House of Commons

Monday 14th June 2010 Commons Chamber

Monday 14 June 2010

The House met at half-past Two o’clock

Prayers

Monday 14th June 2010 Commons Chamber

[Mr Speaker in the Chair]

Business Before Questions

Queen’s Speech (Answer to Address)

The Vice-Chamberlain of the Household reported to the House, That Her Majesty, having been attended with its Address of 25th May, was pleased to receive the same very graciously and give the following answer:

I have received with great satisfaction the dutiful and loyal expression of your thanks for the speech with which I opened the present Session of Parliament.

Sessional Returns

Ordered,

That there be laid before this House Returns for Session 2009-10 of information and statistics relating to:

(1) Business of the House;

(2) Closure of Debate, Proposal of Question and Allocation of Time (including Programme Motions);

(3) Sittings of the House;

(4) Private Bills and Private Business;

(5) Public Bills;

(6) Delegated Legislation and Legislative Reform Orders;

(7) European Legislation, etc;

(8) Grand Committees;

(9) Panel of Chairs; and

(10) Select Committees.—(The Chairman of Ways and Means.)

Oral Answers to Questions

Monday 14th June 2010 Commons Chamber

The Secretary of State was asked—

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

1. Whether he plans to increase the amount of information Jobcentre Plus advisers may share with local health practitioners and Sure Start children’s centres.

[The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)]

I have no current plans to increase the amount of information that Jobcentre Plus advisers can provide to local health practitioners and Sure Start children’s centres. Social security information can be shared with those parties with the consent of its customers.

[Mr Sheerman]

One hopes that the new Government will still support Sure Start children’s centres. Certainly, an inquiry of the former Children, Schools and Families Committee showed that the sharing of information was absolutely crucial. Does the hon. Lady agree that the sharing of information, knowing how our children are surviving and thriving and when they are in trouble, is vital to children’s future health and welfare?

[Maria Miller]

I thank the hon. Gentleman for his question. As he will be aware, the coalition Government have protected Sure Start from in-year cuts, and I am sure that he and the whole House will welcome that announcement. He has looked at this issue in detail, and in the most recent report of the CSF Committee, of which he was the Chairman, there was no clear evidence that data sharing between Jobcentre Plus and children’s centres was a problem. However, there can be such a problem between children’s centres and health professionals. The Government believe that early intervention is absolutely vital in the work that we are doing to alleviate poverty and that co-ordination and signposting between those organisations are important. That is one of the reasons why we have put Sure Start health visitors in Sure State children’s centres.

[Nicholas Soames (Mid Sussex) (Con)]

In agreeing with the hon. Gentleman about the importance of co-ordination, may I ask whether my hon. Friend agrees that most of the worst disasters that affect children that have become public are concerned with a lack of information shared between the authorities? Does she agree that it is extremely important that all those who are involved in these matters truly understand what each hand is doing?

[Maria Miller]

My hon. Friend is obviously talking about a great many different data sources. As I said, information-sharing difficulties between Jobcentre Plus and children’s centres is not a particular issue of concern, but I take his point and I am sure that our new Cabinet Committee on social justice may want to consider it to ensure that nothing is being missed.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

Will the Minister explain how sharing and co-ordinating between those agencies will be helped by the reduction in the working neighbourhoods fund, which joins lots of different Departments and local agencies? As a result of the Government’s recent announcement, £1.2 million has been taken away from that fund in Nottingham. That money pays for apprenticeships, welfare rights advice and helping to reduce teenage pregnancies. How will that reduction help such work?

[Maria Miller]

Undoubtedly, the hon. Gentleman will be very pleased about the coalition Government’s announcement of 50,000 additional apprenticeships, which will provide the sort of long-lasting job opportunities that his constituents want. Obviously, other decisions on budget taking are made locally, and it is for local authorities to make important decisions on how best to use their local resources.

[Mr David Amess (Southend West) (Con)]

2. What plans he has to reduce the number of people claiming out-of-work benefits.

[Mr Rob Wilson (Reading East) (Con)]

5. What recent discussions he has had with ministerial colleagues on reducing levels of unemployment.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

One of our top priorities is to reduce the number of people—nearly 5 million—on incapacity, lone parent or jobseeker’s benefits. We will reform the benefits system to make work pay and reassess the position of people on incapacity benefit, through a single, integrated package of support, to give people the personalised support that they need to find work.

[Mr Amess]

I congratulate my right hon. Friend on his appointment. He might be aware that this subject was raised regularly on the doorstep in Southend West, since when I have found out from the Department that 1.4 million people have been on out-of-work benefits for nine or more of the past 10 years. How does he intend to deal with that situation fairly but firmly?

[Mr Duncan Smith]

My hon. Friend is absolutely right. The figures are somewhat worse than that—the UK has a higher proportion of children growing up in workless households than almost any other EU country. We have had a very high level of residual unemployment for far too long. The key to dealing with that is the integrated Work programme, which will look at ways of trying to get back into work some of those long-term unemployed—many of whom have been parked on incapacity benefit and forgotten about—and support those who have not been contacted. Something like 40% of unemployed people had not been contacted for over six years; no one had bothered even to speak to them. We will also try to reform the benefits system so that when someone can go to work they will straight away see that it is worth their while to do so, whereas at the moment work simply does not pay, or appears not to.

[Mr Wilson]

Unemployment has continued to rise in my constituency, and the impact is particularly being felt by young people. What further action will the Secretary of State take to help them after the failure of 13 years of Labour?

[Mr Duncan Smith]

The first thing I can say to my hon. Friend is that one of the key coalition drives is to stop the would-be jobs tax, the national insurance charge, that was to be imposed by the last Government when they were in power because that would have taken away a great many opportunities for young people. The other thing is to make sure that the targeted Work programme, which the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling), will be speaking about in more detail later, helps the youth unemployed get back to work. We must remember that after all the money that was spent by the other Government, youth unemployment is now higher than it was when they came into office in 1997.

[Joan Ruddock (Lewisham, Deptford) (Lab)]

Last week, the new Government announced that the jobcentre in Deptford, serving 2,500 of my constituents, is to be closed. Will the right hon. Gentleman meet me urgently to discuss how he plans to help the unemployed in my area, or is this to be the first example of how the coalition seeks to protect the poorest and most vulnerable from its savage cuts?

[Mr Duncan Smith]

I am very happy to meet the right hon. Lady at a moment of her convenience. I understand that the centre had reached the end of its lease, and we are trying to find a way of ensuring that there is support in the area. I am happy to meet her and deal with those specifics.

[Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)]

The Secretary of State says that he wants more people off benefits and in work. He will know that that depends on their having jobs to go to. Can he tell the House exactly how many of the 205,000 jobs planned under the future jobs fund he is cutting as a result of his plans?

[Mr Duncan Smith]

The right hon. Lady will know that we are not cutting any jobs at all. We are saying that we will stop the part of the programme relating to jobs that were not contracted for. All the other jobs that are contracted for will go ahead. Originally it was estimated that that meant that 140,000 jobs would be found. In fact, we understand the number to be about a third fewer than that—about 100,000—although we will know when we get closer to the time.

I say to the right hon. Lady that the money that we save will go towards preventing the jobs tax—the national insurance tax—that her party was going to impose on those people when they took work, which would have meant fewer people being in work. We will also have the money to make sure that 50,000 new apprenticeships, which are sustainable jobs, come into existence under this Government.

[Yvette Cooper]

Can the Secretary of State confirm that the Office for Budget Responsibility, which today issued its forecasts based on the previous Labour Government’s tax and spending plans, in fact confirmed that unemployment would continue to fall in future years, including the plans for national insurance contributions? Can he also confirm that the Labour Government’s plans set out at the Budget were for 205,000 jobs under the future jobs fund this year and next, and his Department’s website says that only 111,000 jobs will be funded? Can he confirm that 205,000 take away 111,000 is 94,000, and that he will therefore be cutting nearly 100,000 job opportunities for young people and the long-term unemployed—cutting support for the jobless when they need it most?

[Mr Duncan Smith]

I know that the right hon. Lady feels personally wedded to this programme, but those figures are quite ludicrous. She poses notional figures of jobs that she might have created had the scheme worked against jobs that we believe are likely to be there, so a silly game is being played out.

Whether the right hon. Lady likes it or not, had she got into government—heaven help us—she would have had to cut back on various budgets, as her own Government at the time said they would. Where would she have made those savings? She cannot, now that she is in opposition, simply say no to everything. Her Government went on a spending spree like drunks on a Friday night, and we have all got the hangover now.

[Richard Fuller (Bedford) (Con)]

Would my right hon. Friend agree that the right way to get people back into work is to support our thriving small business and entrepreneurial sector? One of the key measures is to see that the small business sector has access to finance—something that, under the last Government, Labour Members failed to achieve.

[Mr Duncan Smith]

My hon. Friend is absolutely right. What is so often forgotten by Labour Members is the need to make sure that jobs are created by a vibrant small business sector. Of course, the first thing that would have damaged that sector would have been the rise in national insurance, which we have managed to stop as a result of our changes.

[Mr David Hanson (Delyn) (Lab)]

3. What steps he is taking to promote employment opportunities in Wales.

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

Business and the economy are, as the right hon. Gentleman knows, devolved matters. However, Jobcentre Plus in Wales is notified of thousands of vacancies each month. Jobcentre Plus advisers ensure that jobseekers know of all sources of vacancies, and that is included in the review of jobseekers’ job search activity every two weeks. That focus on jobs will also be a key part of the support offered to people who are migrating from incapacity benefit to the employment and support allowance. Jobcentres in Wales also regularly hold jobs fairs to highlight employment and training opportunities.

[Mr Hanson]

Could the right hon. Gentleman tell the House how he thinks cutting £320 million from the future jobs fund will assist job creation in Wales, and will he give me a guarantee today that the almost 10,000 jobs that have been agreed under the future jobs fund, from Rhyl to Rhondda, will not be cut by his Government?

[Chris Grayling]

What the right hon. Gentleman needs to understand is that Wales and every other part of the United Kingdom need sustainable employment, and that is why we needed to stop the jobs tax that the last Government were planning to introduce. That is also why we need to provide incentives for small employers—those employing fewer than 10 people—to take on people by giving them a discount on their national insurance contributions. Those are measures that can and will make a difference.

[Harriett Baldwin (West Worcestershire) (Con)]

Many of my constituents have Welsh connections—[Interruption.] It is true. What would the Minister say to a constituent of mine who is physically very fit, but who has mental illness? How will we help people with mental illness back into work?

[Chris Grayling]

That is particularly relevant to the situation in Wales, where there are substantial numbers of people claiming incapacity benefit or employment and support allowance, as there are in other parts of the country, such as in my hon. Friend’s constituency. We need to ensure that we provide the best possible support, so that we give those people an opportunity to move into work. That is what we will do from later this year, when we begin work on migrating people from incapacity benefit to the employment and support allowance. I am confident that we can give many of those people an opportunity to get back into the workplace and make more of their lives.

[Several hon. Members]

rose—

[Mr Speaker]

Order. May I congratulate the hon. Member for West Worcestershire (Harriett Baldwin) on her ingenuity? I mean that genuinely. However, we will now focus specifically on people who are not associated with or linked to, but resident in, Wales.

[Hywel Williams (Arfon) (PC)]

Can the Minister assure me that the Government are doing their utmost to protect existing jobs in small companies, for example by encouraging Departments not to take peremptory action on, say, unpaid tax or regulation matters?

[Chris Grayling]

The hon. Gentleman is absolutely right: it is necessary for us to support employment in the private sector, particularly among small employers; that is why I made particular reference to our plans regarding national insurance contributions for small employers. I know, because we in the Department for Work and Pensions have already looked, that we have a good record on paying small employers, and I hope that my colleagues across Government will do everything that they can to support those small businesses, as they will provide the jobs of the future. It is not Government schemes that will create wealth and employment in future, but real business people, building real businesses.

[Philip Davies (Shipley) (Con)]

4. What plans he has for the future of the Child Maintenance and Enforcement Commission.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

The whole issue of tackling child poverty and supporting families is the key objective of this Government. A significant component of that is that parents should take responsibility for their families, even if both parents do not live together. However, the Government have inherited a significant debt package of £3.8 billion, and some of that debt dates back to before the Child Support Agency was amalgamated into the Child Maintenance and Enforcement Commission. Furthermore, I understand that CMEC has not set a target for the recovery of the debt. I am meeting the chief executive of CMEC this week, and I intend to ask him to do a review on how arrears are collected, and I will insist that he sets a target for the collection of such arrears as soon as possible.

[Philip Davies]

I am concerned that the Child Support Agency and its successor body often do not pursue absent fathers who are paying nothing and file those under “Too difficult,” and instead target people who are already paying to try and screw more out of them. Will my right hon. Friend ensure that the Child Maintenance and Enforcement Commission goes back to what it was set up to do—to target absent parents who pay nothing, rather than trying to get more and more money out of the many people who are doing their best?

[Mr Duncan Smith]

I can guarantee to my hon. Friend that that is exactly what we will try to do. It is not the easiest set-up. There will be changes later in the year to the CSA, but I can promise him that we want it to make sure that those who owe that money pay it. The previous Government let them off the hook.

[Mary Creagh (Wakefield) (Lab)]

It is the Government’s stated intention to cut all quangos and non-departmental bodies by 20 per cent. How will the right hon. Gentleman better enforce the payments by absent parents when the budget for the commission is being cut?

[Mr Duncan Smith]

There are already plans for the organisation to make sure that it improves the quality of its work. It was set up to make sure that absent parents, for whom we all have to pay because they are not paying their way, ante up to their responsibilities, which is good both for their children and for the whole of society.

[Lisa Nandy (Wigan) (Lab)]

6. If he will bring forward proposals to ensure that all staff of his Department are paid at a rate of at least £7.60 per hour.

[The Minister of State, Department for Work and Pensions (Steve Webb)]

The figure of £7.60 per hour to which the hon. Lady refers was the London living wage until last week, and I can confirm that all directly employed DWP staff in London are paid £7.60 or above and, indeed, are paid more than the new London living wage of £7.85 announced by the Mayor of London on 9 June.

[Lisa Nandy]

I am sure the Minister is aware of the economic as well as the moral case for the living wage that was most recently advanced by the Mayor of London. In the light of that, will the hon. Gentleman confirm that as well as the directly employed staff, contracted-out staff in his Department, such as cleaners, will also be employed on the living wage because they do such important work for the people of this country?

[Steve Webb]

The hon. Lady is right to point to the position of contracted staff. She will be aware that long-term private finance initiative contracts were entered into by the Labour Government which involve paying people less than the living wage. We have inherited that practice. However, I understand that Telereal Trillium, with which we have our principal contract, including for cleaners, has an agreement with the relevant trade unions to pay higher rates on new tenders.

[Stephen Mosley (City of Chester) (Con)]

7. What steps he plans to take to reduce child poverty.

[The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)]

Section 14 of the coalition document confirms the Government’s commitment to ending child poverty in the UK. We believe that the best way to tackle this issue is to address the root causes of poverty, because it is only by doing this that we can improve outcomes for children in the most effective way. Over the next 12 months we will put in place a robust, sustainable strategy to end child poverty.

[Stephen Mosley]

It is impossible to look at the situation of a child without looking at their family situation. To that end may I highlight the pioneering work that is being done by Save the Family in Chester and north Wales under the leadership of Edna Speed MBE? Has the Minister any plans to encourage the expansion of such pioneering family-based schemes across the country?

[Maria Miller]

I thank my hon. Friend for bringing the important work of Save the Family to the attention of the House. I am familiar with the project in north Wales, and my right hon. Friend the Secretary of State has visited it. Keeping families together is important, and I will do all I can to encourage colleagues who are considering child poverty across Government to consider the work being carried out by Save the Family. Family stability is vital and I am sure it will form part of the strategy that we work on to end child poverty.

[Malcolm Wicks (Croydon North) (Lab)]

One of the root causes of child poverty is teenage pregnancy. Before he assumed office, the Secretary of State—I congratulate the team on their new positions—did important work on the links between poverty and teenage pregnancy. What talks were held last week with the Secretary of State for Education before he announced cuts to local authority education and children’s budgets, which will, among other things, undermine the future of teenage pregnancy projects?

[Maria Miller]

I thank the right hon. Gentleman for his question. Teenage pregnancy is a critical part of the poverty strategy and one of the issues that will be considered in the cross-departmental Cabinet Committee on social justice which we will establish. It is important for the House to remember that, under the previous Government, not enough progress was made on that matter, but we will put that record right.

[Helen Goodman (Bishop Auckland) (Lab)]

Can the Minister confirm that the decision taken in recent days not to extend entitlement to free school meals to primary school children whose parents are on working tax credit will mean 50,000 more children living in poverty than otherwise would have been? Yes or no?

[Maria Miller]

We should be absolutely clear that the rules for determining eligibility for free school meals have not changed, and all pupils who currently qualify for free school meals will continue to be eligible. The issue was dear to the hon. Lady’s heart and something that she pushed forward when she was in government, and I should like to reassure her that there are pilots in place in Newham, Durham and Wolverhampton to see whether there is a robust case for extending free school meals. We feel that the extension was prematurely announced, without evidence from the pilots, so I ask her why, if she felt so strongly about the issue, she did not push it forward earlier in the 13 years of a Labour Government.

[Tracey Crouch (Chatham and Aylesford) (Con)]

8. What his policy is on the provision of support for people who are unable to work as a result of a disability.

[The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)]

The Government recognise that some people will not be able to work, or prepare for work, because of a disability. Those people will receive unconditional support and be able to have help to find employment on a voluntary basis. Financial support for those who are unable to work will be through cash benefits, such as the disability living allowance and the employment and support allowance, replacing incapacity benefits.

[Tracey Crouch]

I thank the Minister for her reply. Royal British Legion Industries, based in my constituency, provides an important service to people with disabilities. Will the Minister assure the House that the Government will use the expertise of such organisations to help people with disabilities get back to work?

[Maria Miller]

I thank my hon. Friend for her question and also pay tribute to the Royal British Legion and its work, because it plays a vital role in supporting disabled people into work and helping those who are furthest from the workplace to acquire the skills that they need. The specialist knowledge of such organisations is absolutely vital and will be an important part of the Work programme that the employment Minister, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling) has already announced, because those organisations have the on-the-ground knowledge of how best to support disabled people.

[Mrs Anne McGuire (Stirling) (Lab)]

As a former Minister for disabled people, I wish the Minister well in standing up for the rights of disabled people throughout government. Will she therefore tell me what plans there are for the access to work programme? Will the Government honour the previous Government’s commitment, or will access to work disappear amid the one, single Work programme?

[Maria Miller]

I thank the right hon. Lady for her kind comments and congratulate her on the work that she has done to support disabled people. It is absolutely vital that we recognise that a reform of work programmes in this country is long overdue. The Work programme will meet a great many people’s needs, but not absolutely everybody’s, so specialist programmes such as residential training colleges, Remploy’s work and others will continue in order to meet the needs of particular disabled people.

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

In looking at the support for those with disability, will the Minister ensure that the work capability test is reviewed in order to see how it applies to cancer patients facing chemotherapy? At the moment, they seem to be assessed as fit for work when they are quite clearly going to be unfit and unable to work.

[Maria Miller]

I thank the hon. Gentleman for his question. That group will be exempt under the scheme, and it is important to note that the work capability assessment will be reviewed annually for the first five years of its operation.

[Ms Angela Eagle (Wallasey) (Lab)]

I should like to welcome all Ministers to their positions on the Government Front Bench. Does the Minister agree with me and her colleague the pensions Minister that it is important to ensure that those who cannot work for reasons of disability or age receive all the benefits to which they are entitled, and that the 13,000 home visits a week that the DWP local service currently makes to vulnerable households play a vital role in ensuring that that is the case? Does she agree also that, if the local service is cut in the spending review, the most vulnerable households will be the hardest hit?

[Maria Miller]

Looking after the most vulnerable groups in society is absolutely at the heart of the work that we do in the Department. I reassure the hon. Lady that when we are reviewing services, whether at a local or national level, we keep that very much in mind.

[Simon Kirby (Brighton, Kemptown) (Con)]

10. What his policy is on measures to encourage people into work in areas of long-term deprivation.

[The Minister of State, Department for Work and Pensions (Steve Webb)]

Many people in areas of long-term deprivation are also long-term benefit recipients. We will introduce the Work programme to give those benefit recipients access to tailored back-to-work support through an integrated system. Within that, we are actively considering how best to support those with complex barriers to work.

[Simon Kirby]

I thank the Minister for that answer. Does he agree that many of Labour’s top-down schemes, such as the new deal for communities in the areas of Moulsecoomb and Whitehawk in my constituency, have failed to deliver any real difference to people’s lives, despite having cost tens of millions of pounds? Does he also agree that this new Government’s empowerment of individuals and communities is a much more sensible way forward?

[Steve Webb]

Yes, the hon. Gentleman is right. We want to see an end to top-down, “Whitehall knows best” government. We want to see local communities and voluntary groups empowered and enabled to provide tailored solutions for individuals and local communities.

[Kerry McCarthy (Bristol East) (Lab)]

Labour in government had planned and funded 50,000 jobs for older people in areas of high unemployment and high deprivation under the future jobs fund. Will the Minister confirm how many of those jobs will be scrapped and what, if anything, will be put in their place?

[Steve Webb]

As the hon. Lady knows, jobs that are already contractually bound will go ahead. However, she falls foul of the old new Labour fallacy—that just because the Government temporarily fund a job, that makes it into a real, lasting job. I am afraid that life is not like that; the Government’s payment of a temporary subsidy does not make a permanent job. We will be investing in long-term, sustainable employment, which will benefit older people far more.

[Gordon Birtwistle (Burnley) (LD)]

My constituents in Burnley suffer more deprivation than most, with areas of high unemployment left to rot by the previous Government. Will the Minister ensure that the Department managing the apprenticeships scheme looks into areas such as Burnley to ensure that they are given a fair chance of providing apprentices for the future?

[Steve Webb]

My hon. Friend makes a powerful point. Part of the reason why he is here in this House, apart from his highly effective campaigning, is the record left by the Labour Government in Burnley and similar constituencies. The new apprenticeships will indeed go to areas such as my hon. Friend’s constituency, where they will provide training that leads to lasting jobs, which are what we want to be provided.

[Jon Trickett (Hemsworth) (Lab)]

11. What steps he plans to take to reduce levels of youth unemployment.

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

Youth unemployment is unacceptably high. We will introduce the new single Work programme in the first half of 2011, which will offer young people targeted, personalised help. That will be delivered through the best of private and voluntary sector providers. We will ensure that young people continue to have access to employment support prior to the implementation of the Work programme.

[Jon Trickett]

I thank the Minister for that reply. The Tories are the party of mass unemployment; they had left thousands of young people in long-term unemployment in the mining areas and elsewhere in this country when they were turfed out of office in ’97. Will the Minister confirm last week’s authoritative report that said that the fiscal strategy that the coalition is adopting will lead to there being another half a million people—many of them young people—in the dole queues for at least the rest of this Parliament?

[Chris Grayling]

The hon. Gentleman ought to remember that the level of youth unemployment today is higher than it was in 1997, when the Labour party took office. He should also remember that year after year, despite all the last Government’s promises about apprenticeships, which could have provided long-term, sustainable opportunities for young people, the Labour Government consistently missed their targets and promises for apprenticeships. We will take no lessons from Labour about youth unemployment.

[Richard Graham (Gloucester) (Con)]

When the Minister is looking at the issues involved in providing more jobs for the young unemployed, will he consider the impact of the Pension Protection Fund, particularly on long-standing manufacturing companies, which may be inhibited from providing new apprenticeships by their future commitments to the PPF?

[Chris Grayling]

My hon. Friend makes an important point. The Minister of State, my hon. Friend the Member for Thornbury and Yate (Steve Webb), will be considering that. It is important to provide the right balance between protecting the pensions of those whose pension provision for old age may be at risk and ensuring that we do not drive businesses out of business as a result. We will be looking at this carefully and attempting to find the right balance.

[Mr Frank Field (Birkenhead) (Lab)]

Does the Minister accept that the future jobs fund offered real opportunities for the young people who were drowning in the prospects of employers’ refusal to give them work while at the same time it provided the Government with their only genuine test of whether somebody really wanted to work? Why, therefore, is it being cut when no other Government programme will achieve both those objectives?

[Chris Grayling]

The right hon. Gentleman knows that what his constituents and other people on Merseyside really need is sustainable, long-term opportunities. The future jobs fund will continue to offer tens of thousands of opportunities over the next few months, but what the young people of Merseyside really need is apprenticeships that can take them into proper long-term opportunities. That is what this Government will provide.

[Jim Sheridan (Paisley and Renfrewshire North) (Lab)]

12. How much funding he expects to allocate to programmes for the young unemployed in 2010-11.

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

We have allocated more than £600 million for programmes to support unemployed young people back to work. That includes the cost of specific employment support programmes targeted at young people and the support provided through the flexible new deal.

[Jim Sheridan]

I thank the Minister for that response. According to a recent survey by the Federation of Small Businesses, 95% of businesses are unaware of the wage contributions that are on offer to train apprentices. Indeed, 69% of apprentices work in workplaces where there are 30 or fewer employees. The same research has revealed that even more apprenticeships could be created if the system were simplified or modified.

[Chris Grayling]

I am all in favour of systems being as simple as possible. One of the things that I aim to ensure will happen when we introduce the single Work programme is that providers build links with local employers and explain to employers the support and opportunities that exist. We need to ensure that we maximise the employment opportunities that are out there for people without work, whether young or older.

[Miss Anne Begg (Aberdeen South) (Lab)]

The Secretary of State made great play of the idea that the best way to get people into work and off benefits is to make work pay. What will the coalition Government do to achieve that—cut benefits or increase in-work support?

[Chris Grayling]

First, I congratulate the hon. Lady on her election to the position of Chair of the Work and Pensions Committee. My colleagues and I look forward to meeting her and her Committee in the weeks ahead.

The most important thing that we can do is to deliver first-class back-to-work support to help some of the people who have been stranded on benefits for long periods and often do not have a clear sense of what they need to do to get back into the workplace. That will be a key focus for us in trying to ensure that those people get back into work. In addition, my right hon. Friend the Secretary of State is examining the benefits system and how we remove some of the disincentives within it that sometimes make it financially disadvantageous for people to get back into work, which cannot be right.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

13. What representations he has received on his plans for the future jobs fund; and if he will make a statement.

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

I have so far received virtually no direct representations on our plans for the future jobs fund.

[Tom Blenkinsop]

I thank the Minister for his response. The future jobs fund affirms the right to work, and it has done that for young people in Middlesbrough South and East Cleveland. Does he share the view of previous Tory Governments that there is a natural level of unemployment?

[Chris Grayling]

Our job is to get as many young people, indeed people of all ages, as possible back into government—[Interruption.] I mean back into employment. Well, our manifesto did say that we wanted everyone to be part of the task of trying to make things work. We need to get every young person we possibly can back into the workplace, and we need to get as many people as possible off benefits and into the workplace. That will be the purpose of the single Work programme, our apprenticeships plans and of the reductions that we are going to make in taxation on small business employers; and it is the reason we are not going ahead with the Labour party’s job tax, which would have damaged employment in the hon. Gentleman’s area and other parts of the country. Those differences of approach are what the country really needs.

[Duncan Hames (Chippenham) (LD)]

Is the Minister aware that many employees in future jobs fund placements, especially part-time workers on the minimum wage, took home less each month than their placement cost the fund? In future, will he ask for fairer partnerships with employers that provide better value for money for the taxpayer?

[Chris Grayling]

I can confirm that we will look for better value for money for the taxpayer and the maximum possible effectiveness in getting people into work; not work that lasts just six months, but work that gets them into sustainable, long-term careers that can make a difference to them—not the sort of short-term scheme that characterised the previous Government’s last few months.

[Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)]

The Office for Budget Responsibility has found that unemployment would have fallen under Labour’s plans. The Chartered Institute of Personnel and Development survey in April also said that unemployment was close to its peak. However, the Minister will know that it has recently revised its forecast and, as a result of the change in policies by the new Conservative-Liberal Government, it predicts that public sector jobs will be cut by 750,000 and unemployment will increase to nearly 3 million. Does the Minister think that it is talking nonsense or does he agree that his proposals for cuts will hit jobs hard?

[Chris Grayling]

I am afraid that Labour Front Benchers remain in fantasy land about the current financial position. They left a huge debt overhang for the country that will do long-term, lasting damage to every single person in the country if it is not addressed. They themselves had prepared plans for big public spending cuts, but they are now pretending that they never planned those cuts. They should look at the books and in the mirror and ask themselves why the country is in the current financial mess. It is their fault.

[Chris Skidmore (Kingswood) (Con)]

14. What his policy is on the provision of support for people who are unable to work as a result of disability.

[Nicola Blackwood (Oxford West and Abingdon) (Con)]

15. What his policy is on the provision of support for people who are unable to work as a result of disability.

[The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)]

I refer my hon. Friends to the answer I gave my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) earlier.

[Chris Skidmore]

Many charities and voluntary organisations act as a mainstay for many people with long-term disabilities who are unable to work. Near my constituency, the superb Vassall centre and the excellent disability action group come to mind. What measures will my hon. Friend take to empower those organisations to have a greater say and play a greater role in supporting those with disabilities?

[Maria Miller]

I thank my hon. Friend for his question. He is right that the Vassall centre plays a pivotal role in Gloucestershire in bringing together many different organisations, which provide support for some of the disabled people most in need of it. As I said previously, the Work programme will offer such organisations the opportunity to bring local expertise and knowledge to supporting disabled people into employment or in other ways. I also hope that, through other specialist programmes, we can continue to harness that expertise.

[Nicola Blackwood]

As the Under-Secretary knows, many people with disabilities depend heavily on carers. During a visit in carers week to the Oxfordshire carers forum, it became abundantly obvious that, despite the drunken spending spree to which the Secretary of State referred, carers remain chronically under-supported. Will the Under-Secretary please comment on the Government’s plans to improve support for carers and to reduce the bureaucracy, which too often prevents them from accessing the help that is available?

[Maria Miller]

I am also delighted to support in carers week the work that carers do. I am particularly looking forward to visiting Barnet carers centre on Thursday as part of that. Obviously, carers receive benefits through carer’s allowance, and important support through Jobcentre Plus in partnership management. However, I reassure my hon. Friend that the Government are committed to widening the support available to family carers, and will establish an independent commission on funding long-term care this year.

[Kevin Brennan (Cardiff West) (Lab)]

Conservative Members are right to highlight the work of voluntary groups in supporting disabled people. Is the Under-Secretary also aware of organisations such as Pedal Power in my constituency, a voluntary group that works with disabled people, which recently relied heavily on the future jobs fund for support for its work? What estimate has she made of the impact of the decision to cut the future jobs fund on the very organisations that she thinks can help build a big society?

[Maria Miller]

If the hon. Gentleman had listened to some of the earlier exchanges, he would have known that we feel strongly that we need to have proper, long-term jobs in place. We will achieve that better through our apprenticeship announcements than through the future jobs fund. However, it is important that organisations such as Pedal Power—which, I am sure, supports disabled people in the hon. Gentleman’s constituency—get the support that they need. I am happy to talk to him about that if he has concerns.

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

On the subject of carers week, will the Under-Secretary assure us that carer’s premium will be protected for those who are unable to find work or need support to stay in work as a result of looking after severely disabled relatives?

[Maria Miller]

Carers have a critical role to play in keeping people out of the formal state-run care system, and we will ensure that they get the support that they need in our coming reviews.

[Annette Brooke (Mid Dorset and North Poole) (LD)]

16. What steps he plans to take to reduce the level of pensioner poverty.

[The Minister of State, Department for Work and Pensions (Steve Webb)]

The Government want to see all pensioners have a decent and secure income in retirement. We will restore the earnings link for the basic state pension from April 2011, with a triple guarantee that pensions are raised by the highest of earnings, prices or 2.5%. We will also protect key benefits for older people.

[Annette Brooke]

I thank my hon. Friend for his answer. What action, if any, is he able to take on a problem he himself identified, namely, the cliff-edge situation of women who have completed 30 years employment and who have made the necessary national insurance contributions, but who were born one or two days too early to get the pension that they deserve?

[Steve Webb]

My hon. Friend raises an important point—in fact, it sounds vaguely familiar—and she is quite right that introducing changes in a cliff-edge manner, as the previous Government did, creates unfairnesses of the sort that she identifies. As she will know, when women are short of the necessary number of years, they can buy voluntary contributions, under a fairly restricted set of circumstances. That will allow some women to get closer to the full pension than they would otherwise have been able to get. However, she is absolutely right that the way in which the scheme was implemented by the previous Government creates an unfair cliff edge.

[Mr Kevan Jones (North Durham) (Lab)]

Many elderly people rely on services from local councils. Can the hon. Gentleman tell the House how the cuts imposed on Durham county council last week will affect, and reduce poverty for, pensioners in the county of Durham?

[Steve Webb]

The hon. Gentleman is quite right to point out that when public finances are tight, all sectors of society risk having services threatened in the way that he describes. One of the incoming Government’s concerns was the huge hole in the public finances, which a Labour Government would also have had to fill. It would be interesting to know which cuts he thinks should be made, because there has been a silence from the Labour party on that very subject.

[Mr Edward Timpson (Crewe and Nantwich) (Con)]

T1. If he will make a statement on his departmental responsibilities.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

Today in Britain, nearly one in five pensioners is living in poverty, and as I said earlier, more than 5 million people are on working-age benefits, and the country has one of the highest proportions of workless households in the European Union. Therefore, the case for radical welfare reform is clear. That is why this Government will establish a new Work programme and simplify our complex benefits system to provide greater support for the poorest.

At the same time, we are rising to the challenge of long-term demographic change in how we support an ageing society. It is more important than ever that we build strong foundations for the future of the basic state pension, which is why, for the first time, as the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb) just said, this Government will introduce the triple guarantee for the basic state pension with immediate effect. That guarantee will restore the earnings link and ensure that any future uprating is set at the highest of earnings, prices or 2.5%. I am enormously proud that this coalition Government are doing that. Those are important first steps towards the reform of the whole system.

[Mr Timpson]

Last week, one of my constituents in Crewe told me how exasperated she had become after wading through the application form for her pension credit, because of the complexities within it and the never-ending series of phone calls that seemed to follow. With one in three pensioners who are entitled to claim pension credit still not doing so, in part owing to the major administrative barriers in their way, what does the Secretary of State propose to do to simplify the system, and to make it fairer and more transparent?

[Mr Duncan Smith]

First, I say to my hon. Friend that one of the most important steps that we will be taking towards helping those pensioners is re-linking the basic state pension to earnings. That will hugely improve take-up, because that money will go to everybody and people will not be required to claim for it. The other thing that my hon. Friend the Minister will be doing is reviewing the complexity and looking for ways in which we can simplify the process and make it easier, so that the take-up for those who need it—this point is critical—is better. I can assure my hon. Friend that we will do that.

[John Robertson (Glasgow North West) (Lab)]

T2. Did the right hon. Gentleman have many constituents, including people from young families who do not have a lot of money and who need the extra money to get by, coming up to him during his general election campaign to tell him that they were worried about working tax credits? What will he do to ensure that the working tax credit is maintained and that the ravages of the cuts are taken care of for the people who need that cover more than anybody else.

[Mr Duncan Smith]

The purpose of this Administration is not to penalise those in most need. We will do our level best to ensure that during these changes—and given the necessity of reducing the budget—we try to protect as many of those people as possible. Ultimately the best thing that we can do for them across the board is to simplify the benefit system so that the take-up is greater and ensure that going to work pays, with people retaining more of what they earn when they go to work than they do at the moment.

[Mr Rob Wilson (Reading East) (Con)]

T3. What action can the Government take to bring the ballooning public sector pension debt under control?

[The Minister of State, Department for Work and Pensions (Steve Webb)]

Our colleagues in the Treasury are establishing a commission to look at public sector pensions, and we have already had a meeting with our colleagues to try to ensure a fair deal both for the hard-working people who work in the public sector and for the taxpayers who are making a very large contribution to those pensions. It is important that the true cost is made transparent, which it clearly is not at present.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

T5. At a time when unemployment is forecast to increase to 3 million, this so-called coalition Government have decided to cut 100,000 jobs from the future jobs fund, but will not replace them until next summer. Is that just another example of unemployment being a price worth paying for this Government?

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

I am afraid that the hon. Gentleman has not been listening. There will be tens of thousands of new jobs created under the future jobs fund in the months ahead. However, we have changed the priorities, because we believe that long-term, sustainable employment is better supported by a programme of extra apprenticeships than by a short-term job creation measure of the kind envisaged by the previous Government.

[Richard Harrington (Watford) (Con)]

T4. Given the shocking number of young unemployed people in my constituency and in the country as a whole, I welcome the proposals for mentoring schemes, whereby young people spend time with the self-employed and other business people. Will those schemes be introduced quickly and efficiently, because they will be very important?

[Chris Grayling]

I agree with my hon. Friend. The use of mentoring, both to encourage young people into the workplace and to create a sense of belief in their ability to build their own businesses, will be central parts of the Work programme. We are working on the details as rapidly as we can, and I can give him an assurance that mentoring will be a central part of the way in which the Work programme works.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

T9. The cuts to the future jobs fund are causing real concern in my constituency. From listening to Ministers this afternoon, I understand that the expectation is that these job losses will be replaced by a growing private sector. Can the Minister share with me the detailed analysis that the Government have undertaken that shows that these jobs will be created, when they will be created and that they will be created in the north-east?

[Mr Duncan Smith]

The cuts to the future jobs fund are not cuts. We have stuck to the contracted jobs already in existence, which will run until next year. We are talking about the notional jobs that might have been created but were not contracted for, so we are dealing with a game of vague figures. The best thing that we can do for the hon. Lady’s constituents is to ensure that the cost of employing people does not rise, which was the plan of the previous Government in raising national insurance. Most of all, the 50,000 apprenticeships that we will create will provide long-term jobs for all her constituents.

[David Tredinnick (Bosworth) (Con)]

T6. Will my hon. Friend be reviewing the rule on annuities? Many people with occupational pensions resent the fact that they have to invest 75% of their accumulated funds in that way and would prefer to put some in other places.

[Steve Webb]

The coalition Government are sympathetic to the idea of giving people greater choice over annuities. We already have a commitment to scrapping the rule that forces people to annuitise at 75. We also want to look at how people can achieve better value for money from the annuities that they buy, and possibly also have earlier access to accrued pension funds. We take the view that it is their money, not the Government’s money.

[Mr Jim Cunningham (Coventry South) (Lab)]

T10. Has the Minister had any discussions with the Treasury regarding the pay-out for Equitable Life, bearing in mind that when they were in opposition, that crowd over there on the Government Benches hounded us week in and week out about a pay-out? Now can they deliver?

[Steve Webb]

The hon. Gentleman will know that Sir John Chadwick will produce his report in July. I understand from discussions with the Treasury that a compensation package will be produced on the basis of that, and legislation to bring that forward was included in the Queen’s Speech.

[Andrew George (St Ives) (LD)]

T8. As Ministers are no doubt aware, the withdrawal rate of housing benefit and council tax benefit combined can be up to 85p in every pound earned, thereby contributing significantly to the poverty trap. Do the Government have any plans to review the withdrawal rate and the tapers?

[Steve Webb]

My hon. Friend puts his finger on a crucial point. We both believe that work needs to pay, but one of the crucial problems at the moment is that as people improve themselves, work harder, train and do overtime, too much of that money is clawed back through the benefit tapers and tax rates that he has described. My right hon. and hon. Friends will be bringing forward quite radical proposals for benefit reform that are designed to tackle precisely the point that he has raised.

[Natascha Engel (North East Derbyshire) (Lab)]

I know that this will surprise everyone, but I want to return to the future jobs fund and the answer that the Minister of State, the right hon. Member for Epsom and Ewell (Chris Grayling) gave earlier about not having received any representations on it. Has he at least made the effort to consult, for example, some of the voluntary and charitable sector organisations that represent young people and support them into work on the effect that cutting the future jobs fund will have on their work? If so, what have they said to him?

