House of Commons

Monday 15th October 2012 Commons Chamber

Monday 15 October 2012

The House met at half-past Two o’clock

Prayers

Monday 15th October 2012 Commons Chamber

[Mr Speaker in the Chair]

business before questions

death of members

[Mr Speaker]

I regret to have to report to the House the death of two Members. Malcolm Wicks, the right hon. Member for Croydon North, died on 29 September. Malcolm was a popular and well-respected Member who served as Chairman of the Education Select Committee before being appointed to Government. Malcolm’s ministerial career spanned education, pensions, science and energy.

Sir Stuart Bell, the hon. Member for Middlesbrough sadly died on 13 October. He was a Member of the House for almost 30 years and served as Second Church Estates Commissioner for a record 13 years. Sir Stuart also chaired the Finance and Services Committee and was a member of the House of Commons Commission for 10 years.

I am sure that Members in all parts of the House will join me in mourning the loss of our two valued colleagues and in extending our sympathy to their wives, families and friends.

Oral Answers to Questions

Monday 15th October 2012 Commons Chamber

The Secretary of State was asked—

[Paul Uppal (Wolverhampton South West) (Con)]

1. What recent progress her Department has made in tackling abuses in immigration via the family route.

[The Minister for Immigration (Mr Mark Harper)]

Before I answer the question, Mr Speaker, on behalf of Members on both sides of the House, I would like to add to your tribute to Malcolm Wicks and Sir Stuart Bell. Your sentiments were very well aimed, and I am sure that all Members will support them. These were valued colleagues who will be sorely missed.

The Government implemented new family immigration rules on 9 July this year. These tackle the abuse of immigration based on sham marriages, ensure that family migrants do not become a burden on the taxpayer and promote the integration of family migrants in British society.

[Paul Uppal]

May I also support the sentiments expressed by the Minister? I know that Malcolm Wicks was a fellow Wolverhampton Wanderers fan, so he was a man who always spoke incredible common sense.

On this particular issue, many of my constituents in Wolverhampton South West express concerns about the robustness of the current entry and clearance system that operates in India. Will the Minister assure me, the House and my constituents that that system is still robust and fair and will meet the high expectations that people have of it?

[Mr Harper]

I can give my hon. Friend that assurance. Entry clearance decisions are unbiased, robust and meet the high expectations that we all have. The decisions are closely monitored by entry clearance managers and they are also inspected by the chief inspector who looks at UK Border Agency operations, both domestic and overseas.

[Kevin Brennan (Cardiff West) (Lab)]

Many of our constituents—and, indeed, many Members—have married people from overseas. As well as appropriately tackling the abuses of the system, will the Minister ensure that there are not unnecessary and bureaucratic delays to the processing of legitimate marriages?

[Mr Harper]

Of course that is part of the task we have set out. If the hon. Gentleman has any specific cases in mind, he can raise them with me and I will see what I can do to look into them for him.

[David T. C. Davies (Monmouth) (Con)]

Forced marriage has been a particular problem, especially within some communities. What consideration has the Minister given to raising the age at which one can get married as a means of trying to reduce this abuse?

[Mr Harper]

My hon. Friend raises an important point, and he will know that I have now taken over the lead in the Home Office on combating human trafficking and related matters. We have already tackled the issue he raised to some extent, and now that he has raised it with me, I will look to see if more can be done to tackle this important issue.

[Chris Bryant (Rhondda) (Lab)]

I, too, wholeheartedly support the comments you made, Mr Speaker, about Malcolm Wicks and Sir Stuart Bell. On the Opposition Benches we all feel that we have lost two great gentlemen from amongst our ranks. They were both intelligent men who brought a keen intelligence to the way in which they debated issues. As it happens, they were both ardent pro-Europeans, who might have had a word or two to put to the Home Secretary later this afternoon. We pay tribute to them both.

I understand that the main reason why the Minister has introduced these recent changes to the family route provisions on immigration is to cut net migration, as the Prime Minister promised before the general election, to the tens of thousands. Will he confirm, however, that the Office for National Statistics has said that since 2010 there has been no statistically significant difference in the number of migrants to this country?

[Mr Harper]

I have seen that comment, but with a fall in net migration from 252,000 to 216,000—a fall of 15%—I will leave it to other Members and the public to judge whether they view that as significant. I know that the hon. Gentleman either tweeted or said at the Labour conference that he thought having a net migration target was “ludicrous”, but was then forced to unsay it when he was told to do so by his boss. We think having a net migration target is sensible: we mean to implement it, and I think the House will support it.

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

2. What steps she is taking to promote better recording of hate crimes against disabled, homosexual and transgender people.

[The Minister of State, Home Department (Mr Jeremy Browne)]

Tackling hate crime is an issue that the Government take very seriously, and we are committed to improving the recording of such crimes. Last month the Home Office published the first set of official statistics on hate crimes recorded by the police in England and Wales, which will help police forces and police and crime commissioners focus resources on where they are most needed.

[Paul Maynard]

Will the Minister join me in grimly welcoming the increase in reported disability hate crime, which is due not least to the efforts of the Government and individual Ministers to encourage an environment in which people feel able to report such crimes? That includes local initiatives such as the third-party reporting centre that we have opened in Blackpool.

[Mr Browne]

I strongly agree with my hon. Friend. One of the difficulties is giving people the confidence and the practical means to report hate crimes in the first place, but we are keen to encourage and facilitate that process. Of course, the level of recorded crime is sometimes higher although the baseline is the same or even falling because people are being encouraged to come forward, but we want them to come forward, and we are making it easier for them to do so.

[Simon Danczuk (Rochdale) (Lab)]

I understand that the Metropolitan police have a specific category of recorded hate crimes against Muslims. Does the Minister agree that, as part of our fight against Islamophobia, it should be rolled out in areas throughout the country, including Greater Manchester?

[Mr Browne]

As I said earlier, the Home Office has compiled statistics on recorded hate crimes in England and Wales for the first time. Only 4% of hate crimes were based on religion—the vast majority were race-based—but we take all hate crimes very seriously, and where we can further improve not only the compilation of data but the practical consequences and the way in which that information is used to tackle such crimes, we shall do so. I shall give serious consideration to the hon. Gentleman’s comments.

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

The Minister will be aware that later this week the Government will propose an amendment to the Equality Act 2010 which would remove the good-relations duty from the Equality and Human Rights Commission. Does the Minister share my fear that that will weaken attempts to attack hate crime and to promote harmony between different sections of the community?

[Mr Browne]

No, I would not draw that conclusion, but I assure the hon. Lady and every other Member that we are very serious about tackling hate crime. It takes many different forms, and we want to ensure that robust procedures are in place to ensure that the police take effective action.

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

3. What assessment she has made of the effectiveness of the security operation at the London 2012 Olympic and Paralympic Games; and if she will make a statement.

[The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)]

I am delighted by the success of the London 2012 games security operation. We delivered what we promised: reassuringly visible and proportionate security which protected games visitors, competitors and the wider public. I am particularly grateful to the many thousands of police and armed forces personnel who did such a great job, and in such a great spirit.

[Mr Wilson]

Will my hon. Friend join me in praising the hard work and dedication of those in the UK Border Force and all the other agencies whose professionalism made the security and immigration operation at the Olympics not only a great success, but a great advertisement for the UK?

[James Brokenshire]

My hon. Friend is right to highlight the work of the UK Border Force in ensuring that the border was run efficiently and effectively during the games. I think that it is also worth highlighting the work of the Security Service, and that of the volunteers who contributed so much to the games.

[Keith Vaz (Leicester East) (Lab)]

The Home Affairs Committee report makes it clear that had it not been for the actions of the Home Office, the London Organising Committee of the Olympic Games and Paralympic Games and the Army, Olympic security would have been a fiasco because of the failure of G4S. Has the Minister seen the Committee’s final recommendation that a register should be established listing the private sector companies that failed to deliver, and will he look into the COMPASS contract which has just been awarded and about which concern has already been expressed?

[James Brokenshire]

I am grateful to the right hon. Gentleman for recognising the work that was put in, both many years in advance of the Olympics and during the games themselves. He will doubtless be aware of the work that the Cabinet Office is doing in assessing each major contractor to government. Performance will form part of that analysis.

[John Penrose (Weston-super-Mare) (Con)]

Further to the earlier question from my hon. Friend the Member for Reading East (Mr Wilson), one of the biggest concerns before the games was the prospect of long queues at ports of entry such as Heathrow. May I therefore congratulate the Minister and the UK Border Force on a job well done in extending a warm and trouble-free welcome, without compromising border security, as the rest of the world arrived on our shores? Will he confirm that he does not view security and welcome as alternative choices to be traded off against each other, and that we can and should expect to deliver both?

[James Brokenshire]

My hon. Friend has rightly, again, praised the sterling work of the UK Border Force in ensuring that Heathrow and all other ports operated efficiently and effectively, and that not only were people able to pass through the border speedily, but national security was maintained.

[Stephen Timms (East Ham) (Lab)]

I welcome the fact that the Minister has paid tribute to the Metropolitan police’s contribution to the success of the Olympic games—a point that was surprisingly omitted from the Prime Minister’s speech in Birmingham, presumably reflecting the poor relationship between Government Members and the Metropolitan police following the altercation with the Chief Whip. Will the Minister spell out more fully his tribute to the very important contribution that the police made to the great success of the games?

[James Brokenshire]

The Prime Minister has said that we have the greatest police force in the world, and I wholeheartedly endorse that. We saw some tremendous efforts by the police—the mutual aid from police forces up and down the country—to ensure that security was maintained during the Olympics and that we had a games of which we were all proud.

[Nadine Dorries (Mid Bedfordshire) (Con)]

4. What steps her Department is taking to tackle metal theft.

[Richard Ottaway (Croydon South) (Con)]

7. What steps her Department is taking to tackle metal theft.

[The Minister of State, Home Department (Mr Jeremy Browne)]

The Government are delivering a coherent package of measures to tackle metal theft, which includes: banning cash payments for scrap metal; enhancing law enforcement through the national metal theft taskforce; and improving the traceability of stolen metal. We are also working with my hon. Friend the Member for Croydon South (Richard Ottaway) to support his private Member’s Bill to reform the scrap metal industry.

[Nadine Dorries]

Scrap metal theft is a huge issue in my constituency, so what protections will there be for responsible and legal scrap metal dealers who blow the whistle on those who act in an illegal and criminal manner?

[Mr Browne]

I will make two brief points on that. First, we are keen to encourage people to report wrongdoing in this sector, where there has been widespread abuse, as it is important that that is addressed. Secondly, I hope that one of the main benefits of the measures that have been introduced is that legitimate scrap metal dealers, whose businesses have been hampered by having to compete with people who are breaking the law, will now be able to operate in a culture where it will be easier for their businesses to be profitable

[Richard Ottaway]

In the light of the Government’s laudable decision to commemorate the centenary of the first world war, does the Minister agree that my Scrap Metal Dealers Bill will do much to counter the vandalism of graveyards and war memorials? Does he also agree that to support the Bill is to recognise the significance of the first world war, a legacy that future generations should never forget?

[Mr Browne]

The House will not be surprised to learn that I strongly agree with my hon. Friend. Scrap metal theft is a serious crime that can have serious and expensive consequences, but Members in all parties will feel that when it involves the desecration of war memorials, particularly those relating to the two great wars of the past century, in which so many British and Commonwealth soldiers died, that is particularly offensive to our sensibilities. I very much hope that his private Member’s Bill, and other measures being taken by the Government, will help to address that appalling behaviour.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

The theft of war memorials is a real problem, so what conversations is the Minister having with the taskforce chaired by the Secretary of State for Culture, Media and Sport on how the Departments can work together to tackle this problem further? I say that notwithstanding the excellent work being done by the hon. Member for Croydon South (Richard Ottaway).

[Mr Browne]

I am happy to have discussions with any parties that are interested in trying to ensure that we can make improvements, but I can tell the House that new measures will be introduced as early as 3 December to create a new criminal offence that prohibits cash payments in the purchase of scrap metal. We are putting a series of measures in place; we are not merely waiting for my hon. Friend’s private Member’s Bill to come into effect, which we hope will happen. We are acting more swiftly than that and I am keen to draw on support from all parties and none to try to ensure that we tackle this serious crime as effectively as possible.

[Mike Crockart (Edinburgh West) (LD)]

I understand the intense concentration on what is a dreadful crime, but does my hon. Friend agree with me that, as I know from my experience as a police officer, effective and robust regulation of brokers and recyclers will have a far greater effect on the prevalence of this crime than concentration on a particular payment method?

[Mr Browne]

I partially agree with my hon. Friend. It is important to consider payment methods, because cash payments make it easier to facilitate criminal activity than more easily recordable methods of payment. I do not for one moment believe that dealing with that will be effective in itself, however, so it is necessary to see it as part of a package of proposals, which is the approach that the Government are taking.

[Andrew George (St Ives) (LD)]

6. What plans she has to reduce crime levels in rural areas.

[The Minister for Immigration (Mr Mark Harper)]

Rural areas suffer from certain types of crime, and I am looking forward to the election of police and crime commissioners in a month’s time so that those rural communities have more of a say in policing priorities. I hope that in my own county of Gloucestershire that will include the election of Victoria Atkins, the excellent Conservative candidate.

[Andrew George (St Ives) (LD)]

I am sure that Brian Blake in Devon and Cornwall will have a different view on those matters. I am grateful to the Minister for his reply, but he will be aware that farm watch, neighbourhood watch and special constables provide important community and voluntary support for rural areas. In these straitened times, what reassurance can the Minister give that the beat managers who are essential in co-ordinating the police response in those areas will be available and will continue to exist?

[Mr Harper]

My hon. Friend makes an important point. I know from experience in my county that the difficult financial decisions that police authorities and chief constables have had to take can easily be combined with ensuring that there are more resources on the front line and that some of those excellent neighbourhood policing priorities are maintained. The election of police and crime commissioners will ensure that those neighbourhood-focused activities are not only continued but strengthened.

[Fiona Mactaggart (Slough) (Lab)]

Is the Minister aware of reports in the newspapers today that five mainly rural police authorities have found 26 million depraved examples of images of child abuse on the internet and elsewhere, at the same time as the budget for the Child Exploitation and Online Protection Centre, which reported two and half times as many reports of child abuse this year as it did two years ago, is due to be cut by 10%. What is he going to do about that and will he reconsider the cuts to the funding for dealing with child abuse?

[Mr Harper]

I have briefly seen that report in the newspapers this morning. Of course, our plans to take CEOP into the National Crime Agency will enhance the ability of our police officers and crime fighters to deal with such images and such appalling crimes, which I am sure that everyone in the House would deprecate.

[Mr Julian Brazier (Canterbury) (Con)]

Does my hon. Friend agree that the Government’s measures on illegal Traveller encampments are welcomed by the vast majority of rural people and are no threat at all to those who are committed to a travelling way of life and want to carry it out in a legitimate fashion?

[Mr Harper]

I think the way that my hon. Friend puts that is exactly right. I have experience of that in my constituency and by dealing with those people who abuse the regime and the hospitality of the settled community we will make the settled community more welcoming of those who are genuine Travellers. In that way, both parts of the community can live in harmony.

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

Over the past couple of years there has been a huge increase in theft from rural premises, rural businesses, farms and domestic properties, particularly of metal, fuel and implements. The Minister cannot get away with simply saying that the police commissioners will sort it out. What initiatives has his Department been following for the past couple of years?

[Mr Harper]

I repeat what I said about police and crime commissioner elections meaning that the police will be more responsive to the important issues raised, because they will be able to raise them with chief constables on behalf of rural communities. We have been considering some of those important issues at a national level, for example through the plant and agricultural national intelligence unit that has been set up, to ensure that we deal more effectively with some of the crimes that are common across the country in rural areas on both a local and national level.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

8. In which police forces the largest change in front-line police officers has taken place since May 2010.

[Fabian Hamilton (Leeds North East) (Lab)]

15. In which police forces the largest change in front-line police officers has taken place since May 2010.

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

16. What the change has been in the number of front-line police officers since May 2010.

[The Minister for Policing and Criminal Justice (Damian Green)]

Between March 2010 and March 2012 the total number of front-line officers fell by 6,778. West Midlands police saw the greatest reduction in the number of front-line officers. Over the past year crime there has fallen by 10%, much more than the national average, proving that what matters is not the number of officers, but how they are deployed and how effective they are at fighting crime.

[Catherine McKinnell]

At a recent coffee morning I held, constituents were overwhelming in their praise for and gratitude to the police for the work they do in our communities, yet with falling police numbers their job will get harder, not easier, and my constituents are worried about the knock-on effects. What does the Minister believe will be the impact, particularly on police morale, of a Cabinet member verbally abusing a police officer at a time of reckless front-line cuts up and down the country?

[Damian Green]

May I start by endorsing the gratitude the hon. Lady’s constituents showed to Northumbria police? I am sure that she will be pleased to hear that crime in the Northumbria police area is down by 8% from 2011 to 2012. With regard to her other remarks, my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell) has apologised to the officer concerned and the officer has accepted the apology, and I think that for most people that would be the end of it.

[Fabian Hamilton]

Following that rather complacent and out-of-touch response, will the Minister take responsibility for the consequential increase in crime and disorder caused by the cut of more than 450 officers in west Yorkshire that will affect my constituency?

[Damian Green]

I am sorry that the hon. Gentleman thinks that I am out of touch, because crime in west Yorkshire is down by 3%. I am afraid that he seems to be out of touch with crime levels in his own constituency.

[Jack Dromey]

The police service for Birmingham and the west midlands is among the finest in England, but 814 of its front-line police officers are being cut. Does the Home Secretary understand the dismay being expressed by the people of Birmingham over the damage being done to their police service, and does she also understand that they cannot begin to understand why 814 officers are going in Birmingham and the west midlands but 257 are going in Surrey?

[Damian Green]

The hon. Gentleman knows perfectly well the financial state his Government left this country in, which is why there need to be cuts. I completely agree with his tribute to West Midlands police, because, as I have said, in these difficult times they have reduced crime by 10% in the west midlands, a significant improvement, making the streets of Birmingham and the rest of the west midlands safer than they were.

[Sir Tony Baldry (Banbury) (Con)]

Surely these are decisions for chief constables. The chief constable of Thames Valley police is managing in that area without any perceptible cut in front-line police numbers and, although one can never be complacent, I must say that crime levels in my constituency are probably as low as they have ever been in the nearly 30 years I have been a Member of this House.

[Damian Green]

I am glad to hear that. My hon. Friend is correct that there has been no fall in the number of officers in Thames Valley police, and that is at a time when recorded crime is down by 13%, which is a huge tribute to all involved. What has happened is that chief constables all over the country have worked effectively to ensure that our streets are safer. That is the basic job of the police and they are doing it very well.

[Mr Crispin Blunt (Reigate) (Con)]

Effective press and media relations are an essential tool to support front-line policing, but it is not clear to me whether or not the authorised police officers who are responsible for these matters are described as front-line. It is extremely important that, for police accountability and to prevent the abuse of power in relation to those police officers who are not authorised to speak to the media, we have full transparency about the police’s links to the media and how the media are briefed.

[Damian Green]

Transparency is an important issue for the police, as it is for other institutions such as this House. One of the improvements following the election of police and crime commissioners will be the existence of individuals with the job of holding individual forces to account. That, in itself, will be a major step forward in transparency for the police service across England and Wales.

[Dr Julian Huppert (Cambridge) (LD)]

Will the Minister join me in congratulating Cambridgeshire chief constable Simon Parr, both for reducing crime by about a fifth in two years and for announcing the recruitment of 100 new police officers? Will he suggest that other chief constables look at that model?

[Damian Green]

I am grateful to my hon. Friend for making that point. It shows that good chief constables can decide how to deploy their resources effectively. The vast majority of them around the country are seeing crime fall in their areas, and that is what the public want.

[Mr John Spellar (Warley) (Lab)]

9. What recent estimate she has made of the cost to the public purse of the elections for police and crime commissioners in November 2012.

[The Minister for Policing and Criminal Justice (Damian Green)]

As the Government set out to the House during the passage of the Police Reform and Social Responsibility Bill, and on a number of occasions since then, the elections will cost up to £75 million. That money will not come from funds that would otherwise have gone to police forces.

[Mr Spellar]

We already knew that the figure was £75 million; what the Minister did not say was how much extra, over and above that, the Government were going to spend on adverts to try desperately to get people out to vote in these unwanted elections in the middle of November. Why are the Government not holding the elections at a sensible time and spending the money on front-line police officers?

[Damian Green]

The elections may be unwanted by the right hon. Gentleman, although I suspect that they will be less unwanted by some of his Labour colleagues; at the last count, seven former Labour Ministers were standing in the PCC elections.

I am genuinely surprised that the right hon. Gentleman is so afraid of democracy. On the whole, during its history the Labour party has welcomed advances in democracy. It is a sad comment on the state of the modern Labour party that it should be frightened of democracy.

[Margot James (Stourbridge) (Con)]

The PCC elections are a great opportunity to involve the public in policing priorities for the first time. Does my right hon. Friend agree that Members on both sides should be getting behind the elections and raising awareness of them among their electors? If the Minister is near Birmingham on Saturday 27 October, I cordially invite him to join an action day that we are holding in the centre of Stourbridge, where he will be able to meet the candidate, Matt Bennett.

[Damian Green]

I am extremely grateful for that kind invitation. I will indeed be travelling around the country to take part in the campaign in various areas. My hon. Friend is absolutely right—this is a chance for people to have a say in the policing of their local areas. The elections are the biggest advance in the democratic control of our police in a generation.

[Mr David Hanson (Delyn) (Lab)]

I welcome the Minister to his new post; I am sure that he will enjoy it.

One month away from what are flagship elections for the Government, let us reflect on where we are. More than 7 million people who do not have access to the internet will find it difficult to get information from the Government because of cost savings. Election organisation has been shambolic; parliamentary orders have been laid late, including orders on the Welsh language, driving down turnout and increasing costs. The Electoral Reform Society predicts the lowest turnout ever and the former Minister, the right hon. Member for Arundel and South Downs (Nick Herbert), having stirred up apathy, has now jumped ship. What turnout does the Minister expect on 15 November and will he finally publish the cost to the taxpayer of this shambles?

[Damian Green]

I have answered the question about the cost to the taxpayer once, and the shadow Minister’s right hon. Friend the Member for Warley (Mr Spellar) made the point that we had answered it several times before.

On the first point about how difficult it is for those who do not have the internet to have access, I should say that one phone call will get them access. Anyone who phones the helpline can have all the information that is available on the internet—for the first time, information from every candidate—sent to them in hard copy. It is extremely easy for everyone to get hold of information about the election, and I hope that the right hon. Member for Delyn (Mr Hanson) will campaign alongside his hon. Friends, many of whom seem to take the elections a lot more seriously than he does.

[Sir Bob Russell (Colchester) (LD)]

If the turnout is as low as 15%, as some people predict, a winning candidate could well end up with less than 10% of the vote on the electoral roll. What mandate would such a commissioner have?

[Damian Green]

I am not going to predict the turnout, but I can tell my hon. Friend that the existing police authorities that the PCCs will replace have no democratic mandate at all, because not a single vote has ever been cast for a member of a police authority. The new arrangements are a significant step forward.

[Katy Clark (North Ayrshire and Arran) (Lab)]

10. Whether she has received legal advice on whether the proposals contained in the draft Communications Data Bill are compatible with the UK’s human rights obligations.

[The Secretary of State for the Home Department (Mrs Theresa May)]

The draft Communications Data Bill, which is currently undergoing pre-legislative scrutiny, is designed specifically to ensure that communications data are obtained in compliance with article 8 of the European convention on human rights. The ECHR memorandum that accompanies the Bill was approved by Ministers prior to its publication. This legislation will help to ensure that the internet does not become a safe haven for criminals and that the police and others can continue to protect the public.

[Katy Clark]

The Secretary of State will be aware that there is real public concern that this legislation will enable the authorities to view a person’s entire web history. Will she outline what safeguards are being considered to ensure that the right to privacy is respected?

[Mrs May]

That is not the case. I recognise that a number of concerns have been raised, often on the basis of a lack of information about what is actually going to happen under the Communications Data Bill. We want to take what is currently available to the police and other law enforcement agencies in terms of telephony—that is, who made a call, when and at what time—and put that into the new environment where criminals, paedophiles and terrorists are using the internet, in a variety of forms, to communicate. This is an important Bill because it means that we can continue to catch criminals and protect the public.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

It is

“difficult to estimate costs with precision over the long term”

as regards this proposal. Those are not my words but those of the Home Office in responding to a freedom of information request about the stated £1.8 billion price tag for the legislation. What assurances can the Home Secretary provide that the Government are not writing a blank cheque to service providers? Will she say today whether they have a cap in mind for the costs of this Bill—yes or no?

[Mrs May]

We have been absolutely clear about the 10-year cost in terms of the £1.8 billion figure. Yes, cost recovery will be available to the service providers, but that will be done on the basis set out during discussions about the usage made of this provision. The average annual investment that will take place over 10 years equates to about 1.3% of the annual cost of policing. Let me say to right hon. and hon. Members on the Opposition Benches that this Bill is important because without it we will see criminals and others potentially going free because of their use of internet communications. It is right that we have the Bill because it will help us to catch criminals, terrorists and others.

[Tim Loughton (East Worthing and Shoreham) (Con)]

11. What recent assessment she has made of the use by police of orders under section 61 of the Criminal Justice and Public Order Act 1994 to disperse illegal encampments.

[The Minister for Policing and Criminal Justice (Damian Green)]

A range of powers are available to the police to deal with illegal encampments, including the power under section 61 of the 1994 Act to remove people who are trespassing with intent to take up residence. The Government keep these powers under review.

[Tim Loughton]

During the summer, a number of public places in my constituency were, yet again, the destination of choice for many illegal Traveller encampments, leaving my constituents to pick up a hefty bill for damage, dumping and abuse, with no prosecutions made as a result. Yet Sussex police were very reluctant to invoke any section 61 orders, which they have had the power to do since 1994. Will the Minister look into the police’s reluctance and investigate whether the use of the word “discretionary” in the guidance is acting as a bar to their using these orders, which can result in instant dispersal, to the great relief of my constituents and those of many other hon. Members?

[Damian Green]

I have every sympathy with my hon. Friend and his constituents. Many Members on both sides of the House will have experienced similar problems. I understand that Sussex police responded in September to an encampment in Lancing by issuing a direction under section 61 that required the occupants to leave within 24 hours, which they subsequently did. I am also aware that my hon. Friend is engaged in continuous discussions with Sussex police about this matter. If there is an aspect that has anything to do with changes in the law, I will of course look into it, but I also urge him to talk to the PCC candidates in his part of the world, because within a month they will be responsible for writing the policing plan for his area.

[Duncan Hames (Chippenham) (LD)]

Melksham Without parish councillors have told me about the trouble that they have had with illegal encampments on their land. They are frustrated that the encampments arrive at the very end of the week, often before a bank holiday weekend. Can anything be done to enable stop notices to be applied on Friday evenings or even at the weekend itself?

[Damian Green]

My hon. Friend’s question moves us into the planning arena and he will have heard last week’s announcement by my right hon. Friend the Secretary of State for Communities and Local Government. As I have said, the police have a range of powers that could be used. It seems clear that in some parts of the country this will be a significant matter for police and crime commissioners. If the issue is causing that much public distress, it may well need to be higher up the agenda of police forces in certain areas. That is why we are having elections to make sure that there is more local control over police planning.

[Christopher Pincher (Tamworth) (Con)]

12. What steps she is taking to empower police officers to tackle crime.

[The Secretary of State for the Home Department (Mrs Theresa May)]

We are taking a number of measures to help the police cut and tackle crime, not least sweeping away central targets and cutting red tape. We have already announced that we have cut 4.5 million hours of police bureaucracy, which will enable the police to have more time to do the job that they and the public want them to do, which is getting out there and fighting crime.

[Christopher Pincher]

Does my right hon. Friend agree that the innovative use of modern technology, such as that proposed by the PCC candidate for Staffordshire, Matthew Ellis, which could cut up to 3,000 hours of police administration time each week, will help forces such as mine put more officers on the beat to fight crime and reassure the public?

[Mrs May]

I agree with my hon. Friend. I have been in Staffordshire with our excellent Conservative candidate, Matthew Ellis, who has some very good proposals for helping the police to do their job and tackle crime, one of which is getting rid of bureaucracy by using new technology. That can have incredibly beneficial effects in allowing police officers to spend more time out there dealing with crime, rather than sitting inside a police station filling in forms.

[Barbara Keeley (Worsley and Eccles South) (Lab)]

In Greater Manchester we believe that it empowers the police if we show that we support them, their work and their bravery. Does the Home Secretary agree that it does not empower the police when a Cabinet Minister rants at them and swears at them?

[Mrs May]

That particular point was answered earlier, but I reiterate that, with regard to the incident to which the hon. Lady referred, the Chief Whip apologised to the police officer concerned and the police officer accepted that apology. The police are not taking the matter any further and that, as my right hon. Friend the Minister for Policing and Criminal Justice said earlier, is an end to it.

We value the police, which is why we are getting rid of the bureaucracy that kept them in police stations filling in forms instead of doing the job that they wanted to do, and why we are giving more discretion to the police over charging. We are returning discretion and professionalism to the police, which was, sadly, taken away from them in many areas by the previous Labour Government.

[Andrew Stephenson (Pendle) (Con)]

13. What steps she is taking to empower local communities to tackle alcohol-related antisocial behaviour.

[Henry Smith (Crawley) (Con)]

14. What steps she is taking to empower local communities to tackle alcohol-related antisocial behaviour.

[Mary Macleod (Brentford and Isleworth) (Con)]

17. What steps she is taking to empower local communities to tackle antisocial behaviour caused by the abuse of alcohol and drugs.

[The Minister of State, Home Department (Mr Jeremy Browne)]

Together, the Government’s alcohol strategy and White Paper on antisocial behaviour published earlier this year will provide communities with powerful new tools to tackle alcohol-related antisocial behaviour. The Government will also shortly give councils an opportunity to levy a charge for late-night licences and introduce an early morning alcohol restriction order programme.

[Andrew Stephenson]

I thank the Minister for that answer. Lancashire’s excellent Conservative PCC candidate, Tim Ashton, recently visited Colne and met the landlord of the Crown hotel to discuss the CAND—Colne against night-time disorder—scheme. Will my hon. Friend join me in praising excellent schemes such as CAND, whereby landlords work together to combat antisocial behaviour?

[Mr Browne]

I am delighted that there are a number of excellent PCC candidates in the hon. Gentleman’s area, although I am not necessarily sure that I would endorse the one that he has just brought to the House’s attention. I commend the scheme in his area, because it is an extremely good idea for licensed premises to work together to combat antisocial behaviour.

[Henry Smith]

Will the Minister join me in congratulating the Crawley and Gatwick Business Watch? It is pursuing a scheme of labelling so that it can identify where and from which stores alcohol is sold and whether there is alcohol abuse. It also has a system whereby high-strength alcohols are kept under the counter and have to be requested. Will the Minister meet the group?

[Mr Browne]

There is value in alcohol labelling, so that shops and other licensed premises that sell alcohol inappropriately, for example to minors, can be more easily traced and the activity prevented. We are keen to see such innovative practice where it is appropriate.

[Mary Macleod]

Recently, I attended a meeting of the Hounslow community and police consultative group, which discussed drug and alcohol-related crime. What advice would my hon. Friend give that group on how to reduce antisocial behaviour that is linked to alcohol and drugs in west London?

[Mr Browne]

I strongly commend my hon. Friend for attending meetings of that sort. The police have a key role to play, as do local authorities because of their responsibility for licensing. In my experience, it is most effective when communities also take responsibility for their area and for the quality of life of the people who live there, and work closely with the police and other institutions to ensure that there is a co-ordinated and effective response to antisocial behaviour.

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

May I push the Minister, as he is being complacent? Last night, the “File on 4” programme showed the high level of organised crime across our country seeking to evade duty and bring in cheap alcohol. That is costing the Exchequer billions and is bringing cheap and unreliable sources of alcohol to many people in our communities. What is he going to do about it?

[Mr Browne]

I will make two brief points. First, alcohol consumption has fallen in England and Wales over recent years. The second point, which goes to the heart of the hon. Gentleman’s question, is that next year we are introducing the National Crime Agency, which will provide a more coherent, joined-up approach to tackling organised crime. We think that that will be effective in dealing with precisely the problems that he has brought to the attention of the House.

[Mr Denis MacShane (Rotherham) (Lab)]

On Saturday morning, Rotherham was the scene of alcohol-related antisocial behaviour, when members of the English Defence League arrived in a pub, tanked themselves up and held a march to spew their anti-Muslim hate. The police handled that brilliantly and I thanked them on the spot, including all the policemen who came into the area from outside. The choice of route meant that Rotherham’s economy lost an amount of six figures or more. Will the new Minister for Policing and Criminal Justice meet me to discuss how the police can route these horrible EDL marches so that they do not cause so much economic damage to our communities?

[Mr Browne]

The right hon. Gentleman may wish to talk to his local police and crime commissioner when that person is elected in a month’s time. I will leave it up to the Minister for Policing and Criminal Justice to decide whether he wishes to meet the right hon. Gentleman. Where criminal activity is taking place it should be prevented, but I would not wish people’s ability to express their views to be restricted, however unpleasant those views may be for many Members of this House.

[Gloria De Piero (Ashfield) (Lab)]

CCTV is a crucial tool in tacking alcohol-related antisocial behaviour. Given that the coalition agreement states that the Government want to “further regulate CCTV”, does the Minister expect the number of local authority and police CCTV cameras to rise or fall by 2015?

[Mr Browne]

We have introduced a code of practice on CCTV. It can play an important role in reducing crime and antisocial behaviour, but—[Interruption.] Let me make one point clear to all the authoritarian hecklers on the other side of the House—[Interruption.]

[Mr Speaker]

Order. The Minister of State must be heard.

[Mr Browne]

I simply reject Labour’s idea that we can never have too much surveillance. Where it is appropriate, CCTV can play an important role, but the solution to crime is not always to have more cameras in every corner of our lives, whether public or private.

[Jackie Doyle-Price (Thurrock) (Con)]

T1. If she will make a statement on her departmental responsibilities.

[The Secretary of State for the Home Department (Mrs Theresa May)]

If I may, I should like to take this opportunity to pay my respects formally to PC Nicola Hughes and PC Fiona Bone. The brutal murder of those two young officers shocked me and, I am sure, the whole House and the whole country. Our police officers face dangers every day, and they do so with bravery and professionalism. Nicola Hughes and Fiona Bone were dedicated public servants. For their dedication they paid the ultimate price, and we owe them the greatest of debts. I am sure I speak for the whole House when I say that our thoughts and deepest sympathies are with the families of those two dedicated officers.

[Jackie Doyle-Price]

I am sure the whole House will wish to associate itself with my right hon. Friend’s comments about those two police officers.

In the county of Essex, we are fortunate to be blessed with some distinguished candidates for the new role of police and crime commissioner. Will my right hon. Friend join me in urging all electors across Essex to cast their vote in that important election so that whoever is successful has a genuine democratic mandate to do the job?

[Mrs May]

I am grateful to my hon. Friend. I have met the Conservative PCC candidate for Essex, Nick Alston. He is an excellent candidate, and I know that he will be out there taking that message through the streets of the towns and villages of Essex. My hon. Friend is right that these are important elections that will enable people to elect directly somebody who will be their voice in local policing. I urge everybody to exercise their vote on 15 November.

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

I support the Home Secretary’s statement on Nicola Hughes and Fiona Bone, and the statements that she made at the time of their death. It was a brutal act. She and I are united, and I think the whole House and the whole country are united, in our tributes to those brave police officers.

I turn to a separate issue. The Home Secretary told the Police Federation last year:

“It’s easy to sit around with friends or, dare I say it, in the House of Commons, and criticise the police. But those people aren’t the ones confronting violent thugs”.

She has also told it:

“You put up with abuse and worse, but you do so to keep us free…You do an amazing job—and it’s time we gave you all the respect you deserve.”

I agree with her, so will she join me in condemning the Chief Whip in the House for swearing at police officers?

[Mrs May]

I have already answered on that particular issue. I am happy to stand here and reiterate what I and others have said on a number of occasions. I believe that we have the best police officers in the world, and the Government are giving them our support. We are ensuring that we give them the tools that they need to do the job that they and the public want them to do.

[Yvette Cooper]

But the Home Secretary still has not condemned the Chief Whip for what he did and for the swearing—something for which people across the country are arrested. The reason why it matters that there has been no investigation and that he has not come clean is that people think it goes to the heart of the Government’s attitude towards the police and public servants. Once again, they are not listening to the police on the European arrest warrant, CCTV, DNA or the cutting of police numbers by 15,000. If the Home Secretary really wants to put an end to that and show respect for the police, why does she not change the Chief Whip and change her policies on policing too?

[Mrs May]

I was asked about the Chief Whip earlier and I answered the question. The right hon. Lady really should listen to the answers that are given to questions.

