Public Service Pensions Bill

House of Commons, 22 April 2013.

John Bercow (Speaker, Buckingham)

I must draw the House’s attention to the fact that financial privilege is involved in Lords amendments 18, 19, 22, 28, 29, 37 to 39, 45, 78, 79, 82, 114, 117, 119 and 127. If the House agrees to the amendments, I will cause an appropriate entry to be made in the Journal.

Schedule 1 — Persons in public service: definitions

Sajid Javid (Conservative, Bromsgrove)

I beg to move, That this House disagrees with Lords amendment 78.

John Bercow (Speaker, Buckingham)

With this it will be convenient to discuss the following:

Lords amendment 79, and Government motion to disagree.

Sajid Javid (Conservative, Bromsgrove)

We return today to the Public Service Pensions Bill, which will put public service pensions on a fair and sustainable footing for generations to come. There was broad support from all parts of the House for this measure, and I am grateful to all those who have voiced an interest in the Bill for their co-operative approach. I would also like to draw the attention of the House to the progress the Bill has made in the other place.

First, when the Bill left this House, the Opposition were concerned about the wide scope of powers to make retrospective changes and to amend primary legislation. The Government understand that concern. Pensions are an important part of scheme members’ future income in retirement. We therefore tabled amendments in the other place to give members or their representatives a complete veto over any significant adverse retrospective change to their pensions and to restrict the powers to amend primary legislation. Furthermore, any Treasury orders for negative revaluation of scheme benefits will now need to be made by the affirmative Commons procedure.

Secondly, the Opposition sought further assurances on the governance elements of the legislation, particularly a requirement in the Bill for employee representatives on scheme boards. Again, I am pleased to report that the Government tabled amendments in the other place to require an equal balance of member and employer representatives, along with an explicit requirement for national scheme advisory boards.

Richard Fuller (Conservative, Bedford)

My hon. Friend is talking about some welcome changes that the Government have made, but there is another party to this contract on pensions. The taxpayer will foot the bill for the unfunded part of the obligations of public sector pensions. Will he assure me—

John Bercow (Speaker, Buckingham)

Order. Will the hon. Gentleman resume his seat? I do not blame him, in the first instance, because the trouble, the mischief, was started, however

inadvertently, by the Minister, who is looking at me with an innocent expression belied by the reality of what he was saying in the debate. This is not a generalised debate; these are narrowly defined matters, and we are considering the relevant amendment, to which, to put it kindly, the hon. Gentleman’s remarks were not altogether adjacent.

Sajid Javid (Conservative, Bromsgrove)

With your guidance, Mr Speaker, which I always take very seriously, I will move directly to Lords amendments 78 and 79.

The Lords amendments would give the civil servants in the MOD fire and police services a normal pension age of 60 in the new schemes. The Government do not believe that this is the correct way forward.

Bob Russell (Liberal Democrat, Colchester)

Is the Minister seriously stating that an MOD police or fire officer should be treated differently from a police or fire officer not employed by the MOD?

Sajid Javid (Conservative, Bromsgrove)

As I make progress and explain the Government’s position, I will come to that point.

The Government do not believe the amendments to be the correct way forward, either for the taxpayer or the forces themselves. I will briefly set out some of the key reasons for our position. Allow me first, however, to reassure both hon. Members and the work forces themselves that the Government understand their concerns. We have listened to the representations and reflected on the discussions in another place, and I want to make it absolutely clear that we recognise the unique position of these work forces and the important role that the defence fire and rescue service and the Ministry of Defence police play.

My colleague Lord Newby met DFRS and MDP officers to talk through their experiences on the ground and the demands of their roles. There is no doubt that these public services deliver a valuable service to the armed forces and the country more generally. The nature of the work they are called on to deliver is often very difficult and at times can be dangerous. On occasion, some members of these work forces might find themselves putting their lives at risk. No one in the House is suggesting otherwise, so let us not be distracted from this important discussion by cherry-picking anecdotes and citing emotive examples of the work involved, because that is not the issue being discussed today.

Simon Hughes (Liberal Democrat, Bermondsey and Old Southwark)

Like many people, I have met representatives of workers in the MOD scheme, and they have referred me to Lord Hutton’s comments that he was not aware of the anomaly and therefore did not address it in his report, but that he was sympathetic. I have seen both sides of the argument. Our noble friend Lord Newby said that he would reflect on the debate in the Lords. Have there been any further conversations with Lord Hutton? In general, my understanding is that the Government are seeking to implement Lord Hutton’s recommendations, but this issue has clearly slipped through the net.

Sajid Javid (Conservative, Bromsgrove)

My right hon. Friend is right to raise Lord Hutton’s contribution to these pension reforms. He has done an excellent job overall, which the Government, including me, have put on record a number of times, although I am happy to do so again today. As my right hon. Friend says, Lord Hutton made clear his views on this issue in the debate in the other place. Since then Lord Newby has engaged with a number of stakeholders. I will provide a further update on that as I progress.

Ian Paisley Jnr (DUP, North Antrim)

Lord Newby said in the House of Lords debate that these amendments would

“fundamentally alter the status of these individuals and that should not be carried out lightly.”—[Official Report, House of Lords, 12 February 2013; Vol. 571, c. 743.]

How does the Minister respond to those points and will he say what those alterations would be?

Sajid Javid (Conservative, Bromsgrove)

I thank the hon. Gentleman for his intervention. I agree that the general pension reforms in this Bill should not be carried out lightly. As I progress and we have this debate, I hope he will be reassured that the Government have taken this issue seriously and will set out their case carefully.

The issue at hand is the appropriate treatment of those work forces’ pensions. The amendments would actively reduce the normal pension age for individuals joining them. It would not be a minor reduction, but a reduction of five years from the pension age put in place for those work forces by the Labour Government in 2007. It would also be a reduction of seven years from the pension age that they would otherwise see when the new scheme comes into force in 2015. That approach would run counter to the need to control the risks associated with increased longevity, which all parties agree must be addressed. I believe that all parties in this House support the aim of controlling those risks. The amendments would make those work forces unique in the public sector, with their pension age falling at a time when everyone else’s is rising.

In response to the issue being highlighted, the Government have taken measured and appropriate action. Rather than making a knee-jerk response to fit with the legislative time scale of the Public Service Pensions Bill, the Ministry of Defence has written to the forces. Its letter states that the MOD is willing to consider how the current pension age of 65 might be maintained for those individuals when the new pension schemes are introduced in 2015. I believe that is a reasonable offer by the Government, and we will of course stand by it. It is our duty as parliamentarians to look at the whole picture. Pensions are only one part of the remuneration and employment package of those work forces.

Bob Russell (Liberal Democrat, Colchester)

The Minister is saying that the retirement age of a current Ministry of Defence police officer would remain at 65. So that I can better understand, what would the retirement age for a constable in the Essex police be?

Sajid Javid (Conservative, Bromsgrove)

To be clear, what I have said is that the Ministry of Defence is willing to consider keeping the age at 65. It has not yet made that decision, which would require further engagement, although it has set

out how it intends to engage. As I think my hon. Friend knows, under these proposals the answer to his question about a police officer would be 60, as opposed to 65 for civil servant pension schemes.

Chris Leslie (Labour, Nottingham East)

When the Minister complains that agreeing to these Lords amendments would create a unique circumstance, is he not really admitting that the unique characteristic of this particular class of MOD firefighter and MOD police officer is that they are the outliers? They are the only ones who will have to work all those extra years, whereas other police officers and firefighters in comparable roles will retire at 60. That is essentially what he is saying.

Sajid Javid (Conservative, Bromsgrove)

During the Bill’s passage through Parliament, the Opposition spokesman has raised mostly constructive issues and, as we shall see during this debate, the Government have accepted many of them. This is one issue, however, on which he and his party have little credibility. He says that the current retirement age for MOD police and fire service workers is higher than that of their civilian counterparts, but that situation was created by the Government whom he supported, so he really does not have much credibility on the issue.

Chris Leslie (Labour, Nottingham East)

rose—

Sajid Javid (Conservative, Bromsgrove)

I will give way to the hon. Gentleman again. Perhaps he will now tell me whether the previous Government considered these issues when they changed the retirement age from 60 to 65 for MOD fire service workers and policemen.

Chris Leslie (Labour, Nottingham East)

I was not part of the Government at that time, but the key point is that, as he knows and as we have heard throughout the debates that have been quoted in interventions today, even Lord Hutton did not spot this anomaly. Lord Hutton says that, if he had known about it, he would of course have corrected it and aligned the MOD firefighters with all the other firefighters. I am prepared to say that the last Government overlooked this issue; it was an error. It was a mistake, and we should be big enough to admit that. Is the Minister now big enough to throw away his Treasury brief, which simply tells him to resist all changes, and to act for himself and do the right thing by treating all firefighters the same?

Sajid Javid (Conservative, Bromsgrove)

I am very comfortable that the Government are doing the right thing by resisting the amendments. As the debate progresses, I hope that more hon. Members will be persuaded that we have taken the right approach to this complex issue. I shall explain further as the debate progresses.

John McDonnell (Labour, Hayes and Harlington)

Will the Minister explain the nature of the offer? I just want to know what the process will involve, following consultation. Will it require primary legislation, or will it be dealt with through delegated legislation? How will it be implemented? What sort of time scale is he considering?

Sajid Javid (Conservative, Bromsgrove)

The hon. Gentleman is asking those questions for all the right reasons. I still have a few more minutes in which to set out the Government’s case, and

I hope that I shall answer them in the process. If anything remains unclear, however, I hope that he will come back to me. I will be happy to add to the information that I am giving the House.

Richard Fuller (Conservative, Bedford)

Labour has accepted that it completely forgot about those workers when it was in government. Its spokesman has been noble enough to admit that it did not find the 350 people in the fire service and 3,000 people in the military police. Given that my hon. Friend the Minister now understands that fact, can he tell me why the workers did not bring the issue to the attention of the then Government? Were the unions involved in any negotiations at the time, or has this just become an issue now?

Sajid Javid (Conservative, Bromsgrove)

My hon. Friend raises a good point. I cannot answer on behalf of the previous Government, but I can say that the change was carried out by ministerial order. There was no open, ongoing debate on the matter like the one we are having today. A written ministerial statement was issued by the then Minister for the East Midlands, Gillian Merron, on 26 July 2007, and I can find no record of any Labour MP complaining about the change at that time. If my hon. Friend is making the point that the Opposition’s credibility is severely damaged because of this, he is making it very well.

Bob Russell (Liberal Democrat, Colchester)

It was not connected to the pensions issue, but I raised with Labour Ministers at the time the stupidity of cutting the size of the MOD police, whose numbers in my constituency have been reduced from 33 to one.

Sajid Javid (Conservative, Bromsgrove)

We all know that my hon. Friend is an assiduous Member of Parliament, and that he reviews all legislation carefully. I thank him for making that point. He will no doubt have looked at these matters closely at the time, and I welcome his looking at the legislation today.

Ian Paisley Jnr (DUP, North Antrim)

The party political spat is incredibly interesting to observers—and the employees are the people who count most here. Will the Minister set out for me—he has been able to travel some way in his contributions to date—where the terms and conditions of employment set for Ministry of Defence personnel are materially and significantly different from those of ordinary Home Office fire services and police officers across the rest of the UK? If he set that out clearly, it might help me to come over to his side on this issue.

Sajid Javid (Conservative, Bromsgrove)

The hon. Gentleman may already know that MOD fire workers and police are classed as part of the civil service and, as such, are part of the principal civil service pension scheme. That is why the changes I referred to, which were made by the then Government back in 2007, affected those employees. As I plough on through my speech, I hope I will be able to answer some of his concerns.

Ian Paisley Jnr (DUP, North Antrim)

I thank the Minister for his generosity in giving way again. It is the material condition of their work that counts. What is significantly different between an officer who dons a hat with an MOD badge putting out a fire and one who does so but dons a hat with his

regional service cap? I simply do not get it, and I think that many Members do not get it either, while those who do not get it the most are the fire service men.

Sajid Javid (Conservative, Bromsgrove)

Clearly, there is some difference in the roles they carry out, but I readily accept that the physical attributes required and the difficulty of the job are similar in each case. That is why I said at the outset that there is no point in trying to debate the difficulties, for example, of one job in the civil fire service in comparison with those in the MOD fire service, but significant differences have developed over time between the pay and conditions, including the pensions, of the civil and the MOD work forces. The hon. Gentleman will see, as I have outlined, that the MOD has committed to consider the issue. My main point is that this Bill deals with approximately 12 million employees and their pensions in the public sector, and that this is not the right occasion for looking at individual terms and conditions in each scheme for each particular work force. There is a time and a place for that—but it is not the debate on this Bill. I do not believe that it is the job of Members here or in the other place to look at the individual terms of each scheme. Rather, we should ensure that the Bill we pass has sufficient flexibilities to ensure that if the NPAs—normal pension ages—or other terms and conditions in the pensions for particular work forces need to be changed at some point in the future, that can be accommodated.

Alison Seabeck (Labour, Plymouth, Moor View)

Will the Minister tell us how many meetings he has had with Defence Ministers to discuss the implications for the MOD and how many he has held with the MOD police and fire service trade unions?

Sajid Javid (Conservative, Bromsgrove)

I can tell the hon. Lady that I am not the only Minister in the Treasury working on this issue, as there is a whole team of Ministers, including my noble Friend Lord Newby. Treasury Ministers have had meetings with representatives of the respective work forces and other stakeholders. I would like to plough on—

David Anderson (Labour, Blaydon)

Will the Minister give way?

Sajid Javid (Conservative, Bromsgrove)

I promise that I will in a few moments.

It is our duty as parliamentarians to look at the whole picture of pensions, which are only one part of the remuneration and employment packages for these particular work forces. We should not simplify the issue by making stark comparisons out of context. Simply comparing these forces to their local authority counterparts achieves no useful purpose beyond critical grandstanding. Differences between these forces’ terms of employment are of long standing. If these issues are to be reopened, they should be considered in the round, with proper consultation between employer and employees.

As well as having different retirement ages from local authority, fire and police personnel, the MOD employees have different contribution rates and levels of pay. Unlike their local authority counterparts, they also have access to benefits such as the civil service compensation scheme. To pluck out their pensions from the wider

package would be short-sighted, and potentially damaging to the efforts of both employers and employees to get the package right.

David Anderson (Labour, Blaydon)

I thank the Minister for giving way. He is being very generous.

We are not just legislating on people’s terms and conditions, and it is important for us not to legislate and get it wrong. What about people’s capability to do the job? Are people over 60 expected to go into a burning building in the same way as they did when they were 26? John Hutton clearly does not think that they should do so if they work for a local authority, and the same should apply in this context. We should think not only about the person who is running into the building, but about the person who is inside waiting for him. That is why the Minister should change his mind.

Sajid Javid (Conservative, Bromsgrove)

The hon. Gentleman has made a good point, and made it well. It is important to consider the capability of each work force, especially in view of increased longevity, and to ensure that the retirement age is appropriate. That is what I expect the MOD to do, and that is what it is doing, but it should do it in the context of the particular scheme for each work force, rather than by becoming involved in the details of each work force that are affected by the broad changes introduced by the Bill.

We have a responsibility to look rationally at the costs of the proposed changes. The additional costs may appear small in comparison with the savings that the Government are making through their overall programme of pension reforms, but the Government consider them to be both unnecessary and significant. They are unnecessary because those concerned will continue to have access to the civil service pension scheme, which is an excellent scheme that many in the private sector, including those doing the most arduous or specialist work, would envy. They are significant because some early indications suggest that they could be as high as £10 million a year for the lifetime of the schemes. This expenditure would take money away from front-line servicemen and women, and from other important defence priorities.

Those who support the amendments may believe that the members should pay the cost of the reduced retirement age themselves. That would imply increased employee contributions and a potential average take-home pay cut of over 8%—although it would depend on the exact terms—which might not necessarily be welcomed by members of the forces.

As politicians, we should not be trying to set the fine detail of public servants' pension schemes on the Floor of the House. Rushing at it might lead to mistakes. As I hope I have made clear, I acknowledge that the issue deserves further consideration allowing time for discussions between employer and employee. We owe it to the DFRS and the MDP to get this right.

Simon Hughes (Liberal Democrat, Bermondsey and Old Southwark)

What the Minister has just said is very helpful, provided that the Treasury too will be helpful if the negotiations between the unions and the MOD produce a different package. I understand the financial point, and I also understand that this is not just about

retirement ages but about all the other benefits, which may be better than they are under the present arrangement. Can the Minister confirm that, if the MOD picks up the baton, the Treasury will not walk away and say “Nothing to do with us, guv”, but will continue to take an interest in the resolution of this outstanding bit of business?

Sajid Javid (Conservative, Bromsgrove)

What I can confirm is that the Treasury and the MOD are in exactly the same place. The MOD agrees with the terms that I am presenting today, and, as I have said, has made it clear that it will think about the issue. It has already written about it to members of the forces, as I would expect it to do in its capacity as the employer of these vital groups of workers.

The Government have not dismissed the claims of the DFRS or the MDP; far from it. The MOD has acknowledged in writing that there is a case for looking at their pension age to check that it is still appropriate.

Finally, there is a technical reason why the Government cannot accept these amendments as they currently stand. They would—unintentionally, I assume—confer powers on the Scottish Parliament and Welsh Assembly to make schemes for these civil servants. That would give new functions to devolved Administrations, without any proper consultation or consideration of whether that is the appropriate framework for managing the interests of these specialised work forces.

In summary, this is a complicated and inevitably emotive issue, and one that we have discussed at some length. I am sure I will not have persuaded all Members present today.

David Anderson (Labour, Blaydon)

The Minister has made two clear points: this issue has not been resolved and needs to be resolved; and there is an issue to do with the Welsh and Scottish Parliaments. Therefore, is not the genuine thing to do to withdraw the Bill today, until those points can be put right?

Sajid Javid (Conservative, Bromsgrove)

I have to disagree. Of course that is not the right thing to do. This Bill is about 12 million workers in the public sector and their pensions, and about the settlement between those employees, their employers and the taxpayer, and it is vital that we make this reform so we can get the public finances on a sounder footing. I think the hon. Gentleman knows that, but I do not blame him for trying.

I hope hon. Members at least understand why we are taking this position on these amendments. I have explained why we have to resist the amendments, citing the financial privileges of this House on this occasion. I therefore urge hon. Members to disagree with this group of amendments.

Chris Leslie (Labour, Nottingham East)

Although the Minister had quite a long preamble, not necessarily on these amendments, all I would say is that, clearly, with life expectancies increasing, it is in general reasonable to ask people to work for longer before retirement. There is no disagreement on that general principle. We need to adjust the public service pension schemes so that they remain sustainable, which is why we support so many of the changes Lord Hutton recommended. However, as hon. Members know, there are certain categories of workers for whom having longer careers is not realistic because of the physical

demands of their professions. There are some physical tasks that it is not reasonable to expect a 67 or 68-year-old to undertake.

The Bill acknowledges that in part, by excluding three categories of worker— firefighters, police officers and members of the armed forces—and fixing their normal pension age at 60. That is a rational position, but there are other professions that we believe the Government should keep under review because they also can be exceptionally physically demanding, such as NHS paramedics and care workers. There is clearly a need for some flexibility to accommodate scheme-specific capability reviews for these associated professions, and it is a great shame that the Government have not allowed the latitude for that in the Bill. We debated that in Committee.

Lords amendments 78 and 79 are aimed at correcting what most people thought to be an oversight: the fact that, for some bizarre reason, Ministry of Defence firefighters and MOD police officers are excluded from the definitions of firefighters and police officers in the Bill. There are about 2,000 MOD police and 1,000 or so MOD fire and rescue scheme workers who essentially carry out the same crucial, but onerous, tasks as police and fire service workers under the auspices of the police authorities and the Home Office.