[Chris Grayling]

Yes, we have indeed spoken to those organisations, which will continue to create thousands of new jobs under the future jobs fund during the remainder of this year. However, there is general agreement, particularly among those who have been working with us on the Work programme, that we need apprenticeships, lower employment costs and sustainable long-term jobs in the private sector, not in the public sector—too many of the future jobs fund jobs are in the public sector. We need to create sustainable, long-term employment opportunities for young people and older people on benefits in this country.

[Robert Halfon (Harlow) (Con)]

Is the Minister aware of early-day motion 159, which is about jobcentres and foodbanks? Is he also aware that charities in my constituency, such as the excellent Harlow foodbank, have been stopped by Jobcentre Plus from giving out food vouchers to the unemployed because of regulations introduced by the previous Government? Does he agree that that is an example of Labour bureaucracy hurting the poor most, and will he take steps to reverse this policy as soon as possible?

[The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)]

I thank my hon. Friend for raising that issue. Foodbanks have an important role to play in our local communities. It is important that we ensure that people who might benefit from the services that they offer know that they are available, and we will certainly be reviewing whether it is possible to highlight the availability of local foodbanks through Jobcentre Plus.

[Several hon. Members]

rose—

[Mr Speaker]

Order. Brief questions and brief answers are now of the essence.

[Liz Kendall (Leicester West) (Lab)]

Will the Minister say what help to get off benefits and into work will be available for young people between the future jobs fund ending, which he said would happen in a couple of months, and the Government’s new single Work programme, which he said would not be available until March 2011?

[Chris Grayling]

We will be maintaining all the existing programmes, and in particular the flexible new deal, right up until the start of the Work programme next year. The flexible new deal is by far the largest programme that the previous Government put in place to support young people and older people into employment. It is important to ensure that we maintain continuity of support right up to the point when the Work programme is ready to be launched.

[Sajid Javid (Bromsgrove) (Con)]

The Minister will know that spending on welfare doubled under the previous Administration, yet the number of those living in poverty increased. Does he agree that what the previous Administration succeeded in doing was to create the most expensive poverty in history?

[Maria Miller]

My hon. Friend is absolutely right. Record levels of spending on benefits have left us with 100,000 extra children living in poverty since 2004, and the gap between the richest and the poorest has grown wider than at any time since the 1960s. What we need to do is tackle the root causes of poverty to break that cycle of disadvantage, and not do what the previous Government did.

[Mr Frank Roy (Motherwell and Wishaw) (Lab)]

What income guarantee will the Secretary of State give to the worried father who wrote to me last week who gave up his job to look after his disabled son and is now a carer?

[Mr Duncan Smith]

I would be happy to speak to the hon. Gentleman’s constituent with him, but I also guarantee to the hon. Gentleman that the role of carers in society will be one that we continue to support and value. The reality is that if we did not have that informal care in society, the state could never pick up the bill. We look to enhance and support that role, ensuring that carers are valued throughout what we do, and I should be happy to see the hon. Gentleman’s constituent, if he wishes.

[John Woodcock (Barrow and Furness) (Lab/Co-op)]

The Secretary of State knows as well as anyone that what he calls notional jobs are nevertheless factored into the Government’s spending projections. Can he tell the House how long it will be before the proposed savings in the future jobs fund will be wiped out by the increased cost of keeping more young people on the dole?

[Mr Duncan Smith]

With respect to the hon. Gentleman, he is playing a game of notional figures—[Interruption.] I know what it is like in opposition, and I must tell Labour Members that they must start to get real about the fact that they were in government three months ago and it was they who went on the spending spree. They would also have had to find savings. We need to use the savings that we have found for this year, and ensure that we do not have the job tax. There will also be a much better chance for longer-term jobs through the apprenticeship scheme, involving some 50,000 people. That is real decision making.

[Clive Efford (Eltham) (Lab)]

Will the Secretary of State give a guarantee that every job that is found through any Government-backed scheme to move someone from benefits into work will be paid at or above the national minimum wage?

[Chris Grayling]

Self-evidently, if the providers who work for us under the Work programme are successful in getting someone into work, we will reward them on the basis that they provide post-employment mentoring and stay with the person to ensure that they stay in work—

[Clive Efford]

Yes or no?

[Chris Grayling]

Of course, by law, they will have to pay the national minimum wage. That is the requirement for any employer in this country; it is not going to change.

[Mr Gerry Sutcliffe (Bradford South) (Lab)]

One of the successes of the future jobs fund has been in the area of sports. I heard the Minister say earlier that he would stop future contracts, but full-time jobs in sport have been found at the end of the period, and I hope that he will look again at that decision.

[Chris Grayling]

Absolutely; I also expect sport to take advantage of some of the apprenticeship opportunities. There will be tens of thousands of further opportunities under the future jobs fund, as well as additional apprenticeships and further opportunities provided through the Work programme. We intend to do everything we can to ensure that, when this Government leave office, youth unemployment is lower than it is today—unlike the record of the Labour party in its 13 years in government.

Afghanistan

Monday 14th June 2010 Commons Chamber

15:31

[The Prime Minister (Mr David Cameron)]

With permission, Mr Speaker, I would like to make a statement on Afghanistan. First, I am sure that the whole House will want to join with me in paying tribute to Private Jonathan Monk from 2nd Battalion the Princess of Wales’s Royal Regiment and Lance Corporal Andrew Breeze from 1st Battalion the Mercian Regiment, who have both died in Afghanistan. Our thoughts and prayers are with their families and friends. Their service and sacrifice for our country must never be forgotten.

It was my fifth visit to Afghanistan, but my first as Prime Minister. I held talks with President Karzai and visited our troops in Helmand. I want to set out for the House how this Government will approach our mission in Afghanistan, and how that mission is progressing, but first let me stress the importance of such updates. The whole nation is touched by the heroism of this generation of our armed forces, who are fighting to protect us in harsh conditions far from home, and I believe that the country, and this House, are entitled to the facts. That is why this statement will be the start of a pattern. There will be regular updates to the House, with quarterly statements by the Foreign Secretary or the Defence Secretary, and we will publish on a monthly basis much more information on the progress we are making. This will include updates on the security situation, on recruiting, training and retaining the Afghan security forces, on progress in appointing and supporting provincial and district governors, and on progress in development work, including health and education.

Our main focus, however, will be on the security situation. For example, in the six months to March 2010, the Afghan national army grew by almost 20 %, with more than 17,000 people joining the ranks, but the Afghan police are assessed to be ineffective or barely able to operate in six of the 13 key provinces in General McChrystal’s plan. Good news or bad, we want to take the country with us in what is this Government’s top foreign policy priority.

Let me address the first question that people are asking. Why are we in Afghanistan? I can answer in two words: national security. Our forces are in Afghanistan to prevent Afghan territory from again being used by al-Qaeda as a base from which to plan attacks on the UK or on our allies. Of course, the al-Qaeda training camps and the Taliban regime that protected them were removed from Afghanistan in the months after 9/11, and the presence of NATO forces prevents them from returning, but Afghanistan is not yet strong enough to look after its own security. That is why we are there, and with the help of the greater efforts of the Pakistanis to hunt down al-Qaeda in their own country, we are now placing al-Qaeda under pressure on both sides of the border. Eighteen months ago, the then Prime Minister told this House that some three quarters of the most serious terrorist plots against Britain had links to the border area. Today I am advised that the threat from al-Qaeda from Afghanistan and Pakistan has reduced, but I am also advised that if it were not for the current presence of UK and international coalition forces, al-Qaeda would return to Afghanistan and the threat to the UK would rise.

The next question is how long must we stay. The Afghan people do not want foreign forces on their soil any longer than necessary, and the British people are rightly impatient for progress. Our forces will not remain in Afghanistan a day longer than is necessary, and I want to bring them home the moment it is safe to do so. The key to success is training and equipping the Afghan security forces at every level to take on the task of securing their country, so that Afghans can chart their own way in the world without their country posing a threat to others, and our forces can come home, the job done, their heads held high.

That is why we back the strategy developed by General McChrystal, commander of the international security assistance force, and endorsed by President Obama and NATO. That strategy involves protecting the civilian population from the insurgents, supporting more effective government at every level, and building up the Afghan national security forces as rapidly as is feasible. We want to transfer security responsibility for districts and provinces to Afghan control as soon as they are ready, but that must be done on the basis of the facts on the ground, not a pre-announced timetable.

The current year is the vital year. We are six months into an 18-month military surge, and we must now redouble our efforts to drive progress. Central Helmand has, along with Kandahar, been the heartland of the Taliban. It is from there that they gave safe haven to the al-Qaeda network in Afghanistan. That is why the operation in central Helmand is crucial to the success of the whole mission. Four years ago, we went into Helmand with 3,000 troops. I do not think anyone now seriously argues that that was sufficient. Today, there are around 30,000 troops there, with 8,000 British working alongside 20,000 US Marines. In total, we have more than 10,000 troops in the country as a whole. With the arrival of reinforcements and the continued growth of the Afghan security forces, we are now evening out the ISAF presence in the main populated areas in Helmand.

That is an absolutely crucial point. In the past, we have simply not had enough soldiers per head of population for an effective counter-insurgency campaign. Today, although the rebalancing is still work in progress, the situation is much improved. The arrival of a US Marine expeditionary force, combined with additional contributions from other ISAF partners including the UK, has given a huge boost to the resources available to ISAF in Helmand. For example, the Marines have arrived with some 80 aircraft and helicopters of their own, which are now available to support all ISAF forces in Helmand.

It is clear that we have made real progress in central Helmand this year. A degree of normal life has returned to places such as Nad Ali, where the bazaar is open again and people are going about their daily business in an area that was until recently completely infested with insurgents, but the progress is not yet irreversible. Inevitably, there will be tough fighting as Afghan forces, with ISAF support, hold the ground we have taken and push the insurgents out of further towns and villages.

During my visit, I was able to announce a further £67 million to double the number of counter-improvised explosive device teams, to tackle the most serious threat facing our young men and women. So with the improvements made in the past year, many of the acute shortages that hampered us so severely in our initial deployment in Helmand have been dealt with, but I do not pretend that every equipment shortage has been resolved. We will need to adapt constantly and deal with problems as they arise.

The whole country is incredibly proud of our armed forces, and I believe we need to do more to recognise these remarkable men and women and place them at the front and centre of our society. That is why I announced a doubling of the operational allowance for service in Afghanistan, backdated to 6 May; and that is why I believe it is right that we renew and reaffirm our commitment to the military covenant, that crucial contract between our country and those who risk their lives to ensure our security.

I do not pretend that we can succeed, either in Helmand or in Afghanistan, by military means alone. Insurgencies usually end with political settlements, not military victories, and that is why I have always said that we need a political surge to accompany the military one. We need better to align our development spending with our overall strategy, and I have announced £200 million to be spent on training, strengthening the police services and government institutions; and, crucially, we need a political process to help bring the insurgency to an end.

As a first step, that means getting individual Taliban fighters to put down their weapons, renounce violence and reintegrate into Afghan society, and the successful peace jirga earlier this month should enable that process to move ahead more swiftly. However, it means more than that. For there to be long-term political stability, everyone in Afghanistan, including those in the south, must feel that the Government is theirs, that it is their country, and that they have a role to play. As I agreed with President Karzai, we must start working towards a wider reconciliation process, leading to a political settlement that works for all the peoples of Afghanistan.

We are seeing a good example of that in Kandahar where, importantly, the process getting under way is largely Afghan-led. Alongside military operations by Afghan security forces together with international forces, it includes, for example, the shura of several hundred local elders conducted yesterday by the local governor, which President Karzai attended, and a major drive by the Afghan Government, with our support, to improve public services and the rule of law. From now on, what is happening around Kandahar and in Helmand should reflect a deeper understanding of the influence of tribal structures in Afghanistan. In the past, we simply have not paid enough attention to that and to the unintended consequences of some of our policies. I want us, for example, to take a careful look at the contracting policy of ISAF, to ensure that the money going into the local economy from the huge contracts that are let has a positive impact and does not help fund local militias or, even worse, the insurgents.

This is the vital year. We have the forces needed on the ground and we have our very best people, not just those in the military, but those leading on the diplomatic and development front. I do not pretend that it will be easy and I must warn the House that we must be ready for further casualties over the summer months, as the so called “fighting season” resumes and as ISAF extends its activity. But I say to the House what I said to our young servicemen and women in the dust and heat of Helmand on Friday: they are fighting thousands of miles away to protect our national security here at home. Like their predecessors, they have the support and gratitude of the whole nation. When we have succeeded in enabling the Afghans to take control of their own security, our troops can begin to come home. Even after our troops have left Afghanistan, the relationship between Britain and Afghanistan must continue as a strong and close one. Likewise, we want to continue to build on our relationship with Pakistan. These long-term relationships are, quite simply, essential for our national security. I commend this statement to the House.

[Ms Harriet Harman (Camberwell and Peckham) (Lab)]

I join the Prime Minister in paying tribute to the two soldiers who have been killed, Private Jonathan Monk from 2nd Battalion The Princess of Wales’s Royal Regiment and Lance Corporal Andrew Breeze from 1st Battalion the Mercian Regiment. Our thoughts are with their families and on the grief of their loss.

I thank the Prime Minister for his statement. I welcome both his early visit to Afghanistan since coming into government and the increase in the operational allowance that he announced. All those serving in Afghanistan should know that they have the admiration and respect of the whole country and of Members from all parts of the House. Will he continue with Armed Forces day on 26 June?

May I restate Labour’s support for our mission in Afghanistan, which is, as the Prime Minister rightly said, first and foremost to protect our national security. As this was his first statement to the House on Afghanistan and the first occasion on which we have responded as the official Opposition, may I assure him that as he proceeds to take difficult decisions in the best interests of our mission in Afghanistan and of our troops, he will have our full support. In that spirit, I welcome the £67 million that he has announced to help tackle the IED threat. Will he inform the House in more detail as to what that will be spent on? We understand that there will be 13 extra Mastiff vehicles, and we welcome that. Will they be in addition to the £67 million? As there is also a need for well protected vehicles with greater manoeuvrability, will the Prime Minister confirm that the Government will proceed with a second batch of 200 light protected patrol vehicles?

On the strategy in Afghanistan, the Prime Minister has reaffirmed that, despite the challenges, progress has been made. Will he confirm that the Government are continuing the strategy that the UK has been pursuing and that it has not changed? If it has changed, will he tell us in what respects? It is common ground that our work in Afghanistan needs to bring together security, development and diplomatic efforts. Will the Prime Minister update the House on the discussions he has had with President Karzai? I assure him that the Government will have our support to take through a strategy that sees that the Afghans are strong enough to take responsibility for their own security and prosperity. I welcome the £200 million that he announced for building up the Afghan army, police and civil service. Will he reassure the House that that will not be at the expense of vital existing development programmes elsewhere in the world?

Will the Prime Minister update the House on discussions that he has had with US Defence Secretary Gates and on whether they have addressed the proposed withdrawal of Canadian forces in 2011? A stable Afghanistan requires a stable Pakistan. Will the Prime Minister update the House on the discussions he has had with President Zardari and Prime Minister Gilani of Pakistan?

On the families of our troops, will the Prime Minister follow through on the important work that the former Defence Secretary was doing, with my support, to back up the wives, partners and families of our armed forces?

On the strategic defence review, will the Prime Minister reassure the House that the front line will not be weakened? In opposition, the Prime Minister and his Defence Secretary argued for a bigger Army and for the expansion of the Army by three battalions. Will that go ahead?

Finally, will the Prime Minister explain to the House the reasons for the departure of Sir Jock Stirrup and Sir Bill Jeffrey? Will he confirm that they will both play a role in the strategic defence review and that they will remain until it is completed? May I ask him to join me in paying tribute to Sir Jock Stirrup and Sir Bill Jeffrey for their service to the nation?

[The Prime Minister]

I thank the right hon. and learned Lady for her response—both for what she said and the way in which she said it. I know that we will have our differences across these Dispatch Boxes, but on the issue of Afghanistan there is great unity on the Labour and coalition Benches—[Interruption.] Well done; well spotted. That is important, because our troops like to know that everyone in the House is behind what they are doing.

On the specific questions that she asked, Armed Forces day will go ahead as planned on 26 June. She asked about the £67 million spent on countering the IED threat and whether it is in addition to the patrol vehicles that are already on order. Yes; I can confirm that it is. She asked about the strategy generally and what has changed. What I would say—I note what the Foreign Secretary said in his speech on the Queen’s Speech—is that we are six months into the McChrystal-Obama strategy of the military and political surge and we want to see that strategy through, so there is continuity in that regard. We must be absolutely clear in our focus on the national security perspective of what we are doing. That is not to say that development work and the building of schools, hospitals and other things are not important—it is just to get our priorities straight. In the end, our route home and our route to a successful Afghanistan is to put security first. That needs to be very clear. On the question about development aid, the £200 million is additional to the existing work we are doing in Afghanistan.

I very much agree with what the right hon. and learned Lady said about backing the wives, partners and families of all those who serve in our armed forces. In recent years, we have put enormous pressure on those families and we need to do more to help them. I have RAF Brize Norton in my constituency and I know the very severe pressures that we put on people. In all the issues around military families—whether it is about the schools their children go to, the health centres they use or time for leave—we want to do more to help, and we are going to give real focus to that.

The right hon. and learned Lady asked about the strategic defence review and whether it would cover the size of the Army. Of course, it will cover all of the issues in defence. Finally, she quite rightly paid tribute to Sir Jock Stirrup and Bill Jeffrey, and I join her in paying tribute to them. They both have been, and are, extremely strong and dedicated public servants, and everyone in this country owes them that thank you. Sir Jock Stirrup, as the right hon. and learned Lady knows, actually extended his time as Chief of the Defence Staff before the election because he wanted to see continuity—he wanted to see that service continue—and I was very pleased that that happened. For some time he has had in mind standing down in the autumn, at the end of the strategic defence review—at the end of October—and that is indeed what he is going to do, and what Bill Jeffrey is going to do. That will give the new Government time to put in place a proper transition for a new Chief of the Defence Staff to take on the vital work that Sir Jock has done. Let me say again that he has done a superb job as Chief of the Defence Staff. I am working with him extremely well. He came with me on the trip to Afghanistan, and he deserves the gratitude of the House of Commons.

[Mr James Arbuthnot (North East Hampshire) (Con)]

Does my right hon. Friend agree that there is a risk of conflicting messages? We are saying on the one hand to the Taliban that we will not cut and run and that we will stay for as long as is needed to do the job, but on the other we are saying to the Afghan Government that there is urgency for them to sort out their corruption and their governance. Does my right hon. Friend give priority to leaving as soon as possible or staying for as long as is necessary?

[The Prime Minister]

First, I congratulate my right hon. Friend on his successful election as Chairman of the Select Committee on Defence. I look forward to reading his reports over the course of this Parliament.

I do not think that there is a contradiction, because I think people in Afghanistan want to know that foreign troops will not be on their soil for an extended period, and it is right not to set an artificial deadline about when troops will leave but to do all the work we can to build up the Afghan security forces to give us the chance to leave, and to put pressure—yes, it is pressure sometimes—on the Afghan Government to do all they can to cut out corruption and put in place good governance. It is important that we get on with this work but, as I said, not to set artificial timetables that we then cannot meet.

[Several hon. Members]

rose—

[Mr Speaker]

Order. Several hon. and right hon. Members are seeking to catch my eye. Colleagues will be conscious that there are a further two statements to follow, and two debates, so single, short supplementary questions and—I know—economical replies are the order of the day.

[Mike Gapes (Ilford South) (Lab/Co-op)]

The Prime Minister referred very briefly to Pakistan and he did not take the opportunity to respond to the questions about Pakistan asked by my right hon. and learned Friend the Leader of the Opposition. Can he give us his assessment of Pakistan’s role, for good or ill, across the Durand line, in a political solution and regional stability involving Afghanistan?

[The Prime Minister]

The hon. Gentleman is absolutely right. The role of Pakistan in this is vital. What is encouraging is that in all the conversations I have had with President Karzai across the past five years I have never heard him as positive about his relationship with Pakistan as now. Clearly, a stable Pakistan and a stable Afghanistan are two sides of the same coin. The encouraging thing right now is that the Pakistan Government and the Pakistan military are pursuing al-Qaeda in South Waziristan and other parts of the tribal areas, and that is making a difference. But of course we have to convince both the Pakistan Government and the Afghanistan Government that we are there for the long term—not the long term with troops, but the long term with support, aid, diplomacy and development—so that they do not think that we will leave them in the lurch once again.

[Sir Malcolm Rifkind (Kensington) (Con)]

May I commend the Prime Minister for confirming that our only justification for being in Afghanistan is not corruption or the poppy trade but national security? On that basis, will he also confirm that the decision when we start to withdraw our troops should be based not simply on the Afghan army having increased in size or training, but when we are satisfied that it has reached the level of training and ability to ensure that al-Qaeda cannot return?

[The Prime Minister]

My right hon. and learned Friend is right. It should be a focus on national security and when we can safely leave the job of securing Afghanistan to Afghan forces. That is not about numbers; it is about capability and he is right to measure it in that way.

[Mr Denis MacShane (Rotherham) (Lab)]

On 26 May, during the Queen’s Speech debate, I said:

“It is time to assert the principle that war is too important a matter to be left to generals. We need to assert the authority of this House and the authority of a politically elected Government over the lack of strategy in Afghanistan.”—[Official Report, 26 May 2010; Vol. 510, c. 246.]

Therefore, I welcome the Prime Minister’s keen interest. We have had too much of this war dictated by the red tops, with their jingoism, and the red tabs, with the generals’ priorities before those of the nation. I wish the Prime Minister well in what is clearly a change of strategy, with a politically elected Government in charge.

[The Prime Minister]

I thank the right hon. Gentleman. I was once told that the first sign of madness is to read out one’s own speeches, but I agree very much with a lot of what he said. It is important that the military feel that they can give unvarnished, clear advice to Ministers, but it is also important that Ministers test, probe and challenge that advice. That is how policy should be developed, and that is how it should be done in future.

[Richard Ottaway (Croydon South) (Con)]

Given that one of the problems in Afghanistan in the past has been mission creep, may I thank the Prime Minister for the clarity of his statement? He pointed out that we are still in the United States military surge phase. Can he assure me that, although the US military are already beginning to talk about a future draw-down, we will keep in constant touch with them to ensure that we operate on the same timeline? Will he keep in touch with not only the US but our NATO allies on this point?

[The Prime Minister]

I congratulate my hon. Friend on his election as Chairman of the Foreign Affairs Committee, and I look forward to the work that it will do.

My hon. Friend is absolutely right: making sure that we work together with the Americans and our NATO allies is absolutely vital to success. One of the things that strikes me when I go to see what our troops are doing in Helmand is just how close that work is. Sometimes people wonder whether it is right that British troops in Sangin are under American command, and it is right to point out that all the American troops in Kandahar are under British command. Our forces work incredibly closely together, including in the hospitals, and it is a great sight to see.

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

Could the Prime Minister update the House on the progress made on opium and poppy production and say whether there is now a prison in Afghanistan that is secure enough to hold any of the opium traders should they be arrested?

[The Prime Minister]

I am grateful for that question. There has been progress, as the hon. Lady will know. The province with the worst record of opium production has tended to be Helmand, but production is significantly down this year. There is a question mark about how much of that is due to poppy blight, how much of it is due to the excellent wheat-seed substitution programme that the British Government have been supporting and how much of it is due to security efforts. It is important as part of the picture that, as we see a more secure Afghanistan, we see more farmers pursuing alternative livelihoods. But again, we need to get the order of priorities the right way around.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

May I welcome both the Prime Minister’s statement and his visit, join him in paying tribute to the soldiers who have lost their lives and to all those who serve, and assure him that his—our—Liberal Democrat colleagues stand four square behind him in the policy that he has announced? May I ask him a question about the implications for policy at home? Will he now review the work of our domestic Departments to ensure that returning troops have full support for their mental, emotional and physical needs, including their housing, after they have served in theatre in Afghanistan?

[The Prime Minister]

I am grateful for that question. We have said that we will examine every part of the military covenant and ensure that we fulfil it in all the ways that we should. Housing is clearly a key part of that, and the previous Government, to be fair, were putting money into forces housing, which we need to go on improving. Mental health is the area that needs the most attention. If we think of the combat stress that has been placed on those young men, now year after year, we should really recognise that this is something that needs to go through the rest of their lives, and we need to learn from countries, such as America, where much more is done to follow up mental health issues. My hon. Friend the Member for South West Wiltshire (Dr Murrison) is particularly looking at this area, working between the Ministry of Defence and the Department of Health.

[Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)]

Further to that question, may I ask the right hon. Gentleman whether he will meet a small delegation, together with me, sometime in the future to discuss this very issue? I serve on a panel of inquiry appointed by the Howard League for Penal Reform to consider this issue and why so many returnees end up in the criminal justice system. Will he spare some time to meet us sometime in the future?

[The Prime Minister]

I thank the hon. Gentleman for his question, and either I or the Defence Secretary would be happy to meet him and other colleagues. He makes a very good point: because the whole problem of mental health issues has not had enough attention, we are seeing former soldiers fall through the net and, as he says, too often end up either homeless on the streets or, on occasion, in the criminal justice system.

[Sir John Stanley (Tonbridge and Malling) (Con)]

Does my right hon. Friend agree that, if we are to achieve lasting security success in Afghanistan, it is imperative that we exert the maximum possible pressure on al-Qaeda and the Taliban on both sides of the border? Is it the Government’s policy to continue the programme of bilateral counter-terrorism co-operation between the British Government and the Pakistan Government initiated by the previous Government here?

[The Prime Minister]

Yes, it absolutely is our policy to continue that work. The vital role that will be played by Pakistan will encourage it to go on driving al-Qaeda out of the badlands of the tribally administered areas. That is taking place, partly because there is good security and military co-operation, and there is a sense among the Pakistan Government and military that both the British and the Americans are there for a long-term relationship, to help them with this vital work.

[Michael Dugher (Barnsley East) (Lab)]

Given that our forces are engaged in Pakistan, does the Prime Minister share my anger about how the departure of the Chief of the Defence Staff was announced—in an interview between the Defence Secretary and a national newspaper? Did not the CDS deserve rather better than that?

[The Prime Minister]

As I said, the Chief of the Defence Staff had for some time been intending to stand aside in the autumn after seeing through the strategic defence review, which is a vital piece of work. That is an appropriate time for him to do so. This is a good moment to pay tribute to the work that he has done, which has been genuinely good—I saw it myself in Afghanistan—and the very good leadership that he has given our armed forces.

[Sir Peter Tapsell (Louth and Horncastle) (Con)]

I join my right hon. Friend and the right hon. and learned Member for Camberwell and Peckham (Ms Harman) in their tributes to two more of our fallen heroes. As some of us in all parts of the House have been pointing out ad nauseam since 2006 that this was an undermanned and underequipped Army, how does my right hon. Friend think it came about that four successive Labour Defence Secretaries were so uninformed?

[The Prime Minister]

My hon. Friend takes a very strong view about this issue, and I have listened to him talk about it many times. He is right to say that we went into Helmand province with far too few soldiers and without a clear enough idea of how dangerous the insurgency could become. We also—I made this criticism in opposition—did not have sufficient helicopters and did not move fast enough on vehicles and other equipment programmes. We have to start from where we are and ask ourselves what it is right to do now, and it is right to give this new strategy set out by Stanley McChrystal and President Obama time to work by having a correct number of forces on the ground to deliver proper counter-insurgency and build up the Afghan army and police force so that we can bring those troops back home. The point in the end is, what will make our country safer? Our country will be safer if we can leave behind an Afghanistan that, although it may not be a perfect democracy or a brilliant society, has some level of stability so that it is not a haven for terrorism.

[Jeremy Corbyn (Islington North) (Lab)]

Next year the British and American troops will have been 10 years in Afghanistan. It has cost the lives of hundreds of coalition soldiers and thousands of Afghan people, and the war has spread into Pakistan and created instability in the region. Is the right hon. Gentleman utterly convinced that this strategy of long-term military engagement with Afghanistan is not the cause of future problems and that we should not be thinking of an alternative process of involvement and negotiation rather than constant military activity?

[The Prime Minister]

Let me try to find some common cause with the hon. Gentleman. I agree with him to this extent: we will not solve this problem by military means alone. There should be a political process, a process for the Taliban to lay down their arms and rejoin Afghan society and, yes, a process led by the Afghan Government of engaging with the Taliban. However, there have to be some red lines. There has to be an acceptance of the Afghan constitution, an acceptance that everything must be done by peaceful means and, above all, the severing of any link with al-Qaeda. So a political process, yes, but let us not pretend that that will come if we walk away militarily.

[Dr Julian Lewis (New Forest East) (Con)]

Does the Prime Minister accept that al-Qaeda, as an international terrorist organisation, if it is suppressed in Afghanistan and Pakistan will begin to operate from any one or more of half a dozen other potential harbouring states? Given that it is out of the question that we could ever try to tackle that problem in the extremely costly way that we have tackled Afghanistan, will he undertake to view with an open mind the sovereign base bridgehead solution, which I hope to have an opportunity to discuss with him presently?

[The Prime Minister]

I thank my hon. Friend for his question, and I know that he has considerable expertise in this area. He is right to say that there are other parts of the world where al-Qaeda is, regrettably, quite strongly established, including Yemen and Somalia, but it seems to me that that does not negate the need to do what is possible to deliver a basic level of security in Afghanistan, so that at least that country cannot once again become home to al-Qaeda. Doing that at the same time as working with the Pakistan Government can actually help to stabilise a region from which huge amounts of terrorism have come. In terms of the sovereign base idea, I am happy to look at it, and to discuss my hon. Friend’s ideas with him, but I think that a military surge that is part of a counter-insurgency must be given time to work.

[Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)]

In accepting that security and a political solution are of the utmost importance, will the Prime Minister be mindful of the need to advance human rights in Afghanistan? What progress can he report? Will he confirm that there will be no return to the oppression, particularly of women, that was suffered in Afghanistan in the Taliban years?

[The Prime Minister]

I am grateful for the hon. Lady’s question. I think that some progress has been made. When I say, “Look, we’re not going to end up with a perfect democracy or a brilliant society,” it does not mean that those things do not matter; they do. It is just about ordering our priorities. For instance, at the recent peace jirga, something like 20% or more of the representatives were women. I noted at my press conference with President Karzai that whereas the entire British press were made up of young, white men, all the questions from the Afghan press were from women, which I thought was a sign in itself.

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

The Prime Minister has rightly recognised how important the integrated nature of the military operation is, and how the coalition forces are together trying to achieve security for Afghanistan. Does he have a commitment from our coalition partners that they have understood the message that we can leave only once security is established, as the population in Afghanistan has to believe that we have the commitment to see the job through to the end?

[The Prime Minister]

The hon. Gentleman makes a very important point. He will know that the Canadians and the Dutch have made their own decision about timetables, but it is very important to do all that we can to encourage other NATO allies—I met representatives of the Danish and Estonian military while in Afghanistan—and to ensure that all other NATO partners remain committed to the task, particularly in this most vital year, when the number of troops has increased in the way that I have described, and when there is a real chance of delivering a proper counter-insurgency strategy that protects the people, pushes the Taliban out and delivers that basic level of stability that we want to see.

[Andrew Miller (Ellesmere Port and Neston) (Lab)]

The Prime Minister will be aware that the 1st Battalion the Mercian Regiment includes many of my constituents who were formally of the Cheshire Regiment, so I thank him for his statement. He rightly says that the military effort must be the highest priority in the campaign but, given his visits and the reports that he has received, may I ask him to reflect on the engineering resource on the ground? There is no doubt that the engineering resource helps massively with the military effort, but it also helps to rebuild communications, which can in turn help the governance of the country. Is he satisfied that it is at the right level?

[The Prime Minister]

The hon. Gentleman makes a good point. No, I do not think that we have made as much progress as we should have done on the engineering front. Let us take, for instance, the issue of the Kajaki dam: that should be delivering a lot more electricity to a lot more people in Afghanistan. Progress has not been anything like as fast as we would have hoped. That is the sort of tangible progress that people in Afghanistan want to see, to demonstrate that life is now better than it was under the Taliban. We have to deliver that as part of the message of security and stability that will enable us to leave.

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

May I commend and support my right hon. Friend’s determination and commitment personally to take responsibility for what our armed forces are seeking to achieve in Afghanistan? Is he aware, however, that there has for a long time been a widespread perception that while we are fighting a war in Afghanistan, Whitehall has not been on the same wartime footing and has not been tackling problems with the urgency that those in our armed services would expect? What is he doing to put Whitehall on a war footing and, in his absence, will he appoint a Secretary of State for Afghanistan to drive things forward?

[The Prime Minister]

My hon. Friend takes a great interest in these matters. We have put Whitehall on much more of a war footing, not least by appointing a National Security Council and a national security adviser, who met on day one of the new Government. That is a difference, and it is driving the policy. That message has got through clearly to the Ministry of Defence. Obviously, there are sometimes time lags in getting equipment out to the front line, but we are doing everything we can to make sure that that happens and that the commitment is there.

[Richard Burden (Birmingham, Northfield) (Lab)]

The Prime Minister has focused most of his remarks on security issues—rightly and understandably so. Can he say a little more about the development angles of our strategy in Afghanistan, and in particular, what, if any, changes he sees in the overall development strategy, how he feels about the so-called whole Afghanistan strategy which looks beyond Helmand and Kandahar to other parts of Afghanistan, and how he feels about the use of instruments such as the Afghan reconstruction trust fund for the disbursement of assistance? Finally, will he revisit the International Development Committee’s report from nearly two and a half years ago, which still has relevant messages to give about development strategies in Afghanistan?

[Mr Speaker]

I heard four questions, but one answer will suffice.

[The Prime Minister]

I agree with what the hon. Member for Birmingham, Northfield (Richard Burden) says about a whole Afghanistan strategy. We must be careful not to be over-focused on Helmand province, although I make no excuse for that, as that is where troops are. In the end, the whole campaign and mission will be judged by progress in Helmand. With reference to how we are changing our strategy, it is to make sure that it is focused, particularly on the issues of security and helping to deliver that security. On too many occasions in the past five years, people working hard for DFID have not been able to get out into Afghanistan to deliver aid projects because there is not enough security, so we have to get that right first.

[Mr John Baron (Basildon and Billericay) (Con)]

One of the many problems with our involvement in Afghanistan is that there has in the past been confusion about the key objective, so I welcome my right hon. Friend’s statement today, although I remain to be convinced that it can be achieved. Given that there has to be a political solution as well as a military one, how worried is he by the recent resignations from President Karzai’s Government of the chief of intelligence and the Interior Minister? Will he support President Karzai in seeking the compromise that is needed?

[The Prime Minister]

I discussed with President Karzai the resignation of the two Ministers, to which my hon. Friend referred, and the prospects for political settlement and for reintegration. That, combined with the military surge, will be vital to securing the future of Afghanistan and enabling us to bring our troops back home. In the end, particularly in southern Afghanistan, people must feel that they are part of the Government, and that it represents them. That process of reintegration, with the red lines that have been laid down, is a vital part of making that country more secure.

[Mr Tobias Ellwood (Bournemouth East) (Con)]

I am grateful to the Prime Minister for his commitment not just to the House, but to Afghanistan. It has been clear that our forces over there were undermanned. Instead of fighting one five-year war, we have been fighting five one-year wars. The various bases along the Helmand valley where British troops are now taking down the flags should be handed over not to the Afghans, but to the Americans. This is a repeat of Basra. Will the Prime Minister, along with the Defence Secretary, commit himself to counter-insurgency? We have always been good at that, but now we have been leapfrogged by the Americans.

[The Prime Minister]

I am grateful for the question and I know that my hon. Friend has great experience of Afghanistan, including having travelled there a great deal. I do not agree with him, though, that there is somehow a repeat of Basra, as he put it. Under the counter-insurgency strategy we are making sure that we have the correct number of forces spread across Helmand and across Afghanistan to deliver counter-insurgency. In some cases, as he knows, that means moving forces from one place to another to make sure that they are thick enough across the whole ground. It is welcome that there are now 20,000 US marines in Helmand. That should enable us to deliver such security, so we should not be in any way worried or ashamed or anything like that if we move the disposition of our forces around Helmand with our US allies. That is part of delivering a successful outcome.

[Bob Russell (Colchester) (LD)]

I welcome the Prime Minister’s statement. This autumn, soldiers from 16 Air Assault Brigade, from Colchester garrison, will be deployed to Afghanistan for the third time. In the Prime Minister’s statement on equipment, he did not mention unmanned aerial vehicles. Bearing in mind that UAVs are a very welcome tool in identifying insurgents and those who lay improvised explosive devices, will he give a commitment that UAVs will be very much there and part of the equipment programme?

[The Prime Minister]

I can give the hon. Gentleman that reassurance. On previous trips to Afghanistan, I have had proper presentations on the work of UAVs, drones, Predators, Reapers and other such projects, and what they are able to do is incredibly impressive. A great deal of British investment is going into those technologies, too, and we will ensure that they can be deployed as quickly as possible.

[David Tredinnick (Bosworth) (Con)]

When I recently spoke to soldiers from the Grenadier Guards who had just returned from Afghanistan, they made the point that the Afghan national police equipment is incredibly poor but the police themselves are very good, so will my right hon. Friend the Prime Minister please address that as a key issue?

[The Prime Minister]

I am grateful to my hon. Friend for that question. The problem has been not just equipment but recruiting, training and retaining good police officers, and obviously we had that appalling incident at Nad Ali last year. This cause has come out among Members from all parts of the House: for too long not enough focus was given to the most important things in Afghanistan, of which training the police was absolutely key. The effort is now going in. I met American and British police trainers, and the police training college in Lashkar Gah is now turning out very good police officers, but for too long that particular issue was ignored.

[Andrew Selous (South West Bedfordshire) (Con)]

Does the Prime Minister believe that the mine clearance equipment available to our troops is now the best in the world?

[The Prime Minister]

Certainly I had a presentation out in Afghanistan on the equipment now being used and the training undertaken, and what our troops are able to do is incredibly impressive. The truth—I am sure that the former Defence Secretary will agree—is that we have to keep on investing and catching up with the latest technologies that the enemy use, because they are incredibly cunning at trying to find new ways of making those things even harder to find.

[Mr Speaker]

Order. I am grateful to all colleagues for their co-operation.

Office for Budget Responsibility

Monday 14th June 2010 Commons Chamber

16:17

[The Chancellor of the Exchequer (Mr George Osborne)]

With permission, Mr Speaker, I should like to make a statement on the Office for Budget Responsibility, which the Government created on coming into office.

This morning, for the first time in British history, we have opened up the Treasury books and allowed the publication of an independent and comprehensive assessment of the public finances. From now on, Governments will have to fix the budget to fit the figures, instead of fixing the figures to fit the budget. I should like to thank Sir Alan Budd, the members of the budget responsibility committee and all their staff for the impressive work that they have done in short order. A copy of their report has been placed in the Vote Office and in the Libraries.

There has been some interest in whether the OBR would publish all the relevant underlying assumptions and judgments driving the forecast. Today’s report does more than that: there are more than 70 pages of detailed material, much of which has never been published before. For the first time ever, the Government are publishing the assumptions that lie behind the estimates for average earnings, property prices, interest rates and financial sector profits, and, crucially, a five-year forecast for annually managed expenditure. That includes a forecast for the amount of debt interest that we as a country will pay over the coming years.

The creation of the OBR has already impressed the international community and been praised by the International Monetary Fund and the G20. We will now move to put the OBR on a statutory footing with legislation that was included in the Queen’s Speech. From now on, Members of Parliament sent to this House to scrutinise how the Government spend taxpayers’ money will have access to honest and independent figures.

Let me now turn to those figures and what the OBR has uncovered. First, there are the forecasts for growth in the economy. The OBR is forecasting that growth will reach 1.3% this year and 2.6% next year. In future years, the OBR’s forecast is for growth of around 2.8% in 2012 and 2013, and then 2.6% in 2014. Sadly for our country, the forecasts for growth are lower in every single year than the figures announced by the previous Chancellor at the time of the last Government’s Budget in March. He told us that growth would soar to 3.25% in 2011, and then to 3.5% in 2012. When those forecasts were given, neither the Bank of England nor 28 of the main 30 private institutions producing forecasts for the UK were offering such an optimistic central view of the economy; we can only speculate as to why such rosy forecasts for a trampoline recovery were produced only weeks ahead of a general election.

