Liam Byrne
MP for Birmingham Hodge Hill and Solihull North · Labour · United Kingdom
“The loss of 4,000 jobs at Jaguar Land Rover is a body blow for workers, families and communities across the west midlands, so I commend Richard Parker, the Mayor of the West Midlands, for moving quickly on Monday to put £500,000 on the table to help ensure that everybody gets back to work.”
“I wholeheartedly welcome this well-rounded statement from the Foreign Secretary, and put on record my thanks to the new Prime Minister for the hard yards that I know he has put in over recent days and weeks.”
“I am grateful to my hon. Friend for giving way, and I offer my warmest congratulations to her on her appointment to the role; she will be a brilliant Minister.”
“Let me start with a word of thanks to my hon. Friend the Member for Chester North and Neston (Samantha Dixon), who is not in her place, who said quite rightly that an awful lot has changed since the Bill was first introduced to this House. Indeed, a lot has been revealed over the course of the summer.”
“The effect of new clause 34 would be to ban off-ramping, ban new forms of digital currency transactions and ban memecoins, which are exactly the kind of measures that Ministers now need to bring forward. If we want to take the crypto system out of political finance, this is what we need to do.”
“No doubt we will learn that Mr Cottrell was in fact on the electoral register when that money was passed. No doubt we will discover that his mother, Fiona Cottrell, declared and did not disguise the fact that the money had ultimately come from her son.”
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“Thus, instead of a straight “promise”, we now have a “pledge”, an “aspiration”, a “commitment” or a “No. 1 priority”. This morning the Leader of the Opposition continued his careless whispers, reassuring listeners to the “Today” programme. He said that he would have to be tough and pull back from the Conservatives’ guarantee of 45,000 single rooms in the national health service. It could not be a pledge, he said, but he told the listeners not to worry, because “it is an aspiration”. It seems that the Conservatives now cannot stop adding to their now famous “queue” of commitments. We all remember what a Tory queue looks like. We used to call them waiting lists, and they were so long that people often expired before they reached the front.”
“I apologise for mis-speaking earlier, but the point I was making is that the plan we have presented involves a rapid—indeed, the most rapid of any G7 country—reduction in the cyclically adjusted deficit: from 9 per cent. this year to 8 per cent. next year and then down to 5.8 per cent. in 2011-12, when we anticipate the economy growing above trend. I conclude by saying that I feel very strongly that this pre-Budget report constitutes 212 pages of great detail, which is in complete contrast to the plan—if it can be so characterised—presented by the Conservative party. The truth is that the Conservatives have been love-bombing every audience they can find within easy reach of a press conference, and with that love-bombing has come a new lexicon of ambiguity.”
“I am following the hon. Gentleman’s remarks with great interest, and I am grateful to him for giving way so early in his speech. He appears to have changed tack slightly in his critique. For some months he has been saying that we should move faster in reducing the deficit. Is he now accepting that four years is the right time frame within which to halve it?”
“I am enormously grateful to the hon. Gentleman. He will know that our projection is a reduction in the cyclically adjusted deficit from 9 per cent. in 2009-10 to 8 per cent. in 2010-11, but he seems to be saying that it should be falling still faster. What figure does he propose?”
“The hon. Gentleman is enormously kind in giving way. Does he acknowledge that Standard & Poors has said: “We believe that the ratings on the UK continue to be supported by its wealthy, diversified economy”? He will also recognise that Fitch said “The UK’s triple A rating remains supported by its high value added, diversified economy.” He will recognise, too, that Moody’s has said that “the outlook for the UK Government is stable. Her Majesty’s Government is deemed a resilient triple A issuer.” The hon. Gentleman’s presentation would be incomplete without such an acknowledgement. Would it not be incomplete, too, without an acknowledgement of the Governor of the Bank of England’s growth forecast for 2010-11 of 4.1 per cent., which is much higher than the rate the Chancellor offered?”
