House of Commons

Thursday 26th January 2012 Commons Chamber

Thursday 26 January 2012

The House met at half-past Ten o’clock

Prayers

Thursday 26th January 2012 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Thursday 26th January 2012 Commons Chamber

The Secretary of State was asked—

[Mrs Mary Glindon (North Tyneside) (Lab)]

1. What recent representations he has received on his decision to reduce the feed-in tariff for solar PV.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

12. What recent representations he has received on his decision to reduce the feed-in tariff for solar PV.

[Fiona O’Donnell (East Lothian) (Lab)]

14. What recent representations he has received on his decision to reduce the feed-in tariff for solar PV.

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

Ministers and officials meet regularly with a range of stakeholders from the solar photovoltaic industry. Details of meetings between Department of Energy and Climate Change Ministers and external organisations are published quarterly on the DECC website. The recent consultation on feed-in tariffs for solar PV closed on 23 December 2011. More than 2,300 responses were received and are being analysed prior to the publication of a full Government response to the consultation in the coming weeks.

[Mrs Glindon]

The Secretary of State spent more than £66,000 of public money on legal fees, but he is refusing to accept the Appeal Court decision that his plan to cut feed-in tariff subsidy is unlawful. As well as jeopardising the future of the industry by fighting the Court ruling, how much more public money does he intend to waste?

[Chris Huhne]

I entirely reject the idea that there is no future for the industry. The reality is that we would be able to support at least twice as many installations at the new tariff rate as we could under the old one.

The hon. Lady asks about the costs of the legal cases. I merely point out to her that we are spending a few thousand pounds in order to save consumers £1.5 billion, which is what the cost would have been had we left the case to run. The reality is that the previous Labour Government introduced a scheme that was fundamentally flawed. As with other issues, this Government are putting Labour’s mess right.

[Cathy Jamieson]

Is not the truth of the matter that this episode has led to a frenzy of additional applications? There has been a 1,100% increase in the number of people trying to get systems installed in their homes in a short period of time. Businesses in my constituency tell me that that has caused chaos in the supply chain. Those systems also had to be installed at a time of extremely poor weather in Scotland. What does the Minister say in response to those points?

[Chris Huhne]

The hon. Lady conveniently omits to mention that the design flaw in the scheme introduced by the Leader of the Opposition ensured that there was absolutely no way of automatically reducing the tariffs in line with what was going on in the real world, despite the fact that other countries—Germany, for example—had introduced such schemes. All we had to do was find out what was happening in Germany and model our scheme on theirs. Did the Labour Government bother to learn those lessons? No. The result is that we have to clean up the mess.

[Fiona O’Donnell]

It is becoming uncomfortable watching the Secretary of State trying to defend the indefensible. On 31 October, the Minister of State, the hon. Member for Bexhill and Battle (Gregory Barker), told the House that the Government wanted to spread solar power as widely as possible. If that is true, why do the Government’s plans exclude almost nine out of 10 households and anyone living in social housing from having solar power?

[Chris Huhne]

I entirely disagree with the hon. Lady’s analysis of what was proposed in the consultation paper. Apart from anything else, she completely ignores the possibility of improvement in the energy efficiency of homes. Ensuring energy efficiency is one thing that we are keen to do.

I simply remind Labour Members that the Leader of the Opposition introduced a scheme at a cost of £7.9 billion. That went directly to consumers, and there was no way whatever of controlling those costs. He so doubted the dynamism of the private sector that he predicted no commercial take-up of solar power in the first three years of the scheme, even while solar costs were tumbling, and he ignored the best practice of the German FITs scheme and failed to include a system of automatic degression. All this Government are doing is clearing up the mess that Labour left behind.

[Mr Alan Reid (Argyll and Bute) (LD)]

One unfortunate knock-on effect of the solar dispute is a delay in the review of FITs for small-scale hydro. Many planned schemes on Argyll and Bute cannot go ahead until that uncertainty is resolved, which is causing severe problems for businesses and community groups. Will my right hon. Friend please do all he can to end that uncertainty as soon as possible so that those vital small-scale hydro schemes can go ahead?

[Chris Huhne]

I pay tribute to my hon. Friend, who has also raised this issue in correspondence. He is a doughty champion for the interests of those of his constituents who want to go ahead with micro-hydro and other schemes. I can reassure him that the Government will not let problems with the solar feed-in tariff get in the way. We want micro-hydro and other schemes to take off and will introduce proposals as soon as possible. I hope to be able to do so in February.

[Robert Halfon (Harlow) (Con)]

The Minister may be aware that there are hundreds of Harlow residents in social housing who were promised solar power panels, but the new rate is too low for the scheme to be viable. Will my right hon. Friend tell the House whether he would consider a more generous community rate for the feed-in tariff, even if it was for only a few months?

[Chris Huhne]

The absolute key to what is happening with solar panels is the collapse in the cost. The idea that something might not be attractive commercially today does not mean that it will not be so in pretty short order. What has been happening over the past 18 months is an enormous increase in the production capacity of China. Essentially, what has happened is that the Henry Ford of solar panels—who happens to be Chinese these days—has introduced the Model T, and we are getting an enormous reduction in costs as a result of economies of scale.

[Caroline Flint (Don Valley) (Lab)]

When the cuts to solar were announced, the Minister of State, the hon. Member for Bexhill and Battle (Gregory Barker) claimed that they would create jobs. Paragraph 73 of the impact assessment, signed off by the Minister on 2 November 2011, says that

“there could be around 1,000 to 10,000 gross additional jobs in this sector in the three years to 2014/15”.

Can the Secretary of State confirm today that those 1,000 to 10,000 jobs are not additional jobs, but the total number that the industry will support, which, for a sector that currently employs nearly 30,000 people, means tens of thousands of job losses?

[Chris Huhne]

What is absolutely crucial for the sector is that there should be a sustainable pathway for growth in the future. What the right hon. Lady has completely failed to address is the fact that if we continued to over-subsidise at the previous rate, we would have fewer than half the installations that we can afford to subsidise today with the new rate. It was not an accident that the British Photovoltaic Association intervened on our side in the courts, precisely as a result of that calculation.

[Caroline Flint]

Seven times I have asked the Minister of State what these cuts will mean for jobs; seven times he has tried to hide the fact that his cuts will put thousands of people out of work. According to his figures, released on Friday,

“in the 2012/13 to 2014/15 period…the total number of gross full-time equivalent jobs will be 1,000 to 10,000.”

That is not additional jobs; that is the total number. Nothing can hide the sheer incompetence of the Government’s handling of this. Is it not about time that the Government stopped thinking about saving face, creating more uncertainty and wasting even more money on more legal challenges, and sat down to work out how we are going to put the industry on a sustainable footing?

[Chris Huhne]

I realise that the right hon. Lady supported a different candidate for the leadership of her party from the winning candidate; nevertheless, given her repeated attempts effectively to undermine the former decisions of the Leader of the Opposition, as well as her failure to recognise their consequences, I would merely remind her, as she now likes to lecture us about the impact assessment, what the impact assessment showed in February 2010. It is important that she should go back—as she wants to look at this—because that impact assessment showed that the cost of the scheme introduced by the now Leader of the Opposition had a net present value of £8.6 billion, while the benefits had a net present value of £400 million. If she thinks that is the sort of policy making of which she is prepared to be proud, good luck to her.

[Mr Speaker]

Order. May I just say to the Secretary of State that that answer—about which he felt strongly—was too long? There must not be a repetition of that, and if there is, I will cut it off. That is the end of it.

[Jo Swinson (East Dunbartonshire) (LD)]

The Secretary of State is right to say that the design of the scheme he inherited from Labour was flawed. However, by continuing with that scheme for 18 months, coupled with apparently poor legal advice, the implementation of FITs that he has presided over has been somewhat chaotically managed for consumers and businesses alike. I am concerned that a letter from the Minister of State says that if there is no action, proposals may have to be brought forward to close the FITs scheme. What reassurance can the Secretary of State give that FITs will be put on a sustainable footing for the rest of this Parliament?

[Chris Huhne]

I entirely reject the idea that we did not act to deal with this issue as soon as we were advised. The problem with the design of the scheme was that it was unable to cope with the dramatic fall in the cost of solar panels. That dramatic fall, the reason for which I have already described, became apparent over the past year, and we acted as quickly as we could to deal with the situation. What is unforgivable is the fact that the present Leader of the Opposition failed to foresee, by looking at best practice internationally, how the scheme should have been designed in the first place.

[Mr William Bain (Glasgow North East) (Lab)]

2. What steps he is taking to help households to reduce their energy bills.

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

The coalition is taking action to help consumers to reduce their bills. The Department of Energy and Climate Change has launched the “check, switch, insulate to save” campaign, which was showcased in big energy week. That measure, together with the new warm home discount, the winter fuel and cold weather payments, the carbon emissions reduction target and community energy saving programmes, the Warm Front scheme and signposts on bills to the cheapest tariff information, will help hard-pressed consumers. However, the green deal will be the game-changer that the country really needs.

[Mr Bain]

Does the Minister grasp the seriousness of the situation facing families across the country? The average fuel bill is now £1,345 a year—an increase of 48% in the last five years. When are the Government going to act to pare back the system of tariffs—the number of which has risen by 70 in the past year under this Government—which discriminates against those who use the least energy?

[Gregory Barker]

I am afraid that it was actually under the last Labour Government, when the present Leader of the Opposition was Secretary of State, that the number of tariffs went up to 400, an increase of 75%. We are now getting to grips with that, but if the hon. Gentleman wants to blame someone for the proliferation of tariffs, he should blame the total inaction of the then Secretary of State.

[Joseph Johnson (Orpington) (Con)]

Does the Minister realise that he could help businesses, as well as households, to reduce their energy bills, by introducing mandatory motion-sensitive lighting systems? That would reduce the carbon intensity of our built environment and promote the ability of many people to enjoy starry, starry nights.

[Gregory Barker]

That is just the kind of technology that will be brought into the reach of millions of homes by the green deal, and it is just the kind of innovation that we want to spur. We would also look at how we might drive that by making amendments to consequential improvements. I am very interested in my hon. Friend’s ideas.

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

It is understood that there has been a significant underspend, of up to £30 million, in the Warm Front scheme, because DECC has made the eligibility criteria too strict and has not promoted the scheme. That means that up to 20% of the scheme’s funding could go unclaimed. Is it correct that there will be an underspend at the end of the financial year, and if so, what is the reason for it?

[Gregory Barker]

The hon. Lady is right; we are slightly behind. The unseasonably warm weather that we have had this winter, compared with the cold weather last year, has meant that the number of applications has been lower. However, I am in touch with the leaders of our big metropolitan authorities, and I have spoken to the big six energy companies, Citizens Advice and others this week in order to drive forward the roll-out of Warm Front to ensure that we do not have the underspend that she has highlighted.

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

The green deal has just been described as the “game-changer”, but the concern being expressed by those living in Thirsk, Malton and Filey is that it will push up their household energy bills. Will the Minister follow up the suggestion put to the Prime Minister yesterday by looking favourably on schemes such as biomass, rather than unreliable wind farms, in the green energy mix?

[Gregory Barker]

My hon. Friend is a little bit confused. Biomass and other forms of renewable heating or electricity generation have nothing to do with the green deal, which is an energy efficiency roll-out that will reduce the amount of electricity and heating required in homes, but I will certainly be happy to look at her ideas.

[Caroline Flint (Don Valley) (Lab)]

According to an answer that I received to a question just the other day, the underspend is actually £32 million, so it has gone up. We all know that soaring energy bills are contributing to the cost-of-living crisis afflicting millions of families. Millions of pensioners over the age of 75, who are the most susceptible to the cold weather and the least able to access the advantages of online energy deals, pay more for their electricity and gas than they need to. Surely it is only fair that energy companies should guarantee that elderly customers over the age of 75 should be placed on the cheapest tariff for their gas and electricity. Will the Government ensure that the energy companies have access to the data that they will need in order to achieve that?

[Gregory Barker]

As I said earlier, the number of tariffs proliferated by 75% in the last three years of the Labour Government, when they had the opportunity to do something about this. We actually want everyone to be on cheaper tariffs, but there is lots to do, because of the appalling inheritance from the last Government. We want everyone to get a good deal, not just the over-75s, and we are taking action to make that happen.

[Caroline Dinenage (Gosport) (Con)]

3. When he expects a decision to be taken on the EU target for carbon emission reductions under the second commitment period of the Kyoto protocol.

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

The EU must submit a target for the second commitment period of the Kyoto protocol at the UN conference of parties at the end of the year in Qatar. There is a debate in the EU about whether to increase its 2020 emission reduction target from 20% to 30% from 1990 levels. The UK is a leading advocate of a 30% target.

[Caroline Dinenage]

The Secretary of State has publicly and consistently expressed his desire to see the EU 2020 emissions reduction target increase to 30%, but what concrete action will he take to realise that ambition?

[Gregory Barker]

We are very active on this agenda. The Secretary of State and I firmly believe that the EU should submit a 30% target in the Kyoto protocol. We are working closely with ministerial colleagues from key member states to build support for a 30% target, directly engaging the more sceptical. At the Environment Council in March, the Secretary of State will argue strongly for approval of the EU low-carbon road map, which sets out milestones for reducing emissions through to 2050.

[Christopher Pincher (Tamworth) (Con)]

4. What assessment he has made of the potential effects on UK oil and gas supplies of any disruption of shipping through the Strait of Hormuz.

[Harriett Baldwin (West Worcestershire) (Con)]

13. What assessment he has made of the potential effects on UK oil and gas supplies of any disruption of shipping through the Strait of Hormuz.

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

We have made assessments of the impacts of short-term disruptions to shipping through the strait for both oil and gas. There is no reason to believe that such closure would create a physical shortage of oil or gas in the UK. Price impacts would depend on the exact nature of the disruption. The UK has access to a wide variety of oil and gas sources and routes, including production from the UK continental shelf, imports from Norway, storage, and oil and liquefied natural gas from global markets.

[Christopher Pincher]

Given that 20% of the world’s traded oil, and 35% of the seagoing trade, passes through the strait every day, presenting a significant terrorist risk, will my right hon. Friend encourage the diversification of supply, including overland pipelines, such as project Nabucco, the Abu Dhabi pipeline and the Iraq pipeline across Saudi Arabia, despite its being called IPSA?

[Chris Huhne]

My hon. Friend is right to highlight the overland capacity. Unfortunately, the IPSA pipeline, as he may know, is not currently functioning—I do not know whether that is anything to do with its namesake. Diversification is a crucial part of our strategy, and the Minister of State, my hon. Friend the Member for Wealden (Charles Hendry), and I have been working hard on getting closer relationships with some of our key suppliers, including the Norwegians.

[Harriett Baldwin]

My constituents already suffer from high fuel and heating oil prices, so will the Secretary of State reassure them that EU sanctions on Iranian oil will not cause further price pressures in that market?

[Chris Huhne]

I would love to assure the hon. Lady that we are able to have greater control over the politics of the middle east than has been the case so far, but the reality is that that part of the world is extremely sensitive geopolitically. As she may know, HMS Argyll is supporting the USS Abraham Lincoln in the carrier group, and we are sending out clear signals that we want the issue dealt with in the most rapid way.

[Albert Owen (Ynys Môn) (Lab)]

Coupled with the potential problem of oil import is the problem of a lack of oil refinery capacity in this country, made worse by the Petroplus decision to close refineries in the south-east. What assessment have the Government made of refinery capacity, and what are they doing to increase that capacity?

[Chris Huhne]

The hon. Gentleman misunderstands the situation in the refinery market. With regard to Petroplus, the problem with Coryton has been the over-capacity in the refining market, which has led to shaved margins. We are working to resolve that as quickly as possible.

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

Although the Secretary of State has reflected on the potential disruption through the Strait of Hormuz and on the point made by my hon. Friend the Member for Ynys Môn (Albert Owen) about refining activity, and although it is good news that the tankers have resumed distribution from the refinery this morning, will he update the House on whether oil is now being delivered to the refinery for refining activity?

[Chris Huhne]

There is indeed a cargo ready to be delivered this morning, and there have been contingency back-ups. I know that BP has been working closely with us on this matter and I very much hope that normal activity will resume.

[Tom Greatrex]

I thank the Secretary of State for that response, which will, I am sure, bring comfort to many people. As well as the 850 jobs, including those of contractors at the refinery, that are at risk, he will know that the background is that this situation is less to do with the refinery’s operation and more to do with the financial structure of the Switzerland-based former owners. Given the significant role played by UK-based refineries in providing energy resilience, is he concerned that the ownership of such a significant number of UK-based refineries is now overseas?

[Chris Huhne]

We have traditionally benefited enormously in this country, both under the previous Government and under this Government, from our open-door policy on foreign investment. Indeed, we own a substantial amount of investment in other countries. The swiftness with which the arrangements have been put in place suggests that there is no case for reviewing that policy at this stage.

[Gordon Henderson (Sittingbourne and Sheppey) (Con)]

6. If he will hold a review of the smart meter infrastructure upgrade.

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

The introduction of smart meters will unlock huge benefits for the people of this country. There is a solid evidence base to support the roll-out, and it is important that we start to realise the benefits sooner rather than later. The coalition Government have published detailed plans showing how we will deliver smart meters; the last thing we need is more delay.

[Gordon Henderson]

I welcome that answer, but will my hon. Friend do something to ensure that the programme costs are reported and properly controlled in the interests of those who will pay the bills—that is, the consumer?

[Charles Hendry]

My hon. Friend makes a very important point. That is one of the most important mechanisms we have in any part of Government policy to bring benefits to consumers. The total cost of the programme is estimated to be about £11 billion and the benefits are estimated to be about £18 billion, so there will be £7 billion of benefits, and that we is why we want to see it happening as soon as we can.

[Bill Esterson (Sefton Central) (Lab)]

Suppliers of mobile phones include warnings with new devices about the potential danger of electromagnetic radiation. Does the Minister think that suppliers of smart meters should do the same?

[Charles Hendry]

We believe that people will benefit from having smart meters, but we will not make them obligatory. If people are concerned about the electromagnetic issues, they will not be required to have one. We have been willing to give assurances to hon. Members on that account.

[Andrew George (St Ives) (LD)]

There is little incentive for supply companies to inform their domestic customers better on their rate of energy use, so although I appreciate what the Minister has said so far, what can the Government do to ensure that that process of better awareness and better information is speeded up?

[Charles Hendry]

A very important part of this programme is education. Smart meters will work only if the consumer understands how to use them effectively to get the best value for money out of them. We are drawing a very clear distinction between education and sales practice because we do not want the installation of smart meters to be an opportunity for unscrupulous sales practices.

[Mr Dave Watts (St Helens North) (Lab)]

7. What steps he is taking to encourage households to improve their energy efficiency.

[Dr Alan Whitehead (Southampton, Test) (Lab)]

8. What steps he is taking to encourage households to improve their energy efficiency.

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

The Government have established the energy efficiency deployment office to develop an overarching energy efficiency strategy. We will launch the green deal later this year, which will radically improve take-up of energy efficiency measures. We want every home to have a smart meter by 2019 so consumers have much greater control over their energy use.

[Mr Watts]

Is the Secretary of State proud of the fact that this is the first Government since 1970 who have not had a programme to help poor families with their fuel costs? Is it not the case now that many poor families will get less help, and that there is virtually no targeting of those resources that are available to the poorest families?

[Chris Huhne]

The hon. Gentleman has clearly been hibernating over the past few months if he believes that we are not helping poor families. First, the warm home discount scheme, which is a statutory scheme for reducing costs, will disburse two thirds more money than was disbursed under the voluntary scheme operated by the Labour Government. Secondly, the affordable warmth obligation in the energy company obligation subsidy will take over from Warm Front. Thirdly, we have asked Professor John Hills to conduct a thorough review of fuel poverty, which will lead to some interesting and important recommendations.

[Dr Whitehead]

Does the Secretary of State accept that the ECO’s affordable warmth element, which comes to £325 million, is substantially less than the Warm Front commitment of £370 million and the CERT commitment of £600 million? Does he accept that that is a substantial reduction in affordable warmth for those on lower incomes? Even now, will he review the split in costs in relation to affordable warmth and those who can pay, or look for other methods of dealing with the issue?

[Chris Huhne]

It is important that the hon. Gentleman compares like with like. He should remember that what is available under the ECO subsidy helps holistically to improve the energy efficiency of the whole home and is not like the Warm Front, which was largely a boiler replacement scheme. That proposal is out for consultation and we are listening to responses.

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

The green deal skills alliance has highlighted the importance of having the right skilled professionals in place to deliver the green deal to households. How will my right hon. Friend ensure that we have the right number of skilled energy efficiency assessors, installers and training providers to make sure that when the green deal comes in this year we can deliver it?

[Chris Huhne]

My hon. Friend is absolutely right that such skills will be essential for the green deal—indeed, for the whole low-carbon economy. That is precisely why we have been working closely with the Department for Business, Innovation and Skills, which takes the lead on skills. We have a national skills academy for environmental technologies, which is developing standards, delivering training and upskilling tradesmen and technicians. We also have funding for the renewables training network that is run by Renewable UK, and a talent bank for the gas, power, waste management and water industries, which is led by the Energy and Utility Skills sector skills council.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

I understand that the Government have not yet even designed the training programme for many of the people who will have to deliver the green deal. Ministers have been claiming for months that the green deal will mean the creation of thousands of jobs, but the Department’s figures show that the number of energy efficiency installations will plummet in the first year of the scheme, with cavity wall insulations set to fall by 67% and loft insulations by a staggering 90%. That will cripple the sector and, according to Europe Economics, could lead to the loss of 3,000 jobs. Will the Secretary of State protect those jobs by adopting Labour’s proposals to include hard-to-treat cavity walls and lofts in the ECO?

[Chris Huhne]

I think the hon. Lady misunderstands a couple of issues. First, the green deal is a very different scheme precisely because it is designed to support a complete retrofit. We are talking not just about cavity wall insulation or loft insulation but about many other measures as well. The second point is that she is quoting the first impact assessment. It has always been the case that the take-up of the green deal will depend on the triggers and incentives that have been introduced for take-up, which have increased substantially since the figures she quoted.

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

10. What steps he is taking to engage charities and social enterprises in projects that will reduce their energy consumption.

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

All property types, including those belonging to charities and social enterprises, will be eligible for the green deal which begins later this year. Charities and social enterprises will be eligible for up-front support to cover improvements, which will be paid back gradually through savings on energy bills. We are also running a £10 million fund to support communities, including charities and social enterprises, in understanding their current energy use and the opportunities to reduce demand, as well as in developing renewable energy schemes locally.

[Mr Sheerman]

Charities and not-for-profit groups up and down the country have enormous in-house expertise on this matter and are ready and willing to do more work with businesses and local authorities on the green deal. Good firms such as Morrisons do a great deal in partnership work. Could the Secretary of State do more to encourage more partnerships between local authorities, the private sector and charities such as Urban Mines, which I chair?

[Chris Huhne]

I am very happy to join the hon. Gentleman in encouraging the third sector in this regard. However, I point out that we recently announced 82 community winners in the first tranche of DECC’s £10 million local energy assessment fund, which share in £4.2 million to undertake feasibility studies for proposed community energy and energy efficiency schemes. The winning communities in the remaining, second tranche are due to be announced in early February.

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

11. What the level of debt is by which a prepayment meter customer is able to change supplier.

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

The debt assignment protocol helps prepayment meter customers with a debt of £200 or less to switch, providing the new supplier agrees to take on the debt. Ofgem monitors the protocol’s effectiveness by recording the number of customers blocked from switching as a result of having a debt.

[John Robertson]

I am sure the Minister will understand my question when I mention that because of debt 200,000 customers are trapped on tariffs that they cannot get out of. If the level was extended to £350, a lot of those people would be able to get their debt down. What is he doing to try to deal with that and will he persuade Ofgem to set the figure at £350?

[Charles Hendry]

The hon. Gentleman raises an important point, and I shall ask Ofgem to look at the issue in detail. Many people are on prepayment meters because they were already in debt and it was a way of trying to manage their repayments to get them back on a firm footing. Clearly, we want people in all circumstances to be able to benefit from lower tariffs and it is important that they should be set at the right level in that part of the protocol.

[Mr Mike Weir (Angus) (SNP)]

Whether or not they are trying to switch, many people on prepayment meters are clearly fuel-poor. What action is the Department taking to monitor self-disconnection among that group?

[Charles Hendry]

We understand that about 20% of those who are fuel-poor are on prepayment meters, and we will clearly look at any reasons why anybody is disconnected. If they are required to be disconnected by the supplier, the evidence has to be reported to us and those figures have fallen very sharply in recent years, but if people are self-disconnecting we need to understand the reasons behind that.

[Oliver Colvile (Plymouth, Sutton and Devonport) (Con)]

15. What assessment he has made of British Antarctic Survey research on the effects of historic industrialisation on global carbon dioxide levels.

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

Ice core measurements by the British Antarctic Survey reveal that over the last 800,000 years, global carbon dioxide levels varied between 180 and 300 parts per million. Those peer-reviewed results provide crucial data on past natural levels for climate science research. Observations show that global atmospheric carbon dioxide levels are currently increasing at about two parts per million per year, and are now at 391 parts per million, as a result of emissions from industrial and other human sources.

[Oliver Colvile]

May I thank the Minister of State, my hon. Friend the Member for Bexhill and Battle (Gregory Barker) for going to Bristol recently to launch the marine energy strategy? How does my right hon. Friend the Secretary of State perceive it working in delivering fewer CO₂ emissions and helping with the energy strategy?

[Chris Huhne]

Marine energy parks are an important part of developing a tremendously good natural resource for us in this country. We may not have quite as much sunshine as in southern Spain or Arizona, but we have an awful lot of wind, an awful lot of waves and an awful lot of tidal resource. Within the ministerial team, my hon. Friend the Minister of State has been leading the charge on marine energy parks precisely to make sure that we do not let those enormous opportunities slip through our fingers.

[Kevin Brennan (Cardiff West) (Lab)]

Does the Secretary of State have three points he would like to share with us on the main conclusions of the research?

[Chris Huhne]

I can certainly point to one conclusion of the research that I think is absolutely crucial: measurements of current carbon dioxide levels show that they have increased by nearly 40% since pre-industrial times, and carbon isotope information shows that this has largely been caused by the burning of fossil fuels. Drilling down into ice cores is a fascinating way of finding out what was happening in prehistory, and it thoroughly underlines the importance in the science of our addressing those issues. One thing that as politicians we cannot do is negotiate with scientific conclusions as robustly supported as these.

[Nicky Morgan (Loughborough) (Con)]

16. What steps he is taking to ensure a competitive energy market.

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

Greater competition requires more companies taking part in the market, and increased transparency for consumers. Ofgem will shortly announce proposals to improve wholesale market liquidity and it is important that the regulator takes decisive steps. We have also taken action to cut red tape for small suppliers and Ofgem has published radical proposals to help suppliers to simplify their tariffs and billing information, helping consumers switch supplier and thereby boosting competition.

[Nicky Morgan]

I thank the Minister very much indeed for his reply. The people who should benefit from a competitive energy market are the companies’ customers—our constituents. Is he aware of the practice by some energy companies of repeatedly putting up direct debit payment demands? The customer then has to call the company to negotiate them down, but the next time a bill arrives the direct debit has gone up yet again. What does he think of that behaviour by our energy companies?

[Charles Hendry]

One of the most important aspects of a functioning energy market is transparency; people need to be clear about why their prices are changing and the factors that contribute towards that. The requirement for greater transparency and more information on bills is therefore a fundamental part of the reforms that we see coming through.

[Barry Gardiner (Brent North) (Lab)]

Does the Minister recognise that the insistence on the energy performance certificate at level 3 in order to qualify for the new solar PV fix will be anticompetitive in its practice? The industry has said that it may contribute to reducing employment in solar PV down to 8% of the current levels of employment, and yet it is not related to gas, which is used most for warming Britain’s homes.

[Charles Hendry]

I hope the hon. Gentleman would agree that it is important that if people are receiving a subsidy for electricity which is generated, they should have generally well insulated homes and they should not be wasting it—[Interruption.] But for many people it does help. That was a proposal that was put forward in the consultation process. We have had many responses to that. We are currently considering those with a view to making a final decision.

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

17. What recent discussions he has had with the Secretary of State for Business, Innovation and Skills on growth in the renewable energy sector.

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

My right hon. Friend the Secretary of State and I have regular meetings with ministerial counterparts in the Department for Business, Innovation and Skills on a variety of topics, including renewable energy issues.

[Mr Cunningham]

What discussions has the Minister had with the Business Secretary regarding the 45,000 jobs that could be lost in the construction industry over the next three years and the impact that will have on green energy delivery?

[Gregory Barker]

I regularly discuss renewable energy with colleagues, but we remain very optimistic about the future for British renewables. We inherited a terrible position from Labour, third from bottom of the EU table, but I am glad to say that as of December 2011 there was 11 GW of installed renewable electricity, 15.5 GW in construction and 10.5 GW in planning; and in the hon. Gentleman’s constituency this month we have seen £12 million invested in Geothermal International, alongside £2.5 billion of announced investments since April 2011. That is a very encouraging picture.

[John Thurso (Caithness, Sutherland and Easter Ross) (LD)]

A major area of growth for the renewable energy industry will be marine energy, particularly, of course, the Pentland firth. I congratulate the Minister on the renewable energy park that he has put in the south-west and I thank him for the conversations we have had on turning the Pentland firth into a renewable energy park. Can he tell me what progress we are making?

[Gregory Barker]

I was delighted that this week we were able to launch the UK’s first marine energy park, and under the coalition marine energy in the UK is finally getting the drive forward that it has needed for years. The hon. Gentleman played a key role in developing marine energy potential in Scotland, and I should like to invite him to host a board meeting of the marine energy programme board in Caithness in the summer, where I hope we shall have some good news on the creation of the second marine energy park in the UK, in Scotland.

[Hugh Bayley (York Central) (Lab)]

18. What support his Department provides to community initiatives to help households reduce their carbon emissions.

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

The coalition has big ambitions for community energy. Last week, we announced 82 community winners in the first tranche of DECC’s £10 million competition to help mobilise community energy groups. I will be announcing funding for at least another 100 winning schemes early next month. This new fund is just one element of our strategy to drive local and community energy action.

[Hugh Bayley]

We need consistency in Government policy. City of York council has spent time and money developing a solar energy scheme for council houses, and yet it has been blown out of the water by the Minister’s announcement of 31 October. In order to ensure continuity of policy, do the Government agree that those councils whose schemes to develop solar energy for council houses were being developed before the announcement should continue to get the feed-in tariff at the previous rate?

[Gregory Barker]

Unfortunately, the scheme that the hon. Gentleman refers to—the feed-in tariffs—was devised and implemented by Ed Miliband—[Interruption.]

[Mr Speaker]

Order. The hon. Gentleman should observe the correct forms of address, and he should not refer—[Interruption.] Order. He should not refer to another Member by name in that way. He should briefly finish his answer and resume his seat.

[Gregory Barker]

The feed-in tariffs were devised by the right hon. Member for Doncaster North (Edward Miliband), and unfortunately did not anticipate a single scheme of the type to which the hon. Member for York Central (Hugh Bayley) refers. Under our reformed and restructured feed-in tariff schemes, in the future we very much hope that those schemes will be able to be supported, unlike the shambles of the scheme that we inherited from Labour.

[Mark Pawsey (Rugby) (Con)]

19. What discussions he has had with National Grid on the shutting down of wind farms during times of high wind intensity.

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

Ministers and DECC officials have regular discussions with National Grid about the operation of the electricity network, and this has included the issue of transmission constraints, including our consultation on the transmission constraint licence condition. Reducing or increasing output of generators of all types is a normal part of National Grid’s role in balancing the network at all times. Wind is not treated any differently from any other technology in this respect.

[Mark Pawsey]

My constituents in Rugby, who face applications for wind farms, will be concerned about reports that turbines are switched off in times of high wind speeds because the current infrastructure is unable to handle the amount of electricity generated. When that happens, National Grid pays operators compensation—

[Mr Speaker]

Order. Can we have a quick question? We have to move on, so we need a brief sentence with a question mark at the end of it.

[Mark Pawsey]

What steps has the Minister taken to protect consumers from that element of the increase in their electricity bills?

[Charles Hendry]

About £250 million was paid last year in constraint payments, of which only 10%— £24 million—was paid to the wind sector. The Government are reviewing the transmission constraint licence condition and trying to ensure upgrades are made in many parts of the country, so that the power generated can get where it is needed.

[Jonathan Ashworth (Leicester South) (Lab)]

Given the importance we attach to National Grid maintaining balance in the system, will the Minister tell us what discussions he has had with National Grid on how it contracts with short-term operating reserve aggregators? There is concern that National Grid is paying for so-called phantom megawatts and the cost is being passed on to consumers. Does the Minister agree that we need an independent auditor?

[Charles Hendry]

In all these matters, National Grid is regulated by the official regulator, Ofgem. The STOR arrangements play an important role in the process, ensuring that when there is a significant and sudden change in requirement, generation capacity to meet that demand is available. Of course that important function of our grid system must be operated in a transparent way.

[Bill Esterson (Sefton Central) (Lab)]

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

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

Since my Department’s last Question Time, I have attended the UN climate change conference, where the UK delegation as a whole played a key role in securing the Durban platform, a road map to a global legal agreement. DECC has published the carbon plan, which sets out how we will meet our first four carbon budgets; we have consulted on incentives for solar energy as part of our review of the feed-in tariff scheme; and our clean energy plans took an important step forward with the opening of the UK’s first carbon capture and storage plant in November last year.

[Bill Esterson]

The right hon. Gentleman neglected to mention the defeat in the High Court. My constituents Mark Davenport and Brian Malone lost money setting up solar power companies. Will the Government compensate people who lost money as a direct result of the Secretary of State’s illegal actions?

[Chris Huhne]

Evidence of the very sharp take-up when we announced that we were getting to grips with the problems of the scheme shows that those involved in the industry had plenty of forewarning. As in any other sector, businesses take risks: sometimes the rewards are high and sometimes they are not.

[Priti Patel (Witham) (Con)]

T2. No new nuclear power stations have been built in this country for more than 20 years. How confident is the Secretary of State that Britain will possess all the relevant skills and supply chains necessary to create a thriving nuclear industry in this country?

[Chris Huhne]

My hon. Friend is right to highlight the importance of skills to the nuclear industry’s revival, especially as so many who work in that industry are nearing retirement. That is why the Minister of State responsible for energy, my hon. Friend the Member for Wealden (Charles Hendry), has been working so hard with the Department for Business, Innovation and Skills to make sure, through the nuclear skills academy and other measures, that the skills are there so that we can deliver on time—and we will.

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

T4. The St John’s Sunshine project in Old Trafford in my constituency planned to use feed-in tariffs to fund big society community projects, but Gavin Wood told me yesterday that those involved now feel that proceeding with the project would be a gamble. What assurances can the Government offer that Ministers will make good on their promises to community projects and offer them the certainty they urgently need?

[Chris Huhne]

As I have made clear in the House before, I wish we had been able under the law to provide separate support to the community schemes that have come forward, but we were not able to do that under the legislation passed by the previous Government. We will consult on that. I merely point out, as I did to the hon. Member for Harlow (Robert Halfon), that the continued fall in the cost of solar panels will make more and more schemes viable.

[Laura Sandys (South Thanet) (Con)]

T3. The green deal is very dependent on consumer uptake and consumer trust in the energy companies. What sort of expertise has the Department in understanding consumer behaviour and how will we be able to deliver this programme through consumer behaviour change?

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

My hon. Friend has considerable experience and understanding of consumer behaviour, and she will be pleased to know that we have a specific consumer behavioural insight team in DECC, but the greatest value comes from liaising with retail companies with real track records, such as Kingfisher, B&Q, John Lewis, Sainsbury’s and Tesco. Ultimately, it is the private sector that will guide our thinking and be responsible for the success of the green deal.

[Albert Owen (Ynys Môn) (Lab)]

T6. The Secretary of State seemed to misunderstand my question on oil refinery capacity earlier. Oil and petroleum trade bodies tell me that there is a shortage of oil refinery capacity in this country, and that crude oil is exported to India and brought back in. What assessment has the Secretary of State made of that, and how is he responding to that serious question?

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

It is a very serious question and I am grateful to the hon. Gentleman for pursuing it further. Some of the crude produced in this country is not suitable for use here because of the diesel demand and therefore it is exported, and the diesel fuel tends to have to be imported, which results in an imbalance. Through the downstream oil infrastructure forum we are looking at the industry’s strategy to put in place a long-term programme to assess how we can support and build up that industry, and the role of international investors is critical to that process.

[Philip Davies (Shipley) (Con)]

T5. Further to the question from my hon. Friend the Member for Rugby (Mark Pawsey), what estimate has the Secretary of State made of the number of wind turbines that stopped working at some point during the year, and how many of those stopped working due to too little wind and how many of them stopped working because of too much wind?

[Chris Huhne]

I will happily come back to my hon. Friend on wind turbines, but just because someone falls off a ladder does not mean that the House jumps to abolish ladders. In a similar sense, the operation of wind turbines, particularly those that are onshore, which are most economic, provides an increasingly important contribution to our energy needs, which is home-grown and not likely to be buffeted by events in the middle east.

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

T7. Four thousand five hundred employees of Carillion, headquartered in my constituency, went into Christmas on notice of redundancy due to the arbitrary and clearly illegal changes to the solar feed-in tariffs. We all agree that tariffs need to be reviewed, but will the Minister not help to end the terrible uncertainty in which Carillion employees are living by accepting the High Court decision and taking the time to review the policy properly?

[Chris Huhne]

I have already referred to the substantial costs and the fact that the industry would face a substantial reduction in the number of potential installations were we to accept those costs. I merely point out as well that going forwards we have attempted to provide that certainty, precisely because we laid the order, making sure that the new rate will be available from the beginning of March.

[Andrew Rosindell (Romford) (Con)]

T8. Has the Minister made an assessment of the energy sources that may or may not be available in some of the British overseas territories, particularly the Falkland Islands?

[Chris Huhne]

The matter of oil exploration around the Falkland Islands is a lead responsibility of the Foreign and Commonwealth Office. Exploration is under way. Some of the initial exploration undertaken in territorial waters was disappointing, but that may change in future.

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

Having been a Minister myself in the Department of Energy and Climate Change, I cannot believe that officials did not warn the Secretary of State and Ministers of the folly of setting a cut-off date before the end of the consultation period. Will he not now apologise to those whose plans have been ruined and whose jobs have been lost, and acknowledge that a review was provided for in the Labour Government’s legislation?

[Chris Huhne]

The right hon. Lady sadly does not draw attention to the fact that there was no system of automatic degression under that scheme. However, she will be interested to hear that the general point that we should learn all the lessons required to be learned from this episode is not lost on the ministerial team, and I have ensured that we are doing precisely that. I do not think that it will come to conclusions that will be entirely to the right hon. Lady’s liking.

[Mr Robin Walker (Worcester) (Con)]

Does the Secretary of State agree that swift action to deal with metal theft is vital to protect our energy infrastructure, and will he therefore join me as a member of the all-party group on combating metal theft in welcoming today’s statement from the Home Office?

[Chris Huhne]

I certainly welcome today’s statement from the Home Office and think that the right hon. Lady the Home Secretary is putting forward some excellent ideas on how to deal with this problem. Metal theft affects all networks, including electricity networks, and because it affects networks it has a much broader cost than many other crimes.

[Mr Ben Bradshaw (Exeter) (Lab)]

The Government’s incompetence and arrogance over the feed-in tariff fiasco has been staggering. The industry and the public need certainty, so will the Secretary of State now try to answer the question my right hon. Friend the Member for Don Valley (Caroline Flint) asked him earlier, abandon his costly and doomed legal case and sit down with the industry to agree a sustainable solution?

[Chris Huhne]

As I have already pointed out, a substantial part of the industry intervened in the court case on our side. This is the best way forward for the sustainable growth of the industry. We have also laid the order that will provide absolute certainty on the tariff rate we are providing from 3 March, so I think that the right hon. Gentleman is being uncharacteristically churlish.

[Tessa Munt (Wells) (LD)]

On Tuesday the Institution of Engineering and Technology is due to publish its long-awaited report on the undergrounding of electricity transmission lines. Given that 1,000 new pylons would have a significant effect on the natural environment and the landscape, what steps has the Secretary of State taken to ensure that the study considers the wider economic benefits of undergrounding to tourism, particularly in my part of Somerset, and the lifetime maintenance costs of undergrounding compared with using mile upon mile of pylons?

[Charles Hendry]

It is a very important study. As part of the process of understanding whether the grid should be under or above ground, we need to start with an assessment of the real costs of undergrounding and overgrounding. This authoritative study is the most dedicated of its kind ever carried out and makes an important contribution to the debate. It will not answer all the questions, but it is an important element.

[Fiona Mactaggart (Slough) (Lab)]

The Minister will be aware that the cost of smart meters will be borne by us in our electricity bills, but the benefits will not automatically accrue to the consumer. How will he ensure that the most vulnerable, poor and elderly consumers benefit from the installation of smart meters and are protected from disconnection?

[Charles Hendry]

The hon. Lady makes an extremely important point. One of the keys to the success of smart meter roll-out is the education programme that will go with it to ensure that householders know how to use them to their greatest benefit. We are talking to consumer groups to ensure that that is done in the most effective way and looking at how we can involve parish councils, local charities and other organisations trusted by consumers to ensure that they get the greatest benefit as quickly as possible.

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

The Minister mentioned the creation of the south-west marine energy park, which is a tremendous boost to projects such as Wave Hub in my constituency. Does he agree that projects being assessed for capital grants to develop wave power should be given preference if they are located within the marine energy park?

[Gregory Barker]

The reason we have created marine energy parks is to bring together resources in a co-ordinated and strategic fashion, which has not happened in the past. My hon. Friend’s point is extremely well made and very valid. I expect a significant part of the Department’s research budget—£20 million—to be set aside for wave and tidal technology and to flow to his part of the world.

[Julie Hilling (Bolton West) (Lab)]

The energy companies tell us that very few customers are disconnected, but we know that many customers are so-called self-disconnected because they cannot afford to put credit on their pre-payment meters, especially if they are already paying off previous arrears through the meter. Will the Minister as a matter of urgency ask the energy companies how many people are self-disconnected?

[Charles Hendry]

As I said earlier, it is important that we understand why people are disconnected. If there is not enough clarity about why people are self-disconnecting, we will ask for more details on why that is happening.

[Neil Parish (Tiverton and Honiton) (Con)]

Mid Devon district council, which is based in Tiverton, was planning just before the tariff rate was cut to have 1,800 social homes with solar panels. Will Ministers be prepared to meet officials from the council to discuss a way forward?

[Gregory Barker]

I would be delighted to meet my hon. Friend to discuss the matter. Obviously we want to build a consensus on the way forward. I will publish plans for the reform of the feed-in tariff so that we can put it on a much sounder footing and learn from the mistakes of the system we inherited.

[Ian Lucas (Wrexham) (Lab)]

What assessment has the Secretary of State made of the Government’s liability for their unlawful actions in bringing in the feed-in tariff consultation?

[Chris Huhne]

We disagree, respectfully, with the Court of Appeal’s judgment, and that is precisely why we intend to go to the Supreme Court. Clearly, given that we disagree, the issue of liability at this stage does not arise.

[Gordon Henderson (Sittingbourne and Sheppey) (Con)]

Half an hour ago the Thamesteel works in my constituency went into administration, with the potential loss of 400 jobs. Obviously I hope that the administrators will find somebody to take over the plant as soon as possible, but any successor will face similar problems with the high cost of energy as do so many other companies in the energy-intensive industry. What can my right hon. Friend do to help such companies?

[Chris Huhne]

As my hon. Friend knows, the Chancellor of the Exchequer announced in the autumn statement that we will bring forward a package to help the energy-intensive industry—

[Mr Speaker]

Order. I enjoy greatly listening to the Secretary of State, but can he please face the House? Then we will all have the benefit of his eloquence.

[Chris Huhne]

We will therefore bring forward that package with a consultation paper, and there will be detailed proposals at that point.

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

In the light of the court case that has been mentioned and the Secretary of State’s comments this morning, it is clear that the Department is no longer fit for purpose. Is he really telling the House that he is going to drag the Government’s reputation further into the mire and waste further large amounts of taxpayers’ money in order to pursue what is really a wasted cause?

[Chris Huhne]

Let me reiterate the point that, if we were merely to accept the number of installations after our reference date and before 3 March, we would add £1.5 billion to the total cost of the scheme. That is what Opposition Members are asking us to do. If we were to go further, the cost would be even greater. If the hon. Gentleman thinks that that is a price worth paying, he is entirely consistent with what else Opposition Members say on economic policy, but it is not something that will be entertained by Government Members.

Business of the House

Thursday 26th January 2012 Commons Chamber

11:32

[Ms Angela Eagle (Wallasey) (Lab)]

Will the Leader of the House please give us the business for next week?

[The Leader of the House of Commons (Sir George Young)]

The business for the week commencing 30 January will be:

Monday 30 January—Second Reading of the Civil Aviation Bill.

Tuesday 31 January—Conclusion of consideration in Committee of the Local Government Finance Bill (day 3).

Wednesday 1 February—Consideration of Lords amendments to the Welfare Reform Bill.

Thursday 2 February—General debate on the transparency and consistency of sentencing.

The provisional business for the week commencing 6 February will include:

Monday 6 February—Second Reading of the Financial Services Bill.

Tuesday 7 February—Opposition day (un-allotted day) (half-day). There will be a debate on an Opposition motion, subject to be announced, followed by business to be nominated by the Backbench Business Committee.

Wednesday 8 February—Motions relating to the police grant and local government finance reports.

Thursday 9 February—General debate on the Somalia conference.

I should also like to inform the House that the business in Westminster Hall for 9 February will be:

Thursday 9 February—Debate on the seventh report of the Culture, Media and Sport Committee on “Football Governance”.

Earlier this week, all colleagues should have received an e-mail on behalf of the House service, inviting them to participate in the 2012 survey of services. As well as providing an opportunity for Members and their staff to provide feedback on the services we currently use, it will also help the House service and the House of Commons Commission to identity priorities for the next few years, when budgets will be tighter. I encourage colleagues to find a few minutes to take part.

[Ms Eagle]

I thank the right hon. Gentleman for his response and for finally announcing three whole days of actual Government business—for, I think, the first time since October. The Leader of the House wanders about saying that Parliament is not a legislative factory, but if he were running a factory he would have had us all sent home on half pay ages ago.

I raised last week the extraordinary situation of the Business Secretary lining up a speech to a think-tank in order to announce his proposals on executive pay. The Leader of the House promised to remind the Business Secretary of his obligations under the ministerial code. I fear he would not make a very good factory foreman, because it took an urgent question to force the Business Secretary to come to the House first. Did the right hon. Gentleman forget to remind the Business Secretary, or are Government relations so poor that his Liberal Democrat colleague just ignored him?

Another Minister who is reluctant to come to the House is the Chancellor. Despite two weeks of terrible economic news, he has made no appearance at the Dispatch Box. This week’s GDP figures showed that the economy is shrinking, not growing; 2.7 million people are out of work; and family budgets are under extraordinary pressure. This time last year, the Government’s excuse for the shrinking economy was the snow. We have now had the mildest winter for 350 years, and the economy is still contracting; it was too cold last year, and it is too warm this year—the country is tired of excuses from a Government who refuse to take responsibility for their own disastrous economic mismanagement.

Given that the Chancellor was not present for Treasury questions, will the Leader of the House be a bit more of an assertive factory foreman and insist that he come to the Chamber? If the Chancellor does ever condescend to reappear at the Dispatch Box, we could ask him about the bonus scheme for the chief executive of the Royal Bank of Scotland. I fear that the Leader of the House will be unsuccessful in coaxing the Chancellor out of hiding, so perhaps he will now explain why RBS, a state-owned bank bailed out by the taxpayer, wants to give its chief executive a £1 million bonus this year. The board of RBS is thinking of paying its chief executive in one day more than someone on average earnings would make in a lifetime. We have heard the synthetic outrage from those on the Government Benches, but the question is, what are they going to do about it?

Government incompetence plumbed new depths this week when the local government Minister ended up in the Aye Lobby supporting an amendment that he had rejected moments earlier at the Dispatch Box. Will the Leader of the House confirm that the Minister, on realising that he was locked in the wrong Lobby, bravely took refuge in the toilet while a Conservative Minister barked orders at him through the doorway? The Government’s legislative agenda has been bogged down for months—[Laughter.] It says something about the incompetence of the Government that it took the Serjeant at Arms to flush the Minister out—[Laughter.] The local government Minister has inadvertently revealed the Liberal Democrats’ new political strategy—if in trouble, run for the toilet.

Last night, the Government suffered a crushing defeat in the House of Lords. Their proposal to charge lone parents for using the Child Support Agency is simply “unjust”; I am quoting a Conservative peer. I agree with a former Conservative Lord Chancellor, a former Conservative party chairman and a former Liberal Democrat Chief Whip—why on earth will not the Government? The party of Lloyd George is reduced to this: voting to take away support from young people with cancer, the disabled and lone parents. I quite understand why Liberal Democrat Ministers have taken to hiding in the toilet.

It is more than a year since the Health and Social Care Bill was first introduced. It started at 353 pages; by Second Reading, it had grown to 405 pages; and now, almost 2,000 Government amendments later, it weighs in at a colossal 445 pages. In the Leader of the House’s legislative factory, MPs are sat around twiddling their thumbs, but the Clerks are run off their feet redrafting the Government’s disastrous Bills.

The growing length of the Health and Social Care Bill has not won over critics—the royal colleges, doctors, nurses, patient groups and the voluntary sector all now oppose the Bill. Even the Select Committee on Health, chaired by a former Conservative Health Secretary, has questioned what the Government are doing. The Health Secretary is about the only person in the country who still believes in the Bill. Is it not time that the Government listened and dropped this disastrous measure?

[Sir George Young]

On the programme before the House, we believe in a balanced diet, including proposed legislation. For the hon. Lady to describe as “twiddling our thumbs” Opposition days, Back-Bench business days and serious debates, such as the one I have announced on Somalia, does a genuine discourtesy to the House.

My right hon. and hon. Friends are fully aware of the ministerial code and I remind them about it from time to time.

The Chancellor of the Exchequer was at ECOFIN on Tuesday, which is why he was not at Treasury questions. I am sure that if the hon. Lady reflects on her days at the Treasury, she will understand that from time to time the Chancellor has to represent this country overseas and therefore cannot appear in the House.

I am surprised that the hon. Lady raised the subject of bonuses, as the contract that entitles Mr Hester to a bonus was put in place by the Labour Government. We have done something that they failed to do: we have limited cash bonuses to £2,000 at RBS and Lloyds, and we will do the same this year. We have also said that the bonus pool at RBS and Lloyds will be lower and more transparent this year than last year—something else that the Labour Government failed to do. So far as this year is concerned, no decision on bonuses has been taken.

I have looked at Hansard, and the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Hazel Grove (Andrew Stunell), voted the right way. I understand that after so doing, as an act of generosity, he went to refill one of the carafes on the Table so that his fellow Minister would be refreshed during the remaining stages of the debate, when he was entrapped in the opposite Division Lobby. I understand that there were fraternal greetings. We are all grateful that my hon. Friend emerged from the Lobby unharmed.

On the Child Support Agency, I understand that the provision to make charges was introduced by the Labour Government. We all know from our constituency work that the CSA is in need of reform. All too often, it lets down those it seeks to help. Part of the purpose of that reform is to encourage more settlements outside the CSA. The proposal to which the hon. Lady referred is part of that process.

On the Health and Social Care Bill, many of the amendments to which the hon. Lady referred were called for by the Opposition, so I hope she will welcome them. In due course, this House will deal with Commons consideration of Lords amendments.

[Several hon. Members]

rose—

[Mr Speaker]

Order. A large number of right hon. and hon. Members are seeking to catch my eye. Ordinarily, I seek to accommodate everybody, but I give notice that that will almost certainly not be possible today, because I have to protect the Back-Bench business. There is an important topical debate on the European Council and an important debate on defence, both of which are heavily subscribed. To get in the maximum number of colleagues on business questions, I am looking for short questions and the usual short answers from the Leader of the House.

[Sir Alan Haselhurst (Saffron Walden) (Con)]

Will my right hon. Friend say how many communications he has received from my constituents on the Daylight Saving Bill? Would he care to reply to them through me by saying whether there is any prospect of his providing more time for this subject, if not next week, at some point in the future?

[Sir George Young]

I am grateful to my right hon. Friend. A good number of e-mails have found their way into my inbox. Of course I understand the strong feelings that have been expressed by our constituents about what happened last Friday. I commend my hon. Friend the Member for Castle Point (Rebecca Harris), who did heroic work in bringing the Bill forward and enabling the House to consider it last Friday in a form of which the Government approved. The Government supported the Bill as it passed through. I have considered my right hon. Friend’s suggestion of providing more Government time. I do not think that that would do the trick, because it would not be this Bill that would get more time, were more time to be provided. There is also the question of whether the Bill would have time to get through another place. My view is that at the beginning of the next Session, somebody should pick up the baton from my hon. Friend the Member for Castle Point and try another private Member’s Bill. I remind the House that in previous Parliaments this has always been a subject for private Members’ Bills. I think that that is the right way to make progress.

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

Last week the Procedure Committee published its excellent report on e-petitions. Together with the Backbench Business Committee and the Hansard Society, we will hold a seminar on the future of e-petitions on 6 March. Will the Government therefore indicate when they will produce a response to the report so that we can have a debate in the Chamber in which the whole House can express an opinion on the future of e-petitions?

On the subject of time, the Backbench Business Committee is overwhelmed with demands for debates on issues such as metal theft, daylight saving and UK Trade & Investment—very important subjects that we do not have the time to allocate for debate. Perhaps the Government can help the Backbench Business Committee and the House to bring forward some of those topics for debate by allocating more time to the Committee while we are waiting for business to come from the other House.

[Sir George Young]

I am grateful to the hon. Lady. The important subjects she mentions, which hon. Members want to debate, are referred to as “thumb twiddling” by the hon. Member for Wallasey (Ms Eagle). I welcome the report from the Procedure Committee. I am broadly sympathetic to its proposals, which build on the success of e-petitions. I note what she said about the time of her seminar, which I greatly welcome. The Government will seek to respond to the e-petition debate shortly after that seminar.

Standing Orders provide that a minimum of 35 days should be provided in each Session, and so far we have provided 49. However, I recognise the demand to which she refers, and we will seek to respond to her bid for more time between now and the end of the Session.

[Mr Greg Knight (East Yorkshire) (Con)]

May we have a debate on bad budgeting and the wasting of public money? Has my right hon. Friend seen reports today that the cost of the London Olympics is likely to balloon from £2.3 billion to more than £12 billion—a huge sum that will bring no benefit at all to many parts of the country, including East Yorkshire? When that flaming torch goes round the country, will not the fuel that it is burning be pounds sterling?

[Sir George Young]

I am surprised by how my right hon. Friend greets the London Olympics. I think he will find that benefits are spread broadly throughout the country, not least from much of the work that is now taking place. My understanding is that the Olympics will be held within budget and that the work is on time. No events are being held in North West Hampshire, but my constituents broadly welcome the London Olympics as something that they are proud this country is holding, and they are glad that the flame is going through North West Hampshire. I wonder whether my right hon. Friend accurately reflects all the views of his constituents.

[Valerie Vaz (Walsall South) (Lab)]

May we have an urgent statement from the Secretary of State for Health on why he dismissed the Health Committee’s report as “Westminster nonsense” and “out of date”? He is now telephoning all the royal colleges to tell them to withdraw their opposition to the Bill. Will the Leader of the House use his good offices to get the Secretary of State out of his bunker and into the Chamber?

[Sir George Young]

The Government will respond in due course to the Health Committee report that was published on Monday, and the House will debate the remaining stages of the Health and Social Care Bill when it completes its passage in another place. I think that my right hon. Friend was perfectly entitled to defend the Government’s view on the radio and elsewhere on Monday, and of course he will continue to be held accountable in the House at Question Time and in Opposition day debates, which were also described as “thumb twiddling” by the hon. Member for Wallasey.

[Sir Bob Russell (Colchester) (LD)]

May we have a debate on the charitable not-for-profit sector to deal with what has been described to me as the “Tescofication” of the sector, which is contrary to the big society and localism? For example, Ormiston children and families trust, which operates across the east of England, is about to lose seven of its Sure Start centres in my constituency because Barnardo’s has come in and hoovered it up.

[Sir George Young]

I am sorry to hear of the potential loss of Sure Start centres in my hon. Friend’s constituency. I would be happy to pursue the issue with my right hon. Friend the Secretary of State for Work and Pensions, who is anxious to build on the Sure Start initiatives and extend the help that they offer to many people.

[Heidi Alexander (Lewisham East) (Lab)]

Last Friday, a handful of hon. Members waffled on for the best part of five years—[Laughter] It felt like it! I mean five hours—to kill the Daylight Saving Bill. In how many other workplaces does the Leader of the House think it would be acceptable for individuals purposely to waste time, and what is he going to do to change the practice here?

[Sir George Young]

I understand the sense of frustration that the hon. Lady expresses, which is shared by many of my constituents. She will know that the Procedure Committee is conducting an inquiry into the calendar, included within which is a section on private Members’ Bills. As I said before, I have examined the matter, and in my view there is no practical way for that Bill to complete its passage through both Houses in the remainder of the Session, even if the Government were to provide time. The best way for it to be taken forward, as I suggested earlier, is for someone to build on the heroic work of my hon. Friend the Member for Castle Point.

[Bob Blackman (Harrow East) (Con)]

One of the first decisions that Mayor Boris Johnson took was to ban the consumption of alcohol on public transport. That has meant that thousands of passengers have been able to enjoy their journeys to and from home. Now, the old pretender threatens to remove the ban if he is re-elected. May we have a debate on the consumption of alcohol on public transport?

[Sir George Young]

I am grateful to my hon. Friend for bringing to the attention of the House and the wider public some of the issues that will confront Londoners later this year, when they will have to make a choice between the current Mayor of London and the old pretender, as he put it. One of the many reasons for continuing to vote for Boris is exactly the initiative that he mentions.

[Graeme Morrice (Livingston) (Lab)]

Has the Leader of the House been given notice that the Exchequer Secretary to the Treasury intends to make a statement, either written or oral, about the closure of 15 offices of Her Majesty’s Revenue and Customs, which was announced yesterday?

[Sir George Young]

I am not aware of any announcement, and I believe that there is no written ministerial statement today from my hon. Friend the Exchequer Secretary. I will make some inquiries about the issue that the hon. Gentleman raises.

[Jeremy Lefroy (Stafford) (Con)]

May we have a debate on postal prices? Many of my constituents are alarmed by the proposed rises in second and first-class stamps. One of them, Mr Burton, put it very well when he expressed his concern that he would lose the pleasure of the written word.

[Sir George Young]

I am aware of my hon. Friend’s concern, and I will raise the matter with ministerial colleagues at the Department for Business, Innovation and Skills, who have responsibility for it. He will know that there are efforts to extend competition in postal services, in order potentially to bring down some of the costs of posting mail.

[Chris Bryant (Rhondda) (Lab)]

I do not think the Leader of the House knows his own power. It would be perfectly possible for the Government to take on the Daylight Saving Bill and ask the House of Lords to agree to carry-over to allow it to go into the next Session, then we would be able to have it on the statute book in the next few months. Rather than succumbing to the witterings of a few Members last Friday, why does he not back the wholehearted support for the Bill of nearly everybody else in the House and ensure that it comes to pass?

[Sir George Young]

I notice that the hon. Gentleman, when he was Deputy Leader of the House, took no steps whatever to change the procedure for private Members’ Bills. It has not changed at all; nor is he right in what he says about carry-over in the other place.

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

Can time be found for a debate on planning applications for mobile telephone masts? The transparency of those applications is causing real concern to many residents in my constituency, and we would welcome a debate at the earliest opportunity.

[Sir George Young]

I understand my hon. Friend’s point, and many of us are aware of concern in our constituencies about communication masts, although my impression is that there is much more sharing than there used to be. There was consultation last year on a national planning policy framework, which included a section on communication masts. That consultation has ended, and the Government will announce their conclusions shortly. I cannot promise a debate, but there may be an opportunity for further discussion when that process is complete.

[Mr Dave Watts (St Helens North) (Lab)]

In answer to a question about cuts affecting disabled children asked by my right hon. Friend the Member for Stirling (Mrs McGuire), the Prime Minister said that she was “wrong”. We now know that she was in fact correct. Will the Prime Minister come to the House to make an apology and correct his inaccurate statement?

[Sir George Young]

My right hon. Friend was quite right in what he said yesterday. I have made some inquiries, and under the introduction of universal credit there will be transitional protection to ensure that there is no cash loss for those whose circumstances otherwise remain the same when they migrate from their existing benefit. The Prime Minister was absolutely right in what he said.

[Damian Hinds (East Hampshire) (Con)]

With jobs and growth right near the top of the agenda, Tuesday’s Westminster Hall debate on self-employment was massively oversubscribed by Government Members. Sadly, the entire parliamentary Labour party was unavoidably detained elsewhere. May we have another debate in Government time to allow the Labour party to join the debate on jobs and growth?

[Sir George Young]

I am sorry that there was an apparent lack of interest in self-employment among Opposition Members. I am sure that their constituents are as interested as ours in the opportunities available for self-employment, particularly under the new enterprise allowance scheme, which I hope will give many people an opportunity to commence their own business and in due course begin to employ other people.

[Pete Wishart (Perth and North Perthshire) (SNP)]

What are the Government going to do about the Scotland Bill? It is back in the Lords today, like a sad, eccentric old aunt that nobody wants to visit. After the momentous events in Scotland of the past couple of weeks, as we move towards independence, are not the Government starting to think about pulling the plug on the sad old dear?

[Sir George Young]

Absolutely not. The Scotland Bill will implement commitments that I believe all three parties made. The reason progress is not being made at the moment is that one of the options in the consultation document, as I am sure the hon. Gentleman is aware, was to amend the Bill. We need the consultation process to end before we decide whether it needs to be amended as was suggested in that document.

[Karen Bradley (Staffordshire Moorlands) (Con)]

Tomorrow morning I will have my monthly slot on Moorlands Radio, which is on 103.7, in case you, Mr Speaker, should ever be in Staffordshire Moorlands. It is a great community local radio station, and like many up and down the country it provides access to information for local organisations, charities, events and good causes. However, it faces many challenges, so will the Leader of the House find time for a debate on community local radio stations and what we can do to support them?

[Sir George Young]

I am sure that we would all like to take part in that debate, particularly if it were recorded by our own community radio stations. The Government are a keen supporter of community radio and allocate some £450,000 to the community radio fund. I commend my hon. Friend’s work to get more resources for Moorlands Radio. All such radio stations are a means for MPs to communicate with our constituents, listen to their concerns and reflect them in the House.

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

Will the Leader of the House shed some daylight, if not sunlight, on what the universities Minister is getting up to? We had a White Paper on higher education, but now it has seeped out of the Department for Business, Innovation and Skills that there will be no higher education Bill. What is going on? There is a rumour that there is some bold initiative on higher education that is so secret that someone would have to be shot if they heard it.

[Sir George Young]

In which case, I am very glad that I have not heard it.

The contents of the Queen’s Speech will be made available to the House in due course. Not only is the date of that event still unknown, but its contents are still a matter of ministerial discussion.

[Greg Mulholland (Leeds North West) (LD)]

May we have a debate on the process of applying for village green status? In 2004, “Keep Yeadon Banks Green” applied for village green status for Yeadon Banks. Several attempts by Leeds Group plc to block it have been overturned, including in the High Court, but now, in 2012, we are having to take the matter to the Supreme Court, which is outrageous. May we have a debate on simplifying the process so that areas get the protection they need?

[Sir George Young]

I understand that part of the matter is covered in the Localism Act 2011, but many hon. Members have the same problem as my hon. Friend. I will draw it to the attention of Ministers at the Department for Communities and Local Government, but I am sure that many people would welcome any efforts that he might make to have it debated either in this Chamber or in Westminster Hall.

[Mrs Madeleine Moon (Bridgend) (Lab)]

N-ergy is a social enterprise working across more than 40 prisons in England and the five Welsh prisons, offering vocational and employability programmes to offenders and ex-offenders. However, like many successful SMEs working in specialist areas, it is unable to bid for public procurement contracts because its turnover is not seen as being high enough. May we have a debate on developing a separate public procurement process for SMEs, so that some of their innovative and new ideas can be brought into Government contracting?

[Sir George Young]

I commend the work that many voluntary organisations do to help those who are in prison get the skills that they need to cope when they leave. There will be an opportunity to raise that specific issue with my right hon. Friend the Minister for the Cabinet Office, who has responsibility for procurement, on 8 February, but in the meantime I will raise with him the option that she mentions of having a separate category so that organisations such as the one to which the hon. Lady refers might be able to bid for public contracts.

[Mark Lancaster (Milton Keynes North) (Con)]

May we have a debate on apprenticeships? I am sure that the Leader of the House will join me in congratulating the sponsors of the new Milton Keynes apprenticeship academy, which opens today and specialises in IT and accountancy. With such a rise in apprenticeships, does he agree that it is vital that they should be led by demand from businesses?

[Sir George Young]

I welcome what is happening in my hon. Friend’s constituency, and the issue of apprenticeships was touched on in the Opposition day debate that we had on Monday. He will applaud the work that the Government are doing to increase the number of apprenticeships very substantially, and I agree entirely that that should happen in response to the needs of businesses. Apprentices should get the skills that they need to apply for the jobs in our constituencies.

[Mr Ben Bradshaw (Exeter) (Lab)]

I hope the Leader of the House sensed the House’s disappointment in his reply to the right hon. Member for Saffron Walden (Sir Alan Haselhurst) on the Daylight Saving Bill. Given the overwhelming support for the Bill, the outrageous wrecking tactics last Friday and the fact that this House is not exactly inundated with Government business, why does the Leader of the House not introduce a Government Bill in the next two weeks?

[Sir George Young]

I believe that, like the hon. Member for Rhondda (Chris Bryant), the right hon. Gentleman also had responsibilities as Deputy Leader of the House in a previous Parliament, and he took no steps whatever on reform.

[Chris Bryant]

Answer the question!

[Sir George Young]

In response to that heckling, I have already answered the question. I have looked at the matter. There is no way that a Bill could complete its passage through both Houses in the time available. My advice remains that a successful Member in the ballot in the next Session should pick up the baton currently held by my hon. Friend the Member for Castle Point (Rebecca Harris).

[Several hon. Members]

rose—

[Mr Speaker]

Order. I remind the House that there is heavy pressure—extensive pressure—on time, and I would appeal to colleagues who might have dreamed up lengthy questions to shorten them to single sentence questions. If they do so, they will be helping other colleagues to get in.

[John Glen (Salisbury) (Con)]

Will the Leader of the House urgently make time for a debate on judicial reform in the Republic of the Maldives? Although the judiciary is constitutionally independent, sitting judges are underqualified, often corrupt and hostile to the democratically elected regime.

[Sir George Young]

The Under-Secretary of State for Foreign and Commonwealth Affairs, my hon. Friend the Member for North East Bedfordshire (Alistair Burt), is seized of this problem and is in touch with the Maldives President to see whether we can resolve the impasse. The high commission in Colombo is also engaged. We want to help the Maldives to make progress towards democratic reform in the direction that my hon. Friend the Member for Salisbury (John Glen) outlines.

[Paul Blomfield (Sheffield Central) (Lab)]

May I press the case for a statement from the Business Secretary on higher education policy, to end the uncertainty that has been created by the Government’s chaotic way of developing their policy, which is causing enormous damage to our universities?

[Sir George Young]

I reject the hon. Gentleman’s accusation of confusion. There will be an opportunity to cross-question my right hon. Friend the Secretary of State for Business, Innovation and Skills the next time his Department answers questions. Our proposals for education reform that have gone through the House have been broadly welcomed.

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

In the autumn statement the Chancellor provided the Humber bridge with £150 million so that tolls could be cut, for which all had argued. Sadly, a Labour council in the region has rejected that offer, meaning that our tolls could stay at £3 for vehicles. May we have statement from the Transport Secretary on that subject?

[Sir George Young]

I understand my hon. Friend’s concern. I will, of course, raise the issue with my right hon. Friend the Secretary of State for Transport to see whether she can take any action to resolve this dilemma.

[Gavin Shuker (Luton South) (Lab/Co-op)]

The House will be aware that the climate change risk assessment was published this week, because it was briefed heavily two days ago to the newspapers. Hon. Members will have seen it in their papers this morning, but as yet no executive summary is available in the Vote Office. Will the Leader of the House have a word with the Secretary of State for Environment, Food and Rural Affairs and ask her to pull her finger out?

[Sir George Young]

I may make a request, but it will not be so indelicately put as the hon. Gentleman suggests. I will convey his concerns to my right hon. Friend and see whether she can respond constructively.

[Mark Menzies (Fylde) (Con)]

Dementia is one of the cruellest diseases of our age. Will my right hon. Friend make time available to discuss not only dementia but the support we provide to those who care for sufferers?

[Sir George Young]

My hon. Friend raises an important subject. Some 600,000 people care for those who suffer from dementia. The Government have sought to help by putting £400 million into the NHS to provide the resources for breaks for those people. We outlined our strategy in a document published last year. I would welcome a debate; my hon. Friend might like to approach the Backbench Business Committee.

[Mr Denis MacShane (Rotherham) (Lab)]

May we have a debate on the extraordinary refusal of Mr Christopher Graham, the Information Commissioner, to reveal details to some 17,000 victims of newspapers that were blagging and finding out personal details using Mr Steve Whittamore? It is extraordinary that the Information Commissioner—of all people—is denying the British people their right to know. The details are with the police and the newspapers, but not with the victims themselves. This is not Stasi time for the Information Commissioner.

[Sir George Young]

The right hon. Gentleman will know that there is a process of appeal against the Information Commissioner’s decisions, which is open to those who object to them in the way that he has outlined. I am not sure that it would be appropriate for the Government to get involved.

[James Morris (Halesowen and Rowley Regis) (Con)]

The people of Halesowen and Rowley Regis are rightly anxious to see action against the something-for-nothing society at all levels. May we have a debate in Government time to explore why the previous Government did not get undertakings on executive pay from banks that took taxpayers’ money, and a debate on what this Government are doing to curb bankers’ bonuses?

[Sir George Young]

I would welcome such a debate. My hon. Friend will know that we have introduced a bank levy that raises £2.6 billion a year, and reduced bonus payouts, which are now some 40% lower than under the previous Government, who, as he says, took no action whatever in that important area.

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

Following the farce of last Friday, will the Leader of the House agree that it is important for the Speaker to be given powers to limit the length of speeches by Back Benchers in debates on private Members’ Bills?

[Sir George Young]

You, Mr Speaker, will have heard that question, which was directed towards you rather than me. I would not want to prejudice my position in any way by beginning to answer it.

[Gavin Barwell (Croydon Central) (Con)]

May we have a debate on what the Chancellor has done to tackle tax avoidance and on what else could be done, so that hard-pressed taxpayers in Croydon and elsewhere can be confident that they are not paying a penny more for people who are allowed to get away without paying their fair share?

[Sir George Young]

My hon. Friend raises an important issue. We are introducing measures that will raise around £4 billion over the current Parliament by clamping down on tax avoidance. Some 2,250 HM Revenue and Customs staff are moving into a new anti-evasion and avoidance unity. We took action in the previous Budget to close loopholes.

[Kevin Brennan (Cardiff West) (Lab)]

Why have the Government failed to provide support or time for the Metal Theft (Prevention) Bill, which was due to be discussed last Friday? It is supported by hon. Members on both sides of the House in every party, and there is a crisis out there in the country. It could have got through in time. What is the reason for the Government’s lack of support? Is it petty party politics?

[Sir George Young]

I do not know whether the hon. Gentleman has had time to look at the written ministerial statement by the Home Office today, but it outlines the action the Government are taking on scrap metal dealers. I know he was on television earlier this morning, which may have detained him from looking at that.

[Martin Vickers (Cleethorpes) (Con)]

My constituents are dismayed to find that, following the resignation of one of their MEPs, they will have no say in who her successor will be. Their cynicism in the political process increased when they found that her successor will be her husband. Will the Leader of the House find time for a debate on the process of replacing our MEPs?

[Sir George Young]

The process that my hon. Friend outlines—whatever feelings it may engender—is set out in statute and enshrined in legislation. I would be misleading him if I said I had any plans to amend it.

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

The Government’s decision to appeal against the Court ruling that it was illegal to slash solar tariffs retrospectively raises critical questions about whether the UK is a safe place to invest at all. The CBI has said that it

“creates a mood of uncertainty that puts off investors”.

May we therefore have an urgent debate on the impact of that decision on investor confidence in the UK?

[Sir George Young]

I cannot promise an early debate, and the hon. Lady will know—I suspect that she was in her place—that that was dealt with at some length an hour ago in Department of Energy and Climate Change questions.

[Andrew Jones (Harrogate and Knaresborough) (Con)]

The average weekly earnings for jobs in my constituency are £450—£23,400 per year less than the regional and national average. My area has therefore benefited disproportionately from the increases in personal tax allowances. Please may we have a debate on the work the Government are undertaking further to reconnect work and reward?

[Sir George Young]

My hon. Friend makes a good point. He will have an opportunity next Wednesday when we debate amendments to the Welfare Reform Bill to develop his arguments at greater length. The steps we are taking are designed precisely to do what my hon. Friend has suggested—to make work pay and remove some of the perverse disincentives from the system that we inherited.

[Barry Gardiner (Brent North) (Lab)]

May we have a debate in Government time on the sustainability of the London Olympic games following the resignation this morning of Ms Meredith Alexander as the sustainability commissioner? She said that she resigned in protest against the commission being used to justify the sponsorship deal between the London Organising Committee of the Olympic Games and Paralympic Games and Dow Chemical. She has made particular allegations about irregularities, saying that 12 out of 13 commissioners knew nothing about a report that was claimed to be produced by the commission.

[Sir George Young]

My right hon. Friend the Secretary of State for Culture, Olympics, Media and Sport was asked about this earlier by the Select Committee on Culture, Media and Sport, and gave the Government’s response. As the hon. Gentleman knows, Dow did not own Union Carbide at the time of the tragedy and I do not think there are good reasons, as my right hon. Friend the Secretary of State said, for taking the action that was taken.

[Mike Crockart (Edinburgh West) (LD)]

Would my right hon. Friend agree to a debate about the provision of Government services to the deaf and hard of hearing? On Monday I had the first surgery with a deaf British sign language user in my constituency using Deaf Action’s SignVideo system over the internet. We must be assured that all services, whether in education, health or justice, are equally accessible.

[Sir George Young]

I am sure that every Member of the House would agree with the proposition, which my hon. Friend has just put forward, that services should be more accessible to those who are deaf or hard of hearing. I will raise the issue with my hon. Friend the Under-Secretary of State for Work and Pensions, who has responsibility for disabilities, and then let my hon. Friend know what steps we have already taken in this area and what further steps are planned.

[Bill Esterson (Sefton Central) (Lab)]

The Leader of the House will be familiar with the saying “Where there’s a will, there’s a way”. The public want a Bill on daylight saving, as do Members across this House. Will he think again? Will he find the will and find a way?

[Sir George Young]

I understand the hon. Gentleman’s concern. Indeed, I myself sponsored such a private Member’s Bill with my hon. Friend the Member for South Suffolk (Mr Yeo)—I think it was in the Parliament before last—and I had exactly the same problem that the hon. Gentleman has just referred to: his party’s Government did nothing whatever. I have outlined a way forward. The Government have agreed a Bill in the terms produced by my hon. Friend the Member for Castle Point, and I think that is the best way forward.

[Robert Halfon (Harlow) (Con)]

May we have a debate on lower taxes for lower earners, given that poor motorists will be hit twice as hard as richer motorists if petrol and diesel duties rise? Can my right hon. Friend urge the Chancellor to cut petrol and diesel tax in the next Budget?

[Sir George Young]

I will relay to my right hon. Friend the Chancellor the bid that my hon. Friend has just made. I commend what he did with the e-petition on the issue last year, which resulted in the postponement of an increase that was due earlier this month.

[Jonathan Ashworth (Leicester South) (Lab)]

I thank the Leader of the House for scheduling a debate on the Somalia conference—a debate that I called for last week. May I ask him for an urgent statement on the businesses affected by the riots and disturbances last August? Leicester businesses have learnt that they are not eligible for any money from the policy authority, and we learnt from the Minister for Policing and Criminal Justice yesterday that they are not eligible for any of the other compensation schemes either. Leicester businesses are hugely disappointed about that, if not furious, as am I.

[Sir George Young]

I am grateful to the hon. Gentleman, not least for the plug for business questions on his blog earlier this week. I am also grateful for what he said about the Somalia conference. Compensation is available for those who suffered loss in the riots, either from the police authority or from local government. I will chase up the issues that he has referred to and see whether we can make progress to help his retailers.

[Philip Davies (Shipley) (Con)]

Can we have a debate on employment tribunals? A large number of businesses in my constituency are concerned about the number of vexatious complaints that are taken to employment tribunals, which they find very expensive to defend against, particularly in these times. I know that the Government want to help with this, and a debate in the House might help them in that regard.

[Sir George Young]

My hon. Friend will know that we have proposed some changes to the employment tribunal regime, one of which would oblige those who are taking cases to an employment tribunal to make a contribution towards the costs. I hope that those and other initiatives that we announced last year will go some way to meeting my hon. Friend’s aspirations.

[Mr Robin Walker (Worcester) (Con)]

Can the Leader of the House advise how the scores of hon. Members who spoke out in the Back-Bench debates on BBC local radio can put on record their support for the recommendations made by Lord Patten yesterday that many of the planned cuts be reversed and that afternoon programming be protected?

[Sir George Young]

I am grateful to my hon. Friend; that sounds an appropriate subject for a Backbench Business Committee debate. I welcome what Lord Patten said yesterday when he indicated that some of the proposed closures of local radio stations were being rethought. I am sure that we would all support that initiative and want to encourage whatever support is necessary to maintain local radio in our constituencies.

[Christopher Pincher (Tamworth) (Con)]

Can we have a debate on the right to buy, giving us an opportunity to discuss how we can help all those strivers out there and the Opposition the opportunity to turn up, which they did not do in the self-employment debate?

[Sir George Young]

I would welcome another debate on self-employment. We hope that the new enterprise allowance will help up to 40,000 unemployed people start up businesses by 2013. We all have a role to play in bringing home to our constituents the opportunities available for self-employment, which have been promoted by some of our initiatives.

[Priti Patel (Witham) (Con)]

My constituent Mr Philip Wright has been persecuted by HMRC for more than 12 years over a test case involving construction workers and their contracted terms of employment. In light of the huge cost of this case for the taxpayer, can we have a debate on HMRC, and in particular, when it will stop harassing my constituent and bring the case to an end?

[Sir George Young]

Sitting next to me on the Front Bench is the Financial Secretary to the Treasury, who has noted the protest that my hon. Friend has made and has now undertaken to raise it with his colleague—

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

The Exchequer Secretary.

[Sir George Young]

My hon. Friend has undertaken to raise the matter with the Exchequer Secretary, who has responsibility for taxation.

[Graham Evans (Weaver Vale) (Con)]

Given the recent unemployment figures, can we have a further debate on High Speed 2 and how it will directly create tens of thousands of jobs in the midlands and the north, solve the capacity challenge of the west coast main line and help equip our economy to compete in the 21st century?

[Sir George Young]

I am grateful to my hon. Friend for his support for HS2. I think I am right in saying that we have recently had at least one debate on HS2. Whether there is appetite for another one in the immediate future I am not sure, but I am grateful to him for his support for the project.

[Tessa Munt (Wells) (LD)]

The main difference between the rich and the poor is, of course, that the rich have money to save and the poor have to spend nearly every penny they have. Will the Leader of the House please give time for a debate in the run-up to the next Budget on the obvious merits of raising the income tax threshold to £10,000 before 2015, lifting more people out of income tax altogether?

[Sir George Young]

My hon. Friend will know that section 29 of the coalition agreement sets out a commitment to raise the threshold to £10,000 during this Parliament, and the Deputy Prime Minister is making a statement today. This will be taken on board by the Chancellor as he prepares his Budget statement.

[Mr Speaker]

I am extremely grateful to the Leader of the House and to colleagues for their brevity, which meant that 44 Back Benchers were able to take part in 35 minutes of exclusively Back-Bench time. That shows what we can do when we try.

Point of Order

Thursday 26th January 2012 Commons Chamber

12:16

[Barry Gardiner (Brent North) (Lab)]

On a point of order, Mr Speaker. Have you received a request from the Secretary of State for Culture, Olympics, Media and Sport to come to the House to clarify previous statements made to this House? Those statements made reference to the supposed report for the London Olympics by the Commission for a Sustainable London as the justification for the appointment of Dow Chemical as a sponsor, when the resignation of Ms Meredith Alexander this morning has in fact proved that no such report was prepared by the commission at all. Indeed, 12 out of the 13 members of the commission knew nothing about it until the letter from Shaun McCarthy to my right hon. Friend the Member for Dulwich and West Norwood (Tessa Jowell).

[Mr Speaker]

I am sorry to disappoint the hon. Gentleman, but the short answer to his question is no. I have received no such communication, but the concern that he has registered will have been heard by the Leader of the House and others on the Treasury Bench.

BILL PRESENTED

Financial Services

Presentation and First Reading (Standing Order No. 57)

Mr Chancellor of the Exchequer, supported by the Prime Minister, the Deputy Prime Minister, Secretary Vince Cable, Danny Alexander, Mr Mark Hoban, Mr David Gauke, Miss Chloe Smith and Mr Edward Davey, presented a Bill to amend the Bank of England Act 1998, the Financial Services and Markets Act 2000 and the Banking Act 2009; to make other provision about financial services and markets; to make provision about the exercise of certain statutory functions relating to building societies, friendly societies and other mutual societies; to amend section 785 of the Companies Act 2006; to make provision enabling the Director of Savings to provide services to other public bodies; and for connected purposes.

Bill read the First time; to be read a Second time on Monday 30 January, and to be printed (Bill 278) with explanatory notes (Bill 278-EN).

Backbench Business

Thursday 26th January 2012 Commons Chamber

[Un-allotted Day]

European Council

Thursday 26th January 2012 Commons Chamber

Topical debate

[Mr Speaker]

I remind the House that there is a time limit on Back-Bench speeches, which is subject to review.

12:18

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

I beg to move,

That this House has considered the matter of the European Council.

I would like to take this opportunity briefly to mention to this self-selecting group of Members in the Chamber who are taking an interest in EU Council debates that the Backbench Business Committee now has such debates within its remit. In future, therefore, when Members want to have such a debate before the EU Council meets, they should come to the Backbench Business Committee. I will leave it at that.

[Mr Speaker]

I apologise: I ought to have explained that the time limit on Back-Bench speeches is eight minutes.

12:18

[Mr William Cash (Stone) (Con)]

I am grateful to the Backbench Business Committee and its Chairman for arranging this debate. I am sorry that the Government did not take note of the unanimous view of the European Scrutiny Committee that such a debate should be held in Government time. However, we now have this opportunity to air our views before the Prime Minister goes to the summit. He is to be congratulated on his use of the veto, which I am bound to say I was glad about because I had suggested its use in my pamphlet “It’s the EU, Stupid”, and in other discussions.

The proposal for fiscal union vitally affects our national interests and our democracy; it is not just about the single market and the City, essential though those matters are. As I said to the Foreign Secretary the other day, once we have crossed the Rubicon we cannot cross it again, and it is imperative that there should be no backsliding at the summit on 30 January. I totally repudiate the attitude of the Deputy Prime Minister that the non-EU treaty of the 26 should eventually be folded into the EU treaties. The Liberal Democrats are an obstruction to our vital national interests. A house divided against itself will fall, and the situation will be worse still if it is built on sand. There are now two Europes, both built on sand, and the situation is not only precarious but dangerous.

What is the root cause of the European crisis? It is not merely a eurozone crisis; it is a crisis of the European Union as a whole. Europe is being destroyed on the altar of ideology. The existing treaties, which cover 70% of our legislation here in the UK, have failed and are the root cause of the crisis in Europe.

[Martin Horwood (Cheltenham) (LD)]

In the light of the hon. Gentleman’s attack on the role of the Liberal Democrats in all this, would he accept that the Deputy Prime Minister’s hosting of the recent summit of European Liberal leaders—including two Prime Ministers, six Deputy Prime Ministers and five European Commissioners —to try to bring together a bilateral plan to support jobs, growth and prosperity across Europe was a positive step?

[Mr Cash]

We are all in favour of growth, but unfortunately the European treaties themselves work against that aim because of the degree of overregulation, and many other matters that I shall come to in a moment.

The lack of growth is contaminating the UK economy. Elsewhere in Europe it is creating civil disorder, with youth unemployment of up to 45% in Greece and Spain, and 30% in Italy. The present European Union is completely undemocratic, and the existing treaties should be sent to a convention so that all the member states could have the opportunity to face one another and decide what kind of Europe they want. In the past, when referendums have been held in France, Holland, Ireland and Denmark, the no vote has been overturned by bribing and threatening the electorate. That kind of behaviour, combined with economic and political crisis, creates a fertile breeding ground for the far right, as I predicted as far back as 1990.

There is no growth in Europe, except in Germany. We cannot grow from a stagnant Europe, and the coalition cannot achieve its main objective of reducing the deficit and achieving growth so long as this paralysis continues. The remedy of the Eurocrats—and, indeed, the leaders of European Government and the Liberal Democrat leadership in this country—is a fatal obstruction to our present and future economic success.

The approach adopted by the Prime Minister today at Davos reflects the view that I expressed in my pamphlet “It’s the EU, Stupid” and the growth paper that has been circulated to all Members of Parliament and the Lords and others, as well as in my remarks to the Minister of State, Cabinet Office, which is that we need to refocus our trade towards the rest of the world and not rely on the fact that we have 40% to 50% of our trade with the EU to provide the mainspring of our economic future.

[Kelvin Hopkins (Luton North) (Lab)]

Emphasis is constantly placed on our trade with the European Union, but it is not always pointed out that we have a massive trade deficit with the EU. Given the austerity measures here and over there—but particularly over there—that is only going to get worse.

[Mr Cash]

Indeed. In 2009 there was a trade deficit of £14 billion in goods and services, but since then it has risen to £51 million. Those figures speak for themselves.

Cuts in public expenditure cannot solve the problem on their own. We need enterprise for small and medium-sized businesses and drastic cuts in overregulation. We need enterprise, not strangulation. Indeed, we must insist on our ability to enter into trade relationships on our own terms, in our own national interests, and not be confined to a single trade policy dictated by the European Commission.

I was deeply alarmed to read in today’s City A.M. that Angela Merkel at Davos is encouraging more integration. She is quoted as saying:

“We have to become used to the European Commission becoming more and more like a government.”

She urges more and more Europe, but that Europe would be both undemocratic and increasingly dominated by Germany itself, as I have repeatedly stated for 20 years, and as The Economist concedes in this week’s edition. It states, following France’s downgrading, that

“the balance of power has long been shifting from the French President to the German Chancellor”,

and a former French economic Minister has said that

“Berlin is alone in the cockpit”.

That is not healthy for Germany or the UK, and certainly not for Europe. It now seems certain that President Sarkozy is on the way out, and Italy and Greece have technocratic Prime Ministers. Democracy is dwindling and diminishing. The Franco-German partnership is now a hollow reminder of German strength and French weakness. This is all the more reason why the UK must insist on leading Europe out of this crisis with Euro-realist policies and an insistence on government by consent. Sadly, Germany believes in government by rule, and is now even proposing the European Commission as the anchor of European government.

There has been much agitated activity in seeking to resolve the Greek bankruptcy, but there has been no result. A few days ago I came across a five-page article written in 1998 setting out exactly why Greece should not be allowed into the European Union, which was of course ignored. Every member state is responsible for this failure of judgment and must bear the consequences. It is a pity that those such as George Soros who are now wringing their hands in Davos did not listen to the Euro-realist arguments instead of condemning and mocking them.

On the draft agreement, we must bear in mind that the issues now being presented to the British electorate and the European Union are more political than legal. There are still fundamental legal problems in the latest draft of the agreement between the 26. There must be no misunderstanding: this deal is flawed in seeking to incorporate the European Commission and the European Court of Justice, which are institutions of the EU, into a non-EU treaty.

Furthermore, what is the basis in the treaty on the functioning of the European Union for the proposed powers, including infringement powers, to be conferred on the European Commission under article 8 of the agreement? Prima facie, that is unlawful, given the prohibition on infringement proceedings under article 126(10) of the treaty. There are serious doubts about the use of article 273 in relation to issues of jurisdiction. There is also the issue of enhanced co-operation under article 10, which bypasses the treaty requirement that enhanced co-operation should be used only as a last resort; the agreement proposes its use “whenever appropriate and necessary”. This could cause serious damage to British national interests in relation to the internal market.

My Committee, the European Scrutiny Committee, will be investigating all these matters with the assistance of evidence from witnesses from all sides of the equation. There is a further problem of whether the treaty to establish the European stability mechanism can come into force before the amendment to the Lisbon treaty, so that member states could allow such a treaty, given that the United Kingdom has not yet ratified it. I would be grateful if the Minister would answer these questions when he responds to the debate; I hope that he is listening to what I am saying. We urgently need to know whether the Government have received the fifth, and presumably final, draft. If not, will he tell us when they will, and when it will be sent to the European Scrutiny Committee?

With regard to article 13, will the UK Parliament be involved in the proposed inter-parliamentary conference? If so, will the European Scrutiny Committee be invited to attend? At present no one knows how that arrangement will work in practice—there are serious question marks over the agreement—but we know that it will be determined by German demands and conditions. I do not blame Germany for its pride and defence of its own national interests, but I do not believe that we the UK should pay one penny to provide funds for an EU bail-out which, if it were done within the European Union itself, would be blatantly unlawful.

Mme Lagarde, who is now head of the International Monetary Fund, openly admitted in September 2010 that to save the euro,

“we violated all the rules”.

