House of Commons

Tuesday 13th December 2011 Commons Chamber

Tuesday 13 December 2011

The House met at half-past Two o’clock

Prayers

Tuesday 13th December 2011 Commons Chamber

[Mr Speaker in the Chair]

business before questions

London Local Authorities Bill [Lords] (By Order)

Further consideration of Bill, as amended, opposed and deferred until Tuesday 20 December (Standing Order No.20).

London Local Authorities and Transport for London (No.2) Bill [Lords] (By Order)

Transport for London (Supplemental Toll Provisions) Bill [Lords] (By Order)

Second Readings opposed and deferred until Tuesday 20 December (Standing Order No.20).

Oral Answers to Questions

Tuesday 13th December 2011 Commons Chamber

The Secretary of State was asked—

[Ian Swales (Redcar) (LD)]

1. What assessment he has made of whether there should be a compulsory retirement age for coroners.

[The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly)]

The Coroners and Justice Act 2009 requires a senior coroner, area coroner or assistant coroner to vacate office on reaching the age of 70. The Government intend to implement this provision as soon as is practicable, although the retirement age will not apply to those in post immediately before the change comes into effect.

[Ian Swales]

I thank the Minister for that answer. The Teesside coroner is used as a bad example nationally by charities such as Cardiac Risk in the Young and the Royal British Legion. It is led by 81-year-old Michael Sheffield. Will the Minister meet a delegation of local MPs to discuss how the performance of the Teesside service could be improved?

[Mr Djanogly]

I am happy to meet to discuss the Teesside service, but not the coroner per se. The Lord Chief Justice and the Lord Chancellor are aware of the concerns that have been expressed about the Teesside coroner and have asked the Office for Judicial Complaints to investigate. I cannot comment any further while that investigation is ongoing.

[Robert Flello (Stoke-on-Trent South) (Lab)]

The Secretary of State’s change of heart, perhaps encouraged by the other place, about the creation of a chief coroner is most welcome, and I look forward to hearing that a chief coroner has been appointed. However, there are still major concerns about the repeal of section 40 and other sections in the Coroners and Justice Act 2009 that provide for the new appeal process. I understand the Secretary of State’s concerns about costs, but all that bereaved families are looking for is a commitment to bring forward a proper appeal process. The Teesside coroner is a very good example of the fact that the current system of judicial appeal is time consuming, costly and damaging. Will the Minister reconsider the decision about the appeal process?

[Mr Djanogly]

We take the view that it is better to focus on raising the standards of coroners’ inquiries and inquests to ensure that bereaved families are satisfied with the process without the need for new appeal rights and the resulting expensive litigation.

[Mr Virendra Sharma (Ealing, Southall) (Lab)]

2. What steps his Department is taking to ensure access to justice for vulnerable people.

[The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly)]

Access to justice is a wide concept, encompassing general advice provision, access to courts, as well as privately and publicly funded advice and representation. In respect of legal aid, the provisions of the Legal Aid, Sentencing and Punishment of Offenders Bill are designed to ensure that resources are targeted at the most serious cases, in which public funding is justified, protecting fundamental rights to access to justice.

[Mr Virendra Sharma]

I thank the Minister for that answer.

“The Legal Aid, Sentencing and Punishment of Offenders Bill will have a damaging effect on access unless substantial amendments are made in the House of Lords.”

Those are not my words, but those of the esteemed Cross Bencher, Lord Pannick. Is the Secretary of State concerned by the opposition shown by Lord Pannick and others—especially given the enormous time pressure on business in the other place—and will he therefore save considerable time and effort by announcing now to the House his intention to reverse his damaging proposals on legal aid, which risk undermining access to justice for the most vulnerable?

[Mr Djanogly]

We do recognise that there is a need to provide a suitable level of protection for the most vulnerable. Reforms will ensure that legal aid is targeted at those who need it most, for the most serious cases in which legal advice or representation is justified. Areas that remain in scope, such as domestic violence, asylum, property repossession and protecting children, demonstrate our commitment to that.

[Mr Gary Streeter (South West Devon) (Con)]

Thank you, Mr Speaker—I shall be brief. Is not one of the most important aspects of access to justice the time it takes to get a decision? Are there not still too many unnecessary adjournments in our court process, and what is the Minister doing about that?

[Mr Djanogly]

With my honourable colleagues on the criminal side of the Department, I am looking at many areas in which to speed up court processes. Indeed, the speed of the magistrates court process has increased dramatically since we came into power.

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

That is all well and good but what the Minister does not say is that people who need debt, welfare benefit or housing advice will now be out of scope, as he well knows, and that that will have a knock-on cost. This is simply short-termism. On the definition of domestic violence, he also knows that far more people will be litigating in person, which will also be a waste of money.

[Mr Djanogly]

I must put the right hon. Gentleman right: we are not ending debt advice or advice in some of the other areas he mentioned. In fact, we will still be spending some £50 million on social welfare advice.

[Sadiq Khan (Tooting) (Lab)]

Fifty-three peers of the 54 who spoke in the House of Lords on Second Reading of the Government’s flagship Legal Aid, Sentencing and Punishment of Offenders Bill expressed their worries about the Bill. They came from both sides of the political spectrum and many were among the country’s leading experts. Unlike their Liberal Democrat and Conservative counterparts in the House of Commons, they are not Whips’ fodder and will not be bought off by platitudes or the offer of jobs in government. What plans does the Minister have to address the concerns that they raised, or will there be no change from the Bill that left this House?

[Mr Djanogly]

The right hon. Gentleman mentions the fact that the Bill is currently going through the other place and will shortly head to Committee. Of course, the Government, being a listening Government, and the Ministry of Justice, being a listening Ministry, will take onboard the concerns of noble Members in the other place and act accordingly.

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

3. When he expects to appoint a new Victims’ Commissioner.

[The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke)]

I am extremely grateful to Louise Casey for the work she did as Victims’ Commissioner and the advice that I received from her while she was in office. We are considering the future of the role and intend to make an announcement in due course.

[Chi Onwurah]

In 2005, teenager Jenny Nicholl was murdered. Her murderer was convicted in 2008 but her body has never been found. Her mother, a constituent of mine, tells me that she received little support while suffering aggressive media intrusion and insinuations. Murder victims’ families have no formal status in court, are offered no protection from the media and, on average, incur costs of £113,000. Mrs Nicholl found the Victims’ Commissioner a strong supporter and champion. To whom should she turn now?

[Mr Clarke]

When Louise Casey was Victims’ Commissioner, she advised me strongly on giving more resources to the support of bereaved families, and I thought that her advice that we should target our support to victims and their families was very sensible. We are working on that and will continue to do so. I propose to publish a consultation document on a general victims package covering a wide range of areas, and I can assure the hon. Lady that in all our work we intend to give even greater emphasis to the importance of looking after victims, as well as getting justice in their cases.

[Tony Lloyd (Manchester Central) (Lab)]

The outgoing Victims’ Commissioner, Louise Casey, referred specifically to the needs of children as witnesses and victims in the criminal justice system. How will the Justice Secretary work with the new Victims’ Commissioner to ensure that proper protections are given to vulnerable children in that situation?

[Mr Clarke]

I can assure the hon. Gentleman that I will do that. We have made great progress in this country in recent years, including under the previous Government, on giving proper support to witnesses who have to appear in court. Obviously, it is most important to look after the most vulnerable witnesses, including children, who can be intimidated by the experience. We are looking at what we have in place now, and we hope to strengthen the arrangements.

[Jo Swinson (East Dunbartonshire) (LD)]

4. What steps he is taking to tackle first-time drug users in prisons; and if he will make a statement.

[The Parliamentary Under-Secretary of State for Justice (Mr Crispin Blunt)]

Drug misuse in prisons has declined by 71% since the introduction of mandatory drug testing in 1996. The latest results from the surveying prisoner crime reduction study suggest that 7% to 8% of prisoners had their fist use of heroin in custody, while 81% had used drugs in the year before custody. The steps to tackle drug use include drug-free wings and drug-recovery wings; procuring a networked intelligence system; a comprehensive corruption-prevention strategy; new technology to tackle the availability of drugs and phones in prisons; and building on existing prison security measures.

[Jo Swinson]

I thank the Minister for that answer, but the fact that any prisoners first try heroin while in prison is shocking. The very concept of “drug-free wings” shows just how bad the situation has become. Will he undertake a thorough review of the supply routes by which drugs are getting into prisons—via visitors, staff or the mail system—and act to cut them off, so that all our prisons can be drug-free?

[Mr Blunt]

The hon. Lady is right, although the position has been historically improving over the past 16 years or so, and one should remember that prisons are mini-communities, with a high volume of legitimate communication with, and access to, the outside world. Prisons cannot be hermetically sealed, and she drew attention to the many different routes through which drugs are smuggled. However, we of course examine all the routes into prison, and act to interdict and address them with the resources available to us, including new technology.

[Mr David Hanson (Delyn) (Lab)]

The Minister will know that funding for drug treatment in prisons under the Labour Government rose by 15 times, to £112 million in the year they left office. Will he guarantee that that resource will be maintained throughout the spending review? Will he also tell us how many body orifice scanners are now in place, following the Labour Government’s commitment to put one in every prison?

[Mr Blunt]

I hope that it will be of some comfort to the right hon. Gentleman to know that that budget is now the responsibility of the Department of Health. As it is not under the same financial constraints as the Ministry of Justice—we are having to play our part in addressing the economic mess that we inherited from the last Administration—that budget will be sustained.

[Nick de Bois (Enfield North) (Con)]

5. What recent discussions he has had with representatives of employers and training organisations to develop his policy on rehabilitation.

[Margot James (Stourbridge) (Con)]

9. What recent representations he has received on promoting links between employers and prisons for the purposes of improving skills among prisoners and increasing employment opportunities on release.

[The Minister for Policing and Criminal Justice (Nick Herbert)]

Promoting links with employers and business is central to our plans to make prisoners work and improve rehabilitation. We have established a business advisory group, which meets regularly to advise Ministers and officials on how to increase both work in prisons and private sector involvement.

[Nick de Bois]

Will the Minister extend the good practice shown by the National Grid young offender programme? About 1,000 graduates from the scheme have been released from prison into real jobs, which has led to single-figure reoffending rates.

[Nick Herbert]

I share my hon. Friend’s enthusiasm for that programme. The National Grid young offender programme is a really good model of effective engagement with the private sector. I would particularly commend Dr Mary Harris, its director, who has driven it energetically. The programme has recently been extended to two prisons in Wales and one in the west midlands, and we would like to do more with it.

[Margot James]

It is well known that employment is the most significant determinant of effective rehabilitation. Will my right hon. Friend update the House on his plans to incentivise Jobcentre Plus, Work programme providers, further education colleges and local employers to get involved and maximise the number of job opportunities available to ex-offenders?

[Nick Herbert]

My hon. Friend is absolutely right. Finding a job on release plays a significant part in reducing the reoffending of prisoners. That is why we have worked with the Department for Work and Pensions to ensure that prisoners being released who are eligible for jobseeker’s allowance will be mandated immediately on to the Work programme. We are also re-commissioning learning and skills in prisons. One of the main objectives is to ensure that learning focuses far more on employability, and our employers forum will encourage employers of all sizes.

[Ann Clwyd (Cynon Valley) (Lab)]

A constituent of mine aged 60 was offered a job recently as a handyman in a care home and his Criminal Records Bureau check was called for. It showed that he stole a bag of coal in 1983, 28 years ago, and the job offer was withdrawn. I would allege that this had no relevance at all to the job that he was offered, so will the Government look again at the use of CRB checks?

[Nick Herbert]

We are reviewing the Rehabilitation of Offenders Act 1974. We have to strike the right balance between protecting the public and ensuring that those whom we want to resettle in society and get the right kind of work are able to do so.

[Heidi Alexander (Lewisham East) (Lab)]

Earlier today I visited Bronzefield women’s prison in Surrey with my hon. Friend the Member for Darlington (Mrs Chapman). We observed a financial literacy course run by Principles in Finance. What plans does the Minister have to increase the amount of financial training available in prisons, given the link between debt and reoffending?

[Nick Herbert]

I mentioned that we have re-commissioned the provision for skills with a focus on employability. That must be the right approach. It is important to address the causes of offending to establish whether this is one of them and to ensure that we have proper programmes of rehabilitation in prison that will support people on their release to enter the world of work and responsibility.

[Mike Crockart (Edinburgh West) (LD)]

Does the Minister agree that literacy is a key part of any rehabilitation strategy? Will he update us on what the Government are doing to tackle poor literacy, not only to help the future employment opportunities of those convicted, but to increase the prospects for work within prisons to be meaningful and transformative?

[Nick Herbert]

Again, this is an area where we seek to improve provision. There is, of course, a role here for the state, but, as I mentioned last time, there is a role for voluntary groups as well. I mentioned the excellent Toe By Toe scheme, which uses former offenders or prisoners to encourage literacy and to teach skills to others. There is a very high correlation between illiteracy and the learning difficulties of prisoners in our jails. We need to address those issues if prisoners are to have a chance of not reoffending on release.

[Kelvin Hopkins (Luton North) (Lab)]

6. When he expects to announce his proposals on the reform of probation services.

[The Parliamentary Under-Secretary of State for Justice (Mr Crispin Blunt)]

The first stage of our work to look at the future of probation services in England and Wales is nearing completion. This work requires careful consideration and has been taken forward with valuable input from trusts and other key probation stakeholders. For example, I met Probation Association chiefs last week and this morning I had meetings with the probation trade unions. We expect to announce our probation reform proposals alongside those for community sentences early in the new year, and we will then consult widely.

[Kelvin Hopkins]

Given that probation staff are experiencing major cuts in their budgets, will the Minister explain how he expects them to do more with less? Are not Government policies going to cause serious damage to the probation service?

[Mr Blunt]

No, Government policies are going to improve the probation service. If the hon. Gentleman looked at the probation budget, he would see that the position of probation has been substantially protected relative to the demands being placed on the overall budget of the Ministry of Justice.

[Sir Alan Beith (Berwick-upon-Tweed) (LD)]

What is the Minister doing to make sure that probation officers’ work with prisoners is not undermined by prisoners being moved from prison to prison for no very good reason or for entirely administrative reasons?

[Mr Blunt]

We are trying to give the notion of prison clusters much greater prominence. The right hon. Gentleman will have seen that the OLASS—Offender Learning and Skills Service—review presages a situation in which prison clusters would procure education and skills training, and that should reflect the prisoner journey. We want to have a prison estate that is not under the enormous pressure it is under now—due to the terrible situation we inherited—so that we can get prisoner journeys from local prisons through to resettlement prisons, while both getting support from offender management and delivering programmes.

[Mrs Jenny Chapman (Darlington) (Lab)]

Justice Ministers give every impression of treating their Department as a policy adventure playground in which constant experiments in rhetoric lead to predictable U-turns and confusion. The probation service supervises some of the most dangerous individuals in our community and uncertainty now grows in this service, too, as the Minister decides whether to privatise all probation functions or just some of them. Does he consider any probation service functions, such as court reports, to be unsuitable for privatisation?

[Mr Blunt]

I am afraid that the hon. Lady will have to contain her impatience until we make a comprehensive statement—[Interruption.] The right hon. Member for Tooting (Sadiq Khan) intervenes from a sedentary position, but a proper statement will be made to this House early in the new year.

[Jessica Morden (Newport East) (Lab)]

7. What steps his Department is taking to support victims.

[The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke)]

In the current financial year, the Ministry of Justice is providing funding of approximately £50 million to voluntary sector organisations that support victims of crime. We intend to launch a consultation soon on proposals that will ensure that victims of crime are supported in the best way possible.

[Jessica Morden]

The anniversary of the terrorist attacks in Mumbai was on 26 November. In 2010 the innocent victims of overseas terrorism were led to believe that they would receive compensation, but they are still waiting. What is the Secretary of State doing to resolve the matter?

[Mr Clarke]

I will make announcements on what we propose to do for the victims of terrorism when we produce our package on victim support generally. We will certainly produce a package, and we will respect the previous Government’s proposal of an interim award for those injured in incidents such as that in Mumbai.

[Esther McVey (Wirral West) (Con)]

Delays to cases caused by defendants not appearing in court can be very distressing for victims. What guidance is given to the court to continue with the trial in the absence of the defendant?

[Mr Clarke]

This is the second reference in questions to delays in court, which cause immense inconvenience and sometimes considerable distress to witnesses and others, as well as to the victims of crime. We are looking urgently at how to improve the efficiency of the system and how best to proceed if people fail to co-operate. It is always possible to proceed with a trial in the absence of the defendant, but only once the judge is satisfied that the interests of justice will not be prejudiced. There is no point in starting a trial only for it to have to be started a week or two later when it is challenged.

[Mike Freer (Finchley and Golders Green) (Con)]

8. What steps he is taking to reform the role of bailiffs in commercial rent collections and repossessions; and if he will make a statement.

[The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly)]

The Government have given a commitment to provide more protection against aggressive bailiffs. Although there are no plans to reform the role of bailiffs in repossessions, the Government are considering replacing the existing common law right for a landlord to distrain for arrears of rent with a modified out-of- court regime for recovering rent of commercial premises. We will announce details of a full public consultation in due course.

[Mike Freer]

I thank the Minister for that answer. Will he confirm that the consultation will include representatives of landlords and not just those of tenants?

[Mr Djanogly]

Of course. It is vital that we ensure that our proposals for transforming bailiff action do not impose unreasonable burdens on business. To that end, we are undertaking further work to explore all the regulatory and non-regulatory options available.

[John Pugh (Southport) (LD)]

10. How many trials in magistrates courts in Merseyside were abandoned or deferred due to the non-appearance of either defendants or witnesses in the last year for which figures are available; and if he will make a statement.

[The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly)]

In the last 12 months—from July 2010 to June 2011—for which data are available, there were a total of 5,239 trials in magistrates courts in Merseyside. Of those, 615, or 12%, did not go ahead on the day due to the absence of a witness, while 151—3%—did not go ahead due to the absence of a defendant.

[John Pugh]

In recognising the problem, does the Minister think that it will be made worse by the closure of magistrates courts in places such as Southport, and will he monitor the situation?

[Mr Djanogly]

We are certainly monitoring the situation, and I do so virtually on a weekly basis. Since 2009, until closure, Southport courts sat on three days per week. The court utilisation figure prior to consultation on closure was 33%. Since the work was transferred to Bootle courts, the utilisation level of Bootle has increased from 49% to 68% for the month of October 2011.

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

rose—

[Mr Speaker]

Ulster is a little way away, but I am sure that it is not beyond the ingenuity of the hon. Gentleman to relate his supplementary to Merseyside.

[Dr McCrea]

Absolutely, Mr Speaker. Will the Minister tell us whether any figures are available on the cost to industry and individuals in Merseyside, when witnesses attend court proceedings only to be told later in the day that they can go home because the proceedings cannot go ahead?

[Mr Djanogly]

I cannot do so off the top of my head, but I will write to the hon. Gentleman. There might be good reasons for such occurrences, such as someone entering a guilty plea, as well as bad reasons. The situation is complicated.

[Karl Turner (Kingston upon Hull East) (Lab)]

11. What assessment his Department has made of the potential effects on women of planned changes to legal aid.

[Kate Green (Stretford and Urmston) (Lab)]

18. What assessment his Department has made of the potential effects on women of planned changes to legal aid.

[The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly)]

The Government published an equality impact assessment alongside our response to consultation, which laid out the best assessment of the effects on women of planned changes to legal aid. That recognised the potential for the reforms to impact on a greater proportion of women, alongside others featuring protected characteristics.

[Karl Turner]

There have been reports in the media that the Deputy Prime Minister is to announce a consultation on the definition of domestic violence. Will the Minister explain how it accords with the narrow definition in the Legal Aid, Sentencing and Punishment of Offenders Bill, which will exclude many women from the legal support that they need and will, I believe, put a number of them at serious risk?

[Mr Djanogly]

As the hon. Gentleman says, there is to be a consultation on domestic violence, although I believe that it will be undertaken by the Home Office rather than the Deputy Prime Minister. We will look carefully at the results of the consultation, but the definition of abuse in the Bill is broad and comprehensive, and includes mental as well as physical abuse.

[Kate Green]

What steps is the Minister taking to protect women who are victims of domestic violence from the risk of aggressive and unfair questioning in the courts by abusive partners, given the likelihood of an increase in the number of litigants appearing in person as a result of the legal aid cuts?

[Mr Djanogly]

I believe that some 50% of respondents are currently not represented through legal aid. As a consequence, the circumstances that the hon. Lady describes are common in our courts, and our judiciary are expert and accustomed to dealing with them when they arise.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

Most women, in particular, depend on legal aid cases when starting out in practice. As a non-practising advocate, may I ask my hon. Friend whether the changes will affect the number of women entering the profession, and whether it is likely that the early stages of legal aid cases will be replaced by mediation?

[Mr Djanogly]

We are certainly promoting mediation as an alternative to court. That is always to be recommended when it is appropriate, which I admit is not always the case. The impact on providers in terms of their sex varies according to the nature of the organisations involved and the nature of the work being undertaken, but there is no real difference between the impacts on male and female solicitor providers of either civil or criminal legal aid services.

[Mr David Nuttall (Bury North) (Con)]

Did the impact assessment also cover the potential effect of the legal aid changes on men?

[Mr Djanogly]

By implication, yes.

[Mr Andy Slaughter (Hammersmith) (Lab)]

The press were, of course, briefed on the domestic violence review before the House was. It was clearly stated at the weekend that the Deputy Prime Minister would undertake it, but perhaps he cannot be found now, which is why the Home Office will be in charge.

If the purpose of the review is to broaden the ambit of what constitutes domestic violence, why are the Department and the Secretary of State narrowing not just the definition but the evidential criteria, so that whether a woman is supported by a GP or hospital doctor or by a refuge, she will no longer be able to obtain legal aid?

[Mr Djanogly]

We have no intention of narrowing the definition, and we do not believe that the definition in the Bill does that. I can say, however, that our policy is to end legal aid for most private family law applications relating to, for instance, divorce, ancillary relief and child contact. The main exception is legal aid in domestic violence cases, which we are anxious to retain.

[John Mann (Bassetlaw) (Lab)]

12. What assessment he has made of the level of compliance by local authorities with the requirements of his Department on health and safety in cemeteries.

[The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly)]

Responsibility for health and safety in local authority cemeteries lies with the relevant council. The Department published guidance on the safety of burial ground memorials in 2009 and burial authorities have been encouraged to take account of it, but there are no plans to initiate individual assessments of compliance.

[John Mann]

The Minister says that there are “no plans”. Luckily, the new administration in Bassetlaw council has dug up the stakes that were put in by the last Conservative administration, at huge cost to the taxpayer. Why are the Government not sorting out the abuse of a change in the regulations that was made in 2009? Local authorities across the country are still doing nothing about it, much to the disgust of those who visit cemeteries.

[Mr Djanogly]

The hon. Gentleman’s expertise in this area is renowned, so perhaps I can write to him on the specifics of the cemetery in his constituency. I just point out to him that the Ministry of Justice has no responsibility for health and safety in local authority cemeteries.

[Mr Robert Buckland (South Swindon) (Con)]

13. If he will bring forward proposals to extend the power of the Attorney-General to refer unduly lenient sentences to the Court of Appeal for crimes aggravated by hostility towards disabled people.

[The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke)]

We have no plans to extend the Attorney-General’s powers in this field at present. However, as my hon. Friend will be aware, we are considering this issue carefully in formulating our response to the recommendations of the Equality and Human Rights Commission’s inquiry into disability-related harassment.

[Mr Buckland]

More work needs to be done to ensure that existing provisions allowing for longer sentences where offences are aggravated by disability hate are applied consistently. Would extending the Attorney-General’s powers of reference not help to establish greater consistency in sentencing?

[Mr Clarke]

I agree with my hon. Friend that this is an important area, because it is a particularly nasty element of crime when violence or something of that kind is provoked by hostility to a disabled person because of their disability. Sentencing guidelines already provide that this is an aggravating feature when someone is sentenced. Of course, if the Attorney-General uses his existing powers to appeal a lenient sentence, he can include cases where disability is a feature, for example, in an assault occasioning grievous bodily harm or something of that kind. But we are looking at the point again at the moment and I will bear my hon. Friend’s comments in mind.

[Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)]

Will the Justice Secretary consider introducing offences on disability hate crime and other hate crime, including incitement, along the lines of the legislation that rightly exists on racially aggravated crime?

[Mr Clarke]

That is an option. Of course, as I say, offences provoked by prejudice against disabled people are regarded as hate crimes and this is an aggravating feature in sentences, but we are examining the whole area. We have to make sure that we do not overcomplicate sentencing, because if we keep thinking of things that make the most serious offences even more serious, we threaten the consistency that has been described. However, the right hon. Gentleman makes an important point and we are reviewing this field in the light of the report we have received.

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

Will the Secretary of State examine the possibility of extending the concept of disability hate crime to include disability by association, thereby bringing the concept into line with the other measures in the Equality Act 2010? If he does not do that, cases such as that of Fiona Pilkington will not count as disability hate crime as she herself was not disabled.

[Mr Clarke]

I shall consider that point in the course of the work we are doing at the moment, but I do not want to encourage my hon. Friend too far because overcomplicating this does not necessarily help. What is important is that sentences should be allowed to reflect, in the most appropriate and consistent way, the disgust that the ordinary public feel when a crime is motivated by prejudice against a disabled person. It does make a crime even more serious than it would otherwise be.

[John Cryer (Leyton and Wanstead) (Lab)]

I agree with a lot of what the Secretary of State says, but not with his claim that this move would overcomplicate things. One single principle underpins all hate crime: the principle of intent. If that principle applies in respect of one group, does it not apply in respect of other groups, for example, racial groups or the victims of homophobic crime?

[Mr Clarke]

The hon. Gentleman is quite right to say that the intent of the offender makes for a particularly unpleasant version of whatever crime it is we are talking about. I will certainly consider the hon. Gentleman’s points, just as I have said I will those made by other hon. Members, in the course of seeing whether the law needs any further improvement, but I think that sentences do already reflect the fact that it is a serious aggravating feature of crime if prejudice against disabled people is involved.

[Christopher Pincher (Tamworth) (Con)]

14. What plans he has to permit the broadcasting of court proceedings.

[The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke)]

I am very clear that we must not allow our courts to become theatre; filming will be of judges’ remarks only. Victims, witnesses—wait a minute, wrong answer!

We are planning to legislate, as soon as parliamentary time allows, to remove the ban on cameras in courts, subject to certain safeguards, and we are working closely with the Lord Chief Justice on achieving this. Initially, we will allow judgments in the Court of Appeal to be broadcast for the first time, and will expand this to the Crown court in due course. We will not allow filming of juries, victims and witnesses under any circumstances.

If any supplementary question should resemble the point I have just replied to, I assure you, Mr Speaker, that I will use my own words in replying to it.

[Christopher Pincher]

I am grateful to my right hon. and learned Friend for both answers. I quite agree with him that justice, if it is to be seen to be done, must not be seen to be fun. Will he say how he intends to safeguard court officials and lawyers from unwanted attention?

[Mr Clarke]

I share all my hon. Friend’s reservations about going too far. The judge, when he gives a sentence or a judgment, is a public official performing a public function; his words can be quoted, he will be reported and there is no real reason why he should not be filmed. The other people involved, I think, need to be protected because, otherwise the whole nature of the proceedings will be changed, some people will be intimidated and some people’s behaviour will be affected.

[Chris Bryant (Rhondda) (Lab)]

I note that the Justice Secretary said that the words he used earlier were not his own, whereas these now are.

One thing that really upsets victims is when the defence lawyer, having already admitted guilt on behalf of his client and going to mitigating circumstances, suddenly launches into a major attack on the victim of the crime, thereby, I believe, abusing privilege. Will the Justice Secretary ensure that that is not available for public consumption?

[Mr Clarke]

If taken too far, that can be stopped. Of course the lawyer is entitled to put forward mitigation for his client after the plea, but I strongly disapprove, and I am glad the hon. Gentleman would too, of any attempt for this to be used for people to make allegations against the victims, for the defendant to make a theatrical display in the witness box, for the jurors’ reactions to evidence to be filmed or anything of that kind. We are talking about the judgments and what is said as part of his official duties by the judge and, at this stage, I am not contemplating going any further.

[David Wright (Telford) (Lab)]

15. What arrangements his Department has in place to manage any shortfall of prison places.

[The Parliamentary Under-Secretary of State for Justice (Mr Crispin Blunt)]

On Friday 9 December, the prison population was 88,070 against a capacity of 89,413 places, providing headroom of 1,343 places. There are sufficient places for those being remanded and sentenced to custody. We keep the prison population under careful review to ensure that there is always sufficient capacity to accommodate all those committed to custody by the courts.

[David Wright]

Under Labour, we saw 27,000 more places provided in prisons and a modernisation of the prison estate. According to the Department’s own figures, it looks as though the prison population will rise to somewhere around 95,000 over the next six years. Is it not a simple fact that the Government are not building enough prisons?

[Mr Blunt]

I recognise the figure of 96,000 as the projected prison population that we inherited on coming into office. As the hon. Gentleman will be aware, changes that this House has endorsed through the Legal Aid, Sentencing and Punishment of Offenders Bill, which is now in another place, will have an effect on that. In the end, all these numbers are estimates because it is our job to incarcerate those sent into custody by the courts. We will continue to do that, despite the evident frustration of the Opposition that we appear to be managing it rather more satisfactorily than they did.

[Philip Davies (Shipley) (Con)]

May I tell the Minister not to be ashamed of sending more criminals to prison? In fact, my constituents will judge him on the basis that more criminals are sent to prison, not on more criminals being released from prison.

[Mr Blunt]

I hope that my hon. Friend will ultimately judge us on the effect we have both on crime and reoffending figures. When people are in the justice system, the effect on them should be when they leave it they are less likely to offend than when they came in.

[Caroline Lucas (Brighton, Pavilion) (Green)]

16. What plans he has to use restorative justice to divert more children and young people away from the criminal justice system.

[The Minister for Policing and Criminal Justice (Nick Herbert)]

The proper goal should be to divert people from crime. When offending takes place, the criminal justice system should respond effectively, and we are keen to promote restorative justice to deliver better outcomes.

[Caroline Lucas]

I thank the Minister, but the issue is that the Government’s approaches to restorative justice for children are embedded in the youth justice system so they deal with children only once they are inside that system. Why are the Government not investing in diverting young people from the criminal justice system, for example by rolling out the very successful youth restorative disposal pilots?

[Nick Herbert]

We certainly want to make more use of restorative disposals, which can be valuable. They give greater victim satisfaction when the victim consents, and they can reduce reoffending. We have plans to announce more in relation to our neighbourhood justice proposals, which we will say more about at the beginning of next year. There have been many expressions of interest in that. The goal of the criminal justice system should be to deal with offending when it has taken place. I disagree with the contention that we should be diverting offenders from the criminal justice system. We should be diverting people from crime.

[Mr Philip Hollobone (Kettering) (Con)]

The police in Kettering spend a great deal of time checking compliance with overnight curfews issued to repeat juvenile offenders. This could be solved by tagging those people, but local magistrates tell the police that they are prevented from doing that by sentencing guidelines. Will the Minister go away and have a look at those guidelines?

[Nick Herbert]

Yes, I am happy to go away and look at them.

[Jeremy Corbyn (Islington North) (Lab)]

Does the Minister think that restorative justice and guiding people away from the criminal justice system would be a more appropriate way of dealing with the minority of young people who were peripherally involved in disturbances last August, rather than the large number of long sentences that have been handed out to them, with all the obvious consequences for them?

[Nick Herbert]

We do not see restorative justice as an alternative to the criminal justice system; we want to see it embedded in that system. The idea of offenders making amends to victims is a good one, but we have to remember that the figures show that three quarters of those brought before the courts in relation to the riots had previous convictions and that a quarter of them had been in prison before. Perhaps people were caught up in those riots, but a great number of those involved had been in trouble with the law before and we should remember that.

[Simon Wright (Norwich South) (LD)]

17. What recent representations he has received on securing justice for victims of road accidents.

[The Parliamentary Under-Secretary of State for Justice (Mr Crispin Blunt)]

Following calls from road safety groups, victims and their families and from right hon. and hon. Members, we have added a new offence of causing serious injury by dangerous driving, which is subject to a five-year maximum prison sentence, to the Legal Aid, Sentencing and Punishment of Offenders Bill, which is currently being considered in another place. Since then, we have not received any further representations.

[Simon Wright]

I thank the Minister for his response and welcome the measures he is taking. Does he agree that in order effectively to deliver justice to victims of road accidents, we need sentencing powers that reasonably and consistently reflect the too often appalling consequences of driving offences?

[Mr Blunt]

I agree with my hon. Friend and no doubt that is why the House agreed to add that measure to the Bill.

[Roberta Blackman-Woods (City of Durham) (Lab)]

19. When he expects to announce his proposals on the reform of probation services.

[The Parliamentary Under-Secretary of State for Justice (Mr Crispin Blunt)]

I refer the hon. Lady to the answer I gave earlier to the hon. Member for Luton North (Kelvin Hopkins).

[Roberta Blackman-Woods]

I am sure the Minister is aware that Durham Tees Valley probation trust has been assessed as the top-performing trust by the probation trust rating scheme. Indeed, it was considered to be exceptional. What guarantee will he give that the reform of probation services will enable the good practice from Durham Tees Valley to be rolled out across the country and enable its front-line services to be protected?

[Mr Blunt]

Perhaps it is not a complete coincidence that Mr Sebert Cox, the chairman of the Probation Association, is also the chairman of the Durham Tees Valley probation trust. I had the pleasure of discussing these issues with him last week. Like the hon. Member for Luton North, the hon. Lady will have to contain herself until we come forward with our proposals early in the new year.

[Kelvin Hopkins (Luton North) (Lab)]

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

[The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke)]

I recently launched a consultation on improving judicial diversity and appointments. The proposals include the following measures: first, looking to prefer the candidate from an under-represented background where candidates are essentially indistinguishable on merit; secondly, limiting fee-paid judges to three five-year terms; and, thirdly, introducing flexible working for the senior judiciary. Our aim is to deliver a judiciary that is reflective of our society, in which public confidence is enhanced and which retains its world-class quality.

[Kelvin Hopkins]

Given the recent mess that the Mayor of London made by using incorrect reoffending statistics, how can we be sure of the impact of payment-by-results models for probation if reoffending statistics are so unreliable?

[The Parliamentary Under-Secretary of State for Justice (Mr Crispin Blunt)]

The hon. Gentleman is being a little harsh on the Mayor of London, who is a keen supporter, as am I, of the Heron unit in Feltham, to which he was referring, which does extremely good work. The hon. Gentleman is right to underline the importance of getting proper research and analysis to inform payment by results so that we in the Ministry of Justice and the taxpayer end up paying for outputs that deliver and not simply for inputs, which is how the position has been characterised in the past.

[Margot James (Stourbridge) (Con)]

T2. Last month my right hon. and learned Friend prioritised the reform of the European Court of Human Rights during our chairmanship of the Council of Europe. Will he update the House on the steps that the Government are taking to restrain the Court’s influence over laws and customs that are properly the affair of member states?

[Mr Kenneth Clarke]

We have had the chairmanship of the Council of Europe since 7 November, and my right hon. Friend the Foreign Secretary and I have been seeking to move forward our agenda of reforming the Court in due course. Indeed, I will be lobbying two more Ministers tomorrow at a meeting of the Justice and Home Affairs Council. We are seeking to get the Court to concentrate on the most important cases which require some international jurisdiction to get rid of the huge arrears of cases clogging it up at the moment, most of which are inadmissible, and to make sure that the national courts and national Parliaments discharge their primary duty of delivering the convention.

[Sadiq Khan (Tooting) (Lab)]

Perhaps the Justice Secretary will advise his right hon. Friend the Foreign Secretary not to walk out of those talks while he is chairing them, if he does not get what he wants in the first few weeks. The Justice Secretary will be aware that the number of prison places is now just below 90,000. It has gone up over the past 18 months as a consequence of doubling up prisoners in prison cells and as the previous Government’s investment in capital programmes comes on stream. At the last Justice questions, the right hon. and learned Gentleman refused to answer my simple question about whether he thought prisoner numbers would go up, go down or stay the same, which is crucial for planning. He said that anybody who tried to predict prisoner numbers was “an idiot”. May I ask him another simple question? Perhaps he will rest the bluster and answer the question. Is he making plans for the usable operational capacity to go up, go down or stay the same during this Parliament?

[Mr Clarke]

The right hon. Gentleman’s remarks might best be addressed to Ministers in the previous Government, who obviously made some errors somewhere when they found that they had to release 80,000 prisoners before they had completed their sentence because they had no room for them on the prison estate. We are maintaining capacity to meet whatever demand we face from the courts. What I said last time, from which the right hon. Gentleman took the slightest extract, was that we respond to the decisions of the courts, we respond to the level of crime, and at present we have managed—[Hon. Members: “Have the numbers gone up or down?”] They have gone up. It is possible that with the prolonged recession and the long period of youth unemployment, there will be an increase in acquisitive crime. If that is the experience that we have in this country, we are responding to that. The Prison Service is responding very well to it at the moment, though of course we have to adjust the capacity of the estate.

[Sadiq Khan]

One way of reducing cost to the British taxpayer and at the same time increasing prison places is by removing the thousands of foreign prisoners in British prisons. May I refer to the European Union and events last week? Last week the European Union framework directive on prisoner transfers, negotiated and signed by the Labour Government, who stayed in the room and argued for our national interest and got a good agreement, came into force. Fifty prisoner transfer agreements with other nations were also negotiated by the last Government. When will the Justice Secretary be able to negotiate successfully this Government’s first prisoner transfer agreement, and how many nations does he expect the Government to sign agreements with during this Parliament, or is it the case that in addition to failing to repatriate any powers from Europe, this Government will fail to repatriate any foreign prisoners from this country?