[Simon Hart (Carmarthen West and South Pembrokeshire) (Con)]

T2. The Home Secretary will be aware of the excellent scheme run by Dyfed-Powys police, which has cracked down on antisocial behaviour connected to the night-time economy in west Wales. In congratulating that force, will she consider rolling out that scheme across the whole UK, as it saves public money and police time?

[The Minister of State, Home Department (Mr Jeremy Browne)]

I am aware of the scheme in the hon. Gentleman’s area, which I understand is called “Behave or Be Banned”. It strikes me as an extremely good scheme that encourages licensed premises to work together to the advantage of their community.

[Alun Michael (Cardiff South and Penarth) (Lab/Co-op)]

T4. May I declare an interest, in that I am standing to be police and crime commissioner in south Wales? Like the excellent Labour candidates across England and Wales outside London, I want to rescue police governance from the shambles that the Government are creating.Given that the Government pay for the free distribution of literature to electors in parliamentary elections, Welsh Assembly elections and even European elections, it is not odd that they are not doing so in PCC elections, and that the only communication will be a leaflet from the Electoral Commission about the process? Should not the Government, even at this late stage, include with that leaflet a page from each candidate standing in each police force area, so that the public know what choice they have to make?

[Mrs May]

I say to the right hon. Gentleman that the Opposition really need to get their story straight on the cost of PCC elections. On the one hand they complain about the cost, but on the other hand they ask for the cost to go up by putting in extra provisions. I note that a number of my right hon. and hon. Friends have risen to comment on the excellence of the Conservative candidates. On the Opposition Benches, however, it has taken the right hon. Gentleman to stand up and speak for himself, because nobody else has been willing to stand up for their candidates.

[Neil Carmichael (Stroud) (Con)]

T3. To continue with the theme of police and crime commissioners and the elections, does the Home Secretary agree that the introduction of democracy and transparency will help to achieve the right balance between rural and urban policing, as exemplified by our excellent candidate in Gloucestershire, Victoria Atkins?

[The Minister for Policing and Criminal Justice (Damian Green)]

My hon. Friend is precisely right. In areas such as Gloucestershire, striking the right balance between urban and rural pressures on the police will be an important task for the police and crime commissioner. One significant difference is that only 7% of the public are aware that they can go to a police authority if they are unhappy with their policing. By the end of this campaign, I am sure that a far higher proportion of people will be aware of their police and crime commissioner candidates.

[Stephen Pound (Ealing North) (Lab)]

T6. Today, after the police cuts, there are only 22 custody cells to serve the entire borough of Ealing. Although we are, by and large, a law-abiding bunch, we feel we are approaching the stage where there is no room at the nick. Will the Minister provide reassurance for my constituents, and those of fellow Ealing MPs, about what we can do to increase and perhaps bring back the number of custody cells in Ealing?

[Damian Green]

I can happily reassure the hon. Gentleman that although total funding for the Metropolitan police is down by 2%, recorded crime is also down by 1% in the Metropolitan police area, suggesting that there is less pressure on police cells than there would previously have been.

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

T5. Please will the Minister provide an update on progress on establishing the college of policing, with particular reference to the future of the National Police Improvement Agency site in the Pannal Ash area of my Harrogate and Knaresborough constituency?

[Damian Green]

I am happy to report that the college of policing will be up and running by December this year. The site at Pannal Ash remains open, although the majority of residential training has stopped, with staff now focusing on the development of national standards for recruitment, promotion and training. The freehold of the site transfers to the Home Office on 1 December when the college is established, and the site will then be leased to the college for its activities.

[Paul Blomfield (Sheffield Central) (Lab)]

T7. While working for P&O ferries, my constituent, Mark Hanson, met his partner, a foreign national with whom he is having a child. She has been refused entry clearance because Mark has been deemed unable to meet the sponsor requirements, although his parents have offered him employment and accommodation for the couple and their child. Does the Home Secretary recognise that that case highlights how the inflexibility of her new rules unfairly prevents many British citizens from bringing their partners to the UK? Will she meet me and Mark’s parents to consider their case for their family to be united?

[The Minister for Immigration (Mr Mark Harper)]

The point of our new proposals on the family migration route in respect of income is to ensure that if British citizens wish to bring their families to the United Kingdom, they are able to support them and do not expect the taxpayer to do it for them. That is why those rules are right, and they are based on evidence put forward by the Migration Advisory Committee. If the hon. Gentleman and his constituent wish to meet me, I would be happy to have such a meeting.

[Andrew Bridgen (North West Leicestershire) (Con)]

T8. What steps is my right hon. Friend taking to increase public awareness and participation in the forthcoming police and crime commissioner elections, and to ensure that the public know about the many excellent candidates who are standing across the country, such as Sir Clive Loader in my county of Leicestershire?

[Damian Green]

I am happy to agree with my hon. Friend. I met Sir Clive for the first time last week. He is by any standards an extremely impressive human being, and will make a formidable PCC if he wins.

[Mr John Denham (Southampton, Itchen) (Lab)]

Crime in Hampshire has fallen for six years in a row under the leadership of Jacqui Rayment, the Labour candidate for police and crime commissioner. Would the Minister care to say why the Conservative candidate for Hampshire still refuses to apologise for his long support for Asil Nadir, the convicted fraudster, and why the Conservative party has refused to give back the large donation it received from Asil Nadir? Is that not a case of them all being in it together?

[Damian Green]

I am happy to report to the right hon. Gentleman that all Conservative candidates are being encouraged to sign a clean campaigning pledge to avoid the kind of cheap slurs in which he has just indulged. I hope the Labour candidate in Hampshire signs the pledge, and that the right hon. Gentleman is acting in a freelance way, and not being subcontracted to run a dirty campaign.

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

T9. More than 50% of the inmates of Swaleside prison in my constituency are foreign nationals. What assurances can my hon. Friend give that the Government will ensure that all those prisoners will be repatriated to their home countries on their release?

[Mr Harper]

I can reassure my hon. Friend. The statistics show that in 2011, more than 4,500 foreign national criminals were removed from the UK. We have introduced tough new rules to protect the public from foreign criminals and immigration offenders who try to hide behind family life as a reason to stay in the UK. I hope that he welcomes that.

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

Has there been full cost recovery from G4S for its Olympic failure, including costs in respect of the other forces involved—the armed forces and the police? What penalties has G4S paid?

[Mrs May]

G4S was absolutely clear that it would pay for the extra costs involved in the military and police services. As the hon. Gentleman suggests, the police moved in to take over part of the venue security at a number of sites across the country. Exactly how much G4S will pay as a result of its contract is a matter of commercial negotiation with the London Organising Committee of the Olympic Games and Paralympic Games, with which G4S held the contract.

[Steve Baker (Wycombe) (Con)]

T10. We are shortly to have a much-needed statement on European justice and home affairs, and we know that the public are extremely frustrated with extradition arrangements generally. When will my right hon. Friend make progress towards settling these matters by responding to the Baker report?

[Mrs May]

As my hon. Friend says, a statement on justice and home affairs matters in the European Commission in respect of the UK relationship with the EU is due very shortly. I expect to respond on the matter of extradition shortly.

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

Has the Home Secretary had an opportunity to speak to the new Justice Secretary about the implications for national security of not extending to inquests the closed material procedure, which, it is proposed, will be made available in a limited number of civil cases?

[Mrs May]

I can reassure the right hon. Gentleman that I have had a number of discussions with the Justice Secretary on a number of issues across our briefs. The right hon. Gentleman will be aware that the Government have decided not to include CMP in inquests. A great deal of concern was expressed when the idea of including CMP was proposed and the Government have come to our decision, which is included in the Justice and Security Bill.

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

We have recently seen too many cases, sadly, in which suspicion and allegations of the sexual abuse of children and young people have not been properly investigated. Clearly, there needs to be a culture change in the police and other organisations. What is my right hon. Friend doing to address that?

[Mrs May]

We are all shocked by the cases of child abuse and child grooming that we have seen. We need to ensure that the police pick up on such allegations when there is evidence and when there are concerns that something of that sort is happening, which is absolutely right. The Child Exploitation and Online Protection Centre will continue to look at that. There is evidence from cases that have been brought to court that one vital tool in catching child abusers is the use of communications data, which is why the draft Communications Data Bill is so important.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

Last year in Bedfordshire, 22 people were arrested for swearing at a police officer and 19 were charged. Is that crime better policed in our counties than in Whitehall?

[Mrs May]

No.

[Several hon. Members]

rose—

[Mr Speaker]

Order. I am sorry to disappoint colleagues. The level of interest is intense, but we must now move on.

Cross-border Travel (Spain/Gibraltar)

Monday 15th October 2012 Commons Chamber

15:34

[Jim Dobbin (Heywood and Middleton) (Lab/Co-op)]

(Urgent Question): To ask the Secretary of State for Foreign and Commonwealth Affairs to make a statement about the deteriorating situation of cross-border travel between Spain and Gibraltar.

[The Minister for Europe (Mr David Lidington)]

On Tuesday 9 October and again between Friday 12 October and Sunday 14 October, significant delays occurred at the border between Gibraltar and Spain. Travellers have been delayed by between 45 minutes and six hours as a result of more rigorous checks introduced by the Spanish Guardia Civil on vehicles leaving Gibraltar. I should say to the House that as of this afternoon, the information that I have suggests that there is a less than 20-minute wait for cars and 10-minute wait for bikes at the border.

Spain has justified the more rigorous checks as being related to anti-tobacco smuggling operations. Tobacco smuggling does occur between Gibraltar and Spain: however, the Spanish authorities have not yet provided the Government of Gibraltar with evidence to explain why, in this case, increased checks were required.

There have been delays at the border many times in the past, most recently in May 2012, and this current disruption comes at a time when tensions between Gibraltar and Spain have increased because of a dispute over Spanish fishing rights in British Gibraltar territorial waters. The view of many in Gibraltar is that the delays are an attempt to increase pressure on Gibraltar to resolve that fishing dispute. Gibraltar’s Chief Minister, Fabian Picardo, has been critical of the delays, and the criticism of Spanish action has been shared by the ASCTEG, the association of Spanish workers who commute daily into Gibraltar.

Disruption to border flows has a direct impact on the prosperity and well-being of communities on both sides of the border, in particular the 7,000 mostly Spanish people who travel every day from Spain to Gibraltar and back for work. The Government’s position is that these delays are unacceptable and have no place at a border between EU partners.

We raised this issue over this weekend at a very high level with the Spanish Government. We will also be protesting formally to the local Guardia Civil. We will continue to monitor the situation closely and take whatever action is appropriate to support the free movement of people between Gibraltar and Spain.

[Jim Dobbin]

I thank the Minister for his reply. Can he justify why the Spanish ambassador has not yet been summoned to the Foreign Office to explain why the border closures and incursions into Gibraltar waters are taking place? The entire policy by the Spanish is unacceptable. This is an EU border, not a third-world war zone. It is akin to the French closing the Spanish border through Andorra. The Spanish need to accept that the Gibraltar people have decided through self-determination to remain with Britain.

[Mr Lidington]

We have not called in the Spanish ambassador because, as I said in my earlier remarks, this was raised directly with the Spanish Government at a significantly higher level.

[Mrs Eleanor Laing (Epping Forest) (Con)]

Although the House will appreciate that the Minister is doing all that he can in negotiations with the Spanish Government, will he agree with most Members of the House that the situation in Gibraltar is simply unacceptable? While people in Madrid may give assurances that the Spanish Government are acting in a way that is acceptable to the UK Government, what actually happens day to day is that the Guardia Civil under local management in Algeciras and La Línea do whatever they wish, not only on the border but in making incursions by sea into British Gibraltar territorial waters whenever they wish to do so and in a way that is deliberately designed to make life difficult for the people and Government of Gibraltar. If the Minister can assure the House that he understands that and will make it clear to the Government of Spain, we will be happy.

[Mr Lidington]

Where there is a genuine case for increased checks at the border because of an acknowledged need to combat smuggling or other criminal activity, that might be fair. In such a case, however, we would expect the Spanish authorities to be open with the Government of Gibraltar about those circumstances, but that has not been the case hitherto in this instance.

So far as maritime incursions are concerned, we are absolutely confident of the United Kingdom’s sovereignty over British Gibraltar territorial waters, which is why the Royal Navy challenges Guardia Civil and other Spanish state vessels whenever they make unlawful maritime incursions into British Gibraltar territorial waters. We back that up through formal diplomatic protests to the Spanish Government about all unlawful incursions. Those challenges and protests make it clear that such incursions are an unacceptable violation of British sovereignty.

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

I congratulate my hon. Friend the Member for Heywood and Middleton (Jim Dobbin) on securing this important urgent question. The Opposition continue to support the self-determination of the Gibraltan people and their right to remain under British sovereignty, as we did in government, so I welcome the Minister’s answer on that. We also welcome the fact that Chief Minister Fabian Picardo, who is in London today, has been in touch with the Government and that discussions have taken place between the Minister for Europe and the Gibraltan Chief Minister.

I agree that the delays of up to five or six hours at the border between Spain and Gibraltar are simply unacceptable, and I welcome the Minister’s discussions with the Gibraltan Chief Minister. I echo his observation that this is also of deep concern to the thousands of Spanish workers who cross the border every day to work in Gibraltar. What more can the Government do to ensure that these delays do not happen again, and that the reasons given in this and other instances by the Spanish Government are properly investigated and that evidence is produced for what many think are just excuses? Finally, what discussions has the Minister had with the Spanish Government about their decision to abandon the trilateral forum, and what pressure is he and the Foreign Secretary exerting on the Spanish Government to return to it?

[Mr Lidington]

I agree with the hon. Lady that the border delays end up penalising Spanish workers as much as the people of Gibraltar. The delays get in the way of sensible economic relations between Gibraltar and the neighbouring regions of Spain, and therefore interrupt what ought to be a mutually beneficial economic relationship. They harm jobs and hopes of prosperity. We shall continue to raise with the Spanish authorities at every appropriate level cases where we think that the border delays that have been imposed have not been adequately justified. The Government of Gibraltar regularly co-operate with Spain in tackling tobacco smuggling and other forms of criminal activity. That is the sort of sensible, constructive co-operation we want.

The British Government very much regret that the current Spanish Government refuse to take part in further meetings of the trilateral, which we believe well serves both Gibraltar and Spain, as well as the United Kingdom. We would like some kind of equivalent collaborative system established, but so far Spain has refused to return to the trilateral. I am grateful for what the hon. Lady said about her support for British sovereignty over Gibraltar and respecting the rights of its people. I particularly welcome her remarks, if they mark a break with the proposals for shared sovereignty and the betrayal of the people of Gibraltar that the Labour party supported when in office.

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

We are grateful to Ministers for their robust view on this matter. There is a strong view in Gibraltar that since the Government changed in Madrid there has been a much less obvious willingness to collaborate with the Government of Gibraltar, as well as incursions into our waters and regular blockages of the border. Will Ministers put it on the agenda for the next meeting with Madrid that the way for a civilised Government in Spain to behave, if they want to make a joint effort on the border, is to warn Gibraltar, do it together and stop this uncivilised and tribal attitude from a country that wants to be regarded as a full and civilised member of the EU?

[Mr Lidington]

My right hon. Friend makes a very good point about the beneficial effect of practical co-operation between the Governments of Spain and Gibraltar, a subject that is frequently on the agenda in discussions between the British and Spanish sides. It is fair to say that although the new Spanish Government have introduced a policy towards the trilateral which we have found unwelcome—they know that that is our attitude towards their policy—the Prime Minister of Spain has also made it clear publicly that he does not want the argument about Gibraltar to get in the way of a fruitful bilateral relationship between Spain and the United Kingdom. I hope very much that we can get back to the sort of practical, local co-operation that my right hon. Friend referred to and wants to see in future.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

On Friday—the day that the EU was awarded the Nobel peace prize—there was a five-hour queue on the Gibraltar-Spain border, which is an EU border. Will the Minister call in the Spanish ambassador each and every day that there is a delay of five hours on the border between Gibraltar and Spain, and will he keep the ambassador waiting for five hours?

[Mr Lidington]

What I can say to the hon. Gentleman is that wherever we have evidence that border delays are being imposed without good reason, we will take that up with the Spanish authorities at the appropriate level. That may sometimes be at the local, operational level; it may sometimes, as in the most recent case, need to be at a senior level, with the Spanish Government in Madrid.

[Ian Paisley (North Antrim) (DUP)]

I welcome the strong statement by the Minister today and the equally strong statement from the hon. Member for Wolverhampton North East (Emma Reynolds) on the Opposition Front Bench about Gibraltar’s sovereignty. The Minister will know that tobacco smuggling regularly occurs—and to a much greater extent than between Gibraltar and Spain—across the border between Northern Ireland and the Republic of Ireland—

[Mr Denis MacShane (Rotherham) (Lab)]

Which way?

[Ian Paisley]

North and south. Yet despite that, there have never been such delays or such an overreaction by the services in Northern Ireland in relation to our trade and the impact on our trade. I hope that the Minister will send the strongest possible signal and, indeed, that he will ask our Prime Minister to represent fairly the people of Gibraltar to the Spanish Prime Minister and tell him to get his hands off this Rock. It’s not going their way.

[Mr Lidington]

The UK Government, from the Prime Minister down, could not have been clearer to our friends and partners in Spain that although we want a good bilateral relationship with them, we will not, and we shall never, agree to any transfer of sovereignty over Gibraltar unless that were the wish of the people of Gibraltar, nor would we enter into any process of sovereignty talks and negotiations unless the people of Gibraltar were content with that.

[Mr MacShane]

I wish the Minister well. I negotiated the trilateral agreement, and for a few years we had a bit of peace and quiet. I am sorry that it is all going wrong for him; Gibraltar is a nightmare for anybody in his job. However, the House does not help the Minister or the people of Gibraltar with patronising remarks about civilised behaviour and the rest of it. We need to cool things down. The queues are unacceptable, but jaw-jaw is better than queue-queue. I wish the Minister well as he tries to get this back under control.

[Mr Lidington]

I am always willing to welcome good wishes, particularly in my job, even if they are from the right hon. Gentleman. However, I would disagree with him profoundly in one respect: when he described Gibraltar as a “nightmare”. I do not think Gibraltar is a nightmare; I think Gibraltar is a thriving and now pretty prosperous community, with an entrepreneurial people who want good relations with their neighbours across the border in Spain, but who also want their democratic rights respected and their wish to remain British respected too.

Sir Jimmy Savile (BBC Inquiry)

Monday 15th October 2012 Commons Chamber

15:49

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

(Urgent Question): To ask the Secretary of State for Culture, Media and Sport if she will make a statement on the BBC inquiry into the allegations against the late Sir Jimmy Savile.

[The Secretary of State for Culture, Media and Sport (Maria Miller)]

The allegations emerging around Jimmy Savile are absolutely horrifying. My thoughts are with those affected and their families who have suffered in silence for decades. I believe that it is absolutely right that the BBC asked the police first and foremost to investigate these allegations, and that it has waited to act, on the advice of the police, before launching its own inquiries. It is essential that the police inquiry is not disrupted.

The BBC is a globally admired British institution and has a unique place in our cultural life. As such, it is imperative that it behaves in a manner that makes it worthy of the public’s ongoing trust and confidence. Both the Prime Minister and I said last week that we believed that the BBC should investigate these very serious allegations. The BBC Trust is there to represent the interests of licence fee payers: it must investigate these matters and rectify them, too.

Following the board meeting on Friday, I called both the director-general and the chair of the BBC Trust to underline how vital it is to have clear terms of reference in place and for there to be an announcement of who will chair the inquiries as soon as possible. From those conversations, I am now confident that both the BBC and the BBC Trust are taking these allegations very seriously indeed.

As the House will be aware, the BBC has launched three separate investigations. The first will look into the allegations with regard to the item on Savile which was inappropriately pulled from “Newsnight”. The second review, to be undertaken when the police advise it is appropriate to do so, will focus on Jimmy Savile himself. Thirdly, although the BBC’s child protection policy was overhauled in 2002, the review will also focus on whether its policy is fit for purpose and what lessons can be learned. This review will be assisted by an independent expert. An additional piece of work will look at the very troubling allegations of sexual harassment at the BBC that have come to light in recent weeks. The director-general will give further details later in the week. These are undoubtedly very serious matters, which have wide-ranging implications for a number of public institutions—not just the BBC. It is now crucial that we understand what went wrong and how it can be put right.

[Mr Wilson]

I thank the Secretary of State for that answer.

Other institutions besides the BBC—including hospitals, children’s homes, the Crown Prosecution Service and even the police—appear to have serious questions to answer, and I am pushing for answers on those, too, but the BBC currently faces more questions than others because many of the alleged acts of sexual abuse and paedophilia happened on BBC premises and Savile was a BBC employee. While many of these questions relate to the past, there are very serious questions about the actions of the BBC in the present. Any hint of a cover-up by the BBC of its own role in this dreadful affair will cause huge damage to public and audience trust. We do not have an explanation of why the BBC scrapped the “Newsnight” investigation entirely rather than give it more time to develop its work, or of why the BBC did not pass on to police at the time new claims it had obtained about Savile and two other living celebrities who are still at large having allegedly abused under-age girls on BBC premises?

I have a number of major concerns that the inquiries announced by the BBC will not be sufficiently independent, transparent or robust to give the public confidence. I shall write to Dame Fiona Reynolds this afternoon to set out those concerns in detail. In the light of these concerns, I ask whether my right hon. Friend is concerned that the BBC has been slow to react to the growing scandal, and that by dragging its feet on the need for a proper independent inquiry on its own conduct, it has appeared as though it does not want to get to the bottom of this matter. Does she think the BBC’s arrangements for two inquiries are sufficiently independent, transparent and comprehensive? Does she think that a separate, rapid inquiry into the cancellation of the “Newsnight” story is justified? In view of the wider questions about the role of other institutions, does she think that a wider public inquiry into the whole affair would be justified? Finally, is my right hon. Friend concerned that the BBC Trust has acted more as a cheerleader and defender of the BBC than as a critical guardian of standards? Does she think the current relationship is fit for purpose?

[Maria Miller]

I thank my hon. Friend for giving me the opportunity to cover some of the issues that he has raised. I spoke to both the director-general and the chairman of the BBC Trust after the board meeting on Friday, and I feel that they are taking these matters extremely seriously indeed. I would underline that point to my hon. Friend. Ultimately, it is for the BBC Trust to have the confidence of the licence fee payer and the comfort confidence of the British public. It is therefore vital for all the inquiries to be undertaken in a transparent and independent manner, and I think that the involvement of Dame Fiona Reynolds as the trust’s senior independent director designate will reassure us in that regard.

As for the role of a wider inquiry, my hon. Friend should bear in mind that a police investigation is currently taking place. I think everyone would agree that it is important for the individuals who have been victims to know that that investigation can proceed unfettered, and that that should be our priority at this stage.

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

I support what the Secretary of State has said. Everyone has been sickened by the vile abuse perpetrated by Jimmy Savile, and it is impossible to overstate the suffering caused to those whom he abused. What has deepened the revulsion is that this happened at the BBC, an institution so loved and trusted that it is known as “Auntie”. That has cast a stain on the BBC.

Does the Secretary of State agree that no one should be complacent and believe that sexual abuse by people in positions of power at the BBC happened then, but could not happen now? The BBC should proceed now to review all its policies and processes on the protection of children, sexual harassment and whistleblowing, in order to be sure that the right policies and processes are in place and are properly enforced. That need not wait for the police investigation. Does the Secretary of State agree that it must apply to all employees, including those at the very top—the senior executives and the top talent? Clearly it was Jimmy Savile’s exalted celebrity status that gave him a sense of impunity.

I strongly support the Secretary of State’s recognition that people will want to be confident that the inquiries that the BBC is setting up will be genuinely independent, and that they will want to know when those inquiries can be established and when reports on them will be issued. I also support the recognition by the hon. Member for Reading East (Mr Wilson) that this goes wider than just the BBC, and that there are still countless young women and men who have been abused but have never complained because they bear a great burden of shame, guilt and disgust, and fear that they will not be believed. Should not our strong and clear message to them today be “Come forward now, seek the support that you need to address the wrong that has been done to you, and, in doing so, not only secure the justice that you deserve but protect others in the future”?

[Maria Miller]

I thank the right hon. and learned Lady for her comments and her support. She is right: there can be no room for complacency. I know that when we have discussed this matter in Committees of the House, we have stressed the importance of vigilance as well as checking. A vigilant culture in our corporations is vital.

The BBC undertook a root-and-branch review of its child protection policies in 2002, and made significant changes. Having looked at those changes over the last few days, I can see why they are held up as an exemplar in their field, but the right hon. and learned Lady is right to say that we need to reconsider. We must leave no stone unturned in ensuring that such appalling situations cannot arise again. Child abuse can have nowhere to live at any level in an organisation.

Let me reassure the right hon. and learned Lady again that we have a shared objective, namely to ensure that the reviews are entirely independent. I have been assured by the BBC that both the chairmanship and the remit of the organisations that will conduct them will be made available to everyone in the next few days.

[Mr John Whittingdale (Maldon) (Con)]

I echo what has been said by my hon. Friend the Member for Reading East (Mr Wilson) and my right hon. Friend the Secretary of State. The revelations of recent weeks raise serious questions, not just about the culture that existed in the BBC some years ago—and in other organisations—but about the way in which the BBC has handled the matter, and in particular the very damaging suggestion that the “Newsnight” investigation was suppressed. The director-general of the BBC has offered to appear before the Culture, Media and Sport Committee next week, and I am sure that my colleagues will wish to take up that offer.

[Maria Miller]

I thank my hon. Friend for what he has said. I look forward to his Committee’s input, and the role that it will play in ensuring that these matters are handled transparently.

[Diana Johnson (Kingston upon Hull North) (Lab)]

Last year, the coalition scaled back criminal checks on people who have access to children, and the Home Secretary has said that organisations should instead use a “common-sense” approach when vetting individuals. After these dreadful allegations at the BBC and other organisations, does the Minister think that the “common-sense” approach will keep our children safe?

[Maria Miller]

I thank the hon. Lady for her question. I know that she has looked at this matter in some detail, as I, too, have done. I can reassure her that the BBC’s own child protection policy goes beyond that which is required, and it is expected that where people work with children and young people the role will be subject to a satisfactory Criminal Records Bureau check or indeed a PVG—Protecting Vulnerable Groups scheme—check. She is right always to be questioning whether we do have the right checks in place, but I say to her that the individual we are talking about today had no criminal convictions. So this is not just about looking at convictions; it is also about the culture of vigilance that I talked about when responding to the right hon. and learned Member for Camberwell and Peckham (Ms Harman).

[Tim Loughton (East Worthing and Shoreham) (Con)]

Does my right hon. Friend agree that these latest sickening revelations just reinforce the sobering message that child sexual exploitation is rife in every community, every organisation and every social class, whether it is hiding behind the culture of celebrity in the BBC and other institutions, behind the culture of fear within the Church or behind the culture of political correctness that prevents the police and social services from properly investigating when cultural sensitivities are involved? If one compensation is to come out of this all, it will be, as the right hon. and learned Lady has said, to embolden victims to come forward and, most importantly, for them to be taken seriously by the institutions that are there to protect them.

[Maria Miller]

My hon. Friend speaks with enormous passion on this subject, and I had the privilege of working with him on the Safeguarding Vulnerable Groups Bill when we were in opposition. I agree with him that the seriousness of the situation is something that all the organisations that have been implicated need to look at. I reassure him that the police investigating the Savile inquiry are working with the National Society for the Prevention of Cruelty to Children to try to ensure that people who have been affected are forthcoming with evidence and that we can get to the root of this problem.

[Barry Gardiner (Brent North) (Lab)]

The whistleblowing legislation gives protection to those within an organisation who seek to expose a culture of wrongdoing. Will the Secretary of State look again at that legislation to see whether it can go further and impose a duty on individuals to blow the whistle in situations such as this?

[Maria Miller]

I note the hon. Gentleman’s comments. All these things are issues that we can and should be looking at.

[Rehman Chishti (Gillingham and Rainham) (Con)]

What steps are being taken, or what recommendations are being made, by the BBC to strip Savile of his knighthood?

[Maria Miller]

I understand my hon. Friend’s question. I am not sure whether he is aware that knighthoods cease upon the death of an individual, so the path he suggests is not one that can be taken. However, I think that his point sought to ensure that the appalling nature of these acts is recognised, and that is a point worth making.

[Barbara Keeley (Worsley and Eccles South) (Lab)]

The Secretary of State has rightly said that this goes wider than the BBC. Clearly, other inquiries will need to take place, as it seems that Savile had unfettered access to children, vulnerable patients and others on wards—this access seems to have been given almost entirely because of his celebrity and fundraiser status. Will the Secretary of State tell us how there will be co-ordination across the undoubted inquiries that we need in the health service and the one for the BBC?

[Maria Miller]

The hon. Lady is entirely right to say that, as I said in my opening words, a number of other organisations need to undertake investigations. Those involving hospitals will be done at a local primary care trust level, although of course the Department of Health will be carefully examining the outcomes.

[Sir Tony Baldry (Banbury) (Con)]

One cannot indict the dead, one cannot prosecute the dead and, as a consequence, one can never properly give justice to the victims of the dead. So can my right hon. Friend assure me that one of the things the police will thoroughly investigate is why no credible complaints against Savile ever resulted in charges?

[Maria Miller]

I understand my hon. Friend’s frustration, which echoes that of other Members in the House today. I can absolutely assure him that the very serious allegations that have been made are being examined in great detail and that the fact that they have gone on over a number of years without receiving the recognition that they require will, of course, be at the heart of those investigations.

[Fabian Hamilton (Leeds North East) (Lab)]

I had the now dubious honour of being Jimmy Savile’s Member of Parliament and, in that role, I met him on several occasions. A year ago, of course, there was an outpouring of grief in the city of Leeds and in my constituency, as well as throughout the country, on his death. Does the Secretary of State understand how people now feel betrayed, angry and very concerned that it is said in the media—we do not know whether it is true or not—that many people, including senior figures not just at the BBC but in other walks of life, knew of Savile’s proclivities but were too frightened to say anything? Does she think that the BBC inquiry, and other inquiries that are to come, should find out and get to the truth of who knew what and when?

[Maria Miller]

The hon. Gentleman is absolutely right and that is at the heart of the inquiry. It is vital not only that we have the police investigation, which will consider the potential implications as regards any criminal wrongdoing, but that we ensure that we understand exactly what was known and when—to use his words—in any corporate organisation, particularly the BBC. I think he is absolutely right.

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

I am sorry to say that I do not share the Secretary of State’s confidence that the BBC has the wherewithal to clean out its own Augean stables. The culture, practice and ethics of the BBC have left much to be desired over this matter. Indeed, I wrote to Leveson on 4 October asking whether he would extend his inquiry, given that the Prime Minister had said:

“We have also made it clear that the inquiry should look not just at the press, but at other media organisations, including broadcasters and social media if there is any evidence that they have been involved in criminal activities”.—[Official Report, 20 July 2011; Vol. 531, c. 919.]

Leveson has yet to report, so would that not be the easiest way of getting an independent inquiry as quickly possible about this matter, the BBC’s role in which is under a large question mark?

[Maria Miller]

I understand my hon. Friend’s question and concern, but I suggest that extending the scope of Leveson at the moment might result in a delay to the inquiry that I do not think anybody would want to see. I reassure my hon. Friend that the issues about which she is concerned will be dealt with within the two inquiries that have been announced. I hope I will be able to reassure her further when the terms of reference of those inquiries come out, and she can be assured that I will continue to work to monitor these issues closely with the BBC.

[Ian Paisley (North Antrim) (DUP)]

Is the Secretary of State utterly convinced that the culture of the BBC has changed since the revelations about the vile actions of Jimmy Savile? Just a few weeks ago, one of its senior talent was caught in photographs in the grips of a young woman with his hand down her trousers in a public place and he got away with it with nothing more than a shrug of the shoulders and a silly excuse. Is the culture really changing? Has it really changed? Is the Secretary of State utterly convinced? She knows that the police inquiry will take years and that the BBC will get away in the smoke. Surely now is the time for the independent inquiry into the BBC.

[Maria Miller]

The hon. Gentleman is absolutely right to question not just past but present practices. The BBC investigations will consider that exact issue, including not only the situation with the piece on “Newsnight” but the additional work on the troubling allegations we all read about in the papers over the weekend and today. He is right to say that the BBC must consider the present as well as the past.

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

May I welcome my right hon. Friend’s comments about the fact that the culture of child protection in the BBC will underlie any investigation? Many people have commented that things were different then, and I am afraid that that leads to the assumption that the same thing could not happen today. As well as dealing with those who are found guilty of turning a blind eye to such actions, the inquiries must also consider those who decided to drop the “Newsnight” investigation because they were worried that it was in bad taste. That was equally an assumption that such things could not go on and shows that the culture is wrong.

[Maria Miller]

My hon. Friend is absolutely right: we must ensure that children’s concerns and allegations of impropriety or sexual abuse are taken seriously, whether within the police, the NHS or the BBC. He is right to make that challenge and to say that it should be an ongoing concern for the Government.

[Alun Cairns (Vale of Glamorgan) (Con)]

The BBC has not always investigated in-house matters with the same rigour it rightly shows when looking at other organisations and individuals. Along with its 2002 child protection policy, which should have introduced a culture change, what reassurance can my right hon. Friend give that the BBC now has the leadership in place to deliver that culture change and investigate its own affairs as it does elsewhere?

[Maria Miller]

My hon. Friend is right that we have to ensure that there is that challenge, and ultimately that is the role of the trust, which represents the licence fee payer and must make sure it holds the executive to account. My predecessor introduced a number of changes to the trust’s role. We will continue to look at that role and, as we move towards charter renewal, it will of course be hotly in our sights.

[Andrew Stephenson (Pendle) (Con)]

My right hon. Friend said that Sir Jimmy Savile’s knighthood, awarded in 1996, ceased on his death, but many victims will see that as insufficient. Will she consider raising with the honours forfeiture committee the possibility of posthumously stripping Jimmy Savile of his knighthood and OBE?

[Maria Miller]

I understand my hon. Friend’s point. That is a matter for the honours forfeiture committee, which I am sure will have heard his comments.

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

Until the law was changed some 25 years ago it was deemed in such cases that a child complainant with unsupported or uncorroborated evidence could not be believed and prosecutions therefore could not be brought. Although the law has, thankfully, been changed, is not now the time to remind all children and young people who are victims of such despicable acts that they can come forward and be treated in confidence by professionals who are dedicated to ensuring that the truth comes out?

[Maria Miller]

My hon. Friend, who I know has a great deal of experience in this area, will be pleased to know that the Metropolitan police, who are undertaking the investigation, are working with the National Society for the Prevention of Cruelty to Children for precisely the reasons he gives. We must ensure that young people who have had these experiences, or adults who had them when they were young, can come forward so that their evidence can be heard, perhaps through a third party, to ensure that we know all the facts.

European Justice and Home Affairs Powers

Monday 15th October 2012 Commons Chamber

16:12

[Mr Speaker]

I understand that there was something of a breakdown in the usual arrangement whereby statements are made available to Opposition Front Benchers some time in advance of their delivery. I should emphasise that that is a convention and not something that engages the responsibilities of the Chair, but we do attach some importance to these conventions and the principle of courtesy that underlies them.

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

rose—

[Mr Speaker]

Exceptionally, I will take a brief point of order from the right hon. Lady.

[Yvette Cooper]

On a point of order, Mr Speaker. Given the seriousness of this issue of European co-operation, and given that the Home Secretary’s statement has literally only just been handed to me, would it be possible for the statement to be deferred for an hour, or even three quarters of an hour, so that the official Opposition can do our duty of scrutinising it?

[Mr Speaker]

I am afraid that I just do not think that there is a facility for that to happen. There is a third statement to come, which will follow in due course. The timing of the statement has been announced and the Home Secretary is here to deliver it. I think that what I have said indicates my own feeling—[Interruption.] Order. It indicates my own feeling that this is a very unsatisfactory state of affairs. I sincerely hope that there is no recurrence of it. I think that, in the circumstances, we should proceed. I invite the Home Secretary, who I trust will have heard what has been said, now to make the statement.

16:14

[The Secretary of State for the Home Department (Mrs Theresa May)]

May I start by apologising to the shadow Secretary of State for the fact that she received a copy of my statement late? On one occasion, when I was shadowing Stephen Byers and he was due to make a statement in the House, I was in a similar position, so I know the difficulties that the situation causes.

Under the terms of the Lisbon treaty, the Government are required to decide by 2014 whether we opt out of, or remain bound by, all the EU police and criminal justice measures adopted prior to the treaty’s entry into force. Under the treaty, the Government are required to make a final decision by 31 May 2014, with that decision taking effect on 1 December that year. Although that might seem a long way off, the process of decision making, as with many EU matters, is complicated. We wish to ensure that, before that point, we give the House and the other place sufficient time to consider this important matter.

In total, more than 130 measures within the scope of the decision are to be considered at this stage. A full list of the measures was provided to the House on 21 December last year and a further update was given on 18 September this year. The Government are clear that we do not need to remain bound by all the pre-Lisbon measures. Operational experience shows that some of the pre-Lisbon measures are useful, that some are less so and that some are now, in fact, entirely defunct.