Bob Russell (Liberal Democrat, Colchester)

In addition to the point the hon. Gentleman has just made, does he agree that, particularly with regard to Faslane and the nuclear submarines and installations there, MOD firefighers and police officers carry out duties that the civilian police and firefighters do not have to do?

Chris Leslie (Labour, Nottingham East)

I am grateful to the hon. Gentleman for making that point, because I think that is indeed the case, but my general point is about the physical demands on these individuals. Today we are debating whether their retirement age should be, as the Minister thinks, 67 or above, or whether it should be at 60—the same age as for other firefighters, police officers and members of the armed forces. It is a simple proposition and the House has the power to make a judgment on it today.

Richard Fuller (Conservative, Bedford)

The hon. Gentleman makes the case on physicality for those three classes of public sector employees, but the crucial issue is that those people put their lives at risk, which other public sector workers do not. Can he advise the House why the issue was not raised, and why those people were missed, in earlier pension scheme reforms?

Chris Leslie (Labour, Nottingham East)

That is a very pertinent question. We heard from the Minister that 12 million people were affected by the various public service and civil service pension schemes. We heard that even Lord Hutton, in his detailed inquiry, was not aware of the 350 or so affected individuals, because it was a new scheme that started in 2007, and only some MOD firefighters and police will come into the age bracket. Given the complexity of pensions, it is not surprising that some issues were not spotted; apparently even some employee representatives and others were not aware of the anomaly at the time.

These things happen. Mistakes can be made, but it is really important that when a mistake is pointed out, people assess whether they are big enough to accept

that it needs to be corrected and justice is done, or whether their pride is such—whether or not this applies to the civil service—that they try to retrofit their arguments to justify a clearly unjustifiable anomaly. That is what the question boils down to.

The only reason I can see for different treatment for those groups is that one set happens to be employed by the Ministry of Defence and the other is in the public service at large. It is such an evident anomaly that the House of Lords, when made aware of the lacuna, correctly sought to repair the fault in the Bill, but incredibly we heard from the Economic Secretary—I am delighted that he has been joined by the Chief Secretary; perhaps he can be lent on by more enlightened colleagues—[Interruption.] The hon. Member for Colchester (Sir Bob Russell) says he will have a go, but he does not have much time as the question will be put shortly. [Interruption.] Anyway, Ministers are not particularly interested in listening to the debate, so it might be useful if the hon. Gentleman could text the Economic Secretary to suggest that he pays attention.

In essence, the Economic Secretary said that the Government were too proud to admit that they had got it wrong. They are still defending the indefensible, but the arguments for admitting the error are overwhelming.

Alison Seabeck (Labour, Plymouth, Moor View)

Does my hon. Friend share my concern that if the Government do not accept some of the changes, some people—albeit a small number—who cannot carry out normal duties will be unable to do the job for which they are being paid? Therefore fewer people will be able to fight fires or to respond in the most physical of circumstances. How does my hon. Friend see the future for those employees?

Chris Leslie (Labour, Nottingham East)

Quite a few of those employees already retire before the normal retirement age because of issues of physicality—the sheer effort involved in undertaking such physical tasks. It is entirely unreasonable and unfair that there is such a discrepancy between public service workers who carry out the same job. They are all called on to put their lives on the line. The burden of justifying the anomaly now rests with the Government, but other than some rather unconvincing arguments, which the Minister barely touched on, they have failed to discharge their burden and to illustrate why MOD firefighters and police are so different. The Minister took interventions from many colleagues and on a number of occasions he said, “Oh well, I’ll come to it in my speech,” but amazingly he never did.

Simon Hughes (Liberal Democrat, Bermondsey and Old Southwark)

Given that neither the Labour Government nor Lord Hutton spotted the issue, and it has now been raised with this Government, does the hon. Gentleman not think that a reasonable way forward is what the Minister suggested at the end of his speech? We should allow the MOD and the unions to see if they can negotiate a proposal that could be implemented under the broad remit of the Bill. That must be the reasonable, sensible, grown-up way forward.

Chris Leslie (Labour, Nottingham East)

At this eleventh hour, no, because the issue has been familiar to the Government for many months. The Minister said that there was not even a

proposal on the table. We are able to judge, as Lord Hutton was able to judge, as suggested by the quotes from the House of Lords debate, the definitions of firefighter, police officer and armed forces, for whom the Bill categorically specifies the normal pension age as 60. The right hon. Gentleman is suggesting that some sort of negotiation is needed about whether those individuals are indeed firefighters or police officers of the same class. I disagree with him, if he is naive enough to think that the Treasury and the Ministry of Defence do not need to be pushed on the issue. Today is the opportunity to vote on it. I know he will listen to the debate and I hope he will vote in the right way and not try to find some excuse for kicking the issue into the long grass, hoping that people will forget about it yet again. We have the opportunity to deal with it now. Let us have a bit of gumption and deal with it in the way that we can do.

Simon Hughes (Liberal Democrat, Bermondsey and Old Southwark)

May I tell the hon. Gentleman respectfully why I disagree with that? This is not just about age. It is about a whole package of benefits, some of which are much more advantageous to people in the civil service than they would be to someone in a parallel position in local government. I am not in a position, and even those on the Labour Benches who represent unions are not in a position, to do a deal here on their behalf. If Government are committed to a deal being done, it must be right to remit the issue to the employer and the unions to negotiate an outcome.

Chris Leslie (Labour, Nottingham East)

I am very sorry that the right hon. Gentleman’s true colours have come through in that way. He is clearly not going to support the move to reduce the retirement age to 60. He should, and I will tell him why. The key question was put by Lord Eatwell in the other place, who asked about the different treatment and whether the Government could justify it. He asked:

“In what way is it less onerous, when they”—

that is, the MOD firefighters—

“have to work on military establishments”—

as the hon. Member for Colchester (Sir Bob Russell) said—

“dealing on occasion with extremely dangerous materials, and occasionally also in war zones? How is their job less onerous?”—[Official Report, House of Lords, 12 February 2013; Vol. 743, c. 568.]

Unfortunately, my noble Friend did not receive a satisfactory answer to the question, so I repeat it now to the Minister: what reason is there for that different treatment? Do not Ministry of Defence police officers have to stay fit, remain physically alert and intervene in events of great physical danger? Do not Ministry of Defence firefighters have to be ready to run the gauntlet, endure the exertions of search and rescue in extreme circumstances, take intense risks, prove their stamina and make sure that they can rise to the most testing of circumstances? The arguments that justify excluding the police and fire and rescue workers from the link between state pension age and normal pension age apply equally to the MOD police and the MOD firefighters. Just because they are a tiny number of workers should not mean that Ministers can just turn a blind eye and ignore the issue. We cannot allow it to be swept under

the carpet. There is no reason for the difference, and the Government have no justification for opposing the amendments.

Stephen McPartland (Conservative, Stevenage)

This is a difficult amendment owing to its emotive nature, with a small number of people feeling almost as though they have been victimised. If the Government reject the amendment, can the hon. Gentleman offer those workers some hope that if Labour formed a Government in 2015, it would do as the Lords amendments say?

Chris Leslie (Labour, Nottingham East)

I am amazed that hon. Members who are in government refuse to take responsibility for the offices that they hold and for the decisions that they have in their grasp. I said that it is important to admit that a mistake has been made for these 350-odd MOD firefighters and police. Why on earth cannot Members on the Government Benches say the same? [Interruption.] If the Minister wishes to correct me, I shall be delighted to hear.

Alan Reid (Liberal Democrat, Argyll and Bute)

Will the hon. Gentleman give way?

Chris Leslie (Labour, Nottingham East)

Another Liberal Democrat. Yes.

Alan Reid (Liberal Democrat, Argyll and Bute)

It was a legitimate question from the hon. Member for Stevenage (Stephen McPartland). Labour is seeking to form the next Government. The next election is only two years away. Surely the hon. Member for Nottingham East (Chris Leslie) should answer questions about what his party will do if it is in power?

Chris Leslie (Labour, Nottingham East)

How much more of an answer can I give than the actions that we will take in the Division Lobby today? Instead of the party political games that the Liberal Democrats and the Conservatives are playing today, it is a responsible thing to do to try to help—[Interruption.] They laugh, but this is not a laughing matter. They expect these firefighters and police officers to work up to the age of 67 or above, and that is not the right thing to do.

Richard Fuller (Conservative, Bedford)

Will the hon. Gentleman give way?

Chris Leslie (Labour, Nottingham East)

I have given way enough to Conservative Members and I want to make some progress because it is important to bottom out these specious arguments that the Minister can barely grasp.

Lord Hutton said that the reasons for giving uniformed forces a lower normal pension age is the

“simple argument that the nature of their service is unique and should be reflected in the pension arrangements that we make for them. ”—[Official Report, House of Lords, 12 February 2013; Vol. 743, c. 520.]

In his report he recommended that the Government set a new normal pension age of 60 across the “uniformed services”. That was the phrase that he used. He did not refer to the type of pension they were in; instead he referred to “uniformed services”, and argued that they deserved to be singled out because of the nature of their work. The spirit of Lord Hutton’s recommendation clearly applies to MOD firefighters and police officers. Lord Hutton said:

“The nature of the work the uniformed services perform is unique and this needs to be reflected in their Normal Pension Ages. The modernised firefighters scheme has struck a balance between recognising these changes in life expectancy, but also recognising the unique nature of the service provided by scheme members. The Commission’s view is that the Normal Pension Age in this scheme, 60, should be seen as setting a benchmark for the uniformed services as a whole.”

We agree with Lord Hutton’s reasoning that the amendment was merely intended to correct an oversight that has occurred in drawing up the Bill. He supports the amendment and the reform is based on his idea. He said that

“if, during the course of my inquiry, I had known about the unique circumstances of the MOD firefighters, I would have referred specifically to them in my report…Sadly, this issue was not drawn to my attention, so it did not make any specific recommendations about the MOD firefighters or the MOD police. If I had known about it, I certainly would have done so.”—[Official Report, House of Lords, 12 February 2013; Vol. 743, c. 570.]

It is important to mention this. We are towards the end of the Bill’s passage and we have not had much opportunity to debate it. This has been brought to my attention during the course of turning the pages on the detail of this pension legislation. The Opposition say the same as Lord Hutton. This is just one of those anomalies that we should be big enough to admit was wrongly overlooked in previous reforms.

It is true that the last Government raised the normal pension age for the civil service to 65 for post-2007 entrants, and that included Ministry of Defence staff. However, I am now convinced that had we known then about the small group of firefighters and police officers who are technically on the civil service payroll rather than employed by police or fire authorities, we would have taken account of these groups, and an exception could have been carved out. There should be no embarrassment inside the Treasury in admitting that this was an oversight. Regarding this previous change, even the Defence Police Federation said that the

“Council of Civil Service Unions did not consult the DPF, and we did not have the opportunity to make the above points about the physical demands of being an MDP officer”.

The issue was not raised or considered when it should have been. Those staff should not be punished because of that particular oversight. If Lord Hutton is able to admit the oversight and if Opposition Members in this Chamber are able to admit the oversight, the Economic Secretary should be big enough now to do the same. Rather than just read out the brief provided to him, he should engage his brain, use his own judgment and discretion, and do the right thing. If he engaged the brain of the Chief Secretary, who is sitting alongside him, that might go some way towards a solution.

There is the cost to the public purse argument, but as I understand it, only 56 people have joined the Ministry of Defence police, and fewer than 300 have joined the defence fire and rescue service since 2007. So the anomaly could be easily corrected by bringing a small minority of pensioners back into line with the pre-2007 entrants’ normal pension age of 60. We are not talking about a large number of firefighters or police officers here. Sadly, we have had to get to the Floor of the House of Commons to put the pressure on the Government. What the Government have tried to present as a cost is in reality a reduction in the predicted saving from this overall package of changes. They overestimated the

savings to be made by overlooking the existence of this particular group of fire and police officers and failed to include them in the definition of uniformed services.

The Minister might put up various arguments, but the question of physical burden cannot be overlooked. A worker for the Ministry of Defence police may be required to wear 11 stone-worth of kit, and a normal shift will involve wearing 5 or 6 stone-worth of equipment for up to 11 hours. Workers in the Ministry of Defence fire service carry out the already difficult and dangerous job of firefighters, but do so in war zones and other extremely hazardous conditions around the world.

The fact that these workers are labelled civil servants should not blind us to the reality of what their jobs entail. Along with the police and the armed forces, they are the only public service workers who have to undergo regular fitness tests. In fact, the majority retire before 60 because they are unable to meet the high demands their jobs entail. They are also recognised as uniformed forces in the civil service pension scheme, and there is a small reflection of that already. Unlike civilian police forces, there is no option in the MOD police for officers to move to unarmed work if they struggle to cope physically. Even when mainstream police officers are armed, they are not expected routinely to carry guns around beyond the age of 55.

Another point that has been brought to my attention today—I imagine that this is something none of us is massively familiar with—is that many MOD firefighters have to work alongside colleagues who will qualify for retirement at 60. Royal Air Force firefighters—I think that they are called Trade Group 8—will often be on similar operations with service colleagues, working in the field together. One colleague will retire at 60, whereas another standing next to him will be required to work to 65, 66, 67 or beyond. The same applies for Royal Navy firefighters, who are regarded in their classification as armed forces. This is riddled with anomalies, and it would be very simple for Ministers to overcome them. They really ought not to have allowed this to become such a large point of debate.

Ian Paisley Jnr (DUP, North Antrim)

It should also be pointed out that many of those personnel also serve in war zones, are deployed overseas and have been decorated for their service, which I think sets them apart, with regard to the changes that the Government are refusing to make.

Chris Leslie (Labour, Nottingham East)

Absolutely. Sadly, there is also an argument that the Government, by holding out in this way, are letting down those serving in our armed forces. They are giving the impression that they think they can sweep the issue under the carpet and let it ride. There are already concerns that they might be increasing the risk to national security by cutting the number of MOD police officers—from 3,600 to 2,400 by April 2016—and in many ways a feeling of betrayal is starting to accumulate.

This matter might be an irritant for the Minister, whom we know is looking for a pat on the head from his betters higher up the food chain, but it would be nice if he, rather than trying to deliver a neat and perfect Bill with no loose ends by resisting any issues that annoyingly come up in the course of debate, used his position to take account of the important questions that come up.

I have encountered a number of such issues in my time at the Opposition Dispatch Box and as a Minister, and it is quite plain that at some point in the next few weeks Ministers will have to put their hands up and admit that they will back down. It would be far neater and quicker, and to the Minister’s credit, if he said so now.

This matter needs to be resolved. Telling MOD firefighters and police officers to stop rocking the boat and to accept a half-baked assurance that the Government might enter into some negotiations on whether the pension age should be 65 gives them no way to protect their situation beyond the short duration of the Minister’s tenure in office. We need to correct that glaring error in the Bill. I commend Lords amendments 78 and 79 and urge the House not to disagree with them.

Alan Reid (Liberal Democrat, Argyll and Bute)

I am disappointed that the Government have not accepted Lords amendments 78 and 79. I support the rest of the Bill, which I think contains good proposals for tackling the issue of people living longer, but I think that that one part is an anomaly and an oversight, as Lord Hutton has admitted. It will leave MOD police and fire personnel in an anomalous position as the only uniformed personnel who will not retire at 60.

Many of my constituents who work as police and firefighters at Faslane and Coulport will be affected. As has been said, their counterparts in local authority fire services and other police forces will retire at 60, and I believe that they, not other civil servants, are the correct comparison for defence police and firefighters.

I am pleased that the Government have moved from their starting position of retiring at the state pension age, which will rise to 68 eventually, and have proposed a retirement age of 65, but that still means that 65-year-olds will have to fight fires or tackle terrorists, and I simply do not think that that is sensible.

Today has been historic, because the Labour party has admitted that it made a mistake when in government. I hope it will make similar admissions in future. The 2007 decision to increase the retirement age to 65 for new recruits was imposed on the unions without any negotiation and it was a mistake.

The Government have faithfully implemented Lord Hutton’s recommendations, one of which was that those in occupations for which the normal pension age was under 60 should retire at 60. This applies to the other uniformed services: police, fire and the armed forces. However, Lord Hutton has subsequently said that he was not aware of the unique circumstances of defence police and firefighters, and that if he had been he would have recommended that they be treated the same as other uniformed services, with a retirement age of 60. I would have hoped that the Government had taken on board Lord Hutton’s admission that he made a mistake.

The number of personnel involved is very small—fewer than 5,000 in total out of a civil service work force of about 700,000. Defence police and firefighters do a vital job. It involves putting themselves in dangerous situations and requires a very high level of fitness. Fighting a fire on a vessel at sea requires an extremely high level of fitness. The same is true of police officers who have to wear body armour and carry a heavy weapon.

Like all other uniformed services, defence firefighters and police have to be ready to go instantly from a state of rest to 100% alertness and very high physical exertion. That puts a heavy strain on the body and, as someone nearing 60 myself, I know we all have to accept that age takes its toll on us. What makes the uniformed services different is the need to go to a 100% level of alertness and effort. Many other manual jobs involve hard work, but it is done at a steady state for several hours, whereas the uniformed services have to go to their 100% physical and mental peak at once, and I think that that top level of fitness decays once we are over 60. A report produced for the Ministry of Defence by Dr P. Griffin, a civilian consultant adviser in occupational medicine, makes clear that a person’s ability to function with peak physical and mental alertness declines once they get over 60. That has to be taken into account.

Defence police and firefighters have to undertake regular fitness checks and demonstrate a high degree of fitness. I am concerned that if they have to work beyond 60, many of them will fail these tests before they reach retirement age. Having a high proportion of personnel retire early on health grounds is no way to manage vital services such as policing and firefighting. That is why I believe that the cost of reducing the retirement age to 60 will not necessarily be as large as the figure the Minister has been given by his civil servants. I suspect that a large number of personnel will retire on health grounds before they are 65. Although reducing the retirement age will cost the Government money, I do not think that the cost is as great as it may appear.

The anomaly of defence police and firefighters retiring at state pension age while other police and fire personnel retire at 60 has arisen because defence police and firefighters have been classed as civil servants. The correct comparison is with local authority firefighters and other police services.

The Government inherited a plethora of public service schemes with different rules and regulations, and have done a very good job of rationalising them. However, if Lords amendments 78 and 79 are not accepted, it will leave the defence police and fire services in the anomalous position of being the only uniformed services that have to work beyond 60.

Hywel Williams (Plaid Cymru, Arfon)

The hon. Gentleman is making fine points about the physicality of the job. The Minister said that the terms and conditions of the pensions of MOD firefighters and police are immaterial to their ability to carry out the job. Does the hon. Gentleman agree with me and disagree with the Minister?

Alan Reid (Liberal Democrat, Argyll and Bute)

I agree that the pension rules are immaterial to their ability to carry out the job. That is the point that I am trying to make. The work of the uniformed services is unique because it involves short bursts of high physical effort and mental alertness. That is what makes these jobs different and why I do not believe it makes sense for them to have to carry on beyond 60.

There should be a simple rule for retirement age. The uniformed services should retire at 60 and other people should retire at the state pension age. If the Lords amendments were accepted, that principle would be implemented. Defence police and firefighters, like other uniformed services, are highly trained and their job puts them in dangerous situations and requires a high degree of fitness.

I hope that the Government will reflect and agree—if not today, then at some point in the future—that people in these occupations can retire at 60.

David Anderson (Labour, Blaydon)

Ever since this Government took office there has been an attack on public sector pensions. Throughout the debates on public sector pensions, they have ignored the advice of the members of the schemes, the trade unions and the organisations that represent the members. They have torn up long-held agreements, reduced payouts, increased the length of time that people have to pay in and increased the level of contributions.

Many of the Government’s arguments have been based on the work of John Hutton. They have said to Labour Members: “Not us, guv! Your man gave us the template and we’re following his work.” Why on earth are they ignoring John Hutton now? Is it because they have an in-built anti-public sector dogma? Do they want to pull down public sector workers whenever they have the chance to get away with it? Is it because—I think this is the main reason, because the Treasury’s fingerprints are all over this—they are driven by the dogma of a failed Chancellor, who wants to save money in any way that he can because his plan A has failed miserably and the economy of this country has not just stagnated, but has stalled and gone backwards?

