Mr Clive Betts
MP for Sheffield South East · Labour · United Kingdom
“I wholeheartedly welcome the Foreign Secretary’s statement, both its content and its tone. I would like to ask about his discussions with our colleagues and allies in other countries who are looking to implement similar sanctions.”
“I offer two congratulations: first, to my right hon. Friend and constituency neighbour, the First Secretary, on her well-deserved promotion—I am sure she will do an excellent job. Secondly, I congratulate her and the Prime Minister for their real commitment to devolution, which I have wanted to see for an awfully long time.”
“I apologise for the fact that—as I have explained to you, Madam Deputy Speaker—I will have to leave straight after my question to chair Westminster Hall. I thank my right hon. Friend for doing this very challenging piece of work. I think that the theme of fairness, for the people who need benefits and for taxpayers, is right.”
“On the other hand, so many constituents with really serious conditions get turned down for PIP, and can get it only if they struggle through the appeal system, sometimes without any help at all. So the system is not fair to anyone at present.”
“When the previous Government let the contract, we were in a situation in which procurement could not properly take account of the past record of companies, and I understand that the Government have now changed that.”
“I will dive very deeply into the question, Madam Deputy Speaker. The Chair of the Committee sends his apologies for his absence; he is presently in a Committee meeting.”
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“My hon. Friend is making a good point; the information that he has given the Committee about the great disparity in registration levels between his constituency and Sheffield, Hallam is very stark. But if he looks at information that was given to a Select Committee hearing in the Parliament before last in the House, about initial returns to the registration officer from different parts of Sheffield, he will find that registrations from Manor, an inner-city part of his constituency, were only just over 50% at first instance, while in the Dore ward in Hallam they were over 95%. And if we use a December figure before the canvassing has really got going to get additional people on the register, those initial returns and the disparity between them will be even greater than the disparity between the registers as they now stand.”
“Data-matching and data-sharing will be key if we are to ensure that thousands of people are not removed from the register as a result of this process. Will the Minister therefore confirm that the pilots will look at as wide a range of data sources as possible? Will he give an assurance that he will look at sources from the Driver and Vehicle Licensing Agency and the Department for Work and Pensions, for instance, and from universities, colleges and schools as young people are often not registered? Will he also consider looking at sources from utilities in the private sector, given that they form an important part of the registration process in Australia?”
“(Urgent Question) : To ask the Secretary of State for Communities and Local Government if he will make a statement on his intention to abolish the Audit Commission.”
“Value-for-money studies are not, as he tried to make out, some attempt to dictate to local authorities, but an important way of making comparisons between authorities, which are useful to the authorities and to the electorate in holding them to account. Who will undertake those studies in future? Finally, if the Secretary of State really believes in localism, why did he not consult local councils and the Local Government Association before announcing his decision?”
“I thank the Secretary of State for his response, but I am not sure that I am any clearer about the precise reasons for his decision. First, may I ask why it was necessary to announce this decision in the middle of the recess, rather than coming to the House and making a statement? There did not seem to be any particular time imperative. Will he place in the Library of the House all the detailed papers that he must have gone through showing how he came to his decision? Presumably it was not a rushed one, or a knee-jerk reaction. As for the annual audit function, does the Secretary of State believe that the private sector has the capacity to carry it out at the same cost as the district audit service? If business is transferred to the private sector, will there be a return to the public purse?”
“The Secretary of State said a few minutes ago that his Department was kept informed about the decision on Sheffield Forgemasters. Were he and his ministerial colleagues consulted before the decision was made, and if so, what views did they put forward in that consultation?”
“I know that the Leader of the House wishes that the question of Sheffield Forgemasters would go away, but it will not. When we have a further debate or statement on the subject, will he get Ministers who respond to address the important question raised by my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith)? When Ministers took the decision—we understand that they were Lib Dem Ministers—and officials were engaged in the discussions, were they aware of Andrew Cook’s objections? Were they aware that Mr Cook was a major donor to the Tory party? Importantly, were they aware of his conflict of interest and that he was expressing an interest in personally investing in the company?”