It is ironic that she should now be in charge of a further attempt to bypass the rules. That is outrageous, and I am glad that America has quite rightly said that it believes that Europe should sort out its own mess. However, that will be achieved through policies for genuine growth, and not through bail-outs with fictitious money and a refusal to face up to Euro-reality.

We now live in peaceful democratic times, and we must therefore insist on our Westminster democracy as the basis for protecting our national interest. Let us therefore get down to the business of letting the British people have their say, and of saving the United Kingdom from impending disaster and the European Union from itself. We must turn our eyes to the sunlit uplands of enterprise and international trade, earn our way in the world by our own efforts and re-create the foundations of true independence of action and prosperity for our own country.

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

On a point of order, Mr Speaker. I apologise for interrupting the debate, but my attention has been drawn to media reports about the future of RAF Northolt, which is next to my constituency. Apparently, there might be Government plans to develop RAF Northolt as an alternative to the Boris island airport, or as a satellite terminal for Heathrow. That is potentially of huge concern to my constituents, and I wonder whether you have received a statement from the Government setting out their real thinking.

[Mr Speaker]

I have received no indication from the Government of their intentions on this matter, but I have a hunch that the hon. Gentleman will pursue the issue doggedly and tenaciously.

12:30

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

The decision by the Prime Minister to walk away from potential agreement at the European Council in December is a disaster for our country and for its long-term influence in the European Union. No previous Conservative Prime Minister, whether John Major or Baroness Thatcher, had taken such an approach, and we are about to see the consequences of the current Prime Minister’s decision in the developments going on in the European Union this week. ECOFIN met this week to consider the fourth draft of the agreement—on which the House of Commons Library has produced a helpful note—for the proposed inter-governmental arrangement on the future of the eurozone. That fourth draft agreement made some progress at this week’s meeting, but two issues were left for the bigger meeting that will take place in the next few days: further discussion about qualified majority voting and debt and deficit criteria; and the attendance of non-eurozone member states at the summit.

[Kelvin Hopkins]

I must say that I find my hon. Friend’s speech somewhat astonishing in blaming Britain for the problems in the eurozone. The problem, as the Father of the House said at Prime Minister’s questions yesterday, is that the Germans are refusing to bail out the weaker members.

[Mike Gapes]

If my hon. Friend looks at Hansard, he will see that I was not blaming Britain for the problems in the eurozone, but saying correctly that our influence in the European Union will be reduced because of the misguided tactics adopted by the Prime Minister.

[Mr John Redwood (Wokingham) (Con)]

Will the hon. Gentleman give way?

[Mike Gapes]

I will make some progress first.

As a result of the European Union Act 2011, the Prime Minister has boxed himself into a position in which there must be no potential for a referendum in this country. As he was trying to assuage his 81 Europhobic Back Benchers, he took the easy option of making a political decision rather than one in the national interest, which would have been to remain in the negotiations and to carry on trying to influence the outcome. As a result, when discussions conclude on the arrangements, if they are based on the fourth draft agreement—I quote the House of Commons Library Paper—

“the Heads of State or Government of contracting parties whose currency is not the euro who have ratified this Treaty and have declared their intention to be bound by some of its provisions”

would be invited

“to a meeting of the Euro Summit”.

However, those who did not agree to the intention to be bound by the provisions and were not participating would have no automatic right to attend. The Library paper states:

“This would appear to exclude the UK as a non-Euro, but crucially also a non-contracting State.”

There is a potential, therefore, for us no longer to be in the room, even as an observer, because of our misguided decision in December to walk away from the process.

[Mr Edward Leigh (Gainsborough) (Con)]

Is the hon. Gentleman seriously suggesting that it is wrong not to be in a room that is about as robust as a sinking Italian cruise liner?

[Mike Gapes]

I suspect that when the eurozone finally resolves the crisis, whether this week, which is doubtful, or on 1 and 2 March, which might be more likely, and when the 20 or so countries—perhaps 25 or 26, depending on how many of the existing 17 euro countries and the others eventually sign up to the package—agree to abide by the provisions, our influence will cease to be as strong as it has been. As a result, one other thing will develop: the pre-meeting discussions that take place within the European People’s party network, the conservative group that dominates the politics of the European Union—the right of centre, not the left of centre, are in control in the EU—the Sarkozy-Merkel meetings, or meetings involving Poland and the new right-wing Government in Spain, will not include the UK. When the bigger countries pre-cook the agendas, we will not be there and we will not be heard. That is potentially very dangerous.

[Mr Redwood]

Does the hon. Gentleman not understand that one has to pay to play? If we were in the room, the other countries would expect us to divvy up, as they are short of money.

[Mike Gapes]

More than half our trade is with the European Union. Our companies, and the future of the City of London and its relationship with the eurozone economy, are greatly affected by what happens in Europe. Those who want to move out to the middle of the Atlantic or who believe that somehow we can reinvigorate the Commonwealth and go back to imperial preference, are not living in the real world for the British economy. Our national interest is to have prosperity and success. As the Chancellor of the Exchequer has made clear, it is in Britain’s national interest for the eurozone to succeed and for the current crisis to be resolved. Clearly, Conservative Members do not agree with the Chancellor’s words. They wish to see the eurozone fail—[Hon. Members: “Rubbish!”] Well, the hon. Member for Gainsborough (Mr Leigh) seemed to say that. If he disagrees, he can intervene again. They want to see the eurozone fail because they believe that somehow that will be in the national interest of this country. It will not.

[Several hon. Members]

rose—

[Mike Gapes]

I have no time left.

It is time that the country looked to its long-term national interests, as opposed to the short-term party interests of this dysfunctional coalition. Those long-term national interests are in working consistently and positively in Europe, and recognising that we have potential allies in Europe. However, our misguided negotiating tactics have forced those potential allies away from us. This is the most self-defeating, insane strategy. It is not in our long-term national interests, and it is a shame for our country.

12:38

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

Following the remarks of the hon. Member for Ilford South (Mike Gapes), it should be stated clearly that we can never have a negotiating position, in any area of life, let alone in a European Council meeting, if we are never prepared to say no and walk away from the table. Otherwise, people will believe that we will always capitulate, and that nothing we say is worth listening to. That must be one lesson that we take from the European Council in December.

Whatever view hon. Members hold about that Council and the decisions that were taken, we cannot doubt that the European Union is at a fundamental crossroads at which it must confront a number of serious issues that affect all European Union citizens. As the financial crisis has made plain, the European Union—its treaties and economic and monetary union—has not made Europe stronger; indeed, its weaknesses have been made all the more clear. Currency union has not made countries such as Greece, Portugal and Spain competitive with countries such as Germany. In some ways, it has exacerbated their weaknesses. Currency union has made it easier for countries such as Germany to export at low cost across the countries of Europe and has held back the march of competitiveness that should have come in some of the weaker countries.

The mechanisms of stability and convergence created at Maastricht to try to bring economies closer together have, over the years, been undermined by member states and have not been followed. If they had, perhaps the crisis would not have been as great as it is. We are where we are, however, and the challenge for Europe is now a test of nerve— whether it will plough on in the same old way or whether it is serious about embracing change and leading in a fundamentally new direction towards a Europe that is more competitive and open, which embraces the world rather than seeking to pull in on itself.

[Kelvin Hopkins]

Does the hon. Gentleman agree that if European Union member states had their own currencies and could adjust them to the appropriate parities for their economies, they would all be more able to reflate and we could have better growth and prosperity for everyone?

[Damian Collins]

The hon. Gentleman makes a good point and I am sure that citizens in Greece, Portugal, Italy and Spain will be asking in whose interest is the survival of the euro as it stands. They will be able to see that it is in the interests of the Germans and some of the stronger economies, as they have an artificially low currency that makes it easier for them to export across Europe. I am sure that is one reason that the German economy has continued to do well. Those citizens will also ask, however, what is in it for them and whether they—and Europe—would be better off in the long run if countries with weaker economies and bigger problems with debt were able to reach a much more sustainable level for their currency.

[Chris Bryant (Rhondda) (Lab)]

In actual fact, in countries such as Spain and Greece there is no such campaign to leave the euro—any campaign, such as it is, is very minor. The vast majority of people accept that the euro is there to stay and they want to make it work.

To return to the hon. Gentleman’s earlier point about the stability and growth pact, the only way that it could have worked would have been if the European Union had had power to enforce audit on countries and to enforce the rules. That is an argument for more Europe, not for less.

[Damian Collins]

The problem with the stability rules has been that when there should have been interventions or challenges the opportunity has been ducked. That has allowed countries to fudge the rules, has made a shambles of the stability pact and has undoubtedly led to the crisis we face now. It demonstrates something that many hon. Members have known for a very long time: this was primarily a political project and the objective was to get as many countries in as possible and to keep them in whatever the cost, even if the cost was to the member states.

The other point made by the hon. Member for Rhondda (Chris Bryant) was about the concern in member states about whether staying in the euro is good for them or not. Since the December Council we have seen a greater understanding of what staying in the euro will mean. In effect, as my hon. Friend the Member for Stone (Mr Cash) said in his speech, it will mean that the European Commission will decide on budgets for member states, on debt levels and on spending and will enforce measures through the European Court to correct those states if they do not comply. The price of continued membership of the eurozone will then look increasingly high. I believe that might lead some countries to question whether to stay in—or, perhaps, the markets will make that decision for them. No doubt the events of the next few months will give us a good idea of how that will play out.

The challenge is for Europe not to continue as a fortress Europe, but, instead, to be a market Europe that looks to open itself up to the world. That is the best thing for its competitiveness and prosperity and for the future of all its citizens.

This month, the European Council published “The European Council in 2011” , which looks back at the previous year. The President of the Council, Mr Van Rompuy, said that

“we can draw confidence from the political will we mustered in the past year”.

I am glad that one person in Europe draws confidence from the political will mustered by the European Council, because I think most people see a failure of leadership and a great deal of concern about the effectiveness of that body to lead in the future.

In the same chapter of the book, which is entitled “The road ahead”, Mr Van Rompuy goes on to say:

“The key for the future is to harness the forces of change.”

I believe that is right: Europe needs to harness the forces of change. That requires a change of direction, however, rather than acceleration down the old worn path, which is where it is heading.

The document also states that the level of economic integration—in effect, the creation of a common economic policy—will remain high on the agenda for the European Council this year. It states:

“‘Member States shall regard their economic policies as a matter of common concern’. In 2012, we will further examine a deepening of our economic union, a subject on which I will report to the March European Council.”

It goes on to say:

“We must demonstrate that the euro is more than a currency: an irreversible project, a common destiny.”

That underlines the concerns that many of us have had for some time that the leaders of the European Council and leaders in Europe have been blinded by the political objectives behind the euro to whether it is truly sustainable for those countries.

Hon. Members have already remarked that trade is an important part of our membership of the European Union and that half of our trade is with the EU. That is true, but UK trade figures for the past 10 years show that the growth comes from trade not with the member states of the European Union but with the emerging consumer markets around the world, in Brazil, Russia, China and India. That is common in countries such as Germany, too, because as the world economy grows and there are more consumers, we need to be in the market competing for their goods and services.

[Mr Redwood]

Does my hon. Friend recognise that because of the Rotterdam entrepot effect of goods going through that port to other parts of the world and because of large service exports to non-EU countries, the true figure is under a third? It is nowhere near half.

[Damian Collins]

I thank my right hon. Friend for that important contribution. It follows my point that the future of our trade and growth will increasingly lie beyond the borders of the EU and not solely within it. That should not make us any less European; we must simply recognise that the world economy is growing, that it is growing outside the EU and that those economies are increasingly competitive. They have more consumers with more money in their pockets and more demand for the products we can sell. Our challenge, and that for Europe, is to make ourselves open to those markets. Rather than having European rules and regulations, particularly on social and environmental law, that seek to add costs and make us less competitive, we should review them and consider whether they are truly fit for the modern world in which we live. That would give us the chance to compete in this more competitive and growing global economy.

That is the crisis that Europe faces as it reaches its crossroads. Its rules and regulations have created a union that is less competitive than it should be and more weighed down with debt. Currency union has not supported the weaker countries but has emboldened and added weight to the strength of those already strong economies, such as Germany. Those fundamental issues must be addressed as Europe faces its crisis. I believe that they are the issues that the Council must tackle. It will require a more flexible and open Europe in which, I believe, the UK can act as a fellow traveller, setting the course of direction. We must be very clear that if Europe will not move and will not change, we cannot afford to be held back by it.

12:47

[Mr Denis MacShane (Rotherham) (Lab)]

It is a pleasure to follow the speech of the hon. Member for Folkestone and Hythe (Damian Collins), which was measured and considered. He will forgive me if I do not embrace his term “fellow traveller” as Britain’s destiny in the coming years, as those of us who know our history do not really like that language.

I was rather worried when the hon. Gentleman said that “the markets will make that decision for them”, “them” being the people. I rather hope that at some stage we might have some recognition from the Conservative party that markets should be the servants of the people, not their masters.

[Damian Collins]

The point I was making was that the markets will make the decision for the European Council members and for the Governments and that if they do not act, they will be forced out.

[Mr MacShane]

I am very happy to hear the hon. Gentleman gloss over his speech, but that is the point I was making.

I am all for exporting to the BRICs, but their growth rates are slowing. India is talking about a return to “Hindu economic growth” and China might go as low as 8% or 7%, which is a real worry for the Chinese authorities. The same is the case in Brazil—[Interruption.] Hon. Members say that that is not bad and, of course, I would love a 7% growth rate for my own country, and I shall come to that. However, rapidly developing countries throughout history have had very high growth rates when peasants and others move from the fields and core industries are developed, but the plain fact is that we export more to Ireland than to all the BRICs combined. Belgium exports more to India than we do. The absurd notion that Brazil, India or Russia, run by kleptocrats, are an alternative to the mature, balanced, middle-class consumer economies of the European Union is not right.

[Mr Redwood]

Does not the hon. Gentleman understand that the markets that feed and clothe him are the people? The markets we are talking about today are his pension savings, his other savings and those of millions of other people who are trying to protect themselves from the euro disaster.

[Mr MacShane]

I do not really want to get into a debate about the markets as I am also pro-market, but the markets are also Mr Hester, the hedge fund billionaires and the donors to the Conservative party who make a fortune out of speculation and who have so increased inequalities in the past 30 years that we now have a generalised social crisis that might cause severe dislocation.

I do not share the cataclysmic views that some have about what the Prime Minister did on 9 December. I think he was ill-advised, that he allowed the Treasury to run the negotiations and that the key decision was taken at a time—2.30 am—when no sane person should take a decision. None the less, the plain fact is that across the rest of the European Union there is a sense that Britain does not want to engage or be fully part of the EU. Last week, at a conference with the former French Defence Minister who negotiated the French side of the French-British defence treaty of 2010, I was surprised to hear his extraordinary, virulent attack on what one could call “Albion perfide” and how Britain was no longer a defence player with France, was not prepared to co-operate and was doing all it could, he said, to sabotage the good effects that the treaty would have. That is the reputation we have and that worries me.

It also worries me to hear reports that one of the new intake on the Government Benches, whom I shall not name, said in a conference over the weekend that it would have been impossible to have been selected as a Conservative candidate in recent years—or, indeed, to be a Conservative MP—without showing the most strident Euroscepticism. [Interruption.] Well, if there is an exception that proves the rule and if the hon. Member for South Swindon (Mr Buckland) is about to make a pro-European speech I shall welcome that. None the less, that is the impression in this country.

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

Will the right hon. Gentleman give way?

[Mr MacShane]

I have given way to two Europhobes, and I think three would be too many. It is a real worry when one party, the governing party of our country, is so monolithic—without internal debate, internal division or much internal discussion. [Interruption.] I look forward to hearing the speech of the hon. Member for North Wiltshire (Mr Gray) when he makes it.

Then we have the fundamental problem that this Government and the ruling elites of the European Union are at one. Mr Sarkozy, Mrs Merkel, Mr Van Rompuy, Mr Barroso, Mr Rajoy, Mr Berlusconi and Mr Monti are all applying the 1930s austerity recession approach of making the poor pay and protecting the rich, which is the official policy of Her Majesty’s Government. I do not understand why there is any debate or division at all because for the first time those the other major European Union capitals and the Brussels institutions are on the same wavelength as Her Majesty’s Government. That is why there has to be some policy for growth, as people are pointing out again and again. Mrs Lagarde and Mr Soros have pointed that out and Mr Obama is seeking to achieve it.

Government Members are correct to suggest that not only the European project but the entire western, democratic, liberal, rule-of-law, market economy project is under threat because of a generalised crisis based on inequality and the giving of too much power to money and too little power to people. The answer to that must be forms of solidarity. In 1942, at the height of the war, before we had won El Alamein or turned any corner, Winston Churchill sent a Cabinet memorandum to his colleagues saying, “Hard as it may be to say at this time, I think we should start considering the possibility of a council of Europe for after the war. We need to move towards a united states of Europe where all may travel and trade freely. I think we should conduct studies about how to have economic unity.” How extraordinary that at the height of the war—that was not the Zurich speech—Winston Churchill had that vision for what we have half-achieved, perhaps, in my lifetime and certainly in recent years.

That is also why Mrs Thatcher, our then Prime Minister, after pushing through the Single European Act—the biggest transfer of sovereignty ever in British history—supported the arrival of Jacques Delors as President of the Commission. In 1984, our contribution to the EC budget was £656 million, but by 1990 she had increased it to £2.54 billion, quadrupling Britain’s solidarity budget to the then European Community. When asked about that in the House of Commons, she said that of course we should help our poor friends in Portugal and Greece and also implicitly in Ireland and Spain. She was absolutely right. That is why we set up the International Monetary Fund after the war—precisely to deal with imbalances, crises, sudden recessions and, yes, Government incompetences that produce the kind of problems that Greece and some other countries are facing. It is quite preposterous to say that Britain will renege on its obligations to the IMF. I was happy to vote with the Government on this in the last Division and I certainly hope that Opposition Front Benchers are not going to play the Eurosceptic card on the IMF question if the matter comes back to the House.

Finally, what do we have today? We have the surreal sight of a British Prime Minister in Davos not enjoying himself on the slopes but lecturing other European leaders on what they should do. What example is he citing—£1 trillion-worth of debt, recession economics, mounting unemployment or mounting poverty? There are mounting concerns all over the world, as the Chinese told the Chancellor of the Exchequer when he was in Beijing recently, about whether Britain is serious about marginalising itself in Europe and not helping to support Europeans with problems through the IMF. If it is, China cannot be interested in Britain because it is not interested in an isolated, protectionist Britain.

We are taking huge risks with our economy and our nation by promoting these new, protectionist, isolationist politics. It is bad enough that we have to live with 1930s, Treasury-driven economics, but it will be a disaster if Britain continues to have the reputation it has sadly earned internationally as a country that wants to turn its back on Europe and that seriously believes its future could lie only in competing with Belgium for exports to India. This is a turning point for our nation. We either break out of this isolationist, protectionist logjam and work in solidarity with the countries of Europe that are growing and creating jobs and that have much better public finances than we have, or we pretend, in our own little sinking ship, that everything is for the best and this is the best of all possible worlds.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. We are in a very serious position with a lot of Members wishing to speak. I am going to have reduce the time limit to five minutes, and even with that limit not all Members will get in if people intervene.

12:49

[Martin Horwood (Cheltenham) (LD)]

First, I congratulate the Backbench Business Committee on selecting this topic for debate, although on this occasion I agree with the hon. Member for Stone (Mr Cash) that it might have been better to debate this issue in Government time as it is critical for this country.

While I am on the theme of congratulations, let me congratulate Sharon Bowles, MEP, on her recent re-election as chair of the economic and monetary affairs committee of the European Parliament. She was once voted one of the top 10 economic regulators in the world and she has presided over innovations such as the attempt to introduce regulation on bankers’ bonuses that would prevent someone like Fred the Shred from ever again walking away with a huge bonus from a failing bank. For that alone she deserves congratulation and I am pleased to see her retaining her place as one of the most influential Liberal Democrats in Europe.

I repeat my earlier congratulations to the Deputy Prime Minister on convening the European Liberal leaders forum on issues relating specifically to this debate in London on 9 January. The forum agreed a programme of reform and competitiveness for Europe that would probably unite Conservative and Liberal Democrat Members of this House at least. That is a good example of how to build alliances across Europe and engage with Europe in a proactive way.

It is good to see Britain at the table for the summit. Clearly, there is the main summit, which is supposed to be focusing on prosperity and growth, but there is also the rather important sideshow of the 26 making further progress towards the fiscal compact, which is critical for Britain, and I am very pleased that the Government have made sure that Britain is an active participant in the process, albeit with observer status. I know that Ministers have been active behind the scenes getting Britain involved in the process and making sure, for instance, that the fiscal compact treaty does not spill over into areas outside its proper remit, such as the construction of the single market. As Liberal Democrats have pointed out, that is one of the risks of our relatively isolated situation in Europe.

[Mr Redwood]

Does the hon. Gentleman think that at this point the power to fine Greece and then fining her would cut the Greek deficit?

[Martin Horwood]

I shall not be drawn into that. Critically, it is for the eurozone countries to address the crisis in the eurozone. The right hon. Gentleman highlights the important point that just by drawing up a treaty the eurozone countries do not solve some of the rather fundamental problems in the eurozone. In fact, the situation in Greece is becoming increasingly serious and it needs to be urgently addressed—that is even more the case now than in recent months.

The importance of the main business of the summit must not be neglected. Britain’s re-engagement in European affairs is critical and it must be pushed forward. There have already been some successes. My right hon. Friend the Secretary of State for Business, Innovation and Skills helped to create the like-minded growth group, which has pushed forward ideas such as lifting onerous accounting rules from the smallest businesses in this country. I think the group has helped to create a shift in Commission attitudes on the smallest businesses to the point where it has committed to review all existing EU legislation to look for other opportunities to lift onerous regulation from such businesses and to screen new legislation to see whether, wherever possible, the smallest businesses can be excluded. That is exactly the kind of agenda we should be pushing in Europe.

[Mr Leigh]

I want to make an intervention that the hon. Gentleman and I can both agree with. Does he agree with the point I have been making consistently at business questions that this debate is so important that in future we should have it in Government time, for a whole afternoon, with the Foreign Secretary or the Prime Minister here so that we can ask them detailed questions?

[Martin Horwood]

I think that is right, although the point I am making is that the jobs and prosperity agenda should be the focus of such debates. If possible, we should get away from the obsession with structures and treaties. The British Government should be pushing the jobs and prosperity agenda at the summit. I have suggested some areas for deregulation and the European Liberal leaders forum drew up a long list of legislation that should be reviewed for possible reform. It included the working time regulations, the temporary agency workers directive, the control of vibration at work regulations, fixed-term employees regulations, part-time workers regulations, control of noise at work regulations, road transport working time regulations and the transnational information and consultation of employees regulations.

[Bob Stewart (Beckenham) (Con)]

Scrap them.

[Martin Horwood]

I am not at all in favour of scrapping health and safety regulations or those designed to protect workers. They are extremely important. The point is not even necessarily to weaken health and safety and workers regulations in Europe, but to see whether they can be made more flexible and be applied more flexibly domestically. That is another area where the British agenda should be pushed.

There are signs that European Governments are increasingly seeing things our way; it is not just the 15 members of the like-minded growth group. Italy has traditionally been more renowned for a protectionist stance in Europe and has at times had a less than impressive record on implementing single market legislation, but it is now actively implementing measures to liberalise great swathes of its economy and is actively pushing a single market agenda in Brussels that is directly comparable to ours. Spain, under the new Government led by Señor Rajoy, is also moving to undertake major structural reforms domestically and is shifting its position in Europe accordingly. Ministers must build on such possible alliances, which seem to be growing stronger all the time.

There are other things that I probably do not have time to cover in great detail. In terms of promoting jobs and prosperity, it is important to push for the completion of the single market, particularly in the digital and services sectors. External trade is equally important. This morning, I was in a Committee that voted on a new framework agreement that included free trade with South Korea. It could soon be extended to Ukraine and possibly a range of other countries. That is the kind of thing that will drive jobs and prosperity in Europe, not an overly obsessive attitude to EU treaties and institutions.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

I call Chris Bryant.

13:04

[Chris Bryant (Rhondda) (Lab)]

Thank you very much, Mr Deputy Speaker. I thought you were about to call somebody more senior.

I agree with the hon. Members who said it is a shame that the debate has had to rely on the kindness of the Backbench Business Committee. When I was Minister for Europe it was an important part of our mandate that before we went to a European Council we had to turn up in the House, in Government time, to answer a debate, even if it meant inconvenience for Ministers. It is a terrible shame that the Foreign Secretary is not here. I respect enormously the Under-Secretary of State for Foreign and Commonwealth Affairs, the hon. Member for North East Bedfordshire (Alistair Burt), and I saw him assert that he is pro-European, which is great, but it is wrong that the Foreign Secretary is not with us.

I want to raise two issues that are not on the Council agenda but should be. The first is Cyprus. For far too long, the European Union has had within it a divided country, with a divided capital city. It affects many people in the UK; there are strong Cypriot communities in Cardiff and elsewhere in the country. The real problems faced by the Cypriot economy could be resolved easily if one were to overcome the political problems, because Turkey is the fastest growing economy on the borders of Europe. I hope that the Foreign Secretary and the Prime Minister will make it clear that we want progress in Cyprus, and this is no bad time for it, when Greece is trying to resolve some of its own economic problems.

The other foreign policy issue that should be on the agenda is Russia. The elections just before Christmas were a complete and utter farce. In a vast majority of areas, they were corrupt, as every organisation sent to monitor the elections made clear. Absolutely nothing has been done. There have been many warm words from Mr Putin and Mr Medvedev, yet there has been no action. We still have no resolution of the cases of Mr Khodorkovsky and Mr Platon Lebedev, both of whom are purely prisoners of conscience, and not tax evaders. There is also the case of Sergei Magnitsky who worked for a British company.

The British Government should make it absolutely clear that Europe will manage to improve its business with Russia only when corruption is rooted out in Russia. That will not happen if country after country tries to make its own sordid little deals; it will only happen if the whole of the European Union acts in concert and in union to make it clear that Russia has to clean up its act.

I believe in more Europe rather than less Europe. I say that unambiguously. I said to the hon. Member for Folkestone and Hythe (Damian Collins) that enforced audit would have meant that we did not get into the hole we are in, and there are other areas. The United Kingdom was wrong when we decided to go our own way, with Ireland, saying that there were to be no transitional arrangements with regard to people from the new member states working in the UK. One of the reasons why so many people came here was that every other country in the EU was going down a different route. It would have made far more sense if there had been a single European decision on that policy area.

[Mr MacShane]

At a conference last week, the German film-maker, Volker Schlöndorff said how much he wished that 1 million-plus Poles had gone to Germany and learned German and then gone home imbued with German ideas, language and contacts to build a closer relationship between Poland and Germany. We have made 1 million-plus Polish friends because of our policy; it has been good for Poland and good for us.

[Chris Bryant]

I hope we have made a lot of Polish friends. When I was a curate in High Wycombe, we had a long-standing Polish community there, many of whom fled German ideas about Polish people from the 1930s and 1940s. But I still think it would have been better for us if there had been a whole-European decision. We underestimated the number of Polish people who would come to the United Kingdom and that was a mistake for our economy.

Anyone from Brazil, China, Russia or India—or, for that matter, Mexico or Turkey—would say that they are all interested in trying to do business with one set of rules in Europe, not 27, on the size of plugs, on electricity, and on many other elements. I believe it is in our interests that we should strive ever more for the extension of the single market, so that we can do better out of the growing economies of the world; otherwise, our future will be on the sidelines, not at the heart, of the world’s history.

I have anxieties about the Government’s attitude on these issues. I know the Prime Minister tries to show a little bit of leg to Conservative Back Benchers and then to his European allies. There is a little bit of leg being shown here, there and everywhere. But the truth is that we need British businesses to be far more courageous about doing business in Europe; they should not just sally forth and speak louder—shout in more grammatically incorrect English than they would to their children—in the belief that they will get a contract. We must have more ambition when it comes to Europe.

I would say to those who said earlier that they praised the Prime Minister before Christmas that—leaving aside my opinion that it is giving the Prime Minister that dangerous element of messianism, which is always worrying for a Prime Minister—the child who has stormed off to his bedroom is rarely the person in the family who wins the argument.

13:11

[Mr John Redwood (Wokingham) (Con)]

I rise to support the Prime Minister. I think he had no alternative but to say no to a very unsatisfactory deal and to a totally inappropriate proposed measure at that Council. Nor do I think he has lost Britain influence by doing it; I think he has won Britain influence by doing it. We learned subsequently that several non-euro member states could not go along with the draft any more than the United Kingdom could. We also learned subsequently that France, Germany and others are now beating a path to the United Kingdom Foreign Office door, trying to get us back on board, trying to woo us because we had the courage to say no.

We meet today because we wish to influence our Government in what they are doing at yet another important European summit. The European Central Bank has bought the Europeans a little time by printing and lending unprecedented sums of money to a very weak European banking system, but those meeting would be wise to understand that that has only bought a little time; it has not solved the underlying problem. Indeed, there are two underlying problems. There is the inability of the southern countries to compete with Germany at the fixed exchange rate within the euro, making them poor and giving them large balance of payments deficits which they have trouble financing; and there is the big problem of the southern states’ debt getting ever bigger. As their economies are malfunctioning, because so many people are out of work and because they cannot price themselves back into jobs, their debts and deficits go on soaring, and now in three cases member states of the euro area cannot finance those deficits in the normal way and have to be on life support from the EU and the IMF.

[Martin Horwood]

On the subject of the right hon. Gentleman’s support for the Prime Minister, will he join me in welcoming the Prime Minister’s remarks this morning in Davos, when he said,

“Let me be clear. To those who think that not signing the treaty means Britain is somehow walking away from Europe let me tell you, nothing could be further from the truth”?

[Mr Redwood]

Of course the Prime Minister is right that we are in the European Union and all the time we remain in it we have to use our membership as best we can to protect the interests of the British people.

The main purpose of the summit must be to try to deliver greater prosperity and some growth and some hope to the peoples of Europe, because their hope has been depressed and their prosperity is being destroyed by a system that cannot conceivably work. The euro area is now locked into a system of mutually assured deflation, a mad policy, and the more those countries’ economies decline, the more the deficits go up, the more they have to cut. They cannot get themselves out by monetary means, in the way that the United Kingdom and the United States can, by creating more money in their system, and they cannot get out by having a competitive exchange rate.

[Mike Gapes]

rose—

[Mr Redwood]

I am sure that was the point that the hon. Gentleman wanted to make.

[Mike Gapes]

If the right hon. Gentleman is so against the austerity deflation policies in the eurozone, why is he supporting the austerity policies of his own Government?

[Mr Redwood]

As I just explained, it is totally different if a country has its own currency and can use monetary mechanisms to try to grow its way out of the problems, and can establish an exchange rate that allows it to export its way out of the problems, which is exactly what these countries have to do, yet are unable to do because they are locked in.

[Mr MacShane]

rose—

[Mr Redwood]

I have no more injury time available, so I need to develop my argument rapidly.

If those countries are to have some hope of prosperity, they need to solve the two underlying problems. It is obvious to most external observers that the way to solve the problem of competitiveness quickly is to devalue. Normally, an IMF programme for a country in trouble not only asks it to cut its budget deficit and reduce its excess public spending, but suggests that it devalue its currency and move to a looser monetary policy domestically, so that there can be private sector-led growth, export-led growth—the kind of thing it needs to get out of its disastrous position. That is exactly what those countries are unable to do. That is why the IMF should not lend a country such as Greece a single euro or a single dollar. Greece is to the euro area as California is to the dollar area: it is not an independent sovereign state, and it cannot do two of the three things that a country needs to do to get back into growth and prosperity, because it cannot devalue and it cannot create enough credit and money within its own system.

We need to give honest advice to our partners and colleagues in the eurozone, around the European conference table—in private, not in public—that the only way forward, the only way to resolve the crisis for those countries that can no longer borrow in the marketplace at sensible rates of interest, is to have an orderly way of letting them out as quickly as possible, so that they can re-establish their own currency, their own looser and appropriate monetary policy and their own banking policy, and offer some hope to their subject peoples.

I am very worried that this is not only an economic crisis, a banking crisis, and a currency crisis, but also now a crisis of democracy. The challenge, in countries such as Greece and Spain, is how the Governments manage to get buy-in to the policy of deflation and cuts with everything that is the only offering from the euro scheme and the euro system. We see in some of these countries now that the electorates do not choose the Government; the European Union’s senior players choose the Government. We see in some of these countries that the electorate change the Government but they do not change the policy. The new Government have to pledge to follow exactly the same policy, which does not work, in order to get elected and to be acceptable to the European Union, in order to carry on drawing down the subsidies and loans from within the European Union that have to be on offer to try to make the system operate to some extent.

I hope that the British Government will adopt the following position. I hope that they will say in public, whenever asked about the euro, that the British Government have no intention of providing any running commentary on the euro whatever or of saying anything that makes the position of the euro worse, but will always give good, strong, independent advice in private. That should be the public position. It is too dangerous to say things. Most of the things that politicians say about bond markets and currency crises make the position worse, so the United Kingdom would be well advised to have a simple formula, which all Ministers use, that we are providing no commentary on the euro and we wish the euro members well in sorting it all out.

In private, we are important allies and partners of the euro area and the British Government need to give honest advice to try to get our continent out of this mess. I do not believe there is a single fix that can solve that problem for all the countries currently in the euro. Many of them went into the euro with inflation rates that were too high, with state deficits and debts that were too high, and with currencies that were not in line with the German currency. It was a huge error. The founders of the euro knew that there had to be very strict requirements; they broke them from day one.

It will not solve the problem to sign up to some new constitutional pact that says that a country down on its luck, unable to borrow money, running out of cash, will be fined. Who will pay the fine? The answer is that the fine would have to be lent to the country in trouble by the very people who are fining it. It is so preposterous that I find it very difficult to believe that serious people can sit round a table, negotiating such an instrument. They should cast aside the draft instrument. It is irrelevant; it cannot work. They should sit down in private and work out how to get non-competitive countries out of this mess before even more damage is done to their economies and their democracies.

13:19

[Keith Vaz (Leicester East) (Lab)]

It is always a pleasure to follow the right hon. Member for Wokingham (Mr Redwood) who, in his 25 years in this House, has always been strong and consistent in his criticisms of the European Union.

I add my voice to all those who have spoken in favour of there always being a senior Minister at the Dispatch Box to introduce a debate such as this. When the right hon. Gentleman was a Secretary of State, the Minister for Europe in that Government wound up the debate, which would have been started by the Foreign Secretary, and when I and then my hon. Friend the Member for Rhondda (Chris Bryant) served as Minister for Europe, this debate was considered an important opportunity—perhaps the only opportunity—for Back Benchers to influence the Government as the Prime Minister, the Foreign Secretary and the Minister for Europe went to European summits. I therefore hope the first message the Government will take from the debate is the unity of opinion in the House—I have not heard a single opposing voice—that this should be a debate in Government time, with Members not limited to five minutes in which to state their views.

My second point is to ask the Minister to tell us when he winds up what has happened to the Lisbon strategy. It was agreed at the Lisbon summit in 2000 as part of the Lisbon agenda, developed over 10 years and adopted very recently with a set of five headline benchmarks. Does that strategy still exist, given the eurozone crisis? Are the Government still committed to delivering in those five areas—employment, investment in research and development, education, poverty and greenhouse gas emissions—which were set at the first ever summit to benchmark EU economic policy? Are we on track to do so? I get the feeling from discussions that I have had and from the responses to questions I put to Ministers, including the Prime Minister when he returned from the last summit, that although there is an intention to support the Lisbon strategy, it is certainly not high up on the Government’s agenda. I think that, given that this informal meeting is about growth and jobs, it is extremely important that we have benchmarks for the EU.

My third point is about EU enlargement, of which I am a great supporter. It has been of great benefit not only to the eastern European countries that have joined but to our country in particular. Croatia is due to join in July 2013. The EU has given Croatia €150 million to support its entry, and it will give another €150 million this year and €95 million next year. Will the Minister tell us whether that is the final figure; whether there will be any increase or, because of the euro crisis, any decrease in the amount we give Croatia; and whether that will continue after Croatia joins the EU?

This is a very short debate and we have to make very short speeches, but if those three points can be conveyed to the Prime Minister when he attends the summit and if the Minister can indicate the Government’s position when he winds up, I am happy to conclude my remarks now.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Before calling the next speaker, let me say that, ideally, I will call the first Front-Bench speaker at 28 minutes past 1. I call Bernard Jenkin.

13:23

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

This debate is being conducted between some right hon. and hon. Members with an extraordinary air of complacency and myopia. The European Union is on the edge of the most appalling crisis—a self-inflicted crisis that many of us predicted when the euro was first conceived in the early 1990s and is now being fuelled by blindness and denial. The fundamental problem is that the euro cannot work—it cannot succeed. There are fundamental structural flaws that are destined to cause the euro eventually to fly apart into separate currencies. I do not want the euro to fail, but the fact remains that the crisis will go on and on until it does fail, so we should start to ask ourselves whether it is, in fact, in our interests that it be resolved quickly and in an orderly fashion, instead of waiting for the markets to do their work.

The fundamental structural problem is that the different national components of the euro represent very different economies, with different surpluses and deficits. The 2010 figures for trade in goods in the eurozone, provided by the Library, show that Germany has a surplus in exports to the other eurostates of €43.4 billion. Other countries have very large deficits: France’s is 4%, Greece’s 6% and Portugal’s 9%. Unless there is a system of fiscal transfers permanently operating to compensate for those surpluses and deficits, the European economies will become ever more out of balance. The debt problem has been greatly exacerbated by artificially low interest rates in countries that were used to much higher interest rates and therefore borrowed vast sums.

[Mr Leigh]

Is it in our interests that the other countries succeed in creating fiscal and monetary union? We will be excluded from a massive monetary union, which historically—for centuries—we have tried to avoid. Or is it in our interests that the euro gradually breaks up in a reasonably orderly way?

[Mr Jenkin]

I do not subscribe to the view that British foreign policy should be constantly to try to divide and rule on the continent. Actually, I think it would be in our interests if the euro succeeded with a democratic settlement in the European Union, but for the euro to succeed with 17 nations the institutions would be required to take on much more power, to accumulate much more taxation and to distribute money much more than they do now. I put it to the House that because there is a democratic deficit in the EU, which everyone acknowledges, the institutions lack the legitimacy and the authority to be able to impose their will across the democratic nations of the EU. There is a fundamental lack of consent to what would be required to impose the necessary discipline.

The problem with the fiscal union treaty is that it is a case of Germany trying to write German rules for the whole eurozone. That will not work—it cannot be sustained—and the result will be the break-up of the euro, so we had better start planning for that eventuality now. There are three things we should do, the first of which is to have a plan and not pretend that a break-up will not happen. I accept the suggestion made by my right hon. Friend the Member for Wokingham (Mr Redwood) that the plan should be made in secret, but there should be a plan and the IMF should be its guardian. Secondly, the plan should be clear on what liabilities will be denominated in what currencies as each country comes out of the euro—easy for sovereign debt and very complicated for commercial paper, but it has to be done. Thirdly, the G20 must be ready to provide the liquidity needed to deal with the defaults that will occur as each country comes out of the euro—massive defaults that will require massive central Government printing of money to recapitalise the European banking system.

That can be done and it has to be done. My right hon. Friend the Prime Minister was absolutely right to veto the treaty on 9 December. He knows there can be no going back on that decision, because to do so would leave him a position where he might as well have not vetoed the treaty, and then where would we be?

13:29

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

The debate comes at a crucial time for the eurozone and the wider European Union. Last month’s European Council could and should have taken the vital decisions needed to stabilise the eurozone and boost growth and jobs in the EU, but it failed to do so. Monday’s European Council is a vital chance to make up for previous lost opportunities, but I fear that the Prime Minister’s diminished position in Europe has jeopardised the Government’s ability to achieve and influence that. His walk-out at the previous European Council was a spectacular failure to engage with our European partners. We have a world-class diplomatic service, but the Prime Minister refused to use the talent, professionalism and experience of the Foreign Office and opted instead to let the Treasury run our foreign policy. He decided that keeping his Back Benchers happy was more important than helping our main export market resolve the eurozone crisis. He in fact followed the advice of the Foreign Secretary who, according to various reports, before the last European Council told him:

“If it is a choice between keeping the euro together or keeping the Conservative party together, it is in the national interest to keep the Conservative party together.”

That is the only thing that the Prime Minister did achieve, because he did not stop anything happening. His diplomatic defeatism was accurately summed up by the Deputy Prime Minister earlier this month, when he said:

“The language gets confusing. Veto suggests something was stopped. It was not stopped.”

I could not agree more.

[Martin Horwood]

The hon. Lady makes some of the points that I made several months ago and that other hon. Members sympathetic to the pro-European cause made at the time of the summit. Surely we have now moved on. The Prime Minister, in his remarks today at Davos, quite clearly stated:

“It fundamentally reflects our national interest to be part of the single market on our doorstep and we have intention of walking away. So let me be clear: we want Europe to be a success.”

The process of re-engagement is under way.

[Emma Reynolds]

The process of re-engagement might be under way, but the Prime Minister’s decision to walk out of a summit that did not have a text to it has undermined our influence in the EU. His spectacular mishandling bought him short-term political respite from the pressure of his Back Benchers, but they will always want more, and we heard that in today’s debate.

[Mr MacShane]

May I pray in aid the Deputy Prime Minister, who said that the Conservative party in the European Parliament is now allied with “nutters, anti-Semites and homophobes”? The right hon. Gentleman has not resiled from that. That is walking away from Europe. As long as the Conservative party is in alliance with those weirdos, it loses a good part of the political traction that it should have in Europe.

[Emma Reynolds]

My right hon. Friend makes a valid point. If the Prime Minister had not pulled his MEPs from the mainstream centre right in the European Parliament when he was Leader of the Opposition, he would have found that he had much more influence before the summit, because he would have been in Marseille for the European People’s party meeting in preparation for the European Council summit.

It is of real concern to the Opposition that by isolating the UK the Government have lost influence with our European partners and could lose influence over the single market. Deeper fiscal integration by the eurozone countries does not necessarily lead to the development of separate trade policies or separate decisions on the single market, but that could come about if the UK continues to lose influence.

I understand that the Polish Government are now seeking to secure a seat at the frequent eurozone summits—a logical negotiating position. If they are successful, they would then have a voice, even if they did not have vote, at eurozone summits. As it stands, our Government will be barred from such meetings, leaving the UK without a vote and without a voice, unable to guard against eurozone Heads of State and Government straying into areas of decision making that are relevant to the EU of 27.

[Mr Redwood]

Will the hon. Lady bring us up to date with Labour’s thinking on any vote that we might face in this House on money for the IMF to lend on to euroland countries in trouble?

[Emma Reynolds]

As the right hon. Gentleman knows, the Opposition voted against the IMF contribution last time. I think that he might have been in the Lobby with us. We think that the European central bank should be the lender of last resort and that IMF money should concentrate on countries with severe economic problems outside the eurozone.

The Prime Minister’s walk-out also resulted in risks to foreign direct investment. Businesses investing from the US and Asia have chosen the UK for their operations because it gives them access to European markets. But if the UK’s position in the single market were in doubt, foreign direct investment would also be under threat. Moreover, as the Deputy Prime Minister rightly said on the Sunday after the December Council, if the UK stands tall in Brussels, we stand tall in Washington. It is also true that if we stand tall in Brussels, we also stand tall in Beijing and the other major emerging economies. With economic power moving south and east, to countries the size of continents, it is nostalgic longing for the empire to think that the UK can go it alone. It was the Minister for Europe, in a recent Opposition day debate, who said that

“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.”—[Official Report, 13 December 2011; Vol. 537, c. 724.]

[Mr Cash]

Will the hon. Lady give way?

[Emma Reynolds]

I will in a minute.

The task of Monday’s European Council is both urgent and long term—urgent in that it must address the lack of confidence in European markets, but alongside that the EU must enhance the resilience and capacity of the single market to get back to a sustainable footing in the long term.

We welcome the intention to focus on jobs and growth on Monday, as well as agreeing a fiscal compact. We would prefer the Government, rather than merely commentating on the outcome of the European Council, to be setting the agenda. We hope that their failure in diplomacy will not involve a failure of policy and economics. After all, in the coalition agreement, the Tories and the Liberal Democrats stated that Britain should play a leading role in the EU. The Prime Minister clearly did not have that in mind in December.

[Mr Cash]

Will the hon. Lady give way?

[Emma Reynolds]

When the Minister replies, will he clarify one issue? The Deputy Prime Minister has been organising his own meetings, and in some cases he seems to be running his own parallel foreign policy. While it is right for the Government to be building bridges, it is disappointing that the Deputy Prime Minister has thus far chosen not to report the outcome of the meetings to Parliament. Would the Minister therefore confirm whether the Deputy Prime Minister was speaking for the Government when, at the recent European Liberal forum, he said that:

“We believe—

the treaty—

“should, over time, be folded into the existing EU treaties so you don’t get a permanent two parallel treaties working separately from each other”?

At next Monday’s European Council, the British Government at least have observer status, but that is thanks to Chancellor Merkel and Prime Minister Monti, who want the UK back in the room. They see the UK as a leading member state, advocating an extension of the internal market. It is testament to past British diplomacy and previous Governments that many other member states share the view that, with Britain isolated and excluded from these talks, the push for further liberalisation and reform becomes harder.

[Mr Cash]

Will the hon. Lady give way?

[Emma Reynolds]

The hon. Gentleman is frustrated, but he will understand that because interventions eat into my time I will continue.

Britain’s standing in the world—economically and politically—must be reinforced and strengthened, not weakened. The resolution of the eurozone crisis is manifestly in our national interest. It is also in the national interest for the UK to be at the heart of the EU, a large member state with an open economy, arguing for and securing an extension of the single market, arguing for and securing reform of the EU. The UK now needs to regain that position and start rebuilding bridges.

On Monday the Prime Minister should seek to undo the damage caused by what he did in December, diminishing our standing in Europe and the world. It might not please his Back Benchers, but it would be of benefit to businesses, jobs and employees throughout the country. The Prime Minister must start to put the national interest before his party’s interest.

13:38

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

I thank the hon. Member for Wolverhampton North East (Emma Reynolds) for her remarks and all colleagues for taking part in this important debate. I thank the Backbench Business Committee for finding the time for this debate on next Monday’s informal Council. We know that there are many calls on the time it has available to allocate, but as it now holds the time previously assigned for European affairs debates, I am pleased that it found time for this debate.

[Mr Leigh]

It is fantastic that my hon. Friend is here and we greatly respect him, but will he take back to the Foreign Secretary the clearly expressed wish of Members on both sides of the House that we should have a full afternoon of debate in which he is present before any future European summits?

[Alistair Burt]

I thank my hon. Friend for his generous remarks. As he knows, occasionally colleagues cannot be where they would like to be because of other business, but I have heard what colleagues have said. My hon. Friend the Member for Gainsborough (Mr Leigh) expresses an interest in how the House scrutinises European business, and I will certainly take back to the Minister for Europe and the Foreign Secretary what colleagues have said. I would like to underline the effort and valuable work of my hon. Friend the Member for Stone (Mr Cash) and the European Scrutiny Committee.

[Chris Bryant]

Will the Minister give way?

[Alistair Burt]

No, because I might take another intervention on something else. Time is limited and I cannot do justice to everyone.

On Tuesday the International Monetary Fund published its world economic outlook. It revised down its global growth forecasts, mainly because of developments in the eurozone. It now expects the eurozone to enter a recession in 2012, with GDP falling by 0.5%. Those of us outside the eurozone are not immune from that. The ongoing sovereign debt crisis is having a chilling effect on our economy, too. Like my hon. Friend the Member for Harwich and North Essex (Mr Jenkin), I do not want to see the euro fail.

The eurozone needs to find a credible and sustainable solution to the debt crisis. Beyond that, there is a challenge for all 27 EU member states to release the brakes on growth to generate wealth, jobs and enterprise, and that was very much the focus of the speech made by my hon. Friend the Member for Folkestone and Hythe (Damian Collins).

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

On the point of improved opportunities for the single market, will my hon. Friend ensure that the Government take a clear message to the Council that work on improved tariff reform between the UK and Japan is vital for the British motor industry, particularly Honda in Swindon, which is a Japanese company based in the UK?

[Alistair Burt]

I can make no stronger a case for Honda in Swindon than my hon. Friend has made. He is absolutely right to focus on competitiveness, growth and the agenda that my right hon. Friend the Foreign Secretary will take forward there. I appreciate his comments. This informal European Council will rightly focus on growth and competitiveness, and it is vital that it makes progress ahead of the March European Council, which will also focus on growth.

The UK has played, and will continue to play, a strong and positive role in the EU as we and our European partners face the most pressing task of tackling our shared economic challenges. We are leading the arguments for growth and others continue to look to us for leadership. We have spearheaded the work of 16 member states, some inside the eurozone and some outside, in pressing for reforms to support growth. Together we have over the past year secured positive conclusions from European Councils that reflect our priorities. Action is now being taken, as shown by the Commission agreeing to exempt micro-businesses from EU regulation unless a clear case can be made for their inclusion.

Our diplomatic efforts to build alliances for growth continue in the European Council. The UK has agreed growth priorities for the informal Council with the Netherlands, Sweden, Finland, Ireland and Estonia, which will cover: completing the single market; reducing the regulatory burden; what member states should do to improve labour markets; and reaffirming the importance of the external dimension of the single market.

My right hon. Friend the Prime Minister also spoke to the German Chancellor, Angela Merkel, at the weekend to discuss our shared priorities. They agreed that the steps we should take to strengthen growth and fight unemployment, particularly youth unemployment, in Europe will form the focus of the informal Council on Monday. A number of right hon. and hon. Members spoke about our engagement with Europe. The Prime Minister was very clear today when talking about engagement, as my hon. Friend the Member for Cheltenham (Martin Horwood) made clear. In response to the question the right hon. Member for Leicester East (Keith Vaz) asked on Lisbon, I can tell him that the Prime Minister today said in Davos:

“For all the talk, the Lisbon Strategy has failed to deliver the structural reforms we need.”

It has largely been replaced by Europe 2020, which includes the sorts of benchmark the right hon. Gentleman referred to. The fact remains that we need to be bolder in the structural reforms we pursue to promote growth. The Prime Minister also said:

“Britain has been arguing for a pro-business agenda in Europe… Over the last year we have spearheaded work with 15 other member states across the EU... This weekend Chancellor Merkel joined me in calling for a package of deregulation and liberalisation policies… But we need to be bolder still. Here’s the checklist: all proposed EU measures tested for their impact on growth; a target to reduce the overall burden of EU regulation; and a new proportionality test to prevent needless barriers to trade in services and slash the number of regulated professions in Europe. Together with our international partners, we also need to take decisive action to get trade moving.”

That is what the EU needs, and that is what the informal Council will concentrate on.

[Mr Cash]

Will my hon. Friend give way?

[Alistair Burt]

I have only three minutes remaining, but I will take one further intervention, because my hon. Friend deserves it; we have discussed these matters on many occasions.

[Mr Cash]

Did the Prime Minister agree with Angela Merkel when she said:

“We will have to get used to the fact that the European Commission… will become more and more like a government”?

[Alistair Burt]

Alas, I have not had the opportunity to test that quote with my right hon. Friend the Prime Minister, but I will do so as soon as I have the opportunity.

A number of Members, including the hon. Members for Ilford South (Mike Gapes), for Rhondda (Chris Bryant) and for Wolverhampton North East (Emma Reynolds) and the right hon. Member for Rotherham (Mr MacShane), spoke about engagement in Europe. We are engaged. As my hon. Friend the Member for Cheltenham said, the Deputy Prime Minister hosted a meeting of various liberal European Prime Ministers, Commissioners, Deputy Prime Ministers and Foreign Ministers on 9 January to set out the British vision of greater competitiveness and growth across the European Union, because austerity alone will not fix the eurozone or the European economies. We have to combine fiscal discipline with a plan for more jobs and more growth, and the Deputy Prime Minister was right to say it.

As for lack of engagement and isolation, I am astonished that the presumption of the hon. Member for Wolverhampton North East in bringing to the House a challenge to the Government when the Opposition’s position is distinctly unclear. We will continue to work hard with our many allies in Europe to advance our interests. It is not isolation; it is defending the national interest. We differ from others in that we are not in the euro and do not want to join. We will not proceed with plans for fiscal consolidation if we feel that we are not protected. We will continue to work hard to advance our interests. One thing that would have made Britain weaker was coming home with a treaty change and no safeguards.

If the Opposition want to criticise the Government’s policy, they need to say what they would have done in office, but last month in the space of 10 days they had three different positions: first they refused to say what they would do, then they said that they would have vetoed the treaty, and then they said they would not have done so. They would have some credibility if they had a policy, and a bit of consistency would help.

This useful debate has concentrated not only on engagement and the like, but on the prospects for next Monday. The UK has an ambitious agenda for growth in Europe, and it is one we share with many like-minded states across Europe. It is also an agenda on which we have made much progress already throughout the last year. We will continue to ensure that we put our national interests first and to have a policy from a united party in relation to the UK interests in Europe. We will continue to look for partners who will share that interest, and at the moment the EU is calling for growth, competitiveness and more jobs.

13:48

One and a half hours having elapsed since the commencement of proceedings, the motion lapsed (Standing Order No.24).

Strategic Defence and Security Review

Thursday 26th January 2012 Commons Chamber

[Relevant documents: First Report from the Defence Committee, The Strategic Defence and Security Review, HC 345, and the Government response, HC 638; and Sixth Report from the Defence Committee, The Strategic Defence and Security Review and the National Security Strategy, HC 761, and the Government response, HC 1639.]

13:48

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

I beg to move,

That this House has considered the matter of progress on defence reform and the Strategic Defence and Security Review.

I begin by welcoming the Secretary of State to the first full debate on defence in which he has taken part as Secretary of State. In the short couple of months in which he has been in post, he has really impressed the Defence Committee, and me. I have formed an extremely high opinion of him as Secretary of State. I am perfectly well aware that he will be thinking at the moment, “If only I could say the same of him,” but I hope that during the course of the debate we will get to the bottom of some of the issues we face. I also welcome the very fact that we are having the debate, and thank the Backbench Business Committee for at last finding a day on which we can discuss one of the most important issues in the world, and the most important issue of government.

[Mr James Gray (North Wiltshire) (Con)]

I, too, welcome the fact that the Backbench Business Committee has found time for this debate, but does my right hon. Friend not agree that defence should be a matter not for that Committee but for Her Majesty’s Government? This issue should be debated in Government time, not in Backbench Business Committee time.

[Mr Arbuthnot]

I would hope that this issue could be debated both in Back-Bench time and in Government time, because of its central importance, but as the Committee will see, the pressure on speaking opportunities this afternoon is heavy, so there is a time limit even though there will not be a vote at the end. I hope that that means that we will have further such debates.

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

I accept everything that my right hon. Friend says about the pressure on time today, but does he observe that very little of that pressure is likely to come from Opposition Members, among whom there is a desultory turnout for such an important debate?

[Mr Arbuthnot]

At the moment the Opposition Benches do look rather empty, but let us hope that things will change.

I should like to examine what is different about the United Kingdom. Our role in the world is unlike that of any other. The quality of our armed forces is, I believe, second to none, and that comes mostly from the training that they receive, from the structure of the armed forces and from the fact that they work together in regiments and in units to fight, not actually for their country, and certainly not to fight for their politicians, but to fight for each other—so we must be very careful indeed before we tamper with that structure.

We should give thanks, however, to those men and women who lay their lives on the line and are prepared to sacrifice everything they have and everything they are in defence of this country. We are incredibly well served. We need to treat those people well, and I shall return to that point later in my speech, although I shall try not to take too long, as there is such pressure on time.

The UK is different, too, because we are prepared to put our people where our rhetoric is: we are prepared to fight when force is needed. In spite of that, we are seen as a force for good, and in that respect I draw one comparison with one other country: Germany. Germany is doing really valuable work in Afghanistan, and it is led by German politicians often in defiance, almost, of the beliefs and values that, largely at our instigation, have grown up in Germany since the second world war. When one goes to Germany and asks, “Why can you not contribute more to NATO operations?” one finds that they say, “Well, you’ve always been telling us not to fight; you’ve got to make your minds up.” We are gradually getting there, and in Afghanistan we are seeing a really valuable contribution.

I want, nevertheless, to read out a quotation from May 2010:

“In my estimation…we—including society as a whole—are coming to the general understanding that, given this strong focus and corresponding dependency on exports, a country of our size needs to be aware that where called for or in an emergency, military deployment, too, is necessary if we are to protect our interests such as ensuring free trade routes or preventing regional instabilities which are also certain to negatively impact our ability to safeguard trade, jobs and income. All of this should be discussed and I think the path we are on is not so bad.”

That is not an unexceptionable thing to say, but it was said by the President of Germany in an interview in May 2010, and because of those words he was forced to resign as President. That is a real issue. Britain is one of the few countries in Europe which is really prepared to put its forces where its rhetoric is, and we should be praised for that.

We have a history of involvement with most of the world. At one stage or another we have owned most of it, and many borders over which we now see disputes are probably our fault. Nevertheless, as a result of those historical issues we have, throughout the world, relationships that we need to preserve and that those parts of the world want us to preserve. We also have a history that is born out of our prosperity, and our armed forces have a real role to play in that.

Owing to all that uniqueness, that difference between the United Kingdom and others, our alliances and our position in huge alliances, we have huge ambitions to match that history, but what we do not have any more, to match our lofty ambitions, is the resources required to back them up. There is a clear contradiction between what the Government said in the strategic defence and security review about rejecting the shrinkage of UK influence throughout the world, and the reduction of the money that we spend on the Ministry of Defence and the Foreign and Commonwealth Office. We may well have to reduce the money that we spend on those Departments, but our ambitions should be reduced to match it. We now spend less on the Foreign Office than on the winter fuel allowance. That is a striking statistic.

I have no objection to this Government and this country being committed to hitting the target of spending 0.7% of gross domestic product on international development; I am proud, actually, of that ambition, that aim and that goal, because our role of defending our interests extends to, for example, preserving the stability of countries such as Pakistan and Afghanistan, and our international aid effort is important in that. In that respect, however, I ask one brief question: why is the stabilisation unit being withdrawn from Afghanistan in 2014? Although I took some time to come around to any agreement with the idea, I fully understand that our combat troops should be removed from Afghanistan by the end of 2014, but the stabilisation unit is precisely the reverse of combat troops. The current expectation is that 25% should be withdrawn this year, 25% next year and the rest by the end of 2014. The Government should reconsider that.

Equally, I have no objection to defence having to bear its brunt of deficit reduction. When, as in the past day or two, we hear that our debts are now £1 trillion, we have no choice, and let us remember that the greatest weapon—the greatest defence—a country can have is a strong economy. Indeed, we should not object to the fact that defence has to play its part in trying to produce that strong economy, but to pretend that while we reduce our defence resources we can be as strong in terms of our armed forces as we were before is wrong.

On the Defence Committee’s role, I return to the issue of treating the armed forces fairly, touching briefly on the little local difficulty that was produced by our report this week on the Ministry of Defence’s annual report and accounts. It is of course regrettable that for five years running the MOD’s report and accounts have been qualified, and it would be nice to have a true and fair view of what it has to spend and what its assets are, but the point that has obviously hit the headlines is the impression of unfairness created by compulsory redundancies among the armed forces but not among civilian personnel.

We have asked, therefore, for a compelling and persuasive reason why the one should be so and the other should not. If the answer is, “So many redundancies have been applied for in the civilian services of the Ministry of Defence,” perhaps that is because morale in that area is so low. If that is the answer, it is an issue that my right hon. Friend the Secretary of State really needs to address. If the answer is, as the permanent secretary told us, that civilians are flexibly employable whereas the military is not, that too is something that the Secretary of State needs to address. However, I do not believe that to be the right answer. I have heard the Secretary of State ask what else we could have done. I am afraid that four reasons for the disparity have now been explained to the Defence Committee, and without knowing the real reasons we cannot help to find an answer. We have, at least, highlighted the issue.

The relationship between my right hon. Friend and me, and the Defence Committee and the Ministry, is not cosy—quite right, too; it should not be. Nor should it be a relationship of antagonism and a feeling of “They are the enemy”. We do not regard the Ministry of Defence as the enemy, and we hope that we can move to a position in which the Ministry does not regard us as the enemy.

[The Secretary of State for Defence (Mr Philip Hammond)]

rose—

[Mr Arbuthnot]

I can quite see my right hon. Friend answering, “Well, this is a funny way to go about it,” but I will give way to him none the less.

[Mr Hammond]

I am tempted to say that it is even a grotesque way, Mr Deputy Speaker. In the spirit of my right hon. Friend’s remarks, perhaps I can try to help him. I understand his concern about the voluntary and compulsory redundancy numbers, but the simple fact is that we have set out a trajectory of headcount reduction among the civilian employees of the MOD and among the armed forces. At each tranche we have called for volunteers, and enough volunteers from the civilian population have come forward for no compulsory redundancies to be required. There has been an insufficient number of volunteers from the military population so, regrettably, compulsory redundancies have been required. I do not rule out the possibility that compulsory redundancies will be required among the civilian work force in future.

[Mr Arbuthnot]

My right hon. Friend is, as always, helpful. I hope that he will now address the issue on which there is some dispute of fact—whether those in the military on whom compulsory redundancy is imposed are allowed to offer themselves for retraining; we have heard variously both that they are and that they are not. That is an important issue.

I now turn to the strategic defence and security review—although I do not want to take too much longer because a large number of people would like to speak. One of the main aims of the Defence Committee is to see how the next strategic defence and security review, in whatever year it will be—2014, 2015, 2016; we do not yet know—can be better than the last one. Our criticisms of the last one included the fact that it was rushed to fit in with the comprehensive spending review, and was therefore undertaken without sufficient consultation with academia, industry, Parliament or the country. I heard my right hon. Friend the Prime Minister say that taking longer over decisions does not necessarily make them better, and that is true, but having proper full discussion in the country before such decisions are made would make them more informed.

[Thomas Docherty (Dunfermline and West Fife) (Lab)]

Does the Chairman of the Defence Committee agree that there was insufficient consultation with our closest allies about the implications of the SDSR?

[Mr Arbuthnot]

Yes, I do. Embarrassingly, I was fully consulted by the French Government on the introduction of their “livre blanc”, and I felt honoured, but I have no impression that the chairmen of the Assemblée Nationale or Senate committees were similarly involved in the discussion of our strategic defence and security review. That is one example of how, although Anglo-French co-operation is very good, it could still work a bit better.

There was no sense in the strategic defence and security review of a discussion of what sort of country we wanted to be, and the threats that we were facing, followed by a decision about how we were going to face those threats. Instead, there was a feeling of, “This is what we can afford, so these are the threats against which we will defend ourselves,” whatever those threats turn out to be.

For example, we now have six Type 45 destroyers. Why is six the right number? The original number was going to be 12, then it was cut to eight and then to six. When I was a Defence Minister we used to say that the right number of major ships was about 50. Why is it that now about 19 can defend our interests around the globe? However powerful a Type 45 destroyer is, it can only be in one place at any given time. There is also a concern about a loss of contingent capability. We always get wrong our predictions about the wars that the country will face, so we must be able to address unpredictable concerns that may arise.

However, there are many things to praise in the SDSR. The cyber-strategy, very welcomingly, refocuses the Ministry of Defence, other parts of the Government and industry on future issues. It is partly to welcome that that the Defence Committee is doing a series of inquiries into the cyber-threats that we face.

Lord Levene’s determined look at reforming the Ministry of Defence is radical. A number of my right hon. and hon. Friends, and other right hon. and hon. Members, feel that in some respects his work may be too radical or going in the wrong direction, but the Defence Committee will look at that issue, too. Bernard Gray’s focus on changing defence procurement already looks extremely promising; the Defence Committee has always been extremely impressed when he has appeared in front of us.

I shall end as I began. In the interests of mending fences, I wish to repeat, with praise, what the Secretary of State said to the Committee in December:

“If there is one clear lesson, it is that we have to move away from managing this business for cash to managing it for value, and that is the transition process that we are now into.”

As I said at the time, if my right hon. Friend can achieve that, he will turn out to have been a great Secretary of State.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

I remind hon. Members that there is an eight-minute limit on speeches.

14:07

[Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)]

It is a pleasure to follow the Chairman of the Select Committee in this debate. I wholeheartedly identify myself and my constituents with his tribute to our serving personnel; that issue would never divide us.

I also want to take up the theme that the right hon. Gentleman began and place these matters in the context of the public expenditure circumstances that face our country. But before I do so, I, too, would like to welcome the Secretary of State to his new responsibilities. I am pleased that he is here, taking an interest in this Back-Bench debate, and I wish him well in the difficult duties that he has in these strained circumstances.

I want us to look again at the case for Britain’s independent nuclear deterrent. I know that that will probably not be popular on either side of the House; others can make their points as the debate progresses. Given the current circumstances, it is time to consider the question again. The Government projects a total cost of £15 billion to £20 billion for the Trident successor programme. Independent research has suggested that the total cost would come in at three or four times that figure and our past experience with such big defence programmes suggests something similar.

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

rose—

[Mr Brown]

I remember giving way to the hon. Gentleman the last time I spoke in a debate of this character, back in 2007. I bet his intervention is about the same point.

[Dr Lewis]

Conservative Members are nothing but consistent on this issue. I remind the right hon. Gentleman that the Polaris fleet and the Trident submarines came into service on time and within budget.

[Mr Brown]

The hon. Gentleman presumably hopes that that will be the case in the future. However, I challenge him to point to any other defence programme from which he could extrapolate that conclusion. I know that he follows these matters with care, but I cannot think of another programme. He is right to point out the special cases of those procurements in the past, but I am not reassured that they will be repeated in the future. In any event, that point is not at the heart of my case. No matter how one looks at it, this is a very large sum of money to spend. My point is that we should look carefully at whether we should spend it.

The maingate decision on final renewal has been pushed back until after the next general election. The cost of that is said to be an additional £1.5 billion to refurbish and prolong the lifespan of the existing fleet. Parliamentary answers from Defence Ministers show that upwards of £2 billion has already been spent on preparatory work for the manufacture of the new submarines.

The Government clearly intend to press ahead with Trident renewal. In my opinion, they should seek explicit parliamentary authority for doing so. The failure to hold a vote in Parliament on the renewal of our independent nuclear deterrent is because of the inability to reconcile different views in the coalition. The question that faces us is whether an independent nuclear deterrent is a good use of such a large sum of public money in the present circumstances. The arguments, which were never that strong, are now moving away from Trident renewal.

[Dan Byles (North Warwickshire) (Con)]

I am listening with great interest. Does the right hon. Gentleman not agree that a long-term strategic decision, such as the replacement of our nuclear deterrent, should not be taken in the context of the current short-term economic conditions?

[Mr Brown]

I will come on to deal with that precise point. I have no quarrel with the hon. Gentleman for making it.

The current Trident system relies heavily on US logistical, capacity, technological and military know-how. It is nearly impossible to imagine any circumstances in which we would launch a nuclear attack, much less that we would do so independently of the Americans. Likewise, were Britain to be attacked by a nuclear power, the terms of our membership of NATO would require a joint response by all members, including the US.

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

Will the right hon. Gentleman give way?

[Mr Brown]

I cannot give way because of the rules on these things.

NATO is a mutual defence pact. It is a fundamental strength that its armoury includes the nuclear capability of the US. There has always been a question over why Britain needs to duplicate NATO’s nuclear capability, rather than more usefully supplement its conventional capacity.

When I first entered Parliament in 1983, I resisted joining the Campaign for Nuclear Disarmament. I did not support our decision to go ahead with an independent submarine-based system of our own. However, I did support Britain’s membership of NATO, which CND did not. At the time, that was regarded in the Labour party as a very establishment and right-wing position. It is a small irony of Labour politics that the same position is today seen as very left-wing.

When the decision was taken to adopt the Trident system in the early 1980s, there was an understanding that in exchange for non-proliferation by the non-nuclear powers, there would be restraint by the existing nuclear powers, in particular the US and Russia, when it came to further weapons development and upgrades. That idea was enshrined in article VI of the nuclear non-proliferation treaty. It can be argued that that has been more honoured in the breach by countries that did not possess a nuclear capability, but that do now. The underlying principle, however, seems to me still to be sound.

The large financial outlay that the Government are committed to in planning to replace our independent deterrent could be better spent in a number of ways. During the economic boom, I argued that we ought to better equip our troops, invest in the specialist field of anti-terrorism capability in line with the real threats that we face, and supplement our existing overseas aid budget. We now face new threats. To take one example, the money that we spend on Trident could be used to bring down substantially the tuition fees of every student. I think that cutting a generation adrift from higher education poses a bigger threat to our nation than the idea that a foreign power with nuclear weaponry would uniquely threaten to use it against us, and not the rest of NATO, and would somehow be able to disapply NATO’s founding terms. The real nuclear dangers of the future come from rogue states and terrorism. The possession of an independent nuclear deterrent does not make us safer. A better investment would be in anti-terrorism capabilities.

Three main arguments are put forward by proponents of Trident replacement. The first is that it is the best weapon that money can buy. The second is that it guarantees a seat on the United Nations Security Council. The final argument is that it contributes to our ability to punch above our weight in the world. I argue that it is not much of a weapon if the circumstances in which it may be used cannot be envisaged. Fundamental reform of the United Nations Security Council is long overdue and the difficulty, as we all know, is getting agreement on what that reform should be. I also think that other countries might like us more if we stopped punching above our weight in the world. We might be better thought of by the international community if we settled for being the medium-sized European nation state that we are, rather than the imperial power that we used to be.

We have a choice as a country: do we want to continue to drift into spending billions of pounds on supplementing a nuclear capability that we already possess through NATO or do we want to spend that money on tackling the problems that Britain actually faces in squeezed economic times? Surely we should resolve this issue now with a vote in this Parliament.

14:16

[Mr Julian Brazier (Canterbury) (Con)]

I will not respond to the right hon. Member for Newcastle upon Tyne East (Mr Brown), because I am confident that one or two of my hon. Friends will do so. Instead, I will talk for a few minutes about defence procurement.

Twenty-five years ago, I was responsible for carrying out a survey with three colleagues as a management consultant to compare the procurement systems in seven western powers. It is depressing, a quarter of a century on, how little things have moved on from the issues at that time. I remain convinced, as I was at the end of that process, that Britain is about average or a little above average, and not as inefficient as it is presented to be by some commentators.

I share the view of the Chairman of the Defence Committee that Bernard Gray is exactly the right man in the right job and that his report is excellent. I am deeply concerned that much of Lord Levene’s report will undermine some of Bernard Gray’s best and most important ideas, much as I respect the noble Lord and the work that he did in procurement at about the time I was a consultant.

There is time to touch briefly on only four points, of which two relate to the procurement function and two to the Ministry of Defence. My first point is that Bernard Gray is absolutely right to point to weaknesses in the contract staff, who are grossly underqualified for the job of stacking up against the highly competent lawyers employed by the other side. In project after project, we have found ourselves badly damaged by the small print.

My second point is about project managers. Gray, Levene and everybody else who has looked at this matter have concluded that we need more continuity in project managers and that they need to be professionally trained. Nevertheless, we are out of line with most other countries in concluding that project managers should be civilians. The most efficient procurers in the world remain, in my view, the Swedes. Their project managers are overwhelmingly military. They are in post typically for four to five years and they are properly trained before they become project managers. The problem, particularly on the army side where there are large numbers of comparatively cheap interlocking projects, is that if civilians are in charge of the projects, as in France, one ends up with lots of detailed user-problems that would have become obvious earlier if they had been before a military project manager. That is why France, despite spending far more on research and development than any other continental country, does not have a particularly good record on land vehicles.

My third point goes more to the heart of the distinction—in my mind, anyway—between Levene and Gray. The heart of Gray’s report—perhaps his single most important recommendation—is at point 4 in his summary, where he says that we must

“Clarify roles and create a real customer-supplier relationship between the capability sponsor (MoD centre)”—

—this is a distinction that we, alone in the whole world, developed before the second world war—

“and project delivery (DE&S)”.

He goes on to stress that the Deputy Chief of the Defence Staff (Capability) is the man who has to drive this. In contrast, Peter Levene suggests that DCDS (Capability) should be merged with one, or possibly two, other functions out of a long list—that it should be downgraded—instead of having, as Gray recommends, one board whose secretariat and day-to-day policing should be provided by DCDS (Capability) to oversee the process. In Levene’s structure we would end up with a complete muddle, with, in effect, four different bodies considering these matters—the new Defence Board, which is all-civilian except for the Chief of the Defence Staff, and the three armed forces themselves. That would take us halfway back to pre-1936.

[Bob Stewart (Beckenham) (Con)]

If the move is to make the CDS the commander-in-chief, and therefore in charge of the Army, with the same going for the other two services, surely it is proper that such people are represented on the Defence Board, if not particularly within the Ministry of Defence?

[Mr Brazier]

I thoroughly agree with my hon. Friend. I was about to come to that as my fourth and final point, but let me first finish my remarks on capabilities.

There is a very important reason, which Bernard Gray fingers exactly in his original report, for having a proper supplier-customer relationship. In the second world war, the Luftwaffe had a much more powerful research and development and industrial base, but the RAF, because it had a separate capabilities group, was able to make sure that all the pieces interacted so that we did not have problems with fighters that could not talk to bombers, and so on.

The A300M is a modern example of where that structure has broken down because—Gray criticises this—the capabilities staff have got weaker, and they will get a lot weaker still if the Levene recommendations are adopted. This aircraft is being bought for the Air Force—I have huge respect for Air Transport Command because of the brilliant work it has done in Afghanistan—but the user is the Army. Bizarrely, we have managed to arrive at a point where we are choosing to buy an aeroplane that is much more expensive than its tried and tested competitor, the Hercules, on the grounds that it can carry one armoured vehicle per aircraft whereas the Hercules cannot. If asked, the Army would say that armoured vehicles usually go by sea—it has C17s if it has to move them by air—and that it could not afford most of the armoured vehicles it wanted anyway. A strong central capabilities directorate would probably have been able to get a grip on that. Furthermore, the problem is as much in the detail as in the big picture.

That brings me to my fourth and last point, which was anticipated by my hon. Friend the Member for Beckenham (Bob Stewart). Some countries, particularly on the continent, do not allow executives on to their company boards; we would say that their company boards are all non-executive. Putting those countries to one side, in all my years as a consultant—I worked on all six continents—I never came across a successful company anywhere in which the heads of the main operating divisions were not on the main board. Peter Levene’s recommendation that the individual chiefs of staff should not sit on the Defence Board is bizarre. If one puts that alongside my third point about capabilities, with the greater powers that the individual services are going to take back from the centre to monitor projects, one can see that it is a recipe for increased in-fighting and for a reduction in interoperability. That is a big step away from joined-up defence.

I should like to end on a more positive note. With Bernard Gray, who is probably the best informed and best equipped man in the country, being put in charge of procurement, there is a fair chance that he will manage to overcome many of these problems. Certainly, under his leadership the performance of the procurement function itself will move from being a little above average internationally to being among the best. However, if we simply implement at the centre the Levene reforms as they are constituted—I have mentioned two of the weaknesses, and I could go into some of the others in detail—there is a risk that, in this area and in several others, we may undermine long-term defence planning.

14:25

[Mrs Madeleine Moon (Bridgend) (Lab)]

I fear that the strategic defence and security review was a cost-cutting exercise rather than an exercise that focused particularly on the defence needs of this country. As those who know me are aware, I have a particular worry about maritime patrol capability.

Following the decision to scrap the Nimrod MRA4, we have been left with no maritime patrol capability. The £6 billion Nimrod fleet is now ancient history and resting in a scrap yard somewhere. I do not want to spend any time discussing that again, but I want to consider where we stand without the capability that it would have provided. The former Secretary of State for Defence, the right hon. Member for North Somerset (Dr Fox), summed up the problem in his infamous letter to the Prime Minister:

“Deletion of the Nimrod MR4 will limit our ability to deploy maritime forces rapidly into high-threat areas, increase the risk to the Deterrent, compromise maritime CT (counter terrorism), remove long range search and rescue, and delete one element of our Falklands reinforcement plan.”

I want to examine each aspect of that assertion—first, the rapid deployment of the maritime forces into high-threat areas. The maritime patrol aircraft is there to protect our nuclear deterrent. In mid-December, The Scotsman reported that a Type 42 destroyer had to be dispatched when a Royal Navy battlegroup appeared off the coast of Scotland. [Hon. Members: “Russian navy battlegroup”] I am sorry—I meant a Russian navy battlegroup. Did I say “Royal Navy”? That is a real Freudian slip—I do apologise. Clearly, my meetings with Alex Salmond have left things in my brain that I should not have brought forward. A Russian navy battlegroup appeared off the coast of Scotland, as have a number of Russian submarines. In addition, Russia is building a new fleet of submarines. In the past a Nimrod would have been dispatched to keep a watchful, discreet eye. Instead, we sent a Type 42 destroyer. Without the MPA, we do not know who is out there or what risks we face.

Scotland is a part of what we should consider our back door—the high north. We spend very little time focusing on that region, but we ignore it at our peril. We tend to forget that we are a northern European country, and that the high north is growing in significance. Without a comprehensive maritime patrol capability, we cannot address the strategic and economic importance of the high north. As the ice melts in the Arctic ocean, the 160 billion barrels of oil that are assessed as being in that region are becoming more accessible. No one dreamed of those sea routes being opened up, or of the 40-day saving on travel made possible by the Suez canal being available for our shipping lanes. Without the MPA, we cannot keep an eye on those shipping lanes to watch for military deployments or respond to any disasters, whether they are environmental, security-related or human.

[Mr Arbuthnot]

I am grateful to the hon. Lady for giving way and particularly for the extraordinarily good work that she does on the Defence Committee, including in drawing our attention to issues such as the high north. In the comments that she just made, was she also making a comment about some of the possible implications of Scottish independence?

[Mrs Moon]

It is vital that the House addresses the issue of defence in relation to Scottish independence. I hope that, with the Chairman’s agreement, the Defence Committee will include it in our future programme. It is a matter of grave importance to the security and defence of the United Kingdom, and we should take it extremely seriously.

I turn to maritime counter-terrorism. On a visit to Northwood, information was given to me that having one Nimrod, a maritime patrol aircraft, was the equivalent to having 12 ships. We have only 19 ships, and we no longer have MPA capability. We have the increasing problem of countering piracy, which is a form of criminal maritime terrorism. Naval command said last year that 83 warships were needed to ensure a one-hour response time to merchant ships attacked in the high-risk area, yet in October only 18 vessels were deployed. The area of risk is huge—2.5 million square miles—and over the next 20 years, the volume of trade going by sea will increase by 50% and Navy cover will drop by 30%. Tracking rogue ships over such a wide area needs maritime patrol capability, which we do not have.

Counter-piracy operations conducted through NATO and through EU NAVFOR—Naval Force Somalia—rely on the resources provided by members. The availability of MPA fluctuates according to demands elsewhere, and operations in Libya meant that those limited resources were diverted. We face increasing numbers of attacks in the Indian ocean, the strait of Hormuz and now off the west coast of Africa.

Our reliance on the sea is enormous. In 2010, 35% of our total natural gas imports arrived by sea. By 2020, 70% will be imported in that way. Some $952 billion of trade a year passes through the Suez canal, and piracy costs the international economy between $4 billion and $7 billion a year. Those figures are being passed on to taxpayers through the rising cost of the goods transported through the region.

There are huge problems with the proposal to post armed guards on merchant ships. I have particular concerns about the rules that would be needed to govern the licensing of firearms on UK-flagged vessels, and about what would happen to the pirates who were captured. Kenya is no longer willing to help. How will pirates be transported to third countries for trial, and what will the legal position be of both the pirates and the maritime security company that transports them there? Are we in danger of giving rise to the issue of rendition?

I turn to our long-term search and rescue obligations. In 2010 our Nimrods were called out between 30 and 40 times to assist with search and rescue. We have an international responsibility for search and rescue covering 1.2 million nautical miles, but in a collection of letters in The Daily Telegraph in 2010, one writer said:

“I advise mariners to avoid requiring rescue more than 250 miles from shore.”

Without a maritime patrol capability, our capacity to rescue our seafarers is removed.

I wish briefly to consider the Falklands. I remind the House that when the invasion started on 31 March 1982, a Nimrod arrived at Ascension island on 6 April. A battle group of Harriers did not arrive until 1 May. That maritime patrol capability gives us the flexibility that we need, and it is a matter of great urgency that the House is advised on when it will be restored.

14:35

[The Secretary of State for Defence (Mr Philip Hammond)]

Let me begin by paying tribute to Signaller Ian Sartorius-Jones of 20th Armoured Brigade Headquarters and Signal Squadron, who died on operations in Afghanistan on 24 January. Our thoughts at this difficult time are with his family and friends. All of us in this House are acutely conscious of the sacrifices being made in Afghanistan on a daily basis by the men and women of our armed forces. The experience of my first 100 days as Secretary of State for Defence has only reinforced my admiration for their selflessness, dedication and bravery, as well as for the commitment and professionalism of the civilians who support them. They are rightly a source of great pride to the nation.

I congratulate my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot) on securing this debate on behalf of the Select Committee on Defence, and on his speech, most of which I wholeheartedly agreed with. I am delighted to have the opportunity to address the House on the defence reform programme that I have inherited, on my approach to it, and on how I will take forward the delivery of the defence outputs required under the strategic defence and security review.

[Mr Gray]

Does my right hon. Friend remember—perhaps he would do so nostalgically—the days when we had at least three debates annually on defence on a Government motion in Government time? Does he agree that this should be a Government debate rather than a Back-Bench one?

[Mr Hammond]

My hon. Friend will know that the Government took a decision to give a large slug of parliamentary time to the Backbench Business Committee, to be allocated according to the priorities that Back Benchers identify. That was a bold decision for a Government to take. The result is that we have that defence debate today. I hope the Committee notes, as my right hon. Friend the Member for North East Hampshire said, the strong attendance, and that that will mean we have more defence debates on Thursday afternoons in future.

I am delighted also to have the opportunity to address the House—I have said that once so I will not say it again.

[Mr Jim Murphy (East Renfrewshire) (Lab)]

It was pretty good.

[Mr Hammond]

I agree.

Today’s debate is about the reform of defence. That reform is for a purpose. Sometimes, amid the minutiae of budgets and organisational structures, we need to take care not to lose sight of that purpose: the defence of this nation and our dependent territories against those who threaten our security and our national interest.

The challenge we face is to deliver that defence on a sustainable basis within a resource envelope that the country can afford. That challenge must be set in the context of the fiscal and economic circumstances, as other Members have noted. History tells us that, without a strong economy and sound public finances, it is impossible to sustain in the long term the military capability required to project power and maintain defence. The debt crisis is therefore a strategic threat to the future security of our nation and to the security of the west. Restoring sound public finances is a defence imperative as well as an economic one, and defence must make its contribution to delivering them.

[James Morris (Halesowen and Rowley Regis) (Con)]

Does the Secretary of State agree that, in times of economic austerity, it is important that we develop collaboration with our NATO allies to enhance capabilities, so that we can engage with allies to combat some of the threats that we face?

[Mr Hammond]

My hon. Friend is absolutely right. Part of the answer to the questions raised by the hon. Member for Bridgend (Mrs Moon) is collaboration with NATO allies. They can share assets that they have and that we do not have, and we can reinforce their capabilities in other areas. The smart defence agenda is an important one—it involves collaboration among NATO allies in procurement to ensure that we get the best defence effect we can get with the limited budgets available.

As I have said, defence must make its contribution to delivering sound public finances, so even if the defence programme that we inherited had been in good shape, the spending review and the SDSR would have had to find savings to contribute to overall deficit reduction. However, the defence programme that the Government inherited was very far from being in good shape. At its heart, it had a £38 billion black hole filled with procurement projects that were at best hopelessly over budget and out of control, and at worst pure fantasy. They were projects announced by politicians—actually, mainly one politician—without any budget cover or prospect of ever being delivered, in a programme that had no proper contingency, no effective recognition of risk, and no provision for the “conspiracy of optimism” that was evident in MOD equipment cost estimates. The support programme systematically underprovided for the proper maintenance and sustainment of the equipment that was already in service. In short, Mr Deputy Speaker, it was a shambles.

[Hugh Bayley (York Central) (Lab)]

Will the Secretary of State give way?

[Mr Hammond]

I will give way to the hon. Gentleman, who will perhaps explain his way out of that.

[Hugh Bayley]

Were the capital programmes that the right hon. Gentleman’s Government inherited supported or opposed by the chiefs of staff at the time?

[Mr Hammond]

I am obviously not privy to the advice given to Ministers in the previous Government by their defence advisers, nor should I be, but if the previous Government were succumbing to recommendations from the defence chiefs, they were doing them no favours by pretending that they could deliver equipment programmes for which there were no funding lines or budget cover, and when there was no prospect of their materialising.

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

rose—

[Mr Hammond]

I am going to make some progress.

Does it matter that Labour’s programme was stuffed full of projects that would never and could never be delivered? I would argue that it did matter, because so long as the fantasy persisted, the doctrine and philosophy of our armed forces—[Interruption.] If the hon. Member for North Durham (Mr Jones) listens, he might understand the point being made. So long as the fantasy persisted, the doctrine and philosophy of our armed forces were built around the notion of those platforms being delivered, when what the forces really need is a realistic programme that we can deliver and that they can have confidence in, so that they can start rethinking their doctrine and operating philosophy for the future around the platforms and capabilities that we will have.

[John Woodcock]

To aid this debate, could the Secretary of State just remind the House whether his party in opposition argued for a smaller or larger Army than the then Government were prepared to support?

[Mr Hammond]

What I say to the hon. Gentleman is that we face the situation that we face. We came into office with a massive deficit, which we inherited from the previous Government, and as I shall argue, we have taken the tough decisions that, frankly, the previous Government shirked over the last few years, thereby doing the armed forces and the country no favours.

By 2010, Britain’s armed forces had endured a decade of high-tempo operations without a formal defence review and were faced with a period of acute fiscal pressure. The case for reform to ensure that the armed forces were restructured and re-equipped to protect our national security against the threats that we would face, within a budget that the nation could sustain, was unanswerable. Tough decisions were necessary to deal with problems on the scale of the inherited defence deficit, and this Government took them. I am clear, as the Prime Minister and my predecessor have been, that whatever the pain, our first duty is to put our armed forces on a sustainable basis by restructuring them for the future and putting the budgets that sustain them on a stable footing. As the SDSR acknowledged, the process of transitioning to Future Force 2020 will require us to take some calculated and carefully managed risks against certain capabilities, most prominent among which are wide-area maritime surveillance, to which the hon. Member for Bridgend referred, and carrier strike.

I regret in particular the cuts in personnel that are required to deliver that rebalancing and make the armed forces sustainable. However, in case any confusion has been created over the last few days, let me clear up one point. The headcount of military personnel will have been reduced by around 18% by 2020 compared with the 2010 baseline. That is in contrast to a 38% reduction in civilian headcount. Regrettably, some of that reduction will have to be achieved by redundancy. Where that is necessary, every opportunity is being given, and will continue to be given, for military personnel at risk of redundancy to retrain for alternative roles of which there are shortages in the armed forces.

I heard the comments of my right hon. Friend the Member for North East Hampshire earlier. Following the publication of the Select Committee’s report, I have asked for a specific briefing on the point that he raised. I would be happy to share that with him after the debate—[Interruption.] I will share it with the right hon. Member for East Renfrewshire (Mr Murphy) as well, if he wishes. It includes a list of the shortage trades for which suitably qualified individuals who are facing redundancy are invited to apply.

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

The large number of redundancies in the Gurkhas has inevitably caused concern among them and in my constituency. Will the Secretary of State give me a commitment that the Gurkhas will remain a unique and important part of the British armed forces?

[Mr Hammond]

The Gurkhas remain a very important part of the British armed forces. I think that my hon. Friend understands exactly the problem that we face in regard to Gurkha numbers. Their terms of service were changed as a result of decisions made by the courts and the campaigning pressure that was placed on the previous Government. That means that most Gurkhas have elected to extend their service to 22 years. Consequently, the numbers of Gurkhas in service are projected to be above the levels needed to sustain the two brigades that we wish to sustain. That has given rise to a larger number of Gurkha redundancies than we would have expected to see. That is regrettable but, I am afraid, inevitable.

We are making tough decisions to tackle the massive deficit left by the previous Government and the unfunded defence programme. If those decisions had been easy or popular, you can bet your life that the Labour Government would have taken them years ago. They did not do so, however, and it now falls to the coalition to do the right thing in the long-term national interest. Translating the strategic prescriptions of the SDSR into decisive actions was always going to be a process rather than an event. Turning the corner on a decade of mismanagement will take time and determination.

To shine a bit of light into the end of the tunnel, the Government announced in July 2011 that the MOD could plan on the budget allocated to defence equipment and equipment support increasing by 1% a year in real terms between 2015 and 2020. That amounts to more than £3 billion of new money over the period. Importantly, that commitment was renewed by the Chief Secretary to the Treasury after the autumn statement. That will enable investment in a number of programmes, including the procurement of new Chinook helicopters, the refurbishment of the Army’s Warrior fleet, the procurement of the Rivet Joint, or Airseeker, intelligence and surveillance aircraft, and the development of the global combat ship.

The MOD is currently undertaking its annual budget setting process, which is known as the planning round. I am personally engaged in that process, and I am increasingly confident that we are close to achieving a sustainable and balanced defence budget for the first time in a decade or more. That would be an immense achievement, and would allow us to plan with confidence and to spend well over £150 billion on new equipment and equipment support over the next decade, as well as delivering the force restructuring and rebasing that we have announced. A turnaround on that scale requires a major cultural shift. Defence must change the way in which it does things and the way in which it addresses problems. It must challenge the received wisdom around the doctrines used to deliver defence tasks and around the management of defence itself.

Last month, the Government published the first annual report on the SDSR, which set out in full the progress that is being made. Let me address a couple of salient areas of what the MOD calls “transforming defence”—that is, the journey from the mess that we inherited towards achieving a sustainable, capable, coherent and adaptable force, built on balanced budgets and disciplined processes, by 2020. As I have said, I am clear that the Ministry of Defence must balance its budget. I am equally clear that it does not exist to balance its budget; it exists to deliver effective defence within a sustainable budget envelope.

