Wednesday Volume 589 3 December 2014 No. 73

HOUSE OF COMMONS OFFICIAL REPORT

PARLIAMENTARY DEBATES (HANSARD)

Wednesday 3 December 2014

£5·00 © Parliamentary Copyright House of Commons 2014 This publication may be reproduced under the terms of the Open Parliament licence, which is published at www.parliament.uk/site-information/copyright/. 283 3 DECEMBER 2014 284

Government’s £2,000 tax-free child care account will House of Commons create greater flexibility, provide more choice to parents and hopefully contribute to driving down costs. Wednesday 3 December 2014 Mr Llwyd: That is a step forward, but the Minister The House met at half-past Eleven o’clock will be aware that good, affordable child care is key to economic development. He is probably also aware that PRAYERS in the UK we pay far more for child care than most other OECD countries—40.9% of the average wage compared with 18%. In Sweden, by contrast, the figure [MR SPEAKER in the Chair] is 7.1%. Does he think that we have anything to learn from the Nordic countries in that regard?

Oral Answers to Questions Alun Cairns: It is important that we learn from wherever good practice is in place. The greater choice will help to drive down costs, but it is important that we provide the WALES right level of care, and the quality of care is important. I have no doubt that the stronger role that parents have The Secretary of State was asked— to play in exercising that choice will also drive up the quality of care. Child Care

1. Jenny Willott (Cardiff Central) (LD): What recent Cross-border Health Treatment discussions he has had with Ministers in the Welsh Government on the provision of free child care places 2. Glyn Davies (Montgomeryshire) (Con): What for three and four-year-olds in Wales. [906353] discussions he is having with the Welsh Government on waiting times for cross-border health treatment in The Parliamentary Under-Secretary of State for Wales Montgomeryshire and Shropshire. [906354] (Alun Cairns): Support with high-quality flexible child care is key to enabling parents to stay in the work force The Secretary of State for Wales (Stephen Crabb): and gain financial stability for their families. The UK The performance of the Welsh health service is the most Government are increasing the provision of tax-free pressing issue for the people of Wales at this time. My child care from next year; the Welsh Government need ministerial colleagues and I regularly raise concerns to do their part in supporting working families in with the Welsh Government, including on the issue of Wales. cross-border services. It is essential that all patients, wherever they live, can access the very best health care Jenny Willott: Parents in Cardiff complain that they that meets their needs. cannot access their free child care entitlement. They can only get a place if they apply for three hours a day, five Glyn Davies: Does my right hon. Friend agree that days a week at a state-run nursery school, which is the Welsh Government should follow the UK Government’s useless if they work. Given that that means that parents example of commitment to the NHS by using the in Wales are worse off than those in England, will the £70 million boost to its budget, which came about as a Minister speak to Assembly Ministers to ensure that consequence of increased spending on health in England, parents can access their entitlement to free child care on the Welsh NHS? places in a way that suits them and not the Labour council? Stephen Crabb: Decisions on how the Welsh Government Alun Cairns: I pay tribute to the hon. Lady for her use Barnett consequentials are a matter for them, but it work in this area in a number of roles in Parliament. is true that a great many people in Wales would be The UK Government have pressed authorities in England baffled, bemused and hugely disappointed if Welsh to be as flexible as possible and have structured their Ministers chose not to use every single penny of the policies around flexibility to enable more people to get £70 million that we have made available to them by into work and to manage their daily lives better. I will protecting and increasing NHS budgets here at Westminster. happily pursue the matter with the Welsh Government on her behalf. Infrastructure Investment Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC): We have heard about problems in Cardiff, but of course 3. Andrew Jones (Harrogate and Knaresborough) there are problems with good and affordable child care (Con): What assessment he has made of the level of throughout Wales. For example, in rural areas there is infrastructure investment in Wales since 2010. [906355] sometimes a 200% difference in the cost from one local authority to the next. Will the Minister do his best to 4. Jonathan Edwards (Carmarthen East and Dinefwr) ensure that the Welsh Government access funds, if they (PC): What recent discussions he has had with the exist, for that purpose and that there is a proper dialogue Welsh Government on investment in transport on this subject? infrastructure in Wales. [906356] Alun Cairns: The right hon. Gentleman makes an 5. Neil Carmichael (Stroud) (Con): What steps he important point about the variation in child care costs. is taking to improve transport infrastructure links Stability has finally come to the marketplace. The between Wales and England. [906357] 285 Oral Answers3 DECEMBER 2014 Oral Answers 286

The Secretary of State for Wales (Stephen Crabb): Mrs Siân C. James (Swansea East) (Lab): Tidal Lagoon For too long, Wales has suffered from under-investment Power in my constituency is mentioned in the national in infrastructure, so I am proud to be part of a Government infrastructure plan. Will the Secretary of State join me who are putting that right. By working closely with the in congratulating that important company on how it Welsh Government and providing additional economic has worked with determination and grit to get the resources, we have been able to set out a long-term project through? vision for how first-class infrastructure will make Wales a more attractive place in which to invest, benefiting the Stephen Crabb: I echo the sentiments of the hon. people of Wales for generations to come. Lady, who is a strong supporter of this important project. The quality of that company’s management, Andrew Jones: I thank my right hon. Friend for his vision and business plan was precisely why I wanted the answer and commend him on his work in securing the project to be included in the national infrastructure valley lines electrification. Does he agree that this project plan. It is also why I have been working hard with will have a transformative effect on those communities colleagues in the Treasury and the Department of Energy that were often left behind by previous Labour and Climate Change to get this potentially strategic Governments? project included in our long-term infrastructure plans.

Stephen Crabb: I thank my hon. Friend for his question Chris Ruane (Vale of Clwyd) (Lab): In 2009 I managed and his kind remarks. He is absolutely right. It was to convince my right hon. Friend the Member for Neath precisely because we did not want to leave those valley (Mr Hain) to allow Denbighshire and Conwy into the communities behind that we worked so hard with the objective 1 bid. Since then, those two counties have Welsh Government to secure the full electrification received about £500 million of EU funding. Will the package, electrifying the great western line all the way Secretary of State congratulate the EU on that funding through to Swansea, plus electrifying those valley lines, and recognise the danger to Wales of our pulling out of which, as he says, will have a transformative economic the EU? and social impact for many years to come. Stephen Crabb: The biggest danger to Wales, including Jonathan Edwards: The Welsh Government have north Wales, would be to abandon our clear long-term published figures on proposed roads expenditure showing economic plan, which I know Labour Members are that spending per head of population in south-west calling for. When I spent two days in north Wales on a Wales will be £89, whereas the figure will be £815 for business tour last week, I visited many Labour Members’ south-east Wales. Carmarthenshire, Ceredigion and constituencies and saw just how dynamic the private Swansea will not have a single penny spent on roads, sector is. Businesses in that sector are leading the economic which means that there will be no money for relief recovery, so they are the ones that we should be saluting. roads for Llandeilo, Ammanford and Pencader in my constituency, and nothing for upgrades to the link between Newcastle Emlyn and Carmarthen. Is it not David T. C. Davies (Monmouth) (Con): I commend the case that the stitch up between the UK Government my right hon. Friend on his commitment to the M4 and the Welsh Government to spend all Wales’s new relief road. The Severn bridge will link on to that relief borrowing capacity on a new M4 relief road means that road, so will he consider the importance of having a there will be no transport infrastructure for the rest of plan for when it returns to public ownership in Wales? approximately 2018?

Stephen Crabb: With respect to the hon. Gentleman, Stephen Crabb: My hon. Friend talks about an important he has got this wrong. A Plaid Cymru former Transport issue that has been raised by Members on both sides of Minister in the Assembly championed the upgrade of the House in recent months. I commend his work the M4, but could not achieve it, because the money personally and that of his Select Committee on examining was not available, but we are providing the resources for the impact of Severn bridge tolls on businesses and that upgrade. That does not mean that no other project consumers in Wales. I share his concerns about the can happen throughout Wales, however, and I agree levels of the tolls. I want a long-term plan in place, so I with the hon. Gentleman that we want more infrastructure look forward to discussing his ideas with him in more investment in west Wales; we share that objective. detail.

Neil Carmichael: Does the Secretary of State agree Nia Griffith (Llanelli) (Lab): The Secretary of State that the Government’s investment in redoubling the says that his Government are investing in the electrification Stroud to Swindon railway line, plus the promised of the railways and building a prison, and now he talks investment in the A417 roundabout, add up to much about the tidal lagoon, but is not the reality that they improved links between the midlands and north Wales, have not yet spent a single penny on any of those which will be excellent for trade, manufacturing and projects? They have not laid a brick or a yard of electric tourism? rail. In fact, the situation is worse, because his Government have cut the Welsh capital budget by a quarter, and no Stephen Crabb: My hon. Friend makes his point amount of jam tomorrow can sweeten that unpalatable extremely well. There is a broader point: infrastructure truth. investment not necessarily inside Wales, but in border areas, benefits people and businesses across Wales. We Stephen Crabb: I am genuinely bemused by the hon. should not be insular when considering infrastructure Lady’s question. Let us just remind ourselves that under investment throughout the UK because it often delivers the Labour Government no work was done to improve real benefits to all parts of Wales. the M4, and not a single mile of railway line was 287 Oral Answers3 DECEMBER 2014 Oral Answers 288 electrified in Wales. We are cracking on with a long-term Alun Cairns: I pay tribute to the right hon. Lady for plan for infrastructure investment, and I am very proud the role she played at the Wales Office, which contributed to be part of a Government who are doing that. to early negotiations on the electrification of the railways. Of course, HS2 is a UK strategic project and therefore Mr Mark Williams (Ceredigion) (LD): I very much will not be Barnettised. welcome what the Secretary of State said about electrification in south Wales, but will he turn his sights Albert Owen (Ynys Môn) (Lab): What is missing to the position in west Wales? Is he prepared to meet a from this failed economic plan is any rail strategy that delegation from the Traws Link Cymru group, which is deals with freight. The main corridor from the Republic campaigning to reopen the Aberystwyth to Carmarthen of Ireland to Wales and England comes through north line? That would benefit our economy immeasurably Wales. Will the Minister press the Treasury to ensure and open up our part of the world generally. Is he that we alleviate the problems on our roads, not by prepared to push that agenda forward? building motorways in marginals, but by building freight lines across England and Wales? Stephen Crabb: My hon. Friend is a strong voice for Alun Cairns: The hon. Gentleman makes an important improving all transport connections in west and mid-Wales. point. Early in the new year, we plan a transport summit We are seeing the largest investment in our railway in north-east Wales to highlight businesses’ needs, and infrastructure since Victorian times, and I want Wales to ensure that business has the opportunity to make its to get the maximum benefit from that. I would very case for electrification, so that the electrification taskforce much welcome a meeting with the group that he has of my hon. Friend the Member for Harrogate and mentioned so that we can discuss further how we can Knaresborough (Andrew Jones), and the recommendations make sure that west and mid-Wales benefit from rail made to the Secretary of State, can be taken into infrastructure investment as much as anywhere else. account. Freight is of course an important part of that.

Cross-border Rail Services Michael Fabricant (Lichfield) (Con): Although the south Wales to London line always attracts a great deal 6. Jessica Morden (Newport East) (Lab): What of publicity and concern in this Chamber, the Minister discussions he has had with the Secretary of State for should not forget the importance of the Birmingham to Transport on cross-border rail services. [906358] Machynlleth line, which is fragile and often single track. Will the Government maintain their position that the The Parliamentary Under-Secretary of State for Wales line should, wherever possible, always be open? (Alun Cairns): The Wales Office has worked closely with the Department for Transport and the Welsh Government Alun Cairns: I am grateful to my hon. Friend for his to resolve the dispute over funding for rail electrification. persistent interest in these sorts of matters in Wales. Electrification of the south Wales main line will bring This is an important issue, not only for the Wales Office significant journey time savings, an increase in capacity but for the Department for Transport. It is a subject in and a much improved passenger experience. which the Welsh Government will also want to show an interest.

Jessica Morden: My constituents who use commuter Mr David Hanson (Delyn) (Lab): In all of this, things services to places such as Bristol are increasingly frustrated seem to have gone a little bit quiet on the issue of north by overcrowding and lack of capacity. Will the Minister Wales electrification. Will the Minister update the House make the point to the Department for Transport that on his plans to ensure that it is an objective that he will the operator of the new First Great Western franchise seek to achieve? must be able to meet demand for such services now, and anticipate future demand, which will only grow? Alun Cairns: On the contrary, things have not gone quiet on north Wales electrification. My right hon. Alun Cairns: The hon. Lady has already made that Friend the Secretary of State for Wales was in north-east important point to my right hon. Friend the Secretary and north-west Wales last week, championing the need of State for Wales. The Secretary of State for Transport for business to grow and make its case, so that when the has set a minimum service requirement based on the Secretary of State for Transport makes his final judgments current level of services between south Wales and London, on the next round of investment, north Wales is at the and I have no doubt but that the hon. Lady will be a forefront of his mind. feisty champion for ensuring that those local services remain. Stephen Mosley (City of Chester) (Con): The Silk commission has proposed devolving the Wales and Mrs Cheryl Gillan (Chesham and Amersham) (Con): Borders rail franchise to the Welsh Assembly. That I congratulate the Front-Bench team on securing great franchise includes services from Chester to Manchester, investment in the railways, particularly for cross-border Chester to Warrington and Chester to Crewe. What services between England and Wales. They know that I action is my hon. Friend taking to make sure that have long supported improvement in those services. services in England are not devolved to the Welsh Will Ministers tell me what discussions they have had Assembly? with either the Treasury or the Department for Transport on the possibility of Barnettising the investment in Alun Cairns: The devolution of the electrification of High Speed 2? That would make a great difference to the franchise is part of the electrification decisions that investment in Wales. were taken for the valley lines and I am sure my hon. 289 Oral Answers3 DECEMBER 2014 Oral Answers 290

Friend will want to make a case for services that start they would be pressing their colleagues in local authorities and finish in England. The joint agreement between the and in the Welsh Government to ensure that they do Department for Transport and the Welsh Government not increase council tax as they have. continues, and my hon. Friend will no doubt want to make his views known. Mr Peter Hain (Neath) (Lab): But does not the Tories’ much trumpeted economic plan mean depressed Average Weekly Earnings earnings in Wales, generating lower taxes, and Government borrowing overshooting Labour’s planned target by 7. Chris Evans (Islwyn) (Lab/Co-op): What more than £20 billion—the very deficit target luridly assessment he has made of the reasons for changes in denounced by the Tories, who said it would bankrupt average weekly earnings in Wales in the last 12 months. the country? Why does not the Minister apologise for [906359] this abysmal failure in the Government’s austerity strategy?

10. Mark Tami (Alyn and Deeside) (Lab): What Alun Cairns: As the right hon. Gentleman was part of assessment he has made of the reasons for changes in the previous Government, he should apologise for leaving average weekly earnings in Wales in the last 12 months; Wales the poorest part of the United Kingdom. He and if he will make a statement. [906362] should further apologise for the fact that wages fell at the sharpest rate between 2008 and 2009. The Government’s The Parliamentary Under-Secretary of State for Wales long-term economic plan is working for Wales, and (Alun Cairns): Salary levels are not where we would like wages are rising quicker in Wales than across the rest of them to be, but over the past year the earnings gap the United Kingdom. between Wales and the average for the UK as a whole has narrowed. Since 2010, average earnings in Wales Owen Smith (Pontypridd) (Lab): The Minister knows have increased by more than the UK average, and Wales that low wages and poor jobs affect not just individuals has seen the second largest increase of all the English and their families, but the public finances. Will he tell us regions and devolved nations. what has happened to tax receipts and welfare spending in Wales since his Government came to power? Chris Evans: Caerphilly county borough council is clocking up a year as a living wage employer. Will the Alun Cairns: We will receive a statement from my Minister follow its example and that of the Welsh right hon. Friend the Chancellor a little later which will Assembly by becoming a living wage employer at the cover the UK financial position, but I hope the hon. Wales Office? Gentleman, who is the shadow Secretary of State for Wales, will welcome the progress that the Government Alun Cairns: The Wales Office already pays above the are making in reducing unemployment and in growing living wage. That is an important part of our policy, but wages in Wales. it is a matter for employers. The best solution is to deliver a long-term economic plan so that employers Owen Smith: The Minister does not need to wait for can pay the living wage where possible. The greater the autumn statement, because the numbers are publicly competition that we see in the work force will help to available. Tax receipts in Wales have fallen by £2 billion drive wages even further. since 2010, and benefit spending has gone up by £1.5 billion. That has piled an extra £6,000-worth of borrowing on Mark Tami: Average earnings in Flintshire fell again every Welsh worker, and what have they got for it? They this year by 1.5%, in the Vale of Glamorgan by 1.3% have got a twentyfold increase in food bank usage, the and in Pembrokeshire by 5%. When will the Government lowest wages in Wales and a cost of living crisis. The own up to their terrible management of the economy Tories have failed on the deficit, failed on the cost of and deliver for Welsh families? living crisis, and they are failing in Wales once again.

Alun Cairns: That accusation about the management Alun Cairns: The shadow Secretary of State has of the economy is not reflected in the fastest growing clearly got his facts wrong. The long-term economic economy among the developed nations of the world, plan is working for Wales. If there has been a reduction because this Government’s long-term economic plan is in tax receipts from Wales, it is because of our increase working. The hon. Gentleman talks of average increases in the personal allowance, under which next year the in salary. The trends from 2010 to the present show that average worker will pay less than £800 as a result, taking average weekly earnings in Wales have increased by 5%, 155,000 people in Wales out of income tax altogether compared with 3.9% across the whole of the UK. by next April.

Robert Halfon (Harlow) (Con): Does my hon. Friend Valleys Railway agree that the best way to increase average earnings in Wales and in constituencies such as Harlow is to cut 8. Nick Smith (Blaenau Gwent) (Lab): What council tax for low earners and freeze fuel duty and discussions he has had with the Secretary of State for council tax, just as this Government have done? Transport on when the electrification of the valleys railway line will be completed. [906360] Alun Cairns: My hon. Friend makes an important point. Whereas council tax in England has broadly been The Secretary of State for Wales (Stephen Crabb): frozen, council tax in Wales has gone up by 13% in spite When I became Secretary of State, I made resolving the of additional funding being given to freeze it. If there dispute over funding for the electrification project my was such a cost of living crisis as the Opposition claim, No. 1 priority. I have had many discussions with my 291 Oral Answers3 DECEMBER 2014 Oral Answers 292 right hon. Friend the Secretary of State for Transport in Stephen Crabb: I am delighted to see the hon. Gentleman recent weeks, and I am delighted that we have settled a stand up and champion business investment in south deal between the Department for Transport and the Wales. He is exactly right that Newport, and the Celtic Welsh Government to deliver that important project. Manor in particular, provide a superb venue for not only international leaders’ summits, but inward investment Nick Smith: Has the Secretary of State considered conferences. It will be a key player as we look to improving the frequency of trains after electrification? regenerate and improve the economy of south Wales. Two or three trains an hour on the valleys line to Cardiff would be a massive boost to my constituents in 15. [906367] Roger Williams (Brecon and Radnorshire) Ebbw Vale, Llanhillith and the surrounding valley towns. (LD): Business leaders have welcomed the introduction of the employment allowance, which reduces employers’ Stephen Crabb: The hon. Gentleman makes an important national insurance bills by up to £2,000 per annum. It point. There are frequency issues on those lines, but he has been taken up by 1,200 businesses and charities in must recognise that decisions on the frequency of services Brecon and Radnorshire, but it is estimated that nearly will need to be taken by Welsh Ministers, because we are 1,000 of all employers have not applied. What can the devolving the franchise to the Welsh Government as Government do to encourage further uptake of that part of the electrification deal. important concession? Ian Lucas (Wrexham) (Lab): Part of the valleys line Stephen Crabb: My hon. Friend is right. The employment package is a contribution by the UK Government to the allowance has been a huge success for small businesses capital costs involved. In principle, are the UK Government up and down Wales. There is a responsibility not just on prepared to support capital investment in railways in Government but on all of us as Members of Parliament north Wales? to champion that project and to tell businesses in our Stephen Crabb: I spent two days in north Wales own constituencies how they can benefit from the allowance. meeting business leaders and local authorities to talk about how we can drive up the quality of infrastructure 14. [906366] Guy Opperman (Hexham) (Con): It is in north Wales, and I can tell the hon. Gentleman that clear that the successful investment summit in Newport we have a long-term plan that will deliver the improvements brought in overseas investors and created jobs as part for infrastructure in south Wales and north Wales too. of the long-term economic plan. Does the Secretary of [Interruption.] State agree that we should have a northern powerhouse investment summit—and if they like, the north Welsh Mr Speaker: Order. Let us have a bit of quiet in the can come too? Chamber so that Mr Howell can raise the subject of the Newport investment summit. Stephen Crabb: I agree wholeheartedly with my hon. Friend. The northern powerhouse represents an exciting Newport Investment Summit vision for economic and civic renewal in the north of England, and it poses huge opportunities and potential 9. John Howell (Henley) (Con): What discussions he for north Wales too. had with business leaders at the recent Newport investment summit. [906361] Universal Credit The Secretary of State for Wales (Stephen Crabb): The UK investment summit in Newport was another 11. Hywel Williams (Arfon) (PC): What recent important opportunity to focus on all that is good discussions he has had on delivery of the online about the Welsh economy at this time. I was proud to universal credit application process in the Welsh stand shoulder to shoulder with my right hon. Friend language. [906363] the Prime Minister, the First Minister of Wales and businesses in Wales to bang the drum for all that is great The Parliamentary Under-Secretary of State for Wales about our nation. During the summit I met numerous (Alun Cairns): I recently discussed the provision of companies that are looking to invest or to expand their Welsh language services for universal credit with the investment in Wales. welfare reform Minister, Lord Freud, who confirmed that the Department for Work and Pensions is making John Howell: Did my right hon. Friend discuss with good progress with the development of the universal business leaders the fact that there were 79 foreign credit digital service. A meeting is scheduled with the direct investment projects in Wales in 2013-14, the Welsh language commissioner in the new year to discuss highest level in 24 years? Welsh language provision for the live service. Stephen Crabb: My hon. Friend is exactly right; there Hywel Williams: I recently met the team delivering has been a sharp increase in inward investment in the service, who are doing a good job under difficult Wales. The important point to note about those projects circumstances. They told me that the Welsh language is that they were all secured with the help of UK Trade version will not be available until after the English & Investment and the UK Government. language version is available. Will the Minister find out why that is, and when it will happen? 13. [906365] Paul Flynn (Newport West) (Lab): Does the brilliant success of that second summit, following Alun Cairns: My right hon. Friend the Secretary of the NATO summit, not illustrate what a marvellous State for Wales was there only last week when this issue habitat Newport provides for international conferences was discussed at the Jobcentre Plus. I have also raised it —almost certainly the best in the United Kingdom? with the DWP Minister. We are meeting the Welsh 293 Oral Answers3 DECEMBER 2014 Oral Answers 294 language commissioner to ensure that we develop a Edward Miliband (Doncaster North) (Lab): I join the service that is appropriate and applicable, and that Prime Minister in paying tribute to the British embassy grows with the growth of universal credit across the staff killed in the appalling terrorist attack in Kabul last whole of Wales. week. It is a reminder of the danger that our embassy staff and military personnel still in Afghanistan face on a daily basis. All our thoughts are with the family and friends of those who died. PRIME MINISTER The Prime Minister said earlier this year: “woe betide the politician that makes…big promises and then says ‘Oh, sorry, I didn’t really mean it.’” The Prime Minister was asked— Can he recall any time he might have done that?

Engagements The Prime Minister: Let me tell the right hon. Gentleman the promises we have kept. We promised to get the Q1. [906403] Robert Flello (Stoke-on-Trent South) (Lab): economy growing—it is the fastest growing in the G7. If he will list his official engagements for Wednesday We promised to get unemployment down—we have 3 December. created 1.8 million new jobs. We promised to make Britain a great place to start a business—there are The Prime Minister (Mr David Cameron): I am sure 760,000 more businesses in this country. This Government the whole House will join me in paying tribute to the are a Government who have made their commitments, British embassy staff who were killed and injured in kept their commitments and, as a result, have a plan Kabul following the horrific bomb attack last week. that is working. Our thoughts are with their families and their friends at this time. We will not allow such inhumanity to deter us Edward Miliband: Come to think of it, the Prime from building a stable future for the Afghan people. We Minister might have broken a big promise quite recently: have nothing but admiration for the staff of the embassy, immigration down to the tens of thousands—no ifs, no British and Afghan, who work together, at great personal buts. What did he say in his contract with the British risk, to help achieve that. people? He said: This morning I had meetings with ministerial colleagues “If we do not deliver our side of the bargain, vote us out in five and others. In addition to my duties in this House I years’ time.” shall have further such meetings later today. When he said it, did he mean it? The Prime Minister: Yes, and we have cut immigration Robert Flello: I would like to associate myself and my from outside the EU by 24%. With immigration, every constituents with the Prime Minister’s remarks about single step we have taken in the past four years was our brave staff, not just in the embassy in Kabul but, of opposed by the Labour party. What did they do for course, across the world in very dangerous places. 13 years in government? They put immigration up as a The Prime Minister promised to balance the books deliberate act of policy. This Government made promises by 2015 and to cut the debt. Despite punishing the to our pensioners—promises kept; promises on our poorest with cuts, the deficit has barely been touched, NHS—promises kept; and above all, a promise to turn and borrowing has been greater in the last four years our economy around from the mess left by those two on than it was in the previous 13. Does this country not the Front Bench. desperately need a Labour Government? Edward Miliband: So the Prime Minister did mean it: The Prime Minister: We have got the deficit down by throw him out because he broke his promise. What he a third because we have taken tough and difficult decision ought to be saying, but dare not say, is that he made a after tough and difficult decision, and they have all got solemn promise, and he broke it. one thing in common: each and every decision was Let us turn to another one of those big, solemn opposed by Labour. promises. This is what he said to the nurses’ conference just before the last election: Mr Richard Bacon (South Norfolk) (Con): On Monday “I want to tell you what we’re not going to do: there will be no morning at Norwich research park, I thought I heard more of those pointless reorganisations that aim for change but the sound of a cuckoo, which was remarkable since we instead bring chaos.” have not even reached Christmas, let alone spring. Does When he said it, did he mean it? the Prime Minister agree that this may be further evidence of the strength of our long-term economic plan? The Prime Minister: What we have done is seen more doctors, more nurses, more patients treated, but if we The Prime Minister: I was delighted to meet my hon. are on promises, I have a little list. I have a list of the Friend and other Norwich MPs at Norwich research right hon. Gentleman’s promises. Right, here we go. park to talk about the expansion of infrastructure in Mr Speaker, he promised—[Interruption.] However long our country, and particularly the improvements that we it takes. I have all day, and I can tell you, I am looking are going to make to the A47, which will not just help forward to what is coming next, and I think he will be Norwich and Norwich research park but help all of too. He promised detailed plans for a graduate tax. East Anglia right out to Lowestoft. I know how important Where is it? He promised an alternative spending review. it is to make sure that that important part of our country That was in 2010. Where is that? He promised he would also benefits from our long-term economic plan. tell us the list of business people he had dinner with in 295 Oral Answers3 DECEMBER 2014 Oral Answers 296

2011. Where is that one? He promised to stand up to the Edward Miliband: The Prime Minister has failed every unions on public sector pay. When has he ever done test he set himself. The thing about this Prime Minister that? He promised he would not let the unions run the is that he has turned breaking promises into an art Labour party, and they run it more than ever. form. As the election approaches, the thing the British people know about this Prime Minister is that when he Edward Miliband: What the Prime Minister ought to says it, he does not mean it. be saying, but dare not, is that he made a solemn promise of no top-down reorganisation of the NHS, The Prime Minister: What a contrast: this is a Prime and he broke that promise. Minister and this is a Government who have turned our Let us turn to his promise on living standards. The economy around, sorted out our public finances and 2010 Conservative manifesto made this big promise of got the economy growing. No one in this country will ever forget that the Opposition are the people who sold “an economy where…our standard of living...rises steadily.” the gold, who broke the economy and who bankrupted When he said it, did he mean it? the nation; and still they sit there, completely hopeless and unelectable. The Prime Minister: Yes, I meant it, and 26 million people are having their taxes cut, and 3 million people— Q2. [906404] Julian Sturdy (York Outer) (Con): The [Interruption.] city of York is truly benefiting from the Government’s northern-led economic plan. The Government are Mr Speaker: Order. Both the questions and the answers rightly investing in transport infrastructure across must be heard. Yorkshire. With that in mind, will the Prime Minister meet me and a delegation of local businesses to discuss The Prime Minister: Twenty-six million people have their campaign to dual York’s northern ring road, had their taxes cut, and 3 million of the poorest people which, given the high levels of congestion, is seen as a have been taken out of income tax altogether. The serious barrier to further economic growth in our city? minimum wage has been increased for the first time since the right hon. Gentleman’s great recession. Now, The Prime Minister: My hon. Friend is absolutely people who have been in work for a year are seeing a right. I know what a problem that road can be. 4% increase in their pay. They bankrupted our economy. Infrastructure investment does unlock growth. That is We know that “Mrs Brown’s Boys” was a comedy; why, on Monday, we announced the biggest roads “Mr Brown’s Boys” was a tragedy. programme in a generation, including £2.3 billion for major roads in Yorkshire and the north-east. I am very Edward Miliband: The Prime Minister has obviously happy to arrange a meeting between him and the Secretary recently been visiting the David Mellor school of charm. of State for Transport to discuss the matter. He will What he ought to be saying, but dare not, is that he know that we have substantial plans to upgrade the made a solemn promise to improve living standards and Hopgrove junction, where traffic from the northern he has broken it. ring road gets on to the A64. We believe that that will What about his biggest promise of all, which was on make a real difference. the deficit? In October 2010, he promised: “In five years’ time, we will have balanced the books.” Angus Robertson (Moray) (SNP): Does the Prime Minister intend to devolve corporation tax to Northern When he said it, did he mean it? Ireland and Scotland in tandem, or, in contrast with the vow, has he decided to veto the devolution of corporation The Prime Minister: We promised to cut the deficit. It tax to Scotland entirely? is down by a third. In a moment or two, we will see the progress that has been made. Obviously, I cannot reveal The Prime Minister: We are implementing the Smith what is in the Chancellor’s autumn statement, as that commission. That is what we believe should be would not be proper, but I make this prediction— implemented. The Chancellor will set out our position [Interruption.] on Northern Ireland in a moment or two. Let us be absolutely clear about the big differences between Northern Mr Speaker: Order. The answers must be heard. Ireland and Scotland: Northern Ireland has a land border with the Republic and had all the difficulties and The Prime Minister: I simply make this prediction: in troubles— a moment or two, the right hon. Gentleman will be looking as awkward as when he ate that bacon sandwich. Angus Robertson indicated dissent. [Interruption.] Oh yes! If we are talking about predictions, let us remember The Prime Minister: By shaking his head in that way, the right hon. Gentleman’s predictions. He said that our the hon. Gentleman shows how little the Scottish policy would lead to the disappearance of 1 million nationalists care about the rest of our United Kingdom. jobs—wrong. He said that it was a fantasy that the private sector would create the jobs—wrong. [HON. Q3. [906405] John Glen (Salisbury) (Con): Fifty-six MEMBERS: “Wrong!”] He said that we would choke off years ago, Simon Wingfield Digby, the then hon. jobs and growth—[HON.MEMBERS: “Wrong!”] The Member for West Dorset, made the first plea for Opposition told us that there would be a lost decade, improvements to the A303 in this House. Thanks to the that there would be a double-dip recession and that Government’s careful management of the economy, the there would be 1 million more people unemployed. Prime Minister was once again warmly welcomed in They have been wrong on every single economic issue. Wiltshire this week to announce the £1.3 billion 297 Oral Answers3 DECEMBER 2014 Oral Answers 298 investment in the tunnel under Stonehenge. Will he are helping to ensure that millions more of our countrymen reassure the people of the south-west that we will not and women have the dignity and security of a job, and have to wait another 56 years for it to be delivered? the ability to provide for their families. That is what is happening in Britain; the economy has been turned The Prime Minister: I can certainly make that round from the disastrous situation left by the Labour commitment. I was one of a number of people who party, and that is something the whole country can be made their way to Stonehenge this week to see how proud of. important this tunnel will be. It will be at least 1.8 miles and is part of an overall plan to create that expressway Mr Bernard Jenkin (Harwich and North Essex) (Con): all the way between the M3 and M5 and down into May I commend to my right hon. Friend the debate in Cornwall, to ensure that we improve that vital road Westminster Hall this morning, which was kicked off network. As for Stonehenge, the tunnel will ensure that by my hon. Friend the Member for Meon Valley (George this extraordinary monument has the setting and attention Hollingbery), on the catastrophic decline of sea bass it deserves. stocks across northern Europe? We heard that successive Governments have been trying to persuade the EU for Q4. [906406] Graham Jones (Hyndburn) (Lab): A decades to address that problem. Will the Prime Minister Haslingden constituent, 20-year-old Sophie Lancaster, undertake to put the Government’s entire weight into was brutally murdered in 2007, kicked to death in a addressing the collapse of sea bass stocks when considering park by a group of males simply for being part of a European Union fisheries policy this month? sub-culture—a goth. She was a victim of hate crime, and the implications of that tragedy continue today. The Prime Minister: My hon. Friend raises an important Will the Prime Minister meet the Sophie Lancaster point about sea bass stocks but also about fish stocks Foundation to see its excellent work, and do everything more broadly. Under this Government there have been he can to ensure the clear message that there are no improvements in the way that fisheries policies work in exceptions to hate crime? the EU, with a greater level of devolution. We need to keep pushing that forward to ensure that our fisheries The Prime Minister: I remember that tragic case and and stocks can recover, as that is the only way to ensure the appalling way that that girl was treated and beaten. I a long-term, sustainable industry. am happy to see what meeting I can arrange to ensure that the agenda of how we combat hate crime in all its Q6. [906408] Mrs Mary Glindon (North Tyneside) (Lab): forms is properly addressed in our country. Will the Prime Minister please explain why the Government have borrowed almost £4 billion more this Mike Crockart (Edinburgh West) (LD): This week year than at the same time last year? Does he regret his 40 banks and building societies issued a joint declaration firm promise to balance the books by next May? to deal with the multimillion pound crimes of vishing and courier fraud, when people are called by criminals The Prime Minister: This Government have had to posing as police officers or bank employees and asked borrow a lot of money because we inherited the biggest to hand over bank cards and pin numbers to assist budget deficit in the world. [Interruption.] Yes, it was fraud inquiries. I have worked with Age UK, the Alzheimer’s 11% of our GDP when we came to government. We society, and call blocker manufacturers to build a scheme have already cut it by a third, and we will hear in a to protect the most vulnerable in society from that moment or two how we are now getting on. I would like crime, but Ministers at the Department for Culture, to highlight something the shadow Chancellor said this Media and Sport are too busy to discuss it. It seems that week. He said that he would be tough on the deficit and they are able to block my nuisance calls, so will the tough on the causes of the deficit. As he is one of the Prime Minister help the vulnerable to do the same? causes of the deficit, I think we have just found the first ever example of political masosadism. [Interruption.] The Prime Minister: I will certainly ensure that DCMS Ministers meet the hon. Gentleman if necessary, and Mr Speaker: Order. We all know what the Prime the group he is talking about. It is important to deal Minister meant. with all such issues, wherever they come from. Daniel Kawczynski (Shrewsbury and Atcham) (Con) Q5. [906407] Rushanara Ali (Bethnal Green and Bow) Thank you very much, Mr Speaker. [Interruption.] (Lab): The 2010 Conservative manifesto promised an economy in which not just our standard of living, but Mr Speaker: Order. I understand that the House gets everyone’s quality of life would rise steadily and excited, but Mr Kawczynski will scarcely be able to hear sustainably. Why in the last year have wages grown by himself, let alone will anybody else have the chance to the smallest amount since records began? hear him. Let the hon. Gentleman be heard.

The Prime Minister: I am delighted that after four Daniel Kawczynski: Thank you, Mr Speaker. and a half years, the Labour party finally wants to I would like to thank the Prime Minister sincerely for debate the economy at Prime Minister’s questions. This all the help he has given to all Shropshire MPs in is a golden day for us; it means we can talk about the securing our direct train service to Shrewsbury, which 1.8 million jobs created and the fact that those who have starts later this month. It is a vital boost for tourism been in work for a year are seeing their pay go up by 4%. and inward business investment in Shropshire. Will he It means that we can talk about how we have lifted the take advantage of our now being connected to London, threshold for the basic rate of income tax to £10,500, and visit Shrewsbury and the wonderful new university and taken 3 million people out of tax. All those things we are creating in our beautiful town? 299 Oral Answers3 DECEMBER 2014 Oral Answers 300

The Prime Minister: I look forward to the opportunity The Prime Minister: Oh yes I can. We inherited the of visiting Shrewsbury if I can. biggest budget deficit in Britain’s peacetime history. The Let me be clear: I meant to say, “masochism”. I am Labour party had the longest and deepest recession in a sorry, Mr Speaker. Normally I say that the shadow century. That was what we were delivered. Since then, Chancellor likes to dish it out but can’t take it, but after we have turned the economy round; we have 2 million this quote I think he obviously quite likes taking it as private sector jobs; we have cut the deficit; 760,000 more well. So there we are. [Laughter.] We have learned a lot businesses are operating in our country; and we have of interesting things today. the fastest-growing economy of any G7 or major European country. That is an economic record that no Labour What is happening in Shrewsbury is magnificent. Government could ever match. There have been improvements to 400 stations across the country, including Kings Cross. Q9. [906411] Sir Peter Luff (Mid Worcestershire) (Con): Droitwich Spa boxing academy, run entirely by volunteers, Q7. [906409] Stephen Timms (East Ham) (Lab): The trains talented boxers and provides a highly valued Prime Minister said that his economic policy would community resource, turning round the lives of many eradicate the deficit in this Parliament. All he can claim disruptive and troubled young people. It is a shining today is that after four years it came down by a third, example of the big society. Does the Prime Minister but in the past few months it has been going up. Will he understand my deep concern that the blinkered decision accept that the big fall in real wages since the election is of Her Majesty’s Revenue and Customs to insist on a a large part of the explanation for why his economic draconian interpretation of the VAT rules for its new policy has fallen so far short on its central objective? building will result in the academy’s closure?

The Prime Minister: After four years of never mentioning The Prime Minister: First, I know of the important the deficit and opposing every single spending cut we job done by the Droitwich Spa boxing academy, which have had to make, there seems to have been a Damascus-like is run entirely by volunteers, and I know how hard my conversion—Labour Members are all suddenly interested hon. Friend works for his constituents. We will look in the deficit. Let me give the right hon. Gentleman a carefully at this case. As he might know, unfortunately bit of a lesson. Yes, we have had to make very difficult the zero rating of VAT on construction services is decisions, cutting some Government Departments and limited and does not apply to buildings used as sports some by as much as 20%, but every single decision was clubs, but HMRC is willing to discuss with the owners opposed by the Labour party. In terms of what is flexible arrangements for paying the VAT through its happening on wages, as I have just said, the recent time to pay scheme. I will ensure that discussions take figures out show that people who have been in work for place rapidly between him and HMRC to see what can more than a year are seeing pay increases of 4%. We are be done. helping everyone in work by cutting their taxes. In the end, the only way to sustainably raise living standards is Q10. [906412] Seema Malhotra (Feltham and Heston) to grow the economy, create jobs and cut taxes— (Lab/Co-op): Cancer waits for no one and, with three things we are doing; three things Labour would fast-growing cancers in particular, time is of the never do. essence. The cancer treatment target in England has been missed for nine months and more than 15,000 Q8. [906410] Charlie Elphicke (Dover) (Con): This patients are waiting more than two months to start morning, more people went to work than ever before in treatment. Does this not prove, yet again, that you the history of our nation. Is the Prime Minister aware cannot trust the Tories with the NHS? that in Dover and Deal unemployment has fallen by 37%, thanks to our welfare reforms and thanks to our The Prime Minister: I share the hon. Lady’s concern long-term economic plan? Why would we ever return to about how rapid our cancer treatment must be, which is where we were less than five short years ago? why I am proud that under this Government an extra 460,000 people per year are getting cancer treatment, The Prime Minister: My hon. Friend is absolutely are getting referrals. There are about seven key cancer right. In Dover, the claimant count is down by 24% since targets, and we are meeting all but one of them. That is the election. Across the south-east, the number of people quite a contrast with Wales, where the Labour party has employed is up by almost a quarter of a million. We been in control for the last four years and where it has have record levels of employment. Anyone getting a job not met a cancer target since 2008. is someone else who has the security and stability to provide for their family. At the same time as this increase Seema Malhotra indicated dissent. in employment, we have also seen the pay gap between men and women, particularly under 40, reduced to its The Prime Minister: It is no good the hon. Lady lowest ever level. We are seeing a strong and solid shaking her head. Her party is in charge of the NHS in recovery. As the Chancellor will explain in a moment, Wales, and it is letting down cancer patients day after there is no room for complacency. We have to stick to day. the long-term economic plan and deliver it. Greg Mulholland (Leeds North West) (LD): Following Mr Dennis Skinner (Bolsover) (Lab): Is the Prime the threat of a legal challenge, NHS England has scrapped Minister proud that the Government have added its processes for approving drugs for rare conditions, £430 billion to the national debt—more than all the which is affecting 200 children in the country, including Labour Chancellors of the Exchequer this century? He six-year-old Sam, in my constituency, who has Morquio. cannot blame Labour for that figure. Will the Prime Minister today instruct the Health Secretary 301 Oral Answers3 DECEMBER 2014 Oral Answers 302 to re-establish the highly specialised commissioning The Prime Minister: I am very happy to look at what service so that we can approve these drugs and ensure the hon. Lady says. What we are seeing are more railway that children get the drugs they need immediately, before lines opening, more stations opening and more railways a new process is put in place? being electrified. In the entire period of the last Labour Government, I think they electrified just 13 miles of The Prime Minister: I am happy to discuss that issue track—an absolutely pathetic record for a Government with the Health Secretary. As the hon. Gentleman who had 13 years to do something about it. We now knows, we have a procedure for licensing drugs and, for have the biggest road programme since the 1970s, the cancer drugs, we have the additional benefits of the biggest rail investment programme since the Victorians cancer drugs fund, but I am happy to discuss his point and, under this Government, stations, lines and with the Health Secretary. electrification are all taking place.

Q11. [906413] Nic Dakin (Scunthorpe) (Lab): The Q13. [906415] Bill Wiggin (North Herefordshire) (Con): Prime Minister promised the British people that this Will my right hon. Friend meet me to help get more Government would eliminate the deficit and significantly beds for Hereford hospital? Will he send a Minister to reduce immigration. Why has he failed the British people meet the magnificent staff and, possibly, Welsh patients on both counts? who have acquired addresses in England so that they can access life-saving cancer care drugs that are not available under the Labour-run Welsh NHS? The Prime Minister: To sum up, the Labour party’s approach seems to be this: “We created an enormous problem, and we have come here today to complain that The Prime Minister: I am sure my hon. Friend will you have not cleared it up fast enough.” That is the welcome the £2 billion for the NHS in England, which extent of Labour Members’ intellectual analysis of Britain’s the Chancellor announced at the weekend. That money problems—it is quite ridiculous, given that Labour left will go directly to the front line. Obviously, we want to us with the biggest budget deficit since the war. We have see continued improvements at the Hereford hospital. started to get on top of it, and we will make more There are pressures from people from Wales crossing progress. the border and wanting to use services in England. That is why it is so important that the Welsh NHS has the improvements that we have been talking about. As to Mary Macleod (Brentford and Isleworth) (Con): Given meetings and visits to my hon. Friend’s hospital, I will the record number of small businesses today in Chiswick, look very carefully at what we can do to help. Brentford, Isleworth and Hounslow; given that small and medium-sized businesses represent 99% of the business community; and given that Saturday is small business Q14. [906416] Kevin Brennan (Cardiff West) (Lab): Saturday, will my right hon. Friend join me in encouraging Cutting net migration to tens of thousands, reducing everyone to shop small, shop local on Saturday, and will spending on welfare and, yes, eradicating the deficit by he make small businesses a priority in our long-term the end of this Parliament formed the triple crown of economic plan? the Prime Minister’s promises to the British people. How does it feel as Prime Minister when you are once, twice, three times a failure? The Prime Minister: I absolutely agree with my hon. Friend. We now see a record number of small businesses in our country—a total increase of 760,000 over this The Prime Minister: I will tell the hon. Gentleman Parliament. Small business Saturday is an excellent how it feels to lead a Government who have created event, by which we can boost small businesses and draw 2 million private sector jobs. I will tell him how it feels attention to the work they do. We will kick-start this to lead a Government who have turned round the event on Friday with a small business fair in Downing British economy, and I will tell him how it feels to have street. Now is a good moment to make sure that small an economy in Britain in which businesses right around businesses are benefiting from all the changes that we the world want to invest. That is the record of this have made, such as the cut in the jobs tax of £2,000 for Government: recovering from the complete shambles businesses and charities, the abolition of national insurance and mess that the hon. Gentleman left when he was part contributions for under-21-year-olds when they employ of the previous Government. them, the doubling of the small business rate relief and, of course, the cutting of corporation tax for small Steve Brine (Winchester) (Con): As he may well business as well. This Government have a very strong remember, the Prime Minister experienced this summer record for saying to small business, “We respect what the congestion regularly faced by my constituents at you do in creating the jobs, the wealth and the prosperity junction 9 of the M3 motorway. May I thank him on that our country needs”. behalf of the people I represent for the comprehensive package of improvements announced by the Transport Q12. [906414] Rosie Cooper (West Lancashire) (Lab): Secretary earlier this week? Does he share my view that Skelmersdale in my constituency is the second largest my constituents can benefit from this kind of investment town in the north-west without a railway station—a only because we have a taken the decisions to get our station that would bring social and economic benefits economy in a place that we can? to the town, as we have heard happened in Shrewsbury. As the Prime Minister is in spending mood, albeit a The Prime Minister: My hon. Friend is absolutely little bit further south, I wonder whether he could give right, and I know about the importance of the M3 the people of Skelmersdale an early Christmas present improvements that he mentions. The fact is that all with the promise of a railway station. these things—whether it be improving our road network, 303 Oral Answers3 DECEMBER 2014 Oral Answers 304 investing in our NHS, building new railway stations and Q15. [906417] Teresa Pearce (Erith and Thamesmead) electrifying railway lines—can be done only if we have a (Lab): In the past four years the NHS has spent more successful and growing economy, a long-term economic than £5 billion on agency staff, about 20% of which plan and a demonstration that the public finances are will have gone into the pockets of the agencies rather under control. With this Chancellor and with this than those of NHS staff. How many full-time Government, we have all of those things in place. That permanent nurses would that have paid for? is why we have been able over the previous days to talk about improving our NHS, investing in our transport The Prime Minister: What we have in the NHS under infrastructure, building the flood defences that this this Government are £1,300 extra nurses and 8,300 extra country needs and putting in place all the infrastructure— doctors, and because we have cut the bureaucracy, we whether it be ports, airports or energy—that a modern have managed to remove 21,000 bureaucrats. No one wants economy needs in order to sustain a level of growth that to see extensive use of agency staff. All well-run hospitals can deliver the prosperity and security that the British will have fewer agency staff and more permanent staff: people deserve. that is what is happening under this Government. 305 3 DECEMBER 2014 Autumn Statement 306

Autumn Statement is stagnating, and the geopolitical risks are rising. I can tell the House that the OBR has therefore revised down 12.35 pm its forecast for global growth this year and in every year. It notes that the slowdown is particularly acute in our The Chancellor of the Exchequer (Mr George Osborne): main export markets, such as Europe, where growth is a Four years ago, in the first autumn statement of this full 1% lower this year than previously forecast. It Parliament, I presented the accounts of an economy in makes it even more imperative that we connect British crisis. Today, in the last autumn statement of this firms to the faster growing emerging economies of Parliament, I present a forecast which shows that the Africa, Asia and south America. Today I am providing United Kingdom is the fastest-growing major economy a £45 million package to do that and to provide new in the world. Back then, Britain was on the brink. support to first-time exporters. Today, against a difficult global backdrop, I can report higher growth, lower unemployment, falling inflation, As one of the most open trading economies in the and a deficit that is falling too. Today, the deficit is half world, with a large financial sector, Britain cannot be what we inherited. Our long-term economic plan is immune to the risks in the global economy, but nor are working. we powerless—provided we go on working through our Now, Britain faces a choice. Do we squander the plan to put our own house in order. economic security that we have gained, and go back to That brings me to today’s forecast. In the Budget, I the disastrous decisions on spending, borrowing and reported that the OBR had revised up its forecasts for welfare that got us into this mess, or do we finish the growth this year. A year ago, we expected GDP to grow job, and go on building the secure economy that works by 2.4%. In March we expected 2.7%. Today, the British for everyone? I say: we stay the course. We stay on economy is forecast to grow by 3%. Over the last year course for prosperity. we have grown two and half times faster than Germany; Today, we do not shy away from the problems that over three times faster than the eurozone; and over remain unresolved in the British economy. Although seven times faster than France. I think we can safely the deficit is falling, it remains too high, so the measures reject the advice of those in this House who told us on that I announce today are not a net giveaway, but the steps of the Élysée palace that we should be doing to actually tighten the public finances a little. I could have Britain what has been done to France. eased up on our determination to deal with our debts; I Growth in the UK next year is also forecast a little have not. higher at 2.4%, with quarterly growth moderating as it Although business investment is rising strongly, we returns to trend, then 2.2% in 2016, 2.4% the year after, know that there is still much more to do on productivity, then 2.3% in 2018 and 2019, and the growth we are now so today we boost our skills, our exports, our science seeing is more balanced. Manufacturing is growing and our infrastructure. Although employment is at a faster than any other sector, and investment is set to be record high, we must never give up on the task of up 11% this year—growing faster in the UK than in any finding work for all young people, so today we move other major advanced economy. further towards full employment by supporting the This balanced growth is creating jobs, too, with a businesses that create jobs and apprenticeships. For record number in work. At the Budget, the OBR expected decades our economy has been too unbalanced, so we that over the last year employment would rise by 265,000. do more now to build the northern powerhouse. And Today, I can tell the House that it doubles that number. today we back aspiration—the aspiration to save, to Over the last year, half a million new jobs have been work, and to own your own home—in stark contrast to created. In March, it forecast that in the first three those who would hit people’s pensions and jobs and quarters of the year the number claiming unemployment homes with higher taxes, for that is an approach that we benefit would fall by 7%. Today, it says that it actually entirely reject. Instead, we support people who want to fell by 23%. The number of young people on long-term work hard and get on, and it is for their sakes that we unemployment benefit has almost halved in the last resolve to stay on course for prosperity. year alone. Unemployment is revised down in every I now turn to the report from the Office for Budget single year of the OBR forecast, falling from the 8% we Responsibility. Let me again thank Robert Chote and inherited to 5.4% next year, before settling at 5.3%. his team for their hard work, and for restoring integrity On average, for every day this Government have been and independence to our country’s economic forecasts. in office, 1,000 new jobs have been created, 1,000 new Since the Budget, new international statistical standards opportunities for people, new economic security for have changed the assessment of the British economy in 1,000 families every single day.Britain’s long-term economic recent years. We now know that, contrary to claims that plan is working. were made at the time, there was no recession in this Parliament, and no double dip. Indeed, the only recession In response to the caricature that some like to draw—that was the great recession under the last Labour Government. these jobs are being created only in London, that they We also know that the economy has grown faster than are part time with women losing out—I say, look at the previously reported. It is up by more than 8% over the facts. How many of the jobs being created are full-time? current Parliament: that is the third fastest growth in Eighty-five per cent. Where are the jobs being created any major advanced economy since 2010. We know, fastest right now? In Scotland and in the north of too, that growth has been more balanced. We were told England. What is happening to the gender pay gap? It that business investment had risen by 4% over this has just fallen to its lowest level in the entire history of Parliament; in fact, it has risen by 27%. this country. That is progressive politics in action. That is what we know about the recent past. Let us Regular earnings growth is now faster than inflation. turn to the future. The warning lights are flashing over For those in full-time work for over a year, earnings the global economy. Japan is in recession, the eurozone grew 4% over the last year. The compositional effect of 307 Autumn Statement3 DECEMBER 2014 Autumn Statement 308 many more people finding work, particularly young in 2009-10 to 5% this year. The deficit is no longer down people, is weighing down on overall average earnings, by a third, but is now cut in half. It is still too high, but but the OBR today predicts that “meaningful real wage with our plan it falls again to 4% next year, then 2.1%, growth” will pick up through next year and grow above then 0.7% before we move into surpluses of 0.2% and inflation for the next five years. Indeed, I can tell the 1% of GDP. The structural deficit also falls and moves House that GDP per capita has grown faster on average into surplus at the same pace over the next five years, as in this Parliament than over the last two Parliaments forecast at the Budget. combined. We continue to meet the debt mandate a year late and Living standards are also supported by our robust the fiscal mandate two years early. Again, because of monetary policy arrangements with the Bank of England. the statistical revisions and the reclassification of Network Today, there is welcome news that the OBR has significantly Rail—given that Labour tried to put it off balance revised down its forecast for inflation: it is expected to sheet—the OBR has given us a like-for-like comparison be down to 1.5% this year, 1.2% next year and 1.7% the on debt as a share of GDP. On the new basis, it is 80.4% year after, before it returns to target. So we have lower this year, next year it peaks at 81.1% —half a per cent. inflation, lower unemployment and higher growth. lower than previously forecast at the Budget—and it is That brings me to the forecasts for debt and deficit. then lower in every subsequent year, at 80.7% in 2016-17, There are those in this House who have been predicting 78.8% the year after, then 76.2%, before reaching 72.8% from the Opposition Dispatch Box in recent weeks that in 2019-20. Again, this is less than was forecast at the I would have to announce today that the deficit was Budget. rising and that borrowing this year would be higher Borrowing is falling. The deficit is down this year to than last year. We discover today—I am afraid not for half what we inherited. Debt is falling in the same year the first time—that their predictions are wrong: the predicted, and lower in every year thereafter. There will deficit is falling this year and every year, and, not only be a surplus that is higher and by the end of the period that, but in the final four years of the forecast, borrowing worth £23 billion. Britain is back living within its means. is actually lower than predicted in the Budget. Our long-term economic plan is on course. [Interruption.] The Office for National Statistics has The House will want to know why the public finance made revisions to the way the national accounts are numbers are much better than some were predicting, measured—[Interruption.]—and one of the advantages even though tax receipts have deteriorated. The answer of having created an independent OBR is that it has is that we cannot look at taxes alone; we have to look at ensured that the figures presented today are comparable spending, too. As has been widely reported, tax receipts on a like-for-like basis with the forecast made in the have not been rising as quickly as the OBR had previously Budget. [Interruption.] On this revised basis, the forecast predicted. The OBR now forecasts that revenues will be at the Budget would have shown borrowing falling from £23 billion lower by 2017-18. However, that is more the £150 billion we inherited to £99.3 billion last year, than offset by three things. First, we are paying less in £86.4 billion this year, £68.3 billion next year, then welfare and saving money on public service pensions £41.5 billion, £15.8 billion, and then a small surplus of because of lower inflation and more people being in £3.7 billion in 2018-19. [Interruption.] That is the Budget work. That saves £4 billion a year. forecast. [Interruption.] Today’s forecast shows borrowing falling from £97.5 billion last year to £91.3 billion this Secondly, the revisions to our national accounts have year, then £75.9 billion next year, then £40.9 billion, slightly increased the measured rate of spending cuts in £14.5 billion, and then a surplus of £4 billion in 2018-19. this Parliament. We have a choice: we can ease up, or we So borrowing falls every year. It falls slightly less than can continue with our plans. Our policy of continuing expected in the first two years, but then falls slightly the spending cuts in the first two full years of the next more than expected in the four years after that. Parliament, at the same pace as we achieved in this [Interruption.] We end in a marginally stronger position Parliament, now produces £4 billion less spending. Thirdly, than expected at the Budget, and I can tell the House and crucially, the interest we pay on our national debt is that by 2019-20 Britain is now predicted to have a £16 billion lower in that year. That is, by a large margin, —[Interruption.] the biggest saving and demonstrates the value of our fiscal credibility around the world. Some have pointed Mr Speaker: Order. There is now excessive noise in to lower tax receipts and put forward policies for higher the Chamber. The Chancellor should not have to shout taxes. I prefer lower tax receipts offset by lower debt in order to make himself heard, and to some degree he interest payments, and that is what we are seeing today. is having to do so at the moment, and that is not right. I do not hide from the House that in the coming years The House knows the track record: I facilitate the there are going to have to be very substantial savings in fullest possible questioning of the Chancellor—always public spending. Next week we will publish a new have done, always will do—but colleagues must, please, charter for budget responsibility that will reinforce our give the Chancellor his head. commitment to finish the job in the next Parliament, and we will ask the House to vote on it in the new year. Mr Osborne: I can tell the House that by 2019-20 However, no charter, valuable as it is, can be a substitute Britain is now predicted to have a surplus of £23 billion— for the hard work of identifying real savings in the cost out of the red and into the black for the first time in a of government and delivering them in practice. That is generation, a country that inspires confidence around what we have done in this Parliament, and it is what we the world because it seeks to live within its means. will have to do in the next. As a percentage of GDP, today the deficit is also The work starts with our spending plans for 2015-16, forecast to fall this year, down by 0.6% of GDP—down which save £13.6 billion. We have published the detailed from what the OBR describes today in its own report as and specific departmental proposals that will achieve “the post-war record deficit of 10.2% of GDP” them. There will be two further years where decisions 309 Autumn Statement3 DECEMBER 2014 Autumn Statement 310

