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Oral Answers to Questions
(12 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Dennis Skinner (Bolsover) (Lab)
1. If he will consider imposing a further bonus tax on banks to fund job creation for young people who are unemployed.
The Financial Secretary to the Treasury (Mr Mark Hoban)
The bank payroll tax is a one-off measure, but the Government have gone further by imposing a permanent bank levy that will raise £10 billion over the course of this Parliament. Those funds will help to pay for the youth contract, introduced this month, which will provide up to 500,000 young people with new education and employment opportunities.
Mr Skinner
So the answer is no: they are not going to introduce a bank bonus tax that could provide jobs for 100,000 young people and still leave money to spend on providing a training facility at Markham vale, which would serve all the constituencies of south Yorkshire and the north midlands. What an opportunity! If this posh, arrogant Government will not do that, the next Labour Government will do it for them.
Mr Hoban
We have heard the same old stuff from the hon. Gentleman for the last 42 years. Perhaps it is time for him to help youth unemployment by creating a vacancy. We are providing young people with more help to get into work, with an extra quarter of a million apprenticeship places. I would have thought he would have welcomed the fact that the city of Sheffield enterprise zone is at Markham vale in his constituency. That is the sort of practical action this Government are taking to ensure that jobs are being created.
Harriett Baldwin (West Worcestershire) (Con)
Will the Minister explain to employers—in Bolsover and elsewhere—that as of this month there is a youth contract that will pay them to take on unemployed young people?
Rachel Reeves (Leeds West) (Lab)
Can the Minister tell us how many young people have now been out of work for more than six months, and how that compares with the figure of a year ago?
Mr Hoban
I would have thought the shadow Chief Secretary would have welcomed the fact that youth unemployment fell last month. That demonstrates that the Government are taking action to tackle the scourge of youth unemployment—a problem that did not emerge under this Government, as youth unemployment also rose when her party was in government.
Rachel Reeves
The Minister failed to answer my question, so let me tell the House that 170,000 young people have been out of work for more than six months. That is an increase of 114% since just a year ago. Does the Minister think it is fair that families with children are being asked to pay a higher price for deficit reduction than the banks, and if not, will he reconsider reinstating the bank bonus tax to support young people back to work—especially as his Budget has given a tax cut worth £40,000 to 14,000 millionaires?
Mr Hoban
I just point out to the hon. Lady that the last Labour Government ruled out introducing a bank levy. That levy is raising £2.5 billion, and it will raise £10 billion over the lifetime of this Parliament. I think it is right that banks should pay a fair contribution for the risks they have posed for the UK economy, and I would have thought she would have welcomed both the bank levy and the fall in youth unemployment last month.
Duncan Hames (Chippenham) (LD)
Youth unemployment is clearly more acute in some parts of the country than in others. Why does the Minister think youth unemployment over the last two years has fallen in over a third of the country, including Bolsover, but not in some constituencies, such as Bradford West, where it has increased by 500?
Mr Hoban
My hon. Friend makes the important point that the pattern of youth unemployment varies across the country. It is important that the necessary support is in place to help young people looking for work, and the Work programme is likely to help 100,000 young people this year. That is just one of the practical measures we are taking to tackle the problem of youth unemployment—which, as the right hon. Member for South Shields (David Miliband) said, started under the last Labour Government.
Mr Iain McKenzie (Inverclyde) (Lab)
With the disgrace of having more than a million young people unemployed up and down this country, does the Minister not now regret scrapping the future jobs fund during the first few months after coming to power?
Mr Hoban
It was clear that the future jobs fund was not cost-effective in helping young people, and we have found that the work experience programme is 20 times more effective. We have introduced a range of measures to help young people find work. We have already talked about the increase in the number of apprenticeship places, the number of people being helped by the Work programme and the number of wage incentives in place through the youth contract. We are going to see more voluntary work taking place and more job experience. Those are the practical measures needed to tackle youth unemployment.
Tom Brake (Carshalton and Wallington) (LD)
2. What fiscal steps he is taking to encourage investment and growth in the manufacturing sector.
The Chief Secretary to the Treasury (Danny Alexander)
The Government have taken a number of steps to support manufacturing industry, including: reducing corporation tax rates, with the main rate falling to 22% by 2014, which is the lowest in the G7; introducing a new above-the-line credit to support research and development in the UK; and introducing the patent box to reduce tax on profits from patents.
Tom Brake
Was the Chief Secretary as shocked as I was to hear the shadow Chief Secretary say on “Newsnight” that she opposed the coalition Government’s corporation tax cuts? Will he set out what particular measures could help businesses such as Monument Tools, a manufacturer of tools in my constituency that is able to compete with Chinese competitors?
Danny Alexander
I was indeed shocked to hear the shadow Chief Secretary say on “Newsnight” that she opposed the cut in corporation tax. I would have thought that the Labour party would welcome such a measure, as it is designed to increase investment in British businesses and support economic growth—that is something that Labour Members say they want to see. The constituency firm to which my right hon. Friend refers could benefit from the national loan guarantee scheme and the credit easing scheme that the Chancellor announced at the Budget, and it could participate in the advanced manufacturing supply chain initiative, which the Department for Business, Innovation and Skills has announced, whereby £125 million is being spent to help manufacturers improve their performance.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
Manufacturing businesses in the black country are adamant that what will help them improve their investment is an increase in capital allowances, rather than cuts and cuts in corporation tax. Why do the Government not do that?
Danny Alexander
The hon. Gentleman will know that we have put in place enhanced capital allowances in a number of enterprise zones around the country, particularly to focus investment in plant and equipment in such areas. We announced in the autumn statement improvements to the short-life capital allowances regime, which had been a major request by manufacturing and, in particular, the engineering sector. I would have thought that he would have welcomed those changes.
Mr Andrew Tyrie (Chichester) (Con)
The Budget identified a number of sectors for fiscal support. All Departments and all of us can think of deserving cases, particularly in our constituencies, but is it not the Treasury’s job to hold the line on industrial policy, remove the implicit subsidy from banking and other industries, and ensure that economic resources, through, for example, corporation tax cuts, flow to businesses that can succeed without state support?
Danny Alexander
I agree with my hon. Friend. I am sure that he would agree with me that the Vickers report on the banking sector does precisely the first thing he mentioned, and that our approach to corporation tax—reducing headline rates year by year to the lowest level in the G7 and one of the lowest levels in the G20—precisely achieves the objective that he set out.
Mr David Hanson (Delyn) (Lab)
Will the Chief Secretary tell the House whether he read the explanatory notes on his VAT on caravans proposal? If he did read them, why on earth did he support a proposal that reduces demand in manufacturing by 30% and hits tourist industries, such as those in my area, 100%? Will he now review it?
Danny Alexander
Of course I did read the explanatory notes. The right hon. Gentleman will know that we have listened to the representations in favour of extending the consultation period and have extended the deadline to 18 May to enable individuals such as him, and his constituents, to make representations as part of that consultation.
John Stevenson (Carlisle) (Con)
3. What recent representations he has received on reducing the budget deficit.
The Chancellor of the Exchequer (Mr George Osborne)
Every significant business organisation and international body has welcomed this Government’s decisive action to deal with the record budget deficit that we inherited from our predecessors. Not only has that action brought low interest rates for families and firms, but it has made Britain a safer haven in what, as everyone can see today, remains a very volatile European debt storm.
John Stevenson
The Office for Budget Responsibility’s Budget report stated that the interest paid on our national debt will be about £43 billion this year, rising to about £60 billion by the end of this Parliament. That rise in interest payments is a direct consequence of the previous Government’s action, but what action is the Chancellor taking to ensure that this interest rate bill does not rise any further?
Mr Osborne
My hon. Friend is right to remind us all that the Government have to pay interest on the enormous debts that the Labour party racked up and the budget deficit it bequeathed us. The action we have taken means that we are paying £36 billion less in interest payments over this Parliament, which completely dwarfs any initiative ever put forward by the shadow Chancellor.
Lindsay Roy (Glenrothes) (Lab)
Why are the Government now forecasting that they will borrow £150 billion more than they envisaged a year ago? Has not cutting back too far, too fast completely backfired?
Mr Osborne
As a former teacher, the hon. Gentleman read that very well. He should also study the Institute for Fiscal Studies’ statement that if we had stuck to the plan left to us by the Labour party we would be borrowing £200 billion more than we are borrowing at the moment and, as I just said, paying £36 billion more in interest payments to creditors of the British Government.
Mark Menzies (Fylde) (Con)
24. In May 2010, the level of yield on UK Government 10-year gilts was the same as those of Italy and Spain. Now we are at record lows and they are at 7%, so what does that say about the credibility of the UK Government’s plan?
Mr Osborne
Again, my hon. Friend is absolutely right. We have very low interest rates in an environment in which many other European countries have much higher interest rates. That is a reflection of market confidence in the UK’s deficit reduction plan, and of course if we had pursued the path advocated by the Opposition—the same path that led us into this economic mess—we would be paying a higher interest rate, and there would be higher interest rates and families would have higher mortgage bills.
Chris Leslie (Nottingham East) (Lab/Co-op)
May I very gently and in the friendliest way possible suggest that the Chancellor should not be quite so arrogant about his record on public borrowing? In Washington this weekend, he said that
“we have sorted out our problems.”
That is what the Chancellor told us. We have high unemployment and slow to non-existent growth. When will he realise that public borrowing is £150 billion higher than he predicted in his spending review?
Mr Osborne
As today’s public finance numbers show, we have hit the deficit reduction target we set out in the autumn statement and in the Budget. I am glad that the hon. Gentleman brings up Washington and the IMF summit. Perhaps we will hear later from the shadow Chancellor, as we did not have a chance to yesterday, what he thinks about the fact that the previous Chancellor of the Exchequer completely disagrees with the position that he has taken on behalf of the Labour party.
Karen Lumley (Redditch) (Con)
4. What steps he is taking to increase the availability of credit to small businesses.
The Chancellor of the Exchequer (Mr George Osborne)
Lending to small businesses is a real concern at a time of stress in the financial markets. That is why the Government acted last month by launching the £20 billion national loan guarantee scheme. It is still in its first few weeks, but the signs are that businesses are getting cheaper loans, which will help support recovery.
Karen Lumley
Small businesses are obviously the key to the economic recovery. Will the Secretary of State reassure business people in Redditch that the Government will continue to look at funding for SMEs to ensure that finance reaches even the smallest companies?
Mr Osborne
I can certainly give my hon. Friend that assurance and say to businesses in her constituency and others that the national loan guarantee scheme is now available through most of the high street banks. We are also investing through something called the business finance partnership in non-bank financing of businesses. Some of that money will be for very small businesses, too, through peer-to-peer lending. As everyone accepts, I think, financial markets across the world, particularly in Europe, are stressed. That is why the Government have to step in and help, and that is what the £20 billion of guarantees that we are offering under the scheme will do.
Dr William McCrea (South Antrim) (DUP)
The Chancellor of the Exchequer must be aware of the pressures being exerted by banks on small and medium-sized businesses. What more can he and his Government do to get the banks to assist by making credit available rather than undermining many of those very good businesses?
Mr Osborne
The hon. Gentleman is right that small businesses face difficult financing conditions because of the stress in the financial markets and the fact that banks are not able to access funding in the way that they were four or five years ago. That is why we have taken the step of credit easing, which is not something that a Government would do in more normal economic times, and it is why we have the finance partnership and are expanding the enterprise finance guarantee. Those are all designed as Government interventions, using the good credit worthiness that we have earned for this country, to ensure that those lower interest rates can be passed on to small businesses.
Andrea Leadsom (South Northamptonshire) (Con)
Does my right hon. Friend agree with me that in a banking sector where only up to about 2% of bank balance sheets is invested in the real economy, what we really need is a revolution in competition in that sector? What is he doing to ensure that there will be more new entrants into the banking industry in future?
Mr Osborne
My hon. Friend makes an extremely good point, which is that the banking industry has become very consolidated in recent years, because of the various mergers and failures during the financial crisis. Our ambition as a Government is to increase competition on the high street, and we took an important step towards that with our decision to sell Northern Rock back into the private sector and to support Virgin Money as a new lender on the high street, but of course other divestments are due to take place, and the ambition in the Vickers report, which we are implementing, is to increase competition.
Mr Stephen Hepburn (Jarrow) (Lab)
With 50 businesses going bust every day, but still getting battered by the banks with high interest rates and charges, when is the Chancellor going to get a hold of the banks and get them to put some money into the country and into British business? After all, we are the ones who bailed them out.
Mr Osborne
I am glad the hon. Gentleman reminds us that the previous Government bailed out the banks with no conditions attached, and we are having to pick up the mess. We want to help small business lending by using the Government’s balance sheet and the low interest rates we have earned with a credible deficit plan. We intend to increase competition in the high street: we sent Northern Rock back into the private sector with Virgin Money, a decision that was welcomed in the north-east of England, but opposed by the shadow Chancellor. We are taking the steps necessary, but yes, we are dealing with one enormous mess left to us by Labour.
Nick Smith (Blaenau Gwent) (Lab)
5. What assessment he has made of the effect on pensioners of the proposed changes to age-related income tax allowances.
The Exchequer Secretary to the Treasury (Mr David Gauke)
No one will pay more tax in 2013-14 than they do today as a result of the changes. There are no cash losers. The Government remain absolutely committed to supporting pensioners. We have introduced a triple guarantee for the basic state pension, ensuring that it will increase each and every year by the highest of earnings, prices or 2.5%. We have also protected other benefits that make a real difference to the lives of millions of pensioners.
Nick Smith
What does the Minister have to say to those who are turning 65 in just under a year’s time? They are set to be more than £25 a month worse off than they thought they would be, but they have no time to plan for that change.
Mr John Leech (Manchester, Withington) (LD)
In the past couple of weeks, I have read in leaflets that pensioners have been hit by the Government axing free bus passes, free prescriptions and free television licences. Did I miss something in the Budget, or are those simply lies from the Labour party?
Owen Smith (Pontypridd) (Lab)
The Chancellor claims to be credible and consistent in his decision making, including his decision to withdraw the age-related tax allowances—the so-called granny tax that my hon. Friend the Member for Blaenau Gwent (Nick Smith) just asked about. In that case, will the Minister confirm why, in February 2009, the present Chancellor explicitly called for the tax-free allowance for pensioners to be increased?
Mr Gauke
In the light of the very substantial increase in the general personal allowance and of the concerns raised by the Office of Tax Simplification that the current structure does not have support, that is the right move. Pensioners are well protected by our policies and will continue to be so, but that move is one that results in a simpler and fairer tax system.
Iain Stewart (Milton Keynes South) (Con)
7. What progress the Government have made on the implementation of the national infrastructure plan.
The Chief Secretary to the Treasury (Danny Alexander)
We published an update on the national infrastructure plan alongside the Budget, showing the progress that has been made on all the priority investments. As an example, the Budget was able to confirm that the pensions infrastructure platform that we have established to enable British pension funds to invest in infrastructure in this country will be able to make its first wave of £2 billion investment by early 2013.
Iain Stewart
I very much welcome the plan and congratulate the Government on prioritising rail investment, such as the east-west line through my constituency. May I urge my right hon. Friend to continue that investment in the classic network, as well as finding the funds for High Speed 2?
Danny Alexander
My hon. Friend makes an important point. The investment in High Speed 2 will not affect the amount of investment in the traditional rail network. It will allow us to go forward—for example, with the investment in the Oxford to Bedford rail line, which I know will affect his constituency, create 12,000 jobs and give a boost of £38 million to that area’s economy.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Does the Minister realise that those of us who represent the squeezed middle in this country—the northern and midland regions—are sick to death of seeing London and the south-east getting all the infrastructure investment, all the cranes, while we are waiting patiently for investment in our part of the world, where we have been in recession for three years?
Danny Alexander
In that case, the hon. Gentleman ought also to welcome the substantial investment, for example, in the northern hub rail project. He ought to welcome the substantial investment in the electrification of the trans-Pennine railway. He ought to welcome the substantial investment in the capital infrastructure around ports to enable the north and the north-east of England to benefit, particularly from the investment in renewables that we will see over the coming years. A fair picture would represent those things too.
Graeme Morrice (Livingston) (Lab)
8. What recent assessment he has made of the rate of income tax paid by those earning over £150,000 per year.
The Exchequer Secretary to the Treasury (Mr David Gauke)
The Government are committed to ensuring that everyone pays their fair share of tax. The percentage of total income tax paid by the top 1% will be more than 27% in 2012-13 and in subsequent years, compared with an average of less than 23% between 1997 and 2010. Budget 2012 announced a package of measures to ensure that those on the highest incomes contribute more. This includes a cap on previously uncapped income tax reliefs, which will increase effective tax rates.
Graeme Morrice
The Prime Minister claimed in the House last week that the 50p top rate of tax had raised barely anything at all, yet the HMRC document sets out a figure of more than £1 billion, and the Minister confirmed in the House on the same day that it had raised £700 million. Should not the Prime Minister come to the House and set the record straight?
Tony Baldry (Banbury) (Con)
It is important to remember, though, that for 12 out of the 13 years that they were in government, the Opposition thought it appropriate to have a top rate of tax at 40p. Is not the important thing the yield that is raised by the top rate of tax, not having a tax rate that is punitive just for the sake of having punitive taxes?
Grahame M. Morris (Easington) (Lab)
22. Following on from the question from my hon. Friend and namesake the Member for Livingston (Graeme Morrice), we are aware that Treasury data published last week gave details of the levels of tax avoidance among top-rate taxpayers, but can the Minister confirm that someone earning £1 million a year will benefit to the tune of £40,000 a year from these taxes?
Mr Gauke
The point is that the assessment made by HMRC, supported by the assessment of the Office for Budget Responsibility, is that the 50p rate failed to raise the revenue that was anticipated. It failed to raise the revenue that we needed. Instead, we are taking measures that will succeed in getting money out of the wealthiest, not failing.
Kwasi Kwarteng (Spelthorne) (Con)
To what extent does the Minister believe that having the top rate of tax in the G20 helps British competitiveness?
Emma Reynolds (Wolverhampton North East) (Lab)
17. According to the Institute for Fiscal Studies, one year is not long enough to judge the effectiveness of the 50p tax rate. According to HMRC, the taxable income elasticity is highly uncertain. Therefore, will the Minister admit that his decision to scrap the 50p tax rate was ideological, rather than based on some flimsy evidence that does not actually exist?
Mr Gauke
It is not flimsy evidence; it is evidence that shows two different models. It is consistent with the academic literature in this area, and it is supported as a central and reasonable estimate by Robert Chote, head of the Office for Budget Responsibility and former head of the IFS.
David Mowat (Warrington South) (Con)
9. What assessment he has made of the effect of energy costs on the Government’s growth strategy.
The Economic Secretary to the Treasury (Miss Chloe Smith)
Energy costs have an impact on the economy. The plan for growth in the autumn statement and the national infrastructure plan announced a programme of more than 250 economic reforms and investment in infrastructure, with action in the energy sector, including electricity market reform. The Government are focused on ensuring that the UK can deliver the investment it needs to provide a secure, affordable and decarbonised energy sector.
David Mowat
The Minister will be aware that gas is an important feedstock in many industrial processes. As of this morning, the price of gas in the US was four times less than it was in the UK and Europe, which is driving GDP and reducing fuel poverty. Is she willing to speak with her colleagues in the Department of Energy and Climate Change to ensure that we can emulate the US by driving GDP and also reduce carbon emissions?
Miss Smith
Gas prices in Europe and Asia are higher than those in the US, which commentators have attributed mainly to the impact of the large-scale development of shale gas in the US. The Government are examining the potential barriers to investment in gas-fired electricity generation in the UK and the role gas can play in delivering a secure and affordable low-carbon electricity supply. That would include examining the potential role of shale gas in the UK. The Government, including the Treasury, DECC and other Departments, are working together and will shortly issue a call for evidence to inform our strategy for gas generation, which we will publish in the autumn.
Albert Owen (Ynys Môn) (Lab)
Energy prices and uncertainty surrounding the support for low-carbon energy, alongside uncertainty about electricity market reform, are causing some companies to reassess their business plans in this country. Can the Minister assure us that the Chancellor and the Treasury will support market reform in the next Session of this Parliament and ensure that the subsidies are in place to get the jobs and prosperity that the country needs?
Miss Smith
The Treasury supports electricity market reform, as I think the hon. Gentleman knows. He will also know that we have also laid out our support for energy-intensive industries. I have no doubt that he will be able to direct questions about programming to the Leader of the House.
Andrew George (St Ives) (LD)
10. What steps he plans to take to ensure taxes owed are duly collected.
The Financial Secretary to the Treasury (Mr Mark Hoban)
HMRC has managed both to reduce debt levels and to help businesses through difficult economic times. It offers help to businesses that are in genuine difficulty, including through time-to-pay arrangements. Where appropriate, it is taking faster and firmer action against those who fail to engage with it. The amount of customer debt owed to the Exchequer decreased by about £2.4 billion between February 2011 and February 2012.
Andrew George
I am grateful to the Minister for that answer and I must congratulate the Government on their plans to close loopholes, particularly for the super-rich, including through the gift aid system. Will he ensure that the Government do not weaken their resolve in that regard, and ensure that gift aid genuinely goes to support charitable activities?
Fiona Mactaggart (Slough) (Lab)
19. Why has not the Exchequer Secretary given Members of Parliament, or even the House of Commons Library, copies of the figures he released to the press last week suggesting that 330 millionaires are paying less than 10% tax, which he connected directly to charitable giving? Will he make those figures available to Members through the Library?
Gordon Henderson (Sittingbourne and Sheppey) (Con)
11. Whether caravans designed and constructed for continuous occupation will remain zero-rated for VAT purposes under his proposals when used as holiday homes.
The Exchequer Secretary to the Treasury (Mr David Gauke)
The Government have proposed a new definition of a zero-rated caravan, based on whether it has been designed and constructed for residential purposes. To achieve that, we have proposed a test, based on British Standard 3632, indicating that the caravan has been designed for continuous, all-year-round occupation. We are consulting on whether additional criteria should be added to ensure that the zero rate applies only to caravans intended for residential use, although I know that my hon. Friend argues that such additional criteria would not be desirable.
Gordon Henderson
I am grateful to my hon. Friend for his answer, which demonstrates clearly the need for further consultation. There are 45 holiday caravan parks in Sittingbourne and Sheppey which will be hard hit by the imposition of VAT on static caravans. Will he listen carefully and sympathetically to representations from the holiday industry before making a final decision?
Mr Gauke
I can assure my hon. Friend that we will listen carefully and sympathetically to the arguments that are put to us. He, indeed, has already made strong representations on this point, and we have of course extended the consultation period to 18 May, as the Chief Secretary to the Treasury pointed out earlier.
Diana Johnson (Kingston upon Hull North) (Lab)
Can the Minister explain to my constituents why VAT on ski lifts in the Chief Secretary to the Treasury’s constituency is being reduced, but in my constituency thousands of people are going to lose their jobs with the implementation of the Government’s plans to increase VAT on static caravans?
Mr Gauke
VAT is chargeable on mobile caravans, camper vans, narrowboats, beach huts and tents, and we are seeking greater consistency in the area.
With regard to ski lifts and other forms of cable-based transport, there is a reduced rate in France, Germany, Austria and Italy, and most areas of public transport are zero-rated.
Mr Greg Knight (East Yorkshire) (Con)
I thank the Minister for agreeing to extend the period of consultation. During the consultation, however, will he not only reflect on the scope of VAT, but give some thought to the many thousands of people throughout the country who could lose their jobs if the proposals are implemented as originally announced? Will he give some thought to them before he decides whether to phase, delay, amend or withdraw these plans?
Mr Gauke
Of course, we will listen to the representations that are made, and my right hon. Friend has made representations to me on behalf of his constituents. We are seeking to have a fairer VAT system, but of course we want to listen to those concerns that are raised about the implementation of these matters.
Bob Blackman (Harrow East) (Con)
12. Whether he plans to re-establish the euro preparations unit within his Department.
The Chancellor of the Exchequer (Mr George Osborne)
My hon. Friend asks whether we plan to re-establish the euro preparations unit in the Treasury, and the answer is no we do not.
Bob Blackman
I am delighted that we, unlike the Labour party, are committed not to join that foreign currency, which is failing at the present time. No doubt my right hon. Friend, before he became Chancellor, calculated the cost of the unit. How many police, doctors or nurses could we employ for the money that was wasted?
Mr Osborne
I only have the figures for the Treasury, but of course other Departments were also embarked on that Labour scheme. The Treasury spent £5 million on the civil servants required for the euro preparations unit, and that for example would pay for 17 nurses and five consultants. I guess, given that the Labour leader is committed to joining the euro, the unit would be re-established.
Kelvin Hopkins (Luton North) (Lab)
The Chancellor will have seen that the euro fell significantly deeper into crisis yesterday. Is the Treasury making contingency plans for the abandonment of the euro and the creation of national currencies?
Mr Osborne
As I have said previously in the House, the Treasury does make contingency plans for whatever the world economy and, indeed, the European economy throw at it, but I will not spell them out in detail.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
13. How many families in (a) the UK and (b) Liverpool, Riverside constituency receiving child tax credits will be economically disadvantaged by the changes introduced in the Budget.
The Economic Secretary to the Treasury (Miss Chloe Smith)
Data limitations mean that we cannot assess impacts at a constituency level, but, taking into account the Budget’s unprecedented £1,100 increase in the personal tax allowance and the other measures that the Treasury can robustly model by household, I note that more than half of households entitled to child tax credits are better off and will gain on average £175 per year in 2013-14. There are less than half as many losers as winners, and their average loss is more than four times smaller, at £40 per year.
Mrs Ellman
I thank the Minister for her answer, but more than 825 households in Liverpool, Riverside will lose all their child tax credit or working tax credit. How can it be fair to penalise hard-pressed families when millionaires are gaining £40,000 from the very same Budget?
Miss Smith
The top 20% of earners in this country continue to make the biggest contribution to reducing the deficit, as has to be the case. The hon. Lady knows as well as anybody in the House that under the previous Government, spending on tax credits was out of control, with nine out of 10 families being eligible. Six out of 10 families will still be eligible for tax credits after our reforms.
Mr Jim Cunningham (Coventry South) (Lab)
14. By what means his Department determined which core cities would participate in the tax incremental finance scheme; and if he will make a statement.
The Chief Secretary to the Treasury (Danny Alexander)
The main tax increment financing scheme will be available to all local authorities in England from April 2013 as part of the business rates retention scheme. We will set out more details on how it will work shortly. A second pot of longer-term funding will be allocated to the core cities—the eight largest cities outside London—on a competitive basis. We will invite applications from those cities for that pot soon.
Mr Cunningham
Why was Coventry left out of the eight core cities, against the promise of the Deputy Prime Minister in 2010? Does the Chief Secretary realise that that will have a bearing on the Friargate scheme in Coventry, which will employ a lot of people when it is finished?
Danny Alexander
The eight core cities are a well-established group that have a proven role in driving economic growth in England. As I said, the main tax increment financing scheme will be available to all local authorities in England, including that of the hon. Gentleman, from 2013. We will set out the details of that shortly as part of the business rates retention scheme. Other pools of funding, such as the Growing Places fund, may be able to help with the scheme that he mentioned. The local enterprise partnership allocates those funds.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
I thank my right hon. Friend for that answer. If the city pilots are successful, will he consider extending this method of financing to all county authorities?
Danny Alexander
Tax increment financing has great potential in helping local areas to develop infrastructure projects and supporting economic growth across the country. As I said to the hon. Member for Coventry South (Mr Cunningham), the main tax increment financing scheme will be available to all local authorities in England from April 2013. That will apply to the kind of local authorities that my hon. Friend described.
Katy Clark (North Ayrshire and Arran) (Lab)
15. What assessment he has made of the effect of changes to working tax credit on couples in households where one person is retired.
The Economic Secretary to the Treasury (Miss Chloe Smith)
Working tax credit is a payment for working households that was introduced by the previous Government to improve work incentives. Retirement is not recognised in the tax credit system. However, there are separate eligibility rules for those over 60, and a level of income for those in retirement is guaranteed by pension credit.
Katy Clark
My constituent, Mrs Orr, is losing £290 a month as a result of the tax credit changes. She lives with her husband, who is retired, and her 13-year-old daughter. She works for 20 hours a week at Crosshouse hospital and has tried to increase her contractual hours, but has been unable to do so. She works any overtime that is available. How do you suggest that she makes ends meet?
Miss Smith
I thank the hon. Lady for raising that example in which the couple’s ages are more distant from each other than is the norm. She makes an interesting point. However, as I said in my initial answer, there are arrangements for those over 60 and for those in retirement in the tax credit system, the pensions system and other benefit systems. As I have said in previous Question Times, the economy is moving, there are work vacancies out there and we believe that the changes to working tax credit are fair. For example, they place couples on a par with lone parents.
Andrew Bingham (High Peak) (Con)
16. What steps he is taking to increase the availability of credit to small businesses.
The Financial Secretary to the Treasury (Mr Mark Hoban)
The Government have announced a range of initiatives to help small businesses access finance from a wide range of sources, including the national loan guarantee scheme and the business finance partnership.
Andrew Bingham
I thank my hon. Friend for that answer and welcome the Government’s efforts on this matter. Does he agree that in constituencies such as High Peak, micro-businesses are still having difficulties finding loans, despite the assurances of the banks that they are open for business? What words of support and advice can he offer the small, independent business owners upon whom the recovery depends to such a great extent?
Mr Hoban
My hon. Friend raises an important point, and having visited his constituency, I know it is very rural. He might encourage businesses in his constituency to apply for the rural economy grant scheme, which is worth £60 million and is open to businesses operating in rural areas in certain markets, including agri-foods, tourism and digital media technology. I would encourage them to do so.
Kerry McCarthy (Bristol East) (Lab)
18. What estimate he has made of the revenue which would accrue to the Exchequer from maintaining the additional rate of income tax at 50 per cent in 2013-14.
The Exchequer Secretary to the Treasury (Mr David Gauke)
The 50% rate raised a fraction of what was expected, which is why we are reducing it to 45% from April 2013. Maintaining the 50% rate would accrue an extra £50 million on top of what is expected in 2013-14, rising to £100 million a year once the impact on self-assessment receipts is included. However, any additional yield could be offset by reduced indirect tax revenues, and as such it may raise nothing relative to the 45% rate.
Kerry McCarthy
I think the Minister has somewhat deliberately obfuscated matters. What I wanted was a figure. It has been estimated that the 50p tax rate could have raised £3 billion in future years when there was not a forestalling effect. Have not the Government made a deliberate decision that they want tax cuts for millionaires as opposed to money being put back into the pockets of hard-working people?
Mr Gauke
It is worth pointing out that this £3 billion figure that the shadow Chancellor and others recite suggests an entirely static process. Nobody believes that a 50p rate has no behavioural impact whatever, but that is the Labour party’s ridiculous position. That was not its position when in government, and it is not a position that any credible economist would support.
Jane Ellison (Battersea) (Con)
T1. If he will make a statement on his departmental responsibilities.
The Chancellor of the Exchequer (Mr George Osborne)
The core purpose of the Treasury is to ensure the stability of the economy, promote growth and employment, reform banking and manage the public finances so that Britain lives within her means.
Jane Ellison
What steps is my right hon. Friend taking to support successful small businesses that wish to take advantage of export opportunities?
Mr Osborne
We want to get small businesses exporting more, and UK small businesses have traditionally not exported as much as, for example, continental European small businesses. That is why UK Trade & Investment, under Lord Green, has set the specific ambition of doubling the number of small businesses helped by the Government. We want small businesses to be ambitious and look to overseas markets.
Ed Balls (Morley and Outwood) (Lab/Co-op)
The Chancellor has had a difficult few weeks since the Budget. To be told by his own side that he is an out-of-touch posh boy who does not know the price of milk must be particularly hard to take. I will ask him today not about the price of milk but—[Interruption.]
Mr Speaker
Order. Let me say once and for all to the junior Whip, sitting next to a senior Whip: be quiet, do not heckle, and if you cannot keep quiet, leave the Chamber. Make a habit of that.
Ed Balls
Shall I start again at the beginning of the question? I am going to ask the Chancellor today not about the price of milk but about a price that he surely must have considered at Budget time. I will ask him a specific question. What is—[Interruption.] I am going to ask the Chancellor a specific question that he must have considered at Budget time. What is the price of a litre of unleaded petrol at the pumps today, and what was it on Budget day a year ago?
Mr Osborne
Of course, the price of petrol today is about £1.40 a litre. It was less a year ago, but the international oil price has gone up since—I think it is 10% higher than it was last year. That is why we have cancelled some of the fuel duty increases that the right hon. Gentleman voted for when he was in government, cut fuel duty and got rid of the fuel escalator that he supported in government.
Ed Balls
That is an answer that we will hang around the Chancellor’s neck for the next four months. He has admitted that the price of petrol is higher today than a year ago, when he decided it was too high for petrol duty to go up. Let me ask him a second question. His duty increase is due in August. If the price of petrol is still higher than the £1.33 a litre price of a year ago, will he commit now not to go ahead with the duty rise, or is the truth that he cut taxes for millionaires but does not understand about family budgets? Out of touch, out of friends and way, way out of his depth.
Mr Osborne
The right hon. Gentleman says it is my duty increase, but we are talking about his duty increase, which was set out in the March Budget before the last general election, which he voted for and helped to write.