[Sir Bob Russell (Colchester) (LD)]

Will the Secretary of State give way?

[Mr Hammond]

I cannot resist taking one last intervention.

[Sir Bob Russell]

Does the Secretary of State accept that morale is very important, and if our soldiers, sailors and air personnel and their families are given accommodation that is not fit for purpose, that does nothing to help the Government’s objectives?

[Mr Hammond]

I reassure my hon. Friend that I absolutely agree that morale is very important. I shall come to morale in a moment, and I understand that accommodation plays an important part in that. He will understand that there are thousands of moving parts in the defence budget, and trying to bring them back into balance is a massive challenge. Inevitably, people will always ask us to do more, more quickly, whether on accommodation, front-line equipment or any other area. We must try to balance the equation and get the judgment right.

As I said, the Ministry of Defence exists to deliver an effective solution within a sustainable budget envelope. NATO membership and our defence relationship with the United States and other key allies, such as France and Australia, are a vital part of the strategic solution as we move to Future Force 2020. It will, of course, be a smaller force, but it will be equipped with some of the best and most advanced technology in the world. It will be configured to be agile, focused on expeditionary capability and carrier strike, able to intervene by airborne or amphibious assault, and with the ability to deploy, with sufficient warning and for a limited time, a whole-effort force of about 30,000, or to maintain an enduring stabilisation operation at brigade level while concurrently undertaking one complex and one small-scale non-enduring operation. It will be a formidable regular force, supported by better trained, better equipped reserves who will play a greater role in delivering defence effect on the back of the extra £1.8 billion that we will invest in them over the next 10 years. All that will be underpinned by the expectation that, in most circumstances, we will be fighting alongside allies, and it will be supported with doctrines that will effectively address the threats of the future with the assets that we will have.

The proposal is about finally moving on from cold war reliance on mass to the “lethal and light” doctrines of flexibility and agility that the challenges of the new century require. It is not just the armed forces that need to reconfigure; the management of defence needs to change too, by developing a laser focus on delivering defence cost- effectively and accountably, protecting the front line and the taxpayer at the same time. Under my predecessor, that transformation had already begun. The recommendations of the Defence Reform Unit under Lord Levene were broadly accepted. Many have been implemented and others are in the pipeline. The Defence Board has been reconfigured to provide for a clear, single, joint service voice on military priorities, and a greater role for non-executive directors under the chairmanship of the Secretary of State. I reassure my hon. Friend the Member for Canterbury (Mr Brazier) that the single voice for the military on the Defence Board is supported by an effective armed forces committee, at which the chiefs of the individual services are able to work together to determine their combined order of priorities for the Defence Board’s allocation of available resource. That priority order is then presented to the Defence Board by the Chief of the Defence Staff—a presentation that has become extremely effective, because it carries with it the authority of all three services and the joint forces commander.

The Defence Infrastructure Organisation has been stood up to rationalise the Ministry of Defence estate and reduce costs by 25%. Defence Business Services has been created to unify human resources and other back-office functions across the Department. The reform of the procurement process has begun with the appointment of—you guessed it, Mr Deputy Speaker—Bernard Gray, who has now had four name checks, I think, so far in the debate, as chief of defence matériel, and the establishment of the major projects review board to hold those responsible for failing projects firmly to account.

This year will see the transformation accelerate, with an evolution towards a leaner, more strategic head office; the introduction of a stronger financial and performance management regime across the whole Department; the service chiefs being empowered to run their individual services and their delegated services budgets; the new joint forces command being stood up on 1 April; and the start of the reform of the MOD’s defence equipment and support business on the basis of a new matériel strategy.

The next few years will also see the beginning of considerable change on the ground as the rebasing programme set out in July last year is taken forward and the Army begins its return from Germany, as well as its withdrawal from Afghanistan and its internal restructuring to deliver five multi-role brigades. I know those last changes, in particular, are of great interest to individual Members. The House will understand that many of the changes are interdependent and complex, but I can give a commitment that I will make further announcements on the details of individual elements of the transforming defence programme as and when it is appropriate to do so.

[Sir Menzies Campbell (North East Fife) (LD)]

Will my right hon. Friend give way?

[Mr Hammond]

I thought that might provoke my right hon. and learned Friend.

[Sir Menzies Campbell]

First, I should apologise for being unable to be present at the beginning of the debate due to other responsibilities.

My right hon. Friend is right to say that the basing decisions have caused a great deal of disappointment. In the case of my constituency, the closure of RAF Leuchars, which has provided nearly 100 years of service in aerial warfare, has been particularly difficult to accept. Part of the argument in favour of that closure was that there would be specific deployments of units of the Army to occupy the base. So far, very little detail has been made available. May I encourage my right hon. Friend to ensure that the announcements he has just foreshadowed will be made as soon as possible?

[Mr Hammond]

I can reassure my right hon. and learned Friend on that point. RAF Leuchars is not so much closing as transforming its role to become the home of one of the five multi-role combat brigades after the rebasing of the Army back to the UK.

The purpose of all the changes is to increase the investment we can make in service people and their equipment and training, to increase investment in the front line by making the back office more efficient and more accountable, and to deliver value for money in defence. I know that change is unsettling and that the threat of change and the uncertainty it brings can sap morale, which my hon. Friend the Member for Colchester (Sir Bob Russell) mentioned. I will make every effort to ensure that the people who are directly affected by the proposals are kept fully informed as they progress and that we get the changes made as quickly as humanly possible.

[Mr Gray]

Will my right hon. Friend give way before he moves on?

[Mr Hammond]

I will not give way to my hon. Friend a second time, as I am conscious that a large number people wish to participate in the debate.

People remain the greatest asset of defence and, despite the tough decisions that must be taken, we will do all we can to protect them. This Government understand our duty to the country and to our armed forces. We have made the tough choices necessary to put them on a sustainable footing for the defence of national security and of the United Kingdom’s interests around the world. We know that making those changes will not to be easy, but I have no doubt that the British armed forces that will emerge will be formidable, flexible and adaptable, supported by the fourth largest defence budget in the world, meeting our NATO responsibilities and equipped with some of the best and most advanced technology on earth.

To get there, we need not just the series of structural and organisational changes I have set out, but a cultural shift in the way the organisation thinks and works. We need a shift in military doctrine to deliver the defence effect we will need, using the capabilities we will have; a shift in civilian culture to one of discipline, individual accountability and delegated decision making; and a shift to a leaner, fitter, more empowered and more empowering organisation. This is a programme of renewal and change of a scope and on a scale greater than anything else being delivered across the public sector. It is a blueprint for a sustainable future for the UK’s armed forces as one of the world’s most capable fighting machines. That is what Britain needs and what our armed forces deserve, and as we move forward to deliver it we will never forget that at the heart of this organisation are the servicemen and women who are prepared to put their lives on the line for us day in, day out. We owe it to them to make sure that the transformation we have embarked upon delivers its full promise.

14:59

[Mr Jim Murphy (East Renfrewshire) (Lab)]

I welcome the opportunity to speak in this annual debate.

The debate was initiated by the Select Committee on Defence and facilitated by the Backbench Business Committee, but I hope that in future the time allocated will be additional to that allocated by the Government to such debates.

I congratulate the Chair of the Defence Committee, the right hon. Member for North East Hampshire (Mr Arbuthnot), on his very thoughtful speech. Even though parts of it criticised the Government of whom I was a member, his assessment was often fair. Parts of his speech, however, were in stark contrast with the opening passages of the Secretary of State’s partisan comments.

It is right that we remember the names of those serving in our name across the world and those, such as Ian Sartorius-Jones, who have lost their life serving our nation, particularly in Afghanistan, which must remain our country’s principal defence mission. The bravery of the UK’s servicemen and women is in all our thoughts and many of our prayers. Their actions overseas make our country safer and we thank them and their families.

We continue to support strongly the mission in Afghanistan because we are entering a difficult phase in that conflict. With 33,000 US troops and 500 UK troops departing this year, and with the pace of further withdrawal yet to be set, the capacity of Afghan forces is a crucial issue. There are worrying signs in terms of retention rates and recent high-profile infiltrations of those forces. Building the strength and the legitimacy of the Afghan national army and police force must be a priority for this year alongside the delivery of representative, stable local governance and the continued engagement of regional partners. Labour will continue to support and scrutinise the Government, as well as pressing for the pace of withdrawal to follow the conditions on the ground. It is vital that we have clarity as soon as possible on the size of any residual UK force in Afghanistan and on its responsibilities.

Afghanistan sits alongside many new and emerging threats faced by the UK and our allies. Events in north Africa and the middle east continue to prove this. The potential for conflict between states or among peoples is on the rise.

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

rose—

[Mr Murphy]

I anticipated that the hon. Gentleman would seek to catch my eye and I will gladly give way.

[Rory Stewart]

Will the shadow Minister please explain what he proposes to do to achieve a stable, effective Government in Afghanistan that has not already been proposed by the Government?

[Mr Murphy]

I am sure the hon. Gentleman will appreciate that I said right at the beginning that I am keen to have a bipartisan approach in Afghanistan, and that will continue. There is sometimes a temptation with these very difficult, often impractical, problems to give in to the temptation to seek and find synthetic differences, but as I have said before at the Dispatch Box it is important that this year there should be a genuine political process to match the military might of the past decade. That did not happen last year, and it should be compulsory this year. The Bonn conference was a failure in that regard, but I did not attack our Government for that from the Dispatch Box because it was an international failure to formulate the political strategy that that country so badly needs.

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

I appreciate that the right hon. Gentleman was not in post during the relevant period, but does he regret not conducting a defence review in the past decade? A review might have helped to identify the fact that Snatch Land Rovers were not appropriate in Afghanistan. We went through a period of bizarre procurement in which the Ridgback, the Cougar, the Vector, the Jackal and the Mastiff were produced one after another and bought off the shelf to try to identify something that would work in Afghanistan. If we had held a defence review, perhaps we would have seen that the conduct and style of war was changing before our eyes and we could then have ensured that we sent our armed forces to Afghanistan with the right equipment.

[Mr Murphy]

The hon. Gentleman has great and varied experience, but I think he will fairly accept that the urgent operational requirements worked well in Afghanistan, and after 9/11 we updated our defence review with a new chapter. In a debate that is intended to be relatively thoughtful rather than our traditional cut and thrust, it is fair to say that the nature of the conflict in Afghanistan changed and surprised many people, including those who were engaged in it day to day. As we reflect on what happened in Afghanistan, it is crucial that we learn deeply the lessons of the conflict, in the hope that we never have to deploy them, but in the fear that on occasion it might become necessary.

I was making the wider point that events in north Africa and the middle east continue to prove the uncertainty and unpredictability of the future shape of conflict. Coupled with the Arab spring, the growing global population, the threat of climate change, new information technology and biotechnologies, nuclear proliferation and cyber-attack, we live in what is, by consensus, an era of dramatic new global security challenges. All that means that it is sensible for the Government to invest the £650 million they have announced for cyber-security. The continuing emphasis on soft power and multilateralism to supplant the inevitable capability shortfalls resulting from spending constraint is vital. It was crucial in good times, but it is compulsory in these difficult times of budget cuts in a world of flux.

[Dr Murrison]

The shadow Chancellor is on record saying that he accepts all the Government’s spending cuts. However, the shadow Defence Secretary says that he thinks only £5 billion-worth of cuts in defence are necessary. Who is correct?

[Mr Murphy]

I have learned from experience that it would never be wise to misrepresent the words of the shadow Chancellor, and I dare say the hon. Gentleman is doing just that. We have been pretty clear; we cannot commit to reverse specific cuts that the Government have made. Similarly, before the 1997 election we said we would stick to the size of the state for the first two years of a Labour Government. It is important to be clear: before that election, we committed not to reverse individual spending cuts.

On defence reform, we know that we must meet the ambitions for our forces that we share across the Chamber, and which the Secretary of State referred to at the end of his comments. Reform is more important than ever before and when the Government make the right choices, they will have our backing. I listened carefully to the hon. Member for Canterbury (Mr Brazier), who spoke with real passion about an important issue that can often be quite dry. Much of the restructuring of the MOD announced in the Levene report was as welcome on the Opposition Benches as it was, in the majority of cases, on the Government Benches, in particular, greater financial powers for service chiefs. Some of the rebalancing of the equipment programme, notably cutting tank regiments, was necessary and has our support.

Unfortunately, that is not the case for every decision taken in the Government’s controversial and much criticised defence review, which has set our country’s defence policy on an uncertain path. However much some try to depict the process as a success, the evidence to the contrary is striking. The strategic defence and security review was immediately reviewed in a three-month study that announced thousands of further redundancies in our forces and the civil service. There are new unfunded liabilities on the balance sheet and further cuts to the equipment programme appear imminent. The conflict in Libya saw military equipment planned for the scrapyard recalled. The UK has been left with serious capability shortfalls for a decade, most notably the carrier strike capability gap. Military experts have repeatedly been open in their criticisms, and all in all it is a cuts package still in search of a defence strategy and there should be a rethink.

On forces welfare, I welcome much of what the Secretary of State has said in the announcements that he has made in advancement of forces welfare, but last week saw 400 Gurkhas being made redundant—the second painful cut they have had to endure in just a few months. The whole House will recall that the Prime Minister championed those remarkable soldiers in opposition, and many will agree with the Defence Committee’s statement that the level of compulsory redundancies among those in uniform is “grotesque.” That comes alongside cuts to front-line allowances, and permanent changes to pensions that will disproportionately affect members of the armed forces and their dependants, who rely on their pensions at an earlier stage in life than almost anyone else.

[Mr Philip Hammond]

rose—

[Mr Murphy]

I will happily give way, because I anticipate that the right hon. Gentleman’s fidgeting—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. One standing up, one sitting down, not two standing at once.

[Mr Hammond]

I am sorry, Mr Deputy Speaker. The right hon. Gentleman says he is giving way, then stays standing up for another three sentences. I am confused. He says the redundancies in the armed forces are grotesque, but he says he will not reverse the spending cuts that the Government have announced. Which is it? Is he going to reverse the cuts or is he going to accept the redundancies?

[Mr Murphy]

As the right hon. Gentleman knows, I am echoing the assessment and the assertion of the all-party Select Committee, and now that the right hon. Gentleman and his friends have sacked those soldiers, we cannot re-employ them. That is very clear indeed.

[Mr Hammond]

The right hon. Gentleman is not going to wriggle out by putting it in an historical context. A tranche of military redundancy is going on right now, and regrettably there will have to be further tranches. Would he scrap them and, if so, where would he get the money from?

[Mr Murphy]

It is ironic and peculiar that the current Secretary of State is seeking a commitment from the official Opposition to reverse cuts that he has not even yet announced. It is a ludicrous way to conduct politics and economics.

This cut comes alongside cuts to front-line allowances, and permanent changes to pensions, which will detrimentally affect those who require to take their pensions earlier in life. A corporal who has lost both legs in a bomb blast in Afghanistan will miss out on £500,000 in pension and benefit-related pensions. War widows will also lose out enormously. A 34-year-old wife of a staff sergeant killed in Afghanistan would be almost £750,000 worse off throughout her life.

Ministers blame deficit reduction but the argument does not add up. These changes are permanent, so the impact will be felt long after the deficit has been paid down and the economy has returned to growth.

I believe it is uncomfortable for us all that Sir Michael Moore, the chairman of the Forces Pension Society, has been moved to say:

“I have never seen a Government erode the morale of the Armed Forces so quickly”.

What has been the Prime Minister’s response? It has been a Cabinet Sub-Committee of his Ministers. To those in the front line, that will be little consolation. Indeed, given some of the decisions that have been taken, they are likely to want fewer, not more ministerial meetings. As I have previously said, I think there is a case for fewer Ministers in the Ministry of Defence in and of itself.

As the Secretary of State has rightly said, UK armed forces are a “force for good” across the globe, bringing peace to the Balkans, promoting stability in Sierra Leone, building capacity across Africa, supporting the actions around Libya, the normalisation of Northern Ireland and counter-terrorism at home and overseas, including in Iraq and Afghanistan. We want our forces to continue to play such a world-leading role, but their ability to do so is being challenged by the decisions of the Government.

[Dr Julian Lewis]

I thank the shadow Secretary of State for giving way so courteously. In his list of commitments, the one thing he has not mentioned is the strategic nuclear deterrent. In the light of the first contribution that was made from the Opposition Back Benches, would he care to reiterate his party’s commitment to the renewal of the strategic nuclear deterrent?

[Mr Murphy]

My hon. Friend the Member for Barrow and Furness (John Woodcock) is over my right shoulder, and I would not wish to steal his speech, because without anticipating its detail I expect it will be a detailed rebuttal of my right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown). Briefly, our view remains that we believe in the minimum credible independent nuclear deterrent. The timing of the Government’s process does surprise many, because it seems to be designed for internal political dynamics rather than the defence of our nation, but generally we do support the retention of the minimum independent nuclear deterrent, and we look forward to an informed debate about its renewal.

[Sir Menzies Campbell]

Will the right hon. Gentleman give way?

[Mr Murphy]

I have given way more often than I probably should have, Mr Deputy Speaker, given that I am sure you will encourage me to sit down in just a couple of minutes, but on the basis that he is not only a right hon. and learned Member but also a friend, I will give way briefly to the right hon. and learned Member for North East Fife (Sir Menzies Campbell).

[Sir Menzies Campbell]

The right hon. Gentleman has spoken at some length and with some eloquence about the uncertainties that face the defence of the UK, but has he considered the uncertainties that would face the defence of the UK were there to be an independent Scotland—not least for Scotland, but for all the rest of the United Kingdom? Our reputation and our capability are well recognised; how far does he think these would be capable of being sustained in the event that there was an independent Scotland?

[Mr Murphy]

The right hon. and learned Gentleman makes a compelling argument. I look forward to being part of the discussion during the referendum campaign. I have only two more points to make: the first is about finance but the other is about Scotland, which will allow me to respond to that intervention in more detail.

The Secretary of State mentioned the £38 billion figure, but that is Ministers’ response to every single issue. They use a catch-all Conservative assertion as a fact and so attempt to escape their responsibility, but in its report on the SDSR the Defence Committee stated:

“We were disappointed by the MoD’s response to our requests for a breakdown of the MoD’s financial commitments, including details of the components of its estimate of a £38 billion gap in the defence programme”.

When the previous Secretary of State gave evidence to the Committee, he was asked to provide that information, but it has still not received it. He said that he would provide it, but when challenged he said:

“Offhand, I couldn’t give an actual figure, but I will get it for the Committee.”

The Committee has not received it. In evidence to the Public Accounts Committee, the MOD director of general finance said that

“Ministers have committed to making a public statement”

on the MOD’s spending gap. They have not made it. We look forward to the promised information being made available not only to the Defence Committee and the House, but to the forces, their families and the country. Until Ministers provide it, there will be an enormous gap in the Government’s explanation for their decisions.

Finally, let me respond to the point about Scotland made by the right hon. and learned Member for North East Fife and my hon. Friend the Member for Bridgend (Mrs Moon), who unintentionally but inelegantly described Scotland as “our back door”. For many of us it is home and we want never to see a Royal Navy battlegroup off the coast of Scotland, except perhaps as it sails from there to foreign shores; but while there are real worries about the Government’s defence policy on the Opposition Benches and across the country, those are dwarfed by the worries about the defence plans of another Government on these isles—the Scottish Government.

Although I criticise the rushed nature of the UK Government’s defence review, I make the opposite criticism of the Scottish National party Government’s approach. Their party has been around since 1943—

[Sir Menzies Campbell]

They’re not around today.

[Mr Murphy]

They are almost represented by my hon. Friend the Member for Edmonton (Mr Love), who is almost sitting in their usual place. An expat Scot, he looks as though last evening he spent a lot of time enjoying Burns night. [Laughter.]

[Thomas Docherty]

Will my right hon. Friend give way?

[Mr Murphy]

I know I am testing your patience, Mr Deputy Speaker, but out of good manners I will give way to my hon. Friend.

[Thomas Docherty]

My right hon. Friend is being most generous, as are you, Mr Deputy Speaker. Is he aware of the sheer anger felt in Fife that after more than a year of SNP Ministers saying that they would save RAF Leuchars, they have betrayed the people of Fife with a cynical policy U-turn?

[Mr Murphy]

My hon. Friend has campaigned long and hard on RAF Leuchars, as has the right hon. and learned Member for North East Fife. It is remarkable that SNP Members have toured that part of Scotland promising to keep open three bases, but now describe the Government’s policy as a blueprint for the defence of an independent Scotland.

The SNP has been around since 1934 and has been in power in the Scottish Government for five years, but SNP Ministers have not even done the most remedial of thinking. Scotland currently sits at the heart of one of the most successful union of nations anywhere on earth. The UK has a seat at the United Nations Security Council, an invaluable transatlantic bond and a vital role in the EU, NATO and the Commonwealth. A collection of people from four different countries serving in Her Majesty’s armed forces have achieved great things together in the past and will, I am certain, do so in the future as well. The SNP wishes to turn the defence debate into a referendum about the location of Trident, as if moving it a few miles across the border would make Scotland inherently safer. SNP Members may be hiding today, but they cannot hide from the truth that their policies are incoherent and will take Scotland out of the RAF, the Royal Navy and the British Army, as well as having an irreversible impact on shipbuilding on the Clyde and Rosyth. Amid all the argument about the single question to be asked in the referendum, the debate must be about all of the answers that the SNP refuses to provide.

Where the Government are doing the right thing in the national interest, whether it is Afghanistan, Libya or defence reform, we will continue enthusiastically to support them. Therefore, today, I enthusiastically thank the Chair of the Select Committee and all its members for their forensic work in scrutinising the previous and the current Governments on their work on defence, and I thank the Backbench Business Committee for enabling today’s debate.

15:20

[Mike Crockart (Edinburgh West) (LD)]

I welcome the opportunity to speak in today’s debate. I should declare my interest as a Member for a constituency facing the loss of an historic headquarters, and a resident of a city facing the loss of an additional two barracks. I have been calling on the Ministry of Defence to rethink their proposals. I made the case for a future for Craigiehall to the Secretary of State for Scotland in November, and my contribution today restates that call.

The SNP may, now at least, be happy with the basing plans for Scotland, especially given their absence today, but I am not. The plan put forward is to replace Dreghorn, Redford and Craigiehall, the three historic Edinburgh bases, with a new purpose built super-barracks for a multi-role brigade at Kirknewton, a command headquarters to be incorporated into the new formation headquarters at Leuchars, and an expansion of Glencorse barracks near Penicuik.

The basis for the Ministry’s proposal is financial—the sell-off of land for prime residential development to produce attractive capital receipts. A super-barracks will, I am told, be more cost-effective in the long term, saving taxpayers’ money and boosting Treasury funds. It is an understandable and laudable aim, but I am extremely dubious about whether the plan has been properly prepared, or is capable of delivering the savings envisaged.

To date, I have asked almost 100 parliamentary questions to try to understand the financial reasoning behind the decision. Not one answer has given any details of likely costs or possible capital receipts from disposal of the Edinburgh estate. Instead, time and again I am told, “It’s too early,” or “Comprehensive planning is under way,” or “The information is not held in the format requested.” The Minister was

“not able to provide a cost estimate”—[Official Report, 5 September 2011; Vol. 532, c. 91W.]

for the building of the new barracks at Kirknewton. Running costs for the base seem equally unclear. He wrote:

“it is not possible to confirm budgetary requirements or allocations.”—[Official Report, 9 September 2011; Vol. 532, c. 844W.]

How, then, is it possible to do a comparison with the costs of the undoubted modernisation work needed at Dreghorn and Redford? No audit seems to have been carried out to establish the modernisation costs.

The story is not much better on capital receipts. I asked the Ministry what value it had placed on Craigiehall. The answer indicates that no recent valuation of this or the other sites had been carried out. The proposed capital receipts were, I believe, based on valuations done in 2007, when the property boom was at its height. A further report was commissioned and carried out in March last year by GVA Grimleys, but despite tenacious attempts, there seems to be a great reticence to publish any detail from that.

If Craigiehall is to be used as a new business site, I have bad news. The industrial capacity in Newbridge and the, as yet unstarted, international hub development next to the airport are close locations that would be far more desirable. There are also development limitations cased by the listed building status of large parts of Craigiehall and also Redford barracks, which may make the sites difficult to sell. The depressive effect of all of those sites coming on to the market at the same time is likely to limit their value severely. The financial case is, as we say in Scotland, on a bit of a shooglie peg.

It is not just the financial case that is lacking in detail. On an array of important factors there is worrying ambiguity. The Minister cannot tell me what transport infrastructure is needed in and around Kirknewton to allow an Army base to function, but

“comprehensive planning work is now under way”—[Official Report, 18 October 2011; Vol. 533, c. 867W.]

The reply to questions about the effects on schools, housing and health services for Army personnel is always the same: “Comprehensive planning work is now under way.” In fact, that is the reply to almost all my questions about the proposal. Surely comprehensive planning work should have taken place before the decision to close three historic bases and commit to £600 million of new spend.

The Army, too, has its concerns. I have spoken at length with the commanding officer and understand that Glencorse barracks is near capacity. There are serious concerns about the feasibility of moving the Army to a super-barracks, and about the recommendations of the review in general. There is a desire for Leuchars to remain a back-up airfield for Typhoon operations in case of adverse weather conditions in the north of Scotland. The work needed to make the base at Lossiemouth operational, and dates for the completion of that work, are unclear.

There is also strong concern among the civilian population in areas of Edinburgh where Army families are currently based. A move away by the Army would put local shops and schools in jeopardy, as roll numbers would fall significantly. Local businesses would be affected and a tight-knit community would be destroyed. The MOD has indicated that the current service family accommodation in Edinburgh will be kept and used for personnel based at Kirknewton, but it is difficult to see how that will work in practice. I attended a road show about the proposals, at the invitation of the Army Families Federation. The families have been given very limited details about their proposed resettlement, and the uncertainty is understandably causing a great deal of stress.

Particularly worrying is the period between 2014, when Redford and Dreghorn will close, and 2017, when Kirknewton is likely to become operational. The units currently based in Redford and Dreghorn are light infantry and, as such, not the type that would form part of a multi-role brigade, so at some point they will be relocated and other units will need to move in, but it is not clear which base they would operate from.

As I have said, the proposal is also significant for my constituency. The closure of Craigiehall confirmed that, despite a 3,500 increase in Army numbers and a major restructuring exercise currently under way, Scotland will lose its command headquarters, although a welcome senior Army presence will be kept to provide representation and communication with the Scottish Government and others; a two-star officer, to be known as General Officer Scotland, will be based in Scotland with a small support team. Nevertheless, replacing the divisional headquarters with a single support command headquarters will reduce the opportunity for the Army to engage with high-level regional and local partners in Scotland.

The closure of Craigiehall HQ would also have a significant impact on post reductions, which would affect civilians currently employed. In Edinburgh West, 103 civilian roles would be lost in addition to 89 military posts, which would mean the loss of experienced and skilled staff at a time when two further HQs are planned to move into Scotland to Leuchars and Kirknewton. I believe that there are clear efficiency savings to be made in co-locating headquarters at Craigiehall. It would not only work at a command and cost level, but save the experience and skills of those already at Craigiehall.

I think that the current capacity review will reveal that many aspects of the present proposals are simply undeliverable, and that Craigiehall might be best placed for a multiple HQ base. If the case is financial, accurate and up-to-date figures are needed to demonstrate its cost-effectiveness. When accurate figures are available, and not before, a decision can be made on the future of the Army estate in Edinburgh, taking into account all the issues. I urge the Ministry to think again.

15:24

[Hugh Bayley (York Central) (Lab)]

Defence debates in this House are best when Members stick to national security, rather than party political knockabout. I respect the Secretary of State, who I think is a very capable Minister, and wish him well in his new post—but, like my right hon. Friend the Member for East Renfrewshire (Mr Murphy), I regret the party political tone of some of his remarks, and feel that I should briefly respond.

I have been a Member for almost 20 years, and during that time, under Conservative Governments the defence budget has been cut as a proportion of national income, and under Labour Governments it has increased. Under the Major Government, between 1991-92—when I entered the House—and 1997-98, the share of national income, or GDP, spent on defence fell from 4% to 2.5%; under the Blair-Brown Government it rose from 2.5% to 2.7%. In a parliamentary question to the Chief Secretary to the Treasury last week, following the second tranche of redundancies, I asked what proportion of national income is spent on defence, and was told that it is still 2.7%. But the Chief Secretary continued:

“It is impossible to state exactly what percentage of GDP or gross national income will be spent in future years…However, I expect the percentage to remain above the 2% NATO target.”—[Official Report, 25 January 2012; Vol. 539, c. 240W.]

In other words, it will fall, and fall quite significantly.

[Dan Byles]

On those figures, does the hon. Gentleman not accept, however, that the international situation was changeable? We had the end of the cold war and the widespread demand for a peace dividend during the period that he referred to under the Major Government. We then had 9/11 and the wars in Iraq and in Afghanistan during the period that he referred to as the “Blair-Brown” years, whereas we are now out of Iraq and will shortly pull out of Afghanistan. He cannot look at the issue in isolation.

[Hugh Bayley]

The hon. Gentleman makes some fair comments, but the Government have not established that the level of risk facing the country is declining, so they have not made the case in defence and security terms for the reduction in expenditure that they are making.

The United States, the UK, France, Greece and Albania are the only NATO members that spend at or above 2% of their GDP on defence; the other 23 of the 28 NATO allies spend less. The Libya campaign showed that current European spending on defence is not sufficient to conduct an effective military operation against a poorly armed regime distracted by a civilian uprising in a sparsely populated country with only 6 million inhabitants. Within weeks of the start of military operations, European countries were running out of precision-guided missiles and needed to turn to the United States to provide them. We also needed to turn to the United States to provide surveillance aircraft to identify targets and to provide air-to-air refuelling.

All 28 NATO member states voted for the Libya campaign, but less than half participated in it and fewer than one third contributed to strike operations. In June 2011, in a speech in Brussels, the outgoing United States Defence Secretary, Robert Gates, said that

“many of those allies sitting on the sidelines do so not because they do not want to participate, but simply because they cannot. The military capabilities simply aren't there.”

That led Mr Gates, just before he left office, to question the future of NATO, and in the same speech he said:

“If current trends in the decline of European defence capabilities are not halted and reversed, future US political leaders…may not consider the return on America’s investment in NATO worth the cost.”

Robert Gates is not a maverick. He served as Defence Secretary under the Bush presidency and under Obama, and in that speech he articulated views that are frequently expressed by members of the United States Congress and other US speakers at meetings of the NATO Parliament Assembly, which I attend along with the right hon. and learned Member for North East Fife (Sir Menzies Campbell), who leads our delegation. Indeed, a report adopted by the economics and security committee at our most recent meeting in October 2011 stated:

“If anything, Secretary Gates was being diplomatic. Europe’s defence posture has grown woefully weak…It is time for Europe to get serious about this issue.”

In November, in a speech to the Australian Parliament, President Obama declared that the United States was a Pacific power, and said that maintaining a military presence in the Asia-Pacific region was a top priority and would not be affected by United States defence cuts—a point that he re-emphasised earlier this month in a speech at the Pentagon about the US comprehensive defence review.

Those statements from our American allies make it clear to me that we in Europe need to do more than we are currently doing. Although we stay above the NATO target of 2% of GDP spending on defence, our defence cuts in the UK make it harder for us to persuade our European allies of the need for them to do their bit and get their spending up to that target.

In President Obama’s speech at the Pentagon he said:

“the size and the structure of our military and defense budgets have to be driven by a strategy, not the other way around.”

The UK Government need to operate on the same basis. I therefore believe that the defence cuts that the Government have announced should be contingent on the successful implementation, on a Europe-wide basis, of a strategy to increase defence expenditure and make better use of the resources that we already have by eliminating waste and duplication.

The UK-France defence and security co-operation treaty is a step in the right direction. It will allow the shared deployment of aircraft and aircraft carriers and air-to-air refuelling capabilities, and I am sure that as a result capabilities will be provided more cost-effectively than if we did such things alone. The nascent Nordic defence co-operation is another example. But we clearly need more shared assets in Europe. Why are we not buying strategic airlift on a joint basis with allies, as NATO did with the airborne warning and control system, or AWACS—although the UK, of course, did not join that initiative? Why do we not do the same with air-to-air refuelling?

Most of all, we need better co-operation in our defence industries. The armed forces in Europe have more service personnel than the United States, but we are way behind in terms of defence budgets, investment and capabilities.

[Mrs Moon]

One way to resolve the problem of sharing capacity would be to have an agreement with Luxembourg, a land-locked country that has no coastline but two maritime patrol aircraft. Perhaps we could agree to share its maritime patrol capability, as we have none.

[Hugh Bayley]

My hon. Friend has made her point well. I would like us not only to make bilateral agreements with other countries but, far more, to look strategically across Europe at how we should restructure our defence industries to eliminate duplication and produce what we need—common equipment on a common basis. We should acquire major capital items of equipment that will be shared in NATO operations on a common basis.

In the few seconds that I have left, I would like to say a word or two about the local implications of the defence cuts for my constituency and the rest of Yorkshire. The latest figure that I have for the number of regular military personnel based in Yorkshire and the Humber is 14,730; for North Yorkshire the figure is 13,310, and in my constituency of York it is 880. The figures date from 2009, before the general election. If between now and 2015 those figures reduced in proportion with the overall reduction in the numbers of our armed forces—that is, by 8.5% or 9%—one might expect force reductions of about 1,300 across our region, of whom 1,200 would be in North Yorkshire and 70, perhaps, in York itself.

On the day last week when the Under-Secretary of State for Defence, the right hon. Member for South Leicestershire (Mr Robathan), made his written ministerial statement about the second tranche of redundancies, I tabled a number of parliamentary questions asking for these regional numbers at the time of the general election, in December 2011, and in 2015. At business questions last week I asked whether the Leader of the House could make sure that I got answers before this debate. I received a letter from the Minister with responsibility for defence personnel, but it did not contain the figures. I hope that those figures will be provided to me as soon as possible.

15:39

[Mr Edward Leigh (Gainsborough) (Con)]

I believe that the world is a more dangerous place than it has ever been during my time in Parliament. I believe that it is a more dangerous place than it was during the cold war. That was a more stable situation. We have heard about the resurgent and more authoritarian Russia. China is increasingly muscling its way into various parts of the world. Iran will soon be a nuclear power. The Arab spring might throw up more problems than solutions.

As a maritime nation, the Royal Navy always has played and always will play an essential part in defending our freedoms. I do not believe that the Royal Navy is a leftover from the cold war or a replay of second world war convoy systems. It is an essential part of our defence. I am extremely worried about what is happening to the Royal Navy. It will soon be the weakest it has been since the mid-19th century. In 1982, the Royal Navy was only just capable of retaking the Falklands. I have a list of the appalling casualties that we suffered and the number of our ships that were sunk. We just managed it.

Since 1997, our armed forces have been cut by 12% and 24,000 people have been made unemployed. Since 1975, the number of cruisers, destroyers and frigates has been cut by a staggering two thirds. The fleet of minesweepers, which, along with the Americans, will be vital in keeping oil flowing through the strait of Hormuz if Iran makes any moves there, has been cut from 40 vessels in 1975 to 15 today. Those are worrying figures.

We are constantly told that we need larger ships and that we do not need so many. I am not suggesting that we can make direct comparisons with the past or that we should look back to the Royal Navy of 1809, which had a fighting strength of 773 vessels. I remember standing on the deck of a vast American aircraft carrier when I was a member of the Defence Committee and the captain saying, “The ocean is a very large place and I can hide my aircraft carrier.” However, we are faced with enormous problems of piracy and one cannot solve the problems of maritime protection by having just 19 major vessels in the Royal Navy.

Let us consider the threats that we face. I am not saying that they will necessarily come to anything, but they are there and they are real. Let us compare our strength with that of Argentina. We have seven destroyers and it has five. That is not an overwhelming predominance for the Royal Navy. We have a similar number of aircraft carriers, namely none.

[Mr Jenkin]

The importance of aircraft carriers, with their carrier-borne air defence for the fleet and carrier-borne strike capacity, is that one is able to operate away from the home nation. If we fought another Falklands war, it would be all too close to Argentina’s home bases and thousands of miles from ours.

[Mr Leigh]

That is precisely the point that I was going to make next. If there were a war with Iran or Argentina, we would not be fighting it in the channel. In the case of Argentina, we would be fighting it thousands of miles from any shore-based defence systems. I therefore do not believe that the figures alone give an accurate basis from which we can draw comfort.

[Dr Murrison]

It is important to get this matter right in the context of the Falklands, given the activity in Buenos Aires. I accept entirely my hon. Friend’s point about the number of platforms. However, does he accept that the capability of the Royal Navy and the Royal Air Force is immense compared with that of Argentina? In many respects, our potential ability to project force is much greater than it was in 1982 for that reason.

[Mr Leigh]

I accept some of what my hon. Friend says. However, I pray in aid the recent United Kingdom National Defence Association report, “Inconvenient Truths”, which was written by former defence chiefs. It said:

“Our assessment is that current force levels are inadequate to hold off even a small-size invasion”.

Admiral Sir Sandy Woodward wrote in the Daily Mail:

“The truth is we couldn't defend anything further than the other side of the Channel”.

Air Commodore Andrew Lambert was quoted in The Guardian as saying that the

“British public is not aware how thin the ice is…or how bad things could get”

and that the Falkland Islands are

“ripe for the picking.”

I am not saying that I want this to happen or that it will happen, but I am afraid that we in this House must occasionally sound warnings—that is our duty.

[The Parliamentary Under-Secretary of State for Defence (Mr Gerald Howarth)]

My hon. Friend raises concerns that are widespread around the country, particularly in the light of the sabre-rattling by Argentina. However, all the advice that we have received says that the Argentines have neither the capability nor the intention to repeat the folly of 1982 and that the military deterrent we have in place is fully up to the task. I assure my hon. Friend and the House that, in this 30th anniversary year, all of us, as Ministers, are much seized of the matter.

[Mr Leigh]

I am grateful to the Minister. We pay tribute to him and to his colleagues in the Ministry of Defence for the sterling work that they do and the way in which they have defended the defence budget.

The Secretary of State said that part of our strategic defence is to have a balanced budget. We all understand that. However, he is using precisely the arguments that were used time and again in the 1930s when people warned of our military weakness and successive Chancellors of the Exchequer argued that we were well defended, rubbished the figures that were being given to them about our military weakness, and said that the most important thing was that the country had a balanced budget.

We do not blame our right hon. and hon. Friends the Ministers and the Department of State for this. We know that they are fighting their corner; the previous Secretary of State put up a tremendous fight. However, there must be some rebalancing. As my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot) said, we are now spending more on winter fuel allowance than on the entire Foreign Office budget. We must have a reordering of strategic defence capabilities, because there is nothing more important than defence. In 1980, the Army had 160,000 soldiers. That number is set to fall to 100,000, and the Government have announced that they want the total strength of the Army to go down to 84,000 by 2020. The Army will have been cut by 12% since 1997. Air Force personnel are being cut from 90,000 to 40,000. Those figures are deeply worrying.

The previous Government said that 25,000 soldiers, 8,000 sailors and 17,000 airmen were surplus to requirements precisely at the moment when we were fighting two major wars. Sir Richard Dannatt, the former head of the Army, has said that we are facing a situation whereby the Army is massively overstretched and many soldiers are having only one year between operations, with much of that time spent away from home. We must appreciate that we live in an increasingly dangerous world. We must, as a House, be prepared to make tough and difficult decisions and be determined to reorder our priorities and say that our defence forces are essential for all our futures.

I was recently struck by a passage in Martin Gilbert’s book, “Winston Churchill: The Wilderness Years”, that quotes Churchill on the night that Eden resigned:

“From midnight to dawn, I lay on my bed, consumed by emotions of sorrow and fear. There seemed one strong young figure standing up against long, dismal, drawling tides of drift and surrender, of wrong measurements and feeble impulses. Now he was gone. I watched the daylight slowly creep in through the windows and saw before me in mental gaze the vision of Death.”

15:49

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

I am not quite sure how to follow that quotation, so I shall confine myself to saying how moving those remarks those were.

I have to confess that I had not intended to speak today, but Members will understand why, in the circumstances, I thought I should stress the importance that my party continues to attach to retaining and renewing the UK’s independent nuclear deterrent.

I say at the outset that the nuclear deterrent should primarily and ultimately be a matter of national and global security, not of employment. If we could genuinely be confident that the UK unilaterally disarming would make the world safer for future generations of UK citizens, and would make the almost unimaginable horror and destruction of nuclear war less likely, that should of course come ahead even of the thousands of jobs that renewing the deterrent would support in my constituency and the many thousands more that it would support across the country in the supply chain. However, my simple point is that unilaterally disarming would do no such thing.

If we were to take the view that deciding now not to renew would make the UK safer, we would have to be able to make decisions about the world as we thought it would look in 30 or 40 years’ time. We would also have to believe that the unilateral gesture would pave the way for a change in behaviour by other regimes. On the latter point, disarming would show a fundamental misunderstanding of the motivation of other regimes and groups that seek, or may in the future seek, nuclear capability. They do that to increase their capacity for aggression, not primarily because they fear the UK’s independent deterrent. On the former point, the pace of change has been so great in the past decade that we simply cannot possibly say with confidence that a deterrent will not be needed decades hence.

[Thomas Docherty]

My hon. Friend is demonstrating that he is probably the most knowledgeable Member on the issue of the deterrent. [Interruption.] I can see that the hon. Member for New Forest East (Dr Lewis) will get me afterwards.

Has my hon. Friend made any assessment of the Liberal Democrats’ current review of the deterrent and what the pitfalls might be?

[John Woodcock]

That is a very important point with which I shall deal at some length in a moment. Suffice it to say for the moment that it is not simply the Liberal Democrats’ review; it is the Government’s review. They have commissioned it. The Conservative Under-Secretary of State for Defence, the hon. Member for Mid Worcestershire (Peter Luff), looks like he is in two minds about it, but his own party’s former Defence Secretary sanctioned and announced it. The right hon. Member for North Somerset (Dr Fox), was clearly not booted out because of that particular misdemeanour.

We have to ask whether it is right for the UK to maintain its independent deterrent. It strikes me as strange that it is often the very people who rail against the hegemony of the United States of America in world affairs who are prepared to sit quietly under its nuclear umbrella and suggest that the UK should not take responsibility for its own defence. I do not include my right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown) in that comment. I am glad to see him back in his place for my speech—I think.

We should redouble our efforts to tackle the proliferation of nuclear weapons. I am proud that the previous Labour Government were explicit in setting the ultimate target of zero nuclear weapons—of a world free from the threat of nuclear weapons—but we should not accept the argument that renewal is an act of proliferation. It is not. In fact, non-renewal would be an act of unilateral disarmament. It is right that our party has left those days behind.

Given the magnitude of destruction that the use of nuclear weapons would inflict, nuclear weapons are rightly an uncomfortable issue for all hon. Members and the country, but they are a deterrent. Our holding of nuclear capability is designed to make a nuclear war less not more likely. So far, that has been successful.

[Bob Stewart]

To slightly corrupt the saying, if we wish to avoid war, we should prepare for it and have the means to stop it. I fully support what the hon. Gentleman says about deterrence.

[John Woodcock]

The hon. Gentleman is quite right—he put it far more succinctly than I did and I am grateful to him for doing so.

I want to stress in the concluding part of my speech that the current Administration are creating a level of risk around the deterrent. That should be a matter of concern to Members on both sides of the House. As an aside, I hope the Minister who winds up could address the matter that was raised this week—

[Alison Seabeck (Plymouth, Moor View) (Lab)]

The Minister does not wind up.

[John Woodcock]

Oh, there are no wind-ups. Perhaps the Minister could find time to intervene in the short time remaining to make something clear. There are significant cuts to the MOD police. Do they mean that there are plans to reduce the MOD police presence at Faslane or Coulport? Would the Minister like to intervene?

[The Parliamentary Under-Secretary of State for Defence (Peter Luff)]

indicated dissent.

[John Woodcock]

Okay. If he wants to write and make the position clear at a later stage, that is absolutely fine.

[Peter Luff]

indicated assent.

[John Woodcock]

On the risk that has been created around renewal, the alternatives to Trident review, to which my right hon. Friend the Member for Newcastle upon Tyne East referred, will be led by the Minister for the Armed Forces—it is a shame he cannot be here for the debate. Essentially, the review uses Government resources actively to explore the idea of adapting Astute class submarines for nuclear capability that falls far short of being a deterrent. That could be a cause of increased proliferation and could increase the risk of confusion. If a cruise missile is launched from a submarine at a point of war and the aggressor nation does not know whether it is nuclear or conventionally tipped, the prospects of escalation and horrible consequences increase. The Government have put that in train and we await the review.

In conclusion, the delay in the proposed in-service date of the successor to the deterrent is—it must be stressed—driven not by national security or primarily industrial concerns, but by a political fudge to delay the vote until the next Parliament. That creates increased costs for taxpayers because the overall cost of renewing our deterrent will increase. In addition, it risks stretching the life of the current Vanguard class submarine to the limit of safe operation. Pressure on the delivery timetable of the successor has been increased by putting political deals above the national interest.

15:59

[Mr James Gray (North Wiltshire) (Con)]

If I may be forgiven, I shall not dwell on the welcome recommitment made by the hon. Member for Barrow and Furness (John Woodcock) to the independent nuclear deterrent, which my hon. Friend the Member for New Forest East (Dr Lewis) will have very much welcomed, if not the right hon. Member for Newcastle upon Tyne East (Mr Brown)—who, I am sure the hon. Gentleman will be pleased to hear, none the less looked perfectly benign during his speech. Rather, I would like to focus on more general topics.

I was very struck, and impressed, by the speech of my right hon. Friend the Secretary of State for Defence. He has been dealt an extraordinarily difficult hand, in the sense that he came into government, discovered a £38 billion black hole in the defence budget and was then required by our right hon. Friends the Prime Minister and the Chancellor of the Exchequer to make defence’s contribution towards balancing the books. However, the purpose of today’s debate is not to consider the great national issues of balancing the books and dealing with the deficit left to us by the previous Government. That is a matter for other times and other people, in a higher position than mine. Rather, our position in this debate ought to be that which was exemplified by my hon. Friend the Member for Gainsborough (Mr Leigh): to consider whether what we are currently doing is the right thing for the defence of the realm. If it is not, the Chancellor of the Exchequer, the Prime Minister and others at a higher pay grade than me will have to explain why they are doing the wrong thing for the defence of the realm. However, we in this debate should cast to one side economic constraints—I hope that I am not being naive or difficult in doing that—and instead focus on what we should be doing for the defence of the realm.

I had the good fortune of being asked to serve on our policy review group before the last election. I was the MP on the group, which was chaired by the noble Baroness Neville-Jones and produced this weighty document, “An Unquiet World: Submission to the Shadow Cabinet”, on which our manifesto was subsequently based. She says on page 8:

“Capability…needs to be reassessed. An incoming Conservative government should conduct a Defence Review not with the aim of inflicting further cuts, but of ensuring that our armed forces have been asked to do the right job, are properly equipped and trained and are employed on the right terms and conditions.”

Elsewhere in the report she says:

“Defence Reviews tend to strike dread into the hearts of those involved or affected,”

because of the likelihood of cuts, although this is

“not a necessary outcome and not one this Policy Group would wish to see.”

In other words, the policy group on which I served, and which informed the manifesto of my party, took the view that there should be a defence review, but that it should not necessarily involve defence cuts.

The reality, of course, is what we have seen since, which the Secretary of State laid out plainly in his speech. Indeed, it rather reminded me of a speech by a chairman of a multinational company explaining to shareholders that things were not all that great and that he would have to make some cuts to the company, but that he very much hoped that dividends would once again start to be paid in the years to come. It was an accountant’s speech, rather than a defence speech. I do not blame him for that: that is his job. None the less, I have the great luxury of being a Back Bencher and being the chairman of the all-party group on the armed forces. I therefore feel it right to speak up for the armed forces, even if that were to upset those on my own Front Bench, which is not something that I would ever seek to do, as I know my hon. Friend the Minister would agree.

The first thing to say is that the only certainty in the defence world is uncertainty. We never know what is going to happen next. Who would have predicted the Falklands? Who would have predicted Saddam’s invasion of Kuwait? Who would have predicted 9/11 or 7/7? Who would have thought that we would simultaneously be fighting two wars, as we were recently in Afghanistan and Iraq? Who would have predicted Libya, Kosovo, the Balkans or Sierra Leone? None of them was even remotely predictable—nor, of course, was the second world war or the first world war, which was sparked off by the assassination of the Archduke Franz Ferdinand in Sarajevo. Unpredictability is the absolutely highest certainty in defence.

Against that background of uncertainty, let us think about what we are facing today. Who knows what Iran will do? We could see further activity from the Iranians within weeks—there is a threat to block the straits of Hormuz. Israel is threatening pre-emptive—nuclear, potentially—action against them. The whole Palestinian question remains unanswered, and Syria is in turmoil. We have no idea what is going to happen in Egypt, despite the lifting of the state of emergency, and Pakistan is on the brink of collapse. We do not really know what is going on in Libya; there is certainly a bit of a vacuum there. The situation in Afghanistan is uncertain, and Iraq is close to meltdown. We are living in an incredibly dangerous and uncertain world, and we should be preparing our defences for that uncertainty.

So what are we actually doing? The hon. Member for York Central (Hugh Bayley) was right to say that Labour Governments tend to spend more on defence than Conservative ones; that is historically accurate. I very much regret to say that my great party is announcing an Army that will be the smallest since the Crimean war. Some define an army as a body of 100,000 soldiers. It is therefore arguable, depending on how one uses the word, that in the near future, Great Britain will no longer have an army; it will have only a defence force. As a Back Bencher who does not labour under the great considerations of state, I am able to say to the House that that would be a disgraceful situation, given the uncertainty that we are facing. The Royal Air Force is being cut in half; the Navy is being emasculated. It is my view that this country no longer has the capability to do the things that we have always done.

Why should that be the case? I want to quote a previous Prime Minister, who shall remain nameless. He said to me, “I went to see the teachers, and they told me to get lost. I went to see the doctors and nurses, and they told me to get lost. Then I went to see the generals. They saluted, turned to the right and marched off, saying, ‘Whatever you say, Prime Minister. I will happily carry that out.’” That is precisely what is happening now. Whatever task is put before our armed forces, they will find a way to do it—they are a can-do organisation—but should we be asking them to do it?

In the 15 years that I have been in this place, we have talked, in these dusty Thursday afternoon debates, about overstretch and about the fact that the armed forces were unable to carry out their duties. We blamed the Labour Government for all that, but I now find myself speaking from the Government Back Benches and making precisely the same arguments as those I have made over the past 15 years. I do not believe, given the cuts that we are now facing, that we will be able to carry out our moral duty to lead the world and to intervene for good around the world. We are hampering ourselves in that regard.

For that reason, I believe that defence spending and budgets should be separate from those of schools and hospitals and from other parts of the national budget. We have a moral duty to do certain things in the world, and we should not allow our economic situation to prevent us from doing them. I regret to have to say that I am at odds with my own party on this great subject. We should find a way to maintain our defence spending at a level at which we, as a nation, can punch above our weight.

16:07

[Thomas Docherty (Dunfermline and West Fife) (Lab)]

It is an absolute pleasure to take part in the debate, and I commend our Select Committee Chairman, the right hon. Member for North East Hampshire (Mr Arbuthnot), for his work on securing it. It is also an absolute pleasure to follow the hon. Member for North Wiltshire (Mr Gray). I found myself agreeing with pretty much everything that he said, although I would suggest that many people did see the second world war coming. That was his only example that perhaps fell down slightly.

What I find amazing about the Defence Committee’s work is not only the bipartisanship under which it operates under the chairmanship of the right hon. Member for North East Hampshire but the breadth of knowledge of its members. We have seen that illustrated again today in the contributions from the right hon. Gentleman, from my hon. Friend the Member for Bridgend (Mrs Moon) and from others. We produced a report following our forensic investigation into the strategic defence and security review, and our conclusions were clear and damning. We concluded that the SDSR was a Treasury-driven budget settlement that would have dreadful consequences for the defence of the realm; it would be dreadful for the morale of service personnel, and for UK manufacturing.

The decision on carrier strike capability was rushed and bizarre. On the question of the air frame, it is perfectly reasonable for the Government to consider whether the F35-B was the correct choice in the context of Future Force 2020. After all, the United States had placed the B variant on probation, and there were technical concerns about the lift. My understanding is that, at that time, only the United Kingdom and the United States had signed up to take an order. It is also valid to argue that we should consider the question of interoperability with our allies, as well as the value for money of the air frame to be chosen. Those are all reasonable elements that a sensible Government should examine.

Unfortunately, the Government did not bother to take the time to understand the consequences of the decision to switch variants. For example, the F-35C cannot land on the French carrier, thus defeating the argument of interoperability, particularly given the Anglo-French alliance. The cost of the F-35—B and C—is still not known, and that is a concern shared by the Defence Committee and our counterparts in the United States Congress, the Pentagon, the Canadians, the Australians and every other country that is purchasing either the F-35B or C.

Lastly, many of us do not have confidence that, most crucially, the F-35C will be able to land on the Queen Elizabeth class carrier. It would be a good idea if it were able to come down safely to our own carrier, although perhaps I am a bit of a traditionalist.

[Mrs Moon]

Is the hon. Gentleman aware that Admiral Sir Trevor Soar, Commander-in-Chief, Fleet, said in a speech to industrialists in the US that, due to the US defence cuts, the chance of us being able to buy the joint strike fighter are reducing, as it will not be delivered on time? As alternatives, we will have to look at the F-18 from the Americans and the Rafale from the French.

[Thomas Docherty]

My hon. Friend is right. The Times paints a disturbing picture today. We on the Defence Committee and the wider defence community have for some time had serious concerns about the capability of Lockheed Martin to fulfil the aspirations set out. When the Minister appeared before the Defence Committee, it was disturbing that he adopted a relatively blasé approach to the problem, in direct contradiction to the postures of Secretary Gates, who has already been name-checked, and Secretary Panetta, who have been turning the screws on Lockheed Martin. As the decision has been rushed, we might have to go back and reverse it, and go to the F-35B, which would be not only embarrassing but a vast waste of money. We have only two other options: as my hon. Friend says, the F-18 Super Hornet, a proven air frame, of which the Australians have just ordered additional quantities, and for which Secretary Panetta has announced an additional order, or the French variant, which, to be fair, would at least solve the Charles de Gaulle issue.

On the carriers themselves, it is no secret that I have absolute scorn for the decision that was taken to take the Invincible class out of service. In fact, despite the claim of a minority on the Government Benches that the Libyan operation justifies the decision, the reverse is true, as it demonstrates absolutely the need for carrier capability throughout the decade.

[Mr Gerald Howarth]

indicated dissent.

[Thomas Docherty]

The Minister shakes his head. Perhaps it would help him if I were to quote the commander of the Italian navy, Rear Admiral Treu, who said:

“Libya is really showing that these aircraft”

the Harrier—

“and their carrier are needed. They are five minutes from the operational zone, which reduces fuel consumption and wear and tear. With less reliance on in-flight refuelling, it is easier to do dynamic tasking and shift operation, and they cost less to operate than Tornados and Eurofighters”.

I have the greatest respect for the Minister and I know he cares passionately about the future of aviation. He has been a strong voice in the Government—dare I say, one of the few strong voices for the defence industry in the Government—but what does he know that our First Sea Lord, our commanders in the field and our allies do not?

[Mr Gerald Howarth]

I am most grateful to the hon. Gentleman for his kind tribute, although I am not sure whether it will be career enhancing. Nevertheless I will take it in the spirit in which it was given. Of course carriers would have been advantageous, but they were not necessary in the circumstances of Libya. The Government are going ahead with the Queen Elizabeth and Prince of Wales carriers precisely because we understand the need for carrier strike. We had endless debates about that in the SDSR and we came to that conclusion, which is the right one in my view. In Libya, however, we did not need carriers; HMS Ocean did a great job for the Army Air Corps Apaches.

[Thomas Docherty]

I am most grateful to the Minister. He is obviously very clever, because he has led me straight on to my next point, which is about the replacement for the Invincible class, the Queen Elizabeth class aircraft carrier. He perhaps forgot to mention that, even some time after 2020, when we eventually get a functioning aircraft carrier, it will only be part-time. We will only be able to operate it for perhaps 150 days of the year, so we must be really hopeful that those who seek to attack us only do it on the five or six months a year when we are able to respond. It reminds me of Asterix the Gaul and the scene where he comes to Britain and the British have gone home at 5 o’clock to have their tea. That is pretty much the kind of part-time Navy that we will have if the Minister gets his way.

[Mr Ellwood]

I was hoping to resist the temptation to intervene, but I want to back up my hon. Friend the Minister and put in perspective the hon. Gentleman’s argument. He is trying to get into the tactics of how a battle is operated. What does he want to fly off these aircraft carriers? I am afraid his Government got rid of the Sea Harriers, so he would not be able to use the Storm Shadow, the Brimstone or any of the guns, because the Harriers did not exist—[Interruption.]

[Thomas Docherty]

I am going to continue with my speech, because it is my time that I am sacrificing. The hon. Gentleman tries to make it a false choice, as he always does, but he was at the heart of the decision making. Let us not forget that he was the Parliamentary Private Secretary to the former Secretary of State. It was his bright idea, I suspect, to get rid of the carrier, because the other Ministers are all far too clever to do that.

The choice between Typhoon, Tornado and Harrier is a false one. I have never accepted and the Defence Committee has never accepted the false choice made by the current Government, following the Treasury-driven cuts. We will see price gouging and there will be a significant rise in the cost of the Queen Elizabeth class carrier, not because of the Aircraft Carrier Alliance—I have some fantastic workers in my constituency, whom the Ministers and others have been to see, and they are delivering in Plymouth, in the north-east, on the Clyde and over at Birkenhead—but because of the rushed decision. We will have to buy cats and traps off-the-shelf from the Americans at a price-gouged cost of up to £2 billion because due diligence was not done on whether it would work. The prices are going up because of the short-term decisions. We have no idea how we will refuel the aircraft because of the decision to switch from the short take off, vertical landing—or STOVL—variant to carriers and that will also involve significant costs.

In the last minute of my time, I want briefly to talk about Scotland. The Scottish National party is not here today because its Members have gone into hiding. The SNP defence policy unravelled last week within hours of its being unveiled. Sheer anger was felt by communities around Scotland at the betrayal by that party, which, after years of claiming that Scotland did not receive what it called its fair share of spending, has admitted that it would spend even less on defence. After campaigning, as the SNP claimed, to save RAF Leuchars, it has announced that it would close RAF Leuchars and RAF Kinloss. In a separate Scotland, there would be no Rosyth dockyard and no Clyde shipbuilding. Companies would be pulling out of Scotland. There are also serious concerns for the rest of the United Kingdom. How would we deliver the deterrent? How would we secure the high north? How would the military be put together?

I hope that one of the Committees of the House will find an opportunity in the months ahead to scrutinise those very important issues.

16:15

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

I declare my interest as a member of the reserve forces.

I congratulate the Backbench Business Committee on introducing this important debate and my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot) and his Committee on their timely report, published this week. I read it with great interest and if I have any criticism of it I would have to start with the fact that it perhaps does not sufficiently recognise two rigorous and well-regarded studies, the Levene report and Bernard Gray’s report, which set the scene for many of the points that it raises. In May 2010, of course, the coalition Government inherited the extremely difficult task of bringing some order to a chaotic defence budget.

The Gray report was leaked to the electorate before the general election, so voters such as those in my constituency, which has a large defence interest, had the benefit of seeing it, as did I. The previous Government might well have tried to delay the publication of the report because the word “grotesque” reflected some of the real horrors in Defence Equipment and Support that were unearthed in the dying days of Labour’s 13-year stewardship. Bernard Gray told us that the MOD was running a “substantially overheated equipment programme” and that the sclerotic Department was hampering our ability to conduct difficult current operations. He went on to say:

“The problems, and the sums of money involved, have almost lost their power to shock, so endemic is the issue.”

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

But do I not remember the hon. Gentleman arguing from the Front Bench for more ships, larger armies and more aircraft?

[Dr Murrison]

The hon. Gentleman will also remember that Bernard Gray was a special adviser to his party. In that context it is quite important to note that the report was produced by a supporter not of the Conservative party but of his party.

The gap between the programme and the budget in May 2010 was a truly grotesque £38 billion. Also grotesque is the disarray over how to deal with the crisis among those who masterminded it. We heard examples of that today from the shadow Defence Secretary. He says he supports only £5 billion of Government cuts, but the shadow Chancellor says that the Labour party would keep all the remedial spending reductions that the Government are making. The figure of £5 billion is interesting because the shadow Defence Secretary also said today that it would be invidious in advance of a general election to try to work out what the requirement would be in personnel and equipment. It is therefore difficult to work out how he came up with the £5 billion figure, even assuming it is correct. The isolation of the Opposition is increasingly apparent as even the United States reins in its defence spending to deal not with an incoherent defence budget but with a crippling federal budget deficit.

[Thomas Docherty]

I think I am right in saying that the US is still increasing its defence spending, not cutting it. Is that correct?

[Dr Murrison]

No, I do not think it is correct. America has made it clear that over the spending period it will have to reduce its defence spending.

[Thomas Docherty]

Slowly.

[Dr Murrison]

Well, the rate will decline—of course it will.

We gained some insight into how the disconnect between programmes and the ability to pay for them arose last summer when Lord Levene delivered his verdict on the MOD. His revelations dovetailed disquietingly well with Gray’s. He found a “bloated top-level defence board” supervising a

“department with overly bureaucratic management structures, dominated by committees leading to indecisiveness and a lack of responsibility.”

Last year, the armed forces covenant was written into law for the first time, as the Prime Minister said it would be. The covenant is not just about the compact between troops and the public. It also concerns the deal between troops and the high command. Those in charge betray the covenant if they allow the kind of shoddy, top-level management evidenced by both Gray and Levene. However, we still have nearly 500 one-star officers and above—a whole battalion of senior officers on packages well in excess of £100,000. Defence Medical Services is a good case in point. To oversee the care of a patient population less than half the size of Wiltshire we require one three-star, five two-star and 15 one-star officers who serve not as doctors, dentists or nurses but as administrators. Our top medic in Afghanistan is not among them—he is just a colonel. I commend the Government for the remedial measures announced before Christmas to reduce the number of starred appointments, both uniformed and civilian.

More generally, I note that although there here have been and will continue to be compulsory redundancies, the package is so reasonable that there has been disappointment among many of those not selected, as there was during previous rounds. From experience, I bear testament to that.

It is of course reasonable to flex personnel from one trade to another—a contention, I think, of paragraphs 67 to 70 of this week’s Defence Committee report—but the majority of pinch-point trades are so specific by rank or extent of retraining necessary that it would actually be quite difficult to do so. Flexible though our young people are, we simply cannot ask an infantryman to become an Intelligence Corps linguist, a pharmacist at the rank of captain or a Cat. A nuclear watchkeeper.

In our collective defence, NATO remains paramount. However, I share widespread concern that we are moving towards a two-tier alliance, with some players benefiting from the cover but not paying the premium. At next week’s meeting of Defence Ministers in Brussels, will the Defence Secretary continue to press our allies to meet their proper financial responsibilities? Present at the meeting will be those who press for an increasing EU defence identity as part of the security and defence policy. Naturally, that has nothing to do with defence, which only the UK and France come close to funding properly.

The latest turn of the screw comes from a European Parliament resolution of 19 February 2009, which proposes something called synchronised armed forces Europe. SAFE is a beguiling but deeply ironic acronym. Under SAFE, alarmingly, British servicemen would owe allegiance to the supranational European Union. One of its cheerleaders, the German Foreign Minister, Guido Westerwelle, told the Munich security conference in February 2010:

“The long-term goal is the establishment of a European army under full parliamentary control.”

Of course, that has nothing to do with improving our collective security; instead, it draws from a hubristic, maladroit pan-European political project that has brought us to the brink of economic catastrophe. The immediate concern about SAFE is that it would quite deliberately remove the capability of the two European nation states still able to act independently to project force worldwide on their own, or with partners of their choosing, in pursuit of the national interest.

[Jeremy Lefroy (Stafford) (Con)]

Does my hon. Friend agree that it is somewhat ironic that those calling for a European army and united European defence are the very people who refuse to pay up for it in their own country?

[Dr Murrison]

My hon. Friend is absolutely correct. It may not be by chance that the Germans are chief among those who wish to shelter under a European defence force, because Germany, of all our allies and friends, is the country one can most easily identify as a major economy that does not pay its way in terms of our collective security, which it so obviously enjoys. When the Minister is in Brussels, I very much hope that he will do everything he can to put pressure on the Germans in particular to make a fuller contribution to our collective defence; but it has to be through NATO, not through the European Union. The lesson of the past few years and the difficulty with the European Union in respect of our economic position—the greatest existential threat the UK faces at the moment—is that we cannot rely on Europe for our security. Our cornerstone has always been NATO and it will continue to be.

[Mr Gerald Howarth]

I assure my hon. Friend that whenever I represent Her Majesty’s Government in Brussels I clearly make the point that NATO is a cornerstone of our defence and that other nations should jolly well divvy up in their own defence.

[Dr Murrison]

I thank the Minister. Recent activity in the south Atlantic has shown us that the threat from a Government playing to a national gallery has to be addressed.

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. The hon. Gentleman’s time is up.

[Lyn Brown (West Ham) (Lab)]

On a point of order, Mr Deputy Speaker. I have informed the office of the hon. Member for Harrow East (Bob Blackman) that I intend to raise this point of order. This morning at business questions, the hon. Gentleman told the House that Ken Livingstone intends to overturn the ban on drinking alcohol on public transport in London. That is simply untrue; Ken Livingstone will not overturn the ban on drinking alcohol on public transport. I wonder, Mr Deputy Speaker, whether you have had any indication whatsoever that the hon. Member for Harrow East intends to come to the Chamber to correct the record.

[Mr Deputy Speaker (Mr Nigel Evans)]

I thank the hon. Lady for notice of her point of order, and for contacting the Member’s office. Right hon. and hon. Members are responsible for their own comments but should make every effort to ensure that they are accurate, and I am absolutely certain that the attentive Whip on the Treasury Bench will bring the point of order to the Member’s attention.

16:30

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

The greatest damage to our nation over the past 10 years has not been done by the enemy: it has been done by ourselves. And it has not been done, contrary to what we often believe, by what we have not done. It is not the result of the money we failed to raise, the equipment we failed to purchase or the actions we failed to take. The damage that we have inflicted on ourselves comes from our decisions to get involved in theatres such as Iraq, and Helmand in Afghanistan.

The gap, the fundamental problem, with the SDSR—it was true of John Nott’s review in 1982 and Lord Robertson’s review in 1998 and it is true of our review today—is a gap of strategy. It is a gap of thought. We are spending over £30 billion a year on a military without developing the policy and strategic capability to decide where we are prepared to be involved, and what, fundamentally, our national interests should be. Our national interest is dependent, above all, on two things: an understanding of what our priorities are and how to match our resources to those priorities, and an understanding of our limits—what we cannot do.

What is striking about Lord Robertson’s report is that there he is, in 1998, making confident statements about Britain’s future and the risks it faces—confident statements about weapons of mass destruction and terrorism—but the proof of the pudding was in the eating. We then launched ourselves into Iraq and Helmand, and in doing so took on issues that did not match our national interest.

What is the solution to that problem? The solution, first, is to understand that our model of policy making is at fault. The military, rightly, have a very traditional view of policy making. They imagine that politicians define the national interest, the Foreign Office creates the policy framework and the generals advise and then implement the policy—perhaps giving operational advice on how to implement that strategy. The reality is, of course, quite different. The world has changed. We need to recognise that; the military need to recognise that; the SDSR needs recognise that. The reality is that although in constitutional theory it is the politicians who make the decision and the Foreign Office that provides the policy framework, in practice the strength, the authority and the charisma of the senior military is higher today than it has been at any time in British or American history.

To see that, one needs to look only at the experience of President Obama dealing with General McChrystal in 2009. What, in effect, happened is that McChrystal issued a report in 2009, saying he needs 40,000 more troops. The President of the United States attempted to respond. He went into a nine-week consultation process, at the end of which, entirely predictably, he could do only exactly what his General requested, but a little bit less—give him 35,000 instead of 40,000. Yet the assessment was disastrous. In the small print, General McChrystal says, “I need 40,000 troops but my strategy will never work unless the Afghan Government sort their act out. And by the way, I, General McChrystal, am not responsible for sorting out the Afghan Government; that will be done by somebody else. It will be done by the State Department. It will be done by USAID.” Yet nobody appears to be able in the system to challenge him. Why not? Although theoretically the politicians have the decisive ability and the policy is owned by someone else, nobody is going to face down a man with a row of medals on his chest who has served six years on the ground in Iraq and Afghanistan and who says, “This is what I need.” No Democrat President and, I would suggest, no politician in Britain today would have the authority and confidence to disagree with such a man.

What is the solution to that problem? It is that we spend more money and invest far more in a policy capacity whose primary function is to keep us out of wars—to make it more difficult for us to engage in disastrous and costly adventures of the sort we have seen in the past decade. That means, above all, investing in the Foreign Office, which needs to remember that its function is fundamentally policy and politics. It is about understanding exactly what is happening in a particular country, so that if a Prime Minister were to suggest, for example, that he wished to invade Iraq, we would not have the situation we had last time in which not a single senior serving diplomat in the Foreign Office in London disagreed in any way with the Prime Minister’s statement. That happened because we did not know anything; we had not invested in knowing anything. We did not have diplomats on the ground and our intelligence assets were very limited.

The military imagine, quite rightly, that they exist in a context in which other people will disagree with them. They feel embattled and that they have to challenge civilians—that they have to thump the table and demand things. They assume that somehow Prime Ministers or diplomats will push back against them, but that push-back does not happen. We could help not only by having more political focus and more diplomats and embassies focused precisely on these issues, but by insisting that every batch of young diplomats has at least one or two members of the foreign service who are posted to the military for one or two years at the beginning of their careers, not posted to staff college at the age of 40. They should be sent on the equivalent of a gap-year commission or national service, so that we begin to redevelop what we had instinctively in the 1950s, ’60s and ’70s, which is civilians who understand both the strengths and the weaknesses of the military.

The military in the meantime need to understand that that context does not yet exist and that they cannot expect the Foreign Office to have the confidence or the resources to push back against them. General McChrystal, to return to the less controversial ground of the United States, should be producing reports saying not, “I need 40,000 troops to win,” but, “Unless somebody sorts out the Afghan Government, and I see no evidence that anybody’s going to do that, there’s no point giving me 40,000 troops because I’m not going to be able to win.” In other words, in the absence of a real civilian check, the military are going to have to provide that check themselves.

Why is that relevant to the strategic defence review? Without that form of analysis and intelligence and policy work, we will not have a definition of our national interest. Without a definition of our national interest, we cannot have a strategy. Without a strategy, there is no point having a strategic defence review.

16:38

[Jeremy Lefroy (Stafford) (Con)]

It is a great pleasure to follow my hon. Friend the Member for Penrith and The Border (Rory Stewart), to whom I listened with great interest because he has such vast experience in these matters.

Before I had the honour to be elected to this House, I was involved with others in setting up a business in Sierra Leone. We were able to do that only because the British Army had been involved in bringing stability and peace to that country, and I give credit to those in the previous Government who made the decision to get involved, and to all those who took part in the operation. It is clear that the conditions prevailing in Sierra Leone today were made possible only by British action.

In setting up a business in that country, it was great to be able to offer jobs to former child soldiers, who could then, instead of terrorising their neighbourhoods, earn a living. Is not one of the great benefits that the British armed forces are able to bring, as a result of the intervention in Sierra Leone, that experience of training that enables a country to live at peace, and enables people who were involved in murder to start to earn a living and look after their families?

I want to concentrate my remarks on the connection of our armed forces with their local communities—with the towns, cities and counties in which they are based. Despite the major changes that the SDSR has brought about, and will continue to bring about, these connections must be maintained and strengthened. Never was that brought home to me more clearly than in two recent homecoming parades through my town of Stafford by the Queen’s Royal Lancers and the 3rd Mercians, the Staffords, on their return from their tours of Afghanistan in the last 12 months or so. Both those regiments have strong connections with Staffordshire, and many people from the county and the city of Stoke-on-Trent serve in them. They paraded through many other towns in the area—I see my hon. Friend the Member for Lichfield (Michael Fabricant) nodding in agreement. The people of Stafford turned out in great numbers for those parades, and showed just how much they respect the service and sacrifice of the men and women of our armed forces.

There are many ways to strengthen the bonds with communities, and I want to touch on just three. The first is to integrate local bases more into the community—while respecting, of course, security considerations. In Stafford, we are fortunate to be the home of 22 Signal Regiment and part of the tactical supply wing of the Royal Air Force, and we eagerly anticipate the coming of two more signal regiments from Germany from 2015. The people of Stafford recognise the great benefits that that will bring to our town: first, the coming of more servicemen and women and their families, who will receive a very warm welcome; secondly, the expansion of schools to meet the needs of their children; and thirdly, the prospect that those skilled men and women will wish to stay in the area when they retire from the armed forces and contribute to our emerging ICT industry and others. There are other opportunities for joint working too: shared sports facilities, advanced skills training, housing and health. We must never forget that the prime duty of our armed forces is the security of the United Kingdom, but no small part of the stability of the UK is the fact that our armed forces are seen as part of the communities that they serve.

Secondly, there is the role of our reserve forces, and I pay tribute to the number of right hon. and hon. Members of this House who serve, many of whom are here today. I also pay tribute to the work of my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot) and his team for the vital work that they have done in the Future Reserves 2020 study. He deserves great credit for that.

The increase in the proportion of our reserve strength to 30% of the total is a significant change, but as the review recognises, it will simply not be possible without both modernisation and funding. That is why I welcome the Government’s commitment to better integration with the regular force and increased funding, which I had understood was £1.5 billion, but I was delighted to hear the Secretary of State mention a figure of £1.8 billion in his speech.

[Dr Murrison]

Does my hon. Friend agree that not only are our reserve forces head to head cheaper than members of the regular armed forces, which is important in the current environment, but that other countries have far more reserves as a proportion of their total defence capacity?

[Jeremy Lefroy]

My hon. Friend is absolutely right, as always. I believe that in the United States it is at least 30%, if not 35%, yet here it is less than 20%, so we are well under the average, even compared with fine armed forces such as those of our NATO allies in the United States and elsewhere.

As the review points out, however, we must use the specialist skills that our reserve forces have. In the proposed rationalisation of the defence estate, we must ensure that we do not lose the close connection between the reserves and the communities from which they come. The Government’s response to the review points out that connection as one of the benefits of increasing the size of the reserves. One way to do that is for the Ministry of Defence to work closely with local councils and councillors throughout the changes that are being made, so that they are kept fully informed.

Finally, I wish to say a few words about the cadets. I have been fortunate enough since my election to spend some time with the Army and RAF cadets in my constituency and my county. Last month I joined the hon. Member for Stoke-on-Trent South (Robert Flello) at the winter camp of the Staffordshire and West Midlands North Army Cadet Force at Swynnerton in the constituency of my hon. Friend the Member for Stone (Mr Cash). What impressed me most was the commitment of the 500 or so adult volunteers, the full-time staff and the young people. It was a bitterly cold and icy weekend, but the full programme went ahead when other organisations might well have cancelled. When I spoke with the young people from Wolverhampton, Walsall, Stoke-on-Trent, Cannock—as I am sure the Minister knows—and Stafford, they said that the ACF gave them purpose and opportunities that they would not otherwise have considered or had the chance to take up.

We must never underestimate the value of the cadets. Last year they jointly celebrated their 150th anniversary, and their popularity is as great as it has ever been, with some 130,000 cadets in 3,200 units across the UK—no doubt in every constituency—and 25,000 adult volunteers giving up many hours of precious free time each week to help young people develop skills and make the most of their lives. I ask my right hon. Friend the Secretary of State to do everything possible to support the cadet forces. Their work is very much part of the big society, and shares the values of the national citizenship service by bringing together young people from all walks of life and all backgrounds.

Whether it is through the regular forces or the reserves, the bonds between our armed forces and the communities from which they come or in which they are based must not be underestimated. These bonds, along with the courage and commitment of our armed forces, are the cornerstones of the respect in which they are held. Our cadet forces have a different but equally valuable role: offering our young people opportunities to learn and work together that they would not otherwise have.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. I am reducing the time limit on speeches to seven minutes.

16:46

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

I, too, congratulate my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot) on initiating the debate, and the Backbench Business Committee on choosing it as today’s topic. I was particularly pleased that my right hon. Friend started the debate by emphasising the unpredictability of future conflicts, a point re-emphasised in the strongest possible terms by my hon. Friend the Member for North Wiltshire (Mr Gray). Having listened to the Secretary of State for Defence today, I believe that what he is trying to do is create a balanced budget without sacrificing the aim of having the balanced forces that we need. That is a necessary approach, and we should resist the temptation to say that we ought to sacrifice particular capabilities forever, simply because we cannot conceive at this moment of going to war, or entering some lesser conflict, unless we are in coalition with allies.

I was impressed by some of the remarks made by the hon. Member for Bridgend (Mrs Moon), who pointed out the gaps in capability resulting from the cancellation of the Nimrod MRA4. In a later intervention she referred to the problems relating to the loss of fixed-wing aircraft carrier aircraft capability. If we acknowledge the certainty that we will be unable to predict the vast majority of cases in which we shall need to send our armed forces to war, and couple that with a restricted budget, which means that we will often have to choose either what is commonly and derogatorily called salami-slicing, or abandoning certain capabilities permanently, I believe that the salami-slicing approach, unpleasant though it is, is broadly the correct one—because we do not know when, where, against whom or how we will have to go to war. We cannot predict which of the vast range of military capabilities that we currently have we will need to use. Therefore, in straitened economic circumstances when we cannot afford to spend as much on defence as we would like to, and as indeed we feel in our hearts we ought to, we must nevertheless preserve what are called “nucleus” forces, which give us the potential when the need arises to expand on the capabilities that we have retained, even though at any given time those capabilities have seemed to be inadequate.

In that connection, if Ministers are working within an economic envelope—that is not the best terminology to use, but it has been used today so I shall continue with it—in times of peace, we can all understand that, but, whenever we end up in a serious armed conflict, those economic considerations are always relegated to second place, and Ministers simply have to put aside considerations of affordability in favour of the absolute necessity of taking the measures which that conflict situation requires them to take.

It is now just over 30 years since my hon. Friend the Member for Gainsborough (Mr Leigh), a gentleman called Councillor Tony Kerpel, a former chief of staff to a former chairman of the Conservative party, and I set up a coalition. It was not quite the sort of coalition that we have today, which, as hon. Members may know, is so close to my heart; it was the Coalition for Peace Through Security, and its purpose was to fight for the changeover from Polaris to the first generation of Trident and for the deployment of cruise missiles in Britain so that eventually we would be able to negotiate a deal, which we did in 1987, to get rid of intermediate nuclear forces on both sides of the iron curtain in Europe.

I am therefore very happy to reassure the hon. Member for Dunfermline and West Fife (Thomas Docherty), in his absence, that I do not feel at all proprietorial about the arguments in favour of the nuclear deterrent. I am absolutely delighted when people such as the hon. Member for Barrow and Furness (John Woodcock), who I know had not intended to speak today, rise to their feet and defend it with such vigour.

I was pleased, but I shall look very closely at Hansard tomorrow to see exactly what the shadow Secretary of State said when I asked him to clarify and confirm his party’s commitment to the renewal of Trident, and in particular to the successor generation of submarines. I invite my hon. Friend the Minister, given that the Secretary of State did not refer to it, to clarify our own position on that very subject.

[Mr Gerald Howarth]

Prompted by my hon. Friend, I am delighted to say, as he will know, that in the SDSR and in our Trident value-for-money review the Government committed to renewing the independent nuclear deterrent: submarine-based, continuously at sea, patrolling. That programme is being taken forward. Initial gate was in May last year, and I assure him that all the work is continuing and in progress. If I may, I also take this opportunity to salute my hon. Friend, my hon. Friend the Member for Gainsborough (Mr Leigh), and Tony Kerpel on the then coalition, because I supported it at the time and am delighted to be in government supporting it now.

[Dr Lewis]

I thank the Minister for those very generous comments, but we are very short of time, so I am now going to truncate my remarks.

I shall say just a brief word about the masterly exposition by my hon. Friend the Member for Penrith and The Border (Rory Stewart). He always grips the House with his expositions, but the trouble is that I do not always find that I can fully endorse their contents, even though I am fascinated by the elegance and fluency with which he advances them. I share his view, and always have, that the micro-management of the country of Afghanistan is a mistake on the part of the NATO powers—but, whatever happens in America, I find it a little difficult to recognise the idea of generals in this country being somewhat out of control, and pursuing a military agenda with the Foreign Office trailing in their wake. My only point, which I will be happy to discuss with my hon. Friend afterwards, is that when the archives about the decision to go into Helmand are opened, we will probably find that that decision was ultimately taken—and, I suspect, mainly driven—by politicians rather than by generals or diplomats. I may be wrong; history will have to decide.

16:55

[Christopher Pincher (Tamworth) (Con)]

It is always a great pleasure to follow my coalitionist hon. Friend the Member for New Forest East (Dr Lewis). I congratulate my right hon. Friend the Chairman of the Select Committee on organising the debate. I also congratulate the Secretary of State, not only on taking his place today but on making a speech last December at the Royal United Services Institute about the importance of sustained armed forces. That was very powerful.

Rather counter-intuitively, I also congratulate the shadow Secretary of State on his rather temperate speech. Although he is not here, I advise him in all candour not to be too kind and friendly to the Government, because hungry hounds are snapping at his heels. As he admitted himself, it is unwise to incur the wrath of the shadow Chancellor.

I want to focus on one particular aspect of the strategic defence and security review. We have heard from colleagues across the House about the importance of the continuous at sea nuclear deterrent. We have also had a tour d’horizon of the 1930s, the foreign service and boots on the ground in Afghanistan. I hope that when Ministers go back to the MOD they will also reflect on the importance within the SDSR of energy security.

The SDSR and our energy supply are intimately connected. A decade ago Britain was self-sufficient in energy; in just eight, nine or 10 years’ time, 80% of our energy will be imported. The same thing is happening around the world. China, Malaysia and India have a massive appetite for energy. China consumes 12% of the world’s energy—a 25% increase in the past 10 years.

That means that scarce resources, which we tend to find in the most unstable and unreliable regions and regimes in the world, are becoming scarcer. Petro powers such as Russia recognise that; they are prepared to use their energy resources as the provisional wing of their diplomatic and military capability. Russia had an argument with the Ukraine a year or two ago, so Russia reduced the energy supply to that country. That meant that the energy supply to parts of Europe was reduced by a third. That situation has a significant impact on our strategic partners in Europe, and we should make sure that such considerations are factored into our SDSR.

Terrorists also recognise the importance of energy. Look at the strait of Hormuz: every day—today, tomorrow and for the rest of this year—14 supertankers carrying 17 million barrels of oil, which is 20% of the world’s daily supply and 35% of the ongoing seagoing supply, go through the strait. That is a massive tempting target for terrorists. I hope that the MOD recognises the importance of protecting those transport routes and diversifying oil supply so that those tempting targets do not dislocate the energy supply of the world. The fuel that goes through the strait of Hormuz goes largely to the east, to India and China—countries that are absolutely essential to the restitution of the economy of the world. It is important that that particular part of the world, and other choke points, are properly defended. That should be factored into our SDSR.

Lastly, let us think about refining capacity. As the hon. Member for Ynys Môn (Albert Owen) said during Energy questions today, outside Saudi Arabia there is precious little extra refining capacity. That presents another tempting target for terrorists. Osama bin Laden said that refineries represent the hinges on which the economy of the world hangs. I trust that the Minister will reflect on that and make sure that in our SDSR the protection of refineries and the development of extra refining capacity are on our agenda.

Yesterday, at the Select Committee on Energy and Climate Change, the Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for Wealden (Charles Hendry) said something that struck many Members powerfully. He said that the Government would not compromise on the protection of our energy security. I hope that Ministers in the Ministry of Defence will recognise the importance of what he said, and complement it. They must be sure that the structures that we built after the second world war and refined in the cold war to protect ourselves and our energy supply are still fit for purpose in the hot politics of the 21st century. As we have heard from colleagues from across the Chamber today, our strategic defence now has two competing and potentially conflicting demands: to deal with our old opponents such as Russia, and to deal with the new formless and stateless enemies such as al-Qaeda. I hope that when they consider the SDSR and energy policy, the Secretary of State and his team will ensure that our approaches to those two issues complement each other and are not in conflict.

17:01

[Oliver Colvile (Plymouth, Sutton and Devonport) (Con)]

Thank you, Mr Deputy Speaker, for calling me in this debate. I congratulate the Chairman of the Defence Committee on getting the debate going successfully.

This debate feels a little like déjà vu for me, because my maiden speech was about the future of the strategic defence and security review. I fully understand the budgetary constraints that the Ministry of Defence faces. Although I said in my maiden speech that we needed to control public expenditure, I also argued that we needed to ensure that there was enough money in the defence budget to deliver the requirements that we had. I remind the House that if that does not happen, we could find ourselves in the same position as the Soviet Union in the 1980s, when it suddenly ran out of money and was unable to deliver the defence capability that it espoused.

As we heard in the last debate, 50% of our trade is with the EU. I remind hon. Members that the EU is not doing incredibly well at the moment as far as growth is concerned. I therefore think that we need to look to other countries, such as China, Russia and India, where there are potential markets. To do that, we have to ensure that we have decent trade routes and that they remain open.

As the hon. Member for Plymouth, Sutton and Devonport, I am delighted to be able to speak up for the Royal Navy and 3 Commando Brigade, both of which are based in my constituency. I thank Ministers for committing the Government to ensuring that Plymouth remains a principal naval strategic port. That is very important.

Keeping our trade routes open is important for the import and export of goods and will be fundamental for growth. As an island nation, we are dependent on sea routes. It is incredibly important to have a strong Navy with good frigates and submarines, and aircraft carriers when they come forward. I pay tribute to the Royal Navy and 3 Commando Brigade in my constituency. They have worked incredibly hard to ensure that we have that security. We must only look at the piracy situation to see how well that is going.

Plymouth is a global centre for marine science, engineering and research. The Royal Navy is a key part of that. It is important that Plymouth maintains its global reputation for that. As many of my hon. Friends will know, this year we are commemorating the death of Captain Scott in the Antarctic, which took place 100 years ago. I am grateful that there has been a great deal of interest in that subject. We need to ensure that Plymouth remains the home of the Type 23 frigates and that when the decision is eventually made, we have our fair share of the Type 26s when they become available.

We have heard suggestions that there may be problems north of the border up in Scotland. It would be helpful if the Minister spent a little time telling us what alternatives we would have should the Scottish Executive and the Scottish people seek independence. He can rest assured that should the Scots be in the process of thinking that they may not want the nuclear deterrent or nuclear submarines, we in Plymouth are ready to pick up the baton and would be happy to open negotiations to try to ensure that we have them.

[The Parliamentary Under-Secretary of State for Defence (Mr Andrew Robathan)]

I do not have the opportunity of winding up today, but I can say that we welcome my hon. Friend’s offer.

[Oliver Colvile]

I thank the Minister.

I was somewhat dismayed earlier this week when I heard the news about the Defence Committee’s report and found out how many people had left the military and the civil service. Somewhere along the line, we have to ensure that people who have served in the military and picked up good and worthwhile skills are able to use them in employment elsewhere. When my father, who served in the Navy as a professional sailor, having gone to Dartmouth at the age of 14, left as a signalman, he was able to go and get a job as head of outside broadcasting at Rediffusion Television. He was member of the Institution of Electrical Engineers, and he did not have to take exams, or anything like that, in order to prove himself. In those days, it was possible to transfer and use such skills. If our military are to get the best jobs that they possibly can, they will need to use their training and backgrounds. If we are able to deliver on that and to make them feel valued because of the work that they have done, we will be in a much stronger position.

I am keen to ensure that we in Plymouth are in a position to look after the defence of our country so that when Drake’s drum eventually begins to beat—although I hope it never happens—we can answer the call.

17:07

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

The strategic defence and security review is having a significant long-term impact on the UK’s defence posture and on our ability to deter aggression and to shape the global strategic environment to reflect UK national interests, and yet we still aspire to a global role. The Government argue that they have established an adaptable posture for UK defences, but the loss of whole capabilities such as carrier strike and maritime reconnaissance, and the paring back of virtually everything else, will leave the UK able to mount only limited operations of limited scale. After Afghanistan, numbers in the British Army will be further cut to 87,000, or perhaps even 84,000. Even the brigade-plus we currently deploy in Helmand—a fighting force of just 1,500 men—will be impossible to sustain other than for short durations. Libya was a success, and that reflected luck and political daring on the part of our political leaders, as well as the extraordinary inventiveness and resilience of our armed forces personnel. However, that does not prove that the SDSR is a success.

The question is what should be done now. As the United States has just announced a new, leaner defence policy, leaving us in Europe more exposed, the world is not becoming safer. Clearly, without money, we must start thinking. I was grateful to hear my hon. Friend the Member for Penrith and The Border (Rory Stewart) extol the virtues of strategic thinking. To date, the fundamental failures at the Ministry of Defence have been intellectual, not technical, and changing the intellectual dimension does not need to cost a lot or require new institutions. The MOD needs to demonstrate new strategy and new operational concepts. There has been no real attempt yet to change what the MOD does. Trying to do the same as before on half the budget will fail. Less of the same will not work, because we no longer deploy critical mass. Nor can we solve the problem merely by doing things better.

We need a “Hammond review”, quietly to start to build capacity and to think about how to do things differently at low cost. That approach is alien to MOD culture and the defence industries, and it requires new people and new lead contractors. My right hon. Friend the Secretary of State should create a new, competent, imaginative, trustworthy team with real technical expertise—not consultants but dedicated people with collective responsibility, continuity and a real stake in seeing the problems solved. The civil service cannot do that in the traditional way, which underlines the weakness of putting it into a dominant position on the Defence Board, as my hon. Friend the Member for Gainsborough (Mr Leigh) pointed out.