[Mr George Osborne] with no prospect of work. Total welfare spending is now set to be £1 billion a year lower than forecast at on this scale will be required and, as I have said before, the Budget and it will go on falling as a share of our we are going to have to go on controlling spending after GDP. And, as I have made clear, I believe that we need those years if we want to have a surplus and keep it. Of to freeze working-age benefits for two years, saving course, people are already saying it will be impossible to billions more. achieve those levels of savings. We heard exactly the Decisions to control public spending are never easy, same thing in 2010, often from exactly the same people. but the impact on people’s lives when economic stability In fact, we have come in under budget every year of this is lost is far, far greater. I have always believed that we Parliament. This year I can confirm that we will be should be straight about what is required to restore spending £10 billion less than set out in our original stability and what is required to stay on course. Our spending plans. task is made easier by the deal we secured for this There are those who say we should cut even faster, country when we got the European Union budget cut. and those who say we should cut more slowly. But we Some people claimed that our payments to the European have got the pace right, as is clearly demonstrated by Union would go up this year. Instead, I can confirm the fact that our economy is growing faster than almost that the OBR’s forecast today shows Britain’s net payments any other. And because of careful management, we can to the EU falling by around £1 billion for this year and afford to put part of that underspend money into our next year, and falling in real terms over the next five national health service to cope with the pressures it years. That is the dividend we receive thanks to a Prime faces: £2 billion every year to the front line of the Minister who fights hard for our national financial NHS—not money that busts our plans, but extra money interest in Brussels. that is available because we have a plan. Instead of Another bill that has gone down is the cost of our returning the foreign exchange fines paid by the banks overseas military operations. The end of our operations to the City, as happened under the previous Government, in Afghanistan allows us to save an additional £200 million we are using that windfall for a £1.2 billion investment this year from the special military reserve. I join the rest in GP services across the UK. That is a down-payment of the House in saluting the brave men and women of on the NHS’s own plan, proving definitively for anyone our armed services who for more than a decade have in any doubt that we cannot have a strong NHS without risked their lives for our security in Iraq and Afghanistan. a strong economy. I can also tell the House that we Even as we speak, they are tackling the horrific Ebola will help with the employment of carers, who do so virus in west Africa, a fight that reminds us all of the much, by extending the £2,000 employment allowance value of Britain’s commitment to 0.7% in development to include them. aid. Today I am extending our inheritance tax exemption We have shown in this Parliament that we can deliver to cover our aid workers who lose their lives in dealing spending reductions without damaging front-line public with humanitarian emergencies. LIBOR fines will continue services if we are prepared to undertake reform. Crime to support our military and emergency service charities is down. Satisfaction with local government services is with support for our armed services benevolent charities up. Savings and reform—and we will do exactly the and the Ghurkhas and £10 million for veterans with same again. Continuing to reduce departmental spending hearing problems. We will ensure that the first world in the first two years of the next Parliament would war continues to be properly commemorated, and this mean at least £15 billion off Whitehall budgets. Our morning I have announced we will repay the entire control of public sector pay in the past four years has outstanding national debt incurred to fight the first delivered £12 billion of savings. By continuing to restrain world war. public sector pay, we expect to deliver commensurate We will extend the cathedral renovation fund to cover savings in the next Parliament until we have dealt with repairs to our country’s churches. Thanks to the brilliant the deficit. Today I can confirm that we are committing campaigns run by my hon. Friends the Members for to complete the public service pension reforms proposed Filton and Bradley Stoke (Jack Lopresti) and for Bristol by Lord Hutton, bringing total savings of £1.3 billion a North West (Charlotte Leslie) and others, we will use year. Administration costs in Whitehall are already the LIBOR money for new helicopters for the Great down 40% over this Parliament. Today, the Minister for Western air ambulance, and the Kent, Surrey and Sussex the Cabinet Office and Paymaster General, my right air ambulance, too. I will go further and refund VAT for hon. Friend the Member for Horsham (Mr Maude), is our search and rescue and air ambulance organisations publishing a plan for a further £10 billion of efficiencies. across the UK. Our hospice charities also make an I am also confident that in the next Parliament we enormous contribution to our communities. They have can continue to crack down on tax avoidance and long been subject to unfair rules that force them to pay evasion, and aggressive tax planning. Doing so at the VAT, when the NHS does not. I am today refunding the same rate as in this Parliament would raise at least VAT that these hospice charities incur. another £5 billion, and today I commit to delivering that. Then there is the new welfare cap that we have I turn now from those who have paid too much tax to introduced to control the one sixth of public spending some of those who have paid too little. First, we will that was subject to absolutely no control at all. The make sure that big multinational businesses pay their OBR today reports that fair share. Some of the largest companies in the world, including those in the tech sector, use elaborate structures “the Government is on track to meet the welfare cap commitment”. to avoid paying taxes. Today, I am introducing a 25% tax Today we undertake further steps to control benefit on profits generated by multinationals from economic spending by freezing universal credit work allowances activity here in the UK which they then artificially shift for a further year, cutting tax credits when overpayments out of the country; that is not fair to other British firms are certain, and ending unemployment benefits for migrants and it is not fair to the British people either—today, we 311 Autumn Statement3 DECEMBER 2014 Autumn Statement 312 are putting a stop to it. My message is consistent and entrepreneurs’ relief and the social investment tax relief. clear: low taxes; but low taxes that will be paid. Britain We will accept almost all the recommendations of the has led the world on this agenda and we do so again Office of Tax Simplification to reduce the administrative today. This new diverted profits tax will raise more than burden on firms, and I thank Michael Jack and John £1 billion over the next five years. Whiting for their work. Secondly, I am taking action today to make sure that Our tax breaks have ushered in a golden age for our banks pay their fair share, too. Under the rules we Britain’s creative industries as well. Today, we will extend inherited, banks can offset all their losses from the our new theatre tax break to orchestras; and we will financial crisis against tax on profits for years to come. help one area of television production that has been in Some banks would not be paying tax for 15 or 20 years, decline, with a new children’s television credit, alongside which is totally unacceptable. The banks got public our new animation credit. I know that the whole House support in the crisis and they should now support the has been saddened to hear that Wallace and Gromit public in the recovery. I am today limiting the amount may no longer be produced because the man behind of profit in established banks that can be offset by Wallace’s voice has retired, but after next May I am sure losses carried forward to 50%, and delaying relief on the whole House will unite behind a suitable and by bad debts, which together will mean that banks contribute then available candidate. almost £4 billion more in tax over the next five years. We also want to help British businesses do more We will also put in place internationally recognised research and development—that is crucial to our measures on hybrids and the reporting of tax by country. productivity. Today, I am increasing the R and D tax That is multinationals and banks paying their fair credit for small and medium companies to 230% and share, and so should people aggressively trying to avoid the credit for larger firms to 11%. This Government their tax—that is the third step. I am taking measures to have repeatedly helped small business deal with the prevent the disguising of fee income by investment burden of business rates and we do so again today. We managers; the avoidance of tax through special purpose will double small business rate relief for yet another share schemes, miscellaneous losses and payments of year. The last Government were going to close it, but it benefits in lieu of salary; the avoidance of stamp duty benefits half a million firms and means a third of a on takeovers; and unfair benefits from the transfer of million firms pay no rates, and we are going to continue some intangible assets on incorporation. Those measures to fund it. I will also continue to cap the inflation-linked and others set out in the document raise £2.8 billion. increase in business rates at 2%. I am also announcing a We are also consulting on other measures, including the full review of the structure of business rates, and I urge use of so called “umbrella companies” to deprive people business groups to engage with us on that. Last year, to of basic employment rights such as the minimum wage, help our high street shops, pubs and cafes, I introduced and, as a result, to avoid tax. a new £1,000 discount on their rates. With the brilliant small business Saturday this weekend, I am increasing Fourthly, I want to preserve the non-dom status that that help for the high street by 50%, to £1,500 next year. makes our country attractive, but I want these people to The fall in the global oil price has meant a welcome pay a fair contribution while having certainty about boost to much of the British economy and to families. their future arrangements. In the next Parliament, the There is record investment this year in the North sea, £30,000 annual charge will remain unchanged, but those but the lower oil price clearly presents a challenge to who have been here for 12 of the last 14 years will see this vital industry. My right hon. Friend the Chief their payment rise to £60,000; and I am introducing a Secretary to the Treasury will set out our full proposals new £90,000 charge for those resident in this country for in Aberdeen tomorrow, but I can tell the House today 17 of the past 20 years. To tackle the continued use of that we will go ahead with an immediate reduction in enveloped properties to avoid stamp duty, I am increasing the rate of the supplementary charge from 32% to 30%; the new annual charge by 50% above inflation on properties we will expand the ring-fenced expenditure supplement worth over £2 million. All these tax measures I have from six to 10 years; and we are introducing, with announced amount to £9 billion over the next five years immediate effect, a new cluster area allowance. That The distributional analysis the Treasury publishes today demonstrates our commitment to the tens of thousands shows that the decisions across this Parliament mean of jobs that depend on this great British industry. that the rich are making the biggest contribution to Despite falling fuel prices, let me make this absolutely deficit reduction. In fact, the net contribution of the clear: we have cut fuel duty and we will keep it frozen—with richest 20% will be larger than that of the remaining my hon. Friend the Member for Harlow (Robert Halfon) 80% put together, proving that we are all in this together. sitting right behind me, I would not dare do anything We will make further reductions in Government spending else. Just as we demand that falls in oil prices should be and welfare, and we will make sure taxes are paid, but passed on to people at the pumps, other fuel price ultimately our future living standards depend on Britain surcharges should also come down. We are going to earning its way in the world, so we must increase our require airlines to list the charges separately from the productivity. Today, we take steps to back business, taxes on tickets, but I also want to reduce the cost of support science and invest in infrastructure. This those tickets for families directly. My hon. Friends the Government have succeeded in making Britain the most Members for Altrincham and Sale West (Mr Brady) entrepreneurial economy in Europe, and today we want and for North West Leicestershire (Andrew Bridgen), to go further. To ensure that our growing smaller businesses and many others, have asked me to help reduce air have access to credit, we will expand the British business passenger duty for children on economy flights, so from bank and act to encourage peer-to-peer lending. With 1 May next year APD for children under 12 will be the Governor of the Bank of England, I am extending abolished. I will go further than they asked: from the the funding for lending scheme by a further year and following year, we will get rid of APD for children focusing it exclusively on smaller firms. We will strengthen under 16 altogether. 313 Autumn Statement3 DECEMBER 2014 Autumn Statement 314

[Mr George Osborne] When I set out the ingredients of a northern powerhouse, I promised to make progress. Today, I deliver. A few Improving productivity for all businesses also demands months ago, there were no proposals for major scientific a major investment in our nation’s infrastructure. Because institutions in the north of England. Today, we commit we have controlled our day-to-day spending, I can to a massive quarter of a billion investment in a new Sir confirm that we will invest more as a share of our GDP Henry Royce Institute for advanced materials science in over this Parliament and the next than was achieved Manchester, with branches in Leeds, Liverpool and under the whole period of the last Labour Government. Sheffield. We back the brilliant work on ageing being This week we have set out plans for the biggest road conducted at Newcastle university, and big data computing building programme for a generation. We have committed at Hartree. billions to our flood defences, and today I take forward We are also committing to the industry of the north, the recommendation of my hon. Friend the Member for with investment in new high-value manufacturing research. Waveney (Peter Aldous) and expand tax relief on business We are supporting new academy schools, and we are investment in those flood defences, too. It is all brought announcing a new sovereign wealth fund for the north together in the national infrastructure plan, which is of England so that the shale gas resources of the north now helping our country attract more investment from are used to invest in the future of the north. The around the world than any other single country in cultural life of the north will get a boost too, including a Europe. major new theatre space in Manchester. Manchester Britain is raising its ambition, and nowhere is that city council proposes to call it the Factory Manchester. clearer than in our commitment to science. It is a Anyone who is a child of the ‘80s will think that that is a personal priority of mine as Chancellor. Scientific advance great idea. is a human endeavour worthy of support in its own Six months ago, people would have said it was completely right, but it is also crucial to our economic future. When impossible to get the 10 local authorities of Greater this Government came into office, the UK was ranked Manchester to come together with the Government to 14th in the global innovation index—today, we are agree a major devolution of power to the city and the ranked second. But we aim to be the best. A year ago, I creation of a new directly elected mayor. We have abolished the arbitrary cap on the total number of delivered in Manchester, and my door is open to other undergraduates at our universities. Today, I am going to cities who want to follow its cross-party lead. I said that revolutionise the support for our postgraduate students, I had put the northern powerhouse at the heart of this too. Until now, there has been almost no financial autumn statement, and with billions of investment in support available, and the up-front costs of postgraduate science, transport and new civic power in our great degrees deter bright students from poorer backgrounds. northern cities, that is exactly what we have done this Today, across all disciplines, we will make Government- week. We show today what can be achieved if we have backed student loans of up to £10,000 available, for the the determination and ambition to deliver a truly national first time ever, to all young people undertaking postgraduate recovery. masters degrees. We will also respect and fully implement the devolution The next step is the allocation of £6 billion on the settlements across the nations of our United Kingdom. biggest-ever sustained programme of investment in the Today, I announce that we recognise the strongly held research facilities of our scientific community. This arguments for devolving corporation tax-setting powers includes money for major new scientific challenges, to Northern Ireland. The Treasury believes it can be including the search for advanced materials, ground- implemented provided that the Northern Ireland Executive breaking work on ageing and the exploration of the can show that they are able to manage the financial universe. The Rosetta comet mission captured the nation’s implications. The current talks will see whether that is imagination. I can tell the House that, yesterday, Britain the case. If it is, the Government will introduce legislation was awarded the lead role in the next international in this Parliament. effort to explore the planet of Mars. We on the Government Benches have often gazed at the barren and desolate In Wales, we are working towards a cross-party agreement wastelands of the red planet, and we have long given up on further powers for next March. I confirm today that hope of finding intelligent life there, but signs of any we have reached agreement with the Welsh Government life at all would be a major advance. on the full devolution of business rates. This is a great opportunity to grow the Welsh economy. Last week, the Many of the new science investments will be made in Government supported the proposals of Lord Smith’s the north of England. One of the great challenges of commission on Scotland. They will lead to the devolution this country is to create a more balanced national of income tax rates and thresholds and other powers economy—a challenge that has eluded Governments and ensure that the Scottish Government are responsible for generations. Our ambition is to build a northern not just for spending money but for raising the taxes to powerhouse as a complement to the strength of our pay for it. We will publish the draft clauses in the new capital city, bringing together our great cities of the year. The sheer scale of the devolution to Scotland north. Since I set out that ambition less than six months now makes unanswerable the case for English votes for ago, we have proposed, reported on, and given the green English laws. light to the concept of High Speed 3. This week, we commit billions of pounds to other road and rail To improve the productivity of our economy, we improvements across the whole of the north of England. back business, build infrastructure and support growth I can today confirm that we will tender for new franchises across the whole UK. But in the end, Britain’s future for Northern Rail and the TransPennine Express, replacing lies in the hands of its people and their aspirations— the ancient and unpopular Pacer carriages with new aspirations to save, to work and to buy a home. Today and modern trains. we support each one. 315 Autumn Statement3 DECEMBER 2014 Autumn Statement 316

First, on saving, from next April, we will trust people settled that argument: it is possible, provided that we with control over their own pensions. In this autumn hold to our long-term economic plan, and we are statement, I confirm that the 55% death tax that currently doing it. applies when a person passes an unused pension pot on to their loved ones will be abolished. People will be able I turn now to my final measure. As well as the to pass on their pensions to their loved ones tax free. I aspiration to work and to save, there is the aspiration to can also tell the House today that we will ensure that own our own home. Today, I am announcing the complete people who die before the age of 75 with a joint life or reform of a tax that has been described as one of our guaranteed-term annuity can pass that on tax free, too. worst designed and most damaging. Stamp duty is charged at a single slab rate on the whole purchase price Next week, we will publish the market-leading rates of a home. It means big jumps in tax when house values on our new 65-plus pensioner bonds, which will be tip into a new band. The distortions can be particularly available from January. Our £15,000 new individual damaging at the lower end: someone buying a property savings accounts are hugely popular with savers, too. worth £250,000 pays £2,500 in tax, but if they buy a Next April, we will increase the limit to £15,240. But we house worth just £1 more, they pay over £7,500—three will do something more. At the moment, when someone times as much. In recent years, the burden of stamp dies, the savings in their ISA lose their tax-free status duty has increased on low and middle-income families and their spouse starts paying tax on that money. From trying to buy a new home as prices have risen. That today, I can announce that when someone dies, their makes it even more difficult to get together the cash husband or wife will be able to inherit their ISA and deposits that buyers need. It is time that we fundamentally keep its tax-free status. Pass on your ISA tax free and changed this badly designed tax on aspiration, so I am pass on your pension tax free. We are delivering fairness today abolishing the residential slab system altogether. to savers and to those who aspire to work, too. In future, each rate will apply only to the part of the The number of young people on unemployment benefits property price that falls within that band, like income has halved. Our goal is to abolish youth unemployment tax. all together. To support businesses that take on young people, we are already, from next April, abolishing Here are the new marginal rates: you will pay no tax national insurance contributions for employing anyone on the first £125,000 paid; and then 2% on the portion under the age of 21. Today, I can go further. Under this up to £250,000; 5% up to £925,000; 10% up to £1.5 million; Government, almost 2 million people have taken up an and 12% on everything over that. As a result, stamp apprenticeship. The Prime Minister has set this country duty will be cut for 98% of home buyers who pay it. an ambition of 3 million apprentices in the next Parliament. Someone buying an averagely priced house of £275,000 We back the businesses that employ apprentices, especially will pay £4,500 less in tax. The average home in London young apprentices under the age of 25. will see a similar reduction. As I said, 98% will pay less, and the whole reform represents a tax cut of £800 million At the moment, we charge national insurance on per year. Only homes that cost just over £937,000 will businesses that employ apprentices. Today, I can announce see their stamp duty bill go up under this system—gradually that the jobs tax on young apprentices will be abolished to start with, rising to more substantial sums for the altogether. When a business gives a young person a most expensive homes. A £5 million house will see its chance in life, we will support them, not tax them. stamp duty rise from £350,000 to £514,000, but, of We also back people of all ages in work, which is why course, this is a charge that is paid only once, when the the Government have raised the tax-free personal allowance property is bought. to £10,000. Next year, the tax-free personal allowance, which was set to rise to £10,500, will rise instead to I can tell the House that these changes to stamp duty £10,600. That is a total wage boost for working people become effective from midnight tonight. Anyone who of £825 a year. It means that 3.5 million of the lowest has exchanged contracts but not completed by midnight paid will now be taken out of tax altogether. That will be able to choose whether to pay under the old shows that we on the Government Benches do not sneer system or the new, so no one in the middle of moving at people who want to work hard and get on. [Interruption.] house will lose out. The changes will apply in Scotland I just wanted to flag that up. until the Scottish Government’s new regime comes into It is the first step to the new goal that we have set of effect next April. At the end of the statement, I will raising the personal allowance to £12,500 so that people move a motion to introduce this. There will be a debate working full time on the minimum wage pay no tax at tomorrow and legislation will follow. all. Today, I can also announce that, unlike previous There has been a debate in this country about taxing increases in the personal allowance threshold, this increase houses. The system that I introduce today replaces a will be passed on in full to higher-rate taxpayers paying badly designed system that has distorted our housing 40% tax. So the higher-rate threshold goes from £41,865 market for decades. It reduces stamp taxes for 98% of this year to £42,385 next year. That is the first increase people who pay them in this country. It increases the in the higher threshold in line with inflation for five taxes on the most expensive 2% of homes, but asks years. This year’s increase means that 138,000 fewer people to pay that tax only when they buy the house people will pay the higher rate than would otherwise be and they have the money. It does not involve a revaluation the case. It is a down-payment on our commitment to of hundreds of thousands of homes in this country. raise the higher-rate threshold to £50,000 by the end of Today I am cutting stamp duty for millions of home the decade. buyers in this country—98% will be better off. That is a There are those who have said that it was impossible fair, workable, lasting reform of the taxation of housing, to control public spending, improve public services, and it is in stark contrast to the shambles of the reduce the deficit and still cut income taxes for hard-working anti-aspirational, unworkable homes tax that the Labour families on low and middle incomes. Today, we have party wants to impose. 317 Autumn Statement3 DECEMBER 2014 Autumn Statement 318

[Mr George Osborne] Does the Chancellor agree with the OBR’s analysis? Will he tell us how much tax revenue has been lost this Four and a half years ago, our economy was in crisis. year because of stagnating wages and forced part-time People questioned whether Britain could remain among employment? the front-rank economic nations of the world, but we The result of that shortfall in tax revenues is that, set a course to restore stability, to get on top of our once again, the Chancellor has had to revise up his debts and to show that Britain was not going to be forecasts for Government borrowing. He told the House counted out. Through the storm we have stayed the today that the deficit for this fiscal year is now expected course. Now Britain is on course for surplus, on course to be £91.3 billion—[Interruption.] for lower taxes, on course for more jobs, on course for higher growth and on course for a truly national recovery—a Mr Speaker: Order. Mr Opperman, you are normally long-term economic plan on course to prosperity. a well-behaved young boy. Try to be a good boy. If you can be a good boy, you can stay; if you cannot restrain Several hon. Members rose— yourself, leave the Chamber. Go and have a cup of tea; take a pill—whatever is necessary. Mr Speaker: Order. Before I call the shadow Chancellor, may I inform hon. and right hon. Members that at the Ed Balls: I am trying to establish the facts about the end of questions on the autumn statement, I shall call deficit from the Chancellor. He told the House that the the Chancellor of the Exchequer to move a provisional deficit for this fiscal year is now expected to be £91.3 billion, collection of taxes resolution? Copies of the resolution but he did not set out in detail how much worse things are available in the Vote Office. are since the Budget. Will he tell the House by how much borrowing this year has been revised up compared with his Budget forecast? 1.25 pm Back in 2010, the Chancellor and the Prime Minister Ed Balls (Morley and Outwood) (Lab/Co-op): The pledged to balance the budget by the end of this Parliament House has not yet seen the detailed—[Interruption.] and that we would see the national debt falling this year. The Prime Minister said in 2010: Mr Speaker: Order. I made it clear that the Chancellor “In five years’ time, we will have balanced the books.” must be heard with courtesy and the same goes for the Today the Chancellor has, I believe, announced that the shadow Chancellor—[Interruption.] Order. I am grateful, deficit next year is forecast to be £75.9 billion. Will he Mr Robertson, for your intended helpful gesticulation. confirm that number and the fact that the national debt I am well aware of the old ruse of people sitting below next year is forecast not to fall, but to rise? While he has the Gangway where they think I cannot see them and clearly missed his targets, he did not tell us the scale by yelling their heads off, either on their own initiative or which he has missed them. How much more will he have because they are rather stupidly following instructions. borrowed in this Parliament than he planned back in 2010? Either way, it does not work. They should pipe down, and if they will not pipe down, it is very simple—three Wages, income and borrowing have been hit so hard words that are easily understood: “Leave the Chamber.” because productivity growth has been so weak. Today the Chancellor announced that he is forecasting that Ed Balls: As I was saying, the House has not yet seen growth will not accelerate but—[Interruption.] The Prime the detailed documents from the Treasury and the Office Minister’s Parliamentary Private Secretary will be interested for Budget Responsibility tables—I am sure that they to know that the Chancellor forecasts that growth next will arrive shortly—but I listened carefully to the year will slow down. I know that the Chancellor wants Chancellor’s statement. To establish the facts, I want to to blame poor growth performance and poor productivity start by asking him questions about issues that are vital growth on the eurozone. I share the concerns about the to our country’s future: living standards and wages; tax eurozone—we need a plan for stronger growth in Germany receipts and borrowing; growth and immigration; taxation; and across the continent—but the weakness of the and the national health service. eurozone cannot explain why, despite the notable successes of a number of our companies, our export performance First, on living standards—[Interruption.] These has been so poor, and so much worse than that of other questions about living standards, wages and tax receipts eurozone countries. Since 2010, our export performance are important, so I advise Conservative Members to has been 16th in the G20. In the EU, we have been listen to them carefully, and then we will hear the 22nd out of 28 countries; three quarters of EU countries answers. have done better than us. Wages have not kept pace with prices for 52 of the Business investment, which has also lagged behind past 53 months. Today’s OBR forecasts confirm that that of our competitors, fell in the last quarter. Bank wage growth is once again weaker than expected. Working lending to small businesses is falling. The number of people are now £1,600 a year worse off than in 2010. apprenticeships for young people is falling this year. Someone in full-time work is now £2,000 a year worse House building under this Government is at its lowest off. For working people, there is a cost of living crisis, level since the ’20s. On infrastructure, for all the Chancellor’s and the squeeze on living standards not only is hitting preheated re-announcements, barely a fifth of projects family budgets, but has led to a shortfall in tax revenues. are in construction, and infrastructure output is down The OBR confirms that stagnant wages and low-paid over 11% since 2010. employment have hit revenues, saying that On business rates, the research and development tax “weaker-than-expected wage growth so far in 2014-15” credit and air passenger duty, we welcome the action is that the Chancellor has taken. We will support what he “depressing PAYE and NIC receipts.” has proposed on APD, but let me ask him—[Interruption.] 319 Autumn Statement3 DECEMBER 2014 Autumn Statement 320

Mr Speaker: Order. There is far too much noise in the than he planned in 2010 because of what happened to Chamber. Mr Opperman, I have told you three times, housing benefit in particular. He is planning a £3 billion and I do not want to have to tell you again: be quiet, sit real-terms cut in tax credits that will hit 3 million and listen. If you do not wish to do so, get out. The working people on middle and lower incomes, and once same goes for the Government’s Deputy Chief Whip, again he is hitting women harder than men. the right hon. Member for Chelsea and Fulham (Greg The Prime Minister rather let the cat out of the bag Hands); I have been looking at and listening to him. Let earlier when he referred to “masosadism”. As I understand me make it clear to him that he ought to know better. it, masosadism is when someone enjoys having pain Behave or get out, man. inflicted on them and enjoys inflicting pain on other people. We know the Chancellor’s views on the first; it Ed Balls: We’ll get him out next year, Mr Speaker. seems, from the way he smiled when he announced the I would like to ask the Chancellor about the air tax credits cuts, that he is rather enjoying the second as passenger duty proposal. We will support what he has well. How can it be fair to hit working people with a proposed, but following the Smith commission proposal £3 billion cut to their tax credits when he has spent to devolve air passenger duty to Scotland, will the £3 billion giving a tax cut to people earning over £150,000? Chancellor urgently lead work across Government, with the Scottish Government, on a mechanism to ensure When families are paying £450 more in higher VAT, that English airports, particularly in the north of England, does the Chancellor really think that people will fall for are not disadvantaged by that devolution? the Prime Minister’s latest promise of a £7 billion unfunded tax cut in the next Parliament, which even the On business rates, while the review is welcome, it will Business Secretary has called a “fantasy”? Two months not report, I believe, until 2016. Why can the Chancellor on, the Chancellor gave us no details at all of where not take immediate action and adopt our plan to cut he will get the money from—not a single penny. Is he business rates for small companies? Why will he not planning to pay for that with a further rise in VAT? He increase the bank levy now and increase free child care said at the weekend that he has no plans to raise VAT. for working people? Why will he not properly capitalise That is what he said before the last general election, and the business investment bank? Why will he not raise, as then he raised it after the election. He should stand at a proportion of earnings, the national minimum wage? the Dispatch Box today and promise that he will not Why will he not repeat the bank bonus tax and guarantee raise VAT again for families and pensioners. a compulsory job for all people? On regional devolution, why will he not devolve full growth in business rates to On the national health service, we welcome the all city and county regions, to give them real control? Chancellor’s belated recognition that there is a funding We need a real plan for good jobs and more balanced crisis. Everyone knows—other than the Prime Minister, growth. it seems—that our health service is going backwards. On the subject of growth, the figures that the Chancellor Accident and emergency department waiting times and announced reveal that growth has been revised downwards GP waiting times are going up, thanks to the Government’s in 2016 from 2.6% to 2.2%, in 2017 from 2.6% to 2.4%, £3 billion reckless reorganisation. The Chancellor and in 2018 from 2.7% to 2.3%. Why is growth being announced £2 billion for, he said, every year into the revised downwards year after year? This is an interesting future—paid, it seems, by an underspend every year fact from the OBR: if our economy grew by just 0.5% a into the future. I have never heard of a prospective year faster than forecast, Government borrowing would forecast of an underspend being made in quite that way. come in more than £32 billion lower in the next Parliament. Will he confirm that that is £2 billion a year for the Does the Chancellor not see that those downgrades to national health service over a flat, real baseline? We growth are bad news? Without decisive action to sustain need to know the answer to that one. It seems that growth and raise living standards, and without a recovery the Chancellor has also confirmed that £700 million of for the many, not the few, he will carry on missing his the crisis cash is a re-announcement of a re-allocation deficit targets year after year. from within the existing Department of Health budget. Let me ask the Chancellor about another missed In the Chancellor’s stamp duty reforms, he is accepting target. Over the past 12 months, net migration to the that high-value properties are under-taxed, which is United Kingdom has been 260,000 people. Can he tell welcome. But rather than taxing them only on sale, why the House—this will be an interesting question to many does he not have the courage of his conviction? The Back Benchers in all parts of the House—the OBR average person pays 390 times more in annual council estimate for net migration over the next 12 months that tax as a percentage of their property than the billionaire underpins the growth and public finance forecasts? It buyer of a £140 million penthouse in Hyde park. Why seems highly unlikely that it will be anywhere near the will the Chancellor not have an annual charge on the Prime Minister’s forecast, which is for tens of thousands. highest value properties and use that for a £2.5 billion a Will it be over 100,000 next year? Over 150,000? Over year investment in the NHS so that we can have 200,000? This time, did the Chancellor remember to tell 20,000 nurses and 8,000 GPs every year? Why will he the Prime Minister the facts? not match that commitment? Our national health service deserves a proper funded long-term plan, not just more Turning to spending and taxation, the Prime Minister short-term sticking plaster. claimed in The Times a month ago that 80% of the planned spending cuts had been made. The Institute for We then heard the Chancellor’s diversionary stunt. Fiscal Studies says that it is less than 50%. Can the He had to admit today that he has failed to balance the Chancellor clarify who is right and who is wrong? He books in this Parliament. He is now trying to divert claims that in the next Parliament he can cut welfare attention with a vote on balancing the books in the next spending by over £10 billion, but in this Parliament, Parliament. At the time of the Budget, he talked up a spending on social security is over £20 billion higher vote on the overall budget surplus, but I understand 321 Autumn Statement3 DECEMBER 2014 Autumn Statement 322

[Ed Balls] It is hardly surprising that his party has such low economic credibility when the shadow Chancellor repeatedly from reports in the Financial Times that he has done a makes predictions about the British economy that turn U-turn and retreated to a vote on a current budget out to be completely wrong. No more boom and bust, surplus in the next Parliament. Will he explain what is he said—wrong. A double-dip recession, he predicted— going on with that vote and the nature of the problem completely wrong. He has spent the past three months that he is dealing with? We want to get the current betting the entire credibility of the Labour party’s response budget back into surplus as soon as possible in the next to the autumn statement on the prediction of a massive Parliament, and get the national debt falling, but the deterioration in the public finances and the deficit going lesson of this autumn statement is that a plan to balance up, and he got that completely wrong. People say there the books will work only if it puts good jobs, rising is a split in the leadership of the Labour party. They are living standards and stronger growth at its heart. right. It is between people who get the deficit figures The Chancellor’s diversionary tactics will not work. completely wrong and people who forget about the Since he sat down, I have received the Office for Budget deficit altogether. Responsibility’s forecasts. Table 1.2 on page 15 sets out The Opposition have no economic credibility and in detail how the latest forecast compares with the they have policies that show that they are not up to the forecast at the time of the Budget. It gives us the job. The shadow Chancellor mentioned his homes tax. numbers that the Chancellor failed to tell us in his We still do not know what the Labour party’s view is of autumn statement. I will give the country and the the stamp duty reforms. I guess we will find out in the House those numbers. Compared with his Budget target—it next few days. We do not have a clue what its views are is here on page 15 in table 1.2—borrowing this year has on the postgraduate changes or the infrastructure not gone down. It has been revised up by £4.9 billion. investments that we have announced. The right hon. Next year it is revised up by £7.6 billion. Over two years Gentleman spoke about his homes tax. This is what the the Chancellor has revised borrowing up by £12.5 billion. Labour party thinks about his homes tax. The Chair of the Public Accounts Committee says: The answer to my other question, which I did not have when I started, is that those figures mean that in “I don’t think it’s the world’s most sensible idea.” this Parliament the Chancellor will have borrowed The former Housing Minister, the right hon. Member £219 billion more than he planned in 2010—£219 billion. for Greenwich and Woolwich (Mr Raynsford), says that It is all here in black and white—hard evidence from the it hits the “cash poor”. The right hon. Member for Office for Budget Responsibility. The Chancellor’s Tottenham (Mr Lammy) says it is “a tax on London”, borrowing targets are all in tatters. We all know that he and the right hon. Member for Dulwich and West has changed the way he styles his hair, but he cannot Norwood (Dame Tessa Jowell) says: brush away the facts. People are worse off and he has “Let’s stop calling it a ‘mansion tax’…these are family homes”. failed to balance the books in this Parliament. For all One of Labour’s council group leaders summed it up his strutting, all his preening and all his claims to have best when they said it was “completely bonkers”. That fixed the economy—he promised to make people better is the housing policy—to put taxes on housing. off—working people are worse off. He promised that we were all in this together, then he cut taxes for millionaires. The shadow Chancellor asked about our tax cut on He promised to balance the books in this Parliament, apprentices. His jobs tax policy is to increase national and that commitment is now in tatters—every target insurance. He talks about pensions. His pensions policy missed, every test failed, every promise broken. is to tax pensions. He asked me a couple of questions about savings in the public finances. We need a recovery for the many, not just a few. We need to balance the books fairly. We need a long-term I was hoping that he was going to give me some plan to save our NHS. That is the autumn statement suggestions for savings that we can make in the public that we needed. It will take a Labour Government to finances. I have had to do a bit of research myself about deliver it. what his party’s policy is. The Opposition have conducted what is called a zero-based review for the past year and identified two Mr Osborne: With that performance, we see why the surplus assets that the Government should sell. The right hon. Gentleman is totally unfit to be put in charge first is the Queen Elizabeth II conference centre. The of the nation’s finances in six months’ time. We have shadow Chancellor first proposed selling that in 2001 had an object lesson in how not to plan an autumn and seems to have forgotten that it is the only bit of statement reply before hearing the autumn statement. Government that pays us an income. The other thing That was what he expected to hear, as we know because they found to pay down the national debt—it is in the he went round the TV studios over the past few weeks Labour party document—is a restaurant in St James’s predicting it. He said that the deficit would go up this park, estimated to be worth £6.7 million. That is 0.005% year. He said it last month, he said it last week, he said it of the national debt, so their national economic policy on Sunday. I have his words. He said that the Chancellor is literally out to lunch. is going to have to make an autumn statement where he is That is the problem that we have seen in the right hon. Gentleman’s reply. He has absolutely no answers “going to have to say that the economy is weakening, the deficit is to the economic challenges that Britain faces. He has no getting larger”. credibility and no workable policies because Labour I have just quoted independent forecasts which show has no workable plan. We are five months away from that the economy is stronger, the deficit is falling and a general election in which people will have to choose the debt is lower in every future year. The shadow their Government. The most serious responsibility Chancellor got it completely wrong. incumbent on anyone seeking office is to show that they 323 Autumn Statement3 DECEMBER 2014 Autumn Statement 324 can provide economic stability to the nation and protect Mr Osborne: Let me also pay tribute to the former the families who live here. The Opposition do not have a Chancellor for his work on the Scottish referendum clue how to do that. They do not have a plan. Their campaign. To be fair to him, what we did not know in whole response today shows that they would take Britain the debate before the previous general election, but back to square one. Britain has pulled itself out of the which has subsequently been revealed in the various economic crisis that the shadow Chancellor created, memoires that have been written about the Government and we are not going to let him take us back there. he was at the heart of, is that he was arguing internally for the Government to set out the spending cuts that Mr Kenneth Clarke (Rushcliffe) (Con): Does my right they would make. Indeed, he argued that the Labour hon. Friend recall, as I do, that the shadow Chancellor Government should commit to a VAT increase, which was the right-hand man of the Chancellor who presided of course the Labour party, somewhat hypocritically, over the credit crunch, the banking collapse and the opposed several months later when we had to take that incurring of the biggest deficit in the G20, and does step. What we know about his role in the previous he not find his conversion to rigid fiscal discipline and Government does him great credit. the pursuit of fiscal surpluses absolutely quaint and On the right hon. Gentleman’s point, as I explained ridiculous? in my statement, although borrowing falls in each year, On a more serious note, my right hon. Friend is the OBR has revised up the borrowing for the first two proposing to devolve considerable powers, in a very years but then revised it down, compared with the welcome way and to varying degrees, to the different Budget, in the years after that. The structural deficit nations and cities of the United Kingdom. Can he continues to fall at the same pace as in the Budget. This reassure us that he will combine that with firm and is not the big deterioration in the public finances that enforceable commitments to financial responsibility so everyone has been predicting—it was on the front pages that he and the UK Treasury can retain overall responsibility of many newspapers, and indeed the shadow Chancellor for the stability of sterling and our economy, because went about repeating it. That has not happened. With not every local government Labour leader can be trusted regard to lower tax receipts, I gave the tax receipts to follow the clear and effective path that he has followed forecast but pointed out that one of the reasons why in getting our debt back under control? there has not been that deterioration in the public finances is the big reduction in debt interest payments. Mr Osborne: My right hon. and learned Friend makes Mr Andrew Tyrie (Chichester) (Con): The OBR forecasts a good observation about the shadow Chancellor’s career. that over the course of this Parliament the eurozone will I should pay tribute—probably for the first time—to the grow at a little over 2% and the UK will grow at nearly right hon. Member for Kirkcaldy and Cowdenbeath 9%, which of course is a tribute to the capacity of UK (Mr Brown), who this week announced his retirement: businesses, particularly small businesses, to adapt to the first, for his commitment to advancing international huge economic shock of the euro crisis. However, just development and to British aid, which I fully support; doing a bit better than the eurozone is not enough; our and secondly, because when he was shadow Chancellor, prosperity will depend on whether we can absorb the as we all remember, he built up a really compelling case annual shock of increased global competition. Is not it for fiscal discipline. That, in part, is why the Labour therefore crucial, as we have seen with the pressure on party won the 1997 general election. That stands in Northern Ireland’s corporation tax rate, that we do such marked contrast to the shambles we see from much more to sustain a globally competitive tax system? the pair sitting opposite me now, who subsequently advised him. Mr Osborne: My hon. Friend is absolutely right. It is On my right hon. and learned Friend the former not enough just to do better than our neighbours, Chancellor’s good point about devolution, of course because of course they have their own problems and are both local government and the different nations of the stagnating. If one looks at all the various indexes of United Kingdom—the devolution arrangements apply global tax competitiveness and global innovation, one to both—will have in place robust arrangements that sees that the UK is climbing up the ranks. We in the protect taxpayers across the United Kingdom. That is Treasury certainly seek to mark ourselves against the certainly an important part of the Smith commission most competitive economies in the world, not just those report and how we must take it forward. It is also at the on the continent of Europe. The steps I have outlined heart of the devolution settlements that we have discussed today, which probably will not make it on to the front with English local authorities. pages of the newspapers, such as the increase in the small business research and development tax credit, the Mr Alistair Darling (Edinburgh South West) (Lab): I large company tax credit and changes to entrepreneurs’ am sure that the House will want to return to that last relief and its relationship with the enterprise investment point on the UK Government’s ability to control their scheme, are all designed to support research and finances. Did I hear the Chancellor correctly when he development and entrepreneurial business in this country. was claiming credit for having halved the deficit over the course of this Parliament, because his view used to Margaret Hodge (Barking) (Lab): I sincerely welcome be that that would not be a terribly good thing? We are the Chancellor’s announcement of the new measures to still borrowing £90 billion this year, and the reduced crack down on tax avoidance, particularly by challenging growth forecasts for the next five years, which we see in the mismatch between the form of a company’s structure the OBR report, show that it will slow down, so can he and the substance of its activities, which is a key tell us what impact that will have on the likely tax recommendation from the Public Accounts Committee. revenues, which of course have a bearing on our ability This week, Starbucks announced that it will pay no to pay down the deficit? corporation tax in the UK for the next three years. Can 325 Autumn Statement3 DECEMBER 2014 Autumn Statement 326

[Margaret Hodge] built as speedily as possible, demonstrate that a key part of the Government’s long-term economic plan is building he tell the House when the measures that he has announced new homes and creating communities of which we can will be implemented and how they will prevent Starbucks all be proud for generations to come? from sticking two fingers up to the British people? Mr Osborne: My right hon. Friend is absolutely Mr Osborne: Of course, the legislation needs to pass right. I commend him and the community leaders in through the House of Commons before the tax can be Bicester for working with us to secure this extra investment levied, so the diverted profits taxes are from April next in the town, to create the vision of a garden town, and year, and the hybrids taxes are from a little later, in to make sure that there are housing and jobs for the 2017. It is complex tax legislation, but we aim to get it town’s population while preserving its beautiful character. through. I suspect that, in order to get it through before Stewart Hosie (Dundee East) (SNP): I welcome some the general election—the right hon. Lady might be of the individual measures announced today, but they helpful in this—we might need the co-operation of the do not amount to a long-term economic plan. At its Opposition in passing those clauses in the Finance Bill. heart, what the Chancellor said was that the target to see debt fall as a share of GDP this year has not been Sir Robert Smith (West Aberdeenshire and Kincardine) met; that the current account will not be in the black (LD): With several hundred job losses already announced next year, as he promised; and that borrowing then, far in the north-east of Scotland, I certainly welcome the from being £20 billion, will be almost four times that, at UK Government’s decision to send a signal that we £75 billion. Why should the public believe that if the want to maximise investment in the North sea. That Government do the same things over the next two or would have been a necessary signal whether or not the three years, that will be any different from their failure price of oil was falling, and it will build the jobs base in in doing them first time round? the UK and a great export industry. Will the Chancellor confirm that such a move is possible because we are Mr Osborne: At the moment, we see Britain as the part of the United Kingdom’s diversified economy? fastest-growing major economy in the world. We also see a record fall in unemployment, and the highest rate Mr Osborne: My hon. Friend makes a good point. Of of job creation occurring in Scotland. That is the United course, what is very striking, if one looks at the receipts Kingdom delivering for the people of Scotland. Now revenue forecasts from the OBR, is that they are wildly we have proposals from the Smith commission, jointly different from those produced by the Scottish Government agreed between the different parties, whereby the Scottish before the recent referendum. As he will see tomorrow, Government, and the Scottish Parliament, can take when his colleague the Chief Secretary to the Treasury more responsibility for raising their own taxes to pay sets out in Aberdeen what we are doing, the tax cuts we for their own expenditure. Then we will have an even announced today, which will come into effect in the better debate in Scotland on how things are paid for. coming weeks, will have an immediate effect, but we are Margot James (Stourbridge) (Con): I was glad to also going to try to set out a longer road map for the hear my right hon. Friend confirm that there has been direction we want to head in. As he well knows, industry no new recession in the years since 2010. It would have investment decisions are made over long cycles and been a strange recession that resulted in unemployment people need predictability about the future of the British falling by 45% and average weekly pay being up by oil and gas tax regimes so that we get the maximum 12.5% in my constituency and in 4,000 new businesses amount of oil out of the basin. opening in my borough. Will he join me in congratulating the thousands of people who have got into work and Mr Michael Meacher (Oldham West and Royton) started new businesses in my constituency in the past (Lab): With average wages still suffering the longest and four years? biggest fall since Victorian times, productivity still one of the lowest in the OECD, business investment still flat Mr Osborne: My hon. Friend has been a real champion and below pre-crisis levels, the deficit on traded goods for small businesses and for exporters in her Stourbridge now the biggest in British history and, to cap it all, the constituency, and for attracting investment into the budget deficit is clearly beginning to rise because of the black country. I pay tribute to the work she has done. fall in tax receipts, how can the Chancellor, against that The measures we have taken today to help high street background, continue with austerity when its consequences stores by increasing the business rate discount to £1,500, are clearly now causing the deficit to rise? to take the smallest businesses out of business rates, and to back exporters and to increase the research and Mr Osborne: I am afraid that the right hon. Gentleman development tax credit for firms in the west midlands is just wrong. Business investment is not flat; it is up are all tribute to the work she has done and the issues 27% and is rising faster in the UK than in any other she has raised in Parliament. major advanced economy in the world. The deficit, Luciana Berger (Liverpool, Wavertree) (Lab/Co-op): according to the OBR document, was 10.2% under the The Chancellor presented things as being very rosy, but previous Labour Government; it is now 5%. The idea a survey that came out today says that 72% of the that that is an increase is obviously nonsense. Indeed, it British public feel no sense of recovery whatsoever. falls in every future year, just as it has fallen this year. Why is he so out of touch? Sir Tony Baldry (Banbury) (Con): Does not providing Mr Osborne: In the hon. Lady’s own constituency, potentially up to £100 million in infrastructure investment unemployment is down. In her own constituency, economic to make Bicester an exemplar of a garden town for the security has increased as people can see that the country 21st century, and ensuring that 13,000 new houses are is not in the crisis it was in four or five years ago. She 327 Autumn Statement3 DECEMBER 2014 Autumn Statement 328 has to ask her constituents this: do they want to return Mr Osborne: Like my right hon. Friend, I too have to the economic instability and crisis that everyone the challenge of HS2 going through my constituency, remembers under the previous Labour Government, or although of course she is further along in the process do they want to stay on course to prosperity? I think the because her constituency is affected by the first phase of British public will conclude that they want to stay on the route. I know, from my experience and from talking course to prosperity. to her, that this has a big impact on communities. We have tried to make the compensation generous and to Mr David Willetts (Havant) (Con): May I warmly make the process for accessing it easier. It is certainly a congratulate the Chancellor on extending the new loans lot easier than when I, as a constituency MP, had to to postgraduates? With increasing numbers of jobs deal with the compensation relating to the second runway requiring a postgraduate qualification, that really does at Manchester airport. Of course, I will look at any remove a significant barrier to social mobility. Does he ideas that she puts forward, but any measure has to be agree that if more people are able to stay on and do affordable. I should also point out that in today’s document masters courses, that is an opportunity to look at we set out further reforms that we intend to make to the broadening the range of subjects that they study at compulsory purchase regime. early stages of their education? Fiona O’Donnell (East Lothian) (Lab): The Chancellor Mr Osborne: My right hon. Friend is absolutely talked tough on tax evasion today, but so far none of right. Of course, he knows that we embarked on this the Crown dependencies or overseas territories has work on how to extend support to postgraduates when committed to a public register of beneficial ownership. he was Minister for Universities and Science—it might I know that my right hon. Friend the shadow Chancellor have been him who first proposed the idea to me—and I will act tough on this issue. Why will not this Chancellor am absolutely delighted that it has come to fruition. and his Government make some progress on it? This is one of the biggest reforms I have announced today. It will provide real support for postgrads, who do Mr Osborne: Frankly, the hon. Lady is not being fair not currently get any support. In almost all the reports to the Government or to those territories and dependencies. that one reads on social mobility, including the report There had been no progress at all when we came into by Alan Milburn, that has been identified as a barrier to office. They have all now committed to the automatic entry for people from low-income backgrounds into the exchange of information; they all attended the conference professions. It is a really important step forward. Again, in Berlin where they made the international commitment I suspect that it will not be the headline in tomorrow’s to do that; and they are all consulting, right now, on the newspapers, but that does not mean that it is not going creation of these registries. They are doing that because to change lots of people’s lives. my right hon. Friend the Prime Minister put this issue centre stage on the G8 agenda in Lough Erne. Mr Andrew Love (Edmonton) (Lab/Co-op): Yesterday, the right hon. and learned Member for Rushcliffe (Mr Clarke), a former Chancellor, gave an extended Sir Bob Russell (Colchester) (LD): The Chancellor interview to the BBC in which he said, among other said that the end of our operations in Afghanistan will things, that the Government should keep tax increases allow this country to save an additional £200 million in the locker in case they are needed. Does the Chancellor this year from the special military reserve. There is also intend to consult former Chancellors on his long-term the sale of surplus Ministry of Defence radio frequencies, economic plan? If not, will he now deny that a VAT rise which he did not mention. Will he agree to ring-fence will be imminent after the next election? both sums to pay to modernise the family homes of the brave men and women of our armed services, whom he says he salutes? Mr Osborne: I have set out today how our plans to bring the deficit down and bring borrowing down can be achieved through spending reductions in Departments Mr Osborne: We do have a programme, which we and through welfare savings, and therefore do not require have extended, to renovate the accommodation of service tax increases. I also explained that if we were to achieve families. We are all aware of the challenges that many over the next period the same as we have achieved families face with that accommodation. The special during this Parliament in dealing with tax avoidance, military reserve was created to fund overseas military tax planning and aggressive tax evasion, we could achieve operations—that is what it exists for. When we came £5 billion of savings, or extra revenue, in that space of into office, this country was spending £4 billion a year time as well. That is a better way to proceed, and that is on operations in Afghanistan. The special military reserve the course we have set. is now down to about £1 billion; I have been able to reduce it a little today. Despite what the reserve is for, I am always willing to consider specific requests for support. Mrs Cheryl Gillan (Chesham and Amersham) (Con): I did not have time in my speech to set out the very The Chancellor will be aware that I, and many colleagues many military good causes that we are supporting with in this House, have been working with the CLA, which the LIBOR money. is actively campaigning for reform of compulsory purchase to deliver fairer compensation for landowners who are affected by infrastructure projects such as HS2. I greatly Caroline Lucas (Brighton, Pavilion) (Green): New welcome his announcements on stamp duty. Will he go analysis shows that an ambitious energy efficiency a bit further and consider abolishing stamp duty land programme would create up to 108,000 new jobs, generate tax on the purchase of replacement property by landowners £1.27 in tax revenues for every £1 invested by the who are so badly affected by infrastructure projects? Government and end fuel poverty. Will the Chancellor 329 Autumn Statement3 DECEMBER 2014 Autumn Statement 330

[Caroline Lucas] Mr Osborne: My right hon. Friend the Leader of the House, who is sitting next to me, said, “Oh, really”. I explain why this statement fails to direct one penny of said that the sovereign wealth fund should be for across the infrastructure budget towards tackling the cold the north of England so that I did not get into any homes crisis in places such as Brighton? trans-Pennine, war of the roses dispute. My hon. Friend is absolutely right that many of the Mr Osborne: We have proposals to help, for example, immediate opportunities are in Lancashire, in or near off-grid consumers with energy efficiency, and we also the area he represents. I have spoken to him about what have the energy companies obligation programme to more we can do to make sure that local communities see help with energy efficiency. We have announced this the benefit of the jobs, investment and resources that we week a commitment to look at the idea of the Swansea will get as a result of this important energy exploration bay tidal lagoon project, which could be a very interesting and extraction. Of course, we now have the new college project for renewable energy generation in the future. in the area—that has just been announced—so local people will have the right skills to get those jobs. Mr Peter Bone (Wellingborough) (Con): Under 13 years of Labour, unemployment went up in east Mark Reckless (Rochester and Strood) (UKIP): If Northamptonshire, there were no road improvements the economy is doing as well as the Chancellor says, and shops closed. That is why Tom Pursglove, our why are we borrowing more than France, Italy, Spain excellent candidate for Corby, and I launched a and Greece? joint listening campaign to improve things in east Northamptonshire. Unemployment is now 30% lower, Mr Osborne: The reason is that we started with a and we now have the Rushden Lakes retail development 10.5% budget deficit, which we have had to reduce. on line and, thanks to the Chancellor this week, the Interestingly, the International Monetary Fund assesses Chowns Mill and the A45 dualling improvements. Will that we have had the longest and most sustained reduction the Chancellor visit east Northamptonshire so that in the structural deficit, and that we are forecast to have Tom Pursglove and I can carry him shoulder-high through the strongest reduction in the headline and the structural the streets of Rushden, Higham Ferrers, Stanwick, Raunds deficit in the future. The IMF assessment of how we and Irthlingborough to cheering crowds? have done shows that we are restoring economic stability to this country. Mr Osborne: That is quite an offer. I met Tom Pursglove and my hon. Friend to discuss the infrastructure Anne Marie Morris (Newton Abbot) (Con): May I improvements that they wanted in the east midlands. again congratulate the Chancellor on being a friend to We have been able to deliver what they have so successfully small and micro-businesses? His autumn statement is campaigned on and attracted so much local support for. first class. His extension of national insurance and That is a good combination of two strong local campaigners business rate reliefs is much appreciated, and it is working for their local area to deliver improvements inspirational that he is going to have a full review of that, frankly, were never delivered under a Labour business rates, the most-hated tax for all small businesses. Government and that Labour MPs have never asked While he is feeling inspired in the demolition business— me for. getting rid of the slabs in stamp duty—will he look at the cliff in VAT? It is a real barrier to growth, despite Stephen Timms (East Ham) (Lab): The Chancellor the fact that it is a European tax. has recognised that he will not deliver on his commitment to eradicate the deficit in this Parliament. Will he also Mr Osborne: As my hon. Friend knows—this is the recognise that a large part of the reason for the failure is problem of previous Governments having handed over that, as the OBR has acknowledged, tax receipts have various powers and rights of this country to Brussels—we been hard hit by the fall in real wages since the general are constrained by the VAT threshold that we can levy election? in this country. I think that it is already the highest in Europe, so we are restricted in what we can do. That is Mr Osborne: I acknowledged in my statement that why we are seeking to help small businesses in her west tax receipts are £24 billion below what we forecast for country constituency both through the measures on 2017-18, but I pointed out that people have focused business rates, and through investment in infrastructure, only on the tax side, not the spending side of the such as the A303, the Dawlish rail line and the Kingskerswell equation: lower unemployment and lower inflation have bypass. As I saw a few weeks ago, the bypass is proceeding an impact on welfare payments and debt interest very well in her constituency. payments—we are paying £18 billion less in debt interest than was forecast—which is of course why we have not Chris Bryant (Rhondda) (Lab): Instead of wasting seen the big deterioration in the public finances that he his time in Northamptonshire with a dead-beat candidate, and others predicted. may I suggest that the Chancellor comes to the Rhondda, particularly to visit the Conservative club in Tylorstown? Eric Ollerenshaw (Lancaster and Fleetwood) (Con): I say the Conservative club, but it has closed and, If we are to have a shale gas industry, I welcome the ironically enough, is now a food bank. If he came to idea of a sovereign wealth fund. Does the Chancellor that food bank, he would learn from those who run it agree that northern money for northern investment that the vast majority of people that they are helping could be a real game changer? When he sets up the with 2.5 tonnes of food every year are in work. That is fund, will he take into account the fact that it looks as because of the sanctions regime, low hours, zero-hours though the majority of the gas will come from Lancashire, contracts and, most importantly, the bedroom tax. Why not Yorkshire? [Interruption.] does he not deal with any of those facts? 331 Autumn Statement3 DECEMBER 2014 Autumn Statement 332

Mr Osborne: First, what the hon. Gentleman’s question the service that we need for the future. Does he share my reveals is, of course, that when the Labour party says it concern, however, that our endorsement of the NHS’s is committed to fiscal discipline, it does not mean that at forward view—our long-term plan for the NHS—would all. It opposes welfare changes that bring the welfare be put at risk if we handed it over to a Government who budget down, and it opposes all the difficult decisions had no long-term economic plan to fund it? required to bring public expenditure under control. Because we are able to take those difficult decisions on Mr Osborne: My hon. Friend is right. The transformation day-to-day spending, we are able to make investments fund is an important part of the NHS’s forward view, in infrastructure that will really help all parts of the which has been looked at and endorsed by the Health United Kingdom. A shining example of that is the Committee, which she chairs, the various health charities electrification of the valley lines, which the Prime Minister and the royal colleges. The head of the NHS, Simon went to south Wales to talk about. That never happened Stevens, who drew up that plan, welcomed what we in all the years that the hon. Gentleman was a Labour announced at the weekend and travelled with me to Minister and represented the seat as a Labour MP. Homerton university hospital to explain how the transformation can take place. My hon. Friend is right Nadhim Zahawi (Stratford-on-Avon) (Con): May I, that it is impossible to have a strong NHS unless we on behalf of the Orchestra of the Swan, thank the have a strong economy: we are delivering both. Chancellor for the tax relief, which of course comes on top of the tax relief for the Royal Shakespeare Company? Mr Tom Clarke (Coatbridge, Chryston and Bellshill) Savers were among the hardest hit under Labour’s great (Lab): Does the Chancellor agree with the Deputy recession. Does not today’s autumn statement and the Prime Minister that: help that we are providing to savers demonstrate that “There is not a single developed economy anywhere in the this Government and the Conservative party are on the world that has balanced the books and only done so on the backs side of savers, who would be put at risk if Labour ever of the working-age poor, which Osborne has now confirmed got anywhere near his position? several times he wants to do.”? Does the Chancellor realise how damaging those policies Mr Osborne: First, may I say that I know the Royal are to constituencies such as mine? Shakespeare Company does a brilliant job? We were able to help it earlier this year with support for touring Mr Osborne: In constituencies such as the right hon. around the world. Such people are looking at the theatre Gentleman’s and, indeed, in constituencies right across tax break and at what they can do to use it. I hope that the country, unemployment has come down and people the orchestra tax break is of help to the Orchestra of have come off the claimant count. That is a big positive the Swan, which my hon. Friend mentioned. development. The distributional analysis that we have published today, which was examined by the Treasury On savers, I have announced today that people can Committee, shows that the richest 20% in our society pass on their ISAs to their spouse tax free. That major have made the biggest contribution to deficit reduction— step forward in the ISAs regime comes on top of the bigger than the other 80% put together. Then there is increase to £15,000 for the new ISA and, of course, the the stamp— new freedoms on pensions. Mr Clarke: So why is the Deputy Prime Minister Ian Lucas (Wrexham) (Lab): One thing the Chancellor unhappy? did deliver in 2010 was an increase in VAT. Can he explain the difference between his statement in 2010 Mr Osborne: The Deputy Prime Minister is unhappy that he had no plans to increase VAT and his statement because the Conservative party is trying to win his seats last weekend that he has no plans to increase VAT? off him.

Mr Osborne: The plans that I have set out involve Mary Macleod (Brentford and Isleworth) (Con): I spending reductions and welfare reductions. By the way, thank the Chancellor for announcing the review of the the Labour party is the first to attack me for them. structure of business rates. That has been called for by People have seen the decisions and the approach that we the Chiswick traders’ group, the Federation of Small have taken on spending. We will go on reducing spending Businesses, the British Retail Consortium and others. and reducing welfare, and we do not need tax increases. Will he reassure small businesses in my area that the As I remarked in my exchange with the right hon. review will start as soon as possible? Member for Edinburgh South West (Mr Darling), the previous Labour Chancellor planned to increase VAT Mr Osborne: Yes, the review will start as soon as after the general election—he put that in his memoirs—and possible. I urge businesses and business organisations to those of us who were in that Parliament will remember engage with it. It has to be fiscally responsible, but it is that the Labour Treasury produced, by mistake, a document appropriate to look at the structure of the modern that said VAT would go up, which caused the Government economy to see how it has changed and how the business great embarrassment at the time. As I say, our plans rates regime can reflect that. involve spending reductions and welfare reductions, and that is what we are committed to do. Sammy Wilson (East Antrim) (DUP): I welcome the additional resources that will come to the Northern Ireland Dr Sarah Wollaston (Totnes) (Con): I warmly thank Executive as a result of the Barnett consequentials of the Chancellor for investing the extra billions of pounds the additional spending, and the Chancellor’s commitment in our NHS. There is not only extra revenue, but a to devolve corporation tax to Northern Ireland, albeit transformation fund that will transform the NHS into on the basis that we show that we can manage the 333 Autumn Statement3 DECEMBER 2014 Autumn Statement 334

[Sammy Wilson] Mr Mark Hoban (Fareham) (Con): Stamp duty has often been a barrier to families in my constituency owning financial implications in our budget. Given that my a home of their own or moving house. The reforms that party has defended fiscal responsibility, we have no fear the Chancellor announced today will save £1,300 on the of that. Will he confirm that the implication of what he cost of an average house in Fareham. Does that not has said is that the Northern Ireland Executive must demonstrate that it is the Conservative party that is on make a decision on the implementation of welfare the side of the home owner and aspiration, in stark reform? Is that how he defines being contrast to the Labour party? “able to manage the financial implications” Mr Osborne: My hon. Friend is absolutely right. It is of the devolution of corporation tax? a major reform of stamp duty that gets rid of the very distorting slab system. The current stamp duty system Mr Osborne: I do not want to go into too much of has attracted huge criticism from all sorts of groups, the detail that will be on the table in the important including property websites, those who help people to cross-party talks, but clearly one challenge that the move home and, of course, home buyers. [Interruption.] Northern Ireland Executive face is that they have not The hon. Ladies on the Opposition Front Bench say, implemented some of the welfare reforms, which has “Do it in the Budget.” I am doing it now so that people led to a hole in their budget. There are not currently can benefit from it now. credible proposals on the table from all the parties—I use the term “all” in the collective sense. There is not yet Alison Seabeck (Plymouth, Moor View) (Lab): The collective agreement on how to address the challenges Chancellor did not pay significant attention to productivity that the lack of welfare reform has created. That is why in the south-west in his speech. Our devastated rail line I phrased my statement as I did. We have the cross-party is just getting crumbs from the table, and those are talks and we have an important couple of weeks ahead, buried in the national infrastructure plan. We have a as Members from Northern Ireland know. Let us hope feasibility study that is semi-permanent, with no guarantee that we make real progress in those talks. of investment until 2019-20. The Prime Minister said that money was no object when we had the storm Ian Swales (Redcar) (LD): I warmly welcome the new damage, but he clearly did not mean it. People in the £28 million national formulation centre, which I believe south-west will not forget and will be angry. is heading for Sedgefield in the north-east. That was one of the key asks of the chemistry growth partnership Mr Osborne: What the hon. Lady says does not bear and is listed in the green book. Will the Chancellor a resemblance to what has been announced this week. continue to support the chemical industry, which is the The south-west is one of the biggest winners from the UK’s biggest manufacturing exporter and is helping to infrastructure plan that we have announced, with a make the north-east one of the fastest growing regions massive upgrade of the A303 and the A358. In all the of the UK? years of the Labour Government, nothing happened to those roads. The Dawlish rail line had problems when Mr Osborne: My hon. Friend is right that the new the storms came, which I guess says something about catapults that we have set out—the formulation centre the investment that the Labour Government put into it, and the investment in the high-value manufacturing but I will move on from that. Not only have we repaired catapult—will help the north of England, particularly the rail line; we are looking at an alternative route to around the area that he represents. Support for the increase resilience to the south-west. We have also provided chemical industry is important. The changes to energy new trains on the sleeper route and made local road taxation in the Budget will help the chemical industry. improvements, such as the— There might be an opportunity to look at specific things that we could do to help the chemical industry further, Alison Seabeck: They’re crumbs! rather than all energy-intensive industries. I am happy Mr Osborne: This is billions of pounds of investment to have that discussion with him and other Members into the south-west of England that never happened who represent constituencies with chemical manufacturers. under the Labour Government. The Labour Government completely neglected the south-west of England, and Mr Ronnie Campbell (Blyth Valley) (Lab): If the the Labour MPs who represented those constituencies Chancellor is right that the UK is the leading world got absolutely nothing from them. Conservative candidates economy, why does he not give health service workers and Members of Parliament are delivering for the south- their 1% increase? west.