[Mr Clarke]

Again, under the last Government the number of foreign prisoners in our jails soared until the Government eventually managed to stabilise it. We are maintaining roughly the same level of deportation of foreign prisoners who complete their sentence as was maintained under the previous Government. The new European arrangements have come into force, but not many states are yet ready to implement them. We are ready to implement them and they will provide some help. We are of course seeking to negotiate agreements with other Governments, but it requires the other Governments to be willing to undertake an obligation to take prisoners repatriated from this country.

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

T3. I am sure that we all welcome efforts to help reformed offenders back into work so that they can make a positive contribution to society, but one major barrier will always be the perception that employers hold of offenders. What changes does the Minister plan to make to the Rehabilitation of Offenders Act 2010 to overcome that barrier? As part of the process, will he also look at reducing the number of professions that are exempt from the disclosure limits on sentences?

[Mr Clarke]

We propose to make changes to the Rehabilitation of Offenders Act in order to make some offences spent earlier and to ensure that those who really have put their convictions behind them are not inhibited in getting fresh employment by having to disclose them. That is, I know, a Liberal Democrat enthusiasm, and my noble Friend Lord McNally will introduce amendments to the Legal Aid, Sentencing and Punishment of Offenders Bill, currently in the House of Lords, very shortly, setting out the details of what we propose.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

T6. The Justice Secretary will be aware that last Saturday was international human rights day. What is he doing to dispel the myths and misconceptions about the functioning of our Human Rights Act 1998?

[Mr Clarke]

I think there have been one or two colourful occasions when I have helped to dispel some of the misconceptions about the Human Rights Act, but I of course await the advice of the commission, which the Government have set up to advise us on those matters, so that we can decide whether a better way of complying with our obligations under the convention might be a Bill of Rights rather than the Human Rights Act. But there is no doubt: this Government will seek to abide by their full obligations under the convention on human rights.

[Nigel Mills (Amber Valley) (Con)]

T4. I am sure the Under-Secretary of State for Justice, my hon. Friend the Member for Huntingdon (Mr Djanogly), will join me in paying tribute to the work of the citizens advice bureau in Amber Valley. What progress has he made in his discussions with the Cabinet Office to secure future funding for such centres?

[The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly)]

The Cabinet Office is working on two fronts: first, in relation to an immediate payment to not-for-profit organisations; and, secondly, in relation to a longer-term proposal to look at transitional arrangements for those bodies. The MOJ supports both.

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

T8. How many EU foreign nationals currently in English and Welsh prisons does the Secretary of State expect to be repatriated to their country of origin in the next 12 months?

[Mr Blunt]

rose—

[Sadiq Khan]

Give us a figure.

[Mr Blunt]

The hon. Gentleman’s right hon. Friend may intervene from the Front Bench, but of course it is not possible to give a precise figure. The answer is that it will be as many as we can administratively deliver, and that it has to be done in co-operation with the receiving countries.

[Mr Laurence Robertson (Tewkesbury) (Con)]

T5. Given that murder is a crime different from any other, does the Secretary of State agree that the only appropriate punishment for the crime of murder is, indeed, a life sentence?

[Mr Kenneth Clarke]

The Government have no intention of reopening that question at the moment, and the vast majority of Members would not contemplate changing the current arrangements, as my hon. Friend has described.

[Mr Speaker]

Order. May I ask the Secretary of State to face the House? We all want to be the beneficiaries of his eloquence.

[Paul Goggins (Wythenshawe and Sale East) (Lab)]

What action does the Justice Secretary intend to take against offenders who receive a community sentence instead of a prison sentence and then use social media to boast that they have “got away with it”? I am thinking in particular of comments posted on Facebook yesterday by Ryan Girdlestone, who mocked the court within minutes of receiving a restraining order for his part in a vicious attack on my constituent, Bernard O’Donnell, a man in his 80th year. Is that not sheer contempt for the court, and should he not be held to account?

[Mr Clarke]

I think that we had both better take legal advice on whether such behaviour amounts to contempt of court, but one of the things we are addressing is how we can make community sentences more effective. They have to contain an element of genuine punishment in most cases, and also of course be rehabilitative, but such an example is very offensive to victims and to the general public. Community sentences as a whole, however, have a very good record of improving the reoffending rate and deterring some people from wanting to commit crime again.

[Andrew Rosindell (Romford) (Con)]

T7. The Lord Chancellor will know that one of his responsibilities is to take care of the British Crown dependencies, so perhaps he will explain why, even today, they are not represented in the Commonwealth, have no seats at the Commonwealth Heads of Government meeting and have no status at all. Will he take the matter forward to ensure that all our Crown dependencies are given the status and the recognition that they rightly deserve?

[Mr Clarke]

I shall take my hon. Friend’s comments on board and consult my right hon. Friends the Prime Minister and Foreign Secretary on whether the composition of the Commonwealth might be readdressed in that way. I assure my hon. Friend that my Department and my noble Friend Lord McNally take very seriously our responsibilities towards the Crown dependencies.

[Mr Brian H. Donohoe (Central Ayrshire) (Lab)]

Earlier this year, I put down a parliamentary question about employment tribunals. I was told that information on the length of time was not held centrally. Subsequently, I have discovered that there is such information, but that it does not show what the Government intend to do, which is to extend the period in which a person has the right to apply to an employment tribunal. Why do the Government continue to drive such a policy when they do not have that information and there is no right to it?

[Mr Djanogly]

I should say that that is a Department for Business, Innovation and Skills policy. However, I can tell the hon. Gentleman that the Government’s policy is that fewer people should go to tribunals in the first place. That is why we are encouraging people to go to ACAS in all circumstances before they go to the tribunal. That is what we have been consulting on.

[Robert Halfon (Harlow) (Con)]

Is my hon. Friend aware that 40% of prisoners were excluded from school? Will he work with the Department for Education and charities such as Catch22, based in my constituency, which do so much to get young people off the conveyor belt to crime?

[Mr Blunt]

My hon. Friend has alighted on a particular problem. We need a policy of social justice and early intervention that begins to address such problems before people in that situation turn to crime and end up in the criminal justice system.

[Paul Blomfield (Sheffield Central) (Lab)]

Last Friday, the Government equality unit announced that the Equality and Human Rights Commission funding for discrimination casework in law centres would end in March 2012 and that discussions would begin for replacement arrangements from April 2013. How do the Government plan to support victims of discrimination in the intervening 16 months and thereafter?

[Mr Djanogly]

I assure the hon. Gentleman that there are no proposals to end legal aid for discrimination cases. I think he is confusing that with the Government’s wider decision to delay the legal aid changes by six months.

[Tessa Munt (Wells) (LD)]

Sadly, James Herbert, a 25-year-old resident of Wells, died in police custody on 10 June 2010. The Independent Police Complaints Commission investigated and made six recommendations to the police. The coroner is holding an inquest and will consider a verdict of unlawful killing. Avon and Somerset police will have full access to taxpayer-funded legal representation, but James’s family have been refused such funding on the basis that they should use a local solicitor, should not need much preparation and can use their small savings to fund the case. Will the Secretary of State meet me to discuss the Legal Services Commission’s rejection of James’s parents’ application for help?

[Mr Speaker]

I am extraordinarily, almost inordinately, grateful to the hon. Lady, but before the Minister replies I am wondering whether proceedings are still active. The hon. Gentleman answering from the Treasury Bench might want to take account of that in framing any reply, with the due caution that we have come to expect of Ministers in general and lawyers in particular.

[Mr Djanogly]

Thank you, Mr Speaker. I will not comment on the case itself, but if my hon. Friend wants a general discussion on the legal aid attaching to the case, I will be happy to have it.

[Several hon. Members]

rose—

[Mr Speaker]

Order. I am sorry, but demand has exceeded supply. We now come to points of order.

Petition

Tuesday 13th December 2011 Commons Chamber

Joan Walley (Stoke-on-Trent North) (Lab)

- Hansard - - Excerpts

I should like to present a petition—[Interruption.]

Mr Speaker

- Hansard - - Excerpts

Order. May I appeal to Members who are leaving the Chamber to do so quickly and quietly so that the hon. Lady is afforded the courtesy that they would want to be extended to them?

Joan Walley

- Hansard - - Excerpts

I am most grateful, Mr Speaker, because this issue matters to me.

I should like to present a petition of more than 1,000 signatures from the residents of Kidsgrove, Staffordshire and others. In the run-up to Christmas, all Members will be aware of the important role of Royal Mail delivery offices, and that they are busier than ever at this time of year.

We are all aware of the value of the work of the postmen and women who deliver our mail, and of the importance of local delivery offices being close at hand. We want to ensure that Royal Mail liaises with local business and with Kidsgrove town council about any changes.

My petition therefore declares:

The Petition of residents of Kidsgrove, Staffordshire and others,

Declares that the Petitioners believe that the proposed relocation of the Royal Mail Delivery Office from Kidsgrove to Newcastle-under-Lyme, without consultation with local people and businesses, will result in a deterioration of local services, will be detrimental to local businesses, and cause an increased carbon footprint.

The Petitioners therefore request that the House of Commons urges the Government to take all possible steps to ensure that Royal Mail consults with local partners to improve delivery services in line with the commercial and domestic needs of the Kidsgrove, ST7 area and reviews the proposed relocation accordingly.

And the Petitioners remain, etc.

[P000988]

Points of Order

Tuesday 13th December 2011 Commons Chamber

15:33

[Jim Shannon (Strangford) (DUP)]

On 6 December, during questions to the Chancellor of the Exchequer, an hon. Member used language—confirmed by Hansard—that was unsavoury, blasphemous and, many feel, unparliamentary. I have spoken to you about that, Mr Speaker, and out of courtesy and good manners I have made the hon. Member aware of my intention to bring this matter to your attention. Can you, Mr Speaker, look at this matter, check Hansard and request that the hon. Gentleman withdraw the remarks and terminology used on that day?

[Mr Speaker]

I thank the hon. Gentleman for his courtesy in giving me notice of his intention to raise his point of order. Moderation and courtesy are, as we all know, required of the language used in the Chamber. I think that that courtesy should extend to sensitivity to and respect for the religious convictions and sensibilities of other Members and of all those listening to and reading our proceedings. It would be desirable for all hon. Members to bear that in mind, even—perhaps especially—in the heat of the moment. I intend to leave the matter there, but I hope that I have been helpful to both the hon. Gentleman and the House.

[Ian Austin (Dudley North) (Lab)]

On a point of order, Mr Speaker. I have let the hon. Member for Cannock Chase (Mr Burley) know that I would be raising in the House his participation in a dinner in France over the weekend before last at which guests toasted the Third Reich and chanted “Hitler, Hitler, Hitler.” These disgraceful events are now being investigated by the French judiciary. May I ask whether it is in order for the hon. Gentleman to retain his position as a member of the Government and for the Prime Minister to have taken no action?

[Mr Speaker]

I am grateful to the hon. Gentleman. I was not sure how the matter related to the authority of the Chair, but he has raised his concern about conduct outside the Chamber and placed his concern on the record. He will know that membership of the Government, at whatever level, is—perhaps I should say thankfully—not a matter for me.

[Huw Irranca-Davies (Ogmore) (Lab)]

On a point of order, Mr Speaker. I apologise for not giving you notice of my point of order, but in the past few minutes I have given a transcript to the Clerks so that they can give you suitable advice.

A very welcome improvement in the transparency of Government and Parliament has been the publication on departmental websites of the officially recorded meetings that Ministers have with organisations and individuals from the business, public and third sectors. That helps to give the public a feel for who has the ear of Ministers, for good or bad. While it is not a substitute for a proper overhaul of access through lobbyists, and neither does it preclude less official access, as we have seen in recent months, it has helped to some extent with transparency for the public and also for parliamentarians in this House.

Having turned my attention to the recent meetings of such groups and individuals over the past year or so, I am surprised to see a very wide divergence in approach between Departments. Some produce a rolling, live, updated register of meetings with Ministers; some produce a list retrospectively every three or six months; and some run for up to a year before being updated. Indeed, the No. 10 Downing street website has only this week updated its list of meetings, which had not been updated since March 2011. That is surely unconnected with the written parliamentary question that I tabled on 12 December.

Could you give any guidance, Mr Speaker, for Members about the frequency and timeliness of information on meetings with Ministers, as we need to know not only who has been meeting Ministers but to know that information in a timely manner, so that it is of use to us and to our constituents?

[Mr Speaker]

The short answer is no. I am an enthusiast for timeliness where Government replies to parliamentary questions are concerned; that is a legitimate preoccupation of the Chair. Timeliness in this context is not a matter for the Chair at all. However, Ministers will have heard the hon. Gentleman’s point. I am sure that he will be gratified that both the Leader of the House and the Deputy Leader of the House are on the Front Bench. I hope that that is helpful to him.

Bill Presented

Passive Flue Gas Systems (Strategy)

Presentation and First Reading (Standing Order No. 57)

Martin Caton, supported by Mr Don Foster, Heidi Alexander, Caroline Lucas, Lorely Burt, Kelvin Hopkins, Bob Russell and Joan Ruddock presented a Bill to require the Secretary of State to prepare and publish a strategy for the promotion of passive flue gas heat recovery systems; and for connected purposes.

Bill read the First time; to be read a Second time on Friday 20 January, and to be printed (Bill 261).

Public Festivals, Holidays and Commemorations

Tuesday 13th December 2011 Commons Chamber

Motion for leave to bring in a Bill (Standing Order No. 23)

15:38

[Andrew Rosindell (Romford) (Con)]

I beg to move,

That leave be given to bring in a Bill to require the Secretary of State annually to prepare and publish a list of the festivals and commemorations which will take place in the year 10 years after publication; to indicate which days will be designated as Bank or Public Holidays; to make provision to enable local communities to observe significant occasions; and for connected purposes.

The United Kingdom has a rich tradition of commemorations and festivals, all of which are rooted in the history of these islands, with origins that date back centuries. Indeed, the British Isles are steeped in tradition, and in every part of the kingdom special days in the calendar are celebrated with pride by people up and down the land, as they are in each and every one of Her Majesty’s realms, dependencies and territories.

British festivals, celebratory days and commemorations are often founded on the Christian heritage of these islands, such as Christmas day, Easter Sunday, Good Friday, Palm Sunday, Ascension day and Epiphany. Others are royal anniversaries such as the Queen’s birthday, accession day, coronation day, the Queen’s wedding anniversary and special events such as the diamond jubilee, a truly historic occasion that we will all celebrate with great pageantry in 2012. There are also state occasions such as the state opening of Parliament and trooping the colour.

Then, of course, there are those occasions dedicated to our proud military history, such as Trafalgar day, Waterloo day, D-day, VE-day, VJ-day, Battle of Britain day, Armistice day and of course Remembrance Sunday and Armed Forces day. I believe that Anzac day and Falkland Islands liberation day should also be commemorated with pride.

Our patron saint days of St George, St Andrew, St Patrick and St David have also become increasingly important to the peoples of all four countries in the United Kingdom. One has only to visit Romford market on 23 April to see just how significant that day has become as a celebration for the people of my constituency.

There are also days that have become established over the centuries to mark festivals, historic events or traditions, such as Guy Fawkes night, Burns night in Scotland, 12 July in Ulster, May day, St Valentine’s day, mothering Sunday, fathers’ day, Shrove Tuesday—otherwise known as pancake day—Hallowe’en, harvest festival, apple day, new year or Hogmanay and, of course, twelfth night.

Other religious festivals are also of great significance to millions of British people, such as Eid, Diwali and Hanukkah. There are also days to mark our nation’s international links, such as Commonwealth day, United Nations day and even, dare I say it, Europe day. All such days commemorate something significant in the life and history of our nation and island peoples and should be recognised—not all as public holidays, of course, but as days to mark something important to remember and learn about, especially in our schools.

My Bill would give Her Majesty’s Government the statutory authority to publish an official list of British public festivals, holidays and commemorations that would contain all those days and many more. Because only a small number of them would be designated official bank or public holidays, the list could be extensive and additional dates could be added from time to time.

The most important reason for maintaining such a comprehensive list would be to ensure that schools, churches, voluntary organisations, businesses, local authorities, community groups, charities and scout groups and other youth organisations could, if they chose, celebrate or commemorate those events with their own special activities. It would be a source of education, as school assemblies and classes throughout the country would learn about the history and traditions of our island nation.

We must never forget Her Majesty’s realms, dependencies and territories. They should also be recognised, so that we can mark the national days of the wider British family —Australia day, New Zealand’s Waitangi day, Canada day, Jamaica’s independence day, Channel Islands liberation day, the Isle of Man’s Tynwald day, Gibraltar’s national day, Bermuda day and Norfolk Island’s Bounty day, to name but a few. Indeed, I am sure the whole House would wish to send its warmest greetings to the people of St Lucia, who today celebrate their very own national day. That proud Caribbean nation, which remains one of Her Majesty’s realms, will celebrate with cultural events, dancing and a colourful festival of lights, with lanterns made by children in villages throughout the island.

New days could also be included on the official list, such as a flag day to honour our national flag—the Union Jack, as it is commonly known—or perhaps a Britannia day for all British people and for those descended from the people of these islands who wish to take pride in their British heritage.

Why not set aside one day of the year to celebrate the animal kingdom—a national animal day? It could be a Sunday, when the nation could celebrate the animal kingdom with pet services at churches and events to support animal and wildlife charities. In my constituency, I attend the annual horseman’s Sunday in the historic village of Havering-atte-Bower, where local horses and their owners attend an open air service on the village green and the local MP presents a rosette to every horse.

It is also important that communities have a chance to organise their own local festivals, so why should not each county, town or village designate a particular day of the year as their day to celebrate in whatever way they see fit, bringing everyone together in celebration of their local identity? Fine examples are St Piran’s day in Cornwall and Yorkshire day.

My Bill would also require the Government to prepare and publish a list of festivals and commemorations up to 10 years in advance, to give local communities the chance to plan and prepare fully for all our historic occasions, allowing everyone the opportunity to celebrate those events that are important to them, and to ensure that all anniversaries and traditions are recognised and kept alive rather than relegated to the pages of history books.

My Bill would also address the nature of our bank and public holidays. Under our current system, those that fall on a weekend are transferred to a day following the weekend. For example, this year, Monday 3 January was made a public holiday in lieu of new year’s day, which fell on Saturday 1 January. When that happens, rather than having a meaningless day off next to a weekend, we should use it for a day of greater significance. If we followed that rule for all existing bank holidays, I believe it would be possible to make St George’s day, St Andrew’s day and St David’s day annual public holidays without creating more days off overall, thus not harming businesses or the economy.

Next year is the diamond jubilee of Her Majesty the Queen. Across our nation, people will celebrate this great milestone in British history, and, God willing, in 2015 we will see Her Majesty reach the next landmark of her reign, when at 63 years and seven months on the throne, the Queen will become the longest ruling monarch in British history. Then, in 2022, I hope and pray that we will celebrate Her Majesty’s platinum jubilee, an anniversary that has never been reached by any British monarch.

We can all look forward to those celebrations, and my Bill will guarantee that all great British festivals, celebratory days and commemorations will always be recognised, celebrated, cherished and passed down to future generations.

I commend my Bill to the House.

15:48

[Paul Flynn (Newport West) (Lab)]

It is a pleasure to speak on St Lucia’s day, about which we did not know previously. The hon. Member for Romford (Andrew Rosindell) seems to suggest an incontinence of celebration—there is hardly a day of the year when we would not be obliged to celebrate something. However, absent from his speech was any suggestion of celebrating the reason for our existence in the Chamber. Why not have a democracy day? What about 4 November to celebrate the Chartists who died in my constituency, and others who died in many other places, for example, the Tolpuddle martyrs—all those who fought in the struggle to ensure that we have our free Parliament? They should be celebrated; they are far more significant than many of those the hon. Gentleman suggested.

Question put and agreed to.

Ordered,

That Andrew Rosindell, Henry Smith, Jacob Rees-Mogg, Nadhim Zahawi, Bob Russell, Simon Hart, Priti Patel, Thomas Docherty, Paul Uppal, Mr Angus Brendan MacNeil, Heather Wheeler and Ian Paisley present the Bill.

Andrew Rosindell accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 20 January 2012 and to be printed (Bill 262).

United Kingdom Statistics Authority

Tuesday 13th December 2011 Commons Chamber

[Relevant documents: The Sixteenth Report from the Public Administration Select Committee, on the Appointment of the Chair of the UK Statistics Authority, HC 910-I, the evidence taken before the Committee on 10 May, HC 910-i, the uncorrected evidence taken before the Committee on 6 December, HC 1634-i, and the written evidence reported by the Committee and ordered to be published on 10 May.]

15:50

[The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)]

I beg to move,

That this House endorses the nomination of Andrew Dilnot CBE for appointment as Chair of the United Kingdom Statistics Authority.

The motion is in my name and that of other Ministers. All Members will know that this appointment is a very important one. Without reliable and independent statistics it is impossible for the Government to make good policy, or for Parliament, the public and the media to hold us to account. The quality of statistics in the UK is recognised to be very high, and all Members will agree that it is essential that we maintain that position.

The UK Statistics Authority is at the heart of the system for maintaining the quality and credibility of official statistics. The Statistics and Registration Service Act 2007 established the authority to provide independent oversight of the statistical system. Therefore, the credibility of the chair is central to the whole operation of statistics in the UK.

Before moving to the specific candidate whom the Government have proposed for the post, I should like to acknowledge two very important contributions. First, the current chair, Sir Michael Scholar, has done outstanding work in establishing the authority as a credible and effective body, and I should like the House to record our thanks to him, not just for the work he has done since 2008, but for staying in post until the Government secured his replacement. I am sure other Members would like to place on record their thanks for and appreciation of his good work.

Secondly, I thank my hon. Friend the Member for Harwich and North Essex (Mr Jenkin) and the Select Committee on Public Administration under his chairmanship for their constructive engagement in the whole appointment process. In particular, I welcome the contribution that the hon. Member for Luton North (Kelvin Hopkins) was able to make as part of the panel that selected Andrew Dilnot.

Two particular qualities are essential for the chair of the UK Statistics Authority: independence and a passion for statistics. The Government believe that Andrew Dilnot is superbly qualified in both respects. First, on independence, Mr Dilnot has repeatedly demonstrated his commitment to independent analysis and a willingness to stand up for his views. Members on both sides of the House—to varying degrees, I suspect—will have appreciated, and been challenged by, the sharp but fair analysis that the Institute for Fiscal Studies published under his leadership of Budgets produced by Governments of all parties.

More recently, Mr Dilnot chaired the independent commission on long-term care, which tackled, as I am sure all hon. Members agree, one of the most important and intractable policy problems that we face with great rigour. I am sure he will display the same qualities if appointed to this new role. Although that might on occasion lead to discomfort among my ministerial colleagues, I hope that Members agree that Parliament and Government are best served by a credible, senior and independent advocate of the proper use of statistics.

Secondly, on Mr Dilnot’s passion for statistics, he is an acknowledged leader in the field of statistics and, frankly, is second to none in that regard. He is the author of what his biography assures me is a best-selling book about statistics, and was the founding presenter of BBC Radio 4’s series on statistics, “More or Less”. He is currently chair of the statistics users forum of the Royal Statistical Society, and has held a range of academic and advisory positions that require a detailed understanding of statistics and their use and misuse. In short, it is hard to imagine a better qualified candidate.

To sum up, it is essential that we appoint a new chair for the UK Statistics Authority who can continue to develop it as an effective guardian of good statistics. We believe that Andrew Dilnot is an excellent candidate. I welcome the report from the Public Administration Committee on his pre-appointment hearing, and its conclusion that he should be appointed. I therefore commend the appointment to the House.

15:55

[Michael Dugher (Barnsley East) (Lab)]

Before I turn to the nomination of Andrew Dilnot as chair of the UK Statistics Authority, I would like to echo the Minister’s tribute to the outgoing chair, Sir Michael Scholar. As the Public Administration Committee said in its report, published last week, his work over the last four years in establishing the UK Statistics Authority has been first class. He has performed his important public duties robustly and with complete impartiality.

The Statistics and Registration Service Act 2007 was designed to ensure that we had an independent statistics authority—one that can challenge the use of statistics where necessary. This was exemplified only recently when Sir Michael publicly rebuked the Mayor of London, Boris Johnson, for giving misleading figures to the Home Affairs Committee. I am sure that the whole House is also grateful to Sir Michael for agreeing to continue in the post for longer than was originally expected.

As the House is aware, the recruitment process for the post was significantly delayed when the Government’s initial preferred candidate withdrew. That followed serious, and in our view proper, scrutiny by the Public Administration Committee of whether individuals had the necessary personal independence to carry out the role. I would like to take this opportunity to praise members of the Committee from both sides of the House—in particular, the Chair of the Committee, the hon. Member for Harwich and North Essex (Mr Jenkin), and my hon. Friend the Member for Luton North (Kelvin Hopkins). The Committee has understood—and repeatedly stressed—the importance of independence in this post, and I believe its actions were consistent with the principle of parliamentary pre-appointment scrutiny.

I also welcome the greater role that the Committee played in deciding the make-up of the selection panel when the recruitment process was rerun, as well as in persuading the Government to recognise explicitly in the re-advertised job description that a key responsibility of the role is to ensure the independence of the authority. I hope the Government have learned from this process and will take the changes forward for all future appointments.

In respect of Andrew Dilnot’s professional competence, I agree with the Committee’s report that his extensive experience makes him eminently suitable for the role of chair of the UK Statistics Authority. As the Minister has said, Andrew Dilnot has had a distinguished career, most recently at Oxford university and in chairing the commission on the funding of care and support. He also headed up the Institute for Fiscal Studies for more than a decade. Indeed, this experience should stand him in particularly good stead. As we saw after the Chancellor’s autumn statement, the IFS is famously an organisation that is not afraid of criticising Ministers’ use of figures. I am therefore both satisfied—and indeed rather hopeful—that Mr Dilnot will bring the same kind of robustness when challenging the present Government’s continued use of statistics.

Throughout the pre-appointment hearing, Mr Dilnot expressed differing views from the Government on a wide range of issues, which is always encouraging. Those issues include the reduction of the pre-release period. It is also worth noting that when he was questioned about the Government’s happiness index, which costs the taxpayer £2 million a year, he said that it was “really rather silly” and “a pile of nonsense”. It appears that the candidate has fine commonsense in addition to independence of mind.

The post involves the significant responsibility of promoting and safeguarding the production and publication of official figures that serve the public good. Mr Dilnot has already made it clear how “absolutely vital” it is to have consistency in how the Government produce their figures. Labour Members agree that to make the most of our data we must be able to compare information over significant periods of time. This is why, of late, we have been concerned about some public statements from members of the Government about possibly changing the methodology used in producing certain statistics—for example, how child poverty is measured. The fact that child poverty is increasing in a way that undoubtedly shames the Government is no reason to alter how it is measured.

The appointment of a new chair of the board of the UK Statistics Authority is an extremely important one. We need a candidate who can maintain the code of practice for official statistics and ensure that Government figures are produced and presented to the highest standards of independence and integrity. We share the view of the Government and the Public Administration Select Committee that in Mr Dilnot we have a candidate who can rise to meet that challenge.

16:00

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

I am grateful for the support of the official Opposition for this appointment, although I wondered whether the hon. Member for Barnsley East (Michael Dugher) was going to declare an interest during his remarks. He might have forgotten—it is a failing of us all, I suppose—but if he looks at the inside cover of the report from which he quoted, he will see that he is still a member of the Public Administration Committee. He has very honourably absented himself ever since he joined Labour’s Front-Bench team, but I hope that he will involve his party in putting forward a new nominee for the Committee, because it would be of great service to the Committee and the House. I make no personal criticism of him whatsoever.

When he appeared before my Committee last week for his pre-appointment hearing, Andrew Dilnot was invited by the hon. Member for Newport West (Paul Flynn) to reflect on a statement that he made in 2007 during the passage of the Statistics and Registration Service Act 2007. Andrew Dilnot confirmed that he still held the view that he held then: that the passage of the 2007 Act, which set up the UK Statistics Authority, was

“a turning point. It has made possible something that otherwise was not possible, which is the recovery of a sense of independence and integrity for statistics…This Act gives the control and management of statistics back to Parliament…I think that was a very, very important step.”

I shall briefly remind the House of what the 2007 Act did. It established a new authority, now known as the UK Statistics Authority, with the statutory objective

“of promoting and safeguarding the production and publication of official statistics that serve the public good.”

To many of my right hon. and hon. Friends, that might seem rather a dry subject, but the public good in this instance is defined as

“informing the public about social and economic matters”

and

“assisting in the development and evaluation of public policy.”

This is serious stuff. The authority has the statutory duty

“to promote and safeguard the quality of official statistics, good practice in relation to official statistics and the comprehensiveness of official statistics”.

In this respect, “quality” means the “impartiality, accuracy and relevance” of official statistics and their coherence with other official statistics.

[Robert Halfon (Harlow) (Con)]

I am grateful to my hon. Friend for giving way, and for the chance to serve under his chairmanship when approving the appointment as head of the UK Statistics Authority of this excellent candidate. He mentioned the importance of informing the public about statistics. Does he agree that one of the main priorities for Mr Dilnot will be to improve the website to make it accessible to the public, to make it easy for them to use and to allow them to give some feedback on how statistics are presented?

[Mr Jenkin]

I am most grateful to my hon. Friend for raising that point, which he raised in the pre-appointment hearing and to which Andrew Dilnot responded favourably. I think he sees the potential of improving public access to statistics and the public’s ability to understand why they appear as they do, what value they offer and, therefore, how they can influence the democratic process. This goes to the heart of so much of what we do in this place, and the way in which we try to engage our public. Technology, particularly the internet, enables us to do that in an unprecedented way. There is no reason why every citizen cannot have access to the same information that we have—the information that informs the decisions that we make in this Parliament. We should therefore involve the public much more in that. Indeed, we have an obligation to ensure that what the Government and the Opposition say is objective, truthful and properly informative, rather than otherwise; we all know what Disraeli said about damned lies and statistics. We need to ensure that the quality of the numbers and the data that the Government produce genuinely informs the debate, rather than just advancing the partisan interests of those producing them.

[Jesse Norman (Hereford and South Herefordshire) (Con)]

Does my hon. Friend share the view that it is a proper function of the UK Statistics Authority to be fully separate, over and above the Office for National Statistics, or does he see some scope for reducing the number of quangos in this area?

[Mr Jenkin]

We are talking about a quango that survived the cull. Given that it was so recently established by an Act of Parliament, it would have been an absolute travesty if it had fallen to the cull. The reason is that for many years those who understand the rather arcane world of statistics have been campaigning for much more independent oversight of statistics. Indeed, independence is one of the key tests that the Government applied in the Public Bodies Bill and the review of arm’s length bodies. If a body’s independence is fundamental to the function it performs, that justifies its existence. Therefore, the United Kingdom Statistics Authority was never on the list.

[John Healey (Wentworth and Dearne) (Lab)]

Perhaps the hon. Gentleman would like to remind his hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman) that the Office for National Statistics and the UK Statistics Authority are not two separate bodies, but are one and the same. Indeed, the Statistics and Registration Service Act 2007 sets out the delicate balance between the regulator and producer of statistics, which is one of the big challenges that any chair of UKSA must be able to manage.

[Mr Jenkin]

I am grateful for that intervention, because one of the things that we discussed in our pre-appointment hearing was the balance between oversight and production. The ONS is basically the producer of statistics, while UKSA should provide the oversight. However, the two are not directly separated in the way that one would expect, which is why the independence of UKSA’s chair is such an important feature of the arrangement. Therefore, the authority has a particular duty to ensure the accessibility of statistics.

Since its establishment in 2008 the authority has had the duty to monitor and report publicly on areas of concern in relation to good practice and the quality and comprehensiveness of all official statistics across Government and arm’s length bodies. The authority consulted on and established a code of practice for official statistics in 2009. Indeed, it seems astonishing that there was no such code of practice until UKSA established it. UKSA set independent professional standards for statistics in government, and is assessing against those standards all government statistical products that are classified as national statistics. There are some 1,300 series of statistics produced by government. One third of those statistical products are issued by the ONS, for which the authority performs the governance function.

The other key function of the new authority has been to challenge Departments and Ministers on the quality and integrity of the statistics for which they are responsible. As hon. Members, including several Ministers past and present, will know—I see in his place the right hon. Member for Blackburn (Mr Straw), the former Home Secretary—the authority’s first chair, Sir Michael Scholar, has been ready to challenge Government practices in the preparation and release of statistics where he and the authority have considered these practices to be corrosive of trust in official statistics. I must say that UKSA should have a sense of mission about its purpose; the Public Administration Committee certainly shares this sense of mission.

Sir Michael’s interventions, made in public and invariably copied to my Committee and to the relevant departmental Select Committee, have, I can reliably attest, been regarded with a mixture of fear and outrage in Whitehall. I think the House would be worried if the pronouncements of the authority—a non-ministerial department accountable to the House through my Committee—were not feared and respected in Departments and ministerial private offices, or, indeed, by Her Majesty’s official Opposition. My right hon. Friend the Prime Minister would attest that when we were in opposition, we suffered from the whiplash of Sir Michael’s interventions.

One such early intervention, in December 2008, was to raise in public with the permanent secretary at 10 Downing street an allegation that No. 10 Downing street special advisers had

“caused the Home Office to issue a Press Release which prematurely published provisional statistics for hospital admissions for knife or sharp instrument wounding…These statistics were not due for publication for some time, and had not therefore been through the regular process of checking and quality assurance. The statisticians who produced them, together with the National Statistician, tried unsuccessfully to prevent their premature, irregular and selective release. I hope you will agree that the publication of prematurely released and unchecked statistics is corrosive of public trust in official statistics, and incompatible with the high standards which we are all seeking to establish.”

This intervention resulted in an apology from the then Home Secretary on the next sitting day and a swift investigation by the Cabinet Secretary, which led to substantial changes to guidance to officials on how statistics should be handled, particularly on selective publication from unpublished data sets. An explicit reference was also inserted into the ministerial code, requiring Ministers to abide by the code of practice for official statistics. I regard it as part of the mission of UKSA and my Committee to empower the professional statisticians in government to stand up for the integrity of statistics when under the political pressure that inevitably arises in modern politics.

More recently, Sir Michael has raised with the Chancellor the issue of pre-release access by Ministers, advisers and officials to sensitive economic statistics such as the consumer prices index and retail prices index inflation figures. Sir Michael has asked—I tend to agree with him—what reason there can be for allowing prior access to these figures to a group of up to 50 individuals some 24 hours before publication. I would add that that can be to the advantage only of the Government. For the sake of trust in the use of official statistics, Sir Michael has requested that the number of recipients of these figures be cut to an absolute minimum and the time reduced to the shortest period necessary. I would add: why not?

My Committee is very concerned by the Government’s adherence to pre-release practices. It greatly concerned our predecessor Committee under Tony Wright, and we thought that those practices would be abolished by this Administration when they took office. When the Statistics and Registration Service Bill was going through Parliament, the Minister for the Cabinet Office and Paymaster General gave explicit assurances when we were in opposition that we would abolish pre-release when we were elected. I have to say that we expect the Public Administration Committee to return to the issue in the new year.

Sir Michael Scholar has exemplified an independence of mind and a desire to be independent of Government, which we have thoroughly supported; it could be considered all the more galling as he also served as a most distinguished senior civil servant in Whitehall before he took up this appointment. When he gave evidence to us on the challenges facing his successor he was clear that the single most important feature of his office was its independence. We have been concerned that his successor should be similarly independent, with the judgment to know when to stand up to Ministers to make crucial points about the proper use of official statistics.

In March 2011 Sir Michael indicated his desire to step down, and a competition was initiated to find a successor. A panel—which I understand was chaired by the permanent secretary to the Treasury, and included the Cabinet Secretary—recommended a candidate who was presented to us for approval as the Government’s preferred candidate. I commend my right hon. Friend the Minister for the Cabinet Office on the fact that this debate is taking place, because he conceded, in answer to a question in the Committee, that it would be appropriate for the appointment to be confirmed by a resolution of the House, and for the appointment to be made only after having been so confirmed. If I am correct, that procedure did not apply to Sir Michael Scholar’s appointment and is not required by Act of Parliament.

That is a testament to the Government’s determination to ensure the independence of the appointment, although, perhaps ironically, my right hon. Friend will have rued the day that he made that undertaking. Earlier this year we held a pre-appointment hearing with Dame Janet Finch, an academic of great distinction and experience, to examine her professional competences and personal independence with regard to the appointment. It is a matter of record that the hearing was a somewhat difficult occasion. Subsequently Dame Janet wrote to the Cabinet Secretary, on her own initiative, to say that it had become clear during the course of the hearing that she and the Committee

“had differing views over how the job should be undertaken, and in particular how the independence of the Chair should be exercised.”

I commend her for applying for the post, for gamely putting herself up for the post, and for behaving in such a dignified way. She withdrew from the selection process entirely voluntarily. May I place on record the Committee’s appreciation for the dignified way in which she handled a difficult personal situation? Her conduct in the matter was exemplary, and the Committee continues to hold her in the highest esteem.

[David Heyes (Ashton-under-Lyne) (Lab)]

I have served on the Public Administration Committee both under the hon. Gentleman’s chairmanship and for many years before that, and only recently have we taken on the responsibility for pre-appointment hearings. Does he agree that this is a fine example of how a pre-appointment hearing can work to produce an excellent candidate, whom we talked about earlier, in a sensitive and intelligent manner?

[Mr Jenkin]

I am grateful for that comment. I also want to place on record my appreciation for the action subsequently taken by my right hon. Friend the Minister for the Cabinet Office, who readily agreed that the competition should be rerun and generously consulted my Committee on the arrangements for rerunning it, as it was clear that the previous arrangements had led to the situation. He decided that the nomination panel should be chosen afresh, and the new panel did not include the Cabinet Secretary or anyone else of permanent secretary rank. He agreed that a parliamentarian should serve on the panel, to assess the independence of the panel from the Executive, and we are pleased that he accepted our suggestion that the hon. Member for Luton North (Kelvin Hopkins), a member of the Public Administration Committee and academic statistician of some distinction himself, should serve on that panel, which he duly did.

