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Claire Perry (Devizes) (Con)
1. What steps she is taking to tackle violence against women.
The Secretary of State for the Home Department (Mrs Theresa May)
A comprehensive cross-Government action plan on tackling violence against women and girls was published on 8 March this year. It includes 88 commitments from 12 Departments to improve the provision of services for victims of violence and to prevent violence from happening in the first place. We have already delivered 22 of those commitments.
Claire Perry
I thank the Home Secretary for that reply. Also part of this Government’s work is a pilot scheme running in Swindon and Wiltshire in which perpetrators of domestic violence are effectively banned from the family home, rather than the family and the women being forced to move out, as happened previously. My right hon. Friend will be pleased to know that, since July, under the terms of the scheme, 82 abusive perpetrators have been removed from family homes. The head of Wiltshire victim support unit said that the programme is reaching women who have never been helped before. Will my right hon. Friend please tell us when the pilot might be rolled out nationally?
Mrs May
I thank my hon. Friend for that question. She is absolutely right that domestic violence protection orders do what hon. Members across the House have always felt is right: ensure that when a domestic violence incident takes place it is the perpetrator who is not able to stay in the home, rather than the victim being forced out, as has happened so often in the past. We commenced a pilot in Greater Manchester, West Mercia and Wiltshire, and a second wave of pilot areas started in October in Grater Manchester and West Mercia, which we are looking to run for at least a year before we assess them properly.
Stella Creasy (Walthamstow) (Lab/Co-op)
The Opposition welcome press reports this weekend that the Deputy Prime Minister wants to widen the definition of domestic violence. Let me also offer Home Office Ministers our support if they wish to challenge the actions of their colleagues in the Ministry of Justice, who are seeking to restrict access to legal aid for victims of domestic violence. Does the Home Secretary agree that that should happen, so that we send a strong message to victims that they should not have to wait until the first punch is thrown before they get help?
Mrs May
The hon. Lady is right that we need to ensure that we have the right definition of domestic violence. That is why the Government are consulting on the appropriate definition and ensuring that we have a cross-Government definition, which, sadly, the previous Labour Government did not have.
Bob Russell (Colchester) (LD)
I thank my right hon. Friend for her answer to the excellent opening question and urge her to look at the Home Affairs Committee report on domestic violence from the previous Parliament. If she implements its recommendations, a lot of the issues will be resolved.
Mrs May
I thank my hon. Friend for his reference to the work previously done by the Home Affairs Committee on this important issue. The Government are looking across the board at sources of proposals for dealing with this problem. As I have said, our cross-Government action plan included 12 Departments and made a significant number of commitments to ensure that we do what all in the House would want: end violence against women and girls.
Chris Heaton-Harris (Daventry) (Con)
2. What her policy is on the designation of (a) target sports clubs where historical pistols are studied and shot and (b) other target sports clubs.
The Minister for Policing and Criminal Justice (Nick Herbert)
Clubs that wish to keep and use historical pistols and weapons must have Home Office authorisation. There are strict criteria governing the designation of sites under the Firearms (Amendment) Act 1997, which are set out in the guidance issued by the Home Office.
Chris Heaton-Harris
Northampton target sports club is based in my constituency. A number of members wish to study and shoot historic pistols of some worth but are struggling with the licensing regime because they are within 30 miles of another licensed club. Will the Minister help us with that query and help to sort this out?
Nick Herbert
I understand my hon. Friend’s concern. I am aware that the Northampton target sports club was refused designated-site status last month because there were other suitable sites within a reachable distance. I also understand that circumstances may have changed because another site is full. Therefore, a new application will be looked at properly.
Kate Hoey (Vauxhall) (Lab)
Will the Minister give as much support as possible to the wonderful Olympic sport of pistol shooting, which suffers terribly from some of the rather knee-jerk legislation that went through this place some time ago? Will he ensure that pistol shooters are given every support possible to train in this country so that they do not have to go abroad to Switzerland to train for the Olympics?
Nick Herbert
I know of the hon. Lady’s long-standing concern. The Government seek to draw the distinction between the unlawful use of weapons, which we aim to deal with as robustly as possible, and the lawful possession of such weapons. We have the tightest set of firearms controls in the world, but sporting shooting, particularly in relation to the Olympics, is of course important.
Gavin Shuker (Luton South) (Lab/Co-op)
3. What recent assessment she has made of the operational effectiveness of the UK Border Agency.
The Secretary of State for the Home Department (Mrs Theresa May)
I should like to pay tribute to the many dedicated and hard-working staff of UKBA, who do a good job, working day in, day out to keep our border secure and enforce immigration rules. There is certainly more to be done. The agency’s new chief executive, Rob Whiteman, has a vision to make further improvements. I share that vision.
Gavin Shuker
Has the Home Secretary yet received the interim internal report on this summer’s security lapse, and if so can she tell me how many people were wrongly allowed into Luton airport in my constituency?
Mrs May
As the hon. Gentleman knows, we have made available some figures from the early assessment of the success rate of the pilot that was run in the summer. We are of course awaiting the independent investigation by the chief inspector of the UK Border Agency, which will not be available until the end of January.
Oliver Heald (North East Hertfordshire) (Con)
There has been a warm welcome in the House and the country for the firmer approach being taken by this Government, but can the Home Secretary give us any further information on the ending of the bogus colleges scam, and to what extent the Government are able to influence events in the Mediterranean to ensure that better naval patrolling takes place to turn back boats carrying illegal immigrants?
Mrs May
I am happy to tell my hon. Friend that there are now more than 450 colleges that have not been accredited under the scheme or did not apply to be accredited, which gives us a clear message about whether they were actually providing education. On his second point, it is important for this country to work with other countries and help them to improve their border security, so that the problem of people entering Europe and then the United Kingdom is reduced.
Jeremy Corbyn (Islington North) (Lab)
I understand that some 98,000 cases have been put in what the Home Office calls the “controlled archive section”, and it claims that many of the people involved cannot be found or located. As a constituency MP, I have many such people coming to see me, and they are living here and going through an application or appeal, and simply waiting for a reply from the Home Office. Will the Home Secretary look again at the whole system and ensure that proper efforts are made to find people who are legitimately trying to continue their stay here?
Mrs May
I thank the hon. Gentleman for raising that issue and I remind him and other hon. Members that the Chairman of the Home Affairs Committee asked Members of Parliament to write to the Home Office to say whether they had any cases of the sort that the hon. Gentleman mentions. The work that we have been doing is of course clearing up the chaotic mess in the asylum system that was left, sadly, by the last Government.
Mr Don Foster (Bath) (LD)
With tourism vital to places such as Bath, it is worrying that the more and more people who travel abroad from countries such as India and China tend not to come to this country because they think that the UKBA is unwelcoming. Should we not at least have a special visa for 2012 to commemorate the Olympics and the diamond jubilee, and have the application forms in the language of the tourist rather than in English?
Mrs May
I fully understand the benefits and importance of tourism to certain parts of the United Kingdom such as my right hon. Friend’s constituency. I assure him that special arrangements have been put in place by the UKBA for those who are travelling to be part of or to view the Olympics next summer.
Diana Johnson (Kingston upon Hull North) (Lab)
Last month, the Home Office claimed that seizures of class A drugs by the UKBA were up. That was described by the chair of the UK Statistics Authority as
“highly selective in its choice of statistics, in order, it seems, to show the UK Border Agency in a good light”.
In reality, official statistics show that UKBA seizures of class A drugs fell last year. Overall, there were barely half the number of seizures than in 2008-09. Given that 452,000 people take ecstasy in the UK each year, does the Home Secretary think that seizing only 300 ecstasy tablets is good enough?
Karl MᶜCartney (Lincoln) (Con)
4. What steps she is taking to tackle domestic violence against men.
The Minister for Equalities (Lynne Featherstone)
The Government recognise that men can be victims of domestic violence, and take this issue very seriously. Later this week, we will launch a fund of £225,000 over two years to support services focusing explicitly on male victims of sexual and domestic violence. That is in addition to the Home Office funding provided each year to the men’s advice line, which provides support and signposting services for male victims, and to Broken Rainbow, which provides support to lesbian, gay, bisexual and transgender victims.
Karl MᶜCartney
I welcome the announcement of the new fund by the Minister, as it will bring much-needed support for the victims of this deplorable crime. Will my hon. Friend also confirm that all domestic violence awareness campaigns run by this Government will be clearly aimed at supporting both female and male victims of domestic violence?
Lynne Featherstone
I can assure my hon. Friend that that is indeed the case. The recent teenage abuse campaign was aimed at both young men and women, because both can be subject to abuse from their contemporaries.
Michael Ellis (Northampton North) (Con)
5. What recent progress she has made on the introduction of police and crime commissioners.
The Secretary of State for the Home Department (Mrs Theresa May)
The first PCC elections will take place on 15 November 2012. I recently tabled a protocol setting out how the new policing governance arrangements will work and issued the shadow strategic policing requirement, which sets out the national threats that the police must address. Subject to parliamentary approval, London will move to the new PCC model in January.
Michael Ellis
I congratulate the Home Secretary on her achievement in this flagship legislation and on the fact that in a year’s time PCCs will be rolled out across the country. What steps can the Government take to ensure that prospective candidates for this important position will come from a wide diversity of backgrounds?
Mrs May
I thank my hon. Friend for his comments. I add to his congratulations the name of my right hon. Friend the Policing Minister, who played a significant role in ensuring that the legislation was steered through Parliament for it to be in place in September. I am keen to ensure that we have a diversity of candidates. We are now looking into a number of ways in which we can promote an understanding of the role of the police and crime commissioners. My right hon. Friend marked the one year to go to PCCs on 21 November with a speech on a new era in policing. We will be publishing a consultation, setting out proposals that PCCs act as commissioners for victim support services.
Tony Lloyd (Manchester Central) (Lab)
Given that the Home Secretary has made it clear that she wants police commissioners to have authority with respect not just to policing but to the criminal justice system, will she heed the important advice of the Association of Chief Police Officers that antisocial behaviour orders should still be part of the things at the disposal of police commissioners, the police and the criminal justice system?
Mrs May
I note the rather clever way in which the hon. Gentleman weaved the antisocial behaviour order into that question. As he knows, we consulted on replacing the current regime of ASBOs with a new regime that is clearer, less bureaucratic and easier to use. We will be introducing legislation in due course.
Tom Brake (Carshalton and Wallington) (LD)
One of the key features of the checks and balances that will operate on the police and crime commissioners are the police and crime panels. Will the Home Secretary confirm that the effectiveness of the police and crime panels will not be hindered by arbitrary restrictions such as a lack of access to senior police officers or experts or a budget that is so tight that it will restrict the PCPs’ ability to meet on a regular basis to scrutinise the police and crime commissioners?
Mrs May
I thank my right hon. Friend for his question. I recognise the interest that he has consistently shown in ensuring that the police and crime panels have the powers necessary to scrutinise the work of the police and crime commissioners. They will be different from police authorities, so their role will not be the same. We have set out clearly the interaction that they should have with the police and crime commissioner and with the chief constable of the police force area. As for budgets, our overall aim is that the new regime will cost no more than police authorities do today.
Simon Hart (Carmarthen West and South Pembrokeshire) (Con)
6. What steps she is taking to improve efficiency within police forces.
The Minister for Policing and Criminal Justice (Nick Herbert)
We are supporting police forces in their drive to improve efficiency, including through reducing bureaucracy, more effective procurement, collaboration and sharing services.
Simon Hart
Is the Minister satisfied that local forces are doing enough to share the costs of facilities such as human resources and IT with other public bodies and other emergency services?
Nick Herbert
It is important that police forces do more to take up such opportunities. We have already seen an increase in the collaboration between police forces over operational matters, but there are valuable opportunities to collaborate and share services for the back-office functions such as IT and human resources, which would result in significant savings. That is what we are encouraging forces to look at.
Andrew Miller (Ellesmere Port and Neston) (Lab)
I welcome the idea of police forces sharing services, especially in areas such as forensic science. Given the Government’s strategy, is that not likely to result in the reforming of the Forensic Science Service?
Nick Herbert
Perhaps the hon. Gentleman would reflect on the mismanagement under the previous Administration that left the Forensic Science Service on an unsustainable footing.
Dr Julian Huppert (Cambridge) (LD)
The innovative use of information technology can make a huge difference to police efficiency. Will the Minister have a look at companies, such as Sepura and RealVNC in my constituency, that are working already with police forces in the UK and the US to make it easier for the police to do their job?
Nick Herbert
I strongly agree with my hon. Friend about the importance of good police IT, which we seek to improve. It is for forces to commission these services, but we have announced that we intend to set up a new vehicle—a force-owned IT body—to commission IT and seek improvements, because it is so important that police officers have good IT in order to fight crime effectively and not waste time on bureaucratic processes.
Christopher Pincher (Tamworth) (Con)
7. What steps she is taking to prevent vulnerable young people from being drawn into gang-related crime.
The Secretary of State for the Home Department (Mrs Theresa May)
In November, I presented the “Ending Gang and Youth Violence” report to the House. Today, I have notified 22 areas that they will be offered targeted funding and support by the new ending gang and youth violence team, details of which I will place in the Library. I will shortly extend gang injunction powers to prevent gang violence by 14 to 17-year-olds and will launch a consultation on the penalties for illegal firearm supply and importation.
Christopher Pincher
I am obliged for that answer. Chief Inspector Ian Coxhead, Tamworth police and other agencies have launched Project Turnaround to identify potential problem youngsters early and to help them to keep on the rails, rather than going off them. Will my right hon. Friend commend that initiative, which has been rolled out across Staffordshire, and consider it as best practice for other chief constables?
Mrs May
I am grateful to my hon. Friend for bringing Project Turnaround to the notice of the House and I congratulate Chief Inspector Coxhead and all those who work with him on their work. It seems to be a good example of what we talked about in the “Ending Gang and Youth Violence” report—of police working with other agencies to find the best solutions for individuals and either prevent them from becoming gang members or turn them away from gangs.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Does the Home Secretary agree that this is a key area for a joined-up approach across Government? By that I mean a Government who believe in keeping youth services active and working in our communities, and a Government who believe that 1 million unemployed people is unacceptable and will lead to trouble later.
Mrs May
The Government do indeed have a joined-up approach on that. The report was the result of work by an inter-ministerial group that I chaired, working closely with my right hon. Friend the Secretary of State for Work and Pensions and with representations from several Departments, including the Department for Education and the Department for Communities and Local Government. I am pleased to say that the inter-ministerial group will continue to meet to monitor the work that the team are doing as a result of the report. Indeed, we held our first such meeting last week.
Gloria De Piero (Ashfield) (Lab)
Last week, the ringleaders of a gang of youths were given antisocial behaviour orders after making the lives of shoppers and businesses in Rochdale a misery. If they breach the ASBO, these youths will get a criminal record, but according to page 18 of the Government’s consultation document, “More Effective Responses to Antisocial Behaviour”, a breach of the Government’s proposed crime prevention injunction
“would not result in a criminal record.”
Will the Secretary of State confirm that that is the case?
Mrs May
The hon. Lady is well aware that we will be implementing several proposals to deal with antisocial behaviour and gangs, and I remind her that I have referred already this afternoon to what we are doing with gang injunctions. In the case to which she referred and similar cases, gang injunctions will be available.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
9. What progress she has made on implementing the recommendations of the report of the coroner’s inquests into the London bombings of 7 July 2005; and if she will make a statement.
The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)
The Government responded to the coroner’s report, accepting the three recommendations directed to Government and taking action on other issues raised in her report. We are progressing work on those recommendations and areas of concern and will provide a full report on progress in March 2012.
Debbie Abrahams
I thank the Minister for his response. He will be aware that the Foulkes family, who are constituents of mine, lost their David in the Edgware road bombing. He unfortunately died. In addition to wanting the coroner’s recommendations implemented in full, they and other families are keen to see greater accountability of the security services to Parliament. Will the Minister commit to that today?
James Brokenshire
I certainly recognise the contribution that the families have made, and I pay tribute to the work of the hon. Lady’s constituent. The Government attach the utmost importance to the recommendations outlined in the coroner’s report and are fully committed to seeing through the implementation of actions to address them. She will be aware of the Green Paper on justice and security, which examines the role and powers of the Intelligence and Security Committee, including its ability to obtain wide-ranging information from intelligence agencies. The Government will report back to the House shortly on progress made and the consultation.
Stephen Mosley (City of Chester) (Con)
10. What progress she has made on the establishment of the National Crime Agency.
The Secretary of State for the Home Department (Mrs Theresa May)
We are on course to establish the National Crime Agency in 2013, subject to the passage of legislation. To drive early progress, work on the four operational commands is under way. The Organised Crime Co-ordination Centre, which is part of the intelligence hub, is now established, and the UK cyber-security strategy sets out the role of the cybercrime unit. Keith Bristow, the NCA director general, is in post and will drive progress further.
Stephen Mosley
One of the concerns raised when the Home Secretary announced the launch of the NCA in the summer was about the future of the Child Exploitation and Online Protection Centre. Is my right hon. Friend confident that CEOP’s role in protecting children will be enhanced and improved by its inclusion in the NCA?
Mrs May
I am grateful to my hon. Friend for raising an issue that was raised when the NCA was announced. I am pleased to say that CEOP is indeed one of the commands in the National Crime Agency. Peter Davies, the chief executive office of CEOP, has made it clear that
“we know that we will go into that future”—
that is, as part of the NCA—
“with our brand, purpose and operating model intact.”
Indeed, Peter Davies sits on the programme board and will work closely with Keith Bristow on the agency’s operating model. As part of the NCA, CEOP will not only be able to continue doing what it does today, but will be able to enhance its work, improving the vital work of protecting children.
Keith Vaz (Leicester East) (Lab)
The Home Secretary will recall that on 21 October she wrote to me saying that she would write to the Select Committee on Home Affairs shortly with the full details of which functions would be transferred from the National Policing Improvement Agency to the National Crime Agency. It is now six weeks since that letter, and in 12 weeks’ time the NPIA will be abolished. When will she be in a position to write to me with a full list of the functions that will be transferred, or will she accept the Committee’s recommendation that she should delay the NPIA’s closure until all the functions are properly transferred?
Mrs May
The right hon. Gentleman may have misspoken in his question. He referred to the NPIA closing in 12 weeks. It will not be closing in 12 weeks: we have already made it clear that the NPIA will be closed by the end of December 2012, to allow time for the full and proper transfer of its functions, where necessary, to other organisations. We will inform Parliament of the transfer of those functions shortly.
Mr Adam Holloway (Gravesham) (Con)
11. What steps she is taking to tackle metal theft.
Craig Whittaker (Calder Valley) (Con)
12. What steps she is taking to tackle metal theft.
Nadine Dorries (Mid Bedfordshire) (Con)
17. What steps she is taking to tackle metal theft.
The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)
The Government recognise the growing problem of metal theft and are taking urgent steps to address it. The Home Office is discussing with other Departments what legislative changes are necessary to assist enforcement agencies and deter offenders, including introducing a new licence regime for scrap metal dealers and prohibiting cash payments. We are also working with the Association of Chief Police Officers to establish a dedicated metal theft taskforce.
Mr Holloway
Metal theft costs us a huge amount of money in this country, as the Minister knows, whether it is of dodgy copper wire or lead from churches such as those in Ifield in my constituency. Is there any argument for seizing the entire inventories of metal dealers found to be purchasing what are effectively stolen goods?
James Brokenshire
I certainly recognise the impact that metal theft has on our communities, with the estimated cost ranging anywhere between £220 million and £777 million per annum. We underline and recognise the seriousness attached to metal theft, which is why we are seeking to establish a new taskforce better to inform intelligence and ensure that those responsible for such crimes are brought to justice.
Craig Whittaker
Calder Valley private and social landlords have reported to me the rising number of instances of houses in between tenancies being totally ripped apart—including water pipes, gas pipes and, indeed, electric wiring—causing thousands of pounds worth of damage. Does the Minister agree with me that the time has come for legislation to clamp down on rogue metal dealers who trade in such items?
James Brokenshire
The Government do not legislate lightly and have undertaken a range of work to tackle metal theft through non-legislative means. However, we have now reached the stage where the only conclusion is that new legislation is needed to tackle metal theft. We are therefore in discussion with other Departments to agree on the most appropriate option for bringing these changes forward.
Nadine Dorries
Does the Minister think it is time to change the law on the scrap metal industry? On Friday I met Alf Hitchcock, the chief constable of Bedfordshire, who informed me that his police force had targeted the dealers. The police found people coming along with stolen scrap metal, some of whom had driven vehicles there with stolen red diesel. The law at the moment pertains to an Act that was designed around the days of Steptoe and Son; is it not time to change the law?
James Brokenshire
As I thought I had already indicated, we believe that existing regulation of the scrap metal industry through the Scrap Metal Dealers Act 1964 needs to be revised, as the law is no longer fit for purpose. We need to combine that with further enforcement and better intelligence, which is why the ACPO metal theft working group is seeking to equip police forces with the necessary tactical information to assist Bedfordshire and other police forces in cracking down on this crime.
Mr Jim Cunningham (Coventry South) (Lab)
Has the Minister had any discussions with Virgin Trains, for example, and the police about what happens to the metal stolen from the railway lines, which can pose a severe hazard to public safety?
James Brokenshire
I absolutely agree with the hon. Gentleman about the risk, threat, inconvenience and serious harm that can be caused by stealing cabling and signalling equipment from the railways. The hon. Gentleman may be aware that the British Transport Police has the lead role in respect of the work conducted by ACPO; it is actively engaged in that and is working with the rail industry, recognising the particular problems that the hon. Gentleman has identified and the threats posed to rail infrastructure.
Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)
Is the Minister aware of the appalling crime two years ago in the area of the former Auchengeich pit in my constituency relating to a beautiful piece of sculpture built by the community in honour of the 47 brave men who had lost their lives in a tragedy of 1959? The community came together again and built another statue. I have no criticism of Strathclyde police, but does the Minister agree that on such issues the closest co-operation among forces throughout the UK is helpful?
James Brokenshire
I agree with the right hon. Gentleman. Many sickening crimes have occurred where monuments and places that exist to celebrate our war dead or important historical incidents have been desecrated. I think the whole House will join me in utterly condemning those responsible for these appalling actions. That is why we are moving forward by tackling the problem with the new taskforce. I agree with the right hon. Gentleman that providing better intelligence and co-ordination is helpful, which is precisely what we will do and are already doing.
Ian Austin (Dudley North) (Lab)
I welcome the importance that the Minister attaches to this issue, but it should not be too difficult to sort out. All he needs to do is to ensure that sellers verify their identity when selling metal and that each transaction is recorded, and to make cash payments for scrap metal illegal. That seems pretty simple to me and to businesses in the black country that are calling for those measures. Why can we not get on with this more quickly?
James Brokenshire
We are moving forward with this quickly. That is why we are taking the action that I have outlined today. We are also dealing with the aspects that he mentioned—on the regulation of the scrap metal industry, on having stronger enforcement powers to ensure that those responsible for these actions are held accountable for them, and on ensuring that we move to a cashless model of payment. Those are precisely the areas on which we are focusing, and we will report back to the House shortly.
Mark Garnier (Wyre Forest) (Con)
My hon. Friend will know that not just schools and churches but voluntary organisations, such as the one that runs the Severn Valley railway in my constituency, have been victims of this invidious crime. He will also know that an all-party group on combating metal theft was set up last week under the joint chairmanship of my hon. Friend the Member for Dudley South (Chris Kelly) and the hon. Member for Hyndburn (Graham Jones). Will the Minister agree to meet me, along with other officers of the all-party group, to discuss how we can combat metal theft?
James Brokenshire
I am aware of the strong interest that the House attaches to this issue, which is evidenced by the fact that there are nine questions about it on today’s Order Paper. I believe that that constitutes a record number of Home Office questions on a single issue. My noble Friend Lord Henley, the Minister responsible for crime prevention and antisocial behaviour reduction, is well aware of the concern felt by Members of both Houses, and has told me that he would be very willing to meet members of the all-party parliamentary group.
Paul Goggins (Wythenshawe and Sale East) (Lab)
13. What plans she has to review the Riot (Damages) Act 1886.
The Minister for Policing and Criminal Justice (Nick Herbert)
A review of the Riot (Damages) Act 1886 is under way, and will consider all options for reform. It will include all learning from the August disturbances, and will involve consultation with people affected by them who made claims under the Act as well as organisations involved in the recovery. We expect it to be completed before the end of the current financial year.
Paul Goggins
I commend the Minister for the positive way in which he is engaging with Greater Manchester police authority, which, as he knows, carries a liability of more than £9 million as a result of the disorder in August. As he conducts his review, will he ensure that there is more clarity about responsibilities and the financial support given to police authorities by the Home Office, and that more pressure is put on the insurance industry to deal with claims promptly?
Nick Herbert
I agree with the right hon. Gentleman. We have been concerned about the rate at which payments have been made, and last week I convened a meeting with representatives of the insurance industry to discuss the matter. They assured me that, according to their latest assessment, some two thirds of businesses have received a partial or full payment. However, there ought to be processes to ensure that people are paid more swiftly, and such processes need to be sorted out by police authorities and the industry.
Paul Maynard (Blackpool North and Cleveleys) (Con)
Many of the people who have made claims under the 1886 Act have done so because of damage to their motor vehicles, but in 1886 the car had only been invented for a year. Can the Minister assure me that his review takes into account all the possible forms of damage so that no one will be excluded?
Nick Herbert
It is true that uninsured vehicles are not covered by the Act, as no one envisaged the need for them to be. They would be covered if they were on private property, but not if they were in a public place. Of course, if vehicles are insured, a claim can be made against the insurers. This is one of the issues that we shall have to consider in the review.
Lilian Greenwood (Nottingham South) (Lab)
14. What discussions she has had with police authorities on the police funding settlement for 2012-13.
The Minister for Policing and Criminal Justice (Nick Herbert)
Last Thursday I laid the provisional police grant report for 2012-13 before the House. It set out provisional allocations of the Home Office core settlement for police authorities for 2012-13, and is now the subject of a consultation. I will consider all responses carefully.
Lilian Greenwood
The Deputy Prime Minister says that the funding settlement for Nottinghamshire police is “manageable”, but the police themselves say:
“The Government’s inequitable cuts will impact on frontline policing in Nottinghamshire”.
Who does the Minister think my constituents should believe?
Nick Herbert
Of course dealing with budget reductions is challenging for police forces, but we are convinced that they can do it. I recently met members of the Nottinghamshire force, including the chief constable, and we discussed the issues. The chief constable has acknowledged the difficulty of the decisions involved, but has also said that she is
“doing all we can to protect frontline services and target resources to areas where the public are most commonly affected”.
Mr David Hanson (Delyn) (Lab)
The police settlement, which, as the Minister acknowledged, was published last week, takes a further £700 million out of the police budget at a time when we are seeing worrying increases in crime, with violent crime, burglary and theft all going up in last month’s figures. Senior police officers have already expressed their concern that the settlement means they will have to do far more than can be achieved through efficiency savings. If the police, in responding to this consultation, feel that the settlement is inadequate to meet policing challenges next year, will the Minister think again? Will he ensure that the 3,000 extra police officers that the Liberal Democrats called for are put in place?
Nick Herbert
I note what the right hon. Gentleman says about these issues. He is trying to give the impression that a further reduction in funding has been announced, but he knows that that is not the case; these reductions were announced beforehand, as part of the review, and they have not changed in relation to the proposed allocation for forces. I also note that he is coming forward with his familiar solution—Labour’s only policy on the police—which is to call for more public spending. It is that attitude that got this country into the mess that we inherited from the previous Government. Perhaps he might have something more constructive to say about policing in future.
Caroline Dinenage (Gosport) (Con)
15. What steps she is taking to tackle the practice of forced marriage.
The Parliamentary Under-Secretary of State for the Home Department (Lynne Featherstone)
This Government are committed to ending the abusive practice of forced marriage and to ensuring that victims are protected, as this is indefensible and never acceptable. The Government provide practical support to victims through the forced marriage unit, and we have today published a consultation on whether forced marriage should be made a criminal offence.
Caroline Dinenage
I thank the Minister for that answer and warmly welcome today’s announcement of a public consultation on this shameful practice. Does she agree that it is vital that the Government work closely with the relevant communities to ensure that women are no longer discouraged from reporting forced marriages?
Lynne Featherstone
My hon. Friend makes a very important point, and working with the communities is the only way deal with this issue. We want people to come forward and we do not want families to be deterred, so it is only by working with communities that we are likely to achieve our aims.
Kevin Brennan (Cardiff West) (Lab)
16. What assessment she has made of the effectiveness of the appointments booking system at her Department’s offices in Croydon.
The Minister for Immigration (Damian Green)
The effectiveness of these systems is continuously monitored, including customer satisfaction with appointments booking. In Croydon, the UK Border Agency offers appointments for temporary and permanent migration at the public inquiry office, and for claiming asylum at the asylum screening unit.
Kevin Brennan
One of my constituents has been trying since August, both online and by telephone, to get an appointment for any day and any time. I know that the Minister is assiduous so, rather than just listen to what his officials tell him, will he do a bit of mystery shopping and try to get an appointment, online on his home computer or by telephone, to see whether or not the system is working in practice?
Damian Green
I am always happy to take the hon. Gentleman’s advice. He does not say whether this relates to the asylum screening unit or a general immigration appointment.
Damian Green
In that case, I will look at the efficiency of the system. I should tell the hon. Gentleman that over the past quarter, customer satisfaction with that booking system has improved markedly. Some 84% of customers surveyed stated that they were “very” or “fairly” satisfied with the effectiveness of the appointments booking system. If he wishes to give me the name of the person who is trying hard to get an appointment, I will ensure that they get one.
Mr William Bain (Glasgow North East) (Lab)
19. What estimate she has made of the likely level of net migration in 2015.
The Minister for Immigration (Damian Green)
The latest published estimates show net migration in the year to March 2011 at 245,000. That figure remains too high, which is why the Government are pressing ahead with their reform of the immigration system. This will bring numbers down to sustainable levels in the tens of thousands by 2015.
Mr Bain
The Prime Minister has said that, “No ifs, no buts”, net migration will fall to the tens of thousands by the end of this Parliament. Given that net migration into the UK was 32,000 higher in the 12 months to March 2011 than it was in the previous 12 months, does the Minister believe that he will ever meet this target?
Damian Green
Yes, I do. I find complaints about high immigration from those on the Labour Benches a bit rich, given what they did to the immigration system. I simply point the hon. Gentleman to the figures for the past six months, because over the past two quarters the figures have started coming down. We are beginning to make a dent in the disaster of Labour’s immigration policy.
Amber Rudd (Hastings and Rye) (Con)
I welcome the roll-out of the e-Borders system, but what role will the border police command play from 2013, as part of the National Crime Agency, in helping to reduce illegal immigration?
Damian Green
I am happy to assure my hon. Friend that it will play a significant role. Of course, as well as having the policies that bring the overall numbers down we need proper enforcement mechanisms to ensure that they can be properly implemented. The National Crime Agency and the border command within it will play a significant role in improving the security of our borders.
David Morris (Morecambe and Lunesdale) (Con)
Thank you, Mr Speaker, but I believe that my question 21 has already been answered.
Mr Speaker
The hon. Gentleman is in danger of setting a trend. If others followed it, our proceedings would conclude more speedily. I am grateful to him for his self-denial.
Mr David Amess (Southend West) (Con)
T1. If she will make a statement on her departmental responsibilities.
The Secretary of State for the Home Department (Mrs Theresa May)
As the House just heard, this Government are committed to controlling immigration and reducing net migration. We have already introduced an annual limit on the number of non-EU workers, overhauled the student visa route and increased enforcement activity. Our next steps are to break the link between temporary and permanent migration by restricting settlement rights and to reform family migration. Members of this House have played a crucial role in shaping these reforms and I welcome the opportunity for further such contributions in this afternoon’s Government debate, which will be ably led by my hon. Friend the Minister for Immigration.
Mr Amess
While I recognise that my right hon. Friend has a very tough job as Home Secretary, does she understand my disappointment? When I first became MP for Basildon, we had one police station; by the time I left we had three and Lord Mackay of Clashfern had opened a magnificent courthouse. I then became the Member of Parliament for Southend West, where there are a huge number of elderly people and where I started off with three police stations, and I will shortly have none.
Mrs May
I feel the need not to let it rest there, Mr Speaker, but to respond to the question that my hon. Friend the Member for Southend West (Mr Amess) asked. I am sure that he will agree that what matters is accessibility to police. That is why one thing the Government are doing is reducing the amount of bureaucracy that the police have to deal with so that they can get out on the streets more. It is also why a number of forces up and down the country are considering accessibility in a different way, rather than simply having fixed police stations. I understand that Essex, for example, has seven mobile police stations that go to areas where people congregate, such as supermarket car parks, to increase accessibility to the police for members of the public.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
At the end of this month, the control orders legislation expires and the police and security services will have just six weeks’ transition to get the new weaker terrorism prevention and investigation measures and extra surveillance in place. The assistant commissioner of the Met, in a recent letter placed in the Library of the House, confirms the Met’s position last summer that
“it would take at least a year to recruit and train additional surveillance teams”.
She also says that
“not all the additional assets will be immediately in place”.
Why, then, is the Home Secretary so determined to push ahead with weaker counter-terror powers so quickly? Why does she not delay them and avoid piling extra pressure and risk on to the Met in the new year?
Mrs May
The right hon. Lady knows full well that the Metropolitan Police Service and the Security Service will not have just six weeks to put transitional arrangements in place. They have been aware for some time that TPIMs would come in and extra funding would be available for extra surveillance. Subsequent to the letter sent by the assistant commissioner, the Metropolitan Police Commissioner has written to the Chairman of the Home Affairs Committee to make it absolutely clear that effective transitional arrangements from control orders to TPIMs will be in place to ensure that we continue to do what we want to do and what everybody wants us to do: that is, maintain the security of people in this country.
Yvette Cooper
The Met has been put in a very difficult position. This is Olympic year and it will have considerable additional pressures from policing the games, from counter-terrorism and from an £80 million budget gap. There are no guarantees that it will not have to stump up for some of the riot compensation, too. The letter from the Met says that
“it is not possible to assess fully how the measures will work with the additional capability until both are fully in place and bedded in.”
The Home Secretary is forcing the police to conduct an experiment with security in Olympic year. The letter says:
“We will…seek to ensure that there is no substantial increase in overall risk to the UK.”
Why does this Home Secretary want to be personally responsible for any increase in the overall risk to the UK in Olympic year as a result of the timing of her legislation? Why does she not think again?
Mrs May
The right hon. Lady knows that when we introduced TPIMs we were able to give assurances about the mitigation of risks in relation to TPIMs and their replacement of control orders. I ask her to reflect on why the coalition Government reviewed counter-terrorism legislation when we came to power. It was because of a concern about the impact of some of the legislation that her Government had introduced. It was a rebalancing of the necessary role of ensuring national security and maintaining civil liberties that led us to review that legislation. We have in place measures that I believe will enable us to provide the security that we need to provide. The package of measures includes TPIMs and extra money for surveillance for both the Security Service and the police, and I am confident that that package will give them the degree of cover they need to ensure that we maintain security.
Greg Mulholland (Leeds North West) (LD)
T2. My constituent Altaf Sadique had his car registration plate cloned earlier this year. He reported that to the police, who accepted the report and are aware that his car remains in west Yorkshire, but he continues to get fines from all around the country and the police say it is nothing to do with them. Will the Minister look seriously at having a national strategy to ensure that police forces co-operate to deal with this serious problem?
The Minister for Policing and Criminal Justice (Nick Herbert)
I will certainly look into the matter that my hon. Friend raises and I am happy to discuss it further with him. Police co-operation in all matters is, of course, desirable.
Kate Green (Stretford and Urmston) (Lab)
T6. Tomorrow, the Howard League for Penal Reform will publish a report showing that about 50,000 children, including about 10,000 girls, spent the night in police custody in both 2009 and 2010. Will the Home Secretary look urgently at the inappropriate and overuse of the detention of children overnight? What can she do to improve processes between local authorities and the police?
Nick Herbert
I note the hon. Lady’s point and we will study the report when it is produced by the Howard League tomorrow.
Simon Kirby (Brighton, Kemptown) (Con)
T5. What progress has the Minister made in identifying bogus colleges and what reassurances can he give to legitimate colleges in Brighton and Hove?
The Minister for Immigration (Damian Green)
As my right hon. Friend the Home Secretary said a few minutes ago, the number of colleges that did not register when the new proper accreditation system came in was more than 470. Some but not all of those will have been bogus colleges, so we have swept away a vast raft of bogus colleges. Reputable colleges can now be assured that we have a proper accreditation system. If they satisfy that system, their students and the wider community will know that they are genuine colleges.
Mr David Lammy (Tottenham) (Lab)
I wrote to the Secretary of State two weeks ago asking her to review the Independent Police Complaints Commission’s handling of the Mark Duggan case. Given the catastrophe that was this morning’s pre-hearing inquest and the family’s declaring no public confidence in the IPCC, will she now look at its handling of the case and the thoroughness of this investigation?
Nick Herbert
I have just replied to the right hon. Gentleman. I have spoken to the acting chairman of the IPCC about the matter and the investigation, and he has assured me about the investigation’s integrity. We therefore see no reason at the moment to order any review. It is important that the investigation takes its course properly.
Craig Whittaker (Calder Valley) (Con)
T7. Will the Minister explain what she is doing to ensure that the families of missing people get the help and support they need when a loved one goes missing?
The Minister for Equalities (Lynne Featherstone)
We have published the new missing children and adults strategy, which has three important provisions. The first of these is prevention and reducing the number of people who go missing in the first place. The second is protection and reducing the harm to those who do go missing. The third is provision—providing support and advice to missing persons and their families by referring them promptly to agencies and ensuring that they understand how and where to access help.
Bill Esterson (Sefton Central) (Lab)
Merseyside police have been very successful in cutting metal theft in my constituency, particularly by working with reputable traders. They deserve congratulations on their approach. Will the Home Secretary help the police across the country and back Labour’s four-point plan, including tougher police powers to close down rogue traders?
The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)
I welcome the work of Merseyside police and other police forces around the country in dealing with metal theft. It is why we are moving forward with the metal theft taskforce, and why that will also be responsible for greater co-ordination, but I hear the points that the hon. Gentleman makes about penalties. That is something that we are actively considering in the context of our review of the current legislation. [Interruption.]
Gavin Barwell (Croydon Central) (Con)
T8. Despite the tough settlement for the Metropolitan police, our borough commander in Croydon has found the resources for a dedicated team to tackle gangs. Given that gang members played a key role in the riots in Croydon on 8 August, can my right hon. Friend confirm that Croydon is one of the 22 areas to which she referred that will benefit from Government funding?
Mrs May
I am grateful to my hon. Friend for giving me the opportunity of doing just that. I can confirm that Croydon is one of the 22 areas that will be receiving funding. That funding will be distributed according to the proportion of 10 to 24-year-olds in each of the 22 areas, and I can tell him that on that basis Croydon has the fourth highest proportion and will therefore receive the fourth highest sum of funding.
Ian Austin (Dudley North) (Lab)
The weekend before last, 13 British citizens including, disgracefully, a Member of this House, were present at a party in a French restaurant where members of that group—[Interruption.] It is no laughing matter—where members of that group toasted the Third Reich and chanted “Hitler, Hitler, Hitler,” behaviour which, I understand, is illegal in France. Will the Home Secretary give me her assurance that she will be contacting her French counterparts and giving them every promise that the matter will be dealt with?
David Morris (Morecambe and Lunesdale) (Con)
T9. I welcome plans to set up a professional body for policing. Does my right hon. Friend agree that such a body would be an ideal opportunity to promote the importance of high-quality training, which is very much in the interests of our police officers?
Nick Herbert
I agree with my hon. Friend. We have an important opportunity now to set up a professional body for policing to focus on the need to provide high-quality training for police officers and to set standards. I am grateful to the senior police leadership for engaging in our work to discuss the issue. We will be bringing proposals before the House.
Paul Flynn (Newport West) (Lab)
Can the Minister give me the precise total number of prisons in Britain that are free from the use of illegal drugs?
Esther McVey (Wirral West) (Con)
May I draw attention to the Merseyside police force and how it has handled staffing changes and efficiency savings over the past year? Not only has the force hit all its targets, but crime is down 3%, antisocial behaviour is down 6%, and public confidence is up 5%, so despite the scaremongering from the Opposition, it is possible to have efficiency savings and a decrease in crime.
Mrs May
I join my hon. Friend in paying tribute to the work that is being done by the Merseyside force in relation to the savings that it is making in its budgets. As Chief Constable Jon Murphy has said,
“It’s not salami slicing but re-engineering the whole organisation.”
As my hon. Friend has shown, that can be done effectively, saving money but providing a good service to the public. [Interruption.]
Tessa Munt (Wells) (LD)
The Home Secretary is aware that women prisoners will only ever move between women’s prisons, and similarly young people will only move through young offenders institutions. What discussions has she had with her counterparts at the Department for Business, Innovation and Skills and the Ministry of Justice to ensure that we look at prison education for women as a cluster and for young people as a cluster, instead of relying on local arrangements?
Mrs May
My hon. Friend raises an important issue, and behind it lies the important issue of the number of women who go to prison. For many women, an alternative arrangement might be more appropriate, which is something Baroness Corston raised in her report on women in prison. I will certainly take on board my hon. Friend’s point and ensure that it is put to the Secretaries of State for Business, Innovation and Skills and for Justice.
Mr Peter Bone (Wellingborough) (Con)
Does the Immigration Minister agree that on rare occasions something good comes out of the European Union and that we should appoint a national rapporteur on human trafficking?
Damian Green
I am afraid that on this issue I am more Eurosceptic than my hon. Friend, as I do not believe that a national rapporteur would improve our already very effective combating of human trafficking. Indeed, only two other EU member states have such a rapporteur.
EU Council
(12 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Prime Minister (Mr David Cameron)
With permission, Mr Speaker, I would like to make a statement on last week’s European Council—
Mr Speaker
Order. The House must calm itself, taking whatever medicaments are required for the purpose, and the Prime Minister’s statement must and will be heard.
The Prime Minister
Thank you, Mr Speaker.
I went to Brussels with one objective: to protect Britain’s national interest, and that is what I did. Let me refer to what I said to the House last Wednesday. I made it clear that if the eurozone countries wanted a treaty involving all 27 members of the European Union, we would insist on some safeguards for Britain to protect our own national interests. Some thought that the safeguards I was asking for were relatively modest. Nevertheless, satisfactory safeguards were not forthcoming, so I did not agree to the treaty. Let me be clear about exactly what happened, what it means for Britain and what I see happening next.
Mr Speaker
Order. I apologise for interrupting the Prime Minister. I hope that Members have now got it out of their system. The statement will be heard. Right hon. and hon. Members on both sides of the House will have ample opportunity to question the Prime Minister, but courtesy and parliamentary convention dictate that the statement will be heard.
The Prime Minister
Thank you, Mr Speaker.
Let me take the House through the events of last week. At this Council, the eurozone economies agreed that there should be much tighter fiscal discipline in the eurozone as part of restoring market confidence. That is something that Britain recognises as necessary in a single currency. We want the eurozone to sort out its problems. That is in Britain’s national interest because the crisis in the eurozone is having a chilling effect on Britain’s economy too, so the question at the Council was not whether there should be greater fiscal discipline in the eurozone, but how it should be achieved.
There were two possible outcomes: either a treaty of all 27 countries, with proper safeguards for Britain; or a separate treaty in which eurozone countries and others would pool their sovereignty on an intergovernmental basis, with Britain maintaining its position in the single market and in the European Union of 27 members. We went seeking a deal at 27 and I responded to the German and French proposal for treaty change in good faith, genuinely looking to reach an agreement at the level of the whole of the European Union, with the necessary safeguards for Britain. Those safeguards—on the single market and on financial services—were modest, reasonable and relevant. We were not trying to create an unfair advantage for Britain. London is the leading centre for financial services in the world, and this sector employs 100,000 people in Birmingham and a further 150,000 people in Scotland. It supports the rest of the economy in Britain and more widely in Europe.
We were not asking for a UK opt-out, special exemption or a generalised emergency brake on financial services legislation. They were safeguards sought for the EU as a whole. We were simply asking for a level playing field for open competition for financial services companies in all EU countries, with arrangements that would enable every EU member state to regulate its financial sector properly. To those who say that we were trying to go soft on the banks, nothing could be further from the truth. We have said that we are going to respond positively to the tough measures set out in the Vickers report. There are issues about whether this can be done under current European regulations, so one of the things we wanted was to make sure we could go further than European rules on regulating the banks. The Financial Services Authority report on RBS today demonstrates just how necessary that is—[Interruption]—and perhaps instead of talking Opposition Members will remember their responsibility for the mess that they created.
Those who say that this proposed treaty change was all about safeguarding the eurozone, and so Britain should not have tried to interfere or to insist on safeguards, are fundamentally wrong as well. The EU treaty is the treaty of those outside the euro as much as it is for those inside the euro, so creating a new eurozone treaty within the existing EU treaty without proper safeguards would have changed the EU for us, too. It would not just have meant a whole new bureaucracy, with rules and competences for the eurozone countries being incorporated directly into the EU treaty; it would have changed the nature of the EU—strengthening the eurozone without balancing measures to strengthen the single market.
Of course, an intergovernmental arrangement is not without risks, but we did not want to see that imbalance hard-wired into the treaty without proper safeguards. To those who believe that that was not a real risk, I tell them that France and Germany said in their letter last week that the eurozone should work on single market issues such as financial regulation and competitiveness. That is why we required safeguards, and I make no apology for it.
Of course, I wish those safeguards had been accepted, but frankly I have to tell the House that the choice was a treaty without proper safeguards or no treaty—and the right answer was no treaty. It was not an easy thing to do, but it was the right thing to do. As a result, eurozone countries and others are now making separate arrangements for the fiscal integration that they need to solve the problems in the eurozone. They recognise that this approach will be less attractive, more complex and more difficult to enforce, and they would prefer to incorporate the new treaty into the EU treaties in future. Our position remains the same.
Let me turn to what this means for Britain. Britain remains a full member of the European Union, and the events of the last week do nothing to change that. Our membership of the EU is vital to our national interest. We are a trading nation, and we need the single market for trade, investment and jobs. The EU makes Britain a gateway to the largest single market in the world for investors; it secures half of our exports and millions of British jobs; and membership of the EU strengthens our ability to progress our foreign policy objectives, too, giving us a strong voice on the global stage on issues such as trade and, as we have seen in Durban this week, climate change and the environment.
So we are in the European Union and we want to be. This week there will be meetings of the Councils on Transport, Telecommunications and Energy, and Agriculture and Fisheries. Britain will be there as a full member of each one, but I believe in an EU with the flexibility of a network, not the rigidity of a bloc. We are not in the Schengen no-borders agreement, and neither should we be, because it is right that we use our natural advantage as an island to protect ourselves against illegal immigration, guns and drugs; we are not in the single currency, and while I am Prime Minister we will never join; we are not in the new euro area bail-out funds, even though we had to negotiate our way out of them; and we are not in this year’s euro-plus pact.
When the euro was created, the previous Government agreed that there would need to be separate meetings of eurozone Ministers, and it is hardly surprising that those countries required by treaty to join the euro chose to join the existing eurozone members in developing future arrangements for the eurozone. Those countries are going to be negotiating a treaty that passes unprecedented powers from their nation states to Brussels. Some will have budgets effectively checked and re-written by the European Commission. None of this will happen in Britain. But, just as we wanted safeguards for Britain’s interests if we changed the EU treaty, we will continue to be vigilant in protecting our national interests.
An intergovernmental treaty, while it does not carry with it the same dangers for Britain, is none the less not without risks. The decision of the new eurozone-led arrangement is a discussion that is just beginning. We want the new treaty to work in stabilising the euro and putting it on a firm foundation. I understand why they would want to use EU institutions—but this is new territory and does raise important issues that we will want to explore with the euro-plus countries. So in the months to come we will be vigorously engaged in the debate about how institutions built for 27 should continue to operate fairly for all member states, Britain included. The UK is supportive of the role of the institutions, not least because of the role they play in safeguarding the single market, so we will look constructively at any proposals with an open mind. But let us be clear about one thing: if Britain had agreed treaty change without safeguards, there would be no discussion. Britain would not have proper protection.
Finally, let me turn to the next steps. The most pressing step of all is to fix the problems of the euro. As I have said, that involves far more than simply medium-term fiscal integration, important though that is. Above all, the eurozone needs to focus, at the very least, on implementing its October agreement. The markets want to be assured that the eurozone firewall is big enough, that Europe’s banks are being adequately recapitalised, and that problems in countries like Greece have been properly dealt with. There was some progress at the Council, but far more needs to be done. The eurozone countries noted the possibility of additional IMF assistance. Our position on IMF resources remains the one I set out at the Cannes G20 summit. Alongside non-European G20 countries, we are ready to look positively at strengthening the IMF’s capacity to help countries in difficulty across the world. But IMF resources are for countries, not currencies, and cannot be used specifically to support the euro—and we would not support that.
There also needs to be greater competitiveness between the countries of the eurozone. To be frank, the whole of Europe needs to become more competitive. That is the way to more jobs and growth. Many eurozone countries have substantial trade deficits as well as budget deficits. If they are not to be reliant on massive transfers of capital, they need to become more competitive and trade out of those deficits. The British agenda has always been about improving Europe’s competitiveness, and at recent Councils we have achieved substantial progress on completing the single market in services, opening up our energy markets, and exempting micro-businesses from future regulations. This has been done by working in partnership with a combination of countries that are in the eurozone and outside it. Similarly, on this year’s EU budget, it was Britain, in partnership with France, Germany and Holland, that successfully insisted on no real increases in resources—for the first time in many, many years in the EU.
On defence, Britain is an absolutely key European player, whether leading the NATO rapid reaction force or tackling piracy in the Indian ocean. Our partnership with France—[Interruption.]
Mr Speaker
Order. I apologise for having to interrupt the Prime Minister. Those on the Opposition Front Bench, at the moment, are making the most noise. [Interruption.] Order. This is not acceptable. The Leader of the Opposition will have an opportunity to reply on behalf of the Opposition, and his colleagues must conduct themselves with a degree of reserve.
The Prime Minister
Thank you, Mr Speaker.
Our partnership with France was crucial in taking successful action in Libya. Britain will continue to form alliances on the things we want to get done. We have always had a leading role in advocating the policy of enlargement and, at this Council, we all celebrated the signing of Croatia’s accession treaty. That was one European treaty I was happy to sign.
Let me conclude with this point. I do not believe there is a binary choice for Britain: that we can either sacrifice the national interest on issue after issue or lose our influence at the heart of Europe’s decision-making processes. I am absolutely clear that it is possible to be a full, committed and influential member of the European Union but to stay out of arrangements where they do not protect our interests. That is what I have done at this Council. That is what I will continue to do as long as I am Prime Minister. It is the right course for this country. I commend this statement to the House.
Edward Miliband (Doncaster North) (Lab)
May I start by thanking the Prime Minister for his statement? We all note the absence of the Deputy Prime Minister from his normal place.
The reality is this: the Prime Minister has given up our seat at the table; he has exposed, not protected, British business; and he has come back with a bad deal for Britain. The Prime Minister told us that his first priority at the summit was to sort out the eurozone, but the euro crisis is not resolved. There is no promise by the European Central Bank to be the lender of last resort, there is no plan for growth and there is little progress on bank recapitalisation. Will he first tell us why his promise of action did not materialise and what that will mean for the British economy in the months ahead? At the summit that was meant to solve these problems, the Prime Minister walked away from the table.
Let me turn to where that leaves Britain. Many people feared an outcome of 17 countries going it alone. Few could have anticipated the diplomatic disaster of 26 going ahead and one country—Britain—being left behind. The Prime Minister rests his whole case on the fact that 26 countries will not be able to use the existing treaties or institutions. That is apparently the win that he got for this country. However, can he confirm that article 273 of the treaty on the functioning of the European Union allows those countries to use the European Court of Justice? No doubt they will end up using the Commission’s services and, yes, even the buildings—the point that he made in the negotiations. In case anyone had any doubt, that was confirmed yesterday by the absent Deputy Prime Minister, who said:
“Well it clearly would be ludicrous for the 26, which is pretty well the whole of the European Union…to completely reinvent…a whole panoply of new institutions.”
The Prime Minister will not even be sent the agenda for the meetings that will start in January. He will read about decisions affecting British business in the pages of the Financial Times.
The Prime Minister’s next claim was that he did not want to sign up to the fiscal rules being imposed on euro area countries. Can he confirm that no one even proposed that those would have applied to Britain? The next claim in his statement was that he did what he did because the treaty posed a grave threat to our financial services industry. However, over the whole course of the weekend, he has been unable to point to a single proposal in the proposed treaty that would entail the alleged destruction of the City of London. Will he tell us what the threat was?
In any case, there is nothing worse for protecting our interests in financial services than the outcome that the Prime Minister ended up with. Will he confirm that he has not secured one extra protection for financial services? The veto on financial services regulation—he did not get it. The guarantees on the location of the European Banking Authority—he did not get them. Far from protecting our interests, he has left us without a voice.
The sensible members of his party understand that as well as anyone. What did Lord Heseltine say—[Interruption.] Oh, how significant! That is what the Tory party now thinks of Lord Heseltine. What did he say at the weekend?
“You can’t protect the interest of the City by floating off into the middle of the Atlantic.”
It is no longer the Conservative party of Lord Heseltine; it is the Conservative party of the hon. Member for Stone (Mr Cash), who went out on Friday saying that this was exactly what he had always wanted.
What about the rest of British business, which the Prime Minister does not seem to have been thinking about? The danger is that the discussions about the single market, on which it relies, will now take place without us. Only this Prime Minister could call that leadership. The Deputy Prime Minister clearly does not agree with him. He said that the outcome leaves Britain “isolated and marginalised”. Does the Prime Minister agree with that assessment? How can he expect to persuade anybody else that it is a good outcome when he cannot persuade his own deputy?
The Prime Minister claims to have wielded a veto. Let me explain to him that a veto is supposed to stop something happening. It is not a veto when the thing that you wanted to stop goes ahead without you. That is called losing. That is called being defeated. That is called letting Britain down. I have not finished with the Prime Minister yet. Next, I want to ask him—[Interruption.]
Mr Speaker
Order. I am worried about the health of the right hon. Member for Mid Sussex (Nicholas Soames). He must calm himself and have a lie down, if necessary, while we listen to the Leader of the Opposition.
Edward Miliband
Next, I want to ask the Prime Minister about how he ended up with this outcome. The proposals he tabled, when he tabled them and his failure even to try to build alliances for them suggest someone who did not exactly want a deal. Can he confirm that what he actually proposed was to unpick the existing rules of Lady Thatcher’s Single European Act as regards the internal market? Given that those proposals would have changed 25 years of the single market, why did he make them in the final hours of the summit?
Where were the Prime Minister’s allies? If he wanted a deal, why did he fail to build alliances with the Swedes, the Dutch, the Poles and Britain’s traditional supporters? If he really did want to protect the single market and financial services, why did he not seek guarantees that those issues would be discussed only with all 27 members in the room?
In any case, the Prime Minister should not have walked away, because the truth is—[Interruption.] Just calm down. The truth is, the treaty will take months and months to negotiate. Other countries have carried on negotiating and carried on fighting for their national interest. The real answer is this: he did not want a deal, because he could not deliver it through his party. He responded to the biggest rebellion of his party in Europe in a generation by making the biggest mistake of Britain in Europe for a generation.
So this is a bad deal, which we ended up with for bad reasons, and it will have long-lasting consequences. It is a decision that means we are on the sidelines, not just for one summit but for the years ahead. The Prime Minister said in this House on 24 October that what mattered
“is not only access to that single market but the need to ensure that we are sitting around the table”.
He went on:
“That is key to our national interest, and we must not lose that.”—[Official Report, 24 October 2011; Vol. 534, c. 38.]
Well congratulations, Prime Minister, that is exactly what you have done. He has done what no Prime Minister ever thought was wise—to leave the room to others, to abandon our seat at the table.
The Prime Minister says he had no choice. He did. He could have stayed inside and fought his corner; he should have stayed inside and fought his corner. Faced with a choice between the national interest and his party interest, he has chosen the party interest. We will rue the day this Prime Minister left Britain alone, without allies, without influence. It is bad for business, it is bad for jobs, it is bad for Britain.
The Prime Minister
A lot of sound and fury, but one crucial weakness—the right hon. Gentleman has not told us whether he would sign up to the new treaty. He had about 15 minutes, and he could not tell us whether he is for it or against it. Has it got enough safeguards in it, or has it got too few safeguards? Would a Labour Government back it, or would they veto it? Let me tell him: if you cannot decide, you cannot lead.
Inasmuch as there were some specific questions, let me try to answer them. The right hon. Gentleman asks what the threat was to financial services. Why cannot he understand that if you allowed a new treaty of 17 members within the EU, without proper safeguards, huge damage could be done to the single market and to financial services? He asks what will happen when this new organisation goes ahead. Of course, a new organisation cannot do anything that cuts across the existing treaties or the existing legislation, so he does not even understand how the European Union works.
The right hon. Gentleman asks what we gained from the veto. I will tell him: we stopped Britain signing up to a treaty without any safeguards. That is what we gained.
On the issue of the City and financial services, the right hon. Gentleman completely fails to understand that this is a nationwide industry. It is not just the City of London; it is the whole of our country. I have to say, there was not a word about the report today showing that Labour was to blame for the appalling regulation of the Royal Bank of Scotland. Then, of course, we had a lecture—[Interruption.]
Mr Speaker
Order. Members must calm down. I have my eye on one hon. Gentleman from the north of England who entered the House 32 years ago and should know better.
The Prime Minister
Of course, then we had a lecture on how to negotiate. I have to say that I am not going to take any lessons from people who gave in time after time to the comfy consensus rather than ever stand up for Britain. Just look at the record: the previous Government joined a bail-out scheme even though it was not protecting a currency that they were a member of; they gave up the rebate even though they got nothing in terms of the reform of agriculture; and they signed up to the Lisbon treaty but never had the courage to put it to the British people. Every time, they just go along with what others want.
The Leader of the Opposition also talked about growth and jobs. Let me just say this: his plan, alone in Europe, is to spend more, borrow more and increase debt by more. All the while, if he wants to join the euro, he needs to understand that the treaty that is being established would actually make that illegal. The very thing he wants to do in Britain he wants to ban in Brussels.
But the key question the right hon. Gentleman cannot answer is this: does he back this treaty or not? If the answer is yes, he should have the courage to say so. If the answer is no, he should have the honesty to say that I was right to keep Britain out of it. And let me just say this: just because the right hon. Gentleman is in opposition does not mean that he should oppose Britain’s interests.
Sir Peter Tapsell (Louth and Horncastle) (Con)
May I declare my admiration and full-hearted support for my right hon. Friend at this definitive moment in his first premiership, and query whether this Brussels summit achieved anything of strategic value to protect the threatened European banking system? Without the long-delayed and still unpromised massive support of the European Central Bank and the Bundesbank, the euro is doomed—[Hon. Members: “Doomed!”] Yes, doomed—and as Chancellor Merkel has said, the European Union is doomed with it.
The Prime Minister
I certainly agree with my right hon. Friend on the balance of effort that has been given, on the one hand, to new treaty powers and changes, and, on the other, to actually looking at what needs to be done, particularly in the short term, in terms of the firewall, bank recapitalisation and action by the ECB. More needs to be focused on those things rather than on the medium-term power changes in the EU, which I do not think are being hovered over by the markets, which are working out whether countries can pay their debts. In that regard, my right hon. Friend is right.
Mr Jack Straw (Blackburn) (Lab)
There was no draft treaty before the European Council last Thursday and Friday; there was a set of draft conclusions. Will the Prime Minister set out the paragraph numbers that he thinks would have damaged Britain’s interests had we agreed to them? Will he also confirm that we had a veto on a financial transactions tax before the Council and that we still have one; and that financial services regulation was subject to qualified majority voting before last Thursday and still is?
The Prime Minister
As I said in my statement, the eurozone members wanted to create a new treaty within the EU, which has all sorts of dangers. If the right hon. Gentleman looks at the letter that Angela Merkel and Nicolas Sarkozy sent, he will see that they specifically wanted the 17 to look at issues such as financial services and the market within that treaty. Without safeguards, a treaty within a treaty would have been far more dangerous than a treaty outside the EU.
Let me repeat this point: a treaty outside the EU cannot do anything that cuts across European treaties or European legislation. Of course, that is not without its dangers, but my judgment was that without safeguards, an EU treaty was more dangerous.
Sir Malcolm Rifkind (Kensington) (Con)
The leadership of the Prime Minister in Brussels compares favourably with the refusal of the Leader of the Opposition over three long days to indicate whether he would have supported the treaty. The public will come to their own conclusion.
Does the Prime Minister agree that the term “two-speed Europe” is inaccurate, because it implies a destination that all countries will reach except over a different period? Whereas, is it not the case that the UK and perhaps other countries will never find it possible to accept a destination that involves not only a single currency, but fiscal union, tax harmonisation and supranational control of budgets? Is it not necessary to have a fundamental debate about whether Europe can become a Europe à la carte in order to survive?
The Prime Minister
My right hon. and learned Friend makes an important point. This is not about the speed at which different organisations travel: it is about the fact that Europe already has different facets. Britain is not in the single currency or in the Schengen no-borders agreement, but we are a leading member of the single market and we play a huge role in foreign and defence policy throughout Europe and NATO. We should not be embarrassed about that, and we should do what is in our national interest—rather than thinking that the right thing to do is to sign up whether or not it suits us.
David Miliband (South Shields) (Lab)
Will the Prime Minister confirm that in all the negotiations since 1973 the United Kingdom has never lost a significant vote on financial services regulation? Why does he think that his negotiating tactics in the future would fail where those of Margaret Thatcher and Tony Blair succeeded, and why does he think that it is helpful to have driven nine other members of the European Union who are not in the euro into Franco-German hands?
The Prime Minister
For all the right hon. Gentleman’s experience, I think that he is very naive about what is happening in Europe over financial services. Time and again—[Interruption.]
Mr Speaker
Order. Members must calm themselves. I am concerned for them, and I also feel that the Prime Minister must be heard.
The Prime Minister
There have been any number of examples of frankly discriminatory legislation against financial services in the European Union that have affected Britain very badly. Let me give the right hon. Gentleman one example. At the moment, the ECB is taking Britain to court on the basis that we should not be able to clear euros through London. So we would be put in the extraordinary position that banks in Britain could clear Swiss francs, dollars and yen, but—even though we are in the single market—we could not clear euros. That is one example of discriminatory legislation. When you are faced with a situation in which the 17 eurozone members want to go into a further treaty within the European Union, with all the powers and force that would have—[Interruption.] They are not going to have a treaty within the European Union: they are doing it outside—it is right to seek safeguards. That is why the right hon. Gentleman is naive not to understand that.
Sir Menzies Campbell (North East Fife) (LD)
May I congratulate my right hon. Friend on his unequivocal statement that our membership of the European Union is vital to our national interests, and express the hope that he may give it some wider currency in his own party? He mentioned both the single market and the eurozone. What practical steps can our Government take now to assist in reaching a solution to the problems of the eurozone and towards enhancing the opportunities provided by the single market, both of which are essential to the economic prosperity of this country?
The Prime Minister
Let me repeat again to the right hon. and learned Gentleman that I do believe that it is in Britain’s interest to be in the European Union and to be active, especially on those dossiers where that is in our interest—chief among which is the single market. If we want to see what will make a difference to the single currency and the success of the eurozone, nothing matters more than competitiveness, where Britain should be very active, with others both in the eurozone and outside, to drive forward changes. We are fully committed to keeping up that work.
Margaret Hodge (Barking) (Lab)
Any politician with experience of doing business in Europe knows that you never go to a key European meeting without having done extensive and thorough preparatory work, so that as you walk in you are pretty much sure of the outcome you will get. Either the Prime Minister did not bother to do the preparatory work, and betrayed Britain’s long-term interests through sheer incompetence, or he had made up his mind before to use the veto because he was afraid of his own Back Benchers. Which of those two was it?
The Prime Minister
Let me say to the right hon. Lady that I went to Brussels wanting a result at 27, but there were safeguards that I believed that Britain needed. Frankly, you can have all the experience of negotiating in the world, but if you are not prepared to say no from time to time, you do not have any influence or power.
Mr John Redwood (Wokingham) (Con)
I congratulate my right hon. Friend on his excellent statesmanship. Does he agree that Britain has much more negotiating strength today, because Europe knows that it is dealing with a Prime Minister who will say no if he needs to, than when we had two Prime Ministers who gave in to bad deal after bad deal, including giving away our rebate for no good reason?
The Prime Minister
I am grateful to my right hon. Friend. It is the case that on too many occasions under the previous Government, Britain was outnumbered, but on the issue of the rebate, it was given away for nothing in return simply because they wanted to go along with a cosy and comfortable consensus. Sometimes it is necessary to say no. In my judgment, we did not have the safeguards that we needed, so, as a result, it was right not to agree to this treaty.
Mr Denis MacShane (Rotherham) (Lab)
Out of every European Council meeting, there are perceptions and realities. The Prime Minister did list some of the realities, but may I put it to him that the perception around the world, in not just Europe but the United States, is that we have committed a diplomatic catastrophe? The words “isolated” and “Britain” are fused. To come back from that, will he assure the House that in all future negotiations, he will take with him the Deputy Prime Minister, who, I believe, spoke for Britain?
The Prime Minister
The right hon. Gentleman, like so many of those who oppose what has happened, is part of exactly the same group of people who wanted us to join the single currency in the first place. They are never prepared to recognise that there are occasions when we need to safeguard our nation’s interests and we have to be able to say no.
Mr Peter Lilley (Hitchin and Harpenden) (Con)
Does my right hon. Friend agree that the best way to increase one’s influence within Europe and, indeed, within a coalition Government is to set up one’s position and stick to it?
The Prime Minister
I am very grateful to my right hon. Friend for that question. I always find this slightly surprising. Before going to Brussels I set out exactly what I was going to do and what I would do if I could not get the safeguards. I did exactly what I said I was going to do, but apparently in politics these days that is very surprising.
Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)
Will the Basel III regulatory regime for financial services apply in the United Kingdom?
The Prime Minister
I am afraid that I missed the beginning of the right hon. Gentleman’s question.
Mr Nicholas Brown
Will the Basel III regulatory regime for financial services apply in the United Kingdom?
Mr Andrew Tyrie (Chichester) (Con)
The Prime Minister must be right to do whatever is required to protect the 1.3 million jobs in our financial services sector. Will he confirm that the current EU proposals for the so-called maximum harmonisation of bank regulations could prevent us from implementing the conclusions of the Vickers commission to make our banks safer with a ring-fence?
The Prime Minister
My hon. Friend is entirely right. One of the things that we are concerned about is that if we want to take the extra action in this country to make our banks safe, including what Vickers is recommending, there is a danger—and this is the current advice—that the current European regulatory framework could stop us doing that. That is exactly the sort of safeguard—it is entirely reasonable, modest and relevant—to ask for in these negotiations. We did not get it, so, as a result, I was not content to go ahead with the treaty.
Mr Nigel Dodds (Belfast North) (DUP)
May I, on behalf of my right hon. and hon. Friends, commend the Prime Minister for the stance that he took at the European Council? Indeed, his stance has been welcomed by the First Minister and many in the community in Northern Ireland. The question is where we go from here because there is still qualified majority voting. We can still be outvoted by perhaps a vindictive Europe. Will the Prime Minister now indicate what his next step will be to change the fundamental nature of the relationship that we currently have towards one based on co-operation and free trade and away from ever-closer political union?
The Prime Minister
I am grateful to the right hon. Gentleman for his kind remarks. I have long believed, and still believe, that the balance of powers between Britain and Europe is not right, and I would like some of those powers returned. As Prime Minister, I specifically got the bail-out power back through my first negotiations on the European stability mechanism treaty. In the latest negotiations, we prevented a treaty from going ahead at the level of 27 because there were not adequate safeguards. Frankly, I think that we will see now a period of great change in Europe. No one quite knows where this new organisation outside the European treaties will go, what powers it will seek and how it will act. Neither does anyone know exactly how the eurozone will develop. My job in government is to protect and defend the national interest at all times, and that is what I will continue to do.
Richard Ottaway (Croydon South) (Con)
As someone who is not known for his hostility to the European Union, I fully support the Prime Minister for what was an inevitable decision. However, the relationship between the fiscal compact of the 26 and the European Union remains uncertain. In particular, the fiscal compact reads:
“The objective remains to incorporate these provisions into the treaties of the Union as soon as possible.”
In the light of that, does he agree that the battle for Britain’s interest still has a long way to go?
The Prime Minister
The other EU countries recognise that going ahead at less than 27 has its disadvantages: they do not have the power and authority of the European institutions fully behind them and it will make some of the things that they want to do more difficult. None the less, we have set out our position. We believe that those safeguards are necessary, and I will not, and have not, changed my mind about that. I want to make this point one more time because I am not sure that everyone has taken it fully onboard: the disadvantage for those countries that will have a treaty outside the EU is that it means that nothing can be done in that treaty that cuts across the EU treaties or the legislation adopted under them. That is an important safeguard, given that we could not get the safeguard within the EU treaties.
Mr Speaker
Order. If I am to accommodate the large number of Back Benchers, as I always wish to do, we will require brevity, a textbook example of which will now be provided by Mr Chris Bryant. [Laughter.]
Chris Bryant (Rhondda) (Lab)
I think, Mr Speaker, that that was an example of irony.
The single most important thing that our voters have seen over the past weeks and months has been the crisis in the economies across the whole of Europe, which is depressing the economy in this country as well. They want to ensure that they have jobs to go to next year. Last week, the Prime Minister surrendered an opportunity to do that; he surrendered his seat; and he surrendered to his Back Benchers. Is he not ashamed of himself?
The Prime Minister
And it all started so well! The hon. Gentleman is right to say that there is a crisis of jobs and opportunity across Europe, and a lot of that is linked to the chilling effect of the eurozone crisis. Some of that crisis needs to be resolved by better fiscal integration, and we can argue about whether that requires the treaty change being pushed for by France and Germany, but the real agenda—to help the eurozone and to help growth and jobs—is about competitiveness and the single market, and about ensuring that, even in the short term, there is the big bazooka, the re-capitalisation of the banks and the proper programme for Greece, which are all things that Britain has been pushing for.
Mr William Cash (Stone) (Con)
On the protection of the national interest, will my right hon. Friend gently remind the Deputy Prime Minister and the Leader of the Opposition that even Edward Heath’s 1970 White Paper confirmed that we have to maintain and use the veto in the national interest and to protect the fabric of the European Union—then the European Community—as a whole? To adapt William Pitt’s phrase, my right hon. Friend has exerted all his influence to ensure that Britain is protected. Does he take it that Europe will learn from his example?
The Prime Minister
I am grateful for my hon. Friend’s support. I agree that it is important that, when considering changing the institutions of the EU, there must be unanimity, and the veto is there for a purpose—if you feel that the national interests are not being protected. It is important that we maintain that in the EU.
Sir Stuart Bell (Middlesbrough) (Lab)
The Prime Minister talked of us being a trading nation, of investment in jobs and of the importance of the eurozone. Why, then, did he not help the Greeks in their bail-out? Why has he not supported the European financial stability facility? Why is he not helping the European stability mechanism? Building on the questions from the right hon. and learned Member for North East Fife (Sir Menzies Campbell) and my hon. Friend the Member for Rhondda (Chris Bryant), what specific measures can the Prime Minister announce today to help the euro, trade, investment and jobs?
The Prime Minister
I respect the hon. Gentleman, who has a long track record on these issues, but on the Greek bail-out I am afraid I just do not support him. Britain was not in the original Greek bail-out—rightly, I think—and we should not be in subsequent Greek bail-outs. Frankly, the last Government made a mistake in getting us into the euro bail-out mechanism. We have got out of that, but that does not mean that Britain is not a generous nation that wants to help its allies. We have lent £5 billion to Ireland, and our economies are very integrated. I think the Irish are doing some very difficult things to get their economy back on track, and we support them in the work they are doing.
Mr Speaker
Order. I appeal again for single, short supplementary questions.
Malcolm Bruce (Gordon) (LD)
Given that we are facing the worst financial crisis in living memory, does the Prime Minister agree with me that the UK coalition Government have a policy for dealing with it and that unfortunately the eurozone does not? What we now need, surely, is to work in parallel to ensure that we have outcomes that are not divergent, but deliver a strong pound and a strong euro.
The Prime Minister
I am very grateful for that question. Of course it is important to recognise in a coalition Government that both sides of that coalition cannot always achieve everything that they want to. However, it is important that we work together, and where we absolutely have agreed is on the importance of a programme of getting our economy back on track. It has been of huge benefit—and will continue to be of benefit to our country—that two parties have put their interests aside to work for the common good.
Tony Lloyd (Manchester Central) (Lab)
The thing that was obviously lacking last Friday was any reference to growth or any ambition to get growth in the European economy. Can the Prime Minister dispel the rumour that he offered no leadership on that by telling us what proposals he tabled on European growth?
The Prime Minister
I am afraid that that is completely wrong. Britain has been very consistent, tabling proposal after proposal for growth. It is a British proposal to complete the single market in energy, a British proposal to complete the single market in services and a British proposal, which has just been passed, to exempt all micro-businesses—those with fewer than 10 employees—from future European regulation. Britain has the most pro-growth, pro-enterprise, pro-single market Government, and that is the way it is going to stay.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
May I congratulate my right hon. Friend on sticking to a very simple principle of fairness in the European Union: that the institutions for the 27 are there for the 27? May I also remind him and those on the Opposition Benches—and, indeed, the BBC—that he has the support not only of the Conservative party but of the British people for what he has just done?
The Prime Minister
I am grateful for what my hon. Friend says. The absolute key to this issue about the institutions is actually what the new organisation does, rather than necessarily what the institutions do. The key is to protect the single market and those things that are vital for Britain. As I keep repeating, the fact is that an organisation outside the EU treaties is not allowed to cut across those treaties or the legislation under those treaties. It would be a greater danger to allow a treaty of 17 to go ahead within the EU, with all the additional powers, bureaucracy and everything else that involves, unless, of course, you can get the safeguards I was seeking.
Mr David Winnick (Walsall North) (Lab)
We have heard the Prime Minister give his account of the meeting. Can arrangements now be made urgently for the Deputy Prime Minister to explain to the House why he is very much opposed to what has occurred?
The Prime Minister
Let me be clear: the negotiating approach of the Government was agreed by the Government before I went to Brussels, because it was very important to set out and agree the safeguards that we believed were necessary—I also set them out to the House, by the way—and that was agreed. However, it is of course important to recognise that it is no surprise that Conservatives and Liberal Democrats have not always agreed about European integration. But, as I say, we have both put aside our interest to work in the national interest in having a Government who are able to clear up the mess that the hon. Gentleman’s party left.
Andrew Rosindell (Romford) (Con)
If there were ever any doubt before, may I tell the Prime Minister that there is none today in the minds of the British people that we are led by a Prime Minister with the courage to put our country’s interests first? I thank him for displaying the bulldog spirit in Brussels last week, but will he discuss the long-term future of Europe with members of the European economic area and Switzerland and Turkey, which have customs union with the European Union, to ensure that we are all working together?
The Prime Minister
I am grateful for my hon. Friend’s support but would repeat the point I made last Wednesday. Of course Britain has a key interest in being in the European Union. I do not believe that the sort of options that other countries have outside the European Union give them anything like the influence that we have, because it is not just the markets we need open; it is a say over the rules of those markets. That is what membership of the single market gives us in this country.
Mr Michael Meacher (Oldham West and Royton) (Lab)
Is it not utterly bizarre that the Prime Minister has marginalised this country and recklessly thrown away Britain’s international influence, from Washington to Beijing, solely to protect the City from regulation when it is urgently in need of some regulation? In any case, his veto cannot protect the banking sector from any future EU finance directives. Is he not therefore ashamed that never before has so much been thrown away for so little or, indeed, needlessly for almost nothing?
The Prime Minister
The right hon. Gentleman clearly wrote his questions before coming to the House and listening to my statement. As I set out in the statement, we were not seeking special protections for the City; we were seeking a level playing field. Indeed, in some ways, we were asking to be able to have more regulation here in the UK, not least because of the shambles of RBS. Let us be clear: the Financial Services Authority report today names only three politicians as culpable—Tony Blair, the former Prime Minister and the shadow Chancellor, who was the man partly responsible for this complete shambles that we now have to clear up.
Martin Horwood (Cheltenham) (LD)
This morning The New York Times questioned whether this country’s interests—or, indeed, the City’s interests—were not at greater risk, following this weekend’s events. Looking forward, what positive reassurance can the Prime Minister give to potential foreign investors that we will remain at the heart of European economic decision making?
The Prime Minister
International investors know that Britain has the advantage of being a member of the single market, but outside the eurozone and the euro. I would say to the hon. Gentleman that the greatest risk for Britain would be to go into a treaty, including a new treaty of the 17 at the EU level, that did not safeguard our interests. Of course I would rather that our protocol had been accepted and that those protections and safeguards had been put in place; they were not, so the greater danger would have been to go ahead with a treaty without those safeguards.
Mr Ben Bradshaw (Exeter) (Lab)
Given that Britain has, or perhaps had, many natural friends and allies in the rest of Europe, why does the Prime Minister think he failed to persuade a single one of them of his case?
The Prime Minister
There is great understanding of Britain’s interests in the European Union and great support for our backing of the single market, particularly among countries like Holland, Sweden and Germany and the Baltic states. We have just achieved a breakthrough deal—something the right hon. Gentleman never achieved in all his years in government—of a freeze in the EU budget. Britain did that by having allies and supporters in the EU who backed our move.
Andrea Leadsom (South Northamptonshire) (Con)
Does the Prime Minister share my concern that Opposition Members just do not get it? They talk about the need to create jobs in Britain, yet they criticise him for looking after Britain’s financial services that provide 11% of our tax base and 2 million jobs in this country and are our biggest net export. When are the Opposition going to understand that my right hon. Friend was standing up for British interests?
The Prime Minister
My hon. Friend makes a good point—that the financial services go way beyond the City of London. As I said in my statement, 100,000 people are employed in the financial services in Birmingham, and the sector makes up 7% of UK employment; it is responsible for £1 of every £9 collected in tax, and 3% of our trade surplus. It is a hugely important industry. There would be a threat if there were a treaty of the 17 in the EU without the proper safeguards; that is why I vetoed that approach.
Mr Dennis Skinner (Bolsover) (Lab)
Is this not the same Prime Minister who month after month has been castigating working people for not staying at meetings to deal with pensions? He has walked out, without using his veto; he has walked out, without getting a rebate like Mrs Thatcher; and he has walked out without a couple of opt-outs like Major. As Del Boy would say, what a plonker!
The Prime Minister
I can absolutely assure the hon. Gentleman that I did not at any stage walk out of the meeting. What I did was to press Britain’s interests as a British Prime Minister should.
Dr Julian Lewis (New Forest East) (Con)
Now that the Prime Minister has cast his vote on Europe so effectively in Brussels, does he think there is any chance that the British people might one day have an opportunity to do something similar over here?
The Prime Minister
I wondered how long we would take to reach that issue. I believe that this is the most important use of a referendum: if there is a proposal for this House of Commons, or any Government, to pass powers from this House to somewhere else, we should ask the British people first. That, for me, in a parliamentary democracy, is the right use of a referendum. However, as we are not signing a treaty, I think that the whole issue of a referendum does not arise.
Mike Gapes (Ilford South) (Lab/Co-op)
Does the Prime Minister believe that if Baroness Thatcher and John Major had followed his negotiating tactics, we would have had the Single European Act or the opt-outs on Maastricht that John Major negotiated with Chancellor Kohl?
The Prime Minister
The point about the Single European Act is that it was in Britain’s interest, which is why Margaret Thatcher signed it. The Maastricht treaty was only in Britain’s interest if we could get an opt-out from the single European currency, and that is what John Major achieved. I could not get a treaty with safeguards, so I was right to say no.
Mark Pritchard (The Wrekin) (Con)
I congratulate the Prime Minister on his leadership on this issue and on putting the British national interest first, unlike the Labour party when it was in power for 13 years. Has he seen the results of an opinion poll today, which show huge support in the country for his actions, unanimous support among Conservative Members, and, most revealingly and interestingly, the support of 49% of Liberal Democrat voters?
The Prime Minister
I am grateful to my hon. Friend for his support. The key issue for me was not whether this would be popular today, tomorrow or next week, but what was the right thing for Britain, and I judged that a treaty without safeguards was not right for Britain. [Interruption.] For all the interruptions from Opposition Members, I think that until they answer the question “Would you sign this treaty?”, a little bit of silence is needed.
Caroline Lucas (Brighton, Pavilion) (Green)
Given that it was precisely the City of London’s deregulated recklessness that did so much to exacerbate the impact of the financial crisis in this country, can the Prime Minister tell us why he persists in behaving as if the interests of the City were synonymous with the national interest, which they clearly are not?
The Prime Minister
I am not sure that the hon. Lady was listening, but the point is that there are some ways in which we actually want to regulate banks and financial institutions more, but are not able to because of the European Union rules. Some of the other issues that I was considering were specifically about discrimination: it is quite wrong that we, as a member of the single market, are not able to deal in euros in the same way as we are able to deal in dollars and yen.
This was a very straightforward set of undertakings, and it was not about special protection for the City. I hope that I got that across in my statement, and I hope that the hon. Lady will support us when we reach those regulations.
Nadine Dorries (Mid Bedfordshire) (Con)
Over the weekend it was impossible to meet a resident of Mid Bedfordshire who was not full of praise and admiration for what the Prime Minister had done in Brussels, but does he share my concern about the fact that the most cowardly and negative attacks over the weekend came not from the Labour party—which is incapable of opposition—but, unfortunately, from the Liberal Democrats? That cowardice is surpassed only by the absence of the Deputy Prime Minister from the Chamber today.
The Prime Minister
I am afraid that I do not agree with my hon. Friend, grateful though I am for her support. We have to recognise that we are in a coalition, and that parties in a coalition cannot achieve all the things that they want to achieve. I think that we must praise each other in the coalition when we make sacrifices on behalf of the country.
The Liberal Democrats did agree to the negotiating strategy that we pursued. I can be very clear: I came to the House, I said what I was going to do, and I then did what I had said I was going to do, because I could not achieve the safeguards that I wanted. That was a very straightforward way in which to act, and, I hope, one that every Member on this side of the House can support.
Mr Frank Field (Birkenhead) (Lab)
At what stage of the negotiations did the Prime Minister realise that France and Germany would do their best for us not to sign? As this is a period of Christmas cheer, can he give us an undiplomatic reply?
The Prime Minister
My right hon. Friend—[Interruption.] Well, we often agree. It was obviously a developing situation, but I had a meeting with Angela Merkel and Nicolas Sarkozy before the Council began. I had been to see the German Chancellor three weeks before the Council, I had been to see the French President a week before the Council, and I think that there was a good prospect of making an agreement. Conversations were also held with a huge number of Finance Ministers and other Government leaders. Clearly the 27 would rather have a deal at 27. They see the problems and difficulties of what they are proposing, but in the end they were not willing to give the safeguards—rational, moderate, reasonable and sensible though they were—and, as a result, I think I did the right thing.
Jacob Rees-Mogg (North East Somerset) (Con)
I am sure that the Prime Minister will want to know that the toast of the people in Somerset was to the pilot who weathered the storm, because he has stood up for democracy, he has stood up for free trade and he has stood up for free markets, and this is to be wonderfully commended.
The Prime Minister
I thank my hon. Friend for his such full-voiced support.
Natascha Engel (North East Derbyshire) (Lab)
The Prime Minister said that he went to Europe seeking a treaty change and, had he got that treaty change, he would have had to have held a referendum. If that is the case, can he confirm that success in his eyes would have been a referendum? If so, why does he not hold one?
The Prime Minister
With huge respect to the hon. Lady, I think that she is wrong on both counts. I did not go to Brussels seeking a treaty change; the point was that if a treaty change was put forward, there needed to be safeguards for Britain. That is the first point. The second point is that I did not go thinking that a treaty change would necessarily lead to a referendum, because I was not willing to sign up to a treaty change that passed power from Britain to Brussels, so I am afraid that both parts of her question are inaccurate. I also did not go to Brussels with an impossibly long list of demands because of pressure or anything else; I went to Brussels with a set of proposals that were modest, reasonable and relevant.
Nicholas Soames (Mid Sussex) (Con)
Will my right hon. Friend reassure successful, outward-looking businesses in Mid Sussex, some of which are understandably anxious about the consequences of what may flow from this weekend, that what the United Kingdom seeks is an adaptable, flexible and competitive EU, and that we will continue to play a full and creative role in Europe, as well as fortifying our important, substantial bilateral relations elsewhere?
The Prime Minister
I agree wholeheartedly with what my right hon. Friend says and I will reassure those businesses. The absolutely key thing is that the single market, which is fully protected by the European Commission, the European Court of Justice and all the institutions of the EU, is unchanged. We have full membership of those treaties and of that organisation, and because the other EU members are going for a treaty outside the EU, that protection will remain. I would say to those businesses that not only do we maintain the single market, but we will keep up the pressure for something else they need, which is a more fundamental solution to the crisis affecting the eurozone.
Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)
The UK is 90,000 square miles in area, but the Prime Minister seems to think that only one square mile is of any importance. May I put it to him that his colleague—the self-styled “pragmatic revolutionary”—the Deputy Prime Minister was heavily supportive of the Prime Minister on Thursday and Friday, but was yesterday condemning him? Does the Prime Minister have any idea what he is thinking now?
The Prime Minister
On the issue of financial services, this is not about just one square mile of the United Kingdom. I think of people working in the financial services industry in Cardiff, and I think of banks, building societies and insurance businesses right across Wales. They need to know that there is fair regulation within the EU and they want those safeguards too. It is not just about those industries on their own; it is about the support they give to the other industries as well.
Conor Burns (Bournemouth West) (Con)
May I add my words of support for the Prime Minister, who at the weekend kept faith with this House and, more importantly, with the country? Can he confirm that, as the Foreign Secretary said yesterday, the existing treaties of the European Union belong to all 27 member states and that there can be no question of the eurozone countries having recourse to the institutions, mechanisms and procedures of those treaties?
The Prime Minister
I think what my hon. Friend says is important. The treaties belong equally to those who are in the euro and those who are out of the euro. The key thing is that if there are going to be further changes to those treaties—if you are going to allow the eurozone members to do something within the architecture of the European Union—it is important to get safeguards for those countries that are not in the euro, not going to join the euro, want to safeguard the single market and recognise that there is a potential threat to financial services. That is what we were about in Brussels and that is what matters.
Mr Speaker
Order. Once again, I appeal to Members to help each other by being brief.
Keith Vaz (Leicester East) (Lab)
Given the current economic crisis in Europe, does the Prime Minister believe that the Europe 2020 strategy still has a future as a successor to the Lisbon benchmarks, and is he confident that we will achieve those shared goals?
The Prime Minister
The short answer is that the 2020 strategy needs to have a future and we must encourage European Union countries to spend more time focusing on what really drives growth, which is completing the single market, rather than some of these initiatives on medium-term fiscal austerity and big transfers of sovereignty. I know that they are important—and particularly important for some in the EU—but real growth will be driven through the single market.
Steve Brine (Winchester) (Con)
May I remind the Prime Minister that we on these Benches and the vast majority of the British people support what he did last week and are very glad that it was this party leader and this party leader alone who was speaking up for Britain at this summit? Does he agree with one of his predecessors? She said:
“Europe is strongest when it grows through willing co-operation and practical measures, not compulsion or bureaucratic dreams.”—[Official Report, 22 November 1990; Vol. 181, c. 451.]
The Prime Minister
I am very grateful for my hon. Friend’s support. The point I made in my statement about Europe being a network, not a bloc, is completely consistent with that. We should not be shy about its developing as a network, with some networks we want to be in and others we do not.
Frank Dobson (Holborn and St Pancras) (Lab)
Will the Prime Minister confirm that British banks and finance houses hold about £75 billion of bonds issued by eurozone Governments and that in the event of a default, with nobody representing Britain, he will still be expected to get the British taxpayer to bail some of them out?
The Prime Minister
The exposure of the British banks to European countries is published by the Bank of England—quite right, too—and obviously we want to avoid a collapse of the eurozone and to ensure that it takes the necessary steps to prevent that from happening. This Government will obviously always do whatever is necessary to safeguard our financial system and the economy.
Jo Swinson (East Dunbartonshire) (LD)
Against the odds, an excellent deal on climate change was agreed in Durban this weekend, with the UK playing a leading role alongside our EU counterparts. Would the Prime Minister reflect on whether such constructive and positive diplomacy might be a better approach to securing British interests than rushing for the exit?
The Prime Minister
I certainly agree that the Durban outcome is worth while and it is a staging post towards another global deal, which is very worth while. I am afraid I do not see any contradiction between being incredibly positive and constructive and having a bottom line. When you have a bottom line, it is quite important that you stick to it.
Hugh Bayley (York Central) (Lab)
Over the years to come, as a result of the Prime Minister’s decisions, economic and financial power will inevitably drain away from London to Frankfurt. How is that in the interests of British manufacturing or British financial services?
The Prime Minister
This is exactly the argument that was made about the euro. I remember it very well. People said that if we did not join the euro, Frankfurt would be the major financial centre of Europe and not Britain. Frankly, it was scaremongering then and is scaremongering now—from the same people.
Mr David Evennett (Bexleyheath and Crayford) (Con)
I welcome the Prime Minister’s statement and his standing up for British interests, which I am sure will be widely supported across the whole country. Does my right hon. Friend remember the words of the former Prime Minister, Tony Blair, after a confrontation with Europe, when he said:
“If we are isolated and we are in the right, then that’s the correct position”
to be in? Would he not agree?
Malcolm Wicks (Croydon North) (Lab)
Is this the first case in recorded history of a proud premiership team relegating itself to a second division, cheered on by the new English Tea party?
The Prime Minister
Again, this is the same argument that we had at the time of the debate about whether Britain should join the euro and it is largely the same people making it. They were in favour of it and felt that not joining the euro meant relegating oneself to the second division. Frankly, I am glad that Britain is out of the euro. We are able to set our own interest rates and make our own decisions for the benefit of our economy here in Britain and we are better off because of it. It is the same arguments from the same people; they were wrong then and they are wrong now.
Philip Davies (Shipley) (Con)
The Prime Minister should be in no doubt that he did the right thing last week. Will he confirm that he will not make any further policy concessions to the lickspittle Eurofanatics on the Lib Dem Benches as a result of doing the right thing for Britain last week?
The Prime Minister
I am always grateful for my hon. Friend’s support but he tends to take it just a little too far. The coalition is right for Britain and I want it to go on working for the good of Britain. We have to recognise that that sometimes means we cannot get the things we want.
Clive Efford (Eltham) (Lab)
Will the Prime Minister explain specifically what safeguards are in place today for the City of London and British interests that were not in place last week?
The Prime Minister
Clearly, if we had been able to achieve the protocol on financial services there would have been greater safeguards, but the safeguard we do have is that we are not signing up to a treaty that could have put that industry in danger.
Henry Smith (Crawley) (Con)
I congratulate my right hon. Friend on his bold and courageous stance in the early hours of the morning last Friday and I should like to pass on the thanks that many of my constituents have expressed to me over the weekend. Will he confirm that of the nations at the European Council that did sign up to an agreement, the Parliaments of Bulgaria, Poland, Denmark, Sweden, Latvia, Lithuania and others such as Hungary still need to approve and ratify it?
The Prime Minister
My hon. Friend makes a very good point. We do not yet know exactly how the new organisation and treaty will develop or how many countries will sign up to it. There will then be a huge process involving very detailed scrutiny by and punishment from the European Commission if Governments draw up inappropriate budgets or have a structural deficit of greater than 0.5%. Labour left us a structural deficit of—what was it?—7% or 8%? There are big processes to go through before the treaty is either finalised in March or implemented, for which it will again have to be put to Parliaments and, possibly, even to referendums as well. There are many hoops to go through.
Austin Mitchell (Great Grimsby) (Lab)
I am not going to criticise the Prime Minister for using his veto because that job can safely be left to his Liberal Democrat colleagues who are hawking their consciences around the media. Surely, however, he would have done better to use the big bazooka later when the undemocratic and deflationary consequences of this Merkozy diktat became clear, because at that stage he would have had lots of allies, which he should have had now and used now.
The Prime Minister
The hon. Gentleman makes an interesting argument. There are big questions to answer for the countries that are signing this. I think you have to have that sort of fiscal co-ordination with a single currency—he and I probably agree that that is one of many reasons why we should not join a single currency. My job at that European Council was to stand up for Britain’s interests and that is what I did.
Mr David Nuttall (Bury North) (Con)
I welcome the stance taken by the Prime Minister. Given that the other members of the European Union refused to agree even to the very modest proposals that he put forward, what chance is there of their ever agreeing to allow this country to regain control over such matters as those covered by, for example, the working time directive?
The Prime Minister
I am grateful for my hon. Friend’s question, but I am not as pessimistic as he is that there is no prospect of rebalancing powers within the European Union. There are possibilities and opportunities. We did that in terms of the bail-out fund and I think there will be opportunities in future.
Stewart Hosie (Dundee East) (SNP)
The concordat on the co-ordination of European Union policy is very clear—it requires the UK Government to engage with the devolved Governments in the formulation of UK policy, but that clearly did not happen on this occasion. How will the Prime Minister now explain to Cardiff, Belfast and Edinburgh that adopting an isolationist policy and abdicating all leadership is anything other than damaging and dangerous?
The Prime Minister
I do not accept that. In the final analysis, our relations with the European Union are a reserved issue for the UK Parliament and the UK Government. To be fair to this Government, we have gone further than any previous Government on the issues that really matter to people in Scotland—about the single market, fisheries and decisions taken within the European Union—to work very constructively with the other Administrations.
Elizabeth Truss (South West Norfolk) (Con)
Does the Prime Minister agree that Britain’s influence in the world is dependent on our economic strength, our productivity and our competitiveness, and that we should not trade away these valuable assets?
The Prime Minister
My hon. Friend makes an important point. Every country in Europe is challenged at present in relation to its economy, and it is very important to make sure that we are safeguarding Britain’s interest, staying in the single market, seeking extra safeguards for finance and other industry, and making sure we can grow out of this crisis.
Kate Hoey (Vauxhall) (Lab)
The Prime Minister must know that right across the UK, the majority of the public and—dare I say it on the Opposition Benches?—the majority of Labour voters support what the Prime Minister has done. He knows that that is the reality. Does he agree that instead of seeing ourselves isolated in Europe, what the public want to see now is our looking to be much more internationalist and less little Europeanist?
The Prime Minister
I have great sympathy with what the hon. Lady says. What it requires is both action within Europe on issues that matter to us, such as the single market, and a recognition that we should be refreshing and restoring our links with other parts of the world, whether it is the Gulf, the Commonwealth or the fast-growing countries of south-east Asia. This Government are committed to doing all those things.
Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)
In Aberdeen in the north-east of Scotland and in Norway, there is considerable concern that the draft regulations on offshore drilling for oil and gas threaten the gold safety standard achieved in the North sea. Will what happened last week make it easier or more difficult to get the qualified minority necessary to make sure that those regulations are withdrawn and a directive is used as a means of implementing them?
The Prime Minister
I do not think what happened last week will have any impact on that decision because these issues are dealt with properly in the single market, and an organisation set up outside the EU cannot cut across existing treaties or existing legislation. We should work very hard to make sure we get a good deal for the North sea.
Kelvin Hopkins (Luton North) (Lab)
The great former Labour politicians Peter Shore and Bryan Gould both said that the single currency would fail, and they have been proved absolutely right. Does the Prime Minister accept that the choice is between a controlled deconstruction of the euro or an uncontrolled crash, and will he make this point to his European colleagues?
The Prime Minister
What I would say to the hon. Gentleman is that “I told you so” is not an economic policy. I have every sympathy with what he says. I have never supported Britain joining the euro because a single currency implies a single economic policy and a single fiscal policy, and trying to run those things across different democracies is so incredibly difficult. That is what they are struggling with, but if I am asked what is Britain’s interest today, I would say that it is for the eurozone to sort out its problems. A break-up of the eurozone would have very severe consequences for banks across Europe and also for banks here in Britain, and could trigger some very, very difficult economic times. In spite of what the hon. Gentleman says, we should be working constructively to encourage eurozone countries to do what is necessary, particularly in the short term, to stabilise a difficult situation.
Andrew Selous (South West Bedfordshire) (Con)
May I warmly congratulate the Prime Minister on standing up for British interests last week and on refusing to take the approach of Labour, who signed away £7 billion of British rebate for nothing in return?
The Prime Minister
I thank my hon. Friend for his support. What we do not know is what the Opposition’s approach is to this issue. Despite all the fury we have heard from those on the Opposition Benches, they cannot tell us whether they support the treaty proposal or not.
Stephen Timms (East Ham) (Lab)
Britain will continue to be subject to EU single market financial services regulation. Do we not now have a major problem in that we will be absent when many of those rules are drawn up?
The Prime Minister
That is absolutely not the case because this new organisation cannot draw up or pass proposals that cut across EU treaties or EU legislation. The right hon. Gentleman knows this well. It is the case that Britain has suffered from some of the regulation that has come out of Brussels on financial services, and that we need greater safeguards. If we cannot get those safeguards within a treaty, it is better that those countries are in a separate treaty. That is a better safeguard than the alternative, and that is the point that he needs to understand.
Gavin Barwell (Croydon Central) (Con)
The Leader of the Opposition’s argument that one should never leave an empty seat at the table is surely a criticism of the previous Government’s failure to join the euro. [Hon. Members: “What?”] There has been an empty seat at the table ever since we did not join the euro. Does my right hon. Friend agree that somebody who is never prepared to disagree with our European friends, even when that is in British interests, is not fit to hold the office of Prime Minister?
The Prime Minister
I am grateful for my hon. Friend’s support. His point about the creation of the euro being the fundamental moment that created these tensions in Europe is entirely right. The previous Government’s position was that they wanted to get us into the euro, but they realised that that was not possible. I think that that is still their policy. It was the creation of the euro that fundamentally changed the relationship in Europe, but even they decided that it was okay for eurozone countries to meet on their own. That is not being isolated; it is recognising the reality that Britain does not want to be in the euro, so we cannot stop the meeting going ahead.
Mr Kevin Barron (Rother Valley) (Lab)
Given that last Thursday was not about joining the euro but about protecting the interests of the euro as a currency and, therefore, the interests of our national economy, as the Prime Minister has said this afternoon and on several occasions over the past few weeks, why has he walked away from such a responsible position and allowed our economy potentially to be attacked if there is no success in looking after the interests of the euro? We did it with Ireland, and rightly so, so why are we not looking at taking action more widely to protect the interests of this country?
The Prime Minister
What we did with Ireland, as a very close neighbour, long-standing friend and integrated economy, was give it a bilateral loan, which was the right thing to do. I do not accept that the proposal put forward on Thursday night and Friday morning is the most important part of delivering a successful euro. We need to spend more time on the single market, on competitiveness and on short-term measures to stabilise the eurozone. I simple do not believe that whether a treaty is within or without the EU will make a huge difference to the future of the euro.
Mr Speaker
Order. Short, single-sentence questions and the Prime Minister’s characteristically pithy replies would enable me to get in all Members who are still standing. I ask them to help me to help them.
Mr Peter Bone (Wellingborough) (Con)
I have received an important message to pass on to the Prime Minister: “The efforts of the Prime Minister on Thursday night gave me great pleasure. Yours ever, Mrs Bone.”
Mr Wayne David (Caerphilly) (Lab)
Is it correct that the Deputy Prime Minister said that he is not here because he does not want to be a distraction?
The Prime Minister
The point is that the Deputy Prime Minister and I agreed the negotiating strategy for the European Council, and that is important because it was the whole Government who were doing it at the Council.
Greg Mulholland (Leeds North West) (LD)
The Prime Minister was negotiating as the Prime Minister of the coalition Government. Does he agree that now is not the time to listen to either those who say that we should leave the EU, or those who say that we should push into political and fiscal union, and can he tell the British people that he will stick to the coalition policies and get the economy back on its feet?
The Prime Minister
I am grateful to the hon. Gentleman and absolutely confirm that that is the case. The coalition is united in wanting to have growth policies across Europe and in promoting the single market in a very active way, and I can guarantee that we will continue to do that.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
The Prime Minister had the opportunity to visit Feltham and Heston last week and arrived late at the European summit. How many leaders of the 26 other EU member states did he speak with in the fortnight before the summit?
The Prime Minister
First, I went to Feltham and Heston because I do not believe in the normal chicken theory that Prime Ministers should stay away from by-elections, so I am proud to have gone. I spoke to a wide audience of DHL employees who live in the constituency and encouraged them to vote Conservative before Christmas. After that, I popped in to see my son’s nativity play, which was also a rare joy. I got to the European Council some time before it started and met the Italian Prime Minister, the French President and the German Prime Minister. In addition, I had had a series of telephone calls with the Dutch Prime Minister, the Swedish Prime Minister and many others besides. I am sure that the hon. Lady understands—it is called multi-tasking.
Geoffrey Clifton-Brown (The Cotswolds) (Con)
My right hon. Friend had no option but to use his veto, if British interests were to be protected. Does he agree that the euro sovereign debt crisis is still the most important threat to us all and that that is what our eurozone partners ought to be concentrating on, rather than unwanted treaty changes?
The Prime Minister
My hon. Friend makes a very good point. I quite understand why particularly the Germans want this fiscal union and want tougher rules because they do not want to see irresponsible behaviour repeat itself. One can debate whether that actually requires change in the treaty or not, but we have to spend more time on the other parts of solving the crisis, which are to do with short-term changes and longer-term competitiveness.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
The Prime Minister is aware that this situation represents one of the most fundamental changes in our national politics and in European politics. Will he assure the House that in all his future negotiations he will be mindful to look after not just financial services but the manufacturing sector and other service industries that do not have a part to play in the City of London?
The Prime Minister
I completely agree with the hon. Gentleman. I do not see financial services on their own, because they obviously have a role in supporting the rest of the economy. The key in terms of Europe for the rest of the economy is the single market, and that is what we are determined to safeguard.
Chris Heaton-Harris (Daventry) (Con)
The UK wields its influence in the EU in many different ways, and our net contribution to the EU in 2010-11 was £9.2 billion. We are the second largest net contributor, so perhaps we could become a little more like the unions with Labour and demand a little more influence for our money.
The Prime Minister
My hon. Friend makes a good point, which is that we are a major player in the European Union, not least because we are the second largest net contributor, which gives us a huge amount of influence. We have safeguarded the European Union and its treaties—not allowing them to be changed if we were not able to get the safeguards that we needed.
Chris Ruane (Vale of Clwyd) (Lab)
Does the Prime Minister know the whereabouts of the Deputy Prime Minister; and will their tiff lead to separation and divorce?
David Rutley (Macclesfield) (Con)
I should like to pass on the hugs, best wishes and kisses from people in Macclesfield, who are very grateful for the stance that the Prime Minister took last week. Under the previous Government, from 2005 the burden of EU regulation cost British businesses billions of pounds each year. What steps is my right hon. Friend taking to reduce, rather than increase, the burden of EU regulation?
The Prime Minister
I am grateful for that question. We are working extremely hard, particularly in the area of the single market, to encourage the Commission, which is now looking at reducing the burden of the regulation that it passes and, specifically, the burden of regulation on businesses that employ fewer than 10 people. We have for the first time secured the idea of a moratorium: there will not be more regulations on them in the coming years.
Pat Glass (North West Durham) (Lab)
May I remind the Prime Minister that it is the jobs of not just the banks and the City of London which matter here? Millions of jobs throughout the country and in constituencies such as mine rely directly on the EU and on Britain being at the centre of the EU. Now that we are no longer at the table, who is going to stand up for those jobs?
The Prime Minister
I say to the hon. Lady, first, that the RBS report reminds us of the terrible effect on the rest of the economy when the banking system goes wrong because it is not regulated properly, so there is a very important connection. Secondly, other businesses require us to safeguard the single market, and that is exactly what I did.
Mike Weatherley (Hove) (Con)
Given that we are the second largest contributor to Europe, does the Prime Minister agree that without our contribution Europe would fail?
The Prime Minister
It does mean that we have a huge amount of influence in the EU, and that we do drive, particularly in the area of single-market policies. My hon. Friend makes the point that we have to ensure that we get value for money, however, and that is why I am so keen that we manage to achieve a freeze in the EU budget this year.
Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)
There is great concern throughout the business community about the implications of the Prime Minister’s walk-out from the European summit. Will he reassure the House that the uncertainty caused by that decision will not impact upon real jobs in the real economy of the United Kingdom?
The Prime Minister
I can certainly give the hon. Gentleman that assurance, because we can say to international investors, to businesses looking at Britain, “You have all the advantages of the single market—access to Europe’s markets—but we are not in the eurozone. Of course, we are affected by what happens in the eurozone, but our interests are just over 2%, whereas countries in the eurozone with budget deficits like ours have interest rates more like 5%, 6%, 7%.”
Margot James (Stourbridge) (Con)
Is my right hon. Friend aware of the words this morning of Chancellor Merkel’s spokesperson on last week’s vote? He said that
“this changes absolutely nothing of the fact that Britain is one of our closest partners and one of our most important allies and friends… We want to make the single market a joint success, and that is something for which we have Britain on our side… Britain thus remains a very important partner for Germany.”
Does my right hon. Friend not share my surprise that, if the German Chancellor can accept that it is perfectly possible to stand up for one’s national interest and be a good European, that fact should elude the Opposition?
The Prime Minister
My hon. Friend makes a very good point. That leads to something else, which is that the countries that are like-minded on single-market issues—Holland, Germany, Sweden, the Baltic states—want Britain to be there when we are discussing single-market issues. That is another reason I do not believe that this separate treaty and separate organisation will cut across the single market.
Kevin Brennan (Cardiff West) (Lab)
For the sake of clarity, can the Prime Minister tell the House where the Deputy Prime Minister is and why he is not here for this extremely important statement?
The Prime Minister
The Deputy Prime Minister agreed to the negotiating strategy. I am not responsible for his whereabouts, but I am sure he is working extremely hard.
Mr John Baron (Basildon and Billericay) (Con)
The Prime Minister’s veto has rightly struck a chord with the nation. May I suggest that instead of this being the end of the affair, it should be the start of a process to recalibrate our relationship with the EU based on free trade and growth and not on political union and regulation, which has cost this country so much?
The Prime Minister
I am grateful for my hon. Friend’s support. Our position is that we want to get the best out of Europe for Britain. That means a focus, yes, on the single market, but it is not purely about a focus on trade—it is about recognising that that market is not just open for our goods but that we have a say in setting the rules. That is absolutely key to our national interest.
Paul Blomfield (Sheffield Central) (Lab)
What will the Prime Minister say to those leaders of the manufacturing sector who believe that his actions have deeply undermined their interests? They include Ian Rodgers, the director of UK Steel, who said today that
“we are going to become less relevant in political decision-making”.
The Prime Minister
I do not agree with that. A lot of these arguments were made when Britain did not join the euro. A number of organisations, media outlets and, indeed, political parties and political leaders said, “If you stay out of the euro, you’ll marginalise Britain and it’ll be bad for our economy.” That was not the case. They were wrong then, and I think they are wrong now.
Dan Byles (North Warwickshire) (Con)
Most post-treaty analysis has focused on the use of the veto, but can the Prime Minister confirm that the detail of the fiscal union proposed by the rest of the European Union would, quite remarkably, render the Opposition party’s entire economic policy illegal?
The Prime Minister
That is a very good point. We know that the leader of the Labour party is committed to joining the euro, if he is Prime Minister for long enough. At the same time, if he supported this treaty—but frankly we have not heard today whether he is for it or against it—and joined this treaty he would make his own policy illegal and he would be fined by the European Commission for the policies that the shadow Chancellor, who I see is now not here either, has signed him up to.
Mr Speaker
Order. The House will want, without exception, I hope, to hear Mr Graham Stringer.
Graham Stringer
Thank you, Mr Speaker.
Europe would not be in the economic and political mess that it is in now if we had not had to wait nearly 40 years before a British Prime Minister came back and said that he or she had used the veto. Can the Prime Minister tell us how, and when, he is going to repatriate some of the powers that have been so carelessly given away?
The Prime Minister
I am grateful for the hon. Gentleman’s support. As I said, we have brought back the bail-out power. We have prevented Britain from joining this treaty without the safeguards. I believe there will be opportunities in the future. There are areas, particularly in terms of costly regulation, where Britain has paid a high price for European regulation, and we should use future opportunities to act on that.
Bob Russell (Colchester) (LD)
I bring some grandfatherly advice to the proceedings. I urge the Prime Minister to let the dust settle, keep calm and carry on carefully, but please to abandon the Carlos Tevez approach to Europe. Bridges need to be built, and the first bridge the Prime Minister can build is to get Tory MEPs to rejoin the group of mainstream European conservatives.
The Prime Minister
I am very grateful for the grandfatherly advice. I remember the advice that the hon. Gentleman used to give me when we both cycled in to the House of Commons many years ago, so I will take it carefully on board. I will also take away the Carlos Tevez reference and give it a bit of thought.
Karl Turner (Kingston upon Hull East) (Lab)
It is becoming increasingly obvious to everyone that the Lib Dem partners in this coalition are completely pointless. As the Prime Minister does not know the whereabouts of his deputy, will he assure the House and Mrs Clegg that he will send out a search party to look for him?
The Prime Minister
Did the hon. Gentleman really wait one hour and 34 minutes for that? I am keen to hold on to the rebate and I think that his constituents might want a rebate as well.
Mr Sam Gyimah (East Surrey) (Con)
We are hearing from outside the House an answer that the Leader of the Opposition would not give on whether he would have signed the treaty last Thursday. His aides are saying that he would not have signed it. Will the Prime Minister press him further to give us an answer on whether he would have signed the treaty?
The Prime Minister
I am very grateful to my hon. Friend for looking at Twitter or whatever else it is that the Leader of the Opposition now uses. I gather that it is possible for the Leader of the Opposition to come back on that. Perhaps he can confirm whether he would have signed the treaty. I am happy to give him a few more minutes if we get a bit of clarity.
Mr Speaker
I think that the sensible approach, in conformity with convention, is to stick to questions to and answers from the Prime Minister in this Chamber.
Bill Esterson (Sefton Central) (Lab)
In the words of one business leader today,
“Margaret Thatcher was a constant thorn in the side of European leaders, but she never vacated the negotiating table; I am anxious by the implications of what the prime minister has done.”
When will the Prime Minister give business in this country the reassurance that it needs about the impact that his walking away will have on jobs and the economy?
The Prime Minister
I think that business does understand that we must be in the European Union for trade, growth and jobs, and that our membership of the single market is key. However, there is a lot of damaging regulation coming from Brussels and we need to stand up to that. When new treaties are suggested that involve huge fiscal changes and other changes in the European Union, it is right that Britain should seek safeguards. I am not hearing the same message from business that the hon. Gentleman is hearing.
Karen Bradley (Staffordshire Moorlands) (Con)
We have heard much this afternoon about the number of people who are employed in financial services. More than 2,000 of those jobs are located in my constituency. Can the Prime Minister reassure those employees that the action that he took last week was in their interests and that it will safeguard their jobs and not put them at unnecessary risk?
The Prime Minister
I can certainly do that. My hon. Friend makes the important point that this is an industry that is based around the country and not just in London. However, the protections of the single market go far beyond the financial services industry.
Nia Griffith (Llanelli) (Lab)
The Prime Minister has likened his experience of EU negotiations to playing chess against 26 different people. Will he therefore tell us what attempts he has made to build alliances with countries that have similar views to the UK, which could have played with him rather than against him?
The Prime Minister
Year after year, Ministers have had to stand at this Dispatch Box and apologise as the EU budget has gone up by 3%, 4%, 5% or more, because it is decided by qualified majority voting. I put together a qualified majority bloc so that we could get a real-terms freeze in the budget. There was help from Germany, France, Sweden and Holland. That is exactly the sort of constructive role that we play.
Mrs Anne Main (St Albans) (Con)
I am pleased that we have a Chancellor who understands that we need to take tight control of the fiscal reins of this country and that we have a Prime Minister who understands the difficult questions that need to be asked. I am surprised that we have a Leader of the Opposition who does not understand any of that and who cannot make his mind up. May I ask, with all humility, when the great British public will have the chance to have a say on Europe?
The Prime Minister
I am grateful to my hon. Friend for her support. I have given my answer on a referendum. I think that there is a role for referendums in a parliamentary democracy, but that comes at the moment when a Government or a Parliament proposes to give up power, rather than at other times.
Mr Ronnie Campbell (Blyth Valley) (Lab)
How many countries outside the European Union have free trade agreements with it?
The Prime Minister
There is a growing number, with countries such as Mexico, and now we have the Korea free trade agreement. I am very keen to try to finalise the Japan free trade agreement. Huge effort should be made to have such treaties, because they are good for both sides.
Alun Cairns (Vale of Glamorgan) (Con)
May I pay tribute to the Prime Minister for his practical approach to the negotiations last week? May I also say that his practical, obvious negotiating style now seems to be supported by the Leader of the Opposition, whose aides are briefing the press that he would not have signed the agreement, in the same way that the Prime Minister did not?
The Prime Minister
Ah. Either the Leader of the Opposition has no control over his aides, who are randomly briefing the press about his position, or he failed to tell the House, in his minutes and minutes of speaking, that he would not have signed the treaty. If he would have signed it, he can say I made the wrong decision, but if he would not, he will have to accept that I made the right decision. He either has to have the courage of his convictions or give an answer.
Jonathan Ashworth (Leicester South) (Lab)
Will the Prime Minister confirm that his veto does nothing to strengthen financial services in the way that he would want? Now that he has adopted a position of isolation, does he think he is more or less likely to win those safeguards in the future?
The Prime Minister
The key safeguard that we did get was against a treaty without proper protections and safeguards for the single market. It was in Britain’s interest to do that, and that is what the hon. Gentleman needs to understand.
Simon Hughes (Bermondsey and Old Southwark) (LD)
After last week’s isolation, can the Prime Minister confirm that he still agrees fully with the words of the coalition agreement that
“Britain should play a leading role”
and be
“a positive participant in the European Union”,
and that in that way we will help solve the economic crisis and bring growth and jobs to the United Kingdom?
The Prime Minister
I completely agree with that. We are members of the European Union, and that membership has not changed; nor have the treaties that govern the single market.
Alex Cunningham (Stockton North) (Lab)
We all know that an ill-prepared Prime Minister failed to build the alliances and friendships to ensure that Britain’s best interests were protected in Europe last week. What will he be doing on his days off, when the leaders of the other 26 EU nations are sitting around a table, working hard and discussing economics that affect countries both inside and outside the eurozone?
The Prime Minister
What I will be doing is sorting out the mess that the hon. Gentleman’s party left when it left office.
Chris Kelly (Dudley South) (Con)
My right hon. Friend might be interested to hear that I have recently visited businesses in Dudley South that are now exporting to markets such as Mexico, Brazil and the far east. Given the decline of the European Union’s share of world GDP and world trade over the past decade, does he agree that we need to ensure that we have robust relationships with the rising powers in Asia and south America as much as with the declining powers in the EU?
The Prime Minister
My hon. Friend is right. What we want is the best of both worlds. We want to have the single market in Europe and use it to drive free trade deals with countries in south and central America and the far east, so that we maximise trade for Britain, Europe and the world.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
Is it not more likely than not that the 26 member states other than Britain will increasingly agree among themselves courses of action on financial services, the single market and other matters, and that even if Britain still has the right to oppose them in the full EU, it will not be able to stand out against 26 countries that have effectively agreed a position among themselves?
The Prime Minister
The new organisation outside the EU cannot draw up or implement agreements on financial services or other things that have an impact on the single market. Those things have to be done through the Single Market Council. Of course there will always be difficulties at that Council, where frankly my right hon. Friend the Chancellor has to fight Britain’s corner very hard, but the danger for us was allowing the treaty of the 17 to come into the EU without proper safeguards. That is why we behaved as we did.
Christopher Pincher (Tamworth) (Con)
Is my right hon. Friend aware that François Hollande, the front-runner for the French presidency in next year’s elections, has said that if elected he will tear up the accord because it is not right for France? Does that not suggest that there are socialists who appreciate it when Britain stands up for herself? Sadly, they are not our socialists.
The Prime Minister
I do not want to get drawn into the French election campaign, because despite reports to the contrary I am still on extremely good terms with my friend Nicolas Sarkozy, as the Libya campaign proved. I will say one thing: at least the Opposition leader in France has told us what he thinks. I can see the Opposition Front Benchers tweeting, blogging and poking for all they are worth, but they still do not have a policy.
Gordon Banks (Ochil and South Perthshire) (Lab)
The Prime Minister has referred to today’s Financial Services Authority announcement, and I have to say that he has selective memory loss, because it was he who was calling for less and lighter-touch regulation of our financial services when he was in opposition.
May I ask the Prime Minister why it was better to placate his Back Benchers than stay in the room, stand up and fight for British interests?
The Prime Minister
There are two points. First, the FSA mentions only three politicians, one of whom is the shadow Chancellor. On placating people, if the hon. Gentleman casts his mind back to last Wednesday, he will find that I was not particularly placating anybody with the moderate and reasonable requests I was making of the European Union. It was leadership on behalf of Britain, not any one part of it.
Martin Vickers (Cleethorpes) (Con)
My right hon. Friend will be aware that he has the overwhelming support of my constituents from across the political spectrum. If we are to safeguard jobs and expand the economy, we must be equally robust in all our EU negotiations. He will know that the common fisheries policy adversely affects my constituency. Will he assure my constituents that his colleagues will follow his lead when negotiating on that matter?
The Prime Minister
I know how important the cod issue is to my hon. Friend’s constituents and people right across that region. I will ensure that Ministers in the coalition Government stand up for our fishermen.
Gavin Shuker (Luton South) (Lab/Co-op)
The Prime Minister has stated that he wanted to deal at the level of 27 nations. Why, then, did he end up having bilateral discussions with just three?
The Prime Minister
The point is that it is quite clear that when it came to the issue of wanting a change to the treaty—[Hon. Members: “Answer!”] I am answering the question very directly. It was clear that the Germans and the French were leading the charge on wanting a change to the treaty, so it was very important to have discussions with them, but I also had discussions with the Dutch, the Swedish, the Irish and many others.
Nadhim Zahawi (Stratford-on-Avon) (Con)
May I add my support to the Prime Minister and to the coalition Government for taking a tough decision under difficult circumstances? Will he confirm that over and above our contribution to the EU, we buy more from Europe than we export to it? The difference is about £100 billion in product, which the eurozone will need at the moment to help it out of its crisis.
The Prime Minister
My hon. Friend makes an important point. We have a large trade deficit with Europe, apart from in one area: financial services. Frankly, I wish our economy was more rebalanced. We are aiming to rebalance it, but it is important in the meantime that we recognise realities.
Mr William Bain (Glasgow North East) (Lab)
Successful completion of the single market could add 7% to UK gross domestic product. After Thursday’s summit and the Prime Minister’s policy of isolation, does he believe that he has more or fewer allies in Europe for something that is vital to our national interest?
The Prime Minister
We have huge amounts of allies and support for action on the single market. If the hon. Gentleman looks at what has happened in the past 18 months, he will see that there have been more positive steps taken by the European Commission on the single market than there have been for the past 10 yeas or more. If we look at what is happening on the services directive, energy, small business, we see that the penny has finally dropped that Europe has a role, but it needs to be about deregulation. That is no coincidence. One reason is that of the 27 countries sitting around the table, only four are run by socialists.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
Many jobs in Suffolk rely on a fair, level playing field in the single market. If last Friday morning was not the time to stand up for British interests, when is?
The Prime Minister
My hon. Friend is right. Institutional arrangements and treaty arrangements in the EU must be agreed by unanimity. If anyone is not content with what is being put forward, it is perfectly acceptable to do what I did and say, “I am not happy to go ahead with the treaty without these safeguards.”
Toby Perkins (Chesterfield) (Lab)
The Prime Minister has heard from Members on both sides of the House about the worries of manufacturing industry. Will he say specifically which exporting firms think that his actions last week will make exports easier rather than harder—which ones have come out and supported his move?
The Prime Minister
Frankly, I have found huge support from the business community for what I have said—and that spans a huge number of different industries. Many industries are asking what we will do about the problem of excessive regulation. That should be dealt with through the single market, which we will continue to do.
Mr Robert Buckland (South Swindon) (Con)
As someone who has long advocated a positive role for Britain in Europe, may I welcome my right hon. Friend’s decision on Friday as the right one for this country? Will he further commit the Government to carry on engaging strongly with our European partners to ensure more jobs and growth in the single market?
The Prime Minister
I am grateful for my hon. Friend’s support. I have spoken to a number of people over the last few days, in my party and others, who have a long history of supporting Britain’s membership of the EU and who think that what I did was right. Of course we need to engage, and in terms of the single market we need to make that engagement even more powerful in the weeks and months ahead. But it was right, on this occasion, to say no to this treaty.
Ian Austin (Dudley North) (Lab)
There is one member of the Government who does not seem to share his colleagues’ antipathy for all things European, but after sitting through and paying for a dinner at which guests toasted the Third Reich and chanted “Hitler, Hitler, Hitler”—[Interruption.] Members on the other side of the House may not take this seriously, but why has the Prime Minister not sacked—
Mr Speaker
Order. I simply say—[Interruption.] Order. I am perfectly capable of handling these matters myself. If I wanted help, I certainly would not ask Back Benchers of any party, or anybody else for that matter.
I simply say to the hon. Gentleman that he asked his question earlier, and it was perfectly in order for him to do so, but we are here discussing the European summit and the Prime Minister’s statement on it. The hon. Gentleman is an ingenious fellow—
Mr Speaker
Order. I am being helpful to the hon. Gentleman. I have known him since we were at university together 29 years ago, and I have probably forgotten more about him than he knew in the first place. I am being kind to him and he has said enough for today. He can use other methods to get his point across, and I am sure that he will.
Stephen Mosley (City of Chester) (Con)
It is only the tough action taken by my right hon. Friend’s Government to tackle our own deficit that has made us a safe haven in Europe and given us a choice last week. Is it not the case that if we had followed the economic policies advocated by the Opposition, it would not be the eurozone asking us for help, but us going to beg Europe to bail us out?
The Prime Minister
My hon. Friend makes an important point. At the last election, British and Greek interest rates were pretty much equivalent at about 4.5% and we had similar sized deficits. What has happened since is a huge increase in Greek interest rates and a decline in British interest rates, partly because we have a plan—and have shown that we have a plan—to deal with our debts and our deficit.
Esther McVey (Wirral West) (Con)
The Populus poll reported today shows that only 14% of the public opposed the Prime Minister’s actions. Does that not show that Members on this side of the House are totally in touch with public opinion and the Opposition are not?
The Prime Minister
I am grateful to my hon. Friend for that point. What I also noticed from that poll, which says that more than 50% support what we have done and—as she says—14% are against, is that the leader of the Labour party does have a constituency of opinion among the people who have not made up their minds.
David Morris (Morecambe and Lunesdale) (Con)
May I congratulate the Prime Minister on the strength he has shown in leading this country? The tabloid press says that £40 billion would have gone over to Europe, or £642 for every man, woman and child in this country. I thank the Prime Minister for stopping that happening, and will he point out to the Leader of the Opposition—who now says that he would not have signed the treaty—that instead of being cast adrift on the waves of the Atlantic, we are now the financial lifeboat of Europe?
The Prime Minister
I am grateful to my hon. Friend for his question. The point about the budget is important because, as a net contributor, every extra percentage point of budget increase does result in a big transfer from Britain to Brussels, so it is important that we have managed to achieve a freeze.
Simon Kirby (Brighton, Kemptown) (Con)
May I congratulate the Prime Minister on his strong and decisive leadership and on doing not only what is best for Britain, but best for the 2,000 of my constituents who work in financial services?
The Prime Minister
I thank my hon. Friend, who has made a number of sacrifices on my behalf over the last 18 months, one of which is waiting to the very last in this marathon question session. I am delighted that he believes that we have done the right thing for Britain and for Brighton, and I praise him for his very hard work in his constituency.
Mr Speaker
I am extremely grateful to the Prime Minister and other colleagues, as 101 Back Benchers had the opportunity to question the Prime Minister in the 88 minutes of exclusively Back Bench time on this statement. I thank colleagues for their co-operation.
Royal Bank of Scotland (FSA Report)
(12 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Financial Secretary to the Treasury (Mr Mark Hoban)
With permission, Mr Speaker, I should like to make a statement.
Today the Financial Services Authority published its report on the failures that led to the near collapse of the Royal Bank of Scotland. It is a thoroughly detailed report, listing a catalogue of management and regulatory failures that almost felled one of the world’s largest banks. Given the billions of pounds of taxpayers’ money that was needed to bail out the bank, not once, but twice, and for a total sum of £45 billion, it is right that taxpayers are told the full story.
It is fair to say that the report makes for depressing reading. For the shadow Chancellor, it is as damning as it is depressing. The report lays bare the gross failures of the regulatory regime that was devised and driven by the shadow Chancellor and his party.
It is now well known that the tripartite system set up by the previous Government failed spectacularly in its mission to maintain stability. The decision to divide responsibility for assessing systemic financial risks between three institutions meant that in reality no one took responsibility. As the report laments, the FSA was solely responsible for the entire range of financial regulation issues, from the prudential soundness of major systemically important banks, to the conduct of some 25,000 financial intermediaries.
The failure of regulatory culture was equally significant as the failure of institutional design. The report says:
“What was wrong in the case of RBS was the FSA’s overall approach to prudential supervision, rather than the execution of this approach in relation to RBS.”
More than that, the report says that it was an approach that
“responded to political pressures for a ‘light touch’ regulatory regime.”
The report singles out the shadow Chancellor as one of the three senior Labour politicians who were responsible for this “sustained” pressure. It quotes his first speech as City Minister in which he said
“nothing should be done to put at risk a light-touch, risk-based regulatory regime.”
It was political dogma at the cost of prudential regulation, and it left us hamstrung with a complacent regulator, powerless against the risks in the financial system. It meant that the FSA failed sufficiently to challenge RBS management over its decisions, and was over-reliant on the firm’s own assessment of its position. Rather than exercising judgment and foresight, the FSA adopted a tick-box and reactive approach to regulation.
Left to its own devices, without proper regulatory oversight, RBS got away with some of the most shocking decisions taken by any bank in the years and months leading to the crisis in late 2008. Poor judgment was fostered by a style of management and governance that promoted a culture of aggressive risk-taking over prudence. That was most clearly demonstrated by RBS’s decision to grow its investment bank by aggressively expanding its structured credit and leveraged finance activities. That build-up of risk was compounded by RBS’s relentless pursuit and purchase of ABN AMRO. The current chairman of RBS said that the acquisition was
“the wrong price, the wrong way to pay, at the wrong time and the wrong deal.”
As the House is aware, it was the losses in the RBS investment banking arm that crippled the entire bank. As the credit trading losses mounted, the bank’s excessive reliance on short-term wholesale funding and its weak capital position were brutally exposed, and led to its near collapse.
The British economy is still recovering from the near collapse of RBS and the wider financial system just three years ago. Recovering from that crisis is this Government’s No.1 priority. We simply cannot afford a repeat of it, which is why we have embarked on fundamental reform of our regulatory system. As the House is aware, the Government are legislating fundamentally to reform the failed tripartite system. We are establishing a permanent financial policy committee inside the Bank of England. Its job will be to monitor overall risks in the financial system, identify bubbles as they develop, spot dangerous interconnections and stop excessive levels of leverage before it is too late. It is exactly the kind of judgment and foresight that we needed in the years preceding the last crisis.
We are also abolishing the Financial Services Authority in its current form, and creating a new Prudential Regulation Authority with a focus on micro-prudential regulation. Prudential regulation of banks will go back to where it belongs, under the auspices of the central bank, as a subsidiary of the Bank of England, bringing micro and macro-regulation under one roof.
The PRA will be a focused, expert regulator. Whereas the FSA was responsible for thousands of financial services firms, the PRA will focus exclusively on the prudential regulation of deposit-takers, insurers and investment banks. And when regulating banks, it will have the single statutory objective of promoting safety and soundness. Responsibility for the protection of consumers and the conduct of financial services firms will transfer to the new Financial Conduct Authority, leaving the PRA free to focus first and foremost on stability.
We are also working closely with the FSA and the Bank of England to ensure that the new PRA has the powers that it needs to ensure that banks do not take excessive risks and that directors who act improperly face appropriate penalties. We will consider carefully the further recommendations made in the report, particularly Lord Turner’s suggestion that it should be made easier for action to be brought against the directors of failed banks.
I share the frustration of many Members that it has not been possible to bring action against those responsible for the failures at RBS, but strengthening legal powers in this area would raise some complex issues, and we will want to reflect carefully and listen to a range of views before deciding on any action.
The report into the failure of RBS fully complements our analysis of the faults of the previous regime and supports our wider reforms to the banking system. We will respond to the recommendations of the Independent Commission on Banking next Monday. We have already said, though, that we support in principle not only a ring fence around better-capitalised high street banks to protect them against investment banking losses but, when things go wrong, a bail-in of private investors, not a bail-out by taxpayers. Together with recovery and resolution plans, that means that we are working to ensure that banks can fail in an orderly fashion without any recourse to taxpayers’ money.
We will not make the same mistakes as the previous Government but will ensure that we have a system of regulation that secures our financial stability while protecting our competitiveness, and we have already made substantial progress in that ambition. I welcome the action already taken by the FSA to strengthen its supervisory capacity, to become a more intensive and intrusive regulator and to improve its ability to ensure that banks are well governed.
We continue to lead the international debate to impose higher capital requirements and tougher funding standards on banks across the globe, and we will resist any attempt to unpick Basel III in Europe. With the world focused on the strength of bank balance sheets, this is not the time to pander to vested interests. We will ensure that Basel III is implemented in full and that we can go further to impose higher capital standards where necessary to meet risks unique to our sector.
We know that the financial sector will continue to be a critical part of our economy and our recovery, and we are committed to supporting the sector and protecting the open and competitive markets that have allowed the sector to flourish in the UK, but that success cannot come at a cost to the wider economy. That means getting the structure and substance of regulation right and correcting the mistakes of the previous Government.
Today’s report reminds us of the gross failures of the previous regime and the previous Government. This Government will not repeat those mistakes. We will reform the regime to preserve the innovation that fuels the sector’s success without putting the wider economy at risk and to build a successful but stable financial services sector. I commend this statement to the House.
Chris Leslie (Nottingham East) (Lab/Co-op)
The report confirms that there was institutionalised dysfunction at the heart of the Royal Bank of Scotland and confirms what we all know—that there was a collective failure of regulation not just in Britain but around the world, and that there were failures not just of one individual, institution, political party or Government but failures that allowed irresponsible bankers to take excessive risks and cause a global financial crisis.
Labour Members have accepted our responsibilities, and as my right hon. Friend the shadow Chancellor said, for the part that the previous Government played in that global regulatory failure, we are deeply sorry. Acknowledging our part in those global failings is the right approach to take, so let me ask the Minister: does he accept that the Conservatives got it wrong too? During the 2007 debates on Northern Rock, he beseeched the Treasury
“to counter the pressure for greater regulation”,
and talked of
“the strength of our regulatory regime”
and how it was
“vital that this crisis does not erode that standing”.—[Official Report, 12 December 2007; Vol. 469, c. 391.]
It would be unparliamentary to call the Minister a hypocrite but perhaps he needs some medical advice about his selective amnesia. Let us have some contrition from the Conservative party, which never once called for more regulation or criticised the FSA for not having enough powers. In fact, it argued precisely the opposite. The Chancellor of the Exchequer, who is sitting on the Front Bench, complained constantly of burdensome and complex regulations.
The FSA is clear that there was a collective failure, but there was also clarity about how the regulator was at fault. Specifically, the report says that the monitoring of RBS’s capital position was “reactive”, and that “supervision of liquidity” was a “low priority”. The FSA did not scrutinise the trading book or loan impairments adequately, and the takeover of ABN AMRO was not questioned sufficiently. Can the Minister say, first, whether the FSA had the co-operation of all former RBS directors, and whether they were all interviewed? His statement was somewhat vague about action against those responsible—he says that he will reflect carefully. Can we take it then, reading between the lines of his statement, that the Government will not pursue action to disqualify former RBS directors from sitting on other company boards?
Secondly, the Minister says that he will “consider” tough action to ensure that bankers who jeopardise the solvency of our retail banks cannot escape responsibility. There should be a new strict liability requirement specifically for banking directors. If the Minister does not amend the draft Financial Services Bill to achieve that, we will table amendments to that effect. The report suggests that future bank takeovers should require formal approval by the regulator, which was not required when RBS took over ABN AMRO. That is sensible, so can the Minister say whether he will amend the draft Bill accordingly?
Thirdly, will the Government take steps to strengthen the corporate governance of large public companies, including banks? Regulators have to do a better job, but shareholders also need to be able to exert their authority. Fourthly, will the Minister agree to implement the legislation already approved in law to publish the pay deals of everyone working in the banking sector earning more than £l million? The Government have dragged their feet on this issue. A simple signature to a statutory instrument is all that is needed. Surely it is important to have transparency and accountability for all the high earners in the banks, not just the richest eight in each bank, as he has conceded so far.
Fifthly, the report highlights a culture of incentive fees for City advisers, whose rewards are greatest if large takeovers are completed. The report recommends ending that bias in the advisory fee structure. Why did the Minister ignore that recommendation in his statement? Does he agree that the proposal would make good sense? The FSA and the Government did not see the financial crisis coming, but neither did the Bank of England. Is the Minister certain that putting all the new regulatory powers in the hands of the Bank will work? Is there a risk that the accountability of the Bank of England—an important point—is substandard in his current proposals? Will he accept the suggestions from the Select Committee on the Treasury and others that those safeguards need to be significantly enhanced?
We of course support moves to enhance prudential regulation, but there is always a danger of fighting the last battle, especially when there could be a eurozone credit crunch just around the corner, so is the Minister not taking his eye off the ball? Will he acknowledge that the new European supervisory structures are incredibly powerful and that, by mishandling negotiations in Europe so badly, the Government have jeopardised our ability to influence and steer those European regulations, which can overrule the tougher capital buffers for our banks, as suggested by the FSA here in Britain?
The regulators did not do enough, and we have to learn lessons. However, ultimate culpability rests on the shoulders of the bankers involved. It is astonishing that deeply irresponsible decisions by those bankers should have forced a £45 billion bail-out, and yet no enforcement action is brought and nobody is punished. It is about time that this Government stopped pandering to the big banks and took action to speed up banking reform and rein in the excessive bonus culture.
Mr Hoban
The approach taken by the hon. Gentleman, who seeks to try to blame everybody for the crisis, overlooks the key role that the shadow Chancellor—who is not in his place today—played in the design of the regulatory system that led to the problems we saw at RBS. That design—driven by the shadow Chancellor, who took great credit for it—meant that no backstops were in place when RBS took those decisions.
The other point that the hon. Gentleman should bear in mind is that only three politicians are named in the report as having put pressure on the FSA to adopt a light-touch regulatory regime. One was Tony Blair, one was the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), and the third one—the person who is missing from the Opposition Front Bench today—is the shadow Chancellor, the person who in his first speech as City Minister called on the FSA to adopt a light-touch regulatory regime, a regime that, when confronted with the challenge of RBS, turned from a light touch to a soft touch. It is, of course, the taxpayer who has picked up the bill for the fundamental flaws in Labour’s regulatory regime.
The hon. Gentleman talked about disqualification of RBS directors. It is a pity that the previous Government did not think about that issue in the aftermath of the financial crisis. My right hon. Friend the Secretary of State for Business, Innovation and Skills has referred the report to counsel to see whether it is possible to disqualify the directors of RBS.
The hon. Gentleman talked about approval for acquisition. We will look carefully at the proposal Lord Turner made, but the reality is that the FSA had powers to intervene, but chose not to use them—partly as a consequence of the light-touch regime foisted on them by the previous Government.
When the hon. Gentleman talks about bonuses, let us not forget that it was under the previous Government that bonuses could be paid out in cash and taken straight away. Under the regime in place now, bonuses are deferred, paid out in shares and can be clawed back. Let us not forget that the moment that it was possible to exercise the maximum leverage on Sir Fred Goodwin—the banker Labour knighted—was the moment when it gave away his pension scheme. So I will take no lessons from the Labour party on the way in which we should deal with the problems of RBS.
The hon. Gentleman referred to the Bank of England and seemed to question whether it was able to take on the additional responsibilities. I thought he was moving away from his party’s position of supporting the package of reforms that we have put forward. Let me remind him that it was the Bank of England that identified the problem of the mispricing of risk in the financial markets. The problem was that the regulatory structure it had to deal with meant that the Bank did not have the power to tackle the problem—nor, indeed, did the FSA. What we are faced with is a problem of dealing with the regulatory regime left to us by the previous Government. They chose not to make these reforms when they were in government; we are taking action now to ensure that we have the right regime in place to tackle those risks and ensure that we have a stable, but successful, financial services sector.
Mr Andrew Tyrie (Chichester) (Con)
Powerful institutions do not leap forward to explain themselves when they make mistakes, and neither did the FSA. The fact is that the almost 500 pages of this report would never have been written had it not been for the unremitting pressure from the Treasury Select Committee. I would like to thank my colleagues on that Committee for helping me to secure this report from the FSA. Furthermore, to make sure that the report was of adequate quality, we took the unprecedented step of sending our own specialist Committee advisers into the FSA with full powers to examine papers and personnel in order to check that the papers underlying the compilation of this report were fairly reflected in it.
Is it not now crucial that the new regulators—the Bank of England and the Financial Conduct Authority—are subjected in future to far more vigorous parliamentary scrutiny than the FSA has been in the past? Will the Government commit in the draft legislation to secure a much higher level of parliamentary scrutiny of these powerful quangos than we have had hitherto?
Mr Hoban
I, too, commend the work of my hon. Friend and his Select Committee, along with the work done by Bill Knight and Sir David Walker in scrutinising the FSA’s report and making consequent improvements to it. One of the challenges we face is, as my hon. Friend said, to ensure that there is proper scrutiny. He commented on the fact that it took the pressure of his Committee to produce this report. The reality is that the existing powers in section 14 of the Financial Services and Markets Act 2000 to require a report to be produced where there is regulatory failure have never been exercised. One measure we have put in place in the Bill is to enable such reports to be produced on a more regular basis—not at a Minister’s request but in response to objective triggers to ensure that reports are published in a timely fashion so that we can learn the lessons from past mistakes. I think that is a helpful way of enabling Parliament to hold the regulators to account. We look forward shortly to responding not just to my hon. Friend’s Select Committee report, but to that of the pre-legislative scrutiny Committee.
John Mann (Bassetlaw) (Lab)
Is the position of Hector Sants at the Bank of England still credible following the report, and does the Minister agree that it would not be tenable for anyone connected with the FSA to replace Sir Mervyn King as the next Governor of the Bank of England?
Mr Hoban
As the hon. Gentleman will know, RBS was regulated by the retail division of the FSA, while Hector Sants was managing director of the wholesale division. He took charge of the FSA about three months before the ABN AMRO acquisition, and one of the things on which he should be commended is the way in which he has led its implementation of a more intrusive and intense programme of supervision. I think that that has yielded dividends during the last two or three years, and that it is an important part of his record that we should recognise.
Mr David Ruffley (Bury St Edmunds) (Con)
The Government’s proposed new regime will be judgment-based, not rule-based, and will therefore require banking supervisors of much higher quality than we have seen hitherto. What steps will the Financial Secretary take to ensure that such people are in place under the new regime?
Mr Hoban
My hon. Friend is right to recognise that the quality of supervision needs to be higher than it was in the pre-crisis days. The need for much more engagement by better qualified banking supervisors is a priority not just for the FSA but for the Bank of England, which will be introducing measures for precisely that purpose.
Stewart Hosie (Dundee East) (SNP)
The Minister said that the FSA had failed to challenge the RBS management sufficiently over its decisions. That is a masterful understatement. In October 2007 the FSA had precisely four and a half staff in RBS: half a manager and four team members. It was possibly the biggest bank in the world, it was systemically important, and its asset base was bigger than the GDP of the United Kingdom. Will the Minister guarantee that, irrespective of the future shape of banking and regulation, the RBS’s successors—the Prudential Regulation Authority and the Financial Conduct Authority—will always have enough of the right people in such systemically important banks, so that we never encounter such a situation again?
Mr Hoban
That is an important question. I referred earlier to the pressure under which Tony Blair put the FSA to adopt a proportionate regulatory regime. One of the examples put to the then Prime Minister about the light-touch quality of the regime was the fact that there were only six people supervising HSBC, and even fewer have been supervising RBS. I understand that there has been almost a fourfold increase in the number of RBS supervisors, and I think that that is a much better approach. We must ensure that there is intrusive, intensive supervision, and that requires not just more resources, but a higher quality of resources.
Matthew Hancock (West Suffolk) (Con)
I warmly welcome the report. I think that the proposal to debar directors from high office in future should be implemented so that we can ensure that rewards are not received for failure at the top, but will the Minister also consider the proposal to debar others mentioned in the report who were culpable?
Mr Hoban
I think that we should give careful consideration to the idea of debarring people who have been incompetent and mismanaged their leadership of institutions. That applies to the directors of those institutions, but it may also apply to the politicians who designed the system in the first place.
Frank Dobson (Holborn and St Pancras) (Lab)
Let me begin by declaring an interest: my wife and I have both current and deposit accounts with the Royal Bank of Scotland. As one who was always in favour of tougher regulation of banks, I must also confess that I do not recall encountering an organisation before the collapse which could be described as “Tories for tougher banking regulation”.
Will the Minister confirm that the failures extend beyond the area that he has covered? Will he confirm that the auditor, Deloitte Touche Tohmatsu—which received substantial fees—did not seem to notice that there was anything wrong, and that the benighted rating agencies, which keep telling us what should be happening now, gave triple A ratings to both RBS and ABN AMRO right up to the day on which the balloon burst?
Mr Hoban
The right hon. Gentleman makes some important points, and clearly a number of institutions involved with RBS and the regulatory system more widely should bear responsibility for what happened, but let us be absolutely clear that the principal responsibility for the failure of RBS lies with its management.
Mike Crockart (Edinburgh West) (LD)
I should, first, declare that the global headquarters of RBS is in Gogarburn in my constituency. Today’s report apportions blame for the RBS demise on previous RBS management, insufficient challenge by the FSA and Labour’s light-touch, lip-service regulations; this Government are now dealing with those. Will the Minister join me in recognising that one group not blamed was the tens of thousands of ordinary employees of the bank, who have continued to work in an exemplary way, despite more than 27,000 redundancies and a slump in the bank’s fortunes and share price, which was previously a major element of their benefits package? Does he agree that today’s report is no reflection on them?
Mr Hoban
My hon. Friend makes an important point. Responsibility clearly rests with the leadership of RBS, not with those working in the bank’s branches, those working at its insurance company and others, who did their job properly and to the highest standards. It is important to recognise that, having identified regulatory issues to address, his party and my party came together in a coalition Government committed to regulatory reform. The Labour party was wedded to the status quo and to the regulatory regime that allowed this to happen unchecked. That party should take its full responsibility, just as we should recognise the excellent work that people at RBS did.
Mr Pat McFadden (Wolverhampton South East) (Lab)
The report makes it clear that the primary responsibility for the collapse of RBS lies with the firm. The shadow Minister was big enough to say what he did about past regulation, and the Minister’s anger would be more credible if he and his party had not continually called for lighter regulation. The Minister had said:
“Effective light-touch, risk-based…regulation is in the interests of the sector globally, and the Government need to send that message more strongly to the US Administration and Congress”.—[Official Report, 28 November 2006; Vol. 453, c. 995.]
The Chancellor had said:
“I fear that much of this regulation has been burdensome, complex and makes cross-border market penetration more difficult.”
If people are going to admit culpability on regulation, the truth is that those on both sides of the House need to look in the mirror. Is that not the case?
Mr Hoban
It was my party, through the work done by Lord Sassoon, that examined the regulatory system set up by the previous Government, identified some of the challenges and determined that the best thing to do was to reform that system. We have recognised the challenges and the failings of the previous regulatory system, and proposed measures to improve it, and to ensure that it serves consumers and ensures a stable, successful financial services business.
Mr Deputy Speaker (Mr Lindsay Hoyle)
We have quite a few Members to get in, so please could we have brief questions and answers?
Tony Baldry (Banbury) (Con)
The shadow Minister said that the regulation did not work and the regulator did not do anything sufficiently. Surely the reason for that was because the regulator was put under sustained and unacceptable political pressure by two former Prime Ministers and by the current shadow Chancellor. Will my hon. Friend confirm to the House that this Government, and the Treasury under the stewardship of this Chancellor, would not put such pressure on regulators and that the constitutional convention as to how a Government should work with regulators will be properly observed?
Mr Hoban
My hon. Friend makes an important point. We have made it clear that we want to give the new regulatory organisations that independence, power, authority, discretion and judgment to get on with their job, so that we ensure that we tackle issues that need to be tackled and ensure that there is tough regulation where that is needed. For example, we are going to introduce powers for the Financial Conduct Authority to ban particular products—a power that has not been available so far. We are prepared to take those tough decisions and let the regulators get on with their job.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
One of the features of the RBS takeover of ABN AMRO was that lots of people warned against it at the time, and not just with hindsight—many people in the financial services and elsewhere warned of severe consequences. Was the decision to go ahead with that takeover about not just the role of Sir Fred Goodwin, but the fact that those who were meant to prevent him from doing such things did not do so? Was this not only about a question of regulation, but about a culture of takeover, acquisition, internationalisation and over-ambition which was at the heart of the problems of RBS and other places? What will the Minister’s proposals do to prevent that kind of attitude from affecting future managements and future banks when the current financial crises have passed?
Mr Hoban
The hon. Gentleman makes some important points. It is important that shareholders play a more active and engaged role in businesses in which they have a holding. My right hon. Friend the Secretary of State for Business, Innovation and Skills has commissioned John Kay to conduct a review of long-term interest in business and business investment. We need to strengthen corporate governance in boards, as they clearly were not sufficiently robust in their challenge to executives. One of the things that has happened in the FSA is that a much more robust approach is being taken to understanding and examining people who want to hold positions of significant influence in our major banks, including those who want to become board members. That is a good way not only of raising the quality of people in the boardroom, but of ensuring that they are robust enough to stand up against a dominant and aggressive chief executive officer.
Stephen Barclay (North East Cambridgeshire) (Con)
Will my hon. Friend ensure that the rules allow enforcement action against incompetence? The point being missed by Labour Members is that there are more than 6,000 pages of FSA rules. There is no shortage of rules, but they do not allow enforcement against incompetence; they allow it only against dishonesty. That is what has fettered the hand of the FSA and what angers my constituents, who are aggrieved that individual directors of RBS have not faced sanction.
Mr Hoban
My hon. Friend makes an important point and he speaks with some experience, having worked with the FSA. We need to look carefully at the fit and proper person test for people becoming registered with the FSA to ensure that they are good quality, and can do the job properly and competently.
Dr William McCrea (South Antrim) (DUP)
I welcome the Minister’s statement. It is right and proper that we review past failures and learn from them, but how can we use the current situation to get the banks to lend to the hard-pressed small and medium-sized businesses crying out for finance they urgently need, especially in Northern Ireland, where credit is particularly squeezed?
Mr Hoban
The hon. Gentleman makes an important point about the credit situation in Northern Ireland, and I know that the hon. Member for East Antrim (Sammy Wilson) pays close attention to it. We need to ensure that banks are sufficiently well capitalised to enable them to lend to businesses. One of the things that the hon. Gentleman may have noticed from last week’s report from the European Banking Authority is that no UK banks required additional capital, because they are already well capitalised and should be in a position to lend, as was demonstrated by the third quarter Project Merlin figures.
Nadhim Zahawi (Stratford-on-Avon) (Con)
This report is a damning indictment of the decisions taken by the previous Government, so it is regrettable that the shadow Chancellor could not be here to apologise in person to the House and to the country. Does the Minister agree that the something-for-nothing culture allowed to fester under the previous Government is something that this Government will not allow and that they will examine how to shift the dynamic in boards in systemically important businesses so that non-execs are able to challenge powerful CEOs and hold them to account?
Mr Hoban
My hon. Friend makes an important point, because there was a culture, as documented in the report, that meant that directors on the board of RBS did not challenge the CEO sufficiently robustly. That needs to change. We also need to ensure that the incentive arrangements for directors are robust. Under the previous regime, bonuses could be paid out in cash straight away. Over the past couple of years, tougher rules have been put in place to defer bonuses, to make sure that they are paid in shares and to claw back bonuses where there has been failure. That is a tough regime in place and it should make sure that the incentives of directors are in line with those of shareholders.
Mark Durkan (Foyle) (SDLP)
What are the issues inhibiting the Minister from making a clear commitment to strengthen legal powers so that action can be brought against directors of failed banks?
Mr Hoban
I understand the frustration expressed in the hon. Gentleman’s question. We need to look carefully at the proposals in Lord Turner’s report and we will have the opportunity to legislate in the Financial Services Bill, if appropriate, but the hon. Gentleman would not want me to engage in a knee-jerk response to a report that was only published first thing this morning. I want to ensure that we have the right measures in place, whether through company law or regulation, to ensure that we have good-quality people running such organisations.
David Mowat (Warrington South) (Con)
The report makes it clear that had the Basel III legislation been in place, the AMRO transaction could not have happened. Will the Minister confirm that it remains his intention to implement Basel III as soon as possible and ideally before 2019?
Mr Hoban
It is our commitment to implement Basel III. We want to ensure that it is implemented consistently across the whole of Europe in capital requirements directive IV and we are pushing for member states to have the freedom to go further and raise capital standards when they believe it is in their interests to do so. We want to see tougher regulation of banks and that requires better and more capital and better and more liquidity.
David Morris (Morecambe and Lunesdale) (Con)
The FSA’s report mentions three Ministers in the previous Government who applied sustained political pressure to give a light touch, shall we say, to the regulation. Can my hon. Friend tell me who they were?
Mr Hoban
It is interesting, is it not? It is not often that we see particular Ministers highlighted in reports published by independent bodies. The three who are mentioned are Tony Blair, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) and the shadow Chancellor. The shadow Chancellor took great pride in taking credit for the design of the regulatory structure, which failed, and he compounded those mistakes in the design of the structure by putting pressure on the FSA to go for a light-touch regime. The taxpayer has picked up the consequences of the failure to design that structure correctly and of the inappropriate pressure to have a light-touch regime when it came to the regulation of RBS and others. The taxpayer is paying the cost and the Opposition should be apologising for that.
Richard Fuller (Bedford) (Con)
Although the report includes useful forward-looking recommendations, its review of the actions of executives, directors, regulators and Ministers that led to the crisis amounts to 487 pages of “Oops!” That includes the laughable statement on page 352 that
“deterrence will most effectively be achieved by bringing home to such individuals the consequences of their actions.”
Does the Minister agree that deterrence would be more effectively achieved by those people hearing the clunk of the prison door and the turning of the key?
Mr Hoban
My hon. Friend is right to say that many taxpayers up and down the country who have seen £45 billion poured into RBS want to know why action has not been taken against its directors. Today’s report is an attempt to address those issues. It recognises that there are some problems with the sanctions available to the FSA and in the Companies Acts, and we are committed to reviewing them and seeing which tougher sanctions can be put in place to deal with directors who let down the businesses they work for and the customers they serve.
Durban Climate Change Conference
(12 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
The Secretary of State for Energy and Climate Change (Chris Huhne)
With permission, Mr Speaker, I wish to make a statement on the outcomes of the United Nations climate change conference in Durban, which concluded only yesterday. I was present for the last week and a bit of the conference, along with my colleague the Minister of State, Department of Energy and Climate Change, the hon. Member for Bexhill and Battle (Gregory Barker), who has responsibility for climate change.
After the disappointment of Copenhagen, last year’s Cancun conference showed that the UN climate process was back on track. The Durban conference was designed to build on that outcome and our aims were therefore higher. At our most optimistic, we hoped to agree a road map to a new global legally binding agreement to replace or supplement the Kyoto protocol. Unlike Kyoto, it would incorporate emissions targets for all countries other than the poorest and least developed. It would be accompanied by agreement to a second commitment period of the Kyoto protocol from 2013. We also aimed to encourage countries to strengthen their voluntary pledges to reduce emissions in the years before any new agreement entered into force and we hoped to establish the green climate fund.
I am pleased to say that, following two weeks of intense negotiations, we achieved each of those key aims. The talks resulted in the adoption of the Durban platform, a road map to a global legal agreement applicable to all parties. Negotiations for the new agreement, which will begin early in 2012, are to conclude as early as possible and not later than 2015 and the commitments in the new agreement will take effect from 2020.
The conference explicitly recognised the global gap between countries’ existing emissions reduction pledges to 2020 and the global goal of limiting average temperature increases to below 2° above pre-industrial levels. It launched a work programme for ratcheting up ambition, a process that will be reinforced by a forthcoming review of the scientific evidence.
The conference also agreed to adopt, next year, a second commitment period of the Kyoto protocol. Many details remain to be worked out over the coming months, including specific emissions reduction targets, the length of the commitment period and a process for dealing with surplus emissions allowances, but the headline message is clear: the Kyoto architecture—the rules and legal framework for managing emissions—has been preserved and can be built on in the future.
The conference also resolved to establish the green climate fund to support policies and activities in developing countries. The UK is one of the few countries to have pledged climate finance beyond the initial fast-start period, and we will make an announcement on the green climate fund once its design is completed.
The conference also resolved to establish a work programme to consider sources of long-term finance for developing countries with the aim of mobilising at least $100 billion a year by 2020. Progress was made on several other parts of the international climate regime, including reporting guidelines for developed and developing countries; the creation of the adaptation committee, which will provide advice and ensure coherent action on adaptation; the establishment in 2012 of the technology executive committee to facilitate the development of low-carbon technologies; further details of the framework for reducing emissions from deforestation and forest degradation; and a process for establishing new market-based mechanisms to deliver effective reductions in emissions at least cost.
As well as the substantial diplomatic and technical outcomes I have outlined, the Durban conference saw a highly significant political realignment. More than 120 countries formed a coalition of high ambition in support of a road map to a global legally binding deal. Many African and Latin American states, the group of least developed countries and the Alliance of Small Island States joined the EU to argue for the road map to a new agreement. That realignment has laid a firm political foundation, grounded in common interest, on which we can build future achievements.
I am sure that the House will wish to join me in paying a sincere tribute to the British team of negotiators. Drawn from across government and supported by the Foreign and Commonwealth Office and its posts, ours was one of the smallest of the G8 countries’ delegations, but what it lacked in quantity it made up for in quality. Its members played a key role in many of the detailed negotiating groups, sometimes on behalf of the entire European Union. The UK operated within and through the EU delegation, co-operating closely with representatives of other member states and the European Commission. By working together with our European partners, we were able to deliver more effectively for the British national interest and for our shared ambitions.
In conclusion, the Durban conference represents a significant step forward. It has re-established the principle that climate change should be tackled through international law, not through national voluntarism. It has persuaded the major emerging economies to acknowledge, for the first time, that their emissions commitments will have to be legally bound. It has encouraged all countries, also for the first time, to admit that their current climate policies must be strengthened and it has established the green climate fund to support the poorest countries in tackling and responding to climate change. It has also preserved the invaluable legal framework of the Kyoto protocol while at the same time opening the path to a new, more comprehensive and more ambitious global agreement. It was a clear success for international co-operation.
We still have much to do. Durban alone will not limit global warming to 2° above pre-industrial levels, but we have taken a clear and vital step towards our goal. I commend the statement to the House.
Caroline Flint (Don Valley) (Lab)
I thank the Secretary of State for early sight of his statement and join him in paying tribute to the British team of negotiators. Whatever our differences with the Government over their handling and delivery of policies at home, there is consensus across the House that the only way we will tackle climate change is by getting all countries signed up to a legally binding framework to cut their carbon emissions. In that vein, the progress made at Durban is to be applauded.
First, I welcome the recognition in the Durban agreement of the emissions gap—the difference between the action that countries have committed to and the action we need to take to prevent dangerous climate change. The gap is too large and I hope that the Secretary of State will say a little more about how the UK will be leading efforts to narrow it.
Secondly, I welcome the fact that Durban has re-established the principle that climate change must be tackled through a framework of international law that incorporates both developed and developing countries. It is undeniable that developed countries bear responsibility for significant historical emissions and, in the light of that, I welcome a second commitment period for the European Union to the Kyoto protocol. However, it is equally true, given the rate at which many developing countries’ economies and emissions are growing, that any meaningful treaty on cutting carbon emissions must be legally binding and include developing countries too. The Secretary of State will know, for example, that while developed countries are likely to meet the collective Kyoto target of a 5.2 % reduction in greenhouse gas emissions by 2012, global emissions of carbon dioxide rose by 45% between 1990 and 2010. The challenge now, as I am sure the Government recognise, is translating the principles and aspirations that were agreed at Durban into a treaty that can actually deliver the cuts in greenhouse gases we need.
As the Secretary of State himself has admitted:
“There are still many details to be hammered out”.
May I ask him to give the House a little more detail on the following issues? What safeguards were put in place at Durban to ensure that the next round of negotiations will deliver a legally binding global agreement by 2015? How does he intend to use our strong relationships with countries such as the United States and Canada, as well as India and China, to help to broker a global agreement? Also, and importantly, how does he plan to monitor the progress that is being made and to keep the House up to date?
Thirdly, I welcome the establishment of the green climate fund, negotiations for which started at Copenhagen under the stewardship of my right hon. Friend who is now the Leader of the Opposition. If properly financed, it will provide vital support to the poorest countries to cut their carbon emissions, mitigate the effects of climate change and underpin the positive support for a global legal framework. Again, although important details are yet to be agreed, this serves as a warning about the length of time it can take for an idea shared to become an idea implemented. On the detail of the fund, will the Secretary of State say a little more about how he expects the necessary resources to be raised so that it is up and running as soon as possible, and what contribution he expects the UK to make?
Although progress has been made at Durban, it has also shown the scale of the challenge we face and the need for a strong European voice making the case to tackle climate change. The Secretary of State himself said that the Durban conference showed that we can achieve more working with our partners in Europe than we can on our own. We can only compare that with the outcome of last week’s EU summit, which left us isolated. As the Deputy Prime Minister’s chief parliamentary and political adviser, the hon. Member for North Norfolk (Norman Lamb), put it:
“Our new position comes with very real risks. To be in a minority of one is not good.”
Will the Secretary of State reassure us that the UK’s voice within Europe on climate change will not be undermined as a result of the Prime Minister’s actions?
Finally, does the Secretary of State agree that reducing carbon emissions and preventing climate change are as much about example as exhortation? He has been generous enough to recognise the record of the previous Labour Government. We reduced the UK’s greenhouse gas emissions by more than 21% compared with emissions in 1990, thereby exceeding our Kyoto target. We also passed the Climate Change Act 2008, which was a world first, binding the UK Government in law to reduce carbon emissions by a third by 2020 and by 80% by 2050.
The Secretary of State will know that there is genuine concern across the House about the Government’s commitment to being the greenest Government ever, not least today when the cuts to the feed-in tariff for solar power come into effect. We hear that the Green investment bank will be delayed, and the future of carbon capture and storage is in doubt, so I ask him to reassure me and the House that alongside our international efforts to reach agreement to cut carbon emissions and tackle climate change, the Government will not lose sight of the need to make the UK cleaner, greener and a world leader in the low carbon economy.
Chris Huhne
I very much welcome the right hon. Lady’s response. It is very valuable, when going into negotiations such as those at Durban, to know that there is widespread consensus across the House on the key goals we are aiming for. I pay tribute to hon. Members on both sides of the House, particularly those who have been following these issues closely, in helping to sustain that consensus.
The emissions gap is too large and we will work on it. As the right hon. Lady rightly said, one of the key issues has been the importance of monitoring. One thing that the UK Government have actively encouraged has been the development of the emissions gap report from the United Nations Environment Programme. I had a very fruitful meeting with Achim Steiner in Durban, and I know that the programme will continue to build on that. I very much hope that that monitoring will build gradually over time to become the environmental and climate change equivalent of the sort of regular reporting that we have from the OECD and particularly from the International Monetary Fund on the world economic outlook. It would be good to have a regular world climate change outlook or global climate change report.
On the legal side, the step forward is very significant. As the right hon. Lady will no doubt have read in the press, there was an attempt, right up to the last moment, to insert into the final text the words “legal outcome”, which had been defined in the past by India and China as merely decisions of the conference of the parties. That would not have been adequately legally binding for our purposes in terms of an overall treaty. It was therefore an essential objective of the European Union’s team to take out those words and insert words that could not be interpreted as a voluntarist approach but could mean only that there was a legal agreement with real force. The compromise from the Brazilians which we finally adopted does exactly that—on the advice we received from the very able international lawyer on the UK team. That was confirmed at the time by our legal advisers—under some great pressure, I have to say, as we huddled at 4 in the morning, or whatever time it was, in the plenary room. They also advised some of our partners in that coalition of the willing. I think that we got a good deal that means exactly what it says.
I very much take on board the key point that we need to ensure that our environmental goals are not seen as an obstacle to development. That is an agenda on which I want very much to work with the Indian Environment Minister to ensure that there are viable and effective pathways to development at every level of income per head. I was particularly proud to participate in the launch of Ethiopia’s zero-carbon growth programme with the support of the Mauritian and UK Governments. Prime Minister Meles was at the launch as well. At the middle-income level, there is the example of Costa Rica. At the high-income level, let me respond to the right hon. Lady’s point about what we are doing domestically. I was very pleased that an objective assessment of what is being done by European countries, which was produced last week by Germanwatch, concluded that the UK had the second-best framework for dealing with carbon emissions of all 27 member states of the EU, behind only Sweden. However, our ministerial team likes to come first, so we will work on that.
On the key issue concerning our allies, such as the US and Canada, the right hon. Lady is absolutely right that we need to build our relationships there and ensure that they can be brought into that agreement as well. She asked for details of the global climate fund and about our support for it. We stand ready to support it and we have already disbursed £1 billion of the £1.5 billion allocated for fast-start finance. We are one of very few countries to have a programme of financial commitments for developing countries beyond the fast-start finance period. We have allocated £2.9 billion in total for the comprehensive spending review period and, as I said in my statement, I very much hope that we will be able to make an announcement in due course when we have concluded the arrangements on the shape of the green climate fund.
Finally, the right hon. Lady rightly mentions the importance of working with our European partners. This is a particular example of the success of European diplomacy. As one member state we would not be able to achieve anything like as much as we have been able to achieve working closely with the other 26 member states and contribute to that with the undoubted expertise we have within the UK team. Importantly, when it came to the key negotiations, it was perceived in the plenary that the European Union was acting together, and that we were very much prepared to carry through on our threat. Often in these negotiations a good bit of leverage is needed, and we were prepared to carry out our threat that we would not go ahead with the second commitment period of the Kyoto protocol unless we had those key assurances that the future agreement would be legally binding.
In addition to the change that I described in the politics of the conference, it is highly significant that China, India and Brazil, but particularly China and India, have moved substantially in the direction of accepting that we need an overall agreement which will reach a global solution to the problem.
Tony Baldry (Banbury) (Con)
May I offer my right hon. Friend many congratulations on what has been achieved? Does he agree that one of the major achievements of Durban was that for the first time everyone in the world, including the major emitters—the United States, India and China—is now committed to the same process of a legally binding agreement? For the first time ever, everyone is going in the same direction towards the same objective. A simple machinery of government question is: will the funding for the green climate fund come from the budget of my right hon. Friend’s Department or that of the Department for International Development?
Chris Huhne
We have to determine the exact way we disburse money for the green climate fund. As I say, we will make an announcement in due course. My hon. Friend is right to say how important it is that everybody has signed up to that global agreement.
Barry Gardiner (Brent North) (Lab)
I congratulate the Secretary of State and his team on what was achieved at Durban. It was a vindication of the European negotiating position. Can he provide the House with further clarity on the climate fund money after the start-up period? Will he confirm that at least 50% of that money will be provided for adaptation and that the bulk of it will not go to mitigation, as was part of the original agreement? Will he also comment, please, on the gap there will be between the conclusion of the negotiations no later than 2015 and the 2020 deadline for implementation of those commitments? There is a perception in emerging economies that the earlier they conclude the negotiation, the bigger the gap will be in what those commitments deliver in 2020.
Chris Huhne
Let me answer the last part of that question first. The most encouraging thing is that we dealt with both time periods. There is a clear commitment to dealing with a single over-arching global agreement from 2020, but there is also a clear set of procedures—admittedly, there are no numbers yet—for addressing the emissions gap from now through to 2020, so the process will not stop in 2015. We have achieved great progress in getting real action. The contrast is often noted between Canada, which is a signatory to Kyoto protocol but is busting all its targets, and China, which is not bound on emissions but is doing an awful lot. We are able to do an awful lot and that is very important.
Adaptation is key and yes, that will be essential to the efforts of the green climate fund, particularly the public funding. It is much more difficult to get private funding for adaptation measures—that is much easier on the mitigation side. I expect that the publicly funded aspect will be higher than 50%. I draw the hon. Gentleman’s attention to the recent OECD report, which found that our existing commitments on and support for adaptation measures were among the best, and that will continue.
Andrew George (St Ives) (LD)
Notwithstanding the answer that my right hon. Friend gave the right hon. Member for Don Valley (Caroline Flint), what lessons can we take from the conference when negotiating international agreements? Does he believe that the UK’s contribution to this welcome outcome would have been made easier or more difficult had we adopted an isolationist posture?
Chris Huhne
The Prime Minister has made his position on other matters quite clear. On negotiations, from my experience in Brussels—I know that the Deputy Prime Minister had a similar experience when we were Members of the European Parliament—I can say that it is absolutely key that one has to be in the room where one’s interests are being affected. That is essential. In Brussels there is an adage that is one of the first rules of negotiating: if you’re not at the table, you’re on the menu. I have an awful feeling that we should bear that in mind in all aspects of international negotiations, but my hon. Friend can rest assured that when it comes to the UK’s participation in the United Nations framework convention on climate change, we were in all the key rooms at all times. At one point last year in Cancun, for example, I can assure him that we—[Interruption.] The UK delegation—the team. What generally happens is that the group of people who are deciding on the key compromises gets smaller and smaller. I can assure my hon. Friend that at every stage of the game, right the way through to the final huddle, the UK was represented. That is a central negotiating objective.
Mr Deputy Speaker (Mr Nigel Evans)
I gave a little latitude there, but I am not looking for an extension of the first statement.
Dr Alan Whitehead (Southampton, Test) (Lab)
I congratulate the Secretary of State on the outcome of a conference that was widely regarded as unlikely to succeed, even in the objectives that have been set down now. It is substantially because of the EU’s negotiating position and the British role in it that that very good outcome was achieved, even though there is a great deal more to do.
Will the right hon. Gentleman expand on the role of Connie Hedegaard, the EU Commissioner for Climate Action, originally from the Danish Conservative People’s party, in careful negotiation, keeping the parties together and making sure that the EU presented a united front and that no one withdrew from that? Will he confirm that the EU position, which I hope will develop up to 2020, will have the full-hearted participation of the UK as the new treaty approaches a conclusion?
Chris Huhne
Yes, Connie Hedegaard led the European Union efforts very ably, drawing on her experience in Danish politics and then in Europe. That was a critical part of the success. I reiterate, however, that it is not merely a question of finding the right negotiating strategy, which is what the European Union did. The EU understood from the word go that it was crucial that we move pressure on to the big emitters, China in particular, from the other developing countries and that we establish that new relationship with a substantial number of developing countries. That was ably led by Connie Hedegaard.
The other thing that I would highlight is that when one gets into negotiations and has a number of essential asks, the negotiating counterparties have to believe that one is serious and not going to buckle. In the past it has been the case that some of the more herbivorous members of the European Union have been taken as willing to buckle. We did not do that on this occasion and as a result we got every single one of our asks.
Zac Goldsmith (Richmond Park) (Con)
I, too, congratulate the Secretary of State on the progress that has been made, particularly given that I do not think anyone really believed that there would be progress. I also welcome the declaration relating to the Congo basin—the second largest tract of rain forest in the world—which was launched by the Minister of State, my hon. Friend the Member for Bexhill and Battle (Gregory Barker). The Secretary of State mentioned progress on reducing emissions from deforestation, and I was hoping that he could be a little more specific.
Chris Huhne
I pay tribute to my hon. Friend for his interest in that area and the work he has done. The Congo basin initiative is absolutely crucial. We aim to work with some interesting projects through bilateral support from the UK Government for some key forest nations, which will be in the Amazon, the Congo basin and Indonesia. Further progress was made through the technical achievements in the working groups, which he will find set out in the full agreement.
Caroline Lucas (Brighton, Pavilion) (Green)
The Secretary of State talked about the importance of monitoring. Monitoring is important, but so is action. I am deeply worried that, unless we see much faster action, we risk going down in history as the species that spent all its time monitoring it own extinction, rather than taking active steps to avoid it. The Durban agreement will not limit global warming to 2°, as he acknowledged, which means that we are on course for exceedingly dangerous climate change, so what will he do to ensure that the EU moves as fast as possible, unilaterally if necessary, to a 30% reduction target by 2020?
Chris Huhne
I am grateful to the hon. Lady for her question. Action is the most important ultimate benchmark of what we do, but I urge her not to underestimate the importance of knowledge in informing action. One of the key gaps that we need to fill in this area is regular reporting and attention on the gap between what we are doing and what we need to do to hold the global temperature rise to within 2°, beneath the level that would create dangerous climate change. I have had discussions not only with Marcin Korolec, the Environment Minister of Poland, which currently holds the presidency of the Council of the European Union, but with Martin Lidegaard, the Energy and Climate Change Minister of Denmark, which will hold the presidency for the first half of next year. I had good conversations with him in Durban and am confident that the Danes will bring forward some clear time within the Council to ensure that we make real progress towards some of the key staging posts in reaching 30%. Perhaps most progress will be made on the energy efficiency directive, because it should be relatively easy to agree and we know that energy efficiency measures tend to have benefits outright. We are thinking about how to do that and I hope that the European Union will be able to move forward on domestic action in the first six months of next year.
Jeremy Lefroy (Stafford) (Con)
I thank my right hon. Friend and his team for their work. What does he intend to do to encourage other countries to sign up to the green climate fund and follow the UK’s lead?