Mr Osborne
The right hon. Gentleman says I am the Chancellor, and he is right. Since inheriting those fuel duty plans from him, I have cut fuel duty, cancelled the fuel duty increases that he voted for and got off the fuel duty escalator that he supported. That is what I have done to ensure that families are better able to cope with the economic mess he presided over when he was in the Treasury.
Alun Cairns (Vale of Glamorgan) (Con)
T2. I welcome the Financial Services Bill, which we debated yesterday. It is a significant step towards re-instilling confidence in the financial services industry, but does the Minister accept that regulators, including the current Financial Services Authority, have an obligation to work with other regulatory bodies that go beyond their competence to bring about negotiated settlements when the product is far more complicated than is covered by their jurisdiction, such as in the Arch Cru affair?
The Financial Secretary to the Treasury (Mr Mark Hoban)
My hon. Friend raises an important question. There are a number of cases—Arch Cru is one of them—in which different parties are in different jurisdictions. It is important that regulators work together, along with the parties involved, to ensure that a good deal is put in place to help investors.
John Mann (Bassetlaw) (Lab)
T3. A listed building that is dismantled and rebuilt as a new dwelling will be zero rated, but people will not be able to renovate an empty barn for the same price if it is VAT-able at 20%. Is that or is that not a perverse incentive to demolish empty listed buildings?
The Exchequer Secretary to the Treasury (Mr David Gauke)
As financial advice, I am not sure it is necessarily wise to dismantle and then rebuild a listed building to make a saving, but there is an anomaly in the tax system: people pay VAT for a repair on a listed building, but they do not pay VAT for an alteration. That does not seem right.
Mr David Amess (Southend West) (Con)
T7. What action have the Government taken to prevent multinationals from funnelling their profits into tax havens, as some do, rather than paying their taxes to the developing countries where they have subsidiaries?
Mr Gauke
The Government have taken great action to increase tax transparency, and on ensuring that there is more of an exchange of information between jurisdictions. We have taken action to prevent Switzerland, for example, being used as a place to facilitate tax evasion. In addition, Her Majesty’s Revenue and Customs provides considerable support to developing countries to improve their capability and capacity to collect tax revenues, which are very important.
Lilian Greenwood (Nottingham South) (Lab)
T4. Ramtech Electronics is a small business in my constituency that supplies wireless products to the static caravan industry. Tony Strickland, national key account manager, says that the effect of the Government’s decision to put VAT on caravans will be “catastrophic” for the industry and that it will“undoubtedly result in job losses.”Why does the Chancellor think that a tax cut for millionaires is more important than my constituents’ jobs?
Elizabeth Truss (South West Norfolk) (Con)
T8. In 2005, Germany exempted businesses with fewer than 10 workers from unfair dismissal regulations and created flexible mini and midi-jobs. Since that date, youth unemployment in Germany has halved. What steps are the Government taking to improve flexibility and to get more young people into jobs?
Mr George Osborne
We need to reform the labour market, which is why, as my hon. Friend will know, we have this month extended the qualifying period for unfair dismissal cases from one to two years. That has been welcomed and will encourage people to take on new employees. We also have a call for evidence on compensated no-fault dismissal. I have no doubt that she will make a submission to that call for evidence.
Mr George Mudie (Leeds East) (Lab)
T5. In view of earlier answers on corporation tax, will the Chancellor tell the House how many FTSE 100 companies paid full corporation tax in the last available tax year? It would be understandable if he does not have the figure now, but will he place it in the Library of the House for hon. Members?
Mr Osborne
As the hon. Gentleman knows, because he is an experienced Member and sits on the Treasury Committee, there is a very important principle of taxpayer confidentiality, so I am not shown the individual tax returns of businesses or indeed individuals. We have recently published data on the average tax rate that people on the highest incomes were paying under the last Labour Government, and we can see that it was very much lower than Treasury Ministers were telling us.
Mr Mark Spencer (Sherwood) (Con)
T9. Can the Chancellor tell me how many of my constituents will benefit from the lifting of the personal tax threshold?
The Chief Secretary to the Treasury (Danny Alexander)
Information is not available at constituency level, but I can confirm that for the east midlands government region 1.7 million people will benefit in 2013-14 from the largest ever increase in the personal allowance, which was announced in the Budget. Some 152,000 people will have been taken out of tax altogether in the east midlands by the policies of this Government.
Albert Owen (Ynys Môn) (Lab)
T6. It has been reported in the papers that the Chancellor is prepared to meet with charities so that he can explain his tax hike and tell them how he can get it right in the future. For the sake of consistency, will he also meet with the purveyors of pasties, church leaders and caravan operators and manufacturers so that he can tell them how he will get it right in the future and they can tell him to drop these VAT hikes?
Mr George Osborne
What I find extraordinary is that we have a Labour MP supporting the idea that the very wealthiest people in this country pay no income tax. That is an extraordinary thing for a Labour MP to advocate. As I say, we have made reforms in the Budget to improve the tax system and to ensure that people at the very top of the income scale pay some income tax.
Mr Rob Wilson (Reading East) (Con)
T10. The Thatcher Governments unleashed a decade or more of enterprise in this country. Young entrepreneurs today are still key to a private sector-led recovery, but only 3% of 18 to 24-year-olds set up their own business. Will the Chancellor consider further support for the new enterprise allowance and other schemes to increase assistance to young entrepreneurs?
Mr Osborne
The new enterprise allowance has been introduced and already some 10,000 people are developing their own business ideas using the incentive of the allowance. As I set out in the Budget, we are considering the case for enterprise loans. The Government provide a loan for people going to university, but what about a loan for people who want to start their own business? We will come to the House with ideas on that subject later this year.
Geraint Davies (Swansea West) (Lab/Co-op)
Rather than giving £10 billion to the IMF for the European bail-out fund, would it not be better to invest that money in a growth strategy in places such as Swansea to generate jobs and growth, and avoid the situation of the Chief Secretary suddenly announcing a further 5% cut in departmental spending, allegedly for a rainy day?
Mr Osborne
The political opportunism and empty opposition of the Labour party was brutally exposed yesterday when the shadow Chancellor opposed the contribution to the IMF and the right hon. Member for Edinburgh South West (Mr Darling), a former Chancellor of the Exchequer and one of the few people to emerge with real credit from the last Government, completely contradicted him. Not only are the Opposition not taken seriously at home, they are not taken seriously abroad either.
George Freeman (Mid Norfolk) (Con)
Will the Chancellor join me in welcoming the announcement by GlaxoSmithKline of a £0.5 billion investment in advanced manufacturing in the north of England? Taken together with the £800 million investment by Tata in Wales and the IMF’s upgrade of our growth forecast by nearly 20%, does this not suggest that the Budget for business is working?
Mr Osborne
My hon. Friend is right to point to the GSK investment. The chief executive of GSK explicitly credited the falls in corporation tax and the patent box for that decision. We have also had the investment from Jaguar Land Rover in the west midlands, the great news of Nissan’s investment in Sunderland and steel-making has returned to Redcar.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
International connectivity is crucial to business in the north-east, and Newcastle international airport provides a vital link. Will the Government therefore support calls from regional airports for a congestion charge to be applied to air passenger duty to ensure the future viability not only of jobs and tourist income, but of international trade routes?
The Economic Secretary to the Treasury (Miss Chloe Smith)
As briefly discussed during last week’s debate on the Finance Bill, the Government are undertaking various pieces of work on aviation strategy and, more recently, received representations on regional congestion charges and other things during the APD consultation. I can confirm to the hon. Lady that, although I have not spoken to her personally about the matter, I am happy to meet her, her colleagues and representatives of those airports to hear more evidence of what they believe might occur if we set different tax rates.
Stephen Williams (Bristol West) (LD)
I am sure we have all received letters from constituents over the years saying that they did not want their taxes spent on one thing and preferred them to be spent on something else. It is right in principle, therefore, that the Government cap the ability of the super-rich to allocate taxes to charities of their choice. Will my right hon. Friend the Chancellor acknowledge, however, that universities and medical research charities have always depended on philanthropic support? In reviewing the cap on tax relief, will he ensure that those institutions’ interests are safeguarded?
Mr Gauke
I am grateful to my hon. Friend for his support for the policy. As we said at the time of the Budget and in the Budget document, we are looking to explore with charities dependent on large donations how this can be implemented without it having a major impact on them. Of course, we will take into account the concerns of universities and others.
Ian Austin (Dudley North) (Lab)
Why does the Chancellor think his Budget is now widely seen as a complete and utter shambles?
Mr George Osborne
We cut business tax to make this country more competitive and to create jobs; we delivered an income tax cut for 24 million working people; we took 2 million low-paid people out of tax altogether; and, above all, we continue to clear up the economic mess left to us by the Labour party.
Mr John Redwood (Wokingham) (Con)
What will we get for the £64 billion extra spending this year compared with the last year under Labour?
Mr Osborne
The plans we set out for public expenditure were measured, but they involved reducing the deficit. That has been very important. The public finance figures, published today, show that we are on track to meet our deficit targets. At the same time, we have found resources for things such as extra nursery education for disadvantaged youngsters, the pupil premium and all sorts of other things that support our objectives of a fairer and more balanced economy. [Interruption.]
Gemma Doyle (West Dunbartonshire) (Lab/Co-op)
West Dunbartonshire is the most difficult local authority area in the whole of the UK in which to find a job, yet the Scottish National party Government have refused us any help and refused to meet me. Have this Government also abandoned West Dunbartonshire or can we expect help to do one thing—to create jobs?
Danny Alexander
It is disappointing to hear that members of the Scottish Government have refused to meet the hon. Lady to discuss the help they could provide to her constituents. This Government’s actions—the youth contract, in particular—will be of significant importance to many young people in her constituency. In particular, there are the additional jobs subsidies available to businesses to take on young unemployed people in her constituency. I hope she will welcome that and promote it to businesses in her area.
Jacob Rees-Mogg (North East Somerset) (Con)
Tomorrow, the European Commission will publish its proposed 2013 budget. Will Her Majesty’s Government do everything they can to ensure that there is no increase in that budget? More importantly, will they use their veto on the multi-annual framework to ensure that there is no increase?
Mr Hoban
My hon. Friend makes an important point. At a time when Governments across Europe are making difficult decisions to curb spending, it is completely unacceptable for the Commission to propose an inflation-busting increase in its budget and the medium-term financial framework. The Government will work with their allies to tackle those issues.
Stewart Hosie (Dundee East) (SNP)
In normal times, the mortgage standard variable rate rises or falls as the base rate goes up or down, but we are aware that some banks—not all—are increasing their standard variable rates now, while the Bank base rate remains near the zero-bound. Will the Chancellor take this opportunity to fire a warning shot across the bows of some of those banks not to increase their standard variable rates and so put more pain on to people likely to have had pay cuts and wage freezes over the past two or three years?
Mr Hoban
It is important that we stick to the fiscal course to ensure that UK interest rates remain low for as long as possible. However, many banks face increased funding costs, partly because of the turbulence in the eurozone and partly because there is more competition for savings on the high street, and that works its way through to mortgage rates. It is important that banks provide the help they can to their customers to ensure they have the support necessary to deal with higher mortgage interest rates.
Mr Speaker
Order. I am sorry. Treasury questions have long been an appealing fixture to colleagues, but demand has exceeded supply and we must now move on.
Petition
Angela Smith (Penistone and Stocksbridge) (Lab)
I have a petition from 240 residents of Dodworth in my constituency about the quality of broadband services in their area.
The petition states:
The Petition of residents of Dodworth,
Declares that the Petitioners believe that broadband provision in the Dodworth Water Royd and Rose Hill estates is inadequate and is among the slowest service in the UK; further declares that the Petitioners believe that as time goes on the area will lag further behind in broadband speed, still struggling with a connection measured in megabits per second while the rest of the country has access to speeds measured in gigabits per second; further declares that this disparity will have a negative impact on those living in the area who will be unable to access internet services in future, which will have knock-on effects on lifestyle, prosperity, and in all likelihood, property prices; further declares that the Petitioners believe that the problem in this area is that there is no access to a local fibre street cabinet, which means that connections are made through around 6.5km of copper wire, resulting in slower connection speeds; and declares that the Petitioners believe that such a cabinet could be installed without the need to dig up roads or pavements.
The Petitioners therefore request that the House of Commons urges the Government to take all possible steps to ensure that residents of the Dodworth Water Royd and Rose Hill estates in Dodworth are able to access broadband services that are of comparable speeds to those available elsewhere in the country.
And the Petitioners remain, etc.
[P001021]
Stephen Lawrence
(12 years, 7 months ago)
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Clive Efford (Eltham) (Lab)
(Urgent Question): To ask the Secretary of State for the Home Department if she will make a statement on whether she will establish a public inquiry into recent allegations that corruption within the Metropolitan police force interfered with the investigation into the murder of Stephen Lawrence.
The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)
May I first apologise to the House for the absence of my right hon. Friend the Minister for Policing and Criminal Justice, who is overseas on Government business?
It is a matter of deep regret that it took 19 years to achieve convictions for the murder of Stephen Lawrence. In the years since he was murdered, the Lawrence family fought tirelessly for justice and, without their efforts, it is unlikely that either Gary Dobson or David Norris would have been convicted. I hope that the verdicts in January will finally have delivered some comfort to the Lawrence family.
Allegations of corruption in the murder investigation have been looked at on two previous occasions. They were examined by the Macpherson inquiry, which concluded that
“no collusion or corruption is proved to have infected the investigation of Stephen Lawrence’s murder.”
The allegations were also looked at by the Independent Police Complaints Commission in 2006, which again was unable to find any corruption in the original murder investigation. Following the convictions of Gary Dobson and David Norris, further allegations of corruption have come to light. As a result, the solicitor acting on behalf of Mrs Lawrence has written to my right hon. Friend the Home Secretary asking her to set up a public inquiry.
Allegations of police corruption must always be taken seriously and investigated thoroughly. It is essential that we ensure that the actions and behaviours of any corrupt police officers do not undermine public confidence in the police’s ability to respond to, investigate and fight crime. The Metropolitan police are currently carrying out an internal review into these corruption allegations and we await their findings. I would like to reassure Members of the House that my right hon. Friend is treating these issues with the utmost seriousness. She is currently considering her decision and has offered to meet Doreen Lawrence to discuss the issues further. My right hon. Friend will keep the House updated.
Clive Efford
I welcome the Minister’s statement, as far as it goes. The murder of Stephen Lawrence, and his family’s campaign for justice, led to the Macpherson inquiry, which was a landmark for policing in this country. One of Macpherson’s conclusions that remains in doubt relates to whether police corruption hampered the inquiry into Stephen’s murder. We have now seen fresh evidence that might call that conclusion into question.
Over the past two months, I have tabled questions on two occasions but have been fobbed off with holding answers. Yesterday, however, reports in the press that had clearly been sanctioned by the Home Office suggested that the Home Secretary had told the Lawrence family that she shared their concerns. If that is the case, can we take it that the Minister accepts that there is evidence of police corruption that is worthy of further inquiry?
There is also speculation that one of the Secretary of State’s reasons for not setting up an inquiry is cost, and it has been stated that there could be swifter and cheaper ways of dealing with the matter. According to reports, the police have taken six weeks and still cannot confirm whether all the relevant documents relating to Operation Russell were sent to the inquiry. In the light of that, will the Minister tell us what constitutes “swift” in the context of an inquiry? We cannot have any more bluster and delay. There has been far too much since the moment Stephen Lawrence was murdered.
Stephen’s family are asking for an inquiry into this matter. Will the Minister now answer my questions? Does he accept that only an independent, public inquiry will satisfy public concerns over the new allegations? Does he also accept that, as there has already been too much delay, such an inquiry should be expedited as quickly as possible, either by reconvening the Macpherson inquiry or by setting up a new inquiry team to follow on with its work?
James Brokenshire
I thank the hon. Gentleman for his questions and underline the seriousness we attach to the current allegations. The Home Secretary is looking very closely at this matter, but wishes the Metropolitan police’s internal review into the current allegations to conclude to inform her determination of what next steps are appropriate. I agree with the hon. Gentleman that those investigations should be carried out by the Metropolitan police swiftly in order to inform further consideration of whether a public inquiry is or is not appropriate.
I would like to reassure the hon. Gentleman that this matter will be looked at speedily and closely by the Home Secretary, who will continue to have discussions with the Metropolitan Police Commissioner. It is essential to have trust and confidence in the policing provided within London and in the rest of the country. I say to the hon. Gentleman that the Home Office has not sought in any way to brief this out, and that any decisions made by the Home Secretary should be reported to this House first. I can assure him that this matter will be dealt with entirely appropriately to provide the necessary reassurance on this significant matter—to him, to his constituents and to the Lawrence family.
Sir Peter Bottomley (Worthing West) (Con)
I hope that my hon. Friend will, in time, be able to give fuller replies to the questions put by the hon. Member for Eltham (Clive Efford), to whom I pay tribute, along with John Austin, for calling for the original inquiry.
I suggest that the Home Secretary or my hon. Friend consult the original commission—including John Sentamu, now Archbishop of York, and Dr Richard Stone—and acknowledge that, although we recognise that possible criminal proceedings may follow in this case, it was possible for criminal convictions to take place after the original Macpherson inquiry.
We all know that most police want to nick criminals and bring them to justice, and that most police officers are not racist by institutional or any other means, but those who are need to discover that the time has gone when the colour of someone’s skin should be viewed as more important than the colour of their eyes or their hair.
James Brokenshire
I absolutely agree with my hon. Friend’s last comment: racism has no part and no place in the policing of our country. I pay tribute to the important steps that the Metropolitan Police Commissioner has taken in underlining that message and to some of the actions that he is already taking to ensure that that message on policing in London is sent out loud and clear, including the introduction of CCTV cameras into some vehicles to provide greater transparency and accountability. These are issues that the Home Secretary is taking into careful consideration. As I said, she wishes the response of the current corruption investigations conducted by the Metropolitan police to be reported to her; she will then be able to determine the appropriate next steps in that regard.
Keith Vaz (Leicester East) (Lab)
The Minister has confirmed the evidence given by the Home Secretary to the Select Committee on Home Affairs this morning on this very point. Doreen Lawrence has written to me and other members of the Committee about the issue of an inquiry. What concerns me is the fact that the inquiry conducted by the Metropolitan police is an internal one. In order to satisfy the public and all those Members who have been aware of this issue over a long period, would it not be better if this were conducted not by an external force, but by Her Majesty’s inspectorate of constabulary, so that the Lawrence family can feel that a proper look has been taken before the issue of a public inquiry can be decided on?
James Brokenshire
The appropriate course of action is for the Metropolitan police to conclude its current investigations appropriately, but as speedily as is practicable. Following the receipt of that report, the Home Secretary will determine what further action may be appropriate to give necessary reassurance about the process to the family and to the community. My right hon. Friend will then consider whether a public inquiry is or is not appropriate in the light of the responses she receives from the Metropolitan police.
Jackie Doyle-Price (Thurrock) (Con)
The whiff of corruption has long hung over the investigation into Stephen Lawrence’s murder, and I hope very much that, as a result of these inquiries, the truth about just how incompetently it was conducted will finally emerge. Does my hon. Friend agree, however, that having faced the charge of institutional racism, the Metropolitan police have risen to the challenge and have left no stone unturned in trying to bring the killers finally to justice, and does he share my confidence that this inquiry will be expedited with accuracy?
James Brokenshire
I think we should recognise the steps that have been taken since the Macpherson inquiry to try to root out racism in the Metropolitan police and, indeed, in other police forces, but there is clearly more to be done. The Metropolitan Police Commissioner said recently:
“We have a duty to challenge or report any behaviour by colleagues which is less than the high standard demanded by the service and Londoners themselves”.
He added:
“ You cannot avoid that duty. Nor can I."
He also said:
“I will not stand for any racism or racists in the Met.”
I entirely endorse that message.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
I welcome the urgent question from my hon. Friend the Member for Eltham (Clive Efford), and also his persistent campaigning and determination to secure justice for Stephen Lawrence on behalf of his family.
Stephen Lawrence was murdered in an unprovoked racist attack 19 years ago on Sunday. The country was shocked both by the murder and by the failure of the initial investigation to bring Stephen’s murderers to justice. It is only the determination and dignity of the Lawrence family that has persisted, and has led to the two recent convictions.
Two new allegations of police corruption in the original inquiry have been reported in the media. Those allegations are very serious. The first is that information on corruption was available, but was not passed on to the Macpherson inquiry. The second is that additional witness testimony about corruption in the original inquiry is now available, and must be looked at afresh.
I urge the Home Secretary to go further than simply organising an internal Met review. The new information should be referred to the Independent Police Complaints Commission immediately so that it can pursue a full criminal investigation of the allegations. I also support the call by Doreen Lawrence, and by my hon. Friend, for a public inquiry, perhaps through a reconvening of the Macpherson inquiry. We need to know not simply whether criminal corruption was involved, but whether information was withheld from the original inquiry and whether that has implications for the inquiry’s conclusions. A public inquiry could also take the opportunity to review the progress that has been made in implementing the 70 recommendations of the Macpherson report.
There have been progress and change over the last decade, but people are still rightly concerned about the recent serious allegations of racism against individual officers, which are now being investigated. The Minister quoted the new commissioner, who has rightly made clear his determination that there should be zero tolerance of racism in the Met and, of course, any force. In support of his work, a new inquiry could review the progress that has been made and could also make further recommendations.
Confidence in the police must be complete, and the mistakes of the past cannot be left to fester. We owe it to Stephen’s memory to ensure that these allegations are investigated in full now.
James Brokenshire
I welcome the shadow Home Secretary’s recognition of some of the important steps that have been taken since the initial Macpherson inquiry. I think it essential for us to emphasise that racism has no place or part in modern policing, and to be robust in confronting issues of corruption.
It is notable that some of the more recent claims, cases and allegations involving racism in the police have come from within the force itself. That, I think, underlines the fact that the police are taking these issues much more seriously, and are ensuring that officers who engage in unacceptable behaviour are dealt with appropriately.
The right hon. Lady has identified some of the serious new allegations made about the original Macpherson inquiry and also about the availability of information or otherwise. It is precisely those matters that the Metropolitan police are examining. The Home Secretary is awaiting their response before considering any appropriate next steps and whether a public inquiry is needed to give the necessary reassurance to the Lawrence family, the community and the public. It is therefore appropriate that the investigation be undertaken appropriately, but also with due speed, to ensure that we can take the necessary action and that the necessary support and safeguards are put in place. We therefore look forward to receiving that report from the Metropolitan police, so that the Home Secretary can then determine what is appropriate in the context of the next steps.
Mr Speaker
Order. I am keen to accommodate the interest of colleagues, but doing so requires brevity, both in questions and in answers.
Graham Evans (Weaver Vale) (Con)
Does my hon. Friend agree that it is vital for public confidence in the Metropolitan police that any instances of racist behaviour by individuals in the organisation should be dealt with and be seen to be dealt with?
James Brokenshire
I absolutely agree, which is why the cases are being considered by the Metropolitan police. Also, there are separate, ongoing investigations into other allegations by the Independent Police Complaints Commission. However, it is important that we take broader steps to deal with issues of corruption. The Government have set in train a number of inquiries and reports, and we shall be following through on that, underlining the point that if such incidents are not dealt with appropriately, they undermine the very confidence in the police service that we all want to enable it to get on with the job of protecting our communities.
Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)
The Minister will be aware that the circumstances of the death of Stephen Lawrence echo down the years. He will know—and I remember—that in the early years after the death, it was impossible to get interest in the case, either in this House or in the media. In fact, the then Conservative Government refused an inquiry over and over again. Given the history of this case and the slowness of the past Government to act on it, does the Minister agree that in order to give closure to the Lawrence family, affirm the importance of public confidence in the police, and say to the wider society, “Racist violence and collusion with racist violence in these current, difficult economic circumstances will not be tolerated,” it is important that the coalition Government should bring forward an inquiry in which everybody can have confidence?
James Brokenshire
I accept the hon. Lady’s general points about the need for public assurance. Our judgment is that it is appropriate for the Metropolitan police to investigate the current allegations of corruption, and that once that has been provided, it is absolutely right and proper for the Home Secretary to look at that and consider whether a public inquiry is or is not required to provide the necessary reassurance to the public.
Tom Brake (Carshalton and Wallington) (LD)
We must listen to the Lawrence family. They have lived with the tragic death of their son and with police incompetence for nearly 20 years. Will the Minister comment on whether a public inquiry might also need to consider earlier cases of police corruption, such as that involving Daniel Morgan?
James Brokenshire
I certainly pay tribute to the work of the Lawrence family. As I think I said in my opening response, I am sure that if it were not for their tireless fight for justice, we would not have seen the convictions that we have. I do not want to speculate on what the response may be once we see the outcome of the response from the Metropolitan Police Service. However, let me say to my right hon. Friend that the Government take the issue of corruption in the police service extremely seriously. That is why we have established the Leveson inquiry, why the Home Secretary commissioned the Independent Police Complaints Commission to provide a report on corruption in the police service, and why she commissioned Her Majesty’s inspectorate of constabulary to consider instances of undue influence, inappropriate arrangements and other abuses of power in police relationships.
Mr David Lammy (Tottenham) (Lab)
Will the Minister update the House on investigations involving the other defendants in the original trial? Will he also say why the Home Secretary has such confidence in an internal review given all that has happened in the Met in relation to allegations of corruption, and why in this case it is not thought that the IPCC should be engaged in any review?
James Brokenshire
In response to the right hon. Gentleman’s first question, what I can say is that the police have been very clear that investigations in relation to this matter continue, and it is right and proper that all appropriate lines of inquiry are followed through. I say in response to his second question that I think it is appropriate for the Metropolitan Police Service to be able to look at this matter and provide a response, and then for the Home Secretary to determine what the next steps should be.
Bob Blackman (Harrow East) (Con)
The vast majority of serving Metropolitan police officers abhor racism in all its forms, but clearly there are still pockets of concern. What discussions have taken place with the commissioner on protecting whistleblowers who bring such matters to the attention of senior police officers, because officers must be protected and feel confident about reporting misdeeds?
James Brokenshire
My hon. Friend makes an important point: police officers should be able to air their concerns and be confident that those matters will be dealt with appropriately. A number of recent cases have been brought as a direct consequence of reports being made by police officers. I hope that that will continue and give confidence that if matters of this kind are referred, appropriate action will be taken clearly and robustly.
Mr Nick Raynsford (Greenwich and Woolwich) (Lab)
While recognising both the progress that has been made in the Metropolitan police since the Macpherson inquiry and the determination of the current commissioner to root out corruption and racism in the Met, as a south-east London MP—whose constituency is very close to that of my hon. Friend the Member for Eltham (Clive Efford), who raised the urgent question, and in whose constituency Stephen Lawrence was murdered—the Minister will, I am sure, recognise that the legacy of this case has had a corrosive effect on the local community’s confidence in the integrity of the police, and that nothing less than a genuinely independent examination of these latest allegations will suffice.
James Brokenshire
I am grateful to the right hon. Gentleman for his comments, and I am under no illusions as to the impact this appalling case has had within the south-east London community, and more broadly, and the need for proper examination. That is what is happening in the current corruption investigation that the Metropolitan police are undertaking. We judge it to be appropriate for that to be followed through, and for the report on that to go to the Home Secretary and for the Home Secretary to decide what steps might then be appropriate in the light of that report.
Kris Hopkins (Keighley) (Con)
In my constituency, many young people from the black and minority ethnic community do not believe the police force is their police force. One of the principal reasons is that they think racism still manifests itself in a minority of police officers. Regardless of the Home Secretary’s deliberations and decisions, does the Minister agree that the true cost that should be paid is for senior police officers to get hold of these individuals and sack them for gross misconduct?
James Brokenshire
Any allegations that have been made should be investigated properly and thoroughly, and anyone found to be responsible for wrongdoing should be dealt with in the firmest and most robust way. I think it is appropriate that matters are allowed to be investigated, but I do not in any way underestimate the seriousness of the issues at hand, the need for matters to be resolved speedily and the need for the public to have the necessary confidence in the police.
Mr David Winnick (Walsall North) (Lab)
May I reinforce the point made by my hon. Friend the Member for Hackney North and Stoke Newington (Ms Abbott)? What we do not want is a rerun of what occurred after the murder, when all attempts to get an inquiry were dismissed. I was one of those who, along with my hon. Friend, was urging such an inquiry at the time. Was not the inquiry set up by my right hon. Friend the Member for Blackburn (Mr Straw) fully justified? Just imagine what the position would have been if it had not been established. I hope the Home Secretary will seriously consider the latest requests from the family.
James Brokenshire
Certainly I recognise the very important recommendations made as a consequence of the Macpherson inquiry. As I have said, the police service has taken really important steps since then to deal with racism in the police. The police service is not institutionally racist, but further steps do need to be taken. The lead that the Metropolitan Police Commissioner has provided on this in his recent statements should be followed throughout the police service across the country.
Gavin Barwell (Croydon Central) (Con)
Given how long it took to bring Stephen’s killers to justice, is it not important that we get swift answers to these latest allegations in a way that instils public confidence, not just for the sake of Stephen’s family, but because of the urgent need to build confidence in our police among black and minority ethnic communities and because a single allegation of corruption or racism against one officer undoes all the good work that so many officers do on our streets?
James Brokenshire
My hon. Friend has, again, made a very important point about the impact that allegations of corruption have on confidence in our police. This is why the Home Secretary takes these current allegations extremely seriously. In this broader context, it is also why she has set in train a number of steps to provide assurance on these issues. Obviously relevant inquiries have been undertaken in respect of corruption to provide recommendations so that we can all have that confidence in our policing. So many good police officers are out there doing a difficult job day in, day out, and it is important that these matters are dealt with appropriately so that their work is recognised and they can get on with their job.
Fiona Mactaggart (Slough) (Lab)
Is not the principal allegation currently that the Russell report, which investigated the behaviour of a key police officer in the original matters, was not given to the inquiry members? As the hon. Member for Worthing West (Sir Peter Bottomley) has pointed out, it is possible to ask current inquiry members whether they got that report. Given that the allegation is that the Metropolitan police were able to suborn a public inquiry, I am deeply concerned at the extent to which the Minister seems to think it is all right to leave the timetable in the hands of the police. Can he reassure the House on this?
James Brokenshire
I certainly can reassure the hon. Lady as to the absolute seriousness with which the Home Secretary takes this matter; I am sure that my right hon. Friend will be having further discussions with the Metropolitan Police Commissioner about the timing of the investigations, in recognition of the public concern attached to this.
Mark Pritchard (The Wrekin) (Con)
On a day when some parts of the media have not necessarily had the most cordial of exchanges with politicians, would the Minister like to put on the record, with me, the thanks of many hon. Members for the work of the Daily Mail in campaigning for justice for Stephen Lawrence and his family, and trying to stamp out racism?
James Brokenshire
As I said, the tireless work of the Lawrence family in seeking to bring about justice has been extraordinary, and I know that others have campaigned tirelessly in support of them. Obviously, convictions have been secured and investigations continue in relation to this appalling crime. I very much look forward to the police’s further work in seeking to follow all appropriate lines of inquiry in their continuing investigations into the Lawrence murder.
Robert Halfon (Harlow) (Con)
Is not the nub of the issue the fact that communities often do not feel that the police are accountable to them? What measures are the Government taking to improve police accountability?
James Brokenshire
As my hon. Friend will know, the Government are taking a number of different steps to create greater professionalism within the police service with the establishment of the new police professional body to lead work to develop professionalism and set standards for the service. Obviously, we will also look to the introduction of police and crime commissioners later this year to provide more direct accountability between the public and the police and to ensure that the police remain in close connection with the communities they seek to serve.
Mr Speaker
Patience is rewarded for the representative of Bermondsey and Old Southwark.
Simon Hughes (Bermondsey and Old Southwark) (LD)
Thank you very much, Mr Speaker. Will my hon. Friend confirm that he has got the message from London MPs and from others that although we absolutely applaud the new commissioner’s robust attitude, everybody now wants the new Mayor, whoever that will be, and the commissioner to refer independently for assessment the continuing racist allegations as regards the Lawrence case as well as other racist allegations? Does he agree that the best thing the Government can do is to ensure that every one of our 43 police forces in England and Wales better reflects the community it serves, particularly in the ethnic mix at the highest level?
James Brokenshire
My right hon. Friend has highlighted the point about the need for the police service to reflect the diversity in our communities. Although the proportion of black and minority ethnic officers has more than doubled since 2000, there is clearly more work to be done, particularly among the more senior ranks. We are examining whether direct entry or quicker progression might be able to assist in that regard. I can assure him that these matters are considered with the utmost seriousness by the Home Secretary and by me. Let me make it absolutely clear: racism and corruption have absolutely no part to play in our police service.
Points of Order
(12 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
On a point of order, Mr Speaker. I believe that you have had advance notice of this point. I seek your guidance on how best to elicit a response from the Treasury on a number of questions that I tabled about the average tax paid at different high income levels. On 28 February, I tabled three written parliamentary questions to the Treasury, numbers 97755, 97800 and 97801, for named day answer on 5 March. I received a holding reply and on 27 March I tabled a further named day written question, asking when I would receive a response to the previous written questions. On 16 April, I received a further holding reply. As the House is shortly to prorogue and as there is a danger that the questions will fall if they are not answered before Prorogation, I would appreciate your advice on how I might best receive a response. Whether it was intentional or accidental, this is inexcusable and an insult to democracy and I hope that you can help me.