Having been consulted and had our views taken into account, the Committee was confident that the fresh panel was well placed to select an independent and capable candidate. The House has before it the transcript of the pre-appointment hearing held with the Government’s preferred candidate, Andrew Dilnot, who gave a stellar performance. He is no stranger to any of us—his work with the Institute for Fiscal Studies was for many years required reading at Budget time—and I am sure that many right hon. and hon. Members on both sides of the House have been briefed by him on occasion. As he pointed out to us, he was always able to conduct his analysis of Budget documents without the benefit of pre-release access. He is an accomplished communicator of statistical issues, and communicates in a way that can make him truly engaging and relevant to the wider public. He was the first presenter of BBC Radio 4’s “More or Less” programme, which, whenever I turn it on, I find myself unable to turn off, because it is so revealing about what we need to know in public life.

In the arena of fiscal statistics, Andrew Dilnot has long demonstrated an independence of mind and confidence that have attracted criticism only from those who have found his truths inconvenient. He has made it clear that, if appointed, he will want to work constructively with the Public Administration Committee, and to improve the standing and presentation of official statistics. Certainly my colleagues and I did not hesitate to conclude that he had the professional competences and personal independence necessary to fulfil the role of chair of the United Kingdom Statistics Authority. In fact, the two—he and the job—seem to have been made for each other.

I also look forward to Mr Dilnot’s introduction of a number of innovations that will benefit the public. The authority faces considerable challenges in the years ahead. For instance, it must steer a course towards a more efficient and cost-effective way of collecting population data to replace the census in 2021. Its governing legislation gives it the dual role—mentioned earlier by the hon. Member for Barnsley East (Michael Dugher)—of producer and regulator of official statistics, which is sometimes uncomfortable to negotiate, and which Mr Dilnot will wish to clarify. It must represent the statistical profession in Government effectively at a time when budget reductions mean the loss of statistical resources and the axing of whole statistical series. It must also act as cheerleader for official statistics when public trust in them is generally accepted to be low, and remains low despite the progress that has been made in recent years.

The Public Administration Committee is very confident that Andrew Dilnot is the right candidate to address those challenges, and to build on the considerable legacy left by Sir Michael Scholar, to whom I pay tribute. I particularly wish to mention that Sir Michael stayed on willingly for the extra months during what would otherwise have been an interregnum between his retirement and the delayed appointment of his successor. I wholeheartedly support the motion.

16:22

[Mr Jack Straw (Blackburn) (Lab)]

Let me begin by declaring an interest: I am an honorary fellow of the Royal Statistical Society. The society graciously bestowed that honour on me for my work in the 1990s in advancing the case for an independent national statistical service and proper parliamentary scrutiny of statistics.

I am delighted to observe that my right hon. Friend the Member for Wentworth and Dearne (John Healey) is present. It was he who introduced the Statistics and Registration Service Act 2007, which completed the journey from a statistical service that was half independent and half controlled by Government to a service in which the producers of the statistics, the Office for National Statistics and its agents, and the supervisor of that production, the United Kingdom Statistics Authority, became entirely independent of Government.

I also commend the Public Administration Committee for its work both in monitoring the work of the authority and in conducting the process of this appointment. It is interesting to recall, as I do, the nervousness that was abroad at one time about Select Committees having any role in public appointments, given that this appointment has effectively been made entirely by Parliament, and has been endorsed by a Select Committee with the approval—hopefully—of the House.

I know Sir Michael Scholar well and I think that he did an outstanding job as the first chairman of the UK Statistics Authority, in difficult circumstances. Nobody should underestimate the pressure that was put on him when he dared to criticise the Government of whom I was a member. He criticised the frankly preposterous behaviour of part of the Government—special advisers in No. 10 and in the Home Office—in allowing not just the pre-release of statistics, but the traducing of statistics that should have been properly released by the Office for National Statistics.

That was part of a culture that went back to previous Administrations, and we have seen one example of it during this Administration, whereby special advisers in No. 10, all jockeying among themselves to show that they are more adept than their colleagues in getting material into the newspapers and anxious for attention from the master, cajole the people they believe are their subordinates—the special advisers in the individual Departments. They say, “We can see this on the grid”—the wretched grid—“and we must know about this. We want early information. There is something else coming up. We have heard a rumour that those nasty people in the Opposition are about to do X or Y, or there is a terribly bad news story, Z, and if only we can get this good news out, all will be fine.” That is all without purpose, it never works, it always ends in tears and it carries on. The problem is that previously, unless a strong and confident Minister was looking after those statistics, it was all too easy for this abuse to run away with itself. I had only one occasion when those at No. 10 tried this on me and I told them to get lost, saying that if they wanted I would come to the House to make a statement about what they were trying to suborn my officials and special advisers, who are of the highest integrity, into doing. I was secure in my position but a very large number of Ministers, sadly, are not in that happy position.

I know what the chuntering was when Sir Michael Scholar criticised the practice of the Home Office and No. 10 in December 2008—I believe it was then. It is no coincidence that much of the attempt to bypass official release mechanisms has taken place in respect of Home Office statistics. That is not because the Home Office statisticians—or now the Ministry of Justice statisticians—are any less worthy or any less replete with integrity; it is because of the highly political nature of the information they convey. Sir Michael set out, in handling that abuse, to continue in a similar manner, and he put his foot down on a number of further occasions—two when the Labour Government were in power and once under this Government. I hope that, bit by bit, Ministers, officials and special advisers will get the message that in the 21st century it is no more appropriate to try to interfere with the generation, organisation, analysis and publication of official statistics than it is to interfere in the generation, analysis and publication of the accounts of a Department.

No Minister or senior official at any level would dream of saying, “We’ve got to alter the accounts. It is a bit inconvenient but this has come up and we seem to have lost some money.” Such alteration is a criminal offence for directors of companies. It is worth remembering that in the early part of the 19th century it was perfectly commonplace for Ministers to ensure that there was a bit of fiddling of the statistics. A lot of Ministers lined their own pockets, a few got charged with corruption but generally got away with it, and one or two were impeached. That was the culture of the times. We have moved away from that in respect of financial probity, but we now have to see a similar cultural shift in respect of statistical probity because otherwise the whole political debate and discourse in this country will be the loser.

We can have serious discussions when it comes to arguments about finance. We know what the deficit is and we can argue about what its components are, but no one suggests that it has somehow been made up. It is there. With other statistics—particularly social statistics, and particularly those on crime and immigration—there has been a ridiculous argument about whether crime has gone up or down. The same applies to unemployment and so on. We must move away from that, because it is a real turn-off for the public and it is very undermining for the quality of debate in this country.

Let me make two points, the first of which is on pre-release statistics. The hon. Member for Harwich and North Essex (Mr Jenkin) was quite right to draw attention to the fact that before the election the Minister for the Cabinet Office and Paymaster General made a lot of play of the fact that he was going to abandon pre-release notice, or move at best to one hour. We should have abandoned it when we were in government, but we did not do so. He said that he would and then, when he came into government, hey presto, he supped at the royal jelly—or something like that—or had a nod from somebody at No. 10 and suddenly decided that he was wrong.

[Mr Jenkin]

Will the right hon. Gentleman reflect on what interests prevented him from persuading his colleagues to abolish it and does he therefore have some sympathy with my right hon. Friend the Minister for the Cabinet Office and Paymaster General as regards the opposition he might be facing?

[Mr Straw]

I have sympathy with the Minister, of course. He happens to be my pair, anyway, so I declare that interest too. I have every sympathy with him, but the forces of darkness get tiring after a while. People always think that the Government will do better if only they can get early information and slip this or that past, but that is all nonsense.

My officials and others used to regard it as slightly tedious that I was not terribly bothered about when the figures were coming out—although I was early on, when I was neurotic about when the crime figures were being released. My view was that one had to ask what the point was of knowing in advance. It just led to a suspicion that we had somehow fiddled the figures because we had had them early and all the rest of it. There was absolutely no point at all. Why not find out at exactly the same time as anybody else? It is impertinent to think that Ministers should have any right to find out in advance. Why should they? They are not Ministers of figures—the figures belong to the public and Parliament. It is also self-defeating, in my opinion.

My advice to the Minister for the Cabinet Office and Paymaster General and his colleagues is: chill and defeat the forces of darkness. I am sorry I did not complete that task, notwithstanding being joined by my right hon. Friend the Member for Wentworth and Dearne. Ministers will do themselves an enormous favour if they abandon pre-release notice.

[Robert Halfon]

I agree with much of what the right hon. Gentleman says. Does he not agree, however, that there is a very small case for certain statistics—particularly market-sensitive information—to be released to the Government early, given the effect they might have?

[Mr Straw]

There might be, and there could have been in the days when the Treasury was responsible for setting interest rates. At a time when by all-party agreement the Treasury is no longer responsible for setting interest rates, what can the Government do about it anyway? If they have advance information that there will be a sudden huge—mega—balance of trade deficit then, with a bit of luck, it will gradually emerge through the tax data anyway. What can they do about it? If the markets react adversely, the Bank of England will come in and buy sterling, or not. I accept that there might be a narrow case for examining that, however.

My second point is about the responsibility for defining the components of series. Let us recall the great debate about the components of youth unemployment figures. There was irritation among those in the Government of whom I was a member that that series included people in full-time education, and I gather there is also irritation about that in this Government. Of course, support for the current definition has stayed on the Opposition side of the Chamber. My view is that there is a case for saying that people in full-time education should not be included in the definition of the unemployed because they are not available for work, although they might want a part-time job. There might not be a case for that but, whether or not it is to the advantage of Government, that issue ought to be examined independently and decided independently, without regard to which party might, for the time being, gain partisan advantage.

Lastly, I commend the recommendation of the Public Administration Committee that Mr Andrew Dilnot be appointed as the successor to Sir Michael Scholar. He is brilliant, he has a very fine mind and he has a great understanding of public affairs. I can think of no better successor to Sir Michael Scholar.

16:36

[Jesse Norman (Hereford and South Herefordshire) (Con)]

I, too, am extremely pleased to support the motion. I speak not only as a Member of the House but as a member of the Treasury Committee. The House will be aware that we are extremely reliant on the quality of our national statistics as we supervise, regulate and seek to hold to account, at least at arm’s length, entities and agencies that are themselves extremely reliant on our national statistics. This appointment reflects very creditably on the Government for their willingness to choose, and to allow pre-selection hearings on, the highest quality candidates who can genuinely hold them to account rather than simply choosing placemen. This appointment fits into that good tradition, and the appointment of Robert Chote was another example of that.

I pay tribute to Sir Michael Scholar and also to the Public Administration Committee’s role in vetting not one but two candidates.

[Paul Flynn (Newport West) (Lab)]

Would the hon. Gentleman extend those sentiments to the Mayor of London, who, when he was criticised for abusing statistics before a Select Committee of the House, reacted to the criticism of Michael Scholar by describing him as a “Labour stooge”?

[Jesse Norman]

I certainly do not share that view and I am not sure that the Mayor would share that view if he had further time to reflect on it.

Sir Andrew Dilnot is a person of impeccable personal reputation and great intellect. He has been garlanded with honours from our finest academic institutions and the Institute for Fiscal Studies. Anyone who has heard him present “More or Less” or heard his outstanding podcasts will know that he is an extraordinarily apt and adept presenter of information, and therefore perfectly fits an agency with the job not merely of presenting information and ensuring its integrity but of recruiting and engaging its users.

The truth is that we in Parliament and those in government cannot survive without good information and good numbers, and the Opposition, whoever they may be, cannot survive without the numbers that allow them to hold the Government to account. I hope that an early priority for the new chair will be to look at the private finance initiative, which hon. Members will know is one of my pet bugbears. I can think of no better example than that because there has been extraordinary abuse of those statistics, with things being pushed off-balance sheet, with standards that are not of the highest quality being adopted and—I am pleased that this is being addressed by the Government—with the creation of a situation in which it is possible to have an asset that is off-balance sheet not only to the country but to PFI contractors.

Sir Andrew Dilnot is also to be commended for his outstanding report on different ways of funding the provision of care for the elderly. It would be a very poor debate that did not recognise that and congratulate him on that report. His appointment fits into a pattern of improving the governance of our public agencies, and it is a principle that could properly be extended to other public agencies whose governance has been somewhat lacking of late. I think in particular of the Bank of England, whose court needs comprehensive restoration; the Treasury Board, which could do with refreshment; and the governance of HM Revenue and Customs, which needs higher quality senior officials and non-executives.

I conclude by congratulating the Government on this appointment, and Sir Andrew Dilnot on his acceptance, on his passion for statistics and on his independence of mind. I welcome the energy, the integrity and the intelligence which he will bring to the evaluation of policy, I hope, as well as to the assessment of statistics and their presentation to the public.

16:40

[Paul Flynn (Newport West) (Lab)]

This appointment is a major development in our parliamentary procedures. This is the first time that the pre-appointment hearings made a significant difference and had an influence in changing the candidate. The pre-appointment hearings came out of an investigation in the previous Parliament by the Public Administration Committee, which went to America and recommended that certain senior appointments should be subject to the procedure. We have heard the explanation given by the Chair of how the decision arising from the interview with the first candidate resulted in a second candidate coming along and how a member of the Committee was appointed to the panel that took part in the process. These are important changes that reinforce the view that this is a useful way of proceeding. The House has behaved in a responsible manner in this process.

My right hon. Friend the Member for Blackburn (Mr Straw) referred to the forces of darkness and the queen bee jelly that takes over Governments. Some of us can rejoice in being the forces of light who were against the previous scheme and against our own Government, and are still against it and against the new Government. So often when Governments change, it is not a change of philosophy, but an exchange of scripts. Of course Governments neurotically want to hoard their secrets for as long as possible. It seems extraordinary that it was only in 2007 that the arguments were exactly reversed—when I was sitting on the Government Benches arguing with my own Government, the Tory Opposition were saying that this was the big weakness in the Bill that went through. Now they flip over without a blush.

There was a time when I recall accusing Mr Alan Clark of supervising the largest and most shameless massage parlour in London, which was the Department of Employment, in his use of employment statistics. There was some truth in that. I had an exchange of letters with Margaret Thatcher in 1989, when a group of statisticians came to see me. They were distressed because the responsibility for statistics was being moved from the Cabinet Office to the Treasury, and they rightly said, “This is our life’s work. That will reduce these pristine, glorious statistics, wonderful graphs and histograms to garbage by politicians on the make.” They suggested that the Treasury was the Department with the greatest vested interest in fiddling the statistics and damaging the result of their work. Their whole professional raison d’être was diminished by that.

Mrs Thatcher sent me a letter in which she expressed her deep shock that anyone should express the unworthy idea that her Department would want to fiddle statistics in any way. We do not feel quite that way now. There has been a move forward. I mentioned the distressing episode involving the Mayor of London. It goes to show that the advance has not been complete—not all Departments have changed their mind.

The Mayor of London was rightly criticised by Sir Michael Scholar, and we have all praised him for the way in which he did that. Sir Michael has done very well. He challenged the Home Department with great courage. He challenged the previous Government and he has challenged Departments now. He did the job that he was set to do, but when he attacked the Mayor of London, the Mayor’s reaction was not to say, “All right, I got it wrong. I’ll change the statistics”.—no humility from Boris, of course. Instead, he called him a Labour stooge. It was an outrageous thing to say, given his lifetime of independence. Michael Scholar, as all today’s contributors have said, has done a splendid job of establishing that independence, and it is what we see in Dilnot.

There are still a few old lags in the House from the passage in 2007 of the Statistics and Registration Service Bill, which went through with hardly a flicker of interest; this is a crowded House compared with the number of people who attended back then. There was only one tiny piece of interest in the press, too, but it was an article that I repeated ad nauseum to the House at the time, because it stated that it was the most important Bill of the Labour Government—we had been in power for 10 years—and would have a bigger effect than anything we had done, including handing over power and independence to the Bank of England. The article was written by a certain Andrew Dilnot, and his entire career has rightly been in that area—suggesting that statistics need to be independent.

In the Public Administration Committee, we all saw Dilnot’s boyish enthusiasm for statistics. He talks about them as “Statistics”—these wonderful things, which are the key to all happiness and the path to knowledge and wisdom—

[Mr Straw]

And employment in your constituency!

[Paul Flynn]

Indeed. I will turn to that point now.

I do have a slight vested interest in the matter, because the largest employer in my constituency happens to be the Office for National Statistics, and that is why I like to deal with the cynicism that occasionally crops up about the well-being statistics. They might have cost £2 million, but they have certainly added to my sense of well-being, because they provide work in my constituency, and we should not be cynical about them. In the past we measured happiness, success and politics on the basis of gross domestic product, but that is not a sensible thing to do, because, when the nation’s prosperity increased, unhappiness increased as well.

There was a splendid T-shirt in Hungary in 2000. On the front it said, “What has 10 years of right-wing government done that 50 years of communism could never do?” and the answer on the back was, “Made the people love socialism”. They had put up with the equality of misery, because everyone was treated badly, but when they moved to the inequality of choice they were unhappy, because young men were becoming millionaires on the stock exchange while pensions were increasing slower than inflation.

There is a crucial difference between the two, and one of the myths of politics is that choice is an example to be pursued, and that everyone will be happy if they have choice. No, they will not. I am a child of the war, when there was no choice and we wore utility clothes, but everyone was on the same level, and that was much better than what we have now, with our children wanting to wear quality, fashion clothes. All the great myths of politics are there, so it is crucial that we measure scientifically our sense of well-being.

Many points that I wished to make have been made, but it was telling of Andrew Dilnot to give us one striking example of the need for truth and honesty in statistics. He did not mention the newspaper, but most people will recognise that he was citing The Daily Telegraph, which put out a big, 36-point, front-page headline, stating, “Public pensions to cost you £4,000 a year”. It had divided £9.4 billion by 26 million and got an answer of almost £4,000. The answer is actually £400, but that particular piece of fiction was repeated on the “Today” programme and in the day’s headlines, and it became part of common knowledge which is actually common ignorance, so it is right that someone such as Andrew Dilnot should be there to take on the powerful forces that put fiction into the public domain because they are innumerate.

Mr Dilnot made a number of other points, which were entertaining, about how we should move forward. He talked about an idea called “Tell me a story”. He would suggest to schoolchildren that they go to the website of the Office for National Statistics or the Government statistical service and tell him a story about aspects of the country, but expressed in statistics.

It is a matter of great satisfaction and pleasure for my constituents that this Swansea boy should have been upgraded to Newport—a matter of some congratulations. He can work in Newport under the benign observance of a quality MP, and I am sure that he will be extremely content. The hugely successful relocation of the ONS to Newport can continue and prosper. Gales of applause will be coming up the M4 today as a result of the House’s decision, which I am sure will be to reinforce the decision of the Public Administration Committee to appoint Andrew Dilnot as the best possible candidate.

16:50

[Nigel Mills (Amber Valley) (Con)]

It is a pleasure to follow the hon. Member for Newport West (Paul Flynn), although I am not sure how I am going to follow some of the details that he mentioned. It will be a challenge for Mr Dilnot to find a statistical measure for happiness; I am not sure that he will find reliable data for that.

I start by welcoming Mr Dilnot’s appointment. I pay tribute to the Chair of the Public Administration Committee, my hon. Friend the Member for Harwich and North Essex (Mr Jenkin). The process has shown that pre-appointment hearings should not always be simply to ratify the Government’s appointment. There should be a possibility that the proposal will be rejected and that the process will have to restart, and the occasional rejection should be seen in the context of the advantages that the process offers us.

Any politician will know how important statistics are. Soon after I was selected as a candidate, around the time of the change in the law, in early 2008, we used some crime figures in a leaflet. A couple of months later, I was phoned up by someone from the local newspaper, who said that the police authority was challenging the data that we were using. It cited some very different figures and had no idea where the figures that I had used came from. It turned out that my figures were from the most recent British crime survey and the authority was using police data. What was slightly unfortunate was that it used crime data for the year that ended two days previously—I could not possibly have used that in my leaflet, which had been printed two months before, and not even in the same year.

In retrospect, I was grateful as I got a front-page headline and a decent amount of publicity. The vast majority of correspondence said, “You’re right—we don’t believe a single figure that they tell us anyway, so we’ll happily go with the ones that you cited.” That sums up the public mood about official statistics—they just do not believe them, probably because all politicians tend to manipulate them, get them wrong or selectively use some that suit the argument and omit those that might go the other way.

It is a real job to make public the data used and make it clear when they are abused by politicians. We should all base government and policies on actual evidence, rather than on what we would like the evidence to be; we should make the policy fit the data, not the data the policy. It is ironic that, in a debate about the probity of the data we use, we have had comments about child poverty data. That is one of those footballs that we can kick back and forward. What data do we want to use? Do we compare 2005 to 2010? Some of the numbers show child poverty going up by 300,000 and some by 100,000, or we can say that it has gone up since the election. The hon. Member for Barnsley East (Michael Dugher) wandered into that argument. The right hon. Member for Blackburn (Mr Straw) gave a far more balanced view: we have to be careful that we use realistic, accurate data that present a meaningful picture, rather than the one that we want.

I agree with the Minister that the person who heads this authority needs to be credible, senior, and, most of all, independent. If we are to have a Parliament that can effectively hold Government to account, we need reliable, honest, accurate data to be available to all of us so that we can do that job properly. I truly hope that Mr Dilnot can take that process forward. I, too, cannot see much justification for the Government’s having 24-hour advance access. I hope that the Public Administration Committee can make some further recommendations when it looks at that, because probably one of the last great abuses is our being able to see stories appearing in the press that rely on statistics that we have not seen.

16:55

[Kelvin Hopkins (Luton North) (Lab)]

It is a great pleasure to endorse the recommendation that Andrew Dilnot be made chairman of the UK Statistics Authority. I had the pleasure—indeed, the honour and responsibility —of serving on the selection committee. I cannot say too much about what went on in the selection process, but his performance was, as the chairman said at the pre-appointment hearing, stellar—and in a very strong field. We have got exactly the right person in Andrew.

Before saying more about Andrew Dilnot, I want to say something about Sir Michael Scholar. I agree with all the compliments paid to him this afternoon. Indeed, I praised him publicly at the Public Administration Committee when he came before us in the previous Parliament. The fact that he has been criticised by—or perhaps I should say that he has slightly disturbed—politicians on both sides of the House shows that he is even-handed. However, I think that he was just being truthful when he criticised special advisers in the previous Government for misusing statistics about knife crime. I am sure that they were not pleased, and they may have privately said that he was a Tory stooge—who knows? The fact that he has now upset the Mayor of London and has been accused of being a Labour stooge suggests that perhaps he is nobody’s stooge. Perhaps he is just his own man, telling the truth as he sees it, and that is what we want in a chair. He has done a splendid job.

Sir Michael has drawn attention to the fact that official statistics are not held in high regard by our voters. In a recent public lecture at Oxford university, he said that we came bottom of the league table in our attitude to official statistics and that our electors do not trust them. That is a very serious matter. In my view, our official statistics are of very high quality, and they should be trusted, but it is their misuse by Governments and by the media that leads to their being mistrusted. I think that I was appointed to the Committee because I have some modest experience of statistics; I studied the subject and used to teach it at a modest level. I used to show my students how one can use statistics to tell fibs, in a sense, by distorting things; one can exaggerate the vertical scale to make it look steeper than it should be, and so on. People can try all sorts of tricks to make statistics tell the story that they want to tell.

The great thing about the UK Statistics Authority is that it will present the statistics raw, and truthfully. If they are misused, it is up to the authority to point that out from time to time. I entirely agree with what my right hon. Friend the Member for Blackburn (Mr Straw), the former Justice Secretary and Home Secretary, said about pre-release. Let us get rid of pre-release and we will solve some of these problems. We can then all see the statistics as they come out and make of them what we think, not get it all pre-digested by politically interested, politically motivated Governments of both sides.

Sir Michael has pointed out that we have to raise the status and the opinion of official statistics with our electors so that they are trusted. I personally trust official statistics, and I trust the splendid people who work in Newport in the constituency of my hon. Friend the Member for Newport West (Paul Flynn). I have visited their headquarters and spoken to them many times, and they are clearly public servants who can and should be trusted. We want to ensure that the population at large regards them equally well.

I have had a long association with Andrew Dilnot, because long before I was a Member of the House I used to attend the pre-Budget presentation by the Institute for Fiscal Studies, which he led. It was always a splendid occasion, and the statistics and analysis that the IFS produced were always first class. I still receive its green budget reports—in hard copy, I am afraid, because I am old-fashioned—and always pore over them with great interest.

I am one of those people who are fascinated by numbers and statistics. I like nothing better for Christmas than a book full of statistics that I can spend Christmas day entertaining myself with. People might call me an anorak, but I believe that numbers are important. The great thing about Andrew Dilnot is that he has a passion even greater than my own for statistics. The passion that he showed in the interview was almost as though he were talking about great works of art. Statistics tell truths if they are accurate and presented truthfully, and his enthusiasm and passion for statistics as almost works of art inspired us all. I believe that we have the right person for the job.

I agree entirely with what the Chair of the Public Administration Committee, the hon. Member for Harwich and North Essex (Mr Jenkin), and a number of other Members have said about Andrew Dilnot. I could not attend the hearing, because I was a member of the selection committee, but I am sure his performance was as exciting and stimulating as it was at the interview. It was a great pleasure to be involved in the process, and I think we have got exactly the right person for the job.

17:01

[Priti Patel (Witham) (Con)]

It is a great pleasure to follow the hon. Member for Luton North (Kelvin Hopkins), a fellow member of the Public Administration Committee. I was at the hearing at which we interviewed Mr Dilnot—in fact, it was my first day on the Committee—and I was overwhelmed by his enthusiasm and passion and the degree of animation with which he spoke about statistics. On that basis, it gives me great pleasure to endorse his recommendation.

I wish to add to the points that have already been made one that has been spoken about only briefly, which is Mr Dilnot’s capacity to become a cheerleader for statistics. We have heard a great deal about the cynicism and negativity associated with statistics, but one of the strongest points that came out of our hearing with him was that he wanted to do significant work to change the perception of statistics. He wants not just to do that for the cynical oldies among us but to engage young people in statistics and increase their understanding of them.

As the hon. Member for Luton North pointed out, Mr Dilnot is passionate about statistics. Those of us who have had the privilege of studying statistics, maths or economics in the past will understand the significance of stats to our daily lives and well-being and what they mean to society as a whole. Mr Dilnot spoke about that with great enthusiasm and commitment, and he went as far as to state that it would be a priority for him.

Members have made points about the integrity of statistics. Mr Dilnot’s appointment provides a tremendous opportunity to redefine the relationship with statistics of all of us—the Government, the public and future generations. I wholeheartedly support the recommendation in the Committee’s report, and I hope that the appointment goes through with no flaws or problems at all.

17:03

[John Healey (Wentworth and Dearne) (Lab)]

It is good to follow the hon. Member for Witham (Priti Patel), and I welcome the fact that so many Members on both sides of the Chamber have wanted to contribute to the debate.

I pay tribute to the members of the Public Administration Committee and its Chairman, the hon. Member for Harwich and North Essex (Mr Jenkin), for the report and their work. I speak having been the Minister responsible for developing the Statistics and Registration Service Act 2007 and leading it through the House. May I say that I had no greater supporter in government or more critical friend in that work than my right hon. Friend the Member for Blackburn (Mr Straw)? I am grateful to him for that.

The fact that our debate this afternoon is in such terms causes us to reflect on and pay tribute to the work of several people in setting up the UK Statistics Authority after the House passed the legislation, especially the former national statistician, Karen Dunnell, and the current national statistician, Jil Matheson. However, I want to pay particular tribute to the outgoing chair, Sir Michael Scholar. He helped lead and set up the authority with great distinction. He helped provide important guidance and governance to the Office for National Statistics, and ensure that a good, strong code of practice for official statistics was introduced in January 2009 and is, properly, now also enforced. As hon. Members from both sides of the Chamber have observed, he has been ready, when necessary, to tackle Ministers from the previous Government and the current Government about the misuse of statistics. Indeed, he most recently tackled the Mayor of London for his misuse of official statistics.

The UK Statistics Authority has two most important features, which have a bearing on the appointment of its chair. The first is its statutory independence from Government and the second is its answerability to Parliament—to this elected House. The report of the Public Administration Committee demonstrates and reinforces the role that Parliament must play. My hon. Friend the Member for Ashton-under-Lyne (David Heyes) called it a fine example and my hon. Friend the Member for Newport West (Paul Flynn) said that we mark a historic day in the extension of the proper role of Parliament in holding the Executive to account and in the conduct of public life. That is true, and the report reinforces the value and importance of the House’s role in the process in three ways.

First—and perhaps for the first time—the Select Committee played an important role in ending the appointment process for the Government’s previous preferred candidate for the job. Secondly—I pay tribute to the Parliamentary Secretary, Cabinet Office, the hon. Member for Ruislip, Northwood and Pinner (Mr Hurd)—the Government conceded a greater role for the Committee in the selection process for the chair, allowing it to comment on the person specification, the job specification and the recruitment process. Thirdly, they crucially conceded the point that a member of the Committee had a valuable role to play on the selection panel, and I pay tribute to my hon. Friend the Member for Luton North (Kelvin Hopkins). I note that the report stated that his role was to assess independence from the Executive. He proved his ability to do that over 13 years of the previous Government and continues to do that from the Opposition Benches.

It strikes me from the Committee’s hearings that Andrew Dilnot demonstrated an extraordinary passion for and commitment to what he called the science of statistics in his evidence session. One of the special qualities that he brings to the post is that of being a long-term user, not simply a producer, of statistics—a man who can be not just a guardian, but a champion of statistics in future. The Select Committee report’s conclusion states:

“We welcome his independence of mind and his enthusiasm better to communicate statistics and their importance.”

The contributions to the debate from both sides of the Chamber, particularly from Members who served on the Committee and heard his evidence, reinforced the point about passion and enthusiasm.

The Chairman of the Committee said that in the appointment process the Committee was concerned to establish personal independence and professional competences. Any hon. Member who has ever worked with Andrew Dilnot, or who has worked in areas of his expertise and activity, has absolutely no cause to doubt his personal independence or his professional competence. Treasury Ministers—I am a former Treasury Minister—waited immediately after the Budget for the Institute for Fiscal Studies assessment and analysis, which was the most significant one. Invariably and reliably, that was delivered with great independence and competence, and it was often delivered personally by Andrew Dilnot.

In conclusion, like the hon. Member for Hereford and South Herefordshire (Jesse Norman), who is not in the Chamber, I too can think of no more fitting and suitable a person for this post in public life in our country than Andrew Dilnot. I welcome him as the Government’s preferred candidate and the work of the Committee in the process of his appointment, and I welcome and endorse the report, which concludes:

“His experience makes him eminently fitted for the role.”

17:10

[Sir Peter Bottomley (Worthing West) (Con)]

I apologise for not being here at the beginning of the debate, Mr Deputy Speaker, and declare an interest: I am not the statistician in my family.

I believe that those who follow such debates would be well advised to get hold of the Public Administration Committee’s sixteenth report of Session 2010 to 2012, HC 910-I, “Appointment of the Chair of the UK Statistics Authority”; the corrected transcript of oral evidence of 10 May 2011 of Sir Michael Scholar, Jil Matheson and Richard Alldritt on the appointment of the chair of the UK Statistics Authority; and the written evidence on the appointment of the chair of the UK Statistics Authority, which contains all but one of eight papers submitted to the Committee. I tried to find out what the missing paper was—it was “UKSA 04”—but “UKSA” also stands for “United Kingdom Sailing Academy”, “the United Kingdom’s Strongest Athlete” and one or two other things with which I need not delay the House today.

To illustrate that statistics need interpretation, I remind the House that if the UK Statistics Authority reduces its number of staff as it intends, by 2015, the number of staff it had in 2005 would be approximately 42% higher. That is to say that it is a 29.5% reduction from the figure of 2005. That has come about via a 16% reduction from 2005 to now, and there will be another 16% reduction from now until 2015.

That is an example of how, in three sentences, one can cast a cloud over people’s understanding, but what it basically means is that we need statisticians and those who read their work. That is why the UK Statistics Authority has a vital role in getting information from the Government out into the open in a way that the outside world can understand and interpret, and feed back to hon. Members in a way that increases our understanding.

I did not believe that it was right to combine the Statistics Commission and the Office for National Statistics, but that is done. Sir Michael Scholar has clearly explained how the UKSA arrangements are supposed to retain a separation between the regulator and the producer of statistics. I am willing to accept that, but I am still not very happy about it.

When Sir Michael Scholar gave evidence to the Committee with Jil Matheson on 10 May 2011, he made some points about the problems that he put to the Prime Minister in 2010. On page 11 of the transcript, Sir Michael said that

“before any significant changes could be made to the statistical capability of a Department, or any major changes to its statistical output, the Department would be obliged to secure the agreement of the National Statistician. That would be going back to a system that pertained in this country during the time that Claus Moser”—

Lord Moser—

“was head of the Central Statistical Office. I asked the Prime Minister if he would go back to that system, which would be something that he could do through administrative action without any need for legislation or for any additional expenditure. I also asked him if he would accept the proposals we had made on prerelease access…My third proposal to him was that he should give the Authority a place in the decision making about cuts in statistical capability across the whole Government. Recognising, in the difficult fiscal position that the Government were and are now in, that there were going to be cuts, we felt it was very important that the Statistics Authority, with a view right across the scene of the whole statistical system, should be brought into the process of decision making about where cuts should be made.”

It would be very helpful if the Government, now or shortly, responded to each of those points. We know about the pre-release access—progress has been made on that and it has not brought the roof down—but the other two points still matter and should be made.

The hon. Member for Luton North (Kelvin Hopkins) referred to himself as an “anorak”—which I think is the only word we get from Greenlandish Eskimo, but I stand to be corrected—and in the hearing on 10 May 2011 he referred to time series. Sir Michael Scholar, the chairman, said, in effect, “I don’t think we can give you the assurance that we aren’t losing something that is valuable.” It would be wise if the Government and the new chairman, together with the national statistician—

[Kelvin Hopkins]

I raised my concern about the loss of time series in the Select Committee in the last Parliament. I am also worried that the squeeze on expenditure may see valuable time series lost for the future and that would be a great mistake.

[Sir Peter Bottomley]

It is not just the time series: we also need to protect the extra investment going into the longitudinal studies, which are a vital statistical treasury that can be used both prospectively and retrospectively.

I pay tribute to my hon. Friend the Member for Harwich and North Essex (Mr Jenkin) for the way in which he has chaired the Committee and to Dame Janet Finch, whose dignity helped to resolve an awkward situation. It is vital that we have a chairman who is fair, fearless and clear. That is not a comment on Dame Janet, but on Sir Michael Scholar—and I hope that it is one that we can make in retrospect when Andrew Dilnot retires. Those are the attributes we want from our statistics, and we also need them from the chair of the UKSA.

At one point, the House declined to give its support to someone for that kind of role—when Elizabeth Filkin was the Parliamentary Commissioner for Standards. We paid a price for that. It was a parliamentary price, but there will be a national price to pay if we do not give our support to the chairman and the National Statistician. I therefore commend the motion.

Question put and agreed to.

Resolved,

That this House endorses the nomination of Andrew Dilnot CBE for appointment as Chair of the United Kingdom Statistics Authority.

Business without Debate

Tuesday 13th December 2011 Commons Chamber

Charities Bill [Lords]

Motion made, and Question put forthwith (Standing Order No. 58), That the Bill be now read a Second time.

Question agreed to.

Bill accordingly read a Second time.

Motion made, and Question put forthwith, That the Bill be not committed.—(Mr Dunne).

Question agreed to.

Motion made, and Question put forthwith, That the Bill be now read the Third time.

Question agreed to.

Bill accordingly read the Third time and passed, without amendment.

Prevention of Nuclear Proliferation

Tuesday 13th December 2011 Commons Chamber

17:18

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

I beg to move,

That the Financial Restrictions (Iran) Order 2011 (S.I., 2011, No. 2775), dated 21 November 2011, a copy of which was laid before this House on 21 November, be approved.

Today I seek the support of the House for the financial restrictions measures against the Iranian banking sector that the Chancellor announced on 21 November. The Government have taken decisive action to respond to a significant threat against UK national interests by putting a stop to all business between UK financial institutions and those in Iran. The Treasury has laid the Financial Restrictions (Iran) Order 2011 before Parliament under the power in schedule 7 to the Counter-Terrorism Act 2008. This order contains restrictions requiring UK credit and financial institutions to cease business relationships and transactions with all banks operating in Iran, including their branches and subsidiaries, and with the Central Bank of Iran.

I turn first to the rationale behind the order. The Government have serious concerns about activity in Iran that facilitates the development or production of nuclear weapons. This concern has been repeatedly raised by the International Atomic Energy Agency, the UN body charged with monitoring Iran’s nuclear activities. Its latest report, in November, highlights its deepening concerns about

“possible military dimensions to Iran's nuclear programme”.

The restriction in the order was made in response to Iran’s nuclear activities, as highlighted by the IAEA, and the urgent calls from the Financial Action Task Force for counter-measures to be taken against Iran. Iran’s nuclear programme poses a significant risk to the UK’s national interests. This order seeks to address that.

[Paul Flynn (Newport West) (Lab)]

Is there not a danger, if we push Iran too hard, of it expelling the IAEA inspectors from the country? If that happens, instead of acting in the knowledge with which they provide us, we would be acting in ignorance.

[Mr Hoban]

It is important that we continue the twin-track approach—of engagement and challenge—that the Government have set out and which the previous Government also followed.

The November IAEA report documents Iran’s failure to co-operate fully with the agency and the possible military dimensions to Iran’s nuclear programme. The IAEA reports on Iran’s programme on a quarterly basis, but the November report set out its concerns in the strongest terms to date. It states that information available to the IAEA indicates that Iran has carried out activities relevant to the development of a nuclear explosive device. The report notes that

“while some of the activities identified have civilian as well as military applications, others are specific to nuclear weapons”.

The Government view these developments with the utmost concern.

In response to the November IAEA report, its board of governors issued a resolution expressing “deep and increasing concern” about the possible military dimensions of the Iranian nuclear programme. The board urged Iran to abide by its international obligations and called on it to engage seriously on the nuclear issue. These concerns are of the most serious nature and have far-reaching consequences for the UK’s interests and those of the region. Some 32 of the 35 countries on the board of governors supported the resolution.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

The Minister might be about to answer my question, but what are other nation states doing in response to events in Iran? In particular, I am thinking about UN Security Council members Russia and China.