John Hutton has said clearly that he made a mistake. My hon. Friend the Member for Nottingham East (Chris Leslie) quoted him. He said that he had missed this point, that he had made an error, and that if he had known about it, he would have addressed it at the time. At the end of his speech, John Hutton said:

“It is incumbent on us to address that issue and not to use the technical arguments as an excuse for not addressing this fundamental discrepancy.”—[Official Report, House of Lords, 12 February 2013; Vol. 743, c. 570.]

A discrepancy is what this is. It is not a huge issue of principle. It is something that was missed by the people who were advising John Hutton, including the trade unions. It was also missed six or seven years ago when we changed the rules. Back Benchers like me should have raised it with our Government. Opposition Members at that time, including Liberal Democrat Members, should have raised it. However, we did not raise it, the trade unions did not raise it and the civil servants who were giving the advice at the time did not raise it, and it went through.

It could be put right now. As John Hutton said, it is a fundamental error. If it is not put right now, is it just because the Government are being contradictory, given that they have argued at every other time that we should follow John Hutton’s template, or because they are being cynically hypocritical? We could put it right, and we could do it now.

It is nonsense to say that the workers in question are somehow civil servants first and police officers or firefighters second. When they run into a building, they do not think, “I’m a civil servant”, they think, “I’m the man who’s going in to sort out a terrorist or to try to rescue somebody from a fire.” I said before that there is no difference between them and a police officer or firefighter working for a local authority, but at times there is, because sometimes they run into buildings where there are things like nuclear weapons, explosives or somebody waiting for them with a shotgun, a machine gun, a hand

grenade or other explosive device. The physical and mental intensity and the pressure on them is huge, and that should be represented in the Bill.

The argument that people in different pension schemes cannot be on different terms and conditions is nonsense. For years in the national health service, we allowed mental health nurses to retire at 55, or if they chose to carry on working, their pension was guaranteed at that age, because of the nature of their work. It was about the intensity of going to work every day and grappling with some of the most disturbed people in society. That was the right thing to do then, and it is the right thing to do today.

We all saw what happened 30 years ago, when Margaret Thatcher’s Government reduced the retirement age for coal miners first to 62 and then to 60. They did so for the right reason—they realised that people in that industry were a special case and deserved to be seen in that way. At the time of the reduction, in 1980, the life expectancy of a miner was 65 years and two days, so they got their pension for two days. Because of the change in the law, they got the chance to get their pension for up to five years longer, and that was the right thing to do. It is clear to me that the change in the Bill is nothing other than an attempt to escape from the need to pay people what they are entitled to.

Frank Roy (Labour, Motherwell and Wishaw)

Is there not a danger of there being a poorer level of service if emergency workers are older?

David Anderson (Labour, Blaydon)

I agree entirely, as somebody who is facing his 60th birthday—it comes up like an express train. I was a care worker, and I would hate to think that I would still be caring for people at my age, and in the physical shape that I am in at the moment. I would guess that the people I would be caring for might share that view.

The Minister says that there will be negotiations and discussions, but if there is to be a serious discussion, a job evaluation scheme needs to be put in place to see who a worker should be compared with. So far, the people in question are being compared with other civil servants. Should somebody carrying backpacks and armour be compared with somebody working in an office? Of course not. They should be compared with people who are out there doing a similar job for a different organisation. That would lead to exactly the conclusion that John Hutton has now come to. That is why we should support the Lords amendments and the Minister should have the good grace to accept them. They would get him off the hook.

Stephen McPartland (Conservative, Stevenage)

The Lords amendments are great, and I would like to be able to accept them, but I have some concerns about them. Members of all parties are concerned about the emotive nature of the Bill’s effects on a small group of people. I would like to put it on record that I am proud of the public sector. Many members of my family work in it, and they show great commitment to the services in which they work on a day-to-day basis. Some of them risk their lives, and others almost risk their lives teaching very small children—I would much rather address the House than a classroom of 30 primary school children.

The work of Ministry of Defence police and firefighters is incredibly important, and it would be disingenuous of Members to try to identify whether the job of one set of police officers in the Home Office is more dangerous than that of another set in the Ministry of Defence. Some police officers in the Home Office do a great deal of work in difficult circumstances in some of our areas on a Friday and Saturday night, and some have jobs that are predominantly focused around the desk and paperwork. Those jobs are also very important in the attempt to reduce crime and provide police intelligence.

As I said, this is an emotive issue, and the real problem is the knee-jerk reaction that we are seeing on the Floor of the House to the attempt to resolve it. The shadow Minister said honestly that a mistake was made in 2007 that went through by ministerial order. There was no debate in the Chamber on the retirement age of the forces in question being raised from 60 to 65. I understand, as the hon. Member for Blaydon (Mr Anderson) said, that some people of a particular size, weight and age would not be the best at resolving the problems we have in some of our towns and cities.

For the Ministry of Defence police and fire service—I believe that some MOD fire officers are in the Gallery watching the debate with great interest—my problem is not the cost; £10 million does not sound like much. It is a lot on an individual level, but for a Government with debts of more than £1 trillion—or moving that way—it does not seem a huge amount of money. I am concerned, however, about the emotive and knee-jerk reaction, because as the Minister set out clearly from the Dispatch Box, there are real differences in terms of employment.

If we accept the amendment and allow the retirement age to be changed from 65 to 60 so that people have the same terms and conditions as those in the Home Office police service and the fire service under some local authorities, my concern is that the Ministry of Defence fire and police service could miss out on some opportunities. Hon. Members, and in particular the shadow Minister, have said a number of times that we do not know enough about the specifics of the terms and conditions—the shadow Minister raised a number of points and mentioned things that have come to his attention only over the past few days.

Chris Leslie (Labour, Nottingham East)

The hon. Gentleman is fortunate—as are we all—to have been elected by his constituents to make decisions, and what could be simpler than this? Essentially it is about whether all firefighters and police officers, whoever their technical employer, should be able to retire at 60. The hon. Gentleman is flannelling around trying to find reasons not to do that, but in his heart of hearts he thinks they should retire at 60—does he not?

Stephen McPartland (Conservative, Stevenage)

I genuinely believe that people should have the opportunity to make that decision and consult the Government and the trade unions. I do not want a broad-brush approach to this matter. It is not that I do not trust the shadow Minister, but he is trying to pull me into a political trap. I am not interested in politics in that sense; I am interested in representing my constituents and I do not want to accept an amendment that could technically make those fire and police officers

worse off in the future. I would like to know far more about the details behind the amendment and what accepting it would mean.

The Minister mentioned a figure of around 8% that could be a reduction in net pay. If we accept such an amendment, and the mistake made by the previous Government in 2007 is reversed, I think we should negotiate with trade unions and fire and police officers so that we fully understand what its impact will be on their take-home salary at the end of each month, and how it will affect decisions in their careers and moving forward. I want everybody to have a fair opportunity, and as I have said, I am proud of the public sector and the work it does. Although the amendment seems fair, I do not feel that I can support it because of the broad-brush approach that could lead to MOD police officers and fire service personnel having a worse set of circumstances in a year or two, just so that party political points can be scored. Unfortunately, I will not be able to support the amendment, but I urge the Minister to provide us with more detail in his winding-up speech about how he will encourage the MOD to sit down with the unions and ensure that the pension age will not rise above 65, and that any decision on the pension age will be about 65 and downwards.

Eilidh Whiteford (Scottish National Party, Banff and Buchan)

I wish to make a few brief points in support of Lords amendments 78 and 79, which seem eminently sensible and seek simply to bring the normal pension age for MOD police and defence fire and rescue personnel in line with arrangements for other fire and police personnel who do broadly similar jobs. As others have pointed out, when the amendments were first debated in the other place, Lord Hutton seems to have acknowledged that the omission of MOD police and firefighters from his original considerations was an oversight. I agree wholeheartedly with his remarks when he said:

“It is incumbent on us to address that issue and not to use the technical arguments as an excuse for not addressing this fundamental discrepancy.”—[Official Report, House of Lords, 12 February 2013; Vol. 743, c. 570.]

I support the Lords amendments because MOD police and firefighting officers need consistent treatment with other police and firefighters.

Lord Hutton’s conclusion in recommendation 14 of his report was by no means arbitrary. In recommending a normal pension age of 60 for uniformed services personnel, the Hutton report drew on a wide evidence base. It recognised that the nature of the job places intense physical demands on officers and requires them to maintain levels of health and fitness that are not necessary in other day-to-day jobs. That acknowledgment has underpinned the design of terms and conditions for police and firefighters for many years, and remains as pertinent and relevant as it ever was, even if the age at which those personnel will be eligible for retirement has shifted.

It is useful to remember that changing demographics and increases in life expectancy have underpinned the process of pension reform. However, although life expectancy has increased significantly in recent decades, the increase in healthy life expectancy has not kept pace. People are living longer, but they are more likely to live with debilitating health conditions or disabilities. I made general observations on that in earlier stages of the Bill,

but it is particularly relevant to the uniformed services, because it is imperative that officers are physically capable of meeting the demands of the job. Hutton implicitly acknowledged that when he called for the increase in normal pension age for the uniformed services to be kept under regular review.

We must be realistic about the physical limitations of mere mortals. Hard physical work takes its toll on human bodies. It is clear that people who work in heavier, more demanding jobs suffer more physical strain as they get older. Like the hon. Member for Argyll and Bute (Mr Reid), I was struck by the briefing ahead of the debate from the Defence Fire Risk Management Organisation, which set out in some detail not only the physical demands placed on defence fire and rescue personnel, but the risks to officers, which increase with age—they rise exponentially for officers aged 50 and over. We must be realistic about what we ask people to do. We should not do the sums on paper without thinking of the real cost.

We need to be careful when we talk about the monetary cost. The Minister relied on the argument that the measure will cost too much, but we need to be careful if we assume that the higher pension age will save us money. All hon. Members know that staff retiring on health grounds can be an expensive business. It is all the more expensive when the reasons for a person leaving their job are linked to their occupation. That is an extremely expensive way to do things. We need to look at both sides of the balance sheet before we jump to the conclusion that treating MOD police and firefighters differently from other police and firefighters will save us money.

At the end of the day, this comes down to the fact that MOD police and the defence fire and rescue officers are, to all intents and purposes, uniformed service personnel. They need to be fit and strong, and physically and mentally capable of carrying out their duties in an emergency. We need to recognise that and treat them in exactly the same way—as far as possible—as we treat other police and firefighters.

Another important part of the context is that morale in those services has been put under considerable strain in recent times owing to changes to terms and conditions and proposed reductions to services. Like the hon. Member for Colchester (Sir Bob Russell), who intervened earlier, I have MOD police in my constituency—they look after the St Fergus gas terminal. I am therefore very much aware of the great uncertainty that has overshadowed the service because of MOD reviews. I am also aware that a proposed voluntary early release scheme, for which, I believe, 600 officers applied, has been subject to a rethink. I am glad that the MOD has recognised the folly of rushing in with ill-thought-through cuts, but officers who had applied for early release have been left in a kind of limbo. The service needs to ensure that younger officers come up through the ranks, but the uncertainties of the past few years have undermined morale and the good will of officers, who take substantial risks in their day-to-day working lives, and who we expect to be on the front line during any crisis.

That is why I do not have confidence in the solution set out by the Minister. I know that some of his Liberal Democrat colleagues in the coalition have accepted it—if I had not seen officers being mucked about by the MOD’s prevarication over the early release scheme,

I would have more confidence in the Government’s proposals. However, having witnessed that, and seeing that the issue is still unresolved, I really do not have that confidence. In that context, I would be keen to see the amendments go through as they are, and I urge Liberal Democrats to come through the Lobby and make their voices heard on behalf of their constituents.

Alan Reid (Liberal Democrat, Argyll and Bute)

I want to make it clear on the record that I believe the Government when they say that they want to keep the retirement age at 65, instead of increasing it progressively to 68 when the state pension age goes up. The Government have made that offer. My argument was that the retirement age should be 60, because of the decline in their physical ability to perform at peak fitness after that age.

Eilidh Whiteford (Scottish National Party, Banff and Buchan)

The hon. Gentleman makes a valid point. Like me, he has constituents who have applied for the early release scheme and been mucked about. That is why we should settle the matter today on the Floor of the House, instead of allowing it to be sent off into the long grass where we can prevaricate some more before failing to reach the conclusion that people need to be treated with consistency.

The question of consistency underpins everything. There is recognition that other police and firefighters need a lower normal pension age than those in less physically demanding roles. People who do the same jobs, but for the MOD, need to be recognised in exactly the same way. I urge the Government to observe the spirit of the Hutton report, accept that this was an oversight, and do the right thing by our MOD police and firefighters by accepting the Lords amendments. I hope, even at this very late stage, that the Minister will capitulate.

Bob Russell (Liberal Democrat, Colchester)

It is regrettable that no Defence Minister is here, because we could be putting the cart before the horse. What is crucial is the fitness for the purpose for which our MOD firefighters and police are employed. That should be the first, driving principle, and then we can move on to retirement ages and pensions. Does the country really want its nuclear bases to be defended by people of my age? Is it really safe for someone of my age to put out a fire on a nuclear submarine? The clear answer is no. It is therefore regrettable that the MOD is not represented in this important debate. This debate must be important, because I have missed the welcome home parade of 4th Mechanised Brigade. As a member of the Defence Committee, I always wish to welcome home our troops. I hope the fact that I am here will be read as an indication of how seriously I take this debate.

I draw the attention of the House to what Lord Hutton of Furness said in the other place:

“I do not believe that there is any substantive technical reason why we cannot look again at the role of the MoD firefighters and the MoD police.”

He went on to say:

“Surely there has to be a way of doing the right thing for these people.”—[Official Report, House of Lords, 12 February 2013; Vol. 743, c. 570.]

I came to this debate fully intending to vote in support of the Lords amendments, but their unintended consequences could well lead to our MOD firefighters and police being financially worse off, albeit while retiring at a younger age. I will therefore take the Minister at his word—he is a Minister whom I trust—and give the matter further consideration in the spirit and intention of what Lord Hutton has said.

Gemma Doyle (Labour, West Dunbartonshire)

Will the hon. Gentleman explain why he thinks MOD police and firefighters could be worse off if their normal retirement age is set at 60? That has been repeated a number of times, but I do not believe that it has been explained.

Bob Russell (Liberal Democrat, Colchester)

Yes. As I understand it, the retirement age is one anomaly, but the contributions towards pension funds are another anomaly. To ask the House to have its cake and eat it might be asking for too much.

Gemma Doyle (Labour, West Dunbartonshire)

I do not believe that that is actually in the Bill. I do not believe that pension contributions will be affected, if the House votes to allow MOD police officers and firefighters to retire at 60. As we know—the hon. Gentleman and I represent some of these people—they want to be able to retire at 60.

Bob Russell (Liberal Democrat, Colchester)

The hon. Lady used the words, “I believe”, and although she may well be right, it is because of the uncertainty that I welcome the promise from the Minister, whom I must take at his word, to give this matter further consideration. It is worth taking that on board.

Gemma Doyle (Labour, West Dunbartonshire)

indicated dissent.

Bob Russell (Liberal Democrat, Colchester)

Well, the hon. Lady and I must beg to differ. I do not want her to think that her support for MOD firefighters and police officers is greater than mine. I was arguing in support of the MOD police when the previous Labour Government were cutting their numbers—so I can do without those sorts of comparisons.

I ask the Minister to give a categorical assurance on the concerns raised by hon. Members on both sides of the House. I particularly welcome the comments from the hon. Members for North Antrim (Ian Paisley) and for Blaydon (Mr Anderson) and my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes), who raised questions that have not yet been fully answered. My hon. Friend the Member for Argyll and Bute (Mr Reid) and the hon. Members for Stevenage (Stephen McPartland) and for Banff and Buchan (Dr Whiteford) also raised concerns.

Simon Hughes (Liberal Democrat, Bermondsey and Old Southwark)

I pay tribute to my hon. Friend’s work on this matter. I have had a chance to check the answer to the question from the hon. Member for West Dunbartonshire (Gemma Doyle). If the amendment were accepted, it would immediately transfer the people in question out of the civil service definition. They would get the benefit of an earlier retirement age, but they would also get the disbenefit of other comparative advantages. That is why we need a negotiated conclusion, not one-line changes to the Bill.

Bob Russell (Liberal Democrat, Colchester)

I am extremely grateful to my right hon. Friend. When I referred to the unintended consequences, I was not expecting a detailed exposé of what one of them would be.

With some reluctance, I am taking the Minister at his word about the unintended consequences, and I urge the House to do the same. I take on board everything that Lord Hutton has said subsequently about his not being aware of the issue. Trusting the Minister, I think that our MOD firefighters and police officers could conceivably end up better off. I repeat my basic point, however, because the MOD needs to move quickly to reassure the nation about our military depots and nuclear installations. I have seen Faslane at first hand, and we do not want a Dad’s Army—people my age—defending our nuclear installations or trying to put out fires in military establishments.

John McDonnell (Labour, Hayes and Harlington)

I welcome the new enthusiasm on both sides of the House for negotiating with trade unions. We have seen 18 months of industrial action followed by the imposition of a pensions settlement on a large number of civil service workers. I therefore welcome this enthusiasm for negotiating the issue out.

The Government’s policy on pensions was twofold: they wanted to bring together a consistent retirement age across the services, while, as part of public service reform, ensuring a process of modernisation, with retirement schemes reflecting the requirements of service delivery. From what we have received today, I think we are reintroducing an element of chaos into the retirement age. Far from ensuring consistency, we seem to be building anomaly upon anomaly. Far from pragmatically reflecting the reality of delivering a service, we are about to undermine another service.

On delivery, we should learn the lessons of 2007. I did not support the increase in the retirement age for firefighters in 2007, just as I have not supported this legislation. The lesson that the Fire Brigades Union taught us was that once we increase the retirement age in such a physically demanding job, apart from having a physical effect on those workers and their lives—and on their families, too—we do not save money, because people take ill-health retirement, as others have said. At the end of the day, this is not part of a modernisation process; it is a step backwards.

The other issue raised was consistency—this argument that there will be consistency across the uniformed services. However, that was never the case anyway, because we argued for the Prison Service and uniformed services in the health service to be included, but they were excluded. The issue of consistency is drawn even more sharply by the exclusion of the group of staff we are discussing in this debate, who are clearly part of a uniformed service. They are being discriminated against purely on the basis of who employs them. Firefighters who are employed by local government via a fire authority are within the scheme at age 60, whereas those employed by these other bodies are not. That is not just policy making on the hoof; to be frank, it is incompetent policy making.

As for the disbenefits, when a general agreement is taken into legislation in this way there is always the facility for the employer and others to adjust contribution rates, albeit as part of a negotiated settlement, but we usually legislate and then iron out the detail of

the contribution rates, with the matter usually being resolved through an adjustment of the employer’s contribution.

Let me turn finally to the process. The Minister helpfully tried to respond, but there was insufficient detail. If there is to be negotiation on this issue, we need at least a commitment about the time scale. There has to be a limited time scale, over the next three months, in which we can resolve these anomalies and give this group of workers some security, because the current insecurity is causing concern.

Chris Leslie (Labour, Nottingham East)

My hon. Friend is spot on. We need that time frame, but do we not also need a commitment from the Minister today that the age of 60—this is the equality issue—is, at the very least, a possibility that is on the table? So far we have not had that.

John McDonnell (Labour, Hayes and Harlington)

Today we have at least set out the parameters of what the negotiations will be. The age of 60 has to be No. 1 on the agenda, followed by ironing out other anomalies. The second issue is the point I raised in an intervention on the Minister. We have to have a clear definition of the legislative process by which the negotiated settlement will be speedily agreed through the House. Will it be tacked on to other primary legislation or might there be a speedy regulation change that enables us to implement the process?