The Chief of the Defence Staff should build the new team for the Secretary of State, but he would still need to monitor it closely. It needs external sources of ideas and expertise, and it must explore how the MOD can be enabled to adapt and evolve using its own resources so that it can generate and regenerate the forms of power that the UK, and indeed Europe, need in this rapidly changing world. That requires a recreation of the country’s competitive stance, just as the US’s competitive stance ensures its technological and industrial dominance. The Secretary of State should involve others from Whitehall and Parliament, from the City and commerce, and from other like-minded defence ministries and industries. We cannot rely wholly on analysis by US organisations such as RAND.

There are similar problems in our defence industry. How much industrial research and development capacity has been lost in the past 15 years? Does anybody know? With such a small budget, it no longer makes sense to have prime contractors. The more we use them, the less adaptable and the less able to reduce costs we will be. Reliance on them has proved no substitute for the MOD as an intelligent customer. The UK has always been good at small, and we should exploit that advantage by harnessing the networks of small businesses that are truly innovative and inventive but currently find it impossible to get their ideas into the MOD and the armed forces.

The new equipment programme must reflect what we need and can afford, which will depend on the capacity to generate what we need when it is needed. The MOD faces huge challenges, and the reconstitution and regeneration of the previously extant force is no longer an option. We have used up our force and cannot replace it. The only viable option is a new concept of responsiveness, and it is time to think bravely and boldly. As my right hon. Friend the Secretary of State put it in his recent speech to the Atlantic Council:

“Necessity drives innovation—and it breaks down barriers…With budgets so tight, Allies need to revisit approaches and ideas that might previously have seemed politically unacceptable.”

That must apply at home as well as abroad. I was encouraged by the tone of his speech today, and I hope that the MOD is working towards those goals.

17:13

[Penny Mordaunt (Portsmouth North) (Con)]

I start by declaring my interest as a member of the reserve forces.

Are we sufficiently well defended? For an answer, we might do worse than refer to the Prime Minister’s remarks to the Liaison Committee last year. He said that if the question was whether the UK was

“a full spectrum defence power, I would answer that literally by saying yes, because I think if you look…across the piece, you take a Navy that has got hunter-killer submarines, that has a nuclear deterrent that we are renewing, that has two of the most modern and up-to-date aircraft carriers coming down the track; if you look at our Air Force, that has got the Typhoon, one of the most capable and successful aircraft that anyone has anywhere in the world”.

At that point my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot), the Chairman of the Defence Committee, interrupted:

“Prime Minister, everyone knows what we’ve got.”

Indeed we do, and we know what we have not got, too. “Coming down the track” means “not here yet”. I am reassured by the excellent work on the Type 26 of the Under-Secretary of State for Defence, my hon. Friend the Member for Mid Worcestershire (Peter Luff), who is responsible for procurement, and by the fact that the Prime Minister speaks enthusiastically about the carriers, but by his own definition of full spectrum capability Britain currently, although unavoidably and understandably, comes up short.

We inherited a catastrophic mess at the MOD when we came into government—I am sorry that we do not have many Opposition Members still in the Chamber to hear me say that. Tough decisions had to be made to clean up that mess, leading to the capability gap and the challenging task of regenerating that capability. We must succeed in doing that, but I am increasingly concerned that we risk failure.

If Britain wants to live up to her billing as a leading nation, we must perform like one. The world still looks to Britain for leadership—as in the recent action in Libya—and it is incumbent on us to be ready to meet those calls in our own national interest. The Royal Navy gives us global reach. It allows us to be present anywhere in the world within 12 miles off any coast with impunity. It keeps food in our supermarkets and the fuel flowing so we can distribute and cook it. Our island nation depends on the Navy for its very survival, an obvious point not often recognised by Departments of State or parliamentarians—present company excepted.

Recognition of that fact does not require one to hark back to the days when Britain’s carrier fleet numbered 55 ships, but it means we need to increase the size of the current surface fleet with the carrier strike and the Type 26 combat ship. It requires us also to ensure that those platforms are properly supplied, so that they can be at their most flexible.

We must stop hollowing out capability. I told the MOD permanent secretary at the Defence Committee that some ships were sent to Operation Ellamy and elsewhere with dangerously hollowed-out capacity. HMS Westminster had only 10% of her ordnance, or, to put it another way, only two shots in the barrel. In response, the permanent secretary spoke of “layered defence” and

“other capabilities that we had in terms of submarines…and …aircraft”.

She also said that it was

“absolutely an operational decision on whether it is safe”

to send Westminster.

“Layered defence” is all very well, but I wonder whether the Westminster’s 190 crew would not have felt more secure if they had the means to defend themselves rather than relying on others. It might have been an “operational decision”, but would we not put the people making such decisions in a far more comfortable position if they knew that ships had a more appropriate complement of missiles? I anticipate that the MOD would answer that missile numbers are secret, but they are not. Anyone— friend or foe—with a moderately priced pair of binoculars and the inclination to look could have discovered how many Harpoon missiles were on Westminster.

The MOD must develop a mechanism properly to plan, acquire and monitor ordnance stocks. No such mechanism exists. As I have raised that point in the Committee, with Ministers and on the Floor of the House, I would like to see evidence that it is being addressed.

I would also like greater recognition of our dependence on carrier strike. As the Foreign Secretary mentioned earlier this week with regard to HMS Argyll’s passage through the strait of Hormuz, we currently rely on our allies—in that instance in the form of the USS Abraham Lincoln. It is apparent, therefore, that when we say we do not need carrier strike for the next decade, we mean we need it but hope to use someone else’s.

That might be all very well when our interests align with those of our allies, but what about when they do not? The Prime Minister has rightly taken a robust line on Argentine pretensions over the sovereignty of the Falklands. The US Administration take quite a different view, regarding the UK administration of the islands as “de facto” and taking “no position regarding sovereignty”. We are encouraged to work things out with Argentina “through normal diplomatic channels”. If it came to it, one suspects that requests for carrier cover would fall on deaf ears.

Equally, although one must recognise that while flying sorties from Norfolk for a time was the only way to halt Gaddafi’s murderous advances in Libya, it was expensive. Had the Ark Royal not been decommissioned, it is unthinkable that she would not have been sent on Ellamy. Had we flown sorties from a carrier in the Mediterranean rather than from an airfield in East Anglia, they would have been more frequent and more responsive, and the need to return to base without dropping a bomb would have been less of a waste of time and money.

I raise those issues not to chastise the Government for the SDSR—they had to close the gap in the defence budget—but to show our dependence on carrier strike force. The Prime Minister has said that carriers are necessary for a nation to have full military capability, which means every day of every week, all year round. Accepting the need for carriers is to accept that we must have both Queen Elizabeth class ships in operation—at minimum, one on, one off.

[Mr Leigh]

Does my hon. Friend recall that the US Secretary of State, Hillary Clinton, referred recently to the Falkland Islands as “the Malvinas”, therefore implicitly giving a nod in the direction of Argentina? My hon. Friend is right that we could in no shape or form depend on the Americans if there were any threat against the Falklands. Were they taken, without a carrier, we could never take them back.

[Penny Mordaunt]

If someone had an argument about the sovereignty of an eastern state, I am quite sure we would have a much more robust response from our nearest ally.

The cost and specification of the new carriers has been much derided. One estimate is that they could be as much as £3.1 billion more expensive than planned. I have heard many an “amusing” conversation in this place about the decks being too short for aircraft to take-off and the possibility of sailors being burnt to a crisp by aircraft engines, along with other such Bird and Fortune material. We laugh, while blindly heading for a greater folly: spending such a sum, only to deny ourselves the capability that it should have brought. If we end up with just one operational carrier, we will have wasted £5 billion over the initial estimates, yet for months of every year we will be without cover. If our enemies strike during an off-period, the British people will ask what that hefty final bill has actually achieved. Thanks to the last Government, £3 billion has been needlessly spent on carrier strike force. Under this Government, let us not have £7 billion pointlessly spent.

17:20

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

I am grateful to catch your eye, Mr Deputy Speaker. Like others, I declare my interest as a member of the Territorial Army. There seem to be enough of us here to form a small platoon, which would perhaps be interesting, although such a platoon would come only from this side of the Chamber. Indeed, there is a noticeable absence of support for today’s debate from the Opposition Benches—[Interruption]—other than from the right hon. Member for Rotherham (Mr MacShane), who has just walked into the Chamber.

I congratulate my hon. Friend the Member for Portsmouth North (Penny Mordaunt), as well as my hon. Friend the Member for Penrith and The Border (Rory Stewart), who, with his eloquent speech, raised the standard of this debate—we were getting into the weeds a little bit, talking about the tactics of the SDSR rather than the strategy. We were starting to talk about the individual bits of kit that we enjoy, like or are in love with—we are always quick to quote a retired general or admiral saying, “This is exactly what we need”—rather than stepping back and asking what the strategy is and where we fit in the bigger picture. Fundamentally, the SDSR is about how we protect our people, our allies, our economy and our infrastructure—indeed, our way of life—from the potential risks that we face. It is about how, on occasions working with our allies, we apply the instruments of power to influence and shape the global environment, and how potential tactical threats affect us.

The shadow Secretary of State did not want to get partisan when I intervened on him, but it is important to reflect on what happened over the last decade. Not only did the previous Government not have an SDSR, which was bad time management, but not having one affected our military’s ability to perform. During that decade we saw the September 11 attacks, we were involved in enormous campaigns in Afghanistan and Iraq, and we had the July 2005 bombings. The type of threat changed, compared with the cold war stance that we were used to. There were huge changes in operational tactics too, with the introduction of drone warfare, advances in missile systems and stealth technology—ways to introduce force multipliers that did not exist before. The conduct of war also changed, with an emphasis on stabilisation operations as much as war fighting, as illustrated in Iraq and Afghanistan. The kinetic phases of those campaigns were over very quickly, but the lack of an unconditional surrender meant that we then got into protracted stabilisation and peacekeeping operations.

I was saddened to visit Sandhurst not long ago and find that it had only just introduced courses in CIMIC—civil-military co-operation—which are required to enable the military to liaise and work with civilian counterparts, NGOs and the Department for International Development in those other operations, which start in the aftermath of the war fighting. That is what we now need to get good at; that is what was missing in Afghanistan and Iraq. Had the Labour Government held a defence review, those issues would have been identified. However, they did not, and we failed to take the opportunity to fundamentally modernise our armed forces. I think the Chilcot inquiry will reflect that. It will show that our armed forces found themselves in two campaigns with the wrong numbers and the wrong equipment, and without a clear strategy.

I firmly agree with my hon. Friend the Member for Penrith and The Border about our ability to work more cohesively with other Departments. We need to be able to work with DFID and the Foreign and Commonwealth Office to ensure that our strategy—the purpose of sending our military into danger—is absolutely crystal clear. It is clear from General Petraeus’s book on counter-insurgency that it is not enough simply to defeat the enemy; we now have to win over the hearts and minds of the locals—the friends that we are trying to support.

The triangle consisting of security at the top, then governance, followed by development and reconstruction has still not been developed. In Afghanistan, the security aspects took far too long to get right. Huge questions still arise as to why we ended up in Helmand province anyway. Those of us who know the history of that country will be aware of the treaty of Gandamak and the battle of Kandahar. Events such as those tell us that we are not particularly welcome in that patch of Afghanistan, given the history there. There might have been other places in which we could have been more strategically helpful. Lessons have been learned from those engagements and put into practice in Libya, where there has been a far more coherent effort, not only within our own Departments but in regard to whom we work with, including our NATO allies.

Labour missed a massive opportunity to understand what exactly our military are expected to do. Our armed forces were placed in danger and given kit that was out of date. I mentioned Snatch Land Rovers in an intervention. Too often at that time, other bits of kit were thrown at the military for testing, to see whether they would work. They included vehicles such as the Jackal, the Cougar, the Vector and the Ridgback. Eventually, the Mastiff came along and proved to be the most suitable for use in those operations. Things should not have had to work in that way, however. A security strategy could have helped in that context.

Procurement errors have been made. The Nimrod has been mentioned many times in the debate. The contract for its development was signed in 1996, and it was due for delivery in 2003, yet not one aircraft ever received a certificate of airworthiness. The Sea Harriers have been cut, which means that there is now no chance of us ever putting a carrier in. The existing Harriers do not have guns; they do not have the Mauser weapon systems. They cannot carry the Brimstone or the Storm Shadow, yet those missiles were critical to the success of the action in Libya.

We get stuck with certain favourite bits of kit. The Apache is now in a new dimension. It travels at two thirds the speed of the Harrier and fires the Hellfire missile, which is just as potent as any of our other weapons. We hear that the Falklands are under threat. We have an aircraft carrier there, so the base already exists, and it has the Typhoon and the Tornado. The Argentines spend only £3 billion on their defence budget, compared with our £30 billion. I believe that we should place the question of Argentina in a separate context in relation to the SDSR. It is a distraction from where we are going.

Finally, I should like to congratulate the Defence team on what it is doing. I think that we are finally progressing—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order.

17:27

[Richard Drax (South Dorset) (Con)]

It is a pleasure to follow my hon. Friend the Member for Bournemouth East (Mr Ellwood). I, too, would like to pay tribute to my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot) and to the Backbench Business Committee.

I am speaking on behalf of my constituents, but I am also speaking on behalf of the many who are serving in our armed forces who cannot speak for themselves. As has already been mentioned today, George Washington once said:

“In time of peace, prepare for war.”

I feel that that quote is rather pertinent, as we scrutinise the progress of the strategic defence and security review. There is no doubt that a review was needed, but the decisions that flowed from it have left our country exposed and weakened, militarily and politically—the two go hand in hand. How can we possibly advance our peaceful cause, and protect our interests around the world, if we do not have sufficient muscle to flex, and ultimately to use, when things go wrong, as history shows they do. Yes, Labour left us with a £38 billion black hole. Yes, the Ministry of Defence was bloated. Yes, the armed forces are top heavy and need rebalancing, and yes, procurement was out of control. Regrettably, however, the Treasury’s will has prevailed over that of the military.

There is to be a loss of personnel. The Army is to lose 7,000, and the Royal Air Force and the Navy 5,000 each, with a further 4,000 soldiers to go. That is a tragedy. In regard to our front-line troops being protected from the cuts, we have been told that no one who is in receipt of the operational allowance, preparing for deployment, on post-deployment leave or recovering from injury will face compulsory redundancy. Although that has been followed to the letter, we know that, in some cases, compulsory redundancies have followed the end of post-deployment leave almost immediately. I should also like to comment on the fact that some troops who are currently preparing for deployment know that they are on the list for voluntary redundancy. How odd that must be for them, fighting for their redundancy money. I wonder what that does for morale on the battlefield.

I would also like to touch on plans to change the ratio of regulars to reserves from 80:20 to about 70:30. The reserves, who include many esteemed colleagues in the House, do a wonderful job, and I pay due respect to them, but I believe, as do others, that the thinking behind the proposal is seriously flawed. When budgets are tight, the integrity of the armed services must be maintained by the regulars. We simply do not have the money to spend on the reserves, as they do in America. Reserves are harder to recruit and retain, and expensive to train. If thousands of troops return from Germany, where will we train our armed services? Even now the reserves in my constituency of South Dorset have a nightmare trying to find places to train because the regulars get there first. Senior officers have told me that they would rather have more regulars for the same amount of money.

I turn to the ongoing redundancies. With nearly 3 million people out of work, is it wise to throw experienced and highly valued servicemen and women out into the cold and potentially on to the welfare state? It simply cannot be. I genuinely believe that those who have not served in the uniformed branch of our country, and that applies to most people in the House and, dare I say, all the Cabinet—that is not a personal assault on them—simply do not understand its value. Quite apart from the wonderful job all those in uniform do, they are standard bearers for our local communities and contributors in many walks of life, especially when they return to civilian life. Having served, they give back so much.

Much mention has been made of the gaping hole, up to 2020 or thereabouts, that will exist in our defence strategy. Not until then, we are told, will we have two new aircraft carriers, supposedly, the planes to fly off them—as we have heard, we are not sure which planes they will be, whether they will be able to land or take off, or whether they can deliver the necessary armaments—the new fleet of Astute class submarines and six state-of-the-art Type 45 destroyers. I will believe it all when I see it.

In the meantime, the storm clouds are gathering—this is not some dramatic statement; they are. The following is not an exhaustive list. There is Iran. There is the Arab spring, which I and many others believe is turning wintry. Even our recent triumph in Libya looks shaky. There is Nigeria and Yemen. There is the Falklands. There is Russia—unpredictable. There is China—empire building. North Korea remains a sinister enigma. In Europe—our allies—the German chancellor warns that “half a century of peace in Europe” could end if the euro collapses. Here at home—let us not forget good old Britain—Irish terrorism still erupts sporadically. On the mainland, we considered deploying troops on our streets to counter riots.

What do we do? We disarm. The truth is defence spending must rise, not fall. It was 5% when I served, and it is now about 2.5%, as we have heard, and the NATO minimum is 2%. It is our solemn duty in the House to protect our island, safeguard our dependent territories, and meet our NATO commitments. The money must be found, and it can be. We squander millions on overseas aid—I accept that charity must go abroad, but not to the extent it does. There is our massive contribution to the EU, and when we renegotiate—and we will—we will get back billions, which we can then spend on things that this nation needs. There are the many quangos that were going to be burned on the bonfire. Then there is the vast welfare state. The list goes on.

Defence is a matter of priorities. I accept that, economically, Departments must make cuts, but will our enemies look at this country and refrain from aggressive action because we face austere times and cut our defence capability? History shows that that is when our enemies will strike.

17:35

[Sir Bob Russell (Colchester) (LD)]

As the newest member of the Defence Committee, I congratulate the Chairman, my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot), on setting the scene for this excellent debate. I also endorse the comments made by my hon. Friend the Member for North Wiltshire (Mr Gray).

In opposition, both the Conservatives and the Liberal Democrats criticised the Government because our armed forces were under strength and overstretched. I regret to say that the coalition Government are making a bad situation even worse. The morale of Her Majesty’s armed forces is not as good as it should be and among the reasons for that low morale are poor conditions.

I commend the previous Government, for example, for what they did with the new Merville barracks in the Colchester constituency, but I condemn them for their failure to upgrade the family accommodation sufficiently in 13 years. Even today, one can see it with single soldier’s accommodation. When the Defence Committee went to Catterick, we were shown level 4—perhaps it is called category 4—accommodation, which reminded me very much of what we used to see in “Auf Wiedersehen, Pet” when the work force decided to decorate the place. The Army in Catterick got in paint and paint brushes and allowed the soldiers to determine their colour scheme in the various bits of the barrack block. The colour variations included interesting combinations and the quality of the workmanship was variable. I do not think that that is the right way to treat our brave soldiers, nor is it right that soldiers’ families should continue to live in accommodation that is not what we would expect in civilian life.

We know that the size of the Army will go down and we have been told today that the numbers will be the lowest since the Crimea. The statistic I had was that they were the lowest since the Boer war, Baden-Powell and Mafeking. Whatever that number is, it is too small for us to have a role on the world stage. We have commitments. The Falkland Islands have been mentioned and I should like to endorse those who have pointed out that it is fortress Falklands now and that things are completely different from 30 years ago. I do not think we should get over-anxious. We obviously need to be alert, but we should not think that the Falklands in 2012 are as they were in 1982.

I pay tribute, as others have, to the Territorials and reservists. Without them, we could not do what we do. Without the 10% of the British Army that is not British, it could not do what it does. We should pay tribute, in particular, to those people from the Commonwealth nations who serve in Her Majesty’s three armed forces. Let us also praise those who provide leadership for the air, sea and army cadets. I am delighted to say that we have all three units in the garrison town of Colchester.

I want to conclude, as others wish to speak, on the subject of the future of the Ministry of Defence police. There are some 3,600 MDP officers and their headquarters are in Essex, in Wethersfield. Despite their highly trained and specialised nature, the role of Ministry of Defence police is often not well understood by decision makers and the wider general public. Indeed, under the previous Government, I went to the MOD to make a special plea on behalf of the Ministry of Defence police in the garrison town of Colchester and I could not get people to understand the important role they played. As a result, the number of MDPs in my constituency has gone from 30 to three. With the best will in the world, the Essex constabulary cannot plug the gap left by the loss of 27 Ministry of Defence police officers. The MDP is facing major cuts to its budget and numbers as part of the strategic defence and security review, with a potentially disastrous impact on national security. The Ministry of Defence must reconsider and I hope that the Defence Committee will help the Ministry of Defence realise that cutting the MOD police is not the brightest of the ideas that it is considering.

17:39

[John Glen (Salisbury) (Con)]

As a member of the Defence Committee, I welcome this opportunity to contribute to the debate. Defence reform is a complex matter and it is not easy, in a few minutes, to encapsulate coherently and completely in an incisive contribution how one would move things forward. I say that to mitigate the disappointment when I sit down and to reflect how difficult it is to reform a Department that has so much complexity hard-wired into its fabric. Much analysis and many reports on this issue have been undertaken over the years and I do not want to use my time now to revisit controversial decisions on whether, if or when we will have an aircraft carrier or aircraft carriers, or on the number of senior posts that will be rationalised, or on how those decisions were taken. Neither do I want to examine the different reasons armed forces personnel face a greater likelihood of compulsory redundancy than their civil service counterparts.

The three points I wish to raise today concern culture, accountability and the measurement of outcomes. Regardless of what decisions are made about programmes and the size and shape of the three services, it is in those three areas that lasting, effective and meaningful reform will be achieved. Many people will probably raise their eyebrows at the mention of culture and think it is a soft and peripheral concern. They might think that the culture of the armed forces is well defined and focused, so let me explain what I mean.

I have no doubt whatever that the sense of discipline, service and mutual dependency is fully developed within the culture of the armed services, as is that brave willingness to risk life and limb for country. However, I am increasingly of the view, through all my different interactions with the armed services in the two years I have been in the House, that although in operational terms there is no doubt about how well the different services work together, when it comes to taking decisions in the interests of UK defence at the strategic and policy level, individuals display an undue dependency on their own service, department or section and the affinities that go with them. Often, I feel that decisions on fundamental matters of reform are made on the basis of the relative political skills of the senior individuals involved. Until a culture exists that rewards and prizes fully at all levels the good of UK defence above other ingrained imperatives, lasting and successful reform will not happen. We cannot continue to pay lip service to jointery from a structural and organisational chart perspective but make no real investment in the mechanics of decision making within the MOD.

The second issue I want to address is accountability. The Defence Committee’s report of just this week says that

“the MoD could not provide adequate audit evidence for over £5.2 billion worth of certain inventory and capital spares.”

My hon. Friend the Member for North Wiltshire (Mr Gray) referred to the Secretary of State appearing like the chairman of an international company.

[Mr Gray]

A very good one.

[John Glen]

Indeed, but what would happen in a business if such inventory could not be accounted for so that for the fifth year the financial director had to qualify the accounts? My gallant Defence Committee colleague, my hon. Friend the Member for Beckenham (Bob Stewart), recently told me he had once been severely reprimanded for an unaccounted rifle. That was only a generation ago, yet today £125 million-worth of Bowman radios are still unaccounted for.

Many Members will raise their eyebrows, because the issue has been highlighted so many times in different reports, but poor accountability for decisions and outcomes and for the use of public money needs to be addressed. Accountability needs to be hard-wired in the MOD, not just at the highest level but at every level, otherwise reform will not be successful.

The final issue I want to examine is measuring outcomes. As a member of the Select Committee, I draw attention to our recent report, which notes that we were told that

“88 per cent progress had been made to a stable and secure Afghanistan.”

It is a promising statistic, but when we examined it further we were told that

“the performance was not 88 per cent against a full range of indicators of what is happening in Afghanistan, for example on the quality of governance, the economy and security.”

In that case, what is the point of such a statistic in the MOD’s annual report and accounts? We can debate at length the different aspects of decision making and allocation of resources, but until we have proper accountability and measurement of outcomes we cannot have real change in future outcomes and conduct in our MOD. We need to change the culture. We need real accountability, with consequences. We need to measure outcomes so that effective decision making can be built on well into the future.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. I remind Members that the wind-up by James Arbuthnot will start no later than five to 6.

17:46

[Bob Stewart (Beckenham) (Con)]

I congratulate my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot), the Chairman of the Defence Committee, on which I sit. His leadership is outstanding.

I want to talk about what might be the most important thing: morale. As we all know, Napoleon called morale the sacred flame—the thing that matters more than anything else. He said that morale is to the physical as three is to one. When I was a captain, I used to teach leadership at Sandhurst and I could not quite understand what he meant. Ten years later, when I was a British military commander in Bosnia, people would ask me—Serbs, Croats or Muslims—how many men I had under my command. I would reply, “Lots. How many do you think?” They said, “Between 3,000 and 4,000.” I had 800. Morale made the difference.

High morale is definitely a force multiplier. It is not quantifiable statistically, but we can feel it. My experience is clear. When we go into a unit, we can feel what morale is like from the way people talk, stand and behave. Let us be clear: the British armed forces have the highest morale in the world on operations. Anyone who has visited our troops in Afghanistan can see that. Wherever British soldiers go in the world, their morale is high on operations. I am worried about what happens when they are not on operations.

In all the years I have been involved with the Army, and it goes back a long time—1967—I have never seen such low morale among personnel when they are not on operations. There is a difference. On operations they come up to the plate; they are fantastic. They are everything one would always expect. It is the British way of doing it. But off operations—boom! Down they go.

Obviously, the SDSR has an impact, because there is massive uncertainty on job security and life for the future. There is a pay freeze, and rising inflation has made life very difficult for the junior ranks. Some service personnel are involved in change programmes. They see an increase in work load and fewer resources being given to them. Obviously, barracks and the accommodation are not great. The Welsh Guards in Cavalry barracks are looking forward to having a hot shower when they go to Afghanistan—and they are in west London.

I hope last night’s Evening Standard is wrong that anyone above the rank of sergeant is going to lose his or her London weighting, because if that is the case a sergeant will get a 4.5% pay cut in London, when he or she has no choice over where they are deployed. Do we take a pay cut? Do we lose our London weighting? Do civil servants lose their London weighting? It is not fair.

Many people, of course, serve away from home for a long time, and the tour interval for some people is now down to about a year. Families do not like it, clearly, and they put pressure on soldiers. The biggest contributory factor to low morale is the fact that our armed forces are taking such a cut in personnel.

Leadership is essential. Leadership in the Ministry of Defence is about heart as much as statistics. Soldiers need to know they matter and are cared for by the people who look after them. Military commanders should look downwards first before they look upwards. I am slightly worried because I seem to think—I hope I am wrong, but perhaps I am not—that too many generals are trying to be political or be civil servants rather than looking down at their soldiers.

I will end, because I know we are short of time, by concluding on morale. If we want to be the best—to use the Army’s phrase, “Be the best”—we must get morale right. It is not right at the moment, particularly when our soldiers, sailors and airmen are not serving in the field. Addressing morale is the top priority of everyone in the Ministry of Defence, from the Secretary of State downwards. It is very important that everyone in a position of power and influence puts their heart and soul into getting that vital aspect as good as it can be. Thank you for calling me, Mr Deputy Speaker.

17:52

[Mr Arbuthnot]

With the leave of the House, Mr Deputy Speaker, I will simply do a brief analysis of what has emerged from a really good and effective debate.

The right hon. Member for Newcastle upon Tyne East (Mr Brown) talked about nuclear deterrence. Personally, I give his arguments rather more credence than most of his own party do, because he was thoughtful and highly intelligent, as one would expect from him, about the nuclear deterrent; but the hon. Member for Barrow and Furness (John Woodcock) later made some comments about the nuclear deterrent, echoed by my hon. Friend the Member for New Forest East (Dr Lewis), which I think carried the day in the persuasiveness of the arguments. Nevertheless, I thought that the way in which the right hon. Gentleman spoke was very sympathetic and most persuasive.

My hon. and gallant Friend the Member for Canterbury (Mr Brazier) showed what he brings to the House of Commons Defence Committee. He brings a passion, an understanding and a degree of detailed knowledge of figures that is sometimes quite intimidating, but is enormously valuable. He will hold the feet of the Defence Committee to the fire, and as a result we will do our best to hold the Ministry of Defence’s feet to the fire.

The hon. Member for Bridgend (Mrs Moon), as always, drew our attention to important matters, such as the maritime patrol aircraft—a key issue—and the various ways in which its absence will cause huge difficulties for this country. We on the Defence Committee know that it was perhaps the most difficult issue for the Government to confront in the strategic defence and security review, but when the hon. Lady told the House that we could be sharing Luxembourg’s maritime patrol capability, that brought home quite what a pass we have come to.

I want to defend my right hon. Friend the Secretary of State, who has been accused of partisanship. I am not entirely sure that he was attacking the Labour party; I think he was mostly attacking the previous Prime Minister, and in that many might join him. In fact, many Labour Members might join him, judging by the many conversations I have had with former Secretaries of State for Defence bemoaning the way Ministry of Defence budgets were treated.

I hope that at some stage my right hon. Friend will be able to provide me or the Committee with a written answer on why the stabilisation unit, which is not part of the combat forces in Afghanistan, is expected to be withdrawn by the end of 2014. It seems to me that it has a role to play after that.

Having defended my right hon. Friend, I shall attack the shadow Secretary of State for Defence in a way that I have attacked him before by suggesting that he runs the real risk of becoming leader of the Labour party. I know that that does him no good, but I have always thought it. He was described today as temperate, and rightly so in my view.

The hon. Member for Edinburgh West (Mike Crockart) made a powerful case on the bases and barracks in and around his constituency, which will go down extremely well in Scotland, I am sure. The hon. Member for York Central (Hugh Bayley) offered a world view of defence and of the strengths and weaknesses of Europe. I entirely agree with his comments, apart from one with which I have a little difficulty. I agree with him that Europe has to step up to the plate a great deal more than it has done recently, but in response to his suggestion that the cuts we make in this country should be contingent on other countries improving their defences, I have to say that he might have to wait a very long time before that happens, although I hope I am wrong about that.

It was wonderful to listen to my hon. Friend the Member for Gainsborough (Mr Leigh). At last I have found someone who is even more gloomy than I —[Laughter.] I will long remember his final quotation and try to use it myself. On the point he made in his speech, Argentina should be in no doubt that we will not let the Falkland Islands go, and if the Falkland Islands were by any chance to be retaken by Argentina, we would take them back.

My hon. and gallant Friend the Member for North Wiltshire (Mr Gray) demonstrated in his speech why he is the chairman of the all-party group on the armed forces. He made an excellent defence of defence budgets and the armed forces in general. The hon. Member for Dunfermline and West Fife (Thomas Docherty) made a powerful contribution, as he always does, to today’s debate and raised the question of whether we should have one carrier or two. I think it essential that we have two carriers, properly configured.

I am not at all surprised that I agreed with everything that my hon. and gallant Friend the Member for South West Wiltshire (Dr Murrison) said. I think the whole House values his experience as a reservist. I am not all surprised either that I disagreed with a lot of what my hon. and gallant Friend the Member for Penrith and The Border (Rory Stewart) said, but he said it with such strength, clarity and passion that, as has been noted, he kept the whole House gripped. He also made us think, and what a valuable thing that is for a debate such as this.

My hon. Friend the Member for Stafford (Jeremy Lefroy) talked about very important issues, echoing many that have been made about maintaining the cohesion of the armed forces—

18:00

Motion lapsed (Standing Order No. 9(3)).

AFC Wimbledon

Thursday 26th January 2012 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Greg Hands.)

18:00

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

I am pleased to raise this issue in the House today. AFC Wimbledon has an important place in the hearts of many of my constituents. As we approach another big FA cup weekend we will, I am sure, look back at many of the cup’s greatest moments. Perhaps none are so fondly remembered as one from nearly 24 years ago, when a team that had been in the Football League for only 11 years beat probably the best team in Europe, when the Dons of Wimbledon beat the Reds of Liverpool and John Motson coined his wonderful phrase, “The Crazy Gang have beaten the Culture Club!” My dad and my sister were very lucky to get tickets for the cup final, and a picture of me with my dad, who passed away five years ago, hangs proudly in my hall back in Colliers Wood, with him wearing his yellow and blue rosette. It was a happy day for our community, and it was also one of the happiest days for me, my sister and my dad. Winning the FA cup was a thrilling achievement.

Nearly a quarter century on, the achievement of one club in going from non-league to FA cup winners in barely a decade has been mirrored by the achievement of another. That club is AFC Wimbledon, which despite being formed only in 2002, has now made its way in less than a decade from jumpers for goalposts to the Football League. Less than 10 years ago a community came together in a time of struggle, and now they have achieved something even more amazing than the original Wimbledon. I am sure that all Members with an interest not just in football but in the power of community will want to join me in saying how proud we are of AFC Wimbledon. Therefore, I take this opportunity to congratulate the manager Terry Brown and his predecessors, and all the current and past players and staff.

[Stephen Hammond (Wimbledon) (Con)]

I am grateful to the hon. Lady for securing the debate, and for allowing me to intervene. She is absolutely right. The key word she has hit on with AFC is that it is a club of the community of Merton and Wimbledon. The work that it does in the community, beyond its work on the football field, is to be commended. That is why the nickname “The Dons” needs to come back to that club, where it belongs.

[Siobhain McDonagh]

I completely agree with the hon. Gentleman.

The people we most want to congratulate are the supporters. AFC Wimbledon is owned by the fans through a small supporters group, the Dons Trust, and is deeply rooted in our community. When it was promoted to the Football League at the City of Manchester stadium last May, after Danny Kedwell’s penalty kick and Seb Brown’s heroic penalty saves, it was not just the club that was celebrating, it was the whole community.

But I have not called this debate today just to praise my local football club—although that would be reason enough. Yes, I want to use this debate to inspire, and to sing the praises of community football, but the main reason I requested the debate is that, strange as it may sound, everyone involved wants to prevent what happened to us from happening again. No true football lover could possibly want what happened to us to happen to anyone else.

Yes, it is true that the fans of AFC Wimbledon are enjoying their success, and yes, they are the same people who enjoyed success as supporters of Wimbledon, but the highs that we have experienced are nothing compared with the lows, and we do not want another club to suffer those. First, in 1991, the club left its home at Plough Lane. This was an ignominious time, especially for those of us who, like me, were connected to Merton council. We were persuaded by the owner, Sam Hammam, that Plough Lane was unsuitable for top-flight football, which required all-seater stadiums, and that he should be allowed to leave while a new stadium was found.

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

I congratulate my hon. Friend on securing the debate this evening. The point that she is making is pertinent to many football clubs. Does not that show just why, when the Government are considering the future licensing regime for football, there should be a presumption against clubs being able to move out of grounds, unless it is in the interests of the club and they have somewhere permanent to go?

[Siobhain McDonagh]

I completely agree with my hon. Friend. AFC Wimbledon is a case in point that justifies such registration.

AFC began to ground-share with Crystal Palace at Selhurst Park in Croydon. They never returned. Even worse, new owners took over and, in 2001, announced that they wanted to move to Milton Keynes. There was of course opposition from fans—not just fans of Wimbledon, but those of virtually every football team in the country. The move was opposed by the Football Association and even the Football League, which blocked the move twice. Many MPs became involved in the campaign against the move, and I wrote numerous times to the football authorities. With such opposition, few of us believed that the move could happen, but in May 2002 an independent commission gave it the green light.

The decision was as devastating as it was incomprehensible. It was the end of the road for our Dons. For most fans enough was enough, and they stopped supporting Wimbledon FC, which suffered so much that it went into administration the following year, shortly before finally moving into Milton Keynes in September 2003. Not only had the club failed to return, as Sam Hammam had promised it would, but thanks to the independent commission, what was still left was stolen and taken to another part of the country.

That was the point at which most people would have walked away, but a remarkable group of people decided not to. According to legend, a group of fans including Erik Samuelson, Ivor Heller and Kris Stewart met in a pub and decided to set up their own team, which would be owned by the fans and rooted in the local community—a club they could be proud of. In June 2002 they held open trials on Wimbledon common and cobbled together a team in just a few weeks. Their first game was a friendly against neighbouring Sutton United, another famous FA cup giant-killer. Perhaps unsurprisingly, Sutton won the match 4-0, but the result was less important than the fact that the dream was now real.

Rather like what happens in Kevin Costner’s “Field of Dreams”, those people built their club thinking, “If we build it, they will come.” In a race against time, they found a ground at Kingsmeadow, just over the Merton border in Kingston, and persuaded the Combined Counties Football League to let them enter their competition. And once they had built it, come they did. Around 3,000 fans went to those early games, more than the old Wimbledon had attracted in the championship. What followed has been astonishing: five promotions in nine years.

However, that is not the whole story. AFC Wimbledon achieved their success in the right way. On the field, year after year they have won the Fair Play award, and off it they have been a model of good management and community involvement. The club is owned by the Dons Trust, a supporters group pledged to retain at least 75% control of the ownership. In 2003 it made the difficult decision to have a share issue in order to buy Kingsmeadow, the ground they share with Kingstonian, a club that is itself in terrible financial trouble and threatened with new asset-stripping owners.

AFC have been looking to return to Merton ever since, and the council has been very co-operative and supportive throughout. The leader of the council, Stephen Alambritis, a qualified football referee, is personally very involved in working with the club to identify a new home in the borough if that is at all possible. AFC have a real commitment to community sport and are well known in the area for their commitment to women’s football and youth football. I have only good things to say about the chief executive, Erik Samuelson. He is a fan first and foremost, and infamously agreed to carry out his full-time duties in return for the nominal sum of one guinea a year, because

“it sounded posher than a pound”.

He would be the first to say that the club would be nothing without every supporter helping to make it a success and the fans who give up their summers to paint the ground, or spend match days selling programmes or running the car park.

AFC have always been very supportive of the activities that I get involved with in Mitcham and Morden. In 2009 I held a reception for the club here in the House in recognition of its community work, and I remember those people being greeted warmly by many Members. Indeed, back in 2007 when the club was docked 18 points for not knowing that it had to fill out an international transfer form in order to sign a retired player, Jermaine Darlington, from Hackney, 88 MPs joined me in signing an early-day motion about it. Even the then Prime Minister, Tony Blair, told the House:

“it sounds like a daft rule, and someone should change it.”—[Official Report, 21 March 2007; Vol. 458, c. 813.]

AFC have made a big impression, because they have been recognised for their work in our local community. So that brings us up to date.

AFC are an inspiring story of good people doing good things and getting good results, and this is now our opportunity to ensure that clubs such as Wimbledon never have to go through the same thing again. The review of football governance is very much to be welcomed, and the work of the Culture, Media and Sport Committee, in particular, has been incredibly helpful.

I especially pay tribute to a former Member. Alan Keen was an exceptional chair of the all-party football group and, by all accounts, an excellent football player—even into his 70s. He played a leading role in getting football governance taken seriously.

Supporters Direct, the independent co-operative that champions fans’ concerns, has also been inspirational. Established in 2000, thanks largely to the efforts of my right hon. Friend the Member for Leigh (Andy Burnham), and the exceptional Phil French, whom I was pleased to see at AFC’s first league game against Bristol Rovers last August, it has been a powerful voice of good sense. I especially thank Kevin Rye, who has been a great help to me today, but the entire organisation is fantastic.

I do not have time to go through the whole subject of football governance, because it deserves a far bigger debate and there are many more people qualified to speak on it than me. I am concerned about the narrow question of how the review of governance can stop clubs going the way of Wimbledon and ensure that they go the way of AFC. It should not be possible for clubs just to pick up sticks and leave the communities that support them. A proper, grown-up relationship between communities and their clubs is the way forward for all clubs, and I back Supporters Direct’s call for action.

We now have an opportunity to ensure that football clubs can never again have their identity stolen or be uprooted and moved away from the communities that support them. If Supporters Direct’s model of formal licensing had been in place prior to 2002, Sam Hammam and his successors might not have got away with what they did, so we need new rules on supporter and community engagement that give rights to supporters on behalf of the community. Those rights should include the right to have a “fit and proper supporters’ trust” to engage with its club, with basic rights to information, including financial information, and to hold meetings with club executives.

We should make it mandatory to secure the agreement of the fit and proper supporters’ trust before any fundamental changes to a club, such as the sale of its ground or a move to a different part of the country, take place. I support also the proposals to reduce clubs’ dependency on “benefactors”. Instead, clubs should have to rely on generating their own revenue, as AFC Wimbledon do, as a protection against overspending by speculators.

It is clear in my mind that Supporters Direct is right, and I should like to hear the Minister’s views on how licensing could help the supporters of clubs such as Wimbledon, but I should like also to raise the thorny issue of identity theft. It is not the first time that I have raised it in the House, and Members have usually agreed that identity should be protected.

When the FA commission agreed to let our club leave south London, its supporters felt that their identity had been stolen. Everything that they identified with suddenly belonged to someone else. Very kindly and sensibly, the new Milton Keynes club decided that, even though they were essentially the same club as Wimbledon FC, they no longer merited the honours won by Wimbledon, so they handed over the titles and cups to Merton council. They even changed their name from Wimbledon to MK Dons, but “the Dons” is the nickname of Wimble-don, and now that AFC Wimbledon have reached the football league it is time to reclaim our identity. We are the Dons, and it is time for the authorities to look at the running sore of our identity being stolen.

The Dons are from Wimbledon, and it is time for the new club in Milton Keynes to come out of the shadows and stake out its own identity. I understand that they are a good team with a good young manager, and, although what they did caused a lot of hurt, it is time to consign it to history. It is time for them to find a different way of representing their heritage, in their name, and then the team that are known throughout football as Franchise FC, which most fans think gained their position through identity theft, would be able to carve out their own identity and allow AFC Wimbledon to retain theirs. That would be good for Milton Keynes, removing much of the stigma associated with that club, and it would be good for the game.

I hope that the Minister will therefore commit to ensuring that the new licensing model also tackles identity theft, and I urge him to back the “Drop the Dons” campaign, launched earlier this month by my local newspaper, the Wimbledon Guardian, and to support my early-day motion on the subject.

It has been a real privilege to hold this debate today. I have always said that mine is a strong community, and that we are at our best when we act together. Nothing demonstrates that more than the Dons Trust and its creation of a brand-new football club to replace a much-loved old one.

In just nine years, the club has come a long way and made a big impression not just on me, but on many Members and on the wider football world. When we lost our football club 10 years ago, we lost some of our pride in our community. Well, we have got it back, but we do not want anything like that to happen to anyone else, and we believe that we now have an opportunity to ensure that it does not. So I say, on behalf of every supporter of every club rooted in every community, “Come on you Dons!”

18:14

[The Minister for Sport and the Olympics (Hugh Robertson)]

That is a difficult one to follow, Mr Deputy Speaker.

I congratulate the hon. Member for Mitcham and Morden (Siobhain McDonagh) on securing this debate and on the great interest, knowledge and enthusiasm with which she has promoted her local club. I genuinely thank her for that; one of the great things about my job is that it is not always a terribly party political post. I take great pleasure in the fact that Members from both sides of the House want to come together and praise the great work done by sports clubs in their local communities.

I associate myself entirely with the remarks that the hon. Lady made about Alan Keen. He was a great friend. I am not a good enough footballer to have played much football with him, but I played a great deal of cricket with him. He was a remarkable cricketer for a man in his 60s and a great sports enthusiast. Many people across the House miss him greatly.

I congratulate AFC Wimbledon on their promotion to the Football League this season. That was well merited and, as the hon. Lady said, a fantastic example of what can be achieved. It was the culmination of a great many things, many of which she mentioned in her speech. However, as she correctly said, it is, just as importantly, an example of what can be achieved through the power and determination of supporters—I am thinking particularly of the three gentlemen whom she mentioned. It is the supporters of AFC Wimbledon who, through their financial acumen and leadership, have driven this success. That is a great model for what fans can achieve and a great example, dare I say it, of the big society in action. I am delighted that their achievements have been recognised by Downing street.

In the coalition agreement, the Government made a commitment to work with the football authorities—the Football Association, the Premier League and the Football League—in this country to encourage reform of football governance, including measures that would encourage co-operative ownership of football clubs by supporters. Like the hon. Lady, I pay tribute to the work of the Select Committee on Culture, Media and Sport. The Government have supported its report and recommendation that football supporters should have much more of an active role in the running and decision making of their clubs. In our response to that report, we have suggested a number of ways in which we believe that may be achieved.

The first is through fans being better informed about a club’s activities—for example, its financial standing, particularly, and the identity of its owners. Secondly, supporters ought to be represented or consulted in the club’s decision making. That will help to prevent such unpopular decisions as a club’s moving miles from its traditional fan base, as was the case with Wimbledon FC. Thirdly, supporter and supporter-run groups ought to have a formal share or ownership in their club.

Following the Select Committee report, we have given the football authorities—the FA, the Premier League and the Football League—the time to determine the best way of achieving those goals. In their response to the Select Committee process, they have the opportunity to work together collaboratively—they have not always done so in the past—for the long-term benefit of the game.

We have asked those football authorities to bring forward their proposals in three key areas by the end of February this year. The first is the reform of the FA board—a long-running sore since the Burns review. Secondly, there is the relationship between the board, the various FA committees, the council and the shareholders. Thirdly, and most relevantly to this debate, there is the introduction of a licensing system for all professional clubs, where much more robust rules around financial sustainability, fit and proper persons and directors are laid out. We see that licensing model as the appropriate vehicle for greater supporter representation at football clubs. As I said, the football authorities are due to make public their proposals by the end of February. I hope that the hon. Lady will forgive me if I do not pre-empt that tonight.

The hon. Lady was right to praise the work of Supporters Direct, which has been pivotal in the whole process. It provides fans with the focus and voice to ensure that they can secure influence and ownership of sports clubs and has contributed to the setting up of a network of supporters’ trusts in many sports beyond football.

I recognise that any change in the corporate governance landscape of football ownership will be something of a cultural change. Given that we are trying to modernise and professionalise the governance of football, there will have to be a similar step change in the skills of supporters’ representatives. That will ensure that the success of AFC Wimbledon is repeated across the country and across the leagues.

I will finish where I started, by congratulating the hon. Lady on securing this debate. Crucially, I not only congratulate AFC Wimbledon once again on their promotion and their recent award, but thank them for the excellent work that they do in the community, which as the hon. Lady said was recognised here in a reception in 2009. To conclude, I reiterate the coalition Government’s commitment to encouraging greater supporter involvement in football clubs. With the hon. Lady and many Members across the House, we await with interest the response of the football authorities to the Select Committee’s report.

Question put and agreed to.

18:20

House adjourned.

Petition

Thursday 26th January 2012 Petitions

Thursday 26 January 2012

BAE Systems Jobs in the Humber region

Thursday 26th January 2012 Petitions

The Petition of residents of Humberside,

Declares that the Petitioners support workers at BAE Systems in Brough in their fight to save Humber jobs.

The Petitioners therefore request that the House of Commons urges the Government to support the defence industry by investing in modern manufacturing and regeneration around the Humber and to preserve skilled jobs and apprenticeships in the Humberside area.

And the Petitioners remain, etc.—[Presented by Diana Johnson, Official Report, 14 December 2011; Vol. 537, c. 891 .]

[P000990]

Observations from the Secretary of State for Business, Innovation and Skills:

Government are acting to support those whose livelihoods are threatened and mitigate the impact of any job losses on the local economy. The Department for Business, Innovation and Skills and the Ministry of Defence are in regular contact with BAE Systems and we understand that the company has been exploring all options to avoid unnecessary job losses. Government have put in place the Jobcentre Plus Rapid Response Service to provide a range of support measures, such as training, alongside those offered by BAE Systems.

The Government are doing all they can to work with local partners to encourage new companies and investment into the area. This includes announcing two Enterprise Zones on the Humber which, through a combination of fiscal incentives and a simplified planning regime, will generate both businesses and jobs; helping to rebalance the economy and drive local and national growth. In particular, work is under way to attract offshore wind turbine manufacturers and their supply chain. In addition, the Government have made a conditional offer under the Regional Growth Fund which includes support for offshore wind skills and training programmes on the Humber North Bank, including delivery of 600 apprenticeship places in engineering and 1,000 upskilling qualifications. Government are supporting the defence industry’s export efforts through the UK Trade and Investment Defence and Security Organisation and across Government. We also hope that the Talent Retention Solution website (www.talentretention.biz) will help connect those skilled people looking for a new job in advanced manufacturing and engineering with potential employers.

BAE Systems have confirmed their strong commitment to apprentices and, where individuals are unable to complete their apprenticeships at the Brough site, the Apprenticeship programme has sufficient flexibility to allow those affected to move to other sites to complete their training. Government have committed to help more people benefit from high quality Apprenticeships. On 16 November 2011, Government announced new financial incentives to help small businesses take on a first apprentice aged 16-24 and, in December, confirmed that funding for Apprenticeships in 2012-13 will be increased to over £1.5 billion.

Westminster Hall

Thursday 26th January 2012 Westminster Hall

Thursday 26 January 2012

[Philip Davies in the Chair]

International Development (India)

Thursday 26th January 2012 Westminster Hall

[Relevant documents: Eighth Report of the International Development Committee. The Future of DFID’s Programme in India HC 616 and Seventh Special Report HC 1486 (Government reply).]

Motion made, and Question proposed, That the sitting be now adjourned.—(Mr Newmark.)

14:30

[Malcolm Bruce (Gordon) (LD)]

It is good to initiate this debate under your chairmanship, Mr Davies, and to have the opportunity to debate the United Kingdom’s important relationship with India across a range of areas, of which development is just one key facet.

I am pleased to see one current and one former Select Committee member present. Our Committee decided to undertake a review of the UK development relationship with India against a background of critics of aid—those who either do not believe in it at all or want it cut—homing in on the India dimension as a target for demonstrating that, somehow, it was not justified. Those critics used various arguments saying that, for example, “India is a middle-income country”, “India has significant economic growth”, “India has more billionaires than the UK” and “India has a space programme”. Those are true facts, but they need to be qualified. I hope and believe that the Committee dealt with these issues constructively.

The range of income for middle-income countries is from a little more than $1,000 to $13,000. India is right at the bottom end of that spectrum and in reality Britons are 20 times richer than Indians or, put the other way round, Indians are 20 times poorer than Britons.

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

The right hon. Gentleman may agree that although India is middle-income—quite high and rising every day—at the same time it still has as many people below the poverty line as the whole of Africa. Poverty is also a major factor.

[Malcolm Bruce]

The Committee addressed that argument head-on. It is worth putting on record that the implication of their criticism is that some critics resent the fact that India has billionaires, success and growth. That is what we hope development will bring; that is the whole idea of promoting development. In reality, the UK has partnered India in a constructive way throughout a lot of different dimensions.

It is worth dwelling on the question of space for a minute. India’s supposedly extravagant space programme has absorbed $6 billion in total over 50 years, which has been used mostly to give India the capacity to launch its own satellites. A country that is a subcontinent in itself, with a border dispute with China and in Kashmir, a Maoist uprising over many years in Nepal, a civil war in Sri Lanka and problems across the region, has every reason to want information to protect its own national interest. Indeed, there are many socio-economic benefits, such as being able to monitor the path of monsoons and the impact of development. One Minister said, “If somebody comes to me and says that we have completed a school in X or Y, I can check whether that school has been built without leaving my office, because we have the benefit of these things.” That is perfectly legitimate, proper and proportionate. Developing countries should not be denied aspirations because they have to deal with poverty.

More to the point, it is a fact that in spite of this success India faces substantial challenges in terms of poverty reduction. As the hon. Member for Ealing, Southall (Mr Sharma), a former Committee member, said, there are still 350 million people in India living on less than $2 a day, which is more people in that degree of poverty than in the whole of sub-Saharan Africa.

The focus of the UK’s development programme across the piece is poverty reduction and achievement of the millennium development goals. India needs to be able to deal with those issues in spades, in a sense. It is off-track on MDG 1 on reduction of poverty and on MDG 4 on infant mortality, and badly off-track on MDG 5 on maternal mortality. In these circumstances it is, in the Committee’s view, right and proper that we determine whether the UK’s development assistance can help resolve those issues.

The Department for International Development’s operation report, drawn up since we completed our report, makes it clear that the UK regards development as part of its strategic relationship with India. We should acknowledge that we have a shared history with India, which is contentious but is a fact that has engaged both our countries for several hundred years and, if one parks the fact that they have not all been good and that there have been mistakes and memories that we would rather not have to recall, it is also true that we have achieved a depth of understanding in that relationship about culture, a common language, the same sense of humour and a shared interest in cricket.

There is a natural affinity between the two countries, which is borne out by the scale of the diaspora in the UK and the scale of trade and investment. It is interesting to note that investment between India and the UK is greater than between India and the rest of the European Union put together. These significant, positive benefits reinforce the case made by many hon. Members, who believe that the purpose of development is to deliver poverty reduction and the MDGs and, in the long term, also to create viable states that can develop economically and can and will become development, trade and investment partners. That is precisely what is happening between the UK and India.

In the press release accompanying the publication of the report, which focused on the key issue—I do not often quote myself—I said:

“The test of whether the UK should continue to give aid to India is whether that aid makes a distinct, value-added contribution to poverty reduction which would not otherwise happen. We believe most UK aid does this.”

The other issue that critics raise is that India has a responsibility, as its income rises and economic performance improves, to deliver its own poverty reduction. That is true. The fact is that India is doing a huge amount to achieve that. The transfer of wealth from the rich to the poor and the programmes on health, education and work, which are raising people out of poverty, cost tens of billions of dollars and are funded by internal resources managed through the Indian Government. By comparison, the £230 million a year of UK aid is a small amount. Is it so small that it does not matter? We concluded that, qualitatively, that aid was able to help Indian authorities and agencies achieve a faster reduction in poverty and an aspiration to deliver off-track MDGs faster than would otherwise be so and that it was, therefore, beneficial. That is also the view of the Indian Government, which is why they welcome the UK as a partner. It is clear that in these circumstances the relationship is right and proper and should continue.

We looked at DFID’s priorities to try to assess whether we believe that it matched the needs as the evidence presented to us suggested. We found, first, from objective evidence, that India is an unequal society—tackling that inequality is clearly a challenge and a responsibility for Indian politicians and Ministers—and that the contrast between the richest and poorest states is huge. Some of the poorest states in India are poorer than some of the poorest states in Africa. In that context, DFID had identified that it would concentrate a high proportion of the development in four of the poorest states in India: Bihar, which the Committee visited, Madhya Pradesh, which the Committee also visited, Orissa and West Bengal, which has changed its name to one that I cannot now recall. Those are the poorest states, where a relationship has already been established and where there is evidence that DFID’s engagement can accelerate the action to meet the challenge of reducing poverty.

One thing that shocked the Committee, although perhaps those of us who know India well should not be so shocked, was the appalling state of sanitation across large parts of India and, indeed, the acceptance of the appalling state of sanitation. Committee members were genuinely shocked by the figures: 500 million or 600 million people are practising open defecation every day, without any access to the basics of hygiene. That is one of the most fundamental problems that India has to face and one of the reasons why it is off-track on some MDGs.

[Jeremy Corbyn (Islington North) (Lab)]

I compliment the right hon. Gentleman on the report and his speech. During the Committee’s deliberations, was it aware of the disproportionate use of bad sanitation by the Dalit peoples and the discrimination against the Dalit peoples throughout the country? That leads to lower life expectancy and worse health outcomes for them than for the rest of the population.

[Malcolm Bruce]

We were, and I will come to precisely that point. I am grateful for the intervention.

Let me give hon. Members the example of a meeting that Committee members had in a village in Bihar. There was a discussion about sanitation. It was about the extent to which people there had a problem because the surface water was so badly polluted that they could not use it, so they had started drinking from wells polluted with arsenic and iron. When we got into the discussion, it became apparent that there was no shortage of surface water, but it was heavily polluted because there was no orderly way of managing sanitation. People just went to the toilet wherever they wanted to go—anywhere, anytime—and were polluting their own water supply. Indeed, some of them said, “We’re killing ourselves and one another by the way we behave.”

There was a huge divide, I have to say, between the attitude of men and the attitude of women. The women said, “The least we should do is designate certain areas for sanitation and manage them. That will enable us to have clean areas.” The men said that that was sissy, namby-pamby nonsense, that they had always done it wherever they wanted to and that that was what they should always do. It is very difficult for outsiders to get involved in that, but we did watch the argument and concluded that it showed that community-led health and education programmes were as vital as anything.

As a result, the Committee recommended that DFID give a higher priority in its programme to sanitation. We very much welcome the Government agreeing to double the resource that they will put into sanitation in the programme. To be honest, the Committee might want to go even further, but we appreciate the fact that the Government have done that. We welcome it entirely. I will not detain hon. Members by looking for the exact quote in the operational report because I do not have it to hand, but I think that I am right in saying that the expectation is that DFID’s programme will give 5.5 million or 6 million people access to proper sanitation. Proper sanitation usually means pit latrines and associated things. That is 5 million or 6 million people who do have not such sanitation now, but it still leaves about 550 million people who will not have been reached. Of course, there are other people engaged in that work, but the provision is a long way short of what is needed.

The second issue that we were especially concerned about was malnutrition. Those who follow the progress of developing countries will know that as poverty falls and incomes rise, there is a correlation with a reduction in malnutrition, especially in children. However, in India, that is not happening. There, malnutrition is decreasing at only a quarter of the normal rate. Again, there appear to be quite a lot of social awareness problems. It is customary, for example, for women to diet during pregnancy in order to have small babies, which are easier to deliver. No one points out to them that they may be small babies, but they are likely to be severely malnourished and, indeed, at risk of not surviving. It is said that the word “nutrition” and the concept of nutrition do not even translate into quite a number of indigenous local languages. We welcome the fact not only that nutrition is a target area for DFID, but that the particular target is the first 1,000 days of a child’s life, because all the evidence is that that is critical to whether children survive beyond the age of five and grow up.

The connection between the issues that I have mentioned and maternal and child health is pretty self-evident. That is clearly an important priority, because the maternal health MDG is the one that is most off-track in India. The fact that that is an area where DFID can make a contribution is extremely welcome.

I will now deal with the intervention by the hon. Member for Islington North (Jeremy Corbyn). Social exclusion was an issue on which there absolutely was focus. It is a slightly delicate issue, but one on which DFID and the Indian Government can to some extent work to reinforce each other. It is evident that the poorest people, the people whose communities are furthest off-track in relation to MDGs, are those who are socially excluded: the Dalits and other low castes, the hill tribes and minority religious groups. When one talks to the Indian Government, they say, “Our constitution and our political drive is to include these people,” but given that, culturally, they have been excluded from the community, it is very difficult to enforce that. Sometimes it is helpful for a development partner to identify with statistics and information why the problems persist and the practical measures that could be taken to tackle them. I think that DFID has said that it will prioritise that.

The final issue, on which we would welcome an update from the Minister, was the commitment by the Government, which is entirely consistent with the idea that India is in transition out of being a development recipient to becoming perhaps a development partner, that 50% of the UK programme in India should, by the end of the programme, be targeted on private sector development. In principle, the Committee wholly supported that, because ultimately development is about generating a viable private sector that can generate a tax base, wealth and everything else to sustain the public services.

However, we were not entirely convinced as to whether DFID had any idea about how it would deliver on the target and with what partners. That is not to say that it was an illegitimate target, but I think that we are entitled to say to DFID that it needs to flesh out what it intends to do. I therefore ask the Minister these questions. How can the Government ensure that that private sector development reaches the poorest states and the poorest communities, rather than the low-hanging fruit, which are easier to reach and for which the market might deliver anyway? What might be the role of CDC in its newly revamped format; will it be part of that? What about the role of UK Trade & Investment? We discovered that it is very active in places such as Mumbai, Hyderabad and so on, but does not get to Bihar, Orissa and so on. The question is whether that needs to change.

We accepted, once we had discounted the critics, who simply want to discredit aid and development altogether, that there were legitimate issues about a country such as India, which is developing and creating substantial wealth, technology and innovation of its own, as well as having an aid and development programme. However, when we look inside that, there are two things that absolutely justify the maintenance of the partnership. What I am talking about is entirely in the spirit of the International Development Act 2002, which is focused on poverty and the MDGs.

First, the Indian Government are putting very substantial resources into redistribution and raising taxes to fund their own poverty reduction programme; and they are lifting millions of people out of poverty each year. However, the pace at which they are doing that needs to be accelerated. The UK is important as a partner less because of the resource that we are putting behind that and more because of the expertise and technical help and support, backed by resources, that we can put in. That will help to achieve a situation whereby hopefully by 2015 India will have made material progress towards eradicating poverty, the off-track MDGs will be coming back on-track and we can move from a relationship whereby India is a client state for development to one whereby we are states that are co-operating on partnership and development. Indeed, that is already happening in third countries—for example, in parts of Africa.

The Committee’s conclusion was that to have terminated the aid programme in India prematurely would have deprived millions of people in India of an opportunity to be lifted out of poverty, and Britain and India of developing a relationship that could be mutually beneficial to the poor people not just in India but in Asia, Africa and elsewhere in the world.

On that basis, I am happy to say that the Government are fundamentally right to stay in India. We have made some constructive suggestions about what the priorities should be, some of which they have accepted. We also have some questions which the Government will need to answer over time if they are to fulfil their own stated ambitious objectives.

14:50

[Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)]

I endorse everything that has been said by the right hon. Member for Gordon (Malcolm Bruce) in his position as Chairman of the Select Committee.

Over Christmas and new year, I started reading the Max Hastings tome, “All Hell Let Loose: The World at War 1939-1945”. In his introduction, he explains that one of the most important truths about war, as in all human affairs, is that people can interpret what happens to them only in the context of their own circumstances. The fact that objectively and statistically, the sufferings of some individuals are less terrible than those of others elsewhere in the world is meaningless to those concerned. The same logic can be applied in the case of India and aid.

I am a relatively new member of the Select Committee, and India was my first overseas experience. Since then, the Committee has visited the Democratic Republic of the Congo, Rwanda, Burundi, and, in December, South Sudan. It is when one visits these places that the relativities of poverty strike home.

In New Delhi, we visited a slum inhabited by third-generation Bangladeshi immigrants; children as young as two and three were rummaging through bins to find waste to recycle. They were paid 1 rupee for a kilo of glass. The community had hooked in—dangerously and, needless to say, illegally—to the electricity supply with the most primitive devices that I have ever seen. In Burundi, the prospect of electricity for a local community is a pipe dream. People must interpret what happens to them in the context of their own circumstances, which is why India must be placed in context. It has a population of 1.2 billion people, 400 million of whom live on less than $1.25 a day, and 800 million of whom live on less than $2 a day. I am pleased that the Government and the Select Committee are not far apart in their assessment of India, which was pored over in some detail by the Chairman just a few moments ago.

I want to highlight just three issues from the report: sanitation, which has already been covered; private investment; and discrimination and social exclusion. On sanitation, the Government agree with the Select Committee’s view. The right hon. Member for Gordon mentioned Bihar. On our visit, the Committee split into two groups; one visited Bihar and the other visited Madhya Pradesh. I did not visit Bihar, but when we all joined up together, we discussed our experiences.

In Bihar, a state of 90 million people, public defecation is routine. In some parts of the state, toilets are available but people still choose not to use them because they are considered unhygienic. Water supplies beneath the ground are contaminated with minerals, while above-ground supplies are contaminated with waste. I am therefore pleased that the Government agree with the Select Committee’s view that the emphasis must change from health to water and sanitation. Put simply, poor sanitation is creating a huge number of health problems in the country.

On social exclusion and discrimination, despite the fact that untouchability was outlawed by article 17 of the Indian constitution, it is none the less alive and well. In Madhya Pradesh, we visited a Dalit village and had the opportunity to talk to some women and girls. We asked for examples of discrimination, and two were offered immediately. Manual scavenging, which has been outlawed, is still rife. For anyone who does not know what it is, let me explain. People who are in lower castes have to carry the night waste of people from a higher caste, and they are paid 8 rupees a month per household. One lady explained that she carried out that task for 100 houses. It led to skin infections and miscarriages.

Another example is of a young girl who, because of her under-nourished state, looked about six or seven, when in truth she was about 13 years old. She explained to us that when she went to season her food at school, she was told by the teacher to stop. She was not allowed to put her hand in the same salt as the other children. When she pluckily replied, “I am a human being, too,” the teacher said, “No, you are not.” That is utterly extraordinary and demonstrates that discrimination is still alive and well. There is much work that needs to be done in that area. As the right hon. Gentleman said, it is good that that is recognised, both in our report and in the Government’s response.

The third element is the Government’s private sector investment policy. I must declare that I am a sceptic. I agree wholeheartedly that jobs and growth take people out of poverty, but I remain unconvinced by the Department for International Development’s approach. I direct Members’ attention to paragraph 75 of the report. In an evidence session, I asked the Secretary of State for more details about how the investment would take place. He replied that

“you do not have to have a prescriptive line on this.”

I disagree. This is British taxpayers’ money, and it is the Select Committee’s job to ask the difficult questions. It is the Secretary of State’s role to provide the answers, and he could not do so, as the record demonstrates.

The Government’s formal response puts a little more flesh on the bone. Like the right hon. Member for Gordon, I want the Minister to give us more detail on what investments will take place. When we were in one of the villages in India, we met a woman who had bought a buffalo. She then bought another buffalo through a micro-finance project. When she paid off the loan, she said of her work-shy husband, “He now thinks that it is his business,” which demonstrates that those types of subtleties take place across the globe. Half of the money from the Government programme will go to private investment. We must be told how that investment will take place, because not everyone can buy buffaloes to provide milk for the local communities and repay the loans. I therefore remain sceptical, but I would be delighted to be proved wrong.

In conclusion, there is a widespread recognition that the development relationship with India has to change, but I urge caution. The Daily Mail would have us believe that the Indian Government are building space shuttles, which is certainly not the case. In truth, the satellite technology that they are using is more about putting in place communications systems for their vast country, not space exploration.

India is a nation of extremes—wealth and poverty, and freedom and oppression. There is one issue that we must not forget. If we believe that the millennium development goals are the benchmarks by which we will eradicate global poverty, India must be part of the solution. With 400 million people living on less than $1.25 a day, and a further 800 million people living on less than $2 a day, we will never achieve our goals unless India is part of the solution. On that cautionary note, I will end my contribution.

14:58

[Martin Horwood (Cheltenham) (LD)]

It is a pleasure to serve under your chairmanship, Mr Davies, to follow the hon. Member for East Kilbride, Strathaven and Lesmahagow (Mr McCann), and to talk in a debate initiated by my right hon. Friend the Member for Gordon (Malcolm Bruce), whose expertise in this field is second to none in this Parliament. Moreover, he has been an enormous help to me in my role as chair of the Liberal Democrat committee on international affairs, although I realise that today he is speaking in a less partisan role.

I also bring a little bit of personal experience to this debate. I worked for a development agency in India during the 1990s. I was seconded by Oxfam in the UK to the fledgling organisation, Oxfam India, which already had a locally registered charity and an overwhelmingly Indian staff force. Indeed, we had a Hindi slogan, milka hum garibe per pa sekte heh vijay; if my Hindi is not too rusty, that means that together we can overcome poverty. It was an important message that that was not a western import, but something that mattered to all the citizens of India. With your indulgence, Mr Davies, and because I am sure that it is within the terms of the debate, as Oxfam is a DFID partner, perhaps I may congratulate Oxfam on the 60th anniversary this year of its presence in India, and congratulate Oxfam India on its admission as a full member of Oxfam International with an Indian board and a completely Indian staff. That changing relationship is, in microcosm, an illustration of the changing relationship between Britain and India.

Traditionally, India has been the largest recipient of UK aid, and the Select Committee and many other people, as my right hon. Friend said, have raised questions about the continuing nature of Britain’s aid programme with India. India is now a middle-income country, but it still has more people living below the notional poverty line of $1.25 a day than the whole of sub-Saharan Africa. The future DFID programme will focus on many of the poorest states in India. States such as Bihar and Orissa are among the poorest in the world, and would certainly be low-income countries if they were separate nations.

On nutrition, the Select Committee’s report draws attention to some remaining alarming facts. India scored 23.7 in the 2009 global hunger index, putting it in a category where levels of hunger are considered to be alarming; it is at a level comparable to that in Burkina Faso and Zimbabwe. Almost half of Indian children are undernourished, which amounts to one third of the world’s undernourished children. As my right hon. Friend the Member for Gordon said, India is far from on track to achieve some of the millennium development goals.

Recent research by Andy Sumner of the Institute of Development Studies shows that 70% of people around the world who live below the poverty line live in middle-income countries, where income may be badly distributed, and there may be issues of equality as well as development and superficial growth. It may be attractive superficially to withdraw aid from middle-income countries, but it must be done carefully and gradually, because there are existing commitments to anti-poverty programmes, many of them involving, as my right hon. Friend said, public health, education and empowerment, and not simply providing goods and structures.

The Select Committee’s report rightly noted the scale of the Indian Government’s expenditure on things such as nuclear and space programmes, which have been controversial, but they identified them, rightly in many cases, as an essential part of India’s development. They are fundamental to India’s development of energy infrastructure, and to telecommunications infrastructure, and flood monitoring, which is a direct benefit to some of the poorest people in India. Without a satellite system and the so-called space programme, it would be difficult for India accurately to monitor the impact of flooding, and to map flood-risk areas. It may as well be criticised for developing a telephone system or solar energy. I am glad that the Select Committee agrees.

There seems to have been a large measure of agreement between the Select Committee and DFID; not only does the Committee support many of the emerging priorities for DFID, but the Government, in their response to the report, agreed with a large number of the Committee’s recommendations—the focus on poorer states, sanitation, nutrition, and the priority given to maternal and child health, social exclusion, and working with the private sector.

I heard the comments of the hon. Member for East Kilbride, Strathaven and Lesmahagow on the relationship with the private sector, but when I lived in India and worked for a development agency there, I became aware that the contribution that organisations such as Oxfam, and even Government programmes the size of DFID’s, make to poverty on a grand scale was dwarfed by the potential for the private sector to impact on people’s lives, for good or ill. There are good examples of Indian corporations such as Tata pursuing effective social responsibility programmes that are much more developed than anything we in this country tend to call corporate social responsibility. The reality of poverty is often staring them in the face every day, and the Indian corporate sector has a proud record of poverty alleviation.

At the same time, other companies go in recklessly, especially to the poorest states, and exploit natural resources without properly consulting local populations, causing immense damage, sometimes environmental, often social and often costing many lives. The biggest and most famous example is Bhopal, but there have been others on a smaller scale since. Wearing my hat as chair of the all-party group on tribal peoples, I know that some of those examples involve tribal people in states such as Orissa, where companies such as Vedanta Resources were exploiting aluminium potential through bauxite mining, and could easily have trashed the local environment that was precious to the tribal people there.

We must be cautious in our approach to the private sector, but DFID’s instincts are absolutely right, and the private sector can sometimes bring light-footedness, flexibility and imagination to development, with an overall potential that is much greater than simple Government-to-Government development aid. That high level of agreement between the Select Committee and the Government is very welcome.

[Malcolm Bruce]

It is important to note that the Committee is responsible for holding DFID to account for Parliament, and I want to make it clear to my hon. Friend that we take evidence, and we are prepared to address criticism, but that includes backing a Department—particularly when it is under attack for what it is doing—addressing some of the critics, and helping to confront some of the arguments the other way. It is not that we instinctively want the Department to work, but we have a constructively critical approach. The agreement is based on a thorough analysis of the evidence, not some sycophantic, cosy relationship. It is important that that is understood.

[Martin Horwood]

My right hon. Friend makes an important point. I did not mean to imply even that the Committee had not found fault with DFID’s programme. It has given a clear direction on things that in many cases must change, but it is welcome that the Government have accepted many of the Committee’s recommendations straightforwardly.

The Secretary of State has said that the UK is in the final mile of its aid relationship with India, and that represents an honest assessment of Britain’s maturing relationship with one of the world’s leading new powers. Increasingly, the way in which countries such as Britain will help to alleviate poverty in India is not necessarily through aid, but through fair and open trade. The European Union’s proposed free trade agreement with India—it might even be mentioned at the forthcoming European Council if we are lucky—is important.

India and Britain are allies on climate change and the ongoing United Nations framework convention on climate change, and I think both appreciate the risk to the poorest people in the world, including those in India, and the need to emphasise adaptation to climate change as well as mitigation in the international climate finance fund, and Britain’s climate finance programme. They are collaborators on international peace and security, and they have shared experience on development issues, which could be valuable to countries around the world.

The time is coming when the last vestiges of a colonial relationship should be laid gently to rest and handed over to the historians. India and the United Kingdom now need to stand side by side in the world, standing up for shared values of democracy, respect for the rule of law, and human rights, and with deep concern for the world’s poor and how to help them in practical and cost-effective ways through development assistance. Both countries have an enormous amount to teach the rest of the world about development. The eventual end of Britain’s aid programme to India, when it comes, will be a proud moment to be celebrated by both parties, but it should not be the end of the story.

15:09

[Barry Gardiner (Brent North) (Lab)]

I am delighted to take part in this well-informed debate, and I pay tribute to the right hon. Member for Gordon (Malcolm Bruce), who chairs the Select Committee, for initiating it. He spoke with great knowledge and tact, and he put his questions and criticisms in a probing rather than a partisan way. I hope the Minister will be able to respond to many of them when he sums up.

I would like the Minister to clarify the Government’s position on aid to India somewhat in the aftermath of the Select Committee report. India is home to one third of the world’s poor and to more than 20% more poor people than all of sub-Saharan Africa. Across India, a child dies every 15 minutes from a preventable disease, one in three people remain illiterate and more than 400 million Indians have no access to electricity.

As the right hon. Gentleman outlined, poverty is largely focused in four Indian states: Bihar, Madhya Pradesh, Orissa and Paschim Banga—the state whose name I think he was looking for, which used to be known to us as West Bengal. Between them, they are home to nearly one fifth of the world’s poor.

In 2009-10, Britain spent £295.1 million on development projects in India. Of that, 45% went to the Indian national Government, while 48% was spent in partnership with those four states, which are the poorest in India. Britain’s aid targets were health, education, rural poverty, trade development and civil society. Its projects are achieving quite significant progress, providing 9 million slum dwellers with access to water and sanitation last year, putting 30 million more children in primary school since 2003, saving 17,000 lives per year by improving health care and lifting 2.3 million people out of rural poverty since 2005.

The Indian federal Government no longer believe themselves to be an appropriate recipient of development aid—at least not since our Government asked whether they thought they should receive it. Previous Governments had adopted a different approach, saying that that was not a question they would ask the Indian Government and that they simply wished to provide aid to achieve the millennium development goals for the world. Of course, once we ask the question, it is difficult for a proud federal Government such as India’s to say that they still want aid. I think the Government made a mistake in asking that question, but it is on the record, and both countries have set out their position, so it has to be respected.

The International Development Secretary gave a mixed message on the future of DFID’s Indian programme in his speech on Christmas eve, and we should probe this further. He defended the Indian aid programme, highlighting the fact that

“India is a place where there are more poor people than the whole of sub-Saharan Africa”

and stressing the success the Indian Government have had. However, he went on to say:

“Now is not the time to stop the programme in India but I don’t think we will be there for very much longer.”

The Secretary of State is an eminently reasonable man, for whom I have tremendous respect, and he has done a first-class job since he arrived in the Department. He is a reasonable man and he speaks reasonably, but others do not always speak reasonably, and the right hon. Member for Gordon outlined their argument. Indeed, in yesterday’s debate on UK-India trade, which took place in this hall, the hon. Member for Banbury (Tony Baldry) put things rather differently. He spoke of India’s economic growth of 7% a year, and said that, with its nuclear and space programme, it had the responsibility to ensure that the benefits of that growth were more evenly shared among its people.

I want to take this opportunity to echo the words of the right hon. Member for Gordon and to address that distortion. India is on course to reduce poverty from 55% in 1990 to just 22% in 2015. No other country has ever managed such a sustained reduction in poverty, taking one third of its population out of poverty in a mere quarter of a century. India has put huge resources, proportional to its budget and its GDP, into poverty reduction. It spends a higher percentage of its budget on education than we do in the UK, its free food programme is the largest hunger-alleviation programme in the world and the employment guarantee scheme has been incredibly successful at getting people into work wherever possible. Since 2004, India has increased the percentage of GDP it spends on health, education and social services from 5.35% to 7.2%. As I say, it spends a higher proportion of its annual budget on education than we do in the UK—12.7%, compared with 11.5%.

Despite India’s impressive growth and her progress on infrastructure and urban development, and despite the fact that her middle classes have quadrupled in size in the past decade, India simply could not afford to alleviate her poverty on her own, even if she poured all her resources into it. A 2009 World Bank report noted that even if India legislated for a 100% marginal tax rate, the funds raised would plug only one fifth of its poverty gap. The idea has been peddled that India just needs to tax its flowering industries and its billionaires a little more, but that is a myth, and I am delighted that the Chairman of the Select Committee has nailed it this afternoon.

We must continue to support India in alleviating poverty. That is an international responsibility, and we must meet it. Will the UK Government commit to tying our aid to India to net reduction reductions in poverty and to India’s increasing ability to pay for poverty reduction itself? In that way, any decision to stop helping some of the world’s poorest people out of poverty would be based on facts on the ground, which can be established and quantified, rather than on what sometimes seem to be the whims of the populist press in the UK.

Those who argue for an end to aid should consider how things would be if Britain bordered the world’s next superpower and was surrounded on all sides by failed and unstable states, some with nuclear capacity. Would they then be so critical of relatively high spending on defence and space?

While I welcome the renewed focus on the three poorest states, I think we need clarity. As yet, we have had no comprehensive plan for how DFID will work with the private sector, but only a small number of specific examples. There are hints that much of this work will involve microfinancing, but will the Minister clarify the situation and perhaps expand on what is being done?

The Select Committee has criticised DFID’s internal knowledge of, and experience with, the private sector, particularly in-country. The delivery of such a large fund will require a far greater specialist team, but DFID has announced no plans to implement one. In total, DFID has only 58 private sector specialists, divided between all its projects across the globe. Does the Minister propose to enlarge that team to deliver the micro-level projects that such private sector funding may require?

In his Christmas comments, the Secretary of State described the fund as returnable to the taxpayer, but neither the India project plan nor individual project descriptions give any explanation of what he actually meant. The most likely explanation is that he was alluding to the fact that a large percentage of the funding will be delivered through microfinancing, which is repayable to the fund, and which can then be reinvested. If that is the case, describing it as returnable to the taxpayer in the UK may be misleading. If it is not the case, and the money will literally be repaid to DFID and then the Treasury, will the Minister tell us? We need a guarantee that when these funds are returned, they will be reinvested in full in India to alleviate poverty there.

Another area of concern is the long-term future of the India programme. The Secretary of State has guaranteed funding until 2015. We should certainly support that, but he has also said that he does not think it will continue for much longer, and that he sees it as a short-term programme. That troubles me for two reasons: first, insecurity of funding streams makes planning budgets at national, state and local levels nearly impossible. Deliverers need to be able to count on funding streams in the medium to long term to plan budgets efficiently and effectively. Secondly, although India has made progress in combating poverty, as I outlined, by 2015, 22% of the population will still be living in poverty. We need a guarantee that any reductions will be tied firstly to the rate of reduction in poverty, and, secondly, to increases in India’s capacity to bear that burden itself.

I welcome the tightening of focus on the three poorest states, but not if it comes at the expense of the many millions of people living in poverty in other Indian states. For example, Orissa, which was the fourth bilateral partner state with DFID, has, in large part through DFID’s work, succeeded in reducing the poverty rate from 21% of its population in 2006 to 4% in 2011. That is a phenomenal achievement. However, the population of Orissa is 36 million, so the remaining 4% means that there are more than 1.5 million people still below the poverty line. That is a population equivalent to the whole of Gabon, Gambia or Botswana. Yet the Department appears to be shifting its focus to sub-Saharan Africa.

The Government are, I think, pushing in the right direction on their India aid programme, but we need clarity about the detail, and we do not have that clarity yet. Will the Minister flesh out what the increased private sector focus will look like, and how and by whom it will be administered? The Government need to provide a sense of security to central and state Governments in India by guaranteeing that any cuts to the programmes will be made for the right reasons, and they need to stop playing up to the hysterical and factually incorrect opinions that too often come from their Back Benches.

15:22

[Jeremy Corbyn (Islington North) (Lab)]

I welcome the fact that we are having a debate on India and on human rights; I also welcome the Select Committee reports and the responses by DFID and the Foreign Office. However, it is unfortunate that two debates are being conflated into one afternoon. Traditionally, for the past 10 years or so, there has been a specific one-day debate here on human rights. I hope that what has happened today is not a harbinger of a future when the human rights debate will be added to something else, rather than being given a stand-alone debate. That is not something for Members at this sitting to decide, but I hope the message will get back to the Backbench Business Committee that an undertaking was previously given that human rights would take up a whole day throughout this Parliament. I hope that that will be adhered to in future.

I want, if I may, to refer to both human rights and India in the debate, which I understand goes on for three hours and can cover both subjects. Am I correct on that, Mr Davies?

[Philip Davies (in the Chair)]

The first half is about India. The second half is about human rights.

[Jeremy Corbyn]

So why does the Order Paper say they are together?

[Philip Davies (in the Chair)]

One follows the other. The next debate is about human rights.

[Jeremy Corbyn]

And at what time are we concluding this one?

[Philip Davies (in the Chair)]

We conclude this first and the next debate will be about human rights.

[Jeremy Corbyn]

So I am half right; I have got half the time.

[Philip Davies (in the Chair)]

The hon. Gentleman can speak in the next debate—I think he indicated that he wanted to speak in it.

[Jeremy Corbyn]

Yes indeed.

[Philip Davies (in the Chair)]

Human rights should wait for the next debate, but if the hon. Gentleman wants to speak about India he can do so now.

[Jeremy Corbyn]

I shall briefly make a couple of points on India. My points will be half made, because, as I said, time is restricted and it should not be.

I welcome what has been said about the enormous poverty in India, and the number of people involved. I do not agree with the view in the popular press that we should not give aid to India; I think we should. I want to draw attention, as I did when I intervened on the right hon. Member for Gordon (Malcolm Bruce), to the treatment of Dalit peoples. I say that because I am chair of the trustees of the Dalit Solidarity Network.

Dalits are the largest group of people in the world who are systematically discriminated against on the basis of their descent and caste. They perform the worst jobs in the dirtiest conditions, and have the shortest life expectancy, the lowest level of education, the worst housing and the lowest pay and employment levels of any group in India or, indeed, the rest of the world. After numerous meetings with DFID, I accept its assurance that British aid is tied; the Department makes the point that we are not going to be involved unwittingly or otherwise in discrimination against Dalit peoples through our aid programmes, and that several projects and programmes enhance the lifestyle, values and opportunities of Dalit peoples. I welcome and support that aspect of what is happening.

I want to draw attention to the issue on a wider scale. It was raised at the Durban millennium summit in 2000 and will no doubt continue to be raised elsewhere. It cannot be right that a country with India’s aspirations to modernity and to taking its place in the world, including a permanent place on the UN Security Council—a country that is obviously a major power in every aspect—can allow such discrimination to continue. Whenever I have raised that matter with Ministers or politicians in India, during visits to India, or with the high commission here, those concerned always point to the Indian constitution, which was written by the great Dr Ambedkar, who was himself a Dalit, although he later changed his faith from Hindu to Buddhism. Dr Ambedkar’s constitution is a remarkable document and clearly outlaws discrimination on the basis of caste or descent. However, it is equally clear that in reality Dalit people’s opportunities to get access to justice do not exist in many parts of the country. Denial of access to the law, discrimination against them by the police and by employers, and the traditions that are continued in many villages, are inimical to the interest of Dalit people.

[Martin Horwood]

The hon. Gentleman is right to draw attention to discrimination against Dalits, and not just Hindu Dalits. There is continuing discrimination even among people who identify themselves as Christians, or even Buddhists or Muslims, who are from Dalit families and communities. However, he must acknowledge the long-standing campaign by the Government of India to reduce discrimination and provide work opportunities. The Government should take considerable credit for the progress that they have tried to make with an admittedly enormous social problem.

[Jeremy Corbyn]

The hon. Gentleman makes a reasonable point, and I accept and understand that, because of the constitution and pressure from leaders of the Dalit community—which he rightly points out is not entirely Hindu but includes many different faiths—for a long time the Government of India have established reserved occupations and employment levels for people of Dalit descent. There is therefore a certain level of public employment of Dalit peoples, which is often the only access to any kind of normal, sustainable employment. The discrimination operates through the informality of other work, and through discrimination by a large number of private sector employers—but, interestingly, not usually the international ones; it is much more likely to be the smaller, local businesses. Some progress has been made, but the protection of a proportion of employment in public service for Dalit people often enables Governments to feel satisfied that they are doing their bit. However, it does not address the wider issues of the fundamental discrimination that goes on elsewhere.

I know that the Minister is fully aware of the matter, and I hope that the Select Committee on International Development, and the rest of the world, will keep its eye on it. The way in which 200 million people in India and in some other countries, such as Tibet, are treated because of discrimination by caste and descent is simply wrong. Apartheid in South Africa was wrong, and Dalit discrimination is equally wrong anywhere in the world.

15:29

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

I pay tribute to the right hon. Member for Gordon (Malcolm Bruce) and to the Foreign Affairs Committee for its inquiry. I also welcome the contributions to this debate.

A range of issues have been cited, including sanitation, health, tackling discrimination and exclusion, and the continued need for a focus on poverty reduction, given the changes proposed by the Government in respect of the important role that the private sector needs to play in Indian development. We must consider how we make such a transition in a way that maintains focus on alleviating poverty and tackling inequality.

India is a hugely important country for our aspirations in meeting the millennium development goals, for the future of international development and for economic development and growth. As the right hon. Member for Gordon and others have pointed out, our two countries not only have historical links—as shown by the success stories of the UK’s Indian population—but a strong future to look forward to and be optimistic about, if we play our cards right, both in terms of our work in international development and in terms of our economic relationships. Those relationships include the strengths that we have through our diaspora communities here in this country and their trading and family links with India, as well as their interest in alleviating poverty in India. Of course, the diaspora communities play a key role by providing remittance aid and support to India. We have a rich array of mechanisms for contributing to India in order to see it thrive and, in time, we ourselves will benefit from helping India; indeed, we are already benefiting.

We can rightly be proud of the progress that we have all worked for in making our contributions through the UK aid programme and other links towards India becoming a middle-income country. Although India takes the credit for getting to that stage of development, our relationships with and contributions to India should not be underestimated.

As right hon. and hon. Members have pointed out, 72% of the world’s poor now live in middle-income countries and, given that fact, we must change the way that we provide development aid. Once India was squarely in the group of developing countries, but now it is a roaring economic success story. The three decades following India’s independence saw minimal progress, but that legacy was cast aside in the next three decades, as India enjoyed staggering growth figures. India is one of the fastest growing economies in the world, even at a time of global economic crisis. Its economic growth has topped 7% in just about every year since 1980. As President Obama said during his 2010 visit to India:

“India is not emerging, it has already emerged.”

What is remarkable about India’s growth is that it has not just been dependent on labour-intensive, low-priced exports to the west. Instead, it has been driven by a new middle class consuming domestically produced goods, the rise of service industries and a focus on high-tech manufacturing. Innovation and entrepreneurship have been central to the birth of the new India, which many of us are very excited about, especially those who have an origin there. I myself do not claim to have an origin in India, but many people in my constituency and in other Members’ constituencies do. Their presence in Britain is a positive example of the links between Britain and India.

As the former colonial power, Britain has had a long, if sometimes chequered and challenging, relationship with India, which several Members have pointed out. As we look to the future—not only the future of India, but the future of Britain—we have a unique opportunity to build a new and special relationship between the two countries, which will provide a significant opportunity for the UK economy in the years ahead. We can already see the benefits of that relationship, and in the years to come there is no reason why we should not continue to see them.

Although our aid programme is not about promoting economic opportunities, as several Members have pointed out, if we can establish an appropriate aid strategy, there will be great dividends, not only for our economy but for India’s. It will be of mutual benefit for the two countries.

Having said that, there are two Indias and that has been reflected in the Select Committee’s report and in the contributions to this debate. One India is vibrant, innovative and at the forefront of a new political and economic powerhouse, but the other India looks much less inspiring. The testimonies that have been given in the Select Committee’s report, some of which were given to the members of the Select Committee on their visit to India, show that there are two Indias. There are references in the report to human rights violations and discrimination, which are faced by particular groups, such as the Dalits, women and other religious minorities. There are also concerns about lack of freedom of speech and other human rights violations, and we should maintain our focus on those issues.

The reality is that, behind India’s story of success, there is also deep poverty, which all the Members who have contributed to this debate have highlighted. There are 800 million people in India living on less than $2 a day, half of whom—400 million people—live on only $1.25 a day.

A third of the world’s poor live in India. As several hon. Members have pointed out, there are more poor people in India than in sub-Saharan Africa. Tackling such poverty and inequality must be the focus of our development programme.

Regarding the work that we have already done, when Labour was in power, there was a great focus on reducing maternal mortality in India. Huge progress has been made in that area, but much more needs to be done, given that India still accounts for a fifth of all maternal deaths globally. Child mortality in India has also fallen, but each year 1.83 million children in India still die before the age of five. The Select Committee’s report highlights many of these continuing challenges and, in essence, points to the need for a continued or even renewed focus on alleviating poverty.

Although the promotion of the private sector’s role in providing aid to India is significant, and builds on some of the work done under the last British Government, there are major issues that need to be addressed, as has been pointed out already in this debate. If we are to channel 50% of our aid to India through private sector development, it would be valuable to see precisely how that will be done. What kind of programmes will be beneficial for pro-poor development? It is also important that there is sufficient monitoring and evaluation of the programmes and their funding, including programmes that are in the private sector. Just as we set tests for non-governmental organisations when we channel aid through them, it is vital that the same standards of measurement and transparency are applied to aid that is channelled through private sector organisations.

There are great opportunities for developing the private sector’s role in providing aid. We can see the impact that microfinance has already had in many parts of the world, including in India, Bangladesh and many other countries. However, although we welcome the role that the private sector can play in tackling poverty in India, there is a real need to ensure that our focus remains on poverty alleviation. Right hon. and hon. Members have highlighted the need for that focus on poverty to remain, and it would be valuable to see more detail in the Department for International Development’s plans, to build on the detail that has already been provided.