[Mr Hoban]

I will outline some of the action taken by several countries to exert pressure on the Iranian regime and to ensure that targeted action is taken to prevent the development of nuclear technology. I shall address some of those issues later.

The case for UK action is also underlined by the recent calls from the Financial Action Task Force for countries to apply effective counter-measures to protect their financial sectors from money laundering and financing-of-terrorism risks emanating from Iran. Those calls were renewed with urgency on 28 October 2011 and noted the taskforce’s particular and exceptional concern about Iran’s failure to address the risk of terrorist financing. It also flagged up its concerns about the serious threat that this posed to the integrity of the international financial system. The taskforce has not expressed such serious and ongoing concerns about any other country.

The UK is leading action against Iran because Iran’s proliferation-sensitive activities pose an ongoing concern for the UK and the international community as a whole. The measure that we have imposed is strong but necessary, and we encourage other countries to take similar tough action. The UK is an important global financial centre, so UK restrictions will have a significant impact on the options available to Iranian banks. That will make it more difficult for Iranian banks to use the international financial system in support of proliferation-sensitive activities and protect the integrity of the UK financial sector. Other countries share our and the taskforce’s concern about Iran’s nuclear activities.

[Mr Jack Straw (Blackburn) (Lab)]

rose—

[Mr Hoban]

I will finish this paragraph and then give way.

That includes the US and Canada, which implemented further restrictive measures against Iran on 21 November, alongside the action that the UK took.

[Mr Straw]

I sought to intervene on the Minister when he started talking about other countries. One of the things that slightly surprise me about this measure, whatever its merits, is that only two other countries supported it, which left us rather isolated and an easy target for the thugs in Tehran. Why did the Government not discuss and then take steps to agree with as many European Union partners as possible a similar measure in advance of this measure being promulgated?

[Mr Hoban]

Given the UK’s importance as a financial centre and its interconnectedness, there was an opportunity to act to close down opportunities for banks in Iran to use our facilities. The other point is that on the day that we announced our measures, President Sarkozy wrote to us supporting our financial sanctions and also proposing sanctions on oil. There will be a further debate in the European Union about that next month at the Foreign Affairs Council, where we will push this issue further. We are working in concert, not just with our European allies but with the US and Canada, as I have said. Indeed, the EU already has strong financial sanctions in place against Iran, and introduced asset-freezing measures and travel bans against 180 Iranian individuals and entities at the beginning of this month. The EU is considering taking further measures to implement that, and we will be pushing our partners to take strong measures too.

[Mr Straw]

I am grateful to the Minister for giving way, but with great respect, I am still rather perplexed. We are members of the EU, and although I am aware of the individual-specific action that the EU is taking, that is different from the measures in this order. What I simply do not understand, just to repeat the point, is this. Whatever the merits of this measure, the manner of its introduction must leave us very isolated and exposed. Why was there such a hurry? Was it because of an American timetable, or was there some other, more commendable reason for doing it in advance of getting what I would have thought the Minister might judge to be a significant number of other nations alongside us and then making a co-ordinated announcement?

[Mr Hoban]

The Government bore in mind when making their decision the strong concerns raised by the IAEA in its November report. Indeed, the way in which it expressed them marked a step change in its level of concern compared with previous quarterly reports. The increase in concern on the part of the Financial Action Task Force about how financial systems could be used to finance terrorist acts or in other areas led to the Government’s decision to move, which was an important thing to do. It is a proportionate response to the risk posed by Iran to require the UK financial sector to cease all business relationships and transactions with the Iranian banks and their branches and subsidiaries, including the Central Bank of Iran.

[Mr Ben Wallace (Wyre and Preston North) (Con)]

Can my hon. Friend perhaps answer a technical question relating to the Treasury’s responsibilities? Is the United Kingdom in the correct legal position unilaterally to stop banks being used in trade with Iran, or could we find UK companies that abide by the European Union ruling or law, which still allows that, taking the UK Government to court to allow them to continue using those banks?

[Mr Hoban]

We are acting under powers that were put on the statute book by the previous Government. My hon. Friend will be aware that there is a licensing regime in place, and some licences have already been issued on a general basis—there are applications that I shall perhaps turn to a little later when dealing with specific examples. Permission has been given on a general basis to enable transactions to be completed, for example, so there is a regime in place. However, if my hon. Friend has particular concerns, I would encourage him to engage with Treasury officials to take them forward. I know that my hon. Friend, as chairman of the British-Iranian all-party group, has a clear interest in this subject. If there are particular concerns of which businesses are aware, I encourage them to talk to us about them.

[Jeremy Corbyn (Islington North) (Lab)]

The Minister has been speaking for about 10 minutes, during which he has come from expressing concerns about Iran’s nuclear activities to discussing financial regulations. He would, however, recognise that Iran remains a signatory to the nuclear non-proliferation treaty. Does the Minister not think that a serious diplomatic initiative by all members subscribed to the nuclear non-proliferation treaty would be a more fruitful way of dealing with the issue, rather than descending to what some of us fear will be a much more serious situation, including possible military conflict with Iran?

[Mr Hoban]

The purpose of the order is not to enable debate of the broader issues of engagement with Iran, but to put in place financial restrictions against Iran. As I said earlier, there is a twin-track approach of both engagement and sanctions, where appropriate. That is what we are doing. I think we would all want Iran to come back and engage in this process; we need to find a mechanism for that to happen.

Let me return to explaining why we have imposed the restrictions in the order. Iranian banks play a crucial role in providing financial services to individuals and entities within Iran’s nuclear and ballistic missile programmes. Many Iranian banks have already been sanctioned by the UN and the EU for their role in Iran’s proliferation-sensitive activities. However, experience under existing financial sanctions against Iran demonstrates that targeting individual Iranian banks is no longer sufficient. Once one bank is targeted, a new one can step into its place.

Taking this action will also protect the UK financial sector from the risk of being used unwittingly to facilitate activities that support Iran’s nuclear and ballistic missile programmes. As I said to the hon. Member for Islington North (Jeremy Corbyn), the action is in line with the Government’s dual-track strategy of pressure and engagement with Iran. The aim of the pressure track is to encourage Iran to begin serious and meaningful negotiations.

Let me explain the specifics of the order. It was made under schedule 7 to the Counter-Terrorism Act 2008, which provides the Treasury with the power to give a range of restrictions to UK credit and financial institutions in response to certain risks to the UK national interest. The power enables the Treasury to respond to proliferation risks, money laundering and terrorist-financing risks, or where the Financial Action Task Force calls for counter-measures. The restrictions in the order sit alongside sanctions already imposed on Iran by the UN and the EU, but go further, as they prohibit additional activities.

The restrictions came into force at 3 pm on 21 November 2011; shortly after that, the Treasury published a series of documents on its public website to alert the financial sector to the restrictions and to provide detailed guidance on their implementation. Those documents were also e-mailed to more than 13,000 subscribers to our e-mail alert system. In previous debates on these measures, one concern raised by the Opposition was about how we ensure that people are made aware of the restrictions.

[Paul Flynn]

Will the Minister give way?

[Mr Hoban]

I want to make some progress. This is a time-limited debate, and in looking at the number of Members present on both sides of the House, I am conscious that others wish to participate.

The Treasury asked various supervisors, including the Financial Services Authority, Her Majesty’s Revenue and Customs and other Government organisations, to publicise the restrictions and to provide information to firms on the requirements associated with them. Alongside the order, we published six general licences exempting specific activities from the restrictions. Those 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 and controlled way. The licences permit the provision of financial services for humanitarian purposes and of 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. This approach is similar to that used in asset-freezing measures.

The restrictions apply requirements to persons operating in the UK financial sector, including FSA-authorised firms, money service businesses and insurers. Firms are required to establish whether any current or future business relationships or transactions are affected and comply with the requirements of the restrictions. Although the restrictions are given only to the financial sector, they will make it more difficult for other companies to trade with Iran. The UK Government actively discourage trade with Iran, and UK trade with the country has declined by 46% during the first eight months of this year in comparison with the same period in 2010.

As I said to my hon. Friend the Member for Wyre and Preston North (Mr Wallace), companies affected by the restrictions can apply for a licence of exemption, and we are willing to grant licences where UK companies are owed money under existing contracts that can only be paid via an Iranian bank to the company’s UK account. We will examine applications on a case-by-case basis.

The use of existing procedures means that firms will already have in place systems to meet obligations relating to financial sanctions and anti-money laundering, which should assist in minimising the burden of compliance with the restrictions. All institutions operating in the UK financial sector will need to ensure that they do not undertake new transactions or enter into new business relationships with any bank incorporated in Iran, including the central bank, and branches or subsidiaries. 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 higher costs.

Supervision of compliance with the restrictions will form part of the existing supervisory regime of entities such as the FSA, Her Majesty’s Revenue and Customs, the Office of Fair Trading, and the Department for Enterprise, Trade and Innovation in Northern Ireland. It is an offence to fail to comply with the requirements of the direction or intentionally to circumvent the requirements. Breaches may be subject to civil penalties imposed by supervisors, or to criminal prosecution. The maximum criminal penalties are: a fine not exceeding the statutory maximum, £5,000, in the magistrates court; or two years’ imprisonment or an unlimited fine in the Crown court. Those penalties are equivalent to those for breach of other financial sanctions regimes such as the EU asset-freezing regime in relation to Iran. The financial services sector takes very seriously the implementation of restrictions and sanctions, and takes steps to ensure its compliance with any restrictions.

To conclude, the order was issued by the Government to respond to the severe risk that Iran’s nuclear activities pose to the UK national interest. The measure is strong but 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 encourage Iran back to the negotiating table to find a diplomatic solution. For those reasons, I commend the order to the House.

[Mr Deputy Speaker (Mr Nigel Evans)]

I remind the House that the debate can continue until no later than 6.48. After the shadow Minister has finished speaking, Members will wish to do the maths in their heads to divvy up the time. If they do not do so, in the spirit of Christmas, a time limit will be introduced.

17:37

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

As the Minister has outlined, events in Iran in recent months and weeks have been deeply concerning. It is right that we have a debate today on the nature of the British response to those troubling developments. Elements within the Iranian regime have been fomenting public discontent outwards towards other countries, partly in an attempt to stop the Iranian people looking inwards at the regime itself. The increased fuelling of hostility to the outside world is a worrying move, to which neither we nor the international community can afford to turn a blind eye.

Last month, the comprehensive and unequivocal report from the International Atomic Energy Agency made clear the fact that there is an accumulating body of evidence regarding the possible military dimensions of the nuclear programme in Iran. As the Minister has said, in the light of that, it was right that the UK, along with the US and Canada, took the decision to increase diplomatic pressure on the regime in Iran.

We welcome the Chancellor’s announcement that the UK would sever all ties with Iranian banks, including the Central Bank of Iran. As the Minister said, a position came into force on 21 November and is now formally before the House. Since then, important developments have taken place. Following the announcement of the further sanctions, the Iranian Parliament approved a Bill that called for the downgrading of diplomatic ties between Iran and the UK, and several MPs in the Iranian Parliament chanted “Death to Britain” as the measure was adopted. Within a few days, hundreds of demonstrators overran the city centre compound of the British embassy in Tehran. They looted and vandalised the homes of embassy staff and set fire to the main buildings, while Britain’s second embassy compound in the north of Tehran was simultaneously attacked and looted.

I echo the Minister’s comments. I also fully support the remarks made on 30 November by the shadow Foreign Secretary, my right hon. Friend the Member for Paisley and Renfrewshire South (Mr Alexander), about the “unyielding professionalism and… bravery” of our UK diplomatic staff in Iran.

The notion that such an assault against our embassy could take place without permission, and indeed instruction, from elements in the Iranian regime is too far-fetched to be entertained, and the belated and limited response from the Iranian diplomatic police serves further to discredit such delusions. Let us be clear: this was a co-ordinated attack on two British embassy compounds by a student militia controlled by elements within the regime.

All diplomatic avenues available to the UK and the international community must surely be pursued to increase the peaceful pressure on the regime in Iran to ensure that it fulfils its responsibilities and obligations under international law, and the financial restrictions that we are discussing today should be seen in that light. The attacks on and looting of the British embassy compounds in Tehran following the measures that we are debating serve to highlight the desperation of the regime in the face of increasing pressure and isolation from the international community. It is therefore right for us to cease dealings with Iranian banks and their subsidiaries, and with the Central Bank of Iran, to avert the risk of the financing of terrorism or money-laundering activities emanating from Iran.

[Mr Straw]

May I say now what I should have said in my first intervention? I declare my interest as a co-chairman of the all-party parliamentary group on Iran, although I have absolutely no financial interest.

I am listening carefully to what my hon. Friend is saying. Does he share my significant concern about the fact that we were joined by only two other countries in advancing this proposal? If the case was as strong as is suggested, we could surely have had many others alongside us, and our diplomats would not have been exposed in Tehran as they were.

[Chris Leslie]

I understand my right hon. Friend’s point, which brings me neatly to the five questions that I wish to ask the Minister.

The Government say in the impact assessment that they want to press for further international action. They also say that

“there is a risk that the measure will be weakened by financial institutions in other countries providing financial services to Iranian banks, including in support of Iran's proliferation-sensitive activities”.

My question to the Minister echoes some of the concerns expressed by my right hon. Friend. Will he assure us that he and his Foreign Office colleagues will be active in using all available diplomatic channels to put pressure on other countries to impose sanctions similar to those bilaterally imposed by the United Kingdom, the United States and Canada? It is clear that a concerted international effort is greatly needed to put further pressure on Iran to change course.

We think it important to support the order, but some of my questions are important as well, including one concerning enforcement and penalties. We know that there have been instances of financial institutions breaking rules laid down to prevent Iran’s progress towards nuclear capability. Two years ago, in December 2009, Credit Suisse was fined $536 million in the United States for the removal of information in relation to the origination of US-bound transactions from the “Atomic Energy Organization of Iran” and the Iranian “Aerospace Industries Organization”. In January 2009 Lloyds bank was fined a substantial $350 million in the United States for similar breaches involving Iran and other international restrictions, while in August 2010 Barclays was fined $300 million.

Criminal offence and civil penalties will apply in relation to non-compliance with—or knowledge of, and intentional circumvention of—the new requirements that we are discussing. The penalties are the same as those that the enforcement authorities and courts have in respect of non-compliance under the money laundering regulations 2007—fines, imprisonment for a maximum of two years and so on. The Americans clearly take breaches very seriously, as is shown by the scale of the fines they have imposed, so my question to the Minister is: can he reassure the House that the UK will take a similarly robust approach, with penalties on a scale that reflects the seriousness of the offence, both to prevent breaches of the rules and to punish appropriately those who breach them?

My third question for the Minister relates to the explanatory memorandum, which makes it clear that a licence for exemptions from this order can be granted by the Minister on a case-by-case basis. The impact assessment states that

“it is unlikely we will license significant further exemptions for businesses as this would risk undermining the purpose of the measure”.

That is self-explanatory. We recognise that exemptions are not likely to take place on a significant scale, but will the Minister set out in what circumstances exemptions might be made to those restrictions?

My fourth question relates to the fact that the order has a time limit of a year and, under paragraph 38 of schedule 7 to the Counter-Terrorism Act 2008, the Treasury will be obliged to report every year on the exercise of its functions under that schedule. The Minister has said, as does the explanatory memorandum, that the order will be kept under review, but given the fast-moving developments and narrow time scales involved in the situation with Iran, will he commit to reporting to this House before the annual deadline if circumstances change—for instance, if negotiations on the nuclear programme were to improve or worsen? We hope that the latter would not be the case.

Lastly, will the Minister make it clear to the House, and leave no doubt about the message we are sending today to the people of Iran and to the international community more widely, that despite attacks on our channels of diplomacy with assaults on our embassy, we will not be deterred from actively and creatively pursuing all diplomatic options at our disposal to ensure that Iran upholds its responsibilities and obligations under international law? There is a widespread hope that diplomacy must prevail. We, and other nations around the globe, cannot afford to be complacent. The Opposition welcome this measure from the Treasury and hope that, with the Foreign Office, it will, as my right hon. Friend the Member for Blackburn (Mr Straw) said, be proactive in building a broader diplomatic effort across the globe to stop Iran flouting international law.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

As earlier, I ask hon. Members to look to see how many others are standing. I think that there are about nine, we have to finish in an hour’s time, and I am sure that the Minister will want three minutes or so to wind up.

17:47

[Mr Ben Wallace (Wyre and Preston North) (Con)]

May I declare an interest, as co-chair of the all-party group on Iran? I apologise to you, Mr Deputy Speaker, for the fact that I shall have to leave before the conclusion of the debate as I have to chair the group’s meeting on The Daily Telegraph versus The Guardian on the future of Iran, which we hope will be an entertaining event.

I would like to put on the record why I support the Government’s attempt to impose sanctions on financial transactions coming out of Iran. My support is not unqualified, but I support the aims and ambitions. It is absolutely clear that in the past decade or so Iran has used a plethora of its banking network to fund Hezbollah and other organisations, and to try to acquire conventional and perhaps potential nuclear parts for its programmes at home. So I understand what our Government are trying to achieve.

I would have been less supportive before June to July 2009. Before then—indeed, when I last visited Iran—whatever we may have thought of the Iranian Government, they ruled by consent, and attempts were made by a number of senior members of the Iranian Government to reform Iran. Unfortunately, after President Ahmadinejad’s last election, we have seen a clear move away from the rule of law towards a much more totalitarian state. Anyone who has contacts with the Baha’is or with mere critics of the Iranian Government will notice that these people’s human rights are constantly being exempted from the Iranian constitution under the guise of “national security”, “spying” and so on. All those traits lead me to worry about the shifting nature of the regime.

I know enough about Iranian history to put aside the rhetoric. Death to America day is still an annual event in the Iranian calendar and has been since 1981, but let us not forget that before that there were plenty of other annual events, under both shahs and even before that, which related to us, too. I put aside the rhetoric because it is a regular occurrence that the British embassy is abused. Every Tuesday rent-a-mob turn up on a bus and stones are thrown over the wall. When I was there they were pelting stones into the garden. Under the previous Government it was invaded twice, although certainly not as seriously, and without any threat. We should be in no doubt that that is certainly co-ordinated.

The antagonism towards the British embassy goes back hundreds of years to the time of the “great game”. More recently, in the ’80s, the street running parallel to it was renamed Bobby Sands avenue, just to annoy us. It is a game the Iranians play, I am afraid, and one could say that part of the Iranians’ problem is that they have too much history, not too little, to draw on.

I shall push aside the rhetoric, however, and focus on what is more worrying: the nature of the regime. I can understand that it is certainly time to send a strong message that the rule of law is the best protection for the Iranian people and the Iranian street. I mean the rule of law according to their constitution not ours, not a rule of law that we seek to impose on them. Their constitution is actually one of the few in the middle east to give automatic rights to Jews, Christians and a range of other peoples. By making those exemptions, they show the danger of the nature of regime that the west and the rest of the United Nations should seek to put right.

[Mr Brian Binley (Northampton South) (Con)]

I thank my hon. Friend for giving way, and I shall be very brief. Does not my hon. Friend agree that although the Iranians may have the constitution in place, they certainly do not act as though a constitution were in place? Therein lies the problem with human rights.

[Mr Wallace]

Absolutely. They do so less and less each day, and that is one of the major regrets for someone such as me who believes that Iran has a great future and that the west often looks to the wrong allies in the middle east in the long term. I disagree, however, with the position on the Mujahedin-e Khalq. I believe that if one of the few things the Iranians and the Americans both agree on is that the MEK should be a proscribed terrorist organisation, we should perhaps maintain that.

I have some specific questions for the Minister about the sanctions. Why did he choose to include the Central Bank of Iran? A number of cases have been brought to my attention, including one from a company in Cambridge that has gone through five regimes of British export licences, and has European as well as Treasury approval to sell engineering goods to Iran. It is owed £12 million for goods already delivered and the sanctions—either those effectively extraterritorially imposed by the United States or our own—have prevented it from getting its money. I suspect—in fact, I know—that that threatens its very viability. When I went to visit Treasury officials, the answer to the problem was that they did not really get engaged in commercial-to-commercial decisions. I am afraid that the Treasury’s decisions have caused the problem, and in the past, companies—including American companies—have used a corridor from central bank to central bank to clear certain moneys. Not so long ago, JP Morgan in New York received money from Iranians that was owed to an American/UK contractor. If they can do it, so can we.

[Bob Stewart (Beckenham) (Con)]

The only question I would ask is: would not the Iranians consider it to be part of the irritation factor not to use such a channel, if there was one? They could stop that payment, which is owed to one of our companies, just to irritate us further, even if there was such an avenue.

[Mr Wallace]

My hon. Friend would have a point if it was not for the fact that at the moment, the Iranians need our goods more than we need theirs. I meet plenty of day-to-day Iranians in business and everything else—not in my business, as I do not have any such interests—who try to do the right thing and live by the rule of law.

Secondly, I ask the Minister what our European colleagues are doing. Historically, Germany and Italy are some of the biggest traders with Iran, and my worry is that the strength of the E3 plus 3 was unity. That was its strength: we brought together the three European powers of Britain, Germany and France along with China, Russia and America. For every round of sanctions that has come before this House or the international community, there have been fewer and fewer signatories to it. As the right hon. Member for Blackburn (Mr Straw) pointed out, as we get fewer and fewer signatories we are at risk of undermining the message that says that we all agree that Iran should not be progressing along such a path.

My worry is that the Iranians are super-sensitive to such differences. They are one of the greatest trading nations in history, of course, and my word, are they canny! When I was there, there was no shortage of some of the things that were subject to sanctions. They used to use the Bahrainis as one of the greatest routes for money, goods, new cars and so on. Without Germany and without Italy, there is a real danger that we could be left high and dry.

[Mr Straw]

May I, as one of the three Foreign Ministers who got the arrangement going in the middle of 2003, underline the hon. Gentleman’s point about the E3? There were two huge advantages. One was that we were not the United States, although we consulted them, and the second was that because France, Germany and the UK were working together, each of us could reach out to a series of other allies. We did not just get three rather large countries on board but many others, too.

[Mr Wallace]

It is absolutely true that Russia and China often need to know that the west is united before they move from an agnostic position to a proactive one. One worry I have about the full closure of the embassy in Tehran is the fact that I have seen the Chinese and Russian embassies in Tehran, and the Chinese and the Russians will not waste any time in becoming the prominent voice of the E3 plus 3. I know that we have not shut down diplomatic relations, and I reiterate the importance of that.

Another thing to which the Iranians will be hypersensitive is the charge of hypocrisy in the middle east. We must always be aware of it. Pakistan is one of their neighbours, and it not only started a nuclear programme but distributed it. In fact, Mr Khan is probably the one responsible for giving the Iranian programme a bit of a boost. The response to that is that the west has done everything other than punish the Pakistanis for not being a signatory of the nuclear non-proliferation pact: therein lies part of the problem. I noticed last week that Australia has agreed to sell uranium to India. India is not a signatory of the nuclear non-proliferation pact and is not going by that rule, and although the nature of the Indian Government is entirely different, the Iranians are obsessed with treaties and they can see what is happening. We must be consistent.

The other issue is Israel, of course. This is not about the conflict or whether it is right or wrong, but Israel is another country in the middle east with a nuclear weapon that does not sign up to the UN nuclear non-proliferation regime at all. That will be used against us. As long as we are consistent and say to Iran that it must comply, but we would also like Israel to comply, that strengthens our hand.

Thirdly—and finally, because I am aware that many people wish to speak—where will we go from here on sanctions? It is important to recognise that sanctions are part of the process of trying to bring Iran back to the rule of law, and back to attempts to solve the issue by allowing inspectors in. That would allow Iran to play a full role in the world, which it should do, and would allow the Iranian leaders to understand that we are not trying to make war with Iran but to make peace and allow it to live to its full potential. The worst thing for the Treasury and this Government would not be if the sanctions failed, but a war or military intervention that would see oil prices go through the roof. I do not think that this frail economy could survive oil at $250 a barrel.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. There will now be a five-minute limit on speeches, with the usual injury time for interventions.

17:59

[Paul Flynn (Newport West) (Lab)]

The threat of war is far more serious than an increase in oil prices. The effect of a war, particularly if nuclear weapons were involved, would be almost unimaginable, particularly given the situation regarding Iran and its clients in Hezbollah and other groups. We should not treat this issue lightly or suggest that it is not important that we are seeing a new nuclear state because it would lead, I am certain, to others such as Turkey and Saudi Arabia also wishing to acquire nuclear weapons. The great fear is that a wall of sanctions can rapidly become a war of weapons. I have watched two terrible decisions being made in this House, and I believe we are on the brink of stumbling into another dreadful conflict.

When we went to join Bush’s war in Iraq, that decision was taken on the basis of a deception in the House. Eighty Labour MPs opposed the war and had signified their opposition to it, but during the debate they were bribed, bullied and bamboozled into abstaining or voting for the war. The majority on which that measure was passed was 179—coincidentally exactly the number of our brave troops who died in that war. If we had known the truth then, that war would not have taken place because 80 Labour MPs would have opposed it.

I have also seen the second-worst decision in my time here—the decision to go into Helmand province in 2006. At that time, only two British soldiers had died in the conflict. The figure is now 192. Again, the basis on which that decision was taken was the hope that not a shot would be fired and that we would be there for, at the most, three years for supervision purposes. We are now in grave danger of deepening the chasm of suspicion between ourselves and Iran.

There are reasons for saying that although the Arab awakening has not affected Iran in the same way as it has many other countries in the region, there is discontent in that country. There is division on almost all issues except one—the nuclear issue. If there is any way of guaranteeing that almost all sides of opinion in Iran join together it is the threat from outside—from us—which wants to deny it the possibility of having a nuclear power programme or the nuclear weapons that Israel, Pakistan and India already have. The great danger is that this escalation seems to be going on now. We should be seeking means of reducing the tension, building confidence and bridging the gap. We know the provocations that have taken place, but there is this grave danger. Unless we recognise the truth of the threat, we might find ourselves in another terrible situation of going along a slippery slope that could lead to warfare—in this case, possibly nuclear warfare.

18:03

[Mr Brian Binley (Northampton South) (Con)]

Let me say at the outset, in order to set my hon. Friend the Minister’s mind at rest, that I fully support the measures that the Government have taken on sanctions. I welcome the sanctions as they have been levied, but I would have wished us to have applied a whole series of sanctions in a more programmed and measured way for a longer period. However, we are where we are. The information I am getting from people inside Iran is that the sanctions are already proving quite successful, but I think the Minister mentioned that.

The action of shutting the Iranian embassy in London and downgrading our staff in Tehran desperately needs to be followed up by our European Union partners and others in the wider western world. It has been a tragedy over many years that we have consistently given messages suggesting that we were attempting to appease the mullahs as though they were friendly English vicars eating cucumber sandwiches and drinking their tea on their lawned gardens. We all know that not to be the truth, but that impression seems to have been ingrained in the Foreign Office for a long time. Every time I talk to the Foreign Office about Iran, it seems to want to bring the mullahs on board, as though any kind of appeasement would achieve a friendly outcome in which we could all eat cucumber sandwiches together. There is no hope of that, so we need to go further and apply sanctions, perhaps in the oil and gas arena, but we need the help of other nations to do that. The Germans and French seem particularly concerned about our interests at the moment, but doing that would be in their interests. We are talking about a mediaeval theocracy that is building a nuclear weapon, and that is very surprising.

Let me remind the Minister that the Iranian people had the courage and the bravery to start the first demonstration that could be described as the beginning of the middle east spring—I shall not call it the Arab spring, for obvious reasons. They were the people who recognised that their elections were corrupt and who rose up in their hundreds of thousands to make a point to a regime that they have found difficult to influence. We have talked about the constitution, but that constitution is not regarded very highly by the people who have a duty and a responsibility to operate it.

Let us look at Iran’s human rights record. Minors have been executed: Amnesty International said only a short time ago that a 16 and 17-year-old were hanged this year. Young women are being stoned, and trade unionists, students, bloggers and members of the Baha’i faith have been imprisoned and, in some cases, hanged. Three fathers who went to visit their children in Camp Ashraf in Iraq were charged on their return with moharebeh—being an enemy of God. Those three people were killed too. So much for a constitution.

This is a country that needs to see strong measures from the west and to hear strong messages that we support what is a sizeable wish for democracy and freedom. The sanctions are a measure in the right direction, but more needs to be done. I ask Ministers to make every effort to implore their fellow Ministers in the EU and beyond to send a strong message that will give hope to the people of Iran and to those Iranians who are working externally for a free and democratic Iran.

18:08

[Jeremy Corbyn (Islington North) (Lab)]

In this brief debate, we should think very carefully about the long-term implications of the path on which we are apparently setting out today. I recognise much of what was said by the hon. Members for Northampton South (Mr Binley) and for Wyre and Preston North (Mr Wallace) about human rights abuses in Iran. I draw attention to early-day motion 2526 concerning trade unionists in Iran, and there are human rights abuses against people of the Baha’i faith, Kurdish people and others. I am extremely well aware of the abuse of human rights that takes place in Iran and of the determination of many people, including working-class people, trade unionists and intellectuals, to do something about their society and to take part in that political debate. We should recognise that a lively, if robust and sometimes very dangerous, political debate is going on in Iran.

We should also think carefully about the rhetoric we use when we talk about Iran. Iran is an inheritor of the Persian tradition, a place of enormous civilisation and culture, and a place of enormous unity when faced with an external threat, as my Friend the Member for Newport West (Paul Flynn) pointed out. We should not denigrate the whole history of the Persian people and the contribution that they have made to history while ignoring our own scandalous role in their history, from the attempts at exploiting oil, which eventually led to the formation of the Anglo-Iranian Oil Company, which became BP, through to the coup in 1952 inspired by the British and the CIA. We do not have clean hands in the history of Iran, and we should have some humility when dealing with the situation there.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

To add to that point, does the hon. Gentleman agree that the last thing we should try to do now is demonise Iran?

[Jeremy Corbyn]

Absolutely. I sat in the Chamber in the run-up to the wars in Afghanistan and Iraq, when the House indulged in an orgy of demonisation of a particular country. That created a sufficient head of steam in public opinion that was deemed by the Governments of the day to endorse an invasion of those countries. I remind the House that 10 years later we are still in Afghanistan, we have spent £9 billion or £10 billion on wars in Iraq and Afghanistan, and there is no end in sight.

The reason the Minister gave for proposing the Financial Restrictions (Iran) Order 2011 to the House was that this is a banking order—a finance order—but he relied heavily on the IAEA reports and the issue of Iran’s nuclear capacity and nuclear capability. I stand here as somebody who is passionately opposed to nuclear power and nuclear weapons in equal measure. I believe nuclear power to be intrinsically environmentally unsustainable and dangerous, and I think nuclear weapons are absolutely immoral. However, I recognise that in law there is a distinction in that any country is allowed to develop nuclear power; it is not allowed to develop nuclear weapons.

Iran remains a signatory to the nuclear non-proliferation treaty. Last year’s NPT review conference came to the conclusion that the best way of bringing about a nuclear-free world—a big step—would be the creation of a nuclear-free middle east. That would, of course, mean a mechanism for negotiation involving Israel and Iran. Israel, I remind the House, has 200 nuclear warheads and the rhetoric of the Israeli leaders is strongly critical of Iran. We need to bring about a mechanism, impossible within the NPT while Israel remains outside it, and possible only within the terms of a nuclear weapons convention. I hope the Government will put considerable efforts into promoting a nuclear weapons convention, and retaining a diplomatic link and debate, negotiation and discussion within Iran.

There are those who say that the war has not started yet and there is nothing to worry about. I remind them of a number of facts. One is that the US fleet in the Gulf is enhanced and enormous. There is a US base in Bahrain. Iran shot down and captured a drone missile that had apparently strayed over the border or been deliberately sent over it, depending which narrative we care to follow. A serious and significant number of assassinations and explosions have occurred in Iran over the past few weeks, with greater and greater intensity. I do not know who is causing those explosions. It could be foreign forces; it could be internal opposition; it could be all kinds of people, but there are clearly enormous tensions. Isolating Iran in the current circumstances is more dangerous than anything else I can think of.

[Martin Horwood (Cheltenham) (LD)]

The hon. Gentleman is making some interesting points, but I am not clear whether he opposes a tougher sanctions regime. Surely a tougher regime is the peaceful means by which we will persuade Iran not to develop nuclear weapons, and therefore avoid the higher risk of another state intervening in a more aggressive and violent way.

[Jeremy Corbyn]

What I want is engagement and recognition, first, of the human rights abuses in Iran, which are clearly immoral and wrong; a great deal of attention has been drawn to those. Secondly, serious engagement is needed that does not lead us to a descent into war with all the incalculable consequences of that, not to mention very high oil prices for the rest of the world. Today’s debate is, to me, one staging post in the process. Whether the sanctions will have any effect I have no idea. I suspect they will have very limited effect, particularly as my right hon. Friend the Member for Blackburn (Mr Straw) pointed out that they are being imposed by Britain with the United States, virtually in isolation from the rest of the world.

I hope we have learned lessons about the folly and stupidity of getting involved in wars that allegedly are for our own protection, but in reality are often seen to be part of western expansionism and the assertion of US power within the whole region. We are here to make a decision on one fairly small aspect. I hope we can be a little more careful and sensible about this and recognise that there are very many people in Iran who will be united, as my Friend the Member for Newport West pointed out, in opposition to any foreign intervention and any invasion of Iran. Perhaps it is those people whom we should be thinking about now, rather than preparing for yet another war.

18:15

[Robert Halfon (Harlow) (Con)]

I welcome this debate because, contrary to what has just been said, I believe that Iran is in essence the new Soviet Union of the middle east. It supports terrorism. We know well its strong backing of Hezbollah in Lebanon. It supplies Hezbollah with the missiles and the finance that it needs to destabilise the region and to fire attack missiles on Israel. Iran also supports Hamas, and we know what Hamas has done in Gaza, overthrowing the more moderate Palestinian Authority, running a totalitarian mini-state known as Hamastan in Gaza, stopping moves towards peace and regularly firing missiles on Israel.

Iran has also undermined democratic states. Not long ago it fired missiles on to the Kurdish regional Government. It is supporting the Syrian Government of President Assad and his crackdown on the recent anti-Government protests. It has provided the Syrian authorities with equipment, advice and technical know-how to help curtail and monitor internal communications. It has provided material assistance in the form of riot and crowd dispersal material, as well as military training for Syrian troops. Hamas, Hezbollah and Syria are in essence proxies for Iran. We well know that Iran has sent suicide bombers into Iraq and attacked our troops.

All this would be bad enough were it not for Iran’s nuclear programme. As has been said, the development of the nuclear bomb in Iran is incredibly concerning. The IAEA report has been highlighted and clearly shows that Iran has been covertly developing the technology needed to weaponise nuclear material. If we think the current Iranian regime is extreme, its so-called more moderate predecessor said that it would be okay to use a nuclear bomb in the middle east against Israel, because if a few million are killed in the process, it does not matter for the wider good.

[Jeremy Corbyn]

The hon. Gentleman mentioned nuclear weapons. Does he not have concerns that Israel has 200 nuclear warheads and is not a signatory to the nuclear non-proliferation treaty? Does he not think a nuclear weapons convention including Israel would be a helpful step forward in the region?

[Robert Halfon]

I am happy for any nuclear convention to reduce nuclear weapons in the middle east, but the crucial point that the hon. Gentleman misses is that Israel is a democracy and Iran is a dictatorship.

[Mike Freer (Finchley and Golders Green) (Con)]

I agree with my hon. Friend. May I point out that it is not Israel that has threatened to wipe its neighbour off the face of the earth? Is that not the key point?

[Robert Halfon]

My hon. Friend, who is a strong supporter of Israel, is exactly right.

The one difference between Iran and the Soviet Union is that, when the Soviet Union and the west had nuclear weapons, we lived under the doctrine known as MAD, mutually assured destruction, and for MAD to work one had to be sane, but the sad fact is that Iran does not have that level of sanity, given that, as my hon. Friend says, the President often says that he wants to wipe Israel off the map. We know how the regime behaves from its recent treatment and trashing of the UK embassy, from its taking of American hostages and from its many other human rights abuses.

The hon. Member for Islington North (Jeremy Corbyn) mentioned the abuse of trade unionists and the imprisonment of women, an issue that The Times has highlighted so well, so I strongly welcome the fact that the Government have brought in the tough measures before us. This is the first time the UK has used such powers to cut off an entire country’s banking sector from our financial sector, and that is hugely important not just because of the hoped-for effect of stopping the Iranian nuclear regime, but because of the message that it sends to other tyrannical regimes throughout the world—that Britain will not be weak, but be strong and do everything it can to stop the actions of such dictators.

Although I strongly welcome these tough sanctions and praise the Treasury for having the courage to introduce them, I note that we may be too late. Iran is not far off acquiring a nuclear bomb, and we—perhaps not this country itself, but NATO—may need to take further military action to rid the world of that bomb, to put pressure on the country’s evil regime and to bring about a true democracy, with the rule of law, freedom and everything that the Iranian people deserve.

16:48

[John McDonnell (Hayes and Harlington) (Lab)]

I, too, preface my remarks by stating that I have been a consistent opponent of the regime in Iran. I founded the Hands Off the People of Iran organisation in this country to campaign for the restoration of democracy in Iran and, with my hon. Friend the Member for Islington North (Jeremy Corbyn) and the hon. Member for Northampton South (Mr Binley), have signed a number of early-day motions in support of human rights in Iran. I have focused on the persecution of trade unionists, particularly those in the Tehran bus workers union, but I also led the campaign in this country to free Jafar Panahi, the film director.

Having said all that, I am extremely fearful of the statutory instrument under consideration, because I fear that it will take us into the cul-de-sac of war, which is an all too familiar path for us in this country: we seem to find an opponent, which is usually associated with minerals or oil; we then find that it is a threat to world safety; and we then find or concoct evidence of that threat. The International Atomic Energy Agency’s recent report failed to find any conclusive evidence of nuclear weapons production and, in fact, found no evidence of Iran’s

“diversion of declared nuclear material”

to weapons production.