“If one cannot provide certainty about how much money is available, that defeats the object. We are happy to provide certainty, where that is possible. We know that the Conservative party is more than happy to provide four or five different positions on departmental budgets over the course of a day, but that is not an example that we wish to emulate.”
“Let me deal with the hon. Gentleman’s second point first. I have set out clearly in my presentation to the House this afternoon how we see £82 billion of deficit reduction taking place. Some £25 billion will come from growth measures and £57 billion from discretionary measures—tax will account for £19 billion of that and the rest will have to come from cuts and efficiencies in public spending. As he will recall from 1998, when comprehensive spending reviews were introduced, the whole point of them is about certainty; they are designed to give public service leaders and managers certainty about budgets for a period of three years. If a £4 billion or £5 billion margin of error remained because one cannot be clear about how fast unemployment will fall, that would be bigger than the budgets of four or five different Departments.”
“The hon. Gentleman is making an excellent speech, but I think it would be useful at this point in the debate, since we have heard from Government and official Opposition Front Benchers on this subject, to ask him whether in his judgment the reduction in the deficit in the first year of the Government’s plan should be faster, or whether the Government have broadly judged it right?”
“The hon. Gentleman will accept that a judgment has been made about the right level of deficit in the next financial year when the economy will still be growing at a rate below trend. In the subsequent year, there will be a sharp fiscal tightening, but that will be at a time when the economy will be growing at above trend. There is an element of judgment involved, and the Government have made a decision about the right level of deficit commensurate with the forecast level of growth in the economy.”
“I am happy to look at the case for this research. We understand the pain both of the banking sector and of the public sector quite well, and we are introducing reform to both.”
“Fixing the very poor level of public sector pay that we inherited was of course a priority for us, and that is why over the past 10 or 11 years the pay of teachers has gone up by 52 per cent., that of police officers by 57 per cent. and that of nurses by 65 per cent. I think that, by and large, we have fixed the investment gap that we inherited from the Conservatives, but as we move into the years ahead we have to prioritise halving the deficit over four years. That is why we are asking for pay restraint in the public sector, starting with public service leaders, whom we are asking to take a pay freeze next year.”
“I understand that the draft guidance has been published. The proposals that we have introduced are designed to bite on banking groups, but we remain open to the possibility of extending the legislation and the tax if the avoidance measures that some have talked about are put into practice.”
“RBS is a bank in which we exercise a certain degree of influence over remuneration policies—but the hon. Gentleman will be pleased to hear that its management have not yet made proposals for a bonus pool.”
“Departmental budgets are set until April 2011. As the Chancellor made clear in his statement, now would not be the time for a spending review, given the uncertainties that remain in the world economy.”
“I think that the Chancellor’s judgment on that will depend entirely on the uncertainty that we see at the time in the international economy.”
“That would mean, for example, putting about 5p on VAT, or halving the education budget.”
“If the Chancellor had set out a spending review earlier this year, for example, it would have been pretty likely that those figures and settlements would have had to be revised, as unemployment turned out to be far lower than we initially expected. Indeed, today the Secretary of State for Work and Pensions is setting out the argument for the kind of savings that could be achieved on the welfare bill if, as we hope, unemployment is much lower than it might have been over the next few years. Until that certainty is acquired, it would be wrong to set out to the last pound and the last penny what each individual Department should get. We are very clear that halving the deficit over four years is in the right time frame. Halving it any faster—over three years, for example—would involve taking £26 billion out of public spending.”
“I am sure there must have been a question lurking in there somewhere. I advise the hon. Gentleman not to believe everything he reads in the newspapers. What the Chancellor did last week was set out a clear plan for how we can halve the deficit over four years. It is pretty much the fastest consolidation plan in the G7, and it is also the clearest. We stand by the judgment that four years is the right period over which to halve the deficit. Of course there are people who have advised us to take a different direction and halve the deficit over three years, which would involve some pretty difficult judgments. That is the policy advocated by the Opposition, but they have not yet said whether they would put up VAT by 5p or halve the education budget. Is that because they do not know, or because they will not say?”