I want to highlight a couple of other issues, one of which relates to monitoring. We believe that the Department should provide further information on the significant investment being channelled through the private sector, including details of the kinds of investment and of how it will focus on poverty. The second issue relates to gender, on which there has been some emphasis. How precisely could programmes such as microfinance be used to support women and create economic opportunities for them?

I welcome the contributions made by the members of the Select Committee and, in this debate, the focus on ensuring that we continue to provide assistance to India. Looking forwards to 2015, we must consider how best Britain can maintain its focus and act as a catalyst through its aid programme, but we must also ensure that we have a way of exiting that ensures that India can be genuinely self-sufficient. We must leverage our influence and resources in such a way that over the coming years—post 2015—India is genuinely in a position to itself provide the welfare systems and support needed to tackle poverty and is no longer dependent on aid, from Britain or anywhere else. The facts and numbers show, however, that we are a long way from that, and Britain must therefore continue to maintain its commitment to the aid programme until such time as India is genuinely in a position to lift the millions who remain in poverty and who require our assistance.

15:40

[The Parliamentary Under-Secretary of State for International Development (Mr Stephen O'Brien)]

I congratulate the Chairman of the International Development Committee, the right hon. Member for Gordon (Malcolm Bruce), on securing this important debate, and I thank him for his excellent speech, which reflected the combined work of him and his Committee members. It not only focused on the India programme, but set it in a context that had a huge read-across to the justification and principles that underlie where we should place our UK effort to be partners in aid, and then to graduate to development and to securing a better future for people who have many disadvantages. His comprehensive, thorough, thoughtful and evidence-based speech got the debate off to a most respectful and useful start. Our timing happily coincides with the Foreign Secretary making, as we speak, a keynote speech to launch the King’s India Institute at King’s College, on what is India’s republic day and the 62nd anniversary of the signing of its constitution, so there is some poignancy to the debate.

Let me put the debate into context. When the coalition Government came into office in 2010, we made it clear that we wanted to build a different style of international development, one based on dynamic partnerships that reflected our networked world and focused on a relentless pursuit of results and value for money in the Department for International Development’s work. Our vision acknowledges the prominence and value of Britain’s involvement in the alliances on development that were so important in the past, but also looks to the relationships and international forces that will shape the future.

Engagement with the emerging powers is a cornerstone of the policy, as the Secretary of State for International Development set out in a speech at Chatham House in February last year. I am sure that Members will have noted, as did the Secretary of State in that speech, that in the space of a few short decades the world has become a very different place. Whether we are talking about the BRIC countries—Brazil, Russia, India and China—the Asian dragons, the tiger economies or the gulf giants, the new powers will influence world affairs in the future, and it is therefore in our interests to engage with them now.

Of all the emerging powers, it is India with which we will have the most multidimensional relationship and partnership. Our shared history, and political and personal links, all mean that India is important to the United Kingdom, and the Prime Minister’s visit so soon after the election in 2010 reflected the importance we attach to the relationship.

As the right hon. Member for Gordon is aware, in the last year we have completed a root-and-branch review of the aid programme to ensure that our spend is targeted where it can achieve the greatest results. The review made it clear that we can achieve real results for poor people in India. Why? Because the Indian Government are ploughing record tax revenues into poverty reduction programmes, and in that environment, our development expertise can ensure that the impact of those resources is maximised for the benefit of the poorest in Indian society. Indeed, we estimate that the United Kingdom’s aid has lifted 2.3 million people out of poverty in rural India in the past five years and put an additional 1.2 million Indian children into primary school since 2003, demonstrating that there has been a succession of Administrations with a shared responsibility.

The value of these efforts received cross-party endorsement when the International Development Committee completed its assessment of the UK’s development programme in India and concurred with our decision to continue our funding until 2015. I recognise the right hon. Gentleman’s perfectly legitimate, well-articulated and constructive criticism, and his constructive approach to holding a Department of State to account—through his Select Committee, in this case—and I hope it is noted that DFID delayed finalising the 2011 to 2015 operational plan for India until after his Committee had made its recommendations. We were then able to take the recommendations into account before publishing the operational plan on the DFID website in October 2011.

The pace of India’s transformation to date has been remarkable, as hon. Members have noted. Although economic growth has slowed in recent months, India is still achieving enviable rates of growth—rates we would give our eye teeth for—lifting 15 million people out of poverty every year. But we know that the benefits of the growth are not being shared equally and the scale of Indian poverty remains massive. India’s poorest states—each of them larger than most African countries, as has been well noted—still face huge development challenges. More than half the girls in Madhya Pradesh do not yet go to secondary school, more than half the young children in Bihar are undernourished, and one quarter of all pregnancies are unwanted or mistimed.

Our decision to maintain our programme in India was coupled with a very clear conviction, well picked up by the Select Committee, that the programme should also be radically different. Because of India’s economic growth and its own increasing resources, we are bringing the development partnership up to date. Since the publication of the International Development Committee’s report on the future of aid to India, we have agreed a new approach with the Government of India, and I think that the right hon. Member for Gordon importantly wanted to ensure that that had happened.

The approach has three main pillars. The first is an innovative new private sector programme, using returnable capital to promote pro-poor private investment in India’s poorest states. Rather than just read out the bullet points, I will give a bit more detail, to pick up on some of the points raised, particularly by the hon. Members for East Kilbride, Strathaven and Lesmahagow (Mr McCann) and for Brent North (Barry Gardiner). It is in the interests of the poor and the UK taxpayer that resources are used sparingly and only where most needed, attracting private capital where possible, but it makes good value-for-money sense, and it is certainly good for poverty reduction, to use our resources over and over again if we can. So the answer is yes, the resources will be reapplied for India. I say “if we can,” because we must ensure that we preserve at all times the ability to apply rigour.

[Malcolm Bruce]

Is my hon. Friend able to say what the CDC’s role will be? The CDC is being revamped, and it seems that some of this returnable kind of capital would be appropriately delivered through that body. Is there an active dialogue between DFID and the CDC about how the private sector funding will develop in India?

[Mr O'Brien]

The right hon. Gentleman makes a very important point. In many degrees, this is a question of a stratified approach. It is really to do with the risk appetites and the profile of the funding instruments that lie behind it. I can certainly confirm that we hope that the revamped CDC will be able to take a greater interest in applying its patient capital approach, particularly to some of the infrastructure support that lies behind economic development, not least in the poorest states. But let us be absolutely clear, with the DFID instruments, we are able to put forward the funding that we do because our capital can take bigger risks in riskier places than even that of the CDC. We have to recognise that there is a connection, but not necessarily an overlap.

[Barry Gardiner]

I am particularly grateful to the Minister for addressing the point about the returnability of capital, because it is an important one to clear up. Will he state absolutely categorically that “returnable to the taxpayer”, which I believe is the phrase the Secretary of State used, does not mean that the capital should be returnable to the British taxpayer but that it should go back to the fund, and then, as the Minister said, be reapplied for the alleviation of poverty?

[Mr O'Brien]

I confess that, in all my briefings, I have not seen the phrase “returnable to the taxpayer” used by anybody. Let me be clear: this is returnable in relation to the repeated use of the resources for the application of their purposes in India. That is the idea. The International Development Act 2002 allows us to use returnable capital instruments, such as equity investments, guarantees and other hybrid forms—combined loans and equities—that promote development and poverty reduction.

There are entrepreneurs who improve the delivery of basic services. For instance, Irfan runs mobile clinics that provide a comprehensive range of outpatient medical services to poor people who are left out. He needs capital to buy the mobile vans and operate a professionally managed unit to provide quality service and make a profit. We can help entrepreneurs like him to do both, so that we have development and the sustainability provided by a profitable business. That is an example of a private sector programme.

The second pillar that we have agreed with the Government of India is a programme to help women and girls break the cycle of poor nutrition, poor education and early pregnancy that traps so many in India in poverty. That will focus our programme on the poorer states of India, particularly Bihar, Orissa—which has been renamed Odisha—and Madhya Pradesh.

A good example of transformation relates to some of the basic issues identified not only by the right hon. Member for Gordon, but by the hon. Member for East Kilbride, Strathaven and Lesmahagow. Mention has been made of manual scavenging—people cleaning toilets with their hands—which is not something that any of us could easily contemplate. The Department of International Development is supporting the Indian civil society organisations and there has been a series of successful local campaigns on the issue. We hope that, soon, this shameful practice will no longer exist.

[Jeremy Corbyn]

I am glad that the Minister is addressing this issue. What monitoring is taking place of private sector organisations that might be in receipt of equity capital via Britain or public sector organisations, in order to ensure that there is no discrimination anywhere on the basis of caste and descent? We should support the Dalit civil rights organisation and others, as the Minister has rightly said, to lift them out of the poverty and discrimination from which so many of them suffer.

[Mr O'Brien]

I listened carefully to the hon. Gentleman’s speech. He focused in particular on the Dalit population, and the third pillar that we have agreed with the Indian Government directly addresses his point. It is a new programme of co-operation with India on global issues, such as climate change, trade and food security. Linked to that is addressing full-on social exclusion. We have agreed with the Government of India and Odisha to set up a conditional cash transfer scheme to help more than 220,000 tribal and Dalit girls who are currently in the last year of upper primary school get the opportunity of secondary education.

Our civil society programmes in India are consistent and directly target the poorest and most vulnerable people, particularly the Dalits. They also target tribal people, Muslims, women and disabled people in order to get them to organise, understand their rights and get access to services and opportunities that they have often been denied. In direct response to the International Development Committee’s recommendation, we will increase the funding available to civil society organisations to work with the poorest and most excluded people in the poorest states. That will cover 120 of the poorest districts in India. DFID’s poorest areas civil society programme—PACS—focuses explicitly on tackling social exclusion, discrimination and inequality. The hon. Gentleman rightly mentioned monitoring and evaluation, which are crucial because otherwise we would not receive any feedback. They are designed into the programmes, so we will be able to report on them as they develop and make sure that we are held to account on their performance.

[Mr McCann]

On pro-poor private investment, one of the Committee’s issues was how that would be scaled up so that half the budget could go on those types of projects. We have witnessed microfinance projects, but the scaling up of those would mean thousands, if not hundreds of thousands, of individual projects. We are most concerned about how that would be managed. Will the Minister provide more detail on whether he expects microfinance projects to be the foundation of how the money will be spent?

[Mr O'Brien]

I hope that I will have enough time to answer that question. I have a great slug of information to add on the private sector but, given the topic of the debate, I want specifically to cover the recommendations of the IDC’s report. The IDC has made a valuable contribution to the new shape of our programme in India and its recommendations encompass the points highlighted by the Opposition spokesman, the hon. Member for Bethnal Green and Bow (Rushanara Ali).

As the Committee noted, UK aid matters in the poorest states, where there are the fewest donors and where growth has not yet made a significant impact on poverty. We are therefore focusing on those poorest states, and we will help states access India’s own resources, improve the environment for business and investment, make sure that the public get a better deal from public services, improve financial procedures and reduce corruption.

We have taken note of the Committee’s recommendation to concentrate more resources on needy sectors, and we plan to double our support—this is an important point, first raised by the Chairman of the Committee—for water and sanitation over the next four years, giving 5 million people access to better sanitation. We want to increase the amount of burden-share that others may assist us with, but let us be clear that, through community approaches, for every pound we spend on sanitation, we expect Government partners to spend approximately £20. We are piloting community-led total sanitation in Bihar and, assuming that it proves effective, will roll it out.

The Prime Minister of India recently described child malnutrition—another point raised by the Committee Chairman—as a national shame. Over the next four years, DFID aims to reach more than 3 million children through nutrition programmes, including—not least over the first 1,000 days and with the Governments of Madhya Pradesh, Bihar and Odisha—a programme on child-feeding, micronutrient supplements and diarrhoea management. Trained community health workers are very much part of that programme. Our energies are focused on delivering the results expected of our programmes. For instance, 447,000 births between 2011 and 2015 will be delivered with the help of nurses, midwives and doctors in those three states, but it is too early to finalise our plans for post-2015.

I appreciate the interest of the Committee, but let us be clear that we will not be in India in a development relationship for ever. Our aim over time is to move from an aid-based relationship to one based on shared contributions to global development issues, not least climate change.

[Malcolm Bruce]

Will the Minister acknowledge that, according to our discussions with the Indian Government, they themselves see the relationship changing and coming to an end? It is not just a decision for the United Kingdom Government; it will be a joint decision between the UK and the Indian Government.

[Mr O'Brien]

I appreciate that. It has to be a progressive partnership throughout. There will be some gradations of transfer. As I think the right hon. Gentleman recognises, in the past it was not appropriate to draw a line and there will be no absolute cut-off in the future.

We all know how important the private sector will be. The Secretary of State visited India recently. We believe in helping entrepreneurs who have innovative and creative ideas get access to some form of funding—above and beyond microfinance—to help them have a lasting impact on poor people. That is demonstrated by the increasing numbers of staff in our Indian office who are focused on these matters. The Secretary of State also secured the Government’s approval of a new programme promoting investment in India’s poorest states. The Samridhi partnership is the first private sector development project, and it will be delivered in partnership with the Small Industries Development Bank of India. He also supported the expansion of microfinance plus patient capital to entrepreneurs. Such projects will be developed and we will have to monitor and evaluate them, but the important thing is to make sure that they deliver the necessary profitable, sustainable businesses, as well as the pro-poor development goals that we all want to achieve.

As the Secretary of State found on his visit, we have made progress on the transformation of our programme. Our challenge now, as noted by the Committee Chairman, is to press ahead with work to achieve ambitious results. We plan to deliver for India’s poor and to work together with India to secure development outcomes on a global scale and in the context of a gradual but important process of graduation from aid to, ultimately, a truly global partnership based on trade.

15:59

[Malcolm Bruce]

I thank all hon. Members who have contributed to the debate, which has been extremely positive and constructive. The Committee’s mood and the Minister’s response is that we are working in partnership with the Government and the people of India. Indeed, what we are doing, we are doing together and in full participation. The fundamental concern and objective is to ensure that the poorest of the poor people in India get the support that they need to stop being poor as fast as possible. The UK’s ability to accelerate that process will be the most positive measure and judgment of our engagement.

Human Rights

Thursday 26th January 2012 Westminster Hall

[Andrew Rosindell in the Chair]

[Relevant documents: Eighth Report of the Foreign Affairs Committee, The FCO’s Human Rights Work 2010-11, HC 964, and the Government’s Response, Cm 8169.]

16:00

[Richard Ottaway (Croydon South) (Con)]

It is a pleasure to speak for the first time with you in the Chair, Mr Rosindell. As you are a distinguished member of the Select Committee on Foreign Affairs in your own right, I can think of no one more appropriate to chair this debate.

The Committee has published its report on the Foreign and Commonwealth Office’s 2010-11 human rights report. I am delighted that we have the chance to debate it today. Human rights are under the spotlight around the globe, so nothing else could be more important to debate. I welcome the Minister to the Front Bench, having seen him in other incarnations today; he is obviously having a busy day. I pat the Foreign Office on the back for its decision to honour its election pledge to continue publishing its annual report on human rights, albeit in a more cost-effective form.

[Jeremy Corbyn (Islington North) (Lab)]

The Chairman of the Foreign Affairs Committee was not here for the earlier debate on India, which lasted for one and a half hours. Apparently, we now have only one and a half hours to debate human rights. Will he use his good offices as Chairman to ensure that, in future years, we have a full day’s debate on international human rights? It is simply not good enough for the British Parliament to spend one and a half hours a year on international human rights.

[Richard Ottaway]

The hon. Gentleman is absolutely right. I suspect that that point may be made by other hon. Members today, and I agree completely with the sentiment. For that reason, I do not intend to speak for too long, to allow others to speak.

I welcome the fact that the Government are still publishing human rights reports, although in a more modest form than in the past. I am delighted that Amnesty International welcomes that as well and has said:

“It is something that we value enormously…we have real respect for this report”.

I also welcome the fact that the Government continue to update the list of countries of concern online on a quarterly basis and that they have established an advisory group on human rights that includes practising lawyers, academics and representatives of non-governmental organisations, many of whom have eminent positions in the human rights system. Again, Amnesty welcomes that, for the obvious reason that, if experts talk to the FCO, it can produce a more informed report.

The report was based mainly on the period from January to December 2010. Much has happened since then in the human rights field, with the Arab spring, Bahrain, Syria, Russia and numerous other important events. On the Arab spring, the Foreign Affairs Committee will go to Egypt, Tunisia and Libya in two or three weeks’ time. The role of the Foreign Office in recognising and promoting human rights there will be a part of our inquiry as it develops.

I will touch on a couple of countries of concern. The first is Bahrain, about which I suspect we may hear more and where there have been many developments. I will not go through them now, as colleagues will be well aware of them, but it was our view that Bahrain should have been included in the report’s list of countries of concern. In response to the Select Committee’s requests for an update on the situation in Bahrain, the Secretary of State wrote to me saying:

“We do not hesitate to express disagreement with the Bahraini authorities. Although we do not agree on everything, Bahrain is a key ally of the UK and this close relationship allows us to have the frank discussions that often are necessary. We have, therefore, made it clear to the Bahraini Government that the civil rights of peaceful opposition figures, along with the legitimate exercise of freedom of expression and peaceful assembly, must be respected.”

I support that approach. I recognise the Bahraini regime’s dignified response and its establishment of the independent commission of inquiry, but I encourage the Foreign Office to keep on the button as far as Bahrain is concerned, to follow through on the commission’s work and to ensure that the Bahraini Government implement the necessary reforms.

The second area of concern is Libya. Again, I need not remind the House of the developments there, but it is worth quoting the United Nations High Commissioner for Human Rights, Navi Pillay, who addressed the UN Security Council recently. She raised concerns about the detainees being held by revolutionary forces, saying that some 8,500 prisoners were being held in about 60 centres. She said:

“The lack of oversight by the central authority creates an environment conducive to torture and ill treatment.”

The Minister responded by confirming that the Government

“do not lose sight of the victims of this conflict. The conditions of those in detention have been raised by Ministers on visits, and directly with the Libyan Government.”—[Official Report, 17 January 2012; Vol. 538, c. 609.]

The situation at the moment is pretty dire. Militias are free to roam around, and unlimited weapons are available. We need basic adherence to the fundamental human rights that we consider important. Again, the Committee will consider that.

However, it is not all bad news. Across the globe in Burma, distinct improvements have been made. I like to think that that is a result of pressure by the international community. Changes have been made to the electoral law that allow Aung San Suu Kyi’s party to register for the forthcoming by-elections, political prisoners have been released and moves have been made towards greater media freedom, all of which are important human rights advances that we recognise, welcome and accept. We must work to secure more critical resolutions in the UN and make our concerns known at the highest level with Burma’s neighbours, as well as our expectation that continuing pressure will be kept on the country. I urge the Foreign Office to remain vigilant and press for further reform, but we should recognise that the improvements have come about partly as a result of the Government’s influence.

The next report will consider some cross-cutting issues, subject to the Committee’s agreement. We will be considering involvement in rendition, and we welcome the fact that the UK has examined its own human rights practices in that area. We are looking forward to hearing in more detail why the detainee inquiry chaired by Sir Peter Gibson has been brought to an end. From what I hear, it was clearly the right decision, and I welcome the fact that the Foreign Secretary has kept open the intention to hold an independent, judge-led inquiry after all police investigations have been concluded. That is obviously the right way forward. I hope that the Minister can confirm that.

The Minister’s colleague, the Minister of State with responsibility for soft power, wrote to us in November to say that Ministers have commissioned further work on the strategy and that a final version of the paper has still to be published, but did not include a date. Can the Minister update us on what is causing the delay and what exactly will be published? We touched in our report on the public diplomacy aspects of the Olympic games, so our dialogue with the Foreign Office on that matter has been ongoing.

I shall briefly touch on programme funding and official development assistance for human rights. There seems to be a bit of a dichotomy in that one has to be eligible for ODA funding to qualify for a human rights funding programme. It is conceivable that a country that at first sight may not qualify for ODA funding—the Chair of the Select Committee on International Development has gone now—has a human rights aspect that needs funding. That seems a little odd.

In conclusion, I should like to raise the fact that the World Service is being jammed by Iran and that there are problems with the BBC Persian TV output, which is particularly important in this area. Independent research shows that, in that part of the word, the service is the most trusted, impartial and objective international radio programme, which is probably why the regime is jamming it. I understand that Iran is a member of the International Telecommunication Union, which is a United Nations body. As such, it has committed itself to the free exchange of information and data for the benefit of all. Iran is therefore in breach of its obligations under that treaty. Again, I hope that the Foreign Office can take that up with the regimes.

I will now leave it to other hon. Members to express a view on our report, which we think is particularly important. We will publish another such report this year. I look forward to hearing the contributions of other colleagues.

16:11

[Ann Clwyd (Cynon Valley) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Rosindell, although I suspect it is a case of poacher turned gamekeeper. You are normally on the Foreign Affairs Committee along with us, and I am sure that you would have made a contribution to this debate if you were not chairing it.

I acknowledge the importance of the annual report, which was an initiative of the previous Government. I am glad that this Government have carried it on. As chair of the all-party group on human rights, I must say that the report provides a useful tool by which to understand the FCO’s stated positions on particular issues, as well as for parliamentarians and civil society to challenge and measure the Government against those ambitions and principles.

I welcome the FCO’s initiative to release quarterly electronic updates on the countries of concern listed in the report. However, it is critical that the report continues to be annual and comprehensive and that it is released publicly in a paper format. I agree with others: it is a pity that a debate of this kind is being squeezed into a very short period. Such a debate should be held on the Floor of the House, not in Westminster Hall.

The Foreign Secretary states in his foreword to the 2010 report that human rights are part of the FCO’s “irreducible core” and that the promotion of human rights is

“indivisible from our foreign policy objectives”.

Those are very worthy statements and, of course, I welcome them. In April last year, I sent a written question to the FCO seeking to ascertain the number of identifiable human rights officers posted to British embassies and missions overseas, which is a perfectly reasonable question to ask. The Government say that they support human rights as a general principle, and I am sure they would acknowledge the importance of bilateral defence relations and country-to-country trade. British embassies around the world have identifiable personnel who are responsible for ensuring that British positions on defence, trade and investment are heard and, we hope, acted upon. It seems to be perfectly reasonable, therefore, to ask how many human rights officers operate and in which countries.

In the response—not from this Minister; it was on a particularly busy day—the Under-Secretary of State for Foreign and Commonwealth Affairs, the hon. Member for North West Norfolk (Mr Bellingham), said that all staff at all locations had human rights as a top priority and that

“For operational and security reasons we cannot give further details of staff deployments and activity levels”.

I asked that question again when the FCO Minister responsible for human rights appeared before the Foreign Affairs Select Committee, and I was given a similarly implausible answer. I say implausible because, in answer to a written question in the other place on 8 November 2010 about the number of military attachés deployed in British embassies overseas, the Government were able to give a detailed list of attachés in individual embassies in Europe, the Americas, Asia and Africa, including the distribution by rank.

Today, the Committee received a letter from the Foreign Secretary in which he, again, does not answer the question. He obscures the issue by raising security and operational concerns, so I still have not got an answer. However, he did promise to come back to the Committee with an estimate of the scale of resources devoted to human rights work across the network. I look forward to that and hope it will be more enlightening than the answers that I have received from FCO Ministers to date. Someone with clout must be identifiably responsible for human rights—monitoring and reporting, meeting civil society and advocating British positions with academics and Government officials, gathering data on the ground and producing expert information on political, social, economic and legislative developments that have worrying consequences for human rights in a given trouble spot. That is precisely the kind of human intelligence we need to understand emerging problems and, where possible, prevent them.

I should like to refer to striking the balance between trade and human rights. What the Arab spring has shown is that the UK has been much too lax in the monitoring of the sales of arms and dual-use equipment to Governments in the middle east and elsewhere. That applies to the previous Government as much as it does to this one. Although we have applauded popular calls for democracy in the middle east, we have frequently seen those calls answered with British-made weaponry and surveillance equipment. The licensing of a wide variety of weaponry and components to countries such as Bahrain, Egypt, Iraq, Jordan, Libya, Saudi Arabia, Syria, Tunisia and Yemen has been misguided. Licences must be rejected when there is a substantial risk of arms being used to commit or facilitate serious violations of international human rights or humanitarian law.

Let us consider, for example, the case of Bahrain and Saudi Arabia. Through summer and autumn last year, very credible human rights non-governmental organisations were documenting severe human rights abuses by the Bahraini security services—those allegations have since been backed up by the King-appointed independent commission of inquiry—and Saudi troops were being sent into Bahrain. Yet in September last year, both the Bahraini and Saudi authorities were invited to attend the Defence and Security Equipment International arms fair here in London. For those of us concerned by human rights and the momentum of the Arab spring, it seemed completely absurd for our Government at one moment to wring their hands over the situation in Bahrain and say that they were doing all they could, while simultaneously the self-same Government were invited to London and encouraged to buy more weaponry. How can the Government be regarded as credible among civil society and the populations of the middle east when they seem intent on undermining that credibility with those kind of inconsistencies?

On a matter related to human rights credibility and the arms fair that I mentioned a moment ago, I serve on the Committees on Arms Export Controls, which has been hearing some alarming information about the trade fair. That is important with regard to our discussions, because the former Defence Secretary, the right hon. Member for North Somerset (Dr Fox), gave a speech at the trade fair and said:

“defence and security exports play a key role in promoting our foreign policy objectives.”

At the same trade fair, it was discovered by campaigners that two Pakistani exhibitors were displaying promotional material for cluster munitions, which of course are banned by international law. That is not the first time that DSEI has been involved in controversy over exhibitors promoting banned equipment. Both the organisers and the Government should, by now, have a clear and robust compliance procedure to ensure that the UK is not a safe haven for the promotion of weaponry and equipment that is otherwise banned. It should not be left to NGOs and activists to police events that a Defence Secretary endorses as having a key role in promoting our foreign policy objectives. [Interruption.] I am recovering from flu, Mr Rosindell, and getting a bit croaky, so I shall wind-up quickly.

I urge the Government to reassert their diplomatic influence at the UN in 2012 to press for a comprehensive global arms trade treaty that will have a genuine impact on poverty and armed conflict in some of the most fragile societies. In recent evidence provided to the Committees on Arms Export Controls, the UK working group on arms—a coalition of NGOs, including Amnesty and Oxfam—told us that

“other supportive states (including major UK allies) have been telling us at the UN that their impression is that the UK has ‘rolled back’ in its leadership and activity on the ATT. Comments tend to focus on UK interventions at the ATT being notably much less substantial than in previous years, a reduction of political profile, and an absence of senior official activity”.

The Minister is vigorously shaking his head.

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

Absolutely.

[Ann Clwyd]

The working group also questioned whether the Department for Business, Innovation and Skills and the Ministry of Defence were allocating sufficient resources to ensure a meaningful treaty. Given that the UK Government—both this one and the previous one—have pressed so hard for a global comprehensive arms trade treaty, would not it be a monumental defeat for British diplomacy if we failed to engage all our resources at the last hurdle and ended up with a weak, ineffective treaty?

The examples that I have given do not suggest that the Government are neglecting human rights; it would not be fair to say that. Excellent work is being done both here in London and in embassies around the world. The Government need to consider whether all their actions genuinely reflect the statements that they make on the importance of human rights and whether we sometimes undermine the excellent work done on the ground by FCO staff.

Can we welcome Bahraini princes to Downing street and be taken seriously when we say that we are deeply concerned about human rights there? Are we undermining our position on the global arms trade by not setting the highest standards for Government-endorsed arms trade fairs?

Human rights are not just for the FCO; they must be reflected in the work of the Department for International Development, the Ministry of Defence and the Department for Business, Innovation and Skills and, not least, in Downing street. I urge the FCO to work with those other arms of government to establish how they can ensure that human rights are not placed in a box at the FCO. I suggest that the FCO deliver a report next year that takes into account all the Government’s external relations activities, including those beyond the FCO, so that we can judge the efforts of the whole Government, not just one of their arms, in furthering the cause of international human rights.

16:24

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

I am delighted to follow the right hon. Member for Cynon Valley (Ann Clwyd), who makes such a conspicuous contribution to human rights in this House. Like others, I am very glad that we have finally got this debate. The House may not appreciate that notwithstanding the admirable decision by the late Robin Cook to produce, for the first time, a Foreign Office statement in full written form on human rights, this is the first debate that we have had on the Foreign Office annual report since 18 December 2008, over three years ago. That delay was, in part, due to the intervention and the timing of the last general election. I earnestly hope that we will re-establish an annual debate on the Foreign Office’s human rights report and that that debate will be a full three hours in length, as it has previously been. The Chamber will be glad to hear that I will be severely truncating my planned two-hour speech to ensure that all hon. Members can make a suitable contribution.

At the outset, let me say to the Minister that I welcome the fact that the Foreign Office has, deservedly, devoted substantial resources to producing this 355-page written document. That is an admirable use of resources. It is invaluable to have it and I strongly support the point that has been made by the Chairman and other right hon. and hon. Members that this must continue in a sensible portable form—in written and published form.

I want to start by referring to a recent document that has come out following the Foreign Office’s annual report and our own report on that. It is “Human Rights Guidance,” which the Government have recently published in relation to overseas security and justice assistance. I wish to highlight two points in relation to that. First, in his foreword to “Human Rights Guidance”—I very much welcome this—the Foreign Secretary says:

“It is of fundamental importance that HMG work on security and justice overseas is based on British values, including human rights and democracy, and this guidance is designed to support that.”

Given the fact that the Foreign Secretary says that, I find it surprising and disappointing that when we get to paragraph 13, where the Government list the human rights that must be upheld when security and justice assistance is provided, the list fails to include any specific mention of women’s rights. It includes, entirely rightly, violations of the rights of the child, but there is absolutely no reference whatsoever to violence against women or women’s rights. I hope that the Government, like me, will regard that as a very serious omission. It is an even more striking omission when the letter that the Foreign Secretary sent to the Committee’s Chairman, my hon. Friend the Member for Croydon South (Richard Ottaway), yesterday, rightly includes women’s rights among the five global human rights priorities that the Government have set. Why is there no reference to women’s rights in this very important human rights document? I hope that the Minister will reflect on that.

There is a further, equally surprising omission, which I wish to highlight in my capacity as Chairman of the Committees on Arms Export Controls. This security assistance refers to assisting in particular what are described as “security institutions overseas”. Those institutions are defined in the guidance. It states:

“The institutions typically (but not exclusively) of relevance in this context are: armed forces, police, gendarmeries, paramilitary forces, presidential guards, intelligence and security services (military and civilian)”.

In other words, they are organisations that feature armed personnel in overseas countries. My question for the Minister is why, in that document, which includes checklists for officials here and overseas in our embassies to follow, there is no reference anywhere to the requirement under the EU and UK “Consolidated Criteria” in relation to arms exports to follow those criteria, which, critically, include no sales of weapons, ammunition and so on that could be used for internal repression. Why is the document 100% silent on that crucial requirement? That is a further question that I put to the Minister.

There is another important sentence in the Foreign Secretary’s foreword. He says:

“It is in police stations, detention centres and court houses that the state exerts its greatest powers over individuals and so where fairness, human dignity, liberty and justice are most critical.”

I regard that sentence as 100% right and I am very glad that the Foreign Secretary has highlighted the critical point that autocratic dictatorships down the ages have always said to themselves, “If we can get those who oppose us locked up behind bars, we can do with them what we like.” That is where human rights are most vulnerable. I am glad that the Foreign Secretary highlighted that. I shall return to that sentence in relation to a particular country later.

I shall now deal with a number of individual countries, starting with Israel and the Occupied Palestinian Territories. I am glad that those are again rightly listed by the Foreign and Commonwealth Office among the countries of concern. As the House knows, one of the most important human rights organisations, if not the most important—it is important to stress this; it is a Jewish human rights organisation—is called in English the Israeli Information Centre for Human Rights in the Occupied Territories. In Israel, it is called B’Tselem. As I am sure right hon. and hon. Members know, B’Tselem is loathed in many sections of the Israeli community and particularly in parts of the Israeli Government. That reflects most eloquently the extremely important and invaluable job that B’Tselem does in highlighting human rights abuses in the Occupied Palestinian Territories.

Last year, I tabled a written question that the Minister himself answered. I asked what had been the Foreign Office’s financial support for B’Tselem during the past five years. I was delighted to receive the Minister’s written answer on 12 October. It told me that after a gap of several years, the Government had made a grant of £135,000 to B’Tselem in support of its efforts to improve the human rights situation for Palestinians in the west bank, the Gaza strip and East Jerusalem.

I urge the Government to continue to give support to B’Tselem for the extraordinarily important work that it does in trying to highlight and expose the human rights abuses that are taking place in the face of the continuing relentless and, indeed, I have to say ruthless policy that the Israeli Government have followed for many years of bringing about illegally the de facto annexation of East Jerusalem and the water-bearing parts of the west bank.

I now turn to Bahrain, as other speakers have done. Like others, I have noted that at the time the 2010 human rights report was prepared Bahrain was not listed among the countries of concern, and—again, like others—I found that a somewhat surprising omission, given that for years now the Sunni, autocratic Government of Bahrain have engaged in consistent and serious discrimination against the Shi’a majority in the country. I certainly hope that Bahrain will be included among the countries of concern when the Government produce their next human rights report.

Of course, I appreciate that Bahrain is strategically of great importance. I know, as we all do, that it is the home of the US fifth fleet and that we face a sensitive and delicate situation in the strait of Hormuz. I also know that Bahrain provides a port for other NATO naval vessels, including our own. However, that is not sufficient grounds for going soft towards the leadership in Bahrain over the gross abuses of human rights that occurred in the country in the wake of the Arab spring against unarmed civilian demonstrators and, as we know, even against doctors and nurses who were performing their professional medical duties, as they were bound to do.

I note the Foreign Secretary’s statement in his letter to the Select Committee Chairman on 12 January, in which he sets out the Government’s human rights agenda as far as Bahrain is concerned, and I urge the Foreign Secretary to adhere tenaciously to the points that he set out in that letter.

If there is one country in the Arab spring firmament in which the leadership most deserves to be brought before the International Criminal Court in the Hague, it is Syria. I know that that will not happen to President Assad and those around him, for the simple reason that it would be blocked by the Russians who, of course, have a very important naval facility in Syria. Notwithstanding that, there is a real opportunity for the British Government to take the initiative. It looks as if the Arab League effort to try to stop the violence in Syria may now be in some considerable disarray and I hope that the Foreign Office is asking itself intensively what steps Britain and other countries can take to try to exert further pressure and to develop further policies that will stop the violence in Syria, and to help the move from autocracy to democracy in Syria that is urgently needed.

Like other right hon. and hon. Members who listened to the “Today” programme this morning, I was considerably moved by the broadcast from Syria, particularly hearing the crowd in a suburb of Damascus shouting, “Freedom, freedom, freedom”, in the background. I earnestly hope that the British Government will not be deaf to the cries for freedom emanating from the thousands of very brave people who are seeking freedom in Syria.

Lastly, I come to China, which brings me back to what I said about the Foreign Secretary’s statement in his foreword to “Human Rights Guidance” about human rights being in most danger when the state exerts power against individuals

“in police stations, detention centres and court houses”,

and other parts of the criminal justice system. No country in the world uses its state power more ruthlessly and more consistently than China against those who wish, entirely peacefully, to take a different view from that one-party, authoritarian state about how their country should be governed, a power that is used ruthlessly to imprison anyone who takes a different view, using the terrible, catch-all criminal offence of subversion against the state. As the House knows, in China in just the last few weeks, there has been a spate of arrests with sentences of some 10 years meted out to people such as Li Tie, Chen Wei and Chen Xi, to name but a few.

The Foreign Affairs Committee recently asked the Foreign Secretary how the Government’s human rights work fits with the promotion of trade, an issue which the right hon. Member for Cynon Valley has also raised. Yesterday, the Foreign Secretary replied to the Committee’s Chairman in his letter of 25 January and stated:

“We do see our trade promotion and human rights work as mutually reinforcing”.

That line is convenient for the Government, and nationally self-serving, but in my view it is an illusion. The determined prosecution of human rights, and the determined prosecution of trade are not, in my view, mutually reinforcing; they are inescapably mutually conflicting.

The uncomfortable reality for Ministers—I accept that it is uncomfortable for them—is that they have a hard choice to make in relation to China and other countries around the world. Do they stand up straight and firm on human rights, or do they basically say that they will go through the motions on human rights and give first priority to our country’s commercial interests? In my view, on the evidence to date, this Government have made the same choice as the previous Government, and have said that they will give top priority to trade. We will pursue that issue in the arms export area with Ministers and in the report that is currently under consideration.

In conclusion, I find the Government’s position on human rights somewhat mixed. Much of the wording, but not all of it, is right, but in translating the words into hard action, in some countries at least, the action falls significantly short of the words. I am sure that the Foreign Affairs Committee will continue to have its scrutiny of the Government’s human rights policy very high indeed on the Committee’s agenda.

16:43

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

It is a pleasure, Mr Rosindell, to speak under your chairmanship. I congratulate the right hon. Member for Tonbridge and Malling (Sir John Stanley) on touching on so many areas in the Select Committee’s report and the Government’s response. That makes it easier for me not to have to go into some of them. I agree about the importance of having an extensive debate. During the previous Parliament, we had from 2.30 to 5.30 pm in this Chamber to discuss Select Committee reports, such as that on human rights. I hope that in future we can have longer for such discussion. Having said that, I congratulate the Committee’s Chairman on obtaining a slot from the Liaison Committee, because it is not always easy to do so when there are competing demands.

I want to touch on a few countries, and then to make a substantive point. A few weeks ago, we had a debate in this Chamber on Iran. The hon. Member for Croydon South (Richard Ottaway) mentioned the jamming of the BBC’s Persian service. The Minister was also present at that debate, and I had an exchange with him about the Iranian Government’s propaganda channel, Press TV. Although it is not the British Government’s decision, I want to put on record my satisfaction that Ofcom has made the right decision on that.

The wider question of human rights in Iran needs to be highlighted. As we move into this sanctions period and the tensions that will undoubtedly arise in the coming weeks, it is important that we do not forget those millions of people who demonstrated for democracy and freedom against the repression and the rigged election in 2009.

We also need to highlight some other countries. Our Committee did not highlight Nigeria, and the Government do not regard it as a country that warrants concern. None the less, the situation there has deteriorated remarkably quickly in recent weeks. Human rights is not just about what Governments do but about what non-state actors— insurgent groups, criminal organisations and terrorist organisations—do to abuse the rights of women, religious and cultural minorities and to carry out appalling human rights abuses against people because they have a different faith, clan, name, orientation or political belief. That is what is happening in Nigeria today and it is very worrying. I hope that we can get some update from the Government about that. Nigeria is an extremely important country in Africa and in the world as a whole. It is one of the largest and most significant African countries.

Similarly, we have ongoing issues in Pakistan, which were highlighted in our report. We have talked about the appalling murder of the Christian political figure, Salman Taseer, and the repression and the human rights abuses. Terrible crimes are being carried out by groups over which the Pakistan Government have no control. Given that more than 1 million people of British-Pakistani heritage have a close association with Pakistan, we need to keep our eye very closely focused on the country. Whatever we are doing with regard to withdrawing our forces from Afghanistan, we cannot withdraw our interest in the region as it is inextricably linked with our internal political dynamic relating to our British-Pakistani association.

Concerns have been expressed about the position of human rights in Colombia. I understand that the situation there is improving, but there are still reports of deaths and disappearances of political human rights activists and trade unionists. I know that the President of Colombia was here recently and that there have been some improvements and political change, but we need, none the less, to remind the Colombian Government that they still have some way to go before they fully meet the aspirations that they should have for human rights and trade union rights.

The European Court of Human Rights has just made an important judgment in which it upheld the idea of the memorandum of understanding and the removal, with assurances, of individuals from this country to Jordan. At the same time, it rejected the decision to remove the terrorist Abu Qatada from this country. I believe that that was regrettable and that the decision should be contested. None the less, it is important to understand that that judgment means that in general we can carry this process forward. We mentioned that issue in our report and it was referred to in the Government response. Will the Minister update us on where we are on that issue generally without necessarily commenting on the specific case?

Finally, I want to raise the more substantive problem of Sri Lanka. We as a Committee made some firm recommendations in which we commended Channel 4 for its documentary “Sri Lanka’s Killing Fields”, which showed the horrific scenes of the crimes carried out in the early part of 2009, at the end of the awful Sri Lankan civil war, between the Tamil Tigers and the forces of the Sri Lankan Government, both of whom carried out appalling human rights abuses.

We reaffirmed our view that an independent international war crimes inquiry should be held to investigate the allegations of atrocities carried out by both sides. The Government said in their response that they would await the Lessons Learnt and Reconciliation Commission set up by the Sri Lankan Government. As many of us predicted, that commission did not carry out the kind of investigation or produce the kind of report necessary to deal with the issues adequately.

The report was published towards the end of last year. The Government have now commented on it, as have numerous other countries. The British Government said that, on the whole, they are disappointed by the report’s findings and recommendations, and that there are gaps and unanswered questions. The US Administration expressed concerns that the report does not fully address the allegations of serious human rights violations. The Canadians have also been critical, and India has called for an independent and credible mechanism to investigate the issues.

It is time to return to the Human Rights Council to push the issue up the agenda again. I know that last time there was a blockage, the HRC, disgracefully, commended the Sri Lankan Government on their behaviour and refused to hold an international inquiry. I know that it would be difficult to take the Security Council route, because China and probably Russia would block it and the non-permanent members, including India, probably would not be supportive either, as they were last time.

Interestingly, last time, among the opposing countries in the HRC was Mubarak’s Egypt. Things have moved on since then. Maybe, given developments in the Arab world, it might be time for us to go back and see whether there is now more international support to raise the issues again in order to get a UN inquiry. Ban Ki-moon clearly tried to push for one. He went as far on the issue as he could as Secretary-General, because he could not get the institutions to go with him. He set up a United Nations panel of experts, who said that the Lessons Learnt and Reconciliation Commission

“fails to satisfy key international standards of independence and impartiality, as it is compromised by its composition and deep-seated conflicts of interest of some of its members.”

That is clear. The Sri Lankan Government must understand that setting up an internal process that does not have the confidence of the international community or the Tamil population will not lead to the necessary reconciliation within the country. People are still in detention or are not being allowed to go back to their homes. There are issues involving settlement and what is regarded as an attempt to change the demographics in the north of the island, and there are serious concerns about individual human rights abuses in Sri Lanka. The Government are all-powerful, the constitution gives the President great control and the Opposition—not just the Tamil Opposition but others—are intimidated or inhibited in many ways from doing what is needed internally. They need international support and solidarity. That is why it is important that the British Government speak out loudly, clearly and unambiguously, using whatever channels they can—the UN, the HRC and the Commonwealth—to raise those issues continuously.

16:53

[Martin Horwood (Cheltenham) (LD)]

I praise the hon. Member for Croydon South (Richard Ottaway) for initiating this debate. It is a pleasure to follow the hon. Member for Ilford South (Mike Gapes) and other hon. Members who have contributed to the debate, especially the right hon. Member for Tonbridge and Malling (Sir John Stanley), who gave an eloquent declaration in defence of human rights and some well-made points about the rights of women and the valuable work of organisations such as B’Tselem, which I am happy to endorse.

While I am heaping praise on people, I would not mind praising Conservative Ministers—from the other side of the coalition, I guess—not only for producing human rights reports, which is the easy part of the process, but for the frequent declarations that I have heard in the House by the Under-Secretary of State for Foreign and Commonwealth Affairs, the hon. Member for North East Bedfordshire (Alistair Burt), who is here today, and by the Foreign Secretary, making clear Britain’s absolute commitment to human rights in a wide range of contexts.

As a Liberal Democrat in the coalition, human rights are central to my political beliefs. I date human rights policy back to a Liberal campaign—the Midlothian campaign—by possibly the greatest Liberal, William Gladstone, who in 1880 explicitly balanced the national strategic interest with the rights of people who were not even British citizens at the time. In many ways, that was the origin of international human rights policy. I am proud and humbled to stand in that tradition. For that reason, I welcome many of the recommendations, some of them quite tough, in the Select Committee report.

I particularly like recommendation 3, which states that

“failing to take a stronger and more consistent stance against human rights violations by overseas regimes can carry risks for the UK. In particular, any suggestion that the FCO downplays criticism of human rights abuses in countries with which the UK has close political and commercial links is damaging to the UK’s reputation, and undermines the department’s overall work in promoting human rights overseas.”

The report relates that to north Africa and the middle east, but it applies worldwide, although it was the Arab spring, as the right hon. Member for Cynon Valley (Ann Clwyd) said, which highlighted in some areas of policy, such as arms control, the weakness of some of our human rights checks on Government policy—not just this Government, but certainly the previous one, from whom we inherited the system. For instance, it appeared that, instead of a human rights check being carried out to consider the potential for arms to be used for internal repression, checks were made in respect of whether they were being used for repression at that moment, which effectively excused every regime in north Africa and the middle east, many of which had the most appalling human rights records. The report’s recommendations relating to that are well made.

I welcome the Government’s commitment to include Bahrain in the next human rights report and their response to the situation in respect of the Arab spring, which included cancelling more than 160 arms export licences, some clear declarations in the House of Commons and the declaration, in response to the Committee’s report, that more work by Government was needed in this area.

First, in connection with the international arms trade treaty, we may possibly have some international collaboration that may contribute to some solution to that issue. What is the current state of negotiations on the international arms trade treaty? Does the Minister think that that could enable us to address human rights matters in the context of international arms sales? Secondly, if the Government have concluded that further work between BIS and the FCO is needed on this matter, is not it about time for them to agree on how that should be done and get on with doing it in some form? Thirdly, and finally, the Committee’s specific recommendation that we review arms sales to Saudi Arabia is well made. That is potentially a lucrative market that is valuable in respect of growth, and so on, but it is morally unacceptable to sell arms to repressive dictatorships, which may use them on their own people and may already have used military matériel in helping to suppress dissent in a neighbour’s territory.

I shall resist the temptation to do a world tour of human rights and will focus on Russia and China, two big, influential powers with domestic human rights issues, which are also major international players and permanent members of the Security Council and are therefore important in that respect.

In the case of Russia, I want to focus, first, on the appalling case of Sergei Magnitsky, who died in 2009. There is a campaign to bring his persecutors to justice but there is a sense among some of those who are campaigning on his behalf that Britain is perhaps a little behind other states in taking firm action on this case, despite the fact that Sergei Magnitsky was a lawyer working for a British company and Bill Browder, who is spearheading the campaign to bring Magnitsky’s persecutors to justice, is a British citizen.

In the US, the Netherlands and Switzerland, we have seen sanctions or progress towards sanctions, in the form of targeted visa bans or the freezing of assets, against the individuals implicated in the Magnitsky case. Moreover, because the Netherlands and Switzerland are part of the Schengen agreement, their action could close off most of Europe to those individuals. Nevertheless, I want to hear from the Minister if the Government are considering whether Britain should take similar action.

Then there are the cases of Mikhail Khodorkovsky and Platon Lebedev, who are now widely acknowledged by many people as political prisoners. Khodorkovsky has never seen his granddaughter. When representatives of the media or other third parties visit him in prison, those visits are taken away from the number of visits that he is allowed to receive from his own family, so he is suffering considerably.

There also ought to be honourable mention of Vasily Aleksanyan, who was a legal counsellor to Khodorkovsky’s company, Yukos. He died in prison last year, having turned down the offer of what was in effect a plea bargain, whereby he would perhaps have incriminated Khodorkovsky and Lebedev. He turned that offer down and it probably cost him his life.

I want Ministers not only to continue raising the cases of Magnitsky, Khodorkovsky, Lebedev and others, and consider imposing visa bans, but to reflect on some of the language that we are using about the European Court of Human Rights. Although I completely agree with the Government that the ECHR needs reform—the backlog of thousands of cases is clearly unsustainable and there are real problems with the Court being used much too freely—the campaigners for these Russian human rights defenders have expressed concern that the type of language and rhetoric that we are using about the ECHR is remarkably similar to that being used in Russia. We must guard against giving domestic Governments too much power to decide which cases go forward to the ECHR, because we may actually see cases such as those of Khodorkovsky and Lebedev being caught in that trap. Those cases are in that queue of thousands of cases that are waiting to be heard at the ECHR.

I will very briefly discuss human rights in China, as I can see, Mr Rosindell, that you are getting a little impatient. I want to draw attention to the situation in Tibet, and the three deaths and the continuing disturbances there. They have resulted from what seems to be an increasing denial of human rights, particularly religious rights, in that part of China. It is very unhelpful for the Chinese Government routinely to condemn secessionist groups, because the current elected administration-in-exile of Tibet is not actually calling for secession any more but looking for peaceful dialogue, and that opportunity should not be lost.

In the case of both China and Russia, however, there are some hopeful signs. Both countries are now more open societies than they were in the past. In the case of China, it is maintaining the “one country, two systems” approach to Hong Kong and actually tolerating a very free society there, but it has a myopia about human rights worldwide and is implicated in supporting some fairly unpleasant regimes around the world. Also, although China and Russia went along with action on Libya, their failure to support a firm UN resolution on Syria does neither country any justice.

There are many brave human rights defenders around the world who look to the British Government for leadership. I hope that we will continue to provide leadership and that we will perhaps even go further, as the Select Committee has recommended.

17:04

[Jeremy Corbyn (Islington North) (Lab)]

I have four minutes in which to deal with the world’s human rights, so I will do my best. There is a message in that comment—this situation is ludicrous. Allowing one and a half hours to discuss the human rights of the whole planet, in what is apparently the first debate on this subject since 2008, is ludicrous. I appeal to the powers that be to ensure that something changes in that regard.

Very quickly, there are several points that I want to make. The first is about participation in the UN Human Rights Council. Britain is a full participant in that council, which I frequently attend on behalf of a non-governmental organisation called Liberation. The council has greatly reformed its ways, and the in-country peer group review that takes place every three years is a valuable tool, which we should use to the full. The British Government appear to have broken with the tradition of allowing the European Union to represent us at the council, and they make regular contributions, particularly on the death penalty. I hope that that extremely important new tradition continues. If we allowed ourselves to be represented solely through the European Union, an awful lot of cases would simply never be raised, such as the treatment of Roma people in Hungary and other places, so it is important to maintain an independent representation.

My first point is about human rights in Europe. I was present, along with my right hon. Friend the Member for Cynon Valley (Ann Clwyd), who presided over it, at the launch of Human Rights Watch’s “World Report 2012”. In the report is a fascinating essay by Benjamin Ward of that organisation, part of which states:

“At first glance, the idea of a human rights crisis in Europe might seem farfetched. But scratch beneath the surface and the trends are truly worrying. Four developments stand out: the rollback of civil liberties in state responses to terrorist attacks; the debate around the place of minorities and migrants in Europe, a debate too often laced with xenophobia; the rise of populist extremist parties and their baleful influence on public policy; and the diminishing effectiveness of traditional human rights institutions and tools. Unless governments wake up to the scale of the threat, the next generation of Europeans may see human rights as an optional extra instead of a core value.”

Those are very tough words, and very well put.

The narrative that has been developed by the popular press of constant attack on the European Court of Human Rights and its processes and potential judgments, is very unfortunate and misplaced, and it is damaging and dangerous to our own human rights. I regret the way in which the Prime Minister decided to go to the Court, and how it has been presented as an inefficient, incompetent organisation. Yes, there is a very large number of outstanding cases. Most of them are inadmissible. The issue, however, is one of resources for the court rather than of criticism of it. The Chagos islanders have a case before the Court’s grand jury, and I look forward to the result. I hope that the Government accept and abide by whatever decision the court takes, and I am sure that the Minister will confirm that they will.

We attack the institutions of human rights at our peril, and I hope that the Minister will say that the British Government intend to continue their participation in the European Court of Human Rights, and to continue with their acceptance of the European convention on human rights and its place in British law. The convention is an instrument of defence. Roma people in Hungary, and Travellers in other countries, have nowhere else to go, and victims of racist attacks across Europe are in part protected by the judgments made. We do well to state our strong view that we believe in human rights, and in the UN and European conventions. We should be proud of that, not afraid of it, frightened by it or intimidated by it.

17:08

[Kerry McCarthy (Bristol East) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Rosindell. I congratulate the Members present on their contributions. I, too, will not attempt a world tour of human rights, but I pay tribute to the Members who have talked in detail about the situation in countries such as Bahrain, Saudi Arabia, Nigeria, Pakistan, Colombia and Sri Lanka. It is not possible for me to canter through those countries, but there were some very well made points.

I entirely endorse the comments made by my hon. Friend the Member for Islington North (Jeremy Corbyn) among others, about one and a half hours not being sufficient time for a debate of this nature. There is inevitably a time lag with such reports, and a lot of water has passed under the bridge since this report was compiled, with developments in countries such as Bahrain and Syria. I hope that next year’s report is given the full justice of a debate in the Chamber, and a full-length one too.

Of course, Labour Members share the Committee’s belief that all Departments need to provide a clear, consistent and robust message on the fundamental importance of human rights. I note that the Committee’s report expressed concern about the delay in the Government’s strategy on the use of soft power, which has been mentioned. I hope that the Minister will take that back to the other Departments and urge them to do all that they can, and particularly to use the opportunities presented by forthcoming events such as the Olympics, to promote the Government’s human rights message.

More troubling was the conclusion by the Committee that the Government had failed to take

“a stronger and more consistent stance”.

Obviously, the Government have to be nuanced in the manner in which they respond to individual cases and to take into account the likely impact of private or public condemnation. Although I note that the Department’s official response was that the Government

“will not downplay criticism of human rights abuses”,

perhaps the Minister could respond in more detail on the Committee’s concerns and some of the concerns expressed by hon. Members today, particularly in relation to Saudi Arabia, Syria and Bahrain, and respond to the concern of Human Rights Watch that the UK may create an impression of double standards.

Throughout the report, a common theme is the greater emphasis under the current Government on the Foreign Office’s role in promoting the UK’s commercial interests. Of course, it is very important that we develop strong trade links with other countries, particularly at a time when the domestic economy is faring so badly, but there is always a balance to be struck, not least if the Foreign Secretary is to achieve his stated aim of a foreign policy that always has

“consistent support for human rights and poverty reduction at its irreducible core”.

The Prime Minister, meanwhile, has asserted that the UK must place

“our commercial interests at the heart of our foreign policy.”

When the Minister of State, Foreign and Commonwealth Office, the hon. Member for Taunton Deane (Mr Browne), gave evidence to the Committee, he said that the Government saw no inherent contradiction in those two statements, although he acknowledged that they could give rise to “short-term tensions”, so perhaps this Minister could elaborate on how the Department manages those short-term tensions. To what degree do we tolerate human rights abuses by a company that we are trying to secure a greater trading relationship with and to what extent do we use the trading relationship as a means of putting pressure on the other country to deal with those human rights abuses? I think that people will share my concern that in some instances the commercial relationship is deemed far more important than dealing with the human rights abuses.

The Foreign Affairs Committee emphasised the need for human rights to feature more prominently across the Government, so will the Minister tell us what progress the Foreign Office is making with the Department for Business, Innovation and Skills, UKTI and UK Export Finance in particular? Let me single out one country in relation to which there is particular tension. The Committee highlighted that as a particular concern. I am referring to China. It is notable that the Chancellor of the Exchequer chose Asia for his first international visit of 2012. Obviously, Asia is a continent of great economic importance for us, but there is a careful balance to be struck. Will the Minister tell us whether officials were present during the Chancellor’s visit to raise the UK Government’s concerns about the deteriorating human rights situation in that country and to make clear that, regardless of the purpose of the visit—whether it is primarily about economic matters or about other matters—human rights issues must always be on the agenda while such abuses exist?

The Committee noted its concern about the Prime Minister’s decision to visit the middle east to promote UK arms suppliers during the early stages of the Arab spring. It now seems that the UK continued to export between July and September last year to Bahrain, Egypt and Saudi Arabia. I would appreciate the Minister’s response to the conclusion of the Campaign Against Arms Trade that

“While the Government promotes arms exports to repressive regimes, it is pure hypocrisy for it to talk about supporting human rights and democracy.”

The right hon. Member for Tonbridge and Malling (Sir John Stanley) mentioned that there does not seem to be a reference in the report to what is regarded as the cornerstone of our arms export policy—that we do not export to countries that may use those arms for internal repression or external aggression. I would be pleased to get the reassurance from the Minister that that remains the Government’s objective when it comes to arms sales.

I share the concern of my right hon. Friend the Member for Cynon Valley (Ann Clwyd) about the attempts to promote cluster munitions sales at the arms fair in the UK, which I know she raised at the Human Rights Watch report launch the other day. I would appreciate a reply from the Minister on that.

I will just skim over some of the other points. The delay in the implementation of the Bribery Act 2010 is another matter of concern to us, as is the postponement—cancellation—of the Gibson inquiry. I appreciate entirely why the Government have had to do that while a criminal investigation is ongoing, but can the Minister assure us that a future inquiry will be established on the basis that has the respect of NGOs, former detainees and the international community?

I shall just mention one of the countries specifically dealt with in the report, because the issues surrounding it are very much current. My hon. Friend the Member for Ilford South (Mike Gapes) talked about Sri Lanka. We have recently had the report published by the Lessons Learnt and Reconciliation Commission. I hope that, at some point over the next few weeks, we will find time for a full debate on that in the House, because there are many question marks over the report, in relation to the terms of reference of the commission and its recommendations. I know that I am asking the Minister a lot of questions, but it would be helpful if he could he say whether there will be an opportunity for further debate on that, because there was only a written statement from the Government.

Finally, I would like to raise the decision to exclude countries not eligible for overseas development assistance from the human rights and democracy programmes. That runs the risk of excluding countries that could benefit from human rights projects. The Westminster Foundation for Democracy is concerned that such an approach will limit the choice of which countries it works with. Will the Minister update us on that and clarify the support available to countries that are not eligible for overseas development assistance? What assessment is being made in the Department of the impact of that decision?

17:17

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

Through their contributions, all colleagues have made as clear a practical demand for more time to debate the subject as ever I could. The hon. Member for Bristol East (Kerry McCarthy) has done so in the past couple of minutes—I think there were 20 questions in 90 seconds. I am not the powers that be in relation to scheduling, as colleagues know, but I entirely take the point. Again, as most colleagues know me reasonably well, they will know that, if I could, I would spend an hour answering all the questions. I will certainly take the matters raised back to the Department. I am stepping in for the Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Taunton Deane (Mr Browne), today as he has another engagement, but I am sure that both of us feel the same.

Thank you for your chairmanship, Mr Rosindell. You have presided over yet another excellent debate, in which colleagues from all parties have demonstrated a common commitment. As was said by my hon. Friend the Member for Croydon South (Richard Ottaway)— I thank him for securing the debate and for how he has led it—the Government share the concerns raised. I appreciate the generous remarks made about the Government’s commitment to the matter, which were, perfectly properly, interspersed with demands for us to do more. That is the right of the House and of individual colleagues. There is an underlying sense of our commitment to the matter—Government in, Government out. That is very important and is a benevolent ratchet that the House applies to try to get us to do even more.

As is clearly the case, I cannot possibly answer all the questions. I will do my best to answer some, but I will also note all the colleagues who are present and ensure that a letter goes to them covering the particular issues I do not mention. Everyone here will then have a record. As I know of your personal interest in these matters, Mr Rosindell, I will perhaps copy you in on that letter, so that you are also aware of it.

I thank the Foreign Affairs Committee for its positive and constructive engagement with the FCO in our work to promote human rights. I add to that a thanks to all those who are engaged in this work overseas, often in dangerous places—not just the NGOs, but the journalists. They do an extraordinary job at great risk to themselves in bringing us much of the information on which we have to rely and take a view.

The Government take a positive, activist approach to human rights around the world. As Ministers have consistently said since taking office, Britain will continue to stand for democratic freedom, universal human rights and the rule of law. Our values are essential to and indivisible from our foreign policy, and we will raise human rights concerns wherever and whenever they occur. All FCO Ministers take an active interest in human rights, and I am proud to be involved in this work. Indeed, reference has been made to the Foreign Secretary’s human rights advisory group, which has met three times since its formation in December 2010. It has challenged us to raise our game on business and human rights, an issue raised by a number of colleagues, and on promoting freedom of religion and belief.

We are not over-idealistic. We are interested in achieving results. We take a realistic and practical approach, working with the grain in countries throughout the world. We consistently raise human rights issues, including with major powers such as China, but we seek to do so in a way that we judge will have the most impact. The 2010 Command Paper that we are discussing today highlights 26 countries of concern in many regions of the world. They are those that have the most serious and wide-ranging human rights concerns. We also take account of the level of UK engagement, and consider where we can have an influence, and where there is potential for a broader, positive impact on a country or region.

The FCO has continued to fund projects around the world that make a real difference, including through a dedicated human rights and democracy fund. FCO-funded projects have helped to overturn death sentences in Africa, and in Uganda and Kenya alone that has resulted in hundreds of death sentences being overturned. Work that began in Mexico to increase the protection offered to journalists by the state was taken up throughout central America. We have made a tangible difference to the lives of some 60 million to 70 million disabled people in India by improving their access to polling stations, Government websites, and state television news.

On Colombia, which the hon. Member for Ilford South (Mike Gapes) mentioned, human rights were a theme of the visits to the United Kingdom of President Santos in November 2011, and Vice-President Garzón whom I met on Monday. One example of what has been achieved in Colombia—I pay tribute to the hon. Gentleman—is that the Prosecutor General has created new specialist units to deal with crimes of forced displacement and forced disappearance following on from the recommendations of a project funded by the embassy.

China has been mentioned. We supported Chinese officials conducting pilot independent monitoring of pre-trial detention facilities, carrying out prison reform, improving the treatment of those with mental health conditions in the criminal justice system, and supporting the exclusion of illegally obtained evidence in criminal trials. I cannot answer the specific question asked by the hon. Member for Bristol East, but I will write to her about the presence of officials with the Chancellor. She can certainly be assured that such matters are not neglected or forgotten when dealing with China.

In the immediate aftermath of the Arab spring, which my hon. Friend the Member for Croydon South mentioned when he opened the debate, Tunisia ratified the optional protocol to the convention against torture. We are funding early work through the Association for the Prevention of Torture to help Tunisia to implement the optional protocol, including by establishing an effective national preventive mechanism.

I am pleased to say that we have seen progress in human rights in some unexpected quarters. As was mentioned, the new Government in Burma have made some important political reforms in recent months, and released hundreds of political prisoners. Earlier this month, my right hon. Friend the Foreign Secretary visited Burma, and signalled to the President that we would support the Government in their efforts. The large release of political prisoners that followed his visit was a particularly welcome sign, but there is much to be done to repair the damage of the past, and the Select Committee can be assured that the Government are very alert to that.

Turning to some of the issues that colleagues have raised, I will do my best to deal with them. While we are on the Arab spring, my hon. Friend the Member for Croydon South mentioned detainees in Libya. I was there just before Christmas, and the truth is that there is a Government there who are committed to principles that we regard as crucial, as set out by the national transitional council during the course of the conflict. But they are dealing with a system that, frankly, hardly exists. There is no structure for handling judicial cases in the manner that we would expect in relation to the detainees. There is concentration on doing the job. They know that the treatment of detainees is a key distinction between the new Government and the Gaddafi regime, so they want to get it right. There is a problem with capacity, and we must be understanding of the position in which they find themselves, after not just eight or nine months of conflict, but 40 years of a structure that is not conducive to the quality of justice and care of detainees that we would expect. We are working with them on that, and will continue to do so. They know how important it is. The transitional Government have acknowledged clearly that human rights abuses are taking place in prison, and they have promised to tackle that. We will also work with them on that.

My hon. Friend spoke about the problems relating to funding and the relationship with official development assistance. It is not the case that just because a country is not eligible for ODA funding that human rights support stops. We have some 12 programme funds, providing £139.5 million to support a wide-range of projects around the world, many of which include a human rights element. Such support is not consequent solely on the ODA criteria. The conflict pool and other funds are available, and we will continue to make them available. Indeed, some of the Arab partnership money is also being diverted to such projects as well.

Let me say to the right hon. Member for Cynon Valley (Ann Clwyd), whom I know well from her interest in this subject over such a long period, that I will do my best to help her out a little in relation to the human rights advisers. I do not think that we are far apart on this matter. There is no deliberate obfuscation here. She suggested that the letter of my right hon. Friend, the Secretary of State, obscured the issue. Let me read the key paragraph.

“You”—

the Committee—

“asked for details of the number of FCO staff engaged in human rights work across the world. Human rights represent an integral part of our Foreign Policy. It is therefore the case that all our Missions have a responsibility' to monitor and consider human rights. In order to give you a clearer sense of how much the FCO does, I have asked the department to do further work on estimating the scale of resource devoted to human rights work across the network, taking into account our wider policy not to provide full details of staffing numbers overseas for security and operational reasons. In Human Rights and Democracy Department (HRDD), we continue to have 25 permanent staff, plus one contracted Human Rights Adviser.”

In every post that I have visited over the past year, there are colleagues who are engaged in this work as part of what they do. The number of colleagues who will be engaged will vary according to what the circumstances are, but they are all engaged because it is a key principle of what we are involved in. The fact that there may not be a specific adviser in each post does not detract from the importance of the work, as, I trust, the compilation of the report and the commitment that we demonstrate might exemplify.

The reasons for being cautious about staffing numbers overseas for security and operational reasons has, I think, been explained to the Committee in private before, and there are good reasons for that. The matter of the defence attaché is different because it involves a different Department. Our caution is not designed to obscure a commitment to human rights. Our commitment is demonstrated by the work that we do and the fact that everybody is imbued with this sense of commitment, as opposed to numbers.

The right hon. Lady raised issues about arms exports and the like. This is a difficult area. If people are being clear cut, they would say that no one should sell arms; it is a very straightforward moral issue. As soon as we get into the position of saying, “Hold on, some countries have a legitimate right to defence and we are very good at supporting countries that might need to defend themselves,” then we get into the area of judgment. My right hon. Friend the Member for Tonbridge and Malling (Sir John Stanley) knows that well; his Committee scrutinises everything that we do in great detail. Our criteria are open. They include prohibition against weapons that would be used for internal repression or the continuation of a regional conflict. However, that does not mean that in each and every case where there might be human rights concerns about some aspect of domestic policy, it necessarily governs a decision on arms that might be needed to protect and defend a state from incursion by others. The number of licences that we revoked after the start of the conflicts during the Arab spring showed that we have a flexible system that takes account of changing conditions, which is what is wanted. I know that my right hon. Friend will be exploring this matter further with the Foreign Secretary during a Committee session shortly.

The arms trade treaty, which was mentioned, is very important to us. I was shaking my head vigorously because I do sign off the odd letter in relation to this. I get a bit cross when NGOs from outside suggest that we lack commitment to the ATT. The ATT is mine and it comes under my remit. I am very committed to it and we are working very hard to get it right. Please do not feel that there is lack of commitment to this. It will be hard to get an agreement, but our commitment is very strong and very real.

I could say so much more. The fact that so many colleagues have such a strong commitment to this area matters a lot to the Government. I hope they feel that we share that commitment. We could debate each of the areas mentioned—Sri Lanka, Israel, the occupied territories, Iran and Pakistan—and I suspect that we will in due course. I will be happy to respond to colleagues’ letters and to speak on these issues in time to come.

Question put and agreed to.

17:30

Sitting adjourned.

Written Ministerial Statements

Thursday 26th January 2012 Written Statements

Thursday 26 January 2012

Pre-packaged Sales in Insolvency

Thursday 26th January 2012 Written Statements

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Davey)]

In March 2011 I announced that we would be taking steps to improve the transparency and confidence of pre-pack sales in insolvency. We subsequently consulted interested parties on measures targeted at the sales of assets in insolvent companies where these are sold to connected parties (such as the directors or their close associates).

Pre-pack sales can offer a flexible and speedy means of business rescue and when used appropriately can be the best way of maximising returns for creditors. However, everyone who is affected by insolvency is entitled to have confidence that insolvency procedures are used fairly and that insolvency practitioners deliver the best possible outcome for all creditors.

It is apparent that concerns remain about the use of pre-pack sales, particularly where the assets are sold to a connected party—something that is often referred to as “phoenix-ism”. I am concerned about the potential for sales to be effected at an undervalue, particularly in smaller-value asset sales, where unsecured creditors may receive less than they should. I also believe that it is important to consider the effect of pre-pack sales on competitors in the market.

Following the announcement, BIS officials have discussed the merits and practical application of the proposed measures with a range of interested parties, including secured and unsecured creditors, insolvency practitioners, and business representatives.

Having taken account of all the issues, however, the Government are not convinced that the benefit of new legislative controls presently outweighs the overall benefit to business of adhering to the moratorium on regulations affecting micro-business which is an important plank of this Government’s deregulatory agenda. As much of the concern was related to small businesses, I do not consider that measures should be introduced just for businesses other than micro-businesses. It is for this reason that I am today announcing that the Government will not be seeking to introduce new legislative controls on pre-packs at this time.

The Insolvency Service, an Executive agency of BIS, already monitors compliance by insolvency practitioners with the professional standard statement of Insolvency Practice 16 (Pre-packaged Sales in Administrations) which requires administrators to provide creditors with early post-sale information on details of the sale and the justification for it. I have asked BIS officials to now undertake an urgent review in conjunction with stakeholders of how the existing controls on pre-packs have been working and whether, in the light of their experiences and the outcomes from the monitoring, more could be done within the existing regulatory framework to improve confidence and transparency. The issues raised by pre-packs are important matters that affect a wide range of stakeholders including business interests, and I look forward to discussing the findings of the review with stakeholders in the spring.

Feed-in Tariffs

Thursday 26th January 2012 Written Statements

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

As the House will be aware, the Government’s proposed changes to the feed-in tariffs (FITs) scheme are the subject of a judicial review. Specifically, the Government have been challenged regarding their proposal to apply new tariffs for solar photovoltaics (PV) from 1 April 2012 to all new installations with an eligibility date on or after an earlier “reference date”, which we proposed should be 12 December 2012.

Yesterday, the Court of Appeal handed down a negative judgment on the Government’s appeal against an earlier decision by the High Court. We respectfully disagree with the judgment and are seeking permission to appeal to the Supreme Court. In the light of that, we cannot rule out the possibility that lower tariffs could be applied to installations which became eligible for FITs on or after the proposed reference date. It is important that consumers are aware of this.

The reason for appealing is that we want to maximise the number of installations that are possible within the available budget for FITs, rather than use available money to pay a higher tariff to half the number of installations. Solar PV can have a strong and vibrant future in UK and we want a lasting FITs scheme to support that future and jobs in the industry.

We have already put before Parliament draft licence modifications that (subject to the parliamentary process) would bring a 21p rate into effect from April for solar PV installations which become eligible for FITs on or after 3 March, to help reduce the pressure on the budget and provide as much certainty as we can for consumers and industry.

In the meantime, we want as far as possible to minimise the uncertainty for PV and other technologies eligible for support under FITs. We are therefore still intending to publish the phase 2 consultation by 9 February. This will include proposed tariffs for other FITs technologies and a set of reform proposals for the scheme. We are also intending to publish the Government’s response to the other aspects of the phase 1 consultation that are not affected by the judicial review (namely the proposals on energy efficiency and for multi-installation tariff rates).

Nursing and Midwifery Council

Thursday 26th January 2012 Written Statements

[The Parliamentary Under-Secretary of State for Health (Anne Milton)]

Today, I have asked the Council for Healthcare Regulatory Excellence (CHRE) to undertake a strategic review of the Nursing and Midwifery Council (NMC).

With a view to further strengthening the NMC’s leadership and governance, the Department also plans to consult on re-constituting the NMC’s council to reduce its size. This is in line with a recommendation by the CHRE. The Department believes that this option now warrants consideration for the NMC.

On 11 March 2008, a debate took place in the House of Commons that raised concerns about the NMC and its performance, Official Report, columns 46-51WH. In response, the previous Government asked that the CHRE expedite its annual performance review of the body. The report found that the NMC was performing its statutory duties, but not to the standard that the public had the right to expect.

Following that report, the NMC agreed an action plan to address the concerns. A new council, made up of equal lay and registrant members was independently appointed from 1 January 2009. A new chair was appointed on the same date and a new chief executive took office later that year.

Subsequent reports by the CHRE have found some areas in which the NMC is improving. Regrettably, however, their most recent report on fitness to practise, published in November 2011, shows that the rate of improvement in this area falls below the standard that the public and registrants have the right to expect. That is why I have taken the decisions to commission the CHRE to conduct a wide-ranging review and to undertake a consultation on the constitution of the council.

The review will look at the NMC’s organisational structure, resource allocation and operational management. It will establish what further action is needed to ensure that the NMC is effectively carrying out its statutory duties to promote high standards of conduct and practice in order to protect the public. The NMC supports the review, which will report to Ministers by early summer.

How the NMC council might best be constituted to provide strong, strategic oversight will be the subject of a public consultation and views from all stakeholders will be welcomed and taken into account.

Metal Theft

Thursday 26th January 2012 Written Statements

[The Secretary of State for the Home Department (Mrs Theresa May)]

I am announcing today our intention to lay a Government amendment to the Legal Aid, Sentencing and Punishment of Offenders Bill to tackle metal theft.

The Government consider that legislation is the only sustainable, long-term solution to the growing menace of metal theft. There is an urgent need to make stealing metal less attractive to criminals, and tackling the stolen metal market will act as a significant deterrent.

That is why I can confirm that we will lay amendments to:

create a new criminal offence to prohibit cash payments to purchase scrap metal; and

significantly increase the fines for all offences under the existing Scrap Metal Dealers Act 1964 that regulates the scrap metal recycling industry.

Cash transactions for scrap metal are often completed without any proof of personal identification or proof that the individual legitimately owns the metal being sold. This leads to anonymous, low-risk transactions for those individuals who steal metal. In addition, the widespread use of cash facilitates poor record keeping by the metal recycling industry and can support tax evasion activity.

Today’s announcement follows the commitment outlined in the national infrastructure plan published in November 2011 when the Government announced £5 million to establish a dedicated metal theft taskforce to enhance law enforcement activity in this area.

These amendments are part of our wider attempts to tackle all stages in the illegal trading of stolen scrap metal, and we shall bring forward further measures in due course.

City of Liverpool Cruise Terminal

Thursday 26th January 2012 Written Statements

[The Parliamentary Under-Secretary of State for Transport (Mike Penning)]

The Department consulted last year on a proposal from Liverpool city council to alter the use of the City of Liverpool Cruise Terminal. The Department proposed to lift its objection to the removal of a grant condition that precludes use of the City of Liverpool Cruise Terminal for turnaround (start or end of cruise) operations, in return for the phased repayment of £5.3 million of grants. In the light of that consultation, I find that there are persuasive arguments that this level of repayment would be insufficient to reflect the adverse impact on competition with other ports. I therefore intend shortly to seek independent advice on a more appropriate figure.

I will report further to the House when I have reached a decision on the DFT objection. As Liverpool city council is aware, turnaround operations would also require state aid clearance from the European Commission.

Meanwhile, turnaround cruise operations continue to be permitted at Langton Dock in Liverpool.

National Policy Statement for Ports

Thursday 26th January 2012 Written Statements

[The Parliamentary Under-Secretary of State for Transport (Mike Penning)]

On 29 November and 19 January, the House of Commons debated the national policy statement for ports which I laid for parliamentary approval on 24 October 2011. In the light of the satisfactory completion of that process I am pleased to inform the House that I am today designating it as a national policy statement under the provisions of section 5(1) of the Planning Act 2008, and laying copies before you as required by section 5(9)(b) of the same Act.

The planning system is a key to the future timely development of the country’s port infrastructure. The designation of this policy statement marks a significant step forward, clarifying what is required to enable the successful major port developments that will be essential for trade and economic growth in the long term.

Street Works (Lane Rental)

Thursday 26th January 2012 Written Statements

[The Parliamentary Under-Secretary of State for Transport (Norman Baker)]

I am today publishing the outcome of the Government’s consultation on proposals to allow trials of lane rental schemes to be undertaken by a small number of “pioneer” local authorities. Lane rental would involve the local authority applying a daily charge where street works obstruct traffic at the busiest times, providing a clear financial incentive for works to be carried out in less disruptive ways.

The Government are now inviting applications from authorities wishing to operate “pioneer” schemes. The guidance I am publishing today makes clear that the Government are prepared to approve up to three such schemes, in areas where the local authority has already sought to achieve the desired effect through other means, including through a road works permit scheme. Lane rental charges would need to be targeted on those streets where works cause the greatest disruption, and would need to provide a genuine opportunity for works promoters to avoid charges by carrying out their works at less disruptive times. Evidence from the performance of the “pioneer” schemes will inform future decisions on whether lane rental should play a wider role. Any revenues raised from lane rental will have to be used for purposes that will help to reduce the disruption caused by works—for example, research and development into disruption-saving techniques and technologies.

The guidance and other documents are now being published on the Department for Transport’s website, and I will be laying the necessary regulations before Parliament shortly.

EU-Switzerland Agreement Opt-in Decision

Thursday 26th January 2012 Written Statements

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

The Government are committed to the free movement of workers within the European economic area and Switzerland, and also to protecting the sustainability and affordability of our welfare systems. As part of that commitment we want to ensure that non-active migrants from third countries outside the EU cannot gain access to welfare benefits if they have never worked or paid contributions in the United Kingdom.

The present decision replaced a Council decision of 6 December 2010, which cited the, in our view, correct legal base of article 79(2)(b) of the Treaty on the Functioning of the European Union (TFEU) which allows the EU to adopt measures concerning the free movement rights (in this case social security rights) of third country nationals. As article 79(2)(b) lies within title V of part III of TFEU, the Government considered whether it wanted to opt into the measures and we concluded that we did not. The content of the revised decision was identical to that of December 2010, but the legal base was changed to article 48 TFEU, on social security coordination for migrant workers in the EU.

A similar situation arose earlier in 2011 with proposals to amend the social security provisions of the analogous EEA agreement. Then, as now, we took the view that these proposals would have the effect of extending social security co-ordination rights to non-active persons moving between the EU and a third country (in this case, Switzerland); and that the revised legal base was inappropriate as it related only to free movement within the EU.

In negotiations, the UK expressed serious concerns over the legal base, particularly since there was an existing decision with identical content, and over the procedures under which the decision was being adopted. Negotiations were curtailed, and no justification was given for the change in legal base. The Council decision on the EU-Switzerland agreement was adopted in Council on 16 December 2011. The Government submitted a written minute statement setting out our objections.

In parallel with these processes, we considered across Government the options open to us, including legal action. To maintain a consistent approach in line with the action taken concerning the EEA agreement, we decided to take direct action in the European Court on the basis that the article 48 legal base is incorrect and that the Council decision is therefore invalid. In addition, we confirmed our earlier decision not to opt into the measure.

On the same day that the decision was adopted in Council, the UK lodged an application under article 263 TFEU with the European Court of Justice to annul the Council decision and a further application under article 278 TFEU to suspend the decision.

By taking legal action against the Commission in both the EEA and EU-Switzerland agreements, I believe the Government are able to underline an important point of principle concerning the interpretation of TFEU and this action demonstrates how seriously the Government take our obligation to protect our rights under the treaty.

Industrial Injuries Advisory Council

Thursday 26th January 2012 Written Statements

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

In accordance with the Cabinet Office’s recent guidance on public bodies, which took effect from 1 April 2011, I have launched a review of the Industrial Injuries Advisory Council (IIAC). This review will examine the council’s functions and whether it should exist at arm’s length from Government. If it does, the review will go on to examine whether the council’s control and governance arrangements continue to meet the recognised principles of good corporate governance. I will inform the House of the outcome of the review when it is completed. IIAC is also due to be reviewed as a Scientific Advisory Committee, and so, in the interests of proportionality and value for money, these reviews are being combined.

House of Lords

Thursday 26th January 2012 Lords Chamber

Thursday, 26 January 2012.

11:00

Prayers—read by the Lord Bishop of Manchester.

EU: Disintegration

Thursday 26th January 2012 Lords Chamber

Question

11:06

Asked By

[Lord Pearson of Rannoch]

To ask Her Majesty’s Government whether they have contingency plans for the disintegration of the European Union.

[The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)]

My Lords, the Government do not envisage the disintegration of the European Union. The United Kingdom remains a full member of the EU and we will continue to work hard with our many allies throughout Europe to advance our national interests, as well as those of all other EU member states.

[Lord Pearson of Rannoch]

My Lords, both Chancellor Merkel and President Van Rompuy have said that if the euro breaks up, the EU itself will follow suit. In case they are right, should we not plan to develop our trade and ties with the countries of the future, most particularly and obviously with the Commonwealth? Secondly, should we not be encouraged in this initiative by the knowledge that the EU was supposed to bring peace and prosperity to Europe, whereas in fact it has brought—

[Noble Lords]

Peace.

[Lord Pearson of Rannoch]

My Lords, that is now wishful thinking. The EU has in fact brought austerity, slump and civil unrest. What is the EU for? Why do we need it at all now?

[Lord Howell of Guildford]

My Lords, we have to be clear-sighted about the future. In one respect the noble Lord is right: all the great growth in new consumer markets, and the areas in which we must succeed as a nation if we are to maintain—let alone increase—our living standards, tend to lie in the emerging powers of Asia, Africa and Latin America. That is where my right honourable friend the Foreign Secretary has emphasised all along that we must develop our commercial, economic and political clout in order to survive. In that sense the noble Lord is right. However, at the same time, Europe is our neighbourhood and our biggest market. It is full of innovation and potential for the future. There are eurozone difficulties—no one denies that—at the moment, although with the European Central Bank now issuing unlimited three-year loans to all banks in trouble, there is at least a breathing space ahead on the question of the eurozone itself.

As to the specific matter of the Greek debt structure and how it will be resolved in the next few days, I really could not comment. However, one obviously hopes that it will be an orderly affair.

[Lord Dykes]

My Lords, if an aspiring Tory candidate for the other place decides to deny that he is Europhobic to the local party, he will not be selected. That means, logically, that UKIP is not fit for purpose, so will it not disintegrate much quicker than the eurozone recovers from its own crisis?

[Lord Howell of Guildford]

I am not sure that I quite get the ins and outs of all that. Generally, I hope my noble friend agrees with me that Europe is our neighbourhood but the world is our market, that we must have a balanced and sensible approach in developing good relations with a European Union which obviously requires reforming and modernising to meet the 21st century, and that we must also adjust our own nation to meet this new international landscape.

[Lord Peston]

My Lords, is it not a bit thick to blame the euro for our economic troubles when the Government are doing all they can with their own economic policies to destroy our economy?

[Lord Howell of Guildford]

I hear the view of one very learned economist but, as he knows, I think probably better than many economists, there are many different views, and that is very healthy. All economists tend to disagree with each other on these matters. Indeed, when they agree, they are usually wrong. As an ex-economist—a renegade economist—I am afraid that I have to disagree entirely with the noble Lord. I believe that our policies are the right ones to move us out of the colossal difficulties we face not only over the eurozone but the gigantic debt mountain that we were left by the previous Government.

[Baroness Gardner of Parkes]

My Lords, on this Australia Day, will the Minister confirm that he is well aware that the ties with the Commonwealth are already very strong and that everyone believes they will continue to be so?

[Lord Howell of Guildford]

Yes, I can confirm that I am well, well, well aware of that. The Commonwealth is one of the great networks of the future and we are proud to be members of that network. Indeed, it provides a gateway to many of the great new markets that I was talking about a moment ago.

[Lord Kinnock]

My Lords, in the interests of equipping members of this noble House, can the Government arrange for the provision to the noble Lord, Lord Pearson of Rannoch, of a sandwich board with, “The end of the world is nigh” written on one side and, “Stop the world, I want to get off” on the other? Is it not true and does the Minister agree that the United Kingdom’s best interests are in remaining a strong member of a modernising European Union in order that we can effectively deal with what the noble Lord, Lord Pearson, calls “the countries of the future”—notably those in Latin America, China and India? They really respect and take us seriously because we are participants in the EU.

[Lord Howell of Guildford]

I mostly agree with the noble Lord that our European membership is very valuable in promoting trade interests and access to new markets. At the same time, the bilateral links on the Commonwealth network have their part to play. Therefore, as usual, the answers lie in a number of directions, and if it is a question of sandwich boards, the glory of this House is that we tend to avoid simplicities and single answers and see that in many of these areas the answers are complex and multifaceted.

Lord Triesman: My Lords, unlike the noble Lord, Lord Pearson, our concern relates to the Government’s plans to improve cohesion with European partners. Last week, the Minister told me that my view was itself too dramatic. However, a week of discussions with other European missions has suggested to me that it was not. What preparatory discussions did the Prime Minister have with the Heads of Government to prepare them for the steps he took at the December Council? What instructions were given to our ambassadors throughout the EU to prepare other Governments for the steps that the Prime Minister took at that Council?

[Lord Howell of Guildford]

The details of this have been set out, particularly by my right honourable friend the Minister for Europe in front of the Lords European Union Committee the other day. I recommend that the noble Lord reads them. They are very detailed and answer his question very closely. Broadly, however, the preparations were of course there but had to be conditional on the initial drafts of what was going to be, and now is becoming, the intergovernmental agreement. It was presented in the first instance in December as a treaty for the 27. The draft of that was available only 24 hours before the actual meeting, so inevitably there had to be some last-minute reactions and adjustments, but at the end of it all it was perfectly clear that the safeguards sought by the Prime Minister were not going to be available and that haggling over an intergovernmental treaty that other members wanted to achieve rapidly would have been very disruptive. The best way was simply to say that we did not wish to be part of it, and that is what happened.

[Baroness Howarth of Breckland]

My Lords, if we are so influential in Europe, what are the Government doing to ensure that the financial framework matches the plans for 2020? At the moment, the common financial framework has not been adjusted to the 2020 planning, particularly regarding the work on the common agricultural policy, where a huge amount of funding continues to go into non-innovative processes.

[Lord Howell of Guildford]

Well, we are. The Government and many outside government continue to work to strengthen and reform all aspects of the European Union. The common agricultural policy is by no means set in concrete and certainly requires reform, as do infrastructure fund arrangements and many aspects of financial regulation, all of which can be improved. We are working away at those things all the time.

Developing Countries: Free and Fair Elections

Thursday 26th January 2012 Lords Chamber

Question

11:15

Asked by

[Lord McConnell of Glenscorrodale]

To ask Her Majesty’s Government whether they consider the conduct of free and fair elections to be a prerequisite for United Kingdom aid to developing countries.

[Baroness Northover]

The Government have committed to support at least 13 countries to hold free and fair elections by 2015. Elections are not a prerequisite for aid, but we provide direct support only for Governments who share our commitment to poverty reduction, human rights, public financial management and accountability to citizens. Where democratic norms are not respected, we ensure that those in need receive essential assistance by working outside Governments.

[Lord McConnell of Glenscorrodale]

My Lords, I thank the noble Baroness for her Answer. The Government will be aware of the continuing concern about the organisation of the recent elections in the Democratic Republic of Congo. The UK Government are significantly increasing aid to the DRC over this year, next year and the year after. Will the Government, as part of the discussion on that bilateral aid, insist on lessons being learnt in that country, which suffers from some of the worst poverty and violence in the world, to ensure that future elections are more reliable and more transparent and that the results are trusted by more of the population?

[Baroness Northover]

I have read the noble Lord’s blog on his experiences in the DRC as an election monitor and I give him credit for going out there to do that. He noted how enthusiastically people voted, but that is balanced against problems in the election. We are monitoring the situation. We expect the full results of the DRC National Assembly elections are to be published shortly. Some problems have been flagged up and we seek that the DRC electoral commission investigates all of them. We are extremely well aware of the problems in the DRC. It was flagged up to me, for example, that it is the worst place in the world to be a woman. The noble Lord will be extremely familiar with the problems and we are well aware of them.

[Lord Chidgey]

I want to press my noble friend a little further on the issue of the DRC. I, too, had the opportunity to visit the country a few months ago before the elections, but the issues that were obvious then are still obvious today. Is my noble friend familiar with the DfID report, Electoral Assistance and Politics: Lessons for International Support, which states:

“Delivering free, fair and credible elections is … a considerable but important challenge, logistically, financially and politically”?

As my noble friend rightly says, the electoral commission has postponed issuing the results of the legislative elections yet again. The international election experts have left the country—frankly, I think, in disgust because they cannot get access to the election data—and the diaspora from the Congo, particularly in this country, are traumatised by the continuing fraud in elections in their home country. What will DfID do to try to make some sense of it all?

[Baroness Northover]

The first thing that I would emphasise is perhaps a sense of humility. If noble Lords bear in mind how long it took us to democratise from 1832 to 1929—in terms of the franchise for women—it is not surprising that, in some of these fragile states, it takes a long time to ensure that the elections are carried out fairly. Positive accounts are coming from the DRC about the elections, as the account of the noble Lord, Lord McConnell, bears out. As I said, various concerns are being monitored, particularly by the United States. We are in close contact. My noble friend Lord Howell answered on this subject the other day and the Minister for Africa is also pressing on the matter. We share those concerns and we are taking this forward, but we need to bear in mind the difficulties.

[Lord Alton of Liverpool]

My Lords, reverting to the specific Question asked by the noble Lord, Lord McConnell, about the DRC and the outcome of the elections, if the delegation that has been in London this week from opposition parties in the DRC is right and it is found that the elections have been entirely gerrymandered, will Her Majesty’s Government refuse to recognise the legitimacy of President Kabila and his Government? What about the opposition parties and their leaders who have been imprisoned in the DRC since the election and the closure of their television and radio stations and other media outlets? What have the Government to say about that?

[Baroness Northover]

One has to bear in mind the interests of all involved. It is striking that none of the observation missions—again, I make reference to the one that noble Lord, Lord McConnell, was on—judged that the overall result of the presidential election would have been changed by the irregularities that have been flagged up. However, it is clearly essential that the DRC electoral commission takes the necessary steps to investigate and address all reported irregularities.

[Lord Foulkes of Cumnock]

Will the Minister join me in commending the work of the Westminster Foundation for Democracy in promoting free and fair elections? I declare an interest as one of the Labour governors of the WFD. She will be aware that the foundation has put forward a business plan to the Department for International Development so that we can develop our work in the Middle East, north Africa and in other parts of Africa. We are still awaiting—for some time now—a response from DfID. Can she give an assurance that it will come in the very near future?