The report relies on past evidence, which we have debated in the House before: a laptop computer, originating we believe from the Israeli or US intelligence services and referring to the development of a nuclear weapons programme by a certain scientist, Vyacheslav Danilenko. We were told at one point that this Ukrainian was a nuclear science expert, but we now discover that he was an expert in nanotechnology and had no real expertise in nuclear weapons. We were told also that there was a technique, supposedly being developed by the Iranians, involving a test explosion chamber, but we now know from the evidence of Robert Kelly, the chief of the IAEA for eight years in Iraq, that the chamber could never be used in a test.

[Mr Binley]

Will the hon. Gentleman give way?

[John McDonnell]

I would, but we are short of time, so if the hon. Gentleman does not mind, I will not. I am sure that he understands.

All that evidence led to the conclusion by Mr Mohamed el-Baradei, the former head of the IAEA, that he had “no confidence” in the allegations based upon it, but it has convinced the new head of the IAEA, Mr Yukiya Amano. WikiLeaks has, unfortunately, exposed comments from the US on Mr Amano, however, whom it describes as

“solidly in the US court”

and “ready for prime time”.

So I begin to doubt the independence of his judgment on the matter.

It seems that we are being drawn into an atmosphere of war, and sanctions lead to war. Recent research by Professor Robert Pape of the university of Chicago demonstrates that 95.7% of cases of sanctions since world war one have led to military conflict, but who suffers? I agree with my hon. Friend the Member for Islington North that it is not the elite, but the poorest. The reaction is usually for the ruling elite to blame the ills of the country on foreign forces, and sometimes it even unites the country against a foreign foe, but the tragedy is that sanctions often motivate a regime to seek to protect itself by acquiring the very weapons that we seek to rid ourselves of.

There has been military action on the ground already. We have evidence of that from various reports—not just the drone, but intelligence assets on the ground relating to assassinations. The chair of our own parliamentary Intelligence and Security Committee could not rule out such assassinations having been undertaken by Israelis, and he confirmed that on occasions the US and Israeli Governments have given authority for assassinations.

I just want to get on the record my fear that we have trodden this path before, and that after sanctions come the bombs, then invasion, then loss of life, destabilisation and a growth in terrorism, then usually the installation of a puppet regime and the privatisation and exploitation by western countries of the mineral and oil resources. I hope against hope that we are not embarking on that tonight with this statutory instrument, but I have this dreadful fear of “Here we go again”.

18:26

[Rory Stewart (Penrith and The Border) (Con)]

In the debate about Iran, we tend to be presented with two pictures of the country: either it represents an extreme existential threat to national security, in which case any response, however aggressive, is justified; or it is not a threat at all, and therefore we do not need to do anything.

The truth is of course more complicated and tragic. Iran poses a significant threat to the United Kingdom, Europe and the United States, but our options are limited. There is not time in a five-minute speech to talk about the issues that the hon. Member for Islington North (Jeremy Corbyn) raised, but it is true that Iran is a highly complex and fragmented society. There is an elite, particularly in Tehran, Isfahan and Shiraz, who are liberal, western-friendly and progressive, but there is also an extremely conservative and isolated rural population, who provide the support base for Ahmadinejad. There is no doubt at all, however, that Iran is a priority.

Many things in which the House has become involved have not been priorities. In recent debates, we have become involved in everything from Somalia to Mauritania, and we have exaggerated the importance of Afghanistan, but Iran clearly matters—in terms of its connection to terrorism, its nuclear bomb, rights and regional stability. There is no greater potential force for regional stability or instability than Iran, but we must face the fact that our current policy of sanctions, though rational and wise, is designed to delay the development of a bomb; and we must face the fact that there is a very high probability of Iran eventually developing a bomb. It may well develop a bomb even if an Islamist Government are not in place, because an atomic bomb has become a source of national pride for many people going well beyond the Islamist supporters.

What is our appropriate response to that threat? We should continue to do the things that we are doing at the moment. First, we should ensure that we have a clear, consistent policy towards Iran. That means that we do not wish to appease the Iranian Government, or to give any impression at all that our sympathies lie with that Government. We need to be robust in our defence of Iran’s regional neighbours, because the primary threat that will be posed by an Iran in possession of a nuclear bomb, however erratic and eccentric its Government are, is unlikely to be the bomb’s deployment; it is more likely to be a considerable increase in Iran’s prestige and in its threat towards its neighbours through terrorism or border disputes.

We must also, however, do things that we are not doing enough at the moment. One is to recognise that because the problem is primarily political, the Foreign Office and our armed forces must invest more and more in area expertise and linguistic expertise in relation to Iran because that will become more and more important—either in deterring some of our allies from unwise precipitate action or in helping us support our regional neighbours.

Secondly, it would make enormous sense to diversify our energy supply. Some 30% of the oil on which western Europe and the United States depend comes through the strait of Hormuz. That is far too much. Iran has a stranglehold on us, but we can overcome it through the smart deployments of new routes of delivering oil and gas to Europe and the United Kingdom.

Finally—a new idea in the last 30 seconds—we need to change our relationship with Shi’a communities around the Arab region and in Pakistan. Too often, we have acted as though Shi’a communities are natural allies of Iran, but there is no reason for them to be so. There is no reason why Britain cannot use its history and knowledge to develop a more constructive and productive relationship with those communities. If we can get that right, continue to invest in the financial sanctions and measures that we are already taking and develop the three areas that I have identified, we can move away from a policy of lurching from extreme aggression to inaction and find a principled, moderate and passionate response.

18:31

[Andrew Percy (Brigg and Goole) (Con)]

I rise to support the motion and the words of the Minister. Some of the shadow Minister’s comments about wanting to see an international extension were perfectly reasonable, but I do not think that that alone should have prevented us from acting on our own, and acting with the United States and Canada was entirely correct.

A great deal has been said that I do not wish to repeat, although I endorse what my hon. Friend the Member for Harlow (Robert Halfon) said about comparisons between Israel’s having nuclear weapons and the acquisition of those weapons by the despotic regime in Iran. We are talking about two completely different Governments and to try to mix them up is unhelpful, to be polite about it.

I do not think that anybody who has spoken today has in the slightest attempted to denigrate or insult the history of Iran or the Iranian people. The issue that we all have is with the Iranian regime; the debate has been consensual in that we have all expressed our outrage at what that does to its own people. I do not think that those who urge us to go further are in any way seeking to denigrate the Iranian people or their history.

[Jeremy Corbyn]

I appreciate that the hon. Gentleman is not trying to denigrate anybody, but unfortunately the history of interventions is that, however supportive people are or odious the regime is, we end up with an awful lot of wholly innocent civilians being killed, as happened in Afghanistan and Iraq. None of us wants to see that in Iran.

[Andrew Percy]

I do not think that anybody wants to see conflict in Iran; more importantly, none of us wants Iran to acquire a nuclear weapon at all. We are on the same page on that one.

[Jeremy Corbyn]

We have nuclear weapons here.

[Andrew Percy]

That is a different debate for a different day, but I would rather that nuclear weapons were in the hands of the United States or this country than in the Iranian regime’s, as it is currently constituted.

The hon. Member for Hayes and Harlington (John McDonnell) commented on the International Atomic Energy Agency report—[Interruption.] I apologise for my croaky throat, Madam Deputy Speaker; it is difficult to get my words out. The hon. Gentleman’s conclusions were slightly different from those drawn by others. I want to remind him of a couple of things in that report. Crucially, the report found evidence that Iran has procured

“nuclear related and dual use equipment and materials by military related individuals and entities”;

has developed

“undeclared pathways for the production of nuclear material”;

has acquired

“nuclear weapons development information and documentation from a clandestine nuclear supply network”;

and has worked

“on the development of an indigenous design of a nuclear weapon including the testing of components”.

Further evidence is provided by the reports that we have seen about the high explosive test sites, the neutron initiator and the uranium enrichment, which all prove that Iran is closer than ever to a nuclear weapons programme.

There has also been the non-co-operation with the IAEA, of course—we know that inspectors are consistently barred from entering Iran. In some cases they have been expelled; in 2007, 38 inspectors were expelled. We can read a great deal into the response of the Iranian regime to the IAEA findings; it simply dismisses them as having been written by people acting on behalf of the United States or its western allies.

I do not think that the report’s conclusions were quite as the hon. Member for Hayes and Harlington suggested. We should be extremely concerned. It is absolutely right that we act as we have been acting and show leadership on the issue. Yes, we would like other European countries to come on board, but acting as we have, along with the United States and Canada, is right for this country and what we are all trying to achieve—Iran never getting hold of a nuclear weapon. I associate myself with many of the comments made in this debate and I endorse the position of the Government.

18:36

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

I rise to suggest to the Minister not only that it is questionable whether sanctions are working but that they may be counter-productive. I also suggest that the west underestimates its ability to influence Iran. It is a complex society with multiple centres of authority and constant power struggles. I hope that our Government will recognise that better in our diplomatic efforts.

Iran is a very wealthy country when it comes to minerals; other major powers are queuing up to gain access to its oil. That lessens the impact of sanctions from the west. Anyway, if Iran has set herself on nuclear weapons, she will not be scared away; if she has not, sanctions will, in my view, serve only to encourage her to get them.

In our discussions on Iran, we tend to forget too easily that it is a complex society justifiably proud of its history. As we have heard, the Parliament has protected rights for minorities; Iran’s 25,000 Jews are represented by a Jewish MP. We forget that there is no desecration of synagogues, which is more of a problem in Europe. We also forget that there is a well developed middle class in Iran that often disagrees with Ahmadinejad, as recent protests have illustrated.

My concern is that sanctions are counter-productive. Support for the current hardliners in Iran probably increases as a result of sanctions—Iranians responded to Bush’s talk of an axis of evil in 2002 by removing the reformist President Khatami. I suggest that the only sensible course of action is calm yet vigorous diplomacy.

[Robert Halfon]

I am incredibly grateful for my hon. Friend’s thoughtful remarks, although I come from a completely different perspective. He said that sanctions have made the regime more extreme, but some years ago there were no sanctions yet the regime became more and more extreme. Can he explain that?

[Mr Baron]

I am afraid that my hon. Friend was not listening. I did not say that sanctions made the regime more extreme, but that they reinforced the position of the hardliners within Iran, itself being a complex society. There is a difference. The only sensible option is calm yet vigorous diplomacy. We need to offer implicit recognition of Iran’s status as a major power in the region—a status that we created ourselves by castrating Iraq. There is a precedent for recognising a new status. In the 1960s, when the US presence in Asia was waning and China was beginning to flex her muscles, Nixon did not respond by denying the reality of Chinese power.

As I said, the west underestimates the opportunity to influence Iran. She is a state in transition with multiple centres of authority and constant power struggles. The challenge for the west is to influence those struggles. Crude sanctions or appeals for regime change undermine local proponents of reform by making them look like imperialist lackeys. Offering Iran a new relationship with the west could strengthen the pragmatists at the expense of the hard-liners. We can, and should, go the extra mile for peace. Much greater emphasis needs to be placed on quiet diplomacy between Iran and the west.

[Mr Binley]

Does my hon. Friend recognise that we have approached the Iranians bearing gifts in that we proscribed the MEK as a way of mollifying them and encouraging them to be our friend? None of our overtures over the past 12 years has worked. Does my hon. Friend recognise that a consistent but strong voice is now the only way to proceed, and that the last thing we want is military intervention?

[Mr Baron]

I am afraid that the Iranians have a slightly longer memory than just 12 years. They remember our support for Saddam Hussein when he invaded Iran, and many other interventions in Iran by the west are still fresh in their memories.

We need to go the extra mile for peace. Much greater emphasis needs to be placed on quiet yet vigorous diplomacy between Iran and the west. The UK is well placed to help in this effort. Despite recent measures announced by the Foreign Secretary, of the three stated enemies of Iran—the UK, the US and Israel—only one still has diplomatic relations with Iran.

[Mr Denis MacShane (Rotherham) (Lab)]

Will the hon. Gentleman give way?

[Mr Baron]

No, because we are very short of time—I apologise.

I suggest that we give diplomacy a greater chance for one final push before it is too late.

18:42

[Mr Hoban]

This has been an interesting and wide-ranging debate. As anyone listening to it will have recognised, there is a range of views about Iran and how the UK should engage with it, but there is also the common strand that everyone expressed—our concern about the proliferation of nuclear weapons and how we seek to tackle that.

In response to my hon. Friend the Member for Basildon and Billericay (Mr Baron), I say that we all want to see a diplomatic solution, but we need a process whereby there is not only engagement but pressure on the Iranian Government. At the moment, unfortunately, there are no signs to suggest that the Iranians are interested in meaningful and serious negotiations on the key issue of their nuclear programme, and it does take two parties to engage. The E3 plus 3 has been trying to negotiate with Iran, and it is not that group’s fault that the negotiations have not yet succeeded. It is Iran that needs to engage in serious negotiations.

Let me reflect on some of the comments that have been made. The right hon. Member for Blackburn (Mr Straw) and my hon. Friend the Member for Wyre and Preston North (Mr Wallace), who are co-chairmen of the all-party group on Iran and are currently at one of its meetings, asked about support for the action that the Government have taken and why we did not act in concert with EU member states. It is worth highlighting two points in that regard. We have undertaken a significant programme of lobbying internationally and continue to do so. As I said earlier, the US and Canada acted alongside us in imposing the sanctions on 21 November. However, there is a balance to be struck. Clearly, we want to encourage as many people as possible to join with us to impose these sanctions, yet at the same time there is a real sense of urgency on this issue. The risk of Iran acquiring a nuclear weapon becomes more serious as time passes, as was highlighted in stark terms by the IAEA report. We consider it imperative to act now and to encourage others to follow.

[Mr Baron]

Will my hon. Friend give way?

[Mr Hoban]

I want to make progress and conclude fairly promptly because there is a time limit on this debate.

We will engage with our European counterparts at the Council meeting next month. As I said, President Sarkozy wrote to us supporting moves for financial sanctions but also suggesting broadening them to the import of oil.

Let me turn to the points raised by the hon. Member for Nottingham East (Chris Leslie). I have dealt with his first point about putting pressure on other countries to act. His second point was about whether the UK will use significant fines to promote enforcement. As I said earlier, the civil and criminal penalties for breaching these restrictions enable the authorities to levy unrestricted fines. In the context of the civil sanction, for example, the fine should be proportionate, effective and dissuasive. I believe that the authorities take this matter seriously and will act proportionately to that.

The hon. Gentleman asked about exemptions, which relate to the licensing process that we have talked about in other situations. Some general licences are in place to deal with transactions that are already in progress. People can also apply for specific licences. Fifteen specific licences have been applied for; one has been granted and 14 are in the process of being considered. This is an ongoing process. I hope that that also addresses the point raised by my hon. Friend the Member for Wyre and Preston North.

We are committed to reporting regularly to Parliament. The Counter-Terrorism Act 2008 says that we should report as soon as possible after the calendar year in which the actions have been taken. We will endeavour to do so, and we will keep the House informed about the progress that is made.

Everyone across the House recognises the dangers that attach to nuclear proliferation. This is a process of negotiation and diplomatic engagement. We need the other party to engage in that diplomacy, too, but we should not be afraid of applying pressure to the Iranian regime where we think that that is appropriate and proportionate and will help to further our objective of keeping the world a safer place. I commend the motion to the House.

Question put and agreed to.

Resolved,

That the Financial Restrictions (Iran) Order 2011 (S.I., 2011, No. 2775), dated 21 November 2011, a copy of which was laid before this House on 21 November, be approved.

Opposition Day

Tuesday 13th December 2011 Commons Chamber

[Un-allotted Half Day]

European Union

Tuesday 13th December 2011 Commons Chamber

18:48

[Mr Nigel Dodds (Belfast North) (DUP)]

I beg to move,

That this House commends the Prime Minister on his refusal at the European Council to sign up to a Treaty without safeguards for the UK; regards the use of the veto in appropriate circumstances to be a vital means of defending the national interests of the UK; and recognises the desire of the British people for a rebalancing of the relationship with our European neighbours based on co-operation and mutually beneficial economic arrangements.

Yesterday in the House the Prime Minister referred to a period of great change in Europe. There is a sense arising out of the European Council at the weekend that something very significant has happened in the United Kingdom’s relationship with the European Union. A taboo has been broken. For the first time in living memory, a Prime Minister of the United Kingdom went to an EU summit not only prepared to say no but, in the event, actually used the veto when it became necessary in our national interest. I commend the Prime Minister for sticking to his word and wielding the veto in the circumstances that he outlined in this House last week. I have to say with regret that that is not something that we have come to expect from British Governments. We have been more used to Ministers going to crucial EU meetings in recent years and coming back having to explain why the latest EU regulation or measure is being implemented despite the implications for our national interests.

It is clear that what the Prime Minister has done has gained support from people from right across the political spectrum. That may not be reflected in some of the speeches, interventions and posturing in the House, of course, but it is clear that a large number of people from all backgrounds, whether they are Tory, Labour, Liberal Democrat or support parties in Northern Ireland, agree with what the Prime Minister has done.

[Andrew Percy (Brigg and Goole) (Con)]

May I provide my right hon. Friend with an example of that? Two of my constituents living on the Isle of Axholme wrote to me last night by e-mail to inform me that they had voted Liberal Democrat in the general election but would now vote Conservative because of our Prime Minister’s actions.

[Mr Dodds]

I am sure there will be many such messages flooding in to right hon. and hon. Members over the coming days. There is no doubt that, not for the first time, many Members are out of step with what the people think.

[Mr Denis MacShane (Rotherham) (Lab)]

Very simply, what action did the Prime Minister veto? A veto is imposed to prevent something from happening.

[Mr Dodds]

I will come on to that in detail, but he prevented a treaty from coming into place that did not have sufficient safeguards for the United Kingdom. It is a pity that when the Labour party was in government, it did not take such action to prevent some of the things that happened to this country.

[Mr John Redwood (Wokingham) (Con)]

Of course, the Prime Minister stopped a treaty for the 27. Did the right hon. Gentleman see that the statement that was issued was made only by the 17 euroland Heads of Government? The other nine have not signed up to it. That is very clear in the statement, so it is misleading to say that Britain is isolated when the other nine think it is a lousy treaty as well.

[Mr Dodds]

The right hon. Gentleman is absolutely right, and I will come to that. Even today, we are hearing of issues in Denmark and that Sweden is unlikely to sign up. In Poland, it has been pointed out that two thirds of each House will have to support what has been agreed if the country is to sign up, and it is unlikely to get that. We are hearing similar things in Finland, the Czech Republic and other countries, never mind what is going on in Germany and even France. This is potentially a watershed moment in British politics.

[Mr William Cash (Stone) (Con)]

This is a good moment to place on record the fact that the Democratic Unionist party has played a stalwart role in this whole business from the beginning. That needs to be put on the record, as part of the historic tribute that needs to be paid to that party in this matter.

[Mr Dodds]

I am very grateful to the hon. Gentleman for his kind remarks. Given that he was commended even by the leader of the Labour party in the House yesterday, those words are very welcome coming from someone with such vast experience in fighting these battles over the years.

What happened at the weekend is important not so much for the substance of the matter in itself but for the rebalancing of our relationship with the European Union that it might herald. I refer to that in our motion.

Many people say that because of the action that the Prime Minister has taken, we are now marginalised and isolated. Many of those who say that are, of course, the very same people who at one time not so long ago were urging us to join the euro. They were the people who castigated the euro-realists who dared to point out the in-built defects of the euro project. They made the same dire, doom-laden predictions then. They were wrong then, and they are wrong now.

Being outside arrangements that exist for most of the other EU members is, in any case, nothing new. For instance, the UK is not in the Schengen agreement. We were told by some that that was contrary to the spirit of being good Europeans as part of the EU, but it is absolutely right in the interests of the UK and the protection of our borders.

We heard much yesterday and over the weekend about the damage that the latest developments might do to our country’s standing in the world. For instance, we heard about how the Americans might view us. However, yesterday Hillary Clinton made very clear what she thought, saying that

“our concern has not been over the position that the UK has taken, it’s whether the decisions made by other members of the eurozone countries within the EU will work.”

With respect, that is the nub of the matter. What matters is what will happen to the eurozone.

We have talked about the role of other countries. The right hon. Member for Wokingham (Mr Redwood) referred to other countries that have not signed up, and I mentioned Sweden. It will also be interesting to see what the position is in the Irish Republic when the matter has been considered in detail. It is not so much the text of the proposal as its substance that matters in the decision whether the agreement must go to a referendum. It will be interesting to see the reaction there. It is clear, is it not, that the French Government and others have a clear policy when it comes to corporation tax? Over the years, the Irish Republic has prided itself on attracting foreign direct investment through low rates of corporation tax, and it has built its economic policy around that to a large degree. It will be watching the matter very carefully.

[Mrs Anne Main (St Albans) (Con)]

Does the right hon. Gentleman share my concern about the fact that a French MEP is suggesting this evening that Britain ought to be punished for taking a view that supports the best interests of Britain? Should countries be punished for not behaving themselves?

[Mr Dodds]

The hon. Lady is right to point to some of the vindictive language that is coming out of Europe. Indeed, President Sarkozy was talking today about consequences for the United Kingdom because of the actions that we have taken. We have to recognise that there are dangers—I think the Prime Minister talked about “risks”—in the intergovernmental approach, and I will deal shortly with what that might mean. It is one reason why we cannot let matters sit where they are. We are in an unsatisfactory position, and we need to decide how we will deal with the situation.

In France, the Opposition Socialist contender in the presidential election, François Hollande, has made it clear that if he were elected, he would seek to renegotiate any agreement that was reached, because he opposes the loss of French budgetary sovereignty. The concerns felt in the House are not some isolated, strange, esoteric or unusual position, but are shared across large parts of Europe by many parties, many of which would not be described as naturally Eurosceptic, right wing or anything of the sort. Members would do well to bear that in mind when they talk about the Government being in thrall to a small minority of MPs and others. They should recognise the reality. The idea that there is a united Europe of 26 against the UK is not correct.

Of course, many countries have to put the new euro-plus arrangements to parliamentary approval, at least, if not to a referendum. We will see what happens when they actually consider the implications of having their national budgets supervised by the European Commission, and the fact that strict rules will be imposed on their national Governments’ ability to borrow, with all the implications for sovereignty that that entails.

For all the adverse reaction from some on the Opposition and Liberal Democrat Benches yesterday, the fact is that the Prime Minister’s stance has the overwhelming backing of the people of the United Kingdom.

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

The right hon. Gentleman’s points are absolutely right. May I suggest to him that many Conservative Members believe that the veto should be the start of a process to reset our relationship with the EU, based on free trade, growth and prosperity? We want to move away from political union and dead-weight regulation. That is not some utopian dream—such a relationship already exists. I ask him to reflect on the fact that countries such as Switzerland already enjoy such a relationship with Europe, so there is no reason why we should not.

[Mr Dodds]

The hon. Gentleman is absolutely right, and I will come shortly to how we should rebalance our relationship with Europe. He is right to point to the type of relationship that we should have—one based on free trade and co-operation with our European friends and neighbours, but on a sovereign nation to sovereign nation basis.

There are those who tell us that the Prime Minister has gone against the whole thrust and approach of UK foreign policy for the past 40 to 50 years. I have no doubt that there is much wailing and gnashing of teeth in the bowels of the Foreign Office and elsewhere among the professional mandarins who have seen the EU as almost a sacred cause, to be advanced whatever the wishes of the British people or the views of the temporary occupants—as they would see it—of political office. For the mandarins, the people and those who occupy political office are to be managed and dealt with—although I am sure that that does not apply to the occupants of office in this Government.

[Martin Horwood (Cheltenham) (LD)]

The gnashing of teeth is not just among mandarins, is it? Has the right hon. Gentleman heard from the business analysts at IHS Global Insight? They said that

“the European council statement made clear that a new ‘fiscal stability union’ would seek to deepen the internal market, creating stronger fiscal and economic rules.

‘Outside this union the UK is likely to become increasingly irrelevant and marginalised’”.

Does not such concern on the part of business worry the right hon. Gentleman?

[Mr Dodds]

I have heard all that before. We heard it at the time of the UK’s withdrawal from the exchange rate mechanism and when Britain decided not to join the euro. We have heard time and again the dire warnings of doom and gloom. However, if we reach the position that the hon. Member for Basildon and Billericay (Mr Baron) outlined, of a relationship based on free trade and co-operation, it will free our economy from much of the regulation, red tape, bureaucracy and dead-weight of EU laws that currently hold us back from the true competitiveness and real growth that we need.

We have not just heard from the hon. Member for Cheltenham (Martin Horwood); we have also heard the hysterical reactions of blasts from the past such as Paddy Ashdown, Michael Heseltine and the other usual suspects. It is time the House realised that focusing our foreign policy on the narrow ground of greater Europeanism and ever closer political union in Europe is contrary to the UK’s vital interests.

We make it clear that we must and should work with our European neighbours and friends on a host of economic, political and policy issues. However, let us also recognise the enormous opportunities on the wider scene: our unique position in terms of the Commonwealth, our special relationship with the United States, and our standing in the United Nations. For too long our vision as a country has been dominated by the little Europeanists, who want to take us in only one direction. It is high time that blinkered approach was discarded.

There are those who say that what the Prime Minister did was wrong because we must do all we can to save the euro. However, as was said earlier, in considering the events of last weekend, it has been overlooked that, for all the talk about arrangements to prevent future crises, not a lot was done to instil confidence that the immediate crisis will end any time soon.

[Mr Redwood]

The right hon. Gentleman is making a good point. Did he see that if, for example, Ireland or the United Kingdom joined the so-called stability pact, they would have to make massive cuts in public spending and massive increases in taxes? It is a sort of mutually assured austerity pact.

[Mr Dodds]

Yes. For precisely that reason, I believe that when the peoples of each country—and even some of the politicians, who are currently going around saying that the UK has done a terrible thing—begin to study the detail and realise the restrictions that will now be imposed on their freedom to set their budgets and taxes, to borrow and so on, they will seriously reconsider the proposal. Having caused the greatest economic catastrophe for many decades, by creating the euro and the one-size-fits-all approach, EU leaders have come up with a bizarre answer: no comprehensive solution to deal with the immediate and pressing crisis, and no overarching deal that will properly address the problems that Greece, Italy and Spain face, but a plan to deepen and extend European integration—a plan for more treaty change and more institutional tinkering.

After all the arguments about the Lisbon treaty, we were told that Europe had learnt its lesson and that there would no more institutional debates and treaty changes. Instead, Europe was to get on with the business of trying to create jobs, growth and economic prosperity, yet here they are, at it again. There is a one-track mind among many European federalists about deepening European integration, and political and fiscal union.

[Bob Stewart (Beckenham) (Con)]

When the euro was set up, were there not strict rules on compliance for those joining, which even some of the biggest countries largely ignored? Now there is again talk about strict rules on compliance. Perhaps the boy is crying wolf; I do not believe that those rules can be enforced on countries that have shown in the past that they will not comply. They will not comply in future, either.

[Mr Dodds]

The hon. Gentleman makes a good point. He is right: in the rush to set up the euro, which was a political project from the beginning—it was believed that it would ultimately lead to political and fiscal union—those behind it permitted countries that they knew were not capable of meeting the requirements to join. What they are trying to do now will not succeed in patching the whole thing together.

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

The right hon. Gentleman is being extraordinarily generous in giving way. To support what he has just said, does he remember Romano Prodi, then President of the European Commission, on that fateful new year’s eve when the euro was brought into effect, being asked, “This is a political project, isn’t it?” and his replying, “It is an entirely political project”? Is that not why those people are so desperate to continue with it, even though it is leading to economic disaster?

[Mr Dodds]

Absolutely. The hon. Gentleman is right to remind the House of Prodi’s words at that time, of the fact that the nature of the project is explicit, and of what lies behind it.

Some people say that the Prime Minister acted to protect the City and the big banks. If it was all about that, I would not be standing here supporting the motion. We need more regulation of the banks and of those who contributed greatly to the mess in which we find ourselves. One of the questions that arises from the Vickers report is how to regulate banks more strictly, and we need to be able to go further, unfettered by the EU. I also believe in the so-called Robin Hood tax—provided that it is applied universally and not targeted mainly at London and the UK to prop up the failing euro, of which we are not part.

[David Morris (Morecambe and Lunesdale) (Con)]

On the Tobin tax, £40 billion would have been taken out of the City. Does the right hon. Gentleman agree that that would equate to £642 in taxation for every man, woman and child in this country?

[Mr Dodds]

The hon. Gentleman is right to point to the effects if the EU had targeted the financial services sector, unfairly penalising the UK. The tax revenues of which he speaks are enormous and the contribution to employment—not just directly—is significant for the UK. There are arguments for measures such as the Tobin tax, but they have to be applied universally. The UK alone should not be picked out.

Some say that the Prime Minister’s action will cost jobs and damage British business, but the EU’s share of world trade is decreasing. Who believes that the EU would want to stop exporting to a market of some 60 million people, or inhibit trade that would cost the jobs of millions of people in the EU? That simply will not happen. All the scaremongering about that, as in the past, is not based on economic reality.

We must guard against the inevitable pressure that will come—and is already coming—behind the scenes from diplomats, mandarins and others who will try to drag the Prime Minister away from his current stance and use the back door to achieve the UK’s acquiescence. The Prime Minister has already hinted at some sort of compromise on the desire of the euro-plus countries to use the EU institutions. He needs to be careful about that. If they want to do that, we need to ask what they are prepared to do for the UK in return. I hope the Prime Minister will not accede to the pressure being exerted to allow that to happen by the back door.

Of course, it is important to recognise the limits of what has happened. As a result of what happened at the Council, 26 countries—or however many it will be in the end—cannot themselves implement agreements on financial services or other things that have an impact on the single market. That must be done through the single market Council. However, therein lies a problem. Yesterday in his statement the Prime Minister alluded a couple of times to the risks involved in the intergovernmental arrangement. As I said in my contribution yesterday, the very real risk is that other EU member states will gang up on the United Kingdom and outvote us through qualified majority voting.

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

Is not the reality that nothing has changed with regard to financial services? Twenty-six cannot impose qualified majority voting; nor can 27. At the end of the day, therefore, the so-called veto was not a real veto, because 26 have gone ahead. The reality is that we still have the right to block changes in that respect under the Single European Act.

[Mr Dodds]

I do not agree with the hon. Gentleman. The Prime Minister is right to say that it would have been entirely wrong, without sufficient protections, to have a treaty that, as he put it, would have hard-wired the situation into the European Union treaties. The hon. Member for Ilford South (Mike Gapes) alluded to protections, but QMV does not provide the UK with much of a protection. As has been said already in the debate, given some of the vindictive language being used in European capitals at the moment, we must be very careful indeed. It is clear, in my view, that the status quo cannot stand in the medium to long term.

[Mr Cash]

Does the right hon. Gentleman accept that what he is saying is incredibly important in terms of the future path, because the real problems are contained in the existing treaties themselves, which need to be fundamentally changed, along with our relationship with the European Union? That is the real problem. We should not just nibble at the edges.

[Mr Dodds]

The hon. Gentleman is right in that regard. We cannot have a bloc of eurozone countries acting collectively by using its voting power at EU level to force through measures to the detriment of the UK’s national interest.

Even the Deputy Prime Minister has warned against the dangers of a club within a club. The new club will have a common interest and act collectively. The Secretary of State for Northern Ireland pointed that out in a recent article in The Spectator. He said:

“a fiscally united eurozone will spend as a bloc, tax as a bloc…and…vote as a bloc”,

and he is absolutely right.

For that reason and a host of others it is clear, as the hon. Member for Stone (Mr Cash) said, that a fundamental reassessment of our relationship with the EU is required. The Prime Minister’s use of the veto is very welcome. Saying no to Europe has been and remains almost unthinkable for some in the political elite, no matter what the cost in terms of our national interests, but the question now is: where do we go from here?

As things stand we are left with all the old familiar problems with the EU that we had before the European Council. We are left with the huge issues of loss of sovereignty and EU control of vast swathes of UK laws and policies. We are still committed as a country, because of the EU treaties, to “ever closer political union”. We remain subject, for instance, to the common fisheries policy, to the plethora of regulations and directives that stifle competitiveness and growth, and to interference in criminal justice and home affairs. Not least, we are still required to contribute almost £10 billion per year net to the EU at a time when domestic budgets are being slashed, and QMV provisions under the Lisbon treaty have reduced the areas where we can say no to EU intrusion.

[Ian Paisley (North Antrim) (DUP)]

On that £10 billion net that we contribute each year to the European Community, does my right hon. Friend agree that we would be far better exercised in determining how those resources are spent on our own fishermen, our own farmers, our own industrialists and our own banks, rather than letting bureaucrats and eurocrats determine how it is spent?

[Mr Dodds]

My hon. Friend is absolutely right.

I sometimes hear others, particularly elements of the media, and particularly the BBC—this will not be first time that hon. Members have referred to the BBC in that regard—argue the case for Europe by saying, “But look at the vast amounts of money we get.” That has sometimes been stated about Northern Ireland; my hon. Friends will deal more particularly with the situation there later. We are told, “But you’ve benefited from all these initiatives,” and so on and so forth, but the money involved is a small percentage of what we pay into Europe in the first place. In many cases it comes with so many strings and conditions attached that it would be far better if it were disbursed by our own Government or at a regional level.

The Prime Minister said yesterday in the House that

“the balance of powers between Britain and Europe is not right”—[Official Report, 12 December 2011; Vol. 537, c. 530.]

I prefer the use of the term “United Kingdom”, because Northern Ireland is an important part of this, but the Prime Minister is absolutely right. We must therefore build on what has happened.

Many talk about the need to have powers repatriated. I sympathise with their aims and objectives, but repatriation can be limited. We may gain here, but we will lose there. I think we need a more fundamental and simpler approach. We know what the British people want, we know what makes sense for the UK in the long run, and, as we say in our motion before the House, we must rebalance our relationship with our European neighbours.

The relationship must be based on free and mutually beneficial co-operation. It must be about free trade and commerce, to the mutual benefit of businesses and consumers throughout Europe—that is the best way to create growth and prosperity—and it must be about laws being made in this country by democratically elected and accountable representatives of the British people. That is the sort of relationship that people in this country want with Europe. I believe that for too long there has been a determination on the part of the political and diplomatic elites in this country to deny the people of this country any say on Europe. Ultimately, people must be given the opportunity—finally—to have their say through a referendum. I believe that the events of the weekend have brought that day closer, and I commend the motion to the House.

[Several hon. Members]

rose—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. Before I call the Minister, I inform the House that the amendment in the name of the Leader of the official Opposition has not been selected, and that after the Front-Bench opening speeches there will be an eight-minute time limit on Back-Bench speakers. That might need to be reviewed.

19:18

[The Minister for Europe (Mr David Lidington)]

I congratulate the right hon. Member for Belfast North (Mr Dodds) both on his choice of subject for today’s debate and on how he presented his case to the House. I should say that I was intending in any case—given the number of Democratic Unionist Members whom I am sure wish to participate—to keep my remarks briefer than normal and to give way less frequently than I normally try to do in debates on European policy. Your warning, Madam Deputy Speaker, on time limits reinforces the need for me to behave in that fashion.

I thank the right hon. Gentleman for his robust support for the decision that our Prime Minister took at the summit meeting last week and agree with him that the priority for the EU ought to be—for the eurozone countries in particular—fixing the immediate and urgent crisis in the eurozone, which is having a chilling effect not only on the UK economy, but on prospects for growth and job creation more generally in the global economy, and particularly the western economy. I also agree with the emphasis that he placed on the need for the EU to focus on growth, jobs and competitiveness in framing its priorities for the future.

[Mr Redwood]

Will the Minister assure me that the Government have no intention of agreeing to this fiscal pact or of letting EU institutions be used to enforce it?

[Mr Lidington]

The position on the use of the institutions was set out in some detail by my right hon. Friend the Prime Minister yesterday. The truthful response to my right hon. Friend the Member for Wokingham (Mr Redwood) is that we are at an early stage. The 26 countries agreed to a pact, but not to a legal instrument, and we do not yet know what action they plan to take. We want the new treaty—if it turns out to be a treaty—to work in stabilising the euro and putting it on a firm foundation, and we understand why those countries want to use the institutions, but it is new territory and raises important issues that we will need to explore with our colleagues in those other European countries.

In the months to come, our intention is to be engaged in the debate about how institutions that have been created and built to serve the interests of all 27 member states and not some subset should continue to operate fairly for all member states and, in particular, for the United Kingdom. We have been very supportive of the role that the institutions—in particular, the Commission—have played in safeguarding the single market, and we will look constructively at any proposals with an open mind, but we need to be clear that if this country had agreed treaty change without safeguards, there would be no discussions going on at all and no protection for important United Kingdom interests.

It is not the case that there was something extraordinary or wrong about the Prime Minister’s decision to veto agreement to a treaty at the level of 27 member states last weekend. The safeguards that he was seeking were safeguards not just for the United Kingdom, but for the whole of the European Union. They were modest, reasonable and relevant and, when they were not forthcoming, the Prime Minister made the right decision, which was to use our veto to protect our national interest.

As the right hon. Member for Belfast North said, we have heard before many of the dire warnings about isolation and retaliatory measures. We heard them when the euro was first created, and it turned out that far from joining the euro being a great opportunity for the UK and for UK business, we were well served by the decision to stay out of the single currency, and I have seen little evidence in the last couple of years to persuade me that—

[Several hon. Members]

rose—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. I am sorry to interrupt the Minister. He has indicated several times that he is not prepared to give way at this point. I hope that we can hear what he has to say now, and he may feel like giving way a little later.

[Mr Lidington]

I have already explained why I do not intend to give way as frequently as I usually do in these debates. Several of my hon. Friends have had, and will continue to have, many opportunities to put their arguments to me. I am sure that they will seize those opportunities, but tonight I am conscious that this is one of the rare occasions on which the debate belongs to the Democratic Unionist party, and I do not want their members to be crowded out because Front Benchers go on too long.