“What we have yet to see is any plan of sufficient clarity from the Opposition.”
“Even the hon. Gentleman would admit that there remains a degree of uncertainty in the international economy. We need only look at events in Dubai and the Gulf to see the kind of instability that persists. Indeed, we are only halfway through the measures agreed at the G20 in London, so we are by no means out of the woods yet. Recovery is not guaranteed, and we cannot know how much we should allocate for welfare benefits. Therefore, it is difficult to pin down to the last pound and penny how much each individual Department should have. Last week, my right hon. Friend the Chancellor set out one of the clearest deficit reduction plans in the G7. We set out our priorities for the year to come, including some £15 billion of cuts and efficiencies in lower priority programmes.”
“The combined action of the Bank of England and the Government is supporting up to half a million jobs at the moment. The Government believe that, as there are still risks to the economy, it would be risky to consolidate too quickly.”
“There are those who believe that we ought to be cutting public spending faster, even now, before recovery has been locked in. We think that that would be a risk and that the price would be paid in higher unemployment and more repossessions. That is why last week the Chancellor set out further measures to help to combat youth unemployment and why we think that the right approach is to say to our young people that if they have been out of work for six months they will be offered a job, a place in training or, of course, community service.”
“If the right hon. Gentleman looks at other economies in the OECD or the G7, he will see that the levels of debt forecast among them are pretty much in line with our own. This recession has hit us all. However, we are probably the country that has set out the clearest plan to halve that deficit over the next four years.”
“Over the past few years, we have moved something like 24,000 jobs out of London and the south-east. Just before the pre-Budget report, we said that we would seek to move another 13,000 out over the next few years. I would be very happy to sit down with my hon. Friend and other colleagues from Stoke-on-Trent to talk about how we can maximise Stoke-on-Trent’s chances of getting a big share of those new jobs.”
“It includes options for the future sale of the Tote, the student loan book, the Dartford crossing and the high-speed rail link, and potential alternative forms of ownership of British Waterways agreed by myself and the Secretary of State for Environment, Food and Rural Affairs. Our policy will also include a new approach for testing where publicly owned assets should be transferred for use by the third sector. The Government believe this country is both richer and fairer for the strength of our public services. We will never compromise on high standards, but neither will we ever compromise in our search for value for money. Today’s Command Paper sets a new path for the future that draws on the strengths created through a decade’s work, and I commend it to the House.”
“I am also today setting a goal of saving £1.3 billion by putting services online, halving the consultancy bill and reducing our marketing spend by a quarter. Fourthly, I am announcing today the first results of a comprehensive review of arm’s-length bodies, which will report by the time of the 2010 Budget. We will save £500 million a year from changes introduced by the review, and as an interim step we will abolish or rationalise 123 arm’s-length bodies, subject to the necessary consultation and legislation. Finally, I believe that, as part of this new future, the Government must either sell or transfer to different owners the things they no longer need to own. I am therefore publishing today an asset portfolio listing the state-owned assets that Government can commercialise over the medium term.”
“of civil service posts that are currently in London and the south-east to other parts of the country in the medium term. Secondly, Bill Cockburn, chair of the Senior Salaries Pay Review Body, will review senior pay across the whole of the public sector, reporting to Government in time for next year’s Budget. In the meantime, I will personally review all proposals for salary offers above £150,000 set by Government. Thirdly, we are publishing today plans drawn up by all Secretaries of State to increase the administrative efficiency for which they are accountable in human resources, IT, collaborative procurement and asset management. I am also publishing benchmarking information for all central Government Departments and major agencies, showing exactly where we will focus to deliver £9 billion of efficiency savings over the next few years.”
