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Oral Answers to Questions
(12 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Edward Leigh (Gainsborough) (Con)
1. What plans he has for future private finance initiatives.
The Chancellor of the Exchequer (Mr George Osborne)
Last week, the Government announced the details of a new approach to replace the private finance initiative with private finance initiative 2, which is a more transparent approach to securing investment in public infrastructure. The Government will become a shareholder in future projects. We can all see now that the public sector was sharing the risk under PFI. We will now ensure that we also share in the rewards.
Mr Leigh
I looked at PFI for nine years on the Public Accounts Committee. I am sure people will agree that it was a good system that was scandalously misused to rip off tomorrow’s taxpayers for the sake of today and to rip off the public sector in favour of the private sector. How can the Chancellor assure the House that, if he is to use PFI 2 to pay for large infrastructure projects, we will not repeat the mistakes of the past?
Mr Osborne
I sat on the PAC under my hon. Friend’s chairmanship and I remember our investigations into various hospital and prison schemes that had gone wrong. As we saw it, there were three problems. First, contracts were very inflexible, so it cost a huge amount to do things such as change light bulbs or clean hospitals and the like. Secondly, the private sector got all the upside of the projects and made more money than expected. Thirdly, there was no control on the overall off-balance sheet total. We are addressing all three: we are creating more flexible and transparent contracts; we will share in the upside by taking a public sector stake and having the public sector on the board; and at the Budget we will set out a control total for PFI 2 liabilities.
Helen Goodman (Bishop Auckland) (Lab)
The Chancellor says that things are getting better, but Essex county council has issued a social impact bond on which it proposes to pay 12%—six times the price of gilts—and the Government are putting £20 million into subsidising this financing. Why are the Government wasting money like that at a time of austerity?
Mr Osborne
I think that most people in the House—I thought this was the case in all parties—welcome the innovative work being done on social financing and social impact bonds. Sir Ronald Cohen is one of the leading advocates of this and has been advising the Government. It is all about trying to get new forms of financing into improving our society. I would have hoped she would have welcomed that, rather than criticising it.
Mr Andrew Tyrie (Chichester) (Con)
Many on the Treasury Select Committee are already concerned that Whitehall Departments might again find themselves addicted to the “get something now, pay later” culture that bedevilled PFI the first time round. What is also concerning us is that a number of the proposals set out by the Government—I refer, in particular, to page 13 of the document produced—look more like motherhood and apple pie than something substantive enough to offset that Whitehall pressure. Will the Chancellor assure the House that, excluding value-for-money considerations, all accounting incentives to remove PFI from balance sheets will now be closed off to Departments?
Mr Osborne
I say to the Chair of the Treasury Select Committee that we will set out at the Budget—of course, he will want to scrutinise this carefully—a new control total for the off-balance sheet liabilities of PFI. We already now publish the whole-of-Government accounts so that people can see the liabilities built up under the previous Administration. The country now has more than £280 billion of PFI debt, of which only £40 billion has been paid off, so he is absolutely right to hold our feet to the fire to ensure that we properly account for this and remove perverse incentives in Whitehall. We want the private sector investing with us in public services, however, so it is important that we have the right regime.
Mr Geoffrey Robinson (Coventry North West) (Lab)
The House will be pleased that the Chancellor is not trying to get rid of PFI, but trying to improve it in those areas where it can be improved. What does he mean, however, when he says that the Government will take a stake in the projects? How will he do that? It will need more than a director on the board, which I heard him say.
Mr Osborne
We propose to take a public sector share and put in an equity stake on behalf of the public sector. It will be a minority stake, but it means that we will share in the upside, and, of course, in order to keep an eye on our investment, we will have a director on the board representing the public sector, which was not the case in previous projects.
Tim Farron (Westmorland and Lonsdale) (LD)
Cumbria’s health service is under immense pressure because of PFI deals going back a decade and more. What can the Chancellor do to go toe-to-toe with the private sector to renegotiate existing PFI deals to ensure that more money goes to front-line health services?
Mr Osborne
We are seeking to renegotiate existing contracts to get better value for money for taxpayers and local communities. I have a figure here showing that in north Cumbria the public were being charged £466 to replace a light fitting under the PFI contract that was signed. That is completely unacceptable—it is people being ripped off. That is what we are seeking to end.
Mr John Baron (Basildon and Billericay) (Con)
2. What steps he is taking to support business creation.
Chris Skidmore (Kingswood) (Con)
3. What steps he is taking to encourage private sector job creation.
Andrew Jones (Harrogate and Knaresborough) (Con)
7. What steps he is taking to support business creation.
Richard Graham (Gloucester) (Con)
9. What steps he is taking to encourage private sector job creation.
The Chancellor of the Exchequer (Mr George Osborne)
Some 1.2 million private sector jobs have been created since the first quarter of 2010. Last year more new businesses were created than in any other year on record. In the autumn statement we took further steps to support job creation and business creation by reducing the corporation tax rate to 21%, extending the small business rate relief scheme to support 500,000 small businesses and increasing by tenfold the annual investment allowance to £250,000.
Mr Baron
The Labour Government more than doubled the national debt. This Government have done well to reduce the deficit by 25%, but this still means that we are adding to our debt, albeit at three quarters the pace. Financial repression and quantitative easing will ease the debt somewhat through higher inflation, but may I encourage the Chancellor, despite some positive measures in the autumn statement, to be bolder in encouraging economic growth, including by cutting small business corporation tax, which is the only credible way—
Mr Osborne
My hon. Friend is right that the deficit is how much we add to the debt each year. That is why we have to bring the deficit down—it has come down by 25%—but he is also right that we have to have a competitive private sector. We have to have a private sector-led recovery, which is why we have increased the annual investment allowance, for example. He recommends a cut in the small company corporation tax rate. [Interruption.] The shadow Chancellor from a sedentary position said, “That’d be a good idea,” but he was going to put the rate up when we came into office. We have cut the rate to 20% and increased the annual investment allowance.
Chris Skidmore
Does the Chancellor agree that increasing the annual investment allowance from £25,000 to £250,000 will make a huge difference to local small businesses and lead to additional and vital job creation in the private sector?
Mr Osborne
I think it will help, alongside the reduction in the small company rate. I am pleased that the Federation of Small Businesses said we had listened to the concerns of members, and the chambers of commerce were also supportive. Over the next two years this measure will encourage investment from small and medium-sized businesses, although all businesses that invest will benefit.
Andrew Jones
As someone who has set up small businesses myself, I think that encouraging small business creation is part of the solution to the country’s economic problems. Does my right hon. Friend agree that it is a sign of the strength of the private sector in this country that we have seen new businesses created in such record numbers and that this has been one of the factors in generating the 1 million-plus private sector jobs created since the election?
Mr Osborne
It is welcome that more than 1 million jobs have been created in the private sector. We now have record female employment, which is also welcome, while the number of those on out-of-work benefits has fallen by 190,000, which is something I hope everyone would welcome.
Mr Pat McFadden (Wolverhampton South East) (Lab)
May I congratulate the Chancellor on his U-turn on capital allowances for manufacturing industry? When did he realise that his previous stance of dismissing them as complex reliefs was wrong and at total variance with the Government’s stated aim of supporting manufacturing? When did his conversion to supporting these allowances take place, as long called for by Labour Members and the Engineering Employers Federation?
Mr Osborne
The first thing I would say is that we reduced the small companies rate—which would have gone up to 22% under the plans put in place by the last Labour Budget—to 20%. We have now introduced a £250,000 annual investment allowance for small and medium-sized businesses for the next two years. The right hon. Gentleman says that the Labour party had been calling for this. It had 13 years to introduce a £250,000 annual investment allowance. There were all those Budgets that the shadow Chancellor wrote and he did not put it in place.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
The Chancellor will know that the all-party parliamentary groups on Yorkshire and North Lincolnshire and on manufacturing welcome the change in attitude towards the capital allowances. However, businesses in Yorkshire are saying that they are looking for some leadership and some light at the end of the tunnel, and they ended up feeling thoroughly depressed after watching the autumn statement. When is the Chancellor going to show more leadership? Let us see some light at the end of the tunnel.
Mr Osborne
I have to say that the reaction to the autumn statement from the business organisations of Britain was very positive. It was warmly welcomed because we are maintaining control of the public finances, which is a prerequisite for stability and recovery, and because we are taking steps to cut the corporation tax rate and increase the annual investment allowances. I still do not know whether Labour supports the cut in corporation tax. Its Front Benchers have been sending out confused messages on that over the past couple of days. Perhaps we will hear from the shadow Chancellor when he gets to his feet.
Rachel Reeves (Leeds West) (Lab)
The Chancellor knows that business success is key to getting our economy growing, to getting the deficit down and to creating jobs. Will he therefore tell us what was the judgment of the Office for Budget Responsibility on the impact on growth of the measures that he announced in the autumn statement last week?
Mr Osborne
The Office for Budget Responsibility said that there was a measurable impact on growth in the short term, and of course we have to pay for this in the long term, so it has taken that into account. I have always said that we want to improve the long-term supply potential of the British economy, and one of the most encouraging signs is that the UK, which was becoming a less and less competitive place to do business, is now back in the world’s top 10 competitive economies.
Rachel Reeves
I am not surprised that the Chancellor does not want to answer my question, because the OBR’s assessment is that his measures will add just 0.1% to UK gross domestic product by 2018. That must also be set against the fact that growth has been downgraded this year, next year and every year of this Parliament. Is it not the truth that the Chancellor has no plans for jobs and growth, and that that is why the Government are set to borrow an extra £212 billion during the course of this Parliament, breaking the fiscal rules that he gave to this country?
Mr Osborne
When the Labour party was in office, its approach led to the economy shrinking by 6% of GDP. We have set in place plans to ensure that the deficit it left us is dealt with and that our economy is more competitive. I would have thought that the hon. Lady would welcome the fact that we have over 1 million new jobs in the economy and a record rate of small business creation. That is something to celebrate in our economy.
Mr Nick Gibb (Bognor Regis and Littlehampton) (Con)
May I welcome the Government’s announcement in the autumn statement to put more resources into ensuring that multinationals pay their fair share of tax? That is a key measure to help UK-based business creation. May I also suggest that the Chancellor consider introducing a requirement on multinationals to disclose in advance significant connected party transactions as a way of speeding up transfer pricing inquiries?
Mr Osborne
My hon. Friend makes a good point. Obviously, everyone is frustrated when they see multinational companies breaking the tax laws or interpreting them in such a way that they basically avoid paying corporation tax. That situation is not acceptable. We are putting more money into the enforcement of the rules and working with countries such as France and Germany to change the international rules so that we can have a better situation in the future. It would not work if we just acted unilaterally, because these are by definition multinationals. That is why we have to work with other countries.
Yvonne Fovargue (Makerfield) (Lab)
4. What recent assessment he has made of the effect of the Government’s fiscal policies on the level of child poverty.
Mr David Hanson (Delyn) (Lab)
13. What recent assessment he has made of the effect of the Government’s fiscal policies on the level of child poverty.
The Economic Secretary to the Treasury (Sajid Javid)
The Government have protected vulnerable groups as far as possible while undertaking the urgent task of tackling the record fiscal deficit that we inherited. Work remains the best and most immediate way out of poverty, and we have continued to prioritise work incentives through welfare reform and increasing the personal allowance.
Yvonne Fovargue
The total cost to a two-child family on the minimum wage of the freeze in child benefit, the 1% increase in working tax credit and the VAT increase over four years will be £5,033. The extra tax allowances and the child tax credit will save them only £1,770, leaving them with a net loss of £3,263. How many more children do the Government expect to be in poverty as a result of those cuts?
Sajid Javid
I know that the hon. Lady cares deeply about the issue and she has done a lot of good work with vulnerable families in the past. She will be concerned, as I am, that under the last term of the previous Government child poverty, as defined by the Department for Work and Pensions, increased by 200,000 to 3.9 million. This Government believe that there should be a relentless focus on the causes of poverty, such as worklessness, so I hope that she will join me in welcoming the fact that the number of people employed today in Britain is at a record high.
Mr Hanson
He cannot get away with that, Mr Speaker; it is complete nonsense. Will he confirm—yes or no—that people on the minimum wage will be worse off at the end of this Parliament because of the tax and benefit changes than they would have been from the tax savings my hon. Friend the Member for Makerfield (Yvonne Fovargue)mentioned a moment ago? Cuts on child benefit and on working families tax credit will make people poorer: will he confirm that?
Sajid Javid
I am not going to take any lectures on child poverty from the right hon. Gentleman—[Interruption.]
Sajid Javid
The right hon. Gentleman was a senior member of the previous Government, who, over 13 years, presided over an increase in the number of workless households to a record 3.9 million. In his constituency, in the last Labour term, the number of youth jobseeker’s allowance claimants increased by 148%. I hope that he will join me in welcoming the fact that such claims are down by 19% under this Government.
Charlie Elphicke (Dover) (Con)
May I ask the Minister to confirm that the previous Government’s child poverty targets were missed by 600,000, that according to the latest figures child poverty fell last year by 300,000 and that universal credit will reduce child poverty further, by up to 350,000?
Sajid Javid
My hon. Friend is absolutely right. The Government are relentlessly focused on eradicating poverty and the measures he has talked about, such as universal credit, increase work incentives and help people back into work.
George Freeman (Mid Norfolk) (Con)
Is it not the truth that the best way to tackle child poverty is to have parents in work? Does my hon. Friend agree that the creation of 1.2 million new private sector jobs, the taking of more than 1 million of the lowest paid out of tax and the abolition of the rise in fuel duty planned by the previous Government make the average family more than £125 better off and does more for child poverty than any scaremongering by the Opposition?
Sajid Javid
That is right. If we can deal with worklessness, we can help deal with poverty. In the past two years, 1.2 million private sector jobs have been created—more than were created on a net basis by the previous Government over 10 years.
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)
Last month, the Joseph Rowntree Foundation said that more than 6.1 million people in poverty are in working households. Does the Minister believe that a real-terms cut to in-work support for the lowest paid helps to tackle child poverty and will he agree to publish a child poverty impact assessment alongside the Bill on benefits uprating?
Sajid Javid
As I have said, we will not take any lectures from the Opposition on child poverty. I used the previous Government’s figures. She talks about workless households, but they increased by 200,000 during Labour’s last term in power and I believe that the policies the Government have in place to deal with the root causes of poverty are the right ones.
Penny Mordaunt (Portsmouth North) (Con)
5. What consideration he has given to the introduction of transferable tax allowances for married couples.
The Exchequer Secretary to the Treasury (Mr David Gauke)
The Government’s commitment to introducing a proposal to recognise marriage through the tax and benefits system remains firm. We want to show that we value commitment, so we will consider a range of options and advance proposals at the appropriate time.
Penny Mordaunt
With the introduction of the tapered removal of child benefit with one parent earning between £50,000 and £60,000, will the Minister give further consideration to how we can support families at this difficult time?
Mr Gauke
My hon. Friend is right to highlight the fact that we have introduced a range of measures that will have an impact on all parts of society, including the highest earning 10% to 15% through the child benefit changes. Of course, we look to do whatever we can to support families. That includes providing free early learning for three and four-year-olds and extending the 15 hours a week of early years education and care from 2012-13 to all disadvantaged two-year-olds.
Steve McCabe (Birmingham, Selly Oak) (Lab)
Is cutting maternity pay part of the Government’s strategy to support stable families?
Sheila Gilmore (Edinburgh East) (Lab)
6. What assessment he has made of the effectiveness of the funding arrangements which he agreed with the Secretary of State for Work and Pensions for the Work Programme.
The Chief Secretary to the Treasury (Danny Alexander)
The Work programme is the biggest single payment-by-results programme Great Britain has ever seen. The funding arrangements I agreed with the Secretary of State for Work and Pensions ensure that providers are paid to find sustained job outcomes for those who are or are at risk of being long term unemployed. For the very first time, providers are paid in part through the benefit savings that they generate.
Sheila Gilmore
The Chief Secretary wants us to look at the cheapness of the scheme to providers, but buying cheap can be a false economy if the product does not work. The price here is being paid by people staying in long-term unemployment, not getting jobs and still being on benefit. Is not the Work programme a failure?
Danny Alexander
No, I do not believe it is. The hon. Lady refers to costs, and she will know that the flexible new deal, which the Work programme replaced, cost £7,495 per job outcome; that compares with costs of about £2,000 under the Work programme. It is a great deal more cost-effective. The hon. Lady will also be aware that 56% of those first Work programme starters have come off benefits and that up to September this year, there have been 200,000 job entries, as reported by providers, so there is a sense of progress in the Work programme, too.
Andrew Bridgen (North West Leicestershire) (Con)
Does my right hon. Friend agree with the CBI, which has said that the Work programme has already helped to turn around the lives of thousands of people and is delivering real value for money for the taxpayer?
Danny Alexander
Yes, I do agree. The fact that the job outcomes are more stretching than previous schemes before providers get paid and that they are paid only for results—not just for activity—of course means that it is harder for them to start with, but the fact that there have been 200,000 job entries under the scheme up to September 2012 speaks for itself.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
8. What recent assessment he has made of the effect of the Government’s fiscal policies on the level of long-term youth unemployment.
The Financial Secretary to the Treasury (Greg Clark)
I have made a recent assessment of the impact of fiscal policies on youth unemployment rates. With few exceptions, European countries with the highest deficits also tend to be the countries with the highest youth unemployment rates. In this country, a big increase in the deficit under the previous Government went hand in hand with a big increase in the rate of youth unemployment. Under this Government, the deficit is now coming down, and so is youth unemployment—including, as the hon. Lady knows, in her own constituency.
Meg Hillier
Overall in my constituency, the number of claimants on jobseeker’s allowance in October was the 22nd highest of all constituencies. Among 18 to 24-year-olds, the rate was 10.4%. That is far too high. My constituency has regular visits from the occupants of No. 10 and No. 11 Downing street to extol the virtues of Tech City, but what is the Treasury doing to make sure that my constituents are able to get any of the jobs created, especially when the Work programme is also failing them?
Greg Clark
The hon. Lady was a Minister in the last Government, and she will know that in her own constituency there are fewer young unemployed people now than there were in the last year of the Government of whom she was a member. I am surprised that she has not taken the opportunity to refer to the fact that the rate of youth unemployment in Hackney South and Shoreditch has fallen by 20% over the last 12 months.
Andrew Selous (South West Bedfordshire) (Con)
May I tell my right hon. Friend that under the last two Labour Governments, the youth unemployment claimant count in South West Bedfordshire rose by 180%, whereas it has fallen by 6% since we have been in office? Does that not show that, in difficult times, although there is, of course, further to go, we are moving in the right direction?
Greg Clark
My hon. Friend is absolutely right. That is why it is important for us to maintain the course, pay down the deficit and build confidence in the labour market. We know what happened under the previous Government: in their last two years, long-term youth unemployment doubled.
Andy Sawford (Corby) (Lab/Co-op)
Is the Minister aware that recent independent surveys show that Corby and east Northamptonshire is one of the most difficult places in the country for a young unemployed person trying to find work? I can tell him that I meet young people, day in, day out, who are desperately trying to find work, so will he look at the unique case for having an enterprise zone for Corby and east Northamptonshire, extending by one the number of enterprise zones that the Government have created?
Greg Clark
I welcome the hon. Gentleman to the Chamber. When he organised a day think tank, he and I had some very productive exchanges. I should be happy to meet him to discuss the situation in Corby, which is an enterprising town with the potential to create many jobs. As he will know, under the “city deals” system I am responsible for devolving powers to places throughout the country, and I am keen to receive more applications.
Dan Rogerson (North Cornwall) (LD)
A significant factor for young people seeking work in rural areas is the cost of transport and fuel. I therefore welcome last week’s announcement, and also the news that the Treasury is considering extending the rural islands fuel discount to some especially rural parts of the mainland. Such a change would make a huge difference to some of the poorest communities in the United Kingdom, and would encourage growth in employment.
Greg Clark
My hon. Friend is absolutely right: that is one of the reasons why we were determined to reverse, and then to cancel, the fuel tax increase proposed by the Labour party. As for the rural scheme that he mentioned, we are having conversations with the European Commission in order to establish whether we can proceed with it.
Sir Tony Baldry (Banbury) (Con)
10. What steps he is taking to reduce the cost of living.
Graham Evans (Weaver Vale) (Con)
15. What steps he is taking to reduce the cost of living.
The Chief Secretary to the Treasury (Danny Alexander)
The Government continue to take steps to support households. We will increase the personal allowance further to £9,440 in April 2013 to support hard-working individuals. That cash increase of £1,335 in 2013-14 is the largest ever. We have also cancelled the 3p fuel duty increase that was planned for January, and announced a third council tax freeze and a two-year reduction in the cap on rail fares.
Sir Tony Baldry
I just want to make sure that I have got my figures right. Am I correct in thinking that under the Labour Government fuel duty rose by 20p, and that had they remained in power, they would have planned for it to rise by 13p more than it will rise under this Government?
Danny Alexander
As usual, my hon. Friend has his facts absolutely right. The action taken on fuel duty by this Government means that in April next year, pump prices will be approximately 13p a litre lower than they would have been had the last Government remained in office.
Graham Evans
I welcome the announcements in the autumn statement, particularly the announcement of an increase in the personal allowance, which will take 2.6 million people in the north-west of England out of income tax altogether. Will my right hon. Friend reassure us that he will continue to raise the allowance to ensure that it always pays to work?
Danny Alexander
Ensuring, through increases in the personal allowance, that low and middle-income workers in particular can keep more of the money that they earn rather than handing it over to the Exchequer helps those people to deal with pressures related to the cost of living. I can certainly assure my hon. Friend that I will continue to push that policy, along with my Liberal Democrat and Conservative colleagues. At the time of the last general election I made a key promise to lift the income tax threshold to £10,000, and I intend to deliver that promise as soon as possible. [Hon. Members:“ Like the promise about tuition fees?”]
Mr Speaker
Order. Labour Members are shouting their heads off, and the hon. Gentleman cannot be heard. Let us hear from Mr Davies.
Geraint Davies
The incomes of the top 10% in Britain have risen by 11% in the last two years, but we heard in the autumn statement that they would be cut by only 0.5%. Does Chief Secretary not agree that those people are in a fantastic position to take on increases in the cost of living, unlike the poorest 40%, who are being unnecessarily smashed by this Government?
Danny Alexander
The hon. Gentleman should recognise that the top 10% make up the part of the population that is contributing most to dealing with the financial problems caused by the Labour party—the mess that we are trying to clean up—both in cash terms and in terms of a share of their incomes. He should welcome the fact that this Government are doing more than any previous Government to ensure that the wealthiest in society contribute most to sorting out the financial problems that he and his colleagues created.
Alison Seabeck (Plymouth, Moor View) (Lab)
In the interests of transparency, will the Chief Secretary and his colleagues make public an impact assessment relating to child poverty before the welfare uprating Bill is laid before Parliament, not least because it would help us to understand the impacts of the cost of living and benefit freezes on low-paid working families?
Danny Alexander
The Department for Work and Pensions will, of course, publish an impact assessment in the normal way when the Bill is published.
Stephen Williams (Bristol West) (LD)
The most significant way in which any Government can help people with their household budgets is to put more money in their pockets and purses, particularly money that they have earned themselves and which is subject to taxation. Does the Chief Secretary agree that one of the most important things that the coalition Government will do is lift millions of people out of income tax altogether, and, by April next year, deliver a broad income tax cut of £600 a year in relation to the level in April 2010?
Danny Alexander
Like my hon. Friend, I want to build a strong economy and a fair society where everyone has a chance to get on in life. The commitment to raise the income tax threshold was a commitment that he and I and all our colleagues made at the general election, and we are delivering on it in Government. There is a tax cut for working people cumulatively over this Parliament, and next year it will be worth £50 a month to people on low and middle incomes. That is real help for hard-working families at what is a difficult time.
Mr William Bain (Glasgow North East) (Lab)
Average wages in Scotland have fallen by 7.4% under this Chief Secretary, and from next year 182,000 couple-families in work with children will stand to lose money through tax credits. Why are this Government always standing up for millionaires while hammering the strivers?
Danny Alexander
I will not take any lectures on millionaires from the Labour party, which thought it appropriate that a millionaire private equity fund manager should pay less on his income than the person who cleans his office. Labour’s record on taxing the wealthy, dealing with tax avoidance and closing tax loopholes is nothing to be proud of, and the hon. Gentleman should stop raising that point.
Stephen Gilbert (St Austell and Newquay) (LD)
11. What steps he is taking to discourage tax avoidance by wealthy people.
The Exchequer Secretary to the Treasury (Mr David Gauke)
In seeking a fair contribution from the wealthy, the Government’s first priority is to tackle those who avoid or evade tax. The autumn statement contained a number of new measures to ensure that, including repatriating £5 billion in unpaid tax from Switzerland and new investment in Her Majesty’s Revenue and Customs to enable it to expand its anti-avoidance activity, in particular the specialist unit that supervises the compliance of affluent individuals.
Stephen Gilbert
People in Cornwall expect the wealthiest to pay their fair share of tax, so I welcome the Government’s planned offshore tax evasion strategy, which is much needed to track down funds that have been squirreled away and undertaxed. Will it cover British overseas territories as well as Crown dependencies, and what is the Minister’s assessment of the potential revenue?
Mr Gauke
Yes, it would. My hon. Friend gives me an opportunity to highlight the progress we have made in particular with the Isle of Man in ensuring there is much greater exchange of information. The net is closing in on those who wish to evade their taxes. Whether in Switzerland, Liechtenstein or the Isle of Man, it is becoming ever harder for them to evade paying taxes.
Katy Clark (North Ayrshire and Arran) (Lab)
Does the Minister think that HMRC losing an extra 10,000 staff will make it harder or easier to tackle tax avoidance and evasion?
Nigel Adams (Selby and Ainsty) (Con)
Does the Minister have any explanation as to why Labour never introduced a general anti-abuse rule when in government?
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
The Government’s shares for rights scheme is not only unpopular with the business community, but the head of the Institute for Fiscal Studies warned in the Financial Times today that it will
“foster a whole new avoidance industry”,
and the Office for Budget Responsibility believes the tax avoidance loophole it will create could cost up to £1 billion. Does the Minister agree with the OBR estimate? If so, why is he pressing ahead with a policy that is unpopular with business and could cost the taxpayer £1 billion?
Mr Gauke
First, it is not unpopular with business. Business groups have welcomed it, and the fact is that some aspects of our employment law can stand in the way of job creation. The OBR estimates that within the scorecard period this policy will cost £80 million in 2017-18. We believe it is the right move in order to ensure we have a more competitive environment.
Natascha Engel (North East Derbyshire) (Lab)
12. If he will take steps to open up dark pool trades on the UK equity markets to greater transparency.
The Financial Secretary to the Treasury (Greg Clark)
The regulation of dark pools is subject to the markets in financial instruments directive, which is currently undergoing legislative review. The Government are negotiating to ensure that all dark pools are subject to regulatory oversight and that appropriate transparency measures are applied to them. However, we believe that dark pools provide a valuable service to pension funds and other investors and that regulation should not prohibit that.
Natascha Engel
Dark pools have that name for a reason: they are murky and not transparent, allowing financial institutions to buy and sell shares without anybody seeing what they are doing. Why will the Minister not just apply the same rules to dark pool trades as are applied to the open stock market, where everybody can see exactly what is sold, when it is sold, to whom it is sold and at what cost?
Greg Clark
As you well know, Mr Speaker, dark pools allow one party to keep important details from other parties, which is a fair description of the economic policies of the Labour party. I say to the hon. Lady that the providers of pension funds are very clear that to over-regulate the dark pools would lead to a reduction in people’s pension pots. They have said that over the course of a 40-year pension fund this would require the pension fund holder to work an extra year. That is not in anyone’s interest.
Stephen Mosley (City of Chester) (Con)
Will my right hon. Friend update the House on the progress the Government are making in implementing the recommendations of the Kay review of equity markets and long-term decision making?
Greg Clark
I certainly commend John Kay for the clarity of his review, and we are taking steps, both in Europe and domestically, to implement his recommendations.
Nia Griffith (Llanelli) (Lab)
14. What the level of public sector net borrowing was in (a) the first seven months of 2012-13 and (b) the equivalent period in 2011-12.
The Economic Secretary to the Treasury (Sajid Javid)
According to the Office for National Statistics, public sector net borrowing for the first seven months of 2012-13 was £73.3 billion, excluding the transfer of the Royal Mail pension assets. Public sector net borrowing for the equivalent period in 2011-12 was £68.3 billion.
Nia Griffith
Will the Minister explain to the many families in my constituency, who are very angry at an autumn statement that has left them with less money to spend in the local economy, why borrowing has been revised up by more than £200 billion compared with the Chancellor’s plans two years ago? What will it take for him to realise that we need jobs and growth before we can get the deficit down?
Sajid Javid
I think that the hon. Lady submitted that question before the autumn statement, not expecting the Office for Budget Responsibility to confirm that the deficit is going to keep on falling. She risks becoming, like her friend the shadow Chancellor, an economic arsonist. He has created an economic inferno but is more interested in throwing stones at the firefighters. What her constituents want to know is that the deficit is coming down, and it is down by a quarter. That is creating jobs and confidence, and that is what this country needs.
Dr Julian Huppert (Cambridge) (LD)
16. What assessment he has made of the importance of capital infrastructure projects in helping rebalance the economy.
The Chief Secretary to the Treasury (Danny Alexander)
Investment in infrastructure networks is a major determinant of growth and productivity, but historically such investment in this country has not kept up with the needs of a growing population. That is why this Government have increased capital expenditure compared with the previous Government’s plans, including with the extra capital we announced last week. In fact, public investment as a share of GDP is now higher on average in this Parliament than it was under the previous Government.