Mr Speaker
I am grateful to the hon. Lady for her point of order and for giving me advance notice of her intention to raise it. Ordinarily, I would say to the hon. Lady or to any other Member who was dissatisfied with an answer that they should consider taking the matter up with the Procedure Committee, which monitors such matters. In general terms, I stand by that advice. When the objection of the hon. Member is not to the content of an answer being in some way unsatisfactory or out of kilter with the spirit of what the House expects but rather to the fact that there has been no substantive reply at all, that is an extremely serious concern. It was flagged up several times earlier in this Parliament and in the previous Parliament and I hope that the presence of the Leader of the House and the Deputy Leader of the House on the Treasury Bench will suffice to ensure that the relevant Ministers are chased with some urgency to provide substantive—not holding—replies to the questions posed by the hon. Lady before the House prorogues, thereby avoiding the need for the hon. Lady to have to return to the matter in the new Session.
Mr Speaker
It will not do for Ministers simply to wait several days or even weeks and then to reply by saying, “I will reply as soon as possible.” The Leader of the House and I share a distaste for that practice.
Bill Presented
Housing (Selective Licensing of Private Landlords in Exempted Areas) Bill
Presentation and First Reading (Standing Order No. 57)
Graham Jones presented a Bill to give local authorities the power to apply selective licensing conditions to private landlords in exempted areas with social housing stock.
Bill read the First time; to be read a Second time on Friday 27 April, and to be printed (Bill 330).
Food Labelling (Halal and Kosher Meat)
16:24 - The House divided: - Ayes: 70 / Noes: 73 - Question accordingly negatived.
Philip Davies (Shipley) (Con)
I beg to move,
That leave be given to bring in a Bill to introduce compulsory labelling of halal and kosher meat and products containing halal and kosher meat by retailers at the point of sale; and for connected purposes.
I thank the large number of colleagues from both sides of the House who have contacted me to support the Bill. I am grateful also to organisations such as the Royal Society for the Prevention of Cruelty to Animals which have also given the Bill their support. As I hope hon. Members will see, my Bill is supported by colleagues not only in the Conservative party, but in the Labour party, the Liberal Democrats and the Democratic Unionist party.
As many hon. Members will know, I am a firm believer in individual freedom of choice, and with my background in customer service and marketing at Asda, I believe in particular in consumers’ freedom of choice. That is why today I am introducing a Bill to make labelling of halal and kosher meat and products containing halal and kosher meat by retailers at the point of sale compulsory. My sole reason for introducing the Bill is to give consumers more information, so that they can exercise their freedom of choice.
Current British legislation requires the stunning of animals before slaughter, with religious exemptions for halal and kosher meat for communities whose religious traditions sometimes require slaughter without stunning. The religious exemption dates back to the Slaughter of Animals Act 1928, which applied to Scotland, and the Slaughter of Animals Act 1933, which applied to England and Wales. The EU also granted derogation from stunning to those religious communities in Council regulation (EC) No. 1099/2009 of 24 September 2009.
In recent years, animals rights groups, notably the Farm Animal Welfare Council, have advocated the labelling of meat from non-stunned animals to reduce the amount of such meat purchased, and therefore the amount produced. Neither the British nor the European Parliament has passed a law requiring slaughtered meat to be labelled, but implementation of such laws has been much discussed in recent years. In 2003, the Labour party announced a consultation on a voluntary labelling scheme for slaughtered meat, but a parliamentary question in April 2007 revealed that there had been no real progress on labelling. The matter was raised in November 2009 in a report in the European Parliament, which passed a proposal to have a category labelled, “Meat from slaughter without stunning”, but that proposal was not contained in the final EU food information regulations. In the past two years, Members of this Parliament and of the European Parliament have expressed interest in continuance of a labelling law, but no such law has been set in place. In November 2010, the Government’s position on labelling was summarised by Lord Henley, who stated:
“I can say that we have no plans whatever to make the practice of halal or kosher killing illegal. However, we think that it is worth considering the appropriate labelling of all meat so that people know exactly what it is that they are eating and how the meat has been killed.”—[Official Report, House of Lords, 23 November 2010; Vol. 722, c. 1006.]
It is not often that I parrot statements from Ministers, but on this occasion I could not agree more.
I propose to make labelling of halal and kosher meat compulsory, because as a strong believer in freedom of choice, I think one of the consumer’s fundamental rights is to know what they are purchasing. At present, consumers cannot satisfy their preferences because not all meat products are labelled, so legislation to require retailers of meat to label their products is essential to enable consumers to practise their right to make an informed decision.
According to the EU Dialrel project, the exemption for religious slaughter in schedule 12 of the Welfare of Animals (Slaughter or Killing) Regulations 1995 clearly states that it applies to people of that religion, not to everybody. This implies that halal and kosher meat should be consumed by those of Muslim and Jewish faiths, respectively, because this type of slaughter is specified for their religious needs. This is obviously not the case at present because Muslims make up around 3% of the UK population, yet the Halal Food Authority estimates that halal meat makes up about 25% of the meat market. Similarly, it has been estimated that 70% of the kosher meat was not consumed by the Jewish community.
There have been cases of state schools, hospitals, pubs, sports arenas, cafes, markets and hotels serving halal meat to customers without their knowledge. In fact, many of my hon. Friends may be interested to know that, according to The Scotsman in November 2010, halal meat has even been served without labelling in House of Commons canteen. To my dismay as a former retailer, I recently learned that Britain’s largest supermarket chains, including Marks and Spencer, Sainsbury’s and Tesco, are selling halal meat without notifying unsuspecting shoppers. Some of the large food chains, including Pizza Hut, Dominos and KFC, are doing the same. I am ashamed to say that even my former employer, Asda, has been guilty of this.
If consumers knew what kind of meat was being sold to them, many might decide to make different purchases. For example, in August 2010 there were protests when Harrow council announced its plan to serve halal-only menus in the borough’s state primary schools. Parents complained that it was unfair that meat slaughtered according to sharia law was being forced upon non-Muslim children.
There are some people who wish to ban halal and kosher meat on animal welfare grounds. I want to make it clear that I am not one of those people. I am very happy for people to make the decision for themselves, but they should be able to make an informed decision. My Bill would benefit those people who want to make sure that their meat is kosher or halal before purchasing it, just as much as those who want to make sure that it is not kosher or halal before purchasing it. My Bill does not favour one or the other; it seeks to help everybody.
I had a supportive letter from an individual who wrote that
“as a Sikh and someone who doesn’t eat or believe in halal and kosher meat, I think this is a great idea as it does not feel like there is choice anymore for those who do not wish to eat halal meat.”
Some may argue that this can be left to the market and that we do not need any legislation—an argument with which I would generally have a great deal of sympathy. However, I believe that for practical reasons we need some legislation to help consumers. When people go to an Indian restaurant they are entitled to expect to eat halal meat, but when they go to Subway or KFC, they do not expect to do so and should be told.
Interestingly, Masood Khawaja, president of the Halal Food Authority, in September 2010, said:
“As Muslims have a choice of eating halal meat, non-Muslims should also have the choice of not eating it. Customers should know it is halal meat.”
In an article in the Daily Mail in September 2010, my hon. Friend the Member for Romford (Andrew Rosindell), secretary of the all-party group on animal welfare, said:
“I don’t object to people of different religious groups being catered for but it’s not something that should be imposed on everybody else . . . The outlets have a duty to let their customers know because some will object very strongly, not least because of the animal welfare implications of halal.”
These two gentlemen agree with me, and I hope many other hon. Members in the House will do so too.
Sir Gerald Kaufman (Manchester, Gorton) (Lab)
I oppose the Bill. I declare an interest. I am an orthodox Jew and I was brought up in a household where only kosher meat was eaten. None of these issues was raised throughout my childhood, adolescence and early adulthood.
I do not believe for a moment that the hon. Member for Shipley (Philip Davies) has the tiniest anti-Semitic feeling in him and I am sure that he is not proposing the Bill for that reason. However, large numbers of Jews would be very greatly distressed if what he proposes were to become law. I speak not only about Jews, but Muslims. I represent many thousands of Muslims in my constituency—good, decent, law-abiding people who, because of their religious allegiance, will eat only halal meat. I do not see why Jews and Muslims alone should be compelled by law to have the meat they eat labelled in a way that no other meat is labelled.
If the hon. Gentleman’s proposed Bill had a wider remit—for example, if it said that all chickens had to be labelled in a certain way if the birds had been battery hens—or if he had proposed that meat had to be labelled in a certain way if the animals had been kept in dreadful conditions before being killed, and killed in an extremely brutal way, as shown in the documentary narrated by Sir Paul McCartney, which revealed the astonishing, abominable and utterly dreadful conditions in which large numbers of animals, whether cows, pigs or whatever, are kept, I would at least regard him as consistent. But he is not being consistent. He has picked on two small minorities who share the way in which the meat they eat is killed. Indeed, when Muslims first came to Manchester and Leeds and wanted their animals killed in a halal way, they went to Jewish slaughter houses in order to do so.
During my whole upbringing, I ate only kosher meat. I am afraid that I did not keep to that in later years, but I still will not eat pigmeat of any kind because my mother and father brought me up in such a way that that meat is what we call “trayf” in Yiddish, and I will not eat trayf food. I think that the hon. Gentleman is picking out two small minority religions that have a special way in which the meat they eat is killed and asking that they, and they alone, have their meat labelled.
I say this as someone who has spoken on animal welfare in this House for many years. I was the leading person who got the hunting ban passed, because of my understanding of the procedures of this House—I say that with some vanity, but it is a fact. I have been involved in the campaign to ban the keeping of wild animals in circuses, something on which I do not recognise the hon. Gentleman as having been hyperactive.
The proposed Bill would have profound implications for religious feelings, and I would be letting my faith and my family down, alongside many good, decent, fine and religious Muslims in my constituency, if I did not state my total opposition to it. I suggest that the hon. Gentleman withdraw the motion so that the House does not even have to vote on it.
Mr Speaker
I thank the right hon. Gentleman for his observations on faith, family, eating habits and the legislative record; the House is indebted to him.
Question put (Standing Order No. 23).
Ms Harriet Harman (Camberwell and Peckham) (Lab)
On a point of order, Mr Speaker. The Secretary of State for Culture, Olympics, Media and Sport assured the House that in respect of the News Corporation bid for BSkyB, he was acting as Secretary of State in a quasi-judicial capacity, and above all in a way that was impartial and fair. In view of the evidence that has been adduced before the Leveson inquiry today, it appears that the Secretary of State has fallen woefully short of the standards expected from him in his office and in the public interest. I believe that the right thing for the Secretary of State to do would be to come to the House to offer an apology and tender his resignation.
Mr Speaker
I will take a very brief further point from the right hon. Member for Exeter (Mr Bradshaw), a former Secretary of State for Culture, Media and Sport, and then respond to the point of order.
Mr Ben Bradshaw (Exeter) (Lab)
Further to that point of order, Mr Speaker. Given that on 20 July last year, the Culture Secretary himself said that any conversations that the Prime Minister had had with James Murdoch were irrelevant, specifically because he, the Culture Secretary, was taking the decision in a quasi-judicial way, is it not paramount that the Prime Minister also come to the House to correct the record at the earliest opportunity?
Mr Speaker
If a matter of privilege is being raised, hon. or right hon. Members should write to me about it. I feel, on the strength of what I have heard, that I am quite able to respond. I say to the shadow Secretary of State for Culture, Olympics, Media and Sport and to the right hon. Member for Exeter that I have received no indication from the Secretary of State that he intends to come to the House. The point that the right hon. and learned Lady and the right hon. Gentleman have made is clear, on the record and will have been widely heard.
Mr Speaker
I do not intend to allow this matter to run for any length of time, but I am prepared to hear the hon. Member for Rhondda (Chris Bryant) and then we will see how it goes.
Chris Bryant
I am very grateful. Further to that point of order, Mr Speaker, there may be an issue of privilege, and you are absolutely right that if any Opposition Member wants to allege that the Secretary of State has lied to the House, that is a matter of privilege and we should write to you, notwithstanding the fact that the Committee of Privileges is in the slightly complicated position of being reconstituted. However, surely the matter may also be one for the House in a different way, because the code of conduct for Ministers is a not only a matter for the Prime Minister but written into a resolution of the House. Surely it is appropriate that the Secretary of State should come here to explain himself in relation to the code of conduct.
Mr Speaker
I note what the hon. Gentleman has said. He will also have noted, I hope, what I said, which was that what the right hon. and learned Member for Camberwell and Peckham (Ms Harman) and the right hon. Member for Exeter said will have been heard on the Treasury Bench. I think it is a safe prediction that it will have been heard by the Secretary of State at whom it is directed, and I do not think there is anything that I now need to add or can usefully add. The observations have been made, and they are on the record. I thank right hon. and hon. Members for their comments.
Mr Speaker
I would not want the hon. Lady to feel that she has been unjustly excluded or discriminated against in any way, for that is not my practice, as she knows, so we must hear her.
Margaret Curran
Further to that point of order, Mr Speaker. There is another dimension of the evidence heard today and the revelations at the Leveson inquiry. May I ask that the Secretary of State for Scotland be called to the House because of the implications of those revelations for the people of Scotland and the allegations against Alex Salmond and his involvement in those matters? They are of great concern to the people of Scotland and I believe they bear further examination.
Mr Speaker
I would say to the hon. Lady that those on the Treasury Bench will have heard what she has to say. The person to whom she has just referred will also have heard, or will hear very soon. It is not a matter for the Chair today. I have heard the points of order, and have responded in such a way as I think is proper at this time. I think we will have to leave it there for the present.
Legal Aid, Sentencing and Punishment of Offenders Bill
(12 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
17:40 - The House divided: - Ayes: 300 / Noes: 222 - Question accordingly agreed to.
17:54 - The House divided: - Ayes: 298 / Noes: 227 - Question accordingly agreed to.
Mr Speaker
I must draw the attention of the House to the fact that financial privilege is involved in Lords amendment 1B. If the House agrees to the amendment, I shall ensure that the appropriate entry is made in the Journal.
Clause 1
Lord Chancellor’s functions
The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly)
I beg to move, That this House disagrees with Lords amendment 1B.
Mr Speaker
With this it will be convenient to consider the Government motion to disagree with Lords amendments 2B and 196B, the Government motion to insist on its disagreement with Lords amendment 31, and Government amendment (a) in lieu.
Mr Djanogly
As you have reminded the House, Lords amendment 1B, dealing with the statutory duty for legal aid, impinges on the financial privileges in this House. I should also say that my interests remain as I declared at the last stage of ping-pong on 17 April. I ask the House to disagree to this amendment, and I will ask the Reasons Committee to ascribe financial privilege as the reason for doing so.
Let me first address Lords amendment 31, which concerns the sensitive and important issue of mesothelioma, in the light of the amendment we have tabled. I should emphasise at the start that the Government take very seriously the plight of mesothelioma victims and do not believe that mesothelioma cases are being brought inappropriately. We should appreciate that the issue in mesothelioma cases is not so much causation as process. In effect, the challenge for the Government, employers and insurers is how we ensure that we have procedures in place that enable sufferers to receive compensation more quickly and without the stress of having to pursue protracted litigation.
Much has been done by recent Governments to improve the position of mesothelioma sufferers when the employer’s insurer can be traced. There is now also a consensus that more needs to be done in respect of sufferers who cannot trace their employer’s insurer. Let me be clear that the Government are committed to action on that point. We are working closely with insurers and other stakeholders on this pressing issue with a view to making an announcement before the House rises in July.
I have considered very carefully the points that have been made both in debates in the House last week and the other place last night. We have also held ministerial meetings with campaigners on behalf of mesothelioma victims, including with Lord Alton, the right hon. Member for Wythenshawe and Sale East (Paul Goggins) and my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch).
The Jackson reforms in part 2 of the Bill are due to come into effect in April next year. We have reviewed that timetable in the context of mesothelioma. On careful reflection about the special position of mesothelioma sufferers, I can now give the House the assurance that we will not commence the relevant provisions in clause 43, on success fees, and clause 45, on after-the-event insurance, in respect of mesothelioma claims in April next year. Rather, we will implement the clauses in respect of those claims at a later date, once we are satisfied on the way forward for those who are unable to trace their employer’s insurer. The amendment commits the Lord Chancellor to carrying out a review of the likely effect of the clauses in relation to mesothelioma proceedings and to publish a report before those clauses are implemented.
Stephen Phillips (Sleaford and North Hykeham) (Con)
The concession that the Government are making goes some way to dealing with the concerns that many on both sides of the House have expressed in relation to mesothelioma, but it does not deal with the point raised in the other place by Lord Thomas yesterday, which was that success fees should not be claimed in such cases because liability is not in issue. What will the Government do about that?
Mr Djanogly
As I have said, this is not an issue of causation. I heard Lord Thomas speak in the other place yesterday, and I very much agree with what he had to say, which was essentially that in cases in which causation is not an issue, there is—in many respects—no reason why solicitors should have a success fee for that type of work. But the Opposition have made their case, as have others, and the Government have to deal with things as they stand. That is why we are offering to make this concession, but it is a time-limited concession only. The overall Jackson reforms stand as our preferred way to move forward.
Ian Lucas (Wrexham) (Lab)
I am grateful to the Minister for having listened closely to the debate last week and to the debate in the House of Lords. But is it not the case that this legislation facilitates a solicitor recovering a success fee from the client’s damages, and that if this legislation did not proceed, that could not happen?
Mr Djanogly
No. The hon. Gentleman rather distorts the implications of the legislation. We are capping success fees, which are currently 100%, at 25%.
Andrew George (St Ives) (LD)
On the point about the delay until the review has been undertaken, is that merely a delay or is it a genuine review? If it is a review, what will it consider and will he give an indication of its timetable?
Mr Djanogly
Given the timing of this development, we have not thought through the exact procedures of the review, but it will certainly be undertaken before we move to ending the provisions that remain.
We now come to the amendment in lieu passed by the other place in respect of clause 1, and what has been described as a purpose clause. It was suggested variously in the other place yesterday that this amendment would have no effect; that it would have some effect, although that effect was not entirely clear; and that it would have a future effect in guiding successive Lord Chancellors when consideration was being given to what services might be added to the scope of legal aid under clause 8(2).
The difficulty the other place has so far had in establishing the precise effect of the amendment is instructive as this House decides whether it should stand. A duty with an uncertain effect is desirable neither in legislative terms nor for the person attempting to discharge that duty. However, it is the Government’s view that the effects of this duty can be described and are highly undesirable. The amendment would remove the uncontroversial, unambiguous duty the Bill places on the Lord Chancellor to ensure that legal aid is made available according to part 1 of the Bill. This made a clear link between the duty and legal aid. In terms of a clear duty, it does not get much clearer than this. However, the amendment would not only remove that but would replace it with a duty that would bring ambiguity and uncertainty. It refers to “legal services” rather than “legal aid”.
The argument was also made in the other place that the amendment had no effect other than to underline the Government’s commitment to the principle of access to justice. We contend that the imposition of any duty on the Lord Chancellor in legislation must create in law a potential course of action through challenges to the discharge of that duty. If it is accepted that the imposition of such a duty must give rise to a potential course of action, the amendment’s effect must be to bring into question the range of services provided under the Bill. The matter would then turn on the question of which legal services meet people’s needs. That contrasts with the clear and unambiguous duty in clause 1(1) requiring the Lord Chancellor to
“secure that legal aid is made available in accordance with”
part 1.
The Government believe that the question of which legal services meet people’s needs is not relevant to the Bill. Schedule 1 lists the services that Parliament, following consideration of first principles and extensive consultation, believes it appropriate to make available under legal aid. To reopen that question via an ongoing duty would frustrate our intention to bring certainty and clarity to the scope of services funded by legal aid. The amendment would result in only one thing: numerous expensive judicial reviews—more than likely at taxpayers’ expense as the boundaries of the new duty are tested and because the question of which services should be provided would be reopened.
It was said yesterday in the other place that such JR applications would almost certainly fail, and that consequently there would be no cost implications to the amendment. However, even rejected applications have an inherent cost: lawyers are paid legal aid fees for their work up to that point and the Government pay their own lawyers to defend such cases.
I would also like to address the argument put forward in the other place about the amendment’s effect in guiding future Lord Chancellors. It seems novel to include in the Bill an overriding duty that activates when the Lord Chancellor considers adding a service or services to the scope of legal aid. I am not convinced this is possible, and I am certain it is unhelpful. Adding services to the Bill requires the affirmative approval of both Houses. Such a process will be more than adequate to ensure that the Lord Chancellor takes account of the relevant factors when considering what, if any, services should be added to the scope of legal aid.
I emphasise, however, as Lord McNally did in the House of Lords yesterday, that the Bill’s present form arises from extensive debate and consideration across both Houses and reflects decisions about the future nature of legal aid. In short, the amendment is incompatible with the Bill. It would muddy both the duty to which the Lord Chancellor is subject and the scope of services that might be funded.
Simon Hughes (Bermondsey and Old Southwark) (LD)
I am not arguing that the House should agree to the Lords amendment, but the Minister will know, as the Lord Chancellor does, that I have asked that the Government consider bringing immigration matters—whether onward appeals by judicial review or when a judge gives permission for a case to go to a higher court—back within the scope of legal aid. Will he put on the record the response to that plea, which I have made to the Lord Chancellor and him several times?
Mr Djanogly
My right hon. Friend finds the right moment to ask about something not subject to the amendment. It is an important point, however. My right hon. and learned Friend has written to him about onward appeals in immigration cases. The Department will conduct a review of the impacts of withdrawing legal aid in such cases once we have sufficient data and after implementation of the reforms. I envisage allowing about a year for the reforms to take effect before starting such a review.
Lords amendment 2 was passed in the other place yesterday by the extremely narrow margin of three votes. Unusually for this topic, no one spoke other than the mover and my right hon. Friend Lord McNally. That indicates how far we have moved. I remind the House of the main points. First, and crucially, legal aid to obtain the full range of injunctions and orders to protect against domestic violence will remain exactly as at present. There is no evidential gateway for legal aid for these remedies, and those who need legal aid to protect themselves can get it, regardless of their means.
Secondly, although we have removed most of private family law from the scope of legal aid in favour of funding mediation and less adversarial proceedings, we have made an extremely important exception for victims of domestic violence. That is so that they can take or defend proceedings about child contact or maintenance, or about the division of property, without being intimidated by their abuser during the proceedings.
We have made significant changes to the detail of this exception in response to concerns expressed in both Houses. We have accepted in full the Association of Chief Police Officers’ definition of domestic violence. We have also significantly widened the list of evidence that we will accept as demonstrating domestic violence for the purposes of the exception. That list will now include undertakings, police cautions, evidence of admission to a refuge, evidence from social services and evidence from GPs and other medical professionals. That is in addition to the range of evidence that had already been confirmed, including the fact of an injunction or order to protect against domestic violence having been made, a criminal conviction or ongoing criminal proceedings for domestic violence, a referral to a multi-agency risk assessment conference and a finding of fact by the courts that there has been domestic violence. We have also doubled the previously announced time limit for evidence for this exception from 12 months to two years.
Kate Green (Stretford and Urmston) (Lab)
We all noted the Lord Chancellor’s commitment in the Chamber last week to extending the time limit to two years. Will the Minister clarify whether that will also apply in cases of child abuse, which seem to be encompassed by the definition of domestic violence that now applies in the Bill? Clarification would be welcome on that, as there are clearly instances in which proceedings might be brought in relation to child abuse after more than 12 months, including in care proceedings, in which it would be entirely appropriate to grant legal aid.
Mr Djanogly
Yes, I am pleased to be able to confirm to the hon. Lady that that is the case.
We think that we have struck the right balance, although some will disagree. However, such disagreement misses the fact that there are two important safeguards to our system, which will provide genuine victims with a route into legal aid even if they do not have the headline forms of evidence. First, when a court has to consider whether domestic violence is a factor in a private family case, it may consider any relevant evidence, including police call-outs or evidence from domestic violence support services, or other types of evidence that have not even been suggested by the Opposition. This is also relevant in regard to the time limits. When a case involves older incidents of domestic violence and a court considers that the matter is still relevant and makes a finding of fact, legal aid funding could still be triggered. There is also the more generic safeguard of the exceptional funding regime.
We continue to believe that the evidential requirements should not be in the Bill. The level of detail required means that those requirements will be much better left to regulations, subject to the affirmative resolution procedure, rather than to primary legislation. Given how far we have moved on this topic, and the safeguards that I have outlined today, I invite the House to disagree with Lords amendments 2B and 196B.
Sadiq Khan (Tooting) (Lab)
I shall try to keep my comments short, as I know that a number of colleagues wish to speak in the debate. The Bill sustained 11 defeats on Report in the Lords, which is a record for this Parliament, and a further three yesterday. The Government need to show some humility when they have suffered 14 defeats, and I am pleased that we have seen some evidence of that today.
It is still unclear why the Government are so resistant to Lords amendment 1B. They have given different reasons on different days for their opposition to Lord Pannick’s amendment. A statement of legislative purpose is frequently included in legislation of this nature. Lord Pannick’s drafting of the amendment would result in a statement of purpose within the financial limits set out in the Bill. The key question is whether there should be a duty on the Lord Chancellor to take into account citizens’ needs before making arrangements for legal aid provision. The amendment has been drafted with reference to the financial resources available, and would therefore not incur further expense for the Government. The Government cannot have it both ways. They say that the amendment replicates provisions that are already in place, and that it is therefore unnecessary. They also say that it would add to Government expenditure. We will be voting against the Government on Lords amendment 1B.
Alison Seabeck (Plymouth, Moor View) (Lab)
My right hon. Friend has touched a raw nerve. Plymouth is a hot spot for mesothelioma, and it also has an extremely low-wage economy. These people are not millionaires, and losing a significant proportion of their damages simply is not fair on those who have this horrible disease and whose families have had to live with it. I congratulate my right hon. Friend on the work that he is doing in attempting to change the present position.
Sadiq Khan
What my hon. Friend has said echoes some of the powerful speeches that were made last week.
It is worth bearing in mind that the progress that has been achieved is due to work done by Members in all parts of both Houses. We welcome the concessions that have been made today, we welcome the pause, and we approach the amendment in good faith. For reasons that we appreciate, the details could not be fleshed out today, but we assume that there will be an independent assessment of the evidence gathered during the due diligence phase.
We hope that the review will consider the impact on victims’ damages. According to some, they will increase by up to 10% as a result of the Government’s proposals, but others disagree, and we expect the review to look into that.
Mr Djanogly
It would, in fact, be a matter for the judges who would apply the 10% increase, rather than for the Government.
Sadiq Khan
Of course the Minister is right, but if there is to be a review of the impact on those who suffer from this disease, we will expect the impact of the Jackson changes on the level of damages to serve as a benchmark, rather than the changes affecting victims per se. We hope that the pause will lead to a rethink by the Government.
We hope that the review will consider the impact on access to justice—some say that lawyers may be unwilling to take on such cases, and that as a result they may not be heard—and the interaction of the reforms with the new employers liability insurance bureau. We also believe that the data should take real-life experience into account.
Andrew George
The right hon. Gentleman will have heard my intervention on the Minister, when I sought to distinguish between a mere delay in the implementation of the policy and a genuine review. I hoped that the Minister would give me some indication that if the findings of a review required the Government’s policy to be amended in some way, there would be an opportunity for a rethink.
Sadiq Khan
Given the calibre of the Ministers involved and that of the Members of both Houses who have engaged in discussions over the last few hours and days, I believe that this will be a genuine review. I am sure that not only sufferers from the disease but colleagues who have been involved would be devastated if it were not.
We welcome the review, but the report needs to be based on proper evidence, and the genuine concerns that exist must be addressed. We support the proposal for a pause, and we are willing to work with the Government to ensure that we get this right.
Mr Deputy Speaker (Mr Nigel Evans)
Order. Hon. Members can see how many of their number wish to take part in the debate. As it will end at 5.40 pm, I ask them to be mindful of others when making their contributions.
Tracey Crouch (Chatham and Aylesford) (Con)
In the light of your comments, Mr Deputy Speaker, I will make a short speech, and will confine my remarks to the Government’s amendment to Lords amendment 31.
Let me first pay tribute to the work of Lord Alton, Lord Avebury, the late Lord Newton, and others in the House of Lords for tabling the original amendment. Without their dedication and commitment to ensuring a workable outcome for those with mesothelioma, we would not be where we are today.
I welcome the fact that the Government have listened carefully to the case presented in both Houses for exempting mesothelioma victims from the current proposals. It is not right to force victims of an extraordinary disease—when no fraud is possible and compensation is certain—to shop around for a lawyer during their last few months of life in an attempt to pay the lowest possible success fees as a proportion of a payment that they deserve. Discussion of this issue should never have been a fight about compassion for those with mesothelioma —it is a pretty heartless person who does not show compassion for those who suffer from the disease—but, rather, should have dealt with how best to protect the interests of the people who find themselves victims, and those of their families.
Without the amendment, the practical implications of the law as drafted for victims of mesothelioma would have been hugely damaging. Regardless of what colleagues on either side of the House may think of lawyers and insurance companies, it would ultimately be the victim, who would be going through intense suffering through no fault of their own, who lost out. The amendment rightly exempts mesothelioma from the overall package of reforms in the Bill, but it should be considered the beginning, not the end of the discussion. If ever there was an opportunity to kick-start progress on speeding up compensation payments to victims, it is now.
Like others, I seek assurances that there will be proper parliamentary debate on the commencement order and the report from the Lord Chancellor, and that future legislation will be synchronised with other initiatives that the Department for Work and Pensions is working on. However, more than anything, I urge the Government to conduct the review not with lawyers or insurers in mind, but with the sufferers at the centre, and to come forward with alternative proposals to ensure that they are protected, financially and otherwise, as soon as possible.
I started by thanking the noble Lords for tabling amendment 31 in the first place. It is only right that I finish by saying that I am sure that the late Lord Newton of Braintree, a co-sponsor of Lords amendment 31 who passed away recently from a respiratory disease, would have been pleased, as a former Leader of this House, that the Government have listened, that cross-party consensus has been achieved and that common sense has prevailed.
Paul Goggins (Wythenshawe and Sale East) (Lab)
It is a pleasure to follow the hon. Member for Chatham and Aylesford (Tracey Crouch), who has played a brave and important role in discussions over recent days. I pay tribute to her for that. In relation to Lords amendment 31 and amendment (a) in lieu, the whole House is rightly paying tribute to Lord Alton and his supporters in another place for raising the issue in the first instance and for then persisting in their opposition to what the Government have until now been proposing in the Bill.
I also want to thank Lord McNally and Lord Freud for the constructive approach that they took in a meeting that I attended with Lord Alton last week, and in the days since. I welcome the concession that the Minister is offering this afternoon, and I appreciate that he cannot go into great detail about any proposals, which he said he hoped the Government would be able to bring forward before the summer recess. However, I can tell the House that his ministerial colleagues made it clear in the meeting I attended that they are striving to negotiate and implement a system of compensation and support for mesothelioma victims that is swifter and more sympathetic than the one currently in place. I am sure that the whole House would want to encourage them in their endeavours.
Whether amendment (a) in lieu is sufficient will depend entirely on the answers to a number of questions. In particular—this has already been raised—what will the extent and conduct of the review be? Crucially, how will the commencement of the relevant provisions of the Bill be aligned with the proposals that the Department for Work and Pensions hopes to publish before the summer recess? I would be happy to take an intervention from the Minister if he wishes to make a clear commitment this afternoon that he will not seek to implement the relevant provisions in the Bill unless and until an improved system of compensation is in place.
Mr Djanogly
I do not want to give any binding commitments about the process today, because things have not been finalised. However, I can tell the right hon. Gentleman that if the process is to be improved by the Department for Work and Pensions, which we hope it will be—he will have some insight into our proposals from the discussions he has had—that could well require DWP legislation, in which case we would look to roll the ending of the provisions into the commencement of the DWP provisions. That is how I foresee the process now, but again, I am not making that a commitment.
Paul Goggins
I am grateful to the Minister for that helpful intervention, because if there is to be legislation to introduce the new system, there will have to be full parliamentary scrutiny of those proposals in both Houses.
It has been a privilege and a pleasure to support Lord Alton in his efforts to protect mesothelioma victims. He has asked me to say that he is grateful for the cross-party support he has received from this House, and that, along with other Members of both Houses, he awaits with interest the outcome of the review and the details of the new compensation scheme. Above all, he is pleased that Parliament has acted to protect mesothelioma victims.
For my part, I am pleased that the Minister’s comments of last week—in particular that the families of dying mesothelioma victims should, and would, be watching the lawyers’ clock as fees mounted—have now been overtaken by an acceptance that mesothelioma victims are not part of a compensation culture and that they should not be expected to pay their lawyers a success fee out of their damages, and, finally, that through the amendment in lieu and other measures that will follow Parliament should continue to do all in its power to give mesothelioma sufferers the best possible help and support.
Mr Robert Buckland (South Swindon) (Con)
I welcome the Government’s concession and amendment on mesothelioma. This issue vexed many of us last week. The original amendment was somewhat wider, in that it related to respiratory diseases in general, and that caused a lot of us pause for thought. The new amendment is appropriate, however, as it deals specifically with this deadly condition. It reflects the will of both this House and the House of Lords. It promises a proper review and a report at the end of that. It has also been introduced in recognition of the fact that there is a genuine sense of urgency as many mesothelioma sufferers —including constituents of mine in Swindon, which, like many other industrial towns, has a proud heritage but also, sadly, a deadly legacy in the form of this awful disease—do not have time on their side. That is why this is an exceptional case. That is why in this instance, in which a House of Lords decision has put causation beyond any doubt, we are dealing with a particularly unusual set of circumstances.