“I am therefore setting out today 10 steps that I, with the Secretary of State for Communities and Local Government, have drawn up to provide local councils with a range of trading, joint-venture and regulatory flexibilities. I believe that if we set in place strong rights to high standards and free up the front line to innovate, we can cut overhead costs at the centre. We are already on track to deliver £30 billion of savings between 2008 and 2011, but today I am setting out steps to save £12 billion more, and in the pre-Budget report we will set out further difficult choices that will have to be made if we are to halve our deficit over four years. First, we will reduce the costs of the senior civil service. I am announcing today that we will reduce senior civil service costs by 20 per cent. by 2012-13, and seek to move 10 per cent.”
“We will ensure that services, where they can, fit in with the demands of modern life by putting more services online, and we will redouble our efforts to persuade more people to use the internet. Today I can announce the provision of a further £30 million with the aim of getting 1 million more people online by 2012. We will free public data created using taxpayers’ money, including Ordnance Survey mapping and boundary information. We will make it easier for civic society to contribute to public life by pressing ahead with a new social investment bank, and by testing social impact bonds. Our second principle will be to free up the front line to innovate and collaborate by cutting back on ring-fenced budgets and national targets.”
“Today’s Command Paper summarises what we have learned from that work, but our starting point is a relentless focus on standards. We are ambitious for Britain’s future: we know that we can do well in the years to come. However, we know that if Britain’s families are to do well in the future, they will need first-class public services to support them. We will make first-class standards in public services not a privilege for the few but the right of all, by setting out—in health, education, policing and, in time, social care—new entitlements to high-quality public services, backed where appropriate by the force of law. To help citizens to hold local services to account, we will revolutionise the free availability of comparative information on police efficiency, hospital costs, and Government and local authority spending.”
“In the decade ahead we can capitalise on the great strengths that we have created, and set out a new way of driving standards in public services up, while we drive the deficit down. I am laying before the House today a Command Paper showing how the Government will set about that task in the years to come. It draws together more than 12 months’ work from literally thousands of people across public life, the private sector, charities and voluntary groups. I particularly thank Sir Michael Bichard, Sir Tim Berners-Lee and Nigel Shadbolt, Martha Lane-Fox, our efficiency advisers Gerry Grimstone, Lord Carter of Coles, Martin Read and Martin Jay, and those from across the third sector who have advanced the relationship between Government and civic society.”
“We always knew that with the right backing, Britain’s public servants could transform the quality and standards of public service in this country, and over the last decade they have—not by some happy accident, but by the work of careful design and determined investment. NHS investment has doubled, education investment is up by 60 per cent. and investment in public order and safety is up by 50 per cent. All that was achieved while over-delivering by 20 per cent. on our Gershon review savings of £26.5 billion in the three years to 2008. Thanks to that effort, we have reached a point at which the investment gap that we inherited in 1997 has been fixed. We have not only reached but exceeded international averages for spending on education and health. We are at a turning point.”
“With permission, Mr. Speaker, I would like to make a statement on “Putting the Frontline First: smarter government”, a Command Paper that I am presenting to Parliament today. This Government are very proud of Britain’s public services and Britain’s public servants: our doctors and nurses, who treat 1 million people every 36 hours; our police teams, who have brought down crime by a third; the teachers and support staff in our schools, who have helped record numbers of young people get record exam results this year; our job centre staff, who have helped 2 million people move off unemployment since last November; and, of course, our armed forces, serving with such distinction in Afghanistan and around the world.”
“The truth is that every one of those proposals was put forward by the Conservatives, but it turns out that none of them was worth the paper it was written on. No wonder the hon. Member for Runnymede and Weybridge has had to hire a group of Government advisers to answer an SOS—stand up our savings—from the shadow Chancellor, and no wonder he told us this morning that the front line would suffer under the Conservatives, because he has nothing else to pay for the £10 billion-worth of tax cuts that he has promised to people who are rich enough not to need them.”