Under the terms of the treaty, however, the UK cannot pick and choose the measures from which we wish to opt out; we can opt out only en masse and then seek to rejoin individual measures. So I can announce today that the Government’s current thinking is that we will opt out of all pre-Lisbon police and criminal justice measures and then negotiate with the Commission and other member states to opt back into those individual measures that it is in our national interest to rejoin. However, discussions are ongoing within the Government and therefore no formal notification will be given to the Council until we have reached agreement on the measures that we wish to opt back into.

This Government, more than any other before them, have done their utmost to ensure that Parliament has the time to scrutinise properly our decisions relating to the European Union and that Parliament’s views are taken into account. I assure the House that the 2014 decision will be no exception. As the Minister for Europe has already told the House, the Government are committed to a vote on the matter in both this House and the other place. We are also committed to consulting the European Affairs, Home Affairs and Justice Committees, as well as the European Scrutiny Committee and the House of Lords European Union Committee, on the arrangements for the vote.

I fully expect that those Committees will want to undertake their own work on this important decision. The Government will take account of the Committees’ overall views of the package that the UK should seek to apply to rejoin. So that the Government can do that, I invite the Committees to begin work, including gathering evidence, shortly, and to provide their recommendations to the Government as soon as possible. The Government will then aim to bring forward a vote in both Houses of Parliament. The time frame for the vote will depend on progress in our discussions with the Commission and Council. An update will be provided to Parliament early in the new year on when we can expect the vote to take place.

I hope that today I have conveyed to the House not only the Government’s full commitment to holding a vote on the 2014 decision in this House and the other place, but the importance that we will accord to Parliament in the process leading up to that vote. I am sure that all parties will want to work together to ensure that the final decision is in the UK’s national interest. It is in the national interest that the Government have taken this decision, and I commend this statement to the House.

[Ian Lucas (Wrexham) (Lab)]

If a series of measures are opted out from, will those measures be able to be considered under the question of whether there will be a referendum on European powers?

[Mrs May]

The powers that we are talking about and the arrangements for the opt-out are not subject to the powers that have been taken in the Act in relation to European referendums.

[Mr John Redwood (Wokingham) (Con)]

I am grateful for the Home Secretary’s statement and I fully support opting out of the whole lot. Will she make sure that, were we to want to co-operate with our partners in certain areas in future, that will not be done by a route that prevents us from changing our minds or prevents Parliament from being sovereign?

[Mrs May]

As my right hon. Friend knows, this Government have done more than any other to address the issue of the balance of our relationship with the European Union. It is right that we should have the opportunity to opt out from these measures and that we should look seriously at measures that we might wish to opt into. Obviously, that will take time and involve a considerable amount of discussion and negotiation with the European Commission and other member states.

[Keith Vaz (Leicester East) (Lab)]

The European arrest warrant started out as a very good idea but has ended up with chaotic and unfair consequences, and the Home Secretary is quite right not to opt into those arrangements. When she considers the areas where she can opt in, which she said she would do seriously, will she look at the powers and responsibilities of Europol? It is very important that we have cross-border co-operation with our EU partners so that violent criminals who may have committed offences abroad are not allowed to enter the United Kingdom. I will put her suggestion of a Select Committee inquiry to the Home Affairs Committee tomorrow.

[Mrs May]

I thank the right hon. Gentleman. I said that I was sure that he and his Committee would want to look at this issue. He tempts me to identify individual measures that we might wish to opt in or out of and the terms on which we might wish to do so. I am talking not about individual measures, but simply about the Government’s proposal that we opt out of, and then negotiate on, a number of measures. I am aware of the concerns that have been raised on both the issues that he spoke about, and I will certainly take his comments on board in considering them.

[Martin Horwood (Cheltenham) (LD)]

The Home Secretary must welcome Gloucestershire constabulary’s success last year in breaking a major human trafficking ring, working with other European police forces and returning a suspect for trial here in the UK. Does she agree that only by using practical tools such as the European arrest warrant used in that case can we really tackle the evil of this modern slavery?

[Mrs May]

It is absolutely right that there are criminal offences where we want to be able to extradite people—to bring people back from other countries to face trial and justice here in the United Kingdom. We need to ensure that the arrangements that enable us to do that are the best possible and are proportionate. Proportionality is one of the issues that have been raised as regards relations with Europe. As I say, we will look at every individual measure separately when choosing whether to request to opt in.

[Yvette Cooper]

I have never been in this situation before whereby I have not had a copy of the statement from the Minister until I arrived in the Chamber. Thank you, Mr Speaker, for taking my point of order about this earlier. It shows the complete confusion in the Government and on the part of the Home Secretary about what the Government’s policy is. They have not told us anything at all today; they are completely confused.

We all know that with more international travel and growing cross-border crime, international co-operation is an extremely serious matter, yet the Government seem to have an utterly chaotic position. The Prime Minister told us that the Government would be opting out of all the justice and home affairs provisions; the Deputy Prime Minister said, “No, no—we are only minded to do so.” The Home Secretary said that she was simply setting out “the Government’s current thinking”. However, as she also said that “discussions are ongoing”, presumably the current thinking could change tomorrow and then it will be something else entirely. She said that she wants to opt out of some things but then might opt back into everything all over again. It is just like the Education Secretary saying that he wants out of Europe and the Prime Minister wanting in. With all this out and in, in and out, it is as though the Government are playing a giant game of hokey cokey—and yet the fight against crime is at stake.

The Home Secretary will know that former Metropolitan police commissioners and former heads of MI5 and MI6 have said that British law enforcement bodies are now constantly communicating, co-operating and collaborating with the EU in pursuing serious organised criminal and terrorist networks. The framework of co-operation that they have is crucial in order to stop criminals and prevent crime.

We have read much in the papers about the European arrest warrant, but the Home Secretary did not say whether she wants to opt out of it or plans to opt back in. This warrant made it possible to arrest Jeremy Forrest and bring him back to face British justice for the alleged kidnapping of Megan Stammers and to bring back Hussain Osman for trying to bomb the London underground, and it closed down the “Costa del Crime” when British criminals fled to Spain.

We have a right to be able to bring those criminals back to face British justice, and we owe it to their victims —and, yes, that does mean sending people back from Britain to other countries, because of the 4,000 people returned from Britain in the past eight years under the European arrest warrant, 95% were foreign citizens, who often had committed crimes in their home countries and fled here to escape the long arm of the law. I am sorry, but I think that people should be sent back to their home countries to face justice, rather than have too many people who are suspected of serious crimes in Europe wandering around Britain, unable to be sent back to face justice without years of legal wrangles. From what the Home Secretary has said today, she may well be opting out of the European arrest warrant, which prevents that from happening.

Another area is the sharing of criminal and DNA records. If a known sex offender travels to Britain from France or Spain, does the Home Secretary think that we need full access to their DNA and their criminal records or not?

What about minimum standards of counter-terror co-operation, participating in Europol and exchanging information to stop passport fraud and Europe-wide money laundering, and to trace and freeze criminal assets? The Home Secretary has not told us her position on any of those important measures. She has not said whether she thinks we should opt out, opt out and then opt back in again, whether she thinks that we should renegotiate the provisions, or what will be put in their place in the meantime.

The Home Secretary knows that there is no guarantee that the European Commission and other European countries will support our opting back in again. For example, Denmark, which has opted out from the justice and home affairs provisions, has had about 50% of its requests turned down. One of the Home Secretary’s junior Ministers has admitted that there will be a financial penalty for opting out and then opting back in. Does she have any idea what that financial penalty will be and whether it is worth the price?

I say to the Home Secretary that this is an utterly confused position. Her defence is that she wants to consult Parliament and the public but, considering she has utterly failed to consult Parliament and provide the Opposition with proper information, that is ridiculous. She is taking big risks without even working out what her views are or what the Government think. Next time they want to make a statement on important European policy, perhaps they should work out what they actually think it should be before they come to the House and make it.

[Mrs May]

Let us remember that it was the Labour party that wanted to sign up to the European constitution and that planned to scrap the pound and join the euro. It has no credibility on European issues in this House. Indeed, it has no credibility with the British people.

Let me address the right hon. Lady’s points. On the list of measures that we might want to opt back into, I have made it clear that we need to engage with the European Commission and other member states in order to opt back into measures where we believe it is in the national interest to do so. That negotiation can now start. We will do that in earnest and talk to them about the terms on which particular opt-ins might be possible.

The right hon. Lady seems to be concerned about where the opt-out decision might leave us with regard to public protection. I remind her that it was the previous Government who negotiated the opt-out. If they thought it was such a problem, why did they negotiate it in the first place? On costs, I remind the right hon. Lady that the financial penalty was part of that negotiation of the opt-out, so it was the Labour Government who signed up to it.

The right hon. Lady made a number of comments on the European arrest warrant. She will be aware that a number of Members have raised concerns about British nationals, some of whom are their constituents, spending a long time languishing in foreign jails before reaching trial. A number of issues have been raised in this House and elsewhere about the proportionality issue in relation to the European arrest warrant. I therefore ask the right hon. Lady: is she happy with all of that, or does she think that the situation can be changed? If she does not think that there is an issue with the European arrest warrant, why did she not force a Division and vote against last December’s motion on extradition, which included a proposal to reform and amend the European arrest warrant? She did not. She accepted the motion, which this House passed and which stated that amendments should be made to the European arrest warrant.

The right hon. Lady’s only position on the issue seems to be to disagree with what we say and what we do. The Labour party negotiated an opt-out, but now it is against enacting it. It said that we needed to reform the European arrest warrant, but now it wants to pass up on the chance of doing just that. I have set out the Government’s position this afternoon. We will give Parliament a voice on the issue. The right hon. Lady cannot spend her time saying one thing one day and another thing the next and expect to be taken credibly by this House or anybody else.

[Mr Crispin Blunt (Reigate) (Con)]

I thank my right hon. Friend for making clear the position on whether we will exercise the opt-out or the opt-in, which is a necessary first position to take. I also thank her for enabling Parliament to exercise its proper influence over the individual measures that we may wish to opt into. Why that is difficult for the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper) to understand escapes me.

I know that the Home Secretary and the Justice Secretary will agree that it is clearly in our national interest to get European Union prisoners who are serving their sentence here transferred to their own country as early as possible to serve their sentence there. Within the remit of the proper parliamentary scrutiny that she is seeking, will she give the earliest possible indication to our European partners that we will seek to continue with those arrangements?

[Mrs May]

I assure my hon. Friend that I and the Justice Secretary have every bit as much interest as he has in ensuring that prisoner transfers are made as quickly as possible. He is again trying to tempt me down a road that I will not go down. We have been clear that we will start to look at the individual measures in negotiation with the Commission and member states to see what process will be required and on what terms it might be possible to opt into the measures that we want to opt into. So far, that process has not started.

[Alan Johnson (Kingston upon Hull West and Hessle) (Lab)]

The Home Secretary knows that she does not have to opt out of the European arrest warrant to seek its reform in areas such as proportionality. That work is already going on in Europe because many countries share our concern. She has the benefit of the report by Lord Justice Scott Baker, which she commissioned. Will she confirm that the Scott Baker report strongly recommended remaining in the European arrest warrant because it had made huge strides forward on justice and tackling crime in Europe?

[Mrs May]

The Scott Baker report made it absolutely clear that there were a number of areas in which the European arrest warrant should be amended and changed.

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

I welcome this opt-out, but given that any future opt-in would give UK jurisdiction to the European Court of Justice for the first time, would it not be better to rule out any opt-ins in the future?

[Mrs May]

It is right that we are proposing to exercise the block opt-out, which is the option that is available to us. As I said in my statement, it is not open to us to opt out of individual measures. We can opt out only en bloc and then negotiate to opt into those measures that we think it is right that we continue to be in.

[Mr Denis MacShane (Rotherham) (Lab)]

I have never heard a statement so heavily spun to the press, but so devoid of content when the Minister rises at the Dispatch Box. Is not the Secretary of State opting into the rampant Europhobia that consumes her party, in a competition with the Education Secretary to get us out of Europe? If she abolishes the European arrest warrant, her picture will be up on the wall of every trafficker, child abductor and international criminal as the person who took away the fundamental right of British people to be protected from international crime.

[Mrs May]

I assure the right hon. Gentleman that I take the protection of the British public very seriously indeed. It is the first duty of government to protect the public, but we need to ensure that any measures that are in place to protect the public are the right ones. I have not said what we will do on the European arrest warrant, but I have noted the concerns that have rightly been raised about its proportionality and in relation to the cases of some UK citizens who have been in jail elsewhere. We will now start to look at the individual measures. As I have said, we will discuss with member states and the Commission the process by which we will be able to opt into certain measures, where we choose to do so.

[Sir Roger Gale (North Thanet) (Con)]

My right hon. Friend is right to draw attention to the fact that in some countries, such as France, United Kingdom citizens have been held for long periods without trial, in clear breach of the convention on human rights. Is it not absolutely correct, therefore, that before we go any further down this road, the House should have the opportunity to consider carefully and vote on any extension or further joining of the European arrest warrant?

[Mrs May]

As I set out in my statement, we intend to discuss with various parts of Parliament, including Select Committees such as the European Scrutiny Committee, by what process the House should vote on this issue. We will come back to the House in due course with proposals on how it can express its view on this significant issue of justice and home affairs powers—namely, the package of measures that we might wish to opt into when the time comes.

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

Many of the crimes considered most serious by any normal standard are international in type, including the trafficking of drugs and of people, including children, and banking and corporate fraud. Bearing that in mind, does the Home Secretary truly believe that it is in the interests of justice to opt out of scores of cross-border EU justice measures not knowing if and when future opt-ins will succeed?

[Mrs May]

As I have made clear, it is not open to us to opt out of individual measures. The last Government negotiated a block opt-out, with a right to opt into certain measures following negotiation with the Commission and member states. We intend to follow that process.

The right hon. Gentleman talks about cross-border crime, which is significant. The drugs that are being peddled on the streets and lead to petty crime are being brought across the border by organised crime gangs. That is why we are setting up the National Crime Agency, which will include a border policing command and will have an enhanced ability to deal with serious and organised crime.

[Mr Dominic Raab (Esher and Walton) (Con)]

I welcome the Home Secretary’s decision. Conservative Members want focused co-operation, not blind loss of democratic control.

Will my right hon. Friend reassure the House that as she goes through the 130 measures in question, she will examine all options for co-operation, whether they are formally opting back in or alternatives such as co-operating under a memorandum of understanding or ad hoc co-operation? That would broaden the scope and potential for practical co-operation without ceding democratic authority.

[Mrs May]

I assure my hon. Friend that our consideration of these matters will be wide ranging and that we will examine each measure individually and carefully. As I have said, we will consider not just opt-ins and opt-outs but the other opportunities and options that are available.

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

Will the Home Secretary clarify what will happen in the period between the opt-out and the reintroduction of some, but fewer, measures? Will we have to get into bilateral negotiations with individual states, or will we have a complete impasse in the legal system while we deal with high-profile cases that are in the media but for which we cannot use extradition arrangements?

[Mrs May]

We expect that transitional arrangements will be available, but one point of taking the decision now and announcing what we propose is that we can work with the European Commission to ensure that the time period between the opt-out being exercised and our coming back into any measures is as short as possible. The question of how that will work will be part of the negotiations with member states.

[Michael Ellis (Northampton North) (Con)]

I congratulate the Home Secretary on her announcement. It is crystal clear what she wants to do, which is to protect the sovereignty of this country, unlike the Labour party. Does she agree that Labour has no credibility on this issue? It negotiated this opt-out, and it is complaining now that we are attempting to use it.

Furthermore, does my right hon. Friend agree that there is a serious proportionality problem with the European arrest warrant? It is exemplified by a case from Poland in which an individual is alleged to have stolen a wheelbarrow with a value of £30. The proceedings for extradition from this country cost £30,000.

[Mrs May]

My hon. Friend, with his legal experience, will be well aware of many such problems. As I have said, a number of people have commented on the issue of proportionality. I entirely agree that for the Opposition to complain now that the Government are proposing to exercise an opt-out that they themselves negotiated leaves them with no credibility whatever.

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

The Home Secretary may have persuaded herself, and perhaps even some of her colleagues, that she has adopted a sophisticated position, but I tell her that confusion is the friend of the criminal. I, for one, am deeply concerned about this hokey-cokey approach to justice in this country and across Europe, especially on such deeply serious issues as organised crime, child abuse online and drug and people trafficking. Any sense of confusion is deeply worrying.

Although The Sunday Telegraph might have sought to trivialise some European arrest warrant cases, I remind the Home Secretary, as did my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper), of Hussain Osman. He was brought back from Italy to stand trial for his part in the 21 July bombings and got a 40-year prison sentence.

[Mrs May]

I fully understand the cases cited by the right hon. Gentleman, and others, in relation to this matter. On the other hand, however, concerns have been raised about proportionality in relation to the European arrest warrant. That is why it is right for the Government to sit down and look carefully at this issue, and take a decision on the European arrest warrant and the terms under which it might be possible to opt in. Part of the negotiations with the European Commission and member states is precisely about those terms.

I say to the right hon. Gentleman, and to others, that his Government negotiated an opt-out, so he cannot stand there and complain when the current Government propose to exercise it.

[Mark Reckless (Rochester and Strood) (Con)]

Will the Home Secretary consider further the point raised by the right hon. Member for Leicester East (Keith Vaz) on Europol? On its visits, the Home Affairs Committee has found—whether in relation to the Southeast European Cooperative Initiative and people smuggling in Turkey, or the Maritime Analysis and Operations Centre-Narcotics, which is based in Lisbon and tries to intercept drugs flowing across the Atlantic—that too often Europol gets in the way of effective co-operation. It wants to try to subsume everything into itself.

[Mrs May]

I have noted the points raised by my hon. Friend and the right hon. Member for Leicester East (Keith Vaz). Europol currently has a very good head. He is British—Rob Wainwright—and has just been reappointed for another term, but I have, of course, heard the points raised in the House today.

[Barry Gardiner (Brent North) (Lab)]

The Home Secretary wants to opt out in general, but opt back in, in particular, which implies she believes that specific measures are very much to the benefit of UK crime prevention and justice. Has she made an impact assessment of what will happen in the period between those measures not being enforced, and the point at which they are reintroduced? Will that impact assessment be made available to the public so that they can participate in the consultation she has mentioned?

[Mrs May]

I answered in response to a point raised by the right hon. Member for Wythenshawe and Sale East (Paul Goggins) that part of the discussions with the Commission and member states will be precisely about that process and the time at which any opt-ins that we choose to exercise come into force. By that time we will be able to consider what has come out of those negotiations with the European Commission, and assess the impact of opting in or not.

[Dr Julian Huppert (Cambridge) (LD)]

There is clear need for improvement to the European arrest warrant, but does the Home Secretary agree with 13 former security and police chiefs that scrapping it altogether would be entirely self-defeating? It has become an essential tool in the fight against cross-border organised crime, delivering fast and effective justice across Europe. More than 700 serious criminals have been brought back to the UK to face justice, accused of robberies, murders, rapes, child sexual offences and more. Does the Home Secretary agree that those people should be brought back promptly to face justice?

[Mrs May]

Of course I agree that people who are guilty of such crimes should be brought back to face justice. I say to my hon. Friend, however, that part of the process we will undertake includes careful consideration of each of those 133 measures. As I have said, some of those are now defunct, we may wish to opt back into some, and there are some that we will not opt back into. There will be careful consideration by the Government about what is in the national interest.

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

Does the Home Secretary accept that since the introduction of the European arrest warrant in 2004, the amount of time taken to extradite someone who objects to extradition has fallen from 12 months to 48 days on average? What does she say to the Law Society and the Law Society of Scotland, which are deeply concerned about the impact of her announcement on the prevention and detection of terrorism and serious organised crime?

[Mrs May]

I remind the hon. Gentleman that I have not indicated one way or the other in relation to the European arrest warrant. I have said that we will look carefully at each individual measure, and the organisations he has cited will provide the Government with their views on this matter.

[Ben Gummer (Ipswich) (Con)]

I thank the Home Secretary for her comments. In July 2010, my constituent, Sarah Shields, was murdered. Her boyfriend was accused of the murder and extradited under a European arrest warrant within two months. In her review, I hope that the Home Secretary will bear in mind those beneficial aspects of the European arrest warrant. It has caused a speedy return which, as she knows full well, would not have been so quick 10 or 20 years ago.

[Mrs May]

I fully accept the cases cited by my hon. Friend and a number of hon. Members. We will look carefully at examples of the operation of the European arrest warrant when we consider our final decision on it.

[Mr Peter Bone (Wellingborough) (Con)]

What a star we have in the Home Secretary—terrorists are sent home, powers are brought back from Europe and Parliament is given a year’s notice on something. What more can she do? Will she consider the views of the all-party group on human trafficking, which recognises that most of the successful operations against traffickers have been bilateral and not undertaken through the European regulation? Will she bear that in mind?

[Mrs May]

I shall certainly bear that in mind, particularly given my hon. Friend’s work against human trafficking. It would be wrong to assume that there is only one way of doing things—we can co-operate in a variety of ways to ensure that we get the best results in the national interest.

[Mr Robin Walker (Worcester) (Con)]

I congratulate the Home Secretary on at last starting the process of bringing powers back from Europe. My constituents in Worcester want British justice to be finally decided in the British Parliament. Will she therefore assure the House that any decisions to opt back in will be given plenty of time for hon. Members to debate them individually and in detail on the Floor of the House?

[Mrs May]

There will be a proper opportunity for Parliament to consider these matters. As I have said, the Minister for Europe set out some time ago the Government’s desire for Parliament to have a say. Precisely what form that takes has yet to be discussed with various parliamentary groups, but I shall certainly take my hon. Friend’s point into account.

[Henry Smith (Crawley) (Con)]

I welcome the Government’s intention to come out en bloc of the European justice and home affairs provisions. However, given that the Government might be minded to opt back in to certain provisions, as my hon. Friend the Member for Worcester (Mr Walker) says, we should have not only parliamentary scrutiny, but Divisions. Will she confirm that that option will be part of the mix?

[Mrs May]

We will enter full, frank and open discussion with various bodies on how the process should be undertaken and on any votes in the House. The crucial thing is that this Government are giving Parliament an opportunity to have its say.

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

The Home Secretary will enjoy the full support of my constituent, Andrew Symeou, who languished in a Greek jail, denied his basic human rights. Much of that was facilitated as a result of the European arrest warrant. When she considers any future arrangements, may I urge her to examine in detail cases such as that of my constituent, which Lord Justice Scott Baker unfortunately did not consider when preparing his report?

[Mrs May]

My hon. Friend has highlighted precisely the issue that many hon. Members raise in relation to the European arrest warrant. On the one hand, my hon. Friend the Member for Ipswich (Ben Gummer) cited a case in which the EAW was beneficial, but on the other hand, my hon. Friend the Member for Enfield North (Nick de Bois) cites a case in which an individual feels that they suffered as a result of it. We will certainly look at that balance.

[Andrew Stephenson (Pendle) (Con)]

I fully support our opting out of those 130 EU measures, especially the European arrest warrant, but we should tread carefully. Opinion in the House is clearly divided on the measure, so does my right hon. Friend agree that it is essential that our Parliament looks at the issue in detail and votes on it in our national interest?

[Mrs May]

It is absolutely right that we give Parliament the opportunity to vote on the issue. That is why the Government will discuss with Parliament how that vote should take place, the timing of the vote, and what information Parliament will want to have available to it.

[Stephen Lloyd (Eastbourne) (LD)]

Last month, the 15-year-old schoolgirl Megan Stammers, a constituent, was abducted by her teacher, Jeremy Forrest. Much to my relief and that of her family and friends, Megan returned to the UK eight days after she was reported missing. Jeremy Forrest, the teacher, was returned to the UK less than two weeks later to face trial. They were found in Bordeaux by police acting on a European arrest warrant issued three days previously. Without the EAW, it is likely that it would have taken longer to find Megan, and Jeremy Forrest would probably still be in France. What reassurance can the Secretary of State give to my constituent and her family, and thousands of other victims of serious cross-border crime, that the Government will always ensure that British police can work effectively with their European partners to catch criminals abroad and bring them back quickly to face British justice in our courts?

[Mrs May]

The hon. Gentleman raises a particular case in relation to his constituents. On the general point, I would merely say, as I said earlier, that the Government believe that it is one of the first duties of the Government to protect the public. We recognise the importance of co-operating with other police forces in other jurisdictions in other countries so that we can ensure that people face justice appropriately. These issues, in cases such as the one that he raises, will of course be considered by the Government in looking at the whole question of the European arrest warrant.

West Coast Main Line

Monday 15th October 2012 Commons Chamber

16:50

[The Secretary of State for Transport (Mr Patrick McLoughlin)]

With permission, I would like to make a statement on the west coast main line. On Wednesday 3 October, I announced the cancellation of the inter-city west coast franchise procurement. This decision was taken as the result of significant flaws found within the procurement process undertaken by my Department. These made the continuation of the competition and the award of the franchise untenable.

I know how important the west coast main line is to the economy of this country and to the constituents of Members. This franchise operates more than 300 train services a day, carries more than 26 million passengers a year and employs more than 3,000 staff. This is a regrettable outcome caused by unacceptable mistakes made in my Department during a complex procurement process. It has also meant that I have paused the ongoing franchising programme, including live competitions on Essex Thameside, Great Western, and Thameslink.

I would like to reiterate that there is no suggestion that FirstGroup or any of the other bidders, including Virgin Trains, acted in anything other than good faith during the bidding process. FirstGroup is a great British company and a leading transport operator both here and in the United States. It provides jobs for 13,000 people across the UK and operates four railway franchises, which together carry more than 300 million passengers a year. I want to make it clear today that the cancellation of the west coast competition should not be seen as a comment on FirstGroup, its bid, or its approach to running rail franchises now or in the future. Furthermore, as I have said to the Select Committee on Transport, Virgin has also made a fantastic contribution to both the railways and aviation in this country.

It would be premature at this stage to speculate on where and how the errors in the process emerged. That is why, when I announced the cancellation of the procurement, I also asked for two urgent investigations to be carried out. Both reviews are now well under way. The first of these is an inquiry led by Sam Laidlaw, the chief executive of Centrica. He is the lead non-executive director on procurement across Government and the lead non-executive director of the departmental board. His review is examining what happened during the west coast procurement and why. It will establish the lessons to be learned. I have asked for the initial findings of the review by the end of October and expect the full report by the end of November.

The second review is looking at the implications of the flaws on the west coast procurement for the rest of the franchising programme. This review is being led by Richard Brown, a highly respected industry figure and the chairman of Eurostar. My expectation is that the Brown review will report no later than the end of the year on lessons for the future franchising programme, so that it can be resumed as soon as possible.

I am today publishing the terms of reference for both reviews, and these have already been laid in the Library of the House. Before these reviews have been completed, and particularly before the findings of the Laidlaw review have been published, any speculation as to the nature of the flaws is just that—speculation. I will of course report to the House on the findings of these reviews at the earliest opportunity.

I would like to take this opportunity, however, to restate the Government’s commitment to ensuring that we continue to have private sector innovation and investment in the railways. Since privatisation, the number of passenger miles travelled has nearly doubled. This growth brings significant benefits to the country’s economy and to the environment, relieving congestion and improving connectivity for businesses, commuters and leisure travellers. Passenger satisfaction is up, and so is punctuality. I want to see these benefits continue, which is why I want this pause, while the reviews are carried out, to be as short as possible. We will restart our refranchising programme, including the competitions on Essex Thameside, Great Western, and Thameslink, as soon as possible.

I now turn to the future operation of the west coast main line. I am committed to ensuring that passengers will see no impact as a result of these mistakes. Passengers will be able to make the journeys they have planned, with the tickets that they have bought. Clearly, we will need to learn lessons from the two reviews, and we will need to run a new competition for the west coast franchise. I want this to happen as quickly as possible, but we want to get it right, which will take time. It is also important that in the intervening period we secure a deal that secures best value for taxpayers, including the continual improvement of service quality.

For that reason, I am today announcing that we are commencing negotiations with Virgin Rail Group with a view to it remaining as operator of passenger services on the west coast main line. Subject to ensuring value for money for the taxpayer, I expect this to last for a short period of about nine to 13 months. In this period, we will run a competition for an interim agreement. This interim agreement, which will be open to any bidders, will then run until the new long-term west coast franchise is ready to commence. I will keep this approach under review so that it can be informed by the Brown findings and recommendations and so that it will ensure value for money.

I am grateful to the team at Directly Operated Railways for all their preparations so far. DOR will continue to stand ready should it be required. Britain’s railways are a great success, and I am determined that this incident will not get in the way of the Government’s record. We have launched the biggest programme of investment since the Victorian era and have just announced reductions in regulated fare rises over the next two years, recognising the importance of access to the railways for millions of commuters. I commend this statement to the House.

16:57

[Maria Eagle (Garston and Halewood) (Lab)]

I thank the right hon. Gentleman for advanced view of the statement. I well understand why, when he announced this embarrassing debacle earlier this month, he did so at one minute past midnight, when he hoped everybody would be asleep, because this is yet another staggering example of the monumental incompetence of this shambles of a Government. It is a failure of policy, a failure of process, a failure of ministerial oversight and a failure of ministerial leadership.

The Government’s new franchising policy, which requires risks to be calculated 15 years into the future, was designed by the current Secretary of State for Northern Ireland, announced by the current Secretary of State for Defence and implemented by the current Secretary of State for International Development; and it has shamefully been left to the former Chief Whip to try and deflect the blame for it on to three officials in the Department for Transport. It is just as well it has not been left to the current Chief Whip to deal with, or he would probably have blamed it on the police at the gates of Downing street.

The reality is that Ministers are responsible. It was Ministers who redesigned franchising policy to make it much more difficult to calculate which bidder should win. It was Ministers who slashed faster than any other Department the expertise and staffing available to carry out the task, including apparently making the director of procurement, the director of rail strategy and the director of rail contracts’ posts redundant along with those of senior finance staff; and it was Ministers who reportedly cancelled an external audit that was routinely done in other competitions to check the outcome of the franchise award ahead of its announcement.

It is incredible that Minsters continue to maintain that these problems only came to light late in the day, just before they made that midnight announcement less than two weeks ago. We know that Ministers were sent a report warning of precisely the problems that led to the competition being cancelled five days before the contract was awarded. Today was the opportunity for the new Secretary of State to begin to put things right, yet he has failed his first test and announced a way forward that adds to the chaos and confusion and risks even greater costs to taxpayers, replacing one franchise competition with three, opening up the prospect of three owners in three years, increasing the risk of further legal action and further costs to taxpayers, and adding to the uncertainty for passengers and staff.

Can the Secretary of State update the House on the likely final cost to taxpayers of the Government’s failure on franchising? If reimbursing bidders for the west coast will cost £40 million, what will be the costs of the stalled Great Western, Essex Thameside and Thameslink franchises? What legal advice did he receive on his decision to extend Virgin’s contract? Specifically, what advice has he received on EU competition law, procurement law and the impact on the fairness of future competitions for the franchise? In the light of this debacle, does he agree that it makes sense to maintain a public sector rail company that is equipped to step in at short notice in future, as well as providing a useful comparator? Will he therefore abandon the planned privatisation of the east coast service, which is delivering nearly £200 million back to taxpayers every year, which is profit that in future will be shared with shareholders?

Can the Secretary of State not see that it is completely inappropriate for a member of his own Department’s board, no matter what his other qualities are, to carry out an investigation that has to look at the decisions taken or approved by other members of that board, including Ministers? Will the Secretary of State think again and make his review truly independent? What impact has the 37% turnover of senior civil servants in the restructuring of the Department in the last two years had on its capability to conduct competitions such as this? As the Secretary of State mentioned his fares U-turn, will he now agree to make the train companies apply the cap to every route, so that passengers do not find, as they did last year, that fares may still rise by up to 5% above the cap?

This was a franchise fiasco made by Ministers—a policy scribbled on the back of an envelope in opposition; cuts that go too far, too fast, implemented in government. The result is chaos across the rail industry and tens of millions of pounds of taxpayers’ money down the drain—the direct consequence of decisions taken by Ministers. Now we have a proposal for an independent review that is not independent at all, while the Secretary of State’s solution to the west coast franchise fiasco is a decision to do it all over again—that is, twice in just two years. What an appalling waste of taxpayers’ money! What a shambles from this incompetent Government!

[Mr McLoughlin]

I thank the hon. Lady for her reasoned response to my statement.

The last Labour Secretary of State for Transport was not a Member of this House, but he said some very interesting things. Lord Adonis said:

“Ten year franchises, with the possibility of longer contracts should bidders make sensible and affordable proposals, will allow operators to invest and suggest new innovations.”

At that point the Labour party increased the minimum for franchises to run to 10 years, with an option of 22 years. There is therefore a long-standing position that longer franchises can work, including to the benefit of passengers, which it is important they should do.

The hon. Lady mentioned a number of points. One of the things that I was keen to do, on hearing of the problems we were facing in the Department, was to get to the answers as quickly as possible. That is why I set up the inquiries as quickly as I possibly could. I believe that Mr Laidlaw is perfectly capable of bringing his expertise to bear and showing us—[Interruption.] The hon. Lady ought to wait until he has done the inquiry before prejudging it, because at least we have taken the action to get the inquiry under way. I think that is the right way to go.

The hon. Lady talks about the reduction in members of staff in the Department. There has indeed been a reduction. Bearing in mind the economic climate in which we found ourselves, that was absolutely necessary and I make no apologies whatever for that. I am determined to see that the provision of services to the customers who use the west coast main line—of which there are many, with many constituencies involved—is carried out continuously, and that is why I believe Virgin are the best people to carry that forward.

[Sir George Young (North West Hampshire) (Con)]

The House is grateful to my right hon. Friend for coming here at the earliest opportunity to explain what has gone wrong and to describe the action that he proposes to take. I welcome that. Does he recall that, at the beginning, franchising was done not by his Department but by an independent, arm’s-length body? Twenty-four franchises were issued in some 18 months, none of which was subject to a legal challenge, and this led to the major investment in the railways to which he has referred. Franchising was subsequently brought in-house to the Department. Can he confirm that the Brown review will consider whether franchising should continue to be the job of his Department or whether we should revert to the initial model?

[Mr McLoughlin]

Given that my right hon. Friend was closely involved in setting up the original model, I should naturally defer to his great expertise in this matter. I do not want to prejudge the findings of any of the reviews that I have set up, but I am sure that Mr Brown will have heard my right hon. Friend’s comments and that he may well want to investigate that solution further.

[Frank Dobson (Holborn and St Pancras) (Lab)]

May I express my sympathy for the new Secretary of State’s having to deal with this mess? However, in view of the fact that the Department could not come up with figures that would be valid 10 years hence, how can he believe that the same Department, the same officials and the same advisers can come up with accurate predictions on passenger levels, and on inflation generally, in relation to High Speed 2, which does not exist and for which there is no evidence to draw on? I think he needs to look at that matter again. I will not say that he needs to go back to the drawing board; in the case of HS2, it is more a matter of going back to the ouija board.

[Mr McLoughlin]

I am interested to hear what the right hon. Gentleman says. A number of points have been raised since I made the announcement. The HS2 business case has undergone an extensive quality assurance process, and we are confident that it is accurate. The August 2012 update on the economic case was supported by a 400-person day of independent quality assurance, and HS2 Ltd has appointed independent auditors to undertake a line-by-line check of the analysis being prepared for the deposit of the hybrid Bill. This is all in addition to the existing quality assurance arrangements. I am glad to say that there was a commitment to these proposals in the right hon. Gentleman’s party manifesto to the country as well as in our own.

[Mrs Cheryl Gillan (Chesham and Amersham) (Con)]

My right hon. Friend has come into the Department for Transport like a breath of fresh air. However, like the right hon. Member for Holborn and St Pancras (Frank Dobson), he must know that the failure of the west coast main line franchise process has really shaken people’s faith in the facts and figures that are being used by the Department. Notwithstanding the answer that he gave to the right hon. Gentleman, while he is in the mood for ordering investigations, will he now order a full review of the facts and figures that were used to justify HS2, in order to prevent the Department from making a serious mistake?

[Mr McLoughlin]

As I do not want to incur your wrath, Mr Speaker, perhaps I should refer my right hon. Friend to the answer that I gave to the right hon. Member for Holborn and St Pancras (Frank Dobson) a few moments ago. I also addressed this issue in one of my first major speeches, in which I outlined the importance of this particular piece of infrastructure to the United Kingdom.

[Mr Speaker]

I am always very interested to hear what the Secretary of State has to say on this subject, as he will readily appreciate.

[Mr Nick Raynsford (Greenwich and Woolwich) (Lab)]

The Secretary of State emphasised in his statement that he would seek “best value for taxpayers” in the interim arrangements. He will understand that there is a degree of scepticism in the House about his ability to deliver that. Will he please tell us how he intends to achieve that best value and what comparators he will use? How can he believe that a short-term, nine-to-13-month deal followed by an interim arrangement before the tendering process begins can possibly deliver best value for the taxpayer?

[Mr McLoughlin]

When we conduct negotiations with Virgin, that will obviously be one of the things that we will want to discuss. The right hon. Gentleman will have plenty of time to check whether we have done that.

