the Under-Secretary of State for Communities and Local Government, the hon. Member for Bromley and Chislehurst (Robert Neill), is here. Which Government Minister will lead on the flood recovery and on providing support for the affected communities?
Following the floods of 2007 and 2009, the Government set up a flood recovery grant as a one-off payment to councils to help households seriously affected by the floods. Do the Government intend to help councils and communities in that way this time? If so, when can communities expect that help?
When Wakefield suffered from floods in 2007, the loan sharks were out on the streets there the very next day. What contact has the right hon. Lady had with the Department for Work and Pensions to ensure that crisis loans are available to families left destitute by the floods, to ensure that families do not fall prey to loan sharks?
What estimate has the Department for Communities and Local Government made on the cost of flood recovery to local authorities? Is the Bellwin scheme likely to be activated by the floods? In 2007 and 2009, central Government covered 100% of local authority costs under the Bellwin scheme. Is the right hon. Lady planning to do the same again? What contact has she had with the Department for Education to ensure that children whose schools have been flooded continue to receive their education? Will she review the flood warnings given by the Environment Agency and local authorities, as issues have been raised about the timeliness of the warnings?
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and that the likely cost to insurers was in the low tens of millions of pounds. Can the Secretary of State give an estimate of the value of uninsured losses? What support will the Government give to the under-insured or uninsured? Will she encourage the loss adjusters to get into the affected areas as quickly as possible to provide help to people?
Every £1 invested in flood defences saves £8 in costs further down the line. This weekend, we had a reminder once again that floods are the greatest threat that climate change poses to our country. The right hon. Lady mentioned how much the Government are investing in flood defences, but that is a 30% cut from the 2010 baseline. In the light of what has happened, will she undertake to review the figure? Will she reassure the House that she will resist any pressure from the Treasury to cut flood defence spending in next year’s comprehensive spending review? Communities that have been devastated by flooding should not have to go through that terrible experience again.
Mrs Spelman: I certainly join the hon. Lady in paying tribute to the businesses that have helped with the situation on the ground—as they always do, in my experience. Every time I have visited a flood situation I have found that the whole community has rallied round, and I applaud that.
The Department has a procedure for dealing with flooding at three levels of risk: low, medium and high. Civil contingencies arrangements are not triggered at the medium risk of flooding, which is what we faced this weekend. We have arrangements in hand that cover all flooding eventualities. They were activated the week before last in Sussex and over the weekend in the north-west and west Yorkshire. The current state of play is that 1,200 homes have been registered as flooded, but the number could still rise as it becomes more accurate over time. I have a breakdown by community, if the hon. Lady is particularly interested, but without a doubt the most affected communities are Todmorden, Walsden and Callis Bridge, with 540 properties flooded, followed by Hebden Bridge, with 245 properties flooded, and Mytholmroyd and Sowerby Bridge, with 145 properties flooded. The numbers then reduce, but the flooding extends across a very wide area.
Homelessness is principally a responsibility of the local authority. The local authority in each of these areas takes a lead role in the provision of homes for those affected. I have been in contact with the Secretary of State for Communities and Local Government to make sure that our actions are joined up across Whitehall.
Under the Flood and Water Management Act 2010, we make specific grants available to assist local authorities, with £21 million-worth of grants provided this year and a higher figure to be provided in subsequent years of this Parliament.
On crisis loans, in the first instance the flood-affected can turn to a local authority for help through social funds. As I am sure the hon. Lady is aware, the trigger for the Bellwin formula is 15% of a local authority’s income, and current estimates from the Department for Communities and Local Government, through the Secretary of State, suggest that it is unlikely to be triggered in this case. The scheme is there to deal with a catastrophic situation facing a local authority, and any final decision on this will not be made until we know the full extent of the damage.
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We now have available a sophisticated system of flood warnings. Perhaps it is helpful for me to make all Members of the House aware of the new facility whereby anyone in a flood-affected area can register to receive a text message flood warning. There has been a very substantial uptake of this service. However, it often increases after an event has occurred, so the Environment Agency plans to proceed with text message flood warnings on an opt-out basis in future. Where households do not have a mobile phone to receive a text, it can be received in digital form on a landline, so no one should be unaware of a flood warning. In addition, I commend to the House the use of flood wardens who can knock on people’s doors to forewarn them, especially in the case of the vulnerable and the elderly. Communities that have been flooded often subsequently seek volunteers in this role.
On flood insurance, we are at an advanced stage in intensive and constructive negotiations with the insurance industry on alternative arrangements for when the statement of principles expires this time next year. As the hon. Lady will be aware, in 2008 the insurance industry notified her party, when in government, that the statement of principles would come to an end. Her party in government did not find a successor to the principles but, as she will have heard me say, we are well on our way to doing so. The average insurance premium is roughly £300 a year, while the average estimated claim in this regard is so far estimated to be £15,000. That shows the benefit of households being insured.