I turn to the OBR’s forecasts for the public finances. The latest outturn data show that public sector net borrowing for last year was £156 billion. The OBR is forecasting that it will be £155 billion this year. It is the highest budget deficit of any country in the European Union with the exception of Ireland. It is £10 billion less than the forecast given only a month before the end of the last fiscal year, but I can tell the House that, based on the OBR’s figures, that £10 billion advantage that we start with decreases to only £3 billion by the end of the Parliament.

The reason for that is that the cyclically adjusted current balance, commonly known as the structural deficit, is forecast to be higher in every single year than what this House was told in March. That is perhaps the most important figure in the report, because the structural deficit is the borrowing that remains even when growth in the economy returns. It is the structural deficit that is a key determinant of whether the public finances are sustainable. This year, the structural deficit is forecast to reach 5.2% of GDP—that is, £9 billion higher than we were told in March. Next year, the structural deficit will be £12 billion higher than we were told before the election.

The OBR’s forecast sees debt rising as a share of GDP throughout the Parliament—and the interest on that debt, which we as taxpayers have to pay, also grows every year. Let me be the first Chancellor in modern history to give Parliament those numbers for the coming years. The OBR forecast is that this is what Britain will have to pay for its debts: £42 billion of debt interest this year, rising to £46 billion next year, then £54 billion, then £60 billion and reaching £67 billion in debt interest payments by 2014-15. Over the course of this Parliament, more than a quarter of a trillion pounds will come from the pockets of taxpayers simply to service the debts left by the previous Government.

The figures produced by the OBR also give us a new insight into the spending plans that we inherited as a Government. They show that, given the OBR’s assumptions, the previous Government would have had to find £44 billion of spending cuts in departmental budgets to deliver their published plans. I can confirm that I have found no evidence at the Treasury for how even a single pound of that £44 billion was ever going to be achieved.

There are two other very important considerations that relate to these pre-Budget forecasts and understate the situation that we inherited. First, these are central forecasts with a fan chart around them to represent the great uncertainty that exists, rather than Treasury forecasts based on an arbitrary reduction in the trend level of output. As a result, they understate the increase in the structural deficit and the reduction in growth. Secondly, and crucially, these projections have been based on recent market interest rates, which are about a third of a percentage point lower in Britain than at the time of the general election. As is widely acknowledged, that in part reflects investors’ confidence that the new coalition Government will take action to deal with the deficit. As a result, as Sir Alan points out in his report:

“In present conditions the likely result is that these economic forecasts are biased upwards”.

That is absolutely crucial to understanding today’s figures, because if we followed the fiscal path set out by the previous Government, that would, again in Sir Alan’s words in the report,

“lead to higher interest rates and so lower economic activity”

than forecast today.

Let me conclude with this point. The independent report published today confirms that this coalition Government have inherited from their predecessor one of the largest budget deficits in the world, forecasts for growth lower than the country was told at the time of the election, a larger structural deficit than had been previously admitted, and a debt interest bill larger than the schools budget.

It is indeed worse than we thought. The public would not have known any of this if we had not set up the Office for Budget Responsibility. Next week, I will return to the House to explain what we will do about it. In the meantime, I commend this statement to the House.

[Mr Alistair Darling (Edinburgh South West) (Lab)]

I thank the Chancellor for his statement. My thanks would be more heartfelt had I not received it just 25 minutes ago. There was a time when statements were supposed to be in the hands of the Opposition an hour before the statement was made, and then 45 minutes. I do accept, before the Chancellor says it, that in my time there were occasions when he did not get as much notice as he wanted. All I would say, in the nicest possible way and in the spirit of consensus, is that if we could try to get these statements in the Opposition’s hands rather earlier, that would be very helpful.

Turning to the substance of the Chancellor’s statement, I welcome the measured approach taken by Sir Alan Budd, and his colleagues in the Office for Budget Responsibility, in presenting his report this morning. Higher borrowing by the Government, as the OBR acknowledges today, continues to support the economy. Indeed, without it, there was a grave risk that a recession could have tipped into a depression; that is why the expenditure was necessary in this country and in other countries across the world. However, as I have said repeatedly, borrowing needs to come down as the economic recovery is established. Has not the OBR forecast that borrowing will be £30 billion lower than I anticipated in my Budget, and does not that flatly contradict the Prime Minister who said last week that

“the overall scale of the problem is even worse than we thought”?

Does not the report say that borrowing is lower not just this year, for which the OBR forecasts borrowing at £8 billion lower than I did, but in each and every one of the next five years? Borrowing is down by more than £30 billion in total. Can the Chancellor confirm whether he and the Prime Minister knew what the OBR’s borrowing forecasts were prior to the Prime Minister making his speech last Monday? If he did not, he was just plain wrong; if he did, he owes us an apology. At the election, the Chancellor and the Prime Minister said that they had no need to raise VAT. Now that borrowing is in fact lower than they thought, is that still their policy?

Turning to growth, the OBR has confirmed my forecast for this year, but it has set out a lower growth forecast for future years—just 2.6% next year. This change is driven partly by what Sir Alan has today labelled “recent events”, particularly events in Europe, where growth is sluggish at best. Is it not the case that what is happening in Europe, our largest export market, will impact on growth here in the UK? Does not that reinforce the need to put in place measures to secure growth here and in other countries in Europe? Does not the Chancellor agree that the impact of action taken across Europe to reduce deficits runs the risk of depressing demand and setting back the recovery unless accompanied by measures to stimulate growth? Does he not accept that growth is essential to cut borrowing? Japan provides an example of what happens if one gets this wrong—recovery is choked off, growth becomes stagnant, and debt rises.

It was because the private sector was weak as the global crisis hit that the public sector stepped in to support our economy. Sir Alan Budd and his colleagues understand that point, because Sir Alan says in his report, at paragraph 3.20:

“Private sector demand contracted sharply in the recession, while government spending contributed positively to GDP growth.”

So much for the claim that our spending was irresponsible and unnecessary. In the same paragraph, he goes on to say:

“For this year”—

2010—

“it is government consumption and inventory accumulation that make the largest contribution to growth.”

In other words, without it there would not have been growth this year. The risk of taking large sums out of the economy is that the recovery will be derailed. Is it not also the case that confidence is being affected by the scaremongering that we see from the Prime Minister and the Chancellor? The Chancellor will have noticed the survey of business confidence this morning showing a reduction in business confidence. That shows that what he is saying is, unfortunately, having a very real impact on the economy.

The Chancellor asked us to focus on the structural deficit. However, he will have read Sir Alan’s very clear statement, at paragraph 4.40 of the report, that

“forecasts of cyclically-adjusted aggregates are subject to particular uncertainty.”

In other words, there is a great deal of uncertainty about what the structural deficit is. But if the Chancellor does take the estimate of structural borrowing from today’s forecasts as the barometer of success, he needs to be clear with people what that means. Will he confirm that it is still his policy to remove the entire structural deficit over this Parliament? If so, will he confirm that, on the numbers published today, he would need to find £118 billion by 2014-15? That is £118 billion of spending cuts, tax rises or both, which will affect millions of people and businesses in this country.

Since the Budget, there has been slightly faster growth at the beginning of this year. There is lower borrowing as tax receipts have come in higher than previously thought. Far from providing political cover for the Conservatives and Liberal Democrats for cuts and tax rises next week, does not the report remind us that growth is still fragile, the recovery is not yet secured and growth is essential, not only to cut borrowing but to secure jobs and a lasting recovery?

[Mr Osborne]

The report reminds us of the complete mess that the economy was in when there was a change of Government.

Let me deal with the right hon. Gentleman’s points. First, I apologise that he received the statement only 25 minutes before it was delivered. I was following the normal practice that had been established in the Chancellor’s private office. Despite having been on the wrong end of that for three years, I note his complaints about the very first statement, and I will look into that.

Let me answer directly the right hon. Gentleman’s question, towards the end of his remarks, about the fiscal mandate. It will be set in the Budget. There is no credible fiscal mandate in place in Britain because we have inherited from the previous Government a commitment, which most of the rest of world does not believe is a serious and credible effort to reduce the deficit. The fiscal rules never amounted to very much either when the crisis came, but we will put in place new fiscal architecture.

The right hon. Gentleman talks about borrowing and economic growth. I remind him that the whole point about the structural deficit is that it is not the part of the deficit that reduces as growth returns. According to the OBR report, it is increasing above the estimates that were given in the March Budget. That is striking given that the out-turn for borrowing last year was, indeed, lower than the Chancellor forecast just three or four weeks, as far as I can tell, before he received the out-turn numbers. He gave a figure in the Budget and out-turn numbers were lower. It is therefore all the more striking that the structural deficit—the crucial part of the numbers: the black hole in the public finances—is higher by a significant amount than he forecast. Of course, we are all concerned about the situation in the eurozone, but 28 out of 30 independent bodies that look at the British economy did not believe that the figures that he gave in the March Budget were accurate. Indeed, we pointed that out at the time. [Hon. Members: “You haven’t answered a single question.”] I did not think that the right hon. Gentleman asked many questions; I have answered both of them.

The right hon. Gentleman makes a point about spending cuts and so on. He pencilled in £44 billion of spending cuts. Until a single member of the Opposition provides us with a clue as to how they would even have begun to achieve those £44 billion of cuts, they will not be taken seriously. The leadership contenders are busily taking their party leftwards into the margins of British politics. They are not addressing the central issue about their fiscal plans, which were not credible. Where would the spending cuts have come from? We are prepared to answer that question. Until they do, they are not contenders for being taken seriously in British politics.

Let me remind the right hon. Gentleman of what one of his Ministers, Paul Myners, said. This was the man whom he appointed—or at least agreed to have appointed—to the Treasury, and the man who sat with him in all those meetings over the years. He said:

“There is nothing progressive about a Government who consistently spend more than they can raise in taxation, and certainly nothing progressive that endows generations to come with the liabilities incurred by the current generation.”—[Official Report, House of Lords, 8 June 2010; Vol. 719, c. 625.]

That is the truth about the Labour party’s position.

The right hon. Gentleman says, “Apologise”. He is the person who should apologise. More to the point, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), wherever he is, should come here and apologise for the complete economic mess in which he left the country.

[Margot James (Stourbridge) (Con)]

May I congratulate my right hon. Friend on this unprecedented increase in transparency and openness on economic forecasting? Is it not the case that the increase in the structural deficit as a percentage of gross domestic product means that a robust deficit reduction plan is needed now more than ever?

[Mr Osborne]

My hon. Friend is absolutely right, and that is also the conclusion of the G20, the European Union and most international observers of the UK situation.

[Mr Michael Meacher (Oldham West and Royton) (Lab)]

If the Chancellor accepts Sir Alan Budd’s estimate that around three quarters of the current deficit—about £120 billion—is structural, and if he intends to eradicate that entirely during this Parliament through public spending cuts and tax increases, where does he expect the growth to come from to prevent unemployment from increasing to 3 million and staying there for the next five years?

[Mr Osborne]

The fiscal mandate will be set out in the Budget. I am disappointed that the right hon. Gentleman was not elected as Chair of the Public Accounts Committee, but perhaps from his current position he will begin to propose cuts—as I said, cuts were even pencilled in to the previous Government’s plans—before concerning himself with our proposals.

[Mr Julian Brazier (Canterbury) (Con)]

While sharing my right hon. Friend’s dismay at the inheritance he has acquired—the picture is even worse than it once appeared—may I urge him to accelerate the plans that the Conservatives set out at election time to encourage lending by the banks, especially to small businesses, because the money supply figures are at an almost unprecedented low, and there is a real danger that we could see a further downturn?

[Mr Osborne]

My hon. Friend is absolutely right to be concerned about the lending figures out there in the economy, and I hope to have more to say on that in the Budget.

[Stewart Hosie (Dundee East) (SNP)]

I thank the Chancellor for his statement and the early advance sight of it. That is different from what happened under the previous Government, when such statements tended to come in very late indeed.

There is no doubt that the OBR forecasts show that the previous growth forecasts were too high and the deficit forecast, which is now £155 billion, was also too high. Will the Chancellor reflect that that is not simply a green light to tax and cut more, but that it demonstrates the imperative for sustained and sustainable above-trend growth, which is the real solution to tackling the structural deficit?

[Mr Osborne]

I thank the hon. Gentleman for thanking me for the early sight of the statement—we are trying to improve on things in the Chancellor’s office.

My point to the hon. Gentleman is that the threat to the United Kingdom at the moment is, in part, our very large budget deficit. Indeed, the Governor of the Bank of England identified it as the single greatest economic challenge that we face. Whether we are Scots or English, and wherever we live in the UK, we must deal with that deficit. I would welcome engagement with the Scottish Government in moving forward and identifying sensible savings, so that we can reduce the budget deficit and give our country and future generations a bright future.

[Dr John Pugh (Southport) (LD)]

May I welcome you to your role, Mr Deputy Speaker?

According to the House of Commons Library, the Treasury has, in the past 10 years, been at least as good at accurately forecasting growth as independent forecasters. The background work on the new projections has actually been done by a secretariat provided by the Treasury, and according to Sir Alan, the changes are

“within the normal range of uncertainty”.

Therefore, in all honesty, ought we to regard the new independent forecast as a simple downgrade of Treasury forecasts, and avoid unnecessary point scoring on what is a matter for the whole nation?

[Mr Osborne]

I am always against unnecessary point scoring. I say this to my hon. Friend: I think the new process is a big departure in how Budgets are put together. It is worth reflecting for a moment on what I did in this statement. I have read out what would normally be the first part of the Budget. Everyone now knows the forecasts and the assumptions behind them. He says that the forecasts were produced with the help of Treasury people, but Sir Alan Budd is an enormously respected independent person, and I do not think his independence can be questioned. We now have a set of accurate national accounts. Indeed, when the OBR is on a statutory footing, I want it to do more work on the true state of the national accounts, with regard to private finance initiative liabilities and the like. The big difference is that I must now fit the Budget to the figures, rather than fit the figures to the Budget.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

I welcome you to the Chair, Mr Deputy Speaker.

Page 11 of the OBR forecast has an illuminating table about the contribution that various elements of spending—in this case, Government investment—make to GDP growth. For 2011, it shows a potential minus 19% effect in one year. Will the Chancellor confirm that his Budget and the spending review will not worsen that contribution to GDP, and will the OBR report on an analysis of the Budget and the spending review in terms of those components shortly after they take place?

[Mr Osborne]

I will set out measures in the Budget, and the hon. Gentleman will have to wait for that. He highlights the point that I was making—that the forecast is based on the plans inherited from the previous Government. It identifies huge spending cuts, but they never told us where those cuts would fall. I am sure that he wants a future in the Labour party, so perhaps he can take a lead over some of the leadership contenders and tell us what those cuts would be.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

Will my right hon. Friend support the work of the OBR in assessing offsheet balance liabilities, including such things as PFI and unfunded public sector pension liabilities? I hope that he will recognise that it is important that we put all the debts that Labour has generated over the years on the balance sheet once and for all so we know how we can pay for them.

[Mr Osborne]

My hon. Friend is right. On page 58 of the report, Sir Alan and the fellow members of his committee set out some of the liabilities that need to be factored into longer-term fiscal forecasts, which include an ageing population, unfunded public service pension liabilities and the PFI contracts. They point out that some £43 billion of PFI contracts are off the national balance sheet.

[Jack Dromey (Birmingham, Erdington) (Lab)]

In the real world of the real economy, last Friday I met a dozen world-class machine tool manufacturers at their annual exhibition in Birmingham. They were unanimous in their view that the Government were right to borrow to invest in the economy to boost it and their order books. Are they wrong?

[Mr Osborne]

If they are similar to the machine tool manufacturers I have met in Birmingham in recent months, they are also very concerned about the size of the budget deficit and that, unless we get a grip on it, there will be an ever higher spiral of tax rises and interest rate increases that would do enormous damage to them and to the people whom they employ.

[Nicky Morgan (Loughborough) (Con)]

I note that the former Chief Secretary who left that infamous note for his successors is in his place. Surely the establishment of the OBR heralds a transparency and openness that we have not seen before, and will mean that such a note could never be left again.

[Mr Osborne]

It would probably have to be published, if it were—[Interruption.] Well, just the contents.

As I noted from the remarks of the shadow Chancellor, it is interesting that we have not actually heard from the Labour party about whether it supports an independent OBR. It opposed that when in government—

[Mr Darling]

indicated dissent.

[Mr Osborne]

It was repeatedly opposed by Treasury Ministers when I proposed it. Indeed, one of the most vocal and eloquent opponents was the shadow Education Secretary—I know that the shadow Chancellor has not always got on with him—who put the arguments on why Labour was opposed. If the Labour party wants to change its mind, we are all ears.

[Clive Efford (Eltham) (Lab)]

What has the OBR had to say about predictions of levels of unemployment and how they differ from those predicted in the March Budget?

[Mr Osborne]

For the first time, the OBR has published five-year projections of unemployment and employment. The projection for the coming year, for example, is that employment will fall and unemployment will rise—based, of course, on the pre-Budget measures.

[Charlie Elphicke (Dover) (Con)]

In Dover and Deal, people tell me time and again that they want more jobs, more money and more economic growth, so it is a real shock to come to the House and see the table in today’s report showing that economic growth has been revised downwards, by between 0.5% and 1%. How can that have happened in the three short months since the Budget? Were the Budget numbers fiddled? What has been going on?

[Mr Osborne]

To be frank, my hon. Friend’s question is one that he needs to address to the shadow Chancellor when there is an opportunity.

[Rachel Reeves (Leeds West) (Lab)]

I welcome the establishment of the Office for Budget Responsibility and the increased transparency that it brings. However, the point that today’s document makes most clearly is that the economic recovery is still fragile. The Chancellor makes interesting points about the structural deficit, but does he agree that the structural deficit depends also on the level of economic growth? What are he and his Government doing to lift the economic growth rate, when there is so little about, given that the future jobs fund, the regional development agencies, and support for industry and universities are all being scrapped?

[Mr Osborne]

We are providing support to the economy, first, by providing a transparent account that commands international confidence, and secondly, by committing to a clear plan to reduce the budget deficit and taking in-year measures that have commanded international confidence. That has led to a reduction in market interest rates for this country and given enormous support to the economy.

The final point that I would make to the hon. Lady is this. Let us not forget the situation that we inherited: the largest budget deficit in the developed world; rising unemployment; industry that had been brought to its knees; business investment that had collapsed. That is the situation that we are trying to recover from.

[Jacob Rees-Mogg (North East Somerset) (Con)]

Will the Chancellor consider asking the Office for Budget Responsibility to think about tax cuts to help economic growth, thereby bringing our budgetary system into a better situation?

[Mr Osborne]

Sir Alan will give evidence to the Treasury Committee when it is formed, but one of the things that the Office for Budget Responsibility will do is cost Budget measures, including the impact of tax and spending changes. That will revolutionise how Budgets are put together, as well as how the House can scrutinise them, because hon. Members will be able to see that the costings are independently verified, rather than being ones that the Chancellor has signed off.

[Fiona Mactaggart (Slough) (Lab)]

I, too, welcome the greater transparency that today’s report involves. It shows us that the recovery is genuinely fragile. When I spoke just last week to a company in my constituency in one of the sectors in which Britain leads the world—bio-pharmaceuticals—I was told that manufacturing investment had been moved to countries that were investing publicly in their companies, including from Britain, where it was not possible to secure such investments. How will the Chancellor’s Government ensure that such disinvestment, caused by a lack of public support, does not continue to create more unemployment and a weaker recovery for Britain?

[Mr Osborne]

First, let me thank the hon. Lady for welcoming the creation of the Office for Budget Responsibility—I should have thanked the hon. Member for Leeds West (Rachel Reeves) for that as well. The change is a genuinely revolutionary step forward in the making of Budgets that fits with a wider agenda of trying to bring more transparency to the way that the Government do their business. On the point about investment, the hon. Member for Slough (Fiona Mactaggart) is right to point out that there was a fairly dramatic fall in investment under the Government whom she supported, but I would say this: the sustainable answer to the problem is a strong private sector recovery, and that is what we all have to work towards.

[George Freeman (Mid Norfolk) (Con)]

Does my right hon. Friend agree that the real significance of today’s independent report is the revelation of the extent of the structural deficit, with debt interest alone forecast to rise to £67 billion, strangling growth and enterprise, and at the same time destroying new Labour’s core claim to be the party of economic competence?

[Mr Osborne]

My hon. Friend is right—[Interruption.] I see one of the leadership contenders barracking from the Opposition Benches. I do not know whether the right hon. Member for Doncaster North (Edward Miliband) wrote the speech for the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) in which he told the Labour party conference in 1996:

“Losing control of public spending doesn’t help the poor”.

That is one area in which I agree with the former Prime Minister.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

Does the right hon. Gentleman accept that a major contributor to the reduction in the growth forecasts for next year is the increasingly gloomy situation developing in Europe? Is he at all concerned about the competitive austerity that is breaking out across Europe? Is he also concerned that, if he goes ahead with the programme that he is outlining, we might face a double-dip recession as a consequence?

[Mr Osborne]

I suspect that everyone in the House is concerned about the situation in the eurozone, but let us be clear what has brought that about. It is a result of market concern about the sustainability of public finances in eurozone countries such as Greece. Those countries are having to take action to reassure markets and therefore keep their interest rates lower. I think that interest rates in Greece rose to more than 10% higher than those of other eurozone countries at one point. That is what happens to countries that do not get a grip on their public finances, and I want to ensure that no question mark is ever put against the name of the United Kingdom.

[Richard Harrington (Watford) (Con)]

The complacency of the former Chancellor of the Exchequer about the small reduction in the expected budget deficit is rather like my saying that I am losing weight because I missed breakfast. We want clear, credible plans to deal with the budget deficit, and we need to know what they are as soon as possible.

[Mr Osborne]

I suggest to my hon. Friend that he turns up here next Tuesday.

[Kelvin Hopkins (Luton North) (Lab)]

May I first welcome you to your new post, Mr Deputy Speaker? Will the Chancellor confirm that budgetary policy will remain the responsibility of the Government, who will be fully responsible to Parliament in this Chamber, and that it will not be dictated by the European Union or any of its institutions?

[Mr Osborne]

Before I answer the hon. Gentleman, I, too, should welcome you to the Chair, Mr Deputy Speaker. [Hon. Members: “Hear, hear!”] My several visits to Chorley during the general election seem only to have helped you to return to this place. It is good to see you here in the Chair.

In answer to the hon. Member for Luton North (Kelvin Hopkins), of course I want the elected British Government and the elected House of Commons to have complete control over the tax and spending decisions that affect our country. One way of doing that is to ensure that we never give rise to market concerns about our ability as a country to live within our means. That is the way to retain national sovereignty. We have seen what happens when other countries lose that sovereignty to the markets.

The hon. Gentleman asked specifically about the European Union, and I shall make two observations about that. First, the Budget this year and in all future years will of course be presented first to the House of Commons before being presented to anyone else. Secondly, I know that he will be interested in this and, before those in my party who are interested in these subjects get hold of this fact, I should let the House know that, under the deal negotiated by the right hon. Member for Kirkcaldy and Cowdenbeath and the other former Prime Minister, Tony Blair, the British contributions to the EU budget are set to rise from £3 billion in 2008 to £10.3 billion in 2014.

[Sajid Javid (Bromsgrove) (Con)]

My constituents, like millions of people up and down the country, are very concerned about the direction of mortgage interest rates. Does my right hon. Friend agree that unprecedented transparency in our national finances of this kind will increase our credibility in the global financial markets and help to keep interest rates lower for longer?

[Mr Osborne]

My hon. Friend is absolutely right, and it is worth reminding ourselves that the OBR June 2010 pre-Budget report is based not only on the previous Government’s tax and spending measures and decisions, but partly on the lower interest rates earned by the current Government in the decisions and announcements we have made over the previous month or so. That is why Sir Alan says in his forward that

“the fiscal path assumed”

by the previous Government

“would lead to higher interest rates and so lower economic activity ”.

[Mr Ivan Lewis (Bury South) (Lab)]

Are cuts this year a matter of a small-state ideology or in our economic interests?

[Mr Osborne]

They are, above all, in our economic interests because of the mess left to us by the previous Government.

[Claire Perry (Devizes) (Con)]

Has my right hon. Friend had any conversations about these measures with other international financial managers like himself, and if so, what has been the response?

[Mr Osborne]

I know that my hon. Friend takes a keen interest in these matters, so she will have seen the G20 communiqué signed in South Korea that says:

“Those countries with serious fiscal challenges need to accelerate the pace of consolidation. We welcome the recent announcements by some countries to reduce their deficits in 2010 and strengthen their fiscal frameworks and institutions.”

That is, of course, precisely what the OBR does.

[Mr George Mudie (Leeds East) (Lab)]

Has the Chancellor seriously come to this House and told us he does not have any concerns or see any danger of high unemployment or damage to the economy in taking a short-term approach to clearing the structural deficit?

[Mr Osborne]

We have demonstrated that the OBR, alongside some of the other things we have done, is a commitment to the long-term sustainability of the British public finances, and I remind the hon. Gentleman of the following words of the Governor of the Bank of England:

“The most important thing now is for the new Government to deal with the challenge of the fiscal deficit. It is the single most pressing problem facing the United Kingdom”.

[Penny Mordaunt (Portsmouth North) (Con)]

One of the consequences of the previous Chancellor playing fantasy forecasts with this country’s growth projections is that the men and women of my constituency—and, I am sure, of elsewhere—feel they have been treated with contempt and as mere collateral damage of an election campaign. It is vital that we restore these people’s trust and confidence in Treasury reporting; it is, after all, they who are going to put this country back on its feet again. What will this Treasury team do to support that?

[Mr Osborne]

First, I will tell the Prime Minister what I am up to, because another thing that emerged over the weekend was that the former Chancellor of the Exchequer hid the numbers not only from the rest of the country, but from his own Prime Minister.

[Chris Williamson (Derby North) (Lab)]

May I begin by congratulating you, Mr Deputy Speaker, on your elevation to your new role? Will the Chancellor explain why he is obsessed with pursuing economic policies that failed in the 1930s, failed in the 1980s and failed in the 1990s?

[Mr Osborne]

The most obvious set of failed economic policies is that pursued by the Labour party.

[Gavin Barwell (Croydon Central) (Con)]

If I heard my right hon. Friend correctly, the policies of the previous Administration will lead to us spending an incredible £67 billion on debt interest alone by the end of this Parliament. In the interests of transparency, may I encourage him to put that number in context for the wider electorate, so that we know the amount per household in relation to the amounts we spend on our NHS and school system?

[Mr Osborne]

That is an excellent idea. I will ensure that that information is circulated not only to Government Members, but to Opposition Members as well.

Gulf of Mexico Oil Spill

Monday 14th June 2010 Commons Chamber

16:58

[The Secretary of State for Energy and Climate Change (Chris Huhne)]

I welcome you to your position, Mr Deputy Speaker. The House will wish to join me in expressing our deepest sympathy to those bereaved or injured in the explosion in the gulf of Mexico on 20 April, and to all the individuals and communities affected by spilling oil or fearing that they will be affected by it over the days and weeks to come. Our thoughts must be, first, with them.

On 20 April, an explosion and subsequent fire on board a drilling rig operated by Transocean under contract to BP in the gulf of Mexico tragically killed 11 workers. On 22 April, the rig sank. On the sea bed, 1,600 metres below, substantial quantities of oil were leaking into the ocean—the blow-out preventer, which should have sealed the leak, failed. The causes of the accident are now subject to a US presidential commission of inquiry, and to civil and criminal investigation.

There has never been such a large leak of oil so deep in the sea. Attempts by BP, under the direction of the US authorities, to seal the leak were not successful. The company then pursued a strategy of capturing as much oil as possible, and in recent days more than 15,000 barrels a day of oil have been recovered. However, it is also thought that the leak is worse than previously believed. The US Government’s estimate of the flow of the leak is now 35,000 to 40,000 barrels per day. BP hopes to be able to increase significantly the amount of oil that it is capturing, but a very large quantity of oil continues to be released into the sea. Moreover, the leak will not be fully staunched until August at the earliest, when the first relief well, which BP is already drilling, should enable the original well to be plugged.

An enormous operation is also taking place to address the environmental impact of oil that is already in the water. Working under Admiral Thad Allen of the US Coast Guard, more than 2,000 boats have been involved, skimming the water and using dispersant chemicals. Thousands of workers and volunteers onshore are removing oil and maintaining coastal defences. The House will wish to join me in paying tribute to those involved in that work.

We understand and sympathise with the US Government’s frustration that oil continues to leak at the rate that it does. In order for us to appreciate the scale of this environmental disaster, I should point out that each week a quantity of oil equivalent to the total spillage from the Exxon Valdez is escaping into the gulf of Mexico. The US Administration have said that BP is doing everything asked of it in the effort to combat the spill. We, of course, look to the company to continue in that, and we will do everything we can to help. The key priority must be stopping the environmental damage. In their telephone conversation at the weekend, President Obama reassured the Prime Minister that he has no interest in undermining BP’s value and that frustrations in America have nothing to do with national identity.

Hon. Members will remember that in 1988 the Piper Alpha rig in the North sea exploded, with 167 fatalities. Following that disaster, our regulatory regime was significantly tightened, and we split the functions of licensing and health and safety in the UK. The US has announced that, in future, separate organisations will deal with those functions in the US, and we hope that we have some experience to offer of building and operating such a system. Officials from my Department and from the Health and Safety Executive have been discussing that with their US counterparts.

It is my responsibility to make sure that the oil and gas industry maintains the highest possible standards in UK waters, and I have had an urgent review undertaken. It is clear that our safety and environmental regulatory regime is already among the most robust in the world, and the industry’s record in the North sea is strong. However, as exploration begins in deeper waters west of Shetland, we must be vigilant. Initial steps are already under way, including a doubling of the Department’s annual environmental inspections of drilling rigs. I will also review our new and existing procedures as soon as detailed analysis of the factors that caused the incident in the gulf of Mexico is available. That will build upon the work already begun by the newly-formed Oil Spill Prevention and Response Advisory Group. Given the importance of global deep-water production during our transition to a low-carbon economy, I will also ensure that lessons and practice are shared with relevant regulators and operating companies.

I shall now discuss the position of BP. It is hugely regrettable that the company’s technical efforts to stop the spill have, to date, been only partially successful, but I acknowledge the company for its strong public commitment to stand by its obligations, to halt the spill and to provide remedy and payment of all legitimate claims. As BP’s chairman has said, these are critical tasks for BP, and it must complete them in order to rebuild trust in the company as a long-term member of the business community in the United States, the United Kingdom and around the world.

BP remains a strong company. Although its share price has fallen sharply since April, it has the financial resources to put right the damage. It has exceptionally strong cash flow, and it will continue to be a major employer and a vital investor here and in the United States. In many ways, BP is effectively an Anglo-American company with 39% of its shares being owned in the US, against 40% in the UK.

There has been much speculation in the press about the impact on UK pension funds and about whether the company will pay a quarterly dividend. That is entirely a matter for BP’s directors, who will no doubt weigh all the factors and make a recommendation to their shareholders that is in their best interests, which of course include the best interests of many UK pension funds. Many citizens have real and legitimate worries about their pensions, but I would like to reassure the House not only that BP is financially sound, but that pension funds that hold BP shares generally hold a very diverse portfolio of assets and that their exposure to a single company, even a company as economically important as BP, is limited.

In concluding my statement, I wish again to express the Government’s profound sympathy to those in the US affected by this accident and its aftermath. The priority must be to address the environmental consequences of the spill, and our concentration is on practical measures that can help with that. The disaster is a stark reminder of the environmental dangers of oil and gas production in ever-more difficult areas. Coupled with the impact of high-carbon consumption, it highlights yet again the importance of improving the energy efficiency of our economy and the expansion of low-carbon technologies. We must and will learn the lessons of these terrible events. I commend the statement to the House.

[Edward Miliband (Doncaster North) (Lab)]

May I start by thanking the Secretary of State for the advance notice of his statement and for keeping the House informed of developments regarding the gulf oil spill? Let me join him in expressing deep sorrow for the 11 people who died in the accident and deep sympathy to their families. As he said, it is a reminder of the dangers that come with life in the offshore oil industry. We saw that ourselves last year with the tragic helicopter accident in the North sea. We should never forget the people who have lost their lives in this accident.

May I join the Secretary of State in expressing deep concern about the environmental impacts of the oil spill, which he summarised in his statement? I believe it is in the interests of the environment as well as the employees, shareholders and pension fund investors of BP that there should be a clear and co-ordinated response from the Governments of Britain and the United States. In that context, I want to ask him five specific questions arising from his statement. First, on the private sector companies involved in this accident, does he agree that all the companies involved in the Deepwater Horizon project—Halliburton, Transocean, Cameron and BP—should be subject to investigation, and that finger-pointing at BP in particular is not helpful?

Secondly, on regulation, does the Secretary of State agree that any process of learning lessons needs to look not just at the actions of private companies, but at the regulator—the United States’ Minerals Management Service—and at the general level of regulatory standards in place in the US and around the world for deep-water drilling? Will he also comment on his specific understanding—I appreciate that things are at an early stage—of the level of regulation in the US compared with that in the UK?

Thirdly, in terms of the implications for Britain, I welcome what the Secretary of State said about the licensing of drilling in deeper waters in the UK, including west of Shetland. Does he agree that it is essential to look at any lessons learned before beginning that deeper-water drilling?

Fourthly, and very importantly for the long-term future, does the Secretary of State agree that the central lesson of Deepwater Horizon is that we cannot, as a world, simply dig deeper and deeper for oil, plundering the world’s natural resources? The opportunity should be seized on both sides of the Atlantic by the Prime Minister and the President, in a way that has not so far happened, to send a louder and clearer message about the need to make the transition to a post-oil economy. It will take decades, but the transition needs to start all around the world.

Fifthly, in the same context, does the Secretary of State agree that, after the tragedy of Deepwater, the best thing that could happen is a renewed push towards low carbon and clean energy around the world, with Europe moving to a 30% emissions reduction, America passing a climate and energy Bill and the securing of an international treaty either at Cancun or as soon as possible afterwards? Does he also agree that domestically we need to play our part? That means maintaining industrial policy support for the low-carbon transition. Looking ahead to his right hon. Friend the Chancellor of the Exchequer’s Budget next week, if we are to make the low-carbon transition ourselves, and send out a clear signal, it is important that the investments promised by the previous Government to Sheffield Forgemasters and Ford, and for offshore wind, go ahead as soon as possible.

The gulf oil spill is an environmental wake-up call for the world. Just as the banking crisis changed the rules of the game for financial services, so this disaster must change the rules of the game across the world for energy policy. That requires strong leadership—including being tough with our allies—in defending British interests, in pushing the United States for a Bill on climate change and in charting a course towards the low-carbon transition. If the Government provide that strong leadership for BP employees, pension fundholders and our environment, we will of course support them.

[Chris Huhne]

I am grateful to the right hon. Gentleman, not least for the manner in which he has approached this matter. There is not a lot of difference in our approaches. We have seen some examples of what can happen if people attempt to flam up the rhetoric rather than dealing with the issues in a measured way.

The right hon. Gentleman is clearly absolutely correct to say that BP was involved with other partners in Deepwater Horizon. BP’s interest is 65%. In addition, the subcontracted rig was from Transocean, which is a well known and respected United States company, and was using technology produced in the United States. I understand that the blow-out preventer was produced by Cameron International to American petroleum industry standards.

All that said, it is absolutely crucial to let the full investigation take its course. We simply do not know exactly what the events were on Deepwater Horizon, not least because, tragically, so many of the people who could have told us what happened are no longer alive. We need a proper process of investigation if we are to learn the lessons.

I have already said something about the difference in the regulatory regime between us and the United States. The most important feature is the decision we took after the Piper Alpha disaster to separate licensing and operational regulation from the health and safety side, but that is certainly not the only lesson that will be learned from this disaster. When we have a clearer understanding of exactly what went on, I am sure that both technical and regulatory responses will be required. In the interim, we have taken the step of improving inspections.

Precisely because we have already announced an increased number of inspections, I do not believe it would be appropriate to stop the drilling west of Shetland. Our regime has been shown to be robust, but we need to go on learning the lessons.

On the right hon. Gentleman’s final point, I very much agree that we need to accelerate the move towards a low-carbon economy. Whatever the risks involved with, for example, offshore wind, onshore wind, tidal stream or indeed a future generation of wave technology, they are not in the same order of magnitude as the sort of risks that we are clearly running by drilling in increasingly hostile environments around the world, as we attempt to find the last hydrocarbons. That message is important. This is an environmental wake-up call. Hydrocarbons—oil and gas—do and will play a crucial part in our transition. We know from our economic history that we cannot suddenly switch off steam power, for example, and move to electricity—these things take time—but it is certainly an important warning to us that there is no time to lose in trying to make that transition as quickly as possible.

[Malcolm Bruce (Gordon) (LD)]

I thank the Secretary of State for his statement and for the tone in which he answered the right hon. Member for Doncaster North (Edward Miliband), which will give reassurance that we are operating in two different environments. As someone who represents a constituency that hosts BP’s North sea operational headquarters and more oil and gas-related jobs than any other constituency in the UK, may I say that we need to recognise that these mistakes in a very difficult environment are the responsibility of the whole industry, which will have to solve them in partnership with the regulatory authorities? The 25 billion barrels of oil and gas still to be got out of the North sea need to be got out, but we must ensure that that is done in circumstances where health and safety, the environment and partnership technology all work together.

[Chris Huhne]

I am grateful to my right hon. Friend for the question. He is absolutely right. This industry is crucial for us, and it is in everyone’s interest, not least the people who work and invest in the industry, that the standards of environmental safety and health and safety should be as high as we can possibly make them. I can assure him that we intend to make that the case.

[Miss Anne Begg (Aberdeen South) (Lab)]

At one stage last week, I had great fear that we were talking ourselves into a second crisis that would have undermined BP and, indeed, the whole offshore oil and gas industry, but I am glad that things seem to have calmed down over the weekend. Partly to restore faith, BP and its partners must know what they need to do to stem the flow of oil and what their responsibility is with regard to the clean-up, and understand and be able to quantify just how much it will cost to make the reparations that are obviously needed for those on the shore whose livelihoods have been devastated.

[Chris Huhne]

The hon. Lady is absolutely right. I spoke yesterday to BP chief executive Tony Hayward, and I spoke this morning to another board member, Iain Conn. Until those conversations took place, I had not realised the extent of the co-operative effort across the industry in attempting to find a technical solution. Frankly, it is in the interests of all the oil and gas companies that operate in the gulf of Mexico and, indeed, more widely to ensure that they can reassure their publics and the people who are affected in Louisiana and the other coastal states that there are genuine technical solutions. That is one of the encouraging signs of what is now going on.

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

I reinforce the Secretary of State’s welcome recognition of the human tragedy involved in this disaster. This tragedy has a human face as well as an environmental one. Although the President was reassuring us that he did not intentionally want to affect BP’s finances, he may have unintentionally done so. If we can ensure effective co-operation across countries to make sure that the focus is on finding a solution to the problem, that would be most welcome. Specifically, for the north-east of Scotland, his reassurance on the safety regime that applies to the North sea is most welcome—in particular, that our blow-out preventers are subject to rigorous testing and inspection to ensure that such an incident could not happen here.

[Chris Huhne]

My hon. Friend is absolutely right to draw attention to that. In fact, both in our regime and in the United States regime, blow-out preventers are checked regularly. One of the mysteries appears to be the fact that the blow-out preventer was checked within two weeks of the disaster and still failed. Clearly, that is one of the things that the investigation must get to the bottom of. One of the things that we will need to learn about operating at such depths and pressures is whether yet further fail-safe mechanisms need to be built into the blow-out preventers, and we will certainly look at that. He is also absolutely right to draw attention to the human tragedy and, indeed, the importance of maintaining safety for all those who work in the industry.