[Tim Farron (Westmorland and Lonsdale) (LD)]

The short-term fix of asking Virgin to continue operating the west coast service will come as some relief and will provide some certainty in the short term, but how will the Secretary of State convince this House and, more importantly, passengers using the west coast main line, that the two-year interim franchise deal will not lead to a complete lack of investment, given that the new franchise holder will not have the confidence of a long-term deal?

[Mr McLoughlin]

I would say that the position in which we find ourselves is not the position I would have wanted to be in. What I am trying to do is to move forward with some certainty so that when we learn the lessons from the Brown review, they can be implemented and acted on. There is considerable interest in this particular line—it is very important—and I think we will see the sort of developments we want, with companies putting forward proposals, with respect to both the two-year contract that we are proposing to let and the longer-term one in due course.

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

I welcome the Secretary of State to his position. I listened intently to what he said in his statement, but he made no mention of any contingency funding that will need to be put in place as a result of this debacle. Is it proper to suggest that it is possible for this amount to be as much as half a billion pounds—half a billion pounds that taxpayers will have to pay?

[Mr McLoughlin]

I have read many figures, but I have not previously read that one. No doubt I am going to read a lot more in due course. I have already said that the estimated cost of refunding the franchises, which is the right thing to do, will be in the region of £40 million.

[David Mowat (Warrington South) (Con)]

This decision was one of the two or three major pieces of work done in the Department for Transport this year. If the permanent secretary will not hold himself accountable for this, what is he accountable for?

[Mr McLoughlin]

As I have said, I have announced two major inquiries. The permanent secretary took a decision to suspend certain members of staff. This is a suspension—not any prejudging—while these inquiries continue.

[Derek Twigg (Halton) (Lab)]

I would like to quote what the Under-Secretary of State for Transport, the hon. Member for Wimbledon (Stephen Hammond) said on behalf of the Government in a debate on 17 September, just a few weeks ago. He said:

“The Department is confident that we have taken the right decision in the interests of taxpayers and passengers. We expect to sign the contract soon, but we intend to defend the judicial process robustly.”—[Official Report, 17 September 2012; Vol. 550, c. 236WH.]

Given that the Secretary of State has been in the job for only a few weeks, is he confident that the financial information that he is getting throughout the Department for any major projects—including the Mersey gateway project—is robust and can stand up to scrutiny in the future?

[Mr McLoughlin]

Yes.

[Bill Wiggin (North Herefordshire) (Con)]

I congratulate my right hon. Friend on his decision and on his statement. In it, he said that he has paused the ongoing franchise programme. Will he use that pause to ensure higher minimum standards and that the Great Western franchise is not given to FirstGroup as a sop?

[Mr McLoughlin]

I can assure my hon. Friend that the pause is while we wait to see what the Richard Brown inquiry says and whether there are things that we need to put right in these live competitions. Obviously, there will be no sops to any organisations. These are very competitive bids and a lot of work and effort goes into them. Overall, we are seeing far better services for this country’s passengers as a result of franchising and of the very brave decisions taken by my right hon. Friend the Member for North West Hampshire (Sir George Young) some years ago.

[Albert Owen (Ynys Môn) (Lab)]

I genuinely welcome the Secretary of State to his position. The performance of his two predecessors has not set a very high bar when it comes to competence in this matter. [Interruption.] The Minister of State, the right hon. Member for Chelmsford (Mr Burns) is growling at me from a sedentary position, but it was his colleague who said that this was robust. The Secretary of State said that Directly Operated Railways is on standby. What does that mean, and will it be used for the three other franchises that he has suspended?

[Mr McLoughlin]

I have not suspended the three other franchises; I have put them on hold, which is quite an important differential. I thank the hon. Gentleman for his compliments. I am always cautious about compliments coming from the Opposition Benches, but who knows?

As I have said, the three franchises have not been stopped. They have been put on hold, and I hope very much that we can return to operate and lease them once we have learnt the lessons of the Brown report. I do not think that there is any need to contemplate using DOR on those services.

[James Duddridge (Rochford and Southend East) (Con)]

When the Essex Thameside franchise comes off hold, will the Secretary of State look again at the possibility of mandating the quality of the rolling stock that will be used to ensure that it is as good as the quality of the rolling stock that is used now, or, indeed, even better?

[Mr McLoughlin]

I well understand my hon. Friend’s wish to procure better services for his constituents, and I know that a number of other Members will be pushing me for the same thing. I will of course consider his suggestions and see whether we can adopt some of them.

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

Now that the right hon. Gentleman has rightly put an end to the shambles that he inherited, will he bear in mind the watchword “If you are in a hole, stop digging”? Rather than engaging in an interim process that prolongs uncertainty, will he be fair to the marvellous train crews of Virgin Trains, who give extraordinarily good service, and tell them that their future is assured? Will he simply award the franchise to Virgin, which has carried it out brilliantly?

[Mr McLoughlin]

I am very pleased to hear the right hon. Gentleman give such a strong endorsement of the service that he already receives. However, what we are trying to do with franchising is improve that service, not just for his constituents in Manchester but throughout the line, and I do not think that it would be appropriate—in fact, it would not be possible—for me to do as he wishes. I think that what I have set out today is the best course for the next three years on that particular line.

[Andrea Leadsom (South Northamptonshire) (Con)]

I do not want to give my right hon. Friend cause to roll his eyes, so I shall not mention HS2. He can clap if he wants to.

I congratulate my right hon. Friend thoroughly on his decision to call a halt to the west coast main line franchise problem, but does he agree that now is the right time to start looking creatively at how to get fares right down and capacity right up? Perhaps he could consider introducing “standing room only” tickets for short journeys. That would both increase capacity and make journeys far cheaper for passengers who need to travel on a low budget.

[Mr McLoughlin]

I am not sure how popular that would be, but, as I have said in the House on other occasions, I am looking at the whole issue of fares and the way in which they are calculated.

[Mr Dennis Skinner (Bolsover) (Lab)]

What a way to run a railway! Now that we have seen this shambles, why do we not take the opportunity to stop the practice of lining the pockets of the railway bosses, and use the money to lower fares? We could do it through a “one nation” system of public ownership. Let’s start that: we have had enough of this business.

[Mr McLoughlin]

The hon. Gentleman obviously speaks from a past era when nationalisation was the apple of his eye. We have seen substantial changes and improvements in the whole railway system since we introduced the private sector to it. The right hon. Member for Manchester, Gorton (Sir Gerald Kaufman) has just told us that he gets a fantastic service from a privatised railway, and I think that most people feel that they get a fantastic service too.

[Andrew Stunell (Hazel Grove) (LD)]

I thank the Secretary of State for his statement. May I remind him that when that train gets to Manchester, many people transfer to Northern Rail trains, and that the Northern Rail franchise will come up in 2014? There are some innovative proposals for work to be done on that with Greater Manchester and others. Can the Secretary of State assure us that the delay, the pause, or whatever the word is will not interfere with the development of those innovative and constructive ideas for the Northern Rail franchise?

[Mr McLoughlin]

One of the interesting things that I have seen since franchising began, and in how these franchises are being worked on, is the engagement with local stakeholders in local communities. They have all come forward with suggestions and ideas, a number of which can be incorporated in the franchise agreements.

[David Wright (Telford) (Lab)]

There is real concern in Shropshire that the interim arrangements that the Secretary of State has put in place will mean that we will not get back a direct service to London. Will he confirm that when he looks again at the franchise process at the end of his interim arrangement—however long that may last—he will write in services to Shropshire?

[Mr McLoughlin]

I will certainly listen to representations. I know that I will get many.

[Mr Nick Gibb (Bognor Regis and Littlehampton) (Con)]

I welcome my right hon. Friend’s statement, and the candid and honest way in which he has handled this whole issue. I also welcome his comments about Virgin and FirstGroup. Will he confirm that Virgin, FirstGroup and the other bidders all acted with total propriety during the bidding process?

[Mr McLoughlin]

I can certainly confirm that, and I am grateful to my hon. Friend for asking me the question. That is wholly the case, and the mistakes we found were mistakes made in the Department.

[Mr Iain McKenzie (Inverclyde) (Lab)]

We have now witnessed two procurement fiascos from this Government in quick succession. We have seen that contracts are not being monitored and we are seeing tendering processes that are clearly flawed. One would think that the Minister would be well aware of these and that if he had been alerted to them, he would not have awarded this contract. The question therefore arises: why did he award this contract when he knew that it was flawed?

[Mr McLoughlin]

The contract was not signed.

[John Stevenson (Carlisle) (Con)]

May I extend my support to the Secretary of State for taking prompt action once he was aware of the problems with the west coast rail franchise? My concern now is about the length of the term of any new franchise, once it is finally in place, as that can affect the investment decisions of a rail company, particularly as regards stations such as Carlisle. Will the length of the new franchise be the same as that initially proposed?

[Mr McLoughlin]

I understand my hon. Friend’s point. What I do not want to do at this stage is prejudge what the Brown report may eventually say, but I will say that it was commonly accepted that longer franchises would lead to more investment and a better return for the taxpayer. We will need to look at this properly and to investigate what went wrong with this particular process before we come to long-term decisions. A number of people in the industry, including the former Secretary of State who sat in another place and not in the House of Commons, have also made that point.

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

I want HS2 to happen, because it would be good for Birmingham, but I also want to ensure that it is based on accurate and reliable figures. Will the Secretary of State ensure that his review will identify any errors and miscalculations, and whether or not they relate to HS2, and will he ensure that this is a sound calculation?

[Mr McLoughlin]

I am grateful for the hon. Lady’s support for HS2. As I said a few moments ago, that is a separate process and a lot of work is going into the preparation for the HS2 Bill that will come before the House. There will be a lot of opportunities to debate that over the coming months.

[Michael Fabricant (Lichfield) (Con)]

Can my right hon. Friend, who is sorely missed as Chief Whip, assure my constituents that services will not be damaged by these changes and that stations such as Lichfield Trent Valley, which are badly in need of improvements for disabled access, will not have new works delayed as a consequence?

[Mr McLoughlin]

I hope we see no delays in investments as a result, and I am always grateful to my hon. Friend, who is always trying to be helpful.

[Paul Farrelly (Newcastle-under-Lyme) (Lab)]

FirstGroup’s bid included a £190 million guarantee, which would in no way have been large enough to compensate the Government if its optimistic bid had failed to deliver the goods—in fact, it gave a strong financial incentive to walk away. Has the Secretary of State yet understood why that basic feature did not set alarm bells ringing before the bid was announced? Will he ensure that future contracts contain no financial incentives for bidders to walk away?

[Mr McLoughlin]

The time that bidders walked away was under the previous Government, when the operators on the east coast main line did so. There are lessons to be learned. I shall not prejudge what the inquiries might tell us, but I am looking forward to their results and hope that we can then move on based on a safer footing.

[Charlotte Leslie (Bristol North West) (Con)]

I welcome the Secretary of State’s announcement about the Brown review. Will he assure me that this pause will be an opportunity to ensure that on other franchises, such as the Great Western franchise, we seize opportunities when they exist? In my area, that would include a full Bristol metro with a full Henbury loop line to complete the circle line around Bristol.

[Mr McLoughlin]

I am not sure whether the second part of my hon. Friend’s question was a bid, but on the first part I can assure her that the reviews will inform us and that we will take note of them. I would not have set them up if we were not going to do so.

[Mr Ian Davidson (Glasgow South West) (Lab/Co-op)]

I came here today on the west coast main line; the train was late. May I ask the Secretary of State—[Interruption.] May I be the first to ask him to resign?

Let me say what I would like the Secretary of State to do. We will have the short period negotiation, the interim agreement and the long-term franchise. To ensure value for money, will he guarantee a public sector comparator for each of them?

[Mr McLoughlin]

I heard one colleague shout out, “Not late enough.” Obviously, we have set up the two reviews and we will look at what they produce. When we have put such things out to franchise, we have seen huge competition and interest, and it is a matter of getting the best deal for the taxpayer in the longer term.

[David Tredinnick (Bosworth) (Con)]

I congratulate my right hon. Friend on his common-sense decision to keep Virgin running the west coast main line, particularly in the run-up to Christmas. There are concerns, however, about an interim agreement, which will surely prolong the process. Would it not be better to go to a final agreement and not make things more complicated?

[Mr McLoughlin]

I can understand my hon. Friend’s frustration, but there has been a huge amount of investment in the west coast main line and it is right and proper that after the initial nine months, during which we will set up the two-year interim contract, we should seek to get the best return for the taxpayer. I think that an open competition is the best way to do that.

[Gloria De Piero (Ashfield) (Lab)]

The Campaign for Better Transport has been quoted today as saying that operational changes in the Department have not been focused on passengers but have been all about the bottom line. Does it not have a point?

[Mr McLoughlin]

No.

[Alun Cairns (Vale of Glamorgan) (Con)]

I pay tribute to the Secretary of State for the way in which he has handled a very difficult situation, not only accepting responsibility for an error made by an officer in his Department but moving forward swiftly with the review. Will he reassure me that renationalisation is off the cards for a range of reasons, including financial ones?

[Mr McLoughlin]

I thank my hon. Friend for his kind words. The truth is that both parties have agreed in the past that franchising is the proper way to go and gets better returns for the taxpayer. This particular episode is not acceptable and we need to learn the lessons from it. I am determined to do that.

[Tony Lloyd (Manchester Central) (Lab)]

Does the Secretary of State not agree with the many people who use the line that a public sector interim arrangement would have been preferable as it would have given him control over pricing and quality? Will he explain how he will guarantee those things in the interim period?

[Mr McLoughlin]

Obviously, there is a difference in view between the hon. Gentleman and the right hon. Member for Manchester, Gorton (Sir Gerald Kaufman), who praised the current operators of the west coast main line. Indeed, a number of people have praised the operators so I am rather surprised that when I have made a decision to keep the service with them, some people have found a way to attack that decision. The short period involved means that the best way to ensure continuity of service is to do a deal with Virgin, and we are about to embark on that.

[Jeremy Lefroy (Stafford) (Con)]

Those bidding for the franchise offered a number of improvements that were welcome to my Stafford constituents, including fare reductions. Will my right hon. Friend see whether it is possible to introduce some of those improvements in the interim period, along with his welcome cap on rail fares?

[Mr McLoughlin]

I thank my hon. Friend. As I have pointed out, there will be a two-year franchise that will be negotiated some time next year, and I hope that some of the benefits that were initially to come from a longer-term franchise agreement can be replicated in it.

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

In an age of high food prices, high oil prices and high fares, will the Secretary of State, when he negotiates the west coast main line franchise both in the interim and in the longer term, put a special emphasis on fares, because they are far too high?

[Mr McLoughlin]

I am glad that we have been able to reduce the proposed increases from RPI plus 3 to RPI plus 1. I hear what the hon. Gentleman says about fares. Of course, some pre-booked fares can cost a reasonable amount, but others are very high, and that is something I think we should all look at.

[Jason McCartney (Colne Valley) (Con)]

What time scale implications will this all have for the east coast main line franchise? Will my right hon. Friend take note of the fiasco that occurred under the previous Government when two train operating companies on the east coast main line collapsed in only two and a half years?

[Mr McLoughlin]

I thought that it was a utopia under the previous Government and that nothing ever went wrong, but my hon. Friend is right to say that the only time a rail franchise collapsed was under the previous Government. The Opposition seem to have forgotten that today in their attacks on me. I hope that we can learn the lessons and move on and that this will not lead to too long a delay in any of the other franchises.

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

The west coast main line is obviously important to my constituents in Birmingham, but I am worried about the knock-on effects of this fiasco on other franchises coming up for renewal. I draw the Secretary of State’s attention to London Midland and the countless delays there have already been in the west midlands because of driver shortages. There is no long-term thinking on planning for new stations and ticket office hours are being cut, and that is because it is not looking at the long term. What impact will this fiasco have on trying to give passengers in the west midlands the kind of service they deserve?

[Mr McLoughlin]

I want all taxpayers and passengers to get the kind of service they deserve. There have been some specific cases of cancellations on the line, as the hon. Gentleman has just mentioned. I hope that the company will put that right and train more drivers, which I think it is in the process of doing.

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

I echo what the hon. Member for Telford (David Wright) said. Shrewsbury is the only county town in England without a direct rail service. All the Shropshire MPs have campaigned very hard over the past year to ensure that that comes about, and both Virgin and FirstGroup have committed to it. Will the Secretary of State do everything possible to ensure that that vital service for our constituents is not delayed more than it needs to be?

[Mr McLoughlin]

I can give my hon. Friend that assurance.

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

The west coast main line matters hugely to the Glasgow and Scottish economies, but so does value for money for the taxpayer. Can the Secretary of State identify any previous franchising process that was not subject to external audit, and is it not the case that a decision made by his Department to save hundreds of thousands of pounds has ended up costing the taxpayer tens of millions of pounds?

[Mr McLoughlin]

The hon. Gentleman is seeking to prejudge the two inquiries I have set up, which is something I am not prepared to do.

[Rehman Chishti (Gillingham and Rainham) (Con)]

On train franchising, will the Secretary of State clarify when Southeastern’s franchise is likely to be concluded, because it is currently undergoing a process of renewal?

[Mr McLoughlin]

I have announced a pause on three franchises, and there are others that have not yet been concluded in the final bidding process. We will obviously learn lessons from the Brown inquiry and the Laidlaw inquiry, but I hope that this will not have a long-term impact that will delay any of the other franchises that are going to be negotiated.

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

Is not the most shocking part of this the fact that had Richard Branson not made the legal challenge, we would not even have known about this fiasco? Given the importance of the train services through Stoke-on-Trent, the lifeblood of our local economy rests on the future of the west coast main line. Will the Secretary of State give an assurance that he will give Parliament the true costs of the fiasco, because it is likely to be far more than the £40 million he talks about? We need to ensure that those funds are safeguarded for transport.

[Mr McLoughlin]

The hon. Lady should just wait and see, because some of the things the reviews might lead to could provide a greater return for the taxpayer in the longer term. I am not for one moment dismissing the fact that this has been very expensive and unacceptable—it is and it has been—but the most important thing is that we learn the lessons in the longer term.

[Sir Tony Baldry (Banbury) (Con)]

Most of my constituents just want to ensure that the trains run on time and are affordable. Will the Secretary of State confirm that he has managed to cap rail fares for the next two years? I am not sure that that point has been fully understood.

[Mr McLoughlin]

I am grateful to my hon. Friend for that question. I can confirm that the Prime Minister announced a cap of RPI plus 1 for not only this year, but next year and the year after.

[Mr David Anderson (Blaydon) (Lab)]

In this House, we have become used to the Government’s incompetence. They could not privatise the forests properly and they made a mess of the NHS; with this, they have shown that they cannot even privatise what is already out there. The job is too big for them. Why do they not just give up—and give up now?

[Mr McLoughlin]

I am not sure, Mr Speaker, whether that was a question or a statement.

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

Will the Secretary of State give a firm undertaking that none of the costs involved in this incident will be passed on to hard-pressed consumers on the west coast main line? Furthermore, will he reassure the siren voices calling for the scrapping of HS2 that that line is absolutely necessary because the west coast main line is under such pressure that it reaches capacity in a very short period?

[Mr McLoughlin]

What I would like to say to my hon. Friend is yes and yes.

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

The Secretary of State is right to make this decision on the west coast main line, but it is unclear to me why his predecessor—who, after all, is an accountant by trade—did not hear the alarm bells ringing for quite some time. Will he reassure me that the review that he has announced today will consider that significant and unacceptable risks were being taken by allowing one of the bidders to backload most of the premium to the end of the franchise? Will he put in place measures to ensure that franchisees cannot simply walk away from a franchise before they make substantial payments?

[Mr McLoughlin]

My predecessor, like me, was given firm assurances at the Department that the competition was sound. That proved not to be the case. Once I knew and had the full facts, I made the statement that I made.

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

I used the west coast main line today and my train was early, for which I thank the Secretary of State. Can he assure me that when making decisions about the new franchises, he will take every opportunity to incorporate both quality metrics and performance satisfaction ratings from customers?

[Mr McLoughlin]

I am grateful to my hon. Friend, who is also a user of the west coast main line. The answer to his question is “definitely”.

[Graeme Morrice (Livingston) (Lab)]

In view of this fiasco and other potential franchise debacles, will the Government now realise that the game is up and take the west coast main line back fully into public ownership, as is the case with the east coast service?

[Mr McLoughlin]

No.

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

In respect of the review of the process relating to the Great Western franchise, will my right hon. Friend ensure that the fundamental mistakes about capacity in the previous franchising round under the last Government will not be repeated?

[Mr McLoughlin]

I hope that the two inquiries that I have set up will help us through the unfortunate position in which we find ourselves and, in the longer term, lead to a much more robust franchising system.

[Rosie Cooper (West Lancashire) (Lab)]

I appreciate that assurances from the Transport Secretary, and Ministers previously, that the process was rigorous, detailed and fair were given in good faith. However, serious concerns remain that the incident was not isolated.

Bearing in mind some of the comments made about loading and how the contract was done, anyone with common sense knew that something was wrong. Will the Secretary of State categorically confirm that mistakes were not made by the Department when awarding franchises on the other routes, before the west coast main line franchise process? When did that analysis take place?

[Mr McLoughlin]

I am not sure that I am responsible for the franchising that took place under the previous Government, and this franchise was the first that would have taken place under the new system.

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

I thank my right hon. Friend for coming to the House to make this statement. What impact will the reviews have on the Great Western railway? Is he willing to meet me and my fellow Plymouth Members of Parliament to discuss how we can improve connectivity to make sure that we have more three-hour train journeys coming into Plymouth and trains that get there before 11.17 am, as is the case at the moment?

[Mr McLoughlin]

Franchising gives hon. Members from all constituencies an ideal opportunity to feed into the process to say how they want services to improve; and where that can be done, it should be done. I am certainly willing to meet a delegation led by my hon. Friend.

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

Does the Secretary of State agree that the inquiry we really want is to have, say, the Public Accounts Committee look at all this, because it is far more important than just the chaos surrounding this particular contract? Right across Government, we see this incompetence in procurement time and again. Whether it is about the churn of Ministers or the churn of civil servants that we are all familiar with, there is something deeply rotten in the way that we run government in this country.

[Mr McLoughlin]

I think I need to pause before I respond to that question. The hon. Gentleman talks about the churn of Ministers under this Government, but he should look at the churn of Ministers in this Department under the previous Government, which was fairly substantial; I think that the former right hon. Member for Ashfield lasted eight months. As for what the Public Accounts Committee might look into, I have been in this House long enough to know not to tell any Select Committee what it might or might not look into.

[Neil Carmichael (Stroud) (Con)]

I welcome the Secretary of State’s obvious commitment to investing in infrastructure —whether new, like HS2, or old, like the Stroud and Swindon line. May I turn his attention back to tickets and urge that we have a ticketing system that is characterised by simplicity and transparency and produces more competition within it?

[Mr McLoughlin]

We are currently undertaking a ticketing review which I hope will address some of the points that my hon. Friend has made.

[Mr David Hanson (Delyn) (Lab)]

My constituents in Flintshire who use the west coast main line daily will be horrified by the potential £40 million-plus cost resulting from mistakes by the Secretary of State’s Department. This is now what is called in the civil service an unfunded pressure. Will he tell the House how he plans to fund it?

[Mr McLoughlin]

In due course, yes.

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

Those of us who use the west coast main line will appreciate that massive improvements have occurred since privatisation and welcome the improvements that were promised in the new franchise, including lower fares and more frequent services to Chester. Will my right hon. Friend ensure in the interim that those promised improvements are still delivered and not forgotten about?

[Mr McLoughlin]

My hon. Friend, like many colleagues, is calling for better services for his constituents, and I cannot think of a finer place than Chester that people want to go—

[Daniel Kawczynski]

Shrewsbury!

[Mr McLoughlin]

I had better be a bit careful, or we might get into a bidding auction. There are a number of places to which people want extra services. That shows that the railways are now held in high esteem by all, and it is very much my intention to try to provide the services that people wish for.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

It will be some years before we know the identity of the long-term operator of the west coast main line. How can anyone have any confidence in the bids for the east coast main line franchise when we have no idea of the long-term plans of the long-term operator of its main competitor on the west coast? Is not that why we should keep the east coast main line directly operated for a good few years—preferably indefinitely?

[Mr McLoughlin]

That is not what the last Secretary of State who sat in the Cabinet for the Labour party said, and it is not what I want to happen.

[Ben Gummer (Ipswich) (Con)]

May I say how pleased I am by the candour and assured manner with which the Secretary of State has dealt with this matter? He will be aware of the enormous importance that travellers, commuters and businesses in the eastern region attach to the letting of the new 15-year franchise. He received a delegation from me and my hon. Friends the Member for Norwich North (Miss Smith) and for Witham (Priti Patel) with great enthusiasm. Can he give any assurances that the programme and timetable for that franchise will not slip as a result of the decision that he has notified to the House?

[Mr McLoughlin]

It certainly should not slip. I can say to my hon. Friend that the recommendations that he and a number of colleagues have made to me have been fed into the process, and will I hope be reflected in the franchise when it is finally awarded.

[Helen Jones (Warrington North) (Lab)]

My constituents will be horrified at the shambles that this Secretary of State has presided over. Warrington relies on its transport links to promote economic development. What action was taken by his Department on the Europa Partners report, which highlighted flaws in the franchise process five days before the announcement? Was that drawn to the attention of any Minister in the Department?

[Mr McLoughlin]

What I can say is that the flaws were found as a result of the Department preparing for a judicial review. When they were found and I saw the report and other information, I took the decisions that I announced on 3 October.

[David Rutley (Macclesfield) (Con)]

Like many other Government Members, I welcome the decisive action taken by my right hon. Friend in the face of unacceptable mistakes in the Department for Transport. Will he confirm that, during the interim period and the intervening period before that, passengers in Macclesfield will continue to experience the same high levels of service that they have come to expect in recent years?

[Mr McLoughlin]

I realise how very important the service on the west coast main line is to my hon. Friend’s constituency. That is why I am keen that, for the sake of continuity, we carry on with the present service operators until such time that we can re-tender for a short, interim franchise. I know he will insist that the service that his constituents get now will continue.

[Ian Lucas (Wrexham) (Lab)]

Will the Secretary of State ask his independent inquiries to consider a mutual model for the railways? Welsh Water in Wales has delivered a 6% reduction in charges since 2001, billions of pounds’ worth of investment, and stability for business. That is what we want on our railways. Why is he so wedded to a broken system?

[Mr McLoughlin]

I am not wedded to a broken system; I just look at the reassurances that previous Ministers gave on improvements to the railways since the present franchise system came into operation.

[Ann Coffey (Stockport) (Lab)]

I am very concerned that there will now be a long hiatus in investment in the west coast main line. Will the Secretary of State talk to Virgin about making some money available for long overdue improvements to Stockport station, which were offered by FirstGroup? Alternatively, perhaps he could find some cash from his departmental budget? It seems unlikely that those improvements will happen any time soon.

[Mr McLoughlin]

I understand that the hon. Lady wants improvements made to her station and I will consider carefully what she has said, but I am not sure that there is any spare money in the Department.

[Sheila Gilmore (Edinburgh East) (Lab)]

Will the Secretary of State ensure that the Brown inquiry does not just tinker with franchising but considers other options? We have heard about the recent option on the east coast main line, but another is the concession process that was used for London Overground. Will the inquiry be able to consider that?

[Mr McLoughlin]

I will not tell the inquiry what to do. I have published the terms of reference and put them in the Library earlier today. They are comprehensive.

Referendum (Scotland)

Monday 15th October 2012 Commons Chamber

17:48

[The Parliamentary Under-Secretary of State for Scotland (David Mundell)]

I want to make a statement about the referendum on independence for Scotland. The House will appreciate that my right hon. Friend the Secretary of State for Scotland is unable to deliver the statement because he attended the meeting between the Prime Minister and the First Minister in Edinburgh to secure agreement on an independence referendum for Scotland.

In January this year, my right hon. Friend the Secretary of State for Scotland delivered to the House a statement about the referendum. At that time, we acknowledged the Scottish National Party’s victory in the May 2012 Scottish parliamentary election and its manifesto pledge to hold an independence referendum. The Government also made clear their view that the Scottish Parliament did not have the legal power to legislate for an independence referendum. My right hon. Friend the Secretary of State made an offer that the UK Government would bring forward an order to give the Scottish Parliament that legal power.

Since January, the UK and Scottish Governments have held consultations, there has been considerable public debate, and numerous discussions between Ministers have taken place. Many of those discussions took place between me and Bruce Crawford MSP, the Minister for Parliamentary Business and Government Strategy in the Scottish Government, and I acknowledge his contribution to today’s agreement. Following 10 months of deliberation and four weeks of direct negotiations between the Scottish Government’s Deputy First Minister and my right hon. Friend the Secretary of State, I am pleased to report to the House that today in Edinburgh the Prime Minister and the First Minister have made an agreement that will allow a legal, fair and decisive referendum to take place.

This is a significant agreement. The two Governments have agreed that there should be a referendum. We have agreed that the referendum will consist of a single question. It will offer a choice between remaining within the United Kingdom and independence. We have agreed that it must be held before the end of 2014. The referendum will be based on the normal legal framework for UK referendums, with oversight from the Electoral Commission. That includes the key issues of how the referendum question will be determined, and how the rules governing spending and campaigning will be established.

Following today’s agreement, the Government will bring forward an Order in Council under section 30 of the Scotland Act 1998. I have today placed a copy of the agreement and the draft order in the Library of the House. The agreement and draft order are also available to Members from the Vote Office. The order will be laid before Parliament on 22 October and will be debated by both Houses of this Parliament and by the Scottish Parliament. All Members of this House will have the opportunity to consider and vote on the order. If both Parliaments approve the order, and after it is approved by Her Majesty in Council, the Scottish Parliament will have the legal competence to legislate for the referendum. We hope that the order will be passed by February 2013. Once that has happened, the Scottish Government will introduce a referendum Bill, setting out the wording of the question, the date of the referendum and the rules for the campaign for the Scottish Parliament to consider.

As part of today’s agreement, the two Governments have agreed that the rules for the referendum will be based on the rules set out in the Political Parties, Elections and Referendums Act 2000. Those rules were used successfully in the two referendums that took place last year. The two Governments have also confirmed that the Electoral Commission will review the proposed referendum question and that its report will be laid before the Scottish Parliament. That is the same process as applies to other UK referendums. Interested parties will be able to submit their views on the question to the Electoral Commission in the usual way. The Scottish Government will then respond to the Electoral Commission’s report.

Both Governments agree on the need for maximum transparency in this process and for a level playing field. Therefore, as part of today’s agreement, the Scottish Government will consult the two campaign organisations that have been established for their views before proposing spending limits for the referendum campaign to the Scottish Parliament. The Electoral Commission will also provide the Scottish Government with advice on the appropriate spending limits for the two campaigns in the referendum, as has happened in previous referendums, such as the 2011 referendum in Wales on further powers for the Welsh Assembly. In that referendum, the Electoral Commission recommended that the spending limit for designated campaign organisations should be set by reference to the expenditure limits that apply to elections to the relevant legislature. In its response to both Governments’ consultation documents, the Electoral Commission provided its view that that model remains appropriate for the Scottish independence referendum.

Both Governments agree that all those who were entitled to vote in the Scottish Parliament elections in May 2011 should be able to vote in the referendum. As with all referendums held in any part of the UK, it will be the legislation that establishes the referendum that sets the franchise. It will therefore be for the Scottish Parliament to define the franchise in the referendum Bill, as would be the case for any other referendum—or indeed election—on matters within its devolved competence.

Although both Governments agree that the basis of the franchise will be that for the Scottish Parliament elections, the Scottish Government have proposed to extend the franchise to allow 16 and 17-year-olds to vote. It will be for them to make the case for that change and to deal with the technical issues that may arise. There is, of course, a range of opinions in this House about changes to the voting age. However, having agreed the principle that the Scottish Parliament should have the legal power to legislate for the referendum—that it should be a referendum “made in Scotland”—the Government accept that it should be for the Scottish Parliament to determine the franchise. I fully expect that the Scottish Government’s proposals will be debated robustly in the Scottish Parliament. Any decision taken by the Scottish Parliament for the referendum will not affect the voting age for parliamentary and local government elections anywhere in the United Kingdom.

Today’s agreement is important, as will be the consideration of the agreement and the order by this House. However, I would also like us to reflect on what will come after. Now that the Governments have agreed the process for the referendum, it is vital that we get on with the debate about the most important political decision that people in Scotland will ever take. The UK Government have started to prepare the analysis and evidence for which people in Scotland are calling. Over the next year, the Government will publish thorough, evidence-based information that will set out the key issues in the independence debate. That analysis will be comprehensive, robust and open to external scrutiny. I fully expect it to show that Scotland is better off within the United Kingdom and that the rest of the United Kingdom is better with Scotland in it.

The Government believe passionately in the United Kingdom. We will work tirelessly over the next two years to show the Scottish people and everyone else in this country that together we are stronger, that together we can overcome the challenges confronting us, and that together we can build a better future for Scotland as an integral part of the United Kingdom. The debates ahead will no doubt be long, challenging and, at times, heated. However, I fervently believe that, with the support of colleagues across the House, across Scotland and across the whole of the United Kingdom, in the autumn of 2014, fellow Scots will join me in choosing to stay as part of the United Kingdom. We are indeed better together. I commend this statement to the House.

17:58

[Margaret Curran (Glasgow East) (Lab)]

I thank the Minister for providing me in advance with a copy of the statement.

This is, without doubt, an historic day for Scotland and the Scottish people. Now is the time for the debate on Scotland’s future to move out of the corridors of power and on to the streets of Scotland. I join the Minister in welcoming the fact that an agreement has been reached. It brings all Scots, me included, one step closer to deciding the future of our country.

The Opposition welcome the fact that the deal has been reached, but will seek guarantees that both parties will adhere to the agreement in spirit and in practice. We also have a number of questions to raise. Our position has always been that the referendum must be fair, legal and decisive. We welcome the fact that there will be a legal referendum with a single question and a regulatory role for the Electoral Commission.

Labour has always been, and will continue to be, the party of devolution. Labour brought devolution to Scotland, Wales and Northern Ireland, and we will continue to make the case for our devolution settlement to develop and evolve. We are, and have always been, a party of constitutional renewal, and we know that the best interests of our people are served by binding together, not breaking apart. In the debate about our future over the next two years, we will therefore promote devolution within the Union against those who seek to bring it to an end.

The agreement sets out a framework for how we will move forward to the referendum, but I would welcome clarity on a number of a points, which I hope the Minister will address. First, the Electoral Commission should clearly play a significant role in the process, particularly with regard to the referendum question and the funding of campaigns. Can he assure the House that the memorandum of agreement ensures that the Scottish Government must comply with, not turn their back on, the Electoral Commission’s advice? If they do turn their back on that advice, or seek to do so, what action will be taken? Given that no other Government have ever done that, it would be exceptionally damaging to the conduct and process of the referendum.

Secondly, the terms of the agreement leave significant ambiguity regarding the funding of each campaign and the opportunity for financing or related activity by interested third parties. Does the agreement ensure that the limits set by the Electoral Commission will be binding? Will organisations such as trade unions and businesses be able to participate in the referendum in a way comparable to that in which they participated in the Welsh and alternative vote referendums? Does the Minister agree that it is troubling that even before the agreement was signed stating that the Electoral Commission would have a regulatory role, the First Minister’s aides were briefing the press that they would be willing to ignore the Electoral Commission?

Finally, we must ensure that there is adequate scrutiny of the agreement and the subsequent process in this House. Will the Minister therefore explain what opportunity there will be to debate the detail of the section 30 order on the Floor of the House? Will he assure me that either he or the Secretary of State will provide regular updates to the House as the process continues over the next two years?

[David Mundell]

I welcome the hon. Lady’s welcome for the agreement and her contribution to the debate that has led to it. It is important that the agreement sets out a clear role for the Electoral Commission in relation to both the question and the funding of the campaigns. It is difficult to envisage circumstances in which the Scottish Government would want to ignore the Electoral Commission’s recommendations. As she said, no Government have ever done so, and there would be not just a procedural problem but a significant political price to pay for any party that sought to do so.

We should never underestimate the Scottish people. It is wrong to suggest that they could somehow be duped into supporting independence by any form of chicanery or trickery that might come from either side of the debate. They are much too sensible for that, and I have every confidence that when the referendum comes, whatever the form of the question and however the campaign has been funded, they will make the right decision.

[Sir Gerald Howarth (Aldershot) (Con)]

As an Anglo-Scot, like my right hon. Friend the Minister and the Prime Minister, I believe passionately in the Union and believe that the campaign to remove Scotland must fail.

The Electoral Commission’s involvement is much to be commended, and I commend my right hon. Friend for what he said about it. However, the proposal to extend the franchise to 16-year-olds, who cannot lawfully buy alcohol, drive a motor car or be called to fight on the front line, but who will now be invited to opine on one of the greatest constitutional issues of our time, is surely a nonsense that will create a dangerous precedent.

[David Mundell]

I can assure my hon. Friend that it will not create a precedent. The franchise for parliamentary and local government elections throughout the United Kingdom will be determined by opinions in this House. At the moment, the Government have no proposals to change the voting age, and I do not believe there is a majority in the House to do so.