On flood defences, I do not accept the hon. Lady’s figure of a 30% cut. She is not comparing like with like. If we compare how the previous Government funded flood defences in their last four years in office with our commitment to fund flood defences for the four years that succeeded their loss of power, we see that the reduction is just 6%. When she considers the mess her party left the Government in, she will recognise that that was no mean achievement. In addition, a new method of partnership funding whereby third parties come in to help to get some of these new flood defences built has brought an extra £72 million into such works in its first year of operation.
Mr Speaker: Order. There is a statement by the Prime Minister to follow. I do not expect exchanges on this urgent question to continue beyond 4 o’clock, so if the level of interest is to be accommodated, there is a premium on brevity from Back Benchers and Front Benchers alike.
Craig Whittaker (Calder Valley) (Con):
The Environment Agency has invested millions of pounds in Calder Valley’s flood defences over recent years, but nothing could have stopped what happened with the onslaught of water on Friday night. My wife and I saw first hand, from the valley bottom to up to 1,000 feet above these communities, a month’s rainwater coming down the country lanes in waterfalls and torrents. Will my right hon. Friend join me in saying to the communities of Todmorden, Hebden Bridge and Mytholmroyd that our thoughts
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are with them, and will she explain what extra help may be available to them to make sure that they quickly get back on their feet?
Mrs Spelman: Through my hon. Friend, I extend my heartfelt sympathy to those communities. I know how they feel, having had to evacuate my home for 10 months after flooding. It takes a long time and a great toll on people’s mental health to get things back to the state that they were in before the flood occurred. There are two practical things to say. First, the completion of the third phase of the flood defences in Todmorden will help to protect more properties. Secondly, the community in Hebden Bridge might like to consider the partnership funding model, which might bring useful assistance. My hon. Friend is right that when a month’s rain falls in 24 hours, virtually no infrastructure can prevent flooding completely.
Mrs Spelman: Yes, I am confident of that because we have reached an advanced stage of negotiation with the insurance industry to secure universal and affordable flood insurance. It is often misunderstood, but the statement of principles was no guarantee of the affordability of insurance. We understand how important that is, and will make a statement shortly.
Andrew George (St Ives) (LD): It seems that the heavens are opening with distressingly increased regularity and intensity. Given that the science of forecasting is improving and the growing responsibility of the Environment Agency, what more can be done to ensure that that science is harnessed and that mobile defences are put in place to respond to it?
Mrs Spelman: My hon. Friend is right that the capacity to forecast has improved. The Department for Environment, Food and Rural Affairs gives the Flood Forecasting Centre £2.9 million per annum, which continues the funding position from before we came into government. The accuracy of the forecasting means that we can give communities vital hours in which to give advice to home owners on how to protect themselves and their possessions. I suggest that communities that face flooding regularly, which substantial parts of Cornwall do, consider technical provisions, such as text messaging, backed up by flood wardens who knock on doors personally. I saw people in Sussex resist moving even when all the advice had been given to them. There is no substitute for the human touch.
Yvonne Fovargue (Makerfield) (Lab): Many of my constituents have benefited from the flood defences put in place by the last Government. However, they are now looking to renew their insurance premiums for a further year. I am pleased to hear that the negotiations are at an advanced stage. However, given that people have to take out insurance now for 2013, when will the matter be decided?
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Mrs Spelman: As I have indicated, good progress has been made. I spoke to the annual general meeting of the Association of British Insurers last month to indicate to the insurers that we were close to reaching agreement on a basis that will guarantee the universality and affordability of insurance.
Bob Stewart (Beckenham) (Con): I was in Rossendale last Friday night and I have never seen rain like that before in the United Kingdom. It was shocking. Will my right hon. Friend assure me that when there is warning that flooding is likely, one person in the north-west, or in any other region where flooding might occur, is responsible for rapidly co-ordinating the emergency resources?
Mrs Spelman: I can give that assurance to my hon. Friend, who, with his military background, will know the importance of a command and control structure. The response is linked to the severity of the risk. There is a very clear structure involving silver and gold commands, led respectively by the police and the local authority, which ensures that wherever such an event takes place—he is right that we are seeing extreme weather events with increasing frequency—a tried and tested procedure clicks into place. We practised that structure last year in Exercise Watermark.