Mr Osborne: Of course, our pay settlement does give Chloe Smith (Norwich North) (Con): Rail passengers health service workers 1%. For those on progression in East Anglia deserve a fair deal, and my hon. Friends the pay, we are saying that there should be a 1% pay rise in Members for Ipswich (Ben Gummer) and for Witham total. We are able to afford a strong national health (Priti Patel), my right hon. Friend the Member for service, to put the money into the national health service Chelmsford (Mr Burns) and I have worked hard for our that we have announced over the past few days and to constituents. I welcome the Chancellor’s commitment to support the NHS’s forward plan about its bright future the East Anglian economy, not just the road improvements only because we have a strong economy. In the north-east but specifically his backing for two key recommendations of England, as the hon. Gentleman knows, we are of the Great Eastern main line taskforce and the work investing in jobs and roads. I would have hoped that he of its thousands of supporters, including the new Anglia would welcome the news this week on the A1 Gateshead local enterprise partnership. I also welcome his commitment bypass and the A1 north to Ellingham. to track improvements and new trains. 335 Autumn Statement3 DECEMBER 2014 Autumn Statement 336

Mr Osborne: I pay tribute to my hon. Friend, who Barry Gardiner (Brent North) (Lab): Will the Chancellor has done a brilliant job in bringing to my attention, and confirm that the £2.3 billion identified for flood defences that of Parliament, the needs of Norfolk, Norwich and was originally announced last year, and that of the East Anglia. Because of her campaigning, and that of 1,400 schemes he says are going forward, 1,119 are not my hon. Friend the Member for Ipswich (Ben Gummer), fully funded but rely on 80% partnership funding and a we have the Norwich in 90 and Ipswich in 60 campaigns, 10% efficiency saving that has yet to be made? Will he and the report. We are committing new trains to speed also confirm that the 300,000 households he says will up those journeys, as well as a massive road investment have a reduced flood risk are going from “low” to “very on the A47, A11, A12 and A14. None of those things low” risk, and that households at “significant” or “high” happened under a Labour Government, and East Anglia risk will rise from 490,000 to 800,000 in the next six years? was completely neglected in terms of infrastructure for the future. That is not the case any more and my hon. Mr Osborne: I know the hon. Gentleman represents a Friend has put East Anglia on the map. constituency named after a river, but he has not been fair about our flood defence policy. Did we set out the Michael Connarty (Linlithgow and East Falkirk) (Lab): money last year? Yes, we did. We then said, “Let’s have When I was a teacher of children with learning difficulties, a plan for how to spend that money”, and this week we some of the children did not finish the race but were still have announced all the different schemes that show how given a prize. The Chancellor is different: he has run it can best be used. That is an increase on the capital only half the distance he promised by the next election. funding that the previous Labour Government provided. Instead of apologising for not getting rid of the deficit Flood defence schemes have always involved a contribution as he promised, he wants us to applaud him. He says we from businesses, and today I announced—the hon. are all in it together, but for the people I represent, yes, Gentleman did not mention this—that we are expanding the claimant count has gone down, but the real value of the tax relief available for those contributions. their income has gone down by £2,000 per household. Last weekend, at Tesco, the warm-hearted people of my Martin Vickers (Cleethorpes) (Con): Unlike the hon. constituency had a massive collection for food banks. Member for Brent North (Barry Gardiner), my constituents When will the Chancellor deliver for those people, welcome the Chancellor’s announcement on flood defences, instead of the millionaires who he claims are all in it particularly this week which marks the first anniversary together with them? of the tidal surge that flooded so many homes and businesses in my constituency. Cleethorpes has enormous Mr Osborne: I have taken measures to reform stamp potential for growth, as the Chancellor and Government duty in a progressive way and introduced a tax, which have recognised, and to maximise that growth and could have been introduced in any Budget by a Labour support the rail franchises that my right hon. Friend Chancellor, to deal with multinational companies that referred to—particularly the south trans-Pennine route—it divert their profits overseas. I have ensured that profits is essential to maintain coast-to-coast, east-to-west cannot be written off against losses incurred during the connections. Will the Chancellor do all he can to ensure financial crisis—again, any Labour Chancellor could that? have done that but they did not. I am determined to ensure that the richest in our society make a contribution Mr Osborne: I certainly give my hon. Friend that and that businesses pay our low taxes. More generally, assurance. He is a doughty champion for Cleethorpes the result of a pro-business policy is that in the hon. and its strong road and rail links. He has raised train Gentleman’s constituency alone—I think he just dismissed services with me and I am looking at that, as is the this out of hand—unemployment has fallen by 20% in Transport Secretary. We are determined to provide a the last year. I would have thought he would welcome great service to the people he represents, and ensure that that. they travel in comfort. Today’s announcement about replacing outdated Pacer trains with new, modern trains Mr Robin Walker (Worcester) (Con): In our nation of will be welcomed across the north of England. shopkeepers there will be relief at the decision to extend small business rates relief and increase the benefit for Teresa Pearce (Erith and Thamesmead) (Lab): The small shops and cafés to £1,500. In his review of business Chancellor spoke about fiscal discipline and welfare rates, may I urge the Chancellor to take account of the reduction, yet it seems that the Office for Budget Business, Innovation and Skills Committee report that Responsibility might not agree. Its “Blue Book” shows urged a fundamental reform? The Conservative party that the bill for housing benefit for people not on believes in low taxation, and it needs to reform jobseeker’s alliance will rise year on year. More worryingly, fundamentally a tax that can only ever go up. despite repeated assurances from the Work and Pensions Secretary in this House that universal credit is on time Mr Osborne: My hon. Friend is a champion of small and on budget, the OBR has reviewed all the evidence businesses in Worcester and infrastructure investment and states that there remains “considerable uncertainty” in Worcestershire and that part of England, and I thank around its delivery, and “broader uncertainties” over him for his representations. In part because of those the eventual cost. In whom does the Chancellor have representations, we have been able to help with business more faith: the OBR or the Secretary of State for Work rates and high street shops in the statement. We now and Pensions? want a review of business rates, but it must be done in a way that is consistent with stable public finances. It is Mr Osborne: Universal credit is a change to our appropriate to consider how the modern economy has welfare system that makes sure that it always pays changed and the impact of things such as the internet, to work. I pay tribute to my right hon. Friend the Work and that is why we are undertaking that big review. and Pensions Secretary because he is pioneering what I 337 Autumn Statement3 DECEMBER 2014 Autumn Statement 338

[Mr George Osborne] Mr Osborne: I think everyone in this House knows what an incredible job the hospice movement and hospice think are important far-reaching changes to the incentives charities do. I am a patron of the East Cheshire hospice. in our country that encourage work and support people From the conversations I have had with my hon. Friend in work. We have introduced a welfare cap. That is a and his colleagues, I know what a brilliant job the brand new mechanism for controlling welfare spending, hospice in his area does. This measure is something that including identifying pressures such as rising housing hospices have long asked for. They have been unfairly benefit bills that were completely ignored in the past by discriminated against, in comparison with the NHS, the Labour Government. If a Government are not when it comes to VAT. We are going to refund that VAT prepared to address increases in one benefit with reductions and give the hospice movement the support it deserves or measures on other benefits, they are required to in recognition of the brilliant job it does. come before the House and ask for a vote because they have reached the cap. We have not done that because we Stephen Doughty (Cardiff South and Penarth) (Lab/ are within the cap, as the OBR report confirms. Co-op): The Chancellor has made a number of statements Ben Gummer (Ipswich) (Con): Last October, youth today on infrastructure, but of course developing our unemployment in Ipswich fell to the lowest point since infrastructure requires a thriving UK steel industry and records began—a fall directly attributable to the Chancellor’s supply chain. Will he explain why he and the Secretary policies. The future of young people in Ipswich is now of State for Business, Innovation and Skills have chosen much brighter because of his commitment to the Great not to bring forward the energy-intensive industries Eastern main line and I thank him for that. Will he compensation package that he announced in the Budget comment on the fact that the only way that scheme will earlier this year? Does he believe that the UK steel not happen is if the Labour party stops the franchising industry faces a level playing field, and if not, what is he process, which is precisely what it has promised to do? going to do about it?

Mr Osborne: I pay tribute to my hon. Friend. I have Mr Osborne: I have long thought that there is a been to Ipswich and seen what he has done to attract challenge in ensuring that commitments to reduce carbon businesses and jobs, and to champion big infrastructure are consistent with having a vibrant and successful steel improvements, such as in relation to the A14 and the industry and other energy-intensive industries. What we Ipswich in 60 campaign. Those things would be under hear when we go to Port Talbot and elsewhere is a real threat under a Labour Government. The Labour party’s concern that UK energy prices could be higher than rail franchising policy would prevent the improvement they are on the rest of the continent of Europe if we in train services to East Anglia. Big infrastructure projects adopt measures such as a decarbonisation target. That that never happened under a previous Labour Government is why the Conservative party is not in favour of a would almost certainly never happen under a future decarbonisation target. Unfortunately, the Labour party Labour Government. is in favour of it and the steel industry might be one of the industries that will bear the cost. Jack Dromey (Birmingham, Erdington) (Lab): After another broken promise made in 2010 that front-line policing would be protected, 16,000 police officers have Gordon Birtwistle (Burnley) (LD): I congratulate the gone, including 8,000 from the front line. The Association Chancellor on his plan to reduce the job tax on apprentices of Chief Police Officers has said that, based on the up to the age of 25. The country is obviously on the rise Chancellor’s plans for the future, at least another 16,000 and manufacturing industry is booming, but we have a police officers will go, the majority from the front line, big problem with skills shortages. I am sure this measure threatening its ability to discharge its statutory duties will go a long, long way towards training young people and protect the vulnerable. Is ACPO right? to do the jobs of the future that this country will desperately need. Mr Osborne: Because of the hard work of the police and the reform that has been undertaken, crime is down Mr Osborne: My hon. Friend has been a consistent and there is more policing on the front line. That shows champion of apprentices in Burnley and of the that savings can be made to the Home Office budget apprenticeship policy. He sends me and other colleagues while achieving reform. The hon. Gentleman’s question in the Government a regular report of what is going on again reveals the default position of the Labour party. in Burnley and what more we can do to support apprentices. The shadow Chancellor attempts to say that it has I am careful to make sure that I read that report each newly converted to fiscal discipline and that it would time it comes in. It is partly because people like him take the difficult decisions. Every single Labour MP have been raising this issue with us that we have taken then gets up and complains about future spending and the big decision today to abolish the job tax when it welfare decisions. That just shows that they are totally comes to employing young apprentices. It is a major unreformed and unreconstructed. step forward in supporting apprentices and I think it will open the path to having 3 million apprentices in the Iain Stewart (Milton Keynes South) (Con): I thank next Parliament. my right hon. Friend for the additional help he has given to hospices. Will he join me in paying tribute to the staff and volunteers at Willen hospice in Milton Keynes, which Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op): provides patients and their families from my constituency, It is very encouraging that the Chancellor recognises the constituency of my hon. Friend the Member for the importance of transport investment for creating the Milton Keynes North (Mark Lancaster) and indeed powerhouse of the north, but he has not committed to a your constituency, Mr Speaker, with incredible support. funded programme to implement the changes that are 339 Autumn Statement3 DECEMBER 2014 Autumn Statement 340 required right across the north. Why did he single out David Morris (Morecambe and Lunesdale) (Con): In the Manchester-Leeds link, which is just a part of what the past four-and-a-half years, my constituency has is required? benefited from the Chancellor’s policies. Some £700 million has been invested in my constituency, and I thank him Mr Osborne: First, we have announced this week for that. The greatest gift of all is the Government’s important changes to support infrastructure in and absorption of VAT on hospices. Does he agree that that around Liverpool, including to the port of Liverpool, will help St John’s hospice, and that the policy is long which is a very exciting source of economic development overdue? I thank him for listening. on Merseyside. Secondly, the trans-Pennine link supports journeys from Liverpool all the way over to Leeds and Mr Osborne: My hon. Friend is a great champion of Hull, but we also want investment in the rail services in his constituency in Lancashire. He has raised with me and around Merseyside. That is why we are electrifying and the rest of the Government the great work that St the lines in that part of the north-west and why we are John’s hospice does and the unfair treatment, in comparison looking for major investment in HS2, so that journeys with the NHS, that it and other hospices have endured from Liverpool to Birmingham and London will be because of VAT. We have listened to him and to other much quicker once the train joins the track at Crewe. hon. Members and have taken this step forward. We Those are all measures that we are taking to support wish the staff at St John’s well with all the great work Liverpool. they do. I also announced major investment in science in the north, and Liverpool will be one of the beneficiaries of Mr Adrian Bailey (West Bromwich West) (Lab/Co-op): that. This is all about trying to work together. I am very I welcome the belated recognition from the Chancellor happy to do that on a cross-party basis, with Members of the importance of investment in the regions, but may of Parliament representing Liverpool, Joe Anderson—the I remind him that the west midlands has the second mayor of Liverpool—and the Government, to see what highest number of unemployed and the second lowest more we can do to increase the economic potential on growth in employment in the country? What provisions Merseyside. are there in the Budget to respond to the proposals in the joint submission by the Black Country and Greater Mr David Burrowes (Enfield, Southgate) (Con): As Birmingham and Solihull local enterprise partnerships? we approach small business Saturday, I, on behalf of Those proposals are designed to expand the black country my high streets, welcome the package of measures to enterprise zone and the transport infrastructure between reduce the impact of business rates. What should I tell the two areas to ensure that Birmingham and the black my businesses about the impact of following the shadow country become the powerhouse of the west midlands. Chancellor’s proposal to increase corporation tax? Mr Osborne: I am absolutely ready to engage with Mr Osborne: The shadow Chancellor and the Labour authorities, including of course Labour authorities, in party want to increase corporation tax. That is their Birmingham and in the rest of the west midlands on stated policy on the legislation this House has passed. what more we can do to invest in the west midlands. We They make it pretty clear that they would increase have had a good and productive cross-party relationship national insurance if they ever came to office. That with the Labour leaders in Manchester, and I would like would be devastating for the small businesses of Enfield, to see that replicated in Birmingham, with Albert Bore, and indeed of the whole country. We know what happens and with the Conservative, Labour and Liberal Democrat when there is a Labour Government. We know the authorities in the black country. We are willing to do impact on businesses: the high unemployment and the that and to hear their good ideas. business closures they would create, because that is A number of proposals have been made on enterprise exactly what happened five years ago. zones. We will make an announcement in the Budget. A lot of good ideas have come in. We were not ready to Ms Margaret Ritchie (South Down) (SDLP): I welcome assess all the different bids to make a decision in time the commitment to the devolution of corporation tax to for the autumn statement, but we will do that in time for Northern Ireland, but there remains uncertainty on the the Budget. cost to the block grant. Will the Chancellor outline the possible cost to the block grant over an estimated James Morris (Halesowen and Rowley Regis) (Con): period, and will he outline the timeline for devolution, I welcome the Chancellor’s statement, particularly his predicated on the outcome of cross-party talks? commitment to new spending on the NHS. Does he agree that we can invest in things such as the new Mr Osborne: The costs of Northern Ireland reducing, Midland Metropolitan hospital in Sandwell and improved for example, corporation tax rates to the level seen in services at Rowley Regis hospital only if we stick to our the Irish Republic have been set out and are the subject long-term plan and have strong economic growth? of discussions that we have had over the past year with the Northern Ireland Executive. We need to be sure—this Mr Osborne: I have visited with my hon. Friend the is about the taxpayers across the whole of the UK—that great local NHS that he does so much to support and if we go ahead with this step, which we are very well have seen his commitment to major capital investment disposed towards, the Northern Ireland Executive will in new hospital services. I hope his area will also benefit be able to manage the pressure on their resources. That from the new £1 billion fund for improving primary will be one of the topics for discussion in the cross-party care facilities so that we can deliver secondary care-style talks. If the cross-party talks are successful we could, as services in our communities, working with our GPs. I said in the statement, introduce legislation in this That will be a huge investment, on top of the big Parliament. investment he has already secured for his area. 341 Autumn Statement3 DECEMBER 2014 Autumn Statement 342

Lilian Greenwood (Nottingham South) (Lab): Given Andrew Percy (Brigg and Goole) (Con): In the Humber that one in five workers are earning less than the living before the last election, youth unemployment was rising, wage, that wages have fallen further in this Parliament unemployment was rising, there was no real rail than in any Parliament since Victorian times, and that investment—which is hard to say with our accent—there the Chancellor is spending billions of pounds more on were no significant road improvements and we were tax credits and housing benefit for working people, is it becoming worse off compared with the south of England, any wonder that tax receipts are lower than expected but now our bridge tolls have been halved and there is and borrowing is higher? Does he finally understand massive investment in our flood defences. I thank the that the cost of living crisis he has created for my Chancellor for his announcements. Will he assure me constituents is self-defeating and the very reason he has that our joint bid to him and the Prime Minister will be had to break his promise on the deficit? considered seriously and that the £1 billion funding over the next 15 to 20 years will be considered quickly so that we can get certainty as soon as possible? Mr Osborne: The hon. Lady neglected to say that in her constituency unemployment has fallen by 17%— Mr Osborne: As we said this week, we are giving [Interruption.] That seems to be a source of disappointment serious consideration to the bid that my hon. Friend, to the local Labour MP. It should be a source of his colleagues and others in the Humber estuary area encouragement to people living in Nottingham South put forward for major improvements in flood defences. that jobs are being created and that people can get We are already investing in flood defences this week, them. However, we have to ensure that people have the which was welcome news, and his proposal is a big right skills to get those jobs, which is why we are and well-argued one to which we are giving serious supporting apprentices in her constituency. Of course, consideration. As he rightly said, on top of that we have people in Nottingham would see themselves returned to seen major improvements into the Humber and, thanks the economic instability and crisis of the past if there partly to his campaigning, the Humber bridge tolls were another Labour Government. came down and traffic has increased.

Oliver Colvile (Plymouth, Sutton and Devonport) Phil Wilson (Sedgefield) (Lab): I welcome the news (Con): I thank my right hon. Friend for his comments that the national formulation centre will be based in about postgraduates and science investment and for the Sedgefield at the North East technology park in my billions of pounds he is proposing to invest in south-west constituency, which was opened 10 years ago by my transport infrastructure. Does he recognise that Plymouth’s predecessor. Is the Chancellor aware that the chemical priority is a sustainable railway line that delivers more and other industries in the Tees valley use Durham Tees three-hour train journeys between London and Plymouth Valley airport to reach global markets and that this and ensures that we get trains into Plymouth before could be affected by the devolution of air passenger 9 am in order to deliver the city deal? duty to Scotland? What plans does he have to ensure that small regional airports, such as Durham Tees Valley airport, in the north of England are not disadvantaged Mr Osborne: My hon. Friend has been a great champion by these changes? for Plymouth—I have visited some of the economic developments taking place there with him—including Mr Osborne: I am pleased to say that the current for better rail services, and the work on how to improve Member for Sedgefield probably gets a better hearing at those services is under way because of his interventions. the Treasury than the last Member for Sedgefield ever In addition, there are now major improvements on did. The formulation centre is great news for the north-east roads into the south-west. There was never any investment and Sedgefield, but the hon. Gentleman raises a serious into the south-west when there was a Labour MP point that we will have to look at. The Smith commission— representing his constituency. This is all proof that and, to be fair, the Calman commission before it Conservatives in the area are champions for the south-west —recommended the devolution of air passenger duty, and are delivering for the region. and we absolutely accept that recommendation. However, we will have to consider the impact, particularly on the Jonathan Ashworth (Leicester South) (Lab): The airports in the north-east of England, which are Chancellor asked in 2010 that we judge him on whether geographically close to some of the Scottish airports. he balanced the books by 2015, and he is set to fail that The shadow Chancellor raised the same point. I am test. Will he explain why, compared with March, he has happy to work with the hon. Gentleman and the Labour had to revise up borrowing for this year and next by Front-Bench team, on a cross-party basis—we worked £12.5 billion? together like that on the Smith process—to see what we can do to support airports in the north-east.

Mr Osborne: The hon. Gentleman, like the shadow Charlie Elphicke (Dover) (Con): The Chancellor used Chancellor, neglects to say that borrowing has been to receive representations that he was doing too much, revised down for the following three years of the forecast too fast, but now Labour Members think he did not go and that the structural deficit continues to fall at the quickly enough. Given its muddled and confused position, same rate. The problem for Labour is that it has been if we were to adopt a plan from these people, what parading around the television studios for the past two would be the implication for interest rates in particular weeks saying, “Wait for the autumn statement and the and economic policy and growth in general? big deterioration in the public finances.” Unfortunately for them, it has not happened. That is the problem with Mr Osborne: Of course, Labour economic policy a shadow Chancellor who keeps staking the credibility would increase unemployment, reduce GDP and potentially of the Labour party on his terrible economic predictions. put Britain back into recession. We know that its feeble 343 Autumn Statement3 DECEMBER 2014 Autumn Statement 344 commitments on borrowing would allow at least £26 billion Mr Osborne: The Labour Chancellors in the last of extra borrowing every single year, and as has been Government who came from Scotland in the end gave demonstrated over the past hour or so, every Labour this country the highest budget deficit in its peacetime MP actually wants to spend more money and increase history. They left a country with high unemployment, welfare bills. That is the real Labour party, and of and questions were being asked about Britain’s ability course it would bankrupt the country again. to pay its way in the world. We have turned that around: unemployment has fallen across the United Kingdom Mr William Bain (Glasgow North East) (Lab): The and in Scotland, and the part of our UK that is seeing Chancellor made just one passing reference to wages in the fastest rate of job creation at the moment is Scotland. his statement, some 42 minutes in, and small wonder. Will he confirm that the OBR has this afternoon revised Julian Smith (Skipton and Ripon) (Con): The down its forecast for income tax and national insurance Chancellor’s northern powerhouse vision is seeing the contribution receipts through to 2018-19 by a further greatest transfer of powers and money south to north £11.8 billion, with £9 billion of that down to lower-than- for generations. Will he confirm that in doing more to forecast growth in wages? How can the worst Chancellor devolve powers to northern cities, rural and county on wages for 140 years ever be the answer to higher areas will not lose out? living standards in the next Parliament?

Mr Osborne: I actually talked about tax receipts and Mr Osborne: I can give my hon. Friend that assurance. earnings early on in the statement. I pointed out that This is a policy not just for cities, but for the shire although tax receipts were lower, crucially they were counties that surround them. Rather like him, I represent offset by lower debt interest payments, which is why we a shire country seat outside a great northern city. This is have not seen the big deterioration in the public finances about strengthening the transport links between the that was forecast. Borrowing was lower towards the end shire counties and the cities; it is about making sure that of the period than was forecast at the last Budget; the superfast broadband is available in our rural areas; it is surplus is higher than predicted; and the structural about supporting towns and not just cities in the north deficit is on course for the reductions we set out. That is of England. It is about ensuring that the whole thing is because although tax receipts were lower, debt interest connected up in a way that it has not been before, so payments were also lower. that the north of England has the economic clout of a great global city. I think we are well on the way to Rehman Chishti (Gillingham and Rainham) (Con): I developing that. very much welcome the Chancellor’s statement, and I would like to thank him for the previous measures he Sheila Gilmore (Edinburgh East) (Lab): Before the introduced, which have led to youth unemployment Chancellor of the Exchequer tells me the unemployment going down and overall unemployment going down in figures in my constituency, I of course welcome the fact Gillingham and Rainham, with businesses and jobs that the claimant count is down—but that is not necessarily going up there. Linked to that, I thank the Chancellor the same as unemployment, as the right hon. Gentleman for the £30 million previously given to Medway through knows. We are now getting closer to the point where we the growth deal to support the infrastructure. Linked to were through the whole of the first 10 years of the last that, I thank him today for the specific support given to Labour Government, so we have only gone back to small businesses, which are at the heart of my constituency, where we were. However, a £6 billion increase on overall in creating jobs and prosperity. Linked to that, I thank housing benefit spending over the course of this Parliament him for his visit to MEMS Power Generation in my has contributed to the Chancellor’s failure to meet his constituency, which was very much appreciated. deficit reduction targets. When will his Government actually tackle the underlying causes, which are high Mr Speaker: The hon. Gentleman can also thank me rents and low wages? for my indulgence. Mr Osborne: First, it is no good saying that the first Mr Osborne: I fondly remember my visit to Gillingham 10 years of that Labour Government were great and and the Gillingham town strip I was given when I was that we should forget about the last three, which brought there. My hon. Friend is a great champion of Gillingham’s about the greatest recession since the 1920s. It is a bit businesses and transport links in the town. Many of the like Mrs Lincoln being asked about that play. small business rate decisions we have taken today are in no small part due to the campaigning my hon. Friend We have taken a number of steps to try to cap has done on behalf of Gillingham’s businesses. housing benefit, rent increases and the housing benefit associated with them; we have introduced a cap on Gemma Doyle (West Dunbartonshire) (Lab/Co-op): housing benefit payments. When we came to office, As the Chancellor’s Parliamentary Private Secretary passes there were examples of some people receiving over him whatever fact is useful in answering my question, £100,000 a year from taxpayers in housing benefit, let me tell the right hon. Gentleman that earlier this year, which is of course totally unacceptable. We have taken long-term youth unemployment in West Dunbartonshire those steps, and now we have the welfare cap as well. All had rocketed by 625% on his watch. That is nothing to I can say is that every time Labour Members stand up, be proud of. He has driven down the living standards of we hear about a proposal to add to the housing welfare my constituents and he has driven down the value of benefit bill, and that it would be good to hear some their wages. When is he going to admit that he has failed proposals from them to reduce it. on the economy? Will he apologise to people in West Dunbartonshire for the misery he has caused them? Jason McCartney (Colne Valley) (Con) rose— 345 Autumn Statement3 DECEMBER 2014 Autumn Statement 346

Mr Speaker: Gosh. The hon. Gentleman appears to Mr Osborne: My hon. Friend is, of course, absolutely be experiencing some discomfort, which I do not like to right. He came to No. 11 Downing street with see. We must hear from Mr Jason McCartney. representatives of businesses from the whole of the north-west, and particularly with those businesses that create and support jobs in Carlisle and across Cumbria. Jason McCartney: Thank you, Mr Speaker. It is my My hon. Friend, of course, has been instrumental in marathon training, and in that vein, I ran the London getting the Government to look at the A69 and the A66 marathon for the Forget Me Not children’s hospice this to see what more can be done to support those east-west year. Along with it and my local Kirkwood hospice I links across the very north of England. Without him as would therefore like to thank the Chancellor for the MP for Carlisle, that study would not have happened. measures he has taken in refunding VAT. The Forget Me Not children’s hospice is recruiting two apprentices at the moment, so will my right hon. Friend continue to Diana Johnson (Kingston upon Hull North) (Lab): support apprenticeships, 4,200 of which have been created Why does the Chancellor consistently forget to mention in my constituency since 2010? Hull when he is talking about the northern powerhouse, particularly when people in Hull seem to think that the northern powerhouse is a new electrical store that is Mr Osborne: It seems like the autumn statement is a opening and not the joined-up plan for the whole of the tailor-made package for the marathon run that my hon. north that it is? He can redeem himself, however, by Friend is undertaking. In view of the brilliant work that announcing today the privately financed initiative to he does in his community and the brilliant work of the electrify the line to Hull, for which we are all waiting. Forget Me Not hospice, I am pleased that the VAT refund, along with the abolition of the jobs tax on apprenticeships, Mr Osborne: Of course, we are waiting for it partly will be so welcome. My hon. Friend must send me a because under 13 years of the Labour Government, it sponsorship form. Every year I sponsor the shadow never happened. We are looking at improving rail Chancellor, so the least I can do is to sponsor my hon. connections to Hull. I was there fairly recently and Friend. talked to Lord Haskins, the head of the local enterprise partnership. I go out of my way to say that Hull should Mr David Lammy (Tottenham) (Lab): As a former be part of the northern powerhouse, and I have talked universities Minister, I welcome the loan scheme for about the links between Liverpool, Manchester, Leeds masters students in the statement. However, could not and Hull across the east-west link of the north of the Chancellor say more about the structure of the England. I think there are real opportunities, alongside economy? The reason why the tax receipts are so low is the flood defence programme in the Humber estuary partly because Britain has lost 1.2 million jobs in the that we have talked about. The investment in the enterprise skilled middle section of the economy—the plumbers zones there and the Siemens investment in Humberside and the mechanics, for example. Many of those jobs are important. There are lots of great things happening have been replaced by customer services, which certainly in Hull, and the “Hook up Hull” campaign is yet forms the increase in London. Will the Chancellor say another example of a great campaign that we are looking something about how to restructure the economy, as we to support. have heard nothing about that today? Bill Wiggin (North Herefordshire) (Con): Can the Chancellor explain why he wants to introduce his stamp Mr Osborne: I think the right hon. Gentleman is duty changes at midnight rather than a little further being a little unfair about the autumn statement, but I down the road? agree with the challenge he presented to us—how to improve the productivity of the United Kingdom. The Mr Speaker: Order. I am sure that the hon. Gentleman measures we take to support postgraduate loans and to was here all along. He did not leave the Chamber—or support apprenticeships, alongside the education reforms did he? at primary and secondary level that my right hon. Friends the Education Secretary and her predecessor Bill Wiggin: He might have done. have implemented, are all designed to try to improve the skills in the country. We are all working together to try Mr Speaker: He might have left the Chamber? In that to address the productivity challenge that we face. Frankly, case, we cannot take his question. we faced it for a long time in the past, as our productivity lagged behind some of our European competitors, let Mr Osborne: It was quite a good question. alone that of the rest of the world. We need to do more. That can be achieved in London partly by investments Mr Speaker: It might be. Go on, get in there. in infrastructure, including those in the Tottenham area. Mr Osborne: The stamp duty changes must be introduced John Stevenson (Carlisle) (Con): For the people of with immediate effect today because otherwise transactions Carlisle, average wages and house prices are lower than in the housing market would stop as people waited for the national average. The announcements on the raising them. Given that 98% of home buyers will see a tax of the personal allowance and the stamp duty reforms reduction, that would freeze quite a large part of the will be extremely welcome. I fully support them. Does market. [Interruption.] I am told that the figure in the Chancellor agree that when it comes to discussions Herefordshire is 99%. about the northern powerhouse, and particularly about May I take this opportunity to thank you, Mr Speaker, local government and civic reform, it is also vital that and the Clerks for the discussions that we have had over Carlisle and Cumbria are not forgotten? the last few days to make this possible. 347 Autumn Statement3 DECEMBER 2014 Autumn Statement 348

Mr Speaker: I am glad that the hon. Member for the economy, and failing to meet his own deficit reduction North Herefordshire (Bill Wiggin) has received his answer, targets, the Chancellor is presiding over a low-pay, but I must say that to toddle out of the Chamber and zero-hours-contract economy in which one in five people— then beetle back in and expect to take part, in defiance one in three in my constituency—are paid below the of the conventions of the House, renders the hon. living wage. Is it not an insult to the 3 million people on Gentleman a cheeky little boy. the lowest incomes, and an insult to the value of British fair play, that the Government will be hammering them Bill Wiggin: There is nothing little about me, Mr Speaker. yet again with a potential cut in tax credits?

Mr Speaker: I use the term with some poetic licence, Mr Osborne: Today we have increased the personal it must be admitted. allowance, which increases the number of low-paid people taken out of income tax to 3.5 million. Nia Griffith (Llanelli) (Lab): The Chancellor is quick It is interesting to look at the caricature of what is to blame the eurozone. However, the UK now languishes happening in this country that Labour Members have as 22nd out of the 28 EU countries in terms of export tried to present. They said that all the jobs were part-time; growth. What specific measures will he take to improve it turns out that 85% of them are full-time. They talked it? about the gender pay gap; of course that remains a challenge, but it is at its lowest level in British history, Mr Osborne: As I said in my statement, we face a and has fallen since the period of the last Labour major challenge when it comes to increasing our exports. Government. They complained about the abuse of zero- As the Office for Budget Responsibility made clear, it hours contracts; I had to sit there for 13 years listening has been a challenge for the British economy for the to Labour Chancellors, and never once did they introduce past 20 years. If anything, however, the decline in our a reform of zero-hours contracts. That reform is now exports has slowed down slightly in recent years, compared taking place, and we are ending the abuse that comes to what was happening under the last Government. with the exclusive contracts. Today I have committed myself to a £45 million fund, which will be available both to UK Trade & Investment Ultimately, the people who suffer most when the and to the Foreign Office, to increase our trade links economy fails—when economic stability is destroyed with the new emerging economies of the world, and to and unemployment rises—are the poorest people in the support first-time exporters in particular. Lord Livingston country. That, sadly, was their experience under a Labour is doing a great job as Trade Minister, and I want to Government, but under this Government, employment back him. is growing and economic security is returning.

Dr Julian Huppert (Cambridge) (LD): There is much Andrew Jones (Harrogate and Knaresborough) (Con): to welcome in the autumn statement, including investment I warmly welcome the statement. I welcome, for instance, in the NHS and, in particular, investment in mental the support for small businesses, apprenticeships and health. Strangely, that has not been mentioned in any of the NHS, but the news that the Pacer trains will go from the questions so far. the northern franchise will be particularly welcome in I especially welcome the excellent news about the my constituency. Will my right hon. Friend continue to introduction of income-contingent postgraduate loans. prioritise infrastructure investment as a driver of economic I agree with what was said earlier by the right hon. growth? Member for Havant (Mr Willetts). Indeed, when he was a Minister I worked with the National Union of Students Mr Osborne: Yes, I will. When it comes to these Pacer and CentreForum to persuade him to do exactly this, trains—[Interruption.] Labour Front-Benchers had all so it is great to see it happening. More people from those years in which they could have got rid of the disadvantaged backgrounds obtain undergraduate degrees, Pacer trains. They complain about them now, but what but then find that they cannot afford to engage in about all the endless Labour Transport Secretaries who postgraduate study. This welcome and long-awaited did nothing about them? This is happening now, with a change will lower a barrier to social mobility. Conservative Chancellor, a Conservative Transport Secretary, and a Conservative Member of Parliament Mr Osborne: I thank my hon. Friend for what he has for Harrogate and Knaresborough. said. I should have been extremely disappointed if my announcement of a big improvement in our support for Guy Opperman (Hexham) (Con): People in the north-east postgraduate students had not been welcomed by the will welcome the news about the NHS, hospices—including Member of Parliament for Cambridge. He is absolutely those in my constituency—carers, who will set great right: the lack of financial support available to people store by the Chancellor’s announcement, and home doing post-grads is indeed a barrier, which falls particularly buyers. I also welcome the Chancellor’s comments about on those from low-income backgrounds, and which has northern airports and air passenger duty. May I urge been identified as a real problem in a number of reports him to revisit the north-east in the spring, when we will on social mobility. I am glad that we have been able to introduce him to a region that has the most technology work together to bring about this change. start-ups outside London, and has experienced the fastest rate of growth in private sector businesses over the last Debbie Abrahams (Oldham East and Saddleworth) quarter? (Lab): The OBR’s analysis clearly states that borrowing over the forecast period will increase above and beyond Mr Osborne: Of course I am always very happy to what was forecast back in March, predominantly as a visit the north-east. I was there quite recently, and will result of the reduction in tax receipts. Far from rebalancing be going again very shortly. 349 Autumn Statement3 DECEMBER 2014 Autumn Statement 350

[Mr George Osborne] Step 1 Apply the rates specified in the second column of Table A in There have been a number of great pieces of news for subsection (IB) to the parts of the relevant consideration specified the north-east this week. There are the improvements to in the first column of that Table. the A1 around Newcastle and Gateshead and up to Step 2 Ellingham, and the commitment to look at dualling Add together the amounts calculated at Step 1 (if there are two or beyond that. There are the improvements that we are more such amounts). looking at for the A69 and the A66, which is something Step 3 that my hon. Friend has raised with me personally. Multiply the amount given by Step 1 or Step 2, as the case may be, There is also the big investment in science in the north-east. by— I am particularly pleased to support investment in the C brilliant work that Newcastle university does on ageing. R Mr Speaker: I will shortly call the Chancellor of the Exchequer to move a provisional collection of taxes where— motion. Copies of the motion are available in the Vote C is the chargeable consideration for the transaction, and Office. R is the relevant consideration.” In accordance with our Standing Order No. 51 on (5) In subsection (2) for the words from the beginning of that ways and means motions, subsection to the end of Table A substitute— “A Minister of the Crown may without notice make a motion “If the relevant land consists of or includes land that is not for giving provisional statutory effect to any proposals in pursuance residential property, the amount of tax chargeable is the percentage of section 5 of the Provisional Collection of Taxes Act 1968; and of the chargeable consideration for the transaction determined in the question on such a motion shall be put forthwith.” accordance with Table B below by reference to the amount of the I call Mr Chancellor of the Exchequer to move the relevant consideration.” provisional collection of taxes motion formally. (6) In subsection (3) for “subsection (2)”substitute “subsections (IB) and (2)”. (7) In subsection (4) at the beginning insert “For the purposes of PROVISIONAL COLLECTION OF TAXES subsections (1C) and (2),”. Motion made, and Question put forthwith (Standing (8) Omit subsection (7). Order 51(2), (9) Section 74 (exercise of collective rights by tenants of flats) is That, pursuant to section 5 of the Provisional Collection of amended as follows. Taxes Act 1968, provisional statutory effect shall be given to the (10) In subsection (1A)— following motion: (a) in the opening words, for “rate” substitute “amount”, Stamp duty land tax (residential property transactions) That— (b) in Step 2— (1) Part 4 of the Finance Act 2003 (stamp duty land tax) is (i) for “rate of tax and the” substitute “amount of’, and amended as follows. (ii) for “subsections (2) and (3)” substitute “subsection (IB)”, (2) Section 55 (general rules on calculating the amount of stamp (c) in Step 3— duty land tax chargeable) is amended as follows. (i) for “rate of tax and the” substitute “amount of”, and (3) In subsection (1) for “a percentage of the chargeable consideration for the transaction” substitute “determined in accordance with (ii) for “subsections (2) and (3)” substitute “subsection (IB)”, and subsections (IB), (1C) and (2)”. (d) in Step 4 for “subsections (2) and (3) do”substitute “subsection (IB) (4) After subsection (1A) insert— does”. “(IB) If the relevant land consists entirely of residential property (11) For subsections (2) and (3) substitute— and the transaction is not one of a number of linked transactions, “(IB) Where step 2 or 3 of subsection (1A) requires the amount the amount of tax chargeable is determined as follows— of tax chargeable to be determined in accordance with this Step 1 subsection, it is determined as follows. Apply the rates specified in the second column of Table A below Step 1 to the parts of the relevant consideration specified in the first Determine the amount of tax chargeable under section 55 as if column of that Table. the relevant consideration for the chargeable transaction were the Step 2 fraction of the relevant consideration calculated under step 1 of Add together the amounts calculated at Step 1 (if there are two or subsection (1A). more such amounts). Step 2

Table A: Residential Multiply the amount determined at step 1 by the number of qualifying flats contained in the premises.” Part of relevant consideration Rate So much as does not exceed £125,000 0% (12) In section 75 (crofting community right to buy) for subsections (2) and (3) substitute— So much as exceeds £125,000 but does 2% not exceed £250,000 “(1A) In that case, the amount of tax is determined as follows— So much as exceeds £250,000 but does 5% Step 1 not exceed £925,000 Determine the amount of tax chargeable under section 55 as if So much as exceeds £250,000 but does 10% the relevant consideration for the chargeable transaction were the not exceed £925,000 fraction of the relevant consideration produced by dividing the The remainder (if any) 12% total amount of that consideration by the number of crofts being bought. (1C) If the relevant land consists entirely of residential property and the transaction is one of a number of linked transactions, the Step 2 amount of tax chargeable in respect of the particular transaction Multiply the amount determined at step 1 by the number of crofts under consideration is determined as follows— being bought under that transaction.” 351 Autumn Statement3 DECEMBER 2014 Autumn Statement 352

(13) In section 77(l)(b) (notifiable transactions) for “which tax is Step 4 chargeable at a rate of 1 % or higher” substitute “any part of Multiply the amount found at Step 2 by— which tax is chargeable at a rate of more than 0%”. CD (14) In section 77A(2)(a) (notifiable transactions: exception of certain acquisitions of major interests in land: interpretation) for TDC “1% or higher” substitute “more than 0%”. where— (15) In section 80(2) (requirement to make return where contingency ceases, or consideration is ascertained, and tax or additional tax is “CD” is the consideration attributable to dwellings for the payable etc)— relevant transaction, and “TDC” is total dwellings consideration. (a) in the opening words, after “before” insert “(calculated in (2) But if the amount found at Step 2 of sub-paragraph (1) is less either case according to the effective date of the transaction)”, and than 1% of total dwellings consideration, for the purposes of paragraph 4(l)(a) “the tax related to the consideration attributable (b) omit paragraph (c), but not the “and” at the end. to dwellings” is an amount equal to 1% of the consideration (16) In section 80(4) (cases where less tax payable) after “in respect attributable to dwellings.” of a transaction” insert “(calculated according to its effective (27) For paragraph 5(7) substitute— date)”. “(7) For the purposes of paragraph 4(l)(b), “the tax related to the (17) In section 81ZA(l)(c) (alternative finance arrangements: additional remaining consideration” is the appropriate fraction of the amount tax where reliefs withdrawn to be calculated by reference to of tax which (but for this Schedule) would be due in respect of the effective date) for “by reference to the rates in force at” substitute relevant transaction. “according to”. (8) In subsection (7) “the appropriate fraction” means— (18) In section 81A(1) (requirement to make return in consequence of later linked transactions where tax or additional tax is payable RC etc)— TDC + TRC (a) in the opening words, after “before” insert “(calculated in either case according to the effective date of the earlier transaction)”, where— and “RC”is the remaining consideration for the relevant transaction, (b) omit paragraph (c), but not the “and” at the end. “TDC” is total dwellings consideration, and “TRC” is total remaining consideration. (19) In section 109(2)(b) (general power to vary Part 4 of the 2003 Act: power to alter descriptions of transaction chargeable at any (9) For a transaction that is not one of a number of linked existing rate or amount) after “amount” insert “, or in respect of transactions, “total remaining consideration” is the remaining which tax is calculated in accordance with any particular provision”. consideration for that transaction (see paragraph 4(3)). (20) In section 122 omit the entry for “rate of tax”. (10) For one of a number of linked transactions, “total remaining consideration” is— (21) In paragraph 3(l)(b) of Schedule 4A (certain high-value transactions not linked to other transactions for purposes of (a) the total of the chargeable consideration for all those transactions, section 55(4)) for “55(4)” substitute “55(1B), (1C) and (4)”. less (b) total dwellings consideration.” (22) Schedule 6B (transfers involving multiple dwellings) is amended as follows. (28) In paragraph 6(1) (change of circumstances after relief given) for paragraph (c) substitute— (23) For paragraph 4(1) substitute— “(c) had the event occurred immediately before the effective date “(1) If relief under this Schedule is claimed for a relevant transaction, of the transaction, more tax (calculated according to the effective the amount of tax chargeable in respect of the transaction is the date of the transaction) would have been payable, whether because sum of— the transaction would not have been a relevant transaction or (a) the tax related to the consideration attributable to dwellings otherwise.” (see paragraph 5(1) and (2)), and (29) In paragraph 6(3) (requirement to make return where more (b) the tax related to the remaining consideration (if any) (see tax payable than was paid) omit paragraph (c), but not the “and” paragraph 5(7)).” at the end. (30) In paragraph 8(1) of Schedule 7 (acquisition relief)— (24) Omit paragraph 4(4). (a) for “rate” substitute “amount”, and (25) For the italic heading before paragraph 5 substitute “The amount of tax chargeable”. (b) for “0.5%” substitute “an amount equal to 0.5% of the chargeable consideration for the transaction”. (26) For paragraph 5(1) and (2) substitute— (31) In paragraph 4B(1) of Schedule 9 (shared ownership transactions) “(1) For the purposes of paragraph 4(l)(a), “the tax related to the for “rate” substitute “amount”. consideration attributable to dwellings” is determined as follows— (32) In paragraph 12 of Schedule 9 (shared ownership trusts) for Step 1 “rate” substitute “amount”. Determine the amount of tax that would be chargeable under (33) In paragraph 30(2) of Schedule 15 (partnerships) in paragraph section 55 on the assumption that— (a) for “rate of tax chargeable under that section is 1% or higher” substitute “amount of tax chargeable under that section is not (a) the relevant land consisted entirely of residential property, and zero”. (b) the relevant consideration were the fraction produced by (34) In paragraph 3(3) of Schedule 17A (leases that continue after dividing total dwellings consideration by total dwellings. a fixed term: additional tax to be calculated by reference to Step 2 effective date)— Multiply the amount determined at Step 1 by total dwellings. (a) in the opening words, after “before” insert “(calculated in either case according to the effective date of the transaction)”, Step 3 and If the relevant transaction is one of a number of linked transactions, (b) omit paragraph (c), but not the “and” at the end. go to Step 4. (35) In paragraph 4(3) of Schedule 17A (treatment of leases for Otherwise, the amount found at Step 2 is the tax related to the indefinite term: additional tax to be calculated by reference to consideration attributable to dwellings. effective date)— 353 Autumn Statement 3 DECEMBER 2014 354

(a) in the opening words, after “before” insert “(calculated in Business of the House either case according to the effective date of the transaction)”, and (b) omit paragraph (c), but not the “and” at the end. 3.19 pm (36) In paragraph 7(1) of Schedule 19 (old linked transactions relevant to rate of tax) for “rate” substitute “amount”. The First Secretary of State and Leader of the House (37) In paragraph 9(4) of Schedule 19 (exercise of option or right of Commons (Mr William Hague): With permission, of pre-emption acquired before implementation date) for “rate” Mr Speaker, following the announcement regarding the substitute “amount”. reform of residential rates of stamp duty land tax, made (38) In consequence of amendments made by preceding provisions by my right hon. Friend the Chancellor of the Exchequer, of this Resolution— I should like to make a short business statement regarding (a) in the Finance Act 2006, omit section 162(1), tomorrow’s business. (b) in the Finance Act 2010, omit section 7(1), and The business for tomorrow will now be: (c) in the Finance Act 2012— THURSDAY 4DECEMBER—Motion to approve a financial (d) omit section 213(1), and resolution for the purposes of the Provisional Collection (e) in Schedule 35, omit paragraphs 2(4) and (6) and 5(3). of Taxes Act 1968, followed by the business as previously (39) The amendments made by this Resolution have effect in announced: a debate on a motion relating to the Financial relation to any land transaction of which the effective date is, or is Conduct Authority redress scheme, and a general debate after, 4 December 2014. on availability and pricing of branded medicines on the (40) But those amendments do not have effect in relation to a NHS. The subjects for both debates were recommended transaction if the purchaser so elects and either— by the Backbench Business Committee. (a) the transaction is effected in pursuance of a contract entered I will make my usual business statement tomorrow. into and substantially performed before 4 December 2014, or (b) the transaction is effected in pursuance of a contract entered into before that date and is not excluded by paragraph (42). Ms Angela Eagle (Wallasey) (Lab): I thank the Leader (41) An election under paragraph (40)— of the House for finally deigning to inform us about the (a) must be included in the land transaction return made in content of the unidentified Government business, which respect of the transaction or in an amendment of that return, and he was so coy about last Thursday. We have been (b) must comply with any requirements specified by the Commissioners waiting all week with bated breath, wondering what on for Her Majesty’s Revenue and Customs as to its form or the earth it might be about. We dreamed that it might be manner of its inclusion. about action to tackle low pay or under-employment, (42) A transaction effected in pursuance of a contract entered which is now rife in the country, hitting living standards into before 4 December 2014 is excluded by this paragraph if— and tax receipts. We thought that he might announce an (a) there is any variation of the contract, or assignment (or intention to reverse the millionaires’ tax cut, or promise assignation) of rights under the contract, on or after 4 December 2014, that the Government will not raise VAT. However, with (b) the transaction is effected in consequence of the exercise on or the sudden legislation on stamp duty, are not the after that date of any option, right of pre-emption or similar Government trying to hide the fact that the Chancellor’s right, or promise to eliminate the deficit in five years is running (c) on or after that date there is an assignment (or assignation), four years late, borrowing is up by £12.5 billion compared subsale or other transaction relating to the whole or part of the with the March Budget, and he has had to borrow subject-matter of the contract as a result of which a person other £219 billion more than he forecast he would in 2010? Is than the purchaser under the contract becomes entitled to call for not he attempting to disguise the fact that the Government’s a conveyance. incompetence has wasted over £100 billion, which is (43) In paragraphs (40) to (42)— £4,000 for every taxpayer in the country? The Chancellor “land transaction return”, in relation to a transaction, means the may think he has a cunning plan, but every day he is return under section 76 of the Finance Act 2003 in respect of that looking less like the Machiavelli he models himself on, transaction; and more like Baldrick. “purchaser” has the same meaning as in Part 4 of that Act (see section 43(4) of that Act); Mr Hague: I will take that as a welcome for the “substantially performed”, in relation to a contract, has the same resolution tomorrow. I think that the hon. Lady made a meaning as in that Part (see section 44(5) of that Act). better presentation of the Labour party’s case than the And it is declared that it is expedient in the public interest shadow Chancellor did a couple of hours ago. We look that this Resolution should have statutory effect under the provisions forward to her elevation to that position. She would be of the Provisional Collection of Taxes Act 1968.—(Mr George Osborne.) a dramatic improvement on the Opposition Front Bench. It is apparent why I was coy about the business last week. It would have caused considerable mayhem had I announced the business for tomorrow last week, both to the Chancellor’s autumn statement and to the housing market. Therefore, I am sure that the House understands the reason why that business has been nominated today, just as I hope that it will understand the tremendous progress announced by the Chancellor in bringing down unemployment and addressing all the other issues that she mentioned.

Several hon. Members rose— 355 Business of the House 3 DECEMBER 2014 356

Mr Speaker: Order. This is a very narrow statement. I Buses (Audio Announcements) know that, given the spirit and requirement of narrowness, Motion for leave to bring in a Bill (Standing Order hon. Members will comply. No. 23) Mr Peter Bone (Wellingborough) (Con): Can the Leader of the House say how long this debate will be 3.24 pm —what is the maximum length of the debate—and whether the House will then divide on whether to Jim Shannon (Strangford) (DUP): I beg to move, support or oppose the reduction in stamp duty? That leave be given to bring in a Bill to require the provision of audio announcements on public buses; and for connected Mr Hague: It is certainly possible for the House to purposes. divide on such a measure. Hon. Members will have to I am delighted to have the opportunity to raise this decide where they stand on it, although the provisional issue on behalf of Guide Dogs, which is vitally important resolution was approved by the House a few minutes to each of us in the United Kingdom of Great Britain ago. There is no time limit on the debate. It is not and Northern Ireland. I hope that it will at least help to limited in any way. Indeed it is exempt even from the raise awareness of the issue and the need for “talking moment of interruption, but I hope that it will be buses”. I also hope that this is something that we can possible to have the debate on the resolution and maintain start at Westminster today and follow through in Northern a good length of debate for the Backbench Business Ireland, Scotland and Wales. The evidence from across Committee business, too. the United Kingdom is overwhelming in support of Mr Marcus Jones (Nuneaton) (Con): I welcome the introducing audio announcements on all UK buses, move that my right hon. Friend has made to table the rather than just those in London. That is why I wanted business so quickly. In 2009, when the Labour party was to raise the issue, which affects all of us. I hope to see in government, it brought in a stamp duty holiday but it this brought in to every part of the United Kingdom in took the party six or seven weeks to bring that in, which the coming months and years. depressed the property market even further. Therefore, I The Public Service Vehicles Accessibility Regulations am grateful to my right hon. Friend. Can he say when 2000 and the related Northern Ireland regulations stated the measure will be enacted? that new buses had to include certain features to make them accessible to people in wheelchairs, such as low Mr Hague: As the Chancellor announced in his floors and ramps. We want the same legislation for all statement, the measure takes effect from midnight tonight the UK, starting in England, and going to Scotland, —provided that the resolution was passed, which it was Wales and elsewhere. Unfortunately, that legislation did a few minutes ago. A second debate is necessary, as is not go far enough. It did not include requirements to customary, for the House to be able to look at the make buses accessible to people with sight loss. That is provisions in more detail and to debate them, since it what this motion is about. has not yet had the opportunity to do so. However, the Unlike rail, where audio-visual announcements are Chancellor is extremely mindful of any effect on the required on all new trains, only 19% of buses—the housing market or forestalling. That is why the measure vast majority of them in London—provide next stop takes effect at midnight and why we move on speedily to information for passengers. The Department for Transport debate it tomorrow. reported that 97% of buses with audio announcements were in the capital, which leaves only 3% across the rest BILL PRESENTED of the UK. That imbalance has to be addressed.

UNITED KINGDOM PARLIAMENT (SOVEREIGNTY AND That means that the majority of blind passengers JURISDICTION OVER BORDERS)BILL outside London have to rely on bus drivers to tell them Presentation and First Reading (Standing Order No. 57) when to get off. A visually impaired passenger in Glasgow claimed that the Sir William Cash, supported by Mr John Redwood, Mr Bernard Jenkin, Sir Edward Leigh, Sir Gerald Howarth, “common response to the request to let me off at a particular Steve Baker, Mr John Baron, Jacob Rees-Mogg, Mr Peter stop is ‘if I remember’ and a common outcome is that they do forget”. Bone, Chris Heaton-Harris, Mr Christopher Chope and Richard Drax, presented a Bill make provision for Of course we cannot blame the bus drivers or hold them the supremacy of the sovereignty of the United Kingdom to account because it is not really their job to do that Parliament in relation to the United Kingdom’s membership and, like all of us, they do sometimes forget. Guide of the European Union, including matters in respect of Dogs’ 2014 “Destination Unknown” report shows that, borders and immigration; and for connected purposes. without audio announcements, seven in 10 blind and Bill read the First time; to be read a Second time on partially sighted passengers have been forgotten on the Friday 23 January 2015, and to be printed (Bill 130). bus. For a sighted person, missing a bus stop can be an annoyance and an inconvenience, but for a person with sight loss, that can be extremely distressing and even dangerous. The experience can put people off using buses as a form of public transport; in fact 63% of blind and partially sighted people stay at home at least twice a month instead of relying on the bus. That has to be addressed. There are 360,000 people registered as blind or partially sighted in the UK, and there are over 2 million people living with sight loss. That is roughly one in 30 people 357 Buses (Audio Announcements)3 DECEMBER 2014 Buses (Audio Announcements) 358

[Jim Shannon] Last September, the Select Committee on Transport gave its support to talking buses. However, the Government’s we meet. With an ageing population and the increasing response to its report was not quite so positive. They incidence of diabetes—something which, as a sufferer claimed there were three reasons why they could not make of type 2 diabetes, I can understand—it is predicted audio announcements mandatory; first, that they planned that the blind or partially sighted population will reach to increase voluntary uptake of these systems among 4 million by 2050. That is a vast number of people and bus operators; secondly, and perhaps unsurprisingly, we need to address those issues today. that there was a fear of a financial burden on the industry; and, finally, that there was the possibility that Audio announcements are not just supported by smartphones might be an alternative. those who are blind or visually impaired. For example, Paula, a bus passenger in my own constituency of In terms of voluntary uptake, a previous Transport Strangford noted: Minister wrote to bus operators encouraging them to take up audio-visual, or AV, up on a voluntary basis. “as a nurse working a long stint of night duty, I asked the bus driver to give me a shout when it was my stop. I fell asleep, he Despite some good examples, the uptake was very limited, forgot and I had a huge hike home in horrible weather.” as the earlier figure of 19% would suggest. This might have been a good idea, but unfortunately the reality is She is not visually impaired but she believes, as many that bus operators are not rolling out these AV systems, others do, that talking buses are a no-brainer for everyone. and some bus drivers are not assisting their visually A simple easy technique, it is on trains, so why not impaired passengers. In fact, 54% of blind and partially buses? sighted people have missed their bus stop because drivers did not inform them when they had reached it. According to the Chair of the Select Committee on Transport: In terms of costs, leading passenger transport specialists “there are 11.5 million disabled people in the UK, one fifth of the TAS Partnership found that it costs just £2,100 to whom report difficulty with transport.” install AV on a single-decker bus or £2,550 on a double- decker bus. To put that into perspective, a new double-decker A Government survey showed that 37% of disabled bus costs around £190,000, so to fit all new buses in the respondents found transport accessibility a significant UK with AV would cost very little in each year, and the barrier to work. Guide Dogs’ data reinforce those findings, ongoing costs are fairly minimal so there is no ongoing which show that the lack of audio announcements led charge after the initial hardware has been purchased. to people with sight loss missing job interviews, turning down jobs, being late for work or even losing a job. We are all aware of the financial constraints Governments Given the current economic climate, no one can afford are facing now, but any economic costs are repaid by to lose their job, or miss out on securing a job because the benefits that audio announcements would bring. It of their difficulties with public transport. has been revealed that for every £1 of public money spent on transport, there are £3 of benefits. This means The benefits of talking buses are not just confined to that the installation of AV would actually return over the blind or visually impaired. They can help to support £15 million each year extra, so this appears to be a older people, they can reinvigorate the bus industry by financial solution with short-term costs bringing about increasing the numbers of passengers, and they can long-term gains. bring environmental benefits with more people swapping the car for the bus. They can also attract tourists from I have some issues with smartphones, which have both inside and outside the UK to use the buses. We been suggested as an alternative to AV, with “apps” that cannot deny that audio announcements will help the can be downloaded and used. There are clear limitations tourist industry. There is a spin-off in that regard: many with these. First, not only the apps, but the phones tourists use the metro buses in our capital, and when themselves, can be extremely expensive and so are not stops are announced, that helps them. The metro services always practical, and they are not particularly reliable which serve the cities are great, but I believe we must due to varied network coverage and battery life issues. It aim to get talking buses on to every route, rather than has been noted: just metro lines. Of course this varies all over the United “19% of families with at least one disabled member live in Kingdom, but Northern Ireland is a particularly rural relative income poverty. For them, smartphones may be too community, as are some of the areas represented by the expensive or difficult to use.” supporters of this Bill. People are extremely reliant on both rural and urban buses, but unfortunately at present In conclusion, I am pleased to see some progress the new talking buses on the metro lines will only serve being made at home in Northern Ireland and here on those living in the urban centres, and relatively few of the mainland, but we must do more. Every single person those outside it. should have the freedom and ability to move unaided throughout this great nation, and this is one way of A YouGov survey showed that 85% of UK adults ensuring that that happens. who already use buses fitted with audio announcements find them useful. Another finding from the survey was It has been a privilege to be able to speak on such an that 19% of 25 to 34-year-old motorists said they would important subject, and I must thank Guide Dogs for be more likely to use the bus if it had an audio system their help in providing useful information and statistics installed. A 19% reduction in cars would see congestion for me. This is something which really is of the utmost levels well reduced and of course this would be a more importance, not just for the blind and partially sighted, environmentally friendly approach. That proves that as I have mentioned, but for all of us throughout all of the installation of an audio system would benefit all the United Kingdom of Great Britain and Northern travellers, rather than just one specific group. Ireland. 359 Buses (Audio Announcements) 3 DECEMBER 2014 360

This Bill would benefit every single bus passenger in Taxation of Pensions Bill (Programme) the UK and would ensure that the public service vehicles (No. 2) accessibility regulations are up to date, and include all those with disabilities, rather than just wheelchair-users, Ordered, as at present. I commend it to the House. That the Order of 29 October 2014 (Taxation of Pensions Bill Question put and agreed to. (Programme)) be varied as follows: (1) Paragraphs (4) and (5) of the Order shall be omitted. Ordered, (2) Proceedings on Consideration shall (so far as not previously That Jim Shannon, Henry Smith, Dame Anne Begg, concluded) be brought to a conclusion, at today’s sitting, two Kate Green, Sir Bob Russell, Mr Jeffrey M. Donaldson, hours after the commencement of proceedings on the motion for Mr Nigel Dodds, Ian Paisley, Ms Margaret Ritchie, Jim this order. Fitzpatrick, Mr Mike Weir and Dr Eilidh Whiteford present the Bill. (3) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion, at today’s sitting, three Jim Shannon accordingly presented the Bill. hours after the commencement of proceedings on the motion for Bill read the First time, to be read a Second time on this order.—(Mr. Gauke.) Friday 9 January 2015, and to be printed (Bill 131). 361 3 DECEMBER 2014 Taxation of Pensions Bill 362

Taxation of Pensions Bill This is a serious Bill, however, and we have serious matters to discuss this afternoon, so I will now turn to Consideration of Bill, as amended in the Public Bill the content of new clauses 1 and 2. There is a certain Committee. symmetry to the scheduling of today’s proceedings, because the reforms in the Bill were first announced in New Clause 1 the Budget statement and we are now discussing the Bill’s final stages alongside the autumn statement. We should be impressed—if that is the right word—by the IMPACT ON GOVERNMENT REVENUES speed with which the Government have rushed through ‘(1) The Chancellor of the Exchequer shall, within a period of these very significant pension reforms, although, given no more than two years from 6 April 2015, publish and lay before that we will now rush through something else even more the House of Commons a review of the impact of the changes quickly as a result of the autumn statement, perhaps I made by this Act to the Finance Act 2004 and the Income Tax (Earnings and Pensions) Act 2003 on Government revenue, with should have waited to hear that statement before writing particular reference to opportunities for tax and national that line in my script for this debate. insurance contributions avoidance. (2) The information published under subsection (1) should Toby Perkins (Chesterfield) (Lab): My hon. Friend include an assessment of the impact of this Act on— has congratulated the Government on the speed with (a) the use of salary sacrifice arrangements; which they have brought in these measures. She will be (b) income tax receipts; and aware that I have secured an Adjournment debate later (c) national insurance contributions.’—(Cathy Jamieson.) today on the unintended consequences that have been Brought up, and read the First time. visited on some of my constituents as a result of previous hastily introduced pension legislation. The Government have attempted to undo that legislation but, unfortunately, 3.36 pm without any great success. Will my hon. Friend therefore Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co- temper her praise and reflect on the fact that hastily op): I beg to move, That the clause be read a Second introduced pension legislation can often have unintended time. consequences?