“Do you, or the House in general, have any powers to ensure that the record of the House can be corrected in this instance?”
“On a point of order, Mr Speaker. You have made it clear in the past that if a right hon. or hon. Member makes a statement in this House that is subsequently proved to be inaccurate, they should—at the earliest opportunity—make a correction to the House. On 22 June, we learned in Prime Minister’s questions that the Deputy Prime Minister had made a statement about the directors of Sheffield Forgemasters not being prepared to dilute their shareholding. Subsequently, he wrote to the chief executive saying that he recognised the inaccuracy of those comments, that he withdrew them and that he apologised. However, despite repeated opportunities at Prime Minister’s questions today—I listened as carefully as I could—the Deputy Prime Minister did not apologise, accept that he had been wrong or withdraw or correct his comments.”
“The Business Secretary almost admitted as much to the Select Committee the other day. We were also told that the loan had been a pre-election bribe to buy up a few votes at the general election, but the negotiations had been going on for between 18 and 24 months before the election. So what was the real reason for this decision?”
“Indeed, the Lib Dem leader of Sheffield city council, Councillor Paul Scriven, said that the commercial markets would provide the money. Will the Minister confirm that at a meeting with Forgemasters and his officials the other day, it was agreed that there were no straightforward commercial options without the loan? We have been told that there is no money, and that this is unaffordable, but we are talking about an £80 million loan, not a grant. It would have been repaid with interest, making a repayment of £110 million, plus additional money from equity warrants if the investment had been successful, plus the tax revenue from those employed by Sheffield Forgemasters and by companies in the supply chain such as Davie Malcolm, Siemens and Rolls-Royce. This loan would actually have made a profit for the Treasury.”
“The kindest thing I can say is that it was a virtual review; the worst thing I could say is that it was an absolute sham. Since then, various reasons have been given for the refusal of the loan, including that the directors would not dilute shares. The Deputy Prime Minister and the Prime Minister said that, but the former has had to write to the chief executive to apologise for making inaccurate statements, although he did not apologise today in the House. Private funding was involved via an element of equity release, but the company would not continue with extra equity release to the point at which control passed back to an absentee owner—the very sort of owner that nearly bankrupted the company in 2005 when the workers and management had to save it. It was said that commercial options were available.”
“I do not think that France and Germany would have such a dilemma about what to do about investing in such a company. After the election, we were told that there would be a review. Funnily enough, most of the reviews that took place actually approved schemes that were in train, so let us examine what the review of the Forgemasters loan amounted to. There was no new cost-benefit analysis and no new external advice was sought. Indeed, the Government did not get back to the original advisers. There was no contact with Forgemasters. The first time the company learned anything of the review was when the chief executive got a phone call from a Minister, who said, “Your loan has been withdrawn.” That is no way to carry out a review.”
“Eventually, an £80 million loan was agreed as part of a package involving private investment, including support from Westinghouse, loans and equity release. There was a full appraisal by Department for Business, Innovation and Skills officials and Treasury officials. It was confirmed in parliamentary answers that the independent Industrial Advisory Board gave its assessment, and that Deloitte and Allen & Overy looked at market opportunities and additionality, and at cost-benefit and commercial considerations. After all that, it was concluded that a loan of £80 million was the right way to go as part of an overall package. The loan was also part of an industrial strategy with a nuclear research centre and the Advanced Manufacturing Park.”
“The company has full order books and 80% of its work is for export, and it has a turnover of £100 million. All the company’s profits to date have been reinvested. Two or three years ago, the company saw a major opportunity in the nuclear industry. With £150 million of investment, it could buy a 15,000 tonne forging press. However, as that was larger than the company’s total annual turnover, it needed additional help. It went to my friend, the previous Member for Sheffield Central, Richard Caborn, who deserves a great deal of credit for the help he gave at that time. That package would have created 400 jobs. The Government were approached and over a two-year period, very detailed negotiations were held.”