Chris Huhne
The power of example is quite powerful, as the Minister of State and I have discovered. We have substantial credit for what this Government are doing on development among African countries and other developing countries, and I think that that power of example is carrying over to other developed countries. I very much hope that others will join in helping to fill the green climate fund. A number of countries have already been prepared to make conditional pledges, including the Government of Korea, and I am sure that there will be others.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
At the most recent Energy and Climate Change questions I expressed my concern about progress in the negotiations. I would like to put on the record my tribute to the Secretary of State and his team for their work in helping to secure substantial progress. He mentioned the importance of monitoring and information in the period running up to 2015, but he will also be aware that there is a danger that things might go a little quiet after the negotiations in Durban and that in the run-up to 2015 there might yet again be last-minute political pressure and attempts to put decisions off to another day. What steps can be taken to ensure that there is an opportunity for a political focus from now until 2015 not only in the UK, but in other countries, to ensure that we have an agreement in 2015? For example, what review mechanisms are in place to allow politicians and Governments to have an impact on the negotiations to ensure that they result in the type of agreement we want in 2015?
Chris Huhne
The UNFCCC process provides numerous opportunities, including through the groups around it, such as the Major Economies Forum and the Clean Energy Ministerial meeting, which we will host next spring, in order to bring political leadership to the whole process. I was very encouraged by what happened at Durban and that the political leadership is increasingly there, and we need to build on that.
Jo Swinson (East Dunbartonshire) (LD)
I congratulate my right hon. Friend and all those involved in the negotiations in Durban on a very welcome outcome, especially after so many disappointing climate change talks. I wholeheartedly agree with the remarks of the hon. Member for Brighton, Pavilion (Caroline Lucas) on the need for the EU to step up its own emissions targets, but that will clearly be a challenge, given the global economic difficulties we face. Will my right hon. Friend tell us more about the progress being made on the Technology Executive Committee to promote low-carbon technology so that we can simultaneously boost our economy and reduce emissions?
Chris Huhne
Progress is being made in that regard. The key is to ensure that appropriate progress is made at different levels of development. Much can be achieved in some of the poorer developing countries where there are low levels of development by ensuring, for example, that people simply use more efficient forms of burning wood for cooking. We are making progress on the technological issue, but it applies at all levels of development.
Rushanara Ali (Bethnal Green and Bow) (Lab)
How much funding has the international community raised towards the $100 billion green climate fund and what international leadership are he and the Government providing to ensure that other Governments make a strong commitment to meet the goal of reaching the full amount urgently, rather than waiting for 2020?
Chris Huhne
Perhaps I should clarify that the $100 billion a year commitment relates to not only the green climate fund, but other sources of finance. It is obviously due when the agreement comes into force from 2020, but in the meantime we have fast-start finance. I have already said what our commitment is. A number of websites are available that add up where we have got to in relation to international pledges. I do not have the figure at the moment, but I will be happy to respond at the next Energy and Climate Change oral questions or to write to the hon. Lady with the latest information.
Glyn Davies (Montgomeryshire) (Con)
For a UN treaty on climate change to be meaningful and successful, all the major emitters in the world must be part of it, so it was encouraging to hear that the United States, China, India and Brazil are part of this agreement. How satisfied is the Secretary of State that the treaty obligations are legally binding, that those nations are not just paying lip service and that they will deliver on the commitments we are expecting?
Chris Huhne
The key point on legally binding treaties is that they are not a sufficient condition for dealing with the problem. We must have follow-through in national action, but such treaties are a necessary condition. I cannot think of any international problem that has been resolved without a legal framework. For example, the idea that President Reagan could have gone to Moscow and suggested that international nuclear disarmament or the strategic arms reduction treaty process could proceed with voluntary pledges would have been regarded as laughable. We have stressed, and will continue to stress, that the key objective is to ensure that this is done through a legally binding international treaty that provides everyone with an assurance that we are all moving.
There is a lot of national action. One of the great myths is that we are the only country doing anything, by which I mean that when I talk to fellow Energy and Climate Change Ministers I find that they all say, “But we’re the only country doing something.” In fact, there is a tremendous amount of action. One useful initiative I participated in was the launch of the GLOBE international study of parliamentarians interested in this area, which set out clearly the amount of action being undertaken through legislation right around the world. We will ensure that that process continues.
Mr Mike Weir (Angus) (SNP)
There is a gap between promise and delivery not only on emissions, but—as often happens at international conferences—on the amount of money pledged for funds. The green climate fund is important, because climate justice demands that many countries suffering from climate change need help now, but who does the Secretary of State expect to put money into the fund, how soon it will be in place and how soon will money be given to such countries to help them out? I am concerned about his comment that few countries other than the UK have contributed to the fund so far.
Chris Huhne
I should make it clear that no one has contributed to the green climate fund so far, because it has not been set up. The agreement at Durban, which after all was reached only yesterday morning at 6 o’clock, was to set up the fund, so the hon. Gentleman is being slightly churlish in expecting us to have sorted out all the details and got the fund up and running within 24 hours or so of reaching the agreement. I have no doubt that it will happen; there are a number of pledges already and, as I have said, we stand ready to make announcements in due course. I said to the hon. Member for Bethnal Green and Bow (Rushanara Ali) that I would write to her on the latest state of play on international commitments generally to fast-start finance, for example, and I am happy to copy in the hon. Gentleman on that answer.
Mr Graham Stuart (Beverley and Holderness) (Con)
As president of GLOBE in the House of Commons, may I thank the Secretary of State for attending the launch of the second GLOBE climate legislation study, which shows tremendous action taking place in many countries and most of all in developing countries? Does he agree that there is an enormous benefit to the UK economy from closer bilateral work with India and, perhaps in particular, China in the light of the visit, hosted by GLOBE recently, of Xie Zhenhua, the Chinese Minister with responsibility for such matters?
Chris Huhne
Yes, I agree very much that the relationships that we are increasingly building with China and India are very valuable and absolutely key to the agenda’s success. We have to make it clear that there is no conflict between the absolutely legitimate expectation of developing countries to be able to raise the living standards of their people and our need to protect our children and our grandchildren, and their children and their grandchildren, from the effects of climate change. One of the most passionate and moving speeches that I heard in Durban was from a Bangladeshi Minister, who described the real threat that there is to his country and to his people if we do not get a grip on climate change.
Mark Durkan (Foyle) (SDLP)
I commend the Secretary of State for his statement and the ongoing work that it reflects. He mentioned the resolution on a work programme to look at long-term sources of finance for developing programmes. When does he anticipate the programme commencing? Does he believe that the UK’s input will be on an EU axis, and do the possible sources of finance include in that context a financial transaction tax?
Chris Huhne
The work programme will kick off, and it is up to the UNFCCC secretariat to arrange the details, but I do not anticipate any time being lost in setting it up and getting it under way. The details of those represented on it will be settled through the process, but we as a Government are keenly interested and have a lot of expertise in the area, so I hope that we will be able to play a full part and, depending on how that is determined, be represented on any group that pushes the work programme forward.
On the financial transaction tax, the hon. Gentleman will know that we as a Government support financial taxes in general. We have moved on our own banking levy, for example, further and faster than other European countries, and we take the view that we can have further taxes on financial services, but that if such a tax touches areas that are very mobile, as a financial transaction tax obviously would do, it must be concluded at a global level. It cannot be done in only one country, because if it is the activity switches to other centres, and one simply loses out on all the revenue that one anticipated.
With that very important caveat of realism, the issue certainly has been talked about, but I do not believe that it is very likely to make progress, given the stand that other key parties have made against a financial transaction tax—and I am thinking in particular of the United States.
David Mowat (Warrington South) (Con)
The Secretary of State will be aware that in the last year of the previous Government we were 25th out of 27th on the percentage of our energy that came from renewables, ahead only of Malta and Luxembourg in the EU. Did that impair his ability to lead by example in Durban; and will he confirm that by the end of this Parliament we will have gone a substantial way to correcting that?
Chris Huhne
I thank my hon. Friend for that point. He is absolutely right that the record that we inherited from the previous Government placed us 25th out of 27 EU member states on installed renewables, and I am determined that, having worn the dunce’s cap for some time, we shall make all the best efforts to get out of the dunce’s corner and be the fastest-improving pupil in the class.
Points of Order
(12 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Caroline Flint (Don Valley) (Lab)
On a point of order, Mr Deputy Speaker. As we approach the Christmas recess, Her Majesty’s Opposition still await overdue answers to parliamentary questions: two from November, 10 from last week and 10 from today. Twenty of those are from the Department of Energy and Climate Change, so through your office may I ask that all measures are taken to ensure that written parliamentary questions are answered, so that we have the information to do our job well?
Mr Deputy Speaker (Mr Nigel Evans)
Members on the Treasury Bench will have heard the right hon. Lady’s plea, and I am sure that Ministers will do what they can to ensure that answers are forthcoming speedily. Of course, there will be other opportunities between now and the recess for her to pursue those matters.
Diana Johnson (Kingston upon Hull North) (Lab)
On a point of order, Mr Deputy Speaker. May I seek your advice on the answer that the Home Secretary gave me this afternoon at Home Office questions? It related to statistics to which the Immigration Minister and the Prime Minister have referred, but about which the chair of the UK Statistics Authority, Sir Michael Scholar, has raised concerns—in terms of breaching the statutory code of practice, the ministerial code and the published guidance on the handling of official statistics, issued by the Cabinet Secretary.
The Home Secretary used those figures again this afternoon, and in the light of that can you, Mr Deputy Speaker, request that the statistics to which she referred are now placed in the Library and fully published, so that all parliamentarians can scrutinise them? Currently, the Commons is at a disadvantage, as only the Government have sight of them and keep referring to them.
Mr Deputy Speaker
That is not a matter for the Chair. Ministerial answers are the responsibility of Ministers, but, again, Members on the Treasury Bench will have heard the hon. Lady’s plea.
Immigration
(12 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister for Immigration (Damian Green)
I beg to move,
That this House has considered the matter of immigration.
It is very important that the Government have found time for this debate today. Immigration is a big issue for many millions of people, and this Government, unlike their predecessors, are not going to sweep the debate under the carpet. It is very important, because immigration stands at the centre of what we want this country to be.
On the one hand, we know what benefits immigration brings to this country’s culture, society and economy. Many of our communities have been enriched by the contribution of generations of migrants, and it is absolutely right that in today’s competitive global economy we attract the brightest and the best to this country.
Barry Gardiner (Brent North) (Lab)
The Minister talks of attracting the brightest and the best to our country. I had a meeting with him a week or so ago about those brightest and best students who came to this country to study at the TASMAC business school. They have been subject not only to the fraud perpetrated on them by TASMAC, which went into liquidation, but to the Home Office now saying that they came to this country to study on one basis, namely that they would be allowed to work for 20 hours in the afternoon, but that that will no longer be admissible, given that they have to extend their visas because the college has gone bust. Does the Minister think that that is fair; and does he think that it is the way to attract the brightest and best in the future?
Damian Green
The hon. Gentleman is aware, because he has indeed had a meeting with me, that we must have rules in place. A huge number of bogus and fraudulent colleges have been closed down, one way or another. Of course, genuine students will have been caught up in that, and we give those genuine students 60 days to find a properly accredited college to move to. I think that two months is a fair time in which to ask people to find a new course. [Interruption.] The hon. Gentleman continues to chunter from a sedentary position, but he has to accept that we must enforce the rules and do so fairly; that is why we have the 60-day period. The alternative is to allow potentially bogus students to come here, or genuine students to come here and be exploited by bogus colleges. The tough action we have taken in this field is not only good for our immigration controls but good for genuine students who want to come here—the brightest and the best, to whom I referred—and who will no longer be exploited and defrauded by the bogus colleges that have existed for far too long.
Mr Frank Field (Birkenhead) (Lab)
The Minister said that one of the advantages of the system has been attracting the brightest and the best and the culture that they add to this country, but surely for us to benefit from their culture, they need to integrate with us. Are there not areas of the country where almost no integration has taken place and there are now serious political difficulties?
Damian Green
The right hon. Gentleman is right, and I will address that point later. Some of the measures that we are taking are precisely to promote integration. My colleagues in the Department for Communities and Local Government have their own strategy for dealing with that on the ground. Of course, immigration policy can contribute to integration by ensuring that those who come here can, for example, speak English. That is one of the changes in the rules that we have introduced in certain parts of the immigration system. It is an absolutely basic point that if someone wants to come and settle in a country, they should wish to integrate to some extent, and they should therefore be able to speak some English. I hope that the right hon. Gentleman agrees with that.
As I say, this country has clearly gained huge advantages from immigration, but on the other hand, the people of this country have a right to know that the Government are protecting their jobs, enforcing tough requirements on those who come here, and sending home those who break the rules. That is why three things are essential. First, it is essential to control the overall numbers coming here for long periods. Secondly, and equally importantly, we must establish a system that is properly selective among those who want to come here—one that brings to the country people who can support our development but keeps out those who cannot or will not. Thirdly, the system must properly enforce the rules.
Let me start by talking about the need for a focused, selective immigration system. The system that this Government inherited was not only chaotic but indiscriminate. The previous Government’s approach was about unlimited immigration, with no limits on tier 1 or tier 2 of the points-based system; tier 1 general and tier 1 post-study work for workers with no job offer; large numbers of supposedly the most skilled immigrants ending up in low-skilled jobs; little-used routes for investors and entrepreneurs; and no restriction on the length of stay for intra-company transfers. Since the points-based system was introduced in 2009, student visa numbers went up from 232,000 to a record 320,000. In 2010, the UK Border Agency had to suspend student applications in some regions because of abuse.
Our first task, therefore, was to impose some much-needed rigour. We have already looked at all the migration routes to ensure that they are selective in the ways that we want them to be—through work, study, family, and settlement by workers. We carried out public consultations on each one of those routes. By next April, we will have reformed them all so that they better meet the needs of this country. We have imposed an annual limit of 20,700 sponsored workers with a specific job offer. We have closed the tier 1 general route and replaced it with a smaller, more focused exceptional talent route. We have restricted tier 2 to graduate-level occupations and intermediate-level English speakers. We have restricted intra-company transfers to 12 months unless the person coming is earning £40,000 a year or more.
We have done the same sort of thing on the student routes. We have introduced tougher entry requirements requiring higher language competency and evidence of the ability to pay maintenance. Any educational institutions that want to bring in students from overseas will be highly trusted sponsors and will be vetted by the relevant inspectorate so that there will be proper inspections and proper accreditation in future. Post-study workers will need a skilled job offer under tier 2 if they want to stay in the UK. We have also consulted on reforms to the overseas domestic worker route. Some 15,000 visas are issued to overseas domestic workers each year, and we will restrict this in future. On the family migration route, we have consulted on new measures to tackle abuse of family migration; to promote integration, as I said; and to reduce burdens on the taxpayer. Within the next few months, we will bring forward proposals that will achieve all those aims.
Let me pause for a second on a point about the family route, because I should make it clear that the main benefit of this aspect of our reforms will be better community cohesion. No longer will people, usually young women, be brought half way across the world, with no knowledge of our language or our culture, to live lives cut off from the mainstream of British society. It is not fair on them, and it is particularly not fair on their children, who need mothers who can explain the world in which the children live in the language they use outside the home.
Settling in Britain should be a privilege, not an automatic add-on to a temporary way in. We are therefore going to break the automatic link between work and settlement. Only those who contribute the most economically will be able to stay. The Migration Advisory Committee has given us recommendations on how to achieve this.
Finally—
Chris Bryant (Rhondda) (Lab)
I thought that the hon. Gentleman might be going to say a little more about what the Migration Advisory Committee has recommended. It has suggested a lower threshold and a higher threshold, and I wonder which of those two he is aiming for.
Damian Green
I think that that comes under the heading of a nice try. The hon. Gentleman will have to wait until we have fully assessed the recommendations of the Migration Advisory Committee, and the House will be told at the proper time when we have come to a proper decision.
Finally, across the main routes we have raised the level of the English language levels required. Those coming to the UK across these routes must be able to speak sufficient English to play a full role in our society.
In 18 months, we have completely reformed vast tracts of the immigration system, and there are the first small signs—I agree that they are small straws in the wind because of the chaos we inherited—that our policies are starting to make an impact. The most recent published quarterly statistics for June to September 2011 show that student visas issued under tier 4 are down by 13% and main work visas are down by 18% on the same period in 2010. The very latest net migration figures to March 2011 are also encouraging, showing a fall since a recent peak for the year ending September 2010. However, I will not disguise from the House the fact that this is a long and difficult process. Net immigration was rising rapidly in the last three years of the previous Government. That is why we said at the general election that it would take the whole of this Parliament to bring it down to sustainable levels—to the tens of thousands annually that we think appropriate—and why we have been taking the necessary steps since day one of this Government.
Mr Frank Field
Is not the reason the net migration figures are disappointing that there has been a collapse of migration from this country? If the migration rates had continued at their former pace, the Minister would have had much more impressive figures to report. On the three reports that he is promising the House on families, on students and on citizenship, will he be a little more definite about when we will know what the Government’s plans are in this next stage of trying to tighten up on immigration?
Damian Green
The student changes have largely been announced. Those that did not come into force last April or October will come into force next April. I hope that within a few weeks of the House’s return we will be able to announce proposals on settlement and, following that, on the family route.
On the right hon. Gentleman’s first point, emigration has fallen and is at its lowest level since 2001. It may well return to trend at some stage. However, Government policy needs to be about controlling what we can control. Clearly, emigration is not under the direct control of the Government. Immigration numbers have only just started coming off the top, as I indicated a few minutes ago. The policies that I have announced will, over the years, bring that number down markedly. That is the main reason why I am confident that we can hit our targets.
Tony Baldry (Banbury) (Con)
All Government Members would acknowledge the chaotic situation that my hon. Friend inherited. One difficulty of that inheritance is the number of failed asylum seekers who were left by the previous Government and who are still here. I cannot believe that I am alone among colleagues in what I find when I investigate the immigration status of the people who come to see me. I discover that they have been told that they have exhausted all their remedies and have been advised to leave. Of course, they have no intention of doing so because they wish to remain in the UK and know that if they manage to remain here for a long time, there is always a chance that the courts will give them some right to remain here under human rights legislation. Therefore, this is a question not just of stopping the routes for people coming in, but of dealing with failed asylum seekers who have no right to be within the jurisdiction.
Damian Green
My hon. Friend is right. I will come on to the subject of removals shortly, if he can hold on. The other way to improve the asylum system is to ensure that it is faster. If we leave failed asylum seekers here for many years, as the previous Government did, they establish rights that enable the courts to leave them here. That is why I am so pleased to report that 59% of new asylum claims now get a decision within a month. The asylum system is completely transformed from what is still the public image of it. Indeed, half of new asylum claims are now entirely decided within six months. I assure him and the House that the asylum system is genuinely unrecognisable from the state that it was in a few years ago.
I talked about a selective immigration policy. It is not just about numbers. We want the brightest and the best to come here, and we want to support economic growth. That is why we have consulted business and the higher education sector so carefully on our reforms. On the work front, every month since we introduced the limit, the visas on offer have been undersubscribed. It is important for the House to know that not a single valuable worker has been prevented from coming here by our limit. To promote the brightest and the best, we made the investor and entrepreneur routes more attractive and accessible, for instance through an accelerated path to settlement. The latest quarterly figures show that the numbers for both investors and entrepreneurs have more than doubled compared with the same period last year. We have opened a new route for exceptional talent, through which applicants do not need a job offer but must be endorsed by a competent body as world-leading talent.
Britain has always been a nation with a worldwide reputation in the education sector. We want top students to come here. We cannot have world-class education if our institutions are closed to the outside world. That is why our changes to the student visa route are raising the standards for licensing colleges that sponsor foreign students. Only colleges offering a genuine, high-quality education will be able to sponsor international students in future.
Being selective is also about enforcing the rules robustly. Our border controls must be strong. The idea of the UK border starting at Dover or Heathrow is becoming increasingly out of date. Where it is appropriate, we will continue to export our borders so that they start at airports and visa application centres around the world. If people come through France, the borders may start at juxtaposed controls at Calais or Gare du Nord in Paris, or Brussels, rather than at Dover or St Pancras International. We are working hard with France and Belgium to ensure that people cannot exploit their Lille tickets to come to this country. We will continue to work with the authorities of other countries to align and strengthen border security arrangements. We now have a network of staff who work abroad with carriers to ensure that only correctly documented passengers are brought to the United Kingdom.
One statistic not often quoted about the UKBA is that last year it refused 385,000 visa applications. Every year, many thousands more people without the correct documents are prevented from boarding planes overseas in the first place. That is the best way to protect our borders, rather than waiting for people to come to this country, as we used to do.
Mr Russell Brown (Dumfries and Galloway) (Lab)
The Minister knows, from discussions that he and I have had, about the problem with southern Ireland. Can he tell the House how many people have been refused entry from the south of Ireland into the north?
Damian Green
As the hon. Gentleman knows, there are no border controls between southern Ireland and Northern Ireland because we all subsist in the common travel area. However, I am happy to tell him, as I think I have before in this House, that I am shortly to visit Dublin to sign a memorandum of understanding with the Irish Government that will strengthen the common travel area. He makes a valid point, from his constituency interest in the port of Stranraer, that we need to ensure that the common travel area is as robust as it should be. I am determined to do that and so are the Government of the Irish Republic.
Under e-Borders, we already screen more than 90% of non-EU flights and more than 55% of all flights into and out of the UK. We are continually extending the number of routes and carriers covered. More than 10,000 wanted criminals, including murderers, rapists and those responsible for smuggling drugs or humans into the country, have been arrested at the border as a result of such advance passenger screening. As a result of joint working with the French authorities and the use of improved technology, it has become even more difficult for clandestines to evade border controls. That has resulted in a significant reduction in the number of attempts to cross illegally from France to Dover from more than 29,000 in 2009 to 9,700 in 2010. That is a significant strengthening of our border between Calais and Dover.
To move on to the point raised by my hon. Friend the Member for Banbury (Tony Baldry), we are tackling those who come here illegally as well as those who have come for a limited amount of time and then not gone home. We are making life more uncomfortable for those people. Those who are not compliant in one area usually are not compliant in others. We are therefore working ever more with organisations such as the Driver and Vehicle Licensing Agency, the NHS and credit reference agencies to track people down and encourage them to go home of their own accord. We tell credit reference agencies about illegal immigrants so that they cannot easily access credit.
We are also focusing on criminals who facilitate people staying here illegally, such as sham marriage facilitators and passport factories. The UKBA and Her Majesty’s Revenue and Customs are working together to come down hard on rogue businesses that use illegal labour to evade tax and minimum wage laws. The first year of that joint work resulted in more than 130 arrests and potentially hundreds of thousands of pounds of tax liabilities for HMRC. A targeted campaign this summer saw more than 550 arrests. We are seeing the results. On 25 November, a Moroccan serial fraudster who used a fake identity to get British citizenship and claim an estimated £400,000 in benefits was sentenced to nearly seven years in prison. Last month, a Vietnamese woman was found guilty of conspiracy to facilitate and smuggle immigrants from Vietnam to Europe and was sentenced to five years in prison at Maidstone Crown court.
Mr Stewart Jackson (Peterborough) (Con)
Can my right hon. Friend confirm whether there are any plans to extend nationally the pilot scheme that is being undertaken in Peterborough to remove people who are not exercising their rights under the former worker registration scheme and the free movement directive? It has been very successful, with the UKBA working with both the local police and the local authority to remove those individuals, who at the moment are a burden on the public purse.
Damian Green
I am pleased to hear from my hon. Friend, who has a long history of campaigning on the issue on behalf of his constituency, that he has seen signs of the success of that activity in Peterborough. As he knows, the problem to which he refers is concentrated in particular areas, so we are not planning to roll the scheme out nationally. That would not be the best use of resources. We want to concentrate on the two or three areas in which that problem is most acute.
Apart from the successful arrests and prosecutions that I have talked about, we are also working to remove people more quickly to more countries. Between May 2010 and October this year, we completed a total of 68 special charter flights of people being removed who had no right to be here, which resulted in 2,542 removals. We are also tackling the problems of the past as they relate to foreign national prisoners. We are starting the deportation process earlier and removing foreign criminals quicker than ever.
Finally, being selective is also about protecting the most vulnerable. Britain should always be open to those genuinely seeking asylum from persecution. As I have said, the asylum system is demonstrably better than it was a few years ago. Over the past 15 months, we have reduced by a quarter the number of asylum seekers awaiting a decision on their application.
Barry Gardiner
I welcome much of what the Minister has said, but there appears to be a glitch in the legacy casework that is being cleared up, and I would be grateful if he addressed it before concluding his remarks. When those who have been locked in the last phase of the legacy casework are brought to the attention of the Home Office, instead of the Home Office addressing some of its failings that have left those people in limbo-land, it is fast-tracking them for deportation. The genuine concerns about how their cases have been dealt with have not been addressed.
Damian Green
I do not think I understand what the hon. Gentleman means about them being fast-tracked to deportation. That is a legal process, and among the powers that the Immigration Minister does not have—sadly, I sometimes think—is the power to decide how fast the courts operate.
Damian Green
I may have misunderstood the hon. Gentleman, so I give way to him again.
Barry Gardiner
Perhaps I did not explain the matter as clearly as I should have done. What is happening is that when a Member of Parliament makes representations on a case that has been outstanding, often for many years, and highlights times when the Home Office has failed to respond appropriately or has lost documents, the people in question are suddenly called in for deportation instead of the MP receiving a response that adequately addresses the past loss of documents or failure on the part of the Home Office. Basically, those people are taken out of the system by being taken out of the country, and the problem is not resolved or tackled.
Damian Green
If the hon. Gentleman knows of individual cases in which that is happening, I know he will be assiduous in writing to me on the subject. All I can sensibly say is that, as he says, there was clearly a problem. We have now investigated every one of the cases that was left as part of that terrible legacy, and the vast majority of people involved have received a decision. Somewhere between 10,000 and 20,000 cases are still live, either because there has been a long process or, in some cases, because people have reached the end of the road in their legal process, but there are some countries to which it is extremely difficult to remove people, for various reasons that the House will understand. As I said, if he has specific examples, he should let me know and I will take a look at them.
As I said, the asylum process is much better than it used to be, but there is still much that we can do to improve it further. We have specifically initiated an asylum improvement programme aimed at bringing about improvements in the speed, efficiency and quality of decision making. For example, we have introduced an entirely new approach to managing the return of families who have no right to remain in this country. The aim is to encourage and support families to leave voluntarily, with financial and practical assistance, without the need for enforcement action. The number of children entering detention at immigration removal centres and short-term holding facilities fell from 1,119 in 2009 to 436 in 2010 and to just 65 in the first 10 months of 2011. In addition, 14 children entered our pre-departures accommodation in Sussex from its opening in the middle of August to the end of October.
As I hope I have demonstrated to the House, we have taken vigorous and necessary early action to tackle the problem. I know how much passion it raises, and I know how many pressure groups hold strong views on all sides of the argument. We need to have these discussions. If mainstream, moderate politicians do not discuss immigration, we will leave the field clear to the extremists, whether the British National party, the English Defence League or the Islamists, whose only desire is to stir up hatred.
We in this House must lead and shape the immigration debate, and to do so Members of all parties need to have a clear basis for their policies. I will be generous to the hon. Member for Rhondda (Chris Bryant). I do not expect Labour to have a fully worked out policy yet, and I will refrain from teasing him by quoting the noble Lord Glasman’s view about Labour’s lack of honesty on the issue when it was in government. However, I think it is legitimate to ask one simple question. Does the Labour party think that immigration at current levels is too high? If it cannot or will not answer that question, it cannot play a serious part in this important debate.
As I have said, immigration can be beneficial to Britain, but the unsustainable levels that we have seen over the past decade have been damaging to our economy, our society and our country. That is why the Government are working so hard to get a grip on immigration and provide an immigration system that encourages the right people to come here and keeps out those who would harm us. It is not an easy task, and it will take years rather than months, but it is an absolutely essential task for the future well-being of our society. I can assure the House that the Government are implacably determined to get this right.
Chris Bryant (Rhondda) (Lab)
I will start with the issues on which I completely and utterly agree with the Minister. First, I agree that this is not an issue we should—[Interruption.] I am sorry, the Minister is wittering something, I think. [Interruption.] He is carrying on.
The Minister said that he believed this House should consider immigration on a regular basis, and he is absolutely right that if serious politicians in the mainstream political parties do not talk about immigration, we vacate the scene and leave it to extremists from other political parties and those who have no desire to foster good community relations.
Sometimes the debate gets heated, although I suspect it is not going to get very heated this evening if the proceedings so far are anything to go by. Some talk about immigration in this country is undoubtedly racist, but I have never subscribed to the view that just because somebody thinks immigration is the single most important political issue facing the country, that makes them racist. If I were to think that, I would probably be telling most of my constituents that they were racists. That is not because the Rhondda is full of people who have come to this country in recent years. In fact, I believe that of all the constituencies in the land it is the one where fewest people were born outside the UK, but that does not mean that my constituents are not directly affected by many of the issues that are enveloped in the whole issue of immigration.
There is a great deal of misunderstanding. Many have confused asylum with immigration, and serious politicians have always wanted to keep those issues apart, as the Minister for Immigration has.
I asked the Minister whether the Government had decided where they were going on the threshold salary that somebody should have if they were to bring in a dependant. He said it was a “good try”, but I asked solely because I thought the Government had an announcement to make today. I suspect that they were originally going to announce something, which was why they decided to hold this debate, but suddenly there were other important matters to be discussed, the announcement disappeared, and with it went the Home Secretary.
It is a simple fact that because world travel is now so much easier for the vast majority of people, there is inevitably more migration. People can physically move around the world and relocate, and many more do so. Occasionally—I am sure all hon. Members have heard of this in their constituency surgeries—people go abroad on holiday, meet somebody and fall in love with them and want to bring them back to this country. For that matter, my parents met not in this country but in Spain—they were both British—and came back to the UK.
Many other things have affected migration in recent years, not least the fact that countries that were once closed to the rest of the world have opened up, Spain being a classic example. Under Franco, Spain was closed to many, and people could not easily get a visa to go there or vice versa. Similarly, most of the eastern bloc of the EU was closed, as were Portugal and many other places.
In addition, the UK, which is primarily a trading nation, has always had much inward and outward migration. In Wales, we are particularly conscious that, at the turn of the 20th century, when there were no jobs in south Wales, many Welsh people went to live in Argentina, which is why there is a large community of Welsh speakers there. Indeed, William Abraham tried to migrate to Argentina but could not get a job there. He ended up coming back here and became the first MP for Rhondda.
The Minister referred to the fact that many British people go abroad, but it strikes me that British people abroad are often far and away the worst at integrating into local communities—one has only to visit Buenos Aires, where there are more piped bands than there are in Stirling and Edinburgh put together, to recognise that enculturation is not the primary focus of British people when they go to other countries.
For that matter, one has only to look at areas of south Wales to see that inward migration has been a vital part of the economic success of the past. Calzaghe is a not-unknown south Walean name, because people came from many places to work in the mines at one time. The English-Welsh word for a coffee shop is “brachi” because many thousands came from Badi in Italy in particular to work in the mines as that was where the work was. Likewise, many came from Ireland and even a few from England.
The problem, of course, is that migration has very many different vectors. It is not, as some have assumed, that migration to this country has been stimulated because we have a supportive welfare system or a strong NHS. In actual fact, the vast majority of migration is caused by elements that push people away from their home country, be that war, famine or political instability, which often leads to asylum. I remember a debate a few weeks ago with the Immigration Minister on migration from north Africa. He was optimistic that the situation developing in the Maghreb would mean that many fewer would come to the UK than were originally expected either for asylum or other reasons, but the most recent figures show that there has been a significant migration to the UK and a significant increase in the number of asylum cases. That issue will inevitably have to be kept under review.
One other potential vector, which other hon. Members have addressed on other occasions, is climate change. If the seas of the world rise because of climate change, there is a strong likelihood that some of the poorest people in the world will not only want to move but have no choice but to do so, because many of their homes are in the most exposed areas.
I agree with the Minister that migration is not always good. Very often, refugees end up extremely disoriented when they arrive in this country, either because their language skills are not brilliant or because they do not understand the system—they might not even understand what side of the road we drive on and things like that. I was struck by that the other day. There was a fight in Tesco Metro and a young man, who had clearly been drinking, was shouting at the shopkeepers, “You have no understanding. I am in this country. I am allowed to be in this country, but I am not allowed to work.” It turned out he was Albanian. Who knows how he will manage to get himself home? The pain of many of those who are forced to travel the world because they are simply seeking a better place for themselves can be writ large.
Often the receiving communities are ill equipped, either financially or culturally, to welcome people. When the number of asylum claimants in the UK was at its highest—not necessarily because of anything that had happened in this country, but because of factors in other parts of the world at a time of particularly unstable international relations—many communities in this country found it genuinely very difficult to take on board the number of people who went to live there, even though they wanted to be welcoming.
In addition—this is what I am most aware of in my constituency because a number of constituents have raised it with me—many feel that there are few jobs out there at the moment as it is, particularly at the lower end of the scale. There are few jobs for manual labourers, and when they get them, they are sometimes turfed out after just three or four months because somebody comes from another EU country and is prepared to do the job more cheaply. A constituent came to me last week. He was delighted when three months ago his son got a job in Gloucester—he travelled there and back every day—but then his son and the five others who were employed were sacked and their jobs taken immediately by people from Poland. The vast majority of my constituents simply do not understand why that should be so and feel that there is a fundamental unfairness in the system.
No hon. Member will today suggest that we should change all the EU’s provisions. Labour Members have already accepted that we should have introduced transitional arrangements for the countries that joined the EU more recently. We should have gone along with countries that did so, and we underestimated the number of people who would come to this country. Of course, two more countries will have full rights in 2014, and it will be interesting to hear the Government’s estimate of the number of people who will come to the UK from them.
Although it is easy to identify some of the problems in relation to immigration, it is not always easy to identify the answers. I have been lobbied quite ferociously by quite a lot of lesbian and gay organisations on what they term “gay asylum”, which is when somebody comes to this country because they will be persecuted for their sexuality in their country. Those organisations believe that nobody should be sent back to their country to face discrimination and a difficult life. Although I wholeheartedly agree that we should not send lesbian and gay people back to Iran to face almost certain imprisonment, it is very difficult to have a simple, straightforward open door for anybody who chooses to claim that they are lesbian or gay. I suspect that the problem is not as simple as people would want it to be.
Similarly, I raised the issue of family members coming to this country. Nobody in the House would believe that somebody bringing a spouse or a member of their family to this country should be able to do so and then put a burden on the state. The question though, as the Migration Advisory Committee has pointed out, is what placing a burden on the state means exactly. Does it mean that someone should not be in receipt of benefits or does it mean that at no stage in the future should that person receive anything from the state? That determines the level at which the threshold would be applied.
Some of the poorer constituencies and communities are of course concerned that the rule will allow rich people to go abroad, fall in love and bring someone back, but poorer people will not be able to do that. The danger is that the rule is unfair.
Bob Stewart (Beckenham) (Con)
The hon. Gentleman referred to being a burden on the state, which also makes me think of problems connected to education and the NHS. It is not just whether migrants are employed; it is also their need for services that we ordinarily expect for our citizens.
Chris Bryant
Indeed, and in a sense that is the conundrum that the Government have to try to resolve. At some point, they will obviously change the threshold from its present low level, but if they go for a significantly higher figure, the danger is that it will introduce an unfairness. The strange thing is that while people might be intrinsically opposed to individuals in general being allowed to bring others into this country, they tend to adopt a slightly different attitude when confronted by individuals that they have got to know.
The NHS also has specific needs in relation to migration. Several hon. Members have approached me about problems that their local accident and emergency units are having, because these days many doctors do not want to work in those units—there can be violence, many people are drunk and there is no ongoing care for patients. Many trusts, and many local health boards in Wales, have been looking to recruit internationally, but it is impossible for them to do so because of the way in which the rules are structured. That is placing a very precise burden on some accident and emergency units. Of course it would be better if we planned better so that we did not have skills shortages, but in some parts of the country they do exist.
Mr Stewart Jackson
We all believe in evidence-based policy making, rather than the anecdotal points that the hon. Gentleman is making. In that case, why did his Government, when they were in power, specifically prevent the publication of information in the form of research by the Department for Communities and Local Government that considered the impact of immigration on local services?
Chris Bryant
I do not have the faintest idea. If the hon. Gentleman wishes to write to me, I will try to give him a better answer. Yes, my point is anecdotal, in that the Government have a figure for certain forms of accident and emergency doctor provision in the whole of the UK, and there is no shortage across the whole country, just in certain areas. That is why we may need some tweaking to ensure that we are able to maintain the services on which we all rely. There are similar issues in relation to nursing, not least because one of the elements of migration that we must bear in mind is that many British nurses—although no statistics have been provided since 2008—are choosing to work in countries such as Canada, New Zealand and Australia. It is therefore difficult for us to plan precisely.
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
One of the challenges for the NHS is that many of the overseas students who come to study health sciences in our world-leading universities have been built into the staffing plans of our health services. That is partly where the gap comes from. I am concerned about the knock-on effect of our recruiting overseas and the brain drain from developing countries. It is important, however, that we do not pull the rug from under our NHS plans and those elsewhere in our public services.
Chris Bryant
The hon. Lady makes several fair points. She is right about not wanting to steal lots of doctors from other parts of the world, although people often want to work here for a few years and take their expertise back to developing countries—a positive contribution that we can make. At this very moment, the minor injuries unit in Llwynypia is closed because the accident and emergency unit at the Royal Glamorgan in south Wales is not able to recruit internationally. It has tried to recruit nationally several times, so there is a problem and we need to be able to plan for our services.
Universities face similar issues, because—as the Minister said—it is vital that the brightest and the best come to the UK to study. If they do not, we will not have the best universities and the brain drain will continue and cause long-term productivity problems. That is why some of what the Minister is suggesting in relation to the university route—the right to study in the UK—is right, although I wonder whether some specific elements need tweaking. For instance, it is suggested that someone should be allowed to do a course for only five years, with no extension to six or seven years unless they are already earning £35,000, but junior doctors are on about £29,000 and staff doctors on £34,000. There is therefore a danger in the Government’s proposals.
Tristram Hunt (Stoke-on-Trent Central) (Lab)
Is my hon. Friend aware of particular concerns in the Indian subcontinent about rules on studying in the UK whereby Indian students have to return immediately after graduation, when many of them would wish to spend a year working here to pay back their fee?
Chris Bryant
Of course there are concerns, but ensuring that students go home once they have completed their courses is an important part of what we need to do if we are to address migration issues. However, this should be based on evidence not on anecdote. My concern is that in some cases the evidence points to the fact that the vast majority of those doing further educational courses have every intention of returning and not of staying illegally.
The Government have fallen for some easy answers and have made a mistaken promise. The Minister rather skirted over the Government’s commitment, which is to cut net migration to tens of thousands—no ifs, no buts, as the Prime Minister said. The Home Secretary also said that the aim was to reduce net migration from the hundreds of thousands to the tens of thousands by the end of this Parliament, saying “Listen very carefully, I shall say this only once”, in her best “’Allo, ’Allo” accent. The only problem is that actually the figures have gone up. In the year ending March 2010 the figure for net migration was 222,000, and the year to the end of March 2011 saw an increase to 245,000.
The Minister said that there were only some parts of the equation that we could do anything about, but that he none the less remains committed to a net migration target. He can do something about net migration if he wants to persuade more British people to go and live elsewhere, but that is why we have some concerns about the precise way in which the Government have worded their target.
In relation to those who want to come to this country to work, the Government have used rhetoric that makes it seem as though there is a cap of 20,700 in total, but in actual fact, in the 12 months from the third quarter of 2010, 158,180 work visas were issued. Similarly, the number of tier 2 applicants who were successful in obtaining visas is virtually identical to that for the year before. As the Minister said, his cap has not yet cut into the numbers because it is relatively generous, but what is the point of the cap if nobody has yet been refused because of it?
In the first quarter since the new cap was introduced, 37,000 work visas were issued. The number of intra-company transfers, which the Minister condemned when we were in power, has gone up from 26,554 to 30,000 in July. My biggest anxiety about the Government’s record is illegal immigration. Contrary to the figures the Minister gave, the number of removals and voluntary deportations has been going down quite significantly since the general election. Between 2007 and 2010, the number was always above 60,000. In 2008, for example, 67,981 people were removed or voluntarily deported. In the nine months from January to September this year, the number was down to 38,865—a 12% fall on last year’s figures. There was no increase, as the Minister told us earlier, or as the Prime Minister said a few weeks ago. Indeed, the Prime Minister specifically said,
“illegal immigrants, 10% increase in arrests”.—[Official Report, 9 November 2011; Vol. 535, c. 278.]
That is completely and utterly factually incorrect. The figures show that in the third quarter of last year, 4,730 people were arrested. This year, the figure is 4,141—a fall of 12%; not an increase.
Similarly, the number of non-asylum cases refused entry at port and removed has fallen from roughly 7,000 a quarter to just 3,822 and a little bit more in each of the subsequent three quarters. In addition, this year the Government have engaged in an ill thought through and unconvincing pilot scheme, which effectively lowered the level at which our security was being guaranteed.
I raise those figures because we need to be careful about the use of statistics by this Government, especially by this Minister. Sir Michael Scholar, who attacked the Minister for releasing inaccurate and deliberately misleading statistics on drug seizures, said:
“The Statistics Authority considers that the fact and manner of the publication of the 4 November press release, in advance of the official statistics, was irregular and inconsistent with the statutory Code of Practice, and also with the Ministerial Code and published guidance on the handling of official statistics issued by the Cabinet Secretary.”
In normal parlance, that means that the Minister has broken the rules and should be sacked. In essence, that is what Sir Michael Scholar is saying. He says quite precisely that the Minister has broken the ministerial code.
When I wrote to Gus O’Donnell about this, he gave this answer in mandarin:
“The Home Office press office has also given assurances to the Department’s Chief Statistician that it will work more closely with statisticians and analysts to ensure that this oversight will not happen again.”
In other words, he is confessing that in the publication of statistics the Minister sought to mislead not this House but elsewhere.
Of the eight named day questions that I tabled at the beginning of November, not one has been answered, despite the fact that it is a full month after the date when they should have been answered.
I have some specific questions for the Minister. First, on family migration, what threshold income are the Government leaning towards for a person bringing in a dependant, and when will they announce it?
Secondly, the NHS has no details of the number of staff coming into this country and being employed by it either from within the EU or from outside the EU. It is difficult to form a coherent strategy on NHS staffing or immigration until such statistics are produced. Will the Government set about doing so as soon as possible?
Thirdly, has the Home Office done any specific analysis of the needs of accident and emergency departments around the country? The Migration Advisory Council is now suggesting that everyone on tier 2 visas should have a visa for only five years and that it should be non-renewable unless they are on £35,000 or more. Is that the view of the Government, and what effect do they think that will have on NHS staffing? Has any analysis been conducted of British nurses emigrating to other countries? Again, that is vital information if we want to ensure that we have proper staffing.
In addition, the Home Office estimates that there will be 70,000 to 80,000 fewer students coming into this country because of the changes in provisions. What estimate has the Minister made of the financial effect on colleges around the country, and when precisely do they expect to be achieving those numbers?
Furthermore, a consultation is under way on tier 5 of the points-based visa system, which proposes shortening visas from 24 months to 12 months. This scheme is largely used under the medical training initiative, which allows doctors from other parts of the world, particularly from developing parts of the world, to train in the NHS for two years. All those involved in the scheme say that if we were to cut the scheme to one year, people would not receive sufficient training to be effective when they go back.
A consultation is under way on the domestic worker visa. As the Minister has said in previous debates, when people come in on this visa, they are tied to an employer; they are terrified and are in virtual domestic servitude. They are treated appallingly with uncertain hours and uncertain pay. If, as the consultation suggests, they are unable to change their employer in future, there is a real danger that we will be consigning more people to domestic servitude and to a more difficult situation. When will the Government announce their policy on that?
My final question is on trafficking. Last year, the Association of Chief Police Officers stated that it was aware of 2,600 women being trafficked for sexual exploitation in this country—a much higher figure than the number dealt with in the system. Is it not time that we have a means of dealing with people once they have been trafficked and once the trafficking has already occurred in this country, and that we do more about using the Department for International Development’s budget and other budgets to ensure that people are not trafficked here in the first place?
Damian Green
I am grateful to the hon. Gentleman for giving way after his long list of questions. I asked him one, and in half an hour he has not even addressed the central issue. Does he think that immigration is too high at the moment?
Chris Bryant
The Minister has not said whether he thinks the figures are too high. As the Prime Minister is all too happy to say on very many occasions, it is for him to answer questions; it is not for us to do so.
We will support the Government on many things, but not on everything. We will support them when they seek to tighten the system against illegal immigration, international criminality and trafficking. We will also support them when they seek to ensure a robust and fair set of migration rules that do not undermine our economic prosperity or communal support for the system.
Nicholas Soames (Mid Sussex) (Con)
Uncharacteristically, I am losing my voice. If it finally runs out, I shall just sit down.
I thank my hon. Friend the Minister for so clearly setting out the Government’s position. He has brought immeasurable good sense to this very difficult portfolio. When I think that 10 years ago, a Labour Minister at the Home Office, Beverley Hughes, described me as being a racist for even having an Adjournment debate on immigration, I can see that we have come a long way.
As the hon. Member for Rhondda (Chris Bryant) said, it is important that we can discuss this serious matter in a clear, open, sane and humane way. I regret having to say that over the years of the Labour Government, what was already a problem turned into a really, really serious problem, and this Government now have to put right something that is of great concern to an enormous number of our constituents. In those terms, I warmly welcome this debate and thank the Government for making time for it. That is a clear recognition by them of the widespread public concern about the scale of immigration to the United Kingdom.
That concern was illustrated by the remarkable response to a Migrationwatch petition on the Downing street website calling for immigration to be kept below 70 million. One hundred thousand people signed it within a week. The right hon. Member for Birkenhead (Mr Field) and I are in touch with the hon. Member for North East Derbyshire (Natascha Engel), the Chairman of the Backbench Business Committee, about how this should be followed up, and we hope to have—indeed, the Committee has said that we can have—a specific debate early next year, after the Government have announced their measures on economic and family migration that are now under consideration.
Today, however, I would like to make three broad points: first, that the Government’s policy objective is clearly the right one; secondly that migration to Britain can and must be reduced; and thirdly that encouraging the outflow of non-EU migrants who no longer have the right to remain in Britain will be the key to further progress once the first round of measures is in place.
I congratulate the Government on their strategic decision to reduce the level of net migration to tens of thousands and on sticking to that objective. This is the first time in British history that any Government have had the courage to establish such a firm objective for immigration. Such an objective is essential. We need to be absolutely clear that after the rapid increase in immigration since 1997—a catastrophic public policy failure—we now face a fundamental choice: either we allow population growth to continue indefinitely, with all that it would imply for our public services, environment and society, or we take the firm and sometimes difficult measures to bring immigration under control.
Governments in Britain have traditionally been reluctant to talk about the size of our population lest they be the butt of puerile references to Chinese birth control policy. Nevertheless, we must face the fact that two thirds of our population growth is now a result of immigration. Yet this is the only component that is potentially under Government control. If, therefore, population growth is to be kept within reasonable bounds, immigration simply has to be reduced—and reduced substantially.
The most recent population projections from the Office for National Statistics underline that point. It has assumed that immigration will continue at a rate of 200,000 a year—about the average of the past 10 years—but if that level is allowed to continue, the UK population will hit 70 million in about 16 years and will continue rising indefinitely beyond that period. Given that neither of the other two components—the birth rate and the death rate—is likely to change very much in that period, this is a mathematical certainty.
It is sometimes claimed that the ONS projections have been unreliable. The immigration lobby dines out on an error that the statisticians made nearly half a century ago at a range of 35 years. Methods have improved greatly since then. Nobody claims perfect accuracy but, in fact, over the past 50 years, and at a 20-year range, the ONS population projections have been accurate to plus or minus 2.5%.
The figure of 70 million is not simply a round number; it is a marker by which we can judge the success or otherwise of our immigration policy. It also flags up for the public exactly what is involved. We are talking about an extra 7 million in 16 years, of which 5 million will be a direct or indirect result of immigration. The public are perfectly clear that they do not wish to see a population increase on anything like that scale, and it is therefore absolutely incumbent on the Government to take effective action.
In seeking to take such action, the Government have been criticised for choosing net migration as the objective of immigration policy. It is suggested—correctly, of course—that the Government cannot control British emigration or immigration from the European Union. A glance at the numbers, however, shows that those two flows have generally cancelled each other out. It also shows that the real problem stems from an imbalance in migration from outside the European Union. For the last seven years, we have had something like 300,000 such immigrants every year while only 100,000 have left.
Mr David Ward (Bradford East) (LD)
I think that we all accept what the right hon. Gentleman has said about immigration from outside the EU and about how immigration from within the EU is not controllable, but does he not agree that the behaviour of many Governments towards some of their own citizens—principally the Roma —in some parts of Europe is increasing the pressure on them to leave those countries and come here, because we treat them a good deal better?
Nicholas Soames
That is probably self-evidently true but it does not alter the fact that the figures remain correct, as I have said.
It is this 200,000 net migration of non-EU citizens that the Government can and must control. My second point, then, concerns how that control might be achieved. The focus must be on the largest flows: students, economic migration and marriage, in that order. Non-EU student visas are still being issued at a rate of almost 1,000 a day. There has clearly been massive abuse of this route, with literally hundreds of dubious colleges being closed down in recent years, and rightly so—I warmly commend my hon. Friend the Minister on the vigorous action that he has taken on this matter.
Nobody disputes the benefit to the higher education sector and to the British economy more generally of foreign students who come to study here and who later return home—many of them as lifetime and greatly valued friends of Britain—but it seems to me that there are three main problems associated with this area of immigration: first, in spite of the Government’s efforts so far, there might still be a number of bogus courses and colleges being used by students; secondly students are still allowed to do too many courses and a number of repeat courses; and thirdly a number of students, although here legally, overstay at the conclusion of their courses.
Bogus students are a serious problem. At the end of the day, they come here to work illegally and send money home, and in doing so they undercut British workers and allow unscrupulous employers to compete unfairly with employers who provide a decent wage and decent conditions. The Government are absolutely right to crack down on this abuse, but they now need to go further and ensure that in countries of immigration concern students are interviewed at posts overseas to ensure that they are genuine and that they intend to return home after their course.
Those are the two critical tests, but the present box-ticking system severely constrains the ability of entry clearance officers to conduct them and act on their findings. That must change and change soon. I also suggest to my hon. Friend the Minister that the UK Border Agency be instructed to visit many more of these colleges so that it can truly satisfy itself as to the infrastructure, staff and validity of the courses being taught. This is a major problem and I know that he is dealing with it with great vigour.
The second largest inflow is of economic migrants, and here I must stress that we must be extremely careful not to impede the economic recovery on which everything depends. British and international firms must know that they can bring essential staff into this country to develop and expand their businesses. They must also have stability and predictability if they are to operate effective personnel policies. Fortunately, the Government have taken that into account in allowing intra-company transfers of senior staff with no restriction on numbers. They have also provided 20,000 or so work permits a year, of which, under the current economic circumstances, only about half have been taken up. The Government are also now proposing to break the previously almost automatic link between gaining a work permit and achieving permanent settlement in Britain. That is a fundamental step and is a suggestion originally put forward by the cross-party group on balanced migration, which I co-chair with the right hon. Member for Birkenhead. The details still need to be worked out, and we anxiously await the Minister’s decision. However, we believe that the proposal will provide a means of meeting the needs of employers while also limiting the impact on population growth.
I suspect that much of the concern in the business community has stemmed from the interim arrangements put in place shortly after the election, which caused a great deal of confusion. The longer-term arrangements should now be allowed to settle down, to ensure, as I have mentioned, the predictability and stability that, in practice, are so important to both employers and employees. There should be no more talk at all about whether Britain is “open for business”. Of course it is: it always has been and it always will be. The 40 million foreign citizens who arrive in Britain every year are surely firm evidence of that. Not only is such talk wrong; it also damages the interests of business and this country.
The third major route is the family route. Clearly there can be no question of preventing British citizens from entering into genuine marriages with foreign nationals. However, the public interest is engaged when they propose to live in the UK. The Government are clearly right to ensure that those who choose to make their married life here should have enough English on arrival to participate from the outset in our community. I wholly endorse the remarks of the right hon. Member for Birkenhead, who is very sorry that he cannot be here tonight. He has made the point that there are large areas in this country where no integration has taken place, to the great disadvantage of the communities concerned, the communities surrounding them and the people living there who are not part of those communities. Those problems will cause great social disturbance in this country unless dealt with sensitively but firmly. We must ensure proper integration in future. The Government are also right to question whether the taxpayer should, in effect, subsidise marriage to a foreign partner. In addition, measures are needed to deal with cases where young people come under severe social pressure to marry someone resident abroad. More effective use of interviews could help in such cases, which fall short of forced marriage, but only just.
Thirdly, and lastly, the announcement of Government policies early next year will complete the first round of measures to address the scale of immigration. We must then watch how the numbers develop. There is, however, an important aspect to which we must shortly turn our attention. I refer to the outflow of non-EU migrants, which, as I mentioned earlier, has been substantially less than the inflow. That is due to large numbers staying on in Britain, either legally, by extending their stays, or illegally. We need to ensure that those extending their stay are doing so for valid reasons. The new Home Office policy of requiring students to progress to a higher level of study before their stay can be extended is a step forward. We also need much more effective measures to deter and remove those who no longer have any right to be here.
I have gone into a certain amount of detail, because this, as so often, is where the devil resides. However, we must not lose sight of the wider picture. Over the last 15 years, we have issued something like 2 million visas a year, but have had no record of individuals as they have arrived and departed. As a result, the Government have no idea who is in this country or why they came in the first place. A clear set of policies is now being instituted to attend to that. They must succeed. Failure would mean losing control over the scale and, indeed, the fundamental nature of our very society. We are also in serious danger of losing public confidence in the Government’s ability to protect and control our borders. That is a fundamental duty of Government which must be most resolutely addressed.
I am grateful for the opportunity to speak in this debate. Let me again tell my hon. Friend the Minister that I applaud the way in which he is tackling this difficult problem.
Mr Julian Brazier (Canterbury) (Con)
It is a huge pleasure and honour to follow my right hon. Friend the Member for Mid Sussex (Nicholas Soames), who has spoken out on this issue again and again, including when abuse was heaped on anyone who tried to do so. I also praise my hon. Friend the Minister, who has brought great energy to one of the most difficult briefs in Government. What I am about to say will be pretty bleak, frankly, but not one word of it should be taken as a criticism of the huge amount of energy and intellect that he has brought to his job.
It is curious, looking through one’s postbag, how many of the pressing issues facing Britain today—housing shortages, congestion on roads and public transport, water shortages, pressures on public infrastructure of every kind—derive largely from a single, common factor: population growth, to which my right hon. Friend referred. We are one of the most densely populated countries in the world, with 255 people per square kilometre. During the time of the last Labour Government, immigration policies encouraged an unprecedented influx from EU and non-EU countries, which has boosted populations in some urban areas to near crisis point. Between 1997 and 2009, after deducting the number of those leaving, more than 2 million extra people were recorded as settling in the UK, a surge that is unprecedented. However, for the first time, those figures were calculated without using embarkation records, so the true figure may be much higher. The ONS projections to which my right hon. Friend referred have been upgraded again and again. For example, in 2004 they indicated that by the middle of this century our population would reach 67 million. In just three years that projection was increased to 77 million, and it continues to rise.
I believe we need to look at gross rather than net migration figures, for several reasons. First, many of those leaving are elderly people, looking to spend their retirement abroad in the sun. In contrast, the vast majority of immigrants are young. First-generation immigrants typically have large families compared with indigenous families. There is a further, obvious point, which was well understood in this country until the middle of the last century, which is that because we are basically overcrowded we always used to have more people leaving, precisely to find homes in emptier lands. Today, housing pressures are caused by domestic factors, such as family breakdown, increased longevity and so on, which have led to smaller household sizes, so if we do not have a degree of net emigration, we will have to keep building more and more.
Chris Bryant
The hon. Gentleman’s last comment—that the reason many British people have gone around the world and settled elsewhere is because Britain is overcrowded—is factually wrong. The parts of the country from which many people left—Scotland and Wales—are the least crowded. In fact, they mostly went because there were no jobs in this country or, originally, because of religious persecution. It is nothing to do with overcrowding.
Mr Brazier
One can go back quite a long way, into religious persecution and earlier history, but we were very keen to encourage, for example, the Australians to keep an assisted package programme going for nearly two thirds of the last century. Much of that was precisely to reduce overcrowding. There was also a degree of internal re-location—for example, with the setting up of new towns outside London—but we encouraged movement abroad, as well as out of our major cities.
Everybody agrees that previous generations of immigrants have brought huge benefits, in such fields as business, science, sports and the arts. We all have friends from a variety of different communities. My family has particularly benefited from a doctor, without whom two of my sons would not be alive today, who is a recent immigrant. However, few people recognise the sheer impact of population growth on our country today, and I want to focus on two issues: housing and infrastructure.
The most serious social and economic issue facing middle and lower middle-income families in Britain today is the shortage of housing, and not just in the south-east where land is at the highest premium. The huge inflows of population that took place under the last Government are going to require very large releases of land, much of it countryside, even without any further population growth. Our house prices today, despite some fall from the peak during the recession, remain very high by international standards and, crucially, in relation to our falling incomes.
As the Prime Minister pointed out the other day, the average age of first-time buyers has risen to 37. Many families are now burdened for much longer than ever before with heavy mortgages, so adults have to work longer hours and for more years in an attempt to service those mortgages. An OECD survey showed a few years ago that a higher proportion of people in this country feel they are working more hours than are good for their family life than people in any other major country in the developed world.
Shelter paints an equally bleak picture of the rental market. More than half of local authorities in England have a median private rent for a two-bedroom house that costs more than 35% of median take-home pay. Families are forced to cut their spending on essentials—food, heating or whatever—to pay the cost of rent or the mortgage.
The Government have set out plans to revive building, which was at an all-time low at the end of the last Government, but that will have the knock-on effect of causing huge problems for infrastructure. The Environment Agency, for example, estimates that 5 million people live in flood-risk areas in England and Wales, and as climate change accelerates, that number will no doubt rise. Yet in a county such as mine—Kent—the majority of all land that does not fall into a protected category is now on floodplains, so much of the building we are going to have to provide to cope with our existing population, including the rise caused by the bulge in immigration, will have to be built on precious protected land or else more communities will have to be exposed to the dangers of flooding.
Water supplies in many parts of the country are under strain, too. In fact, our national average per capita is now lower than that of Spain and Portugal. As more water is abstracted from aquifers and rivers, the flow in rivers falls, killing wildlife and scarring the countryside.
Immigration is putting considerable pressure on our schools, too. A report by London Councils stated that on current projections, London is 18,000 places short. It is not just London. Between 1998 and 2010, the proportion of children in primary schools in England for whom English is not the first language very nearly doubled to 16%, and in inner London native English-speaking children are in the minority. The noble Lord Knight, until recently a Labour Education Minister, admitted that
“undoubtedly there can be problems”
in schools with large numbers of non-English speakers. That is massively to understate the handicap suffered by all the other children in those schools.
The number of arrivals from overseas registering with a GP has increased dramatically. One of the hardest hit NHS specialties has been midwifery, as birth rates have risen most sharply in areas where numbers of immigrants are high. When Labour came to power in 1997, one baby in eight was born to a foreign-born mother. That has now risen to one in four.
My hon. Friend the Minister for Immigration has put it well: the real questions are how Britain can benefit most from immigration and what controls do we need to maximise those benefits and minimise the strains. The last Labour Government—we still have not had an answer from the shadow Minister as to whether he believes immigration is too high—maintained that immigration was good for Britain and the British economy as a whole since immigrants boosted GDP. Of course it is true that on average immigrants pay more tax than they receive in benefits or consume in public services. Many, especially the kind of immigrants who came through in generations before Labour opened the borders, make a gigantic contribution, but taking an average disguises the bottom end of the spectrum.
Many of those who arrived in Britain under the last Government, particularly from the Asian subcontinent, were unskilled and joined often insular communities in which incomes were already low and in some cases the unemployment rate was near to 50%. Pakistani and Bangladeshi communities, for example, were those most likely to enter the UK through the family route after the primary purpose rule was dropped.
Baroness Flather, the first Asian woman to receive a peerage, caused outrage when she made a brave speech in the House of Lords. She said:
“The minority communities in this country, particularly the Pakistanis and the Bangladeshis, have a very large number of children and the attraction is the large number of benefits that follow the child.”
She went on to say:
“Nobody likes to accept that or to talk about it because it is supposed to be very politically incorrect.”—[Official Report, House of Lords, 13 September 2011; Vol. 730, c. 706.]
Of course it is true here as in countries all over the world that the trend is for birth rates in ethnic groups that integrate to go towards the national average. The problem, as the right hon. Member for Birkenhead (Mr Field) has pointed out, is that under the last Government we grew significant numbers of communities where there was no integration and no trend in birth rates or anything else towards the national norm. The whole economic argument has largely ignored the costs to the overburdened public purse in infrastructure and the loss of quality of life to the population, as overcrowding worsens.
There are powerful voices that welcome continued heavy immigration. Big business benefits from the arrival of large numbers of people willing to work, since they drive down the cost of labour at the expense of the living standards of the indigenous workforce; and the wives of the better-off are able to get help in the home at a fraction of a living wage for local people, but then they and their families are not usually struggling to pay their mortgages and watching their children’s education being destroyed in schools with dozens of languages.
Mr Ward
The hon. Gentleman has made two references to education and attainment in schools, about which I know something. There is no evidence that indigenous children for whom English is the first language suffer as a result of the presence of children with other first languages. The evidence to support that view is just not there.
Mr Brazier
I have just quoted the words of a former Labour Education Minister, and I will write to the hon. Gentleman if he would like me to find a study for him.
Mr Stewart Jackson
I am afraid that the hon. Member for Bradford East (Mr Ward) is incorrect. There is evidence to suggest that. The Minister acknowledged in a Westminster Hall debate earlier this year that children without English as their first language are 19% less likely to succeed in key stage 2 SATs. That is an important issue, particularly for primary schools.
Mr Brazier
I am most grateful to my hon. Friend. I shall not repeat the powerful point my right hon. Friend the Member for Mid Sussex made about students, but there is a very real issue to consider. At a time when the domestic take-up of degree courses is likely to shrink sharply, I suspect that the problem will grow more acute.
Middle-income and lower middle-income Britain is hurting: with long working hours, high levels of debt and rising prices in so many sectors, people struggle to meet their mortgages and rent payments and they see their standard of living eroded. There is a severe shortage of homes, and overcrowding in many schools, hospitals and prisons, too. We are trying to cope with the strains of a growing population. Infrastructure is also desperately overstretched in so many ways, with issues of flooding, water supplies, roads and land preservation looming.
We all recognise the huge contribution that moderate levels of immigration have made to this country in the past. I welcome the measures that Ministers and the Government have taken. I would argue, however, that the coalition has a long way to go on this issue. The heavy criticism from big business and elements from the left must not put them off. It is time to recognise that we must take much stronger action if we want to head off the most severe social consequences and a backlash orchestrated by some unattractive people in the extremes—not just from indigenous people, but increasingly from many concerned people in our settled ethnic minority communities.
Mark Simmonds (Boston and Skegness) (Con)
I recognise—as did the Minister—the significant historical benefits that immigration has brought to this country. However, I strongly agree with the direction of Government policy in this regard. I agree about the necessity to reduce the number of immigrants to tens of thousands by the end of the current Parliament, the necessity for migrants to be able to converse in the English language, and the necessity to clamp down on clear abuses, particularly those relating to student visas. I fear that yet more may need to be done if we are to get a grip on the issue, given that, as my right hon. Friend the Member for Mid Sussex (Nicholas Soames) rightly pointed out—or intimated—abuses are still happening in the system.
During the 18 months or so for which he has been in his post, the Minister has made a significant and positive contribution by trying to address major challenges following an almost complete abdication of responsibility in the years during which the Labour party did not even attempt to control immigration. The word “unlimited”, used by the Minister, encapsulates those years very clearly and accurately. However, we need a sophisticated approach in order not to deter people who constitute highly skilled additions to our work force, particularly in research science. I am thinking especially of stem cell research, the pharmaceutical industry and other scientific technologies about which I know there is great concern. We also need a sophisticated, and detailed, approach if we are not to deter students who genuinely come to the United Kingdom to gain some of their education, especially those from the emerging economies of Brazil, Russia, India and China who may be our future trading partners—or future political leaders, or other significant figures in those economies. They are the people who will go home and have a positive impact on their own countries in relation to the UK.
Dr Whiteford
The Scottish universities, which are mostly research-led ancient institutions, are competing with Canadian and Australian universities—the best universities in the world—for the best students. They are concerned about the tone of the Government’s new approach, fearing that it will deter students before they have even gone through the visa process.
Mark Simmonds
I understand the concern felt by the hon. Lady and the Scottish universities. I know that there is also concern about some of the main research universities in England, which I share. However, I do not agree with the hon. Lady about the Government’s tone. I think that the tone of the Immigration Minister has been absolutely right: it has been considered, thoughtful, measured and calm. The Minister has tried to strike the important balance between ensuring that we control immigration and ensuring that the right people come to the UK.
I want to make a slightly different contribution to the debate. Rather than talking about immigration in generic terms, I intend to talk—unashamedly and unapologetically —about my constituency, and about the impact that immigration has had on Boston. I do not mean immigration from outside the EU; I mean immigration within the EU and, in particular, from the A8 countries.
Let me explain to those who do not know the Lincolnshire town of Boston that its economy is focused primarily on agriculture, horticulture and the food-processing sectors, and on tangential businesses such as haulage. For some time migrant labour has been essential to the efficient working of the agricultural economy—not just in the fields but in the pack houses—and, increasingly, to that of the tourism industry on the east Lincolnshire coast.
My personal view is that those who have come from within the EU and are here legally and legitimately, paying taxes and making a contribution, should be welcomed into our communities, and that their contribution should be recognised. The shadow Minister, the hon. Member for Rhondda (Chris Bryant), was right to acknowledge that a mistake was made back in 2004 when this country did not adopt the derogation that was adopted by many other EU countries. That has, without question, exacerbated what was already a difficult problem. We must also ensure that migrants from within the EU who come here primarily to work are not exploited, and those who have been involved in stopping that exploitation—particularly the Gangmasters Licensing Authority—should be congratulated on their work. However, none of us must underestimate the pressures and strains on communities and those responsible for trying to deliver our public services.
When a country’s needs are assessed, the fundamental tenet must be the population of a particular area. I have long argued that public sector funding formulas do not reflect the population of my community, and I know that my hon. Friend the Member for Peterborough (Mr Jackson) has advanced the same argument in relation to his constituency. That is just as true of Boston as it is of Peterborough. The problem has been exacerbated by the last Labour Government’s manipulation of the formulae to enable them deliberately to transfer resources away from rural communities.
The House may be interested to know that in its recent report the Office for National Statistics acknowledges that the previous basis for calculating migration numbers—the labour force survey—was not good at capturing migration trends. The ONS uses a much more accurate assessment, even though I believe that it too is an underestimate. It includes calculations of national insurance numbers and flag 4, the patients’ register. Those data take account of children and of people over 65, which the labour force survey did not. It also acknowledges that only 50% of the migrant population register with a GP, and that one third of migrants may be missed. In other words, it already acknowledges that the new statistics that it produced about a month ago were an underestimate.
It used to be very difficult to base the numbers on evidence, but at last the ONS is starting to get to grips with the process. Its report confirms that between 2005 and 2010, the figure for Boston’s cumulative immigration was revised upwards to 218%, and that figure, which is the highest in the country, is not reflected in any funding formula. It is more than twice the percentage increase in the next local authority area, and that too is not reflected in any funding formula.
Boston is the only local authority outside London that has featured in the figures for the top 20 increases in immigration in each of the last five years. That is not reflected in any funding formula. Boston is second only to Newham in percentage terms when it comes to upward revisions of the 2010 mid-year population estimates. That is not reflected in any of the public sector funding formulae. The published projected population increase in the borough of Boston was 0.4% but, according to the latest ONS report, the actual figure is 8.7%. As I have said, I believe that that is an underestimate. None of that is reflected in the funding formulae. That raises serious questions about the capacity of infrastructure to cope and the efficient provision of public services.
There is a significant mismatch between the population and the funding that is supposed to cope, which leads to stress and tension in communities. I wish to give the House three specific examples of the impact, the first of which relates to the Lincolnshire police authority. Some in this House with long memories will recall the riots that took place in Boston in 2004, which were partially but not solely driven by migration issues and pressures. In November this year, a proposal was made for an anti-immigration march in Boston, to be organised by those with local concerns about the scale of migration. I must put on the record the fact that the organisers reflected responsibly on this when they heard that the anti-fascist league was going to march at the same time and that their march was sucking in extreme and far-right individuals who would not have been welcome in Boston.
Complex policing issues and additional costs are not reflected in the funding formula: community tensions; significant crime and disorder issues, although it must be said that the vast majority of crime in Boston and Lincolnshire is still committed by UK citizens; additional costs for interpreter services—6,500 hours’ worth in Lincolnshire in the 2010-11 financial year; and significant road policing issues, such as a lack of insurance and people not understanding our drink-driving laws. That is all in the context of Lincolnshire having the lowest number of police officers per head in the country and the lowest funding of any police force.
The second area that I wish to discuss is the health service. The proportion of births to non-UK mothers has more than doubled in Boston since 2001. That trend suggests that an increasing number of migrants are not transient and are choosing to settle in Boston and in Lincolnshire with their families. In 2001, 5% of babies in Boston were born to non-UK mothers, whereas the figure is now 35%—significantly above the national average—and 81% of those are from EU accession countries. That trend is accelerating, not decelerating. Last year, the borough of Boston had its largest number of national insurance registrations—nearly 2,500—with Lithuania and Latvia topping the nationality poll.
That creates pressures: migrant populations finding it difficult to access health services and mental health services, with all the subsequent, associated challenges; enormous strain on the sexual and reproductive health services; greater pressure on community services; language barriers; major causes of morbidity and mortality, which are especially driven by lifestyle choices; and severe pressure of local health service utilisation, especially at general practitioner surgeries and at accident and emergency attendances when migrant populations do not know how to access primary care.
The third and final example that I wish to give the House relates to the pressures on Boston borough council, which estimates that at least 10,000 more migrants are living in the borough than the official statistics state—The Times guide to the House of Commons estimates that there are 17,500 more. Considerable issues arise as a result, some of which relate to licensing, because operators from central and eastern Europe are now opening their own shops. They are of course welcome and perfectly entitled to do that, but they must operate within the law and they do not necessarily understand the law relating to the sale of alcohol. Several stores have had to be closed, and hon. Members will remember the tragedy that took place just before the summer recess when five migrants were killed in my constituency when an illegal still exploded. Other issues that have to be addressed relate to unlicensed taxis; environmental health—those issues are too numerous to mention, but they include the safety, origin, preparation and storage of food; a significant increase in noise complaints; antisocial behaviour; and illegal campers—single male foreign nationals of no fixed abode.
One of the real problems we have in Boston relates to the very good point that my hon. Friend the Member for Canterbury (Mr Brazier) made about housing. The houses in multiple occupation are a significant problem, particularly in the small streets with terraced housing that occupy the centre of the historic town in Boston. The council is hopelessly insufficiently resourced to deal with it and with the associated car parking and van parking problems.
Other hon. Members have dealt with the issue of primary education, so I have not even mentioned it. However, there are two or three primary schools in the centre of Boston where 50% of the pupils have English as a second language, and that causes intense educational issues. To be fair, the schools have had some support from Lincolnshire county council, but they require more.
In conclusion, Ministers must focus both on reducing net migration and on providing resources and support to communities with large EU-migrant populations—that is not regularly discussed. Ministers must adjust public sector funding formulae, insisting on accurate and fair funding that reflects the populations that are actually in a geographical area. I sometimes hear the argument that it is too complex to open the funding formulae up again. I do not accept that argument and the ONS report makes it very clear in which areas populations have dropped. We need to acknowledge that there must be a balance between populations and funding formulae and in the borough of Boston the imbalance is acute because there are insufficient resources to deal with the much-needed economic migration to drive economic growth in rural Lincolnshire.
Tom Brake (Carshalton and Wallington) (LD)
It is a pleasure to follow the hon. Member for Boston and Skegness (Mark Simmonds). He was perfectly right to draw attention to the time lag and the failure of funding formulae to adjust to cope with a different local demographic locally—a point that both our parties used to raise in opposition, and rightly so.
I do not want to prolong the debate about schools—the hon. Member for Canterbury (Mr Brazier) has just left the Chamber—but I benefited from an education in a French state school, where half the pupils spoke a foreign language, so I think that it is not the number of children with a mother tongue, per se, but the level of investment that is relevant.
I welcome today’s debate. The Liberal Democrats have not been scared of debating immigration. In the past, that has perhaps worked to our disadvantage and it might have been advantageous had we not debated the matter quite so openly. A number of Members highlighted the fact that the mainstream parties’ failure to be willing to debate such matters created a vacuum that others occupied. We are collectively reclaiming that ground and enabling measured debates to take place.
I shall not criticise Labour Members as I know that there are many demands on their time, but I am a little surprised by the rather sparse attendance on the Opposition Benches for this critical debate.
Tom Brake
I am not going to prolong the debate that I am having with the hon. Gentleman from his sedentary position—he can calculate the percentages in respect of the parties represented here tonight.
I welcome the fact that almost the Minister’s first words pointed out the benefits that immigrants bring to this country, as in a measured debate the benefits and disbenefits of immigration are discussed. I welcome the action the coalition Government have taken to close down some of the illegal routes used to get into the UK jobs market, especially the action taken to speed up the asylum process. It works to everybody’s advantage, including asylum seekers here, if that process deals with cases rapidly rather than allowing things to drag on for years. At the risk of offending my coalition partners, I must point out that that issue was not particularly linked to the previous Labour Government and that, historically, there have been issues with addressing asylum claims swiftly. Soon after I was elected in 1997—other Members who were elected at that time will remember this—I found that I was hearing about cases that had been under review for a number of years. I am pleased that we are now on top of that process.
I do not want to make general points about immigration, but I have a couple of specific points. Appropriately, the Minister mentioned the Lille issue and the attempts to enter the UK without the appropriate documentation. I hope that the Government have looked at whether other routes are being used in that way and whether, as new transport links are set up, other routes might suffer from that problem. I hope that we are addressing that issue.
The Minister pointed out that the coalition Government have dealt significantly with a blot on Labour’s record—the number of children being detained. We have largely addressed the detention of children pre-departure, but there might still be an issue with reducing the number of children detained on entry to the UK and the length of time for which they are detained. Some organisations have suggested that there should be no detention of children on entry, but that would mean operating an open border policy, which the Government, rightly, are not doing. If that policy were adopted, it might lead to children being trafficked here by people who were not their parents. The Government should aim to minimise the number of children detained on arrival in the UK who have to be returned.
The biggest challenge for the Government is, perhaps, that of overstayers and people who are already here illegally. The Minister has set out a number of measures that the Government are taking in that respect. There is still a major issue regarding the number of employers being prosecuted. As long as employers are willing to employ people illegally, that will act as a magnet, so any other activities that the Government can undertake in that area would be very welcome.
The hon. Member for Boston and Skegness said that we need a flexible system of immigration to ensure that we have the skills we need coming into the UK. The Minister might be aware of some recent research by the London chamber of commerce and industry, which found that nearly a quarter of the companies that responded to the survey had looked outside the EU for staff because they believed that employing a non-EU migrant would help them to grow into markets beyond the EU. It will be to the advantage of the UK and our export-led recovery if, on occasion, we allow people with appropriate skills from non-EU countries to enter the UK jobs market.
The Government are looking at safeguards for overseas domestic workers. Members might be aware that it is often very difficult for domestic workers who are brought here and, in different ways, abused by an employer to get out of what sometimes amounts to unpaid servitude. I welcome the fact that the Government are looking at this, and I hope that we will be given some information tonight or later about the safeguards that the Government are looking at introducing for overseas domestic workers who experience abuse from their employer.
Chris Bryant
There are two suggestions on the table: that the visa should be completely abolished, and that an employee would be tied to the employer who brought them in and would not be able to change employer. Surely the second of those suggestions would make it more likely that people would be caught in servitude.
Tom Brake
I thank the hon. Gentleman for his pertinent intervention. The Government need to explain what safeguards will be in place for a worker who comes here, is linked to one employer and has no alternative but to work for them.
We need an immigration system that is flexible, fair and secure, and the coalition Government are moving swiftly in that direction. Our ability to sell to the wider population the benefits of immigration that is helpful to the UK depends on the coalition Government being able to demonstrate that we, and not the people traffickers, are deciding who comes to the United Kingdom.
Mr Stewart Jackson (Peterborough) (Con)
It is a pleasure to follow the right hon. Member for Carshalton and Wallington (Tom Brake). Much of the discussion in the debate tonight is based on anecdote. One of the problems is that we have not had an opportunity recently to look at fact-based evidence. We can all unite around the idea that if we do not debate these issues in a moderate and mainstream way, the extremists will polarise people and drive wedges between our communities. They would like nothing better than to propagate violence, hatred and dislike among communities of different ethnic groups, religions, creeds and so on.
Not since the House of Lords Select Committee on Economic Affairs undertook a proper analysis in 2008 has there been such a study enabling us to identify the costs and benefits of large-scale immigration. It would be remiss of those on the Government Benches not to mention the lamentable policy of the previous Government. I hope the shadow Minister or his hon. Friend the Member for Kingston upon Hull North (Diana Johnson) will come to the Dispatch Box to ask the philosophical question that will inform Labour’s view, if it is developing policy to be a future Government—whether it believes that immigration is too high or not. That is a question that voters are entitled to ask and to which they are entitled to receive an answer.
I pay tribute to the work of the cross-party group on balanced migration and the work of my right hon. Friend the Member for Mid Sussex (Nicholas Soames) and the right hon. Member for Birkenhead (Mr Field), who have done a great job, ably supported by Migrationwatch. For nine years Migrationwatch has ploughed a lonely furrow, having been traduced as racist and as having some kind of hidden agenda to propagate community discord. Nevertheless, it has concentrated on the facts and more often than not been right in raising the tenor of the debate and allowing mainstream politicians to debate in a meaningful way based on facts.
The facts have not been good for the previous Government. It has fallen to the present Government to clear up the mess and the legacy of uncontrolled, unrestricted immigration. As my right hon. Friend the Home Secretary has said, 2.2 million people net entered the country between 1997 and 2009. We have not yet had a proper analysis of that, although in fairness the right hon. Member for Morley and Outwood (Ed Balls) was honest enough to say after the general election, about the immigration from eastern Europe, that
“there has also been a direct impact on the wages, terms and conditions of too many people . . . in communities ill-prepared to deal with the reality of globalisation, including the one I represent. . . As Labour seeks to rebuild trust with the British people, it is important we are honest about what we got wrong.”
If I was a cynic, I would say that is because the Opposition lost the election, but people now look to them to put flesh on the bones and to develop the mea culpa of the right hon. Member for Morley and Outwood.
Chris Bryant
Having heard many confessions in my time, I am not going to give a lengthy mea culpa. We have already said that immigration was too high, which was in part because we got the element resulting from countries joining the European Union wrong and did not introduce a points-based system soon enough. In answer to the hon. Gentleman’s question, yes of course we think that immigration has been too high and that it should be lower.
Mr Jackson
I am grateful to the hon. Gentleman for that, but there is a more insidious element to Labour’s proposals and its record in office, which was articulated by Mr Andrew Neather, a speech writer for Tony Blair, who was famously quoted as saying that the idea was to rub the right’s nose in mass immigration in order to make a political point. It was a systematic policy of mass migration pursued by the previous two Prime Ministers and the Labour Administration.
Mr Jackson
I will make some further progress.
The House of Lords Economic Affairs Committee found in its report on immigration, the most comprehensive such report brought before Parliament in the past 10 years, that
“we have found no evidence for the argument… that net immigration… generates significant economic benefits for the existing UK population… The overall fiscal impact of immigration is likely to be small”.
That might be true, but we do not know because there has not been a sufficiently robust analysis, which would be interesting, by either the Government or other academic bodies. What is certainly not in doubt is the public support we have for pursuing a robust, fair and transparent immigration policy. Last month YouGov polled the British public and found that, on a proposal to restrict net migration to 40,000 a year, which would prevent this country’s population growing to 70 million by 2027, 69% supported the idea and only 12% opposed it.
I support the range of policies pursued by the Minister, who has been open and collaborative on the concerns that hon. Members have in their constituencies, for example on student visas, family migration, income thresholds, language proficiency, temporary workers and promoted integration. However, I wish to speak in a similar vein to the comments of my hon. Friend the Member for Boston and Skegness (Mark Simmonds), who in a measured, well-argued and intellectually coherent contribution identified the issues we have in Peterborough, although I will not reiterate his points exactly.
Let me tell hon. Members a little about education. I secured a debate in Westminster Hall, to which the Minister of State, Department for Education, my hon. Friend the Member for Bognor Regis and Littlehampton (Mr Gibb) replied, in which I proposed incorporating the number of pupils for whom English is an additional language as a key factor in the pupil premium. In those areas where there are pressures specifically as a result of eastern European migration—there are probably fewer than two dozen such areas—the need for extra resources as a result of language difficulties should be factored in. For example, in the academic year 2010, of the 528 pupils at Beeches primary school in the central ward of Peterborough, only six spoke English as their first language. There are many such schools in Peterborough, although not necessarily at that level, but close to it. That will inevitably have a massive impact on educational attainment simply because the resources needed to bring all those children up to the appropriate standard will be significant.
Another concern relating to education that we must not forget is churn. Many of the low-wage and low-skilled people who work in horticulture, agriculture and food processing and packaging in Boston and Peterborough come here for short periods, which disrupts their children’s education. For instance, overall in Peterborough, 4,767 pupils—31%—did not have English as their first language. Of 2,103 pupils with key stage 2 results, 21% were not in the city at the beginning of their school year, and 22%, or 450 pupils, were in the foundation stage but were not put in for key stage 2 SATs. That one simple example is important in terms of the training, expertise, skills and knowledge of the teachers required to teach those children.
I shall draw the Minister’s attention to some specific issues. On the A2 accession of Bulgaria and Romania and, particularly, the moratorium on the free movement of labour, it would not be appropriate to change in 2013 our policy on that restriction. It is an extremely important issue, because the potential mass migration of large numbers of low-wage and low-skilled people from Romania and Bulgaria would have a significantly negative effect on the UK labour market in 2013, and I welcome the preliminary findings of the Migration Advisory Committee in making that clear to Ministers. Serious consideration should be given to derogation for a further period—perhaps to 2015 or 2017.
On the interrelationship between the Home Office and the Department for Work and Pensions, we must clarify the issue of the right to reside and the habitual residence test, particularly the operation of the Immigration (European Economic Area) Regulations 2006. The House of Lords Merits of Statutory Instruments Committee, in its 26th report, found that the DWP had done insufficient work in looking at the impact and ramifications of the end of the workers registration scheme, and that is important in terms of people’s access to benefits such as jobseeker’s allowance, pension credit and child tax credit.
I am concerned, too, about the European Commission infringement proceedings and its reasoned opinion, which essentially breaks the social contract, established over many years in this country, that one does not receive benefits unless one has a demonstrable link to this country and has paid taxes to this country. I draw the House’s attention in particular to the case of Mrs Patmalniece, a Latvian woman who claimed pension credit, having never worked a single day in this country. That cannot be right for my constituents or for the constituents of any hon. Member.
I am concerned also about criminal records data in the European Union, because in respect of sharing such data we are not properly using regulation 19(1B), which came into effect in June 2009 as an amendment to the 2006 regulations. If we are using it, we are doing so reactively. It is not right that someone with a criminal record can get on a coach in Lithuania and turn up in Boston, Peterborough or any other urban or rural centre in the United Kingdom.
Mark Simmonds
My hon. Friend is, as always, making a well informed and articulate contribution. Is he aware of the recent case in my constituency, where a Lithuanian gentleman, who had been convicted in Lithuania of an axe murder, turned up in Boston and killed a lady, and that it was not until he was convicted in a British court that the information came out? My hon. Friend is making the pertinent point that we should put in place structures to stop people with such convictions entering the UK in the first place.
Mr Jackson
I thank my hon. Friend for that helpful intervention.
I know the Minister will tell us that the Schengen information system, SIS II, is coming down the line, and that we will be able to share criminal records data across all 27 nations of the European Union, but that will not happen until 2015. We have the power at the moment under regulation 19(1B) to exclude people in respect of public policy, public security and public health, and we should look again at being much more pro-active in that respect.
Non-European Union immigration is a massively important issue on which we made a bond of trust in our manifesto at the election. It was the No. 1 issue on the doorstep in my constituency. Let us not forget the important impact of eastern European immigration on local authorities, health authorities, primary care trusts and police services across the country. The Government are doing a good job and going in the right direction. We need a policy towards immigration that is based on fairness to individuals and to the taxpayer, and we need transparency. Above all else, we need to clear up the appalling legacy left to us by the previous Government.