[Mr Frank Doran (Aberdeen North) (Lab)]

I welcome the Secretary of State’s statement, particularly the extra resources for technical investigations, but it is not only the technology that is important. BP has identified that three of the seven causes of the spill that it is aware of so far were the result of people ignoring warning signs. That tends to happen when people are badly trained, inexperienced or afraid to challenge their superiors, and it is one of the key lessons that we learned from the Piper Alpha tragedy. Is the Secretary of State aware that over the past few years we have made huge progress in the North sea in involving workers? There are three trade union representatives on the new body that has been set up to examine the spill, which is extremely important. However, there is a major problem in the drilling industry, which has—how shall I put it?—an outdated attitude to employment relations. Those employers include Transocean, which is involved in this issue. Until the problem of worker involvement in the drilling industry in the North sea is sorted out, we will continue to have problems.

[Chris Huhne]

I thank the hon. Gentleman for his question. I am certainly happy to look at the issues that he raises. It is important to have trade union oversight of these matters in cases where the companies are unionised; it provides another perspective and a guarantee to other employees that safety will be given the attention that it deserves.

[Duncan Hames (Chippenham) (LD)]

As with Railtrack and the Hatfield rail tragedy, is not a critical lesson from the explosion on this rig that companies who outsource environmental and safety-critical processes fail to take their responsibilities seriously when it really counts—before disaster strikes? Railtrack lost its licence to operate. What discussion will my right hon. Friend’s Department have with businesses in the energy sector to prompt them to review their corporate governance and get a grip on their direct environmental responsibilities, instead of simply spouting the rhetoric of corporate social responsibility?

[Chris Huhne]

I thank my hon. Friend for that acute and well directed question. There is an issue about the extent of outsourcing, which has certainly gone on apace in the oil and gas industry; for example, in subcontracting to companies such as Transocean. That may be one of the lessons that comes out of the inquiry. However, there is another side to the issue: the oil majors can argue that the level of expertise of a company such as Transocean may be higher than their own, precisely because it is operating so many rigs and contracting to so many oil majors. That will clearly be an issue for the investigation. All the big oil companies will be much more aware of the potential reputational damage that can be inflicted by an environmental disaster of this kind. I think that they will take that on board, and I hope that it will provide an additional incentive to make sure that corporate governance, including its ethical dimension, is strengthened.

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

I welcome the Secretary of State’s response to my hon. Friend the Member for Aberdeen North (Mr Doran). I draw his attention to a helpful written answer from the Minister of State, Department of Energy and Climate Change, the hon. Member for Wealden (Charles Hendry), on 7 June, in which he revealed that there are some 10 Transocean rigs registered and operating in UK waters. Two are registered in the Marshall Islands, two in Panama, three in Liberia and two in Vanuatu. Given the obvious public concern about where they are registered, has the Secretary of State considered ordering an immediate review of the safety of those rigs, and if not, why not?

[Chris Huhne]

I thank the hon. Gentleman for that question. That is precisely why, when we conducted the urgent review of our regime, we thought it appropriate to increase immediately the number of environmental inspectors who can go on to rigs and ensure that the rules and regulations that are set on safety, including environmental safety, are properly applied. That is exactly what we have done. Frankly, much of the world’s shipping is registered in what often seem to be exotic jurisdictions, but the key point surely has to be that anybody operating in UK waters, whatever the basis of the registration, should operate to UK standards and must be properly inspected, and we will not take any risks. That inspection is under way, and there is an increase in the pace of inspection as I speak.

[Mr Jim Cunningham (Coventry South) (Lab)]

I thank the Secretary of State for his statement. On a more positive note, has he, or a senior colleague of his, considered a visit to the area in question in the United States, to show a bit of good will, and to try to take the heat out of the situation between the United States and us?

[Chris Huhne]

I am grateful to the hon. Gentleman for his suggestion. I have to say that some of the reporting back that I have heard from the United States suggests that another British voice turning up on television screens might not, at this stage of the game, have quite the effect that he suggests. As he has probably seen in the press, BP’s efforts are now being directed by one of its American executive directors. We do not want any element of national identity to creep into the issue. BP is, as I have said, effectively an Anglo-American company. It was, after all, previously BP Amoco, and Amoco was an American oil company. It is important that any television viewer in the United States realises that BP will go on playing a very important part in the economy of the US, and the UK, for many years to come.

[Ian Paisley (North Antrim) (DUP)]

Congratulations to you, Mr Deputy Speaker.

I thank the Secretary of State for his statement and for bringing some calmness to the rather choppy waters of the last week. On the conversation that took place between the Prime Minister of this country and the President of the United States, was there any recognition, on the American side of the conversation, that deep-water drilling is partially a direct result of America’s insatiable demand for more and more oil, or that the commentary against BP was doing intolerable damage to a company here, and was grossly unfair? Was there recognition that, in the parlance of Northern Ireland, the Americans should wind their neck in and recognise that such comments are doing damage to our companies?

[Chris Huhne]

The hon. Gentleman has to understand what would happen in this country if there were an oil spill off the coast of Northern Ireland on the scale of that at Deepwater Horizon. He would be among the first to insist that we did everything that we could to stop it. It would be an absolutely enormous environmental disaster. Let me put the scale of the oil spill in some sort of perspective. I tried a comparison with Exxon Valdez, but we might think back to our experience with Piper Alpha. The situation was not exactly the same, because the problem was largely a gas well, but in Piper Alpha’s case, we were looking at 200 barrels of oil escaping a day. In the case of Deepwater Horizon, the latest estimate is 40,000 to 50,000 barrels a day. Given the sheer scale of the problem, we fellow politicians have to understand what our reaction would be if that were going on in our waters.

[Paul Blomfield (Sheffield Central) (Lab)]

May I press the Secretary of State for a fuller answer to the last question asked by my right hon. Friend the Member for Doncaster North (Edward Miliband) on investment in low-carbon technologies? Like my right hon. Friend, I welcome the Secretary of State’s statement of the importance of the expansion of low-carbon technologies, but that needs to be matched by practical action, particularly—in the context of Sheffield—by ending the uncertainty around the financial support for Sheffield Forgemasters. Does the Secretary of State support me in wishing to see a speedy end to that uncertainty and confirmation of that financial support?

[Chris Huhne]

I thank the hon. Gentleman for his question. When I was studying politics, philosophy and economics at Oxford somewhat before the hon. Gentleman, I was told that socialism involved the language of priorities. On the basis of the public expenditure commitments undertaken by the Government in the past six months, including in respect of Sheffield Forgemasters, I do not recognise a Government who were making choices about hard-earned taxpayers’ cash. As we have just heard from the Chancellor of the Exchequer, the Treasury had pencilled in £44 billion worth of cuts without finding a single one. It is inevitable that, having inherited the legacy that we have and the scale of the Budget deficit, this Government have to review our priorities and identify crucial projects to go ahead with and those that are less important. That is a process that we continue to undertake.

[Mr Michael Meacher (Oldham West and Royton) (Lab)]

Given that we are at or very near peak oil annual capacity, that conventional oil will increasingly be available only from very deep sites that are extremely risky such as the gulf of Mexico, and that unconventional oil such as Canadian tar sands involves unacceptable economic and climate change costs, what plans does the Secretary of State have to move the process forward, as I am sure he wants to do, to diminish oil consumption drastically before there is another horrendous catastrophe or the price of oil spikes uncontrollably?

[Chris Huhne]

I thank the right hon. Gentleman, who has a long and honourable record of interest in these issues. We share many instincts in our approach to them. We will present a series of proposals over the next year, which will attempt to accelerate the process of moving to a low-carbon economy. For my Department, the centrepiece of the Queen’s Speech is the energy saving Bill, which will attempt to put forward a comprehensive solution for retro-fitting in our existing housing stock. As the right hon. Gentleman knows, saving energy is by far the most low-cost means of closing the gap as regards our energy use and energy production. We also intend to accelerate the production of low-carbon sources of energy, including renewables, on which we will introduce measures. This is a time of transition, and nothing can be done overnight. We are talking about enormous investments that cannot suddenly be switched off; others cannot be suddenly switched on. We need a clear route map to a low-carbon economy which reduces our carbon emissions by the amount called for by the Climate Change Act 2008—80%—and we intend to make sure that we have a credible route for getting there.

Point of Order

Monday 14th June 2010 Commons Chamber

17:32

[Mr Wayne David (Caerphilly) (Lab)]

On a point of order, Mr Deputy Speaker. Yesterday various ministerial statements were made to the media about the early departure of the Chief of the Defence Staff. Many of us believe that it would have been far better for a statement to be made to the House first. May I ask you to use your good offices to make representations to the Government to see whether that would have been more appropriate?

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

The hon. Gentleman has raised the point, and rightly so. The Speaker was not notified of such a request. I dare say it will now have been taken on board.

UK Policy on the Middle East

Monday 14th June 2010 Commons Chamber

17:33

[The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Alistair Burt)]

I beg to move,

That this House has considered the matter of UK policy on the middle east.

May I say, Mr Deputy Speaker, as a north-west chum of years past, that it is a pleasure to see you in the Chair.

As the Minister responsible for the middle east, it is an enormous privilege for me to open this general debate. It is a pleasure also to welcome the shadow spokesman, the hon. Member for Bury South (Mr Lewis). We, too, go back a long way to our time together in Bury, and we have always enjoyed the warmest of relationships, as I am sure we will again. I have already had the benefit of his advice, as he recently held my post, and I look forward to his contribution.

Let me say a little about housekeeping for the debate. Those of us who have been in the House for some time know that in short debates the risk is that Front Benchers occupy a great deal of the time. I will do my best to confine scripted remarks to about 15 minutes. I will take a handful of interventions, but try to conclude within 20 minutes or so in order to give maximum time for Back-Bench contributions. That will mean a relatively short winding-up speech, with some written replies to colleagues. It is a short debate and, in deference to the Speaker’s request, we want to try to ensure that Front Benchers are not too heavily involved. I hope the House will appreciate that. If I am not able to go into everything in as much as detail as Members would like, and if they want to pursue the subject of Gaza, for example, I commend to them the debate on that issue tomorrow in Westminster Hall. I also intend to meet regularly, on formal and informal bases, colleagues who have an interest in the middle east, as I know many do. With that bit of housekeeping out the way, I shall move on.

The middle east is a topic of great concern to many hon. Members and of great importance to the security, economic and political interests of the United Kingdom. However, the middle east is more; it is an area rich in culture, heritage, history, faith and religion, in which Members have a wonderful opportunity to engage. The world sometimes spends rather too much time on the region’s conflicts and concerns, instead of on the great joys, history and cultural gifts that it has given. The Government intend to ensure that we are conscious of the opportunities and great heritage that the middle east brings to the world, as well as spending time dealing with the inevitable human problems that have been centred on the area for so long.

The Foreign Secretary recently said:

“It is one of the strengths of this country that a strong thread of bipartisanship runs through large areas of foreign policy.”—[Official Report, 26 May 2010; Vol. 510, c. 174.]

That is particularly true of the middle east, and quite rightly, given its international importance. That is why this Government will pursue active partnerships with the people and countries of the middle east to achieve security, prosperity and peace for Britain and for the peoples of the region.

Let me spell out in simple terms, but in no particular order, the Government’s aims and objectives for the middle east. We will work to resolve the Arab-Israeli conflict. The only long-term solution to the conflict is a secure Israel living alongside a sovereign and viable Palestinian state, with Jerusalem the future capital of both states, and with a fair settlement for refugees. We will continue to press for progress, working with the United States and through the European Union. We will also continue working with our international partners to secure changes that help lift Gaza’s closure. Let the House be in no doubt: we wish to engage with as much energy as we can in the middle east peace process, because we recognise its huge importance to so many other issues that focus on the region and affect the world.

[Several hon. Members]

rose—

[Alistair Burt]

The first voice that I heard was that of my hon. Friend the Member for Basildon and Billericay (Mr Baron).

[Mr John Baron (Basildon and Billericay) (Con)]

In congratulating my hon. Friend on his appointment, I refer him to the proverb, “To every man with a hammer, the problem always seems a nail.” Will he do what he can, and get his Department on board, to try to impress on the Israelis the fact that Hamas is more than just a terrorist organisation? It is an idea—a frustration—borne out of many disillusioned and disfranchised Palestinians, and the best way of defeating an idea is not by using force but by coming up with a better idea, such as an equitable, two-state solution.

[Alistair Burt]

My hon. Friend makes a point that almost immediately illustrates the complexity of the area. Whatever Hamas might be as an expression of a movement, it also represents a repressive, authoritarian force which has had a grip on Gaza for too long and held Gilad Shalit unfairly as a hostage for too long. In illustrating that point, I note the clear sense that there must be some movement in the middle east peace process, involving all parties and, inevitably, the slow steps towards progress which invite compromise. Of that, we wish to see more in the future. The Government’s position on dealing with Hamas remains the same as the previous Government’s, requiring as it does an adherence to Quartet principles before it can move. I do not see any change in that position.

[Emily Thornberry (Islington South and Finsbury) (Lab)]

rose—

[Jo Swinson (East Dunbartonshire) (LD)]

rose—

[Alistair Burt]

I shall give way, first, to the hon. Member for Islington South and Finsbury (Emily Thornberry).

[Emily Thornberry]

Does the hon. Gentleman believe that the proposed Israeli inquiry into the terrible events of 31 May will be “credible, rigorous and impartial”? What discussions have the Government had with the Americans on that issue?

[Alistair Burt]

I thank the hon. Lady for her inquiry. We have had a lot of conversations, both with the Americans and the Israeli Government. We are keen proponents of the United Nations Security Council resolution, which was adopted quickly and called for exactly what the hon. Lady asked about—an independent and impartial inquiry. The international element is necessary to ensure credibility. At present, we believe that there is no reason why the inquiry announced by Israel today, with the external component that includes Lord Trimble, should not meet the requirements of the world to provide the answers necessary to the inquiry. That is an important standard, to which we will hold.

[Richard Burden (Birmingham, Northfield) (Lab)]

rose—

[Sir Gerald Kaufman (Manchester, Gorton) (Lab)]

rose—

[Jo Swinson]

rose—

[Alistair Burt]

I shall take only one more intervention at this stage, then I shall make progress; otherwise, the remarks that I made at the beginning will be completely otiose. I give way to my hon. Friend the Member for East Dunbartonshire (Jo Swinson).

[Jo Swinson]

I thank the Minister for giving way and welcome what he has said about support for a two-state solution and involving our international partners. No matter what we do as the UK, it is vital that the US should also be involved in trying to unlock the peace process, which seems to have ground to a halt. Can the Minister tell us whether that was one of the issues discussed by the Prime Minister and President Obama on the telephone and whether there will be a renewal in US interest in trying to kick-start the peace process?

[Alistair Burt]

We very much welcome the kick-start that the proximity talks pointed to a few months ago. President Obama made it clear that a revitalisation of the peace process was one of his key objectives. The recent tragic incident in Gaza has highlighted once again the importance of getting things moving—not only in that area, but in respect of the peace process as a whole. My hon. Friend can be assured that the Prime Minister and the President think as one on that issue.

I shall make some progress. We will work with all our friends and partners across the region to ensure that they are free from terrorism and instability which is a direct threat to their security. We will take a broader approach to our relations with north Africa and the Gulf, supporting civil society and business links and aiming to be the partner of choice for commercial and investment links. We currently export £15 billion-worth of goods and services to the region annually, offering the best of British expertise, innovation and creativity to support the massive programmes of development under way.

We will remain engaged in Iraq. Iraq is a pivotal state in the middle east. A stable, prosperous, well governed and politically moderate Iraq is important for Iraqis, the wider region and the UK’s strategic interests. All in this House are proud of the role that the United Kingdom armed forces have played to help bring about the progress seen so far in Iraq, and we are committed to ensuring that their efforts are built on.

[Mr Tobias Ellwood (Bournemouth East) (Con)]

Will the Minister give way?

[Alistair Burt]

I ask my hon. Friend to give me a moment.

In the long term, all those partnerships will flourish if we can overcome the social and economic hurdles that the region faces. In the face of the complex challenges, our shared aim for middle eastern and UK interests alike must be good governance by stable states with growing social, economic and political participation. The Government will champion that approach while upholding our belief in human rights.

There are also important opportunities to work more closely with partners in the region on shared interests. We are well placed to work in partnership with the countries of the middle east in a way that benefits their people and ours. For example, the countries of the middle east will continue to be essential suppliers of the world’s energy needs. There is similarly mutual benefit in the flows of other trade and investments between Britain and the region. This Government will work closely to support and extend those links, facilitating trade missions and signing investment and promotion protection agreements. However, we will also work with the countries of north Africa to reduce the damage done to individuals and economies by illegal immigration, both here and there. By working with our partners against the threat from radical extremism, we are all stronger and more effective.

Now I want to cover a small series of significant issues, including Iraq.

[Mr Ellwood]

rose—

[Alistair Burt]

I ask my hon. Friend to wait a moment.

By working with the key countries in the middle east and the international bodies based there we can together make more of an impact on conflicts and other challenges both within that region and beyond. Work to resolve the Arab-Israeli conflict is a foreign policy priority for this Government. As I said earlier, the only long-term solution to the conflict is a secure Israel living alongside a sovereign and viable Palestinian state. We will continue to press for progress, working with the US and through the EU, while supporting Prime Minister Fayyad’s work to build the institutions of a future Palestinian state.

The tragic events off the coast of Gaza last month were very serious and captured the world’s attention—the House has already discussed the issue during a statement and will discuss it tomorrow in Westminster Hall—but they should not be viewed in isolation. They arise from the unacceptable and unsustainable situation in Gaza, which is a cause of public concern here in the UK and around the world. It has long been the view of the British Government, including the previous Government, that the restrictions on Gaza should be lifted. It is a tragedy that that has not happened, and we hope soon to see progress to change the situation.

We call on the Government of Israel to freeze all settlement activity. As the Foreign Secretary has said, the settlements are illegal and an obstacle to peace. It is also essential that there is unfettered access to meet the humanitarian needs of the people of Gaza in order to enable the reconstruction of homes and livelihoods and to permit trade to take place. At the same time, the rocket attacks from Gaza must cease, and Hamas must release Gilad Shalit, who is now entering his fourth year in captivity.

[Mr Denis MacShane (Rotherham) (Lab)]

I welcome the Minister to his job. There is nothing in his speech so far that I would disagree with. In 2009, 96 humanitarian aid workers were gunned down in different conflict zones. Moreover, the death of the nine Turkish gentlemen is unacceptable. However, why does the United Nations not demand inquiries in every other country where humanitarian aid workers are slaughtered?

[Alistair Burt]

The right hon. Gentleman might reasonably submit that that is a question for the UN. In this particular case, though, I think that we responded entirely properly, in terms of the international concerns, by putting the primary responsibility on Israel to conduct its inquiry, as we are aware that it has in the past on issues such as Lebanon, and ensuring the international dimension for the security and the confidence of all. The important point is not to linger too much on the type of the inquiry but to consider more what it is about and how to move the process on so as to ease the situation in Gaza.

[Richard Burden]

Will the hon. Gentleman give way?

[Alistair Burt]

No, I will not. I am conscious that there is one more intervention to come. If I am to stick to what I said earlier and give Back Benchers time, I am afraid that that means a restriction on interventions.

The proximity talks that are under way are now more important than ever. The Government will make it an urgent priority to give British diplomatic support to those efforts, as well as supporting the efforts of the Quartet and inspiring the European Union. The UK is a committed friend of Israel, and a friend to the region. We believe that, in this particular context, the approach that I have outlined is the best that a real friend can provide, for Israelis and Palestinians alike.

Let me turn to Iran. There is grave concern among the international community about Iran’s failure to address concerns about its nuclear programme and the role that it plays in creating instability in the middle east.

[Jeremy Corbyn (Islington North) (Lab)]

rose—

[Alistair Burt]

I will proceed, if I may.

We remain resolved to address these concerns through a twin-track process of preventing a nuclear-weapons-capable Iran while reaching out with an offer for constructive engagement. We cannot allow Iran to act with impunity. I welcome the action that the UN Security Council took last week. The new resolution is an important statement of international resolve to prevent Iranian nuclear proliferation. It intensifies peaceful and legitimate international pressure on Iran to change course and restore the trust in its intentions that is so badly lacking. However, it is a twin-track approach. The resolution also makes it clear that the E3 plus 3 remain ready to meet Iran at any time for substantive negotiations on the nuclear issue.

In addition, I should like to condemn the human rights situation in Iran, which is appalling. Amnesty International reports that more than 5,000 people were arrested following the June 2009 protests, and hundreds remain in detention. The courage shown by the protesters on Iran’s streets over those months clearly demonstrates the strength of the desire for democracy, human rights and freedoms among the Iranian people. The Iranian Government have responded to that desire for democracy with violence, brutality and oppression. This weekend, the opposition were again refused permission to organise demonstrations on the anniversary of the elections. This House will not forget those ordinary Iranians who stood up for their rights last year. We will continue to work with our international partners to shine a light on Iran’s deteriorating human rights record and hold the Iranian Government to account. On Thursday last week, I met members of the Baha’i faith ahead of the trial of seven of their leadership last Saturday. Iran’s flagrant disregard of even its own laws on due process and respect for human rights should not be accepted by the international community, which should highlight and scrutinise that at every opportunity.

[Jeremy Corbyn]

I thank the Under-Secretary for giving way and compliment him on his new position. I endorse his comments about the need for human rights in Iran, but may I take him back to his work at the non-proliferation treaty review conference, which rightly condemned the potential development of any nuclear weapons in the region, but, for the first time, mentioned the existence of Israel’s nuclear weapons? Where exactly will the process go now to achieve the aim of a nuclear-free middle east, which must involve Israel’s possession of nuclear weapons?

[Alistair Burt]

This country has consistently asked Israel to join the non-proliferation treaty as a non-weapons-holding state. Israel was mentioned in the non-proliferation treaty review conference in the context of the desire to move the resolution on a middle east free of nuclear weapons and, indeed, weapons of mass destruction. The resolution looked forward to a conference in 2012 on the subject. The conference was a success in reaching the agreement that it did. It is good to have moved the process on a little further, but much is to be done before the conference is held. We all support a middle east that is secure for all its countries, and an understanding of its weaponry is clearly a key part of that.

[Mr Baron]

Will my hon. Friend give way?

[Alistair Burt]

No, my hon. Friend intervened earlier. I repeat that I am pressed for time, and I need to get my hon. Friend the Member for Bournemouth East (Mr Ellwood) in before finishing.

Let me mention Yemen briefly. We are continuing to work with other middle east nations such as Egypt and Jordan actively to promote increased stability in Yemen, because we know that al-Qaeda looks to exploit instability where it can. In Yemen, that instability is caused by wider social and economic problems. We welcome the fact that the United Arab Emirates and Jordan are co-chairing the two working groups of the Friends of Yemen. For our part, we will continue our direct, bilateral assistance to the Government of Yemen, which aims to reduce poverty and build the capacity and capability of the Yemeni state.

We will also remain engaged in Iraq. In many respects, Iraq is a nation changed for the better. There have been significant improvements in security, the economy and politics. Iraqis now have control over their own destiny and have embraced democracy, voting in their millions in March’s national election. Now that the election result has been ratified, Iraq’s leaders must work together to form an inclusive and effective Government.

I am sure that the House is proud of the extraordinary role that the United Kingdom’s armed forces have played in making Iraq a better place. We are right to commit to building on their legacy by supporting the Iraqi Government and all the people of Iraq as they face the challenges of maintaining security and strengthening their new democracy. We will also work to deepen our close bilateral relationship to our mutual benefit.

[Mr Ellwood]

I welcome you to the Chair, Mr. Deputy Speaker. It seems to fit you perfectly and I do not know why it has taken so long for you to get to that position, but it is great to see you there.

There seems to be a duality of approach to Iraq, with the Kurdistan area moving at a different speed from the rest of Iraq. As my hon. Friend knows, Kurdistan has advanced much quicker than the rest of Iraq because it was not so involved in the wars. There are no direct flights from the UK to Erbil in Kurdistan—or, indeed, to Baghdad. If any businesses operate in the north in Kurdistan, they are prevented, because of internal politics, from getting involved in business opportunities in Baghdad. I urge my hon. Friend to visit that area and try to resolve the problem that one either supports Kurdistan or greater Iraq.

[Alistair Burt]

My travel itinerary is already starting to look interesting, but I appreciate any new opportunities that come my way and any new suggestions from colleagues. I have noted my hon. Friend’s with specific purpose, so I am grateful to him for raising it. He has been particularly involved and interested in those areas for many years and I know that I shall value his advice in due course.

[Mr Andy Slaughter (Hammersmith) (Lab)]

Will the Under-Secretary give way?

[Alistair Burt]

No, because I am now pushing the time limit that I set myself. To be fair to other hon. Members and to stick to what I said, I will wrap up.

It has necessarily been a whistlestop tour because of the constraints of time. I am sure that we will return to the subjects often. One of the Government’s first foreign policy priorities will be to give new momentum to our relationship with the Gulf. We also want to build broader relationships with Europe’s close neighbours in north Africa. We can do that by elevating our personal links, pursuing a deeper and more nuanced partnership with Islam and continuing our dialogue on commercial, cultural and education links—and, I would go so far as to say, parliamentary links. There is much to be gained from relationships between legislators in different countries. By doing all that, the UK will be able to provide constructive partnership on issues that are core to our national interest.

The Government have already made it clear that, in our pursuit of an enlightened national interest, we intend to be a force for good in the world to seek the best for our citizens and society, not only because it is good for the people but because it is the right thing to do. In pursuit of that policy, we will uphold our belief in human rights, championing democracy and the rule of law, and working tirelessly for peace. Nowhere will that be more important than in the middle east. I look forward to colleagues’ support and assistance in taking on that particular role.

17:55

[Mr Ivan Lewis (Bury South) (Lab)]

I welcome you to your new role, Mr. Deputy Speaker. I congratulate the Under-Secretary of State for Foreign and Commonwealth Affairs, the hon. Member for North East Bedfordshire (Alistair Burt), on his appointment. As he said, we have known each other for more than 20 years—I know that I do not look old enough. We are both proud sons of Bury, the birthplace of Robert Peel, the home of the internationally acclaimed authentic Bury black pudding and a town that is immeasurably strengthened by its religious and cultural diversity.

The Under-Secretary is still remembered with great affection by his former constituents, irrespective of their political affiliations. However, it comes as little surprise that he was not given the Europe brief. His opposition to the views of the hon. Member for Stone (Mr Cash) is matched in intensity only by that of my right hon. Friend the Member for Rotherham (Mr MacShane). As the Under-Secretary survived a prolonged—some would say indecent—period as Minister with responsibility for the Child Support Agency in the 1990s, the Prime Minister clearly took the view that responsibility for the middle east would be a cakewalk in comparison. More seriously, I know that the Under-Secretary will carry out his responsibilities with commitment, integrity and sensitivity.

I also wanted to welcome the Under-Secretary of State for Foreign and Commonwealth Affairs, the hon. Member for North West Norfolk (Mr Bellingham), to his post. Now that he has returned to his place, I can do that.

I want to take the opportunity to place on record my appreciation of Foreign and Commonwealth Office officials, especially those in my former private office, for their dedication and professionalism. Being Minister of State at the Foreign and Commonwealth Office was a tremendous privilege and an awesome responsibility. Their support was crucial in enabling me to do my job effectively, and I owe them a great debt of gratitude.

I welcome the opportunity presented by this timely debate. The middle east ignites strong passion in hon. Members of all parties and in communities up and down the country. In my contribution, I want to reflect on those passions and deal with the issues that must be addressed urgently.

The middle east peace process, Iran’s nuclear threat, the new Iraq and a fragile Yemen are all pieces in a jigsaw that will determine whether a positive future can ever dwarf the tragedies and conflicts of the past. As my right hon. Friend the shadow Foreign Secretary often says:

“The most important word in politics is ‘Future’.”

Solutions will be found only through better leadership in the region, supported by co-ordinated and effective international action. However, for several reasons the middle east is also crucial to Britain’s national interest. They include security and stability, energy supply, the attachments of many of our diaspora communities and historic links, which give us special responsibilities.

The central challenge remains the relationship between Israel, the Palestinians and the Arab world. I want to set my response to that challenge in the context of a question that I was asked several times in my ministerial capacity during interviews on al-Jazeera: how could I, as a Jew, undertake my role as British Minister for the middle east independently and objectively? Putting aside the appropriateness or otherwise of the question, my answer was and is straightforward. I am proud to be a friend and supporter of Israel, as well as someone who believes passionately in the right of the Palestinians to dignity, freedom and statehood. Too often in the House and outside, people are required to make a choice, and it does not and should not have to be like that. I sometimes wonder whether there would be more light and less heat if friends of Israel and friends of Palestine came together to form friends of peace in the middle east. In that way, people would be forced to confront their prejudices and certainties and be challenged to build mutual respect, rather than replicate the division and bitterness that have characterised the region for far too long.

The Labour party—in government and opposition—has long championed a two-state solution: a viable, contiguous Palestinian state alongside a secure Israel. Such a solution will be possible only if we demonstrate a sensitivity to and understanding of the fears and insecurities of ordinary Palestinians and Israelis. I have witnessed for myself the anger and injustice felt by Palestinians on the west bank as their daily lives are interrupted by Israeli checkpoints and a security barrier that, in places, physically divides communities and therefore families. Occupation dehumanises both the occupied and the occupier. I also know families who have been traumatised by the impact of losing a loved one at the hands of suicide bombers who have wreaked carnage in towns and cities in Israel. I visited Sderot, where children live in fear of the next rocket attack from Gaza. Terrorism is no more legitimate in Tel Aviv and Haifa than it is in London and New York.

Palestinians yearn for freedom and statehood, Israelis for the certainty and guarantee of security. The political issues to be resolved are well known and frequently debated in this Chamber, but I want to spell them out clearly, with less ambiguity than in the past. What would a fair and just settlement actually mean? First, it would mean borders that ensured that the two states—Israel and Palestine—each had a volume and quality of land consistent with 1967. That would require land swaps, the principle of which has been accepted in previous negotiations.

Secondly, it would mean not a divided but a shared Jerusalem that can be the capital of both Israel and Palestine. The conventional wisdom is that in that scenario, the holy sites would have to come under some sort of international jurisdiction, but I disagree. An authentic, meaningful peace would mean that those sites should be the shared responsibility of the two states.

Thirdly, a settlement would mean justice for Palestinian refugees. They should have the right to return to a new, sovereign Palestinian state, and fair compensation should be paid to those who had homes and land within the borders of Israel.

Fourthly, as offered by the Arab League, a settlement would mean normalised relations between the Arab world and Israel. That cannot mean simply an exchange of ambassadors; it must also mean a commitment to end all support, financial and otherwise, for the military and terrorist activities of Hamas and Hezbollah, as well as a commitment to end the promotion of anti-Semitic and anti-Israeli propaganda via state-controlled media and education systems. An agreement to begin work on a framework for a middle east economic zone would be the strongest signal that the conflict is really over and that the focus has shifted to building a better future.

Fifthly, the settlement must be agreed as a full and final resolution of all contentious outstanding issues. Resolving those five issues in a comprehensive and just settlement would address positively the hopes and fears of the mainstream majority of both Palestinians and Israelis. It is true that the detail must be negotiated and agreed by the parties, but we should no longer be cautious when it comes to spelling out the parameters of such a settlement.

[Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)]

How optimistic is my hon. Friend that the Fayyad plan to build a Palestinian state within two years will be successful?

[Mr Lewis]

I shall come to that, but I believe that this country and the international community should give that plan every support. Prime Minister Fayyad, and indeed President Abbas, have done a remarkable job in the west bank on security and economic development, so we should give as much support as we can to the Fayyad plan.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

I pay tribute to the hon. Gentleman for the work he did as a Minister and for his clear statements this afternoon. Does he agree that it is vital that all parties understand that we need a secure middle east not just for Muslims and Jews, but for Christians and for people of other faiths and none across the region, and that the growing pressure for conflict prevention and resolution in the Parliaments and Assemblies of the middle east is one way forward? If we engage people on the ground on conflict prevention, we could do as much good as getting the world’s superpowers to try to solve the problem from afar.

[Mr Lewis]

I agree entirely with the hon. Gentleman. One lesson we should have learned from a long history of conflicts all over the world is that preventive work, both at a political and a people level, is far more effective than intervening when things go wrong.

[Richard Ottaway (Croydon South) (Con)]

Does the hon. Gentleman accept that he would not achieve his fifth point unless he got a resolution on his first four points? There can be no overall settlement unless the aspirations on both sides of the argument can be met at the same time.

[Mr Lewis]

The hon. Gentleman has a perfectly common-sense perspective. As all hon. Members know, although setting out the parameters is important, in a negotiation of such complexity, when the stakes are so high and when public opinion on both sides matters, there must be the necessary compromise. If non-negotiable matters are not resolved, no lasting and just settlement will be accepted by the people on both sides.

[Jeremy Corbyn]

Does my hon. Friend agree that a good step forward would be if Israel released the substantial number of Palestinian parliamentarians who are still held in prison, several years after the election? Otherwise, the message is that democracy does not work, and it is like saying to the Palestinians, “Your leaders get arrested and taken away, and therefore you have no representation.” The anger at that in Gaza and the west bank is very serious indeed.

[Mr Lewis]

We need to take each case on its merit, and look at whether any of those individuals committed criminal offences. If not, those people should of course be released immediately, as a confidence-building measure towards progress in the peace process.

My right hon. Friend the shadow Foreign Secretary has welcomed the current proximity talks. As Foreign Secretary, he played a prominent role in supporting the efforts of President Obama, Secretary Clinton and George Mitchell to kick-start meaningful negotiations. However, the Opposition want to see direct negotiations begin without further delay. The success of such negotiations will be more likely if strong US leadership is supported by an enhanced role for the Quartet and a core group of Arab League states to provide political support to President Abbas.

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

Does my hon. Friend agree that Hamas, with its view that eliminating the state of Israel is a religious imperative, is a real obstacle to peace?

[Mr Lewis]

I agree with my hon. Friend in the sense that as long as that remains Hamas’s position, it is inconceivable that it will be drawn into any credible peace process. The criteria that the Quartet has laid down—recognition of Israel, a denunciation of violence and a respect for previous agreements—are clear. Of course, there is engagement with Hamas through, for example, the Arab League and Egypt, so there is an opportunity for countries and institutions to have discussions with it. However, the international community is clear about the criteria that need to apply for Hamas to join the political process.

As I said, we want to see direct negotiations begin as a matter of urgency. It is important that no preconditions should be imposed by either side in advance. However, it is also true that confidence-building measures would help to create a level of trust that, frankly, is currently in very short supply. I want to identify what those measures should be—they are not preconditions but ways to create the right environment for the rebuilding of some relationship of trust and mutual respect. As my right hon. Friend the shadow Foreign Secretary has consistently made clear, Israel should freeze all settlement expansion. Not only are settlements illegal but their expansion changes the facts on the ground, jeopardising the prospect of a contiguous Palestinian state as well as provoking anger and mistrust. We should galvanise international support for Prime Minister Fayyad’s 2-year economic plan towards Palestinian statehood. I am proud that in government we pledged £210 million in aid, and I hope that over the three-year period that commitment will be maintained by the new Government.

The blockade of Gaza must end so that all necessary humanitarian and reconstruction assistance can get through. However, in line with resolution 1860, this will happen only is there is tangible action to prevent the trafficking of weapons and weapons parts into Gaza. To that end, we welcome Tony Blair’s efforts to secure progress, which—as I am sure all hon. Members accept—is now urgent. We want to see the Quartet and the Arab League working with all parties to come up with a credible plan that meets these two objectives within weeks, not months. Rocket attacks on Israel must stop. Gilad Shalit should be released by Hamas without precondition. His capture and continued detention are unacceptable.

With regard to recent events off the coast of Gaza, all sides have rightly condemned the tragic loss of life. We welcome today’s inquiry announced by Israel and the involvement of David Trimble and Ken Watkin. However, we will be watching closely to ensure that the tests of independence and transparency that we have set are met in the way in which the inquiry is conducted.

The message that we should send from the House today is that the clock is ticking and time is running out for peace and stability in the middle east. A lack of political progress will not sustain an uneasy calm, but will lead to a resumption of violence and the strengthening of those whose purpose and interest are served by perpetual conflict. It is true that political leaders should be wary of getting too far ahead of their electorate, but it is equally true that history teaches us that great leaders are willing to deliver difficult messages to their own people.

The time has come for Prime Minister Netanyahu and President Abbas to prove their critics wrong. Prime Minister Netanyahu needs to show that he truly understands and believes that there is no viable alternative to a just two-state solution and President Abbas needs to show the strength and credibility to deliver the Palestinian state which is long overdue.

Two states for two peoples will not bring to an end to al-Qaeda’s fundamentalist terrorism or bring the Iranian regime from the margins to the mainstream. Al-Qaeda’s support for the Palestinians is a tactic, not the pursuit of a just cause. But two states would undermine their selective narrative about the west’s foreign policy goals, weaken their recruitment tools and strengthen the voice and hand of the mainstream majority in the Muslim world who deplore both violence and the politicisation of faith.

On Iran, we on this side of the House strongly support the new package of sanctions agreed by the United Nations Security Council last week. We reiterate our hope that Iran will chose the path of dialogue and diplomacy. Iran is a proud country which would have an important and influential role if it chose to rejoin the mainstream of the international community, but the regime must understand that the world will not stand by as it develops a nuclear weapons programme in clear contravention of its non-proliferation treaty obligations. That is not only because of the direct threat to Israel and the Arab states, but because a nuclear Iran would almost certainly trigger a new nuclear arms race, with some Arab states feeling an obligation to develop their own nuclear programme. That would be catastrophic at a time when the recent NPT review conference sought to take some tentative steps towards a world free of nuclear weapons.

As the Minister said, the people of Iran are courageous, as they demonstrated through their peaceful post-election protests. They should know that Britain seeks to be a friend of Iran and wants to resolve our differences though negotiation. Equally, the regime should know that, with our international partners, we will remain unwavering in our determination to prevent it from developing nuclear weapons and in our revulsion at its President’s holocaust denial.

Irrespective of different views on the war in Iraq, we should always remember the brave British servicemen and women who risked and in some cases sacrificed their lives freeing Iraq from the tyranny of Saddam Hussein. Just before Christmas last year, I was privileged to visit Iraq and see for myself the excellent work being done by our Royal Navy in training the Iraqi navy to protect its coastal waters. Significant progress has been made in Iraq but the new Iraqi Government must seek maximum consensus to consolidate security, improve the effectiveness of Government and push forward with economic and social reform. They should seek to improve human rights, including for minorities, women and trade unionists. Britain has a duty to play a positive role in the development of a new Iraq, and it is important that the British Government work with the Iraqis to identify how we can add the most value and make the most difference on a sustainable basis.

[Dr William McCrea (South Antrim) (DUP)]

The hon. Gentleman said that the world would not stand by and let Iran develop nuclear weapons. What would the world actually do? Would it pass a resolution of condemnation or what?

[Mr Lewis]

I do not think that it is responsible to enter into a running commentary on the situation in Iran. We moved from an historic offer of dialogue from President Obama, which received no positive response, to toughening our economic sanctions—ensuring that those sanctions are targeted at the regime. We must hope that the Iranian regime understands that there is significant international consensus and concern about the concept of Iran developing nuclear weapons. It is important that there is a unity of message and purpose throughout the international community so that Iran does not see any weakening or division in our determination to ensure that it does not breach its responsibilities under the NPT. We should remember that Iran is a signatory to that treaty but has continually failed to live up to its obligations.

Finally, on Yemen, it is important that the international community learns the lesson of Afghanistan. We must ensure that the commitments made at the London meeting in January are delivered. The President of Yemen should be expected to lead a programme of change that addresses security and political, economic and social reform, including authentic internal political reconciliation. However, that will be successful only if the aid promised primarily by Gulf states is delivered and spent effectively alongside a fast-tracked IMF programme that supports economic reform.