I say to my hon. Friend and others who share his views that they must now take their arguments to Scotland and the Scottish Parliament, so that the Scottish Government can be held to account when they bring forward their proposals. This is a moment for the Scottish Parliament to demonstrate its own robust ability to scrutinise legislation. When it identifies complexities with enfranchising 16 and 17-year-olds, of which there are many, it can hold the Scottish Government to account and argue against the proposal.

[Stewart Hosie (Dundee East) (SNP)]

I thank the Minister for his statement, although he will forgive me if I do not welcome the final two or three paragraphs. However, I thank him for very early sight of it.

This decision is historic, and I agree with the Minister that it is the most important that we will ever take. It also has the potential to be exciting and transformative for Scotland when the Scottish people vote yes. I very much welcome the 2014 timeline, which was of course the Scottish Government’s favoured position, and the extension of the franchise to 16 and 17-year-olds—also a Scottish Government position.

Does the Minister agree that the most exciting part of this is that, as he said, the Scottish Parliament will be the final determiner of the question? It has the only mandate of any Parliament in the UK to set a question on independence for Scotland.

[David Mundell]

I am surprised that the hon. Gentleman did not tell us that the Scottish National party wanted only one question, as well.

I do not agree with the hon. Gentleman, because his question reveals his party’s obsession with process. What is important, ultimately, is not who legislates on the referendum but the decision that the people of Scotland take. They will have the opportunity to end the uncertainty and vote to remain part of the United Kingdom.

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

May I offer my unqualified endorsement of the statement made so eloquently, if I may say so, by my right hon. Friend?

Does my right hon. Friend hope, like me, that the shadow boxing will now come to an end, along with the Scottish National party’s uncharacteristic reticence, demonstrated again this afternoon, to tell the people of Scotland precisely what its proposals for independence are? May I offer him a crumb or two of comfort? If he will forgive a second sporting metaphor, the Scottish Liberal Democrats will be first off their marks on Wednesday, when we publish our proposals for home rule for Scotland within the United Kingdom.

[Hon. Members]

When?

[David Mundell]

I had understood that the Liberals brought forward proposals for home rule for Scotland 100 years ago, but I am sure that we look forward to the right hon. and learned Gentleman’s contribution to the debate. He has made a distinguished contribution to the discussion of Scotland’s constitutional future over the years. I think the people of Scotland will indeed be pleased that we can move on from a debate and discussion that have been purely about process to ones on the real issues. The Prime Minister and those campaigning in the Better Together organisation have committed to setting out a positive vision for the United Kingdom, with Scotland playing a part in it. It is incumbent on those arguing for independence for Scotland finally to answer the questions and set out what independence would really mean.

[Mr Jack Straw (Blackburn) (Lab)]

The last time the Electoral Commission considered whether 16 and 17-year-olds should vote, it found that 78% of the British public, including the Scots, were against the change. Whatever opinion Members and the public may hold on the issue, why does not the Minister acknowledge that the question of the franchise, for referendums as well as for elections, is plainly a matter reserved by law to the United Kingdom Parliament, not to any devolved Administration? Given the questions that my hon. Friend the Member for Glasgow East (Margaret Curran) asked about the need for further scrutiny in the House, how will the House be able to have a prior vote on whether there can be votes at 16 or 17 in any type of poll across the whole Union?

[David Mundell]

I assure the right hon. Gentleman that previous legislation setting out referendums has set the franchise, and that the procedure will be no different in the Scottish Parliament setting out the terms of this referendum and the franchise. All Members of the House will have an opportunity to vote on the section 30 order that will pass powers for holding the referendum to the Scottish Parliament, and the opportunity for a robust debate. All those who are concerned about 16 and 17-year-olds being give the vote in Scotland should make that argument now, and demonstrate the complexities and difficulties of the proposals brought forward by the SNP.

[Mr John Redwood (Wokingham) (Con)]

Who in the Government speaks for England on these matters, and when will English MPs be able to settle English issues without outside help in this Parliament?

[David Mundell]

As I am sure my right hon. Friend is aware, the Government have established a commission that is looking at the so-called West Lothian question and will deal with the issue he raises about the governance of England within a range of devolved settlements for the other nations of the United Kingdom.

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

Has anyone the responsibility—if so, who?—of ensuring that when this debate is reported over two years, people in Scotland can expect impartiality, particularly in broadcasting? That has not always been the case.

[David Mundell]

I am aware from contributions to debates about television in Scotland that people feel strongly about bias in some elements of the media. I assure the right hon. Gentleman that the normal rules he would expect to apply within an election period will apply during the referendum process.

[Mrs Eleanor Laing (Epping Forest) (Con)]

Does the Minister appreciate that although most Members of this House have grave reservations about the peculiarities of the proposed franchise, there is also wide agreement that the most important thing about the compromise reached by the Prime Minister is for there to be one decisive question on the ballot paper? The future of Scotland as part of the United Kingdom—to the benefit of everyone in every part of the United Kingdom—should be decided once and for all.

[David Mundell]

I absolutely agree with my hon. Friend. Throughout these discussions, the Government’s position has been that there should be a single question—in or out of the United Kingdom—and that in the course of that debate, independence and devolution should not be conflated.

[Anas Sarwar (Glasgow Central) (Lab)]

I welcome the Minister’s statement. On the coming debate, and particularly the scope of the Electoral Commission, we have seen in the First Minister’s press conference and televised statements from his Ministers, that they are already rowing back from the role of the Electoral Commission. Let us not be naive about the role of the Scottish Parliament. We are talking about a man who thinks he is Scotland and speaks for everyone in Scotland. What processes will ensure that the recommendations of the Electoral Commission are put into force?

[David Mundell]

I certainly agree with the hon. Gentleman that Mr Salmond does not speak for Scotland, no matter how much he seeks to hold himself out as doing so. I do not, however, agree that Mr Salmond or the Scottish Parliament can blithely ignore the recommendations of the Electoral Commission. The commission’s recommendations have never previously been ignored by a Government, and it would be a serious political matter were that to happen. I am sure that the hon. Gentleman, and others on his side of the House, would waste no time in drawing that to the attention of the Scottish people.

[Sir Malcolm Bruce (Gordon) (LD)]

I welcome the Minister’s statement. The exchanges we have already heard demonstrate that Members of this House and the Scottish Parliament have a responsibility to ensure that the outcome of the referendum commands the full confidence of the people of Scotland, and that involves responsibility on both sides. Does the Minister agree that all parts of the United Kingdom have a distinctive contribution to make, that the whole is greater than the sum of its parts, and that we would all be diminished were we to break up this 300-year Union?

[David Mundell]

I absolutely agree with my right hon. Friend that we are better together and that the whole is greater than the sum of its parts, and that will be a significant part of the debate as we proceed. I expect people from all parts of the United Kingdom—not just within Scotland although the campaign will be led by Scots within Scotland—to make the case for the continuance of the United Kingdom.

[Ann McKechin (Glasgow North) (Lab)]

Although there are obviously differing views about extending the franchise to 16 and 17-year-olds, I hope the Minister will agree that, as this matter proceeds, it is important that young people in Scotland are treated with respect and not cynically. What assurances does he have that those 16 and 17-year-olds will be equally as able to register as any other adult, and to vote in this important poll that will determine their future?

[David Mundell]

As the hon. Lady knows, that is one of the significant complexities that the Scottish Government will face if they bring forward their proposals to allow 16 and 17-year-olds to vote. If they use the current electoral register, they will essentially allow only those who are16 years and 10 months old to vote. If they wish all 16 and 17-year-olds to vote, they will have to create their own register, and that carries with it significant complexities.

[Mary Macleod (Brentford and Isleworth) (Con)]

May I congratulate my right hon. Friend the Minister, as well as the Prime Minister, on reaching this agreement with the First Minister in Scotland? Does the Minister agree that we are far better together as the United Kingdom, and that it is now time to determine the real debate in full and look at the dubious suggestions from the SNP about defence, EU membership and currency?

[David Mundell]

My hon. Friend does the SNP extra credit by suggesting that its members have views on the issues she has set out. In recent weeks and months it has become apparent that despite campaigning for independence over many years—indeed decades—the SNP has no clear idea what an independent Scotland would look like. Now that the process issues are out of the way, it will be incumbent on the SNP to come forward with specific proposals for what an independent Scotland would look like.

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

Will the Minister ensure that Scottish members of the armed forces and their families who find themselves based outwith Scotland during the referendum will be entitled to vote?

[David Mundell]

Scottish members of the armed forces and their families will be entitled to vote under the normal rules that apply to members of the armed forces.

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

I wholeheartedly concur with comments made by the right hon. Member for Blackburn (Mr Straw). By yoking together two issues, we are causing ourselves a huge difficulty. Some of us may feel that voting for a section 30 order means that we are endorsing the vote for 16 to 17-year-olds. Should we ever vote on a referendum about the EU, for example, it would be impossible to imagine that we could deny the vote to 16 and 17-year-olds in the UK. We must insist that 16 and 17-year-olds either have the vote wholeheartedly, or—as I believe—that they should not have the vote on this major constitutional issue.

[David Mundell]

I am afraid I cannot agree with how my hon. Friend has brought those two issues together. The UK Parliament will determine the franchise for any referendum determined by it; the Scottish Parliament will determine the franchise for a referendum devolved to it. The Scottish Parliament already has the power to set the age for any election for which it has devolved responsibility, and has used it for health board and crofting commission elections. The precedent for 16 and 17-year-olds voting has been set.

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

As a supporter of votes at 16, I welcome the Scottish Parliament extending the franchise to 16-year-olds. Far from seeing that as a dangerous precedent, why will the Government not seize the opportunity to consult, debate and vote on widening the franchise to 16-year-olds in all UK elections, including referendums and local and national elections?

[David Mundell]

In simple terms, the Government will not do that because we do not support 16 and 17-year-olds voting in such elections.

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

I welcome the agreement, which gives us a single, legally based question that can settle the future for Scotland once and for all. However, will the Minister reinforce the message that any Parliament or Government that chooses to ignore the advice of the Electoral Commission will be judged by the public for what it has done?

[David Mundell]

I absolutely agree with my hon. Friend. I have absolute faith that the people of Scotland will not be duped by chicanery or trickery by the Scottish Government or anybody else in making this most important decision on the future of Scotland. If any Member of Parliament believes that any party in the referendum is guilty of such a charge, it is their job to hold it to account in debate, whether in the UK Parliament or the Scottish Parliament. We can be confident, because I can see no reason why the Scottish Government, whatever their spin doctors say, would ignore the Electoral Commission’s recommendations, given that no other Government have done so before.

[Mr Jamie Reed (Copeland) (Lab)]

I welcome the Minister’s statement. In fetching forward a detailed analysis of what the proposal means for the people of Scotland and England, will the Government commit themselves to an analysis of the volumes of radioactive materials from Scotland that are stored in England? How much it will cost to remove them to Scotland, where in Scotland will they be buried, and who will be responsible for them in the long term? He will be aware that foreign waste cannot be disposed of in Britain.

[David Mundell]

The hon. Gentleman makes a good point, but it is for those proposing change to say how they would deal with it. The Government do not wish to break up Britain or want a change to the existing arrangements for the storage of nuclear waste. Those who want to break up Britain must set out clearly how that would be done and what it would cost.

[Bob Stewart (Beckenham) (Con)]

Sadly, I am not 16 or 17—I am a little bit older—but as an Anglo-Scot, I feel slightly disfranchised, because the decision on my father’s homeland will be made without me having one bit of say in the matter. I request, please, that we, the Scots of the dispersion, have a say in what happens to our ancient homeland.

[David Mundell]

I am sure my hon. Friend will have the opportunity to have a say—he can go to Scotland and set forth his passionate views on Scotland remaining in the UK. The issue he raises has been raised legitimately by many Scots in other parts of the UK, who ask why they should not have a vote. The Government’s position has always been that those in the part of the UK that wishes to leave the UK should have a say in determining whether it leaves or not. That is in accordance with international protocol on the separation of nations and was also the franchise that determined devolution to Scotland in 1997.

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

Today has been an utterly fantastic day. The Edinburgh agreement is the next stage in our nation’s story. I cannot wait to get out and put a compelling and positive case for my nation’s independence. The Minister says he wants a real choice and different visions. In November next year, the Scottish Government will release a full and comprehensive prospectus on what an independent Scotland will look like. The no parties agree on so much now—on anti-universality, means-testing and an austerity programme—but when will they get together and let us know what the no proposition for the referendum will be?

[David Mundell]

For one moment, I thought the hon. Gentleman said the Scottish Government would announce their proposals this November, but in fact he said that they will do so in November next year. For a party that has campaigned for decades for independence, the fact that you have no proposals on the table on what an independent Scotland would look like reflects the lack of thought you have given to the issue. That is unbecoming of you and unworthy of the people of Scotland.

[Mr Speaker]

Order. As far as I am aware, I have done nothing unbecoming or unworthy, but it is true that I have given no particular thought to this matter, and that I have no proposals to make on it.

[Sarah Newton (Truro and Falmouth) (Con)]

Does my right hon. Friend agree that home rule for Scotland is available now within the Union, as it is for any part of this country, as a result of a range of Government measures, most notably the Localism Act 2011?

[David Mundell]

First, may I say that I have always found you most becoming, Mr Speaker? I apologise for suggesting otherwise.

My hon. Friend makes an important point. Very significant additional powers are about to come to Scotland and the Scottish Parliament through the Scotland Act 2012, which will involve the most significant transfer of financial powers since the Acts of Union 300 years ago. The Scottish Government and Parliament focus should be on the implementation of those powers to the benefit of the people of Scotland.

[Gemma Doyle (West Dunbartonshire) (Lab/Co-op)]

No sooner was the ink on the agreement than Scottish Government Ministers were out dismissing the role of the Electoral Commission in the process. May I urge the Minister against complacency? Anyone involved in Scottish politics knows it is perfectly plausible that President Alex will ignore the Electoral Commission and set his own biased question. Will the Minister therefore look very carefully at the issue of the question?

[David Mundell]

The Scottish Government will propose the wording of a question in its referendum Bill. It will then be open to anyone, including the leaders of other political parties in Scotland, who have engaged in an extensive exercise, to allow the Electoral Commission to conduct the sort of scrutiny it has conducted in the past in relation to, for example, the alternative vote UK referendum. I remain confident that the people of Scotland will not simply be duped into breaking Britain up because of trickery or other such behaviour by any party in the debate. It is for anybody who suspects such behaviour or who is dissatisfied with a Scottish Parliament rejection of the Electoral Commission report, which I still consider unlikely, to make that case within the political arena.

[David Rutley (Macclesfield) (Con)]

I welcome a fair referendum and share my right hon. Friend’s view that the continuation of the Union is an important priority. Does he agree that the Union should continue on a basis that is fair to all the parties involved in it?

[David Mundell]

I absolutely agree, but I think that the first and overriding consideration is to resolve whether Scotland wishes to remain part of the United Kingdom and put that issue to bed. No doubt in future years there will continue to be a debate about the governance of the whole of the United Kingdom, in which we in this Parliament and those in the Scottish Parliament will be able to play a part.

[Mrs Anne McGuire (Stirling) (Lab)]

Harking back to the question from my hon. Friend the Member for Glasgow North (Ann McKechin) and the Minister’s answer, surely the UK Government would bear some responsibility if the Scottish Parliament and Government want all 16 and 17-year-olds to have the vote? It frankly is not good enough for the Minister just to say that it is a complex issue. He should be looking at ways of encouraging the registration of all of those 16-year-olds so that we have registration not by voluntary activity but in the same way as every other voter is registered.

[David Mundell]

I would encourage everyone to register for this most important vote. The point that I made to the hon. Member for Glasgow North (Ann McKechin) is that the Scottish Government will have two options: to use the existing register on which those people who are to be 18 within the electoral cycle covered by that register may vote, or to create a new register. Whichever option the Scottish Parliament chooses, we will urge all those eligible to vote to register to do so.

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

I congratulate the Prime Minister, the Secretary of State and the Minister on reaching this important agreement. Before people come to vote in the referendum, it is important that they know what they are voting for. When the SNP eventually, in another 13 months, gets round to working out its proposals for an independent Scotland, will the Government put the proposals to independent scrutiny so that people can vote knowing what the proposals would mean?

[David Mundell]

As I indicated in my statement, the Government are already objectively carrying out extensive analysis that will clearly set out the benefits of the United Kingdom, and of Scotland playing a part in it. The people of Scotland will be able to contrast that with the lack of clarity and of any substantive proposals, and the uncertainty, coming from the SNP.

[Ian Murray (Edinburgh South) (Lab)]

I welcome the statement, but may I press the Minister yet again on what mechanism is in place for this House to have a view if the Scottish Government do not take the advice of the Electoral Commission—as they have already indicated will be the case?

[David Mundell]

The opportunity for Members in relation to the issue as a whole will be in the debate on the Order, and all hon. Members will have a vote on it. If the Electoral Commission’s proposals were to be rejected—and there has been no formal statement from the Scottish Government to that effect—the Scottish Government would have to be held to account for that by the people of Scotland, by politicians in this House and by the hon. Gentleman’s counterparts in the Scottish Parliament. I have faith in the people of Scotland. If they see the Scottish Government flagrantly rejecting proposals from the Electoral Commission, or any suggestion of trickery in the question, they will not look well on the perpetrators.

[David Mowat (Warrington South) (Con)]

We seem to have used the piecemeal extension of the franchise as part of a negotiating process. What concerns me is that 16-year-olds will vote on the sovereignty of their country, but six months later they will be unable to vote in council elections. How can that be right or coherent?

[David Mundell]

The Government do not support the extension of the franchise to 16 and 17-year-olds, and indeed our Conservative colleagues will argue against that proposal when it comes before the Scottish Parliament. It will be for the Scottish Government to make the case for 16 and 17-year-olds voting in the referendum. That debate needs now to go to Scotland, to the people of Scotland and parliamentarians in the Scottish Parliament, so that there can be a full and proper debate. I remain hopeful that the Scottish Parliament will fully scrutinise any such proposals and, if they are defective, reject them.

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

The suffragettes did not campaign for the vote on a one-off basis or for a particular part of the United Kingdom. This proposal does a disservice to young people throughout the United Kingdom. Is it not irresponsible of the Government to pass responsibility for the franchise on, when they are clearly aware of major technical difficulties? Should not these be sorted out at a UK level? What would the costs be to the Scottish taxpayer if a separate register were set up?

[David Mundell]

The hon. Lady’s final question is one for the Scottish Government and to be asked within the Scottish Parliament. Her colleagues there must hold the Scottish Government to account in relation to any proposals that they make on this referendum. I happen to agree with her that it is not right that there should be different franchises for different elections, but that is a point to be made in the debate in Scotland.

[John Stevenson (Carlisle) (Con)]

Will the Minister confirm that the Electoral Commission will be involved in the setting of the date of the referendum? For example, I would not like to see it held during the autumn school holidays in Scotland.

[David Mundell]

The decision on the date for the referendum will be one for the Scottish Parliament.

[Pamela Nash (Airdrie and Shotts) (Lab)]

The Minister has made it clear today that it would be unacceptable for the Scottish Government to ignore the advice of the Electoral Commission on the wording of the question. Why then are there no clear consequences for this eventuality in the agreement?

[David Mundell]

We are following exactly the same process and procedures that were followed in relation to the alternative vote referendum that took place across the United Kingdom, in which the Electoral Commission reported to this Parliament, which then decided whether it would follow that advice.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

The hon. Member for Perth and North Perthshire (Pete Wishart) said that he could not wait to get out there and debate this issue. Of course, SNP Members have waited and waited. I congratulate my hon. Friend the Minister and the Prime Minister on the patience and quiet diplomacy that has flushed these people out. Now they can wriggle on the franchise, they can wriggle on the question, and they can even wriggle on the date they hold it, but the Scottish people will finally have a chance to examine their arguments and put them where they belong—in the bin—when they reject this outrageous attempt to split up this country.

[David Mundell]

I thank my hon. Friend for that robust contribution. He is right. The people of Scotland will see through the lack of detailed policy from the Scottish National party on what an independent Scotland would be like. As I have said in response to other questions, they will also see through any trickery or chicanery attempted in the setting of the question, the franchise or the spending limits.

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

On the question of 16 and 17-year-olds, if—as is possible—not every single person of that age gets the opportunity to vote, there could be a legal challenge against that decision. What would happen to the referendum in those circumstances?

[David Mundell]

I am sure that the Scottish Government will want to ensure that whatever proposals they make to allow 16 and 17-year-olds to vote in the referendum are legally watertight.

[Mike Crockart (Edinburgh West) (LD)]

This is indeed a welcome settling of process issues, and it is very welcome that we can now move back to the real debate. As has already been said, next year marks 100 years since the passing of the Second Reading of the Home Rule Bill in this very place. We on these Benches have been honing our alternative for 100 years: will the Minister join me in urging the other Unionist and independence parties to do the same?

[David Mundell]

I respect the long record of the Liberal Democrats and their predecessors in pursuing these issues, and no doubt, as we approach the 2015 general election, they will set out a range of proposals for the people of Scotland. It is important now, however, that we settle the question of whether Scotland remains part of the United Kingdom or becomes a separate nation state, and we can achieve that with a single-question referendum.

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

The Minister referred to a legal, fair and decisive referendum. From what we have heard today, it might well be legal, but does he not accept that the question of fairness and, therefore, of decisiveness rests on the question? His inability this evening to explain what the consequences would be if the Scottish Government decided, as they indicated today they might, to ignore the advice of the Electoral Commission leaves the whole process in question.

[David Mundell]

I do not agree with the hon. Gentleman. The consequences for the Scottish Government of ignoring the Electoral Commission with the people of Scotland would be significant, and would diminish their argument in the process. I have confidence in the ability of the people of Scotland to see through it.

[Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)]

My daughter, Erin, turned 18 last week, so she will definitely have the vote—and she has already assured me that she will vote to remain in the United Kingdom, because she knows that we are better together. I remind the Minister that the SNP had the opportunity to extend the franchise in the 2012 local government elections, but chose not to do so. Is the Government’s confidence in ceding this territory in the negotiations based on the fact that it will be impossible to implement in the time scale envisaged?

[David Mundell]

I welcome the hon. Gentleman’s daughter’s support for Scotland remaining part of the United Kingdom. She reflects the views of many 16, 17 and, indeed, 18-year-olds, as demonstrated by the polls in Scotland. As the process continues, it will be important that we take forward the issues and debates in the Scottish Parliament and that the people of Scotland are engaged.

[Mr Ian Davidson (Glasgow South West) (Lab/Co-op)]

I welcome the fact that an agreement has been reached and that I will have the opportunity finally to vote against separation, but why do we have to wait so long? Why the delay, why the dither? Is it not because the coalition Ministers on the one hand and the SNP on the other have been meeting in secret and not taking account of the views of the vast majority of the Scottish people? Our consultation here at Westminster said that we wanted the referendum to be soon, and the Scottish Government’s consultation said—well, we do not know what it said, because they have not published it. The deal has been reached before the consultation has been published. What scrutiny will there be of the detail of the arrangement? For example, will tax exiles have the right to vote? Are we going to have foreign money coming in? Will there be an opportunity to amend not the broad sweep but the detail of these proposals? And what sanctions will there be if somebody breaks an agreement that was reached in good faith?

[Mr Speaker]

The Chairman of the Scottish Affairs Committee has posed at least four questions, but I know that the ingenuity of the Minister will enable him to reply with a single response.

[David Mundell]

I expect that both I and the Secretary of State will appear before the hon. Gentleman’s Committee to answer those questions in detail.

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

I have great faith in the Scottish people and in 16 and 17-year-olds—we underestimate them at our peril—but I have absolutely no faith in this coalition or the Executive north of the border. These 16 and 17-year-olds will be allowed to vote on Scottish separation, yet, six or seven months later, they will not be allowed to vote in a general election. How would the Minister vote if he was one of these 16 or 17-year-olds? Answer that!

[David Mundell]

First, I refer the hon. Gentleman to polling in Scotland, which indicates that 16 and 17-year-olds do not support independence, and secondly I urge him to take his argument to Scotland—to the Scottish Parliament and his MSP colleagues there—to make that robust case.

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

The Minister has heard from my hon. Friend the Member for Glasgow North (Ann McKechin), my right hon. Friend the Member for Stirling (Mrs McGuire) and my hon. Friends the Members for Central Ayrshire (Mr Donohoe) and for Ayr, Carrick and Cumnock (Sandra Osborne) about the issue of some 16 and 17-year-olds being disfranchised as a result of not being on the register. I am positive that, during the discussions that he and his colleagues have had, someone somewhere might have raised the issue of a legal challenge. Does he have any idea how much of a delay there might be, if there is a legal challenge?

[David Mundell]

First, my experience of the Labour party in Dumfries and Galloway is that it is very good at getting people on to the electoral register—and I am sure it will be so again in getting 16 and 17-year-olds registered. The Scottish Government will have to come forward with legally watertight proposals; otherwise, they will be subject to challenge. As we have heard, they could conduct the referendum on the basis of so-called attainers, by which is meant people who will turn 18 within the cycle of the electoral register. It is clear that that could be done legally, but the downside, from the Scottish Government’s point of view, is that not all 16 and 17-year-olds would be able to vote as not all of them would be on the register, because of that age limitation. The other option for them is to create their own register. But were they to do that they would have to be sure that it was legally watertight.

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

Trust is good, but verification is always much better, so will the Minister not accept that the only way to ensure that the Electoral Commission’s recommendations will be complied with is to bring the referendum question back to the House for a vote?

[David Mundell]

I do not agree with the hon. Lady’s proposition. The Government’s position approaching the discussions on the agreement was that the referendum should be made in Scotland and that the necessary powers should be devolved to the Scottish Parliament. The Scottish Government would encounter significant political difficulties, were they to become the first Government in the history of the UK to ignore the views of the Electoral Commission.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

Why would it not be possible for the voter registration form in 2013 to ask for the details of anyone who would be over 16 on the date of the referendum? Is that too obvious, or is it a simple solution?

[David Mundell]

That power has not been devolved to the Scottish Parliament in terms of the order agreed today.

[Katy Clark (North Ayrshire and Arran) (Lab)]

One of the complexities regarding 16 and 17-year-olds concerns young people not put on the register owing to child protection issues. If the Government think that the question or any other aspect of the referendum is unfair, will they take action?

[David Mundell]

The hon. Lady’s colleagues in the Scottish Parliament will have the opportunity to highlight that point, and of course if any proposals are not in accordance with the legislative framework for other issues, they cannot stand.

[Jim McGovern (Dundee West) (Lab)]

Given the responses to at least three of my hon. Friends’ questions about the question, it would appear that the measures outlined in the memorandum of understanding lead the UK Government to believe that a fair and clear question will be presented to the people of Scotland, but obviously some of us on the Opposition Benches have our doubts. If a dubious question is put, will it be open to legal challenge?

[David Mundell]

Clearly, all Acts of the Scottish Parliament can be subjected to legal challenge. It is quite clear, however, that were the Scottish Government to reject the views of the Electoral Commission concerning the question—the latter having carried out the thorough scrutiny it has done for previous referendum questions—they would pay a high political price, and the hon. Gentleman and others, in this House and the Scottish Parliament, would waste no time in pointing that out to the Scottish people.

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

I wish briefly to return to the issue of the franchise. In the detailed discussions that have taken place, was any account taken of the experience in Scotland of the health board elections in relation to under-18s? Does the Minister agree that it is incumbent on the Scottish Government to say exactly what the franchise would be—whether it would include all 16 and 17-year-olds or be done on the basis of the current electoral register?

[David Mundell]

I absolutely agree with the hon. Lady: it is now incumbent on the Scottish Government to come forward with their proposals. It is also incumbent on those who have a view on the matter to take the debate to Scotland and the Scottish Parliament. I hope that this issue will show the Scottish Parliament at its best, scrutinising in great detail the proposals that are brought forward and giving a fair and objective assessment of them.

[Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)]

The Electoral Commission is a respected United Kingdom institution. The difficulty is that the Scottish National party does not have a great track record of respecting UK institutions—we think most recently of the attempt to brand our Olympic athletes as “Scolympians”, which I am delighted to say failed dismally. Can the Minister give an example of where the Scottish Government have respected a fully UK institution?

[David Mundell]

The Scottish Government respect UK institutions in their day-to-day working with the UK Government. They do not always want to acknowledge that publicly, but on a day-to-day basis the Scottish and UK Governments work closely on many aspects of devolved and reserved issues. However, the hon. Gentleman makes an excellent point. When the First Minister of Scotland tried to designate part of Team GB as “Scolympians”, he was laughed at by the people of Scotland. If he tries in any way to gerrymander the referendum, the people of Scotland will see through it. I trust them to do that.

Infrastructure (Financial Assistance) Bill

Monday 15th October 2012 Commons Chamber

Considered in Committee

[Dawn Primarolo in the Chair]

Clause 1

Expenditure on financial assistance for the provision of infrastructure

18:52

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

I beg to move amendment 11, page 1, line 6, after ‘infrastructure’, insert ‘within the United Kingdom’.

[The Second Deputy Chairman of Ways and Means (Dawn Primarolo)]

With this it will be convenient to discuss the following:

Amendment 1, page 1, line 7, leave out ‘includes’ and insert ‘means’.

Amendment 9, page 1, line 11, after ‘health’, insert ‘childcare’.

Amendment 4, page 1, line 13, leave out paragraph (e).

Amendment 2, page 1, line 13, after ‘housing’, insert ‘, the function of which has a national significance.’.

Amendment 10, in clause 1, page 1, line 13, at end insert—

‘(2A) “Infrastructure” excludes the expansion of Heathrow airport before May 2015.’.

[Chris Leslie]

At near enough to 7 o’clock, I am glad that we finally turn our attention to the Infrastructure (Financial Assistance) Bill. Anybody following these proceedings might be astonished that we have been allowed just over two hours for the Committee stage. In our view it is unsatisfactory to leave the rules governing £50 billion of public expenditure to such scant and inadequate scrutiny. Although we do not necessarily disagree with the broad principles behind the Bill, that does not mean that we should fall short in our duty as parliamentarians to analyse, consider and improve the details of the legislation. Ministers cannot point to the House of Lords as the place where the Bill can be improved and amended if we run out of time for consideration in Committee. I think the last time the Lords sat in Committee on a money Bill was in 1995, when it considered the European Communities (Finance) Bill. This two-hour period is therefore the only opportunity we will get to scrutinise the particulars of the legislation; hence the amendments that are before us.

I want to talk to amendments 11 and 9 in this first group. Amendment 11 would make it clear that the substantive powers in the Bill, which give Ministers the ability to grant financial assistance to any persons, should be used for infrastructure in the United Kingdom, for essentially this reason: we believe that we should focus all our efforts on the domestic infrastructure needs of our country. That is why we think the Bill, if it can bring benefits, needs to focus very much on the benefits of infrastructure and bringing forward capital schemes here at home. Hon. Members will be aware that the UK has been falling behind quite considerably in the past couple of years in terms of infrastructure and capital investment schemes. Only today in the Financial Times we read about the Construction Products Association warning that

“infrastructure is in free-fall,”

and that it expects spending to fall by 13% in 2012 compared with the last calendar year, despite the hollow words of the Chancellor of the Exchequer. Noble Francis, economics director at the CPA, said:

“We are getting to the stage where the government just can’t make more announcements with nothing happening. At some stage they are going to have to launch some capital investment that sees work happening on the ground. This can be done quickly, easily and cheaply speeding up work on the repair and maintenance of roads, schools, hospitals and housing.”

The article points out that road construction, to take one example of infrastructure investment,

“is suffering in particular, with the CPA projecting a decline of 40 per cent this year and 5 per cent next year.”

[Stephen Timms (East Ham) (Lab)]

I am listening to my hon. Friend’s speech with a lot of interest. I wonder whether he saw the recent CBI survey and the comments by its director general, John Cridland, who described it as

“a wake-up call that businesses in Britain are looking for action”—

on infrastructure—

“and we haven’t seen any yet.”

[Chris Leslie]

Alarm bells are ringing from a number of eminent institutions across the country, and they are not those that one might necessarily feel were natural allies of Her Majesty’s loyal Opposition. Nevertheless, they are saying exactly the same thing as us: when will the Treasury wake up and realise that the Government’s strategy on infrastructure—this laissez-faire approach—is singularly failing? Rather than driving new schemes forward, with their Bill and the rest of their strategy, the Government seem to be waiting for others to come forward with various schemes; they seem to be saying, “Please will you dream up some ideas?” They are hoping that something will turn up, but that is an approach characterised by drift rather than leadership when it comes to capital investment.

[Mr David Anderson (Blaydon) (Lab)]

Is the situation not worse than that? In the early days of this Government, one of the first things they did was stop the Building Schools for the Future programme, which had been clarified and was seen as the way forward to develop new schools. There were projects involving five schools in my constituency, which would have put £80 million into the local economy, with the money spent on the private sector and building schools for those children. Those projects were frozen—the same thing happened across the country—but if they had gone ahead, we would now be in a much better position.

[Chris Leslie]

It is the long-term cost to public service quality and communities up and down the country that is the most frustrating thing about the Government’s approach. They have scrapped Building Schools for the Future. Who knows? Perhaps in a couple of years’ time they will realise the error of their ways and devise a “Funding building for schools” scheme, or cobble together some other name. It is no wonder that we are in this prolonged double-dip recession, with the Government pulling the rug from underneath the economy in the way that they have, chopping capital infrastructure investment away at its knees. It is no wonder that, for example, the construction sector has shrunk by, I think, 10% in the past 12 months. Nor is it any wonder that the “State of Trade” survey published by the Federation of Master Builders today—apparently it is the only survey of its kind looking at SME construction activity—says that 39% of respondents reported a decline in private new house building workloads in the third quarter of this year or that 40% predicted a further decline in the next quarter.

The Government’s record on capital investment and their approach to infrastructure are lamentable. It has never been clearer that they should be focusing squarely on the needs of infrastructure within the United Kingdom; hence amendment 11. Contrary to the claims of the Government—we will probably hear this from the Minister—figures from the Office for Budget Responsibility show that the Government will have spent £6.6 billion less over the three-year period from the spending review than Labour had planned, with budgets for schools, such as BSF, and affordable housing hit especially hard.

19:00

[Stephen Timms]

My hon. Friend has talked about organisations that are not necessarily natural supporters of Her Majesty’s loyal Opposition. Has he seen the recent comments from the Country Land and Business Association, which described the superfast broadband situation as “lamentable”—precisely the same word that he has just used? The association stated:

“It is becoming clear that the Government’s strategy will not meet the target date of 2015…There is no clear mechanism to put in place the universal service commitment.”

Is not this another example of the economy crying out for investment that is simply not being delivered?

[Chris Leslie]

My right hon. Friend makes an important point that emphasises the argument that we are making. This is not simply a question of the levels of capital investment; it is also a question of competence. It is also about the relentless need to focus on delivery, and on the detail behind the delivery. I just do not see the Treasury, as currently comprised, being capable of getting to grips with the granularity of some of the obstacles that face capital schemes. It is no wonder that we are falling further and further behind. The Treasury seems to see an obstacle and be deterred by it, rather than trying to tackle it and move past it.

[Mr John Redwood (Wokingham) (Con)]

We are being invited to agree to a potential £50 billion commitment. Do the Opposition have any thoughts on the pace of that kind of expenditure? What levels would they recommend for this year, next year and the following year?

[Chris Leslie]

It is difficult to say, when looking at a guarantee scheme or underwriting scheme, because certain things are not wholly in the control of Ministers. They are putting the guarantee out there and waiting for organisations in the private sector or elsewhere to come forward and bid for the resource. It is a bit like pushing against a piece of string; it is impossible to know what the demand will be. We do not rule out the possibility of the proposal being of benefit—of course it could be—but it is impossible to know at this stage. We are holding up a finger to test the direction of the wind. There are no time scales in the Bill, and the explanatory notes do not add any information in that regard. We want to know the judgment of the studied intellects in the Treasury.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

My hon. Friend mentioned the downturn in the house building industry. In my constituency, the total number of new house builds in the last quarter was just 10, and that is in a city whose population is growing. Does he accept that, in addition to the immediate difficulties that the construction industry is experiencing, companies that go bust and firms that close down cannot suddenly spring back into action when the economy changes? This is another reason why we need the measures that he is outlining, and that the Government have not yet put into operation.

[Chris Leslie]

That loss of productive capacity is another example of the permanent damage caused by recession, resulting in an inability to take advantage of the opportunities that present themselves when a recovery occurs. The International Monetary Fund released figures only last week to illustrate the damage being done by the recession to our ability to fulfil such expectations. In my city of Nottingham, not a single new affordable social house has been constructed in the past 12 months. Is that because there is no demand? Absolutely not. We have more than 12,000 people on waiting lists for decent homes. That applies in many other areas of the country as well, including Greenwich.