Simon Hughes (Liberal Democrat, Bermondsey and Old Southwark)

I, too, pay tribute to the hon. Gentleman for the work he has done. I share his view that it would be helpful if the Minister indicated in the winding-up speech that there will be a fixed timetable for concluding the process and that the age change from 65 to 60 would be on the agenda. If he can do that, I think that realistically, given that we are at the beginning of this financial year, that would be acceptable. I have not cleared that with the unions, but we need something that gives some parameters and the Minister would carry us with him if he set them.

John McDonnell (Labour, Hayes and Harlington)

To go back a bit, I would also like some clarity about the legislative process. The time scale for negotiations can be set and the agenda for those negotiations clarified; my anxiety is that if we do not have a commitment on the time scale for legislation, the issue could be kicked into the long grass or even further. That would be seen by the workers as an act of bad faith unless a clear timetable was also given for the legislative process.

Simon Hughes (Liberal Democrat, Bermondsey and Old Southwark)

I have one quick thought—I am trying to be helpful. In every year there is inevitably a Finance Bill. This is a Treasury matter and could therefore be covered in the new Session by the Finance Bill.

John McDonnell (Labour, Hayes and Harlington)

That is all I am asking for: clarity of process and time scale. It would be extremely helpful, as an act of good will and good faith, for the Minister to take back a reference to this matter in the Queen’s Speech. That would indicate to those involved that the Government attach a priority to ironing out what has been accepted as an anomaly. It is one that might affect only a relatively small number, but it does so critically and in a critical service, as others have said.

Richard Fuller (Conservative, Bedford)

It is customary to say what a pleasure it is to follow the previous speaker, and in this case it is a great pleasure to have listened to the contribution from the hon. Member for Hayes and Harlington (John McDonnell). He asked precise questions and reinforced some of the points made by my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes) in order to move forward what the Minister had said earlier. Thanks to those two contributions, we are beginning to get to the real meat of the issue of how we can ensure that this group of overlooked public sector workers can find an acceptable and fair outcome to their pension situation after all these years.

Within the overall ambit of the Bill, I speak as one who sits outside the cosy compromise between Government and Opposition Members on the principles set out by Lord Hutton. Our decisions on pensions must stand the test of time. People make decisions about contributions to their pensions based on the expectation that those contributions will have an effect 20 or 30 years later when they retire. My concern about the compromise relates to affordability, given that we are asking the taxpayer to foot the bill.

I want to draw the House’s attention to the specific costs involved in the measure. I am sure that the Minister will correct me if I am wrong, but I believe that the amount involved is £10 million per annum. I am a big admirer of my hon. Friend the Member for Stevenage (Stephen McPartland), but he said earlier that £10 million a year was not really a considerable amount of money. I believe, however, that it is indeed a considerable amount of money to be paid year on year. Under the previous Government, it was that attitude that £10 million here and £10 million there did not really matter that led to the grotesque financial situation that we found ourselves in in 2010.

Stephen McPartland (Conservative, Stevenage)

Will my hon. Friend give way?

Richard Fuller (Conservative, Bedford)

I will give way to my spendthrift Friend.

Stephen McPartland (Conservative, Stevenage)

The point I was making was that, although £10 million is a lot of money at a personal level, I do not feel that it should be a reason to allow such discrepancies to continue. The House should be trying to create parity between all those who do that difficult job on a daily basis, and to focus on the overall package of measures rather than just on the pensions question. That £10 million could provide savings, as the Minister suggested earlier.

Richard Fuller (Conservative, Bedford)

My hon. Friend has characteristically drawn us to the centre ground. When we consider our public sector workers, we should look not at their pensions in isolation but at the broader question of the compensation terms and conditions under which they are employed.

As I have said, we are talking about a relatively small number of workers. Those members of our public services have a physically demanding job, but it is also a requirement of their public service employment that they are at times asked to put their lives at risk to maintain public safety. It behoves us to take a special approach to such workers and to the way in which their pension conditions are treated.

John Hemming (Liberal Democrat, Birmingham, Yardley)

Does my hon. Friend agree that this is about the physical efforts of the uniformed services, and that the £10 million will not derail the whole package? We need to be aware that certain jobs are particularly physically demanding, and that people cannot keep on doing them until they reach the relatively young age of my hon. Friend the Member for Colchester (Sir Bob Russell), for example?

Richard Fuller (Conservative, Bedford)

I do not wish to disagree with my hon. Friend, but I may have to do so. Many jobs in both the public and private sector are physically demanding, but I would not advocate a different retirement age purely on the basis of physicality. The Opposition Front-Bench spokesman tried to make a specific point about physicality, but I believe that that is the wrong course to take. I believe that this group of workers—the MOD police force and firefighters—have an additional requirement placed on them by us, the taxpayers, whereby we ask them as part of their responsibilities potentially to put their lives at risk, or at least to put the safety and interests of the public ahead of themselves. If I may say so, that is a far more appropriate basis for our looking at this particular issue. People may wish to make the case for physicality, but there is a special case here that goes above and beyond that. That is, I think, the reason why the Minister has taken such great interest in trying to find a solution on this issue.

I welcomed hearing the Labour party admit that it completely forgot about these people when it was in office and raised the pension age. Hearing that was welcome, because all Governments make mistakes and people do get missed out in the transitions. Let me explain what I would like to hear from the hon. Member for Nottingham East (Chris Leslie) today. There is a chance in future—I do not think it will be in 2015, but it is likely at some time for these public sector workers in the MOD, the fire service or the police force—of there being a Labour Government.

Chris Leslie (Labour, Nottingham East)

Hear, hear.

Richard Fuller (Conservative, Bedford)

I am pleased that the shadow spokesman raises that possibility. Is he therefore prepared to put his money where his mouth is—today? He has made a commitment, but is it just words? If he is so confident of being in office, will he pledge today to ensure that these MOD workers have the same conditions as he advocates? I give way if he wishes to make that pledge.

Chris Leslie (Labour, Nottingham East)

The hon. Gentleman knows, I hope, that we are not making this decision in 2015; we are making it here and now in 2013. We have to confront the issue. He is trying to find all sorts of reasons not to disagree with the Whips who are leaning on him, saying “Please do not vote with your conscience on this particular issue.” We have accepted that the issue should have been addressed in 2007. Now that there is no excuse for lacking awareness of it—it is being debated now—is he really going to vote today, in his full awareness of these facts, to say that this particular group of firefighters should not be entitled to retire at 60 when all the other firefighters are? Is that really what he is going to do?

Richard Fuller (Conservative, Bedford)

The hon. Member for Nottingham East is a fine fellow, but I have to tell him—[Interruption.] “Fine fellow” will be the beginning and end of my comments to him. [Interruption.] I will come to the point, as this strikes at the credibility of the political class in this country. What the Labour party spokesman is trying to do is to use words to set up people’s expectations without taking the responsibility to fund them. That is why the political class is seen through by the public, who are fed up with politicians making up arguments that exist in the world of fancy but not in the hard reality in which people live. If I may say so to the fine fellow opposite, if he wants to be honest to the British people and, more importantly, to the people whom this amendment is designed to represent, it is his responsibility to pledge today to put taxpayers’ money where his mouth is if he is ever in government. I note that that is a commitment that he has very specifically missed out today.

John Hemming (Liberal Democrat, Birmingham, Yardley)

The Opposition seem to be saying that the decision should be made today without negotiation, but does my hon. Friend agree with me that negotiation is the best way forward, and that to have such negotiation, we need to support the Government’s proposal for negotiation?

Richard Fuller (Conservative, Bedford)

I am grateful for my hon. Friend’s second intervention, because it enables me to agree with him this time. As I said at the start of my speech, the hon. Member for Hayes and Harlington and the right hon. Member for Bermondsey and Old Southwark made the same point in pressing the Minister for more specificity. I, too, wish to ask him for clarification on that point.

Dawn Primarolo (Labour, Bristol South)

Order. May I remind the hon. Gentleman that the debate is time-limited? If he wishes to hear the Minister’s clarification, he must leave time for it before the debate ends at 5.37 pm.

Richard Fuller (Conservative, Bedford)

I shall attempt to make my points speedily, Madam Deputy Speaker.

The hon. Member for Hayes and Harlington made two requests. He asked when the negotiations that may be conducted between the Ministry of Defence and the workers and their representatives would have to be concluded, and suggested a three-month time frame. I support that recommendation. He also asked for an indication from the Minister, today if possible but otherwise in a subsequent letter to Members, of what the legislative process would be for the reaching of a resolution. I think that both those suggestions are very worth while.

Will the Minister confirm that the assessment by MOD and the workers’ representatives will not specify a particular retirement age, and that the decision will be based on an assessment of the potential ability of members of those work forces to do their jobs effectively? Will he also confirm—I think he said this earlier, but confirmation would be helpful—that the scheme will be flexible enough to allow us to make the changes without any limit, but that it will be up to those in the scheme to make the recommendations? I hope that he will be able to make those two commitments today.

It is important for the Government to be able to maintain a dialogue about the retirement age of our firefighters, both in the MOD and outside it. We are embarking on unknown territory, and I think that a Government who listen to these workers will be seen to be truly putting their money and their heart where their mouth and commitments are.

Sajid Javid (Conservative, Bromsgrove)

I thank all who have spoken during the past hour. I also thank my right hon. Friend the Member for East Yorkshire (Mr Knight), who could not speak in the debate, but who has an interest in the issue and has made representations to me on behalf of his constituents. I hope that I shall be able to respond to the points that have been made in the time that is available to me.

Both my hon. Friend the Member for Argyll and Bute (Mr Reid) and the hon. Member for Banff and Buchan (Dr Whiteford) made a number of points. As they will understand, I could not agree with everything that they said, but they both made the sensible point that the Treasury and the MOD should take account of those who retire early on health grounds when considering the potential cost implications of the changes that we are discussing. I agree that we must bear in mind all the impacts on costs that the amendments might have.

My hon. Friend the Member for Stevenage (Stephen McPartland) also raised a number of issues, including the important issue of the Opposition’s credibility in this regard. Some MOD firefighters and police officers who are listening to the debate will already have a retirement age of 65 rather than 60 because of the changes made by the last Government in 2007. When the hon. Member for Nottingham East (Chris Leslie) speaks about such matters, his own credibility becomes somewhat shallow.

I do not often agree with the hon. Member for Blaydon (Mr Anderson). I again did not agree with much of what he said, but I know he believes passionately in what he says, and I respect fully what he had to say. He is a great advocate for his constituents, but he, too, did not address the issue of the change that was made in 2007, and nor did his party colleague, the hon. Member for Hayes and Harlington (John McDonnell). For the purposes of this debate, it would be useful to know whether the hon. Members who have spoken up today also did so when the retirement age was changed in 2007.

David Anderson (Labour, Blaydon)

rose—

John McDonnell (Labour, Hayes and Harlington)

rose—

Sajid Javid (Conservative, Bromsgrove)

I give way first to the hon. Member for Blaydon.

David Anderson (Labour, Blaydon)

If the Minister checks the record tomorrow, he will see that I specifically said I made a mistake, and I also made a point about the Liberal Democrats not raising this issue at that time. The Minister is therefore wrong if he is saying I did not deal with the issue.

Sajid Javid (Conservative, Bromsgrove)

I shall now give way to the hon. Member for Hayes and Harlington.

John McDonnell (Labour, Hayes and Harlington)

I did not make a mistake: I opposed the lot.

Sajid Javid (Conservative, Bromsgrove)

That is characteristic of the hon. Gentleman, as he opposes a lot in this Chamber, and perhaps did so even when his party was in government.

My hon. Friend the Member for Colchester (Sir Bob Russell) raised a number of points. I agree with his comments about fitness for the purpose. He asked about whether MOD firefighters and police officers are fit for the purpose and that is key, because it is essential that we set retirement ages that are appropriate for the jobs in question, as I said in my opening speech.

My hon. Friend also touched on the related issue of pension contributions. If we just accept these amendments, there will be consequences from the changes. The hon. Member for West Dunbartonshire (Gemma Doyle), speaking for the Opposition, intervened on my hon. Friend on that matter, but what she said was wrong, because there would be consequences. We would have to think about who would pay for these changes, and if there were a change in the retirement age we clearly could not have a situation where, for instance, the civilian firefighters and the MOD firefighters had the same retirement age but paid different pension contributions. We would have to consider such issues. The hon. Lady knows that such issues exist, and it does not serve this House well to pretend they do not.

Chris Leslie (Labour, Nottingham East)

The Members who have engaged in this debate were asking the Minister to see whether there would be any movement, and one issue raised was the time frame for any potential negotiation on movement. I happen to think we should hold out for 60—that that should be the decision today—but I do want to ask the Minister: is he sure there is the potential for going to 60 for MOD firefighters and civilian firefighters without primary legislation? I am worried that, if we let this matter pass today, we might not be able to deal with it through regulations and secondary legislation, and that we will instead require primary legislation if we are to have the potential to get parity. Can the Minister confirm that we would need primary legislation for that?

Sajid Javid (Conservative, Bromsgrove)

I was going to come to that issue, because my hon. Friend the Member for Bedford (Richard Fuller) and the hon. Member for Hayes and Harlington, as well as the Opposition spokesperson, raised it. I will say a bit about the MOD process, but first let me repeat an important point: this is a broad-ranging Bill to deal with all public sector pensions, affecting approximately 12 million individuals, by addressing the issue of increasing life expectancy and seeking to find the necessary savings in a fair way from employees, employers and the taxpayer. It is framework legislation: it sets the general framework for individual schemes, but that is all it does. It is for the individual employer organisations and the employees to negotiate the terms of each scheme.

We deliberately set up the legislation to provide significant flexibility, so that if the MOD, and therefore the Government, decide at a later date that the retirement age needs to change, it would not require further legislation. The MOD can make the decision in discussion with stakeholders and others. The legislation will give not just the MOD but all public sector employee organisations flexibility to deal with the particular circumstances of their schemes.

My hon. Friend the Member for Bedford and the hon. Member for Hayes and Harlington both asked about the time scale. I hope that tomorrow in the other place my noble Friend Lord Newby can give a bit more information about the time scale, because I have heard the desire of this House for that. The most important thing is that the issue is considered in the round, with the terms and conditions that are being negotiated for other schemes in the public domain. I expect the MOD to hold discussions within the same time frame.

The MOD has already fired the starting gun for those discussions, and has written to the members of the forces the legislation might affect. I am glad that process has started.

John McDonnell (Labour, Hayes and Harlington)

When the legislation leaves this House and goes back to the other place, could the Minister write to us explicitly about the generality of the Bill—about its being a framework Bill? It seems curious that a framework Bill lists a number of categories of worker whose retirement age will be at 60. That is why many people felt they needed to be included in that list if they were to be protected. It seems odd that the Minister is now saying, “Don’t worry because it is a general framework Bill.”

Sajid Javid (Conservative, Bromsgrove)

The Government have been very clear that one of the purposes of the Bill is to deal with increasing life expectancy and longevity. That is why retirement ages are increasing for almost all public sector workers, and there is a link to the state pension age. The Government must address the issue; it was something the previous Government ducked, but it is vital for making the public finances more secure. That situation has not changed. What I am outlining today, with regard to the issue relating to MOD firefighters and police officers, is that there is flexibility within the MOD scheme for it to come up with a different arrangement. The MOD has agreed to look into that. It has not made any decisions, but I am sure that it will look very carefully indeed at the issue.

Chris Leslie (Labour, Nottingham East)

The Minister says that the Bill is flexible. May I direct him to page 23, schedule 1, where there is a definition of fire and rescue workers? It states:

“In this Act, ‘fire and rescue workers’ means persons employed by…a fire and rescue authority in England or Wales…the Scottish Fire and Rescue Service, or…the Northern Ireland Fire and Rescue Service Board.”

Currently, that reference does not include Ministry of Defence firefighters. Can the Minister tell us that it does not require primary legislation to amend schedule 1 in that way?

Sajid Javid (Conservative, Bromsgrove)

I thought I made myself clear but I will say it again: it would not require primary legislation if the MOD decided it was appropriate and right to make any changes to the retirement age.

Simon Hughes (Liberal Democrat, Bermondsey and Old Southwark)

The Minister is being very helpful. In answer to an earlier question, he alluded to the timetable that has started. Would it be reasonable to assume that the negotiations are intended to be concluded by the MOD during this financial year at the latest?

Sajid Javid (Conservative, Bromsgrove)

My right hon. Friend asks a good question. I have heard the desire of the House for a timetable and I respect that. I will ask my noble Friend Lord Newby to speak further on that point tomorrow.

The hon. Member for Hayes and Harlington asked me to write to him on a specific issue, and I will. I heard that point.

This has been a passionate debate. The Government have been very clear that we value tremendously the work of MOD firefighters and police officers. We have heard clearly the issues that have been raised today and how passionately they have been argued. I hope that I have managed to persuade some hon. Members—no doubt I have not managed to persuade all of them—that the Government take the issue seriously. The MOD will be looking into the issue and has already set the ball rolling. I hope that that will be a speedy process, and I urge the House to vote against the amendments.

Crime and Courts Bill [Lords] (Programme) (No. 4)

Crime and Courts Bill [Lords]

Maria Miller (Conservative, Basingstoke)

I beg to move, That this House agrees with Lords amendment 17A.

Nigel Evans (Conservative, Ribble Valley)

With this it will be convenient to discuss the following:

Lords amendment 17B.

Government amendments (a) and (b) in lieu of Lords amendment 131A.

Maria Miller (Conservative, Basingstoke)

Hon. Members will recall that on Report on 18 March the House agreed to a number of new clauses which, together with an amendment to the Enterprise and Regulatory Reform Bill, implement the legislative parts of the cross-party agreement on Leveson. They will also remember that the published clauses, along with the royal charter, enabled the Government to bring forward a cross-party agreement based on a system of incentivisation rather than compulsion. There will be a tough system of self-regulation that avoids full statutory regulation—the Rubicon that the Prime Minister and I refuse to cross. The clauses will put in place the incentive-based, self-regulatory system for the press envisaged by Lord Justice Leveson.

The other place agreed, by and large, with the Commons amendments, but there is one substantive issue that we need to resolve: namely, the position within the new framework of small-scale bloggers. Government amendments (a) and (b) in lieu of Lords amendment 131A address that issue.

It might assist the House if I put the amendments in context by explaining our approach to the definition of “relevant publisher”. At present, four interlocking tests define who is and who is not a relevant publisher for the purposes of these provisions. A relevant publisher must meet all of those. They must publish news-related material, be written by different authors, be subject to editorial control and be published in the course of business, whether or not that is with a view to profit.

We want to ensure that the new approach acts as the incentive that Lord Justice Leveson intended, but we have to be clear and careful about which publishers are covered. He said of the new regulatory body:

“Ideally the body would attract membership from all news and periodical publishers, including news publishers online. It is important for the credibility of the system, as well as for the promotion of high standards of journalism and the protection of individual rights, that the body should have the widest possible membership among news providers.”

However, he was also clear that:

“This is not meant to be prescriptive at the very small end of the market: I would not necessarily expect very small publishers to join the body”.

We have therefore provided a definition of “relevant publisher” that captures national newspapers and their online editions, local and regional newspapers and their online editions, and online-only edited, press-like content providers.

Mike Freer (Conservative, Finchley and Golders Green)

My local newspapers are concerned about why regional and local newspapers are caught in the new legislation,

when they were not found to have had a hand in the scandal that brought us to where we are. Will my right hon. Friend reiterate why they are included?

Maria Miller (Conservative, Basingstoke)

My hon. Friend is right that that point has exercised many individuals both within the Chamber and outside. It was clear from Lord Justice Leveson’s report that it was his intention for the local press to be part of the new self-regulatory regime. Equally, he understood that there are clear financial pressures on the local press, as there have been for many years, and that provisions might be needed within the self-regulatory regime that treat them differently. That is something for the press to deal with and I understand that they are looking at it. It is important, however, that the local press are part of the opportunity to have self-regulation. I reiterate to my hon. Friend that it is exactly that—self-regulation—and that there is no compulsion. I hope that that provides the reassurance that he is seeking.