John Healey (Wentworth and Dearne) (Lab): Which of the flood-hit areas has the Secretary of State visited? There was nothing in her statement about the actions she will take, and little that showed that the Government understand that, when the waters recede, so does public and media interest, but the problems that families and firms face simply do not. It can take months to get those problems, including insurance claims, sorted out, so will she call in the insurance companies and ensure that claims are speeded up, as the Labour Government did after the 2007 floods?
Mrs Spelman: The right hon. Gentleman did not hear what I said. I know from personal experience exactly what flooding feels like, having been flooded out of my home for 10 months. I visited the flooding in Sussex the week before last, but there is a clear procedure for Ministers, which I imagine he knows. Ministers are not welcome in the immediate emergency because we might get in the way of the emergency services doing their job. We wait to be advised by them on the right time to visit. Had the urgent question not been asked today, I could have been on site. The Under-Secretary has kindly agreed to go to the north-west and west Yorkshire, because there is no substitute for hearing from the ground in the aftermath, as the clear-up operation takes place, what, if anything, we could learn to do better.
Simon Hart (Carmarthen West and South Pembrokeshire) (Con): Has the Secretary of State been able to measure the impact of the habitats directive on the Environment Agency’s ability to maintain main rivers and prevent flooding?
The Environment Agency has drawn praise not just from the local communities that were flooded this weekend, but from those that were flooded the week before last in Sussex. In my experience, including of the severe flooding event in Cornwall in 2010, the
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agency constantly strikes a balance to ensure that the forces of nature, which we admire on a fine day when the rivers are not bursting their banks, can be contained, and as far as possible directed not to do damage, to the built community in the event of such adverse weather conditions, which we see more frequently.
Barry Gardiner (Brent North) (Lab): Does the Secretary of State agree with the Environment Agency’s assessment that it should spend an additional £20 million on flood defences each year? Instead of disputing whether there is a 6% or 27% cut, does she not realise that the failure to invest that money costs Great Britain plc far more in the costs of clearing up after floods?
Mrs Spelman: We would all like to spend more money on flood defences—there is a very good return on investment: for every £1 of taxpayers’ money spent, there is an £8 return—but the reality of the situation is that the Labour party left the nation’s finances in a very bad state. When in government, the hon. Gentleman’s party indicated that it would cut capital by 50%. In the circumstances, therefore, he should see a 6% reduction as a significant improvement on what his party pledged.
In addition, I could not underline more the importance of the new approach to funding flood defences, which is to encourage partnership funding to bring in extra resources, so that more homes can be protected. In its first year, partnership funding has brought in an extra £72 million—much of that from local government. That means we will exceed our aim to protect better at least 145,000 more homes in the lifetime of this Parliament.
Neil Parish (Tiverton and Honiton) (Con): I welcome the Secretary of State’s statement on using partnership funds to create better flood defences. May I echo the words of my colleague who said that the dredging of rivers and tributaries by the Environment Agency can help a great deal in the long run with flooding?
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the valleys in places such as Cornwall and Cumbria, such action poses a significant challenge. The community of Hebden Bridge had not qualified under the old approach of 100% of state-funded flood defences, but it has the opportunity under partnership funding to get the flood defences that are much needed.
Diana Johnson (Kingston upon Hull North) (Lab): I am sure the Secretary of State knows that today is the fifth anniversary of the dreadful flooding in Hull. In the light of that and Hull residents’ experience of getting insurance at a reasonable cost, without excessive premiums or excesses, can the Secretary of State assure me that the new agreement will open up the insurance market in areas such as Hull?
Mrs Spelman: Yes, I can give the hon. Lady that assurance; details will follow shortly. As I said, however, having inherited a situation in which the previous Government failed to come up with a successor to the statement of principles, I am proud that we have found a way forward with the insurance industry that, above all, guarantees that universal and affordable insurance remains available to all, including her constituents.
Henry Smith (Crawley) (Con): The flooding in west Sussex has been of great concern, but will my right hon. Friend join me in welcoming the Government’s significant investment in the upper river Mole flood alleviation scheme, which is now starting to protect homes and businesses in Crawley constituency?
Mrs Spelman: Yes, I welcome it, and, through my hon. Friend, I would like to pay tribute to the emergency services, volunteers and communities following that severe flooding incident in Sussex. Almost two months’ rain fell in 36 hours. It was encouraging that the equipment we provided, within the county and across county boundaries, was brought into play in that time of need, as the procedures required.
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The Prime Minister (Mr David Cameron): The G20 needed to address the five big threats to the global economy: first, the problems in the eurozone; secondly, the mountain of debt and persistence of imbalances in the world economy; thirdly, the lack of growth; fourthly, the rise of protectionism; and fifthly the failure to regulate our banks properly. I shall take each briefly in turn.