“As a child growing up in the city, the pounding of the drop forges down in the Don valley, which is now part of my constituency, was like the very heart of the city beating. However, this debate is not only about the history of industry in Sheffield, but about its future. In 2005, when the company was part of the Aitchison group, there were major financial difficulties. Eventually, the company was saved by a management buy-out led by chief executive Graham Honeyman, who by putting his own money in saved the firm, its workers’ jobs, debts to suppliers and, with the help of the pension protection fund, the workers’ pensions. Despite initial problems with cash flow and rising energy prices, the company became profitable and increased in size to 700 employees, taking on 70 new apprentices.”
“Normally when a Member speaks in an Adjournment debate at this time of night, they stand in the Chamber in splendid isolation. It is obviously pleasing to see so many right hon. and hon. Friends here tonight, particularly four other Sheffield MPs, my right hon. Friend the Member for Sheffield, Brightside and Hillsborough (Mr Blunkett), and my hon. Friends the Members for Penistone and Stocksbridge (Angela Smith), for Sheffield, Heeley (Meg Munn) and for Sheffield Central (Paul Blomfield). It is also pleasing to see my right hon. Friend the Member for Rotherham (Mr MacShane) and many other colleagues. This issue affects not merely Sheffield—it has touched a nerve across the nation—but forging and forgemasters are very important in the history of Sheffield.”
“In the end, Sheffield Forgemasters will continue to be a successful company without this loan. Without it, however, the losers will be UK workers, UK industry and the UK economy. In the light of the cloud that these letters have now cast on the real reason for the withdrawal of the loan, and in the absence of any other real reasons being provided, will the Minister now accept that the case for a proper independent review into this whole matter is unanswerable?”
“Did the Deputy Prime Minister or the Business Secretary know about it? Did the Chief Secretary to the Treasury know about it? Tonight, Downing street has issued a statement saying, “Not us, guv. It was all down to the Liberal Democrats. It was down to the Business Secretary and the Chief Secretary to the Treasury. They made the decision.” It will be interesting to hear people’s response in Sheffield to how the Lib Dems have treated them in this regard. When did Ministers know about this letter? Was it taken into account in reaching the decision? It is difficult to believe that it was not, because there was not one other shred of evidence thrown at the review that could have led the Government to change the decision that had been taken previously.”
“I believe the private sector could provide the required finance without the taxpayer shelling out…It is a typical labour ‘sacred cow’. I believe you may be the best person to consider this matter as Vince Cable may find it a difficult nettle to grasp, being as Nick Clegg is a Sheffield MP.” Well, he needn’t have worried about that, need he? A second letter from Andrew Cook, dated 9 June, states: “For the record, I am convinced from my own industrial experience that the necessary finance could be raised from the private sector.” He goes on to cite “the reluctance of local management to accept outside equity investment.” Where have we heard those comments repeated subsequently? Did the Minister, or any other Minister or civil servant, reply to this letter? Who knew about the letter?”
“I have not heard any other reason. I have read out four reasons, all of which have been proved to be inaccurate and untrue. I shall read out some of the letter that Andrew Cook sent. There were lots of letters sent in during the review, but I think the Minister will be able to confirm that this was the only one that objected to the loan and said that it should not be granted. It is dated 25 May, and it begins: “Dear Mark, I am the largest donor to the Conservative Party in Yorkshire and have been since David Cameron was elected leader. I am delighted you are at last back in power, albeit in coalition.” The letter goes on: “I have specialist knowledge of the situation which I would like to share with you confidentially. The loan is probably unnecessary and possibly illegal under EU rules.”
“I do not know whether the Minister is aware of or concerned about the damage that his changes to planning policies are already causing, but has he had the chance to read a well researched article in the Financial Times at the weekend, which showed that 7,500 houses in various schemes have already been cancelled as a result of those changes? Is it not the case that the Government’s policies are already proving damaging to the house building industry and bad for everyone in desperate need of a home?”