It has already been observed that lawyers charging success fees need to take care to ask themselves questions in cases where causation is not part of the equation, and where, frankly, the argument is first about making sure all the facts are marshalled so the evidence can be put in train to prove liability and, secondly, about questions of quantum. As those matters do not involve complex issues of law, lawyers should ask what sums it is appropriate for them to charge their clients.
As I have said, there is also, necessarily, a sense of urgency in these cases. We must create a system that will allow for a more speedy resolution of mesothelioma cases. In particular, we must address the issue of the traceability of insurers of former employers as that is often a challenge for mesothelioma sufferers and those representing them. Mention has been made of the Motor Insurers Bureau. Many accidents are caused by uninsured drivers who then go on their way. It can be difficult to trace them, but victims can claim from that bureau, which is funded by the insurers, in a civil court. I know all Members would like to see a similar scheme adopted in the months ahead, and the Government have made a welcome early concession that they will report back on that before the summer recess.
We have had debates in Committee, the House and another place about domestic violence, and the Government are to be commended on the progress made on that. I reiterate that it would be better to put the criteria for the assessment of evidence in regulations rather than in the Bill, as it is patently clear that regulations can be amended more swiftly. If there are genuine injustices as a result of the operation of the new rules, regulations can be amended by negative or affirmative procedure. They provide a far more flexible way of dealing with the challenges ahead than primary legislation. For those reasons, I am happy to support the Government on the vexed issue of the domestic violence criteria.
It has been a long journey; this Bill has taken a considerable amount of my time and that of everybody else who has taken a keen interest in legal aid. Some extraordinarily important debates have taken place, and I pay tribute to all Members in this House and in the House of Lords for engaging in a very constructive, important and challenging set of debates as the Bill has proceeded. It is now coming to the last stage, and I am glad that the Government have, in many respects, listened, adapted their position and made appropriate concessions.
Simon Danczuk (Rochdale) (Lab)
I wish to say a few words about the Government amendment. I hope that it means that the Government will come up with a satisfactory system by which mesothelioma sufferers can be fully compensated, without them or their families being robbed of the compensation they receive and so richly deserve.
Hon. Members may well be aware that, in years gone by, Rochdale was home to the world’s largest asbestos factory, so this is a massive issue for my constituents. It is fair to say that they suffer from the connections that they have had with asbestos over many years. Just last Saturday, I was knocking on doors in my constituency, as I do every weekend, and I called upon a lady in Littleborough, Mrs Beryl Greenwood, who told me about her experience with this disease. She had been married to her husband, Kenneth, for many years, and he had contracted the disease from having worked as a welder on the railways. He had worn asbestos gloves at that time and, no surprise, he passed away a couple of years ago. I suppose the good news is that she was served well by solicitors; she and her family received a fair amount of compensation and were treated reasonably. She told me that the issue was that none of that compensation will ever bring back her husband, whom she loved dearly. The point I am getting to is that the Government now need to amend this Bill—we are asking them to be genuine in this—so that the people and the families who suffer from this terrible disease are treated fairly, responsibly and respectfully.
Andrew Bingham (High Peak) (Con)
I do not intend to detain the House for long, because I am aware that plenty of other hon. Members wish to speak. I just wish to add my voice to those thanking the Government and the Ministers for their concession on this matter. My constituency is very rural but, like the constituency of the hon. Member for Rochdale (Simon Danczuk), it contains a large asbestos-related industry. That industry was born and based in High Peak, so my constituency has a higher level of mesothelioma than the national average. The Government’s movement on this issue is to be commended. Last week, I, along with one or two of my hon. Friends, voted in the Opposition Lobby on this matter. I subsequently received an e-mail from a constituent telling me that he was actually proud of his MP—he said that this does not happen very often.
I pay tribute to my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch), because she has driven this through, along with the right hon. Member for Wythenshawe and Sale East (Paul Goggins) and those in the other place. I welcome the amendment in lieu and am particularly pleased to see that a report will be published on the conclusions of the review. That gives me great confidence that the review will be meaningful and searching, and will come forward with something that all of us across the House can support when the day comes. I look forward to that report.
Fiona Mactaggart (Slough) (Lab)
When the Lord Chancellor introduced the statement to the House which preceded this Bill, I asked him about the provisions in relation to domestic violence. He thought that I would be pleased with the answer, because the Government had recognised that domestic violence was, to some degree, a special case. I was not pleased with the answer, because at that point the definition of “domestic violence” was unique to this Bill, it did not cover all cases and it was, in my view, fundamentally flawed. So the first thing I wish to say is how glad I am that the Government have now decided to use the Association of Chief Police Officers definition of “domestic violence”.
I need to push one point further, however. The failure of the Government to understand the reality of the lives of victims of domestic violence is reflected in how they have constructed this Bill. I will never forget the moment when I talked to two local police officers in my constituency who dealt regularly with victims of domestic violence and who told me about a case that they had just dealt with of a woman who had been beaten up by her husband 12 years earlier but did not report it until he started biting pieces out of her body. That case, although it made me tremble with horror, is shockingly not that exceptional. We should not forget that, in this country, two women are murdered every week following a history of domestic violence. We should not forget how few women ever report it. Why do they not report it? Overwhelmingly, the victims of domestic violence think, “It was my fault.” That is how they feel, so they do not go to the police or to social workers. They conceal it, as they think it is caused by something that they did.
Such women often report because of someone else. When women are pregnant, they will report their victimisation by their partner because they want to protect the child in their womb. The problem with the distance travelled by the Government is that they have not yet gone far enough. I hope to be able to persuade the Minister to take that last step and to accept wider forms of evidence. We know that women do not necessarily go to a refuge; they go to a place of refuge. They might go to their sister, to their school friend or to their mum, and they are the people who women will tell first about their experience of victimisation.
Some very perturbing evidence from Welsh Women’s Aid suggests that the average time—the average, not the extreme—that a victim might take before reporting a domestic violence incident and getting to the stage of resolving the private family law issues is five and a half years. That average time would be excluded by the route that the Minister is pursuing. I beg him to recognise that the House of Lords got this one right and to say that he will take the last step and ensure that the other victims are properly protected. That is important because by allowing these women to use private family law to protect themselves and their families, we will prevent future domestic violence homicides. The Minister could do that by changing his position on the amendments.
Anna Soubry (Broxtowe) (Con)
It is always a pleasure to follow the hon. Member for Slough (Fiona Mactaggart) and I pay tribute to the work done by her and other Opposition Members when they were in Government. They undoubtedly made huge advances in the prosecution of people who had committed offences of domestic violence and put protection in place to enable victims of domestic violence to come forward in both the criminal jurisdiction and the family and civil jurisdiction. That protected not only those women but their children. We part company, however, on this matter as I believe that the Government have gone as far as they should in their acceptance of the definition of domestic violence and what should support any allegation of domestic violence.
I do not think that it is fair simply to criticise those on the Front Bench for not understanding domestic violence, especially if it were suggested that they did not do so by virtue of the sex of the ministerial team or the Secretary of State. I am not suggesting that the hon. Member for Slough said that herself, but others have. It was interesting that in her speech she told us that the peculiarity and horror of domestic violence, which is demonstrated in the fact that women will often suffer for year after year without making any formal complaint or any complaint at all and that they suffer in silence, came as a surprise and a shock to her when she first learned of it in a conversation with two police officers.
Many Members on both sides of the House have experience by virtue of their work in the health service, the criminal justice system or—I am thinking in particular of my hon. Friend the Member for Maidstone and The Weald (Mrs Grant)—as a solicitor in the family division. Unless one has had that first-hand experience, some of the appalling stories one hears beggar belief. It is difficult to accept the fact that appalling abuse can go on, year after year, unreported.
It has been generally accepted across the House that we still have a long way to go. Members of this House conducted an admirable investigation into the inadequacy of our stalking laws, notwithstanding the efforts made by the previous Administration. We know that more legislation is needed to protect from stalking which is, in my opinion, not only an offence of abuse but, in effect, an offence of violence because of the psychological damage it causes. Recent events in Nottingham, which my Broxtowe constituency touches on, show that we still have police officers who, when it comes to domestic violence, simply do not get it. A woman was murdered who had repeatedly complained to the police.
Ian Lucas
I thank the Minister for his letter today setting out the concession that has been made, and I am grateful to him and the Lord Chancellor for that concession.
I thank my constituent, Mrs Marie Hughes, whom I quoted extensively last week. I also thank the peers who listened to last week’s debate in the Commons and, as a result, sent this matter back to this House. Had they not done so, we would not have had the concession.
I pay tribute to those Conservative and Liberal Democrat MPs—I think there were five Conservatives and two Liberal Democrats—who voted against their Whip last week. They listened to the debate, participated in it and contributed to the expression of the overwhelming view, both in this House and in the other place, that the measure could not proceed in the form in which it appeared last week. It was clearly wrong, and I am pleased that we have reached a different position.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
I shall be brief. I pay tribute to the Government for the moves that they have made on the Bill and I welcome the progress on the definition of domestic violence. Although they have extended the range of evidence that will be required, there is still some way to go. I recall that last week the hon. Member for Maidstone and The Weald (Mrs Grant) suggested that the time limits might be up to three years.
I am speaking on behalf of a constituent who came to see me a few weeks ago. She had been habitually abused—emotionally abused—over a number of years. The last straw for her was when her husband tried to set fire to her. She went to hospital. She has medical evidence but she did not want to press any charges. She is, understandably, so traumatised by the experience that she has been through that several months after the incident she can barely speak. She is years away from being able to take to a court or tribunal the levels of evidence that have been suggested. I support amendments 2B and 196B, particularly on her behalf.
Like my hon. Friend the Member for Rochdale (Simon Danczuk), I welcome the amendment on mesothelioma and the moves towards a review, if there is to be one. Oldham is not far from Rochdale and many of my constituents worked in the industry. Once people are diagnosed with the disease, they are, unfortunately, likely to be dead within 18 months. It would be outrageous if 25% of the damages were taken from them. I support amendment 31, but I acknowledge the moves that the Government have made.
Yasmin Qureshi (Bolton South East) (Lab)
I wish to place on record my gratitude to the Lords for their amendments and for their hard work. I also place on record my gratitude to the Opposition Front-Bench team for all the hard work that they have done on all aspects of the Bill, and to my hon. Friends and some on the Government Benches who have fought against certain provisions of the Bill.
I welcome the Minister’s concession on industrial diseases, including mesothelioma, and the fact that the Government will review the issue. I hope they will abandon the proposal to make victims contribute to the lawyers’ costs if they are successful. I ask the Government to consider other industrial diseases that should be placed in the same category, such as industrial deafness, industrial blindness, severe spinal degradation, leukaemia, cirrhosis of the liver and other organ damage.
It cannot be said that people suffering from those conditions are out to make a quick buck. Although we support the idea of a limit on insurance claims or the suggestion that the victim should pay a contribution towards the damages, it is disgraceful that the provisions should apply to people affected by serious illnesses. To say to people who suffering from such illnesses, “By the way, once you have gone through the process of proving your case, your lawyers will have to take their costs from your damages” cannot be right. It is plainly unfair and unjust. I can see that the Lord Chancellor disagrees with me. If I am wrong and he wishes to intervene, I am more than happy to give way.
The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke)
I just want to say that the lawyers do not have to take 25% of the compensation. All the costs are recovered from the defendants in a case that has been won. It is only those costs that are irrecoverable from the defendants that can sometimes be recovered. In a straightforward case there is no reason for anything to be recovered over and above that, and lawyers should not automatically take 25% of the claim and say that it is for their costs.
Yasmin Qureshi
But there is nothing to stop them doing so. The legislation should be simple and straightforward: a person’s compensation, whatever it might be, should be theirs and the legal costs should be a separate item that they can claim for. If I am awarded damages worth £100,000, I should get £100,000 and not have to pay £25,000 to someone else. Any legal costs should be paid separately by defendants’ insurance companies, which are incredibly rich and have loads of money that they can—
Glenda Jackson (Hampstead and Kilburn) (Lab)
On a point of order, Mr Deputy Speaker. The Secretary of State for Culture, Media and Sport has announced on Radio 4 within the last hour that he will make a statement to the House this afternoon, presumably arising from the contributions made to the Leveson inquiry. Has he made that request to you, has it been granted, and if so when will the House hear the statement?
Mr Deputy Speaker (Mr Lindsay Hoyle)
No message has been conveyed to me, and I know nothing of it.
Before Clause 43
Resolved,
That this House insists on its disagreement with Lords amendment 31 and proposes its amendment (a) in lieu.—(Mr Djanogly.)
Motion made, and Question put forthwith (Standing Order No. 83H), That a Committee be appointed to draw up Reasons to be assigned to the Lords for disagreeing to their amendments 1B, 2B and 196B;
That Mr Jonathan Djanogly, Mr Shailesh Vara, Mr Andy Slaughter, Yvonne Fovargue and Tom Brake be members of the Committee;
That Mr Jonathan Djanogly be the Chair of the Committee;
That three be the quorum of the Committee.
That the Committee do withdraw immediately.—(Jeremy Wright.)
Question agreed to.
Committee to withdraw immediately; reasons to be reported and communicated to the Lords.
Section 5 of the European Communities (Amendment) Act 1993
(12 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
19:37 - The House divided: - Ayes: 281 / Noes: 228 - Question accordingly agreed to.
The Financial Secretary to the Treasury (Mr Mark Hoban)
I beg to move,
That this House approves, for the purposes of section 5 of the European Communities (Amendment) Act 1993, the Government’s assessment as set out in the Budget Report, combined with the Office for Budget Responsibility’s Economic and Fiscal Outlook, which forms the basis of the UK’s Convergence Programme.
I welcome this opportunity to debate the information that will be provided to the European Commission this year under section 5 of the European Communities (Amendment) Act 1993. As in previous years, the Government will send to the Commission data on the UK’s economic and budgetary position, in line with our commitments under the EU stability and growth pact.
The Government will submit their convergence programme by 30 April, after debates in both Houses. It explains our medium-term fiscal policies, as set out in the autumn statement, the Budget and the Office for Budget Responsibility’s forecasts, and it is drawn entirely from previously published documents that have been presented to Parliament. It makes it clear that this year’s Budget reinforces the Government’s determination to return the UK to prosperity, and it reiterates our No. 1 priority of tackling the huge deficit that we inherited from the previous Government.
It is because of the decisive action this Government have taken to tackle that deficit since the June 2010 Budget that we have secured and maintained the stability of the UK economy. Last month’s Budget builds on those strong foundations, safeguarding our economic stability; creating a fairer, more efficient and simpler tax system; and driving through reforms to unleash the private sector enterprise and ambition that are critical to our recovery.
As the Chancellor said in his Budget speech, Britain will earn its way in the world, but we can succeed in that goal only if we continue to safeguard our economic stability, tackling the record deficit and debt we inherited from the previous Government. That is why this year’s Budget has a neutral impact on the public finances, implementing fiscal consolidation as planned, and keeping us on course to achieve a balanced structural current budget by 2016-17 and debt falling as a percentage of national income by the end of this Parliament in 2015-16.
Fiscal sustainability is the vital precondition for economic success, but we are doing much more to catalyse growth. First and foremost, we are undertaking far-reaching reform to ensure that our tax system is simple, predictable and fair, and that it supports work.
Kate Hoey (Vauxhall) (Lab)
Given that the requirement for the Government’s assessment was passed under the Maastricht treaty, for which no one in the country voted, and that it must go to a Commission that no one in this country has elected, why does an independent British Parliament have to go through this procedure—this charade—every year?
Mr Hoban
We have signed up to certain aspects of the stability and growth pact. One precondition is that we present this information, as we have done every year since the Maastricht treaty. I will set out later why the UK is treated differently in this process from other European Union member states, but there is nothing new in the information that we will supply and it has been presented to the House. When the EU sought to revise its economic governance package, we were very clear that, whereas other member states provide information to the Commission in advance of their budget-setting process, the UK will provide it after our process.
Mr John Redwood (Wokingham) (Con)
Does the Minister believe the UK is bound by the Maastricht rules that its deficit should be 3% per annum and no more, and that it should have a stock of debt of only 60% of national income?
Mr Hoban
We are required to endeavour to achieve the Maastricht criteria. A very different regime is in place for the UK because of the opt-out that John Major negotiated under the Maastricht treaty. We have been clear, as the economic governance package has developed in recent years, on preserving that opt-out and the different treatment for the UK as compared with other European member states. One achievement is that we are not subject, for example, to the sanctions regime to which other member states are subject.
We jealously protect our particular position in the process, as I am sure hon. Members on both sides of the House would want us to do. Clearly, were we to follow the Leader of the Opposition’s policy—he wants us to join the eurozone at some point—we would have to give up those safeguards and protections. That is not a policy that this Government or the Conservative party would support.
Kelvin Hopkins (Luton North) (Lab)
Setting aside my views on the Budget, which are probably not printable, is not talking about the stability and growth pact at this time simply building castles in the air? We have neither stability nor growth in any part of Europe at the moment. It might be that we are waiting for things to turn, but even in Britain we face savage deflation if we do not change our policies.
Mr Hoban
Europe needs to tackle its fiscal deficit and put in place the policies that will lead to economic growth. One reason for such uncertainty in the eurozone is that a series of imbalances have built up in different European economies. It is important that we tackle them and set out a very clear course for growth. I shall come later in my remarks to some of the actions that the UK Government have led to ensure that the EU spends more time talking about growth and finding ways in which we can accelerate economic progress in the European economies.
Let me mention some of the measures we are taking at home that were set out in the Budget. We are committed to creating the most competitive tax system in the G20. We are cutting the rate of corporation tax to 22% by 2014, which will be the lowest rate in the G7 and the fourth lowest in the G20. [Interruption.] The hon. Member for Nottingham East (Chris Leslie) pre-empts my remarks, because I was about to say that we will remove the ineffective and uncompetitive top rate of tax.
I should say to the hon. Gentleman that I talk to businesses that wish to grow and businesses that want to locate here in the UK. They commend the Government for the corporate tax reforms in which we have engaged. In Treasury questions earlier, my right hon. Friend the Chancellor referred to remarks made by the chief executive of GlaxoSmithKline, who responded positively to the tax changes that we introduced. He is not alone—other businesses are moving to the UK as a consequence of our corporate tax arrangements.
Clearly, when we are trying to attract international business men to work here in the UK, and if we want to retain high-paid, talented business leaders here, the 50p tax rate is an issue. It is an outlying issue in G7 countries and affects location decisions for businesses. Cutting the top rate of tax is therefore the right thing to do. We set out the cost—£100 million—in the Red Book and highlighted measures that would raise five times that amount from the very wealthiest in society.
That was a difficult decision, but I believe it was the right one if we want the economy in this country to grow. As was mentioned earlier, one consequence of the higher rate that the previous Government introduced—they did not bother to introduce it in the first 12 years they were in office—was that 20,000 people moved from the UK to Switzerland. That demonstrates the negative impact of a 50p rate. If we want to be competitive, we need a competitive tax regime for both personal and corporate taxes.
Kelvin Hopkins
I do not believe that nonsense about people moving because of the top rate of tax. In France, the socialist opposition have suggested a top tax rate of 75% and said that if people move away because of it, plenty of other people who are just as talented will be prepared to take their jobs because they will still earn a lot of money.
Mr Hoban
To be fair to the hon. Gentleman, I suspect he is one of the few Opposition Members who supported the 50p rate throughout the period of the Labour Government, and is not one of the late converts that many of his hon. Friends have become.
As I have said, it is important that we create the right competitive conditions for business to flourish, and this Government will continue to invest in our nation’s future. We have announced that we will take forward many of Alan Cook’s recommendations on roads and develop a national roads strategy; we have confirmed investment to provide ultrafast broadband to 10 cities across the UK, with a second wave of cities to be identified in future; and we will continue to support the establishment of a new pension infrastructure platform to unlock an initial £2 billion of investment by as early as 2013.
However, a return to prosperity in the UK depends not only on what is happening here, but on what happens beyond our shores.
Mr Stewart Jackson (Peterborough) (Con)
My hon. Friend makes a coherent argument, but we have been told on many occasions that what happens in the eurozone is important for exports. Without any monetary stimulus, and without major fiscal changes or major structural reforms, how can a cumulative 3% year-on-year reduction of budgets in southern Europe in countries such as Portugal, Greece and Italy possibly assist us in growing our economy out of the recession of the past few years?
Mr Hoban
My hon. Friend needs to recognise that, in several countries that have a programme in place, there is a requirement to make structural reforms. A number of member states are already embracing structural reforms, tackling issues such as restrictions on the labour market and looking at ways to tackle the burden of regulation. We are seeing the structural reform that goes hand in hand with fiscal consolidation to create a stable and sustainable platform for economic growth. Here in the UK, we are undergoing fiscal consolidation, but at the same time we are engaging in supply-side reforms to help stimulate growth in the economy. I do not see the two as mutually exclusive. Indeed, they need to go hand in hand if we are to deliver growth.
Kelvin Hopkins
I shall reserve most of my remarks for later when I hope to have the chance to speak. However, I must say that supply-side reforms are all very well, but if there is no demand in the economy, it will not grow but contract.
Mr Hoban
It has been demonstrated time and again in a host of different economies that supply-side reforms are vital, because they reduce some of the costs on businesses and enable them to invest and improve productivity, and in that way they stimulate demand and growth.
Hon. Members are right to focus on events beyond our shores. As the Office for Budget Responsibility said in its March report,
“the situation in the Euro area remains a major risk”
to the UK’s economic forecast. More than 40% of our exports are to the euro area, and recent events in the markets remind us that euro area countries need to make painful adjustments to their public finances and external deficits. It is a difficult path that they have to walk, although new Governments in the likes of Ireland, Portugal, Spain and Italy are walking it. That is the logic of the single currency to which they are all committed, and progress is being made.
The European Central Bank’s monetary loosening has helped to stabilise the banking system, and the trillion dollars pumped in through the long-term refinancing operation has been helpful. There has been progress in stabilising Greece, and—as I have said—a number of countries have announced important economic reforms.
As well as these measures, important longer-term reforms have been made since we last debated the convergence programme. Those reforms include a stronger, more effective stability and growth pact following agreement of the “six pack” in December 2011. A new macroeconomic imbalances procedure will provide an assessment of potential economic risks across Europe, with sanctions for euro area countries that fail to take action. Importantly, the Commission has put forward proposals to improve co-ordination of budgetary processes between euro area countries.
The treaty on stability, co-ordination and governance—the fiscal compact—was signed in March by 25 member states and it also has the potential to embed stronger rules on fiscal discipline. Together, these reforms represent a stronger, reinforced system of economic governance for the EU and the euro area in particular. While many of these stronger measures may not be right for the UK, they can support stability in the single currency area.
Mr Hoban
If I may, I will finish my paragraph as it may clear up any misapprehensions that the hon. Gentleman has.
I would like to reassure the House that following these reforms the UK is still not subject to sanctions under the strengthened stability and growth pact—the EU treaty is clear that they apply only to EU area countries. Unlike other countries, the UK will only present its convergence programme to the Commission after the Budget is presented to Parliament—the procedure that we are following today.
Graham Stringer
Does the Minister read the newspapers? Has he not noticed that Europe is getting less and less politically stable and that many of the European economies are shrinking? Whatever titles are put on the policies, that is what is really happening. Would it not make sense for the Government and this country to support an as stable as possible break-up of the euro, which would provide growth in Europe and in the United Kingdom?
Mr Hoban
It would be inappropriate for the UK Government to dictate the economic policies to be followed by those in the eurozone. Members of the eurozone have made it very clear that they wish to remain part of it, and there are even member states queuing up to join it. Indeed, if we have an independent Scotland, it might consider joining the eurozone. There are challenges, but there is a strong political commitment in the eurozone for the euro to remain in place.
Mrs Anne Main (St Albans) (Con)
The Minister is making a genuine argument in favour of stability, but the rise of the far right—and Marine Le Pen receiving one in five votes in France—shows that whatever was said before, when all these treaties were signed, may not be current now. There is great unrest on the part of the public about what is being done in their name, both abroad and here.
Mr Hoban
It is not appropriate for any of us to provide a running commentary on the French presidential elections, but it is important that Governments, whether inside or outside the euro, make their argument as to why they believe that the measures required to bring about fiscal stability and economic growth are necessary. Those arguments need to continue to be made, because that is vital to Europe’s long-term interests. We will wait and see what the outcome of the French presidential election is and what the view of the new President is on the fiscal compact.
Richard Drax (South Dorset) (Con)
What will the Minister tell the millions of people in the eurozone when it goes horribly wrong—as it will—and their lives are ruined, given that we have had the chance, as has been suggested, to rebalance the euro from a position of control? It will collapse.
Mr Hoban
My hon. Friend should recognise the strong political consensus in the eurozone for the continuation of the euro. The actions of member states have sought to stabilise the situation in the eurozone, and that is why they have set up the European stability mechanism and boosted it with funds to strengthen the firewall. They are also looking at recapitalisation of banks and trying to stabilise the situation. The actions of eurozone countries are attempts to reinforce the stability of the eurozone, and they have also embarked on reforms to try to bring about closer fiscal integration, and the fiscal compact is part of that.
Mark Hendrick (Preston) (Lab/Co-op)
Will the Minister accept that even though we are not members of the eurozone, this country is still teetering on the brink of another recession? Does he also accept that the euro will continue for many decades to come—probably ad infinitum—albeit without some current members?
Mr Hoban
I remind the hon. Gentleman that as a consequence of the actions taken in the Budget one of the rating agencies, Standard & Poor’s, reaffirmed the UK’s triple A rating—[Interruption.] If the hon. Member for Nottingham East paid attention and read the newspapers—he accused me of not doing so—he would have seen that post-Budget one of the big rating agencies reaffirmed our credit rating with a stable outlook. Actions have been taken to stabilise the UK economy, and that is important.
This is not a debate about the future of the eurozone and whether individual members should be in or out, because that is a matter for the national Governments of those member states, not for us. What we cannot ignore is that the stability of the European economy is a vital factor in determining the level of economic growth in the UK. As I said, 40% of our trade is with Europe. We still export significant amounts to places such as Ireland and, historically, we have exported more to Ireland than we have to Brazil, Russia, India or China combined. It is important to recognise that jobs in all our constituencies are dependent on trade with the European Union and the strength of European economies.
Stewart Hosie (Dundee East) (SNP)
I agree entirely with what the Minister has said about the need for stability, not least for UK recovery. I also welcome what he said about the fiscal compact and the other measures being taken. Does he agree that if there is a legitimate debate in any country about growth versus austerity, it is not—as some more excitable colleagues suggest—any indication of political instability in the eurozone, but merely a debate about the direction of travel that a country’s economy might take?
Mr Stewart Jackson
I thank the Minister for giving way; he is being his normal generous self. Do we not have a responsibility to the millions of young people in southern Europe who are on the edge of penury and economic misery, essentially because of this institutionalised, obdurate approach, principally from the Germans, and the failure to accept that the European Central Bank should be the lender of last resort? This political project, which the euro is, is plunging millions of working people in southern Europe into poverty for the next 10, 15 or 20 years. Surely we have a moral duty not to be complicit.
Mr Hoban
My hon. Friend would, I think, be the first to criticise other member states seeking to lecture us on our economic policy, so we need to be careful not to lecture them either. As I said, there is the political will in the eurozone to keep the euro, and its actions are consistent with that. Whether through closer fiscal integration or increased firepower for the European stability mechanism, those signs are there. The fiscal compact is a significant step towards closer fiscal integration.
Mr Nigel Dodds (Belfast North) (DUP)
The Minister talks about the political will in Europe to continue with the euro, but one wonders about the popular will among the peoples of Europe. He knows that the Irish Republic will shortly hold a referendum on these measures. Does he welcome that and would he encourage other countries to go to their people and seek their views, as opposed to the consensus among the political elites?
Mr Hoban
Different member states have different constitutional requirements and different histories on the use of referendums, so it is not necessarily appropriate for a politician here in Westminster to lecture others on how to ratify treaty changes.
Before I took the intervention from the hon. Member for Blackley and Broughton (Graham Stringer), who has now disappeared, I was talking about how the UK fits into the economic governance measures. We will present the convergence programme to the Commission after the Budget has been presented to Parliament—the process we are going through at the moment. The EU, alongside other international institutions such as the OECD and the International Monetary Fund, can comment on the Budget, but, crucially, we are under no obligation to take action. It is up to the Government, not Brussels, to decide what action to take in the UK.
Of course, as the euro area moves towards closer fiscal integration, we must remain vigilant to protect the UK’s interests. Where matters are rightly for discussion or agreement by all 27 member states—for example, on the single market or financial services—they must be agreed by all 27 member states. In case there is any doubt, I can reassure Members that the UK remains at the heart of the EU’s economic debate. It is because of the Prime Minister’s recent letter with 11 other Heads of State or Government ahead of the March European Council that the Council conclusions were agreed with a commitment to ambitious structural reforms at the EU level. That included concrete Council conclusions on strengthening the single market and its governance; completing the digital single market by 2015; making further progress in reducing administrative burdens; and boosting trade by removing trade barriers and ensuring better market access and investment conditions.
The Government will push for even more ambition, however, because a return to sustainable growth is the only way for EU member states to pay down their debts and exit the current crisis. It is essential that the Commission uses EU-level policy levers fully to support growth, but member states must continue to take tough decisions to prioritise the most growth-enhancing reforms, matching the kind of ambition that the Government have demonstrated since coming to office, including in our most recent Budget. The Budget information we are providing to the Commission in the convergence programme is part of the European semester process, now in its second year, and will be something that the Commission will look at.
Mr Redwood
Does the Minister think that, when the Commission reviews the British Government’s homework, it will say that we need to go further and faster with the cuts or endorse the Government’s programme?
Mr Hoban
I do not wish to pre-empt the Commission’s conclusion—it would be wrong to do so—but when other international organisations have looked at the Budget and the Government’s path to fiscal reform, they have clearly endorsed keeping to the path and sticking to the course. That is important. It has meant that we have retained the confidence of international markets, and interest rates are low as a consequence, which is to the benefit of households and businesses. That is vital to the programme of continued economic reform in the UK.
It is important that we discuss these matters with international partners and have a debate about economic policy in Europe, but at home we have to stick to the path required to deliver the necessary reforms. The Budget builds on the Government’s ambition to create a stable and prosperous economy, it shows our commitment to fiscal consolidation and economic growth, and, along with the OBR’s forecast, forms the basis of the UK’s convergence programme. We are taking the right path, and I hope that—
Kate Hoey
I want to be clear in my own mind, because obviously this is important. If the House was to say no to this tonight and say, “Actually, we don’t think it’s got anything to do with the Commission what we are doing in our independent country. We’re not part of the eurozone,” what would be the repercussions? What would it matter?
Mr Hoban
No, I will allow the hon. Gentleman to make his own contribution in his distinctive style, and doubtless I will have a chance to wind up and respond to the points made. However, I have gone on for nearly 30 minutes, and other hon. Members want to take part. I will now allow him to do so.
Chris Leslie
(Nottingham East): My hon. Friend the Member for Vauxhall (Kate Hoey) asked an extremely pertinent question, and I want to come back to it later. First, however, I commend hon. Members from both sides and all parties for spotting that this debate was so relevant. The motion, as framed, does not leap out from the Order Paper, and when hon. Members go to the Vote Office to find these convergence documents, they are met with a little mystification. Let us turn to page minus-2, so to speak, of the Budget Red Book.
Chris Leslie
Indeed, I was here this time last year making a very similar, uncannily parallel speech, but I will point it out again. Underneath where it talks about Crown copyright, the ISBN number and where it says:
“Printed on paper containing 75% recycled fibre”,
it reads:
“The Budget report, combined with the Office for Budget Responsibility’s…fiscal outlook, constitutes the Government’s assessment under section 5 of the European Communities (Amendment) Act 1993”.
That is relevant to today’s debate. It is written in very small font for those who might have difficulty reading it. It mentions the European Communities (Amendment) Act, which sounds like a very British piece of legislation, but, being eagle-eyed, hon. Members will have spotted that all that Act does is refer to the Maastricht treaty, article 2 of which states:
“The Community shall have as its task…a harmonious and balanced development of economic activities, sustainable and non-inflationary growth”.
Of course, it also relates to article 103, which talks about economic policies being a “matter of common concern” that should be co-ordinated within the Council. These are the sorts of words that some find difficult to stomach, but the article continues:
“For the purpose of this multilateral surveillance, Member States shall forward information to the Commission about important measures taken by them in the field of their economic policy”.
In a sense, the right hon. Member for Wokingham (Mr Redwood) was right to say that this is the homework that has been set by the European Commission, and we are completing our homework today.
Mark Hendrick
We will oppose the Government tonight, but we will do so not because we disagree with the European Union having a look at our Budget—these multilateral surveillance procedures have been going on for the best part of 20 years—but because we disagree with the measures in the Budget.
Chris Leslie
People will have their different reasons for opposing the motion, and my hon. Friend is right to state his reason for opposing it. My reason for opposing it is that, essentially, it asks the House to approve the Government’s assessment of the economy. That is the nub of the question. We are being asked to approve the Budget Red Book as their assessment of the economy. Sadly, we know that the Government are out of touch not only with the public but with economic reality. Their grip on what one might call the actuality of the real economy leaves a great deal to be desired.