Exemplary damages and costs are designed to cover what might be termed more sophisticated news publishers, and will act as a key incentive to join the new press regulator. It is therefore essential that the definition of “relevant publisher” equates to the publications that we expect to be part of the regulator.

Equally, the definition is not intended to capture a host of activities, including small-scale activity online. It is not intended to capture the news aggregation services of operators such as Yahoo! or MSN, or social networking sites. Nor is it aimed at sites that simply moderate the comments of others or aggregate a series of blogs without any active consideration of the content. By that I mean blog hosting services such as WordPress or Tumblr.

I want to be really clear about the matter, because I know that many hon. Members have examined it in detail. To the extent that a website such as Mumsnet runs an online blog forum, that activity is clearly not covered by the definition of “relevant publisher”, as forums are not covered. The provisions may be relevant to a site such as Mumsnet only if it is in the business of commissioning articles and publishing news stories. Such businesses undertake different activities, one of which may well be publishing news, which would bring them into the scope of self-regulation. However, forums such as the one run by Mumsnet would not be covered.

I also wish to clarify again the effects of the definition of “relevant publisher” on news aggregators. It is not our intention that the provisions should capture news aggregators such as Yahoo!, MSN or Google. News and content aggregators who license or otherwise acquire news-related content from third parties control that content only in as far as they decide how to present it in its totality, and to that extent they are not subjecting the material to editorial control. It is therefore not intended that services providing a platform for bloggers to post content are captured. Again, the control exercised by aggregators is limited to the high-level presentation of content, so news aggregators are not captured by our definition.

We have, however, acknowledged the need for clarity, particularly with regard to small-scale blogs. When the provisions were last discussed in the other place, we undertook to have a period of reflection to assess

whether any further clarity would be helpful and could be provided. My officials have since held a number of round-table discussions with small-scale blog sites to understand their concerns further. The amendments that we have tabled, with cross-party agreement, seek to provide that further clarification.

Amendment (a) will add to the list of exemptions micro-businesses where they are a blog or where their publications are merely incidental to their other business. For organisations that publish news-related material incidentally to their main activity, that exemption will cover both online and traditional print. We use a definition of a micro-business commonly used by the Department for Business, Innovation and Skills, which captures any business with fewer than 10 employees and a turnover of less than £2 million. The amendment will ensure that a micro-business that is either a small-scale blog or a website whose publication of news-related material is only incidental to its wider business is not included. That should place many blogs and other small web publishers squarely outside the incentives framework.

Amendment (b) will allow those not captured to get the benefit of the costs incentives if they choose to join the recognised regulator, even though they are not a relevant publisher. That means that those exempted by virtue of the fact that they are a micro-business can choose to gain the benefits of the costs clauses by joining the regulator, providing an incentive for them to join if they so wish and a choice to small organisations, perhaps before they grow in size and inevitably become a relevant publisher. That is an important addition that will help support that part of the market.

I can deal briefly with Lords amendments 17A and 17B. In short, the objective of the new costs regime is to incentive publishers financially to join the regulator. The intention behind subsection (2)(a) of the new clause “Awards of costs”, originally inserted in the Commons, is to allow costs to be awarded against a regulated publisher only if the claim before the courts is not capable of being resolved through the self-regulator’s arbitration scheme. However, to achieve that effect, the word “not” needs to be inserted into that subsection to avoid the opposite being the case. That was a simple drafting error that is corrected by Lords amendment 17A.

Lords amendment 17B removes subsection (4) of the new clause “Awards of costs”, which we have concluded after further discussion is unnecessary and unduly restrictive.

The clauses to which the Lords amendments relate have been carefully constructed to enable a system of incentivisation, which will form the basis of a new, tough self-regulator for the press in line with Leveson principles. The amendments are far removed from those that the noble Lords Skidelsky and Puttnam, among others, proposed for consideration in this House. Let us be clear that had we not successfully negotiated a cross-party royal charter, the House could well be debating a system of full statutory regulation that would have undermined the freedom of this country’s press.

John Redwood (Conservative, Wokingham)

I am grateful to the Secretary of State for trying to give us greater clarity. Does she intend that websites run by political parties and MPs that comment on news and current affairs will not be included in the system?

Maria Miller (Conservative, Basingstoke)

As always, my right hon. Friend cuts to the quick with a question that is important to many of us. If he examines the detail of our provisions and exemptions, and the Leveson report, he will see that the intention behind everything that we are doing is to focus self-regulation on those who publish news. I do not believe that any political party or MP intends primarily to publish news. That will be secondary, so it is not our intention that such websites should be the primary focus of the provisions. Obviously, there will be areas in the margins that need further clarification, and the courts will be able to provide that over time.

Julian Huppert (Liberal Democrat, Cambridge)

I am pleased that we are able to examine these details, because there has been much concern. I would be grateful for guidance on a few specific issues about how the provisions should be interpreted. For example, a lot of multi-author blogs involve people who are self-employed or who work on a voluntary basis. How should the number of employees be dealt with? Will the Secretary of State provide guidance on that, and on what the definition of a blog is?

Maria Miller (Conservative, Basingstoke)

It will be full-time employees who are included in the employment measure, which is why it is important that not just employment but turnover is considered. Many organisations utilise a number of self-employed people, hence the twin-track approach.

We have set out what we anticipate being considered a blog, which is about individual opinion being set forth through electronic media. That is relatively straightforward, although as I said to my right hon. Friend the Member for Wokingham (Mr Redwood), there will always be more difficult matters to consider at the margins and the courts will be able to provide further information. We will also provide guidance in the usual way.

The amendments address concerns raised by small-scale bloggers and other small businesses and will ensure that the definition of “relevant publisher” captures the news publishers that were the focus of Lord Justice Leveson’s inquiry. They have the full support of all three major parties in the House, and on that basis I commend them to the House.

Helen Goodman (Labour, Bishop Auckland)

I am pleased to be able to take part in this debate, which nails down the final details of the recommendations that Lord Justice Leveson made about setting up a new self-regulatory system for the press. When the Bill was introduced into the House a year ago, Lord Justice Leveson had not even reported, so we were fortunate to be able to thumb a lift with the Bill.

On 18 March, on Third Reading, the House agreed to insert new clauses providing for new rules on exemplary damages and costs. They are an essential part of the cross-party agreement on a royal charter, which is part of the new framework of independent self-regulation guaranteed by law.

As the Secretary of State said, the Bill aims to provide publishers with incentives to sign up to the new system of self-regulation that should meet the criteria set out in the royal charter. Publishers that join the recognised regulator will receive protection from the award of exemplary damages in media disputes, the opportunity to use an arbitration service, and cost benefits from having access to the arbitration service—that is one

reason why it would benefit local as well as national newspapers. If a complainant chooses not to use the arbitration service, they can still be liable for costs even if they win.

Lord Justice Leveson’s report was about the press, but the original drafting had the unintended effect of catching blogs in the net—a point noted in this House by my hon. Friend the indefatigable Member for West Bromwich East (Mr Watson). That said, Lord Justice Leveson expressed the hope in recommendation 73 of his report that online publishers would also join a regulator. The Bill therefore needed to be amended to ensure that exemplary damages did not apply to blogs, but that they could receive the benefits of joining a recognised regulator. The Lords agreed a number of amendments, including a placeholder amendment, on 25 March.

The Government’s decision to hold a “mini-consultation”—as I think the Secretary of State called it—to pause for reflection and consider the blogosphere was sensible. With the best will in the world, middle-aged Members of Parliament in both Houses are perhaps not absolutely up to speed with the way in which the blogosphere operates among the next generation, but I think we have now got it right. The Labour party agrees with the policy objectives that the Government are seeking to address: to exempt micro-businesses from the definition of “relevant publisher” where they are a blog or their publications are merely incidental to their other business; and to enable such micro-businesses to receive the benefits and cost incentives if they join a recognised regulator. The amendments use the micro-business definition for a small blog as one whose turnover is below £2 million and has up to 10 employees. It exempts such businesses from exemplary damages and enables them to benefit from the cost advantages of an arbitration service if they join a regulator—that last point will be particularly welcome in that community.

Labour supports Lords amendments 17A and 17B and amendments (a) and (b) in lieu of amendment 131, and we will not divide the House in this debate. However, there is a thicket of double negatives, and for those outside the House who are following proceedings closely I ask the Secretary of State to provide assurances and clarity on a couple of points. Will she tell the House whether this approach minimises the risk of gaming, in particular by groups of companies? What is the position of campaigning groups’ newsletters—the right hon. Member for Wokingham (Mr Redwood) raised that point? I thought that Mumsnet would be excluded because its primary purpose is not to publish news—it is clear that motherhood is not a hobby, so it is not excluded on those grounds—or, indeed, UK Feminista. Neither of those is a charity and it might help if the Secretary of State said a little more about the newsletters of campaigning groups.

Will she confirm that access to the arbitration system for those outside the regulatory body is limited to small-scale blogs, and say why she chose that approach? The hon. Member for Cambridge (Dr Huppert) asked about the definition of “blog”, and I assume that the Secretary of State has received legal advice that the word will be properly interpreted. She has already explained why she is addressing only the number of employees, and not those who are self-employed, but if she could elucidate a little on those points it would be helpful and we will be happy to support her this evening.

Julian Huppert (Liberal Democrat, Cambridge)

I do not wish to detain the House long but I am pleased that we have finally reached this point and that important details of Leveson are agreed. If I had been asked when I first looked at the Crime and Courts Bill which part I thought would keep us in ping-pong, it would not have been this provision or anything to do with blogs. I do not know whether the hon. Member for Bishop Auckland (Helen Goodman) was referring to me as a middle-aged man. I am the proud holder of a Liberal Democrat Voice “blogger of the year” award, but even I would have struggled desperately to write this provision or make all the definitions. I hope that the Secretary of State has been able to be clear. There will be people who try to game this, but that is true of all legislation. I hope that the Bill has been made as game-proof as possible, while preserving the pleasure of the games that people play on blogs. I am delighted that we are at this point and I will not take up any more of the House’s time. I look forward to the Bill being enacted and I hope that the Secretary of State will clarify those few remaining points.

Maria Miller (Conservative, Basingstoke)

I thank the hon. Member for Bishop Auckland (Helen Goodman) for her helpful support as we try to resolve the final details of the Bill. Hon. Members have raised a number of issues in the short period that we have to debate the Bill, and hopefully I can resolve them to everybody’s satisfaction.

I think that by “gaming” the hon. Lady meant the ability of companies to try to buck the system we have set up. It is always difficult to give a categorical assurance on that, but I think our approach minimises the risk of organisations taking such an approach. We have minimised the risk by using the definition of a micro-business, which does not just consider one element—staff—but staff and turnover. Therefore, if an organisation decided to ensure that all its staff were freelancers, it could not then play with its turnover in a way that would make it a micro-business. Equally, individual businesses will find it difficult to disaggregate their businesses in a way that would leave them registered as micro-businesses, and then duck the system without compromising the way in which they operate on a day-to-day basis. Furthermore, a court will be capable of looking at the facts of a case to see whether an organisation has attempted to get around the rules, and that would be a material consideration. If an organisation was trying to circumvent the rules in the way it structured itself, the usual sanctions would be available.

We are interested in many different organisations, but particularly campaigning groups. A number of other exemptions already exist in the definition of “relevant publisher” that deal with campaigning newsletters—a point that the right hon. and learned Member for Camberwell and Peckham (Ms Harman) and I have discussed on a number of occasions. A public body or charity that publishes news-related material in connection

with carrying out its functions, or a person who publishes a newsletter, circular or other document relating to their business that contains news-related material only incidentally, will not be caught by the self-regulatory approach. Such things will be exempt from these measures, which is important. News, and the delivery and publication of news, is not central to a company’s business, and I underline that point for all questions raised by hon. Members. Hopefully, that will provide some certainty on campaigning groups.

The fourth point raised by the hon. Member for Bishop Auckland was access to arbitration for those that may not be termed as “relevant publishers”, other than those that are micro-businesses—excuse me, Mr Deputy Speaker, for getting into the weeds with this, but it is necessary to answer the hon. Lady’s questions. Our consideration of micro-businesses in connection with blogging was to ensure that we did not unintentionally capture those businesses within the self-regulatory system, and also to ensure that those businesses were able—should they choose—to opt in to the self-regulatory part of the framework if they felt that was beneficial. It was never our intention more broadly to allow people to become a “relevant publisher”, not least because that would be outside the scope of today’s discussions. It is not our intention to allow people who are not relevant publishers in that way to have access to that status over and above the exemption we have outlined. Anything to do with the running of the self-regulatory regime is for the press to consider in more detail. We did not intend to cover that in our proposals today—the hon. Member for Bishop Auckland has raised that matter with me.

The hon. Member for Cambridge (Dr Huppert), speaking for the Liberal Democrats, raised the final issue of the definition of “blog”. We are comfortable that there is a clear articulation of “blog” and “news”. Blogs are to do with the expression of the point of view of an individual or group of individuals. That is pretty straightforward, although, as with everything else, it will be subject to the courts’ deliberations at the appropriate time.

Finally, the hon. Member for Bishop Auckland implied that the Government believed an error had been made on micro-blogs, which therefore required an amendment. I should gently tell her that we feel that the measure was reasonably clear to start with, but that the amendment adds extra clarity. In that spirit, I thank you, Mr Deputy Speaker, for allowing me to explain the amendments. I also thank the hon. Lady for her support, and the hon. Gentleman who spoke for the Liberal Democrats for his support.

Lords amendment 17A agreed to.

Lords amendment 17B agreed to.

Government amendments (a) and (b) made in lieu of Lords amendment 131A.

Partnerships (Prosecution) (Scotland) Bill [Lords]

David Mundell (Conservative, Dumfriesshire, Clydesdale and Tweeddale)

I beg to move, That the Bill be now read the Third time.

The Bill takes forward the proposals of the Scottish Law Commission to address the loophole in Scots law that prevents the prosecution of partnerships that have dissolved. It addresses the limitation of the law in Scotland which meant that attempted prosecutions could not proceed following the serious fire at Rosepark nursing home in Uddingston, Lanarkshire on the night of 31 January 2004, when 14 people tragically lost their lives. Rosepark was run by three individuals who had come together to form a business partnership. Following the fire, the partnership dissolved. The partnership, as employer, was alleged to have committed offences under the Health and Safety at Work Act 1974. The Crown Office made three attempts to prosecute the partnership, but as the High Court had held that the partnership ceased to exist on dissolution, the prosecutions could not proceed.

In November 2012, the Bill was introduced to Parliament by the Advocate-General for Scotland. The Bill is one of only three Scotland-specific Bills introduced in Westminster since devolution. It reminds us that Scotland has two Governments and two Parliaments, both with their own contributions to make in improving the lives of people in Scotland.

The Bill marks a significant milestone. This is the first occasion when the House of Lords special Public Bill procedure for Law Commission Bills has been used in relation to Scottish Law Commission proposals. The special procedure allows non-controversial legislation to sidestep the competition for parliamentary time on the Floor of the House. The Bill demonstrates why that procedure is so valuable.

The Bill progressed through Committee in both Houses, allowing close and robust scrutiny of each of its clauses, with good opportunity for debate. It has received broad consensus from all sides. I thank the hon. Member for Glasgow North East (Mr Bain) and all hon. Members who have participated in the process.

The Government are grateful to the Scottish Law Commission, and in particular to Patrick Layden, who has worked tirelessly alongside the Advocate-General for Scotland and the Scotland Office to produce a Bill that provides a very simple, very sound solution that ensures that partnerships and culpable partners cannot evade prosecution by dissolving.

The support demonstrated by hon. Members is gratefully noted. We are particularly grateful to the hon. Member for Lanark and Hamilton East (Mr Hood), in whose constituency the Rosepark nursing home was situated. We also gratefully note the support of the Scottish Government. We are immensely grateful for the support demonstrated by the Lord Advocate, the Faculty of Advocates and the Law Society of Scotland, which have all broadly welcomed the Bill, in giving evidence to the special Public Bill Committee in the other place.

The provisions of the Bill are to be commenced the day after Royal Assent. The Bill makes valuable and necessary reforms to the law of partnerships in Scotland and I commend it to the House.

William Bain (Labour, Glasgow North East)

The Opposition endorse Third Reading. Throughout previous stages of the Bill both in the House and in the other place, right hon. and hon. Members have kept very much at the forefront of our minds the families and the 14 people who lost their lives in the dreadful fire at Rosepark nursing home in Uddingston, south Lanarkshire, which was caused by an earthing fault at the back of an electrical distribution box in a storage cupboard at the nursing home.

As I said in Second Reading Committee, a fatal accident inquiry in 2011 chaired by Sheriff Principal Brian Lockhart established that some or all of the lives lost could have been saved if a risk assessment had been conducted and if it had led to the taking of reasonable precautions. That could have avoided or minimised the loss of life. The inquiry found fault with the maintenance of the electrical installation at the care home; inadequate fire safety and drills; inadequate management of fire safety, which was found to be systematically and seriously defective; and weak interaction between the nursing home and Lanarkshire health board.

The laws we make in this House can never repair the feelings that arise from the loss of loved ones, but the Bill will ensure that others never suffer a similar lack of closure as a result of flawed processes in the criminal law caused by deficiencies in the law of partnerships in Scotland. We should therefore welcome the work of the Scottish Law Commission on the matter, its continuing contribution to keeping the laws of Scotland made by both Parliaments under review, and its recommending modernisation when necessary in the public interest.

In particular, we welcome the work predating the Bill that was done on the consultation process by the commission’s chair, Lady Clark, the former Member for Edinburgh Pentlands and former Advocate-General for Scotland; by the commission’s previous chair; by Lord Drummond Young; and by Mr Patrick Layden QC. Although the Scottish Law Commission consulted widely on whether it should attempt to deal with the problem by virtue of a comprehensive reform of partnership law, in the end, pending consideration of wider reforms, the commission settled on the more targeted solution of permitting partnerships to have a degree of continuing legal personality for a limited period in terms of criminal proceedings and prosecutions.

The Opposition welcome the fact that the Bill shows this Parliament’s continued belief in the importance of the reform of private law in Scotland under areas reserved to the UK Parliament under the Scotland Act 1998. Scotland has two Parliaments that make laws on behalf of its people. It is noteworthy that the Bill is the third Scotland-only Bill on a reserved matter to be debated in this House since the devolution of power to the Scottish Parliament in 1999. I hope there will be many more of them in the future, should the people of Scotland choose to remain within the United Kingdom in the referendum to be held next year.

The tragedy at Rosepark nursing home in 2004 claimed the lives of 14 residents. However, because the partnership that owned and managed the home was dissolved after

the fire, but before the Crown Office in Scotland could initiate any proceedings for prosecution, the partnership could not be prosecuted. That principle was established in the case of Balmer

v.

Her Majesty’s Advocate in 2008. Following the decision in that case, the Scottish Law Commission published a discussion paper and consulted on possible options for reforming the law of partnerships in Scotland in this area. That consultation led directly to the Bill before the House this evening.

It is an important principle of commercial law that the legal personality of a company or partnership differs from that of the directors or partners. It is possible to prosecute a partnership in Scotland quite separately from the individual partners under Scots criminal law. Indeed, it is vital that we uphold the concept that legal persons, as well as the individual partners in their own right, can be subject to liability for actions deemed to be breaches of the criminal law.

Another core principle of the law of partnerships in Scotland is that of joint and several liability for civil and criminal obligations incurred by the partnership. Should a partnership be convicted of an offence following prosecution and be subject to a fine, then any or all of the partners may be held liable for payment of any such fine imposed by the courts. That has been seen as critical in ensuring that the law can attach responsibility for payment to at least one member of the partnership. That partner then has the right to seek recompense for the outstanding share of the financial liability thereby incurred from the other partners, through a civil action under the partnership agreement and the Partnership Act 1890.