“Will the Secretary of State withdraw the entirely false accusations that were levelled at Graham Honeyman, the chief executive of Sheffield Forgemasters, that he was not prepared to sell any shares in the company? The reality is that the loan facility went alongside a private finance package involving equity release. What Graham Honeyman and the workers, 65% of whom own shares in Forgemasters, did not want to do was sell the company off to an absentee owner, given that they had rescued it from an absentee owner and near-bankruptcy in 2005. Will the Secretary of State withdraw the accusations against Graham Honeyman and recognise that he has resurrected that company and that it would do even better in future if it had the loan alongside a package involving equity release?”
“On a point of order, Mr. Speaker. Given the unsatisfactory nature of the reply, may I indicate that I would like to seek to raise this matter on the Adjournment at a further date?”
“Order. Five hon. Members are indicating that they want to speak, which means that they have about eight minutes each if we are to get the winding-up speeches in. I cannot insist on that, but it would be helpful if hon. Members bore it in mind.”
“I thank all hon. Members for their co-operation in getting the timing right, so we have time for the winding-up speeches. I think that the two Front Benchers have about 12 minutes each.”
“In terms of procedure, normally the hon. Member initiating the debate would speak, then the Minister would respond. The hon. Member would not come back. It would have helped if the hon. Member for Great Yarmouth (Brandon Lewis) had intervened beforehand, but I will allow a brief response.”
“I completely agree with my right hon. Friend’s analysis of Total Place. It is a way forward; it is not going to deliver immediate savings, but with proper planning it could deliver. However, it cannot be delivered properly through central diktat from the Secretary of State. If improvements are to be delivered, there has to be a real transfer and devolution of power not merely from the Department for Communities and Local Government, but from the Department for Transport, the Home Office and all other Departments, to allow local authorities to take the lead at local level.”
“Will the Minister clearly explain what his targets are for the number of social houses that should be built in this country each year? How will the building of such housing be achieved? What policy mechanisms will he use, and where is the funding to deliver the programme?”
“The housing association building model depends on cross-subsidies from the selling of homes. If the private sector housing market is stalled, those cross-subsidies will not be available. We do not know what will happen to social housing, because there is complete silence from the Government. All we know is that people who are in social housing will have a tougher time with the housing benefit rules, and some may be forced out of their houses into private rented accommodation.”
“The first thing they have done is to suspend the Kickstart programme and schemes whereby local authorities were going to build houses directly for the first time in a long time. Labour and the Lib Dems welcomed that approach when it was introduced, but the Lib Dems are now cutting and stopping it. That is the reality of the situation. If local authorities are no longer allowed to build, what are the alternatives? I have not heard any. We have been promised an announcement at some stage in the future. We have also been told that the reforms to the housing revenue account have been put on hold. That was one of the few opportunities for local authorities to return to council house building. If they could depend on a given rental stream for the future, they could perhaps use prudential borrowing for that purpose.”
“The problem is that people are going to be much more careful about committing themselves to buying a house as we head towards a situation in which spending will be reined in, people will be fearful of losing their job, wages will fall and benefits will be cut. The likelihood is that the housing market will stagnate, at best, in the next few months. Whether a double-dip recession and the economy going down will produce a slowing down of the housing market, or whether a slowing down of the housing market will produce a double-dip recession, is a chicken-and-egg argument. The likelihood is that economic activity will stall and the housing market will stall. If fewer people feel able to commit to buying a home, there will be more pressure on social renting and local authority waiting lists, so what have the Government done?”
“I did not get an answer earlier from the Minister for Housing about housing targets: he said that the Government did not have any. I did not get an answer about likely numbers, how that area will be funded or what the funding mechanisms will be. I have a real worry regarding the comments of Liberal Democrats about the last Government not building enough houses. I have some sympathy with those sentiments because I think that although we did brilliantly on the Decent Homes programme, we did not build enough social houses to rent. That needs to be rectified, but does any Lib Dem in the House seriously believe that this Government will do better, when they have no idea how that will be achieved? That is complete nonsense.”