This is an opportunity not only to take stock of the Government’s approach to the economy as a whole but to look at their analysis of what is happening. We know that they are pursuing failing policies on jobs, economic growth and deficit reduction. The Minister proudly defended the cut in the 50p top rate of income tax for the wealthiest 1% in society. The Government are giving a tax cut of about £40,000 to millionaires at the expense of pensioners and working people. Is it any wonder that their popularity is falling precipitously as a result? I am glad to have an opportunity, every time the Minister speaks at the Dispatch Box, to remind those watching these proceedings of the Government’s priorities. Living standards are being squeezed, and the VAT rise is hitting people hard, as are the cuts to tax credits and the cost of living generally. Independent experts say that a typical family will be worse off by £511 this year, but that is the Government’s choice; they want to give millionaires that advantage.
The motion relates to the Government’s assessment of the economy. Such a poor analysis as that presented in their Budget Red Book betrays either extreme wishful thinking on the part of the Treasury or, more likely, a dangerous detachment from the key decisions that Ministers need to confront. Their understanding of what is happening to business, employment and the cost of living is far removed from the experience of the vast majority of the public.
I urge all hon. Members to look at the facts and to examine the way in which the Budget Red Book is so detached from reality. On page 11, the Government claim that growth is
“strengthening over the forecast horizon”.
Growth was minus 0.2% in the last quarter for which we have figures, and the economy has been flatlining for a long time. It has performed very poorly since the spending review, while that of the United States has grown by more than 2%. The Office for Budget Responsibility is predicting growth of just 0.8% in 2012. Last year, in this very debate, we heard that the OBR was forecasting growth of 1.7% in 2012, and that was after several downgrades. There is clear evidence that the Government’s assessment of the economy is entirely out of touch with reality. The OECD is predicting good things for the United States, Germany and Japan, which are all predicted to grow faster than the United Kingdom this year.
What is worse is that on page 15, the Red Book states that we will experience
“positive growth, consistent with experience from past financial crises”.
Last year’s Treasury Red Book said that we were expecting a recovery that was
“in line with previous recoveries”.
I know that my hon. Friends who are students of these matters will be familiar with the charts and analysis produced by the National Institute of Economic and Social Research and others that compare the progress of recessions and recoveries across the decades, from the great depression to the recessions in the 1970s, 1980s and 1990s. When we consider our present position, we see that we are still 4% off the pre-recession peak. We have not yet clambered out of the hole. This is proving to be one of the longest and deepest financial crises, and the Government have failed to make any headway in ensuring our recovery. Their claims that we are in a parallel situation to previous recessions and financial crises prove that they are not in touch with reality.
Mrs Main
I note that the shadow Minister is making a principled argument and that he disagrees with the figures. If he did agree with the Budget figures, would he still feel that we had to submit them for scrutiny? We are a sovereign country. Do we really need our homework to be checked by Europe?
Chris Leslie
That is an interesting question. Obviously, I believe in the rule of law, and there is a legal obligation on Her Majesty’s Government to abide by the treaties. This is where we come back to the question that my hon. Friend the Member for Vauxhall asked earlier. She asked the Minister what the consequences would be if the motion were not passed by the House today. That is the key question that all hon. Members should be pressing the Minister on when he winds up the debate. I will give way to him now if he can answer it. What would be the consequences for us if we did not vote in favour of the motion today? I am happy to give way to him. For the reasons that I have suggested, the Government’s poor assessment of the economy does not inspire me to vote for the motion. I do not see why we would want to support their woeful assessment. The Minister is not giving us a reason for voting for it.
Kelvin Hopkins
I entirely agree with not submitting the report to the European Union, but is not the growth situation even worse than my hon. Friend suggests? Even as we speak, the eurozone is plunging into a deeper crisis. Because of the weakness of the euro, the pound is unfortunately strengthening against the euro, which is going to make it harder for our manufacturers to export. The Chief Secretary to the Treasury said yesterday that we needed to make even more cuts than those already planned. So far, we have experienced only about a quarter of the planned public expenditure cuts. Is not the situation far worse than my hon. Friend suggests?
Chris Leslie
We have a blinkered and, in many ways, deluded approach to austerity—or über-austerity, as some might characterise it—which is hurting not only in the eurozone but here as well. What angers many people is that the Government’s approach to helping the eurozone out of its difficulties is to throw money at it. Technically, that money is going to the International Monetary Fund, but everyone knows that it is all about eurozone bail-out funds. We are giving a further £10 billion loan, even though the Americans and the Canadians are all saying that we should stand firm and negotiate with the wealthy eurozone countries, including Germany, and make them dip deeper into their own pockets. If they do not do that, and if Britain, China, America and others provide the money, those eurozone countries will not do the deep, serious thinking that they need to do, and they will not take the consequences of their situation within the single currency. They will not put up a proper firewall, as they ought to do; they will not build what has been characterised as the “big bazooka”.
That is why we have consistently expressed our scepticism about the Chancellor’s decision to cave in and give extra resources—British taxpayers’ money—to the IMF, which we all know is going to be used for that particular purpose. We like the IMF for its work with other countries in the developing world, and of course we want a strong IMF, but we should not be letting those wealthy eurozone countries off the hook. They need to confront those issues.
Mr William Cash (Stone) (Con)
I apologise for coming in late, but I have just got off the plane from Denmark where I was meeting the chairmen of the scrutiny committees of all the other national Parliaments of the European Union. We have recently witnessed the resignation of the Dutch Government and the consequences of the French elections. Would the House be interested to know that there is deep disquiet behind the scenes throughout the whole of Europe, as I discovered through speaking to those chairmen in the last couple of days?
Chris Leslie
I am afraid that I am not surprised to hear that that is the case. The hon. Gentleman spends a great deal of time and effort monitoring how these issues progress. Personally, I feel we need to find ways of supporting and stabilising the situation in the eurozone, but I do not think that the Government’s strategy is the right way to do that. However, I digress.
Mr Stewart Jackson
I feel it appropriate to give the shadow Minister some friendly advice. One reason why my party was not credible on the economy until quite a few years after we lost the election was that in many respects we did not face up to the fact of the legacy we left. I remind him that he really should be looking at the wider picture of Europe rather than focusing on the national situation here. The fact is that real-terms public expenditure rose by 53% from £450 billion to £700 billion between 2000 and 2010. His party ran a structural deficit in times of economic growth. That is the situation in which we find ourselves now.
Chris Leslie
I obviously disagree with the hon. Gentleman’s assessment, but he made an important point earlier about the plight of those who are suffering as a result of the austerity approach being applied in southern European countries in particular. I worry greatly about that; it is a matter of concern. It is also a concern, however, for our constituents here in the UK. We take a different approach on principle about the right ways to repair our economy. We believe that a stronger emphasis on growth is necessary to generate revenues; it is not just about public expenditure cuts, which do not provide the way out of the situation. I also disagree that the motion is a general debate about the state of the European economies. We are debating whether the Red Book provides a right, accurate, fair and good assessment of the state of the British economy such that we can submit it, as we are required to do by the treaties, to the European Commission. I am simply following the strictures placed on us by the Maastricht treaty.
Stewart Hosie
That is the key point. The hon. Gentleman quoted from the 1993 Act—a Tory Act, of course—about the need to submit information to the European Commission, including information on industrial investment. We have seen forecasts of 6.7% business investment growth ending up being a negative 0.8% out-turn. He is thus absolutely right that the Red Book is not credible in terms of the objective set out in the 1993 Act.
Chris Leslie
It is that lack of credibility that makes me want to oppose the motion. The hon. Gentleman picked up on the point about business investment. I encourage hon. Members to turn to page 16 of the Red Book, which says:
“business investment will pick up and make an increasingly strong contribution to growth in each year of the forecast as confidence builds and credit conditions ease”.
Just yesterday, the trends in lending data came out from the Bank of England. Year on year, net lending to all businesses—small and medium-sized enterprises in particular—has fallen in every single month since the Government took office. That is despite Project Merlin and all the attempts at credit easing, which have still not come into effect and will do nothing to help credit availability. Last year, they said in their document that
“Credit conditions have shown signs of stabilisation.”
That has not come to pass, so I have no confidence that their current propositions will come to pass either.
On borrowing, page 12 of the Red Book claims that we are heading for
“£11 billion lower over the forecast period than was projected at Autumn Statement 2011”,
which is sophistry because we know that in the spending review figures from October 2010, the Government projected a set of borrowing statistics that have had to be ripped up, because we are on a trend that takes us into £150 billion of further borrowing over the lifetime of this Parliament. The new borrowing figures out this morning confirm that particular trend. That is where things are going.
The Chancellor keeps restating that the UK is “a safe haven”, although he slipped a little bit today in saying that it was “a safer haven”. There he was in Washington this weekend, saying that the UK has “solved our problems”. That is our Chancellor’s assessment of our economy. Such dangerous complacency beggars belief, and I think that it is a sign of arrogance.
Stewart Hosie
The hon. Gentleman picks up on our Chancellor’s reference to “a safer haven”. Does he think that could be because the debt figures on the treaty calculation are no longer expected to peak at 87% of gross domestic product as was forecast a year ago, but at 93% of GDP—a catastrophically high figure?
Chris Leslie
Of course, that is because of the Government’s record of high unemployment, with statistics showing not much improvement, an increase in welfare costs and so forth. All those things are a drag on public expenditure; they are making things no better. That is the result of the Government’s misguided strategy. On the wider issue of employment and unemployment, I challenge hon. Members to find much in the Red Book that provides an assessment of what is going to happen to them. We know that we have the highest unemployment in 17 years, with 2.67 million people on the dole. We know the story that long-term unemployment doubled in the last year and that youth unemployment is at a record high. My hon. Friends do not need me to repeat these figures.
On inflation, the Red Book says that
“inflationary pressures, which the OBR considers to have been the main drag on UK growth over the past 18 months, have started to abate, easing the pressures on household incomes and improving the outlook for consumers.”
Well, consumer prices index inflation rose, I think, in the last month. We are at around 3.25%. We should not forget that the Chancellor’s target for the Governor of the Bank of England is 2% inflation. Indeed, Paul Tucker, the deputy governor of the Bank of England, warned this week that inflation is likely to stay above 3% for much of 2012. Again, even on inflation, the Government’s assessment of the economy is just not correct. There is no mention of consumer confidence in the analysis. Although there is a section on “Investment and confidence” on page 14, it does not mention consumer confidence at all. The consumer confidence indices have been down and are worsening at minus 31%.
Gavin Shuker (Luton South) (Lab/Co-op)
My hon. Friend talks about confidence. Did he see the comments of Barney Frank, a leading US congressman, when he talked yesterday about this Government’s obsession with austerity measures, which went right to the heart of the credibility of whether or not they could reduce the deficit? Coming from Washington as he did, he was clear that this Government’s key measure for reducing the deficit in their period of office was counter-productive.
Chris Leslie
Indeed. All across the globe, developed countries are realising that a strategy focused singularly on austerity alone will not be the solution. We must have a greater focus on growth and job creation as a way of generating revenues.
I have spoken for too long. Labour Members believe that this motion is flawed because the Government’s assessment of the economy is poor. Others will have their own reasons for voting against it. I want to hear the Minister’s justification for the motion and to find out why it would be cataclysmic if it did not go through. The consequences of that are a key point. As I see it, the Government misunderstand the economy, they are misreading the growth prospects of the UK and they are misconstruing what is happening in the employment markets and business investment. I therefore urge the House to reject this mistaken assessment of the prospects for our economy.
Mr John Redwood (Wokingham) (Con)
I have some sympathy with the Minister in this debate, which is about colossal issues, such as the future of economic prosperity throughout the European Union and its impact on our own economy, yet it is also a rather absurd debate. Successive Governments have felt that they have to table documentation and figures to the European Union, but they are embarrassed by that fact because they know that many of us feel that it is this Parliament, which answers to the British people, that should debate and settle these issues, and that what we are doing is none of the EU’s business. If we do a good job, we will stay in office; if we do a bad job, we will be thrown out of office, and the British people will rightly choose another group of people as they decided to do in 2010 as this crisis developed. We think that that is the right approach.
I must tell my hon. Friend the Minister that if the Opposition had tabled a motion suggesting that the House should tell Brussels that we would no longer send it these documents, I would probably vote with the Opposition, because I would consider that a sensible way of trying to send an obvious message to Brussels. However, we are being invited to spend more time debating the crucial topic of what kind of economic policy would best promote growth and stability in our own country, and what contribution wider economic policies can make to stability and growth in the European Union as a whole.
The description of the pact that we are debating as a stability and growth pact is a grotesque bad-taste joke at the expense of the European peoples. It is clear from the way in which it now operates in the euroland countries that it is actually an instability and recession pact. It is a pact for mutually assured deflation. It is intended to do more damage at the very point in an economic cycle when an economy is performing very badly, to withdraw spending power from both the private and the public sector in an economy with too little demand, and to take jobs away in an economy with a problem of mass youth unemployment.
Mark Hendrick
I accept that the policies of many euro area member states are deflationary, but it is ridiculous to deride them simply because those countries are members of the eurozone when our own Government’s policies are equally deflationary.
Mr Redwood
As I shall make clear shortly, our policies are rather different. For one thing, the coalition Government decided to increase current public spending, which is running at £64 billion a year more this year than in the last year of Labour government. The Red Book shows that real current public spending has risen in each of the two years of the coalition Government, although not by very much. The Government are clearly not trying to deflate the economy by introducing massive current spending cuts, given that overall current spending has been rising.
Stewart Hosie
The right hon. Gentleman, who knows the Red Book inside out, will recall that it makes it clear that the Government’s projected discretionary consolidation by 2016-17 amounts to £155 billion a year, of which 81% will be delivered by cuts in services and the remainder by tax increases. The hon. Member for Preston (Mark Hendrick) was right: the Government are embarking on precisely the policies for which the right hon. Gentleman is criticising others.
Mr Redwood
I am afraid that the hon. Gentleman has not read the Red Book intelligently. The 80:20 statistic on which Members seem to rely relates to changes compared with much bigger growth in public spending that was in inherited programmes. It is not the reality. The reality of the Government’s strategy is a massive increase in taxes over the planned five years of the present Parliament to pay for rather modest increases in current public spending over the life of the Parliament, and to get the deficit down. The 2010 strategy suggested that tax revenues would be £171 billion a year more in year 5 than they had been in the last Labour year. The Government have now had to reduce that figure a bit because—as other Members have pointed out—the expected growth has not been forthcoming, for a variety of reasons.
We need to promote growth vigorously and actively, which is common ground between the Government, coalition Back Benchers and many Opposition Members. The argument, surely, concerns what measures are most likely to bring that about. It appears that over the last four years both Governments have operated policies involving actively increasing public spending, with the exception of capital spend—certainly overall spending has risen—and actively promoting massive borrowing, while at the same time the economy has bombed very badly. I am not suggesting that that is causal, but it should lead Opposition Members to ask why that fiscal injection—massive borrowing and an increase in current public spending—has not done the job. There seems to be some disconnection between the remedy that they recommend and the reality of what is happening.
When we look at the way in which other countries have pulled out of crises of this kind, and, indeed, the way in which Britain has pulled out of similar but, perhaps, less aggressively damaging crises than the one that we inherited, we see that there is nearly always a period during which public spending must be reduced or controlled quite strongly to make room for a private sector recovery, and that a series of measures to promote that recovery will then be necessary. As I have explained at length in the past, banking reform and competitive banking are crucial. The Government’s theory favours a tight fiscal policy and a loose monetary policy. They want to allow more money to circulate through the private sector through credit and through the banking system, and they want to lower the deficit gradually in the public sector so that the fiscal policy becomes a bit tighter.
Mark Hendrick
The right hon. Gentleman makes great play of tax revenues. We all know where they come from—they come from those who can least afford to provide them—but given that only one private sector job is coming along to replace every 10 jobs that are being lost in the economy, where will they come from in future?
Mr Redwood
So far the strategy has generated quite a lot of new private sector jobs, which is very welcome, but it is obvious that it needs to generate many, many more over the next three years if it is to secure the savings on welfare benefits that I am sure all Members wish to see.
It is nonsensical for Opposition Members to say that the poor will be paying the taxes. We have just seen a big increase in thresholds which takes many people out of income tax altogether at the lower end of the income scale. Moreover, if the hon. Gentleman looks at the Red Book, he will see that there will be a sharp acceleration in self-assessment income tax—the income tax that is paid mainly by the rich—once we get the rate down. I know that Opposition Members do not like reading the figures in the Red Book, but it provides a much better case than Ministers ever provide for why we need to get back closer to Labour’s rates of income tax.
One of the things that I most admired about the former Prime Minister and last Chancellor of the Exchequer but one was his insistence that 40% was the highest rate of income tax that could be charged to optimise the amount of money obtained from the rich. He stuck to that view throughout his time as Chancellor and most of his time as Prime Minister. We all know that he only put it in as a political trap at the end of his period in office when he could see the writing on the wall, but it is obvious from the Red Book figures that he was right: 40% is about as high as we can go to optimise the revenue.
According to the forecast in the Red Book, the revenue will stream in after the rate falls to 45p. If Opposition Members look at the Red Book, they will see that last year, under the 50p regime, self-assessment income tax fell by an amazing 9%. That was because rich people who have a lot of freedom and ability to decide how much to pay themselves—I know that Opposition Members do not like that, but it happens to be the state of play—decided to pay themselves a great deal less. Both the outgoing and the incoming Governments had said that the tax was temporary, so they decided that they would hold back their income. It was obvious that they would do that.
Gavin Shuker
The right hon. Gentleman is talking like a cheerleader about the Laffer curve. Why does he think that the UK economy is not growing?
Mr Redwood
I think that the UK economy may be growing. We will know the facts tomorrow, when we see the first quarter figures, but I suspect that the economy will grow this year. I accept the Government’s forecast of a slow and modest rate of growth. Why, though, is the economy not growing more quickly? There are two main reasons.
The first reason is banking. All the cash that the Bank of England is printing is not going into circulation in the private sector. It is very helpful to keep the Government’s rate of interest down, and it is very helpful to make the increase in public spending more affordable because it controls the interest rate cost for the Government; but the money cannot enter the private sector in any real quantity because the banks are under a huge regulatory cosh to hold more cash and capital at what is, in my view, the wrong stage in the cycle, which means that we cannot secure the growth in banking credit that would finance a better recovery.
The second reason is that taxation is now very high overall in the United Kingdom, which—combined with the inflation tax that has resulted from the high inflation rate that we inherited, which has remained persistently high—means that real incomes are being badly squeezed. It is plain to us all that real incomes started the squeeze under Labour, when the recession really hit, and that that squeeze has continued. A progressive squeeze on the scale that we have experienced since 2008 hits demand and makes recovery that much more difficult.
Graham Stringer
Is there not a third reason: that we are in the wrong part of the world, next to the eurozone, which has no mechanism for the poorer countries to get rid of their trade imbalances or for Germany to get rid of its trade surplus? Normally that would be done by revaluing or devaluing those currencies, but having one currency makes it impossible.
Mr Redwood
I know that you would like me to wind up quickly, Mr Deputy Speaker, because others wish to contribute, but it is such a pity, as this is a crucial issue. I entirely agree with the hon. Gentleman that there is great difficulty in financing the big balance of payments deficits in the eurozone. Now that a mechanism has been found—German surplus deposits in the ECB being routed to weak member states’ banks through the ECB—the Germans are kicking up a fuss, because they suddenly realise that they have €600 billion at risk and they are not very happy. However, as the main surplus country, Germany has to finance the transfers in the union, and until she does so actively and in an encouraging way, there will be all these kinds of problems.
We have problems in Greece, Portugal and Ireland, which we know about. We now have deep problems developing in Spain, and we even have a problem in the Netherlands—which was meant to be one of the good guys—because of a falling out over the rather modest cuts needed to hit the Maastricht criteria. I agree that we need to get to 3% and 60% in due course—I have no problems with the European targets—but I feel strongly that we should do so for our own reasons, in our own time. It is nothing to do with Europe how we run this economy, and the sooner Ministers have the courage to tell Europe that, the better.
Kelvin Hopkins (Luton North) (Lab)
Let me say first that the Minister is heroic to take this brief, which is—to understate the matter—a difficult one. I do not envy him his job of having to try to sell it.
There are two good reasons for not sending the Budget report to the European Union. One reason, on which the Opposition agree, is that it is not a good Budget. The other reason, on which many of us on both sides of the House agree, is this: why should we send our Budget report to the European Union? If the EU wanted a copy, it could buy a copy. It is not a problem.
Kelvin Hopkins
I am not as skilled as the hon. Gentleman in using the internet. Old-fashioned though it may be, I go to shops and buy books, I am afraid.
As for the Budget, the reality is that it will not solve our economic problems. Our problems are not really about the deficit; they are to do with unemployment. Looking back, another time when we had an enormous public debt and enormous deficits was the second world war, after which the then Labour Government ran a full-employment economy, which was the way they overcame our problems. If our Budget was directed towards creating employment, we too would solve many of our problems. The important thing is to generate directly in labour-intensive areas, which are not expensive. We are talking about relatively low-paid workers in the public services or the construction sector—labour-intensive sectors with low import content, which are just the sort of sectors where we want to be generating. However, public services and construction are the very sectors we are cutting.
If we had a massive Government-driven house building programme, along with the creation of more public service jobs, we would bring down unemployment and people would be paying taxes rather than living on benefits, and over time the deficit would solve itself. That is what the Labour Government did after 1945. We were living in Keynesian times then, and I think that Keynes was absolutely right. I like to think that if he were here now, he would be saying what I am saying, albeit possibly in a more sophisticated way.
Richard Drax
Perhaps the hon. Gentleman could say where all those homes would be built. I believe the last Government had a target of some 1.8 million, but I recall that something like half were on a floodplain. Where are we going to build all those homes?
Kelvin Hopkins
That is a problem for Ministers and local authorities, but it has been estimated that we need another 4.5 million homes over the next few years if we are going to house our people. However, I will not go into that now, because I want to talk about the European Union.
I do not agree with the Budget—I think we ought to have a different one—but even if it were a good Budget, I nevertheless do not think that we should necessarily be required formally to send it to the European Union. I say that because the motion before us refers to the European Communities (Amendment) Act 1993—the Maastricht Act—which, I am pleased to say, my party voted against. Indeed, some Government Members voted against it as well. It is the Act that requires us to send the report to the European Union. Personally, I do not feel bound by that, because my party voted against it, and I do not think it is sensible anyway.
However, let us return to the stability and growth pact, which, as I have suggested, is like building castles in the air. What stability? What growth? We have grotesque instability at the moment—terrifying instability, in fact—and absolutely no growth. Indeed, even the powerhouse economy of Germany has serious problems. There is talk of convergence, but who do we want to converge with? Greece? Portugal? Some of the countries that are actually contracting, with mass unemployment? In Spain there is even talk of unemployment rising to 6 million, which, as a proportion of the population, is the equivalent of 9 million in Britain. This is absolutely insane. I do not want to be “disable-ist” about this, but anybody running that economy must want their head examined, quite frankly.
Mr Cash
Given the hon. Gentleman’s important comment about the convergence criteria, does he accept that it is absolutely clear that what was thought would happen in 1993, when the Maastricht treaty went through, has gone completely off the wall, as we predicted at the time and as everybody now knows? The Prime Minister said recently that he thought there ought to have been a referendum on that treaty. Does the hon. Gentleman not agree, therefore, that there is a powerful case for having a referendum on the current situation with the euro and the eurozone?
Kelvin Hopkins
Indeed, and I think many of the peoples of the European countries that are now suffering would like a referendum as well. What I find difficult to understand is why so many people in the countries facing difficulties still support the euro. I do not know why, because supporting membership of the euro is almost like having a death wish. If only there were some courageous politicians who could say, “The way out of our problems is to recreate our own currency, depreciate it against the countries we’re competing with and reflate behind that barrier,” those countries would start to solve their problems. However, they cannot do it because they are tied into the euro.
We have collective deflation, right across the entire European Union, and although this country is perhaps tinkering round the edges compared with some other countries, that is entirely the wrong way to go. One thing that is causing us problems at the moment is that the eurozone is in such trouble that the euro is now weakening, which, by contrast, is strengthening sterling and making life more difficult for our manufacturers. That is causing problems in many ways. However, if there were a sensible, managed deconstruction of the euro, with the re-creation of national currencies in many, or possibly all, of those countries, thereby allowing them to reflate their economies, they would benefit, as would we, and the whole European Union would then start to work properly—as a group of democratic, independent nations co-operating voluntarily for mutual benefit, rather than something driven by people in central banks or people in Brussels in the Commission.
Kelvin Hopkins
I hope we do too. As for the repercussions, will we be taken to the European Court of Justice? I suppose that is what happens; however, I think the European Union has other things on its mind rather than punishing us for not sending the Red Book across to Brussels. It has more problems than it can deal with at the moment, and it will not be taking us to court simply for refusing to send across our Budget book, which it can buy in the shops anyway.
Jacob Rees-Mogg (North East Somerset) (Con)
I apologise for not being here for the whole of the debate, but I was in the Finance Public Bill Committee. Does my honourable friend in European matters not agree that the Government have behaved much, much better this year, by allowing the debate in Parliament to take place before the book is sent to Brussels, and that we should encourage the Government in this reformed behaviour?
Kelvin Hopkins
Indeed. I think we ought to debate many more of these things on the Floor of the House. I would like to think that many more colleagues, from all parties, would take part in these debates and appreciate some of the things that some of us, on both sides, have been saying about the nonsense of the European Union at the moment.
I have been speaking for rather too long, so I ought to stop. There are two extremely good reasons for not sending the Budget report to Brussels. I hope that many Members will agree with that and vote against the motion this evening.
Mr David Nuttall (Bury North) (Con)
As always, it is a great pleasure to follow the hon. Member for Luton North (Kelvin Hopkins). He referred to the fact that only a few Conservative Members voted with the then Labour Opposition on the Maastricht treaty—I rather suspect that I may have been one of them at that time.
May I correct the hon. Gentleman on one matter, however? He referred to our sending the Red Book. I wish that it were so, but we are not sending the Red Book; instead we are sending the 210 pages of the “2011-12 Convergence Programme for the United Kingdom, submitted in line with the Stability and Growth Pact”. It is a specially produced document. As last year, I oppose the submission of this convergence document to the European Union.
No doubt by contrast to the previous speaker, I entirely accept that the Government are pursuing a sensible economic policy that is designed to enable this country to start to live within its means once more. Of course there is a debate to be had in the House about whether taxation is at the right level in certain areas or whether public expenditure should be reduced further and faster, but those matters are not what this debate is about. It is specifically about whether the Government assessment of our economic position should be approved
“for the purposes of section 5 of the European Communities (Amendment) Act 1993”,
which requires this country to submit an assessment every year of how well we are progressing on convergence. I object to that, as, I suspect, do many millions of my fellow Britons.
I wish to raise three questions about this convergence. First, what are we supposed to be converging with? Is it the eurozone? It probably is, and I certainly suspect that that is what the Eurocrats want us to do, but why on earth would anyone want to converge with the eurozone at present? It has a failing currency and is based on a failed idea that is continuing to survive in its current form only thanks to bail-out after bail-out and the failure of European leaders in Brussels to wake up and accept the reality that, as any sensible independent commentator can see, it is folly to try to tie together the economies of different countries with such widely divergent characteristics. Such a plan is doomed to fail.
Secondly, who are we supposed to be converging with? Surely not the struggling economies of southern Europe. Things are still going very badly wrong across the eurozone, as we saw only yesterday with the collapse of the Dutch Government because of the fall-out from the eurozone crisis. In addition, there are the economic data: first-quarter GDP shrank by a further 0.4% in Spain, and the eurozone’s own composite purchasing managers index—a useful measure of progress in the eurozone—has slumped to 47.4 in April, down dramatically from March’s 49.1, and we must note that any index figure of less than 50 means contraction. That collapse was both in services, down from 49.2 to 47.9, and in manufacturing, down from 47.7 to 45.0. Even the mighty German economy is being affected by the struggling eurozone. Its overall purchasing managers index figure is down to 50.9, with even German manufacturing at a 33-month low of 46.3. It is clear, therefore, that despite all the bail-outs and the firewalls and the new IMF fund that has just been created, the eurozone remains mired in deep crisis, and I submit that we do not want to converge with it.
Thirdly—and perhaps most importantly—why are we converging? Has anybody bothered to ask the British people if they want to be converging with the countries of the eurozone? We ought to be pursuing the policies that are right for this country, regardless of what the unelected bureaucrats in Brussels think.
Mr Nuttall
I am most grateful, as I am sure are all Members, for that confirmation from the Minister. That answer raises the following question, however. No doubt many officials at the Treasury have been engaged in the preparation of this convergence document, spending many hours of precious time and energy on it, but why? What a complete waste of time! As was ascertained last year, anybody who is interested in this information could glean all of it from the internet, without any need to move any paper about. This is a complete, gigantic waste of time. It is a giant, paper-shuffling exercise.
Mr Cash
As someone who took a very active part in the Maastricht debates, I can say that this current debate is a case of déjà vu. As my hon. Friend said, we are being required to submit this report under the provisions of section 5, even though everything has changed and it is utterly impossible for us to set out to achieve the stated objective, because it is impossible for us, in the national interest, to attempt to apply the convergence criteria. The whole thing is a complete mess, which is why we need to have a referendum on the whole issue, including our relationship with the European Union.
Mr Nuttall
I entirely agree with my hon. Friend on both those points: first, this is a complete waste of time, and secondly, we certainly ought to have a referendum. That is not, of course, the matter before us tonight, however. Instead, this is the question under discussion tonight: what is the point of sending this document to Brussels?
The Minister admits that we pay no attention to what Brussels says to us, and that we govern our own affairs, so what is the point of producing this document? We should be honest with the people in Brussels and say, “Look, we’re not going to listen to you anyway. We’re independent in these matters, and we’re going to stop sending you this document every year.” It is a complete waste of time to send it this year—and I would be very interested to know what happened to last year’s document.
Mr Redwood
Does my hon. Friend also agree that it is a cruel paradox that the EU lectures member states to get their deficit down and then demands more money from them by way of public spending?
Mr Nuttall
My right hon. Friend makes a very good point, and it prompts the following: if the bureaucrats in Brussels are keeping an eye on the eurozone, something has gone pretty badly wrong because right across the eurozone nobody is sticking to the rules and regulations. The growth and stability pact went west years ago. If the bureaucrats had stuck to it a bit more closely, all the bail-outs, mechanisms and IMF funds would not have been necessary. If they had spent a little less time reading convergence documents and a little more time concentrating on the problems in the eurozone, our country might be better off because our European neighbours might be better off too and would therefore want to buy our goods and services.
There is no useful purpose to our constituents in this document being sent to Brussels, and I urge the House to vote against the motion.
Nic Dakin (Scunthorpe) (Lab)
It is pleasure to follow the hon. Member for Bury North (Mr Nuttall), who has dealt with one side of this issue—how the documentation goes to Europe—with his usual rigour and care. I wish, however, to focus on the appropriateness of the Budget Red Book for the UK economy.
The Red Book has created a cacophony of confusion. We have had the pasty tax, the granny tax, the caravan tax, the churches tax and the tax on philanthropy—the list goes on and on. This is an omnishambles, if ever we had one. This Budget is neither fair nor effective. Indeed, Frank and Shirley, two pensioners, came to see me at my recent surgery and told me that they are really concerned about the impact of this Government’s policies on them. They are worried about the pensions move from the retail prices index to the consumer prices index and the effect of the granny tax. At the same time, they see their energy prices, fuel prices and other costs rising. That is what is happening to real people in the real world.
This was a Budget in which millions were asked to pay more so that millionaires can pay less: 14,000 people earning £1 million or more get a tax cut of more than £40,000 a year, while the average family lose £511 as a result of tax rises and cuts this year. A family with children earning just £20,000 lose £253 a year—that is in addition to the VAT rise, which is costing families in my constituency up to £450 a year. This Budget also includes a £3 billion tax raid on pensioners for the next four years.
This is not a fair Budget, so the issue becomes whether it is an effective one. The Government promised change. They promised that things would get better, but things have got worse. Their policies are clearly failing on jobs, on growth and on the deficit. We have 1 million young people unemployed—that is a shocking statistic—and women’s unemployment is at a record high. The economy has stalled, and there is speculation about tomorrow’s growth figures—not about how much the economy has grown, but about whether the economy is merely flatlining or is going back into recession. By contrast, in the United States, where investment is taking place in infrastructure, the economy is growing, albeit slowly. Our Government are set to borrow £150 billion more than they had planned because of this slower growth, so this Budget is not fair and it is not effective.
I represent Scunthorpe and the surrounding villages, where manufacturing is key. There is not enough in this Budget to address the needs of manufacturing; it does not contain an industrial policy. A promise was made about introducing a commitment for intensive energy users. The promise remains but that is still not happening; it is still in the long grass. Likewise, infrastructure spending and getting construction going, so that construction can drive the economy forward, are not happening although they need to happen. This Budget, as set out in the Red Book, which we are considering sending to Europe tonight, is neither fair nor effective. It is certainly an omnishambles. It is both heartless and hopeless, and I hope that the House votes against it.