“In fact, on closer inspection, it turns out that that would save no more than £50 million to £100 million. I was told that abolishing regional development agencies would save “a huge amount.” It turns out on closer inspection that it would save merely £180 million. I was told that capping public service pensions at £50,000 would save hundreds of millions of pounds. In fact, it turns out that it would save but a small fraction of that. I was told that taking child credits away from families who earn more than £150,000 would save £400 million a year, but it turns out that it would save only £45 million a year. I was told that bringing forward changes to the retirement age could save £13 billion a year, but it would make no impact whatever on the deficit in the next Parliament.”
“Gentleman went on to talk about productivity and tried to pray in aid some contributions from the ONS. Of course, the ONS said: “These are experimental statistics and work continues to develop the measures.” I know that there is a taste for experimentation among some people on the hon. Gentleman’s team. I hope, however, that it does not extend to the selective use of statistics. The hon. Gentleman talks about our matching his plan to save £3 billion from Whitehall. We are saying that we will save £12 billion, not only from Whitehall but from the wider public sector, over the next three to four years. Of course, there are a few proposals that I have examined in drawing up these efficiency plans today. I could, for example, have set out proposals to scrap ID cards, which I was told by some quarters would save £2 billion.”
“I shall be brief in my reply, Mr. Speaker. That was an extraordinary response. The hon. Member for Runnymede and Weybridge (Mr. Hammond) claims that there has been no reform in public services. Crime down by a third is reform. He says that there is no reform, but exam results are 50 per cent. better for our young people. That is real reform. He says that there is no public service reform, but getting people in to hospital in four and half weeks instead of 18 months is real reform that the public care about. The hon. Gentleman prayed in aid the NAO. The truth is that when the NAO considered the Gershon savings, it said: “Projects across the Programme are making” real “improvements to the efficiency of public services.” It went on to say that all of the £26.5 billion savings met the most robust category in its conclusions. The hon.”
“The simple answer is that I believe that too many people are paid more than £150,000, and my goal is to exert downward pressure. That is partly why I say that we should cut the costs of, for example, the senior civil service by 20 per cent. in the next couple of years. On data, we must get the balance right. Organisations such as Ordnance Survey can make a great deal of money by supporting specialist engineering and mapping companies with high-quality data. Ordnance Survey runs one of the best—if not the best—mapping services in the world. When there are opportunities to make available information such as low-resolution maps or boundary data, the public should be able to get hold of it free of charge.”
“It is right that many of the relevant reductions in targets should wait until the next comprehensive spending review, so that the plans that are drawn up reflect the resources that are provided. The hon. Gentleman asked some specific questions that I will try to answer. First, he asked about consultancy bills. My goal is to save about £512 million from the consultancy bill by 2011-12, by reducing it by 50 per cent. He asked about pay, and I reiterate that we have asked Bill Cockburn, the chair of the Senior Salaries Review Body, to draw up proposals on how to bring greater transparency to the system of setting senior sector pay and how to make sure that value-for-money bodies such as the Audit Commission and others are given a greater role in scrutinising those offers.”
“I am grateful for the hon. Gentleman’s welcome for at least some of these measures. I think that there is a direction of travel in some of the reforms that Liberal Democrat Members will welcome, not least the move towards greater freedom and flexibility for local authorities. When he has had time to study the report in some depth, I think that he will welcome some of the flexibilities that we have talked about. On Wednesday, my right hon. Friend the Chancellor will announce further measures, which attempt to bring a degree more freedom from the regime of inspection and performance setting that has helped to drive up service standards over the past 10 years. We will be able to retire some of that regime in the years to come, and there will be significant savings as a result.”