Christopher Pincher (Tamworth) (Con)
I must admit that I was planning not to take part in this debate because very little has been said with which I disagree, but I decided not to let that stop me, so I shall continue and make some generic points as briefly as I can. It is unfortunate and ironic that so few Members are present for this important debate, which is of concern to many of our constituents, but I put that down to what one might call statement fatigue. I trust that it in no way reflects on the stellar cast of speakers on both Front Benches from whom we have heard and will hear during the course of the evening.
We all know that this is a very important debate. When we speak to our constituents on the doorstep or on the phone, or meet them in our surgeries, we know that they are concerned about immigration. I recently ran a survey in my constituency, and I would say that about seven in 10 people mentioned immigration as one of their top five concerns. It is an issue that our constituents talk about, but for a very long time we in this place have not talked about it. I pay tribute to my right hon. Friend the Member for Mid Sussex (Nicholas Soames), to the right hon. Member for Birkenhead (Mr Field), and to organisations such as Migrationwatch UK for wresting this issue from the arms of extreme, unsavoury voices and bringing it back into the mainstream, where it should properly be debated. I hope that we shall continue, year after year, to debate it in this Chamber in order to represent the very real concerns of our constituents.
There is no doubt in my mind that immigration has enriched our country culturally and intellectually. People have come here and founded businesses, employed people, and created empires. They have helped us to become the country that we are; we are a nation of immigrants. However, we have, over a number of years, allowed the notion—the myth—to grow up that there is some unalloyed benefit in allowing uncontrolled immigration to our country.
The hidden economic costs of uncontrolled immigration are becoming clear. We are told that cheap labour is a good thing—and of course immigrants are cheap. They do the jobs that nobody else wants to do, they take a wage that nobody else wants to take, and they keep costs down. However, although uncontrolled immigration may put a cap on wage inflation, it also puts a cap on productivity. Businesses that can benefit from cheap workers have no incentive to be more productive. In the long term, that is not a sensible economic model. I hope that the Government will take further action to crack down on businesses that use illegal immigrants—to find them and to make sure that those illegal immigrants are deported in order to send a message that there is no future and no profit in this sort of thing.
My right hon. Friend the Member for Mid Sussex (Nicholas Soames) recognised the phenomenon that is created by the large volume of cheap labour in his constituency. It creates resentment among hard-working workers and jobseekers who cannot get a job or the wage that they would like because of the volume of immigrants. Polly Toynbee, hardly an acolyte of the right, has also complained about that phenomenon. The House of Lords, hardly a home of the left, has recognised that large-scale immigration can have an impact, particularly on youth unemployment. A quotation in its 2008 report states:
“Given the age and skill profile of many of the new immigrants, it is possible that ‘native’ youngsters may have been losing out in the battle for entry-level jobs.”
That is of real concern to us. It is certainly of real concern to people who are looking for work.
The House of Lords has also pointed out that there is an issue with our infrastructure. As my hon. Friend the Member for Canterbury (Mr Brazier) said, housing and transport are put under greater strain by uncontrolled immigration. It is no coincidence that in the years after 2002, which saw the greatest increase in immigration, there was a 60% increase in the number of people waiting on social housing lists. Immigrants who have been here for a period of time are 30% more likely to be living in social housing than those born in the UK. That creates resentment and fuels a feeling of futility. Many people see the 3 million jobs created between 1997 and 2010 by the previous Government as a success, but 75% of those jobs were taken by immigrants. What message does that send to young people in this country?
People are angry. They are angry that the previous Government did not seem to listen to their concerns and they are worried that the present Government may also ignore their concerns. I hope that in his remarks, the Minister will put front and centre the importance of telling people what the Government are doing to deal with uncontrolled immigration, such as the cap on the number of skilled workers coming into the country; the zero cap on unskilled workers coming into the country; and the desire for, and insistence on, language skills among spouses so that they can integrate and contribute to society. Those are important messages that the Government need to recapitulate time and again, so that the constituents who talk to us about this issue understand that the Government are doing something about it.
Christopher Pincher
My right hon. Friend makes a pertinent point. He pre-empts what I am going to say next.
We have talked in this debate about the importance of controlling the supply side of immigration by stopping people who wish to come to this country from doing so. It is also important to deal with the demand side of the equation. Our welfare system—that is rather a neat and organised way of describing the mess that we inherited—costs us £194 billion a year. It pays hundreds of thousands of people not to work and keeps them trapped in dependency and on welfare because it is not worth their while working. Is it any wonder, therefore, that employers need to plug the labour gap by importing people to take the jobs that people on welfare cannot or will not take? It is economic madness to pay people not to work while importing labour and placing a strain on our infrastructure in so doing.
My right hon. Friend is absolutely right to say that we need measures such as apprenticeships to get our indigenous young people into work, and we also need to ensure that the welfare system, the Work programme and universal credit get young people and those who are long-term unemployed into work. That will choke off demand from employers for imported labour. The checks at our ports and airports and the other rules that the Minister for Immigration has put in place will also choke off the supply side of uncontrolled immigration.
I believe that the Government have got the balance right. The message that the Prime Minister gave during the general election campaign, when he said that he wanted to deal with immigration so that it was no longer an issue for the British people, showed sound judgment. I look forward to hearing what the Under-Secretary of State, my hon. Friend the Member for Old Bexley and Sidcup (James Brokenshire), has to say, and I hope that he will say it in such terms as to give the British people confidence that the Government are going to take control of the issue so that it does not lie dormant, untouched and taboo, as it did for so many years.
Gavin Barwell (Croydon Central) (Con)
I welcome the Government’s making time for a debate on this subject. It is a sensitive issue but, as the Minister for Immigration said in his introductory remarks, it is one of major public concern, and if the main political parties do not address it, we leave space for extremists to flourish.
Concern about the issue has risen up the political agenda during my political lifetime, and one has only to look at the Library paper on migration statistics to see why. Almost as soon as the previous Labour Government came to office, there was a significant increase in the level of immigration. The hon. Member for Rhondda (Chris Bryant) sighs wearily, but one has only to look at the chart in the Library brief to see that effect. Over the course of the Labour Government’s time in office, immigration into this country doubled.
Gavin Barwell
I would give way to the hon. Gentleman, but a number of other Members wish to speak, so I am going to restrict my remarks to seven or eight minutes.
Also under the Labour Government, net migration increased fivefold to 250,000 by 2010. That gave rise to two major concerns. The first was about population growth and pressure on services, and Members have spoken a lot about that in the debate. This morning I visited a project called the Well in my constituency. It is run by the Salvation Army, but a number of different public agencies are involved in it. It deals with people who are either sleeping rough, sofa-surfing or have profound housing difficulties. They often have mental health, alcohol or drug problems as well. It was interesting to see both at that project and at the Nightwatch scheme in Croydon, which provides food parcels to people who are in profound housing difficulties, that there were a significant number of people from eastern Europe in need of those services. They came to the UK looking for a better economic future but have not found it, but they are unable or unwilling to return.
Immigration has given rise to a second concern, which has not really been referred to in the debate because it is not part of the polite political discourse. If we are honest, there are people in this country who feel that their local community has changed demographically during the course of their lifetime and is not the place that it used to be. That is not my view of my local community, but when I canvassed door to door in the run-up to the election, I found that there were people who felt like that and we need to recognise that.
Both those effects are increased by the fact that the impact of migration in our country is particularly pronounced in certain parts of the country. About 12% of the UK population as a whole were born abroad, but in Greater London that figure rises to about 36%, and in some London boroughs it is even higher than that.
That concern about migration led to one particularly damaging effect in some of our communities. When the Conservative Government left office in 1997 there was not a single British National party councillor in this country but, as a result of the huge increase in migration, a number of extremists were elected to public office. Thankfully, the number is now declining again.
Before I touch on a couple of further measures that I should like the Government to take, I wish to set out my views, because it is important for a Conservative representing a demographically highly mixed part of London to recognise that in the past the Conservative party has been perceived, to some degree rightly, as unwelcoming to people from overseas who have tried to settle in this country.
My view is very much that immigration is a good and necessary thing. If we examine our population, we see that the baby boomer generation is ageing and that if we do not bring in some people of working age, we will have fewer working people supporting more pensioners. If we believe in the UK as a global trader, we clearly need to have links with countries around the world and people need to be able to come here and set up businesses. I sit on the Select Committee on Science and Technology and am very passionate about our best universities having the ability to attract the best and brightest talent from around the world. I also see in my home town the vibrancy that migration can bring.
It is possible, however, to have too much of a good thing, which is what I contend we have had. Government policy needs to pass seven tests, the first of which is tone. It is so important that we do not demonise migrants. They are doing what any Member of the House would do in the equivalent situation.
Gavin Shuker (Luton South) (Lab/Co-op)
The hon. Gentleman is extremely progressive and moderate on such issues, but did the Conservative party general election pledge pass the tonal test that he speaks about?
Gavin Barwell
I believe that my hon. Friend the Immigration Minister, who is not in the Chamber, absolutely passes that test. Under the previous Government, policy was loose, but sometimes rhetoric was extremely tough, whereas the Minister is toughening up policy while passing that tonal test.
Migrants are doing what any hon. Member would do—they are seeking a better life for them and their families—and we must not demonise them as individuals as we seek to address immigration.
Numbers are part of the issue. The House has already touched on the balance between net and global figures, so I will not. However, it is a question not just of how many, but of whom. I want to talk about the best and brightest academics from around the world, because the Government have introduced a new special tier 1, whereby 1,000 such people are allowed in each year. It seems bizarre to me that there is no limit on the number of professional footballers who have reached a certain standard who can come into the country, but we apply a limit of 1,000 a year to the best and brightest scientists. None of my constituents who are concerned about migration object to people of ability, who will create wealth for the country, coming here.
The Minister spoke persuasively in his opening speech about removing either people who are here illegally or people against whom a decision has been taken. One thing I would like the Government to do is investigate how we can use our aid budget to help in that regard. I am a great believer in what the Government are doing on overseas aid, but there is a lot of popular concern about it in this period of austerity. One thing we could do is say to countries that one condition of the aid package we provide is having an agreement with the UK to accept back foreign citizens who have committed crimes in this country.
In the last minute that is available to me, I want to touch briefly on two issues. First, on integration, other hon. Members have spoken passionately about the importance of people learning English, but immigration is a two-way street. The main obligation is on the immigrant to fit in with British society when they arrive, but we as a society need to ensure that we are welcoming to people who come into our midst. Britain has a proud record in that regard, but research shows the barriers that many immigrants still face. The National Centre for Social Research has found that people who have an African or Asian-sounding surname need to send about twice as many job applications as people with a traditional English name.
Secondly and finally, many UKBA staff live in my constituency. In a period of austerity, they are doing the very best they can to maintain and improve the service they provide, both in retaining control of our borders and in ensuring that decisions on migration are made quickly and fairly. I want to pay tribute to the work that UKBA staff are doing within a tough environment within the agency, which is a result of the failures of the previous Government and the banking crisis that were not their fault.
I am sorry that I cannot elaborate any further on some of the issues that I wanted to mention, but I want to allow other hon. Members the time to speak.
Jackie Doyle-Price (Thurrock) (Con)
It is a pleasure to address this very mature debate on what can be an emotive subject. Because of its emotiveness, there has been some reticence on the part of mainstream politicians to address it in any substantial way, which has led to a belief among some of our constituents that we are out of touch with their concerns. As many hon. Members have said, that has left the agenda open to those with more sinister motives. I am grateful, therefore, to have the opportunity to address the subject.
I am proud that we in this country have given a safe haven to those fleeing persecution, that we are seen as a beacon of freedom and opportunity and that so many people wish to pursue their lives here, but for too long, our borders have been too open. We have allowed levels of migration beyond what our society can manage, as my right hon. Friend the Member for Mid Sussex (Nicholas Soames) so eloquently expressed. That brings a risk to the liberal values that Britons take for granted. I would also like to make it clear that in my experience this is not an issue that divides communities on the basis of race, unless the people addressing it approach it with racist values. Some of the biggest critics of the way in which migration has been handled are our established ethnic minority communities who are fully integrated into society. The problems associated with immigration relate to volume and criminality, not race. With that in mind, I want to focus my comments on illegal immigration.
The Government have taken welcome steps to limit legal migration, but the tools that they have employed will not have a significant impact on those who are happy to break the law to enter our country. The Government need to do more to improve enforcement and they need to examine whether any aspect of our law needs to change to enable this. In particular, I wish to highlight the weaknesses in the Human Rights Act 1998 which are impeding the ability of the UK Border Agency and the Government to enforce rules effectively against those who have overstayed and should be removed.
One example is the right to a family life, which appears to be fuelling the idea that all people need to do is have a baby and their application will have to be approved. I have lost count of the number of cases of that that I have seen in my surgeries. I have also had examples of people finding fiancées or manufacturing relationships. In particular, because of the right to free movement, those relationships do not need to be with British citizens, but with people from anywhere across the EU. One gentleman who came to see me was applying for leave to remain because he was engaged to be married to his fiancée who was from Latvia. Only a matter of weeks after receiving leave to remain he came to see me to say that they had separated and, although they had not actually married, she had taken out several loans using his surname and he was being pursued for the debts. I am sorry to say that I did not have much sympathy for him.
I am pleased that the Government have taken action to tackle sham marriages, and I pay particular tribute to Father Tim Codling of St John’s church in Tilbury, who suddenly realised that he was officiating at a lot of weddings between eastern Europeans and Africans, who were often wearing ill-fitting wedding outfits. He alerted the UKBA which unearthed a major sham wedding scam, which led to severe prison sentences for the main perpetrators—all very welcome.
Of the 200-plus immigration cases I have handled, approximately half of them involved people who had broken the immigration rules in some way and ended up staying here illegally for a prolonged period. That issue has to be tackled as a matter of urgency. I appreciate that it is very difficult. Often these people assume numerous identities and put in multiple claims, all of which slows down the UKBA’s attempt to catch up with them. More often than not, the authorities cannot catch up with them, with the result that we cannot begin to quantify with any accuracy the number of people who are here who should not be.
When such people come to see me, I ask how they are supporting themselves given that they are not legally allowed to work because of their immigration status. They say that they are supported by their friends and family. I think it is a fair assumption that they are working illegally, and we need to take more action to tackle some of those abuses.
My hon. Friend the Minister referred to the recent case of a bogus asylum seeker who had managed to claim up to £400,000 of benefits by making illegal claims for disability allowances. It is a case that demonstrates not only the social evil of benefit tourism, which is ripping off the British taxpayer, but the way that people intent on coming to this country illegally will exploit the asylum system and our good will in wishing to provide a safe haven for those escaping persecution. The more desperate effect is that such behaviour also undermines public sympathy for these people. We need a way to appraise asylum claims more quickly.
Those are clear failings on the part of the UKBA, but it is simply overwhelmed by the size of the task in the face of these abuses. I have talked about the policy changes needed to curb immigration, and I encourage the Minister to look at how the law can be strengthened so that when criminality is identified it is dealt with promptly and effectively, and we can tackle the problem of illegal immigration.
James Morris (Halesowen and Rowley Regis) (Con)
It is fair to say that immigration is a source of frustration for many of my constituents. Despite any number of Government initiatives over the past few years, the number of people entering the country continues to be much higher than it was 20 years ago. At a time when economic conditions are causing great difficulties, families do not understand why so many people can come from overseas to compete for the finite number of available jobs.
At a time when people in the public services are having to bear their share of the savings that are needed to tackle the spiralling deficit created by the previous Government, they do not see how this is helped by allowing large numbers of additional people to move into concentrated areas. When they try to express their legitimate concerns, they are too often viewed as racist. However, it is not racist to talk about immigration. In most cases, the concerns are based not on race but on numbers.
Many of my constituents who contact me about immigration policy are from ethnic minorities. They desperately want an immigration system in which the public as a whole can have confidence, because that is a prerequisite for effective and sustainable community cohesion.
My constituents want a legitimate debate about the numbers of people coming into the country and about restricting the number of visas. Halesowen and Rowley Regis is fortunate to have a strong local community that is made up of people of different backgrounds, races and faiths who work well together and alongside each other. When local people do not feel able to voice legitimate concerns over immigration policy and do not believe that mainstream political parties are reflecting those concerns, we have seen first hand how that creates a vacuum, which those who seek to divide our society are all too eager to fill.
Earlier this year, the Ahmadiyya Muslim community’s book stall in Cradley Heath was attacked by thugs from the English Defence League. I have worked closely with the community and know how much good work it does to promote cohesion across the area through its outreach programmes and community work. It does not differentiate people of different faiths or different backgrounds. Its efforts to raise money for Russells Hall hospital and its work to sell poppies for the Royal British Legion benefit the whole community.
The EDL’s attack was based on ignorance and fear. Although we should never base our response on its agenda, it is important that we look at some of the factors that allow extremist groups to gain support. The Government’s actions to limit the number of economic migrants coming into the country from outside the EU are an important start. It will take some time before the effect of this ceiling feeds into official figures, but an appropriate limit that is properly enforced is essential if we are to restore faith in a system that has run out of control.
However, we must also recognise that any quota is in addition to the large number of people coming to work in Britain from within the European Union. The free movement of workers is a key part of the European single market and one of the most important benefits that we gain from our membership of the European Union. The ability of workers to move from one member state to another benefits not only the workers concerned but many businesses that are able to transfer highly skilled workers between offices in different countries.
Issues clearly arise when large numbers of workers from less wealthy member states wish to move to other countries where wages and benefit payments are much higher. The previous Government’s decision not to implement transitional agreements to restrict the number of workers entering Britain from the new EU member states in 2004 was little short of a disaster. Only Britain, Ireland and Sweden chose to allow, from day one, an unrestricted right to work, and as a result Britain attracted far higher migration from those new member states than would otherwise have been the case. That seriously undermined public confidence in the immigration system, and that problem remains. Last week, Croatia signed its accession agreement to join the EU in 2013. It is essential that we do not repeat the mistakes of the previous Government.
A third area that must be addressed if we are to build confidence in the system is bureaucracy, because few things are more guaranteed to destroy that public confidence than cases in which people with no right to stay in this country cannot be removed. Most of us will be aware of cases in or near our own constituencies where red tape has prevented the rules from being properly enforced, and the Minister will be aware of a recent one involving a patient at Russells Hall hospital in Dudley just outside my constituency. The patient was a Pakistani national whose visa had expired four years before. The hospital declared him fit enough to be discharged in August last year, but he remained at the hospital until this autumn because of difficulties in arranging a medical escort to accompany him home and problems in finding suitable nursing care in Pakistan. The 14 months that he spent at the hospital cost the NHS about £100,000. We must make it easier to remove people who have no right to remain in Britain more quickly and effectively.
We must never forget the important contribution that migrants have made to our society, economy and culture over many centuries, and we can take pride in our history of welcoming people from around the world and, on the whole, in Britain’s record of creating strong and diverse communities, but the Government are right to recognise that sustainable community cohesion within an integrated society is possible only if people have faith that the immigration system is not a floodgate. My constituents look to the Government to build on their positive actions so far and to deliver on our promise to bring immigration levels back under control.
Mr Andrew Turner (Isle of Wight) (Con)
It is a great pleasure to follow my hon. Friend the Minister and my hon. Friends the Members for Peterborough (Mr Jackson) and for Boston and Skegness (Mark Simmonds), who made brilliant contributions.
Migration is a contentious issue that until recently no one really dared discuss. The noble Lord Howard of Lympne brought it to the fore when he was the Conservative party leader, but it was not for another five years until both main parties recognised it as a problem to be addressed. The Conservatives have led the way on the issue since the last general election.
The facts are well documented but it does good to repeat them: the most recent figures show that in the year ending September 2011, 540,000 people entered Britain with the intention of staying for longer than six months, of whom 186,000 came from the Commonwealth, both old and new, and 200,000 from the rest of the world excluding the EU. That leaves 150,000 from the European Union. All they get is a simple passport check. Then they are entitled to come into the country, live in a house or flat, find employment and, crucially, apply for benefits—all because they came from a member state of the European Union, not from the rest of the world.
When in opposition, the Government specifically pledged to bring immigration from non-EU countries down to the tens of thousands before the next election. I applaud that sentiment, but I would like them to go further. I believe the time has come to conduct a wholesale re-evaluation of all our benefits policies. Within that, I would specifically end the agreement with other EU countries.
Why do I think we should have tougher border checks? Because not having them is very expensive—expensive financially, expensive for our young people trying to find low-skilled jobs and expensive for our housing market. If we prevent foreigners from settling in Britain, more money will stay in the country. There will also be less demand on houses, keeping the property markets in check and allowing our first-time buyers to get on the property ladder, especially in south-east England. There will also be fewer people applying for the same number of jobs, thus reducing unemployment. Other countries are tough on this, including the USA. Why does Britain have to be a soft touch? Rather than having people come to this country, we should be encouraging them to stay in theirs, and to generate the wealth that goes with that.
Every time Europe is discussed, I am grateful for two things: first, that we did not join the euro; and secondly, that we did not sign the Schengen agreement. As it is, the thought that some 437 million people of the EU are allowed to come to the UK chills my blood. If we had committed to Schengen, they would be able to come into the UK without anyone even checking their passports. It is bad enough that one can go from Cyprus to Calais without one’s passport being checked; imagine if we had signed away any advantage that the channel affords us as well.
Before I finish, I would like briefly to pay a tribute. The men and women who go to work at our ports of entry on a daily basis deserve our recognition. If our armed forces are protecting our borders in Afghanistan, the UK Border Agency has an equal responsibility at home. There would be no point conducting operations across the world if our border agency did not conduct its work with a similar professionalism here. I know that occasionally things appear to go wrong, but I also know that it is never intentional, and we must remember that. We are talking about dedicated public servants doing a difficult job, and I welcome that.
I call on the Minister to have a good look at those wanting to come into the UK from outside Europe, but I would also like the policies that allow arrivals from within the EU to be thoroughly reviewed too—this is one way in which the Prime Minister can really look after our national interests. Let us get tough on them. The shores of this island are ours, not Europe’s. We should be able to decide who lands upon them.
Diana Johnson (Kingston upon Hull North) (Lab)
We have had an interesting debate this evening, with the Minister and the shadow Minister using their opening remarks to set the measured tone with which we should always conduct debates on immigration. As constituency Members of Parliament, we all know that immigration frequently crops up when we talk to constituents. I not only represent a port city, but I have a university in my constituency with many overseas students. I also live in an area that has many seasonal workers who come for the agricultural work that needs to be done.
There is a general consensus around the Chamber that we need to control immigration. We acknowledge, of course, the benefit of immigration to this country over many years. We also acknowledge the genuine asylum seekers, whom we want to assist and provide a safe haven for in this country. However, I am sure we all agree that we also need tough enforcement for illegal immigrants—those who should not be here, those who are overstayers. We need to tackle that problem.
On the whole, we have had a considered and sensible debate. However, I was a little disappointed that the Minister could not be more generous in his opening remarks about some of the positive steps that were taken through the points-based system. I understand and acknowledge that the Government are adapting and changing it, but the system in place now was introduced by the last, Labour Government. I also dispute the notion that when the coalition Government came to power in 2010 the system was in chaos. That is not correct. Instead, the coalition is building on many of the positive steps and measures introduced by the previous Government.
My hon. Friend the Member for Rhondda (Chris Bryant) made some thoughtful comments in his opening contribution. He identified some of the difficult issues surrounding immigration, including those to do with marriage and family reunion and the debate on economic independence and when it is appropriate to set the level of financial support necessary for someone to bring a husband or wife into the country. My hon. Friend also talked about gay asylum issues, which I believe we should have a long, hard think about. All hon. Members know how important is the NHS and how it has benefited in the past from immigration and the dedication of nurses, doctors and health service workers. I hope that when the Minister concludes, he will answer the points that my hon. Friend raised and deal with domestic workers and trafficking, too, as many hon. Members are concerned about them.
I would like to highlight some of the local issues raised by individual Members. My hon. Friend the Member for Brent North (Barry Gardiner) talked about students who had been left high and dry by bogus colleges. I hope that the Immigration Minister will revisit that point, as I know my hon. Friend is still concerned that the students who legitimately applied for their status have been left in a difficult position. Legacy cases are important, too, and the Home Office needs to accept that it has not always responded as quickly or as effectively as it should to them.
My hon. Friend the Member for Dumfries and Galloway (Mr Brown) mentioned the port of Stranraer, as he has on many occasions, in the context of southern Ireland and the ability to travel to the mainland from there. I am sure that the Minister will want to pursue that further with my hon. Friend.
The right hon. Member for Mid Sussex (Nicholas Soames) talked about the projections for the UK population, mentioning the figure of 70 million that has been bandied around. He highlighted issues relating to students, workers and marriage. I was struck by the fact that that other hon. Members spoke about the tone of the debate about students. We know that higher and further education are key economic growth areas for the country, and we do not want to put off good students from coming to our good institutions because of the perception that the system is stacked against them.
The hon. Member for Canterbury (Mr Brazier) made some remarks about overcrowding, which I found a little odd, considering that, as my hon. Friend the Member for Rhondda mentioned in an intervention, huge areas of this country are not well populated. I represent the city of Hull in East Yorkshire, where there is a quite a lot of space in some areas. The hon. Gentleman made the important point that immigrants pay more tax than they often receive in benefits. I believe we should reflect further on that.
The hon. Member for Boston and Skegness (Mark Simmonds) represents an area I know a little, and I am familiar with issues to do with agricultural workers and the seasonal character of the population. He made a strong and passionate case about resources for his area, but I would refer him to the migration impact fund, which was introduced by the last Government to support areas that were seeing a certain level of immigration into their local communities.
The right hon. Member for Carshalton and Wallington (Tom Brake) was very brave to make comments about the number of Labour Members in the Chamber after the non-appearance of his leader today in the most important statement the House has had for quite some time, but I will move on. I found his comments about his manifesto promise interesting. It was a promise to stop holding children in detention, but of course that promise changed once the Liberal Democrats were in government.
The hon. Member for Peterborough (Mr Jackson) focused on the Opposition’s policies on immigration rather than on his own party’s proposals. I suggest that he look at the figures showing that net migration of 245,000 for the year ending March 2011 compares with net migration of 222,000 in March 2010. That is something to reflect on, particularly in respect of whether his Government’s policies are working.
The hon. Member for Tamworth (Christopher Pincher) said that the Government had struck the right balance. We must pay special attention to the statistics, and ensure that they have been authorised. The hon. Member for Croydon Central (Gavin Barwell) spoke about what was happening in his constituency. Obviously that is important, but let me gently remind him that—as I recall—the first BNP councillor was elected in 1993 in Tower Hamlets, when we had a Conservative Government and the Liberal Democrats controlled Tower Hamlets council.
The hon. Member for Thurrock (Jackie Doyle-Price) spoke about sham marriages and scams, and of course we all agree with her that such activities must be dealt with quickly and effectively. She said that the UKBA had been overwhelmed, which was an interesting comment given the 6,500 jobs that will be lost in the agency in the coming years.
The hon. Member for Halesowen and Rowley Regis (James Morris) spoke of an effective removal regime, and gave a good local example. I think that all Members want to ensure that the removal regime is as effective and speedy as possible when that is appropriate. The hon. Member for Isle of Wight (Mr Turner) referred to the need to strengthen checks at the borders, and to the hard work of UKBA staff. I am sure that the whole House agrees with him about that.
Members took advantage of the opportunity to discuss all the issues involved, and this was a good debate. However, I fear that the Government’s rhetoric does not match the reality represented by the statistics. We recall the debacle over the summer involving the UKBA immigration checks, when Ministers clearly did not have a grip on what was happening on the front line, and we know that there are 6,500 UKBA job losses to come. We do not know whether the Government’s policies will be effectively implemented. My hon. Friend the Member for Rhondda pointed out that 12% fewer illegal immigrants, overstayers and criminals had been removed this year than last year.
We must be alive to this issue. We must pay attention to the statistics, and must hold the Government to account in the months and years to come. We shall see whether they can deliver on their commitment to reducing net migration to tens of thousands.
The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)
We have had an informative and measured debate, and it is important to note that the Government found time for it. As many Members have pointed out, we should be able to discuss immigration with candour, openness and honesty, basing our evidence on the facts. My hon. Friend the Member for Halesowen and Rowley Regis (James Morris) spoke of the need to ensure that the subject was not off limits, as I think we have done today. As was clear from many speeches, it is a matter of significant concern to our constituents. My right hon. Friend the Member for Mid Sussex (Nicholas Soames), for instance, highlighted the support for the Migrationwatch e-petition.
I welcomed the 10 speeches from Back Benchers, although I was disappointed and slightly surprised that they were all made by Government Members. As I have said, it is important for the subject not to be off limits and for a broad debate to take place across the Chamber.
Let me remind the House of this Government’s approach to immigration, which is about balance. Britain benefits from immigration and has always done so, but it will continue to do so only if immigration is properly controlled. That means that the unsustainable level of net migration in recent years must be brought down. It is not unfair to characterise the previous Government’s approach as not being about controlled migration; it was more characterised by unlimited migration. Following the pushing by my hon. Friend the Member for Peterborough (Mr Jackson), the hon. Member for Rhondda (Chris Bryant) accepted that the level of migration had been too high, so we look forward to the development of further policy and of the debate in the weeks and months ahead.
The hon. Member for Kingston upon Hull North (Diana Johnson) highlighted the points-based system. I am sure that we will return to these issues in the future, but I wish to set out one fact for her. When that system was introduced in 2009, the number of student visas increased from 232,000 to a record 320,000. We have taken the clear approach that the view and policy of the previous Government were not sustainable, so we have imposed some much-needed rigour on the system through: an annual limit of 20,700 sponsored workers with a job offer; closing the tier 1 general route and replacing it with a smaller, more focused exceptional talent route; accelerated settlement for the biggest investors and most successful entrepreneurs; restricting tier 2 to graduate-level occupations and intermediate-level English speakers; restricting intra-company transfers to 12 months, unless someone is earning £40,000 or more; and introducing tougher entry requirements, with higher language competency and evidence of maintenance requirements, whereby all educational institutions are to be highly trusted sponsors and vetted by the relevant improved inspectorate. However, there is more to be done, which is why the Government will be announcing reforms to settlement and the family route in due course.
Some important contributions have made by hon. Members, and I will try to respond to as many as I can in the time left to me. My right hon. Friend the Member for Mid Sussex highlighted the need to take action on the student route. Statistics show that one in five students—or about 21%—appeared to remain in the migration system five years after the end of their course, which highlights clearly why we need to take action. Indeed, we have fundamentally reformed the student visa route, with measures including a tightening of the regime for licensing colleges that sponsor foreign students; restrictions on the entitlements of students, including the right to work; and the closure of the post-study work route from April 2012. The hon. Member for Rhondda highlighted the issue of the post-study work route, which we believe is far too generous. In 2010, one in 10 UK graduates was unemployed and 39,000 non-EU students took advantage of post-study work. The figure was 47,000 between January and September this year, which is why we will close the post-study work route from April 2012.
I wish to comment on the points raised by a number of hon. Members, particularly my hon. Friends the Members for Canterbury (Mr Brazier), for Boston and Skegness (Mark Simmonds), and for Peterborough, about the pressures on public services. Those pressures are the reason why the Government have commissioned research into the impact of migration on UK employment and the take-up of public services, and we will be publishing this work in due course. We have commissioned the Migration Advisory Committee to examine the national impacts on employment, congestion and national services, and its report will be published early next year.
On the point made by my hon. Friend the Member for Boston and Skegness about scientists and researchers, the Government’s changes to the points-based system have all been made with the needs of the science, academic and research communities in mind. A number of routes are available depending on the individual’s level of experience or the length of time needed in the UK, including at tier 2, which is the main route for those coming to work as scientific, academic or research staff, where the possibility of a long stay is available. Migrants with PhDs are given extra points and migrants must meet the resident labour market test and be paid the appropriate rate for the job, with a minimum salary of £20,000. We have clearly reflected on the needs of science in the proposals and on the exceptional talent route, through which 700 of the 1,000 places in the first year have been earmarked for the use of exceptionally talented scientists, academics and engineers.
Let me comment on the points made by my right hon. Friend the Member for Carshalton and Wallington (Tom Brake) about children in detention. We have radically changed the system to ensure that the welfare of the child is at the heart of the decision and the removals process. This Government have introduced very important and significant change and my right hon. Friend was right to highlight that.
My hon. Friend the Member for Peterborough highlighted the issue of A2 nationals and, as he said, the Migration Advisory Committee has made a clear case for extending the restrictions on Bulgarians and Romanians. He may be aware that on 23 November, restrictions on how Bulgarian and Romanian nationals access the UK labour market were extended until the end of 2013, which means that those nationals will continue to require permission from the UKBA before they can work in the UK. Let me make it absolutely clear that this Government will always introduce transitional controls on all new EU member states as a matter of course. That is a very important statement to underline and put on the record, recognising to some extent the comments made by my hon. Friend the Member for Isle of Wight (Mr Turner).
My hon. Friend the Member for Thurrock (Jackie Doyle-Price) highlighted the issue of the European Court of Human Rights and article 8. The Government will revise the immigration rules to reinforce the public interest in seeing foreign criminals and those who have breached our immigration laws removed from this country.
I talked about a balanced immigration policy. We want the brightest and the best to come to the UK and we want to support economic growth. I know that that point was, in many ways, underlined by my hon. Friend the Member for Tamworth (Christopher Pincher) when he talked about the economy and how this issue factors in. That is why we have consulted widely on all our reforms with business and with the higher education sector. Every month since we introduced the limit the visas on offer have been under-subscribed, so not a single valuable worker has been prevented from coming here.
To promote the brightest and the best we made the investor and entrepreneur routes more attractive and accessible, for instance through an accelerated path to settlement. The latest quarterly figures show that numbers for both investors and entrepreneurs have more than doubled compared with the same period last year. We have opened a new route for exceptional talent under which applicants do not need a job offer but must be endorsed by a competent body as world-leading talent. By introducing these important changes, we have underlined the sense of balance and their contribution to the economic well-being of our country.
Our border operations are key in ensuring the effectiveness of our migration policies, guarding against abuse and circumvention of the visa system and illegal immigration. It is important to understand that the old idea that the border starts at Dover or Heathrow will become increasingly old-fashioned. To reiterate the point made by my hon. Friend the Minister for Immigration, we want to export our borders so that they start at airports and visa application centres around the world. In so doing, we will ensure that we have stronger, more effective controls.
People have a right to know that the Government are protecting their jobs, keeping a firm grip on those who come here and sending home those who break the rules. That is the approach the Government have taken and will continue to take in the best interests of our citizens, our economy and our country. It is very much that sense of balance that we have adopted in our policies. Immigration is a vitally important subject for this country.
Business without Debate
(12 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Delegated legislation
(12 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Pregnancy Counselling
(12 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Gavin Shuker (Luton South) (Lab/Co-op)
I am extremely grateful to you, Mr Speaker, for granting this Adjournment debate. Three months ago, during our debates on the Health and Social Care Bill, an amendment upholding a notion supported by 78% of the British public, that
“a woman should have a right to independent counselling when considering having an abortion, from a source that has no financial interest in her decision”
was put to the vote. It was voted down by a majority of three to one. I know this all too well because I intervened in the debate to say why I hoped it would not go to a Division. It felt misplaced in the legislation and followed a fractious debate that had been conducted in the papers and the media. It descended, as all such debates seem to, into a political bun fight. Indeed, one of the few voices of moderation—hon. Members might be surprised to hear me say this—was the Under-Secretary of State for Health, the hon. Member for Guildford (Anne Milton), who is in her place tonight.
The Government are rightly engaging in a consultation process to see how best to improve pregnancy counselling services. It is in that context that I sought this Adjournment debate. I hope that we can show, as a House, that we have the maturity to ask a simple question without descending into accusations either of betrayal or of compromise. The question we must ask is this: do the present arrangements for pregnancy counselling, when a woman is deciding whether to undergo a termination procedure or to make arrangements for seeing her pregnancy through, serve us well?
I should like to quote a few women who have spoken about their experiences of the pregnancy counselling system as it is currently constituted. All these women received taxpayer-funded counselling; they really are the most important voices we could hear from this evening. A woman called Jennie had a bad experience. She said,
“I felt this counsellor was disinterested. I actually told her to pay attention because this was important to me that I had this counselling. It was like she was thinking about her shopping and I was just choosing a handbag.”
Emma said:
“I felt irritated with the counsellor because she presented my abortion options like it was a sweet shop; ‘So what would you prefer? The pills that will do this, this and this or you could have a surgical procedure.’ I was so angry; I just told her I didn’t care.”
Other women have reported that they felt pregnancy option counselling simply was not made available to them. A woman called Kerry said:
“They did not offer me counselling. I was crying and screaming as I went for the abortion but they still went through with it. I was pressurised by my boyfriend. It is the first thing I think about in the morning and the last thing at night.”
Patricia was not offered counselling either. She said:
“I was never given any options. When I took the second pill I was sent home to have the abortion. I have not stopped crying ever since.”
It is tempting to dismiss these experiences, but they are real. Any mature debate will, I hope, avoid the accusation that these women are in some way rewriting their own history. Surely we should do all we can as a society to ensure that women, regardless of their choice in such circumstances, do not have to live with regret, in many cases for the rest of their lives.
At the heart of the proposal that all women should access independent counselling where the source of that counselling does not have a financial interest in their decision is a concern about the current arrangements. At present the only available taxpayer- funded pregnancy counselling is given by those working for abortion providers. Some have suggested that this means that counsellors will act unprofessionally, in a directive fashion. I do not suggest that, but I do have a concern.
When a pregnancy counsellor also works for an organisation that provides abortions, there is an underlying direction of travel. The expectation, for both the organisation and the woman accessing the service, is that the normal process will conclude in the termination of a pregnancy.
Andrew Selous (South West Bedfordshire) (Con)
Given that the law gives a woman the right to choose, does the hon. Gentleman agree that a woman should also have the right to choose from where she gets her counselling? I have a wonderful lady in my constituency, Sarah Richards, who receives no funding for the women who come to her. She does not badger them in any direction. Would the hon. Gentleman like to see a woman such as Sarah Richards who provides such a service receiving the same payment as the British Pregnancy Advisory Service receives for the women it counsels?
Gavin Shuker
The hon. Gentleman makes an extremely good point about the experiences in his constituency. I will go on to talk about the system that I think might be able to facilitate something along those lines and address some of the concerns that, quite understandably, many people will have when they hear about those who are currently outside the system coming in as well.
It is reasonable to expect that women are offered, should they want it, counselling that does not have a connection and an underlying association with only one outcome.
Kate Green (Stretford and Urmston) (Lab)
My hon. Friend is making a very thoughtful case. Does he agree that we particularly want to avoid late terminations? They are stressful for women and they are obviously a cause of great concern. How would he be sure that directing women to sources of counselling outwith abortion providers would not cause delay?
Gavin Shuker
My hon. Friend makes an extremely good point. Where terminations are to occur, they should happen early. There is a concern that women who desire the kind of context in which they can make their own decision are provided for as well. There will always have to be a balance in any system, but there is an inherent risk in the system as it is currently constituted that women are not able to access that counselling.
It is reasonable that independent pregnancy counselling should be made available to all women who are considering their options. It might surprise the House to know that there is no legal guarantee that such counselling is available.
Fiona Bruce (Congleton) (Con)
I commend the hon. Gentleman for introducing this important debate. Does he also agree that where such counselling is offered, it should be provided by counsellors who have specialist training and experience in advising those who are in the situation he describes?
Gavin Shuker
The hon. Lady makes an extremely good point. I agree, and I will go on to say a few words about some of the criteria that we should look for in people providing such counselling in future.
I believe it is perfectly reasonable, in a debate as complex and fractious as this, to suggest that given the issues we have talked about, the most sensible thing the Government could do is take out of the equation the financial link between counselling and the procedure. I accept that there are opinions in all parts of the House, but one simple principle to enact—and one potentially complex thing to do—would be to take the financial link out of the process. Many would see it as wrong that pregnancy counselling is currently monopolised by those who are pro-choice. There is an imbalance in the system which means that, by and large, counselling is provided only by private abortion clinics. I encourage hon. Members, whatever their perspective on the issue, to consider this simple question: can it really be right that the only taxpayer-funded pregnancy counselling available is currently given by those working for abortion providers?
Counselling in this context should always be non-directive, client-centred and universally available, and the right to it should be legally protected, but I do not believe that it should be subject to a duopoly, as it is at present. If a provider can produce genuinely client-centred and non-directive counselling that is free from a financial link to any given procedure, I believe that the NHS should fund it. There are more than two such providers in the UK today.
In that light, I very much welcome the commitment that the Minister gave the House in September. She said:
“Whether women want to take up the offer of independent counselling will be a matter for them, but we are clear that the offer should be made.”—[Official Report, 7 September 2011; Vol. 532, c. 384.]
She also spoke of the difficulty in defining what was meant by “independent” in this context. For some it simply means non-directive, but for others it means independence from finance or independence of the organisational structure from the abortion provider. As I understand it, her Department has not yet given any assurance that the offer of independent counselling would by definition mean counselling by persons or bodies without any kind of vested interest in abortion provision. I ask her to reflect on this and reiterate her commitment that women will be offered independent counselling and that the way to ensure that is by creating a regulatory framework that recognises the provision of alternative sources of pregnancy counselling to those offered by the big two.
In this country we have more than 40,000 trained counsellors who are members of either the British Association for Counselling and Psychotherapy or the UK Council for Psychotherapy. I hope that the Department will liaise with both organisations and the Royal College of Psychiatrists in developing an entirely new approach to how pregnancy counselling is provided in this country.
I know I speak for many, both in the Chamber and outside, when I say that my preference would be for abortion clinics not to be provided in pregnancy options counselling, ensuring that every woman seeking such counselling would know that there is no financial relationship between counselling and the provision of a termination. However, I accept the Government’s position that the right way forward on this issue is through consultation that allows all parties to express their views. It seems entirely practical and plausible for the Government, using the resources currently available, to develop a system in which every woman considering her pregnancy is offered counselling, should she wish to have it.
Non-directive pregnancy options counsellors, who are excluded from the present state settlement, can offer practical advice and help for women who choose to take their pregnancy to full term and often an ongoing support relationship. The focus of existing providers, understandably, is whether to abort or not. Just as choices are wider than simply whether or not to have an abortion, so counselling should give recognition to and advice on adoption and fostering when a woman considers continuing with her pregnancy.
Let me turn to the inevitable charge that allowing counsellors who are pro-life in their personal lives into the system would be inherently damaging to women. It starts with an assumption that the present system is both neutral and independent and hinges on a prejudice about those who hold such convictions. Allow me humbly to disagree with this notion. First, if the debate this autumn taught us anything, it is that no one is neutral. On an issue of conscience, right-minded and well-meaning people will rightly disagree and end up on different sides of the debate, but they will hold a position of conscience that they feel strongly about, hence my suggestion that we do what we can do now, hence my call to break the financial link between counselling and the termination procedure, and hence my desire to ensure that there is no nagging doubt at the back of any woman’s mind about who is looking out for their interests.
Secondly, there is an assumption that people cannot park their personal convictions at the door. Every counsellor knows that pressure in any direction is counter-productive for a woman who wants to continue her pregnancy but needs the space to reach that conclusion herself. In a new system, every counsellor should know that, whether they are personally pro-choice or pro-life, any moves that depart from non-directive principles should endanger their ability to do such work in future.
Equally, I hope that being pro-choice would mean being pro-all-the-choices available to women and that some providers are more expert at providing additional choices to those currently available and funded within the present system. That is why I hope that providers who, as many Members have mentioned, are doing amazing work to support women who would otherwise have felt no option but to undergo an abortion will be welcomed into our present system.
As a House, we have always had the ability to bridge divides, overcome prejudices we see in one another and together find a better arrangement for those we are here to serve. I feel certain that there are women who are let down by the current arrangements. The right response for us is to come together in a spirit of respect, excluding no one or their views. The ongoing consultation by the Government is an opportunity for us to do so, and I hope that we will not be found lacking.
The Parliamentary Under-Secretary of State for Health (Anne Milton)
I thank the hon. Member for Luton South (Gavin Shuker) for bringing this important issue to the fore in the House again. It is testament to how important the issue is that, at this late hour, the House is filled with many Members who take an interest in it. People rightly feel very strongly about it, and he has made some very important points. In this debate, whatever our respective positions, I think we all agree that women who face a decision about whether to proceed with their pregnancy need support, advice and, indeed, counselling; often, it is a very difficult decision for women to make.
The hon. Gentleman supported the amendment introduced by my hon. Friend the Member for Mid Bedfordshire (Nadine Dorries), and since that debate officials in the Department of Health have been developing and looking at proposals for a consultation on the counselling options in the independent sector and in the NHS for all women considering abortion.
I am working with Members from both sides of the House to look at how we might proceed with the consultation, and I have been impressed by what the hon. Gentleman referred to as the “maturity” of that group of people, who, despite starting from quite opposite ends of the debate, have come together to find out where we agree and, at the end of the day, to ensure that we put forward a consultation that looks at what is best for women.
The consultation will consider how to develop an offer of counselling that is impartial and supportive and, as part of the process, we will look at who is best placed to offer counselling. It is not about automatically including or excluding any one type of organisation; what matters is that we define clearly the outcomes that we want for women. It is important to focus on the process, but we need to be clear about what we are trying to achieve.
Officials have visited several counselling providers to find out more about the services that are offered in terms of the process, the qualifications that their counsellors hold, and what people should expect on booking a counselling appointment. Some organisations are abortion providers, some are services that refer people to abortion providers, and others do not make direct abortion referrals. Official recently visited a Marie Stopes International clinic and a BPAS clinic, and what they found was quite interesting. During the consultation, I am sure that we will hear from many other people with experience of those services.
The proposals are still being developed, and, on an issue that has sought to divide the House in the past, and on which there are sometimes very strong views, it is important that we go into the consultation with one mind. We are confident that, as a result of the work, counselling arrangements will be improved. That is the purpose of the work, and we want to take into account everyone’s point of view so that we put together for consultation the right document that asks the right questions and includes the right options, and so that we hear and know exactly what is the best way forward.
It is clear that good work, delivered by different providers, is going on in many places, but we need to make sure that all women are offered a consistently good service. The repercussions of that not being the case are very serious. The aim of the consultation will be to propose ways to strengthen existing counselling options for women where they are good, improve the services where they fall short, and set out detailed options to achieve that goal.
Thomas Docherty (Dunfermline and West Fife) (Lab)
I commend my hon. Friend the Member for Luton South (Gavin Shuker) for securing this well-measured debate. The Minister will be aware that the Health and Social Care Bill is going through the House of Lords. Will she guarantee that before the Bill leaves the other place and comes back here, she will bring forward a measured package to make sure that there is a consultation about these issues?
Anne Milton
I thank the hon. Gentleman for his intervention, but there is no need for this to be dealt with in legislation. Before today, I have given my word at this Dispatch Box that we will carry out the consultation and bring forward the best options in finding the best way to make sure that women have an offer of counselling should they wish to take it up. It is important to remember that women who access services sometimes do so from a wide variety of directions—they may self-refer or come from their GP. What matters is that we get the offer in the right place. We need to consider whether the woman should have the one offer or whether the offer needs to be continually open because she might turn it down in the first instance, at the first appointment, but want to take it up, say, a week down the line. It is important that we get the detail right. We do not need to put it into primary legislation; in fact, it would arguably be inappropriate to do so. I repeat that I have said from this Dispatch Box, on more than one occasion, what we will do.
As the hon. Member for Luton South said, there is concern that there is a conflict of interest in that counsellors are paid for procedures and yet also expected to provide entirely impartial advice to women. Although there are no formal quality standards in place for counsellors and no minimum standards for training or qualifications, we have found that the majority of counsellors who work in independent sector abortion providers are registered with the British Association for Counselling and Psychotherapy. Underpinning membership of, and accreditation by, this organisation is a thorough ethical framework that counsellors must abide by. However, sufficient concern has been expressed, so we are looking at everything in the round to make sure that the sector is not only independent but has the confidence of the public that it is independent. It is important to say that independent sector abortion providers and organisations that refer women for an abortion are subject to the Secretary of State’s approval and monitoring by the Care Quality Commission. Marie Stopes International, which is one of the leading abortion providers, has reported that 20% of its clients decided not to go through with the termination following counselling. That is an interesting statistic.
Pregnancy counselling is about providing women with a non-directional and non-threatening service in which they can explore the issues. Some will immediately decide on their course of action, and others will still be unsure about what to do at their first appointment with a health professional. This can sometimes make it very difficult to provide the uniform standard of care that is so important. What is right for one woman will not necessarily be right for another, and so a flexible service that can respond as far as possible to individual women’s needs is essential. Moreover, we do not want to create barriers or to instil delays in the service. Counselling can help a woman to recognise conflicting emotions and feelings and allow her to accept that there may be no perfect, straightforward answer to this crisis in her life. Most importantly, it allows her time and space to reach an informed decision. There is evidence that counselling can help women, particularly vulnerable women, to make a decision with which they are comfortable. We have also heard anecdotal evidence from women who feel that they could have been helped by counselling before making their decision to have an abortion.
Counselling must be balanced. Effective counselling must be confidential, non-directive, non-judgmental, supportive and understood by the person to be independent of any assessment for legal approval for abortion. It needs to happen away from the influence of family or friends. The hon. Member for Luton South highlighted the case of a woman who felt pressurised by her boyfriend and I know that some women feel pressurised by their families.
Contraception has been free on the NHS since 1974. It has helped millions of people to avoid unintended pregnancy and to plan their families as they wish. There are 15 methods of contraception and we have seen a recent increase in the number of women choosing highly effective methods of long-acting contraception.
Although abortion rates for all ages have remained stable, between 2007 and 2010 the abortion rate fell for those aged 24 and under, and the number of abortions overall fell. In 2007 there were just shy of 200,000 abortions, whereas in 2010 there were 189,574, which is a decrease of nearly 10,000 in the space of three years. That is good, but we clearly have a great deal of work to do. Ideally, we do not want to face anything near those numbers. We must ensure that young people have good relationships and sex education so that they can make good choices for their lives.
In conclusion, this work is about ensuring that all women considering an abortion get the best possible service, which they not only need, but deserve. We are looking to build on the recent early successes of the increasing access to psychological therapies programme and to use that model to develop options for pregnancy counselling. We have had discussions with the officials leading that team in the Department and there is a lot of opportunity. I have no doubt that when we offer young women counselling, it will be an opportunity for some women to unearth all sorts of other issues in their lives, such as domestic violence and sexual abuse. I hope that all Members agree with the principle behind this, as I think they do, even though we sometimes disagree about the small print. I hope that the hon. Member for Luton South and all hon. Members will continue to work with us to get this right.
Mr David Amess (Southend West) (Con)
I congratulate my hon. Friend on the stand that she is taking, even though some of her statistics have slightly mystified me. Before she completes her speech, will she tell the House roughly when, after the consultation next January or February, she believes we will come to a new arrangement for abortion counselling?
Anne Milton
As I have said, I am working with Members on all sides of the debate to get the consultation document right, with the right options and the right offer. The consultation will last for 12 weeks and I then hope to bring forward the arrangements. There are issues with the number of counsellors who are available and with the pathways. These things never happen as quickly as I would like. I always wish that things could happen yesterday, but sadly they cannot.
Thomas Docherty
Will the Minister confirm whether she thinks that it will happen before or after the Health and Social Care Bill passes from the House of Lords?
Anne Milton
It is not for me to prejudge the passage of any Bill, particularly when it is in another place. I am determined to get on with this work. It is not dependent on the Bill. We need to move forward so that we can get the process in place for the offer to be made as soon as possible.
The hon. Member for Luton South rightly said that no one is neutral. We want women to receive advice on all the available options and to get support in making their decisions. We want them to have the offer of independent counselling so that when they make a decision, they feel sure in their hearts that it is right for them not just for today, but for the rest of their lives.
Question put and agreed to.
Petitions
Proposed Development on Coastal Road, Bolton-le-Sands (Lancashire)
Sentencing (Knife Crime)
Written Ministerial Statements
(12 years, 10 months ago)
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Green Investment Bank
(12 years, 10 months ago)
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The Secretary of State for Business, Innovation and Skills (Vince Cable)
On 24 May 2011, I made an oral statement setting out the Government’s plans for a green investment bank (GIB). I explained that establishing an effective, enduring GIB would be a major undertaking and gave a commitment to update the House on further milestones in future.
The Government have made significant progress towards the establishment of an independent GIB, which will be a key component of the UK’s transition to a green economy. As I explained in May, the Government will need to ensure that the GIB complies with state-aid rules. We have had a constructive dialogue with the European Commission and are now in a position to formally notify our proposals. The Government will be seeking a broad remit for the GIB, including approval to make investments on commercial terms across the full spectrum of the green economy. Where we are seeking scope for the GIB to provide finance on state-aided terms, we have developed strong evidence that such aid is necessary in the particular sector concerned and that this will not unduly distort competition or interstate trade.
It will be important that GIB is in a position to be fully operational as soon as possible after state-aid approval. I therefore intend to form the company shortly and to begin the formal recruitment process for the board and senior management team next month, with a view to appointing the chair in spring 2012.
The bank will operate independently from Government, but will agree its strategic priorities with the Government for each spending review period. Subject to approval by the European Commission, we have identified the following priority sectors over the spending review period to 2015-16:
offshore wind power generation;
commercial and industrial waste processing and recycling;
energy from waste generation, including gasification, pyrolysis and anaerobic digestion for the production of heat and/or power;
non-domestic energy efficiency, including onsite renewable energy generation and heat; and
support for the green deal.
At least 80% of the funds committed by the bank over the spending review period will be invested in these priority sectors.
As I explained in May, the initial capitalisation of the GIB will be £3 billion. From 2015, the GIB will be given powers to borrow, subject to public sector net debt falling as a percentage of GDP. The GIB will work to a “double bottom line” of both achieving significant environmental impact and making financial returns. Potential investments will be assessed against the following objectives:
Green Impact—Accelerating investment to advance the UK’s transition towards a green economy, including reducing greenhouse gas emissions; improving resource efficiency; and protecting and enhancing the natural environment and biodiversity, which includes improving water and air quality, reducing noise pollution and improving land use amenity;
Sound Finances—Deploying capital and expertise as a responsible investor and managing risks to achieve positive portfolio returns and, in so doing, preserving and building its capital base as an institution with enduring green impact; and
Additionality—Operating alongside other market participants in response to market failures, leveraging their capabilities where appropriate, to introduce and mobilise additional investment and achieve green impact.
There has been considerable interest in the location of the GIB, with around 20 locations expressing interest to date. The Government welcome this, and are committed to an open and transparent process for deciding the location of the GIB. I have today published a document setting out details of the process that will be followed and the criteria which I will be taking into account in reaching my decision on location. The document also provides information about the likely structure of the GIB, and explains that it is expected to have between 50 and 70 staff in the period to 2015. Copies of the document have been placed in the House Libraries and will be available to download on the BIS website. I intend to announce my decision on the bank’s location in February 2012.
I announced in May that Sir Adrian Montague had agreed to chair an advisory group, comprising independent finance experts, to advise Government on the setting up and strategic direction of the new institution. I appointed nine other members in August, and the group has met three times. Its advice has greatly contributed to the progress made towards establishment of the GIB, particularly in relation to the detailed drafting of the GIB’s strategic priorities.
It is, however, clear that, in advance of state-aid approval for the GIB, we need to take immediate action to accelerate private sector investment in the UK’s transition to a green economy. I have therefore set up a new team within my Department to drive investment in the UK’s green infrastructure from April 2012. The team, which will be called UK Green Investments, will be staffed by finance professionals, whose track records are widely known and respected in the City.
Drawing on funding of £775 million for the next financial year, UKGI will invest up to £100 million in commercial and industrial energy efficiency projects and will stand ready to make major co-investments with private finance in offshore wind projects. UKGI is also seeking managers for up to £100 million to invest in waste projects and is now calling for expressions of interest from experienced fund managers in the waste infrastructure sector.
The Government will make investments during this period under section 8 of the Industrial Development Act 1982. I have established an Investment Committee, including members of the Industrial Development Advisory Board, to advise me on investment proposals made by UKGI.
Accommodation
(12 years, 10 months ago)
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The Parliamentary Under-Secretary of State for Defence (Mr Andrew Robathan)
Following a review into support provided to senior officers, the Ministry of Defence (MOD) has disestablished the status of “Official Service Residence” this financial year.
The MOD is committed to identifying efficiencies and savings where possible whilst maintaining essential operational capability. As part of this commitment a comprehensive review into the support provided to senior officers has been conducted and concluded that areas of the business could be improved by simplifying the management of service families accommodation and by harmonising the support provided to senior officers across defence.
In the past, a number of service properties were granted official service residence status if the post held by the occupant involved significant official entertaining duties. This status conferred an enhanced package of furniture, fixtures and furnishings but it has now been discontinued, so service families accommodation is now all managed to the same standard. In addition, the support provided to more senior officers, such as domestic assistance for official hospitality, has been reduced and harmonised across the services. These changes are captured in a new tri-service policy which also revises the rules and regulations in relation to official hospitality.
These measures will ensure that the support provided is appropriate and driven by business need, and they will lead to savings in due course. The properties that were formerly classed as official service residences will no longer form a separate grouping for purposes of management information.
Pupil Premium 2012-13
(12 years, 10 months ago)
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The Minister of State, Department for Education (Sarah Teather)
I am today confirming the funding available for schools in England in 2012-13, through the pupil premium and what this means in terms of funding per pupil. The pupil premium targets additional money at pupils from the most deprived background to help them achieve their full potential.
In 2012-13 the amount available for the pupil premium will double from £625 million in 2011-12 to £1.25 billion. It will further rise to £2.5 billion by 2014-15.
The Government have decided that eligibility for the pupil premium in 2012-13 will be extended to pupils who have been eligible for free school meals (FSM) at any point in the last six years. Earlier this year we consulted on options for extending the coverage of the pupil premium. As a group, children who have been eligible for FSM at any point in time have consistently lower educational attainment than those who have never been eligible for FSM. Up to £50 million of the £1.25 billion will be used to support a summer school programme to help the most disadvantaged pupils make the transition from primary to secondary school. This approach received the highest support with 44% of those responding backing its introduction.
Increasing overall funding for the premium next year to £1.25 billion will enable the coverage of the premium to be extended to a further 500,000 million pupils, while at the same time increasing the level of the premium from £488 to £600 per pupil. This will ensure that a higher proportion of underachieving children are able to benefit from the extra funding provided through the premium.
Schools will have the freedom to spend the premium, which is additional to the underlying schools budget, in a way they think will best support the raising of attainment for the most vulnerable pupils.
We urge schools and local authorities to encourage parents to register their child as eligible for free school meals so that each school receives their maximum pupil premium entitlement.
To ensure transparency and accountability, schools will be required from September 2012 to publish online information about how they have used their pupil premium allocations. New measures will be included in the performance tables that will capture the attainment of pupils covered by the pupil premium.
We will continue to provide the pupil premium for children in care who have been looked after for more than six months, recognising that they need additional support to help them raise their educational achievement.
We will also continue to provide a premium for children of parents in the armed services, who face particular challenges. The level of this service child premium will be £250 in 2012-13, up from £200 in 2011-12.
Annex A
Accompanying documents
These products can be found online at:
http://www.education.gov.uk/schools/adminandfinance/financialmanagement/schoolsrevenuefunding
Example pupil premium allocations using the Ever 6 indicator applied to the January 2011 school census.
Review of Teachers' Standards
(12 years, 10 months ago)
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The Secretary of State for Education (Michael Gove)
Sally Coates is today submitting to me the second and final report of her independent review of teachers’ standards.
I established the review in March this year. Chaired by Mrs Coates, principal of Burlington Danes Academy, it brought together leading head teachers, teachers and other educational experts. The review was tasked with establishing new standards that are clear, unequivocal and easy to use, and which can support teachers’ professional development and performance management.
The review’s first report, submitted to me on 14 July 20111, recommended that a single new set of teachers’ standards should be established to replace the existing standards for qualified teacher status and the core professional standards. I accepted those recommendations, and the new teachers’ standards will come into effect in September 20122.
The Government welcomed Mrs Coates’s recommendations to establish streamlined new teachers’ standards that set out very clearly and concisely the elements of high-quality teaching that should be expected of every teacher. The new standards place a welcome emphasis on the importance of good subject knowledge, behaviour management, and meeting the needs of pupils of all abilities and aptitudes. We are committed to raising the quality of teaching in all our schools, so that pupils and their parents can be confident that they are receiving the highest quality education. Clear and rigorous standards play an important role in ensuring that high quality of teaching that all should expect.
The review’s second report is now recommending that the existing post-threshold, excellent teacher and advanced skills teacher standards should be discontinued as standards. Further, the review recommends that a new master teacher standard should be introduced to define the characteristics of the most effective classroom teachers.
We welcome the proposal to establish a new standard that identifies and recognises those teachers who are demonstrating excellent practice in the classroom, and who are making the most significant positive impact on their pupils. The proposal of a single master teacher standard has the potential to bring much greater simplicity and clarity to what is at present a complex and highly bureaucratic system of standards.
My Department will now take forward further work to explore the implications of discontinuing the current post-threshold, excellent teacher and advanced skills teacher standards. This will include asking the school teachers’ review body to consider the implications for teachers’ pay.
The first and final reports of the review are published on the Department for Education’s website:
http://www.education.gov.uk/schools/teachingandlearning/reviewofstandards
Copies of both reports, and of my correspondence with Mrs Coates, have been placed in the Libraries of both Houses.
1http://media.education.gov.uk/assets/files/pdf/r/first%20report%20-%2012%20july%202011.pdf
2http://media.education.gov.uk/assets/files/pdf/l/letter%20from%20michael%20gove%20to%20sally%20coates.pdf
Environment Council (19 December 2011)
(12 years, 10 months ago)
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The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman)
I will represent the UK at the Environment Council in Brussels on 19 December.
At this Council, the presidency will seek the adoption of Council conclusions on the EU biodiversity strategy to 2020: towards implementation; and on the road map to a resource efficient Europe.
Ministers will exchange views on the outcome of the 17th session of the conference of the parties to the United Nations framework convention on climate change and the 7th session of the meeting of the parties to the Kyoto protocol in Durban, 28 November to 9 December 2011.
Ministers will also hear progress reports on: a proposal for a regulation of the European Parliament and of the Council concerning the export and import of hazardous chemicals (recast); a proposal for a directive of the European Parliament and of the Council amending Directive 1999/32/EC as regards the sulphur content of marine fuels; and a proposal for a directive of the European Parliament and of the Council on control of major accident hazards involving dangerous substances.
The following topics will be covered under “any other business”, either via a report or presentation from the Commission, presidency, or a member state:
Convention on migratory species;
Preparing a global legally binding instrument on mercury;
Preparatory meetings for Rio+20;
“Planning for biodiversity”;
EU eastern partnership countries’ co-operation in climate policy;
Restriction or prohibition of genetically modified organisms;
Protection and sustainable development of the Carpathians;
Priority substances in water policy;
Programme for the environment and climate action (LIFE);
Monitoring and reporting greenhouse gas emissions relevant to climate change at a national and European Union-level;
Fuel quality directive;
Implementation of regulation on fluorinated greenhouse gases;
EU steps to reduce plastic carrier bag usage;
Establishing a common European industrial risk sharing facility;
Solution for a green economy;
Emissions trading scheme/aviation;
Combating desertification;
Control of trans-boundary movement of hazardous wastes and their disposal;
REACH and the candidate list of substances of very high concern;
Annual growth survey;
Work programme of incoming presidency.
General Affairs Council (5 December 2011)
(12 years, 10 months ago)
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The Minister for Europe (Mr David Lidington)
I attended the General Affairs Council (GAC) in Brussels on 5 December.
The GAC was chaired by the EU presidency, Mikolaj Dowgielewicz, Secretary of State for European Affairs of Poland. A provisional report of the meeting and all conclusions adopted can be found at:
http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/EN/genaff/126578.pdf.
The agenda items covered were as follows:
Multiannual Financial Framework (MFF)
In a public session, Ministers noted the presidency’s report on MFF which can be found at:
http://register.consilium.europa.eu/pdf/en/11/st17/st17448-re01.en11.pdf.
The incoming Danish presidency undertook to take forward this work with the aim of adopting the MFF by the end of 2012.
Preparation for the December European Council
Ministers discussed preparations for the December European Council with the President of the Council, Herman Van Rompuy.
On the eurozone, I and others stressed the need for increased transparency and full interaction between the 17 eurozone members and the 10 non-members.
During discussions on Council conclusions, I set out UK views on energy and made proposals for references to our shared concerns about the regime in Iran.
My right hon. Friend the Prime Minister will report to Parliament after he has attended the European Council on 8-9 December.
Commission Work Programme for 2012
The Commissioner for Inter-Institutional Relations and Administration, Maros Sefcovic, presented the Commission’s work programme for 2012 (see following link). The report cites restoring the EU’s economy as its top priority.
http://register.consilium.europa.eu/pdf/en/11/st17/st17394.en11.pdf.
Annual Growth Survey
Commissioner Sefcovic also outlined key elements of the 2012 annual growth survey (see following link). The incoming EU presidency, Denmark, added that they would hold a series of bilateral discussions with member states on the report in January 2012.
http://register.consilium.europa.eu/pdf/en/11/st17/st17229.en11.pdf.
Enlargement
In its conclusions (see link at the beginning of this statement) the Council reiterated the importance of the enlargement process in generating far-reaching political and economic reform and securing stability and democracy; and looked forward to developing a new approach towards those negotiating chapters dealing with judiciary and fundamental rights and justice, freedom and security, tackling them early in the enlargement process. The Council welcomed Turkey’s continued commitment to the negotiation process and the political reform agenda, and, with strong support from me, positively noted the Commission’s proposal for a positive agenda with Turkey in support of negotiations. The Council welcomed the successful completion of accession negotiations with Croatia, while also highlighting the need for continued efforts to reform further where necessary, and looked forward to the signature of the accession treaty in the margins of the December European Council.
On the western Balkans, I reiterated the UK’s strong commitment to the future of all countries of the western Balkans being in the EU once the required conditions are met. Discussion was particularly focused on Serbia and Kosovo. On Serbia, the Council agreed that progress on Serbia’s relationship with Kosovo was the key criterion for movement on their EU path. A decision on Serbia’s candidate status would be taken at the December European Council. The Council also agreed further tangible steps towards Kosovo’s EU future. The Council took note of the progress Montenegro has made towards opening accession negotiations, which would also be considered at the December European Council.
European Court of Justice
The presidency made a short presentation on the state of play regarding proposals to improve the efficiency of the Court.
Justice and Home Affairs Pre-Council Statement
(12 years, 10 months ago)
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The Secretary of State for the Home Department (Mrs Theresa May)
The Justice and Home Affairs Council is due to be held on the 13 and 14 December in Brussels. My right hon. Friend, the Secretary of State for Justice, the Scottish Solicitor-General, (Lesley Thomson) and I will attend on behalf of the United Kingdom. As the provisional agenda stands, the following items will be discussed.
The Council will begin in mixed Committee with Norway, Iceland, Liechtenstein and Switzerland (non-EU Schengen states). There will be an update, supported by a written report, on the Commission-led project to implement the central element of the second generation Schengen Information System (SIS II); the UK will continue to reiterate its support for the continuation of the current SIS II project.
There will also be a state of play on certain issues regarding the draft regulation amending Council Regulation (EC) No 539/2001 which lists the third countries whose nationals must be in possession of visas when crossing the external borders and those whose nationals are exempt from that requirement. The UK is not bound by this regulation as we do not participate in the migration aspects of the Schengen acquis.
The presidency will invite an exchange of views by member states on the EU response to increased migration pressures. This item builds on discussions at the last two Councils; it will include combating illegal migration in the context of migration flows from the south-east (including the Greek-Turkish border) and the southern Mediterranean. The UK supports increased efforts to combat illegal flows across the external border and within the EU, including closer co-operation between Frontex, the European Asylum Support Office and Europol. We believe this should be linked to further work “upstream” in countries of origin and transit, using the tools of the EU’s global approach to migration, as well as joint efforts to combat the abuse of free movement.
Over lunch the presidency will seek a steer from Ministers on the key issues blocking negotiations regarding Schengen governance, namely the choice of legal base for the Schengen evaluation mechanism and the role the Commission should play in taking decisions to reintroduce border controls.
In both mixed Committee and main Committee there will be a presentation by the Commission and first exchange of views on proposals for new JHA funding programmes under the multi-annual financial framework (MFF) 2014-2020. The package includes a communication and proposals for four regulations establishing a new internal security fund and the asylum migration fund (AMF). While the Government welcome the flexibility and potential efficiency that will be offered from merging the six existing funding programmes into two programmes, we are concerned about the size of the overall budget proposed by the Commission. We will also need to consider our participation under the JHA opt-in arrangements.
The presidency will seek support for its proposal on a process for early warning, preparedness and management of asylum crises. Instead of a clause allowing transfers under the Dublin regulation to be suspended, the proposal would envisage a provision in the Dublin regulation requiring member states to provide data about their asylum system to the European Asylum Support Office (EASO) and for action plans to be drawn up if it appears that their systems may be facing difficulties. The Government can support this in principle provided the action plans are drawn up by the member states themselves, acting through EASO, and not by the Commission.
The Commission will then present its proposals on the global approach to migration and mobility. The current global approach provides the overarching framework for much of the EU’s work with third-country partners on migration. The UK welcomes the Commission’s proposals for a renewed global approach, which should provide additional opportunities to work in conjunction with EU and international partners on migration, including combating illegal immigration. While we welcome a more comprehensive global approach, it is essential that it remains non-binding, and allows member states to decide on participation in various initiatives on a case-by-case basis. The Government will continue to ensure that any participation is compatible with the UK’s immigration policy.
The presidency may attempt to secure agreement on the date for the removal of controls on Bulgaria and Romania’s sea and air borders with countries in the Schengen area. This is dependent on the outcome of discussions at the European Council on 9 December. The UK will not have a vote at this Council on this issue as it concerns borders elements in which we do not participate.
The Council will be presented with a package of counter-terrorism (CT) items covering the EU action plan on combating terrorism, the EU CT strategy and the report on the implementation of the strategy on terrorist financing. The UK welcomes the work that is being done at an EU-level to mitigate the terrorist threat, in particular the work around data-sharing and aligning internal and external CT activities. It will be important moving forward that the member states stay focused on the implementation of the chemical, biological, radiological and nuclear (CBRN) and air cargo security action plans.
The presidency will want to adopt the Council decision and to sign the EU-US passenger name records (PNR) agreement, which was published on 24 November. The agreement will provide an unequivocal basis in EU law for the transfer of PNR data by EU-based carriers to the US Department of Homeland Security. The Government support this proposal and have agreed to waive our treaty rights to three months consideration of opt in so that the Council can proceed without us. However, the text remains subject to scrutiny in Parliament and we have therefore not exercised our opt-in in order to give the Committees an opportunity to consider the agreement.
There will be a discussion on cross-border itinerant criminality. The issue of “mobile itinerant organised crime groups” was identified as one of the eight EU crime priorities for 2012-13 and is being addressed as one of eight projects under the EU policy cycle (on tackling organised crime), being overseen by the Standing Committee on operational co-operation on internal security (COSI). The UK has decided not to participate in this project at this time as the UK does not focus on itinerant criminals as a distinct group (“itinerant groups” do not feature in the UK threat assessment as we consider all organised crime by crime-type and threat area).
The Justice day will begin with the presidency seeking to obtain general agreement on the provisions of the proposed regulation on succession and wills. As the UK has not opted in to this proposal it will not participate in any vote on these guidelines.
The presidency will also be looking to reach agreement on certain elements of the proposal to modify the regulation on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Brussels I). The regulation lays down rules governing the jurisdiction of courts and the recognition and enforcement of cross-border judgments in civil and commercial matters in the member states. The Government opted-in to the proposal in March.
Next there will be a debate of specific issues of the regulation on a EU common sales law. This proposal was presented at the October JHA Council where the Commission confirmed it would offer an alternative contract law regime that would form part of the law of each member state but would not harmonise national contract law systems.
The Council will discuss the European Investigation Order (EIO). The EIO is a draft directive aimed at streamlining the process of mutual legal assistance between participating EU countries. The UK has opted in. The presidency will be seeking to reach a general approach (agreement) on the EIO. A partial general approach to articles 1-18 was achieved at the June JHA Council. There have been significant improvements to the original draft of the EIO and we are considering our position in relation to the current text. The EIO also remains subject to parliamentary scrutiny.
There will then be a debate on the draft directive on establishing minimum standards on the rights, support and protection of victims of crime. The presidency will be looking to agree a general approach and a scrutiny waiver has been granted by both Houses.
The presidency will then provide an update regarding the draft directive on the right of access to a lawyer in criminal proceedings and on the right to communicate upon arrest. This is the third proposal on the EU’s criminal procedural rights road map which sets minimum standards for the rights of the defence. This presidency also gave an update on this directive at the October JHA Council.
Next, the Commission will present proposals for two new funding programmes in the area of justice, rights and citizenship for the period 2014-2020. These are to replace the existing funding programmes in the current fundamental rights and justice framework. The overall objectives of the proposed justice programme are to promote judicial co-operation in civil and criminal matters, facilitate access to justice and to prevent and reduce drug supply and demand, while the objective of the rights and citizenship programme is to contribute to the creation of an area where the rights set out in the treaty on the functioning of the European Union, and in the charter of fundamental rights are promoted and protected.
Finally, the presidency will be providing a state of play update to Council on the negotiations on EU accession to ECHR. The negotiating mandate was agreed at the JHA Council in June 2010, and a draft version of an accession agreement was produced by experts with knowledge of the convention system in June 2011. This is now subject to further consideration.
Bereavement Benefit (Public Consultation)
(12 years, 10 months ago)
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The Minister of State, Department for Work and Pensions (Steve Webb)
One of the key tasks that the Government have faced over the past year and a half has been to fundamentally reassess the role the welfare system should play in the 21st century.
We recognise that spousal bereavement is a life-changing event. Emotionally, socially, economically, bereaved people face the task of re-establishing themselves and adjusting to their new circumstances. We know that this journey varies considerably according to personal circumstance, with people drawing on a wide range of support mechanisms to get them through. Bereavement benefits form an important part of the state safety net at this time.
But these benefits have fallen outside the recent reviews of the wider welfare system. Indeed, they have rarely undergone any kind of critical scrutiny to establish whether they provide effective support after the loss of a spouse or civil partner.
To address this we are today publishing a consultation paper on the future of bereavement benefits. We are seeking views on how in the future these payments should support those of working age who suffer the loss of a husband, wife or civil partner. We are aware we need to strike a balance between providing appropriate support at a critical time, while encouraging those of working age to support themselves and their families through employment when they feel able to do so.
Payments made under the war pensions scheme or armed forces compensation scheme will not be affected by this review. The review will not impact those already in receipt of bereavement benefits at the point at which a new scheme is introduced.
A copy of the document will be available in the Vote Office later today.
Further details will be available on the Department for Work and Pensions website at http://www.dwp.gov.uk/consultations/2011/bereavement-benefit.shtml.
Social Security Benefits Uprating
(12 years, 10 months ago)
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The Minister of State, Department for Work and Pensions (Steve Webb)
I am pleased to announce the proposed social security benefits rates for 2012, which are set out in the table below. The annual up-rating of benefits will take place for state pensions and most other benefits in the first full week of the tax year. In 2012, this will be the week beginning 9 April. A corresponding provision will be made in Northern Ireland.