The Bill closes the loophole in the law that was exposed by the Rosepark tragedy. It will permit a prosecution to be brought against a dissolved partnership up to five years following the deemed dissolution in respect of conduct that arose out of the partnership while it was still in existence. Actions in criminal law may also be brought against partnerships where the composition of partners or the membership structure have altered, where partners have left, or new partners have joined. Any member of a partnership may thus still be liable for any criminal offences committed while a member of the partnership and through any change in composition.

Circumstances that could give rise to prosecutions under the clause include: potential breaches of section 36 of the Health and Safety at Work etc. Act 1974; cases where an individual’s acts or omissions have been a cause of the offence; cases where an individual is held guilty, art and part, of a common-law or statutory offence; cases where an individual has aided, abetted, counselled or procured the commission of an offence under statute law; or cases where an individual has committed an offence with their consent or connivance, or even through neglect. The range of offences potentially liable for commission by individual members of a partnership was significantly widened by the Scottish Parliament, through section 53 of the Criminal Justice and Licensing (Scotland) Act 2010.

Should a partnership be convicted of an offence, any legal rule, whether in statute or common law, relating to the liability of the partners, applies as if the partnership had not been dissolved. This permits joint and several

liability for any fine imposed by the courts following a successful prosecution, in line with sections 4 and 9 of the Partnership Act 1890 and subject to the provisions in clause 3 of the Bill. Any fine imposed following a conviction may be recovered against the assets of the partnership, or any or all of the individual partners, each of whom would have a right to claim a remedy for the other shares from assets of the partnership, or from the other partners’ personal assets. In some statutes, such as the Health Act 2006, the law restricts the payment of fines to the partnership assets only, but for a dissolved partnership under the Bill that rule will not apply, because if a partnership is dissolved there will be no partnership assets and any fine might otherwise prove to be unenforceable—that would be unacceptable.

The sole element of contention that arose during the passage of the Bill, in this House and in the other place, stemmed from clause 4, under which it is possible for someone to have joined a partnership after the commission of a potentially prosecutable offence and then face liability for some or all of any penalty applied by the court following a finding of guilt, despite the fact that that person was not involved at the partnership at the time of commission of the offence. That was a significant concern for the Law Society and others in Scotland, as many businesses are organised through the partnership model.

I moved a probing amendment in Committee, following similar amendments that had been moved in the other place, to test the arguments as to whether an exemption could be created for innocent partners who become members of a firm, but are unaware of any potential criminal liability that could give rise to conviction and the imposition of a fine, who then face demands to meet a share or even the entirety of a fine from personal assets in the absence of partnership assets or personal assets from the pre-existing members of the firm. We were reassured by the Commission that it is likely to keep the operation of this provision under review, and that a more comprehensive analysis of the potential reform of partnership law remains a possibility. In that spirit, we were happy to withdraw the amendment.

In conclusion, the Bill closes an important loophole that the unsuccessful attempts to prosecute the owners of Rosepark nursing home, following the fatal fire, brought to light. We cannot remove the suffering that the families and loved ones of the deceased have experienced in these past nine years, but we can ensure that, by enacting these reforms, other people affected by the conduct of partnerships are never put in a similar position again. That is the best tribute we in this Parliament can make to the 14 people who so tragically and unnecessarily lost their lives. For those reasons, the Opposition strongly support the Bill.

Michael Weir (Scottish National Party, Angus)

I would also like to add my support to the Bill. You may be witnessing an almost unique occasion, Mr Deputy Speaker: all parties in this House and the Scottish Government and Parliament support the Bill and are anxious for it proceed. As has been said, the genesis of the Bill was the Rosepark fire—a great tragedy in which many people unnecessarily lost their lives—and the inability, because of this quirk in Scottish partnership law, to prosecute. It is important that that is put right.

We had a good debate in Committee. The speech from the hon. Member for Glasgow North East (Mr Bain) probably went on as long as the Committee stage, but the Bill was considered in Committee in detail. As he said, the Law Society of Scotland still has a concern—I should perhaps declare a tangential interest as I used to be a member—regarding its impact on partnerships. We went into this in some detail, and I think none of us could come up with a way of dealing with this particular issue. However, it is important to make the change, irrespective of slight concerns. I hope the Bill proceeds. As the hon. Gentleman rightly said, there is nothing we can now do for the people who so tragically lost their lives at Rosepark, but we can ensure that it does not happen again. We have come together to do that.

The Minister and the hon. Member for Glasgow North East were slightly naughty to present the Bill as an argument for the Union, as it could have been introduced in any place that had the power to do so, whether in Edinburgh or London. The hon. Member for Glasgow North East said that this was the third Scotland-only Bill on a reserved matter to be debated in this House since devolution. It will undoubtedly be the last—the next will be in an independent Scottish Parliament.

David Mundell (Conservative, Dumfriesshire, Clydesdale and Tweeddale)

With the leave of the House, I will seek to conclude this debate on the basis of agreement. I am sure that this will not be the last Bill affecting only Scotland brought before the House, but we will leave those debates for another day.

I concur with the hon. Members for Glasgow North East (Mr Bain) and for Angus (Mr Weir) that the Bill will, I hope, go some way to set right the wrongs of the Rosepark fire and bring some comfort to the families of the victims on that terrible evening.

I would like to thank members of staff in the Scotland Office and the Office of the Advocate General who worked hard to bring the Bill before the House. I am pleased that we can now move forward with it in a spirit of consensus in order to deal with an identified anomaly in the existing laws of Scotland. I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read the Third time and passed.

Section 5 of the European Communities (Amendment) Act 1993

Greg Clark (Conservative, Tunbridge Wells)

I beg to move,

That this House approves, for the purposes of section 5 of the European Communities (Amendment) Act 1993, the Government’s assessment as set out in the Budget Report, combined with the Office for Budget Responsibility’s Economic and Fiscal Outlook, which forms the basis of the United Kingdom’s Convergence Programme.

I welcome this opportunity to listen to Members’ views on the British Government’s submission to be made this year under section 5 of the European Communities (Amendment) Act 1993. It is nice to see the hon. Member for Nottingham East (Chris Leslie) in his place. I think we have spent more time opposite each other than we have with our respective spouses in recent weeks.

As in previous years, the Government will provide information to the European Commission on the UK’s economic and budgetary position in line with our commitments under the EU stability and growth pact. This submission, known as the convergence programme, is a legal requirement under agreements this country has entered into, and of course the British Government take such commitments seriously. One must also say, however, that its very name represents something of a relic from a past age—a time when Britain was still ruled by a Government committed in principle to joining the single currency. I can assure the House that that era is well and truly dead and buried.

Members might well ask what purpose is served by this annual exercise and the associated debate in the House. [Interruption.] I thought that this might find an echo in the Chamber. Without wishing to anticipate Members’ contributions, which I look forward to, I would like to suggest three areas for this afternoon’s discussion. I wish first to debate British economic policy within the still relevant context of Europe; secondly, to consider the co-ordination of national economic policies across the EU; and thirdly to reflect on our great good fortune in not having joined the single currency, despite the siren voices heard in this place and elsewhere—thanks, in no small measure, to those who had the courage and foresight to speak against British involvement at a time when their warnings were subject to such derision.

Kelvin Hopkins (Labour, Luton North)

I remember a time when all three major parties, the TUC and just about every good and great person across the land supported joining the exchange rate mechanism. I was one of those who from the beginning said that we should not do so. At the moment, we are all against the single currency, but I remember a time when even the Minister’s party was moving in that direction.

Greg Clark (Conservative, Tunbridge Wells)

I do not think that that is entirely right, although I happily acknowledge that the hon. Gentleman was on the side of right throughout. I remember working for the Foreign Secretary when he was leader of our party. In November 1997, when, as the hon. Gentleman said, the received opinion was that our joining was inevitable, my right hon. Friend made the courageous decision to set out in a lecture to the conference of the

CBI, which then was in favour of joining, the forensic reasons why it would not be in our interests. He committed then, right at the beginning of the parliamentary process that resulted in these measures, to campaign for Britain to stay outside it. While I acknowledge the hon. Gentleman’s distinguished record, I think he would acknowledge that the Conservative party was the first party to commit itself to oppose these measures.

The Government plan to make their submission by 30 April, with the approval, we hope, of both Houses of Parliament. It explains the Government’s medium-term fiscal policies, as already set out in the 2012 autumn statement and Budget 2013, and includes the Office for Budget Responsibility’s forecasts. We think it right and proper to draw from previously published documents presented to Parliament, rather than incur the cost and time to produce bespoke documents for this purpose.

Bill Cash (Conservative, Stone)

Is my right hon. Friend aware that the very document to which he refers states:

“The IMF forecasts UK GDP per person to grow faster than the rest of the G7 between 2012 and 2017, with the exception of the US”?

Of course, he will have read the comments made by Madame Lagarde only yesterday. Does he not find them a little incongruous, given that the IMF is now taking rather a different view?

Greg Clark (Conservative, Tunbridge Wells)

The IMF is considering its view, and we will see what it has to say in the months ahead, when it issues its review. We have always been clear that, as we have advised all EU member states, keeping control of finances is an important precondition for growth. That is an important matter.

As I said, we have been parsimonious in not generating excess quantities of paper. Members will be aware—certainly my hon. Friend the Member for Stone (Mr Cash) will be—that we did not follow the advice that other countries followed and align our financial year to fit in with the norm in Europe. We think it right to stick with our financial year and make use of the documents presented.

With the Budget announcement having taken place on 20 March, shortly before Easter, I appreciate that the timetable was tight, but we made every effort to provide early copies of the convergence programme to the House and the other place in advance of this debate.

Chris Leslie (Labour, Nottingham East)

What was going on with the Order Paper before the debate? I think that the Leader of the House, or perhaps the Minister, tabled a motion not to have this debate, but to kick it up to a Delegated Legislation Committee. I understand that some hon. Members, including the hon. Member for Stone (Mr Cash), objected, and now we are not debating whether to have the debate upstairs. What was going on? Why did the Government try to shove this out of the line of sight?

Greg Clark (Conservative, Tunbridge Wells)

The hon. Gentleman is aware that I am always happy to debate with him, especially on the Floor of the House, which I very much prefer. He will know that at this time in the parliamentary Session, as

we approach the end of the Parliament, the business managers—the Leader of the House is here—are particularly jealous of the Chamber’s time, including in respect of the sorts of debate we have had today. They had the foresight, however, to anticipate being fortunate enough to have some time today on the Floor of the House. It was right, therefore, that we agreed with the proposal, and here we are today.

As I said, we have economically re-versioned the Budget 2013 document to set out the Government’s assessment of the UK’s medium-term economic and budgetary position. As confirmed by the independent OBR, the UK economy is still recovering from the biggest financial crisis in generations, one of the deepest recessions suffered by any major economy and a decade of hollow growth built on unsustainable debt levels. In June 2010, the Government set out a comprehensive strategy to deal with the deficit, protect the economy and provide for the foundations of recovery. This economic plan combines monetary activism with fiscal responsibility and supply side reform.

The Government are making progress. We have restored fiscal credibility, thus enabling an activist monetarist policy and the automatic stabilisers to support the economy. The deficit has been cut by a third over three years and is projected to fall in every year of the forecast. The OBR has judged that the Government remain on track to meet the fiscal mandate one year early, while 1.25 million private sector jobs have been created. Employment is just below record levels and we have kept interest rates at near-record levels, helping families and businesses.

However, there is much more to do. It is important that we understand why the road to recovery has been more difficult than was first anticipated. Although Opposition Front Benchers profess an internationalist outlook, they sometimes debate economic policy as though Britain’s economy was closed off from the rest of the world and invulnerable to other countries.

David Nuttall (Conservative, Bury North)

Given that we have faithfully submitted convergence programme documents every year for a number of years, is the Minister as surprised as I am that some of our continental neighbours have not taken a bit more notice of the path that this Government have pursued or taken a bit more action to get their spending in line, as this Government have?

Greg Clark (Conservative, Tunbridge Wells)

In fact, some countries are recognising that, but we want to set an example. It is important that we stick to our plans and continue to benefit from the confidence that the markets have shown through the level of interest rates. We also say in our deliberations in Brussels, as well as making the point in budget discussions, that when times are difficult, belts need to tightened.

Kelvin Hopkins (Labour, Luton North)

I must say that I am astonished. It is almost as if no one in the Chamber has read the newspapers over the weekend and seen the IMF report that it got the premise for austerity completely wrong. Owing to a mistaken figure in a spreadsheet, we are all going for austerity, which is a terrible mistake. Is that not the reality?

Greg Clark (Conservative, Tunbridge Wells)

I do not agree with that. The hon. Gentleman will be aware that the IMF recommends to many countries around the world, not least in Europe—this

is the point my hon. Friend the Member for Bury North (Mr Nuttall) referred to—that they should get their public finances in order.

When the Office for Budget Responsibility revised its forecast for global economic growth—and eurozone growth in particular—and world trade downwards, that had an inevitable impact on UK growth, given that the euro area is the destination for 40% of UK exports. Over the past year, net trade was the key factor in the underperformance of the economy relative to earlier OBR forecasts, as well as in the downward revision of the forecasts this year and the year after. Fiscal consolidation, on the other hand, has not had a larger drag on the economy than the OBR expected in June 2010. Indeed, the UK’s fiscal situation argues strongly in favour of maintaining our commitment to deficit reduction.

Opposition Members sometimes accuse us of going too far, too fast, but there is further to go and we must get there as fast as we sensibly can, not least because so much rests on the market-tested credibility earned by this Government. The near historic low gilt yields that underpin the low interest rates that are so important to millions of households and businesses cannot be put at risk. As shown by global developments, the consequence of losing market confidence can be sudden and severe. A sharp rise in interest rates would be particularly damaging to an economy weighed down by the burden of so much public, corporate and personal debt, built up during a time when it should not have been.

Bill Cash (Conservative, Stone)

The OBR’s executive summary states:

“Public sector net debt…is forecast to peak at 85.6 per cent of GDP in 2016-17, rather than 79.9 per cent a year earlier as in our December forecast.”

In reality, debt is simply out of control, although much of it is the responsibility of the previous Government.

Greg Clark (Conservative, Tunbridge Wells)

Of course my hon. Friend is right that the inevitable consequence of running a deficit is that debt increases. It continues to be our purpose to reduce the deficit and return the economy to a balanced budget in order to start to pay down debt, and it is important that we should do that.

Budget 2013 also set out measures to equip the UK to compete in a global race. The Government will give every business and charity a £2,000 allowance towards their national insurance contributions from April 2014, benefiting more than 1 million businesses. We will achieve the ambition for the UK tax system to be one of the most competitive in the world, which includes a further cut in corporation tax to 20%—the joint lowest in the G20—from April 2015. We will increase capital investment plans by £3 billion a year from 2015-16. Public investment will be higher on average over this Parliament and the next than under the previous Government. We will devolve a greater proportion of growth-related spending to local areas from April 2015, in response to Lord Heseltine’s review.

As well as action in the UK to tackle the economic challenges that we face, progress needs to be made to tackle the crisis in the euro areas. However, the growth challenges in Europe continue to be serious, as every Member is aware. We have seen a welcome fall in borrowing rates, particularly for Spain and Italy, from the high levels that they reached last summer, but recent

events in Cyprus remind us—and leave us in no doubt—that the euro area continues to be a fragile environment. Only a sustained period of successful reforms and improvements in financial markets can lay the foundations for growth. Economic activity in the European Union remains subdued. In the euro area, most of the so-called peripheral economies are in pronounced recessions, with weak labour markets, adverse credit conditions and an ongoing process of deleveraging all weighing on growth.

Structural reforms at the national level should be supported by the co-ordination of progress towards freer markets at the EU level. The improvement of the single market, regulatory reform and free trade agreements can all help to improve the growth prospects of every country in the EU at a minimal cost. This is a critical agenda that the UK and other like-minded states have advanced at successive European Councils, including in March, and we will continue to push.

Bill Cash (Conservative, Stone)

My right hon. Friend says that it is critical that we enter into EU free trade agreements. I hope he appreciates that under the majority voting system, the power of the European Commission under the Lisbon treaty means that at present our influence is only 8% at maximum—although it will shortly rise, albeit to only 12%. The whole policy will effectively be driven by the European Union and its objectives, which are largely dominated by Germany. It will not be in British interests.

Greg Clark (Conservative, Tunbridge Wells)

It is possible for our influence to go beyond our voting weight, just as there are Members of this House—I might include my hon. Friend in this—whose influence goes beyond their proportional representation in this place. I hope he agrees with that.

It is important to maintain momentum on bilateral EU free trade agreements. Ninety per cent of global growth will come from outside Europe after 2015, so the EU needs an outward-looking trade agenda. A free trade agreement with the United States of America is, and must be, a major opportunity that should be pursued with all vigour. It is estimated that EU free trade agreements that are currently under way or in the pipeline could add £200 billion to EU GDP and create 2 million jobs across the EU. We welcome the European Commission’s stated commitment to bringing forward concrete proposals to reduce regulatory barriers for small and medium-sized enterprises. That is long overdue and we look forward to seeing those proposals in June.

It is estimated that removing all barriers in the single market would increase UK GDP by about 7%, while prices could fall by 5% due to increased competition. The single market already adds €600 billion a year to the EU’s economy. Further progress is possible. Ambitious implementation of the services directive by all member states could result in increased national incomes. Service liberalisation would be particularly beneficial to the UK, as services are an area of enormous comparative advantage, as we know, and the UK has had a trade surplus with the EU in services since 2005.

Mark Reckless (Conservative, Rochester and Strood)

The Financial Secretary cites a number of reports that credit apparently enormously large gains to the single market and, potentially, other trade arrangements. May I ask him to look at the original reports with a certain scepticism?

When I used to work with him, I think he would have been disappointed if I had done my analyses in the same slapdash way.

Greg Clark (Conservative, Tunbridge Wells)

One of the reasons why I was pleased to employ my hon. Friend was his forensic and questioning eye. He is absolutely right that when we look closely at the measures and their estimated impact, we should make our own assessment. However, I think that all of us, including my hon. Friend, would agree that a genuine single market in, for example, energy—an area in which he and I have an interest—could help to increase competition in the EU. As we know, competition is one way we can drive efficiency, which is very much in the interests of all citizens in this country and across the EU.

In addition to structural reforms involving each EU member state and the co-ordination of free trade policies at the EU level, we need reforms in the way the EU works. In his speech of 23 January, the Prime Minister proposed certain principles for reform. He said that the EU had to improve its competitiveness, to become a more flexible organisation, to ensure that its rules were fair for all members and to allow power to flow from the EU to its members and not just the other way around. He also said that the EU had to improve its democratic accountability and to re-engage with voters across Europe. It is national Parliaments that provide the true source of real democratic legitimacy and accountability in the EU. The fact that this debate tonight is being held at the behest of the Chairman of the European Scrutiny Committee serves only to underline that important fact.

Those objectives are complicated by the presence in the EU of the eurozone. Britain has an immediate interest in the stability of the single currency, and we need to be aware of the changes that a more tightly integrated euro area will bring to the EU’s present structure. It is important that we ensure that the EU continues to work for all its members, and that the interests of those outside the single currency should be acknowledged and, more specifically, protected. In particular, it should be understood that whatever binding surveillance eurozone members might agree on, Britain will not be bound by it.

As I said earlier, the convergence programme is, by its very nature, something that harks back to the days when it was simply assumed that Britain was on a one-way route to monetary union across the EU. As the hon. Member for Luton North (Kelvin Hopkins) has suggested, hindsight is a wonderful thing, but let us not forget that, at that time, he and many Conservative Members had the foresight to see any such convergence as the wishful thinking that it was—and, to a certain extent, still is. Those Members included my right hon. Friend the Member for Richmond (Yorks) (Mr Hague), now the Foreign Secretary. As the newly elected leader of the Conservative party in 1997, he had this to say about the idea of dragging Britain into the single currency:

“What are the chances that we will converge in the near future? What are the chances we will converge for ever, without ever diverging again? And would it be wise to run our economy so as to make it converge rather than prosper in its own right?”