“May I put on the record my personal thanks to my hon. Friend for his work in not only championing new approaches to early intervention, but bringing pressure to bear on finding innovative forms of social finance? Social impact bonds appear in today’s Command Paper partly because of his work in lobbying for such change. In my authority of Birmingham, we have found that investment in early years can produce savings later in life. I think that Birmingham city council found that for every pound invested in early years, something like £4 could be saved in the criminal justice system later. Sometimes, different agencies from those responsible for early intervention reap the rewards of such intervention. Social impact bonds are a new way of bringing some of the incentives back into line. It is therefore right to test them out.”
“The hon. Gentleman knows that in the British administration a great deal of flexibility is given to, for example, local authorities. That is why it is right to look hard now at not only what constitutes the right level of pay for senior executives in different parts of the public sector, but the legislative changes that may be required to enable Ministers, when necessary, to exert downward pressure. I do not think that such legislative power is currently available in some parts of our public life, such as universities, further education colleges or local councils, but we have asked Bill Cockburn and his advisers to tell us a little more about that.”
“There are obviously some complicated parts of public administration in this country. For example, the health service is a big and important organisation, which spends somewhere north of £90 billion a year. We want first-class people running such organisations. However, in such times, it is incumbent on senior leaders in public life to show leadership on pay. The Government have therefore said to the pay review bodies that we expect a pay freeze for the senior civil service, and pay awards of no more than zero to 1 per cent. for civil servants more generally.”
“Obviously, we hope to achieve most of our cost savings through voluntary redundancy, natural wastage and so on, but I certainly cannot stand here today and rule out the possibility of compulsory redundancy. The hon. Lady will know that we introduced reforms last week to the compensation arrangements available to civil servants, which are projected to save something like half a billion pounds over the next couple of years.”
“The answer is that there is no European or other legal impediment to the proposal that we have introduced for the future of the Dartford crossing. My hon. Friend will know that it remains within the Government’s power to regulate tolls on the crossing.”
“My hon. Friend is right and, as I said, I am particularly grateful to Sir Michael Bichard and public servants across 65 local authorities and a number of constabularies and primary care trusts who are looking at how we can bring together the administrative services run by central and local government to eradicate exactly the kind of inefficiency to which my hon. Friend points. We will have more to say about how we take those findings forward in the Budget next year.”
“If we want to grow our economy in the years to come, we have to make sure that we have strong public services in this country that stand behind families who want to get on in life. The hon. Gentleman knows that if we want to raise standards in public services at the same time as halving our deficit, we must make sure that our economy grows and that we make the right decisions on public spending and on tax. That is a presentation that my right hon. Friend the Chancellor will make to the House on Wednesday, but the hon. Gentleman will surely admit that if we want to raise standards and investment in front-line services, it is right to look for inefficiencies that we can cut at the centre of government, and today’s plan sets out a way to do that.”
“There are two ways in which we can exert greater popular pressure to push up standards in front-line services. The first thing that we can do is set out a range of guarantees to high-quality public services. That means, for example, the right to see a cancer specialist within two weeks if a specialist is worried that a patient has cancer, the right to a good local police team and the right to one-to-one tuition for a child who is falling behind at school. With those rights in place, it is much easier to judge whether public services are delivering for consumers. That is why, in today’s Command Paper, we have set out steps to free up the kind of comparative information that allows people to see how services in their area are doing compared with others, and whether they are performing in a more efficient way than others.”
“I would need to check the date of the figure that was published by the NAO. The basic point is that, at a time when we are trying to drive standards up and the deficit down, in some parts of Government we will have to make difficult decisions about whether programmes that are in place are contributing enough to front-line care or whether they can be put off. There will often be difficult decisions. The decisions that we have set out in the Command Paper are difficult but doable.”
“I do not have quite the same apoplectic vision of public service reform as my hon. Friend. Sometimes there are efficiencies to be had through outsourcing certain services, particularly in finance, IT and so on. I make no apology for that. The prospectus that we set out this afternoon will be enthusiastically received by front-line public servants, not least because of its promise of greater freedom to innovate and do things in a different way locally.”