(Weekly rates unless otherwise shown) | 2011 | 2012 |
|---|---|---|
attendance allowance | ||
higher rate | 73.60 | 77.45 |
lower rate | 49.30 | 51.85 |
bereavement benefit | ||
Bereavement payment (lump sum) | 2000.00 | 2000.00 |
Widowed parent's allowance | 100.70 | 105.95 |
Bereavement Allowance | ||
standard rate | 100.70 | 105.95 |
age-related | ||
age 54 | 93.65 | 98.53 |
53 | 86.60 | 91.12 |
52 | 79.55 | 83.70 |
51 | 72.50 | 76.28 |
50 | 65.46 | 68.87 |
49 | 58.41 | 61.45 |
48 | 51.36 | 54.03 |
47 | 44.31 | 46.62 |
46 | 37.26 | 39.20 |
45 | 30.21 | 31.79 |
capital limits—rules common to Income Support, Income based Jobseeker's Allowance, income-related Employment and Allowance, Pension Credit, Housing Benefit and Council Tax Benefit unless stated otherwise | ||
upper limit | 16000.00 | 16000.00 |
upper limit - Pension Credit guarantee credit and those getting Housing Benefit /Council Tax Benefit and Pension Credit guarantee credit | No limit | No limit |
Amount disregarded - all benefits except Pension Credit and Housing Benefit and Council Tax benefit for those above the qualifying age for Guarantee Credit | 6000.00 | 6000.00 |
Amount disregarded - Pension Credit and Housing Benefit and Council Tax Benefit for those above the qualifying age for Pension Credit | 10000.00 | 10000.00 |
child disregard (not Pension Credit or Employment and Support Allowance) | 3000.00 | 3000.00 |
amount disregarded (living in RC/NH) | 10000.00 | 10000.00 |
Tariff income | ||
£1 for every £250, or part thereof, between the amount of capital disregarded and the capital upper limit | ||
Tariff income - Pension Credit and HB/CTB where claimant/ partner is over Guarantee Credit qualifying age | ||
£1 for every £500, or part thereof, between the amount of | ||
capital disregarded and capital upper limit | ||
Carer’s allowance | 55.55 | 58.45 |
council tax benefit | ||
Personal allowances | ||
Single | ||
18 to 24 | 53.45 | 56.25 |
25 or over | 67.50 | 71.00 |
entitled to main phase ESA | 67.50 | 71.00 |
lone parent | 67.50 | 71.00 |
Couple | 105.95 | 111.45 |
dependent children | 62.33 | 64.99 |
Pensioner | ||
Single/lone parent has attained the qualifying age for Pension Credit but under 65. | 137.35 | 142.70 |
couple - one or both has attained the qualifying age for Pension Credit but both under 65 | 209.70 | 217.90 |
single/lone parent - 65 and over | 157.90 | 161.25 |
couple - one or both 65 and over | 236.80 | 241.65 |
Premiums | ||
Family | 17.40 | 17.40 |
family (lone parent rate) | 22.20 | 22.20 |
Disability | ||
Single | 28.85 | 30.35 |
Couple | 41.10 | 43.25 |
enhanced disability | ||
Single | 14.05 | 14.80 |
disabled child | 21.63 | 22.89 |
Couple | 20.25 | 21.30 |
severe disability | ||
Single | 55.30 | 58.20 |
couple (lower rate) | 55.30 | 58.20 |
couple (higher rate) | 110.60 | 116.40 |
disabled child | 53.62 | 56.63 |
Carer | 31.00 | 32.60 |
ESA components | ||
work-related activity | 26.75 | 28.15 |
Support | 32.35 | 34.05 |
Alternative maximum Council Tax Benefit | ||
second adult on IS, JSA(IB), ESA(IR) or Pension Credit | 25% of Council Tax | 25% of Council Tax |
first adult(s) student(s) | 100% of Council Tax | 100% of Council Tax |
second adult's gross income : | ||
-under £180.00 | 15% of Council Tax | 15% of Council Tax |
-£180.00 to £234.99 | 7.5% of Council Tax | 7.5% of Council Tax |
deductions—rules common to Income Support, Jobseeker's Allowance, Employment and Support Allowance, Pension Credit, Housing Benefit and Council tax benefit unless stated otherwise | ||
Non-dependant deductions from housing benefit and from IS, JSA(IB), ESA(IR) and Pension Credit | ||
aged 25 and over in receipt of IS and JSA(IB), | ||
in receipt of main phase ESA(IR), | ||
aged 18 or over, not in remunerative work | 9.40 | 11.45 |
aged 18 or over and in remunerative work | ||
- gross income: less than £124.00 | 9.40 | 11.45 |
- gross income: £124 to £182.99 | 21.55 | 26.25 |
- gross income: £183 to £237.99 | 29.60 | 36.10 |
- gross income: £238 to £315.99 | 48.45 | 59.05 |
- gross income: £316 to £393.99 | 55.20 | 67.25 |
- gross income: £394 and above | 60.60 | 73.85 |
Non-dependant deductions from council tax benefit | ||
aged 18 or over and in remunerative work | ||
- gross income: £394 or more | 8.60 | 9.90 |
- gross income: £316 - £393.99 | 7.20 | 8.25 |
- gross income: £183 - £315.99 | 5.70 | 6.55 |
- gross income less than £183 | 2.85 | 3.30 |
others, aged 18 or over | 2.85 | 3.30 |
Deductions from housing benefit | ||
Service charges for fuel | ||
Heating | 21.55 | 25.50 |
hot water | 2.50 | 2.95 |
Lighting | 1.75 | 2.05 |
Cooking | 2.50 | 2.95 |
Amount ineligible for meals | ||
three or more meals a day | ||
single claimant | 24.05 | 25.30 |
each person in family aged 16 or over | 24.05 | 25.30 |
each child under 16 | 12.15 | 12.80 |
less than three meals a day | ||
single claimant | 16.00 | 16.85 |
each person in family aged 16 or over | 16.00 | 16.85 |
each child under 16 | 8.05 | 8.45 |
breakfast only - claimant and each member of the family | 2.95 | 3.10 |
Amount for personal expenses (not HB/CTB) | 22.60 | 23.25 |
Third party deductions from IS, JSA(IB), ESA(IR) and Pension Credit for; | ||
arrears of housing, fuel and water costs | 3.40 | 3.55 |
council tax etc. and deductions for ELDS and ILS. | ||
child support, contribution towards maintenance (CTM) | ||
standard deduction | 6.80 | 7.10 |
lower deduction | 3.40 | 3.55 |
arrears of Community Charge | ||
court order against claimant | 3.40 | 3.55 |
court order against couple | 5.30 | 5.60 |
fine or compensation order | ||
standard rate | 5.00 | 5.00 |
lower rate | 3.40 | 3.55 |
Maximum deduction rates for recovery of overpayments (not CTB/JSA(C)/ESA(C)) | ||
ordinary overpayments | 10.20 | 10.65 |
where claimant convicted of fraud | 13.60 | 17.75 |
Deductions from JSA(C) and ESA (C) | ||
Arrears of Comm. Charge, Council Tax, fines & overpayment recovery | ||
Age 16-24 | 17.81 | 18.75 |
Age 25 + | 22.50 | 23.66 |
Max. dedn for arrears of Child Maintenance (CTM) | ||
Age 16-24 | 17.81 | 18.75 |
Age 25 + | 22.50 | 23.66 |
Dependency Increases | ||
Adult dependency increases for spouse or person looking after children —payable with; | ||
State Pension on own insurance (Cat A or B) | 58.80 | 61.85 |
long term Incapacity Benefit ISCS Group 13 Type 5 | 54.75 | 57.60 |
Severe Disablement Allowance | 32.90 | 34.60 |
Carers Allowance | 32.70 | 34.40 |
short-term Incapacity Benefit (over state pension age) | 52.70 | 55.45 |
short-term Incapacity Benefit (under State Pension age) | 42.65 | 44.85 |
Child Dependency Increases - payable with; | ||
State Pension; Widowed Mothers/Parents Allowance; | 11.35 | 11.35 |
short-term Incapacity benefit—higher rate or over state pension age; | ||
long-term Incapacity Benefit; Carer's Allowance; Severe Disablement | ||
Allowance; Industrial Death Benefit (higher rate); | ||
nb—The rate of child dependency increase is adjusted where it is payable for the eldest child for whom child benefit is also paid. The weekly rate in such cases is reduced by the difference (less £3.65) between the ChB rates for the eldest and subsequent children. | 8.10 | 8.10 |
disability living allowance | ||
Care Component | ||
Highest | 73.60 | 77.45 |
Middle | 49.30 | 51.85 |
Lowest | 19.55 | 20.55 |
Mobility Component | ||
Higher | 51.40 | 54.05 |
Lower | 19.55 | 20.55 |
disregards | ||
Housing Benefit and Council Tax Benefit | ||
Earnings disregards | ||
standard (single claimant) | 5.00 | 5.00 |
Couple | 10.00 | 10.00 |
higher (special occupations/circumstances) | 20.00 | 20.00 |
lone parent | 25.00 | 25.00 |
childcare charges | 175.00 | 175.00 |
childcare charges (2 or more children) | 300.00 | 300.00 |
permitted work higher | 95.00 | 97.50 |
permitted work lower | 20.00 | 20.00 |
Other Income disregards | ||
adult maintenance disregard | 15.00 | 15.00 |
war disablement pension and war widows pension | 10.00 | 10.00 |
widowed mothers/parents allowance | 15.00 | 15.00 |
Armed Forces Compensation Scheme | 10.00 | 10.00 |
student loan | 10.00 | 10.00 |
student's covenanted income | 5.00 | 5.00 |
Income from boarders (plus 50% of the balance) | 20.00 | 20.00 |
additional earnings disregard | 17.10 | 17.10 |
Income from subtenants (£20 fixed from April 08) | 20.00 | 20.00 |
Income Support, income-based Jobseeker's Allowance, | ||
Income-related Employment and Support Allowance and Pension Credit | ||
Earnings disregards | ||
standard (single claimant) | 5.00 | 5.00 |
Couple | 10.00 | 10.00 |
higher (special occupations/circumstances) | 20.00 | 20.00 |
Other Income disregards | ||
war disablement pension and war widows pension | 10.00 | 10.00 |
widowed mothers/parents allowance | 10.00 | 10.00 |
Armed Forces Compensation Scheme | 10.00 | 10.00 |
student loan (not Pension Credit) | 10.00 | 10.00 |
student's covenanted income (not Pension Credit) | 5.00 | 5.00 |
Income from boarders (plus 50% of the balance) | 20.00 | 20.00 |
Income from subtenants (£20 fixed from April 08) | 20.00 | 20.00 |
earnings rules | ||
Carers Allowance | 100.00 | 100.00 |
Limit of earnings from councillor's allowance | 95.00 | 97.50 |
Permitted work earnings limit – higher | 95.00 | 97.50 |
- lower | 20.00 | 20.00 |
Industrial injuries unemployability supplement | 4940.00 | 5070.00 |
permitted earnings level (annual amount) | ||
Earnings level at which adult dependency (ADI) increases are | ||
Affected with: | ||
short-term incapacity benefit where claimant is | ||
(a) under state pension age | 42.65 | 44.85 |
(b) over state pension age | 52.70 | 55.45 |
state pension, long term incapacity benefit, | ||
severe disablement allowance, unemployability | ||
supplement - payable when dependant | ||
(a) is living with claimant | 67.50 | 71.00 |
(b) still qualifies for the tapered earnings rule | 45.09 | 45.09 |
Earnings level at which ADI is affected when dependent | ||
is not living with claimant; | ||
state pension. | 58.80 | 61.85 |
long-term incapacity benefit. | 54.75 | 57.60 |
unemployability supplement. | 55.55 | 58.45 |
severe disablement allowance | 32.90 | 34.60 |
Carers allowance | 32.70 | 34.40 |
Earnings level at which child dependency increases | ||
are affected | ||
for first child | 205.00 | 215.00 |
additional amount for each subsequent child | 27.00 | 28.00 |
Pension income threshold for incapacity benefit | 85.00 | 85.00 |
Pension income threshold for contributory Employment Support Allowance | 85.00 | 85.00 |
employment and support allowance | ||
Personal Allowances | ||
Single | ||
under 25 | 53.45 | 56.25 |
25 or over | 67.50 | 71.00 |
lone parent | ||
under 18 | 53.45 | 56.25 |
18 or over | 67.50 | 71.00 |
Couple | ||
both under 18 | 53.45 | 56.25 |
both under 18 with child | 80.75 | 84.95 |
both under 18 (main phase) | 67.50 | 71.00 |
both under 18 with child (main phase) | 105.95 | 111.45 |
one 18 or over, one under 18 (certain conditions apply) | 105.95 | 111.45 |
both over 18 | 105.95 | 111.45 |
claimant under 25, partner under 18 | 53.45 | 56.25 |
claimant 25 or over, partner under 18 | 67.50 | 71.00 |
claimant (main phase), partner under 18 | 67.50 | 71.00 |
Premiums | ||
enhanced disability | ||
Single | 14.05 | 14.80 |
Couple | 20.25 | 21.30 |
severe disability | ||
Single | 55.30 | 58.20 |
couple (lower rate) | 55.30 | 58.20 |
couple (higher rate) | 110.60 | 116.40 |
Carer | 31.00 | 32.60 |
Pensioner | ||
single with WRAC | 43.10 | 43.55 |
single with support component | 37.50 | 37.65 |
single with no component | 69.85 | 71.70 |
couple with WRAC | 77.00 | 78.30 |
couple with support component | 71.40 | 72.40 |
couple with no component | 103.75 | 106.45 |
Components | ||
Work-related activity | 26.75 | 28.15 |
Support | 32.35 | 34.05 |
Housing Benefit | ||
Personal allowances | ||
Single | ||
Under 25 | 53.45 | 56.25 |
25 or over | 67.50 | 71.00 |
entitled to main phase ESA | 67.50 | 71.00 |
lone parent | ||
Under 18 | 53.45 | 56.25 |
18 or over | 67.50 | 71.00 |
entitled to main phase ESA | 67.50 | 71.00 |
Couple | ||
both under 18 | 80.75 | 84.95 |
one or both 18 or over | 105.95 | 111.45 |
claimant entitled to main phase ESA | 105.95 | 111.45 |
dependent children | 62.33 | 64.99 |
Pensioner | ||
single/lone parent has attained the qualifying age for Pension Credit but under 65. | 137.35 | 142.70 |
Couple—one or both has attained the qualifying age for Pension Credit but both under 65 | 209.70 | 217.90 |
single / lone parent—65 and over | 157.90 | 161.25 |
Couple—one or both 65 and over | 236.80 | 241.65 |
Premiums | ||
Family | 17.40 | 17.40 |
Family (lone parent rate) | 22.20 | 22.20 |
Disability | ||
Single | 28.85 | 30.35 |
Couple | 41.10 | 43.25 |
Enhanced disability | ||
Single | 14.05 | 14.80 |
disabled child | 21.63 | 22.89 |
Couple | 20.25 | 21.30 |
Severe disability | ||
Single | 55.30 | 58.20 |
Couple (lower rate) | 55.30 | 58.20 |
Couple (higher rate) | 110.60 | 116.40 |
disabled child | 53.62 | 56.63 |
Carer | 31.00 | 32.60 |
ESA components | ||
work-related activity | 26.75 | 28.15 |
Support | 32.35 | 34.05 |
incapacity benefit | ||
Long-term Incapacity Benefit | 94.25 | 99.15 |
Short-term Incapacity Benefit (under state pension age) | ||
lower rate | 71.10 | 74.80 |
higher rate | 84.15 | 88.55 |
Short-term Incapacity Benefit (over state pension age) | ||
lower rate | 90.45 | 95.15 |
higher rate | 94.25 | 99.15 |
Increase of Long-term Incapacity Benefit for age | ||
higher rate | 13.80 | 11.70 |
lower rate | 5.60 | 5.90 |
Invalidity Allowance (Transitional) | ||
Higher rate | 13.80 | 11.70 |
middle rate | 7.10 | 5.90 |
lower rate | 5.60 | 5.90 |
Income Support | ||
Personal Allowances | ||
Single | ||
under 25 | 53.45 | 56.25 |
25 or over | 67.50 | 71.00 |
lone parent | ||
under 18 | 53.45 | 56.25 |
18 or over | 67.50 | 71.00 |
Couple | ||
both under 18 | 53.45 | 56.25 |
both under 18—higher rate | 80.75 | 84.95 |
one under 18, one under 25 | 53.45 | 56.25 |
one under 18, one 25 and over | 67.50 | 71.00 |
both 18 or over | 105.95 | 111.45 |
dependent children | 62.33 | 64.99 |
Premiums | ||
family / lone parent | 17.40 | 17.40 |
pensioner (applies to couples only) | 103.75 | 106.45 |
Disability | ||
Single | 28.85 | 30.35 |
Couple | 41.10 | 43.25 |
enhanced disability | ||
Single | 14.05 | 14.80 |
disabled child | 21.63 | 22.89 |
Couple | 20.25 | 21.30 |
severe disability | ||
Single | 55.30 | 58.20 |
couple (lower rate) | 55.30 | 58.20 |
couple (higher rate) | 110.60 | 116.40 |
disabled child | 53.62 | 56.63 |
Carer | 31.00 | 32.60 |
Relevant sum for strikers | 36.00 | 38.00 |
Industrial Death Benefit | ||
Widow’s pension | ||
higher rate | 102.15 | 107.45 |
lower rate | 30.65 | 32.24 |
Widower’s pension | 102.15 | 107.45 |
industrial injuries disablement benefit | ||
18 and over, or under 18 with dependants | ||
100% | 150.30 | 158.10 |
90% | 135,27 | 142.29 |
80% | 120.24 | 126.48 |
70% | 105.21 | 110.67 |
60% | 90.18 | 94.86 |
50% | 75.15 | 79.05 |
40% | 60.12 | 63.24 |
30% | 45.09 | 47.43 |
20% | 30.06 | 31.62 |
Under 18 | ||
100% | 92.10 | 96.90 |
90% | 82.89 | 87.21 |
80% | 73.68 | 77.52 |
70% | 64.47 | 67.83 |
60% | 55.26 | 58.14 |
50% | 46.05 | 48.45 |
40% | 36.84 | 38.76 |
30% | 27.63 | 29.07 |
20% | 18.42 | 19.38 |
Maximum life gratuity (lump sum) | 9980.00 | 10500.00 |
Unemployability Supplement | 92.90 | 97.75 |
increase for early incapacity | ||
higher rate | 19.25 | 20.25 |
middle rate | 12.40 | 13.00 |
lower rate | 6.20 | 6.50 |
Maximum reduced earnings allowance | 60.12 | 63.24 |
Maximum retirement allowance | 15.03 | 15.81 |
Constant attendance allowance | ||
exceptional rate | 120.40 | 126.60 |
intermediate rate | 90.30 | 94.95 |
normal maximum rate | 60.20 | 63.30 |
part-time rate | 30.10 | 31.65 |
Exceptionally severe disablement allowance | 60.20 | 63.30 |
Jobseeker’s Allowance | ||
Contribution-based JSA—Personal rates | ||
under 25 | 53.45 | 56.25 |
25 or over | 67.50 | 71.00 |
Income-based JSA— personal allowances | ||
under 25 | 53.45 | 56.25 |
25 or over | 67.50 | 71.00 |
lone parent | ||
under 18 | 53.45 | 56.25 |
18 or over | 67.50 | 71.00 |
Couple | ||
both under 18 | 53.45 | 56.25 |
both under 18—higher rate | 80.75 | 84.95 |
one under 18, one under 25 | 53.45 | 56.25 |
one under 18, one 25 and over | 67.50 | 71.00 |
both 18 or over | 105.95 | 111.45 |
dependent children | 62.33 | 64.99 |
Premiums | ||
family / lone parent | 17.40 | 17.40 |
Pensioner | ||
Single | 69.85 | 71.70 |
Couple | 103.75 | 106.45 |
Disability | ||
Single | 28.85 | 30.35 |
Couple | 41.10 | 43.25 |
enhanced disability | ||
Single | 14.05 | 14.80 |
disabled child | 21.63 | 22.89 |
Couple | 20.25 | 21.30 |
severe disability | ||
Single | 55.30 | 58.20 |
couple (lower rate) | 55.30 | 58.20 |
couple (higher rate) | 110.60 | 116.40 |
disabled child | 53.62 | 56.63 |
Carer | 31.00 | 32.60 |
Prescribed sum for strikers | 36.00 | 38.00 |
Maternity Allowance | ||
Standard rate | 128.73 | 135.45 |
MA threshold | 30.00 | 30.00 |
Pension Credit | ||
Standard minimum guarantee | ||
Single | 137.35 | 142.70 |
Couple | 209.70 | 217.90 |
Additional amount for severe disability | ||
Single | 55.30 | 58.20 |
couple (one qualifies) | 55.30 | 58.20 |
couple (both qualify) | 110.60 | 116.40 |
Additional amount for carers | 31.00 | 32.60 |
Savings credit | ||
threshold—single | 103.15 | 111.80 |
threshold—couple | 164.55 | 178.35 |
maximum—single | 20.52 | 18.54 |
maximum—couple | 27.09 | 23.73 |
Amount for claimant and first spouse in polygamous marriage | 209.70 | 217.90 |
Additional amount for additional spouse | 72.35 | 75.20 |
Non-State Pensions (for Pension Credit purposes) | ||
Statutory minimum increase to non-state pensions | Increase by: | 5.20% |
Pneumoconiosis, Byssinosis, and Miscellaneous Diseases Scheme and the Workmen’s Compensation (Supplementation) | ||
Total disablement allowance and major incapacity | ||
allowance (maximum) | 150.30 | 158.10 |
Partial disablement allowance | 55.55 | 58.45 |
Unemployability supplement | 92.90 | 97.75 |
increases for early incapacity - | ||
higher rate | 19.25 | 20.25 |
middle rate | 12.40 | 13.00 |
lower rate | 6.20 | 6.50 |
Constant attendance allowance | ||
exceptional rate | 120.40 | 126.60 |
intermediate rate | 90.30 | 94.95 |
normal maximum rate | 60.20 | 63.30 |
part-time rate | 30.10 | 31.65 |
Exceptionally severe disablement allowance | 60.20 | 63.30 |
Lesser incapacity allowance | ||
maximum rate of allowance | 55.55 | 58.45 |
based on loss of earnings over | 73.60 | 77.45 |
Severe Disablement Allowance | ||
Basic rate | 62.95 | 69.00 |
Age-related addition (from Dec 90) | ||
Higher rate | 13.80 | 11.70 |
Middle rate | 7.10 | 5.90 |
Lower rate | 5.60 | 5.90 |
State Pension | ||
Category A or B | 102.15 | 107.45 |
Category B (lower)—spouse or civil partner’s insurance | 61.20 | 64.40 |
Category C or D—non-contributory | 61.20 | 64.40 |
Additional pension | Increase by: | 5.20% |
Increments to:- | ||
Basic pension | Increase by: | 5.20% |
Additional pension | Increase by: | 5.20% |
Graduated Retirement Benefit (GRB) | Increase by: | 5.20% |
Inheritable lump sum | Increase by: | 5.20% |
Contracted-out Deduction from AP in respect of pre-April 1988 contracted-out earnings | Nil | Nil |
Contracted-out Deduction from AP in respect of contracted-out earnings from April 1988 to 1997 | Increase by: | 3.00% |
Graduated Retirement Benefit (unit) | 0.1189 | 0.1251 |
Increase of long-term incapacity for age | Increase by: | 5.20% |
Addition at age 80 | 0.25 | 0.25 |
Increase of long-term incapacity for age | ||
higher rate | 19.25 | 20.25 |
lower rate | 9.65 | 10.15 |
Invalidity Allowance (Transitional) for State Pension recipients | ||
higher rate | 19.25 | 20.25 |
middle rate | 12.40 | 13.00 |
lower rate | 6.20 | 6.50 |
Statutory Adoption Pay | ||
Earnings threshold | 102.00 | 107.00 |
Standard Rate | 128.73 | 135.45 |
statutory maternity pay | ||
Earnings threshold | 102.00 | 107.00 |
Standard rate | 128.73 | 135.45 |
Statutory Paternity Pay | ||
Earnings threshold | 102.00 | 107.00 |
Standard Rate | 128.73 | 135.45 |
Additional Statutory Paternity Pay | ||
Earnings threshold | 102.00 | 107.00 |
Standard Rate | 128.73 | 135.45 |
Statutory sick pay | ||
Earnings threshold | 102.00 | 107.00 |
Standard rate | 81.60 | 85.85 |
Widow’s benefit | ||
Widowed mother's allowance | 100.70 | 105.95 |
Widow’s pension | ||
standard rate | 100.70 | 105.95 |
age-related | ||
age 54 (49) | 93.65 | 98.53 |
53 (48) | 86.60 | 91.12 |
52 (47) | 79.55 | 83.70 |
51 (46) | 72.50 | 76.28 |
50 (45) | 65.46 | 68.87 |
49 (44) | 58.41 | 61.45 |
48 (43) | 51.36 | 54.03 |
47 (42) | 44.31 | 46.62 |
46 (41) | 37.26 | 39.20 |
45 (40) | 30.21 | 31.79 |
Note: For deaths occurring before 11 April 1988 refer to age-points shown in brackets. |
Grand Committee
(12 years, 10 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Arrangement of Business
(12 years, 10 months ago)
Grand CommitteeRead Full debate Read Hansard Text
The Deputy Chairman of Committees (Lord Skelmersdale)
My Lords, we have two affirmative instruments before the Grand Committee this afternoon, but it has been agreed by the usual channels that the Grand Committee will adjourn to allow Front-Benchers speaking in the debate on the Intelligence and Security Committee report to be in the Chamber during today’s Statement—apparently, any overlap with the Treasury statutory instruments does not matter. The Hansard staff and the Whips are aware.
Before the first Motion is considered, I remind noble Lords that, in the case of the two statutory instruments, the Motion before the Committee will be that the Committee do consider the statutory instrument in question. The Motions to approve the instruments will be moved in the Chamber in the usual way. In addition to any other adjournment, if there is a Division in the House, the Committee will adjourn for 10 minutes.
Financial Restrictions (Iran) Order 2011
(12 years, 10 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Sassoon
That the Grand Committee do consider the Financial Restrictions (Iran) Order 2011.
Relevant documents: 34th Report from the Joint Committee on Statutory Instruments.
The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, this financial restrictions measure against the Iranian banking sector was introduced on 21 November by my right honourable friend the Chancellor of the Exchequer. The Treasury laid the Financial Restrictions (Iran) Order 2011 before Parliament under its powers in Schedule 7 to the Counter-Terrorism Act 2008. The order contains restrictions requiring UK credit and financial institutions to cease business relationships and transactions with all banks incorporated in Iran, including their branches and subsidiaries wherever they are located, and with the Central Bank of Iran.
I would like to turn first to the rationale for the order. The restriction contained in the order responds to the risk to the national interests of the UK caused by activity in Iran that facilitates the development or production of nuclear weapons. The Government have had serious concerns about Iran’s nuclear activities for some time, and these concerns are shared by the international community. The 18 November board of governors report of the International Atomic Energy Agency, which is the UN body charged with monitoring Iran’s activities, provided further evidence that Iran’s nuclear programme was being used for non-civilian applications. In particular, the report sets out the IAEA’s concerns about,
“possible military dimensions to Iran’s nuclear programme”.
The case for UK action is underlined by the urgent call from the Financial Action Task Force—the FATF—which noted its particular and exceptional concern about Iran’s failure to address the risk of terrorist financing and the serious threat that this poses to the integrity of the international financial system. Other countries share our concerns in respect of Iran. These include the US and Canada, both of which implemented further restrictive measures against Iran on 21 November. The EU also has financial sanctions in place, including further asset-freezing measures against 180 Iranian individuals and entities agreed at the beginning of this month, and is considering future measures to implement.
The Government introduced the Financial Restrictions (Iran) Order 2011 to respond rapidly to further evidence of the risks posed by Iran’s nuclear development programme. Iranian banks play an important role in providing financial services to individuals and entities within Iran’s nuclear and ballistic missile programmes, and many Iranian banks have been sanctioned by the UN and EU for their role in Iran’s proliferation-sensitive activities. Given the UK’s important position as a global financial centre, the UK restrictions will have a major impact on the options available to Iranian banks. This will make it more difficult for Iranian banks to use the international financial system in support of proliferation-sensitive activities. The action also protects the UK financial sector from the risk of unwittingly being used to facilitate activities which support Iran’s nuclear and ballistic missile programmes.
I will now explain the specifics of the order. The order was made under Schedule 7 to the Counter-Terrorism Act 2008, which provides the Treasury with powers to impose a range of financial restrictions in response to certain risks to the UK’s national interests. The powers enable the Treasury to respond to proliferation risks, as we have in this case, and to money-laundering and terrorist financing risks, or where the FATF calls for countermeasures.
Shortly after the restrictions came into effect on 21 November, the Treasury published a series of documents on its public website. These alerted the financial sector to the restrictions and provided guidance on their implementation. These documents were also e-mailed to more than 13,000 subscribers to our e-mail alert system.
In addition, the Treasury worked with the Financial Services Authority, HM Revenue and Customs, and the Export Control Organisation to publicise the restrictions and provide information to firms on the requirements. The documents published by the Treasury on 21 November included six general licences exempting specific activities from the restrictions. These general licences enable credit and financial institutions with existing business relationships or transactions with the entities concerned to manage the cessation of business in an orderly way. They permit them to provide financial services for humanitarian purposes and personal remittances between individuals here and in Iran.
Further licences, whether general or individual, may be granted by the Treasury to manage the impact of the requirements on third parties. Companies affected by the restrictions can apply for a licence of exemption and we are particularly minded to grant licences where UK companies are owed money under existing contracts. This approach is similar to that used in other sanctions.
Firms already have in place procedures and systems to meet obligations relating to financial sanctions and anti-money laundering. They help to minimise the burden of complying with these restrictions. It is expected that compliance costs for the sector as a whole will be moderate, although any institution with significant business relationships with an Iranian bank will face larger costs. Supervision of the financial sector’s compliance with these restrictions will form part of the existing supervisory regime of the Financial Services Authority, HM Revenue and Customs, the Office of Fair Trading and the Department of Enterprise, Trade and Investment Northern Ireland.
Let me conclude by emphasising that this order was issued by the Government to respond to the severe risk that Iran’s nuclear activities posed to the UK’s national interests. This is a strong measure, but it is necessary. Iran’s proliferation-sensitive activities are a serious and ongoing concern for the UK and the international community as a whole. It is vital that we continue to take steps to increase pressure on the Iranian regime and to encourage Iran back to the negotiating table to find a diplomatic solution. For these reasons, I commend the order to the Committee.
Lord Newby
My Lords, I thank the Minister for the clear introduction that he has given to this measure which seems, broadly speaking, to be proportionate. I have just one question. To what extent will Iranian banks be able to continue doing business here direct with companies as opposed to with UK financial sector bodies? I think that the Minister said that they will be able do that. If so, have the Government given any consideration to freezing the operations of Iranian banks so that they simply cannot do any business out of the UK?
Lord Tunnicliffe
My Lords, the Minister will be delighted to know that we support this order. I would like to thank him for his introduction and to say that he has certainly satisfied any questions that I might have had on the technical side of the banking—not that I am particularly qualified to be able to ask him any questions on that. This is, essentially, a foreign policy issue and I will say a word or two on what has led to this very strong action, which we support.
We are contemplating a nuclear-capable Iran, the consequence of which would be dire. It would destabilise the region; it would cause other states to react; it would probably put the non-proliferation treaty under pressure—perhaps terminal pressure—and, of course, it would lead to an increased possibility of the use of nuclear weapons. The military solution that has been talked about in some international circles is no less dire. The idea of a simple, surgical strike is almost certainly unreal and we may well see ourselves in military conflicts whose breadth and depth are quite appalling to think about, stretching from Hezbollah as one actor through to Saudi Arabia, the Emirates, Israel, US facilities in the area and, as ever, the Strait of Hormuz.
Fortunately, actions taken to date that are short of military actions are being successful. Most commentators seem to view them as successfully holding Iran some two years away from capability. This order is part of that widespread non-military action that international states are taking to keep Iran away from that capability. Nevertheless, the seriousness of this order and the reaction to it in Iran is illustrated by the probability that the attack on the British embassy in Tehran was stimulated by it. I pay tribute to the bravery of our staff in Tehran during the violence that they were subjected to in that difficult situation.
Having looked at the FCO’s statement, it seems to me that the order has a twin-track set of reasons. The first is the International Atomic Energy Agency's latest report on Iran, highlighting fresh concerns. In situations such as this, I always like to try and turn to the source information. The document that it refers to has 25 pages and is quite chilling reading, if one knows anything about nuclear weapons. The general view is that nuclear weapons are about getting enough nuclear material but they are much more difficult than that. They are about clever explosives, hydrodynamics and all that sort of thing. Just flicking through the report, the chilling thing is to see the amount of energy that Iran is apparently putting into that technical side of making a bomb work.
Sadly, one of the problems with the IAEA is that while it is a very capable body, at the end of the day it does not have the ability to instruct people to do things. If you actually read its resolution, it uses words such as press, stress, urge, express and commend. The only thing that it decides to do is to remain seized of the matter, so I would be grateful if the Minister could express to me just how widely this concern, which I think was expressed on 18 November this year, has been followed up by other countries. Can he flesh out any more detail of the actions on it that other countries have taken?
Lord Sassoon
I am grateful to my noble friend Lord Newby and the noble Lord, Lord Tunnicliffe, for making this a short, constructive and to-the-point debate. I shall go straight into the questions that have been asked. First, on the question from my noble friend about the extent to which Iranian banks can still continue in this country to do direct business with companies or individuals, the answer is that the four Iranian banks in the UK are already subject to asset freezes. They cannot do any business at all in this country unless they get licensed by the Treasury, and of course licences are going to be issued only in very particular and limited circumstances. The prohibitions in respect of the UK are pretty watertight, and no UK company can, in effect, use a UK bank to deal directly or indirectly with an Iranian bank.
The noble Lord, Lord Tunnicliffe, asked what other countries are doing. As I said on 21 November when we brought forward the order, the US and Canada took further, similar measures. France, too, announced that it was going to take measures in the near future, particularly in relation to oil trading. The 27 member states of the EU designated 180 individuals and entities for asset-freezing at the beginning of this month, so there is already significant co-ordinated action. The Foreign and Commonwealth Office is working with our EU partners to consider a further round of strong sanctions measures, including targeting in the new year the Iranian oil and gas sector and the central bank, so there is ongoing work with many of our partners. Incidentally, 32 out of 35 countries on the IAEA board of governors supported the resolution of the IAEA in this respect.
The FATF is an international best-practice body. As I know because I chaired it for a year, members take its calls for action very seriously. Often, in my experience, those who are outside the EU and North America will take a bit longer to consider their response. The FATF has three plenary meetings a year and there is always follow-up to action taken since the previous meeting, so it does not let these things wither on the vine. Its next meeting will be approximately four months after the October meeting, at which it will take stock of progress.
The noble Lord also asked a question about the risk of leakage through other countries and what we are doing to avoid the risks which the impact assessment identifies. As I have already said, we are working with many Governments to make sure that they are aware of our concerns. I was in the Gulf during the week when this order came into effect. I had discussions with central bank governors and others there about what they were doing in response to the IAEA report. We talked to many countries. It is quite clear that the tightening sanctions have a significant effect on Iran’s economy and its ability to move money around, but I fully accept that we have to remain extremely vigilant and work with our partners to ensure that we make it as difficult as possible for it to move money in any way. It is ongoing business.
Lastly, on the penalty regime, I suggest that a two-year prison sentence should be a significant deterrent. The penalties in this order are equivalent to those in other, similar sanction regimes. We have not therefore broken any new ground and have followed precedent in this order. The financial institutions which are the subject of this order in the UK are obliged to have systems and controls in place to counter the risk that they might be used to further financial crime. The FSA, as the supervisor, has a statutory duty to monitor those whom it supervises for the purposes of securing compliance with the requirements of a direction. It can impose civil penalties under the Act. Although I should stress that this was under a different part of the UK asset-freezing and financial sanction regimes, it is worth pointing out that RBS was fined £5.6 million in 2010 for the failure to have adequate systems and controls in place to prevent breaches of UK financial sanctions, specifically in relation to Iran. Although that was, as I say, under a different part of the sanction regime, it indicates how seriously the FSA takes these issues.
In conclusion, I suggest that the IAEA’s latest report highlights the serious situation we have with Iran’s nuclear programme and its possible military dimensions. The FATF, as has been recognised, has made repeated calls for countries to take countermeasures to address the risk of money laundering and terrorist financing emanating from Iran. I hope your Lordships agree that the decision to issue this order is a proportionate and reasonable response to the threat of nuclear proliferation and that this action mitigates the risk of the UK financial system being used to facilitate proliferation-sensitive activities in Iran.
I thank noble Lords for their engagement with this issue and I hope that my answers to the important questions they have raised have been sufficient. I urge noble Lords to support me in this important matter.
Open-Ended Investment Companies (Amendment) Regulations 2011
(12 years, 10 months ago)
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Lord Sassoon
That the Grand Committee do report to the House that it has considered the Open-Ended Investment Companies (Amendment) Regulations 2011.
Relevant documents: 34th Report from the Joint Committee on Statutory Instruments.
The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, these regulations amend the Open-Ended Investment Companies Regulations 2001 to introduce a protected cell regime for open-ended investment companies, or OEICs. They will ensure the segregation of liabilities of different sub-funds held under the same OEIC umbrella company so that investors in one sub-fund will not be liable to creditors in the event of another sub-fund failing.
I would like first to give a little background on why this legislation is needed. Open-ended investment companies are one of two major forms of pooled investment fund. UK regulations for OEICs were first approved by Parliament in 1996 to help UK fund managers compete more effectively in the European market. Collectively, there is around £580 billion in UK-domiciled funds and the work needed to administer those funds brings jobs to a number of parts of the UK, including outside the UK’s traditional fund management centres of London and Edinburgh.
Large fund managers generally operate a small number of OEIC umbrella companies with a large number of sub-funds within each umbrella, allowing them to operate a large range of funds more efficiently. The sub-funds, or cells, do not have a separate legal personality but are separately managed, charged, accounted for and assessed for tax. Under current UK law, there is no segregation of liabilities between sub-funds, so creditors of one sub-fund could have a claim on the assets of another sub-fund. While using multiple separate OEICs instead of sub-funds within a single OEIC would protect investors from this risk, it would make operations less efficient and add significant cost to end-users. In practice, the likelihood of creditors having a claim is small, both because OEICs must comply with borrowing limits imposed by the FSA and because feedback from the industry suggests that most credit agreements stipulate segregated liability. However, because this risk has never crystallised, it is not certain how these stipulations would be treated by the courts.
This legislation increases consumer protection and, by doing so, improves the competitiveness of the UK as a domicile for funds. Investors increasingly require segregated liability to address the small risk present in umbrella structures. Managers seeking to domicile their funds in the UK need to be able to offer this based on a statutory provision. This legislation does just that. It removes the risk of contagion by providing an effective ring-fencing of a sub-fund’s assets from the other sub-funds and the umbrella itself. The Government are introducing the regime to ensure that the UK can continue to compete with other jurisdictions that already operate protected cell regimes. Failure to introduce the legislation would risk funds being unwilling to domicile here.
In deciding how to implement this legislation, the Government have been mindful that, despite the undoubted benefits, there are some potential costs to operators in converting from their existing arrangements. We have, therefore, provided for a general two-year transition period, which may, at the FSA’s discretion, be extended for a further year. During this period, existing OEICs cannot enter into any new contract that is not subject to a protected cell regime unless that contract is subject to an existing master agreement which governs the terms of all contracts entered into under it. This should allow firms ample time to convert the necessary contracts, many of which will have come up for renewal in any case. For operators establishing new OEICs, the costs introduced by this legislation are negligible, so they are required to comply immediately with the new regime.
The Government’s Plan For Growth, published alongside the March Budget, also announced a moratorium on new domestic regulation for microbusinesses—firms employing nine staff or fewer—for a period of three years. The protected cells legislation complies with this announcement. Microbusinesses will be fully exempt from the legislation’s requirements for a period of three years. However, early indications are that they may seek to comply with the legislation earlier, given the benefits it brings.
The UK fund management industry has been calling strongly for a statutory protected cells regime and has warmly welcomed news of its introduction. The industry has worked closely with the Government to get the regulations right and they will bring considerable benefits to investors in UK funds and increase the competitiveness of UK industry. I hope that noble Lords will give their support to the regulations today. I beg to move.
Lord Newby
My Lords, this is a fascinating example of the industry asking for regulation that the FSA seems to have been slow to introduce. This is an almost unique experience for the sector, which is normally grumbling that there is too much regulation.
I am intrigued that it is being introduced here purely under domestic legislation rather than within the ambit of any EU cover, and I wonder whether there is any prospect of OEICs, in this regard, being the subject of any of the many EU directives that are currently on their way down the track or being discussed. I note that, at the moment, the jurisdictions that already have this additional regulation are a mixed bag and include Jersey, Ireland and Luxembourg. I find it slightly surprising that it has taken some time for both the UK industry and the Government to get round to implementing this legislation, given that its benefit is that it will improve the competitive position of OEICs in the UK. It seems extremely sensible. I want to confirm what I think the Minister said: that there is no suggestion that this is being introduced because there has been any difficulty with any existing OEICs. Is it purely as a pro-competitive rather than as an anti-competitive measure?
Lord Tunnicliffe
My Lords, I make it clear from the outset that we support this order. I am looking forward to the Minister’s answer to the noble Lord’s questions about how the regulations fit in with the EU—questions which are particularly apposite at this moment. I will content myself with a few comments on the impact assessment and two or three questions.
The impact assessment is absolutely fascinating. From my reading of it—and I am happy to be corrected here—the net benefit of the regulations will be between £18 million and £360 million, which is a pretty wide range that will involve lots of sums to prove that. The only point that I feel I can take from the impact assessment is that, in all credible scenarios, the introduction of a protected cell regime will be favourable, and I think that we can all be satisfied with that.
I have just a few questions. First, new Regulation 11A(4) provides for an exception, which is referred to in the Explanatory Note. However, for myself I cannot quite see what sorts of transactions or assets the exception refers to. Like all exceptions, one is always slightly worried that the exception ends up negating the intent of the order. I am sure that it does not, but I pose that question for assurance.
Secondly, as I understand it—once again, I could be wrong—there will be a period in which PCR products and non-PCR products will be on sale at the same time. I may have misunderstood that, but if I am right in that assumption, what actions are the Government taking to ensure that there is no confusion in the marketplace during that period of overlap? I will be happy if there is no period of overlap, but if there is one then it is important that we do not introduce confusion through these very sensible regulations.
Finally, I like reading impact assessments, which is a little burden that I have to carry. The wonderful thing about impact assessments is that I always sense that they are written by rather more junior people— I was going to say with rather less care, but care is perhaps the wrong term—as you get that little hint from things. On page 10, the impact assessment states:
“The UK fund regime has been viewed as less favourable by managers and investors for a number of reasons, with the lack of a PCR being one of them”.
Perhaps the Minister could enlighten us as to what other reasons exist and what, if anything, he is doing about them.
Lord Sassoon
My Lords, again those questions were short, sharp and to the point. Let me go straight to trying to answer them.
First, my noble friend Lord Newby asked about the interaction with Europe and what else is coming from Europe. The main thing that I see is an up-side opportunity in the link to the UCITS directive and the push to make sure that UK and other fund managers are able to sell products safely on a pan-European basis. I am not aware of any particular threats, but I am aware that, given the ongoing work that is looking again at the UCITS directive, there is further opportunity to complete the single market. UCITS 4 has just been implemented, and the UCITS 5 proposals that are expected from the Commission in 2012 are likely to include consumer protection measures on, for example, the use of depositories, so these regulations are part of a piece. As my noble friend said, these regulations are certainly pro-competitive but, as I touched on in my opening remarks, they also act to protect investors—they work for both the provider and the user of these products. Just to be absolutely clear, the regulations are being introduced not as a reaction to some disaster or something having gone wrong but because there is an untidiness and lack of clarity that we should tidy up ahead of the game.
I will answer the questions of the noble Lord, Lord Tunnicliffe. First, on new Regulation 11A(4), this refers to assets and liabilities which belong to the sub-funds; they do not belong to the umbrella company but have been billed to it for practical or legal reasons. They then have to be pushed down to the sub-funds. For example, there are certain generic costs such as Companies House fees and VAT for which the umbrella company, as the only entity with legal personality, is responsible but then needs to attribute to the sub-funds. It is put in there not as a means of driving a coach and horses through; it is there to deal with appropriate liabilities in particular, which have to be allocated down below the umbrella.
There was then a question about the transition period. The Government certainly recognise the importance of clarity for consumers. This is one reason why the protected cell regime will become mandatory after the transition period. In that transition period, the FSA rules require OEICs that are unprotected to make this clear in their prospectuses. Once an OEIC has converted, it will declare that it is protected. The FSA considers this approach to be proportionate and appropriate, given the low risks involved.
Lastly, there was a question about the impact assessment and the comment on page 10 about the UK regime being “viewed as less favourable”. Incidentally, this was not an impact assessment that I signed off myself so I had the pleasure of reading it afterwards. I am sure that when the noble Lord, Lord Tunnicliffe, mentioned junior people signing it off, he was referring not to my honourable friend the Financial Secretary or the officials who draft these things but to the authorship. The authorship is every bit as expert as is needed. It is great, anyway, to know that some people read the fine print. This is a long preamble to answering the noble Lord’s question.
The other major reasons why people might see the UK regime as less favourable concern perceived tax treatment of funds. The Government are taking steps to address this. For example, only last week the Government announced that they intend to improve the operation of the tax regime for property-authorised investment funds. This will mean that under some circumstances, investors may exchange their units in a dedicated PAIF feeder fund for units in the PAIFs, and vice versa, without incurring a charge to tax on capital gains at the time of exchange. This was a specific response to industry representations and will improve the competitiveness of the UK funds regime. We are responsive to other issues out there, which are generally around taxation.
I hope that that deals with the Committee’s questions. This is legislation that strengthens investor protection in a way that brings considerable benefits to the competitiveness of the UK as a domicile of funds. I therefore commend these regulations to the Committee.
Arrangement of Business
(12 years, 10 months ago)
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Earl Attlee
My Lords, the Statement or Division is likely to occur very shortly. Unless any noble Lords object, I propose to adjourn the Committee until after the Statement.
The Deputy Chairman of Committees (Lord Skelmersdale)
My Lords, this is a most unusual procedure. I note that the Opposition Front Bench spokesman has not yet finished speaking in the Chamber, nor has the Minister responded. However, I am of course in the hands of the Grand Committee.
The Marquess of Lothian
In referring to the end of the Statement, does the noble Earl mean the end of my noble friend Lord Strathclyde’s Statement or the end of proceedings on the Statement as a whole, which I see has been extended to 40 minutes?
Earl Attlee
My Lords, I was referring to the end of the proceedings on the Statement. If the Committee wants, it can start considering the report but my advice is to adjourn.
Lord Foulkes of Cumnock
My Lords, what is happening in the Chamber is fairly open-ended. If we adjourn, by the time the Statement and all the interventions are finished it could be quite late. A number of noble Lords wish to speak in this Committee and it could drag on and on. It might create problems for the Grand Committee in terms of the time we are able to meet. I counsel us to continue.
Lord Tunnicliffe
My Lords, perhaps I may suggest a compromise—that we proceed with the debate and adjourn when the Statement is notified.
Intelligence and Security Committee Annual Report for 2010-11
(12 years, 10 months ago)
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The Marquess of Lothian
That the Grand Committee do consider the Intelligence and Security Committee Annual Report for 2010–11.
The Marquess of Lothian
My Lords, I understand that these proceedings may be interrupted. Having served for many years in the other place, I am quite used to being interrupted and to coming back to where I was at the start. I think this is perhaps the best way to get our business done.
This is the first opportunity I have had to speak in this House on the work of the Intelligence and Security Committee, on which, both in the other place and in this House, I have had the great privilege to sit since January 2006. I am not the longest serving member of it—George Howarth remains the longest serving member—but I am one of the longest serving members.
I note that when the previous report was considered by your Lordships on 30 March 2010, a number of representations, including one from the noble Lord, Lord Foulkes of Cumnock, were made for an increase in the number of representatives from this House on the committee. At that time, there was only one, the noble Lord, Lord Foulkes of Cumnock—a much valued colleague on the committee—who on that occasion moved consideration of the report, as I am doing today. I am delighted that those representations were heeded and that there are now two Members of this House on the committee. I am even more delighted that the other, who has not yet joined us—but I am sure he will shortly—is my noble colleague, the noble Lord, Lord Butler, who represents the Cross Benches and brings with him the broad knowledge and unique insight that come from not only having been Cabinet Secretary but having conducted the 2004 review of intelligence on weapons of mass destruction.
Lord Foulkes of Cumnock
I was going to raise this point in my speech, but it is perhaps better raised now. The noble Marquess is right, we argued on both sides of the House that the number should increase. He is also right that the noble Lord, Lord Butler, will bring a unique and interesting perspective to the work of the Intelligence and Security Committee. However, is it not strange, ridiculous and unacceptable that there is no Member of the Opposition in the House of Lords on the committee? It is quite ridiculous. The total number of members of the committee, including those from the House of Commons, is nine, of which only three are Members of the Official Opposition. This is a scrutiny committee which challenges the work of the intelligence agencies from time to time, and to have such a poor representation of Labour members—and not one from the House of Lords—is quite unacceptable. That point was made by the Opposition Chief Whip of this House at the time and, unfortunately, was not accepted by No. 10 Downing Street.
The Marquess of Lothian
I am sure that what the noble Lord, Lord Foulkes, has said will be heard more widely. I would answer him in this way: as he will see from the report, we are at the moment seeking to have the nature of the committee reformed in a fundamental way. That process is being undertaken at the moment through the Green Paper and I shall come on to it later in my remarks. However, it would be premature to get involved on this before the process has at least got under way and the kind of points made by the noble Lord can be considered.
Even though he is not in his place, I must say that it is a great pleasure for me—as I hope it is for other noble Lords—to have the noble Lord, Lord Butler, on the committee. It means that I can speak more briefly in this debate than otherwise might have been the case because I am confident that he will, with far greater skill, cover all the areas which I fail to cover and may indeed correct me on those areas where I get it wrong.
This is the first annual report of this committee produced under the chairmanship of Sir Malcolm Rifkind, who I am sure all other members of the committee would also like to thank for his excellent leadership over the past year. I should also like to thank the members of the committee from the other place.
As the noble Lord, Lord Foulkes, knows, the ISC is unique in many ways, but perhaps the one that strikes you most when you first join it is the level of consensus on the committee and the absence of party politics from our discussions. That is an important part of the nature of the committee and makes serving on it an even greater pleasure. The abiding ethos of the committee, as noble Lords here today who have served on it in the past know, is one of trust—trust between members, of course, but also, and more importantly, between the committee and those who it is the committee’s responsibility to oversee. We work in an environment where secrecy is often required by the national interest and where, if oversight and scrutiny are to be comprehensive and effective, trust in that secrecy is of the essence.
The same stricture of secrecy also means that the full report, which we are required to submit to the Prime Minister, has to be redacted in certain areas before it is more widely published, to protect that same national interest. As noble Lords will know, these redactions appear as asterisks in the report before your Lordships and have in the past—I must plead guilty of this myself in a previous political incarnation—been the cause of not just complaint but often ridicule. However, in truth, redactions are inevitable and necessary if the committee is to produce a comprehensive report for the Prime Minister. We have conscientiously striven this year to keep redactions to the minimum consistent with the production of that comprehensive report.
This year we have also preceded our report with a section on key themes, which we hope will provide a more structured introduction to the rest of the report by indicating those areas of particular interest to the committee and explaining why they were of such interest. In the past, I always found that these reports tended to be very piecemeal and quite difficult to follow. We felt that it would be for the benefit not just of this House and the other place but of the wider public as well if we produced an introduction of themes that at least gave some shape to the rest of the committee.
I am delighted to see that my colleague, the noble Lord, Lord Butler, has now joined us. At the risk of repeating myself, I said earlier that it is a pleasure to have him on the committee. It makes my speech today shorter, and I am sure he will fill in the gaps and correct me where I have got things wrong.
In general, noble Lords will see from our report that it has been a very busy year for the committee. Indeed, we made a record number of conclusions and recommendations. The report covers several important issues. I do not want to take too much time today; I just want to highlight a few of them.
The first relates to funding for the single intelligence account. In the current economic climate, the committee recognised that the flat cash settlement that the intelligence agencies received in the spending review was fair. This was reflected in what the agencies themselves told us. They will, in broad terms, be able to maintain their key coverage and capabilities. Nevertheless, the committee has recommended that the settlement must be kept under review. The Government must be willing to revisit the funding available to the agencies if there is a significant change in the threat. We cannot prioritise budgets in advance if the security of the country is at stake. The Government’s response to the committee report responded to this and mentioned agility, flexibility and reprioritisation—wonderful words, but I am not certain what exactly they mean in practical terms. It did not mention the possibility of an adjustment in the settlement should that be necessary. In the light of events that are coming over the next 12 months and beyond, we believe that this is important. I would therefore welcome the Minister’s confirmation that, should the threat change significantly—that is the condition—there is scope to revisit the single intelligence account.
I should also like to draw the Committee’s attention to the recommendations on cybersecurity. The threats that exist in cyberspace are familiar ones: theft, fraud, exploitation of the vulnerable and espionage, to name just a few. However, the internet provides criminals and spies with a new avenue of activity, where these deeds can increasingly be carried out with greater anonymity behind a cloak of binary digits and encryption. It is a rapidly growing threat to our security and prosperity, and the ISC in previous reports had urged the Government to increase the funding and priority of this work. Therefore, we welcome the Government’s decision to list cybersecurity as a top-tier threat in their national security strategy, and we welcome the new funding that has been made available to fund cyber-related work. Half of this new money will go to the intelligence agencies, which is very much in our view to be welcomed. However, there is still a great deal of work to be done in this area.
While the committee has welcomed the increased priority being given to cyber, the downside has been the proliferation of new teams and units working in this area. There are at least 18 departments, units and agencies involved in this work in some way, and the committee remains concerned at the risk of duplication and lack of co-ordination in this essential field.
Many other important matters are mentioned in our annual report, including the very welcome establishment of the National Security Council itself, matters relating to detainees and rendition, counterterrorism work and Olympic security, to name but a few. I do not propose to cover them now, as the report sets out our views clearly, and no doubt your Lordships will wish to raise some of them during the course of the afternoon, as I am confident will my colleague, the noble Lord, Lord Butler.
I want to turn now to the wider issues that we mention in the report. One that has exercised the committee this year and which we touch on in our annual report is the future of the committee itself. The ISC has been in existence under statute for some 17 years now. Since it was established under the 1994 Act, the threats that we face have changed and, in response, the intelligence community has had to change as well. The work of the committee has evolved to take account of this. However, public expectation of transparency and openness has increased significantly during this time, and the committee must ensure that it has the powers and the remit necessary to provide reassurance to the public and to Parliament. We therefore made it a priority in the first year of this Parliament to review the committee’s role, structure, remit and powers. We concluded that the current arrangements are now significantly out of date. The committee therefore produced radical proposals for change designed to increase accountability, transparency and capacity for oversight of the intelligence community as a whole. The timing of our review was fortuitous; the Government were in the process of producing a Green Paper, now published, on the protection of intelligence material in the courts and were considering how, if they were to recommend changes in the power of courts, oversight of the agencies should be strengthened to compensate for that. The committee therefore put its proposals for change to the Prime Minister.
Noble Lords will have seen that the Government’s Justice and Security Green Paper for the most part reflects the committee’s recommendations. Under the proposals, the Intelligence and Security Committee will become a committee of Parliament, something that it has not been in the past; it has been a statutory committee of parliamentarians under the authority of the Prime Minister. We are seeking for it to become a committee of Parliament, with the necessary safeguards, reporting to Parliament and to the Prime Minister. The remit of the committee will reflect the fact that the ISC has for some years taken evidence from and made recommendations regarding the wider intelligence community and not just SIS, GCHQ and the security services, which were its statutory responsibility. It will also reflect the fact that the committee is not limited to examining just policy, administration and finances, which were also part of its statutory remit, but encompasses all the work of the agencies. Further, the committee will have the power to require information to be provided.
However, there are two issues on which the Green Paper does not entirely reflect the Government’s proposals, which I wish to raise now with the Minister. The first relates to oversight of operational activity. The work of the agencies cannot be understood fully, let alone scrutinised effectively, without regard to operational matters. The ISC has for many years had access to operational material and has reported on operations publicly and in confidence to the Prime Minister. That includes reports as far back as the 1999 inquiries into Sierra Leone and the Mitrokhin archive, when the committee was still relatively new, through to more recent examples, such as the 2007 inquiries into the 7/7 bombings and the 2009 inquiry into the Binyam Mohamed case. Some of these investigations were at the express request of the then Prime Minister, and others were instigated by the committee itself. They were all specific operations that gave rise to public concern and significant national interest. They were all inquiries in which the committee had access to specific, detailed operational material.
The committee considers that the arrangements that have taken place in practice should now be formalised and that this work should be placed on a statutory footing. However, the Green Paper is less than forthcoming in this regard. It states only that,
“the Government is giving careful consideration to the ISC’s proposal to extend its remit to include operational aspects of the work of the Agencies”.
I underline once again that this is not something new, but something that has been happening over the past few years. Access to operational information is fundamental to the work of the committee. The Government must recognise that to deny the committee access to operational material would be a major step backwards from the current arrangements at a time when the Government say that they are seeking to strengthen oversight. I would welcome my noble friend’s assurance that he and the Government will look forward in this respect and not backwards.
The second issue on which I would welcome clarification from my noble friend is the committee’s resources. Currently, it has limited personnel resources. However, the changes that are envisaged to its powers and remit will increase that requirement and will involve new ways of working. The key difference will be as a result of the committee’s new power to require information to be provided. At the moment, it is reliant on the agencies themselves considering and summarising their information.
The Deputy Chairman of Committees (Lord Skelmersdale)
My Lords, there is a Division in the Chamber. I do not know whether the noble Marquess intends to finish very shortly. If not, we will adjourn the Committee for 10 minutes.
The Marquess of Lothian
I have a little more to say, and I think it would be better to adjourn and return.
The Deputy Chairman of Committees
My Lords, I apologise for interrupting the noble Marquess. The Committee is now in session.
Earl Attlee
My Lords, it will be for the convenience of the House and the Committee if we adjourn the Committee until a point three minutes after the conclusion of the Statement in the Chamber.
The Marquess of Lothian
My Lords, after this lengthy adjournment, I fear that I still have a number of issues to discuss from this lengthy and comprehensive report. I will touch on them as briefly as I can.
When we adjourned, I was discussing how the committee must be able to look at operational information in order to carry out its job of scrutiny properly and I was just beginning to touch on the second issue, which was to ask the Government for clarification with regard to the resources of the committee. We currently have limited personnel resources, but we are now looking at changes to enable the committee to require that information be provided. While at the moment the committee is reliant upon the agencies considering and summarising their information, in future the committee’s staff will need to be engaged in this process to assure the committee that it has the information it requires. This is very important, particularly following the inquest that we heard earlier this summer, where the deficiencies in the information provided by the agencies were shown to have put the committee at a disadvantage.
Due to the sensitive nature of the material involved, the intelligence community is not subject to the same level of public scrutiny as other departments’ agencies. It is not subject to regular debates or questions in Parliament; academic research is limited to matters of somewhat distant history; investigative journalists cannot delve very deeply; and it is exempt from freedom of information. The responsibility for independent parliamentary oversight and security therefore falls to this committee and to the Intelligence Services and Interception of Communications Commissioners whose role is to check the legality of the agents’ activities. That is why both must be adequately supported, so I urge the Minister to accept that this will not be possible unless the committee has sufficient staff of adequate seniority and authority.
I now turn to the thorny and increasingly important question of protecting intelligence material in court proceedings. In the committee’s report on rendition in the last Parliament, we highlighted the importance of intelligence exchanges with foreign liaison partners. We explained that the United Kingdom cannot work in a vacuum and that we depend upon the co-operation of others. We concluded:
“Our intelligence-sharing relationships, particularly with the United States, are critical to providing the breadth and depth of intelligence coverage required to counter the threat to the UK posed by global terrorism. These relationships have saved lives and must continue”.
These relationships are based on confidentiality. Intelligence is shared on the understanding that it will be protected. If our allies fear that their material might be disclosed by our courts—and after this summer they have good reason to fear this—then they may reduce their co-operation. In other words, if we cannot protect it, we will not be given it in the first place. The committee has heard first hand from those within the United States intelligence community that the decision of UK courts in recent cases to disclose US intelligence material has damaged the UK-US intelligence relationship. On a visit earlier this year this was said to us often and—as I am sure my colleague, the noble Lord, Lord Butler, will endorse—with some great force. This is of serious concern. The United Kingdom must honour its obligations to protect foreign intelligence material from disclosure.
We therefore support the Government’s initiative in bringing forward the Justice and Security Green Paper and in looking for a way to honour our obligations. The Green Paper proposes that closed material procedures, including the use of special advocates, be extended to civil cases. The committee considers this to be a step in the right direction. However, it does not on its own provide the answer, nor does it offer certainty to those that we work with that their information is safe with us. The Green Paper recognises that closed material procedures would only “reduce”—not eliminate—
“the risk of damaging disclosure of sensitive material”.
The Green Paper does, however, raise the possibility of a statutory presumption against the disclosure of intelligence material. This would have the advantage of providing a clear indication to judges of Parliament’s intention in relation to such material. Such a presumption would be invaluable to a court in seeking to understand Parliament’s intention in this respect. Any presumption would of course be rebuttable, so the final decision would lie with the courts—we are not trying to take the courts out of it. However, there would need to be a compelling reason for the judge to rule against such a presumption. We regard that as the right balance to strike in these very difficult and important circumstances. Therefore, we consider that this rebuttable presumption should be included in addition to the closed material procedures. The combined package would still not offer a total guarantee to our allies, but it would provide far greater protection than the CMPs alone. In seeking to protect the UK, we must work with others who must feel confident that we will protect the information that they share with us. We must give them that confidence. Therefore, I hope that my noble friend will consider our recommendation that a rebuttable statutory presumption should be included as part of a package of measures.
Finally, I want to pay tribute to the men and women who work for our security and intelligence agencies. As we have seen on the committee, it is a difficult job, which inevitably receives little if any recognition, where successes cannot be celebrated and decisions cannot always be easily defended in public. The Intelligence and Security Committee plays an important role in holding the services to account, scrutinising their actions and criticising them where that is necessary. However, we also believe that we must be their champion and congratulate them on a job well done behind the scenes, as I unreservedly do now. I commend the report to the Grand Committee.
Lord Foulkes of Cumnock
My Lords, let me first say how much I welcome this debate, with two reservations—it would not be from me if there were not a couple of reservations. The first is that we are having the debate in Grand Committee and not on the Floor of the House. Secondly, the debate follows two Treasury instruments, which suggests that the House does not give enough importance to the work of the Intelligence and Security Committee and the agencies. I hope that, in the future, the usual channels will think of the possibility of holding the debate on the Floor of the House so that a larger number of people may not only participate but hear about the work, so that it can get to a wider audience.
However, I congratulate my noble friend the Marquess of Lothian. He is my friend because in the other place he and I were paired for many years—we managed to find opportunities to travel the world together—and then we were members of the Intelligence and Security Committee, which I served on for four years. I know how diligently he serves on it and how impressive he is as a questioner on that committee. He has shown by his introduction today the depth of his knowledge and understanding of the committee’s work.
I commend the work done by the noble Lord, Lord Butler, who brings a slightly different perspective to the committee. Now that he is here, I repeat what I said earlier with absolutely no disrespect whatever to him. He is clearly a very powerful and important Member of this House and I know, from the accounts of members of the committee, that he does an extremely good job on it. It is very unfortunate that this House is not better represented on a committee such as this. I argued this, as did others, in the debate on 30 March last year. We succeeded in doubling the representation but it is slightly odd that there is not a Member of the Official Opposition from this House serving on the committee. It was unfortunate that No. 10 saw fit not to take account of the representations made very forcefully by our Chief Whip. It was a pity that that happened.
On 30 March last year, we had a very interesting debate, in which the noble Lord, Lord King, participated. I am sorry he is not here today; he participated very effectively, as those Members who were here will recall—it is included at column GC 544 of the Hansard of that day. He argued very strongly that the credibility of the committee would be much greater if it had an opposition member as chairman. Obviously, that did not carry much weight with the new Government when they took over. Again, I mean no disrespect to Sir Malcolm Rifkind, whom I have known for as long as I have known the noble Marquess, Lord Lothian, and for whom I have the greatest respect. I think that the noble Lord, Lord King, had a very good argument there that, on a committee such as this committee, it helps to increase its credibility if an opposition member chairs it.
Those are my general comments, but I also want to comment on the reform of the committee. We discussed that when I was a member of the committee, and I hope I am not giving away too many secrets—on that committee, we learnt the importance of not giving away secrets. As far as the committee was concerned, I strongly supported the change in the nature of the committee, and I am sure that the noble Marquess will recall that. Indeed, it was the then Prime Minister Gordon Brown who suggested that the committee might become more open, have public sessions and look towards becoming a parliamentary committee of both Houses. He urged movement in that direction. I supported that, but there were members of the committee who did not agree. I am very glad to hear that the committee is now, as I understand it, unanimously in favour of moving towards reform of the structure of the committee. I hope that the Minister will give an indication in his contribution as to whether that has the support of the Government and whether we will see the necessary legislation in the forthcoming Session of Parliament. I think it would be right to move in that direction. I agree with the committee. It would be more transparent and accountable if that took place. There are problems in relation to certain parts of the evidence being dealt with in public, and meetings would have to be held in private, but the more meetings that can be held in public and the more that Parliament is responsible for the nomination of the members of the committee, the better.
The items that I want to raise that arise from the report relate not to the specifics that the noble Marquess raised but to wider questions of national security policy and, specifically, to the role and the nature of the national adviser. I am now a member of the Joint Committee of both Houses of Parliament on the national security strategy, which is under the chairmanship of my right honourable friend Margaret Beckett. We recently had evidence from the current national security adviser Sir Peter Ricketts, and I was disappointed in it in a number of ways. Page 39 of the Intelligence and Security Committee report records that the national security adviser has three main roles and that the second is,
“to act as personal adviser to the Prime Minister on foreign and security policy”.
I think that is a very important point. When Sir Peter Ricketts appeared before us—I am quoting from the uncorrected evidence—he said:
“The second role is effectively as a foreign policy adviser to the Prime Minister”.
He did not say “foreign and security policy”. I think that, with his Foreign Office background, Sir Peter—who is on his way back to the Foreign Office to become our ambassador in Paris—unfortunately sees himself very much as a Foreign Office person. There is a problem in that kind of role of national security adviser where the two roles have been combined. Sir Peter sees it very much in foreign policy terms. With no disrespect to the Minister, Foreign Office officials sometimes have a particular set of blinkers that means that they do not look at the wider context.
There was also a very strange exchange between the noble Baroness, Lady Ramsay of Cartvale, and Sir Peter Ricketts. I will quote from the transcript. The noble Baroness, Lady Ramsay, as well as having served with great distinction on the ISC, has a better working knowledge of the agencies than most of us here. She asked:
“Is it not constitutionally slightly odd that you are writing the confidential annual reports of the heads of intelligence agencies?”.
He told us that he is in effect the line manager of the heads of the intelligence agencies. When I served on the Intelligence and Security Committee, that never occurred to me. It occurred to me that C and the director-general and the head of GCHQ were working independently and with their own, wider authority, reporting directly to Ministers and particularly to the Prime Minister, but Sir Peter Rickets said that,
“agency heads are also Permanent Secretaries of departments in the same way that I was Permanent Secretary of the Foreign Office”.
I do not know about the noble Marquess, or the Minister, or other Members of this Grand Committee, but I never saw them as that when I was on the committee. I wonder whether something has subtly changed over the last couple of years in terms of the reporting arrangements for the heads of the intelligence agencies. That would be unfortunate.
Another thing that came up in our evidence was that Sir Peter Ricketts has the responsibility for co-ordinating the work of agencies throughout government and for this whole aspect of the work of government. When we asked who had replaced the noble Baroness, Lady Neville-Jones, in particular terms—and previously the noble Lord, Lord West, who had a wider remit than just in the Home Office, although Mr Brokenshire deals with it in the Home Office—we were told that each department on the National Security Council has a Minister responsible. But it seems that no one at ministerial level, apart from the Prime Minister himself, is co-ordinating national security right across government—across all aspects, whether it be energy supply, defence or a whole range of other responsibilities. That seems unfortunate. The interesting thing was that Sir Peter thought that he could co-ordinate it as an official but somehow it was impossible for a Minister to take on that role as well.
My penultimate point is that I also raised with Sir Peter Ricketts on that occasion the question about Scotland, and the potential threats to national security arising from the demands of the present Scottish Government for independence. The astonishing thing was that no work is being done, according to Sir Peter Ricketts, to look at the security implications of the increasing demand for Scottish independence. I hope that the Minister will either confirm or deny this. I raised the question, and was supported by a Conservative Member of Parliament on the committee, about the division of oil reserves if there was a dispute on that, or if the policy of the Scottish Government was different from the United Kingdom on the deployment of Trident—as it is—and on membership of NATO. This raises some implications that ought to be thought about.
Those are the only substantive points that I want to raise today. I want to conclude as the noble Marquess concluded, with a word of thanks not just to the members of the intelligence and security services—MI6 or SIS; MI5 or the Security Service; and GCHQ—who do, as the noble Marquess said, a fantastic job. But as I am sure the noble Marquess would concur, we should say a word of thanks to the staff of the committee, who came under sustained pressure during my time on the committee and weathered it extremely well. One advantage of moving towards a different structure for the committee, where the responsibility is not to the Cabinet Office but to Parliament, is that it would protect them in a way that they were not protected during a very difficult situation in the very important and excellent work that they do to service the committee.
Lord Alderdice
My Lords, I, too, thank my noble friend Lord Lothian for obtaining this debate and for his sterling work on the committee and the report that has been produced. I declare two interests, one as president of ARTIS Europe, which is a research and risk analysis company that takes an interest in areas of politically motivated violence and terrorism, and the other as a customer of the Security Service during the past seven years as a member of the Independent Monitoring Commission. We spent a good deal of our time working with various elements of the Security Service here in the United Kingdom, the Republic of Ireland and elsewhere.
This is an extremely worthwhile report, which merits considerable study. I want to refer only to a few aspects of it. I could pick up on some of the positive remarks about, for example, the National Security Council, which seems to be an important development. I could pick up also on the concerns expressed about the BBC Monitoring service, an issue referred to in general terms in your Lordships' House but very specifically in this report. I welcome not only what the report had to say but some of the remarks in the Government’s response to it.
I note what my noble friend said about concerns about confidentiality in respect of our partners and material coming into the public domain. This is a very difficult area to put into structure and regulation. In the Independent Monitoring Commission, we found ourselves meeting at a very early stage, because it was a somewhat unusual body, as my noble friend knows from his own experience in Northern Ireland. Quite quickly, rather more because of the personnel than of the structure, we were able to build up a sense of confidence with our interlocutors. That was able to function adequately over a period in excess of seven years during which we published some 26 reports. That confidence was not maintained purely by the structures in place, though some were important, but because of the personnel and the relationships between them, which are very difficult to legislate for. It is extremely important to come to understand those things which you can, and should, properly put in the public domain and those matters which have to be dealt with in another way. Without that, it is impossible to do serious work in this area. Structures alone will not address that.
Let me come to the more specific areas that I wish to concentrate on. First, on Northern Ireland and republican terrorism, my friend the Minister of Justice in the Northern Ireland Assembly, David Ford, recently remarked to the Assembly in answer to a question that the level of attacks was not currently increasing, which was very welcome news, because, during our period, they had continued to increase. I am absolutely clear, as I think he was, too, that that is not because the level of activity has diminished but rather because of the excellent work of the security services, the police and the Garda Síochána. It is quite clear that there is still a very high level of dissident republican activity, but it is being foiled by excellent work. I take this opportunity, as other noble Lords have done, to convey my own appreciation to those involved, in so far as I can on behalf of the people of Northern Ireland, for the protection afforded to them and other people in the United Kingdom by their extraordinary work. One of the difficulties about it is that, as with good civil servants’ work, when it is successful you do not see anything publicly and people then take for granted that everything is fine. That is a little bit dangerous because people then let their security guard down and something terrible can happen. With good civil servants’ work and good security work, it looks as though everything is going swimmingly, which is only because of the quality of the work that has been undertaken.
I was gratified to note the recognition of cybersecurity as a tier-1 risk, as is recorded in the report. It is important to understand that this is not simply a question of traditional terrorists, whether domestic or international—although they are mostly international—using the modality of cyber to arrange traditional-style terrorism. In other words, cyberterrorism is not about people communicating with each other using the internet in order to plant bombs or all the other things that terrorists traditionally do. Rather, there are new ways of engaging in attacks that are mediated entirely through the internet—for example, the damaging of government infrastructure and the necessary national utilities. These are very real dangers not just in the defence field but in all aspects of life, including things such as water and electricity, not to mention all our own practical activities. That struck me very forcibly some years ago when some Taiwanese colleagues made it clear to me that, in the Taiwanese Parliament, every parliamentarian’s computer was being hacked into every single day. I think that some colleagues in your Lordships’ House and elsewhere might not be quite aware of the vulnerability of many of these things, although I know that that is not the case with noble Lords in this Room.
The whole area of cybersecurity presents an enormous difficulty and challenge, including on a number of elements that I note are mentioned in the report. First, the question of staff retention and pay, which is referred to, is a very difficult issue. In some long discussions that I had on this front, a young man who runs a company in the United States remarked to me that one of the problems with those who are most skilled in this area of work is that they are often—though this may surprise some noble Lords—not qualified with university degrees, but they are extremely skilled in this work and they have a very particular set of personality attributes and a particular way of working. When a number of small companies were established that became very effective in providing anti-hacking services—largely, setting a thief to catch a thief—a number of the large corporations saw this work as an ideal undertaking. There was clear money to be made and the expertise was available, so these large corporations bought over a number of these small firms. As far as I am aware, almost none of them survived because, brought inside a corporate structure, this was not the way that these young men—and they are almost all young men—functioned. Therefore, one of my questions for the Minister is: how are departments finding the challenge of engaging some of these young people who are not the traditional personalities for the Civil Service or the security agencies or the military or the police? In fact, these are the kind of young people who might be firmly outside these structures, yet they are exactly the kind of people that we need inside if we are to deal with this kind of problem. The report talks about this issue in terms of finance, but I really think that it is much more about other things in addition to the question of finance.
That leads me to the issue of psychological research in these areas. I have been to a number of conferences recently where it has become clear that huge amounts of money are being spent on hardware and on software, but very little is being spent on understanding the psychology of the kind of people who get involved in these sorts of activities. This was commented on in a recent conference that was promoted by the right honourable Foreign Secretary, at which Misha Glenney—a former BBC journalist who has recently published an excellent book on the subject—pointed out that almost no work has been done in this area. For me, that is reflected in the report, which highlights key themes as: “Organised crime”; “Hostile foreign activity” coming from Governments and so on, which is absolutely true; and “Terrorism”. However, the report does not refer at all to what is commonly known as “hacktivism”, whereby young people become involved in activities that become crime, because they break the law, but their intent is not that of traditional organised crime to make a lot of money; much of it is about gaining respect for themselves as serious operators on the internet. However, they then get themselves in trouble and find themselves on the wrong side of the tracks and on the wrong side of the law. I was struck by the fact that that is not identified in the report as a fourth area. This is not organised crime, or terrorism per se, or foreign activity in terms of Government and armies and so on, but it causes us a great deal of problems. That suggests to me that there is something about the whole psychology of this new space that has been created—as well as land, sea, air and space, we now have a new context for engagement and, indeed, for war.
That leads me to another question about legal research. I submit that if the Stuxnet attack had happened in an equivalent way on land, at sea, in the air or even in space, it would have been regarded as a declaration of war. However, despite the great problems that it obviously caused for Iran, it does not seem to have been regarded in that way. At this stage, without waiting for something to happen, a serious piece of work needs to be done in international law to explore at what point such a thing becomes a declaration of war, at what point can it be responded to only by cyber-response and at what point by other kinds of response. There is a lot of work to be done in that area.
The Marquess of Lothian
On that point, this is an important question and the real problem in this area is one of attribution. All the evidence that we have taken suggests that it is very difficult, when you get a worm of the type that Stuxnet was, to find out where it has come from.
Lord Alderdice
My Lords, my noble friend is absolutely right. That is why there is a problem, to which there is no simple answer. Great damage is done whether the attribution can be established or not. Sometimes in the past people have not waited to establish the attribution. A doctrine of pre-emption, which I do not in any way recommend or commend, was created by a previous American Administration. The point is that sometimes we have to find a way of dealing with these things. I simply seek reassurance from the Minister that it is being actively looked at by those with the experience and legal expertise to address the question.
To some extent, that leads me to the question of attribution more generally and in regard to research. Some comments were made about the threat of al-Qaeda, including that in the Arabian Peninsula and other places. In looking at it, it seemed to me that there was rather a surface view of the thing. For example, many of those who get involved in Yemen in support of al-Qaeda in the Arabian Peninsula are concerned about their local situation, as was the case in Afghanistan. There are a small number at the top who have all these notions about the caliphate and so on, but they are not necessarily carried forward because everyone who is involved on the ground believes that. That is extremely important in understanding how to deal with it.
Let me give a specific example from our own country. There are those who have looked at the way of thinking of young people who are potentially vulnerable to being involved in terrorism in this country. I commend the noble Lord, Lord Foulkes, for pointing out that this is not always a question for foreign policy; it is very much a domestic issue. The view has been taken that it is about fundamentalist views. The job is to persuade young people not to have these hard-line, extreme, fundamentalist religious views. I have always had some doubt that it is possible to persuade young people of anything of the kind. Indeed, the more adults try to do it, the less likely young people are to go along with it. However, research has recently suggested that that is not the best way to deal with it anyway. Even if these people have very fundamentalist views and, at the same time, accept that democracy and the rule of law is the only proper way to change and govern society, they are not vulnerable to becoming terrorists.
That is an extremely important question to be explored, so I seek some assurance from the Minister that research is not necessarily being done only by those inside the services, who may have a particular expectation of research. Those of us with any passing understanding of academic research know that it is extremely important that people do not come with preconceived ideas. Those inside the services cannot but have preconceived ideas. Is there any role for research that is being done externally, on a more objective basis, to inform the work of the security services?
On the issue of being up-to-date with difficult questions, we have had a strategic defence and security review, but we have just come from the Chamber where we have been looking at the dramatic and disturbing changes taking place in our own continent of Europe. Only a couple of days ago, General Martin Dempsey, chairman of the United States Joint Chiefs of Staff, said that he was “extraordinarily concerned” about euro survival, civil unrest and the break-up of the EU. Again, this is not a question of distant places but of our own part of Europe. I seek reassurance— I do not ask for anything more—that our intelligence services are paying attention to the real and present danger of unrest in Europe over the next few years as the weight of financial difficulty and political disjunction begins to bear down. That may be, sadly, a substantial part of the work of our security services which is not, as yet—I understand why because the report is now a few months old—focused on in the report.
Lord Butler of Brockwell
My Lords, it is an honour to represent your Lordships’ House on the Intelligence and Security Committee, not least because I share the view which has been expressed that the committee’s work is very important. It is also a pleasure to serve on such a distinguished and experienced committee, which is very ably chaired by Sir Malcolm Rifkind, with his experience as a former Foreign Secretary and Defence Secretary, and is supported by a first-rate secretariat. I was glad to hear the noble Lord, Lord Foulkes, refer to that. The committee also contains others with ministerial and Front-Bench experience in the Home Office and the Northern Ireland Office, including, notably, the noble Marquess, Lord Lothian, with whom it is a special pleasure for me to share the representation of your Lordships’ House.
As the noble Lord, Lord Foulkes, has referred to the chairmanship of the committee, I see the argument that such committees should have a chairman drawn from an opposition party. However, I am absolutely confident that I speak for the whole committee when I say that when we have the good fortune to have a chairman of the calibre, energy and experience of Sir Malcolm Rifkind, that trumps every other argument.
Lord Foulkes of Cumnock
Perhaps I may make two things clear. First, I was repeating the argument that the noble Lord, Lord King of Bridgwater, made last year; it was not I but he who was arguing for an opposition chairman. Secondly, having known Malcolm Rifkind since we served together on Edinburgh City Council, I wholly endorse what the noble Lord, Lord Butler, has said.
Lord Butler of Brockwell
My Lords, the importance of the work of the committee has grown because of the greatly increased salience that the intelligence services have gained in our national life. It is a long time—many decades—since their activities were directed only against foreign antagonists of this country. Sadly, the growth of terrorism—first Irish and then other forms of criminality and terrorism, not only Islamic—has meant that the activities of the intelligence services have had also to involve citizens of our own country. It is therefore right that the agencies should no longer operate wholly in the shadows but that legislation should have been passed to put them on a statutory basis, to regulate them and to hold them accountable to Parliament.
At the same time, much of their activity has to remain secret. On that secrecy their effectiveness and the trust and co-operation of allied countries and those who would help them depends. We have to combine accountability with the protection of legitimate secrecy, and that is where a committee of parliamentarians has an important role to play.
Two other circumstances have affected the role of the intelligence agencies in today’s world. One—and this point has not been made this afternoon—is that their work has become much more international. Terrorism, espionage and criminality no longer respect national boundaries, if they ever did. This means not only that we have to work much more closely with allies and other countries with shared interests, but that the agencies within our own country—both outward-looking and inward-looking—have to work much more closely together. The committee has seen that development and it welcomes and encourages it.
The second development is that the advance of technology means that the methods and instruments of intrusion into the lives of individuals and institutions have greatly expanded. The noble Marquess, Lord Lothian, and the noble Lord, Lord Alderdice, rightly referred to cybercrime and the threat that it presents to public and private institutions in our country. Other examples are the extraordinary development of satellite imagery and the more mundane but equally intrusive proliferation of close-circuit television cameras, through which those pursuing their legitimate business around the streets of London may these days be recorded several hundred times in a single day. Quite rightly, the Protection of Freedoms Bill before your Lordships’ House provides for regulation of the uses to which such recordings can be put.
I mention these developments because it must be the responsibility of those who supervise the agencies on behalf of Parliament, within the ring of secrecy, to ensure not only that the agencies are efficient and effective in their vital work, but that they use the instruments of intelligence-collection available to them both proportionately and responsibly. I want to refer to a point made by the noble Lord, Lord Alderdice, picking up on the report, about the remuneration and character of those who work within the agencies. On the character of those people I think that I can reassure him. When one has the privilege of meeting staff of the agencies, one can be certain that it never has been the case that they are conventional, like any other civil servants. There are a lot of unconventional personalities.
Two other things hold them to the agencies—in addition to remuneration, which is very important. One is the importance with which they regard their work, which is a very important factor in morale, and the other is the excitement, originality and opportunities for enterprise within the law. They are the sort of people who can be relied on to operate in that way.
I was Cabinet Secretary when the legislation establishing the Intelligence and Security Committee was passed in 1994. I well remember the hesitation and anxiety with which the Government and agencies regarded the admission of parliamentarians into the ring of secrecy at that time—hesitation and anxiety which I confess I wholly shared. The committee has come a very long way since then in building the confidence of successive Governments and the intelligence community. The fact that it has done so has been due to the responsibility and wisdom shown by successive members of the committee, and I pay tribute to them. Over the past 17 years, there really has not been a major incident to damage that confidence, and that is essential to the work of the committee. The committee needs to be prepared to be a frank critic of the intelligence community when criticism is justified, but also—as was said earlier—its champion when external criticism and antagonism from those who know little of the agencies’ work is unjustified.
The noble Marquess, Lord Lothian, made the point that, as the confidence of the intelligence community and the responsibility and discretion of successive members of the intelligence and security community have grown, the committee’s work has extended well beyond the restrictions in the original legislation. This has benefits for Parliament and the intelligence community itself. The committee’s surveillance is no longer restricted in practice to the administration, policy and expenditure of the Security Service, SIS and GCHQ, the terms in which the original legislation was expressed. It has extended more generally to the work of the intelligence community as a whole, including—retrospectively—specific operations. This has been of general benefit.
However, if the committee is to achieve its full value, it needs to command the confidence not only of the Government and the intelligence community but of Parliament and the public generally. What has happened de facto therefore now needs to be recognised in legislative changes while retaining the necessary safeguards. The committee should now become a parliamentary committee instead of a government-appointed committee of parliamentarians. The wider extent of its activities should be explicitly provided for. Picking up the point that the noble Lord, Lord Foulkes, made, this would increase the independence of the secretariat of the committee who would then become servants of Parliament and not simply members of the Executive. I agree that that would be valuable. The committee should be able to reassure the public that it can require information from the intelligence community and not just request it—require it subject to the veto of a Secretary of State, without being at the mercy of the agencies in respect of the information they can obtain. These are changes that the committee has proposed; in fact, successive committees have proposed them. It is very welcome that the Government have endorsed them in their Justice and Security Green Paper.
As the noble Marquess, Lord Lothian, said, the Government have so far reserved their position on the extent to which the committee should oversee the operational activity of the agencies. Like the noble Marquess, I urge the Government to have confidence about this. I make one point in particular. The committee has already shown itself to be competent in examining specific episodes, often at the Government’s request. However, the public are much more naturally concerned with the operational activities of the agencies—such as their part in the treatment of terrorist suspects or the events leading up to 7/7—than in the agencies’ financing and administration. If the committee is to command the public’s confidence in holding the intelligence community to account, it must reassure them that the agencies are being properly supervised by Parliament. It is essential that the Intelligence and Security Committee be able to play a role in that, as indeed it already has done. It is not as though we want to look at such operations currently; we will always look at them retrospectively. Nor do we want to go as far as the US congressional committees, which are required by legislation to be informed of the agencies’ current operations. Does the Lord Chairman think I am going on too long?
The Deputy Chairman of Committees (Lord Faulkner of Worcester)
I was waiting to see if the noble Lord had finished because a Division has been called and we will have to adjourn the Committee. We will look forward to hearing the remainder of his speech when we reconvene at 7 pm.
Lord Butler of Brockwell
My Lords, I have only one other point to make, and it is the one that was covered by the noble Marquess, Lord Lothian. It is a very important part of the Government’s Justice and Security Green Paper and of the ISC’s annual report. It is the balance between the interests of justice and the protection of intelligence in court proceedings.
Civil litigation against the Government by those who claim to have been improperly treated at Guantanamo and elsewhere has introduced two new dimensions to this problem. One is the order of the judge in the Binyam Mohamed case referred to by the noble Marquess to disclose American-sourced material. As the noble Marquess said, it is difficult to overstress the effect that this has had on the attitude of the US authorities to sharing intelligence material with the UK. The other is the difficulty that the United Kingdom has had in defending actions against the Government when it can do so only by disclosing sensitive material. I fully understand the feelings of those who are reluctant to see the extension of closed material procedures or the greater use of special advocates. But I agree with the Government that the best interests of justice for all parties can be secured only by the extension of closed material procedures and the use of special advocates in those cases. But I also agree with the noble Marquess, Lord Lothian, that this needs to be buttressed by writing into the law a rebuttable presumption against the disclosure of sensitive material in such cases to provide guidance to judges about what is the will of Parliament. I agree with the noble Marquess about that as, indeed, I do on all the other points he made.
As has already been said, there are many other important matters covered by the ISC’s report: the creation of a National Security Council and its implications for the Joint Intelligence Committee and the rest of the Government’s central intelligence machinery; the security aspects of the Olympic Games and the challenges to the intelligence agencies in dealing with them at the same time as the other demands on their resources; the need to wake up government agencies and the private sector to the threat that cyber poses to them; and much else.
One of the great benefits of the ISC’s annual report is that it is a comprehensive annual report on current issues affecting our intelligence community. What is more, having had no part in drafting it, I think I can say that it is a good read. I feel grateful and privileged to be able to contribute to it in at least a small way.
Lord Hennessy of Nympsfield
My Lords, I add my thanks to the noble Marquess, Lord Lothian, for securing this debate. Sir Colin McColl, a former chief of the Secret Intelligence Service, was asked some years ago to encapsulate the purpose of British intelligence. He replied that its job is to provide,
“cats’ eyes in the dark”,
for its customers. I regard the Intelligence and Security Committee in a similar light, for it provides Parliament and the public with an indispensable pair of cat’s eyes into the necessarily dark world of our secret state. I therefore welcome the committee’s new remit, reach and status as a committee of Parliament and support the words of the noble Marquess about the need for extra resourcing.
Last Thursday, I found myself on the 2.30 from Paddington—to give the occasion a Miss Marple-ish touch—with the noble Lord, Lord King of Bridgwater, the founding chairman of the ISC, who guided the committee through its first seven years of life after its creation by the Intelligence Services Act 1994, during which, as the noble Lord, Lord Butler, has already said, great strides were made. The noble Lord, Lord King, told me not only how much he regretted the short notice of our debate today and that he could not alter his travel arrangements and be here but also that he, to use his own words, “always thought that the ISC would be a Select Committee one day”, and that this would be, “a natural progression”.
In my judgment, the committee’s work over the past 17 years represents a significant constitutional development alongside its regular functions of inquiry, scrutiny and report. We have come a very long way on the openness front. In 1982, when I was working for the Economist, the Falklands War erupted as if out of the blue. In the Economist the following week I produced a chart of what we called the “Falklands war machine”. In it I put the Joint Intelligence Committee in the hierarchy of the Defence and Overseas Committee of the Cabinet, and so on, and what was going to be the War Cabinet, and mentioned the weekly production of the summary of intelligence, the Red Book. The reaction in Whitehall was astonishment; it was if I had held a crucifix to Dracula. We have, indeed, come a very long way, and quite rightly. The ending of the Cold War made it so much easier as well in terms of admitting to all of the agencies and the structure of Cabinet committees and assessment staff and so on beneath.
Perhaps I may concentrate today on the terrain covered by section 5 of the ISC’s 2010-2011 report—the configuration and the working rhythms of the central intelligence machinery. Since the committee reported and the Government replied, we have had the report to the Prime Minister prepared by Paul Rimmer of the Cabinet Office’s assessment staff, and Kieran Martin, then of its Security and Intelligence Secretariat, on the future workings of the Joint Intelligence Committee.
In essence, the Rimmer-Martin report recognises the new reality—that the JIC has become partially eclipsed by the work of Mr David Cameron’s highly significant innovation on the first day of his premiership when he created the National Security Council. As the National Security Adviser, Sir Peter Ricketts, expressed it during an International Institute of Strategic Studies seminar on 30 November—at which the noble Lord, Lord Gilbert, was also present—the NSC has become,
“the uber customer for the intelligence product”,
which, he explained, has resulted in a,
“big change in the landscape of the JIC”.
The Rimmer-Martin report, which the Prime Minister has now signed off, declares that,
“The NSC’s priorities should be the lead driver of the JIC agenda”,
and that,
“The NSC (Officials) meeting”,
each Wednesday morning,
“is best placed to oversee the tasking of the JIC, in line with its core role of setting strategic direction for the NSC. The NSC(O) should therefore task the JIC. However”,
Rimmer-Martin continues,
“the JIC must retain the latitude to provide early warning on issues outside the immediate cycle of the NSC agenda”.
As a result, from next month, January, JIC meetings are to divide into two: into a monthly gathering of principals at four-star level, including the heads of the agencies, as has been the norm, to take the more strategic and longer-term papers prepared by the assessments staff; and weekly meetings in the interim of sub-principals, “to agree papers in between”.
I recognise that these arrangements reflect the new reality. Over the past few years, even before the creation of the National Security Council, it has sometimes been hard to entice busy grade 4s to JIC meetings. For a while they fell to fortnightly rather than weekly, which was a mistake. Indeed, I have heard the JIC described by an initiate as, “the most highly paid re-drafting committee in Whitehall”. I am reassured by the fact that the assessments staff reports are very much a part of the NSC’s meetings and that the assessments staff continue to produce each morning the daily highlights of intelligence summaries for the Prime Minister and those Ministers inside the inner intelligence loop. I note, too, that the JIC will continue to set the annual requirements and priorities for the intelligence and security agencies.
However, I am concerned that some key elements of the JIC tradition might fade under the new dispensation. The most crucial and lustrous elements of that tradition emerged from the experience of the JIC during the Second World War, after Winston Churchill brought the JIC fully into the Whitehall sun—and after a pretty feeble first four years of life following the committee's establishment in 1936. It was the working assumption that the painters of the intelligence picture would keep firmly separate from those who decide what to do on the basis of it, and that the intelligence providers and the JIC analysts do not fall into the trap either of advocacy or of telling their customers what they wish to hear, rather than speaking truth unto power. I have always believed truth unto power to be the gold standard of all Crown service, but especially those of the secret servants of the state. There have been lapses during the history of the JIC, but that tradition has always been restored and remains much admired by allied intelligence nations.
Early in the new year, a chairman of the JIC will be appointed to replace Alex Allan, for whom I have the highest regard. I hope that his successor, whoever he or she may be, will be steeped and marinated in that great tradition. I hope, too, that the Intelligence and Security Committee will keep a close watch on the new arrangements, to protect the JIC as best it can from further marginalisation and to report to Parliament next year how the NSC's pace-making and task-mastering has played out in real terms, both within the central intelligence machinery and in the work of the secret agencies. As ever, the ISC must be Parliament’s cat’s eyes in the dark.
Viscount Slim
My Lords, I did not intend to intervene until I heard from both the noble Marquess, Lord Lothian, and the noble Lord, Lord Butler, of the slight rift—I put it at slight—with our American cousins. I was in Washington some three weeks ago. I must declare that I am an honorary chairman and director of the OSS—the only Englishman ever to be given such an honour. Of course, one mixes with the fraternity, as one might say. I also made a point of talking to a couple of senators and a number of congressmen, particularly those concerned with the Armed Forces committees and so on. My message throughout was, “You have problems; we have problems. It is absolutely vital—more than ever before—that our intelligence and security services, and the special forces of both our countries, work closer than they ever have”, because, as we have heard today, other problems are going to hit us and they are coming on the horizon very quickly.
I merely tell your Lordships this because while it is up to the committee to handle it, not me, I got the most tremendous feedback and reception from our American friends of all the various agencies that I met. There was a gathering of 600 at which I spoke, and just about everybody was there. They came up to me afterwards and said, “This is vital. You have made a good point. We agree, and we must do something about it”. While it is your Lordships’ job on the committee and I support you greatly, I just felt that your Lordships should know about that tremendous feedback, and I was talking to the most senior people. We should not approach it too nervously. We should get stuck in and retain our great and close co-operation with the American fraternity.
Lord Triesman
My Lords, I start by joining everyone else in thanking the noble Marquess, Lord Lothian, who not only introduced a very important report but did so in a way that I thought was very valuable in clarifying the critical issues in that report. Like him, I welcome the appointment of the noble Lord, Lord Butler, to whom I must apologise. I got locked in as the Vote was being declared in the Chamber and consequently missed what I hope was no more than a few seconds of his informative and important speech.
In thanking the noble Marquess, Lord Lothian, I want to say that I was strongly impressed by what he had to say about the reform of the committee and about the proposals that are likely to appear in the Green Paper—an issue to which my noble friend Lord Foulkes also referred. I am quite sure that my noble friend Lord Foulkes is right about political balance, but I accept the argument that the future disposition of the committee and the way in which it works is a matter that still falls to be discussed on another occasion.