As I found on my visit earlier this year, Yemen feels a new sense of friendship and warmth towards Britain. I hope that the Minister, when he visits, will focus on how we can use our innovative joined-up approach—combining the best of the Department for International Development, the Ministry of Defence and the Foreign and Commonwealth Office—to achieve tangible results.

As my right hon. Friend the Member for Leicester East (Keith Vaz) often rightly states, Yemen is not a failed state, but it is most definitely a fragile state and we must do everything that we can to tackle the poverty and social disorder that are the breeding ground for al-Qaeda. Effective action now will prevent the far more serious interventions that would be necessary in the future if the Government of Yemen were to fail.

I do not have time in this debate to do justice to all the challenges that face the middle east, which include the implications of a newly assertive Turkey, the serious threat to stability posed by a re-armed Hezbollah in contravention of UN resolutions, or our approach to engagement with Syria which, although very important, has not yet led to any serious move by Syria to take a step—let alone make the leap—from the margins to the mainstream of the international community.

Sceptical friends in the region often say, “But you must understand: this is the middle east,” as they raise their eyebrows at talk of yet another peace initiative. My response is simple. In my lifetime, I have seen the Berlin wall fall and the Soviet Union crumble; Nelson Mandela released from prison and elected President of a democratic South Africa; peace come to Northern Ireland, with Ian Paisley and Martin McGuinness serving in the same Government; an African-American elected President of the United States—events that are now facts of history, but which would once have been viewed as the naive dreams of romantic idealists.

The middle east needs a combination of realism and idealism. Most of all, it needs great leaders with the courage and vision to make the hard choices and take the difficult decisions. There will never be a shared narrative about the past, but there can be a shared determination to build a better future. I hope that the new Government will ensure that Britain remains at the heart of supporting a peaceful and just future for all the people of the middle east.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. This is an important debate, and a large number of right hon. and hon. Members have put their names down to speak. Mr Speaker has therefore imposed an eight-minute limit on Back-Bench speeches, although if colleagues take less than eight minutes, we can probably get further down the list.

18:21

[Sir Malcolm Rifkind (Kensington) (Con)]

I congratulate you on your appointment, Mr Deputy Speaker. I also commend my hon. Friend the Minister and the shadow Minister for what were two powerful and profound speeches on an important matter.

The subject of the debate is the middle east. One might therefore expect it to be concentrated on the views of the Arab world, as well as on those of Israel, yet one of the great ironies is that the three most important countries involved in the region—in the sense of being engaged in proactive action at this moment—are Israel, Iran and Turkey, none of which is an Arab state. Part of the difficulty that we face has been the inability, for various reasons, of most of the Arab world to take the kind of proactive role that might have been expected.

In the time available, I want to concentrate on Iran. I want to ask a number of questions, but I want also to offer possible answers to some of them, including to the point raised by the hon. Member for South Antrim (Dr McCrea) in an intervention a few moments ago. The first question is: are we right to single out Iran for its almost-certain nuclear arms programme? Often we are told, “Well, there are other nuclear weapons states. Why should Iran be singled out in this way?” I believe that the answer to my question is that we are right to do so, and we are right for two reasons. Compared with the existing nuclear weapons states, Iran—or, more particularly, its President—has gone out of the way to be bellicose in his language, to be threatening to at least one other country in the region and to have aspirations for the aggrandisement of his country, with a willingness to use weapons for that purpose.

However, linked to that is the undoubted fact that, unlike in the case of previous nuclear weapons developments, undesirable though they might have been, if Iran acquires nuclear weapons, it is painfully obvious not that it will use them directly, but that a consequence will be a destabilisation of the region and the almost near certainty of countries such as Saudi Arabia, Egypt and Turkey feeling it necessary to go in the same direction. Therefore, the middle east as a whole would become a region with a significant number of nuclear weapons states, with all the awful consequences that that could imply.

That is the first question. The second question is, therefore: is current policy working? Manifestly it is not. We all know that it was meant to be based on carrot and stick. What better carrot could there have been than President Obama’s offer of a grand dialogue with Iran and the normalisation of relations? Instead, that was thrown in his face. There were not even failed negotiations; the negotiations never began, because Iran rejected that possibility. We know also that sanctions—important though they are, and much as we welcome the latest decision by the United Nations Security Council—will not by themselves achieve a change of heart in Tehran.

I therefore come to the third question: is it possible that a policy of diplomacy and pressure could work? Is there a scenario in which it might work? The answer, I believe, is yes, if two conditions are satisfied. First, Russia and China are crucial, because although they supported the resolution last week, we know that their support is grudging. We also know that they have consistently taken on board their short-term considerations—in particular, their trade relationships with Iran and other aspects of their foreign policy—rather than standing four-square with the rest of the Security Council. Russia in particular, as a neighbour of the middle east and Iran, and with a large Muslim minority in its own territory, has as much to be concerned about by a nuclear-armed Iran as any country in the west, as does China, because of its particular position. Russia and China, therefore, if they look to their self-interest, ought to be able to share the position of the United Kingdom, the United States and others on the need for a total uniformity of view on the question of pressing Iran.

However, it is not just Russia and China; it is also the Arab states that I mentioned earlier. Anyone who goes to any of the countries of the region—and I have been to most of them—will find that, in private, people will say that they are as horrified as we are at the possibility of a nuclear-armed Iran. But try getting them to put their heads above the parapet—try getting them to support publicly what the United States and the Security Council are trying to do—and all sorts of reasons are given as to why it is too difficult, why it would be unpopular in their countries and why it all depends on what Israel does, along with various other excuses.

That would not worry me but for the consequence of that resistance to coming out and sharing people’s real views, which is that Ahmadinejad is able to say to the world, “This isn’t the international community versus Iran; this is simply the United States and its closest allies.” What we need is not a coalition of the willing, but a coalition of the relevant. We need those countries of the region to join the west—and, I hope, Russia and China—to take a common position on the issue. That is what happened in the first Gulf war, when Kuwait was being liberated. Syria, Turkey and Saudi Arabia publicly supported—with troops, as well as through diplomacy—what the United States-led coalition was doing. Pressure could work, therefore, but until that change takes place, it is less likely to do so.

The main point that I want to concentrate on in the time left is if the methods that I have described do not work—I refer now to the intervention of a few minutes ago—what then do we do? Do we simply say, “Well, that’s too bad. There’s nothing we can do”? There is the question of the military option. People have rightly pointed out that the downside is a pretty dreadful downside. If military action is taken by either the United States or Israel, it will almost certainly lead to Iran enabling Hamas or Hezbollah to become even more proactive and attack Israel, as well as fomenting mischief in Iraq, with the price of oil going sky high and the straits of Hormuz perhaps being closed.

All that is true, and I cannot say that it would not be likely to happen. However—and this is an important “however”—all those things would be relatively short-term events, and I stress “relatively”. They would last a few days or a few weeks, or perhaps two or three months. An Iran with a nuclear weapon, however, would be around for years to come—for ever. Therefore, it is not good enough simply to say, “There is a downside. Therefore, the military option cannot be considered at any stage.” We have to come to a judgment on the balance of advantage. Is the balance of advantage to accept major problems if military action was taken, if—and this is an important “if”—it would remove the nuclear threat from Iran?

However, everything that I have said on this issue depends on whether the military option is a real option. Would it actually deliver? That is the fundamental question that Britain, America, Israel and the wider international community have to consider. I do not have time to go into the detail, but I make the point that the objective must be to come to an honest judgment. If diplomacy fails, if sanctions do not work and if there is no peaceful alternative, then we will have to come to an honest view on whether the military option—whether by the United States or Israel—would destroy Iran’s nuclear capacity or, even if it did not, so degrade it as to make Iran unable to have nuclear weapons for a good few years to come.

I conclude by simply saying this. In this rather imperfect world in which we live, it is not good enough to ask, “What is the perfect solution to this dilemma?” The real question that we have to ask—or at least that Governments have to ask—is what is the least bad option? If the military advice was that we could either remove Iran’s nuclear capacity or degrade it for a long period, Iran must realise that, at some stage, that might be what happens. It would not be an ideal solution, but it might still be better than the alternatives.

18:29

[Sir Gerald Kaufman (Manchester, Gorton) (Lab)]

Although we are discussing a grave subject, may I say what a pleasure it is to speak in the House with you sitting in the Chair, Mr Deputy Speaker?

The Labour Foreign Secretary, Ernest Bevin, once dismissed an opponent’s speech as consisting of “clitch after clitch after clitch”. I do not believe that there is any future in debating this subject by relying on clichés. If any other country had behaved as Israel is behaving towards the Palestinians in the occupied territories, international action would have been taken long ago. The international community is, as the right hon. and learned Member for Kensington (Sir Malcolm Rifkind) pointed out, rightly concerned about Iran. Yes, Iran’s regime is detestable and it is important to do all we can to prevent it from acquiring nuclear weapons, but it does not have them at present and it has never invaded another country. Israel does possess nuclear weapons; it is said to have 200 warheads. It has refused to sign the non-proliferation treaty and it recently refused to attend President Obama’s conference on nuclear weapons divestment. Israel has invaded Lebanon three times. It facilitated the Sabra and Shatila massacres. It also conducted Operation Cast Lead, the Gaza blockade and the attack on the Gaza flotilla.

Let us also dispose of the distractions that impede action. It makes no difference whether the inquiry into the attack on the flotilla is conducted internally by Israel or internationally. Even an international inquiry would not change Israeli policy. The Goldstone inquiry into Operation Cast Lead had no influence at all, and Goldstone was vilified as a Jewish anti-Semite and a self-hating Jew. We have heard mention this afternoon of the dreadful situation involving Gilad Shalit, the young man who was taken into captivity four years ago this week. I feel great sorrow for his family, but he was a soldier on military duty. About 15 members of the Palestine National Council are being held without charge by the Israelis, and about 300 children are being held in prisons by the Israeli Government. It is a distraction to propose, as Tony Blair and Baroness Ashton have done, to change the terms of the Israeli blockade of Gaza. Neither of them has challenged the principle of the blockade, yet it is that principle that contravenes the Geneva convention.

[Mrs Ellman]

Will my right hon. Friend give way?

[Sir Gerald Kaufman]

If my hon. Friend will allow me, I will give way if I have time before I finish.

Israel ignores international opinion on the illegal wall that has turned towns such as Kalkilya and Bethlehem into prisons, and on the illegal checkpoints. It knows that, whatever it does, no action will follow. It has the most extremist Government it has ever had, under the most extremist Prime Minister it has ever had, and a Foreign Minister who is an avowed racist. Israel is allowed literally to get away with murder. Only punitive international action will make even the tiniest difference. That means an arms ban, and the kind of sanctions that were imposed by the senior President Bush on Yitzhak Shamir to force him to participate in international talks in Madrid.

This is a situation in which one country is holding 1.5 million people in an internal prison and 4 million other Palestinians in a form of detention, but let us be clear about this: no action will be taken against Israel. President Obama will take no action, partly because he has mid-term elections in five months’ time, and partly because the odious pressure group, AIPAC—the American Israel Public Affairs Committee—can destroy any United States politician who makes the slightest criticism of Israel. When a Republican Congressman suggested that a tiny sliver of the billions of dollars that the United States gives to Israel should be transferred to alleviate a certain amount of poverty in Africa, AIPAC labelled him an anti-Semite. That is what American politicians, including Obama, have to put up with. We could take action, however. The European Union could take action over trade agreements, for example. Let us be clear that we cannot appeal to the conscience and good will of a country that has not demonstrated that it has either quality.

The situation is now unsustainable. The more the Israelis repress, suppress and oppress the Palestinians, the more precarious the future of their state will be. I saw, as did other hon. Members when we went to Iraq this year, that the Israelis are breeding children who hate them because of their hunger and their lack of schooling, and because of the way in which they are being treated. The Israelis seem to believe that treating the people of Gaza like that is a way of weaning them away from Hamas, but it only makes them support Hamas even more. Nobody is excusing Hamas; it has done dreadful things, as I pointed out to its representatives when I was in Gaza earlier this year. The fact is, however, that the Israelis are creating a generation of children who will grow up hungry and hating them.

This Israel does not want a two-state solution, but the only alternative is a one-state solution, and the existential fact is that, before long, there will be more Palestinians than Israeli Jews. It took the Jews 2,000 years to get their homeland in what is now Israel. After 60 years in that homeland, they now risk throwing it all away.

18:36

[Stephen Williams (Bristol West) (LD)]

May I begin by saying that it is nice to see you in your new place, Mr Deputy Speaker?

The Minister and his Labour shadow made wide-ranging speeches about the nature of the various problems in the middle east. I want to confine my remarks to the situation in Palestine, and particularly in Gaza, as did the right hon. Member for Manchester, Gorton (Sir Gerald Kaufman). That is not just because of the events that we all witnessed on our TV screens a couple of weekends ago, and which were discussed by colleagues at a Liberal International meeting in Berlin this weekend. My speech has also been informed by my visit to Gaza in March as part of a cross-party delegation led by my noble Friend, Lord David Steel. The hon. Members for Hammersmith (Mr Slaughter) and for Westminster North (Ms Buck) were also part of the delegation. For me, that visit to Gaza was one of those life-transforming experiences that crystallised the issues in my head and made me see them more clearly than I had done before.

In Gaza, 1.5 million people are being held under siege conditions. First, they are blockaded on land. We saw the wall and, more pertinently, we had to be careful not to get too close to it because of the snipers who patrol it. The people are also blockaded by air, as well as by sea, the tragic result of which we saw a couple of weekends ago. To set this in the context of my own constituency, that is the equivalent of the whole of greater Bristol, Bath and all of Wiltshire being blockaded off from the rest of the United Kingdom and denied access to the most basic goods. This is a humanitarian violation on a quite staggering scale.

There are limited crossing points along the well-policed border. The Rafah crossing from Egypt, which we had to use, is only for foot passengers. No goods are allowed to pass through it. All the crossing points through which goods may be transmitted are controlled by the Israeli army. As we saw, only a limited variety of items are allowed to be transferred across, and the list, which seems quite arbitrary, changes from week to week. When we were there in early March, only 70 items were allowed across the border. If we go into our local corner shop—never mind the supermarket—we can see the thousands of products, including hundreds of different kinds of biscuits and confectionery alone, that are available to us. Imagine being limited to only 70 items in total out of the full range of goods and services that we, as 21st-century citizens, expect to have access to. However, only 70 items were allowed into Gaza in that particular week. This is not just the denial of humanitarian aid; it is the denial, and complete obstruction and destruction, of a fully functioning market economy.

Desperately needed reconstruction materials are not allowed to be transferred across the border either, and in Gaza we saw, of course, the bombed-out schools, the bombed university and hospital, and the housing shortages. It is absurd and outrageous that cement and other construction materials are not allowed across the border.

All of that leads to those 1.5 million people effectively being utterly dependent on a shadow, black-market economy supplied with goods through tunnels dug through the sand from Egypt and controlled by local criminals and Hamas. People with sufficient money and wherewithal can access those goods, whereas the rest are dependent on local patronage or the United Nations Relief and Works Agency.

What we saw in Gaza is effectively a parallel society. Ironically, people who can prove their status as a descendant of a 1948 refugee are in a slightly better position than those who have lived in the Gaza strip for generations, because they might get access to UNRWA food parcels. We saw that at a food distribution centre, where families came from all over the Gaza strip and took away their very limited supplies of cooking oil and other cooking materials by donkey cart. It was a mediaeval scene, and what is happening in Gaza is mediaeval, too: mediaeval siege tactics are being used that would have been appropriate at the time of Richard the Lionheart or Saladin but are completely outrageous and unacceptable in the second decade of the 21st century.

My remarks so far have provided an outline of the problem as I saw it for myself just a few months ago, but what can we do about it? The UK Government should use our membership of the European Union to be more active in putting pressure on the state of Israel, and also on Egypt. The objective should be to lift the siege, and not only for humanitarian aid; indeed, I am a little worried about the frequent references to humanitarian aid. The full range of goods and services that we take for granted in our society should be allowed in. That is needed in Gaza to allow people to rebuild a fully functioning market economy.

The EU is in a good position to apply leverage on the state of Israel through our trade agreements with it. The EU can also potentially play an important role in enabling access to goods and services for Gaza. While travelling into Westminster on the train today, I was intrigued by an article in The Times by the EU’s foreign affairs High Representative, Cathy Ashton, whom I believe is at this very moment chairing a meeting of all EU Foreign Ministers. The article said that the EU could perhaps be the agency that facilitates and polices the transfer of goods and services into the Gaza strip, and that instead of Israel banning all goods and services, we should have a list that prohibits only those few of them that would be prejudicial to Israel’s security, and that the presumption should be that all other goods should be allowed in.

[Dr Julian Lewis (New Forest East) (Con)]

I thank the hon. Gentleman for giving way, and may I also say what a pleasure it is to see an alumnus of Dynevor grammar school, Swansea, occupying the Speaker’s Chair today?

Why does the hon. Gentleman think that Israel is imposing such an extreme blockade if the solution is, in fact, as simple as he sets out?

[Stephen Williams]

I am certainly not going to deny that part of what is taking place is self-inflicted. Obviously, the rocket attacks on villages in the south of Israel are outrageous, and we made it clear in the meetings we had with various political representatives in Gaza that there had been wrong on both sides, but the state of Israel has an army at its disposal, whereas the inhabitants of Gaza are 1.5 million people who are at the mercy of a superpower on their doorstep, and those superpowers, whether Israel or Egypt—or the states that, perhaps, control and influence their foreign policy from much further afield—are, effectively, playing with the destinies of men, women and children, as the right hon. Member for Manchester, Gorton mentioned. That is not the way to build peace and understanding for the future, and I think we have a right to expect rather more from the democratic state of Israel than it has shown so far. That leads me to my final point.

[Robert Halfon (Harlow) (Con)]

Will the hon. Gentleman give way?

[Stephen Williams]

I have fewer than 40 seconds left, so I am not going to give way again.

My final point is about political engagement. One of the touching scenes we saw while in Gaza city was at an UNRWA school, where children were conducting a mock election. That shows hope for the future, but I do not think there can be any hope for the future if we do not talk to the people whom their parents have elected. We must have engagement with all the political representatives of Gaza and the west bank. We must lift the siege. We must have constructive engagement, and from that point we might have a chance of building lasting peace into the future.

18:46

[Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)]

I also welcome you, Mr Deputy Speaker, to your new position and wish you the best of luck.

The hon. Member for Bristol West (Stephen Williams) spoke with great passion about the situation in Gaza and, based on my experience of visiting there, I completely concur with his analysis. I, too, will concentrate on the situation in Israel and the occupied territories.

Just over a week ago in the town of Ayr, I joined other local people in seeking signatures to a petition about the attack on the flotilla taking aid to Gaza and the resulting loss of life. I was joined by local people from Amnesty International and various other groups, including Sheena Boyle, who is involved in a Scottish charity, Children of Amal. She spends half her year in Nablus, where she provides therapeutic support and training to children who have been traumatised by violence. She also trains psychologists and social workers to provide group therapy through music as an art.

I was taken aback by what I witnessed in Ayr. The people who had volunteered have a long-standing commitment to seeking peace in the middle east, but I do not think those who were lining up to support the petition follow events in the middle east particularly closely. I was struck by the level of anger at what had happened.

All Members must take note that there is widespread concern in our constituencies about the entire situation and the continuing disproportionate actions of the Israeli Government. All too often, the Israeli Government act in an affronted and defensive manner when their actions are questioned and there are calls for independent reports. My right hon. Friend the Member for Manchester, Gorton (Sir Gerald Kaufman) referred to the Goldstone report and the fact that the Israelis’ response was to blame the messenger.

As my hon. Friend the Member for Bury South (Mr Lewis) said, we should welcome an inquiry and input from independent people, including the Houses of Parliament. I understand that Turkey is not happy with the set-up and what is being proposed, and as it is the country that has been most affected by the action, we have to take note of that. In particular, we must make sure that there is transparency in the inquiry.

Over the years, there have been many false dawns interspersed with violence from both sides, although not in equal measure. My hon. Friend was very optimistic, based on his experience of various different situations in his lifetime where peace has been achieved. I am not so optimistic, as I am aware from trying to put myself in the shoes of the Palestinians—and, indeed, the Israeli people—that it is very hard to see any likelihood of progress.

We have heard plenty of words, but they have been interspersed with violence. There have been conferences, accords, mutual recognitions, declarations of principles, assassinations, memorandums, elections, permanent status negotiations, unilateral withdrawals, intifadas, reports, ceasefires, peace initiatives, curfews, a so-called “security barrier” that separates families from their livelihoods and nomadic people from their land, rocket attacks, road maps, air strikes, incursions, prisoner exchanges—we have seen all that and more since 1991. We have heard many words, but we have seen many negative consequences and very little positive impact. UN resolutions have been ineffective and Israel has not been held accountable to international standards of conduct and law.

In the previous Parliament, the Select Committee on Foreign Affairs visited Gaza following Operation Cast Lead, whose impact was a humanitarian and counter-productive disaster. We could see the resentment being fed by that operation and we could see that it was shoring up the position of Hamas. This Government and the previous one are against holding talks with Hamas, because to do so would apparently make it seem more legitimate. However, we must consider the suffering of the people in Gaza, who live in one big prison, subjected to collective punishment and deprived, as the hon. Member for Bristol West said, of everyday necessities and the means to rebuild their infrastructure and economy. That has made people turn to Hamas in the face of an ongoing failure to find a peaceful solution.

The Committee also visited Sderot and a local college, which are often subjected to rocket attacks. The people there, too, want peace, because they are in the same spiral of despair and distrust as the Palestinian people. The longer the blockade continues, the lower expectations become. Recently, it seems that the US even reached the stage of outlining its own plan, with a view to imposing it on both sides—such is the frustration at the ongoing situation, which does not appear to have a real solution.

[Mr David Burrowes (Enfield, Southgate) (Con)]

Will the hon. Lady visit Egypt in order to understand from the Egyptians why they have not fully opened the Rafah crossing? Does she understand why they have been conspicuous in their absence from the chorus of disapproval for the flotilla? Does it not have something to do with the fact that they are very much aware of the danger of having Hamas right on their border?

[Sandra Osborne]

I do not underestimate the danger of Hamas, but the reality is that Hamas is part of the equation, whether we like it or not. Hamas was elected by the people of Palestine and will not go away simply because we ignore it. Some of the actions, far from advancing the cause of the Palestinian Authority, actually undermine it.

I would welcome news today of a breakthrough in the easing of the blockade, whereby fewer goods will be restricted, and commercial goods and civilians will be allowed entry and exit. Like my hon. Friend the Member for Bury South, I would also welcome the involvement of the European Union, because that would encourage greater transparency and would leave no excuse for the smuggling of goods through the illegal tunnels. However, that is not a substitute for the lifting of the blockade. It will not achieve a two-state solution. We have heard plenty of words, but turning them into action is what will bring credibility to the Palestinian Authority.

The previous UK Government played their part in the Quartet and some benefits are being reaped from that involvement. I get the impression from the Minister that the new Government will follow a similar policy, and we hope that they will do so with similar determination. The main thing is to ensure that the US does not lose impetus in promoting a peaceful solution, as has happened so often in the past. A two-state solution in the middle east involving the occupied territories and Israel is long overdue, because what is happening in the meantime is a disgrace to humanity.

18:54

[Mr James Arbuthnot (North East Hampshire) (Con)]

It is a pleasure to see you in the Chair, Mr Deputy Speaker. I declare my interest: I am interested in Israel, I am the parliamentary chairman of the Conservative Friends of Israel and proud to be so. Everyone in this House should have an interest in Israel, because it is a country that embodies the values that we should stand for. It was created in the 1940s, partly as a reaction to the way in which the Jews were treated during the holocaust. Israel was created by the international community and it became a bastion of the rule of law, democracy, free speech, business enterprise and family values. If that is not what this country also stands for, I am disappointed.

Israel is a country that makes mistakes. Its political system of proportional representation taken to a ludicrous degree is a mistake. Because of its political system, it finds it very difficult to change. In my view, the continued existence of the settlements is another of those mistakes—when President Peres was here a year or so ago, he suggested that most Israelis share that view. Again, however, because of the political system that is, unfortunately, extremely hard to change. But what is definitely not a mistake, and what we ought to applaud, is Israel’s determination to stand up for its continued right to exist in peace and security.

When that peace is destroyed by Hamas kidnapping Gilad Shalit and continuing to hold him prisoner for years, nobody should expect Israel just to accept it. When that peace is destroyed by rocketing from Gaza, nobody should expect Israel to say, “Yes, flotillas can be allowed to import whatever they like into Gaza, including perhaps explosives and rockets.” On one ship, the Karine A, which was not involved in this convoy, the Israelis found tons of weapons for Hamas. Were they simply to assume that this particular flotilla contained no such weapons to be used by Hamas against both Israel and the population of Gaza, whom Hamas treats so cruelly? Surely not. So obviously the flotilla was going to be stopped and boarded.

The fact that five out of the six ships were boarded without incident establishes, to my mind, that those who carried out the operation were well trained and well disciplined, and did not invite trouble. The trouble came from the sixth boarding operation. It seems strange to me, for the following reason, that the Israelis were apparently unprepared for a reaction to that boarding. The hon. Member for Ayr, Carrick and Cumnock (Sandra Osborne) talked about aid, but this flotilla was not about aid for Gaza. Had it been about that, the Israeli and Egyptian offers to allow the aid through at the land crossings would have been accepted, but they were refused, both before the flotilla sailed and after it had docked in Ashdod. The purpose of the flotilla was simply to create publicity. Therefore, as Israel should have predicted, the flotilla would have been a waste of time and resource unless there was a violent incident that would create that publicity. Given that the flotilla was designed to be provocative and to end in violence, we should not blame Israel for the violence against which it failed to guard itself; the blame lies with those who went on to the flotilla expressly seeking martyrdom.

[Jeremy Corbyn]

Does the right hon. Gentleman acknowledge that the incident took place in international waters, that most of the ships were boarded and that most of the people who were taken were held, handcuffed and illegally taken into Israel from international waters? Surely he should acknowledge that Israel is guilty of a breach of maritime law, never mind humanitarian attitudes.

[Mr Arbuthnot]

No; as a lawyer, I have, in my time, done international law, and I do not consider that any of this was illegal. If one is trying to prevent people from going into a blockaded area, the only place where one can board the ships is in international waters. I do not accept the point that the hon. Gentleman makes, although I accept that he strongly believes it.

It is against that background that Israel somehow manages to lose the propaganda battle, and I find that completely baffling. What I do not understand—I hope that someone in this debate can enlighten me—is why Israel is so good at fighting wars, but is absolutely atrocious at managing its public relations. Why does Israel—a country the size of Cornwall that was created out of nothing and that is surrounded by oil-rich countries, at least one of which would like to see it wiped off the face of the map—always allow itself to be portrayed as the aggressor? What is it about the right to exist in peace that is so difficult to get across?

I should like to finish by quoting from an excellent article, last week, by Charles Moore. He asked:

“What has gone wrong? Experts tell me that there is no proper co-ordination, that no one person is in charge of shaping and communicating Israel’s message to the world, and that no one is sacked…Somewhere down the years, Israel allowed itself to forget that its greatest weapon is the story it can tell about itself…What it wants is a clear, calm, repeated case. It is a case—aimed more at public opinion than at foreign ministries—about freedom, democracy, a Western way of life and the need for the whole of the free world to fight terrorism.”

19:02

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

I, too, congratulate you on your very well deserved position, Mr Deputy Speaker.

The death of nine people on the Mavi Marmara on 31 May has brought widespread outrage. It is the latest incident to highlight the tragic conflict between Jewish and Palestinian nationalism, which will be resolved only by a negotiated, comprehensive peace settlement that establishes two states—Israel and Palestine—living side by side in peace and security. I am very pleased that inquiries into the incident have now been set up. We will have to await the results of those inquiries to get the full picture, but this afternoon I want to refer to some of the facts that are already known—indeed, they are clearly evident.

The blockade of Gaza came about because Gaza has been run by the Islamist Hamas after Israel dismantled its settlements, ended the occupation of Gaza and withdrew 8,000 settlers and its soldiers. Instead of that being followed by an attempt to build a peaceful society, it was followed by Hamas overthrowing Fatah and establishing a regime set on eliminating Israel. Hamas’s ideology is very clear—it is set out in its charter and by the continuing statements of its leaders. Hamas sees it as a religious duty to destroy the state of Israel and it promotes the death cult. It says:

“The Day of Judgement will not come about until Muslims fight the Jews (killing the Jews)”.

That is in article 7 of its charter. It also invokes the protocols of the elders of Zion—the false allegations that there is a Jewish conspiracy to run the world.

Hamas’s position is not just to do with ideology and rhetoric; it is to do with action as well. It has fired about 11,000 rockets and missiles—directed at Israeli civilians—and now it is receiving weapons from Iran that Israelis fear could reach Tel Aviv. It was only last November that a shipment of more than 500 tonnes of Iranian weapons coming to Gaza was intercepted off the coast of Cyprus. So Israel has every reason to be concerned about the Hamas regime continuing to attack Israeli civilians and working continually with Iran, its backer, which is dedicated to the absolute destruction and annihilation of the state of Israel and its people. Israel has every reason to be concerned about that.

There is also every reason to be concerned about what is happening to civilians and citizens in Gaza, many of whom are not involved with Hamas. That can and has to be addressed in the long term by a proper peace agreement, but in the short term it could and should be addressed by the European Union, Egypt and the Palestinian Authority taking their part in ensuring that goods that do and should come into Gaza do not include weapons of destruction. That responsibility had been taken up in the past, but has now ceased to be exercised. It should be resumed, and I hope that today’s announcement will facilitate the easing of that blockade and will allow the needs of the people of Gaza to be met without threatening the citizens of Israel.

I want to ask several questions about the incident with the flotilla to Gaza. Six vessels set out to take humanitarian aid to Gaza, from five of which aid was landed at Ashdod as the Israelis requested. Most unfortunately, Hamas then refused to allow that aid to be taken into Gaza. The incident and the regrettable deaths happened on the sixth vessel, so what was different about it? Who was on it? Were the peace activists who most certainly were on the other vessels infiltrated by others with sinister motives? What was the role of the IHH—the Turkish-Islamic organisation that is linked, through the Union of Good, to Hamas and jihadists and even to al-Qaeda—which was involved in promoting the flotilla? When the Israelis asked that No. 6 vessel dock in Ashdod to unload its humanitarian load, a reply came back, which was recorded, “Go back to Auschwitz.” What was going on on that specific vessel?

The Turkish press have been making a number of interesting reports in the past few days, including interviews with the families of some of the people in the flotilla who died. Those families have spoken about their partners wanting to be martyrs. We saw Hamas flags draped over the coffins of the dead and we have seen videos of the Israeli paratroopers on those ships being attacked with metal pipes and knives and being dragged downstairs in attempts to lynch them. Reuters has issued an apology for clipping from photographs scenes showing weapons being held by activists on that ship. Were they all peace activists? I have no doubt that most of the people who set out for Gaza genuinely want peace, but there was something else going on on that No. 6 vessel—something that we need to know a lot more about.

[Simon Hughes]

Will the hon. Lady give way?

[Mrs Ellman]

I am sorry, but there is very little time left.

Ismail Haniya, the leader of Hamas in Gaza, said on 4 June that the

“Zionist project on our land is reaching its final stage. The incident marks the beginning of the delegitimisation of the Zionist project in our country.”

Clearly, there is something more to this than the giving of humanitarian aid. I hope that those inquiries will show just exactly what that is.

There is something to be hopeful for in the middle east, and that is the resumed negotiations, although they are only indirect, with Fatah in a genuine attempt to find a two-state solution to this very tragic conflict. I hope the work of Senator Mitchell and his team is successful. The only solution to the conflict is mutual recognition by two peoples, justifiably seeking to retain or achieve national statehood and living in peace. The ideology of Hamas, followed by its actions to deny Jewish statehood, is absolutely unacceptable and is the obstacle to peace.

19:10

[Sir John Stanley (Tonbridge and Malling) (Con)]

Mr Deputy Speaker, I share the pleasure of the House at seeing you in the Chair, loss though you will be to the UK branch of the Commonwealth Parliamentary Association.

In the few minutes available to me, I shall devote my remarks to policy on the blockade. I start by making it unequivocally clear that I consider that Israel has a totally indisputable right to self-defence as a sovereign national state. Last year, I was able to visit Sderot with the Foreign Affairs Committee. One is left in absolutely no doubt whatever about the intolerable state in which those living in that community and others near the Gaza border are placed by the Hamas rocket attacks.

The reality is that in Sderot the warning time between the siren sounding and the rocket exploding is between 15 and 17 seconds, which means that there has to be a shelter within a few metres of where people are living. Shelters have even had to be dug underneath bus stops so that people queuing for the bus can go to them quickly. We were told by the Israelis there that, since the rocket attacks started in 2001, more than 800 Israelis had been wounded and 15 had lost their lives. That is 15 too many, but it is fair to point out that the number of those who lost their lives during the last Israeli incursion into Gaza was approximately 1,400—overwhelmingly non-combatants, including hundreds of women and children.

I shall focus on the critical issue of getting building supplies into Gaza to rebuild the area. One needs to go to Gaza to see at first hand the scale of the destruction that has taken place. We saw huge numbers of homes that had been shattered. We saw the hospital in Gaza City that had been burnt out with incendiary phosphorus Israeli tank shells. We went to a large industrial estate spreading over many acres where not just an isolated factory or warehouse had been destroyed, but every building had been razed to the ground and flattened—a scorched earth policy. I am at a loss to know why the Israelis believe that depriving hundreds, if not thousands, of Palestinians of viable employment and driving them into the hands of Hamas can be in Israel’s interest, but that was the policy that was followed.

The policy is justified on the grounds of security, but that argument simply does not hold water, for the simple reason that Hamas has all the building materials it wants. Hamas controls the tunnels through which come all the cement and steel reinforcing rods it wants. Hamas can build bunkers to its heart’s content, so the security grounds do not hold up. However, a huge rebuilding programme is needed for the civilian population of Gaza.

This morning, on the “Today” programme, I heard what was said by the former Prime Minister, Tony Blair. If we are to reach a position where the Israelis agree that a limited amount of building supplies linked to UN projects can go into Gaza, it will certainly be a step in the right direction, but that does not go far enough. Among the 1.5 million population of Gaza, large numbers of people need building supplies, but they are not part of a UN project. People want to rebuild their homes. People need to rebuild their farm buildings, their businesses, factories or warehouses, to create a viable economy. I point out to my hon. Friend the Under-Secretary that, if the proposal is to allow in building supplies only for UN projects, I hope the Government will say that we should go wider than that. There is no security risk in increasing the amount of building supplies going into Gaza to private individuals and private companies, provided that all those supplies are subject to the right of search by the Israelis.

I fully accept that the Israelis have every right to ensure that no weapons go into Gaza. We insisted on the same right in Northern Ireland. We did our utmost, with varying degrees of success, to prevent the IRA from getting weapons by sea from countries such as Libya. The Israelis have every right to interdict weapons and explosives, but I hope the Government will take a robust attitude and make every possible case for allowing the free flow of building supplies to Gaza. Hamas has all the building supplies it wants. There is no security case for stopping building supplies, which are critical in allowing the people of Gaza to rebuild their lives and their businesses.

19:17

[Richard Burden (Birmingham, Northfield) (Lab)]

I add my welcome to you, Mr Deputy Speaker, to your new position. Just as the right hon. Member for North East Hampshire (Mr Arbuthnot) declared his interest as chair of the Conservative Friends of Israel, I declare my chairmanship of the all-party Britain-Palestine group. In that capacity I offer my thanks to the 133 Members from all parties who have signed the early-day motion on the Gaza flotilla, which underlines the widespread concern across the UK about what happened on 31 May.

Today, we have heard that Israel has set up what has been described as an internal inquiry into that incident. I hope that Members will forgive me for being a little sceptical, because Israel’s record on inquiries has not been a good one; we have only to ask the British mother Jocelyn Hurndall about the hoops she had to jump through to get to the truth about the shooting of her son Tom by an Israeli sniper in Gaza in 2003.

Israeli Prime Minister, Binyamin Netanyahu, said that his inquiry meets the standards of

“prompt, impartial, credible and transparent investigation.”

We shall see whether that is the case. There are worries about the evidence to which the inquiry will have access. It is described as an internal inquiry, but the incident was not internal. The interception of the Gaza flotilla took place in international waters, so why is there not an international inquiry? The approach of the Government of Israel to Gaza, and to Israel’s occupation of the west bank, appears to be that the international community can advise—even the Palestinians can advise—about what should happen, but Israel decides what happens, not only within its borders but beyond them. If we are to have peace, that mindset has to change.

Will the Government confirm whether they still support the concept of an international inquiry? The Under-Secretary referred to an international dimension of the Israeli inquiry, but the Secretary-General of the United Nations described it as an inquiry to international standards, which is not necessarily the same thing. I would say to my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman) and the right hon. Member for North East Hampshire (Mr Arbuthnot) that, to get to the bottom of what happened on the Gaza flotilla, why can we not have an inquiry to international standards, run by the international community? What is the problem with that if we are to get to the truth?

Today, we have also heard that the middle east envoy, Tony Blair, expects a significant easing of the Gaza blockade in the coming period. In particular, he has predicted a change in Israeli policy from allowing into Gaza only items that are on a list of permitted items to letting in items if they are not on a list of prohibited items. As we know, Israel has prohibited things such as cement and steel—things that are vital to the reconstruction of schools, hospitals and homes. I refer hon. Members to the two reports of the all-party Palestine group that are based on eyewitness reports in 2009 and 2010 about the importance of such things going through.

It will be a step forward if Israel allows those materials to enter for UN projects, but it is not just UN projects that are important, even though their work is absolutely vital. Israel has said, for example, that medicines have no problems getting into Gaza. Well, actually, they do have some problems, but most medicines slowly and intermittently will get through eventually. They are not the same as medical equipment. We know from those two all-party group reports—when I was there, I witnessed this—that tubes needed for diagnostic equipment could not get in because they were seen as goods that could be used for terrorism. The last all-party group visit found the same experience with X-ray equipment.

Let us assume that those things get through. People can get food and medical treatment in a prison, but that does not alter the fact that it is still a prison. That is the issue, because the blockade is a collective punishment of the people of Gaza. Not only is it unlawful, but it condemns the people of Gaza to living in a prison. It is not enough for the people of Gaza to get by on more food parcels. It is not just an international humanitarian charity case. The people of Gaza need to be able to travel. They need to be able to rebuild a functioning economy.

It is interesting that the United Nations Office of the Co-ordination of Humanitarian Assistance reported just last week that more items were going into Gaza by category but that imports had declined by 26% compared with the week before, and there is still a ban on exports from the territory. That is not only wrong, but it undermines the cause of peace. As many hon. Members have already said, it is also madness: goods can get into Gaza through the tunnels illegally, but most of the people of Gaza cannot afford them, because poverty has risen exponentially. The United Nations Relief and Works Agency estimates that the number of people in abject poverty has tripled since 2007.

It is not Hamas that is saying these things. John Ging, the UNRWA co-ordinator, is saying them. I pay tribute to him, because he is one of those who are trying to give the children of Gaza some glimpse of a normal childhood by running summer camps. He has received threats from extremist groups for doing so, and they have also set fire to equipment. As a friend of Palestine, I say very clearly that those threats and attacks must stop, but that does not alter the fact that, for that to happen and for trust to be rebuilt, the blockade of Gaza must not be eased; it must be ended.

In the minute that I have left, I want to say one other thing. There has been a lot of focus on Gaza today—rightly so; it is understandable in the circumstances—but let us not forget the west bank. Although there has been a partial easing of checkpoints and movement restrictions, it is still under occupation. Since the start of this year, there has been an escalation of attacks by settlers on Palestinians—up to 132. Land confiscations continue. Demolitions of homes continue. There has been a particularly pernicious systematic eviction of Palestinians who live in East Jerusalem from their homes—often virtually in sight of the United Kingdom consulate general.