Mrs Anne Main (St Albans) (Con)
I just wish to contribute a few words at the end of this debate, which I have listened to with interest. I am extremely concerned, but not because we are having to justify our Budget. I think that our Government are doing absolutely the right thing in cutting back on the deficit left to us by the previous Government, putting our house in order and putting the public first. That is where I would like to be: putting the public first. I do not wish there to be any consideration of whether Europe agrees that we are putting our public first or that we are putting European issues first. The European issues must be sorted out in Europe, among the people there. I do not feel that, as a sovereign Parliament, we should have to submit our Budget, regardless of whether the Opposition oppose or agree with it. It is up to us to decide the best for the British people and deliver the best for the British people—whether or not that causes “convergence” is neither here nor there.
The convergence that was perhaps envisaged in 1993 is not a route we would even want to go down now. As my hon. Friend the Member for Bury North (Mr Nuttall) said, we are not sure what we are trying to converge with. I do not know why we are submitting documents that have the word “convergence” on the front of them, unless people are giving us marks out of 10 for converging with something.
Mr Redwood
I fear that the convergence programme began so that countries could converge with the Maastricht criteria to join the euro. As it is clear that we do not want to join the euro, we should in no way be talking about convergence.
Mrs Main
I shall not be supporting this motion, because I fundamentally disagree with what is on the front of the document—convergence. I do not think that our currency or our country should be converging with anything in Europe. Our sovereign Parliament should not have to hand in its notes to see whether or not they are acceptable to Europe. If there is convergence, I am sure that somebody is marking us out of 10 on how far down the road we have gone. If we have gone down that road, I would happily stop doing so right this minute. I conclude by saying that at some point this Parliament has got to stand up for itself and say, “We are not going to do this any more.” I would like this to be the year when we are not going to do this any more.
Mr William Cash (Stone) (Con)
I simply wish to say that I thought that my hon. Friend the Member for Bury North (Mr Nuttall) really put his finger on it. He told us exactly what the position is with regard to which paper we were considering and he identified the questions that needed to be asked, as did my hon. Friend the Member for St Albans (Mrs Main). This is about whether that treaty that we entered into all those years ago, after all that contention, has or has not done its work. It has failed, and it has failed not only this country but Europe as a whole. That is why we need to vote against the motion; this motion makes an assumption that this treaty is still alive. It is as dead as a parrot.
Mr Deputy Speaker (Mr Lindsay Hoyle)
That must be the shortest speech that Mr Cash has made.
Question put.
Data Protection in the Areas of Police and Criminal Justice (EU Directive)
(12 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
21:20 - The House divided: - Ayes: 267 / Noes: 24 - Question accordingly agreed to.
The Parliamentary Under-Secretary of State for Justice (Mr Crispin Blunt)
I beg to move,
That this House takes note of European Union Document No. 5833/12 and Addenda 1 and 2, relating to a Draft Directive of the European Parliament and of the Council on the protection of individuals with regard to the processing of personal data by competent authorities for the purposes of prevention, investigation, detection or prosecution of criminal offences or the execution of criminal penalties, and the free movement of such data; and supports the Government’s recommendation not to exercise its right to opt out of this draft Directive under Protocol 19 of the Treaty on the Functioning of the European Union (The Schengen Protocol).
The motion stands on the Order Paper in my name and that of my right hon. and learned Friend the Lord Chancellor.
I welcome the opportunity to debate the proposed data protection directive, which the European Commission published on 25 January. The directive would repeal and replace the 2008 framework decision on data protection in the police and criminal justice sector. It is an important instrument for law enforcement in this country and across the European Union, and it is right that this House is given the opportunity to consider the effect of the proposals on both the security and the freedoms of UK citizens. The debate fulfils the commitment made by my right hon. Friend the Minister for Europe to seek Parliament’s views on an opt-in decision in justice and home affairs matters, as well as opt-out decisions under the Schengen protocol, and I am keen to hear the views of right hon. and hon. Members.
Mr David Davis (Haltemprice and Howden) (Con)
In the Ministry of Justice’s impact analysis, the summary is that the overall impact is
“likely to be substantially negative”.
Given that, can the Minister explain why he does not want to opt out?
Mr Blunt
I will deal with that, but in deciding whether to exercise the opt-out, the Government looked at the most pessimistic reading of events. The conclusion to which my right hon. Friend refers has been before the European Scrutiny Committee, but that impact assessment does not take into account some of the consequences that would flow if we exercised an opt-out. I shall talk about those consequences later in my speech, but they include negotiating all the bilateral data protection arrangements that would be required were we not party to the directive.
Having held the responsibility of Europe Minister, my right hon. Friend, of all people in this House, will understand the complexity of the legal basis—complexity that has increased considerably since he and I were serving in the Foreign Office together, I as a special adviser and he as a Minister. If he will forgive me, I will get my arguments on the record, give right hon. and hon. Members the opportunity to contribute in the light of that, then respond to their remarks at the end of the debate. I will therefore resist taking too many interventions. This area is complex enough without adding further to that complexity—
Mr Blunt
If the hon. Lady will forgive me, let me get our position on the measure on the record, then I will be able to respond to interventions and points made in a more disciplined way.
It is the Government’s view that the proposed data protection directive can be classified as a Schengen building measure; therefore, under protocol 19 of the treaty on the functioning of the European Union, which governs how the Schengen acquis are integrated into the UK framework, the UK does have the option of opting-out of the directive. The deadline for notifying the Council of the European Union of an opt-out decision is 14 May.
The Government's position is that the continued ability to share information on crime and justice matters between nations is of fundamental importance. In an increasingly globalised world, crime does not stop at national borders, but reaches across jurisdictions and involves people of many different nationalities. The Government therefore support proportionate, clear and coherent data protection rules that keep personal data safe, protect the rights of citizens and enable our police to pursue criminals to protect the lives and interests of our citizens.
Mr William Cash (Stone) (Con)
Will the Minister give way to the Chair of the Scrutiny Committee?
Mr Blunt
I am grateful to the Chair of the Scrutiny Committee for that point, but I will have to take advice on what was received and when before replying to him. I am trying to explain that, in this area, there is considerable confusion between opt-ins and opt-outs, so if he will forgive me, I shall try to explain this complicated matter and its consequences in as simple terms as I can, as much for my own benefit as for anyone else’s.
To address specifically the subject of debate this evening, we support the transfer of data across borders and between organisations where it improves our ability to prevent crime, increase security and keep our citizens safe. We must therefore protect the arrangements that have allowed EU member states to share information about suspected criminal activity in a regulated and proportionate manner. The challenge of the directive is that, although parts of it are welcome and will help in the fight against crime, some of the provisions are excessively bureaucratic and unwieldy. As it is drafted, we have concerns about the costs it would impose on UK law enforcement agencies. We are particularly concerned about the fact that it has been drafted so as to apply to internal processing of data—that is, information being shared by police forces or other criminal justice authorities within the borders of one country.
The Government's approach to the directive has been to establish the best way of securing the benefits of continued data sharing with EU member states, while minimising any resultant costs. Having gone through this analysis, our judgment is that, despite concerns about the current text, we should not opt out of the directive. There are three main reasons for this. First, the directive is at a very early stage of negotiation. There is substantial room for improvement, and it is clear that the UK has significant allies within the Council of Ministers who share our concerns. We believe that we can secure a more effective deal by working with our partners than by going it alone.
Mr Blunt
No. Secondly, the legal base of the measure gives the UK an effective exemption on the issue about which we are most concerned: internal processing of data. The directive is based on article 16 of the TFEU—the new data protection competence created under the Lisbon treaty. Under article 6a of protocol 21, which gives the UK and Ireland particular provisions and protections in the areas of freedoms, security and justice, the UK has what we believe to be a firm protection that provisions on internal processing will not apply to us.
Mr Blunt
No. My intention was to respond to the intervention made by my right hon. Friend the Member for Haltemprice and Howden (Mr Davis), but he is no longer in his place, so I shall come back to it later.
Thirdly, and most important, exercising the opt-out would endanger our continued ability to share information across borders without necessarily freeing us from the bureaucratic and unwelcome obligations potentially created by the new directive. That is because in the absence of the directive, the UK would have to negotiate new data-sharing arrangements bilaterally with each of the other member states in the European economic area. Notwithstanding the significant time and cost of those separate negotiations, the fact is that each of the member states with which we would be negotiating would be bound by the terms of the new directive, and of course would press the UK to adopt similar requirements to their own. The effect would be that we would end up taking on similar obligations to those of a directive that we had not participated in negotiating, and whose content we had not had the opportunity to influence.
The Schengen instruments contain their own specific and extensive data protection provisions, which will not be affected by the directive and will continue to operate, so in effect we would be opting out of very little, with little potential benefit for the United Kingdom, but potentially to our detriment. Furthermore, there are broader consequences to an opt-out.
Mr Blunt
If we were outside the directive, our ability to negotiate essential data-sharing agreements, such as we are in the process of doing on the passenger name records directive and the European Union third-country passenger name records agreements, could be significantly undermined. Equally fundamental, exercising our opt-out on this measure could throw our participation in other, broader Schengen measures into question and the Council could take the decision not allow us to continue to participate in valuable data-sharing arrangements under the police co-operation provisions of Schengen. This would be a serious problem for our law enforcement agencies, which benefit from the sharing of criminal data under Schengen.
It is therefore our careful collective judgment, based on the most pessimistic view of costs and benefits, shared with the European Scrutiny Committee, that our national interests are best served by participating in this directive so that we are party to the framework governing data-sharing for policing and criminal justice across the European Union.
Mr Blunt
I am afraid I do not agree with the hon. Lady. The directive is important for the security of our citizens. I will go on to give an example of the kind of co-operation that we wish to protect under these arrangements. If we are not party to these arrangements, we will have to start negotiating at least 27 bilateral arrangements, which would take us to precisely the same place as the directive, without the benefit of negotiating under the directive.
Mr Blunt
Let us be clear about what is at stake here. Rules enabling the sharing of data have made a tangible difference to the United Kingdom, and we take steps that imperil them at our risk and at risk to our citizens. Let me give an example, which concerned a 32-year-old Romanian national who was arrested in the United Kingdom on suspicion of raping two women within the Metropolitan area. A request for conviction data identified that the suspect had a previous conviction for rape in Romania. Just prior to the trial, the individual disputed the Romanian conviction, but through close liaison with the central authority and the police liaison officer at the Romanian embassy in London, a set of fingerprints relating to the Romanian rape conviction was obtained and proved the conviction beyond doubt when they matched the suspect.
An application to use the previous conviction as bad character evidence was made by the prosecuting counsel and was granted by the judge, allowing the Romanian rape conviction to be put before the jury. The defendant was convicted of four counts of rape and other offences at the Inner London Crown court in July 2010. The defendant was given an indeterminate prison sentence, with a recommendation that he serve at least 11 years in jail as he presents a “high risk” of further sexual offences. The investigating officer on the case said:
“The use of foreign conviction data can be of great importance to police investigations. In my case, by working with the UK Central Authority I was able to draw on their professionalism and expertise to secure details of”—
the individual’s—
“previous conviction for rape in Romania which was put before the court and used as bad character evidence. This information undoubtedly assisted in providing a successful outcome, convicting a dangerous offender who will now spend a considerable number of years behind bars.”
Perhaps I hope that under European Union and Council of Europe prisoner transfer agreements, a good proportion of those years will be spent behind Romanian bars, but if I follow that up, I may be diverging from the immediate subject of the debate.
Mr Blunt
That case is far from unique. We should be clear that the Government want to remain within the directive precisely to enable such practical, common-sense sharing of data. It is not because we do not have concerns about the precise details or think it cannot be improved. It is because we make the judgment that we stand a much better chance of securing a sensible deal within the tent than outside it, and without risking the likelihood that by having to negotiate dozens of bilateral deals, we would endanger co-operation that the public depend upon.
It will not have escaped the attention of hon. Members that press coverage has warned about new rights for criminals under this measure. Let me set the record straight. All UK citizens under current law are able to know what information the state holds about them and can ask for data to be erased. But the ability of criminals to enjoy this right is, for obvious reasons, qualified. Put simply, the rights of the law-abiding public to security come first. Nothing in this proposed directive creates any new right for criminals or for anyone else.
Mr Raab
On that point. May I quote to the Minister directly from paragraph 50 of the impact assessment? It says that criminal justice sector agencies may also be prosecuted directly or via the Information Commissioner’s Office if they fail to protect personal data. This will represent a cost to them in terms of defending themselves in court and in paying fines and/or compensation that may result from these cases. Does that not conflict directly with what he has just told the House?
Mr Blunt
No, because these rights already exist. The suggestion in the newspapers yesterday, which I am sure my hon. Friend had nothing to do with, was about whether we were creating some new set of rights for criminals under the directive. No new set of rights is being created, any more than exist now under our own data protection laws.
Mr Blunt
No. Let me turn to the substantial content of the proposed directive and the policy issues that are raised. We want to see a system that allows police and judicial authorities to continue to protect and serve the public effectively and which also allows individuals to be confident that their privacy, safety and freedom will be safeguarded. The Government believe that these two objectives are not contradictory, but may be achieved in tandem, by creating a data protection framework that is founded on the principles of necessity and proportionality.
In the light of this position, there are legitimate concerns regarding the content of the directive. The United Kingdom believes in a principles-based approach that allows the necessary amount of flexibility in processing data. In some areas, the proposed directive seems far too prescriptive to meet this requirement.
Mr Blunt
Our priority in negotiations will be to resist the application of the directive to all domestic processing—that is, data sent between two United Kingdom agencies. Although article 6a of protocol 21 means that this will not apply to us, we feel that it is important to remove this expansion as such data processing should not be the subject of European Union rules. We will seek to remove that for all European Union countries.
As further examples, the proposal lays down new obligations for data controllers regarding the documentation and records that they must keep and the consultations that they must hold with the Information Commissioner’s Office in order for the processing to be considered compliant with the rules. We also have reservations about the compulsory appointment of data protection officers, a role that will need to be filled ostensibly to ensure that data controllers fulfil the various obligations presented to them, including those that I just outlined.
We already expect robust data protection governance as a matter of course in public authorities. However, we question the necessity of having the European Union telling us how to create, organise and run these arrangements. The more prescriptive and burdensome aspects of the directive are opposed by the Government and we will seek to remove or mitigate them during negotiations in the Council of the European Union. This is the beginning of a lengthy process of negotiating new data protection legislation, not the end. The UK will seek to influence negotiations in order to bring about outcomes that are more in line with our policy objectives, which is to end up with an effective but proportionate framework.
Sir Peter Bottomley
I think that my hon. Friend the Member for Dover (Charlie Elphicke) could put the question on costs better than I could.
Madam Deputy Speaker (Dawn Primarolo)
Order. Minister, please resume your seat for a moment. Sir Peter, I thought that you wanted to intervene. You have been in the House a long time and know that you cannot stand up and then ask someone else to speak for you, unless you have lost your voice, which you have not.
Sir Peter Bottomley
You are right to correct me, Madam Deputy Speaker, and I think that I am also right in saying that every word in “Erskine May” may create a new precedent. My question, which I think my hon. Friend the Member for Dover would have put better, is this: will my hon. Friend the Minister start talking about costs at some stage during his very good speech?
Mr Blunt
I will not. I am unable to, because work is still ongoing on the impact assessment to try better to identify the precise costs of each measure. If my hon. Friend has had a chance to read the impact assessment, he will have noted that much of the assessment in this area is based on fairly tentative criteria. What are not included in the impact assessment are the benefits of a successful negotiation or the costs that would be inflicted on us if we chose to opt out and had to live with the consequences.
As I was saying, this is the beginning of a lengthy process of negotiating new data protection legislation, not the end. We will seek to influence negotiations in order to bring about outcomes that are more in line with our policy objective, which is to end up with an effective but proportionate framework. I note that every other member of the European Union faces that same challenge of finding the right balance between the two principal objectives: the privacy of our citizens and the protection of their data; and the protection of their interests through the operation of our police and criminal justice agencies. However, it is worth noting that the proposed directive is one part of a two-part package of revised data protection instruments that the Commission proposed in January; it also proposed a regulation that would cover general and commercial data processing by public and private bodies. The regulation is neither the trigger, nor the subject of this debate.
To return to the directive, which is the subject of today’s debate, let me summarise our position. We believe that an opt-out decision is a possibility for the Government but that it would be the wrong choice for the United Kingdom. We would need to replace the directive with bilateral agreements with each member state, which would be a time-consuming and tortuous process, and it is likely that in those negotiations we would find ourselves bound by aspects of the directive that we feel confident we can remove in negotiations.
The Government’s position, therefore, is clear: we want to be part of a European data protection framework that enables practical, common-sense sharing of data between member states’ law enforcement agencies engaged in the fight against international crime. We believe that the limiting effect of article 6a on the aspects of the directive that relate to data exchanges within the United Kingdom means that we should be content to be part of it, which will of course substantially reduce the costs identified in the impact assessment. Although there are areas of the proposal that the Government will seek to alter, I can unhesitatingly commend the motion to the House.
Mr Andy Slaughter (Hammersmith) (Lab)
I will begin by saying that it is not the Opposition’s wish to divide the House on this resolution—
Mr Slaughter
I think I will take interventions a little later in my speech.
It is not my wish to speak for long. These debates, a number of which it has been my privilege to speak in over the past few months, are always animated, if only on the Government side of the House—indeed, sometimes I think mine is the last friendly voice the Minister hears.
Mr Slaughter
He is in a pretty desperate situation if that is true.
The animation in these debates often comes from what I might call the meta-issue of why we are discussing European law expansion at all, rather than the precise statutory powers being considered, or at least that is my observation. I intend neither to engage in that debate, nor—other than briefly—to discuss the matter of principle that the draft directive raises. In dealing with the matter of processing personal data for the purposes of preventing, detecting and prosecuting crime, there will always be a balancing act. On the one hand, the prevalence of cross-border crime, including serious and organised crime, crimes of violence, sexual crime and terrorism, is growing, and criminals and criminal gangs are becoming more organised and sophisticated and making better use of technology and information systems, so the police and prosecuting authorities must have the means to match them. On the other hand, the issue of data protection and privacy from the prying eyes of the state in particular is important, contentious and topical, from data storage to the Leveson inquiry.
In opposition, both Government parties set themselves up as opponents of data collection where it could be seen as intrusive, yet I read the following in today’s edition of The Guardian:
“Ministers are planning a shakeup of the law on the use of confidential personal data to make it far easier for government and public-sector organisations to share confidential information supplied by the public. Proposals to be published next month by the Cabinet Office Minister, Francis Maude, are expected to include fast-track procedures for ministers to license the sharing of data in areas where it is currently prohibited.”
The Cabinet Office Minister said:
“In May we will publish the proposals that will make data sharing easier”.
The home affairs editor of The Guardian notes that
“databases continue to proliferate across Whitehall, even before the extension of data-sharing powers. Now the Cabinet Office minister…says government must be ‘smarter and more effective’ at sharing such sensitive data.”
It is not only the EU that has to undertake this tricky balancing of civil liberties with security and the pursuit of crime.
The issue before us is not one of principle, but whether the proposals achieve that balance. That question may be answered only in the further examination of the directive. As I have indicated, we do not oppose the Government’s decision today not to opt out, and I hope that that is clear.
Mr Slaughter
I do, and I was going to deal with that matter after raising a number of specific points of concern.
I am grateful to the European Scrutiny Committee for its report, which states that
“there is now the possibility of establishing a comprehensive data protection framework ensuring both a high level of protection of individuals’ data in the area of police and judicial cooperation in criminal matters and a smoother exchange of personal data between Member States’ police and judicial authorities, fully respecting the principle of subsidiarity.”
The report then adds:
“The Commission concludes that the practical difficulties encountered by a number of Member States in distinguishing between rules for domestic and cross-border data processing could be solved through a single set of rules covering data processing both at national level and in a cross-border context”.
The aim might be laudable, but the solution appears to say that, in order to avoid confusion, principles of subsidiarity should in fact give way to an overarching system controlled centrally. One consequence of that that the Minister has already alluded to is an extension of the scope of data processing to include domestic processing for the purpose of policing and judicial co-operation. In other words, the directive will regulate the passing of data between purely domestic organisations, such as neighbouring county police forces, and I share the Minister’s concern in raising that.
In the area of data protection, the draft directive is stronger and, I think, should be broadly welcomed. It includes: new rights of access and information for data subjects, such as the identity of the data controller, the purpose of the data processing and the period for which the data will be stored; a right for data subjects directly to demand the erasure of their personal data by the data controller; an obligation on data controllers to inform supervisory authorities and data subjects of data breaches, informing the former within 24 hours of discovery and the latter without undue delay; and an obligation for data controllers or processors to appoint data protection officers. The incorporation of human rights legislation—the Human Rights Act 1998—into UK law by the previous Labour Government has improved the right to privacy and to protection from intrusion into family life, but we still have some way to go.
Keith Vaz (Leicester East) (Lab)
I agree with everything that my hon. Friend has said so far, but will he look in particular at the issue of Europol and how this exchange of information affects our obligation to it?
Mr Slaughter
I am happy to do that, and I am even happier to note the support from my Back Benchers—the almost unanimous support—[Interruption.] No, 50% might be a better figure.
The key to the balance that I have talked about is the drafting of the directive within very prescribed bounds to restrain the opportunities for data sharing, thus the controls for in-country transfer, to which the Minister has referred, are restricted—if one accepts what the draft directive says. As currently drafted, it covers data transferred between two UK regional police forces with no cross-border elements, but that will apply to the UK only when such processing is pursuant to an EU measure on police or judicial co-operation, and that is indeed what the draft directive states.
I just worry that sometimes the intention is not carried out in practice, and I cite—on a perhaps analogous subject—from the same Guardian article today this note of caution:
“Last week the European parliament ratified plans to allow airline passenger records, including credit card details, for all transatlantic flights between Europe and the US, including in and out of the UK, to be handed over to the US department of homeland security to be stored for 15 years.”
If these proposals are to go ahead, they need to do so in such a way that there are the tightest possible controls on the exchange of data.
Sir Peter Bottomley
First, does the hon. Gentleman, who is doing well, if I can say so without being patronising, think that when those data rules are breached the victim of the breach should be notified? Secondly, and separately, does he agree with my hon. Friend the Minister that the problems of cost and of value for money are a matter for another day?
Mr Slaughter
I accept what the Minister has said—that the matter is at an early stage and we should not press him on those points. I am very happy to be patronised by the hon. Member for Worthing West (Sir Peter Bottomley), and whether he is asking by himself or by proxy—
Charlie Elphicke
I am proud to be the proxy for my hon. Friend the Member for Worthing West (Sir Peter Bottomley), and I thank the hon. Gentleman for the generosity with which he has taken interventions and for the great courtesy that he brings to the House.
My concern is that we will end up with a free-of-cost subject access request. Does the hon. Gentleman agree with Tony Blair, who wrote in his book, “A Journey”, that freedom of information requests and such costless information requests are one of the biggest mistakes and that one should be very careful about them?
Mr Slaughter
I must get around to reading that book, because it is quoted to me so often in these debates and exactly the same point is made. I am sure it is a very good read.
I conclude by quoting one paragraph from the proposed directive which sums up its laudable intention:
“When personal data moves across borders it may put at increased risk the ability of individuals to exercise data protection rights to protect themselves from the unlawful use or disclosure of that data. At the same time, supervisory authorities may find that they are unable to pursue complaints or conduct investigations relating to the activities outside their borders. Their efforts to work together in the cross-border context may also be hampered by insufficient preventative or remedial powers, inconsistent legal regimes. Therefore, there is a need to promote closer co-operation among data protection supervisory authorities to help them exchange information with their foreign counterparts.”
That neatly encapsulates the two principal aims of the proposals, as set out in the impact assessment: dealing with the fragmentation of data, when it prevents cross-border law enforcement, and allowing individual citizens to control their personal data. Those are proper aspirations, and we are prepared to give the directive the benefit of doubt at this stage, but I do await with interest, as I always do, the rest of the debate and, indeed, the Minister’s response.
George Eustice (Camborne and Redruth) (Con)
I have a number of concerns about the motion. First, it is not just about introducing a directive, because it undermines existing British opt-outs in justice and home affairs; secondly, the Government’s own impact assessment raises serious concerns about the administration costs of the directive; and, finally, on a point to which the Minister alluded, the Government are themselves still undertaking consultation and work in this area. I shall put forward the novel proposal that we make a decision on this matter after that work is complete, not before it has been done.
On our opt-out, under a very unusual quirk of the Lisbon treaty, Britain has what is sometimes described as an opt-in protocol, meaning that by 1 June 2014 we have to make a very big decision. There are about 130 justice and home affairs measures, and we have a right to opt out of each and every one should we want to. We have to opt out of all of them en bloc, and we have to make our mind up within the next 18 months.
We should make that decision now. Let us look at all 130 powers, and let us be very clear that we are going to opt out of all of them en bloc. If we do so, we will have three options: abandon the whole lot but do some bilateral work in the area; agree with some and opt back into them but on our own terms; or do something similar to Denmark by opting into some or all of them but doing so outside the jurisdiction of the European Court of Justice.
The problem with the directives, as they emerge, is that they subject us to the jurisdiction of the ECJ in a way that we are not subject at the moment. Every time we accept one of the new directives that are put before us, we replace an existing framework decision and lose the power to opt out of that area. The opt-out falls by default, so we should not take such decisions lightly, because the decision tonight is a decision to scrap a British opt-out, not just a decision to wave through an amendment.
One or two Members have touched on the explanatory memorandum, and it is quite damning. Paragraph 25, which relates to domestic processing, states:
“We…consider the impact of this on law enforcement agencies, in particular regarding the administrative burdens it places on them”
could be significant. It continues:
“The Data Protection Framework”—
which went before—
“does not cover domestic processing. We are considering the implications of this.”
Paragraph 28, which relates to data protection and design, states:
“The DPFD did not impose obligations to protect personal data by design and default and their inclusion in the Directive could prove to be a disproportionate cost and burden on the functionality of law enforcement bodies.”
Paragraph 30, on the data breach notifications requirement, states:
“This could add a resource burden on low enforcement agencies and be count-productive if it distracts data controllers from mitigating the adverse effects of the breach.”
Finally, the impact assessment refers to financial implications, and paragraph 33 states:
“The Directive, if adopted as is, poses a number of financial implications. In particular, police and law enforcement authorities would need to comply with specific obligations, such as the requirement to employ Data Protection Officers. We are examining the implications of these requirements further to determine how significant they would be”.
The memorandum is dated 13 February. When I contacted the Ministry of Justice today, it said that it had launched its consultation, but that it had not yet been concluded.
We should have gathered all the evidence together before making this decision. We must question why we are being asked to make this decision tonight, when all the information is not before us. The answer is that there is an arbitrary EU timetable that says that we have to make the decision by the middle of May. This is exactly what is wrong with the European Union: we are presented with these matters, but we are not given time to gather the evidence that we need before we are bounced into making a decision. That is a complete mistake.
I want to return to my first point about our opt-outs. People sometimes say that it is impossible to do anything in the European Union because it is too difficult to renegotiate matters and because treaty changes are needed. This area is the one exception to that: we do not need to renegotiate anything and we do not need a new treaty. Our opt-outs are already provided for. We must not allow the 130 British opt-outs to wither on the vine. We must decide now to opt out of all those provisions and adopt a more strategic approach to the ones that we will accept in future.
Keith Vaz (Leicester East) (Lab)
I intend to speak very briefly. The hon. Member for Camborne and Redruth (George Eustice) made an eloquent and thoughtful speech, which indicated that we ought to spend much more time discussing justice and home affairs issues on the Floor of the House. I would like a debate on the European arrest warrant, because it has created enormous problems for the British judicial system. However, we have only an hour and a half and there are probably only about 30 minutes left, so I will be brief and raise only one point with the Minister, which is about the operation of Europol.
Last Friday, the European Commission had a meeting to which it invited the Chairs of the Home Affairs Committees of all the EU countries to discuss the future of Europol. I am concerned about how the directive might affect the way in which the Europol databases operate. I support what the Government are trying to do. They are clear that the reason why they want better data sharing among our EU partners is to combat Europe-wide crime. We have to share data if we are to deal with the organised criminal gangs that exist in the EU in so many areas of criminal activity, including drugs and human trafficking. However, we need to be careful about who gets the data and what use they make of them. That is why I am such a strong supporter of Europol. Anyone who has visited it will know that it has a particularly British dimension. The information that we give that organisation is kept very much under our control.
The Minister mentioned the case of a Romanian who came to this country and whose criminal record tracked him back to Romania. I would have thought that Europol should provide that assistance. It does not necessarily have to be done through bilateral help. I raise with the Minister the case of the Albanian who worked in a hotel in the midlands and beheaded his manager after a row with him. Only after he had committed that terrible criminal act was it discovered that he was wanted in Sweden and Switzerland on other charges before he came to the United Kingdom.
In looking at data sharing, I am concerned that we do not have enough information about those who come into this country. The Minister described the case of the Romanian and I have described the case of the Albanian—this is not an attack on eastern Europe, but since we have mentioned the nationality of these people, we may as well be open about it. It would have been better if we had known about the offences committed by those people at the time of their arrival. I do not think that the directive would have ensured that that information was provided, although perhaps I am wrong. However, it is important to know the criminal background of those who arrive at our borders and who come to live and work in this country. That would be sensible data sharing, as opposed to data sharing after the event. I hope that in his winding-up speech—if he does not make one, perhaps he will write to me—the Minister will speak about the implications of the directive for Europol.
Finally, I pay tribute to the European Scrutiny Committee and its Chairman. They do a splendid job. It is important that we have more such debates on the Floor of the House, even though they might sometimes be an irritant to Ministers. As with pre-summit debates in the House, which seem to have gone by the board, it is important that we have as much time as possible to discuss directives that will have far-reaching effects in the justice and home affairs area of EU policy.
Mr William Cash (Stone) (Con)
The issue here is one of process as well as substance. I am sorry that the Lord Chancellor has just left the Chamber. I was glad to note that he was here before I rose, but he seemed to depart rapidly. I can only assume it was because some of the remarks that I am about to make may not be entirely to his liking or that of the Under-Secretary.
This is a Lidington debate, and the significance of such debates is that Parliament has an opportunity to debate, and vote on, motions that clearly set out the Government’s recommended approach—that they wish to exercise their right either to opt into a title V proposal or to opt out of a Schengen-building title V measure.
I pay tribute to my hon. Friend the Member for Camborne and Redruth (George Eustice) for his remarks on the substance of the matter, but there is a very important question to be asked about scrutiny. I speak as Chairman of the European Scrutiny Committee, having just this afternoon come back from duties in relation to the Danish presidency.
I say to the Minister that the way in which this matter is being handled is a disgrace. I will of course refer to the Committee this quite blatant breach of the spirit of the proposals that we have agreed in the past, and I intend to ask the Committee whether it wants to bring him in front of us to explain himself and how this has been handled. It is that serious.
No mention of the Schengen protocol or offer of an opt-in debate was made in the Government’s explanatory memorandum of 13 February, as it should have been, nor was any formal correspondence to that end received by the European Scrutiny Committee. I also mention that the Schengen protocol gives the United Kingdom and Ireland three months to opt out of legislation that builds on the Schengen acquis. The Government’s omission is very significant and has meant that the Committee has not had the opportunity either to scrutinise the opt-in/opt-out decision or report to the House on it prior to a debate taking place.
It may be a matter of some interest to the House that there is no report before the House on the matter. Members can go to the Vote Office and get the Committee’s previous paperwork on the provision, based on our consideration of the explanatory memorandum of 13 February. In that document, we stated:
“It is regrettable that the Minister’s Explanatory Memorandum did not mention any of”
certain opt-in considerations, in blatant breach of Baroness Ashton’s undertaking to Parliament of 9 June 2008. We continued:
“We ask the Minister to keep us informed of progress in negotiations on the points of concern for the Government…We assume, therefore, that the negotiations are unlikely to be completed under the Danish Presidency, and would be grateful to be informed if and as soon as this assumption appears to be incorrect.”
On every single element of what I have just described, the Minister is completely in breach of undertakings and of the requirement to refer matters to the Committee appropriately.
The manner in which the decision has been explained is a disgrace. There has been no attempt to explain it, or its implications, to the House properly. I have to go further and say that Members will need an explanation for the Government’s omission, and I hope the Minister will find an opportunity to provide one before we conclude these proceedings. It must have been obvious to the Government that the draft directive was a Schengen-building measure, because several of the recitals state explicitly that it is and because the framework decision that it replaces was stated to be a Schengen-building measure. Recital 43 states that the UK is
“taking part in this Framework Decision, in accordance with Article 5 of the Protocol integrating the Schengen acquis into the framework of the European Union.”
In order to have a meaningful and informed debate on the Floor of the House under the Lidington arrangements, the Committee should have had reasonable notice of the Government’s recommended approach. A mere 24 hours is clearly inadequate.
I could refer to many other matters, but the question on which I shall conclude is simply this: what negotiating strategy will the Government adopt to mitigate the negative impact of the proposal as drafted, and what is the Minister’s estimation of the likelihood that the Government’s strategy will succeed?
This is a very sorry day in the scrutiny of European legislation. I am only sorry the Lord Chancellor is not here, because if he were, I would invite him to go to the Dispatch Box instead of the Minister, who has let us down so woefully.
Sir Peter Bottomley
Were there to be a meeting of Ministers of European Union countries during the next few days, and were there to be either a satisfactory or an unsatisfactory outcome, how could it be reported to the House and how could we take a decision that supports or negates any decision that is taken this evening?