Dr Huppert
I thank my right hon. Friend for that, and I was delighted to see in the autumn statement extra capital investment, especially in housing, rail, cycling, science and broadband, particularly in Cambridge. What plans does he have to improve the energy infrastructure, including storage, to provide more certainty for investors?
Danny Alexander
That is an extremely good point, because on 29 November we introduced the Energy Bill, setting out the contracts for difference, which will deliver a stable financial environment of incentives, particularly for investment in renewables. Alongside that agreement, we set out the level of support consumers will pay for low-carbon generation—the so-called levy control framework—which will triple support for renewables between now and 2020, ensuring a great deal of investor confidence in that area. Along with gas investment, as set out in the autumn statement, that will help to bring forward massive investment that this country needs.
Diana Johnson (Kingston upon Hull North) (Lab)
18. There is a tendency for coalition infrastructure schemes to be news-ready many years before they are shovel-ready. Another tendency is unfairness; three out of the four road schemes in the autumn statement last week were in the south, including one helping port access in Thurrock. When is the port city of Hull going to get the A63 upgrade that is central to our regeneration?
Danny Alexander
The hon. Lady ought also to have noted that the autumn statement announced the complete dualling of the A1 between London and Newcastle, which is a very important scheme, and the upgrades for the A160 to Immingham, a very important port on the Humber estuary. That work has been accelerated under the new scheme introduced by the Department for Transport. I would have thought that she would welcome that, rather than criticise it.
Jim McGovern (Dundee West) (Lab)
17. What steps he is taking to tackle interest rate swap mis-selling.
The Financial Secretary to the Treasury (Greg Clark)
The Government have been clear that the mis-selling of financial products is wrong, and we support the Financial Services Authority’s ongoing work to tackle the issue. The Treasury and the FSA have established monthly round-table discussions with the banks and the business groups to ensure that these concerns are addressed. We will continue to work with all parties involved to ensure that the banks provide the appropriate redress.
Jim McGovern
Constituents who have contacted me said that they are struggling and that they have been waiting for more than a year for the FSA review, during which time the banks have taken no remedial action whatever. What can the Minister do to help the victims of mis-selling now?
Greg Clark
I am glad the hon. Gentleman has asked me that question. I agree that customers who have been mis-sold products need quick redress, so I have pushed the FSA and it has agreed to implement a six-month maximum time scale for the banks to complete the review and provide the redress. I have also asked the banks and they have agreed to stop payments on these products for businesses facing financial difficulty.
Michael Connarty (Linlithgow and East Falkirk) (Lab)
T1. If he will make a statement on his departmental responsibilities.
The Chancellor of the Exchequer (Mr George Osborne)
The core purpose of the Treasury is to ensure the stability and prosperity of the economy. I can announce today that Budget 2013 will be on Wednesday 20 March.
Michael Connarty
I thank the Chancellor for probably the most complete answer he has given today, at a time when every city in our countries has food kitchens feeding the poor and in London people are queuing up to get second-hand reject food from stores and Pret A Manger. I know that the Chancellor borrowed £425 million from the good causes fund of the lottery for the Olympics, and the National Audit Office has said there is an estimated £377 million profit from the Olympics. Could he now return that to the good causes so they can give it to the charities looking after the poor in our country, which he clearly is not?
Mr Osborne
It is a credit to those who delivered the Olympic games that they came in under budget. The Olympic underspend is money which, if we spent it, would add straight to the deficit. It is not a pot of money sitting in some Government bank account. That would be a difficult decision to take and would have to be balanced alongside other decisions, but I make a broader point: we are trying to sort out the economic problems that this Government inherited. The problems that the hon. Gentleman talks about are problems caused by the deepest recession and the biggest financial crisis of the 21st century, and perhaps one day a Labour MP will get up and apologise for it.
Geoffrey Clifton-Brown (The Cotswolds) (Con)
T6. As somebody who has had a long interest in exempting some of the poorest people in this country from tax—incidentally, an idea I held long before the Liberals pinched it from me—I congratulate my right hon. Friend on almost achieving this target in his autumn statement. When economic circumstances allow, could he be even bolder?
Mr Osborne
I am proud to be part of a coalition Government of Conservatives and Liberal Democrats who have delivered that policy and are delivering it. A very substantial increase next year will mean that individuals are £229 better off in real terms as a result just of the increase in April, so that is to be welcomed. As for when we get to £10,000, I have just announced the Budget date and we will have to wait for that Budget for tax decisions, but even if the £10,000 allowance were to increase with our current CPI forecasts from the OBR, it would hit £10,000 in 2015.
Ed Balls (Morley and Outwood) (Lab/Co-op)
In the autumn statement, the Chancellor announced a real-terms cut in tax credits and benefits over the next three years and the Government say they will ask the House to vote on that, so can the Chancellor tell the House the answer to two questions? First, what percentage of families hit by these cuts to tax credits and benefit are in work? Secondly, as a result of the autumn statement tax and benefit changes, including the change to the personal allowance, will the average one-earner couple in work with children be better off or worse off?
Mr Osborne
It is good to see the shadow Chancellor back. Of course tax credits go to some people in work, but we are also helping those people with a personal allowance increase, and working households will be £125 better off. Perhaps he can answer a question, if that is allowed, Mr Speaker: how will Labour vote on the Bill?
Mr Speaker
It is very important that the public are not misled, however inadvertently, by a member of the Government. This is not an occasion for shadow Ministers to answer questions. In our system, they ask questions and Ministers are expected to answer them. That is the situation.
Ed Balls
I will answer, though, Mr Speaker, but before I do it is important that Members on both sides of the House know the answers to the questions I asked the Chancellor. First, 60% of families hit by his tax and benefit changes are in work. Secondly, according to the Institute for Fiscal Studies, as a result of the autumn statement measures a working family—the average one-earner couple—will be £534 a year worse off by 2015. Those are the very families who pull up the blinds and go to work. Every Tory constituency has, on average, over 6,000 of those families who will lose out. In answer to his question, we will look at the legislation, but if he intends—[Interruption.] He asked me a question and I am going to answer it. If he intends to go ahead with such an unfair hit on middle and low-income working families while giving a £3 billion top-rate tax cut, we will oppose it. Why is he making striving working families pay the price for his economic failure?
Mr Osborne
As I have said, working households will be £125 better off. The right hon. Gentleman quotes the Institute for Fiscal Studies, which has been very clear in its response to the autumn statement that people who are in work and paying the basic rate of tax will do better. The reason we are having to take these difficult decisions on public sector pay, on benefits and the like is because of the mess he created. When will he stand up and say, “I’m sorry we borrowed too much and spent too much. We’ll never do it again”?
Penny Mordaunt (Portsmouth North) (Con)
T9. Unlike suppliers, who are in a position to judge whether to continue giving goods and services to a company in difficulties, many consumers are not so well informed. Is it not time we amended administration law to make savers and gift voucher holders preferred creditors?
The Economic Secretary to the Treasury (Sajid Javid)
My hon. Friend makes a good point about the protection of individuals using saving or voucher schemes, and I commend her work on raising awareness about that important issue. I know that she raised the issue recently during business questions and received a response from the relevant Minister. If it would be helpful, I will speak with the Minister and raise her ongoing concerns.
Tristram Hunt (Stoke-on-Trent Central) (Lab)
T2. May I welcome the funding in the autumn statement for building future schools, or what we call Building Schools for the Future? May I also welcome the extra allowances for capital investment, or what we call capital allowances? Why did we have to wait two years and have a double-dip recession for those good Labour policies to return to government?
The Chief Secretary to the Treasury (Danny Alexander)
The hon. Gentleman will recall that the Building Schools for the Future scheme was expensive and inefficient and that we had to scrap it because it was unaffordable. It was one of the many unaffordable promises that he and his colleagues made before the election in order to get people’s hopes up, yet still the former Chief Secretary left a note stating, “There’s no money left.”
Mr David Ruffley (Bury St Edmunds) (Con)
It is manifestly in the interests of the British taxpayer that foreign sovereign wealth funds invest in national infrastructure projects. Will the Chief Secretary indicate what progress is being made in that respect?
Danny Alexander
Significant progress is being made in that respect. We have seen significant investment in Thames Water, for example, by overseas investment funds. We announced in the autumn statement some funding for junction 30 of the M25, which is part of ensuring a significant investment from people in Dubai in a major port facility near London. No doubt there will be further such announcements to make in future.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
In my constituency, the claimant count is just short of 3,000, double what it was five years ago. Does the Treasury accept that it is the rise in long-term unemployment and the failure of the Work programme that has resulted in the benefits bill rising so much this year?
Danny Alexander
No, I do not accept that. As I said in answer to the hon. Member for Edinburgh East (Sheila Gilmore), who has taken a great interest in these matters, the Work programme is a great success in getting people off benefits and into job starts, but not necessarily through job outcomes. Over 1 million jobs have been created in the past two and a half years, so that there are now a record number of people in employment in this country. He should welcome that, not criticise it.
Duncan Hames (Chippenham) (LD)
I thank Ministers for listening to the pleas of MPs explaining the plight of pensioners with self-invested pension plans that were affected by the cap on drawdown. Will the announcement in the autumn statement to lift that cap come into force in time to protect their pension income in this financial year?
Sajid Javid
I thank my hon. Friend for that question; I remember that he raised this issue last time at oral questions. He has been a great campaigner on it, and I commend him for that. I am pleased that he welcomes the decision to raise the cap to 120%. That will be in the next Finance Bill. We are consulting with stakeholders about the easiest way to bring it in, and we will try to do so as soon as possible.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
T4. Thanks to Jobs Growth Wales, an innovative start-up in my constituency called Boulders Climbing Centre, which I recently visited, has taken on a new member of staff. Will Ministers join me in congratulating the Welsh Government on their scheme and explain why they cancelled funding for the future jobs fund?
Danny Alexander
The future jobs fund was a massively expensive programme that saw more than half of participants return to benefit after completing it, and it was largely in the public sector. Of course I welcome the scheme that the hon. Gentleman mentioned; if it has created a job in his constituency, that is welcome. The truth is, though, that the biggest problem we have in this country is clearing up the mess that Labour left, and that is why we have to find better, more efficient ways of doing things.
Mr Brooks Newmark (Braintree) (Con)
The Treasury has today made a written statement alerting Parliament to a newly discovered error made by Northern Rock—an error made, I hasten to add, under the previous Government, starting in 2008—that could cost the taxpayer hundreds of millions of pounds. Does my right hon. Friend agree that this is yet another example of the previous Government’s total failure to regulate the banking system properly costing this country dearly? Could he—[Interruption.]
Mr Speaker
Order. May I gently explain to the hon. Gentleman two things? First, topical questions are supposed to be brief, and secondly, they are supposed to relate to the policy of the current Government, not that of the previous one. A short one-sentence reply will, I am sure, suffice—no?
Mr Osborne
Will you allow me, Mr Speaker, to spend a little time on this? We put down a written statement at half-past 11 today because of an error originating in 2008, when Northern Rock was in public ownership. Some customers with certain types of mainly unsecured loans were not given all the mandatory information in their statements to which they were entitled by law. As a result, interest payments on these loans are not legally enforceable. UK Asset Resolution, which manages Northern Rock—[Interruption.] Can I just make this point? One hundred and fifty—[Interruption.]
Mr Speaker
Order. I do not require any help from the hon. Gentleman; he should concentrate on the pursuit of his own duties to the best of his ability. I would say to the Chancellor that if the written ministerial statement has been made it is not entirely obvious to me why we need its terms to be repeated before the Chamber. [Interruption.] Order. I will use my discretion. The right hon. Gentleman can have a few seconds more, but then I really must proceed with topical questions, for which allowance will have to be made.
Mr Osborne
Mr Speaker, 152,000 customers have been affected. These are people with loans of less than £25,000. The cost to UK Asset Resolution is estimated at £270 million. UK Asset Resolution has ordered a full inquiry into what happened in 2008, and we will come to the House with more information when we have it. I wanted to bring this news to the House at the very first opportunity, and I find it pretty extraordinary that the Opposition do not want the public to hear it.
Teresa Pearce (Erith and Thamesmead) (Lab)
T7. New research from Which?—[Interruption.]
Mr Speaker
Order. Whatever discontent there may be on either side of the House about this matter, it would be a courtesy to hear Teresa Pearce.
Teresa Pearce
Thank you, Mr Speaker.
New research from Which? reveals that nearly half of front-line bank staff believe that pressure selling still dominates the culture of banking. Will the Minister join me in calling for banking remuneration and incentive structures to be changed to reward ethics and service, rather than aggressive selling targets, in order to help to change the culture of banking?
The Financial Secretary to the Treasury (Greg Clark)
The hon. Lady is absolutely right that one of the real problems in banking over recent years was that the people who had a trusted relationship with their customers saw them as sales targets rather than as people to be helped. That needs to change. The Financial Conduct Authority is very clear that these kinds of incentives have to go.
Andrea Leadsom (South Northamptonshire) (Con)
I congratulate my right hon. Friend the City Minister on reassuring us that he intends to require the Prudential Regulatory Authority and the FCA to promote new bank competition. Does he agree that full account portability could offer the biggest game changer for bank competition, and that an amendment to the draft Financial Services (Banking Reform) Bill could achieve that?
Greg Clark
I am grateful to my hon. Friend for her question and for her campaigning on this issue. My hon. Friend the Economic Secretary and I will meet her to discuss her proposals. The draft Bill responds to the Vickers report. He said that if portability reforms were not adequate we could take further steps, so we have a vehicle to do so.
Natascha Engel (North East Derbyshire) (Lab)
T8. Perfectly viable businesses up and down the country are going bust while the Government meet the Financial Services Authority and the banks on an ongoing basis to try to come to a conclusion on interest-rate swaps, so I have a suggestion that might focus their minds and make them arrive at a decision more quickly. Why will the right hon. Gentleman not take steps to allow a moratorium on paying back loans that include interest-rate swaps? That would make everybody come to a decision very quickly and help perfectly viable businesses during the recession.
Greg Clark
In answer to an earlier question, I said that I have written to all of the banks and asked them—and they have agreed—to forbear on charging businesses where these matters are in dispute and if the company has financial problems. I am also speeding up the process to resolve these issues once and for all. The matter is rightly of concern to many businesses right across the country and I will do everything I can to help.
Greg Mulholland (Leeds North West) (LD)
The beer duty escalator was brought in by the previous Government in a very different economic situation. Many CAMRA members will come to Parliament tomorrow. The Economic Secretary said that he would reflect on and consider the issue. How is he getting on?
Sajid Javid
My hon. Friend has been an assiduous campaigner on this issue and I welcome the strength of his campaign. I am still reflecting and considering. I am aware that campaigners will come here tomorrow and intend to meet a couple from my own constituency.
Nick Smith (Blaenau Gwent) (Lab)
T10. Eleven jobseekers are chasing every vacancy in Blaenau Gwent. Does the Chancellor think that the Work programme will prove to be good value for money?
Mr Osborne
Yes, I do, and the CBI has welcomed it. I hope that the hon. Gentleman welcomes the fact that we have record employment in our country—a record number of women are working—and that youth unemployment has fallen recently as well.
Alun Cairns (Vale of Glamorgan) (Con)
Benefits have increased at twice the rate of earnings since the onset of the financial crisis. Could the Chancellor reassure me that, in spite of criticisms from those on the Opposition Benches, he will not veer from the 1% commitment that he made last week?
Mr Osborne
My hon. Friend has that reassurance. We have discovered an extraordinary thing today, namely that Labour will vote against yet another measure to deal with the deficit. Labour would have a higher benefits bill as a result of that decision and it will have to explain that to the hard-working people of this country.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
I listened carefully to the Chancellor’s answer to the question asked by my hon. Friend the Member for Linlithgow and East Falkirk (Michael Connarty) about food poverty, but he did not actually answer it. Is he ashamed that, under his watch, by the end of this year a quarter of a million people across the country will have accessed emergency food aid?
Mr Osborne
We are dealing with the economic mess that the previous Government left behind, when unemployment rose, the economy shrank by 6% and people were put into poverty. That is the cause of these problems and Government Members are dealing with them and clearing up the mess that that man—the right hon. Member for Morley and Outwood (Ed Balls)—left behind.
Bob Blackman (Harrow East) (Con)
The Government moved swiftly to compensate the victims of the Equitable Life scandal, who were ignored by the Labour Government. The one set of people who were excluded from the legislation were the pre-1992 trapped annuitants. I know that the Minister has been considering this issue. Will he update the House on what consideration will be given to those weak and vulnerable people who just want some safety for the rest of their lives?
Sajid Javid
My hon. Friend has campaigned well on this issue and I recently met representatives of the Equitable Members Action Group to discuss it. The Government are focused on delivering the current scheme efficiently and effectively.
Petition
Alex Cunningham (Stockton North) (Lab)
I should like to present a petition on behalf of the chairman of Stockton mosque, Councillor Mohammed Javed. It declares that the petitioners are profoundly concerned about the portrayal of the Islamic faith in the online video “Innocence of Muslims” and calls for it to be banned. The petition is accompanied by a larger one that was presented to my hon. Friend the Member for Hartlepool (Mr Wright) and I at a meeting last month, which was attended by hundreds of local community members from mosques across Teesside. The petition is signed by some 4,000 Teesside residents, mostly Muslims, who are shocked and upset about how their proudly held faith has been affronted in that way—their shock is shared by my hon. Friends the Members for Middlesbrough South and East Cleveland (Tom Blenkinsop) and for Middlesbrough (Andy McDonald). I hope the House will take the strength of feeling into account and stand with the hundreds of thousands of Muslims up and down the country who are calling for the Government to ban this appalling film.
Following is the full text of the petition:
[The Petition of Cllr Mohammed Javed,
Declares that the Petitioner believes that the film, “The Innoncence of Muslims” is disrespectful, offensive and untruthful, and could incite hatred towards Muslims.
The Petitioner therefore requests that the House of Commons urges the Government to take necessary measure to ban the film, and introduce new legislation to prevent Islamophobia and the incitement of religious hatred against Muslims.
And the Petitioners remain, etc.]
[P001149]
Points of Order
(12 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Speaker
Exceptionally, I will allow a point of order, for reasons that will be apparent.
Ed Balls
May I have your guidance, Mr Speaker? Is it in order for the Chancellor of the Exchequer, pre-empting a written statement, to slip out news during topical questions about Northern Rock that could well have fiscal implications, including for Government borrowing, in a way that is designed to avoid any proper scrutiny or questioning from the Opposition? Is this not just another example of the Chancellor refusing to answer questions in this House? Would it not be in order for the Chancellor or another Treasury Minister to make an oral statement in this House today and be properly scrutinised, rather than once again playing fast and loose with the public finances and Parliament?
Mr Speaker
I will hear the Chancellor the Exchequer on this matter, and then I will give a verdict.
The Chancellor of the Exchequer (Mr George Osborne)
Further to that point of order, Mr Speaker. There was no pre-empting of the announcement. It was laid as a written statement one hour ago. I thought that it would be appropriate to illuminate the written statement in oral questions, as Ministers frequently do from the Dispatch Box. There is, of course, a debate on the economy this afternoon, during which we can answer questions. It relates to errors that took place in Northern Rock in 2008 that have affected a number of customers. Customers will be receiving letters from Northern Rock. As I said, I thought that it would be helpful to illuminate the details of the written statement, but apparently that is not the case.
Mr Speaker
The right hon. Member for Morley and Outwood (Ed Balls) is itching to raise a further point of order, but I ask him to hear what I have to say first. This cannot be a debate; there are a couple of points of order to which I am giving a reply. My response, whether Members like it or not, is as follows.
First, I feel sure that the Chancellor of the Exchequer intended to be helpful to the House. It is not for me to impugn motives, and I do not do so. However, was it a good idea to handle this matter via the device of topical questions in the way that it was done? The answer is no, it could have been better done. I am sure that the hon. Member for Braintree (Mr Newmark) was doing his best, according to his own lights, but it was unwise to deal with it in that way.
Secondly, I simply make the point—[Interruption.] It may be topical, but that does not necessarily mean that it should be raised at topical questions. My understanding, which is very easily explained, is that although something is a topical matter, it does not mean that it should be the subject of a topical question if the Government have tabled a written—
Mr Speaker
No, I do not require any assistance from the hon. Gentleman. He should do his own job to the best of his ability. I am giving a verdict on the matter.
The Government have laid a written ministerial statement. If they had wanted to make an oral statement, they could have made one. They did not do so, but made a written ministerial statement. I repeat: I am sure that the Chancellor meant well. That is the kindest thing, in the circumstances, that I can reasonably say. There is nothing further to be said on this matter now, but we may well return to it.
Equal Marriage Consultation
The Minister for Women and Equalities (Maria Miller)
With permission, Mr Speaker, I would like to make a statement on the Government’s proposals to enable same-sex couples to marry. Copies of the consultation response will be available in the Libraries of both Houses.
Not long ago, talk of marriage as one of the building blocks of society was dismissed by some as out of date. Of course, those of us in this House who have taken a closer interest know that marriage remains something to which most people aspire. Therefore, far from being a peripheral issue, the future of marriage should concern us all.
Today we are setting out how the Government will extend marriage to same-sex couples. The consultation has been the subject of much debate both within and outside the House, and I am immensely grateful to the many hon. Members who have taken time to discuss the proposals with me, adding their voices to the 19 petitions received by the Government and the record 228,000 individuals and organisations who responded to the consultation.
For some, this is a contentious and radical reform, or, indeed, a reform too far. Historical facts, however, show that over the generations marriage has had a long history of evolution. In the 19th century inequalities prevented Catholics, atheists, Quakers and many others from marrying except in the Anglican Church. When that changed, was it accepted without protest? No, I am sure it was not. In the 20th century when the law was changed to recognise married men and married women as equal before law, was that accepted without fierce protest? No. In each century Parliament has acted—sometimes radically—to ensure that marriage reflects our society to keep it relevant and meaningful. Marriage is not static; it has evolved and Parliament has chosen to act over the centuries to make it fairer and more equal.We now face another such moment—another such chance in this new century.
For me, extending marriage to same-sex couples will strengthen, not weaken, that vital institution, and the response I am publishing today makes it clear that we will enable same-sex couples to get married through a civil ceremony. We will also enable religious organisations that wish to conduct same-sex marriages to do so, on a similar opt-in basis to that available for civil partnerships. That is important for the obvious reason that it would be wrong to ban organisations that wish to conduct same-sex marriages from doing so.
I am under no illusions and I am fully aware that the proposals set out today to allow same-sex couples to marry are contentious. I am also clear that there should be complete respect for religious organisations and individual religious leaders who do not wish to marry same-sex couples. The Government must balance the importance of treating all couples equally and fairly with respect for religious organisations’ rights to their beliefs.
We must be fair to same-sex couples and the state should not ban them from such a great institution. Equally, however, we must be fair to people of faith, and the religious protections I will set out will ensure that fairness is at the heart of our proposals. Churches have a right to fight for and articulate their beliefs and to be under no compulsion to conduct same-sex marriages. As the Prime Minister said, we are 100% clear that if any church, synagogue or mosque does not want to conduct a gay marriage it will not—absolutely must not—be forced to hold it.
Part of our response will include a quadruple lock, putting into English law clear and unambiguous protections. I will go into the detail of those locks, but I first want to reiterate comments I made yesterday on Europe. I know that many hon. Members are worried that European courts will force religious organisations to conduct same-sex marriages. The law is complex, but that complexity is absolutely no excuse for misunderstanding the facts. Case law of the European Court of Human Rights, and rights set out in the European convention on human rights, put protection of religious belief in this matter beyond doubt.
The Government’s legal position has confirmed that, with appropriate legislative drafting, the chance of a successful legal challenge through domestic or European courts is negligible. I have therefore asked the Government’s lawyers to ensure that that is the case. Our response sets out clear safeguards—a quadruple lock of measures to protect religious organisations. The Government have always been absolutely clear that no religious organisation will be forced to conduct same-sex marriages. The system of locks will iron-clad the protection in law, adding to the existing protections in European legislation, so that those who do not want to conduct same-sex marriages will never have to.
First, we will write on to the face of the Bill a declaration that no religious organisation, or individual minister, can be forced to marry same-sex couples or to permit that to happen on their premises. Secondly, I will amend the Equality Act 2010 so that no discrimination claims can be brought against religious organisations or individual ministers for refusing to marry a same-sex couple or for refusing to allow their premises to be used for this purpose.
Thirdly, the legislation will make it unlawful for religious organisations or their ministers to marry same-sex couples unless the organisation has expressly opted to do so. As part of this lock, a religious organisation will have to opt in as a whole, and each individual Minister will then have to opt in too. Therefore, if a religious organisation has chosen not to conduct same-sex marriage, none of its Ministers will be able to do so. However, if an organisation has chosen to conduct same-sex marriage, individual Ministers are still under no compulsion to conduct one unless they wish to do so.
Finally, because the Churches of England and Wales have explicitly stated that they do not wish to conduct same-sex marriage, the legislation will explicitly state that it would be illegal for the Churches of England and Wales to marry same-sex couples. That provision recognises and protects the unique and established nature of those Churches. The Church’s canon law will also continue to ban the marriage of same-sex couples. Therefore, even if those institutions wanted to conduct same-sex marriage, it would require a change to primary legislation at a later date and a change to canon law—additional protection that cannot be breached.
It is important to address directly other concerns raised by religious institutions. Other legal cases, including those involving the provision of services such as bed and breakfast or the wearing of religious symbols, have no bearing on the legal situation regarding marriage, because most religious marriage is a commitment made before God—it is at the heart of religious belief. There is clear protection under article 9 of the European convention on human rights and clarity in case law that the European Court of Human Rights considers same-sex marriage to be a matter for each individual member state.
Faith has underpinned British society for centuries, and it is important to me that equality before the law is seen in the same way. The proposals will allow both to co-exist without threat or challenge to the other. People of faith hold views that must be respected. That is why I have been absolutely clear that I would never introduce a Bill that encroaches or threatens religious freedoms. It is with those strongly held views in mind that the proposals presented today have been designed.
I believe the proposals strike the right balance—protecting important religious freedoms while ensuring that same-sex couples have the same freedom to marry as opposite-sex couples. By making marriage available to everyone, we will ensure that it remains a vibrant institution. Our changes will allow more people to make lifelong commitments and enjoy the benefits of an institution that has for centuries lain at the heart of our society.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
Thank you, Mr Speaker—it is good to be here again. I welcome the Minister’s commitment to introduce same-sex marriages, but I am at a loss about why she could not have made all those points in the House yesterday, especially as most of them were made by Ministers to the press on Friday.
I agree with the Minister that we should support same-sex marriage. When couples want to get married and to make the long-term, loving commitment it entails, we should celebrate and not discriminate. Marriage is more than a historic tradition; it is about how the state and society today view and value long-term commitment. We should not prevent people from getting married and gaining recognition from the state on grounds of gender or sexuality, and Parliament should not say that some loving relationships have greater value than others.
While Labour was in government, we changed the law many times to tackle outdated prejudice and discrimination against lesbians, gay men, and bisexual and transgender people. Many of those measures were controversial at the time but are now taken for granted even by those who opposed them at the start: an equal age of consent, ending the ban on serving in the armed forces, ending discrimination in adoption and fertility treatment and abolishing section 28. Year after year, we changed the law and argued for the justice and common sense of each of those changes, and opponents were proved wrong—the sky did not fall in. This is the next sensible step. To deny same-sex couples the chance to marry and have their relationship recognised by the state as of equal worth to other loving couples would be unfair and out of date.
The Minister will know that I have argued for some time for those Churches and religious organisations that want to be able to celebrate same-sex marriage to be able to do so. I have met religious leaders from many faiths who want to be able to treat all loving couples equally and who show powerfully that the debate on same-sex marriage should not become polarised between Church and state. There are very different views between and within faiths.
I agree that freedom of religion is important. The Minister is right that no Church or religious organisations should be required to hold same-sex marriage and that respect for freedom of religion should be built into the proposed legislation, but we will need to look at the details of the proposals because it is important that she does not become too defensive about this. Freedom of religion also means that those faith groups, such as the Quakers, the Unitarians and others who want to be able to celebrate same-sex marriage should be able to do so. Those who argue that marriage should never change are out of touch with public feeling. Based on that argument, civil marriage would never have been introduced in the 1830s, married women would never have been given the right to own property, no one would be able to remarry after a divorce and the law would not have been changed to outlaw rape within marriage.
It is deeply disappointing that some in the House yesterday wanted to link same-sex marriage with polygamy or to suggest that it was somehow an affront to those in so-called normal marriages. I hope that those who have opposed the plans in the House and some Church leaders will think carefully and not repeat some of the hysterical language they have used before. These proposals include considerable respect for freedom of religion, freedom of belief and freedom for those who wish to continue to oppose same-sex marriage within their own organisations. I hope, however, that they will now respect the majority of us in the House and beyond who wish to support same-sex marriage and will not try to veto everyone else. No one faith, group or organisation owns marriage.
Surveys have found that seven out of 10 people support extending civil marriage to same-sex couples and that six out of 10 people of faith support extending it too. Marriage has never been a rigid, unchanging institution. It is only when marriage loses its relevance to communities or is seen as outdated or unjust that it risks becoming weakened or forgotten. I hope that the Minister will accept the support for these measures, promote them with confidence, not be defensive about the changes, and urge everyone to support the reforms, which will strengthen marriage and support equality too.
Maria Miller
I welcome the right hon. Lady’s support for the statement. She is right to highlight the widespread support for what the Government have outlined outside this place and on both sides of the House.
It is important to pick up on the right hon. Lady’s point about showing respect for both sides of the argument. As we participate in these or any discussions, none of us should try to polarise the debate. The language we use and the stance we take are looked at far and wide—people will be looking at how we deal with these issues—so I hope that hon. Members will appreciate and echo in their comments the respect that I am showing to religious institutions and to people in same-sex relationships. I think I made it clear that it is up to religious institutions to decide how they deal with these matters. That is not being defensive; it is about respecting those important religious beliefs.