Those were wise words, and I look forward to hearing many more in this debate.

Chris Leslie (Labour, Nottingham East)

That was a paean of praise for the right hon. Member for Richmond (Yorks) (Mr Hague) from the Minister; it is a pity that there was not quite so much for the Chancellor of the Exchequer. One of the strange things about this debate is the strong sense of having been here before to debate this issue. Indeed, it was about this time last year that we did so—and, sadly for me, the year before that as well.

Bill Cash (Conservative, Stone)

Twenty times.

Chris Leslie (Labour, Nottingham East)

In my case, it is not 20 times. I have responded to these debates only since the general election.

The key to the debate is the Budget Red Book. I suspect that many Members are not in the Chamber this evening because they have looked at the screens advertising the debate and seen a reference to some obscure European legislation, but I draw all Members attention to page minus 2 at the very beginning of the Red Book. In tiny 9-point font, beneath the statement that the Red Book is printed on paper containing 75% recycled fibre content minimum, it states:

“The Budget Report is presented pursuant to section 2 of the Budget Responsibility and National Audit Act 2011 and…constitutes the Government’s assessment under section 5 of the European Communities (Amendment) Act 1993 that will form the basis of the Government’s submissions to the European Commission”.

If Members knew that we were debating whether the Chancellor’s assessment of the economy was a true and accurate reflection of what is going on in the UK economy, for the purposes of that Act of Parliament, they would be absolutely astonished.

We have obligations under the Maastricht treaty articles; that is essentially what we are talking about when we refer to the European Communities (Amendment) Act 1993. Article 103 states:

“For the purpose of this multilateral surveillance”—

I know that those words stick in the throats of some hon. Members—

“Member States shall forward information to the Commission about important measures taken by them in the field of their economic policy”.

Anne Main (Conservative, St Albans)

Is the hon. Gentleman implying that the Opposition Benches are empty because nobody on his side could be bothered to come and scrutinise this document?

Chris Leslie (Labour, Nottingham East)

These Benches are not massively more empty than those on the hon. Lady’s own side of the House. She will have to accept that this can, at face value, appear to be quite an obscure issue. [Interruption.] There are not many people on her side of the House, but I do not want to get into a contest on that matter.

Kelvin Hopkins (Labour, Luton North)

I want to pay my hon. Friend a compliment by saying that Labour Members do not need to turn up because they have such confidence in our shadow Minister and they know that he will speak for us.

Chris Leslie (Labour, Nottingham East)

That is one way of looking at it.

The point that concerns me is that the Government have in recent days tried to shove this issue off the Floor of the House and sweep it upstairs to a Delegated Legislation Committee. The Minister has said that this is a busy time of year and that the Government do not want to waste the House’s time with these questions, but we are already faced with an opaque description of the legislation, so it is no wonder that they are trying to push it out of parliamentary time. It is, in fact, the kind of legislation that ought to be advertised more to hon. Members.

Bill Cash (Conservative, Stone)

I would no doubt have a lot in common with some of the remarks made by those who were critical of the Maastricht treaty. Will the hon. Gentleman be good enough to tell me whether he would like to leave the existing treaties, and to describe the basis on which this nonsense, this farrago, is now being conducted?

Chris Leslie (Labour, Nottingham East)

Well, this does feel like rather an anachronism, but we have legal obligations under those treaties. No doubt there will be revisions, and some of the reporting requirements ought to be considered afresh, but my principal concern is whether it is right for the House to endorse the Red Book as a true and accurate reflection of what is happening in the UK economy. In my view, the Government must be kidding if they are saying that the Red Book reflects the facts. It is more like a work of fiction. They have been spinning furiously as the key indicators have taken a turn for the worse, as my hon. Friend the Member for Luton North (Kelvin Hopkins) said. In fact, the Red Book is little more than a vanity exercise cloaked in an official publication. It revolves entirely around the Chancellor’s need to retro-justify his failing economic ideology.

I invite hon. Members to look seriously—and without cracking up—at page 1 of the Red Book, and to ask themselves genuinely and dispassionately whether it is a true reflection of what is happening in the UK economy. The first line states:

“The Government’s objective is to…build…a fairer society”.

Well, tell that to those who are struggling with the new bedroom tax while they watch the great and good millionaires of this country rake in a typical £100,000 tax cut, thanks to the reduction in the 50p rate of income tax for those earning more than £150,000. So much for a fairer society!

Here is another one:

“The Government’s plan…is based on…fiscal responsibility to deal with our debts with a credible debt reduction plan”.

That is in total contradiction with the first page of the Office for Budget Responsibility report, which states plainly that the deficit reduction plan has “stalled”. That is the word that the OBR uses. No one would think from reading the Budget Red Book that the Government had presided over an increase in the national debt of 38% during their three years in office.

Mark Reckless (Conservative, Rochester and Strood)

Does the hon. Gentleman believe that the solution is to borrow more?

Chris Leslie (Labour, Nottingham East)

I am sorry to have to tell the hon. Gentleman that the Government are already borrowing more. We shall see the borrowing figures tomorrow, and we shall see what happens to their strategy. The deficit

reduction plan has gone. It has vanished. It has totally disappeared. It is a dead plan. It is no more. It is deceased. It is incumbent on Government Members to realise that they need a different strategy for deficit reduction; they need one that will succeed.

I want to return to the first page of the Red Book, which we are asked to approve as a true reflection of the state of our economy. It states that

“the Government is committed to keeping costs down for families to help with the cost of living”.

Tell that to the typical household now being asked to pay an extra £891. People are worse off because of the measures taken since 2010—not to mention the shrinking real wages relative to rapid price rises. How about the following quote for masterly understatement? It states at the foot of the page that we are experiencing

“a more subdued and uneven recovery than expected”.

Our economy shrank in the last three months of 2012, and we will see whether we are recovering when we see the growth figures for the current quarter on Thursday. How on earth could that be viewed as a recovery? This is an exceptionally disingenuous document. Reading page 1 of the Red Book is enough to make any dispassionate observer double-take their grip on the tough realities of the world around them.

We should therefore dwell for a moment on the real-world evidence. A week is certainly a long time in the Chancellor’s political lifetime—what a week has just passed. The unemployment figures were exceptionally grim. The Bank of England’s latest release on trends in lending showed that, measured annually, the amount of lending to UK businesses from banks and building societies fell in the three months to February. The Bank of England said that lending to businesses fell by £5 billion during those three months and that the decline was broad based across all sectors. So much for funding for lending.

Way before we got to the Budget, we suggested that the Chancellor should take steps to reform the funding for lending programme, but he did not do so in the Budget. It should not take an intervention from the International Monetary Fund to prick up the Chancellor’s ears and make him realise that he needs to do something about funding for lending. Ministers will have to be far more adept and fleet of foot than that.

The Treasury Select Committee said last week that it was by no means clear that the cornerstone of the Budget—the Help to Buy housing scheme—would benefit first-time buyers and, as my hon. Friend the Member for Luton North alluded to earlier, the academic methodology underpinning the key paper written by the Chancellor’s favourite economic theorists—Carmen Reinhart and Kenneth Rogoff—was discredited when a graduate student found a fatal flaw in their excel spreadsheets that supposedly underpinned the whole extreme austerity course advocated by the Treasury.

Despite the usual diplomatic finesse employed by the IMF towards its affiliating member states, its chief economist Olivier Blanchard said that the Chancellor was “playing with fire”. A year ago, the IMF was forecasting growth of 2% this year, but it is now expecting growth of just 0.7%. It was a serious mistake for the Chancellor to ignore the IMF’s calls for a reassessment of fiscal policy in the Budget, and it is right to repeat its

warnings. Even Christine Lagarde, not known for departing from the Chancellor’s opinions on these matters, said that the pace of fiscal consolidation

“has to be adjusted depending on the circumstances and given the weak growth that we have observed lately because of reduced demand addressed to the economy”

and that

“now might be the time to consider”

doing so.

David Nuttall (Conservative, Bury North)

We are not talking about whether this document should be submitted to the IMF; we are talking about submitting it to the EU. If we compare our growth with that of the eurozone, the EU’s own body, EUROSTAT, is forecasting that growth in the eurozone will go down by 0.3% and that ours will go up by 0.9%.

Chris Leslie (Labour, Nottingham East)

To whomever we are asked to submit this document—to the IMF, the EU, the hon. Gentleman’s constituents or his mother-in-law—I would be embarrassed, if I were the hon. Gentleman, to stand behind it as a true reflection of the state of the UK economy. To cap it all, last week, we saw another humiliating blow to a Prime Minister and Chancellor who kept saying that our triple A credit rating was the No. 1 test of their economic and political credibility.

John Redwood (Conservative, Wokingham)

Given that the latest Government plans envisage borrowing £60 billion more in 2014-15 than in the original summer 2010 plan, how much more than that extra £60 billion borrowing would the hon. Gentleman recommend?

Chris Leslie (Labour, Nottingham East)

Unfortunately, we are not likely to have a general election until 2015. I would be grateful if hon. Members did whatever they could to bring that forward a little, but heaven knows what state the economy will be in—even by the time we get to 26 June, which I believe encompasses the spending review period. I am sure that yet further revisions of these figures, which keep changing like shifting sands before us, will be made. We simply do not know what a future Labour Government will inherit—hopefully in 2015. I will get back to the right hon. Gentleman nearer the time. One thing seems clear to me: we have to take some bold action to stimulate the economy, rather than adopt this laissez-faire, arms-folded, non-interventionist approach. Even the Financial Secretary used to disparage that, but he has now signed up wholly to it.

Greg Clark (Conservative, Tunbridge Wells)

Does the hon. Gentleman agree with the right hon. Member for Morley and Outwood (Ed Balls), who said:

“Long-term interest rates are the simplest measure of monetary and fiscal…credibility”?

Chris Leslie (Labour, Nottingham East)

Long-term interest rates reflect a number of factors. Government Members would like to think that low bond yields were a reflection of fiscal policy measures alone—[Interruption.] The Minister should hear me out. He likes to think that that is the one test. As I say, it used to be retention of the triple A credit rating, but that has gone, so something else has had to

be found. Long-term bond yields, however, are also a reflection of who is purchasing them. I do not know whether the Minister can help us out by elaborating on who exactly is purchasing the Government bond yields, because the Bank of England seems to be doing an awful lot. One branch of the UK Government institutions is helping out the other branch of Government institutions—depressing, of course, that yield. The Minister should not be too proud of market expectations that things are going to be so bad for so long that our interest rates are at the ultra-low level. It is not a reflection of fiscal policy; it is a reflection of expectations of future economic performance and of the interventions in monetary policy by the Bank of England.

Kelvin Hopkins (Labour, Luton North)

Is it not simply the case that bond markets can get things terribly wrong as well? We know of the 1929 crash and the 2008 crash, for example. I have no doubt that some have great optimism about the future of the world and national economies, but they can get it wrong, too.

Chris Leslie (Labour, Nottingham East)

That is why some in the bond markets in the City and even the IMF and other economic commentators and business leaders are increasingly saying—as PIMCO did today in its intervention on these issues—that we have to do something about this. Demand in the economy is cripplingly bad; we have to do something to take a different course. The Chancellor’s plan is not just failing; it is adding to our problems with the public finances. We will see the state of the deficit reduction plan and what is happening with this trajectory when we see the figures tomorrow. We hear of blaming the snow, blaming the royal wedding, blaming all sorts of other players including the European Union; it is amazing how we never hear that it is the fault of those who currently occupy the Treasury.

Greg Clark (Conservative, Tunbridge Wells)

I have a genuine question for the hon. Gentleman again. Was the shadow Chancellor wrong when he said:

“Long-term interests are the simplest measure of monetary and fiscal policy credibility”?

When he said that, interest rates were at 4.75%. Was he wrong?

Chris Leslie (Labour, Nottingham East)

The Minister can ask me the same question as many times as he likes, but I will give him exactly the same answer. There are a number of reflections and metrics for judging economic performance, but in these particularly stagnant economic circumstances, I do not think that he should wear as a badge of honour those ultra-low bond yields because they actually reflect low and depressed expectations about the future performance of the economy. He knows that that is true. It is also a reason why not just Moody’s but Fitch have taken out the legs from beneath the UK’s triple A credit rating after three years of stagnation, rising unemployment and billions more borrowing to pay for economic failure. It is time that the Treasury woke up and realised that its plan is causing long-term damage not just to the public finances, but to British families and businesses as they pay the price. When even their biggest allies—the IMF and the credit rating agencies—abandon the Government, it is time to put political pride aside and finally act to kick-start the economy.

Most independent forecasts suggest that on Thursday the GDP figures will show small positive growth, but growth of just 0.3% would simply mean that the economy was back to where it was six months ago. After three years of stagnation, we need to see decisive evidence this week that a strong and sustained recovery is finally under way—otherwise the Chancellor will definitely be in real trouble. We cannot seriously be expected to ratify this Budget Red Book as our representation to the European Union, or anyone else, of how our economy is performing.

Are we supposed to ignore the double downgrading of the UK’s credit rating, first by Moody’s and then by Fitch? Are we supposed to skim over the new figures from the Office for National Statistics, which show that the average weekly pay packet was £464 in February and £480 in the same month last year? That is the worst set of data since the ONS started recording such facts. Are we supposed to turn a blind eye to the fact that youth unemployment rose by more than 20,000 last month? The total figure is now just under 1 million. Should we just forget about the risks of that lost generation?

The Red Book is a staggering work of deception wrapped in the heroic conceit of a Government who are trying to fool people into thinking that they are on track. They are losing control of the public finances because they have lost the plot when it comes to the relationship between economic growth, jobs, the economy, and the revenues that we need in order to get the deficit down. It would be far simpler for the House to reject the motion and return the Government to the drawing board to get their act together and work on an alternative plan that might actually give us the bold action that we need, rather than the stagnation that we are suffering.

Bill Cash (Conservative, Stone)

This is an extremely important debate, but I am sorry to have to say that the Government did their best to prevent it from being held on the Floor of the House. Speaking as the Chairman of the European Scrutiny Committee, I feel that that must be put on the record. It was very unfortunate, to say the least, and no doubt the Committee will consider it when we meet next Wednesday.

Having said that, I must add that this is an opportunity to put in context the tributes that should be, and indeed have been, paid not just to Margaret Thatcher but to Alan Walters and all who took part in the Maastricht rebellion, and also to those who have fought so tenaciously throughout the accretion of these treaties, from the early days until the present time. I use that collective term because many new Members who are in the Chamber now—notably my hon. Friends the Members for Rochester and Strood (Mark Reckless), for Bury North (Mr Nuttall), for St Albans (Mrs Main), for North East Somerset (Jacob Rees-Mogg) and for Bedford (Richard Fuller)—are apprised of the seriousness of the situation, as indeed we were at that time.

Section 5 of the European Communities (Amendment) Act 1993 was passed 20 years ago as a result of a very tense debate about these questions. In the last 20 months, there have been at least 20 economic summits in an attempt to unravel the dysfunctional nature of the economic requirements with which we are having to comply, in the context of the convergence criteria and

as set out in papers that have been placed before the House. I imagine that many Members have not had an opportunity to read those papers, but they have been placed in the Vote Office for the benefit of those who wish to do so.

While we are dealing with the consequences of the Maastricht treaty, I want to take the opportunity to put on record a correction to a book by the former Chief Whip in the House of Commons, Lord Renton. After making some fairly disobliging remarks about certain Members—I need not ignore the fact that I was one of those of whom he did not particularly approve—he wrote that

“the vehicle for their resistance was the parliamentary approval for the Treaty of Maastricht.”

He went on to observe, astonishingly,

“Although this had been signed by their heroine, Margaret Thatcher, they revelled in defying three-line whips in order to vote against its enactment into British law”.

That is complete and total arrant nonsense. Margaret Thatcher did not sign the Maastricht treaty, although she certainly became a patron of the Maastricht referendum campaign, which I organised along with Bryan Gould and a Liberal Democrat Member who represents one of the Devon seats. However, the present Prime Minister himself has now said that there should have been a referendum on that treaty, and I believe that, had there been one, we would have won. The father of my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) was one of the leading campaigners in the House of Lords for the referral of the treaty to a referendum, but his campaign was defeated by a monstrous whipping operation, with the result that we are where we are.

There was a complete refusal to listen to what was said at the time, and there has been a complete refusal to listen to what has been said ever since. I fear that the coalition is still not listening, although it is now clear as crystal that our predictions were right and that riots, massive unemployment, the rise of the far right and the failure of the system are destroying not only the European economy but Britain’s prospects for growth. I shall say more about growth in a moment, because it is fundamental to the issue that we are discussing.

Mark Reckless (Conservative, Rochester and Strood)

As my hon. Friend pointed out, the Prime Minister now says that there should have been a referendum on the Maastricht treaty. Does he recall that the Prime Minister was at the time a special adviser to the then Chancellor of the Exchequer, who had been Chief Secretary to the Treasury under Margaret Thatcher and who refused to sign the treaty? A junior Minister, my right hon. Friend the Member for Horsham (Mr Maude), had to go and do it instead.

Dawn Primarolo (Labour, Bristol South)

Order. That really is not part of the subject of the debate. We are not having a history lesson on how we came to approve section 5, or on the players in that event; we are considering the documentation that the Government have asked us to approve this evening in connection with section 5, and I should be grateful if all Members would remain in order. I feel sure that Mr Cash is going to come to the point now, in the context of that documentation.

Bill Cash (Conservative, Stone)

The hon. Member for Stone—who is also Chairman of the European Scrutiny Committee—will of course do just that. I am grateful to you, Madam Deputy Speaker, for drawing my attention to these interesting documents. Among the interesting statements in the documents is this in paragraph 2.17:

“The euro area is the key market for UK exporters, accounting for 42 per cent of UK exports in 2011. As a consequence, the euro area sovereign debt crisis and subsequent recession have weighed heavily on the UK recovery. Action by European policy makers in 2012”—

I must say that I am astonished by the phrase that follows—

“helped ease the crisis and there are signs of investor confidence improving, but as the situation in Cyprus demonstrates the challenges facing the euro area are not fully resolved.”

Well, we can tell that to the people of Cyprus, but we can also say it to the people of Britain. This is not just a eurozone problem; it is a European Union problem, but above all else it is a British problem, and that is why we must take the necessary action.

The document is completely wrong to describe the euro area as “the key market”. In fact, as I pointed out in a paper that I wrote with my hon. Friend the Member for Harwich and North Essex (Mr Jenkin), the UK runs a trade deficit with the other 26 member states of £47 billion a year, yet we have a surplus of about £20 billion in our trade with the rest of the world. Furthermore, the Germans—about whom I shall say more in a moment, because of what was said by Angela Merkel at 3 pm today—run a surplus of no less than £29 billion a year with the other 26 member states.

That is why the debate is so important.

Jacob Rees-Mogg (Conservative, North East Somerset)

On paragraph 2.17, does my hon. Friend share my view that it is a mistake to look at the euro area as one export market, as the individual countries that make up the eurozone have their own characteristics, and we naturally have a huge trade with Ireland, as all countries do with their nearest nation, irrespective of which currency bloc they belong to?

Bill Cash (Conservative, Stone)

Absolutely, and one of the greatest pleasures I have had in the past couple of years has been to have my hon. Friend serving on the European Scrutiny Committee, with the diligence, knowledge and judgment he brings to all these matters.

It is also stated, at paragraph 2.19, that

“Brazil, Russia, India and China taken together were the destination for 6.5 per cent of UK exports in 2011.”

The real problem here is that our exports certainly have to go to the BRIC countries and also to the rest of the Commonwealth, which is where the emerging markets are, as well as to the United States.