Madam Deputy Speaker (Mrs Eleanor Laing): With this it will be convenient to discuss the following: Cathy Jamieson: I thank my hon. Friend for his intervention. If I had continued my speech for another New clause 2—Pension flexibility: Treasury review— couple of lines, he would have understood that my ‘(1) The Chancellor of the Exchequer shall, within a period of praise was somewhat tongue in cheek, given what I am no more than 18 months from 6 April 2015, publish and lay about to say about the haste with which the measures before the House of Commons a comprehensive review of the have been introduced, about the impact that that has impact of the changes made by this Act to the Finance Act 2004 and the Income Tax (Earnings and Pensions) Act 2003. had, and about the concerns expressed by the industry. I know that my hon. Friend is taking up these issues on (2) The information published under subsection (1) must behalf of his constituents and putting them forward include— very seriously. We still do not know all the unintended (a) the distributional impact, by income decile of the consequences that will result from this Bill and the population, of changes made by this Act to the Finance Pension Schemes Bill, which has now gone through the Act 2004 and Income Tax (Earnings and Pensions) Act 2003; House, and that is one reason why I want to speak to the new clauses today. (b) the impact on Exchequer revenues of measures contained within Schedule 2: Death of a Pension At least one of the new clauses will seem familiar to Scheme Member, related to changes to the taxation those who had the pleasure, as I did, of serving on the of pensions at death; Bill Committee. We have been consistent in our approach (c) a behavioural analysis; to the reforms. We have always said that we supported (d) an analysis of the cumulative impact of this Act on the principles of greater freedom and choice, but only Exchequer revenues; when that leads to better outcomes for consumers. That (e) an analysis of the impact of this Act on the purchase of is why we have consistently called on the Government annuities.” to give us evidence that they have undertaken the Amendment (a) to new clause 2, line 13 at end appropriate assessment and analysis of the impact and insert— potential consequences of the reforms. This also relates to what my hon. Friend has just said. For as long as we “() an analysis of the impact of the changes introduced by have pressed the Financial Secretary to the Treasury to this Act on the housing market;” provide that information, he has politely but firmly refused to do so. We on this side of the House are nothing if not Cathy Jamieson: It is a pleasure to be here this persistent, however, and it would be remiss of us not to afternoon for Report stage and Third Reading, and I do make one final attempt to bring the Government round not think I can quite do justice to the excitement and to our way of thinking and to persuade them to accept delight that I felt when I saw that the final stages were our new clauses. indeed to be taken straight after the autumn statement. I am sure that is a view shared by the Minister, who will In a moment, I shall ask the Minister some questions also be grateful for this miraculous feat of scheduling. on the figures that have been published today, but first I Given the vast numbers who have turned out to hear us want to refer to some of the points that have been made this afternoon, the excitement is obviously broadly shared about the speed with which the Bill has been taken across the House. through Parliament. Comments have been made in 363 Taxation of Pensions Bill3 DECEMBER 2014 Taxation of Pensions Bill 364 briefings and submitted in evidence as we have approached be an issue? Is it possible? Is it an intended consequence Third Reading. For example, the Association of British of the Bill? During the Public Bill Committee he explicitly Insurers has stated that told us that allowing individuals to avoid income tax “it is becoming increasingly clear that the first phase of the and national insurance contributions is “not the intention” introduction of these reforms will be delivered in a period of of the reforms, and I had no doubt that he was genuine regulatory uncertainty.” on that. However, people are still coming to us and The impact of that will be felt by the constituents of my repeatedly outlining concerns about the scale of tax hon. Friend the Member for Chesterfield (Toby Perkins). avoidance that could be facilitated by the Bill. Therefore, The ABI goes on to say: it is important that we continue to pursue the matter, “There is still a lack of clarity about what is expected of even at this late stage, and be given assurances on it. anyone offering retirement products from next April.” Towers Watson has said that Ministers seem “sanguine” I will come back to those points in a moment. The Bill on this matter. I am sure that the Minister is not has had thorough scrutiny, but a number of issues sanguine in any shape or form about the potential for remain that we wish to pursue. tax avoidance, that he would want to close any loopholes New clause 1 calls for a Treasury review within two and that he would want to send a clear message that it years of the reforms coming into force on 6 April 2015, was not his intention that the Bill be used for any detailing the impact of the Bill on Government revenues, attempt at tax avoidance. That is particularly the case with particular reference to opportunities for tax avoidance because, as has been repeated again today, tax revenues and national insurance contributions avoidance. In and the take into the Exchequer are falling, because of Committee, we tried to get more details and figures, and some of the Government’s other economic policies, the comments of John Greenwood and others were often particularly on wages and the impact on income tax and quoted, particularly those relating to concerns that the national insurance. It is not as though the Exchequer is Bill could allow individuals to divert large sums into going to be able to afford to lose hundreds of millions their pensions through salary sacrifice. Those individuals of pounds of tax income. would then be able to take as much as they wished from Interestingly, the written evidence from Towers Watson that pension in the following year, as 25% would be tax cited the Minister’s assurance that free and the rest would be charged at their marginal “the government will be closely monitoring behaviour under the rate, with no money deducted through national insurance new system”, contributions. Although the introduction of the money purchase annual allowance rules is supposed to prevent and will take action “if loss accelerates” Towers Watson’s that, the reduced £10,000 limit is activated only after the evidence suggests that it is very likely that action will be pension has been flexibly accessed for the first time. required. Complementing the AAT estimates of how The Association of Accounting Technicians has raised much tax could be lost if individuals use salary sacrifice concerns about this, saying: before they have accessed their pensions flexibly, Towers Watson provides an estimate of how much tax could be “In the first year, before the £40,000 allowance is lost, individuals lost after a pension has been accessed flexibly and the over the age of 55 will still have the scope to save tax and NI on the full £40,000, provided they have the necessary earnings, less their money purchase annual allowance imposed. Towers existing pension contributions. Where an individual flushes (passes) Watson’s projection returns us to the point made by the an extra £30,000 through pension rather than drawing salary they hon. Member for Redcar (Ian Swales) and shows why will achieve a saving of £3,600 in employee NI, more than £1,500 we have pursued this matter vigorously. Towers Watson in income tax and, also, £4,140 in employer NI (13.8%) in the first states that year. A total loss to the public purse of £9,240. The “Freedom and choice in pensions” rules mean this money can be withdrawn “if £10,000 of salary is given up in exchange for an employer immediately if an individual is over 55. This fact means that there pension contribution, the employer could pay £1,380 less National will not be clear distinction between salary and pension for this Insurance while the employee would pay between £200 and £1,200 age group.” less”. Although the annual allowance does not altogether 3.45 pm remove the scope for tax avoidance, it does have a I have some questions for the Minister about that. limiting effect, which of course we welcome. The crucial Does he agree that the Bill, as it stands, would afford point made by Towers Watson, however, is that this is additional scope for tax avoidance of the type outlined? not a potential tax avoidance opportunity that has been I know we have discussed this matter in Committee, but “dreamt up by accountants”, but one that could be it is important to probe it until the last possible moment. “created by legislation” before us today. Taxpayers and employers need to know whether the Ian Swales (Redcar) (LD): The hon. Lady has obviously Government will regard the diversion of salary through done a lot of research on this. As I understand it, once a pensions as legitimate. Some people have suggested that flexible draw-down is started, the tax relief is then the Government drafted the legislation oblivious to the limited beyond that, so cascading £40,000 of tax relief loophole they were creating and that when they realised year after year is not possible. That is my reading of the the consequences, they came up with the money purchase Bill. annual allowance rules as a partial stop-gap. I am inclined to be slightly more generous, because I am sure Cathy Jamieson: I thank the hon. Gentleman for that that the Government were very conscientious in drafting intervention, as those are exactly the kind of detailed the Bill and gave consideration to all its component points that I hope the Minister will respond to when he parts. I am sure that the Minister will reassure us on gives his views on the provisions. These are exactly the that point in his response. I know that he is concerned sort of questions to ask: is that the type of tax avoidance about the potential for tax avoidance, because he has that we have described and the AAT has suggested would repeatedly told us that he will “closely monitor behaviour” 365 Taxation of Pensions Bill3 DECEMBER 2014 Taxation of Pensions Bill 366

[Cathy Jamieson] pensions on death, a behavioural analysis and an analysis of the impact on the purchase of annuities. Any Bill under the new system and that he will work with the that will have a significant impact on not only people’s industry to ensure that the system remains “fair and lives, but the broader industry and the economy, must proportionate”. be based on evidence, engagement and analysis. We know from our probing in Committee why the Government Ian Swales: I am following the hon. Lady’s argument announced the reforms without consultation, and the closely. Is she suggesting that this Bill creates new Minister explained his position on concerns about the avenues for employer contributions to pension schemes? impact on the market. However, it would be helpful to As I understand it, what she describes is available in the have some idea of whether the Government had carried current system. out the behavioural analysis and impact assessment that we are requesting, and indeed of not only the Cathy Jamieson: I thank the hon. Gentleman for his extent to which that had been done, but what information intervention. I hope the Minister will provide a clear they could set out. Those points have also been pursued steer to people about what would be acceptable both to by my hon. Friend the Member for Cumbernauld, employers and employees. I would also be interested Kilsyth and Kirkintilloch East (Gregg McClymont), to learn what he plans to do if the system turns out not who worked tirelessly on the Pension Schemes Bill. to be fair and proportionate, and what form the monitoring That Bill includes provisions on the guidance guarantee, will take. That is why we have proposed new clause 1. which is crucial to the Bill. We did debate the matter in Committee, but we are still concerned that we have not heard exactly how the David Mowat (Warrington South) (Con): Surely the monitoring will take place and what the Minister intends purpose of such a review would be to drive action. We to do. have an expectation of the Bill’s effect on the annuities Essentially, new clause 1 asks the Government to market, so will the hon. Lady tell us how the results of commit to doing something that the Minister has already the annuities aspect of her proposed review would said that they would do—to monitor and review the affect a future Government’s actions? Does she think reforms to ensure that they are not used for the purpose that it would make any difference to Government policy of tax avoidance. We simply want that commitment in if there was a 10% or a 90% change in the purchase of the Bill, to ensure that there are reports back to the annuities, because it seems to me that it would not? House. Cathy Jamieson: The purpose of the monitoring is to When we first debated the issue, concerns were raised determine whether the Bill has unintended consequences. about the time scale in which we were asking for the We would want the process to deal with our concerns of review. We had not, at that stage, fully anticipated how whether the market responds to the changes and if the long it would be before patterns were established and products that people have envisaged will be available. problems had manifested themselves, which is why the There is the oft-quoted example of what happened in new clause includes a two-year-time frame. Australia: people drew down money, but many found that they had not properly planned for the future. Mr Geoffrey Robinson (Coventry North West) (Lab): Did I hear my hon. Friend correctly when she said that The hon. Gentleman asks what the Government would the Minister was minded to carry out a review of do, but I think that the Government have a responsibility precisely the areas that we have suggested in new clauses to keep all legislation under review by looking at its 1 and 2? If so, will the Minister make that clear in his effects and examining whether measures are fit for reply to my hon. Friend, because then we could avoid a purpose and if they do what they say on the tin. If vote on the new clause? changes need to be made, the Government of the day will bring forward appropriate provisions. They have a responsibility to make themselves aware of any unintended Cathy Jamieson: My hon. Friend makes an important consequences that might arise from the Bill and they point. As I have said, we did have some of this debate in should tell us how they will close any loopholes. Committee. I know that the Minister, at various stages, has said that everything is under review and that all things are reviewed. What we seek to do is to put some Hywel Williams (Arfon) (PC): I am sure that the hon. structure around that so that all reports are brought Lady agrees with the TUC when it says that it believes back before the House. that “greater emphasis should be placed on developing strong default I think I have made my point in previous Bill Committees options at retirement. These may include a combination of drawdown and probably at the Dispatch Box as well. Even in my and annuitisation.” relatively short time in this place and on the Front Bench, I have seen Ministers come and go before my very eyes. Cathy Jamieson: The hon. Gentleman makes a valuable I have no doubt that the Minister is concerned to ensure point. The Public Bill Committee examined what options that he does the right thing and monitors what is will be available to people and how we can ensure that happening, but it is important to have that commitment the balance is right so that they are encouraged not only on behalf of the Government, which is why I have to take up pensions at the earliest possible stage, such as tabled the new clause. through auto-enrolment, but to think about planning New clause 2 would provide for a Treasury review of for their long-term future. The aim was to ensure that the Bill’s operation within 18 months of 6 April 2015. people would not think that there was a windfall at age Such a review would include an analysis of its distributional 55, perhaps make wrong decisions about it, and find by impact by income decile, an analysis of the impact on their 75th birthday that they had not done the correct Government revenues of changes to the taxation of planning. The new clause is very much about trying to 367 Taxation of Pensions Bill3 DECEMBER 2014 Taxation of Pensions Bill 368 see how the provisions will impact on real people when As we heard in Committee, many individuals who access the time comes for them to make these decisions. That is their pension flexibly risk being hit with an unexpected why we were talking about behavioural analysis; we tax bill—a point that the Association of British Insurers want to ensure that lessons are learned from it. highlighted: “Many people will struggle to understand the tax consequences 4pm of these reforms. Apart from tax free lump sums, withdrawals from pension pots are taxable pension income…Not only may David Mowat: Surely we know the answer to the people find themselves unexpectedly paying higher rate tax, it is question prompted by new clause 2(2)(e), more or less; possible that some will be unaware that their tax may not be it is that dramatically fewer annuities will be purchased. settled for a year after they have accessed their funds through a Okay, a review might show that the figure is 12% as self-assessment process that they may be unfamiliar with.” opposed to 90%, but what action would be taken pursuant These risks have to be monitored and reviewed, so that to that answer? any unintended consequences can be picked up and dealt with. Cathy Jamieson: It is a bit chicken-and-egg: until we We also need to see—this comes back to the point raised do the analysis, we do not really know the extent of the earlier—whether the Bill results in a proliferation of problem. The solution would come once the problems new products. The impact of such products on consumer were identified. The hon. Gentleman makes an important behaviour should be monitored. In its 2014 risk outlook point about annuities; that takes me back to the issue the Financial Conduct Authority expressed concern that I raised about the opportunity for new products. that There is a relatively short period of time in which to develop them. The industry, of course, says that it will “retirement income products and distribution may deliver poor try to meet the “challenges”—it consistently uses that customer outcomes”. word—and ensure that there are options and products. It said: None the less, I find it difficult to understand why the “While recent proposals for pension reform plan to allow Government seem resistant to the new clauses. consumers to access any amount of their pension pot at age 55, the need for consumers to understand the options available to I think it was Ernest Hemingway who said that his them at retirement is still paramount. Any future innovation in novels were like icebergs: decumulation products will compound these risks.” “There is seven-eighths of it under water for every part that The FCA was, again, trying to look to the future. We shows.” share those concerns. We do not want poor outcomes Sometimes the same can be said of legislation, because for consumers, and I am sure the Minister does not the devil is in the detail. One has to see the detail, and be want that either. on top of it over a period, to find out what the ongoing impact is. That is why, throughout the passage of the A further issue is that new products may carry additional Bill, we have tried to identify and probe any fault-lines charges that eat away at an individual’s pension. Research on the surface of the legislation. from the House of Commons Library found that current income drawdown products could see 27% of an average The guidance guarantee has been the subject of pension pot of £30,000 eaten up in fees and charges. If considerable debate, although it essentially formed part the reforms lead to continued abuse of charges, the of the Pension Schemes Bill. Although we have now Government may have to consider the introduction of a seen information on the overarching standards and charge cap. the apportioning of the levy, published on Friday by the Financial Conduct Authority, we have yet to see all The changes made in schedule 2 abolish the 55% tax the content of that guarantee. Of course, that is the on pension funds on the death of the member. We can responsibility of the Government, in tandem with delivery see the Government’s reasons for doing this, but it partners. It is vital that the guidance is up and running, would be worth monitoring the impact on consumer and is equal to consumer needs, come April next year. behaviour and Government revenue. The FCA policy statement published on Friday confirmed I said that I wanted to ask the Minister some particular that, at least initially, there will be no “second line of questions in relation to the autumn statement and the defence”, as it was described, which makes it even more figures that had been published. Throughout the Committee important that the guidance is fit for purpose. stage, when we were pressing for information and numbers, In the Public Bill Committee, I talked about the the Minister said that those would be published in due potential impact of the reforms on eligibility for social course. True to his word, that information is now available care. We identified two separate but related points on to us. What effect will the revisions have on the initial social care that we believe the Government have not yet costings of the impact of these reforms? Has he had adequately addressed. The first is the impact that drawing cause to reconsider the impact of the reforms? Can he down money under flexi-access may have on an individual’s explain why the tax take increases because of the annual entitlement to means-tested benefits and eligibility for allowance in 2015-16, but falls in subsequent years? social care. The second is a point that I raised earlier: What is the basis for those figures? the danger that too much emphasis has been placed on Can the Minister give us any more detail about the early access to funds. That may result in people taking costing of the salary sacrifice and welfare forecast too much, too quickly, and being left with insufficient provisions? The numbers are there, but we do not have funds to cover the cost of care later in life. That is why further information in the autumn statement policy our review calls for a distributional impact of the reforms costing document. In comparison to some of the figures by income decile. That is also why we need behavioural provided in Committee, the estimates still seem low. analysis. Signs may emerge that consumers are accessing Given that the Minister has revised his forecast to take their pensions earlier, which increases the chance that into account salary sacrifice and welfare at such short they may be left short of money in later life. notice that it is not included in the autumn statement 369 Taxation of Pensions Bill3 DECEMBER 2014 Taxation of Pensions Bill 370

[Cathy Jamieson] TUC has noted, much evidence indicates that the same will happen here, despite Ministers’ talk of people making documents, had the Government fully considered those home improvements, buying new kitchens or going out factors when they initially drew up these reforms, or did and buying cars and other consumer goods that will they only later recognise the significance of those factors? boost the productive economy. We have asked for a review, as set out in new clause 1, Research by the Australian investment management to show whether the Bill increases the scope for tax firm Challenger has found that one third of savers used avoidance and the avoidance of national insurance their pension cash to buy a home, pay off an outstanding contributions. In the light of the figures that have been mortgage or make home improvements; one in five published, is the Minister confident that all his projections splashed out on a new car; and one in seven spent at will prove to be accurate? least some of their pension on a holiday. The evidence I have had a fair opportunity to set out the case for from Australia is that, when given the choice, only one new clauses 1 and 2, which will allow the Minister to in 25 Australians now buy an annuity. In the US, keep his word and monitor, review and report information another country where annuities are not mandatory, as appropriate. It is important that the clauses are most people take their pension money as cash, rather added to the Bill to ensure that that happens. We need than buying an annuity. Indeed, a buy-to-let property to keep a close watch on the progress of the reforms to might appear to be one of the better options for many make sure that they do not lead to adverse outcomes for people, rather than keeping their money in their pension consumers or place increased costs on the state. The scheme or making other, more conservative investments. Government have consistently assured us that they will Some large accountancy firms, such as closely monitor the impact of the Bill, so we see no PricewaterhouseCoopers, have said that the changes to reason why, even at this late stage, they cannot commit the annuities system will be a net positive for the Treasury. to make good on that assurance and accept the new They perhaps foresee the revenue raised through stamp clauses. duty and other associated taxes. But it is not the Treasury’s coffers that will suffer, at least not in the short term. It is Hywel Williams: I rise to speak on behalf of Plaid the potential bubble in house prices that concerns me, Cymru and in support of amendment (a), which stands particularly at a local level, and the potentially growing in my name, to Labour’s new clause 2. I agree with number of people who would then be unable to buy much of that new clause, but I wish to add that the their own home, the strengthening of the historical Government should bring forward a report on the over-reliance of the British economy on a buoyant impact of the changes introduced by the Bill specifically housing market, and the potential effects on investors’ on the housing market and introduce measures to rectify incomes should, or rather when, the bubble bursts. any problems, should it become apparent that there are I need hardly remind the House of the dangers of an negative consequences. I sincerely hope that my concerns over-inflated property market, of which buy-to-let is a are entirely unfounded. significant factor, and indeed one of the significant causes Although we welcome the Government’s desire to of the financial crash in 2008. Even prior to the crash, reform the private pensions system, we in Plaid Cymru in August 2007, Oxford Economics noted that buy to let have concerns about the consequences of behavioural “is undoubtedly contributing to the overvaluation of housing.” changes in the pensions industry, particularly in relation Were I cynical, I might even characterise inflation of to individual pensioners taking large draw-downs of the housing market as some sort of giant Ponzi scheme, money. We are not against pension savers being able to helping to keep the economy afloat while doing little to access their pension pots as a lump sum. If that is how contribute to productive capital, the epitome of the people wish to access their money, it is up to them to do rentier society—if I was cynical. as they see fit. Given the rates of return achieved these days, it is not surprising that many people will wish to Of more significance to my constituents, and to take that route. people throughout Wales and the more picturesque areas of the UK, is the potential that those taking large Our concern is that the effect might not be quite what draw-downs would decide to buy holiday homes. I need the Government intend. Aside from consumer protection not rehearse in any detail the arguments about the issues and stopping people being targeted by sharks and problems associated with an over-preponderance of cowboys seeking to exploit those who are newly able to holiday homes. Hon. Members who represent constituencies access comparatively large amounts of money, attention where that is a problem will be only too aware of the needs to be given to the longer-term possibility that negative effects. Anyone who really wants to know those who draw down large amounts and whose subsequent about it might read my maiden speech from 2001, which investments fail, for whatever reason, will be left with addressed housing matters and this problem, in particular. little or no money on which to see out their final years, To put it briefly, having too many holiday homes in an despite having contributed to a pension scheme for area has a negative, deadweight effect on the local most of their lives, and that they will then become a economy. Local people, especially young people, are burden on the public purse. It is fair enough to say that unable to afford homes because of price inflation and the buyer should beware, but we are not talking about are forced to leave. In my constituency, and in much of purchasing a new television; a wrong decision in this rural Wales, there is the added dimension of the damaging case might have grave, long-term effects on people’s effect that has on the Welsh language. We have been basic incomes. largely spared some of those effects over the years of As has already been mentioned, in Australia, where economic difficulty, but now, if the Chancellor is to be the Government have introduced changes similar to believed, we are moving towards a new golden age of those intended here, many people took large draw-downs plenty, possibly financed in part by pension lump sums, and invested the money in buy-to-let properties. As the with a consequent revival of these risks. 371 Taxation of Pensions Bill3 DECEMBER 2014 Taxation of Pensions Bill 372

4.15 pm big sums are involved. I have talked to pension fund and I do not wish to over-egg the pudding, but I draw the investment fund managers, and they are looking forward Minister’s attention to the previous Labour Government’s to it. proposal to allow tax relief on self-invested pension As my hon. Friend the Member for Kilmarnock and plans for any investment, including old master paintings, Loudoun has made clear, we welcome the Bill. We are fine wines, and, indeed, holiday homes. I argued at the not opposed to it in principle, but we want to make sure time that this might allow potential holiday home investors that it has the effects that are foreseen as regards flexibility to benefit from up to 40% tax relief on such an investment, and making greater independence available to very many and price local people out of the market. I well remember people throughout the country. It is in the spirit of not two initially slightly frosty, and then rather stormy, just avoiding abuses, but ensuring that the Bill does not meetings with the then Treasury Minister, Ruth Kelly. I become counter-productive or have exactly the detrimental was aided in the first by Simon Thomas, the then MP consequences that other Bills of this kind have had that for Ceredigion, and joined in the second by the hon. we urge the Minister to accept, even at this late stage, Member for St Ives (Andrew George). Ruth Kelly assured both new clause 1 and new clause 2. I am grateful to us that we need not bother our heads with such concerns have had the opportunity to repeat that point on Report. because any tax advantage would be mopped up by other means. A few short weeks before the provision Toby Perkins: I do not intend to detain the House was to be brought in, it was withdrawn. unduly, but I want to speak briefly in support of new I make no claims about that, but I would not wish the clause 1, tabled by my hon. Friend the Member for current Minister to suffer such a post-legislative fate Kilmarnock and Loudoun (Cathy Jamieson). I also do this time. That is the reason for this probing amendment not intend to give too much advance notice of my calling for an analysis of the effects on the housing Adjournment debate, which I will have the pleasure of market. I look forward to the Minister’s response. holding later and to which I know that the House is looking forward with considerable interest. Mr Robinson: I am pleased to take part in the Report My hon. Friend made an important point about the stage of a Bill that we discussed at some length in haste with which some of the changes have been introduced Committee, as my hon. Friend the Member for Kilmarnock and the impact that that can have. The Government and Loudoun (Cathy Jamieson) will know. She has led may be entirely well meaning, but such changes can for us throughout with such conscientiousness and have unintended consequences, and I shall refer to some command of detail that we probably do not need to of them in more detail later. labour further the points that we have pressed on the If I had been contacted by my constituents and had a Minister. I am pleased that the hon. Member for Arfon response from the Minister a few weeks or months (Hywel Williams) has added to our thinking on new earlier, there might have been an appropriate opportunity clause 2 by suggesting that the effect on the housing to propose that the issue was looked into in relation to market, in particular, should be kept under strict review. the Bill, but perhaps there will be an opportunity to I fear that the Minister is not going to accept either consider such issues in the other place. new clause, so I ask him to make a clear statement on It is a great pleasure to follow my hon. Friend the the areas where the Bill is likely to have an impact, with Member for Coventry North West (Mr Robinson), who potentially severe economic consequences. In the light speaks with tremendous knowledge on these issues. He of the Chancellor’s autumn statement earlier today, we was absolutely right to focus on the way in which some see just how severe the problems on the deficit and industries operated in the past, and the extent to which Government borrowing are. If the Bill is going to have a the financial services industry had some very negative further major impact in terms of tax receipts—which selling practices back in the deregulatory period of the are already disappointingly low, as the Minister himself 1980s. I am pleased that the industry, with Government must recognise, being very well acquainted with that assistance, has very much got its house in order. area of the Treasury’s affairs—it needs to be regularly We would be well advised to think about the impact reviewed. of the changes on the professionalism of very important In pushing for the changes we propose, we are merely industries such as financial services. If decisions are not doing what any responsible Opposition may do. I am taken in professional enough a way, they can have surprised that the Minister is so reticent about sharing massive effects on people at the time in their life when they these important matters with the House. As the hon. take their pension. Back in the 1980s, there was a huge Member for Arfon said, the consequences in the housing explosion of private pensions, with people—mineworkers market could be quite severe, particularly in the buy-to-rent or teachers—advised to give up their pensions. They sector. In Committee, I mentioned to him anecdotal were told, “No, if you give up your pension, you can information that I had received from the housing market opt in to one of these private schemes, with 15% growth in strongly Conservative areas such as Buckinghamshire. every year.” There was a huge mis-selling scandal. House prices are already rising, and this aspect needs to I previously worked—briefly, and largely unheralded—in be reviewed. the financial services industry. I was not necessarily The point that we made very strongly throughout the particularly suited for the job, which highlights a point Committee stage is that this is an unknown area where about people being invited into the industry. They were there is a fear of scams and abuses emerging—mis-selling dragged into it on the basis of knowing friends that and such things that have characterised so much of the they could go and sell pensions to. People with very industry in the past. Even now, we are still clearing up little knowledge came into the industry. Their business some of the mess from those previous schemes that plan was based on phoning all their friends and relatives went so horribly wrong. Not only that, but looking at to encourage them to give up their pensions in reliable this from the point of view of economic management, public sector or other schemes and to go in to private 373 Taxation of Pensions Bill3 DECEMBER 2014 Taxation of Pensions Bill 374

[Toby Perkins] The other thing that we must all be conscious of is that this change must not result in an industry that services schemes. There was of course a huge explosion, and only the very rich. Financial advice is important. If it many of the people in the schemes were seen to have becomes the preserve of the very rich, many people will been given very poor advice. be left out of the market, especially the self-employed, We recognise what the Government are attempting to who often see their business as their pension and so achieve, and we support their aims of having greater never go down the route of choosing financial services flexibility for the industry, allowing people to be put products. back in charge of their investment and ensuring that In supporting my hon. Friend’s call for a review of they have the freedom to decide what to do with the the impact of the changes, I wanted to flag up the money that they have saved. However, we are also aware debate that we will be having later and to put it in the of why the annuities method of accessing pensions that context of the taxation of pensions. I have secured people had invested in was introduced. We as a society today’s Adjournment debate on the impact of such decided that, in an age when people were living longer measures on public sector workers who transferred to and longer, we wanted people to make provision for the private sector when their public sector job was themselves and, having done so, to buy something that transferred. They are protected under transfer of provided a regular income that they could rely on. undertakings protocols. However, as many staff at CSC If we have a scheme in which people decide what to in Chesterfield who previously worked for Royal Mail invest their pension funds in, but, with the best of discovered, when they were made redundant, the changes intentions, those investments go wrong, the people who hastily introduced by the Government in 2012-13 meant we thought had provided for themselves in later life will that although they left their pension with Royal Mail come back to the state and say, “Unfortunately, the when they were transferred and opened a new pension investments that I made with my pension pot have gone with CSC, that new pension was treated as a second wrong and I have run out of money.” That will have an pension. As far as they were concerned, they sat in the impact on the Government. We recognise what the same desks and did the same job. The name above the Government are attempting to achieve, but it would be door may have changed from Royal Mail to CSC—although sensible to have a review of how it is working, the impact in this case it did not in practical terms—but those staff of the changes on the behaviour of investors, the impact were classed as having two different jobs and therefore on Government revenues, the impact on the broader two different pensions. economy, and what behaviours are being encouraged and introduced by the changes. 4.30 pm Hywel Williams: I am sure that the hon. Gentleman Taxation on those schemes was set up to recognise a will accept that there is also a reputational danger for fair balance and provide Government support for people the industry in general and for the entire system of to invest in pensions. At the same time, people were retirement pensions if people who make honest and investing huge amounts and receiving a fair amount of sincere investments find that the returns are non-existent rebate, although not an excessive amount. Many employees or that the investment itself disappears, and find themselves in my constituency—and, I suspect, other public sector not being at leisure in their 70s, but working, like people employees across the country—are being taxed because I know. they were made redundant, and they will get a pension for a short period until their original pension kicks in at Toby Perkins: Absolutely; the hon. Gentleman is the age of 60. In practical terms they are receiving an right. There was a huge rush of those issues coming to annuity over several years, but the Treasury judges that light at the back end of the last century, when people as a one-off lump sum payment. People are taxed as who believed that they had saved into corporate pensions though they have received a huge amount of money, found that the company had disappeared and so had when in practical terms a huge amount of money has their pension. been put aside for the next 10, 15, 20 or however many When we are debating these issues and supporting years it may be. In some cases people have paid as much the Government in this important initiative, we must be as £200,000 tax on a payment that is not in their pocket conscious that it must not end up with people effectively at that time. gambling with the income that they will rely on, without I do not want to preview the Adjournment debate too being aware of the risks. It is important that protections widely, although we do want to generate interest in it, are in place to ensure that when people make such but my case is that although the Government have decisions, they have the information and know what attempted to introduce steps to alleviate such impacts, they are letting themselves in for. It must be clear not they are actually mitigating the unfairness rather than only what impact it will have on them and their future, dealing with its cause, which is the way the Treasury but what impact it will have on Government resources taxes pensions that are effectively a second pension on and revenues. the same job because of changes made by someone’s The FCA risk outlook of 2014 stated: employer, rather than any decision by the employee. “Retirement income products and distribution may deliver I hope that the Minister will consider whether those poor consumer outcomes”. issues might wisely be investigated within the rules on That means that the Government recognise the dangers taxation of pension, although I recognise that we will that we are highlighting, which adds more weight to the not debate that today. New clause 2 is important to call of my hon. Friend the Member for Kilmarnock and ensure a review of what is being proposed. Although Loudoun for a review of the impact on Government that review will be conducted by my right hon. Friend revenue and a review of who is affected, with a the Member for Morley and Outwood (Ed Balls), because “distributional impact, by income decile of the population”. he will be Chancellor by the time the new clause is 375 Taxation of Pensions Bill3 DECEMBER 2014 Taxation of Pensions Bill 376 implemented in 2017, we must ensure that our pensions At Budget 2014, the Government published costings policy has no unintended consequences such as we have that stated that freedom of choice would cost the Exchequer seen before on occasion. minus £5 million in 2014-15, and from then on would raise money: £320 million in 2015-16, £600 million in The Financial Secretary to the Treasury (Mr David 2016-17, £910 million in 2017-18, £1.22 billion in 2018-19, Gauke): This may not be the most prominent Treasury and £810 million in 2019-20. The overall impact of matter gripping the nation today, but as the hon. Member decisions taken since the policy was announced in March for Kilmarnock and Loudoun (Cathy Jamieson) said, it does not significantly alter the numbers published at is none the less an important Bill and I am grateful Budget. As set out in my letter to the Committee and in for the opportunity to make further progress and respond table 2.1 of the autumn statement document, the decisions to this debate. I have just described will have the following Exchequer impacts: they will raise £60 million in 2015-16, cost New clauses 1 and 2, tabled by the hon. Member for £25 million in both 2016-17 and 2017-18, raise £30 million Kilmarnock and Loudoun, require the Treasury to in 2018-19, and cost £10 million in 2019-20. Further publish two reviews of the impact of the Bill. The first detail on how those costs have been calculated is set out review would focus on Exchequer revenues, including in the policy costings document, which has been published the use of salary sacrifice arrangements, income tax today alongside the autumn statement. receipts and national insurance contributions. The second review would include the distributional impacts by income In my letter to Committee members, I explained that decile of the population of the pensions flexibility the costings published today as part of the autumn measures; the impact on Exchequer revenue of measures statement were based on the same central assumptions contained within schedule 2, which makes various changes that underpinned the costings published at the Budget. to the taxation of pensions at death; a behavioural Since the Budget, the Government have explored in analysis; an analysis of the cumulative impact on Exchequer more detail two aspects of the policy affecting the costing: revenues; and an analysis of the impact on the purchase the increased costs of salary sacrifice and welfare as a of annuities. An amendment has been tabled by the result of the reforms—two points that the hon. Member hon. Member for Arfon (Hywel Williams), which would, for Kilmarnock and Loudoun dwelt on. The Government as we have heard, require the Government to undertake have produced these costings and they have been scrutinised an analysis of the impact of the changes introduced in by the OBR. the Bill on the housing market. In line with standard practice, these are accounted for I would like to explain—I suspect this will not come as changes to the forecast and so are not outlined in as a huge shock to hon. Members—why the new clauses table 2.1 of the autumn statement document. In recognition are unnecessary. There are a number of reasons. First, of the concern raised by Members about the likely on considering new clause 1 and the parts of new impact on the Exchequer, I included the Government’s clause 2 that relate to Exchequer revenues, it is important estimate of the costs in my letter to the Committee, but to note that the Government have today published I will set them out again to the House. The revisions to estimates of the Exchequer impacts of the policy as a the forecast to account for salary sacrifice are: minus whole. These costings, which have been certified by the £5 million in 2014-15; minus £35 million in 2015-16; independent Office for Budget Responsibility, cover all minus £30 million in 2016-17; and minus £25 million in the changes we have made to the policy since Budget as 2017-18, 2018-19 and 2019-20. The revisions to the a result of consultation. I know hon. Members have forecast to account for the increased cost of welfare are: been concerned about the potential consequences for minus £10 million in 2015-16; minus £15 million in the Exchequer of the new freedoms. The Government 2016-17; minus £20 million in 2017-18; and minus published costings at Budget. I have been clear that we £25 million in 2018-19 and 2019-20. would update the costings to reflect the policy decisions that have been taken since then. A great deal of the The Government have, therefore, already published debate has rightly focused on that issue. the information the two new clauses seek on the Exchequer impacts of the various aspects of flexibility, and all that The Government have taken a number of policy information has been certified by the independent OBR. decisions since pension flexibility was announced in In addition, the Government have already committed March. Those decisions are: introducing a £10,000 annual to keeping the policy under review, through the monitoring allowance for those who have flexibly accessed a pension of information collected on tax returns and tax records, pot of more than £10,000; changing the rules on the and HMRC regularly publishes data on tax receipts taxation of pensions at death; and continuing to allow reflecting any impact on the Exchequer. Any such impacts transfers out of funded defined benefit schemes. Today, will be reflected in forecasts at fiscal events. as part of the autumn statement, the Government have also confirmed that the notional income rules for assessing The Government keep tax policy under continual eligibility for means-tested benefits will be more generous review. There is no need for further reviews of the by assuming that unspent pension savings generate the Exchequer impacts of the policy, because the Government same income as an annuity, rather than 150% of an have already committed to keeping them under review annuity as at present. Of course, not all of these measures through usual processes, and I hope that this will reassure are contained within the Bill, but I believe that they are hon. Members regarding the fiscal impacts of measures relevant to any debate on the fiscal impacts of flexibility. in the Bill and related policies. At the very least, I hope Toensure the Government are being sufficiently transparent, hon. Members will appreciate that, given this debate I have today taken the step of writing to members of the has occurred after the autumn statement, I have been former Public Bill Committee to set out further details able to provide some of the answers the hon. of the costings. I will now outline those costings to the Member for Kilmarnock and Loudoun was seeking in House. Committee. 377 Taxation of Pensions Bill3 DECEMBER 2014 Taxation of Pensions Bill 378

[Mr David Gauke] of retirement, people will be allowed to make a decision about their finances that is right for them. This Government New clause 2 would also require the Government to are committed to making the aspiration of home ownership review the distributional impact of the measures in the a reality for as many people as possible. That is why Bill no less than 18 months after the Bill takes effect. As they have introduced policies such as Help to Buy and I set out in Committee, the measures in the Bill do not further measures announced in the Budget to support have a direct consequential impact on household incomes. the supply of housing. As part of the new regulatory Distributional effects will be driven by the choices framework for financial services, the Government have individuals make about how and when to take their introduced the Financial Policy Committee to ensure pension. In addition, household income is not necessarily that risks stemming from the housing market are identified a reliable measure of pension wealth, particularly in the and early mitigating action taken, if required. years immediately prior to retirement. The impacts of the policy could be misrepresented were we to review Ian Swales: Does the Minister recognise that the them only against the distribution of household income. point at which many people draw their pensions, particularly I appreciate I made that argument in Committee, but it the lump sum element, is the very point at which they was a good argument then, and it is a good argument might wish to help their children get into the housing now. market, and that we should not do anything to prevent In addition, new clause 2 would require the Government that? to publish behavioural analysis. As discussed in Committee, the costing of tax policies often involves an assessment Mr Gauke: My hon. Friend makes an important and of the behavioural impacts of the measure and, in some relevant point. We are putting power in the hands of cases, the capacity for additional tax planning and individuals to decide what they do with their retirement avoidance behaviour. These assumptions and methodologies pension pot. We are also ensuring—I shall touch on this are certified by the independent OBR, but the Treasury in a moment—that guidance is available. It may well be considers that making these detailed behavioural that after careful consideration, people conclude that assumptions public might affect the behaviour they they do want to assist a family member to get into the relate to and so could be detrimental to policy making. housing market. That is a choice for them, and I do not As I mentioned in relation to the Exchequer impact think that we here should necessarily condemn such a of the changes to the taxation of pensions at death, a choice: it might be precisely the right thing for people to policy costing note published alongside the autumn do for them and their family. statement explains how the costings have been calculated. As part of the new regulatory framework for financial This is in line with the principles outlined in the Government services, we have introduced the Financial Policy Committee, document, “Tax policy making: a new approach”, published as I was saying, and we have given the FPC strong alongside the June 2010 Budget. powers to tackle any threat to financial stability, including New clause 2 would require the Government to review a broad power of recommendation, which it used in any impact the measures in the Bill might have on the June 2014 to address risks stemming from mortgage volume of annuity purchases. Considering the policy lending and sectoral capital requirements that apply to intent of the changes, this would be unnecessary and residential mortgage lending. The Government have inappropriate. These measures are not intended to consulted on granting the FPC powers of direction over encourage savers towards or away from any particular macro-prudential tools for the housing market and aim product over another. They are intended to offer savers to legislate for these new powers next year. In line with greater choice and flexibility about how they use their the new regulatory framework, the FPC is best placed hard-earned savings to fund their retirement. to monitor the housing market and take action, if required. Let me pick some other points raised in the debate, 4.45 pm most of which it would be fair to say were familiar. I The Government have always said that they believe was asked whether people would understand the tax annuities will continue to be the right choice for many consequences involved. The guidance will help consumers people at some point in their retirement, as many people to understand the tax implications of their choice of will value the security of the guaranteed income. However, pension, and in addition, the Financial Conduct Authority the Government do not believe it appropriate to mandate has published near final rules that will require providers that individuals should use their lifetime savings to to supply their customers with a description of the purchase any one specific financial product. As I set out possible tax implications when they apply to access in Committee, data on the sale of annuities will continue their pension funds. to be available through other channels—the data published On extortionate draw-down charges, the FCA’s retirement by trade bodies and publications by individual firms, income market study will be published shortly. In June, for example—and there is no need for the Government the FCA expanded the scope of this study to include to duplicate this. consideration of products in the new flexible landscape A further amendment has been tabled by the hon. and to identify any competition risks and potential Member for Arfon, which would require the Government consumer detriment. The guidance guarantee will be to undertake relevant here. “an analysis of the impact of the changes introduced by this Act It was suggested that people might be charged too on the housing market”. much tax without realising it. As with all PAYE income, This appears to stem from a concern that the Government’s the tax position will be reconciled at the end of the tax changes will have an adverse impact on the housing year. All the income received by an individual that was market. With greater choice and flexibility at the point taxed under PAYE will be brought together, and the 379 Taxation of Pensions Bill3 DECEMBER 2014 Taxation of Pensions Bill 380 correct tax will then be calculated. If there was an Cathy Jamieson: The new clauses ask for reviews and overpayment, the extra amount will be repaid, and if monitoring, and that is exactly what we want. As we have there was an underpayment, HMRC will contact the said repeatedly during the Bill’s passage so far, our proposals individual. People will not be subject to self-assessment should not be interpreted in any other way. When a Bill solely because they have flexibly accessed their pensions, is put before us, it is important for us to scrutinise it and nor will they have to claim a refund in order to receive try to improve it, and that was my reason for tabling the it. new clauses. I have already touched on the matter of how the new I am grateful to my hon. Friend the Member for flexibilities will affect entitlements to benefits, but let Coventry North West (Mr Robinson), my hon. Friend me say now that the Government want to ensure that the Member for Chesterfield (Toby Perkins) and the the choice that people make between taking their pensions hon. Member for Arfon (Hywel Williams) for their as income—that is, purchasing an annuity and keeping contributions. All of them have contributed additional more of their pension as capital—and drawing it down information and raised additional issues which need to periodically, for example through a drawdown product, be considered, particularly my hon. Friend the Member will not have a significant impact on how they are for Chesterfield, who will initiate an Adjournment debate assessed for social care support and how their means later. He did not want to reveal too much about that are assessed for social security purposes. New regulations debate, lest we decide to miss his exciting speech. None and statutory guidance on the Care Act 2014, which the less, he did an excellent job in laying out some of the were published on 23 October, include details about the issues that he will refer to later on behalf of his constituents. charging rules for care and support. I have listened to the Minister. I am disappointed—as Today we announced a change in the rules for people always—that he has not chosen to accept new clause 1 above pension credit qualifying age who claim means-tested and new clause 2. On reflection, having listened to the benefits. The notional income amount applied to pension debate, I am minded to press new clause 1 to the vote, pots that have not been used to purchase an annuity will but not to press new clause 2 at this stage. be reduced from 150% to 100% of the income of an Question put, That the clause be read a Second time. equivalent annuity—or the actual income taken, if that The House divided: Ayes 209, Noes 292. is higher—in line with the rules for care and support. Division No. 105] [4.55 pm Let me now deal with an issue that was raised by the hon. Members for Kilmarnock and Loudoun and for AYES Chesterfield (Toby Perkins). I shall not try to anticipate Abbott, Ms Diane Creasy, Stella the response that my hon. Friend the Economic Secretary Abrahams, Debbie Cryer, John to the Treasury will make to the Adjournment debate Alexander, rh Mr Douglas Cunningham, Alex that the hon. Gentleman will initiate later, but I can say Alexander, Heidi Cunningham, Mr Jim that these matters are not being rushed. We have consulted Ali, Rushanara Curran, Margaret extensively on the implementation of the policy, and Ashworth, Jonathan Danczuk, Simon Bailey, Mr Adrian Darling, rh Mr Alistair there is widespread support for the changes. We are Bain, Mr William David, Wayne working closely with industry to ensure that it is ready Balls, rh Ed Davidson, Mr Ian for April 2015, and have been doing so since the Banks, Gordon Davies, Geraint announcement was made. We are making good progress Barron, rh Kevin De Piero, Gloria in delivering the changes that are needed through both Beckett, rh Margaret Denham, rh Mr John our Bills. Benn, rh Hilary Dobson, rh Frank Berger, Luciana Docherty, Thomas Betts, Mr Clive Donohoe, Mr Brian H. Toby Perkins: I realise that the Minister does not Blackman-Woods, Roberta Doran, Mr Frank want to predict the outcome of a debate to which we all Blears, rh Hazel Doughty, Stephen look forward with such interest, but will he tell us Blomfield, Paul Doyle, Gemma whether the taxation of pensions element of that debate Bradshaw, rh Mr Ben Dromey, Jack could be considered during further stages of the Bill’s Brennan, Kevin Dugher, Michael progress? Brown, rh Mr Nicholas Durkan, Mark Brown, Mr Russell Eagle, Ms Angela Bryant, Chris Eagle, Maria Mr Gauke: We are reaching the end of the Commons Buck, Ms Karen Edwards, Jonathan process, or at least I hope we are. We believe that the Bill Burden, Richard Efford, Clive delivers the reforms that are necessary to implement the Byrne, rh Mr Liam Ellman, Mrs Louise policy announcement that the Chancellor made in the Campbell, rh Mr Alan Esterson, Bill last Budget. We believe that these are good reforms, and Campbell, Mr Ronnie Evans, Chris we believe that the new flexibility in the pensions system Caton, Martin Farrelly, Paul is to be welcomed and will encourage greater savings. Champion, Sarah Field, rh Mr Frank Let me add that some perceive Opposition Members’ Chapman, Jenny Fitzpatrick, Jim desire for a review as the precursor of a possible reversal Clarke, rh Mr Tom Flello, Robert of these changes by the Opposition, were they to be in Clwyd, rh Ann Flint, rh Caroline government. I would not like that to happen, and their Coaker, Vernon Fovargue, Yvonne proposals create a degree of uncertainty. Coffey, Ann Gapes, Mike Connarty, Michael Gardiner, Barry I hope that, in the light of the explanations that I Cooper, Rosie Gilmore, Sheila have given to the hon. Member for Kilmarnock and Cooper, rh Yvette Glass, Pat Loudoun, she will not press her new clause to a Division, Corbyn, Jeremy Glindon, Mrs Mary but if she does, I will certainly oppose it. Creagh, Mary Greatrex, Tom 381 Taxation of Pensions Bill3 DECEMBER 2014 Taxation of Pensions Bill 382

Green, Kate Murphy, rh Paul Andrew, Stuart Evennett, Mr David Greenwood, Lilian Murray, Ian Arbuthnot, rh Mr James Fabricant, Michael Gwynne, Andrew Nandy, Lisa Bacon, Mr Richard Fallon, rh Michael Hain, rh Mr Peter Nash, Pamela Baker, rh Norman Farron, Tim Hamilton, Mr David O’Donnell, Fiona Baker, Steve Featherstone, rh Lynne Harman, rh Ms Harriet Onwurah, Chi Baldry, rh Sir Tony Field, Mark Havard, Mr Dai Osborne, Sandra Barclay, Stephen Foster, rh Mr Don Healey, rh John Owen, Albert Baron, Mr John Francois, rh Mr Mark Heyes, David Pearce, Teresa Barwell, Gavin Freer, Mike Hilling, Julie Perkins, Toby Bebb, Guto Fullbrook, Lorraine Hodge, rh Margaret Powell, Lucy Beith, rh Sir Alan Fuller, Richard Hodgson, Mrs Sharon Qureshi, Yasmin Bellingham, Mr Henry Garnier, Sir Edward Hopkins, Kelvin Raynsford, rh Mr Nick Benyon, Richard Garnier, Mark Hosie, Stewart Reed, Mr Jamie Beresford, Sir Paul Gauke, Mr David Howarth, rh Mr George Reed, Mr Steve Bingham, Andrew Gibb, Mr Nick Hunt, Tristram Reynolds, Emma Binley, Mr Brian Gillan, rh Mrs Cheryl Irranca-Davies, Huw Reynolds, Jonathan Birtwistle, Gordon Glen, John James, Mrs Siân C. Robertson, Angus Blunt, Crispin Goodwill, Mr Robert Jamieson, Cathy Robertson, John Boles, Nick Gove, rh Michael Jarvis, Dan Robinson, Mr Geoffrey Bone, Mr Peter Graham, Richard Johnson, Diana Rotheram, Steve Bottomley, Sir Peter Grant, Mrs Helen Jones, Graham Roy, Mr Frank Brady, Mr Graham Gray, Mr James Jones, Helen Roy, Lindsay Brake, rh Tom Green, rh Damian Jones, Mr Kevan Ruane, Chris Bridgen, Andrew Grieve, rh Mr Dominic Jones, Susan Elan Ruddock, rh Dame Joan Brine, Steve Griffiths, Andrew Kaufman, rh Sir Gerald Sawford, Andy Brokenshire, James Gummer, Ben Keeley, Barbara Seabeck, Alison Brooke, rh Annette Gyimah, Mr Sam Kendall, Liz Shannon, Jim Browne, Mr Jeremy Hague, rh Mr William Khan, rh Sadiq Sharma, Mr Virendra Buckland, Mr Robert Halfon, Robert Lammy, rh Mr David Sheerman, Mr Barry Burns, Conor Hames, Duncan Lavery, Ian Sheridan, Jim Burrowes, Mr David Hammond, Stephen Lazarowicz, Mark Skinner, Mr Dennis Burstow, rh Paul Hancock, rh Matthew Lewell-Buck, Mrs Emma Slaughter, Mr Andy Burt, rh Alistair Hands, rh Greg Lewis, Mr Ivan Smith, Angela Cable, rh Vince Harper, Mr Mark Llwyd, rh Mr Elfyn Smith, Nick Cairns, Alun Harrington, Richard Love, Mr Andrew Smith, Owen Campbell, rh Sir Menzies Harris, Rebecca Lucas, Caroline Spellar, rh Mr John Carmichael, Neil Hart, Simon Lucas, Ian Straw, rh Mr Jack Carswell, Douglas Haselhurst, rh Sir Alan MacNeil, Mr Angus Brendan Stringer, Graham Cash, Sir William Hayes, rh Mr John Mactaggart, Fiona Stuart, Ms Gisela Chishti, Rehman Heald, Sir Oliver Mahmood, Mr Khalid Sutcliffe, Mr Gerry Chope, Mr Christopher Heath, Mr David Mahmood, Shabana Tami, Mark Clappison, Mr James Hemming, John Malhotra, Seema Thomas, Mr Gareth Clark, rh Greg Henderson, Gordon Mann, John Timms, rh Stephen Clarke, rh Mr Kenneth Herbert, rh Nick Marsden, Mr Gordon Trickett, Jon Clifton-Brown, Geoffrey Hinds, Damian McCabe, Steve Turner, Karl Collins, Damian Hoban, Mr Mark McCarthy, Kerry Twigg, Derek Colvile, Oliver Hollingbery, George McClymont, Gregg Twigg, Stephen Cox, Mr Geoffrey Hollobone, Mr Philip McDonagh, Siobhain Vaz, Valerie Crabb, rh Stephen Holloway, Mr Adam McDonald, Andy Walley, Joan Crockart, Mike Hopkins, Kris McDonnell, John Watson, Mr Tom Crouch, Tracey Howarth, Sir Gerald McGovern, Alison Whiteford, Dr Eilidh Davey, rh Mr Edward Howell, John McGovern, Jim Whitehead, Dr Alan Davies, David T. C. Hughes, rh Simon McKechin, Ann Williams, Hywel (Monmouth) Hunt, rh Mr Jeremy McKenzie, Mr Iain Williamson, Chris Davies, Glyn Hunter, Mark McKinnell, Catherine Wilson, Phil Davies, Philip Huppert, Dr Julian Meale, Sir Alan Winnick, Mr David Davis, rh Mr David Hurd, Mr Nick Mearns, Ian Winterton, rh Ms Rosie Dinenage, Caroline Jackson, Mr Stewart Miller, Andrew Wishart, Pete Djanogly, Mr Jonathan James, Margot Mitchell, Austin Wood, Mike Dorrell, rh Mr Stephen Javid, rh Sajid Moon, Mrs Madeleine Woodcock, John Doyle-Price, Jackie Jenkin, Mr Bernard Morden, Jessica Wright, David Drax, Richard Jenrick, Robert Morrice, Graeme (Livingston) Wright, Mr Iain Duddridge, James Johnson, Gareth Morris, Grahame M. Duncan Smith, rh Mr Iain Johnson, Joseph (Easington) Tellers for the Ayes: Dunne, Mr Philip Jones, Andrew Mudie, Mr George Tom Blenkinsop and Ellis, Michael Jones, rh Mr David Munn, Meg Nic Dakin Ellison, Jane Jones, Mr Marcus Ellwood, Mr Tobias Kawczynski, Daniel NOES Elphicke, Charlie Kelly, Chris Adams, Nigel Aldous, Peter Eustice, George Kirby, Simon Evans, Graham Knight, rh Sir Greg Afriyie, Adam Amess, Mr David Evans, Jonathan Lamb, rh Norman 383 Taxation of Pensions Bill3 DECEMBER 2014 Taxation of Pensions Bill 384

Lancaster, Mark Reckless, Mark Yeo, Mr Tim Tellers for the Noes: Lansley, rh Mr Andrew Redwood, rh Mr John Young, rh Sir George Harriett Baldwin and Latham, Pauline Rees-Mogg, Jacob Zahawi, Nadhim Dr Thérèse Coffey Leadsom, Andrea Reevell, Simon Lee, Jessica Reid, Mr Alan Question accordingly negatived. Lee, Dr Phillip Robathan, rh Mr Andrew Leech, Mr John Robertson, rh Sir Hugh Leigh, Sir Edward Rosindell, Andrew Schedule 1 Leslie, Charlotte Rudd, Amber Letwin, rh Mr Oliver Russell, Sir Bob PENSION FLEXIBILITY ETC Lewis, Brandon Sanders, Mr Adrian Lewis, Dr Julian Sandys, Laura Mr Gauke: I beg to move amendment 1, page 37, Liddell-Grainger, Mr Ian Scott, Mr Lee line 37, after “arrangement”,”, insert Lloyd, Stephen Selous, Andrew Lopresti, Jack Shapps, rh Grant ““nominee’s flexi-access drawdown fund”,”. Loughton, Tim Sharma, Alok This Amendment, and Amendments 2, 3, 4, 5 and 6, insert two Luff, Sir Peter Shelbrooke, Alec missing definitions into the amendments made by the Bill in each of Lumley, Karen Simmonds, Mark the two subsisting versions of section 576A of the Income Tax Macleod, Mary Simpson, Mr Keith (Earnings and Pensions) Act 2003. Main, Mrs Anne Smith, Chloe Maude, rh Mr Francis Smith, Henry Madam Deputy Speaker (Dame Dawn Primarolo): Maynard, Paul Smith, Julian With this it will be convenient to discuss Government McCartney, Jason Smith, Sir Robert amendments 2 to 39. McCartney, Karl Soubry, Anna Mr Gauke: Amendments 1 to 8 are all of a minor and McIntosh, Miss Anne Spencer, Mr Mark Stanley, rh Sir John McLoughlin, rh Mr Patrick technical nature, amending various definitions and removing Stephenson, Andrew McPartland, Stephen unnecessary sections. I would be happy to explain those Stevenson, John McVey, rh Esther in more detail if hon. Members are interested, but if Stewart, Bob Menzies, Mark they are not, I will move on to amendments 9 to 39. Stewart, Iain Metcalfe, Stephen As hon. Members will recall, we had a very useful Stewart, Rory debate in Committee about the new information Miller, rh Maria Streeter, Mr Gary Milton, Anne Stride, Mel requirements for individuals that are set out in part 6 of Mitchell, rh Mr Andrew Stuart, Mr Graham schedule 1 of the Bill. I said at the time that the Moore, rh Michael Stunell, rh Sir Andrew Government were keen to work with industry and consumer Mordaunt, Penny Sturdy, Julian groups to ensure that the requirements are proportionate, Morgan, rh Nicky Swales, Ian and that we would consider the issue further. We have Morris, Anne Marie Swayne, rh Mr Desmond therefore continued to have constructive discussions Morris, James Swire, rh Mr Hugo with the pensions industry about the impacts of the Mosley, Stephen Syms, Mr Robert Bill. As a result of this ongoing consultation, we have Mowat, David Tapsell, rh Sir Peter tabled a number of amendments that we believe are a Mulholland, Greg Thurso, rh John proportionate response to the concerns raised. These Mundell, rh David Timpson, Mr Edward changes will make the reporting requirements that Munt, Tessa Tomlinson, Justin individuals need to meet easier to comply with, while Murray, Sheryll Tredinnick, David still ensuring that they have access to the right information Neill, Robert Turner, Mr Andrew Tyrie, Mr Andrew to help them pay the right amount of tax. Government Newmark, Mr Brooks Uppal, Paul amendments 9 to 39 therefore make a number of changes Newton, Sarah Vaizey, Mr Edward to the information requirements in the Bill to provide Nokes, Caroline Vara, Mr Shailesh that individuals have to tell schemes that they have Norman, Jesse Vickers, Martin flexibly accessed their pension savings only if they are Nuttall, Mr David Walker, Mr Charles an active member of that scheme, and to increase the Offord, Dr Matthew Walker, Mr Robin time they have to comply from 31 days to 91 days. Ollerenshaw, Eric Wallace, Mr Ben It might be helpful if I start by setting out why these Opperman, Guy Ward, Mr David Osborne, rh Mr George information requirements are required. As we have Watkinson, Dame Angela discussed many times during the course of this Bill’s Ottaway, rh Sir Richard Weatherley, Mike Paice, rh Sir James Wharton, James passage through the House, when an individual accesses Paisley, Ian Wheeler, Heather their pension flexibly, their annual allowance for tax-relieved Parish, Neil White, Chris defined contribution pension contributions will reduce Paterson, rh Mr Owen Whittaker, Craig from £40,000 to £10,000. That will protect the Exchequer Pawsey, Mark Wiggin, Bill and ensure that the new system cannot be exploited to Penrose, John Willetts, rh Mr David achieve unintended tax advantages by individuals’ diverting Percy, Andrew Williams, Mr Mark their salary into their pension and withdrawing it Phillips, Stephen Williams, Roger immediately with tax relief. It is therefore important Pickles, rh Mr Eric Williamson, Gavin that individuals understand the tax consequences of Pincher, Christopher Willott, Jenny saving into a pension after accessing their savings flexibly. Poulter, Dr Daniel Wilson, Mr Rob For that reason, the Bill placed a new requirement on Prisk, Mr Mark Wilson, Sammy individuals to tell all their pension providers once they Pugh, John Wollaston, Dr Sarah had flexibly accessed a pension. This was intended to Raab, Mr Dominic Wright, rh Jeremy ensure that individuals do not use the new system to Randall, rh Sir John Wright, Simon gain a tax advantage that is not intended. However, the 385 Taxation of Pensions Bill3 DECEMBER 2014 Taxation of Pensions Bill 386