Mr Cash
I find it extraordinary that my hon. Friend should seek to defend the Government’s breach of a series of requirements as prescribed in the spirit of the orders before the House, but in addition, it is perfectly clear—to me at any rate—that these proceedings are happening because of the timetable of Prorogation.
Jacob Rees-Mogg
I wonder whether the real reason why this is being done in this appalling way, completely ignoring the proper forms of scrutiny, is that the Government know they have an absolutely rotten argument and thought they would push this through quickly while people were thinking about Prorogation and the Queen’s Speech and what will be in the next programme. It is little more than prestidigitation.
Mr Cash
I concur. Other hon. Members wish to speak, so all I can say is that this matter will not to be allowed to rest. We will look into it further. The Committee will expect the Minister to give an explanation in person to us. I shall leave my remarks at that for the time being.
Kate Hoey (Vauxhall) (Lab)
It is always a pleasure to follow the hon. Member for Stone (Mr Cash). The hon. Member for Camborne and Redruth (George Eustice), who is just leaving the Chamber, made an excellent speech. I agreed with practically every word he said, as I did with the hon. Member for Stone, who outlined that the way in which the measure is being put through the House is totally against the way in which the new Government supposedly intended to treat European legislation. That is wrong but rather typical of Governments. This Government and the previous one, and everybody in the establishments of the parties at the top level, want to avoid a genuine debate––and certainly any debate in the country––and rush measures through.
I, too, read the directive checklist for analysis on EU proposals. I happen to feel sorry for poor Mr John Bowman, who is the lead policy official who wrote it, because everything in it points towards why we should not support the motion to not opt out of the directive. That is not just because of the cost analysis, but it is worth quoting that for the public, who may well be listening. It states:
“The proposals would impose substantial costs which would largely fall on the criminal justice agencies”
and ultimately on the taxpayer.
The checklist also states:
“The overall impact is likely to be substantially negative”.
I heard not one single word from the Minister on that. He should have listened to the previous European debate just an hour and a half ago, when the Financial Secretary to the Treasury took many questions and ended up getting a lot more information. This Minister simply wanted to get through his speech and was prepared only very rarely to give way. He did not in any way respond to all the arguments against supporting this motion tonight.
The ministerial sign-off—presumably by the Minister tonight—reads:
“I have read the analysis above of the potential impacts of this proposal and I am satisfied that, given the significance of the proposal, the time and evidence available, and the uncertainty of the outcome of negotiations, it represents a proportionate view of possible impacts.”
That is precisely why the people of this country are sick, sore and tired of everything that this Parliament does on the European Union.
If the outcome of the case of the Romanian rapist, who has suddenly become a very famous person tonight—my right hon. Friend the Member for Leicester East (Keith Vaz) also mentioned him—was possible before we had this directive, why do we need it? The system worked perfectly well in that case. It even worked for the Albanian head chopper. It seems to me that we are struggling for reasons to prove that this directive will help, but the real reason we are pushing it through quickly is, as the hon. Member for Camborne and Redruth said, that there is a whole raft of European Union regulations coming that we will have to make a decision on and this Government know that on their Back Benches, and increasingly on this side I am glad to say—although there are none here tonight apart from my right hon. Friend the Member for Leicester East—resentment is felt towards the European Union and its regulations, its burden and its undemocratic nature. The Government therefore want to get this through as quickly as possible.
I cannot understand why we cannot have bilateral agreements. If we have the agreements there already, why cannot we strengthen them?
Henry Smith
Is it not the case that if we opt in to this directive, it will be a one-way decision that we cannot back out of? It will be decided through qualified majority voting, so we may not get exactly the sort of directive that would suit the United Kingdom, which is yet another reason.
Kate Hoey
I absolutely agree, and that is precisely what some of us wanted to ask the Minister about, but he was not prepared to take interventions. I hope that he will respond to some of these questions. He himself said that he does not like bits of it—some of it is excessively bureaucratic and it is far too prescriptive. He said that the Government do not like the domestic aspect of it, but that they will negotiate. He actually thinks that we are going to believe that we would manage to change very much of this, when the reality is that we rarely change things and we ultimately give in. We will give in on this. If this is put through tonight, no matter how much we decide that it is not a good thing, we can do nothing about it.
It is an absolute disgrace that after a one and a half hour debate, and my party refusing to even vote on it, this will be pushed through. This is just one more sign. I remind the House of the people’s pledge campaign, which is all-party—including my right hon. Friend the Member for Leicester East. We are keen to see a referendum on the European Union. It is holding by-election-type referendums across the country. In Thurrock, just before Easter, 90% of the people who voted—in a higher turnout than in most local elections—voted for an in/out referendum. Anyone who has been watching this debate tonight and listening to the arguments put by the Minister will even more strongly believe that we need a referendum and an opportunity for the people to decide their destiny.
Madam Deputy Speaker (Dawn Primarolo)
Order. This debate concludes at 9.20 and I would like to leave a few minutes at the end for the Minister. Members could help each other out by perhaps not speaking for quite so long, and then everyone can get in.
Mr David Nuttall (Bury North) (Con)
I will be conscious of your remarks, Madam Deputy Speaker. It is, as always, a great pleasure to follow the hon. Member for Vauxhall (Kate Hoey). If this motion is passed tonight, it will result in yet another slice of the sovereignty of this House passing to Brussels and to the European Union. We have no obligation to do it. This country has every right to opt out of the measure, and that is exactly what we should do. The rest of the EU would, of course, continue to be bound by the measure, and if there was a benefit to our citizens, they would benefit too. If the House felt the need to legislate independently of the EU, we could do so, but we should not simply accept the measure as it stands.
We have a choice. The Government propose to inch further down the path to greater European integration—a path that, I submit, runs in the opposite direction to that in which the vast majority of the British public wish to go. Although the two Front-Bench teams might agree, I suspect that millions of people outside this place agree with those who have spoken from the Back Benches who, in this argument, are on the side of the British public. Once we have chosen not to exercise our right to opt out, there will be no option to reverse that decision, and we will have slipped yet further into the EU’s clutches.
The Minister expressed concern that if we did not accept the measure, other European countries might choose not to co-operate with us. My first thought to that was, “Simple. Let’s tell them we’ll stop sending the cheque every month.” That might soon get them into order. Then there is this nonsense that we might be obliged to enter bilateral agreements and that it is all too difficult. What nonsense! We have thousands and thousands of civil servants who must surely negotiate bilateral agreements all the time.
Jacob Rees-Mogg
Not only would it not be too difficult but we have an agreement in place already under which it is a requirement of the EU that every effort be made to maximise its effectiveness in the event of it being replaced. So the Government’s argument does not stand up.
Mr Nuttall
My hon. Friend makes a good point. It would not be at all difficult, as the Minister suggested, for us to reach separate bilateral agreements, not just with the remaining 26 members but with the other European countries that are not members. We need to be doing deals with them as well, if this is such a good idea.
As pointed out, if we adopted this measure, it would have significant resource implications, as paragraph 33 of the Government’s explanatory memorandum, dated 13 February, makes clear. At a time when the whole thrust of Government policy is aimed at reducing the amount of regulation, our public services will have to contend with yet more rules and regulations. Many will rightly question why we are subjecting them to more Brussels red tape. The bundle of papers available from the Vote Office on this motion demonstrates the size of the problem. It contains well over 300 sides of A4 paper. So we have more regulations, the cost of which we know not. In essence, we are being asked to sign a blank cheque. We should not be taking this step, and I urge the House to vote against the motion.
Mr Dominic Raab (Esher and Walton) (Con)
It is a pleasure, as always, to follow my hon. Friend the Member for Bury North (Mr Nuttall), who powerfully and eloquently put the constitutional case against the measure.
The motion gives the House an opportunity to assess the latest proposals from Brussels on the processing of personal data by the police and other law enforcement agencies. Like others, I am surprised and disappointed that the motion endorsing the opt-in, which is an important step for the reasons already mentioned, first appeared on the Order Paper this morning. Now we learn that the Ministry of Justice impact assessment—the basis on which the House is scrutinising this measure—is fundamentally flawed, having omitted the decisive considerations Ministers have relied on. That is a poor basis for Parliament to exercise its scrutiny prerogatives on.
The Commission argues that the provisions are needed because of the speed of technological change and the increasing amount of information being transferred, but the draft directive would make data protection obligations more onerous and more expensive for UK police forces. The police would have to appoint specialist data protection officers. There would be restrictions on the information that could be held, and rules to allow suspects and criminals to know what data are being held on them and to request amendments and deletion of that information. These are clearly and palpably new rights; it is completely wrong to suggest otherwise.
The directive will apply not only to cross-border investigations but to data transferred between two UK forces, subject to what the Minister has said. The EU sees the proposals as a safeguard but, in reality, they risk creating a bureaucratic straitjacket, sowing legal confusion and adding to the costs of police forces on the front line. The Ministry of Justice impact assessment put it very clearly when it stated that
“many of the new obligations appear disproportionate and unnecessary leading to an overall negative outcome.”
So why are we opting in, against departmental advice?
I listened to the new arguments advanced by the Minister this evening, but I find it unacceptable that they are wholly missing from the impact assessment and that they have not been reviewed by the European Scrutiny Committee. We have heard the standard boilerplate arguments for meekly submitting to extra EU regulation, and there has been no analysis at all of the countervailing arguments, which, if they are as serious as has been suggested, we really ought to be scrutinising properly. At the very least, should we not wait until Ministers have quantified the administration costs of the measures to police forces?
The impact assessment estimates that there will be substantial costs to the police and other agencies, but we have no further details. When will a proper assessment be made? Has the Association of Chief Police Officers, or any individual police force, been asked for a view of the operational impact of the measures? We know that the Ministry of Justice has looked at them; have the Home Office or police forces in general done so? We ought to learn a lesson from the Abu Qatada saga, which is dragging on, and be acutely aware of the real risk of European legislation, judicial or otherwise, tying the hands of UK law enforcement.
When it comes to data protection and related privacy rights, we have been here before. The House will remember the case of Gary Ellis, a serial thief and burglar. In 2003, Essex police were forced to abandon a crime-fighting campaign that would have displayed his picture across his home town of Brentwood in an attempt to deter him and warn potential victims. The courts banned the posters because they breached his privacy rights under article 8 of the convention.
In 2008, the Serious Organised Crime Agency had similar problems with 41 criminals under financial reporting orders. It was forced to protect their privacy and therefore not publish the orders, which led to SOCA’s head, Sir Stephen Lander, publicly expressing his frustration. I appreciate that those cases involve a slightly different set of rights, but they are related and the impact is similar. Is not the reality that this opaque directive will risk arming offenders with yet another legal weapon with which to sue those whose job it is to put them behind bars and protect the public? Paragraphs 49 and 50 of the impact assessment also highlight the cost of civil litigation brought by offenders and suspects against the police and others, and even the prospect of prosecution by the Information Commissioner’s Office.
I note the Minister’s statement that there were no new rights, but paragraph 47 of the impact assessment states that it is likely that this proposal—not existing rights—could have
“a large impact on CJS agencies.”
The risk of such unintended legal consequences is aggravated by the fact that the new directive will be subject to the full jurisdiction of the European Court of Justice. That is why assurances about the limits of its application cannot be relied on.
When it comes to pan-European co-operation, as opposed to data sharing within the UK, the impact assessment is equally sceptical. It states that, far from making us more secure, there will be an increased risk from criminal acts because the directive will gum up international data sharing by adding burdens that will discourage co-operation. Overall, this is a bleak assessment. It raises the question why is Brussels micro-managing policing and law enforcement? If we need a change to our data protection rules, it should be tailored to the problem under national law and in relation to national law enforcement agencies. Why, given the Ministry’s lousy impact assessment, are we even contemplating opting in?
Bitter experience suggests that we may end up with gold-plated provisions protecting UK criminals while other EU countries would apply the provisions selectively, if at all. The obvious course, which I understand is available—I stand to be corrected by the Minister or hon. Members who are lawyers if I am wrong—is to remain at the negotiating table, albeit without a vote, and to decide whether or not we like the end product in due course. Why have Ministers opted against that specific course of action? Why cannot we go down that route? As to relying on bilateral co-operation outside the justice and home affairs regime, can we seriously say that the prospect of negotiating bilateral treaties has harmed public protection, national security or law enforcement for the Swiss or the Norwegians?
Beyond these practical problems, there is a constitutional dimension. The new directive would replace the 2008 EU rules on data protection. These are part of the 130 measures in respect of which we need to decide whether to repatriate or to accept the full jurisdiction of the European Court from 2014. Any laws amended or replaced are not subject to that block opt-out, so by opting out of this measure, we will prevent the UK from opting out of this area of EU policy making later. My hon. Friend the Member for Camborne and Redruth (George Eustice) made that point eloquently and powerfully.
As with most international law enforcement co-operation, effective data sharing is achieved through practical co-operation between national authorities, not through top-down bureaucratic schemes. We do not have a proper analysis of the cost of the directive, and we do not have a proper assessment of the operational impact. The impact assessment has not even been signed off by a Minister. In those circumstances, frankly, it would be irresponsible to commit the UK to this measure without further detail and without further scrutiny. I cannot support the motion.
Tom Brake (Carshalton and Wallington) (LD)
A number of Members have commented on the process, and it will be appropriate for the Minister to respond to them. I suspect that I am not in agreement on European issues with most of those who have spoken so far, but we can agree that European issues need to be discussed in more depth. In my view, if we had that in-depth debate, some people would reach different conclusions on European matters than they do now.
I welcome the opportunity to discuss the draft directive. I want to highlight the fact that this is about the processing of personal data for the purposes of prevention, investigation, detection or prosecution. I emphasise “investigation” because much of the focus has been on criminals, as has been the case with the Mail Online, but many of the people we are dealing with and much of the data being exchanged are relevant to investigations. People who are being investigated may not, of course, be criminals at all.
The Commission highlights the fact that new technologies require a refresh of some of the standards that are in place. We are also debating communications and how we are going to address the new technologies. The Commission is seeking to achieve greater efficiencies in law enforcement co-operation. We have heard a lot tonight about the cost of this particular proposal, but we have heard a lot less about the cost of trying to negotiate this 27 times over in the European Union. We should bear that in mind, too.
The hon. Member for Vauxhall (Kate Hoey) said—I am not sure whether it was in a speech or an intervention—that this is all very complicated, but I do not think it is. The directive’s content is quite straightforward. It deals with the principles governing personal data processing and the rights of individuals to access their personal data, to rectify or erase them. It talks about obligations on data controllers and data processors and so forth. All that is fairly straightforward.
It is interesting to note that the Mail Online is running a campaign on issues to do with the communications database, which I welcome. It talks about standards and who can have access to and control data, yet for this particular proposal, which in many respects is about the same issue of maintaining standards, it has adopted a different position.
This is about cross-border co-operation on crime. I look forward to the debate that we will have—in fact, it may be a debate times 130—about the different proposals that we as a nation may wish to opt in or out of at some point before the end of 2014. I expect us to debate whether measures such as the European arrest warrant, which I accept could be improved on, are helping to bring to justice rapists, murderers and paedophiles. That is what they are there for and what the police believe they are being effective in doing, and that is what we will debate in the Chamber many times over the next couple of years.
Mark Reckless (Rochester and Strood) (Con)
So many instruments in the security and home affairs field are being either repealed or amended that it may not be open to us to make the decision about large numbers in 2014, because we will no longer have any ability to make a choice as a nation other than through a referendum on our membership of the European Union.
Tom Brake
I note what the hon. Gentleman has said. I certainly think that we need to embark on the debate on these measures sooner rather than later because of the potential for Parliament to grind to a halt, which I hope all Members agree would not be in its interests.
The Minister touched on the issue of the directive being a Schengen-building measure. I ask him to reassure me that that is absolutely certain, because I think that there is some uncertainty. I am glad that the Government intend to make it clear that there should be no attempt to impose standards in relation to internal processing.
It has been alleged that the directive might allow criminals to gain access to, or indeed delete, information about themselves. Article 12 of the draft directive states that the right to know the purpose of processing and to whom personal data have been sent can be refused by the police on the grounds that it would obstruct
“official or legal inquiries, investigations or procedures”.
The directive has clearly taken on board the concerns expressed by some Members and parts of the press.
The Government have rightly highlighted concerns about the requirement to act immediately on data security breaches, and I expect them to seek to negotiate on that in the discussions that will take place.
I welcome the position adopted by the Government. I am sure that this is just one of very many similar debates that we shall have over the next 12 or 18 months, which I think will give us an opportunity to highlight many of the positive proposals that have been implemented at EU level to ensure that the police and the judicial system become more effective.
Charlie Elphicke (Dover) (Con)
I represent what are probably some of the most Eurosceptic electors in the country, but they feel passionately about one issue: the need to ensure that Europe works when it comes to dealing with international crime. We see at first hand the problems of people-trafficking and people-smuggling, particularly the disgraceful exploitation of women who are carted secretly over our border and slipped into such places as Soho.
We see drug running, international organised crime, gun running and all the rest of it—that is, some of the most serious international crimes, on which we absolutely have to have co-operation. I therefore strongly support measures to ensure effective international co-operation. However, we have to ask whether this directive is on the side of international co-operation to tackle crime. Is it on the side of law enforcement, or is it on the side of the villain and protecting the villain’s rights? Is it yet another villain’s charter by proxy, emanating from the European Union?
For me, the balance shows the right intent—that we should co-operate—but what we have from the European Union is the wrong way of going about that. We need to give our law enforcement agencies the strongest possible tools to fight crime and the serious international gangs, and so on. However, I am worried because, having listened to this debate, it seems to me that we do not need to opt in at this stage. From the discussion and debate so far, it seems that we could take part in the negotiations, reserving our position, and decide to opt in later. We have the possibility of co-operating bilaterally. Up to now, we have co-operated quite successfully, and to date we have managed to data-share. Why will that suddenly come to a crashing halt if we have a right of privacy and a right not to data-share for criminals and villains, whom we should be fighting with all the data at our disposal?
I am concerned about the lack of attention to detail. Let us look at the checklist analysis that has been provided in the Vote Office, which no Minister has signed. It is a basic thing, but no one paid sufficient attention to detail to ensure that it was signed. Let us look at the Order Paper. The first thing we knew, late last night, was that this motion would be on the Order Paper in the form that it is. Why do Ministers not reach out to Back Benchers, to make the case and to win friends and influence people? The one example given by the Minister—the example of the Romanian—seems a stronger argument for reforming the European arrest warrant than for supporting this directive.
My principal concern, and the principal concern that my constituents will have, is this. Of course we should have international co-operation, and of course we should combat international crime, but are our Ministers going to make the case passionately in Europe, on a line-item basis? Are they going to show that attention to detail, when they will not even accept an intervention from Members on their own side, which in my case was going to be helpful? I am concerned that we should be making sure that we are not frit when we put the case in Europe—that we are strong and trenchant, and that we ensure that our European friends focus on the necessity of ensuring that our law-enforcement agencies are sent into battle not with one hand tied behind their back, but with the full support of all European nations to ensure that we deal with the scourge and evils of international crime.
Many workers in my constituency work tirelessly on the front line for the UK Border Agency. Paragraph 30 of the impact assessment says that the UKBA is seriously concerned, because although people would normally be charged a tenner for a data request, under this proposal it will be completely free. That means that people could be bombing them in all the time, at great administrative expense and effort—for the UKBA, in this case. The UKBA receives 22,000 such requests every year. At the moment, the charge of a tenner wards off ever more requests. Indeed, the UKBA says that the charge should be higher, in order to ward off more vexatious requests. Its preference is for
“an increase in the fee limit to above the present £10 level.”
The UKBA is not going to be happy that the Europeans come along and say, “Actually, it should all be free.” We need Ministers to go to Europe to make the case passionately to our European colleagues that we must ensure that we do not give a blank cheque to anyone who wants to be vexatious in order to protect the so-called privacy of potential villains and criminals. We must send our law enforcement agencies into battle with our strong and passionate support, so we can deal with the great evils of international crime.
The one area on which my constituents support the EU is in respect of co-operation, but we must also ensure that our criminal justice services are not under threat of prosecution, as suggested at paragraph 50 of the impact assessment. I am deeply concerned that the overall impact of this will be substantially negative, even if it is difficult to be specific about that. I hope that Ministers will make a strong and passionate case for taking away the bad things in this directive and ensuring we keep the good things. I urge the Minister not to be frit. Instead, he must be strong and trenchant and win the day.
Mr Blunt
After that contribution, it is clear that I owe my hon. Friend the Member for Dover (Charlie Elphicke) an apology for not having taken his intervention, not least because he welcomed the Government’s general objectives and the balances we are seeking to strike. However, he did then say that this was another villain’s charter from the EU—an argument that some in the press have also made.
The rights of United Kingdom citizens under our existing laws under the Data Protection Act—their rights to access information and for information to be erased—are pretty much the same as what is being proposed in this directive. The same rights of the authorities not to have to erase data that are important for criminal investigations will also continue to exist in the future.
Let me turn to the important question of process, and address the concerns of my hon. Friend the Member for Stone (Mr Cash), the Chairman of the European Scrutiny Committee. I am perfectly happy to concede that these matters could have been handled better. One of the constraints we have placed on ourselves in the so-called Lidington debates is to bring the measures relating to opt-ins or opt-outs under the Schengen protocol to the House and give Members the opportunity to debate them. My hon. Friend pointed out that there is the small matter of prorogation. The decision on the opt-out must be taken on 14 May. [Interruption.] Well, that is what is in the treaties of the EU. The Government have to decide whether to opt-out by 14 May, and we are also committed to coming to the House and giving Members the opportunity to debate.
The information given to my hon. Friend—which was given within 10 days of the directive being published—made no reference to Schengen. I will examine why that was the case, but I am advised that whether or not the matter fell within Schengen was still under examination at the time. There is also an element of legal opinion as to whether or not the Schengen acquis can be correctly claimed by the Commission when it comes forward with these measures. There is an element of process to be applied, therefore, rather than our just taking at face value Commission statements on regulations and directives and whether measures are compliant with Schengen.
Mr Cash
When the Minister reads the transcript, he will see that the matter is specifically referred to in the framework decision recitals. I do not think there is any debate about this point, therefore. What I would like to know is whether the Minister for Europe consulted the Minister on this matter; after all, the Lidington debates are based on an assumption in the context of decisions taken by this House in the light of what the Minister himself specified.
Mr Blunt
No, I did not speak directly to my right hon. Friend the Minister for Europe. Yes, it is in the recitals, but the regulation published by the European Commission in parallel with this also asserts some involvement with Schengen, which we dispute. These issues are not always very straightforward. On the timetable we have placed on ourselves to have this debate in time for the Government’s decision on the opt-out, which has to be taken, and on parliamentary arrangements, I accept that things could always have been done better—
Roberta Blackman-Woods (City of Durham) (Lab)
On a point of order, Mr Speaker. I would appreciate your ruling on the appropriateness of commencing this important debate on the national planning policy framework with only about half an hour of parliamentary time available. Surely this is shambolic organisation, mirroring the NPPF process itself. Would it be possible to have the debate rescheduled, bearing in mind the commitment given by the Minister in this House on 27 March to have a full parliamentary debate on the subject?
Mr Speaker
I am grateful to the hon. Lady for her point of order. The time available for this debate was always to be a function of the amount of time taken by earlier proceedings, and therefore what was left at the end. However, as the scheduling of business is a matter for the Government and as the Minister leading the debate is here, and no less a figure than the Deputy Leader of the House is in his place, it is open to, though not obligatory for, either of those distinguished hon. or right hon. Members to respond to the hon. Lady’s point of order, if either wishes to do so.
The Minister of State, Department for Communities and Local Government (Greg Clark)
Mr Speaker, I am anxious to get on with the debate. I have had some indications from my right hon. and hon. Friends that, although we may commence the debate this evening, it will be possible for us to continue it in the days ahead. I hope that we can make a start and that Members can make their contribution on this very important subject.
Mr Speaker
I am grateful to the right hon. Gentleman for what he has just said.
We now come to the motion relating to the national planning policy framework, and I shall deny the Minister, who is so eager and enthusiastic, not a moment longer.
National Planning Policy Framework
The Minister of State, Department for Communities and Local Government (Greg Clark)
I beg to move,
That this House has considered the matter of the National Planning Policy Framework.
It is a pleasure to open this debate, as we promised to have at the earliest opportunity a debate on the national planning policy framework. I did not expect it to be in two parts, but never mind. Good things come to those who wait.
I begin with a word of thanks to colleagues in all parts of the House who contributed to the consultation on the national planning policy framework, including the Chairs of the two Select Committees who gave distinguished reports and who are present here tonight and will, I hope, be able to speak later in the debate. I thank those who contributed in previous debates that we have had in the House. We have had one debate here and two in the other place, all of which were important contributors to the scrutiny of the framework.
I want to thank every Member who wrote on behalf of their constituents. My own constituency, Tunbridge Wells, is famous for its letter writers. I thought we were unparalleled in the volume of correspondence that we could generate, but I have discovered during the past few months that there are many such constituencies, including Cheltenham, Hitchin and Harpenden, and West Worcestershire. So Tunbridge Wells must respond to a challenge that I had not anticipated. All the points that have been made by Members during debates, by the Select Committees and in letters have been carefully taken into account. I hope that as we conduct the debate we will reflect and Members will be able to identify the particular contributions that they made and they will see them preserved for posterity in the framework.
Claire Perry (Devizes) (Con)
My right hon. Friend will be aware that the postbag was bulging with representations from the constituents of Devizes. He will be glad to hear that when I took members of the Trust for Devizes through the current proposals, they warmly welcomed the changes and thanked him for listening.
Greg Clark
I am delighted to hear that from my hon. Friend. She is right in saying that the contribution of the constituents of Devizes to the NPPF has been signal and will be there for posterity.
It has been right to conduct this consultation using an approach that seeks to build consensus. After all, the consequences of planning extend beyond any particular Government or Parliament. It is right to have sought to reflect all the different contributions.
Sir Bob Russell (Colchester) (LD)
What importance is to be attached to the protection of the natural environment, particularly where it abuts existing urban communities, and what about the protection and the greening of the urban environment where it already exists in our towns?
Greg Clark
Both points are of the utmost importance and were reflected by my hon. Friend in his contribution to the consultation. I will have more to say about that as I make progress.
It was, I think, Sir Winston Churchill who said, “We shape our buildings and afterwards our buildings shape us.” That might be applied to planning policy, so it is right that we have taken the approach that we did. Our reforms have three objectives—first, to transfer power to communities, to give them more power and authority in the planning system than they have been used to having for many years; secondly, to ensure that we support the building of the homes that the next generation will need and the jobs that all our constituents need now and in the future; and thirdly to ensure that the next generation inherits an environment, natural and historic, that is at least the equal of the environment that we inherited. In my view, it should be better than the environment that we inherited. I believe in progress.
Mr Nick Raynsford (Greenwich and Woolwich) (Lab)
Will the Minister recognise that as a result of two years of almost unprecedented chaos and confusion about where planning policy is going, we now see the lowest level of housing starts that has been recorded in recent history? Does he accept that what he has done is to create a climate where the entire house building industry is deeply worried about the prospects of new homes, and the custodians of the countryside are equally worried about whether the countryside is safe? That is the record that he has achieved over the past two years and he should apologise for the mess that he has caused.
Greg Clark
The right hon. Gentleman, of whom I am fond, is confusing his own record with that of the Government. It was his Government who, in over a decade in power, built on average the lowest number of houses in peacetime in the past 100 years. Since the low point for house building during the recession, housing starts are up by 25%. I commend to him what his right hon. Friend the Member for Wentworth and Dearne (John Healey) has said:
“I inherited the regional spatial strategies”.
I think that the right hon. Member for Greenwich and Woolwich (Mr Raynsford) had something to do with those.
Greg Clark
Another person who is keen not to be associated with the strategies—I understand that. The right hon. Member for Wentworth and Dearne said that he
“quickly found that they had…few friends”—
The right hon. Member for Greenwich and Woolwich is another ex-friend. The right hon. Gentleman continued:
“our regional spatial strategies and our approach to planning…was too top-down”.—[Official Report, 30 June 2010; Vol. 512, c. 272WH.]
That is a matter of consensus across the House.
Stuart Andrew (Pudsey) (Con)
Does my right hon. Friend agree that he probably inherited a planning system that meant that constituents such as mine felt completely divorced from any achievement in the planning system? In fact, they had no say whatsoever in the chaotic system of house building that meant that constituencies such as mine were inundated with planning applications that they had no say over.
Greg Clark
My hon. Friend is absolutely right.
I am delighted to welcome a new convert to localism. I chided the shadow Secretary of State when we published the framework and said, perhaps unfairly, that he was an old centralist. It must have had quite an effect, because he has now published an article, in The Daily Telegraph of all places, in which he gives a paean of praise to localism. He writes:
“I want to see a radical devolution of power to local communities. We should do this both because it is right and because there is so much skill and potential in every community to make more of its own decisions.”
I could not have put it better myself and am delighted that he has been converted to the cause.
David Simpson (Upper Bann) (DUP)
I am sure that the Minister will agree that if we are to have efficient planning policy there needs to be consistency in planning decisions right across the United Kingdom.
Greg Clark
The hon. Gentleman is absolutely right. There were more than 1,000 pages of planning policy across 44 different documents of various vintages, so contradictions between them were inevitable, and that was one of the reasons for the inconsistency. Part of the point of consolidating them into a single document is to make it easier to have consistency.
Joseph Johnson (Orpington) (Con)
Residents of Bromley are reassured by the reiteration of protections for the green belt, but can my right hon. Friend guarantee that metropolitan open land and urban open spaces will continue to enjoy the protections that they currently enjoy under the new NPPF?
Greg Clark
Yes, and I know how important that is in my hon. Friend’s constituency.
Caroline Lucas (Brighton, Pavilion) (Green)
This debate on the NPPF is timely, because the Public Administration Committee today highlighted the dire absence of a strategic approach to complex challenges from the Government. Can the Minister begin to reassure us that he really understands the need for strategic leadership by telling us what resources, guidance and assistance he will provide to ensure that local authorities have the capacity to deliver carbon reductions in line with the Climate Change Act 2008, as foreseen by the NPPF?
Greg Clark
The hon. Lady is absolutely right that, as we transfer power to local authorities, it is right to support them in producing local plans, including those on environmental matters, and setting ambitious standards that they expect for local buildings and contributions to the built environment, and we will support them in that. If she talks with her colleagues in the Local Government Association, she will see that they recognise that the engagement we have had has been very productive.
Let me make progress and mention some of the features of the new NPPF, which reflect the contributions that Members from both sides of the House have made. The NPPF makes it crystal clear, as most people recognise, that the local plan is the keystone of the planning system. It continues to protect our green belt and other areas, such as sites of special scientific interest and national parks, which are of great importance to us. It recognises the intrinsic value of the countryside as something we hold very dear. It establishes the importance of bringing brownfield sites back into use. It recognises and reinforces the importance of town centres. It embraces the five pillars of the UK’s sustainable development strategy, something that I know the hon. Member for Brighton, Pavilion (Caroline Lucas) pressed on us during the consultation, but it goes further, because that was not stretching enough, and it requires net gains for nature. It has the most exacting design standards ever seen in the English planning system, it allows councils to protects gardens, it provides robust protection for playing fields, it gives 12 months’ transitional arrangements and it ensures that no council is disadvantaged if it has done the right thing and prepared local plans.
Duncan Hames (Chippenham) (LD)
Members have been quick to congratulate the Minister, as I do, on listening to the feedback that he received about the draft NPPF, but is he as confident that, as a result of those changes, local authorities will make changes to their local plans, or do we risk them carrying on in the same direction that they were heading in before?
Greg Clark
We have seen great enthusiasm on the part of councils, which have campaigned for as many years as many Members to have the ability and the authority to produce plans themselves. Despite the fact that they have been required since 2004 to adopt local plans, only about half have been able to do so, and we want to see that speeded up, because the essence of localism is that local decisions are taken locally in accordance with a plan that reflects all the views of local people.
Chris Heaton-Harris (Daventry) (Con)
I am completely with my right hon. Friend on the consistent application of the plans, on the local plans themselves and on local people being involved, but what then of the final piece of the jigsaw, the reform of the Planning Inspectorate, which in many rulings completely contradicts all local input?
Greg Clark
Part of the problem with the Planning Inspectorate is that, in the regime to date, it has been required to interpret voluminous national planning regulations—many times in a state of inconsistency—and to apply regional spatial strategies. The conflict between those things, caused by successive Governments and, in particular, by the previous Government’s imposition of regional strategies, often leads in the planning system to a real tension and often antagonism, which is a disaster for the future prosperity of our country.
By putting power into the hands of local people so they see that decisions are going to be taken locally and respected locally, part of the purpose of our reforms is to move away from the situation in which decisions taken locally are overturned by the Planning Inspectorate. I have made that very clear to the inspectorate. I went to speak to the inspectorate the morning after we published the NPPF, and I made it very clear that the framework is a localist document which it is to respect.
Greg Clark
I shall give way to the Chairman of the Communities and Local Government Committee and then make some progress.
Mr Betts
The document that the Government have now produced is clearly an awful lot better than the draft, and the Minister has complimented the Committee on the report that we produced, but in the end the real test is whether the new guidance is better than the old guidance—presumably whether, as a result of the changes, we get more houses built, more green energy projects approved and more development in general. But, if the sum total of all local decisions to which the Minister has referred does not account for the amount of growth that the Government want to see delivered in the economy as a whole, what will be the Government’s answer to that?