Mr Speaker
Order. Very many Members are seeking to catch my eye, and I am keen to accommodate them, so brevity is of the essence.
Martin Vickers (Cleethorpes) (Con)
The Secretary of State has outlined a major social change that many of those whom we represent find unacceptable. Such significant change should be allowed to evolve, rather than be pushed through. Will the Minister agree to seek an electoral mandate before proceeding?
Maria Miller
My hon. Friend is right that many of these matters evolve over time. Our consultation has allowed us to listen to the many and varied views and reflect those views in the proposals. On an electoral mandate, the Conservative party’s commitment was set out in the contract for equalities, which sat alongside our manifesto at the election, and which laid out the importance of considering the case for changing the law.
Lilian Greenwood (Nottingham South) (Lab)
Does the Minister agree that, given that respect for freedom of religion is vital, it is right that faith groups that wish to marry same-sex couples should be allowed to do so?
Nick Herbert (Arundel and South Downs) (Con)
I welcome my right hon. Friend’s statement. She correctly says that this proposal commands widespread support in the country, as all opinion polls show, but, just as this measure is about safeguarding the rights of one minority, is it not also important jealously to guard the rights of another—those who choose in conscience not to agree and those Churches that do not wish to conduct such ceremonies? Does she agree that those who were concerned about the proposal, in the belief that Churches would be forced to conduct such ceremonies, need no longer be concerned, now that they understand that there is a lock and that no Church will be forced to do so?
Maria Miller
My right hon. Friend has done a great deal of work in this area, and we listen to him with great interest. He is right that the quadruple lock I have outlined today should give clear reassurance to hon. Members and anybody outside listening that there is a considerable and thought-through way of ensuring that ministers and religious organisations are under no compulsion to undertake same-sex marriages, if they believe that it does not accord with their faith. It is absolutely right that we respect the stance taken by religious organisations and that we put in place safeguards at a domestic and European level to ensure that those safeguards are effective.
Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)
As chair of the all-party group on equalities, I very much welcome the Minister’s statement. Does she agree that this is not a matter of redefining marriage, but of extending it to a group that currently does not have that right? It is a matter of equal rights in our society in the 21st century.
Maria Miller
I thank the hon. Lady for her support. As I outlined in my statement, we have seen marriage evolve over generations to ensure it remains relevant and vibrant, and these proposals do that again for our century, while putting in place that quadruple lock, those safeguards and the clear articulation of our respect for religious belief, so that we strike the right balance between the rights of same-sex couples and those of religious institutions.
Stephen Gilbert (St Austell and Newquay) (LD)
I warmly welcome the Government’s announcement. My right hon. Friend has struck the right balance between protecting religious freedoms and extending legal equality to the LGBT community some 43 years after the Stonewall riots. Does she agree that, despite the noises behind me, it will be much less than 43 years before people wonder what all the fuss was about today?
Maria Miller
I understand my hon. Friend’s sentiments; I do, however, understand what the fuss is all about. People have deep-seated religious convictions and beliefs. If we are to go forward successfully with these measures, we need to ensure that our respect is clear. I will meet religious institutions later today to talk about these things in more detail and ensure that they are happy with the locks we are putting in place.
Kerry McCarthy (Bristol East) (Lab)
Given that the right to marriage is now being extended, albeit in quite a limited form, should not the right to enter into a civil partnership be extended to those heterosexual couples who perhaps do not like the religious connotations of marriage?
Maria Miller
I understand the hon. Lady’s point, but we do not feel that there is significant demand for the extension of civil partnerships in the way she describes. What we want to ensure is that marriage is extended to same-sex couples.
Sir Roger Gale (North Thanet) (Con)
I had the privilege of chairing the Civil Partnership Bill through Committee in the House of Commons. Throughout the passage of that legislation, clear undertakings were given that it was not the thin end of a wedge, that it would not lead to marriage and that it satisfied all the necessary legal and equality demands of the time. I accept that the present Government cannot be bound by a previous Government, but it will require a degree of faith—I use the word advisedly—if we are to move forward down this road. The Minister said that 60% of the general public are in favour of this measure. The letters I have handed to Ministers suggest that 98% of my constituents are opposed to it. Will she publish the figures?
Maria Miller
I think my hon. Friend might have mistaken what I was talking about. I did not quote a figure in that respect, although I would always be happy to share with him any such figures. There are important differences in perception of civil partnerships and marriage. What we are putting forward today is about ensuring that the universally understood and recognised idea of marriage is available to more people. That is something we should celebrate. I hope I can convince him, through the quadruple lock I have announced, that the sort of protections that he and his constituents would look for are very much to the fore of our minds.
Chris Bryant (Rhondda) (Lab)
Marriage has changed over the centuries, has it not? For centuries, the Church of England’s doctrine was that the primary purpose of marriage was the procreation of children, but many heterosexual couples either are unable to have children or choose not to have them. Marriage today is, for very many people, about many other things—companionship, sharing one’s life, mutual support and so on. As I said to the Minister yesterday, I find it difficult to believe that any Christian, including many Anglican bishops and clergy, would not want that for every member of their parish. Will she therefore consider not putting such an ultimate lock on the Church of England, so that there is freedom for the Church of England? Those in the Church of England all voted to keep slavery for 30 years, but eventually they changed their minds.
Maria Miller
I am sure that the hon. Gentleman will take time to lobby his previous employer on these matters. Obviously it is for individual religious institutions to look at that. The Church of England can come forward with a change of view at any point in time and we can consider the appropriate actions to be taken.
Mrs Cheryl Gillan (Chesham and Amersham) (Con)
I thank the Minister for her statement today, but many people in Chesham and Amersham are desperately concerned about the Government’s proposals. What can my right hon. Friend say to my constituents, who genuinely feel that the Government are challenging their deeply held religious beliefs and, despite her many assurances today, do not believe that they are being heard by her or that their religion is truly being protected?
Maria Miller
I reassure my right hon. Friend that we have absolutely heard loud and clear the concerns that have been raised. Hence, we have brought forward our proposals today with a quadruple lock, which will provide the reassurance that I know that many people—whether her constituents or others—have been calling for, so that only when an organisation has opted in would it be able to consider undertaking same-sex marriages, and even then ministers can still decide not to do so. The amendments to the Equality Act and the provisions relating to the Church of England all work together to provide, I hope, the sort of reassurance that my right hon. Friend is calling for.
Kevin Brennan (Cardiff West) (Lab)
I support the Minister’s statement today. Can she explain the reference in her statement to the “Churches of England and Wales”? She continued: “That provision recognises and protects the unique and established nature of those Churches.” The Church in Wales was disestablished in 1920, so will she explain in what sense she referred to it as an established Church in her statement?
Maria Miller
I welcome the hon. Gentleman’s comments and his support. I was recognising the different obligations on the Church of England and the Church in Wales and ensuring that the protections there reflect those obligations in full, but if he wants to go into any other details, I hope we can do so in the Bill Committee.
Mr Edward Leigh (Gainsborough) (Con)
During the passage of the civil rights legislation, the Government and the hon. Member for Rhondda (Chris Bryant) repeatedly assured us that civil partnerships would not lead to same-sex marriage. Then, the consultation that we have just had specifically excluded religious marriage between same-sex couples. Now, the Government assure us that human rights legislation is clear. It is not: the Minister should read the verdict of Aidan O’Neill, QC, who says the only absolutely safe defence for Churches is to get out of same-sex marriages. How can she legislate for something she has not consulted on?
Maria Miller
I am sure that my hon. Friend would not want me to answer for the hon. Member for Rhondda—I am sure the latter can answer for himself on any undertakings he might have given when he was a Minister. What I am trying to do is ensure that marriage is accessible to more people and that clear safeguards are in place. If my hon. Friend wants to talk to me in detail about those safeguards, I am happy to do that. I know that he, like me, wants to ensure that marriage is special. The provisions we have brought forward today will ensure that it remains that way.
Barbara Keeley (Worsley and Eccles South) (Lab)
I welcome the move to equalise marriage. It is important that we make the change to allow same-sex couples to mark their love and commitment through marriage. That equality is welcome, but I also support my hon. Friend the Member for Bristol East (Kerry McCarthy). I know an opposite-sex couple who would have welcomed a civil partnership, a form of commitment that some people want. It is disappointing that it was not considered; it should be in future.
Maria Miller
The hon. Lady will know that that was a question in the consultation. There was not the demand in the consultation for the change she describes, but it is also important to note that our priority is to allow same-sex marriage, not to overhaul marriage law. That is where I want to keep the focus.
Mr Crispin Blunt (Reigate) (Con)
I welcome my right hon. Friend’s statement and in particular the change in the Government’s position as a result of the consultation on lifting the proposed proscription on religious organisations conducting same-sex marriages. May I issue her a word of caution? It might be better to leave religious institutions to manage their own internal discipline on whether they take part in this, rather than our legislating for it.
Maria Miller
My hon. Friend is absolutely right. There is no way in which the Government want to become involved in the philosophy of our religious institutions. It is ultimately for them to take their stance, whether it is the Church of England making it clear up front that it does not wish to be involved in this—although it has the right to change that position over time if it wants—or any other religious institution.
Dr William McCrea (South Antrim) (DUP)
Does the Minister feel that she is competent to act as God—to change and challenge the definition of marriage, between one man and one woman?
Maria Miller
I am sure that the hon. Gentleman would not want me to comment on the first part of his question, because that would be inappropriate. What I am doing is ensuring that marriage is a vibrant and relevant institution in our country today, and I am sure he will want to support that. In regard to the part of the country that he represents, the Northern Ireland Government are clearly taking a different view, and we respect that. We should all show respect for both sides of the argument.
Mr Stewart Jackson (Peterborough) (Con)
I congratulate my right hon. Friend on delivering consultation results that are reminiscent of a Liberian presidential election. I believe that these proposals are a constitutional outrage and a disgrace. There is no electoral mandate for these policies. Will she explain what popular support she has received for erasing the words “husband” and “wife” from our laws and customs, as set out in her Department’s equality impact assessment?
Maria Miller
I know that my hon. Friend has deep-seated views on this matter, and in saying what I am about to say, I am in no way trying to move him away from them. The consultation was very clear: we were talking about how we were going to implement this proposal, not whether we were going to implement it. We clearly set it out in the contract for equalities that we were going to consider the case for a change in the law, and that is exactly what we have been doing. Also, I would ask him not to pursue the issue of changing the usage of the words “husband” and “wife”, because the Government have absolutely no intention of doing that.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
Since 2004, many of my constituents have registered their civil partnerships. If and when the law changes, some of them might want to get married, in either a civil or a religious ceremony. Would that require them to dissolve their civil partnership, or would there be a mechanism in the law to enable them to commute it or have a marriage in addition to their civil partnership?
Maria Miller
That is just the sort of important detail that many people will want to hear more about. I can tell the hon. Lady that there will be a facility for people who are in a civil partnership to convert it to a marriage, although there will be no compulsion to do so. I look forward to perhaps hearing her further comments as we discuss the Bill in Committee.
Sir Alan Beith (Berwick-upon-Tweed) (LD)
How will the legal protections that the Minister has described apply in those denominations in which authority resides not with a central organisation or with ministers but with the local congregation? Will she bear it in mind that the fear of having to engage in litigation, even if it is unlikely to succeed, is a genuine one in many Churches?
Maria Miller
My right hon. Friend also asks a thoughtful question. The reason we are putting in place changes to the Equality Act 2010 is that we want to ensure that people are not fearful of the potential litigation that could occur without those changes. In answer to the first part of his question, those issues would be for local congregations and local representatives of religious institutions to deal with.
Pete Wishart (Perth and North Perthshire) (SNP)
I am sure that the Minister will want to acknowledge the initiatives on this issue in the Scottish Parliament. I am particularly proud that Scotland is leading the way on equal marriage. What discussions has she had with the Scottish Government about the necessary amendments to UK-wide equality legislation to ensure that celebrants in Scotland would be protected from legal action if they were to speak out against, or refuse to take part in, same-sex marriage ceremonies?
Maria Miller
That, too, is an important detail that has to be got right. We are pleased that we have put forward our proposals now. I think that the Scottish Government might well be putting forward theirs shortly. We have already started to have discussions at official level to ensure that those kinds of issues are dealt with. It is important that this measure should work across the devolved responsibilities, and it is a priority to ensure that that happens.
Miss Anne McIntosh (Thirsk and Malton) (Con)
Is the Minister following developments in Denmark? The Churches there have sought exactly the kind of exclusion that this Government are seeking, but it has been ruled illegal. If that ruling also pertained in this country, what triple or quadruple lock could she possibly offer to Churches in that regard?
Maria Miller
I draw the attention of my hon. Friend—she is also a learned Friend—to the case law that is building up in the European Court of Human Rights. It has become clear that this is a question that is determined at local level. Our proposals will make clear in law the intentions of Parliament and the Government at local level, and we believe that that will put the protection of religious belief beyond doubt in this matter.
Mr William Bain (Glasgow North East) (Lab)
Further to the point that the hon. Member for Perth and North Perthshire (Pete Wishart) has just made, may I point out that there is strong support across Scotland for the principle of equal marriage that the Minister has set out today, with 64% of people—people in poor Scotland, rich Scotland, urban Scotland and rural Scotland—supporting it? Will she make it clear, however, whether the Scottish Government have asked this Government for the provisions in this legislation to apply to Scotland if it is passed by this House?
Maria Miller
I welcome the hon. Gentleman’s articulation of the support of the people of Scotland for the measures that this Government have brought forward today, and I thank him for that. The ways in which we would ensure clear read-across between the Scottish provisions and those made by Westminster are just the sort of details that we will be discussing. He would of course not wish me to pre-empt such a consultation by starting those discussions before making a statement like this to the House.
Mr Peter Bone (Wellingborough) (Con)
I was up late last night reading “An invitation to join the government of Britain”, the Conservative manifesto; “A future fair for all”, the Labour manifesto; and this wonderful work “Change that works for you”, the Liberal Democrat manifesto, as well as “The Coalition: our programme for government”. There is no mention in those political bibles of redefining marriage; it is not even hinted at. How dare the Minister suggest that she has any right or any mandate to bring in this legislation?
Maria Miller
My hon. Friend obviously has very strong views on this. As I have said, I respect those views, but I ask him to ensure that he balances them with a respect for others who might not agree with him. It is clearly set out in the contract for equalities that sat alongside our manifesto that we would consider the case for a change in the law, and that is exactly what we are doing today. I think he should be celebrating this development, and I really hope that I can convince him that the quadruple lock will provide just the kind of assurances that he seeks.
Mark Durkan (Foyle) (SDLP)
Does the Minister accept that, as well as providing for civil marriage, the state has for some time recognised and registered marriages conducted under the sacramental privilege of various Churches? That legal capacity for Churches has always respected their own rules of ritual eligibility, and has been qualified only by the provision that there be no lawful impediment, such as a close blood relationship, one party already being married or the couple being of the same sex. Will she confirm that her proposal is essentially to remove the lawful impediment to marrying a couple of the same sex, and that it will in no other way encroach on the sacramental privilege of any Church or interfere with any Church’s rules of ritual eligibility?
Maria Miller
I can give the hon. Gentleman an absolute assurance that our proposals will do exactly what he is asking for, which is to ensure that there is no compulsion on religious institutions or individuals to undertake same-sex marriages. I ask him to look closely at the details of the quad locks that we have set out in our statement today. Of course we will be working with religious institutions to ensure that those locks work as they need to do, because it is our intention to provide the kind of safeguards that he is talking about.
Sir Tony Baldry (Banbury) (Con)
On the principle of this matter, I sometimes think that we are talking at cross purposes. For me, there is absolutely no dispute that the hon. Member for Rhondda (Chris Bryant), my right hon. Friend the Member for Arundel and South Downs (Nick Herbert), my hon. Friend the Member for Reigate (Mr Blunt) and I were all created equal in the image of God. That is not the issue. For the Church of England, the uniqueness of marriage is that it embodies the distinctiveness of men and women, so removing that complementarity from the definition of marriage is to lose any social institution where sexual difference is explicitly acknowledged.
Maria Miller
My hon. Friend has articulated incredibly clearly the position of that particular religious institution, and I fully respect that view. We have accordingly put in place a clear protection, particularly for the Church of England. The important thing to state here is that that view is not held across the board, and other religious institutions would certainly differ from it. It is important that we have that respect in place, however, and I believe that our proposals will ensure that the Church of England can continue to hold those religious beliefs without fear of their being undermined.
Diana Johnson (Kingston upon Hull North) (Lab)
The Minister just spoke about the special protection for the Church of England. The Church of England plays a special role in this country as our established Church, so is she satisfied that it is once again opting out of equalities legislation?
Maria Miller
The spirit of our debate today has been one of trying to find a way to ensure that we can provide protection for religious belief. I urge the hon. Lady to think about that carefully, because in the context of the provision of our quadruple lock it is important that we provide for that change in the Equality Act if we are to give the certainty that, as other hon. Members have highlighted, is so important.
Sir Gerald Howarth (Aldershot) (Con)
Will my right hon. Friend accept that the great majority of people in this country—62% according to ComRes—regard marriage as being between a man and a woman, a situation that has persisted for centuries; that neither she nor the Prime Minister, and neither the Deputy Prime Minister nor the Leader of the Opposition, has any mandate whatsoever to inflict this massive social and cultural change on our country; that the consultation exercise has been a complete sham; and that the Government had made up their mind in advance what outcome they wanted and failed to take into account the 600,000 people who signed the Coalition for Marriage petition?
Maria Miller
I hope I can reassure my hon. Friend and neighbour in Hampshire that we have absolutely looked not only at the consultation responses but at the petitions we have been given, although they are not part of the consultation response because they were not part of the consultation. It is important that we consider both sides of the debate, understand the strength of feeling and make provisions for people’s religious beliefs. I do not ever want to try to trade statistics in this place, because the subject we are dealing with is even more important than that. It concerns respect for people’s differences, and we have an obligation to ensure that those differences can be protected in law.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
I welcome the statement and indicate my support for this change. Is it the Government’s intention that same-sex couples have the option of a civil partnership or a marriage, or will marriage simply become the standard means for any couple to affirm the status of their relationship?
Maria Miller
As a result of looking at the consultation responses, we believe that to protect those who have entered into a civil partnership we should continue to have that option available. There will be an option.
Eric Ollerenshaw (Lancaster and Fleetwood) (Con)
I am prepared to support this measure on the grounds of equality before the law, provided that religious freedom is protected. Will my right hon. Friend comment on my remaining worry that teachers of particular faiths, whether they are in faith schools or non-faith schools in the state sector, might be expected to teach something that goes against their conscience?
Maria Miller
I would expect my hon. Friend to bring up another important issue, and he did. I can reassure him that nothing will change in what children are taught. Teachers will continue to be able to describe their own belief that marriage is between a man and a woman while, importantly, acknowledging that there can also be same-sex marriages. In faith schools in particular, people will want to ensure that the beliefs of that faith are clearly and well articulated for children.
Jim Shannon (Strangford) (DUP)
I have had the single largest postbag that I have had as an MP on this issue from those who are opposed to it. The churches are opposed and my constituents are opposed—99.9% of the people in the area I represent are opposed to this legislative change. The Minister suggested in her answer to an earlier question that the 550,000 people who signed the Coalition for Marriage petition were ignored or sidelined. She will understand why many of us look on that with suspicion. Why was the Coalition for Marriage petition excluded from the headline figure? Is it not a case of some people being more equal than others?
Maria Miller
The hon. Gentleman is obviously right to say that there are strong feelings and I absolutely understand what he is saying. I can reassure him that we have considered all petitions and all responses to the consultation—more than 200,000 of them—which has taken a while. I remind him of the starting point for the consultation, however: it was not whether we would proceed with this measure, but how we would proceed with it. On that basis, I have made proposals today that I believe will provide the sort of safeguards that his constituents have been raising.
Mr Speaker
Order. A great number of hon. and right hon. Members are still seeking to catch my eye and I want to accommodate them on this very important matter. I hope they will help me to help them by being brief. Perhaps we can be given a textbook example of the genre by Mr Bernard Jenkin.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
I commend my right hon. Friend for the sensitive way in which she is approaching the issue and welcome her statement and the legislation she is proposing. Does she agree that it is legislation not to change the society in which we live but to recognise how society has already changed, and that we should afford the freedom to marry to every citizen in this country?
Stephen Williams (Bristol West) (LD)
I have long wanted to see a society in which couples who love each other, whether they are of the same sex or the opposite sex, can demonstrate that love and commitment in front of their family and their friends and for that commitment to be recognised by society. Does the Minister agree that all of us who want to see such a society should be very proud of her announcement today, which is a major strike for civil rights and equality in our country?
Maria Miller
Yes, although it will now be important to work with religious institutions to ensure that there is happiness about the safeguards.
Mr Speaker
Was the hon. Gentleman in the Chamber at the start of the statement? He was. We must hear him. I call Mr David Simpson.
David Simpson
Further to a previous question, if a school teacher who teaches religious education believes that the Bible teaches that this act is wrong and tells her pupils that, will she be protected?
Maria Miller
The answer is absolutely yes, if that is the individual’s belief. That is particularly important for faith schools, but as we would expect from all our teachers, we would want to ensure that such a belief was expressed in a balanced way.
Simon Hughes (Bermondsey and Old Southwark) (LD)
I am a member of a party that supports equal marriage, but the Minister none the less must take into account that this was in no election manifesto, that it was not in the coalition agreement and that many members of my constituency, my church and my party feel that much more work must be done to see whether it is possible to redefine civil marriage separately from the traditional definitions of religious marriage. She therefore needs to proceed very carefully and cautiously, engage with the faith leaders to seek their agreement before proceeding, and proceed with draft legislation before moving speedily to get something on the statute book.
Maria Miller
My right hon. Friend obviously has strong views on the question. My priority is to allow same-sex couples to marry and not to overhaul marriage law, but he is right to say that we need to work with religious leaders. I will start those discussions as soon as the statement has finished.
Sir Peter Bottomley (Worthing West) (Con)
As all marriages now are between different-sex people, it is surprising that only 61% regard marriage in such a way—it should be 100%. Like my hon. Friends who disagree with me on this, I would hope that 200 years ago I would have been part of the Clapham sect, and I think it would be a good idea to have a joint opinion poll from the Freedom to Marry campaign and the Coalition for Marriage asking a yes/no question. We could then work from the same figures, which would probably show that two thirds of the population want this legislation to go through. I support that.
Maria Miller
I would suggest that it is the role of Parliament to debate such issues. I would not want to rely on opinion polls to determine such an important issue.
Jane Ellison (Battersea) (Con)
We all represent a great many young constituents, although they are perhaps not our most active correspondents on this issue. Life is very tough for many young gay people, so does the Minister agree that this is an important way of sending out a signal to them as they grow up in our society that we value and treat them equally?
Maria Miller
I certainly hope that that will be one result from what we are talking about today.
Mr Laurence Robertson (Tewkesbury) (Con)
The Government are hiding behind triple locks and quadruple locks on what may or may not happen in churches. Let me point out that although there are religious and civil ceremonies, there is only one marriage, and many people of all faiths and no faith are deeply offended—I repeat, deeply offended—by these proposals.
Maria Miller
My hon. Friend is absolutely right that there is one marriage—there are different ways into it, but there is just one concept of marriage. The locks that we propose are very much about listening to people’s concerns, but not just listening, as they are also about acting and ensuring that the safeguards are effective.
Mr Julian Brazier (Canterbury) (Con)
My right hon. Friend well knows that schools are required to teach children about family life. Given that the Government are proposing to redefine marriage, which is at the heart of the matter, I echo other Members in asking what concrete safeguards the Government propose to put in place to protect Christian teachers who teach that marriage should only be between a man and a woman.
Maria Miller
I reiterate and underline what I said earlier—that nothing we have announced today will change how children are taught. Teachers will be able to describe their belief that marriage is between a man and a woman, but as with all teaching, we would of course expect that to be done in a balanced manner.
Gavin Barwell (Croydon Central) (Con)
I warmly welcome what my right hon. Friend has said today, but some of my constituents and some of my closest friends on these Benches have real concerns. Is not the message today that we must find a way to ensure that those churches that do not wish to conduct same-sex marriages do not have to, but that while they rightly demand that their religious freedom is protected, they cannot deny others who wish to conduct these marriages the opportunity to do so?
Maria Miller
I could not agree more with my hon. Friend, who I think has articulated the position absolutely correctly. That is the Government’s position.
Dr Matthew Offord (Hendon) (Con)
Yesterday I asked the Minister about polygamy, and she was unable to answer my concerns. Is she aware of the campaigns now taking place in Canada to legalise polygamy, since marriage was redefined there in 2005?
Maria Miller
I think I did answer my hon. Friend’s question yesterday by saying that marriage in this country is between two people.
Mr David Burrowes (Enfield, Southgate) (Con)
Now that the state wishes to redefine marriage, will it redefine adultery and non-consummation?
Maria Miller
Again, that is an important detail, which I am sure will be looked at further when the Bill is examined in Committee. I can say clearly to my hon. Friend—the consultation document says that there must be clarity on this issue—that no changes to the laws of adultery are proposed and that same-sex couples will have the current laws of adultery available to them if those laws apply. If they do not apply, there will also be grounds of “unreasonable behaviour” for individuals to seek divorce if the behaviour falls short of adultery. I believe that this reflects the current situation for civil partnerships.
John Glen (Salisbury) (Con)
In April this year, when the Scottish National party produced a consultation that allowed anonymous responses, the Conservative party said:
“Nothing the SNP now assert on the basis of a rigged consultation to which SNP members can contribute anonymously and as many times as they like will command confidence”.
Why, then, in the case of this consultation, in which 60% of the respondents were anonymous on a matter that was not in the manifesto and when my constituents do not want this to happen by a factor of 25:1, are the Government pressing ahead with it?
Maria Miller
I can perhaps reassure my hon. Friend that the consultation we undertook was carried out correctly and properly, and that proper safeguards were put in place to avoid any multiple submissions. I urge my hon. Friend to consider the fact that while many people who do not agree with the Government’s position may contact him about their views, there may be many others who do agree with it but whose voices are not as strong.
John Pugh (Southport) (LD)
Given that the proposals are clearly based on the principle of equality, does it not make the refusal to offer civil partnerships to heterosexual couples completely incapable of coherent explanation and thus subject to obvious legal challenge in the future?
Maria Miller
We are saying that we have not identified a need for opposite-sex civil partnerships and, as I have already said, my priority is to allow same-sex couples to get married without undertaking a complete overhaul of either civil partnerships or marriage law in general.
Dr Sarah Wollaston (Totnes) (Con)
I love being married. Surely it cannot be right in this day and age to deny the symbolism around marriage to our constituents on the basis of their sexuality. Does the Minister join me in looking forward to a day when all faiths, not just the Church, guarantee full equality to all women and to all people whatever their sexuality?
Maria Miller
I understand my hon. Friend’s sentiment and, on a personal level, I have a great deal of sympathy with what she says. As a House of Parliament, however, we need to respect the fact that not everybody is in the same position on these issues. I believe there are important merits in offering marriage to more and more people, and I hope every Member will join me in celebrating the importance of marriage in our society today.
Mr Robin Walker (Worcester) (Con)
As a supporter of the institution of marriage, I welcome in principle the Government’s desire to extend it to more people through equal civil marriage. However, I and many of my constituents are deeply concerned that the extension of this legislation into the religious domain could increase the risk of costly legal challenges to the Churches and religious groups. Can the Minister offer any clear assurance that the Government’s legal advice is not only that such challenges would fail but that the Churches can be protected from extra costs that might be imposed?
Maria Miller
I reiterate that the triple lock is designed to make sure that changes in the Equality Act 2010 work at a local level so that churches and, indeed, that individuals do not face the prospect of challenge and that any challenge will be directed at the Government. Even more important, case law and the European convention ensure that we have put beyond doubt the protection of religious belief in this matter. These are the sort of concrete reassurances that I am sure my hon. Friend and his constituents would welcome.
Andrew Selous (South West Bedfordshire) (Con)
A year ago, the Prime Minister described the United Kingdom as a Christian country. Does my right hon. Friend, whom I greatly like and admire, recognise that this legislation will mark a significant moment as this country will be passing a law that is directly contrary to what Jesus said about marriage in Mark chapter 10 and Matthew chapter 19?
Maria Miller
My hon. Friend is right that, as I outlined in the statement, this is a significant moment. We have faced other such significant moments in the evolution of marriage, and Parliament has been a radical campaigner on this issue over the centuries. I hope that my hon. Friend, who I know takes a thoughtful approach to this matter, will agree to look at the quadruple lock that I proposed today. I would certainly be happy to sit down with him and talk about it further if he has any further anxieties.
Mr Marcus Jones (Nuneaton) (Con)
Notwithstanding my right hon. Friend’s comments, can she explain how the Bill will guarantee that my constituents, including teachers or public sector workers who disagree with the state’s new definition of marriage, will not fall foul of employment laws for expressing their personal views in the workplace? Will it not just be a lawyer’s paradise?
Maria Miller
I can understand why my hon. Friend wants to raise that question today. Recent case law, which we would not want to go into on the Floor of the House, has highlighted how individuals who have raised their own views on the issue of equal marriage have experienced problems. What I have been reassured about, however, is the fact that those issues have been resolved and the courts have been very clear that individuals are entitled to their private views on this matter and that those views should not be held against them.