[Baroness Northover]

As the noble Lord clearly knows, the department is discussing with the Westminster Foundation for Democracy, which has done excellent work right across the world, how to take forward the work that DfID wants to encourage in supporting elections and everything that goes into making those elections work. That includes making sure that civil society is developed, that political parties are encouraged and that there is some basis on which these elections can work more effectively.

Small Businesses: Finance

Thursday 26th January 2012 Lords Chamber

Question

11:21

Asked By

[Lord Harrison]

To ask Her Majesty’s Government what measures they propose to help small businesses and start-up companies access finance.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)]

The Government have a range of measures in place to help small businesses and start-up companies to access the finance they need. They include the enterprise finance guarantee scheme, which helps small businesses lacking track record or collateral to secure bank finance, the enterprise capital funds programme, which provides equity funding to high-growth potential businesses, BIS’s export finance guarantee, UK Export Finance’s products, and the recently announced £20 billion national loan guarantee scheme that will enable banks to offer lower-cost lending to small and medium-sized businesses.

[Lord Harrison]

My Lords, can I invite the Minister to correct the false impression given yesterday by the Prime Minister in PMQs that bank lending had increased to small businesses? In fact, the trend in bank lending, published by the Bank of England, shows a decline from April to November of last year. I remind her that the Federation of Small Businesses still talks about the difficulty of members obtaining bank lending. When they do it is typically at a 10 per cent rate. The other government programmes, for instance the Merlin programme, are all smoke and mirrors. The regional growth fund has been lending to big businesses, not small businesses. Can she think of something radical, for instance the state-funded Small Business Administration in America, which has successfully lent to small businesses the right amount of money to get the economy going? It is time that this Government did something big for small businesses.

[Baroness Wilcox]

Right. I am very pleased that I was at Prayers this morning when the right reverend Prelate the Bishop of Manchester read so beautifully the prayer with the words, “the sea rageth”. Without doubt the sea rageth when it comes to money and getting growth going, but it is important that we keep the faith and keep a steady course. The things that I have read out so far are working. There is no doubt that we are lending money to small businesses and they are starting to do well.

[Lord Forsyth of Drumlean]

I congratulate my noble friend and the Chancellor on the initiative that he has taken to allow people who are starting up businesses to obtain support under the enterprise allowance scheme from near relatives, which, for most people starting a business, is the main source of finance. May I respectfully suggest that what we need in this country is not more debt in businesses but more equity, so the Chancellor’s emphasis on this is really very important and worth while?

[Baroness Wilcox]

Of course, I agree with my noble friend. It is a great asset to allow families to support new businesses. I have no doubt that in the next few weeks when the Budget comes to us, we will hear the Chancellor emphasise again the points that my noble friend made so well.

[Lord Martin of Springburn]

My Lords, it is deeply worrying when stories come from self-employed businesspeople running small companies—sometimes one-man companies—that the banks give verbal assurances that they will give them finance, but several weeks later when they come to sign up the banks withdraw the assurances. That is cruel and hard, and I hope that the Government will be able to do something about it.

[Baroness Wilcox]

We are of course very aware that very often it is difficult for small businesses to make their case. They do not have the mechanisms that large companies have and are not sure how to go and speak to the banks. The banks assure us that they are working very hard to help people, particularly self-employed people, who come to make a business case. Of course, they have to make a business case because it is other people's money that they are borrowing.

[Lord Razzall]

My Lords, I am sure that the noble Baroness will be aware that, notwithstanding the list of programmes that she put forward in response to the Question, particularly in the light of the current economic situation there is significant criticism that the Government should be doing more to stimulate growth. Does she think that Her Majesty's Government have the correct balance between the deficit reduction programme and the steps that are being taken to stimulate growth, particularly in the SME sector?

[Baroness Wilcox]

I thank my noble friend for his question. The answer is: yes, I do.

[The Lord Bishop of Exeter]

Is the noble Baroness aware that in a county such as Devon, at the heart of the rural economy are a host of small and micro businesses? Is she further aware of the particular challenges facing small, rural businesses as they try to raise start-up capital and money for ongoing investment at this time? Will she gave an assurance that the various programmes that she mentioned, as well as local enterprise partnerships, are properly weighing the needs of rural businesses compared with those in more urban areas?

[Baroness Wilcox]

The right reverend Prelate makes a very fine point. As he knows, I come from Devon. All the banks are being made aware of the fact that not everyone comes to them with the same case. Banks have heard so much criticism since the Government took office that they are very sensitive to the need to make sure, certainly in rural areas, that they are seen to be listening sympathetically to every case.

[Baroness Symons of Vernham Dean]

My Lords, will the Minister tell the House what is being done to help small businesses to export more? We know that many markets abroad would benefit from putting their small businesses together with ours. What action are the Government taking to concentrate on small businesses getting into these very important export markets?

[Baroness Wilcox]

The noble Lord, Lord Green, heads up our export division. I am absolutely sure that he has this well on his scanner. When he took up his office, he decided not to go abroad first but to go around Great Britain and look at small and medium-sized businesses to see what they needed and what help they could be given. I like to think that one day he will come here and described this himself.

[Lord Flight]

My Lords, does the Minister agree that while the Government are doing a lot of what they can to provide finance, the real issue for small business is the cost of the regulatory burden, this is an unattractive economy for small businesses to operate in, in comparison with others, and what is needed is a programme of regulatory exemptions for small businesses?

[Baroness Wilcox]

As my noble friend knows, we are looking at the regulatory system from top to bottom to see that, wherever possible, we make it easier for people to go to work and to get the job done.

Health: Tropical Diseases

Thursday 26th January 2012 Lords Chamber

Question

11:29

Asked By

[Baroness Hayman]

To ask Her Majesty’s Government what international support they expect to receive for the new Department for International Development initiative to combat neglected tropical diseases announced on 21 January.

[Baroness Northover]

The Government have just announced a fivefold increase in support for neglected tropical diseases. This will help to protect more than 140 million people worldwide. It will strengthen the UK’s partnerships with the World Health Organisation, foundations such as the Bill & Melinda Gates Foundation, the Carter Center, other donors, pharmaceutical companies that are making drug donations, the endemic countries and non-governmental organisations.

[Baroness Hayman]

I welcome that very positive response from the Minister and the Government’s initiative in this field. I should declare a non-financial interest as a trustee of the Sabin Vaccine Institute, which works to develop new vaccines for diseases such as human hook worm and on mass drug administration programmes.

Does the Minister agree that diseases such as guinea worm, river blindness and schistosomiasis not only devastate the health, education and employment prospects of hundreds of millions of the world’s poorest people but impede progress towards the achievement of the millennium development goals? Given that eradication is a real possibility and that intervention is so cost-effective, will the Government do all they can to ensure that generous donors, such as the Bill & Melinda Gates Foundation, and other countries continue their efforts so that we can rid the world of these truly awful diseases?

[Baroness Northover]

The noble Baroness is absolutely right. I pay tribute to her and to her husband Martin Hayman for all that they have done in this field. When this announcement was made, my honourable friend Stephen O’Brien said:

“British support will take the neglected out of neglected tropical diseases”.

That is clearly critical. The noble Baroness is absolutely right: these are devastating diseases. The United Kingdom can help gear up what is happening elsewhere. The Bill & Melinda Gates Foundation has been remarkable in what it has managed to achieve, as has the Carter Center. The possible elimination of guinea worm by 2015 would be the second human disease that we have managed to eliminate.

[Baroness Kinnock of Holyhead]

My Lords—

[Lord McColl of Dulwich]

My Lords—

[Lord Strathclyde]

Let us hear from the noble Baroness.

[Baroness Kinnock of Holyhead]

Does the Minister agree that the distribution of drugs and the setting up of treatment programmes present a huge challenge in many of the countries where these neglected tropical diseases are endemic, where health systems are already struggling to provide even the most basic services? Would she also agree that a further challenge comes from meeting requirements to regulate a range of what will be new medical products and to evaluate their safety, their efficacy and their quality in very particular conditions, for instance in Africa? Will the Minister assure the House that funding will be provided to support efforts to strengthen health systems and to build capacity to regulate the new drugs?

[Baroness Northover]

I can give the noble Baroness that assurance. She will know that there is a conference on Monday that will be attended by Bill Gates and many organisations, including the WHO. This will doubtless be part of what they will be considering.

[Lord McColl of Dulwich]

Would my noble friend agree that this Government’s policy of increasing aid to developing countries is just and admirable and so is the method of giving aid on condition that it is spent on agreed projects and carried out by reputable NGOs?

[Baroness Northover]

I thank my noble friend for those comments. I would also point out that British universities, which have a long track record in research on tropical diseases, are also able to take advantage of this so that the work done at Imperial College, the London School of Hygiene and Tropical Medicine and the Liverpool School of Tropical Medicine should also be encouraged.

[Lord Walton of Detchant]

My Lords, now that smallpox has been eradicated from the world and that the same may soon be true of poliomyelitis and that vaccines for malaria and many other neglected tropical diseases are in an advanced stage of development, this development by government is most welcome. Is the Minister satisfied that there are sufficient training opportunities in tropical medicine in this country to enable doctors to be trained who wish to work in the tropics on the eradication of these diseases?

[Baroness Northover]

I thank the noble Lord for his comments. The prospects before us are astonishing. I have just mentioned the United Kingdom universities and their research centres. I know that various noble Lords, including the noble Lord, Lord Crisp, are playing a part in trying to ensure just that.

[Lord Chidgey]

Can my noble friend confirm that the £20 million increase in funding, a fivefold increase, from the UK Government is in fact dependent on finding matching funds? Therefore, can she tell your Lordships’ House what progress has been made in securing those matching funds, and whether this would enable the programme to maintain its dynamicism, which is obviously so important?

[Baroness Northover]

Yes, the contribution to the Carter Center is based on matched funding, and the conference on Monday will help to take this area forward.

[Lord Crisp]

My Lords, I declare an interest as chairman of Sightsavers, part of the UK Coalition against Neglected Tropical Diseases. I congratulate the Government on this initiative and on continuing the leading role that the UK plays in development. Does the Minister agree that the Government, national Governments in the affected countries, Sightsavers and others can now plan confidently to eradicate blinding trachoma—it is eminently preventable: we know all the ways to do it and we have the drugs—and that we should be able to do that in the next decade?

[Baroness Northover]

I certainly hope that that will be the case, and one of the diseases that this new programme will focus on is indeed trachoma.

Storage of Carbon Dioxide (Inspections etc.) Regulations 2012

Thursday 26th January 2012 Lords Chamber

Motion to Approve

11:36

Moved By

[Baroness Stowell of Beeston]

That the draft regulations laid before the House on 14 November 2011 be approved.

Relevant document: 33rd Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 23 January

Motion agreed.

Scotland Bill

Thursday 26th January 2012 Lords Chamber

Committee (1st Day)

11:36

Relevant documents: 17th Report from the Delegated Powers Committee, 17th Report from the Constitution Committee.

Motion

Moved by

[Lord Wallace of Tankerness]

That the House do now resolve itself into a Committee on the Bill.

Amendment to the Motion

Moved by

[Lord Forsyth of Drumlean]

As an amendment to the Motion “That the House do now resolve itself into a Committee on the Bill”, to leave out from “House” to end and insert “declines to consider the Bill in Committee until Her Majesty’s Government have laid before Parliament a report on the results of the consultation they launched on 11 January on Scotland’s constitutional future and until the Scottish Parliament has passed a further Legislative Consent Motion in respect of the Bill”.

[Lord Forsyth of Drumlean]

My Lords, I begin by thanking my noble friends the Leader of the House and the Chief Whip for their courtesy in dealing with the first part of my amendment, in so far as a timetable Motion has been brought forward to ensure that those parts of the Bill which are concerned with matters that are subject to consultation will be dealt with at a later stage. I am grateful to the usual channels on all sides of the House for ensuring that that happened. It is a happy remedy to the problem that was created by the consultation paper setting a date of 9 March for responses.

Consultation papers on referenda seem to be a bit like buses: just when you are not expecting any, two come along. We have a competing consultation paper from Alex Salmond and the Scottish Executive, which was launched yesterday in no less grand a place than the Great Hall of Edinburgh Castle, which in my day was used only for state and non-controversial occasions. It would be a bit like the Prime Minister launching a consultation paper on a matter of controversy in the great hall here at Westminster—something I know he would never contemplate doing.

I am afraid that I have a number of questions for my noble friend and for the Government on the second part of my amendment, which deals with the issue of legislative consent. Perhaps I may dwell for the moment on the consultation paper that has been released by the Scottish Executive. That has a deadline for responses of 9 May, which is after this Session of Parliament is likely to have ended. The Chief Whip on the opposition Benches is shaking his head. Perhaps it may be possible for us to continue discussions on the Scotland Bill beyond 9 May, with his agreement—I think not.

I am very concerned about this competing consultation paper. First, it proposes an absolutely rigged question on independence. It is a loaded question; those who were listening to the “Today” programme will have heard the advice from a completely impartial US expert which confirms that. The question invites the answer “Yes”. That the First Minister is suggesting that loaded question, and that the Electoral Commission, which I am delighted to say he has now agreed should be involved, should be unable to opine on the question, makes me very concerned about the First Minister’s ability to deliver a referendum campaign that would be fair and balanced let alone legal.

What is being proposed in the consultation paper that has been released is not a referendum at all, and what the First Minister is proposing is the most expensive opinion poll in history—it will cost £10 million. It will not be a decisive referendum, because the authority of the Westminster Parliament would be required to achieve that. He is planning on having a very expensive opinion poll; and if he succeeds in getting a result of yes, he would enter negotiations with the Government, and people would then discover what they had been voting for in his referendum. That seems quite the wrong way round. There is an opportunity for us to amend the Bill to ensure that we have a properly conducted and fair referendum that will be decisive, to bring this matter to a conclusion, and to ensure that all the arguments and information are made available to the voters in advance.

As for this consultation paper, I am also concerned about the Government’s attitude—I would like to have a response from the Minister—both to the question and to the fact that the Electoral Commission’s role is to be rigged. The commission will not be able to carry out its duties, as it did most recently in the referendum on AV. Not only was the Electoral Commission responsible for that referendum but the chief executive was the accounting officer. It seems to me that that should also be the position in a matter as serious as deciding whether to break up the United Kingdom.

Not only does the consultation paper propose that there should be a rigged Electoral Commission: the position on campaign expenses is also being rigged. For the Scottish parliamentary elections, each political party was able to spend £1.5 million. The consultation paper proposes that the sum should be reduced to £250,000 per party. I wonder if that is because there is one party in favour of breaking up Britain and at least three against, and this is an attempt to limit their ability to put the argument. So we have a rigged question, a rigged role for the regulator and rigged expenses. On top of that, there is the suggestion that there should be a rigged franchise.

I dwell on this at length to emphasise how important it is that we ensure in this Bill that we have a proper process in place, so that at the end of the day, however people vote in Scotland on breaking up Britain—yes or no—no one can say that it was not fair and the result was not reached in a proper manner.

It really is extraordinary. Certainly when I was Secretary of State I was conscious that I was a Conservative—in many ways I felt that I was in opposition all the time I was in the Government—but I was also conscious that, as Secretary of State, I had a wider duty. On looking at this consultation paper, I am afraid to say that the First Minister has betrayed the trust which has been put in him as First Minister, and he appears to be putting his party’s interest before his country’s interest while posing as a champion of national interest.

One other point that we have to discuss, which relates to legislative consent, is the whole question of so-called devo-max. The consultation paper suggests that there could be a second question on that. Whatever your views on this, and I am not a fan, it would undoubtedly change the nature not just of how business is treated in Scotland but of how business is treated here. In effect it would create an English Parliament and a federal parliament. That is a matter for the United Kingdom as a whole, and if we are to have a referendum on devo-max, whatever it is and however it is defined, it is something for a referendum for the whole of the United Kingdom. Therefore to suggest that a question on devo-max should be added to a referendum on independence is again a deliberate attempt to rig the thing in order to split those who are opposed to breaking up Britain. Once more, I think that that is the purpose.

11:45

I turn now to the second part of my amendment, which suggests that we should not continue with this Committee stage until the Scottish Parliament has passed a further legislative consent Motion in respect of the Bill. I am not sure whether noble Lords have had an opportunity to look at the report of the committee of the Scottish Parliament which considered the issue of legislative consent and reported on it just before Christmas. If the First Minister is so concerned about devo-max, why has the Scottish Parliament not even discussed the report of that committee? The committee concluded:

“On the basis of all of the evidence that we have heard, the responses from the UK Government to the amendments suggested by our predecessor and by others in this new Parliamentary session, the Committee, therefore is unable to recommend that the Parliament approve a Legislative Consent Motion (LCM) on the Scotland Bill unless it is amended in line with the Committee’s conclusions and recommendations”.

The committee says that it should not give legislative consent to this Bill unless its conclusions and recommendations have been agreed. The First Minister, who says that he is concerned about devo-max, has not even debated those proposals. So we do not know what the Scottish Parliament thinks, but we do know what the committee thinks.

There are 45 recommendations which are conditional on approval, according to a committee dominated by the Scottish nationalists. Perhaps I may tell noble Lords what the last one is. Recommendation 45 states:

“We recommend that the Bill be amended to provide full fiscal autonomy for the Scottish Parliament and enable the devolution of welfare and benefits”.

The second to last recommendation, number 44, states:

“The Committee considers that, should the UK Government proceed with the current financial provisions within the Bill, it would be unacceptable for these to be enacted without express agreement of the Scottish Parliament. Therefore, the Committee recommends that the Scotland Bill be amended to include a mechanism for joint approval”.

The fourth to last recommendation, number 42, states:

“The Committee recommends that the UK Government only proceed with the Scotland Bill if it has secured the clear legislative consent of the Scottish Parliament and met any conditions within that legislative consent motion”.

My question to my noble and learned friend is this. What on earth are we doing discussing this Bill at all if the Scottish Parliament cannot even be bothered to decide whether that is its position? And if that is its position, what are the Government going to do?

The Prime Minister has announced that he has a respect agenda for Scotland. Would it be respectful to proceed with this Bill if the Scottish Parliament takes the view that we should not proceed with it? I ask this simply as a humble seeker after truth. I should say to my noble and learned friend that I am not going to read out all 45 recommendations, tempted as I am, but I have to say that if the Scottish Parliament is not going to debate them, surely we should not be debating them, or surely we should have answers from the Minister as to the Government’s attitude. Perhaps we could have a debate in the Moses Room, although it would be rather paradoxical if the unelected House of Lords—as the Leader of the Scottish National Party, the First Minister, Alex Salmond, insists on calling us—actually got round to debating a committee report that was dominated by his own party in the Moses Room.

[The Advocate-General for Scotland (Lord Wallace of Tankerness)]

Without Moses!

[Lord Forsyth of Drumlean]

I do not think that Alex Salmond would like being compared with Moses. After all, Moses never got to see the Promised Land. However, on reflection, perhaps my noble and learned friend is right.

One other aspect of the consultation paper is that he wants to rig the franchise and give the vote to 16 and 17 year-olds. My researchers tell me that there are only nine countries in the world that give the franchise to 16 and 17 year-olds, two of which are North Korea and Cuba, both of which have leaders with a high opinion of themselves.

I am not noted for carrying a flag for the Scottish Parliament but, to be serious, there are some very important recommendations here, on some of which I have tabled amendments so that they can at least be debated. I do not agree with all of them, but some of them are perfectly sensible. For example, this Bill provides for the control of speed limits in Scotland to be devolved to the Scottish Parliament. I think that that is daft, because you would cross the border and suddenly there would be a different speed limit. But it has been agreed—it is in the Bill and I do not want to question it. However, the committee of the Scottish Parliament says that it should not give legislative consent unless the Government agree to change the Bill, which at the moment allows the Scottish Parliament to set the speed limits for cars but not for HGV vehicles. It seems a little odd that we are prepared to devolve responsibility for motor cars but not for HGVs. I have tabled an amendment to which I hope my noble and learned friend will give fair consideration at a later stage. There are other issues, too, which should be considered.

I know that my noble and learned friend is agog as to whether I am going to press this matter to a vote. In order to avoid having to do so, I have tabled an amendment on the issue of legislative consent which says that if within two months of Royal Assent for this Bill we have not had legislative consent from the Scottish Parliament to those provisions which relate to its responsibilities, then the Bill will fall, and only those provisions which do not require legislative consent will remain. I hope that my noble and learned friend, after the consultation period has been concluded, and given the evidence of a lack of good faith on the part of the First Minister, will consider amending the Bill to provide for a fair and proper referendum to be conducted. In those circumstances—if the Scottish Parliament did not give legislative consent—we would be left with a Bill that simply provided for a referendum. I beg to move.

[Lord Foulkes of Cumnock]

My Lords, it is never easy to follow the noble Lord, Lord Forsyth, particularly when you agree with him. Like him, I am very glad that the Government tabled their Business Motion on Tuesday and that we agreed it, because if they had not, I would have supported and voted for the Motion of the noble Lord. It would probably have been the first time that I had done so, but it would have been with enthusiasm and alacrity.

Some of my friends warned me against allying myself with the noble Lord, Lord Forsyth, saying that he is toxic in Scotland. I know that the poll tax which he was associated with was not very popular in Scotland, but I take the simple view that even a Tory is not always wrong. Then, when he or she is right, we should support them; and I think that the noble Lord is right here. I sincerely commend the Prime Minister—I very seldom do that—and the noble Lord, Lord Forsyth, on their clear, unequivocal and dedicated support for the union, because it is not in their narrow party interest. If they were looking after their narrow party interest, they would want to get rid of Scotland, with all the Labour MPs who come to the United Kingdom Parliament.

I say to my colleagues, with great sincerity, that I am sorry that some of them seem afraid of working with the Conservatives and the Liberal Democrats on this campaign to protect the union. Of course we will get jibes from Salmond and the cybernats but that is because they do not want us to work together and to be united. That is why they are saying, “Oh, you are working with the Tories. This is dreadful. This is awful”. I am sure that Members opposite will understand that that carries some resonance, in Scotland in particular. However, I was four years in the Scottish Parliament and I remember that it was Annabel Goldie and the Scottish Conservative MSPs who sustained Alex Salmond. So it is all right for him to work with them when it suits him, but he turns on us when we consider doing so.

[Lord Forsyth of Drumlean]

Does the noble Lord recall that I shall always be grateful to the Scottish Nationalists for bringing down a Labour Government and enabling Mrs Thatcher to become Prime Minister.

[Lord Foulkes of Cumnock]

Indeed. That is something else we agree on. Like the noble Lord, Lord Forsyth, we Labour people keep reminding them of that treachery as well. The only good thing about it was that it enabled me to get elected in 1979, but that is another story.

A few years ago I asked one of the most right-wing Thatcherites, George Mathewson, who said that the only person who had done anything good for the Scottish economy was Margaret Thatcher, why he was now supporting the SNP. I could not understand it because he was a real hard-line Tory. He said, “Because I want to keep you Labour people out in Scotland”. That is why he was doing it and, no doubt, that is why Souter, Farmer and others are as well.

I wish to take this opportunity to urge us all, unionists, devolutionists and the Liberal Democrats—who ought to be federalists—not to be fearful of Salmond. The Liberal Democrats need to rediscover the enthusiasm for federalism contained in their manifesto and I was glad to see Simon Hughes at least talking about devolution within England. I have known Salmond for a very long time, since before he was a Member of Parliament. Of course he is cunning, able and a gambler—but he is not infallible. Already we have seen that he is unable to answer some of the searching questions about the reality of independence. When he is asked about the euro or the pound and about defence—when he is challenged on these issues—he is found wanting. We should challenge him at every opportunity. In particular, he wants to muddy the water with the argument between devolution—or devo-max, whatever they call it—and independence by pretending that there is very little difference; that you can move quietly and easily from maximum devolution to independence. Nothing could be further from the truth. There is a huge, vital difference and we must remind people in Scotland of that difference. That is why the first question—and it must be the only question—is whether or not Scotland should remain part of the United Kingdom. The noble Lord, Lord Forsyth, is right—Salmond is proposing a fixed question. The question should be: “Should Scotland remain part of the United Kingdom, yes or no?”. That is the honest, sincere question but Salmond is trying to muddy it. Once we decide—as I hope we will—that Scotland should remain part of the United Kingdom, then of course we can have a detailed debate about how much devolution. We will no doubt discuss that, hold different views and then come to a consensus on it.

Finally, how do we deal with the Bill? Well, preferably, not on a Thursday.

[Noble Lords]

Hear, hear.

[Lord Foulkes of Cumnock]

It is down for next Thursday as well. Sometimes I think that the Whips on both sides have got it in for us Scots by tabling Scottish business on a Thursday. Not every Member of this House comes from London. Those of us from Scotland who have to travel down and back each week need some consideration in relation to business. It is not just the Whips on the other side but my own noble friends. I have spoken to them—gently—about trying to avoid Thursdays.

We also need to give each aspect of the Bill careful consideration. Some people say we should just rush it through. Salmond accuses us and calls us, as the noble Lord, Lord Forsyth, said, this “unelected House”. He keeps going on about that but this House is part of our constitution. While we exist, we have a responsibility and duty to deal with legislation properly. We should not be ashamed of that. We should not cower.

[Lord Hughes of Woodside]

Would my noble friend remind the House that the Bill was passed by the elected House of Commons in the first place?

[Lord Foulkes of Cumnock]

Absolutely—and, like every other Bill, it is important that we give it detailed consideration. Like the noble Lord, Lord Forsyth, I think that we should consider holding off completing consideration of it until that second legislative consent Motion is through. I have the greatest respect for the Minister, as I do for my own Front Bench colleagues—my noble friend Lord Browne of Ladyton gave me a wee look then. I respect their agreement to hold off consideration until later. However, I hope that they will now give careful consideration to holding off final approval and accepting the amendment of the noble Lord, Lord Forsyth, until the second legislative consent Motion is agreed because this is Salmond’s latest trap.

The future of Scotland does not just affect we Scots but everyone in this United Kingdom. Every Member of this House has a responsibility to take part in that. We must fight to protect the union. It is the most successful economic union in the world, which has existed, developed and moved forward for the past 300 years. It is worth all of us fighting for it. Whether we feel inhibited as unelected Members—I that hope we do not—we should fight for what we think is right.

[Lord Sanderson of Bowden]

My Lords, it is not the first time that, rather surprisingly, I have had to rise to agree with everything that the noble Lord, Lord Foulkes, has said. I, too, have had experience of Mr Salmond as a Minister, when I was in charge of fisheries in the Scottish Office. Of course, Alex Salmond was Member of Parliament for Banff and Buchan, which is—as anyone knows—the main fishing area of Scotland. I can assure noble Lords of what the noble Lord, Lord Foulkes, just said: we are dealing with an extremely clever, devious man, apparently easy going until things are at a difficult stage, and then he will put the boot in.

I will say just one very sincere thing about this particular Bill, which is vital for us and for Scotland. When we consider the referendum, there must be no weakening of the powers contained in the Scotland Act to hold on firmly to the powers that Westminster has over the constitution. This is what my noble friend Lord Forsyth is getting at. I am extremely worried that there are two consultation papers. There is one that we have already seen and one produced in Edinburgh yesterday. The date for final submissions for the Edinburgh document is May. I am very worried that if this goes into the next Session of Parliament—as we hear is likely to happen—Mr Salmond will again get his way. We must not let that happen. We must ensure, through the Scotland Bill and my noble friend on the Front Bench, that when we face the referendum we have adequate safeguards in our Bill to enable us to tell Mr Salmond, “These are the rules by which we are playing”.

[Baroness Liddell of Coatdyke]

My Lords, I have a great deal of sympathy for the position that the noble Lord, Lord Forsyth, has so eloquently set out. A huge amount has happened in the Scottish debate since these issues were discussed in the House of Commons some months ago. We have to take into account the nature of the change in that debate. If the coalition Government had not agreed to defer the discussion of the referendum sections of the Bill, I would have urged the noble Lord to test the opinion of the House on this Bill, whether or not this is Thursday. We must bear in mind the respect for the Scottish people, and it is to the Government’s credit that they have delayed those sections of the Bill until after the end of the consultation process. The consultation document is excellent.

One reason why I believe that this Parliament is so rubbished by the First Minister and the Scottish National Party is because they have consistently failed to make their mark in this Parliament and in elections to this Parliament. The political parties represented here have a mandate from the Scottish people as well, and we are all clearly parties proud to be part of the United Kingdom. I am a proud Scot, a Scot who is proud of being Scottish and of being British—and I am also pretty proud of being European as well. Many of our antecedents fought on the battlefields of Europe under a British flag, and they did so for freedoms that we enjoy today.

The First Minister wants the referendum to be held in 2014 because of the anniversary of Bannockburn. It is also the centenary of the First World War, when my family paid a price, as did many families, for the freedoms that we enjoy. So we should not be taken up by this “Braveheart” rhetoric of the First Minister.

I am very conscious that it is the will of the Government and of many members of my own Front Bench to proceed with this Bill, and I concede to that. There is a wee bit of an element of tidying up here—I always thought that tidying up in January was an affliction that visited the female of the species and that the male had some sort of genetic in-built gear that stopped the tidying up—as I am told that we must not allow this Bill to go into the next Session of Parliament. I am one of those people who is a wee bit sceptical about a self-regulating Chamber, but people tell me that when you have a self-regulating House you are able to do the will of the House, and I believe that it would be the will of the House to give us extra time to consider the next phase of the legislation.

As I indicated at Second Reading, I wish to probe the Minister about the cost of some of the elements within this Bill, not least of the amendments to taxation. We need to get this discussion and debate on to a grown-up level and learn how the disaggregation of taxation in the United Kingdom will be brought about. If possible, I would love to have a debate on the disaggregation of social security in the United Kingdom, because that is something that the nationalists prepare to move on from very quickly indeed.

Let me be a bit controversial. I do not think that the First Minister wants independence. He is frightened of independence. Why else would he say, “Keep the monarchy, keep the Army and keep sterling”—although going into monetary union without fiscal union is something that we should have learnt one or two lessons about. He is frightened of the consequences; he wants the rhetoric but does not want to take the hard decisions.

I urge noble Lords when we consider this Bill to take the opportunity to probe more deeply into what this concept of additional measures of devolution would mean, because I would not want us this time next year or the following year to come back to these issues, particularly around taxation. I look forward to the debates on these matters, but I thank the noble Lord, Lord Forsyth, for putting this Motion on the Order Paper. To our English colleagues it gives some sort of flavour to the issues that we have to address in Scotland, and I am absolutely confident that every one of us in this House, given the oath that we swear when we take our seats, believes that we are proud to be British, just as many of us are proud to be Scottish, Welsh, Northern Irish and English.

[Lord Wigley]

My Lords, I rise with some trepidation, as I did at Second Reading, to intervene but briefly in this debate, because Wales is not Scotland and Plaid Cymru is not the SNP. But I could not sit here and hear my good friend Alex Salmond being bad-mouthed in the way that he has been already in this debate, and no doubt we will hear more of that.

[Noble Lords]

Oh!

[Lord Wigley]

Well, it is for noble Lords to decide for themselves whether the noises made in this Chamber and heard in Scotland will help or hinder the outcome of a referendum that they wish to hear.

[Lord Foulkes of Cumnock]

That is exactly what the cybernats say. Is it not to try to shut us up that they are saying that?

[Lord Wigley]

No, indeed, it is not to shut anybody up but to raise the question that every noble Lord or noble Baroness will answer for himself or herself about the words that they choose in following this very important debate with regard to the future relationships of the countries of the United Kingdom. The noble Lord, Lord Forsyth, rubbished the way in which Alex Salmond had introduced the question, referring to it as a rigged question. He did not, however, read the question out. It is:

“Do you agree that Scotland should be an independent country?”.

I have enough respect for the people of Scotland being able to make a judgment on that, whichever way it goes, because the question is absolutely clear-cut. One can of course have different versions of a question, but that is not a rigged question.

[Lord Gordon of Strathblane]

On a point of clarification, I would vote yes to Scotland being an independent country. We are independent at the moment. We are in a marriage with England, and I am quite happy to renew our marriage vows at any time, but that does not mean we are not independent.

[Lord Wigley]

Of course the definition of “independent” is certain to be central to the debate, but all that argument will not be on the ballot paper. The ballot paper has to have a question that reflects the debate that has taken place, and I have no doubt that there will be a debate in detail about the implications of an independent country. The noble Lord, Lord Forsyth, raised the question regarding a referendum possibly not being valid if it is organised from Scotland. However, as we well remember from the debates of the 1970s, the referenda on the then proposed assemblies for Scotland and for Wales were consultative referenda, as any referendum is in the context of our Parliament.

[Lord Forsyth of Drumlean]

I apologise for interrupting the noble Lord, who is being very generous, but we have just had a referendum on AV which I criticised in this House because, in fairness, it was a binding referendum. It is not true to say that every referendum has been consultative. The difficulty with Alex Salmond’s referendum is that it is simply consultative, but we need to resolve this matter. For example, the Royal Bank of Scotland would not be able to operate in an independent Scotland and if we are going to draw this out till 2016, what is going to happen to the security of our jobs and so on? We need to resolve this one way or the other; that is the criticism. On the point of the question, could the noble Lord, as the spokesman in this place for Alex Salmond, help me? Why is he refusing to agree that that question, which the noble Lord says is fair, should be looked at and determined by the Electoral Commission?

[Lord Wigley]

I am very grateful for that intervention. I am not going to go after the Royal Bank of Scotland because no doubt we will come to those issues later in the Bill, and I hope to be participating then. With regard to the latter point, Alex Salmond said yesterday:

“The question is designed to comply with the Electoral Commission's guidelines which are that referendum questions should present the options clearly, simply and neutrally. The question we have published today aims to be all three, and will be subject to testing using a sample of voters”.

That accepts that he will have discussions with the Electoral Commission, and I understand that the Secretary of State for Scotland has welcomed that.

[Lord Forsyth of Drumlean]

I do not know what the Secretary of State for Scotland has said, but what the First Minister said is what the noble Lord just read out, and it is typical of the weasel words that are used. When he is asked specifically, “Will the question be changed if the Electoral Commission advises that it should be?”, we get no response. Does the noble Lord agree that if the Electoral Commission, as the regulator, suggested a change then any fair minded First Minister would agree to it and agree to that principle?

12:15

[Lord Wigley]

Clearly, anyone concerned with the question will take great note of what the Electoral Commission says. I make it clear to the noble Lord that I am not here answering on behalf of Alex Salmond, but I wanted to stand up and say a word on his behalf when I heard certain words being used—we heard the phrase “weasel words” a moment ago—and his good faith being questioned. He has been described as cunning, a gambler, devious and frightened. I put it to noble Lords that if the debate is going to be pursued in that tone, what will be the outcome and the reaction in Scotland? I leave it at that.

[Lord Kerr of Kinlochard]

My Lords, I am ashamed, as a Scotsman and a Scots unionist, that it took a Welshman to make that point. I agree about the language.

I felt uneasy on 10 January when the noble and learned Lord, Lord Wallace of Tankerness, presented the Government’s consultation paper to us. There was enormous cross-Chamber unanimity that it was a jolly good document, that it was right in law and that it was right on the question and its timing. All the blue bonnets from over the border, the Forsyths, the Foulkeses, the Steels, the Langs—the Scottish political aristocracy of yesteryear—were all strongly in support of what the United Kingdom Government said in their consultation paper. A different view was taken by quite a large proportion of the Scottish people, for whom this all may have seemed a little odd. I do not disagree with the noble Lord on what he said about the law; the paper is mainly about the law and reserved powers and the power in Section 30. However, it is not clear beyond peradventure in Scotland that the terms and the timing of the question need to be settled by us, not by the Scottish Parliament. I am not saying that the people who disagree with that are right but merely that it is a question for debate.

In the debate that I have referred to, the noble Lord, Lord Forsyth, put a number of interesting questions to the Scottish National Party and he has done so again today. He has made an interesting, lively, jocular debating speech, asking questions of the SNP. I feel sorry for the Minister who has to answer the debate; it is not really his job to answer for the SNP. Here is my serious point: why is there not someone in this Chamber who does answer for the Scottish National Party? I know the answer, but it would be highly desirable that all parties that are represented in this Chamber should make informal representations to the missing party. I do not support the amendment of the noble Lord, Lord Forsyth; we should go ahead with the Bill and the Government’s timetabling proposals seem absolutely right to me, but our debates on the Bill would be greatly assisted if we had half a dozen people here who actually believed in the policies of the SNP, perhaps because they were members of it.

[Lord Foulkes of Cumnock]

I completely agree with the noble Lord, Lord Kerr. He may know the answer to his question but maybe not everyone does. My good friend and SNP MP Pete Wishart has raised regularly at SNP conferences that they should take up the offer to nominate for this place. That has been vetoed again and again by Alex Salmond.

[Lord Kerr of Kinlochard]

It is a question that could be raised again, given that we have a legislative workload on Scotland and that we would benefit from hearing the views of the Scottish National Party.

I have an additional point, and here I agree very strongly with what the noble Lord, Lord Wigley, said. I do not want to see the balkanisation of Britain. The first casualty, though, could be the language of constitutional debate. We really should not be using language like “rigged” or “fixed”. If there was someone here to answer and hit back at us in this debate, it would be bold and brave to use such language; it is not bold and brave to use it when there is nobody here to speak for the side that one is attacking. To accuse someone who is not represented here of being devious seems very unwise. We have very serious constitutional questions to address. I am a unionist. It is very important for the future and the health of the union that we address these questions in sober, polite and reasonable parliamentary language.

[Lord Forsyth of Drumlean]

Could I ask the noble Lord about the interesting argument that he is developing about the importance of having people from the Scottish nationalists in this House? Would he apply that to UKIP? When he talks about language, I recall that the noble Lord referred to Members on this side, who are rather more sceptical about Europe than he is, as the Tea Party. Was that an appropriate use of language?

[Lord Kerr of Kinlochard]

I am delighted that the noble Lord remembers—I thought it was one of my most polished impromptus and that it had fallen by the wayside. I have no views on and nothing to say about UKIP. We are talking about Scotland and the party that won a landslide election victory last year and should be represented in this House.

[The Lord Bishop of Chester]

My Lords, I hope I can be forgiven, as a Sassenach bishop, for making a brief contribution. When I go to Burns suppers at this time of year, I find myself with rather better Scottish credentials than many of those who present themselves in kilts: I have two degrees from a Scottish university and one wife from Scotland, as well as a home there. I am probably the only bishop who will have a vote in the referendum, if I understand the franchise correctly. I am tempted to take a poll of all my Scottish friends who will be disenfranchised before I decide how to cast my vote.

I have a specific question for the Minister, which has not been raised so far. The Second Reading debate was in September and we are now entering Committee at the end of January. An awful lot has happened in that time. In the mists of history, I was a chemist and one of the few things that I learnt was that, when you have several variables on the go at the same time, it is difficult to know what is really happening. In doing an experiment, you change one variable to see what the result is before you bring another variable into play. The referendum might be held in the midst of the implementation of the significant additional devolution that is enshrined in the Scotland Bill, not least in the area of taxation, which throws down the gauntlet as regards fiscal matters. Have the Government given any thought to the awkwardness of holding the referendum and that discussion while we are further down the line of implementing this Bill? That rather undergirds what the noble Lord, Lord Forsyth, said and the last part of his Motion. If we are to go ahead with this Bill, we have to do so with the full consent of the Scottish Parliament. If we do not, it will be a very awkward and messy discussion. It is already marred by a great deal of awkwardness and messiness for various reasons.

[Lord McConnell of Glenscorrodale]

My Lords, the result of last year’s election in Scotland produced two significant developments which should affect today’s discussion. I congratulate the noble Lord, Lord Forsyth, on bringing this matter to the Chamber. There is a need to discuss the Government’s overall strategy in relation to this Bill and the other matters that affect its progress.

The first significant impact of last year’s election result in Scotland is that there will come a point when, for the first time since devolution and the innovation of the legislative consent Motion, which my noble friend Lord Sewel introduced, there will be a significant issue—subject to a legislative consent Motion—on which the two Parliaments disagree. The second significant development and impact was that the majority achieved by the Scottish National Party in those elections gave the First Minister the opportunity to use that majority ruthlessly—he has been very clear about this—to determine, if he could, the rules, organisation and timing of the referendum.

Perhaps to the surprise of many of my colleagues, I welcomed the Prime Minister’s intervention this month, but I have two regrets about it as well. The first is that it was several months too late and should have occurred at a much earlier stage in the debate. None the less, it is welcome. The second is that it appears yet again to be part of a government strategy which, to be honest, has regularly since last May seemed to be all over the place, with different Ministers saying different things, the Prime Minister sometimes intervening and sometimes not, and the Government changing their position on different aspects of a referendum or other matters from time to time, or at least giving the impression of doing so.

This debate gives us an opportunity to say to the Government and to the Prime Minister that there needs to be a much more coherent approach to this. It is vital that the referendum, whenever it takes place, does so under fair rules agreed between the parties, not just by the nationalist majority in the Scottish Parliament but by all the parties, as occurred in 1997. The new Labour Government in 1997 gained more votes than did the Scottish National Party in Scotland last May, yet that summer they worked not just with the Liberal Democrats, who were our colleagues in the Constitutional Convention—the noble and learned Lord, Lord Wallace, was a leading figure in that discussion—but with the nationalists, who were against devolution up until that referendum, and with the Conservatives, who at that point were in opposition in the House of Commons. That is the approach that must determine the organisation of this referendum. Any interventions that help us secure that are, in my view, welcome. If the Government are to succeed in this effort, they need to be more coherent and more consistent in their approach to tackling these issues.

As regards the legislative consent Motion, we have to understand that if we have a process that works relatively comfortably when the two Governments are working in agreement and when the two Governments are of, or largely of, the same party, there will be times when the legislative consent Motion is not going to happen because the Scottish Parliament is of a different political composition. You cannot have the principle of the legislative consent Motion and then ride roughshod over it. I know that that is not the intention of the noble and learned Lord, Lord Wallace, and it would certainly not be his approach, but we have to be very cautious about making too much progress on this Bill in advance of further discussion taking place with the Scottish Parliament, as the noble Lord, Lord Forsyth, has said. There is a point of principle on the LCM. We need to be careful how we proceed. I understand the desire of many Members on both Front Benches and elsewhere to make progress on the Bill, but we need to make sure that any such progress and any further interventions on the issue of a referendum should proceed in a coherent fashion and that the Government should follow through with a proper strategy to engage the Scottish Government in discussions—not just do interviews on Sunday mornings on the BBC—even if they have to force them to the table to do that, to make sure that the Scots get the referendum they deserve.

[Lord Hughes of Woodside]

My Lords, I wish to follow my noble friend on the point about how we are going to have discussions with the Scottish Government or the Scottish Executive. The trouble is that there are no circumstances whatever in which Alex Salmond and the SNP will sit down to discuss anything about the future. My noble friend will recall that Alex Salmond is not alone in that—the Conservative Party did not take part in the Scottish Constitutional Convention, which eventually produced the devolution settlement. The Scottish Government refused to have anything to do with the Calman commission, which is the basis of this report. At no time has Alex Salmond been prepared to discuss this rationally with anyone. That is not meant to be an insult; it is a statement of fact. I do not want to go over old scores. I just say to the noble Lord that some of us recollect hearing the wrath of members of the SNP on their doorstep when elections were being fought. That was not a pretty sight. I will say no more than that. However, I do not want to be misunderstood. I will see him outside and tell him later.

I fear that whatever we do today will be misconstrued. Alex Salmond is full of slogans. I remember the slogan in the 1993 election: “Scotland free by ’93!”. Now it is: “Scotland free but not yet”. I do not think that we can achieve agreement. Alex Salmond has said that he wants not only to have the referendum but to set the date for it. I think he will achieve that date, but not by agreement. What happens if we in this Parliament decide—either in the Commons or here, or together—that we want a different date and a different question, and Alex Salmond says, “I am going to have mine anyway.”? How is he to be stopped—perhaps through the Supreme Court? That will easily take up the time until 2014—no problem at all. The dilemma is, I fear, that we really do not know how we are going to deal with this. How can we deal sensibly, reasonably and amicably with a party that is totally determined not to have any discourse whatever?

Although I agree with much of what the noble Lord, Lord Forsyth, has said—in fact, I argued and made representations myself that we should not go ahead, and I even suggested giving the Government a guarantee that we would get the Bill on a date that would be necessary in order not to lose it—we have to go ahead and debate it on the basis of our good faith.

I sometimes think that the only way to make sure that Scotland does not become independent is to trumpet the fact that something like 54 per cent of people in England want Scotland to be independent. What will Alex Salmond do? He will say, “I am not going to be bullied by the English into going independent”. That is his whole attitude—bully, twist and turn. We will do our best, and perhaps the time is coming when we should simply get on with the Bill.

12:30

[Lord McConnell of Glenscorrodale]

My Lords, before the noble Lord takes his seat, will he comment on what appears to be a strategy by the First Minister—the strategy that can be used by those who wish to move out of a block of flats, if I may use that analogy? The best way to get the move, as a tenant, is to annoy the neighbours. Perhaps a strategy is being followed here. Will the noble Lord join me in asking the people of England not to rise to that strategy?

[Lord Hughes of Woodside]

I absolutely agree and, although I do not know whether it is intentional, I think that Alex Salmond has deliberately set out to attack the English and blame them for everything. I guess that I will probably not be around if there is ever Scottish independence to see how the nationalists react when they are on their own and there is no one to blame. Yes, he wants to annoy people and we should not fall for that. When the referendum comes, I hope that people in England, Ireland and Wales get a say in some form or another. The case will be made very strongly that those of us who believe in the union and in Scotland certainly do not believe in antagonising the neighbours.

[Lord Sewel]

My Lords, for a number of reasons, I am not particularly keen for the 1998 Act to be amended, but I will accept it as we progress. However, the important thing is that nothing in the 1998 Act prevents this Parliament legislating in devolved areas. That is stated in the Act itself, but of course to get a proper relationship between the two Parliaments, we formulated what has come to be called the Sewel convention, whereby this Parliament will not normally legislate in a devolved area except with the agreement of the Scottish Parliament—I repeat, not normally. That is the relationship.

The need for a legislative consent Motion, which is founded upon the Sewel convention, was then extended to cover any legislation that affected the powers of Scottish Ministers. I think that that was done without any statement to Parliament. I have never been able to trace, apart from in a Cabinet Office note, how that extension occurred. In some way, that is why we are discussing the need for a legislative consent Motion for the non-referendum part of this Bill. I am attracted to the idea that we split the Bill and deal separately with issues relating to new powers for the Scottish Parliament—which I accept to all intents and purposes come under the requirement for a legislative consent Motion—and the bit about the referendum, because it does not require a legislative consent Motion as a referendum relates to the constitution. The constitution is a matter that is specifically reserved in the 1998 Act to this Parliament. Furthermore, if you read the debates on amendments that Members of the Opposition tabled at that time on the need for a specific reference to an independence referendum, the Secretary of State in the other place and I here made it absolutely clear that by reserving the constitution and everything to do with it, anything anticipatory and ancillary to a referendum is reserved as well.

[Lord Sanderson of Bowden]

Does the noble Lord agree that the time for an enabling Bill, because I think he is going down that route, is in the next Session of Parliament once Scotland has agreed to the consultation document—not our own one but the other one? Surely that is the time for this Parliament to consider and if necessary put through a Bill.

[Lord Sewel]

The noble Lord, as always, makes an interesting and important point. At this stage, I am not prepared to follow him completely, but it is something upon which we may wish to reflect as the debate progresses in our House.

Part of the confusion that we face on the whole business of a referendum, because the debate in Scotland for a long time assumed that it was within the powers of the Scottish Parliament to call a referendum on independence, is because—and we have seen this sort of tactic in a number of areas—the present First Minister has a very good knack of being able to make quite outlandish assertions, and make them so strongly and repeat them so many times that people come to accept their validity without any attempt to find out what the actual position is in reality and in law.

I hope that we progress with this Bill, but we must do so with a great deal of care.

[Lord Steel of Aikwood]

My Lords, although I agree with many of the arguments advanced by my noble friend Lord Forsyth, I am glad that he is not going to press his amendment to a vote.

The noble Lord, Lord Kerr, suggested that my noble friend Lord Sanderson was being a bit unkind in using the word “devious” about Mr Salmond, and I take his point. Can I rephrase that and be positive and say that Mr Salmond is successfully manipulative? That is a compliment. I have said repeatedly that members of Her Majesty's Government underestimate him at their peril. He is not known as “smart Alec” for nothing north of the border. I remind the House that in the previous two general elections in Scotland he did not campaign on independence. He did not even campaign under the banner of the Scottish National Party. He campaigned on the basis of, “Alex Salmond for First Minister”. That tells you a great deal about how we have got to where we are. That campaign was very successful and manipulative.

There is another area that we have rather passed over. Before any Bill is introduced, the Presiding Officer of the Scottish Parliament has to sign legislative competence, both under the Scotland Act and the European Convention on Human Rights. I used to take that matter very seriously indeed, and the noble Lord, Lord McConnell, will not mind me saying that there were occasions when I told the Executive that they could not expect me to act just as a rubber stamp. My legal advisers would send me back with a red box with perhaps 30 pages of their opinion on whether something was legislatively competent or not.

The referendum Bill, as outlined in Mr Salmond’s consultation paper yesterday, would have to come to the Scottish Parliament. Frankly, if I were Presiding Officer I would not sign a document that said that a referendum was within the competence of the Parliament because I do not believe that it is. The noble Lord, Lord Forsyth, may be correct that the Scottish Parliament can hold an expensive opinion poll, but it certainly cannot hold a referendum, for the reasons that the noble Lord, Lord Sewel, just advanced. However, remember what happened after the most recent election. After the first Scottish election, I was elected as the Presiding Officer, and I came from the Liberal Democrats. In the second Parliament, the Presiding Officer, George Reid, came from the Scottish National Party. In the third Parliament, the Presiding Officer, Alex Fergusson, came from the Conservative Party.

On any understanding of common sense and good will, it was the Labour Party's turn to provide the Presiding Officer after the most recent election, but of course Mr Salmond does not do graciousness. He does not do consensus. He had a majority, so a member of the SNP was appointed as Presiding Officer. I make no criticism of her whatever; I think she has behaved perfectly well, but it puts her in an impossible position and has shown again how Mr Salmond's record is one of being successfully manipulative—as did the use of Edinburgh Castle yesterday, to which the noble Lord, Lord Forsyth, referred and as does the question in the consultation paper. We were told over the past few days by every newspaper that Mr Salmond was being so kind that he was going to allow the Electoral Commission to be in charge of the referendum, but when we read the paper we find that it is in charge of the administration but not in charge of the question. That, again, has been successfully manipulated.

I just say to the House that we must be extremely careful in all our dealings with the present Scottish Government. The paper published yesterday is run through with the theme of successful manipulation. I think we should proceed with the Bill. I take the view—as, I think, does my party—that it is not strong enough. We want greater devolution to the Scottish Parliament in future, but that is not on the agenda now. This is a Bill produced by consensus, and for that reason we should press ahead with it.

[Lord Empey]

My Lords, I have great sympathy with the proposal of the noble Lord, Lord Forsyth, because it appears that we are putting the cart before the horse. Nevertheless, I have to say that I do not think that the full implications of what is proposed have sunk in for people. I have a very simple question. If the people of Scotland were to leave the United Kingdom, how can we have a United Kingdom if one of the kingdoms has left? What will we be called? What is Great Britain without Scotland? What will that be called?

A lot of comment has been made about the First Minister personally. I think we should get away from that and forget about the individual. We are talking about the future of more than 60 million of us. We are literally all in this together in every sense. Think of the situation that my colleague, the noble Lord, Lord Browne, and I would be in. We would have a foreign country on one side of us and a foreign country on the other side of us. We would end up like West Pakistan. We are all hewn from the same rock. Imagine the circumstances we would be placed in. We have just spent decades overcoming nationalist terrorism and we have gradually, after years and years, managed to settle down our community. I do not wish to exaggerate, but if the Scottish nationalists were to succeed it could reignite the difficulties that we have just managed to overcome. I do not say that lightly.

Having spent many years negotiating with Irish nationalists of different stripes, I have to say that we have got to get the tone of the debate right. We should not hector nor bully the Scottish people. We must not, we cannot; if we do, we do so at our peril. We will not win the argument by saying, “You’re going to be impoverished here”. Any group of people who are determined enough can be independent. They may not have the same standard of living, but they can be independent and survive.

12:45

There is an emotional issue here which we have to get our heads around. That is where the debate will be won or lost. The people of Scotland are proud. They are proud of their history: look what they have brought to the world, whether in writing, engineering, opening up an empire, on the battlefield or economically—the list goes on. We are not selling the point that together, collectively as a nation, we have done great things together. I cannot see how we can allow an argument to be based around an individual. There are good social, economic and emotional arguments to deploy as to why the United Kingdom has been a most successful venture in the mutual interests of all of us.

Let us forget the First Minister. He is part of it, yes. I take very carefully the point made by the noble Lord, Lord Sewel, about the legalities, but from looking back on the Irish nationalist struggle, the question will never be settled or won in the courts; it has to be won in the hearts of all of us. That is the advice I give noble Lords, having, as I said, sat across the table from people of a totally different persuasion for many years in deep, detailed negotiation. The tone of the negotiation, the tone of the argument and the emotion of it must be at the forefront of people's minds. If we get into the legalities and technicalities, we are losing the argument.

Yes, the foundations have to be laid at the start. I totally support that, but when we get past that, as I hope we will, let us concentrate on selling the positive case that there is for the United Kingdom and not trying to put people down by saying, “If you do not remain part of the United Kingdom, you will be eating grass”. That is not an argument that we have to deploy. We have plenty of arguments and a wonderful country to put the case for. Let us do that. That is the basis on which the argument should be made.

[Lord Singh of Wimbledon]

My Lords, I follow on the theme of the importance of the tone of the debate. We all know the story of the north wind and the sun, who had an argument about which could make a man take his coat off. The north wind tried first and blew and blew and the man pulled his coat tighter and tighter around him. Then it was the sun's turn, and as the sun came out the man felt happy and warm and took his coat off.

I do not think that aggressive language helps the tone of the debate. We have heard words such as “devious”. Even in the phrase “successfully manipulative”, qualifying the word “manipulative” does not help. If and when a referendum takes place, it is certain that the appeal of the nationalists will be to the history of the union in the first place and the history of fighting and coercion. The argument against that is to look to the interests of a new union based on respect and mutual understanding. If the debate is conducted in that way, I think we have a much better chance of preserving the union.

[Lord Maclennan of Rogart]

My Lords, I am grateful to my noble friend Lord Forsyth for moving his amendment to the Motion. It is an extremely valuable debate in which most of the relevant points have been made.

I remain concerned, and would like to hear my noble and learned friend’s views about the Scottish Parliament's failure to pass the legislative consent Motion in respect of the Bill. The difficulty is that such a Motion has not even been tabled—the point made by my noble friend—and its absence is crucial. Legislative consent needs to be affirmative; it cannot be presumed by its absence. In the absence of that Motion, Holyrood cannot even vote to reject the Bill, and its progress to the statute book here is as stymied as if there were a clear Motion opposing the Bill.

I understand that at least some members of the Scottish National Party, and of the committee in the Scottish Parliament that looked at the Scotland Bill, are interested in having discussions about its content. The leader of the Scottish National Party may be using his personal veto to prevent the Motion being tabled, but I noticed that Linda Fabiani, the committee’s chairman, asked the coalition Secretary of State to propose changes to the Bill. There has been no response that I am aware of to that request. I think that it would be appropriate to give a public response knowing what authority the Scottish Parliament has over the outcome of our deliberations. I wonder why we have not had some kind of indication.

The Bill is certainly based on broad cross-party consensus. It is possible, in the light of the changed circumstances, that that consensus may have moved on. Some may be more favourably disposed to even more fiscal devolution than was the Calman commission. I think that we ought to have that debate before we get tangled up in detail. We ought to have some idea of where the consensus now lies. I hope that my noble friend will be able to help us on that. It is an important Bill and a vital step along the path towards a fiscally decentralised United Kingdom.

However, there is another consideration that it is right to ventilate at the beginning of this process in the light of what has been said about the referendum. I believe that the bulk of the Scottish people are now not wholly satisfied with the devolution as it was enacted in 1998. There is quite a lot of evidence that there is a willingness—indeed a wish—to see more done. It does seem that, although this is a step in that direction, we could give the Scottish people a greater clarity and sense of the alternative to separation by having that discussion in the context of this Bill. That should certainly precede our deliberation of individual proposals and clauses. This is far too big an issue to have just a tinkering approach to the Bill, which seeks to implement Calman and in some ways goes beyond Calman. Can we hear from the Minister the Government’s thinking on those two points?

[The Earl of Mar and Kellie]

My Lords, when we considered the then Scotland Bill 12 or 13 years ago, the late Lord Mackay of Ardbrecknish complained that the failure of the Scottish National Party to seek to appoint any Peers caused the Scottish debate to be similar to trying to debate with Banquo’s ghost. I think that the late Lord would agree that that was still a problem here.

Following on from what my noble friend said, this Bill is the result of a very considerable coalition, in the Calman commission, which brought about the Calman report. These parties ought to get on with delivering the Bill, which is fairly tame by comparison with what is actually wanted in Scotland.

Finally, in a single sentence, I hope that this House will try to avoid making the same mistakes it made in 1893 when considering Irish home rule.

[Lord Browne of Ladyton]

My Lords, we have had a wide-ranging and diverse debate on this comparatively simple Motion, and we have the noble Lord, Lord Forsyth, to thank for that opportunity. I have not been long in your Lordships’ House, but when discussing Scotland I have become used to hearing the same familiar voices—speaking on some of the same issues, I have to say.

This debate in its diversity has added something and I am particularly pleased to have heard from the noble Lords, Lord Empey and Lord Singh, and, although it is a Scots voice, from the noble Lord, Lord Kerr. The points that they made individually and collectively should be listened to by my Scots colleagues. I was pleased that on Second Reading my noble friend Lord McConnell made a forward-looking speech. Scotland is in its politics, as I perceive it, beyond arguments that may well have served those of us who wanted to see the union held together. It is now looking for reasons to stay in the union rather than reasons why it cannot leave the union. The tone and content of how we conduct ourselves in these debates is crucial in the modern world. In my contribution to these debates, I intend to try at all times to describe a Scotland that is better for the people of Scotland and the people of the United Kingdom. Some strong strands or threads of debate are emerging already which suggest that there is an appetite in your Lordships’ House for this kind of debate and I am very pleased about that.

My second point is about a slight discord with my noble friend Lord Foulkes who is a very good personal friend as well as being a noble friend and a party colleague. My recollection of the general election on that terrible night in 1979 was not that his election was the highlight in Scotland, but that it was the election of my noble friend Lord Maxton to the constituency of Cathcart. It was a bright light in an otherwise very dull night for me. I hate to introduce that level of discord and I hope that my noble friend will forgive me, but that is certainly my recollection.

[Lord Foulkes of Cumnock]

It is a debatable point whether the achievement of getting rid of Teddy Taylor was better than getting rid of Jim Sillars. Perhaps we could discuss it outside.

[Lord Browne of Ladyton]

The margin of winning may have been very narrow but I certainly know where I stand. I am happy to debate with my noble friend outside but let us just say that there were very few bright lights that night and maybe we should savour them all.

My third point is that I am grateful to the Government, the usual channels or whatever the processes are, which I have never quite got to grips with in this place, for the level of cross-party engagement to manage the order of consideration of the Bill. Having been party to that agreement I shall resist the temptation to discuss referendums and questions relating to referendums in this contribution.

However, I will break that general rule in order to make one point. It struck me as very interesting—indeed, instructive—how quickly the noble Lord, Lord Wigley, who came to the aid of Alex Salmond, went from trying to persuade us that the proposed question was straightforward, via one very simple but telling intervention by my noble friend Lord Gordon, to a position of having to try to define one word of it in order to explain why it was straightforward. If I had had the opportunity to cross-examine him further, I suspect that we may well have got a long dissertation from him on that comparatively simple and straightforward question that would have left us all utterly confused about whether a yes or no answer would have made us any the wiser about the view of the people of Scotland. However, these are discussions for another day. Having agreed this with the Minister, as well as with other Members of the House and with the coalition Government, I shall resist the temptation to say more.

13:00

At the outset of my remarks, I will assert that we on the Front Bench of this side of the House take the view that the Bill, while not perfect—nothing ever is—is good. It is a Bill that we wish to scrutinise and consider in detail, but it is a good Bill for two reasons in particular. It will deliver greater financial accountability to the Scottish Parliament and it will devolve significant economic powers, among others, that will unable that legislature to govern better in the interests of the Scottish people.

In deciding how we proceed with the Bill, it is important that for a few moments we consider how we got to where we are. Whatever the current view of the Scottish Parliament's committee, the Bill has its genesis in the Scottish Parliament. On 6 December 2007 that Parliament, by a clear majority, passed a Motion to review its powers in order to serve better the Scottish people. As we heard from noble Lords, this was a cross-party initiative involving the Scottish Labour, Liberal Democrat and Conservative parties. It is probably well known that, of the major parties in Scotland, only the nationalists refused to participate, preferring to adopt a fundamentalist, all-or-nothing approach to these issues. The most important point is that the Scottish Parliament, which we are now told holds the key to the decision of the Scottish people, expressed an overwhelming view that it wanted to proceed down this route. Those who are now in government in Scotland—democrats that they are—refused to recognise that as a legitimate decision, and refused to take part.

The second point is that this is an exceptionally good example of what my noble friend Lord Foulkes encouraged devolution parties to do: namely, work together in the interests of Scotland. There is a long history of parties who believe in devolution working together in various ways, most recently in the Parliament itself, in the interests of Scotland, and we should not be ashamed of doing that. If some people believe that working together exposes us to criticism that we are in bed or working with certain people who are either toxic or irrelevant to Scotland, we should cast that away. If we are to achieve our objective of more devolution for Scotland within the United Kingdom, we will have to work very hard together over the next couple of years, and the sooner we find a structure for working together to do that overtly for the people of Scotland, the sooner we can get down to debating properly the issues that the Scottish people want us to debate. We have to put all of this behind us. If we believe that in a referendum campaign it will not become apparent that we are all working together and that we all want to preserve the union, we are deluding ourselves. The sooner we get together to do that, the better. My noble friend's advice in relation to that is worth heeding.

Following the decision of the Scottish Parliament in 2008, when I was Secretary of State for Scotland, the Calman commission on Scottish devolution was instructed to review the devolution settlement and to determine ways in which it could be strengthened to increase the financial accountability of the Scottish Parliament and to give it the levers necessary to introduce progressive policies to allow Scotland to blossom in the 21st century. We in your Lordships' House have the benefit of Members who were on the Calman commission. Indeed, we have two very prominent members of the Calman commission in the noble and learned Lord and my noble and learned friend who will speak from their respective Front Benches. Others in the Chamber who have already made contributions to this debate will tell us how the process worked. It was a very open process for the people of Scotland, and a very recent opportunity for Scotland—its political parties, its civic society and anybody who had an interest in the way in which Scotland was governed—to argue and give evidence to the Calman commission about the powers of the Scottish Parliament.

It is interesting that what has now become known as “devo-max”—whatever that is—was comparatively absent from the arguments that were made to the Calman commission. There were no significant, coherent arguments about lacunae in the powers of the Scottish Parliament that the people of Scotland thought they needed. I was not a member of the commission, but I am sure that those who were—I invite the noble and learned Lord to confirm this when he speaks—will confirm that that was the case. It was not 20 years ago; it was comparatively only yesterday in the history of Scotland. So it is interesting to try to figure out exactly who are the people who have a whole host of other powers that they think would be useful for the people of Scotland in the context of devolution, and what their arguments are. The first question we ought to ask them is: “Why did you not surface these during the course of the Calman commission? Why did you not come and make this argument?”.

The debate about Scotland currently tends to be one-sided in its detail. We have seen another recent example of this in relation to the legal basis for a referendum for Scotland. I congratulate the noble and learned Lord the Advocate General on the speech he made at the University of Glasgow last Friday evening. He may have breached the convention that the Government do not reveal their legal advice when he laid out in the clearest terms why this Scottish Parliament required legal help in order to have the power to do what it seeks to do, and for which it undoubtedly has an electoral mandate. I was in the audience. He spent a long time afterwards engaging with questions. Nobody challenged the advice. Some people implied that they did, but they did not set it out. He was asked questions about everything other than that, and he answered them very well. I hope that that does not sound patronising; it was not meant to. He handled it very well and I was very pleased; he knows that because I spoke to him afterwards.

Interestingly, I spoke afterwards to others in the audience—I am tempted to name them, but I will not; they know who they are—who suggested that they disagreed with him. I offered them then, and I offer them now, the opportunity of the same platform to make the same quality of speech and to set out the arguments that they think support the alternative to the position that the noble and learned Lord put over. They had a whole series of biblical excuses about why they could not do it; there were all sorts of reasons to do with their backgrounds. I noticed yesterday that when the consultation by the Scottish Government was announced—they are perfectly entitled to do that—the issue was skated over. My point is that it is incumbent on us when we have this debate to be not just progressive in the sense of looking forward but to be detailed, informed and researched. Up until now, the Government, in relation to this issue in particular, have been detailed and researched and they have, in my view, won the argument comprehensively, but there are many other arguments that they need to win.

To get back to how we got where we are—

[Lord Forsyth of Drumlean]

The noble Lord is making a very interesting and important speech, and I do not want to ruin his thread, but I am not clear about what he is saying about legislative consent. Is he saying that because this process has been gone through, if the Scottish Parliament did not give legislative consent, we should go ahead anyway? Or is he saying that the Scottish Parliament ought to make up its mind and decide? Will he help me with that?

[Lord Browne of Ladyton]

I am grateful to the noble Lord for his question and I shall endeavour, if I may, to deal with those issues in the thread of my argument, because I will deal with them. I apologise if I am engaging your Lordships' House for a period of time on this, but it is important. I want to make this argument in its entirety so, if I may, I shall make it in the order in which I have thought about it.

Not only did the Calman review report, and not only did successive UK Governments welcome that report and start the process of implementing the recommendations—I say at this point that when it comes to the detail of the debate, I will be probing whether we have been true to Calman in some regards, because that is quite important—but we put this issue to the Scottish Parliament. I say “we put this issue”; the issue was put to the Scottish Parliament. We have a Bill that is largely faithful to Calman. Calman is, in my view, well argued and well explained. I know that all noble Lords do not agree with that, but we will have a debate about it. That Bill has been through a process in the Scottish Parliament, and this is important. On 10 March 2011, the Scottish Parliament, on a cross-party basis, which this time included the Scottish nationalists, voted in favour of a legislative consent Motion supporting this Bill—not precisely this Bill, but largely this Bill. It made certain recommendations and asked that the Government and the UK Parliament take those recommendations into account. In other words, it voted in favour of that with conditions, and Alex Salmond himself voted in favour of that Motion on the basis of those conditions, so we have a legislative consent Motion from the Scottish Parliament which Alex Salmond voted in favour of. Those conditions have largely been met. In fact, the amendments to the Bill, and the reason that the Bill arguably has to go back for a further legislative consent Motion, are substantially because of the conditions that the Scottish Parliament asked to be considered that are now reflected in amendments to the Bill. In 2011, Alex Salmond said that he was in favour of this Bill, if the Government did certain things with it. Substantially, those things have been done, as we will no doubt uncover when we debate this in Committee and on Report, and now there appears to be some question mark about whether the Parliament, which his party controls, is prepared to give that amended Bill consent. I do not know whether this is unparliamentary language in your Lordships' House, but it seems hypocritical in the extreme for him, having voted for it, to reject the Bill at this stage.

13:15

The noble Lord, Lord Forsyth of Drumlean, essentially argued for postponement of the legislation pending a further legislative consent Motion from the Scottish Parliament. Although it has not yet surfaced—it will in this debate—there are others who believe that this Bill should be dropped as the pending referendum in Scotland makes it irrelevant. There are others, as we have heard, who think that the Bill does not go far enough and that Scotland has moved on in the comparatively short period since Calman—I would need to be persuaded—and that we should think about even deeper devolution. Some suggest a postponement or some device of postponement until after the current consultations on the process for the referendum are concluded.

These suggestions may on the surface individually appear appealing, but in my view they do a disservice to the people of Scotland for two main reasons. The first is because delay or postponement would be to ignore the express wishes of those elected to represent the people of Scotland. The democratically elected Scottish Parliament provided the impetus for this Bill through its original Motion back in 2007, the democratically elected UK Parliament passed this Bill in the other place in 2011, and the democratically elected Scottish Parliament overwhelmingly supported the Bill the last time it passed the legislative consent Motion in 2011. The democratically elected representatives of all the major parties in Scotland—Scottish Labour, the nationalists, the Liberal Democrats and the Conservatives—have voted in support of this Bill. The people of Scotland want this Bill to pass. Overwhelmingly, they are supportive of the additional powers for the Scottish Parliament, and the people tell us that some of those powers are urgently needed. For this House to postpone this Bill would be to ignore the wishes of the people of Scotland and the faith that they have put in their elected representatives, and I do not want to see that happen.

The second reason is because a number of the elements of the Bill could be implemented quickly and, if they were, could be implemented to the benefit of the people of Scotland. The Bill, if passed, will give the Scottish Parliament the power to tackle the scourge of drink-driving head on. We are told, and I agree, that Scotland in large part has a problem with drink and drunkenness. The Scottish Parliament has wrestled unsuccessfully thus far with trying, through devices, to reduce the consumption of alcohol in Scotland and its effects. In the Bill, we are offering the people of Scotland an opportunity to do something very specific, which I understand that the people of Northern Ireland are already consulting on: reducing the drink-driving limit and therefore restricting or limiting the effect of drink, at least in that area. This could be done very quickly. Where from those who govern Scotland at the moment in relation to these issues is there any sign that they are preparing themselves for this power, which they could have comparatively quickly and could implement in line with their policy? It is nowhere. They could be at this moment consulting on these issues or setting up a consultation, and then they could have a power. We should point that out to them. We should point out to them that the people of Scotland will not forgive them if they have to wait for a decade or so for the implementation of changes such as this that people in Scotland think could be to their benefit.

The borrowing powers in the Bill are wanted by the people of Scotland and would give the Scottish Government greater influence over the pace and priorities of Scotland's capital investment programme, we are told in their official response to Calman. I think we probably all agree that that would be the case. If they had borrowing powers, it would give them opportunities that they presently do not have. Those opportunities are much needed now, not in 10 or 15 years’ time. Alex Salmond has said that borrowing powers are necessary to boost economic activity in Scotland and to give the Scottish Parliament the levers to shape Scotland's future. He has demanded that these powers be devolved, and he has said that they should be devolved quickly. The Bill does exactly that. We should, therefore, pass it so that these powers can be available and can be used as soon as possible for the betterment of Scotland and its people. If they are not, the Scottish people will know who decided not to take them.

Further, the devolution of stamp duty land tax will potentially give the Scottish Government a significant lever to stimulate the Scottish housing sector or encourage the appropriate development of land. On Saturday I went to St Mirren Park to watch the football. Those of you who know Paisley will know that St Mirren recently built a new stadium and abandoned their traditional heartland stadium at Love Street in the centre of Paisley. It was sold to either a developer or a supermarket, I am not sure. Apparently the current economic circumstances do not encourage the development of this site. Consequently, it has been lying derelict in the heart of one of our great cities for years, and looks as though it will lie derelict, falling apart, for a lot longer.

I can think of many such examples in the centre of cities and on brownfield sites up and down Scotland. I am not here to try to develop a stamp duty land tax approach to deal with that, but it is an opportunity and I am sure that those who understand this area of law much better than I do can think of other opportunities where these powers available to Scotland now could be used to provide stimulus to the economy and opportunities for the Scottish people. This opportunity is wanted; it was recommended by Calman and accepted by the previous Government and the coalition Government. If they want it, it is there, and if they do not use it the Scottish people need to know who was responsible for that, and that it was not the unelected Chamber of the UK Parliament.

These are significant powers and they could be put to use now or in a comparatively short period of time. I am mindful of the right reverend Prelate’s question, which I thought was an exceptionally good one, and I will be delighted if the Minister is able to answer it. We in Scotland know that the timetable for some of these powers is urgent and we need to get them while thinking about them is still fresh in people’s minds, and while there is still an opportunity that we can use them in some way to redress the consequences that Scotland is suffering quite significantly as a result of the current recession and of some other policies of certain Governments.

Not only should we be anxious to complete the passage of this legislation but we should be challenging the Scottish Parliament to move quickly to complete the process by an LCM. In the mean time, there are serious questions to be asked and I will be asking them, through the Minister, of the Scottish Government’s preparedness to use these powers. Why are they not preparing now to use the powers that are being offered to them, which they say the Scottish people want and need?

There is one further reason to progress with this Bill. If we do not, we will play directly into the hands of the separatists; we will present those advocating an agenda of separation with an open goal. They will say that those in favour of Scotland remaining part of the UK cannot be trusted; that those in favour of Scotland remaining part of the UK offer with one hand and take away with the other. That may not be true, but postponement creates an opportunity in a Scottish politics that has a vocabulary and a tone the flavour of which your Lordships have heard some of this afternoon. That opportunity will be seized, and we should not present it if we do not need to. We cannot and we must not play into the hands of this argument. To paraphrase my noble friend Lord McConnell of Glenscorrodale when he spoke at Second Reading, we must not sleepwalk our way to separation. We should be very careful about everything we do.

We on this side of the House will forensically and carefully scrutinise this Bill. A number of difficult questions need to be asked—and answered. I will come to the point made by the noble Lord, Lord Forsyth, in a minute as my peroration. This House is rightly respected for its approach to the scrutiny and review of legislation, and that should continue. However, as I said at Second Reading, on this side of the House, we want to get on with this but the tests we will apply are essentially whether or not this is to the benefit of the people of Scotland.

The “small” point that the noble Lord, Lord Forsyth of Drumlean, drew our attention to some one hour and 47 minutes ago is, as everyone has said, an arguable point and I am not dismissing it. I think it is a legitimate point but it has a history. Whether or not that point can be answered, I believe the reasons I have set out about the interests of the people of Scotland and the politics of the current situation demand that we should continue. But I believe and hope there is an answer to the noble Lord’s point.

In the first place, I cannot discern any clear pattern as to when legislative consent Motions are passed by the Scottish Parliament. They appear to have been passed at different times in relation to the passage of legislation in the United Kingdom Parliament but, as I have pointed out, we already have one. It must have been passed after the Bill came from the other place—or was it while it was still there? My understanding is that discussions are continuing between the UK and Scottish Governments, no doubt including the Parliament, about these issues.

In the absence of an indication from the Minister that we should be optimistic that there will be a legislative consent Motion, there is no obvious cause for optimism, and the committee report of the Scottish Parliament tends the other way. Equally, because of the history of the Scottish Parliament’s treatment of this Bill, in my view there are no persuasive signs for pessimism either. I believe that political and other circumstances can be created, and we can contribute to them, where the Scottish Parliament feels compelled to consistency. It will be difficult for individuals and parties in the Scottish Parliament to explain to the people of Scotland why they have refused to take these powers that only months ago they said they wanted.

I cannot guarantee that there will be a legislative consent Motion, but I can guarantee that we have an opportunity to create the circumstances where it becomes more likely than not. I ask the Minister, in the way in which we scrutinise and debate this Bill, to approach everything he says from that perspective. I believe that if the manifest abilities and experiences of people in this House approach these issues from that perspective, we can make a substantial contribution to the future of the people of Scotland; and that we will do our bit to ensure that, when they are asked whatever question they are asked, they overwhelmingly tell us that they want to stay in the United Kingdom.

13:30

[Lord Wallace of Tankerness]

My Lords, I start by thanking my noble friend Lord Forsyth for moving this amendment. He questions whether I should—I think it has been very useful. I hope we will move into Committee, but it is helpful that that has been placed in the context of the current political debate. It is a very serious constitutional debate, not just for Scotland but for the wider United Kingdom, as other noble Lords, not least the noble Lord, Lord Empey, have indicated. The comments that have been made have helped to set that context.

I endorse what was said by the noble Lords, Lord Kerr, Lord Singh of Wimbledon and Lord Browne, about the importance of the tone of these debates. It is important that we conduct these debates in a very rational manner, putting and testing argument in a way that I think is typical of this House. The noble Lord, Lord Kerr, indicated that it was perhaps unfortunate that there are no Scottish National Party Peers here. I do not propose to answer for the Scottish National Party but I share his view. That is a decision that the party has taken. Our debates are possibly the poorer for it. Without embarrassing anyone by naming names, many of us can think of one or two Scottish National Party Members who would certainly add to the deliberations in your Lordships’ House. Of course, they might then be able to move some of the amendments on the recommendations of the Scottish Parliament committee. I know that my noble friend Lord Forsyth will move some of them. No doubt the business managers will have noted his comments about the Moses Room.

We certainly took on board the comments that had been made about the fact that it would not necessarily be desirable for Committee stage of this Bill to take place when there would still be live questions on amendments tabled in relation to the referendum on independence while the Government’s consultation was still outstanding. That consultation will close on 9 March. I am grateful to all who contributed through the usual channels that the House was able to agree a Motion on Tuesday, which has been widely welcomed, to enable our debates on Clause 10 to be taken last. At that time, I suggested to the House that any amendments relating to the referendum or independence should be best placed before Clause 10. Perhaps I may express my gratitude to noble Lords who have tabled, and in some cases retabled, referendum-related amendments before Clause 10 rather than to other parts of the Bill in order that we can fulfil the intention of the order of consideration that was put before the House. To repeat what I said on Tuesday, the Chief Whip will ensure that the last day in Committee is scheduled for the week of 12 March, which will allow us to debate the referendum in the light of the responses received during the consultation period.

That said, we immediately found ourselves debating issues relating to the referendum and the consultation documents. While I am tempted to follow the noble Lord, Lord Browne, down the road of saying, “Well, perhaps it is not appropriate to discuss these”, I think that it would be only courtesy at least to address some of the issues that have been raised. However, quite clearly, when the House resolves itself into Committee and we reach the amendments that have been tabled in relation to a referendum, we will have an opportunity to discuss those issues at greater length and in more detail.

I am very grateful for the comments made by the noble Lord, Lord Browne, about the lecture I delivered at Glasgow University last week. I was able to confirm the very strong view of the United Kingdom Government that under the Scotland Act 1998 the Scottish Parliament does not have the legal competence to pass a referendum Bill. Things obviously flowed from that and we set out in our consultation why we believe that a referendum should be legal, fair and decisive, and the ways in which we might seek to do that.

It is fair to say that we have moved a long way in two weeks. First, I do not think that I had sat down in your Lordships’ House after having repeated the Statement before we had been given a preferred date by the Scottish Government for a referendum, for which many people had been asking for some considerable time. It appears to be the case that we have agreed that the preferred way to deliver the legislation for a referendum is by the two Governments working together. In their consultation paper yesterday, just as the United Kingdom Government expressed their preference for an order under Section 30 of the Scotland Act to take this matter forward, the Scottish Government indicated that their preference was for a Section 30 order.

Without going into the detail of the Section 30 order, I know that my noble friend Lord Sanderson expressed the importance of the role of the Westminster Parliament in constitutional issues. Of course, a Section 30 order not only has to be approved by the Scottish Parliament but has to be approved by both Houses of this Parliament, which means that, assuming we can make progress, any order which we would wish to bring before the House is one which this House would have an opportunity to consider. Clearly, that will be in mind as these discussions take place.

[Lord Forsyth of Drumlean]

Perhaps my noble and learned friend can help me on one point. He has been very generous in agreeing to reschedule the consideration of the Bill in order to accommodate the timetable of the Government’s consultation paper. Will he say something about how he proposes to deal with the problem created yesterday by the Scottish Executive’s consultation paper, which has a timetable that takes us beyond the period probably of this Session and therefore our ability to consider the Bill? How do we resolve that?

[Lord Wallace of Tankerness]

I was going to deal with that matter later. The noble Baroness, Lady Liddell, also made reference to the possibility of carrying over the Bill. Certainly, it is my understanding that the normal process for carrying over legislation is that it has not passed to the second House for consideration. Page 642 of the 24th edition of Erskine May states that,

“carry-over is restricted to Bills which have not yet left the House in which they originated”.

Therefore, to try to carry over this Bill would mean not so much carrying over but effectively starting the process again, which would significantly delay implementation. That is why I believe it is right to continue with the current timetable and I will come on later to explain why. It is important that we make progress on that.

My noble friend Lord Forsyth mentioned the fact that, as we are well aware, the consultation paper was published yesterday. The point is that the UK Government’s consultation paper indicates that while our preference is for a Section 30 order, there is also the possibility of using this Scotland Bill. Clearly, if we are to get this Bill passed in the current Session, it would not be possible to put it off indefinitely. I note that paragraph 1.7 of the Scottish Government’s consultation paper states:

“The UK paper sets out two possible mechanisms to transfer the power to hold a referendum on independence: an Order in Council under Section 30 of the Scotland Act 1998, or an amendment to the Scotland Bill currently under consideration by the House of Lords”.

It does so without any implied criticism. It just states that as a fact. We would wish therefore to make progress, although it is important for us to indicate that, but for the fact that my right honourable friend the Secretary of State for Scotland has been stricken down with chicken pox, there would have been a meeting tomorrow between him and the First Minister on these matters. Unfortunately, it cannot take place tomorrow but we are very keen that it should take place—I do not think the First Minister is keen that it should take place while the Secretary of State has got chicken pox—as soon as possible. It is a welcome sign that that engagement is happening.

I will reflect on the points made by my noble friend and others about the role of the Electoral Commission. However, the UK Government have made it very clear that we believe that the Electoral Commission is a proper body to have oversight of the referendum, not least given its track record in monitoring referendums since its inception. We are clear that that is our preference.

A number of noble Lords raised whether the question proposed by the Scottish Government is fair. We will certainly wish to consider the consultation document carefully but we believe, as set out in our consultation paper, that the Electoral Commission should have a statutory role to review and to comment on the question. As others have pointed out in the press today, it is not immediately clear from the Scottish Government’s document that they propose that the Electoral Commission will have that role. I understand that the First Minister has indicated that this may have been an oversight of the document but we will obviously pay close attention to that. Clearly, it would be part of the substance of discussions.

[Lord McConnell of Glenscorrodale]

The Minister advised that at some stage, perhaps not today but in the future, that process could involve looking at a variety of ways of posing the choice. Over the past few decades, it has not necessarily been the case in the United Kingdom that all referenda have included questions that had a yes or no answer. There have been referenda which posed a choice. I should like the Electoral Commission to be able to look at a variety of possibilities and not just those that have been chosen in more recent times.

[Lord Wallace of Tankerness]

I recall the kind of situation that the noble Lord, Lord McConnell, suggests. That emphasises that the Electoral Commission does have an important role to play. I cannot answer his specific question today, but it underlines more generally the important role of the commission. Further, as I have indicated, this will be a matter for discussions with the Scottish Government.

I have made the point that these discussions are taking place, but my noble friend also raised the question of what we should do with the Bill pending a legislative consent Motion in the Scottish Parliament. As the noble Lord, Lord Browne of Ladyton, reminded us, the Scottish Parliament expressed its general support for the Bill, subject to some detailed concerns, in a vote in March 2011. Of course, the Scottish political landscape has changed since then, but as he rightly reminded us, those voting for the resolution included many Members of the current majority party in the Scottish Parliament, including the First Minister himself. He also indicated that there has been a response from the UK Government to the points made in the legislative consent Motion, specifically that provision has now been made in the Bill to allow bonds to be introduced in the future without the need for further legislation. There is a provision in the Bill to allow for reciprocal consultation between Governments in relation to electoral matters; provision to provide Scottish Ministers a role in the appointments to MG Alba; and provision to give Scottish Ministers responsibility for the disqualification rules for the Scottish Parliament. Obviously we will come to discuss Clause 17 at the next sitting of the Committee, if we get that far, which in a number of important respects is a response to the review undertaken by the noble and learned Lord, Lord McCluskey, at the request of the Scottish Government. So there have in fact been numerous comprehensive responses to the previous LCM.

I can assure the House that we are considering carefully the latest Scotland Bill Committee report. Its timing is clearly not a matter for the UK Government, but I can confirm that we are in continuing constructive discussions on the Bill with the Scottish Government. It might be premature to table a legislative consent Motion when these discussions are ongoing. I do not particularly want to say anything that might prejudice those discussions, but I can confirm that they have been happening on a constructive basis, and I hope that they will provide us with a way forward.

My noble friend Lord Maclennan asked about our response to Miss Fabiani, who is the convenor of the committee. I can confirm that on 20 January the Secretary of State wrote to her and again made it clear that constructive discussions are under way. He also indicated that in addition to reviewing the report of the Scottish Parliament, the Government would have to have regard to comments and contributions made in your Lordships’ House on the Bill. I think I am right in saying that the letter contained a paragraph which reminded the convenor of the Scotland Bill Committee that the Government do not have a majority in this House, and therefore we could not necessarily guarantee that any particular amendments would be carried. However, I hope that I can reassure noble Lords that there is constructive engagement on this.

It is also fair to say, as the noble Lord, Lord Browne, pointed out, that there is no clear timetable about when in the progress of a Bill a legislative consent Motion is passed. As I indicated, one was passed in the Scottish Parliament last March, which certainly meant that it was done before Report stage in the House of Commons.

[Lord Forsyth of Drumlean]

I have considerable respect for my noble and learned friend, and perhaps I may ask him to answer a straightforward question. In the absence of a legislative consent Motion, will the Government proceed with the Bill to Royal Assent, and implement it; or is it their position that without a legislative consent Motion, the Bill will not go ahead? It is important that Members of the Scottish Parliament know the score. As the noble Lord, Lord Browne, said, if one were a Member of the Scottish Parliament who, like the First Minister, was publicly committed to the Bill, one would not want to do anything that might prevent it getting on to the statute book. The fact that the committee report has not even been scheduled for a debate in the Scottish Parliament, when we want to take account of what it has to say, is an affront to democracy—which might be a strange thing to say in this unelected House.

13:45

[Lord Wallace of Tankerness]

My Lords, I sought to indicate that if discussions are going on, it might be premature to go ahead with a legislative consent Motion. That could prejudice the discussions when in fact there is an opportunity for agreement. I do not want to say anything that might be seen as a threat and jeopardise the position, as that would not be helpful to the process. We want to achieve a process in which a further legislative consent Motion can be passed by the Scottish Parliament, and I do not wish to say anything in the debate to prejudice that. I say that particularly as an engagement has taken place. However, as the noble Lord, Lord Browne, made clear, many powers that will be available in this Bill are ones that the Scottish Government have been calling for. The recently published document on infrastructure planning is actually predicated on carrying forward to fruition the borrowing powers which the Bill makes available.

[Lord Forsyth of Drumlean]

I am sorry to press my noble and learned friend. I am asking not about the negotiations but about the constitutional position. So far as the Government are concerned, is the constitutional position such that they will not proceed to put this legislation on to the statute book in the absence of a legislative consent Motion—or might they? I do not wish to prejudice the negotiations but I do want to have clarity on the status of legislative consent Motions. The noble Lord, Lord Sewel, gave us his view. I want to know the Government’s view on the status of legislative consent Motions. The Motions apply not only to the negotiations on this Bill but to Section 30 orders.

[Lord Wallace of Tankerness]

My Lords, the point on Section 30 orders is clear—it is in statute. Statute law requires the consent of the Scottish Parliament and of each House in this Parliament. A convention is just that, a convention; it is not enshrined in statute. However, as the noble Lord, Lord McConnell of Glenscorrodale, said, if a convention has been operating for a period, you have to be careful about how you deal with it. I am not going to say anything today that might prejudice the way in which that convention is dealt with. Equally, although there is a legislative consent Motion outstanding, I very much hope that there will be a further one to which the House can have regard before we reach Report.

I shall come to the question asked by the right reverend Prelate in a moment. However, we may well have completed the Committee stage before we have the report of the Scottish Parliament committee. At one stage it seemed possible that we might receive it but, for reasons of timing, that has not happened. There is certainly nothing sinister about it, and I do not think that the Scottish Parliament necessarily expects that we would hold back our deliberations in Committee until the legislative consent Motion had been tabled and debated. I know that the noble Lord, Lord Sewel, is desperate to intervene.

[Lord Sewel]

I thank the noble and learned Lord for giving way. So far as I can remember, and I may well be wrong, a legislative consent order can be passed at any time up to immediately before the last amendable stage of a Bill in this Parliament.

[Lord Wallace of Tankerness]

That accords with my recollection. Given the limitations on amendments tabled at Third Reading in your Lordships’ House, I am not going to get into a discussion on whether it would be before Third Reading or before Report. However, that—as enunciated by the noble Lord, Lord Sewel—accords with my understanding of the convention.

It is also important to note what has been noted by a number of contributors to this debate—that not only has the Bill been passed by the elected House, its content was included in the 2010 general election manifestos of the Labour Party, the Liberal Democrats and, substantially, the Conservative Party. Each party which had been party to the Calman commission process made a commitment in its respective manifesto to take it forward. It is quite a rare event in politics to be criticised for implementing your manifesto commitments. It rather stands things on their head if for some reason you are criticised for actually doing what you said you would do.

The noble Lord, Lord Browne, asked me as a member of the Calman commission—I suppose that my declaration of interest will apply throughout these proceedings—what response the commission received. I think that it is fair to say—there are other members of the commission present in your Lordships' House today—that we were not inundated with suggestions about where the boundary between devolved and reserved matters should fall. Many of the representations that we did receive—there were not a particularly large number—are reflected in the Bill before us. However, it was strongly represented to the Calman commission that the 1998 Act would have to be revisited because of the lack of financial accountability of the Scottish Parliament. That was understood when the Act was passed. We have had since 1999 a Parliament that has had complete discretion over how it spends the money it receives but precious little responsibility for raising it. I think that my noble friend Lord Steel said in a Donald Dewar lecture that a Parliament that was 100 per cent dependent on its revenue from another Parliament would have to address that issue. That is what we seek to do in the Bill. As the Calman commission proposals have been around since 2009—they elicited a White Paper from both the previous and the present Administrations—I suspect that many of them, to some extent, have already been banked. However, as the noble Lord, Lord Browne, indicated, these are very substantial proposals that should not be minimised. They will give to the Scottish Parliament a degree of financial accountability that does not exist at the moment. That is one of the reasons why we want to make progress.