I agree with the noble Marquess about the role of redactions—they are plainly necessary, so we might as well be candid in saying that—and I agree strongly that the character of the changing risks that we face may well suggest the need for the recreation of a single account in order to be able to act with the appropriate flexibility.
I agree strongly with the notion of oversight of operational matters and of material of public concern that is in the national interest, and I can completely see that that could be formalised on a statutory footing by the Government. On behalf of the Opposition, I indicate my strong support for those propositions.
The noble Marquess must be right in what he says about the committee’s resources. The committee must have the capacity to generate information and to be able to analyse information on its own account.
Both the noble Marquess, Lord Lothian, and the noble Lord, Lord Butler, made the point that there is a strong case for the provision, under parliamentary rubric, of a presumption that foreign intelligence should remain closed in court procedures unless there is another reason. Unless we are going to abandon that whole approach, we must surely take that step, which is the only rational step that achieves that outcome.
My noble friend Lord Foulkes, in describing the importance of this overall area, said that he would welcome broader discussions on the Floor of the Chamber. There must be good sense in that.
The noble Lord, Lord Alderdice, drew attention to cyberattacks. I will come back to that more substantially in a moment because he made some very important points. However, I was intrigued by his argument, for which there may well be compelling evidence, that as changes take place in Europe more generally—and certainly within the EU—there will need to be careful consideration of whether new kinds of threats are emerging as a result. It will be interesting, to say the least, to see how fast these issues emerge on the agenda of the principal think-tanks over this next period.
The noble Lord, Lord Butler of Brockwell, made the point, which I think has just been echoed by the noble Viscount, Lord Slim, about the international character of the work of the intelligence agencies. I share that view completely. In the contemporary circumstances, it is almost impossible to imagine working other than with those who have shared interests. There is too big a hill to climb under any other circumstances.
Like the noble Lord, Lord Butler, and others, including the noble Lord, Lord Hennessy, we strongly support the creation of a parliamentary committee as the natural successor to the committee’s work over a long period.
The noble Lord, Lord Hennessy, provided an exceptional forensic description of the new architecture, and I appreciated that a good deal. In the course of his speech, he made the point about the JIC potentially fading away. Perhaps I can address that point in a little more detail. First, Sir Malcolm Rifkind’s committee has produced an illuminating report that is of great use to all of us. He does not specifically mention the work of the staff of the intelligence agencies, but when you look at the overall substance of the report, you can identify the value of that unsung part of our work permeating throughout it. I share that appreciation and want to record the fact.
The report is couched, like so many that we produce and see, in typically diplomatic language. None the less, it is very sharp on all the main issues. However, I fear that the Government’s response is much less sharp, rather less focused and can be frustrating to read. I say this out of an interest and pride in, and a concern for, our national interest in this. There is no party politics in this point as far as I am concerned. I fear that it is of no use to deal simply with the main observations and proposals by thanking the committee for all its work and saying that you agree with all of it when the following text gives no detail of what that agreement might mean. I do not say this to be disobliging but the Government cannot argue that important parts of their response can be put in those terms without any apparent need to say what they intend to do about some of those key issues. I would have welcomed much more detail within the restrictions of dealing with secret intelligence.
May I just identify a few of the things that fall under that rubric and where I should like to see a more detailed, and perhaps more penetrating, response from the Government? The first is the issue that the noble Marquess, Lord Lothian, and the noble Lords, Lord Alderdice and Lord Butler, have all mentioned: the provision of a suitable cadre of internet specialists. The noble Marquess, Lord Lothian, rightly mentioned that 18 bodies seemed to be involved in this and that there is at least a risk of a lack of co-ordination among so many of them. I share the view of the noble Lord, Lord Alderdice, that the attributes of many of the specialists are curious in the general spectrum of government service. I well remember, on one occasion as a Minister, talking to a young guy who collided with me on his skateboard in the office. Neither of us was seriously injured; I am bringing no claims against anybody for injury at work. However, it was certainly unusual. I completely subscribe to the view of the noble Lord, Lord Butler, that many of these interesting and obsessive characters do it out of sheer love of diving into the nitty-gritty of all these processes.
The Government’s view of the possible need for a suitable cadre of internet specialists appears in their response to proposal E. It is essentially that we will somehow find a significant number of people who will emerge and train those we need. I will be candid: I do not expect to see it and I do not believe it. Interestingly, in recommendation K, shortly after the Government have made the point that they will produce these people by exposing them to the available suitable trainers, they also say that they will improve value for money from their work. I am keen to know how we will do these things and how many people we think we can recruit to these roles. Will the departments compete, as the Government’s response suggests, or, as under recommendation K, will they not compete because this is a time for non-competitive recruitment? Both proposals appear within two or three recommendations of each other. How on earth will we do these things? I do not ask this to be objectionable. If we all agree that it is that important, I am just eager to know how on earth we will do it. What do we think we need to do to reach any kind of milestone in that area?
I turn to recommendation F, about GCHQ’s accommodation strategy, which is described in the report as having been “haphazard in the past” and inflexible for the future, with no long-term sensible strategy. The Government’s response to that is that the haphazard character of the strategy will broadly be overcome. It is not clear how, because all the means of overcoming it seem to be dependent on others, including SIA. I am not sure that that is a strategy at all. How precisely will the Government overcome the criticism that the report levels and what is their plan for doing so?
I turn to the Government’s response to recommendation I, on the need to respond effectively to increased threats in Northern Ireland—incidentally, I do not for a second think that the Government do not take these threats seriously; quite the contrary, I do not know of any Government who in recent times have not taken the issue completely seriously. The committee states that,
“further sustained effort will be required”.
The Government agree, but how is that to be achieved? What consolidation of effort do the Government have in mind? Will there be additional resources or is it suggested that existing resources will be redirected? What, broadly—and without providing any sensitive information to those who would take unfair or wrong advantage—is the plan for doing that? What is even the shadow of the plan that we might have a look at?
I want to focus above all on the committee’s concern, which the noble Lord, Lord Hennessy, has also dissected for us with great clarity, to avoid duplication, overlap and the consequent lack of focus, those matters which are covered broadly in section 5, but which come up time and again in the report as a whole. They are dealt with in recommendation N, on prioritisation and allocation of effort; in recommendation O, on the creation of the national security adviser post; in recommendation P, on overlaps in remit and duplication; in recommendation S, on the effective co-ordination of it all; and in recommendation T, on the strategic tasking directive not being satisfactory.
The noble Lords, Lord Foulkes and Lord Hennessy, have both discussed that this evening. The noble Lord, Lord Hennessy, said that we need to address a new reality, which I am sure is quite right. However, the Government’s response is essentially an assertion that there will be prioritisation, that the roles will not overlap, that the national security adviser post will co-ordinate the work of the JIC, and that the requirements and priorities in process and the strategic direction of the National Security Council will all somehow be addressed without confusion in the midst of this quite complicated architecture. All those things are at least implied by the Government’s response to recommendation O.
In response to recommendation P, there is a list of the primary responsibilities of the Office for Security and Counter-Terrorism. It is said that they are not the responsibilities of the National Security Secretariat, in respect of which no equivalent list is produced by the Government. I think that a number of people, including those on the committee, have described the listings as being details at a high level. It is because they are at a high level that I cannot tell whether the overlaps have been overcome. I simply cannot follow it; I have tried really hard. I hope that noble Lords will forgive me if I have somehow missed it, but I think that those questions about duplication, overlap and the lack of focus that might result have simply not been dealt with intelligibly in the Government’s response, and they are vital concerns for our national security. I am therefore inclined to the belief, expressed by the committee, that there is more to be done. Can the Minister perhaps list for us today the specific responsibilities of the secretariat so that I can see how they differ from those of other bodies? That would allow us to judge a little more about the overlap question.
My final observation, very briefly if I may, is on the question of the limitation of vital resources to undertake the work successfully. I think that the noble Lord, Lord Alderdice, also raised this question. In recommendation V, the point is made that cuts to the ISC and the BBC Monitoring service are regarded as dangerous to defence intelligence capability. Defence intelligence relies heavily on these sources to support operations—these are the points that the committee makes. They serve the intelligence community as a whole, in addition, and without good information it is obviously hard to work on the basis that you genuinely have sound enough intelligence to do the job effectively.
The Government's response is not to give a clear undertaking or commitment about those resources—one might perhaps expect that response to what might be a problem for the safety of the people of the United Kingdom—but to say that they will work with the BBC to examine requirements. I want to know how and when that assessment is to take place. Will the levels of investment be sustained in the interim, while everybody is working out what might be the future dispositions? What leads the Government to believe that the defence intelligence and wider intelligence communities have not made a proper assessment so far of what they need, in order to work effectively at present? There may be an adequate response, but what I worry about is that in some areas—for example, on page 13 of the Government's response—it appears that those decisions have already been made in a negative sense. The future cuts will be, it says,
“fully in line with those of the wider Cabinet Office”,
while the task remaining is to,
“identify ways of minimising the impact”.
Whatever happens, it looks as though those cuts have been embedded.
It may be that the answer to a number of these questions will be that there is an operational risk in answering them. If that is said today, I shall accept it because I know from first-hand ministerial experience that I have no desire to see anything said that would be of any use to an enemy of the United Kingdom. However, the background detail in Sir Malcolm’s committee's excellent report suggests that those questions could be answered. That is the reason I urge the Government to do so. I look forward to the Minister’s answers. I feel that he will surely do better than the Government's response to the report and that that would be of huge benefit in making sure that the value of Sir Malcolm Rifkind's work, and the work of his committee, is realised to its fullest extent.
Lord Gilbert
My Lords, may I enter a rather eccentric note of dissent? I was listening with great care to my noble friend's speech. I thought it extremely well informed, and I was not surprised at that. My point of dissent is that I do not approve of this committee being translated into a parliamentary committee. I see great virtue in it being the only committee of parliamentarians that reports directly to the Prime Minister. In my experience, when I was on the committee and Sir John Major was the Prime Minister we used to have meetings with him at No. 10 to discuss our reports in detail. I know of no other committee that has that sort of access and I think that the Prime Minister and the committee benefited from it. The other benefit which you have from it being a non-parliamentary committee but a committee of parliamentarians is that you hugely diminish the role of the Whips in who goes on that committee. Both those things are matters of supreme advantage, which we would sacrifice by transforming this into a parliamentary Select Committee—a development which I personally deplore.
Lord Triesman
My Lords, that intervention invites a very brief response. I have no aversion whatever to the committee being available to and able to speak to the Prime Minister. Broadly speaking, I believe that Select Committees in Parliament have had that capability for a long time. In my view, the biggest advantage is that these areas which have been regarded as incredibly obscure and difficult, and usually as a means of veiling from the public and parliamentarians some things which are in their vital interests, and in the vital interests of the country, will at least be dealt with on the same basis that much other sensitive material is.
The Marquess of Lothian
As a matter of information, what we are looking to become is not a parliamentary committee, a Select Committee, but a committee of Parliament—there is an important distinction. Because of the work we do, being a parliamentary committee, a Select Committee, would put at risk some of the committee's ability to look at certain information that it can look at at the moment. We are looking to become something in-between. For exactly what that will be, I think we have to wait to see the outcome of the Green Paper, when the White Paper is produced.
The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)
My Lords, this has been an extremely well informed debate, as one would expect. I am sorry if the noble Lord, Lord Triesman, found the Government’s response—
Lord Howell of Guildford
My Lords, as I was saying, this has been a highly informed and expert debate conducted by many expert people. I was regretting that the noble Lord, Lord Triesman, found the Government’s response a little lacking in sharpness and focus or perhaps lacking flavour; I shall use my best endeavours to add a bit of pepper and salt to the meal and perhaps make it a little more tasty.
Before turning to address a range of detailed points, which I intend to do, first let me thank the noble Marquess, Lord Lothian, for opening this debate and the two Members of our House, the noble Marquess and the noble Lord, Lord Butler, who are the representatives of the House of Lords on the Intelligence and Security Committee. The words before me are to thank in a rather formal way all the other members of the Committee, but I would like to go a bit further than that. First, I would like to thank the staff as well as the committee members, and secondly, I would like to say frankly that I am awed by the amount of expertise and the work and dedication that are put into the committee’s work. In a sordid world of gain and loss, this committee has no obvious reward and there is no dose of the elixir of publicity that politicians like—it is toiling in solitude, and it is magnificent work. One sometimes half-wishes that the media would pick up on the fact that all this work is done, because they are oblivious of the amount of effort involved. They may comment on the results and the things that titivate the public, the media and so on, but they are rather oblivious of the amount of work that it is put in by people such as the noble Marquess, the noble Lord and the committee. I can see that too much publicity is not desirable, but a little greater recognition in the media of what is being done in the national interest would sometimes be appreciated.
It is vital that we have a strong framework for overseeing the work of the security and intelligence agencies. The ISC’s annual report is of the highest quality and underlines the unique and valuable role in this framework that the committee plays; I do not think there is any question about that. We should also think about the subject matter: the agencies. We should be proud of them. Their staff work day in, day out, often at very great personal risk to themselves, to keep the nation and its people safe. We owe them an enormous debt of gratitude and, as the committee notes, those working in this field continue to excel at a very challenging task. Again, those words are inadequate for the sheer danger often involved in the task. I remind noble Lords of the very striking speech made by my right honourable friend the Foreign Secretary on 16 November about the work of the intelligence services, in which he highlighted the extreme, often fatal, danger faced by those working in those agencies. I am sure that noble Lords will join with me in sending them our thanks and our praise for the work they do for our nation.
As my right honourable friend said in that speech, these agencies not only defend us from threats to our national security and to the lives of British citizens but they also provide vital support to British military operations and diplomatic intelligence which gives us a key national advantage in foreign and security policy. It is precisely because of the vital importance of the agencies’ role—and much of it must inevitably be kept away from the public gaze—that their work should be, and is, properly scrutinised.
Now let me turn to the detailed issues raised, after which I will turn to the detailed points made by individual Members in this debate. First, the Government’s Justice and Security Green Paper—it is white, but never mind—has generally been recognised as a very striking and strong contribution to the evolution of thinking in this area. The Government’s aims were set out in the Green Paper. These are: to better equip our courts to pass judgment in cases involving sensitive information; to protect UK national security by preventing damaging disclosure of genuinely national security-sensitive material—I will come in a moment to how that balance is to be struck; and to modernise judicial, independent and parliamentary scrutiny of the security and intelligence agencies to improve public confidence that executive power is held fully to account.
The Green Paper is one part of a package of measures announced by the Prime Minister in July 2010 aimed at restoring confidence in our security and intelligence services and allowing them to get on with the crucial job of keeping us safe. The Prime Minister also announced the establishment of the Detainee, or Gibson, inquiry. He published the consolidated guidance issued to intelligence officers and service personnel on engaging with detainees held overseas by third parties. He also announced the intention to reach a mediated settlement of the civil claims brought by former detainees of Guantanamo Bay because those claims could not be properly tried. This was achieved in November 2010 and was touched on by the noble Lord, Lord Butler, in his very sagacious intervention.
Combined with the proposals in the Green Paper aimed at improving the courts’ ability to handle intelligence and other sensitive material, this represents a comprehensive package to address these difficult issues and to enable our security and intelligence agencies to get on with the vital task of keeping the nation safe. The Green Paper consultation process is under way and closes on 6 January. In answer to the query raised by the noble Lord, Lord Foulkes, the aim is to go for legislation as soon as practicable, or thereafter. The comments in this debate will also receive full attention as part of that process, along with the range of responses from the public, which have been fairly extensive and substantial.
There are two distinct parts to the Green Paper proposals: reform of judicial scrutiny of intelligence and other government-held sensitive material, and reform of the non-judicial scrutiny of the intelligence community by independent and parliamentary bodies. I am going to deal with both of these. Reform in each area in its own right is required and necessary.
On judicial reform, the Government favour legislation to make closed material procedures available in civil legal proceedings where they are not currently available and in the rare instances in which sensitive information is centrally relevant to the case. The role of special advocates to represent the interests of the excluded individual is central to ensuring a sufficient degree of procedural fairness in closed hearings. The Government will ensure that this, and all other legislative proposals in the Green Paper, are consistent with our domestic and international legal obligations. The two drivers in this whole process are to increase fairness to all parties in civil proceedings, and to ensure that sensitive material is adequately safeguarded from public disclosure. That is the balance that has to be struck. This last point is critical, especially the importance of keeping safe information passed to us by other Governments, which several noble Lords, including the noble Marquess, Lord Lothian, referred to. We expect other Governments to keep our material safe when we pass it to them, and of course they expect the same of us. This goes to the heart of the control principle. Where it has in the past been offended—one instance was quoted—the repercussions were serious, sensitive and difficult to handle.
On non-judicial reform, the Intelligence and Security Committee has put forward in its excellent report, and indeed in the debates that took place in another place, reform proposals that the Green Paper largely supports. We have here a concurrence of support. The Green Paper proposes: changing the ISC’s status to a statutory committee of Parliament, answerable to Parliament as well as to the Prime Minister—a point that almost all noble Lords have raised; formalising the ISC’s role in overseeing the work of the wider intelligence community—that is, defence intelligence and the OSCT central intelligence machinery in the Cabinet Office; reforming the ISC appointments process to give Parliament a more substantial role; reviewing the ISC’s resourcing and accommodating the ISC on the Parliamentary Estate—a matter raised by my noble friend Lord Lothian—and the Government are reviewing the central question of resources for the ISC as distinct from resources for intelligence operations generally; and the question of the ISC having the power to require information from the agencies, subject only to a veto exercisable by the relevant Secretary of State. That is our positive and detailed response to the Green Paper, which coincides with what noble Lords have been saying.
On a more sensitive and difficult area, the Government are giving careful consideration to the ISC’s proposal, reinforced by the noble Lord, Lord Butler, and I think by my noble friend Lord Lothian, to extend its remit to include operational aspects of the work of the agency. At the risk of too much repetition, I can only repeat the words of the Green Paper about how far one can go on this front. The consequences of creating a general power are significant and need careful thought to ensure that the implications have been understood. The principles that the Government believe are important in considering this issue include safeguarding the integrity of ministerial responsibilities, avoiding overlap with the roles of other independent oversight bodies and ensuring that there is no lessening in the effectiveness of the work of the agencies or undue resource burdens placed on them. In addition, any such oversight of operational work would need to be clearly retrospective and, in the Government’s view, would need to be focused on matters of significant national interest. The point was rightly made, I think by the noble Lord, Lord Butler, that we do not want to go down the path of our American allies or the Washington procedures, which go into areas where we would not want necessarily to follow. Any change of the kind that we suggest or has been suggested would therefore need to be based on a clear understanding between the Government and the committee on how this should work in practice, articulated either in legislation or possibly in a supporting document such as a memorandum of understanding.
Before I come to the detailed points that have been made, let me refer to cybersecurity, an issue raised by the noble Lord, Lord Alderdice, and several others. Of course there are concerns and of course the Government share them. The Government have recognised the real and increasing risk to the UK’s national security from cyberattack. The National Security Council has assessed cyberattack as a tier 1 threat in the national security strategy and has allocated additional funding of £650 million over four years to respond effectively to threats from cyberspace through a transformative national cybersecurity programme.
In fact, my right honourable friend William Hague, the Foreign Secretary, hosted a conference on cyberspace at the beginning of last month, which looked at how Governments, businesses, individuals and non-governmental organisations can maintain the economic and social benefits of the internet and guard against criminal and security threats posed in cyberspace. All delegates agreed that immediate steps must be taken to develop practical measures and shared understanding, and to agree common approaches and confidence building through the UN group of government experts and through the Organisation for Security and Co-operation in Europe and other regional organisations. The UK is taking a leading role in initiating these important international discussions and we are pleased that the London agenda will be carried forward at a further session, which will be held in Hungary, and after that in South Korea. So we will continue to be very vigilant on that front in both overseas fora and at home.
I was going to add something on the Olympics, which did not come up in this debate but was certainly a matter aired in the debate in the other place. Therefore, for reassurance and for the record, I say that the Government are committed to a safe and secure Olympic and Paralympic Games. With less than eight months to go, safety and security activity is on track and well advanced, including within the intelligence community. Funding for Games security has been protected. The Government remain confident that the core safety and security programme can be delivered within the £475 million announced in the spending review of last December. The venue security budget is separate from the budget for policing the Games. We are confident that the 2012 Games will be delivered within the £9.3 billion public sector funding package. These costs are an appropriate investment in the safety and security of the public and our international visitors.
I have covered some of the points raised but let me turn in more detail to the excellent and informed comments of various Members during this debate. I repeat: the ISC report is excellent. My noble friend Lord Lothian made a number of central points about status and so on. I have already mentioned that. He asked about funding changes if the nature of the threat changes. This is something that can and does happen. The nature of the threat changes and there needs to be flexibility. Where unforeseen emerging threats place new demands on the SIA, the first response has been and will be to reprioritise within existing work. Agility and flexibility to redirect effort towards emerging threats and away from receding ones are core established strengths of the British intelligence community. That is splendid language for saying, “Don’t go on spending on things that have been solved and have passed. Focus on the new challenges and switch your resources to them”. There are mechanisms in place for doing that. The Government’s top requirements are given the priority and resources that they need. The point that there is a need for flexibility and that things can change rapidly is well taken, and the operational systems are in place to meet it.
My noble friend also mentioned the overseeing of operations by the ISC and closed material procedures, which I have already covered. He also mentioned a rebuttable statutory presumption. With a statutory presumption against disclosure, it must be possible for the courts to rebut the presumption if necessary. The Government’s analysis is that such a rebuttable presumption, while carrying the weight of Parliament’s opinion, would not alter the decision-making process of the court, which is anyway already deferential to the Executive on national security-related decisions. That is the Government’s comment on that point, which my noble friend Lord Lothian raised.
The noble Lord, Lord Foulkes, spoke about a number of relevant issues. He talked about the composition of the committee. The obvious answer is that party politics and the balance between parties are not relevant to the nomination of individuals to the committee. It is not seen as a political matter at all. It is a matter of gaining people with first-class experience. It might well be that in one Parliament or one set of membership there would be two or three members of the Opposition and one or two on the Government’s side. The people who serve on the committee are not connected to the balance between the parties. I have to say that to the noble Lord. He may say that he wishes it was but that is just not the way it is.
Should it be a committee of Parliament? The answer is yes. That is what the Green Paper proposes and that is what we are moving towards. We will work out how to do that. I have answered the noble Lord’s question about the timing of legislation.
The noble Lord turned to the national security adviser, and I do not think I am going to make any personal comments here, except to agree with him that of course all departments put up their defences—he used the word “blinkers”. All institutions put up their defences and fight their corners, and they are right to do so, just as Ministers are right to try to remove the blinkers. They do not always do so to roars of applause, but these things have to go on, and if Ministers do not do that, they are not doing their job. That is the remedy for his concerns.
As for co-ordination and who co-ordinates what, the whole point is that the National Security Council, which, as the noble Lord, Lord Hennessy, said, is an amazingly important innovation, co-ordinates. It is under the chairmanship of the Prime Minister, and it is the co-ordinating body. That is the way the new system works and is the whole point of the National Security Council in its developed role under this Government. It is a very significant change. There is co-ordination right under the Prime Minister. He has advisers and that committee, and there is a relationship with the JIC as well, which is charged with looking at, responding to or putting into effect the kind of agenda that the NSC establishes and lays down.
The noble Lord, Lord Foulkes, also asked about Scotland and the security implications of Scottish independence. I am not sure I am in a position to give an answer to that, or even want to, but one can safely assume that the relevant departments are assessing it, and if such a thing were to occur, the machinery would go forward to examine all the implications for all aspects of UK policy of Scottish independence. I do not think I can say more than that. The noble Lord very generously reminded us again to thank the intelligence services for their skill, professionalism, integrity and, I would add, sheer courage as well.
The noble Lord, Lord Alderdice, said that he had been a customer of the services. So was I for a time in the past, and I suppose we were good customers because we are here to tell the tale. He mentioned BBC Monitoring, which is important, and I have a note on it that I would like to share with him about the real cuts that had to be applied when the new Government came in. We did not have any choice. The cuts were discussed with BBC Monitoring in principle before the start of the financial year, and we have worked closely with BBC Monitoring, and continue to do so, on the best ways of minimising the impact of reduced funding. I am advised that the Cabinet Office is currently working with stakeholders and BBC Monitoring to agree the form and structure of BBC Monitoring during the transition period and after it has joined the BBC, which will be in April 2013. That is what is going on there. That is what I wanted to tell the noble Lord about that.
The recruitment of people who are not conventional civil servants, in the phrase used by the noble Lord, Lord Butler, brought back memories—and I suspect it does to a number of noble Lords—about life in university days when people appeared from unmarked offices in London and wanted to have tea to look you up and down to see whether you were suitable material for their purposes. A number of my friends went off for long strolls with those gentlemen and may even have received invitations afterwards. I waited eagerly to be asked to go on a long stroll or to have tea, but an invitation never came my way, so I was obviously considered unsuitable material, much too conventional or wrong in some sense, right from the start. The eye was clearly out, and is always out, for the original person, the non-conforming, challenging, questioning person, man or woman, and they are the people with the flair and the ability for quick lateral thinking that the intelligence services clearly need.
From my experience in and out of ministries over almost half a century, the old phrase “the conventional civil servant” is vanishing. The officials that I encounter are anything but conventional. They are a lively, original and disparate group of people who are bringing to bear ingenious minds on the increasingly complex world of government—which, of course, it is. The internet now empowers the individual and challenges the data monopoly of government, and the whole business of government is infinitely more difficult than it was 20, 30 or 40 years ago.
I would like to say a number of things on training, which is a very important aspect that was raised by the noble Lord, Lord Triesman, the noble Lord, Lord Alderdice, and others. Policies for the recruitment and retention of specialist staff are the responsibility of individual departments—that is rather obvious—but under the national cybersecurity programme the Government are supporting individual departments and agencies in developing cybersecurity training and skills capabilities for their staff. In addition, the Cabinet Office and GCHQ are both supporters of initiatives such as the cybersecurity challenge, which promotes careers in cybersecurity by annual competitions and events while providing advice and opportunities to individuals who wish to learn how to start a career in the information security field. This is a busy area and we recognise that technologists specialising in internet security, especially with experience at GCHQ, are very highly prized within a competitive external industry. GCHQ, therefore, has a retention payments system to retain its competitiveness with industry where it can. This is reviewed from time to time to ensure it remains competitive and these bonuses—because that is what they are—and the appeal of GCHQ’s mission help to keep leaver rates low compared with industry peers. That is the position; that is what we are doing. Obviously, not everything works, but the main thrust is there and will continue to deliver requirements.
On psychological training—even if I knew a great deal about it, I would not be sure whether it was right to reveal it—it would pass belief if there was not a very heavy emphasis on psychological training inside the intelligence services. One is dealing with psychological situations, so training of that kind is necessary. I would take a bet—it should perhaps be an assurance—that such training is in place.
The noble Lord, Lord Alderdice, asked about research sources. Yes, a great deal of research is carried out internally, but we also turn to independent external research support to an extensive degree. That will certainly continue.
The noble Lord, Lord Alderdice, shared with us a fascinating thought about anti-government street protests, political instability and so on arising in Europe: are we informed about where the next so-called Arab spring phenomenon is going to occur? It might occur anywhere. The intelligence services tend to keep as much of an eye on this as well-informed politicians and journalists. It does not necessarily need an exclusive monopoly of experts in secrecy to assess when the next riot in the next capital, the next burning of flags, the next raiding of buildings, or anything else, is going to be.
The noble Lord, Lord Butler, touched on the fundamental issues, as one would expect, and said that the combination had to be between accountability on the one hand and the proper requirements of secrecy on the other—that is the challenge. He referred to new spying technologies, and there are plenty of those. One tends to learn about them mostly in racy novels and then, a few years later, you discover that the intelligence services have either caught up or have been practising these things all the time. I commend particularly to your Lordships the Swedish novels by a gentleman whose name I have forgotten at the moment, but they are very popular and have been made into films. They contain hair-raising matters, broadly to the effect that nothing, but nothing, that we put onto our mobile telephones or computers is private or inaccessible to the right kind of technologies. He reinforced that we must move from a committee of parliamentarians to a Committee of Parliament, and he discussed the operational role issue which I have already commented on in considerable detail to your Lordships.
The question of the interaction between judges and courts and the need to guard sensitive material is very difficult. The noble Lord outlined the difficulty. Whether it can be met in general or whether there will be recurring individual instances where we are in difficulties, I do not know, but it is a matter that must be examined and watched acutely and very carefully. It is partly covered by what I said earlier about the control principle, access to courts for more sensitive material and closed material procedures.
The noble Viscount, Lord Slim, mentioned the American links, which are very important. No-one questions the importance of all our international links, and it may be that we need to develop—this is not a report of what is happening but an opinion by a Minister—links with intelligence in unconventional areas. The truth is that the world’s power, wealth and technological and security capabilities are moving, like everything else, to Asia, to rising Africa and to Latin America. These are the places where we will need to seek services and information. It is not merely a question of us providing them. We will also need to seek an input of new technologies, methods and information from those countries as well. This is an international scene, as the noble Lord, Lord Butler, emphasised.
The noble Lord, Lord Triesman, mentioned the response of the Government, and I have done my best to add to it. He returned to the central issue of training up a suitable cadre of people, and I have described what the Government are doing. He asked about resources and the National Security Secretariat and asked for a list of things that it does. I will give him the following list that may help. It provides support to the national security adviser by co-ordinating the development and implementation of policy for decision-making at the National Security Council; it is responsible for providing policy advice on national security and foreign policy matters to the Prime Minister, the Deputy Prime Minister and Cabinet Office Ministers; and it has a wide range of other functions including the co-ordination of the Government’s response during civil emergencies and international crises, overseeing the delivery of the Government’s cybersecurity programme and its overseas single intelligence account, that we have discussed. The secretariat has also delivered a number of cross-departmental projects, including the national security strategy and strategic defence and security review. If I may add my opinion as an old hand, I think that that is a pretty good, detailed answer to the question that the noble Lord asked. I hope he feels that it meets his needs.
We have had a very important and wide-ranging debate this evening which illustrates that it is very important that the public have confidence that the Government’s national security work is being robustly scrutinised. The first duty and the overriding priority of any Government is the protection of the British public. Great progress has been made in counterterrorism and in other areas in recent years, but serious threats to our national security remain on all sides and there are always the new surprises, the unpredictability and the variation of threats which noble Lords have referred to, which we have to be ready to meet. That is why it is vital that we have security and intelligence agencies that can continue to reduce those threats and help to keep us all safe. Their work is among the most important carried out by anyone, so it is right that they should have robust oversight. That is why we are modernising and strengthening the oversight arrangements in the way that the counsel of the debate this evening, the debate in the other place, the ISC report and the Green Paper from the Government have all emphasised. I warmly welcome the latest annual report which we have debated tonight. Its recommendations are informing change as we speak. I look forward to future annual reports being even more useful in helping our world-class intelligence and security agencies to get even better.
I end with one small anecdote. About 47 years ago—no, let me be more accurate; it was 41 years ago—when I first entered the Government as a junior Minister, a Permanent Under-Secretary of great eminence who I will not name slipped into my room one day. I eagerly expounded on the virtues of a freedom of information Act—transparency, better scrutiny, accountability and all the things that young Ministers are keen on, to which he replied, “Very interesting, but just remember, Minister, too bright a light often deepens the surrounding darkness”. That left me thinking, and I am still thinking about that statement now.
The Marquess of Lothian
My Lords, I thank my noble friend the Minister for a very comprehensive reply—one which, indeed, saved me having to say very much. I will try to be as brief as I possibly can. I also thank my colleague the noble Lord, Lord Butler, who also dealt in his speech with a number of the subjects that I thought I might have to deal with in finishing up. Perhaps I may say to my noble friend the Minister that I was disappointed in his response to the rebuttable presumption, as that has been put forward by a number of very senior people. I know that I am a mere Scottish lawyer, as indeed is Sir Malcolm Rifkind, but many lawyers feel that the rebuttable presumption gives some strength and weight to the principle of control and would be helpful to the judges in the long run. I hope that before the consultation is finished, my noble friend will look at that again but I was reassured by many of the other responses that he gave us tonight.
I have two or three very brief items. The noble Lord, Lord Foulkes, talked about having public evidence sessions in future, something which we are looking at very actively in terms of the reformed committee. It is not easy to do if they are to be genuine because of the nature of the information that we are dealing with but we think—as do the agencies—that there may be areas where we can have very genuine public evidence sessions. As the reforms go forward, we hope to be able to get somewhere towards that.
Secondly, in answer to the noble Lords, Lord Hennessy and Lord Triesman, the committee takes very seriously the question of the intelligence machinery and we will continue to do so. We will be looking in our evidence this year to pursue some of the points that have been made in this debate, and when we come to our report next year we will be reporting on whether we think that the new machinery is working. I assure your Lordships that the committee will take that very seriously.
Finally, there is something which is a slight bee in my bonnet. We were talking earlier about staff retention. I am particularly concerned about GCHQ, which really is a world leader in what it does. Rather than listen to me, perhaps I may briefly quote a little of what the director of GCHQ said, and which we published in our report:
“I need some real internet whizzes”—
he calls them whizzes—
“in order to do cyber … They will be working for Microsoft or Google or Amazon … And I can’t compete with their salaries; I can offer them a fantastic mission, but I can’t compete with their salaries … we do have a steady drip, I am afraid. Month-on-month, we are losing whizzes who’ll basically say: ‘I’m sorry, I am going to take three times the salary and the car and whatever else’”.
That is not really a problem of government or administration but a real, practical problem if we are to retain the valuable work that is done at GCHQ. We all need, together, to try and find a way of addressing that.
Very finally, and I have left this deliberately to the end, can I say thanks to the staff of the Intelligence and Security Committee? After six years, I can say that I have never come across staff who are so hard-working—in fact, they are overworked, as I think the noble Lord, Lord Foulkes, would recognise—and who constantly produce work of the highest quality and standard, without which we would not be able to operate. I also give my thanks to them.
House of Lords
(12 years, 10 months ago)
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Airports: Heathrow
(12 years, 10 months ago)
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Lord Spicer
To ask Her Majesty’s Government what assumption they make about capacity levels at peak times at Heathrow Airport when forming their transport plans.
Earl Attlee
My Lords, Heathrow Airport’s annual capacity is capped at 480,000 air transport movements, and the Department for Transport’s latest aviation forecasts assume there will be no increase in runway capacity to 2050. The Government do not make detailed assumptions about the airport’s capacity levels at peak times. This is a matter for the airport operator.
Lord Spicer
My Lords, my Question came with the bias of a former Aviation Minister. Given that Heathrow Airport is now effectively full at peak times, what is to be done about that while we wait 20 years for a new airport to be built in the Thames?
Earl Attlee
My Lords, the short answer is that the South East Airports Taskforce, chaired by my right honourable friend Theresa Villiers, determined that there should be operational freedoms for Heathrow Airport to enable the airport to recover quickly from disruptions to operations.
Lord Soley
According to the Written Answers I have received from Ministers, when the Chinese Government, the Chinese civil aviation authority and the Chinese airlines have asked repeatedly for more landing slots at Heathrow they have been told that their views will be taken into consideration by the review. Is this not deeply embarrassing and totally hopeless, in view of the economic need of this country to relate to China and other countries of that nature?
Earl Attlee
That was a bit quick, my Lords. We are grateful for all the input from all overseas Governments into our future aviation framework policy.
Lord Trefgarne
My Lords, as another member of the numerous club of former Aviation Ministers in your Lordships’ House, I ask the Minister whether the additional runway capacity that may in due course—perhaps fairly soon—be required in the south-east really cannot be at Heathrow.
Earl Attlee
I am grateful to my noble friend. I am absolutely sure and clear that there will not be a third runway at Heathrow.
Lord Clinton-Davis
—will be available at Heathrow between 2012 and 2015? I would be obliged if the Minister could give me an answer.
Earl Attlee
My Lords, I am very sorry but I did not catch the first part of the noble Lord’s question.
Lord Clinton-Davis
How many slots will be available at Heathrow between 2012 and 2015?
Earl Attlee
My Lords, I am grateful to the noble Lord. There will be no increase in slots at Heathrow, but the key point is that the number of aircraft movements is capped at 480,000 movements per year.
Baroness Kramer
My Lords, I apologise for my jack-in-the-box tendency earlier, which was due to my eagerness on this topic. Can the Minister confirm that operational freedoms are currently only in a pilot scheme and are undergoing consultation? Can he also confirm that the Government will be putting some pressure on the airlines to see whether they can move night flights into the post-6 am slot and to use quieter aircraft—the Airbus A380s, as they come on stream—for any flights that must happen at night?
Earl Attlee
My noble friend is quite right. The operational freedoms trial is in two phases: the current phase, and another phase largely over the Olympics period. One of the benefits of the operational freedoms trial is to reduce unscheduled night flights. I will have to write to my noble friend on the detail of her rather more searching questions.
Lord Davies of Oldham
My Lords, the House must be dismayed at the Minister’s negative response to this very important issue. After all, aviation is one of the important parts of the economy that is capable of growth, yet we are getting nothing but negative responses from the Government. Will the Minister at least acknowledge that we on the opposition Front Bench have offered to meet Ministers to see how we can plan a future for aviation that is considerably more productive than the Government’s present position, which is largely one of stalling and negativism?
Earl Attlee
My Lords, it is difficult to avoid being negative when the answer is, “No third runway at Heathrow”. However, we look forward to any contribution Her Majesty’s Opposition make to the future aviation policy framework. The Government want aviation to grow, but to do so it must play its part in delivering our environmental goals and protecting the quality of life of local communities. We are developing a sustainable framework for UK aviation that supports economic growth and addresses aviation’s environmental impacts.
Baroness Gardner of Parkes
My Lords, is the Minister aware that many airlines now are changing to larger aircraft, which will bring in many more passengers on each flight? Will that contribute to helping Heathrow to continue at least to receive more people, even if not more flights?
Earl Attlee
My noble friend makes an extremely good point. For instance, the A380 aircraft will be able to carry 450 to 500 passengers, and has the potential to grow significantly to its certified amount of 855.
Baroness Liddell of Coatdyke
My Lords, the tourism industry is very concerned about congestion at Heathrow, particularly as we approach 2012, which is such a significant year. I have a registered interest as a director of VisitBritain. We know that a number of airlines are not using their slots at Heathrow, thereby adding to the congestion. Will the Minister undertake to look at the situation and see whether there is a way of freeing up the slots that are being hoarded?
Earl Attlee
My Lords, the slots at Heathrow are managed by an organisation called Airport Coordination Limited, which is independent of government, and has to be. However, it has mechanisms to ensure that slots are used as much as possible. As I understand it, there are penalties if it does not use all the slots economically.
Gangmasters
(12 years, 10 months ago)
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Baroness Young of Hornsey
To ask Her Majesty’s Government whether they will ensure that the enforcement of the rights of vulnerable workers protected by the Gangmasters Licensing Authority will not be weakened as a result of the red tape challenge.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Taylor of Holbeach)
The Government are committed to protecting the rights of the most vulnerable workers in all sectors. I am pleased to say that the need for the GLA to enforce protections for vulnerable workers in its sectors was endorsed by the red tape challenge ministerial star chamber, although it recognised that the GLA needed to better target non-compliant operators and reduce burdens on the compliant. The GLA will of course continue to be monitored under the Government’s ongoing reviews of public bodies and enforcement agencies.
Baroness Young of Hornsey
I thank the noble Lord for that encouraging reply. As he will be aware, the GLA’s remit is limited to the agricultural sector. Currently, if the GLA finds that a business is engaged in abusive behaviour and practices operating in other sectors as well as agriculture, it has no powers to take action. I wonder, given the confidence in its effectiveness, what the Government are doing to ensure that the GLA can take a leading role in multiagency actions which tackle the abuse of vulnerable workers.
Lord Taylor of Holbeach
The noble Baroness can be reassured by the fact that the GLA works with a number of enforcement agencies, particularly as a partner in the Government’s human trafficking strategy. However, there are principles that underline the red tape challenge’s review on employment. The Government’s workplace rights compliance and enforcement review is now considering an enforcement architecture which would cover all workplaces and vulnerable workers, and how that can be made as effective as possible. This is part and parcel of the way in which the GLA may well be able to provide particular expertise to that body.
Lord Rooker
Given the success of the GLA, which has just been admitted in the industry that it manages and looks after, why can its remit not be extended to the construction industry? Why should the construction industry, which is as full of gangmasters as agriculture and farming, be exempt from the kind of activities that the GLA does on behalf of workers?
Lord Taylor of Holbeach
I think that I have just given the noble Lord the answer to that question. Indeed, there is a review of all vulnerable workers across the piece. Noble Lords will accept that there needs to be balance. We do not want employment to be so difficult and complex that people are discouraged from taking on employment, but we all have a duty to make sure that vulnerable workers are properly protected.
Baroness Parminter
My Lords, it is welcome that the Government have protected the budget of the GLA during this financial year. In the light of that support, is it clear that Defra will remain the lead department in order to ensure that the vital work that the GLA does to support vulnerable, low-paid, low-skilled workers will continue?
Lord Taylor of Holbeach
I have made it clear that Defra values the GLA and sees it as being a particular responsibility to make sure that it is properly funded. Not only is its budget protected for this year, it is protected for the next four financial years in its enforcement activities. I hope that noble Lords are reassured by that and the determination of the department to make sure that it is effective in performing its task.
Lord Knight of Weymouth
My Lords, last month, when I raised the issue of the Gangmasters Licensing Authority in Questions, I was much reassured by the Minister’s answer that the authority would remain free-standing. In his answer to the noble Baroness, Lady Young of Hornsey, he talked about a new “enforcement architecture”—that was the pithy phrase he used. Does that mean that the position has changed around its remaining free-standing? If so, what has changed that the Government want to weaken the focus of this highly effective body?
Lord Taylor of Holbeach
There is no way in which the Government wish to weaken the focus of this highly effective body. The previous questions pointed out that there are experiences that the GLA has in its field which could well be useful in other fields of employment. That is why my honourable friend Ed Davey, in conducting his review, is looking at the GLA to see how its practices can be incorporated into a broader brief.
Lord Foulkes of Cumnock
My Lords, I am sure that the House was very interested to learn that the red tape challenge has a ministerial star chamber. Will the Minister tell us how many other ministerial star chambers there are in government? Is there one on the European Union?
Lord Taylor of Holbeach
From my knowledge of star chambers, which is rather limited to history books and the like, they are where conflicting views which may need to be resolved are discussed in an informal way. That is exactly how the star chamber has functioned in this way. I am not suggesting for a moment that the European issue could be resolved quite so easily.
Lord Brooke of Sutton Mandeville
My Lords, “GLA” has another acronymic provenance. Will my noble friend see if it is possible to avoid duplication of acronyms when they occur for bears of very little brain who find it very difficult to follow?
Lord Taylor of Holbeach
Unfortunately, the first letters tie up with the Greater London Authority but as far as I am concerned the GLA is the Gangmasters Licensing Authority.
Baroness Butler-Sloss
My Lords, in view of the very helpful comments of the Minister, is Defra the right department to be carrying this forward?
Disability Benefits
(12 years, 10 months ago)
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Baroness Sharples
To ask Her Majesty’s Government what checks are carried out on those claiming benefits on the grounds of disability.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
My Lords, as with all benefits, a series of measures is in place to ensure that disability benefits are paid only to those who are entitled. These vary for each benefit. Last month, Professor Harrington confirmed that there has been positive progress in improving the work capability assessment, which determines entitlement to employment and support allowance. The department continues to develop the assessment for personal independence payment in consultation with stakeholders and relevant experts.
Baroness Sharples
Now that Crimestoppers is involved, can we expect to see more claims dealt with quickly—which are false claims? Will the public be encouraged to approach Crimestoppers? I gather that their calls will be entirely anonymous.
Lord Freud
Yes, my Lords. I very much welcome the fact that we have made an arrangement with Crimestoppers. We already have the national benefit fraud hotline; but the good thing about Crimestoppers is that it is a very trusted brand, which carries anonymity to those who call it. That will be particularly useful when we look at organised fraud, an area about which I am particularly concerned.
Lord Wigley
My Lords, does the Minister accept that the campaign organised by parts of the tabloid press insinuating that disabled people drawing benefits are cheats and scroungers, is totally unacceptable; that the vast majority of disabled people dependent on benefits are absolutely straight and honest; that the level of fraud is relatively low; and that this campaign should stop?
Lord Freud
Well, my Lords, clearly we are very concerned by any misrepresentation in the tabloid press, which likes to simplify matters a great deal. We have a real issue in making sure that we have a very clear, coherent and consistent categorisation of who should receive these benefits, because one of the main policy thrusts of this Government is to make sure that the people who really need the money are the ones who get it.
Lord Low of Dalston
My Lords, is the Minister aware that the Benefit Integrity Project, introduced by the previous Government to weed out the misuse of disability benefits, found more people on DLA whose needs had risen than fallen, contributing to a rise in expenditure on benefits? Does he expect the introduction of personal independence payments to lead to a similar increase in expenditure, as well as a rise in the cost of administration?
Lord Freud
My Lords, there has been relatively little research on DLA and how accurately it is targeted. The last comprehensive survey was in 2005, and it was found that more than 11 per cent of cases were no longer applicable. That does not mean that fraud was involved; it just means that matters had moved on so that it was no longer applicable. We also found a reasonable proportion—much less—of people who should have had higher payments. It is a subjective, inconsistent benefit, which relies too much on self-assessment. We need to get a grip of it.
The Lord Bishop of Oxford
My Lords, is the Minister aware that many of us are very concerned that the measure envisaged might have a deleterious effect on the very group that the Government are most concerned to help—that is, those who would come into the support group eligible for universal benefit, but who are actually living alone and without carers?
Lord Freud
Yes, my Lords. One of the things we are aiming to do with the employment and support allowance, and the support elements there, is to make sure that we have consistent and simple definitions of who should obtain benefits. At the moment, we have a multiplicity of benefits, and we are aiming to simplify things so as clearly to direct our support to those who need it most.
Lord Beecham
My Lords, do the Government intend to implement Professor Harrington’s recommendation to subject cancer patients undergoing chemotherapy to work capacity assessments?
Lord Freud
My Lords, this is a very interesting issue. We have been reading closely Macmillan’s evidence to us, and what is set out is not what Macmillan is actually asking for. Many of the oncologists whose evidence was taken say that it is important for many patients to stay in work. One stated that it may be inappropriate for some patients and that it risks stigmatising chemo patients, but that some people on long-term maintenance treatments may have little or no upset and be quite able to work. We are taking that evidence and looking closely at how we apply it. We will have more people with cancer in the support group because many undergoing oral chemotherapy need to be in it. However, we are not taking a blanket view and we do not want to stigmatise cancer patients.
Lord Addington
My Lords, will my noble friend give an assurance that when the initial assessment is made, someone with real expertise in the disability or group of disabilities advises on whether the benefit should be paid?
Lord Freud
My Lords, yes, one of the things we are keen to ensure is that there are people with expertise on whom those making the assessments can rely. Professor Harrington addressed that in his first review. For that reason, we had mental health champions in particular in each of the offices undertaking this work.
Baroness Farrington of Ribbleton
My Lords, many Members of your Lordships’ House will be aware from personal and family experience that the experience of undergoing chemotherapy of any kind, quite apart from oral chemotherapy, is most unpredictable in each individual case. Within a period of 48 hours, someone who had been coping admirably can suddenly find that they are unable to work. How on earth can the Government respond immediately to those circumstances and how can they stop the media, to which the Minister referred earlier, castigating everyone on chemotherapy as though they are workshy?
Lord Freud
My Lords, let me make it absolutely clear that the presumption for people on chemotherapy, whether it is in oral or other forms, is that they will be in the support group. However, we will check this because some people, as the evidence in the Macmillan report demonstrated, get through their chemotherapy with few ill effects, so it is right for them to continue in the workplace. They will want to do that, but the risk is that if there is a blanket move away from the workplace, we basically write off those people’s opportunity to work, and that is wrong.
Lord Roberts of Llandudno
My Lords, perhaps I may declare an interest. My wife underwent chemotherapy treatment for some time and she could not have worked at all. How much consultation is there with the patients themselves as they undergo chemotherapy as opposed to with their doctors, in order to find out exactly what their response to this is?
Lord Freud
My Lords, when people are in a position where they cannot work and the presumption is that they will be in the support group, we will take the evidence for that from the people who are treating them because it is easily available. It is only in those cases where people are able to work that we will look to place them in the other category so that we do not have a blanket position. This is what the evidence from Macmillan has shown us. We are now going to consult more widely with other cancer organisations so as to be sure that we get this particular, very difficult policy right.
Food: Waste
(12 years, 10 months ago)
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Baroness Jenkin of Kennington
To ask Her Majesty’s Government what progress they are making on reducing household food waste.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Taylor of Holbeach)
My Lords, on 15 November the government-funded Waste and Resources Action Programme—if my noble friend Lord Brooke of Sutton Mandeville will forgive me, I shall call it WRAP—announced a 1.1 million tonne, or 13 per cent, reduction in annual UK household food waste since 2006. We recognise the efforts of householders and the actions taken by WRAP and the food industry to help achieve this reduction. We are continuing to work with the industry to help householders cut food waste through responsibility deals and consumer advice.
Baroness Jenkin of Kennington
While welcoming this significant improvement and accepting that there is much more to do, I would like to ask about the Courtauld commitment. Accepting that supermarkets have made reasonable progress towards their household food waste reduction objectives—3 per cent towards their rather unambitious 4 per cent target—would my noble friend agree that the slow progress on the grocery supply chain product and packaging waste reduction, with a marginal decrease to date of only 0.4 per cent against a 5 per cent 2012 reduction target, is disappointing? Bearing in mind the estimated £17 billion a year cost associated with food, drink and packaging waste generation, would he tell us what the Government are doing to encourage supermarkets to achieve this target by the timescale set in the Courtauld commitment?
Lord Taylor of Holbeach
We are working through a voluntary deal in the Courtauld agreement. It has had some success, as I have just revealed with the figures on the reduction of food waste. Much of that is down to the work that WRAP has done in co-operation with the grocery retail trade and food manufacturing sector. My noble friend is right that more needs to be done to meet our new target for reducing waste in the supply chain. We are developing Courtauld 2 to achieve that objective.
Lord Redesdale
My Lords, are the Government making it a priority to return the nutrients and phosphates from food waste back on to the land through anaerobic digestion? I declare an interest as chairman of the Anaerobic Digestion and Biogas Association. Also, are the Government taking into account the financial savings that are being made for council tax payers through using anaerobic digestion and segregating waste on the doorstep? This has been undertaken in Wales and has shown that it costs councils a great deal less than putting it into landfill.
Lord Taylor of Holbeach
I thank my noble friend. Anaerobic digestion can divert food waste from landfill. It generates some renewable energy and improved nutrient management on farms, as he said. The biogas can generate heat and energy or be injected into the gas grid. The Government published an AD strategy and action plan in June that includes actions to develop a £10 million loan fund to support that new capacity. However, the strategy must be to avoid food waste in the first place, hence the Government’s focus on the Courtauld agreement. I note what my noble friend said about the Welsh experiment. We are learning a lot from projects undertaken in the devolved authorities. We will certainly monitor them carefully and take that on board.
Lord Davies of Coity
My Lords, I have noticed one thing with retailers: buy one get one free. Buying two is cheaper than buying singly. Are the Government trying to do anything to encourage retailers to reduce the price of each unit of product rather than produce these gimmicks?
Lord Taylor of Holbeach
The noble Lord is very topical. Some results are to be released shortly on research into exactly the impact of BOGOF—as it is called in the trade—on expenditure patterns and food waste. The noble Lord will have to await the outcome of that research before I can give him an answer.
Lord Naseby
My Lords, surely we owe a vote of thanks to retailers for the way they have taken up what the Minister calls WRAP. A 3 per cent achievement in a single year is to be greatly welcomed. Would my noble friend comment on one area where there is still confusion? The “best before” date is still confused by the “use by” date. Is there any programme for further publicity to clarify what each of those two phrases means?
Lord Taylor of Holbeach
This is an ongoing project, and an important one. As my noble friend quite rightly points out, there is confusion. Defra recently published date-marking guidance. This should help to ensure that dates are applied consistently—for example, that all hard cheeses display “best before” dates—thus making it easier for consumers to understand their meaning. I have already seen date marks that drop the confusing “display until”, in line with our guidance. I will shortly be visiting Sainbury’s to see its new eco-labelling system. My noble friend is quite right to congratulate supermarkets on the efforts that they are making.
Lord Knight of Weymouth
My Lords, as we agreed in the debate last week, household food waste is still way too high. The voluntary approach is having some effect with retailers, as we have heard. Many are moving away from BOGOF—as the Minister likes to refer to it—and for that they should be applauded. However, these actions are easily undermined by more unscrupulous competitors. Is the Minister still planning an effective grocery adjudicator, and will it have a remit to report and act on measures to reduce food waste?
Lord Taylor of Holbeach
Indeed, my Lords, the grocery supply code of practice aims to prevent retailers from transferring excessive risk to their suppliers through unreasonable business practices. Two of its conditions cover wastage and forecasting errors, clarifying the conditions in which compensation for these may be sought. The greater certainty provided to suppliers and the role that the groceries code adjudicator will play may help to reduce food waste; we certainly hope so. The body will indeed be set up.
Water Supply (Amendment to the Threshold Requirement) Regulations 2011
(12 years, 10 months ago)
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Lord Taylor of Holbeach
That the draft regulations laid before the House on 31 October be approved.
Relevant documents: 32nd Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 22 November.
Welfare Reform Bill
(12 years, 10 months ago)
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16:32 - Division on Amendment 1 - Ayes: 224 / Noes: 227 - Amendment 1 disagreed.
Baroness Lister of Burtersett
My Lords, I rise to support Amendments 1 and 2 in the name of the noble Baroness, Lady Meacher—who does not appear to be here—as well as in my name. These are not techie, administrative amendments; they are about people’s lives and have particular consequences for the lives of women, who are still the main managers of poverty on a day-to-day basis. At present, the out-of-work benefits, which the universal credit will replace, are paid fortnightly.
The Lord Speaker (Baroness D'Souza)
My Lords, I believe that the noble Baroness is discussing Amendment 1 in Clause 7.
Baroness Lister of Burtersett
I beg your Lordships’ pardon. I am speaking to Amendment 2, but also to Amendment 1, even though it has not been formally moved.
These payments used to be paid weekly and, according to Fran Bennett of the Women’s Budget Group, there is evidence from recent qualitative research carried out at Oxford University that the move to fortnightly payments has caused more problems than is sometimes claimed. “Struggle” was the word one woman used to describe what it meant. The leap from fortnightly to monthly payments will be much greater. As one claimant put it, “Very difficult to budget with two-weekly payments, impossible with monthly”. For those in-work recipients of tax credits who have opted to receive the credit weekly rather than four-weekly, who tend to be those on lower wages, the leap will be greater still.
We know from government survey evidence that nearly two in five of the lowest fifth of low-income families with children run out of money always or frequently, so we are not talking about a small number of vulnerable people in exceptional circumstances, nor are we talking in most cases about mismanagement. Again, research shows how well most people on low incomes manage their money—probably better than many of us, because they have to. However, managing money on a low income is very stressful, particularly for women who act as the shock absorbers of poverty, and it can have a damaging impact on physical and mental health.
One of the big fears is that monthly payments will lead to more families turning to high-cost credit and getting into debt. Just last week a big news story was the spread of payday loans which, according to an earlier report, have quadrupled in the past four years. In Committee, I read from an e-mail that I had received from a Conservative supporter, who described himself as a “responsible lender” to low-income households and who was enraged by the idea of monthly payments, which, he warned, would lead to an even greater reliance on such loans, which he wrote, had,
“risen up on the back of predominantly low income earners who get paid monthly”.
According to last week’s R3 report, nearly half the population sometimes or often struggles to make it to payday. In addition, there has been growing use of pawnbrokers, particularly by low-income women with children.
In Committee, we all got the impression that the Minister really listened and took on board the concerns expressed from all Benches. Indeed, he said that we had given him quite a bit of food for thought. This was very welcome. It is therefore disappointing that, having digested the overwhelming message coming from the Committee, he appears not to be willing to concede even on the point of giving claimants the right to opt for twice-monthly payments with the default remaining monthly, as provided for in Amendment 1. Instead, he appears to be looking to encourage access to budgeting products such as jam jar accounts, which would enable people to mimic jam jars in allocating their universal credit payment to different purposes through their accounts.
The Minister rightly observed in Committee that budgeting products mystified him, so, like a good academic, I have done my research. I can see the attraction in this context and I hope that the Minister is successful in developing the idea, but I am yet to be convinced that such accounts obviate the need for the amendments before your Lordships' House. Certainly, this is the view of the Personal Finance Research Centre. At present, only about 150,000 people use such accounts and typically they are charged between £12.50 and £14.50 a month for doing so. While I acknowledge that Social Finance, which provided these figures, is enthusiastic about the potential of such accounts to help people manage monthly payments, there is a long way to go to get there from here. Moreover, it has been suggested by the Personal Finance Research Centre that such accounts are more relevant to helping people who receive income weekly or fortnightly and pay monthly and quarterly bills, so they would still have a role to play in the context of the proposed amendments.
I know that the role of such budgeting tools will be explored in the planned demonstration projects, which according to the DWP will test some of the support mechanisms we will need to have in place for vulnerable groups. However, as I have already tried to explain, this is not just an issue for certain vulnerable groups. Anyone on a low income is potentially vulnerable to the problems created by monthly payments. Are they all going to be helped to access such budgeting products? I appreciate the effort that the Minister is putting in to try to develop the budgeting products solution to the problems raised in Committee, which he acknowledged were very real. However, I remain puzzled as to why he is so resistant to accepting the most obvious solution that we offered—more frequent payments.
“Is it because of cost?”, some people have asked me. It would appear not, as that was not an objection raised in Committee. The Minister himself emphasised in Committee that there is a distinction between payment period and assessment period, so that more frequent payment would not require more frequent assessment, which perhaps would have cost implications. The answer to a Written Question about cost in the House of Commons simply evaded the question. It leaves me to wonder whether the Minister’s solution is not more costly, particularly as it will also involve more frequent use of interim payments to tide people over as payments are made four-weekly in arrears. A story in the FT in September suggested as much. It said that,
“the plans had not yet been fully worked out or costed”.
In Committee, I asked that your Lordships’ House should receive a fully costed plan before monthly payments are finally agreed, but no such plan has been forthcoming. In its absence, I believe that it is only prudent that your Lordships’ House build in the kind of protection that the amendment would provide.
The Lord Bishop of Leicester
My Lords, it is a privilege to speak in support of the noble Baroness’s amendment. Her evident mastery of the subject has impressed the whole House, as it certainly impressed everyone involved in Committee. I do not have a great deal to add to what she said except that, in reading the transcript of that Committee, it struck me that two things did not emerge clearly enough, particularly given what the Minister said in reply. They were: first, a clear recognition that living on a very low income requires highly sophisticated financial domestic management and highly sophisticated budgeting. That would almost certainly be beyond the rest of us to manage. It seem to me unreasonable to expect people who are living with the burden of that kind of pressure also to develop skills beyond what the average in the community would be in terms of managing their finances.
That relates to my second point. The proposal for a monthly payment seems to have been made to generate a culture change among those who are not perhaps in the habit of regular employment—in other words, to build the capacity of those in receipt of the benefit to behave like the rest of society. However, I put it to the House and to the Minister that perhaps what we need more of is the capacity of government to understand what it is like to live on a very low income. That is where the capacity building needs to happen here.
I very much hope that the Minister, who has consistently shown a readiness to listen and respond, will think again on these amendments. My own experience as a parish priest in east London, and more recently in the parishes of the outer estates of Leicester, has shown me repeatedly and at first hand the extreme pressures under which those on very low incomes live. This is a modest amendment that would signal to those in receipt of these payments that their problems are understood and that the Government are ready to be sympathetic.
Lord McKenzie of Luton
My Lords, perhaps I may clarify precisely what it is that we are debating. I believe that my noble friend Lady Lister moved Amendment 1, somewhat belatedly, on behalf of the noble Baroness, Lady Meacher, and also spoke to Amendment 2, which is in her name.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
My Lords, as I understand it, Amendment 1 has not been moved, but Amendment 2 has. I think that the noble Baroness, Lady Meacher, will speak to Amendment 1, but I do not think that she is in a position to move it. That is my understanding.
Lord McKenzie of Luton
My Lords, I do not want an endless wrangle on this. I think that that is being a little tough on the calling of amendments. My noble friend did not immediately realise that the noble Baroness, Lady Meacher, was not in her place, so it perhaps took her a little while to move the amendment on the noble Baroness’s behalf. Frankly, if we are denied the opportunity to proceed with Amendment 1 today, we will simply bring it back at Third Reading. However, I do not think that that is in anyone’s interest.
Baroness Hollis of Heigham
I support my noble friend on this. Some of the difficulty may have been caused by the noble Baroness, Lady Hollins, kindly agreeing not to move her opening amendments, Amendments A1 and A2, so that we could have enough time to debate this matter fully. This has arisen because of the time required for the European Council Statement, which has thrown out all the expected timings. As a result, the noble Baroness, Lady Meacher, was not in her place, as noble Lords would expect, because she had assumed that the other amendments were being debated. So I hope that the House will be sympathetic to my noble friend’s request, which makes good sense. The House is self-regulating. If the House thinks that this is a reasonable thing to do, we can do it. I very much hope that the noble Lord, Lord Freud, will respond to my noble friend in the manner indicated.
Lord Wigley
My Lords, I was under the impression that when the noble Baroness, Lady Lister, got to her feet to speak, she said that she would move the first amendment and speak to the second. As she has her name on the first amendment, I would not have thought that there was an issue.
Lord De Mauley
My Lords, I think that there is a feeling around the House that the House would like to debate Amendment 1. So if the Lord Speaker is willing, perhaps we could go back.
Amendment 1
Baroness Meacher
“( ) Regulations must make provision for claimants to require payment of universal credit to be received more frequently than would otherwise be the case under subsections (1) and (3).”
Baroness Meacher
My Lords, I think that I owe a rather large apology to the House. I seem to have caused complete confusion, and am deeply sorry. I rise now to speak to Amendments 1 and 2, which, one way or another, would ensure that universal credit could be paid more frequently to claimants. Amendment 1 provides choice. Amendment 2 provides something rather specific.
The Government’s aim has been to encourage,
“out-of-work households to budget on a monthly rather than a fortnightly basis in the belief that it will better prepare people for the reality of working life”.—[Official Report, 10/10/11; col. GC 440.]
Those are the words of the Government. The point is that very many low-income earners are paid weekly or fortnightly, as the noble Baroness, Lady Lister, has rightly pointed out. Although two-thirds of tax credit recipients are paid monthly, many of these people will cease to be entitled to benefits in the future. The great majority of universal credit recipients will be very low paid, going in and out of work, as many people do, to weekly or fortnightly payments and then back on to benefit. People certainly do need to be prepared for the world of work—I completely agree with the Minister about that—but they need to be prepared for the world of work that they are actually going to move into. That is the whole point. At a very helpful meeting last week, the Minister seemed to accept that there are differences and that there needs to be some flexibility. Promotion of choice in the frequency of payment is very much in line with the Government’s choice agenda. I am sure that the Minister identifies with that.
In practical terms, it was made clear in Committee that monthly payments will cause very considerable management problems within households, and a dramatic increase in the numbers of people struggling with debts. The fact that applications for crisis loans rose significantly from 2009, when the change from weekly to fortnightly payments was introduced, tells the story. The CAB service saw a fourfold increase in the number of people with payday loans coming to them for debt advice in the first quarter of this year compared with the same period two years ago. The Association of Business Recovery Professionals is the UK’s leading trade association for insolvency and related issues. On Wednesday 7 November, it released a report into payday loans showing that 3.5 million adults are considering taking out a payday loan over the next six months and that 48 per cent of the people who receive payday loans believe that the loans have made their debt crisis worse.
What is the Government’s estimate of the number of payday loans to claimants of universal credit that will be in place within 12 months of the introduction of the new system? This is clearly a matter of very grave interest to Members of this House—we know that such loans have interest payments in excess of 300, 400 or 500 per cent, if not more than 1,000 per cent. We cannot just ignore that problem.
At the meeting with the Secretary of State on Thursday, he talked about the need for a culture change. Indeed, he even implied that this was the only problem—people just need to change the culture within which they live. However, people’s problems in managing money over a month are far more extensive than purely a matter of culture. Numeracy skills are vital if people are going to manage their bills and payments over a month. I understand that the Skills for Life survey found that 1.7 million people had very poor numeracy skills. A further 5 million had poor numeracy skills. All these people’s skills were described as “below functional”.
Lord Boswell of Aynho
My Lords, all those who participated in the deliberations of the Grand Committee will regard it as a rather extraordinary process in two respects. First, for those of us who do not claim huge expertise—though it was represented elsewhere in the Committee—it was a remarkably informative process, and that applied across all quarters. Secondly, there was a high degree of understanding, if not consensus, and it is entirely proper of course that the process of refining the difficulties comes forward to this Report stage and we then get to the moments when the rubber hits the road.
I intervene briefly for two reasons. The first is in a sense to express my gratitude to the noble Baronesses, Lady Lister of Burtersett and Lady Meacher, for their contributions in Committee. As the forenamed has actually been kind enough to quote me in terms in support of her argument I probably owe her a response. The second reason is that it is understood by all sides of this House that there is a real problem. I have an odd facility about which I do not boast, which is the ability to craft titles for books that I never get round to reading—writing, I mean. One of them would have been “Life After Tuesday”. There is clearly a difficulty for people, where they have limited means, in budgeting and in managing themselves. I will quote two points about that. First, as in previous occupations I have run farms and paid farm workers, I am fairly familiar with people who are typically paid at the lower end of the pay spectrum. Secondly, I have recently chaired on behalf of the National Institute of Adult Continuing Education an inquiry into adult literacy. I do not of course confuse that with numeracy, but the problems of the two are somewhat conjoined. An estimate of something like 5 million people who would have difficulty in functioning is a real worry. The question is what we do about that.
On reflection, having listened to the Minister’s remarks both in Committee and indeed at the meeting of some of us on Thursday, I think that the Government’s strategy is the right one. It is right, and it also avoids any suggestion of patronisation, to say people should try to budget on the same basis as those who now receive a wage. I make the point in passing that many of the people—the farm workers and other people in relatively low-paid occupations—have transitioned fairly effectively towards monthly payments or salaries and arrangements of that kind. It is not conceptually impossible and we certainly should not set out to preclude it in advance.
The question is how it works. That was behind my remarks in Committee and will be behind my interest in my noble friend the Minister’s remarks when he comes to respond. It is clearly important that we are able to engage in a sensible package which enables people to find a way through this. If we were simply to say it is a month unless you deem it to be otherwise, or unless some special arrangements are invoked by way of a legal right, then that would be giving something of a green light towards people falling back into shorter periods—perhaps when that is not necessary or appropriate for their circumstances. But at the same time, picking up my non-written book, it clearly is important that people should be able to manage through this, not only for themselves and other adults in their household but also for children who need sustaining and maybe should not be expected to pay the price for parental or other failure.
We look to the Minister to explain very carefully the ideas which he has begun to develop, and which are very positive, for saying we start with a month, but of course like everybody else you need in effect to be able to navigate through that month, and this is how we will help you. That is, as it were, an approach of principle. Secondly, there is an issue of practicality here, which again I slightly touched on in Committee. If this system does not work comfortably and there is a huge increase in the use of pay-day loans, crisis payments or whatever, then there will be problems with the credibility of the universal credit system, which, to judge by the Committee, we all want to see, as I certainly do.
The Minister has to find a practical way of doing this but I suggest, with respect to the noble Baroness whose amendments we are considering, that the way of finding a practical solution should not lie through derogating from the principle of moving towards the monthly payment of credit with the necessary safeguards.
Lord Wigley
My Lords, we delved into this issue in quite considerable depth in Committee, and I do not want to rake over areas that we have covered. However, I suspect that there is a fundamental question here, which I think the Minister accepts—namely, that there will always be some people who find it difficult, if not impossible, to handle a lump-sum budget that is meant to cover a month. In those circumstances, some mechanism—whether it is a voluntary one making a facility available, as suggested by the noble Baroness, Lady Meacher, a moment ago, or some other mechanism—has to be brought forward by the Government to ensure that these people are helped to avoid getting into financial difficulties. That must be in the interests of the Government and everybody who is concerned about children, in particular, who may be vulnerable as a consequence of such action. I think that the House would be very glad to hear from the Minister how he sees the operation of a mechanism that will ensure in a minority of cases where the monthly pattern does not fit that a system is in place to answer the needs of these vulnerable families.
Lord Hamilton of Epsom
My Lords, I am a relative newcomer to this debate but I should like to pick up one point made by the noble Baroness, Lady Lister, who said that cost had never been an issue here. I cannot quite understand why money would not be saved if payments were made monthly rather than weekly. It seems to me that a saving would be made there, and surely we are trying to achieve savings because of the economic situation that this Government have inherited.
I should like to pick up one other point from the right reverend Prelate the Bishop of Leicester. He seemed to think that it was a bad idea that the Government were trying to introduce a culture change. I should have thought that that was rather a good idea. Surely we are trying to get people into a mindset whereby they move into the world of work and come off benefits. Anything that can be done to encourage that seems to be a good idea. However, I should like some guidance from the Minister on whether there is any saving to be made here and whether he has any idea how much it would come to.
Baroness Howe of Idlicote
My Lords, I, too, have sat right the way through Committee and have been very persuaded that some families—I accept that they are mainly families with children—who are not good managers of money will have difficulties in meeting the Minister’s no doubt otherwise ideal method of providing these benefits. However, I argue that there will be people other than those with families who may not be good with their sums or who, because of mental health problems or other reasons, might much prefer to have weekly or fortnightly payments, rather than monthly payments, which would mean a larger gap to fill with few finances.
Having said that, I accept that the Government clearly have plans in mind for sorting out this problem. However, echoing what others have said, it will be very important to get the support of those of us who have sat through all these debates by explaining in considerable detail exactly how the system will work and what flexibility it will contain. I hope that the Minister will be able to respond to those points.
Lord Kirkwood of Kirkhope
My Lords, I, too, was a Member of the Grand Committee considering this issue, and I apologise to the noble Baroness for being late for her opening remarks, whichever amendment she moved.
I shall pick up a point, if I may, made by my noble friend Lord Hamilton. The Government said that it was not a cost issue; there is no doubt about that. Indeed, the Minister was good enough to confess that. I have been thinking about this since we had our full discussion upstairs and I remain totally unconvinced that it is necessary to effect such a culture change. The notion that the kind of people we are seeking to serve with universal credit will fall into executive jobs that will pay them monthly into bank accounts is so remote from reality as to be unhelpful, but I put that to one side.
I say honestly to anybody who is listening that this is not a trivial matter. It seemed like an operational issue but it is not that at all. It is about the management of weekly budgets day by day in families that can blow apart because of debt. Anybody who thinks that we are short of debt, especially in the household income strata of below £10,000 a year, is completely wrong and should look at the evidence referred to by the noble Baroness, Lady Meacher, about the payday loans and the extent to which people rely on week-to-week, month-to-month emergency packages, paying Peter and paying Paul on different days and trying to survive in the middle. It is a great skill, which some people are forced to exercise. It causes enormous pressure, which is normally borne by the women in the household. We have to be careful how we typify some of the caricatures within families, but in my experience it is the womenfolk who have to make the difference between Tuesday and Friday, which is not always easy. Often they go short of food in trying. That is the reality.
How do I know that? In 2009 the payment system went from weekly to fortnightly, which caused enormous difficulty. It is not that long ago, so we do not really know what the impact of that change has been. If in 2011 we are considering going from weekly to monthly, we are talking about an entirely different regime of family budgets and people keeping their households together. It is symptomatic of how we treat the 15 per cent of the caseload that will be affected and will struggle with this. I encourage the Minister, who is absolutely correct to be ambitious for this new reform. He has lots of ideas and is a master of the technology to the extent that Ministers have not been before in terms of what he is trying to do. I absolutely support the jam jar accounts, sophisticated bank accounts and applications that go on my iPad so that if I ever need income support I will be fine. But I do not believe that the 15 per cent of the family households at the bottom end of the income distribution will be anywhere near using these things comfortably.
For me, this is a litmus test issue; it is not a trivial, operational matter. It is not safe to have anything in the legislation other than payment being fortnightly. Anything else is a bonus. By paying universal credit fortnightly there is a chance of being safe and dealing with the 15 per cent of the household distribution that we are talking about. If we do not get the system to work for the lower end of the household income distribution, we will fail the people who need it most, so it is not a sensible policy to be considering. Lots of imaginative things have been talked about and I am in favour of them all, but they are a fudge. We are making it potentially much more difficult for people who cannot manage day-to-day budgets from week to week.
The other thing that I have great fears about is that, no matter how many jam jars there are in your bank account, it is all arrestable. My Scots law might be slightly out of date but a long time ago—to my shame—I used to work for the South of Scotland Electricity Board, arresting people’s wages. In those days, you had to go to the sheriff to get the account properly closed down and the supply cut off. Those days are thankfully now gone, but you can still pend and arrest bank accounts. If I am owed money and I know somebody is getting a monthly payment of all their benefit under one wrapper called universal credit, I will be waiting at the counter of the bank and I will slap an injunction on them and they will have no money at all.
There must be some safety mechanism to protect these essential monthly payments. You might get away with surviving fortnight to fortnight if one fortnightly payment is made, but just think of the pressure and difficulty for families who have annual incomes that rely on universal credit if somebody arrests their Co-operative account or whatever it is that the Minister is thinking of. These are not straightforward issues and this is not a small matter. Unless the Minister can persuade me that this will adequately serve the 15 per cent of the caseload at the bottom end of the income distribution, this House would be sensible to require fortnightly payment to be put in the primary legislation.
Lord Ramsbotham
I too apologise for not being here at the start. I just ask the Minister to reflect on the words of my company sergeant-major when the Army moved from weekly pay packets to bank accounts. He said, “Thems that pays by the week lives by the week, but if you pay them by the month they will still live by the week”.
Baroness Sherlock
My Lords, I have a couple of brief points to add. One is addressed to the noble Lord, Lord Hamilton. Perhaps he would like to reflect on the fact that what the Minister is doing in this Bill is taking two completely separate systems of support, one for those in work and one for those out of work, and creating a single seamless new product. However, for that to work, it must meet the needs of both sets of people. I think that was the point that the noble Lord, Lord Kirkwood, was making just now—that the Minister may want to effect a culture change for those who are in work, or whom he would like to be in work, but universal credit is also available to support many people who are not required to work, who may never be required to work and who may never be capable of working. Why should they be forced to go through a culture change to no end? Is there really a strong case and can the Minister explain it to us?
Secondly, I want to pick up on the very good point made by the right reverend Prelate the Bishop of Leicester that it takes a lot of time, energy and skill to manage on a very small amount of money. It also takes a lot of intelligence and aptitude to be able to budget well on that. Perhaps the Minister could reflect on what may seem to be simply a matter of timing. If one has plenty of money it is much easier; it is also easier if one has a pot of working capital, so if something goes wrong one month the consequences are simply that you dip into your savings. I spent some years working with single parents and most of them had almost no cushion at all, so if they got it wrong they had nothing to fall back on. For many poor people, their friends are also poor, their families are poor; they do not have the kind of networks where you simply go and borrow from somebody else or you to go the bank and ask it to lend the money, because it will not. The consequences for those families of getting that budgeting wrong can be very severe. Given what is happening in other areas to the Social Fund and the other kinds of support, we really do not want to be driving people into the arms of moneylenders.
Finally, within that group there are some people who, because of their particular circumstances, have very strong reasons why they need to be paid regularly. It is a point I made in Committee but I think it bears repeating here. I have worked with families where, for example, the husband had a problem with drugs or alcohol and went off on a bender and spent the week’s wages; the mother would have to find a way of feeding the children until the next benefit cheque arrived. If that happens in one week, it is difficult; if it is happening in two weeks, it is difficult; but as the noble Lord, Lord Boswell, will appreciate, if it is not a matter of “life after next Tuesday” but “life for the three weeks that follow next Tuesday until the end of the month”, how does she manage?
The question the Minister has to answer is not whether he would like to do this; I have no doubt that he would. Rather, it is: is the price that will be paid by some of the poorest people really worth the culture change he wants to achieve?
Lord German
My Lords, I am always staggered to find out more about my noble friend Lord Kirkwood. In Committee we learnt what he did in the bath, and now we have learnt that he goes around arresting bank accounts. We have been having some very interesting debates. However, I am slightly less sanguine about this issue than he is, perhaps largely because many of your Lordships have said that we have to look at people for what they can do and what their ambitions are. People, and groups of people, are not all the same. It strikes me that this is not about going in one direction or another, and that we are treating people as having exactly the same ability to manage their own money.
I also heard in Committee the Minister’s ambitions for looking at other methods of dealing with payments. I looked back over the last four to five years of the growth in the Post Office card account and in basic bank accounts, which of course is where you would expect to find the sorts of people who make and deal with money in this manner. And there has been growth; in fact, 12 per cent of the whole population—according to the appropriate survey done by the DWP, which is published on their website—is using one of those two bank accounts.
It also struck me that the price that we are paying for the Post Office card account is frighteningly expensive for what we get as a country. It is a bank of this country, and a bank, JP Morgan, underwrites it, and it charges the state for managing these Post Office card accounts. I believe that we pay something like £50 each a year—£142 million per annum—have those accounts run for us. It strikes me that we perhaps need a presumption to ensure that we put things of this nature in place by giving people the appropriate support, but at the same time ensuring assistance for those who cannot. The language that I have heard many Lordships use, which seems to come from the documents, is the “chaotic family syndrome”, where people just cannot manage and need to have some different form of assistance. That is why I started by saying that we should not treat everyone in the same way.
The Post Office card account is a bank account. It does not come with what we might normally expect a bank account to have, but why not, when we are paying so much money for it? Why are people not able to make payments from it for their utilities and gain benefits and savings? I guess that most noble Lords do this because of the way in which they pay for their heating, electricity and gas at the present time. Surely we should be offering that opportunity and using that ability to help people in that manner. We also should not think that people should not be able to separate out their money in the way in which they pay it to themselves. However, in order to do that you have to have appropriate levels of support.
My question to the Minister is: if you are pursuing the idea of developing the facilities which a large number of people currently use for payment, will you also be able to offer advice and support to assist those people who might wish to avail themselves of an enhanced system that allows them to pay their utility bills monthly by a straight payment or direct debit, thus allowing them to get the benefits of reduced charges?
I noticed that the Cabinet Office issued a press release for those who live in England, which says that £16.8 million of support will be given for free debt advice in this country. Does the Minister regard that as being some of the funding that he intends to use for the support that might go with these enhanced accounts?
I know that over the years there has been considerable discussion about the use of the Post Office card account, primarily, of course, in the context of trying to support the local post office in each of our communities. Surely, however, if we were able to do more with it and to provide that advice, perhaps even at the Post Office, it might even be better to do that with the funding that might be available.
There is the problem that many people, or some people, will not be able to manage and will need alternative forms of assistance and advice. My noble friend Lord Boswell was saying that we ought to move in one direction, but it strikes me that we must be wary and understand that there are people who will not be able to manage. We must be able to assist those people properly.
Lord Brooke of Sutton Mandeville
My Lords, I reassure the government Chief Whip that I intend to speak no more on Report than I did in Grand Committee; nor will I speak on the substance of this matter except early on Report to thank the Minister for providing upstairs on Thursday afternoon the opportunity to discuss this issue, among others, on an all-party basis. I think it would be in the spirit of the comradeship that we developed in Grand Committee to suggest that, following the graciousness with which the government Chief Whip rescued us from the procedural imbroglio at the start of this group, he or the Minister should, before we leave this group, confirm my understanding that on a group of amendments, in the absence of the first name on the Order Paper, anyone in your Lordships’ House can move the first amendment on their behalf without necessarily speaking to it, but that no one can speak on the subsequent amendments in the group unless this initial formality has been discharged.
Lord Newton of Braintree
My Lords, I do not know whether the Minister wants to give guidance on that point or to take it up later. I want to intervene briefly, and slightly apologetically, because, like the noble Lord, Lord Kirkwood, I was a bit late on the scene, but I am conscious that I played some part on this subject in Committee, so I think that it would be wrong to keep my head completely down in this debate.
I differ from my noble friend Lord Kirkwood in one respect; I think that the objective of what the Secretary of State describes as culture change in this field is not unworthy. Apart from that, I agree with pretty well everything that the noble Lord said. However, we need to remember something I learnt in various roles, including in my early years as a junior Social Security Minister when I became, it was be fair to say, friends, more or less, with the noble Baroness, Lady Lister. As I said in another context recently, culture change is not an event; it is a process. It takes time and not everyone will get through it. In an organisation, if you want a culture change and people cannot accommodate it, sooner or later they and the organisation have to part company, and they do something else.
This is the social security system, and people cannot part company with it. There is nowhere else for them to go, and we cannot abandon them. There is therefore real force in some of the concerns that are being expressed. Some people, such as those I tried to help in my former constituency, simply will not be able to manage. What are we going to do about them? As I say, we cannot abandon them. I might say that this will feed into something that is coming up later: whether rent should be paid directly to landlords. In some cases, where they cannot manage they will put the food for the baby first and the rent will not be paid. Then there will be another little problem, and someone will have to sort them out. Let us not pretend that this is easy, even if the objective is worth while.
I am not sure—and here I look with some trepidation at the noble Baroness, Lady Lister—that inserting into the Bill an insistence on ossifying fortnightly payments is right. The Bill already provides for some flexibility. Some benefits—including disability living allowance, I think I am right in saying—are paid monthly. This is not a simple picture. We do, however, need that flexibility where it is clear that failing to pay at more frequent intervals will multiply problems, difficulties and further costs in other parts of the system. The Bill allows for that, and I welcome that, but we need clear indication from the Minister this afternoon that this flexibility will be used.
Lord McKenzie of Luton
My Lords, first, I thank the government French Bench for facilitating the debate on these three amendments, after the hiccup we had at the start, and I thank the noble Lord, Lord Brooke, for his helpful advice. I say to the noble Lord, Lord German, in respect of his comments on Amendment 3, that I take the point. If he wants, perhaps, a more iterative process, I am happy to accept an amendment to our amendment. I am bound to say that we rather learnt about calling for reviews from the Liberal Democrats and Conservatives when we were in government—it has the merit of generally not having much of a price tag attached to it.
We start our deliberations on Report by considering the important aspect of how universal credit would work—that is, how payment would be affected, especially the frequency of the payment. However, let me first put in context our approach to the general issue. As we have clearly stated on the record, we support the concept and broad approach of universal credit, a benefit system that provides in-and-out-of-work support, as a clear system of the income disregards and common tapers has significant potential, not least the prospect of clearer incentives for work.
As has been apparent from our Committee sessions, and the matters that we will discuss on Report, the manner in which it is proposed to be introduced is, we believe, flawed. Some of the shortcomings are resource issues—work incentives for second earners—but some are potential failings in the base architecture: the exclusion of council tax benefit; the treatment of self-employed people; and, also, the payment arrangements. I agree with the noble Lord, Lord Kirkwood, that this is not a peripheral operation or issue—this is central to how the system should work.
We will come on to discuss issues about which member of the couple should receive payment and how landlords are to be treated—as the noble Lord, Lord Newton, has indicated. The amendments we are considering now address the vital matter of frequency of payment. Amendment 3, tabled in my name and that of my noble friend Lady Hayter, calls for,
“a review into the impact of payment arrangements on claimants, to conclude one year after the coming into force of this Act”.
I will acknowledge that it might be more appropriately triggered by the universal credit provisions coming into force. We see this review focusing on the impact on claimants by looking at it from the claimant’s perspective. In Grand Committee on 10 October this year, at col. GC 440, the Minister referred to the research being undertaken, particularly around the frequency of payment. An obligation to undertake an early review of how things are working in practice and a report to Parliament would be entirely consistent with the Government’s evidence-based approach to this issue.
We know that at present JSA is paid fortnightly in arrears, that ESA is normally paid fortnightly in arrears, income support is normally paid fortnightly in arrears, and that tax credits are paid on request either weekly or every four weeks, although I think one would acknowledge that HMRC has an overriding discretion in that respect. Housing benefit is normally payable in arrears at intervals of a week, two weeks, four weeks or one month, but as I understand it, if the rent allowance is greater than £2 a week, the claimant can require it to be paid fortnightly. So in having for universal credit the norm as monthly payments, the Government are clearly not seeking to get the best fit with the current components that are to be displaced. Indeed, I think that the Minister and this debate have acknowledged that. He said on the same occasion in Grand Committee:
“With this system, we are one of the drivers of the way people behave and of social change”.—[Official Report, 10/10/11; col. GC 441.]
I support the comments that have been made by a number of contributors, including by my noble friend Lady Sherlock, about culture change, but culture change to what effect in this respect? We understand and accept the thrust of a system that encourages people into work and helps them to understand the benefits of work by seeing its financial rewards, but what is so important about trying to encourage people to get used to a monthly payment and budgetary arrangement rather than one on a different basis, even if they were in a position to do that? The noble Lord, Lord Freud, also referred in Grand Committee to his search for flexibility. If this is an acknowledgment that monthly does not have to be the rigid approach to payment, we may be closer on this issue than perhaps we thought.