Fiona Bruce (Congleton) (Con)
I understand that the head of the Government Equalities Office told representatives of the Roman Catholic Bishops’ Conference that each signatory to the coalition for marriage petition would be counted as an individual response to the Government’s consultation. Because of that assurance, many supporters of traditional marriage focused on that petition. Why did it not happen? Was it because including those half a million and more signatures would have shown a substantial majority against plans to redefine marriage—something that is also confirmed by my constituency postbag?
Maria Miller
Let me emphasise again that we have read all the petitions and all the submissions to the consultation, and reassure my hon. Friend that every single one of those submissions has validity. However, I must also remind her that our starting point was not whether we would introduce these measures, but how we would do so. While the strength of feeling is clearly there, other Members have mentioned organisations and individuals who support these measures, and we must ensure that we take a balanced approach.
Mr Philip Hollobone (Kettering) (Con)
I am afraid that that answer simply is not good enough. I put it to the Government that their professed deep-seated and heartfelt commitment to equality does not appear to have applied to the consultation itself. Can the Minister explain to the very fair-minded residents of the Kettering constituency why the views of the overwhelming majority of respondents have been rejected, including a massive petition with more than half a million signatures?
Maria Miller
I know that my hon. Friend speaks powerfully for the people of Kettering, and I know that he will want to stand up for the wide range of views that undoubtedly exist in his constituency. I assure him that all those views have been considered, and that they have helped us to form our response today. We have proposed a quadruple lock to protect religious institutions, but it is also important for us to represent people who may even live in his constituency: gay couples who want to be able to celebrate their love and commitment to each other through marriage.
Kris Hopkins (Keighley) (Con)
I warmly welcome my right hon. Friend’s statement and this important legislation. On Saturday I had the pleasure of attending the installation of the Rev. Pat Bateman as vicar of All Saints church in Ilkley. Several religious leaders who attended the ceremony expressed a fear that they might be forced to conduct gay marriages in their churches. Can my right hon. Friend reassure them that that is not the case?
Maria Miller
I welcome my hon. Friend’s support. I can certainly reassure him that it will be for religious organisations and, indeed, individual ministers to discuss the issue themselves, and to examine the protections that we have introduced in order to ensure that no ministers or religious organisations will be forced to conduct same-sex marriages if they feel that that does not accord with their own religious beliefs.
Craig Whittaker (Calder Valley) (Con)
The Minister has said today that she has given a clear articulation of protection for religious freedoms by introducing a quadruple lock. However, she has also said that there is a “negligible” chance that that will be challenged. Can she tell us what the risk of a challenge is in percentage terms?
Maria Miller
I remind my hon. Friend that it is not just the quadruple lock that will provide that protection. The case law of the European Court of Human Rights, and the rights in the European convention, put the protection of religious belief in this matter beyond doubt, and I ask him to focus on that.
Mr John Leech (Manchester, Withington) (LD)
I warmly welcome the Minister’s commitment to the introduction of equal marriage. I also welcome the quadruple lock guarantee which will ensure that churches that do not wish to conduct such ceremonies do not have to do so. We must accept, however, that the consultation process has been divisive. Does she agree that we should now seek to reassure all those churches that they have nothing to fear from the legislation?
Maria Miller
I hope I can convince my hon. Friend that the consultation was absolutely fair, but he is right to say that we now need to work not just with the churches but with religious institutions throughout our country to ensure that the safeguards that are clearly necessary are effective.
David Rutley (Macclesfield) (Con)
Many Macclesfield residents have expressed concern about the legislation. Having known the Minister for many years, I am aware that family and marriage are very important in her own life. What those residents want to know is how churches and faith groups will be protected not just from human rights laws but from equalities legislation. That is what worries them.
Maria Miller
The people of Macclesfield are well represented by my hon. Friend, and I know that the importance of family ranks high in his life as well. I can assure him that the amendments that we will introduce to the Equality Act 2010 will provide protections in local law to ensure that individuals, and indeed religious institutions, need have no fear of action being brought against them on equality grounds. I hope that he will be able to convey those reassurances to his constituents.
Richard Graham (Gloucester) (Con)
Although the debate is still divisive, I welcome the balance struck by my right hon. Friend’s proposals to make marriage—which so many of us value hugely—available to all who want to be married, while protecting the freedoms of those who disagree. The last of the four important proposed legal locks recognises the opposition of the Church of England, and will make it illegal for same-sex marriages to be conducted in C of E churches. Can my right hon. Friend confirm that it will be possible for Roman Catholic and evangelical churches to opt out in a similar way if they so wish?
Maria Miller
My hon. Friend is right to say that what we are trying to establish today is a balanced approach. I can tell him that the various mechanisms that I have outlined today will provide protections that both the Roman Catholic Church and the Evangelical Church have identified to me at both national and local level.
Mr David Nuttall (Bury North) (Con)
Will the Minister please tell the House how many respondents to the consultation were resident outside the United Kingdom?
Maria Miller
The hon. Gentleman will know that there were more than 200,000 responses to the consultation, and that people outside the United Kingdom were given an opportunity to participate. We collected all the information and examined it in detail, and it helped us to think about how, not whether, we should implement the proposals. That is what I ask my hon. Friend to focus on.
Jeremy Lefroy (Stafford) (Con)
Can my right hon. Friend unequivocally guarantee freedom of conscience and speech to my constituents, at work and elsewhere, allowing them to disagree publicly with the redefinition of marriage without sanction by their employers?
Maria Miller
As I said earlier, a case involving an individual who articulated a view about equal civil marriage has already gone to court. I think that the courts have upheld the view that individuals are entitled to their private views, and that their jobs can be safeguarded on those grounds.
Mr Speaker
Order. The hon. Gentleman has perambulated around the Chamber. If he assures me that he has at all times remained within it, we must hear him. It is a very curious approach, but it is not of itself a breach of the Standing Orders of the House. [Hon. Members: “He has been hiding.”] He has been hiding! Let us now hear from Mr Alec Shelbrooke.
Alec Shelbrooke
I am most grateful to you, Mr. Speaker. I have indeed moved around. I was not going to get involved, but I just want to say this to the Minister. The fact is that the vast majority of my constituents simply do not believe that the European Court of Human Rights will not take this further. I think that a great many Members on this side of the House would support the Bill if we withdrew from the European convention on human rights and introduced a British Bill of Rights. That, by the way, was in the Conservative manifesto.
Maria Miller
I know that my hon. Friend never hides his views—although he may have been hiding himself from you in the Chamber today, Mr. Speaker—but I ask him to join me in trying to move away from the hyperbole that has been employed in campaigns that we have all witnessed in recent months. When the facts are looked at, the safeguards are clear. I remind him—at the risk of repeating myself unduly—that the case law of the European Court of Human Rights, as well as the European convention, clearly puts the protection of religious belief in this matter beyond doubt, and that is the Government’s legal position.
Mark Pawsey (Rugby) (Con)
The Minister herself described the institution of marriage as a building block of our society, but last year nearly 50% of all babies were born to couples who were not married. Given that marriage rates in Spain and Holland collapsed after the introduction of same-sex marriage, does she not fear that in this country even fewer couples intending to have children will choose to marry?
Maria Miller
I respect my hon. Friend’s views on this, and share his concern that many people today do not view marriage as relevant to them. I hope all Members will take this issue very seriously, because we should encourage more people to see marriage as an important way to cement their relationships and show commitment and responsibility, and so strengthen our society. I do not think that what my hon. Friend has said would happen in the UK, however. I think our proposals will be welcomed and will serve to promote the relevance of marriage today.
Rehman Chishti (Gillingham and Rainham) (Con)
How many people of the Muslim faith—and of the Sikh and Hindu faiths—responded to the consultation, and how many were for this proposal and how many were against? I must tell the Minister that in my constituency concerns have been raised with me about this redefinition by people from the churches, the mosques and the gurdwaras. I ask her to take that on board.
Maria Miller
My hon. Friend is right to suggest that this issue is important for not only the Churches, but for faith groups across the board. That is why the protections I have outlined will work across the board. This is not a numbers game, but I am happy to look at whether we can provide the detailed information that my hon. Friend requests.
Bob Blackman (Harrow East) (Con)
I welcome the tone in which the Minister delivered the statement. One concern, however, is that there has not yet been any mention of what changes will be made to the Marriage Act 1949, which guarantees the rights of individuals to get married in a place of their choosing where they live or where they have a residence, and that many religious institutions—particularly those with relatively small congregations—will be forced against their will to host marriages.
Maria Miller
My hon. Friend must look at the quadruple lock I have announced today for the reassurance he seeks. Under that, there is no way a religious institution or individual would be forced to do what he says. I have already acknowledged the particular situation of the Church of England, which is why we have taken specific measures to protect it.
Penny Mordaunt (Portsmouth North) (Con)
I would like to reassure the House that, as an unmarried heterosexual woman, if these measures go through I will certainly consider the institution. The heart of the matter, however, is whether it will be possible to allow same-sex marriages, whether civil or religious, and still protect those religious organisations that do not wish to participate. What can the Minister do to reassure Members who might be sceptical that that will be possible?
Maria Miller
I believe that we can provide local reassurance through the law, and I have already outlined the European situation. By working together with religious organisations, we can build confidence in what we are proposing. It is right that following this statement we should work collaboratively, and I would be happy to meet any Member who wants to discuss these matters in more detail.
Richard Drax (South Dorset) (Con)
I do not agree with the redefinition of marriage, and nor do the majority of the constituents of South Dorset. Other than arrogance and intolerance, what right have the Minister and the Government got to stamp their legislative boot on religious faith?
Maria Miller
My hon. Friend represents the people of South Dorset extremely well. He rightly vigorously puts forward his own views, and I respect that. However, the state has had a stake in the institution of marriage for more than 170 years, and I therefore believe it is right that the state asks itself whether it is right to exclude people from the institution of marriage simply because they are gay. I do not believe that is right, which is why these changes have been proposed and the Government are presenting our response to the consultation.
Dr Julian Huppert (Cambridge) (LD)
I congratulate the Minister on her comments. The state should not bar a couple who want to marry just because of their gender, and the state should not bar a religious body that wishes to do so from conducting same-sex marriages. Will she also look, however, at providing in England legally binding humanist weddings, which work so successfully in Scotland?
Maria Miller
That is a detail I am happy to look at. It is not part of our proposals today, but, in the spirit of collaboration, I will be happy to talk to my hon. Friend about it.
Andrew Bridgen (North West Leicestershire) (Con)
I have listened to the Minister’s remarks on the legal robustness of this possible change in legislation and redefinition of marriage, but I am somewhat sceptical. Why has she not made public the Attorney-General’s specific advice on this matter?
Maria Miller
As I am sure my hon. Friend knows, any advice the Government receive is privileged information. I have set out the Government’s legal position, which is straightforward and clear, and I hope it will provide my hon. Friend with the reassurance he seeks.
Mr Speaker
I am grateful to the Minister, the shadow Minister and all colleagues. Some 62 Back Benchers were able to contribute in 60 minutes of Back-Bench time. That shows what we can do when we put our minds to it. I warmly thank the Minister of State for her statement.
Northern Ireland
(12 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Northern Ireland (Mrs Theresa Villiers)
With permission, Mr Speaker, I would like to make a statement about recent events in Northern Ireland.
Over the past week a series of protests has taken place relating to the decision taken by Belfast city council on the flying of the Union flag. A number of these have witnessed violence, rioting and attacks on police officers. Yesterday evening, a masked gang threw a petrol bomb inside an unmarked police car; a young policewoman narrowly escaped very serious injury. That is now being treated by police as attempted murder.
As I made clear in the House last Wednesday, there can be absolutely no excuse or justification for this kind of thuggish and lawless behaviour. It is despicable. We condemn it unreservedly, and it must stop immediately. I welcome the motion passed unanimously yesterday in the Northern Ireland Assembly, which unequivocally condemned
“rioting and the campaign of intimidation, harassment and violent attacks on elected representatives”
and reaffirmed
“the absolute and unconditional commitment of all its Members to respecting and upholding the rule of law and the pursuit of their political objectives by purely legal and political means”.
Let us be very clear: no one can be in any doubt about the Government’s support for the Union and its flag, but the people engaged in the kind of violence we have seen in the past few days are not defending the Union flag. There is nothing remotely British about what they are doing. They are dishonouring and shaming the flag of our country through their lawless and violent activities. They discredit the cause that they claim to support. They are also doing untold damage to hard-pressed traders in the run-up to Christmas, and they undermine those who are working tirelessly to promote Northern Ireland to bring about investment, jobs and prosperity.
In addition to outbreaks of violence, appalling threats have been made against elected politicians, including a death threat to the hon. Member for Belfast East (Naomi Long). I know that the whole House will join me in expressing our complete solidarity with the hon. Lady and her colleagues in the Alliance party and all the people who have been threatened and intimidated over the last week by this disgraceful conduct. The right of elected representatives to go about their daily business without the threat or fear of intimidation is one of the hallmarks of our democracy, and these threats are nothing less than an attack on democracy in this country.
Throughout this crisis, I have stayed in close contact with the Chief Constable for Northern Ireland. Some 32 police officers have been injured in the line of duty during the last week, and I want to take this opportunity to pay the warmest of tributes to the brave men and women of the Police Service of Northern Ireland, who once again find themselves in the front line in countering and tackling violence, and once again they have shown themselves to be fearless guardians of the rule of law whenever, and from wherever, it comes under attack. I received a further update from the Chief Constable this morning. He informed me that about 38 people have now been charged in relation to this disorder. Those engaged in violence should be in no doubt of the determination of the Chief Constable and the PSNI to apply the full force of the law—those engaged in violence should be well aware of that fact. I have also discussed with the Chief Constable the threats to elected politicians. Again, I am in no doubt as to the extreme seriousness Matt Baggott, like the rest of us, attaches to those unacceptable threats. I assure the House that the PSNI is doing all it can to enable elected politicians to carry out their duties and serve their constituents.
For our part, the UK Government will continue to give their fullest backing to the PSNI. That is why, in the face of the deteriorating security situation we inherited, the Government secured an exceptional additional £200 million from the Treasury reserve. We will continue to do all we can to assist the Chief Constable in keeping the people of Northern Ireland safe and secure, whether from so-called dissidents or from those responsible for this week’s events.
Yet responsibility for solving the underlying issues that have led to the violence does not rest solely with the police or with the UK Government, and it is right that local politicians in Northern Ireland take the lead in trying to reach agreement on a way forward. In tackling these issues, I believe that everybody has a responsibility to consider very carefully the impact of their words and deeds on wider community relations.
Once again, the trouble we have seen in Belfast and elsewhere underlines the urgent necessity of working towards a genuinely shared future for all the people of Northern Ireland. We have made it clear that where the Executive take the difficult decisions needed to deliver that, they will have the Government’s full backing. It would be a huge lost opportunity if Northern Ireland politics were to continue to be defined by questions of identity. There is a pressing need to focus on the wider issues of the economy, jobs and delivery.
The scenes of the past few days have been deplorable, but we should not let them detract from the positive progress that Northern Ireland has made in recent years. That was highlighted last Friday by the visit to Belfast of US Secretary of State Hillary Clinton. She rightly pointed to the many difficult decisions taken by local politicians and the leadership they have shown in bringing us to where we are today. I am sure that those politicians will not allow the achievements that have been made to be undermined by lawless violence of the kind we have seen over the past week. I am also sure that this House will remain united in support of their efforts to move the peace process further forwards towards a genuinely shared future for all in Northern Ireland.
Vernon Coaker (Gedling) (Lab)
I thank the Secretary of State for coming to the House to make this statement and for advance sight of it. Let me say why I, and the Opposition, called on her to do so. There have been eight consecutive nights of violence in Northern Ireland. A Member of this House has had her life disgracefully threatened, and her Alliance party has seen its representatives intimidated and subjected to violence, and its property attacked.
Violence against the police has escalated, to the extent that an attempt was made to murder a female officer last night by breaking the window of a police car and throwing a petrol bomb inside while she was still in the vehicle. Dozens of officers have been injured after coming under sustained attack over the course of the week. A few days before, another murderous attack on the police was narrowly avoided only when a vehicle carrying a rocket was apprehended in Derry. It cannot go on, and Westminster’s voice must also be heard. This violence would not be tolerated in London, Cardiff or Edinburgh, and it should not be tolerated in Belfast. A clear and strong message must be sent from this place today that says this violence is wrong, unacceptable and without justification.
May I join the Secretary of State in once again paying tribute to the Police Service of Northern Ireland for its dedication and bravery? I spoke earlier to the Justice Minister, whom I also met a few days ago in Belfast. What discussions has the Secretary of State had with him and the Chief Constable about resources and the police’s capacity to deal with this disorder, and the continuing national security threat? Will she update the House on what her latest security assessment is?
The homes of public representatives have been vandalised and attacked. Local councillors, who are doing their best on behalf of the communities they serve, and their families have seen their homes targeted and vandalised. I am sure I speak for the whole House when I say that whether we are talking about a Democratic Unionist party councillor in Dungannon, two Alliance councillors and their family in Bangor, or the husband of a Sinn Fein councillor in Armagh, such violence is wrong and must stop. I stand shoulder to shoulder with public representatives in Northern Ireland, for democracy and against violence. When a Member of Parliament is threatened and attacked, I view it as a threat to and attack on all of us and everything we stand for.
Will the Secretary of State tell me what assessment she has made of the involvement of loyalist paramilitaries in the rioting? Does she view their actions as a threat to national security? What discussions has she had with the Prime Minister about this? Has he discussed the ongoing violence with the First Minister and Deputy First Minister, or the Justice Minister?
I know there are underlying issues and I am realistic about the challenges we face. I have been with Unionist and loyalist political representatives to visit areas in Belfast and other parts of Northern Ireland, and I want to say this: hon. Members and others from Northern Ireland are doing a really difficult job in these circumstances in these communities. I do not doubt their sincerity, integrity or hard work. They are dealing with frustration and anger, and they need support in helping to channel that away from violence and towards politics. I will do what I can to help, and I make that offer in republican and nationalist communities, too. But violence is never justified and it is wrong. It is damaging those communities and until it stops we cannot even begin to discuss or do anything about the longer-term issues that need to be resolved. What discussions has the Secretary of State had with political representatives about supporting work in these communities? Will she consider bringing political leaders together to see what can be done and what support the UK Government can give to any initiatives in these areas?
I care deeply about Northern Ireland and its people, and I know the Secretary of State and all other hon. Members do, too. I think it was exceptionally important today that we came together as the United Kingdom House of Commons and said that. Northern Ireland matters; it is important. I hope that we see this awful violence ended and that we can look forward to a 2013 in which Northern Ireland is showcased on the world stage as the great place it truly is.
Mrs Villiers
I thank the shadow Secretary of State for the measured tone of his response. Like him, I believe that violence of the sort we have seen over the past week is unacceptable in Northern Ireland, just as it would be unacceptable anywhere else in the United Kingdom. In particular, I fully agree with him that these attacks on the police are absolutely despicable and should not be tolerated.
The hon. Gentleman is right to highlight the arrests recently made in Londonderry in relation to an explosively formed projectile device. They were very significant arrests and Northern Ireland is a safer place as a result of their having taken place. He asked about my contacts with the Justice Minister. I believe I have spoken three times to the Justice Minister since these events started to unfold. I have also spoken to Deputy Chief Constable Judith Gillespie and spoken three times to the Chief Constable to make sure that I am fully aware of their concerns. I know that the Justice Minister continues to work extremely hard to ensure that the police have all the resources they need, and the UK Government are entirely supportive of him in his efforts to do that.
The shadow Secretary of State asked for an update on the general security situation. The threat level from dissident terrorism remains at “severe”, meaning that an attack is highly likely. The PSNI continues to focus strongly not only on these disturbances, but on all activities undertaken by paramilitaries and all terrorist activities in Northern Ireland. He particularly asked me about the investigation of loyalist paramilitary involvement in the disturbances, and I was discussing that with the Chief Constable this morning. It appears that some loyalist paramilitaries attended some of these events. There does not appear to be evidence of organised orchestration by paramilitary groups, but I am sure that the PSNI will be reviewing this carefully and will continue to investigate it as part of its wider investigation, which is extremely serious in relation not just to the disorder, but to the disgraceful threats received by elected representatives.
The shadow Secretary of State asked me whether I have discussed this matter with the Prime Minister. I have been keeping the Prime Minister fully informed on this; a copy of my statement was sent to him, I discussed this matter with his chief of staff this morning and he is following events very closely. The shadow Secretary of State also asked about my contact with Northern Ireland politicians. I spoke this morning to the First Minister about this situation specifically, and I have had a whole series of meetings; pretty much every discussion I have had with Northern Ireland politicians since being appointed Secretary of State for Northern Ireland has focused on building a shared future and dealing with sectarianism, because that is one of the crucial challenges we face as a nation, in the United Kingdom in general and in Northern Ireland in particular.
The shadow Secretary of State was right to focus on and express concern about frustration and anger. It is essential that that frustration is channelled only into legitimate protest and into the political process as well. The history of Northern Ireland shows what incredible progress can be made once people abandon violence and promote the peaceful and democratic resolution of differences across the community.
Mr Laurence Robertson (Tewkesbury) (Con)
As a Unionist who believes that the Union flag should fly over every public building in the United Kingdom, may I join the Secretary of State in condemning the violence that we have seen in the Province? I join her also in paying tribute to the members of the PSNI and in sending our sympathies to those who have been injured. I pay great tribute to the hon. Member for Belfast East (Naomi Long), who has shown great courage and determination at this time. She is a very valuable member of the Select Committee—a Committee that is working hard to try to help improve the economy of Northern Ireland. Does the Secretary of State agree that nothing could do more to undermine those efforts than the violence that we are currently seeing on our television screens every day?
Mrs Villiers
I thank my hon. Friend for giving me another opportunity to express my concern and sympathy for the hon. Member for Belfast East and all the others who have found themselves in a similar position, not least Sammy Brush, the DUP councillor.
I completely agree with my hon. Friend, the Chairman of the Northern Ireland Affairs Committee. This is absolutely the last thing Northern Ireland needs. At a time when so much effort is going into reviving the private sector in Northern Ireland and boosting its economy, to promote inward investment and to promote Northern Ireland as a great place to live, to work and to invest, it is hugely damaging to see scenes of riot and disorder on our TV screens. That is another reason why it is imperative that no matter how strongly people feel about flags, they express themselves only through democratic means and never by violence and disorder.
Naomi Long (Belfast East) (Alliance)
I thank the Secretary of State for her statement, and I join her in condemning last night’s wanton and gratuitous attempt to murder police officers who were guarding my constituency office and for whom I have the utmost admiration and respect. That attack is no different from previous murder attempts by dissident republicans against the security services.
Can the Secretary of State therefore confirm that this violence is being treated as a matter of national security, and advise when the Prime Minister will meet the Northern Ireland Justice Minister to discuss the security situation in Northern Ireland, as has been requested? Finally, does she agree that if we are to have a shared future capable of dealing with emotive and charged issues such as the flying of flags, it will require strong, courageous and above all generous leadership, willing to give a little of their own position in order to gain the greater prize for the whole community?
Mrs Villiers
I am grateful to the hon. Lady for her question. However one chooses to label these attacks, whether one calls them terrorism or criminal activities, they are utterly unacceptable. There is a technical definition of national security, but whether or not one applies that in this case, it is unacceptable for these attacks and threats to take place.
With reference to the Prime Minister and the Justice Minister, as Northern Ireland Secretary I remain happy to meet the Justice Minister whenever he would like, and I am happy to pass on again his request to the Prime Minister for a direct meeting with him. I have every sympathy with the hon. Lady’s call for generous leadership. Again, the successes of the past 20 years demonstrate that generous leadership and being prepared to compromise can lead to tremendous benefits right across the community, and I have every confidence that the political leadership in Northern Ireland is capable of that form of generous leadership on flags, as it has been on so many other issues.
Kris Hopkins (Keighley) (Con)
May I reiterate my support and admiration for the brave men and women of the Police Service of Northern Ireland, and condemn the mindless thugs who are betraying the name of Unionism, which I support? Does the Secretary of State agree that every brick and petrol bomb that is thrown damages inward investment, job creation and tourism in Northern Ireland?
Mrs Villiers
Yes, I agree that significant economic damage is being done as a result of these riots, which is another reason why it is urgent that they cease.
Paul Murphy (Torfaen) (Lab)
Does the Secretary of State agree that although the priority must be to end the appalling violence, the Alliance party genuinely tried to find a compromise on a very difficult issue? Does she accept that it is important for her, as the United Kingdom Secretary of State not only to talk to the political leaders in Northern Ireland—that is vital—but to engage in conversation with leaders of local government in Northern Ireland, to try to stop the violence happening elsewhere?
Mrs Villiers
I agree that it is very important for me and for my Minister of State to engage with local government on these and other issues, and with the wider community as well. It is essential that councillors from Belfast city council are able to take decisions on issues such as flags without being intimidated, and without having a riot outside their door. It was a disgraceful start to a sad series of events that a council was prevented from taking a vote on the issue. It is down to the council to take its own decisions on these matters.
Stephen Lloyd (Eastbourne) (LD)
I wholeheartedly support the Secretary of State’s statement today and endorse, from my own perspective and that of my party, the dignity with which the hon. Member for Belfast East (Naomi Long) has dealt with the very challenging scenarios of the past 10 days for her and for the Alliance party that she represents. I represent a constituency whose Member of Parliament, Ian Gow, was murdered many years ago by the IRA. He is still fondly remembered across the whole party political spectrum in Eastbourne. I seek reassurance from the Secretary of State—it is particularly relevant to what the hon. Member for Belfast East and some other politicians have been going through—that both the UK Government and the devolved Government will work closely together to ensure that elected politicians in the north of Ireland continuously and continually have the appropriate levels of security for their protection?
Dr William McCrea (South Antrim) (DUP)
At the outset, on behalf of my right hon. and hon. Friends, I unreservedly condemn those who have engaged in violence on our streets and assure those injured or affected by such violence, including the police, of our support. I also unreservedly condemn any threat against the hon. Member for Belfast East (Naomi Long) and her colleagues. I certainly know what that is like because the IRA tried not only to attack my property, but to assassinate me and my complete family because I wanted to hold to the Union flag. However, does the Secretary of State agree that it is not right to demonise those who wish to protest peacefully against a decision to remove the Union flag from Belfast city council? That flag is the very core of the Unionist identity and many people of Northern Ireland died in order to keep it aloft in our Province. Can the Secretary of State therefore assure me that the PSNI has every resource that it needs to maintain law and order and to facilitate peaceful protest?
Mrs Villiers
I very much welcome the hon. Gentleman’s forthright condemnation of what has gone on. Clearly, he has a special perspective on this, having himself been a victim of such terrible threats in the past. It is a fundamental part of our democracy that people have the right to protest peacefully. That cannot, of course, justify the terrible scenes that we have seen on our television screens over the past week.
Ben Gummer (Ipswich) (Con)
Everyone in the House will have seen how communities across the United Kingdom have fought hard over the past few years to reclaim the Union flag as an identity for everyone who lives in this country—something that we saw so splendidly this summer in the jubilee and the Olympics. Is my right hon. Friend not frustrated that in this year when the flag really did become a symbol for everyone who lives in this country, no matter from what background they come, it is being so abused at present?
Mrs Villiers
It is a concern that we see our Union flag being abused. Like my hon. Friend, I shared the joy that I think everyone felt with fantastically successful events this year, such as the Queen’s jubilee and the Olympics, where the Union flag played such a wonderful central role and such a positive one. That is another reason why those who persist in that course of conduct should stop immediately and confine their activities to peaceful participation in the democratic process, rather than seeking to hold people to ransom by rioting and threatening them.
Paul Goggins (Wythenshawe and Sale East) (Lab)
I, too, offer my full support to my hon. Friend the Member for Belfast East (Naomi Long). The Secretary of State referred to her conversations with the Chief Constable of the PSNI, who has indicated that the violence has been stoked up by individuals using social media. Does she agree that in order to identify those responsible it is essential that the police, with proper authorisation, can access relevant details of the communications of those causing the chaos? If she agrees, does she think that the Deputy Prime Minister’s threat to block the draft Communications Data Bill will help or hinder those who have to keep order in such circumstances?
Mrs Villiers
The right hon. Gentleman, who is a former Minister, will appreciate that, regardless of what happens to the proposed Bill, there are already opportunities for the police to look at social media: they can do that in a public way, as everyone else does. I can assure him that the PSNI is carefully monitoring social media within the parameters of what it is allowed to do by law.
Mr David Anderson (Blaydon) (Lab)
I agree entirely with the Secretary of State’s claim that this is nothing less than a fundamental attack on democracy. Part of being a democracy is accepting that sometimes we do not get what we want. Opposition Members know that very well, as every day of the week we have to accept things we do not like, and the same was true for Government Members when they were in opposition. Can we be very clear, on behalf of everyone in this House, that there is no way that the people leading the riots will succeed and that we will support the people in Belfast in carrying out their democratic mandate in what they have agreed to do properly?
Mrs Villiers
I welcome that firm statement, which I am sure that everyone will endorse. Such decisions need to be taken on the basis of democracy and consent, and indeed decisions on matters as sensitive as flags need to be taken after calm reflection. It is important that a real effort is made to take into account the concerns of people right across the community. There is a way forward. Northern Ireland has demonstrated that it can resolve seemingly intractable problems that have divided people for 800 years, so I am sure that they can find a sensible way forward on flags as well.
Ms Margaret Ritchie (South Down) (SDLP)
I thank the Secretary of State for her statement. In condemning the levels of unrest on the streets of Belfast and the assault on democracy and on our hon. Friend the Member for Belfast East (Naomi Long) and others across Northern Ireland over the past few days, does she agree that parties that agreed to designated days for flying the Union flag at Stormont should not have exaggerated the significance of having the same policy at Belfast city hall and that the consequences of such agitation, including the distribution of inappropriate literature door to door in east Belfast, have contributed considerably to the unrest on the streets?