If we are to bring such things to an end, we must do more than talk. It is time to say what action can begin to be effective. The European Union has an association agreement with Israel that carries not only rights but responsibilities. It carries the right to trade preferences and various other preferences, but it carries the responsibility of Israel abiding by standards of international humanitarian law. Israel is simply not abiding by those standards. The terms of the EU-Israel association agreement are not being carried out. Therefore, until Israel changes its attitude, that agreement needs to be suspended.

[Several hon. Members]

rose—

[Mr Deputy Speaker]

Order. In calling the next Member, I remind colleagues that the convention of the maiden speech applies.

19:25

[Stephen Phillips (Sleaford and North Hykeham) (Con)]

Thank you very much, Mr Deputy Speaker. I am, of course, grateful to you for the opportunity that you give me, terrifying as it is, to make my first contribution to a debate in the House. I confess to hesitating before doing so in a debate that touches so many people so seriously and that is of such a serious nature.

I am naturally sensible of the very great privilege that I enjoy in addressing the House on this occasion—and, no doubt, for the last time—without interruption. Members on both sides of the House will recall their own maiden speeches, and many of them have been kind enough to give their advice about what I should say, whether or not it has been asked for. The principal injunction of course has throughout been to be short. Well, as those who are in the Chamber will observe, that is an injunction with which it will not be difficult for me to comply. Indeed, the entire purpose of my having delayed my speech for this long was to try to avoid the incongruous spectre of appearing in the Chamber at the same time as my new neighbour, my hon. Friend the Member for Grantham and Stamford (Nick Boles), but I see that I have singularly failed to achieve that.

As I rise to address the House, I am conscious of a number of advantages that I enjoy. First and foremost among them is, of course, that I have the honour and privilege to follow in this place a very distinguished parliamentarian indeed. Mr Douglas Hogg, as he was known in the House, was, as Members on both sides of the House will know, respected and beloved throughout his constituency of Sleaford and North Hykeham and before that of Grantham. He was generous with his time for those who sent him here to represent their interests, thoughtful in his contributions to the business of the House and unstinting in his support for the rights of this place against any interference from the Executive—something that he addressed in his own maiden speech. All that will be sorely missed. They are big shoes to fill, as Members on both sides of the House have made very clear.

That brings me perhaps to the second advantage that I enjoy as I make my maiden speech—namely, that the electors of Sleaford and North Hykeham, who chose me as a candidate at an open primary even before they had the opportunity to put their crosses in the boxes in May, were evidently satisfied with the make and model that they had returned to the House for the past 30 years, for they have chosen as their new MP another silk—another dinosaur—and another Member with a wife cleverer and more successful than he is. As Douglas himself has put it,

“the old banger must have been pretty sound for them to have chosen the same make and model again.”

I caution, though, and certainly add at this juncture that the unoriginal question that has occurred to wags on both sides of the House receives the answer no. I leave that as a puzzle perhaps for my successors, but given that I represent Sleaford and North Hykeham and follow Mr Hogg, many Members will know what question has arisen in their minds.

Before I come to the matter on the Order Paper, let me say that there is, finally, this advantage that I also enjoy: I have the very considerable honour to represent one of the most beautiful constituencies in the country, with some of the very best people one could hope for. From my village of Thorpe on the Hill in the north to Barrowby in the south, Long Bennington in the west to Metheringham in the east, hon. Members on both sides would do well to pay us a visit. It is a great shame that my hon. Friend the Member for Watford (Richard Harrington) is no longer in his place. He would particularly enjoy some of the real ale and some of the best pub food in the country, but I shall look forward to welcoming him and as many others as possible to the constituency.

The House can expect contributions from me perhaps on the middle east, and I hope to speak in future debates at somewhat greater length than I have time to do today. I hope also to speak about special educational needs. As many in the House will know, I was the chairman of governors at one of the last remaining signed bilingual schools for deaf children in this country. Close to my heart are issues about the education of deaf and autistic children and those who are less able.

I come to the matter that is on the Order Paper, conscious of the fact that I have heard contributions of great weight, not merely from Front Benchers but from Back Benchers, and that many Members on both sides of the House know a great deal more about this than I do. As is evident from those contributions, Members on both sides of the House well know the physical suffering that the continued blockade of Gaza is causing to a civilian population already laid low by the effective destruction of its infrastructure. Members obviously recognise the unsustainable policies that have been pursued in the past by the Government of Israel, of which I count myself a considerable friend, but which have, whether we like it or not, had the effect of entrenching a de facto Government with a vested financial interest in the maintenance of the tunnel economy that has been created by the blockade.

My right hon. Friend the Member for Tonbridge and Malling (Sir John Stanley) spoke about building materials. There is no shortage of building materials available to Hamas. The leaders of Hamas, should they wish to, construct villas, as they do, and have no problem getting cement through the tunnels. It is even possible to get a 4x4 through them. The argument that the blockade is based on the security of Israel is, I am afraid, fallacious, and I join other Members in saying that it should quickly be abandoned. Israel should concentrate on its strengths and on the values that it offers and demonstrates to the world.

Members on all sides have also been appalled, as have I, by the inability of the Palestinian Government, of whatever colour, to offer security to Israel. There is only one way forward—the two-state solution. Change has to come to Gaza and to the entirety of Israel and the Palestinian territories established under the Oslo accords. Change is something that we all talked about during the election, but this is a change that is desired by the vast majority of the civilian population throughout the middle east, and indeed in Palestine and in Israel, and is supported by the Government here as well as by our allies, as resolution 1860 demonstrates. It is that resolution with which Israel would do well to comply, as long as, of course, its security is guaranteed, and for that reason I hope that in this Parliament we will have the opportunity of seeing some form of lasting peace—the lasting peace that has for so long evaded previous Administrations in this House and indeed across the world.

19:32

[Mr Andy Slaughter (Hammersmith) (Lab)]

I, too, congratulate you, Mr. Deputy Speaker, and welcome you to the Chair. Before making my brief remarks, I mention, by way of declaration and pending the publication of the register, that my constituency party has received donations from individuals and organisations supporting the rights of Palestinians, and I made several visits to Palestine, Gaza and the west bank in the last Parliament.

I wish that there were more time to debate this issue today. There is a debate in Westminster Hall tomorrow, secured by my hon. Friend the Member for Westminster North (Ms Buck), which may give more opportunity to address the issue of Gaza. We have heard very powerful speeches about that from my right hon. Friend the Member for Manchester, Gorton (Sir Gerald Kaufman) and the hon. Member for Bristol West (Stephen Williams) which will help me to confine my remarks. I wish that I had more time to deal with some other issues. I would like to comment on Yemen, Syria and Iraq, but the time simply does not allow that, save for one point, which is topical and relevant to my constituents.

In opening the debate the Minister mentioned in an impassioned way the contribution that this country had made to security in Iraq. I do not in any way denigrate the efforts that have been made by our forces there, but Iraq remains very insecure. The UN High Commissioner for Refugees has commented on the forcible removal of people from this country to central and southern Iraq in conditions that put their safety at risk, and I ask the Government to look at that matter. A longer, all-day debate on the issue in the Chamber would be helpful in order to test the Government’s emerging policies on the middle east. I am lucky enough to have in my new constituency the Iraqi Association UK, which I know is particularly concerned about deportations that continue from this and other European countries.

My hon. Friend the Member for Bury South (Mr Lewis) said that he wished there could be more of a meeting of minds between interests representing the Palestinian and Israeli sides. I echo that. It does occur, but perhaps not frequently enough. I am afraid that in the debate today we have seen people taking entrenched positions again, and I will try not to do that in my remarks. I have noticed an unprecedented co-operation between the groups representing the interests of Palestinians and in the three main parties, which now meet on a relatively regular basis. That is to be welcomed, but I think it is a response to the appalling situation that the attack on the Gaza flotilla has brought to light.

Following my several trips to Gaza, I would highlight three points that have come home to me and, I think, other hon. Members who have also made that journey in the last two to three years. First, there is a desire for justice. Yes, there is a desire for cement and security, but there is an overwhelming desire for justice among the Palestinian people. They believe that they are not getting that and that the balance of force is set very much against them, whether in the region or in the world. The hope given by the Goldstone report has so far been dashed, and now the prospect of an independent inquiry into the attack on the Gaza flotilla appears also to have receded.

Why is an independent inquiry important? The Prime Minister of Israel, in announcing the inquiry, said that it is to investigate

“whether Israel’s Gaza blockade and the flotilla’s interception conformed with international law”.

With respect to the right hon. Member for North East Hampshire (Mr Arbuthnot), he may need to brush up on his international law a little if he is going to practise again, because every opinion that I have read from respected international lawyers is very clear that there is no right to attack a ship bearing the flag of another country in the high seas to enforce a blockade, even were it a legal blockade. On that and many other grounds, this is an action of little more than piracy, and it will not much trouble the inquiry, if it is an impartial inquiry, to investigate that.

The other reason for the inquiry, according to Mr Netanyahu, is to

“investigate the actions taken by the convoy’s organisers and participants.”

In other words the victims—those who were killed and the many who were injured—are to be put on trial. Thanks to the way the Israeli media typically manipulate publicity—we have heard some examples repeated verbatim in the House tonight—there is very little chance of the inquiry being impartial and of the world being presented with what actually happened.

I took the opportunity to attend press conferences held by British citizens from the flotilla immediately on their return from Istanbul, where they were flown from Tel Aviv, and to hear their first-hand accounts. I may be able to say a little more about that in the debate tomorrow. Suffice it to say that it gives a totally different picture from most of what has been reported even in the British media and certainly in the international media about what happened during that unprecedented attack, in the middle of the night, in international waters, by armed troops, in a way that was deliberately provocative and ended with the entirely predictable result that many people were killed.

[Simon Hughes]

I hope that the hon. Gentleman agrees that although we understand the careful wording of what our Government said today, people such as his constituents and mine, who have come back with their stories, having been on the flotilla, particularly if they are of Palestinian origin, as the person whom I saw was, would be reassured only by an independent inquiry, rather than a partial one. We cannot expect people to trust an inquiry carried out by one of the parties to the event. It has to have international credibility.

[Mr Slaughter]

I am grateful for that intervention. Those who heard the response of the Israeli Prime Minister’s official spokesman, both during the Gaza invasion and more recently, will realise the deep cynicism that underlies most of what Israel says and does to justify what has happened.

We have heard a lot said about Hamas today, and I have again heard the same points trotted out. I do not in any way defend what Hamas has done or said in the past, but let us look at the inequality in arms, and at the violence done and the deaths caused in the region over the past few years. There have been 1,400 people killed—mainly civilians, including many children—in the invasion, and nine people on the flotilla were killed. Just this year, six Palestinians have been killed, and 18 injured, on the west bank; 31 were killed and 116 injured in Gaza. Of course we must condemn rocket attacks, and the now relatively isolated attacks on Israeli civilians and on the Israeli military, but the question of proportionality must enter into the matter. My hon. Friend the Member for Birmingham, Northfield (Richard Burden) and my right hon. Friend the Member for Manchester, Gorton mentioned the lockdown on the west bank and the repression that, every day, in a thousand ways, crushes the spirit of the Palestinian people there.

I end by putting a further question to those on the Government Benches: does an end to the blockade mean an end to the blockade? In The Guardian last Thursday, the Under-Secretary of State for Foreign and Commonwealth Affairs, the hon. Member for North East Bedfordshire (Alistair Burt), was quoted as saying that that was not necessarily the case, and that we could not expect an end to the blockade immediately. I believe that we need an end to the blockade, and I would like to hear the Government say today that that is what they intend. I echo what was said by the right hon. Member for Tonbridge and Malling (Sir John Stanley): there should be entry of supplies not only for UN purposes, but for general purposes so that the population of Gaza, who simply wish to live ordinary lives, can succeed and thrive—to trade, to eat, and to behave in a way that we in this country would think normal. The blockade is a form of collective punishment, not a way of controlling terrorism. It would be helpful to hear the Government say that in terms today.

19:41

[Bob Blackman (Harrow East) (Con)]

Many congratulations to you, Mr. Deputy Speaker, on your elevation to your current position, some 30 years after we first met in a Committee Room elsewhere in this noble House.

The first, fundamental duty of any Government is to safeguard their citizens and borders, and to look after their people at home and abroad. As we come up to the 70th anniversary of the battle of Britain, we may ask, who would have denied our nation the right and duty to safeguard ourselves against the Nazis? Who would condemn Britain’s historical roles, both in the middle east and blockading the African coast to enforce the abolition of slavery back in the 19th century?

Many of our noted justifications for invading sovereign countries have been based on safeguarding our safety and security. Our reason for invading Iraq was that weapons of mass destruction could be implemented on our sovereign soil within 45 minutes. We are still searching for those weapons of mass destruction, but that was the reason that we were given. Our justification for occupying Afghanistan is, of course, to prevent al-Qaeda and other forces from setting up camps, planting bombs and damaging British sovereign territory. We must say to the Government of the day that as we win that fight, we must ensure that al-Qaeda and other such dark forces do not set themselves up in other countries, such as Yemen. We must remember that that is a big danger that we face.

Israel has fought a number of wars over the years since it was set up in 1948. Its recent experience of rockets and bombings, including suicide bombings, has been traumatic for all residents. The people of Israel have witnessed frequent suicide bombings, and suffered as a result of them. When the Israeli Government set up the wall, the incidence of suicide bombings dramatically reduced. If one were an Israeli citizen, one would say that the Israeli Government had done a wondrous thing. However, if one were a Palestinian, one would say, “You have done terrible things to us.”

Equally, what is Israel’s justification of the blockade? It is quite clear that since the blockade was implemented, the incidence of bombings and rockets coming into Israel has reduced, although such incidents have not ceased. The reality is that given the state of war between Israel and Hamas, Israel has the absolute right to enforce the position that rockets, bombs, missiles and ammunition must not enter Palestine or any area that can then attack the state of Israel.

We are challenged on the position of humanitarian aid, yet the state of Israel allows some 15,000 tonnes per week of humanitarian aid to enter Gaza. However, there is the role of Hamas: it holds up the aid. It uses it as an incentive to control the people of Palestine, and as a means of repression. Until it ceases its repression, the people of Palestine will not see the benefit of having a properly, democratically elected Government who truly represent them.

As has been said in many speeches today, Hamas says in its founding statement that it wants to destroy the state of Israel and wipe it off the face of the planet. It is very difficult to negotiate with people whose fundamental aim is to destroy one’s Government and one’s very being.

We must challenge the position taken on the flotilla and ask what its purpose was. Was it to deliver humanitarian aid? Absolutely; most of the people on those ships wanted to make sure that the citizens of Palestine and Gaza received humanitarian aid. However, behind it was IHH, an organisation with fundamental links to Hamas and al-Qaeda. The reality is that it sponsors terrorism, and it wanted to breach the blockade so that subsequently, once the blockade was removed, guns, rockets and other ammunition could be brought in, so that bombs could rain once again on Israel. It is understandable that the Israeli defence forces sought to prevent that from happening. On five of the six ships, they did so in a perfectly reasonable way, and people went about their business properly.

Let us look at what happened on 31 May, particularly on the Mavi Marmara. Many of the individuals concerned appeared to wish to be martyrs to the great cause. They attacked Israeli soldiers—remember, Israeli soldiers were injured during the boarding, and the reality is that they were attacked with weapons. There are two sides to the issue. Is it any surprise that Israel is concerned about inquiries? The Goldstone inquiry was almost certainly perceived in Israel as being biased against that state. When the inquiry came before the United Nations, the Labour Government’s representative refused even to vote on the issue.

[Mr David Ward (Bradford East) (LD)]

My understanding is that the Goldstone inquiry was independent, and that it was rejected by Israel because it did not like the findings.

[Bob Blackman]

The state of Israel rejected the inquiry as being biased and unfair. The reality is that the British Government refused even to vote on the issue; they did not vote for or against it. They did not even abstain. They just refused to vote. It is perceived as being not a fair and reasonable inquiry. On that basis, the state of Israel will most certainly say, “If we are to have another such inquiry, that can hardly be perceived to be fair or reasonable.” That is one reason why there is a difficulty with the whole approach.

There is, of course, a way forward on the situation. First, Hamas and Hezbollah must renounce violence, stop bombing Israel and recognise Israel’s right to exist. Israel must then lift the blockade, allow humanitarian aid in and ensure that a two-state solution can prosper and grow in an atmosphere of negotiation, peace and tranquillity. That will be hard on both sides, but that is what is required in the region to ensure that we move forward to two independent states able to exist side by side. Until all the nations that surround the state of Israel can accept Israel’s right to exist, and Iran retreats from its stated position of trying to destroy the state of Israel, potentially with nuclear weapons, the situation in the middle east will remain fragile.

19:50

[Emma Reynolds (Wolverhampton North East) (Lab)]

Thank you for calling me to speak, Mr. Deputy Speaker. I congratulate you on your new position.

Like many colleagues on both sides of the House, I shall concentrate my remarks on the situation in Israel. I visited Israel and the west bank last year and met politicians from both sides. The best and most hopeful meetings were those with politicians with moderate views, who were willing to make compromises and could see the conflict from the perspective of the other side. In that vein, I welcome the comments of my hon. Friend the Member for Bury South (Mr Lewis), who said that there is no contradiction between being a friend of Israel and a friend of the Palestinians, supporting a viable two-state solution.

During my visit, I was struck by the range and depth of those agreements, and I ask the Government how they will strengthen the voices of those moderates. Recent events filled me with great pessimism. The horrific incident on the Mavi Marmara sent a shock wave around the world, with widespread condemnation of the deaths of the nine civilians. The inquiry into the incident—I believe there should be an inquiry—must be judged by the international community as comprehensive, impartial and independent. Anything that falls short of those criteria will not be credible. I do not want to prejudge the conclusions of the inquiry, but questions about the conduct of soldiers aboard the ship must be complemented by searching questions about the planning of the military operation.

There must also be a wider understanding by the Israeli Government and the Israeli defence forces that they cannot use the justification of self-defence for any action that they choose to take. They must understand that there are severe doubts about the proportionality of their response in this case and others, and that the blockade of Gaza, in the wise words of my right hon. Friend the shadow Foreign Secretary, is self-defeating—a policy that has long been discredited and continues to push power into the hands of Hamas.

The people of Gaza are, in effect, faced with collective punishment, which in turn produces bitterness and resentment and pushes them further into the arms of Hamas, thereby frustrating the efforts of the more moderate voices that I mentioned. Allowing Hamas to control supplies of many of the goods that are smuggled illegally has strengthened its hand, not weakened it. The basic human rights of the people of Gaza have been denied for too long. The economy of Gaza is in ruins, with an unemployment rate of nearly 40%. Any hope of sustaining economic growth through exports is strangled at birth by the blockade. Not being able to export from Gaza has given more power and control to Hamas.

The restrictions and the poverty that they engender leave the people of Gaza without hope and drive them into the waiting arms of Hamas, whose only counsel is a path of confrontation and an endless cycle of violence and revenge. I welcome the work that the middle east envoy, Tony Blair, is doing to ensure that supplies will, we hope, go into Gaza, that the security concerns of the Israelis are respected and that weapons are not allowed into Gaza.

The proactive stance of the Obama Administration and their insistence that the Israeli Government should halt settlement construction is welcome. For too long the Bush Administration inflamed rather than helped the situation. Israel needs critical, not uncritical, friends. I urge the Government to do everything they can to strengthen the voices of moderation on both sides of this tragic conflict. Despite all that has happened, there are such voices, and our Government should put pressure on the Israeli Government, through the Quartet or bilaterally, to extend the freeze on settlement building beyond September.

The talks going on are, unfortunately, indirect talks. If the confidence-building measures of which my hon. Friend the Member for Bury South spoke are adopted, I hope they will lead to direct talks between the Israelis and the Palestinians.

[Ian Paisley (North Antrim) (DUP)]

Does the hon. Lady recognise that equally the Government should apply pressure to Hamas to ensure that the force that it uses is not successful, that the repressive approach that it takes is counter-productive, and that the authoritative way in which it goes forward is self-defeating?

[Emma Reynolds]

I could not agree more with my hon. Friend. I regret the fact that there have not been elections in Gaza, as there should have been, last year. They were also put off this year. The lack of democracy in Gaza reinforces the position of Hamas. We in the international community should do all we can to fight against the increase of its power.

Only if the indirect talks become direct talks will there be a chance of a lasting and viable two-state solution in the middle east. I look forward to all that the Government can do. We on the Opposition Benches will help them, where we agree with them, to bring that about.

19:57

[Nick Boles (Grantham and Stamford) (Con)]

Thank you, Mr Deputy Speaker. May I, too, welcome you to the Chair? You look very fine in it.

I welcome my hon. Friend the Minister to his post, which I know he will undertake as well as he has undertaken every other post in which I have worked with him in the past. I congratulate my neighbour, my hon. Friend the Member for Sleaford and North Hykeham (Stephen Phillips), on his excellent maiden speech. The whole House knows that the finest things come in small packages.

In this first debate of the new Parliament on the middle east, and the first debate in which I have had a chance to take part, I did not want to get lost in the thicket of the detail of the current negotiation and the rights and wrongs of every issue. I wanted to take a little time to step back and tell the House why, ultimately, I count myself a friend of Israel, first and foremost, in the middle east. That is because I think of some fundamental truths.

In my maiden speech last week, I talked of the achievements of the Labour Government in establishing full equality for all people in the United Kingdom. Let us look at the middle east and ask ourselves, where in the middle east is it best to be a woman, or where in the middle east is it best to be gay? In Egypt, personal status laws discriminate harshly against women on marriage, custody of children and inheritance. In Jordan, a country which I consider to be a positive force and one where the current ruler is trying to take it forward, more than 20 women per annum, according to Amnesty International, are killed for breaking social taboos. Israel had a female Prime Minister before any party in Britain had even thought of it, and it nearly had another one last year—I rather wish it had—in Tzipi Livni.

Think about a gay person in the middle east. In Syria, it is not so bad—three years in prison. In Iran, a gay person would get the death penalty. In Israel, a gay person can rise to be a general in the armed forces, and just last Friday 100,000 people marched in Tel Aviv to celebrate the equality of gay people in Israel.

So then I ask myself, where in the middle east is it best to criticise the Government in public? In Syria, it is simply not possible, because the state controls every single aspect of the media. Reporters Without Borders calls Iran,

“the Middle East’s biggest prison for journalists”,

but it ranks Israel higher than the United States as a place for press freedom—44th in the world and first in the middle east.

Finally, I ask myself, where is it best in the middle east to belong to a religious or ethnic minority? In Syria, Kurds and Jews are not allowed to take any part at all in political life. In Iran, one cannot even go to university without passing an exam on Islamic ideology, and one cannot get a senior post in any organisation unless one belongs to the majority Shi’a group. In Israel, Israeli Arabs have always had all rights—the same as Israeli Jews—except for one: they do not have to serve in the armed forces, because the state of Israel recognises that it would be unfair to set them against their Arab brothers. However, they can vote and be elected, and many have been. There is even an Arab-Israeli serving on the supreme court in Israel.

So let us be clear: for all its errors and excesses, which I and the whole House see, Israel is an oasis in a desert—an oasis of freedom, democracy and human rights in the middle east. We therefore have to ask ourselves, why does Israel do those things that shock, pain and worry us all? Why does it feel driven to inflict on the people of Gaza what we all recognise, whether in law or not, as seemingly like collective punishment? The answer is very simple: it is not just faced but encircled by an enemy that wishes to destroy it.

So before the House pulls on its breeches and starts saddling up the high horse, let us remind ourselves of how we—this place, this ancient democracy, this ancient birthplace of freedom—reacted when we faced an existential threat. We interned or deported long-time residents of German and Italian origin and refugees from Nazi Germany—to our everlasting shame. However, we did it, and with the approval of this House. The Americans did the same with Japanese Americans and German Americans, so we should be very careful before we start lecturing a nation that was built by the survivors of a genocide, which took less than five years to kill more than the current population of Jews in Israel.

Rather than lecturing and sitting on that high horse, we should ask ourselves, what practical things can we do instead of the huffing, the puffing and the futile outrage? I, too, welcome the role of Tony Blair in the middle east and in Palestine at the moment, so, first, we should do everything that we can to support the Palestinian Authority in the west bank and, in particular, Prime Minister Fayyad, so that Palestinian people can see an alternative to Hamas which delivers security, jobs and a normal life. That is all that they want. Secondly, we must do everything we can to encourage Turkey to remain aligned with Europe and the west, and not to feel that we do not want it in the European Union or as part of the western alliance. Turkey is key to us and to Israel, and we must ensure that Turkey knows it.

Finally, we must confront Iran. I am very glad that the Government played such a pivotal role in achieving the sanctions that the UN agreed last week. The middle east is a terrible area of the world, with so many problems, but in ending I share the optimism that some Members have expressed. Yes, the situation seems full of despair, but let us look at the progress that has been made. There is a peace treaty with Egypt, and I should point out that Israel has never attacked a nation with which it has a full peace treaty. There is a peace treaty also with Jordan, and across the Israeli political system it is commonly accepted that a two-state solution with an independent state for Palestinians is the right solution. I feel that progress is being made, and further progress can be made if we quit the lectures and just get down to supporting our friends and helping them to come to an agreement.

20:05

[Yasmin Qureshi (Bolton South East) (Lab)]

I was going to say something very different when I started listening to the debate, but after hearing the hon. Member for Grantham and Stamford (Nick Boles) talk about different countries’ rules, regulations and societies, I must say that that is no basis for invading, for killing or for destroying other people. One cannot say, “I’m a friend of Israel because it is a democracy.” We can be friends with Israel; I have no problem with the state of Israel. I welcome what my hon. Friend the Member for Bury South (Mr Lewis) said about the way to deal with the situation in the middle east. He said that the Palestinian people should receive land in proportion to their population. There should be an end to illegal settlements, and we should end the war, which has created so much misery for the Palestinian people.

We have to go back in history. In the 19th century, only 5% of the population in Palestine were Jewish; 95% were Muslims and Christians. In 1931, 18% of the people in Palestine were Jewish, resulting from the persecution of the Jewish people in Europe. Between 1947 and 1948, 78% of Palestinians were expelled from their homeland, and now Jewish people hold 75% of the land, whereas the Palestinians, who are larger in number, have only 25%. That is the dispute under discussion; that is the issue that the House must not forget. People have been expelled from their homes and blockaded, but some Members say, “We can’t see why people are being critical of the Israelis and why people feel that they should fight for the rights of the Palestinians.” I agree that there should be two states, but they should be created on the basis of equality—on the basis that 20% of the population own 75% of the land. When does that become fair? When is that right? Until we put those wrongs right, we will never have peace in Palestine.

I am surprised that people seem to have forgotten the history. Jewish people were massacred and genocide was committed against them, but it was carried out by western democratic countries—Germany, Austria and Poland; nobody in the middle east carried out genocide against the Jewish people. If the Palestinians are given their proper rights, I do not think that the state of Israel will have any problem with any of its neighbours. It would certainly finish Hamas, because Hamas exists only because such inequities exist. If we gave the Palestinian people their rightful homeland, if we gave them a proper share of the land and if we gave them security, Hamas would disappear just like that.

20:08

[Alistair Burt]

It is a pleasure to welcome you to your seat, Madam Deputy Speaker, on this, my first opportunity to do so. I thank all Members for participating in the debate. Time necessitates that I cannot deal with each submission. Suffice it to say that tomorrow in Westminster Hall there is a debate on Gaza, which will provide me with a longer opportunity to put forward the Government’s position and to respond to a few other issues.

Before I make some general remarks, I thank my hon. Friend the Member for Sleaford and North Hykeham (Stephen Phillips) for his contribution, which we all much enjoyed. He takes on a seat that Douglas Hogg held with that combination of mischief and brilliance of which he was such a unique exponent. Douglas will be sadly missed, but the gap is clearly going to be very ably filled, indeed. My hon. Friend spoke about a difficult subject with a lightness and self-deprecation that clearly masks a keen intellect. We sensed that when he touched on the seriousness of the issue. I am sure that we all enjoyed his contribution. We will certainly hear from him again, and we will welcome that.

On the debate itself, the hon. Member for Bury South (Mr Lewis) began with some thoughtful and reflective comments that illustrate why as a Minister he was so well regarded in both the House and his private office, which I have been fortunate enough to inherit. Freedom has allowed an even richer seam of belief and rhetoric to emerge. His sensitivity, through his faith, to those on all sides of the conflict caught up in incidents of death and misery, reflected the concerns of so many of us who agonise over the steps needed to achieve the realisation of a peace the architecture of which is seemingly so well known to so many people and has been for so long.

The later contributions of many colleagues on both sides of the House illustrated the complexities of the politics of the region and how easily the confidence-building measures of one run the risk of being a threat to another. It was inevitable that the House would concentrate on Gaza. With due deference to balance in many contributions, a number of colleagues examined the events of the other week from a deeply held conviction on one or other side of the divide.

I shall deal with some of the issues in more detail tomorrow, but I welcome the contributions made by my right hon. Friend the Member for Tonbridge and Malling (Sir John Stanley), the right hon. Member for Manchester, Gorton (Sir Gerald Kaufman), my hon. Friends the Members for Sleaford and North Hykeham, for Grantham and Stamford (Nick Boles) and for Harrow East (Bob Blackman) and the hon. Members for Bristol West (Stephen Williams), for Ayr, Carrick and Cumnock (Sandra Osborne), for Birmingham, Northfield (Richard Burden), for Hammersmith (Mr Slaughter), for Wolverhampton North East (Emma Reynolds), for Bolton North East (Mr Crausby) and for Liverpool, Riverside (Mrs Ellman).

The remarks made by my right hon. and learned Friend the Member for Kensington (Sir Malcolm Rifkind) were more about Iran than anything else, but in general the debate concentrated on Gaza. Hon. Members anxious about Gaza and angry at the activities and actions of Israel demonstrate why the Government urge a credible inquiry and change in Gaza to relieve the humanitarian situation while recognising Israel’s need for security. We need to create the environment so necessary for a viable, non-dependent economy and a people with reason to hope.

[Jeremy Corbyn]

Will the Minister give way?

[Alistair Burt]

No.

Friends of Israel, in the House and beyond, will no doubt reflect on the words of my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot), a long-standing friend and colleague. As much from experience and deep conviction as from his unquestioned support for the state of Israel, he posed a series of questions that will make uncomfortable but necessary reading in Israel.

At the beginning of the debate, I said that the middle east was a realm of culture, diverse history, faith and heritage. Despite that, we concentrated on places and circumstances that illustrate the other side of the middle east and show that history can be a burden as well as a blessing. If I have anything to offer in this context, it will be my determination to work with the House and the expertise of so many Members who care about this issue, to reflect the House’s passions and above all to champion its eternal determination to bring hope into the most difficult of situations.

The hon. Member for Bury South was not wrong to list the series of events that he and I have experienced and witnessed throughout our time in this House, a number of which have been personally shared by colleagues here. They range from standing amid the tear gas in apartheid South Africa in the ruins of Crossroads to opening ballot boxes in a free East Germany and cheering home President Obama—not so much for his party, but for what he represented in respect of change for the world and his country. How the House longs to add the middle east to that list.

The way will be long, tough, tortuous and unromantic. The House can and will play its part in offering balance and sharp inquiry—and, I hope, encouragement—to the many partners who will be playing key roles in securing the peace and stability that we long for in the middle east. We will return to these issues many times. I trust that in darker times to come, the light of hope, which the best of history can provide, will remain unextinguished by events, no matter how frail that flame may be from time to time.

Question put and agreed to.

Resolved,

That this House has considered the matter of UK policy on the middle east.

Emerging Economies

Monday 14th June 2010 Commons Chamber

20:15

[The Minister of State, Foreign and Commonwealth Office (Mr Jeremy Browne)]

I beg to move,

That this House has considered the matter of emerging economies.

I am delighted to have this first opportunity to speak from the Government Benches, and even more delighted to serve for the first time under your chairmanship, Madam Deputy Speaker. I trust that the high-preference vote that I gave you in the ballot will mean that you will look favourably on me if I go astray.

[Madam Deputy Speaker (Dawn Primarolo)]

The hon. Gentleman joins a long line of Members who have said exactly the same; I will, of course, be even-handed with everyone.

[Mr Browne]

I did not doubt that for one moment.

I welcome this opportunity to debate the new Government’s policy on the emerging economies. Strengthening the UK’s relations with the fastest-growing areas of the world economy is one of the key foreign policy objectives of the coalition programme for the next five years. That was explicitly stated by my right hon. Friend the Foreign Secretary when he opened the foreign affairs debate on the Queen’s Speech and observed that

“we live in a world where economic might is shifting to the emerging economies”—[Official Report, 26 May 2010; Vol. 510, c. 174.]

In the House, we all recognise the ongoing importance of Europe and north America to our foreign policy goals, but we must also be clear about where new opportunities increasingly lie. That means elevating our links with the emerging economies and expanding powers in other parts of the world as part of a distinctive British foreign policy. That is why, only a few days after the Government were formed, the Foreign Secretary and I were meeting counterparts from Mexico, Chile and several other emerging powers at the EU-Latin America-Caribbean summit in Madrid. The following week I also held talks with Foreign Ministers from Vietnam and Singapore, among others, at the EU-south-east Asia summit, which was also held in Madrid. I give an undertaking that I will be making our relations with emerging economies my biggest priority, with visits to several key partners, in the coming months.

Why is the issue so important? We live in a time of fundamental change, both economic and political. The last decade of the previous century saw a shift from the bipolar, cold war world that we had all become familiar with. The first decade of this century has seen another shift, just as dramatic, from a G8 world to a G20 world. Global economic decisions were once made by a grouping of European and north American nations in conjunction with Japan, but today such decisions are increasingly taking place within the G20—not only a much bigger group, but one that represents a much broader range of countries from every continent of the world. The UK strongly supports the G20, which reflects the economic realities of the 21st century and recognises the rise in the strength of powers such as China, India and Brazil. The next meeting of the G20, in Toronto a few days from now, will be an important opportunity to take this work forward.

It is impossible to get through one of these discussions without a barrage of fascinating statistics that people can take home, and I have a few to run past colleagues on both sides of the House. It is important to remind ourselves of how dramatic the change that we have lived through in recent years has been. In the past decade, China’s economic growth has averaged 9.9% a year, while the UK’s has averaged just 1.7% over the same period. India’s growth over the same period has averaged 7%. In 1980, China’s proportion of world GDP was just 2.6%; by last year, that had risen to 8.5%. According to some predictions, China’s economy may well equal that of the US as early as 2027, and by 2050 the Indian economy may well be bigger than the five largest European economies added together.

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

My hon. Friend talks about the statistics for China. It is important to realise how much of that growth is needed just for its economy to stand still. If growth falls below about 8%, then unemployment starts to rise. When we look at the Chinese economy from outside, we have to understand what a challenge it faces.

[Mr Browne]

My hon. Friend makes a very good point. Huge levels of growth, by European standards, are necessary to take the Chinese economy forward and to realise the aspirations of an enormous population, hundreds of millions of whom still live in absolute, as well as relative, poverty.

It is easy to characterise these debates as being about China, India, Brazil and other countries with large populations, but there are also regions, particularly in Asia, that are developing at a fast rate. The Association of Southeast Asian Nations countries—the south-east Asian bloc—have, between them, a larger population than that of the European Union. Over the past decade, they have had an annual growth rate of 5.7%— not as high that of as China, but still very high by European standards, albeit having started from a much lower base. If we think of groups of countries that are increasingly willing and enthusiastic about the prospect of working together as single blocs in that way, their relevance will be obviously apparent to everyone in this House.

[Mr Tobias Ellwood (Bournemouth East) (Con)]

My hon. Friend mentions China and the huge steps forward that it has taken in its growing economy. Its gross domestic product now stands at about 9.5% or 9.6%—growth that compares quite favourably with ours. Is it therefore right that we continue to provide that country with Department for International Development funds to the tune of—I may stand corrected—about £30 million a year?

[Mr Browne]

An interesting evolution in the power balance in the world is taking place, with these huge emerging countries. Although China’s GDP is slightly greater than ours, it is worth reminding ourselves that their population is 25 times higher, so their GDP per capita is very much smaller than ours. Hundreds of millions of people in China have yet to benefit from the huge advances that that country has made over the past decade or two. At the moment, we have this slightly strange situation whereby many of the emerging economies are the new powerhouses and yet still have millions of people living in absolute poverty. I think that there will be an evolutionary period in which they are apparently two slightly contradictory things simultaneously: they will require aid and assistance while becoming increasingly significant economic and political players. Over time, that balance needs to be reflected in the contributions that we make in aid.

[Mr Iain Wright (Hartlepool) (Lab)]

I welcome the hon. Gentleman to his post; I think that he will make a very fine Minister.

Developing the argument somewhat, in the next 20 years or so we will see growth in the middle classes across the emerging economies the like of which we have never seen before, with huge untapped potential that British companies can access in selling goods and services to them. What steps will the Government take to ensure that British companies can access those future market opportunities?

[Mr Browne]

I am grateful to the hon. Gentleman not only for his flattering comments but for his intervention. I will deal with that point as I proceed through my speech.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

What attitude does the hon. Gentleman take to emerging economies in what the European Union calls its near abroad? It seems to be keen to devote a portion of its aid—to which, of course, we donate royally—to those countries, whereas Britain’s philosophy, through DFID, has been that our aid should go to countries that are impoverished.

[Mr Browne]

I do not want this debate to be just about aid, because the emerging economies are important in many different ways, not only as recipients of our largesse. Let me proceed with some of the points I was going to make, not least those relevant to the comments of the hon. Member for Hartlepool (Mr Wright). If I do not cover them to the satisfaction of the hon. Member for South West Wiltshire (Dr Murrison) and others, perhaps we can return to them later.

There has been a truly transformational shift in economic and political power. That is a change that will have enormous consequences for Britain and about which we cannot be complacent. Although it is a challenge that may, in some ways, pose difficulties for us, it is also a great opportunity. It is worth saying—this is relevant to the point about aid—that about half a billion more people have been taken out of poverty as a result of these changes taking place around the globe: a figure that could not possibly ever have been achieved through international aid and generous donations from our country. It is a phenomenon that has transformed the life chances and opportunities of millions of people who previously lived in a state of destitution.

The World Bank has estimated that the global middle class is likely to grow from 430 million people in 1999 to more than 1 billion people in 2030, and most of that growth will be in the emerging market countries. That increase in middle class consumers is equal to the total population of the European Union, in the course of just three decades. If we are to see Britain’s economy growing strongly again, which must happen if we are to tackle the UK’s deficit and raise the prosperity of our own citizens, we must tap into these vast new markets.

We have huge economic advantages in this country. Britain is home to many of the leading global companies in the energy, retail, financial and communications spheres. We are an outward-looking and open country ranked by The Economist as the best place in Europe to do business. London is a global city and Britain is increasingly a global hub. Ours is a multicultural nation with connections across the world. We will use those connections to build and intensify our commercial, cultural and educational links. The English language is the most widely spoken in the world. It is the common language not only of international business but of science, academic research and the digital world. There are today more English language students in China than there are people in the United Kingdom, and English is the common tongue for business in India. This can only be good news for British businesses wanting to tap into these giant markets.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

Following the intervention by the hon. Member for Hartlepool (Mr Wright), will the Minister join me in paying tribute to people from these countries—not only those from India, who have historically been very proactive, but those from the Chinese public and private sector, and from Brazil and elsewhere—who are working hard in this country to ensure that we understand not only the opportunities for them, but the opportunities for us in their countries, in a way that they were not even beginning to do 10 years ago?

[Mr Browne]

I strongly agree with my hon. Friend. It is notable that, in many international companies and other organisations in which the management and the work force are drawn from right around the world, talent has become a global phenomenon. Many talented Chinese, Indian, Brazilian and other people work in London and throughout the United Kingdom and contribute to companies with British leadership and to the prosperity of our country.

[Mr Ellwood]

My hon. Friend mentions the importance of the movement of people with regard to China. Does he know that France and Germany attract around 500,000 visitors every year? I am afraid that we compare badly, attracting only 100,000. That is because it is far simpler for the Chinese to apply for the Schengen visa, which gives them much greater access to Europe. They are deterred from coming here because of the complexities and the distance that they must travel to get a visa. Would my hon. Friend consider Schengen plus, which would allow a bolt-on to the Schengen visa system to allow Chinese visitors to come to the UK?