[Mr Gauke] receiving a statement from their pension scheme and, as we said in Committee, failure to comply could lead to Government have always been clear that they are keen them being fined. to ensure these requirements are proportionate. Having We pointed out in Committee that it was unreasonable considered the issue carefully, we are amending the Bill to expect individuals to dig up information on schemes to provide that people need to tell only the schemes to that they might not have paid into for many years and which they are contributing or that they contribute to in to which the annual allowance rules were therefore the future. They will also have an extended period of unlikely to apply. We also pointed out, with reference to 91 days in which to do so. These changes will make the evidence from both Ros Altmann and the Association new system easier for individuals and schemes to comply of Taxation Technicians, that the 31-day time frame with, while also ensuring that the new annual allowance was a short and unreasonable deadline. The Government is implemented effectively. Again, I would be happy to amendments change that, so that individuals will be explain these amendments in more detail if hon. Members required only to tell schemes to which they are currently are interested. contributing, or subsequently contribute to, that they are subject to the £10,000 annual allowance. They also Ian Swales: I am certainly not asking the Minister to change the length of time that individuals have to explain all this in a lot more detail and detain the House comply with this requirement to 91 days. in doing so. One specific point raised in Committee was that people contributing to a workplace defined benefit We welcome the Government amendments. Although scheme will not know how much of their annual allowance we may not have persuaded the Minister to take on all is being used in that scheme at the time when they are our concerns, we are glad to have played some small able to make contributions to a defined contribution part in persuading him to make those changes and to scheme. Has he considered the possibility that such bring forward those amendments today. As I have said, people could be treated—I think the Bill tends to do we welcome and support them. this—as though they are deliberately trying to avoid Amendment 1 agreed to. tax, whereas they may just have a lack of knowledge at Amendments made: 2, page 37, line 38, after “annuity””, the time they do this? insert “, “successor’s flexi-access drawdown fund””. Mr Gauke: My hon. Friend makes an important point. See the explanatory statement for Amendment 1. There will be particular issues with defined benefit Amendment 3, page 37, line 41, leave out “and 22A” schemes. It may be that individuals do not know when and insert “, 22A, 27E and 27K”. contributions are paid by their employer. Where the See the explanatory statement for Amendment 1. scheme provides defined benefits only, the information Amendment 4, page 39, line 35, after “arrangement”,”, requirement does not apply, and individuals will never insert ““nominee’s flexi-access drawdown fund”,”. need to notify it. If the scheme also provides money purchase benefits—for example, if it has a separate See the explanatory statement for Amendment 1. AVC section—the requirement can only apply where Amendment 5, page 39, line 36, after “annuity””, contributions are made to the AVC section. Defined insert “, “successor’s flexi-access drawdown fund””. benefit schemes are excluded as they will not have to See the explanatory statement for Amendment 1. send pension saving statements to the individual based Amendment 6, page 39, line 39, leave out “and 22A” on the £10,000 money purchase annual allowance. I and insert “, 22A, 27E and 27K”. hope that helps my hon. Friend. See the explanatory statement to Amendment 1. 5.15 pm Amendment 7, page 42, leave out lines 1 to 3. As I have set out, we have tabled a small number of This Amendment, and Amendment 8, each remove a subsection inserted minor and technical amendments to ensure that the Bill by the Bill into a version of section 576A of the Income Tax works as intended. We have also tabled amendments to (Earnings and Pensions) Act 2003 because the subsections relate to make the reporting requirements easier to comply with payments not included in the lists of “relevant withdrawals” inserted while still achieving their purpose of ensuring that by the Bill as introduced. individuals have access to the right information to help Amendment 8, page 44, leave out lines 28 to 30. them pay the right amount of tax. I hope that these changes will be welcomed by the House and that See the explanatory statement for Amendment 7. amendments 1 to 39 will be made to schedule 1. Amendment 9, page 46, line 8, at end insert— “() if the member is entitled to payment of a lifetime Cathy Jamieson: I thank the Minister for bringing annuity under a flexible annuity contract as defined forward these amendments. We had a fair amount of by section 227G(8), a relevant event occurs when the debate and discussion in Committee on some of the first payment of the annuity is made, issues, so I am not intending to ask him to go through () if— each amendment, especially the minor and technical (i) the member is entitled to payment of a scheme ones, in great detail. pension under a money purchase arrangement I recognise that Government amendments 9 to 39 under the scheme, were brought forward as a result of the comments and (ii) the member became entitled to the scheme pension concerns that we and the industry raised on the reporting on or after 6 April 2015, requirements. The Bill as introduced placed a requirement (iii) the member became entitled to the scheme pension on individuals who access their pension flexibly to at a time when fewer than 11 other individuals inform all schemes of which they are a member that were entitled to the present payment of a scheme they are subject to the new £10,000 allowance. They pension, or dependants’ scheme pension, under would have been required to do that within 31 days of the scheme, and 387 Taxation of Pensions Bill3 DECEMBER 2014 Taxation of Pensions Bill 388

(iv) the scheme pension is not payable under an annuity (b) otherwise give notice— contract treated under section 153(8) or (8A) as (i) of receipt of the statement, and having become a registered pension scheme, (ii) of the date of the relevant event concerned or (if a relevant event occurs when the first payment of the applicable) of its having occurred more than scheme pension is made, and”. 2 years before the activation day, This Amendment inserts, in a list that sets out the events that give to the scheme administrator of that other scheme; but this is rise to an individual first flexibly accessing pension rights, missing subject to paragraphs (4) and (5).”. entries corresponding to the new section 227G(7) and (9) inserted by paragraph 65 of Schedule 1 to the Bill. This Amendment makes a change in new regulation 14ZB to simplify the obligations for individuals who have flexibly accessed Amendment 10, page 46, leave out lines 26 to 41 and their pension savings. Information will need to be provided to a insert scheme only when the individual is an accruing member of that “and scheme and within a 91 day period. (c) the duties under regulation 14ZB and the Amendment 13, page 47, line 37, leave out “a” and circumstances in which the member will have to insert “an accruing”. comply with them.”. This Amendment, and Amendments 14 and 15, are consequential This Amendment condenses the text currently in the Bill of new on Amendment 12 and make changes in new regulation 14ZB to regulation 14ZA(3)(c) and (d). New regulation 14ZA(3) lists ensure that an individual does not have to tell the scheme matters that are to be explained in statements under new regulation 14ZA administrator if they become an accruing member of the scheme as that are provided by scheme administrators to members. a result of a recognised transfer. Amendment 11, page 47, line 12, at end insert Amendment 14, page 47, line 38, after “becomes”, “if active or contributing etc”. insert This Amendment adds words to the title of the new regulation 14ZB “an accruing member of that scheme upon or after becoming”. to reflect changes to be made in that new regulation by, in particular, See the explanatory statement for Amendment 13. Amendment 12. Amendment 15, page 47, line 38, at end insert Amendment 12, page 47, leave out lines 13 to 35 and insert— “after the date of the relevant event concerned.” ‘(1) Paragraphs (2) and (3) apply if— See the explanatory statement for Amendment 13. (a) an individual receives a statement under regulation Amendment 16, page 47, line 42, after second “(3)”, 14ZA from the scheme administrator of a registered insert pension scheme (the “flexed” registered pension “, or has previously complied with paragraph (2) or (3),”. scheme), and This Amendment ensures that a member of a pension scheme does (b) on the date of the relevant event concerned, or at any not have to provide information under new regulation 14ZB more later time, the individual is an accruing member (see than once to the same pension scheme. paragraph (6)) of the flexed or any other registered pension scheme. Amendment 17, page 47, line 43, at end insert— (1A) In this regulation— ‘(6) For the purposes of this regulation, the individual is an “the relevant 13-week period” means the period of accruing member of a registered pension scheme on any 91 days beginning with— particular day if— (a) the date of receipt if the individual is an (a) the individual is an active member of the scheme on accruing member of any registered pension that day as a result of there presently being arrangements scheme on any day in the period— for the accrual of benefits to or in respect of the (b) if not, the first day after the date of receipt individual under a cash balance arrangement or hybrid when the individual is an accruing member of arrangement, or a registered pension scheme, and (b) a relevant contribution is made under the scheme on “the intervening period” means the period— that day. (a) beginning with the date of the relevant event (7) For the purposes of this regulation, a relevant contribution concerned, and is made under a registered pension scheme if— (b) ending with the first day of the relevant 13-week period. (a) a relievable pension contribution is paid by or on behalf of the individual under a non-cash-balance money (2) The individual must before the end of the relevant 13-week purchase arrangement relating to the individual under period— the scheme, (a) pass on a copy of the statement, or (b) a contribution is paid in respect of the individual by an (b) otherwise give notice— employer of the individual under a non-cash-balance (i) of receipt of the statement, and money purchase arrangement relating to the (ii) of the date of the relevant event concerned or (if individual under the scheme, or applicable) of its having occurred more than (c) a contribution— 2 years before the start of the relevant 13-week (i) paid under the scheme by an employer of the period, individual, and to the scheme administrator of each other registered pension (ii) paid otherwise than in respect of any individual, scheme of which the individual is an accruing member on any day in the intervening period; but this is subject to paragraph (5). becomes held for the purposes of a non-cash-balance money purchase arrangement relating to the individual (3) Where, in the case of a particular registered pension scheme under the scheme; other than the flexed scheme, the individual is not an accruing member of that other scheme on any day in the intervening and in this paragraph “non-cash-balance money purchase period but becomes an accruing member of that other scheme on arrangement” means a money purchase arrangement other than a day (“the activation day”) after the last day of that period, the a cash balance arrangement.” individual must before the end of the 91 days beginning with the This Amendment defines terms used in the provisions inserted by activation day— Amendment 12. The definitions are largely based on the text (a) pass on a copy of the statement, or currently in the Bill of new regulation 14ZD(1)(b) and (8). 389 Taxation of Pensions Bill3 DECEMBER 2014 Taxation of Pensions Bill 390

Amendment 18, page 48, line 33, leave out “active This Amendment ensures that a member of a pension scheme does member” and insert not have to provide information under new regulation 14ZD more than once to the same pension scheme. “accruing member (see paragraph (7A))”. Amendment 27, page 49, line 22, at end insert— This Amendment makes a change in new regulation 14ZD to bring that new regulation into line with the changes made by ‘(7A) For the purposes of this regulation, the individual is an Amendment 12 in new regulation 14ZB. accruing member of a registered pension scheme on any particular day if— Amendment 19, page 48, line 34, leave out from (a) the individual is an active member of the scheme on “scheme” to end of line 38. that day as a result of there presently being arrangements This Amendment makes a change in new regulation 14ZD to bring for the accrual of benefits to or in respect of the that new regulation into line with the changes made by Amendment individual under a cash balance arrangement or hybrid 12 in new regulation 14ZB. The text left out is replaced by the new arrangement, or regulation 14ZD(7A) inserted by Amendment 27. (b) a relevant contribution is made under the scheme on Amendment 20, page 48, line 38, at end insert— that day.” ‘(1A) In this regulation “the relevant 13-week period” means This Amendment inserts a definition of a phrase used in the text the period of 91 days beginning with— inserted by the Amendments making changes in the earlier provisions of new regulation 14ZD. It replaces the text left out by (a) 6 April 2015 if on that date the individual is an Amendment 19. accruing member of any registered pension scheme, or Amendment 28, page 49, line 23, leave out “paid” and insert (b) if not, the first day after 6 April 2015 when the individual is an accruing member of a registered “made under a registered pension scheme”. pension scheme.” This Amendment adjusts the definition of “relevant contribution” This Amendment makes a change in new regulation 14ZD to bring in new regulation 14ZD to bring it into line with the definition that new regulation into line with the changes made by Amendment inserted into new regulation 14ZB by Amendment 17. 12 in new regulation 14ZB. Amendment 29, page 49, line 27, leave out Amendment 21, page 48, line 39, leave out from “flexed or any other registered pension”. second “the” to end of line 44 and insert “relevant This Amendment is consequential on Amendment 28 and further 13-week period,”. adjusts the definition of “relevant contribution” in new regulation 14ZD This Amendment makes a change in new regulation 14ZD to bring to bring it into line with the definition inserted into new regulation that new regulation into line with the changes made by Amendment 14ZB by Amendment 17. 12 in new regulation 14ZB. Amendment 30, page 49, line 32, leave out Amendment 22, page 48, line 47, leave out “flexed or any other registered pension”. “a member on the first day of that” This Amendment is consequential on Amendment 28 and further and insert adjusts the definition of “relevant contribution” in new regulation 14ZD to bring it into line with the definition inserted into new regulation “an accruing member on the first day of the relevant 13-week”. 14ZB by Amendment 17. This Amendment makes a change in new regulation 14ZD to bring Amendment 31, page 49, line 34, leave out that new regulation into line with the changes made by Amendment 12 in new regulation 14ZB. “flexed or any other registered pension”. Amendment 23, page 49, line 1, leave out from “Where” This Amendment is consequential on Amendment 28 and further to “provide” in line 4 and insert adjusts the definition of “relevant contribution” in new regulation 14ZD to bring it into line with the definition inserted into new regulation “, in the case of a particular registered pension scheme other 14ZB by Amendment 17. than the flexed scheme, the individual is not an accruing member Amendment 32, page 49, line 39, leave out of that other scheme on the first day of the relevant 13-week period but becomes an accruing member of that other scheme on “under which the contribution was paid”. a day (“the activation day”) after the first day of that period, the This Amendment is consequential on Amendment 28 and further individual must, before the end of the 91 days beginning with the adjusts the definition of “relevant contribution” in new regulation 14ZD activation day,”. to bring it into line with the definition inserted into new regulation This Amendment makes a change in new regulation 14ZD to bring 14ZB by Amendment 17. that new regulation into line with the changes made by Amendment Amendment 33, page 49, line 43, after “if”, insert 12 in new regulation 14ZB. “active or contributing etc and”. Amendment 24, page 49, line 16, after “becomes”, insert This Amendment adds words to the title of the new regulation 14ZE to reflect changes to be made in that new regulation by, in particular, “an accruing member of that scheme upon or after becoming”. Amendment 34. This Amendment, and Amendment 25, are consequential on Amendment 34, page 49, line 45, leave out from Amendments changing earlier provisions of new regulation 14ZD beginning to end of line 13 on page 50 and insert— and further change that regulation to ensure that an individual does ‘(1) Paragraphs (2) and (3) apply if— not have to tell the scheme administrator if they become an accruing member of the scheme as a result of a recognised transfer. (a) under paragraph 8C of Schedule 28, the drawdown pension fund in respect of an arrangement relating to Amendment 25, page 49, line 17, at end insert “after an individual under a registered pension scheme (the 6 April 2015.” “flexed” registered pension scheme) becomes the See the explanatory statement for Amendment 24. individual’s flexi-access drawdown fund in respect of the arrangement, and Amendment 26, page 49, line 21, after second “(3)”, insert (b) on the conversion date, or at any later time, the individual is an accruing member (see paragraph (6)) “, or has previously complied with paragraph (2) or (3),”. of the flexed or any other registered pension scheme. 391 Taxation of Pensions Bill3 DECEMBER 2014 Taxation of Pensions Bill 392

(1A) In this regulation “the relevant 13-week period” means (7) For the purposes of this regulation, a relevant contribution the period of 91 days beginning with— is made under a registered pension scheme if— (a) the conversion date if on that date the individual is an (a) a relievable pension contribution is paid by or on behalf accruing member of any registered pension scheme, of the individual under a non-cash-balance money or purchase arrangement relating to the individual under (b) if not, the first day after that date when the individual the scheme, is an accruing member of a registered pension (b) a contribution is paid in respect of the individual by an scheme. employer of the individual under a non-cash-balance money purchase arrangement relating to the individual (2) The individual must, before the end of the relevant 13-week under the scheme, or period, inform the scheme administrator of each other registered pension scheme of which the individual is an accruing member (c) a contribution— on the first day of the relevant 13-week period— (i) paid under the scheme by an employer of the individual, and (a) of the conversion, and (ii) paid otherwise than in respect of any individual, (b) of the conversion date or (if applicable) of the becomes held for the purposes of a non-cash-balance money conversion’s having occurred more than 2 years purchase arrangement relating to the individual under the scheme; before the start of the relevant 13-week period; and in this paragraph “non-cash-balance money purchase but this is subject to paragraph (5). arrangement” means a money purchase arrangement other than a (3) Where, in the case of a particular registered pension scheme cash balance arrangement.”” —(Mr Gauke.) other than the flexed scheme, the individual is not an accruing This Amendment defines terms used in the provisions inserted by member of that other scheme on the first day of the relevant Amendment 34. The definitions are largely based on the text 13-week period but becomes an accruing member of that other currently in the Bill of new regulation 14ZD(1)(b) and (8). scheme on a day (“the activation day”) after the first day of that period, the individual must, before the end of the 91 days beginning Third Reading with the activation day, inform the scheme administrator of that other scheme— 5.18 pm (a) of the conversion, and Mr Gauke: I beg to move, That the Bill be now read (b) of the conversion date or (if applicable) of the conversion’s having occurred more than 2 years the Third time. before the activation day; The House has reached the final stage of its consideration but this is subject to paragraphs (4) and (5).”. of the Bill, which will give individuals more choice about how they access their savings in retirement. I have This amendment makes a change in new regulation 14ZE to simplify the obligations for individuals who have converted their been pleased by our wide-ranging and informed debates. existing drawdown fund to a flexi-access drawdown fund, bringing I would like to remind hon. Members of the measures that regulation into line with new regulation 14ZB as amended by in the Bill and their aims. While the Bill makes the tax Amendment 12. system fairer by ensuring that people have more choice Amendment 35, page 50, line 15, leave out “a” and about how they access their savings, it contains measures insert “an accruing”. to prevent individuals from exploiting that new flexibility This Amendment, and Amendments 36 and 37, are consequential to gain an unintended tax advantage, and to ensure that on Amendment 34 and make changes in new regulation 14ZE to the taxation of pensions savings on death remains fair ensure that an individual does not have to tell the scheme and appropriate under the new system. administrator if they become an accruing member of the scheme as At Budget 2014, the Chancellor announced the most a result of a recognised transfer. radical reform to how people take their private pensions Amendment 36, page 50, line 16, after “becomes”, for nearly 100 years. The current system restricts choice insert at the point of retirement. Those with the smallest and “an accruing member of that scheme upon or after becoming”. largest amounts of pension savings are allowed flexibility, See the explanatory statement for Amendment 35. but those with a medium amount of savings have very limited options. The Bill will change that by extending Amendment 37, page 50, line 16, at end insert “after flexibility to everyone with a defined contribution pension, the conversion date.” regardless of their total pension savings. See the explanatory statement for Amendment 35. The Bill also introduces a new method to allow people Amendment 38, page 50, line 20, after second “(3)”, to access their pension flexibly. At present, people taking insert their pension as cash have to take all their tax-free lump “, or has previously complied with paragraph (2) or (3),”. sum—25% of their fund—and then place the other This Amendment ensures that a member of a pension scheme does 75% in a draw-down fund. Any money they then take not have to provide information under new regulation 14ZE more out of that fund will be taxed at their marginal rate. than once to the same pension scheme. The uncrystallised funds pension lump sum—UFPLUS Amendment 39, page 50, line 21, at end insert— —is a new option that will give individuals the flexibility ‘(6) For the purposes of this regulation, the individual is an to take one or more lump sums from their pension fund accruing member of a registered pension scheme on any without having to enter into draw-down or to take all particular day if— their tax-free lump sum in one go. When using that (a) the individual is an active member of the scheme on option, 25% of each payment will be tax-free, with the that day as a result of there presently being arrangements other 75% taxed at the individual’s marginal rate. We for the accrual of benefits to or in respect of the are also increasing choice by introducing changes to individual under a cash balance arrangement or hybrid encourage innovation in the retirement income market. arrangement, or Following extensive consultation with the industry, the (b) a relevant contribution is made under the scheme on Bill will give providers scope to make annuities much that day. more flexible products in line with consumers’ needs. 393 Taxation of Pensions Bill3 DECEMBER 2014 Taxation of Pensions Bill 394

[Mr Gauke] The aim of the changes is to ensure that individuals who have made sacrifices to save over the course of I have already discussed the fiscal impacts of those their life can pass on their pension savings without measures and related ones today, but I reiterate that the worrying about excessive tax charges after they die. Government have now published Office for Budget They also preserve the incentive for people to keep Responsibility-certified costings for the policy overall money in their pension, as there will not be the fear of alongside the autumn statement. their beneficiaries being hit by a 55% tax charge. Mr Graham Stuart (Beverley and Holderness) (Con): Members may be interested to note that today, in the My hon. Friend will remember, as I do, that one of the autumn statement, the Chancellor announced that the first acts of the previous Labour Government on coming changes will extend to annuities. Death benefit payments to power was to put a tax on pensions that helped to from joint life and guaranteed term annuities will also destroy the healthiest, strongest and most successful be tax-free when the policyholder dies before the age of pension system in Europe. This Government, however, 75; such death benefits can be paid to any beneficiary. in much less promising economic times, have managed That will also apply when an individual uses uncrystallised to bring flexibility and hope to all those who save for a or draw-down funds inherited from someone who dies secure retirement. before the age of 75 to buy a dependant’s annuity. Those changes will be legislated for in due course, although Mr Gauke: I am grateful to my hon. Friend for not through this Bill. In conclusion, the Bill is important. helpfully reminding the House of that important point. It will increase choice at retirement for individuals who It is a significant achievement of the Government that have saved all their lives. It contains measures to prevent we have been able to undertake such a fundamental individuals from using the new flexibilities to gain reform—perhaps the biggest for nearly 100 years—in unintended tax consequences, and ensures that the tax this area. Our record compares favourably with that of treatment of pensions on death remains fair. our predecessor. Of course, the Bill is part of a wider set of Government reforms, including the single-tier pension, Finally, I thank hon. Members who participated in the rolling out of auto-enrolment and the triple-lock debates on the Bill, both in the Chamber and in Committee. guarantee. In particular, I would like to mention the diligence of the hon. Member for Kilmarnock and Loudoun (Cathy Stephen McPartland (Stevenage) (Con): Will my hon. Jamieson), who has, I think, accounted for significantly Friend give way? more than 50% of the time taken to scrutinise the Bill. As I said, the Bill increases choice for the 320,000 Mr Gauke: The floodgates have opened. people retiring each year, and I commend it to the House. Stephen McPartland: How many people will benefit from this pensions revolution? 5.27 pm Mr Gauke: Something like 320,000 people retire each Cathy Jamieson: It is with a heavy heart that I rise to year with defined contribution schemes, and those people speak for the last time on the Taxation of Pensions Bill. will now have far more choice. Of course, people who It has been such an enjoyable experience. I am not quite are saving for their pensions will know that at the end of sure how I will fill my days in the next few weeks, given their working life, or at various points after the age that I will no longer be poring over absolutely every of 55, they will have more flexibility with regard to their detail of the legislation. It does not seem long ago that I pension pot. spoke on Second Reading—in fact, it was only two I am grateful for the interesting debates that we have short months ago. had during the Bill’s passage through the House and I would like to reflect briefly on how it has changed since I should like to start where the Minister ended—by its introduction. The Government’s recently tabled thanking everyone who has been involved in the process. amendment regarding how individuals inform schemes I particularly thank right hon. and hon. Friends who if the £10,000 annual allowance applies to them will have supported me in scrutinising the Bill, including in provide that people only need to tell schemes to which Committee, not least my hon. Friend the Member for they are contributing, or contribute to in the future, Scunthorpe (Nic Dakin), who kept us all in line. Whenever when they access a pension flexibly. They will also have I was about to take perhaps more than my fair share of an extended time period of 91 days in which to do so. time, he would keep me on track. I thank the Clerks in These changes will make the new system easier for the Public Bill Office for their drafting advice and the individuals and schemes to comply with, while ensuring role they played in ensuring that amendments were that the annual allowance is implemented effectively. tabled in the appropriate manner. I also thank Library The Government have made a number of minor and staff, who were excellent as always; they efficiently technical amendments to the Bill to ensure that it works answered all my questions and responded to all my as intended. The most substantive changes have been to additional requests for information. the taxation of pensions at death, to ensure that that I thank the Minister—[Interruption.] I was going to taxation remains fair and appropriate under the new say that he has, at all times, been polite and courteous; I system. The changes will allow individuals who die with hope he hears that I am saying something reasonably pension funds remaining to pass those funds on to nice about him. That is not always how things happen. anyone they choose. The funds can be paid tax-free if Throughout proceedings on the Bill, he has said no to the individual dies before the age of 75; if they die pretty much all our requests and new clauses, in the having reached that age, and the funds are paid out as a nicest possible way. As I have said when speaking to our pension, they will be taxed at the beneficiary’s marginal new clauses and amendments, we have been very consistent rate—or at 45%, if the funds are paid as a lump sum. in our approach to the reforms; we have been clear that 395 Taxation of Pensions Bill3 DECEMBER 2014 Taxation of Pensions Bill 396 we support the principle of the Bill. We support increased We are clear that the success of the Bill will depend flexibility and choice for savers, and that is why we have on the tests of fairness and cost that we set out. If the long advocated reform to the annuities market to help reforms have adverse consequences for those on middle people to shop around and get a better deal. But we or lower incomes or those who cannot afford the expensive have had concerns about the speed at which the reforms regulated advice, they will not have succeeded. If the have been pushed through. There was no consultation reforms lead to higher costs for the state because people prior to the Budget statement and it has been difficult at have accessed their pensions too early and need additional times to get to grips with all the figures and the behavioural state support, they will, again, not have succeeded. We impacts relating to the Bill because the Government hope the Government have factored in all the potential were not able to publish that analysis. consequences, as they have assured us. I am pleased that they listened to us on the reporting requirements. Nevertheless, we have endeavoured to identify the potential problems that the Bill presents, and we have Does the Bill not look much better since the Government judged everything against the three tests that we set at showed some flexibility in their approach? The word the outset—the advice test to ensure that savers get the “flexibility”was frequently used in our discussions because right guidance, the fairness test to ensure that there are that is what the Bill is all about. Had the Government decent products for low and middle income savers, and taken their own advice and been a little more flexible in the cost test to ensure that the reforms do not result in their approach from the outset, and perhaps a little less extra pressures on the state. It will be difficult to measure hasty, we might have arrived at a position where the Bill the Bill’s performance against those tests until the reforms had been significantly improved and some of the take effect. We therefore reserve judgment on how it will outstanding questions could have been answered. work. However, we have had a relatively short period to The Minister recapped the key issues that we debated. consider the Bill, notwithstanding the fact that, as the We made our views on the guidance guarantee abundantly Minister pointed out, I seem to have taken up in excess clear. There is not a great deal more that we can say of 50% of the time available to make the points. I think about that until we see how it works in practice. Ensuring that it is the Opposition’s duty to scrutinise thoroughly, that guidance meets customer expectation and requirements raise the issues, ensure that the Government have thought is a responsibility that now resides firmly with the things through, press them on those points and lay out Government. Our new clauses, which the Minister rejected, those areas where we think they need to continue to were concerned with measuring and reviewing the impact monitor and evaluate in future. of the Bill because we wanted to gauge the degree to With those few words, the time has run out for those which the reforms produce additional opportunities for of us in this place. I would like to close by reiterating my tax avoidance and to ensure that the Minister continues thanks to everyone who has worked on the Bill. I have to monitor the impact of the Bill carefully as it is found this an interesting and enjoyable process—perhaps implemented. not everyone involved would agree—and I must say that We did not press new clause 2 to the vote. It called for I never thought I would say that about a Bill on pensions a comprehensive review of the impact of the reforms, to taxation. be published 18 months after they take effect. We were keen to ensure that the Minister had every opportunity to give us the facts and figures. With the autumn 5.35 pm statement today and the publication of the OBR policy Ian Swales: I will not detain the House for long, but, costings, we now have some of that information and as the Liberal Democrat representative here, I feel that some of the numbers that we did not have previously. it is important to say something. The Bill supports the There is one issue that I wish to raise even at this late pensions revolution being driven by the Minister for stage. The Minister mentioned earlier that the OBR has Pensions, my right hon. Friend the Member for Thornbury run the rule over the figures, but it is important to note and Yate (Steve Webb), who has done a terrific job. We that the OBR policy costings document refers on page 87 are well aware, of course, that the main pension aspects to seven measures in the policy decisions table that are of the regulations are in the Department for Work and judged to have high or very high uncertainty around the Pensions Bill, not in this Treasury Bill. central costing. Interestingly, one of those seven measures Like the shadow Minister, I enjoyed serving on the is pensions flexibility. The document refers to decisions Bill Committee. In this place we are often very adversarial, since Budget 2014 and goes on to say: but I think that proceedings on the Bill have been “This costing receives a ‘very high’ uncertainty rating. The conducted in absolutely the right spirit. When it comes yield over the scorecard period—and the resulting costs in the to pensions, it is extremely important to have cross-party longer term—depends on take-up and on other behavioural responses. support for the arrangements agreed, because pensions, Some people will temporarily increase pension saving in order to by definition, involve long-term decisions. Were we to benefit from tax-free lump sum withdrawals. It is possible that keep trying to change the pensions system every year or funds will be redirected from annuities and into other assets, such two, we would not be giving people certainty on what to as other financial products or housing. It is also possible that such funds could be used to finance consumer spending”. do about their future. It has been a real pleasure to serve on a Bill on which, although we have sparred over That is exactly what we have been highlighting throughout various details, there has been strong agreement on the the Bill proceedings, and exactly why we felt it was need to pass it. It has the full support of the Liberal important that a review was built into the process. I Democrats. hope that if the Minister does not take my word for it, Question put and agreed to. although he often did so graciously, he will take account of the OBR’s comments. Bill accordingly read the Third time and passed. 397 3 DECEMBER 2014 398

Business without Debate Annual Pension Allowance (Transferred Workers) EUROPEAN UNION DOCUMENTS Motion made, and Question proposed, That this House Motion made, and Question put forthwith (Standing do now adjourn.—(John Penrose.) Order No. 119(11)), 5.38 pm EUROPEAN ENERGY SECURITY Toby Perkins (Chesterfield) (Lab): I am pleased to That this House takes note of European Union Document No. have this opportunity to bring to the House’s attention 10409/14 and Addenda 1 to 5, a Commission Communication on a matter of significant importance to employees in my the European Energy Security Strategy; welcomes the Government’s constituency who were transferred out of Royal Mail to support for the Commission’s energy security strategy, in particular the recognition in the Communication that energy security is the IT services provider Computer Sciences Corporation central to the EU’s prosperity; and supports the Government’s and, I suspect, to many other employees who were efforts to work to ensure that in the implementation of the transferred out of the public sector. Changes to lump strategy, the existing balance of competence between the Member sum pension allowances introduced by the Chancellor States and the Commission is not altered.—(John Penrose.) in his 2013 Budget have had a catastrophic impact on Question agreed to. my constituents’ pension pots and created an accidental discrimination that fits neither the principles nor the spirit of the transfer of undertakings protocol, otherwise DELEGATED LEGISLATION known as TUPE. Madam Deputy Speaker (Dame Dawn Primarolo): The aim of this debate is to follow up letters I have With the leave of the House, we shall take motions 5 to exchanged with the Financial Secretary to the Treasury. 12 together. I feel that his replies thus far have failed to grasp the full unfairness of the situation or to offer appropriate remedy. Motion made, and Question put forthwith (Standing I aim to show the House that, as the mechanism currently Order No. 118(6)), stands, there is gross unfairness towards workers who have been transferred out of public sector pension LEGAL SERVICES schemes. I hope that the Minister, when she responds, That the draft Legal Services Act 2007 (the Chartered Institute can explain to my constituents why they have been hit of Patent Attorneys and the Institute of Trade Mark Attorneys) with such a significant tax bill, often on revenues that (Modification of Functions) Order 2014, which was laid before they have not even yet received, and what further steps this House on 20 October, be approved. the Government can take to ensure that former public sector workers are not unfairly disadvantaged by an CONSTITUTIONAL LAW arbitrary decision they made several years ago. That the draft Marriage and Civil Partnership (Scotland) Act 2014 and Civil Partnership Act 2004 (Consequential Provisions Royal Mail has had a long tradition in my constituency. and Modifications) Order 2014, which was laid before this House Back in the 1960s, as part of a move to get Government on 27 October, be approved. organisations out into the provinces, Royal Mail moved thousands of head office staff up to Chesterfield. It RIVER brought with it a Barbara Hepworth statue and a welcome That the draft Keeping and Introduction of Fish (England and number of high-skilled and pretty well-paid jobs. Royal River Esk Catchment Area) Regulations 2015, which were laid Mail has been a key employer in the town ever since. before this House on 7 November, be approved. The Loundsley Green housing estate was built specifically to house the influx of new workers. However, while it SOCIAL SECURITY remains an important employer today, many staff have That the draft Pensions Act 2014 (Consequential Amendments) subsequently been transferred out and do the same or (Units of Additional Pension) Order 2014, which was laid before similar jobs working on the Royal Mail account on this House on 13 October, be approved. behalf of private outsourcing companies. That the draft Social Security Class 3A Contributions (Units The workers whose case I am raising today were of Additional Pension) Regulations 2014, which were laid before transferred from Royal Mail to the IT firm Computer this House on 13 October, be approved. Sciences Corporation Ltd—CSC—in 2003 as part of a contract to outsource all Royal Mail’s IT to the company CHILDREN AND YOUNG PERSONS and retain all the 1,713 staff under the TUPE protocol. That the draft Child Poverty Act 2010 (Persistent Poverty At that time, employees had a choice either to leave Target) Regulations 2014, which were laid before this House on pension contributions that they had already paid within 16 October, be approved. the Royal Mail pension and start a new separate corporate pension with future contributions with their new employer, LEGAL SERVICES or to transfer all their contributions to a new CSC That the draft Legal Services Act 2007 (Claims Management pension and subsequently pay into that. The only choice Complaints) (Fees) Regulations 2014, which were laid before this that appeared to face workers was whether their pension House on 3 November, be approved. contributions would be safer in one scheme or another and where they would be most likely to get a decent CONSUMER PROTECTION return on the pension contributions to which they were That the draft Compensation (Claims Management Services) entitled. (Amendment) Regulations 2015, which were laid before this House on 3 November, be approved.—(John Penrose.) Many workers—it is not clear how many—elected to Question agreed to. keep their pre-2003 contributions within the Royal Mail scheme and open a new CSC pension with future 399 Annual Pension Allowance 3 DECEMBER 2014 Annual Pension Allowance 400 (Transferred Workers) (Transferred Workers) contributions. However, a combination of the changes The second example involves the group of CSC workers to the allowance regime—which was dramatically reduced who were made redundant in 2012. That was part of a in October 2010 and further reduced in subsequent global redundancy programme in which CSC laid off Budgets—enforcement of TUPE rights, previous changes 640 workers. The workers had their CSC pensions taxed made to the allowances on what are perceived to be as second pensions, whereas if, back in 2003, they had temporary pensions, and Treasury guidance on what decided to transfer their pensions into the CSC pension constitutes a temporary pension has led to huge costs scheme, it would all have been seen as the same scheme. being applied to workers made redundant from CSC in CSC attempted to honour its commitments to its recent years. employees by ensuring that they still received as employees Revelations in Computerweekly.com about the efforts of CSC what they would have been entitled to if they that CSC has made to stem losses on its involvement had remained with Royal Mail, but that led to those with the Royal Mail account suggest that 63% of the individuals being treated as though they had two separate staff who originally transferred from Royal Mail into pensions, although in practice they have been employed CSC have now been cut. Although exact numbers are in the same job throughout that period. The issue is not known, it is believed that the majority have left the about how public sector workers whose employer changes, business completely. That suggests that some 1,082 even though their job does not change, are seen as employees could be affected in this case alone. Some of having two different jobs. Although TUPE should protect those will have chosen to move into the CSC pension them from being worse off as a result, in practice they scheme and will not be affected in the same way. are not protected. There appear to be two different ways in which The Treasury viewed the money as having been paid workers have been disadvantaged. First, I would like to all at once, even though it was received by the workers raise the case of Michael Randell. Michael had worked annually over many years, and the way in which workers’ for Royal Mail Group for well over 25 years, during pensions are taxed by the Treasury meant that people which he had saved for his retirement by contributing on decent but not in any sense exceptional salaries faced into the pension scheme. Mr Randell is now 53. Under huge tax bills—more than £200,000 in one case that I the terms of his employment, had he remained a Royal have heard of—on income that they had not necessarily Mail employee he would have been entitled to take his received. pension under early retirement provision if he had left It is too early to know the total number of people the firm over the age of 50. Therefore, in order to who will be sucked into this unfortunate state of affairs, comply with TUPE, CSC arranged to make a notional but taking into account how many have moved from the payment to source an equivalent pension value until he public sector to the private sector, it might be very high. is 60, when he will move on to the Royal Mail pension. That raises important questions about the extent to Mr Randell’s usual pension contributions are less than which the Government fully understood the impact of £5,000 per year, but when he is made redundant, this the changes they made to the annual pension allowance one-off notional payment—which would effectively buy when they made them. an annuity for the next seven years to comply with The Treasury document, “Restricting pensions tax TUPE regulations, from CSC’s perspective—is classed relief through existing allowances: a summary of the by the Treasury as a one-year contribution to a second, discussion document responses”, revealed: in this case temporary, pension. In practical terms, it is not a second pension—it is a continuation of the first “The nature of DB schemes means that some individuals on moderate incomes could exceed the AA—particularly where they pension that he has from doing the same job with two are in final salary DB schemes and see spikes in pension accrual… separate employers. The Government is committed to managing impacts on these At a time when the Government rightly ask employees individuals as far as possible.” to put money aside to save for themselves in retirement One of these solutions was to allow individuals and to plan ahead, this group of workers, who did “to carry-forward unused annual allowance from up to three precisely that, are being caused huge problems because, previous years, to offset against contributions in excess of the AA back in 2003, they made a decision about which pension in a single year.” scheme they should choose to contribute to, yet they However, the Government recognised that in exceptional could not possibly be expected to have had foresight as cases such mitigation would not be sufficient. The Financial to the implications of that choice. Secretary made that clear in correspondence with me. The intention of the Government’s proposals was to He said at the time that the Government had consulted target richer pensioners. In 2010, the hon. Member for on options to give individuals and schemes more flexibility Fareham (Mr Hoban) announced: over the payment of charges. On 3 March 2011, the “It will be targeted at those who make the most significant Government announced that individuals with annual pension savings. An annual allowance of £50,000 will affect allowance charges of more than £2,000 would be able to 100,000 pension savers—80% of those will have incomes over elect for the full liability to be met from their pension £100,000.” benefit. That obviously made it easier in the short term, Unfortunately, as Mr Randell’s case has shown, the but in practice it still means that individuals will lose policy has also hit those on lower incomes with reasonable out, as they receive a lower pension than they otherwise pensions. The Government have accepted the possibility would have done. The fact that they are still taking that individuals on lower incomes could in exceptional money out of their future earnings to pay a bill does not circumstances face a sharp increase in the tax charged seem to fit with the principle of the Government’s on their pension, but as I have demonstrated, such measures. moderate language does not reflect the significant numbers It is ironic that this debate is taking place on the day that might be affected or the size of the impact on their that the House has again debated the Taxation of pension planning. Pensions Bill, because the Bill was a missed opportunity 401 Annual Pension Allowance 3 DECEMBER 2014 Annual Pension Allowance 402 (Transferred Workers) (Transferred Workers) [Toby Perkins] I cannot comment on the particular circumstances that he raised, it might be helpful if I give some background to address the plight of TUPE-ed public sector workers to those rules. who face the unfairness that I have highlighted. The The annual allowance rules provide a limit on the Government have thus far fallen short of the action that amount of tax-advantaged pension savings that can be is required. The measures that have been put in place made for individuals each year in registered pension are compensatory, but they do not compensate fully. schemes. Savings in excess of the limit are subject to the They mean that the workers of CSC and probably many annual allowance income tax charge. For individuals in other former public sector workers will lose out on the defined contribution schemes, it is straightforward to pension to which they should have been entitled. determine the level of contributions paid into a scheme The further stages of the Taxation of Pensions Bill to be assessed against the annual allowance limit. However, provide an opportunity to establish cross-party support the position is more complex for defined benefit schemes for further analysing the effect that pension changes because individuals accrue a right to an amount of have had on CSC workers, and for setting out a framework annual pension from a set pension age, and the level of in which the unfair nature of the situation can be contributions made by the individual and the employer tackled. I hope that that might happen in another place, does not reflect the increase in the value of the member’s as I suggested on Report. The Government’s approach pension rights. We therefore needed a method to calculate to reforming pensions tax relief was supposed to be the deemed level of contributions to test against the based on ensuring that fairness was maintained, but it annual allowance. That method would have to be actuarially appears that a loophole has developed that could, in equivalent to the amount required to fund a similar some cases, lead to people losing thousands from their promise in a defined contribution scheme. pension. Detailed consultations were held with the pensions I would be grateful if the Minister recognised that the sector before the rules were introduced in 2006, and in measures to alleviate the problem are sticking plasters 2010, when the Government consulted on the reduction that aim to provide compensation or to reduce the in the annual allowance. As a result of the consultations damage of the proposals, and that what is required is and with support from the pensions sector, the amount for people who are perceived to have had two jobs, when of defined benefit pension savings in a year, when in reality they had one, not to have to choose to pay a measured against the annual allowance limit, is broadly tax bill, which they would not have faced if they were equivalent to the increase in the capital value of a still in the public sector, either all at once or from their promised pension over that period. future pension income. I look forward to hearing her response on this important issue. I recognise, in bringing To achieve the method of valuing pension savings this matter to the House, that the Government’s intentions under defined benefit schemes, special rules were developed were positive. However, when unintended consequences so that for each £1 a year of pension that will be payable, arise, it is our responsibility to evaluate them and, the present capital value of that annual pension benefit hopefully, to work together to deliver a fairer outcome is £16. The use of the 16:1 factor to value defined benefit for our constituents. pensions promises was adopted from April 2011 when the annual allowance was reduced, following recommendations by the Government Actuary. Before 5.50 pm that, the factor was 10:1. The rules are intended to The Economic Secretary to the Treasury (Andrea strike a balance between providing a system that is Leadsom): I congratulate the hon. Member for Chesterfield reasonably simple for individuals to understand and for (Toby Perkins) on securing this debate. It is a complicated pension schemes and HMRC to administer, and meeting subject and he explained it very well. I am sympathetic the Government’s fiscal objectives. to the issues that he raised. He will know that the The hon. Gentleman raised concerns about the treatment Government greatly value the important work that is of bridging pensions under annual allowance rules. Tax carried out by public sector workers and by those who relief is provided for pension savings under defined were previously in the public sector. benefit schemes on the understanding that the funds are The hon. Gentleman discussed the effect of the annual used to provide an income throughout retirement. To allowance rules for tax-relieved pension savings. He support that aim, scheme pensions must normally be will, of course, be aware that we live in difficult economic payable for life, and must not decrease except in prescribed times and that few households in this country have not circumstances. One such circumstance is where a bridging been affected in some way by the economic crash of pension is paid and the reduction occurs between age 60 2008-09. As part of our deficit reduction plans, the and state pension age. A bridging pension is a temporary Government had to make difficult decisions in 2010 increase to a private pension. Typically, it is provided and 2013 to restrict the cost of pensions tax relief by where individuals retire before reaching state pension reducing the annual allowance from £255,000 to £50,000 age, and where the level of the bridging pension is from 2011-12 onwards and to £40,000 from 2014-15 broadly similar to the expected state pension. When the onwards. We put those restrictions in place to ensure state pension starts to be paid, the bridging pension is that the cost of pensions tax relief remained affordable reduced or comes to an end. and sustainable. Where the bridging pension is offered as a discretionary The hon. Gentleman raised a number of concerns award, or is a benefit to which the individual becomes about the way in which the annual allowance rules work entitled only if they choose to retire early, the award of for defined benefit pension schemes in the context of the additional pension may give rise to pension savings bridging pensions, which can affect individuals who are in excess of the annual allowance limit. That is because transferred from the public sector under TUPE. Although the temporary nature of the increase to an individual’s 403 Annual Pension Allowance 3 DECEMBER 2014 Annual Pension Allowance 404 (Transferred Workers) (Transferred Workers) pension is not recognised in the same way that increases payments and liable to tax at a rate of up to 55%. As I to the pension’s capital value is calculated for annual have set out, scheme pensions can reduce only in certain allowance purposes. prescribed circumstances. Where they are reduced in The Government have considered whether special any other circumstances, unauthorised payments will annual allowance provisions should apply for bridging arise and be subject to certain tax charges. The legislation pensions, and that can be found in our response to for that is clear, has applied since April 2006, and is set consultations on the reduction of the annual allowance out in schedule 28 to the Finance Act 2004. Those rules limit from 2011-12. We recognise that the restriction of support the aim for defined benefit schemes to provide relief may create particular challenges for members of an income throughout retirement while protecting against defined benefit schemes because of the way promised manipulation of the tax-free lump sum. benefits in those schemes are valued, but we concluded This is not a simple area. Although annual allowance that it would not be desirable to complicate the pensions rules for defined benefit schemes may appear difficult to tax regime by including special provisions for bridging understand, they are a necessary part of meeting the pensions. Instead, we introduced special rules intended Government’s fiscal and policy objectives of targeting to mitigate “hard cases”. Those rules allow individuals tax relief effectively. The rules are intended, as far as to carry forward unused annual allowances from the possible, to provide a straightforward structure for three preceding tax years, and set them off against individuals and schemes, but I recognise that there may pension savings above the annual allowance limit in a be particular cases where the rules do not work as single year, providing that the individual was a member intended. I am grateful that the hon. Gentleman has of a registered pension scheme during those three years. raised these issues today; he should rest assured that They also allow individuals to meet annual allowance they will be kept under review and that the specific cases charges of more than £2,000 from their pension scheme. he has discussed will be taken into account. That is known as the “scheme pays” facility. Question put and agreed to. The hon. Gentleman raised concerns that when a bridging pension paid to an individual from one scheme comes to an end, future pension payments to that 5.58 pm individual from that scheme are treated as unauthorised House adjourned.

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An increased minimum landing size for bass, coupled Westminster Hall with a corresponding increase in mesh sizes, would be a huge positive for the UK bass fishery. Over the years Wednesday 3 December 2014 much time has been spent on trying to convince those in charge to increase the UK MLS. The right hon. Member for Exeter (Mr Bradshaw), who is here today, nearly [MR DAVID CRAUSBY in the Chair] managed to implement the reforms when he was Fisheries Minister in 2007, but alas, just before he could pull the UK Sea Bass Stocks lever, he was replaced and the whole thing dropped Motion made, and Question proposed, That the sitting through the floor before it could reach the statute book. be now adjourned.—(Harriett Baldwin.) Unfortunately, his successor did not carry on with the implementation, which is a tragedy. We are now living 9.30 am with the consequences of that change. George Hollingbery (Meon Valley) (Con): I am grateful In 2012, the then Fisheries Minister, my hon. Friend to serve under your chairmanship, Mr Crausby. It is a the Member for Newbury (Richard Benyon), who is pleasure to be here debating the important subject of also with us today, initiated a further review. That the the management of sea bass in the UK. study is still in train was confirmed by the current For many years, those involved in sea bass fishing in Minister in 2013, although it has yet to be published; the UK have warned that the stock has been left increasingly hopefully we will hear a little more about that later. vulnerable by weak management tools and practices. Technical papers suggest that the main benefit, at least Now, almost too late and certainly with far too little, in terms of yield, of management aimed at protecting the European Union and others have woken up to the juvenile sea bass, which increasing the MLS would do, potential for a total collapse in the sea bass population chiefly accrues to fisheries operating within the six-mile in our domestic waters. Some may say that I am being zone. The implication is that there is every reason to overdramatic, and some may say that we have all been increase the MLS here in the UK unilaterally, whatever here before and that it will all get better in due course. I happens at EU level. We will benefit, whatever the rest say they are wrong. This is happening now, it is happening of Europe decides to do. to us and it needs to be dealt with. In 2013, the International Council for the Exploration Tim Loughton (East Worthing and Shoreham) (Con): of the Sea, which advises the European Union on the I am pleased that my hon. Friend has secured this strategies needed to exploit our fishing resources safely, debate, because this is a big issue in my constituency. proposed a 36% reduction in the catch of sea bass. That Does he agree that enormous damage is done to the proposal was not acted upon. Now, less than a year feeding and spawning beds of sea bass by pair trawlers, later, ICES advises an 80% reduction. We only have to which drag the bottom of the oceans and take away all look at the Irish experience of the early 1990s to know the seaweed? Does he acknowledge that one solution what comes next if we hesitate: a total failure of the might be to restrict sea bass to sea anglers? It has been stock and a total ban on all forms of bass fishing. The calculated that in Sussex the value of sea angling is tragedy is that we do not need to go there. We need only more than £31 million, including tackle, accommodation grip the problem here and now, to a scale and design and boats. That is more than three times the value of that will make a real difference. commercially landed fish stocks. Such a measure would The question is: how on earth did we up here in the go a long way towards conservation, too. first place? By any reckoning, we now pursue bass much more actively and much more successfully than in the past. The exploitation of sea bass has increased hugely George Hollingbery: I agree with my hon. Friend. I across all areas, and current landings run at a level will allude to the study that he is referencing a little later roughly four times that of the early 1990s. In addition, in my remarks. On the ecological damage done by pair fishing activity is now often targeted at spawning trawling and indeed by other sorts of trawling, including aggregations. Studies show that bass spawn offshore in otter trawling, there is no doubt that it is very destructive the English channel and the eastern Celtic sea from to the environment. Although it is effective and useful February to May, and as they do so they become sitting for commercial fishermen, all of us interested in sea ducks for pair trawlers, which ruthlessly exploit them. angling should look to do something about it more New spawning aggregations in the English channel are generally than just with specific reference to sea bass. being discovered and targeted, including some inside That is an important issue. the 12-mile limit off the Kent and Sussex coasts. Finally in the sorry tale that I was outlining, the On top of all that, nothing like the number of fish average recruitment—the number of sub-one-year-old that should be reaching breeding size actually do so fish being added to the fishery—between 2008 to 2012 because of a farcically low minimum landing size. Bass was less than a quarter of the long-term average. We are are a slow-growing species, and female bass do not fishing more, we are increasingly targeting sea bass, we become sexually mature, in UK waters at least, until are specifically fishing out breeding shoals and we are they are at least 42 cm in length, and some estimates put not allowing the young stock to reach spawning age. the figure as high as 46 cm. The current minimum How much more is there to say other than that, in an landing size is an absolutely ludicrous 36 cm. That was ecosystem that is supposed to be carefully managed, set back in 1989, when even the Department’s own such practices are, to use an American phrase, as dumb estimate said that the maximum sustainable yield for as dirt? I do not know how else to describe the situation. sea bass would be reached if the minimum landing size There could not be a worse way of managing a fishery was 50 cm, yet still we sit here with the level at 36 cm. that we apparently want to keep for the longer term. 117WH UK Sea Bass Stocks3 DECEMBER 2014 UK Sea Bass Stocks 118WH

[George Hollingbery] its conclusions are nothing short of startling. Its low-end estimate was that the economic and employment benefit Before looking more closely at the current policy per tonne of fish removed by recreational bass angling proposals for managing the problem, it is worth spending was more than 40 times that of commercial fishing—a a bit longer talking about the economics, to which my pretty extraordinary statistic in anybody’s book. Despite hon. Friend just referred. There is a crucial difference the much smaller weight of fish removed by recreational between the returns in the commercial and recreational anglers in the Sussex IFCA, the total benefit to the local sectors. If we are to reach a sustainable, long-term economy of recreational angling was still, as my hon. solution, it is critical that we understand that well. The Friend said, more than three times that of commercial best data we have on the catches of the commercial and fishing. recreational bass fishing sectors in the UK are in the We know for a fact that recreational bass fishing is “Sea Angling 2012” report published by the Department worth far more to the economy than commercial fishing, for Environment, Food and Rural Affairs. That study and is a great deal more sustainable. That is one of modelled the recreational share of the total as being many reasons why the current EU proposals are puzzling somewhere between 20% and 33% of the retained catch to the point of bewilderment. As the Minister knows landed in the UK, but it is clear about the lack of only too well, they propose limiting recreational anglers statistical certainty in the data on recreational catches to only one fish per day, despite the fact that, as far as I and angling activity: understand it, the EU has no competence over people “Respondents were self-selecting and unlikely to be representative who go fishing for recreation, and, indeed, the pretty of all sea anglers. On average they were more avid and successful skimpy evidence that recreational anglers are the problem. anglers than those interviewed in the other more statistically designed Sea Angling 2012 surveys, reporting higher catch rates, For one spawning area, area IVc—I will happily share more days fished, and higher membership of clubs and national the map of the areas with colleagues who wish to see angling bodies.” it—the EU makes an as yet incomplete proposal to In short, there are good reasons to believe that the likely limit the daily amount of fish taken during the spawning level of recreational landings is much lower than the period by a certain number of vessels. We genuinely report suggests, or is, at the very least, at the bottom end know no more than that. How that is supposed to make of the report’s estimate. a meaningful difference to the current situation is, frankly, anybody’s guess. In my view, it is the political equivalent It is also clear that the economic activity generated by of trying to stop your house falling down by painting it recreational angling dwarfs that of the commercial sector. a different colour. “Sea Angling 2012” shows that there are 884,000 sea anglers in England. They directly pump £1.23 billion We all know what needs to be done. The French into the economy, and 10,500 full-time jobs depend on know it, the Dutch know it, we know it—everybody that spending. Indirect spend is equivalent to £2.1 billion knows it, so for goodness’ sake, let us get on and and 23,600 jobs. Those figures are direct from the actually do it, finally, for once. We have to drastically Department. reduce the amount of fish taken. We have to allow fish to reach sexual maturity. We have to stop most, if not Guy Opperman (Hexham) (Con): I congratulate my all, fishing in the spawning season. We have to do a hon. Friend on securing this debate. On a day when we better job of protecting and enhancing nursery areas. are celebrating our long-term economic plan, does he Finally, we have to grasp the undeniable reality that agree that we need to support individual anglers and the converting the fishery to one dominated by recreational economic activity he describes? If we need evidence of fishing is the only long-term solution that will protect the difference he proposes, we can look to our hon. our economic interests and give the fish a future. Any Friend the Member for Newbury (Richard Benyon), solution that markets itself as long-term but does not whose actions in government have directly caused an deal with all those issues will fail; of that there can be increase in economic output off the north-east coast by little or no doubt. reason of the salmon that is now seen in the Tyne.