Mrs Villiers
As I have said, the important approach is to recognise that those decisions are very sensitive and that different people in Northern Ireland view flags in completely different ways. I think that the guiding principle should always be that those decisions should be taken with care and thought after dialogue and with a mind on the impact on community relations and an understanding of their impact on people who have different views right across the community.
Kate Hoey (Vauxhall) (Lab)
Does the Secretary of State accept that for many hard-working, decent, pro-Union people there is a feeling that a shared future sometimes looks like a dripping away of their British identity? Does she accept that the Taoiseach and the Irish Government continually stand up for the nationalist community and their idea of a united Ireland? Will she, as Secretary of State, stand up more for the pro-Union community and the fact that this is the United Kingdom, and will she help by condemning the fact that a children’s playground has been named after an IRA gunman?
Mrs Villiers
It is my job, as Northern Ireland Secretary, to stand up for all the people in Northern Ireland. I say to the hon. Lady what I have said many times: this Government are not neutral on the Union, and neither am I. I am very supportive of the Union and Northern Ireland’s place within it. She invites me to get involved in the dispute about the naming of a playground. It is for the council involved to take that decision. I repeat what I have already said: it is very important that decisions on sensitive matters, whether playgrounds or flags, are taken in a measured way with appropriate attention to community relations and the consequences of those decisions on the wider community, including on people whose views are very different from those of the people taking the decisions.
Ian Paisley (North Antrim) (DUP)
If I am reading the Secretary of State correctly, I agree that it is completely insensitive and foolish for people to think that they can name play-parks after murderers and terrorists and remove the national flag from Northern Ireland, or reduce its flying, and think that there will be no consequences whatsoever. Sadly, we have seen that identity and the struggle for identity have consequences, and I condemn the violent consequences that have occurred. In giving meaning to the words in her statement, that nobody can be in any doubt about the Government’s support for the Union and its flag, will she go to Northern Ireland at her earliest convenience and reiterate again and again the view that Ulster’s Britishness is not diminished whatsoever?
Mrs Villiers
As I have said, I have repeated on many occasions the Government’s support for the Union and for Northern Ireland’s place within it. The question of Northern Ireland’s future is settled on the principles of the Belfast agreement; it will only ever be decided by democracy and by consent. When it comes to the politics of identity, I think that it is very important that when decisions are taken, whether on flags or other issues, the very different traditions, perspectives and perceptions of identity in Northern Ireland are taken into account, but I will never be in doubt about my support for the Union or about the UK Government’s support for it.
Michael Connarty (Linlithgow and East Falkirk) (Lab)
I fear that in many of these replies to the questions on the statement the idea of identity in Northern Ireland is being treated as somehow a theoretical construct. Last Thursday, when you, Mr Speaker, assisted by calling me to speak on the 41st anniversary of the McGurk’s bar bombing, what was revealed to me was that the people who had researched a book on the bombing and come here to launch it are deeply locked in the past. Clearly those people from west Belfast still feel a deep bitterness towards the United Kingdom and the involvement of its armed forces in their community. Similarly, in my work in the peace process over there, I have found that the people on the ground, not the politicians, feel deeply threatened by the turmoil that goes on at street level about identity, which leads to continued violence by IRA paramilitaries and the clear ability in loyalist communities to round up people on the streets and create violence. I urge the Secretary of State, apart from helping me get to the truth about the McGurk’s bar bombing, to get on the ground, talk to people and stop lecturing them from above.
Mrs Villiers
I can assure the hon. Gentleman that I and the Minister of State do talk with people on the ground about these matters—it is a crucial part of being effective in our roles. With regard to the matter of identity, the important thing is to remember that one of the fundamental principles of the Belfast agreement was the need to recognise that people in Northern Ireland view their identities differently. The agreement recognised the ability of individuals in Northern Ireland to define themselves as British or Irish, and indeed some may choose to define themselves simply as Northern Irish. The politics of identity is fluid and changing, but a key part of the Belfast agreement was recognition of an individual’s right to define their identity in whatever way they choose.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
I want to add my voice to those that have expressed solidarity with the hon. Member for Belfast East (Naomi Long) and with those brave public servants who put themselves in harm’s way to protect the public. Will the Secretary of State provide some reassurance about discussions she might have had with the Justice Minister in Northern Ireland and the Chief Constable on the violence and whether they have all the resources needed to deal with it?
Mrs Villiers
I have discussed both matters with the Justice Minister and the Chief Constable on a number of occasions over the past few months. The Chief Constable is on record as indicating previously that he has the resources necessary to police Northern Ireland, and that is in no small part because of the £200 million that this Government allocated from the Treasury reserve to the PSNI to support its efforts to keep people in Northern Ireland safe and secure and to combat the terrorist threat. The Chief Constable has not raised resourcing with me, but I am always open to conversations about that. Indeed, I am working with him on what will happen once the four-year period of the £200 million that has already been allocated expires and on what future arrangements might be made.
On conversations with David Ford, I am always happy to listen to his concerns, and if he feels that further resource issues need to be addressed, I am happy to discuss them with him.
Mark Durkan (Foyle) (SDLP)
I commend the Secretary of State for her statement and join her in offering support to my colleague, the hon. Member for Belfast East (Naomi Long), to all her party colleagues who have endured attack, and to representatives of Sinn Fein and the DUP who have endured attack. That empathy comes from a party that has suffered attack from loyalists and republicans. Does the Secretary of State agree that no national flag, whether the Union flag or the tricolour, should be used or abused as a visual aid to sectarianism or as a partisan prop in the way that has happened all too often in the past?
Does the Secretary of State recognise that in circumstances where Northern Ireland will be moving towards having 11 new councils under a carve-up determined by Sinn Fein and the DUP, there is a danger that the whole issue of flags being determined at council level will be played out in those new council chambers in a very difficult and dangerous way? Does she further recognise that there needs to be real dialogue among all parties about how we handle and manage that situation, in relation not only to flags but to the sensitive issue of the naming of public amenities run by councils, including play spaces, which in my view should be neutral and apolitical?
Mrs Villiers
Given the sensitivity of issues relating to national flags, yes, one does need to be cautious in terms of how the flag is approached in political debate. Certainly, any kind of inflammatory approach to these issues is not helpful. The key lies in dialogue and learning from past successes in the peace process where many more intractable issues have been resolved and compromises have been found. There is a real opportunity for the political parties, working together, to find a resolution on this. I welcome last night’s statements from the DUP and the Ulster Unionist party that they want to start such a dialogue.
Kevin Brennan (Cardiff West) (Lab)
I, too, express solidarity with the hon. Member for Belfast East (Naomi Long), who has shown great courage and dignity in the light of the attacks that she has suffered, and with all our colleagues from Northern Ireland—our valued colleagues in this place—who operate in a political environment in the north of Ireland which perhaps some of us can never fully understand. What is the Secretary of State going to do to make sure that this dialogue between the political parties takes place? It is all very well for us here in this House to express our condemnations of violence, but what needs to be done on the ground is to ensure that the political parties agree that they will operate with statesmanship and not just through rhetoric.
Mrs Villiers
I am very happy to engage in whatever way would be found helpful by the Northern Ireland parties. I echo the hon. Gentleman’s praise for hon. Members from Northern Ireland and the tremendous work that they do for all their constituents. Matters relating to the flag raise difficult issues. This is an opportunity for me, and indeed for the whole House, again to endorse the need to address sectarian barriers. There is very good work going on by the Northern Ireland Executive on things such as shared education—for example, getting schools working together so that children have an experience of being educated alongside those from other faiths. A lot of work has gone into the Executive’s cohesion, sharing and integration strategy. There is the will to make the change. The Northern Ireland parties have delivered phenomenal success in changing in the past, and it is now time to press ahead further and faster in addressing the sectarian barriers and moving towards a genuinely shared, cohesive and integrated society.
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)
I, too, express solidarity with the hon. Member for Belfast East (Naomi Long) on the difficult issues that she is facing.
The Secretary of State said that the Chief Constable had not asked for additional resources, but I understand that Terry Spence, the chair of the Police Federation for Northern Ireland, has called for 1,000 extra officers in the PSNI to help deal with the possibility of further terrorist threats. Given the recent events, does the Secretary of State intend to pursue that, particularly with the Treasury in light of the additional resources that have been supplied previously?
Mrs Villiers
As I said, I am working directly with the Chief Constable on what will happen in the period after the current additional four-year spending uplift of £200 million comes to an end. I am also working with him and others on the preparations for the G8 summit to ensure that the PSNI have all the appropriate resources. So yes, this is something that I keep a very close eye on. It is always difficult in these times when we need to deal with the deficit, but we are determined to ensure that the PSNI have all the support they need to keep Northern Ireland safe and secure.
Jim Shannon (Strangford) (DUP)
I thank the Secretary of State for her statement. In the early hours of Saturday morning, the Alliance councillor in my constituency had her home attacked. I visited her, first, to give her support, but also because she is a personal friend. I have worked with her on many constituency issues for the betterment of the whole community. She had the living room windows, porch windows and bedroom windows smashed in her home, which she has lived in for 24 years, and her car windows broken as well, in what can be described as a cowardly and shameful attack. This single lady, who lives on her own, said to me that it will cost some £5,000 for her windows to be fixed and had some concern about how that was going to happen as Christmas approaches. What steps can the Secretary of State take to ensure that the £5,000 is made available for the replacement of her windows and, indeed, that there is help for everyone else who has had cars burned, windows smashed and houses damaged?
Mrs Villiers
I thank the hon. Gentleman for drawing the House’s attention to yet another very sad case. I am particularly concerned about the number of women who have been targeted as a result of these threats—not only the hon. Member for Belfast East (Naomi Long) but a number of her Alliance local councillor colleagues. That is of course a matter of very grave concern, particularly at a time when everyone says that we need to attract more women into politics. Few things would provide more of a deterrent to entering politics than the idea that one’s front windows are going to be smashed and one is going to be intimidated. As I said, the PSNI are very focused on protecting those who are subject to these threats. It is difficult for me to comment on individual cases, but I am happy to discuss this one on a bilateral basis with the hon. Gentleman.
Bill Presented
Energy Efficiency and Reduction in Energy Costs Bill
Presentation and First Reading (Standing Order No. 57)
Dr Alan Whitehead, supported by Mr Tim Yeo, John Hemming, Caroline Lucas, Martin Horwood, Sir Peter Bottomley, Martin Caton and Joan Walley, presented a Bill to promote energy efficiency and a reduction in energy costs; and for connected purposes.
Bill read the First time; to be read a Second time on Friday 18 January 2013, and to be printed (Bill 105).
Planning Applications (Community Right of Appeal)
Chris Skidmore (Kingswood) (Con)
I beg to move,
That leave be given to bring in a Bill to provide that communities may appeal against planning decisions on collection of the signatures of a required percentage of the electorate in the relevant ward within a designated time period; and for connected purposes.
I should inform the House of my own personal interests with regard to this Bill. Ever since I became the Conservative candidate for Kingswood, which lies principally on green-belt land between Bristol and Bath, I have campaigned with local community groups to protect green-belt land from the threat of over-development. The previous Government had the top-down regional spatial strategy under which over 10,000 houses were planned in that area. Local community organisations such as the fantastic Save Our Green Spaces group, which represents Oldland Common, Warmley and Siston, and Hanham District Greenbelt Conservation Society, worked tremendously hard on collecting signatures for petitions and letters opposing the regional spatial strategy, which thankfully this Government have removed. They have introduced the national planning policy framework, which has provided specific protection for green-belt land, and that is incredibly welcome.
We were able to defeat planning applications from developers to build on green-belt land because South Gloucestershire council was on our side—it has now introduced its core strategy to protect green-belt land in Kingswood—but under the previous Government, each time the applications were defeated, the developer was allowed to appeal, and appeal again, gradually eroding local people’s faith in the whole planning process.
Other applications have been made on non-green-belt land since 2010. Local residents have fought such applications for nearly a decade, particularly one by Tesco to build a large supermarket in Hanham. Local residents opposed the application for 10 years and every time they managed to defeat it, with the council’s support, Tesco would simply come back, appeal the decision and put in another application.
This seems to be a David and Goliath-type situation in which the developers are Goliath and the residents are David. When the residents lose an application, as they did a couple of months ago when Tesco won over the council, which was afraid of the legal costs—I think that played a big part in its decision to allow the application to go through—do they have a right of appeal? No, they do not. The planning process remains dangerously unequal. We have taken away David’s sling, so he cannot even try to bring down the monster.
This Bill would address that problem. To restore confidence in the planning system, we need to have in place a right of appeal for residents when an application goes through and the developer wins. I do not intend this proposal to be another piece of red tape, which is why I have suggested that it should involve certain percentages. For example, 50% of those registered on the electoral roll in the local authority ward would have to sign a petition within a designated time period of one month—two months at most—to trigger an appeal to the Planning Inspectorate or even the Secretary of State.
That would be vital. I am sure Members will recognise that every single constituency has constituents who fight planning applications based on the claim that they represent the views of the silent majority. No one likes to be called a nimby—not in my back yard—but, for want of a better word, that is what the press call them. How do we define whether someone is a genuine nimby who simply does not want a development to take place? I am pro-development and keen to have thousands of houses built in south Gloucestershire on non-green-belt land, which has been agreed in the core strategy, but a persistent minority will claim that they have majority support and will continue to do so even once an application has gone through. If we introduce the appeal mechanism, it would ensure not only democratic accountability, but shut up those people who claim that they have support. If they cannot get 50% of the electorate to subscribe to a petition within a month, they will lose their case to claim that they represent the majority.
This Bill would help to restore confidence in the planning system and to create a symmetric planning system. The Conservative party’s “Open Source Planning” Green Paper discussed introducing something similar in February 2010. The Government have yet to do so, but I hope that the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Grantham and Stamford (Nick Boles), who is listening and who kindly came to Kingswood to meet community groups—their members spoke of their frustration at the lack of accountability and lack of the right of appeal for local residents—will take this on board and that it will end up as a future programme.
This is ultimately a question of fairness. The fact is that we allow developers to appeal planning decisions and they often have big pockets and barristers on their side, but where are we for the little man? We need to stand up for residents who are genuinely concerned about planning applications that will blight their local areas for generations. It is not good enough to say, “The council passed it and it is democratically elected, so you can vote them out in five years’ time.” The councillors may well be voted out, but the community as a whole will have to live with their decisions for generations to come. A community right of appeal would restore the local population’s confidence in a planning system that will allow them to become democratically engaged, so I recommend this Bill to the House.
Question put and agreed to.
Ordered,
That Chris Skidmore present the Bill.
Chris Skidmore accordingly presented the Bill.
Bill read the First time; to be read the Second time on Friday 1 March, and to be printed (Bill 106).
The Economy
(12 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chief Secretary to the Treasury (Danny Alexander)
I beg to move,
That this House has considered the matter of the economy.
I am pleased that this House has the opportunity to discuss the economic challenges that our country faces. The statement delivered by the Chancellor last week was a statement for the world as it is, not a statement about the world as we had hoped it would be, but in it we took the tough but fair decisions needed to fix the mess that we inherited, by bringing the deficit down, maintaining our international credibility and creating a platform for jobs and growth.
We ensured that the burden was fairly shared, asking those who have the most to contribute the most, bringing the cost of our welfare system under control and further squeezing Whitehall bureaucracy. We also addressed issues to make life easier through these tough times by cutting income tax and fuel duty and putting more money back into the pockets of working families.
That is why the autumn statement has been welcomed widely by the CBI, the British Retail Consortium, the Institute of Directors, the British Chambers of Commerce, the Federation of Small Businesses, the Engineering Employers Federation and many others that have the best interests of the British economy at heart. We inherited a mess, but we are clearing it up and building a stronger economy and a fairer society so that every person in Britain is able to get on in life.
As the Chancellor made clear last week, the road to recovery is longer than we had hoped, but this Government are committed to finishing the job and strengthening the British economy. Despite the mess we inherited and despite the headwinds from the eurozone and the impact of the banking crisis, we are making progress. The deficit has been cut by a quarter and, as the shadow Chancellor himself rightly observed last week, the deficit is falling in each and every year of the forecast. More than 1 million private sector jobs have been created and nearly 1 million young people have started apprenticeships, and exports of goods to major emerging markets have doubled since 2009.
Mr David Hanson (Delyn) (Lab)
Two years ago I sat on the National Insurance Contributions Bill Committee, which considered the national insurance contributions holiday. The Government then promised that some 400,000 employers would take up that scheme, but we were told by the Exchequer Secretary in a parliamentary answer today that only 20,000 have done so. If the Chief Secretary is not even good enough at forecasting the development of his own schemes, how can we trust his forecasts for the economy?
Danny Alexander
The right hon. Gentleman is right that take-up of that scheme has been much lower than we had expected. I think, therefore, that he would welcome the additional measures that we have taken in the autumn statement to support small businesses by, for example, continuing the small business rates relief holiday for another 12 months. The additional increases in capital allowances, which are particularly directed towards small and medium-sized enterprises, are precisely designed to encourage small businesses to invest.
Danny Alexander
I want to make some progress first. I know that many Members want to speak and there is already a time limit on speeches.
The forecasts are those of the independent Office for Budget Responsibility, and I do not think that the Labour party’s trend of attacking it is welcome.
Gavin Shuker
Will the Minister confirm that, under any measure, this Conservative-led Government will borrow more in the five years of this Parliament than Labour did in 13 years?
Danny Alexander
It is transparent from the figures presented by the Office for Budget Responsibility that borrowing is higher than it forecast in 2010. If the hon. Gentleman was being fair-minded, he would also draw the House’s attention to the analysis by the Institute for Fiscal Studies, which suggests that if we had continued with the path of spending set out by the previous Chancellor, we would be borrowing a further £200 billion —something that the country can ill afford.
Alison Seabeck (Plymouth, Moor View) (Lab)
The OBR, which is independent and gives interesting forecasts, has said that the unemployment count is likely to rise in each of the next four years. Will the right hon. Gentleman explain why that is?
Danny Alexander
The OBR has forecast that unemployment will be slightly higher next year and then fall in subsequent years. It also forecasts a rise in employment over that period. If the hon. Lady is looking for variances between reality and the OBR’s previous forecasts, it is fair to say that unemployment is now considerably lower than the OBR forecast a year ago. I hope that she welcomes that fact.
It is true that the OBR has lowered its growth forecasts and that the recovery is slower than we would have liked, but we are on the right road and the announcements that we made last week will help the country to make further progress along it. I should add that the OBR does not attribute the slower growth to the Government’s fiscal policy, but to external pressures from the eurozone and other parts of the world, and to the long-term impact of the financial crisis, especially on our banking system. If the Labour party wants to accept the OBR’s figures, it also needs to accept its analysis.
As the House knows, savings had to be found and we have decided to reduce departmental resource budgets by 1% next year and 2% the year after. We are confident that that will not impact heavily on front-line services. For example, according to the recently published “Digital Efficiency Report”, if all Departments continued to move their transactional services online and became digital by default, we could save £1.2 billion over the next two years. If all Departments moved to the property occupation benchmark of 10 square metres per person, they could save a further £300 million each year.
Emily Thornberry (Islington South and Finsbury) (Lab)
Does the right hon. Gentleman agree with the following analysis? Two and a half years ago, he asked for five years to balance the books, but without a plan for jobs and growth, he needs another five years. He still does not have a plan for jobs and growth, so it will always be five years.
Danny Alexander
No, I do not agree with the hon. Lady’s analysis.
There are still savings to be made in day-to-day administration costs. I am confident that the civil service can continue to produce more for less and provide excellent value for money to the public.
The welfare system makes up more than £200 billion of public spending and cannot be immune from the effort to deal with the deficit. As a result of the financial pressures that we are facing, we have had to take the difficult decision that we can uprate working-age benefits by only 1% in the coming three years. That figure represents a rise each year, but it will be below the rate of inflation. It is not as high as some may have expected, but it is what the country can afford. That is a tough choice, but an even-handed one, and it avoids some of the more punitive proposals that have been floated in recent months.
Most benefit claimants would love to work and are trying their best to find a job. However, we need to recognise that in-work incomes have risen at half the rate of benefits since the financial crisis. Those who are in work will be better off thanks to our income tax cuts. When we are increasing public sector pay by only 1%, it would simply not be fair to increase the benefits of those who are out of work at a higher rate than those we employ to work for us.
Even while making those cuts, we have taken steps to protect those who are most in need. That is why disability living allowance and other benefits specifically for the most disabled and their carers will continue to increase in line with inflation. It is also why the basic state pension will increase by 2.5% next April, which is higher than either earnings or prices, honouring our commitment to the triple lock. The application of the triple lock means that there will be a better rise in the basic state pension than pensioners have seen before. Pensioners will see a cash increase of £2.70 a week in the basic state pension in 2013-14.
While we are protecting those in need, it is only right that we ask the most from those who earn the most. That is why the higher rate threshold for personal income tax will also be uprated by only 1% in 2014-15 and 2015-16. It is also why the annual allowance for pensions tax relief will be reduced from £50,000 to £40,000, and the lifetime allowance from £1.5 million to £1.25 million. That will raise more than £1 billion a year by the end of the period and is something for which I, for one, have argued for quite some time. The savings from Whitehall, welfare and the wealthy, and the targeted tax rises, are helping to cut the deficit in the medium term and to boost growth now.
Our capital spending plan will see £5 billion switched from current spending to investment in infrastructure, providing a better connected UK on roads, on rails and online. We will provide £350 million for the regional growth fund, enabling it to continue its success in creating jobs throughout the country. We are rolling out rural broadband across the country and have announced £50 million for the second wave of super-connected cities across the UK from Portsmouth to Perth, via Newport and Northern Ireland.
We have announced funding for a number of road building and maintenance projects. We will be dualling the A30 in Cornwall—an improvement that has long been campaigned for, not least by my hon. Friend the Member for North Cornwall (Dan Rogerson), who is in his place. I congratulate him on his efforts. We will also bring the A1 up to motorway standard all the way to Newcastle. I have been made aware of the need to improve that road north of Newcastle, not least by my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith), and have asked my right hon. Friend the Secretary of State for Transport to work up plans for potential improvements north of Newcastle.
The capital projects will not only create jobs in the short term, but crucially will raise the quality of the country’s infrastructure and our growth potential in the medium term. Labour Members may be interested to know that during the previous Government’s time in office, we fell from eighth to 33rd in the global league table for the quality of infrastructure. That is not good enough and is why John Cridland of the CBI said last week that it is
“absolutely right to shift the focus from current to capital spending to boost jobs today and the UK’s competitiveness tomorrow.”
As colleagues will know, our plans will mean that as a share of the economy, the investment that the Government are putting forward in this Parliament is greater than the average over Labour’s period in office. These investments, not just in roads, but in schools, colleges and flood defences, can only serve to help our businesses in the future.
Andrew Gwynne (Denton and Reddish) (Lab)
I am pleased by the Chief Secretary’s recent conversion to investing in capital projects, such as building new schools. Now is perhaps an opportune time for him to apologise to the schools in my constituency that had their Building Schools for the Future funding taken away. Can they expect it back?
Danny Alexander
I have not had a recent conversion to capital expenditure. The hon. Gentleman will remember that in the spending review in 2010, we committed over £2 billion a year more to capital expenditure than had been set out in the previous Government’s plans. In the autumn statement last year we added £5 billion and in this year’s autumn statement we added another £5 billion for a range of projects. I hope that he will recognise that the Building Schools for the Future programme was expensive and bureaucratic. The proposals that have been brought forward by the Department for Education are a better and more cost-effective way to meet at least some of the needs in the school system in this country.
Mr Stewart Jackson (Peterborough) (Con)
On the subject of apologies, will my right hon. Friend invite Her Majesty’s loyal Opposition to apologise for the debt millstone of the private finance initiative in the national health service, which amounts to more than £63 billion? The right hon. Member for Morley and Outwood (Ed Balls) is aware of that, because it was all about hiding the debt off balance sheet and ensuring that our children struggle with it. [Interruption.]
Madam Deputy Speaker (Dawn Primarolo)
Order. I am sorry to interrupt the hon. Gentleman. We will not have shouting across the Chamber and we will not have wagging of fingers, even from a Whip. Have you finished, Mr Jackson?
Mr Jackson
I am sure that my right hon. Friend will agree with my analysis of PFI.
Danny Alexander
My hon. Friend adds another item to the long list of items for which the people of this country deserve an apology from the Labour party. We have had no such apology yet, but we live in hope. Perhaps the shadow Chief Secretary will begin her speech with an apology for the many and various mistakes. [Interruption.]
Madam Deputy Speaker
Order. Let us try just once more. By Whips, I mean Government Whips as well as Opposition Whips. Government Whips are not to shout across the Chamber. Is that clear?
Danny Alexander
Thank you, Madam Deputy Speaker. I hope this debate will be conducted in a calm manner as befits the seriousness of the issues we are discussing.
Frank Dobson (Holborn and St Pancras) (Lab)
Can the Chief Secretary to the Treasury tell the House of a single Tory or Liberal Democrat MP who objected to a PFI hospital or school being built in their constituency under the Labour Government?
Danny Alexander
Not off the top of my head, but I dare say that hon. Members on the Government Benches can speak for themselves. I have, however, heard a number of objections to the structure of PFI contracts. In fairness to the right hon. Gentleman, the PF2 model is not designed to abolish PFI and can play an important role in developing new projects. We want to strip away some of the most egregious features such as facilities management costs—a couple of years ago the Treasury was going to be charged several thousand pounds by the PFI holder for putting up a Christmas tree. That issue was resolved but it is a small example of the excessive costs involved. In Treasury questions earlier today the Chancellor gave an example concerning the cost of changing a light bulb in a hospital in Cumbria.
I am sure that on reflection the right hon. Member for Holborn and St Pancras (Frank Dobson) would agree that reforming PFI to strip out some unnecessary features such as facilities management costs and so on, and having a simpler, clearer model in which the taxpayer can share in any gains, is a big improvement. I hope that when he has looked at what is being proposed, he will welcome it.
Mr Stewart Jackson
My right hon. Friend may wish to comment on the fact that another example of Labour prudence was spending £250 million on private contractors in the NHS for operations that were never carried out.
Danny Alexander
The Government are trying to move to a system of payment by results. Too often the model of spending under the previous Government was payment for absolutely no results—[Interruption.] I will make some progress, despite the shouting from the second row of the Opposition Benches.
The Government know how important businesses are to growth, and we are taking the necessary steps so that businesses can increase employment and exports and lead the country back to prosperity. That is why we have announced, among other things, an extension of the small business rate relief scheme that will benefit over 500,000 small businesses. The extension of empty property rate relief to newly built commercial property has been called for by Members across the House, and I hope it will enable commercial property development to move forward in many parts of the country that have recently been blighted.
We have announced increased funding for UK Trade and Investment to support the growth in exports, particularly in emerging markets, alongside a substantial new trade finance scheme that will significantly help medium-sized exporters looking to win new markets across the world. Most importantly, we have announced an increase in the annual investment allowance limit from £25,000 to £250,000 for a time-limited period of two years—a capital allowance relief that I hope will send a signal to medium-sized manufacturers that now is the best time to invest in new plant and machinery. I pay particular tribute to my hon. Friend the Member for Burnley (Gordon Birtwistle) and the Liberal Democrat campaign for manufacturing that he has set up for arguing so cogently and strongly for that measure.
The Government have also announced a further drop in corporation tax to encourage investment in the United Kingdom. From April 2014 the rate in Britain will stand at just 21%—significantly lower than current levels in France, Germany or the USA. We want the world to know that the United Kingdom is open for business and that companies that invest and employ people in this country are very welcome. At the same time, however, Her Majesty’s Revenue and Customs is also receiving a further £77 million in this spending review period to ensure that where taxes should be paid, they are paid—I am sure that even the shadow Chancellor welcomes that. That increase, on top of the £900 million I announced at the spending review, will mean that HMRC will bring in total additional revenues of £9 billion each year by the end of 2014-15.
Our agreement with Switzerland to recover previously unpaid UK tax is expected to bring in a further £5 billion over the next six years. We have signed a ground-breaking agreement with the United States on automatic exchange of information, setting a new standard in tax transparency. Today we are publishing the draft Finance Bill for 2013, which confirms the introduction of the UK’s first ever general anti-abuse rule in the tax system. That measure will act as a significant deterrent to all those engaged in abusive tax avoidance. It could have been introduced at any point in Labour’s 13 years in office, but it was not. That is an example of the failure to act on tax avoidance and evasion that we saw during that time. This is not just a matter of finance; it is a matter of principle. Millions of small businesses and tens of millions of people across the UK pay the proper amount of tax, day in, day out. Ensuring that people cannot avoid our tax system is a priority for the Government so that the burden can be spread fairly.
There has been a lot of recent interest in this area, particularly with regard to the tax payments of specific multinational companies. I will not comment on individual cases but I am sure that all businesses, large or small, will take note of the reaction of the British people to recent events. Everyone understands that we must all work hard to get the economy going again and that businesses will play a key role in ensuring that growth. The reaction also shows that people believe that those at the top who earn or profit the most should also contribute the most. I agree with that—yes, we want a stronger economy, but we also want a fairer society.
Measures announced by the coalition last week will help millions of people across the country who are working hard. I am proud that we will be increasing the income tax personal allowance by a further £235 next April. That will mean that 2.2 million people have been taken out of tax by this Government, leading to around 20 million people being nearly £600 a year better off from next April. That is £50 a month extra in people’s pockets as a result of the Government’s measures on income tax and is, quite simply, the biggest income tax cut for working people in a generation—from the front page of the Liberal Democrat manifesto to the pockets of 24 million working people.
I am also proud that the coalition Government are cancelling the fuel duty increase that was planned for next month.