First, I turn to the eurozone. Britain is not in the eurozone, and we are not going to join it, but, given that 40% of our trade is with the eurozone, its future affects our future. It is in our national interest for it to resolve its difficulties. As a full member of the EU and a significant net contributor to its budget, it is not only vital but right that we speak plainly about what needs to happen.
In the short term, we need rapid action by the core of the eurozone, including the European Central Bank, to restore financial stability and confidence to the countries on the periphery of the eurozone as they undergo their vital structural reforms. That needs to be reinforced in the medium term by improvements to the governance of the eurozone that recognise the remorseless logic of being in a currency union.
This clearly was a G20 summit, not a eurozone summit, but none the less the eurozone countries made some steps towards both those goals. First, they agreed to take all necessary policy measures to safeguard the integrity and stability of the eurozone, including breaking the link between sovereign debt problems and bank instability, and secondly they committed to taking further steps towards fiscal and economic integration, including through a banking union.
Britain does not want to stand in the way of these measures towards closer integration of the eurozone, but we will not be part of them. We did not join the eurozone precisely because we did not want to give up the kind of sovereignty over our national economy that is essential to making a currency union work. And we have been clear that whatever long-term decisions are made about the governance of the eurozone, the rules that govern the single market must always protect the interests of all its 27 members. This is a red line for Britain and is vital to our national interests. The eurozone now needs to get on with implementing the agreements reached at the G20, and I will work at the European Council this week to ensure that the eurozone takes these steps in a way that protects the UK’s interests.
To deal with the wider risks of contagion to the global economy, the G20 also welcomed the commitments to increase the resources available to the IMF by more than $450 billion. It is a basic principle of the IMF that the help it offers is for countries not for currencies. Indeed, almost all the IMF’s 50 programmes are for countries outside the eurozone. No country has ever lost money lending to the IMF, and Britain’s contribution is a loan on which interest is payable, and will be used only if troubled economies meet strict conditions to get their economies back on track.
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secure the second. The G20 also reaffirmed its commitment to reduce global imbalances, with deficit countries strengthening their public finances and surplus countries taking further actions to increase demand and move towards greater exchange rate flexibility. In particular, we welcomed China’s commitment to allow market forces to play a larger role in determining movements in its exchange rate, and to continue reform and increase transparency in its exchange rate policy. This is an important advance for the G20 in dealing with global imbalances, which was of course one of the underlying causes of the crisis in 2008.
In a debt-driven crisis where many countries lack the fiscal space to stimulate their economies, the most powerful tools for growth that we have are monetary activism and structural reform. The G20 agreed that monetary policy should continue to support the economic recovery, and every G20 country has put on the table specific structural reform commitments to strengthen global demand, foster job creation and increase growth potential. The Los Cabos growth and jobs action plan includes mechanisms to hold G20 members accountable for delivering on the reform commitments made. Vitally for us, this includes completing the European single market.
The G20 did not just focus on growth in the largest economies, as it also reaffirmed its vital commitment to supporting private sector-led growth in the poorest countries as the best way of helping people to lift themselves out of poverty. Britain led a significant breakthrough on two of the biggest barriers to successful private sector development in developing countries. First, we drove forward the G20’s anti-corruption plan, including securing agreement on important new principles that will deny to all G20 countries entry by corrupt officials or those who corrupt them. Secondly, on the inability of farmers to access the technology that makes their farming viable, Britain made a substantial contribution to the AgResults initiative, which will harness the creativity of the private sector to help put new technology in the hands of the world’s poorest farmers. We will be building on this further at our special event on hunger, which will be held at the Olympics in London this August.
Fourthly, on trade, we expressed our deep concern about rising instances of protectionism around the world. The President of Argentina had a number of arguments during this summit—not just with me—and it was made very clear to her that recent behaviour by Argentina on both investment and trade protectionism was not acceptable. At this G20, free trade again won the day. We extended our commitment to avoid any new protectionist measures until the end of 2014, and agreed to roll back new protectionist measures that have arisen, including new export restrictions.
Most significant of all, the US and the EU reached a groundbreaking political agreement to move forward with a deep but credible trade agreement with a clear and agreed timetable. The EU-US high-level working group will now produce recommendations for taking this forward by the end of the year. The EU and US make up half of the world’s gross domestic produce, so completing a deal here could provide an enormous boost to growth across the world. That means, of course, jobs and growth in Britain.
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of the Financial Stability Board in holding all G20 countries to account for delivering on their commitments, which was specifically recommended by the UK report on global governance at the Cannes summit last year. We also agreed to push forward with completing the implementation of Basel III.