The right reverend Prelate asked about the overlap of the Scotland Bill and a referendum campaign. I think it is fair to say that it has been known since last year’s election, and before the Commons debated the Bill on Report, that we would have a referendum campaign at some point. That is something that we have to take account of but it has not suddenly come up. It was clear in the Second Reading debate that we would go into a referendum campaign at some stage. However, the Bill’s powers are substantial and we should continue to make progress with it.

The noble Lord, Lord Empey, raised some important issues about the referendum campaign that will have to be debated, as the substance of that independence debate, once the process is resolved. I think that many of us look forward to engaging in that debate and making a positive case for Scotland being part of the United Kingdom. The noble Lord, Lord McConnell of Glenscorrodale, warned that the First Minister was perhaps taking the view that the way to get rid of bad tenants is for them to annoy the neighbours. It is a good analogy up to a point, but the point is that we are not tenants. We helped to build the house and we co-own it. That is why the union is so valuable to us.

My noble friend’s Amendment 85 will allow us to return to these matters later in Committee. As I indicated earlier, although the Scottish Parliament has considered the Bill, your Lordships' House should be able to consider it in detail too. I am conscious that there are a number of your Lordships present who were here during the debates in 1998. I think that those debates well served the Scotland Bill, which became the Scotland Act 1998. The kind of deliberation that your Lordships can bring to a constitutional measure such as this is an important part of the process. I encourage noble Lords to continue deliberations on the Bill, and I hope that we can now proceed to do so in Committee.

[Lord Forsyth of Drumlean]

My Lords, we have had a really good debate. My view that the debate would take half an hour has not worked out entirely right—we have had two hours and 17 minutes of debate. It is fantastic that we have had such a turnout given that the debate was scheduled for the Thursday after Burns Night when many of us would have been in Scotland and perhaps not as bright and breezy as people obviously were this morning.

I do not propose to respond to all the points but I thank everyone who contributed to the debate. I am not sure whether I should thank the noble Lord, Lord Foulkes, for praising me for acting against my party interest in taking the view that I do on the union. Being serious, I think that we all recognise that the future of the United Kingdom is an issue that is above party, as this debate has demonstrated.

My noble friend Lord Sanderson talked about competition between consultation papers. Although I believe in competition, in this case it may have led to a certain disorder in the marketplace. It is really disappointing that the idea of carry-over proposed by the noble Baroness, Lady Liddell, cannot work, because that would have been a solution. I have to say to my noble friend Lord Sanderson that the last thing we want is another Bill to deal with a referendum in the next Session of Parliament, when we will by all accounts have to deal with the future of this House, which I think will take on considerable time and turbulence.

The noble Lord, Lord Wigley, is right to be concerned about language, but I just ask him to spend half an hour on the internet looking at what the cybernats write about many of those who have spoken in this debate. If he could convey those views about language to them, it would be very much appreciated.

The noble Lord, Lord Kerr, argued that it was important that there should be nationalist Members in this Chamber in order to put their point of view, but he seemed to have a bit of a wobble when I suggested that UKIP might be treated in the same manner. The right reverend Prelate the Bishop of Chester made the key point that it is important that this debate is seen to be carried out respectfully. That means that the consent of the Scottish Parliament is fairly important, a point made by the noble Lord, Lord McConnell. He criticised the Prime Minister for intervening perhaps a little late in the debate. That might be a fair criticism, but I do not think that any of us could have expected the First Minister to have made quite so many changes so quickly in response, so perhaps we have caught up with a timetable that would otherwise have applied.

The noble Lord, Lord Hughes, who I believe celebrated a major birthday recently, and who has a long experience in these matters, reminded us of the—I shall be careful with my language—flexible view on devolution which the First Minister has taken. He has been against it; then, in 1998, he campaigned with the Labour Party for it; then he went back to Scotland in 2004 and denounced devolution as a disaster; and now he is the high priest of devo-max, because nobody else seems to be talking about it.

I have great sympathy with the noble Lord, Lord Sewel. He shares with the noble Lord, Lord Barnett, the fate of having something named after him which he is going to spend the rest of his life denying any responsibility for.

It was very important to have the contribution of my noble friend Lord Steel, who was the first Presiding Officer of the Scottish Parliament. Of course, in the original Scotland Act, it was thought that the electoral system had been designed so that no one party would be able to get a majority, and that it was unnecessary to have a House such as your Lordships' House to be a check and balance against the Executive, because the committee system would ensure a balance. Well, it has now turned into almost a one-party Parliament. The nationalists have a majority in the committees and there is no check and balance. Therefore the role of this House is even more important. The fact that the current Presiding Officer was taken from the same party underlines the lack of sensitivity to the point so well made by my noble friend.

In his address, the noble Lord, Lord Empey, reminded us of how important it is to get these matters right, and that the balkanisation of Britain is a matter that concerns every part of the United Kingdom.

My noble friend Lord Maclennan reminded us that absence of consent is not acceptance. I agree. The noble Earl, Lord Mar and Kellie, referred to the absence of the SNP as Banquo’s ghost. I plead with him to find another analogy because, of course, Banquo’s successors inherited the crown.

Finally, in an excellent speech—I hope this is not damaging for him—the noble Lord, Lord Browne, set out the answers. He reminded me of what the noble and learned Lord, Lord Irvine of Lairg, said about the West Lothian question in response to my pressing him on where we were on the legislative consent Motion—a view which was echoed by my noble and learned friend in his excellent reply—which was that, with some questions, the answer to the question is not to ask the question. So on the basis that we do not ask the question now and make progress in the interests of what I accept is the democratically expressed views of the Scottish people, I beg leave to withdraw the amendment.

Amendment to the Motion withdrawn.

Motion agreed.

14:00

Clause 1 : Administration of elections

Debate on whether Clause 1 should stand part of the Bill.

[Baroness Anelay of St Johns]

My Lords, it may be for the convenience of the House if I explain an arrangement that has been agreed in the usual channels to facilitate a short break for those who have taken part in at least the preparations for the Scotland Bill Committee so far. We will start the debate on Clause 1 stand part and the noble Lord, Lord Browne of Ladyton, will make his speech. At the conclusion of that speech the House will resume. It will finish its Committee considerations for 45 minutes, during which time other business in the name of my noble friend Lord Dykes will be taken. At the end of that 45 minutes, whoever wishes to follow on from the stand part speech of the noble Lord, Lord Browne, will be in a position to do so.

[Lord Browne of Ladyton]

My Lords, for obvious reasons, I shall be brief. The purpose of this opposition to Clause 1 standing part of the Bill is to probe what appears to be a selective implementation by the Government of the Calman commission’s recommendations. I say “appears” because I am not entirely sure, and I shall explain why I use that word.

Clause 1 devolves to Scottish Ministers powers that currently reside with the Secretary of State for Scotland pertaining to the administration and conduct of Scottish Parliament elections. However, it appears that it does not devolve these powers in their entirety. The purpose of this debate is simply to probe why it is that the Government have sought to retain the reservation of some of these powers apparently contrary to the recommendations of Calman. I can assure noble Lords that I do not intend to press this issue to a vote. However, I hope to draw out from the Minister a more comprehensive account than I have been able to ascertain so far of the rationale behind the Government’s choice of powers for devolution in Clause 1. It may be simply that all the powers which are clearly about the administration and conduct of Scottish Parliament elections have been devolved and that those that are, in part or totally, about the electoral system have not. If that is the answer and it can be explained, I will be happy to accept it.

It is my understanding that Clause 1 devolves responsibility for the conduct and administration of Scottish Parliament elections and for the consequences of irregularities. However, it reserves powers, particularly, in relation to the registration of electors, the abandonment of a constituency poll or notice of it being countermanded, the procedure for filling regional MSP vacancies—an issue to which we will return in another amendment—and the application and modification of electoral law. I would be grateful if the Advocate General could confirm whether this is an exhaustive list. If it is not, what else is reserved?

The Calman commission made a clear recommendation in paragraph 5.1 of its report that the powers of the Secretary of State for Scotland relating to the administration of elections to the Scottish Parliament should be devolved. However, the commission did not discriminate between such powers as to their suitability for devolution. In contrast, it stated explicitly that it was unconvinced that there are strong constitutional or practical arguments against their devolution, particularly when considering that responsibility for local authority elections is already devolved to the Scottish Parliament. This view was widely supported across civic Scotland and by political parties.

By choosing to devolve powers over certain administrative functions but not others, the risk is that Clause 1 will continue the fragmentation of responsibility for Scottish elections, which is precisely what Gould, among others, identified as being the key factor in the chaos of the Scottish parliamentary and local government elections on 3 May 2007—chaos which, as we all know, resulted in the disenfranchisement of in excess of 100,000 Scottish voters. We must avoid that at all costs.

From the Scottish Parliament’s point of view, both its previous and present Scottish Bill Committees recommended that the list of powers that remain reserved in this area should be reduced. In particular, the committees highlighted powers over the procedure for filling regional seat vacancies and rules relating to disqualification as more properly residing with Scottish Ministers.

It is vital that the lessons from the 2007 elections are heeded and that the responsibility and rules surrounding Scottish elections are rationalised. The devolution of powers over the administration of Scottish parliamentary elections is a natural reflection of the Scottish Parliament’s maturity as a democratic body and of the principle that matters should be determined at the level closest to those—the Scottish people—who are affected by them unless good reason can be seen otherwise. I have initiated this debate simply to ask the Minister to set out good reasons for each of the powers for the administration of elections that remain reserved so that the House may judge whether they are compelling reasons and whether we are being faithful to Calman.

House resumed. Committee to begin again not before 2.55 pm.

Taxation: Avoidance

Thursday 26th January 2012 Lords Chamber

Question for Short Debate

14:07

Tabled By

[Lord Dykes]

To ask Her Majesty’s Government what action they are taking regarding tax avoidance by business figures in the United Kingdom.

[Lord Dykes]

My Lords, I am grateful to the usual channels for providing time for this debate and to the Treasury Minister for coming to the Front Bench at this time. I apologise to him that it is lunchtime—although a slightly late lunchtime because of the previous debate—and I welcome his visit to deal with this important and thorny matter. He is a very busy Treasury Minister and I wish that I could have saved him having to do without lunch on this occasion. I hope he can catch up with that later.

I declare an historic interest as a former member of the London Stock Exchange for many years and as a partner in a leading institutional stock broking firm, as well as a shareholder in other former City interests.

The title of the debate deliberately uses the word “avoidance” because of the grey area of avoidance leading into illegal evasion as well. The title focuses deliberately on the behaviour of business representatives and groups because that really covers almost the whole field. Most wealthy individuals, as well as companies, who seek to lower their tax liabilities tend to arrange schemes through accountants and other professional advisers. Equally, however, it would be reprehensible if non-business sector individuals were either avoiding tax unfairly or evading tax illegally through their own decisions without advisers. I have sought to raise this issue for some time because of the widespread public concern that one hears here, there and everywhere that improper tax avoidance is widespread in the UK. These matters are very sensitive right now because of the bank bonus season as well—we of course assume that our senior bank director colleagues declare and pay tax properly. Bank bonuses and whether they are justified are not within this subject. It is because rumours are so often an inadequate substitute for facts that HMG need to answer questions from Members of Parliament to allay concerns.

Of course, the concept of unfairness in the tax system is hard to grasp. The public as a whole has a strong and maybe unfair impression that ordinary taxpayers, mostly but not all subject to the deduction at source system, do not have the sophisticated advantages of professional and corporate taxpayers to soften what some people regard as the hammer blows of brutal tax demands. Add to this the widespread feeling that, unfortunately, our colleagues in the main part of the coalition seem psychologically far more interested in giving lower-income individuals rather a rough time by cutting into their social benefit payments than pursuing their—dare I say?—friends in the world of business over tax dodging, then we have an explosive political cocktail about the relentless growth of the unequal society. That is mercifully nowhere near the lamentable position in the USA, with its by-now medieval inequalities, obliging even Warren Buffett to complain yet again recently. Personally, I have a cousin in California who is a member of the Libertarian Party that regards any tax apart from defence spending and foreign affairs as positively poisonous and communistic.

In the excellent debate on financial crime legislation launched by my noble friend Lady Williams on 17 March last year, I raised what I called the “sad” case of Sir Philip Green—that is at col. 385 of Hansard—who was able to channel his £1 billion-plus dividend from his brilliant and skilful reorganisation of BHS through his wife as a resident of that little territory, Monaco, and thereby avoided paying, I think, £200 million or more in income tax on the dividend. Far from condemning outright this pathetic example of sheer greed, the new coalition Government later hired him as a totally ineffective adviser on efficiency in government. We do not find it hard to imagine how ordinary struggling families feel when they see such goings on in Britain. Could HMG ask HMRC to contact Sir Philip to see whether he could persuade his wife to reconsider and possibly make a voluntary donation to the Revenue as a gesture of social solidarity in these tough times, especially since apparently several hundred Topshop stores are now to close because of the fierce recession? No wonder this sad little saga spawned the UK Uncut movement.

I intend to stay within the time limit of my speech but unfortunately the monitor Clock is incorrect and I do not know when I started. I hope it will be adjusted as quickly as possible.

Of course, I expect the Minister to say on these matters, as ever, “We do not comment on individual cases”. I understand that, but the lack of accountability then speaks volumes and the public can draw their own conclusions. At least he might today try to reassure us that the colossal tax dodging that apparently occurs routinely in Britain nowadays is being dealt with. Despite some enlargement of the personnel at HMRC in recent times, it is by all accounts still struggling manfully—and womanfully, I assume—to cope with the huge backlog of dodgy schemes.

Why is it, as I hinted in that same debate in March last year, that if, for instance, you go to dinner parties in large houses in Wiltshire or Oxfordshire—I do not know about Chadlington but maybe elsewhere, too—around the table are people who appear to be in the UK a great deal but who scoff when someone says, “I pay full taxes”? Perhaps they are just boasting and making it up, but all sorts of rumours swirl around.

The absence of definitional precision helps that process of confusion and the shrugging of shoulders. Hence statistics on tax avoidance are fiercely contested and the interpretative basis is elusive. In a court of law for example, the judges presumably base their findings on what Parliament intended in any laws and regulations. That examination alone can spawn huge fees for yet more lawyers and accountants. For instance, I am assured by friends in so-called professional circles that a large number of senior broadcasters in both the public sector—that is, the BBC—and private TV and radio services routinely have corporate plans of their own that offer much bigger offsets than personal taxpayers can claim paying tax as individuals, even though these broadcasters are of course individuals. Can the Minister help here and give us any information that the Government might have to hand?

HMG have regularly referred to what they consider to be more than a £40 billion tax gap—“gap” is the word I use here. On the assumption that it would be somewhat higher because HMRC struggles to cover all cases, if everyone who should pay paid up—like ordinary mortals—that would cover a good chunk of the deficit. However, we are struggling philosophically because HMG keep banging on about corporation tax being too high. Is a 50 per cent income tax rate so excessive when it starts at such a high level? We must be careful in this country to avoid the worst horrors of the Tea Party lunacy in America that progressive taxes are worse even than communism or a proper national health service.

What is the latest development on redress policies in the many other secretive tax havens dotted around the world, partly as a result of our historical British Empire? Are the UK and other authorities locally in those areas getting to grips with the most severe abuses—and abuses in general?

Our newspapers, reflecting the reality that most—with some honourable exceptions—are owned and run by non-UK taxpaying moguls who live all over the place but not the UK, probably do not want to run too many stories about UK tax dodgers. They prefer benefit fraud, as in the Daily Mail. That is a much more attractive story for them to run. Naturally, the practical difficulties for the authorities here in dealing with these problems are huge. I sympathise entirely and once again express appreciation for what the Minister and his colleagues have been trying to do in the Treasury.

We know all too well from the world financial crisis of 2007-08 that business anywhere is truly international, global and incredibly complicated. It is hard to keep up with the worldwide legions of tax advisers—often themselves multimillionaires as well. Look how enormous the biggest UK-origin accountancy firms—the famous names—have become as worldwide entities, usually in very large towers. I remember the furore last spring when it was discovered that the Treasury had missed out on some £17 billion of tax due from companies disappearing, along with their directors, or banks and other groups not paying their taxes properly. More than half a million companies were dissolved in 2009-10, with most removed from the official register because they did not even bother to file accounts. Indeed, the Oxford University Centre for Business Taxation estimated last year that nearly a million companies failed to pay tax at all, even though presumably only a small proportion of those were not trading. Richard Murphy, a well-known director of the consultants Tax Research LLP, calculated that the total tax gap in Britain two years ago was over £120 billion. No one knows whether that is correct, but it is obviously likely to be significantly higher than the £40 billion mentioned by the Government on several occasions recently.

I hope that the Minister can reassure the House today that these estimates are ahead of the true figures. My anxiety is that, in reality, not even the Treasury, hardly known for its huge competence in guiding the ever-faltering British economy in recent decades, actually knows the truth. In replying to the debate, I hope that the Minister will also refer to the tax treatment of the overseas subsidiaries profits in UK-registered corporations which seem to be of special artificial help to the banks in recent times.

Finally, he may generously wish to guide us with his analysis of the cash-only economy—the black economy—which obviously deprives the Inland Revenue part of HMRC of yet more tax revenues, and how the authorities have managed to deal with VAT fraud and evasion. I am sure that the Government do not wish to give the impression that they are much keener on cuts in services than getting in more tax from what is apparently regarded in the City—some people repeat this again and again—as an army of tax dodgers in Britain.

[Baroness Stowell of Beeston]

I am sorry to interrupt my noble friend and that the Clock was not working properly. I thought he would find it helpful to know that he has exceeded his 10 minutes.

[Lord Dykes]

Because of the Clock, I conclude by referring to Danny Alexander, Chief Secretary to the Treasury, who said on Tuesday that tax dodgers have nowhere to hide and that we will get them. I would be grateful if the Minister commented on that comment from the other place.

14:19

[Lord Phillips of Sudbury]

My Lords, it is perhaps a measure of how the subject of this debate is viewed that only around 10 Members of the House are present, apart from the speakers. I fear that the whole issue of tax avoidance or evasion—I do not see the difference—is of the most fundamental importance to this country at this time. Some of the greatest traditions of our country revolve around integrity and equality before the law. In the legal profession that I started in, in 1957, there was no tax evasion or avoidance industry. It is a creature of the last 30 or 40 years. Indeed, the lengths of tax avoidance would have been to tell your farmer client that he had better give away some land at least seven years before he died, so that he did not have to pay inheritance tax. In the 1970s, we had the growth of what one would call highly artificial tax schemes. Some may remember the name Rossminster. That was the start of what has become an international industry.

There are tens of thousands of lawyers and accountants who do nothing but avoid tax for their highly paying clients. While the vast majority of British accountants and lawyers try to play fair and will not stretch the rules beyond reasonability, they are under pressure because an increasing number of professionals will stretch the law beyond reasonability and will take artifice to byzantine and ludicrous lengths. We had a little hint of that when Mr Diamond gave evidence to the Select Committee and purported not to know how many subsidiary companies Barclays used in avoiding tax in this country. I believe that it paid only 1 per cent of its gains in tax in the UK. Someone was able to inform the committee afterwards that there were literally hundreds and hundreds of subsidiaries spread across the various tax havens, which enabled that state of affairs to come about.

What sort of society is it in which the CEO of Barclays this year, last year or the year before can earn £22 million with his bonus and earn more in a day than a state-registered nurse on an acute ward in one of our hospitals earns in a year? That is so contrary to any concept of a fair or decent society that I put it to the House that the issues that we are talking about run to the very roots of our society, its culture and nature.

When I started again in the law, solicitors and accountants were what were called pillars of the community. For a complex of reasons, I am afraid that that is no longer the case. There is a quite staggering disconnect between those who work in the City of London and civic society at large. Very few indeed contribute anything to civic society, except their taxes. I believe with a passion that we need to have a renaissance of citizenship in this country, a restoration of a sense of community, national and local, because as a lawyer I have to tell the House that you cannot legislate for virtue. We have already gone a long way down the road of regulation in trying to stop loopholes, as they are called. The statute book has got more and more complicated and, with a great irony, has removed even further from the minds of professionals in this world the sense that they should play fair and have some sort of civic justice in the work they do.

The limited company, too, has been a great engine of demoralisation, to use that word in its literal sense. How few board members these days feel able to say, “I’m sorry, I think that’s wrong—I don’t think this company should be doing that.”? Indeed, a friend of mine whom noble Lords would know, who is a chairman of public companies, made this point around the board table not long ago in relation to some new tax scheme thought up by the company’s advisers. The board concurred, but the next day he had a visit from the company secretary, who said, “You know, you acted illegally yesterday in rejecting out of hand the scheme that was put up”. That is but one small instance of a demoralised corporate world.

Where amorality rules, it is not able to withstand for long the creep towards immorality when the gains are big enough. I shall give an example, although it is probably unfair to KPMG, because all its competitors have their own dark secrets. In 2006-07, KPMG was exposed in the US as having been party to fraudulent tax schemes that enabled its clients fraudulently to avoid paying $2.5 billion of US tax. In a plea bargain, the partners managed to avoid being individually criminally prosecuted, as in my view they should have been, by agreeing to pay penalties of $450 million. This is a great firm reduced to ignominy because there is no longer any culture of integrity sufficiently strong to withstand the huge pressures and temptations of the tax avoidance industry. And of course the voice that says, “If we don’t do it, our competitors will”, is a powerful one.

What can we do about it? I am convinced that we have to do something about it, because I am convinced that we are destroying the very seedbed of our proud civic traditions in this country. To whom do ordinary young people look as good examples these days? Unless we do something about this, we will find more of the statistics revealed yesterday by the University of Essex, which did some long-term research on attitudes of the public to honesty. The university has now established a centre for the study of integrity on a longitudinal, cross-departmental basis. That research revealed that the 20 to 25 age group has a radically different view of honesty from the 60 to 65-year age group. The graph is a straight stairway. The evidence is complicated and difficult to interpret, but it is that the standards of probity and attitudes to honesty in our great country are in decline. I am sure that everyone here today still feels proud, because we still have standards of probity in public life that are the envy of most countries. However, when standards are in head-long decline, it behoves us in this place most of all to recognise it and do something about it.

Of course, the great stain on our escutcheon was the extensive expenses fraud in both Houses. We suffer from that—and the reckoning of the evidence from the University of Essex is that 91 per cent of the public feels that the politicians in this country are fairly corrupt. They do not trust us—and trust and fairness are the pillars of a good society. Without either of them you cannot have a good society. I am sure that all of us feel passionate about trying to bring about a good society as far as we can.

I end by restating my conviction that there is a strict limit to what we in Parliament can do. Far too much of the time, the citizens of this land look to us to put things right, and far too much of the time we pretend that we can. In this broad matter of honesty in taxation, it is down to individual people and businessmen to assert their moral autonomy for the public good.

14:29

[Lord Eatwell]

My Lords, the issues raised by the noble Lords, Lord Dykes and Lord Phillips, have recently been the subject of two important reports. First, the report of the Public Accounts Committee into tax disputes, published on 20 December last year, revealed what can only be described as a scandal. It demonstrated a quite extraordinarily cosy relationship between HMRC and major companies, particularly international companies, in the determination of tax liabilities. It also demonstrated a failure to follow proper procedures in the resolution of tax disputes, and a consistent bias towards the favourable treatment of large companies compared with small companies and the ordinary taxpayer.

Everyone in this country who is settling their tax assessment this month, knowing that they will incur a fine and interest charges if they do not pay up on 31 January on the dot, will be astonished to discover that large companies may be given 10 years to settle their tax obligations. They will also be furious that up to £20 million in interest has been lost because of HMRC errors, while, for reasons that are still not clear, the department decided it would not reopen negotiations with the relevant company—a decision that it appears was taken without legal advice. The PAC report says that,

“the Department did not even take the most basic step of making its own note of meetings with the company concerned, relying instead on the record kept by the company”.

To compound this record of complacency and connivance, the department failed to be open with the PAC investigation and was,

“less than clear and consistent in the evidence”,

given to the PAC and to the Treasury Select Committee in another place.

It is important to remember that HMRC is, quite rightly, a non-ministerial department, thereby removing Ministers from any suspicion of involvement in individual taxpayers’ affairs, but this scandal goes beyond matters that can be remedied at arm's length by more effective management and the appointment of extra Revenue commissioners. It strikes at the very heart of the fair and impartial management of the tax system. It reveals systemic failures that have resulted in unfair and partial treatment verging on favouritism, and it demands the exercise of ministerial responsibility, for it undermines public confidence in the probity of government and the integrity of the Revenue.

If the failings exposed by the PAC were an isolated set of events—an aberration—the measures taken so far by HMRC to put its house in order just might be regarded as sufficient. Regrettably, this is not the case. As we have heard from the noble Lords opposite, it is a widely held view that tax avoidance is rife in this country, and that wealthy individuals and large companies that can afford sophisticated tax advisers can avoid attacks by abusive means.

The term “abusive means” has been defined by Mr Graham Aaronson QC as,

“contrived and artificial schemes which are widely regarded as an intolerable attack on the integrity of the UK’s tax regime”.

This quotation is taken from a report entitled A Study to Consider whether a General Anti-Avoidance Rule should be Introduced into the UK Tax System, published in November last year, which was authored by Mr Aaronson and commissioned, to give them due credit, by Her Majesty’s Government. I applaud the initiative. Mr Aaronson concludes that a general anti-avoidance rule should be introduced, and proposes practical means by which this might be done. In his report, he argues that certainty in the tax system makes an important positive contribution to the economic and business environment. The presence of tax loopholes, and their exploitation by the unscrupulous, undermines that certainty. Moreover, competitive pressure forces firms to adopt more and more elaborate tax avoidance measures.

Competitive advantage can be gained by companies that go down the tax-abusive route, and hence firms that attempt to take a high moral stand, as the noble Lord, Lord Phillips, points out, are placed at a competitive disadvantage and may be eliminated from the marketplace. All must join the race to the bottom. Tax avoidance by businesses therefore undermines certainty, forces firms to adopt the tax-avoidance policies of the lowest common denominator, undermines any perception of fairness in the tax system and imposes a dead-weight loss on the economy by spawning a socially useless tax avoidance industry. It is damaging not just to the Revenue, but to the performance of the economy as a whole.

The source of this pernicious burden on our economy, the foundation of the tax avoidance industry, is the complexity of the tax system. It is complexity that by its very nature creates the exceptions and loopholes that can be legally exploited by the enthusiastic, well resourced tax avoider. If we are to tackle the disease rather than the symptoms, complexity should be the target. An important reason for the complexity of the tax system is that Governments attempt to manipulate behaviour via tax allowances and reliefs to incentivise people to behave in a particular way—to invest in new businesses or to undertake more R&D, or to recycle waste, or whatever. What is remarkable is that years of academic study have demonstrated that very few of these incentives actually work. Tax allowances to stimulate investment, for example, do not tend to result in more investment. Instead, they are a subsidy to investment that would have taken place anyway.

Another important source of complexity is a government belief that it is appropriate to differentiate between revenues from different sources, so that benefit deemed to derive from capital gains, or, more scandalously, from carried interest, is taxed differently from benefit derived from income. The treatment of interest on debt as a cost, and hence being tax deductible, is a major factor distorting the funding of business in this country. All this is a rich source of tax avoidance. Then of course there are the tax benefits handed out to specific social groups with the most powerful lobbying voices—the non-doms come immediately to mind.

Whether it derives from good intentions, perceived policy objectives, or mere cowardice and/or patronage in the face of the powerful and well funded, complexity is the fundamental source of avoidance. Without tackling complexity, the avoidance industry will never be significantly reduced. I therefore applaud the establishment by the Government of the Office of Tax Simplification and look forward, in hope rather than expectation, to its efforts bearing fruit. In the mean time, while we wait for the simplified promised land, Mr Aaronson concludes that all current approaches to curb tax avoidance,

“are not capable of dealing with some of the most egregious tax avoidance schemes”.

He might have added, if he had had the PAC report before him, that all attempts to limit tax avoidance are undermined if there exists the cosy relationship between the HMRC and big business identified in the PAC report.

With the PAC report and Mr Aaronson's report before him, the Minister must address a number of questions. First, when did Ministers first know of the matters identified in the PAC report? Were they fully informed, or have they made further investigations? What have their investigations, if any, revealed about further abuse and, if so, what sort of abuses? What action do the Government intend to take to correct the systemic deficiencies in the HMRC? Is it not time for a full investigation into the practices and substance of the taxation of large companies, in order to re-establish public confidence in the probity of government and of the Revenue? Secondly, do the Government accept the conclusions of Mr Aaronson's report? When do they intend to introduce a general anti-avoidance rule, with the institutional support outlined by Mr Aaronson? Thirdly, when can we expect a report from the Office of Tax Simplification that deals specifically with business taxation and tax avoidance?

Confidence in the tax system is, as noble Lords opposite have said, fundamental to our democracy. If confidence in the fairness and probity of the state is lost, effective revenue raising is undermined—colourful examples, perhaps from the Mediterranean, can be imagined. The issues identified in the Public Accounts Committee report and in Mr Aaronson’s report demand an urgent response. I hope we will hear from the Minister today the concrete steps that the Government intend to take to curb abusive behaviour towards the tax system. If practical steps are not forthcoming, the Government will have some explaining to do to this House and to the British people.

[Lord Phillips of Sudbury]

The noble Lord raised some extremely pertinent points about HMRC, but does he agree that the Government reducing the staffing at HMRC over the next few years by 12,000 is scarcely likely to increase the effectiveness of tax collection?

[Lord Eatwell]

I think I shall say yes.

14:40

[The Commercial Secretary to the Treasury (Lord Sassoon)]

My Lords, I am grateful to my noble friend Lord Dykes for giving us an opportunity to discuss the important issue of tax avoidance and to remind the House of what the Government are doing to clamp down on it. However, we should put the whole subject into perspective. It is an important topic. There have been few speakers, but a considerable degree of heat has been thrown at the topic that may occasionally have obscured the light.

We must remember what we need to achieve in this area, particularly in the current economic situation, when we are faced with reducing the largest peacetime deficit on record. It is of course more important than ever and fair that everyone, whether businesses or individuals, pays their fair share of tax, but we have to remember that we must keep this country competitive. We are competing in a global economy, so we have to have a tax regime that is competitive for businesses, is fair for individuals and incentivises individuals to get off benefits and into work. Yes, the tax-avoidance question is critical, but we have to remember the wider context in which it operates.

A fair tax system means closing the tax gap and ensuring, as I have said, that businesses and individuals pay in full what they owe. My noble friend Lord Dykes asked questions about the size of the tax gap and whether we really understand its make-up. The figures for 2009-10 are that the tax gap was estimated at 7.9 per cent of liabilities, £35 billion in cash terms, which means that HMRC collects over 90 per cent of all the tax that is theoretically due. We have to do better. HMRC has to do better and it is working on that—I shall come on to that shortly—but, if someone heard this debate in isolation, they might think that the performance of HMRC was much worse. It collects over 90 per cent of all the tax that is theoretically due, or £468.9 billion in revenue in 2010-11. We should also remind ourselves that the latest figures show an overall decrease in the overall net tax gap of £7 billion from 2008-09 to 2009-10.

We should therefore be cautious about the methodology, but the 8 per cent tax gap in the UK compares well with other economies. For example, the USA’s tax gap is 14 per cent and, to take a country in Europe that is widely regarded as a model of fiscal rectitude, in Sweden the tax gap is 10 per cent.

The Government’s approach to tackling avoidance builds on HMRC’s anti-avoidance strategy. There are three core elements to that approach: prevention, detection and counteraction, with a clear focus on preventing avoidance before it can occur. I say “avoidance”; I do not of course share my noble friend Lord Phillips of Sudbury’s contention. I know that it is nothing new that he feels strongly that avoidance and evasion are the same thing.

Over the past 20 months we have demonstrated real progress. In answer to the challenge from the noble Lord, Lord Eatwell, about the concrete actions that we are taking, in the most recent Finance Act we closed down a range of avoidance schemes to bring in yields of around £1 billion a year over the course of this Parliament. Only this month, we acted quickly to stop a particularly significant avoidance scheme aimed at artificially exploiting an income tax relief. That scheme posed a significant risk to the Exchequer, and our quick action ensured that this risk did not materialise. That is the sort of concrete action that we will take.

In answer to the questions about whether HMRC has the capacity to deal with the threat of avoidance, the Government have underlined our commitment to tackling avoidance with the reinvestment in HMRC, which I am sure noble Lords are aware of, of over £900 million, which should bring in around £7 billion each year by 2014-15 in additional tax—again, concrete additional targeted action.

[Lord Phillips of Sudbury]

Can my noble friend then reassure the House on the figure about which I asked earlier and say that the reduction in staffing of 12,000 will not affect the front-line effort to reduce tax avoidance/evasion?

[Lord Sassoon]

My Lords, as I am sure my noble friend would recognise, all government departments are having to tighten their belts; otherwise, the deficit is not going to be tackled. I hope to reassure him by explaining where HMRC is focusing its efforts. The recruitment of over 1,200 staff in new posts to tackle non-compliance is significantly upping HMRC’s efforts in this area and will bring in significant additional revenue in each tax year, so the answer to his question is yes.

The customer relationship model that HMRC uses has considerably improved its ability to identify risk and to handle these issues. The report by the National Audit Office on HMRC’s 2010-11 accounts, which underlay one of the reports referred to by the noble Lord, Lord Eatwell, noted that HMRC’s high-risk corporate programme has brought in a yield of over £9 billion and that it contributed to reduced avoidance activity by major companies. The investment is there. On another point made by my noble friend Lord Dykes, we do not forget the cash economy in those efforts.

I am grateful to the noble Lord, Lord Eatwell, for drawing attention to the question of the general anti-avoidance rule, the GAAR. We are exploring that option to see whether such a rule could help to deter and counter tax avoidance in a fair way. Attention has been drawn to the work of Graham Aaronson and his colleagues and their report. We received the report in November last year. We will be considering it and are actively discussing its implications with businesses and tax professionals. We will respond to the report at the Budget and set out our plans if appropriate. We have said clearly that we would not introduce a GAAR without a further formal round of public consultation, so that is very much work in progress.

I am also grateful to the noble Lord, Lord Eatwell, for applauding the introduction and the work of the Office of Tax Simplification. The complexity of the tax system has been much remarked on, and I can echo many of the remarks made by noble Lords on that. The OTS has started its work and published recommendations on tax relief, avoidance legislation and IR35, as well as an interim report on small business tax. More is coming down the pipeline and this ongoing work will be an important part of what we all want to see: a simpler tax system that is easier for individuals to comply with. I may disagree with the emphasis of my noble friend Lord Phillips of Sudbury on some things, but I certainly agree that this is fundamentally about individuals doing what they are required by the law to do.

Another critical component of preventing avoidance is the way in which HMRC engages with the largest taxpayers proactively to identify and tackle avoidance. We do not have the time to go into the detail of this but, in response to some of the somewhat one-sided interpretation and selective quoting of the recent Public Accounts Committee report, I draw the attention of the House to HMRC’s detailed rebuttal on many factual points in the conclusion of that report. In brief, to be clear, this effort with large businesses is not in any way HMRC being soft on large business or on those with complex tax affairs. HMRC treats all taxpayers even-handedly and does not allow them to settle for anything less than the full amount due. It is through its engaged and intelligent approach to tax avoidance that the additional revenue to which I have already referred is coming in.

[Lord Eatwell]

The noble Lord referred to erroneous statements in the PAC report. Did they include the observation that senior HMRC officials had had lunch and dinner with the companies that then had a reduced tax burden?

[Lord Sassoon]

My Lords, the substance of the issues to which HMRC takes exception is to do with the size of unresolved tax bills and some of the details of cases in which errors were found that HMRC disputes. That is the substance, rather than the question of who met whom with what refreshments laid on. We should stick to the substance.

Other noble Lords have been scrupulous in keeping to their time. I am conscious that, with the interventions, I risk going over my time, so I will press on. I want to answer just one more question, raised by my noble friend Lord Dykes, about the tax treatment of overseas companies. I just confirm that we are reforming the controlled foreign company rules very much to protect against the artificial diversion of profits to low-tax jurisdictions, just as our general reforms are being made to make the UK a good place for global corporates to have their headquarters. Having said that this is a matter for individuals, I will not comment on the affairs of any individuals.

In conclusion, I have very briefly explained our strategy for tackling tax avoidance to ensure that everyone pays their fair share. This is an important topic and I am glad that we have had this debate. The Government are taking real, decisive, concrete action to close the tax gap. We are making good progress, but there is much more to do. We will ensure that every sector of society pulls in the same direction to tackle the deficit and the woeful economic legacy left to us by our predecessors.

14:54

Sitting suspended.

Scotland Bill

Thursday 26th January 2012 Lords Chamber

Committee (1st Day) (Continued)

14:55

Debate on whether Clause 1 should stand part of the Bill resumed.

[Lord Lang of Monkton]

My Lords, I made the mistake before we started today’s business of having a brief word with the Minister, from which I gained the impression that if I kept quiet the preliminary business would be dealt with very quickly and we would soon be into the body of the Bill. I increasingly regretted taking the decision to keep quiet. I have picked some of the notes that I made and scribbled all over them, with a view to reintroducing and regurgitating them now.

The first thing I would say to my noble and learned friend is that, historically, two and a half hours of letting off steam at the beginning of the Committee stage on any Scottish legislation has always proved a way of shortening the overall length of proceedings. Perhaps that may happen on this occasion. However, not having let off steam, I still have some to let off and I propose to do it in short, sharp bursts periodically through the progress of the Bill.

I absolutely support the admirable speech made by my noble friend Lord Forsyth and the brilliant way in which he laid out the concern that all sides of the House have. It was an extremely productive and successful debate. I thought that his tone was absolutely first-class as well. While the noble Lord, Lord Kerr, and others have criticised the tone, and are right to do so, we should always remember that tone is important but so are the facts. The facts will be pretty unpalatable but will have to be laid out before the electorate at various stages. We fail in our obligations if we do not take every opportunity to do it in this place, as well as in the referendum when it comes.

This clause was not one that concerned me when I initially looked at the Bill. I had concerns about other clauses but not about this one. However, in the light of what has happened in the past few days, and the way in which the Scottish National Party Administration has behaved, it is not a clause that one should let pass unchallenged without questioning precisely what it would achieve. That is an important approach to take, not just to this clause but to the whole Bill.

It is unsatisfactory that there is no Scottish National Party Peer in the House who could answer for that party. Let us hope that that will soon be put right. However, foghorn diplomacy is one of the First Minister’s strengths and we hear pretty clearly, even from here, what he has to say. The views of the Scottish Administration shriek out from the paper in which they published them and we are not in much doubt as to what they believe.

Turning specifically to the clause, I think the noble Lord, Lord Browne, raised the question of the possible extension of the franchise to 16 or 17 year-olds. If he did not, I hereby raise it now. I see that Clause 1 transfers certain executive functions in Section 12, relating to the conduct and administration of Scottish Parliament elections. That sounds harmless enough but I should like to hear a little more from the Minister by way of reassurance that it will not jeopardise our position any more than it is already jeopardised by the gymnastics of the First Minister.

Subsection (2) gives Scottish Ministers the powers to make provisions on the conduct of Scottish Parliament elections, which again sounds innocent but is not necessarily innocent in delivery. Subsection (3) amends Section 12(2), which clarifies the scope of the order-making powers of Scottish Ministers to make provisions under Section 12(1)(a). It also amends Section 12(2)(d) to allow Scottish Ministers to combine polls to the Scottish Parliament with other devolved elections where the polls are held on the same day. This seems to me not to involve any principle but to create a potentially anomalous situation. If the electorate were extended to include 16 and 17 year-olds and the poll for a Westminster Parliament took place on the same day as that for a Scottish Parliament, or, indeed, for Scottish councils, would it not seem anomalous if the 16 and 17 year-olds were able to vote for one but not for the other? The same would be true of European elections. To me it points not to any high principle but to self-interest on behalf of the Scottish Administration, who seem to believe that young voters would be more likely than older voters to turn out and vote for independence. Therefore, I hope that my right honourable noble and learned friend understands how my concern grows in looking at this relatively innocent clause.

15:00

In that context, I should like to revisit the consultation paper published by the SNP yesterday as it is full of self-serving homilies and phrases which, on the face of it, might not spread alarm but could generate considerable concern when the day comes. I was looking particularly at the question that the SNP proposes to ask in the referendum. The summary states:

“The referendum must be trusted and clear”.

It also states that the rules are,

“designed to ensure that the referendum will meet the highest standards of fairness, transparency and propriety and deliver a decisive result”.

However, any question that starts with the words “Do you agree?” is obviously totally loaded in favour of the answer that it seeks. It is rather like a judge saying to a jury before it goes out to consider its verdict, “Do you agree with me that this man is innocent and should be set free?”. Immediately, one sees the tone of loading the answer in favour of a particular outcome. Again, it is rather like a plaintiff in a divorce court presiding over the court in which his or her divorce is heard.

Considering the way in which the Scottish National Party and Administration seem to dress up their intentions in bland language, finessing the difficult areas, should put us on our guard. That is why, when we see that the very first clause of the Bill proposes to hand more controls over parliamentary elections to the Scottish Administration, I ask my noble friend to reassure me on all that and to bear in mind that it is through the prism of the nationalist approach in the Scottish Parliament that this clause, and indeed the whole Bill, should be considered.

[The Advocate-General for Scotland (Lord Wallace of Tankerness)]

My Lords, I thank the noble Lord, Lord Browne, for using the clause stand part debate to allow us to explore and examine what is intended by this clause and, indeed, what is not intended. I also thank my noble friend Lord Lang. I assure him that it was not my intent to try to stop him speaking. I think he knows full well that we genuinely expected the previous debate to be somewhat shorter than was the case. He is absolutely right to say that it was good that we started with a lengthy but very good debate which allowed numerous views to be expressed. It may well facilitate our consideration of these clauses.

This clause transfers to Scottish Ministers certain of the executive functions that are currently the responsibility of the Secretary of State relating to the administration of Scottish Parliament elections. It will enable Scottish Ministers to make general provision by order for the conduct and administration of elections to the Scottish Parliament, the questioning of such an election and the consequences of irregularities. The noble Lord, Lord Browne, asked me to be more specific about what the powers confer and what continues to be reserved. In the same spirit, my noble friend Lord Lang asked for some reassurances. As I have indicated, the Bill will transfer to Scottish Ministers some of the executive functions that are currently the responsibility of the Secretary of State. There is no corresponding widening of the legislative competence of the Scottish Parliament although, obviously, it will have a role in approving the subordinate legislation made by Scottish Ministers. So it is executive devolution rather than legislative devolution.

Specifically, Scottish Ministers will be able to make provision by order as to the conduct of Scottish Parliament elections, the questioning of such an election and the consequences of irregularities. This power includes making provision about the supply or otherwise dealing with the electoral register, the combination of Scottish Parliament elections with other elections falling within the legislative competence of the Scottish Parliament—the most obvious one being local authority elections—as well as the limitation of candidates’ election expenses. However, elements of the powers will remain the function of the Secretary of State: the franchise and the combining of Scottish Parliament polls with polls at other reserved elections. This will ensure that issues of constitutional importance continue to be dealt with by the UK Parliament.

I hope that reassures my noble friend that, because of its constitutional importance, the franchise will be reserved to the United Kingdom Parliament. He referred to 16 and 17 year-olds being able to vote. Such a situation is purely hypothetical. However, having different franchises for different elections held in a combined poll may not be as anomalous as my noble friend thinks. If a local election were held in a combined poll with a Westminster election, while he and I would have the ability to vote in local elections we would not be allowed to vote in a Westminster election, so you can already have elections which could be combined on the same day with a different franchise applying in each.

As regards the referendum, I remind my noble friend and, indeed, the Committee that the preference expressed by the United Kingdom Government in our consultation paper was that the franchise of the electorate for any referendum on Scottish independence should be that which applies at the Scottish Parliament elections. That same franchise applied at the 1997 referendum. We take the view that, if it was good enough to elect a Scottish Parliament in May last year, it is appropriate for a referendum.

In addition, the Secretary of State will retain the powers to modify the application of Section 7(1) of the Scotland Act, which sets out the modifications to the calculation of the regional figures which are made when a constituency poll is countermanded or abandoned, and to modify Section 8(7), which sets out what happens when the highest regional figure is the regional figure of two or more parties or individual candidates. This is about the election to the Scottish Parliament rather than an administrative part of it. It is about the election itself. That is why we have considered it appropriate to continue the reservation. The Secretary of State will also retain the power to make provision for the return of members of the Parliament otherwise than at an election.

The B3 reservation—that is, elections to the United Kingdom, European and Scottish Parliaments and the franchise at local government elections in Schedule 5 of the Scotland Act—will remain unchanged. The noble Lord, Lord Browne, asked whether that would lead to the fragmentation which the Gould report raised concerns about with regard to the operation of the 2007 Scottish and local government elections. All responsibilities for the effective conduct of a Scottish Parliament election are being handed over to the Scottish Government. I have indicated the nature of the functions being retained, which relate to the framework under which those elections are run—for example, the franchise and the electoral registration system—or to the reserved elections such as the parliamentary elections. We believe that the difficulties encountered in 2007 were the result of a unique combination of factors that is not expected to arise again.

It is fair to put on record that the 2011 elections were well administered, notwithstanding the fact that it was a combined poll with the AV referendum. That is to the credit of electoral administrators, who are now better co-ordinated through the electoral management board that both the UK and the Scottish Governments support. If one were to change the rules with regard to electoral registration and devolve that, you could then get fragmentation because you could possibly find yourself with different rules for electoral registration for Scottish parliamentary elections and for Westminster elections. I think we are agreed that, although the franchise may be different for each of these elections, it makes sense to have the one canvass subject to the one set of rules for electoral registration.

The noble Lord, Lord Browne, in referring to the previous report of the Scottish Parliament, asked about disqualification from membership of the Scottish Parliament. Section 15 of the Scotland Act allows Her Majesty to specify, by Order in Council, various office-holders who are disqualified from membership of the Scottish Parliament. At present, Scotland Office Ministers are responsible for preparing the draft legislation and presenting it to Her Majesty in Council, but it must first be approved by the Scottish Parliament. Clause 16 has been added in response to the legislative consent Motion in March last year, and will pass responsibility from Scotland Office to the Scottish Government, although the requirement for approval by the Scottish Parliament will remain.

We believe that devolving the elements of responsibility for the administration of elections as I have outlined is consistent with the Calman commission’s principle that these matters should be decided at a level closest to those affected, unless there are good reasons for determining them at a UK level. I have sought to try and make the distinction in respect of constitutional matters and where, in terms of electoral registration, it makes sense to get consistency across the United Kingdom.

[Lord Sewel]

Perhaps I may make one point. I do not want to keep on bringing the debate back to the present First Minister, but he has made clear over the years his animosity and antipathy towards this House. Would it therefore be possible under the arrangements that have been outlined for the Scottish Parliament to disqualify Peers from being Members of the Scottish Parliament? That would be a great shame because a number of Peers have distinguished themselves as MSPs.

[Lord Wallace of Tankerness]

No, my Lords, that would not be possible, as eligibility matters will remain reserved. I hope that on the basis of what I have indicated—

[Lord Browne of Ladyton]

I am grateful to the noble and learned Lord for giving way. From the way in which his voice changed, I had the sense that he was moving towards a peroration.

I am beginning more clearly to understand this division. I understand the difference between the framework within which the elections are conducted, as opposed to the administration; and I understand the difference that I imposed on this debate between the electoral system and conduct. I should be grateful if the Minister would go through the list that I gave—at some stage, if not now. Perhaps he may write to tell me where at least two of those matters lie. One of them may be straightforward and we will come to an amendment on it shortly, one hopes—the procedure and framework for filling regional MSP vacancies—but where does the abandonment of a constituency poll or notice of it to be countermanded lie? Those two matters concern me and I will ignore the other two. I should just like a reassurance that beyond the list that I gave there are no matters other than those the noble and learned Lord has identified.

[Lord Wallace of Tankerness]

My Lords, I will certainly write to confirm, but I can seek to indicate that the rules regarding the regional list will remain reserved to the Secretary of State. On the abandonment of a poll, my understanding is that the issue in question is not so much with the abandonment of the poll itself but where that leads to a difference in the calculation of the regional vote. It is that calculation that would be affected if there was an abandonment of a poll in a particular constituency. I am seeing nods that I have actually got it right. That is the substance of this reservation. I will confirm that, but I hope that that has been a sufficient explanation to the noble Lord.

Clause 1 agreed.

[The Deputy Chairman of Committees (Baroness Fookes)]

The Question is that Clause 2 stand part of the Bill.

[Lord Foulkes of Cumnock]

My Lords—

[The Deputy Chairman of Committees]

Perhaps I should explain to the noble Lord that we have to agree that Clause 2 stand part of the Bill before we reach Amendment 1.

Clause 2 agreed.

15:15

Amendment 1

Moved by

[Lord Foulkes of Cumnock]

1: After Clause 2, insert the following new Clause—
“Regional vacancies: individual candidates
(1) Section 10 of the 1998 Act (regional vacancies) is amended as follows.
(2) In subsection (2) omit “the regional member was returned as an individual candidate, or”.
(3) After subsection (6) insert—
“(6A) If the regional member was returned as an individual candidate, an election will be held and the single vacancy allocated in accordance with the procedures set out in subsection (6B).
(6B) In any election held in accordance with subsection (6A)—
(a) for each registered party which has submitted a regional list, the regional figure for the purposes of paragraph (c) is the total number of regional votes given for the party in all the constituencies included in the region divided by the aggregate of one plus the number of candidates of the party presently returned as constituency members for any of those constituencies plus the number of regional seats allocated under section 8 to that party at the previous general election;(b) for each individual candidate, the regional figure for the purposes of paragraph (c) is the total number of regional votes given for him in all the constituencies included in the region;(c) the vacant regional member seat shall be allocated to the registered political party or individual candidate with the highest regional figure.””

[Lord Foulkes of Cumnock]

Thank you, Lord Chairman. I am really grateful to you. You are almost a relative. I have great respect for your knowledge of procedure, including procedure in the other place, where you served with great distinction as Deputy Speaker. I remember very well that you kept me in order from time to time. I wish that you had the same powers here, by the way, but that is another story.

Perhaps I may also be permitted to speak to Amendment 16, which is grouped with this amendment. I am sure that one speech would be welcomed by the House, rather than if I spoke to the amendments separately.

As to Amendment 1, I believe that I have discovered a gap, a lacuna or whatever word one should use, in the electoral process. It came about in my discussions in relation to my very good friend, the independent Member in Lothian, Margo MacDonald MSP, who I have known for many years. In raising this issue, I wish her absolutely no ill at all—quite the reverse. I hope that this issue does not arise in any way. However, it occurred to me when talking to her and then looking at the legal position that if a vacancy arises for a constituency Member, there is provision for a by-election, and if there is a vacancy for a regional Member on a party list, the next person on that list automatically takes over. However, when an independent Member either resigns or sadly dies, there is no provision for filling that vacancy. There seems to be something missing from the arrangements. I am sure that everyone would agree that there ought to be some method for filling that vacancy. Having discussed it with the helpful people in the Public Bill Office, my amendment is just one way of dealing with that issue.

If a vacancy arose due to the resignation or the decease of an independent Member, new subsection (6B) proposed in my amendment would take effect. A new calculation would then be carried out by the returning officer, in the same way as the allocation of the regional seats which resulted in the election of that independent Member. It would be:

“for each registered party which has submitted a regional list, the regional figure for the purposes of paragraph (c) is the total number of regional votes given for the party in all the constituencies”—

we know that figure; that was used in the initial calculation—

“divided by the aggregate of one plus the number of candidates of the party presently returned as constituency members for any of those constituencies plus the number of regional seats allocated under section 8 to a party at the previous general election”.

So those seats are all taken into account. Proposed new paragraph (b) states:

“for each individual candidate, the regional figure for the purposes of paragraph (c) is the total number of regional votes given for him”—

it should say “or her”, but I am sure that in this case “him” includes “her”, or embraces “her” may be a better way to put it—

“in all the constituencies included in the region”.

Then, the vacant regional Member seat would be allocated to either the registered political party or the individual candidate with the highest regional figure. That seems to me, and it seemed to the Public Bill Office, the best way to deal with it.

I hope that the Minister and all Members of the House agree that the issue needs to be dealt with. The Minister has a great deal more advisers on drafting than I do. If, for any reason, this is not the best way to deal with the matter, I hope that at the very least he will say that he will come back with an amendment that deals with it more effectively.

Amendment 16 is very different and addresses a difficult issue on which I have changed my views—as have others, I think. It concerns whether persons should be permitted to stand for both a regional seat and a constituency seat at the same election. Paradoxically, the position is different in Wales from that in Scotland. I do not understand why it should be different. In Wales, the same individual is not permitted to stand for both a regional and a constituency seat.

A few years ago, before the most recent election in Scotland, that seemed to me to be a very sensible provision. I tabled an amendment in this House. Strangely enough—but these things happen in politics—the Minister who had piloted the legislation for Wales, and argued the case in Wales that a person should not be permitted to stand for both, made an entirely opposite argument in rejecting my amendment to bring Scotland into line with Wales. I have great respect for my good and noble friend Lord Evans, especially when he can argue one way one year and the other by the next; that is a necessary skill in politics. However, he did not give any explanation for it.

I hope that if the Minister does not accept my amendment today, he will at least give some logical explanation which will convince not just me but other Members of the House why it should be different in Scotland from Wales.

Arbuthnott identified the problem of dual candidacy in his report. He said that the commission found considerable public opposition to the party control of the closed list. Concerns cited were a lack of voter choice over the selection and election of regional candidates. This was perceived to undermine legitimacy. That is not dealing with precisely my point, but he went on to state that the lack of legitimacy was compounded by the problem of dual candidacy. While candidates were defeated in their constituency, many were then elected because they were included on closed party lists. It was noted that 88 per cent of successful regional MSPs had been failed constituency candidates.

[Lord Wigley]

That was what led to the change in Wales. There were three defeated candidates in one constituency alone all of whom came back on the list. But would that problem not be overcome if there was an open list rather than a closed list?

[Lord Foulkes of Cumnock]

There is scope for another amendment, I think. I have tabled enough already, so perhaps the noble Lord might think of tabling one. Everyone here from Scotland will know that list Members have a habit of choosing a seat they would like to stand for in the constituency and then concentrate on opening an office and taking up issues in that constituency. If the constituency Member cannot deal with a problem—elected Members will know that some problems are insoluble—the candidate will jump on the bandwagon and take it up.

Dual candidacy is a real problem. I have tabled a later amendment proposing a general review of the electoral system. I will discuss that in greater detail when we get to that amendment. It would be a better way of dealing with the issue in the longer term, but this would deal with it in the short term. Our electoral system was set up with the best of intentions, but even the noble Lord, Lord Steel, who was involved, now recognises that it is not fit for purpose. One of the problems is the question of dual candidacy. I hope that other Members who have experienced the problems of dual candidacy in Scotland will comment, and I certainly hope that the Minister will consider the potential change and, at the very least, explain why there should be a different system in Scotland from the one that I understand operates quite successfully in Wales.

[Lord Steel of Aikwood]

My Lords, the noble Lord has raised two very important, if minor points. We have to remember that when we were legislating on the then Scotland Bill, in which I was involved in this Chamber, the additional Member system, as it is known, was completely new to this country. There were one or two loose ends that were not quite right.

On Amendment 16, which is the noble Lord’s more substantial amendment, I entirely agree with him. As Presiding Officer I had to deal privately with complaints from constituency Members about the activities of regional Members. It is slightly worse than the noble Lord said because quite often regional Members had not just stood and been defeated, they were intending to stand again in the constituency. People were sitting in the Parliament—quite unlike this place—and had every intention of fighting a Member sitting on another Bench. That made for bad relations within the Parliament and some people—I shall name no names—exploited it disgracefully. In Wales—

[Lord Wigley]

My Lords—

[Lord Steel of Aikwood]

I shall give way in a second. The same problem arose in the original Welsh legislation—the noble Lord will correct me if I am wrong—but it was the wish of the Welsh people to change the rule. Unfortunately there is not the same will in Scotland, not even in my own party.

[Lord Wigley]

It was not exactly the same in Wales. The circumstances are different in that there are four Members on the list in Wales, compared with seven in Scotland. The proposed changes would not overcome one of the basic problems. Someone who has been elected on a list can still stand at the next election for a constituency seat and do exactly what the noble Lord described, and can give up the regional seat in standing for the constituency.

[Lord Steel of Aikwood]

I take that, but what they cannot do in Wales and not only can but actually do in Scotland is stand in the constituency and also be on the list. They have a fallback position which is not the case in Wales. That is wrong and it should be put right. Whether we can do it in this Bill is another matter but the noble Lord, Lord Foulkes, raises a very important point.

On the noble Lord’s other more minor amendment about by-elections in the event of an independent Member creating a vacancy, I have an additional point to make. My memory is fading but I think that I gave evidence to the Calman commission, which has not dealt with it in the report. I was elected on the regional list as a Liberal Democrat and when I went into the Chair, of course, I had to resign from the party. There was no way that I could be re-elected because I was no longer a member of the party; I was an independent. I could not stand in Edinburgh and say, “Please elect me because I am the Presiding Officer”. I am not saying that I wanted to particularly but it was impossible to do it. My two successors were fortunately elected in constituencies but that might not always be so. When a Presiding Officer happens to be a regional list Member there is no way that he or she can continue for a second Parliament. That cannot be right. There is a minor problem in addition about independents standing on the regional list. The whole thing would be clarified if we had a different electoral system but we are saddled with what we have now and I have no instant solution to that problem. It is one that ought to be taken up as we proceed with the Bill.

15:30

[Lord Browne of Ladyton]

My Lords, I shall speak to the amendment in this group standing in my name and that of my noble and learned friend Lord Boyd of Duncansby. I also have something to say about the amendments tabled by my noble friend Lord Foulkes.

My amendment would grant the Scottish Parliament the power to ensure that its elections are never again held on the same day as another national poll. The amendment is nearly identical to one tabled by my honourable friend Tom Greatrex, the Member for Rutherglen and Hamilton West, at the Public Bill Committee stage in the House of Commons. However, I regret that during that debate the Parliamentary Under-Secretary of State for Scotland and many others were diverted by the then controversy of the imminent application and interaction of the Fixed-term Parliaments Act. As far as I can see, although my honourable friend spoke to the amendment, it was never properly answered. Therefore, it has been repeated here in order to get an answer. If the answer allows for the avoidance of a coincidence of polls such as we saw in 2007, I will be greatly satisfied.

As noble Lords will know, the coincidence of local government and Scottish Parliament elections on 3 May 2007—and other factors—led to the rejection of 146,099 Scottish Parliament ballot papers and 38,362 local election ballot papers. It was the nadir of electoral administration in the United Kingdom, and everybody has focused on ensuring that it never happens again. It is the firm belief of this side of the House that never again should the people of Scotland be subjected to the confusion and chaos of two polls on the same day. We strongly opposed the coalition Government's decision to impose a referendum on the alternative vote system on the same day as the Holyrood election. The Minister said that it passed off without incident, but we will never know what effect that coincidence had on the way in which people behaved. There was no repeat of the dreadful circumstances of 2007, but I argue in my amendment that we should try to avoid repeating the coincidence if at all possible.

I am conscious that Clause 2 relates to the administration of the combination of polls that would be required should there be such a coincidence. I have nothing to say about that; I agree with it. We have been combining polls in those circumstances probably since 1978 or before. It makes good sense. Therefore, I am happy to let Clause 2 pass. What I am concerned about is seeking to use the device of the 1998 Act to avoid this. If the clause is properly drafted—and I hope that it is—it would grant the Scottish Parliament the flexibility to move its poll in the event of a coincidence. It would mean that there should never be any future coincidence of polls unless the Scottish Parliament decided otherwise. Most people believe that probably we cannot have that coincidence. However, despite the Fixed-term Parliaments Act and the devices of extending the period of a Parliament, in particular of the Scottish Parliament, that the coalition Government have agreed to, there is the possibility of an extraordinary election—some noble Lords on this side of the House would quite like next to see ordinary election, despite the Fixed-term Parliaments Act—coinciding with a date fixed for a Scottish Parliament election.

I got myself into some difficulties with the arithmetic of trying to work out whether coincidence is at all possible with the European Parliament elections as a consequence of the movement of the Scottish Parliament elections. It may just be possible, which is why the amendment anticipates the coincidence. I may be wrong about that, but we could in future have to use the device of extending the Scottish Parliament’s time again to avoid coincidence. That may throw up the possibility of a European Parliament coincidence. We believe this is the best way to do this. It should be a matter for the Scottish Parliament. In response to Gould, the Scottish Parliament committed to decoupling Scottish Parliamentary and local government elections, which was the real mischief that caused the problem in 2007. Similar provisions have been made to try to ensure that Scottish parliamentary and UK general elections do not follow the same cycle, as I have already said. The Calman commission recommended that, for reasons of practicality and principle, Scottish parliamentary elections should be administered at the level closest to those affected by them. We have already debated that to a degree. In a sense, it was the electorate of the Scottish Parliament who were the victims of the catastrophe that was the 2007 election. We believe that as a mature Parliament the Scottish Parliament should have the responsibility to decide whether it wants to allow this coincidence to persist, should it happen because of the rhythm of parliamentary elections or the possibility of an extraordinary election. This amendment is devised to achieve that possibility.

I turn to the amendments tabled by my noble friend Lord Foulkes of Cumnock. I congratulate my noble friend and, by extension, the noble Lord, Lord Steel of Aikwood. Each of them identified lacunae in the framework for Scottish elections, which is a phrase that I will now use, to the Scottish Parliament that could be addressed. I was not aware that there is no process for filling a vacancy for an independent member in the regional part of the system. That should not be allowed to continue. I understand that my noble friend’s approach to this is to devise a method that is very similar to the method adopted for electing regional members. It is very close to that, if not precisely the same. I urge the Minister to take this away to see whether, at some stage during the passage of this Bill, we can deal with this. His advisers are, in addition, capable of dealing with a lacuna that has been identified by the noble Lord, Lord Steel of Aikwood. I suggest that the Minister considers that too. It would genuinely be in the spirit of the appropriate approach to this legislation. I am sorry that the Calman commission did not have its attention drawn to this problem because I am sure that if it had the noble and learned Lord in another guise may well have been party to a recommendation to resolve it.

I turn to Amendment 16 which the noble Lord, Lord Steel, identifies as being the more substantial amendment. My noble friend Lord Foulkes of Cumnock is a man of extraordinary experience, not just in your Lordships' House but in the House of Commons and in the Scottish Parliament. Some of us were privileged to be at the celebration of his 70th birthday in the Gorgie Suite in his beloved Tynecastle Park on Saturday night. He knows where my allegiances lie, and I am delighted that there is at least one reason for celebration in the Gorgie Suite in Tynecastle this year because there will be precious few others. For those noble Lords who do not know what I am referring to, in an act of extraordinary generosity his family invited almost 200 people from all over the world to join the celebration of his 70th birthday. The fact that almost nobody refused the invitation no matter how far away they came from or, it seemed to me, failed to turn up is a measure of the high esteem in which he is held. I refer to this because the speeches that night celebrated a lifetime of service to politics in Scotland and to public life. It is from that background that he speaks when he rises in your Lordships' House, and he ought to be listened to carefully. However—

[Lord Foulkes of Cumnock]

However!

[Lord Browne of Ladyton]

However, I regret that in this case I cannot support my noble friend’s amendment. If there is a mischief here, it seems to me that the solution lies in the hands of the political parties. We should not be legislating for this and I am surprised that we have in fact legislated in Wales, but if the Welsh people wanted that, that is fine.

For many years, the Labour Party had a voluntary prohibition on this. We had a rule that you could not stand for both the lists and the constituencies. We departed from that at the last election to the Scottish Parliament and because of that Sarah Boyack is a Member of the Scottish Parliament. That seems to be a good result; apart from anything else, it may be a reason for maintaining the status quo.

[Lord Steel of Aikwood]

Is the noble Lord aware that the Conservative Party in Scotland had precisely the opposite rule—that in order to be on the list you had to stand in a constituency?

[Lord Browne of Ladyton]

I am most grateful. Every day I come to work in your Lordships’ House I learn something, and that is today’s learning experience. I had no idea that that was the case. Maybe at some stage—I will not take up your Lordships’ time with this now—somebody will explain to me why that was the case.

[Baroness Randerson]

Perhaps I can add to the amount the noble Lord has learnt today. It was not really the case that the people of Wales wanted to abandon dual candidacy—the Labour Party in Wales was very keen on that. Consultation produced a total lack of interest on the part of the people of Wales. However, although the system of election is better than first past the post, it is rather chancy. Not allowing dual candidacy actually increases the chances of strange results happening. For example, in the last Welsh elections the Conservative Party was extremely successful, led by a leader who was not able to be a constituency candidate because he was a list candidate. He was so successful and they won so many constituencies that he lost his list seat. It does enhance the problems of the system.

[Lord Browne of Ladyton]

I am very grateful to the noble Baroness for continuing my education. I am better informed than I was when I rose to speak. I have to say that when I started in my political life, the people of Wales and the Labour Party were almost synonymous. In any event, one of the consequences of our generous devolution of power has been that with proportional representation in the political colour of the United Kingdom, parties have taken advantage of opportunities. I accept that and it is all part of democracy.

I am not arguing for maintaining the status quo because of the outcome. In fact, I pray in aid Arbuthnott. The Arbuthnott commission was set up to look into constituency boundaries for the Scottish Parliament, because there was an issue of divergence of boundaries between the Scottish Parliament and the United Kingdom Parliament, and voting and representation in Scotland. I have an extract of the commission’s report, entitled Putting Citizens First: Boundaries, Voting and Representation in Scotland. I am looking at paragraphs 4.5 onwards. In moving his amendment, my noble friend quoted from Arbuthnott. I do not intend to quote all these 12 or 13 paragraphs, but they seem to set out a very coherent argument for why it would be inappropriate to depart by law from what has become the practice of dual candidacy.

With all due respect to my noble friend, I will read the conclusion, paragraph 4.60, which in a sense contradicts some of the thinking. It states:

“The Commission believes that preventing dual candidacy would be undemocratic and agrees that it would place”—

and here I think it is quoting a witness—

“‘an unnecessary restriction on the democratic rights of potential candidates, parties and local electors to have as unrestricted a choice as possible in an election’.”.

Certainly, in Scotland, as a consequence of divergent party practice, in a situation that permitted dual candidacy, there is a belief that people took advantage. In my view, political parties just need to learn to make the best of the circumstances in which they are operating and then we can all take advantage of the circumstances, rather than changing the circumstances or the opportunities that other people take advantage of.

15:45

[Lord Wallace of Tankerness]

My Lords, in introducing his amendment, the noble Lord, Lord Foulkes, has given us an opportunity to look at a number of the issues that have arisen with regard to the operation of the electoral system. As my noble friend Lord Steel said, when we were legislating in 1998 it was not really possible to foresee all the implications and consequences of it. Therefore, we have had a useful opportunity to highlight a number of the issues and concerns that have arisen.

As the noble Lord, Lord Foulkes, says, Amendment 1 identifies a lacuna, which, to be fair, I am not sure has been highlighted very much in the past. My noble friend Lord Steel pointed out a variation on that with regard to the role of the Presiding Officer, who gets elected on a list basis as opposed to a constituency basis. Perhaps I may add that Mr George Reid did not stand again so the issue did not arise, whereas Mr Alex Fergusson always indicated that he would seek to stand again as a Conservative. No doubt he would have had to win the nomination of the Galloway Conservatives. It may also be said that it would have been open to my noble friend Lord Steel to have sought again to put his name forward in the Liberal Democrat list for Lothian. Although I did not live in Lothian, had I done so I certainly would have voted for him.

The noble Lord, Lord Foulkes, has raised an important point. No doubt with some work he has found an interesting way to address it. As he properly says, currently a seat vacated by an individual candidate who was returned as a regional Member remains vacant until the next general election. The noble Lord proposes that a poll is held across the whole region to select a new Member. Calculations would ensue upon that—he set that out very clearly and I do not propose to repeat it—to identify who would succeed.

The noble Lord is right to point out that a regional seat vacancy has not yet been caused by an independent Member vacating one. I share his view. I bear no ill will towards Mrs Margo MacDonald for being the only independent Member. Not only do I bear her no ill will but I think that everyone who knows her would take the opportunity to wish her well. My experience is that she has always made a very robust and independent contribution to the deliberations of the Scottish Parliament, and long may that continue, although we do not always agree with her.

We should remember that voters continue to be represented by their constituency MSP and several regional MSPs. It is an important issue, which, given that it is novel, I would wish to look at. If we did anything, it would be important that it commanded consensus among all the parties because it is an important part of our electoral system. To commit from the Dispatch Box without having taken proper soundings among all the parties would be inappropriate, but I hope that we can get an opportunity to take soundings to see whether this gap can be plugged, and plugged suitably to take account of the position of a Presiding Officer as well.

The other amendment moved by the noble Lord, Lord Foulkes, would allow candidates to stand for both constituency and regional polls, and both he and my noble friend Lord Steel indicated some discontent from their own experiences with the current system. The noble Lords, Lord Foulkes and Lord Browne, quoted from the Arbuthnott commission, which stated that it was,

“not convinced that there is any evidence to support the claims made regarding these perceived problems. There is no survey evidence to suggest that dual candidacy is an issue for voters, or a disincentive to their participation in the political process. Few of our consultation responses raised dual candidacy as an issue, nor was it raised spontaneously in our focus groups”.

I am certainly aware from my time in the Scottish Parliament that colleagues representing Orkney would find that not many regional list candidates would bother to get that far, although occasionally it was quite useful to have regional-list MSPs in order to pass on some of the more difficult cases. If a constituent was clearly not satisfied with what you had done on their behalf, and you would be surprised if anyone would be able to satisfy them, it was always useful to have another seven MSPs with whom you could share the burden.

That said, this would be a significant change to the system for electing Members of the Scottish Parliament. The question was raised with regard to Wales—my noble friend Lady Randerson and the noble Lord, Lord Wigley, are in their places. My understanding is that objections were raised by three of the four main political parties in Wales when this was brought forward. The noble Lord, Lord Foulkes, asked me to explain why this position arises. In our debate before we went into Committee I was asked at one stage to explain the policy of the Scottish National Party, and now I am being asked to defend the position that was brought about by the previous Labour Administration, of which the noble Lord, Lord Browne, was a most distinguished member. It actually arose from a proposal in the White Paper, Better Governance for Wales, published in June 2005. It is fair to say that there is no reason why the position in Scotland should be the same as that in Wales. There is an automatic assumption that the systems are always going to be the same, but I think it is reasonable to say that there can be variations tailored to suit particular requirements in different parts of the United Kingdom. I do not think it follows that because Wales has not gone down the route, Scotland should not do so either.

The noble Lord, Lord Foulkes, indicated that a later amendment of his would propose a general review of the electoral system. He will be aware that the Government have stated their intention to consider what has been said about a review of the electoral system in the reports of both the Calman commission and the Arbuthnott commission. There is obviously some support for this in some quarters, but it would be possible to take forward such a review only with the full support of the Scottish Parliament as well. The Committee will be aware that quite a number of consultations are under way. The most crucial one at the moment is on the referendum, and in a moment I will deal with the amendment spoken to by the noble Lord, Lord Browne, on the coincidence of election dates. The Government are committed to looking at the issue of fixed-term Parliaments and whether the Scottish Parliament should move to fixed terms. That will generate another consultation. Perhaps this is not the most appropriate and propitious time to start a review of the electoral system, although I repeat that the Government have indicated their intention to consider a response to both Calman and Arbuthnott on that point.

The amendment moved by the noble Lord, Lord Browne, seeks to allow the Scottish Parliament to move the date for parliamentary elections by up to 12 months either way when it falls in the same year as either an early UK general election or a European Parliament general election, so long as the new date is not within six months of either of those elections. He mentioned that when this was debated in the House of Commons, there was more of a focus on the then quite likely coincidence of a Scottish and a Westminster election in 2015. I moved an amendment during the passage of the Fixed-term Parliaments Bill through your Lordships’ House that changed the date of the next Scottish election so that such a clash would not occur. The Government are already committed to carrying out a detailed assessment of the implications of the two elections coinciding on the same day and to consult on the possibility of moving permanently to five-year terms for the Scottish Parliament. We will make a more detailed announcement of our plans in due course.

If any future consultation is in favour of moving the Scottish Parliament to five-year terms, that would solve the problem of a clash with both scheduled UK elections and European parliamentary elections, as all three will then be on five-year cycles scheduled for different years. That said, there will always be a risk that an early UK general election could reintroduce a clash of dates due to the resetting of the parliamentary timetable. However, if there are concerns about that happening, I hope the noble Lord will agree that that would be an important issue to raise in the context of a consultation on moving to a five-year fixed term for the Scottish Parliament, as we intend to do.

We are committed to considering a change to the length of the term of the Scottish Parliament. It is an appropriate concern for the noble Lord to have raised, but I hope he would agree that this Bill is perhaps not the place to deal with it. However, it is germane to the consultation that is about to take place. That would be the appropriate place in which to consider it. In these circumstances, I hope that noble Lords will not press their amendments.

[Lord Foulkes of Cumnock]

My Lords, as always, that was a really helpful reply from the Minister. We are now getting used to helpful replies from the noble and learned Lord, Lord Wallace, for which I am grateful.

I was hoping that he would answer the question which the noble Lord, Lord Evans of Temple Guiting, did not. I was sure that he would have had exactly the same brief from the excellent civil servants the noble Lord, Lord Evans, had, and that it would not be too difficult for him. As it turned out, it was not, so I am grateful to him for explaining it.

As I said in my introduction to the amendment, I am a little equivocal about it anyway. Perhaps I may return the flattery that I received from my noble friend Lord Browne of Ladyton, whom I thank for his kindness. Now one or two people will ask me why they were not invited to the party, by the way; that is the only problem that I have. My noble friend explained extremely well why we should leave it to the political parties and wait for the promised wider review of the electoral system. I understand also that my right honourable friend Mr Peter Hain is suggesting that Wales should move back to first past the post elections for the Welsh Assembly, which seems like a wonderful idea for those of us who are Neanderthal first past the post supporters—so there is even discussion there. Therefore, I shall not press Amendment 16.

I do feel strongly about Amendment 1, because this matter should be sorted out. I am grateful to the Minister for his reply. As I understood it, he said that he would take the matter away and consult other parties, and that if there was some consensus he would come forward with an amendment on Report. He is nodding, so I am not jumping to conclusions. On that basis, I am quite happy to withdraw my amendment.

Amendment 1 withdrawn.

Amendment 2 not moved.

Clause 3 : Supplementary and transitional provision about elections

Amendment 3

Moved by

[Lord Wallace of Tankerness]

3: Clause 3, page 3, line 25, leave out from “powers)” to end of line 34 and insert “after subsection (1) insert—
“(1A) Subsections (2) to (11), except subsection (9), apply also to the power of the Scottish Ministers to make an order under section 12.””

[Lord Wallace of Tankerness]

My Lords, Section 113 of the Scotland Act 1998 makes provision about the scope of subordinate legislation powers in that Act. Clause 3(1) of this Bill amends Section 113 of the 1998 Act so that it also applies to Scottish Ministers’ new powers to make subordinate legislation about the administration of Scottish Parliament elections under Section 12 of the 1998 Act.

The amendment replaces Clause 3(1) with a provision that has the same effect and restructures Section 113. This is intended to make it easier for provisions in this Bill or in future legislation to provide that Section 113 applies in relation to other powers that may subsequently be conferred on Scottish Ministers. I beg to move.

Amendment 3 agreed.

Clause 3, as amended, agreed.

Clause 4 : Presiding Officer and deputies

Debate on whether Clause 4 should stand part of the Bill.

[Lord Steel of Aikwood]

My Lords, I am very grateful to the Government for including in the Bill the second part of this clause on the election of the Presiding Officer, possible deputies and temporary deputies. It arose directly out of evidence that I gave to the Calman commission, which arose in turn from my own experience when, despite trying to juggle radiotherapy for prostate cancer with my duties in the chair, I was absent for some time, and the Parliament found that it had no provision to enable it appoint even a temporary deputy to help take the load. I am glad that this clause appears in the Bill. I am thankful and I welcome it.

The other point that I wish to make is slightly astray of the Bill. Members of the House will note that under Clause 4(3) the Parliament has 14 days from polling day to meet and elect a Presiding Officer. That is in stark contrast to what happens here. I have on other occasions severely criticised the haste with which the present coalition was put together, which I thought was entirely unnecessary. Under the Scottish arrangement, which was already much looser, because of proportional representation it was anticipated before the first election that a coalition was more likely than not and therefore that there was plenty of time. My noble and learned friend was actively involved and will remember how long it took, even with a more limited agenda, which the Scottish Parliament has compared with Westminster, to put a coalition together. It was done with great care and skill and it worked. Without going into extraneous matters, I think that the haste with which the coalition was put together at Westminster was a mistake and that perhaps they can learn by reading Clause 4 of this excellent Bill.

16:00

[Lord Wallace of Tankerness]

My Lords, I am grateful to my noble friend Lord Steel. I can indeed confirm that he made representations to the Calman commission on this point, not least in the light of his own experience. His proposal was supported by the then Presiding Officer of the Scottish Parliament, Alex Fergusson, and therefore the Government were happy to agree with the Calman commission’s recommendation that there should be greater flexibility in the running of the Scottish Parliament.

My noble friend is also right to point to the other parts of the clause, which gets rid of the restriction that the Presiding Officers and their deputies have to be appointed at the Parliament’s first meeting. This inflexibility caused problems during the last Session, given the very close electoral result. This meant that parties had difficulty in deciding quickly to release one of their members to be Presiding Officer.

My noble friend made comments about the time taken to form coalitions. In 2003, we did so in a more measured way than perhaps in 1999, when we were under greater pressure. However, we did not have the markets waiting on every twist and turn of the coalition negotiations. There are important differences between Westminster and Scotland, although no doubt we all learn lessons from experience. I hope that what we are putting in here will provide additional flexibility in the election of the Presiding Officer. It has been supported by the previous Scotland Bill Committee in the Scottish Parliament, and the current Scotland Bill Committee has also indicated that it is content with this clause.

Clause 4 agreed.

Clause 5 : Scottish Parliamentary Corporate Body

Amendments 4 and 5 not moved.

Clause 5 agreed.

Amendment 6

Moved by

[Lord Foulkes of Cumnock]

6: After Clause 5, insert the following new Clause—
“Sitting calendar
(1) Schedule 3 to the 1998 Act (Standing orders—further provision) is amended as follows.
(2) After paragraph 7 insert—
“Parliamentary calendar8. The standing orders may include provision for ensuring that the Parliament shall—
(a) sit on at least 30 weeks in each calendar year,(b) meet on at least three days in each week that it sits, and(c) not adjourn for a period of more than 60 consecutive days.””

[Lord Foulkes of Cumnock]

My Lords, it might be said that by moving the amendment—and even by discussing it, let alone coming to any decision on it—Westminster is interfering in the work of the Scottish Parliament. However, I have raised the issue because it is a dissolved Parliament and, ultimately, until such time as there is an independent Scotland—heaven or the electorate forbid—it is the responsibility of this sovereign Parliament.

I raise the issue also because for four years I served, along with the noble Lord, Lord Stephen, and others, as a Member of the Scottish Parliament. I came across a huge number of people who were absolutely astonished when they found out that the Scottish Parliament sat for only one and a half days a week in plenary. Members of the Scottish Parliament are paid a substantial amount of money—something like 87.5 per cent of the salary of a Member of this Parliament—and it is seen as a full-time job. Of course, just as MPs have responsibilities in their constituencies, MSPs have constituency responsibilities, too—at least, constituency MSPs do. Committees also meet on a Tuesday and a Wednesday morning. Even so, it is difficult to explain that the Scottish Parliament sits for only one and a half days in the weeks that it is sitting.

As a result of that, some strange things happen. It is amazing. There are other former Members of the Scottish Parliament here, including the noble Lord, Lord Selkirk, who can give their experiences in relation to this. In almost every debate in which I took part in the Scottish Parliament, the speeches were limited to four minutes. Occasionally, we get time limits here but it is ridiculous to expect people to be able to put forward a coherent argument on a major issue of education, the health service or whatever they are dealing with in four minutes.

Compared with the House of Commons, there are also relatively few opportunities for Statements and Urgent Questions. Recently, under Speaker Bercow in the House of Commons, there have been lots of Urgent Questions. In the time that I was in Holyrood, I cannot remember more than one or perhaps two Urgent Questions. There was not the time. It was difficult to fit anything new or additional into the programme and timetable of the Scottish Parliament.

I find the Report stages of Bills there quite astonishing. These are important Bills dealing, as I say, with important issues such as education, social work, local government reform or the health service. They are rushed through. Sometimes, on an amendment being dealt with on Report, people are allowed to argue a case for only 30 seconds. It is ludicrous that they should be squeezed into that length of time.

Again, Question Time, partly but not completely because of the time constraints, becomes a bit of a farce and a very predictable occasion. I could almost write the script for every First Minister’s Questions, with who will come in and how many of them there will be. It does not have the spontaneity of—

[Lord Forsyth of Drumlean]

I am most grateful to the noble Lord for giving way and sorry that I was not here for the start of his speech; I had to go to another meeting. Could he help me, as I have not had his experience in the Scottish Parliament? Is there some restriction that prevents it from sitting for more than one and a half days a week? Is that not a matter for the Scottish Parliament to decide itself?

[Lord Foulkes of Cumnock]

As always, the noble Lord is perceptive. I was going to come on to say that but will say it now. I put down the amendment some time ago and am now very pleased to hear that, since then, the Scottish Parliament has started talking about sitting at greater length. The purpose of the amendment was to try and get a debate on this, not just here but in the Scottish Parliament. I am glad that it has achieved that. After this debate finishes—if other noble Lords want to participate—were the Minister to give some indication as to what is happening in the Scottish Parliament in relation to its sitting times, more time for debating these issues and Report stages allowing fuller consideration, I would of course be satisfied and willing to withdraw the amendment. I am very glad I raised this as it is long overdue. If it is now being dealt with, no one will be happier than me.

[Lord Forsyth of Drumlean]

My Lords, I confessed that I knew nothing about it, but it seems a very sensible proposal. I have in the past suggested that because the Scottish Parliament sits only one and a half days a week, a solution to the West Lothian question would be that all Scottish Members of Parliament should sit in the Scottish Parliament for one and a half days a week and on those one and a half days the House of Commons could discuss those matters not related to devolved issues. This has not proved very popular with Members of the Scottish Parliament, for reasons that I cannot imagine. So in following the advice of the noble Lord, Lord Foulkes, they might protect themselves from being endangered by people like me, who might suggest that there were synergies in combining the roles of a Member of the House of Commons with a Member of the Scottish Parliament. I am sure that the Scottish Parliament will show considerable gratitude to the noble Lord in drawing this matter to public attention if, indeed, it has already got that Parliament rethinking its sitting days.

[Lord Stephen]

My Lords, I agree very much with the first contribution that the noble Lord, Lord Forsyth, made. This is essentially a matter for the Scottish Parliament, which has wide discretion in this area. Unfortunately, I cannot agree with the suggestions that he made in his most recent contribution. I agree with a great deal of what the noble Lord, Lord Foulkes, said. I am sure that others who have been in the Scottish Parliament, most notably my noble and learned friend Lord Wallace of Tankerness, also agree with a great number of his suggestions, most particularly about the guillotining of virtually every contribution made in the Scottish Parliament. The noble Lord is absolutely right; it is impossible to make a full and weighty contribution when the guillotine constantly comes after sometimes less than four minutes. These issues should be addressed, and I hope that in addressing those issues the Scottish Parliament will look to the contributions of former Members and those who have had experience of the Parliament. But I do not think that it should be as a result of an amendment proposed through the House of Lords that those matters are best addressed. I am sure that the Minister will explain that those matters are being looked at; I understand that there is a concerted effort to look at changing the way in which the Scottish Parliament operates. That is all the more important in the context of more powers being granted to the Scottish Parliament; as the Parliament grows and develops, these issues should be tackled, and the noble Lord, Lord Foulkes, made an extremely valuable contribution in pointing to the Parliament the way ahead.

[Lord Selkirk of Douglas]

If I may, I would like to ask a very brief question to the Minister in this connection. During the Calman commission, we recommended that more time should be given for the final stages of Bills in the Scottish Parliament. It seemed to us that with many Bills, voluntary organisations, charities or other worthy bodies would have recommendations to make but would get virtually no changes in the final stages of the Bill because procedures were so rapid and everything went so quickly. My understanding was that that was under consideration by the Scottish Parliament, and I wonder whether the Minister could give us the up-to-date situation on that subject, if he has the facts readily at hand.

[Lord Boyd of Duncansby]

This is the first time that I have spoken at this stage of the debate, so I renew my declaration of interest in the Calman commission. I am somewhat surprised to find that I am standing here at the Dispatch Box, and I hope that the Committee does not find it strange that two lawyers who were both on the Calman commission now find ourselves on opposing sides of the bar but pulling in the same direction. I hope that it reflects the cross-party approach to the Bill.

To my noble friend Lord Foulkes of Cumnock I can say that I was very pleased, particularly given what has been said already, that I was one of those invited to his party, and that I very much enjoyed it. So if I disagree with him on any point, he can be assured that it is not because I am biting the hand that fed me.

On the issue of timetabling, I think I am right in saying that there are states within the United States that have within their constitution maximum times during which legislators can sit. They take the view that the longer they sit the more mischief they can make. That might be one approach. In Britain, we tend to take the opposite view—that we pay legislators to legislate, and if they are not sitting in plenary session, they are clearly not worth the taxpayers’ money.

The court of public opinion is the important element here. I suspect that it modified the sittings of this Parliament, given the criticisms that were made about the long summer recess, but clearly it may also very well have worked in relation to the Scottish Parliament, given the proposals. In particular, the amendment that my noble friend has put down may very well have spurred some action on it. With these words, I look forward to hearing from the Minister.

16:15

[Lord Wallace of Tankerness]

My Lords, the amendment, which was tabled by the noble Lord, Lord Foulkes, would enable the Scottish Parliament’s standing orders to make provision to ensure that the Parliament would have to sit on at least 30 weeks in each calendar year; that it met on at least three days in each week that it sits; and that it does not adjourn for a period of more than 60 consecutive days. In moving the amendment the noble Lord certainly described some frustrations which I can readily identify with, although we never actually served at the same time in the Scottish Parliament. Although it does not relate to a restriction on back-bench time, I remember one Conservative opposition day when Mr Murdo Fraser was the Conservative spokesman on the economy and enterprise and I was the Enterprise Minister, and the Deputy Presiding Officer announced: “A Conservative debate on the future of Scotland's economy. Mr Murdo Fraser, you have seven minutes”. That did not really seem to give justice to the issue in hand.

That said, when dealing with the internal arrangements of the Scottish Parliament, it is important that we remember the words in the White Paper which the previous Government published when Mr Donald Dewar was Secretary of State for Scotland, in 1997. The White Paper said:

“The Government intend the minimum of legislation to establish the Scottish Parliament; and wherever possible to leave the Scottish Parliament to decide for itself what its procedures should be”.

This Government believe that that statement holds as true today as it did in 1997. The Government do not believe that it is appropriate for the United Kingdom Parliament to place restrictions on the freedom of the Scottish Parliament to administer its own affairs. It is now embedded within our UK constitutional arrangements, and our view is that the Scottish Parliament is capable of making its own changes to procedures as it sees fit.

As the noble Lord, Lord Foulkes, mentioned, on 21 December the Standards, Procedures and Public Appointments Committee of the Scottish Parliament published the phase 1 report of its inquiry into the reform of parliamentary business, which is appropriately entitled Remodelling the Parliamentary Week. I do not know whether that happened as a result of or in spite of this amendment, but as the noble Lord indicated when moving the amendment, it certainly was timely. The committee undertook its inquiry into parliamentary business last September in order to review the Parliament’s procedures and recommend areas for improvement and change. As I indicated, it is a phase 1 report. The aim of the inquiry is to give the Scottish Parliament greater scrutiny and responsiveness to emerging issues of importance to the people of Scotland.

The report makes a number of recommendations. My understanding is that they will soon be debated in the Scottish Parliament and, if agreed, implemented after the Easter Recess. Recommendation 1 states,

“that the sitting patterns of the Parliament should be changed to allow committee meetings to take place on Tuesday, Wednesday and Thursday mornings with Chamber business on those afternoons”.

This would mean that the Parliament will sit for three days a week when it is sitting, which would meet part of what the noble Lord’s amendment aims to do. The report does not make any recommendations on the other two parts of the noble Lord’s amendment—to ensure that the Parliament sits on at least 30 weeks of the calendar year, and not to adjourn for a period of more than 60 consecutive days. However, the report concluded that,

“given the need to protect the”—

respect—

“between the Chamber and committee business, and to protect time for engagement with civic Scotland, the amount of time allocated to each of these priorities at present is broadly correct”.

I have however noted that as the inquiry evolved, it also looked at how the likely addition of new powers and responsibilities proposed in this Bill would need to be taken into account, as further timetabling commitments will need to be made to scrutinise the use of these new powers for the Scottish Government and Parliament. As my noble friend Lord Forsyth indicated in a question, where does the responsibility lie? It is for the standing orders of the Scottish Parliament.

My recollection, though, is that there is also a considerable amount of flexibility. When I was a Member of the Scottish Parliament—more recent Members can correct me—although the normal starting time on a Wednesday, with time for reflection, was 2.30 pm, noble Lords will have realised that yesterday the Parliament managed to sit at 1.35 pm in order for the First Minister to make his statement launching his consultation document, no doubt so that he could then hot-foot it to his appointment with the world’s press at 3 pm in the Great Hall at Edinburgh Castle. I recall other occasions—for example, when it was clear that stage three of the Bill was going to take much longer—when there was flexibility to sit earlier or later.

My noble friend Lord Selkirk asked about the recommendation from the Calman commission regarding the separation of time to allow more time at stage three if new amendments come up, which would engage more stakeholders. I indicate to him that that is obviously a matter for the Scottish Parliament, but I will write to him and other Members of the Committee who are participating in our deliberations to give our understanding of the up-to-date position with regard to the Scottish Parliament’s response to that recommendation.