Nic Dakin (Scunthorpe) (Lab)
Will the Chief Secretary to the Treasury remind the House which page of the Liberal Democrat manifesto the increase in VAT was on?
Danny Alexander
No, because it was not there. That was one of a number of difficult choices that we as a Government have had to make to clean up the mess in the British economy that was left by the hon. Gentleman and his colleagues.
Danny Alexander
I will give way once more to the hon. Lady and then I will make some progress
Emily Thornberry
Am I right in remembering—I think it was on page 14 of the Liberal Democrat manifesto—a pledge to cut 7,000 tax inspectors?
Danny Alexander
The hon. Lady will know that HMRC has had to make efficiency savings along with the rest of the Government. It had to make savings when the Labour party was in office and it continues to have to do that. We have increased investment specifically in the part of HMRC focused on tackling tax avoidance and evasion—an area that saw underinvestment during Labour’s time in office. As a result, 2,000 extra specialist tax inspectors—[Interruption.] My hon. Friend the Exchequer Secretary to the Treasury brings me up to date and tells me that the figure is 2,500. Those inspectors are specifically focused on tackling tax avoidance in the affluence unit and those units that focus on offshore companies and all other tax avoidance schemes, and on implementing the anti-avoidance rule.
Dan Rogerson
I am grateful to my right hon. Friend, not least for his response to Cornwall’s call for investment in the A30 infrastructure project and his earlier kind words. Does he recall that when in opposition we had to watch the then Labour Government cutting and closing HMRC offices in a lot of regions around the country, and putting on the scrap heap a lot of skilled tax inspectors, the benefit of whose experience we sadly no longer have?
Danny Alexander
As always, my hon. Friend makes a good point. We need people with experience in compliance and enforcement, and we are expanding employment in those areas. That is the right thing to do and it should have been done a long time ago.
The previous Government set out plans to increase fuel duty above inflation last year, this year and again in 2013 and 2014. However, as a result of repeated action by this Government, pump prices will remain at least 10p per litre lower for the remainder of this Parliament than they would have been had the Labour party remained in government.
Rachel Reeves (Leeds West) (Lab)
Slide 24 of the report by the Institute for Fiscal Studies shows that, including fuel duty changes and the changes to the personal allowance and tax credits, a one-earner couple with two children will be £534 worse off on average as a result of the changes in the autumn statement. Will the right hon. Gentleman confirm that?
Danny Alexander
No, I cannot confirm that. I do not recognise those figures—[Interruption.] Labour Members are waving bits of paper—
Madam Deputy Speaker (Dawn Primarolo)
Order. The shadow Chancellor absolutely knows that he is not to throw papers across the Dispatch Box. It is no good him blaming his hon. Friend the Member for Leeds West (Rachel Reeves) for following his example. That will not happen again.
Danny Alexander
That is another way in which the shadow Chancellor is setting a bad example. Littering in the Chamber is not to be encouraged, and I am glad you, Madam Deputy Speaker, took a tough line on it.
The Government’s fuel duty measures will keep money in the pockets of millions of fathers on the school run or mothers driving to the office. As a highland MP, I know the burden that fuel costs can place on people in remote areas. That is why we are piloting the fuel rebate scheme for motorists on the Scottish islands and the Isles of Scilly. I am keen to push for EU approval for an extension of the scheme to other remote parts of the country that display similar characteristics. Of course, that will be a long and difficult job, but I am determined to gather evidence to support the case.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
The right hon. Gentleman will know that the rebate scheme has been a success. When will mainland areas of Scotland be included? There are already such schemes in continental mainland areas, so why is there a delay in its introduction in mainland Scotland? Areas such as Caithness, Sutherland and Argyll need it—and need it quick.
Danny Alexander
I am grateful for the hon. Gentleman’s endorsement of the current scheme as a success. I hope he will spread the word to his constituents and ensure that the credit goes to the appropriate place.
To win the argument at European level for an extension of the scheme, we must pass the same test and provide the same evidence to justify including such remote areas. We are working with local authorities in various parts of the country to gather evidence to support our case. As the hon. Gentleman will recall, we must take that evidence to the European Commission. If it approves our proposal, it must in turn be approved by all 27 EU member states. There are a number of hurdles and a significant process to engage in to gather evidence.
Danny Alexander
If the hon. Gentleman will forgive me, I will make progress. Many hon. Members wish to speak in the debate.
There has been good engagement between the Treasury and the FairFuelUK campaign, which has pressed its case very strongly. I welcome its engagement.
The Government are on the road to cutting the deficit we inherited, but we are also building a fairer society. The distributional analysis that we publish shows that that continues to be the case, despite the tough choices we have made. It is worth pointing out that, under the previous Government, the Treasury never published detailed distributional analyses of its decisions, but under this Government the Treasury publishes them at every fiscal event. The analyses show that the top 20% of households continue to make the greatest contribution. In fact, the cumulative impact since the June 2010 Budget of tax, tax credit and benefit reforms shows that households in the top 10% see the greatest reduction in their income, both in cash terms and as a percentage of net income or expenditure.
Alex Cunningham (Stockton North) (Lab)
People in my constituency who cannot afford a car and who earn much less than most others tell me that the inflation rate on the things they have to buy is several times greater than the headline figure, which includes goods that they would just love to be able to buy. When will the Government recognise that inflation for the poorest people in our society is much higher than it is for the rest of us, and do something real? The Government have done some things, but when will they do something that makes a difference to those people instead of cutting their food intake, which is exactly what is happening?
Danny Alexander
A range of goods is included in the consumer prices index of inflation, which the Office for National Statistics constructs—it is an independent body and is responsible for constructing those baskets of goods. Some items go up in price faster than others. We are doing what we can and what the country can afford, but our priority must be to get this country back to a position in which we can pay our way in the world. Nothing would hurt the poorest in society more than losing control of our public finances, which I suspect would happen if the Labour party ever again gained the reins of power.
The quad discussed introducing a mansion tax, but a fair tax on homes worth more than £2 million was not agreed. However, the good news is that we have established a sensible, workable plan for raising additional revenues from the highest-value properties. If that does not happen in this Government’s term of office, it will be in the Liberal Democrat manifesto for the next election.
Danny Alexander
I am grateful for the hon. Lady’s support—I take support from wherever it comes these days.
The Government have taken sensible further steps to restrict pensions tax relief. The decisions the Government are taking are not easy, but as a country we must live within our means. The scale of the problems this country faces means that the period of fiscal restraint must continue for longer. That is why the Government will shortly set out spending plans for the financial year 2015-16. I will carry out a spending round in the first six months of next year to set those budgets and ensure that we continue to build a sensible long-term plan for the country’s finances. We will need to find an extra £10 billion of savings from Departments in the spending round. That will mean more difficult choices, but they are also responsible choices as the coalition continues to work to restore stability to the UK economy.
We have heard this afternoon and in Question Time that some criticise the autumn statement. The division in British politics is very clear. Government Members live in the real world. We understand that times are tough and that there is no endless supply of money, and recognise that the right and responsible action is to take the difficult decisions to ensure we can live within our means. Labour Members appear to live in a fantasy world. They still believe that they ended boom and bust, despite the events of the past five years. They still refuse to apologise for the mess they created and fail to be honest with the British people about the tough decisions that any party in government would have to take.
It will come as no surprise to hon. Members that I will not take advice from the Labour party, which wrecked our economy because it allowed the country to become too dependent on revenues from the City of London and paid too little attention to the rest of the country. Labour insulted pensioners up and down the country by increasing the basic state pension by 75p, and insulted 5 million of the lowest-paid workers by increasing their income tax bill with the abolition of the 10p rate.
Danny Alexander
I will not give way—I will finish my speech shortly.
The Labour party thought it was right that private equity managers should pay a lower rate of tax on their earnings than the person who cleaned their office, and insulted hard-working people and businesses up and down the country by failing to crack down on tax avoidance and evasion in 13 years in office.
This Government face some of the most serious decisions we have had to make in our recent history. We are recovering from a decade of debt, we inherited the largest deficit since the second world war, and we have had to face a multitude of problems abroad. However, we continue to take simple, sensible steps towards recovery. We continue to build a strong, sustainable economy and to build a fair society. I commend the autumn statement to the House.
Rachel Reeves (Leeds West) (Lab)
The Opposition welcome this opportunity to debate the state of the economy, the Chancellor’s record over the past two and a half years and the measures he has introduced in the autumn statement. Last Wednesday he came to the House and admitted that he had failed—failed to get the economy moving, failed to meet his borrowing targets and failed to listen to our advice and change course.
First, though, let us go back to the heady first months of this coalition Government—when they were still getting on, when they were fraternising in the rose garden. In the 2010 spending review, the Chancellor decided to implement a programme of unprecedented fiscal contraction. We said it was not the right time to cut demand, given that the economy was only just recovering from the global financial crisis, and that the cuts went too far and were being implemented too fast.
Kwasi Kwarteng (Spelthorne) (Con)
Is it not true that we are actually spending more than we were two years ago and that no real cuts have been made? What would the hon. Lady like to say about that?
Rachel Reeves
There is one particular area where the Government are spending more money, and that is welfare, on which they are spending £13.6 billion more during this Parliament, because more people are out of work or in part-time work and so receiving more tax credits. That is a sign of the Government’s failure, not of their success.
In the 24 months since the spending review, where have we got to? How much progress has been made? Is the Chancellor’s plan working? The verdict is in. We now know that borrowing and debt figures have been revised up for this year, for next year and for every year of this Parliament. The Government are borrowing £212 billion more than they planned. They said that five years of austerity would be difficult, but that it was necessary to support our economy, and they said that it might hurt, but that it would work. Well, it has not worked, but it has hurt, and we are no closer to clearing our deficit than we were two years ago. [Interruption.]
Madam Deputy Speaker (Dawn Primarolo)
Order. Where is the hon. Member for Spelthorne (Kwasi Kwarteng) going? Excuse me. He has just intervened on a debate. Normally, one stays for a debate that one intervenes in.
Rachel Reeves
Thank you, Madam Deputy Speaker. Perhaps the hon. Gentleman did not like the answer to his intervention. Fair enough—I would not be pleased to hear that my Government were spending an extra £14 billion on welfare because of their failure.
This year the economy will shrink by 0.1%. The Chancellor’s two gap years—two years of painful cuts, more borrowing and no growth—are a shocking indictment of a failed plan. He stands up and tells the nation that the British economy is healing and that he is equipping Britain to win in the global race, yet over the 24 months since the spending review the UK economy has grown by just 0.6%. In the same period, the US economy grew by 4.1% and the German economy by 3.6%. Helpfully, the International Monetary Fund’s world economic outlook data allow us to put together a league table of 184 countries based on total growth between 2010 and 2012, so we can now analyse our performance in the global race that he describes with this Government at the helm. Of those 184 countries, where do Members think Britain comes? We are 158th. It is a relegation battle. We are behind Togo and Namibia, Albania and Macedonia, but there is no need to worry—apparently we are hot on the heels of Mali, Samoa and Fiji! We are the worst performing G7 country, apart from Italy. In the global race, Britain is well and truly in the slow lane with this Chancellor at the helm.
Mr MacNeil
Does the hon. Lady agree that the context she has rightly given the House is the reason the Scottish referendum on independence will be won in 2014?
Rachel Reeves
I will let the good people of Scotland make their decision when the time comes, but I believe that we are stronger together—stronger united than divided.
The worst aspect of the Chancellor’s two wasted years is the long-term damage being done to our economy. Every month of inaction, every failed initiative and every growth forecast downgraded is another hammer blow to the work force, our businesses and our national infrastructure. The skills and motivation of British workers are going to waste, with one in three of our 2.5 million unemployed out of work for more than a year and 3 million of those with jobs wanting to work more hours, but unable to find the work. In reality, we are falling behind, and the Chancellor has nobody to blame—not the snow, not the royal wedding, not the eurozone.
I agree with the chief economist of UBS, George Magnus—[Interruption.] [Hon. Members: “He’s gone!”] Obviously the hon. Member for Spelthorne (Kwasi Kwarteng) does not want to hear what the chief economist of UBS has to say. I will send him a copy of Hansard. George Magnus said that the Chancellor’s excuse
“falls under the category of ‘Sorry Miss, the dog ate my homework’”.
He also said that
“the problem I think that the Chancellor has with the eurozone is that we are just like them. We have this single-minded focus on austerity and the lack of growth is basically crippling our ability to meet our fiscal targets.”
I agree that the Chancellor and his economic plan are to blame. Two and a half years of austerity, two and a half years of this Chancellor, and what do we have to show for it? We have no growth, more borrowing and a tragic waste of time. [Interruption.] It is good to see the hon. Member for Spelthorne in his place again.
A year ago the IMF warned:
“If activity were to undershoot current expectations and risk a period of stagnation or contraction, countries that face historically low yields (for example…the United Kingdom) should also consider delaying some of their planned consolidation.”
At that time the IMF was predicting 1.6% growth this year; now the OBR tells us that the economy is more likely to shrink by 1.6% this year.
Gordon Birtwistle (Burnley) (LD)
Would the hon. Lady like to comment on the 6.4% collapse in GDP in 2008, and at the end of her speech will she enlighten us all on what her economic policy will be?
Rachel Reeves
Like other countries around the world, our GDP contracted during the global financial crisis. Germany and the United States have managed to recover that growth; we have not, because our Chancellor chose a different course—austerity—when jobs and growth are needed to get the economy moving and the deficit down. Unlike this Government, we recognise that we need to take action to stimulate jobs and growth. That is why we have said there should be a national insurance holiday for small businesses taking on new workers and a bank bonus tax to fund a programme of youth jobs, and that we should genuinely bring forward infrastructure investment and temporarily cut VAT to 17.5%. Those are the policies that would get the economy moving, get jobs back in our economy and help to bring the deficit down in a sustainable way.
Andrew Gwynne
The Government have placed great emphasis on the views of the Office for Budget Responsibility. My hon. Friend will be aware from reports in today’s media that Robert Chote of the OBR has suggested that the UK need not fear losing its triple A rating. Does she see us losing our triple A rating as a ringing endorsement of this Government’s economic policies?
Rachel Reeves
Let us see what the rating agencies have to say in the new year. Of course we are on negative watch, but it was not we who said the rating agencies should be the be-all and end-all. Indeed, they were giving Lehman Brothers a triple A rating until that company crashed and almost took the global economy with it. It was the Chancellor who said that a triple A rating would be the watchword of his chancellorship, so if it were to go, it would be a damning indictment of what this Government have presided over.
What was the Government’s response to all the bad economic news last Wednesday? Let us give credit where it is due. The Chancellor now agrees with us that we should not go ahead with the fuel duty increase in January; he agrees with us that introducing regional pay in our public services would be costly and impractical; he agreed with us that we should reverse the relaxation of restrictions on pension tax relief for the very rich; he agreed with us that it was a mistake to implement deep cuts to capital programmes such as Building Schools for the Future; and he agreed with us that cutting investment allowances risked damaging incentives for long-term wealth creation. We propose the creation of a British investment bank to support small businesses, and the Chancellor has produced a pale imitation of that, but I am afraid that all these measures are too little, too late—robbing Peter to pay Paul. Smoke and mirrors will not hide the lack of a real, purposeful growth strategy.
The chief executive of British Airways summed it up yesterday when he said:
“I don’t see an agenda for growth.”
I agree, and so does the Office for Budget Responsibility. Taking into account all the Government’s measures from the autumn statement, the OBR has concluded that they will add just 0.1% to UK GDP over the next five years. The economy is shrinking this year. Growth next year—forecast at 2.9% just two years ago—is now forecast at just 1.2%. Indeed, we have seen downgrades not just this year and next, but the year after.
Charlie Elphicke (Dover) (Con)
Why does the Institute for Fiscal Studies say that there would be £200 billion more borrowing under Labour’s plans?
Rachel Reeves
There is £212 billion more borrowing under this Government’s plans.
Families will continue to feel the Chancellor’s failure in their wallets and their homes. Average earnings will not outpace inflation until the second quarter of 2014. It will take even longer for families to recover the loss to their living standards that this Government’s economic failure has cost them.
The lack of growth and the increase in borrowing under this Chancellor have meant that he has had to come back and ask the country for more. And who are the Government asking to bear the brunt of the past two and a half years of failure? Luckily, Andrew Neil asked the Chief Secretary to the Treasury that question on BBC1 last Wednesday. He asked him whether
“those who are on ordinary incomes are suffering a lot more than most”.
The Chief Secretary to the Treasury replied: “That is absolutely right.” That was the only sense he spoke all day. It is no surprise that he is increasingly described as the Conservatives’ favourite Liberal Democrat in the Cabinet. Apparently, they regard him as easier to deal with and more persuadable. The Chancellor’s favourite Liberal Democrat has finally told the country what we have known for a long time: that this Government are asking ordinary families to foot the bill for their economic mess.
The facts speak for themselves. Analysis by the House of Commons Library shows that a one-earner family on £20,000 with two children will lose £279 a year from next April. Slide 24 of the Institute for Fiscal Studies report shows that a two-income family with children will lose £534 as a result of the changes, including all the measures in the autumn statement. Slide 17 of the IFS assessment shows that middle and lower earners will lose most as a result of the autumn statement, with the poorest 40% losing more than the richest 10%. How can that be fair? And this is all to pay for the Government’s £212 billion of extra borrowing. They are hurting those who are trying to get on and do the best for themselves and their families. That cannot be fair.
Mothers across the country will be worried about the real-terms cut in maternity pay, worth £180, that the Chancellor announced last Wednesday. That comes on top of other deep cuts that will hit pregnant women on low incomes, such as the abolished Sure Start maternity allowance and the health in pregnancy grant. This is further proof that the Government are out of touch and simply do not understand the pressures families are facing, day in, day out.
Gavin Shuker
What assessment has my hon. Friend made of the impact of the changes, particularly those relating to people on low incomes, on the overall growth of the economy? It strikes me that they are exactly the people we ought to be encouraging to spend right now.
Rachel Reeves
My hon. Friend is right. It is a false economy to cut the incomes of the lowest paid, because they will have less money to spend in their communities. What really matters, however, is the real impact that the changes will have on their living standards and those of their children.
The Resolution Foundation has said that 60% of the cuts to benefits and tax credits will hit working households—that is, those who are trying to get on in life. Given that the welfare bill is forecast to be £13.6 billion higher in this Parliament than the Chancellor thought it would be—another target tossed aside—perhaps it is time for the Government to concentrate on getting people back to work in order to reduce the welfare bill. In February this year, the former employment Minister, now the Secretary of State for Justice, said:
“The Work Programme is doing a good job and is on track. It is helping long-term unemployed people into work.”
And only today the Chief Secretary to the Treasury said that the scheme was going well, but we now know that for every 100 people who are unemployed, the programme has seen only two people back into work. If that is the Government’s idea of a programme that is on track, I would hate to see one that is not.
It is not surprising that OBR documents released last week showed that the number of people claiming jobseeker’s allowance was set to rise from 1.58 million this year to 1.69 million in 2014, and that the number forecast for 2016 had been revised up by 340,000. That will be a third of a million more people receiving JSA compared with the number forecast in March this year.
Let us not forget that the Prime Minister dismissed the last Labour Government’s future jobs fund, which helped 120,000 young people back into work, yet an impact analysis for the Department for Work and Pensions found that we all gained £7,750 per participant through wages, increased tax receipts and reduced benefit payments. This Government ditched a plan that worked for one that has failed, so we will not be lectured by them on welfare or on job creation.
At the same time, one group of people continue to gain from the Chancellor and the Chief Secretary’s policies. If someone earns more than £1 million a year, next year they will receive an average tax cut worth £107,000. It beggars belief that while taking from families on low incomes with one hand, the Chancellor gives to millionaires with the other—there is one rule for the very richest, another for everyone else.
Charlie Elphicke
The hon. Lady talks about the Government favouring the richest, but if we look at the distributional impact of tax and benefit reforms on the IFS slides to which she has referred, we can see very clearly that the richest 10% lose £260 in net income whereas everyone else is far less disadvantaged. Does she not agree that the richest are shouldering more of the burden?
Rachel Reeves
If the hon. Gentleman thinks that those on average incomes being worse off by £534 year is not very much, it is up to him to justify that to the people of Dover and Deal. Page 17 of the IFS analysis shows that the poorest 10% are 1.6% worse off, the second decile are 1.7% worse off, the third 1.3%, the fourth 0.6% and the top only 0.5%. The four lowest deciles—those on the lowest and modest incomes—are being hit hardest by the changes in the autumn statement, while those at the top get off relatively unscathed. That is the reality and if he wants to put that slide in his leaflets in Dover and explain it to his constituents, I am sure that they would appreciate it.
As I have said, it is one rule for the richest and another for everyone else. The poor are expected to work harder or else they will be made poorer, but apparently the rich will work harder only if they are made richer. It is the same old out-of-touch Tories and their Liberal Democrat accomplices.
There are some who think that the Chancellor is a master of political strategy; his autumn statement was clearly delicately put together. He said that borrowing was down this year, but that is only by using money from the sale of 4G contracts, which has yet to happen. He said that his cuts were targeting the workshy, when in reality they hit working people. He said that austerity was necessary for us to compete with our global competitors when, after two years of austerity, we have fallen further behind. He lived up to his reputation as a part-time Chancellor, because it was a statement that worried more about tomorrow’s headlines than the economic reality. For all of the Chancellor’s cynical political games and for all the smoke and mirrors, the real story is being felt across the country. Living standards are being squeezed, long-term unemployment is rising, borrowing is up, growth is flatlining: it is a story of a failed Chancellor and his Lib Dem accomplice desperately trying to find a way out of the mess their economic failure has got them into.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I remind hon. Members that we will start with an eight-minute time limit on speeches.
David Rutley (Macclesfield) (Con)
There is one form of climate change that would be welcomed on both sides of the House, and that is the creation of a climate in which enterprise can thrive and flourish. The autumn statement reconfirmed that this Government are committed to ensuring that those conditions are in place and have made positive strides in that direction.
The statement builds on the sound economic platform that has been in place for some time now. The deficit has been cut by a quarter and because of the tough action that had to be taken, the cost of borrowing is at historically low levels. What is more, 1.2 million jobs have been created in the private sector—something that was not mentioned by the hon. Member for Leeds West (Rachel Reeves)—and more jobs are being created in the private sector than are being lost in the public sector. That is true in the north-west, where I live, and across the whole country.
Last week’s policy announcements were well received by businesses and it is easy to see why. There was a further reduction in corporation tax from 28% to 21% in 2014 and a rise in the additional investment allowance from £25,000 to a whopping £255,000 for two years. That shows that, under this Government, Britain is definitely open for business.
The Government’s strategy for enterprise has strong foundations, much stronger than the so-called industrial strategies that have been debated for decades. Between the end of the second world war and the 1970s, Governments in this country and France tried to pick winners only to fail spectacularly. West Germany and the reunified Germany were much more resistant to that temptation. As Sir Geoffrey Owen of the London School of Economics recently wrote:
“The German economic miracle that began in the 1950s was not the result of industrial policy, but underpinned by a broader set of policies of which the promotion of competition and openness to foreign trade were probably the most important.”
He went on to advocate a “horizontal” approach in which competition is promoted, innovation is encouraged and industrial change is positively facilitated—as this Government are doing.
Hon. Members may have noticed how Sweden, which was so bedevilled by high taxes, high spending and massive inflation in the 1980s has coped well with the current global economic challenges. Rather than picking winners, the Swedish Government, who have driven forward a sector-by-sector approach, focused on deregulation, and that has spurred on their success. They have identified ways to deregulate banking, transport, power production, telecommunications, postal services and even food retailing.
Sweden’s Anders Borg is not the most conventional of Finance Ministers. While I would not advise the Chief Secretary to follow Mr Borg’s lead in sporting a ponytail and an earring, I think we can learn from Sweden’s approach. In a recent speech, Mr Borg explained:
“There was a very, very broad-based deregulation. Today, if you go to the OECD, going for growth report, they are looking at 8 different sectors, 6 out of those…have less regulatory burden than the US. So we have gone from being one of the heaviest regulated economies of Europe to one of the least regulated when it comes to product markets.”
As a result, Sweden’s economy is going from strength to strength.
In the UK, in “The Plan for Growth” published in March 2011, the Government set out actions to clear pathways in a number of important key sectors, including advanced manufacturing, digital and creative sectors and, importantly for Macclesfield and north-east Cheshire, life sciences. Both the Macclesfield and Tatton constituencies are home to AstraZeneca’s largest operations in the UK, which account for an amazing 2% of UK exports. I am delighted that, working together with my constituency neighbour the Chancellor, Cheshire East council and AstraZeneca, we were able to secure funding from the regional growth fund to create a bioscience park at the Alderley Park site, which is a positive step for the highly skilled work force in the area and a huge priority for the local economy.
As with Sweden, deregulation is a critical step for our enterprise agenda. Sadly, under the last Government, Britain fell from fourth to 89th in the World Economic Forum’s league table for countries with the lowest burden of regulation. Their lasting legacy was not just the deficit, as it was also the burden of regulation. I am proud that, under this Government, we have been able to claw back 17 places in those rankings—but we are not complacent. The Minister of State, Department for Business, Innovation and Skills, my right hon. Friend the Member for Sevenoaks (Michael Fallon) is leading the deregulatory charge. The autumn statement has built on that momentum and taken the deregulatory agenda to a much higher level. The innovative one-in, one-out strategy is being replaced with a one-in, two-out approach from January. In the spring, the second phase of the red tape challenge will be launched. This will give businesses another chance to highlight those regulations that are holding them back from delivering more for the economy.
The Government’s continuing commitment, refreshed with the energy of a new ministerial team, will be vital in making progress in engaging Whitehall Departments in this critical task. Again, there are lessons to be learned from overseas—whether it be from New Zealand, the Netherlands or even from Bosnia. My favourite example is looking at what has been happening with the “Bulldozer” deregulation initiative in Bosnia, which was particularly progressive. After the Bosnian war, the bulldozer programme was instigated by no less than Paddy Ashdown—one of our coalition colleagues—who was serving as a high-level diplomat in Bosnia at the time. The programme identified 50 roadblocks or regulations that were holding back the economy, and changes were pushed through in 150 days. The bulldozer committee, working with local entrepreneurs and businesses prioritised the areas for reform and worked with the Government to see them through.
I think that we can learn from others who have advocated intervention on behalf of business. I am not usually favourable towards that, but I think we can take a lesson from the Bosnian bulldozer approach, breaking down barriers to business—not intervening, but breaking down barriers before breakfast, before lunch, before tea and before dinner. I am pleased that the Government are taking a clear lead in that direction.
While the present Government are actively proceeding with their strategy for enterprise, the Labour party has offered no apology for their shocking record in office, and has certainly offered no alternative. The truth is that Labour has no clear plans for the economy, which is the single biggest issue facing the current Parliament. However, we can get a sense of what life would be like under a Labour Government by observing what is going on across the channel. President Hollande’s socialist economic policy is one that the Labour party would be proud to call its own, but matters have gone from challenging to absolutely disastrous. The Economist recently described France as a
“time-bomb at the heart of Europe.”
This Government are right to take a different course, and the autumn statement is an important step on that journey. Putting the public finances in order and implementing a strategy for enterprise by breaking down barriers for business and opening the doors to new opportunities in export markets is the right approach, and I commend it to the House.
Mr Alistair Darling (Edinburgh South West) (Lab)
I hope that the hon. Member for Macclesfield (David Rutley) will forgive me if, in the time available to me, I do not follow him down the road of bulldozers or anything else. I should begin by drawing the House’s attention to my entry in the Register of Members’ Financial Interests.
I am sorry that the Chancellor is not present, partly because he used to kick up a real fuss whenever I did not appear in the House or was slightly delayed. It would have been nice if he had been here: I am sure that plenty of us would have liked to press him on the question of how on earth he can claim abject failure as success, which is what he was trying to do last week.
Two years ago, it was not meant to be like this. Two years ago, the new Government said that they would be able to balance the books by the end of the current Parliament, and that debt would be falling as a proportion of national income. In 2010, they said that all the problems we faced were entirely home-grown. They compared this country mendaciously with Greece, and said that we would lose our credit rating, which they may yet regret. In other words, they set about trashing confidence and blaming the last Government for everything. That is despite the fact that the Conservatives supported every single penny of our spending until December 2008, and the Liberals were doing exactly the same until the evening of 10 May 2010, when they changed their minds.
The new Government’s position was that it was all the fault of the previous Government. How much has that changed? Last week, they began saying that this was an international crisis. They said that it had been caused by the eurozone; by the United States fiscal cliff; by inflation. However, all three of those things were around in 2010, and were known about. The problem that we have at present is that we simply do not have the growth that we were expecting, with the result that the Government have missed their debt reduction target and are experiencing serious difficulties in relation to borrowing. I shall say more about that shortly.
The Chancellor’s problem is that the growth profile that is presented in the report from the Office for Budget Responsibility, which was published last week, is remarkably similar to the profile that was published two years ago, but it is now running at least between two and four years late. If we do not achieve the growth profile that is set out in the report, both our borrowing and our debt will be higher, because the two are completely interlinked. I see no evidence for believing that the figures will be any more right this time than they were two years ago.
It is interesting to note that the OBR assumes, just as the Treasury modelling used to assume, that somehow we will always return to a 2.5% trend rate of growth. That theology was being questioned when I was in the Treasury, and I think that we will have to look at it again now. The Japanese are apparently contemplating what would be the fifth recession in 15 years. I honestly do not think that those of us in the western world—and Japan is, economically, in the same position—can assume that everything will bounce back as if nothing had happened. This will have a profound implication for all the political parties in the House, as well as further afield.