In the margins of this summit, I had useful discussions on some of our key foreign policy priorities. On Syria, where the regime continues to pound civilian areas with mortars, attack helicopters and snipers, the EU is today, as a result of UK efforts, extending sanctions to ban any EU companies from insuring ships taking arms to Syria. We will continue work with our international partners, including through the UN to stop the appalling slaughter and help forge a political transition to a democratic future that protects the rights of all its communities.
Finally, on the Falkland Islands, I took the opportunity to emphasise the importance of the planned referendum to President Kirchner. The islanders have had to put up with endless attempts at endless summits to put a question mark over their future. They want to determine that future themselves. No one should be in any doubt that, as far as the British Government are concerned, it is the Falkland islanders who will determine the sovereignty of the islands. I believe that their view will be respected by this House, this country and, indeed, by the world. I commend the statement to the House.
Edward Miliband (Doncaster North) (Lab): I thank the Prime Minister for his statement. Let me start with the foreign policy issues that he raised. On the Falklands, there is support on the Opposition Benches for the absolute need to protect the principle of self-determination for the islanders, and we should always stand up for that.
On the issue of Syria, there is deep concern on all sides about the continued failure of the Annan plan to deliver a cessation of violence. Given the urgency of having an immediate end to the escalating hostilities, does the Prime Minister agree that it is now vital for the international community to unite around the need for the toughest sanctions against Syria? In his press conference after the summit, the Prime Minister said that President Putin has been explicit that he is not locked in to Assad remaining in charge in Syria, but Russia’s Foreign Minister Lavrov said that was not his Government’s position. Does the Prime Minister still believe this to be the case, and does he believe that there is a case for persuading Russia to take a tougher stance?
I shall now turn to the main business of the summit, the economy. The G20 last met in Cannes in November. Since then our country has gone into a double-dip recession, world growth has slowed, and the eurozone crisis has deepened. If ever there was a time for the international community to come together and act, this was it, but frankly—I think that the Prime Minister may himself really recognise this—all that we got from the summit was more of the same: drift and inaction in the face of a global crisis.
“made important progress on the Eurozone, on the lack of global growth and on the rise of protectionism.”
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That sounded familiar to me—and then I realised why. The Prime Minister had said exactly the same after the last failed summit, in Cannes in November. On global growth, the Cannes summit communiqué said
“should global economic conditions materially worsen”,
“agree to take discretionary measures to support domestic demand”.
Well, global conditions have worsened, most evidently in Britain, which is only one of two countries in the G20 to have gone into a double-dip recession. If that communiqué meant anything, it meant that this G20 summit should have been a coming together of the world leaders with a real plan to boost global demand, but what did we get? The Mexico communiqué is a cut-and-paste job which effectively repeats the same words that we heard at Cannes, almost word for word. Perhaps the Prime Minister will be able to tell me whether the words or the commitments of the international community have changed. As far as I can see, it is more words and no action. People will be asking—and rightly so—how much worse the economy has to get.
The tragedy, of course, is that the international community are divided between those who want a decisive move towards growth and jobs, like President Obama and President Hollande, and those whose answer to the failure of the last two years is simply more of the same—the same austerity that is not working—like the German Chancellor and our Prime Minister. Maybe the Prime Minister will be able to tell us whether, with Britain now in a double-dip recession, he was arguing at this summit for anything different from what he argued for last November. From his statement, it certainly does not sound that way.
“These are significant agreements; now the Eurozone countries need to get on and implement them.”
But is not the reality that there is no agreement on the main issues of substance—how to recapitalise European banks, how the European Central Bank can stand behind member countries, and how to prevent the escalation of problems in the bond markets? It is more of the same—more kicking the can down the road—and there is no plan for growth in Europe either.
Of course the Prime Minister cannot be part of the solution, but he is part of the problem. No wonder he was looking for something else to talk about during the summit, and of course he found it, although, strangely, it was omitted from his statement—the tax affairs of Jimmy Carr. On Wednesday he could not have been clearer: Jimmy Carr was “morally wrong”. On what he called the “Gary Barlow situation”, he said—I am not making this up, I promise, Mr Speaker—
“As soon as I get in front of a computer I will have a look at it.”
“I am not going to give a running commentary on different people’s tax affairs. I don’t think that would be right.”
“He has been very busy.”
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There is one important lesson to be learnt from the last week. In the midst of an economic hurricane, this global summit should have produced action, not words. The reality is that this is a Prime Minister who has come back from the summit with nothing for Britain: nothing to turn around a double-dip recession, nothing to help Britain’s families, nothing to ensure growth in the world economy. No wonder he wanted to spend the summit talking about Jimmy Carr.