We heard from the noble Baroness, Lady Meacher, my noble friend Lady Lister and other noble Lords about compelling reasons why payments on a monthly basis will create particular difficulties for some families, and not just a small minority of supposedly inadequate budgeters. As for mimicking work, which we have heard as well, while 75 per cent of those in employment are paid monthly, 25 per cent are not and half of those earning £10,000 a year or less are paid less frequently than monthly. We heard in Committee and again today about the growth in the business of payday loans. Recent surveys show that nearly half of the population struggles to make earnings stretch until payday, with 7 per cent considering taking out a high interest short-term loan within the next six months. The issue of how to stop the exploitation of poor people is a debate that I hope we will have on another day.
Amendment 1, eventually moved by the noble Baroness, Lady Meacher, would require regulations to be drawn up giving claimants the opportunity to require payment of their universal credit entitlement more frequently than would otherwise flow from Clause 7. We support this amendment and so, we hope, will the Minister, because it seems to fit foursquare with his acceptance of the need for flexibility. Obviously the regulations would have to set out practical parameters to the choice available to claimants, but this should include a fortnightly option. The Minister will know also that it would not preclude arrangements where a claimant could draw down against a monthly entitlement. It would be consistent with that. Neither would it preclude the Minister from retaining the distinction between the assessment period and frequency of payment, a point made by my noble friend Lady Lister.
It is understood that the Minister may argue that the issue of frequency of payment can be addressed by the development of new banking products and that he would not wish the Bill to preclude that. That is fair enough, but we consider that the thrust of the amendment moved by the noble Baroness, Lady Meacher, would not shut out those types of options provided that there are arrangements with parameters dealt with in regulation for claimants to choose. But we do not know today that these banking products can be delivered in time for the introduction of universal credit, whether they can be comprehensively available and without high cost. Without that certainty, it is right that something is included in the Bill along the lines of Amendment 1.
Perhaps the Minister will take the opportunity to update us on the Government’s thinking in this area, as other noble Lords have requested. In particular, do they support the proposition that there should be flexibility within sensible and practicable parameters of receipt patterns? Should there be a right for claimants to choose within these parameters? Can he confirm that the arrangements being considered are not just about drawing down on a monthly payment already made in arrears?
Amendment 2 is more clear-cut and, I think, more to the liking of the noble Lord, Lord Kirkwood. It sets down a requirement for amounts to be paid fortnightly. It has the merit of being clear and closest to the current patterns of receipt, making it slightly more manageable to exist from payday to payday. We support the amendment as an alternative proposition should Amendment 1 be rejected or fail today.
Lord Freud
My Lords, these amendments intend to provide for universal credit to be paid twice a month or, in Amendment 1, for a claimant to be able to choose to be paid more frequently than monthly. As with existing benefits, we will specify payment frequency in regulations made under existing powers in the Social Security Administration Act 1992. I am, though, grateful for the opportunity to set out why we intend for universal credit to be paid monthly.
We want universal credit to prepare people for work and to encourage them to move away from costly weekly and fortnightly budgeting. The present system does not allow people to take responsibility for their finances as the majority of people in work do, day in, day out. That is wrong. It means that the transition to work is more difficult than it needs to be as people have to adjust to monthly budgeting and managing their own rent payments, often with no support. We want to make the first steps into work easier by helping claimants to switch to monthly budgeting while claiming universal credit. Essentially, we are looking for a more empowering system.
The figures have already been raised in the debate. Some 75 per cent of all those in employment and 51 per cent of those earning less than £10,000 a year are currently paid monthly. It is then right that we help families to deal with the reality of working life, whether they are in or out of work, by paying benefits in a way that mimics payment of a salary.
The noble Lord, Lord McKenzie, asked the straight question: what is so important about monthly payments? He went on to talk about the exploitation of poor people. That is what this is about. Save the Children has estimated that low-income families can face an annual poverty premium of £253 on their gas and electricity alone. Organisations including Consumer Focus, Church Action on Poverty and Family Action recognise the importance that access to the right banking products and sound advice can make in helping families to make the best use of their income. The simple point is that if you are managing on small gobbets of money weekly, it is very tough to match your budgeting process to utility bills or some of the larger or medium-scale capital items. That is why larger amounts paid monthly help people with this poverty premium.
However, I recognise that many people on low incomes are used to budgeting on a weekly or fortnightly basis and are concerned about moving to monthly payments. We absolutely need to support some families to budget effectively. That is why I am keen to develop effective budgeting support for families in this position. In some cases that is just a question of signposting to existing information and advice, in other cases it may require much more intensive, face-to-face support; but we need to take an innovative approach to these budgeting products if we are to stop the exploitation of the poor continuing, as the noble Lord, Lord McKenzie, said.
The universal credit and how we flow money to poorer people in our community is the main opportunity that we have to make a real difference for people in this area. We are working with the banking sector, credit unions, supermarket financial services and the Post Office to explore the opportunity to create cost-effective budgeting accounts. I am looking at accounts that my noble friend Lord Kirkwood will not be able to arrest at his whim, because there are some protections in the way in which we devise those accounts. In the next 18 months there will be an absolute focus of intense work to get this right. One example is the housing demonstration project next year, which will help us to understand the demand for budgeting support and the best ways to deliver it. I am not saying that it will all be easy; it is not. However, it is essential that we develop 21st century solutions to these issues and not think back decades and get in the mindset where we did not have these new ways of approaching things.
A simple system of payment on account will be made available to support claimants. Budgeting advances will provide an efficient means for eligible claimants to have access to interest-free credit, providing an alternative for those on the lowest incomes to high-cost, and even illegal, lenders. I must say that I was admiring a Wonga.com advertisement on the side of a bus this morning. In our system of budgeting advances, in the last year already over a million claimants received budgeting loans worth almost half a billion pounds. In the department we have a revolving fund of £1.1 billon, which will continue to be under our control for these purposes.
Clearly there is an issue, which we are addressing, about helping people move from fortnightly to monthly payments. We need to help with that migration period by stretching payment periods and providing the missing funding, if you like, as they move up, and I am looking at a system of doing that over three months. Many noble Lords have made the point that there are people with exceptional circumstances for whom a monthly payment is simply not appropriate. My noble friend Lord Kirkwood talked about the 15 per cent; my noble friend Lord Newton talked about those who will not cope. Clearly there is a group in this category. Where there is a risk of harm to the claimant or the household, we will of course want to make sure that safeguards for these people are in place. Nevertheless, we cannot set up a system to get the bulk of people in control of their finances and then take that control away from them when they can manage it. We need to look at it that way round, not devise a system which protects the 15 per cent of people that my noble friend estimated would be affected. We must not have the tail wagging the dog. We must include support but we must not have a system which stops people going into the workplace when they can. We have begun working with local authorities, housing associations and the relevant third sector organisations to develop guidance around who might qualify for more frequent payments or the direct payment of a proportion of an award to a third party, such as a landlord. Again, the housing demonstration projects will allow us to test the criteria for exceptions.
I appreciate noble Lords’ concerns about protecting claimants who have not previously been required to budget monthly. However, I truly believe that this is a fundamental part of what we are trying to achieve with universal credit. It is an opportunity to change the dynamic to design a system that is right for the majority but takes account of exceptional circumstances by ensuring that we have the means to make payments more frequently.
I wish to pick up a couple of questions. We can make universal credit payable more frequently. I say in answer to the point made by my noble friend Lord Hamilton that there is a small cost to doing it fortnightly rather than monthly but it is very small; it is about a penny. As regards the fallback position, the regulation-making powers which are used to determine the frequency of payment are not in this Bill but in the Social Security Administration Act 1992. The legislation on ESA and JSA, for instance, says that they are payable weekly. However, as we know, they are paid fortnightly. We have complete flexibility to pay as often as we think is appropriate.
Baroness Meacher
The noble Lord said that payments can be made more frequently. Will he assure the House that payments will be made more frequently, and that that facility will be available?
Lord Freud
I assure the House that where people cannot handle monthly budgeting, we will have arrangements to help them. However, I ask noble Lords not to tie my hands on this. This can make a major difference to poor people by creating banking and budgeting products that will help their lives. Tying our hands on this, particularly mine, will not help. Therefore, I ask noble Lords not to vote against this.
Lord McKenzie of Luton
We understand the enthusiasm that the noble Lord brings to this project and I think that we accept the thrust of it. However, will he make clear the following issue? If there is to be a degree of flexibility and if he wants people to be in control of their own finances, why is that inconsistent with them having a choice of how they get paid? Is he saying that the flexibility that he is prepared to countenance does not include the right for individuals to choose, within parameters, certainly perhaps to get paid on a fortnightly basis?
Lord Freud
My Lords, this is a technical issue about the level at which people choose and the extent to which we treat universal credit as a bank account—some would argue that that is what it is as regards budgeting advances, for instance—or drop it down into banking apps that will available for people on universal credit. I do not want those flexibilities to apply at the higher level in the formal process. I want those flexibilities, whether they are direct debits or anything else, to apply at a lower level in banking and budgeting products which will float away with people when they are outside universal credit. That is the issue. That is why I do not want my hands to be tied. I do not want to be forced to give the flexibility at the core level, not the lower level. Therefore, I beg the noble Baroness to withdraw the amendment.
Baroness Meacher
My Lords, I thank all noble Lords on all sides of the House who have contributed to this debate—the Conservatives, the Liberal Democrats, the Labour Party and Cross-Benchers. It has been a very powerful debate and strong concerns have been expressed about the impact of this amendment. The importance of the amendment lies in the mass of cuts to disability benefits, housing benefits—virtually every benefit that one can think of. Therefore, what the House is looking for is some sort of security for these very low income people to ensure that they can try to stay out of the way of these sharks who charge them hundreds and hundreds of per cents of interest over a year. I thank very much everybody who has spoken, in particular the noble Baroness, Lady Lister, who rescued the situation that I am afraid I caused.
The Minister referred to people managing small nuggets of money and having difficulty doing that because, of course, there are payments that need to be made monthly. I think the Minister is not familiar with the ways of very poor people in terms of having all their little jam jars on the mantelpiece and putting bits of money in as they can through the month to enable them to pay these bills. Obviously, in the middle classes we do not do that sort of thing. The Minister is shaking his head, but I am afraid this is actually the way things work. Therefore, it is all about the drastic cuts in benefits.
The Minister has referred to 21st century solutions. In fact, driving people into the hands of these sharks who charge them hundreds of per cents of interest is not really a 21st century solution. The Minister talks about the ability to make provision in exceptional circumstances. I am afraid we are not talking about exceptional circumstances; we are talking about huge numbers of people who are going to find it extremely difficult to manage. I do not have a sense of absolute assurance that there will be provision for these people to manage. This is not playacting; these are real concerns about what is going to happen to large numbers of people facing these cuts over the years ahead in difficult times. I know that the Minister does not want me to test the opinion of the House, but I feel an obligation to do that. I wish to test the opinion of the House.
European Council
(12 years, 10 months ago)
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The Chancellor of the Duchy of Lancaster (Lord Strathclyde)
My Lords, it may be a convenient time for me to repeat a Statement made 18 minutes ago in the House of Commons on the recent European Council. As it is a Statement of some importance, it has been agreed through the usual channels that if, after 20 minutes, there is still a number of Back-Bench speakers who would like to take part, we will increase the amount of time available to them to up to 40 minutes. I hope that that is met with relief by Members of the House.
The Statement is as follows:
“With permission, Mr Speaker, I would like to make a Statement on last week's European Council. I went to Brussels with one objective: to protect Britain's national interest, and that is what I did. Let me refer back to what I said to this House last Wednesday. I made it clear that if the eurozone countries wanted a treaty involving all 27 Members of the European Union, we would insist on some safeguards for Britain to protect our own national interests.
Some thought that what I was asking for was relatively modest. Nevertheless, satisfactory safeguards were not forthcoming, so I did not agree to the treaty. Let me be clear about exactly what happened, what it means for Britain and what I see happening next. Let me take the House through the events of last week. At the Council, the eurozone economies agreed that there should be much tighter fiscal discipline in the eurozone as part of restoring market confidence. That is something that Britain recognises is necessary in a single currency. We want the eurozone to sort out its problems. That is in Britain's national interest because the crisis in the eurozone is having a chilling effect on Britain's economy too.
So the question at the Council was not whether there should be greater fiscal discipline in the eurozone, but rather how it should be achieved. There were two possible outcomes: either a treaty of all 27 countries with proper safeguards for Britain or a separate treaty in which eurozone countries and others would pool their sovereignty on an intergovernmental basis, with Britain maintaining its position in the single market, and in the European Union of 27 members.
We went seeking a deal at 27, and I responded to the German and French proposal for treaty change in good faith, genuinely looking to reach an agreement at the level of the whole European Union, with the necessary safeguards for Britain. Those safeguards—on the single market and on financial services—were modest, reasonable and relevant. We were not trying to create an unfair advantage for Britain. London is the leading centre for financial services in the world, and this sector employs 100,000 people in Birmingham, and a further 150,000 in Scotland. It supports the rest of the economy in Britain and more widely in Europe.
We were not asking for a UK opt-out, special exemption or generalised emergency brake on financial services legislation. They were safeguards sought for the EU as a whole. We were simply asking for a level playing field for open competition for financial services companies in all EU countries, with arrangements that would enable every EU member state to regulate its financial sector properly.
To those who say we were trying to go soft on the banks, nothing can be further from the truth. We have said that we are going to respond positively to the tough measures set out in the Vickers report. There are issues about whether this can be done under current European regulations, so one of the things we wanted was to make sure we could go further than European rules in regulating the banks. The Financial Services Authority report on RBS today demonstrates how necessary that is. We have problems in this country that this Government inherited and need to sort out.
And those who say that this proposed treaty change was all about safeguarding the eurozone—and so Britain should not have tried to interfere or to insist on safeguards—are also fundamentally wrong. The EU treaty is the treaty of those outside the euro as much as those inside. Creating a new eurozone treaty within the existing EU treaty without proper safeguards would have changed the EU profoundly for us too. It is not just that it would have meant a whole new bureaucracy, with rules and competences for the eurozone countries being incorporated directly into the EU treaty, it would have changed the nature of the EU, strengthening the eurozone without balancing measures to strengthen the single market. An intergovernmental arrangement is not without risks but we did not want to see that imbalance hardwired into the treaty without proper safeguards.
And to those who believe this was not a real risk, France and Germany said in their letter last week that the eurozone should work on single market issues like financial regulation and competitiveness. That is why we required safeguards and I make no apologies for it. Of course I wish those safeguards had been accepted. But frankly I have to tell the House the choice was a treaty without proper safeguards, or no treaty. And the right answer was no treaty. It was not an easy thing to do, but it was the right thing to do. As a result, eurozone countries and others are now making separate arrangements for the fiscal integration they need to solve the problems in the eurozone. They recognise this approach will be less attractive, more complex and more difficult to enforce and they would prefer to incorporate the new treaty into the EU treaties in the future. Our position remains the same.
Let me turn to what this means for Britain. Britain remains a full member of the European Union, and the events of the last week do nothing to change that. Our membership of the EU is vital to our national interest. We are a trading nation and we need the single market for trade, investment and jobs. The EU makes Britain a gateway to the largest single market in the world for investors. It secures more than half of our exports and millions of British jobs. And membership of the EU strengthens our ability to progress our foreign policy objectives too, giving us a strong voice on the global stage in issues such as trade and, as we have seen in Durban this week, climate change and the environment.
So we are in the European Union, and we want to be. This week there will be meetings in the councils on transport, telecommunications and energy, and agriculture and fisheries. Britain will be there as a full member at each one. But I believe in an EU with the flexibility of a network, not the rigidity of a bloc. We are not in the Schengen no-borders agreement and neither should we be, because it is right that we should use our natural geographical advantage as an island to protect us against illegal immigration, guns and drugs. We are not in the single currency, and while I am Prime Minister we will never join. We are not in the euro area bailout funds, even though we had to negotiate our way out of it. And we are not in this year’s euro-plus pact.
When the euro was created, the previous Government agreed there would need to be separate meetings of eurozone Ministers. It is hardly surprising that those countries required by treaty to join the euro chose to join the existing eurozone members in developing future arrangements for the eurozone. Those countries are going to be negotiating a treaty that passes unprecedented powers from their nation states to Brussels. Some will have budgets effectively checked and rewritten by the European Commission. None of this will happen in Britain.
But just as we wanted safeguards for Britain’s interests if we changed the EU treaty, so we will continue to be vigilant in protecting our national interests. An intergovernmental treaty, while it does not carry with it the same dangers for Britain, none the less is not without risks.
The decision of the new eurozone-led arrangement is a discussion that is just beginning. We want the new treaty to work in stabilising the euro and putting it on a firm foundation. I understand why they would want to use EU institutions, but this is new territory and does raise important issues which we will need to explore with the euro-plus countries.
So in the months to come we will be vigorously engaged in the debate about how institutions built for 27 should continue to operate fairly for all member states, and in particular for Britain. The UK is very supportive of the role the institutions play in safeguarding the single market, so we will look constructively at any proposals with an open mind. But let us be clear about one thing. If Britain had agreed treaty change without safeguards, there would be no discussion. Britain would have no protection.
Let me turn to the next steps. The most pressing need is to fix the problems of the euro. As I have said, that involves far more than simply greater medium-term fiscal integration, important though that is. Above all, the eurozone needs to focus at the very least on implementing its October agreement. The markets want to be assured that the eurozone firewall is big enough, that Europe’s banks are being adequately recapitalised and that the problems in countries such as Greece have been properly dealt with.
There was some progress at the Council but far more needs to be done. The eurozone countries noted the possibility of additional IMF assistance. Our position on IMF resources remains the one I set out at the Cannes G20 summit. Alongside non-European G20 countries, we are ready to look positively at strengthening the IMF’s capacity to help countries in difficulty across the world.
But IMF resources are for countries not currencies. They cannot be used specifically to support the euro, and we would not support that. There also needs to be greater competitiveness between the countries of the eurozone. But let us be frank—the whole of Europe needs to become more competitive. That is the way to more jobs and growth. Many eurozone countries have substantial trade deficits as well as budget deficits. If they are not to be reliant on massive transfers of capital, they need to become more competitive and trade out of those deficits.
The British agenda has always been about improving Europe’s competitiveness. At recent councils we have achieved substantial progress on completing the single market in services, opening up our energy markets and exempting microbusinesses from future regulations. This has been done by working in partnership with a combination of countries that are in the eurozone and outside it.
Similarly, on this year’s EU budget it was Britain in partnership with France, Germany and Holland among others that successfully insisted on no real increase in resources—for the first time in many years.
On defence, Britain is an absolutely key European player, whether leading the NATO rapid reaction force or tackling piracy in the Indian Ocean, and our partnership with France was crucial in taking action in Libya. Britain will continue to form alliances on the things we want to get done.
We have always had a leading role in advocating the policy of enlargement, and at this Council we all celebrated the signing of Croatia’s accession treaty. That is one European treaty I was happy to sign.
Let me conclude with this point. I do not believe there is a binary choice for Britain: that we can either sacrifice the national interest on issue after issue or lose our influence at the heart of Europe’s decision-making processes. I am absolutely clear that it is possible both to be a full, committed and influential member of the European Union and to stay out of arrangements where we cannot protect our interests. That is what I have done at this Council. That is what I will continue to do as long as I am Prime Minister. It is the right course for this country, and I commend this Statement to the House”.
Baroness Royall of Blaisdon
My Lords, I thank the Leader of the House for repeating the Statement on the EU Council made today in another place by the Prime Minister. In this House, Leaders of the Opposition tend to open their statements on normal, regular EU Council meetings in roughly that vein. This was a normal, scheduled EU Council meeting, even if it was taking place at a particularly difficult time. But this was no normal, regular outcome to a normal EU Council meeting. What happened in Brussels in the early hours of Friday morning was momentous. The implications of the Prime Minister’s decision may well take years, decades even, to unfold fully. It is clear that Britain is now travelling in a different direction from the rest of Europe.
The reality of where we are is this: the Prime Minister has given up our seat at the table; he has exposed, not protected, British business; he has got a bad deal for Britain. The Prime Minister told us that his first priority at the summit was sorting out the eurozone but the euro crisis is not resolved. There is no promise by the European Central Bank to be the lender of last resort. There is no plan for growth. There is little progress on bank recapitalisation, so can the Leader of the House tell us why the Prime Minister’s promise of a so-called big bazooka did not materialise and what that means for Britain? At the summit that was meant to solve these problems, the Prime Minister walked away from the table.
Let me turn to where that decision leaves this country. Many people feared an outcome of 17 going it alone. Few could have dreamt of the diplomatic disaster of 26 going ahead and one country—Britain—being left behind. The Prime Minister talks of isolation in the national interest but the truth is that this is isolation against the national interest. The Prime Minister rests his whole case on the fact that 26 countries will be unable to use existing treaties or institutions. Can the Leader of the House confirm that Article 273 of the European treaty allows them to use the European Court of Justice, and no doubt they will use the Commission’s service and, yes, even the buildings? In case anyone had any doubt, it is confirmed by what the Deputy Prime Minister said yesterday that it clearly would be ludicrous for the 26, which is pretty well the whole of the European Union, to completely reinvent a whole panoply of institutions.
The Prime Minister claimed in his Statement to have done what he did because this treaty posed a grave threat to our financial services industry. Can the Leader of the House point to a single proposal in the treaty that would have entailed the alleged destruction of the City of London? What was the threat? Can the Leader of the House now tell us? In any case, there is nothing worse for protecting our interests in financial services than the outcome that the Prime Minister ended up with. Can the Leader of the House confirm that there is not one extra protection that the Prime Minister has secured for financial services?
The Prime Minister has laid great stress since Friday on his claim that British interests would be better protected as a result of his decision in Brussels. Can the Leader of the House tell your Lordships the basis for such a claim? Can he say precisely what safeguards the Prime Minister asked for? Can he say what mandate the Prime Minister had, and from whom, for making those demands? Was it the full Cabinet or the Deputy Prime Minister? The Prime Minister wanted a veto on financial services regulation but he did not get one. The Prime Minister wanted guarantees on the location of the European banking authority but he did not get them. Far from protecting our interests, the Prime Minister has left us without a voice and the sensible members of the Prime Minister’s own party, including some Members of your Lordships’ House understand this as well as anyone. We on these Benches agree with the remarks made at the weekend by the noble Lord, Lord Heseltine, when he said:
“You can’t protect the interests of the City by floating off into the middle of the Atlantic”.
What about the rest of British business—the part of British business that the Prime Minister does not seem to have been thinking about? There is a danger for it, too, in that the discussions about the single market on which it relies will take place without us—a point that Sir Martin Sorrell, chief executive of WPP, the advertising company, is only the first from the business world to be making today.
The Deputy Prime Minister clearly does not agree with the Prime Minister. He says that this outcome leaves Britain “isolated and marginalised”. Does the Leader of the House agree with that assessment? Can the Leader of the House explain how the Prime Minister can expect to persuade anyone else that this is a good outcome for Britain when he cannot even persuade the Deputy Prime Minister? The Prime Minister believes that this decision was best for Britain, but the Deputy Prime Minister does not. Which is the Government’s position on this issue—the Prime Minister’s or the Deputy Prime Minister’s? With the Deputy Prime Minister saying that he is “bitterly disappointed” with the outcome obtained by the Prime Minister, can the Leader tell the House how the coalition can work properly with, at its heart, such a fundamental disagreement on such a fundamental issue?
The Prime Minister claimed to have wielded a veto, but a veto is supposed to stop something happening—it is not a veto when the thing you wanted to stop goes ahead without you. How did we end up with this outcome? Can the Leader of the House confirm that what the Prime Minister actually proposed was to unpick the existing rules of the Single European Act signed by the noble Baroness, Lady Thatcher? Given that it was changing 25 years of the single market, why did the Prime Minister propose it in the final hours before the summit, and where were the Prime Minister’s allies? If the Prime Minister wanted a deal, why did he fail to build alliances with the Swedes, the Dutch, the Poles—our traditional supporters? If the Prime Minister really wanted to protect the single market and financial services, can the Leader of the House say why no guarantees were sought that these issues would only be discussed with all 27 members in the room?
Can the Leader tell us why the Prime Minister walked away from a treaty negotiation even before there was a text on the table on which we could have negotiated? The treaty will take months and months to negotiate. The Prime Minister could have reserved his position and continued to talk, as other countries have done. We believe the real answer is that the Prime Minister did not want a deal because he knew that he could not deliver it through his Back-Benchers.
I usually start my day by having a loud, one-sided argument with the “Today” programme, either with the presenters or coalition Ministers espousing policies with which I disagree because of the detrimental effect they will have on the people of our country. However, on Friday morning I was stunned into silence when I heard that the Prime Minister had wielded the veto at the European summit. This was such an extraordinary failure of diplomacy. I simply could not understand why a veto had been used over a treaty that as yet has no text and which we are not even being asked to sign yet, and how our national interests could be best served by absenting ourselves from future discussions and negotiations. The implications of our isolation are huge and we are in danger of being sidelined on a vast number of issues, including the single market.
We now have no influence at all on the final form and content of the new intergovernmental treaty. Why is this important? It is about the future stability of our continent, the future stability of the euro and therefore the future stability of the UK economy. Of course, people are right to be concerned about the European Union and the situation in the eurozone because these have great implications for our country. However, by absenting ourselves from the negotiations, by leaving an empty chair, we are abnegating our responsibilities. We should have a voice in the discussions but we are choosing not to use it. This is clearly not in our national interest.
Nothing has changed in terms of banking, financial services and hedge funds. The decisions will continue to be taken by qualified majority because financial services regulation is part of the internal market rules. However, I suggest that the 26 will be less likely to listen to our concerns in future. In addition, the 26 will naturally develop the habit of working together on a broad range of economic policy, and our voice—the voice of the most economically liberal and free market member state—will not be heard until most of the discussions have taken place.
I have always believed, and continue to believe, that as a nation we are strengthened by membership of the European Union, not just in terms of trade but of our place in the world. Suddenly, with one fell swoop of a veto that was never even used by the noble Baroness, Lady Thatcher, we were sidelined, and our role in the world was diminished. It could mean that in future the Americans think doing business with Europe means doing business with Berlin, Paris and Brussels rather than London. This is a bad deal, which we have ended up with for bad reasons, and it will have long-lasting consequences. It is a decision that means that we are on the sidelines, not just for one summit but for the years ahead.
The Prime Minister told the other place on 24 October:
“At the heart of our national interest … is not only access to that single market but the need to ensure that we are sitting around the table … determining the rules that our exporters have to follow. That is key to our national interest, and we must not lose that”. [Official Report, Commons, 24/10/11; col. 38.]
However, that is exactly what the Prime Minister has done. He has done what no Prime Minister has ever thought to be wise before: to leave the room to others, to abandon our seat at the table. The Prime Minister says that he had no choice, but he did. The Prime Minister could have stayed inside and fought his corner. He should have stayed inside and fought his corner.
This country will rue the day that the Prime Minister left Britain alone without allies and without influence. The outcome obtained by the Prime Minister is bad for business, bad for jobs, and bad for Britain.
Lord Strathclyde
It is always good to hear the noble Baroness, the Leader of the Opposition, on such fine form. I strained to hear, in all her words, whether or not the Labour Party would have signed up to the agreement on Thursday night, and I have no idea if anybody else heard the answer—I certainly did not. I invite the noble Baroness to nod, or shake her head, and she is doing absolutely neither.
Baroness Royall of Blaisdon
My Lords, we are not the Government. The noble Lord is in the Cabinet and represents the Government.
Lord Strathclyde
It is very hard for the noble Baroness to criticise when she is not able to tell us what her party would have done in our position. When the Labour Party was in a position to stand up for British interests, it gave away the opt-out on the social chapter, signed up to the Lisbon treaty and refused to ask the British people for approval, and gave away something like £7 billion of the rebate and got absolutely nothing in return.
The Prime Minister was clear all along that he would protect our national interests. That is exactly what he did. It is in our national interest for the countries with the euro to fix their problems. We said that we could only agree a new treaty if certain modest, reasonable and relevant safeguards were obtained—safeguards for the EU as a whole, not just for the UK—but we could not get those safeguards. That is why the Prime Minister did not sign the treaty.
The noble Baroness asked specifically about the EU institutions. At this stage it is very difficult to know exactly what role is proposed for the EU institutions, and therefore to take a view as to what will happen in the outcome over the course of the next few weeks.
The noble Baroness asked, though she did not put it quite in these words, what we fear from the existing treaty. What concerned us was the huge damage that could potentially have occurred to the single market and financial services. We stopped Britain from signing up to something that was damaging.
The noble Baroness asked what has changed since Thursday. The answer is, very little between Wednesday and Friday. We are still firmly part of the EU, as I, or rather the Prime Minister in his Statement, explained.
The noble Baroness asked what safeguards we were asking for. We were not asking for very much. We were asking for legal clarity, that decisions on running and extending the single market would not be taken away from the EU as a whole and be made instead by the eurozone-led group. On financial services we asked for practical and focused proposals to protect the openness and competitiveness of the single market for all, especially for those outside the euro. We also asked for a proper role for our national regulators, scrutinising institutions from outside the EU which are present in Britain but nowhere else, and for freedom for our regulators to impose additional requirements on our banks, if we in this House, and in another place, so chose.
These are the most humble safeguards that we could possibly have asked for. The noble Baroness should not be asking why, in her words, we were isolated, but why the 26 countries did not agree with us, or agree to give us these safeguards. The noble Baroness says that we are isolated and marginalised. But no, we are one of the biggest economies in Europe and one of the biggest contributors to the EU. We are one of the most successful countries, and we will continue to be so. That, my Lords, is why we did not sign the treaty.
Lord Dholakia
My Lords, I thank the noble Lord for repeating the Statement in your Lordships’ House. I have two questions. First, the decision taken by the Prime Minister requires not just a Statement but an early debate in your Lordships’ House. Will the Leader of the House consult the usual channels so that such a debate can take place well before the Christmas Recess? Secondly, the Chancellor is reported to have said that,
“his officials were putting unprecedented effort into planning for all eventualities”.
Will the Leader make available information to indicate how the interests of the City of London are to be protected?
Lord Strathclyde
My Lords, I wholly understand why my noble friend would ask for a debate; obviously this is an area of great interest. Perhaps I may suggest that the usual channels should meet, perhaps with representations from all parties and groups in this House, to see whether we can find a time. As the House knows, we will rise for Christmas next Wednesday. It might be a little bit difficult to find a suitable date before then, and in any case it might be better to meet again in January to discuss these issues. We had a very successful debate on 1 December but I am not averse to having a further one.
My noble friend also asked a question about the Chancellor of the Exchequer saying that he was planning for all eventualities. The reality of our decision not to join the euro means that, for some time now, the eurozone countries have developed and continue to develop their own arrangements. For the UK and other countries that have not joined the euro, that means being vigilant in protecting our national interests. That will remain the case, but it is nothing new.
We will continue to exert our influence on financial services legislation and on single market legislation more broadly. But I am sure that, for reasons which I am sure the House will understand, the Government do not comment on the detail of their contingency planning in order to ensure that we can best protect the interests of the whole economy, including the City.
Lord Kerr of Kinlochard
My Lords, I congratulate the Leader on the ebullience of his response to the noble Baroness, Lady Royall. Perhaps I may ask that he include a little more content in his answers to the questions that I have for him. First, will he confirm that since 1988, when at the initiative of Prime Minister Thatcher we secured qualified majority voting for financial services regulation legislation, the United Kingdom has never been outvoted on a financial services proposal in the Council of Ministers in Brussels? Secondly, will he confirm that the financial transaction tax is a complete red herring because, as a tax measure, it is on a unanimity legal base and if we do not agree with it, we can block it?
I have three questions on institutions. I listened with great interest to what the Leader said about the Government looking constructively at any institutional proposals. First, if the Government consider that tighter deficit control arrangements among eurozone countries could somehow create a threat to City interests—and I do understand the concern—would this threat not be best contained if the arrangements that the eurozone countries make were required not to undermine the single market, not to create barriers to trade between all member states and not to distort competition between them? He will recognise the language of Article 326.
Secondly, as the Government constructively consider institutional proposals, will the Leader consider Article 136, under which eurozone member states may go for tighter control of their deficits, and only they may vote on measures imposing such controls, but all member states are entitled to be present and able to defend their interests? Thirdly, will he confirm that it is still the Government’s view that the survival of the eurozone, and therefore the “remorseless logic” of fiscal union among eurozone member states, is an important UK interest and that we therefore wish to help the eurozone quickly reach effective, enforceable arrangements for tighter deficit controls?
Lord Kerr of Kinlochard
I am sorry. This may be unwelcome to the Tea Party on the Back-Benches opposite but the country wants to know the answer to these questions.
Would requiring the invention of intergovernmental arrangements, as the French always wanted, not hand them victory, and be a loss to all our natural allies, such as the Dutch, the Danes and the Swedes, as well as a loss to efficiency, and thus an own goal?
I have two questions on tactics.
The Minister of State, Ministry of Justice (Lord McNally)
My Lords, this sounds very much like a speech for the coming debate.
Lord McNally
This is a Question Time. Even though we have 40 minutes, we have already used five and are only on the second question. In fairness to the whole House, I think that the noble Lord should now sit down.
Lord Kerr of Kinlochard
May I ask one question of tactics? I am grateful to the noble Lord. Will he confirm that, exactly 20 years ago, John Major secured the social opt-out and the euro opt-out by attaching his conditions to the conclusion of the negotiation, where unanimity is required, and not to the convening of a negotiation, for which only a simple majority is required?
Lord Strathclyde
My Lords, I know that the noble Lord, Lord Kerr of Kinlochard, is trying to be constructive and helpful in guiding the Government through all this. He asked a number of questions, but I will not be able to answer them all in the time allowed. However, he is right on the financial transaction tax, and I am sure that he is right about us never being outvoted under QMV over the past 20 years. As for the question that he posed at the end about John Major and the opt-outs, I supported the opt-outs. The opt-outs were an excellent thing. However, as soon as the Labour Party got into office it got rid of the opt-outs, and it got absolutely nothing in return. We want something far firmer and longer-term than that.
There are two key questions. First, on the EU institutional proposals and whether we should consider using Article 136, it is, of course, still the earliest possible days in how all this plays out. Even the French President and others have agreed that this process will last until March. There are at least three countries that need parliamentary approval before they can sign up to these treaties, so there is plenty of time to look at these things.
As I said earlier, the exact role being proposed for the institutions is not yet clear to anyone. We will need to look carefully at the detailed proposals as they emerge to ensure that Britain’s interests are safeguarded. The noble Lord also asked about our view overall of the eurozone. Let me say most emphatically that we hope that the new treaty can play a significant role in stabilising the euro and putting it on a strong, sustainable path. That is in the interests of Europe, and it is in British interests as well.
Lord McNally
I think that it is the turn of the Labour Party, and then we will come back to the Conservatives.
Lord Mandelson
My Lords, people will differ in their view about whether the Government’s negotiating position last week was tenable or realistic. Will the Government reflect on the utterly shambolic way in which they prepared their position and sought support for their proposals at the summit last week? Why were the Government’s proposals only shared with the legal service of the Council literally the day before the summit? Why were they not shared with, and why was support not sought from, more than a handful of German officials? The French were not informed or consulted at all about these proposals. In view of such lamentable incompetence, is it really surprising that we ended up in a majority of one?
Lord Strathclyde
My Lords, I cannot agree with the noble Lord, even though he brings immense experience to this House. We believe that we issued every signal possible by the Prime Minister, the Foreign Secretary and many others as to what we regarded as vital British interests. In the run-up to last Thursday’s summit everyone should have been entirely clear what the implications of that were.
Lord Lawson of Blaby
My Lords, I warmly support my right honourable friend the Prime Minister. He took an extremely difficult decision in the circumstances, but it was the right one, and I have no doubt that it will increasingly be seen to have been the right one as time unfolds. Is it not clear that the misbegotten venture of European monetary union has already proved a massive disaster for the whole of Europe and that, furthermore, this particular agreement, if that is the name for it, which was made on Friday has not solved any of the problems? I do not think it can, because I think that it is doomed. Indeed, as the financial markets have made clear today, it certainly has not solved any of the problems. All it will do is create increasing divisions within the members of the eurozone. They will interpret it in different ways and are concerned about many different aspects of it. Differences will also arise between the Governments of a number of eurozone countries and the peoples of those countries. This is not clever. As for—
Lord Lawson of Blaby
Finally, perhaps I may commend my right honourable friend on being determined to protect the interests of financial services both in this country and in Europe. Unconsidered and malicious regulation will lead to financial services companies going not to other European countries but to Hong Kong, New York and Zurich.
Lord Strathclyde
My Lords, I thank my noble friend for his unqualified support for what the Prime Minister has done and I strongly agree with much of what he says. As I said to the noble Lord, Lord Kerr, we wish the euro well, and we wish it to succeed, because unless we resolve the crisis that is facing the eurozone it will have an extremely negative effect on the British economy. I also agree entirely with my noble friend on his last point about financial services. There is a view that even if we could veto the financial transaction tax, it would affect only the UK. It would be too easy for many companies and organisations simply to relocate to the rest of the world, so it would be a loss to Europe as a whole, not just London. That was why the Prime Minister was trying to defend the financial services industry right across Europe, not just in the United Kingdom.
Lord Skidelsky
My Lords, there are three questions which the Prime Minister ducked, and I hope that the Leader of the House will do better. First, in which paragraphs were proposals tabled which required the British to use their veto of the treaty? Will he enumerate the paragraphs to which we took objection? Secondly, what safeguards of our interests were we trying to secure? Thirdly, why could we not have reserved our position, since this was a very early stage in the whole process? As I said, the Prime Minister ducked those questions. I hope that the Leader of the House will be able to do better.
Lord Strathclyde
My Lords, I spelt out in some detail what safeguards we asked for in reply to the noble Baroness the Leader of the Opposition, so I will not repeat them. However, the noble Lord has asked a good question to which people will want to know the answer: why did we exercise the veto at the start of the process? It is my understanding that the French made it absolutely plain that under no circumstances would they accept the safeguards that the Prime Minister was asking for. At that stage, the Prime Minister had absolutely no choice if he was going to continue in good faith. That is why he took the decision that he did.
Lord Pearson of Rannoch
My Lords, my gratitude is exceeded only by my surprise. I trust that the Leader of the House will forgive me if I congratulate the Prime Minister on his courage in standing alone and on taking what I hope will be the first small step towards the lifeboats on the “Titanic” which is the EU. I have two short questions. First, where do the Government now stand on the 49 proposals for new Brussels legislation in the financial area, some of which will be very serious for our financial industries and taxpayers, and which are already in the pipeline under qualified majority voting? Secondly, the noble Lord has said that we do not know what is on the way, so do not yet know the precise answer, but can he confirm that the other EU countries cannot use the institutions of the whole EU to further their ill-fated plans to prop up the euro without our consent?
Lord Strathclyde
My Lords, on all proposals emanating from the Commission on financial services, we will vigorously defend British interests. We will continue to do so. Indeed, we believe that we have protected our interests in being able to do so by not signing up to the treaty. On the second question, I hope that I have dealt with EU institutions. We do not rule out the use of the institutions outside the treaty. After all, we have agreed to that before, along with all the member states, for the EFSF treaty where we thought that made sense. There are other intergovernmental treaties that became part of the umbrella of EU treaties, such as on Schengen, where we have an opt-out. So it is too early to give a specific answer to the noble Lord but he will understand that in our vision of a flexible Europe there should be enough room to have different treaties at different times to deal with different issues.
Lord Brittan of Spennithorne
Would my noble friend agree that, as financial services regulation can be passed without unanimity, the only reason such regulation has not been passed in a way that is unacceptable to this country over the last 30 years is because we have been able to get sufficient goodwill from our partners? In order to retain the goodwill which will continue to be needed in future, would my noble friend agree that it will be necessary—if not today, certainly soon—to make it clear that we are not going to try to stop the 26 going ahead by denying them the use of European Union institutions? That would be regarded as an act of great hostility and would deprive us of that goodwill in future.
Lord Strathclyde
My Lords, we very much want to retain goodwill and there is no reason why we should not do so. I say again that it is not yet entirely clear what role is being proposed for the EU institutions. We will want to look carefully at the details of what is proposed. No doubt we shall do so over the course of the next few months.
Lord Davies of Stamford
My Lords, does it not beggar belief to suppose that anybody could be so stupid or incompetent, if he really believed that there was a threat to national interests from a prospective change in financial service regulation in the EU, as to engineer a situation in which henceforth such regulation will be discussed and in practice decided in a context in which we will not even be in the room? Is it not absolutely clear that it was not national interests at all that drove the Prime Minister but party political interest and the desire to curry back the favour of the Tory Eurosceptics who gave him such a hard time last Wednesday? Does the Leader not think that the country is intelligent enough to see through the propaganda that they have heard this afternoon and to realise that the Prime Minister has played with the national interest for party political reasons?
Lord Strathclyde
My Lords, only the noble Lord could come out with that particular quip. Of course we feared the dangers to our national interests or we would not have said what we did. It takes two to agree but it also takes two to disagree. The other 26 could have wholly accepted that we had a deep concern about our national interest and agreed with us. Then there would have been a treaty of the 27.
Lord McNally
I am trying to keep count here. We will have the Liberal Democrats and then the Cross-Benchers.
Lord Ashdown of Norton-sub-Hamdon
My Lords, given that we have now cast the veto without stopping anything; that in the name of protecting the City of London we have made it more vulnerable; that we have in a time of crisis given greater incentive to investors to put their money in northern Europe than in isolated Britain; and that we have reduced our leverage in Europe and diminished our voice in Washington, is it not now necessary that we take every step to get ourselves out of the position that we find ourselves in, make ourselves relevant to the argument and get back in the game? How do we intend to do that? Does my noble friend realise how much depends for this country—and for this Government—on our success in doing so?
Lord Strathclyde
My Lords, I cannot agree with my noble friend. We believe that we are very firmly in the game. Our voice is not diminished. It is strong. We have defended vital British interests and we will continue to do so in the single market at the level of 27.
Lord Hannay of Chiswick
My Lords, would the Minister confirm that, had the texts before the Council in Brussels been agreed by 27, not one word would have applied to this country because they solely concerned tighter arrangements for the eurozone countries? If that is so, it is a little hard to see why they were contrary to our interests. Would he also now perhaps answer the question that has been put to him quite a lot of times? There was a tried and trusted route used by the noble Baroness, Lady Thatcher. In 1985, when she was voted down on the procedural issue of starting a treaty-changing negotiation, she nevertheless decided that her Government would participate in that negotiation. She stated that if it did not come out in a way that safeguarded British interests, she would have no hesitation in vetoing it at the end. In the end it came out for British interests. Why on earth did we not do that this time?
Lord Strathclyde
My Lords, my right honourable friend the Prime Minister made an entirely appropriate and sensible decision on Friday night not to agree with the treaty that was going forward. He did so because he believed that vital British interests were at stake. Contrary to what the noble Lord said, our view is that the new treaty would have completely reshaped the whole basis of the EU treaties. We would have been dragged into a whole series of changes and evolutions that would not have served our interests well. That is why we vetoed it.
Lord Harrison
My Lords, would the Minister give one clear, crystal example—
Lord Clinton-Davis
The complacency of the Leader of the House is mind-boggling. Has he not managed to discomfort the majority of the Liberal Democrats? He appeals to the worst instincts of the British people. As far as I can see, there is to be no repatriation of powers, no European Union allies and no real protection of the City. The Government have not been courageous but desperately cowardly and, most of all, barren of influence. Is that not the case?
Lord Strathclyde
My Lords, I am bound to say that I disagree with all of that. This was not about party but national interests. It was not about—what did he say?—playing to the worst aspects of the British character. That is quite wrong. This is the problem that noble Lords opposite find themselves in. Time and time again, they feel that agreeing with our European partners on everything will protect our long-term interests. We disagree.
Lord Trimble
My Lords, we are not absolutely sure of this but is it not likely that the issue will come back to the European Council if there is any attempt or desire on behalf of the eurozone people to make use of the institutions of the Union? When the issue comes back, we will be there making our point of view known. Did the Leader of the House hear on Radio 4 this morning the comment by the distinguished American economist that if you are not prepared to walk away you will have no leverage?
Lord Strathclyde
My Lords, I did not hear that interview, but my noble friend is right. In any negotiation, particularly one as important and controversial as this one, you have to take a decision right at the beginning on whether you are going to negotiate in good faith. As I have already said, we put forward a proposal that was relatively humble, it was not agreed with, and that is why we said no.
On the question of EU institutions, I think I have covered that very fully this afternoon. Of course, it will come back as an issue and we will take a decision in due course.
Lord Bilimoria
My Lords, with the veto of the treaty, we are losing sight of the essence of this; it is about sorting out the eurozone mess. I have two questions. First, the Government seem to be encouraging greater fiscal union among the eurozone countries to sort out the eurozone problem. Surely the Government accept that the euro is dead in the water—in fact, it is under water—and that these countries will never be in sync, and fiscal union and handing of sovereignty realistically will never happen. If it were to happen, those countries would unite even more and we would be even more isolated.
Secondly, the Prime Minister insinuated in his Statement that the veto was almost a negotiating tactic, and that, if we did not use it, we would not be taken seriously as being able to protect our own interests. Surely, if that is the case and we intend to go back to the table, we might be seen not as a bulldog but as a dog returning with its tail between its legs.
Lord Strathclyde
My Lords, the noble Lord says that the eurozone is in a mess and that it will not succeed. That is not the view of the British Government. We believe that the countries of the eurozone have got themselves together. It is true that they face a crisis, but the issue that needs to be resolved is how to solve that crisis, and to do so as quickly as possible, since, as every week goes by, it becomes more expensive to be able to do so. We think that sensible steps were taken forward over the last few days, but only the markets will decide whether the euro is to succeed. We believe that it is in British interests that the euro should succeed, that there should be a greater fiscal union and that many of the things that were proposed late on Thursday night are the right things for the EU to do.
Secondly, as to question of whether this was a negotiating tactic by the Prime Minister, it most certainly was not. Of course we understand that at this level these summits end up in negotiations. Indeed, we put forward a very fair proposal that we wholly expected the other European countries to agree to. They did not do so, and that is why the Prime Minister could not agree.
Baroness Morgan of Ely
My Lords, does the Minister agree that, if the Prime Minister had not attempted to pacify his party when he was first elected by leaving the European People’s Party—a group to which both Chancellor Merkel and President Sarkozy belong—and hooked up with some pretty unsavoury parties from Eastern Europe, he would have been invited to the pre-summit meeting in Marseilles where he could have made his case? He locked his party out of the room and now he has locked the country out of the room.
Lord Strathclyde
My Lords, it is a nicely put question, but I cannot agree with the noble Baroness. We left the EPP for very good reasons to do with a different philosophical view of where the EPP was heading. I also cannot believe that, if we had been present at the Marseilles meeting, Thursday night would have ended up any differently.
Baroness Williams of Crosby
My Lords, does the Leader of the House recognise the huge damage done to Britain’s influence and reputation far beyond the European continent, as any reading of recent journals in the United States or, for that matter, in Russia indicates very clearly? Would he agree that, in the negotiating document that was put to the 26 by the Prime Minister, there were a number of issues that were already on the way to being resolved in ECOFIN, and some of them had already been resolved in ECOFIN 2009? Would he also agree that there were some issues that related to unanimous votes like the financial transfer tax, and therefore there was no threat to British interests? Finally, going back to the question asked by my noble friend Lord Ashdown, I ask whether the Prime Minister and the Government will now recognise fully the need to make a gesture towards the crucial importance of saving the eurozone, which is in our interests as much as in theirs, by making clear that the European institutions will not in any way be blocked from being part of the outcome of that difficult decision?
Lord Strathclyde
My Lords, I really do not believe that Britain’s influence or reputation have been affected in any way negatively by what was done at the end of last week. If anything, they have been enhanced. A British Prime Minister laid out very carefully what he was going to do to protect British vital interests. He went and negotiated, and when he could not get what he believed was right, he said, “I am not going to agree”. That is a position of courage, and he was absolutely right to make that decision.
On the question of the institutions of the EU, which I know are of great interest to many Members of this House, at this stage it is too early to take a view of what is proposed or all the detail of what is meant and what EU institutions are going to be asked to do at what stage. We will look very carefully at these proposals as they come out.
Baroness Symons of Vernham Dean
My Lords, there has been a lot of controversy about when exactly the British proposals were put before our colleagues in the European Union. May I follow up on the question raised by my noble friend Lord Mandelson and ask when exactly were these proposals put to the French?
Secondly, the text of the Statement twice refers to an intergovernmental arrangement being “not without risks”. Can the Minister tell us what are the risks that the Government acknowledge are inherent in the intergovernmental position that is now before us?
Lord Strathclyde
My Lords, I cannot give an exact date as to when the proposals were put to the French, but, if I can find out, I will be very happy to write to the noble Baroness. However, the generality of the Prime Minister’s position has been well known for some weeks, and particularly over the course of the days leading up to the summit. Of course, even within an intergovernmental treaty, there are some risks attached. To some extent, we will have to wait to see exactly how that works out. As to the kind of risks, I think that the noble Lord, Lord Kerr, spelt out that there are some countries that might feel the need to go along with what the big countries in the intergovernmental treaty want. Again, we shall have to wait to see. Nobody should be under any illusions that the British Government will not continue to fight very strongly for vital British interests, whether it is within an EU treaty or an intergovernmental treaty.
Lord Howe of Aberavon
My Lords, if I may strike a slightly more optimistic note, is my noble friend aware that our achievement in getting major headway on the Single European Act at the Luxembourg summit followed immediately after the Milan summit, in which our agenda scarcely received any attention at all? That is another rather surprising matter that went ahead without us having much enthusiasm for it. Is my noble friend aware that the future is not as gloomy or as difficult as some people might believe?
Lord Strathclyde
My Lords, I very much welcome the positive note that my noble and learned friend brings to all of us. He is also right about the Single European Act, which was a vital and game-changing initiative. I agree with him that nothing is ever quite as bad as you think it is, and perhaps some things are not quite as good as you think they are either. Nevertheless, the Prime Minister made the right decision on Thursday night and, if he were asked again, he would do the same thing.
Lord Wigley
My Lords, if the Prime Minister had secured the safeguards that he sought for the financial services, would he have supported the treaty going forward?
Lord Forsyth of Drumlean
May I congratulate my right honourable friend the Prime Minister on standing up for Britain and speaking for the people of this country, as opinions show? May I also congratulate the Deputy Prime Minister on establishing a new principle that a weekend is a long time in politics?
Lord Forsyth of Drumlean
I think this may be the last time that I get called. On the substance of the meeting, why did no one address the immediate crisis, which is what to do about repaying the debt? If anyone is isolated, is it not Germany because Germany needs to realise that she needs to write a cheque or allow the European Central Bank to be the banker of last resort and print money? We will otherwise go into deep crisis. This crisis is being used as an excuse for further integration and as such is deeply irresponsible.
Lord Strathclyde
My Lords, I entirely agree with my noble friend that the substance of the issue is to solve this economic crisis—an economic crisis which has a chilling effect on the rest of Europe, including this country. In the first instance in the short term, you have to have a firewall of money to stop contagion. Secondly, we accept that there need to be clearer fiscal rules so that countries cannot get into the trouble they have got into in the past. Thirdly, far more work needs to be done on competitiveness within Europe and between countries of the European Union. It is the only way that we are going to succeed in the long term.
Lord Lea of Crondall
Are the Government aware that the British press—the Daily Mail, the Daily Express and the Telegraph—are becoming more and more xenophobic in the way they treat this question? Is the Minister content with this trend whereby British public opinion seems to think that a “fight them on the beaches, fight them in the air, no surrender” policy is reasonable and one with which we can make friends and influence people around Europe?
Lord Strathclyde
My Lords, I do not at all agree with the noble Lord. This is not about the newspapers. I think that the British people generally accept and support what the Prime Minister did because they understand that he was standing up for vital British interests.
Lord Elystan-Morgan
My Lords, the Leader of the House has time and again stated the clear intention of Her Majesty’s Government to assist the eurozone. Does he accept the stark reality of the situation; namely, that 17 countries with different economies and utterly disparate economic circumstances formed a eurozone but, when bad weather came along, disintegration became a very real possibility? In practice, the only two real possibilities are either that there should be a draconian situation of considerable discipline imposed on the eurozone or that there should be a United States of Europe or a Republic of Europe.
Lord Strathclyde
My Lords, that is a huge question and one that requires a much longer debate on another occasion. However, I agree with the noble Lord that there is a mess. There needs to be discipline; whether that is in a United States of Europe is another question altogether.
Lord Garel-Jones
My Lords, does my noble friend agree that under the terms of Article 136 of the treaty of Rome, to which the United Kingdom is a signatory, those members of the eurozone have been entitled, and are entitled—we wish them well in doing so—to take measures specific to those member states whose currency is the euro, so in that sense nothing has changed? Furthermore, is it not the case that under Article 136, those measures must be taken ensuring that they are compatible with those adopted for the whole of the Union, of which the United Kingdom continues to be a member? Does he not agree that what we are witnessing is not the end of the European Union or of the eurozone, and it is certainly not the end of Britain’s influence in those matters?
Lord Strathclyde
My Lords, this is a good note on which to finish. I thank my noble friend for his constructive comments, with which I agree.
Welfare Reform Bill
(12 years, 10 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
18:48 - Division on Amendment 4 - Ayes: 187 / Noes: 189 - Amendment 4 disagreed.
19:35 - Division on Amendment 5 - Ayes: 152 / Noes: 182 - Amendment 5 disagreed.
Baroness Grey-Thompson
“(ba) any amount of support for disabled children included under section 10 should be no less than the amount that was provided under the benefits and tax credits system prior to the introduction of the universal credit,”
Baroness Grey-Thompson
My Lords, this amendment would ensure that the disability additions for children provided under the universal credit are not cut compared with the disability additions provided through the current benefits and tax credits system. Families with children who have a disability are likely to have much higher costs than other families. I would briefly like to explain the current system. Disability living allowance is there to make a contribution to those costs. In addition, the means-tested system has also offered extra support to these families to help with these costs. Families with children who are judged to have the highest needs and receive the highest rate of the care component have an extra £76 added to their child tax credit to help with those costs. Families with children receiving any rate of DLA, except the highest rate of the care component, have an extra £54 added to their child tax credit to help with those costs.
The Government have announced that the disability elements of the child tax credit will be replaced with a disability addition and higher addition within the universal credit. However, all those who receive the higher addition will receive only half of the current rate. If the child is in receipt of the higher rate of the care component of DLA, the family will receive the higher disability addition, worth £77. Children who are registered blind will also now qualify for this higher addition. This means that those families who have a child eligible for the higher addition will receive £1.50 a week more than current claimants. However, households with disabled children who are not entitled to the higher rate and who claim benefit after the measure is brought in will receive only the disability addition worth about £27, which is about £27 less than the current rate.
As can be seen, the disability addition halves the level of support provided under the current system, so most families with a disabled child will lose around £1,400 a year. I have a number of concerns regarding which families will be affected by this. Only families of children in receipt of the higher rate of care component of DLA and severely visually impaired children will receive the higher addition. All other families of disabled children receiving DLA will receive the reduced level of support. In order to receive the middle rate of the care component of DLA, children have to need help frequently throughout the day or through the night. Those care needs have to be substantially in excess of the average care needs of a child the same age. To receive the higher rate of the care component, the child has to have frequent needs through the day and the night. Many children with a very significant level of impairment such as children with Down's syndrome or children who are profoundly deaf are likely to be in receipt of the middle rate of the care component as there is no reason why they would be likely to have substantial care needs in excess of other children at night. They will thus only be entitled to the lower addition.
Baroness Campbell of Surbiton
My Lords, I am happy to put my name to the amendment of the noble Baroness, Lady Grey-Thompson. Losing 50 per cent of the support currently provided by the disability element of child tax credit will be extremely difficult for many families who face considerable extra costs as a result of having a disabled child who may not meet the severe disability threshold.
The severity of one’s disability should not be the overall defining factor for eligibility to this financial entitlement. The impairment severity is a highly unreliable measure for financial support needed by families to offset the extra costs of raising these children. All manner of disabled children face the extra costs associated with overcoming socioeconomic and environmental barriers. Medical textbook impairment measures are only part of the picture. For example, according to the textbooks, as a child I was considered to be at the most severe end of the scale—very severe. This is still the case today. A person with moderate autism or cystic fibrosis, however, is deemed much less severe. But if you ask my mother who, in my school class, needed financial support the greatest, she would say without a doubt, “Lorna, Mark and Peter”. All would be deemed to have moderate impairments today. We all came from similar economic backgrounds; working class and money was extremely tight. So why were their needs greater than mine?
My mother explains much better than me—as always. Lorna, because she had a hole in the heart and needed expensive extra warmth, good nutrition and babysitting, as both parents needed to work to survive and no family friend or family members felt confident enough to care for her. They were scared: she had a hole in the heart; she was going to die at any moment. Actually she was not, but that was the assumption. Mark, because he had moderate autism, whose particular behaviours could not be financially accommodated by his disabled mother, who herself needed support financially to raise his other two brothers as well. Finally, Peter, whose asthma meant several emergency admissions to hospital per month making it almost impossible for his single parent mother, with two other young siblings, financially to bear the cost of transportation to the hospital and childminders for the other siblings. None of these children is considered to be textbook severe, yet compared to my family their disability-related financial need was much greater.
I believe the Government’s obsession with aligning certain benefits to be really hazardous—unintentional, of course. Such assumptions are not based on practical evidence, as we realised when the Government attempted to align hospitals with residential care homes when looking for areas to cut the significant DLA budget. Please do not let us make the same mistake again.
The noble Baroness, Lady Grey-Thompson, has given reams of evidence from various notable NGOs and charities which I do not need to repeat. Before finishing, I did contact the eminent Dame Philippa Russell for advice as to what to highlight today. Noble Lords will know of Dame Philippa. She is famous for advising successive Governments for nearly 40 years on disabled children, and she ran the Council for Disabled Children for 30 of those years. She is currently the chair of the Prime Minister's Standing Commission on Carers. She said to me:
“I am very keen (with my two sector hat on) to stress the need to move away from this categorisation of people as having severe, moderate, low needs. None of those categories make sense without screeds of explanation that tax credit assessors simply will not have. They completely negate the idea of prevention and support”.
Let us listen to the experts and accept the amendment, which I feel makes sense.
Baroness Thomas of Winchester
My Lords, I spoke to a similar amendment to this in Grand Committee, but it was grouped with various other amendments and the debate was therefore not as clearly focused on disabled children as it might have been. In this amendment, the focus is simply on ensuring that disabled children do not receive less support in universal credit than they did under the benefit and tax credit system. The two noble Baronesses from whom we have just heard said it all and I shall not repeat what they said. However, it may be worth reinforcing how this works.
The disability elements of child tax credit will be replaced under universal credit with either a disability addition if the child is on the lower rate of the care component of DLA, or a higher addition if the child is in the middle or top rate of the care component. Children who are registered as blind will now qualify for the higher addition. The difference in rates is significant. As the noble Baroness, Lady Grey-Thompson, said, the lower addition will be worth about £27 instead of the current £54. We know that children will still receive DLA, even after other disabled people have transferred to the personal independence payment, and there are three rates of care component within DLA—lower, middle and higher. In the benefits system, the middle and higher rates usually go together, but under universal credit the middle rate will be aligned with the lower rate. This means, as we have heard, that children with significant impairments, such as those with Down’s syndrome or who are profoundly deaf and who now receive the middle rate, will in future be entitled to only the lower rate. Thus, their families will lose out.
The bar is set pretty high for children to qualify for the highest rate of the care component. They either have to be visually impaired or need not only frequent care or continual supervision by day but prolonged or repeated care during the night. This means that children who are, say, registered as blind will be entitled to £77 a week, while children with Down’s syndrome or who are profoundly deaf will receive about £26 a week.
The rationale for the change is, as we have heard, supposedly to align the rates of support for adults and children and to simplify the additions—as well as to target those in greatest need. However, the gateways for children and adults are so different that the alignment is not really relevant. As for targeting those in greatest need, it is a matter of judgment as to whether it is better to help a greater number of families with disabled children or to give fewer families greater help. What worries me most is that families with disabled children are disproportionately more likely to live in poverty, as many studies have demonstrated, and as the noble Baroness, Lady Campbell, said. Parents of disabled children are less likely to be in work, so the so-called tidying-up and aligning exercise is likely to push already poor families deeper into poverty.
I would very much welcome some help regarding the transitional arrangements, which I failed to grasp when my noble friend described them in Committee. Perhaps he can tell us about them in his reply. We are having to cope with a difficult question.
Lord Wigley
My Lords, I support the amendment of the noble Baroness, Lady Grey-Thompson, which has been eloquently supported by the noble Baronesses, Lady Thomas and Lady Campbell.
I had an opportunity at Second Reading and in Committee to refer to the extra cost and burden placed on families with disabled children as a direct result of their disability. The extent of the extra costs will obviously vary with the extent of the disability. One does not argue about that, and the previous system has contained gradations that allowed that to happen. One accepts that those in the greatest need should have the greatest support. None the less, there are those in the intermediate category who have substantial needs and they would, without financial help, undoubtedly feel enormous stress arising directly from their financial position.
If the figures quoted by the noble Baroness, Lady Grey-Thompson, of a loss of up to £1,400 a year are true, such a sum cannot be ignored, and the stress that that would cause to the parents and families of disabled children would be immense. That surely cannot be allowed to happen. If as many as 100,000 families could be affected directly—presumably not to the extent of £1,400—that is an immense number.
I put it to the Minister that if one went out on to the streets in the towns and villages of these islands and asked whether people would be prepared to pay a little extra in tax to ensure that families with disabled children would not lose out as a direct result of government policy arising from this legislation, people would say yes. Surely in those circumstances, the Government must look at their priorities and ensure that families with disabled children are not left to carry the can for the financial mess in which we find ourselves.
Baroness Wilkins
My Lords, I strongly support the amendment and urge all noble Lords to do so. Are we really becoming such a mean-spirited nation that we are willing to take away funding from less disabled children as the only means by which more severely disabled children can benefit? That is what the Government are proposing to do with this clause, although we know from a recent Children’s Society report that 40 per cent of disabled children live in poverty, and that if there is more than one disabled child in a family the poverty rate increases to 50 per cent. As the noble Lord, Lord Wigley, suggested, might there not be some people with broader shoulders who could contribute and endeavour to raise all disabled children out of poverty?
In order to be eligible for the higher rate, a child must require care both day and night. Many disabled children with significant needs will not qualify. Think what the loss of that money means for a family on a very low income—that £1,400 a year would amount to £22,000 over the life of a disabled child. It can mean not buying another box of incontinence pads when your allocation runs out, so that the mother spends exhausting hours changing and washing bed sheets, day after day. It can mean not being able to replace a sibling’s toy that the disabled child has broken, perhaps in a temper tantrum or frustration or because he or she cannot control their movements. It means intolerable strains on families that too often lead to family break-up.
Much of the Bill is about changing behaviour by the imposition of penalties. However, having a disabled child is not a lifestyle choice. Parents desperately need financial help in order to give their disabled child an equal chance in life, or are we really willing to let this legislation increase the shameful number of thousands of disabled children already living in poverty?
Lord Boswell of Aynho
My Lords, it would be impossible to have served, as I have for a number of years, as party spokesperson on disability issues and maintain a continuing interest in my party’s disability group without a degree of sensitivity to the problems of disabled children and, of course, to those of their families. The noble Baronesses and noble Lords who have spoken about this issue are clearly right in drawing the House’s attention to it. All that I would say is that we need to pause for a moment in looking at the overall implications of these proposals, because my understanding of the position is that relatively—broadly over the past decade, and it may properly be attributed to the previous Administration—there has been significant acceleration in the support given to disabled children, reflecting the pressures to which we have referred that have caused their benefit rates to increase faster than those of adults.
The Government’s proposal is not, and indeed was not presented as being, simply a matter of cutting back the support for disabled children. The other aspect of the Government’s proposals is the alignment of rates, reflecting the position of adults and including some with more severe disabilities. All I would say, with respect, to those who have moved this amendment is that if we are going to make proposals that will increase or maintain the public cost in relation to children, it will be very difficult to provide the equivalent or additional increases for adults. Given the economic state of the country, we cannot proceed through the Welfare Reform Bill with what I might call the “highest common factor” approach to benefits of all kinds. We need the most appropriate and targeted system. I say that not in derogation of the case that has been made but simply with reservation about its sustainability.
There may be a glimmer of hope—indeed, there is already a chink of precedence—in relation to the arrangements for transition and run-on to the new system. I know that the Government have already indicated that they will maintain DLA with its three levels in relation to children rather than transfer them all to the personal independence payments. That is a start. The key to this—and this will not be the only case in the matters that we will hear tonight—is that there should be appropriate and sensitive transition arrangements so that people do not lose significant or very large sums in years one or two, but that nevertheless the overall objective—rebalancing the system and maintaining some coherence in public revenues and expenditure—is maintained.
Baroness Howe of Idlicote
My Lords, I support the views that have been expressed today. They were not as clearly enunciated in Committee, as we have already heard, but they have been spelt out pretty effectively today. I also accept that the money has to come from somewhere. The important thing may be the transition period and keeping an eye on just what the effect of the transition period is. However, when one thinks that 100,000 disabled children will be less well off as a result of some of these changes, one becomes worried. Four in every 10 lives will be lived in poverty—that was the figure given by the Children’s Society.
Although I accept that it is a difficult decision for the Government to make, I would like to think that there are other pockets from which rather more could be produced. I urge the Minister to look hard in those directions.
Baroness Turner of Camden
My Lords, I, too, support this amendment. I have been reading in newspapers lately that parents of disabled children have begun to get very worried lest the changes being brought about by this Bill reduce the benefits that they already get. This has made a number of them extremely nervous, with the result that we have had a fair amount of lobbying from the organisations that represent disabled people.
One of the attractive things about this amendment is that it seeks to ring-fence the benefits that people have at the moment so that they do not decrease as a result of this Bill. We have heard today from a number of speakers that bringing up disabled children is really quite difficult. Very often parents give up their work in order to care for them. It is often also extremely expensive to look after disabled children. It therefore seems to me that there is some merit in ring-fencing what people have at the moment, so that people who look after disabled children at least have some assurance that they are not going to be worse off as a result of the benefits being introduced under the welfare Bill before us this evening.
Baroness Sherlock
My Lords, I will detain the House only very briefly, but I feel I should say a word of support, having put my name to this amendment, put down by the noble Baroness, Lady Grey-Thompson.
I wish to say just three things. First, we have heard that the effect of these cuts is really quite severe. The noble Lord, Lord Wigley, is correct: parents could find themselves losing up to £1,400 a year, even if they have a family with just one disabled child. That is a very significant loss.
Secondly, the case for doing this is weak. The only case that I have heard over money is about alignment with adults. We have heard a very compelling argument from the noble Baroness, Lady Grey-Thompson, as to how that simply is not the case.
Finally, there is the question of money. I understand that the Government have said that the cuts are not intended to save money but to redistribute it, so that the money saved by these cuts will be used to raise the level of support for adults in the support group. This amendment lays down a marker; by saying that the support given to disabled children cannot be reduced below the current level, it makes the Government think again about that particular brand of rough justice. There is no particular reason why, in making these redistributions, disabled children should be asked to pay for money that is being given to other groups of disabled people. This amendment is not seeking an investment of billions of pounds; it is simply laying down a marker and saying that, when decisions are being taken, this group cannot be expected to bear that cost.
Lord McKenzie of Luton
My Lords, we support Amendment 4, so comprehensively moved by the noble Baroness, Lady Grey-Thompson, and spoken to by a number of noble Lords who are very knowledgeable about these issues. It deals with just part of the inequity introduced by the restructuring of support for disabled people: that affecting families with children. We will debate further issues affecting disabled adults and the removal of the severe disability premium in due course.
Like other speakers, I welcome proposals to increase, over time, the levels of benefit for those in the support group, but we do not think that this should be paid for by drastic cuts in support provided for families with disabled children. Leaving aside transitional protection, my figure is that some 200,000 could lose £27 per week. Whether it is 100,000 or 200,000, it is many children indeed.
We have heard about transitional protection, particularly from the noble Lord, Lord Boswell, but transitional protection is of no use to new claimants. It might stop you losing what you have, but it does not help if you are claiming for the first time. As it is a cash protection it will in any case reduce in real terms over time. Transitional protection will also cease on change of circumstances—the noble Baroness, Lady Thomas, pursued this point—and we have yet to receive clarity on quite what this means.
We are told that the restructuring of these benefits is to simplify the system and that aligning the rates of support for adults and children will ease the transition for disabled children into adulthood, but how does the Minister respond to the point that there is not true alignment? There is also the issue that the gateways are different: for adults it is the WCA process; for children, as now, it is via the DLA. Children who are severely visually impaired will receive the higher addition—a move that we welcome—but it is by no means certain that adults who are severely visually impaired will be allocated to the support group under the WCA. Furthermore, as the noble Baroness, Lady Grey-Thompson, pointed out, disability disregards in the universal credit proposals add to the support for adults.
In Committee, we had some knowledgeable contributions from noble Lords about the costs that families with disabled children face. We know that families with disabled children are disproportionately likely to be living in poverty. In Committee, we heard the very personal experiences of the noble Lord, Lord Wigley. We also heard detailed analysis. We have heard further details today from the noble Baronesses, Lady Grey-Thompson and Lady Campbell, and my noble friend Lady Wilkins. I shall list some of the potential extra costs faced by families: heating, which is a big issue; sensory equipment; special toys; special diet; transport; extra and special clothing; and help with siblings, who will not have their parents’ time and attention. To this must be added the lost opportunity for parents—or at least for one of them—to work.
For those in work, costs can be higher because of the increased costs associated with care and transport for disabled children. Those costs do not only or most heavily fall on families with the most disabled children—that point was tellingly made by the noble Baroness, Lady Campbell. As framed, the amendment need not have overall cost implications for the Government, but it would of course cause a rethink of the restructuring, a restructuring that currently redistributes resources away from children and towards adults.
Reversing a benefit loss of £27 a week for some of the neediest families in our country must be a priority. Failure to do so will inevitably increase poverty at a time when the Government are reneging on their commitment to upgrade the child element of the child tax credit by more than inflation—a measure that they proclaimed in their 2010 Budget would ensure that effects on child poverty would be statistically insignificant but that is a cloak that they can no longer hide behind.
If the noble Baroness is minded to test the opinion of the House, we will support her on the amendment.
Lord Freud
My Lords, I appreciate absolutely the intention behind the amendment, which is to protect the amounts currently paid to support disabled children. I also take the opportunity to thank the noble Baroness, Lady Wilkins, for her letter, which covers this matter. I will also address some of the points that she raises in this amendment.
This is not easy. We have a fixed financial envelope as we face these difficult times and we have to target resources, so we have some real choices to make. Our approach is to focus our support on the most severely disabled people, ensuring that we have the best support possible for those with the greatest need. I make it absolutely clear that we are not looking to make any savings in the changes. We are making a series of changes to make a coherent system; we are not taking money out of the system. We firmly believe that aligning the extra amounts payable for disabled children with those of disabled adults is the right and fair thing to do. We are aiming to focus our support for disabled people on their need, not on their age.
We know that the movement between support for disabled children and adulthood can be very difficult. The report, Improving the Life Chances of Disabled People, shows that the drop in income from childhood to adulthood can cause financial difficulties for young disabled adults. We want to smooth the transition from childhood to adulthood by removing that artificial divide. This is clearly also essential if we are to protect work incentives in adulthood.
To pick up the point raised the noble Baroness, Lady Grey-Thompson—that amounts for children and adults are meant for different things—support for families with disabled children is not limited to the disability addition. Families with disabled children also receive a disregard. The purpose of the disregard is to make work pay for the household. If the parent of a disabled child is working, they will qualify for a disregard at the appropriate rate for a couple or a lone parent. Our latest assumptions about earnings disregards mean that families with children will always have a disregard at least as high as the disability disregard.
I can take noble Lords through some of the figures. Large figures have been cited for the number of disabled children affected, which have not taken into account the overall effect of universal credit. When you consider what happens to a family with a disabled child where someone in the family is in work, the total return for that family goes up from £383 to £416. That is the effect of all the elements of universal credit coming together. That is for the disabled child, not the severely disabled child, who clearly gets more.
The noble Lord, Lord McKenzie, made a point about the number of children in working families receiving the disabled child element of child tax credit, which is 157,000, which is substantially more than the ones who are not working. The equivalent figure is 131,000. I share with other noble Lords a concern to get this right. When you look at the figures of what is happening under universal credit, a large number of the children about whom we are worried, when you look at the whole package, will benefit. For the minority who see a decline, there will be behavioural changes as they move into the other category, where they can—I accept that they cannot always.
To pick up a question from my noble friend Lady Thomas about what happens in universal credit to children on the middle rate of DLA care, they will get the lower of the two rates of current child tax credit. We are carrying forward the rule that the highest rate goes to those on the highest rate of DLA care.
As I have continuously reiterated through our debates, we are overhauling the entire support, so it is important not to fixate on one aspect of universal credit but to consider the entire package for families. That is why we need to look at that rather than to concentrate on individual components.
Lord Wigley
The Minister has acknowledged that whereas some will benefit from other sources of money and that that will counteract the loss of disability benefits, there will be a category who, unless something else is done, will lose out financially. Does he have any proposals to provide a safety net for those people?
Lord Freud
Yes I do, and I will come back to that if I may, because a whole series of questions was raised about transitional protection, which I need to deal with comprehensively.
Our impact assessments made clear that, overall, families are more likely to be better off on universal credit. In addition, departmental modelling estimates are that the impact of the reform of disability payments on the number of disabled children living in relative poverty will be negligible. We must remember that support for families with disabled children is provided by the universal credit package as a whole.
On the absolute figures of support, under universal credit, an out-of-work family with a disabled child will receive just over £8,000 a year in benefits for their child once universal credit has been introduced. That compares to just over £4,000 for an out-of-work family with a non-disabled child and about £1,000 for a family who receive only child benefit. The figure for a child on the severely disabled level is £12,000. That is the order.
Let me now turn to the really important point raised by many noble Lords about taking money away from families who have learnt how to build their lives around it. That is exactly why we have introduced transitional protection. My noble friend Lord Boswell has referred to an assurance on no losses for years one and two. The way transitional protection works is that where circumstances remain the same, people’s payment level is protected on a cash basis. That means that families currently receiving child tax credit will not see a cash reduction at all as a result of the move to universal credit, and we will provide cash protection for as long as the universal credit award is less than the previous benefit entitlement. I hope that represents a level of ring-fencing that the noble Baroness, Lady Turner, will recognise.
Baroness Hollis of Heigham
Perhaps I may ask the noble Lord about cash protection. Does that mean it will or will not be inflated each year by CPI?
Lord Freud
No, clearly there is an erosion factor. Cash protection does not also inflate it. But the point about the universal credit is that it is structured to provide adequate support for families overall, and on top of that where there are differences we have a reasonably long period of transitional protection.
We simply cannot maintain the existing rates for disabled children if we are going to increase the rates for severely disabled adults. I know it is hard to absorb lots of figures at once, but let me just try and capture it. What we are looking at is fundamentally paying a severely disabled child or adult £77 once the universal credit is introduced. That is a big leap for severely disabled adults today who are on £32.35. That is where we are trying to move to, and that is where we are trying to put our resource.
Lord McKenzie of Luton
Can the noble Lord say by when he expects to have moved to that figure of £77 for adults?
Lord Freud
As we move people on to the universal credit and take people off the other systems we will be gradually putting people on to that amount. But I am better off writing to the noble Lord on that particular matter of timing because it is quite a complicated equation. Basically, we are looking to maintain an overall fixed level of spend in this area, and as we pull down one element we can move up the other elements—that is essentially what is happening, so there is a periodicity there.
We are trying to get money to the most severely disabled in our community. There is a real decision here: maintaining the existing rates for children without doing that—without finding this money—would cost an extra £200 million a year. I simply do not have that money. If this amendment is passed, it will not be possible to increase the addition for the most severely disabled people to £77. So there is a decision to be made here: do you agree with the way we want to rebalance the system—
Lord McKenzie of Luton
I am sorry to interrupt the noble Lord again, but is it not right that that equation only follows if you look at those two together? You do not have to operate within that envelope; there are other envelopes, as my noble friend Lady Sherlock mentioned in her contribution.
Lord Freud
That is the envelope in which we are operating. If I could find £200 million more to add to that envelope then I could do it, but we are not in that position. As noble Lords know, we have put a lot of money into the universal credit. The overall gross figure going into people’s pockets—the poorest people in the country—every year once we get universal credit in is £4 billion a year. Of that £2 billion is net extra; £2 billion is through a more efficient system. That is the money we have found; that is the overall envelope that we are operating in. I do not have any more money, and there are some very difficult choices.
The question is this: does the noble Baroness want to maintain the rates for moderately disabled children at the expense of raising the limits for severely disabled people? That is really the juggle that we have to do. As I have said, this is not easy; these are difficult judgments. It has been very difficult to get to this position, and that is the decision that we think is best for people who we really want to help. We want to focus our support on the most severely disabled people regardless of their age; to simplify and to align the extra payments for disabled people; and to smooth the transition into adulthood. That is fundamentally the reason why I ask the noble Baroness to withdraw her amendment.
Baroness Grey-Thompson
My Lords, I thank the Minister for his response and I thank all noble Lords who have contributed to the debate on this vital amendment. The restructuring of support for disabled adults and children is taking money from disabled children who need it. The Government say that it is not a money-saving measure and that its main aim is to simplify the system and to give more to adults with the severest levels of impairment. However, the simplification is superficial and fails to give more to those with the greatest needs. I think that we should remember the words of the noble Baroness, Lady Campbell of Surbiton, who quoted Dame Philippa on the need to move away from categorising people based on severity of impairment.
Additionally, this measure is going to cause significant hardship to families with disabled children, who are already disproportionately likely to be living in poverty. It will make the situation much worse for those who are likely to have higher costs—those in the very group of adults whom this measure is meant to help. I believe that the Government’s proposals will undermine their own prevention agenda. There is no reason why an adapted form of the current levels of financial support could not be introduced into universal credit, with extra help being given to the support group when new moneys allow. It would not cost anything and would mean that families with disabled children were not among the biggest losers under the new system.
We have often heard it said that the devil is in the detail, and I agree, but I believe that the Minister is also making grand assumptions about the ability of parents of disabled children to work. We have heard much about the transition but this is about the new children who will be coming into the system. I believe that the measures that the Government are proposing will push more children into residential care.
I thank the Minister for asking me whom I would be most likely to support. That is not a question that I would like to answer on my own, and I therefore wish to test the opinion of the House.
Baroness Hollis of Heigham
My Lords, I am moving this amendment precisely because I strongly support universal credit. If the House agrees with me in supporting universal credit, I suggest in all decorum that it should also support this amendment.
At the moment, council tax benefit is a social security benefit—a national benefit—which responds to local need. The DWP reimburses local authority spend. If, for example, a factory closes, the need for council tax benefit in that community may increase, and that need is met because the benefit is national and needs-led. Sensibly, therefore, it should be part of universal credit, along with JSA, housing benefit, ESA and so on, because the need for council tax benefit runs alongside those other benefits and should be related to family need, as universal credit will be. Instead, the DWP’s need to include CTB within universal credit appears to have been trumped by the demand of the DCLG and other departments that it form part of a completely separate agenda—the localism agenda. These agendas—universal credit versus localism—clash, and so far the wrong decision has been made.
What is DCLG proposing? In future DCLG will award a fixed-rate grant to local authorities from which it will have to construct its own council rebate scheme. What is wrong with that, your Lordships may think? Quite a lot, and there are three reasons in particular. First, instead of one national scheme that is common across the country, understood by everyone—claimants, local authorities, staff and advice centres—there will be 400 different schemes. There will be a separate and different scheme for every local authority in the country. Norfolk, for example, will have seven schemes that are all different.
Think of the staff resources involved, when we are trying to save money, in constructing and running such schemes, especially when local authorities already outsource much of their work. Think of the complexity of giving advice to people who come into, say, the Norwich Citizens Advice office from all over Norfolk, trying to understand UC and then having to add on seven different taper arrangements according to which district council they come from within Norfolk. All of the admirable simplicity of UC goes out the window. Think of the possibility of underpayment, overpayment, error or even fraud because there is no standard scheme. Given that there will not be enough money to go round, why would any local authority encourage take-up? They will not.
We in this House are rightly building these problems out of universal credit, and the Minister is to be congratulated on that. But we will be building them back in again if this amendment is not accepted. DCLG has balkanised council tax benefit in the name of localism. It recognises this, and now DCLG urges local authorities to do the opposite of what it was calling for—to share common schemes—in which case, why balkanise it in the first place? It will be financed by a fixed grant and will not be needs-led in future. If a factory closes and local need increases, the grant will not go up. Presumably everybody gets less. Or, it will have to be topped up by the council tax that is already suffering 30 per cent cuts in services and a freeze. Think, my Lords, for a moment if that applied to jobseeker’s allowance, and that what you have if you are unemployed in your district depends not on your needs, or on any national standard, but on the needs of everyone else in your district. Your payment would go up and down according to local employment or unemployment figures in your district.
DCLG in its consultation paper recognises this risk, so it suggests—hopefully, idealistically—that local authorities should voluntarily help each other and bail each other out. Oh yeah? Why balkanise, as DCLG requires, if local authorities are too small to bear the risk, as DCLG recgonises? Worse, that fixed grant will be cut by the DCLG by 10 per cent, perhaps more in future. There will be a 10 per cent reduction in council tax benefit per head, but pensioners are to be protected, so the cuts that fall on others will be 20 per cent. However the council, under pressure from local charities, could decide to protect, say, disabled people—I could understand why they would—and give them the full CTB. The more vulnerable families you protect in devising your own local scheme, the more that families in low-paid work—the last man standing, so to speak—carry the cuts.
The Association of North-East Councils has calculated that once vulnerable families are protected, other working-age claimants will face cuts of up to 50 per cent in their council tax benefit. Then work will not pay and universal credit will be a waste of time. Severe cuts in other words are being smuggled in under the drapery of localism but are they essential? At the same time DCLG is spending £250 million on reinstating weekly bin collection or £800 million to freeze council tax, so that my council tax bills are protected while those with much lower incomes on council tax benefit will face cuts of 50 per cent.
Finally, what you will get in CTB will, of course, be determined by your income. Families facing the means test of universal credit will now find that they also face a second means test—that of CTB. How on earth will the value of moving into work be calculated, which is what universal credit is all about, when people face two means tests, two tapers—one with national rules and one with 400 separate local rules—that are layered on top of each other? As the noble Lord, Lord German, rightly said in Committee,
“if you believe in a universal credit, and you have a postcode lottery for what that amount of money might mean to you, how on earth are you going to be able to judge whether or not work is beneficial for you?”.—[Official Report, 6/10/11; col. GC 381.]
Exactly so; I could not have put it better.
UC was designed to bring all working-age benefits together into one so that every one of us would know what we would get and why work paid. Under the localism agenda, council tax benefit—a social security benefit—is being plucked out of UC, thereby destabilising it and balkanising the system. Forgive me, but this is administrative madness. All of this is being proposed in the name of localism but do local authorities want it? City authorities, like the one I used to lead in Norwich, hate it, as they will see some of their poorest citizens unable to pay their council tax and facing arrears and debts. Equally, some small rural districts are now wondering where they will get the staff resources to devise and run their own in-house schemes. East Devon district council’s cabinet has said that the scheme means: “costs, costs, costs”. A councillor said:
“This should be strangled at birth. It is a disgrace . . . We haven’t got the resources and we haven’t got the time”.
Nearly 6 million people receiving council tax benefit will in future not know what they will get because they will have no entitlement—just a handout from the local authority whose generosity or meanness will vary from district to district, from factory opening to factory closure, and from year to year. We took social security away from local authorities when we finally abolished the Poor Law after the Second World War. Now one of the worst effects of the Poor Law—the postcode lottery—is being reinstated for council tax benefit under the name of localism. That is wrong. To add extra means-testing on top of universal credit’s means-testing is insane. It will undermine universal credit without a shadow of a doubt. I and almost every other Member of your Lordships’ House want to see it working, so what then is the point of this Bill? Worse, this guise of localism will make poor people poorer, and local authorities, in whose name this is being done, will be powerless to help them. Council tax benefit needs to be brought back within UC. I beg to move.
Lord Newton of Braintree
My Lords, I shall be brief because I know that the House wants to get on. I am a supporter of the universal credit, so I am opposed to anything that is inimical to its success, and the exclusion of council tax benefit is exactly that; it is totally inconsistent with the Government’s proposals.
It is an open secret, although I do not expect the Minister to confirm this from the Front Bench, that the DWP does not want council tax benefit to be excluded, that there has been a battle with the DCLG and that for the moment, although heaven knows why, the localism agenda has prevailed. When anyone asks about 400 different social security systems, we are told that it will not be allowed to happen—so the localism agenda, we are told, will not be allowed to be localism because the local systems will be made to come into line in some sensible way. That is daft, but it is what we are confronted with.
I have two or three points to make. This is said to be cash limited, and indeed a cut. What is going to happen in an area where there is a big factory closure and the money has already been spread out? Does everyone already on council tax benefit have to take a cut in order to finance those who have just come on to it? In areas where, say, a big Tesco opens and 400 new jobs are created, does everyone get a bonus because a lot of people have been taken off council tax benefit? It is mad.