I strongly recommend that this House of Commons and this Government start waking up a bit. I really mean that, as I am very concerned indeed, as any right-minded person in this country should be.

It is also argued in this paper that:

“Between 2009 and 2012 UK goods exports to Brazil increased by 49 per cent, to Russia by 133 pre cent, to India by 59 per cent and to China by 96 per cent.”

I have heard those figures before, but I asked what our actual import penetration into China was in relation to that of the rest of the world. It is 2%. The 96% increase

is entirely relative, therefore. The real question is how much we are managing to export into China. Germany exports into China 45% of all the EU exports into China. I do not cite that figure in order to denigrate the expert efficiency, determination and political will of those who run Germany, but I do say that we had better get our act together. Continuing to be locked into these absolutely penalising treaties is causing us enormous damage, when we could gain so much by trading not only with Europe, but with the rest of the world on a much more enhanced basis.

There is far too much discussion and not enough action, and I was glad to note the campaign launched today by 500 businessmen and run by Matthew Elliott, and I also commend the book about the euro by the Institute of Economic Affairs, which puts its finger on many of the problems in the euro area.

Richard Fuller (Conservative, Bedford)

I am very interested in what my hon. Friend is saying. Does he agree that this report has given us an opportunity to put an alternative argument against the strong argument about commonality? I know he will draw the House’s attention to the interesting comments about Europe by the Chancellor of Germany today. My hon. Friend talks about those other economies, and there is an argument against commonality and for the UK having an opportunity to be able to trade with the rest of the world, but that is being lost as a result of such statements. Is there an opportunity for us to make this case, because I am not sure we are making it strongly enough?

Bill Cash (Conservative, Stone)

I agree with my hon. Friend. We must be realists. T. S. Eliot once said,

“human kind

Cannot bear very much reality”,

but Britain has got to wake up. It is crucial at this stage that we understand—in a constructive, not a negative, sense—that we have both a problem and an opportunity, but that opportunity will not last much longer, and we must not simply repeat the recitations and mantras about section 5 while not tackling the intrinsic problems.

These papers were, no doubt, prepared by worthy civil servants, but they may well not reflect the real situation. Let us look at the question of the level of debt, for instance. I mentioned that in an intervention on my right hon. Friend the Financial Secretary, and I gave him the percentage figures. However, under the previous Government—I now turn my attention to those on the Opposition Benches—I repeatedly said, along with my right hon. Friend the Member for Wokingham (Mr Redwood) and one or two other Members, that the debt that was accumulating under them was causing so much damage to our economy. Furthermore, as I said at the time of the last election in my manifesto—or, rather, in my personal message to my constituents—the stated debt levels, which is the key issue, were based on what could only be described as a lie.

Chris Leslie (Labour, Nottingham East)

What does the hon. Gentleman think about the fact that the national debt has risen by 38%—by over a third—in the past three years, while the current Front-Bench team has been in charge?

Bill Cash (Conservative, Stone)

Not only am I appalled by that, but I also recognise that the genesis of much of this can be traced back to the time of the previous Government. Furthermore,

we now understand from the official figures published by the UK Statistics Authority that the level of debt—which at one time was, astonishingly, described as being “merely” £1 trillion—will go up to £1.5 trillion. However, under the previous Government the real level of debt—taking into account public pensions, Network Rail, nuclear decommissioning and several other factors, which we cannot ignore—was actually up at about £3.25 trillion, as I argued at the time, and if we include those factors it is now likely to be about £4 trillion.

That is the inheritance of the young people of this country. They have got to be brought into work as a result of growth, but the prescription from the Opposition Benches is more debt, not less, and more Europe, not less.

Regardless of how I vote this evening, I pay tribute to the fact that at least the coalition Government have begun to look at these questions. My complaint is that they have not done enough and they are going too slowly. If they do not get on with it, there will be a catastrophe. In fact, we are already living through the beginnings of a catastrophe.

There is another question to be asked about growth. We can only grow our economy by growing from the other countries with whom we trade. In a nutshell, we must engage in cuts, but we need the taxation from the growth of small and medium-sized businesses in order to provide the public services those on the Opposition Benches say we need to provide. All they do is call for ever more cuts, but they talk about growth but do not actually do anything about it.

The European approach of large, and greater, Government spending tends both to increase the rate of Government debt and to lower the GDP growth rate. As a result, growth in most European countries, and the possibility of getting Government debt under control, recedes. The rigidities imposed by a single currency—the euro—and the burden of EU regulation on EU economies are continuing to cause frictions and difficulties and will destroy the countries in the European monetary union.

If only people would listen at the time, when it matters, rather than afterwards and then try to cover things up. Only a few weeks ago, Moody’s downgraded our economic performance, and Fitch did so in the last couple of days. Portugal, Ireland, Greece, Spain, France and Italy are now all countries of perpetual economic concern. There is a black hole, but the call is for more and more Europe.

I referred to the remarks of Angela Merkel today. It is regrettable and unfortunate that she was quoted as saying that countries in the eurozone must accept that Europe “has the last word,” and need to work more closely together if the continent is to avoid going into decline. I am sorry to have to say this so specifically, but that is precisely because there is a centralised approach, which is driven by German requirements and goes back to Chancellor Kohl.

In the 1990s, I wrote a pamphlet called “British and German National Interest”, and we are seeing a repetition of that time. Chancellor Merkel said:

“We need to be prepared to break with the past in order to leap forward. I’m ready to do this.”

In fact, she is going back to the past—not the dark past we all witnessed so vividly, but the kind of past that

assumes it is not actually a European Union, but in practice, a German Europe. We should ask people in Cyprus and Greece what the position is. She said:

“Germany will only act together with the others—hegemony is totally foreign to me.”

It may be foreign to what she wants, but the practical reality is that it is happening.

We are now being lectured by Madame Lagarde, who was a French economic Minister and is now head of the International Monetary Fund. She said:

“We violated all the rules because we wanted to close ranks and really rescue the euro zone.”

Those are the rules we are discussing. On top of the theft in Cyprus, everyone knows that those of us who argued the case have been proved right.

I am sorry to hear that Madame Lagarde appears to have criticised our Chancellor. It is some gratitude for all the work he did urging her to accept the presidency of the IMF, and leading the charge to make sure she got it.

Everyone wrings their hands, but what are the Government doing? We are being locked into the question of whether the debt is being sufficiently reduced, but the debt is escalating and the deficit remains unacceptably high. Problems in the eurozone have a real effect on the UK economy. I repeat that it is not just about the eurozone, or just about the European Union; it is about Britain, which is why we have to get our act together. I notice that the Chief Whip has just come into the Chamber, so I hope he will listen with care, because these debates will unravel.

Real GDP fell in every quarter of 2012 in the eurozone, and by 0.6% over the year as a whole. The IMF forecasts a further fall of 0.3% this year. What is happening is completely unacceptable. No wonder the UK Independence party is making such headway; it will continue to do so until there is real growth.

We have the opportunity. We can deliver. No doubt the commentariat will fail to report this debate, as it fails to report other debates when we deal with facts and not mere speculation, but that will not prevent us from continuing the fight. We have the means to achieve the results. Some of them will come from a change of position by the Government, going for more and more growth based on real policies for growth and disentangling ourselves from the shackles of the regulatory arrangements of the European Union, making sure that the EU does not dominate the free trade agreements that are being determined. We have to be able to trade on our own terms, just as we in this Westminster Parliament have to decide the future of British policy.

As the Prime Minister said in his five Bloomberg principles, our national democracy depends on our national Parliaments. European democracy depends on their national Parliaments. He was right about that. Let us do something about it. Let us make sure that we run our own economy based on our own assessment and that we do not remain shackled to the existing treaties. It is time to put an end to them.

Kelvin Hopkins (Labour, Luton North)

I rise to speak briefly in support of my hon. Friend the Member for Nottingham East (Chris Leslie) about the nonsense of

presenting the fiction of the Red Book as though it represented the truth about our country. Another organisation—perhaps the Institute for Fiscal Studies—would do a better job.

Last week, in a speech in the Chamber, I reminded colleagues of an organisation that used to get forecasts right: the Cambridge Economic Policy group. But it was a left-leaning Keynesian group and the Conservative Government of the time withdrew its funding, because they did not like its answers and chose to follow the London Business School, which always got the forecasts wrong. TheSunday Times always gave it nought out of 10. Let us not pretend that all forecasts speak the truth. Officials will never present the Chancellor with a gloomy picture; they try to put as big a gloss on things as possible so that the Chancellor can say nice things to us in the Budget speech.

I only wish that the colour of the Red Book represented some of the policies inside, but I am afraid it does not. The antiquated language is nonsense. The Minister drew our attention to the fact that the reference to convergence was born of the past assumption that all countries would be in a single currency, we would all be growing nicely together, and poorer countries would become rich countries. That has all been washed away; it is all complete nonsense. It seems the only convergence we seek now is with an area that might be in terminal decline—the European Union. It is in serious economic difficulty, so do we want to converge with it? I suggest we want to diverge from it and make our economy work.

Although there are areas where we would have definite disagreements, the hon. Member for Stone (Mr Cash) often says things I agree with. He said we were talking about a German European Union. In 1989, the Institute for Public Policy Research published a document called “The German Surplus,” which was quickly suppressed because it was too explosive. The whole political establishment was moving towards a pro-euro, “Let’s join the single currency and the exchange rate mechanism at the wrong time” approach. I still have a copy of the document and I think it can still be found on the internet. It said that Germany had built an economy around itself, such that it could sustain low parity for its currency against all the others. Building that low parity for their currency into the euro meant that the Germans would always have a competitive edge over the other countries and could export to them freely. What they did not appreciate was that over time those countries would run out of money and Germany would have to lend them money to buy German products, which is what has been happening. Germany either has to dissolve the whole arrangement or carry on giving vast sums of money to other members of the eurozone to help them buy German goods.

Bill Cash (Conservative, Stone)

The hon. Gentleman may find it interesting to read the book by the Institute of Economic Affairs on that very subject.

Kelvin Hopkins (Labour, Luton North)

I shall certainly look it up.

Ministers go on and on about the importance of exports to the rest of the European Union—our Ministers did too—but they rarely talk about imports. We have a gigantic trade deficit, which is getting worse and worse

every year. Even between January and February, the goods deficit with the EU rose from £4.8 billion to £5.1 billion. It now looks as though the trade deficit this year may be £60 billion. That is enormous; it is more than £1 billion a week. We are buying £1 billion more goods from the EU every week than the EU buys from us. That is not a sensible way to run an economy.

David Nuttall (Conservative, Bury North)

Does that statistic not put the lie to all the people who claim that 3 million jobs would be lost if we left the EU?

Kelvin Hopkins (Labour, Luton North)

Indeed. If we just maintained balance, we would gain a million jobs overnight. If we go back to the Bretton Woods arrangements following 1944, Keynes was concerned about trade imbalances and he wanted arrangements to be put in place across the world that would avoid big deficits and big surpluses. Also, he wanted to require those with big surpluses to appreciate their currencies, as Germany should have done a long time ago. We are just going through the motions of arrangements made years ago which no longer have any serious meaning.

Germany is now in trouble. It has faced a savage reduction of 17% in car production in the space of one month. It is in difficulty and will have to look to itself to solve that problem. George Soros has suggested that one of the ways out of all the present problems is for Germany to leave the euro and to recreate the deutschmark, which would naturally appreciate. All the countries now tied into the euro would then have difficulty. Denmark, for example, would want to devalue straight afterwards. Others are now talking about what George Soros said. There are people in Germany who want to leave the euro.

There was an extremely interesting article in The Guardian this morning, suggesting that the only way out of this is for all the countries of the European Union to recreate their own currencies and to find appropriate parities for those currencies. If a country has its own currency, it can borrow and it can print money. It may be forced into a devaluation but it manages its own economy nationally and it can adjust the shock absorbers of separate currency, which are vital. The example used is Japan, which has had serious problems but is managing its economy internally.

I draw Members’ attention to the one country that has come out of the current crisis rather better than all the others—that is, America. It is surprising, but American growth is at 2%, whereas ours is well below 1%. Although America still has serious difficulties and serious unemployment, it is doing better than Europe because it is pursuing growth policies, which necessarily mean more borrowing.

I know that hon. Members on the Government Benches are horrified at the thought of more borrowing, but I urge them to read the great book by John Kenneth Galbraith, “The World Economy since the Wars”, where he pointed out that during wars—classically, the second world war—America borrowed vast sums from its own citizens. They finished up with lots of war bonds which they cashed in, and the American economy started off as the strongest economy in the world, stronger than it has ever been because of the massive investment in manufacturing that took place during the war. Its debt was based on borrowing, which was paid back over time, as the American economy grew, with full employment.

I could go on, but I will not. Debating the motion every year is a nonsense. We ought to be looking at more sensible ways of running our economies.

Jacob Rees-Mogg (Conservative, North East Somerset)

May I begin by saying how pleased I am that this debate has come to the Floor of the House and commend my right hon. Friend the Leader of the House for bringing it here? He was unduly modest to send it upstairs to Committee because this gives us an opportunity to highlight the Government’s achievement and send it to Brussels with a panache that says, “We know what we are doing and we are pleased to educate you.” Unlike the hon. Member for Nottingham East (Chris Leslie), who I think has been confused in his economics this evening, the document shows how well we are doing, compared to our continental colleagues.

Before I adumbrate our great achievements and the success of this Government since 2010 as set out in the document before us, there is one little matter that I wish to raise about the surveillance mission that the European Union is entitled under a 2011 agreement to send into a country that is not meeting the convergence criteria. Although it cannot punish us for failing to meet the convergence criteria, the European Union can, I believe, send in a surveillance mission or even a rather ominous-sounding enhanced surveillance mission.

I hope the Government will be clear, and I thought from what my right hon. Friend the Minister was saying that the Government are being clear, that they will not accept such surveillance and will use all their abilities to discourage the European Commission from sending any surveillance mission. It would be a great audacity—a great cheek—if it were to do so when 19 member states are in special measures for their economic failings for the excessive deficit procedure. We, of course, are in it too because of our deficit, but those 19 other members are in the eurozone, which is why bringing their budgets together is so important, whereas for us it is essentially a technicality from the Maastricht treaty.

It is a matter of importance that the Government have got the policy right. The key to getting it right is found on page 31 of the documentation and then on page 15. Page 31 deals with the quality of the public finances. It deals with what the Government are doing to consolidate our situation and the projection. Projections should be treated with the greatest suspicion. All forecasts are wrong, and it is merely a question of how wrong they will turn out to be. None the less—

Steve Pound (Labour, Ealing North)

Is that a forecast?

Jacob Rees-Mogg (Conservative, North East Somerset)

That was a wonderful interjection, as always, from the hon. Member for Ealing North (Stephen Pound). I fear not. It is a statement based on a knowledge of history that forecasts invariably turn out to be inaccurate and it is merely a question of how inaccurate they turn out to be.

But if we look at what the Government are trying to do, they are getting spending down from 47.4% of GDP to about 40% of GDP. We know from our history that about 40% of GDP is a sustainable level of Government spending. It is a level that I personally would like to see reduced further, but it is none the less a level that has

been consistently affordable over the long run, certainly going back to the early 1970s, based on taxation revenues going up to 38.3% of GDP. Now, 38.3% of GDP for tax revenues is very near the peak level that has ever been achieved. It is rare for tax revenues to go above 38% of GDP or to remain there for a sustained period.

So what is being done with the public finances is an extraordinarily effective consolidation on both sides, with taxes being pushed up and expenditure being cut, with most of the burden being taken by expenditure cutting and with a small amount of it on tax raising. That is setting the basis for a long-term recovery of the economy. Where I think the hon. Member for Nottingham East was perhaps unduly party political in what he said—uncharacteristically so, because he is normally a man of such consensus, support for the middle way and so on—was in ignoring the benefits of monetary activism.

I refer right hon. and hon. Members to page 15. The key difference between the UK economy and the continental economies is that we have the ability to change our monetary policy to ease the austerity—[Interruption.] Indeed, printing money. Absolutely right. It is the printing of money that is allowing the deficit to be sustainable and is allowing businesses and individuals to carry on borrowing and work through a consolidation of their finances, which is also in the document—the consolidation of individual finances—to take place in a way that is not crippling. On the continent that is not happening, which is shown up in the gilt yield figures. The latest gilt yield figure is 1.65%. That is the lowest in our history. In Italy it is at 4.05% and in Spain just under 4.5%, which shows the much tighter monetary situation in Spain and Italy as compared with the United Kingdom. That is why the austerity programmes in those countries are causing such extraordinary pain, whereas in this country it is manageable.

That is why I say the document is a model for our friends and neighbours across the channel. We ought to send it to them with a fanfare, with trumpeters, with Garter King of Arms leading the way, to say to them, “Look, this is how you do it. This is how you restore a country to fiscal sense, and you do it through monetary easing.” Although I loathe the fact that we have to report to a multinational body about matters that are our own sovereign right and should not be interfered with from abroad, on this occasion we can take real pride in what the Government are achieving and what they are working towards and the manner in which they are doing it.

David Nuttall (Conservative, Bury North)

It is, as always, a great pleasure to follow my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg), if, as always, somewhat of a challenge to match his oratory. If, as will no doubt be the case after tonight’s proceedings, the Government eventually send this tome to the bureaucrats in Brussels, it would be sensible and appropriate for them to append to it a copy of my hon. Friend’s speech, which succinctly set out the Government’s achievements in managing so sensibly the British economy since they took office in 2010.

This evening, in the few minutes that remain for the debate, I want briefly to set out why I oppose, as so many have, this annual charade of going through the

process of submitting a document entitled “Convergence Programme for the United Kingdom”. As always, the question is: what on earth are we converging with? Why would this country want to converge in any way, shape or form with the other countries of the European Union, when our growth, as judged by the EU’s own statistical body, EUROSTAT, is forecast to be 0.9%, the EU average to be 0.1% and the eurozone to be minus 0.3%? It is forecast not to grow at all. Why on earth would we want to try to converge with it? What is the point of submitting this convergence report every year?

I do wonder whether we ever get any feedback. Every year, the eurozone stumbles from crisis to crisis. It does not appear to take any notice of this document in which, since 2010 when the Government took over the nation’s finances, we have set out for the benefit of our European partners the way in which we manage our affairs in this country. We may have our political differences in this Chamber as to the right way forward for our economy, but those arguments are solely for this Chamber and for the other place, for this Parliament, to determine. We should in no way be beholden to the Brussels bureaucrats when it comes to British finances.

The Minister referred to the convergence programme document, saying that no time was spent in producing it. Nevertheless, there is a document. Someone has spent some time putting together this weighty tome, which this year runs to some 235 pages. It is a bespoke document, submitted in accordance with the European treaties. This evening, time does not permit us to go through the long process as to how we got to the state that we are in today, but the question remains as to why we go through this annual charade. Surely it would be much better if, as I have said in previous years, we simply said to the bureaucrats in Brussels, “Look, if you are that interested in finding out what we in the UK are doing, just log on to the internet and have a look at all the documents on the Treasury’s website. You will see the Budget statement and the Red Book. That is what we are doing, and if you want to comment on it, go ahead and do so. But why on earth should we waste our time and money in submitting this convergence document to you?

What really matters is not what the Brussels bureaucrats think, but what the British people think. At the next general election, the British people will have a crucial choice to make. Should they vote for the party that has led this country through the most difficult of times and put it back on the road to recovery, taking very difficult decisions that may well have adversely affected them? They will know in their heart of hearts that the decisions were right; they were right for the British economy and ultimately they will be right for them and their families. Should they vote for the party that has put us on the road to recovery or for the party that got us into this mess in the first place? That is the crucial decision that really matters at the next election. It doe not matter what the Brussels bureaucrats think about the running of the British economy.

I oppose the motion not because I oppose the Government’s economic programme, but because I oppose the idea that we should in any way be beholden to Brussels. We should not be spending our time submitting this document or any others for its consideration.