George Hollingbery: I agree completely. It is always Sarah Newton (Truro and Falmouth) (Con): I difficult to quantify exactly the economic benefit of congratulate my hon. Friend not only on securing the fishing done for fun, but all the evidence points inescapably debate but on making such a powerful case. Does he towards it being an extremely important stream of agree that the Government must also ensure that the revenue, in particular for less economically advantaged IFCAs properly engage with recreational anglers? When areas, of which there are a great many in the south-west I go to IFCA meetings, I see that the commercial and the part of the world that my hon. Friend represents. fishermen have a far greater influence in the workings of the IFCA than the recreational anglers. That problem It is also worth noting that the VAT alone that is must be addressed if we are to get the changes that my collected from sea anglers dwarfs the entire first sale hon. Friend rightly identified. value of all commercial fish landings in the UK. That demonstrates the scale of the economic benefit of recreational angling. That was further reaffirmed by a George Hollingbery: My hon. Friend is absolutely detailed study released last Friday, to which my hon. right, but that will only happen when the IFCAs and Friend the Member for East Worthing and Shoreham others understand and accept the importance of recreational (Tim Loughton) referred, by the highly respected Marine angling and see the Government outline a direction of Resources Assessment Group on behalf of the Blue travel. Only then will the recreational anglers get a Marine Foundation. The study took a detailed look at proper bite of the cherry, and only then will the IFCAs sea bass fishing in the Sussex Inshore Fisheries and and other follow that course. The Government must Conservation Authority—a control area for fishing—and lead from the front. 119WH UK Sea Bass Stocks3 DECEMBER 2014 UK Sea Bass Stocks 120WH

Mr Bernard Jenkin (Harwich and North Essex) (Con): With the right measures in the right place at the right I congratulate my hon. Friend on the quality of his time and in the necessary proportion, we can make our opening speech and on raising this subject. In Essex, we fisheries policy work for us and for future generations. I have a lot of recreational anglers who provide a great hope the Minister will offer us all hope that such a deal of employment and generate a lot of tourism, but prospect can be realised. we also have very small-scale inshore fishermen who catch sea bass. Do they have a future in my hon. Several hon. Members rose— Friend’s scheme, or will they be squeezed out by the ban on commercial fishing? Mr David Crausby (in the Chair): There are six Members who wish to speak. I would appreciate it if Members George Hollingbery: I am grateful to my hon. Friend could keep their remarks below 10 minutes, so we can for that intervention. It is a vexed issue. There are get everyone in. I intend to call the Front Benchers at people who make a very small-scale living out of bass 10.40 am. fishing. My belief is that it is likely that in the near term, as has happened in Ireland, the north-east coast of the 9.48 am United States and a great many fisheries where proper regulation has been put in place, people who run sub- Mr Ben Bradshaw (Exeter) (Lab): I warmly congratulate 10-metre boats will find that they make a much better the hon. Member for Meon Valley (George Hollingbery) living from taking out and guiding recreational fishing on securing this debate and on his excellent speech, in than from trawling for a few vulnerable sea bass out in which he outlined his case. the ocean. Although I would not condone any policy I do not intend to repeat the detail of much of what that forced people who fish at that scale from one to the the hon. Gentleman said. I see my role, as a former other, particularly in inshore waters, I think that reality fisheries Minister, to stiffen the Minister’s resolve when will dawn and that most of them will end up in the he negotiates in Brussels in a couple of weeks’ time and recreational sector. with the self-appointed representatives of the commercial In concluding my remarks, I hope you will excuse me, fishing sector. I warn him from my experience that if he Mr Crausby, for asking the Minister a series of detailed and the Council do not make tough decisions now, he questions. I have given him notice of some of them or his poor successor—perhaps my hon. Friend the because they are quite complex, but I would appreciate Member for Penistone and Stocksbridge (Angela Smith)— answers to as many of them as possible. will have to make much worse decisions in a year or two’s time, as the hon. Member for Meon Valley outlined. To protect breeding fish, will the Minister follow the It is far better to make tough decisions now. If the proposals made by the Angling Trust and others and Minister caves in to the self-appointed representatives seek a ban on targeted fishing based on catch composition of the commercial sector, our bass fishery will be doomed. or sufficiently restrictive vessel catch limits to make the I therefore urge him to go to Brussels and negotiate fishery unviable from January to May inclusive, to hard on behalf of the fish stocks. In the end, it is the apply to areas VIId, e, f and h and IVc in offshore fish that matter for everyone, including the commercial fisheries beyond member states’ six-mile zones? For the sector if it is to have a future. benefit of other hon. Members present, I am simply asking for proper fishing restrictions to be put in place I also want the Minister to be aware that in the view, in pretty much all the coastal waters where we find sea probably of most people in Westminster Hall today, bass, and certainly where they breed. and certainly of most people in the country who have an interest and knowledge in this area, the current Will the Minister take on board another of the Angling proposals by the Commission are not only wholly Trust’s proposals and pursue catch limits for all registered inadequate but totally imbalanced in favour of the EU vessels fishing for bass in areas VII and IV to cap commercial sector and against the recreational sector. effort, with limits set at a level that reduces fishing One of his first tasks, apart from ensuring that we get mortality by at least 40% across all member state fleets? much more meaningful and drastic action, is to rebalance I have apologised to the Minister for not giving him those proposals in the other direction. notice of that question. The Minister will know the value of the recreational To allow fish to reach breeding age, will the Minister sea-angling sector, and not only because his hon. Friend, work to ensure that a minimum landing size of 46 cm or the hon. Member for Meon Valley, reminded him of it, over is adopted for sea bass at European level? Will he but because his own Department conducted research undertake to impose such a limit unilaterally on UK into it in 2012; I think I can recall earlier pieces of landings in any event? At the very least, will he confirm research into it, too. The Department’s research in 2012 that the review of the minimum landing size for bass found that the sector’s income for the country was started by his Department in 2012 is still progressing, £2.1 billion, it sustains 23,000 jobs, and as I think the and will he undertake to publish the results as soon as hon. Member for Meon Valley said, the VAT receipts possible? To help protect the recruitment stocks, will he alone from the wealth and activity generated by sea undertake to look again at the extension of bass nursery angling dwarf the income from the commercial fishing areas? sector. As I said, the Minister’s first task is to rebalance Finally, does the Minister agree that the development this inadequate plan from the Commission. of sea bass fishing as a recreational activity is the best The Minister’s second task is to grasp the nettle on long-term solution to both the ecological and the economic minimum landing size. I commend to him an Adjournment sustainability of the fishery, as proved by the Irish sea debate that was held in the main Chamber in 2007, bass experience, the striped bass fishery of the north-east between the then hon. Member for Reading West—Martin coast of the US and many other examples? Salter, who was a great champion of sustainable fisheries 121WH UK Sea Bass Stocks3 DECEMBER 2014 UK Sea Bass Stocks 122WH

[Mr Ben Bradshaw] 9.54 am and the sea-angling community—and my successor as Richard Benyon (Newbury) (Con): I am grateful for Fisheries Minister, Jonathan Shaw. In that debate, all the opportunity to comment on the excellent speeches the arguments about minimum landing size were rehearsed. we have just heard. I compliment my hon. Friend the As the hon. Member for Meon Valley has reminded us, Member for Meon Valley (George Hollingbery) for when I was the Minister I took the decision to increase calling this debate. the minimum landing size, to 40 cm as a first step, then to 45 cm after a period of review. Tragically, however, The story of the management of this stock has been a that decision was reversed by my successor who, as is very bad one indeed. The high point was the decision by often is the case, came under pressure from the very the right hon. Member for Exeter (Mr Bradshaw) to powerful self-appointed commercial fisheries spokespeople. increase the minimum landing size, and all credit to him for taking it. If we had followed that decision through That was a disastrous decision. If people look at that at the time, it would certainly have made a difference. debate, they will see that the reasons given by my Why his successor rescinded that decision is something successor as Minister for not proceeding with the increase that I could not really determine from reading the was that the bass stocks were in decent shape. Well, look excellent Adjournment debate in 2007 to which the at them now. All I can say to the current Minister is, right hon. Gentleman referred. “Please learn the lessons of that mistake and go for an increase in the minimum landing size.” It is absolutely When I was in the Minister’s position, I set about insane that we allow people to catch the vast majority of trying to reverse that change in policy, and I tried to bass before they even reach spawning size: that is my increase the minimum landing size. I was persuaded second message to the Minister. that it was important to do everything to conserve bass at a European level, and I believe that it is right to get My third message is to have a look at what I still agreement among our European partners, because many consider to be the best Government strategy on fisheries vessels from other countries fish this stock in our waters. published in the past 20 years—a document called “Net To go to the EU was a sensible piece of advice that I Benefits”that was published in 2004. It was commissioned received. by the then Prime Minister, Tony Blair, in 2002, because However, if we just left matters to the sclerotic processes of the disaster facing the North sea cod industry and of the EU, this stock would crash before we could do the repercussions, not only on cod stocks but on fishing anything about it. There is a lot that we can do unilaterally, communities around the North sea. It took two years to and there is a lot that we can do in this House and develop what I believe still stands as the best long-term beyond as a sort of club of ex-Fisheries Ministers; I do fisheries strategy for this country.I commend that document not know what the collective noun for ex-Fisheries Ministers to the Minister and to my hon. Friend the Member for is, but I think it is an “exhaustion” of ex-Fisheries Penistone and Stocksbridge, the Opposition spokesperson, Ministers. We would all say to my hon. Friend the if she has not read it already; I hope that she reads it Minister that he has a much more difficult task this before she gets the job of Fisheries Minister, because December than the tasks that I faced in three or four it is the best policy document that I can remember. years of December rounds of talks. He is a very good In that document, the Government at the time said: negotiator and takes his job very seriously. However, my advice to him would be to take precisely the advice of “We should review the evidence supporting arguments for the the right hon. Member for Exeter—that this stock will designating of commercial caught species for wholly recreational not exist unless tough decisions are taken. sea angling, beginning with bass by the end of 2004.” We now face a collapse in stocks. At times, when we That document was published in 2004, 10 years ago. talk about minimum landing size, it seems slightly like Here we are now, with the bass stocks at risk of collapse, fiddling while Rome burns, and that there are more and far too little has been done in the meantime. important things that we could do. However, it is still necessary to increase minimum landing size and I hope Consequently, the third thing that the Minister can that the Minister will consider doing that, and take go away and do is a longer-term thing, which is to have forward the work that the Department for Environment, another look at designating the bass fishery as solely Food and Rural Affairs has already done on this issue recreational. That was a Labour policy 10 years ago; it and act unilaterally. has got nowhere, and we are now paying a very high price as a result. Incidentally, the “Net Benefits” report I take an old-fashioned view that fish should not be was endorsed shortly after its publication by the then harvested until they have had a chance to breed. It is the Environment, Food and Rural Affairs Committee, which spawning biomass that is crashing and it is on that issue also supported re-designating bass fishing as a recreational that action needs to take place. This situation has arisen fishery. before; we can look beyond our borders and see where it has happened before. There is a fishery on the east coast Those are my very short political messages to the of the United States called the striped bass stock fishery, Minister. The hon. Member for Meon Valley has done a which is now worth a lot of money. I have heard varying great job in laying out the detailed case for change, and figures, including the figure that now, in its healthy the challenge that we face. However, my simple message state, it is worth $1 billion a year to the state of to the Minister is for him to go away, fight for bass and Massachusetts in terms of tourism and the added benefits take some radical action, because if he does not do so, that angling provides. I have also heard that nationally he—if he is still in the job—or his successor will have a it is worth $2 billion a year to the US economy, and much tougher job further down the line. possibly more. 123WH UK Sea Bass Stocks3 DECEMBER 2014 UK Sea Bass Stocks 124WH

The stock spawns in the Chesapeake bay, but in the learn in that regard. People who go there are welcomed late 1970s it was overfished and crashed. Immediately, and find charter boats linked to hotels and pubs. The everyone was prevented from fishing it, whether they whole package is there; it is part of a deal that attracts were recreational or commercial anglers. The stock has people. I want those fisherman to go to Devon, Sussex now recovered and it is a massive draw. British bass and Essex and exploit this exciting game fish. anglers spend all their savings to fly from the United Kingdom to the United States to exploit this exciting Mr Jenkin: I am going to do something that should fish. It is branded; people wear T-shirts with the slogan, never be done in the House of Commons, which is to “I’m a striped bass fisherman.”However, British fishermen ask a question without knowing the answer. I do not should not have to do that in US waters; they should be intend to put my hon. Friend on the spot, but he was able to do it in UK waters. Similarly, they should not Fisheries Minister until quite recently, so why did he not have to go to Ireland, where there is a very buoyant do this? What was the obstacle? Where is the resistance? recreational fishery; I will come on to talk about that What were he and his successor having to fight to be shortly. able to implement this measure, not just in the EU, but I would love to portray the problem in the simplistic domestically? way that some do, which is to say that it is all about the pair trawlers. Well, I am afraid that it is not all about Richard Benyon: I did set about trying to increase the the pair trawlers. In the area from Felixstowe round to minimum landing size. I regret that we did not move Sussex, the use of trammel and drift nets has increased faster when going through the process of consultation by 20% or 30% in the past year. We need to look at all and further consultation, and trying to ensure that this the activities in this sector. What is really interesting was agreed at European level, because the evidence is all about the Marine Resources Assessment Group study there. When you are a Minister, people tell you that that my hon. Friend the Member for Meon Valley someone cannot be prevented from doing something mentioned is that it relates to a fishery in Sussex, where without enough evidence and judicial review, and that every way of exploiting this diminishing stock is used. there are threats of infraction, and all the other things. There are pair trawlers coming over from the continent However, I freely admit that if I had my time over again to exploit it; there are inshore fisheries that exploit it I would steamroller this through and take the consequences, commercially; and there is also a very important recreational because the consequence now is a crashing stock. The fishery. That is why MRAG chose Sussex to conduct stock will disappear, along with the economic value. this important piece of research. To the fishermen in the constituency of my hon. As my hon. Friend the Member for Hexham (Guy Friend the Member for Harwich and North Essex Opperman) said earlier, I suspect that we will hear later (Mr Jenkin), I say this: I have met them many times and today in this House the words, “long-term economic I have great respect for them, but they will not be fishing plan”. Well, let us just look at the economics of the for bass, not because of any decision taken by any issue that we are talking about. In Sussex alone, I Minister of any party, but because there will be none. calculate—from the figures in the MRAG report—that They have a great future ahead of them exploiting other between 258 and 267 tonnes of fish were harvested stocks, such as thornback rays and other things that are commercially in 2012, and somewhere between 10 and prevalent in those waters, but they really will have an 19 tonnes were harvested recreationally. Taking the economic benefit if they can get the fishermen on their median of those two, about 5.7% were landed from the boats to catch recreational bass in future. recreational sector. However, what is really important is that the economic output per tonne in Sussex is 40 to 75 times higher for recreational than commercial. The Mr Bradshaw: It might help the hon. Gentleman if I employment that is generated, calculated per tonne, is say a little bit about my experience. In this regard, it was 39 to 75 times higher for recreational bass fisheries than one of those occasions as a Minister where I had to commercial. stand up to powerful and well-funded vested interests The report states clearly that the final economic and and to officials. Great as my officials were, I am afraid it employment impacts of recreational bass fisheries in was a Minister’s decision against the advice and the will Sussex are estimated at £31.3 million and 353 full time of my officials, and sometimes that is the right thing to equivalent jobs. The final economic employment impacts do. of commercial bass fisheries in Sussex were estimated as £9.25 million and 111.28 full-time equivalents. That is a Richard Benyon: I thank the right hon. Gentleman staggering difference. As my hon. Friend the Member for making that position clear. It is important to listen for Meon Valley said, if calculated across the piece it is to advice, but as I say we could still be fiddling when more than three times as valuable as a recreational Rome burns. This stock will shortly be gone. fishery than as a commercial one. Other hon. Members want to speak. I shall conclude It would obviously be better if the EU had measures by saying that 80% of bass swim within 12 nautical in place to put this stock back on track, but I urge the miles of the coast, so action is needed now. We need Minister to look at what has happened in Ireland, action on minimum landing sizes; we need spatial and where there is a recreation-only fishery, a strict catch temporal closures; and we need better protection of limit and a high minimum landing size, which I gather is nursery areas. Yes, we need a bag limit, but I do not about to be increased to 50 cm, on the basis of scientific believe that that is a massive issue—whether it is one, advice received by the Irish Government. This is a two or three—but other technical measures in the highly valuable tourist attraction. In Ireland, angling, commercial fishery are needed. We also need better data tourism and coastal communities are integrating in a so that we can face down the interests that say that this much better way than in this country. We have a lot to is the wrong decision. 125WH UK Sea Bass Stocks3 DECEMBER 2014 UK Sea Bass Stocks 126WH

[Richard Benyon] Despite questions about the long-term stability of bass numbers, this species appears to be extending its The only way forward for bass is for them to be range northwards, with bass now being caught with caught by hand line or rod. Any commercial activity at some regularity in areas such as the Yorkshire and all should be based on its being a premium, hand-caught north-east coasts, where they were previously fairly resource, in a similar way to mackerel in the south-west rare. and other species: a virtue is made of the fact that those are local and high quality. My frank message to poncey Mr Gregory Campbell (East Londonderry) (DUP): restaurateurs who demand bass the size of the palm of Before my hon. Friend leaves the issue of recreational my hand for their fussy customers is, “Get those from fishing and the commercial benefits that can be derived aquaculture, don’t get them from out of our seas, because from it, does he agree that the progress made in the Irish that is destroying a stock.” Actually, their customers Republic can be replicated, not just in Northern Ireland will probably mind more about not being able to eat but across the UK, if we take the right decision and if a bass in future. I want to see our waters criss-crossed third Minister does not also find the difficulties almost with charter boats taking fat cats out to fish this really insurmountable in trying to address the problems that exciting stock, putting that money into coastal communities, we all face? and see a sustainable source working for this country, not crashing. Jim Shannon: I thank my hon. Friend and colleague for his intervention. Two previous Ministers have mentioned their experiences when they were in the position of 10.5 am power that the present Minister is now in, so perhaps Jim Shannon (Strangford) (DUP): I thank the hon. their examples can be used to change the direction of Member for Meon Valley (George Hollingbery) for the civil service roundabout, to push the matter through. securing such an important debate, which could help Many UK anglers fish for bass on a purely catch-and- shape the future of bass angling in the United Kingdom. release basis to help preserve stocks of the species and As I have mentioned on numerous occasions in this ensure that bass stocks return to a higher level, in turn Chamber, I represent an area of the UK that has a rich preserving them for future generations. In 2010, new fishing industry; in fact, for many, fishing is the life legislation was proposed in Northern Ireland to adopt blood of the village. In Portavogie in particular, it is a the same protection measures for bass stocks as exist in tradition that has been passed down many generations. the Republic of Ireland. The proposed legislation is Unsurprisingly, this is a subject of great interest to me. going through the Northern Ireland Assembly, but a We are focusing on commercial fishing and looking loophole has arisen. The legislation affects the crucial at recreational fishing. Many hon. Members have spoken “Prohibition of the sale of bass” rule by introducing a about work done in the Republic of Ireland. I want to clause that allows for bass caught accidentally by trawlers mention that and some work done in Northern Ireland. to be landed and marketed as allowable by-catch. Recreational sea angling attracts some 1.45 million Case histories from the Republic of Ireland and the anglers per annum and is worth in excess of £500 million United States of America reveal how the sustainable per annum to the economy of England and Wales. Bass management of fish species, such as the European sea are a highly sought-after fish and bass angling attracts bass and the striped bass, primarily for recreational some of Britain’s most committed anglers, due to the benefit, can generate superior economic gains for local fighting qualities and high reputation of this striking- and national economies. We cannot ignore that money looking fish. and how that helps villages and recreation. Undoubtedly The development and unregulated use of inshore the UK has lagged far behind other countries in realising monofilament gill nets, which commenced in the mid-1970s, the economic potential of proactive management of the followed by the development of winter bass pair-trawl marine species targeted by recreational anglers. fishing in the 1980s, means that bass are relentlessly There are a number of fishing competitions and pursued commercially as soon as they leave the estuary vessels around the coast of the United Kingdom, and I nursery areas. Bass are a slow-growing, long-living species, will mention two. The hon. Member for Carmarthen and can live for up to 25 years. I reiterate what hon. West and South Pembrokeshire (Simon Hart) will probably Members have said: many are caught as pre-adults at mention the Terry Herman bass fishing competition, six to seven years old. We need to control that. I am sure which takes place each summer in Pembrokeshire. It is that the Minister will hit on that issue and mention also a great charity fundraiser. There are examples like what we have done in Northern Ireland and what has that around the United Kingdom, and good comes been done in the Republic as well. from them. In 2013, the UK media reported that bass numbers The hon. Member for Newbury (Richard Benyon) were at their lowest in 20 years and that the breeding mentioned the USA. The Big Bass Splash—the Americans stock of bass had reduced by almost a third since 2009. sometimes describe things in a different way from the To complicate matters further, bass is a non-quota rest of us—has taken place in Kentucky since 1984, species and there is a minimum landing size, which with prizes of up to $85,000 to be won. We have seen makes controlling and limiting commercial catches even bass competitions televised in sports programmes. We more difficult. However, in Ireland commercial bass are well aware of “Extreme Fishing with Robson Green”; fishing has been restricted and protected bass areas those interested in fishing will enjoy that programme, have been created, and the fishing there has improved which features all the fish we wish we could catch. I dramatically. Many in the UK see the Irish model as a could never even catch one. The Jersey Open Shore Bass way to restore British bass stocks. There are examples Festival takes place every October, with a competition close at hand that we can use to help in this regard. for anglers of all levels of experience to encourage the 127WH UK Sea Bass Stocks3 DECEMBER 2014 UK Sea Bass Stocks 128WH sport. I hope that a strategy, a policy and legislation to Mr Powell is not alone. There are plenty of people like help preserve recreational bass fishing will come from him along the Pembrokeshire coast and elsewhere in the debate, but will the Minister indicate what discussions Wales. he has had with Jersey, Guernsey and the Channel Islands on the rules that they will put in place? They see This is really a story of political will. We have extensive the benefit of recreational angling, and I hope we can planning conditions to protect bats and amphibians, do the same. fences that keep deer off roads and tunnels for hedgehogs and toads to pass under roads. The Minister will know I have a picture of my son when he caught a 10 lb that there was a national outcry when he went through bass on holiday in the USA. I could not get a bite, but with a policy that would remove less than 1% of the UK he got one almost right away. Those experiences make badger population—a thriving and increasing population memories that last for ever and encourage an interest —so it is sadly ironic that, on our watch and under our in fishing that will last for many years—probably a noses, we are seeing the steady decline and eradication whole life. of an iconic species. Nobody, it seems, can find a Recreational and sporting angling can deliver money solution to the problem. Even the populations of salmon to local economies. I was a guest speaker at Irish Fest and sea trout, which are of significance in my part of last year in Milwaukee, where a number of councils the world, seem to be receiving more column inches from the Republic of Ireland were represented in the these days than the future of bass. tourism facility.Every one of those councils was advertising We have heard about the economic value, and I will recreational fishing as one of the things people can do not repeat all the statistics. In my part of the world, bass when they visit Ireland. Do not ever underestimate the fishing by anglers is crucial. Its economic value and the amount of money that can be generated and how that number of jobs it provides outstrip commercial endeavours can help the economy. I spoke to one hotelier at the significantly. It has three times the numbers of employees festival and afterwards. He said that people come from and three times the money generated by those other the States specifically for the fishing. The Republic of methods of fishing, yet we put all that at risk. Ireland has recognised the benefits and moved forward. It is time that we on the United Kingdom mainland did I have a simple question for the Minister: can he be as likewise. bold about bass as he is about badgers? That is what we I always underline the increasing number of returns require. As we heard from the former fisheries Minister, from anglers, as do those who see angling tourism as a the right hon. Member for Exeter (Mr Bradshaw), it is way forward. Tourism-based sea angling for bass generates about facing down interest groups and officials and millions per annum for local and national economies. doing what is right. It is within the Minister’s gift to do As the examples of America and Ireland have shown—they the right thing. It is not as though that is an impossible are two good examples; one is close by and one is ask. It can be done, and it can be done now. If it is not further afield—the UK needs to adopt a policy of done now, the Minister will sadly have it on his record conservation so that levels do not drop any further. that bass collapsed under his watch. I cannot believe Given the long life of sea bass, it is vital that we do not that he or any other Minister, facing the evidence they fish them at the prime ages of six or seven. Instead, face now, wants that to be the case. their time in nurseries or protected areas needs to be An increase in the minimum landing size is crucial. longer. We also need to consider changing how bass are Following the advice of the expert bodies—goodness commercially pursued, which I hope the Minister will me, there are enough of them—is crucial. The Minister address by altering how and when they can be fished. also might take into account the thoughts of the chairman That is the only way to safeguard them and ensure that of the Blue Marine Foundation, who refers to the they remain part of angling culture for future generations. essential banning of netting, especially in nursery areas, I again congratulate the hon. Member for Meon and investing in the expansion of rod and line fishing Valley on securing the debate. I am grateful for the around the UK coast. opportunity to contribute. I ask the Minister in response This is not about stopping people from doing things; to consider not only what Northern Ireland—fishing is it is about investing in education and the huge benefits a devolved matter—is doing, but what the Republic of that would arise in our coastal regions—particularly in Ireland is doing with legislation that is already creating Wales—if we got the message across. It is about investment benefits. in something that will bring good fortune not only to the bass population around the UK shores, but to the residents of coastal areas whose livelihoods depend on 10.14 am the practice. It is also about the maximalisation of Simon Hart (Carmarthen West and South marketing, which has not been referred to in the debate Pembrokeshire) (Con): I start by referring to a letter but has been touched on once or twice in the media from my constituent, Matt Powell, which was written in commentary around it. July 2014. He said: The situation is pretty simple. Someone once said to “I run a small bass guiding business on the Pembrokeshire me that Governments can do pretty much whatever coast. This has given me the opportunity to observe the difficulties they want, so long as they really want to. I think this is facing the future stocks of the bass…our most iconic marine one of those occasions. Do the Government really sport fish. It is clear that the species is under the sort of pressure want to help bass? If they do, they can; if they do not, that is unsustainable in the medium to long term future. A combination of angling pressure…is taking its toll on our local bass stocks will collapse on our watch and take at least bass stocks. I am obviously concerned about the future of my 20 years to recover, while the livelihoods of people such own business if things continue as they are, but of far more as my constituent, Matt Powell, will probably never importance is the legacy we create for future generations.” recover at all. 129WH UK Sea Bass Stocks3 DECEMBER 2014 UK Sea Bass Stocks 130WH

10.19 am It is worth going back to some of the recent elements Jon Cruddas (Dagenham and Rainham) (Lab): This in the debate. As emphasised by my right hon. Friend topic is important. Only this past weekend experts the Member for Exeter, in 2002 the Prime Minister’s called for a ban on trawlermen catching sea bass, given strategy unit commissioned a report on the benefits of the evidence that angling offers three times the benefit recreational sea angling. “Net Benefits” was eventually to the economy. published in 2004 and it stated: “Fisheries management policy should recognise that sea angling I, too, congratulate the hon. Member for Meon Valley may, in some circumstances, provide a better return on the use of (George Hollingbery) on securing such an important some resources than commercial exploitation.” debate, and I want to repeat some facts that he pointed That is exactly the point made by the Blue Marine out in his opening address. DEFRA’s own “Sea Angling Foundation report that was in the papers this weekend, 2012” report shows that there are 884,000 sea anglers in as I mentioned at the beginning of my speech. England, who pump £1.23 billion per annum directly into the economy, with 10,400 full-time jobs dependent The 2002 report’s recommendations were: on the activity; and that the indirect spend is equivalent “Fisheries departments should review the evidence supporting to £2.1 billion, with 23,600 jobs at stake. Bass are the arguments for re-designating commercially caught species for most popular species for recreational angling and, according wholly recreational sea angling, beginning with bass by the end of to figures given at the recent Dublin bass work shop, 2004.” bass angling is worth more than £200 million in England The Environment, Food and Rural Affairs Committee alone. then looked at the issue when considering the “Net I admit that I am not a bass fisherman—indeed, Benefits” report. According to the Committee’s all-party many of my colleagues in the all-party group might review: suggest that I am not a fisherman of any shape or size at “We strongly support the Strategy Unit recommendations to all—but my youngest brother is a fanatical one, and develop the recreational sea angling sector. We believe that the many of my constituents are also bass fishermen. Indeed, sector, which has considerable economic value, has been overlooked angling is possibly the recreational sport with one of the and under-represented for too long.” highest participation rates in my east London constituency, It added: as in the country at large. This obviously important “We support the re-designation of certain species for recreational debate is also about the nature of politics—about keeping use and recognise the benefits that this can bring from both a our promises, which has been mentioned a number of conservation and economic point of view.” times this morning. The same points about the economic case for recreational For the past 13 years, recreational sea anglers have angling have been made consistently over the past 13 years. been led to believe that their most popular sporting fish I do not want to be party political in any way in this would be managed sustainably and primarily as a debate, but I want to emphasise the 2005 “Labour’s recreational species, because Governments, including Charter for Angling”, which contained the following the previous Labour Government, kept telling them words in a foreword by my right hon. Friend the Member that that was what we were going to do. I want to focus for Exeter: on some of the recent history behind today’s debate, “It was anglers concerns for the conservation status of sea bass which was emphasised by my right hon. Friend the that has persuaded me to agree to implement much of the Member for Exeter (Mr Bradshaw) in his comments. excellent bass management plan put forward by the Bass Anglers In 2007, we came close to a breakthrough based on a Sport Fishing Society”, cross-party consensus, but a Fisheries Minister capitulated including increases in the minimum landing size to to pressure from the commercial sector and overturned strengthen the brood stock. the decision of his predecessor, my right hon. Friend the My right hon. Friend was true to his word, and in Member for Exeter, who had already signed off the 2005 he launched the DEFRA consultation on increasing order to increase the bass minimum landing size. Since the minimum landing size for bass so as to produce a then, arguably, we have witnessed seven wasted years in sustainable fishery with more and bigger bass for the terms of sustainable management of the species, and commercial and recreational sectors. He took the long-term that has been picked up time and again in the contributions view in 2006 when he announced the conclusions of the this morning. Since 2007, as far as I can see, not a single consultation and his intention to increase the minimum measure introduced by Governments of either main landing size to 40 cm from 36 cm, and later to go on to party has halted the decline in bass stocks. We are still 45 cm, beyond the optimum spawning size. According waiting for the publication of the 2012 bass minimum to his DEFRA press release: landing size review, instigated by the hon. Member for Newbury (Richard Benyon). There is some doubt as to “I have listened very carefully to the representations made and have not taken this decision lightly. I have accepted the arguments whether any meaningful work has been done at all. for a bigger minimum landing size to help increase the quantity The core of the argument put by all our colleagues and size of bass. This will also give better protection for the this morning is that politicians have promised that stocks. There may be short term costs from this measure before Britain’s most popular fish in sporting and eating potential we see future gains but it is vital that fisheries management takes a should be managed sustainably. That has not happened long term view.” and bass stocks are in deep trouble. The latest scientific My right hon. Friend went on: advice issued by ICES in June 2014 recommended an “The recreational fishing sector makes a major contribution to 80% cut in catches of bass throughout the European our economy and it is important that their voice, as well as those Union by 2015—more than double the amount suggested of commercial fishermen, is taken into account in fisheries in 2013, which we had not acted on. The Solent bass management. surveys also make dismal reading, but that is not new—the In the future, I intend to increase the landing size further to news has not fallen from the sky. 45 cm, but subject to the results of a review, in 2010”. 131WH UK Sea Bass Stocks3 DECEMBER 2014 UK Sea Bass Stocks 132WH

To justify that decision, DEFRA claimed at the time my sons, I spent an enormous amount of time fishing that the increase to 40 cm would bring the minimum with my grandfather, so the activity bridges generations landing size closer to the average spawning size for bass. as well. One of the most exciting times that I have had As a result, more juvenile fish would be protected and in the past five or six years was when my middle son there would be increased recruitment to the spawning caught his first bass, on Islay. I was running up and stock. In turn, that would increase the number and size down the sea shore making a huge amount of noise, of bass available for capture to both the commercial getting in a panic, and dropping the net and picking it and recreational sectors. My right hon. Friend concluded: up again, while he calmly landed a wonderful fish. As a “I have taken on board the concerns expressed during the family, we all then celebrated his success. consultation by the commercial fishing sector about the impact of There has to be a fish species somewhere in the sea an immediate increase to 45 cm and the need for a reasonable that does not belong to commercial fishermen. They implementation period to minimise the cost of net replacement.” have it all their own way. As the right hon. Member for The next Fisheries Minister, however, made the decision Exeter (Mr Bradshaw) said, they are a powerful lobby. to go back on the commitment made by his predecessor Sea bass are a resource that needs to be shared, and to increase the minimum landing size in the interests of the balance in that sharing needs to be in favour of the conservation. On 25 October 2007 he made a statement recreational angler. As for commercial interests, the debate on retaining the minimum landing size at 36 cm, rather is not about the loss of jobs; it is about the creation of than increasing it to 40 cm and then 45 cm by 2010. The jobs—well-paid guiding jobs, and jobs in restaurants, decision was met with predictable anger and dismay by hotels, pubs, the tackle trade and angling shops. It is a hundreds of thousands of sea anglers and many positive thing that we are doing here today. conservationists in the country. The Minister admitted at the time that his decision was based on looking after The wonderful thing about sea angling is the way the short-term interests of the inshore fleet, rather than everyone gathers early in the morning, or when the tide on the long-term interests of the species and the is right, with great excitement. Tackle bags are thrown environment. We should obviously be concerned about on to the shore, and people rootle through for their any decision and its effect on jobs, but let us not forget favourite lure. A great celebration takes place, with the devastating impact that unsustainable fishing has people enjoying their natural heritage and the natural on all sectors, whether commercial or recreational. history of this country. Bass is a highly sought after and valuable resource. It It is all very well to come up with facts and figures, was recognised as worthy of protection by the Prime which are very important, but the most important fact Minister’s strategy unit, by the whole Government and is that we are currently taking fish that have not spawned. by cross-party Committees of the House. Unfortunately, They have not reproduced. Any idiot, from whatever the direction of travel was later unwound, and seven background, knows that that is unsustainable. One of years have followed with little having happened. I hope the most depressing interventions in this discussion was that today we will start a new phase of the discussion, by the European Union, which has drawn a moral and I praise the hon. Member for Meon Valley for equivalence between netting and pair trawlers, and putting the issue on the agenda today. I hope that we recreational anglers, saying that if we are to make new can begin to rebuild a cross-party consensus about rules and legislation about the taking of bass, recreational sustainable management of the bass stock. anglers should be limited to one fish. That is to confuse and conflate issues. Recreational anglers are not the Several hon. Members rose— problem—they are the solution to the problem.

Mr David Crausby (in the Chair): Order. I intend to call the Front Benchers from 10.40 am, which leaves 10.31 am 12 minutes to be shared between two Members. We will Mr Bernard Jenkin (Harwich and North Essex) (Con): then get everyone in. I call Charles Walker. I do not intend to detain Westminster Hall for more than a few minutes. 10.28 am Do we not all share a feeling of rising anger and Mr Charles Walker (Broxbourne) (Con): Thank you frustration, which almost brings tears to our eyes, as we for calling me, Mr Crausby, to speak in the debate. listen to the debate? We have heard about the manifesto I will not rehash the figures given over the past hour, commitment on which the Labour party was elected, but I must say to the hon. Member for Dagenham and and my hon. Friend the Member for Newbury (Richard Rainham (Jon Cruddas), to paraphrase Napoleon, “better Benyon), the former Fisheries Minister, has said he a lucky fisherman than a good fisherman”. I suspect wishes he had acted when he was in office—a candid that the hon. Gentleman is rather better than he gives response to my remark. himself credit for, although I know that he is a lucky Like many of those present for the debate I am a fisherman, as I have landed both his double-figure fisherman, and like thousands of others I have caught barbel for him—or at least netted them; I think he takes sea bass off the Essex coast. I treasure the species from responsibility for having landed them. an emotional point of view, but also from the point of I was going to give a great exposition on the need to view of the coastal communities. It brings life to seaside preserve bass stocks, but again that has been done towns such as Harwich and Brightlingsea that have eloquently by my colleagues. Instead, I want to say that become so dejected in some respects because they are I absolutely love fishing. Fishing bridges all walks of out on a limb and are no longer the economic centres life, from the richest and most powerful people to those that they became when they built ships, when there were who simply enjoy a day on the beach. I spend a huge big fishing fleets and when they were the links to the amount of time fishing with my sons and, before I had continent. 133WH UK Sea Bass Stocks3 DECEMBER 2014 UK Sea Bass Stocks 134WH

Richard Benyon: As Fisheries Minister, aside from my debates are important, but this one really is; and it is personal interest in fishing and angling and what my very timely, given the meeting of the Council of the fishing friends would have told me, I do not think I European Union in two week’s time. would have known about the problem until it reached The hon. Gentleman outlined perfectly the problems its present stage if it had not been for the Angling Trust with sea bass stock. My right hon. Friend the Member coming to see me with a group of people who really for Exeter (Mr Bradshaw), and the hon. Member for know what is going on. We could then put in train a Newbury (Richard Benyon)—both ex-Fisheries Ministers process—which I wish had happened earlier—involving —made the important point that if we do not take the Government working well with organisations that tough decisions now we will be back in two years facing are informed and rational in how they work with Ministers. an even worse crisis in stock levels. That is an important backdrop to today’s debate. Mr Jenkin: I am grateful to my hon. Friend for that, but as my hon. Friend the Member for Broxbourne I want to underline one of the debate’s key themes, (Mr Walker) said, the debate is not anti-commercial and in doing so I must declare not quite an interest, but interests, anti-jobs or anti-employment. It is pro-economic, where I come from—literally. I am the daughter of a social and environmental development. It is about what former commercial fisherman—a Grimsby fisherman. all the political parties in the House believe in, yet we Grimsby was the biggest fishing port in the world at one have had 10 years of debate and have achieved nothing. point. He fished in the Arctic, which was probably the As Chairman of the Select Committee on Public most difficult fishing ground to work in during the Administration, I have the word “accountability” in 1950s. I grew up in a village outside the town and fully mind: that is the crunch. All the democratic pressure on realise the pride and feeling that coastal people have in successive Ministers was to get something done; my their fishermen, which continues to this day. In my hon. Friend the Minister must ask himself why it has father’s youth it was common for the school day to start not been done. I invite him to consider what my hon. with the fisherman’s prayer because yet another tragedy Friend the Member for Newbury—and indeed the right had occurred at sea. It is important to remember that hon. Member for Exeter (Mr Bradshaw)—said about fishing was and still is the most dangerous occupation wishing they had been tougher with their officials. It is in the world. not right to blame officials, who give their best advice, Fishing is still an important source of economic but there is also the question of legal advice. activity, contributing many millions to the UK economy. Legal advice is not an instruction on how to behave; In 2013, the commercial industry directly employed it is something to be taken into account in making a about 12,000 people, with a fleet of around 6,400 vessels, decision. If the risk of being taken to court—to judicial landing around 600,000 tonnes of fish at a value of over review—is balanced against the risk of losing the fish £700 million. Let us not forget, however—and I do not stock, which is the bigger risk? The Minister must be think that we can, after today’s debate—how important accountable for the decision. He is not being accountable angling is, socially and economically. I am not going to to this House if he just submits to the legal advice. rehearse the figures again—they have been reiterated Legal advice is to be listened to, but in many cases it is more than once today—but to summarise, both directly to be overridden. It is to be disregarded—well, not and indirectly, angling contributes £1.2 billion and disregarded; it is to be taken into account. The judgment 23,600 jobs to the UK economy. that the Minister then makes is not about blindly accepting Fishing and angling matter, and sea bass is an important the legal advice. Otherwise we do not have accountability. and iconic fish for those engaged in both commercial We might as well be ruled by lawyers. and recreational fishing. The latest figures suggest that We have seen European law, human rights law and across Europe some 5,600 tonnes of sea bass are landed fear of judicial review take over the whole of government annually, with the commercial side accounting for just in some Departments—DEFRA may be one of the over 4,000 tonnes, around 75% of the total, and recreational worst instances—but we expect our Ministers to govern. fishing accounting for the rest—around 25%. A breakdown I ask my hon. Friend the Minister please to exercise his of landings by EU state shows that French vessels are best judgment. He will then be vindicated for what he by far the biggest exploiters of the stock, accounting for does. If he submits to the legal advice, he will be around 66%; by contrast, UK vessels land around 20% of condemned. the total, with the Dutch and the Belgians landing the When we think about why our system of government majority of the rest. feels so unaccountable with respect to so many Ministers, The fish itself—this next point is important when we the question we should ask is how they respond to the are discussing sustainability—is a slow growing one, advice that they are given and whether the House and does not mature until four to seven years of age. should empower them to act in the national interest Juveniles spend up to three years occupying nursery rather than submit to the rather blind legal advice they areas in estuaries and tend not to leave until they are are often given. That advice is given for the best of around 36 cm in length. reasons; that is the job of the lawyers. However, in my experience, lawyers always advise doing the more cautious The International Council for the Exploration of the thing from their point of view—not necessarily from Sea has advised that sea bass mortality is at a level well the point of view of the public interest. above that considered sustainable for the stock. As we all know, ICES has recommended that catches should be cut immediately by 80%, to restore stock levels. 10.36 am Furthermore, recruitment of young fish into the population Angela Smith (Penistone and Stocksbridge) (Lab): I has been in decline since the mid-2000s, and has been congratulate the hon. Member for Meon Valley (George very poor since 2008. The decline in recruitment coupled Hollingbery) on securing the debate. We always say that with the increase in mortality has caused a rapid 135WH UK Sea Bass Stocks3 DECEMBER 2014 UK Sea Bass Stocks 136WH deterioration in stock levels. Another important point the UK Government would have to do something in the to bear in mind is that the species is completely unprotected event of failure to find agreement at the EU Council. A by quotas. number of measures have been proposed both today It is against that backdrop that some EU countries and in the recent past, including an increased minimum have taken action to avoid a disastrous collapse of the landing size. On that issue, I return to the review promised stock in their waters. We have heard today what the by one of the Minister’s predecessors and reiterate that Irish have done, with a complete ban on commercial we would be glad to hear both its findings and his view. bass fishing by Irish-registered vessels within Ireland’s We all recognise that simply increasing the minimum 12-mile territorial limit. The Dutch Government are landing size is not a complete answer. The International considering the introduction of a series of national Council for the Exploration of the Sea has stated that it measures, including the banning of pair trawling in has serious concerns about the recruitment of fish into certain areas from September to December, capping the sea bass population, which has been in decline for a monthly landings, increasing the minimum landing size long time. The debate about whether to extend the from 36 cm to 42 cm, setting a bag limit for recreational protection of sea bass nursery areas goes on and on. anglers and putting a cap on the small-scale commercial Will the Minister explain his plans to tackle that problem? rod and line fleet. We need resolution on that issue sooner rather than The EU position is fluid, and is up for discussion and later—much sooner, in fact. decision in two weeks’ time. It proposes that anglers be Has the Minister considered incentives to encourage restricted to bagging one fish per person, per day, while commercial rod and line fishing, especially within the commercial vessels would face some restrictions on 6-mile limit, as an alternative to more damaging commercial catch—it is all very fluid—based on the assessment of fishing practices? Hon. Members have mentioned other the need for an immediate 80% reduction in catch and measures such as catch limits and spatial closures. We the reductions on stock exploitation required to keep need a response from him on those as well. the species sustainable. Finally, the Marine and Coastal Access Act 2009 set As has been mentioned frequently, in the UK we out the Government’s intention to create an ecologically recognised the need to protect sea bass stock—that coherent network of marine protected areas. One of the history and the need to learn lessons from it have been main aims of that network is conservation of the sea well rehearsed today—with the plan in 2007 to raise the environment. Will the Minister explain his view on how minimum landing size to 40 cm, and then again to that policy interacts with issues such as the one we are 45 cm. In 2012, the then Fisheries Ministers, the hon. discussing, especially when one considers that around a Member for Newbury, launched a review of the evidence third of commercial catches are based on demersal supporting those measures, but to this day we have not trawling, a type of fishing said to be extremely damaging seen its outcome. Will the Minister comment on where to the sea environment? it has got to? The 2009 Act gives the Marine Management In the past few years, the UK Government—both the Organisation the powers to introduce byelaws in our previous Government and the current one—have seemed protected areas in the 6-mile to 12-mile coastal limit. unwilling to take action in UK waters to restore stock Those byelaws apply to the vessels of all EU member levels, arguing that they do not want to exceed or fall states, not just to the home fleet. That could be a short of either the requirements set by the EU or, now, valuable way to extend some of the protections we want those of their own better regulation framework. However, to see. I am interested to hear what the Minister has to I note from a recent letter sent by the Minister to the say about the potential use of marine conservation right hon. Member for Mid Dorset and North Poole zones and the powers available to the MMO to deal (Annette Brooke) that although he believes that important with some of the problems we are facing. progress can be made at the EU Council in two weeks’ I look forward to the Minister’s response on this time, he is of a mind to press for a more radical set of critical issue. More than anything else, we want and proposals from the Commission negotiations, with a need a European deal. We also want to see positive and focus on a balanced package of measures to reduce constructive engagement with the EU, not just shouting catches in the commercial sector, coupled with sensible from the sidelines. We hope he will commit to that and measures for the recreational sector. to outlining, in addition, any measures that the UK can I wish to make it clear to the Minister that we support apply successfully and fairly in the event of a decision an approach that calls for stronger interim measures. failing to materialise at EU level. The UK position in those negotiations needs to be firm and resolute. We need a better set of proposals from the EU than the one currently on the table. Although it is 10.48 am possible for member states to develop measures unilaterally, the impact of such measures is weakened by the grandfather The Parliamentary Under-Secretary of State for rights on access to home waters that are enjoyed by Environment, Food and Rural Affairs (George Eustice): I some member states. That is why we need agreement at begin by congratulating my hon. Friend the Member EU level. The ideal outcome would be a set of measures for Meon Valley (George Hollingbery) on securing this that all member states have to abide by, including short-term timely and important debate. We have heard many good measures to halt the alarming decline in stocks while speeches and there is clearly a basis for quite a degree of further research is undertaken and a long-term management cross-party consensus. We have certainly had our quota plan is developed. of former Fisheries Ministers contributing to the debate. What do we do if we do not get agreement at the EU Sea bass is one of the most valuable species we have, Council in two weeks’ time? The Opposition acknowledge both to recreational sea anglers, as many hon. Members the potential anomaly if we take unilateral action, but have pointed out, and to some of our fleet of commercial 137WH UK Sea Bass Stocks3 DECEMBER 2014 UK Sea Bass Stocks 138WH

[George Eustice] further work on the identification and protection of bass nursery areas in all member states, which will build fishing boats under 10 metres. We are at a pivotal on the progress we have made in the UK. moment for bass management. It is clear from the latest As many hon. Members have pointed out, the current scientific advice from ICES that European bass stocks EU proposal is far from perfect, but I think we should are in a very vulnerable state. In June 2014, ICES welcome the fact that the European Commission has at advised that, for us to be at maximum sustainable yield least proposed interim measures for 2015 in advance of in 2015, total landings of bass in the Irish sea, Celtic sea, the development of a long-term management plan for English channel and southern North sea for commercial bass. However, let me be absolutely clear: I do not and recreational fisheries should be no more than believe that the current proposed measures are sufficiently 1,155 tonnes, but last year the EU fleet commercial ambitious, nor do they achieve the right balance between landings total was 4,132 tonnes, and estimated landings the measures required for the commercial and recreational from the recreational sector were a further 1,500 tonnes—a sectors, as my hon. Friend the Member for Broxbourne total of more than 5,600 tonnes. To get to the ICES (Mr Walker) pointed out. recommendation would require an 80% cut from 2013 landings. When the proposals are discussed in a couple of weeks’ time at the December Fisheries Council, I will Commercial bass fisheries in those areas include an seek to agree a more effective package of measures to offshore fishery on spawning fish in the channel and its finally start the recovery of the bass stock. That will be approaches from January to April. That is conducted challenging, as December Council negotiations always mainly by large mid-water pair trawlers, which take are, but it will be a UK priority for this Council to about a third of the total commercial landings. There is extend and strengthen the proposals to limit commercial also an inshore fishery, which operates mainly between fishing. We will also seek a two-fish bag limit for recreational spring and autumn, using trawls, fixed and drift nets, anglers, rather than the one-fish limit that has been and hooks and lines, and which involves a number of proposed. I have talked to anglers’ representatives, and under-10-metre vessels. they recognise they have a role to play. They completely Sadly, as many hon. Members have pointed out, the recognise that there should be a bag limit, but it would decline of bass is not new news, as ICES has made be wrong to have a harsh one-fish bag limit for anglers previous recommendations for reduction in mortality while having relaxed restrictions on the commercial from fishing exploitation. The UK has been challenging sector. the European Commission since 2012 to take urgent A number of hon. Members pointed out that there action to address that decline, and we have been at the are things we could do nationally, and I want to reflect forefront of promoting technical conservation measures on some of those points. On minimum landing size, for bass. It is worth reflecting on some of those proposals. once we have seen the shape of any deal that comes Initially, the European Commission suggested a total out of the December Council, I will consider what allowable catch for bass, but we firmly believe that that supplementary measures we could introduce nationally. is not appropriate because a new TAC is established on I understand the frustration of the right hon. Member track records of catches, so there is a real danger that for Exeter (Mr Bradshaw), whose successor not only that would simply lock in a continuation of the current did not bother seeing his proposal through, but actually exploitation pattern, which now needs to change radically. got the knife out and cut it. Revoking an order that has A further disadvantage of setting a TAC for bass is that already been signed is quite a big step. Listening to him it would take no account of the efforts a number of and others, I was reminded of the episode of “Yes member states have already unilaterally taken to limit Minister” in which Jim Hacker goes to talk to his commercial catches, which would be unfair to those previous opposite number to try to get the lowdown on countries. an issue. There could be a role for minimum landing size. In the first instance, I want the negotiating team to Bass is a migratory species. The ICES information focus on getting the deal right at European level. We clearly shows that a significant proportion—about 30%—of should also recognise that just increasing the minimum mortality occurs in spawning areas to which all member landing size without changing net gears, for instance, states have access. That is why, despite the frustrations might be counter-productive, and we could end up with of trying to get agreement at European level, the more discards, which is something we want to avoid. Government have consistently pressed, first and foremost, Finally, a minimum landing size does not deal with the for technical conservation measures at EU level as the problem of mortality caused by pair trawling taking most effective way of ensuring that the bass stock place in spawning areas. That typically affects larger recovers. Let me set out the position we have argued for fish, but it can be particularly damaging. in the last couple of years, because I think that will deal A number of hon. Members mentioned the report with many of the questions put by my hon. Friend the the Centre for Environment, Fisheries and Aquaculture Member for Meon Valley. Science carried out in 2012, which was commissioned We have consistently argued, for instance, that there by my predecessor, my hon. Friend the Member for should at the very least be restrictions on targeting bass Newbury (Richard Benyon). Internally, it was dubbed from January to April and that those should apply in the Benyon report. I can assure hon. Members that the key offshore spawning aggregation areas. We have there is no conspiracy—it is not being hidden, and it has also recommended the phasing out of pair trawling to already been shared with the Angling Trust and other target bass. In addition, we have argued for catch limits stakeholders. In the light of the comments made by a for all EU vessels fishing for bass, to cap total effort and number of hon. Members, I will make sure we lodge the to avoid displacement away from pair trawling to other report in the House of Commons Library after the types of commercial fishing. Finally, we have suggested debate so that all hon. Members can see it. 139WH UK Sea Bass Stocks 3 DECEMBER 2014 140WH

George Hollingbery: May I just confirm that the UK and Gibraltar Prosecuting Authorities Minister is talking not about the sea angling report, but about the report into the study of minimum landing size? 11 am Robert Neill (Bromley and Chislehurst) (Con): It is a George Eustice: It was the CEFAS report of 2012, pleasure to serve under your chairmanship today, which was commissioned by my hon. Friend the Member Mr Crausby, and to have this important and very topical for Newbury, which we will put in the Library. That debate on the relationship between the UK and the report concluded that a minimum landing size increase British overseas territory of Gibraltar on prosecution applied at European level could have quite a big impact, and law enforcement matters. I refer at the outset to my but pointed out that, because a lot of fishing mortality relevant interests in the Register of Members’ Financial is caused by foreign vessels in UK waters, a unilateral, Interests. UK-only minimum landing size would not necessarily have the desired effect. As many Members will know, Gibraltar is a fully self-governing and self-funding British overseas territory. It adheres entirely to the British system and rule of law, Mr Bradshaw: I urge the Minister, in the last couple and it is the contention of this debate and worth restating of minutes, to discuss the designation of bass as a that it meets the highest United Kingdom and international recreational species. standards in all respects. It is a small country, but it is proud to be British. Part of that British heritage is its George Eustice: I was going to try to cover some of strong legal system, entirely based upon our own common the other points. law. First, on the value of recreational angling, I should declare an interest, because my brother fishes bass in Bob Stewart (Beckenham) (Con): I thank my very Cornwall and regularly lobbies me on bass stocks. hon. Friend for giving way. I want to reinforce his point Recreational angling has a significant economic value. by saying that not only is the legal system very good At the end of last week, I met Charles Clover, the indeed, but the police and defence forces are outstanding. chairman of the Blue Marine Foundation, to discuss its I speak from personal experience, having worked with latest report, and we recognise the value of that. What I them. am sceptical of, though, is having an outright ban on commercial fishing sectors, as has been trialled in Ireland. Robert Neill: I am most grateful to my hon. Friend Anecdotally, there are quite a lot of reports of by-catch for making that point, particularly given his experience in Ireland and of bass having to be discarded because in that sphere. It certainly coincides entirely with my they are a by-catch of other fisheries. Ireland has found own. that, in the absence of a wider European agreement, just having a total ban on commercial fishing has not As well as having a strong economy with growth that been effective. most places would envy, Gibraltar has a robust and independent legal system, a thriving legal community, a My hon. Friend the Member for Harwich and North strong and independent judiciary, as well as an excellent Essex (Mr Jenkin) talked about me facing down legal police force, organised and trained to the highest British advice. I can say that, on this issue, unlike on many standards, and associated law enforcement agencies. It other issues in DEFRA, where there is frequently legal has, in particular, a robust prosecution service presided advice about European law, I have not come across any over by the highly experienced and very well regarded particular legal advice that is an obstacle. This issue is Attorney General, Ricky Rhoda, and supported by a much more about the best way to deliver the outcome team of Crown Counsel who meet the same high standards we want, and although there are difficulties and frustrations as would be found in any prosecution department in the in negotiating such outcomes at a European level, we United Kingdom. I have had the pleasure on more than can start by having effective measures at that level, one occasion of meeting the senior Crown Counsel, the which we can then supplement with our own national Attorney General and senior members of the judiciary. measures, and I intend to do both those things. It is against that background that on my last visit to In the 10 seconds I have left, let me say that we should Gibraltar, I was struck by the genuine sense of outrage recognise the role that IFCAs can play. Many already felt by Gibraltarian citizens at every level that I met, implement their own measures to protect bass. Finally, I from members of Government through to legal will be going to Europe and to the Fisheries Council to practitioners, down to shopkeepers and the taxi driver get the best deal we can. who took me up to the Rock hotel one evening—once he found out I was an MP—at comments made in this House, I regret to say, on 30 October by the right hon. Member for Leicester East (Keith Vaz). I am glad to see him in his place. I notified him of my intention to refer to his comments in this debate. They were ill-founded, they have done damage to Gibraltar wrongly and needlessly, and this is a chance to set the record straight.

Dame Angela Watkinson (Hornchurch and Upminster) (Con): I should mention that I am a member of the parliamentary group on Gibraltar. As my hon. Friend will know, Gibraltar is already suffering from gratuitous harassment by the Spanish Government at its border. 141WH UK and Gibraltar Prosecuting 3 DECEMBER 2014 UK and Gibraltar Prosecuting 142WH Authorities Authorities [Dame Angela Watkinson] I think the position is this: unfortunately, the comments that the right hon. Gentleman referred to were made on When this news became public, it gave the Spanish the Floor of the Chamber of this House. They were Government another excuse to attack Gibraltar, as it recorded in Hansard and I am grateful to him for has done in its media. That is having a very serious coming along today and withdrawing those comments, effect on Gibraltar’s reputation. It is entirely unfair and again, on the Floor of this House, sitting in Westminster as we all know, Gibraltar is fiercely loyal to the United Hall, and on the record in Hansard. That is hugely Kingdom. important to the people of Gibraltar and I am grateful to him for having done that. Robert Neill: Sadly, my hon. Friend is right. I have Let me set out why that retraction is so important. seen some of the coverage in the Spanish press. It is Gibraltar, throughout recent times, has been fully compliant gratuitous. Unfortunately, the comments, whatever the with all its international obligations. All relevant EU intention in making them, have been used to fuel the regulations that apply to Gibraltar and all EU directives antagonism that some in the Spanish governing party are transposed into law by Gibraltar’s Parliament. That and other parts of the media feel towards Gibraltar. It includes all EU measures on financial supervision and is worth saying that, precisely because Gibraltar is a regulation, direct taxation and the fight against money small country with a difficult neighbour, an insult to laundering. Gibraltar is felt very personally, even by everyday Gibraltar has been actively engaged with the Gibraltarians. It is not just a matter of Government OECD on exchange of information arrangements. circles; Gibraltarians feel this individually because every The OECD and Council of Europe convention on one of them sees the consequence of what happens mutual administrative assistance in tax matters has when misleading information is used against them by been extended to Gibraltar, and in consequence of a their neighbours. For that reason, this debate is important, raft of measures, Gibraltar has now, pursuant to various and it is worth setting out why. agreements and the convention, exchange of information The remarks made by the right hon. Member for agreements to the OECD standard with some 77 countries Leicester East were in the context of a comment about and territories around the world. It has received a drugs policy and money laundering. I am grateful to the glowing review from the OECD on its record of exchange right hon. Gentleman for having shown me a letter that of information. Its overall compliance ratings are in he subsequently sent to the Chief Minister, who raised exactly the same league as this country’s and Germany’s. his concerns with the right hon. Gentleman, and I place I hope that gives a proper sense of perspective as to the that on the record. However, the reality is this: the seriousness with which Gibraltar takes these issues. inevitable innuendo in the comments made was that there was a particular issue with Gibraltar and drugs money and money laundering. That is wholly unjustified Mr Nigel Dodds (Belfast North) (DUP): I congratulate and untrue, and it is unsupported by any evidence of the hon. Gentleman on securing this debate. With the any kind. In every jurisdiction, we all have to be alert to comments of the right hon. Member for Leicester East the issues arising from organised crime, drugs and money (Keith Vaz), it will put on the record the truth of the laundering. The UK is, and so is Gibraltar, to exactly situation concerning Gibraltar. Does my hon. Friend the same standards as the United Kingdom. accept that there is no real evidence from the UK or other EU member states, apart from Spain, which raises It is worth setting out in some detail, as briefly as I its voice from time to time on various issues, of complaints may, the work that Gibraltar has done in this field. about the way in which the regulatory regime operates in Gibraltar on money laundering or otherwise? Keith Vaz (Leicester East) (Lab): I am grateful to the hon. Gentleman for giving way and for informing me Robert Neill: The right hon. Gentleman is absolutely that he was going to raise these comments. This debate right. Independent monitoring reports state specifically seems to be all about the five words that I spoke in the that there have been no instances of failure by Gibraltar Chamber. As he knows, I wrote to the Chief Minister to co-operate with any requests by any member and I accepted his assurances that Gibraltar’s financial organisation. He is totally on the money as far as that is services were absolutely robust. I pointed out that in my concerned. Gibraltar behaves to exactly the same standards speech I made it very clear that there was no criticism of as the United Kingdom. We should be proud of it and the people or Government of Gibraltar. If he is now congratulate it on that. reassuring me again in the House that there is no question of any impropriety of any kind, of course we It is worth pointing out that Gibraltar has signed the accept that assurance. Foreign Account Tax Compliance Act intergovernmental agreement with the UK and the United States on a commitment to common reporting standards and automatic Robert Neill: I am very grateful to the right hon. exchange of information. That now extends to 50 countries, Gentleman for making those comments. More important, with a further 30 in the process of joining it. Gibraltar I hope the people of Gibraltar will be grateful, because has applied the EU savings directive since 2005. Its unfortunately, once words are said, even perhaps in an regulatory law enforcement and intelligence authorities, uncharacteristically loose manner, much harm is done as my hon. Friend the hon. Member for Beckenham in this particular context. I not only want to put that on (Bob Stewart) pointed out, work hand in glove with the record in the House, but I know that my hon. and United Kingdom and other international counterparts learned Friend the Solicitor-General will be able to state in the detection and prevention of crime. Despite the the position of the British Government in relation to tensions across the border, the Royal Gibraltar police those matters. work effectively and well with their counterparts in the 143WH UK and Gibraltar Prosecuting 3 DECEMBER 2014 UK and Gibraltar Prosecuting 144WH Authorities Authorities Guardia Civil, notwithstanding political interference Ministerial Council of Overseas Territories. Gibraltar from time to time from Madrid, and they should be works closely with the UK at every level and to the commended for that. highest standards, and it moves swiftly. Gibraltar has draconian all-crimes anti-money laundering To allow my hon. and learned Friend the Solicitor- legislation, systems and administrative practices in place, General to respond, I will make my final point. No all of which comply with EU legislation and operate in sooner had this House opted back into some European exactly the same way as in the UK. Its systems have justice issues, from which we had had an opt-out—the been tested with independent reviews by the Financial justice and home affairs area—on 1 December, the Action Task Force, the International Monetary Fund Government of Gibraltar published a series of regulations and others, and have been found to comply, not just in to give effect to the same principles and arrangements theory, but in practice. The Financial Action Task as those that the UK has now opted into. It could not Force recently revised its 40 anti-money laundering have moved more swiftly to ensure that it met exactly principles and Gibraltar is taking those on board and the same standards as the UK on police, criminal and updating its arrangements in the fight against crime in judicial co-operation, including important matters such the same way as the United Kingdom. In other words, it as exchange of intelligence and information, mutual meets exactly the same standards in every regard. recognition of criminal freezing orders, asset recovery confiscation orders and financial penalties. I hope that Keith Vaz: The hon. Gentleman is giving the Chamber my hon. and learned Friend the Solicitor-General, who a robust account of the prosecution system. Can he I am delighted to see here today and who is highly confirm that there have been no prosecutions for money experienced in such matters, will be able to confirm laundering in Gibraltar? that. I am grateful to the right hon. Member for Leicester Robert Neill: That is my understanding, but my hon. East for accepting on the record in this House that any and learned Friend the Solicitor-General will be able to allegations and slurs against Gibraltar were utterly baseless. deal specifically with that. The fact that we have been The people of Gibraltar are entitled to an apology and successful in such matters is precisely because of the a correction, and I hope that we have been able to very good arrangements and regulatory systems in place achieve that in this debate and that the Solicitor-General in Gibraltar. It is totally right that we should be alert to will be able to set out the Government’s position on the the risk of crime, but when good preventative mechanisms excellent co-operation between our two jurisdictions. are in place and prevent crimes from coming to fruition that is a plus point and we should congratulate Gibraltar 11.16 am on that. The Solicitor-General (Mr Robert Buckland): It is a pleasure, Mr Crausby, to serve under your chairmanship. Dame Angela Watkinson: Was it not the late right I thank my hon. Friend the Member for Bromley and hon. Robin Cook, when Foreign Secretary, who was Chislehurst (Robert Neill) for securing this debate at a quoted as saying that Gibraltar was timely moment, when the Joint Ministerial Council is “the benchmark jurisdiction in terms of legislative and regulatory meeting here in London and the Chief Minister of standards in the fight against money-laundering”? Gibraltar and those of other British overseas territories are with us. It is timely indeed, because it gives all Robert Neill: That is exactly what the then Foreign Members of this House and all parties in this House Secretary said, and I believe the right hon. Member for an opportunity to reaffirm our strong support and Leicester East may have been a member of the same commitment to Gibraltar and its work, not just in Government. Robin Cook was right, and his comment co-operation with the United Kingdom but with other summarises the matter. territories and countries, in helping to fight international crime. Thomas Docherty (Dunfermline and West Fife) (Lab): I regularly meet Gibraltar Ministers through the Ian Paisley (North Antrim) (DUP): Will the Solicitor- Commonwealth Parliamentary Association and other General take it upon himself at the end of the debate to bodies, and they are always telling me about the robust let the Chief Minister know of the unwavering support steps that they have taken in partnership with the UK throughout this House and that it stands should to and Spain to ensure that Gibraltar has the highest shoulder with the people of Gibraltar? standards. Is that his experience in his conversations with Ministers from Gibraltar? The Solicitor-General: I am happy to accept the hon. Gentleman’s exhortation. I hope to see the Chief Minister Robert Neill: That is my experience of conversations at the Foreign Office later today and I will convey the with Ministers in Gibraltar. It is my experience of message of this House loud and clear that we support conversations with our embassy in Madrid. It is also my the work of our friends in Gibraltar and the prosecutorial experience of conversations with police officers and the authorities and indeed the Attorney General, Ricky senior judiciary in Gibraltar and the senior Crown Rhoda. Counsel and his Department in Gibraltar. It is certainly I can contribute to this debate by outlining the work my experience of conversations with the excellent Attorney of the Crown Prosecution Service and Serious Fraud General, Ricky Rhoda. All the evidence is clear in such Office, both of which the Attorney-General and I matters. That is a further indication of the permanent superintend in our role as Law Officers. Indeed, I am and long-running co-operation with the Chief Minister pleased to be able to tell my hon. Friend that the of Gibraltar, the hon. Fabian Picardo QC, who in is in working relationship between the UK and Gibraltarian London at the moment for a meeting of the Joint prosecuting authorities is strong and constructive. 145WH UK and Gibraltar Prosecuting 3 DECEMBER 2014 UK and Gibraltar Prosecuting 146WH Authorities Authorities [The Solicitor-General] has taken swift action to do likewise—to follow in lock step with the UK. Those extra safeguards and means of As my hon. Friend recognises, the Government have mutual co-operation strengthen the ties that bind us. set out to reinvigorate our relationship with the overseas I am sure that my hon. Friend will understand that it territories, to increase the UK’s engagement with their would not be appropriate for me to give specific examples Governments at all levels and to support them when because of the international expectation that MLA required. I have just returned from a conference of requests remain confidential. However, I can talk about Attorneys General of 10 of the UK’s overseas territories, some notable recent successes of the CPS, such as the including Gibraltar, with representatives from the United securing of two convictions against individuals for States and Canadian Departments of Justice. We met in fraudulently obtaining moneys from a vulnerable elderly Miami and discussed a range of topics relating to the relative. Assistance from Gibraltar helped to secure that rule of law and administration of justice in the overseas conviction, and there was lawyer-to-lawyer contact to territories and sought to enhance our mutual co-operation progress the case. I would like to mention some other on a range of matters. After three and a half days of examples of ongoing casework, ranging from organised discussion, my firm view is that the Attorneys General crime—specifically drug trafficking—to fraud and identity of each of our territories play a key role in helping to theft. CPS lawyers have reported receiving exceptional drive forward legal reform and to meet our wider ambitions. assistance from Gibraltar, including a response to a Ensuring good governance and respect for the rule of request that was issued at very short notice following law is a fundamental and vital platform for delivering a change in position from the defence. In another case, a security and prosperity for all our citizens. During the letter of request was sent to obtain banking evidence, conference we discussed important topics including mutual and there were no problems with obtaining the material legal assistance, extradition procedures, tackling bribery, from Gibraltar. fraud and corruption, improving legislative drafting processes, child safeguarding—a growing and important Keith Vaz: That is very useful information, particularly issue in many territories—and constitutional matters. A in respect of the inquiries being undertaken by the series of actions on those subjects was agreed, and I Home Affairs Committee. Is the Solicitor-General telling look forward to continuing our close liaison with the the Chamber that there are no examples of people Attorney General of Gibraltar and the other overseas being prosecuted for money laundering in Gibraltar, territories as we work to deliver them. either relating to drugs money—that is the main interest I turn to the work of the prosecuting authorities, of the Select Committee—or otherwise? starting with the Crown Prosecution Service. It is important to note that co-operation between the UK and Gibraltar The Solicitor-General: We are not aware of any is not confined to mutual legal assistance through the prosecutions, but I will look into the matter further to formal letter of request process. It also takes place, as give the right hon. Gentleman cast-iron information. I my hon. Friend suggested, on a police-to-police basis. will write to him, if I may, on that point. I am grateful The appropriate avenue will depend on the nature of to him for helping to reinforce the consensus that exists the request and the purpose for which the information in the House about the good criminal prosecution and or evidence is sought. Both the Crown Prosecution investigation work that goes on in Gibraltar. Service and the Serious Fraud Office work regularly with other judicial authorities using the established MLA channels. That is how countries request and Robert Neill: Following on from that point, perhaps provide assistance in obtaining evidence that is located my hon. and learned Friend will confirm my own in one country for use in criminal investigations and experience at the Bar, that very often jurisdiction as to prosecutions in another. It is also used to obtain assistance where a prosecution takes place is but a small part of in the tracing, restraint and confiscation of the proceeds the bigger picture. Frequently, assistance given by authorities of crime, which is particularly germane to the issues in one jurisdiction may lead to prosecutions elsewhere. that have been raised today. The important test, with which Gibraltar completely complies, is the prevention of crime and the capture of Letters of request from Gibraltar to the UK typically criminals. come via the United Kingdom central authority, which is based in the Home Office. The CPS will be involved in requests to restrain or confiscate assets here in the UK. The Solicitor-General: My hon. Friend is absolutely The CPS and the SFO have worked with the Gibraltarian right. The delicate network of interlocking mutual legal authorities in the past few years, and that has been of assistance is vital if we are to have a truly international real benefit to both jurisdictions. approach to the fight against crime, which nowadays often exists in many jurisdictions and crosses many boundaries. Bob Stewart: Is my hon. and learned Friend saying that to all intents and purposes, that which is legal in this country is legal in this country is legal in Gibraltar, Thomas Docherty: Two specific allegations could be and that which is illegal in Gibraltar is illegal in this levelled against Gibraltar. The first is that it is a soft country, too? touch on the physical bringing of drugs into its ports; and the second is that it is a soft touch on the financial services-based introduction of laundered money. Will The Solicitor-General: That is a fair way of putting it. the Solicitor-General confirm, for the record, that As my hon. Friend the Member for Bromley and Gibraltar’s ports are as safe as, if not safer than, UK Chislehurst has said, we will be entering into the justice ports and that its financial arrangements are as robust and home affairs measures on 1 December, and Gibraltar as those of the United Kingdom? 147WH UK and Gibraltar Prosecuting 3 DECEMBER 2014 UK and Gibraltar Prosecuting 148WH Authorities Authorities The Solicitor-General: I am grateful to the hon. well advanced on meeting its Financial Action Task Gentleman for giving me the opportunity, on behalf of Force recommendations and preparing for the fourth Her Majesty’s Government, to provide those assurances money laundering directive. Notably, Gibraltar has entered and to send the message clearly to Madrid that it is into the equivalent of 125 tax information exchange wrong to seek opportunities to tarnish Gibraltar’s agreements, and it is committed to automatic tax exchange reputation, particularly in relation to money laundering with the UK, the USA and some 90 other countries via and drug smuggling. Gibraltar works unceasingly and the common reporting standard, which my hon. Friend tirelessly to address those allegations. This debate is a referred to. In addition, the Gibraltar Financial Intelligence great opportunity for us to set the record straight. Unit, which is responsible for, among other things, the In the time that I have remaining, I would like to talk receiving and actioning of suspicious transaction reports, briefly about the SFO. Like the CPS, the SFO normally is a member of the international Egmont group and works through MLA channels, but it also uses informal shares information systematically with members of the liaison. The international assistance team in the SFO group around the world. Those examples further considers the execution of matters that have arisen from demonstrate how Gibraltar’s regulatory, law enforcement Gibraltar, and the SFO also regularly makes MLA and intelligence authorities work hand in glove with requests. I am pleased to report that liaison between the their UK and international counterparts in the detection SFO the Gibraltarian authorities is very good. The and prevention of crime. SFO has worked with the Gibraltarian authorities on I hope that the debate has made it crystal clear, both several occasions in the last few years. It is a matter of to my hon. Friend and other hon. Members, and to the record that the First Minister of Gibraltar gave evidence wider world, that there is a strong, constructive and for the prosecution in an SFO case relating to GP Noble ongoing working relationship between the prosecution in 2011 and 2012. The SFO has also provided expert authorities in this country and in Gibraltar. It should be assistance and support to the Gibraltarian authorities obvious from the summary I have provided that that in respect of operational procedure and best practice. co-operation spans both formal and informal channels, For example, the SFO graphics team met the Royal and that it includes joint working on casework and Gibraltar police to discuss a number of issues, including promoting best practice. As I mentioned at the outset, the presentation of evidence at court. the Attorney-General and I are clear in our support for As my hon. Friend the Member for Bromley and our counterparts and their teams in all the overseas Chislehurst set out, Gibraltar has signed up to several territories, which very much includes Gibraltar. They international obligations, which put it high in international play a central role in driving legal reform and upholding standings. We are assured that the anti-money laundering the rule of law, and we are pleased to be able to offer legislation in Gibraltar is in full compliance with its them our full support in that regard. EU obligations and that it has been independently reviewed by the Financial Action Task Force, the 11.29 am International Monetary Fund and others. Gibraltar is Sitting suspended. 149WH 3 DECEMBER 2014 Youth Service Provision 150WH