“Bringing in cuts part way through the year has forced local councils to make the cuts that are available to them, which are not necessarily the cuts they would make if they had a bit more time to plan and bring them in properly. We also disagree fundamentally with the way the cuts have been targeted at funds that are themselves targeted at areas of deprivation. They are cuts against deprived communities, and they are the sort of cuts that the Under-Secretary of State for Communities and Local Government, the hon. Member for Hazel Grove (Andrew Stunell), would have been on his feet protesting about only a few weeks ago. I want to raise two concerns about where the Government are headed—with their approach to housing and their approach to the general cuts to local government that will be announced in the next few weeks.”
“Unfortunately, Wolverhampton Wanderers managed to sell to Sheffield Wednesday one Leon Clarke, whom the hon. Gentleman might remember. Leon Clarke finally scored a goal in the last game of the season, when we were struggling to avoid relegation. In celebrating his wonderful goal, he ran to the advertising hoardings and kicked them, breaking his toe, and was then substituted. I do not think it is true that everything that comes out of Wolverhampton is necessarily first class and admirable. Let me move on to the debate. The Opposition have made it very clear that we have major reservations about the immediate impact of the cuts and about the proposals for the medium term. We believe it is unnecessary for the cuts to come immediately and that they go too far in the immediate term. We also believe that they are unfair in a number of respects.”
“Let me begin by congratulating the hon. Member for Wolverhampton South West (Paul Uppal) on his excellent maiden speech. He certainly covered the attributes and aspects of his constituency. I congratulate him on the special place that he has achieved in parliamentary history and in the history of the Conservative party. It was good to hear his very generous comments about his predecessor, Rob Marris, who was respected for his honesty, integrity and friendship on the Labour side of the House. I think that is appreciated. I was just having a brief discussion with my right hon. Friend the Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) and my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith) about the good things that come out of Wolverhampton.”
“If the Minister does not agree with that, he must explain why my figures are wrong. If such facilities as adults’ and children’s services are protected from the 30% cut in the grant, the impact on other services will be dramatic, especially in areas that receive a large amount of Government support because of deprivation.”
“Councils with the most deprivation in their areas receive a bigger amount of grant than those with the least deprivation, which receive more of their money from council tax. Council tax is to be frozen but Government grant is to be cut by 25%, which means that the councils that will suffer the biggest cuts in their overall budgets are those with the most deprivation. That is unfair, and we fundamentally oppose it. The Liberal Democrats used to oppose it as well, and it is time that one or two Members on the Government Benches, including the Minister, started to explain how they will make the system fair. The fact is that the most disadvantaged councils and communities will be hit hardest by the 25% cuts in Government funding. In their areas, library, recreation and street cleaning budgets will be cut in half.”
“We are assuming that councils will receive at least 30%, but the arrangement is not fair, because we will have to protect adult social services and children’s services. What is left? Libraries, parks, recreation, street cleaning, the environment and refuse collection. It is no use the Secretary of State telling local authorities how to collect their refuse. Will they have the money to pay for one refuse collection a week? Then we must consider the differing impacts on various councils. I opposed individual council tax caps when our Government introduced them, and refused to vote for them, but let us assume that they are imposed now. At least authorities will receive the same amount of money from council tax, but there will be cuts in their Government grant.”
“There are no funds for council house building—they have been stalled—and the funds for housing association building are limited. Given the reduction in cross-subsidy from the selling of homes, any money that the Homes and Communities Agency may have to fund housing association accommodation will produce fewer houses. Fewer social houses will be built as a result of this Government’s policies, and I am aware of no commitment from Ministers to rectify the position. What will the Government do about the overall funding situation? We have heard about 25% cuts, and also about protection for education. Presumably Departments other than those dealing with schools and defence will take a bigger hit.”