[Mr Nick Raynsford (Greenwich and Woolwich) (Lab)]

My hon. Friend makes an extremely valid point about housing, but he understates the case. Infrastructure was the one sector of the construction industry that survived the early period of the recession relatively well. Indeed, by 2009, expenditure on infrastructure stood at £11.6 billion, which was the highest real-terms level for about two decades. That has now slipped away badly, because of the failure of the current Government to maintain infrastructure investment. That is the charge against them: they have allowed activity that was helping to counter the recession to be lost, and the sectors of the industry that are concerned with infrastructure are now as alarmed as the housing sector and all the others that have suffered so badly in the recession.

[Chris Leslie]

That is a pertinent point. The Government seem oblivious to the thoughtful concerns being expressed by industry practitioners about the damage that is being done. Their ideological fixation with austerity has led them to a position in which they have completely pulled the rug out from underneath the economy, and we are still only at an early stage of being able to calculate the damage.

[Barry Gardiner (Brent North) (Lab)]

Will my hon. Friend answer a question on amendment 11, which proposes to add the words “within the United Kingdom” to clause 1(1)? One of the most important areas of infrastructure over the next decade will be energy, and the infrastructure required to meet our energy need will include interconnectors for electricity and gas pipelines that will come across Europe from the Caucasus. I presume that the Bill, as it stands, could incentivise investment in interconnectors and gas pipelines, but would it still be able to do so if the amendment were agreed to, even though parts of the pipelines would obviously be within the United Kingdom?

[Chris Leslie]

It is important to recognise that we want the benefits of any financial assistance to be felt in the UK economy. I shall deal with the details of the amendments in a moment. We believe that the scheme should focus on stimulating growth within these shores, and prioritising resources for infrastructure within the United Kingdom is the right approach. The Minister will undoubtedly point out that, as part of the guarantees under the scheme that the Government announced in July, a £5 billion export refinancing facility was introduced to underwrite the lending commitments of foreign buyers of UK exports. Of course we believe that export credit guarantees can be legitimate and helpful to construction exports, but in times of UK recession, our priorities should lie squarely here at home.

Incidentally, if there is such a great demand for the services of the Export Credits Guarantee Department—which is part of the Department for Business, Innovation and Skills—why does it appear to have underspent its existing budget in the past year? That does not suggest that there is a need to divert resources from domestic infrastructure into bankrolling foreign firms any more than is currently the case. The latest research shows that infrastructure spending within the UK will be of far greater benefit to our economy.

Indeed, the IMF had discussions last week about the multipliers. I do not want to go into too much technical detail, but the Office for Budget Responsibility used a fiscal multiplier of 0.5, which meant that Ministers thought that each pound they cut from public expenditure and capital investment would reduce economic output by only 50p. However, after examining the records of many countries that have embraced austerity since the financial crisis, the IMF reckons that the true multiplier is between 0.9 and 1.7. That has led the TUC to reveal that if the real multiplier is 1.3—somewhere in the middle of the IMF’s range—the OBR has underestimated the impact of the cuts by a cumulative £76 billion, more than 8% of gross domestic product, over five years. Instead of shaving less than 1% off economic growth during this financial year, austerity has potentially depressed it by more than 2%, which helps to explain why the economy has plunged into this double-dip recession. It is self-evident that providing financial assistance to infrastructure projects in the UK will provide a much greater stimulus to the British economy than giving financial assistance to projects abroad. Projects in the UK will boost employment in Britain; providing assistance to overseas projects will not.

Conservative Governments have a dubious record when it comes to underwriting foreign construction schemes. I am referring not only to the most recent, and much vaunted, export enterprise finance guarantee scheme, which assisted only five firms and has now folded because it was such a flop. I am also thinking of historic occasions such as that relating to the Pergau dam in Malaysia, which involved a too-close relationship between the aid being given to a foreign country and the trade that was taking place, particularly in relation to arms exports. It is very important that we learn the lessons from past failures when it comes to finance for foreign infrastructure schemes, and we particularly need to start prioritising schemes here in the UK.

[Mark Reckless (Rochester and Strood) (Con)]

It is important for the hon. Gentleman to follow through the logic of his comments when it comes to funding for the European Investment Bank, for instance, or substantial increases in funds flowing to support projects elsewhere in the EU. Is that something that he and his hon. Friends would like to do something about?

[Chris Leslie]

We definitely need more scrutiny of the resources committed through the European Union to some of the schemes abroad, but as I understand it, this Bill will not substitute for the investment that the UK taxpayer makes to the European Investment Bank and elsewhere. This is about underwriting private projects that will, hopefully, bring benefit to our economy more broadly. Our view is that we should focus our prime attention on the economic needs here within the UK.

[Mark Durkan (Foyle) (SDLP)]

Does my hon. Friend accept that some of us have a concern with the wording of his amendment, which specifically refers to “within the United Kingdom”? In Northern Ireland, for instance, many of the infrastructure projects are likely to have a cross-border character. Infrastructure projects both large and small sometimes have commitments of money from the Irish Government as they serve hinterlands that cross the borders. With renewable energy, of course it makes sense for significant projects to have a cross-border character. They will serve not only Northern Ireland’s but Great Britain’s future energy needs. Might not my hon. Friend’s amendment preclude sensible investment support for such projects?

[Chris Leslie]

I would not want the amendment to have that particular effect, and I do not think it need have it, especially if the Government were in a position to frame the legislation in such a way as to see this potential £50 billion focused very much on the needs of our own people in our own country. I hear what my hon. Friend says, but I do not think this is the be-all-and-end-all of Treasury expenditure, as there are other ways and means of dealing with those few projects that might have a cross-border character. When it comes to the underwriting capacity of this particular Bill, we think it important to prioritise investment here at home.

[Barry Gardiner]

My hon. Friend will be aware that the perimeter of Northern Ireland is defined as the six counties, and that the continental shelf offshore was never included in the original agreement drawn up by the Foreign Office. [Interruption.] I realise that my hon. Friend the Member for Foyle (Mark Durkan) knows this only too well. What that means is that we need clarity in respect not only of amendment 11, but of the “Short title, commencement and extent” provisions. At the moment, the Bill would preclude offshore wind development from the Northern Ireland coast. These matters may seem abstruse, but as constituted, the Bill does not make it clear that such infrastructure development would qualify for support. That question is as much one for the Minister as for my hon. Friend the Member for Nottingham East (Chris Leslie), but it seems to me that the question needs to be answered.

[Chris Leslie]

I am not sure I agree with my hon. Friend on the particular example he provided. It is quite clear that there would be benefit for the economy within the UK if those offshore schemes proceeded. The frustration I have is with the rather hasty drafting. Yes, we accept that it is necessary to frame a scheme that has sufficient flexibility, but there are dangers in enacting legislation that does not focus sufficiently on significant financial schemes, employment and jobs here in the UK. That is the purpose of the amendment.

[Mark Lazarowicz]

I am sure that when my hon. Friend’s amendment is successful, he will arrange for his noble Friends in the other place to deal with any clarifications required as a result of our debate. Earlier today we heard a statement on the west coast main line franchise, and we saw how the whole franchising system is in a state of shambles. Is that not going to have an effect on private sector investment, making it important to get even quicker investment in rail projects across the UK, through Directly Operated Railways, through Network Rail and other means to ensure that we gain the benefit—to the rail industry, to passengers and to the economy—now and not four, five, six or seven years down the line?

19:15

[Chris Leslie]

My hon. Friend is entirely right. This sends a message that the Government are incapable of running some of these bidding arrangements, incapable of awarding schemes in a competent and straightforward way and have no transparent or available methodology for scrutiny. That is my wider point. If we compare the laudable statements in the national infrastructure plan back in November 2011 with the actual progress made on many of those schemes to date, we see that the Government have fallen short in many different respects.

[Gloria De Piero (Ashfield) (Lab)]

The Prime Minister said just under a year ago that the plan for job creation made it critical to get construction projects off the ground. My hon. Friend referred earlier to the Construction Products Association, which predicts a 13% decline in spending. Is it any wonder that the director general of the CBI says that Government plans for infrastructure are hot air—a complete fiction?

[Chris Leslie]

Looking through the detail of that national infrastructure plan helps us to realise how far the Government are falling short. Let us start looking at some of the particular schemes that are of great concern to our constituents here in the United Kingdom. The A14 road link between Felixstowe and the midlands, for example, was promised immediate investment in the national infrastructure plan in 2011, but the Department for Transport has now said that the construction will not begin for six years, subject to agreement with various local authorities on funding packages and so forth. There is already much concern about that particular scheme.

The Mersey Gateway bridge is another example. Many Cabinet Ministers described it as incredibly important. I think the Chancellor and the Transport Secretary at the time said that it could be implemented quickly, but although the Department for Transport wanted construction to begin in 2010, there will not be a preferred bidder until late 2013. Construction will not start until the end of that year and it is not due to open until 2016, or potentially even later.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

My hon. Friend makes some important points about the consistency of Government leadership in seeing through some of the projects in the infrastructure plan. Comparison between the original plan for construction of November 2011 and the update in April this year suggests that 182 new projects have been added, but 63 disappeared without explanation. Does my hon. Friend agree that for any measures to have effect, leadership is necessary to see the projects through and to gain clarity on the outcomes we want to be delivered?

[Chris Leslie]

My hon. Friend is totally correct. Ministers seem to think they can come to the Dispatch Box and make a set of announcements, which will then magically happen as they busy themselves in their part-time political advisory roles or whatever they happen to be doing. If we start to walk through the projects one by one, we realise that Ministers are not gripping the issue.

[Graham Stringer (Blackley and Broughton) (Lab)]

My hon. Friend must have noticed during the Conservative party conference that the chaos and shambles goes right to the top. The Prime Minister claimed that work on the A11 was already under way, but any check on the Highways Agency website will show that the first spade will not be put into the ground until January. The Government simply do not know what they are doing, do they?

[Chris Leslie]

A pattern is emerging, but I shall not use the word “omnishambles”, which is probably past its best. There is great concern about these schemes. Thameslink, for example, is a project that is slipping considerably. The contracts for rolling stock were due to be awarded by early 2012; then it was by the summer, and now the Department says that the contract with the preferred bidder will be signed in the autumn. The Transport Select Committee is on top of that issue. It is writing to Secretaries of State asking why there is a delay with the rolling stock procurement, and I am sure that the Minister will be able to reply to that question when he responds to the debate. However, many other significant questions about delay need to be answered.

We need to know about the ongoing programme of work on the north Doncaster chord, a rail link that is greatly needed in that part of Yorkshire. The national infrastructure plan of 2011 promised that a business case would be provided by April 2012, but the proposed development is still awaiting a decision from the Secretary of State, which must be delivered before production can continue and construction can start.

The preferred bidder for the extension of the Northern line to Battersea was announced in June. A Treasury source then told the Evening Standard:

“The entire weight of the Government is being thrown behind the extension of the Northern Line”,

but nearly a year after the Chancellor’s autumn statement, the extension is still subject to the existence of funds. Despite backing from the

“entire weight of the Government”,

Transport for London can only say:

“Subject to funding being in place and permission from the Secretary of State for Transport, the new stations could be open by 2019.”

The construction of the Green Port Hull was due to begin this year, but Siemens now says that it will not sign a contract for the wind turbine factory until 2013. As for carbon capture and storage, the Department for Energy and Climate Change was supposedly

“developing a streamlined selection process”,

and £1 billion of capital was supposedly available to support the project, but construction is not due to begin until 2014.

Planning permission was granted in March for biomass electricity generation at Royal Portbury dock, but E.ON is currently taking time to

“review the prospects for the project in light of the UK Government’s current banding review”.

Again, a Government decision is awaited.

I am sure that I do not need to mention the issue of the 4G mobile spectrum auction and roll-out. Many Members may be checking their not necessarily 4G-compatible handsets as I speak. However, I will say that a very messy approach was taken to the auction of that particular regulatory arrangement, and that anyone who may be thinking of buying an iPhone 5 should be careful, because it will not necessarily be compatible with many possible providers. This is an example of our falling many years behind the United States, Germany, Sweden and parts of Asia. Unlike this country, they already have 4G services which are giving businesses opportunities to benefit customers.

We need only compare the much-vaunted promises of the 2011 national infrastructure plan with the actuality of the infrastructure pipeline that was announced in April. Although 182 new projects had been added, 63 had disappeared without explanation. Of the 357 projects announced in November that were updated in April, nearly two thirds were still in pre-procurement stages, and just 38 had proceeded to procurement or construction. Of the 229 that were still at the pre-procurement stage, three quarters were still at the same stage as had been reported in November 2011, and 36 had moved backwards.

Members may recall the regional growth fund, the supposed successor of the regional development agencies and, supposedly, the Government’s flagship alternative for regional economic development. Although the winners were announced in, I believe, April 2011, fewer than half the final offer agreements in rounds 1 and 2 of the fund have been put in place. Only £60 million of the £1.4 billion fund to spur growth has been released to businesses, and, according to a report by the Public Accounts Committee, the £364 million spent by the fund so far has been held up in intermediaries such as banks and local authorities.

[Stephen Timms]

My hon. Friend is making a powerful case, and I hope that we shall hear a response to it shortly. Has he seen the assessment by the British Chambers of Commerce which—before the election, I believe—identified 13 critical infrastructure projects, and said that although three were going ahead, there had been little or no progress on eight of them? That is a lamentable situation. Businesses across the country are desperate for those projects to go ahead.

[Chris Leslie]

It is very difficult to find an explanation for this Keystone Cops approach to infrastructure schemes, other than that the Government are incapable of getting to grips with the detail. I welcome the Minister to his position—he may be a new broom who will sweep everything clean, deal with the issues firmly and move many of these infrastructure projects forward—but I want to hear about his strategy for improving infrastructure on these shores, in the United Kingdom.

[Hugh Bayley (York Central) (Lab)]

May I intervene on my hon. Friend before he leaves the subject of the regional spread of investment? He will recall that on Second Reading I informed the House of changes in the level of infrastructure investment region by region. Some regions experienced an increase in investment between 2009 and 2011—most notably London, whose 18% increase was probably fuelled by the Olympics—but all the rest of the country, apart from three regions, experienced a reduction. Investment fell by 31% in Yorkshire and the Humber and the north-west, and by 32% in Wales. Does my hon. Friend think that the Bill, and the fund that it will establish, will provide an opportunity for some of those regional imbalances to be redressed?

[Chris Leslie]

I would like to hope so, but I do not advise my hon. Friend to hold his breath. We are not even talking about a fund; we are talking about promises to under-run funds in order to guarantee other schemes as they come forward. Where is the confidence? Where is the demand in the economy? Where are the private sector schemes whose organisers want to come forward? Far greater efforts must be made, and the Government must take the economic climate more seriously. We should be bringing forward schemes, prioritising UK infrastructure, and kick-starting construction here at home. We have suggested that revenue from the 4G spectrum auction should be used to fund the building of 100,000 new homes, and we are more than happy for the Chancellor to steal our thunder in the autumn—or should I say Christmas—statement on 5 December. Our amendment would ensure that the Bill focused on the British economy, and that should surely be the starting point.

[Mr Redwood]

I think we should be a bit careful. I thought that the Bill to which we are being invited to consent would provide solely, or primarily, for guarantees and loans, but in fact it allows expenditure and

“any… kind of financial assistance”,

which could include direct purchase. It certainly includes court or prison facilities and roads, which, in many cases, will involve no revenue, so presumably that means direct spending.

[Chris Leslie]

I think that the right hon. Gentleman is technically correct. The wording of the Bill is very loosely framed. We know that accounting officers in the Treasury had put a big question mark over exactly what Ministers were proposing. They wanted one line to cover them in circumstances in which things might go wrong, and they would be challenged and hauled before the Public Accounts Committee. That dates back to the 1932 concordat on public accounts, and it is being radically changed by the Bill. We do not necessarily think that that is the wrong thing to do, but it is noticeable that legislation has been presented to the House of Commons by Ministers who cannot say what it will be used for. We need information on the specifics of the schemes and the dates on which they will be supported. That is the level of detail that we require.

Amendment 9 relates to the definition of “infrastructure” in clause 1. I am sorry that the amendment tabled by my hon. Friend the Member for York Central (Hugh Bayley) was not selected; he noticed that flood defence schemes were not included in the list of items covered by infrastructure expenditure.

Our amendment seeks to insert the word “childcare”. Education is included in the set of infrastructure projects that might benefit from the scheme, but child care is quite different. We consider that to be an obvious anomaly which the Government should correct. We know that the costs of child care are afflicting many families throughout the country, a number of whom are not necessarily choosing to enter employment because the child care options are too limited or too expensive. One of the reasons why child care is so expensive is that the facilities are expensive. We do not have enough of them, and we need more investment in them.

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

rose—

[Chris Leslie]

I am happy to give way to my hon. Friend, who I know has campaigned strongly on these matters.

[Kate Green]

Does my hon. Friend agree that many of the infrastructure projects the Government have talked about have been in typically masculine industries? Does he also agree that one of the huge advantages of investment in child care is that it also helps to redress the high level of female unemployment—it is the highest in a quarter of a century—because it offers the opportunity for more mothers to go out to work and because that sector remains largely dominated by female employees?

19:30

[Chris Leslie]

My hon. Friend’s point is borne out by the statistics. Only 67% of mothers in the UK are in employment, which compares with figures of 84% in Denmark, 79% in the Netherlands and 74% in France. That reflects on the characteristics of our national output and our economy. More could be done to help those parents to gain access to employment. Families in the UK with pre-school-age children spend more on child care than is spent by this group in any other OECD country, except Switzerland. More nursery places and more not-for-profit providers of child care would help to drive down that cost. According to the OECD, the cost of child care in the UK is more than 26% of the average family income in those circumstances, whereas the OECD average is just under 12%, so this is a very significant drag on family budgets and it is holding back our economy.

The Daycare Trust has called for Government assistance to enable children’s centres, smaller private providers and not-for-profit early years providers to expand. It has pointed out that some 28,000 extra nursery places for two-year-olds need to be found in London alone, so we can clearly see that child care issues need to be considered in the definition of “infrastructure” that could obtain support under this legislation. Those are the amendments that I wish to discuss for the time being, but other hon. Members will doubtless have noticed omissions in the legislation.

[Mr Redwood]

My concern about this Bill is with the definitions and the amount of money involved. I am obviously very much in favour of more productive infrastructure projects going ahead as quickly as possible. There may well be utility in facilitating the Government to make guarantees, support or indemnities available at a time when the banking system is still not functioning well and it is difficult getting these things financed privately in the way we normally like. However, I start from the proposition that what we really need to be doing is generating a lot more freestanding private sector investment projects. It would be better if we took stronger and faster action to remedy the banking problems that lie underneath the problems we face in getting these things financed.

I am concerned that the wide-ranging powers in clause 1 may lead to a big increase in public spending, which would damage the Government’s fiscal targets. A lot of time and energy has been expended by Governments on reducing capital programmes to try to get public spending down to levels thought to be more compatible with reality and markets. We want to avoid this Bill becoming a way of undoing all the hard work that has been done to try to get the deficit down, at a time when this Government strongly believe that deficit reduction is crucial. The outgoing Government actually enacted legislation committing themselves to halving the deficit over the lifetime of this Parliament.

The definition of “infrastructure” in clause 1(2) is wide ranging. I thought that the type of infrastructure we had in mind for this Bill was that in subsection 2(a), which states that infrastructure is about “water, electricity, gas, telecommunications”. Those services are all provided by the private sector with charges to customers, so there is a flow of revenue that can remunerate the capital. If those projects are held up because of banking difficulties, I have every wish to encourage the Minister, newly in his job—I give him my congratulations—to expedite them. One hopes that the Government would be properly rewarded for the indemnities and the guarantees, or that they would not be necessary in the fullness of time, and so the taxpayer would not lose by this process. I am happy with that provision, which I thought was the thrust of the Bill.

However, subsection (2) also provides for mixed projects and entirely public sector projects. It includes mixed projects in the form of railway facilities. Railways are extremely heavily subsidised, and any new project is likely to require many years of future subsidy, because such projects do not normally reward the railway operator or the taxpayer sufficiently from the fare revenue. We therefore need to consider, for any one of these projects, the medium-term and long-term implications of cash outflows from the public sector, as well as the private sector revenues. Those things cause difficulty in the evaluation, as we have found recently through one of the franchise problems.

Subsection (2) also makes provision in respect of areas where spending must entirely be an expense for the public sector—I assume that we are not envisaging court or prison facilities having paying guests who would contribute towards the costs, so this money will be entirely expended by the public sector.

[Mr Crispin Blunt (Reigate) (Con)]

I return to an argument about prisons that I made on Second Reading. New prisons cost substantially less to run per place than old prisons and can better develop wider policy objectives—for example, on rehabilitation and work in prisons. When debating the Bill, reference should be made to the spending on prisons that would come from the Ministry of Justice’s delegated expenditure limit. This approach would enable the capital expenditure to happen now, in order to take the savings later.

[Mr Redwood]

That is a helpful contribution, but it shows the dangers of this clause, because it demonstrates that if these projects are not properly evaluated they could be more expensive overall. My hon. Friend has recent experience as Minister with responsibility for prisons and he is saying that in the short term they will definitely be dearer, because the state will have a big cash outflow in order to buy the new prison. It will take time to close down the old one and find some alternative use for it, and that process might not produce anything like the amount of money that the new prison costs. He is arguing, with his former brief in mind, that this may still represent a good bargain for the taxpayer, but when we come to account for it, we will have to account for the fact that a lot more has been spent in the first couple of years; there may be benefits for Governments to come if, as he hopes, the thing is cheaper and better in the longer term.

In debating this clause, we need to unpack the three types of project we are talking about. The first is a genuine private sector project, where we hope that there will be no ultimate call on the taxpayer and it may just involve a facilitation guarantee that will be properly rewarded. The second is a mixed project, where a lot of accounting has to be done—as the Department for Transport is discovering, such projects are difficult to evaluate. The third is the pure public sector project, where we need to go into the departmental budget. So I hope that the Minister will give me some reassurances about this.

[Hugh Bayley]

I follow the argument that the right hon. Gentleman is making, although I do not necessarily share his conclusion. Health facilities are defined as one of the fields of infrastructure that this fund could be used to support. The recent health Bill showed that the Government favour more NHS services being provided by private contractors and private hospitals. Is he telling the Committee that he would be happy for this fund to be used to finance a private clinic or a private hospital, but not happy for it to be used to fund an NHS hospital trust?

[Mr Redwood]

I am not trying to say anything that contentious. I am trying to unpack what is going on in this clause, because we are in Committee. I was not going to presume to give my views on total public spending, because that is a matter for another day and another debate. I am trying to get the Committee to understand that we are dealing with three different types of project, and the health one is closer to the pure public sector project. Even if it is carried out in a private sector facility with some so-called “private sector risk”, all the patients will be paid for by the NHS if it is for the NHS and so it is a flow of public revenue. We have to account for it in the proper way and be realistic about that.

[Kate Green]

The right hon. Gentleman is making an interesting argument. Does he not also accept that one of the difficulties with long-term infrastructure projects is that they have different phases, some of which may be susceptible to public intervention and some of which, later on, will require private investment. Let me give the example of a large site in my constituency that is currently in private ownership and has large redevelopment potential. The initial investment will have to be public investment to decontaminate the land and prepare the planning requirements, but down the line one would hope to see private investment. Does that not create a further accounting conundrum?

[Mr Redwood]

Yes, indeed. My point, which is not hostile to the Minister and is merely an attempt to inform the debate, is that we are discussing a set of very different projects and we are not sure what we are talking about because the Bill is very generic and general. We can probably all come to the conclusion that for this to work we will need precise control over what is being proposed—of how much of it is public, how much is private, how much involves a direct charge on the taxpayer and how much involves a guarantee or indemnity.

If a guarantee or indemnity is involved, I am sure that the Minister, with his forensic financial backgrounds and skills, will be able to keep control of it and to reassure the Committee that it is unlikely to be called on unless it was absolutely essential and a very important project would not go ahead without it, which would mean that it was a reasonable risk to run. I am happy at that end of the spectrum, as we will have to trust the Minister’s judgment and this is a good Minister with the skills and ability to do such things. We need to probe when such projects are proposed, however, as we are the custodians of public money and do not want to end up with white elephant projects with huge guarantees and indemnities that will in due course have to be met by some Government.

I am also concerned about the projects in which there is more of a mixture or a muddle, because they must be fitted in to the public expenditure plans. That does not prejudge whether the expenditure should be higher or lower, and there will be different views on that in the Committee, but they will need to be fitted into the plans. A large sum is involved—£50 billion—and we do not know the time scale. The Government might want to come back and ask for more money, and a provision allows them to do so by order, so I want a little more information from the Minister about how such projects will fit into the public expenditure plans and how Ministers collectively will evaluate the mixed projects that receive a big flow of public subsidy and, more particularly, those that really are public sector projects. They might be dressed up as private sector projects, but as far as I am concerned if all the money for the provision on behalf of customers or users of the service comes from the state, that is a public sector project and the private sector is merely a franchisee or agent of the state. If all the money comes from the state, I expect the state to have a grip of the project and to satisfy us that it represents value for money that is being organised in the best way.

I am not ideologically driven as regards the provision of state services. I think that should be done in the cheapest possible way, provided that they offer good quality, and that always causes problems, but I hope that the Minister will give us some guidance about how he will differentiate and seek reassurances about the granting of those indemnities and guarantees and about what proportion of the projects will involve pure public spending, as the Bill entitles him to spend as well as offer guarantees.

[Mark Field (Cities of London and Westminster) (Con)]

Although I accept much of the thrust of what my right hon. Friend has to say, does he not accept that if too much time and Treasury orthodoxy are spent on evaluating schemes at this stage, many of the infrastructure projects will simply not be built? We need to move ahead with getting them under way at the earliest opportunity if there is to be economic growth and some of the evaluation process to which he refers might be better placed at a later date.

[Mr Redwood]

I normally agree with my hon. Friend, but I am afraid that I do not on this occasion. There is not now an excuse to go in for projects that do not make any economic sense just because we all want some more growth and jobs. Indeed, that would be a very good way of setting us all back further as it would damage the public finances without giving us the benefit of a good project that people wanted to use and that produced plenty of user revenue. When one is in a financial hole, as our country is, one needs to be very careful. We look to the Treasury, in particular, to evaluate such matters carefully and I want a little more guidance because £50 billion is a huge sum. I am not surprised that so few MPs want to discuss it—if we were debating £500 million, the place would probably be packed, but because we are discussing £50 billion everyone has gone off for a tea or a coffee—but to me it is a serious sum of money and I want some reassurance that we will get something worth having for it.

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

The right hon. Member for Wokingham (Mr Redwood) roamed over many of the issues covered on Second Reading and over the scepticism on both sides of the Committee. I say to the hon. Member for Cities of London and Westminster (Mark Field) that I think evaluation is critical, as we have seen with the west coast main line, and undertaking projects on a wing and prayer at this stage is dangerous, to say the least.

The Bill, as we said on Second Reading, seems to be the reverse of the private finance initiative. PFI was meant to shift the risk on to the private sector, yet the Bill seems to shifting it back on to the public sector. I share the concerns. Clause 1(4) defines financial assistance in the broadest terms possible, so it could involve revenue assistance, and clause 1(3) refers to the operation of a project. In addition to a capital project, we could be subsidising in revenue terms the operation undertaken by a capital project. That leaves open the issue of hospitals being built by the private sector and then revenue supported under the Bill.

19:45

There are anxieties, but I do not want to repeat everything that was said on Second Reading. One suggestion I made then was that to assist the Government in clarifying their policy on Heathrow we should table an amendment seeking to enact the Prime Minister’s commitment not to proceed with a third runway or expansion at Heathrow before the next general election, leaving it open for a proper debate to be held at that time. My amendment simply does that. I am seeking to assist the Government in clarifying their policy and legislating accordingly.

I hope that the Minister will repeat the Prime Minister’s commitment tonight and, I hope, accept the amendment. That is even more important if we bear in mind recent statements. Only two weeks ago, Willie Walsh, the chief executive of British Airways, confirmed that he accepted that there will not be a third runway at Heathrow and that he would operate British Airways on the basis of that decision. In addition, this weekend the Massachusetts Institute of Technology published its research on air pollution and the impact of a third runway at Heathrow, which suggested that the number of deaths from air pollution would quadruple if a third runway went ahead. This is an ideal time for the Government to put on the statute book the Prime Minister’s commitment that there will be no third runway at Heathrow in the lifetime of this Parliament. That is what the amendment does and I hope that it will receive a positive response from the Government.

[Mr Blunt]

The thrust of my speech will reinforce the remarks made by the hon. Member for Hayes and Harlington (John McDonnell) and my right hon. Friend the Member for Wokingham (Mr Redwood) about the reassurance we should receive about the possibilities opened up by the Bill. The mechanism I have chosen to secure that reassurance is to table an amendment that would delete the reference to housing. I have no intention of pressing it to a Division; I am merely seeking clarity on what we want to achieve with the Bill.

On Second Reading, the Opposition spokesman said he thought that housing was infrastructure, but I am afraid that I do not—neither does the “Oxford Dictionary of Economics”, nor do The Economist or the Government in their 2011 national infrastructure plan. That does not mean, however, that I do not think that investment in housing is essential or necessary, which was the conclusion slightly unfairly drawn by the hon. Member for Hayes and Harlington on Second Reading. Given his interest in criminal justice, I was somewhat surprised that he then juxtaposed the need for decent prison facilities—

[John McDonnell]

I admit that I was a bit harsh.

[Mr Blunt]

I am extremely grateful to the hon. Gentleman for his customary self-criticism and generosity.

The Minister must give us the necessary clarity. I note that the right hon. Member for Greenwich and Woolwich (Mr Raynsford) has tabled an amendment on housing schemes that would add the words “of national significance”—or words to that effect. It is at that point that alarm bells start ringing for me, as the Member for Reigate, a constituency wholly within the metropolitan green belt. We have had a significant increase in housing, particularly through infill but also through new housing schemes that were agreed and supported by the local authority, and there has been development in parts of Redhill, but that has actually led to a shortage of infrastructure to support the people in that housing.

We desperately need two new primary schools locally, and then there is the small matter of the M23 never being finished. In these circumstances, when we are looking for capital schemes, it might be rather nice if the M23, several decades later, was finally finished properly where it joins the A23. In addition to the schemes that the Government will come forward with, which I anticipate will be announced in the expenditure statement, I hope that we can begin to look at some of the schemes that have been around for a long time and that these funding mechanisms will help to enable expenditure on them to take place.

I am seeking the same level of reassurance that my right hon. Friend the Member for Wokingham seeks. I have the same implicit trust that he has in the ability of the Economic Secretary and the team of Treasury Ministers to manage these things satisfactorily, but Parliament is owed proper accountability on this.

I am concerned that we will find housing schemes, particularly those of national significance, being imposed in the way they were under previous regional development strategies, with housing numbers simply being cascaded down from Whitehall to the regions, to the counties and then to local authorities, such as mine, in a way that leaves the borough councillors, as owners of the planning policy, completely unable to do anything other than mitigate the consequences. They have never been in the position that we, as a localist Government, want them to be in, in which they can judge between the economic and social need for housing locally and the environmental consequences of such development. Those are the balances that local authorities are there to draw.

The Bill will suddenly enable a substantially greater amount of new expenditure to take place, but where is the link with the rhetoric about planning policy? I just want to raise that concern, as I did on Second Reading. I do not want the financial provisions set out in the Bill to be combined with planning policy debates that take place elsewhere, and then suddenly find that in constituencies such as mine the powers of local representatives are being overridden in some rush to develop housing, which by no stretch of the imagination is infrastructure in the proper sense of the word.

[Mark Field]

Does my hon. Friend agree that the experience of the past 15 years is that there has been very little cascading down, despite all the intentions to build new housing? Is he perhaps becoming over-concerned that the inclusion of housing as one of the infrastructure heads might mean that only a number of housing schemes—relatively small ones; not necessarily national housing schemes—become the shovel-ready schemes that the Treasury is looking to encourage given that some of the other heads might mean that considerably more time is required before anything is built?

[Mr Blunt]

That is fine, but the borough councillors of Reigate of Banstead, as the planning authority, have a mandate from their local electors and they are perfectly capable of making decisions about the requirements for housing in the area and to weigh up the competing factors. That is the mandate they enjoy from local people and, as far as I am concerned, there is no need for the view that the gentleman in Whitehall knows best. If there is going to be a wider economic case for building, it needs to be made with great clarity. If that needs to be done with infrastructure of major national significance, there are bound to be occasions when local interests will have to be overridden in the wider national interest. As far as housing is concerned, the arguments are certainly significantly weaker in that regard than they are for actual national infrastructure, the benefits of which we will enjoy for decades to come. If we have too much jerry-built housing, we will then have to live with the environmental consequences for generations.

[Mr Raynsford]

I draw attention to the interests declared in my entry in the register.

I disagree with the hon. Member for Reigate (Mr Blunt), but I do not intend to engage in a debate with him. I will simply say that I think he is in for a big disappointment and that he clearly did not listen to the statement that the Secretary of State for Communities and Local Government made about changes to the planning system that will allow him to refer a whole series of matters to the Planning Inspectorate when he does not agree with a local council’s decision. I am afraid that that is where the Government have got to in relation to localism. However, I do not intend to enter into that debate.

I entirely understand why the hon. Member for Reigate misinterpreted the effect of amendment 2, because the amendment paper gives the impression that it was designed to refer only to housing of “national significance”. It was not. It is simply that housing is the last item prior to the next clause. My reference to “national significance” applies to all the items, including roads, sewers and all the rest, as well as housing. The purpose of the amendment, which is what I will focus on, is to limit the impact of the definition of the Bill to schemes of national significance.

[Mr Blunt]

I am extremely grateful to the right hon. Gentleman for that clarification following my inability to read his amendment properly. On the planning point, and with respect to his long-established expertise and experience in this area, if he thinks that green-belt constituencies such as mine are liable to be affected under the changes he has identified, I am in the market for his advice.

[Mr Raynsford]

I said that I did not intend to engage in a debate on that subject. I believe that we need a great deal more housing in this country, but I will not engage with the hon. Gentleman in a debate about his constituency, which he knows much better than I do, and I certainly would not advocate extensive building on the green belt, which would be entirely inappropriate. I was simply drawing attention to the fact that the Secretary of State’s recent decision on planning, which came a mere three or four months after the national planning policy framework was put in place, withdrew many of the original localist hopes about allowing decisions to rest with the local authority and made it clear that he would refer items over the local authority’s head to the Planning Inspectorate. To me, that is not localism, but let us leave it there.

I tabled the amendments simply to try to get clarity and focus on the uses and application of the Bill. As drafted, it is incredibly broad. I do not object to the definition set out in clause 1(2), but the definition in clause 1(3) states:

‘“Provision” includes acquisition, design, construction, conversion, improvement, operation and repair.’

As the right hon. Member for Wokingham (Mr Redwood) pointed out, subsection (4) defines financial assistance as covering a whole range of activities, including

“loans, guarantees or indemnities, or any other kind of financial assistance”.

In theory at least, that definition would allow the Government to offer a guarantee literally on the repair of a door in a school or prison. Although that work might be entirely necessary and desirable, it is clearly nonsense for the provisions in this Bill, which are designed to allow major infrastructure schemes that are stalled for financial reasons to proceed. That is the purpose of the Bill.

[Hugh Bayley]

I am following my right hon. Friend’s argument. I am slightly concerned about how he would define “national significance”. I can think of a number of important infrastructure projects in my region that could be described as being of national or regional significance. For instance, would dualling the A-road that goes around York be seen as nationally significant? Flood defences, a matter that I hope to raise later if I catch the Chairman’s eye, need to be designed on a region-wide basis. Would my right hon. Friend regard flood defences as being of national significance—if they affected the Thames, perhaps?

20:00

[Mr Raynsford]

I think it very likely that any definition of “national significance” would include flood defence schemes, which are defined as infrastructure in the national infrastructure plan. My hon. Friend should not be troubled about their absence from the list, although he wishes to move an amendment to clarify the matter. There is no question but that flood defences are infrastructure, and if they protect from flooding areas of the country at risk of flooding, which is clearly catastrophic, the likely interpretation would be that they were of national significance.

However, I do not propose to add a precise definition; I simply want to give an overall, overarching legislative obligation for the Bill to be used for the provision of financial assistance to schemes of genuinely national significance.

[Mr Redwood]

I remind the right hon. Gentleman that the Government could not merely offer a loan for the new school door; they could pay for it—they can pay for operating expenditure. So the issue is very wide-ranging.

[Mr Raynsford]

The right hon. Gentleman makes a perfectly fair point, and I concur.

The Institution of Civil Engineers, the professional body for engineers and those involved in the provision of infrastructure, makes a telling point in its submission to us about the Bill. It says that the approval criteria that the Government have set out for considering schemes state clearly that

“any project must be nationally significant before it can receive financial support.”

It would clearly be a total waste of time if people read the fine print of the Bill and believed that it was appropriate for the kind of project to which the right hon. Gentleman and I were referring and submitted one, simply for it to be rejected because it did not have national significance. That is why the amendment has been tabled—to help the Government by bringing a degree of clarity and focus to the Bill.

I entirely concur with the objective of helping schemes that are stalled and ought to be able to proceed, but they should only be schemes of national significance. That is the purpose of my amendments, to which I hope the Government will be sympathetic.