The truth is that we have always had a Europe in which there have been multiple forms of co-operation. We are not in the euro and nor do we plan to be. It is good that we have our own economic policy, interest rates and ability to deal ourselves with the problems we face in our economy. The United Kingdom remains a key—indeed, a central—member of all initiatives on European foreign and defence policy co-operation, but we are not in the Schengen borders organisation. We are a key member of the single market, and in fact it is the UK that often drives change and improvement in the single market.

On the other side of the equation, at the same time as the European Council was in progress, the British Government were working closely with EU partners to shape a successful negotiation on climate change this weekend in Durban. Our intention is to continue to work hard with our many allies in Europe to advance our interests. That is not isolation: it is defending Britain’s national interest, and that is what the Government are going to continue to do. That does not mean, as some have said, pulling back from our relationship with the European Union. We remain a full member of the European Union, and that membership is vital to our national interest. Our national interest and the EU interest are not mutually exclusive; we have genuine common interests.

[Mr Cash]

I am profoundly and deeply grateful to my right hon. Friend for giving way at last. Would he care to comment on the report in the newspapers today that the Government have already received legal advice that they can use the institutions in relation to the agreement of the 26? The European Scrutiny Committee will be looking into this matter extremely carefully and will no doubt ask him to come to give advice on that matter.

[Mr Lidington]

I look forward with my usual sense of delight to the opportunity to give evidence to my hon. Friend’s Committee. Seriously, I would be happy, as would my officials and those from other Departments, to give evidence to his Committee, but my hon. Friend has been in the House long enough to know that no Minister of any Government comments on legal advice that Ministers may or may not have received.

[Tristram Hunt (Stoke-on-Trent Central) (Lab)]

Can the Minister give us some sense of how much British taxpayers’ money has been wasted by the allocation of Foreign Office officials to talk with members of his party—the group of 81 Conservative MPs who voted for a referendum—about the repatriation of powers? Is that a good use of taxpayers’ money?

[Mr Lidington]

I actually think that it is a very good idea for officials, not only from the Foreign Office but from other Departments, to hear creative and constructive ideas, especially from Members of Parliament of all parties—and the all-party group on European reform includes members of the hon. Gentleman’s party, as well as members of mine—and from people outside Whitehall and government. The Foreign Office has a range of contacts with think-tanks and academics as well as with Members of Parliament, so that our policy making can be informed by creative ideas from outside. That seems to be a very sensible way of governing, and I am slightly shocked that the hon. Gentleman should appear to think that a closed cadre in Whitehall, insulated from of outside advice and influence, is the best way to proceed. If that is the thinking of the Labour party, it might explain the disastrous legacy that he and his colleagues bequeathed to this Government.

The German Chancellor’s spokesman said yesterday that Britain is one of Germany’s closest partners and one of her most important allies and friends; that we work very closely together on a number of different policy challenges, including within the context of the European Union; that what Britain and Germany share are key convictions on competitiveness and on what creates jobs, innovation and creativity in the economy; and that we will both continue to work to make the single market a joint success. President Sarkozy, with whom we have had one or two disagreements, said in an interview with Le Monde yesterday that he recalled our partnership in defence co-operation signed in November 2010 and our joint intervention in Libya, as well as our shared commitment to nuclear energy as part of a balanced overall energy policy. Our partnerships with France, Germany and all our European allies remain strong and dynamic.

We need not listen only to European leaders. The US Secretary of State was asked the other day whether the position that the Prime Minister took at the summit had caused her concern, given what the questioner termed “the historic bridge” that Britain had offered between Europe and the United States. Secretary Clinton replied in very clear terms:

“I have to say it does not. I think that the role that the UK has played in Europe will continue.”

I do not think that these fears of isolation, which for obvious reasons of vested interest the Opposition want to whip up, will turn out to have substance.

If the Opposition want a little more reassurance from someone whom they might trust a bit more than the German Chancellor’s official spokesman or the United States Secretary of State, I refer them to the comments of Lord Digby Jones. It is no good the shadow Foreign Secretary shaking his head. He was happy to serve in government alongside Lord Jones. In fact, the Labour members of that Government were happy to hail his recruitment as evidence that they were attracting a Government of all the talents and bringing in people from British business to strengthen their ranks—they certainly needed strengthening. Anyway, when asked whether Britain’s business interests would survive and flourish, Lord Jones said, “Definitely.” There is a clear view that our partnerships in Europe will continue and that the opportunities available for British business in Europe will continue to thrive.

[Andrew Percy]

Should we not try to regain ownership of this word “isolation”? Surely, it is not a bad thing to be isolated from something that is not in the country’s interest, that is bad for the United Kingdom and that the British public do not want to be a part of.

[Mr Lidington]

There was a time when Labour leaders were prepared to accept that sometimes there was a need to stand out on their own in defence of British interests. Tony Blair said, when he opposed the introduction of an EU-wide tax on savings, that if we are isolated and we are right, that is the correct position to be in, but as we know, the Leader of the Opposition told his party conference:

“I am not Tony Blair”.

We have yet another example of that inheritance now being disavowed by those who were happy to serve when the opportunity arose.

[Mrs Main]

Will the Minister provide a little more clarity on one point? I believe that the British public do not expect the EU institutions to be used to deliver what they could not deliver under a treaty. Will he give his view on that? If the institutions can be so used, we have been sold a pup—we will have refused something only to be given it in a different manner and in a way that we have to accept.

[Mr Lidington]

I replied to that point at some length in response to my right hon. Friend the Member for Wokingham, and I have nothing to add to those comments.

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

I thank my right hon. Friend for giving way; he is being very generous. The Labour party talks about isolation and influence, but does he recall the influence exercised by the right hon. Member for Paisley and Renfrewshire South (Mr Alexander) when he surrendered the 1984 £7 billion rebate in return for a whole load of waffle about the common agricultural policy that, of course, has resulted in precisely no action whatsoever?

[Mr Lidington]

My hon. Friend is spot on. The right hon. Gentleman was the Europe Minister when the deal was made, and it cost this country a great deal of money for no gain or reform of the CAP, despite the pledges that we were given at the time.

I want to emphasise that despite the major disagreement at last week’s summit meeting over the proposed new treaty amendment, all 27 Heads of State and Government agreed on further measures to strengthen the single market and to cut the cost of European regulation and red tape on businesses throughout the EU. As part of a long-term campaign to cut unnecessary regulation, the Prime Minister secured agreement from the European Council to endorse actions proposed in the Commission’s report on minimising the regulatory burden for small and medium-sized enterprises. Consequently, from 2012 micro-businesses employing fewer than 10 people will not be subject to European regulation, which stands to benefit 4.3 million businesses in the United Kingdom, including, I understand, about 95% of enterprises in Northern Ireland.

The European Council’s conclusions also emphasised the need to prioritise growth and the single market, and the Commission’s annual growth survey, published just ahead of the Council meeting, reflected this country’s calls for faster action to be taken to promote growth, including through the creation of a single market in the digital economy and energy.

[Ian Paisley]

I appreciate the Minister giving way on this point about business. On the pressures that the Republic of Ireland now faces, it looks like it will be forced to remove its beneficial low corporation tax as a result of this new arrangement. At the same time, however, this nation can extend to our part of the United Kingdom the right to reduce our corporation tax. I know what side of the line I would rather be on.

[Mr Lidington]

The hon. Gentleman is right to point to the risks to any country of giving up control of its tax rates to some supranational body that cannot be guaranteed always to act in the interests of any one of the nations party to the decision. It was no secret at the time of the Irish bail-out last year that the Irish Government came under enormous pressure from other EU member states to raise their corporation tax rates. As he will know, the UK Government were steadfast in supporting the Taoiseach’s resistance to that move.

I recognise what the right hon. Member for Belfast North and the hon. Member for North Antrim (Ian Paisley) said about it not always being easy to be in the EU. There are plenty of frustrations and occasions when we can see so clearly what is wrong. Any Minister from any party who has sat in European Council meetings will be able to recall times when they wanted to scream with frustration at a piece of what seemed to be unnecessary bureaucracy or expense, or at the complexity and time taken to secure reforms when agreement was needed among a collection of different Governments.

There are many areas where we would like change, but I want to make it clear that the Government’s judgment is that membership of the EU remains very much in the UK national interest. I shall briefly sketch three key areas where we believe that the benefits of our membership far outweigh the difficulties: the single market, the single voice in international trade and diplomatic leverage in foreign policy. There is little doubt that our membership of the single market has allowed us to reap the economic benefits, because the EU comprises the largest single market and most important trading zone in the world. It is bigger than the whole of the United States and Japan combined and gives British business access to 500 million consumers without customs or trade barriers.

In Northern Ireland, EU countries remain key trading partners. Export sales to Europe from Northern Ireland alone amounted to £600 million in 2010, and many Northern Ireland companies have been doing significant business in the EU for many years. The success stories include a broad range of Northern Ireland industries, from engineering to information technology, synthetic fibres, pharmaceuticals, and food and drink. Recognising where additional growth could be achieved by targeting opportunities in EU export markets is one of the keys to improving economic growth prospects for Northern Ireland. That is why for Northern Ireland, as for the whole of the UK, a resumption of growth within the EU would be of immense benefit to our own interests.

[David Simpson (Upper Bann) (DUP)]

The Minister will know that the agri-food sector is one of the biggest industries in Northern Ireland, and it could grow even more if we had a level playing field with Europe.

[Mr Lidington]

I am aware of the concerns in Northern Ireland about the operation of the common agricultural policy. As the hon. Gentleman knows much better than I do, the CAP is implemented in a way in Northern Ireland that is different from the rest of the UK. When I was in Belfast recently, the First Minister made strong representations to me about that. I ensured that they were passed on to my right hon. Friends the Chancellor and the Secretary of State for Environment, Food and Rural Affairs. The concerns of Northern Ireland are very much in the minds of British Ministers who will be negotiating these matters.

There is well documented evidence that trade integration brings wider benefits in areas such as investment and innovation. EU member states comprise seven of the United Kingdom’s top 10 trading partners and account for roughly half our overall exports of goods and services. However, the benefits go beyond exports. EU member states are the main source of foreign direct investment into the UK, with roughly half our total FDI coming from those countries.

[Tristram Hunt]

Will the Minister give way?

[Mr Lidington]

The hon. Gentleman has had a chance, and I want to make some progress.

The stock of inward foreign direct investment in the UK from the EU has risen by 800% in less than 10 years, and our membership of the EU single market helps to attract the other half of our FDI, from non-EU investors, who see the UK as a platform from which to break into European trade and access the wider single market.

[Mr Robert Walter (North Dorset) (Con)]

Will the Minister confirm to the House that Norway also has access to the single market, as a member of the European economic area, and in return has a better record in implementing EU directives, in which it has no say, than we do?

[Mr Lidington]

My hon. Friend makes the point well. Countries in the European economic area have to comply with EU regulations and implement them fully if they are to have the single market access that we enjoy by virtue of our membership. If we were in a comparable position, British business would have to meet the costs of compliance with whatever regulatory standards the UK decided to impose, in addition to the costs of meeting the differing standards of the remaining EU bloc or any of the other European countries with which they wished to trade.

[Jim Shannon (Strangford) (DUP)]

The right hon. Gentleman mentioned all the sectors that are trying to break into Europe, but there is one that cannot break in, and that is the fishing sector. Does he feel that, because of the quotas, the restrictions on days at sea and net sizes, and all the bureaucracy, the fishing industry can never really break through with Europe as it is now?

[Mr Lidington]

There is no doubt that the common fisheries policy has failed both the cause of conserving fish stocks and the cause of sustaining the livelihoods of fishing communities. It is several years ago now, but I can remember going to Portavogie, Ardglass and Kilkeel and listening first hand to fishermen and their families in Northern Ireland expressing the frustrations that the hon. Gentleman has expressed on their behalf. That is why the UK Government believe that the proposals now coming out of the Commission on reform of the common fisheries policy are, potentially, to be seriously welcomed. If they lead to a common fisheries policy based much more on regional and local management, and on rules that mean we can abolish the obscene practice of discarding, that would be of benefit to both conservationists and fishing communities alike.

The second great advantage of European Union membership is that it helps boost our international trade, because the EU’s position as a major trading power gives it weight in global negotiations and opens up new trading opportunities outside the EU for British business. The United Kingdom has already benefited from EU trade agreements with countries such as Mexico, Chile and South Korea, and is now engaged in multiple negotiations with other key trade partners, such as Canada, Singapore, India and the Mercosur nations. Let us be honest: without the size of the EU behind us, the United Kingdom on its own is unlikely to be able to secure the same deep and ambitious free trade deals with other regions or trading countries around the world. The South Korea free trade agreement alone is expected to provide £500 million of annual benefit to the United Kingdom economy. As the Northern Ireland chamber of commerce said when the deal was concluded:

“its opportunities are many and varied, and with”

Korea’s

“wealthy population, it is simply too valuable a market to be overlooked.”

The Northern Ireland chamber of commerce was right. I hope that there will be many opportunities for Northern Ireland companies in South Korea, as the EU free trade agreement is fully implemented.

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

I will leave the matter of the institutions—it is obviously too sensitive a point—but why would South Korea not have agreed a bilateral arrangement with a country such as Britain in any case, given that we are one of its allies and so on? Why would the South Koreans want to take protectionist measures against us if they are prepared to make a free trade agreement with the rest of the European Union?

[Mr Lidington]

The terms that one is able to extract in the context of such a negotiation will be more favourable if one can negotiate as part of a bloc of 500 million consumers. What the EU was able to offer South Korea collectively was access to a market of 500 million. The UK on its own would have been able to offer access to a market of 50 million to 60 million consumers. That is not an insignificant number, but it is a tenth of the size of the European Union as a whole. That difference in scale means that European countries have greater weight and leverage when they are able to get their act together and negotiate en bloc.

The third reason I believe it remains in our national interest to stay an active member of the European Union is that membership enhances our ability to influence events abroad. On issues where there is a genuine common European interest, where the national interests of the 27 member states converge, it makes sense for those member states to act together, pool our influence and speak with a united voice. One voice representing 500 million consumers is heard more loudly in Beijing, Delhi and Brasilia than 27 separate voices. However, it is equally the case that where EU member states do not agree, it is right and proper that, as sovereign nations with our own national interests, we speak and act independently. It is also right that foreign policy and security and defence policy should remain matters where unanimous agreement is required for a European position to exist.

[Andrew Percy]

Will the Minister give way?

[Mr Lidington]

My hon. Friend must forgive me, but I want to press on.

Collaboration over Libya has brought in many—although not all—European states, including Italy and Belgium. In recent months, the EU has exerted collective pressure on Libya and Syria, as well as on Côte d’Ivoire and Belarus. Different European countries have different contributions to make. Poland and other eastern partners can give us a unique perspective as we seek to support the democratic movements in the middle east and north Africa, and can also improve our insight with regard to our relations with countries such as Russia and Ukraine. Spain’s influence in Latin America will continue to shape Europe’s engagement there, and Portugal is now helping European interests on the UN Security Council. If we look at the EULEX mission alongside NATO in Kosovo, the EU civilian and military missions supporting NATO elsewhere in the Balkans or the Atalanta mission to tackle piracy off the coast of Somalia, we see operations of European civilian or military experts focusing on particular areas of expertise, often in tandem with NATO, the United Nations or national forces. Those are good examples of where European countries have been able to give themselves greater clout by being willing to act collectively.

The motion in the name of the right hon. Member for Belfast North says that the British people desire “a rebalancing of the relationship with our European neighbours”, and I agree with the hon. Member for North Antrim that there is too much centralised direction of many European policies.

The Government are committed under the coalition agreement to examining the balance of competences between Britain and the European Union, and as both the Prime Minister and the Deputy Prime Minister have said, there is a good case for rebalancing competences between the EU and its member states. Clearly, this would require the agreement of all 27 member states on the basis of negotiation and agreement, and could not be achieved through a unilateral decision. We have made no commitment to a particular outcome from this review. Work has begun and it is in its early stages.

In contrast to the Government’s positive and active commitment to make a success of our EU membership and our robust defence of our national interests, we have heard nothing from Her Majesty’s official Opposition save carping and an evasion of straight answers. Yet Labour was the party that committed us to the EU bail-out mechanism. This was the party that meekly surrendered £7 billion of Britain’s budget rebate. This is the party whose leader refuses to say whether he would have signed the treaty that was before the British Prime Minister last week, but tells the BBC in an interview:

“I don’t think Brussels has got too much power”.

It is a party whose leader still yearns to join the euro, but the only certainty is that if we followed its advice, we would not just be attending EU meetings, as we would be in the queue for a bail-out, along with some of the others.

The Government are committed to a positive and active role within the European Union—on the single market, on global trade and on foreign policy. That is what is in our national interest, but we will not be afraid to stand up and resist, refusing to participate in measures where we believe that they run contrary to the national interests of the United Kingdom.

19:51

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

It is clear that the Government are deeply divided on this issue. It is also clear that the Prime Minister and the Deputy Prime Minister are at odds, that Back Benchers are divided and that the Cabinet is divided. Perhaps the Prime Minister and the Deputy Prime Minister have more in common than we think, however, given that the Deputy Prime Minister empty-chaired the Prime Minister’s statement yesterday in much the same way as the Prime Minister walked out from the summit last week. It seems that the Deputy Prime Minister could not stomach listening to the Prime Minister trying to justify his position to relegate the UK to the outer fringes of the EU in the early hours of Friday morning. I believe that the Deputy Prime Minister was right to say on Sunday that the outcome of the summit was “bad for Britain” and bad for jobs and growth. If only he had been able to convince the Prime Minister of his opinion before the summit.

[Mr Peter Bone (Wellingborough) (Con)]

rose—

[Dr Julian Lewis]

rose—

[Mr Jenkin]

rose—

[Andrew Percy]

rose—

[Emma Reynolds]

I am not giving way for the moment.

As I understand it, the Secretary of State for Energy and Climate Change has just this evening added his voice to the chorus of criticism of the Prime Minister from Liberal Democrat Ministers so I will be interested to see whether, given that the Liberal Democrats have had three different positions in five days on this issue, they have now come to a settled position. I hope that they will oppose the motion. How could they vote for it when they are on record as saying that what happened is a bad deal for Britain?

[Mr Bone]

Will the hon. Lady say whether Her Majesty’s official Opposition are going to divide the House on this motion?

[Emma Reynolds]

Yes, we are going to divide the House, and if the hon. Gentleman had let me get to the second page of my speech, which I intend to be shorter than that of the Minister for Europe, he would have found that out.

I oppose this motion—we oppose this motion—as it bizarrely commends the Prime Minister for the outcome of last week’s summit. The truth is that it was the worst possible result for the country. We have never been so isolated: 26:1. I say to the right hon. Member for Belfast North (Mr Dodds) that there is a difference between us and the other nine non-eurozone member states because the other nine are at least in the room, contributing to a decision that will have an impact on our economy. If the eurozone crisis deepens, it will have profound implications for our economy.

[Mr Jenkin]

rose—

[Dr Julian Lewis]

rose—

[Emma Reynolds]

Now we find that the UK is in a position whereby decisions affecting us could be taken without us even having a seat at the table.

[Mr Stewart Jackson (Peterborough) (Con)]

rose—

[Mr Jenkin]

rose—

[Dr Lewis]

rose—

[Emma Reynolds]

Sometimes the veto—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. I think that the hon. Lady has indicated that she is not giving way until she has made some progress in her speech. I heard it and I am sure that hon. Gentlemen did. Perhaps they could remain in their seats for a little while, and the hon. Lady will make it clear when she wants to give way.

[Emma Reynolds]

I promise hon. Gentlemen that I will give way, but I am attempting to give a shorter speech than the one we just heard.

Sometimes a veto is necessary as a last resort, but it is a negative device that can be used to prevent change that we oppose. Back in the early 1990s, John Major used the veto at the Maastricht treaty summit. He got something in return—an opt-out from the single currency, which the Labour Government used to full effect while we were in office. However, the veto cannot be used as a positive device to force change that we want, as the Prime Minister demonstrated last week. He failed not only to secure the changes he demanded, but to stop the changes he opposed. The former Prime Minister got something in return for his veto; the current Prime Minister got nothing in return. It was a phantom veto; it failed to stop anything.

The truth is that the UK has never been outvoted on financial services in the 38 years during which we have been a member of the Common Market. The Prime Minister has defended nothing—walking out of the summit, leaving us weaker, not stronger. It is the greatest failure of peacetime diplomacy in more than half a century. Our partners do not recognise the Britain that walks away from a battle. As one French woman said in a vox pop to The Observer at the weekend:

“I’ve never seen the British give up.”

This is not the bulldog spirit; it is a form of diplomatic defeatism.

It is not surprising that other European leaders did not even give the Prime Minister a hearing. They were completely taken by surprise by a list of demands that did not seem to have anything to do with the discussions in the summit. Not one single line in the summit’s conclusion refers to financial services. Baroness Thatcher pioneered a single market to be decided by qualified majority voting and signed the Single European Act in 1986. The Prime Minister sought to overturn that decision last week, arguing for a removal of qualified majority voting in single market decisions. Needless to say, the Prime Minister’s handbag was not as powerful as Baroness Thatcher’s.

[Mr Jenkin]

I hope that the hon. Lady will make the position of her party clear. Would she have signed up to the presidency conclusions agreeing to a treaty of 27 in principle—yes or no?

[Emma Reynolds]

First, had we been in government, we would not have been asleep at the wheel for the first nine months of this year. Secondly, we would have built alliances, not burned bridges, and we would not have found ourselves in a situation at the summit in which nobody agreed with us. We had no support from any of those member states.

It is clear that the Prime Minister spectacularly mishandled the summit by failing to prepare the ground, failing to talk to European leaders in advance and failing to build alliances. The Foreign Minister of Poland, until fairly recently one of our strongest allies, singled out the UK for criticism in a recent speech. It now transpires—[Interruption.] Conservative Members might be interested to hear about this. It now transpires that even our lead diplomat in Brussels, the British permanent representative, learned of the Government’s negotiating position only 48 hours before the summit. What a cack-handed way to prepare for important negotiations. No wonder the blame game has started in Whitehall between the Treasury and the Foreign Office.

[Mike Gapes]

My hon. Friend should also be aware that none of the ambassadors, based in London, of the other 26 European Union states knew in advance what the British Government were trying to get out of this summit. How on earth could they report back to their countries in advance what might be the necessary concessions to get agreement if they were not told in advance?

[Emma Reynolds]

As my hon. Friend has eloquently pointed out, the Government’s attempt to get agreement at the summit was amateur—they did no preparation. As a result of the Prime Minister walking out of negotiations, it is even more likely, not less, that vital British interests will not be taken into account when key economic decisions are taken at EU level. The eurozone 17 and the other nine non-eurozone countries will meet more frequently and take decisions that affect the UK, without the UK being in the room. How on earth do Conservative Members think that is a success? Without a voice, British business is more vulnerable to decisions that our Government are powerless to change or influence.

[Dr Julian Lewis]

I much admire the hon. Lady’s verve and style, but everything that she says points to the conclusion that, given a choice between the only two options—to sign or not to sign—she would have signed. Is that conclusion right or wrong?

[Emma Reynolds]

I point out to the hon. Gentleman that nothing was signed at the European summit and negotiations are ongoing. A likely text might appear at the March European summit, but a text is not yet on the table. Yes, we would have stayed in the negotiations, because it is not in the national interest for decisions to proceed without us.

It is no wonder that businesses are concerned about what has happened over the last few days. Terry Scuoler, chief executive of EEF, the manufacturers’ organisation, underlined the point:

“We need the government to develop a clear strategy for engaging with other member states when in theory it could find itself isolated on occasions.”

John Cridland of the CBI has called for the Government to

“redouble its efforts to ensure that the UK is not put at an economic disadvantage”.

Angela Knight—a former Conservative Member of the House—chief executive of the British Bankers Association, has stressed:

“We do not know yet what impact this new arrangement is going to have on the UK’s ability to secure agreements on sensible regulation—but that is critical.”

The penny is also starting to drop with some parts of the British press that originally welcomed the outcome of the summit. Even The Daily Telegraph states in its editorial today that it is unclear

“whether threats to the City really have been deflected”.

The Times laments in its editorial that the Prime Minister

“has not set out a vision of where Britain now stands in the world”.

In grave economic circumstances, the prospects for families, jobs, businesses and banks across our country are now all the more stark. Growth is flatlining and unemployment is at a 17-year high. Against the backdrop of that dire economic situation, the Conservatives want us to be further isolated, as if the reckless action of the Prime Minister at last week’s summit was not enough to isolate the UK from its largest export market.

[Glyn Davies (Montgomeryshire) (Con)]

I am trying hard to understand the Opposition’s position on this complicated issue, but that is incredibly difficult without knowing whether they would have taken an affirmative or negative stance. We want not clever words about whether they would have signed, but a yes or no.

[Emma Reynolds]

It is terribly complicated, because the Government have two positions rather than one. Some hon. Members want the UK to cut itself loose completely. They will be happy only when the UK leaves the largest single market in the world. The Government’s policies are already choking off the recovery and have made us more vulnerable to the eurozone crisis. Were our membership of the European Union also in doubt, the economic consequences would be devastating. In a recent written answer to my right hon. Friend the Member for Paisley and Renfrewshire South (Mr Alexander) about the economic benefits of the EU to Britain, the Foreign Secretary replied:

“European markets account for half of the UK's overall trade and foreign investments and as a result, around 3.5 million jobs in the UK are linked to the export of goods and services to the EU.”—[Official Report, 12 July 2011; Vol. 531, c. 256W.]

Isolation could also threaten foreign direct investment.

[Mr Bone]

rose—

[Mr Stewart Jackson]

rose—

[Emma Reynolds]

I have given way to the hon. Member for Wellingborough (Mr Bone) already, so I give way to the hon. Member for Peterborough (Mr Jackson).

[Mr Jackson]

In passing, let me say that the hon. Lady owes an answer to the millions of patriotic Labour voters in the country on whether she would have signed. Is she aware, however, of a recent Civitas report, “A Cost Too Far”, which estimates the current recurring annual cost to the UK of EU membership at between at 3% and 5% of GDP, a likely figure of £40 billion a year?

[Emma Reynolds]

I say to the hon. Gentleman that all our voters are proud patriots, and so are Labour Members. In constituencies across the country, foreign companies have invested in manufacturing facilities that support millions of jobs—Nissan, Honda, Bombardier, Airbus, to name but a few. In my constituency, Indian-owned Tata Jaguar Land Rover is building a new multi-million-pound engine plant, bringing hundreds of jobs. Those companies see the UK as a useful avenue into the single market. Those investments would be at risk if the UK continues to be on the sidelines, as Martin Sorrell, chief executive of WPP, stressed only yesterday when he recounted that he had spoken to an Indian investor who is considering where to locate a plant, and it was already the investor’s perception that the UK is outside western Europe.

[George Eustice (Camborne and Redruth) (Con)]

Is the hon. Lady not aware that all the arguments about inward investment leaving Britain were made when we decided not to join the euro, and they were all proved entirely incorrect?

[Emma Reynolds]

If the hon. Gentleman remembers, it was our Government who kept this country out of the euro.

The UK’s isolation is bad not just in economic terms, but for our influence in the world. Even the Deputy Prime Minister said on Sunday that when we stand tall in the European Union, we stand tall in Washington. But it is not only our standing in Washington that is now of concern. Political and economic power is rapidly moving south and east, to Brazil, India and China. In this new multi-polar world, it is those who harbour a fanciful, nostalgic longing for the empire who naively think that the UK could be more powerful standing alone. The only game in town to further prise open markets in emerging economies and to change the rules of the trade game, is for the UK to act within the European Union—a Union that magnifies our influence. Only this weekend, at the climate change summit in Durban, we saw that by working together with our European partners, we amplify our voice on key global challenges.

[Andrew Percy]

rose—

[Emma Reynolds]

I will give way, if the hon. Gentleman will be patient.

[Andrew Percy]

I have been very patient; I am the last one to get in.

The hon. Lady talks about the issue of clarity. Will she tell my constituents what the Labour party’s position is? Would they have agreed to what was asked on Friday? Do they support further European integration? Will they rule out membership of the euro for ever? Three simple questions, to which they want three simple answers.

[Emma Reynolds]

Last but not least, a simple answer—we are not in favour of joining the euro.

The cheerleaders who toasted the Prime Minister at the welcome home party at Chequers last Friday want out of the European Union. What was once the Eurosceptic fringe of the Conservative party has now become the mainstream, as has just been demonstrated. The Prime Minister is clearly following, rather than leading, his party. Naturally, Conservative Members are happy, albeit only for the time being. The right hon. and hon. Members who now back the Prime Minister do not agree with him that our membership of the European Union is vital to our national interest. They are the same right hon. and hon. Members that he tried to get on board when he ran for his party’s leadership. He beseeched them to “stop banging on about Europe”, but they did not obey.

I am not sure what was on the menu at Chequers, but the Prime Minister should be in no doubt that his guests have an insatiable appetite. After starters of prosciutto and cured meats, they will still want steak tartare for their main course. The Prime Minister has only earned himself a gap between the entrée and the plat principal.

The Prime Minister’s actions last week were apparently taken in the face of some unidentified threat to one part of our economy, but the real objective was to toss some extra red meat to the anti-Europeans, whose appetites have now been whetted but not sated. Had the Prime Minister spent as much time and energy speaking to our European partners in the run-up to the summit as he spent pandering to his anti-European Back Benchers, we might be in a different place now—and it would be in the national interest for us to be in a different place. However, we have a Prime Minister who puts his party’s interest before the national interest, and as a result we have a bad deal for British jobs, businesses and banks. Our country needs and deserves better leadership.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. As we are running out of time, I shall impose a five-minute limit in an attempt to ensure that all who wish to speak are able to do so.

20:10

[Chris Heaton-Harris (Daventry) (Con)]

It is always a pleasure to follow the hon. Member for Wolverhampton North East (Emma Reynolds). I know that when she worked for the Socialist group in the European Parliament she was behind the scenes doing deals, but they always involved giving powers away from the United Kingdom and to the European Union. I am sure that, like me, she is desperately upset about the fact that the Deputy Prime Minister has chosen not to be a distraction in this debate either.

The motion makes three points. It

“commends the Prime Minister on his refusal at the European Council to sign up to a Treaty without safeguards for the UK”,

it mentions

“the use of the veto”,

and it refers to

“the desire of the British people for a rebalancing of the relationship with our European neighbours”.

I shall discuss all those points, and try to destroy some of the myths that have emerged from speeches made by Opposition Members.

It is fairly obvious that the British people, as well as some Members, commend the Prime Minister. I have a list of names of dozens of people who have sent e-mails supporting him. They are not Conservative party members or head-bangers. but they are passionate about this country, and I look forward to handing those e-mails to the Prime Minister in the near future.

[Mr MacShane]

Will the hon. Gentleman give way?

[Chris Heaton-Harris]

I will happily give way to the armless right hon. Gentleman.

[Mr MacShane]

I have to hold my arm up for blood-related reasons.

I have received similar e-mails. In 1983, 50% of the British people wanted to get out of the European Community, and a further 25% wanted a total renegotiation. The Labour party adopted that as its platform and its manifesto for the 1983 election. Margaret Thatcher ignored those feelings with contempt, won that election and the next one, and created the Single European Act without a referendum. What has gone so wrong with the spirit of Thatcher that today’s Conservatives are happy to betray it?

[Chris Heaton-Harris]

I must tell the right hon. Gentleman that times have changed just a tad since then. I believe that the attitudes of the parliamentary Conservative party directly reflect the attitudes of the electorate. They certainly reflect the attitudes of the electorate in England, and they would probably prove to reflect the attitudes of those in Scotland, Northern Ireland and Wales should they ever be consulted, as I hope they will be one day.

Let me say something about the veto that we supposedly exercised. I was a Member of the European Parliament, and I saw negotiations of this type up close and personal on a number of occasions. I saw the French walk out of meetings over the common agricultural policy. I enjoyed seeing the Spanish throw a magnificent strop during budget negotiations, which eventually ensured that the bulk of the Spanish fishing fleet was rebuilt or renewed at the expense of European taxpayers. Those countries were doing what most people do in business: they were setting out a negotiating position on the basis of which they could proceed. The one thing that all Members know is that this process will take months to reach fruition. At least we have the starting block of a solid negotiating position, something that earlier Governments were been unable to secure when embarking on European negotiations.

We have other vetoes that could be used in negotiations. One example is the multiannual budget financial perspective. In 2010-11, our net contribution to the European Union was £9.2 billion. We are the second largest net contributor to this club, but we ask very little in return for the money that we give. Our contributions will average about £8.5 billion for the next five years, and we should be demanding much more value for our money.

So many myths have been circulated. Today’s Financial Times—a newspaper that some people consider to be an accurate record of what is going on, as indeed it normally is—contains an article headed “MEP threat”, which states:

“A British MEP who leads the European parliament’s most powerful committee on economics and financial regulation is facing the threat of being ousted in a post-summit backlash against Britain.”

In fact such positions are decided on the basis of the number of MEPs in a political group, and the only people who can oust Sharon Bowles are fellow members of the European Liberal group. That is a complete misunderstanding, and just one of the myths that are peddled nowadays.

[George Eustice]

Does my hon. Friend expect anything different from a newspaper that thought we should join the euro, and maintained that position for several years after we had rejected the idea?

[Chris Heaton-Harris]

Yes, I do. I expect the highest standards of reporting from out national newspapers, but I take my hon. Friend’s point on board.

[Damian Collins (Folkestone and Hythe) (Con)]

Will my hon. Friend give way?

[Chris Heaton-Harris]

I will, very briefly.

[Damian Collins]

Has my hon. Friend noted that other respected financial newspapers, such as The Wall Street Journal, have congratulated the Prime Minister on the stand that he took?

[Chris Heaton-Harris]

Indeed I have.

Other myths have been circulated. It has been suggested, for instance, that the Prime Minister’s actions caused Britain to lose a seat at the table. Given that the United Kingdom was never going to take part in the Merkel-Sarkozy pact and thus potentially be subject to EU sanctions—I assume that the Opposition would be quite comfortable with that—I would not expect us to be invited to the monthly EU meetings that will start in January 2012. If the Prime Minister had signed up, the United Kingdom would still not be sitting at that table, because we are not in the eurozone, The veto changes mean nothing structurally in terms of UK influence at those meetings.

Another myth is that the Prime Minister’s veto has created a two-tier European Union. That is complete tosh. We have a eurozone of 17, and a whole new group of Schengen countries. In 2004, when we signed up to the EU accession, a group of countries decided to allow entry to workers from the accession countries, but only Britain allowed them to hold the burgundy passport immediately. Other countries decided to move at a completely different speed.

[Mr Jenkin]

Will my hon. Friend give way?

[Chris Heaton-Harris]

Very briefly.

[Mr Jenkin]

If there is a two-tier Europe, it was created by the formation of the euro, and its foundation was the Maastricht treaty. Those who supported the Maastricht treaty cannot now complain that we have a two-tier Europe, because they voted for it.

[Chris Heaton-Harris]

I entirely agree. The Prime Minister’s actions were, in fact, a timely reaction to the signs of caucusing of the 17 eurozone countries, and those countries that rely almost completely on Germany for their trade.

There are so many myths. There is, for instance, the myth perpetrated by the BBC’s Stephanie Flanders—or, at least, the person who wrote what was on her autocue—that the Prime Minister used his veto to protect a tiny part of our economy. In fact, financial services accounted for a £35 billion trade surplus last year, 2 million jobs in the United Kingdom, and £54 million paid to the Exchequer in taxes.

The truth is that these constitutional treaty changes are the result of yet another EU summit that skirted around the problem of eurozone debt without paying off one cent of it. Many commentators, and some politicians here and abroad, may well have had a fun weekend pointing fingers at the UK and pulling shocked faces at the fact that a British Prime Minister dared, after nearly two decades, to engage properly in negotiations by setting out a solid position at the beginning rather than just saying yes. Let us now get down to negotiations. Let us talk. I commend this excellent motion,.

20:18

[Mr Jeffrey M. Donaldson (Lagan Valley) (DUP)]

I rise not just to support the motion, but to commend the Prime Minister for the stance that he took at last weekend’s negotiations.

The reality is that a bandwagon driven by Germany and France is taking the EU inexorably towards a European superstate. Those countries are using the current crisis in the eurozone as a cover to advance their agenda, and the fiscal compact is deepening and strengthening their desire—and the mechanisms that go with it—to build that European superstate. Our experience in Northern Ireland, as one of the UK regions, is not a positive one in terms of EU membership. Some member states that point the finger at the UK today are the very ones that sign up to treaties and then drive a cart and horse through every rule that those treaties create, and it is this country that abides by the rules in the European Union. Time after time we are told that Euroscepticism is a bad thing, yet those who are most strong in their defence of the European Union are often those who do not play by the rules created by the EU.

[David Simpson]

Does my right hon. Friend agree that France is one of the biggest offenders in this regard?

[Mr Donaldson]

I accept that entirely. People who talk about vox pops in France and who quote the French ought to talk to the French farmers about the European Union and the rules that their Government sign up to. As my right hon. Friend the Member for Belfast North (Mr Dodds) said, it is all very well talking about Britain being left outside the door, but let us wait until this treaty gets to the people in these member states and see the response when they realise its full consequences. In Northern Ireland, we have of course seen the consequences, at times, of bad European policies. As my hon. Friend the Member for Strangford (Jim Shannon) reminded us, we have seen those consequences and the impact on our fishing industry in Northern Ireland. Our white fish fleet comprised more than 40 trawlers in 1999, but it now numbers just four—that is the result of the common fisheries policy. At the end of the 1990s, the Northern Ireland over-10 metre fleet comprised 240 vessels, but now it comprises 140—that is the result of the CFP. We could also say the same about our farmers, because although there have undoubtedly been some benefits, small farmers have paid a very high price for the common agricultural policy. The directives that have been imposed on agriculture have presented a real challenge for many farmers across the United Kingdom, not least those in Northern Ireland.

[Mr MacShane]

On that very technical point, I would not object if the CAP were abolished, but what would a British agricultural policy—a BAP—look like? How much would it cost in taxpayer subsidies to keep our farmers, small and large, going as we would wish? Has anybody done the figures?