First, let me thank the right hon. Member for Doncaster North (Edward Miliband) for his support over Afghanistan. I welcome that. On Syria, I agree that we should continue to back tough sanctions. On Russia, I had useful conversations with President Putin. Clearly the stance that the Russians take is a matter for them, but we believe that there is a real case for getting together and working to implement, in particular, the parts of the Annan plan that are about political transition, and we will continue to make those arguments.
I would not over-claim for this summit—clearly, it was a G20, not a eurozone, summit—but I would say to the right hon. Gentleman that there are some battles that we have to fight every year, and the battle to prevent the rise of protectionism is just such a battle. This year, we have moved forward the date before which no one can put in place protectionist measures by another year, to 2014. Frankly, I wish that had gone further, but the idea that we fight this battle once and the fight is over is quite wrong.
The right hon. Gentleman’s problem with the communiqué —of course, he did not say whether or not he would have signed it—is that what he wants is more spending, more borrowing and more debt. The fact is that, while there might be some countries that could afford to spend more, because of the mess he left, Britain is not one of them. I have to remind him that he left us with a deficit that was bigger than those of Greece, Portugal and Spain. He quoted President Hollande, but he might remember President Hollande’s statement in which he said that the national debt is the “enemy” of the left. What a pity it is not an enemy of the left politicians sitting across from us. The right hon. Gentleman says we are part of the problem: frankly, he created the problem.
As for the issue of Jimmy Carr and all the rest of it, we learned from what happened in respect of Ken Livingstone that it is Labour politicians who are involved in tax avoidance, and now we know a new rule: they will stand up for tax avoiders wherever they are.
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resemblance between Syria and Bosnia. If that is so, will the Prime Minister do his utmost to make sure that the Damascus of 2012 does not become the Sarajevo of 1914?
The Prime Minister: As ever, the Father of the House makes a very important point. One of the crucial things we want to see for the future of Syria, whatever the outcome, is that there is proper protection of minorities, including Christian minorities, in that country. We do not want to see sectarian conflict. It has become increasingly clear that there will not be a prosperous and safe future for Syria with Assad still in charge. That is why the political transition that Annan’s plan involves is so important and why we should keep pushing it.
Mr Peter Hain (Neath) (Lab): Can the Prime Minister explain how Britain will retain its influence in the G20 given that his Government are isolating themselves from the main power brokers in the European Union? As Russia and China follow America in becoming superpowers, and as Russia flexes its muscles and India rises too, surely we should be right at the centre of the EU so that we are listened to more, instead of being followers on the margins of the EU?
The Prime Minister: If by that the right hon. Gentleman means, “Should we join the euro and just go along with everything that is suggested?”— [Interruption.] Well, that is what would follow, and I do not accept that for a moment. Britain can play a strong role in the EU, but where there are things we do not want to join, such as the Schengen no-borders agreement and the single currency, Britain should stay outside them.
In terms of our relations with the rest of the world, the Government have done a huge amount to increase our relations with China and India, as trade flows in the last few years show: in the last two years, exports to China up 72%, exports to India up 93% and exports to Russia up 109%. We are making a difference where it counts.
“Intensifying the fight against corruption”,
“denial of entry to our countries of corrupt officials, and those who corrupt them”.
As these measures were inspired by the tragic case of Sergei Magnitsky, who died in a Russian prison having exposed massive corruption by Russian state officials, is it not ironic that the next chair of the G20 will be Russia, and that President Putin will be chairing the next conference, in St Petersburg? Will my right hon. Friend encourage President Putin, who presumably endorsed this declaration, to ensure that those responsible for the death of Magnitsky and this massive corruption are brought to justice before President Putin chairs that conference a year from now?
The Prime Minister:
My right hon. and learned Friend makes an important point. The section of the communiqué about corruption is indeed important, and all the countries that have signed up to it should make sure that they put it in place. One of the strengths of the G20 is that,
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because it is not bringing together countries that necessarily share all the same democratic or human rights values, it is an opportunity to try to push some of those agendas with colleagues sitting round the table.
Chris Bryant (Rhondda) (Lab): The Prime Minister jests about what words are allowed and not allowed in this Chamber; on the Opposition Benches, we would quite like to hear one word more often from his lips: “growth”.
Further to the question from the right hon. and learned Member for Kensington (Sir Malcolm Rifkind), the problem of corruption in Russia is manifest. On 7 March, this House unanimously agreed a resolution, supported by the Government, calling on them to introduce legislative proposals to make sure that those involved in the murder of Sergei Magnitsky and the corruption that he unveiled were banned from this country. When will those legislative proposals be introduced?