[Mr Browne]

That is a matter that I may wish to bring to the attention of Home Office colleagues. I am sure that they will take my hon. Friend’s wider point seriously, and I want to deal with it in the remainder of my speech. It relates to the importance of not just Government-to-Government or even business-to-business relations, but of engaging on a person-to-person basis with many countries.

The economic shifts that we are witnessing are no less significant politically. I have already said that after the second world war we had a political settlement, which was essentially the cold war settlement based on Europe and north America. That is emphatically no longer the case. Of course, we must be careful about getting ahead of ourselves. The United States is still the dominant power in the world and likely to remain so for a considerable time. Gross domestic product per capita in the EU is still vastly higher than in China or India. However, the direction of travel is obvious.

Britain can and should be confident in our ability to succeed in the new order. We remain a respected global player. We are at the core of international decision making: we are a major player in the EU, the Commonwealth, the United Nations and NATO. We have a network of diplomatic and other missions that reaches into every corner of the globe, while maintaining the ability to exercise hard power when necessary.

Along with Britain's economic and political assets, our so-called soft power can also play an important role in ensuring that we retain our influence and prosperity in future. We are globally influential in subjects ranging from architecture to science and popular culture. We have global sporting connections, including the world’s most followed football league. The UK will be at the centre of world sport when the Olympics come to London in 2012 and the Commonwealth games to Glasgow in 2014. We have a unique asset in the BBC World Service, while the British Council connects millions across the globe to Britain’s culture and education.

The changing world order should not be seen just in terms of a GDP league table. As important, if we are to win the debate on important matters such as climate change and human rights, is our ability to lead on ideas. Just as we must lead in that competition of ideas, we must likewise provide leadership in the debate on fundamental values.

I have spoken in meetings with Foreign Ministers from around the world about not only our economic interests but the balance between the role of the state and the individual, and argued that economic growth was not the only measure of human well-being, but that civil rights were central, too.

[Mr Iain Wright]

rose—

[Mr Browne]

I will take the hon. Gentleman’s intervention, but I may be less generous afterwards.

[Mr Wright]

I thank the Minister for giving way; he is being most generous. Before he moves from economic power to soft power, let me say that resource constraints are an inherent risk in the movement eastwards of the world’s economy. I am concerned that the 21st-century equivalent of the scramble for Africa, in which emerging economies lock in trade deals with African nations to get commodities such as iron ore and oil, will compromise our ability to compete as a nation. What steps will the British Government take to ensure that British companies have access to hard-pressed resources and commodities in future?

[Mr Browne]

The hon. Gentleman makes another excellent point, about how we ensure that there is a global architecture of decision making and responsibility, which means that resource allocation and other political decisions are made in a framework of law and consensus. That is our foreign policy objective and why our foreign policy has to evolve to match reality. We cannot sit, King Canute-like, and try to cling on to the G8 and European-north American-centric architecture. We need a decision-making framework, which reflects the change in the status of different countries and allows us to make decisions in concert with them as we proceed with economic growth and political decision making in the decades ahead.

Much of the analysis that I have shared with the House is widely accepted if under-appreciated by some in our national discussion. We must now ask how we respond to that and what the consequences are for our policy making. Let me suggest three overlapping subjects as a framework for our debate in the next hour and a half or so. First and perhaps most important, we must make the case—and win the argument—for keeping global markets open to foreign trade and investment. A resurgence of protectionism in any of the markets about which I have spoken would be a far greater risk to the UK economy than the rise of those markets. We must also have a dynamic, outward-looking economy—this point was made by my hon. Friend the Member for Bermondsey and Old Southward (Simon Hughes)—that is not burdened by unsustainable levels of Government debt.

Secondly, we will significantly increase our cross-Whitehall effort to engage not only with the obvious, big emerging economies, but with the medium-sized emerging economies. We must also build on our solid co-operation with Japan, which remains the second-largest economy in the world. All of that will mean working with business to reap the opportunities in countries and regions whose cultures and languages may be less familiar to many of us, and getting the official dialogue right, including through more structured relationships at Government level with many such countries.

Thirdly, we must continue to invest in our political as well as our economic effort. The rise of emerging economies will make the world a more prosperous place, but it will also make it more complicated. A more multilateral world will require us to engage on key security issues with a wider cast of global actors, which will put an even higher premium on ensuring that we are all bound by the same international rules-based system. Upholding that will be the key task of our diplomacy in its widest sense in the years ahead.

That places a heavy burden of responsibility on the Foreign and Commonwealth Office. One FCO priority will therefore be to look at how we can best use our diplomatic network and shape our resources to ensure that we have the capability to make the most of the new world that is being brought about by the emerging economies. We are already being innovative in our representation overseas. I do not claim that such innovation started magically a month ago—it has been undertaken for a period of time—but I hope that we will accelerate it and give it extra momentum. We are using regional networks of experts and so-called laptop diplomats, among other innovative measures. In a difficult resource climate, we must ensure that our language training, including in Mandarin, Spanish and Arabic, is focused where we need it most. We will look at how to resource stronger UK engagement with the Governments, peoples and societies of emerging economies in the forthcoming spending round.

If we are to retain our influence in the new global, economic and political world, we will need to change and adapt. Our diplomatic effort will be focused where it is needed and adapted to the new realities, but our efforts must go beyond discussions between diplomats in capital cities. We must inspire business and community leaders throughout Britain to build relationships with their counterparts in the emerging powers. That task is not only for the FCO and the Government: I am emphatic in my view that that task is for our country as a whole and all the people who live in it. Everybody in our country needs to step back for a moment and ask themselves, “Are we able to think and act globally in a way that reflects the new realities of the world? Are we seeking better to understand and engage with the emerging global players? How does the UK media cover the rest of the world? How does our educational curriculum meet our global needs? How well can our major businesses reach out beyond our borders to the markets of the future?” The Government should and will provide leadership, but our national outlook needs to adjust to the rapidly changing global landscape.

[Dr Murrison]

That is all very well, but what do the Government plan to do to combine Government offices abroad? In particular, does the Minister agree that it makes absolutely no sense to have Department for International Development offices and FCO offices in the same capital? Surely to goodness if we are to have the joint working to which he refers, we need co-location.

[Mr Browne]

My hon. Friend makes an excellent point that echoes one made by my right hon. Friend the Foreign Secretary and others. How can we best concentrate our resource in countries and avoid duplicating Government functions or Departments in the same location? There is a wider point: although it is important for the FCO to give intellectual leadership and momentum to our policy making overseas, our policy is not simply about relationships between the FCO and other Foreign Ministries. Rather, it is about Britain as a whole visiting China, India or Brazil, which includes the Department for Business, Innovation and Skills, the Department of Energy and Climate Change and right across the board. We should not see emerging markets policy as a bolt-on, extra function of the Government that is divorced from our other deliberations in the House. Rather, it is a key function of the Government. It is led by the FCO, but it involves many Departments.

[Malcolm Bruce (Gordon) (LD)]

To take up the point that my hon. Friend has just made, in some countries our engagement is a development relationship, but we have both a high commissioner and a head of DFID. Are the Government prepared to consider whether those roles could usefully be combined? In some cases high commissioners or ambassadors have told me that they are only there to wave the flag because the only people that the host nation wants to talk to are those from DFID. Would it not be sensible to combine the two?

[Mr Browne]

I am grateful for my right hon. Friend’s expertise as the Chairman of the Select Committee. It is important that when we engage with countries, especially those that are substantial recipients of British aid, we have a joined-up approach in which the aid is not divorced from the wider discussions that we have with them. I do not mean that the aid should come with strings attached, but it is bizarre—when resources are stretched—for us to have competing Government offices in one capital, potentially with competing agendas, when there is scope for the money to be spent more efficiently and effectively.

It is possible to overstate the existing scale of the change. Britain’s GDP per capita remains high, our absolute prosperity—rather than our relative prosperity—remains high, and our economic, political and cultural leadership in the world remains very strong. But as a country and even as a continent—not just as a Government or Parliament—we cannot afford to be complacent. The world is changing rapidly. We need to engage constructively and energetically in that process of change so that we can shape it to ensure that Britain benefits as much as the new emerging economies from the opportunities that their rise undoubtedly offers. This task will be central to our future prosperity in the decades to come. We are already embarking on turning that goal into action.

20:42

[Chris Bryant (Rhondda) (Lab)]

Thank you, Madam Deputy Speaker. It is a great delight to see you in the Chair. I shall not reveal how I voted, but I did nominate you. This is the dawn of a new parliamentary era. [Hon. Members: “Oh!”] I apologise to the House for the quality of that remark.

I also welcome the Minister to his new responsibilities. He will be backed by a fine team of people, some of whom used to work to me. The quality of the advice provided in the Foreign Office is second to none, not only in relation to other Departments in this country but in relation to other foreign departments in other countries. I hope that the Minister lives up to them.

I have been looking at the Minister’s campaign website, which includes an interesting list of endorsements. Indeed, they have something of a theme. There is one from Janet, who lives in Taunton. She says:

“Jeremy is clearly the best candidate. He will be supported by former Conservative voters.”

Jez, also from Taunton, says:

“I’m afraid the idea of Mark Formosa”,

who sounds more like a plant than an animal—I mean, candidate—

“as an MP terrifies me! He is worryingly extreme.”

And Lavinia, from Wiveliscombe, says:

“Why is Mark Formosa so negative and nasty? I’m a natural Tory but I’m not supporting him!”

It is clear that throughout the election campaign the Minister had his eye on a Conservative-Liberal Democrat coalition. It was seated in his mind. It is little wonder that, with him in his new job, the Tory Back Benches have as many noses out of joint as the England rugby team—

[Mr Browne]

And the Welsh team.

[Chris Bryant]

No, we tend to specialise in ears.

The Minister is the first Liberal in the Foreign Office for some 60 years, so I did a little research into previous Liberal Ministers there. Captain Neil Primrose, who was one of the last four, lasted less than five months—

[Madam Deputy Speaker]

Order. The hon. Gentleman’s points are very interesting, but he needs to ensure that he stays in order and relates his remarks to the subject of emerging economies.

[Chris Bryant]

Captain Neil Primrose, who took a strong interest in emerging economies at the time, and particularly Turkey, which we shall come to, unfortunately lasted only five months in government, because the Government collapsed, and his daughter ended up marrying a Tory. Cecil Harmsworth, who also took a strong interest in emerging economies, is someone whose family gave us the Daily Mail—we often forget that it was the Liberals who did that. The Marquis of Reading had to resign for insider dealing after just three months in the job, while John Simon ended up virtually a Tory, so I look forward to observing the Minister’s career.

There can be little doubt that the shape of the world’s economy is changing, as the Minister said, and it is changing at a pace that few would have anticipated just a decade ago. Over the past 10 years, the BRIC countries, as they are often referred to—Brazil, Russia, India and China—have alone contributed more than a third of world GDP growth, growing from one sixth of the world economy to almost a quarter. There is also a growing confidence in many of those countries about their economic and cultural future, and they want a far greater impact on the world stage. Indeed, they are often impatient with progress at the United Nations and elsewhere. Thus, in April, Brazil saw its lowest unemployment figures since 2001, and it confidently expects growth to reach 6% this year, and this from a country that in 2002 had to secure an IMF loan—the largest IMF loan ever at the time—of $30.4 billion. India’s growth rate is expected to be 8.6%, while China has been averaging at 10% not just for the 10 years to which the Minister referred, but for the past 30 years.

Nothing, however, is certain—we only have to look at a little bit of history to see that. In 1913, Argentina was the 10th largest economy in the world and enjoyed significant advantages over many others: great natural resources, a well educated population and strong international ties to the United States of America, Spain, Italy and the United Kingdom. Today, however, Argentina languishes. Why? In part, I believe, because of the self-inflicted political turbulence that it has experienced; in part, because of—[Interruption.] I do not think that it was socialism—if anything, it was national socialism, which was rather closer to Tory philosophy in those days. In part, the reason was that Argentina failed to deal with inequality, but it was also—and primarily—an economic nationalism that created unnecessary barriers to trade. I would say to Argentina today that economic nationalism will do it no favours at all in the years to come either.

[Sajid Javid (Bromsgrove) (Con)]

Does the hon. Gentleman agree that one of the reasons why Argentina had all those problems was that when it defaulted on its debt a few years ago, it had both the largest budget deficit and the largest debt per capita on its continent? Does he see any parallels between that situation and the one that his Government left behind after 13 years of power?

[Chris Bryant]

Nice try, but we will come a little later to the problems that I see with the Conservative-Lib Dem Government’s approach to growth and why I think this debate points to some of the problems that we will see over the coming years. But no, I think that the problems in Argentina stretch back across 100 years. The Argentines failed to take advantage of their many strengths and they played their politics extremely badly. My fear is that they are doing exactly the same thing today.

The task for all those countries is to ensure their growth, while the task for us is to ensure that we match their performance pound for pound, real for real. It is worth bearing in mind how significant those economies are to the UK. To all intents and purposes, we are Russia’s banker, while we are Brazil’s seventh trading partner in terms of exports and India’s fourth. The emerging economies have become increasingly dependent on each other in recent years; thus China has now overtaken the USA as Brazil’s major partner. Our position in relation to the emerging economies should be to seek to do three things: first, build UK growth; secondly, fight bilaterally and on an international level for free and fair trade, rather than protectionist measures, which is something to which the Minister referred; and thirdly, constantly underline the importance of the rule of law and human rights.

Let me start with growth. I simply do not believe that it is possible for the UK to achieve a greater share of the markets, or a stronger role in the world, without a strategy for UK economic growth. The Foreign Secretary can huff and puff as much as he wants, but if the Chancellor is focusing only on cutting the deficit—whether through cutting expenditure or increasing taxes—and has no strategy for growth, we will have nothing to sell abroad, we shall lose out economically, and the Foreign Secretary will simply be left to manage the decline of our reputation abroad.

[Gordon Birtwistle (Burnley) (LD)]

rose—

[Malcolm Bruce]

rose—

[Chris Bryant]

I shall give way first to the newer Member, then to the old lag.

[Gordon Birtwistle]

Does the hon. Gentleman agree that, over the past 13 years—and probably even over the past 25—the products that we sell abroad have diminished because of Government policy? We now have very little to sell, apart from in the financial markets, because most of our manufacturing has moved to the emerging economies.

[Chris Bryant]

Strictly speaking, that is not statistically right. Yes, when Burberry tried to close its factory in my constituency, I fought hard to ensure that the business would not be taken to India or China. I do not think that most people would want to buy a high-quality Burberry product that purported to be British if it had not been made in the UK. Unfortunately, we lost that battle. However, we export a lot more than just financial services. For example, a lot of our exports relate to extractive mineral industries, which I shall come to in a moment—[Interruption.] I sense that Hartlepool is springing to its feet.

[Mr Iain Wright (Hartlepool) (Lab)]

I welcome my hon. Friend to the Opposition Benches, and I hope that he will apologise for the appalling nature of the gags. May I first take up the point made by the hon. Member for Burnley (Gordon Birtwistle)? I disagree with him, because the UK is still the sixth largest manufacturing nation on earth. We have moved along the value chain, in that we now provide high value-added manufacturing, such as that produced in Hartlepool by Heerema and by JDR Cable Systems. May I also press my hon. Friend on a point that he was starting to make? A UK growth strategy is sadly lacking in the new Government. The prospects for growth in relation to supporting and nurturing higher education and to higher value-added manufacturing are lacking. What does he think the Government could do to remedy that?

[Chris Bryant]

I am a bit distressed that my hon. Friend has just welcomed me to the Opposition Benches, but there it is. We came into the House at roughly the same time, and I will take that matter up with him later. He also made a good point about a growth strategy, which I will come to in a moment. First, I will give way to the slightly older Member.

[Malcolm Bruce]

Just refer to me as the old lag. On a detailed point, the Crombie overcoat company in my constituency went out of business—or at least contracted its business—because it had a major contract with the KGB, not because it had been successful in the free market. The point that the hon. Gentleman is making about a growth strategy is all very well—yes, we should have one—but can he divorce that from spending even more Government money and getting ourselves further into debt? Can he explain how we can have a growth strategy that does not involve spending more taxpayers’ money that we cannot afford?

[Chris Bryant]

I was about to do precisely that, so I am grateful to the old lag—

[Mr Ivan Lewis]

The honourable old lag.

[Chris Bryant]

Sorry—the honourable old lag. He is probably extremely right honourable, learned and gallant as well, for all I know.

We need to focus on three elements of a growth strategy in relation to the emerging economies. First, we need active investment in the industries of the future. We have only to take a cursory look at our exports to many of those countries to see that a large part of our engagement relates to old, extremely well established industries, notwithstanding the significant advances that have taken place in some others. For example, it is a simple fact that petrocarbons form the backbone of our world trade with many of the emerging economies. In India, pearls and rough diamonds are key exports, and, in many places, extractive industries dominate our balance of trade. In recent years, we have added telecoms to the list, as well as the pharmaceutical and IT industries, but the UK’s future has to spread further, especially into the low-carbon, green industries. I do not believe that that will happen without some degree of Government investment, however, and if we are too slow, others will gain first player advantage.

I presume that a Minister will be winding up the debate?

[The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Henry Bellingham)]

indicated assent.

[Chris Bryant]

I am grateful for that. The Minister who does so may not be able to answer all my questions, but I hope that he will write to me about any that he cannot.

What support will the Government give to British industry to compete in these green markets? The budget for UK Trade & Investment in 2008-09 was £316 million, with which it assisted 21,800 businesses that recorded an additional £3.6 billion of profit, which is equivalent to a £16 benefit for every £1 spent by UKTI. Will that budget rise or fall next year, and by how much?

[Mr Ellwood]

May I also welcome the hon. Gentleman to the Opposition Benches, and may I welcome, too, the many Labour Back Benchers who are present for this debate?

[Malcolm Bruce]

All one of them.

[Mr Ellwood]

Absolutely right.

The hon. Gentleman talks about the importance of green technology, but I am reminded of a fantastic company on the Isle of Wight—not far from my Bournemouth constituency—that made blades for wind turbines. For some reason, they could not be used in the UK, but they were manufactured to be used in the United States. That company closed down because it did not receive the support it needed from the previous Government. Does he now regret that decision?

[Chris Bryant]

Yes, of course I do—and I am looking forward to welcoming the hon. Gentleman to the Opposition Benches as well. Whether he will have to transfer his allegiance or we will have to change the Government in order to achieve that is another matter, but he makes a very fair point. I would, however, gently say to him that of course I accept that there will have to be cuts in the coming months and years, but I also believe that we must prioritise those industries where we can make the most dramatic difference and where we can maximise our chances of succeeding in the emerging economies.

The second thing we need to do is to learn some lessons about modern foreign languages. The Minister of State was rather complacent about the facts that India now uses English as its business language and many people in China learn English, rather than French as in the past. Unless we have a cadre of young people, and not only those working in the Foreign Office—[Interruption.] I think “cadre” is now a sufficiently anglicised word to be allowed in a debate and not to be out of order. Unless we have a sufficient number of people who speak modern foreign languages, and not just the useless modern foreign languages such as French, but the—[Interruption.] I have said that to the French; I think they realise there are problems.

[Dr Murrison]

Is the hon. Gentleman aware that not only has he just insulted the French, but he has also insulted a large swathe of the Maghreb, which has not been mentioned at all in the debate so far? That is a bit of a pity, in particular because one of our major trading partners in north Africa is, of course, Morocco, where the diplomatic language is French.

[Chris Bryant]

Yes, but I think that one of the things that has changed over the past 30 or 40 years is that whereas French used to be the most useful language because it was, for the most part, the diplomatic language around the world, that is certainly no longer the case. The most useful languages to speak at present are Mandarin, and Spanish and Portuguese because of Latin America, and we need to focus on Arabic as well.

My biggest concern is that the effortless British superiority with which we stride around the economic world means that all too often we are the only country that presents business people in other countries who do not speak even the rudiments of a foreign language. That is a big problem. [Interruption.] The Minister of State refers to the Deputy Prime Minister, and it is a delight that he speaks so many foreign languages, but I just gently say that it is important that the Government focus on this.

We did not get it right, and ever fewer people in the UK are learning foreign languages. My experience in the Foreign Office was that the number of people who spoke foreign languages has diminished, and the number who can confidently speak them is pretty low.

[Mr Jeremy Browne]

I am grateful to the hon. Gentleman for giving way as I wish to find a point of consensus with him. It is important not only that the Foreign Office trains to a high standard a sufficient number of diplomats who can engage with the emerging economies in the language spoken in each of those countries, but that we appreciate the wider challenge to our country, which I posed, of the educational curriculum and how well suited we are, not only within the Foreign Office or the Government, but as a nation, to deal with the emerging changes in the world.

[Chris Bryant]

Well, indeed.

The third thing that we need to do to enhance UK growth relates to students from emerging economies. In all, some 48,000 overseas students study in the UK and they are vital to the UK’s universities, as they bring in fees, ideas and an international perspective. Ever since Wong Fun graduated as a doctor from Edinburgh in 1855 there has been a large number of Chinese students in the UK. Their number has grown significantly in recent years, with nearly 5,000 starting new courses in 2008, along with 1,581 students from India.

The Conservatives were direct about this issue during the general election campaign, saying that

“our student visa system has become the biggest weakness in our border controls.”

They said that they would

“insist foreign students…pay a bond in order to study in this country, to be repaid after the student has left the country at the end of their studies”

and

“ensure foreign students can prove that they have the financial means to support themselves in the UK”.

By contrast, I note that the coalition agreement simply says that the Government will introduce new measures

“to minimise abuse of the immigration system, for example via student routes”.

I hope that the Minister will be able to tell us precisely what the Government’s intentions are. Will a bond be payable? Does he expect that this will cut or increase the number of students coming to the UK from emerging economies? Has the Foreign Office been consulted on this process? In particular, what plans does he have for the Chevening scholarships? The Chevening website already says that this year’s places cannot yet be confirmed, which means that people who have been offered places do not know whether they will be coming. When will the review be completed? How many students will be studying this year and for the next three years, and from which countries will they come?

[Mr Ellwood]

The point about visas is important. Bournemouth has a number of English language schools, which attract people from places such as China. The Labour Government introduced new guidelines so that people had to have a certain standard of English before they could even come to this country, thus defeating the purpose of their coming here to learn English in the first place.

[Chris Bryant]

I am only asking what the Government’s policy is—that is the job of the Opposition. The Labour Government did some things to ensure that significant loopholes that were being used to circumvent the proper immigration process were tackled. In particular, we decided to restrict the number of places available in northern India because there had been a sudden spike in the number of applications. Of course one has to be rational about this. I just want to know what conciliation has taken place between the Conservative and Liberal Democrat positions on this issue since the election.

In each of the countries that we are talking about there remain significant barriers to free and fair trade. In some instances we need to be sensitive to the political and cultural realities of those nations. For example, Mexico’s constitution forbids the ownership of that which lies under the earth by anyone other than Mexico. I hope that the Minister will press the Mexican Government for further reform of the energy law, so that British companies can help Mexico to realise its resources—I hope that he will write to me on that point. Likewise, we need to restart the Doha round with an enhanced offer from the European Union on the common agricultural policy, especially now that the EU-Latin America banana war is over.

In that regard, an additional issue needs to be tackled: the casual approach in several countries towards intellectual property. Every report on intellectual property has suggested that those countries that most carefully delineate and protect the fruits of human intelligence are those that stand the best chance of prosperity. That becomes a virtuous circle, because people invest in ideas, commercialise them and then reinvest the profits in education and research. I hope that the Government will use the international institutions to push through a stronger global understanding of intellectual property issues—particularly in relation to China—be it in respect of the work of a musician or a playwright, an engineer or a scientist.

One other barrier to free and fair trade is corruption. Many of these emerging economies still languish a long way down the list of openness and transparency, with South Africa 55th, Turkey 61st, Brazil 75th, China 79th, India 84th, Mexico 89th and Russia a shocking 146th on Transparency International’s corruption perceptions index, which I think is much respected by all.

As I have said, we need to use bilateral and multilateral levers to try to change all that. The most important of those is the European Union. For too long, Europe has allowed itself to be run ragged by the likes of Russia, China and India. If European countries are to flourish economically, we have to realise that we need greater unity based on self-discipline in our approach to those growing economies. Likewise, we need a common approach to Turkey—a country that is all too often left off the list of emerging economies, despite already being the 16th-largest economy in the world, and on the up. It must be in the UK’s interest for the Bosphorus tiger eventually to join the European Union.

On human rights and the rule of law, it is always tempting for a British company or Government to sideline human rights abuses when trying to secure an important new contract. However, that is always a mistake, as tacit acceptance of the status quo in terms of unscrupulous business practices all too often rebounds on the careless investor. In many of the countries that we are talking about, the human rights record is truly appalling. Russia, for example, is, economically, virtually a monogorod, or a town built on a single industry—petrocarbons. As the petrocarbons industry involves massive investment projects with potentially high returns and equally high risks, the Russian Government take a very direct interest in every aspect of it, but anxiety about excessive state intervention, about state appropriation of private assets and about corruption at the highest level has made it difficult for British companies to make the long-term investment needed to keep pipes running. When one adds to that the scandalous oppression of the media, the murder of journalists, the imprisonment of dissidents and the regular use of torture by the police and in prisons, it is a pretty heavy indictment of the Russian leadership. I am delighted that President Medvedev has made some excellent comments about tackling corruption, but so far that is just rhetoric, and very similar rhetoric to that used by Mr Putin when he was President.

I could make similar comments about China, which executes more people than the whole of the rest of the world and where there is the ongoing disgrace that is the treatment of the people of Tibet. In Brazil and Mexico, notwithstanding the efforts of Presidents Lula and Calderon, drug-related violence is endemic, especially in Mexico, torture is commonplace, and the rights of indigenous people are not fully recognised. In India, too, there have been unprovoked attacks on minorities—in Orissa state against Christians, and in Assam and Andhra Pradesh against Muslims. In that context, I ask the Minister which human rights projects in each of the emerging economies he proposes to continue and which he will cut. Will the project on the rights of children in the legal system in Brazil survive? Will the training of judges aimed at reducing the use of the death penalty in China survive? Will the civil society project in Chechnya continue? Or will all the human rights work in India, Russia, China and Brazil that is sponsored by the Foreign and Commonwealth Office be cut?

There is a tendency for Foreign Office Ministers—I confess that I did this myself—to declare whenever they arrive anywhere that they want to improve relations with that country. After all, it is only polite, and that is normally the aim of the visit. I am sure that we all want to improve trade with the emerging economies, but that requires a consistent approach to free and fair trade, a determination to assist British businesses abroad and a commitment to the British values of the rule of law and human rights. Above all, it requires a strategy for UK growth, but through all the hype, spin and glorious guff that we have heard from the new Government, the one thing we have not yet had is any sign of a strategy for growth.

21:08

[Laura Sandys (South Thanet) (Con)]

Thank you, Madam Deputy Speaker, for allowing me to contribute to this debate and to make my maiden speech.

I have worked in many parts of the world, including in many emerging economies, and I have seen the growing asymmetry in how business is done in parts of the world that are growing at a faster rate than ours and with whom we will need to do business if we are to maintain our global economic position. That is a real challenge for us all and I will be keen to contribute to further debates on the need for stronger relationships between the United Kingdom and those emerging economies, particularly those in the area of central Asia that I think is not well understood and with which our relationships are not as deep as they should be. However, my priority in the House, for as long as the people of South Thanet so choose, is to serve them and to ensure that the House and this Government support their needs and address their concerns.

I pay tribute to my predecessor, Dr Ladyman. He was an exceptionally committed Member of Parliament for South Thanet for 13 years, and held two distinguished posts in Transport and Health. On a personal note, he was extremely courteous and generous throughout our four-year campaigning trail together. I wish him great good luck in his new job as chief executive of a retirement home company. I know that in that role he will show the same commitment with which he served the people of South Thanet.

I live in and represent one of the best-kept secrets in the country—a series of towns and villages that demonstrate what is best about this country. I know how beautiful, how surprising and how unique each of the towns is that I represent, but over the last four years it has been particularly rewarding to see the number of supporters who came to South Thanet—some of them are here tonight—and who gasped with excitement when they saw the beauty of Ramsgate harbour, who saw that Broadstairs is one of the most perfect seaside towns, and who were staggered by Sandwich, which is considered nationally the most perfect medieval town. Even in Cliftonville, the poorest ward in the south-east, people recognised its architecture and its potential.

South Thanet has a particular relationship with the House. I live about a quarter of a mile from where Pugin built a church and his house. Ramsgate has many of the same architectural icons as the House, so there is a part of this place in South Thanet and a part of South Thanet here.

It is not just the place itself. The people of east Kent and South Thanet have attitude. We are independent. We have stood up against many wars and we have been on the front line against many invasions. I was privileged to be at the 70th anniversary of the Dunkirk little ships. Many people from my area, whether fishermen or small boat owners, went in their boats to save 300,000 of our soldiers who were on the beaches of Dunkirk. I am proud to represent such courageous and independent people in the House.

We have come into government at one of the most difficult times for many generations and what we achieve in the next five years will define our future for the next generation. I am sure that none of us on the Government Benches are under the illusion that we will not have to do things that will make us unpopular. What we must be judged on is whether we are being fair and whether we are rewarding those who take responsibility.

It is on fairness and responsibility that I want to contribute to the debate. This week is the start of carers week. In South Thanet, we have one of the largest numbers of carers in the country. Coastal towns have a high percentage of carers. Young, old, frail, healthy—carers are selfless family members whose lives become dominated by the responsibilities they voluntarily take on. Being a carer is not subject to any working time directive; carers are full-time, on call 24 hours. Their lives are dominated by the needs of others. When helping those with chronic illnesses, they often forfeit their own life, and certainly their livelihood. Having watched my mother look after my father for five years before he died, I have seen at first hand the toll that can be taken on the carer.

We need to ensure that we put carers at the heart of our review of care for the elderly. It is crucial that we look at the role they play. In many ways, they will be one of the front lines in public services in the future. I urge the Government to ensure that we support those who support their loved ones. We need to look again at providing respite for carers. We need to review the cut-off of carer’s allowance when people reach pensionable age—just when they need it most—and we need to place the carer’s role at the heart of our review of care for the elderly.

When we leave the House—not for many years, we hope—we might all need carers, or we might all need to care for others. I would prefer that to be done by a loving relative—someone who will be there for me in my time of need—and I am certain that many other Members would, too. As the Prime Minister says, we need to reward those who take responsibility, and never can that be better said than about 6 million carers who give up their lives and selflessly give their time to their loved ones.

21:15

[Alok Sharma (Reading West) (Con)]

Thank you, Madam Deputy Speaker, for the opportunity to make my maiden speech. I start by congratulating my hon. Friends the Members for Sleaford and North Hykeham (Stephen Phillips) and for South Thanet (Laura Sandys) on their excellent and moving maiden speeches.

My constituency of Reading West was created in 1983 and was served from then until 1997 by a Conservative Member, Sir Anthony Durant, who previously represented the Reading North seat between 1974 and 1983. Sir Anthony was an excellent constituency MP, who served the people of Reading with great distinction. In recent months, Sir Anthony has not been in the best of health, and I am sure that hon. Members on both sides of the House will join me in wishing him a speedy recovery. [Hon. Members: “Hear, hear.”]

My immediate predecessor was the Labour Member, Martin Salter, who represented Reading West for 13 years. No one who knows him could ever describe Martin as a shy and retiring individual. He always had and continues to have firm opinions on every political subject. Indeed, during his time as an MP, he sometimes held two opposing firm opinions on the same subject, both delivered with great conviction. A constituent of mine once compared Martin Salter to Marmite by saying, “You either loved him, or you wished that you had never opened the jar to let him out.” Despite our many political rows and differences during the four years that I was a candidate and he was the Member of Parliament, I grew to rather like Martin, but then I must also confess to liking Marmite.

Martin Salter announced last year that he would not be seeking re-election because he wanted to

“move on and do something else with my life while I’ve still got some energy left.”

Martin Salter certainly brought energy to his work on behalf of the people of Reading during his 25 years of public service—first, as a local councillor and then as the Member of Parliament for Reading West. Like Sir Anthony before him, he was a champion of local causes, a dedicated constituency MP, and he stood up for all the people of Reading West. I very much hope to continue in that fine tradition and serve each and every one my constituents to the best of my abilities.

I turn now to my wonderful constituency of Reading West, which stretches from the villages of Theale, Tidmarsh and Pangbourne in the west, to the more urban areas of Coley and Whitley towards the east. I grew up and went to school in Reading, and for me Reading is, quite simply, home. It is a confident and vibrant town full of aspirational and hard-working people. As a settlement, Reading was founded in the 8th century and was listed in the Domesday Book as a growing population centre—much as it is today. Reading abbey was built by Henry I in 1121, where he is also buried.

Although Reading has a long and honourable history, it is now very much a modern place. Originally famous for producing beer, biscuits and bulbs, Reading is now a high-tech and service industry hub and is home to many locally grown businesses, as well as international companies, such as Microsoft, Oracle and Cisco.

Reading also offers culture, with the internationally renowned Reading music festival being held every August. Hon. Members with a liking for contemporary music should know that a few tickets are still available for this year’s festival. The very fine Madejski football stadium is located in my constituency, and I am sure that, before too long, we will see Reading football club return to its rightful place in the premiership.

In their maiden speeches many Members have mentioned great historical figures who are connected with their constituency, but, as I said, Reading is a modern place, so I would like to mention just two of the recent renowned sons and daughters of our great town. Kate Winslet was born and grew up in Reading. Her parents are constituents of mine. We are very proud of Miss Winslet’s Oscar-winning achievements. Locally, Miss Winslet’s mother is also a winner. Last year she was awarded first prize in a local pub’s pickled onion-making competition. Who says Reading cannot match Hollywood’s glamour?

The comedian and actor Mr Ricky Gervais grew up in Whitley, not far from where my parents lived when they first moved to Reading. I do not know Mr Gervais personally, but it is entirely possible that we loitered in the same shopping precinct when we were youngsters. Of course, one of us has now gone on to great things—and the other has become a Member of Parliament.

I am very pleased to be making my maiden speech during this debate on emerging economies, one of the largest of which is India. I know a little of the country. My family hails from India originally; I have advised European companies on doing business there; and some months ago I visited India on a research project and interviewed a range of corporate leaders, civil servants and opinion formers to hear their views on India’s development and economic ambitions. What is absolutely clear is that over the past decade the relationship between emerging economies such as India and China on the one hand, and the industrialised nations in the west on the other, has developed from one of the emerging economies being junior partners to a relationship of equals, with real potential for the likes of China and India to emerge as first among economic equals.

The emerging economies present challenges for us. We have seen some British jobs offshored to low-cost locations. With increasing globalisation and cost pressures on corporates, a certain level of offshoring is here to stay, whether we like it or not. But emerging economies also present a huge opportunity for British companies and jobs in this country. The Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Taunton Deane (Mr Browne), talked about statistics. Let me give the House a few on India. We have heard about annual growth rates of 7 to 9%. There is a middle class of around 400 million people and growing. Well over 60% of the population is aged below 35. India is looking to make significant investments in its infrastructure, in pharmaceuticals and health care, IT, green technologies, and food and agriculture, to name just a few sectors ripe for investment and growth. We in Britain have leading companies with significant expertise and know-how in many of these and other sectors.

In Reading, I have met home-grown technology companies that are exporting value-added products across the world. As a Government, we should be doing everything we can to help and encourage our companies to take advantage of the growth markets in the emerging economies. That will in turn help to create value-added and long-term jobs in the United Kingdom.

I was very pleased that the Gracious Speech made mention of developing an enhanced partnership with India. Because of our shared history and the mutual good will and affection between Britain and India, we already have a special relationship on an emotional level. We now need to make sure that we translate that good will and understanding into a special relationship based on trade and commerce to our mutual benefit. If we can do that in a timely manner, it will be to the advantage of British companies and will help safeguard and create jobs in our country which will be vital as we aim to grow and expand the British economy.

21:23

[Jesse Norman (Hereford and South Herefordshire) (Con)]

Thank you, Madam Deputy Speaker, for letting me catch your eye, and welcome to the Chair. I also welcome Ministers to the Dispatch Box and congratulate the hon. Member for Rhondda (Chris Bryant) on his position on the Opposition Front Bench.

I have a huge personal interest in the emerging economies, and it is a great joy to be able to speak here tonight. Many years ago, I ran an educational charity giving away new medical textbooks throughout eastern Europe during and after the communist period, and it has been a particular delight to hear the expertise displayed by my hon. Friends the Members for South Thanet (Laura Sandys) and for Reading West (Alok Sharma) in their excellent maiden speeches.

I was in eastern Europe at a time when civil society was the subject of constant political oppression. Economic activity was shackled by commissars and petty regulation, and industry was funded by an open chequebook from Government. The result was colossal debt and economic stagnation. How very different from the situation that faces the UK today.

I know that every Member of this House will join me in saying that it is the greatest honour of all to be chosen to sit in this august Chamber; to have a share, however small, in the supreme sovereign authority in this country; and to walk in these hallowed halls and corridors, as so many extraordinary men and women have done before us. First impressions are not always so favourable; one thinks of Mark Twain, who said—I hope that the House will forgive my accent—“When I first came to Memphis, I found men drinking and gambling, and open prostitution in the streets. It was no place for a Presbyterian—and I did not long remain one.” As for me, I enter this House as I hope I will remain—filled with a sense of due reverence and due responsibility.

I feel doubly privileged, in that I stand here as one of two tribunes for the people of Herefordshire. Truly, Herefordshire is a glorious county, known throughout the world for the quality of its cider, its beef and its soldiers. Such is its beauty that it has been only slightly disfigured by a recent association with the noble Lord Mandelson, who has added “of Foy in the county of Herefordshire” to an already rather extensive title. I alert the Member for Hartlepool (Mr Wright) to that unfortunate precedent. Alas, we still look in vain for the tidal wave of public subsidy that usually accompanies Lord Mandelson wherever he goes.

My constituency stretches from the Black mountains in the west to the Forest of Dean. It encompasses the aptly named Golden valley; the gorgeous Monnow and Wye valleys; and Hereford itself, with its magnificent cathedral and Mappa Mundi. It has apple orchards, lovely churchyards, fine, rolling arable land, wildlife and pasture, stretching all the way down to Ross-on-Wye and the spectacular rock of Symonds Yat.

I am not, in fact, the first Norman to be returned to Parliament from Herefordshire; that honour goes to its very earliest representatives, Rogerus le Rus and Ricardus le Brut, who were summoned to meet at Westminster on 15 July 1290, in the reign of Edward I, barely 200 years after the Norman conquest—the first Norman conquest, that is. At the time, Herefordshire was regarded as the farthest outpost of western civilisation—a status which, some Herefordians would argue, it retains to this day.

South Herefordshire has always been well served by its MPs, and I would like to pay particular tribute to my predecessor Paul Keetch, a Herefordian born and bred, who built up a reputation over 13 years as a fine constituency MP. Hereford city reputedly has the largest container of alcoholic beverage in the world—I should say, outside the Palace of Westminster—at Bulmers, and Paul has worked very hard over many years to protect and support the cider industry, most recently against the ill-advised depredations of the cider duty. I should also like to pay tribute to Sir Colin Shepherd before him, whom many hon. Members will recall for his 23 years of dedicated service to this House. He and his wife, Lady Lou, have been tireless in their support of the county and of its newest MP.

But Herefordshire is not, or not yet, a garden of Eden. On the contrary, it has many social and economic problems that demand vigorous public action. Like other rural areas, it has not been at the top of the Government’s agenda in recent years, to say the least. On the contrary, our schools are the third worst-funded in the UK. Local wages are very low. Farmers struggle with the many inadequacies of the Department for Environment, Food and Rural Affairs. Young people lack decent leisure facilities. The very idea of a functional broadband connection, or even of a decent mobile telephone signal, has yet to be entertained in many parts of my county, and Hereford, a lovely medieval city that received its royal charter in 1189, is being strangled by traffic. Those, and greater support for higher education in the county, will be among my personal priorities as the new MP.