[Mr Donaldson]

The reality is that we would spend a lot more of the £18 billion we give each year to the European Union—half of which we get back—in supporting our farmers to produce the food that our country needs, and we would do so without the kind of silly regulation that Europe imposes on us. If we had a national policy in place of the CAP, we would use our own money to help our own farmers.

The same applies to our haulage industry. I talk to hauliers in my constituency and they tell me that they do not understand these crazy regulations that are imposed at times by the European Union. Business faces the same situation. As we all know, business is struggling as a result of the recession, yet the endless stream of bureaucracy emerging from Brussels continues unabated and we continue to fund those who create those regulations, with no diminution in the budget that goes into the super-structure that is European Union bureaucracy. So, as the leader of my party has pointed out, there are many benefits to the concept of rebalancing our relationship with the European Union. There are benefits for the economy, for business, for farmers, for fishermen and for hauliers—indeed, it is difficult to see who would not benefit from such a rebalancing.

Northern Ireland is the only part of the UK with a land border with another European member state. When we look across the border, we see the Irish Government subjected to the ignominy of having to give their budget to Europe for approval—and it leaks all over the place—before their Finance Minister has the opportunity to get up in the national Parliament to tell the people of the country what their Government are doing. Many people in Dublin now regard Berlin as the capital of the Republic of Ireland, not Dublin, because that is where the real decisions are being taken about their future.

[Glyn Davies]

Does the right hon. Gentleman agree that there is a serious democratic issue to address in how Europe is developing, and not only in Italy and Greece? Having budgets approved by the European Commission means that there is a massive challenge to the whole democratic basis on which the European Union is formed.

[Mr Donaldson]

Indeed, and for that reason I pointed out that the real agenda is to build a European superstate, which is to denude nations of their democratic sovereignty. This fiscal compact exists precisely to benefit that agenda, and when a country and a nation cedes fiscal independence, it cedes a huge part of its national sovereignty. That is why DUP Members object so much to what some in the European Union are trying to do. We do not want to see the United Kingdom and our fiscal independence abrogated and given to those in Brussels, who are accountable to nobody, who were not elected by anyone in this country and who are not answerable to the Parliament or people of this country.

We have heard the Labour spokesperson talk about walking out of negotiations. I had the experience of doing that on one occasion and I still believe it was the right thing to do. I can do no better than quote the words of Mohandas Gandhi, who said:

“A ‘No’ uttered from the deepest conviction is better than a ‘Yes’ merely uttered to please, or worse, to avoid trouble.”

The Opposition would do well to listen to those words, and I am glad that the Prime Minister, for once, took them on board.

20:26

[Mr William Cash (Stone) (Con)]

The reality is that the markets are already demonstrating that there is almost no chance of the euro being saved. In addition, it is way beyond legal devices for people to claim that they will be able to stitch together an arrangement through some method of enhanced co-operation, article 136 and all the rest of it, against the background of the implosion going on outside in the eurozone, and indeed in the European Union as a whole. I am disturbed by some of the language that I have been reading in the papers. As I indicated in an intervention on my right hon. Friend the Minister for Europe, legal advice has already been given, presumably by the Foreign Office, to the Government that they will be able to stitch together some kind of device that will enable the European Commission and the European Court of Justice to give a spurious authority—a spurious jurisdiction—to the deal between the 17 plus the others that wish to join in with them.

I would go further and say that, as has been said by a number of my hon. Friends, there are indications that some of the countries concerned are beginning to realise that when they go back to their Parliaments they will have to look also to their electors. The idea of unanimity in the confines of the euro establishment’s comfy offices is not quite the same as having to face the consequences of the austerity measures, and to face up to protests and riots in some of those countries. That is where the decisions will eventually be taken, because we are talking about people; we are not talking about machines. We are not just talking about jurisdiction. There is far too much talk of trying to stitch up arrangements for the sake of convenience.

[Mr Stewart Jackson]

Is my hon. Friend not as incredulous as I am that those on the left in this country and across Europe are willing to be complicit in support for these fiscal policies? Working people in Europe will be subject to social discord, stagflation, unemployment and depression for the sake of the continuation of the European Union’s policies.

[Mr Cash]

Yes. This fantasy of a European Union and how it has developed through the existing treaties is the reason we have the crisis in Europe as a whole. That is why we need fundamental change: the existing treaties are the cause of the crisis. It is not just a question of the single markets or, for that matter, the single market—

[Ian Paisley]

rose—

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

rose—

[Mr Cash]

I will give way one more time, to the hon. Member for Linlithgow and East Falkirk (Michael Connarty) who is a member of the European Scrutiny Committee.

[Michael Connarty]

I am very grateful to the hon. Gentleman but I think he is perhaps getting carried away by his own conclusions before using logic. Clearly, the crisis that faces all the countries in Europe, and most other developed countries, comes from the profligate madness of the casino-based banking system that all the countries joined in with. The eurozone might be under greater pressure, but it is not in as bad a condition, in reality, as the US economy at this moment. It is just that, unlike the US, it is not united enough to deal with the crisis as one country.

[Mr Cash]

I understand what the hon. Gentleman is saying, but with about 47% youth unemployment in Spain and in Greece, for example, and 30% in Italy, and so on, youth unemployment is a really serious problem, and there is not the same problem in some of the other countries to which the hon. Gentleman referred.

I am afraid that both the Opposition and the Liberal Democrats are completely out of their depth on this subject. For the Deputy Prime Minister to say that this historic vote, which will change the whole future of the European Union and our relationship with it, is bad for Britain is simply absurd. I do not want to go further than that, but I want to get on the record the fact that it is irresponsible of the Deputy Prime Minister to make such a statement. To claim that influence can be retained in a room when you know in advance not only that everyone will vote against you but that they all have the power to continue to do so involves living in a fantasy world not unlike that of “Alice in Wonderland”.

Let me turn briefly to the question of this attempt, this device, this spurious method that people are trying to stitch together to give the measure some degree of authority despite all the realities of the crisis in the eurozone and in the European Union as a whole. There is an attempt to give the European Court of Justice and the European Commission some jurisdiction over this so-called separate treaty. I am not at all sure that it will be a treaty—at best it will only be an agreement—but people are calling it a treaty. I am very worried about the looseness of the language; I want just to make that point on its own.

The main objection to reinforcing the eurozone by means of an intergovernmental agreement is that the rules agreed under the European Union treaties—by which I mean EU primary legislation—by the 27 member states for the operation of the eurozone are to be modified by a separate agreement that does not have primacy over EU treaty law, and so cannot modify or be in conflict with EU treaty law, and that has not been agreed to by all 27 member states. It is vital to stick to that principle, which is at the heart of how the European Union functions. I might be critical of how the European Union has developed under the existing treaties, but those who are against us cannot have it both ways.

As for the objective, the hope seems to be that the provisions of an international agreement can be incorporated

“into the treaties of the Union as soon as possible.”

That is in the statement on the agreement. In other words, the objective of getting the arrangement stitched up into the new treaty has already been set. I must advise the Government that it will not be in their interests to give effect to the proposal through a stitch-up or a device. The European Scrutiny Committee, of course, will be considering all those questions. In addition, the EU treaties require unanimity, so in order to make such a change unanimity would be required—unanimity that would have to include the United Kingdom. That would lead to a great deal of trouble for the Government if they were to attempt to achieve a stitch-up.

20:34

[Mr Gregory Campbell (East Londonderry) (DUP)]

I support the motion. In the past year or 18 months, many people in Northern Ireland and some across the rest of the UK have attempted to sideline my party and say that the issues we would be raising in Parliament would be negligible, isolated and of interest to very few people. Only a few weeks ago we tabled a motion on the important topic of fuel poverty, and more than 200 Members joined us in the Lobby. I hope that more will join us tonight on this very important matter, which affects every man, woman and child across the length and breadth of the United Kingdom.

Almost 40 years ago a Euro-dream began, and we have seen the emergence, change and evolution of that dream, which many would argue is fast turning into a nightmare. Over the past weekend we saw its culmination, when the Prime Minister of this nation went into negotiations and, thankfully, when faced with a fait accompli, decided that it was time to say no. He was right to say no. What the Prime Minister has given to the Parliament and the people of this United Kingdom is a door-opening opportunity that we must not waste or cast to one side, but must seize with both hands.

In recent months we have seen the huge gulf—the chasm of Grand Canyon proportions—that exists between the economic development of countries such as Greece and Germany. But there is still insistence among the Europhiles that one size does fit all, when it is apparent to us all that that cannot and will not be the case. What we need, by way of opportunity, is for the competitiveness of the UK to emerge from the opportunity with which we have now been provided.

[Bob Stewart]

Is it not competitiveness within the European Union that is at fault—the competitiveness of the north against the lack of competitiveness in the south? That is what will kill the euro project, in money terms.

[Mr Campbell]

I thank the hon. Gentleman for those comments, and there is a significant amount of truth in what he says.

Here is a microcosm of some of the issues that might emerge. Some of my colleagues have mentioned the difference between the Irish Republic and Northern Ireland. Over the next few days millions of pounds will be spent in retail outlets in Northern Ireland by shoppers from the Irish Republic. That is good for the businesses of Northern Ireland, but why are they doing that? It is because only last week the Government of the Irish Republic had to announce an increase in VAT to 23%, so of course there is a 3% differential. We do not know where that 23% rate will go next year or the year after. The fact that this nation state retains the right not only to keep VAT at 20%, but possibly, I hope, over the next year, to reduce it back to 17.5%, will increase yet again the differential between the Irish Republic and Northern Ireland.

Colleagues have mentioned corporation tax. Again, that could add to the competitive advantage that we in the United Kingdom, particularly in Northern Ireland but in other regions as well, will have over other parts of the euro region, where corporation tax will be levelled at a rate that will not be similar to the current rate in the Irish Republic, but will have to be raised because of Franco-German demands.

In short, the issues are very clear. The Prime Minister has taken a stand. We commend him for that, but it must be only the beginning, not the end. We must now push the door open, ensure that we rebalance our position in relation to other nation states within the European region, and try to renegotiate a much better deal so that the £10 billion or £11 billion net that we put each year into the EU is deployed more cost-effectively to ensure that as we go forward, the competitiveness of this nation state benefits the people of this nation state.

20:40

[Martin Horwood (Cheltenham) (LD)]

I congratulate the Democratic Unionist party on a timely choice of topic and on some smart draftsmanship in the wording of the motion.

It is reasonably common knowledge that the Liberal Democrats think that the outcome of last week’s summit in Brussels was not a good one. The less important reason for the outcome being bad was that the Prime Minister felt compelled to threaten the use of a British veto. That has generated a great deal of media interest and political over-excitement, but that was not the big issue. The big issue, as the Minister rightly emphasised, is the economic and financial crisis still facing the continent of Europe and, by extension, still facing the UK economy and the global economy.

It is already pretty clear that the hundreds of billions of euros mustered by the IMF, the European stability mechanism and potentially the European Central Bank have not been enough to reassure the markets. Italy, Spain, Portugal and Greece are all still under pressure. Some people have talked as if overnight exits from the eurozone would be desirable, even if they were possible, but they would not be; they would be catastrophic. The prospect of disorderly defaults and eurozone exits would threaten wholesale bank failures, bankruptcies and insolvencies across Europe, and that is still possible. I do not think the eurozone countries have yet put in place the firepower required to avoid it.

The capacity needed by the financial institutions will probably run to trillions of euros. It is not just a short-term crisis, as some of my Eurosceptic friends have pointed out. There are long-term structural issues concerning the compatibility of the German economy with those much weaker and less competitive economies in the same currency union, and those problems have not yet been sorted out. Perhaps the structures and the rules of a new treaty or agreement, whatever form it takes, may prove to be the beginning of a solution, but the process is still a long way from complete and there are quite a few obstacles in its path, some of them sitting in this Chamber.

[Mr Cash]

As one of the immovable objects to which the hon. Gentleman refers, may I stress that we are talking about the rule of law? I am sure he would not want a device to be used that attempted to bypass the legal processes of the very treaties that he so strongly advocates.

[Martin Horwood]

Of course not, and the law will be followed, but we may find that European Governments have to gather yet again for more crisis summits in the not-too-distant future. That offers Britain a bit of an opportunity. We now need a process of positive and active diplomacy to persuade some of our more traditional allies in Europe—Ireland, Sweden, even Germany, and many others—of the benefits of having Britain fully involved not in the eurozone, but in the overall process of European economic decision making. Why? Because one of the medium to long-term solutions to Europe’s problems is to have a real focus on jobs and sustainable prosperity—jobs and prosperity in the UK, as well as in the rest of Europe because, as has been pointed out, half our trade and foreign direct investment comes from other EU members.

The argument about repatriating powers, let alone leaving the EU, completely misses the point. It is in our interest not just to have a competitive and vibrant British economy, but for there to be a competitive and vibrant European economy as well, and Britain can help to bring that about. It is not just in Britain’s interest to be at the heart of the European economy and European economic decision making; it is in Europe’s interests too, and that in turn will help British jobs, British business and British prosperity.

[Bob Stewart]

In those circumstances, would it not be wise for those people who want us to stay in to come to us and say, “Look, talk again. We want to give you what you want. We really require you”? I think Europe requires us rather more than we require Europe.

[Martin Horwood]

The hon. Gentleman makes a very good point. The Liberal Democrats supported the initial negotiating position. The mystery of last week’s summit is why we seemed to have so few friends in the negotiating chamber who would support those reasonable initial demands. That is why I am suggesting that we have a process of much more active and positive diplomacy in the run-up to what might be future summits.

[Dr Julian Lewis]

Will the hon. Gentleman give way?

[Martin Horwood]

No. I have taken two interventions, I am afraid, and time is short.

The reason we can go forward positively within Europe is that in Europe there are means of building alliances that do not depend on treaty changes or such complex and confrontational tactics. I cite in evidence the Under-Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for Kingston and Surbiton (Mr Davey), who, by collaborating with European counterparts, has lifted onerous accounting rules from the smallest businesses in Britain and created a like-minded growth group, which the UK has joined with the Czech Republic, Denmark, Estonia, Finland, Germany, Ireland, Latvia, Lithuania, Malta, the Netherlands, Poland, Slovakia, Slovenia, Sweden and Romania to tackle common priorities and establish common negotiating positions on everything from the digital sector to services, impact assessments and smarter regulation.

We have the prospect, as the Europe Minister has pointed out, of rules over fisheries being returned increasingly to the local and national levels, and that is a positive development. There is the prospect also of co-operation leading perhaps to the reform of the EU’s budget processes, and there are plenty of opportunities for a common reform agenda.

If I may finish on a positive, coalition note, I think that mainstream Conservative MPs and Liberal Democrats can absolutely unite on the need for reform.

[Dr Lewis]

Before the hon. Gentleman sits down, can he tell us whether his party will vote for the motion, against the motion, in both Lobbies or not at all?

[Martin Horwood]

Any Liberal Democrat who votes for the Democratic Unionist party motion tonight will do so extremely reluctantly, that is all I have to say.

It is a shame to try to snatch division from the jaws of unity, however, because I was finishing on a positive note. Conservatives and Liberal Democrats should unite on a reform agenda in Europe which does not necessarily require treaty change but will, I hope, be supported by other countries. Then we can build alliances and go forward positively, with the like-minded countries of Europe putting forward a positive and good plan for British jobs and British prosperity, for European jobs and European prosperity.

20:47

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

When my colleagues and I considered the motion for today’s Opposition day debate, we chose something that was both timely and relevant—namely, the UK’s relationship with the European Union. It is vital that we as elected politicians give leadership to the country in these uncertain times, and today we can do so here in the mother of Parliaments.

Some members of Her Majesty’s Opposition have expressed to me their surprise that an Opposition day motion would include the phrase “commends the Prime Minister”, but if the Prime Minister has done something worthy of commendation I do not understand why an Opposition would not rightly say so. We believe that we were correct to begin the motion in such a fashion.

The Prime Minister did what was right, and that is not always easy. As a young preacher, I was told, “Do right should the stars fall,” and, when the Prime Minister does what is right in our opinion, it is right for us to acknowledge that in the House.

[Naomi Long (Belfast East) (Alliance)]

Will the hon. Gentleman give way?

[Dr McCrea]

No. The hon. Lady has not been present for the whole debate, so I am going to take this time to respond to the issues that have already been raised.

The Prime Minister went in to the negotiations. Naturally, there were pressures on him from other European leaders. Their demand was to go with the flow, but he stood firm and resolute for the interests of the United Kingdom. He did not come back to the House waving a “Neville Chamberlain” piece of paper, but became the first Prime Minister to have the courage to veto a new European Union treaty.

There are those in the House who condemn the Prime Minister for doing that. I ask them what authority he had to do other than stand up for the interests of the United Kingdom—that is why he is Prime Minister. In the past, other Prime Ministers have gone into important negotiations and when it came to the point of decision, they did not do what was in the interests of the country—although their consciences were saying that they should do something, they were not willing to do it because it was not popular.

Politicians are vain enough to desire popularity; they love compliments, especially from others on the world stage. However, it is better to do right than be forced to do wrong. The Prime Minister stood at the Dispatch Box in the House before going to the European summit. He told the House that he would act in the best interests of the United Kingdom and that he would make certain demands to protect British interests, and if he could not get them, he would use his veto.

There is no use in someone’s talking tough and taking a weapon to defend themselves if they are not prepared to use it. The Prime Minister took the veto weapon with him into the negotiations. Angela Merkel and Nicolas Sarkozy flatly refused him even the most modest concessions simply because they believed that he would do what other Prime Ministers had done before and that he would not use the nuclear option of the veto. History had told them that Prime Ministers did not have the bottle to use the veto, and, after the huffing and puffing, would concede rather than hold firm.

[Bob Stewart]

The President of France and the Chancellor of Germany were acting in their best interests. They wanted to do a raid on the City of London—something that provides 11% of the income of this country—and take it away from us so that we could not use it. That is what the Prime Minister was defending and that was why he was in the right.

[Dr McCrea]

I agree. The European Union has been used to raiding our coffers over the years; we have been paying for many of its wonderful, unique programmes, which have in fact been an abuse of some of the finances hard earned by the people of this country.

[Emma Reynolds]

Will the hon. Gentleman confirm that the decision-making procedure for any financial transaction tax is subject to unanimity, not to qualified majority voting, and that no attempt at all was made to impose such a tax on us at last Thursday’s summit?

[Dr McCrea]

The hon. Lady has come to the Dispatch Box today, but has not yet told us what the official Opposition would have done had they been in government, so it is rich of her to ask questions of other Members about the issue.

What has happened is that Europe has been taught a salutary lesson, which it will not forget. Perhaps it will be one of the last lessons that Mr Sarkozy will face on the international stage; the presidential elections are coming and one never knows the results of those. Since the Prime Minister’s justifiable action in Brussels, many commentators have tried to suggest that he has lost credibility on the European stage. What kind of influence could our Prime Minister have had if he had failed to honour his pledge to act in the best interests of the British people? It is clear that Mr Cameron has the support of a vast number of people throughout the United Kingdom on this issue, and we want and encourage him to continue to stand firm.

I suggest that if some Liberal Democrats feel that this does not have the support of the community, they can test it in two ways. First, they could have a referendum; certainly, it would be interesting for them to support that idea, as they wanted a referendum recently on something that was also a side, rather than an important, issue. Secondly, they could allow the electorate to decide. If they thought that Mr Cameron did not have the backing of the people, they could allow an election to take place and let the electorate make their decision based on that situation.

It is absolutely disgraceful that the leader of the Liberal Democrats stayed away from the House but was happy enough to go to bed in his constituency when the Prime Minister was standing up for the interests of the United Kingdom. He was happy to agree with a certain standard, but whenever the chips were down he claimed that Mr Cameron was yielding to his Back Benchers. I suggest that the change came over Mr Clegg because he was yielding to the shouts from his own Back Benchers. We do not need Mr Flip-Flop on this issue. We need a definite stand for the interests of the United Kingdom, and I am delighted that our Prime Minister took that stand in Europe.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Before I call the next speaker, may I remind Members that they should refer to other Members by constituency, not by name?

20:55

[Damian Collins (Folkestone and Hythe) (Con)]

It was stated earlier in the debate that there was some surprise at the British negotiating position in Europe and that other member states were not fully apprised of the stand that we would take. That came as a great surprise to me, because I think that the Prime Minister was incredibly clear about what he was going to do. Last week, he wrote an article in The Times setting out what he would do, and then when he got to the negotiating chamber, and had no alternative, he did what he said he would do. Perhaps if there was surprise in Europe it was at the fact that we have a British Prime Minister who actually does what he says he is going to do and does not roll over in the negotiating chamber at the last minute in the face of pressure from other countries.

The hon. Member for Wolverhampton North East (Emma Reynolds) said that when John Major was Prime Minister he secured, under threat of veto, the British opt-out from the single currency. That is quite right. To my mind, that suggests that it was his Conservative Government who kept us out of the euro by creating the mechanism by which we could stay out. However, that was not the only opt-out that he secured at the Maastricht negotiations; he also secured the opt-outs from the social chapter and the working time directive, which were given away by the Labour Government with nothing in return. One of the reasons we now have a big debate about returning powers to this country and to this Parliament is that those opt-outs were given away, together with the powers that went with them.

As the right hon. Member for Belfast North (Mr Dodds) said, this is by no means a done deal. It is not true that we are isolated and that every other country is lined up against us and is committed to the compact that was set out by the eurozone members. It is clear from what we read in the European press today that the Parliaments of countries such as Denmark and Poland are raising severe doubts about what is in the compact. Speaking from the negotiating table itself, Hungary and the Czech Republic have said that they need to go back to their own countries to ask the permission of their Parliaments.

Given the wording in the compact, it is hardly surprising that people are starting to raise those concerns. For the sake of the record, I should like to share with Members some of the things that it says. For example, it says that the rule on deficit and debt reduction

“will contain an automatic correction mechanism that shall be triggered in the event of deviation. It will be defined by each Member State on the basis of principles proposed by the Commission…Member States shall converge towards their specific reference level, according to a calendar proposed by the Commission…the Commission will in particular examine the key parameters of the fiscal stance in the draft budgetary plans and will, if needed, adopt an opinion on these plans.”

[Mark Reckless (Rochester and Strood) (Con)]

Can my hon. Friend explain those repeated references to the Commission? I understood that the Prime Minister had said that we were not going to allow the fiscal union to use the EU institutions of the Commission and the European Court of Justice.

[Damian Collins]

My hon. Friend makes a perfectly valid point. Of course, this is only a communiqué produced by the eurozone countries, not a binding agreement. However, it is clear that these decisions will be taken at European level. It will be the Commission’s decision, or that of whatever European body is created to police this compact, to determine how quickly countries should reduce their deficit, to decide whether they are keeping on track, to propose what measures of intervention should take place if they fail to do so, and to create what it calls a common economic policy that is the stated aim and objective of these countries. If the eurozone members wish to proceed down that path, then that is a decision that they will take. It should be clear to all that Britain would never go down that path. We would never countenance such a transfer of power and sovereignty over our economic affairs to the European level. In setting out his objections and vetoing a treaty of 27, the Prime Minister clearly reinforced that point. There can have been no doubt and no surprise.

A question that has been asked is, what next for Britain and Europe? The summit in Brussels on Thursday and Friday was not about Great Britain, it was about the eurozone and its crisis. My concern, and that of other hon. Members, is that the crisis has not been fixed and that the measures that have been put in place do not provide the guarantees that the financial markets want. That makes it more likely that there will be a default in the eurozone, and that countries may leave the euro. The economic consequences of that are unknown, but most countries around the world predict that it will not help the world economy and, if anything, will make its problems greater. Europe has to overcome that problem.

European leaders may well reflect on the negotiations in Brussels and say that it would have been better to give the Prime Minister the concessions and reassurances that he was seeking rather than force us out and force us into using the veto, thereby delaying the possibility of a proper and sensible negotiation of a resolution for the eurozone crisis. That will be seen to be an error.

Turning to our own position, there has always been much talk about the amount of trading that we do with the European Union. As a bloc, it is worth more than 50% of our trade. Over the past 10 years, however, our trade with the developing economies around the world— Brazil, India, Russia and China—has been increasing, as has that of countries such as Germany. Those are large, developing consumer markets, and it is reasonable to expect our exports there to increase in relative terms and those to the European markets that have been the major home of our trade in the past to decrease in relative terms.

[Kelvin Hopkins (Luton North) (Lab)]

Of course, we have a massive trade deficit with the rest of the European Union, so it needs us more than we need it.

[Damian Collins]

The hon. Gentleman makes a clear point about our trading relationship, but the point that I was seeking to make was that in the decades to come, our trading relationship with other countries around the world will become increasingly important. The idea that the only expression of British wealth and interest comes through the EU is not correct. Also, not just us but other EU members will have to put far greater priority on developing and expanding markets in other countries. That issue of trade policy has been neglected, particularly by countries in the eurozone.

Our focus has to be on making our economy more competitive both within the European market and around the world and on developing our trade interests around the world. That should be a priority for Europe as well. The idea that we can ignore the euro crisis, the challenges that Europe faces and the challenge of the emerging and dynamic economies is false.

My concern about what happened in Brussels is not about the fact that Britain took a firm stand and made it clear that we would not be part of policies that are an outdated solution to an old problem. We see the world not as a series of competing blocs, with the EU fighting against China and the United States, but as a developing patchwork of economies that we want to engage broadly with. We took a stand for what I believe will be the future direction of the world. My concern is that other members of the European Union have missed that challenge and missed the opportunity to put their own house in order, which was what the summit was supposed to be about.

21:02

[David Simpson (Upper Bann) (DUP)]

I start by congratulating the Prime Minister on the stance that he took in the negotiations at the weekend. However, I also wish to sound a note of caution. Although he is currently on the crest of a wave and the people of the United Kingdom are backing him—rightly so, and I congratulate him again—there will be more trials ahead. As other right hon. and hon. Members have said, the journey is not over yet. There is still some way to go, and we expect, hope and trust that he will show the same grit and “bulldog spirit”, as it was put in the House last week, in doing again what he did at the weekend.

[Mr Bone]

I am sorry to interrupt the hon. Gentleman’s powerful speech, but I have listened to the speeches made from the DUP Benches and the speech made from the Liberal Democrat Benches. I ask him, is it not a great shame that you gentlemen are not sitting on the Government side of the House and those gentlemen on the Opposition side?

[David Simpson]

If that is an invitation—[Hon. Members: “Don’t be tempted.”] I will not take it further; I think that is probably an internal matter for the coalition.

[Martin Horwood]

rose—

[David Simpson]

I will not give way because time is short.

Of course, I rise to support the motion that my party has tabled. The whole of Europe—countries in the EU and outside it—faces a major crisis. It is an immediate crisis that is made worse by the drag or gravitational pull of long-term policies, treaties, agreements and directives that lock EU countries, especially those in the eurozone, into a negative economic cycle. Countries were allowed to join the euro that were simply in no fit state to do so and should never have been permitted to do so. Their admittance had nothing to do with their ability to survive and prosper with the euro, but everything to do with the ideology of those who have pressed for an EU superstate. The Republic of Ireland, Greece, Portugal, Spain and Italy were welcomed into the euro on the ground of a pro-European superstate rather than hard economic assessment.

At the same time as those fundamental weaknesses were being built into the eurozone, there were cries in the UK that we should be part of that disastrous undertaking. There were ardently pro-euro factions in the Conservative party and the Labour party. However, in both parties sanity ultimately won the day.

Many of us predicted that locking ill-equipped countries into a position whereby they could not devalue or set their own interest rates was a recipe for disaster. Some would say that, with the benefit of hindsight, Britain had a lucky escape. However, we do not need hindsight because we have history on our side—the history of the European Union and what has happened in it down the years.

From the phone calls and e-mails that I have received, I know that the general public in the United Kingdom are fed up to the back teeth with the money that we pour into Europe every year: £17 billion—£10 billion net, or, to put it in everyday terms, £200 million each day, only to see increasing red tape and an increasing desire to meddle in our courts, our immigration, our foreign policy, our tax system, our employment market and our national defence. For many people, that is simply not acceptable.

We should take the advice of the Prime Minister, who said at the end of October:

“This is the right time to sort out the eurozone’s problems, defend your national interest and look to the opportunities there may be in the future to repatriate powers back”

to the United Kingdom.

21:08

[Neil Carmichael (Stroud) (Con)]

The debate is important, and I congratulate the right hon. Member for Belfast North (Mr Dodds) on securing it. It has been thoughtful and measured, and it paves the way for a succession of debates in the same vein, which we will have to hold. As the previous speaker noted, much has yet to happen.

The Prime Minister made what he intended to do absolutely clear, and we should salute him for getting on and doing it. Not only did hon. Members and other members of the Government know it, but the Chancellor of Germany and the President of France knew it too, because they reacted calmly as if they had been pre-warned. Therefore, it must be recognised that our position was clear and the Prime Minister acted.

It is important to amplify some issues, one of which, of course, is that the events of last week mean that we will not have a referendum in the immediate future. There is no treaty to sign, and therefore no transfer of any power in any direction. Effectively, a line has been drawn under the referendum debate, unless or until another treaty is signed or another significant power is transferred. We should recognise that and move on to the next phase.

The next phase is something to which my hon. Friend the Member for Cheltenham (Martin Horwood) referred: renewing relations with many of our partners and establishing good, effective bilateral relations so that we can have a sensible dialogue on the kind of Europe we want to build. It is critical that we start thinking in terms of the competitiveness of Europe and the single market, but to do so we must have friends, a proper understanding and a long-term plan that makes sense. I therefore urge the Government to redouble their efforts to make good contacts and friends out of the 26 members.

Our interests are clearly associated with the fact that the euro must survive and become a sustainable currency, because if it does not we will all be in a big mess. We should say that and mean it. Of course, we must ensure that the compact that leads to further decisions is good enough and appropriately structured, but we also know that the US is equally interested in the future of the euro, because it, too, recognises that the world’s largest market—with the eurozone within it and a key part of it—is not the best place to have a major currency crisis.

That brings me to the use of EU institutions. The Minister for Europe made it absolutely clear that there is plenty to do in connection with the compact and beyond, so it is far too early to talk about who should or should not use EU institutions. I have two things to say about that. First, Germany, France and other countries have made their mind up to do something. If they do not use EU institutions, they will do what they want nevertheless, and we might have even less influence over what happens. We must think carefully about that fact. Secondly, if we want to repatriate powers—we have said very clearly that we do—we will want friends who will help us to do so. I do not believe that taking an intransigent view on the use of EU institutions will help in that respect at all.

My final remark is this: we have a clear and obvious interest in ensuring that the single market works and that it works well for us. We must understand its strategic importance not just to the whole of Europe, but especially to our industry and services, which depend on it. We therefore must make it one of our key objectives to play ball with those who want to make that market even more competitive and effective.

21:13

[Mark Durkan (Foyle) (SDLP)]

I commend the Democratic Unionist party for this timely motion. It is effectively an invitation to a party in our House for the Eurosceptics on the Government Benches, who have been good enough to turn up.

It is important to recognise, as the hon. Member for Stroud (Neil Carmichael) did, that we are not talking about a done deal as such. Some right hon. and hon. Members who have been cheering the Prime Minister’s position make him a hero because he stood outside what they have presented as an all-consuming, fixed done deal that can move only one way, whereas the reality is that the deal is not done. What the Prime Minister has done is take the UK out of the important, detailed negotiations that need to take place over the next few months. At a time when, given the safeguards that he and the Chancellor of the Exchequer have said they want for the eurozone and the separate safeguards they want for the UK—and at the time when they could most have used and built up key alliances in Europe—he has taken a position that says, “No, I am out of this.”

Let us remember that it is the Prime Minister and the Chancellor who, for nearly their whole time in office, have been saying that what is needed is closer fiscal union in the eurozone. They were the people who were commending a unitary fiscal position, together with the US Administration, and now the Prime Minister is being cheered because others have moved to the very fiscal compact that he advocated as necessary.

There is a danger in this debate that those who were yesterday grinning like horses chewing thistles when the Prime Minister came in to make his statement will get carried away and become over-jubilant. They might find in a few months that their celebrations and anticipation will turn out to be ephemeral. The same goes for those in other European countries who are jumping up and down with indignation and raging at the Prime Minister. They might find that a lot of their concerns are ephemeral as people concentrate on the shortcomings of the deal itself—the shortcomings that are written into the pact and the even bigger difficulties that are not accounted for in the pact at all.

We need to remember that the deal is a fairly weak construction. It will not inspire enduring confidence among investors. The extra resources remain insufficient and the failure to deliver a credible plan for growth will only worsen the debt problem in Europe. There are serious shortcomings with the Merkozy deal, but the Prime Minister’s approach should have been to point out those shortcomings and to build alliances in the months to come when those details have to be worked out further. We have seen the difficulties with all the previous deals that have come apart, and that will happen to this deal too.

The Prime Minister told us that he was going to the Council looking for certain golden rules to be put in place in the eurozone, but now he seems to be opposing a deal because people want to introduce some of those golden rules. The real issue has to be the difficulties that will be faced in achieving those rules. Let us remember that he did not tell us that he had vetoed a treaty because of its shortcomings in terms of guaranteeing fiscal discipline, stopping contagion and erecting a firewall. He told us that he stayed outside because the safeguards for the UK were not right. He would have been in a stronger position if he had focused his criticism and concern on the inadequacies of the deal per se, because he would have had alliances in times to come, including possibly assistance with his own safeguards.

We cannot afford isolationism, but we have heard talk of it tonight. Nor can we afford the vindictiveness that has been expressed in some political chambers in Europe. This is not the time to revert to predictable political postures on Europe and simply rehearse the totemic positions of our traditional European debate. Empty political certitudes are no answer to the raging economic uncertainties that face us in Europe, which do not affect just the eurozone, but fundamentally affect the sterling zone as well.

21:18

[Andrew Percy (Brigg and Goole) (Con)]

To continue the party analogy introduced by the hon. Member for Foyle (Mark Durkan), I am certainly a willing attendee, although judging by his speech he is a bit of a party pooper. I did not agree with much of what he said, but I certainly agreed with the speech by my right hon. Friend the Member for Belfast North (Mr Dodds) and others who have spoken from the Opposition Benches—if not always in opposition to us.

I want to mention the response from my constituents. Since the Prime Minister’s action on Friday, we have been inundated with e-mails, Twitter messages, answerphone messages and telephone calls to the office from people—people who voted for all different political parties—saying that the Prime Minister was absolutely right to draw a line in the sand. It has been interesting listening to the people who criticise us on this issue and the language that they use. It is the usual sort of Euro-fanaticism that we hear from them, the usual patronising guff, as I called it the last time I spoke.

[Neil Parish (Tiverton and Honiton) (Con)]

My hon. Friend is right. The Prime Minister used the veto to stop this European integration. Sitting in the European Parliament, of course, one finds that people are ever driving for greater union. This is one Prime Minister who has actually stood up for the British people. We must commend that.

[Andrew Percy]

I could not agree more with my hon. Friend, who, having been not at the heart of the EU but certainly present, knows a lot more about its workings than I would ever wish to know.

I was talking about the language used by those who object to or criticise the Prime Minister’s actions despite having no alternative plan. They say that it is ill thought out, that we are ill informed and ignorant and that we do not understand the issues. My response is this: we understand the issues perfectly well, we understand how the EU works; we just do not like it—and you know what, Mr Deputy Speaker? They need to wake up because the public do not like it either, if the response to opinion polls and in our constituency offices and e-mail inboxes is anything to go by.

Of course, these are exactly the same people who argued for us to be in the euro. We hear this nonsense from Labour Members that they were the party that kept us out of the euro. They were not at all. They would have had us in there had it not been made so politically inconvenient and difficult for them. That is why they spent so much money trying to prepare us for the euro. I suspect that quite a few of them, if they were honest, would have us in the euro at the first possible opportunity. So we will not take any criticism from the Opposition Benches—I mean the Labour Benches, not the finer Benches occupied by Irish Members.

[Angie Bray (Ealing Central and Acton) (Con)]

Does my hon. Friend think that the Leader of the Opposition would have been more successful at delivering a result during last week’s talks in Brussels, given that every time his party went into talks it said yes to everything? Surely, the fact that for once we have said no might make people sit up and listen.

[Andrew Percy]

Love thy neighbour, I say, and the Leader of the Opposition is my constituency neighbour, so I do not wish to speak ill of him, but I entirely associate myself with my hon. Friend’s words.

I want to concentrate on the Opposition’s position before saying a few words about the Minister’s response. The hon. Member for Wolverhampton North East (Emma Reynolds) did not answer my three questions: she did not say whether the Opposition have ruled out membership of the euro for ever; she did not say whether they believe that we have integrated too far and whether they are against integrating further or ceding more powers to the EU; and she did not answer my third question—one posed by many Members on both sides of the House—about what they would have done last Friday. There is this fanciful configuration under which they would have grabbed a deal—because the negotiating skills of the Leader of the Opposition are so renowned—that was good not just for Europe and the euro but for Britain. I simply do not buy it, and I strongly suspect that the British public do not either.

I want to say a few words about our valued coalition colleagues and their response over the past few days. I used to agree with a lot of what the Deputy Prime Minister said. Indeed, I clutch in my hand—although one must not use a prop, Mr Deputy Speaker—a photocopy of a Liberal Democrat election leaflet. They are mercifully thin on the ground in Brigg and Goole because we have no Liberal Democrat councillors. It is headed, “It’s time for a real referendum on Europe” and continues:

“It’s been over thirty years since the British people last had a vote on Britain’s membership of the European Union. That’s why the Liberal Democrats want a real referendum on Europe…But Labour don’t want the people to have their say. The Conservatives only support a limited referendum…Why won’t they give the people a say in a real referendum?”

The leaflet reads: “It’s time for a real referendum”.

[Martin Horwood]

Will the hon. Gentleman give way?

[Andrew Percy]

No, I have heard the hon. Gentleman’s explanation of this in the past, when he talked about a referendum at some time in the future, but this leaflet says very clearly, “It’s time for a real referendum”. People can even send it back to the real referendum petition, 4 Cowley street, London.

[Martin Horwood]

Will the hon. Gentleman give way?