The Prime Minister: I have to say to the hon. Gentleman that the word I am waiting for from him, because he introduced a point of order claiming that I had misled the House, is “sorry”. To be fair to him, he has said sorry to everybody else—you, Mr Speaker, I think, and to the House in general—but the person he accused of doing something wrong he has yet to say “sorry” to. So, until I get that apology, I think I will leave off the answers.
Simon Hughes (Bermondsey and Old Southwark) (LD): The communiqué was clear that, as a way of agreeing further growth, there should be investment in infrastructure, particularly in housing, which would bring both jobs in general and deal with youth unemployment in particular. Can the Prime Minister say anything about the priority our Government will give to those matters in this country, in order to get youngsters off the dole and houses built for them to live in?
The Prime Minister: My right hon. Friend raises an important point. Because we have credibility in financial markets and our interest rates are less than 2%, we are able to use the strength of our balance sheet to help make sure that houses get built, that infrastructure goes ahead and that we help our economy in that way. We are looking at the best way to make this happen.
Caroline Lucas (Brighton, Pavilion) (Green): Given the lack of any discernible progress on ending harmful fossil fuel subsidies since the first G20 pledge on that three years ago, and given the silence about it again today, what would the Prime Minister say to the 1 million people whose petition was handed to him last week asking for an immediate end to those subsidies? Does he really think they are the best use of $100 billion globally every single year?
The Prime Minister: The hon. Lady makes a very important point, and there is huge pressure on countries that have big fossil fuel subsidies to end them. A number of countries—such as Nigeria and, I believe, Pakistan—have taken some steps to end the subsidies. It is obviously a difficult and painful process for those Governments to go through as they change the structures of their economy, but we should be encouraging them.
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Richard Ottaway (Croydon South) (Con): May I welcome the Prime Minister’s attack on protectionism and support for free trade, particularly the US-EU trade agreement timetable? Does he agree that these are the two largest trading blocs in the world, and together will create an enormous bloc that will have a profound effect on growth and trade across the world?
The Prime Minister: My hon. Friend is entirely right to raise this issue—it is half the world’s GDP. There are a huge number of difficulties in getting these talks properly under way; there will be concerns about farm subsidies and about hidden protectionism on both sides. But the pressure from European member states on the European Commission—and, indeed, from the Commission itself—and, I believe, from business in the US on the American President, is to get a deal done, because in the end, it would be very good for all of us.
Mr Dennis Skinner (Bolsover) (Lab): Now that the Prime Minister has had his Jimmy Carr moment, would it not be a good idea to publish a list of all those using tax avoidance schemes, including those closer to home and those who inhabit millionaires’ row?
The Prime Minister: I was hoping, for once, that the hon. Gentleman would stand up and applaud what I had said about tax avoidance and aggressive tax avoidance. I thought, for once, we might be on the same side.
Mr Peter Bone (Wellingborough) (Con): I am very grateful for the Prime Minister’s statement, particularly after he made such an excellent speech on welfare reform earlier today. Could he confirm that the referendum for the Falkland Islands will be binding and solemn? As referendums are such a good idea for people, why can we not have one in this country about our relationship with the European Union?
The Prime Minister: That was an excellent link, if I may say so. What is so important about the Falkland Islands referendum, which is very much an initiative that has come from the Falkland islanders themselves, is that it will give the opportunity for the rest of the world to see what the people who live there actually want—lots of countries that are not particularly focused on this issue may, in the past, have gone along with proposals from Argentina without really considering that. When they see it in glorious technicolour, I hope that will make a difference.
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what he calls the “greenest Government ever”, can he share with us what representations he made in Mexico about that other crucial conference?
The Prime Minister: Obviously it is difficult to be in two places at once, so I did the G20 and the Deputy Prime Minister was at the Rio+20 summit. We discussed it a great deal in advance, and I think it did make some useful progress in terms of sustainable goals. I am also going to be working, through this high-level panel to which Secretary-General Ban Ki-moon has appointed me, to make sure that we put in place the right replacements for the millennium development goals and that they take into account sustainable concerns as well.
Dr Julian Lewis (New Forest East) (Con): Does my right hon. Friend agree that events in the eurozone have predictably proven that the creation of the single European currency was a disastrous mistake?
The Prime Minister: It would have been a mistake for us to join the single currency, because we did not want to give up the necessary sovereignty to make a single currency work. We have to respect the fact that there are countries in the eurozone that want to make it work, and we have to allow them that opportunity. It would clearly be in our interests if we had a working single currency on our doorstep, rather than a dysfunctional one, which, I am afraid, is slightly what we have at the moment. So we have to make our own choices, and other EU countries must make their own choices, but the key point—this is where I agree with my hon. Friend —is that a single currency will not work unless it has at least the underpinnings that other single currencies, such as our own, have: a central bank right behind it; a means of supporting the weaker parts of the union at various times; and some sort of joint debt issuance. Those are the sort of things that all single currencies, the world over, have. To that extent, I agree with him.