[Ian Swales (Redcar) (LD)]

I shall speak briefly against amendment 1, which would have the effect of limiting the definition of infrastructure to the items listed. That could mean that key elements of economic infrastructure would be omitted. We have already heard reference to broadband and flood defences, but I am thinking in particular of the installation of carbon capture and storage networks, such as the one proposed for Teesside, which already has strong private sector support.

Those networks will be vital for future economic growth and that type of investment must be included in the scope of the Bill. I would welcome clarity on that from the Minister and I ask him to consider adding such schemes to the list. Having said that, I accept the excellent inputs from my right hon. Friend the Member for Wokingham (Mr Redwood) and my hon. Friend the Member for Reigate (Mr Blunt) on the need to limit how the Bill is implemented.

As a member of the Public Accounts Committee, I certainly do not want any suspension of proper process, judgment or value-for-money assessment of any project that comes through under the Bill.

[Hugh Bayley]

When we discussed the Bill on Second Reading on 17 September, I had no idea that just one week later the River Ouse was going to rise 5 metres higher than its normal summer level and put York once again in the national and international news as a flood-prone city. I am glad to say that the emergency was well managed by the local authority, the Environment Agency, Yorkshire Water and the police, who led the silver and gold command, of course.

The consequence was far less dramatic than 12 years ago, when the Ouse rose just 10 cm higher—about 4 inches, for those who are metrically challenged. On that occasion, some 230 homes were inundated. Some homes were affected this time, but the damage was much lower, in part as a consequence of investment in flood defences and other flood alleviation schemes.

Hard flood defences have been built in the city of York to provide better protection for houses flooded during the previous high flood 12 years ago. Other alleviation measures have also been taken upstream. There has been funding to encourage farmers to build ponds—in one case, a major dam that stores millions of gallons of water during a high-flood event—and to plant more trees to slow the run-off so that the peak height is a few inches lower than it would otherwise be. I have asked the Environment Agency to calculate whether those measures made the 4 inches of difference between this occasion and 12 years ago, so preventing hundreds of thousands of pounds’ worth of damage to hundreds of houses and commercial businesses, as happened then.

I should stress that throughout the flood, 99.9% of York was open for business. It gets a bad press whenever there is a flood because journalists are lazy and know that a pub called the King’s Arms in York floods four or five times a year, and it is as easy as pie to get a picture of somebody in waders pulling pints behind a bar. When people see such photos, they need to realise that York is up and running and not closed for business.

On Second Reading, I posed the question of whether the list of types of infrastructure in the Bill would include funding, or support through loan guarantees, for flood defence schemes. The Economic Secretary took advice between hearing my remarks and replying to the debate. He said:

“I am advised that there is no reason for them”—

that is, flood defences—

“to be excluded, and we envisage their being part of the infrastructure that is being considered.”—[Official Report, 17 September 2012; Vol. 550, c. 747.]

Since the Economic Secretary has had an opportunity to consider the matter a little further in the weeks since Second Reading and was notified by an amendment that I tabled, which has not been selected, that I would raise this issue, will he go slightly further and reassure me and other hon. Members representing constituencies with considerable flood risk that it is not that there is no reason for such schemes to be excluded, but that they will be open for consideration if it is deemed appropriate?

I say to my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford), whose knowledge about these matters is enormous and whose judgment I respect—I normally consult him about matters of housing, planning or infrastructure—that I would be concerned if we limited the schemes to those of national significance. Some of the infrastructure that badly needs investment is important and will help to generate economic growth. Flood alleviation schemes, for instance, can support economic output by keeping businesses open and avoiding diverting expenditure to repairs when the funding could instead go to a future profitable investment that would generate a return.

I caution against limiting investment to matters of national significance. My right hon. Friend makes a telling point about the school door, but many schemes of local or regional, rather than national, significance ought to be candidates for consideration for the funds provided in the Bill. When the Minister responds, I hope that he will say something further about flooding and give an assurance that although we ought to be supporting schemes of national significance with this fund, we should not limit it to supporting such schemes and it should be open for the support of other schemes of local or regional importance.

[The Economic Secretary to the Treasury (Sajid Javid)]

We have heard excellent contributions from Members on both sides of the House. The shadow Minister rightly noted that the time for the debate has been restricted. That is not unusual when we first come back after a recess, but he made a fair point. However, I was taken aback when he then went on about many different issues that did not much focus on the nature of his amendments, as he could have saved some time for hon. Members to continue with a proper debate.

On the Opposition amendments, amendment 11 is designed to limit the Bill’s geographical ambit. My response is that it is clear that the scheme relies on the spending cover provided by the Bill and is designed to facilitate and accelerate infrastructure investment throughout the United Kingdom economy. The eligibility criteria have been published. For example, the guarantee scheme contains provisions requiring the infrastructure to be of national significance to the UK. Such conditions will be sufficient to achieve protection against the UK supporting other economies. If I understood the hon. Gentleman correctly, he was concerned about the potential effect on economies outside the UK.

[Mark Lazarowicz]

Since Second Reading, have the Government been able to develop any further their ideas on how the spending under the Bill will be allocated within areas where there are devolved legislatures? In Scotland, for instance, how much will be allocated by the Scottish Government and how much will come directly from the UK Government? Can the Minister elucidate and illuminate us on that point?

[Sajid Javid]

Yes. There is no geographical division within the United Kingdom as regards the total amount of £50 billion that is being allocated in the Bill. Applications will be dealt with and assessed on a case-by-case basis as they come in from different areas of the UK, including the devolved authorities.

[Mark Lazarowicz]

rose—

[Sajid Javid]

If the hon. Gentleman will allow me to continue, there may be time for him to contribute later.

Any Government expenditure will need to satisfy the standard requirements relating to value for money, and the accounting officer will need to be satisfied about that expenditure. It is also worth noting that, as the hon. Member for Brent North (Barry Gardiner) said, making a very fair point, there may be instances where infrastructure that receives a guarantee is cross-border in nature. In those cases, we would not want to be prevented from providing financial assistance to the UK aspect of the project because of a technical limitation. I therefore beg the hon. Member for Nottingham East (Chris Leslie) to withdraw the amendment.

Amendment 9 would insert the word “childcare” after the word “health”. The amendment is unnecessary because social infrastructure, including child care, is already captured under the Bill, and so any child care facilities will be accommodated within the current definition. However, even including child care within the definition would not ensure that a provider of child care facilities was able to obtain financial assistance under the current scheme because the application will need to fall within the ambit of one of the schemes being operated which relies on spending cover provided by the Bill.

At this point, I would like to deal with the comments of the hon. Member for York Central (Hugh Bayley). I well remember that he raised the issue of flood defences on Second Reading, and he is right to do so again. It shows just how deeply he is concerned about the issue on behalf of his constituents, and I respect that. I can say again that his local flood defences are not excluded within the definition in the Bill. In the case of projects of that nature, applications should be made under the process and they will be considered like all others.

I thank my right hon. Friend the Member for Wokingham (Mr Redwood) for his kind words regarding my new position. He made two broad points. First, he rightly raised issues about overall deficit targets for the Government and their overall plan to deal with the reckless deficit inherited from the previous Government. Let me assure him that the reason we can have this programme of guarantees is the credibility that this Government have built up. Long-term interest rates and Government debt are less than half what they were when this Government came to power. That credibility is recognised by the financial markets. Sadly, the financial markets are not open for all borrowers as they were in the past. Some very viable commercial infrastructure projects cannot tap into lending in the financial markets, whether through bonds or other types of debt mechanism. The Government are using the credibility that they have built up to offer and provide these guarantees.

20:15

That brings me to my right hon. Friend’s second point. The type of projects that are intended to be considered under the Bill are private sector-led ones that are commercially viable and creditworthy in their own right. The Government will make an assessment of each project. Let me say a bit more about how that will be done, because it is important. The Government have already set up a team within the Treasury called Infrastructure UK, which retains commercial specialists with the financial skills needed to handle a scheme of this nature. The due diligence process will involve external advisers in the same way as a financial institution, for example, would involve external advisers, and the governance structure will include expert members drawn from the private sector. At the end of this process, Infrastructure UK will have to assure Ministers that the project is commercially viable and that the only impediment to its going ahead is that it does not have the usual access to debt markets that it would have had under normal market situations. Even then, the Government will charge for a guarantee and have to be satisfied that they will not make a loss on their support for the project.

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

What will be next year’s budget for consultants to support the work of Infrastructure UK in carrying out that due diligence and giving advice to Ministers?

[Sajid Javid]

I cannot tell the right hon. Gentleman exactly what the budget will be because that depends on the amount of work that the Infrastructure UK team is asked to do. In other words, it depends on the nature of the applications and the complexity of the projects. However, I can say that the income generated from the guarantee, and other sources of income, will be used to pay those expenses. The Government therefore do not believe that there will be a net cost in terms of the management costs of the team.

[Graham Stringer]

With respect to the hon. Gentleman, the term “commercially viable” covers a multitude of sins; it could mean almost anything. One of the reasons that businesses may not be able to raise the cash from banks or in the money market is the length of the payback on the scheme. Will there be any limit on the length of payback on these commercially viable schemes, given that infrastructure investment often does not pay back for decades?

[Sajid Javid]

That is a good point. There will be no limit on the length of the guarantees that the Government can issue to support the schemes because, as the hon. Gentleman rightly points out, many infrastructure projects typically require very long-dated debt which could involve a period of 20 to 30 years. There is a limit on the application time frame whereby all applications under the Bill have to come in by 31 December 2014, but there is no limit on the debt profile that can be guaranteed.

[Nic Dakin (Scunthorpe) (Lab)]

The Minister has clearly scoped this issue thoroughly. How many projects does he expect to have come forward by the date that he mentioned and what is their value likely to be?

[Sajid Javid]

I think that the hon. Gentleman will know that there is no way I can tell him that. I cannot predict the future; he may be able to do so, but I am not. I can tell him that there have already been expressions of interest from more than 50 project sponsors and that the Government have entered into negotiations with a number of them, but no final decisions have yet been made. He will also know that, in the national infrastructure plan published last year, the Government identified numerous key projects worth more than £200 billion, so there could be a substantial number of projects.

[John Healey]

I am grateful to the Minister for giving way on the point that he was good enough to respond to earlier. He said that there would be charges as part of the project costs and that, therefore, there would be no net cost for consultants to advise the Treasury’s Infrastructure UK team. Does that also apply to consultants who may be required to advise other Departments as part of this due diligence process? Will there be a net cost to those Departments for such advice?

[Sajid Javid]

Because of the charges that the Government will make for the guarantees, we anticipate that there will be no net cost. Of course, that cannot be absolutely guaranteed, because our current projected cost profile may change, but it is anticipated that the income will cover most of the costs.

[Mark Lazarowicz]

I want to pursue an important point. Will any of the £50 billion of loans, guarantees and financing be allocated directly to the Scottish Government, the Welsh Assembly Government and the Northern Ireland Government to allocate themselves, or will every project in Scotland and the other devolved regions have to go directly to the Treasury, or will there be an intermediary mechanism to ensure that the funds will be allocated throughout the UK? An answer from the Minister would be genuinely helpful.

[Sajid Javid]

That is a good question. It reminds me that I cannot remember any Member from Scotland or Northern Ireland being present during our lengthy debate on Second Reading. The recess was about to start, so perhaps they though it was a good opportunity to take a longer break. Let me be clear: this is a United Kingdom Government Bill. It is based on macro-economic policy, which is a reserved power for the United Kingdom Government, and takes advantage of the credit-worthiness of the United Kingdom Government. Members discussed the referendum on Scottish independence earlier, and this scheme is a great example of the strength of the United Kingdom when it works together. If we asked project sponsors in Scotland whether they would prefer a United Kingdom Government guarantee or a Scottish Government guarantee, I know which one they would pick. On deciding how those guarantees are used in devolved areas such as Scotland, the United Kingdom Government would work closely with their counterparts in the Scottish Executive, but the final decision would be for the United Kingdom Government.

I do not want to say too much about amendment 10, tabled by the hon. Member for Hayes and Harlington (John McDonnell), because the issue has come up a number of times, but I will point out that international connectivity is an important issue for overall economic growth. This Government believe that maintaining the UK’s status as a leading global aviation hub is fundamental to our long-term international competitiveness, but we are also mindful of the need to take full account of the social, environmental and other impacts of any expansion in airport capacity. That is why we set up the independent commission under Sir Howard Davies, which will issue its final report in the summer of 2015. Any decision on whether to support any of that report’s recommendations will be taken by the next Government. In any case, the coalition agreement is clear on this issue. That represents the Government’s position clearly, so I do not think there is any need for the amendment and ask the hon. Gentleman not to press it..

Amendment 4 was tabled by my hon. Friend the Member for Reigate (Mr Blunt), who said that he raised the issue on Second Reading. I remember discussing it with him at the time and afterwards. The Government believe that the definition of “infrastructure” should be broad enough to include housing, because housing and rented homes are a fundamental part of supporting a young dynamic work force and millions of other people, as well as of increasing the overall supply of housing. Including housing in the Bill’s non-exhaustive, illustrative list makes clear our intention to introduce major investment in the UK and increase the number of houses being built and occupied.

I reassure my hon. Friend, however, on one of his key points. In no way does this deal with planning issues or take away planning authority from local authorities. He should be reassured that the Localism Act 2011 is unaffected —there is no change to that—and the Government have no plans under this Bill to impose housing on any local authority with different views. This is about providing financial support for housing projects that meet the Bill’s criteria.

[Mr Blunt]

I could have done without the Minister’s qualification, “under this Bill”. He might want to examine that.

[Sajid Javid]

I hope that I have reassured my hon. Friend on his key point. He talked about his constituency and how green it is.

[Mr Blunt]

It would be extremely welcome if the Minister gave me an assurance, on behalf of the Government, on the green belt.

[Sajid Javid]

If I have not been clear enough, I apologise to my hon. Friend. Perhaps I could write to him later in order to be clearer, or even have a meeting with him on this particular issue.

I will respond to amendments 1 and 2 together. The right hon. Member for Greenwich and Woolwich (Mr Raynsford) was right to point out that many Members seem to have misunderstood his proposal to add the words “national significance”, by linking them to a definition of housing. I get his point. It is fair to take both amendments together, because he is considering the overall definition of infrastructure and trying to make it more inclusive. The amendments are, however, unnecessary and I will explain why. The Bill’s purpose is to allow the Treasury, or the Secretary of State with the Treasury’s consent, to incur expenditure in support of the various infrastructure projects. Members will be aware that “infrastructure” has a plain English meaning, namely the physical facilities and installations needed for the functioning of a community or a society, such as transportation and communication systems, water and energy facilities, and public institutions, including housing, hospitals, schools and universities.

[Ian Swales]

The Minister has already confirmed that flood defences would fall under the auspices of the Bill. Will he confirm that that would also be true of a carbon capture and storage infrastructure network?

[Sajid Javid]

I can confirm that CCS facilities are not excluded from the definition of infrastructure. If a project sponsor wanted to suggest such a project, it would be duly considered by the team under the scheme’s terms.

Finally, it would be difficult to define “national significance” and that may take away from the overall intention of the Bill. Perhaps I do not need to make that point because it was made very well by the hon. Member for York Central. I therefore ask the right hon. Member for Greenwich and Woolwich not to press his two amendments.

[Barry Gardiner]

I welcome the speech by the right hon. Member for Wokingham (Mr Redwood), who sought to tease out the Minister. Unfortunately, I am not sure that the Minister has provided the clarification that was sought. In clause 1, subsection (1), which provides that money may be provided by Parliament, is negated by subsection (5), which states that it would be provided on the say- so of the Treasury. This is a Government Bill that avoids real scrutiny by Parliament. I suspect that that is the objection of the right hon. Member for Wokingham, as well as my own.

I am grateful to the Minister for his clarification on interconnectors and gas pipelines. That is an important point.

20:30

I would ask for greater clarification on whether the “sewerage and other services” referred to in subsection (2) might apply to payment for ecosystem services along the lines of the Catskill model in the United States, whereby water bill payers in Manhattan end up paying farmers in the Catskills to maintain their land in a certain way to ensure that the purity of the water supplied to Manhattan is maintained.

It seems to me that the reference to “operation” in subsection (3) is so wide that to call this an infrastructure Bill, in the real sense of the provision of infrastructure, is nonsense.

The Minister will not have the opportunity to respond to me at this stage, but I trust that he will be able to clarify those points on Third Reading.

[Chris Leslie]

I am not satisfied by the Minister’s answer on amendment 11. Nothing in the Bill precludes the £50 billion from being used largely—never mind in part—to bankroll foreign infrastructure schemes. He did not address that point carefully enough. We believe that the focus has to be on economic recovery here at home in the United Kingdom. The Minister may well believe that he would not sanction schemes that strayed beyond that, but reshuffles come and go—we could even end up with a Liberal Democrat Minister in his position. Who knows what would happen in those circumstances?

For those reasons, as well as those that I enunciated earlier, I would like to press amendment 11 to a vote.

Question put, That the amendment be made.

20:32

Division 69

Ayes: 211

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Labour: 202
Plaid Cymru: 3
Democratic Unionist Party: 2
Scottish National Party: 2
Alliance: 1
Green Party: 1

Noes: 290

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Conservative: 236
Liberal Democrat: 47
Scottish National Party: 4
Social Democratic & Labour Party: 2

[Chris Leslie]

I beg to move amendment 7, in page 2, line 3, at end insert—

‘(6A) In any agreement to give financial assistance in this section the Treasury or Secretary of State shall give reasonable consideration to clawback provisions which safeguard best value for the taxpayer.’.

[The Temporary Chair (Sir Roger Gale)]

With this it will be convenient to discuss the following:

Amendment 12, in clause 4, page 3, line 8, at end insert—

‘(f) the beneficial owners of any debt issued by a company receiving infrastructure assistance or one of their subsidiary companies,

(g) the beneficial owners of any company which has entered into an agreement to receive infrastructure assistance,

(h) for the purposes of this Act beneficial owner has the same meaning as that conferred by the Money Laundering Regulations 2007.’.

New clause 3—Customer due diligence measures

‘(1) Before any infrastructure assistance is given the Treasury must apply customer due diligence measures on any business requesting infrastructure assistance.

(2) For the purposes of this Act customer due diligence measures will have the same meaning as that conferred by the Money Laundering Regulations 2007.’.

[Chris Leslie]

Amendment 7, which stands in my name and those of my hon. Friends, seeks to ensure that the Bill provides a safeguard for taxpayers’ money. After all, £50 billion of guarantees could be underwritten for the private sector on pretty much any kind of scheme, and we heard fuzzy logic from the Minister earlier, when he said that infrastructure is not quite as defined as it appears in the Bill, and that some projects could be national and some foreign.

In some circumstances, underwriting can be beneficial and welcome—it can make schemes viable that were not viable previously and unlock infrastructure developments that might not otherwise take place, but in other circumstances there are disadvantages to underwriting. Underwriting means that gains from a private endeavour are privatised, but that any losses are socialised. The entrepreneur, the shareholder and the owner of a private company or project that benefits from the safety net provided by the taxpayer could profit well for many years if a scheme bears fruit, but if the scheme goes wrong and if there are failures in it, the losses fall on you, Mr Gale, on me, on hon. Members and, most importantly, on our constituents.

I make no apologies for standing up for the taxpayer’s best interests. It is important that we ensure that Ministers consider introducing clawback provisions that safeguard best value for taxpayers. The amendment is so unobjectionable that I cannot understand why the Government would object to it. The Opposition are simply saying that, in any agreement to give financial assistance, the Chancellor or Secretary of State

“shall give reasonable consideration to clawback provisions which safeguard the taxpayer.”

What do I mean by “clawback provisions”? Hon. Members who have served on the Public Accounts Committee will know that from time to time Governments have entered into contracts and sold privatised parts of the public sector. The purchasers have then gone on to make millions of pounds when they have sold on some of those assets. In this case, the guarantor has ended up facilitating a project, but the beneficiary of the guarantee went on to make significant sums.

We are simply saying that the Treasury needs to make sure that there are clauses in the underwriting contracts—the offers—that ensure that if significant gains are made in the long term, the taxpayer can have a share in some of the future profits. It is a basic principle—if the taxpayer helps to create profitability for a person and bears the risk of loss, that person can reasonably be expected to share some of the excess profits with the taxpayer. It is a basic principle of prudent stewardship of taxpayers’ money. It would also ensure that we deal with the question of moral hazard. We know that in some circumstances underwriting can cause difficulties if a scheme that might be shaky goes ahead as a result, which is of course a distortion of the market environment.

If schemes go ahead and make significant gains and provide future returns that are in excess of what might be expected, the taxpayer could have some rights to those. For example, in a prime executive housing site in central London developed thanks in part to the Government underwriting property market risks, the units may sell at multiples of expected initial prices, with vast profits for the developer. In the current situation, what would the taxpayer get? Foreign-owned energy companies want a pipeline stretching from our shores across the continent, which could well be underwritten by the provisions in the Bill. If we fund part of that as taxpayers, but the company makes significant long-term returns on the oil and gas, what should be the taxpayers’ share in that?

[Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)]

Do not the Government appear to be privatising the profits, but socialising the losses? How can that be fair?

[Chris Leslie]

That is indeed the approach taken in some of the underwriting provisions. Of course there can be circumstances in which that makes sense, perhaps to tip a project that is viable and in the national interest from something that might not happen to something that moves ahead in a way that benefits everyone.

The amendment does not even say that every contract should have a clawback provision: we are simply saying that the Treasury should be under a statutory obligation to give reasonable consideration to the insertion of clawback clauses in the contracts. That is the be all and end all of amendment 7 and I hope that the arguments are fairly straightforward. I look forward to hearing the Minister’s view.

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

I wish to speak briefly to amendment 12 and new clause 3, which are both in my name. Both relate to the reports that the Government propose in clause 3 should be annually produced, and to the transparency of the companies involved in this support for infrastructure, which I welcome.

Both the amendment and the new clause follow discussions that I have had with my right hon. Friend the Chief Secretary, who is now in his place on the Front Bench with his new ministerial colleague, whom I also welcome. The amendment and new clause are prompted by the fact that we often do not know the identities of the beneficial owners of the companies with which the Government do business. Companies often have shares owned by trusts or other companies based in countries that do not require disclosure of ownership, and I shall give a few examples.

The M6 toll road is owned by Midland Expressway Ltd, which is owned in turn by the Macquarie Motorways Group Ltd, which is in turn owned by Macquarie Atlas Roads International Ltd of Bermuda. It is controlled by Macquarie Infrastructure Group, but the identity of its investors and therefore of the owners of MEL remains unknown and undisclosed. In 2006, however, they paid themselves a £392 million exceptional dividend, and over six years made a return on their investment of more than 150% a year. This sort of profit at the public’s expense by we know not whom is not an acceptable arrangement, and I want the Government to be warned against it and to ensure that all owners are in the public domain.

Arqiva, as a private sector monopoly, is regulated by Ofcom. It runs all the transmission services for all UK terrestrial television broadcasters and for BBC Radio and most commercial radio services, owns two of the four digital multiplexes, supplies the Government with mobile and wireless communications and supplies three quarters of all police forces. It receives annual revenues of about £1 billion and makes annual losses of about £250 million. The ultimate owners of the company appear to be based in Bermuda, although we do not know who they are, and Arqiva has paid no corporation tax for four years.

Thames Water, the UK’s largest water supplier and a monopoly private sector company providing a public service with which the public therefore has no option but to deal was bought by Macquarie European Infrastructure Fund in 2006. The long-term debt held by the company was £3.4 billion and is now £7.7 billion. When the company was bought, Thames Water took on all the debt taken out by its owners to buy the company, which was more than £3 billion. To do that, it set up a company in the Cayman islands, Thames Water Utilities Cayman Finance Ltd, which is registered at an address at which are registered 18,000 other companies.

Over the past four years, Thames Water has made profits after tax of £314 million, £331 million, £225 million and £247 million, and has paid dividends of £398 million, £291 million, £271 million and £480 million, but in the last tax year paid no tax. In the previous year, it paid £500,000 in tax, and the year before that £16 million, yet it has a stable operating profit of about £600 million a year. I could go on. There are health care companies, and the company currently negotiating with the London fire brigade over the water to buy the old fire brigade headquarters looks as if it is based in the British Virgin Islands and the Isle of Man.

[John Healey]

rose—

[Simon Hughes]

I shall make one short point and then give way.

The other really important thing—this is the purpose of new clause 3—is that we should require due diligence to be carried out in the same way as we require it for money-laundering prevention. The trouble is that it is not done properly and is not effective.

[Hugh Bayley]

On a point of order, Mr Gale. I apologise for interrupting the hon. Gentleman. Surely, the point of a Committee stage is to allow a Bill to be considered at greater length and in greater detail than is possible on Second Reading. Owing to reasons beyond your control, Mr Gale, we have less than half the time for debate in Committee that we had on Second Reading. We have not yet finished clause 1. All the other clauses will go unconsidered in Committee. Would it be in order, Mr Gale, for you to make a report to the Chairman of Ways and Means about how this Committee stage went, so that he and the Panel of Chairs can consider whether it is appropriate for us to have such short Committee stages on the Floor of the whole House?

[Temporary Chair (Sir Roger Gale)]

The Chairman of Ways and Means will undoubtedly read what the hon. Gentleman has said, but the proceedings are in order according to the programme motion agreed by the House.

[Simon Hughes]

I give way to the right hon. Member for Wentworth and Dearne (John Healey)

[John Healey]

The right hon. Gentleman is making a powerful case against predatory capitalism and tax avoidance that ought to commend itself to the Treasury Front-Bench team. If they will not accept his argument and amendments, will he press them to a vote?

[Simon Hughes]

I am conscious that the first of my amendments is technically deficient—which was my fault, not anybody else’s—but I hope that Ministers will accept the point and amend the Bill in the other place. I will press them hard—I know that I have support from colleagues in both other parties in this place—to try to get the change made. I am hopeful that the Chief Secretary to the Treasury, who is in his place, has heard the proposition and will be able to respond.

20:59

Debate interrupted (Programme Order, 17 September).

The Chair put forthwith the Question already proposed from the Chair (Standing Order No. 83D), That the amendment be made.

21:00

Division 70

Ayes: 219

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Labour: 207
Scottish National Party: 4
Democratic Unionist Party: 3
Plaid Cymru: 3
Social Democratic & Labour Party: 2
Alliance: 1
Green Party: 1

Noes: 282

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Conservative: 235
Liberal Democrat: 46

The Chair then put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No. 83D).

Clauses 1 to 4 ordered to stand part of the Bill.

The Deputy Speaker resumed the Chair.

Bill reported, without amendment.

Third Reading

21:15

[Sajid Javid]

I beg to move, That the Bill be now read the Third time.

We have had an excellent and informative debate. I am grateful to everyone who has taken part in scrutiny of this important Bill and to members of all parties who have contributed as it has passed through the House, and I am grateful for the constructive, thoughtful and considered approach that has been adopted by most Members.

When the global crisis hit, the United Kingdom was among the hardest hit. Our recession was among the deepest, our deficit was among the largest, and our challenge to deliver sustainable recovery was among the greatest. The Government have set out a comprehensive strategy to deal with the challenges that we face. Fiscal, monetary, tax and structural reform are all playing their role to deliver our objective of lasting recovery and sustainable public finances. That strategy has reduced the deficit and helped to deliver near-record low interest rates.

As a result of the tough decisions that the Government have made and the responsibility and credibility of our long-term fiscal plans, the UK is a safe haven in a global debt storm. Ten-year gilt interest rates are now 1.9%, less than half what they were when we came to power. We are in a position to help unlock private sector infrastructure investment because of the strength and credibility of the UK Government’s balance sheet.

[Mark Lazarowicz]

May I briefly develop a point that I raised earlier? The Minister confirmed then that the Bill was a UK-wide measure, and that funding from the scheme would be provided for all parts of the UK from the Treasury. Will he now confirm that it will be possible for a private sector project in my constituency in Edinburgh to apply directly to the Treasury for support, without needing to go through the Scottish Government?

[Sajid Javid]

Yes, I can confirm that any application will go directly to the UK Treasury. If an application were made by one of the devolved areas, the Treasury would consider working with its counterparts in that area, but the decision would be made by the Treasury itself.

[Simon Hughes]

As my hon. Friend knows, my colleagues and I support the Bill strongly. May I give him a chance to deal with a point that he did not have a chance to deal with earlier? Will any investment made through the arrangements in the Bill allow the Government to track down the beneficial owners of any companies with which we do business, and to find out where they are based? May I also ask whether the due diligence rules that are set out in the Money Laundering Regulations 2007 will be applied, so that there will be a check on the interest rates, the creditworthiness and the ethics of the companies in question?

[Sajid Javid]

My right hon. Friend began to make his point in the earlier debate, but was unfortunately cut short. The Government are keen to ensure that when they analyse each application that will benefit from these guarantees, they establish the identities of the true beneficial owners of every scheme. Although that process is not included in what was deliberately designed to be a short Bill, much of the detail is included in the individual schemes. It will be in the UK guarantees scheme, and also in the programme that will cover the housing element of the guarantees, which will be published shortly.

My right hon. Friend also raised a point, in relation to one of his amendments, about the beneficiaries of the debt guarantees. He may have been alluding to the actual holders of the debt instruments. Although I understand and sympathise with his principle, this approach would not be very practical because debt instruments, particularly bonds, are tradeable and so, as with gilts, it would be hard to track the owners of those instruments.

[Chris Leslie]

I am glad that the Minister was addressing the important amendments tabled by the right hon. Member for Bermondsey and Old Southwark (Simon Hughes), but I wish to focus on transparency in respect of not only the beneficiaries, but the person receiving financial assistance. The Minister will know that, because of the knife, we did not get to my amendment asking for the details of the persons receiving some of this funding to be placed in the public domain. Will he give a commitment that that information—the details of those beneficiaries—will be made public?

[Sajid Javid]

The process of analysing each of the applications under the Bill will include a thorough due diligence process, which will examine the beneficiaries in each case. The Government will not issue a guarantee if they are not satisfied with the outcome of that due diligence process. It is not the standard procedure for the Government to publish all the information they look at when making decisions on guarantees, but the hon. Gentleman should be assured that this will be a very thorough process, which will have the assistance of outside sources if required.

[Simon Hughes]

It may be helpful if, at a date in the near future, friends from all parties might have an opportunity to talk through these things with the Minister when the other scheme on housing is published. May I alert him to the fact that the due diligence tests under the Money Laundering Regulations 2007 are, by objective assessment, not always effectively applied by the banks? So it is all very well having the tests in theory, but we need to ensure that the tests for this Bill are carried out in practice and that we can all see that they are effective and as stringent as they were meant to be.

[Sajid Javid]

My right hon. Friend makes a fair point, and I am more than happy to discuss this in further detail with him at a later stage.

[John Healey]

The Minister was boasting before the last interventions about near-record-low interest rates of 1.9%. What does he think about the judgment of that by the hon. Member for Wyre Forest (Mark Garnier), who was trusted and appointed by the Chancellor to be his party’s member of the LIBOR investigation committee? He said:

“The reason we have a low interest rate is because the economy is absolutely screwed.”

[Sajid Javid]

We have low interest rates because, for once, we have a Government who actually understand public finances. Less than an hour ago, the shadow Financial Secretary, in introducing his latest amendment, said that he was concerned about the use of taxpayers’ money—I had to have a little chuckle to myself, because what happened to that during 13 years of Labour government? Our national debt tripled. He also talked about clawbacks, and there is one clawback I would be interested to learn about. When the previous Government sold off our precious gold reserves, did they negotiate a clawback at that point? I do not think so.

[Several hon. Members]

rose—

[Sajid Javid]

I will plough on.

The Government are committed to delivering a sustainable, private sector-led recovery that is balanced across industrial sectors and across geographical regions. To achieve that ambition, the Government are committed to delivering world-class infrastructure. Firms will have access to the communications and transport networks that they need, wherever in the UK they happen to be, thus enabling Britain to compete on the world stage. Our national infrastructure plan sets out an ambitious but credible road map to deliver on that vision—a £200 billion pipeline of upcoming investment in key, large-scale projects, of which more than two thirds will, typically, be financed and delivered by the private sector.

A number of key infrastructure projects are close to starting construction but are being delayed because of the difficulties they face in securing the finance and investment that they require, and the housing market continues to suffer from an under-supply of homes in key areas. Even under favourable credit conditions, raising the amount of private finance required to deliver these projects and to meet these goals would be a challenge. However, the disruption caused by the instability of international financial markets and its adverse effect on long-term debt provision makes it clear that proactive, decisive action is needed now. The Bill will allow us to take that action and bring forward the investment that is needed.

As hon. Members will know, the principal aim of the Bill is to facilitate headline schemes for infrastructure and housing investment, to accelerate and bring forward significant investment in major UK infrastructure projects and to increase the number of homes being built and occupied. Through the Bill, guarantees provided by Government will help to ensure that when projects are struggling to access private finance due to adverse credit conditions they can now go ahead.

[Mr Raynsford]

What will be the success measures for the Bill? The Government have presumably set some measures by which its performance will be assessed. How many schemes and what type of schemes will go forward as a result of the Bill and how many will be required for it to be seen as successful?

[Sajid Javid]

That is a good question from a former Housing Minister—I am sure that he has all types of structures in mind, including housing. The Government cannot predict the applications we will receive under the schemes. As we said in Committee, how success is measured ultimately depends on how many projects the Government can help to finance. I am confident that many projects will come forward—they have already started to do so—and the requirement on the Government to report back annually will allow the right hon. Gentleman to judge the Bill’s success for himself.

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

Is not the real point that the Government are taking action? Does my hon. Friend agree that it is that action that is important? We do not necessarily need to consider what the measures of success might be in the future, as the real point is that the Government are actually doing something, unlike the previous Government.

[Sajid Javid]

As always, my hon. and learned Friend makes a fantastic point and I agree wholeheartedly.

The Government have agreed in principle, and subject to strict approvals criteria, to make financial support available to infrastructure projects, using the strength and credibility of our balance sheet to support the investment we need. The Treasury and the Secretary of State already have common law power to issue guarantees, make loans, and give other financial assistance. In addition, in some cases, Secretaries of State have express statutory powers to support infrastructure. However, the Treasury does not have authority to incur expenditure in relation to guarantees on the scale that I have outlined. Moreover, Members will know that there is a long-standing convention dating back to 1932 that Government should not rest significant and regular expenditure under common law powers on the sole authority of general supply legislation. So, to achieve the crucial level of financial support required for key infrastructure projects, we need new primary legislation.

The legislation authorises the Treasury and, where appropriate, the Secretary of State, to incur expenditure for providing financial assistance. The Bill will allow the Government to support crucial investment in key areas of economic and public service infrastructure. That will include utilities, such as energy and telecommunications; transport, such as railways and roads; infrastructure to provide public services, such as hospitals and schools; and housing development to deliver much-needed homes. We estimate that up to £40 billion of investment in infrastructure and an additional £10 billion in housing investment could be accelerated under the UK guarantee scheme using the powers in the Bill. Importantly, we will put in place strict guidelines and eligibility criteria for the schemes to protect the taxpayer and ensure the Exchequer does not take on unacceptable fiscal risks.

In Committee, I was asked about application time frames. Let me clarify that the time frames are detailed in the scheme rules, not in the Bill. Any proposal that receives an infrastructure guarantee will, as a minimum, have satisfied the requirements to be nationally or economically significant; financially credible; good value for money for the taxpayer; not solely dependent on a guarantee to proceed; and ready to start construction within 12 months.

The projects we expect to back will be structured to minimise potential losses to the Exchequer, so there will be a minimal impact on public sector net borrowing as a result. The exception is under the extreme circumstances that a guarantee is called upon or other forms of financial assistance are provided. Furthermore, we will levy a commercial charge for the services received by infrastructure providers, ensuring that companies pay a fair price for the benefits they receive and taxpayers receive a fair price for any risk being taken.

We have designed the UK guarantee scheme to ensure that critical infrastructure projects receive the investment they urgently require.

[Mark Durkan]

Further to the Minister’s earlier clarification, will he assure us that any moneys committed or guaranteed to support an infrastructure project in a devolved area will be truly and fully additional to allocations under the Barnett formula, or will some subsequent adjustments be sought?

[Sajid Javid]

I assure the hon. Gentleman that the commitments for guarantees or other moneys used under the Bill will have nothing to do with the Barnett formula and that it will be true and genuine assistance from the United Kingdom Government for any area of the United Kingdom, including the devolved areas.

In conclusion, I believe that this is an important and much-needed Bill. It will allow critical infrastructure projects that are being held back by adverse credit conditions to proceed. It contains measures that will support growth, jobs and families, all at a minimal cost to the taxpayer. It will support the UK’s construction sector by providing access to finance for financially credible and high-value-for-money projects. It will help unlock the investment that the UK requires, it will help make the UK one of the predominant places in the world to do business, and it will support sustainable growth that is balanced across sectors and regions. I commend the Bill to the House.

21:31

[Chris Leslie]

Although the Opposition will not oppose the Bill on Third Reading, we do not think that the matter should rest there. It is not the most impressive Bill ever placed before this august Chamber. The Minister said that he was grateful for the excellent and informative debate we have had so far, but we had a pretty farcical two hours of scrutiny in Committee; we managed to debate only clause 1 and had no debate on a third of the amendments that were tabled. I think the Government showed a large measure of disrespect to the process of parliamentary scrutiny in the way they misallocated time for today’s discussions.