However, it is in relation to borrowing that I would have taken the Chancellor to task had he been here. During his speech last week, he made great play of how transparent he was being in taking into account the money that he had managed to find as a result of quantitative easing at the Bank of England and from the Royal Mail’s pension funds. What he did not say was that he could claim that borrowing was falling this year only because he had banked the sale of the 4G auction, which will bring in a very handy £3.5 billion—and, furthermore, will have to bring it in before the end of March if it is to score properly. That is the only reason why he could claim that, because the figures show that although borrowing has a downward profile, we are in fact borrowing £212 billion more than the Chancellor intended to borrow. We are borrowing much more, therefore.
The OBR report contains a number of findings that ought to worry those on the Treasury Bench as well as the rest of us. For example, over the next few years a very handy cumulative total of £73 billion will come in from the asset purchase facility—quantitative easing by the Bank of England. That money is not being created because of increased revenues or increased economic activity, however. It is basically a financial transaction that the OBR has said is okay to put in the books in this way, as opposed to scoring things differently which would have left a large hole in the economic figures.
Charlie Elphicke
The right hon. Gentleman is making a typically thoughtful speech. If he were the Chancellor, would he pursue the five-point plan the shadow Chancellor has proposed, given that it would cost £20 billion? Does he think there is the capacity to do that, and does he think it would be a sensible policy to pursue?
Mr Darling
I will address that point later. It is an important point, and I do not believe we should just sit back and hope that growth returns. The shadow Chancellor and many others both inside and outside the House also do not believe that the Government’s approach is right.
We are heavily dependent on money that is coming in from a financial transaction. In addition, the OBR has now found that by 2016-17 our revenues will be £30 billion less than it forecast in March. That is a huge gap, which will have to be filled.
What should we do? Whenever the Opposition suggest that perhaps the Government could do a little more, the Government parties—the Conservatives and Liberal Democrats—always say, “That’s all about borrowing more.” This Government are borrowing £212 billion more than they said they would not because we are spending money on projects and so forth, but because of failure—because our revenues are down. That is why we have got this gap.
When we eventually have a recovery, this country will need infrastructure. Over many years, we spent a lot of money on transport and energy. That was the sort of spending the Government say should not have been made, but we now know it was desperately needed, and we need to invest more in infrastructure, as well as get debt and borrowing down. We must invest in education, too.
On energy, the Government’s policy is completely contradictory. We are getting different signals every day of the week. On transport, I say again that it is not good enough to have no airport policy until halfway through the next Parliament, when we will not be able to do anything as another election will be coming up. That is not the right signal to send to our country, let alone the outside world.
Investing more in infrastructure projects would be one way to get confidence back. Confidence was trashed two years ago. If anyone were running a business now, would they hire more people or open a new production facility? No, they would not, because it appears that the economy will be bumping along the ground for another five years or so. I again remind Members of what has happened to Japan. People say, “We would never be like that,” but Japan has had non-existent growth for 15 years.
Mr MacNeil
Some commentators—at one time Ben Bernanke, and lately notably Paul Krugman—have talked about higher inflation targets for Japan, and also for the UK and other countries that are suffering a downturn. What is the right hon. Gentleman’s opinion on that? Does he, too, support higher inflation targets as a way of stimulating recovery?
Mr Darling
There is a lot of debate about that issue. I do not have the time to address it in detail, but I have said—including in a programme that will be broadcast tonight—that I think the Bank of England needs to examine its role, because for a long time we have said its job is purely to target inflation, yet central banks across the world are now also targeting growth, and perhaps we should consider whether we should formalise that role. Mark Carney was an excellent choice as the next Governor, and I hope he will think about that.
Talking about Governors, the current Governor, Sir Mervyn King, made an important point in New York last night when he talked about the G20, which had done so much at the height of the crisis in 2009, showing the determination that people expected in order to prevent the entire world economy from going over a precipice, and said that that spirit was now dead. He is absolutely right about that. It is important that we in this country, along with President Obama, now that he has been re-elected, look again at what we can do collectively as part of the global community to try to get the world economy not only to resolve some of the problems we face, but get growth going again.
That inevitably takes me on to Europe and the eurozone, because it is a tragedy that a legal structure and an economic structure that could do something about getting growth going again is simply failing to do so. Greece is not sorted out yet; another attempt was made a couple of weeks ago, but as far as I can see it leaves Greece with even more debt than it had. Until the Spanish banks are bailed out, they will simply hold back the whole of the eurozone, and the sooner Spain goes to get the bail-out it needs, the better it will be. Then we need to deal with the question of austerity. Austerity on its own does not work. Those who are interested may wish to know that there is an interesting article by Olli Rehn, the economic Commissioner, in today’s Financial Times, in which he just asserts that it is going to work, in the same way as this Government assert that austerity is going to work—frankly, I do not see it. We need to use our engagement in relation to the eurozone and to the European Union to try to persuade countries that unless they act together, in the same way as we did three or four years ago, although in a slightly different context, we and the eurozone countries are simply going to bump along on the bottom for years. If that is the case, the human cost is that we are condemning tens of thousands, if not hundreds of thousands, of people in this country, and perhaps millions of people in the European Union, to unemployment and low standards of living. If we do that, future generations will never forgive us.
Kwasi Kwarteng (Spelthorne) (Con)
Thank you, Mr Deputy Speaker. You have not been in the Chair for the whole of the afternoon, but I am pleased to see you there now.
Clearly, we have stated our positions at the beginning of this debate. The Labour Opposition have spoken eloquently about the need for growth and Government Members have commented on the mess in our public finances that we inherited in 2010. The gravity of the situation in 2010 should not be underestimated: our deficit to GDP ratio in 2010 was higher than it had ever been in peacetime conditions. That was a function of probably the worst management of public finances that this country ever had the misfortunate to live under.
I am very pleased to follow the right hon. Member for Edinburgh South West (Mr Darling), who served at the tail end of that Administration as Chancellor of the Exchequer. To use a cricketing metaphor, he was very much like the night-watchman who is sent in when the team has collapsed to 70-8 and the light is pretty dim. He did well in trying to steady the ship, but we have to look at the damage that had been caused in the public finances before he took over his post and at what the Labour Administration did not only from 1997, but in particular from 2001 to 2007, during which time they ran a deficit in each consecutive year for seven or eight years before the crisis happened. No academic textbook and no economic school of thought thinks that it is a good idea to run a deficit when the economy is growing. In 2004, the economy was growing at 3%; it was going at full rate, jobs were being created and investment was taking place. What was the deficit then? It was 3%; even under the Maastricht criteria, the previous Government would have failed. No Keynesian in his right mind, and certainly not John Maynard Keynes himself, would have ever contemplated running a deficit of more than 3% when the economy was growing at 3%.
David Rutley
Will my hon. Friend confirm that even former Prime Minister Tony Blair felt, on reflection, that Labour was spending too much when it was in office?
Kwasi Kwarteng
Absolutely. The former Prime Minister has said that on a number of occasions. I have been on record as saying that the first Labour Administration between 1997 and 2001 was, I freely admit, a very conservative fiscal Government. As the right hon. Member for Edinburgh South West well knows, during those four years the budget was never in deficit. We ran two years of surpluses and the budget in the other years was balanced. It was only after 2001 that the disaster occurred, that the wheels spun off the car and we suffered under a profligate traditional Labour tax and spend regime. I use the phrase “tax and spend” very gingerly, because the taxation never covered the spending.
That was precisely the reason why the Government ran those deficits—to pay for their projects, to pay for greater spending. They were required to borrow money. I remember that in 2001 one of their favourite columnists, Polly Toynbee, said that Labour would have to tax more in order to spend the money. At least that was an honest position. She was suggesting that Labour should try and balance the budget at a higher level of spending. I and my colleagues might want to balance the budget at a lower rate of spending, but both Polly Toynbee and those on the Government Benches would accept is that it is a road to disaster to borrow yet more money in order to spend on grand projects or whatever utopia the Government want to build in this country. We now have the consequence of this recklessness—of Government Ministers at the time spending more and more money and running 3% deficits.
Mr MacNeil
Can the hon. Gentleman tell us for how many years since 2001 the UK has been able to pay its way?
Kwasi Kwarteng
I can answer the hon. Gentleman very directly. With reference to our public finances, we have been borrowing money every year—every single year. It is likely that even if we are able to eliminate the structural deficit by 2018, this country will have seen nearly 20 years of continual deficits. This is an appalling legacy that Labour has left the country. Since the end of the second world war, we have never run 20 years of continual deficits, which we will do as a consequence of Labour mismanagement and old-fashioned incompetence.
Charlie Elphicke
In his praise for the former Chancellor, has my hon. Friend noticed that the right hon. Gentleman said in his memoirs not only that the Labour Government overspent, but that they ran a parallel Treasury operation while he was Chancellor trying to sort it all out as a night-watchman, undermining his work while he was trying to stabilise the ship?
Kwasi Kwarteng
That is right. Many historians will be needed fully to plumb the depths of the goings-on of that Administration—the level of incompetence, the level of secrecy, the high spending, the culture of fear that prevailed in the Treasury for much of that time. It will need many people to investigate that.
It was always the function of the British Treasury, as my hon. Friend well knows, to have a very conservative approach to public finances. It was always the tradition that we in the British Treasury tried to match expenditure to income.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
I am listening carefully to the hon. Gentleman, but I think his historical facts are a little distorted. There has been some sort of deficit in nearly every year that we have had a Conservative Government since the end of the second world war. If he looks at the period 10 years on from 1996-97, he will see that both the debt and the deficit were lower after 10 years of Labour government. What he is saying is simply not correct.
Kwasi Kwarteng
I appreciate the hon. Gentleman’s intervention, but if he looks at the deficit and the direction of travel and what happened in the 1980s, he will see that the deficit came down, again after a period of Labour mismanagement, every single year from 1979 to 1989, and that the budget was balanced in 1989. It was only as a consequence of the recession that we went back into deficit, as a Keynesian economist would tell him.
Let us look at what has happened over the past three years. The Government came into office when the eurozone was in crisis and there was a massive run on Greek sovereign bonds. The Chancellor’s approach, quite rightly, was to make the deficit our No. 1 priority. That, in effect, calmed the markets. Opposition Members might scoff at the bond markets, but they are very powerful. It was particularly interesting to note that in the six weeks before the general election British gilts were actually rising in value and yields were falling, because the markets rightly believed that Labour would be turfed out of office. In anticipation of that happy event, and before the quantitative easing, people started buying British gilts.
The Chancellor’s approach to dealing with the deficit is exactly the right one, because it followed the insight that we have to deal with spending. All countries in the western world have to do that. That is what the fiscal cliff debate in America is about, because it understands that spending has to be on the table; the issue is the degree to which revenue should be on the table. It has a mature approach to public spending. It is only the Labour party that lives in this Shangri-La world in which we can carry on spending and borrowing money with abandon and making the crisis even worse.
Mr Michael Meacher (Oldham West and Royton) (Lab)
I think this is the most extraordinary rewriting of economic history I have ever heard in the Chamber. The hon. Gentleman has not once mentioned the banks and the financial crash. Does he not realise that the public sector deficit in 2007, just before the crash, was about 3%? It only rose—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. The hon. Gentleman will have no time to answer you, Mr Meacher, and I am sure that you want an answer.
Kwasi Kwarteng
The right hon. Gentleman has talked me out and I must end my speech, but I am happy to discuss the banks with him at any time. My point today is looking at—
Mr Mike Weir (Angus) (SNP)
I am pleased to be able to make a short contribution and, hopefully, offer a Scottish perspective on the argument. It will come as no surprise to most in the Chamber that the Scottish National party does not support the general economic policy of the coalition Government, who have now announced that austerity will continue until at least 2018, and possibly well beyond. On Sunday, the ever-cheerful Secretary of State for Business, Innovation and Skills was warning of a triple-dip recession.
Whatever Labour might be saying now, we also remember that prior to the 2010 general election the then Chancellor, the right hon. Member for Edinburgh South West (Mr Darling), said that the Labour Government, if re-elected, would impose cuts that would be deeper and tougher than those imposed by the Conservative Administration led by Mrs Thatcher. With that in mind, would the economic situation we find ourselves in be any different had Labour retained power? Somehow I doubt it, despite their sound and fury today.
We take a much more different tack on how to tackle the situation. History shows us that ever-deeper austerity will not lead us out of the current mess. We need to invest for the future and ensure that there is capital investment to create work for firms and for individuals and to put money back into local economies. The First Minister of Scotland was the first to advocate such a policy when the financial crisis hit us, and the Scottish Government have pursued that policy within the bounds of their powers under the devolution settlement.
Indeed, since 2008 the Scottish Government have written to the UK Government at least eight times to call for more capital investment, and there have been four joint calls for that with the devolved Administrations in Wales and Northern Ireland. In November 2008, the First Minister announced that £100 million would be brought forward to invest in tackling the housing crisis, which had been caused by years of under-investment by previous Administrations. The Scottish Government have pursued that enlightened policy despite the fact that the capital budget available to them has been cut by 33% over the last few years.
The one piece of good news in the autumn statement was the Chancellor’s partial conversion to investment, as shown by the news of new capital investment. Scotland will receive around £330 million of that to allow the Scottish Government to proceed with some of the projects that are ready to go. It is not sufficient, but it is a start and I welcomed it when it was announced. However, had the Chancellor taken those steps earlier, we might have been able to avoid the double-dip recession that the UK has suffered.
The Scottish Government have been doing everything in their power to kick-start the Scottish economy. In February, they announced a capital spending package of £380 million until 2015 focused on housing, health, digital and maintenance programmes.
Anas Sarwar (Glasgow Central) (Lab)
Can the hon. Gentleman confirm whether the capital housing budget has been increased or decreased under the Scottish Government?
Mr Weir
The Scottish Government have been putting more and more money into capital investment. [Interruption.] It has not been decreasing. They have been putting money into capital investments that matter, despite the overall budget from Westminster having been cut.
The Scottish Government have been taking the action that the former Chancellor, the right hon. Member for Edinburgh South West (Mr Darling), called for earlier. In June, they announced a £105 million package of investment for so-called shovel-ready projects. Conventional capital investment has been boosted by a £2.5 billion pipeline of infrastructure projects that is being delivered through the non-profit distributing model. The Scottish Government recognised long before the current Chancellor did that the model of private participation in infrastructure was fundamentally flawed, although Labour does not seem to have cottoned on to that yet. A total of £700 million has been switched from the resource to the capital budget to support capital investment. The Scottish Government are supporting a range of innovative finance initiatives such as the National Housing Trust.
It appears from what he said this afternoon that even the former Chancellor has changed his original views and now supports the increase in capital expenditure on infrastructure, although that has not prevented his Labour colleagues in Scotland from continually attacking it; such is the way of politics, I suppose. Indeed, their leader has announced a cuts commission—an initiative whose only backers appear to be their friends in the Better Together campaign, the Conservatives.
Mr MacNeil
Has my hon. Friend noticed, as I have, that the main cheerleaders for Labour in Scotland’s cuts are the Tories in Wales, who welcome them on board with the same ideological baggage?
Mr Weir
My hon. Friend makes a good point. The Conservatives in Scotland have also supported the cuts commission, so it appears that they are all cutters together rather than better together.
The SNP Government in Scotland have been very active in ensuring that we rebalance our economy with investment in new green initiatives. The Government down here often talk about that, but we have seen little evidence of it. Indeed, the proposals in the Energy Bill give cause for concern about the way in which this Government look at green investment and whether there is to be investment in new green energy or whether the Treasury is winning the battle and we are going down a different route.
This is important to Scotland because the renewables industries now support more than 11,000 jobs in Scotland, and that figure is growing. There have been significant investments in green energy. Gamesa chose Leith for its new UK offshore wind manufacturing plant, which will create up to 800 jobs. Burcote Wind has announced plans for a £l billion investment creating up to 600 new jobs. Global Energy Group has announced that Nigg skills academy will deliver training for up to 3,000 people over three years. Scottish Power has announced the creation of 300 skilled jobs as part of a £5 billion investment in Scotland’s grid, and it is also investing £6.5 million in grass-roots skills development.
Anas Sarwar
The hon. Gentleman is talking about all this fantastic new investment which is happening in Scotland within the United Kingdom. Would that still be the case if Scotland were an independent country? What would corporation tax be in an independent country—20%, 15%, or the current level?
Mr Weir
The hon. Gentleman cannot tell me what corporation tax will be here next year, never mind what it will be in Scotland in a few years’ time. This investment is taking place. He and his party keep saying that the referendum is causing uncertainty, but all this investment is coming in now. People are investing in Scotland despite the scaremongering from the Labour party. I ask him to consider this: the real barrier to investment in the UK is not uncertainty about a referendum in Scotland but uncertainty about the referendum on Europe that Government Members and increasingly people in his party are pushing for.
Mr Weir
No, I have already given way enough.
There is uncertainty in politics and uncertainty on Europe, but in Scotland we are pressing ahead. Despite all the scaremongering from Better Together, investment is still going on. Most recently, Areva announced a substantial investment in wind. Beyond renewables, Diageo has made significant investments in the whisky industry. A great deal of investment is going on. They are coming to Scotland because it is a good place to do business and because it has a Government who are pushing forward and taking the steps necessary to create an environment to build up an economy that makes sure that there is work, that puts money into local firms and local economies and that puts people back in work. Those are the important things that people care about and that is what the Scottish Government are doing—that is why they are so successful—rather than following the austerity model, which seems to be the only thing that this House can talk about.
That has all been done with the limited powers of devolution and without the key economic levers of power that would allow the Scottish Government to do even more. That will change when Scotland votes for independence in 2014 and we will unlock the real opportunities to build a better Scotland, rather than be locked into the austerity agenda of the UK parties.
Chris Kelly (Dudley South) (Con)
Thank you, Mr Deputy Speaker, for calling me to speak in this important debate, not least because I was otherwise due to serve on a Public Bill Committee. I draw the House’s attention to my declaration in the Register of Members’ Financial Interests.
I will restrict my remarks to how I see the autumn statement benefiting and assisting the economy in my own region. Many businesses across the west midlands are set to benefit from the plans laid out by my right hon. Friend the Chancellor last week. The 368,000 small businesses in the region, including many in my own black country constituency, will benefit from the business bank, which brings together existing Government finance plans and uses £1 billion to stimulate the market for long-term capital. The decision to increase the annual investment allowance limit from £25,000 to £250,000 for two years, in addition to an extra £25 million per year for UK Trade and Investment’s assistance and guidance on exports, will be of great help to an area such as mine, which is crammed with small and medium-sized engineering and manufacturing firms. In addition, the scrapping of the 3p rise in fuel duty, which means that fuel prices will be 10p lower than they would have been under the plans of the Labour party, will help ease the strain of transport costs for small and medium-sized enterprises.
My right hon. Friend the Chancellor has demonstrated once again that Britain is open for business. The reduction in corporation tax to 21% from April 2014 means that the UK will have the lowest corporation tax in the G7. It is worth noting that the total amount raised in corporation tax for the year 2011-12 was £43.4 billion—20% higher than it was for Labour’s last year in office. Lower corporation tax is working. It is resulting in the higher yields that the Treasury needs, while also contributing to increased private sector investment and employment.
Prior to the autumn statement, the black country chamber of commerce, which has many members in my constituency, called for my right hon. Friend the Chancellor to support a pro-business environment. In response to the measures announced by my right hon. Friend, the chamber’s president, Paul Bennett, welcomed his actions to get British business growing:
“The Chancellor’s Statement was encouraging for businesses and many of our members concerns seem to have been addressed”.
Meanwhile, Mark Hastings, the director general of the Institute for Family Business, described several of the measures as “encouraging”. This qualified support reflects the attitudes of many of the business people whom I have spoken to recently in my own constituency—they recognise that this Government are on their side—and of those in the family business sector, in which I am involved as the founder and chairman of the all-party group on family business.
It is pleasing to see the Chancellor building on this Government’s support for British businesses. Last year, we saw an increase of 250,000 in the number of private businesses, which included 226,000 new small businesses, a good proportion of which were in the west midlands. It is obvious, but still worth pointing out, that every successful large employer in the private sector started off as a small start-up. Even JCB, which was started by the inspirational J.C. Bamford and which I have had the privilege of visiting in Rocester, was once a small enterprise in a small shed. I refer the House to my declaration in the register relating to the last election.
This Government are cutting red tape and making it easier for budding entrepreneurs in this country to set up their own businesses, and that is clearly being borne out by the figures. All of that is in marked contrast to the previous Labour Administration, who introduced the equivalent of six new regulations for every single working day they were in power. It is estimated by the British Chambers of Commerce that those new regulations have cost British businesses almost £77 billion since 1998.
Last week, the Chancellor announced further support for local enterprise partnerships, which the Government created. That is the right approach because it promotes local growth by ensuring that Government spending is aligned with the priorities of local business communities. We have an excellent LEP in the black country, which is ably chaired by the no-nonsense Stewart Towe of Hadley Industries. I am confident that the Government’s approach will help to create the conditions that will enable the private sector to get on with creating more jobs in the black country.
The Government are continuing to demonstrate that they are not afraid to take tough decisions in the face of tough economic times. A clear message is being sent out that Britain is open for business and that Britain has a pro-business Government.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Before I call the new Member for Rotherham, I remind everybody that this is a maiden speech.
Sarah Champion (Rotherham) (Lab)
Thank you, Mr Deputy Speaker, for allowing me to make my maiden speech during this important debate on the economy.
My first job was in Rotherham and for the past four years I have been proud to manage Bluebell Wood children’s hospice, also in Rotherham. In that role, I have had the pleasure of supporting many local families. However, Bluebell, like all hospices, is a charity and, like everyone else, we are victims of the economic downturn. I am grateful that there is currently a national review of all palliative care funding as it seems deeply unfair that children’s hospices get no statutory support.
We are facing big challenges to protect the NHS in Rotherham. I am appalled that 750 jobs in our local hospital are under threat, under a Government who promised not to cut the NHS. The people of Rotherham can be assured that, as their MP, I will do everything possible to fight those cuts and to save the vital services on which so many people rely.
My immediate predecessor, Denis MacShane, was a distinguished Member of this House for 18 years. He achieved much good work for Rotherham by championing the steel works and trade unions, raising money for local medical charities and being vocal in his fight against racism. However, he also made a mistake, for which he has paid dear. I will build on all the good work that he has done for the people of Rotherham.
Having read the maiden speeches of previous MPs for Rotherham, I note with regret that a generation ago, in 1976, Stan Crowther’s principal concern was the growing unemployment in Rotherham and especially the plight of young jobless people. I am deeply saddened that, 36 years later, youth unemployment is still a major concern for the town. Across our nation, there are almost a million young jobless people. In Rotherham, a staggering one in five young people are out of work. We must all be worried about the danger of creating a workless generation—a generation without hope.
Rotherham people have never been afraid of hard work. Until the 1980s, tens of thousands of Rotherham men worked long hours in the town’s steelworks and coal mines. The pits have all but gone, and another round of redundancies at the steelworks was announced a few weeks ago. So what options are there for young people when they leave school? The vast majority cannot go to university any more as they cannot afford tuition fees. Last week, the Prime Minister talked about the “bank of mum and dad”. That is not an option for most young people in Rotherham. With education maintenance allowance scrapped and tuition fees trebled under this Government, and with five people applying for every job in Rotherham, what future are we offering our young people?
I recently visited Rotherham college of arts and technology: meeting the apprentices and staff was so inspiring. This has to be the way forward. I will do all I can to secure placements, training opportunities and apprenticeships for Rotherham. With Tata Steel and Rolls-Royce planning to make big investments in the area, we do have opportunities and our young people need to be ready to take them.
The people of Rotherham are proud of their town, but they cannot understand why none of the good things are ever shared. Let me redress that. Seven out of 10 top Formula 1 racing cars are constructed of Rotherham steel. Every five seconds, somewhere in the world, an aircraft takes off or lands that is reliant on gear made from Rotherham steel. In recent years, Rotherham has embraced growing industries in advanced manufacturing, finance and IT services. Rotherham Ready, which was launched in 2005, is internationally acclaimed for its approach to integrating enterprise into learning for all children aged four to 19.
This year, 18 new independent businesses opened in Rotherham town centre, as well as two national retailers. The recent £7.5 million Clifton Park restoration is a benchmark of excellence. Rotherham Show is the largest free show in the north of England and welcomed 80,000 visitors during its two days in September. Rotherham United’s stunning new home, the New York stadium, opened its doors to a sell-out crowd this year. Rotherham is the only place in the country affiliated to the Athena international programme, the main aim of which is to secure balance in leadership worldwide. As the first ever woman to be elected as MP for Rotherham, I am particularly pleased with that affiliation and I will work to support more young women to reach their full potential.
I spent the past few weeks knocking on doors and talking to well over 1,000 Rotherham residents. As a vox pop goes, I think that is a pretty good sample, so let me be their voice. Regardless of their politics, and without exception, everyone was polite and welcoming and they were passionate about Rotherham. Rotherham people work hard, but the message they asked me to give is that no matter how hard they work they are being hurt by an economy that is flatlining and a Government who are helping the wrong people. Those in the lowest-paid jobs who are trying to do the right thing are seeing their working tax credits cut, yet at the same time millionaires are handed a tax bonus. All in it together? That kind of spin does not work with the people of Rotherham. Rotherham people want work—they are strivers, not skivers—and they need just a little support so that they can put food on the table and do the best for their children. The answer is to get people back to work by real action to kick-start the failing economy, not to cut benefits that people depend on to survive.
Rotherham voters are also worried about the impact and change that new immigrants might bring to their community. I know they are neither racist nor bigoted in raising those genuine concerns, but when opportunities are few and times are tough we must understand that people get more protective of what they have. We need a different approach; we need a grown-up debate to address people’s concerns and put sensible policies in place while recognising the richness that immigrant communities bring to the UK. We need a better-funded UK Border Agency with stronger controls to combat illegal immigration, but we also need help for those who come to my surgeries and are being forced to wait too long for legitimate immigration issues to be resolved.
Many of those proud to call Rotherham home are of Kashmiri descent and their relatives came to Rotherham to work in the steel industry or mines in the ‘50s and ‘60s. Their contribution helped to make Rotherham the town it is today, which is why I will stand firmly with them in support of Kashmir’s right to self-determination. I am also proud that peace and security in the middle east remains one of Labour’s most important foreign policy objectives, and as a new MP I will continue to work for the day when we see the creation of a viable Palestinian state that can live in peace alongside Israel. Sadly, during the by-election a number of candidates tried to bring race and immigration into the debate in a divisive manner. I am proud that the people of Rotherham politely sent them packing with a clear message: “We are one Rotherham.”
I believe in Labour’s one nation values of equality and fairness for all, and I thank the people of Rotherham for electing me as their representative to Parliament because they also believe in equality and fairness. During the by-election I met Barbara, an 84-year-old great grandmother, proud to be Rotherham born and bred. She is typical of all that is best in Rotherham and I want to serve people such as her.
Stephen Williams (Bristol West) (LD)
It is a pleasure to follow the new hon. Member for Rotherham (Sarah Champion), who, as she said, is the first hon. Lady to represent that constituency. We all remember our maiden speeches for a long time—if we are honest, probably longer than anyone else remembers them—and we learned a great deal about Rotherham from the vivid and balanced picture that she painted of the challenges facing her constituency as well as some of the good things that have happened in recent years. Perhaps I can extrapolate that picture wider into today’s debate on the state of the economy. As we know, the economy still faces deep-seated challenges, but none the less good things are happening at the same time.
The economy fell into a very deep hole in the last couple of the years of the previous Government—it contracted by more than 6%. We must be honest that it is taking longer than any of us would have wanted to repair and recover from that deep economic damage, but, none the less, good things are happening. Some 1.2 million private sector jobs have been created since the first quarter of 2010. Unemployment has consistently fallen this year, and employment is at a new high. The rate of unemployment in the UK is marginally lower than the rate in the US—7.8% versus 7.9%—and considerably lower than the rate in the eurozone, which is 11.7%.
My hon. Friend the Member for Spelthorne (Kwasi Kwarteng)—my coalition colleague, who is no longer in the Chamber—spoke at length about the public finances and the state of Government borrowing. The OBR has said that borrowing will fall by £1.5 billion from fiscal years 2011-12 to 2012-13. Borrowing has fallen throughout this Parliament, and the deficit, as a proportion of our economy, has been reduced by a quarter in the first two years of the coalition Government. Reducing that deficit fully to the point at which we have balanced the nation’s books is taking longer than we would like, but the trajectory is clear.
We still have a higher rate of borrowing than most of our fellow EU member states, yet the Government can borrow at a lower rate than them. The UK Government can currently borrow on the international markets at a rate of 1.8%. Germany, practically the only nation that can borrow at a lower rate, borrows at 1.3%—France borrows at more than 2%, Spain at 5.24%, and Greece at an eye-watering 15.2%. The UK Government, despite having one of the largest deficits in the developed world, can borrow at those low rates because of international confidence that the country and our public finances are coming back on track.
However, hon. Members want more confidence at home. We want more confidence among our constituents, whether they are in Rotherham or Bristol West, that the Government are on their side and are doing what they can for them in these difficult times. Constituents want confidence that the Government are holding down the cost of living and giving them more money in their pockets.
For those reasons, I welcome the fact that the Government have again held down the cost of fuel by cancelling the 3p per litre rise in fuel prices that was due to take place on 1 January. Many of my Liberal Democrat rural colleagues welcome that initiative and campaigned for it, but it will also make a difference to the urban poor whom I represent in Bristol. However, the measure is enormously expensive—it will cost roughly £1.6 billion next year. At some point, politicians must face the fact that fuel prices are going in only one direction in our lifetimes, and that we need to find a new way of taxing movement—I believe road user pricing is the way forward. The fuel duty increase cancellation and previous measures taken by the Government save the average private motorist about £40 per annum, but they could save a road haulier—a small business person—up to £1,200 a year, which is a major advantage for many road haulage firms in the country.