The Prime Minister: What it feels like at the G20 is that you are around a table with people from other countries that have large budget deficits but not as large as the ones that we were left. We were left with an 11% budget deficit and with the biggest banking bust that had taken place anywhere. So I would say that there is considerable sympathy for that around the table, and a lot of people around the table talk about the complete mess we were left in.
“Anyone who wants new flash-in-the-pan stimulus packages financed by yet more borrowing has learnt absolutely nothing from the crisis.”
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Mr William Bain (Glasgow North East) (Lab): The OECD has predicted that economic demand in America will rise this year at 2.3%, but in Britain it will rise at only 0.2%. Can the Prime Minister explain why?
The Prime Minister: There some quite significant differences between the American economy and the British economy. One of the biggest differences is that it is a reserve currency and we are not a reserve currency. Another big difference is that we had an 11% budget deficit, which was bigger than the deficits of Greece, Spain and Portugal. That is the legacy that the hon. Gentleman’s party left, and until Labour Members apologise for that legacy, no one is going to take them seriously.
Michael Ellis: Thank you very much, Mr Speaker. Does my right hon. Friend agree that the rather ridiculous posturing by the Argentines at the G20 summit tries to hide the fact that it is they who are the real colonialists, because they wish to ignore the democratic wishes of the Falkland Islands people themselves?
The Prime Minister: My hon. Friend is entirely right. At the heart of the UN charter is the concept of self-determination, which is why I think that the referendum is important. In many ways, we do not need it to happen in order to know the wishes of the Falkland islanders, which have always been clear, but none the less I think that it will underline that and people will be able to see that it is not Britain that is behaving in a colonialist way but that we are simply doing what the Falkland islanders want us to do.
Mark Hendrick (Preston) (Lab/Co-op): On the basis of what authority is the Prime Minister lecturing the eurozone when two and half years of his Government’s policies have driven this country into a double-dip recession?
The Prime Minister: I think that as a net contributor to and full member of the European Union we have every right to say what we think is necessary to fix the crisis. The hon. Gentleman talks about what has happened over the past two years, but I would make the point that 400,000 more people are in work than at the last general election. Unemployment was down this quarter and employment was up, and there are 840,000 more private sector jobs. It is tough and difficult but a rebalancing of our economy is taking place that involves more manufacturing and more exports and that is leading to private sector job growth.
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of being in a currency union. Those of us who have consistently called this right over the past 20 years have serious reservations about asking countries such as Greece, Spain and Portugal to make the democratic sacrifices that we ruled were unacceptable to the United Kingdom. Does he share our concern that when countries find they cannot change the policies of their Government through the ballot box, it could lead to profound instability in Europe?
The Prime Minister: My hon. Friend makes a very good point, but the point that I would make in response is that it is not for us to tell those countries what to do. If countries want to join a currency union, understand that to make that currency union work they have to give up all sorts of sovereignty and freely enter into that bargain, that is a matter for them and not a matter for us. It is for us to decide whether we want to do that, which we do not, and—and, frankly, it is all right to do this—to give advice about what would make a eurozone work better than it is working today.
“We are committed to adopting all necessary policy measures to strengthen demand, support global growth and restore confidence”
“enhance job creation”.
I welcome monetary activism as one of the tools to help achieve that, but can the Prime Minister explain to the House how his Government’s austerity programme will do anything other than weaken demand, weaken growth and suppress demand for labour?
The Prime Minister: I make this simple point to the hon. Gentleman: if we did not have a credible plan for dealing with our debts and our deficit, our interest rates would not be below 2%. It is worth remembering that when this Government took office, Spanish and British interest rates were at the same level. Our rates are now below 2%, which is helpful for growth, for business and for home owners, and the Spanish have interest rates close to 7%. That is the point. The idea that if a country spent more, borrowed more and added to its debts, it would stimulate its economy is probably wrong.
Mr Speaker: Order. I gently say to the hon. Member for Rhondda (Chris Bryant) that if he wishes to conduct a running commentary on our proceedings, he is welcome to apply for a job at Wimbledon over the next fortnight, where his services might—or, alternatively, might not—be required.
The Prime Minister: I look carefully at what the French are both doing and saying and it seems to me that their plans to reduce their structural deficit are, if anything, more aggressive than our plans to reduce our structural deficit. I hear from the Opposition that we should learn lessons from France, and the fact is that the French have a deficit reduction programme, it is quite aggressive and they refer to the national debt as the enemy of France and the enemy of the left.