The Scottish Parliament, now 12 or almost 13 years old, is capable of reviewing its own processes, but we are showing our willingness to look at this issue too. I hope that in those circumstances the noble Lord will feel that the amendment is unnecessary and withdraw his amendment.

[Lord Foulkes of Cumnock]

My Lords, what surprises me is how the Scottish Parliament in its procedures seems more rigid and in its lack of flexibility seems more sclerotic than even this Chamber, let alone the House of Commons. We have already heard examples from the noble Lord, Lord Stephen, about having less than four minutes to contribute to a debate, which are true. We have heard from the noble Lord, Lord Selkirk, about the recommendations regarding later stages being rushed and civic society not having an opportunity to participate fully, and I have appreciated that as well. The Minister himself said that getting everything in when you are given only seven minutes to talk about the economy is a formidable task.

Under the proposals, all that will happen is that they will meet for three days but only for half a day each, so it is still really effectively only a day and a half. That is not a huge amount extra. Of course it is up to the Scottish Parliament, and I am going to withdraw the amendment on that basis, but, speaking as a member of the public in Scotland rather than a nominated Member here, I would expect that the Scottish Parliament might sit rather more than that and spend rather more time discussing some of the major issues that it has to deal with.

Perhaps we should not be saying this because we are non-elected and they all think of us as Neanderthals. I have been around for an awfully long time; I have just had a birthday, as someone diplomatically pointed out earlier. Perhaps we should not be lecturing the Scottish Parliament, but it is just a wee bit strange that it is not lengthening the times of its plenary sessions a little. I shall leave it at that and withdraw.

[Lord Maclennan of Rogart]

Before the noble Lord withdraws his amendment, could he inform us whether there is a standing committee in the Scottish Parliament that keeps these matters under review, or is it the case that this is just an ad hoc inquiry?

[Lord Foulkes of Cumnock]

I think there is a procedures committee that deals with this question in a review.

There are people who have held more distinguished positions than I did in the Scottish Parliament as Deputy First Minister, acting First Minister and Presiding Officer and who have been around for a long time, but I got the impression that the Scottish Parliament was very set in its ways, and for a new Parliament that is very strange. I tried gently to suggest some innovations, when I was a Member and I had some right to do so, and it was very reluctant to accept any of them. It is ironical that we have had more changes, improvements and developments of our procedures in the House of Lords during my time here than I saw in all my time in the Scottish Parliament. I beg leave to withdraw the amendment.

Amendment 6 withdrawn.

Clause 6 agreed.

Amendment 7

Moved by

[Lord Foulkes of Cumnock]

7: After Clause 6, insert the following new Clause—
“Discussion of reserved matters
(1) Schedule 3 to the 1998 Act (Standing orders—further provision) is amended as follows.
(2) After paragraph 7 insert—
“Reserved matters8. The standing orders shall include provision for ensuring that the Parliament shall not discuss items in Schedule 5 (reserved matters) except on a motion to make representations to the United Kingdom Government.””

[Lord Selkirk of Douglas]

My Lords, may I speak to—oh! I am sorry.

[Lord Foulkes of Cumnock]

Members will be getting fed up with my voice by now. I am glad that I withdrew the previous amendment and did not move Amendments 4 and 5. I tabled those amendments but I could have put down dozens more. There is a whole range of issues that we could have discussed. If we had wanted to cause trouble—heaven forbid that I should cause trouble here—I could have tabled dozens of amendments and delayed us. The fact that we are getting though the Bill relatively rapidly shows the good will of not just the Front Bench but the Back Benches on this side towards the coalition Government. Whether they deserve it is another matter, but they are getting it.

I come now to the discussion of reserved matters, which relates in some ways to the previous amendment. In my time in the Scottish Parliament—I think this will apply to other Members here who were Members of the Scottish Parliament—it was very frustrating that the SNP in particular would use up the limited time available, including government time, for discussion of reserved matters. These included foreign affairs and defence; they went on and on about these areas. It is understandable that they should discuss them where they impinge on some of the Scottish Parliament’s responsibilities, but it worried me that it restricted the time for discussion of very important matters.

We have devolved to the Scottish Parliament some of the major areas that affect the lives of people in Scotland, such as all aspects of education. However, there were no really detailed debates on it. The right reverend Prelate the Bishop of Chester would be astonished if he came to the Scottish Parliament and saw how little time it spends on discussing the details and development of education in the forum of the plenary sessions. Then there is the development of the health service, with telemedicine and all the new developments that are taking place; and social work and the links between it and education and housing. There are many issues that the Scottish Parliament should be discussing, but it never seems to get around to doing so. These are vitally important issues.

This is a related issue but it is slightly different. I also get the feeling that, as the SNP has moved into the ascendancy, first as a minority and now as a majority Government, it seeks to operate almost as a de facto if not de jure independent Parliament. It wants to take on more responsibilities and pretend or imagine that it is dealing with all these issues. I had occasion to raise this with Sir Gus O’Donnell, now the noble Lord, Lord O’Donnell, in a question about the Permanent Secretaries—first Sir John Elvidge and, more recently, Sir Peter Housden, who has gone native since he moved. He is from Shropshire originally, a lovely county of England, as I know only too well. They seem to be advising the Scottish Executive on how to move towards independence. They seem to be giving them all the advice, guidance and detail that they need and, in Sir Peter’s case, almost encouragement to move towards independence. I hope that Sir Jeremy Heywood—he has a more pragmatic and sensible view on this than Sir Gus O’Donnell, but perhaps I should be careful about saying that—will look at things in a more pragmatic and sensible way and remind Sir Peter Housden that he is still a member of the UK Civil Service and still owes some loyalty to the Crown and the United Kingdom Parliament although he has been seconded to the Scottish Parliament and should not be dealing with these matters.

It is fair enough for the Scottish Parliament to consider reserved matters when it wishes to make representations on them to the Westminster Parliament, particularly to the House of Commons. However, for it to have debates on nuclear weapons, defence policy, foreign affairs issues, reserved aspects of welfare or on major economic issues which are still the responsibility of this Parliament and the UK Government, seems to me not just wrong in principle but a waste of the Scottish Parliament’s valuable time. I hope that we will send a message to it that—

16:30

[Lord Wigley]

Obviously we come to this question from different perspectives, but if the amendment were passed would it not preclude debate on matters such as industrial and trade links abroad, which are relevant to the economy; matters relating to cultural exchanges abroad, which I would have thought would certainly be part of the remit of the Scottish Parliament; and, indeed, debate on a host of other matters which link through to the European Union, where there is clearly an interest in Scotland having a voice in those areas?

[Lord Foulkes of Cumnock]

It is certainly not intended that the amendment should do that. It says,

“except on a motion to make representations to the United Kingdom Government”.

I should have thought that the areas that the noble Lord mentioned are ones on which the Scottish Parliament might wish to make representations to the United Kingdom Government. However, my noble friend may have a point in that the amendment’s wording is not as exact as it could be. There are areas where the Scottish Parliament contributes in this regard. For instance, when I was a development Minister, I encouraged it to take an interest in development matters, just as local authorities and private enterprise do. However, it is a different matter when the Scottish Parliament tries to deliberate on policy in relation to these issues.

This is a difficult area and the noble Lord, Lord Wigley, is right to point to a difficulty. Nevertheless, this Parliament is very careful not to talk about areas that are devolved to the Scottish Parliament. We are sensitive—perhaps sometimes oversensitive—about not dealing with those areas. As I think my noble friend Lord Sewel said in an earlier debate, we still have the right to legislate on any of them. If we wanted to, we could override the decisions of the Scottish Parliament and tell it what to do. However, we do not do that. We are very sensitive and very cautious, perhaps even oversensitive, as I say, but the Scottish Parliament does not reciprocate that sensitivity and caution as regards trampling on reserved areas.

The noble Lord, Lord Steel, will recall that he made the original ruling about the areas that could be discussed. That gave the Scottish Parliament an opportunity to discuss certain areas which it has subsequently expanded and exploited to a degree which was not intended at the time that the noble Lord made that ruling when he was Presiding Officer. I hope that we can send a message to the Scottish Parliament that it should respect our reserved areas just as we respect the devolved areas.

[Baroness Liddell of Coatdyke]

Perhaps I may make a brief intervention in support of my noble friend’s amendment. I, too, should declare an interest. I was at the famous party also, and if I had thought that visiting a football park could be so much fun, I might have gone before now.

I support the amendment because I am particularly exercised about the extent to which the reserved area of foreign affairs is often affected by debate in the Scottish Parliament, and at some of the attitudes that are adopted by Members of the Scottish Parliament as they go abroad. In particular, in the English-speaking Commonwealth, where BBC News, BBC Parliament and Sky are available, the interlocutors among us who have been practitioners in foreign affairs are perhaps watching debates in the Scottish Parliament or are picking up stories on foreign affairs that come out of it that can make life difficult for our people who are involved in sometimes sensitive negotiations. Usually, such debates are set against a background of imperfect knowledge as to why issues are being raised and discussed.

My noble friend Lord Foulkes made a valid point when he said that we go to great lengths in this Parliament to ensure that we do not trespass on devolved affairs. Since the beginning of the Scottish Parliament, there has been a laxness of attitude to straying into reserved areas. I am not suggesting that Members of the Scottish Parliament, be they in the Scottish Government or otherwise, should be grounded, but I ask your Lordships to take into account that one of the conventions of this Parliament is that when you travel abroad you do not criticise your own Government, even if it is a Government of a different colour to the party that you are a member of. That can increasingly be undermined by interventions from people who do not owe any loyalty to the concept of the foreign policy of the United Kingdom.

This may seem an arcane part of the debate and, without doubt, it will be portrayed as carping about the magnificent foreign policy of the Scottish Parliament, but there are men and women around the world today doing very difficult jobs in sometimes difficult circumstances. They are not helped by voices off.

[Lord Maclennan of Rogart]

My Lords, I would not like it to be thought that the views expressed in the previous two interventions were partisan in any sense. I certainly identify with those comments.

It appears to me that if the principle of subsidiarity distributes powers up and down, there should be clear and at least conventional understandings as to the limitations of interventions in respect of matters that are principally for one tier of government. This is not an absolute distinction. In the Lisbon treaty affecting the governance of the European Union, provision has been made for national Parliaments to participate in dialogue with the institutions of the EU about matters in which they are interested. Of course, we have in this House a Select Committee on European affairs and we offer thoughts and advice, but do not attempt to give any impression—and I believe we do not—that we are actually responsible for the matters that are being decided upon. Too often, the voices expressed, particularly by the Scottish National Party, attempt to give that impression.

Although it may not be a requirement that we lay down the law, as it were, it is a worthy motive that inspired the amendment and it emphasises what should be a clear convention. If the Scottish Parliament or any part of it, or a majority in it, want to engage the Government of the United Kingdom in discussion, it would be sensible to adopt the noble Lord’s amendment—and I hope that Members of the Scottish Parliament will take note of these recommendations.

[Lord Sanderson of Bowden]

My Lords, I raise one point on the amendment, which is slightly wide of the purpose and message of the noble Lord, Lord Foulkes. Can my noble and learned friend explain why energy is a reserved matter in the Scotland Act, but, because planning powers are devolved to the Scottish Parliament, the Scottish National Party Government see fit to do nothing about the Torness nuclear station and others in Scotland? After all, when I was happy to be in government dealing with the Electricity Bill, we managed to include powers for the interconnector to send nuclear-generated electricity south of the border. To my mind, that will stop unless something can be done to reverse that decision. It seems a total anomaly in the Scotland Act that a reserved matter such as energy cannot be fulfilled for nuclear energy because of the planning powers of the Scottish Parliament.

[Lord Forsyth of Drumlean]

My Lords, just to show that the noble Lord, Lord Foulkes, and I have not formed some kind of alliance for the purposes of the Bill, I do not agree with the amendment. I agree with the sentiment, which is that the Scottish Parliament should, in so far as is practical, confine its activities to its responsibilities, but to try to write that down is capable of being interpreted as trying to gag the Parliament. I can imagine circumstances in which it might wish to discuss things that are not within its immediate bailiwick and which might not be for representations to the United Kingdom Government. For example, were I a Member of the Scottish Parliament at the moment, I would want a debate on how the Bank of England, rather than the Bank of China, could become the lender of last resort to an independent Scotland. Under the amendment, it would be impossible for one to have that debate. As the First Minister has raised that startling question in the past few days, it would be entirely appropriate for people to raise such issues.

On a more serious matter, at the end of the day, this House and the other place work on the basis of convention. A convention is that we do not discuss devolved matters, and that is respected. That relates to the leadership of the organisation. One of the tragic things in the Scottish Parliament, as the noble Lord, Lord McConnell, pointed out earlier, is that the leadership seems determined to upset the neighbours and to use that to achieve a political objective. It is fair enough to use the Scottish Parliament as a platform to make the case for policy and ideas and to try to persuade the voters, but to use it as a platform in order deliberately to create dissent and division is not the purpose of it. I suspect there is nothing that we can do by way of passing amendments to the law that will change that. To change the way in which the Parliament operates it is necessary to change the calibre and nature of the leadership in the Parliament itself.

[Lord Boyd of Duncansby]

My Lords, we recognise the frustrations that have been expressed here, especially that this House and the other place have a self-denying ordinance and convention that we do not discuss devolved areas, but that is not respected in the Scottish Parliament. Nevertheless, there are three particular problems with the amendment.

16:47

First, it seems to me pretty difficult to put down on paper a line that states that you can talk about this issue but not that one. If I may say so, the intervention from the noble Lord, Lord Sanderson, highlights that. It is true that energy policy generally, though not in renewables, is reserved to the United Kingdom Parliament. It is not just powers under Section 36 of the Electricity Act but other significant powers in relation to nuclear power that are devolved executively to the Scottish Parliament. One would not wish to stop it discussing nuclear power in that context. Similarly, one can make a case in relation to nuclear missiles and their stationing in Scotland. It has economic and social consequences for the area in which they are situated and certainly it would be difficult to discuss the consequences without being able to state whether one was for or against nuclear weapons as a whole. It is equally the case with economic issues. The noble Lord, Lord Forsyth, makes an interesting point about the Bank of England, but more generally one has to be able to discuss the wider economic context in which these issues apply. That is the first point. It is difficult to draw the line.

The second point is that, with the greatest respect, I do not think that the amendment cures the problem, as it states,

“except on a motion to make representations to the United Kingdom Government”.

I suspect that every discussion of reserved matters will be a “motion to make representations” about all sorts of reserved matters.

The third is that, whatever the rights or wrongs of the original position of the Scottish Parliament, I very much agree with the noble Lord, Lord Forsyth, that it would be wrong to try to put the genie back in the bottle by now saying, “You can’t discuss what you have been discussing for the last 10 years or so under successive Administrations”. That would be seen very badly in Scotland, so with regret, I cannot support the amendment.

[Lord Wallace of Tankerness]

My Lords, in responding to the amendment moved by the noble Lord, Lord Foulkes, I am very tempted to adopt the argument of the noble and learned Lord, Lord Boyd of Duncansby, who made the case very cogently. Of course, there is a clear distinction in many cases with regard to reserved matters. I am coming to the point raised by my noble friend Lord Sanderson which was picked up by the noble and learned Lord, Lord Boyd, as to what is reserved. It is not just that the genie is out of the bottle but paragraph 2.5 of the White Paper, published in 1997 as a prelude to the referendum and the Scotland Bill and Act states:

“The Scottish Parliament will also be able to examine devolved matters and debate a wide range of issues of interest and concern in Scotland, whether devolved or reserved”.

My recollection of the debates all those years ago was that it was understood that there would be such debates.

I also seem to recall in the early days of the Scottish Parliament, with our fledgling coalition between the Labour Party and the Liberal Democrats, that the Scottish National Party Opposition liked nothing better than to identify a reserved matter at Westminster where the Labour Party and the Liberal Democrats were on opposite sides of the argument. The SNP would wish to debate those Motions to try to drive wedges through the coalition and we usually found some way out, either by having no executive line or by tabling an amendment recognising the position of both parties. After a while the SNP gave up because it realised that it was not having the desired effect of driving a wedge between the coalition partners.

On occasions it will be necessary for the Scottish Parliament to discuss reserved matters when changes have been made that have an impact in Scotland. For example, in November last year the Parliament debated maritime safety and coastguards. I certainly share the view of the noble and learned Lord that it would be allowed if it was making representations to the UK Government. One can imagine many Motions starting with the words, “This Parliament calls on the United Kingdom Government to”, for example, “not allow the Bank of England to become the bank of last resort”, or whatever. It would not require too much ingenuity to do that.

The noble Lord, Lord Foulkes, had ministerial responsibility for international development matters in the previous Administration. While that area was a reserved matter, none the less there was a Scottish interest that was considered legitimate. I pay tribute to the work that was done in the then Scottish Parliament and Executive by the noble Lord, Lord McConnell of Glenscorrodale, in taking forward and developing a relationship between Scotland and Malawi. That was thought all round to be positive and helpful.

The noble Baroness, Lady Liddell, rightly highlighted the difficulties that people sometimes have in not knowing what the relationship is between the Scottish and Westminster Parliaments. They might read things into debates on foreign policy. Therefore, it is important that when people engage in matters of such sensitivity in whatever forum, they do so in a measured and constructive way. I remember—and not just because I took part in it myself—that one of the best debates in the Scottish Parliament was in March 2003, on the eve of the military action in Iraq. The view was that everyone else was talking about it so it would look very odd if the Scottish Parliament did not. There was no line from the Executive because the Labour Party and the Liberal Democrats took different views. It is worth recalling that I moved an amendment on behalf of the Liberal Democrats that opposed intervention in Iraq. Because of the myth that has built up, it is worth remembering that the Scottish Parliament approved military intervention in Iraq in its vote in March 2003, ahead of the event happening. However, by all accounts at the time, it was a good debate.

There will be occasions when there is an interweaving of the issues. My noble friend referred at Second Reading to the question of energy, which is a reserved matter. Renewable energy has been devolved. As the noble and learned Lord, Lord Boyd, indicated, powers under Section 36 of the Electricity Act give Scottish Ministers substantial powers with regard to the licensing of power stations. There is a connection here—even an interconnection—which makes it important that both Parliaments and Governments must co-operate in trying to ensure that, where there is shared responsibility, the issues are properly addressed.

[The Duke of Montrose]

My Lords, perhaps my noble and learned friend could help me. As time has passed and habit has developed, we have found that the Scottish Parliament can discuss anything that it wishes, and express opinions. If something like the amendment of the noble Lord, Lord Foulkes, was passed, it would be limited to things that it wished to refer to this Parliament. Of course, discussion on the question of a referendum is probably something that the Scottish Government could say was referable to this Parliament. My noble and learned friend talked about the resolutions that were passed by the noble Lord, Lord McConnell of Glenscorrodale, on helping Malawi. Is there any limit to the amount of money that the Scottish Government can spend on things that are not devolved? It would be interesting in particular to know how much money they would be allowed to spend on a referendum. My noble and learned friend will know that there is an 80-page Bill attached to the consultative paper that was produced by the Scottish Parliament. It did not just drop out of the sky in a pre-formed manner. A great deal of time and expense was put into it.

[Lord Wallace of Tankerness]

The first thing I will say in response to my noble friend is that this is not something that has just grown up over the years. As I indicated, it was anticipated from the outset—in the White Paper in 1997—that there would be this opportunity. On the specific case of Malawi, there is a provision in the Scotland Act that allows Scottish Ministers to give assistance to UK Ministers and the UK Government. The co-operation at the time between the international development department and the Scottish Executive allowed that to proceed.

My noble friend raised an important point about a referendum. The United Kingdom Government made it very clear, in our consultation paper of 10 January, that the Scottish Parliament cannot legislate on reserved matters, including on an independence referendum. We have also indicated a preference for a Section 30 order, as have the Scottish Government. By the very nature of a Section 30 order, it deals with things that are currently reserved. One of the earliest was on railways. Therefore it is inevitable that there will be some expenditure and some legitimate activity by Scottish Ministers, who have to discuss and negotiate the terms of any order—which, by definition, must relate to a reserved matter—but look forward to agreeing between the two Governments to put a Section 30 order to both Parliaments. That is clearly why it is important, not just in the context of a referendum but in the context of other areas where a Section 30 order has been used where there has been a transfer of powers from one Parliament to the other, that there is proper co-ordination and consideration. Indeed, in terms of a number of powers in this Bill, there has clearly been discussion between both Governments.

[Lord Forsyth of Drumlean]

Could my noble and learned friend help with the point that was raised by my noble friend the Duke of Montrose about the position in respect of expenditure incurred on matters that are not within the legal competence of the Parliament? Who is accountable for that? Is it the Permanent Secretary as the accounting officer, the executive members or the Members of the Scottish Parliament? What, if any, sanction is there if there is expenditure that is ultra vires?

[Lord Wallace of Tankerness]

My noble friend has tabled an amendment on this issue that we will come to. I suspect that the accounting officer must have responsibility in these matters. However, as I sought to indicate, it would be very perverse if the United Kingdom Government invited a response and a consultation and then said that it was beyond the Scottish Parliament’s competence to engage in it. My noble friend raises an important point, and we will come to his amendment, which will be a proper opportunity to look at that in more detail.

As I indicated, in the case made by the noble and learned Lord, Lord Boyd, it is very difficult to draw the line. It does not cure the problem, but it is not beyond the wit to come up with the appropriate Motion to put before the Scottish Parliament. My noble friend Lord Forsyth and the noble and learned Lord, Lord Boyd, made the point that the genie is out of the bottle. Indeed, it was intended as long ago as the original White Paper that there should be an opportunity to debate these reserved matters. In these circumstances, I invite the noble Lord, Lord Foulkes, to withdraw his amendment.

[Lord Foulkes of Cumnock]

I have found this debate very helpful, although it pointed out that my amendment is less than perfect. A lot of interesting issues have been raised, not least that raised most recently by the noble Duke, the Duke of Montrose, and picked up by the noble Lord, Lord Forsyth, because according to this consultative document written submissions have to go to the Elections and Constitutional Development Division at Victoria Quay. I remember asking a number of questions and, no doubt, some MSPs are still asking questions about how many civil servants there are in these divisions dealing with breaking up the United Kingdom. They are spending taxpayers’ money to employ officials to move Alex Salmond’s dream a bit closer. The noble Lord, Lord Forsyth, asked a good question, which needs to be pursued, about how much money is being spent on that and whether it is ultra vires. That is, no doubt, something that we will be taking up on another occasion. It is a very serious matter. It is not just a question of printing the document; it is a question of the civil servants who could be better employed dealing with education, which is pretty ropey and not being dealt with in a perfect manner—let us put it that way—in Scotland at the moment, or with the health service, which is under pressure in Scotland. It would be better to use that money to employ nurses, teachers and policemen rather than these civil servants. I hope the noble Duke, the Duke of Montrose, and the noble Lord, Lord Forsyth, will pursue this important matter.

17:00

The other thing that came out in remarks made by the noble Lords, Lord Sanderson and Lord Forsyth, the noble and learned Lord, Lord Boyd, and others is actually how much devolution already exists. We sometimes forget how much power has been devolved to the Scottish Parliament and the Scottish Executive. It is a wide range, relating to a number of areas, not to mention transport: the Scottish Executive have responsibility for the Scotrail franchise, a huge, billion-pound operation in Scotland; they also dealt with the relatively recent extension of the Scotrail franchise. There is an awful lot of devolution that is seldom talked about or understood.

There is a lot of sentiment behind this amendment, as expressed by the noble Lord, Lord Maclennan, and my noble friend Lady Liddell, and some deep concern about the way in which the boundary is being pushed beyond where it should be. However, in practical terms, I accept the advice of—I keep calling him my noble friend—the noble Lord, Lord Wigley, the Minister and particularly my noble and learned friend Lord Boyd, who in his brilliant demolition of my amendment showed what a marvellous Minister he will be after the next election. It was a perfect one-two-three, the perfect demolition: three serious points and you are finished; your legs are knocked from under you. After that demolition job by my very good and noble and learned friend, Lord Boyd, I have no alternative but to withdraw this amendment.

Amendment 7 withdrawn.

Clause 7 : Partial suspension of Acts subject to scrutiny by Supreme Court

Amendment 8

Moved by

[Lord Selkirk of Douglas]

8: Clause 7, page 6, line 13, leave out “The Presiding Officer” and insert “A law officer making a reference under subsection (1)”

[Lord Selkirk of Douglas]

My Lords, I will speak to Amendments 8 and 11. In seeking to speak earlier, I was confusing Clause 7 with Amendment 7; I was not trying to hurry up the noble Lord—which would have been impossible in any case.

The purpose of Amendments 8 and 11 is to include the law officers—it could be the Attorney-General, the Advocate-General for Scotland or the Lord Advocate—among those who would be responsible for publishing a reference of a part of a Bill to the Supreme Court. The Bill lays down that it should be the Presiding Officer who should publish a notice of the reference to the court in the Edinburgh Gazette, and in such other ways as the Presiding Officer considers appropriate. As the reference should probably be made in most cases by one of the law officers, surely it is appropriate that it should be his or her responsibility to publish the fact that a reference has been made; for example, by putting it on the departmental website. The amendment ensures that the Executive take responsibility for publishing references made by them, thus showing a respect for the doctrine of the separation of powers.

I notice that the Minister has put down Amendments 9 and 10, which may achieve very much the same objective. If I am correct in that assumption, and they fulfil the same purpose but rather better—or at least are better expressed—I will not insist on these amendments and will withdraw them. In any case, I very much look forward to hearing what the Minister has to say.

[Lord Boyd of Duncansby]

My Lords, this group includes a notice in my name and that of my noble friend Lord Browne about Clause 7 standing part of the Bill. I will start with that and deal with the other amendments in due course.

Clause 7 introduces a new mechanism of a limited reference of a Bill to the Supreme Court to determine whether certain provisions of the Bill are within the competence of the Scottish Parliament. At present, once a Bill has passed through all its stages in the Scottish Parliament, it is for the Presiding Officer to present the Bill to Her Majesty for Royal Assent. However, before the submission for Royal Assent, there is a 28-day period during which the law officers—the Advocate-General, the Lord Advocate and the Attorney-General—can consider the Bill and if so advised refer it under Section 33 of the Scotland Act to the Supreme Court on a question as to whether any of its provisions is within the competence of the Scottish Parliament. Under Section 33, the whole Bill is referred and there is no mechanism to refer only certain parts of the Bill. Even if only one part is thought to be outwith the competence, none of it can be commenced until that issue is disposed of.

That explanation of the effect of a reference under Section 33 perhaps sets out the argument for the Government’s proposals in Clause 7. However, there are serious concerns as to how this will work in practice. I hope that this debate will draw out some of the rationale behind their proposals. To date, there has been no reference under Section 33 to the Supreme Court of a Scottish parliamentary Bill.

It might help if I briefly set out the internal procedures put in place during my time as Lord Advocate to ensure that Scottish Bills were within the competence of the Parliament. A Bill introduced into the Scottish Parliament by a Scottish Minister must be accompanied by a statement under Section 31 of the Scotland Act that in his or her opinion the Bill is within the legislative competence of the Parliament. Members of this House will be familiar with that kind of statement because all Bills presented here are accompanied by a statement made under Section 19(1)(a) of the Human Rights Act. The Scotland Bill is no exception to that. Therefore, there is a certificate, as it were, on all Scottish Bills which are put into the Scottish Parliament.

Certainly, in my time as Lord Advocate, no statement would be given by a Minister without their having sought the advice of the law officers that it could be made. I cannot speak for present procedures and it is possible that they have changed, although I have no reason to think that they have. Nevertheless, there are in place substantial internal procedures to ensure that Bills are within competence. In reaching a view on the competence of a Bill, there were a number of procedures. Those who were Ministers at the time will recall the passporting arrangements whereby there was a process with the Minister for parliamentary business and the Lord Advocate to have what in the UK Government would be a legislation committee—certainly, when I was Solicitor-General there was a legislation committee—which considered all the issues that were thrown up by the Bill, including legislative competence.

In addition, officials from the law officers’ departments were in constant touch with each other. We would talk to officials within the Advocate-General’s office and, for that matter, the Attorney’s office. Officials in the Scottish Government Legal Directorate would also engage with relevant departmental officials—for example, in the Home Office—to ensure that issues were identified at an early stage.

The role of the Presiding Officer is very important. The noble Lord, Lord Steel of Aikwood, will have had first-hand knowledge of that. The Presiding Officer must decide whether a Bill presented to the Scottish Parliament is within the competence of the Parliament, although I think I am right in saying that the standing orders allow for that decision to be overridden by the Parliament, but nevertheless it is an important element. Again, contacts were made between the office of the Presiding Officer and the law officers to ensure, as far as possible, that any Bill presented was within competence.

On amendments to Bills as they proceed through Parliament, it is true that not all amendments were referred to the law officers, but those that might cause an issue again were referred. I can say that on more than one occasion I did make it known both within the Executive, as well as on occasion to the individual Member who had proposed the amendment, that if it found its way into the Bill, the question of legislative competence would arise and that I or another law officer might have to refer the issue of competence to what was then the Judicial Committee of the Privy Council and is now the Supreme Court. So my experience is that a number of mechanisms are available for the detailed consideration of a Scottish Bill at all stages of its passage through the Scottish Parliament, and that issues of competence should be dealt with in that process. Even so, the Bill would be given another look once it had gone through all its processes. We usually took 28 days to do that, although there were occasions when there was an emergency and the law officers dispensed with the period of 28 days.

What this clause now proposes is that there will be a mechanism for referring part of a Bill to the Supreme Court for scrutiny. As I understand it, what will happen is that the Bill could still be given Royal Assent despite the limited reference while the issue is being considered by the Supreme Court. There is a mechanism for the remaining unaffected parts of the Bill to be brought into effect. However—I am looking for some guidance from the noble and learned Lord on this—as I also understand it, the Supreme Court would have a significant role in determining or making provision for how it would come into effect. I shall come back to that in a moment.

The Scottish Government have said that they are not in favour of this. An interesting point is the question of whether it is desirable to ask Her Majesty for Royal Assent to a Bill with disputed provisions in it. There may well be a point to be made about that, although perhaps not to be pressed too far. Nevertheless, there is also the question of what signal that would give the general public. Legislation on the statute book may not be in force but usually there is no question mark as to its validity. Moreover, the provision that:

“The Queen’s Printer for Scotland may publish notice of the reference and of the effect”,

may not be sufficient.

Clause 7 was not one of the recommendations of the Calman commission. I think it arose as a result of the commission’s general recommendation that:

“There should be a review of all other provisions in the Act that constrain the Parliament in terms of its procedures or working arrangements to ensure they are proportionate, appropriate and effective”.

I do not criticise the Scotland Office for having embarked on that, but the Government have identified through the review a number of areas, including this one, where they could make further provision.

17:15

In its evidence to the Scottish Parliament Bill committee, the Law Society of Scotland welcomed Clause 7 as “potentially viable” and made reference to concerns that the existing Section 33 power to refer legislation was not being used because it was considered too blunt an instrument, and that the effect of “freezing” an entire Bill was too much of a disincentive to a law officer making such a reference. It is unfortunate that this evidence was perhaps not probed slightly further. As Lord Advocate, I took the view that reference of a Bill under Section 33 to the Supreme Court was a quasi-judicial function. If I reached the conclusion that a provision of the Bill was outwith the competence of the Parliament, I would have felt obliged to refer the Bill to the court, notwithstanding the effect on the other provisions. I know that some lawyers, judges and academics have lamented the fact that there have been no references, because they believe that references would have helped clarify some of the issues around the reserved devolved areas. However, I never thought that it was my role to refer Bills for academic purposes and to allow lawyers to argue obtuse points of law in the Supreme Court. It is there for a particular purpose to allow policing of the provision.

In his evidence to the Scottish Parliament Bill committee, Richard Keen QC, the dean of the Faculty of Advocates, expressed concern that the ability to bring into force certain provisions of a Bill while others remained suspended might be contrary to the will of the Parliament, which may have passed a Bill due to checks and balances between parts of it; that is, Parliament would not have legislated in respect of one part of the Bill without the benefit of the check or balance provided by another. He went on to suggest that a way of resolving it would be to allow the order bringing in the non-referred part to be subject to the affirmative procedure, so that Parliament had an opportunity to consider whether it should be brought into force without the other bits. However, his evidence to the Scottish Parliament Bill Committee highlights a concern that is a theme also in the committee’s report; that is, that you in that way affect the coherence of a Bill.

The Scottish Government have questioned the workability of the provisions given that a large part of the Bill in question could be rendered incoherent by the suspension of individual groups of clauses. They also raised serious concerns over what they saw as a significant departure from democratic practice in giving the Supreme Court powers to determine the commencement of provisions passed by the Scottish Parliament, powers which were usually the monopoly of Ministers. The Bill Committee, in a majority report, recommended that the clause be removed from the Bill altogether.

I shall come back to the issue of principle in a moment, but perhaps I may turn to the detail of the amendments, which in a way highlights some of the particular issues. The Government’s amendments expand further the discretion that the Supreme Court would have in relation to the orders that can be made by Scottish Ministers. Once there has been a partial reference to the Supreme Court, and if it decides that any of the provisions are within the legislative competence of the Parliament, the Scottish Ministers can make an order. However, and this is the important point, the court may order that any provision is not to come into force until such time as the court decides, prohibit Scottish Ministers from making an order until the court appoints a time, and require persons as the court considers appropriate—so that is anyone—to take such steps as the court considers appropriate to bring the court’s judgment to the attention of persons affected by it. So the court is given a significant role in areas which are usually the preserve of Ministers; they are, effectively, executive functions. As I understand the amendments—no doubt the noble and learned Lord will explain them in greater detail—the court can also now provide that the time limits within the Interpretation and Legislative Reform (Scotland) Act in relation to orders may be overridden at its discretion.

In summary, there are serious questions as to whether this provision is necessary. The only real evidence is a concern from the Law Society—which is not backed up by any issue in relation to any Act—that references may not have been made to the Supreme Court because all the provisions would have to go there. Of course one understands that, if it is only a small point in a Bill, putting it all there may be seen as a bit of a blunderbuss. Nevertheless, given the concerns of the Scottish Parliament and the lack of evidence of a problem, does the noble and learned Lord consider that this should proceed into the Bill?

On the amendments tabled by the noble Lord, Lord Selkirk, clearly it is right that the person who makes the reference should be responsible for the publicity. Whether that is achieved through amendments brought forward by the noble Lord or by the Government at some stage in the future, I would certainly support them if this clause stood part of the Bill.

[Lord Wallace of Tankerness]

My Lords, it has been amply demonstrated by the remarks of the noble and learned Lord, Lord Boyd, that, as things currently stand, whole Bills can be delayed—possibly for months—should only a single provision be referred to the Supreme Court to determine whether it was within legislative competence. Section 33 of the Scotland Act 1998 contains a power to allow the law officers to refer Bills passed by the Scottish Parliament to the Supreme Court to determine whether they are within legislative competence prior to Royal Assent to the legislation.

The Scotland Bill provides the Government with an opportunity to re-examine this power. Indeed, as the noble and learned Lord indicated, the Calman recommendations encouraged a general sweep-up, and so within the Scotland Office and the Office of the Advocate-General we looked at all the different matters that had arisen and at where there were opportunities to amend, and some of these are reflected in other parts of the Bill.

It is very helpful that the Committee has been informed by the noble and learned Lord, from his many distinguished years of experience as Lord Advocate, as to how the process works. I should put on record from the UK Government’s side that officials in my department talk day in and day out to officials in the Scottish Government’s legal department on proposed Bills and orders to ensure that they come within competence. They discuss particular issues, and sometimes, when it is found not possible to get a solution under the legislation to be passed by the Scottish Parliament, orders under Section 104 of the Scotland Act can be brought forward to give effect to certain provisions. One sometimes sees headlines about the more controversial issues. We should not lose sight of the regular and valuable work done by officials in respective Governments to try and resolve many of these issues.

Likewise, officials within my department monitor Bills as they go through the Scottish Parliament. In a similar way to when the noble and learned Lord was Lord Advocate and during the 28-day period, these matters were looked at in my own department and ultimately referred to me to decide whether to refer them to the Supreme Court under Section 33. I share this thought with the noble and learned Lord. I recall from being a Minister when he was Lord Advocate the thoroughness with which that was done. Yet shortly after I took up office as Advocate-General, a case came before the High Court of Justiciary involving the competence of an order of lifelong restriction when someone had been convicted of an offence solely under the Firearms Act. That is of course a reserved matter. The question was whether the order was competent. The general view was that it was not, and ultimately the Crown did not defend the appeal. One of my officials said, “Who was the Minister who signed the original Bill as being competent?”. I had to hold my hand up, but I will not say who the law officer was who gave me that advice. It is fair to say that the other parts of the Bill stand with regard to the order of lifelong restriction and to offences that were either common law or related to devolved matters. That underlines the fact that a considerable amount of effort and work go into this.

With this clause, we sought to prevent unnecessary delays to Bills the majority of provisions of which are considered to be within the competence of the Scottish Parliament. In these circumstances, the affected Bill would be submitted for Royal Assent by the Presiding Officer, while the disputed provisions would not come into force until the Supreme Court had reached a decision and Scottish Ministers had made the appropriate commencement order.

As the noble and learned Lord indicated, this power has not been used to date. As I have indicated, that is testament to the engagement between the UK and Scottish Governments, both under the current Administrations and previous ones. We do not really need to be reminded of how much both Parliaments enjoy, particularly in the field of criminal justice, so-called Christmas tree Bills to which bits are added here, there and everywhere. No doubt there is a need to address some recent development, or some official remembers a particular problem that needs sorting out. It would be regrettable if a Bill whose provisions for the most part were well within competence had one particular clause thought to be outwith competence and that had to be referred to the Supreme Court for a determination that held up the whole Bill. We wish to address that issue.

The limited procedure that we propose seeks to do that. I will deal with some of the amendments before addressing some of the points raised by the noble and learned Lord.

[Lord Stephen]

Before moving on, might the noble and learned Lord at this stage or later in his remarks take the opportunity to refer to an issue relating to the SNP Government’s proposed referendum Bill, on which he will be aware of very clear legal advice to the UK Government? Given the current procedures and how they might be affected by the proposals in this Bill, what is his understanding of the position within the Scottish Parliament on involving the law officers in Scotland if the referendum Bill moved forward?

If law officers were to advise the Presiding Officer that the Bill, or any other piece of legislation—the noble Lord, Lord Steel, will have much experience in this regard—was not legislatively competent, would that advice become apparent at any stage? Need that advice become public in any way? This is a matter of huge interest at the moment in Scotland.

17:30

[Lord Wallace of Tankerness]

To take the first part of the question, about the law officers, it is part of the Ministerial Code. We have tried to be very careful with regard to the referendum matter, although we may not have managed it all the time, to say, “This is the view of the United Kingdom Government”, because the Ministerial Code says that it may not be disclosed whether or not law officers have been asked for advice, let alone what the advice may be. The Ministerial Code is written in almost, but not quite, identical terms for the Scottish Government, and I would therefore certainly not ask the Scottish Government to produce their legal advice. If they refused to produce it or even to disclose whether they had sought it, that would be totally consistent with the Ministerial Code. However, it is perfectly legitimate to challenge them, if they assert something, about the basis on which they assert it, without asking them if there has been legal advice.

[Lord Foulkes of Cumnock]

I always wonder what is meant by legal advice—legal opinion from a counsel, or whatever. Let us take an example. Let us say that the Lord Advocate went to Glasgow University and gave a learned lecture about the law on the legality of a referendum. Is that legal advice?

[Lord Wallace of Tankerness]

A public lecture is clearly not the same as advice that counsel would give to his or her client. This is probably not the place to debate the pros and cons of the Ministerial Code on legal advice, but legal advice is an opinion of the law officers given on a particular issue to a client department.

[Lord Foulkes of Cumnock]

Is it not reasonable to assume that if a law officer states a legal opinion in the course of a lecture at Glasgow University, that might just be the same as the legal advice that he gives a Minister in a Government?

[Lord Wallace of Tankerness]

I express the view of the United Kingdom Government; I shall leave it at that. There is good reason why the convention is there, and it has been quite rigidly adhered to by law officers of all Administrations, in Scotland and the United Kingdom generally.

The noble Lord, Lord Stephen, also asked about the legal advice given to a Presiding Officer. The Ministerial Code arrangements for that are clearly not the same. Off the top of my head, I could not say whether that legal advice would be made available or not, or what the response would be if someone wanted to FoI it. It might well be that it is advice given by a lawyer and that there are categories of exemptions for legal advice. It might be a matter that would end up in the courts—I am not going to express a view on it.

[Lord Stephen]

My point is that when my noble and learned friend and I were in government, I recall that we went to quite extreme lengths to make sure that a piece of legislation was within legislative competence. The noble and learned Lord, Lord Boyd, has already referred to those matters. Part of the hard work that was done was to ensure that a piece of legislation would get the approval of the Presiding Officer. My understanding was always that if there was a conflict with the Presiding Officer, we would work on the legislation and make sure that it was within legal competence, as defined by the Presiding Officer. From what has been said this afternoon, a Government can, as I understand it, in effect defy the ruling of the Presiding Officer and push forward with the legislation, and no one in the Scottish Parliament—indeed, no one in Scotland—would be aware that the Presiding Officer had been overridden. That is my understanding of what the noble and learned Lord, Lord Boyd, and my noble and learned friend indicated. I suppose the question is: in what way would it be known that, for example, the referendum Bill had been laid before the Scottish Parliament even though the Presiding Officer had not approved it as being within legislative competence?

[Lord Wallace of Tankerness]

Perhaps I can clarify for my noble friend that Section 31 of the Scotland Act 1998 is relevant in this regard. It states:

“A member of the Scottish Executive in charge of a Bill shall, on or before introduction of the Bill in the Parliament, state that in his view the provisions of the Bill would be within the legislative competence of the Parliament”.

Subsection (2) says:

“The Presiding Officer shall, on or before the introduction of a Bill in the Parliament, decide whether or not in his view”—

or in the case now, in her view—

“the provisions of the Bill would be within the legislative competence of the Parliament and state his decision”,

so the Presiding Officer has to state their decision as to whether it is within competence.

Let us take this away from the question of the referendum Bill, because our ambition here is not to get into that position; it is to reach an agreement, preferably on a Section 30 order. However, in general, the Presiding Officer has to decide whether the provisions of the Bill would, in their view, be within the legislative competence of the Parliament, and has to make that decision public. It is still the case that the Parliament could proceed to debate and process the Bill notwithstanding that, but there are obviously political ramifications. I could imagine some pretty lively debates if that was to be the case.

[Lord Boyd of Duncansby]

Could I clarify something which I think I asked? I am not entirely sure that I have got it over. On the provisions on the statement in Section 31, I said that in my time as Lord Advocate the law officer had to give their approval to that. That is a matter of public record and has been said many times before. I do not know whether that has changed in any way and I cannot recall whether it was part of the Ministerial Code that the Minister could not make that statement without the law officer's approval. If it was part of the Ministerial Code, I cannot think that it would be departed from. If it was simply an internal arrangement, it could of course have been departed from and one could speculate as to what procedures would now be in place.

[Lord Wallace of Tankerness]

The noble and learned Lord is right. We cannot speculate on what happens in an Administration of whom we are not members, but I can confirm what my noble friend and the noble and learned Lord said about the Administration of whom the three of us were members. The procedures and proceedings in these matters were as they have described.

To return to Clause 7, the limited reference procedure that we are seeking would therefore allow the law officers to refer to the Supreme Court only the provisions with which they have competency concerns, while, as I said, allowing the rest to go forward to Royal Assent. We believe that this is an appropriate and sensible method of helping to ensure that the work of the Scottish Parliament runs as smoothly as possible.

On the amendments tabled by my noble friend Lord Selkirk to Clause 7, through our engagement with the Law Society of Scotland the Government have, as my noble friend indicated, tabled amendments that reflect the intention behind his amendments. I wish to thank my noble friend for looking at this clause closely and for tabling his amendments. The government amendments have the same effect; I am advised that parliamentary counsel think that they have a more appropriate form of wording, but the effect is exactly the same. We therefore very much support the amendments that he has tabled, and I hope he will withdraw his amendment in respect of the other amendments that have been tabled.

[Lord Browne of Ladyton]

I am grateful to the Minister. He will understand why I seek to intervene at this stage. I think it would be appropriate to point out that in the House of Commons Tom Greatrex moved a very similar amendment that was rejected, or at least not supported, by the Government at that time. The gratitude of the House to those who have created this resolution to the problem needs to be shared by him as well.

[Lord Wallace of Tankerness]

Indeed, what we have here is a better outcome than what was there before. We reflected on what had been said, the representations that we had received and the amendments that had been tabled, and came to the conclusion that this was the best way forward on this point.

[Lord Boyd of Duncansby]

I was not quite sure if the Minister was now coming to an end. I wanted to press him on one point. Whatever view he may take of the utility of the measure that he is putting forward, what weight does he put on the view of the Scottish Parliament—whose legislation this is, after all—that it does not want this? Does he think that it is right to press it in the face of that opposition? Or does he think that, because he as Advocate-General and his successors in that office will have to operate this, this is something that the UK Government want, despite what the devolved Administration think?

[Lord Wallace of Tankerness]

I also need to address some of the points regarding the amendments in my own name. I indicated that this was intended to help give effect to Scottish Parliament measures where perhaps only one small part of a Bill was in contention, rather than hold them up and frustrate them. If that were to happen and a whole Bill was referred because there was one clause in it over which there was some doubt and some cause for a Supreme Court determination, I rather think the Scottish Parliament might have a view to express at the point. The Bill being held up might contain other measures that it was agreed on all sides were very valuable; indeed, the measure under reference might be one where there was agreement about the policy intent but some doubt about whether it was within competency.

The six amendments that the Government have put forward are intended to achieve a number of important changes as well as technical improvements. As I have set out, and my noble friend has made this point, we think that the law officer who is making the limited reference should be responsible for publishing notice of it, rather than the Presiding Officer.

Amendment 12 implements recommendations made by the Subordinate Legislation Committee of the Scottish Parliament. We are taking on board what it said in its report on the delegated powers in the Bill in its 10th report of 2011, Session 3, where it stated that it,

“could envisage situations where the delay in commencement of the specified provisions would possibly require further provision to be made to enable the Act to function as the Parliament intended”.

The new power in subsection (9) is added in response to those comments to give the Scottish Ministers the power to make appropriate consequential provision in that scenario.

Amendment 12 deals with a point that the noble and learned Lord picked up: it modifies Section 28 of the Interpretation and Legislative Reform (Scotland) Act 2010 in its application to commencement orders made by the Scottish Ministers under new Section 33A(6). The effect is that those orders, which are to be subject to negative procedure in the Scottish Parliament, must be laid for a minimum period of 40 days rather than the standard 28-day period before they can come into force.

It may be helpful if I also write to noble Lords about this; I spent many sessions trying to get my head around a lot of its implications. The measure is designed to eliminate the risk that the Scottish Parliament passes a negative resolution after provisions in a commencement order made under Section 33A(6) have come into force. In this scenario the resolution would have no effect, as the provisions commenced would by that time already have the force of law. By increasing the laying period to 40 days, if the Parliament passes a negative resolution within that period then, in terms of Section 28 of the 2010 Act as modified, the instrument is not to come into force after that resolution.

Amendment 12 also allows the Supreme Court to provide that an order under new Section 33A(6) may be laid before the Scottish Parliament less than 40 days before it comes into force, in acknowledgement that there may be circumstances where it is desirable to bring provisions of an ASP that were subject to a limited reference into force more urgently.

Amendment 13 amends Section 113 of the 1998 Act so that the useful supplementary order-making powers contained at subsections (2) to (6) and (11) of that section also apply to the powers of Scottish Ministers to make orders under Section 33A(6), (9) and (10). For example, that would allow a consequential order under new section 33A(10) also to make supplementary or incidental provision under the power at Section 113(4)(a).

17:45

Amendment 14 is a technical amendment, which makes consequential orders made by Scottish Ministers under new Section 33A(9) and (10) subject to negative procedure in the Scottish Parliament—that is, a type J procedure if one looks at Schedule 7 to the 1998 Act.

Amendment 15 is another technical amendment related to parliamentary procedure, which has the effect that where orders made by Scottish Ministers under new Section 33A(6), (9) or (10) add to, replace or omit any part of the text of an Act, they will be subject to affirmative procedure in the Scottish Parliament, rather than the negative procedure. Again, this amendment is tabled in response to a recommendation made by the Subordinate Legislation Committee of the Scottish Parliament.

The noble and learned Lord asked some other questions and referred to the evidence given by the dean of the faculty, Richard Keen QC. He suggested that the clause should be amended so that the non-referred part needs further approval from the Scottish Parliament before commencement. We considered this but believe that to do so would introduce a further layer of complexity to an issue that would, anyway, be dealt with in very practical terms. Where the provisions of an Act of the Scottish Parliament are to be brought into force by Scottish Ministers by commencement order, they will clearly consider the intentions of Parliament in deciding whether it is appropriate to commence non-affected provisions while the reference is still ongoing.

If a Bill contains provisions that are a clear set of checks and balances—a point made by the noble and learned Lord—the law officer making the reference can specify all those related provisions as being affected by the reference, and none will come into force until the Supreme Court has reached its decision. A limited reference will be made in relation to those provisions or parts of an ASP that are easily separable and unrelated to the rest of the ASP. However, if there are concerns over a short or single-purpose Bill, in which everything is interrelated, it would clearly be more appropriate to refer the whole Bill than to have a limited reference.

There also appears to be a contradiction between what was recommended by the previous Scotland Bill Committee and the Subordinate Legislation Committee; they did not sit well together. It appeared illogical that the previous Scotland Bill Committee should recommend that unaffected provisions of the Bill be commenced by an order subject to affirmative procedure, while at the same time the Subordinate Legislation Committee recommended that affected provisions should be commenced following a favourable Supreme Court decision by an order subject to the negative procedure. It begged the question of why a commencement order for those parts unaffected by a reference should be subject to a higher standard of scrutiny than those that had been referred to the Supreme Court.

As I said, I accept that this matter is complex. Perhaps I might write to the noble and learned Lord to set it out in more detail. I assure him that it has been gone into in considerable detail. He also asked about giving powers to the Supreme Court with regard to timing. The consideration there is that very often these might involve the rights of third parties or people who would be affected by the legislation. If legislation is to have an effect on people, they may not know the date on which a Supreme Court judgment will be made, so it is only fair that they should be given some notice. This at least allows that flexibility. As the noble and learned Lord will no doubt readily recognise, these matters would be the subject of representations made to the Supreme Court when parties were making their submissions.

I hope the noble and learned Lord will understand the purpose of the amendment, which is intended not to frustrate but rather to facilitate a Bill that may have just one or two clauses that cause doubt. It would allow the rest of it then to proceed. Effort has been made to include the right checks and balances so that it can be done with the minimum of complication. Perhaps that does not flow from what has just been said but it is certainly the intent.

I thank my noble friend Lord Selkirk for his amendment, the spirit of which—indeed, almost the text of which—has been picked up. In the light of the government amendments, I hope that he will withdraw his amendment.

[Lord Boyd of Duncansby]

I thank the noble and learned Lord for his explanation and his offer of a letter, which will help. We have had a long debate on this but some important issues and points of principle have been raised.

[Lord Steel of Aikwood]

I do not know whether I am interrupting at the wrong point but, after listening to the past hour of debate, I want to add that even those of us who are enthusiastic about devolution have to admit that it has created a field day for lawyers. We have lawyers galore all over the place. I was most grateful to the noble and learned Lord, Lord Boyd, for describing very accurately at the beginning of his speech the triple-lock mechanisms that exist, first, with the Executive’s legal advice, then with the Presiding Officer’s legal advice, and finally with the Advocate-General’s legal advice, to ensure that we do not get into difficulties with one Parliament attempting to legislate where it has no authority to do so.

I seem to recall that in the very early days of the new Parliament—my noble and learned friend and the noble and learned Lord, Lord Boyd, will correct me if I have this wrong—when my noble and learned friend was Minister of Justice and the noble and learned Lord was the Solicitor-General, we had real difficulty in my department because the law department was not fully staffed. Both noble and learned Lords will remember that we had a backlog of legislation from the days when my noble friend Lord Forsyth rightly said that he was effectively in opposition rather than in government, and we had all the reports of the Scottish Law Commission waiting to be put into effect. We had a flood of very early legislation, none of which was particularly controversial but all of which had to be gone through. I remember that the staff in my office were almost in a state of breakdown because they did not have the capacity to give the necessary legal advice, although it was eventually given.

My noble friend Lord Stephen asked whether the legal advice would be made public. The answer is no, not normally anyway. After all, legal advice is advice; the decision rests with Ministers and with the Presiding Officer. What would happen if there were an FOI request, I have no idea. It never happened in my time so I do not know the answer to that. However, it is important that everybody knows that these locks exist even though, as I say, they provide endless employment for lawyers on a grand scale.

The noble and learned Lord, Lord Boyd, mentioned emergency legislation. I hope noble Lords will forgive me if I mention a final anecdote, but I recall the occasion when we had to rush through a piece of emergency legislation following a decision of the court over the release of somebody from Carstairs Hospital. That occurred one summer. I remember it clearly. Her Majesty was at Balmoral. I was told that the Advocate-General could not possibly take the 28 days that he was normally allowed and that the measure would be rushed through. I was asked where I was going to be located in order to receive the Advocate-General’s advice, sign it off and send a letter to Her Majesty asking her to give Royal Assent. I was at home. I think that it must have been a Saturday as I was having lunch, untypically, with two hereditary Conservative Members of this House. That was not my normal custom but just happened to be the case on that occasion. A courier arrived on a motor bike from Edinburgh. He saw me through the kitchen window and so knocked on that window rather than going to the door. I opened the window, received the document, undid all the pink ribbon and the vellum, looked at the Advocate-General’s response and signed the letter to Her Majesty asking her whether she would be kind enough to give Royal Assent to this very important emergency legislation. I gave the letter back to the man on the motor bike and asked him, “Are you taking this to Balmoral now?”. He replied, “Yes”. I said, “Let me give you a piece of advice. When you get there, don’t knock on her kitchen window”.

[Lord Selkirk of Douglas]

I thank my noble and learned friend very much indeed for accepting the principle of the amendment. I hope I may say, by way of a one-sentence reply to the noble Lord, Lord Steel, that he reminds me of the famous parliamentary statement that lawyers should be elected only with so much circumspection, and therefore it will not happen very often.

Amendment 8 withdrawn.

Amendments 9 and 10

Moved by

[Lord Wallace of Tankerness]

9: Clause 7, page 6, line 13, leave out “Presiding Officer shall publish notice of the reference” and insert “person who made the reference shall publish notice of it”

10: Clause 7, page 6, line 16, leave out “the Presiding Officer” and insert “that person”

Amendments 9 and 10 agreed.

Amendment 11 not moved.

Amendments 12 to 15

Moved by

[Lord Wallace of Tankerness]

12: Clause 7, page 6, line 36, at end insert—
“(d) provide that an order under subsection (6) may be laid before the Scottish Parliament less than 40 days before it comes into force, despite anything in section 28 of the Interpretation and Legislative Reform (Scotland) Act 2010 (asp 10), as modified by subsection (11).(9) The Scottish Ministers may by order make such provision as they consider necessary or expedient (including provision amending the Act) in consequence of any delay by virtue of subsection (2) in the coming into force of any provision of the Act.
(10) If the Court decides that any provision of the Act is outside the legislative competence of the Parliament, the Scottish Ministers may by order make such provision as they consider necessary in consequence of that decision in order to give full effect to any provisions of the Act which are within that competence.
(11) In its application to an order under subsection (6), section 28 of the Interpretation and Legislative Reform (Scotland) Act 2010 (the negative procedure) has effect with the following modifications—
(a) in subsections (2) and (8), for “28 days” substitute “40 days”;(b) in subsection (4), omit “so far as the instrument is not in force on the date of the resolution” and paragraph (b);(c) omit subsection (7)(a).””

13: Clause 7, page 6, line 42, at end insert—
“( ) In section 113 (subordinate legislation: scope of powers), after subsection (1A) (inserted by section 3) insert—
“(1B) Subsections (2) to (6) and (11) apply also to the power of the Scottish Ministers to make an order under section 33A(6), (9) or (10).””

14: Clause 7, page 7, line 2, after ““Section 33A(6)” insert “, (9) or (10)”

15: Clause 7, page 7, line 2, at end insert—
“( ) In paragraph 3 of that Schedule (special cases)—
(a) in sub-paragraph (1)(a), after “type F, G, H, I” insert “, J”;(b) after sub-paragraph (2)(d) insert—“(da) instead of the type J procedure, the type L procedure shall apply,”.”

Amendments 12 to 15 agreed.

Clause 7 agreed.

Clause 8 agreed.

Clause 9 : Constituencies, regions and regional members

Amendment 16 not moved.

Clause 9 agreed.

Amendment 17

Moved by

[Lord Foulkes of Cumnock]

17: After Clause 9, insert the following new Clause—
“Review of electoral system for the Scottish Parliament
(1) The Secretary of State must make arrangements—
(a) for a committee to carry out a review of the electoral system used for elections to the Scottish Parliament and to make recommendations about that, and(b) for the publication of the committee’s findings and recommendations.(2) Arrangements for the establishment of the committee under subsection (1) are to be made no later than 1 May 2012, and the committee is to report no later than 31 December 2012.”

[Lord Foulkes of Cumnock]

My Lords, I must say that I found the previous debate fascinating. I do not think that I understood more than half a dozen words of it but I am sure that every lawyer present—and there are quite a few of those—understood it all. It was enlivened only at the end by the anecdote of the noble Lord, Lord Steel.

[The Duke of Montrose]

Move your amendment.

[Lord Foulkes of Cumnock]

I am very happy to do as the noble Duke, the Duke of Montrose, instructs me. After all, one of his ancestors was beaten by Cromwell. Is that right?

[The Duke of Montrose]

He was never beaten by Cromwell.

[Lord Foulkes of Cumnock]

My history is wrong; I shall have to check with the noble Duke afterwards.

The amendment would set up a general review of the electoral system for the Scottish Parliament, and it is about time that we had such a review. As was said in one of our earlier debates, the additional member system was very new to Scotland—and to the United Kingdom. It is similar to the German system but was very new to us. It was devised through multiparty discussions—not all parties were involved—as to what might be a suitable proportional system to ensure that no party would have an overall majority, an issue to which we will come back; and to ensure that all parties were properly represented in the Scottish Parliament.

However, because the system was new, my recollection is that it was recommended that there should be a review after two Sessions of the Scottish Parliament. We are now into the fifth Session and there has been no review. It is about time that we had one and, as I understand it, it is our responsibility to suggest, if not actually to set up, a review. It was recommended by the Arbuthnott committee, and I shall come back to that in a moment. If I may mention him, even one of the architects of the additional member system or at least one of the people involved in the discussions that led up to it, the noble Lord, Lord Steel—I blame other people for the system—has been reported as saying he believes that it is no longer fit for purpose. I have spoken to a number of people who have come to the same conclusion.

Let me deal with one or two of the problems. First, we have two types of MSPs—list Members and constituency Members. When the system was set up, the division between them was much greater than now. There has been some attempt to bring them together and to reduce the differences. Nevertheless, it is clear that constituency Members have the primary constituency responsibility. Regional Members, who have responsibility for a whole region, in the past few Parliaments have been increasingly requested and required to take on responsibility for individual cases referred to them. What is of course happening is that members of the public go first to their constituency Member who takes the matter up with officials and resolves the problems, if possible. However, some problems do not have a resolution. Those of us who have been Members of Parliament will know that problems can be intractable. However, the individual constituent does not necessarily think that and then says he will go over the head of the constituency Member to the regional Member. Later on, if the regional Member cannot deal with the problem, it comes to the MP. No doubt, if a senate were to replace this place, and if the MP could not deal with the problem, the constituent would go to the senator. That is a debate for another day.

There is a division between the types of MSPs. They have different workloads; there is overlap, competition and confusion between them. We heard earlier that some regional MSPs target constituencies. They set up offices and work in constituencies with a view to fighting the sitting MSP at the next election. The system seems almost designed for them to do that. Having two types of Members creates a problem.

Secondly, there is confusion in voting. Members will understand that and will have seen it happening. When you explain to members of the public that they have two votes, they find it difficult to understand the purpose of those two votes. It is difficult to explain their purpose. We in the Labour Party—those in other parties do exactly the same—say, “First vote for the constituency member and then vote for the party”, but it is inevitable that someone will say, “Okay, I’ll give my first vote to this Labour constituency member, but I like the Greens”, or the Liberal Democrats, “as well, so I will give them my second preference”. Sometimes there is confusion that it is a preference vote, which of course it is not; it is a different voting system.

Arbuthnott stated in his report:

“The Commission found that there were problems with the public understanding of the electoral system”.

The report states that especially confusing was the regional vote, which the public believed was a second preference vote. Survey data indicated that a significant proportion of people did not understand how seats would be distributed within the Scottish Parliament.

I now want to tell you briefly about my experience. I was asked by the noble Lord, Lord McConnell, when he was First Minister, whether I would help to lead the Labour campaign in the Lothian region. I agreed to do that. He said: “George, let's put you on the list”. I put my name into the hat and we had a ballot among Labour members in Lothian and, lo and behold, I came top of the list, so I was number one, on the understanding that never before had any Labour member been elected for Lothian. I told my wife that there was no way I would be elected. I told the Chief Whip here, because I was a Member of this House, “Don't worry, I will be here every day because there is no way I will be elected”.

I campaigned for the constituency members of the marginal seats to ensure that I was not elected. Imagine that. You are a candidate and you campaign for the constituencies just to ensure that you do not get elected. I did all my campaign work in two marginal seats: Central Edinburgh and Linlithgow, which we held. Unfortunately, we lost two seats that we thought were safe. I thought, “That doesn’t matter, the Greens always get two in Edinburgh, there is still no way that I will be elected”. However, the Greens did not do so well in that election. I was at the count walking up and down. The husband of Sheila Gilmore, who is now Member of Parliament for East Edinburgh, Brian Gilmore, who is head of the statistics department at Edinburgh University, came up to me and said, “George you’re going to get elected”. I said, “No, no, I’ve told my wife. I’ve told the Chief Whip”. Brian is the best statistician I know. I phoned Liz and said “There is a chance that I may be elected”. She said, “What?” I said, “I’ll phone you back later”. An hour later, she had had the chance to adjust to all that, and I left Steve Bassam until the following week. I was elected because of the system. I had not campaigned for myself. I had spent not one penny on the election. I produced no election leaflets whatever. I held no meetings at all for that election. It was astonishing, but there I was, a Member of the Scottish Parliament.

[Lord Steel of Aikwood]

That was your mistake: if you had done, you might not have got elected.

[Lord Foulkes of Cumnock]

I treat the noble Lord, Lord Steel, as a friend of mine; in fact, he was at the party as well. He will not be coming to my 80th, that is for sure—no, that is a very good point.

It illustrates the absurdity of it all. When I was a Member of Parliament for Carrick, Cumnock and Doon Valley, which we considered a relatively safe seat, I had meetings all over the place. I produced literature and spent almost the limit to make sure that I got elected. In 1997, I ended up with the largest majority in Scotland as a result. We worked hard to get elected. It seems absurd, having worked hard year in, year out to get elected as a Member of Parliament in that constituency from 1979 to 2005, I just floated in easily to the Scottish Parliament. It is a strange system.

[Lord Stephen]

Not having been invited to the birthday party, can I, perhaps unfairly, point out that the voting system was to be proportional, which was agreed through the constitutional convention? The Liberal Democrats, as always, proposed a fair and appropriate system—the single transferrable vote in multimember constituencies. My clear recollection is that the Labour Party, in conceding a proportional system of election, was prepared to agree to anything except the system that was being proposed by the Liberal Democrats. Therefore, it was the Labour Party that devised the system that we now have in the Scottish Parliament. I would welcome it if the noble Lord, Lord Foulkes, and other members of the Labour Party were now suggesting a fairer system of proportional representation. Perhaps the noble Lord will give his backing to the single transferrable vote.

[Lord Foulkes of Cumnock]

I was commending the noble Lord, Lord Forsyth, and David Cameron earlier for not being party political in terms of support for the union and for not looking for party advantage. As the noble Lord, Lord Stephen, will find out, I am doing the same in relation to this. I will come to that in a moment.

We were told by the architects—it is coming back to me now. It was not the noble Lord, Lord Steel, who was guilty, but probably Henry McLeish who was the architect; he is the guilty person. If he is not, he is getting blamed for it now, but I am sure that he is.

[Lord Maxton]

Some of us on the convention argued for first past the post under any circumstances. The then leader, Donald Dewar, agreed as a compromise to try to accommodate the Liberal Democrats, and one or two others, that there would be a proportional system. Some of us would still have much preferred a first past the post system.

[Lord Foulkes of Cumnock]

That anticipates another point. Whoever was the architect—I think that it was Henry McLeish and others of his ilk who said, “This system will never produce an overall majority for any party. Be reassured. Don’t you worry”. Look what we have—less than 45 per cent of the people who voted in that election voted for the SNP, yet it has a relatively substantial majority in the Scottish Parliament. It does not work. When I asked one of the other people, who I will not name, and who I have just remembered was also one of the architects, why this came about, he said, “Because the system is weighted in favour of the rural areas”. That was deliberate—not to ensure that nobody got an overall majority but that Labour did not get an overall majority. It was not done for party political advantage.

Like my noble friend Lord Maxton, I argued for first past the post. I am still arguing for it and will fight to keep it for the House of Commons. I know that some Members opposite will join in that fight. Let us keep it there; I wanted to have it for the Scottish Parliament, but we did not get that. I would like to have a review to go to first past the post but, to use a phrase that was used earlier in another context, the genie is out of the bottle, and I do not think that we can go back. I agree with the noble Lord, Lord Stephen, that if we are to have a proportional system and we have single transferable voting for local government, there is a logical case to have the same voting system for the Scottish Parliament and local government. It would simplify things. I am not advocating this but simply saying that there is a logical argument in favour of it that could be put to the commission that will be set up.

I would also argue that one dreadful thing that has happened is the way in which we now have completely different boundaries for Westminster, Holyrood and local government. It is confusing everyone. In Wales they hope that with the revision of Westminster boundaries they will get them to coincide again. I hope that something will be done in Scotland to get the boundaries to coincide again. Let us say that the commission was convinced by the arguments for the single transferable vote. We would then have a simplified electoral system, with two elected levels having the same system. If we could get the boundaries more contiguous, we would make things simpler for the electorate and do a great service.

I look to the Minister when I say that I hope that some consideration will be given to this. A lot of time has passed since the Scottish Parliament was set up. Many people have suggested a review. I had been led to believe in the corridors and the Lobbies that the Government were looking at this and moving in this direction. I hope that they will move relatively quickly, and I hope that the Minister will be as sympathetic as he was in his answers to my previous amendments. I beg to move.

[Lord Steel of Aikwood]

My Lords, unlike the noble Lord, Lord Browne, I will show some gratitude to the noble Lord for his very good party on Saturday night by supporting the amendment that he moved. My serious point is that he was right to say that we were promised, at the time that the Scotland Act passed into law, that there would be a review of the election system after a couple of Parliaments. This has not happened and I hope very much that, whether or not we agree the amendment, there will be such a review.

I would support a review for four brief reasons. First, there is the question that we discussed, and that I will not repeat, about the clashes between regional Members and constituency Members. Despite what my noble and learned friend said earlier in debate, I know for sure that it has been a problem in some areas. The second reason is the one the noble Lord referred to just now. Since the Scotland Act came into being, we have changed the electoral system for local government. People are now familiar with STV, which they were not at that time when my noble friend and others were pressing for it to be adopted in the Scottish Constitutional Convention.

I come to my third reason. I used to be a very strong supporter of first past the post. Partly because I was the only Member of the House of Commons who represented three counties, I felt very strongly about the relationship between a Member and his constituency. However, the way the Boundary Commission has operated in Scotland—not just in creating differences between Scotland and Westminster but within Scotland itself—is extraordinary. Constituencies no longer represent communities but arithmetic. For example, a chunk of Midlothian was thrown into the Borders at the last election, despite the fact that a public inquiry had stated that it should not happen. The old first past the post basis under which one represented a community has gone, because of the obsession with representational arithmetic rather than communities.

The fourth and final reason why I support an inquiry is that we now have in Scotland no fewer than four election systems that we invite the electorate to indulge in. We have first past the post for Westminster, a party list system for the European elections, STV for local elections and a regional list system for the Scottish Parliament. I cannot think of any democracy in the world where there are four different systems for different elections.

[Lord Maxton]

Of course, if the Government that the noble Lord supports have their way, we may well have a fifth system for elections to this place.

18:15

[Lord Steel of Aikwood]

The noble Lord must not tempt me to get on to that. Four is more than enough. That is in itself a very good reason why we should have a review of the whole electoral system. It should be objectively done. There is no party political gain to be had by anybody in this, but it is high time we had an independent look at how elections are run in Scotland.

[Baroness Liddell of Coatdyke]

My Lords, I can put on the record now that right from the start of the discussions about the Scottish Parliament, I was opposed to the voting system. It got to a stage where the minute I came into a room, eyes would glaze over. As a consequence, I lost the ability to make my arguments. To some extent, my opposition was based on recognition of the difficulty of having regional list Members and the problems that it would create for individual constituency Members where you had someone who could helicopter into your constituency and cherry pick the issues. It makes it very difficult even if it is a member of your own party who is the regional list Member. It makes it very difficult to run a consistent service as an elected representative. Time after time I was told that I was old-fashioned and that I was being tribal. My heart told me that I wanted first past the post, because that was the way that my party would win; but my head told me that for a new system of government, for devolution, we had to find some other way of doing things—but I was extremely unhappy with AMS. As the Minister knows, that is parallel to the system which operates in New Zealand, where there has just been a referendum and, ironically, they have voted to keep it.

Having said that, I agree with my noble friend about the hotchpotch of systems and the problems caused by non-contiguous constituency boundaries. In a couple of instances, I may have been responsible for that because of decisions that I took as Secretary of State. You do not always get the opportunity to take the decisions that you would want to take. However, I am opposed to the proposal that my noble friend has put forward—not because I am opposed to the idea of a review, but because I think that when you have been comprehensively beaten in an election, you do not turn around and say, “We’ve got to change this”. I accept that the Government of whom I was a member could have done something about a review, and the coalition could have done something about a review before the Scottish Parliament elections. Frankly, however, I think that we have missed the boat. It would be interpreted as the unionist parties saying, “We was robbed”. We have just been saying that we must be absolutely certain that the referendum is fair and transparent and that the decision will be accepted by the majority, which is very important. I think that we have missed the boat.

[Lord Stephen]

Would the noble Baroness be prepared to take a different view if the Scottish Government were in favour of a review of the voting system? My understanding is that the SNP Government would prefer a different form of voting system, perhaps even one in line with the system that the noble Lord, Lord Foulkes, might be persuaded to back, and similar to the proposals set out by my noble friend Lord Steel. If that were the case, would it not fundamentally change the argument that she has just made?

[Baroness Liddell of Coatdyke]

I thank the noble Lord for that intervention. It would change my position. I would snatch off their hand if they proposed a review of the voting system. I would be surprised if they wanted to do it now when the voting system has so decisively played in their favour and they have developed a sophisticated strategy of ensuring that regional list Members forensically target seats where there is a prospect of winning. My former seat of Airdrie and Shotts, which used to be one of the safest in Scotland, now has a SNP Member of Parliament because of that very forensic, very clever targeting of constituencies and issues.

It is with considerable regret that I say to my noble friend that I do not think that this is the time for this House or this Parliament to call for a review, because it would be misinterpreted. However, it is not often that I get a chance to say I told you so. There are one or two people, who will not be listening now, to whom I said that. It is a case of I told you so.

[Lord Forsyth of Drumlean]

My Lords, I hope I can persuade the noble Baroness to be a bit braver. We should not be too concerned about how people present it. The noble Lord’s amendment is not actually imposing anything, it is just saying that a committee should be set up to look at these issues.

I am told that I am supposed to be terribly grateful, as a Conservative, for the system of election that was put in place for the Scottish Parliament, and that I am the fellow who lost every seat when we had 8.5 per cent of the vote. I noted at the last Scottish elections that the Liberals’ share of the vote was down to 5 per cent; I think on the list system it was about 7.8 per cent. We never reached that particular nadir. The relationship with the number of seats that people win in Scotland because there is a four-party system is odd, to say the least. The nationalists have now got 45 per cent of the vote because of the way the system operates, like an avalanche, once a particular shift occurs.

There are a number of faults with the system. I will not repeat the arguments. Of course, one is this problem of having people in your patch trying to do you down, using constituency issues for that purpose. When I was the Member of Parliament for Stirling, one-third of my constituency had never had anything other than a Tory for as long as people could remember; one-third had never had anything other than Labour; the other third could go either way. This is going back to ancient times, but in 1983, even though I was a Thatcherite Tory and many of my constituents were not particularly committed to that view, you were respected as the Member of Parliament, and you made sure that you treated everyone equally, regardless of how they voted, and did your best. You were first and foremost the representative of your constituency.

I have watched what is happening in my constituency now, where you get different parties playing politics and constituents going to one after the other, and people trying to get stories in newspapers and using public funds to promote themselves, and undermining that relationship between the Member of Parliament and his constituents, which is an absolutely vital part of our system and which has been further undermined by the scandals over expenses and other matters. The whole system of being a Member of Parliament works—not because you have any real power but because when you send a letter on the headed notepaper, whether it is the Scottish Parliament or the Westminster Parliament, people sit up and take notice. I regret to say that is happening less effectively because of the damage that is being done and the fact that you have people playing politics.

Goodness knows—I will be tempted—if we are going to have elected Members of this House on a 15-year term, and the average lifespan of a Member of Parliament at the other end of this building is about eight years, that means we will have elected Lords who will last twice as long as Members of Parliament, and who will then be in a bigger patch, using their position to kill off all their opponents. I cannot think of anything worse. So there is an issue here that the noble Lord is right to identify.

There is something else I would like to say, which is probably going to get me into trouble with my party and upset a number of my colleagues. In this system, the way the list operates means that all you have to do to get into the Scottish Parliament is to make sure that you are in the right position on your list, as the noble Lord has pointed out. In my party, that means that all you have to do is get the membership to vote for you. If you are the incumbent and have been around for a long time, it is easier to achieve that because they know the name. Built into the system is something that gives the incumbent an advantage. That can be a good or a bad thing but the worst feature of this is that because you rely on the membership voting to give you your place on the list, you have a vested interest in having a declining membership. All political parties have suffered a lower membership. When I was Member of Parliament for Stirling, I used to recruit members. We had 2,500 members. Now we have 300. I thought, “What is going on in Stirling?”. Then I discovered that in the whole of Scotland we had 10,000 members. Yet we have got about 18 MSPs. We have a system that creates a self-perpetuating hierarchy who have an interest in having less and less contact with their constituents. If ever a system needs to be looked at and reformed, this is it.

[Lord Empey]

Perhaps I may say to the noble Lord that there is no perfect system. We use STV for local government, the Assembly and for Europe. While the same applies in terms of the selection of any candidate for any form of election having a small party that he or she can rely upon, the other ingredient that you have with STV is alphabetic. We have examples of people changing their names and using a hyphenated name—Aardvark-Bloggs or something like that—because they prefer to be at the higher end of the alphabet, and under STV they come first.

In my party, I have examples of councillors who have changed their names to double-barrelled names beginning with A. There is no absolute perfection in all this. People abuse any system and if the noble Lord wants to become Senator Aardvark-Forsyth, we look forward to that as well.

[Lord Forsyth of Drumlean]

I will take that as a speech in favour of first past the post. I should declare an interest because the first election I won was for a Labour ward on Westminster City Council. Of the three candidates, I was the only Conservative who was elected and I am sure that it was because my name began with F. That is certainly a good point to make.

[Lord Maxton]

Of course, we know the system that was described in Scotland. In 2007, the name on the list was Alex Salmond for First Minister. Therefore, it was not the party but his name, which begins with an A. Let us remember that he won by 47 votes in one seat in Scotland, which gave him the largest single party in Scotland. Perhaps we already know the system.

[Lord Forsyth of Drumlean]

I wish that I had been sharp enough to have worked that out in response to the noble Lord, Lord Empey. All parties look at this issue from the point of view of party advantage. If you are going to set up a commission to look at this, it has to be clear of the political parties but, ultimately, it has to be agreed among the political parties.

One of the most remarkable things that I have seen in politics was the Labour Party in control of the Scottish Parliament introducing the single transferable vote for local government. It destroyed the Labour Party’s hegemony in Scotland. It was an act of supreme self-sacrifice, which was clearly thought through in the interests of wider democracy—I am sorry but my tongue was stuck to my cheek. We have ended up with four systems, as the noble Lord said. I defy most candidates of all parties, if they knock on a door and ask, “Could you explain to me each of the electoral systems and how they work?”, to get an answer that has any degree of confidence or accuracy. The whole thing has become ridiculously overcomplicated.

The point about constituency boundaries goes to the heart of this idea of representation. The noble Lord, Lord Steel, says that we have lost all that. No, we have not. It is true that the reform of the House of Commons and the parliamentary constituencies Bill took not enough account of this very important reason. But it strikes me that we have 129 Members of the Scottish Parliament, which seems somewhat excessive. Looking at the numbers it would be possible to bring more logic, more coherence and more relevance to the people of Scotland. Moreover, if one is going to look at the electoral system, one ought also to look at the size of the Parliament and its relationship to Westminster and other bodies.

This is an excellent amendment which I do not suppose the noble Lord will press to a vote but I hope that, in responding, my noble and learned friend will consider how this can be dealt with, because there is no doubt that it is damaging to have all these systems operating in Scotland in a way that is not in the interests of the important relationship between elected representatives and their constituents.

18:30

[Lord McFall of Alcluith]

My Lords, I have just a few remarks to make on my noble friend’s amendment. I remember the then leader of the Labour Party, Tony Blair, saying to the Parliamentary Labour Party just after the Scottish elections that he did not realise that he had been so generous to the Conservatives in Scotland. He had revived them as a result of that issue.

Two issues are raised in this amendment. One is the alienation of the political class from the community, and the other is the community dimension. When I was elected in 1987, we had a percentage turnout in my constituency around the mid-70s. By the end it was down to 61 per cent, while the turnout for the Scottish Parliament was about 50 per cent. That is a big issue for us as politicians. We are alienating ourselves from the people, and the result is that that feeds disillusionment. Things were bad enough with the expenses scandal, but if we go on like this we will feed that disillusionment.

I remember talking many years ago in the European Parliament to an Irish politician, a newly elected MEP, so I said rather naively, “You must be quite tired and looking for a bit of a break”. “No”, he replied, “I was next on the list and I have just come in”. It struck me at the time that the link between the representative and the people of the community was broken, and that is a bad thing for politics and a bad thing for communities. We have to look at the alienation that exists at the moment, along with a loss of trust in the system and politicians.

The community dimension is very important because people are proud of the Member of Parliament who represents them and their interests. As others have said, Members are also proud in taking the interests of their communities to Parliament. The latest Bill which the Government have brought forward is indeed representation by numbers. In the long run we will suffer as a result of that situation.

I understand that there is no perfect system, but we walk into things with our eyes open. For example, the latest Bill the Government have put before us for House of Lords reform presents the possibility of Members being here for 15 years. It is obvious that they will feel that they are superior to the Members of the House of Commons as a result of that. Let us take the Finance Bill. The House of Lords cannot touch it, but that must be the first casualty because we will have elected Members here who have to go back to their constituencies. All politics is about priorities—it is about what is spent on health, education and transport. Can anyone say in all honesty that the people who are representatives here will not look at a Finance Bill as a result? If we pass the Bill, that will hit us like a train. We have an opportunity to be sensible about these issues and tie everything up. While I go along with my noble friend, I do not think that this is the time to put this forward. There are big issues on the agenda and I am grateful to my noble friend Lord Foulkes for raising them in his amendment.

[Lord Browne of Ladyton]

My Lords, I know my limitations and that I will be unable to match the gratitude of the noble Lord, Lord Steel of Aikwood, to my noble friend Lord Foulkes, but I will do my best. That is all I have to offer him. I thank him for bringing forward this amendment. I believe that he has made the case for a review of the electoral system used for elections to the Scottish Parliament. He made it by reminding us of the promise that the system would be kept under review; of the acceptance of the recommendations made in the Arbuthnott commission report in 2006; and, if I remember correctly, of the acceptance then that it would be appropriate to have a review of the electoral system for the Scottish Parliament following the May 2011 elections—which recommendation I recollect was accepted by Douglas Alexander, the then Secretary of State for Scotland. That acceptance may not have transferred to the new coalition Government and the present Secretary of State, but I suspect that if he reread Arbuthnott, he would come to the same conclusion in relation to that review as did Douglas Alexander.

For that reason, I accept that there is a case for a review. I was interested in the intervention made on my noble friend Lady Liddell by the noble Lord, Lord Stephen, who indicated that he had some reason to believe that the current leadership of the SNP in Scotland had welcomed the review and might be inclining towards the views of my noble friend Lord Foulkes about what system should replace the present one.

My noble friend expressed some surprise at that, but I am not surprised, because the SNP now has the constituencies. There is a tendency for a party’s view of the electoral system to reflect either its wish to hold on to the status quo or its desire to disturb it. That is exactly why my noble friend is right to suggest that the review needs to be carried out independently of politicians, and the noble Lord, Lord Forsyth, is right to support him.

Perhaps part of the problem with the present system was that it was a compromise agreement between political parties which had an objective to disturb the status quo. My own experience is that some of the concerns about the electoral system that is used for the Scottish Parliament are exaggerated, but I do not have comprehensive experience all over Scotland of how the system works. I know that people whose views I respect have concerns about it and they have been articulated here in our debate.

I suspect that the noble Lord, Lord Steel, is partly responsible for forcing upon the Electoral Commission a numerical priority. We have had two experiences of this in Scotland. One was in a review of boundaries for the Scottish Parliament elections, when my recollection was that the instruction that went out to the Scottish Boundary Commission was in its interpretation so restrictive that it took the basic building block and just applied it numerically from one starting point across Scotland. With one or two exceptions, none of its recommendations survived the appeal process or presentation to the sheriff principal because they were ridiculous in relation to communities. I remember the debates about the constituency boundaries and voting systems Bill, when my noble friends were queuing up to say that that is exactly what would happen if we forced that structure, or any part of it, on the Boundary Commission again through that legislation. So, in a sense, this legislative body has exacerbated the problem through that legislation.

I accused the noble Lord—I hope not too seriously—of being part-author of that problem. However, he may not have voted against the attempts that were made to ameliorate the effect or to stop it, but I have a recollection, certainly, of people from his Benches voting against the amendments that were tabled through the best endeavours of people on this side of the House who knew exactly how it would work and tried to prevent it happening. If it does happen, some people will have been the authors of their own misfortune by creating a separation between communities and constituencies.

We have yet to see how the review of constituency boundaries will work out but I predict confidently that when people realise how they will take effect in their communities, Members of Parliament of all parties will be screaming from the rooftops. Not only that, communities from all over the country will come to Members of Parliament and politicians and say, “What are you doing here? What have you done?”—and it will be interesting to see how many people stick by the arguments that they made during the passage of the Bill as a justification for doing this. However, that is perhaps another matter. I did not introduce the issue into the debate but I have taken advantage of the opportunity to make my point.

Having supported the general tenor of the debate—that the time has come for a review—I say to my noble friend that I do not think this is the vehicle for it. Earlier in the debate I understood the Minister to indicate, possibly in anticipation of this amendment, that the Government were minded to explore whether the time had come for a review; that they were going to do so in an appropriate way by consulting across parties; and that the voting system for the Scottish Parliament could be included if there was consensus and agreement for such a review.

That is, of course, the way in which we should proceed with all constitutional change; we should consult and seek consensus so that we can go forward. No political party owns the constitution and we all have a responsibility to preserve certain parts of it to hand on to future generations. It belongs to the people, not to us, and we should ensure that we do not seek party advantage out of a review of the constitution. If there is to be constitutional change in this area, that is the appropriate way to do it—not by, with all due respect to my noble friend, a provision in this Bill.

The structure that my noble friend has suggested has many of the right ingredients for a review. The timing that he proposes, however, would, if we pass the amendment, divert us from what should be the focus of our attention for that period of time and until the referendum in Scotland—that is, making the progressive, proper, forward-looking argument for keeping Scotland in the union; we should not use any of our resources for considering the system for electing Members to the Scottish Parliament. In my view—and I am afraid to say that this is where my gratitude to my noble friend runs out—this is the wrong vehicle. I prefer the Minister’s indication that it will be done in an appropriate way by a review instituted with some degree of consensus. The discussion needs to go beyond political parties into civic Scotland. It is the wrong time, but I am grateful to my noble friend for allowing this debate.

[Lord Wallace of Tankerness]

My Lords, the amendment moved by the noble Lord, Lord Foulkes, has generated a considerable amount of discussion on the merits or demerits, as perceived by noble Lords, of the present electoral system for the Scottish Parliament. I declare a non-interest: I was not at the noble Lord’s party, but I can assure him that that has no bearing whatever on the response I will give to his amendment.

He wishes to set up a committee to review the electoral system used to elect Members of the Scottish Parliament. It is tempting to go through the history of how we arrived at the electoral system we have. I shall resist that temptation, other than to say, as was indicated, that it was a compromise. It was obvious at the time and is the case. My noble friend Lord Steel said that there was a commitment to review the system after two elections. I do not remember such a commitment but, nevertheless, the Arbuthnott commission was established jointly, if my memory serves me correctly, by both the Scottish Government and the United Kingdom Government to look at the electoral system. It reported, recommending some revisions to the electoral system. I try to remind myself what they were. The Arbuthnott commission recommended that the mixed-member proportional system we have for elections to the Scottish Parliament should be revised to give voters more choice. It suggested that the closed list should be replaced by an open one, that the boundaries should be based on local authority areas and that a role should be defined for the regional MSP. Self-evidently, these recommendations were not taken forward or implemented.

The commission went on to say that,

“our revised electoral system, if implemented, should be reviewed following the experience of two elections. If further reform is judged necessary, consideration should be given at that time to introducing the single transferable vote for Scottish Parliament elections”.

As I have indicated, that revised system has not been implemented. The Calman commission perhaps read more into that and interpreted it as saying that in any event there would be a further review after two more elections—ie, after 2011. My colleagues who sat with me on the Calman commission will no doubt recall that we did not make any recommendations on the voting system as such because of the very recent Arbuthnott review, but also because there might have been a future review.

As I indicated in an earlier debate, specifically on another aspect of the electoral system and the regional list Member also standing in the constituency, the Government have stated their intention to consider what has been said by a review of the electoral system by both the Calman and Arbuthnott commissions. Indeed, in the Command Paper published alongside the Scotland Bill on St Andrew’s Day 2010, Ministers said that they recognised that the Calman commission,

“considered whether the electoral system for the Scottish Parliament should be reformed or devolved to the Scottish Parliament. Previously, the Arbuthnott Commission had reported in 2006 stating that there should be a review of the electoral system after the 2011 elections to the Scottish Parliament—the Government will consider this recommendation, taking into account the views of the new Scottish Parliament, following the May 2011 elections”.

Clearly, as indicated by the debate we have had this afternoon, there is support in a number of quarters for some form of review of the electoral system. However, the Government believe that they could take forward that review only with the full support of all parties in the Scottish Parliament, along with the benefit of the detailed consideration that this Government are committed to. I take the point made by the noble Baroness, Lady Liddell, that there is perhaps some nervousness about seeking to change the rules after they delivered a result that many of us did not like. That is a fair point. The noble Lord, Lord Browne, also made the important point that there are perhaps more important constitutional issues that we should focus on at this time, not least the fundamental question of Scotland’s place in our United Kingdom. Perhaps now is not the appropriate time to start a review of the electoral system. I have indicated that if there is that consensus to take it forward at some future time, we would be willing to consider it, but this is not the appropriate time to do so.

I think that we all share two views that were expressed earlier. First, I endorse what my noble friend Lord Forsyth said on the standing and importance of a Member of Parliament in his or her community. He said that those of us who have had the privilege to serve as Members of Parliament take very seriously that we represent the entire community and not just those who voted for us. That sense of representation and the privilege that follows those of us who have done that is important. That links into what the noble Lord, Lord McFall, said on the duty of all us to consider how as politicians—elected or not—and as a political system we can re-engage with the people who our laws affect. That will not be done just through a change to an electoral system. There are a whole host of things but it is something we would do well to remember.

For clarification, on the specific point raised by the noble Lord, Lord Foulkes, on Amendment 1, I repeat that we will see what consensus there is about looking at that. In the spirit of what I have said, I hope the noble Lord will withdraw his amendment.

[Lord Foulkes of Cumnock]

My Lords, we have had a very lively and well informed debate, considering that we started over seven hours ago with the procedural amendment proposed by the noble Lord, Lord Forsyth. It has been a very useful debate.

My noble friend Lady Liddell—I call her Secretary of State emeritus for good reasons—alerted me to the fact that she was going to disagree with me. I did not realise that it would be such a gentle disagreement, because it was a very sensible contribution. She pointed out the genuine argument against my proposal, and I had taken account of it. It is a very genuine argument about timing that we need to be concerned about. There is never a good time for this, and we wish we had done it. My noble friend said that we had missed the boat. I wish we had had a review when we should have had one, but it is too late now. I am glad that the Minister has said that the Government would look at it at an appropriate time. If the noble Lord, Lord Stephen, is correct in what he said in intervening on my noble friend, there is hope that we might get agreement across parties and between this and the Scottish Parliament. That would certainly signal the way forward.

I thank my noble friend Lord Browne for his very positive response. He was a bit hesitant about it, but it was very positive indeed. Someone said that this was not the vehicle to raise this issue, but it was the only vehicle open to me. I accept that it may not be the best way forward. Therefore, because I accept the point made by the Minister in his very helpful reply, I beg leave to withdraw my amendment.

Amendment 17 withdrawn.

House resumed.

House adjourned at 6.52 pm.