Greg Clark
We do expect to see more homes delivered, and one feature of the previous system was that, despite having national and regional targets, it bore no relation to what was being built on the ground. Our contention, which has been established through the consultation, is that if we work with the grain of people, if people have the types of homes that they want to see in their environment, and if we raise design standards so that people feel that they are a positive contribution to the built environment, we are likely to avoid the contention that has thwarted the delivery of homes. Such delivery is crucial to all our constituents: we cannot go on with a situation in which we fail to provide homes and employment spaces for them.
The outcome of the consultation has proved satisfactory to many commentators. Almost everyone who commented did so favourably, and they might give the hon. Gentleman some confidence in the idea that the people who gave evidence to his inquiry feel positive about the results.
It is fair to say that the outcome is going to be good for the economy. The CBI said that it
“gets the balance right between supporting jobs and growth, and serving the interests of the environment and society.”
The Institute of Directors said:
“It is great to see hundreds of…unnecessary rules being cut out of the planning system... Britain needs to get building again and these reforms allow that to happen”.
That addresses the hon. Gentleman’s point directly.
The NPPF is good for anyone who needs a home. The National Housing Federation, which, as Members know, represents social housing providers, said:
“The NPPF will give England the simpler, speedier and more positive planning system it needs.”
The Home Builders Federation said:
“The new system strikes a sensible balance between economic growth, social need and environmental considerations.”
It also stated that it is
“a sound basis for a more pro-growth planning system”.
The NPPF is good for the countryside and rural prosperity. The Country Land and Business Association said:
“The section on supporting a prosperous rural economy is excellent, laying the foundations for the growth of all types of business in rural areas.”
The framework is good for town centres. The British Retail Consortium said:
“The NPPF should do a lot to boost the country’s high streets and encourage vibrant town centres.”
It goes on:
“These practical measures…should help bring a boost to local economies.”
Andrew George (St Ives) (LD)
On the future of the countryside, the Minister will be aware that the exceptions approach to housing in rural areas is helpful in delivering affordable housing to rural communities, particularly in deeply rural areas. Will the Minister reassure me and the House that after the transition period, when I am sure many rural authorities will not have put their local plans back in place, the exceptions policy will be deliverable across the countryside, because that is essential?
Greg Clark
It certainly will be. What I did not say was that the National Housing Federation specifically commended the inclusion of the exceptions policy in the draft NPPF.
The framework is good for sport. The Rugby Football Union, the Football Association, the England and Wales Cricket Board, the Lawn Tennis Association and the Rugby Football League said:
“We all welcome the safeguards for sport contained within the NPPF. Thank you for your support and commitment to the sports sector—we are extremely grateful”.
The NPPF is good for excellence in design. The Royal Institute of British Architects said:
“We are delighted that the Government has accepted many of the key recommendations put forward by the RIBA.”
It stated that the framework
“will send a clear message to developers, planning officers and committees that poor quality development will no longer be accepted.”
The Design Council said that it
“wanted to say how much we welcome the fresh approach to design and to raising the bar on design standards to new heights”.
The framework is good for wildlife. The Royal Society for the Protection of Birds said:
“We had 3 red lines for a successful NPPF and these have all been met. The NPPF properly reflects the ambitions of the”—
natural environment White Paper—
“to halt the decline in biodiversity and to secure net gains”.
The NPPF is good for the arts. The Theatres Trust said:
“we celebrate a national planning policy that not only recognises culture, it also creates specific policies that both plan positively for cultural facilities and guard against their loss.”
It is good for our historic assets. English Heritage said:
“Thank you for your confident engagement with EH. Between us we should have secured our fabulous historic environment. We are well pleased with the result”.
The NPPF is good for local democracy. The Local Government Association said that
“local people will have a real say”
and that the framework will
“make it easier for town halls to tailor the planning system towards supporting growth that meets the area’s needs.”
The National Association of Local Councils, which represents parish and town councils, said that the proposals
“will empower communities and local councils to energise their neighbourhoods”.
The NPPF is good for everyone. The National Trust said:
“Thank you for listening to our concerns and those of our members. It is a remarkable achievement to have united almost all of the disparate voices involved”.
I think that the “almost” might have referred to some Opposition Members, but I have not given up on them.
Greg Mulholland (Leeds North West) (LD)
I am sure that my right hon. Friend is coming to this point, but as the chair of the all-party parliamentary save the pub group, I commend him and the ministerial team on including pubs in the national planning policy framework for the first time. Will he ensure that the message goes out strongly that this is not the end of the matter? Local authorities will have the responsibility of ensuring that local services such as pubs, post offices and local shops are protected. Council planning departments can no longer ignore that consideration, because it is becoming their responsibility.
Greg Clark
My hon. Friend has made a distinguished contribution to the debate. Modesty alone forbade me from including the praise that was sent by the representatives of the pub companies.
Martin Horwood (Cheltenham) (LD)
I congratulate the Minister on all his congratulations, which are well deserved. When it comes to local democracy, the framework compares very favourably with the regional spatial strategies, which wasted tens of millions of pounds and generated tens of thousands of objections. Does he accept that there is a slight risk that when local plans come to be examined in public, we will again see the influence of the Planning Inspectorate and elements of the local plans may be overturned? Does he agree that when it comes to local plans, the default answer from the Planning Inspectorate ought to be yes?
Greg Clark
I met the Planning Inspectorate and almost all the planning inspectors who were in conference in Bristol the day after the NPPF was launched. I made it crystal clear that it provided for a localist approach and provided a framework for local decisions, and that I expected decisions to be taken in that vein. I will also expect to see a sample of the decisions that are being taken, including after the examination of plans, to ensure that that is happening. On the basis of my direct discussions with the Planning Inspectorate, I am very confident that that is understood.
Gavin Shuker (Luton South) (Lab/Co-op)
I am extremely grateful to the Minister for allowing me to interrupt his long line of congratulations. We half expected a telegram from the Queen and a note from his mum at some point. They are on their way. The serious point is that the Government have promised a lot on the subject of localism, but two years in, many local communities feel that even the reforms that the Minister has put forward have not delivered localism. What will he do to encourage communities to be confident that the Government will not turn their back on them?
Greg Clark
I confess that I was not able to include a telegram from the Queen, but I understand that the Prince’s Foundation for Building Community is extremely positive about the NPPF.
We find great enthusiasm across the country. In fact, I believe the hon. Member for City of Durham (Roberta Blackman-Woods) is one of the champions of a neighbourhood plan in the city. Right across the country, people are taking up their new rights with great interest and enthusiasm.
Brandon Lewis (Great Yarmouth) (Con)
I thank my right hon. Friend for being so generous in allowing interventions. Has he found from talking to parish councils, as I have, that one thing that appeals to them about the NPPF is the simplification of the system, which means that they and their local residents can actually understand the framework without needing a highly paid solicitor or lawyer to give them advice as they did before?
Greg Clark
My hon. Friend is absolutely right. To have a localist approach and allow people to engage with the planning system locally, the NPPF needs to be intelligible to them. People have concluded that it is not only shorter but written in a style that is accessible to people in communities. That is what planning is about—people coming together in communities to express a vision for their future. We have to let them in.
Mark Pawsey (Rugby) (Con)
Is my right hon. Friend encouraged, as I am, that although it was feared that neighbourhoods would not accept development, the very first neighbourhood plan to come forward—in Dawlish, I understand—included proposals for a new housing development? Does he find that as encouraging as other Government Members do?
Greg Clark
I do indeed, and that is not untypical. In the town of Thame, in the constituency of my Parliamentary Private Secretary, my hon. Friend the Member for Henley (John Howell), a neighbourhood plan is being promoted that involves the provision of housing for local people. We are seeing that across the country.
Dr Sarah Wollaston (Totnes) (Con)
I congratulate the Minister on an excellent consultation, which showed all Departments how it should be done. Localism really matters to our constituents, and nowhere more so than in Totnes. Their only regret is that it has come late, and they would like to be able to set back the clock and have local consultation on a number of projects, such as the Riverside development, that are causing great local concern.
Greg Clark
My hon. Friend is absolutely right. What Totnes does today, the rest of the country will do tomorrow. We are taking the spirit of Totnes around the country and people are responding with enthusiasm.
Roberta Blackman-Woods (City of Durham) (Lab)
Did the Minister receive letters of congratulation from planning lawyers?
Greg Clark
Not especially, but I hope they will have time on their hands in future to engage in some retraining.
I am grateful for all the time and effort that many Members put into the consultation. We took it seriously, and I am glad to say that the framework has been strengthened as a result. I am determined that having had that role in the development of the framework, Parliament should continue to supervise its implementation. It will have a further opportunity to do that when the debate is continued in the days ahead. Beyond that, as well as the work of Select Committees and Question Time, I hope we will have the opportunity in the years ahead to have regular debates on planning policy in the Chamber.
The fact that over the past few months planning policy has come into the public eye and been widely debated is a good thing. I want to continue in that vein not only so that people get involved in planning locally, but so that the subject engages the whole House, as it is entitled to do.
Dr Julian Lewis (New Forest East) (Con)
On a point of order, Mr Speaker, of which I have given you notice. Very recently, in the course of an Adjournment debate, both an hon. Labour Member and myself were refused by a Minister the opportunity to make a brief intervention while he had the floor. He explained in all sincerity afterwards that he thought one had to ask permission in advance of an Adjournment debate—both of the hon. Member whose Adjournment debate it is and of the Minister concerned—whether one could make such an intervention. For the sake of the clarity, would you make an pronouncement on that? If, as I suspect, interventions do not require that sort of prior permission, would you undertake to let Ministers know for the future?
Mr Speaker
I am grateful to the hon. Gentleman for his point of order and for his advance notice of his intention to raise it. The answer is that permission to intervene in an Adjournment debate is not required from the Minister, the Member whose debate it is or the Chair. Permission is required if a Member is seeking to make a speech in the debate. I am constantly struck by how little understood that important distinction is between interventions, which do not require permission, and speeches, which do. I hope the position is now clear to the hon. Gentleman and the House, and I am very happy to inform Ministers more widely, either directly, or through the good offices of the right hon. Gentleman who serves as the Patronage Secretary, and who conveniently is loitering, with or without intent, at the Bar of the House. I hope that is helpful.
Business without Debate
Broadband Services (Dodworth, South Yorkshire)
Angela Smith (Penistone and Stocksbridge) (Lab)
I have a petition from 240 residents of Dodworth in my constituency about the quality of broadband services in their area.
The petition states:
The Petition of residents of Dodworth,
Declares that the Petitioners believe that broadband provision in the Dodworth Water Royd and Rose Hill estates is inadequate and is among the slowest service in the UK; further declares that the Petitioners believe that as time goes on the area will lag further behind in broadband speed, still struggling with a connection measured in megabits per second while the rest of the country has access to speeds measured in gigabits per second; further declares that this disparity will have a negative impact on those living in the area who will be unable to access internet services in future, which will have knock-on effects on lifestyle, prosperity, and in all likelihood, property prices; further declares that the Petitioners believe that the problem in this area is that there is no access to a local fibre street cabinet, which means that connections are made through around 6.5km of copper wire, resulting in slower connection speeds; and declares that the Petitioners believe that such a cabinet could be installed without the need to dig up roads or pavements.
The Petitioners therefore request that the House of Commons urges the Government to take all possible steps to ensure that residents of the Dodworth Water Royd and Rose Hill estates in Dodworth are able to access broadband services that are of comparable speeds to those available elsewhere in the country.
And the Petitioners remain, etc.
[P001021]
Group Lotus
Mr Richard Bacon (South Norfolk) (Con)
I am very grateful for the opportunity to draw the attention of the House to the situation currently facing Group Lotus, the largest employer in my South Norfolk constituency, and the potential threat to 1,200 local jobs. I am very pleased to see parliamentary colleagues here from Norfolk and I have received messages from my hon. Friends the Members for North West Norfolk (Mr Bellingham) and for North Norfolk (Norman Lamb), both of whom would have wanted be here in their capacity as local Norfolk MPs, but who are both sadly overseas on Government business.
Group Lotus is a local and a national icon. It is a famous sports car manufacturer with a very special heritage, and also an important global engineering consultancy. The central concern is that following the Malaysian Government’s recent sale of its stake in Proton Holdings—a Malaysian company that is the owner of Group Lotus—to another Malaysian company, DRB-HICOM, the new owner may respond to what are said to be a number of Chinese businesses that would like to buy Lotus and relocate the manufacturing to China.
The CEO, Dany Bahar, has stated publicly in a recent interview that it would “make no sense” to move manufacturing. However, he also stated the exact opposite at the Paris motor show in October 2010 and at the Los Angeles motor show in November 2010, when it was stated that production would shift abroad and that a new factory site would be decided on before Christmas. One Chinese business, China Youngman, has had a commercial relationship with Lotus for many years. The great fear in South Norfolk is that there will be a repeat of the MG Rover saga when the remnants of a once great British car company were picked up from the scrap heap and put on a boat to China.
It is worth setting out why Lotus is so important and why its continued presence in the UK is so important. The company was founded in 1952 by Colin Chapman, a legendary designer and inventor who, it is probably no exaggeration to say, was an engineering genius. At the heart of Chapman’s philosophy for automotive design was his famous maxim, “Simplify, then add lightness.” His approach was driven by the belief that while adding power made a vehicle faster on the straights, subtracting weight made it faster everywhere, and so he focused on lightness and fine handling rather than on huge horsepower. To this day, Lotus is well known across the world for its unparalleled understanding of drive dynamics.
Lotus has made so many contributions to the history of automotive engineering which are still influential—and in many cases in use today in one form or another—that it is not possible to do justice to all of them in this short debate, although they include the first ever use in a Formula 1 car of a reclining driving position; a monocoque chassis design; aerofoil wings; a wedge-shaped front; adjustable suspension; and many other important innovations. This approach was rewarded with seven Formula 1 constructors championships and six drivers championships, and Lotus’s cars have twice appeared in James Bond films, notably in “The Spy Who Loved Me”, when a Lotus Esprit memorably transformed into a submarine.
Jim Shannon (Strangford) (DUP)
The hon. Gentleman says that there is a lot of Chinese interest. I also understand there is interest from the Formula 1 Lotus team in taking over the firm and protecting every one of those jobs. Does he agree that its bid should be the one that is chosen?
Mr Bacon
I certainly agree that it should be given the most serious consideration. I understand that the owners of Lotus F1, which by the way came second and third in the recent Bahrain grand prix, have expressed an interest and said that they would see no reason to move any of the business away from the UK. Their views should be treated with the greatest care and consideration.
The production side of the business has been doing very well and has built tens of thousands of relatively affordable and cutting-edge sports cars, employing many local people in the process. The consulting side has been so successful over the years that it is said that one in 10 cars in Europe has something in it that derives from Lotus’s intellectual property.
Lotus moved in 1966 to Hethel in South Norfolk to a purpose-built facility on the site of a former US air force airfield. The business now employs around 1,400 worldwide, some 1,200 of whom work at the Hethel headquarters. In 1996, Lotus was bought by Proton Holdings, a Malaysian car manufacturer. Lotus has experienced financial difficulties at times, but it was profitable as recently as 2008-09, when the Group Lotus annual accounts show a profit before tax of £1.5 million. It is important to emphasise this point as one will find many incorrect references in the automotive press to the “fact” that Group Lotus has never made a profit since it was bought by Proton, when the actual facts are that the company has been profitable quite recently. Lotus has a great story to tell and is at the heart of an innovation cluster. The recent and growing success of the Hethel engineering centre in nurturing a variety of high-tech small businesses has been due, in large measure, to the presence of Lotus nearby. There are also wider benefits along the A11 corridor that my hon. Friend the Member for Mid Norfolk (George Freeman) will address if he catches your eye, Mr Speaker.
If Lotus were removed, it would be a body blow to the growing success of a local economy that is succeeding precisely as part of the shift away from the overdependence on financial services that the Government wish to see.
Brandon Lewis (Great Yarmouth) (Con)
I congratulate my hon. Friend on securing this important debate on a hugely important employer and an iconic name for Norfolk. Does he agree that one reason we can highlight Lotus’s excellent forward thinking is its recent fantastic work on alternative energies for vehicles that has led to products such as the Tesla?
Mr Bacon
I can confirm that. I will talk later about the Tesla, which is a great example of the leading-edge technology that makes Lotus very interesting to a wide variety of potential financiers.
In common with many businesses since the beginning of the worldwide financial crunch, things have been more difficult, but many observers believe that Lotus continues to have a bright future and tremendous potential, particularly given the company’s expertise in areas such as those that my hon. Friend the Member for Great Yarmouth (Brandon Lewis) mentioned, including electric and hybrid vehicles. These skills make Lotus a very sought-after partner for car companies across the world.
Elizabeth Truss (South West Norfolk) (Con)
Does my hon. Friend agree that engineering skills are vital for Norfolk and that the creation of the proposed maths and science free school for 16 to 18-year-olds will be important to the development of those skills and to Lotus and other engineering companies across the county?
Mr Bacon
I agree that the so-called STEM subjects—science, technology, engineering and maths—are vital to firms such as Lotus, and I am keen to see those developed through the proposal for a school specialising in them.
It is important to note that although Lotus’s contribution to the history of technology and innovation is already imperishable, it has not stopped. In this Olympic year, it is worth pointing out that Chris Boardman won the 4,000 metre pursuit gold medal at the Barcelona Olympics riding a revolutionary lightweight and aerodynamic carbon composite monocoque bicycle developed by Lotus. He also rode the Lotus “superbike” to smash the world 5,000 metre pursuit record by more than 8 seconds.
Tesla Motors, which my hon. Friend the Member for Great Yarmouth mentioned, is a business based in California whose investors included, among others, the owners of Google. It asked Lotus to develop a fully electric car, and the Tesla roadster was built in Norfolk and then exported to California with extraordinary success.
Simon Wright (Norwich South) (LD)
I congratulate the hon. Gentleman on securing this debate on a subject that is so important for Norfolk’s economy. Whenever I have visited Lotus, I have been impressed to learn about its advances in low-carbon vehicle technologies. The UK car industry is a world leader in this area. Does he agree that if Lotus were to leave Norfolk and the UK, it would risk losing access to skills and expertise and jeopardising its ability further to develop its reputation in low-carbon technologies?
Mr Bacon
The hon. Gentleman is absolutely right. I have talked about Lotus’s heritage, which is of stunning historical importance, but it is the future we are concerned about. Lotus has demonstrated, with things such as the Tesla project, the tremendous contribution it can make to the future and its expertise in hybrid and electric vehicles.
Proton, the Malaysian car manufacturer that has owned Lotus since 1996 and invested considerably in it, was founded in the early 1980s under the stewardship of the then Malaysian Prime Minister, Tun Mahathir, who, it is fair to say, is something of a visionary who has probably done more than anyone else to create the Malaysia we know today—a modern country with a powerful economy and global connections. The Malaysian Government held a large stake in Proton for many years, but made it clear that they no longer wished to retain this stake. In early January, Tun Mahathir gave his public blessing to the sale of the stake to DRB-HICOM, a major industrial conglomerate with a wide variety of interests.
On 16 January, HICOM announced that it had bought the Malaysian Government’s stake in Proton and thus become the ultimate owners of Group Lotus. Incidentally, on the same date, Group Lotus announced the opening of a major brand store in London’s Regent Street. Only three days earlier, on 13 January 2012, a UK-registered company, Lotus Youngman UK Automotive Company Limited, company number 7909455, was incorporated at Companies House—that was just three days before HICOM bought Proton—with the chief executive officer of Group Lotus, Dany Bahar, as one of its directors. Curiously, that was not announced to the Malaysian stock exchange until several months later, on Thursday 12 April.
That is of particular concern because, as has been reported in the newspapers, the CEO of Group Lotus, Dany Bahar, has a financial incentive in his contract to sell the company, and because Group Lotus no longer owns the right to use the name “Lotus” on cars sold in China. That right is now owned by a small Taiwanese company, which licenses it to China Youngman, a potential buyer of Group Lotus that is already importing Lotus cars into China. That is an odd thing for any car company to do, particularly one whose brand and the heritage are so important. The brand is a central part of the company’s value, and it is hard to imagine selling it to others so that it could not use its own brand name in a territory without let or hindrance, but that appears to be what has happened.
By coincidence, my right hon. Friend the Prime Minister was in Malaysia recently, and he spoke to the head of Proton, Dato’ Sri Syed Zainal. Unfortunately, it appears that only hours after our Prime Minister had spoken to the head of Proton to emphasise the importance of British jobs at Group Lotus, Dato’ Sri Syed was in China seeking a buyer for Group Lotus. That has naturally caused immense worry and concern for the 1,200 employees at Group Lotus. It is also unnecessary, because there are well-capitalised potential buyers for Group Lotus with a credible plan to keep the business and the jobs in the UK.
When I raised the issue with the Prime Minister last week at Question Time, he emphasised the importance of Lotus, saying that he had raised the issue with the Malaysian Prime Minister and that the Government were monitoring the situation closely. My fear is that, even if an agreement is reached, any guarantees that might be provided about British jobs will later turn out to be worthless. The Kraft Foods takeover of Cadbury comes to mind in this respect.
One way of accomplishing a transfer to a Chinese owner against the wishes of many of the interested parties would be to reach an agreement in principle to sell Group Lotus but to present it as a joint venture rather than a sale, then to wait until after the Malaysian elections—Lotus is rightly valued by many in Malaysia as a jewel in Proton’s crown and the issue could become politically divisive—and have a Chinese buyer such as China Youngman acquire 100% of the business after the Malaysian elections were safely out of the way, transferring manufacturing to a new Chinese owner later. One could even have a private side agreement to that effect.
People in Norfolk, most notably the loyal and hard-working Lotus employees, want to ensure that that does not happen. I have asked HICOM to consider carefully its responsibilities to local employees and I hope that it will do so. However, I remain extremely concerned. The fact that KPMG has been appointed with a mandate to sell Group Lotus to the Chinese is not an encouraging sign. Nor is the fact that the Malaysian banks want their money back from Proton. I fear that Proton will say that it has decided to keep Lotus, while negotiating with the banks for as long as possible to write off or reduce debt, then either hand what is left of Group Lotus to the Chinese or liquidate it. The question for Proton in such circumstances would be: is it planning to pay the suppliers? That is relevant because there are tens of millions of pounds of accounts receivable outstanding, and many further jobs in the supply chain beyond those at Group Lotus itself are affected.
Mr Keith Simpson (Broadland) (Con)
Following my hon. Friend’s logic, what does he think our Government can actually do, apart from using persuasion and nudging the people who might be carrying out the actions about which he is rightly pessimistic?
Mr Bacon
The job of Her Majesty’s Government is to make it very clear to the Malaysian Government and to the company that is the ultimate owner—DRB-HICOM—that we take this matter very seriously, and that if it goes the wrong way, there will be serious consequences for our relationship with Malaysia.
To sum up the situation, the CEO of Proton Holdings—who is now in any case only a temporary figure—was in China seeking a buyer for Group Lotus only hours after our Prime Minister spoke to him in Malaysia recently. A UK-registered company, Lotus Youngman, was set up in January 2012, only three days before HICOM bought Proton, with Group Lotus CEO Dany Bahar as a director, but this was not announced to the Malaysian stock exchange until a fortnight ago. The CEO of Group Lotus is incentivised in his contract to sell Group Lotus and has recently been in China. Any letter of comfort guaranteeing jobs in Norfolk that might appear from a Chinese buyer is unlikely to be worth much, if anything at all, especially given that KPMG has a mandate to sell the business. However, there are well-capitalised would-be buyers of Group Lotus who would definitely keep the business and the jobs in Norfolk, and 1,200 jobs are at risk in my South Norfolk constituency if this goes the wrong way.
I would urge the Minister and all his colleagues, including the Secretary of State and the Prime Minister, to put all possible pressure on the Malaysian Government to ensure that DRB-HICOM permits the sale of Group Lotus only to a bidder who will provide credible guarantees for the future of the business as an ongoing concern in Norfolk. I would like the British Government to make very clear to the Malaysian Government, and to DRB-HICOM, that they consider the issue of local jobs in Norfolk to be of crucial importance and that a betrayal of the kind we have seen elsewhere in the corporate sector is unacceptable and would have far-reaching consequences.
George Freeman (Mid Norfolk) (Con)
I am grateful for this opportunity to speak. While Lotus is in the constituency of my hon. Friend the Member for South Norfolk (Mr Bacon), it is only a mile over our shared boundary and many of the 1,200 employees and the affected families live in Mid Norfolk, particularly around Wymondham. I congratulate my hon. Friend on securing this debate and on setting out the arguments so clearly. I am keen to give the Minister as much time as possible to address the important issues, so I shall make just three simple points.
First, the presence of Lotus and its legacy has led to the creation in the area of a world-class cluster of engineering, manifested in both the world-class factory and the expertise around it, and in the Hethel engineering centre—a successful and now full incubator of successful start-up businesses, feeding off and around the centre of excellence around Lotus. A cluster of former Lotus employees, many of them successfully trading and innovating, often from small premises around the area, provide an important part of our local economy.
Secondly, the engineering cluster is central to the Norfolk economy and, indeed, the wider East Anglian innovation economy and to the wider rebalancing mission that I know is central to the mission of the Department for Business, Innovation and Skills.
Thirdly, these engineering and manufacturing skills are central to unlocking the full value of the wider innovation economy—in particular, the science we have on the Norwich research park in the form of biomedicine, agriculture and environmental science, and indeed, dare I say it, down the A11, in the innovation corridor in Cambridge. We have huge intellectual property skills in our area. In the past, we have sometimes been weaker in the ability to turn that intellectual property into products that we can sell. The skills in this cluster are central to developing and retaining that value within our Anglian economy.
I am sure I am speaking for other hon. Members across East Anglia, some of whom are in their places and some of whom are not, in urging the Minister to do all he can to ensure that the points raised by my hon. Friend are given all possible attention, and to bring as much pressure to bear as possible to keep this iconic and important business in the UK.
The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)
I congratulate my hon. Friend the Member for South Norfolk (Mr Bacon) on securing this debate and on his energetic advocacy on behalf of his constituents, not just today, but previously. He is right to say, as other Members have pointed out, that Group Lotus is one of largest private sector employers in the area, so I understand the importance that he and––as is plain from the attendance this evening––the vast majority of Norfolk representatives attach to the issue. They want to ensure that we as a Chamber understand how importantly their constituents view this matter.
Today’s debate follows on from parliamentary questions from my hon. Friend, from correspondence and, indeed, from considerable speculation in the media. I know that he will appreciate that I cannot comment on media speculation, but as I made clear to him last night, when we had an opportunity to discuss the issue—with him having raised it and me wanting to ensure that I understood the detail of his concerns—he should understand that the whole of the Government take this matter extremely seriously, and we are already actively engaged in it.
Let me respond to the sensible points, if I may say so, about the calibre of the company that we are dealing with. Lotus is a world-class design engineering company, and, as we have heard, a manufacturer of highly desirable sports cars, supported of course by a dedicated and experienced work force. The group, which has more than 60 years of history behind it, comprises Lotus Cars, Lotus Engineering and Lotus Racing. As my hon. Friend observed, its journey was from humble beginnings. I think it was in the late 1940s that Colin Chapman was first in a lock-up garage developing a trial racing car, but that has led all the way to a globally renowned company manufacturing high-performance products.
This is a business that has always been at the cutting edge. It makes an important contribution to the UK automotive sector, not just through the exports of its iconic cars but through the world-class design engineering to which my hon. Friend referred, which, although particularly relevant to the automotive sector, is—as he said—also relevant throughout the engineering field. Lotus is a globally respected business which works with many of the world’s most prestigious car manufacturers and tier 1 suppliers. Lotus engineers spearhead research in crucial areas such as hybrids, electric vehicles and renewable fuels, which is one of the reasons why many people understand that the business has a very strong future.
The Government believe that the company’s work must continue and that it should continue in Norfolk, but, as a number of Members have pointed out, it is important to view Lotus in its wider context. This country has one of the most diverse and competitive automotive sectors in the world. When considering the prospects of both individual businesses and the sector as a whole, we should take account of the key investments that have been made. Some £4 billion has been invested in the last 18 months. That sends the important signal that international investors recognise the calibre of the work force, and also the opportunities that they can gain by basing their firms here.
The sector is strong and growing. Vehicle production has risen by 5% in the last year, and more than 1.4 million vehicles have been produced. Engine production has also increased. I am thinking particularly of the strength of powertrain in the UK automotive sector: some 2.5 million units have been produced in the last year. One of the encouraging features of the whole sector is that not only is its productivity strong and its work force capable, but it exports a significant proportion—some 80%-—of what it produces. Last year exports were up by 15%, and they are now at an all-time cash high of just short of £30 billion. Lotus is part of that: last year it recorded production of 1,458 cars of which 1,189 were for export, so it clearly has a strong export programme.
Despite a difficult international economic environment and a contracting European market, global demand for UK-made vehicles has risen, which shows that UK producers are generating what customers throughout the world are looking for. That is why our car trade deficit is at its lowest for more than 36 years. There are a number of good examples. Nissan has invested £250 million, creating the possibility of some 3,000 new jobs in both its own business and its supply chain. Jaguar Land Rover has announced that it will take on a further 1,000 people and increase shifts at its Halewood plant. Honda is to double production at its main European plant in Swindon. Those are all important investments in the sector. It is important for everyone—both the existing sector and potential investors—to understand that the UK automotive sector has real strength and depth, and is backed by a Government who are actively supporting those who seek to invest here in the United Kingdom.
My hon. Friend briefly mentioned ultra-low-carbon vehicles. As he said, Lotus is a key participant in that regard, as it is clear from its world-class range-extended electric vehicle technology and its role in the development of the important emerging technology of hydrogen fuel cells. The Government are pursuing a programme which seeks to ensure that we have a marketplace in which those technologies can develop, because we cannot assume that past technologies will be revived. As the new generations of ultra-low-carbon vehicles develop, it is important for those who wish to invest to recognise that the expertise and know-how are resident here.
Let me turn to the details of the current situation, which my hon. Friend mentioned. The takeover by the Malaysian company DRB-HICOM of Lotus’s parent, Proton, was begun in January, as we heard, and completed around the middle of March. DRB-HICOM is one of Malaysia’s leading companies; indeed, it is the country’s leading automotive manufacturer. Its values, stated clearly and openly, include excellence, innovation, quality and teamwork. Since then, DRB-HICOM has been carrying out what we understand to be standard due diligence checks on Lotus and other assets related to its takeover of Proton. As my hon. Friend mentioned, the Prime Minister raised the issue of Group Lotus with the Malaysian Prime Minister and Proton while he was in Malaysia recently. He stressed, as I do today, that the Government continue to wish to work with the company.
In response to media speculation, DRB-HICOM issued a press statement last Saturday stating that no decision had been taken on whether to sell Lotus. In the meantime, DRB-HICOM has also stated that it continues to support the company, including through management help. I understand that additional funds have been made available by DRB-HICOM to enable Lotus to resume production while the due diligence continues. That would follow on from the £100 million invested in Lotus at Hethel in recent years.
Mr Bacon
May I ask my hon. Friend to interrogate closely the question of how much support is being provided so that manufacturing can “resume”, as he puts it? My understanding is that DRB-HICOM is drip-feeding small amounts of cash to the business, that there is little manufacturing going on and that there might not be too much manufacturing going on in future unless we are careful. If he could press the Malaysians—indeed, the Government of Malaysia—on that point, so that they put pressure on DRB-HICOM to reach a resolution in the interests of workers in Norfolk, I would be very grateful.
Mr Prisk
I am more than happy, as we continue our close contact with the companies, to ensure that those questions are tested. My hon. Friend will know that I do not generally take no for an answer, and I intend to ensure that we as a Government have the full facts before us.
My hon. Friend is right that although the statements we have heard are important, we also need to recognise that this is a rather unsettling time for the work force, their families and the business community locally. Let me make it clear to him that we as a Government—all the Ministers engaged—intend to maintain close contact with all the key stakeholders. That is why the British high commissioner in Malaysia recently wrote to Proton, following on from the Prime Minister’s meeting. It is also why this afternoon the Secretary of State spoke to Mr Dany Bahar, the Lotus chief executive, making it clear to him that the Government are fully behind ensuring that the company and its work force remain an integral part of the Norfolk economy. The Government will seek to make further contacts with the Malaysian Government, as my hon. Friend requested, because we recognise that we need to be talking at all levels on this important issue.
Let me turn briefly to the regional growth fund. My hon. Friend will understand that we have made a conditional offer of financial support for Lotus’s growth plans. That offer has been on hold since the acquisition of Proton by DRB-HICOM in January. We have made it clear to Proton and the companies that the Government stand ready to reactivate the RGF grant offer—subject to the normal due diligence—but only if the vehicle development programme goes ahead in Norfolk. That is an important principle to establish.
I thank my hon. Friend for bringing this important issue to the attention of the House. I understand that this is an unsettling time for the employees, and I trust that the situation will be clarified shortly. I want to make it clear again that the Government wish to see Lotus continuing to build on its rich industrial heritage in Norfolk, and we stand ready to use the regional growth fund if it seeks to do that. In conclusion, Ministers at the highest level are taking the matter very seriously. I can tell my hon. Friends here this evening that we will remain in close contact with the companies and will work to ensure that the new owners understand that Norfolk is the home of Lotus.
Question put and agreed to.