This legislation is very much in the frame of mind of the “wait and see” game we are used to seeing from the Chancellor and the Treasury team. They hope that something will crop up but are not exactly sure what. The Minister said that he hoped there would be some expressions of interest in something or other but that, ultimately, he cannot predict the future. My right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford) asked the killer question: what will be the measure of success for the Bill? What answer did the Minister give? Essentially he said, “We cannot not really predict that, but we are confident that projects will come forward, so judge for yourself.” That is a totally embarrassing and appalling way of managing and advocating what should be a far more sophisticated approach to making public and economic policy.

The country deserves far better than the “wait and see” approach from Ministers. Surely there should be some semblance of projections for how the Bill will be deployed and some way of gauging what that interest is, rather than just putting it out there and hoping that something will happen. But of course we must not forget that the Bill is in large part a device to make it look as though the Government are actually busy. There is one effective sentence in clause 1 that covers the blushes of the accounting officers so that underwriting arrangements can span various financial years, but essentially this is makey-uppy, make-work legislation to make the Government look determined and busy in the Chamber.

Do not forget that we will have a growth Bill in due course, although we are still not clear what will be in it. The Prime Minister famously said that we cannot legislate for growth, so we will see what becomes of that Bill.

[Stephen Phillips]

The hon. Gentleman criticises the Minister for not laying out what the hon. Gentleman regards as the criteria by which the Bill’s success is to be measured. What are the criteria by which the Opposition will measure the success of the Bill, given that they are not going to divide the House on Third Reading?

[Chris Leslie]

We did not have time to discuss some of our amendments. We wanted far more information about the nature of the loans, underwriting and even grants being given to the private sector. The right hon. Member for Bermondsey and Old Southwark (Simon Hughes) tabled some important amendments that we did not get the chance to discuss in any great detail.

My amendment 5 simply talked about making sure that the public can know to whom the financial assistance is being given—a pretty basic tenet of transparency and accountability for public resources. The Minister could not say that that information would be in the public domain. We are not even necessarily allowed to know to whom the financial assistance is being given.

The Minister says that due diligence will be thorough as far as the Treasury is concerned, but what about the rest of us? Our constituents send us here to keep an eye on what the Executive are doing with public money. Without that basic information, how are we to judge the success of the legislation?

[Simon Hughes]

The hon. Gentleman knows that I share his frustration that we did not have more time to look at the issues in Committee. I suggest that that is not the Government’s fault. I remember many occasions when we had exactly the same problem under the Labour Government. Rather than blaming the Government, will he and his colleagues work with us to make sure that we have a system across Parliament—just a change in the rules that gives injury time if urgent questions or statements take up time for principal legislation? That is a way of solving the problem, and we would all be much happier as a result.

[Chris Leslie]

Of course we can have arrangements. There are perfectly available arrangements for making sure that there is time for legislation, but the Opposition do not control the timetabling of debates. I do not want to bang on about the procedure, but suffice it to say that it was inadequate.

We did not get a chance to debate the reporting mechanisms for what happens in terms of the financial assistance given to unknown persons. The hon. and learned Member for Sleaford and North Hykeham (Stephen Phillips) asked what measure we would have of the Bill’s success. I think that there should be reports not every 12 months, but every six months. If the issue is so urgent and there is a national emergency—if it is a case of, “Let’s get infrastructure going and press ahead with capital investment”—let us have far more frequent reports.

We do not know how much taxpayers’ money is on the line, how much is being committed per project, what form the financial assistance will commonly take, what type of companies will receive the financial assistance and even what type of infrastructure projects will receive such assistance. There are a lot of unknown unknowns in the legislation.

I hoped that we would have the chance to cover other key points. For example, I am particularly concerned about the availability of social housing. I mentioned earlier that in my city of Nottingham, not a single extra affordable social house was built in the last financial year. That is unacceptable.

Perhaps the situation will be made worse by the fact that the housing stock of certain local authorities has been transferred to housing associations, but quite a number of authorities either retain their council housing stock or have arm’s length management organisations —ALMOs—doing that. As I read the legislation, if someone’s local authority has not moved to housing associations, they will not be able to benefit from the underwriting as much as people whose local authorities have, because ALMOs and local authority-retained stock areas cannot be underwritten because of the borrowing constraints. There is a perfectly legitimate question—not a partisan question—about how we ensure fairness from one city to another and one area to another, but we did not get an opportunity to debate those issues.

[Sajid Javid]

I am pleased that the shadow Minister is now concerned about social housing for his constituents, because perhaps he can explain to them why, during his party’s 13 years in government, the number of social houses fell by a net 421,000 and the number of people on the social housing waiting list went up from 1 million to 1.8 million.

[Chris Leslie]

If the Minister were talking on the basis of having made some progress or having reached some level of achievement as regards housing policy, perhaps he would have the right to start throwing accusations about. Of course, far more could and should have been done in the past, but after two and a half years under his party’s Administration, where are we going on housing construction? According to the Construction Products Association, it is going through the floor; “free-fall” is the phrase linked to the CPA in this morning’s Financial Times.

[John Healey]

My hon. Friend is absolutely right. In particular, social housing construction, which was the subject of the Minister’s intervention, has plummeted by 25% in the past year. That is the direction it is going in under this Government.

[Chris Leslie]

Exactly; my right hon. Friend is right. Official data show that construction output is down by 11.6% on the year before, and the Construction Products Association predicts a 13% fall in infrastructure investment this year. When one starts to look at what is actually happening in the real economy and the real world today, it is clearly not about the announcements that Ministers bring to the Chamber as though they represent reality. The Bill may well go on to the statute book after this debate, but if the Government are relying on it alone, we remain concerned that the infrastructure schemes for housing, schools, child care, transport and so forth which should be proceeding will not move forward as effectively as they should.

There are other concerns that the Minister has not addressed, perhaps because the Government do not have an implementation plan that they can allude to. For example, they have not talked about state aid clearance. The Bill says that financial assistance can be given to particular industries and private sector ventures in operations, in maintenance and in repairs, but perhaps to the exclusion of other companies. What is the Government’s approach to state aid clearance from the European Union? If they hit such a barrier in the EU, will they simply say, “Well, another month, another quarter, another year has gone by and we didn’t get state aid clearance”? How are they approaching those barriers, and when will they report to Parliament about how they are going to tackle these issues? Those are more obstacles that they do not appear to have addressed in any way.

[Mark Durkan]

Does my hon. Friend perceive that under the Bill there is a risk of the UK Government granting guarantees to companies in a way that would mean that those companies could gazump other projects that had been developed, perhaps in devolved areas, and come in on a pretty anti-competitive basis, not only constraining the choices of devolved Administrations but ruining the chances and prospects of companies that were working on projects and making good offers in those areas?

[Chris Leslie]

That is the sort of point that should have arisen if we had had the opportunity properly to scrutinise the Bill.

Most people observing the Government and the workings of Parliament from outside assume that there is a level of sophistication in the Treasury and that the people there must have a level of intellect and capability that is somehow superior to the rest of us. They do not realise that when one looks inside the Treasury it is clear that those people are crossing their fingers, holding their breath, and making it up as they go along. This back-of-a-fag-packet approach to legislation simply will not do. This country’s growth prospects have been worsened by this Administration’s policies. As the former US Treasury Secretary, Larry Summers, wrote in the Financial Times this morning, economies that become stuck in a vicious circle of austerity and stagnation will find it ever harder to deal with their deficits and stabilise public finances.

The Office for Budget Responsibility’s out-turn figures show that the Government are cutting capital expenditure by more than £6 billion more than the previous Government planned. Combined with other austerity measures, this has resulted in a collapse in infrastructure investment. More than 119,000 construction sector jobs have been lost so far, and according to the Construction Industry Training Board the Government are spending £8 billion more in benefits for the 188,000 unemployed construction workers.

Borrowing is not falling, but rising this year—it is up 22% in the first five months of this financial year compared with last year. This Government are borrowing not to pay for investment and positive development, but to pay for the failures of their economic plan and to cover the costs of considerable increases in welfare in particular.

We need an alternative that focuses on action today and that understands that we need to introduce—really introduce—some of the capital schemes, roll up our sleeves and get on with them. The 4G mobile spectrum auction will take place soon and we hope that it will yield at least £3 billion. Let us put that money towards 100,000 new homes and put some serious investment into infrastructure. Let us build on some of the successes that we know Britain can deliver on infrastructure.

There is a complete mismatch between the Government’s words and their actions: our infrastructure is deteriorating, not improving; construction work is down, not up; and hundreds of thousands of young people are languishing on benefits while businesses delay the investment needed to maintain their competitiveness and market share. That is just not good enough and much more is needed than the vagaries of this Bill.

21:46

[Mr Raynsford]

The Minister opened his Third Reading speech by claiming that we had had an excellent debate. If only! He must have had his tongue in his cheek when he said that. We have had a shockingly truncated debate in which only one group of amendments has been properly debated. The second group received only a perfunctory opportunity for debate, and that was cut short by the timetable at 9 pm. That left no time for any debate on three of the Bill’s four clauses. Frankly, that is not an adequate performance and I hope that conclusions will be drawn in the other place.

When I intervened on the Minister to ask what success criteria had been set to assess the Bill’s effectiveness, after a rather telling pause in which he had difficulty identifying success criteria, he referred me to the provision for annual reports, thereby neatly highlighting the fact that we had not had a debate about the frequency of the reports. I tabled an amendment to have those reports at six-monthly intervals, in order to make the point that the urgency for action to stimulate investment in infrastructure required a more accelerated timetable than the leisurely one proposed by the Government. Of course, we had no chance to debate that amendment, because it related to clause 3, which we never reached.

As my hon. Friend the Member for Nottingham East (Chris Leslie) rightly emphasised, the Minister’s response to our request for a definition of the success measures was essentially one of “Wait and see”. Frankly, this country cannot afford to wait and see. We are facing a serious economic crisis, which is more acute in the construction sector than in almost any other sector of our economy, and the serious problems affecting the construction industry are impacting more widely on the whole economy.

Urgent action to stimulate construction investment is absolutely vital. In theory, the Government are aware of that, because the Bill’s explanatory notes start with reference to the need for fast-track legislation. The notes ask:

“Why is fast-tracking necessary?”

They go on to say:

“The financial assistance is designed to assist infrastructure projects that may find it difficult to obtain private finance…The Government understand that there are currently commercially and economically viable infrastructure projects that are stalled because they cannot secure private finance. The timing of the UK’s proposed financial assistance is currently unclear, but the evidence indicates that there are projects that might be waiting only for finance before they can proceed to the construction phase.”

That may well be correct. We share the Government’s stated objective of bringing forward and accelerating the necessary investment. However, if that is the case, why can the Government not name a single project that stands ready and waiting to receive the benefit of the financial guarantees offered by the Bill?

In July, Lord Sassoon, speaking for the Government, referred to £40 billion-worth of projects that were ready to go by the autumn. I put it to the Minister that we are now in the autumn. If we are to see a significant proportion of that £40 billion of investment reasonably soon, we need to know very soon what those projects are. I put it to the Minister and to all Government Members from both coalition parties that it is not good enough to talk about good intentions but fail to come forward with concrete, practical proposals, particularly when they have said that the projects are shovel-ready and that it is only the lack of financial support from the private sector that is holding them back. They have said that the Bill is here to unlock that potential.

I repeat my question to the Minister: what are the success criteria? We believe that one measure of success would be a considerable increase in the investment in infrastructure. Back in 2009, in the depths of recession, investment in infrastructure was running at about £11.5 billion. That was the highest level for 20 years and was an indication of the previous Government’s commitment to infrastructure investment as one of the measures to deal with recession. Investment in infrastructure is now down to £8.6 billion and further falls are forecast. That is the record of the present Government. They have presided over a catastrophic fall in construction activity. Infrastructure, which was one of the few parts of the construction sector to survive the worst of the recession in the early years, is also falling. The industry is desperate for assistance.

[Stephen Phillips]

The right hon. Gentleman refers to the record of the present Government, but it was under the previous Government that house building fell to its lowest level since 1923 and 1924. Why does he not welcome the action that this Government are taking in the way that it should be welcomed?

[Mr Raynsford]

The hon. and learned Gentleman clearly did not listen to the contribution of my right hon. Friend the Member for Wentworth and Dearne (John Healey), who pointed out that house building levels have gone down further under this Government. The levels are now at their lowest since the 1920s and are lower than when the Government came to office.

The sad thing is that when the Government came to office, the housing sector was recovering. [Interruption.] It was recovering. If Government Members look at the statistics, they will see that in—[Interruption.] They clearly do not want to listen to the statistics. In the second quarter of 2010, there were more than 30,000 new starts in the housing sector. That was a recovery from the depths of recession. Since then, that level has never been matched. In the latest quarter, the number of starts was down to 23,000—a level that is consistent with an output of less than 100,000 in any one year. That is a shameful record, for which this Government are responsible. I say to Government Members that, for all their bravado and posture, their record is a shameful one and will hang around their necks as the British electorate come to see just what a mess their failed policies have left.

In conclusion, this is a Bill that we cannot object to in principle, because investment in infrastructure and housing is vital. Sadly, it is a Bill that, on the evidence that we have heard tonight, will not deliver what the Government say they would like to see and what Opposition Members would dearly love to see: increased investment in infrastructure and housing. The country needs it and the industry needs it. Sadly, I fear that the Bill promises it, but will not deliver it. Only time will tell, but the Government’s failure to respond adequately on the question of the success criteria speaks volumes about how this is a triumph of spin over substance.

21:54

[John Healey]

I had not planned to speak on Third Reading, but I have been moved to do so by how seriously the Committee stage was curtailed this afternoon. For the entire Committee stage on the Floor of the House, we have had less time than a single sitting of a Public Bill Committee. I put it to the Economic Secretary that proper scrutiny would have done a great service to the objectives of a Bill as important as this, on which the Government are rightly looking to build a consensus in the House and beyond. I say that not least because those with an interest, who will have to finance, plan, deliver and make decisions about the big infrastructure projects that our country needs, could have had the chance to give evidence to the Public Bill Committee. That would not have held the Government up for long, but it would have made the Bill and the debate on it a great deal better.

We did not reach some amendments and new clauses today, but I hope that the Economic Secretary and his colleagues in another place will seriously consider amendment 3, tabled by my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford), about the frequency of reports; amendment 12 and new clause 3, tabled by the right hon. Member for Bermondsey and Old Southwark (Simon Hughes), on transparency, due diligence and the tracing of beneficial owners; and new clause 1, tabled by my right hon. Friend the shadow Chancellor, on social and affordable housing. The Economic Secretary gave the House the impression that he cared about that matter, so I hope he will take that suggested provision seriously.

I do not just say, as my right hon. Friend the Member for Greenwich and Woolwich did, that I can find little to object to in the Bill; I positively welcome the aims behind it, and I will welcome action should it follow from the Bill’s provisions. It makes sound sense to make the private sector balance sheet support the public sector balance sheet and bring the two together, especially at a time when public finances are limited and normal lending is constrained.

The principles and aims of the Bill are sound, but the question remains whether the Government can put schemes in place in a way that is simple enough and speedy enough to ensure that the necessary action follows. The Economic Secretary will have to forgive me if I have a certain amount of scepticism about that. After all, it is almost a year since the Prime Minister promised

“an all-out mission to unblock the system and get projects under way”,

and almost two years since the Government published their first national infrastructure plan. It is almost two and a half years since they set up the Infrastructure UK unit in the Treasury, which the Economic Secretary has mentioned today, with its remit to

“provide a stronger focus on the UK’s long-term infrastructure priorities and meet the challenge of facilitating significant private sector investment”.

It has been so long, and there has been so little action, that business, investors and industry are all understandably losing confidence in the Government’s ability to act. That was reflected in the CBI’s annual infrastructure survey published recently, which concluded:

“The message to Government is a wake-up call that businesses in Britain are looking for action and we haven’t seen any yet.”

It found that business and industry were less confident about the Government’s ability to drive investment into crucial transport, energy, water and waste projects than they were a year ago.

I hope that the Bill will be part of a proper rebalancing of the British economy, and that the Economic Secretary will recognise that investment is currently heavily skewed towards London and the south-east. I hope he will take seriously his own interest in seeing a cross-party consensus because, in the end, long-term infrastructure projects do not correspond to our political cycle—they require cross-party consistency, confidence and consensus. If the Bill can contribute to that, it will build a sound basis for that consensus for the future.

Question put and agreed to.

Bill accordingly read the Third time and passed.

Business without Debate

Monday 15th October 2012 Commons Chamber

Delegated Legislation

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Public Bodies

That the draft Public Bodies (Abolition of the Commission for Rural Communities) Order 2012, which was laid before this House on 16 May, be approved.—(Nicky Morgan.)

The Speaker’s opinion as to the decision of the Question being challenged, the Division was deferred until Wednesday 17 October (Standing Order No. 41A).

Her Majesty’s Revenue and Customs (Nurseries)

Monday 15th October 2012 Commons Chamber

Motion made and Question proposed, That this House do now adjourn.—(Nicky Morgan.)

22:00

[Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)]

I applied for this debate before Parliament adjourned for the conference recess, and my application was triggered by the decision by Her Majesty’s Revenue and Customs to close eight in-house nurseries on its estate, without any debate, consultation or negotiation. Things have moved on significantly during the intervening period, but many old and new questions remain unanswered so this debate remains pertinent and necessary.

I know that the Minister is committed to child care. On 17 October 2011, he told the House that the Government’s strategy on child care and work involved

“encouraging parents into work by promoting safe, good quality child care and providing incentives and wider options to encourage more employers to support child care provisions for their staff.”—[Official Report, 17 October 2011; Vol. 533, c. 686W.]

I fear, however, that the Government’s commitment has not cascaded down to senior civil servants in HMRC, and I will explain why by providing a whistle-stop tour of events.

In late August, HMRC advised that it had unilaterally decided to close eight nurseries that were part of a relationship between HMRC, Mapeley Estates Ltd, which owns some of the HMRC estate, and Bright Horizons, the actual nursery provider. As hon. Members will understand, my immediate concern was for the welfare of the 86 families whose children attended the custom-built nursery inside HMRC East Kilbride in my constituency. In my mind’s eye, I imagined that HMRC would have done its homework, and that I would be presented with incontrovertible evidence that the nursery was grossly inefficient, or that the number of children using the facility was too low to sustain in-house provision.

It was, therefore, with some trepidation that I wrote to HMRC to find out its reasons for the proposed closures. I received a response from Mr Mike Falvey, the chief people officer at HMRC, who—for reasons that will become obvious—probably holds the most inappropriate job title in the civil service. In his letter dated 5 September, Mr Falvey explained that the current contract between Bright Horizons and Mapeley originally ran for five years, but had been extended twice and could not be extended again. He advised that a further contract needed to be retendered, which HMRC had chosen not to do.

[Jonathan Evans (Cardiff North) (Con)]

I congratulate the hon. Gentleman on securing this debate. Early in the process he describes, he and I discussed this matter, primarily because my constituents were also affected and were involved in some of the changes. Does the hon. Gentleman think that the period of notice given was truly appalling—three months to locate young children elsewhere—and that inadequate thought was given by HMRC about how it should try to help a commercial solution?

[Mr McCann]

I agree entirely with the hon. Gentleman, and I think he will be even more appalled as I continue with my remarks. Not only did Mr Falvey advise that a future contract needed to be re-tendered—something HMRC had chosen not to do—he further advised that there were only eight nurseries for more than 300 HMRC offices, and that HMRC did not provide the same child care service for all staff. Finally, he advised that the number of parents using the nurseries was declining and, most importantly, that only a third of spaces were taken by children of HMRC staff.

There was only one problem: none of that information—provided by a civil servant who is paid more than the Prime Minister—was accurate. I found out several weeks later that the deal between Mapeley and Bright Horizons—the hon. Gentleman might want to listen carefully to this point—contained a provision for an extension of an additional year, to November 2013, which was never disclosed to me by civil servants. I also found out that, even if the eight in-house nurseries run by Bright Horizons were closed by HMRC, it would still have in-house nurseries, including a large one in the constituency of my right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown). Finally—I consider this to be the pièce de résistance—I found out that 63 of the 86 children at the nursery in my constituency were the children of HMRC staff.

[Lilian Greenwood (Nottingham South) (Lab)]

My hon. Friend sets out a powerful case. I understand that the nursery at Castle Meadow in my constituency currently has a 76% occupancy rate, that more than half of its users are HMRC staff, and that its outdoor play area has only recently been upgraded. Does he agree that that calls into question the account hon. Members have been given of a service in decline?

[Mr McCann]

My hon. Friend is absolutely correct. It also calls into question the decision taken—the account I was given was riddled with similar inaccuracies.

Armed with the knowledge that the HMRC rationale for the closure in my constituency was fallacious, I called Mr Falvey and explained that the arguments he had presented were plain wrong. I asked whether, in the light of reality, he would agree to my modest request to review the decision in full or in part. The chief people officer refused point blank to do so. To digress ever so slightly, it is not difficult to see why HMRC came 36th out of 37 Government Departments last year in the industrial relations league table. Perhaps it is going for 37th place this year.

After that setback, I contacted the Minister’s office to arrange to discuss the matter, feeling strongly that senior civil servants could not dismiss the concerns of elected Members of Parliament in such a shoddy manner, particularly as their decision to shut the nurseries was obviously based in full or in part on erroneous information. Alas, the Minister refused to meet me, claiming that the issue I wanted to discuss was operational. No further explanation was provided by his private office.

When hon. Members are running out of cards to play, politics can be frustrating. However, if you do not mind an “It’s a Knockout” analogy, Mr Speaker, I played my joker and applied for an Adjournment debate just before hon. Members packed up and left for the recess. Whatever gods exist, be they mortal or otherwise, my debate topic was picked for this evening. However, I did not want to wait until this evening—I wanted a resolution—and had a duty to look after my constituents and their children, so I once again pressed HMRC and set up a call with Lin Homer, chief executive of HMRC. Miss Homer was previously chief executive of the UK Border Agency and permanent secretary at the Department for Transport, where she worked on the west coast main line contract.

I spent 45 minutes on the telephone with Miss Homer on 21 September, only to find that the reason HMRC wanted to close nurseries had nothing to do with the reasons set out in Mr Falvey’s 5 September letter. I was advised for the first time that the decision was being made to rationalise the HMRC estate to save money on rent.

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

I thank the hon. Gentleman for giving way, for co-ordinating the letter and for showing leadership. Does he agree that one strange thing with regard to the estate is that the buildings will remain empty? That is another reason why the closures need to be looked at again, and why there should be a moratorium on them until we get the real facts so we can make a proper decision.

[Mr McCann]

I agree entirely with the hon. Gentleman— I shall expand on that in a moment.

I was advised for the first time that the decision to rationalise the HMRC estate was based on saving money on rent. Despite my reasonable request for a review and my suggestion on how to keep the nurseries open under new arrangements, Miss Homer confirmed that the closures would go ahead regardless.

The new information did not make any difference to the nursery in my constituency and others, as hon. Members have said. I shall suspend disbelief to explain why. The nursery contract is between Mapeley Estates and Bright Horizons. HMRC provides the space for free as part of its now-defunct commitment to family-friendly policies. It planned to shut the nursery in my constituency and leave 86 families—63 of them HMRC families—searching for new child care provision. What was to happen to the vacant space in East Kilbride, on which the taxpayer would continue to pay rent? Absolutely nothing. HMRC would continue to pay the full rent to Mapeley until at least 2015, the only difference being that a wonderful, fully equipped, custom-built nursery would lie empty, gathering cobwebs. Mr Speaker, you could not make it up.

In view of the new information, I made a further request to meet the Minister, and this time my request was granted. Lo and behold, a decision has now been made to keep the nursery in my constituency, and another in Cardiff, open.

[Jonathan Ashworth (Leicester South) (Lab)]

I pay tribute to my hon. Friend’s tenacity in pursuing this issue and I am, of course, delighted that the nurseries in East Kilbride and Cardiff will remain open. But the one in Leicester’s Saxon house will not remain open, even though it is oversubscribed and there are 15 staff on maternity leave who will want to use the nursery when they return to work. Does he agree with the hon. Member for Leeds North West (Greg Mulholland) that the Minister should announce a moratorium on these closures, otherwise children will face upheaval and staff will be made redundant?

[Mr McCann]

I agree entirely, and the rest of my contribution will explain why that is something that the Minister should actively consider.

The decision to keep two nurseries open was confirmed to me when I met the Minister and chief executive on 3 October. I have some remaining issues that I wish the Minister to address. The first is the package offered by HMRC to keep East Kilbride and Cardiff open. It is based on my original proposition to Lin Homer, offered on 21 September, that the accommodation could and should be utilised as a nursery until at least 2015, under new arrangements. However, that offer was made in ignorance of the knowledge that a clause already existed that would enable the eight nurseries to remain open for a further year, to November 2013. I therefore make a formal request to the Minister this evening to review the package offered on the grounds that his civil servants apparently did not know that the clause to extend the lease existed. This new information should allow all the nurseries to operate for a further year on the current terms and conditions.

My second request to the Minister relates to the behaviour of his senior civil servants. On 5 September, for different reasons, I asked the Minister of State in the Cabinet Office, at Cabinet Office questions, for a review of the civil service code. The Minister of State advised that the Minister for the Cabinet Office and Paymaster General had recently issued the first steps in the civil service reform programme, which sought to enlarge the area of accountability for senior civil servants. Mike Falvey, HMRC’s chief people officer, provided me with false information about why HMRC proposed to shut the eight nurseries. HMRC has denied that it had knowledge of the clause between Mapeley and Bright Horizons to extend the life of all eight nurseries for a further year, although that denial fits uneasily with the chronological order of events, which would have us believe that Bright Horizons attended a meeting in May 2012, was told that the nurseries would be shut in November 2012, and nobody mentioned the extension clause. I find that difficult to believe.

In any event, the chief executive presided over this debacle until 3 October, when there was a damascene-like change of heart, curiously coinciding with my meeting that day with the Minister. Does the Minister deem the actions of his civil servants to be incompetence or an attempt to mislead a Member or Members of Parliament? If it is incompetence, what is the Minister going to do about it? If it was an attempt to mislead, what is he going to do about it? I represented civil servants of all ranks as a full-time trade union official for most of my working life. Had a junior civil servant shown the same degree of incompetence or provided false information to a senior civil servant, they could have expected the sharp end of a capability or disciplinary process and, more often than not in my experience, that would have led to dismissal. Senior civil servants cannot be insulated or protected from the consequences of their behaviour. People expect their parliamentarians, acting on their behalf, to be given accurate information by Departments when it is requested, especially about decisions that have been made.

This debacle was presided over by two of the Minister’s most senior civil servants, and I have concluded that had it not been for the backing of the Public and Commercial Services Union, which represents HMRC staff, and the campaign in my area led by the families and children to keep their nursery open, and—I am utterly convinced—had this Adjournment debate not taken place, given its ability to shed light on the fundamentally flawed process that HMRC has followed, the nurseries thus far reprieved would not have been reprieved.

It is necessary that all the nurseries involved now be given the same reprieve. I am most grateful, therefore, that the procedures of the House of Commons have come to the rescue, and so too are the 86 families in my constituency. That said, those same 86 families, and countless others, were left in limbo, worried and put under tremendous stress over their children’s future child care arrangements. That matter cannot be swept under the carpet, so I hope and expect that the Minister will answer the direct questions that I have put to him.

22:14

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

I start by congratulating the hon. Member for East Kilbride, Strathaven and Lesmahagow (Mr McCann) on securing this debate and acknowledging his efforts to pursue this issue on behalf of his constituents. I know of the equally determined efforts of my hon. Friend the Member for Cardiff North (Jonathan Evans) to represent his constituents, and I also acknowledge the other hon. Members who contributed this evening.

As we are all aware, HMRC’s core purpose is to collect tax and distribute benefits. That is what it was set up to do and where its efforts and resources need to go. Of course, it also has a duty to be a responsible employer to its staff, and I appreciate that the decision to close eight on-site nurseries has been controversial, but this provides an example of the difficult balance that public services often need to strike between their public obligations and their responsibilities to their own staff.

As alluded to by the hon. Member for East Kilbride, Strathaven and Lesmahagow, I am not responsible for the day-to-day management decisions of HMRC, which is a non-ministerial Department, but I am the Minister to whom it is accountable for its core duties, which is why I am responding tonight. For the record, I think that HMRC’s management decision was broadly the right one, although I agree that its execution of that decision could have been better handled and has caused regrettable upset and uncertainty among the parents of the children in the eight nurseries.

The hon. Member for East Kilbride, Strathaven and Lesmahagow, my hon. Friend the Member for Cardiff North and other hon. Members have made several important points, and I will deal with them, but it is important to understand why HMRC made the decision it made. As I understand it, the on-site nurseries were originally set up in a small number of locations where Her Majesty’s Customs and Excise and the Inland Revenue were experiencing recruitment difficulties among younger workers. The nurseries helped them to attract and retain parents of young children, at a time when there was no other provision for child care in HMRC’s legacy organisations.

Over the years, the number of these nurseries has declined, and across the eight nurseries that we are discussing, which are run by the private nursery provider, Bright Horizons, there has been a decline in both the take-up of places overall and in the proportion of places used by HMRC staff—I shall return to that point later. In fact, across all eight nurseries, only just over one third of places are currently taken up by HMRC employees. I recognise, however, that this was not the case in East Kilbride and Cardiff, where more than half the spaces were taken up by the children of HMRC staff, as was also the case with the Nottingham site.

HMRC made an operational decision, however, to end and not re-tender the contract for these nurseries, for perfectly understandable reasons. First, in line with Government objectives, HMRC’s estates strategy is to reduce the size of its footprint and either to hand back unwanted space to its landlord or to make more productive use of the estate that it retains.

[Mr McCann]

Will the Minister explain why it is Government policy to waste taxpayers’ money by giving up space that they would then have to continue to pay rent on and leaving custom-built nurseries lying empty when they can be utilised by staff?

[Mr Gauke]

The hon. Gentleman rightly said that we had a meeting about this matter; indeed, Lin Homer was present for that meeting. He should therefore be aware that Lin Homer repeatedly said that it was possible that the site in East Kilbride could be used for other purposes before 2015.

[Mr McCann]

That is not true.

[Mr Gauke]

That is what the hon. Gentleman was told repeatedly in that meeting, but if he is accusing me of saying an untruth or saying that Lin Homer did not say that, I would be grateful to hear it.

[Mr McCann]

I will be absolutely clear: I have given the Minister evidence that I have been given completely misleading information by civil servants in HMRC that was not true from day one. I am further saying to him that the space in East Kilbride will be empty until 2015. That was confirmed to me in a telephone conversation by the chief executive, Lin Homer, on 21 September.

[Mr Gauke]

We are talking about a somewhat hypothetical situation because, as the hon. Gentleman well knows, the site will remain used as a nursery. However, I have to tell him that Lin Homer corrected him on a number of occasions in the meeting we had. She did not say that the site was not going to be used until 2015; what she said was that there were no immediate plans for reuse, although she was not ruling out reuse of the site before 2015, which is a fairly substantial distinction. That is what the hon. Gentleman was told. If he did not understand it, that is regrettable, but that is what he was told repeatedly in that meeting.

To continue, in the 18 months to October 2012, HMRC closed 140 buildings and rationalised a further 44. That has resulted in nearly £47 million of savings annually and reduced HMRC’s estate by around 193,000 square metres—about 16% of its total estate over that period. The spaces left when the nurseries close will be used for HMRC’s core purpose. Retaining space for on-site nurseries simply does not fit into that strategy.

Secondly, given the low nursery occupancy by HMRC staff, the justification for HMRC retaining the eight nurseries is no longer as strong as it was. That is particularly true now that HMRC, like other public sector employers, provides child care vouchers to all eligible staff, which they can use to pay for child care in any nursery they choose. The vouchers cover staff in more than 300 HMRC offices, which is far more than the eight affected by the closure of the nurseries. In making the decision not to re-tender the contract with Bright Horizons, HMRC researched the local areas and was confident that other nurseries had spaces at prices comparable to, and often lower than, those for the places in the Bright Horizons nurseries.

Thirdly, and most importantly in my view, HMRC was providing space to the private sector nursery provider free of both rent and utility bills. I do not believe it is sustainable for a Department, in effect, to provide a direct subsidy to a profitable private company. During these times of austerity, public bodies have a duty to make more productive use of the resources that they are paying for. I believe that HMRC’s decision was the right and responsible one, but I also think it could have gone about it better.

We have heard the criticism that HMRC did not provide sufficient notice to parents. I agree that more notice would have been preferable, but HMRC was honouring the contract between the estates provider and Bright Horizons, and the contracts between Bright Horizons and the parents, which were for three months’ notice. HMRC, in effect, gave Bright Horizons six months’ warning that the contract would end in November 2012, but Bright Horizons chose not to tell parents earlier than the three months’ notice provided for in their contracts. HMRC could have told its own parents earlier, but it might then have been liable for compensation claims from Bright Horizons.

The hon. Member for East Kilbride, Strathaven and Lesmahagow has made public statements to the effect that HMRC deliberately gave short notice in order to curtail debate. That allegation is inaccurate and unfair. HMRC was, as hon. Members would expect of a public body, seeking to honour the terms of legal contracts. It is also important to observe that Bright Horizons was given time to seek alternative accommodation for its nurseries, but that it made a commercial decision not to relocate and instead to close these eight nurseries. That was not HMRC’s decision: it was down to Bright Horizons. However, it is perfectly understandable, bearing in mind that it would have needed to pay market rent for other properties and that the take-up of places was, I understand, declining.

We have heard questions about why HMRC did not extend the contracts for another year or two, or at least extend contracts in the nurseries with high HMRC occupancy. This was a single contract for all eight nurseries, so it was not possible, within the contract, to extend any individual nursery alone. It was a question of all or none. Also, at the time that the decision was taken, HMRC honestly believed that the contract could not be extended. This was not a contract directly with HMRC, but one between Bright Horizons and HMRC’s landlord, Mapeley. HMRC was not party to all the details. In fact, it later transpired that HMRC’s original belief was incorrect, and that the contract could have been extended by another year for all eight nurseries. But, in any event, at no point did Bright Horizons ask for an extension to the contract, when HMRC opened discussions with it in May 2012.

It is highly regrettable that HMRC did not have all the correct information, but that does not alter the reasons for it wanting to end the on-site nursery provision. Nor does it mean, as the hon. Member for East Kilbride, Strathaven and Lesmahagow has alleged, that a senior HMRC official deliberately misled him. I simply do not see any evidence to support that allegation.

[Mr McCann]

Time is evaporating fast, and I do not want the Minister to finish without having time to answer my direct questions. However, on the point that he has just made, I was provided with reasons on 5 September by Mike Falvey, the chief people officer, yet when I spoke to Lin Homer on 21 September, a completely different reason was given. Can the Minister explain that? Will he also answer the two questions that I put to him in my speech?

[Mr Gauke]

Let me make as much progress as possible. I believe that the letter that the hon. Gentleman received in early September was based on a genuine understanding by HMRC of what the situation was. It related to a contract between Mapeley and Bright Horizons. In his subsequent conversation with the chief executive of HMRC, however, she set out more fully the context and the reasons for making the decision.

I want to turn to the hon. Gentleman’s suggestion that HMRC cannot reuse the nursery space for any other purpose. That is simply not correct. What HMRC cannot and should not do is commit, long term, to giving part of its estate over to nursery provision when it needs the flexibility to use that estate for its core purpose, and when it cannot do that, to negotiate giving it back to its landlord.

Things have moved on since this Adjournment debate was granted, and I think that HMRC has reached a better outcome. It has shown itself to be responsive to staff concerns and to the representations from the hon. Member for East Kilbride, Strathaven and Lesmahagow and my hon. Friend the Member for Cardiff North. When staff asked HMRC to consider transitional support, it swiftly put a package of such support in place, including some short-term financial relief for parents facing higher nursery costs and flexible working arrangements to allow parents to search for and settle their children into a new nursery.

HMRC also reopened discussions with Bright Horizons and asked it to consider whether it would enter into a different commercial arrangement at the three nurseries at which HMRC staff accounted for at least half of nursery places, under new contracts. I am pleased that Bright Horizons has agreed to a new and separate temporary lease in East Kilbride and in Cardiff, but it has made it clear that it does not see a commercial case for the third site, in Nottingham. The new lease for East Kilbride and Cardiff will run until August 2015, at which point Bright Horizons would need to relocate the nurseries if it wished to continue. HMRC will not end the lease before that time, although Bright Horizons will be able to close or relocate the nurseries at any point before August 2015, provided that it gives HMRC four months’ notice. That is more than the customary three months’ notice.

I know that this arrangement does not cover all the sites affected, but I believe that it is a sensible outcome. It provides a reasonable package of support for parents affected at all eight nursery sites, and two and a half years’ more nursery provision at Cardiff and East Kilbride. The long-term outcome is the same—

22:30

House adjourned without Question put (Standing Order No. 9(7)).