Youth Service Provision Over that longer term, 93% of respondents to a Unison survey said that their local authority had cut youth service spending since 2010, with youth service spending [MR PHILIP DAVIES in the Chair] down by £62 million in 2010-11 and £137 million in 2011-12. Overall, that adds up to cuts of £259 million 2.30 pm since 2010, with some local authorities having to slash Alex Cunningham (Stockton North) (Lab): It is a spending by over half to meet their costs. pleasure to serve under your chairmanship yet again, Mr Davies. I say in opening that I am rather disappointed; Kate Green (Stretford and Urmston) (Lab): I congratulate when I look round the Chamber, I see that we have my hon. Friend on securing this afternoon’s debate, and Opposition Members who are interested in youth services, I apologise for the fact that I will not be able to stay for but we have only the Minister to reply on behalf of the the entire debate. He paints a rather rosier picture, Government. It is very disappointing, but even so, I am perhaps because he is talking about two or three years grateful to be granted the opportunity to raise some of ago, than is the case today. My local authority of these issues today. Trafford is now proposing that we would have no spending As hon. Members know, there is a crisis in youth on the youth service at all from next year. services, which have suffered cuts of around £260 million since 2010. There was nothing today in the Chancellor’s Alex Cunningham: I am grateful to my hon. Friend autumn statement to cheer up our young people at all. for that intervention. That is frightful, and as I develop Link that to the ditching of the education maintenance my speech this afternoon, I will refer to some of the allowance and the access to learning fund, the virtual consequences of losing youth services altogether. collapse of careers advice delegated to schools without The Government have established a maze of inefficient the necessary resources, and the pittance that local and underperforming nationally controlled programmes authorities have to pay out from the student opportunity that duplicate services locally.There are around 40 national fund, and we can see that young people are getting a schemes and services delivered by 10 different Departments very poor deal from this Government. and agencies, leaving councils little, if any, influence to We are all aware of the spending cuts that local co-ordinate, target and scrutinise the shifting market of authorities are being forced to make as a result of publicly funded provision and hindering their ability to reduced funding from central Government. That is plan where best to invest their own support. being felt acutely in areas such as the north-east of Over the summer, I visited one of the schemes, the England, where 11 out of 12 councils will experience National Citizen Service, and met some lovely young higher than average reductions in spending power for people. I was impressed by the efforts and intentions, 2014-15, along with a 5% funding reduction compared but the fact remains that these schemes have failed to fill with 2013-14. To be clear, in pounds per dwelling, that is the gap that cuts to youth services have created. To 10 times higher than cuts in the south-east, and almost make matters worse, the NCS costs £1,200 per head for four times higher in percentage terms. Across the country, a six-week volunteering programme, whereas a similar this is devastating service provision and the ability of scheme in Germany is able to fund a whole year’s councils to meet the needs of residents, whether in the work-based volunteering for the same cost. form of road maintenance, care and support services for the elderly or the provision of sporting and recreational Bill Esterson (Sefton Central) (Lab): Like my hon. facilities for the young. Nowhere has been left untouched. Friend, I have met the people running the NCS, and I One area particularly hard hit by the attacks on think the work that they do is very good. However, spending is youth services. Despite those services being would he agree that one of the big problems with the among the most important that local authorities provide, NCS is that it does not happen week in, week out, all and ignoring the long-term nature of the impact, levels year round? What we really need are youth service of provision for young people across the UK have workers working with young people every day of the suffered horrendously under the coalition. To be clear year, because that is where the real difference is and from the outset, the Government’s policies have seen where the real impact is made. young people, just like women, shoulder a disproportionate share of austerity and its worst effects. Alex Cunningham: My hon. Friend is correct. I will Youth services have been hit by funding cuts of not take anything away from the NCS; I think it is a £60 million since 2012. Some 73% of local authorities tremendous and very effective programme. The young have reported being forced to reduce youth service people whom I spoke to were really enjoying it and they spending during that time because of central Government told me that they were learning tremendous things, but cuts, resulting in the loss of hundreds of youth centres as my hon. Friend said, it does not address year-round and thousands of youth workers across the country. I provision. It is six weeks, then there is a cliff edge and know that view is recognised by the former children’s the provision ends. Minister, the hon. Member for East Worthing and The loss of specialist staff and locally tailored services Shoreham (Tim Loughton), who said: should worry us all in that context. Young people want “Because they don’t have to statutorily provide youth services and need to be able to socialise in a safe and secure they”— environment, but they also need specific professional the councils— support in many areas of their life, yet the Government “have too often been at the top of the queue when cuts come measures forced on local authorities will leave many along”. young people with nowhere to go but street corners. However, that is just part of a trend that started when What my hon. Friend the Member for Stretford and the coalition came to power. Urmston (Kate Green) mentioned is probably an example 151WH Youth Service Provision3 DECEMBER 2014 Youth Service Provision 152WH of that. It does not just risk encouraging anti-social can, that has largely been achieved by reducing the behaviour; more importantly, it will leave young people numbers of professional youth workers with the important in very vulnerable situations and potentially victims of JNC—Joint Negotiating Committee for Youth and who knows what as they spend their time on the streets. Community Workers—qualification and the skills that come with that. Paul Blomfield (Sheffield Central) (Lab): My hon. Again, the context is crucial. In the same two-year Friend is outlining some consequences for socialisation period that has seen the number of youth centres dwindle, and for the benefits of engaging young people in 2,000 valuable skilled youth workers have been lost constructive behaviour. Does he agree—this is on the from the system. The Unison report highlighted the fact basis of my discussion with youth workers in Sheffield—that that, as a result, 41,000 youth service places for young there is an even more significant loss related to youth people have disappeared, meaning that 35,000 hours of provision during school holidays, because youth workers outreach have vanished from youth service provision. have said to me, “Frankly, if people do not engage in That loss is particularly concerning because by building these schemes and these schemes are threatened, they relationships of trust and support with young people, will not eat that day.”? Is the provision of food within specialist youth workers can actively engage with their these activities not a serious dimension of this problem communities and help young people to make their own that we ought to consider? informed decisions about their lives and develop confidence and resilience. In short, youth workers play a central Alex Cunningham: Most certainly, because a lot of role in supporting young people, yet their years of hard these programmes are aimed specifically at young people work are being dispensed with and the successes that from deprived backgrounds who may not have access to they have worked hard to achieve are being jeopardised the theme parks and holiday experiences that are enjoyed by scything Government cutbacks. by other young people. It is all the more important that As if that was not bad enough, it has emerged that, as the service provision is there—and that they can eat has often been the case under this Government, the there. When I went to the NCS in Stockton, they were impact of the cuts has been felt particularly hard in doing some cooking. I did not care for the famous some of our most deprived communities. In such areas, Parmo pork, with cheese spread over the top, and the youth services play an even more significant role: helping pizzas that they made, but they were actually doing young people into work, avoiding and preventing substance something. People said, “It is not very healthy food,” abuse and tackling problems of antisocial behaviour but at least they were eating, and we need to make sure and gang violence, as well as boosting community cohesion. that young people can eat along the way as well. However, the effects of austerity have been concentrated In many poorer communities, youth clubs and similar in those very communities. The education maintenance facilities are the only service available to young people allowance has been removed, while support from the access and provide opportunities to learn new skills and channel to learning fund and the student opportunity fund has their energies productively, but youth centres are so been cut. Housing benefit for the under-25s has been much more than simply a hangout place for young cut, tuition fees have trebled, making higher education people. Yes, that is one element of the function they more expensive than ever before, and careers services serve, and a very welcome one, but well-managed youth have been slashed. Those cuts are severely short-sighted centres serve a dual purpose that will now be missed. and will add up to even greater problems as we move That open-access provision is a gateway to early forward. intervention, reaching out to vulnerable youngsters who Let us take, for example, the careers service. At a might otherwise be missed by other services or whose needs sitting of the Select Committee on Education last week, might escalate before they are picked up by targeted services. Lorna Fitzjohn, Ofsted’s national director for further These open-access services are often more appropriate education and skills, reminded MPs that their assessment than targeted interventions when it comes to improving of the quality of careers advice in schools was that it outcomes for young people. However, the large numbers was less than good in four out of five. It is no wonder: of young people at risk of falling through the cracks in the Government dumped the careers service on schools—I provision will not become evident for perhaps five or acknowledge that they have the National Careers Service— 10 years, by which time it will be too late. but did not provide them with the funding that went Stockton-on-Tees borough council, which is responsible with the responsibility. They were relying on the national for youth services within my constituency, has seen the service to offer additional guidance, but few young number of youth centres halved to just 12. That said, people have even heard of it. through much hard work, I understand that they have There are some examples of very good practice, but succeeded in attracting greater numbers of young people in most cases, it is left to ill-equipped teachers to cobble and on a more frequent basis. I take my hat off to them; something together and, if they have the right contacts, that is very positive. However, in outlying areas, where encourage a few employers to come in and chat to the provision for young people is generally poorest, the loss young people. Association of Colleges research indicates of somewhere to go that is close to home is a real that less than half of all colleges have reported that problem for communities. schools in their area are delivering the requirement to Across the country, the remaining youth provision is provide independent careers advice and guidance. Largely provided by youth workers who are thinly spread, gone are the professional people who had the breadth overworked and, consequently, less able to fulfil their of knowledge of different opportunities that provided roles effectively. There is an obvious detriment to the the young with options best suited to their needs. services that they provide and to the young people with The Unison survey found that the majority of schools whom they work. Although local authorities are limiting had reduced their careers advice and had no place for the extent of cuts in youth service spending as best they careers experts. Research by the university of Derby 153WH Youth Service Provision3 DECEMBER 2014 Youth Service Provision 154WH

[Alex Cunningham] jeopardising the Government’s professed ambitions for young people. Such an outcome not only is objectionable, found that out of 144 local authorities, only 15 would but threatens to run counter to the duty on local authorities maintain a substantial careers service. Ofsted’s promised to secure access to a local offer. Introduced by the last review of careers guidance—that particular area of Labour Government, that duty required all local authorities youth services—in 2015-16 cannot come soon enough. “so far as reasonably practicable” In the current economic climate, which has seen provide all qualifying young people with access to unprecedented levels of youth unemployment and witnessed “sufficient educational leisure-time activities which are for the 1 million young people being out of work, education or improvement of their well-being”. training, there can be no doubt about the need for qualified youth workers, who are able to guide our In March 2012, the coalition confirmed that it would young people into making the right choices for their retain the duty and published streamlined guidance to lives and provide the support necessary for them to accompany it, but that new guidance does not make enter the work force. We cannot ignore the fact that clear the Government’s expectations for what a “good” young people are far more likely to be unemployed than or “sufficient”offer should look like. Instead, the guidance those in older age groups, who are more likely to have notes that local authorities are responsible for securing, experience on their side. so far as reasonably practicable, I am fortunate that Stockton borough council is very “equality of access for all young people to the positive, preventative much a forward-thinking local authority. Its Youth and early help they need to improve their well-being.” Direction service is therefore geared to provide to young Local authorities, however, face an enormous challenge people across the borough a range of resources, including in providing youth services while adapting to the sizeable careers advice, business support and an array of targeted budget constraints applied from Westminster. The large youth support projects, but it is the innovation that reduction in overall grant from central Government to comes with that proactive provision that is particularly local authorities and the cuts to early intervention impressive. Working alongside the council’s antisocial grants mean that the sector faces a number of challenges. behaviour team to carry out joint patrols in Billingham, Despite research prepared for the Cabinet Office indicating the YouthDirection service is assisting with the targeting that cuts to youth services in London were a factor in of identified hot spot areas and is actively contributing the riots experienced in the capital and other large cities to reduced instances of antisocial behaviour according in August 2011, the Government have refused to protect to police statistics. youth service budgets. Indeed, that report clearly states: “Where young people described their normal lives as boring Bill Esterson: My hon. Friend uses reducing antisocial and talked about ‘nothing happening around here’, the riots were behaviour as one of the very good examples of how seen as an exciting event, a day like no other.” youth work really does help as an intervention. Youth On top of that, numerous young people are quoted as workers in my area—or former youth workers, to be identifying boredom as a key driver of their involvement. more accurate, given that they are not employed any With the riots taking place during the school holidays more—make the point to me that they are very often and with many youngsters having literally nothing better the one person in a young person’s life who is trusted to do by way of structured activities, many resorted to and who gives them some kind of contact with authorities joining in. If that point needed driving home, the report through which to address issues, whether it is antisocial also notes that being otherwise occupied, whether through behaviour, routes into employment or dealing with life education, work, an apprenticeship or some other activity, in general. That one person makes all the difference to a was identified as a significant “tug”factor against “nudges” young person’s life. They make a fantastic difference such as boredom. between success and failure later on as well. Despite that alarming connection, statistics from the Local Government Association show that at least eight Alex Cunningham: I am sure that that is very much out of 10 heads of young people’s services said that had the case, but it is not just about being the one person they faced more budget cuts since 2012. At the same who may be trusted. I understand that youth workers time, two thirds of voluntary and community organisations are trusted more than teachers. Many young people providing youth services reported that they, too, had look to a teacher for that sort of daily support and that seen their income reduced in the previous 12 months. level of guidance. I also see youth workers as almost Although Churches and other voluntary groups have being between the young person and the establishment, attempted to step into the breach that has been left by because they can be a champion for the young person in Government cuts, many simply do not have the resources their community and with the other agencies. The point to do so sustainably. Perhaps we need to go back to the my hon. Friend raises is very important. expression “so far as reasonably practicable”. At least In Stockton, we are also going to have a patrol local authorities would be able to say that it is not co-ordinator. The post, which will be advertised on reasonably practicable to deliver those services because Friday, will build on the work already being undertaken the resources to enable them to do so no longer exist. in Stockton and Billingham and will be the first ever Before I ask the Minister some questions, I want to joint antisocial behaviour and youth worker post in the return to my home area. The Stockton youth assembly, country, so at least we are recruiting some youth workers, known locally as the SYA, has been established to albeit only the odd one here and there. ensure that young people are consulted and their voices Although a report from the National Audit Office are heard, and to help the council to work directly with concluded that, overall, councils have managed reductions young people to shape local services. The assembly well, 50% are none the less now at financial risk, while provides a voice for young people aged 11 to 19, or up cuts to local government funding and services are to 25 if they have a learning difficulty or a disability, 155WH Youth Service Provision3 DECEMBER 2014 Youth Service Provision 156WH and is made up of representatives from a wide range of from all political parties about how we value the youth existing youth voice forums. It holds a formal meeting service, and they told us that, frankly, we do not put our every other month with an action-packed agenda. In money where our mouth is. It deeply discredits us as between the formal meetings, the group have opportunities politicians when we proclaim our belief in a service but to engage in team building, positive activities and we are unwilling to ensure that it is sustainably maintained development sessions, which are provided by Youth and funded. Young people become disillusioned when Direction’s targeted youth support. they see that our promises of investment in them are I remember well, when I was the chair of the Stockton only words. Children’s Trust board, those same young people putting In Trafford, we are not only concerned about the loss politicians, council, health, police and other professionals of youth centres, important though that is—some of through their paces. They asked difficult questions, them are extremely effective and popular in reaching tried to force us to justify some of the changes that we out to the young people in their neighbourhood; as my were making at the time and encouraged us to do hon. Friend said, we are also concerned about the loss different things. That is the best of practice by a council of trained youth workers. There will also be a reduction that has been nominated countless times for council of in volunteering opportunities in those youth centres, the year and has, of course, won that award as well. and I am surprised that a Government who are so keen From what I hear from around the country, not every on volunteering should remove such opportunities, which local authority has been able to adapt to that extent to are much valued in my constituency. serve their young people—the example from Trafford In Trafford, as in other communities, the voluntary comes to mind—and it is young people who pay the sector has traditionally supplied a good proportion of price for that. youth provision. I believe that our local authority hopes I ask the Minister to carry out his own assessment of that that sector will now do much more. Like my hon. the impact of his Government’s cuts to youth services, Friend, I greatly value the youth work that is done by a and to pledge to become a champion for our young range of non-governmental, non-statutory organisations people and fight the Treasury for the resources that are in my borough. The problem is that if we leave such work required to start healing our youth services. Will he entirely to voluntary and self-organising youth provision, work with the Local Government Association to understand the offer across the borough will not be strategic. Some better the pressures it faces in delivering, in many cases, areas may be quite well served, but other areas where the most basic services for our young people? Will he need is higher may be rather poorly served. There may help to fulfil his role of champion—the one that I have be some activities that offer lots of opportunities for just given him—by better understanding young people’s young people, but other activities that young people need for the right advice and services from professional want to take part in may not be available in our borough. people? Will he further fulfil that role by working across My hon. Friend made an important point about Government to influence, among others, the Education sustainability. Voluntary organisations are keen to do Secretary to sort out the careers service? Equally what they can to fill the gap in Trafford, but it is a big importantly, will he help to ensure that the whole of challenge for them to raise sustainable funding to enable Government works for our young people? them to make commitments beyond one or two years. This is a well-worn cliché, but I will use it anyway. For example, Redeeming Our Communities, which has The young people of today are our future. They are the recently begun operating in Partington in my constituency, taxpayers of tomorrow and the people who will look is keen to look at what more it can do as the youth after us. We need to give them more, and we need to give service in Trafford is degraded, but it has already made them a better start to help them to prepare for that the point to me that it can do only as much as it can responsibility. raise funding for. We must be mindful of the fact that a voluntary sector solution is not sustainable unless there is sustainable funding to allow such organisations to 2.53 pm operate.

Kate Green (Stretford and Urmston) (Lab): I am Alex Cunningham: One of the questions that perhaps grateful for the opportunity to contribute to this debate I should have asked the Minister is whether he will do about a matter that is of huge concern to my constituency something to ring-fence and protect youth budgets. following the Trafford council budget proposals made a Even if Trafford had only a small amount, at least it few weeks ago, which would result in the closure of all could work with the voluntary sector to improve its of our youth centres around the borough, leaving only chances of delivering provision in some of the more the central Talkshop available for young people in Trafford. difficult areas. In a borough that has, as my hon. Friend the Member for Stockton North (Alex Cunningham) highlighted, Kate Green: Certainty would be valuable to those some outlying geographical areas and quite high transport who want to provide youth services. I also make the costs, it is unlikely that many young people in my point to the Minister that the availability of statutory constituency would be able to access the central Talkshop. funding has drawn in additional voluntary funding on The concern extends well beyond my constituents, top of the statutory funding that has hitherto underpinned although many of them have written to me about it over our service. Lostock youth centre, for example, has been the past few weeks. There is considerable pressure on able to raise hundreds of thousands of pounds of MPs from all over the country to sign a recently tabled voluntary money to top up the statutory support that it early-day motion, and at a recent meeting of the all-party receives. Although some of that voluntary money may group on poverty, young people challenged MPs from continue to reach our youth centres, we will lose the all political parties about the importance of the youth basic infrastructure that enables a trained team of youth service. They received favourable responses from MPs workers to go out and seek such additional voluntary 157WH Youth Service Provision3 DECEMBER 2014 Youth Service Provision 158WH

[Kate Green] were cuts to those services as the years went on, particularly in the 1950s. In 1958, Lady Albemarle produced a report funding support. Even if voluntary funding were widely that became the foundation of the modern youth service. available, provision cannot exist in a vacuum, without The Education Act 1944 provided a statutory basis for an underpinning of statutory financial support. the youth service. If hon. Members wonder why I am I am concerned that there is a real mismatch between talking about 1958 and 1944, it is because we always the degrading of our youth services and the other link Acts backwards, and the Education and Inspections strategic ambitions of local authorities and the Government Act 2006 contains references to the 1944 Act—I was for our young people: priorities such as reducing crime always confused about that. The 1944 Act set out that and antisocial behaviour, making young people feel safe, local authorities should procure a sufficient youth service. ensuring their emotional well-being and ensuring that Sadly, under the previous Tory Government in the they achieve, attain and have aspirations. In the context 90s, our youth services started disappearing at a rate of of considerable attention being given to the risk of knots. I always used to think that perhaps one day I sexual exploitation and abuse, there must be the highest would not be a youth worker, but I never thought that provision in relation to safeguarding, and the youth there would be an end of the youth service. In the 1990s, service hitherto has been an important element of providing although I still wanted to be a youth worker, there were such protection to potentially vulnerable young people. nearly no jobs left. As I am sure the Minister will understand, we are The previous Labour Government strengthened the deeply concerned about that in the Greater Manchester legislation. Unfortunately, some of the first words in area. The youth service in Trafford has been actively the 2006 Act are: engaged in that area, and it is well informed about the “must, so far as reasonably practicable”. young people who are at risk. I am concerned that such knowledge and intelligence may be lost. That is something I hope an incoming Labour Government will sort out. I plead with the Minister to talk to local Everyone recognises the financial pressures that our authorities about what is “reasonably practicable”. If it local authorities are under, but it is very short-sighted simply is reasonably practicable for a local authority to provide to slash youth provision. It is poor value for money library services, education and other services, surely it because it will generate additional costs and pressures should still be providing youth services. in other parts of the system in the years to come. I appreciate that the Minister will say that local authorities The 2006 Act called on local authorities to secure for must exercise discretion locally and make their own qualifying young persons in the local authority area—13 to decisions, but he has the opportunity today to offer 19-year-olds and people with learning difficulties up to certainty and stability so that we at least have the the age of 25— capacity for forward planning. I hope he will give us “sufficient educational leisure-time activities which are for the those assurances this afternoon. improvement of their well-being, and sufficient facilities for such activities; and...sufficient recreational leisure-time activities which are for the improvement of their well-being, and sufficient facilities 3pm for such activities”. Julie Hilling (Bolton West) (Lab): I congratulate my It states that hon. Friend the Member for Stockton North (Alex “ ‘sufficient educational leisure-time activities’ which are for the Cunningham) on securing this debate. improvement of the well-being of qualifying young persons in the authority’s area must include sufficient educational leisure-time I must declare an interest: I am a youth worker. At activities which are for the improvement of their personal and least, when I had a proper job before I came to this social development.” place I spent almost all my professional life as a youth That was later defined to mean youth work. and community worker, working with young people in communities. A few of us in this place and a few more The Act set out two forms of activity. Educational in the other place were youth and community workers, leisure-time activity aids young people’s social and personal and we are all in absolute despair at what is happening development, and includes activities delivered by youth to our services. I also chair the all-party group on youth workers. Recreational leisure-time activities can include affairs, so I try to keep my feet on the ground, although provision by youth workers, but it also includes sport, the situation is moving incredibly fast at the moment. informal physical activities and cultural activities such Unfortunately, it is not changing for the better; services as music, performing arts and visual arts. are being destroyed up and down the country—I will The Government did not totally abandon that talk a little more about that later. commitment. In a policy document on youth services, Let me start with something the Chancellor said in they reiterated: his autumn statement a few minutes ago: “It is…local authorities’ duty to secure, so far as reasonably “We have shown in this Parliament that we can deliver spending practicable, equality of access for all young people to the positive, reductions without damaging front-line public services”. preventative and early help they need to improve their well-being. This includes youth work and other services and activities I wish he were part of this debate so he could see how that:…Connect young people with their communities, enabling those budget cuts have totally destroyed front-line services them to belong and contribute to society, including through —the youth service in particular. volunteering, and supporting them to have a voice in decisions Let me take hon. Members back to the start of the which affect their lives;…offer young people opportunities in safe system. There was an early youth service at the end of environments to take part in a wide range of sports, arts, music and other activities, through which they can develop a strong the 19th century, when a number of voluntary organisations sense of belonging, socialise safely with their peers, enjoy social were set up to work with young people—in particular, mixing, experience spending time with older people, and develop those who faced difficulties in the streets and those who relationships with adults they trust;…support the personal and worked in the mills, in service and in other places. There social development of young people through which they build the 159WH Youth Service Provision3 DECEMBER 2014 Youth Service Provision 160WH capabilities they need for learning, work, and the transition to tries to find out what young people actually want and adulthood…improve young people’s physical and mental health need, rather than what the youth worker, as an adult, and emotional well-being;…help those young people at risk of thinks they want and need. There is, therefore, a voluntary dropping out…raise young people’s aspirations, build their resilience, relationship and the ability for young people to develop and inform their decisions—and thereby reducing teenage pregnancy, risky behaviours such as substance misuse, and involvement in and to choose their own curriculum. crime and anti-social behaviour.” As a youth worker—I apologise to all the young Sadly, the Government, through their devastating cuts, people I worked with over the years for this—I never have failed absolutely to enable young people to access had a conversation that was truly about what they thought those services. about “Brookside” the night before or what they did the weekend before, because all those conversations were The previous Government’s document “Resourcing fundamental starting points for exploring other issues. excellent youth services” states: We would use soaps to talk about date rape, and we “the purpose of the work must be predominantly that of achieving would use things that were going on to talk about drugs, outcomes related to young people’s personal and social development sex or relationships. Yes, we would teach young people (as distinct from, say, their academic or vocational learning);…the methods of the work include the extensive use of experiential about condoms and how to have positive sexual learning and of small groups (as distinct from, say, a prescribed relationships, but there was a whole mix when it came to curriculum and whole-class teaching or individual casework);…the working with young people. values of the work include the voluntary engagement of young people with skilled adults. This relationship transforms what is Lisa Nandy (Wigan) (Lab): I am listening with interest possible for young people.” to what my hon. Friend is saying. In terms of the horrendous examples of child sexual exploitation we Alex Cunningham: My hon. Friend is talking about have seen across the country, with more surely to come how the youth service and youth workers have a very over the next few years, does she agree that there is a different role to play in supporting young people today. reason why, in every serious case review we read, it is In schools today, there is tremendous pressure on young charities that have raised the alarm? They take the time people. They have got to have their heads down, the and have the space to develop relationships with young curriculum is very tight and they must concentrate on people, exactly as she is outlining. That is why cutting academic subjects. That is all the more reason why they these organisations, which are doing such important need somebody outside that environment to help them work, is so short-sighted. develop in other ways. Julie Hilling: I was going to talk about that issue, but Julie Hilling: I agree. Anybody who has worked with I will pick it up now. If we look at the reports about young people knows that if their heads are not in the Rotherham and Rochdale, we see it was youth workers right place, they cannot learn. I used to manage a who took the side of young people and started to raise project for looked-after young people, who were put in issues. They said, “Things are not right here. These small groups with qualitative professional workers to young people need to be listened to.” Indeed, they are work through their issues. Sticking them in a classroom perhaps the only professionals who come out well from and trying to stuff their heads full of facts was not those reports. working. The facts were being kept out by the mess in their lives—they did not know what was going on in Youth work is also about challenging attitudes. It is their lives and they did not have good relationships with not necessarily about taking the side of young people adults. Providing that space did more than allow those and deciding they are absolutely right, but about challenging young people to be themselves; it enabled them to learn, their attitudes, their racism and their sexism. It is about participate, take part, get ready for work and take up challenging them to think about the world so that they their role in the world. It fulfilled an important part of do not just walk into the world and accept their place, those young people’s development. but challenge the world as well. If they see injustice, they can challenge it by working together, not by rioting I shall quote from Choose Youth, an organisation on the streets. Part of the legislation is that the voice of that shows that the Government have done something youth is central and that young people have a right to a right. They have brought together all the practitioners voice. in the voluntary and statutory sectors in youth work—that was unknown in the past—in an organisation that seeks Bill Esterson: I want to link what my hon. Friend the to defend and promote youth work. Choose Youthsays: Member for Wigan (Lisa Nandy) said with something “What is youth work and why is it important?...Youth work as that my hon. Friend said earlier, based on her experience. a professional educational practice uniquely inspires, educates, Many of the young people involved in the trafficking empowers, takes the side of young people and amplifies their voice. Unlike other interventions with young people it combines were in children’s homes; my hon. Friend talked about these elements in a relationship that young people freely choose to her work with looked-after children. All too sadly, make with their youth workers. From this relationship a curriculum many children in care will end up in prison a few years of learning and activities is developed that build on the positive on, costing £200,000 a year each, which is an horrendous and enhance social and personal education.” sum. Given my hon. Friend’s experience, can she say Youth work is sometimes a place, such as a centre. how effective youth work has been over the years in Sometimes it takes place on the streets, sometimes in keeping some of those young people from ending up in projects—in arts or sports projects in a variety of settings. prison? What is unique, however, is that it is, first, an informal relationship that young people can choose to be part Julie Hilling: That is always hard to quantify, but the of—they do not have to be part of it. Secondly, the issue is important. Over the past few years, people have relationship is based on their terms; the youth worker looked for integrated services, which is the right thing to 161WH Youth Service Provision3 DECEMBER 2014 Youth Service Provision 162WH

[Julie Hilling] It is now difficult to ascertain what is left of many services. Some are youth and play, while some are just do, but they have then tried to combine them in one youth support services. The whole designated youth role. Social workers working with young people in care service budget has gone completely. What saved the have a vital role, but that adult who befriends young people Wigan youth service in the late ’80s was the fact that the and works with them on their terms, and who does not local authority had to spend a percentage of its education have to make sure that they are home by 9 o’clock night, budget on the youth service. We had a great influx of they have done their homework or they have eaten their money, and we doubled the number of youth workers. greens, is also vital. Legislation is important, and it should be implemented. My hon. Friend is right that the cost of young people If we ask people in a neighbourhood what they want, who enter the penal system is enormous, and I will come they say they want youth centres for young people to go to the figures in a moment. We are spending about to. They do not want young people hanging around on £100 per year per young person on youth work, compared street corners with nothing to do; they want them to with the hundreds of thousands of pounds we spend to have positive relationships. In that respect, early-day keep people in the penal system because we could not motion 488 now has more than 100 signatures, and spend a pittance on them before. It is estimated that if 38 Degrees—I agree with this 38 Degrees petition—is we spent £350 per year per young person, that would encouraging people to sign a petition. fund the proper youth service we are talking about. One of the Minister’s predecessors did a survey of Another issue the Government have led us to is local authorities’ youth service spending. As far as I am working just with the young people who are most in aware, it has never come to light. Can the Minister need—those who are not in education, employment or enlighten us about what happened to it, or whether it training. Of course we need to work with those people, exists? Certainly, Unison did freedom of information but the more cuts we make to the service that gathers requests on some local authorities and discovered that most young people, the more people will fall to the at least 2,000 jobs had gone. Given that there were only bottom of the net and need a more specialist service to 7,000 in the first place, that is an enormous percentage. get them out. The youth service is a good vehicle for Some 350 youth centres closed and 41,000 youth services enabling all young people to have that same positive places were lost. As has been mentioned, a place in the relationship. criminal justice system costs £200,000 per annum. Let us talk about some of the cuts. In 2010, Sheffield I quote again from the Choose Youth manifesto: had 41 youth clubs; in 2013, that was down to 23. Since “Youth work contributes significantly to early intervention 2013, of course, there have been further cuts, and those and preventative services thereby reducing the incidence of young cuts are continuing. In the north-west, Manchester people in need of highly targeted intensive and expensive services later on. disestablished its youth service. It is still putting £1.3 million into the voluntary sector, but that is now up for grabs, For example, the Audit Commission report into the benefits of sport and leisure activities in preventing anti-social behaviour by and it is likely to disappear. Oldham is getting rid of young people estimates that a young person in the criminal justice everything apart from one myplace centre. In Trafford, system costs the taxpayer over £200,000 by the age of 16. But one all provision is on the table to go completely, although a who is given support to stay out costs less than £50,000. Other housing association might pick some up. In St Helens, comparative costs include: £1,300 per person for an electronically there is a 77% cut, and it now has only 28 hours of monitored curfew order. £35,000 per year to keep one young delivery at the most. person in a young offender institution. £9,000 for the average resettlement package per young person after custody.” In Lancashire, half the budget has gone, and it is now looking at further cuts. In Tameside, the budget is almost Youth work is a cheap, efficient alternative to all those gone. In Stockport, it is gone. Sefton faces huge cuts. In other intervention measures. The National YouthAgency Liverpool, the budget is gone. Bolton faces massive used to be paid to collate a survey of spending on local cuts. Wigan now faces an 80% cut. Cheshire West now authorities. It can no longer do that work because it is has four professional youth workers—I am sure they no longer paid to do it. know individually every one of the young people they The youth service profession are qualified workers, are supposed to be working with. The one little bit of not just people who turn up on a Friday night and decide success is in Knowsley, where youth workers and young that they will play with young people. A youth work people have set up a project together and are running qualification is equivalent to a teaching qualification. the services. The qualification and training are as rigorous as those for other caring professions such as social work and The picture across the country is devastating. The teaching. Youthwork is now a degree profession and youth smallest cut is 50%. A lot of areas have cuts of 75%. workers are highly trained and qualified. They support Now, particularly in the period going forward, a lot of volunteers in their work. For every pound spent, £8 comes areas are cutting budgets completely. These authorities back in action by volunteers. The work is cost-effective have a statutory duty to provide a service, and I will in all sorts of ways, but it is about professional service. come back to that in a minute. Most of us would not want an unqualified teacher to be We are losing the professional expertise and the standing in front of a class and teaching. Most of us would co-ordination across the piece. Even when there is money not want an unqualified doctor to treat us or an unqualified to go into the voluntary sector, there is nobody there to nurse to deal with us. Why then should we accept co-ordinate that spend. Indeed, I was told yesterday of unqualified youth workers working with young people? a local authority that is now looking to the regional youth service unit to provide it with some infrastructure, Alex Cunningham: I am delighted that my hon. Friend because the local authority’s infrastructure has completely is paying tribute to youth workers and their professionalism, disappeared. in what is now a degree-entry profession. They do 163WH Youth Service Provision3 DECEMBER 2014 Youth Service Provision 164WH tremendous work, and for so little pay; it is not a well Lisa Nandy: Given the problems that the hon. Gentleman rewarded profession financially, although it is in other outlined about non-statutory services becoming poorer ways. Could my hon. Friend recommend it as a career and less of a priority in times of trouble, does he choice in the current environment? support a statutory youth service?

Julie Hilling: My hon. Friend makes an interesting Andrew Percy: I am open to debate on that. I do not point. I went to Huddersfield to talk to a group of have a particularly strong view one way or the other. students a couple of weeks ago, and asked them much Provision for young people is something that local the same question. They are still as dedicated and authorities should just want to make, because it is part committed, and they may well get jobs, but not as youth of their core function. If we have local democracy those workers, because the skills of youth workers and the decisions should be for local councillors, and if they do methodology of youth work are wanted by many other not choose to provide those services local people have professions. Really, however, we should hope that they the option of throwing them out. Young people can can employ their core skills in working with young play an important role in that if more of them vote. I people. always say to young people that the reason they do not Finally—I recognise I have gone on for rather a long have a free bus pas when pensioners do can be seen from time—it is a false economy to remove youth services, the turnout figures. and to work with young people only when they are I have been painting a rosy picture up to now. already in trouble or at risk of getting into trouble. The Minister needs to make local authorities live up to their Alex Cunningham: rose— statutory duties, and not just ignore the legislation that says there is a statutory basis for the youth service. Of Andrew Percy: I will give way to the hon. Gentleman. course that needs strengthening and I hope that the next It is his debate, after all. Labour Government will strengthen it. We have seen how easily an incoming Government can water down Alex Cunningham: If the hon. Gentleman is not in regulation. However, there is regulation and legislation. favour of youth services becoming a statutory responsibility The Government should live up to their promise to of local authorities, does he accept that perhaps we young people and enforce the legislation to make sure need to make sure there is specific funding—an increase that we have a sufficient youth service in every area of first, and then specific ring-fenced funding for the delivery the country. of youth services in local authority areas?

3.24 pm Andrew Percy: I am always wary, Mr Davies—and as Andrew Percy (Brigg and Goole) (Con): I apologise a fellow Yorkshireman I should have mentioned that it for being late for the debate. I was in the Chamber for is a pleasure to serve under your chairmanship—of this the autumn statement, desperately bobbing up and place telling local authorities what they should or should down trying to be called, which took rather a long time. not spend their budget on. I remember the Connexions I am sorry to have missed the opening speech, and budget, which was ring-fenced to local councils. It was congratulate the hon. Member for Stockton North (Alex ring-fenced funding for a couple of years, at which Cunningham) on securing the debate. It is a privilege point it simply passed into the revenue budget of local and pleasure to follow the hon. Member for Bolton authorities. The extra funding we got for Connexions, West (Julie Hilling), who knows an awful lot about the which we had to spend on it in the first year or two subject. I was interested in her speech, which was largely when it came from central Government, did not continue non-political, with the exception of some comments because it became part of our main revenue budget. about cuts. I will say something about those in the context of my local authority. Alex Cunningham: I chaired a Connexions company I used to serve as a local councillor and I used to across the whole of the Tees valley. That was not money be—and still consider myself to be—a schoolteacher, so vested in the local authority; it was vested in the Connexions general issues to do with young people are of considerable company, which was there to deliver, and it had no interest to me. I am interested also because one of the other option but to spend the money on direct services. local authorities in my constituency has made a significant change to youth services in recent years, from which I Andrew Percy: I do not know what the situation was, think we can learn a lot, and perhaps paint a slightly but I remember in the city of Hull, when we had it, different picture from the doom and gloom scenario in although there was pump-priming from central Government many local authority areas. I was a councillor through a we eventually ended up picking up some of the expenditure Labour Government, and year after year, youth services on Connexions. [Interruption.] I will have to. If the seemed to be cut or reduced, or become less significant. hon. Gentleman wants to contact me afterwards we can Even at a time of increasing local government expenditure, try to sort it out. I was on the council for 10 years. There which happened in some years, it was a service that still are many things I remember well and some I choose to seemed to come under the hammer for efficiency savings forget. This is one that I remember; we debated it in the or cuts. Of course, there is variation in that from authority council chamber. I will happily be corrected afterwards. to authority. On the hon. Gentleman’s broader point about whether We hear a lot about cuts to the youth service, and that we should be mandating how local councils spend their was happening in North Lincolnshire until we came to money, there are countless examples. Connexions may office in 2011 when we took the council away from the be an example of where that happened after funding control of the Labour group and made the political was made available by the previous Government. Bus decision to increase the youth budget. passes are another example of where local authorities 165WH Youth Service Provision3 DECEMBER 2014 Youth Service Provision 166WH

[Andrew Percy] Young people told us that they did not necessarily want everything to be sport-related, which often happens got some money and were told that they had to provide with youth services and youth provision in the broader something. The money from central Government disappears sense. People often think, “We’ll just put goalposts up off and local authorities ended up having to absorb it in and give kids a football, because that’s what they really their revenue budget. My answer to his question is that I want.” But that is not what a lot of young people want, would be nervous. It is something that local authorities so street dance is now being provided by a brilliant should choose to provide, and if they do not provide it, organisation called Street Beat. We have Grasp the they can be held accountable at the next election. Nettle, and we even have cooking classes. Of course, street sport is provided throughout the summer months, Bill Esterson: Will the hon. Gentleman give way? and indoor sports are provided in the winter months. We have been able to base those activities in 20 centres across North Lincolnshire, including all the existing Andrew Percy: I came in late, so it would be rude of youth centres, which the council decided to retain and, me not to give way. in some cases, improve—the youth centre in Broughton in my constituency will shortly be moving. We now have Bill Esterson: The hon. Gentleman used the phrase new providers offering a range of services, including the “Government money disappears off,” which has certainly Duke of Edinburgh award programme, in a number of happened on a grand scale under this Government. new centres. There are new operators in places such as Does he agree—this is the point Opposition Members Winterton, Brigg, Epworth and Crowle. Attendance in have all been making—that investment in youth services Broughton has increased by 63% since youth services prevents the costs of social failure, one way or another, were provided in this different way, which was controversial especially preventing young people ending up in prison? in many respects, but the figures speak for themselves. Does he support the general principle of invest to save, The local authority also talked to disabled young quite apart from the benefits to young people? people about what they wanted. The responses were very interesting, because they wanted bespoke services Andrew Percy: I will not rehearse with the hon. for disabled young people to be part of the mix, but Gentleman the reason why there are spending reductions they wanted mainstream provision to apply to them, for local government, which would have been implemented too. I pay tribute to Scunthorpe United, which does a by whoever was in power. Let us not pretend that there great job of providing disabled youth services. I also is some sort of alternative nirvana in which local pay tribute to Daisy Lincs, which is a great local charity government budgets would be increasing. Regardless of headed by Julie Reed from Crowle. Daisy Lincs does a who won the 2010 election, local government budgets brilliant job with disabled young people. would be reducing, so let us nail that myth. I will now describe where we are at in my area and across North Lincolnshire. Before the changes, we used I am rapidly trying to remember the hon. Gentleman’s to have three sessions a week in Winterton; we now have question, which was on whether there is value in investment. five. We used to have eight sessions in Brigg; we now I think there is value, but it can be provided in a number have nine. On the Isle of Axholme, which I represent, of ways. Indeed, who is providing such bespoke support, we used to have three sessions; we now have nine. The particularly to at-risk young people, varies between number of sessions increased by 49.5% between 2012-13 localities. There is no doubt, because the evidence is and 2013-14, and the attendances speak for themselves. very clear, that if we intervene early on young people There were 31,215 attendances in 2013-14 compared who are at risk of following certain pathways, we can with 22,800 in 2012-13, so providing services in a different prevent those outcomes—that is what we all want. I way and delivering them with extra funding has made a broadly agree with him, although how we provide it real difference. The biggest thing we found was that should not be mandated in one particular way. 85% to 90% of young people simply did not engage That brings me neatly to North Lincolnshire council. with the old youth service provision, which was working We went through a painful process, because following very well for a certain group of young people, but it was the “Positive for Youth”Government guidance in July 2012, not working more broadly. It could be argued that some the local authority decided to consult young people on of the new provision, because it is based around themes how it should provide its youth services. In so doing, the such as street theatre, may not be picking up some of local authority spoke to 2,000 young people, who told the important issues that the hon. Member for Bolton us that the service they had been offered, which in many West so eloquently outlined. That is why outreach services ways had not changed since the old Humberside youth are being retained. service of 40 years earlier, was not necessarily delivering We know that the picture is painful for many local what they wanted it to deliver. That became controversial. authorities, but in North Lincolnshire, by putting in Some youth workers did not like it, because different that extra money and providing services in a different providers were brought in. Indeed, in the initial proposals way, based on what young people told us they want—there there was a gap between what would happen to the core, were some protests from youth workers—we have been traditional youth worker roles and the new provision. able to deliver a positive change. Questions were asked about whether we would lose something. Eventually, the local authority came to the Alex Cunningham: The hon. Gentleman is giving the sensible position of retaining a number of fully qualified same message that Opposition Members would give. If youth workers in an outreach role across localities, and more resources are put into the service, and if the a range of other provisions was provided across various service is modernised, better services can be delivered localities with an increased budget of £194,000, which is for more young people. Surely that is the message: we not insignificant for a small authority. need more resources for youth work. 167WH Youth Service Provision3 DECEMBER 2014 Youth Service Provision 168WH

Andrew Percy: Local authorities may simply provide (Yvonne Fovargue) and for Bolton West (Julie Hilling), what they already spend, but we took the decision to and myself—shows that there is a strong commitment reverse the cuts of the previous council administration. from us as elected politicians to try to protect those We put new money in, but we provided the services in a services. different way. If I had one criticism of my time as a One of the exciting things that has happened in local councillor and of my time working in this process, Wigan in the past few years is the youth zone that we it is that some of those closest to the service do not have managed to set up. It is an example of some of the necessarily always understand how society and young things that Members have talked about today. It is a people have changed and how the provision needs to way of doing things differently, because it is a partnership alter too. In my profession as a teacher, the pastoral between the OnSide charity, the local authority, local support offered to young people now is very different entrepreneurs and businesses, the community, and, most from the support that was provided to young people important of course, young people themselves, who even—when did I go to school?—10 or 20 years ago. have been involved from the outset in campaigning for The provision is very different, so schools pick up some this service, designing it and now running it, as well as of it, and there are other services, too. Nothing can exist using it. It is not the beginning and end of the whole in stasis. Money may be part of the answer, but we can story in terms of the youth services that we need in our do things differently. We can get positive outcomes even borough, but it is a real achievement at a time when the with a declining budget, which my other local authority local authority budget in particular and the community faces because it made different decisions. The general are under such strain. message is that provision for young people is vital. Yvonne Fovargue (Makerfield) (Lab): Will my hon. Alex Cunningham: It is not statutory. Friend join me in welcoming the free bus service that runs from my area, which is an outlying area of the Andrew Percy: I have already explained the answers borough? The authorities recognised that young people to that one. I apologise once again for being late and from the outlying areas of the borough were not using will end there. that service, and they have done something immediately to try to solve that problem. 3.38 pm Lisa Nandy (Wigan) (Lab): I congratulate my hon. Lisa Nandy: My hon. Friend is absolutely right to Friend the Member for Stockton North (Alex Cunningham) highlight that, and it is one of the reasons why I on securing the debate and on his opening speech. He is congratulated my hon. Friend the Member for Stockton right to situate what has happened to youth services in North for situating this debate in the wider context of the context of what has happened to support for and what is happening to young people. Transport costs are the focus on young people over the past few years. the key thing that young people always raise with me Support has collapsed in some areas where it is most and, I am sure, many other Members, and it is important needed. He mentioned the education maintenance allowance that we think about that when we consider services for and the careers service among other things. The speeches young people. and interventions made by my hon. Friends show how There are some other startling examples of local strongly Labour feels about youth services and demonstrate authorities doing something really exciting. The hon. our commitment to ensuring that all young people have Member for Brigg and Goole is right to acknowledge access to a high-quality, open-access and appropriately the impact that the cuts have had but also to say that funded youth service. this is not just about funding. For example, I think that We believe that it is important to set that benchmark many Members will be aware of a project in Lambeth because of what we have seen happening in recent years, that I have heard about and seen for myself. Lambeth with huge pressures being placed on local authority took the huge amounts that it was spending on young budgets, but we are not prescriptive about how it should people through various budgets and put it into a trust, be delivered locally, or what it should look like. However, which anyone in the community over the age of 12 could where we are clear and where we perhaps differ from join. It was weighted towards young people, so that they this Government—unless the Minister is going to say retained control, and it gave the community the power something very exciting in his closing speech—is in our to take real decisions about how services were commissioned belief the Government have a clear role in ensuring that and delivered and what they looked like. My understanding that offer to young people is made clear to local government is that that project has been a remarkable success. It and is delivered in every community around the country. points to a key feature of successful youth services; the I agreed with much of what the hon. Member for Brigg most successful ones are those that involve young people and Goole (Andrew Percy) said. The difficulty is that in commissioning, designing and delivering them, where what we have seen over the years is that some local possible. authorities absolutely get this issue and understand it, However, we know from our experience of looking at but not all. The key question for national Government youth services that what works in Lambeth does not is what to do when that commitment is not being necessarily work in Liverpool. That is why I have said delivered in some local areas where people simply do that there needs to be a clear minimum offer from this not get it. Government. Labour is clearly committed to that, but My own local authority, Wigan, has had real challenges not to prescription about on how it should be delivered. with this. We have had the third worst budget cuts in the Labour Members have previously said that we are open entire country, but the fact that there are three MPs in to strengthening the statutory duty to provide youth Westminster Hall today who represent parts of that services, and I have listened carefully to the contributions borough—my hon. Friends the Members for Makerfield by hon. Members on that point, but I think we must 169WH Youth Service Provision3 DECEMBER 2014 Youth Service Provision 170WH

[Lisa Nandy] The other thing to say is that young people spend 85% of their time out of school, yet each year local recognise that, on its own, a statutory duty is not enough. authorities spend 55 times more on formal education As my hon. Friend the Member for Bolton West said, than they do on providing services for young people we already have a statutory duty, limited though it is, outside the school day. We need to get a bit of a grip on and it is not being fulfilled around the country. Labour this, because when this Government agreed to protect is very attracted by the possibility of introducing a duty ring-fencing for school funding they did not do the to ensure that young people are involved from the same for additional activities. They abolished ring-fenced outset in designing and commissioning youth services, grants for— and we wonder whether the Minister might share that aspiration; if he does, perhaps he will say something Alex Cunningham: Will my hon. Friend give way? about it today. There is also a clear need to ensure that young people Lisa Nandy: If my hon. Friend does not mind, I will can hold the people who make these decisions to account. not give way, as I have only a couple of minutes left and That is one of the reasons why Labour is committed to I wanted to make some last points. introducing votes at 16. I hope that the Minister will As I was saying, the Government abolished the ring- listen to that argument and consider carefully how fenced grants for additional activities. They inherited young people can hold their elected politicians to account spending of £350 million per year on those activities, for their decisions if they do not have the vote. which equated to about £77 per young person aged I should also mention briefly concerns about the between 13 and 19. A previous Minister responsible for work force. I want to be fair to the Minister, so I will say this area said that that equated to that some of the problems in the youth service work “large slugs of public money”. force predate the coalition. In 2008, a survey by the I hope that the current Minister will take the opportunity National Youth Agency found that a third of councils to reject that view and tell us that he thinks young were not investing at all in the professional development people are worth at least £77 of our money per head. of youth workers. That was really worrying then, but I dread to think what the figure is now, several years after Over the past four years, Ministers have passed on the huge cuts that we have had. Can the Minister tell us? responsibility to the very same local authorities that There is a real risk that we will run down the quality of they are hammering with budget cuts. Frankly there our services and then turn around and say to young was only ever going to be one result, because at the people that those services are not worth saving in any same time the money that helped to sustain youth case. services was put into an early intervention grant, which was also used to fund Sure Starts and services dealing There is no question that the last four years have been with teen pregnancy, substance misuse and mental health, absolutely horrendous for this sector, and I do not want before being cut again by up to 40%. I say to the to lose sight of that. We have lost good, skilled staff, Minister: what sort of message does that send to young and many more are under significant strain, dealing people about our commitment to them? If my hon. with low-pay, job insecurity and the prospect of Friend the former Member for Wythenshawe and Sale redundancies. This really matters, because as my hon. East were here, he would say that this approach is so Friends the Members for Sefton Central (Bill Esterson) short-sighted, particularly given all the issues about and for Stockton North said, behind the loss of all child protection and children in the criminal justice those youth workers—2,000 of them during the last few system that we have discussed. years—is a story of broken relationships. I once worked I also wanted to say to the Minister that some local with a young person who had grown up in and out of authorities have cut way beyond the average. Have he or care. He was 18 when I first came across him and he told any of his colleagues ever considered using the powers me that the only consistent adult in his life since he was that they have under the Education Act 2006 to intervene 11 had been his youth worker. When we lose good, where they see youth services being cut disproportionately skilled staff, we break that link and that bond, and the and the statutory duty that exists in that Act not being damage is irreparable. met? Regarding the National Citizen Service, I say to the In 2011, the Minister’s predecessor as Minister for Civil Minister that although I support many of the things Society said, that my hon. Friends have said, and I myself have also “we are working with our strategic partners to gather information had a parmo with some of the young people from about what is happening on the ground”. Redcar who have taken part in NCS, it is no substitute for long-term, ongoing youth services provided all year Has that happened and has it been published? What round. It is a short-term intervention and it is very discussions has he had with local authorities? expensive. If we come to power in May next year, we are This is not simply a question of money; it is about not planning to make the same mistake that this priorities. My hon. Friend the Member for Bolton West Government did with the v scheme, and simply tear said, quite rightly, that the emergence of a significant something up because another party has established it, youth service can be traced back to post-world war two but we are very concerned about the cost of NCS. My and “In the Service of Youth”. It was a time when the hon. Friend the Member for Stockton North drew a country was facing the most significant financial challenge parallel between the amount of money that the German in its history. This is not just a question of what we say Federal Government spend on year-round youth work to our young people; it is about what sort of country we and the money that this Government spend on short-term want to be. Do we want to be forward-looking, confident, interventions. ambitious and invest in our young people, their talent 171WH Youth Service Provision3 DECEMBER 2014 Youth Service Provision 172WH and energy, or do we want to watch the sad disintegration of these types of local services. I am also committed to of the services that they rely on over the next few years? bringing national and local government together, along I know what our answer is. with civil society and businesses, to give young people the best possible opportunities to succeed, and I will set out the Government’s current work to achieve this. 3.50 pm At local level, this Government have retained the The Minister for Civil Society (Mr Rob Wilson): With existing statutory duty for local authorities, which requires your toleration, Mr Davies, may I begin in a slightly that they secure, as far as is practicable, sufficient services unusual way by congratulating the hon. Member for and activities to improve the well-being of young people, Wigan (Lisa Nandy) on her recent news that she will be as outlined in section 507B of the Education and Inspections adding to the youth of the nation? I hope that she will Act 2006. Not only did we retain the duty, but we be declaring a personal interest from now on. I also updated the guidance on it in June 2012. congratulate the hon. Member for Stockton North (Alex Hon. Members will have seen early-day motion 488, Cunningham) on securing an important debate and I tabled by a Labour Member—some have mentioned it thank all hon. Members who have contributed. It has —in favour of a statutory funded service with ring-fenced been a useful airing of views. funding from central Government. I have considered My first response to the debate is that I know these the issues, but do not support the EDM. I believe that have been tough times. On today of all days, I recognise effective local youth services are already supported by that the funding situation remains tight across the public the existing statutory duty. I also believe that local sector, even though this Government have successfully authorities should be empowered to decide how to cut the deficit in half. Local councils have had some secure services that meet the needs of young people in difficult decisions to make across all the services that their communities with the resources available to them. they provide and this has had a knock-on effect on It cannot be the role of central Government to dictate wider youth services. Having said that, I was slightly to them what services to deliver or to ring-fence funding concerned during some contributions, because we should for this purpose. I am not clear from comments by the always remember to talk about young people in a shadow Minister whether Labour now proposes to ring- positive way. We should be emphasising strengths among fence these budgets. our young people, not negatives. I was pleased to hear that my hon. Friend the Member Julie Hilling: I do not understand why we bother to for Brigg and Goole (Andrew Percy) say that 20 centres legislate in this place if we are not going to ensure that are being established in his area and that those are local authorities or other bodies carry out the measures doing things in a different, but very positive, way. The in legislation that we introduce. hon. Member for Stockton North mentioned some positive things that Stockton council is doing. I congratulate Mr Wilson: The hon. Lady has to recognise that the it on raising attendance at some of their centres and on principles of localism cannot simply be overridden the its engagement in the youth services area. first time anyone disagrees with a decision that is made. I was sorry to hear that the council in the constituency If we are serious about localism—I am—we have to of the hon. Member for Stretford and Urmston (Kate trust and respect local choices, and if necessary provide Green), who has had to leave, is taking the option of support to encourage new ways of thinking about how abandoning youth centres, but at the end of the day that services are delivered. is a choice, not a necessity. Alex Cunningham rose— Alex Cunningham: Will the Minister give way? Mr Wilson: I will make a bit more progress, if I may. Mr Wilson: I will make some progress and then I will I support transformational change that results in come back to the hon. Gentleman. services that are more responsive to the needs of people I have been Minister for Civil Society for just over using them and more efficient and resilient. We know two months and have seen the important and difficult that innovation is possible and that there are new models work done by youth workers and so many others with for delivering youth services that get the most out of the young people. These individuals are making a vital best of the voluntary and private sectors. Gloucestershire contribution to realising the Government’s ambition to county council is one example. Its targeted youth support ensure that all young people have the opportunities service is now provided through a partnership between needed to fulfil their potential—an ambition I am sure a private sector organisation, Prospects, and the county we all agree with. council. It works with nearly 6,000 vulnerable young Only last month on a visit to Stockton, I met Five people in the county, more than 90% of whom say it has Lamps, an organisation in the constituency neighbouring made a difference to their lives. Nationally, the Government the hon. Gentleman’s. This award-winning social enterprise want to provide practical support so that others can is working with young people in the town. Five Lamps follow its lead. Through the “Delivering Differently for works with nearly 25,000 people every year through Young People” programme, we are supporting 10 local programmes including youth services and work with authorities to do so and to explore new models of those who are not in education, employment or training. delivery. I heard what the hon. Member for Stockton It was inspiring to see how it transforms lives and raises North said about his own local authority and its initiatives aspirations in Stockton. Five Lamps is a fine example and I will look at those more closely. of the type of support that is available at the local level, If the hon. Gentleman would like an example of what and hon. Members would do well to commend such is possible in his region, he could look north to North work in their own constituencies. I am a huge supporter Tyneside, one of the councils we are supporting through 173WH Youth Service Provision 3 DECEMBER 2014 174WH