However, we are not sent to this House only to represent our constituents; we are also sent here to play a role in the wider governance of this country. The new Government have made a superb early start in opening up sources of data about spending across the public sector. But what matters is not merely what we think about, but how we think about it. Our task is to remedy not just a colossal failure of governance over the past 13 years, but a colossal failure of thought. Politicians are generally nervous about talking about abstract ideas. In the words of the late great Ernie Bevin—here I will not attempt an accent—“Open up that there Pandora’s Box, and who knows what Trojan ’orses won’t jump out of it.” But of course to dismiss ideas is itself to be ruled by an idea. Ideas are always in charge. So it is important—nay, vital—to choose the right ones.

Now, the idea of revolution is never dear to a conservative, but even Edmund Burke would agree that we need a revolution in how we think about economics in Government. Over the past two decades the British Government have become steeped in a 1970s textbook caricature—a view in which markets are always efficient, prices reflect perfect information, and institutions are nowhere to be found. One would be tempted to call such a view neo-liberal, were we not in a time of coalition government.

Worse than that, the deep assumption remains that human beings are purely economic, rather than social, animals. This dismal gospel regards the human world as static, not dynamic—as a world of fixed social engineering, not one of creation, discovery and competition. In policy terms, this textbook economics takes power away from local people. It encourages centralisation and top-down meddling. It pushes us towards an inefficient, inhumane and factory-style view of public services. It is absurdly risk averse. In its apparent inevitability, it stifles public debate about other, more thoughtful approaches. Above all, it actively undermines the ideas of public service, public vocation and public duty—ideas which, I know, lie close to the heart of every Member of this House.

Now is the moment to re-examine these assumptions. Politics is not a subset of economics, and economics is not a subset of the financial sector. GDP growth is important—goodness knows that is true now—but so are flexibility, resilience and, above all, entrepreneurship in our economy. We need a new economics in our Government, not the desiccated economic atomism of the old textbooks, and we need to see people for what they really are, as bundles of human capability, creative, dynamic and fizzing with imagination and potential.

If we do this, and only if we do this, we can revive our economy on a huge billow of human energy, one that is barely conceivable within our current conventional economic models, and we can help to restore the trust and the mutual respect that our society so badly requires. It was that great—and rather conservative—economist, John Maynard Keynes, who once warned politicians not to be the slaves of some defunct economist. So let us all cry freedom and move on.

21:32

[John Howell (Henley) (Con)]

Let me start by thanking all the hon. Members who made maiden speeches tonight. I suspect that when I came into the House after a by-election colleagues breathed a sigh of relief at the fact that they had only one maiden speech to concentrate on. Tonight we have had three, but they have been three excellent speeches. I particularly welcome a fellow central and east European cold warrior to the Conservative Benches, particularly in the context of this debate.

It is nice, too, to return to a subject that I left professionally almost a decade ago, when I was the author of the Ernst and Young emerging markets reports. It was a monthly attempt to score key markets for attractiveness, principally from the point of view of foreign direct investment. The big emerging markets of the day were in eastern Europe, which seem still to be the big emerging markets of today, as if nothing had happened. Many are still on the list, despite being members of the European Union. Then, as now, the big enigma was the role of Russia.

In the intervening decade there seems to have been in the field a long march of taxonomists, who have sought to subdivide emerging markets almost ad infinitum. The Financial Times divides them into advanced and secondary emerging markets, based on national income. Morgan Stanley divides them into developed, emerging and what it calls frontier markets. There is a core group of markets on which everyone agrees, with a few others, such as Saudi Arabia, around the edges.

I am not sure that such taxonomy is of any use. What we are still dealing with are industrialising countries with large growth and large potential, accompanied by equally large risk and insecurity. Most of that taxonomy, anyway, is capital markets-driven, but a very different picture often emerges if one looks at those economies not as capital markets, but as markets for foreign direct investment or for export. Indeed, when for a brief while I presented business programmes for BBC World Service television, I visited more emerging countries’ stock exchanges than I care to remember. Undoubtedly the smallest but one of the most enthusiastic was that in Mongolia, but we should remember that the Mongolian stock exchange is not there to generate capital for its companies; it is there as a social device for the equitable distribution of newly privatised assets, most of those by means of mass or voucher privatisation, which the UK has sponsored. Inevitably, those are high-risk procedures, but experienced capital-market players can largely cope with such risks.

A good question is how we define the difference between emerging economies and emerging markets. We are talking about the attractiveness of such economies in business terms, with their export-led focus, use of agents, joint ventures and, indeed, direct investments. In my time as a partner at Ernst and Young, I helped many small and medium-sized enterprises into emerging markets, but we have to be realistic, because one of the biggest constraints on them is the amount of time involved in entering such markets.

Sadly, the majority of SMEs that came to me for advice came when they were on their last legs in the UK—their markets having disappeared for one reason or another—and they wanted an emerging market and an emerging economy as a means of getting them out of their problems. I am not saying that that cannot be done; it can. The company that I set up with a business partner did so, but it meant that one of us was always on the road, particularly as our first major project was to produce what I can only describe as a pop video of Manmohan Singh, to be shown at an international conference. It was incredibly difficult, because the essential humility of the man meant that his character did not fit into the pop video class. The business meant having to be away for quite a long time and, in a business with two principals, one can imagine the difficulties that arose.

We need to take a balanced view of individual countries, and to make an assessment that some will need more help than others and more encouragement from Government if they are to export. There is a lot of talk about the emerging economies that are in fashion today and out of fashion tomorrow, but not all of that is based on the objective, analytical criteria of companies such as Morgan Stanley; much of it is based on gut feeling.

We spoke earlier about one barrier being the difficulty of language, but one that is frequently overlooked is the difficulty of culture. I remember how, at an INSEAD seminar, the most distinguished cultural scientist on the matter, Fons Trompenaars, put forward his view on cultures and how that can help people assess them and do business. His view is based on a number of individual dilemmas that he put to about 15,000 people throughout the world.

The most famous is known as the dilemma of the car and the pedestrian. Essentially, we are in a car driven by a friend who exceeds the speed limit and knocks down a pedestrian. On the question of the driver’s expectation that we will lie for him, the worst place in the world, according to Fons Trompenaars, is Canada, where 96% of people would shop their friends to the police. Emerging markets, however, are some of the best places to have friends: in South Korea, 26% would shop their friends; in Russia, 42% would; and in China, the figure is 48%.

Those responses should not be taken literally, but they are indicative of how much obligations to the state outweigh obligations to individuals. [Interruption.] The Minister of State, Foreign and Commonwealth Office, the hon. Member for Taunton Deane (Mr Browne) laughs, but Britons figure at 90% on that scale, so the UK is not too good for friendship. Interestingly, however, those questioned in the UK asked how seriously the pedestrian was hurt. If they were more seriously hurt, there was more of an obligation to the state than to the individual. One has only to cross the channel to obtain completely the opposite result, where the more the pedestrian is hurt, the more the driver obtains our assistance in lying, because their punishment would be more severe. That may seem academic, but I recommend the work of Fons Trompenaars to hon. Members; it provides a useful, pragmatic framework for considering emerging markets. For example, it draws out the frequency with which developed countries depend on legal agreements and big contracts.

[Gordon Birtwistle]

My concern, which the hon. Gentleman may well be able to answer, is about the fact that the emerging markets have now taken away our heavy industry—shipbuilding, steel and things of that nature. How do you see this country fighting back against the emerging markets, with jobs of the future? I accept that we have advanced engineering in aerospace and other such sectors, but many residents of the country do not have the skills to be involved in that type of industry. How do you see the UK fighting back against the emerging markets in respect of less skilled jobs?

[Mr Speaker]

Order. I gently point out to the hon. Gentleman that I do not see anything, although I think that the hon. Member for Henley (John Howell) will.

[John Howell]

I thank the hon. Gentleman for his comments. Clearly, British industry still has a big role to play in emerging markets, but we need to be realistic about in which markets it can play that role, what assistance is needed and what size companies can play in which markets.

The dilemma that I was discussing draws out the frequency with which developed countries depend on legal agreements, big contracts and lawyers, and how relationships tend to get ignored. Emerging markets, however, depend more on the relationships that are built up; the handshake comes first, rather than the contract—hence the amount of time required to develop business in them. That is important not only for foreign direct investment or the export trade but for capital markets and understanding the role of supervisory regimes—the structure of those market institutions and how the regimes are approached. The point is also a crucial piece of understanding about how such countries will perform in international forums. One thinks immediately of the expectation of honouring OECD template agreements, which are the lowest common denominator but often do not fit within the cultures of the countries that we are talking about.

I respectfully suggest to Ministers that the issue also appears in diplomacy. When I was leading a delegation of British business to a G7 meeting, I remember being able, because I had the benefit of such an understanding of cultures, to get the Hungarians and French on side with us Brits to overturn an American proposal for Russia to simplify bureaucracy by introducing a new ministry. The proposal was quickly defeated; the Hungarians got on board and the French commented that they had never previously recognised that a Brit could understand la psychologie.

That provides a link to another issue as well. Part of the reason why some emerging markets never fully emerge is their lack of understanding of the fact that economics and politics cannot be separated. It is difficult to find an emerging economy that is not also an emerging or problematic political system. Russia is the principal example of that—bedevilled by an incomplete set of reforms that left politics behind economics.

The know-how fund was one of the institutions set up by the previous Conservative Government, who appreciated that market economics needed to go hand in hand with democracy. Their well placed £100 million or so laid the ground for much of eastern Europe to come into the European Union. The know-how fund was aimed not at Governments but at providing assistance to NGOs to build capacity on the ground. That is still a good approach. Sadly, however, the know-how fund was not allowed to finish its work in Russia.

The shadow Minister, the hon. Member for Rhondda (Chris Bryant), took the biscuit when he complained about the position in which Russia was left, given that it was his Government who abandoned the know-how fund, turning it over to the European Union as part of a multilateral package. They also abandoned the east European trade council and the British Association for Central and Eastern Europe. In a debate in 2008, the hon. Member for Birmingham, Edgbaston (Ms Stuart) pointed out that since 1991 BACEE, a small organisation with a minuscule grant in aid from the Foreign Office, had had more than 5,000 politicians, civil servants, judges, journalists and business people from countries of central and eastern Europe participating in its programmes as alumni. That is the way to build up understanding of the politics in emerging market countries.

Unfortunately, when the know-how fund was delivered to the European Union, chaos resulted, with companies turning up in countries to be told that the same contract had been let twice. We also had the ridiculous situation of trying to bring into emerging markets in central and eastern Europe an Italian system of accounting, a French system of law, and an English system of stock exchange. It is no wonder that some of these emerging markets failed to emerge fully during the course of their transition.

Over the years, the role of UK Trade & Investment in this field has swung between a focus on geography and a focus on sectors. During that time, I have had a role in swinging it towards sectors, but I appreciate that it swings back again. An emphasis on sectors is fine provided that one recognises that some markets require more hand-holding than others. I praise UKTI for its services, which have been excellent.

As regards the transition in future, we will need to see markets as separate countries. The acronym, BRIC—Brazil, Russia, India and China—makes no sense in terms of relationships, just as a massive grouping. The transition should be acknowledged both in business and in aid. As regards aid, we must recognise that while there is a move away from providing aid to countries such as India, China and Russia, which I welcome, there is a difference between providing aid and technical assistance. Even after one has moved beyond the trade part, there is still a need to recognise that many of those countries still do not have fully developed local democratic institutions, civil society groups, media or, indeed, enterprise that is fully reflective of a market economy and democracy. I urge Ministers to look carefully at that to ensure that we do not throw the baby out with the bathwater but continue the process, looking back at the mistake that was made in relation to Russia, where, if we had continued our focus, we could have done a lot more to ensure that there was the continuity needed to bring that economy fully out of its emerging status to play its full role in the world.

21:48

[Kwasi Kwarteng (Spelthorne) (Con)]

I have been privileged to hear maiden speeches by my hon. Friends the Member for South Thanet (Laura Sandys) and for Hereford and South Herefordshire (Jesse Norman), who illustrated very well the nature of the threats that we face. My hon. Friend the Member for South Thanet talked about carers, and about the particular character and fortitude of the people of her constituency.

The House could have a no more important debate than this, and it is disappointing to see it so poorly attended by Labour Members. The nature of this country’s relationship with the wider world and how we can hold our own position in it, not only in terms of economics and culture, is the fundamental issue that will determine the next 10 or 20 years—a long time in which I hope that many Members present will sit in this House, obviously provided that their constituencies return them. It was revealing to hear the shadow Minister speaking on the subject. He said that Argentina was the 10th richest country in the world in 1913, but seemed to suggest that it had then fallen back because of its politics. He failed to analyse the political position and consider what sort of political regime operated in Argentina. He will remember that Juan Perón ruled for a long time after the second world war and was perhaps that country’s most disastrous ruler. He openly espoused a socialist programme. There was vast confiscation of wealth and manipulation of the unions. As my hon. Friend the Member for Bromsgrove (Sajid Javid) pointed out, Argentina defaulted in 1999 because of its huge debt. Yet the hon. Member for Rhondda (Chris Bryant) elided all those facts.

[Chris Bryant]

Juan Domingo Perón was more of a syndicalist, closer to Mussolini than to the socialism of the Labour party.

[Kwasi Kwarteng]

May I retort that Mussolini was originally a socialist? He was a left-wing journalist. It is no accident that those people had many shared ideas. However, whether Perón was a socialist or a syndicalist is neither here nor there.

The hon. Member for Rhondda alluded to our problem as a country. He suggested that we had problems with education. He rightly mentioned that many people in this country are not learning foreign languages. Indeed, the number has declined since 2001. However, who was in government at the time when, as he pointed out, the figures were declining?

We must also confront a decline in educational standards. It is an open secret that we have had grade inflation. In China or other parts of the world, the education systems are highly competitive and rigorous. If we are seriously to compete with the emerging nations, we must sort out our education system and return some rigour to the process.

[Thomas Docherty (Dunfermline and West Fife) (Lab)]

Does the hon. Gentleman accept that the number of pupils passing GCSEs and A-levels reached a record high under the previous Labour Government?

[Kwasi Kwarteng]

That is the whole point—that happened because of grade inflation. The results reached a high every year for 13 years. One must conclude that either students are getting much cleverer or exams are getting easier. You take your choice. [Interruption.]

[Mr Ellwood]

I feel an intervention coming on.

[Kwasi Kwarteng]

I am happy to take them.

[Mr Iain Wright]

The hon. Gentleman is right about ensuring that more people take foreign languages such as Mandarin and Spanish. However, does he not think it is counter-productive to end the fourth phase of the diploma programme, particularly for languages, which would encourage enthusiasm for modern languages in emerging markets?

[Kwasi Kwarteng]

I was making a broad point about 13 years of Labour failure, which is central to the debate. If we are serious about competing with China and India, we must have much more rigour and a little more discipline and focus in our education system. Those are obvious facts, but Labour Members seem to ignore them completely.

[Chris Bryant]

Answer the question!

[Kwasi Kwarteng]

With respect, I am talking about the emerging economies, and the point about education is central to the debate. If the country is to improve and compete with other countries, we need much more rigour and discipline. That was palpably lacking in the Labour Government’s actions in the past 13 years.

We must approach the problem much more broadly. Britain was so successful in the past because we had a thriving economy. The industrial revolution powered Britain’s ascent to world dominance in many ways. Leaving a country economically crippled is the worst thing that we can do to our standing abroad. We must tackle our domestic economic situation before we can even begin to try to compete with emerging economies. I just wanted to put those broad points on the record, and to say that Labour failure has once again damaged—

[Mr Speaker]

Order. We are grateful to the hon. Gentleman. With the leave of the House, I call the Minister, Mr Henry Bellingham.

21:55

[The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Henry Bellingham)]

I thank all hon. Members for their contributions to this excellent, albeit very short, debate. As the Foreign Office Minister responsible not only for Africa but for relations with business, I am keen to meet as many parliamentarians as possible who have an interest in emerging markets, and the debate has revealed a lot expertise.

We have heard a number of superb maiden speeches, and I turn first of all to my hon. Friend the Member for South Thanet (Laura Sandys), who made a charming, eloquent and very personal speech. She comes from a line of distinguished parliamentarians. Her father, to whom she referred in her moving remarks on carers, would have been incredibly proud of her this evening. I wish her well for the future and I am sure she will go a very long way indeed.

My hon. Friend the Member for Reading West (Alok Sharma) gave us another splendid tour de force. He spoke with passion about his constituency and made a number of good points about emerging markets, saying that we should treat them as equals and not be afraid of offshoring. He talked about the great opportunities that such markets present to us, and I agree with him 100%. The business world’s loss is the House’s gain, and I wish him well for the future.

My hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman) produced one of the best Mark Twain quotes I have ever heard. One of the great treats of listening to maiden speeches is that one learns a lot about our beautiful and interesting kingdom. He spoke with a great deal of passion about his constituency, but his speech was also erudite and intellectual. He spoke of flexibility, resilience and entrepreneurship, which need to be applied to our drive to create and generate export-led growth. I congratulate him on his excellent speech.

The Foreign Secretary made it clear that he will pursue a dynamic foreign policy that will be ingenious and energetic. As my hon. Friend the Minister—my coalition partner—made clear, the Foreign Secretary’s plan is to intensify bilateral relations, particularly with many of the emerging economies. With our economy in crisis, we are facing a mammoth challenge to reduce the deficit. I congratulate the former Minister, the hon. Member for Rhondda (Chris Bryant), on his work at the Foreign Office—he obviously relied heavily this evening on the expert knowledge he gained in his time there—but it is complete nonsense to say that the Government have no strategy for growth. My hon. Friend the Minister talked about an export-led growth strategy. Furthermore, not tackling the deficit would be the biggest barrier of all to growth, because that would drive inflation and interest rates. I can tell the hon. Gentleman that he was talking total and complete nonsense. If we do not improve our economy and reduce the deficit, our standing in the world will be diminished, as my hon. Friend the Member for Spelthorne (Kwasi Kwarteng) pointed out so eloquently, and we will not be able to improve those bilateral relations or drive that export-led growth.

UK Trade & Investment operates in 17 key, high-growth markets. Of course, the Foreign Office must consider efficiencies in all its operations, but the Foreign Secretary has made it clear that our national interest and our international role in the world will not be undermined or put at risk in any way. The Foreign Office places a lot of emphasis on low-carbon, green technologies. Its low-carbon, high-growth strategic programme fund—£17 million in total—will not, as I understand it, come under any financial pressure.

We treasure students who come to this country from around the world and rely on them to a very great extent when it comes to building our influence in the world. Obviously, we will look at a number of aspects of the budget, but Chevening scholarships, which the former Minister mentioned, are currently frozen as part of the Government’s review of all programme spending. We expect to make decisions in July, but of course there is uncertainty. The coalition Government have taken over an appalling economic crisis. It is a little rich for the shadow Minister to complain about various matters that were entirely the fault of the Government of whom he was a member.

The hon. Gentleman also raised the issue of human rights, among others. If I have not answered his questions, I will write to him. This has been an important debate—

22:00

Motion lapsed (Standing Order No. 9(3)).

Business without Debate

Monday 14th June 2010 Commons Chamber

Business of the House

Motion made,

That, at the sitting on Tuesday 15 June, the Speaker shall put the Questions necessary to dispose of proceedings on the Motions in the name of Sir George Young relating to Backbench Business Committee, Election of Backbench Business Committee, Backbench Business (Amendment of Standing Orders), Westminster Hall (Amendment of Standing Orders), Topical Debates (Amendments of Standing Orders), Pay for Chairs of Select Committees, Backbench Business Committee (Review), September Sittings, Business of the House (Private Members’ Bills), Deferred Divisions (Timing), Select Committees (Membership), Select Committees (Machinery of Government Change) and Sittings of the House not later than 9.30 pm; such Questions shall include the Questions on any Amendments selected by the Speaker which may then be moved; proceedings may continue after the moment of interruption; and Standing Order No. 41A (Deferred divisions) shall not apply.—(James Duddridge.)

[Hon. Members]

Object.

Water Bills (South-West)

Monday 14th June 2010 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(James Duddridge.)

22:00

[Alison Seabeck (Plymouth, Moor View) (Lab)]

I am grateful for the opportunity to be the first to raise this issue in the new Parliament on behalf of water bill payers in Plymouth and the wider south-west. The problem we face is simple: water rates in the south-west are 25% higher than the UK average, placing an unfair burden on the budgets of my constituents and all residents across the south-west of England. This is an issue that dates back to the botched privatisation of water utility companies in the late 1980s, and it is to the shame of all parties that the problem remains unresolved after so many years, despite the constant efforts of right hon. and hon. Members from the south-west to keep the matter high on the agenda of the Minister’s Department.

I am pleased to welcome the new Minister, and I am pleased to see so many Members from other parties in their places tonight, including the hon. Member for St Ives (Andrew George), who is the new joint chair of the all-party water group, and the hon. Member for Newton Abbot (Anne Marie Morris), who is carrying on the active interest in water pricing shown by her predecessor. I hope that by the end of this debate we will have been able to put on record some of the options for consideration, including a levy proposal.

It would be remiss of me not to place on record the thanks due for the unstinting efforts and enthusiasm of my former colleague, Linda Gilroy, who not only chaired a very active all-party water group, but individually campaigned for many years on behalf of water bill payers.

[Mr Adrian Sanders (Torbay) (LD)]

I congratulate the hon. Lady on securing the debate. She is right to pay tribute to Linda Gilroy, but other former colleagues from Devon and Cornwall played their part, including the former Members for Truro, for Falmouth and Camborne and for Teignbridge. I may have forgotten others, but they all stood up for the south-west on this issue.

[Alison Seabeck]

The hon. Gentleman is right and the valuable contributions of those former Members will be missed.

Linda Gilroy was instrumental in organising the many meetings and briefings that we had with Ministers and others, and with the all-party group she produced a very thorough paper on the pressures felt by customers and water companies—and not just South West Water—which in turn fed into Anna Walker’s considerations in her review. In 1989, the privatised utilities were given responsibility not only for the provision of water and the disposal of waste but also for the maintenance of the coastline. The Minister will be well aware that in the south-west we are blessed with some of the most beautiful coastline in the country. Our beaches, bays and coves are famed, and rightly so, but they are an expensive luxury and one that is enjoyed not only by the people of the south-west, but by people from across the country and around the world. They are a common good and to the benefit of the whole public.

South West Water deserves credit for the work it has done to clean up the beaches. It has invested more than £1.5 billion through its clean sweep programme, which has modernised sewage treatment all around the peninsula, removing almost 250 crude outfalls and transforming the bathing waters of the region.

Those improvements are not paid for by the whole public. When the water utilities were privatised, the public in each area became responsible for paying for the maintenance of the coastline in their region. For the people of the west midlands, that was not a problem because they do not have a coastline, but in the south-west we have 30% of England’s coast, and the burden of cost is placed on just 3% of the population. The Prime Minister himself acknowledged the problem when he said, while holidaying in the region:

“I understand the unfairness that people feel in the South West that they are paying a lot of money so that there are clean beaches for people like me from Oxfordshire to come and play on.”

Indeed, the number of tourists to the region continues to grow, with the latest figures showing 21 million visits, the vast majority of which are by people coming from outside the south-west.

The water industry faces many challenges in the years ahead, and none of the solutions comes without a cost. It will have to deal with pollution concerns; better manage surface water and flooding; continue to try to provide an affordable supply of water; reduce greenhouse gas emissions; and adapt the service to make it more resilient to climate change.

[Andrew George (St Ives) (LD)]

I pay tribute to the hon. Lady for what she is saying, all of which I endorse. When she refers to cleaning up the coastline, she is talking about a national asset being paid for by local water rate payers—a point that the Anna Walker review made clear. That is clearly not the case with national galleries or national museums, which are paid for by all taxpayers. We should all reflect on that.

[Alison Seabeck]

Yes, indeed, and I shall return to that point.

It is welcome that all water companies are now expected to produce water resources plans for the Environment Agency and strategic direction statements for Ofwat, both of which are useful indicators to assist in the long-term planning for the sector, but also help in assessing the likely impact of such works on bill payers.

[Anne Marie Morris (Newton Abbot) (Con)]

I very much support this debate. I would like to reinforce the point that although many people feel that we in the south-west live in a land of plenty—a land of flowing milk and honey—there are areas of great deprivation. For many people in our constituencies, the cost of living is high compared with the national income, and they are therefore hit particularly hard.

[Alison Seabeck]

The hon. Lady is absolutely right, and I concur with that view. Again, however, I will deal with that issue in more depth a little later.

Bills in the south-west are 25% higher than the national average, which over the course of a year equates to £100 more, while for unmetered customers the figure is considerably higher, at almost £300. For people on low or fixed incomes, that can mean a substantial amount of their income. Indeed, for those on the lowest incomes, water bills can take 10% of their incomes. For elderly individuals living alone on a basic pension—we in the south-west have a larger-than-average older demographic— or for lone parents with young children or single people in rented accommodation, water bills present a struggle.

The Minister will know that the area covered by South West Water is large and diverse, ranging from Cornwall in the far west through to Devon, and taking in parts of Dorset and Somerset. We also have some of the poorest areas of the country. Cornwall is the only area of the country to be in receipt of EU convergence funding—previously known as objective 1 funding—and poverty remains an issue, despite big moves in the right direction over the past 13 years. The Consumer Council for Water has actively campaigned to try to influence price levels in the south-west, and has carried out further, detailed research to try to discover what the bill payers themselves feel should be done to remedy the problem.

The bill payers whom I have spoken to—I am sure that other hon. Members have had similar conversations—feel that it is unfair and indefensible to expect some of the nation’s least well-off families to shoulder the burden of the cost of a system that requires them to pay for the upkeep of beaches that are largely used by wealthier holidaymakers from outside the region who do not pay for the coastline in the south-west. A solution to that long-standing injustice must be found. Many of my constituents have already lost patience with the process. A recent letter from one elderly constituent from St Budeaux expressed utter exasperation at the lack of transparency in how the costs are apportioned.

In acknowledgement of the problem, the previous Government set up the Walker review to examine the case surrounding water charges. Anna Walker was asked, among other things, to examine the current system of charging households for water and sewerage, and to assess both the effectiveness and fairness of the current and alternative methods of charging, and the link to affordability. Anna Walker delivered her extremely thorough report last year, having toured the country and visited the south-west and Plymouth on more than one occasion. The report acknowledged for the first time what most of us knew: that the long-standing high charges in the south-west were a direct result of the privatisation in 1989.

Anna Walker also suggested that the options for tackling the root causes should include a specific one-off adjustment, estimated at around £650 million, to pay off South West Water’s debt, or annual transfers either from the Government—I suspect that this is unlikely in the current economic climate—or from other water customers around England and Wales. That would not be popular either, because Thames Water customers are financing the Thames tideway project around the city, and water shortage issues have a significant future cost in a number of other areas.

A further alternative would be to rely on a package of proposals targeting specific groups of South West Water customers, perhaps through a series of measures such as the use of a seasonal tariff charged for additional summer use. That would pick up second-home users, but also businesses. It could help some residents to achieve a saving of between £40 and £50, but it is not a popular option. It is seen as a tourist tax, and would require compulsory metering, which would also have a cost. I know that the hon. Member for St Ives (Andrew George) is concerned about second-home owners and their potential for benefiting significantly from having meters. He sees that as unfair. Indeed, in a debate on 2 June 2008, he said that metering was

“a way of rewarding people who should be paying more”.—[Official Report, 2 June 2008; Vol. 476, c. 619.]

Another option would be the wider use of affordability measures, and South West Water has been quite proactive in trying to identify and assist vulnerable customers in that regard. Such measures could be more widely applied and could deliver around £80 per annum for low-income households. That would have to be linked to water efficiency, however. It is essential to encourage that, not only for economic reasons but because water is becoming an increasingly scarce resource at certain times and in certain areas.

As a result of this debate, I have received some useful briefings from people on related matters, especially on the re-use of rain water and on building regulations. I suspect that there is a whole new debate to be had on those matters, but I want to put on record my gratitude to the businesses and organisations that have e-mailed me. This flags up just how useful these debates in an often rather empty Chamber can be—it is actually quite full tonight, so thank you to everyone who has stayed.

Low-income customers with medical conditions could benefit significantly if changes to the current WaterSure scheme, as recommended in the review, were adopted. That would result in it being capped, either at a national average or on a regional basis, whichever is the lower, and would have a redistributive effect within the region, but that in turn would mean that other South West Water customers would pay more, which would probably not have broad support. This is not a straightforward issue, which is partly why I am back here tonight, five years after I secured my first debate on the subject.

A national levy is another idea that has been put forward. That would have the effect of supporting South West Water bill payers now, but they could well find themselves having to pay for similar schemes in the future, such as additional reservoirs in the Thames Water area or elsewhere in the south of England, for example. The Consumer Council for Water’s research suggests that water bill payers would consider that option, and we local MPs certainly need to explore it with our constituents. I appreciate that many of the options would have consequences for bill payers elsewhere, but we must resolve to produce a fairer system that does not penalise low-income families merely for living on a peninsula surrounded by the sea.

[Stephen Gilbert (St Austell and Newquay) (LD)]

I congratulate the hon. Lady on securing a debate on this topic so early in this Parliament. Does she share my concern that the modelling work to support the policy implementation of any of the options in the Walker review is not happening fast enough, and that we need to go further and faster towards reaching a solution to a problem that has bedevilled my constituency and many others for many years?

[Alison Seabeck]

I agree, and I hope that the Minister listened to the hon. Gentleman’s genuine concern. His comment is well timed, as I was about to say that the current Government have, in the work carried out by Anna Walker and by their own officials, a basis for going forward without further delay. The previous Government had already asked Ofwat to consider the Walker report, but no Government can compel the regulator to act. Before the election, MPs asked Ofwat to consider how the Walker review could be implemented. Ofwat was clearly willing to do that work, and its position has not changed. Serendipitously, Ofwat asked for a meeting with south-west MPs today. That has usefully coincided with this debate, and, I am sure, helped to inform those hon. Members present of Ofwat’s position and of its thoughts on the subject of affordability.

Action on water charges, particularly on behalf of vulnerable customers, is long overdue. The public have seen improvements to the quality of the water around our coasts, and this has without doubt benefited other businesses, including those linked to the tourism industry, but it has come at a huge cost and left many people struggling to pay their bills. In this difficult economic climate, people are worried about such pressure on their income. Will the Minister therefore confirm that he will meet Ofwat urgently, to ask it to continue with its assessment of Walker and to give it a timetable for bringing forward its advice to the Government? South West Water bill payers will not be pleased to hear tonight that that has been pushed further back into the long grass. I hope that the Minister can be positive, especially as we were tantalisingly close to getting an announcement prior to the last election.

Does the Minister intend to publish a water White Paper and take forward both the Cave and Walker proposals? If so, when will that be and is it likely to look at the future of Ofwat and its role? Will the Minister also confirm that work is continuing to ensure the widest possible data sharing, so that people receive the help and entitlements they are due? That work was in train between a range of Departments and other organisations prior to the general election.

Will the Minister also acknowledge that there is an ongoing need for all the bodies involved in environmental improvements in water supply and removal both to inform customers on work planned and to ask their views? On affordability, may I make the following plea, which came out of today’s meeting with Ofwat? The Minister must not rely solely on the Government office for the south-west figures, which include Wessex Water and skew the figures slightly. If we drill down and look at Devon and Cornwall separately, we will see that the situation there is much more serious. I hope that the Minister will press his officials to look at the minutiae.

Finally, will the Minister confirm whether he accepts the Walker review principle that it was right for environmental improvements to be funded regionally except where there is an exceptional expenditure, as was the case in the south-west? If he does, does he not feel duty bound to right the historic wrong that the south-west has suffered?

22:16

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)]

I congratulate the hon. Member for Plymouth, Moor View (Alison Seabeck) on securing this debate on an issue about which she has shown a clear commitment during her time in the House. The hon. Member for Torbay (Mr Sanders) made the point that it has also been a very important issue for a great many former and current Members on both sides of the House. I know that the all-party group on water is well attended and is very passionate on this issue, and I certainly intend to address as many of the points the hon. Lady raised as possible in the few minutes available for my response.

The hon. Lady asked about White Papers. The new Government are very eager to introduce a White Paper on water, but we are determined to get it right. Our priority is to introduce a White Paper on the natural environment, which will involve a lot of issues that affect water—water will be fundamental to that White Paper—and then to introduce a White Paper on water, which will address many of the issues raised in the Cave and Walker reports. I can therefore assure the hon. Lady that this issue is a priority for the Government.

As I have said, I am aware that the hon. Lady and several other Members on both sides of the House have campaigned tirelessly on this issue for many years. I also understand that it is an issue that arises frequently in Adjournment debates, so I suppose I should not be too surprised that my first Adjournment debate as a new Department for Environment, Food and Rural Affairs Minister is on this topic.

I would like to say at the outset that the Government recognise that water affordability is a problem for some households, particularly in the south-west. We recognised that in our coalition statement, which pledged:

“We will examine the conclusions of the Cave and Walker Reviews and reform the water industry to ensure more efficient use of water and”—

crucially—

“the protection of poorer households.”

I also want to acknowledge that there is an important distinction between water affordability for low-income households and the more general sense of unfairness felt by households in the south-west at having to pay the highest bills in the country.

[Alison Seabeck]

I wish to reinforce the point that we have both unaffordability for households and a huge sense of a lack of fairness; both apply to the south-west.

[Richard Benyon]

I absolutely accept what the hon. Lady says. This year, the average bill for households in the region is almost £490, which is about £150 higher than the national average bill and—to refer to a particular point that she made—about £80 higher than Wessex Water bills, which is the next highest bill area. Affordability is very important. Although we often examine the average water prices across the country, we must also recognise that certain areas contain pockets of poverty where people may pay less in water bills, but utility bills may have a marked effect on their quality of life because they account for a high percentage of people’s net income.

Clearly, bills vary between water companies. That reflects the cost of providing water and sewerage services in an environmentally sustainable way. Ofwat, as the independent economic regulator of the water industry, ensures that bills are no higher than they need to be. The reasons for the relatively high bills—my use of “relative” is, of course, a relative use of the word—in the south-west were looked at by Anna Walker in her independent review of charging for household water and sewerage services. As has been said, she published her final report and recommendations last December, and I should like to take this opportunity to put on the record this Government’s recognition of the thorough and collaborative way in which she undertook her review.

As the hon. Lady said, the Walker report found that at the time of water privatisation, in 1989, South West Water had the lowest regulated asset base per property of any water and sewerage company. Since then, the company has invested about £2 billion, much of which has been spent on sewerage infrastructure and on improving sewerage services. That has brought sewerage standards in the area up to the same level as those elsewhere in England and Wales, and the cost has been met by local customers.

The cost per household has also been compounded by the relatively low number of households in the south-west, together with the relatively high proportion who live in rural areas. Those factors make it comparatively expensive to provide these households with water and sewerage services. Anna Walker recommended that Ofwat should advise the Government on options that could tackle the issue of high water bills in the south-west. The hon. Lady and those who attended a meeting with Ofwat representatives today will know that Ofwat is already working on that.

Some of the options suggested by Anna Walker could benefit all households in the region. In particular, a one-off or other financial adjustment funded by the Government, or an annual adjustment of bills financed by the Government or water customers nationally, could bring average household bills down by about £50 a year. Another option suggested by Anna Walker that would benefit all households in the south-west is a seasonal tariff, which would have the advantage of pricing water in a way that reflects the additional costs that tourists place on the water and sewerage system when they visit the region.

[Anne Marie Morris]

The Minister makes a good point, but when we examine the issue of affordability I want us to ensure that the WaterSure provision does help those who are particularly in need. I have looked at the detail of this and it is clear that it is not simply a matter of someone’s health need, the amount of money they have and the benefits that they are on. The way in which the system works means that it does not help those who really need that support, and I want the Government to consider that when we examine affordability.

[Richard Benyon]

As my hon. Friend did in her earlier intervention, she points out the important and urgent need to represent the needs of the most deprived and poorest households in the south-west. I shall discuss WaterSure in a moment and I am conscious of the amount of time available to me, but I must say that she rightly points out that when we address the urgent needs of the poorer families in the south-west we may have to examine the WaterSure provision.

Anna Walker estimated that, if water charges in the summer were four times higher than they are for the rest of the year, the average bill for all households in the region would be reduced by £60 a year. The other options identified in the review focused on providing additional support for vulnerable or low-income households, both in the south-west and elsewhere. My hon. Friend will be interested to learn that that includes a proposal to revise the national WaterSure tariff and to discount the bills of all low-income households or of low-income households with children.

Let me add that the Flood and Water Management Act 2010 enables water companies to offer social tariffs to households that struggle with their bills. However—this will be of concern to hon. Members from the south-west—the cross-subsidy under WaterSure or under social tariffs would have to be met by other customers in each company’s operating area.

As Anna Walker’s report made clear, the options are complex and, contrary to what I believed before I came to this side of the House, there certainly are no easy answers.

[Stephen Gilbert]

We have heard a lot tonight about the options, but Members in the south-west are keen to know when the Government might present an option that we can decide on for addressing the problem. Can the Minister help me with a time frame?

[Richard Benyon]

Certainly; the hon. Gentleman raised this earlier, and I am loth to give him a specific date, but I assure him and all Members of the House that I do not intend to be standing at the Dispatch Box in Adjournment debates in the dim and distant future because I have been unable to give a resolution, as best I can, to this matter. It is clear that I will not be able to satisfy every Member of the House or every one of the hon. Gentleman’s constituents, but I will do my best and the Government will do their best to get a speedy resolution to this.

I see the issue very much in two parts. First—this is the point I was making to my hon. Friend the Member for Newton Abbot (Anne Marie Morris)—there is an urgency. People are coming to hon. Members’ surgeries in real difficulties and there is work to be done to address their concerns. As we take Walker through the legislative process, following those options, I hope that we will be able to find other solutions on a more medium-term basis. I can only assure hon. Members on both sides of the House that I will meet them to try to resolve these matters and that I will keep them informed as best I can.

I understand that hon. Members who received the briefing from Ofwat earlier today will have heard about the merits and otherwise of the options that have been put forward. There is a fundamental question about who should pay for any new affordability measures. The options are the Government, which means the taxpayer, as the hon. Member for Plymouth, Moor View has said, and which brings difficulties at this time, or water customers, either at company-specific level or nationally. The hon. Lady will appreciate the need to reduce Government spending to tackle the budget deficit, and she will also be aware of the very strong resistance identified in the Walker review to any suggestion that water customers nationally should subsidise special measures for those in the south-west. The Government will need to take those factors into account when deciding which of the Walker recommendations to take forward.

[Alison Seabeck]

Could not the concern that customers nationally might not want to subsidise the south-west be offset by the fairness argument, in that south-west customers might well find themselves subsidising other areas of the country in future?

[Richard Benyon]

The hon. Lady points to a difficulty. She has mentioned the Thames tideway. What we decide to do now to help the south-west might legitimately be raised by customers in other areas in relation to concerns about a multi-billion pound project to improve the national asset that is the capital city. That is a difficult conundrum that I have to face, but I see her point.

Let me take this opportunity to remind the House of the support that is available for low-income households both in the south-west and elsewhere in England and Wales. Under the national WaterSure tariff, the bills of qualifying households are capped at the average bill for their company’s operating area. To qualify for WaterSure, households must be metered, in receipt of means-tested benefits and either have three or more dependent children aged under 19 and living at home—I have five children, so it is possible—or have someone in the household with a medical condition that necessitates a high, essential use of water.

WaterSure ensures that vulnerable and low-income households do not have to cut back on essential use of water because of worries about the potential size of their bills. Anna Walker made several recommendations about changing WaterSure and providing greater support for low-income households, which we will consider as part of our wider examination of the Walker review. In conclusion, I assure the hon. Lady and all hon. Members from the south-west that I will carefully examine the Walker recommendations, including those on water affordability, and Ofwat’s advice on the options for addressing high water bills in the south-west.

Question put and agreed to.

22:30

House adjourned.