My first constituency boundaries straddled a parish boundary; number 36 Havengore was in Braintree and number 34 was in Chelmsford, but the houses were semi-detached. Can we really have totally different benefit systems for the people living in those two houses? Again, this is mad. Do the local councils want it? The answer is no, it is a nightmare for them. We should stop it, and if this amendment is pressed to a vote, for the first time today I shall not be able to vote for the Government.
Baroness Meacher
I support the amendment of the noble Baroness, Lady Hollis, on the importance of including council tax benefit within the universal credit structure and payments system, and I reinforce what the noble Lord has just said. As always, the noble Baroness has set out the arguments extremely cogently, and I know that the Minister needs no reminding of these arguments from me. I want only to reinforce the important point about the resentment of local authorities and their resistance to the proposal to leave them with the council tax benefit problem.
The head of the benefits department of a particular local authority explained on Friday that because they have so little time to change the council tax benefits system radically, they are going to have to use the current system with a 20 per cent taper. This means that they will have to impose a minimum percentage that every claimant of working age will have to pay. This will apparently vary from one local authority to another, depending, as the noble Baroness, Lady Hollis, has said, on the numbers of pensioners living in particular communities and of other vulnerable people who will have to be protected. This particular local authority will have a basic council tax rate of 25 per cent that will have to be paid—a sort of poll tax of 25 per cent of council tax. The local authority in question is far from happy about that, and I understand, as others have said, that anger on the part of local authorities is widespread.
Lord German
My Lords, I do not intend to turn my back on what I said in Committee; in fact, I intend to repeat some of it, so I hope that noble Lords will bear with me. If you believe that council tax benefit is a universal benefit and part of the social security system, clearly you need to ensure that it is delivered everywhere within our country and on a uniform basis so that people will know the rules and the benefit they are going to get.
The noble Baroness, Lady Hollis, has talked about England, but I want to talk, as noble Lords know I frequently do, about the other parts of the United Kingdom that will also be affected by this. I start with a big question to the Minister. He wrote to me about this issue when I asked him how it would work in Wales and Scotland. I was told that the money would be given with a 10 per cent saving—that is a crucial sentence because we can reflect on that and on how we can manage the budget within a council tax benefit structure—and that the saving would be given to the devolved Administrations to enable them to bring forward their own arrangements for help with council tax.
The next sentence was about the powers that they would need to bring forward their own arrangements for help with council tax, and it says that these arrangements must fall within existing competence. This is a crucial question; if there is one thing that I know about, it is that the demand for competence is very important. Clearly it is not primary competence because it is not primary legislation that is being transferred, but executive devolution powers must be being given to both the Scottish Parliament and the Welsh Assembly to be able to achieve that. I would like to know which executive powers have been given, because both Scotland and Wales could refuse to have those powers, which would be a perfectly reasonable thing for them to do. If they think that this is not something that they can manage or want to do, they can refuse to take those competences.
Even if Scotland were to accept those powers, and I have made this point in Committee, I wonder what game we would be playing into in Scotland alone. Remember that the basis of the Scotland Bill that is before your Lordships’ House is that social security should not be devolved; it is part of the glue that holds the United Kingdom together. Say that you do not give the social security competence but you obviously give some competence to the Scottish Government. If you give them that money, my guess, and it is purely a guess, is that they will take the money, convert it by putting a bit of Alex Salmond paste on top of it and make it into a Scottish system. They will then use that as an argument to say, “If you think you want a social security system in Scotland but that we can’t cope with it, here we are, doing a better job than they are in England”. There is a danger to the unity of the United Kingdom in this matter, which is why we ought to consider very seriously what the effects of this change will be.
I am told that Clause 11 gives powers to take the competences back. There is no doubt that there is considerable anguish about this matter, but if you believe that it is a universal system, surely it makes sense to use the funding as part of the universal benefit but also to take the hit that has to come with the budget reduction. After all, if the DCLG is going to be able to allocate the money with the budget reduction, that budget reduction could just as easily be done by the DWP. Obviously it would not be a nice, friendly or comfortable process, but as with all levers you have not damaged the social security structure of this country at the same time.
My question to the Minister is this: if you are to retrieve these competences from Wales and Scotland, which competences are you retrieving, and where does Clause 11 give the power to the other place to bring back the powers into the social security structure? The most important feature that we have to decide here in your Lordships’ House is whether it is better placed, with the appropriate cut, inside the universal credit or inside a social security system for our country as a whole, or whether we wish absolutely and once and for all to abolish council tax credit and have what might be called a local support scheme in whatever the local authority can provide with the money that is provided for it if you cannot even call it a benefit.
I worry greatly about this prospect, and I ask my noble friend the Minister to reassure me that we can bring this back and to tell me how we can bring it back and how we get it back from Scotland and Wales.
Lord McKenzie of Luton
My Lords, we support this amendment, and consider, as my noble friend Baroness Hollis does, that council tax benefit should be dealt with as part of the universal credit.
My noble friend delivered a devastating critique of the proposal in Committee and has done so again today. Indeed, I thought I saw the Minister nod in approval at one stage. If he did not nod in approval at my noble friend, perhaps he did for the contribution of the noble Lord, Lord Newton.
Lord McKenzie of Luton
Very good. Of course, this issue is having to be considered, as has been said, against the backdrop of the overall funding for council tax benefit being reduced by 10 per cent but with commitments to protect awards of council tax support for pensioners and possibly for other vulnerable groups. This means, as has been said, that support for working age claimants is to be squeezed dramatically.
The consultation on this proposition, the Localism Bill, closed two months ago, and perhaps we can know when the Government’s response to this will be forthcoming. Quite apart from the administrative consequences of the proposed localism of the benefit, there is, as my noble friend pointed out, a fundamental difference compared with what happens currently. Under present arrangements, council tax benefit is demand led. Whatever the calculation shows is due is made available to the claimant, by offset against the council tax bill, with full reimbursement from the DWP. It is, as my noble friend explained, the AME—annually managed expenditure—bit of government spending.
This will in effect change under a localised system. If claims under a localised system exceed the budgetary amount locally, authorities will have much more limited resources from which to meet the increased demand. They might dip into reserves, if they have any, or they might make the system less generous in a subsequent period. They might switch expenditure from other local authority spend, but given the savage cuts to local authority budgets that have been made recently, there does not seem to be much room for manoeuvre to do that.
It is suggested that local authorities might approach a localised system on some consortium basis, and therefore that other local authorities will help out. I suggest that the prospects for this are not strong. One consequence of these constraints will be that local authorities will inevitably budget on a prudent basis, building in contingencies that will further diminish the resources available to claimants of a localised system. That indeed is what the risk assessment will dictate.
The main reason advanced by the Minister, Grant Shapps MP, in evidence to the CLG Committee for the localisation of council tax benefit was that for local authorities,
“the big advantage is that they will have a stake for the first time in what people who live in those homes are doing; in other words, an incentive to help get the person back into work”.
This is a rather strange view: that it takes possible savings from a benefit pot for local authorities to have an incentive to help people back to work. It is a view that ignores, or is ignorant of, the proactive and imaginative work that many local authorities do to help local residents into work. However, in any event, the driver for having clear incentives to support work is supposed to be the universal credit itself. If there is any incentive in the system, there is a risk that local take-up campaigns will diminish, as any wider take-up will come from the resources of the council.
We have yet to know how much central direction there will be for a localised system. If the Government run true to form, there will be quite a lot. This was certainly the outcome of the Localism Bill, which espoused localism and gave additional powers to local authorities but came with lots of strings attached, as the noble Lord, Lord Newton, will recall, despite some of those strings being removed in your Lordships’ House. There will clearly have to be central direction if the position of pensioners is to be protected, and some form of direction to deal with tapers and work incentives.
We understand, to follow the line of questioning by the noble Lord, Lord German, that the Minister will say that he cannot support a change to the universal credit to include a council tax benefit now. However, there is nothing to stop it being included in the future, as the Bill now stands. If this is the Government’s position, will the Minister confirm that he considers that regulations under Clause 11 will be the route to effect this?
The noble Lord, Lord German, also raised some fascinating questions about how this works for Wales and Scotland. Can the Minister say whether the proposition that he will advance tonight will be, “Don’t worry about it now—you can get it all back in due course.”? What changes would have to be made to the systems that are currently being built to put this into effect? Including council tax support as part of universal credit is of course not without its challenges, particularly the payment issue, so perhaps we can hear whether there has been any thinking around that matter.
However, we support my noble friend’s strong contention that the sensible, practical and principled way to deal with council tax benefit is to include it as part of universal credit. We believe that the Minister, a very logical person, must have come to the same conclusion. If a strong vote today will help his cause, we are more than prepared to play our part.
Lord Freud
Beware Greeks. My Lords, noble Lords will be aware from previous debates that we are proposing to abolish council tax benefit before the introduction of universal credit and replace it with local schemes of support. Localising support for council tax is part of a wider policy of decentralisation, which will give councils increased financial autonomy and a greater stake in the economic future of their local area. Localisation also reintroduces the link between council tax levels and the costs of providing support, thus reinforcing local financial accountability.
This reform will give local authorities a significant degree of control over how a 10 per cent reduction in expenditure on the current council tax benefit bill is achieved, enabling them to balance local priorities and their own financial circumstances as they see fit. This saving is an important contribution to the Government’s vital programme of deficit reduction. We need to ensure that localisation supports the improved work incentives that universal credit will bring. However, the Government believe that the key principles required to incentivise work can be delivered through local schemes with the help of technical guidance provided by central government. Local authorities will have a greater stake in getting people back into work than ever before.
Lord McKenzie of Luton
My Lords, perhaps the noble Lord would reiterate a point. I thought I heard him say that a Bill for the localisation of council tax benefits or whatever it is called will be introduced in this Session. Does he have any more precise detail?
Lord Freud
I am afraid that I do not have any more precise detail but, although I do not think that in the consideration of the Welfare Reform Bill I can say soon, I can probably say that it will be between January and May or June, or something like that. I have no more precise information.
Baroness Hollis of Heigham
My Lords, I thank everyone who has taken part in this brief expedited debate. I beg your Lordships on the government Benches to hear the words of the noble Lord, Lord Newton, in their ears; namely, that 400 schemes are inane, insane, unwanted and unwelcome, and that council tax benefit should be brought back to where it belongs in social security in order to make universal credit work. The Minister tried to suggest—I would say manfully—that it is too late to change. I do not believe that. That is why we have this House of Lords and this Report stage. Universal credit will not come online until two years’ time in 2013. If your Lordships today support what I believe is the real view of everyone in this Chamber—that council tax benefit should be part of social security—they will support this amendment today. I should like to test the opinion of the House.
Saudi Arabia
(12 years, 10 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Ahmed
To ask Her Majesty’s Government what is their assessment of the human rights and political situation in Saudi Arabia.
Lord Ahmed
My Lords, I would like to thank everyone taking part in this debate. I very much look forward to hearing the contribution of the Opposition Front Bench, as well as the Minister’s response.
On Saturday 10 December, we celebrated the 63rd anniversary of Human Rights Day. A few days before, we also received Amnesty International’s report on Saudi Arabia, Repression in the Name of Security. There have been a number of reports—from Human Rights Watch, the Islamic Human Rights Commission and others—in relation to the crackdown and torture with impunity.
I have great love and respect for the 27 million citizens of Saudi Arabia, as well as the holy places in both Mecca and Medina. For this reason, I believe that it is imperative to speak out against the oppressive, dictatorial and brutal practices exercised by the regime, which interprets its tribal Bedouin culture into religious doctrine in a way which is, in my view, quite contrary to the Sharia and to the practices of Islam.
Over 1,400 years ago, the Prophet Mohammed—Peace be upon Him—worked for a noble lady called Khadijah, who was an entrepreneur as well as a respected businesswoman in Mecca. His daughter Fatima and his wife Ayesha—Peace and Blessings be upon Them—both practised fully in life with men at work, at war, in the community and in business. They expressed their views and opinions, even sometimes against the khalifas—the rulers, who were companions of the Prophet—without fear of being prosecuted or locked up.
Today, women are not allowed to drive or vote; women remain subject to discrimination both in law and practice; women are not allowed to travel, engage in paid work, participate in higher education, or marry without the permission of a male guardian. I am sure that the Saudi authorities will say that women will be gaining their right to vote, even though there is no democracy or freedom in the country. The consultative Shura Council is still fully appointed by the king. Women “gaining the right to vote” will merely join their male counterparts in being able to elect only half of the local municipal seats—the other half of which are also appointed by the king. Women still do not have the same rights as men.
Some 1,400 years ago, the Prophet Mohammed—Peace be upon Him—said that no Arab is better than a non-Arab, and vice versa. Yet, in modern Saudi Arabia, the practices of pre-Islam are rampant, with white Europeans and Americans treated in a superior manner to Asian and African workers doing the same job. They justify this by stating that people are paid in accordance with the national salaries in the place of their origin. Asian and African people are treated with pathetically low wages, and are held in overcrowded accommodation with few or no basic facilities. Even the hard-working cleaners of the holy places are paid less than £100 per month in the most oil-rich country of the world.
Islam never practised sheikhdoms and kingdoms, the culture of the current Arab countries. Islam was based on democratic elections for candidates with the ability to perform and who had in mind the best interests of society. Even khalifas like Omer, Usman and Ali were elected by the consensus of the people.
According to the latest Amnesty International report, since March 2011, the Saudi Arabian authorities have launched a new wave of repression in the name of security. They have cracked down on demonstrations, protests against human rights violations and calls for reform. The number of people arrested is reported to be between 10,000 and 30,000. According to the Islamic Human Rights Commission, there are more political prisoners in Saudi Arabia today than there were in the USSR at its height. The actions of the Saudi authorities are a cause of concern for us all as they breach basic human rights. Thousands of people have been detained over the past decades on security grounds, many of them held for years without charge or trial, or tried and sentenced in secret with no means of challenging their detention. Some 63 years after the Universal Declaration of Human Rights and 1,400 years after the last sermon of the Prophet Mohammed—Peace be upon Him—guaranteeing rights for men, women, children, minorities and the weak, it shocks me that thousands of political prisoners are being held in Saudi Arabia without being charged or convicted.
One of those prisoners is an Islamic scholar who has been detained because he criticised the Ministry of the Interior for its handling of detainees. According to Human Rights Watch, Dr Yusuf bin Abdullah al-Ahmad was detained without charge the day after he published his criticism, apparently as a direct result of his internet post. The Islamic teacher, who is a Sunni and teaches at Imam Muhammad bin Saud University in Riyadh, also criticised the arrest of women who went to the ministry on 2 July and, as on previous occasions, protested peacefully against the long-term detention of their relatives.
There are many illegal imprisonments, including those of British citizens such as Abdul Hakim Gilani, who was recently released from prison due to the campaign run by Al Karama, a human rights organisation, after six years of terrible ordeal due to his political beliefs. Political prisoners include human rights activists, lawyers, members of political parties, religious scholars, bloggers and individual protesters. I can list many names which are all available on the internet and have been circulated by human rights organisations to expose the reign of terror in Saudi Arabia. Since 2001, abusive counter-terrorism methods have been used against political opponents of the regime and anyone expressing concerns in relation to their right to be able to express freely and without fear of prosecution their right to vote and to live in accordance with their traditions.
Noble Lords may be aware that Amnesty International has expressed deep concern in relation to a new anti-terror law which has been formulated. It will be used to silence discontent in the kingdom. For example, it will be a terrorist crime if you are said to have harmed the reputation of the state or its position. “Questioning the integrity of the king or the crown prince” will be punishable by a minimum of 10 years’ imprisonment, while holding a placard could result in a three-year sentence. Already people are tried and held in secret; people are sent to prison for “re-education” or “positive brainwashing”. Torture and other ill-treatment remains rife, and confessions are forced out of detainees using beatings, electric shocks and other forms of torture.
I am fully aware that the Kingdom of Saudi Arabia has more oil than any other country and that we depend on oil. I am fully aware of Saudi Arabia’s financial and political influence in the west and I have occasionally been told by colleagues about our interests, but in my view the principle of defending human rights is and will remain at the very highest level, and higher than any other issue. The Saudi authorities claim that they are now the “Arab moderate camp” and should be supported by the west without much reform or change to their way of governance, just because they claim that they provide consistency and security in the region. But we have supported the Tunisian people, and rightly so. We have just spent over $200 million as well as killing thousands of people in Libya to get rid of the tyrant Muammar Gaddafi. We have supported the people of Egypt even though Hosni Mubarak was a safer bet. We are supporting the people of Syria because of the oppressive tactics of Bashar Al Assad. We must not stay silent in the face of abuses of human rights and lack of political rights in Saudi Arabia by the Al-Saud family. Britain along with other countries should stand up and support the human rights and equality movements which are our basic principles. Our values of defending civil, political, social and economic rights should be universal and one.
Finally, I would like to ask the Minister: how many British citizens are held in the kingdom of Saudi Arabia and what representation Her Majesty’s Government have made to the Saudi authorities regarding this matter. Would he be prepared to support the isolation of those countries which use torture with impunity? Will Her Majesty’s Government support the following requests from Amnesty International, which I support: immediately release all prisoners of conscience, such as those held solely for the peaceful exercise of their rights to freedom of opinion, expression, peaceful assembly or association; end all arbitrary arrests and detentions; provide prompt and public trials meeting international standards of fairness without recourse to the death penalty for all detainees charged or held, including on suspicion of terrorism-related offences, or else release them; investigate thoroughly and independently all allegations of torture and other ill-treatment and bring those found responsible to justice?
It is important that we ask for considerable amendment to the draft penal law for terrorism crimes and the financing of terrorism and bring all of Saudi Arabia’s terrorism-related laws and practices into line with international human rights law and standards. I believe that we have a duty to uphold international law regardless of the perpetrators and their influences on western society. The people of the Middle East will say that Britain operates a double standard in relation to human rights if we remain silent over our friend’s actions. I believe that Saudi Arabia has an important role to play in the Muslim world and that if we fail to encourage wide-ranging reforms and respect for international norms, we will be failing in our long-term duty to create a peaceful world.
Lord Ahmad of Wimbledon
My Lords, perhaps I may say, in a personal moment of reflection, that it is a great pleasure to follow the noble Lord, Lord Ahmed, because he has told me that since my appointment to this House he follows me on every list by accident of my surname, which uses the letter “a” as opposed to his which uses the letter “e”. Nevertheless, it is a pleasure to follow the noble Lord in this debate.
The issue of human rights in Saudi Arabia is one that is very pertinent not just to the Middle East and the Arab world, but to the world as a whole. As the Arab spring is upon us, there are opportunities for greater democracy, increased transparency and a need for greater adherence to human and civil rights. Civil rights and human rights are often bandied about as litmus tests of parliamentary democracies and of countries, whichever model they may follow. It is therefore important that when we look around the world, make the challenges and raise the voice of human and civil rights, we do so with equality enjoining justice. Perhaps that role becomes even more important when we look to established states and to our allies. Where we see rights being usurped, we have two options. Do we turn a blind eye and hope it will go away, or do we do the right thing and raise our voices and, as has been shown in recent months, take action where necessary against discrimination and the usurping of human rights? Surely if these countries are our allies, we should play the role of a critical friend with constructive reasoning.
As the noble Lord, Lord Ahmed, has said, Saudi Arabia is the guardian of the holy shrines of Islam in both Mecca and Medina. It is the birthplace of Islam, a religion of peace by definition, and it is the birthplace of the noble Prophet Mohammed, Peace be upon Him. Much of what we hear about Saudi Arabia is equated to Islam not only for these historical and noble legacies but also because there are claims made by the authorities that the laws that govern the kingdom are drawn from the Holy scripture of Islam. Let me put this into context.
The Holy Koran recognises the right to religious freedom and all civil and human rights in the case of all—that is, in the case of other believers but also in the case of non-believers as well. In the context of human rights and the need to exercise religious freedom—or any freedom—it is important to mention a verse in the Holy Koran:
“Let there be no compulsion in religion”.
That has application not only to Muslims and non-Muslims alike but also those who perhaps renounce their faith after professing it. The Koran does not prescribe punishment—as is sometimes erroneously interpreted—for the renunciation of faith alone. Ultimately, according to Islamic doctrine—the right and true interpretation of Islam—that decision and a person’s ultimate destiny lie in the hereafter in the hands of God almighty.
Muslims believe that the Holy Koran contains the first and foremost universal declaration of human rights in the history of mankind. Let us refer to that for a moment. The Universal Declaration of Human Rights, as we know it, stands as a milestone towards the goal of freedom, justice and equality. Adopted in 1948, it contains the broadest consensus of contemporary civilisation on the subject of human rights. It contains all the important political and civil rights, such as equality before the law, the right to a fair trial, the right to own property, freedom of opinion and expression, and of thought, conscience, and religion:
“Everyone has the right to freedom of thought, conscience and religion; this right includes freedom to change his religion or belief”.
The broad values and standards laid down by Islam endorse these values that were adopted in 1948, which teach respect and tolerance for all people and all faiths.
Let me go forward to the Cairo Declaration on Human Rights. This was something to which Saudi Arabia subscribed in 1990. It offered a somewhat parallel declaration—an Islamic conception of human rights. With this objective, many Muslim countries, under the aegis of the Organisation of the Islamic Conference, signed the Cairo Declaration on Human Rights. That also sought to provide protections for the rights of women and religion but there were limitations. Perhaps when you look at the two declarations side by side those are glaringly obvious. The important thing is that it was a step in the right direction. Yet the Cairo Declaration refuses to give the most fundamental of human rights: the freedom of conscience and the right to change ones religion or belief. The Cairo Declaration is deafeningly silent about the right of a Muslim, for example, to renounce Islam in favour of other religions or atheism. We sometimes see the interpretation of that in its very ugly form in certain Muslim states.
I now move forwards to 2002, when the United Nations published the Arab Human Development report, which noted that the Arab region has the least freedom compared to six other key regions of the world, in areas that include the rights of women, civil liberties, political rights, the independence of the media and religious freedom. The noble Lord, Lord Ahmed, has already referred to many of those with direct examples of the current state of play in Saudi Arabia. This culture of intolerance gnaws at the social fabric of the Muslim world. It gnaws at the moral conscience of Muslims not just across the Muslim world but Muslims—and anyone—with human and civil rights at their heart.
I return to the Arab spring—a time of opportunity to build a new vision, for countries to embrace change and look again. For those Muslim countries—Saudi Arabia is an example—which seek to build a new vision of Islam and show that Islam recognises opportunities and the civil and human rights of all irrespective of religion, creed, colour or gender, it is important that they show leadership. It is then for these countries—for Saudi Arabia—to provide human and civil rights coupled with religious and political freedoms, where women do not play a peripheral role but a rightful, full and active role in not just partial elements of society but in all elements.
King Abdullah of Saudi Arabia announced recently that women will be able to participate in municipal elections in 2015 and become members of the consultative Shura Council. That is a welcome step. It is about the greater participation of women in life in Saudi Arabia. Yet the statement, which was made not so long ago in September, made no reference to other areas of discrimination against women, such as the guardianship system that has been referred to or—one that often hits the headlines—that women still cannot drive in Saudi Arabia on their own. That is not Islam. It is far removed from Islam. I can assure noble Lords that if I, as a Muslim, told my wife that she could not drive on her own, I would get more than just an earful.
On a more serious note, this is not reflective of the origins of Islam. The noble Prophet of Islam, Mohammed, laid down the principles of equal rights for women. Inheritance rights—the rights of daughters to inherit—were previously unheard of, and not just in the Arab world. So the Muslim world was a leading example of those rights. What has gone wrong? It is time to reclaim the true traditions of Islam. I reflect, perhaps appropriately, that this year’s Nobel Peace Prize is being awarded to three women. One of those is an Arab woman, Yemen democracy activist Tawakkul Karman, who will receive the Nobel Prize in Oslo. Indeed, I believe we will welcome her to this House over the next few days. Her example should act for Saudi women, for Muslim women across the Islamic world and for women across the world wherever they are—and for all people who suffer any kind of discrimination. It says that if you persevere, if you stay at it, you can ensure that your voice will be raised and recognised. It is important that we support those voices.
Many would say that this is an example of modern empowerment, that it is what Islam did not allow. No: if we go back to the origins of Islam, as the noble Lord, Lord Ahmed, pointed out, in the traditions and history of Islam, in the examples of Hazrat Khadija, Hazrat Ayesha and Hazrat Fatima, we find that those women who laid the basic foundations of Islam were great proponents of equality: the rights of women and equality within Islam. Perhaps those who lead Saudi Arabia today should reflect on the origins of Islam for the solutions that they need to provide.
Lord Avebury
My Lords, I am very glad that the noble Lord, Lord Ahmed, has given us the opportunity of discussing human rights in Saudi Arabia today, and I congratulate him on his very forthright speech introducing the debate this evening. In spite of its egregious human rights record, it is seldom discussed on the Floor of the House. I looked back over the present Session and found only two occasions. The first took place when the noble Lord himself introduced a debate at Question Time in terms very similar to the one that we are having this evening; the second was introduced by the noble Baroness, Lady Smith of Basildon, at the end of October. On that occasion, by the way, my noble friend Lady Falkner asked the Minister how the UK voted when Saudi Arabia was elected to the board of UN Women; the Minister has not yet complied with the undertaking to write to her on that matter. Perhaps he could tell us now, and at the same time explain how Saudi Arabia came to be a member of the UN Human Rights Council when human rights are non-existent at home.
The Foreign Office’s annual report on human rights and democracy shows that in Saudi Arabia the rule of law does not apply because judges apply their own interpretation of Sharia law, including their own arbitrary variations in punishments for the same offence. The death penalty is applied to many different offences, including sorcery, drug-smuggling, homosexuality and apostasy. Minors are not exempt, as we see from the case of the 17 year-old Sri Lankan housemaid, Rizana Nafeek, who was wrongly convicted of the murder of an infant left in her charge. Torture is widespread, but the FCO fails to mention the frequent use of the cruel and unusual punishment of flogging, as in the case of the Australian, Mansor Almaribe, who was on hajj when he was arrested and convicted of insulting companions of the Prophet and sentenced to 500 lashes and a year’s imprisonment, although he suffers from diabetes and heart disease and is very unlikely to survive that punishment. The US State Department gives details of reported cases of torture and flogging. Freedom of expression is strictly limited. Newspapers can be closed down without appeal. A journalist was sentenced to 50 lashes for reporting a protest against electricity price rises. There is absolutely no freedom of religion.
The Shia minority, which amounts to 20 per cent of the population, is severely repressed. Unfortunately, the FCO only devotes one short paragraph to this problem and gives no details. There is now major unrest among the 2 million Shia in the Eastern Province, and, as in Syria, demonstrators are being shot dead by the police. A 20 year-old student, Nasser al-Muhaishi, was killed on 21 November when live ammunition was used against demonstrators, also injuring a woman and a child. The young man’s body was not handed over to his family for burial, which triggered a further demonstration, during which another youth, Ali al-Filfil, was killed and seven others injured. After 70,000 took to the streets to protest against these killings, finally the bodies of the two young men were handed over, but, during the funeral processions, two more were killed, 26 year-old Abdullah Iqriris and 22 year-old Munib al-Adnan. Twelve further persons were injured, two of them critically. On 6 December, a group of 62 Saudi intellectuals issued a statement condemning the killings, holding the Government responsible, and calling for freedom of expression and an end to sectarianism. Now these human rights defenders are being threatened by the official media on the grounds that they are inciting violence and undermining national unity. I hope that my noble friend can say that we will condemn the use of lethal force by the authorities, as well as the use of torture against detainees and the arrests of thousands of political dissidents, which have been mentioned by the noble Lord, Lord Ahmed.
In April 2009, Bill Rammell MP, then Minister of State at the Foreign Office, wrote to me saying that we were,
“engaged with the Saudi Government to encourage their tolerance of, and respect for, the Shia community”.
Well, we have been singularly unsuccessful in this aim, because there is a constant stream of complaints from the Eastern Province about the prohibition on the building of mosques, arbitrary arrests of leading community dignitaries, raids on private houses where the Shia meet for prayer, and the prohibition on Shia worshippers joining in prayers at Sunni mosques.
As we have already heard, women are allowed to work only in a very few occupations, and then only with other women. All women are subordinate to a male relative, contrary to an undertaking given by Saudi Arabia to the UN Human Rights Council that it would abolish the male guardianship system. Girl children can be married off at the age of 12. I expect that the noble Baroness, Lady Smith, will have seen the report in the Sunday Telegraph a week ago about the cleric who said that if women were allowed to drive, they would be “driven to lust”. The highest religious council chipped in and said that it would be the end of virginity in the country, and a young mother convicted of persistently flouting the ban on women drivers was sentenced to 10 lashes in Jeddah in September in spite of the king's promise to grant her a pardon.
Anti-Semitism is rife and foreign workers, of whom there are almost 8.5 million in the kingdom, are often the victims of violent abuse by their employers, who enjoy almost total impunity. The FCO says that this issue is raised frequently with the Saudi Government, the Shura Council and the media, but it has nothing to say about the success or otherwise of all these representations. The FCO appears to think that we can alleviate the horrendous violations reported in its annual report and covered in far more detail and more effectively in the State Department equivalent, by remonstrations and cosmetic bits of aid which are supposed, for example, to encourage reforms at the Ministry of Justice, promote discussion in the Shura Council on the minimum age of marriage and adulthood, and to sponsor talks about the regulation of foreign workers’ rights.
If the Saudi Government had the political will, they could perfectly well undertake these initiatives themselves. It is not at all clear whether any of the glacially slow reforms that are actually or potentially occurring are in fact accelerated by the UK’s initiatives. On the contrary, it could be that the authorities play along with our no doubt well meaning attempts to influence them in the direction of human rights and democracy as a means of averting stronger criticism of the kind they have to put up with from human rights NGOs such as Amnesty International and Human Rights Watch. It would be very interesting if my noble friend the Minister could say something about the incongruity of spending UK taxpayers’ money on these puny initiatives when the Saudi hereditary dictatorship is rolling in billions of dollars of oil money. I would also like to hear from my noble friend what the Government’s attitude is to the use of those billions to fund the Salafist ideology which is being promulgated in mosques and madrasas throughout the Arab world and in south Asia that are the mainspring of terrorism and the indirect cause of the deaths of hundreds of British servicemen in Afghanistan. This ideology which sanctions the use of violence against all who think differently is the reason why the Christians of the Middle East are being squeezed out of the region, as the most reverend Primate said in your Lordships’ debate on Friday. He might have added that they are being squeezed out of Pakistan and other Islamic countries as well.
However, not only Christians are under fire throughout the Islamic world. Last Wednesday, 55 worshippers, celebrating the festival of Ashura, were killed by a suicide bomber in Kabul, while in the Pakistani city of Lahore, 93 worshippers at two separate Ahmadiyya mosques were murdered in terrorist attacks in May 2010. Dozens of assassinations of persons belonging to minority Islamic sects as well as attacks on their places of worship have been reported in recent years and yet there has been hardly any attempt to examine the ideological sources of terrorist movements such as al-Qaeda or al-Shabaab, or even to analyse the literature being used in the madrassahs where the leaders of these movements were educated. I would like my noble friend to say what the FCO is doing, together with the European Union and others, to counter the hate-filled propaganda which motivates terrorists and to expose those who are funding it.
Finally, I request my noble friend to use whatever influence we have with the Saudi regime to persuade it to withdraw its troops from Bahrain, where they are propping up another hereditary despotism. In 1956, when the Hungarian Communist Party invited Soviet troops in to quell unrest, the international community rightly decided that it was a breach of the UN charter. The same verdict was passed on Soviet intervention in Czechoslovakia in 1958, and on the Soviet invasion of Afghanistan in 1980, which followed an invitation by President Babrak Karmal. These incursions were violations of Article 2(4) of the UN charter because the Governments of the states concerned were manifestly not representative of their people, and the same is true of the situation in Bahrain. The Saudi troops there may have been used solely to guard critical installations but in so doing they released the local security forces to attack and murder demonstrators and to arbitrarily arrest and torture thousands of Bahraini citizens.
The Saudi regime cannot last indefinitely, any more than the dictatorships of Tunisia, Libya, Egypt or Syria. The ideal would be a managed transition over a period to a constitutional monarchy, or an elected shura with legislative power, and a Government of the majority with the right to appoint Ministers. However, if that is going to happen, I think it will be as a result of internal and regional forces and not because of the worthy but ineffectual attempts to reconcile Wahhabi absolutism with international norms of human rights and democracy. Whatever influence we do have should be directed towards preventing the spread of the pernicious ideology of the Saudi clerics to the rest of the Islamic world.
Baroness Royall of Blaisdon
My Lords, with the leave of the House, I will speak on behalf of my noble friend Lord Triesman who is still engaged in Grand Committee. I thank my noble friend Lord Ahmed for introducing this short debate and all those who have made invaluable contributions to it. I can think of no one better than my noble friend to speak out against human rights abuses in Saudi Arabia. He is a true friend to the 27 million people of that country.
I share the deep concern that has been expressed all around the Chamber about torture; about those who are at risk because they question the integrity of those in authority; about those who have sought to speak freely or associate politically; about those who wish to follow religions of their choice; and, of course, about the women of that country who are subjugated and, as so many have said, not even allowed to drive. As the noble Lord, Lord Ahmed, said, the Prophet, peace be upon him, was a proponent of equality, and the traditions of Islam celebrate equality and the rights of women.
As true friends of Saudi Arabia, I think it is our duty to speak honestly about what is happening in that country because that is the role of a true friend. This was always going to be a difficult debate in some ways. On one hand we are discussing an important ally in global and regional security, but we are also discussing a nation with whom we have very important trading relations, and those relationships impact on our most advanced, technically most sophisticated, areas of manufacturing. It is not surprising in these circumstances that the UK is cautious about the language it uses and the subjects it chooses to talk about in respect of its relations with Saudi Arabia. Those of us who are used to the warm and productive relationships with the diplomatic representatives of the country would always wish to avoid gratuitous or discourteous language even when discussing the most difficult issues.
However, those issues cannot and must not be avoided in a world where values truly count and where it is impossible to suppress news of the international events in any country. With almost every citizen with a mobile phone now a kind of news reporter and cameraman with the world wide web an instant and almost unstoppable publishing medium, all of our actions are available for inspection and comment. In short, everything is visible, not least the human rights and political landscape of almost every country. One of the values that I wish to endorse is the transparency that is created in the new world of media.
Before I ask your Lordships to consider some of the facts about repression in Saudi Arabia—a country with which, as I have said, we have friendly relations—I would like to deal with the two main arguments as to why we should be honest in our relationship with our friends in Saudi Arabia. As the noble Lord, Lord Ahmed, said, we have to be critical friends. Closing one’s eyes to real misdeeds by a friend is no basis for any set of shared values. We have to have shared values in order to nurture the friendship between our two countries.
The first argument for refraining from criticism is that it is nothing to do with us; it is a matter for any nation to determine its internal affairs without interference. Clearly that is not correct. Human rights in Saudi Arabia are specified in the basic law, Article 26. The basic law is grounded in Sharia law and it has been argued by Saudi representatives at the UN Committee Against Torture, for example, that law and sentences reflect local traditions, which have been adhered to since the inception of Islam. However, as we have heard clearly this evening, those are not the real traditions of Islam. Indeed, when criticised, Crown Prince Abdullah bin Abdul Aziz told the third millennium summit of the UN that:
“It is absurd to impose on an individual or a society rights that are alien to its beliefs or principles”.
Without any wish to be offensive to Saudi Arabia or to Islam, such a position is patently untenable. The nations of the world have moved on from defending atavistic brutality as a matter for each sovereign state.
This is not a matter which is advocated only in modern or liberal societies but it is the binding conclusion of the principal multinational bodies. It is the DNA of the responsibility to protect peoples from oppression, which is central to the UN doctrine. It is the purpose of the UN Committee Against Torture, the purpose of multinational bodies charged with protecting the rights of women, minorities, people in gay and lesbian relationships, and it is focal in international efforts to foster democratic practice. In short, these values have become as global as the communication systems that discover and report the denial and breakdown of such values. The world is entitled to comment. Under international law, there is an obligation to comment, whether in Parliaments, the International Criminal Court or the media. We have a duty to uphold international law.
The second argument against criticism is the case that progress is being made, slowly but surely, against the weight of tradition. Some things are changing. People cite the Association for the Protection and Defence of Women’s Rights in Saudi Arabia of 2002, recent announcements on women’s participation in elections—but, as we have heard, that is indeed a chimera—the funding of the Saudi Civil and Political Rights Association in 2009, and the ratification of the Arab Charter on Human Rights in 2008. Of course, these small moves in a better direction are welcome but progress is self-evidently painfully slow and if even these changes fly in the face of legal traditions and are alien to Saudi Arabia’s beliefs and traditions, it is likely that they will not be fully implemented and that they will appear to be more token than real.
Inevitably, we must look at the realities. Where political freedoms are concerned, including freedom of expression, dissent is routinely prosecuted as evidence of terrorism. In the past six months of galvanic change in the wider region, and at a time of opportunity and new vision, as noble Lords have said, Amnesty reports a wide-ranging crackdown targeting many thousands through arrests and detentions, and that these methods replicate those used in allegations of terrorism. Many are held without charge or are charged with offences such as inciting public opinion, which is what most of us in this Chamber do every day. Months spent in prison do not result in trials. Torture and ill treatment are rife. There is so much more that should not be tolerated by the global community—all those countries that signed the Declaration of Human Rights, whose anniversary we celebrate today. Where trials occur, there are authoritative reports of defendants in court being blindfolded, handcuffed and without legal representation. We cannot allow this to go on.
On human rights issues, the picture is still more bleak. The death penalty, including public beheading, stoning and occasionally crucifixion, can be imposed for a wide spectrum of offences which still include apostasy, witchcraft and sorcery. It is in the area of rights for women that it is argued that the greatest progress has been made. For example, 70 per cent of those enrolled in universities are women, yet women make up under 5 per cent of the workforce. Religious restrictions continue to be imposed on Christian, Jewish and Hindu peoples, and on Shia Muslims. I look forward to the Minister’s response to many of the issues raised by the noble Lord, Lord Avebury, about the ideology that is taught in some of the madrassas around the world and about the hate-filled propaganda that permeates them and emanates from them. Lesbians, gays, bisexuals and transgender groups are defined as criminals under the criminal code. While public execution on conviction is a possibility, courts may impose sentences of flogging and imprisonment. This is outrageous.
All these repressions go well beyond what can be justified by tradition. They lie wholly outside international human rights law and they could all be changed. Sometimes it falls to us, as critical friends, to say so. That is what we in this Chamber are doing this evening. We should strongly but respectfully urge the Saudi Arabian Government to respect in full international human rights and standards. The international community would greet with congratulation the immediate commutation of death sentences and a moratorium on this and other forms of judicial corporal punishment. We need to try to engage Saudi Arabia in discussion of a tangible programme to end capital punishment and corporal punishment of all kinds, movement to wider and durable political rights and involvement, and an end to discrimination against all segments of Saudi society. I have no doubt that these will be difficult discussions that require diplomacy. The movement towards modernity and basic values that are central to the world community will do Saudi Arabia no harm and great reputational good.
Nobody gives up tradition readily. Culture is a deep force—I recognise that—but future regard is an invaluable asset, economically, commercially and politically, and it is an asset worth having. We should not forget, as noble Lords have said, that the culture and traditions which are currently adhered to have no basis in Islam. I trust that today’s very welcome debate will assist our Government in their role as a critical friend.
Lord Wallace of Saltaire
My Lords, I thank the noble Lord, Lord Ahmed, very much for introducing this debate. I welcome the noble Baroness, Lady Royall, in the place of the noble Lord, Lord Triesman, who I also now welcome. I am speaking in the place of the noble Lord, Lord Howell, who was speaking in the Moses Room as she came up. Much mention has been made of the Arab spring and of change across the Arab world, in Tunisia, Egypt, Libya and we hope perhaps in Syria. The question is how this affects Saudi Arabia.
One hundred years ago, Saudi Arabia was, with Yemen, the most traditional, tribally based society in the Arab world. As a Christian from a country which has slowly moved, over 10 to 15 generations, from a traditional society to a modern, liberal society, I have to recognise that Saudi Arabia has been moving at immense speed—in two to three generations—from a very conservative, traditional society to one which is facing up to the challenges of modernity. It is, after all, still being governed by the sons of the founder of the kingdom.
I am not qualified to discuss what the authentic Islamic approach is to human rights. I am uncomfortably aware that the Christian tradition has advanced and embraced highly diverse assumptions about the toleration of minorities and of other faiths, the acceptable rights of women, and freedom of expression and dissent. I am conscious that the rights of women were very limited in Britain until less than 150 years ago. We have gradually reformed our laws and social attitudes over several generations since then, and we press the Saudis to pass through the same evolutionary process, but at a much faster pace. The progress that the Saudis are making with education, and in particular the education of women, carries its own dynamic. It is very praiseworthy that they are educating women: educated women are not going to accept, for themselves or their children, the continuing denial of their rights.
We therefore have to recognise that the human rights position in Saudi Arabia reflects widely held conservative social values, but there are indications that the Government and the media are trying slowly to encourage Saudi society to open up. The interfaith initiative that the Saudis are sponsoring is a good example, but it comes up against many Saudis of a more conservative tune, who are not supportive of this. We are attempting to work with those in Saudi society who are advocating reform in order to build support for a full application of human rights standards.
Her Majesty’s Government have serious concerns about the current human rights situation in Saudi Arabia. We have made our views well known, and continue to do so through the universal periodic review process. We make those concerns clear to the Saudis at the highest levels, just as they are frank with us on issues that concern them.
In 2011, we have maintained this frank dialogue, working both bilaterally with the Saudis and with the EU. We have encouraged progress in four priority areas, which for us are women’s rights, the death penalty, the rights of foreign workers, on which the noble Lord, Lord Ahmed, spoke with particular concern, and judicial reform. We funded a number of projects in 2010, including training for Saudi security forces in forensic analysis and investigative methods, including DNA analysis, which has helped to improve the treatment of suspects.
The British Council trained female entrepreneurs through its springboard training programme. On the question of funding, I say to the noble Lord, Lord Avebury that of course the British Government use our money, as do other wealthy countries, including the United States, to encourage what we value so highly and to encourage others to see Britain as a friendly country.
In September, the Saudi Government announced that women would be allowed to participate in both voting and standing in the next municipal elections. This is another small, but, we hope, constructive step forward and, as such, should be congratulated. Of course there can be further improvement. The next one is the rights of women moving around, including, of course in driving. That underlines the wider issue of the guardianship system, on which the UK consistently calls for modification to allow women fully to participate in society.
The Saudi Arabia All-Party Parliamentary Group recently visited the kingdom—last week, I think—led by Daniel Kaczynski, and discussed with the Saudi Government a draft law on terrorism, which is, I emphasise, only a draft law. A number of amendments have been proposed from within the Saudi Government and society. It reported back to the British Government that it sees the process of reform as slowly moving forward. The noble Lord, Lord Avebury, referred to the pace of reform as glacial. We would of course like it to go a great deal faster, but we think it is slowly moving forward.
A number of other questions were asked in the debate: how many British citizens are there in Saudi jails? I understand that there are currently four British nationals in Saudi jails. We are in regular contact with both them and the Saudi authorities to ensure that they have access to legal advice and to ensure their welfare. We are currently in the process of negotiating a prisoner transfer agreement with the Saudi authorities. This agreement will cover any British nationals held in our respective countries and, of course, the return of some Saudis in prison in British jails.
The rights of foreign workers are a major concern. I think that there are nearly 8 million foreign workers in Saudi Arabia and, as the noble Lord has remarked, many of them come from south and south-east Asia. They are clearly denied rights. The rights of maids and women workers are of particular concern. We have made our case to the Saudis on this, as do a number of other Governments, including the Governments of the countries from which those workers come. It is a matter of universal concern. The human trafficking law which the Saudis have just introduced provides some small progress in that direction, but it has still not been enough to move Saudi Arabia off the worst trafficking in persons rating. External pressure is still there, not only from NGOs but from international organisations, and the Saudis are responsive and deeply conscious of criticism which comes from the outside. I stress that the anti-terror law which the Amnesty International report focused on is a draft. It is highly likely that it will be considerably modified before it is introduced.
On the question of the Salafist ideology, raised by the noble Lord, Lord Avebury, it is correct to say that 10 to 15 years ago, a considerable amount of Saudi money was flowing through Zakat to Islamic charities which were funding madrassahs promoting violent views of Islam. I am told that those flows of money are now a good deal less; that they do not come from Saudi governmental sources; and that the Saudi Government are co-operating actively in attempting to promote a more non-violent and modern-oriented version of Salafism.
The noble Lord said that there has been very little attempt to analyse this movement and its motivation. I can assure him that, since 2001, there have been a number of active attempts to analyse the nature of Salafism and the various movements that we are now facing. It is not the case that it is a matter entirely of Saudi leadership and drive; there are now indigenous forms of Salafism in a wide range of Muslim countries. Part of what is driving the growth of Salafism among the young is, very often, reaction to modernity and what are perceived as incursions by the West.
On the death penalty, torture and mistreatment we continue to raise our concerns with the Saudi Government. On Bahrain, we were very concerned but we understand that the Saudi troops who arrived in Bahrain under a Gulf protection treaty have not themselves been involved in human rights violations. We are doing everything we can to promote dialogue between the Bahraini regime and its Shia minority and others.
We have an honest relationship with Saudi Arabia—we are a critical friend. We all know that it is not always easy to be a critical friend. Her Majesty’s Government have critical friendships with a number of other Governments with very different circumstances; these range from Israel to Pakistan. Many of the Governments with whom we have these critical dialogues do not like the things that we say, but we continue to be honest and frank. We share inseparable and intertwined interests with the Saudis, and we do our best to build on our long-standing relationship.
We wish to encourage evolution rather than revolution. The aftermath of the revolution in Iran, which some at first hoped would lead to a more open and liberal society but which has led instead to a narrower, more authoritarian and theocratic regime, strengthens our view that evolution through reform is preferable to pushing for the sort of revolution which would lead to destabilising what is still a relatively stable regime.
We recognise the steps that the King has already taken to widen discussion of key social, political and human rights issues through the national dialogue initiative. Through our Arab partnership, we stand ready to work together with Saudi Arabia as partners in building and increasing citizen participation as the only way, we assure them, to ensure long-term stability and prosperity.
Welfare Reform Bill
(12 years, 10 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Bakewell
“Such amounts are to include an amount of earnings to be disregarded where a claimant has regular and substantial caring responsibilities.”
Baroness Bakewell
My Lords, this amendment seeks to make the lot of carers in our society, whose lives are often already difficult and sometimes miserable, less miserable than it would be if the Bill went ahead as proposed.
There are 6.4 million carers in the UK contributing an estimated £119 billion to the UK for the unpaid care that they provide. I reiterate those figures: 6.4 million carers saving the country £119 billion. What kind of lives do these people have? What kind of situation are they in that they are able to be so generous with their time and their care? They have a rough time. They face a precarious financial situation, with 72 per cent finding themselves worse off when becoming carers due to the combined pressures of reduced earnings, a low level of benefits and the costs associated with living with someone with a disability. A Carers UK survey of over 1,700 carers found that 74 per cent were struggling to pay essential utility bills, 52 per cent were cutting back on their own food to cope, 66 per cent were using their own income earned from very modest jobs to pay for care for the person they were caring for, and 54 per cent were in debt as a result. It is worth saying that people do not choose to be carers; somewhere along the line life has been unkind to them and they are making the very best of it in the interests of us all.
The amendment seeks to help those carers who wish to make their income more secure by taking part in some paid work. It would ensure that when universal credit was calculated, carers would be allowed to keep more of their earnings than those without such responsibilities in recognition of the additional barriers that they face in combining work and care. It is welcome that the Government have decided to keep the carers’ allowance out of the universal credit. That is to the good. It is also welcome that the additional support given to those in short-hours jobs under the universal credit scheme will help to make work pay for some carers. However, it is not clear why the Government do not recognise, with a specific disregard within universal credit, the particular difficulties for carers in holding down a job.
Currently, individuals in receipt of income support are eligible for a £20 a week earnings disregard. That is not a fortune. They are allowed to earn £20 a week before their benefit starts to be withdrawn. The Government have announced that there will be specific disregards for couples, single people, lone parents and disabled people, and they have stated that, taken together with the universal credit taper, these will leave those four groups in low-paying jobs significantly better off than under the current system. However, for some reason this does not apply to single carers, who currently have access to a £20 disregard in income support through the receipt of the carer premium but would be able to access only the basic single person disregard of around £13.50 a week under universal credit. This could leave carers who are juggling work and care over £200 a year worse off because their benefits would be withdrawn earlier.
It does not sound much, does it—£200 a year? What difference could that make? Let me tell your Lordships what difference that would make, and let me repeat that this difference could affect a large number of the 6.4 million carers who are saving the country £119 billion a year in unpaid care. They are the ones who will suffer worse than they already do—carers living on their own, those who do not have children and those who are caring for a disabled parent who is not considered part of their household for the purposes of universal credit. All those groups would be made deliberately worse off than they already are. This group includes those who look after a disabled or elderly friend or poor relative who does not live with them and those who look after, for example, an adult disabled child who lives with them but, because of the rules of universal credit, is not seen as part of their household.
Carers UK estimates that this is likely to affect up to 50,000 carers, leaving them worse off in work and breaking the promise of universal credit to make work pay. These carers did not choose the life that has rolled out before them. They did not make choices about jobs and opportunities. They did not make choices; they were faced with someone they love in a disabled and needful situation. Out of the love they bear them they have made the sacrifice of careers and opportunities to earn as other people earn, in order to give free of their love and to provide care to those in their family. As Carers UK put it, nearly three-quarters of carers on benefits are women. On top of the additional likelihood of childcare responsibilities and difficulties in accessing replacement social care, thereby reducing the financial return of work for women who are able to work for only a few hours alongside caring, this will act to further distance female carers from the workplace.
Carers UK gives the following case study of someone who would be affected by these measures. This is an example. Janet is 55, single and cares for her son Michael, who is 30. Michael is severely autistic, has multiple health conditions and needs constant support. He receives disability living allowance and Janet receives the carer premium to income support for caring for him. Several years ago Michael started going to a specialist day centre for one day a week. Janet has been able to start working for a few hours, earning £20 a week as a cleaner, while Michael is at the day centre. With the income support earnings disregard Janet’s benefits are unaffected by her earnings. However, under universal credit, because she would be eligible only for the basic single person’s earnings disregard, as Michael is not considered to be in the same benefit household as Janet even though they live together, this would mean that after the first £13.50 of earnings, Janet’s earnings would be tapered away at the 65 per cent taper. For £20 of earnings she would be £15.78 better off. Compared to her situation on income support, Janet would be £4.22 a week—£219.44 a year—worse off in work. Is this a situation that people can be proud of—that we should be penalising someone who is giving so much free labour to the country? Janet is unable to increase her working hours because additional day centres are not available and buying replacement specialist domiciliary care costs over £15 an hour, so that would actually leave Janet worse off.
Janet is trapped. She does not have any options—oh, but she does have an option: she could give up doing her caring and put the person for whom she cares into care. She could say, “This is enough. My contribution is not recognised. I am worn out and finding the stress of looking after someone disabled too much. I am going to give up, and someone else can cope. I am going to get a job and make my way of life more comfortable”. What percentage of 6.4 million carers might make such a decision? What would it cost the state if they all abandoned their role as carers? They already do not believe that they get much sympathy from society at large, but moves like this would alienate them still further. The Government should estimate what the cost would be if even a small percentage of 6.4 million carers gave up their role. I beg to move.
Baroness Pitkeathley
My Lords, I support this amendment, to which my name is also attached. Because of the scheduling of business in your Lordships’ House this is the first opportunity I have had to speak on the Welfare Reform Bill, but I know that many, indeed most, in the carers’ movement owe a huge debt of gratitude to the noble Baronesses and noble Lords who have been speaking throughout Committee stage.
The amendment proposed so ably and passionately by my noble friend seeks to ensure that the universal credit does not put up a further barrier for those people who want to combine caring with work. Given that the aim of the universal credit is to support people into work, it seems wrong to reduce the work incentives for one of the groups for which that support is most needed.
I agree with the Minister’s aim to encourage carers to combine paid work with their caring. Let us think of the reasons why we want to do that. First, it would increase their income; we have already heard that caring takes place in poverty. Secondly, if carers are not in work, they build up poverty for themselves in future through the reduction in their pension contributions. Thirdly, and perhaps most significantly, being in a paid job helps carers with the stress, which is often very great, of their caring role. It enables them to maintain social contact and skills and to have a bit of respite from the caring situation. So we want to help carers stay in work as long as possible.
We know, however, that carers already face significant barriers to work. According to research commissioned by Carers UK and the DWP for carers’ rights day in 2009, some 1 million carers—that is around one in six of the figure that we have heard of 6 million carers—have given up work or reduced their working hours in order to remain as carers. A major barrier is the availability of suitable replacement care. In a separate survey, over 40 per cent of carers who gave up work did so due to a lack of sufficiently reliable or flexible services. A similar number, 41 per cent, said that they would rather be in paid work but services available do not make a job possible. In addition to that, for those who are able to juggle work and care, stress and poor health are common. Nearly half of the respondents to a survey of working carers for Employers for Carers and Carers UK indicated that their work had been negatively affected by caring and that they felt tired, stressed and anxious. Employees with heavy caring responsibilities are two to three times more likely than those without caring responsibilities to be in poor health. For these reasons, carers are just the sort of claimants to be working a few hours a week in low-paid work. We estimate that 50,000 of them might be affected by this change.
I know that the Minister wants to encourage carers to start working more than a few hours, but because of the other issues I have mentioned, for many carers a small or even a tiny increase in working hours is impossible. Because the Government argue elsewhere in the Bill that increasing earnings disregards will incentivise work, it seems inconsistent here to suggest that reducing the carers disregard will encourage additional work. I hope the Minister will agree that there is no logic to discouraging carers from juggling paid work with caring as long as they can and leaving them worse off than they are. I very much support the amendment.
Baroness Lister of Burtersett
My Lords, I am not going to add to the very powerful case that has already been made by my noble friends Lady Bakewell and Lady Pitkeathley. I simply wanted to seek some clarification of what was said in Committee, when a number of us put the case for a carers disregard, and the Minister said in his reply:
“Rather than going through the complexity of the separate disregard route, we have provided an additional element that is included in the gross amount of the universal credit for carers. That is a change from carer’s allowance”.—[Official Report, 1/11/11; col. GC 443.]
I am rather confused by this, because it seemed to me that it was muddling up carer’s allowance—a very important benefit, which some of us would like to see higher than it is at present—and the support provided to carers through means tested benefits such as income support.
Because I worry about my memory for the intricacies of social security I did not challenge the Minister at that point, but afterwards I sought guidance from Carers UK. It, too, was very confused by what the Minister said, and wondered whether or not the Minister—I hate to say this—was perhaps confusing carer’s allowance and means tested support for carers. Because the position is not changing, I do not see how the removal of a disregard can be justified on the basis of what happens with carer’s allowance. Universal credit is not replacing carer’s allowance. There is an element in means tested benefits for carers that will continue, but it is nothing to do with whether there is a disregard or not. It wondered whether the Minister is promising a higher premium for carers under universal credit. That would be excellent news if it were the case, but I rather doubt it. Could the Minister perhaps clarify what he meant in Committee, because it did not seem to me that it was answering the kind of case that has been made by my noble friends; namely, why is it that carers are the only group to lose the disregard that they currently have?
Baroness Howe of Idlicote
I hope noble Lords will forgive me; I was a few minutes late in coming in, so I missed a little bit of what the noble Baroness, Lady Bakewell, said. As I was listening I wondered to what extent more carers would or could be encouraged to be carers if in fact such a situation as she was proposing existed. Perhaps I am looking at this in a slightly disorganised way, but if there is an answer to my question, I would like to know it.
Baroness Hayter of Kentish Town
My Lords, I know that the whole House recognises the important contribution that carers make, and that all will endorse the case made by my noble friends Lady Bakewell and Lady Pitkeathley. Both noble Baronesses know this field intimately—the former from her involvement with an ageing population, with all its aches and pains, and the latter from her sterling work with carers over so many years. Nobody can gainsay their experience in this field. This amendment in their names is a true acknowledgment of the work of all carers, whether for the young, the old, the sick or the disabled.
We know that the Minister has considered the needs of carers, and we welcome the announcement this afternoon—just minutes before this Report stage started, so it just hit the promised timescale—that caring for people receiving both a higher and lower daily living rate under the new personal independence payment will qualify for the carer’s allowance.
However, as yet we have absolutely no idea as to the threshold of disability that will place someone into PIP, nor do we know who will take the hit of the 20 per cent cut—a cut of one-fifth of all such payments—that the Government intend to make. Will fewer people be placed in PIP than into the current two higher rats of DLA? We similarly do not know whether carers themselves are safe from cuts. Indeed, it is noticeable, as was impressed on us today by the Joint Committee on Human Right in its scrutiny of this Bill, that the Government’s impact assessment makes absolutely no mention of the impact of some of the Bill’s changes on carers, even when the impact will be very significant. That is so too for those who might lose their DLA under the new PIP thresholds. Not only would they lose that income but would become subject to the benefit cap.
We must all understand the anxiety, even fear, that some are experiencing by this uncertainty over their future. We also do not know how the Minister intends to deal with carers under the new rules to impose in-work conditionality on universal credit claimants. Although some carers will fall into the no-conditionality group, those who do not may be asked to increase either their hours or their earnings. Although flexibility has been promised, it is not clear how that will work.
Finally, many carers look set to be hit by the benefit cap. Those who are caring for a DLA and, I presume, PIP recipient who lives in the same household will be exempt from the £500 a week benefit cap. But those who care for someone who lives independently—perhaps an adult or a child, as we have heard, or an elderly relative—will see the carers’ allowance, which recognises this responsibility, hit by the cap. If the carer is single, this means that their benefit to include their rent even in London will be capped at £350 despite their reduced ability to earn by virtue of their caring responsibilities.
We will discuss the various ways in which that cap is unfair at a later stage of the Bill but in our discussions of carers today, we surely need to remember that the desire to support carers is not always translated into reality in the detail of this Bill. When we debated this amendment in Committee, the Minister said that only a few carers would be made worse off by the lack of a disregard; that is, those working between two and five hours a week. But it is exactly those short-hour jobs that universal credit was intended to enable. It is precisely carers who are most likely to need these mini-jobs as they fit in with their caring responsibilities. Many people, perhaps 50,000, will be affected if the Government reject this amendment. They are people who want to work and who care.
In another case described by Carers UK, a 45 year-old man who lives and cares for his 65 year-old father who has dementia has had to give up work because the father needs 24/7 care and he has to be there. His sister has her own family and does not live close. She travels to look after their father for an afternoon and evening a week, which enables the son to go out to work. He can earn a little to supplement his income support. At the moment, if he earns £18 his benefits are not affected because of the £20 a week disregard, as has been mentioned. But, under universal credit, without this amendment and the earnings disregard, he would have only the basic disregard of £13.50, which is for everyone. There will be no special disregard for carers. After that, his benefits will taper away. He would keep only just over £15 of his earnings, compared with £18 now. That sum is serious money for someone living on benefits. We must remind ourselves that that person is living on benefits only to save the state a fortune should it have to care for the father at home.
To make use of the more generous taper in universal credit, or to overcome the loss of this reduced disregard, the son would have to work increased hours. However, he cannot do this. His sister cannot stay any longer and there is no one else to be with his father. It is a catch 22: he is receiving no recognition that his position as a carer restricts his employment potential. The whole thrust of universal credit, which we support, is to make work pay. This amendment seeks to do just that for carers, and thus has the support of this side of the House.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
My Lords, we take the position of carers very seriously and, as the noble Baroness, Lady Hayter, pointed out, today I was very pleased to write a letter, as I had promised, about how the passporting arrangements from PIP would go in and how all of PIP passports into carer’s allowance. I have to apologise—I promised that letter three days before the first day of Report and I think that I am three days late. I hope my apology will be accepted. There was informal information going out, and so it was not too much of a surprise.
The noble Baroness, Lady Lister, asked me whether I was confused. This is an important point, because I sat and worked very hard on this element of carer’s allowance. Two things are happening here. The caring community—the carers—are very keen to have an allowance which is not means-tested, and which recognises their effort and work. I understand that. It is not a question of means-testing it. However, there is a cliff off which the whole allowance falls away, when the carers earn a certain amount. Clearly, that undermines considerably their incentive to work. Therefore, as we were refining the structure for carers, we looked to create, essentially, an additional element in universal credit on top of carer’s allowance, which in practice does not involve a cliff fall in the same way. It is probably easier for me to send a letter on this. I need to clarify this, particularly if the carers’ organisations are confused, as the noble Baroness has said. However, the structure is designed to get rid of these awkward “drop offs” and to be smoother. In fact, noble Lords will be shocked to know that I found a bit of money to put into the system to allow that. If I am not getting credit for that—and I need it—I shall try to earn it by writing a letter spelling out how that has worked.
Lord Knight of Weymouth
I am terribly grateful to the Minister. Could he tell us where he found the money?
Lord Freud
Finding money is a black art. I need say no more. If I were to reveal any more, it would just rebound negatively on me in every direction. Anyway, that is what has happened. I shall try to spell that out in a letter to the noble Baroness, Lady Bakewell. It is vital that the earnings disregards in universal credit are simpler than those in the current system, in order to achieve the core aim of making the system clear both to claimants and to administrators.
The earnings disregards in universal credit for carers who are in a couple, lone parents or themselves disabled will be more generous than the disregards in the current benefit system, thus enhancing work incentives for the great majority. As we discussed in Grand Committee, I have sent examples to the noble Baroness, Lady Hollis, and more widely, which clearly demonstrate the substantial gains at most earnings levels. I am deeply impressed by the example cited by the noble Baroness, Lady Bakewell, which got to within 3p of the worst possible point. There is a narrow band of between two and five hours where the absolute maximum you could lose is £4.25 a week. I think that the example used by the noble Baroness was £4.22, so she nearly hit it on the nose. I do not know how she managed to miss it by 3p. But the structure means that as you move up, there are some substantial gains. If you move off the small area of two to five hours, there are some big gains. At eight hours of work a week, a single carer would be over £5 a week better off under universal credit, and at 12 hours they would be nearly £15 better off. That is real money, worth £780 over a year.
It may be that the effect of the system is to drive people off the four-hour rate to the six-hour rate. I do not accept that the number of people in that narrow bracket is 50,000. It simply is not that figure and I do not think there is any reliable estimate of what the number is.
Baroness Hayter of Kentish Town
If the noble Lord has no idea of how many people are involved, but thinks that the number is less than 50,000, surely he cannot know how much it would cost, and therefore this may be another small amount of money. If the number is small, it cannot cost much to give these people an extra £4 a week.
Lord Freud
This is not directly a money matter; it is about the structure and the simplicity of the system. When you are changing from an inchoate system, which is what we have now, there are patches where people are a little less well off than they would have been, and that is why we have transitional protection. As you move to a simple, clean structure, there are problems in doing that, and that is what we are trying to address. By definition, it is not possible to overhaul and simplify a system and keep all the existing rules. Existing claimants will not lose because of the transitional protection, so those who have built their lives around a four-hour week will not lose by this, although within the structure there will be a drive to encourage people to do a little more.
I hope that noble Lords understand what we are trying to do here. I know that there is general support for universal credit, but we must maintain something that is tangibly more simple. With that explanation of why the Government cannot support this amendment, I would urge the noble Baroness to withdraw it.
Baroness Bakewell
My Lords, I thank the Minister for his response. I have only one or two points to make. The noble Lord challenged the figure of 50,000. It came from Carers UK, which is perhaps our most authoritative body when it comes to delivering data like this. I acknowledge completely that the system needs simplifying and that we want simplicity in the system, but you can have simplicity at different levels. You can have simplicity operating at the rock bottom of the ladder of pay or at a more generous level of pay. One relevant issue about this four-hour working borderline with this tiny slither of people—it is quite a large slither—is that we are an aging population. More and more carers are themselves old. A lot of people in their 60s care for people in their 80s. People in their 60s looking after someone disabled are quite likely to be eligible for something like four hours work a week. That may be all that they can manage themselves. Often you have those who are already ailing or slightly disabled looking after 90 year-old relations. This issue about hours and the flexibility really calls on the Government to examine and deal with that little niche. To that extent, I am disappointed but I beg leave to withdraw the amendment.
Baroness Drake
“( ) Regulations may specify that the pension contributions of single, or either of joint claimants, are to be disregarded when calculating either earned or unearned income.”
Baroness Drake
My Lords, I shall speak to Amendment 11 as well. Amendment 7 would allow pension contributions made by claimants to be disregarded in full when assessing their income for calculating entitlement to universal credit. Some 100 per cent of the value of pension contributions is deducted from income that is brought into account for calculating entitlement to tax credit. This amendment would allow that arrangement to continue under universal credit. Sadly, the Government have stated that in future only 50 per cent of pension contributions will be deducted from income when calculating entitlement. That is a mean measure. The Government state that they will save £200 million a year but this should be set against the near £30 billion saving from accelerating the increase in the state pension age to 66 and, to use the Chancellor’s words, the saving of a staggering £59 billion from accelerating the increase in the state pension age from 66 to 67. Those are very big numbers in comparison.
Pension reform was intended to strike a new deal between the state and the citizen, whereby: people work longer and the state pension rises; the state pension would be a flat rate to provide a firm foundation for pension saving; and private pension savings would increase through automatic enrolment into a workplace pension with an employer contribution. Those three elements are inseparable or the settlement becomes unfair to ordinary, hard-working people. The Government are accelerating the increase in the state pension age to reflect increasing longevity and to secure public expenditure savings of many billions, but they are backtracking—I stress, backtracking—on the pension saving and the incentive to save for ordinary, hard-working people. That is not fair. It is not a fair deal for the citizen and it breaks the consensus of the way forward.
The Government have suspended the introduction of auto-enrolment for workers in firms with fewer than 50 employees. They have delayed by at least a year—to 2017—the date by which workers will have access to the full 3 per cent employer contribution and tax relief. They have this mean measure of reducing to 50 per cent from 100 per cent the amount of any pension contributions disregarded from the assessment of income for universal credit. This will all hit responsible, hard-working people on modest incomes in receipt of universal credit who try to save for a pension.
It was very clear from official analyses that the way in which pension contributions were treated under the tax credit system was part of the incentive to save and the payback on every pound saved by low-to-moderate income earners. It provides an increase on their savings of up to a third because of the incentive-to-save effect. The Minister argued in Committee that it is necessary to take a balanced approach to the disregard of pension contributions as not all taxpayers who do not claim benefits have the advantage of a private or occupational pension scheme. However, with the introduction of auto-enrolment, it is the Government’s intention that they will all have access to a workplace pension; so that argument will not hold.
The Minister argues that the disregard for pension contributions is an area in which tax credits have been excessively generous. That is not a great message to send out to decent, hard-working people who play by the rules and are trying to save for a pension, and not one borne out by the facts. It also ignores the billions given in higher-rate tax relief—around £10 billion—to pension savings by higher-income earners. Universal credit is intended to encourage responsible behaviour. Policies to deliver an efficient benefits system and policies to enable pension saving by responsible people are not alternatives. This is a short-sighted measure, which withdraws valuable support to the incentive to save for a pension from responsible, hard-working people on lower incomes. This mean little measure should be set against the billions of savings from accelerating the state pension age. I really hope that I can persuade the Minister to reflect and reconsider this change in the treatment of pension contributions, and perhaps even to deploy his black arts again.
The purpose of Amendment 11 is to provide for regulation to allow for an additional amount in universal credit where a claimant is over the state pension age. Pension credit is targeted at low-income pensioners, to help them live above the poverty line. Currently couples can claim pension credit as long as one partner has reached the qualifying age. The effect of this Bill is to prevent pension credit claims in the future from couples where one partner is under that qualifying age. The couple will have to claim universal credit and be subject to conditionality. The impact of this change will be significant for many lower-income, older couples going forward. First, it may impact their income. I recognise that mixed-age couples, where one or both have earnings from work, can benefit from the system of universal credit due to the more generous income disregards and tapers, but there will be a range of possible outcomes depending on a couple’s circumstances, which will mean many being worse off.
Mixed-age couples claiming universal credit in the future could receive incomes that are £100 or more lower than under the current system. They may lose other sources of support—cold weather payments, help with health costs, warm home discount, and more. Standard payments under universal credit are just £105.95 for a couple. In contrast, the pension credit guarantee rate for a couple is £209.70 a week, and £137.35 for a single person. Without provision through regulation for additional support within universal credit where one partner is older, a pensioner could have a higher income living alone and claiming pension credit than receiving universal credit as a couple.
Secondly, it will impact their savings. The way the capital rules work under universal credit means that a pensioner with a low income and modest savings who has a younger partner could be excluded from pension credit and forced out of universal credit, or face a steep withdrawal of benefit. That is hardly the action to be taken for some who is about to commence living through their old age. Furthermore, it can impact their housing benefit. There are to be no exemptions to the size criteria for the receipt of housing benefit from April 2013, other than when the claimant or partner is over state pension credit age. However, the Government now want to reflect their decision, where one member of a couple is a pensioner and the other is of working age, on the housing benefit rules. That means that, unless mixed-age couples are protected from the restrictions, a pensioner with a younger partner could find their benefit cut if they have one or more spare rooms; if they live alone, the restrictions will not apply. It is a really peculiar form of couple’s penalty, which disproportionately hits older and poorer couples and their relationships. Should couples stay together or separate in future? That will be a real debate under the application of universal credit.
Pensioners in poorer households will have significantly different experiences because of differences in the age of their partners. It may not be unreasonable to expect some young partners who are able to work to be subject to work-related conditions and sanctions when they do not fulfil requirements, but why is it necessary to provide further incentives by restricting benefit to the pensioner partner in that couple? As to the thousands of grandparents who may not be receiving a carer’s allowance but who are looking after their grandchildren, do they lack incentive or responsibility? Should they be the ones who have their allowances cut significantly below that which they would receive under pension credit? Again, the Government show no affection for our grandmothers. So where neither partner is able to work or is unsuccessful in finding work, their basic level of benefit under universal credit should reflect the fact that one of them is a pensioner. As to the treatment of carers and disabled persons in mixed-age couples, it is not clear how the system will work in all circumstances and many will be worse off under state pension credit.
Pension credit is a very effective policy—it is probably the only effective policy—for targeting pensioner poverty. The effect of the change will impact a group of low-income older people, which is why, as proposed in this amendment, the regulations should allow for an additional payment under universal credit where a claimant is above state pension age. I beg to move.
Lord McKenzie of Luton
My Lords, I propose to speak briefly in support of Amendments 7 and 11 as my noble friend is a renowned expert on pensions and it is never possible to add much, if anything, of substance to what she has said. My noble friend has made an important point about the breaking of the consensus on encouraging saving. On the one hand she instanced the huge sums that will be garnered by the changes to the state pension age and, at the other end of the spectrum, the deferral of automatic enrolment and this measure, which changes the basis on which pension contributions are treated in universal credit compared with working tax credits.
I wish to probe again a point in respect of the 50 per cent only deduction, which I do not think that the Minister dealt with significantly in Committee. Universal credit will obviously be based on real-time information—the information which will flow from employer returns to HMRC, and the data flowing back. That data will be based on 100 per cent deductions of occupational pension schemes, so if universal credit is going to rely on a 50 per cent deduction only, there is going to have to be some other process or loop which is not naturally there in the data flows at the moment. I think the Minister instanced that this was something that was being commissioned. I can imagine the work involved in seeing how that might be derived. I hope that he will take the opportunity tonight to be a little clearer on that. Quite apart from the principle of the measure which my noble friend has raised, I raise the actual practicalities of implementing it. When we looked at recasting the child maintenance system, which we shall come on to on a subsequent Report day, what was determined and debated in your Lordships' Chamber was that it would be based on gross income data provided by HMRC but net of 100 per cent of employee occupational pension contributions, as that was the natural flow of data. I would be grateful if the Minister could deal with the practicalities of that point.
Amendment 11 seeks to ensure that measures can be put in place to address one of the significant couple penalties introduced by the Welfare Reform Bill—a penalty that means that a couple, where one person is over and one under pension age, could lose as much as £100 a week compared to the current system. This sits alongside the couple penalty introduced by the limiting of contributory employment and support allowance and that introduced by the benefit cap in a series of changes that, perhaps unintentionally, mean that couples may see themselves as better off financially, as my noble friend has said, living apart.
The policy change being introduced means that whereas at present couples where one member has reached pension age are eligible for pension credit, following the coming into effect of the Bill, if one member of the couple is below pension age, they will be forced to claim universal credit until both of them qualify for a pension. We have been given no specific figures on the impact of this policy although we know that there are currently 93,000 couples where one person is over and one under pension age. Not all of these will be affected as those who are already receiving pension credit will be able to remain on that benefit. However, as the revised impact assessment points out, those who are affected are likely to be hit hard, stating that the heaviest notional losers for couples without children,
“are in cases where one member is of working-age and one is currently eligible for Pension Credit”.
Perhaps the Minister can tell us how many people he estimates that this change will affect and how much they stand to lose. Bringing pensioners within the orbit of universal credit will also mean, as my noble friend has said, subjecting them to many of the new and harsher rules that accompany the new benefit. The Minister has not yet told us how he expects pensioners to be affected by the new capital limits that will be introduced for universal credit, and also for pension credit when housing benefit is abolished. As Age UK points out, nearly 150,000 people claiming pension credit have more than £16,000 in savings. In the future those with a low income but over £16,000 of savings who have a younger partner will not only be excluded from pension credit, they will not be entitled to universal credit due to their savings.
The Government have argued that the purpose of the policy change is to ensure that working-age claimants are subject to working-age conditionality and asked to look for work. However, many of the working-age claimants who fall into this group and have an older partner may in fact be subject to no work-related requirements—a matter we discussed in Committee—whether because they are caring for someone or have a disability themselves. These couples too will see a £100 a week hit on their income as well as potentially losing other support linked to pension credits, such as the winter fuel payments.
The Government have said that this is not a savings measure so there should be some flexibility within the system to ensure that couples in this situation have their income protected. This policy has not been consulted on and we have not received sufficient information fully to assess who it will affect and how. Therefore, the amendment proposed by my noble friend would give the Government the flexibility to look again at the options in this area and to ensure that couples in this situation do not lose out.
Lord Freud
My Lords, Amendment 7 would take a power to disregard the full amount of any pension contributions from the assessment of both single and joint claimants’ income. As I made clear at Committee, this is a matter for regulations and we do not need any additional regulation-making powers. Our stated policy since the Universal Credit White Paper has been a 50 per cent disregard of pension contributions, in line with the current approach in the benefit system, as opposed to the tax credit system. We are taking the middle path between supporting pension saving for people on low incomes and fairness to the taxpayer. It is important to remember that many taxpayers who do not claim benefits do not have occupational or private pensions. A full disregard of all pension contributions would cost an additional £200 million a year.
Noble Lords have characterised our approach as worsening the position when compared with tax credits, where there is a full disregard of pension contributions. However, this oversimplifies the comparison between universal credit, based on net income after tax, and tax credits, based on gross taxable income. Frankly, we are not comparing like with like. We also need to take account of the new employer contribution duties to be introduced from next year. We previously said that when taking account of employer contributions, the cost to an individual for each pound of pension would be 34 pence. Since Committee, we have looked again at these figures and I should like to take this opportunity to correct that one, which we have now calculated out at 38 pence. I apologise for that mistake, which I hope is not too substantial directionally.
If one considers putting £1 today into a pension, the cost in the tax credit system is 39 pence. One can see that that represents 61 pence pure universal credit. However, if one combines that universal credit calculation with the employer pension duties, the figure reduces to the 38 pence that I talked of. The middle way, when considered in combination with what else is happening, is actually not quite as mean or extreme as the noble Baroness, whose expertise I acknowledge and have suffered from in the past, might imply. If you are outside the system entirely, it costs you 80 pence for every £1 of savings. That provides a balance on why we have come to that figure.
Picking up the question from the noble Lord, Lord McKenzie, on the RTI feed, I can inform him that payroll data do identify pension contributions from salary. They have to do that because the pension contributions will be subject to national insurance. That is the feed element we will use to make this calculation, and we are currently working out the detail. Taking all these factors into account, we believe that a 50 per cent disregard is an appropriate balance between encouraging saving and a fair deal for the taxpayer.
Amendment 11 would amend the regulation-making power in Clause 9 relating to the standard allowance. This would allow us to provide an exception for couples with one member above state pension age by excluding the standard allowance from the calculation of their universal credit award. As I explained in Grand Committee, the Government have taken the view that couples with one member above and one under the qualifying age for state pension credit should claim universal credit. Following that debate, I sent the noble Baroness, Lady Hollis, and other noble Lords some worked examples showing the entitlement of different couples on the two benefits. They showed that there will be a range of outcomes depending on individual circumstances. We calculated that more than 90,000 couples with one partner under pension credit age are on pension credit—that was in answer to the noble Lord, Lord McKenzie. However, transitional protection will apply, and all those couples currently on pension credit will stay on it while circumstances remain the same.
We are not convinced that it is necessary to have special rules or different amounts of standard allowance where one partner is above pension age. Universal credit also includes additional amounts for those people who have limited capability for work or regular and substantial caring responsibilities for a severely disabled person. It remains the Government’s view that people of working age who are able to work should prepare for or look for work in return for receiving support from the state. The earnings rules and disregards in universal credit provide a clear incentive to do so. I therefore urge the noble Baroness, Lady Drake, to withdraw her amendment.
Baroness Drake
My Lords, I thank the Minister for that reply. I do not think that I am supposed to say that any more—I think the new rules say that I can dispense with that—but I will remain courteous and thank the Minister. Or is that only in Questions? I am trying to keep up.
I will deal with each of his points. First, I did not know that there was a middle path. That is a whole new concept to me. I thought the issue was that in-work benefits would support the incentive to pay for, say, low-to-moderate-income people by disregarding pension contributions. As to the concept of a middle path, I do not know what the merit of that middle path is other than the opportunity to save some public expenditure. I have never seen it publicly debated that it makes a big or meaningful contribution to the pension settlement.
I accept that we may not strictly be comparing like with like, because I am trying to lift from a set of rules under one benefits system to the one that will apply under universal credit, but I do not think that I heard the Minister say that the £200 million saving from this change had varied. As I understand it, the Government are still expecting to save £200 million. However the cloth is cut. That means that, for a particular group of low-to-moderate-income people, £200 million will be taken out of their incentive to save. At the same time, there will be a staggering increase in public expenditure reduction of £59 billion from accelerating the state pension age. I do not want to debate the acceleration of the state pension age—I am sure that there will be opportunities to do that.
Lord Freud
If I could just clarify this for the noble Baroness, £200 million is the extra cost of doing this, not the money taken out.
Baroness Drake
I am sorry. I thought that the Minister said that they would save £200 million from this change.
Lord Freud
No, no, my Lords, I said that the cost of this amendment would be an extra £200 million.
Baroness Drake
I will have to go back and check on the figures. None the less, there will be a saving from this which has the effect of reducing the incentive to save for this group of people. As they will not be able to access the benefit of auto-enrolment until later, the contribution from their employer will come online more slowly, and therefore their ability and incentive to save will be reduced.
The Minister said that he sent a series of worked examples to my noble friend Lady Hollis that produced a range of outcomes. That is my whole point—some people can lose quite significantly under these new rules. It is not clear as to what the rules would be in all circumstances. Although there are transitional protections, that simply means that there will be a cliff-edge impact on another group of older couples when these rules come in. This will continue to add to the couple penalty and to the differing treatment of older couples depending on when precisely their qualifying age falls or on the age of their partner. That is why the amendment sought to give the Government flexibility as to how to address the problem of people suffering a significant drop in income. It did not of itself say that in all circumstances a partner should not be subject to work conditionality. However, I beg leave to withdraw my amendment.
Lord McKenzie of Luton
“(5) Regulations are to specify the amount of tariff income from capital that is to be included as unearned income, including specifying different amounts for in work and out of work claimants.”
Lord McKenzie of Luton
This amendment raises the question of the amount of capital that will be taken into account when calculating universal credit. The Government's proposals at present are that those with savings of above £16,000 will not be able to claim universal credit and that capital above £6,000 will attract a tariff income of £1 for every £250 above the £6,000 floor.
Our amendment seeks to enable differential treatment of capital for those in and out of work, reflecting the current arrangements, under which the universal credit rules replicate current benefit arrangements. Tax credits claimed by those who are in work have no limits on capital nor assume any tariff income, but obviously take account of the actual or taxable investment income. The Minister has talked about universal credit encouraging a culture change in how people manage their money. We fear that the current proposals will discourage low-income people in work from accumulating savings and building assets.
This is not just our view about the capital rules, but that of one of the main architects of universal credit, the Centre for Social Justice. As Deven Ghelani, a senior researcher at the centre said when giving evidence to the House of Commons Bill Committee:
“It is fundamentally a disincentive to save. I think that the savings limit for people who are not working and are on benefits has been £16,000 for I am not sure how many years, but certainly rather a lot”.
It is nice to know that the centre has such precision.
“The limit has not been uprated for at least a decade I would say, and possibly a lot longer. By extending that to people who are working, people who get close to that threshold might suddenly realise that it does not pay to save and that there are perhaps other things that they should be doing with the money, whereas saving is in itself a protection against dependency”.—[Official Report, Commons, Welfare Reform Bill Committee; 22/3/11, col. 19.]
The proposals will act as a barrier for those on modest incomes who are trying to save, whether for a house, for their children's tuition fees for university or against the possibility that they may lose their job and need a cushion of income to fall back on. The Government propose to encourage more tenants to buy their council accommodation. Under these proposals, tenants who wish to save to take up the offer will first be penalised for those savings and then, if they are able to build up their savings sufficiently, barred from accessing universal credit at all. That does not seem to be in line with the Government’s message that, under universal credit, work will always pay.
The department’s briefing assessment of the changes suggests that there will be between 100,000 and 200,000 people who will lose eligibility to universal credit altogether because of the new capital cut-off rules, and that between 200,000 and 300,000 people will have reduced eligibility due to the rules on tariff income. The briefing note states:
“People with substantial savings or other capital clearly have sufficient income to meet their needs”.
It is right that they should draw on these resources before looking to the taxpayer for support, particularly as many taxpayers themselves have savings well below these limits, but the vast majority of low-income workers who are claiming universal credit will also be taxpayers, and their taxes will be used to support other incentives to save in the tax system, including, as we discussed in Committee, the considerable tax relief on pension contributions.
The current proposals punish those on low incomes who are working and trying to build assets for the future. The amendment proposes a modest change to enable differential treatment of capital for those in and out of work. When we debated the issues in Committee, the Minister told us that these are not necessarily issues of principle; they are issues of affordability and the envelope that we have to introduce universal credit. By accepting the amendments, he could signal that he recognises the importance of enabling those who move into paid work to begin to build up their assets and avoid sending the wrong message that those on low incomes should not expect to be able to save. I beg to move.
Lord Freud
My Lords, Amendment 8 would require different tariff incomes to be set against the capital of people in and out of work. I understand the noble Lord’s desire to continue to treat the capital of people in work differently in order to encourage low-income workers to save. I remind the noble Lord and the House that I was able to provide somewhat more precision than the IFS on the last time the figure of £6,000 or £16,000 was raised. To be absolutely honest, I forget the date that I provided in Committee, but it is now on the record in Hansard. The date was 2006. I am pleased to keep just marginally ahead of the IFS every now and then.
This amendment is at odds with our shared ambition for a simpler system. It is also, as it stands, unaffordable. We estimate that it would cost around an additional £70 million a year to remove tariff income for everyone in work with capital up to £16,000. We estimate that it would cost an additional £30 million a year to set tariff income at £1 for every £500, instead of the current £1 for every £250, for everyone in work with capital up to £16,000. That gives you a context of cost. This is a cost matter, as I made clear in Committee. There are quite a lot of nice-to-dos in the universal credit; I would like to do many of them myself, I assure you, but we have got to focus on where we can put the scarce resource and where it is absolutely needed. The debate around that is based on the fact that we estimate that around 80 per cent of those claimants who will have a higher benefit entitlement under universal credit will be in the bottom two income quintiles. Now is not the time to do anything other than to retain the existing threshold of £6,000.
The shocking reality is that if you go to the median household with a working-age adult in it the figure of savings in that household is £300. That is across all working ages in the FRS. That is a shocking figure, but it just shows you where the debate is against the reality of what is happening in this community group. I am using median not average here, because I think it is a better figure.
That is the issue. We have limited resources; we need to focus them on those least able to support themselves. I hope that explains why we are where we are with these particular figures for tariff income and capital and why we cannot support this amendment, and I ask the noble Lord to withdraw it.
Lord McKenzie of Luton
My Lords, I am grateful to the Minister for his response. I should just say that it was not the IFS which gave that evidence; it was the Centre for Social Justice, which I thought was an organisation quite close to the noble Lord’s heart.
Lord Freud
I should have known I would never be ahead of the IFS; I apologise to it.
Lord McKenzie of Luton
I understand the Minister’s response. It really reiterated what he said in Committee: this is an issue of affordability, not necessarily one of principle. On that basis I do not see why he could not accept the amendment—it would signal the Government’s intent on this—but given the hour I beg leave to withdraw the amendment.