[Mr Rob Wilson] UK Steel Industry “Delivering Differently for Young People” programme. Its vision is to deliver joined-up services for young 4pm people that bring the public and voluntary sectors together Stephen Doughty (Cardiff South and Penarth) (Lab/ to make the most of skills, buildings and resources. At Co-op): It is a pleasure to serve under your chairmanship, every step, this will involve young people and will focus Mr Davies, and to have the chance to raise an issue that on tackling the needs of young people in a way that is is of concern not only to me and my constituency, but co-ordinated and comprehensive. We will provide short-term to many Members from all parts of the House. It is specialist support to plan how they implement this great to see a number of them here with me, as well as vision. Gloucestershire and North Tyneside councils the shadow Minister for these issues in the shadow are just two of many positive example of how councils Business, Innovation and Skills team, my hon. Friend are looking for new and creative opportunities to bring the Member for Hartlepool (Mr Wright). people together, create partnerships and look at new The UK steel industry and the associated metals funding streams. sectors comprise more than 24,000 enterprises, which To answer the hon. Gentleman’s question, my officials directly employ more than 330,000 people and were are working closely with the Local Government Association, worth more than £45.5 billion to the UK economy in which is a co-sponsor of the “Delivering Differently for 2012. Indirectly, two to three jobs in the broader economy Young People” programme. are dependent on each job in the metals sector. Steel, as many of my colleagues will attest, is vital for many of Alex Cunningham: The Minister is giving examples of the UK’s strategic supply chains, such as those in the good practice. We all love such examples and we know automotive industries, construction and energy. it is happening in parts of the country, but in other As many will know, Cardiff South and Penarth has a parts of the country the service is disappearing—we long and proud industrial history. It is just a stone’s have heard an example today—so what is he going to do throw from Tiger bay, where the coal hewed out of the about that? valleys of south Wales was exported to the world and where the East Moors steelworks sprang, establishing Mr Wilson: At a national level, the Government are Cardiff as a major player in the steel-making industry going further. We are supporting leading youth in the late 1800s. Although the original East Moors organisations to develop the centre for youth impact. complex was closed in 1978, I am pleased to say that For the first time in this country there will be a central Cardiff remains a major centre for steel production, point for information, guidance and bespoke support, which is currently done by Celsa. It has one of the most to demonstrate the value of youth services to others, carbon-efficient electric arc furnaces in Europe and the particularly those who make funding decisions—something world and rolling mills that produce crucial products, a Labour Government never did. Again, to answer such as reinforcing bar, for such UK infrastructure another of the hon. Gentleman’s questions, the Cabinet projects as Crossrail. Office did a survey of youth services in November 2013, Mark Tami (Alyn and Deeside) (Lab): I am pleased which has informed the actions that I am talking about that my hon. Friend has managed to secure a debate on today. this important topic. Shotton steelworks is in my Moving away from local youth services, I know that constituency. It produces high-end, top quality coated the hon. Gentleman has a particular interest in engaging products. Does he agree that the price of energy is young people in the democratic process. I share his harming this important industry, which could do so commitment and will speak about the Government’s much better if it could compete with companies in work in this area. Last month I had the privilege of Europe that have much lower costs? speaking to the UK Youth Parliament and saw young people at their best: informed, articulate and passionate. Stephen Doughty: I absolutely agree. It is very much They debated with eloquence and conviction about the case that from Shotton to Cardiff, from Skinningrove issues that matter to them, such as mental health and a to Llanelli, from Scunthorpe to Middlesbrough and living wage for all. We must make sure this same powerful from Newport to Redcar, steel producers are being voice shapes the services they use, locally and nationally. outflanked by significant challenges, including energy Engaging and listening is a way of ensuring our policies prices, which continue to increase unabated. The rules and services meet their actual needs. The Government of the game appear to have changed. I want to focus on are also ensuring social action opportunities exist outside a number of strategic issues. school and college for young people to develop the Nic Dakin (Scunthorpe) (Lab): I congratulate my skills and confidence they require to transition into hon. Friend on securing this timely debate. Does he adulthood. share my disappointment that in the autumn statement Unfortunately, I am not going to make it to the end the Chancellor did not take the opportunity to bring of my speech, so I will leave it there, Mr. Davies. forward mitigation on the renewables obligation for high energy users, such as the steel industry? That Philip Davies (in the Chair): We come to the next would have been a clear message today that the Government debate, which is on Government strategy for the UK are on the side of steelmakers. steel industry. Stephen Doughty: I share my hon. Friend’s disappointment. I asked the Chancellor a question on that issue, and I was disappointed that he chose to make a political point, rather than engage with the serious issues being raised by many hon. Members. 175WH UK Steel Industry3 DECEMBER 2014 UK Steel Industry 176WH

I want to focus on a number of strategic issues. many of my colleagues and the French and German Whether it is energy prices, taxation, foreign dumping, Governments, but actions speak louder than words. uncertain future ownership or the lack of clarity in the Where the UK Government has failed to act robustly UK’s industrial and infrastructure strategies, it is crucial and urgently to level the playing field, others around the for the sake of our future industrial and manufacturing world have been taking action, including Germany and capacity, as well as for jobs across the UK, that the steel France. Unfortunately, that is leaving the UK at a industry has urgent, robust and bold action from the disadvantage. As a close observer of what happens on Government, not caution and bureaucratic handwringing the continent, the Minister might know that the French alongside many warm words that make little difference Senate recently debated finding a mechanism to fix the in practice. electricity cost for energy-intensive users at a maximum of ¤30 per megawatt-hour, compared with the ¤73.50 per Jessica Morden (Newport East) (Lab): Because of the megawatt-hour in the UK. That is a stark contrast. challenges facing the steel industry, steelworkers have The Minister might be aware that there has been had to adapt, accepting changes to their terms and extensive correspondence between the Department for conditions and rising to the challenge of hitting the Business, Innovation and Skills and me and other Members targets that companies have set them in difficult times. on these issues. The announcements in the Budget earlier Does my hon. Friend agree that announcing some this year on an energy-intensive industries compensation support for the steel industry is all very well, but delivering package were welcome, but many of the measures will on it is crucial for steelworkers, who have worked so have no immediate impact, which presents a serious risk. hard in difficult times in constituencies such as mine? My hon. Friend the Member for Newport East (Jessica Morden) mentioned this issue. I was deeply disappointed Stephen Doughty: That is absolutely the case. My by the Chancellor’s answer today. I simply asked whether hon. Friend speaks about her constituency; employers he was content with the decision—I had been told that at Celsa in my constituency have taken some hard the Minister for Business and Enterprise, the right hon. decisions to ensure that the company continues to thrive Member for West Suffolk (Matthew Hancock), would and go forward. We need that kind of commitment be responding to the debate, and I am disappointed that from the Government, too. he is not here—that he and that Minister made not to The steel industry does not need posturing or the bring forward that package. That decision is deeply erection of barriers to trade or unjustified protection disappointing to many of the steel producers in this country. from fair competition; it is simply asking for action to I am sure that the Minister has received many bulging level the playing field and ensure that we do not offshore red boxes full of cautious and bureaucratic advice from carbon emissions or contract out our potential domestic officials on the issue, but it is ultimately a political growth generation to such places as China and Turkey. decision for Ministers to interpret European guidelines and decide whether there is a possibility of retrospective Andy McDonald (Middlesbrough) (Lab): Does my exemption and renewable sources support compensation. hon. Friend agree that there is terrific knowledge, skill, The bottom line for our steel producers is that in innovation and expertise within the Community union? practical terms many of them are paying more taxes Tata Steel would be well served if it exploited that than they paid three years ago. They are finding themselves collective wisdom and experience, because that could be at a growing competitive disadvantage. The Minister’s the solution to keeping its operation intact and thriving. cautious approach stands in stark contrast to the proactive and decisive one taken by Ministers in other EU member Stephen Doughty: I wholeheartedly agree. My hon. states. I am sincerely asking whether he and his ministerial Friend mentions the Community union, which has many colleagues will take another look at this crucial issue. members in my constituency and those of other Members present. It provided a helpful briefing for this debate Nia Griffith (Llanelli) (Lab): Does my hon. Friend and continues to speak out with a strong voice on these agree that it was the unilateral imposition of the carbon issues. Community estimates that the energy prices faced floor price at a particular rate that has caused the by UK steel producers can be 50% higher than those problems? The steel industry is not asking for charity; it faced by our main European competitors, such as Germany. is simply asking for a level playing field. We want the The Minister might not be aware of this, but green situation put right as soon as possible. levies in the UK are two to three times higher than those faced by European competitors. Stephen Doughty: I wholeheartedly agree with my I firmly believe that we need a responsible and supported hon. Friend’s points. transition to a low-carbon economy, but it would be On another issue, the Minister here today will know absurd if ill-fitting policies for this and other energy-intensive that business rates are one of the few taxes that are industries resulted in carbon leakage that leads to higher non-cyclical and fixed at a level irrespective of economic global carbon emissions. The Celsa plant in my constituency or market conditions. As such, business rates are treated uses recycled steel in a carbon-efficient process, and it by industry as a fixed cost, which is given much greater would be a tragedy if some of that production was lost prominence when making investment decisions. According to China, where the same carbon emissions standards to the industry, the fact that business rates are five to 10 and local environment standards would not be followed. times higher in the UK than in EU counterparts represents Earlier this year, the Chancellor said that manufacturing a significant comparative distortion that undermines continues to play a key role in the UK’s economic the UK as a destination for investment. recovery, but that the cost of energy acutely impacts on Will the Minister say whether any consideration has the international competitiveness of the sector, particularly been given to removing plant and machinery from the for energy-intensive industries. I agree, as I am sure do business rates valuations? What about alternative 177WH UK Steel Industry3 DECEMBER 2014 UK Steel Industry 178WH

[Stephen Doughty] Stephen Doughty: I wholeheartedly agree; I was disappointed by the Ministers’ response. Like many approaches for large-scale manufacturers, with a view others here, I saw a glimmer of hope when the Secretary to adopting a simplified model based on capital values of State for Business, Innovation and Skills responded rather than hypothetical rental values? to a question on that from my hon. Friend the Member I come to foreign dumping, responsible sourcing and for Hartlepool, who is sitting here. The right hon. supply-chain access, huge issues for UK-based steel Gentleman said that there would potentially be an producers—and the environment is changing all the inquiry into the testing process of rebar steel. However, time. We have been shown some shocking statistics. I since then we have been told—not only publicly, but in mentioned the reinforcing bar produced by Celsa in my answer to parliamentary questions and informally—that constituency. Hopefully, the Minister has seen the data the Secretary of State misspoke, and the executive director that show that imports from China now account for of CARES has said that it has not been contacted by more than a third of overall UK market share, which is the Government. a dramatic increase in recent years; the figures for this I hope that the Secretary of State did not misspeak, year show an even greater increase. We also see problems but if he did, perhaps the Minister can clarify the with imports from Turkey. situation. More importantly, will such an inquiry be There are also questions about traceability in the considered? Ultimately, people want to see one because supply chain and the fact that the classification of such they want to know that the steel products being used are products often does not meet British standards. In the safe, sustainable and responsibly sourced. extreme, that has potentially serious implications for the future structural integrity of buildings or infrastructure Lilian Greenwood (Nottingham South) (Lab): My projects in which non-compliant rebar or other steel hon. Friend is making a powerful case. Given that products have been used. Network Rail is due to invest billions of pounds in track renewals and that major rail infrastructure such The UK Certification Authority for Reinforcing Steels as Crossrail, High Speed 2 and possibly Crossrail 2 are has been too slow and ineffective in its response to date. coming up, is it not shocking that the future of Tata’s Quite frankly, the Government’s response has also been long products steelworks at Scunthorpe, which I have disappointingly slow, given that I understand that visited and produces much of the UK’s high quality misclassification was raised at the steel contact group in rail, is so uncertain? October 2013 and again in June 2014. Stephen Doughty: My hon. Friend makes a crucial Tom Blenkinsop (Middlesbrough South and East point about not just the industry, but the crucial Cleveland) (Lab): My hon. Friend is making an excellent infrastructure projects, especially in transport, that it point about the importance of manufacturing to his supports. It is crucial that we get that right. constituency. We know that Celsa was built under the tenure of the previous Labour Government, much like I mentioned Celsa’s contribution to the Crossrail the blast furnace at the Redcar steelworks near my project. The only responsible sourcing scheme in the constituency that was built under the Callaghan Labour UK that guarantees cradle-to-grave traceability for Government. We are potentially on the verge of putting construction steel products is BS 6001, which was crucial 46% of Britain’s steel making in limbo. We need strong to Crossrail. Will the Minister say whether the Government opposition from the Government in relation to Celsa as intend to ensure that all public projects apply the same well as Scunthorpe’s four-blast-furnace operation. We standard in a timely fashion? need clear direction and a clear message from the Ultimately, each of the issues and concerns that we Government about what steel production will look like have raised can be considered on their own, but there is in the future. an increasingly apparent need for a detailed, workable industrial strategy for metals, including steel. The Minister Stephen Doughty: I thank my hon. Friend for those might jump to his feet in a moment and cite the development well made points; I wholeheartedly agree with them. On of a UK metal strategy as showing that the Government traceability and the quality of products used, the are on the case, but by all accounts, that is still in its Government could do something right away: ensure early development stages and is not even guaranteed to that all Government or Government-backed projects receive official backing, despite being funded by BIS. have a robust, responsible sourcing requirement. Indeed, we are more than four and a half years into a As I have said before, although the Government’s sector- Government who chose not to include the metals industry by-sector approach is welcome, it must be dramatically among its sector-specific industrial strategy and who accelerated. That would, without doubt, serve to stem now, quite frankly, are playing catch-up. We have talked some of the questions about safety and sustainability about procurement and other investment decisions, but rightly coming from concerned people inside and outside the UK cannot afford to lose out on major public the industry. Reports that Chinese rebar has been failing infrastructure projects, as Community made clear was British standards tests coupled with the news that one the case with the £790 million contract to supply steel third of rebar used on UK sites is Chinese should have for the new Forth road bridge. Tata steel’s plant just red lights flashing on ministerial dashboards, not only down the road could have supplied more than one third in BIS but in other Departments. of the required steel, but instead the contract went to producers in China, Poland and Spain. Nia Griffith: Does my hon. Friend share my disappointment that Ministers, in their reply to the steel Tom Blenkinsop: The Minister will probably also group, rather brushed aside any option to intervene in agree that that was primarily the responsibility of the what CARES is doing? Will he reiterate to this Minister Scottish Executive, who did not play their part in trying the need for them to look at that thoroughly? to support the local Scottish industry. It would be 179WH UK Steel Industry3 DECEMBER 2014 UK Steel Industry 180WH interesting to hear the Minister’s response on what the UK I congratulate the hon. Member for Cardiff South Government said to the Scottish Government at a time and Penarth (Stephen Doughty) on securing the debate, of trying to support UK steel rather than Chinese imports. which is the second one I have done on British steel. It is always reassuring to see the passion and knowledge of Stephen Doughty: My hon. Friend makes a strong the Labour Members in the Chamber, who represent point and I would be interested to know the answer to many different steel interests in their constituencies. that question as well. Many steelworkers and those who I hope that the House will not take it amiss if I also thank work in related industries throughout the UK want to in person once again the hon. Member for Middlesbrough see the Government standing up and backing the steel South and East Cleveland (Tom Blenkinsop), who was and metals industries here—not seeing major projects kind enough in a previous debate to mention my late that could be generating wealth, jobs and opportunities father’s work, “The History of British Steel”, because it in this country all ending up with Chinese products. I is the 40th anniversary of the publication of that seminal have already raised concerns about the quality and work. traceability of some of those products. In conclusion, I will ask the Minister a few questions Mr Iain Wright (Hartlepool) (Lab): Will it be reprinted? on which I would appreciate answers. I mentioned dumping by China and Turkey. Will he outline what Mr Vaizey: It will be if this level of interest in the representations Ministers at BIS have made to other House is maintained. This year is also the 30th anniversary EU member states, the European Commission and the of my father’s death, and it is nice that he can be Council on support for an anti-dumping measure? mentioned in Hansard, because he was a Member of the Will the Minister outline whether there have been other place, thanks to Harold Wilson. discussions on a UK Government responsible-sourcing requirement? Would he be willing to facilitate a meeting Stephen Doughty: The Minister mentioned that this between the Chancellor of the Exchequer and colleagues was the second time that he had had to respond to a concerned about these issues to discuss the use of steel steel debate. I appreciate that his family has a strong in UK infrastructure projects and how procurement tradition in such matters—I enjoyed hearing about it in can drive the future of the industry? a previous debate—but where is the Minister responsible Will the Minister clarify what assessment the Department for the issue today and why has he not been present now has made of reports that Chinese rebar has failed at two such debates? British standards tests, given that much of the steel used in the past year on UK sites has been Chinese? Has he Mr Vaizey: Hansard has on the record the reason why had discussions with other Departments about any my right hon. Friend the Minister for Business and risks to the future structural integrity of building and Enterprise could not attend the previous debate. I gather other infrastructure projects? that today he is assisting the Chancellor with the autumn As I said earlier, will the Minister, with his colleagues, statement, because his brief covers a wide range of be generous and look again at the decision not to bring issues. Indeed, Mr Davies, you are an expert on the forward compensation packages to January 2015? That working relationship between the Chancellor and the is crucial. Will he detail what discussions there have Minister for Business and Enterprise. been in BIS on that and why it was decided not, for example, to make an encouraging announcement on Nic Dakin: Are we to understand that the Minister is that today in the autumn statement? now the Minister for steel, because he has shown far We have mentioned China and Turkey.Will the Minister more steel on the issue than the Minister to whom he give an assessment of reports that India is now also was just referring? looking at subsidising its steel industry to compete with cheaper Chinese imports? What assessment has been Mr Vaizey: I do not wish to sound churlish, but it is made of the US Department of Commerce’s decision to said that one should be beware of Greeks bearing gifts, impose anti-dumping and anti-subsidy duties on imports and one should also be beware of Labour Members, of carbon and alloy steel wire rod from China in reaction however much one admires them, bearing compliments. to a massive increase in its shipment? The hon. Member for Cardiff South and Penarth is Any one of the issues that I have outlined, in addition working hard to secure a long-term future for the steel to those that I have not had time to mention, is enough industry in his constituency. He has been an assiduous to put serious strain on any business, but the cumulative champion for Celsa and has facilitated meetings between effect is a matter of grave concern to the British steel it and Ministers. I picked up on about nine points made industry. The risks are real and the threats are intensifying, by hon. Members during the course of the debate, but so urgent and robust action is required from the he left me with five or six specific questions, mostly Government. If capacity is put at risk, that could have focusing on efforts to mitigate the impact of high energy serious consequences not only for the jobs and communities prices and of competition, which from his perspective is that depend on those industries, but for UK infrastructure unfair—I hope that I am not speaking out of turn in priorities. I hope that today the Minister will give some putting it that way—and on what the Government are encouragement to UK steel producers and their employees. doing about things. He also asked about the future strategy for the steel industry. 4.19 pm I have quite a long speech, but the hon. Gentleman The Minister for Culture and the Digital Economy spoke rapidly, if clearly, and the time left to me is not (Mr Edward Vaizey): It is a pleasure to see you in the long, especially given the level of interest in the debate. I Chair, Mr Davies, if a little disconcerting. I look forward will try to pack in as much in the short period available to participating in the debate under your chairmanship. as he managed. 181WH UK Steel Industry3 DECEMBER 2014 UK Steel Industry 182WH

[Mr Vaizey] commenting from a sedentary position, would like to say why the Scottish Executive procured from China, It is well known that the steel industry is cyclical, and Poland and other markets. we also know that it has faced particular difficulties in the past few years, especially with the economic downturn Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) having a major impact on construction, leading to (SNP): I only wanted to ensure that the Minister knew overcapacity and severe competition throughout the the difference between the Executive and the Government. world. It is worth saying, as I did in the previous debate, “The Executive” is what Labour did not have the courage that the UK remains a significant player in the global to call their Government in the past; “the Government” steel market. We have replaced France as Europe’s is what exists now. second largest producer of steel and we have overtaken Italy. It is worth remembering that we continue to Mr Vaizey: We are disappearing down a particular manufacture to a high level in this country. Scottish cul-de-sac. I will leave that as an argument My right hon. Friends the Minister for Business and between the Scottish National and Labour parties. Enterprise and the Secretary of State for Wales met the We are working to strengthen existing supply chains hon. Member for Cardiff South and Penarth and by encouraging primes to adopt a collaborative and representatives of Celsa to talk about the company’s long-term approach to their suppliers. The hon. Member concerns, in particular the policy issues, which it is for Cardiff South and Penarth discussed Chinese imports important to note affect many other steel companies in of rebar. The United Kingdom Accreditation Service the UK as well. The Minister for Business and Enterprise looked at the complaint by UK Steel and concluded replied at the beginning of this week to the letter that that CARES had responded in an appropriate way to was sent out by Celsa following that meeting. the concerns expressed in line with the expectations and The first major issue raised at the meeting and in the requirements of the accreditation standard. I can tell debate today was compensation for energy-intensive him, however, that there has been an increase in vigilance industries for the indirect costs of the European Union on the part of CARES, with increased sampling and emissions trading scheme and the carbon price floor. more checks. We have also been advised that, as a result The hon. Member for Cardiff South and Penarth knows of ongoing discussions between CARES and UK Steel, that the Government are trying to compensate electricity- and of the further testing of some non-compliant imports, intensive industries for the indirect costs of the renewables CARES visited the Chinese steel mill concerned. CARES obligation and the feed-in tariff. We are also seeking to conducted further sampling and testing, but it did not exempt EIIs from the costs of the contract for difference. find evidence to stop production being non-compliant. On that basis, we genuinely think that we are doing The mitigation has not been brought forward, because everything possible, although we may be able to do we need to seek state aid clearance from the European more if the industry provides us with additional evidence Commission. It took 18 months to obtain Commission of what it thinks that we should investigate. state aid clearance for the carbon price floor. The hon. Gentleman and Celsa would perhaps like to see the Tom Blenkinsop: The issue of whether it was a Scottish Government being what they might describe as more Government or an Executive who sold steel workers in robust, but clear state aid clearance is important. As he Motherwell and the rest of the UK down the Yangtse is knows, if aid is provided before state aid approval is irrelevant. The real issue is whether the Secretary of given, technically that would be illegal and we run the State for Business, Innovation and Skills has an ongoing risk, if approval is not given, that the company would inquiry. If so, is it looking at the steel products that are have to pay back the state aid. That is the reason. I am sitting on dockyards or in warehouses for more than sure that the Chancellor, if he could wave a magic 12 months at a time, rusting away and undermining any wand, would wish to bring forward mitigation, but we usage in a construction project, because of health and have to go through the process. safety? The hon. Member for Cardiff South and Penarth also talked about procurement. We have greater transparency Mr Vaizey: I will take that specific point back to the of opportunities through the publication of procurement Secretary of State. As I said, there have been discussions pipelines, which now cover 19 sectors. We have a simpler between UK Steel, UKAS and CARES. The Government public procurement system; we have abolished the pre- take an interest in such issues. We will go back to those qualification questionnaires for low-value contracts; and organisations if there is appropriate additional information. we help suppliers to find contract opportunities via a Let me comment on anti-dumping quickly, because single online portal. We are working with industry to time is running out. We have been in contact with the map supplier capabilities. We want to quantify the European Commission on a number of occasions over opportunity that exists to maximise the economic benefit the past year. We have had face-to-face meetings and we for the UK—of course we do. Where there are capability have asked the Commission to look at the case for gaps, sectors will encourage domestic suppliers to expand launching an anti-dumping investigation into Chinese to fill them, with support from the Manufacturing rebar imports. The problem is simply that Chinese rebar Advisory Service. is only being exported, as I understand it, to the UK The hon. Member for Middlesbrough South and East market and anti-dumping actions are taken at the European Cleveland tried to tempt me to have a pop at the level, which presents serious legal difficulties for the Scottish Executive over the Forth bridge. My understanding Commission. We think, however, that the Commission is that the approaches to the bridge are to use British is genuinely trying to find a way round the problems. We Tata steel, but I cannot comment on the procurement check regularly with it on progress and encourage it to process of the Scottish Executive—[Interruption.] Perhaps take action, but at this stage a more aggressive approach the hon. Member for Na h-Eileanan an Iar (Mr MacNeil), might be unproductive. 183WH 3 DECEMBER 2014 Coastguard Centres (Staffing) 184WH

Coastguard Centres (Staffing) Mr MacNeil: I am grateful for the hon. Gentleman’s intervention. He will recall, I think, that the word I used about Stornoway was relief. To see that the stations in 4.30 pm Forth, Clyde, Crosby and other areas were to close and Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) the jobs of professionals with years of expertise under (SNP): It is a pleasure to serve under your chairmanship, their belts were to be lost brought no pleasure at all—in Mr Davies, in the last, but I hope by no means the least, fact, it brought great sadness. I am interested to hear debate of the day. I look forward to hearing the response what he said about staff, because I am coming on to from the Department for Transport on the issues I will that point. If there are surplus staff somewhere, the raise. Maritime and Coastguard Agency might consider that It is now about three years since the coastguard went fact when dealing with some of the problems I will be through the upheaval of reorganisation, changes and highlighting. closures, onwards towards its new structure. Of course I It has been three years since the reorganisation, so we mourn the loss to Scotland of the Clyde and Forth would have thought that most of the changes would coastguard stations. Scotland has 66% of the UK’s have been brought through by now and the organisation coastline, but, alas, only 33% of the coastguard stations. would be running as smoothly as it could and should I am glad that we managed to save Stornoway station, be. Many people would expect the changes to have which is now a very important coastguard station. It bedded down, yet reports have come to my ears—actually, has a search and rescue helicopter—at one point, it had to my eyes—of one coastguard officer saying to another, an emergency towing vessel, a tugboat—and is located “Let’s hope the latest Minister does something, because in an important sea area. I am glad that we also still the whole issue—the closure of stations, the loss of have in Scotland the Shetland and Aberdeen stations. experienced staff, the undermanning—is a disaster waiting Stornoway is located between Belfast to the south to happen.” Those are strong words—not my words, I and Shetland to the north, and covers a large sea area, stress, but words I feel need to be checked up on. not least because the next station to the west—perhaps the one direction I have not yet mentioned—is in Canada. We must remember the value of our coastguard staff, Stornoway station’s area of responsibility covers about as the hon. Member for Sefton Central (Bill Esterson) 250,000 square miles of sea, and meets the Canadians’ pointed out with regard to the staff in Crosby, who area at 30° west, about a time zone and a half away; sadly lost their station. We know they are trained to a Stornoway lies about 7° west. I had thought that Shetland high standard and that their professionalism is exemplary. station’s area of responsibility would be larger, but the I know that not just from visiting coastguard stations as Faroe Islands lie to its west and Norway to the east and an MP but from an earlier life working on fishing boats, north. and travelling regularly on ferries as I do, I am aware of Those are just a few facts that can be found out by yet another aspect of the work of coastguard staff. your average MP when they visit the local coastguard Each time I have been in the wheelhouse of a fishing station. I bring them to hon. Members’ attention because boat or on the bridge of a passenger ferry and the words they emphasise the international aspect of maritime “Stornoway coastguard” have come over the radio, that activity, which could doubtless be further underlined by radio has been turned up and there has been silence the station to our south, Belfast, which no doubt deals from those assembled within earshot, because, nearly with coastguard colleagues in other jurisdictions such always, serious and important words are coming across as the Isle of Man and the Republic of Ireland. the airwaves. As I said, it is now over three years since the How are those in the stations—the people broadcasting announcement that, importantly for me, confirmed that into the wheelhouses of fishing boats and the bridges of the hard work had paid off and Stornoway coastguard passenger ferries—faring at the moment? No one would station was saved. The date was 22 November 2011, and know it from the professionalism that I hear coming over it was a Tuesday—one that brought great relief not just the radio, but in reality, although they may not show the to me but to those working at the station and people strain, it seems that the stresses are most certainly there. round about. We kept our coastal maritime expertise in When I visited Stornoway coastguard recently, the watch Stornoway, and with it the associated local knowledge was at 75% of its strength. That brings us back to the and jobs, as well as the intimate interaction with our point about Crosby. There is problem with staffing, and local fishing community. people are working overtime to cover a shortage of staff—it is a regular occurrence. Some retired coastguard Bill Esterson (Sefton Central) (Lab): I do not want to officers are coming in to help out, if only for a limited take away from what the hon. Gentleman has said time due to the restrictions on what they can earn, and about the people of Stornoway, but on that same date their expertise is still looked to. The demands on present the people of Crosby coastguard station had exactly the staff are high. opposite reaction, because of the announcement of the closure of that station with the loss of jobs unless I have good news for the Minister. I am sure he will be people were prepared to relocate to either Southampton pleased to know that fortunately there are many people or, in some cases, Holyhead. The subject he has chosen waiting to join the coastguard service. Sadly, I have not for his debate is the staffing of coastguard stations, and got much more good news than that—that is where the I am interested to hear what he has to say on that point. good news ends. Perhaps, by extension, we could say Many of the staff at Crosby have not been able to that the fact that 60 or so people came to Stornoway transfer, and grave concerns have been raised with me coastguard station in May and June to apply to join the about the standard of recruitment and training of service is good news, but six months later there is still a replacement staff. Have similar points been raised with shortage of staff, and none of those people have been him? appointed. I am told that that pattern is being repeated 185WH Coastguard Centres (Staffing)3 DECEMBER 2014 Coastguard Centres (Staffing) 186WH

[Mr MacNeil] that she would have to wait many months, until February, without salaried employment while she waited to start across the service; in fact, some at Stornoway would the job with the coastguard. argue that their situation is better than that at many other stations. Bill Esterson: The hon. Gentleman is raising some The problem has lasted for sixth months and is set to worrying examples, and I can add to them because go on until February. That means the MCA’s recruitment information given to me suggests that existing coastguard process for the coastguard will have taken eight months staff have felt criticised by senior agency management—so in total. And there is more: although three staff are in much so that some of them have left, which perhaps the pipeline for Stornoway—they are due to start in explains some of the evidence he gave earlier. That February—the reality is that eight more are needed and concerns me not just in terms of what is going on with the glacial pace of recruitment could go on for ever. the closure at Liverpool, but what is happening at Can anything be done? There are indeed things that Fareham and elsewhere and the knock-on effect on the can be done, which were identified quite quickly by the service’s ability to deliver. It does not bode well if staff I have met—these ideas are not mine, but are quality and experienced staff are being criticised. emerging within the coastguard. The bottleneck seems to be the fact that new recruits cannot start until they go Mr MacNeil: I thank the hon. Gentleman for his to training, which takes place in Fareham or perhaps intervention. I have some evidence that I was not going Highcliff. There are certain dates set aside in March and to use because I thought there was not enough support new recruits can start at their stations six weeks before, behind it. Essentially, it is an e-mail containing implied hence the eight-month delay. However, there will be a criticism of existing staff, saying that there were better, knock-on effect. When will the next opportunity be? more highly trained, more experienced or higher quality Surely the Minister and the MCA either have to look to staff—I cannot remember the exact words—and existing increase training so it starts at more regular intervals, in staff felt undermined by that. I will be charitable and order to shorten the recruitment period, or else think of say that that was unfortunate, but there seems to be more another solution so that stations are not left with such than one example, or it may be the same example in many stresses on the shoulders of their watch staff—stresses places, but it is unfortunate that the situation arose. that have obvious knock-on effects on morale. I return to the new recruit at Stornoway. I cannot The most obvious solution would be to let new help but think that that person has been mucked about recruits into the operations room once they have been by the MCA system—I will be kind and say that it is the through the application process and have been accepted, system. We cannot treat grown adults, whom we trust to so that they can do most of their training in there. run one of our most important emergency services, like Coastguard officers—seasoned people with a wealth of that and expect them to go months without paid knowledge under their belts—tell me that that is where employment because of the MCA’s procedures not being most of the training occurs anyway. The training centre clear during the recruitment. helps to top and tail those skills; it is a useful check on I have outlined some of the problems of undermanning quality, and is useful, too, as a refresher course. in the ops room and taking in retired people, but there The current situation cannot be allowed to fester—that are other knock-on effects. Coastguard volunteers around is how it feels to many at the moment. Some in the service our coast are also affected. Some people are destined to feel that it could be a cack-handed way to save money, leave the operations room to train volunteer coastguards but I am not sure it is that sophisticated. I would not say and to give them the training they deserve and the it is incompetence. Perhaps it is mismanagement, or I professionalism that anyone who is ever in need of their might be a bit kinder and say that it is not mismanagement services deserves, but they cannot leave the operations but people cleaving to a system and a model idealised room because of the demands there, so one of the for some time, which they think should be delivering for knock-on effects is that that training is not happening. the coastguard. However, it is not—it is simply not Those who would oversee development of the volunteer cutting the mustard. teams cannot be in place due to the glacial recruitment issues. Courses that should be happening in rope rescue, Jim Shannon (Strangford) (DUP): The coastguard water rescue, first aid, land search, and equipment station at Bangor in Northern Ireland was saved when control and maintenance, to name but a few of the the last changes took place. I was aware earlier this year 20 courses in the guide, are not happening and cannot of issues similar to those outlined by the hon. Gentleman happen. We are back at the root of the problem, which at Stornoway. Action was taken in Belfast and at Bangor is getting people into the service in a timely, speedy, coastguard station in regard to issues of sickness and correct and clear manner. This is not good for morale. overtime, and I understand that those matters have I may have sounded critical of the MCA and operations been addressed. When changes have taken place successfully, within the coastguard, but I do not mean to. There has that might be a precedent for what to do in Stornoway. been a general pattern of events in the coastguard service over the last few years and I have been critical, Mr MacNeil: I thank the hon. Gentleman. I understand but although I am still being critical today, I hope that from what he says that, unfortunately, Stornoway is not the criticism is constructive. We would all like nothing the only place affected like this, but I am pleased to hear better than to have a properly functioning coastguard that Bangor had a successful localised approach. service. It is important to get to grips with that goal, The situation facing some of us is an eight-month and it could be happening, but it is not. delay, which has had an unfortunate result for at least I want to spend a few moments putting on the record one new recruit, who gave up her job when she accepted the importance of another aspect of guarding the coasts: the coastguard job, only for it to become apparent later emergency tug vessels. I want the Minister to understand 187WH Coastguard Centres (Staffing)3 DECEMBER 2014 Coastguard Centres (Staffing) 188WH the seriousness with which we on the west coast of them on all they do to keep our shores and our people Scotland regard them. We have nuclear movements safe, not only the professionals, but the volunteers. They going through the Minch—the stretch of water between deserve a particular mention because in my constituency the Hebrides and the mainland. The Minch is used by and in constituencies of other hon. Members here, boats carrying nuclear material from Scrabster near volunteer coastguards do a superb job. Dounreay to the reprocessing facility at Sellafield, and The provision of search and rescue is an obligation we certainly do not want to contemplate one of those enshrined in international law and convention, including boats with that cargo requiring assistance, but the possibility the UN convention on the law of the sea and the exists. We also have fuel tankers, and those of us who do international convention on maritime search and rescue. a bit of maritime trainspotting with the automatic The UK coastguard service’s area of operation extends identification system online often see tankers transiting as far west as the mid-Atlantic and in all other directions north and south of the Hebrides between Tranmere and to internationally agreed meridians. Mongstad in Norway. They carry fuel into some of the Picking up the hon. Gentleman’s last point, national roughest European waters. We also have cruise ships in coastguard services must operate across international ever increasing numbers, and the coastguards tell me boundaries to provide a search and rescue capability that these sometimes carry the same amount of fuel as a that is most appropriate in each incident at sea. The tanker, which surprised me. They also carry something commitment from all professional coastguards is to else very important: passengers. There are many people’s protect and to save using whatever assets and resources lives at stake, and we do not want one of those ships are available, even those that may belong to other losing power along the rocky coastline of Scotland’s national authorities. Fear, risk, safety and rescue know west coast. no national boundaries and it is important to remember If there are problems on the west coast, we will not be that that has always been the way and the habit of our ready to tackle them like other nations, which take their coastguards. responsibilities seriously and have plans in place to deal From December 2010, this Government entered extensive with problems. We have been told that we could get a consultations to find a way of addressing combined tug from the oilfields west of Shetland and north of the challenges: resilience, preventing skills-fade, improving Hebrides, but to my knowledge no simulation of a the job offer for coastguard officers, and giving greater tanker or cruise ship in trouble has been carried out at leadership and training support to community volunteers the drop of a hat so that we have some experience of that make up the coastguard rescue service. Hon. Members, what would happen in real time trying to source one of and particularly the Select Committee on Transport, those boats. I ask that such an exercise should take were very much involved in those discussions and the place. I fear that it will not happen and that our first consultation, and helped to shape the blueprint that we experience will be an emergency. announced in November 2011. That was further refined I have a couple of final points. I mentioned the in September 2013, because it took longer than we all Faroes, Norway, the Republic Ireland, the Isle of Man hoped to agree new pay arrangements to reflect properly and Canada—the internationalisation of the coastguard. the different roles and responsibilities of coastguards I am disappointed that the Smith commission on Scottish working in co-ordination centres. devolution has left only a consultative role for the Scottish The unions were properly and heavily involved in that Government. The issues I have brought to the fore would process, as they should be. I work closely, and always be dealt with faster and better in Edinburgh. As we saw have as a Minister, with the trade unions that relate to today in the autumn statement, some of the things that the sector for which I am responsible. have happened in Edinburgh, such as on stamp duty, have been a good example and have been copied. We have nothing to fear from devolution and control by Bill Esterson: The Minister is absolutely right to Government outside Westminster. Sometimes, it may be praise the volunteers, who do a fantastic job in my for the benefit of us all. constituency, as in his. I am sure he is aware of a point that was made in arguing the case against the closures—I As I said at the start, Scotland has 60% of the UK’s am looking at the 2011 report from Crosby. What coastline but only 33% of the coastguard stations. Those assurances can he give about the relationships between coastguard stations are undermanned. I hope that if officers in the MCA and those volunteers where coastguard anything comes out of this debate, it will be that the stations have closed, as they have in my constituency? Minister looks at the system so that we do not have the same situation in a year, and after four years a new Mr Hayes: I take that relationship very seriously system will have bedded down and we will have the indeed. I have already celebrated, in this all too short necessary manpower in the coastguard station at Stornoway contribution, the work of those volunteers, and I see so that people do not suffer stress, can do their job them as being critically important to the link between professionally, and are released from the operations the coastguard service and the community. They are room to train volunteer coastguards. model examples of how voluntary involvement can not only enliven communities, but provide vital services. I 4.47 pm take the relationship very seriously, and under this The Minister of State, Department for Transport (Mr John Minister, it will always be taken in that way. Hayes): It is an immense joy, Mr Davies, to serve under Nevertheless, as the hon. Gentleman will know, the your illustrious and benevolent chairmanship. I am national network, made up of a new National Maritime pleased that the hon. Gentleman secured this debate on Operations Centre in Hampshire and a series of an important issue. It is important because coastguards geographically spread coastguard operation centres that, are important. Their work is immensely valuable and I in effect, retain each of the existing paired sites, has want to take this opportunity to thank and congratulate been the product of the consultation that we described. 189WH Coastguard Centres (Staffing)3 DECEMBER 2014 Coastguard Centres (Staffing) 190WH

[Mr Hayes] I appreciate that there are always issues with this kind of radical programme, but I want to assure the House The retained sites would move progressively into the that after each transitional closure, there is a period of national network over time until December 2015, whereas review, to learn lessons and improve the process before other centres would either close completely or would moving on to the next transition. I can further reassure remain open but would no longer be responsible for the House that I will continue my regular face-to-face search and rescue co-ordination. meetings with Sir Alan Massey and HM Coastguard The blueprint included new and exciting coastguard officers to scrutinise and challenge the agency’s progress roles and responsibilities with improved pay and terms against that blueprint, including monitoring any particular and conditions. As I said, the unions were involved in pressure points, so that we can all have confidence that developing that package for coastguard roles, which, for Her Majesty’s Coastguard continues to deliver the first-class example, would see shift patterns redesigned to reflect service that we have all come to expect. It is absolutely better seasonal demands, and with more weekends off right to examine and review this process to ensure the over a year. In the union ballot, 79% of those who voted effectiveness at the point of need that I have described, supported acceptance of the new terms and conditions. in line with some of the arguments that the hon. Member for Na h-Eileanan an Iar has made in this debate. The Maritime and Coastguard Agency has moved on a long way from the concept phase of this programme. The new coastguard roles and responsibilities are more We are now making real progress in establishing a demanding, and I am delighted that we are taking large joined-up national network for rescue co-ordination. numbers of our existing coastguard officers into the The new National Maritime Operations Centre near new set-up, supplemented by many new recruits. The hon. Fareham became operational from 1 September this Gentleman mentioned recruitment, and he acknowledged year, when it assumed responsibility for coastguard generously that lots of people want to join. functions along the south coast that were previously handled by the Solent and Portland maritime rescue 4.55 pm co-ordination centres. Sitting suspended for a Division in the House. Coastguards at Falmouth now operate in the first of the new breed of refurbished and refreshed coastguard 5.5 pm operations centres, and in effect, joined the national network in October. Just as envisaged by the blueprint On resuming— that we published in November 2011, any coastguard function, including search and rescue, in the areas covered Philip Davies (in the Chair): We have five minutes to by the network can be handled by anyone in that go. network, allowing the national commander at the National Maritime Operations Centre at Fareham to make decisions Mr Hayes: These five minutes will be exciting, because about the distribution of work loads, given the people, we have had a break and are waiting with anticipation resources and experience available. It is that improved for the culmination of this wonderful address. co-ordination, better use of resources and more efficient I want to talk about recruitment, because for the use of skills that lies at the heart of the blueprint and its operations centres the MCA has recruited against 78% implementation. of the roles, while for the roles to support the volunteer I believe that we can maintain and improve what we Coastguard Rescue Service the recruitment figure is do as a result of the changes. If I did not believe that, I 90%. Of the posts that have been filled, only 21% have would not support them. It is as simple as that, because been filled by new recruits; 79% of the vacancies have there is no way that this Minister or this Government been filled by experienced coastguards taking up new would compromise safety or inhibit effectiveness. It is opportunities. That is very important. The need to simply not our intention; it never would be and it never maintain continuity, to take advantage of experience could be. It is important for hon. Members to accept and to ensure that the skills that people have developed that. As the national network evolves, the number of over time play a key part in the new operation seems to officers on duty at a particular site becomes less significant. me to be salient. Measurements of input, in the end, are bound to be less I do understand that there is particular concern about significant than measurements of effect. What matters the adequacy of staffing at some centres that are is how the coastguard operation deals with need at the transitioning into the growing national network. Many point of need. of the concerns expressed by hon. Members stem from the fact that the MCA has undoubtedly found it a Every month, the Maritime and Coastguard Agency challenge to staff existing maritime rescue co-ordination is either moving an existing co-ordination centre into centres to the levels set out in historical watch-keeping the evolving network or ending the search and rescue risk assessments. Those levels were set several years ago function in one of the centres that was earmarked for and erred on the side of caution. closure. I can tell the House that I have had an assurance from Sir Alan Massey and the chief coastguard that there are Mr MacNeil: Will the Minister give way? sufficient officers with the right skills available across each existing pairing arrangement, backed up by additional Mr Hayes: I will not, because I am very short of time. cover, to sustain the comprehensive search and rescue I know the MCA is far from complacent and will service that we would expect. I have made the effort to continue to give the closures and transitions to come challenge the service on that basis; I have asked those the same management, attention and care, so that people, questions and asked to be regularly updated on recruitment their allegiances and emotions are handled with sympathy. and staffing. Hon. Members will understand that getting 191WH Coastguard Centres (Staffing)3 DECEMBER 2014 Coastguard Centres (Staffing) 192WH everyone in place for the new roles, both at co-ordination have at their heart continuing operational effectiveness. centres and on the coast to support our coastguard I regard it as a key responsibility to ensure that that is volunteers, is a complex jigsaw that must be carefully the case. handled in terms of logistics and sequencing. I end by paying tribute to the professionalism and dedication of all those wearing the uniform of Her Mr MacNeil: I would like an undertaking from the Majesty’s Coastguard. They should rightly continue to Minister that he will seek to speed up what has been a be proud of the job that they are doing and look forward glacial process. Eight months is too long. Can he look to being part of a new and exciting future. Transitional at shortening the period so that we do not see the arrangements are always challenging, and new ideas are undermanning in operations rooms that we have seen? sometimes regarded with suspicion, but we must move forward and we must get this right, because we owe it to Mr Hayes: Senior managers closely monitor staffing the future to do so. on a daily basis and take action to ensure that safety is Question put and agreed to. not jeopardised. That is certainly true for a lot of the west coast of Scotland and at Aberdeen. The essence of 5.8 pm the plans that we have put in place is that they must Sitting adjourned.

13WS Written Statements3 DECEMBER 2014 Written Statements 14WS Written Statements Bank loss-relief restriction The Government will introduce legislation in the Wednesday 3 December 2014 Finance Bill 2015 to restrict the use of brought forward losses by banks. The legislation will have effect from 1 April 2015, except for anti-avoidance rules that come TREASURY into effect from 3 December. High pressure, high temperature cluster area allowance Autumn Statement 2014: Measures The Government are introducing legislation to create with Immediate Effect a new cluster area allowance to support the development of high pressure, high temperature projects and encourage The Financial Secretary to the Treasury (Mr David exploration and appraisal activity in the surrounding Gauke): This Government are committed to delivering area or “cluster”. The allowance will exempt a portion a tax system that is fair and promotes growth and of a company’s profits from the supplementary charge. competitiveness. The amount of profit exempt will equal 62.5% of the As part of the autumn statement 2014, the Government qualifying capital expenditure a company incurs in have announced a number of measures to reform stamp relation to a cluster area on or after 3 December 2014. duty, land tax, help tackle tax avoidance, address unfair Inheritance tax exemption for medals and other awards tax outcomes and support investment. The legislation The Government are extending the existing inheritance for these measures will have immediate effect. tax exemption for medals and other decorations that Stamp duty land tax: reform of structure, rates and are awarded for valour or gallantry. From 3 December bands 2014, it will apply to all decorations and medals awarded The Government are introducing legislation which to the armed services or emergency services personnel, reforms stamp duty land tax on purchases of residential and to awards made by the Crown for achievements and property with effect on and after 4 December so that it service in public life. Draft legislation for this measure will be payable at each rate on the portion of the will be published on 10 December. purchase price which falls within each band, rather than Corporate debt at a single rate on the whole transaction value. The The Government are introducing legislation to repeal legislation also amends the rates and thresholds to rules concerning the tax treatment of deferred interest ensure this change is introduced in a fairway. and discounts on debt issued to UK companies by a Corporation tax: restricting relief for internally-generated connected company in a non-qualifying territory. The goodwill transfers between related parties on incorporation repeal will have effect for loans entered into on or after The Government are introducing legislation to restrict 3 December 2014; for loans already existing at that date a company’s corporation tax relief where internally- it will be effective in respect of interest accruing after generated goodwill and customer related intangible assets 31 December 2015. If the creditor or the terms of an are acquired on the incorporation of a related party’s existing loan are changed between 3 December 2014 business. The change will be effective for all acquisitions and 31 December 2015, the repeal will have effect for occurring on or after 3 December 2014 to prevent that loan in respect of interest accruing after the change. forestalling. Further details on the measures listed above can be Capital gains tax: restricting entrepreneurs’ relief for found on the gov.uk website. goodwill on incorporation The Government are introducing legislation to prevent claims for entrepreneurs’ relief on disposals of the DEFENCE reputation and customer relationships associated with a business (the “goodwill”), to a close company to which UN Peacekeeping Force Cyprus (Reservists) the seller is related. The change will be effective for disposals of goodwill on or after 3 December 2014 to prevent forestalling. The Minister for the Armed Forces (Mr Mark Capital gains tax: entrepreneurs’ relief and deferred gains Francois): A new call-out order has been made under With effect from 3 December, the Government will section 56(1 B) of the Reserve Forces Act 1996 allow gains which are eligible for the 10% capital gains to enable reservists to continue to be called into tax rate provided by entrepreneurs’ relief (ER), but permanent service in support of the United Kingdom’s which are instead deferred into investments which qualify contribution to the United Nations peacekeeping force for the enterprise investment scheme, or into investments in Cyprus (UNFICYP). eligible for social investment tax relief, to remain eligible Over 100 reservists have been called out for UN for ER when the gain is realised. Draft legislation for operations in Cyprus over the last 12 months. Over the this measure will be published on 10 December. period this new order will be in force we anticipate Income tax: miscellaneous loss relief calling out similar numbers, who will be fully integrated The Government are introducing legislation to counter with their regular colleagues. The use of reserves in avoidance of income tax involving losses from miscellaneous Cyprus is now considered routine business and is fully transactions. Legislation denying loss relief where a in line with our policy of having more capable, usable, miscellaneous loss, or miscellaneous income, arises from integrated and relevant reserve forces. relevant tax avoidance arrangements will have effect Currently, we plan on calling out only willing and from 3 December 2014. Legislation will also be introduced available reservists who have the support of their employer. with effect from tax year 2015-16 to limit relief to The order takes effect from 11 December 2014 and miscellaneous income of the same type as the loss. ceases to have effect on 10 December 2015. 15WS Written Statements3 DECEMBER 2014 Written Statements 16WS

WORK AND PENSIONS working age welfare spending is forecast to be £3 billion lower in real terms than in 2009-10. Testament to the success of the Government’s long-term economic Welfare plan, there have been significant falls in spending on unemployment, down over £2 billion since the recession; and on out-of-work benefits, back to pre-recession levels The Secretary of State for Work and Pensions (Mr Iain by 2015-16. Duncan Smith): The Government have made significant progress in putting the welfare state on a sustainable Today, the OBR’s first assessment of the welfare cap footing—undertaking major reforms to benefits and shows that the Government are forecast to meet the pensions, in order to restore fairness and restore public welfare cap commitment, in each of the four years finances at the same time. of the forecast period from 2015-16 to 2018-19. The As part of this decisive action, at Budget 2014, the Government are living within the rules of the cap and Government took the unprecedented step of introducing there has been no breach. a cap on welfare. Today, the independent Office for The detail of that assessment is set out in full in the Budget Responsibility (OBR) has confirmed that the OBR’s “Economic and Fiscal Outlook December 2014”. Government are on track to meet the welfare cap This explains that the use of the margin in 2015-16 and commitment. 2016-17 is due to forecast reasons, not policy changes— What is more, the OBR now forecasts welfare spending the margin exists to allow for such fluctuations in the outside the cap to be £2.3 billion a year lower on forecast. As the OBR has set out in the economic and average over the next four years, compared to Budget fiscal outlook, its forecast for the volume of work 2014—contributing to a reduction in the overall welfare capability assessments for employment and support spending forecast in each and every year of the cap allowance has been adjusted downward, and the forecast forecast. of the number of people who are likely to receive PIP This is a marked improvement in exercising discipline has been adjusted upward. These, alongside other changes over welfare spending. Spending in scope of the welfare to the incapacity and disability benefit forecasts, have cap accounts for £1 in every £6 spent by the Government. increased the forecast and result in use of the margin Yet in spite of this, it had never previously been subject in 2015-16 and 2016-17, then falling below the margin to firm controls and was allowed to increase by £48 billion in 2017-18 and 2018-19. However, overall, compared to under the last Government, up from £70 billion to its forecasts at Budget 2014, the OBR has revised welfare £118 billion. This was within an overall welfare bill that spending down by £1.3 billion a year on average up to increased by 60% in real terms, rising even before the 2018-19. recession. Importantly, these reforms are set to save money and This Government’s welfare reforms are set to save deliver efficiencies in the long term. That much is shown nearly £50 billion over this Parliament. But for these by excess spending continually falling over the four-year vital changes, welfare spending was set to be that much period, bringing spending below the level of the welfare higher still. cap in 2017-18 and 2018-19. Instead, by actively managing welfare spending, we Above all, this reflects the full effect of the Government’s have halted the damaging trend of welfare spending action to bring spending back under control, arresting escalating out of control. Overall welfare spending has the growth that was once left to escalate. In future years, been falling as a proportion of GDP since 2012, and the aim must be to continue to exercise discipline and last year fell in real terms for the first time in 16 years rigour in managing welfare spending—as this Government —even while spending on pensioners rose. This year, have committed to do. 3MC Ministerial Corrections3 DECEMBER 2014 Ministerial Corrections 4MC

Andrew Selous: I recognise the seriousness of the Ministerial Correction issue that my hon. Friend correctly raises. The offender absconded on 23 October. The victim liaison unit was Wednesday 3 December 2014 informed of the abscond the next day and tried to contact the one victim who was on the victim contact scheme. They tried her mobile phone number several times but were unable to leave a voicemail. They had JUSTICE not been provided with an e-mail address so sent a letter Prison Transfers (Assessments) at the end of that day. The offender was recaptured a week later and sentenced. However, I recognise the seriousness of what my hon. Friend says, and we will 1. Gordon Henderson (Sittingbourne and Sheppey) make every effort to ensure that victims are informed as (Con): What steps he is taking to ensure that prisoners soon as possible. who have been convicted of a crime of violence are assessed before being transferred from secure [Official Report, 11 November 2014, Vol. 587, c. 1281.] accommodation to an open prison. [905984] Letter of correction from Andrew Selous: An error has been identified in the supplementary answer The Parliamentary Under-Secretary of State for Justice I gave the hon. Member for Sittingbourne and Sheppey (Andrew Selous): Progression to an open prison is never (Gordon Henderson) during Questions to the Secretary automatic; all prisoners undergo regular, mandatory of State for Justice. assessments of their risk of escape or abscond, and the risk of harm to the public, and only those assessed as The correct response should have been: having an acceptable level of risk for lower security conditions can be allocated to an open prison. Andrew Selous: I recognise the seriousness of the issue that my hon. Friend correctly raises. The offender Gordon Henderson: I thank the Minister for that absconded on 23 October. The victim liaison unit was response, but there is another thing that I am concerned informed of the abscond the next day and tried to about. Sabul Miah recently absconded from Stanford contact the one victim who was on the victim contact Hill open prison in my constituency, causing a great scheme. They tried her mobile phone number several deal of upset to the family of the man he was imprisoned times but were unable to leave a voicemail. They were for viciously attacking, particularly given that the first unable to contact the victim via e-mail, as that information they heard of it was when they were contacted by a had not been stored correctly, so sent a letter at the end national newspaper. Would it not be possible for the of the day. The offender was recaptured a week later families of victims of violent crime to be notified and sentenced. However, I recognise the seriousness of immediately by the Prison Service when the perpetrator what my hon. Friend says, and we will make every effort of the crime either is released from prison or absconds? to ensure that victims are informed as soon as possible.

ORAL ANSWERS

Wednesday 3 December 2014

Col. No. Col. No. PRIME MINISTER ...... 293 WALES—continued Engagements...... 293 Cross-border Rail Services ...... 287 Infrastructure Investment...... 284 WALES...... 283 Newport Investment Summit ...... 291 Average Weekly Earnings...... 289 Universal Credit...... 292 Child Care...... 283 Valleys Railway ...... 290 Cross-border Health Treatment ...... 284 WRITTEN STATEMENTS

Wednesday 3 December 2014

Col. No. Col. No. DEFENCE...... 14WS WORK AND PENSIONS ...... 15WS UN Peacekeeping Force Cyprus (Reservists)...... 14WS Welfare...... 15WS TREASURY ...... 13WS Autumn Statement 2014: Measures with Immediate Effect...... 13WS MINISTERIAL CORRECTION

Wednesday 3 December 2014

Col. No. JUSTICE...... 3MC Prison Transfers (Assessments)...... 3MC Members who wish to have the Daily Report of the Debates forwarded to them should give notice at the Vote Office. No proofs of the Daily Reports can be supplied. Corrections which Members suggest for the Bound Volume should be clearly marked in the Daily Report, but not telephoned, and the copy containing the Corrections must be received at the Editor’s Room, House of Commons,

not later than Wednesday 10 December 2014

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CONTENTS

Wednesday 3 December 2014

Oral Answers to Questions [Col. 283] [see index inside back page] Secretary of State for Wales Prime Minister

Autumn Statement [Col. 305] Statement—(Mr George Osborne)

Business of the House [Col. 354] Statement—(Mr Hague)

United Kingdom Parliament (Sovereignty and Jurisdiction over Borders) [Col. 355] Bill presented, and read the First time

Buses (Audio Announcements) [Col. 356] Motion for leave to bring in Bill—(Jim Shannon)—agreed to Bill presented, and read the First time

Taxation of Pensions Bill [Col. 360] As amended, considered; read the Third time and passed

Annual Pension Allowance (Transferred Workers) [Col. 398] Debate on motion for Adjournment

Westminster Hall UK Sea Bass Stocks [Col. 115WH] UK and Gibraltar Prosecuting Authorities [Col. 140WH] Youth Service Provision [Col. 149WH] UK Steel Industry [Col. 174WH] Coastguard Centres (Staffing) [Col. 183WH] Debates on motion for Adjournment

Written Statements [Col. 13WS]

Ministerial Correction [Col. 3MC]

Written Answers to Questions [The written answers can now be found at http://www.parliament.uk/writtenanswers]