[Andrew Percy]

I am not going to give way, because I have heard the nonsense about the Liberal Democrats’ manifesto commitment on this issue before, which was all about how there would be a referendum at some point in the future. However, I am afraid that the quotation given by the Deputy Prime Minister on this leaflet—he is named as “Lib Dem Leader Nick Clegg”—says:

“It’s time to give the British people a real referendum on Britain’s membership of the European Union.”

I can assume only that when this leaflet went to the printers, the bit saying, “At some point in the future, but not any time soon,” was missed off. Some people would say that the Deputy Prime Minister—

[Martin Horwood]

Will the hon. Gentleman give way?

[Andrew Percy]

I am not going to give way, so give up.

[Martin Horwood]

On a point of order, Mr Deputy Speaker. Is it in order for someone repeatedly to attack Members in the Chamber, and by implication the Liberal Democrat parliamentary party, and not give way when that is challenged?

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

I think one would say that it is a political comment rather than an attack. As both parties are joined together, I am sure that the hon. Gentleman would take it not as an attack, but as a political comment.

[Andrew Percy]

I am upset if any of my valued coalition partners thought that I was in any way besmirching their characters individually or attacking them. I am not: they are valued partners in this enjoyable coalition that we find ourselves in. However, I have said enough about the election literature.

Some people would say that the Deputy Prime Minister has acted disgracefully in the last few days. I am not going to say that. Some would say that he has acted appallingly, and I am not going to say that either. I will leave it to others to comment on that. What I would say in conclusion, however, is that I heard the Minister’s comments, and I was warmed by much of what he said. We need a little more detail about whether the institutions will be used, but I hope that last Friday shows that a line has been drawn in the sand and that we have said, “We’ve had enough integration, and the British public have had enough.” Whatever the other arguments, we have to accept that the British public are not where the political elite are in this country, but are much further on in the argument. They have looked at the European Union and they do not like it. That is why it is time we gave them a say, or at the very least ensured that nothing is given away to Brussels.

[Mr Deputy Speaker]

I remind the next speaker that we have only two minutes to go until the wind-ups.

21:26

[Ms Margaret Ritchie (South Down) (SDLP)]

I commend the Democratic Unionist party and the right hon. Member for Belfast North (Mr Dodds) for tabling the motion. However, it will be no surprise to him and his colleagues to hear that I will be in a different Lobby from them this evening.

As a committed European, I feel that there is no doubt that the Prime Minister’s unilateral decision to veto any prospective new European treaty aimed at achieving greater financial stability across the eurozone is indeed regrettable. Not only did he appear to fail to consult his coalition partners; more importantly from our perspective in Northern Ireland, he failed to consult any of the devolved Administrations, despite the fact that his actions could have profound implications for those jurisdictions. I ask the Government seriously to consider those implications in the medium and long term, because although there are many, shall we say, downsides, there are also many economic, financial and social benefits to membership of the European Union. In fact, Northern Ireland is the only part of the UK with a land and a water border with the eurozone. We are entitled to be consulted about any UK Government action that fundamentally impacts on Britain’s relationship with the eurozone. Anything short of that is, frankly, disrespectful. I hope that the Government will bring forward a solution this evening and tell us that the Prime Minister will return to the negotiating table and not turn his back on the European Union again or the opportunities that could be there for us all.

21:28

[Sammy Wilson (East Antrim) (DUP)]

It is a great joy to sum up in what has been a timely debate, touching on an issue that concerns millions of people across the United Kingdom, not only because their attention has been focused on last weekend’s events in Europe, but because of the continuing drift that we have seen. As my hon. Friend the Member for Upper Bann (David Simpson) said, on everything from foreign policy and macro-economic policy right down to the basic things that affect people’s lives every day, people are more and more concerned about the impact that Europe has on them.

A number of matters have been discussed in a good debate. Those who have opposed the motion have raised a number of issues, which I would like to go through quickly. The first is the damage done to the United Kingdom by the Prime Minister’s stance. This was epitomised by the comments of the hon. Member for Wolverhampton North East (Emma Reynolds) as shadow Minister when she said that the Prime Minister had left us on the outer fringes of the EU and that it was bizarre for us to wish to commend him for that.

[Jim Shannon]

Will my hon. Friend give way?

[Sammy Wilson]

Of course, but I want to develop this point first.

There is nothing new in this. The chattering classes have all come together to condemn the Prime Minister for standing up for Britain and for our interests in Europe. There is nothing new in those who see the European project being attacked using that tactic in debates such as this. In fact, a leader of the Liberal Democrats said, as revealed by Hansard:

“There will be a second-tier Europe”—[Official Report, 24 September 1992; Vol. 212, c. 34.]

in which we will be led into “isolation”. People may wonder how on earth that can be, when the Liberal Democrat leader has not been in the House since these events happened. How can he have anything on record in Hansard? Of course, I quoted not the present Liberal Democrat leader but the Liberal Democrat leader from 1992—nearly 20 years ago—when we had exactly the same situation. They have not even learned new lines, for goodness’ sake. If they are going to criticise someone for undermining the European project, one would have thought that they would learn to find some new arguments.

People have said that we are isolated in the world. It is interesting to note that when Hillary Clinton commented, she said that she was not concerned at all about what the Prime Minister did in Europe this weekend. She was more concerned—and America is more concerned—about whether this will be an effective way of dealing with the crisis of the euro. As a number of hon. Members—including even the hon. Member for Cheltenham (Martin Horwood) —have pointed out, even the markets agree that this has not been a good deal. How on earth can we be isolated and left alone on the edges of Europe on this issue if we find that all those looking at the effectiveness of the deal have found it wanting?

The second argument is that Britain will be left alone and other nations in Europe will not support us. Hon. Members, including again the hon. Member for Cheltenham, and the hon. Member for Folkestone and Hythe (Damian Collins) and even the hon. Member for Foyle (Mark Durkan), have pointed out that this is not the end of the matter. Many of those hailed as supporting the deal are already beginning to have second thoughts. The list is endless: Denmark, Sweden, Poland, Finland and Czechoslovakia. Ironically, even one of the candidates who might well be the next Prime Minister of France has said that he would undo what has happened. I think that, far from being alone, we will find this issue being revisited by others. That requires a word of caution: if it is to be revisited, it is important for the Prime Minister to take the same stance again.

[Mr Cash]

Does the hon. Gentleman agree that, in the light of everything he has so soundly said, it would be extremely unwise for our own Government to make any attempt to endorse the arrangement, given its uncertainty and apparent instability?

[Sammy Wilson]

Absolutely. As other nations start to look at the implications of the deal and see the essentially undemocratic nature of it, they will ask themselves whether they are prepared to put their destiny in the hands of the European Commission.

I find it strange that the party that has opposed the Government’s austerity measures in the United Kingdom has taken the view that it is better to hand the ability to impose those measures to the unelected bureaucrats in Europe. At least the Prime Minister can be held to account in this place every Wednesday and the Chancellor can be held to account here, too. We will not be able to hold European bureaucrats to account if we give them this power. That is one reason why I find the attitude of Labour Members very strange.

The third argument that has been made is that we have gained nothing and lost everything. The hon. Member for Wolverhampton North East put it succinctly: it was bizarre of us to support the Prime Minister, she said, because decisions will be made that will affect us, and we will not even be in the room when they are discussed; it has failed to stop any changes in the financial system; and it is bad for Britain, and bad for jobs. Therefore, she and the Labour party oppose what the Prime Minister has done. With such an argument, she should have found it easy to say, “We want to be in the room, we want to safeguard financial institutions, and we want to create jobs, so we will support the deal.” But no matter how many times those in the Labour party have been asked the question, they have not been able to say that they would have supported the deal. Perhaps she will now tell us that the Labour party will support the deal.

[Emma Reynolds]

Nothing was agreed on Thursday that led to a signing of a treaty change. We would have to see what was in the treaty change to decide whether we would sign up to it.

[Sammy Wilson]

This is the problem—if that is the case, why would those in the Labour party not support a deal? Why will they not say that they would also have vetoed a deal? If they would not have vetoed it, they are saying that they would support something that they believe is bad for jobs. That is the logic of their position.

The other argument is that the Prime Minister has taken this action because he is afraid of his Back Benchers. If anyone is afraid of his Back Benchers, it is the leader of the Liberal party. On Friday, he was saying that he agreed the terms, the tactics and the approach. By Sunday he had changed his mind. What changed his mind? I suspect that his Back Benchers changed his mind. It is a bit rich to say that the Prime Minister is in hock to his Back Benchers. Equally, I suspect that the Labour party has taken the attitude it has adopted because it is afraid of the public. It knows that the vast majority of the public—57%—support what the Prime Minister has done. I would rather have a Prime Minister who is cognisant of the British people’s views and then responds to those views. For that reason, we commend him in our motion.

I am sure that we will have plenty of opportunities to disagree with the Government, and times when we criticise the Prime Minister. This is not the end of the matter. The Prime Minister will have to show again the backbone that he showed last Friday, and we will look for him to do it.

21:38

[The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Henry Bellingham)]

I congratulate our friends in the Democratic Unionist party on securing this debate on the Prime Minister’s decision last Friday to protect the national interest. They are true allies in these challenging times. I pay tribute to the right hon. Member for Belfast North (Mr Dodds) and the hon. Member for East Antrim (Sammy Wilson) for their speeches.

As the Prime Minister explained to the House yesterday, we went to the European Council in good faith, seeking to reach an agreement acceptable to all 27 members of the European Union. In doing so, we were clear on the need to have the necessary safeguards in place to protect our national interests on the single market as a whole and on financial services. We did not seek special treatment or carve-out for the UK, but safeguards that would ensure a level playing field. As my right hon. Friend the Minister for Europe said, those safeguards were modest, reasonable and highly relevant. As he also pointed out, it was a question of protecting not just the City of London, but financial services across the whole of Europe. As it was not possible to reach agreement on satisfactory safeguards, we were not able to agree to a treaty at 27. That was clearly the responsible course for us to take in order to protect the United Kingdom’s national interest.

The hon. Member for Wolverhampton North East (Emma Reynolds) asked whether the Government had been properly prepared, and concluded that they had been ill prepared. She said that we had asked for too much, too late. Where has the hon. Lady been for the last month? The Prime Minister and the Deputy Prime Minister talked to most leaders and visited key capitals during that period. The Prime Minister saw Chancellor Merkel three weeks before the Council, and met President Sarkozy a week before it. The Prime Minister was clear about the position on safeguards, and made it crystal clear that the safeguards he wanted were moderate and reasonable. As was pointed out by my hon. Friends the Members for Folkestone and Hythe (Damian Collins) and for Stroud (Neil Carmichael), the position was well understood.

[Emma Reynolds]

Will the Minister give way?

[Mr Bellingham]

I will not, because I must cover as much ground as possible.

The course taken by the Prime Minister allowed eurozone countries and others to proceed with a separate treaty in which they could pool their sovereignty on an intergovernmental basis with the aim of implementing tighter fiscal discipline in the eurozone as part of the process of restoring market confidence. It is right and important for eurozone countries to take the action that they deem necessary to deal with the crisis in the eurozone. We want and need the eurozone to sort out its problems. That is in Britain’s national interest, as it is clear that a crisis in the eurozone is having a negative effect on the UK economy.

[Jim Shannon]

Will the Minister give way?

[Mr Bellingham]

No, I will not.

Let me say something about the UK’s influence in Europe. The decision not to proceed with a treaty at 27 has no impact on our status in the European Union. Our role in the EU is safeguarded by the existing treaties. Britain remains a full member of the EU. Our membership is vital to our national interest. We are a great trading nation, and we need the single market for trade, investment and jobs. Contrary to what was said by the hon. Member for Wolverhampton North East, we will remain active and influential in the EU. The European Council does not in any way diminish our role. As was pointed out by the hon. Member for Cheltenham (Martin Horwood) in a wise and sensible speech, this week there will be meetings of the Councils on Transport, Telecommunications and Energy, and Agriculture and Fisheries, and we will be present as full, active members in each of those Council meetings.

I am trying to respond to speeches made by a large number of Members on both sides of the House. As was pointed out by my hon. Friend the Member for Daventry (Chris Heaton-Harris) and the hon. Members for East Londonderry (Mr Campbell), for South Antrim (Dr McCrea), and for Upper Bann (David Simpson), the decision not to be part of the treaty that will be agreed by the eurozone and others does not in any way reduce our influence. The EU is not a monolithic block, and it already contains flexible arrangements.

As the right hon. Member for Belfast North observed, the United Kingdom is not part of the single currency or the Schengen no-borders agreement, but that has not prevented us from leading the way in the EU on a range of issues, from an activist foreign policy to the completion of the single market. As my right hon. Friend the Minister for Europe pointed out, our position is incredibly important in terms of not just the single market but foreign direct investment, 50% of which comes from the EU. As he also pointed out, much foreign direct investment from other parts of the world, such as the BRIC nations—Brazil, Russia, India and China—is due to our membership of the EU.

My hon. Friends the Members for Stone (Mr Cash) and for Stroud referred to the EU institutions. We want the new treaty to work in stabilising the euro. That is in our national interest, because our economy is closely tied to that of our EU partners. I understand why the eurozone member states would want to use the institutions to help to ensure fiscal discipline. We will look constructively at proposals to use the EU institutions with an open mind, but this is new territory which raises important issues.

The right hon. Member for Belfast North was spot on when he said that nothing must be done through the back door. We must ensure that institutions built for 27 continue to operate fairly for all member states, including the UK, and in particular we must ensure that the role played by the EU institutions in safeguarding the single market is not affected. I assure my hon. Friend the Member for Stroud that we will continue to intensify bilateral relations with many different EU countries. Let me assure the hon. Members for Foyle (Mark Durkan) and for South Down (Ms Ritchie) that we will not take the isolationist route.

On the repatriation of powers and the balance of competences, the Government are committed, under the coalition agreement, to examining “the balance” of competences between Britain and the EU. There is a case for doing that—as the right hon. Member for Lagan Valley (Mr Donaldson) pointed out, it is a very strong one. The work on the review has begun and is in its early stages. In taking it forward, we will look at how to engage with our EU partners on individual competences. A change in the balance of competences would require the agreement of all 27 member states on the basis of negotiation and agreement.

I wish to say a few quick words about the working time directive, because it is important at a time of economic uncertainty that we remain focused on job creation and growth. That will require all of Europe to improve its competitive position, including in respect of labour markets. A key part of that will be limiting the barriers to flexibility in the working time directive. The Government are committed in the coalition agreement to limiting

“the application of the Working Time Directive in the United Kingdom.”

Our priority is that the working time directive keeps a secure economy-wide opt-out; working people should be able to work the hours that they choose. We will also be looking to secure more flexibility in the areas of on-call time and compensatory rest.

I pay tribute, once again, to our friends in the Democratic Unionist party, because this very good debate has come at a crucial time for Europe and, throughout, the contributions of DUP Members have been incredibly consistent, solid and reliable. What can we say about the Opposition? I agree with my hon. Friend the Member for Brigg and Goole (Andrew Percy) that we have heard nothing but carping and criticism. The hon. Member for Wolverhampton North East did not tell us whether Labour would have signed the treaty. She said nothing at all in response to two interventions, including one from my hon. Friend the Member for South West Wiltshire (Dr Murrison), asking why Labour gave up Britain’s £7 billion EU rebate when the now shadow Foreign Secretary was Minister for Europe? She also made no attempt to answer the question about why Labour signed the UK up to a euro bail-out mechanism after the general election—on 8 and 9 May 2010, before the coalition agreement was completed. She also failed completely to answer the questions put to her about her leader, who first—

[Mr Dodds]

claimed to move the closure (Standing Order No. 36).

Question put forthwith, That the Question be now put.

Question agreed to.

Main Question accordingly put.

21:47

Division 411

Ayes: 278

---

Conservative: 270
Democratic Unionist Party: 6
Independent: 1

Noes: 200

---

Labour: 192
Scottish National Party: 5
Social Democratic & Labour Party: 2
Plaid Cymru: 1

Resolved,

That this House commends the Prime Minister on his refusal at the European Council to sign up to a Treaty without safeguards for the UK; regards the use of the veto in appropriate circumstances to be a vital means of defending the national interests of the UK; and recognises the desire of the British people for a rebalancing of the relationship with our European neighbours based on co-operation and mutually beneficial economic arrangements.

[Mr John Spellar (Warley) (Lab)]

On a point of order, Mr Speaker. We live in some fairly interesting times, because not only do we have a Deputy Prime Minister who has gone missing, but I am reliably informed that not one Liberal Democrat Member voted in the Lobby to support the Prime Minister. Is there a precedent for that within a Government?

[Mr Speaker]

The right hon. Gentleman is a wise greybeard, and he will know that there are precedents for most things, but fortunately whether people vote or the way in which they vote is not a matter for the Chair. However, he has put his point forcefully on the record.

Business without Debate

Tuesday 13th December 2011 Commons Chamber

Delegated legislation

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Electricity

That the draft Electricity and Gas (Carbon Emissions and Community Energy Saving) (Amendment) Order 2011, which was laid before this House on 21 November, be approved.—(Greg Hands.)

Question agreed to.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Financial Services and Markets

That the draft Open-Ended Investment Companies (Amendment) Regulations 2011, which were laid before this House on 21 November, be approved. —(Greg Hands.)

Question agreed to.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Bank Levy

That the draft Finance Act 2011 (Bank Levy: Amendment of Netting Agreements Provisions) Order 2011, which was laid before this House on 23 November, be approved.—(Greg Hands.)

Question agreed to.

[Mr Speaker]

With the leave of the House, we shall take motions 10 and 11 on Police together.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Police

That the draft Local Policing Bodies (Consequential Amendments) Regulations 2011, which were laid before this House on 21 November, be approved.

That the draft Elected Local Policing Bodies (Complaints and Misconduct) Regulations 2011, which were laid before this House on 14 November, be approved.—(Greg Hands.)

Question agreed to.

Royal Mail Delivery Office, Kidsgrove, Staffordshire

Tuesday 13th December 2011 Commons Chamber

22:05

[Joan Walley (Stoke-on-Trent North) (Lab)]

I should like to present a petition—[Interruption.]

[Mr Speaker]

Order. May I appeal to Members who are leaving the Chamber to do so quickly and quietly so that the hon. Lady is afforded the courtesy that they would want to be extended to them?

[Joan Walley]

I am most grateful, Mr Speaker, because this issue matters to me.

I should like to present a petition of more than 1,000 signatures from the residents of Kidsgrove, Staffordshire and others. In the run-up to Christmas, all Members will be aware of the important role of Royal Mail delivery offices, and that they are busier than ever at this time of year.

We are all aware of the value of the work of the postmen and women who deliver our mail, and of the importance of local delivery offices being close at hand. We want to ensure that Royal Mail liaises with local business and with Kidsgrove town council about any changes.

My petition therefore declares:

The Petition of residents of Kidsgrove, Staffordshire and others,

Declares that the Petitioners believe that the proposed relocation of the Royal Mail Delivery Office from Kidsgrove to Newcastle-under-Lyme, without consultation with local people and businesses, will result in a deterioration of local services, will be detrimental to local businesses, and cause an increased carbon footprint.

The Petitioners therefore request that the House of Commons urges the Government to take all possible steps to ensure that Royal Mail consults with local partners to improve delivery services in line with the commercial and domestic needs of the Kidsgrove, ST7 area and reviews the proposed relocation accordingly.

And the Petitioners remain, etc.

[P000988]

Illegal Music Downloading

Tuesday 13th December 2011 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Greg Hands.)

22:08

[David Morris (Morecambe and Lunesdale) (Con)]

I am delighted that this debate is happening today, and I have been told that I must declare an interest. As a former songwriter I remember that when I stood for election in Blackpool South, the local press exposed my misspent youth in the ’80s and asked me, “Can you tell us about your songs?” I said—without wanting to be political, even though we are in the House of Commons—“Let’s just say I wrote some dodgy records in the ’80s, but that’s nothing to do with the Government’s criminal record”—by which I meant, of course, the previous Government.

So, with the bad jokes out of the way, and given that nobody is laughing, let us get on to a serious subject. The purpose of my debate is not to attack any business in the entertainment industry, nor is it to propose draconian new laws. I see this debate as an opportunity to put on the record the important work being done to combat the problem of illegal downloading.

Over the next few years, superfast broadband will give rise to even greater integration between the internet and how we consume media. If we get the issue right now, we can ensure that the film, radio and television industries benefit from the experience of the music industry once they become more popular online.

Before I start setting out the issues as I see them, I want to thank the organisations that have spoken to me about the issues that I am going to raise tonight: the Performing Right Society, Google, Virgin Media, UK Music, the Internet Service Providers Association and the British Recorded Music Industry, known affectionately as the BPI. All of them have forward-looking and determined vision to help resolve the problem and protect all sectors of this important industry.

Many of the organisations have pointed out to me that real leaps forward have been made since May 2010. They have asked me to thank the Minister for the role that he has played in leading that—not least in his work in establishing the Creative Industries Council, which brings together groups with an interest in intellectual property. That new group, which first met in July this year, is part of a wider dialogue, led by the Government, to work to resolve the problems that we now face.

Let me take a moment to set out the issues as I see them. We should cast our minds back to the time when MP3s exploded into public consciousness in the late 1990s and early 2000s. Suddenly everyone was talking about a website called Napster. The music industry was left shell-shocked as huge numbers of songs were swamped by hundreds of thousands—perhaps even millions—of users. At that time the problem was that the industry was years away from developing an alternative legal way to access music online. My personal view is that most Napster users were not criminals who wanted to engage in illegal downloading and piracy; most were young people whose only aim was to create music collections on their computers. In the absence of a legal method of doing that, they turned to an illegal one.

[Mike Weatherley (Hove) (Con)]

I congratulate my hon. Friend on securing this important debate. Does he agree that there are three prongs to the protection of our creative industries? There is the carrot, which may be changing some business models to encourage people to download legally, perhaps through differential pricing. There is the stick, which would make illegal the activities of internet service providers and individual users who persistently download illegally, and address the problem of companies, such as Google, that advertise illegal sites. There is also education. People need to understand that if they continually download, that could seriously harm future creative industry output.

[David Morris]

I thank my hon. Friend for that information, and for the educational measures that he has introduced through his “Rock the House” campaign, which is gaining support across the nation and making Members of Parliament engage with the youth of today.

Today websites such as Spotify give a legal alternative to illegal downloading, but how do we ensure that people go to those sites rather than illegal ones? That raises serious questions and problems.

[Martin Horwood (Cheltenham) (LD)]

The hon. Gentleman was understanding about the fact that most young people who initially indulged in the activity were not criminals. However, does he believe that the fact that the BPI has from time to time acted in such a heavy-handed way with young people—sometimes even with their families, who had almost no connection with the downloading—has somewhat undermined its public support for very real concerns?

[David Morris]

I thank my hon. Friend for that comment. The BPI’s response may have been knee-jerk at the time, but as I have tried to set out, no real legal alternative is coming through quickly enough.

Search engines are understandably full of illegal sites. That is not the fault of the search engine providers; their spiders trawl the internet and automatically add new sites. Most of us in the House have already experienced that, because our websites are largely ignored until, after a few weeks or months, automated systems at the search engine level find them. Suddenly people start to visit our sites, so those sites are added to search engines without anyone at the search engine ever having looked at them in the first place.

Everyone accepts that creating search engines by any method other than automation is more or less impossible. That means that we then have to ask search engines to remove pages that sell or trade in illegal material. Google allows anyone who has had their copyright infringed to send it up to 10,000 pages a day to be removed. Groups such as the PRS regularly use this service, and say that Google has removed offending pages within four hours. That in itself—I can say in response to my hon. Friend the Member for Hove (Mike Weatherley)—is a step in the right direction by the PRS. The service is pretty impressive given the number of pages that have been removed, but it is also laborious for both parties. There is no obvious way to streamline the process, although I understand that discussions are now ongoing. And while the page is on the search engines it is very hard to know the difference between legitimate and illegitimate sites. Seventy-five per cent. of consumers admit to being confused.

Clearly, better education of young people is needed. I am chairman of the all-party group on media literacy. The aim of media literacy is to go into schools and teach young people how to function in this modern-day media environment, where claims made by advertisers and websites may be false. A group called Media Smart goes into schools with that aim and does a marvellous job, the BPI has a scheme called the Music Matters badge to educate consumers, and there are other schemes. However, a full programme on media literacy has not been rolled out, and is we must address that, as the internet is now so integral to modern life. The PRS suggests that we initiate a traffic light system whereby pages are rated green or red depending on whether they are legitimate. That scheme has some merit and could be considered at an industry level.

However, the fear shared across the industry is that legitimate sites will be wrongly accused of being illegal, so that perfectly legal sites are taken off search engines. Flagging sites as red could even open up search engines to legal action. We need to strike a balance between protecting search engines from this litigation and ensuring that they are not cavalier about taking down sites with no evidence. We must target sites that are built only to trade in unlawfully obtained music and are repeat high-volume offenders. The Internet Service Providers Association points out that it is hard to make companies the judge and the jury, as they may not have the expertise to arbitrate on such matters.

We must also ensure that advertisers do not place adverts on websites that trade in illegal content. All too often the offending sites are given an air of legitimacy by syndicated adverts from mainstream companies. Again, this is hard to combat, but advertisers must continue in this work. The Digital Economy Act 2010 empowers Ofcom to force internet service providers to reduce speeds for persistent offenders, and it may even suspend their accounts for short periods. Failure to comply with Ofcom leaves ISPs open to a fine of up to £250,000. The key point is that no one is expecting vast swathes of people to fall foul of these threats to reduce speeds or suspend accounts. Those are a last resort for use against those who refuse to use legitimate sites, the take-up of which is now growing. Through all those means—the development of legitimate sites, the action of search engines to remove illegitimate ones, and a limited threat of action for those breaking the law—we can start to build an environment in which people are encouraged to do the right thing.

The wider issue is the role played by free content. When I was in the music industry the country was awash with free content. Free-to-air television programmes such as “Top of the Pops” promoted artists but also allowed consumers to listen to music free. Much to the amusement of my colleagues, YouTube still has footage of me with a big mullet on “Top of the Pops” in the 1980s. Similarly, radio has offered free content for many years. Today “The X Factor” has developed into a free-to-air business model that relies on phone voting revenue in addition to advertising.

Allowing limited free content is the right thing to do because it promotes artists. YouTube does that very well because people can watch the music video, along with adverts, but it is not easy to download that video or record music from it. It is not impossible to record off YouTube, but the website itself does not offer that option. That again nudges people into doing the right thing. Watching a music video on YouTube generally ensures that artists and labels are paid properly for their work. YouTube is listed along with hundreds of other legitimate sites on Pro-Music. That project is an effort by the industry to help consumers to make the right choices, and I hope that more people will log on to the site. It does not promote any one site, but it helps to ensure that consumers can make the right choices.

The music industry, search engines and ISPs were taken by surprise by the download phenomenon. As my hon. Friend the Member for Cheltenham (Martin Horwood) said, knee-jerk reactions occurred, but companies are now coming together to help people make better choices. I do not believe that we will ever stop illegal downloading completely—after all, in my day some people were determined to tape songs off the radio and “Top of the Pops”. Dare I say it, I can remember doing that myself in my teenage years.

[Chris Heaton-Harris (Daventry) (Con)]

Lock him up.

[David Morris]

I know. However, I firmly believe that most people will act legally if they can.

I finish by congratulating the Government and the industry on working to reduce the problem. With everyone committed to getting this right, the problems of the past will soon be forgotten. Let us remember that we are world leaders in the music and entertainment industry, and our brands and artists have dominated the world for the past 50 years. The internet raises issues, but as we address those issues we make the business stronger. Finally, may I say how proud I am to have a music industry background, and put on record how much that industry contributes to our economy here in Great Britain?

22:20

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

I congratulate my hon. Friend the Member for Morecambe and Lunesdale (David Morris) on giving us the opportunity to participate in this important Adjournment debate.

Back when I was a newly elected young Member of Parliament, before the days of garage, hip-hop, trance or indie, and when the Beatles were listened to on cassette, I was fortunate enough to work closely with the BPI. I was even invited to many of the Brit awards; indeed, I was there when “Chombawallah”, or whatever they were called, disgracefully threw water at the noble Lord Prescott, and when Michael Jackson’s performance was interrupted by another star.

Through my association with the industry I grew to admire its work and appreciate what a jewel in the crown it is for Britain and all that is great here. I accept that, as my hon. Friend said, much has changed since those days, not least the music industry.

[Andrew Bingham (High Peak) (Con)]

My hon. Friend has worked with the BPI and says that much has changed. Does he agree that the predominantly English-speaking world of the media and music brings a huge amount of economic benefit to this country? It is not just about the social benefit and the pleasure of listening to our music. We get great economic benefit from many of our bands, such as Chumbawamba and others, as we did from my hon. Friend the Member for Morecambe and Lunesdale (David Morris) in his heyday—not that I am suggesting that he is past his pomp.

[Mr Amess]

I absolutely agree with my hon. Friend. I think the BRIT school is just fantastic, and I very much hope that the Prime Minister will showcase at No. 10 Downing street all that is wonderful about the industry.

The changes that I mentioned, particularly the switch to digital music, have resulted in many of the issues that my hon. Friend the Member for Morecambe and Lunesdale raised. However, I am glad that some things have stayed the same, not least the BPI. I pay tribute to it, because it does an absolutely fantastic job of protecting intellectual property. There are of course others who do equally impressive work, and I work very closely with Fran Nevrkla, the chief executive officer of Phonographic Performance Ltd and Video Performance Ltd. I pay tribute to many other people, too.

I strongly acknowledge the measures that have already been set in motion to tackle illegal downloading, but I cannot help but feel that we must listen more carefully to the experts, as my hon. Friend said. For example, I welcome the steps taken by search engines to rank legal download sites above illegal ones, but confusion can still be found among consumers, with up to 75% of customers still unsure about which sites offer licensed content and which offer unlicensed content.

Solutions have been suggested to that problem and to many like it, and it is our duty to listen to those suggestions very carefully. For example, PRS for Music has proposed a consumer education system to help internet users identify legal content. Meanwhile, a recent research paper has proposed the introduction of a voluntary code of practice for search engines, overseen by the Government. According to the BPI, nine out of 10 fans want legal sites put ahead of illegal ones. We must listen to suggested solutions more carefully, so that wish can be fulfilled. For that to happen, we need a closer working relationship between concerned parties—I know that my hon. Friend the Minister will touch on that. I therefore welcome efforts to bring together various groups.

I do not listen all the time to Beyoncé, I do not entirely get Lady Gaga, although she is a very interesting lady, and I do not share the world’s adoration of Justin Bieber, but I think that Amy Winehouse is a tremendous loss to the music industry. I have a broad taste in music and I can therefore understand the pressures that modern technology puts on the music and creative industries. My hon. Friend the Member for Morecambe and Lunesdale has done the House a great service in allowing us to debate the subject.

22:25

[The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey)]

It is a great privilege to conduct the Adjournment debate under your watchful eye, Mr Speaker. I congratulate my hon. Friend the Member for Morecambe and Lunesdale (David Morris) on calling this important debate on the music industry and the illegal downloading of music. I thank my hon. Friend the Member for Southend West (Mr Amess) for his important contribution and my hon. Friends the Members for High Peak (Andrew Bingham) and for Hove (Mike Weatherley) for their important interventions.

During the speech of my hon. Friend the Member for Southend West, I felt that I was in the middle of a pub quiz. Let me rise to the challenge and say that the band that poured water over Lord Prescott was Chumbawamba and that Michael Jackson’s interrupter was Jarvis Cocker.

My hon. Friend the Member for Morecambe and Lunesdale is right to highlight the importance of the UK music industry. We are one of the few countries in the world that export music as a product, and the creative industries as whole form this country’s third largest export industry. For the first time since my hon. Friend the Member for Southend West was a young man—25 years ago—we have had three No. 1s in the United States, and Adele has just been nominated for six Grammys. My hon. Friend also referred to the success of the BRIT school, which celebrates its 20th anniversary this year and was brought into being not least by the efforts of Lord Baker.

We have a terrifically successful music industry as well as a tremendously successful film industry, which is enjoying one of its best years, certainly in the past 20 years. Indeed, for the past 20 weeks, a British film has been No. 1 at the box office. It is therefore incumbent on the Government to do all we can to protect the property of those who create music, films and the content of television programmes, which we all enjoy, so that they can earn a living from that. It is also important to stress that those who earn a living from music, film and television are not simply the highly successful people about whom we read in the newspapers and who may earn a significant amount, but many others, who earn relatively modest wages, whether they are technicians on films, people behind the mixing desk in a recording studio or session musicians working on a record. It is important that we work with them to support them and that we do all we can to reduce the prevalence of online piracy, which is basically theft of the property that those hard-working British people create.

I agree with my hon. Friend the Member for Morecambe and Lunesdale that we will never eradicate online piracy—such a goal would be foolish—but we can reduce it significantly.

[Jim Shannon (Strangford) (DUP)]

In Northern Ireland, we have had many unfortunate examples of organised crime groups who abuse the system, bring out copies and sell them for profit. Does the Minister feel that more can be done to ensure that that does not happen, not just in Northern Ireland but throughout the United Kingdom?

[Mr Vaizey]

Certainly, trading standards officers throughout the country work hard to counter the sale of physical counterfeit goods, but the real challenge, which the debate highlights, is the creation of the internet. It has obviously done much good for our economy and economies throughout the world, but it has also made it so much easier to pirate content digitally as well as sell counterfeit goods online.

My hon. Friend the Member for Morecambe and Lunesdale referred to the Creative Industries Council. The Government are delighted to have established the council to highlight the importance of the creative industries and to work on important issues such as access to finance and skills.

I also hold regular round tables with rights holders, be that in the music, film or television industries, and internet service providers and providers of search engines, to discuss common issues. The last round table that we held was attended by open rights groups as well, so hon. Members who are interested in what happened can find out from very public blogs.

As my hon. Friend pointed out, one of the best ways to combat illegal piracy is to provide legal services that are easy to access for consumers. The creation of Spotify; Deezer, which has recently launched worldwide; WE7, which is based here in the UK; and up to 70 other legal music services has provided consumers with a range of different opportunities to purchase music legally. Some ISPs, particularly BT, are looking very seriously at providing an easy-to-access music service to their customers, which would significantly reduce—I hope—the demand for illegal music.

[Kerry McCarthy (Bristol East) (Lab)]

I agree that the way forward is to encourage sites that allow legal downloading such as Spotify, but the share of the money that the artist gets when a track is downloaded is tiny. It is not enough for struggling artists—the ones that cannot make money out of huge tours or selling lots of merchandise—to make a living. Has the Department looked into how the economics of that stack up?

[Mr Vaizey]

I absolutely agree with the hon. Lady on that, but even some money is better than none. On the need for education, which was mentioned earlier, it is important for her and others who feel like her, including me, to emphasise when we go to schools that many musicians and artists are not Adele, Coldplay or similarly successful groups and artists, and do not earn a great deal of money. The more prevalent illegal downloading becomes, the less opportunity they have to earn a living.

The Digital Economy Act 2010 was passed by the previous Government and this Government are in the process of implementing its procedures. Hon. Members will be aware that, in effect, this is the “three strikes” Act. We are in the process of putting in place the initial obligations code and the cost-sharing code, which should happen next year. It is important to stress that the letters that go out to people who might have infringed the law will be of an educative nature. They will not be of a penal nature and they will not cut people off; they will simply make the point that it is apparent that illegal downloading has taken place from their computer. The letters will also advise them how they can access legal music sites and protect their computer.

On supporting legal download sites, I am delighted that Richard Hooper has been appointed to take forward the digital copyright exchange. We hope that the exchange will be an industry-led initiative that will make it much easier to license intellectual property, music, film and television so that it can be used for innovative and new services. That is part of the Hargreaves report, which, although we are absolutely intent on protecting copyright, is looking at how we can bring copyright law into the 21st century.

Hon. Members will also be aware of the success that the Motion Picture Association of America had in seeking an injunction against BT to block the Newzbin2 site using section 97A of the Copyright, Designs and Patents Act 1988. That is something that the previous Government and this one urged on the industry, and we are delighted that existing law was used to seek an injunction to block a site that was intent on infringing copyright and on effectively selling illegal products over the web. That injunction has now been in place for two weeks, and I gather that the MPAA is seeking further injunctions against other ISPs.

I should stress that that process, too, is a legal process. Rights holders go to court and seek a legal injunction. It is not a voluntary process or a process outside the legal system, and that is exactly how it should be.

We are also working with internet advertisers to try to reduce the amount of advertising that appears on infringing sites. This can often be inadvertent, given the wide spread of internet advertising, but the Internet Advertising Bureau has made significant progress in reducing the amount of advertising that appears on illegal sites, and it continues to work on the issue. In fact, it is probably a world leader in the work that it is doing alongside the Internet Advertising Sales Houses association. We also work with credit card companies to ensure that their payment systems do not appear on illegal websites. So significant progress is being made on this issue on a range of fronts—credit cards, advertising, the blocking of websites and the implementation of the Digital Economy Act, as well as bringing rights holders together with ISPs and promoting legal sites for music and other content.

My hon. Friend also mentioned the work that Google is doing, and over the last 18 months relations between rights holders and Google have improved significantly. Google has set the bar in dealing with notice and takedown, and it is now possible for infringing pages to be removed from Google’s search engine in four hours, which is a very impressive turnaround time.

There remains a vigorous debate between rights holders and search engines, which in this case means Google for all intents and purposes, about the ranking of different sites. It is certainly a matter of extreme frustration to rights holders that typing in the titles of songs produced as if by a factory by my hon. Friend in the 1980s—such as “Never Gonna Give You Up” by Rick Astley—results in some infringing sites appearing above the legitimate site, thus depriving my hon. Friend of income that he richly deserves. Some voluntary procedures have been put forward, and we understand that Google’s issue is that the algorithm is its DNA, as it were, but we also understand the concerns of rights holders. We are hoping to find a voluntary solution.

This has been a good debate, and it is important to highlight the work that we are doing to try to protect our content industries. I also wish to highlight the interest in the House at this late hour from a range of Members, all of whom have an impressive background in the creative industries.

Question put and agreed to.

22:37

House adjourned.