“Obviously it would be up to the Government to make any such announcement, but the idea that people should move from communities in the north, where there may be enough housing, to find jobs in the south, where there is a particularly chronic housing shortage, beggars belief. What would people on waiting lists in the south think of someone who arrived there and said, “I will have that house as a matter of priority, because I am moving down here to work”? The policy has not been thought through. If any Member on the other side of the House can tell me where the mechanism and the funds will come from to enable new social rented housing to be built, I ask him or her to stand up and do so. So far, I have heard nothing from either the Conservatives or the Liberal Democrats.”
“The Budget was not fair and the cuts that have been made so far to local council budgets are not fair. The deficit is truly being cut on the backs of the poorest in our communities.”
“How can we have any trust or faith in a Government who talk about localism and setting local councils free when that is one of their first policy announcements? It is clear that the Budget package was regressive. That has been shown by the Institute for Fiscal Studies. There was an interesting report in the newspapers at the weekend of an investigation into the totality of the Government cuts by Tim Horton and Howard Reed on behalf of the Fabian society. It showed that when one takes not merely the tax changes but the housing benefit changes and the spending cuts, including local government spending cuts, the poorest 10% of our community will have their spending power cut by six times as much as the richest 10%. That is the impact of the Government’s policy.”
“The DCLG must get a grip of its colleagues in other Departments and let go of the controls that exist, but that will not deliver overnight savings of 25%. We will not achieve 25% or 30% cuts by efficiency savings; there will be real damage to public services. We must recognise that, and the Government must explain and justify the cuts. The Secretary of State says that his three priorities are localism, localism and localism, but let us take what the Minister said about refuse collection and people in town halls dictating things. Where is the dictation? The Secretary of State in his new spirit of localism is telling every council in this country how it must empty the bins. It is absolute nonsense.”
“In the end, the Government grant reflects the amount of deprivation in an area. Clearly, there are deprived people even in affluent areas, but it is about the total amount of deprivation. Certainly other communities have more deprivation and that is why they get more Government funding and they will be harder hit. That is the point that I am making. Right at the end of the Minister’s speech we got a vague mention of Total Place. It is important that it is developed, but it should not be seen as a panacea. Total Place is at the pilot stage; it has produced some very interesting results and ideas about how public money can be spent better across Departments. The Government have to allow local authorities to take the lead on these matters.”
“During the general election campaign, the Minister said that immediate cuts were not necessary or desirable. Will he tell the House precisely on what day he changed his mind?”
“Does the right hon. Gentleman accept that the Institute for Fiscal Studies, in its report on the Budget, said that the new measures were largely regressive, and that was before housing benefit cuts were taken into account? A survey at the weekend by Tim Horton and Howard Reed said that if the housing benefit cuts and spending cuts were taken into account, the poorest 10% were likely to face a six times greater reduction in their spending power than the richest 10%. Does that make it a fair Budget, in the right hon. Gentleman’s opinion?”
“However, if we are looking at future sittings, planning will be required, as will proper advice from the Officers who run the Palace of Westminster for us. All Members should have access to that advice before voting on such sittings in the future.”
“We should try to plan our sittings for a whole Parliament, which would also help Members to organise their activities outside the House. If we could achieve all that, we could better approach these issues that are crucial to our working, even though they are quite dry and sometimes turgid matters that might not excite people politically. It is also important that we send a message to the public that if we have to make cuts to the services that they receive—we might disagree about where the cuts should fall and how great they should be—we will take proper account of the money that we have for the House and ensure that we spend it cost-effectively. Unless we carry out proper planning, however, that simply will not happen. It is absolutely right that, if the Government wish, we should come back in September on the basis of the motion.”
“Members have any doubts about the situation, they should take a trip down to the underground passages under the House to look at the state of the mechanical, engineering and electrical systems, because they are very bad indeed. We know that a massive work programme will be needed. That will need planning, organising and funding, and it must be cost-effective. If we can shut down the building for only five weeks at a time, it will probably not be possible to carry out the programme. It is not sufficient that I report these concerns to hon. Members second hand, so it is important that proper reports are made to the Commission and the Finance and Services Committee, with the audit Committee having a look, so that there can be a report to the whole House to inform Members’ decisions.”