The Government have frozen council tax and capped the increase in rail fares, but the biggest difference this Government have made is putting more money into people’s pockets by raising the income tax threshold—it will not surprise the House to hear me say that yet again. When the Government came to office, the income tax threshold was just under £6,500. As a result of the announcements in the autumn statement last week, the amount of tax-free pay that individuals can receive will increase to £9,440. That is an increase of £3,000 over the first three years of the coalition Government.
We will have taken 2.2 million people out of income tax altogether. Come next April, when our constituents look at their payslips, they will see that they have received an income tax cut of £600 since the Government came to office. That disproportionately helps people who work part-time, particularly women who work part-time, and will also help young people. Young people on the minimum wage, even at a full-time rate, will be raised out of income tax completely—they will no longer pay any income tax—while the income tax bill for an adult on the minimum wage will be halved from £1,020 when we came to office to £520 now. That makes a significant difference to people on low earnings.
Liberal Democrats also want fair taxes on the wealthy. The coalition Government have increased capital gains tax and stamp duty on expensive properties—[Hon. Members: “What about the mansion tax?”] I am coming to that. We have hauled more people into higher rate tax and clawed back pension tax relief—a person could put £250,000 into their pension under Labour, but that figure will be £40,000 under the coalition. The Liberal Democrats wanted a mansion tax, but we agreed not to proceed with it, in return for our Conservative coalition partners not pushing for punitive measures restricting benefits. That means that the loopy idea—in my opinion—of restricting housing benefit for under-25s is not Government policy.
We also need to do more, and the Government are doing more, to tackle tax avoidance and tax evasion. The Treasury has an affluence unit. We have a new treaty with Switzerland and we are tackling corporate tax avoidance—I am sure that Starbucks, Amazon and others will be shamed into doing the right thing. The Government are balancing the nation’s books, building a sustainable economy, restructuring the banks and introducing fair taxation. We have made much progress. We know the road is difficult, but now is not the time to be blown off course.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Before I call the hon. Member for Croydon North (Steve Reed), I remind hon. Members that this is his maiden speech.
Steve Reed (Croydon North) (Lab)
I am honoured to stand in this Chamber as the Member of Parliament for Croydon North. During the recent by-election, I spoke to thousands of people across the constituency, and one of the things that most struck me in every part of the community was the great warmth and affection for my predecessor, Malcolm Wicks, and the profound sadness that people felt at his passing just a few short weeks ago.
Malcolm was a man of great integrity, a genuinely decent human being, and a man with a sincere and lifelong commitment to social justice. He made a difference, improving support for carers, for children and for older people. In Malcolm, the people of Croydon North had a true champion and a good friend. As many in the Chamber will know, Malcolm had a great sense of fun—he did not take himself too seriously—and that much was clear to the office staff who walked into his office one afternoon to find him bouncing around the room playing air guitar with his good friend Keith Hill, the former Member of Parliament for Streatham. I know that Members on both sides of the House miss Malcolm very much.
Until my election as a Member of Parliament, I had the pleasure and privilege of leading Lambeth council. I am proud of the work I did there, alongside many talented colleagues, to turn around a once failing council. Lambeth children’s services were in the bottom 3% nationally when I was elected leader, but were rated by Ofsted as the best in the country when I left. I hope that that experience of transforming public services will be of value to the House and the people of Croydon North.
At Lambeth, I pioneered the concept of co-operative councils and co-operative public services. I believe that public services work better when they do things with people rather than to people, and that means finding new ways to give people and communities more control over what happens to them. It means giving people the power they need to make the changes they want. We can see the benefit of that in tenant-managed housing estates that become better places to live, in community-led youth services that give young people a better chance in life, and in care services for older and disabled people where the service user has the power and support to choose what they want, rather than be told what they will get.
I pay tribute to the growing number of councils and dozens of other organisations nationally that are pioneering more co-operative ways of running public services so that they are more directly responsive and accountable to the people who use them. This is the future of public services, and I hope to continue championing it here with my colleagues.
I would like to pay tribute to the constituency I represent. Croydon North is one of the most diverse and vibrant places in the country. People have come to live there from across the world. The area’s greatest strength is its diversity. Anyone who walks along the London road, which runs through the constituency, will find restaurants, businesses, faces and languages from every corner of the globe. In an age of globalised trade and communication, that diversity is a resource to be harnessed for the good of everyone. I was heartened by the fact that during the by-election those who sought to divide the community were rejected. People in Croydon North understand that we best confront the challenges we face when we stand together in solidarity.
Croydon North faces real challenges. It is a relatively poor area, and people living there feel let down because the slow decline of the area over recent years has not been addressed. Unemployment is too high, the streets are not clean enough, and people worry that police are being taken off the streets when crimes such as robbery are on the rise. There is real concern that the help and investment promised after last year’s riots have not come through. Croydon was one of the areas worst hit by the riots, and Croydon North bore the brunt of the mindless hooliganism, looting, burning and destruction that so appalled the nation in the summer of last year.
The Rozario family lost their home in a fire, but they have not received any compensation because of a lack of support from the public authorities. The Hassan family saw their business—the sole source of their livelihood —burnt down, but they have been left struggling and in debt, instead of being helped to get back on their feet. Charlene Munro and her four-year-old son fled their home when they saw hundreds of rioters approaching; they returned the next day to find it destroyed. Instead of getting the help they needed, they feel abandoned. These are hard-working people—the backbone of their community, strivers. I want to make a plea on their behalf and on behalf of so many others like them that the promises made to Croydon North after the riots be met in full. The people who live and work there deserve nothing less.
Mr Deputy Speaker, I would like to conclude by thanking you, Members on all sides and the staff of the House for the very warm welcome I have received here. I hope during my term of office to represent the people of Croydon North to the best of my ability. If, when I finally leave this place, I have earned even a fraction of the respect and warmth that people felt for my predecessor, Malcolm Wicks, I will have done well.
Justin Tomlinson (North Swindon) (Con)
I congratulate the hon. Member for Croydon North (Steve Reed) on a powerful maiden speech—I cast my mind back to the nerves I felt during my first speech—which he delivered in an exceptionally articulate way. It is clear that his local government experience—championing the future of public service, along with understanding and delivering much needed improvements—will be a great asset to this House. I also congratulate the hon. Member for Rotherham (Sarah Champion), whose exceptional experience in children’s services will be a vital asset to us all in Parliament.
Let me turn to a few key messages in the autumn Budget that I picked up on, having spoken to a number of my constituents. On fuel duty, I pay tribute to my hon. Friend the Member for Harlow (Robert Halfon), who has championed the campaign with huge support across the country and among MPs. It was absolutely essential that we froze fuel duty, because it is the most tangible tax there is. We all pay all sorts of taxes, and although people will have a rough idea how much council tax, income tax or national insurance they pay—they will not know exactly—everybody knows exactly what it costs to fill up the car. That impacts on consumer confidence, which is something we desperately need to protect in this country, so this move by the Government was welcome.
I also welcome the further move on the income tax threshold. It is a principle of ours to ensure that work pays, and what better way to incentivise people than to leave more money in their pockets? By the end of the Parliament, those on the minimum wage will be paying half what they were paying in income tax when we came to power. That stands in stark contrast to the 3.9 million workless households we saw under the former Government. Some 24.4 million people will benefit from the changes we have made to the income tax threshold by an average of £247 per person, but I would like to see a further change. Whenever any changes are made to pay-as-you-earn—whether by this Government or future Governments —they should be shown on employees’ payslips. We get excited in these debates about such changes, but more often than not they fly past the public. If we are going to get the public to take ownership of the tax system, those changes should be displayed clearly. I welcome the move to introduce an annual tax statement. I was one of the 10 MPs who supported the private Member’s Bill on that subject. Any notification of changes to PAYE on people’s payslips would make a big difference.
I am also delighted to see further measures to support business. Before I became an MP, I was a small business owner in Swindon. We now have 4.2 million self-employed people in this country, which is a record number. That shows that we are truly open for business. The cut in corporation tax takes it down to the lowest rate in the G7, and the extension of the small business rate will make a huge difference to small traders. I would also urge the Government to continue to look at the principle of the rates system, because to a certain extent the golden goose has been killed. High street businesses in particular are facing further threats from internet companies, which benefit from not having high street rate bills to pay. That is something that we must take into account.
The £250,000 annual investment allowance will also make a huge difference. I know that my hon. Friend the Member for Dudley South (Chris Kelly) has championed that cause for a long time. The need for this measure reflects the fact that businesses are nervous. For the first time in history, businesses are holding more money in their current accounts than they are borrowing. That is partly because of the perception that they will be unable to borrow money, and they want to stay in control. I hope that the increase in the annual investment allowance will open up the coffers, and that the effects of that will filter through to the election.
Mr John Redwood (Wokingham) (Con)
Given the warm welcome in the House, particularly on this side, for all tax freezes and reductions, will my hon. Friend urge those on our Front Bench to do more of that, so that we can get the economy growing more quickly?
Justin Tomlinson
I thank my right hon. Friend for that important suggestion, which I endorse. We would all welcome such measures being taken whenever possible, given the financial constraints that we inherited.
I also welcome the extra investment in UK Trade & Investment in relation to exports. The Office for Budget Responsibility has recognised the challenges involved in exporting to the eurozone. Honda, the biggest employer in my constituency, has faced challenges in exporting cars to a declining market, although the UK market has experienced an 8.6% increase. We have seen our exports to emerging markets double, however, and the investment through UKTI will make a big difference. I have attended lots of events with the Government and with banks to encourage businesses to consider exporting to those markets, and that extra help to remove barriers will make a big difference.
I want to make a plea for a greater push promoting young entrepreneurs. The Government have launched the £2,500 start-up loans. I have been working with Young Enterprise, Virgin Media Pioneers and the National Association of College and University Entrepreneurs. Even the Scouts have a young entrepreneur’s badge now, and my wife and I had a very enjoyable evening helping to judge that. They even offered us free cake and cups of tea to try to influence our decision. I was the only one of the 350 students studying business at my university who went on to run their own business. I believe that that university education taught any entrepreneurial flair and risk-taking out of us. We need to encourage more young people who have boundless energy and enthusiasm, and enough cheek to question the accepted ways, to find new niche markets.
I have been working with New college and Swindon college in my constituency to try to set up further opportunities for young people. This will involve not only the traditional young enterprise scheme set up in the main foyer in which the students sell to their friends but the opportunity to set up a pitch in the local market. They will have a wooden table and do three days’ trading. If they are not set up by 9 o’clock in the morning, they will lose that day’s trading. Those who are successful will then be offered cheaper pitches in the summer holidays, after they have finished college, and we hope that they will be the next generation of entrepreneurs. Many famous business people, including Lord Sugar, Richard Branson and the founders of Marks & Spencer and the Superdry clothing brand, started on a market stall. If we can get those young people to take that risk, we can create the next wave of jobs, and I encourage the Government to do what they can on that front.
On the banks, we all welcome the fact that we still have record low interest rates. That is due in no small part to the fact that the tough decisions we have taken have protected our triple A credit rating. That has made a huge difference to businesses that are borrowing money and to mortgage holders. However, we still need to do more to encourage access to finance from banks. Whenever I talk to banks, they tell me that they have money and that it is available to borrow. Whenever I talk to businesses, they say that there is no such money. There is clearly a perception problem.
The Government should help to provide information on the funding that is available, whether from the Government, from the banks that say they have money or from the national loans guarantee scheme. I am told time and again that everything possible is being done to communicate such information but that it is difficult to get hold of the businesses that need it. That is not the case, however, because once a year the Government send out a business rates mailer to every business. It might simply say that they do not have to pay anything because the small business rate relief has been extended, but the Government still have to write to them to tell them that. My suggestion is that we should include something in that mailer—we have already paid the postage, so the taxpayer will be no worse off—outlining what funding is available through the banks and through the Government, what opportunities there are to employ and offer opportunities for apprentices and about the business mentor scheme. Some 40,000 business mentors are there to help and I have seen them make a big difference when I met Mentorsme, an organisation that has helped a number of businesses in my constituency. Let us use the business rate mailer to spread the opportunities that are available. Those measures will make a big difference to us all.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Before I call the hon. Member for Middlesbrough (Andy McDonald), I remind hon. Members that this is his maiden speech.
Andy McDonald (Middlesbrough) (Lab)
I am greatly honoured and feel immensely humbled and privileged to be in this place, representing the town of my birth. The circumstances that have caused me to be here were of course most tragic and sudden and I wish to make some comment about my immediate predecessor Sir Stuart Bell, who sadly died on 13 October 2012.
Sir Stuart became MP for Middlesbrough in 1983 after beating a certain Tony Blair in the selection process and represented the Middlesbrough constituency for almost 30 years until 2012. Such a lengthy period of service is quite remarkable and he was duly knighted in 2004 for his services to Parliament, as well as being awarded the Légion d’Honneur in 2006 for his contribution to British-French relations. Seven successive general election victories is a record that speaks for itself.
Middlesbrough is still a comparatively young town, and in the early part of the 19th century was nothing more than four farmhouses with a population of some 25 souls. It was the discovery of ironstone in the Eston hills and the subsequent production of pig iron that saw Middlesbrough’s Klondike-like growth over a relatively few short years. Indeed, the first MP for Middlesbrough was Henry Bolckow. a German national until his naturalisation as a British subject in 1841. He is undoubtedly one of the founders of modern Middlesbrough.
In 1851, at the time Bolckow opened his blast furnaces on Teesside, the population was 8,000; by 1871 it had grown to 40,000. In 1853, the town received a charter of incorporation and Bolckow became its first mayor and the town’s first MP when it was granted the status of a parliamentary borough in 1868. I have been labouring under the misapprehension that I was the first locally born MP for Middlesbrough, but I discovered that Penry Williams beat me to it when he was first elected as a Liberal MP in 1910. However, I think I can lay claim to being the first Labour MP for Middlesbrough to have been born in the town.
I could not let this occasion pass without mentioning one of my most notable predecessors, namely Ellen Wilkinson, otherwise known as “Red Ellen”, who first won the Middlesbrough East seat in 1924. She was of course a leading light in the women’s suffrage movement and, having lost Middlesbrough East in 1931, went on to become the Labour MP for Jarrow, holding ministerial office as well as taking part in the famous Jarrow march. It was lovely during the course of the election to meet Bob Carter of Bellamy court in Pallister park, who is well into his 90s and was a runner for Ellen Wilkinson. He was vote-catching in that last election.
The town motto is “Erimus” which means “We shall be” and is a direct response to the motto of the Brus family who owned the site on which Middlesbrough is built. Their motto “Fuimus” means “We have been'” and the town motto was chosen to signify the town’s will to grow and become great from its foundation. It encapsulates the energy, ambition and aspiration of the people who came from all over the British isles and beyond to seek employment in the burgeoning industries of the mid and late 19th century.
Since those times people have continued to come from far and wide to work in our world-class industries of steel, bridge and shipbuilding, petro-chemicals and oil and gas, and now in our digital and renewable energy industries. By definition, glancing back over just a few generations, we in Middlesbrough can all trace our forebears to other parts of these islands and much further afield—right across the globe. In short, we all came from somewhere else.
Our magnificent Teesside university, which in very recent times was awarded the title of university of the year, continues to draw students from all over the world and contributes in no small measure to the development of new industries, especially in the area of digital technologies. That all adds to our diversity and the rich cultural mix of our town, and it is a joy for me to be at the service of all the people of Middlesbrough of whatever background, or whatever faith, or of none, in full recognition of the common values at large in our community as we work towards our shared values of social justice, understanding, peace and tolerance.
We have a real sense of community in Middlesbrough, and we have a lot to be proud of, including our wonderful James Cook University hospital and our schools, the majority of which have either been rebuilt or refurbished over the last 10 years or so. We also have MIMA—the Middlesbrough Institute of Modern Art—and, of course, the magnificent, trophy-winning Middlesbrough football club. Undoubtedly, however, we face very challenging economic times. Our rates of unemployment are unenviably high, which is why I will conclude my speech with a plea.
Although the entire House will undoubtedly agree with me that it is never acceptable for an individual to reject the genuine opportunity of work, it seems to be increasingly part of the accepted orthodoxy that those who suffer the indignity of unemployment do so as a result of the lifestyle choice that they make. That is a gross and offensive misrepresentation.
In a town where more than 10 people currently chase each and every job that comes along, it is a most cruel slight and insult to say, as some assert with unremitting regularity, that all such people are somehow by definition scroungers. To all those who would say such things, I make this plea: if they are fortunate enough to be in employment or to have other means and if they can heat their homes and support their families, they should tread carefully on the sensitivities of those who cannot make such boasts. Such attacks on the powerless and impoverished serve only to reaffirm their sense of alienation and desperation, which in turn fractures our society and offends against the finest of British traditions that in times of hardship, we protect, support and care for one another.
It is my belief that the overwhelming majority of the British people expect us in this House to speak up for working families that are having their budgets squeezed and for young people who are struggling to find their first job. In recent weeks, I have talked to thousands of people in Middlesbrough, so I know that people are anxious and scared for the future of their families. To make matters worse, there is a sense that some politicians are determined to set community against community and neighbour against neighbour. It is my fervent belief that we must strenuously resist the temptation of such politically expedient arguments, and as an alternative we should engender a real sense of one nation so that we can rebuild our country and restore fairness so that everyone has a stake and not just a privileged few.
Gordon Birtwistle (Burnley) (LD)
I congratulate the new hon. Member for Middlesbrough (Andy McDonald) on his interesting and excellent maiden speech.
I listened to the autumn statement with a lot of interest because I, a simple mere Back Bencher, was able to put forward a proposal to the Chancellor of the Exchequer and the Chief Secretary to the Treasury, suggesting that industry would blossom and grow if we included in the autumn statement something to help with capital allowances. I was delighted to see that such a measure was included in it. Industry needs confidence to grow and it needs confidence to start to invest. I believe that this major part of the autumn statement has not much been picked up around the country. Companies in Burnley, to which I spoke prior to the autumn statement, assured me that such a measure would help them to invest in brand-new plant and equipment, so I shall follow up to see if they have delivered on that.
Some plant and equipment could be made mainly in the UK, but some of it will come from abroad. The main point, however, is that the companies investing in this plant and equipment will need more people to work on the new pieces of kit. They will also become more efficient and deliver more profits—and hence provide more tax. That will obviously help the country along.
Another interesting feature of the autumn statement that was not published anywhere else was the increase from 100% to 120% in the Government Actuary’s Department rate for self-invested personal pensions. We have tied pensions to the triple lock, so that the vast majority of old age pensioners will receive an increase that is way above the inflation rate. However, this is a major step that will benefit those who have made their own arrangements through various SIPP and self-administered pension schemes. They will now be able to spend more of what they have invested in pension funds, rather than the Government’s holding it back, and that will create growth because they will start to enjoy spending money that they have saved over many years.
The main thing that we must do is invest in manufacturing. I used to be in manufacturing myself: I worked in the aerospace industry. Over the next 20 years, the airlines of the world will spend some $7 trillion on new aeroplanes and helicopters, and, as the second-biggest manufacturer in aerospace equipment, we must get involved. That will mean a growth of 5% in the industry every year, so over 20 years we will have to double our capacity to produce aerospace components. Well over 100,000 people already work directly in the industry, and the supply chain employs even more. The country must get involved, and in order to do that we must expand.
Another aspect of the autumn statement that was not picked up by any of the newspapers was the £100 million that the Chancellor has put into the aerospace supply chain. In Lancashire, the North West Aerospace Alliance has bid for a national aerospace supply chain centre to be built somewhere in the north-west. I hope that it is built in Burnley, but as long as it is built somewhere in the north-west, I shall be delighted. I am sure that you would love to see it built in Chorley, Mr Deputy Speaker, but I suspect that it will go to BAE’s new industrial park in Samlesbury.
We need a massive investment in the aerospace industry, but one of the big problems with the doubling of the industry over the next 20 years is the provision of staff with the necessary skills. Over the last 30 years, various Governments ignored apprenticeships—and the last Government were just as bad as their predecessors. I am glad that the coalition Government are investing in apprenticeships, but the wreckage of 20 or 30 years cannot be turned around in two years. Apprentices need to be given more time in which to learn the job, and I am delighted that that is happening.
The last Government wanted 50%, of students, or even more, to go to university and study subjects which, in the main, were no longer applicable. What we want is for young people either to go into apprenticeships or jobs or to go to university to study the subjects of the future rather than the past: subjects such as high-tech manufacturing, including high-tech food manufacturing.
When I visited the British Aerospace apprentice school in Warton, I met the apprentice of the year, a young lady who had been on BAE’s apprentice scheme. She had been told by her college not to be an engineer but to go to university and study something else, because she was far too clever to be an engineer. It refused even to advise her on what an engineer was.
Michael Connarty (Linlithgow and East Falkirk) (Lab)
I have been at a meeting of the all-party parliamentary apprenticeships group in the last couple of hours. About 30 apprentices were present. One of them, a woman who is now at Vauxhall, said that her school had spent all its time trying to persuade her to try to get into university rather than becoming an apprentice. It was clear from what she was saying that those at the school thought that it would be higher in the league table if people passed A-levels and went to university rather than entering what that woman said was a very fulfilling career. That seems to be the pattern in many schools today.
Gordon Birtwistle
I am grateful for that intervention, and I entirely agree with the hon. Gentleman. I am the chairman of the all-party group on apprenticeships. Unfortunately, I have been sat here in the Chamber today waiting to speak, instead of being at that all-party group meeting, and I am sorry I missed hearing from those apprentices.
The hon. Gentleman may recall that two Airbus apprentices came to a previous meeting. Both of them had turned down the chance to go to Oxford university in order to be apprentices at Airbus. Both of them said, “We’ve come to Airbus, and it has taken us through its apprenticeship programme and paid for us to go to university.” Both of them were proud to say they had bought new cars and were happy to pick up their friends, who had gone to university and now had not got jobs, and to take them out on a Friday night.
We must encourage young people to go to university via companies such as Airbus, Rolls-Royce and BAE Systems. I agree with the hon. Gentleman that it is wrong for schools to advise young people to go to university just to ensure that their figures for pupils attending university go up. That is outrageous, and it needs to be looked at. I have argued that case for quite some time.
Mr Brian Binley (Northampton South) (Con)
First, may I apologise for not having been in the Chamber for long?
I urge the hon. Gentleman to pick up on the issue of how schools deal with people who want to be apprentices. The Business, Innovation and Skills Committee has just undertaken a report on the subject, and that theme came up time and again. It is in all our interests to ensure that what has been described does not happen. We had too much elitism in the past, and we do not want it continuing in the future.
Gordon Birtwistle
Once again, I agree with the right hon. Gentleman. It is always a great moment when the right hon. Gentleman rises and speaks in this Chamber—even though he has only just turned up.
Mr Deputy Speaker (Mr Lindsay Hoyle)
On a point of clarification, Mr Binley is not a right hon. Member. He has been in the Chamber a little longer than suggested, too.
Gordon Birtwistle
I apologise. The hon. Member for Northampton South (Mr Binley) must have been so quiet that I had not seen him in his place.
I agree that the schools and colleges in this country must no longer downgrade apprenticeships, and must no longer say to students, “If you don’t pass, you’ll be an apprentice.” That is an outrageous statement for schools to make. It is time they woke up. I must say that it is also time that this Government’s Department for Education woke up to the fact that going to university is no longer the be-all and end-all, because there is far more to life than going to university.
I am a little upset that the Secretary of State for Education does not think a right lot about careers advice, because I believe that careers advice in schools is crucial. Young people need to be told about, and shown, what is available these days outside the school gates. The Secretary of State and his Department must realise that and advise schools that careers advice is crucial to young people’s futures. Perhaps even more importantly, it is crucial to the economy of this country, because if we do not train people for the jobs of the future, we will all go down the pan.
Emily Thornberry (Islington South and Finsbury) (Lab)
The autumn statement showed that this Government’s handling of the economy has been a profound failure. It shows what happens when a Government do not have any plan for jobs and growth. If they do not have a plan for jobs and growth, they come back after two and a half years and say, “Actually, we need another five years,” and if they still do not have a plan for jobs and growth, they will come back after another two and a half years and again say they need another five years, and so it will go on, because borrowing is up and debt is up and economic growth is down. The Government have wasted two and a half years. People simply do not buy it any more. The Business Secretary said that the Government’s credibility hinges on whether or not they eliminate the deficit. After the autumn statement it is clear that the credibility of this Government, supported by the Liberal Democrats, is in tatters.
I want to talk about the poor, because my poor constituents believe they are being punished for the failure of this Government and their reckless welfare reform. I also want to talk about the rich and how they are being let off the hook—again, that is because of the Government’s failure to make sure we collect all the tax we are owed. Why did the Government, when they first came into office, cut the number of tax inspectors by 7,000? The ambition was to cut the number of tax inspectors to an all-time low of 56,100. I remember that I wrote to the Chancellor in November 2010 saying that that would be counter-productive. When the Government are cutting the staff who prevent tax avoidance and evasion, how can my constituents believe that tackling it is a priority? Indeed, in answer to a parliamentary question, the Government admitted that every new tax inspector brings an additional £600,000 a year into the Exchequer.
The Exchequer Secretary to the Treasury (Mr David Gauke)
indicated dissent.
Emily Thornberry
The Economic Secretary shakes his head, but I am just quoting what was said in the Government’s answer to a parliamentary question. He is welcome to intervene if he wishes to correct me.
Mr Gauke
As the hon. Lady has invited me to make this point, I will do so. If someone looks at the number of people working for Her Majesty’s Revenue and Customs in enforcement and compliance—not the other areas; there are a lot of processing jobs—they find that under the previous Government’s plans it fell by 9,000, whereas under this Government’s plans it will increase by 2,500.
Emily Thornberry
The fact is that 7,000 jobs have gone under this Government’s plans, and the gap between what we collect and what we are owed is estimated to be £35 billion, which is twice the housing benefit bill. Independent research commissioned by the Public and Commercial Services Union reckoned that the real figure was more like £120 billion, which is six and a half times the housing benefit bill. Whatever the true sum, the fact is that without a sufficient number of tax inspectors we cannot ensure that the rules apply to everyone. Everyone should pay tax; it should not just be for the little people. Paying one’s taxes should not be some sort of charitable gesture, and I have little understanding as to why it was seen as appropriate for this Government to continue to cut back on tax inspectors. If we are to have rules, they need to be applied. The Exchequer Secretary says that there were many processing jobs, but presumably people in that job need to make sure that the sums add up, that everything has been claimed that should have been claimed and that everything has been paid that should have been paid. Without that essential processing we will never know whether or not tax avoidance has been taking place—this is not just about major companies; it happens throughout the system. At a time like this, we need to make sure that everyone plays by the rules. If everyone does that and if the rules apply to us all and we have a fair society, we have the very one nation that Labour Members have been talking about.
Of course, the rules also apply to those who claim benefits and of course if someone can work, they must work. That is what unites this whole House. What does not unite this House is the language used by Government Front Benchers—the language of “scroungers”. Such language is simply offensive, as the highly eloquent maiden speech by my new hon. Friend the Member for Middlesbrough (Andy McDonald) so well set out. Such language is a smokescreen that covers up a great deal of what this Government are actually doing. Although they talk about scroungers and those who stay in bed, keep the curtains closed and do not go out to work—the remarks are highly offensive—they do not address the issue, which is that many, many people who are out of work want to work, but the fact of the matter is that people cannot go from welfare into work if the work is not there.
Furthermore, many of the changes that this Government are making and announced in the autumn statement will affect those very people who work. I want to go on to address the issue of not just those who are poor and not working, but that of those who are working in my constituency and are dependent on benefits. Sometimes I feel as though I live in a different world where Government Members believe that only those who are out of work claim benefits. In fact, many people who work depend on benefits. Surely that is a conundrum. Many people meet me on the street and say, “How can the welfare benefit bill be going up if a million additional people have got work?” The truth is self-evident. Many people who are now working work part-time or are self-employed rely on housing benefit and tax credits, the very things that the Minister will be cutting as a result of the autumn statement. Let us use the terms that he uses, such as the strivers. Those very strivers are having their support system cut away by this Government. Even in the hon. Gentleman’s offensive terms, that cannot be justified.
I want to talk specifically about housing benefit because the issue affects my constituents particularly. I hear Government Members say, “Why should it be that people on average earnings receive less than people on benefits?” That has a certain ring to it and I know that the Conservatives are out of touch, but surely some of them must know someone who rents a flat and who understands that housing benefit goes not to the tenant, but to the landlord. It is because rents have gone up so much in London and the south-east that the housing benefit bill continues to rise. In the past two years, private rents in London have gone up by 25%, according to London Councils. In those circumstances, how can it be justified to attack housing benefit, to put an arbitrary cap on housing benefit, or to believe that housing benefit should be the same level in London as it is anywhere else in the country? How can that be fair?
It is not the fault of my poor constituents that their rent is high. It is the fault of my Government and of Conservative Governments who did not build enough housing. There was a time when Conservative and Labour Governments used to compete with each other as to how much affordable housing they could build. In the 1970s, four fifths of the housing budget was spent on building new homes and one fifth on housing benefit. Now it is completely turned on its head and we continue to pay the price of failure. We must build more housing and we must not simply dance on a pin, analysing what affordable housing means.
The Minister represents a party that defines affordable housing as costing 80% of market rent. He and his party should get some sort of George Orwellian prize for double-speak. Eighty per cent. of market rent in my constituency could not be afforded by ordinary people in my constituency. I went on to the Rightmove website this morning and looked at the prices of three-bedroom flats in my constituency. Does the hon. Gentleman know how much the rent for a bog-standard three-bedroom flat in my constituency would be? Four hundred pounds a week. How much is the housing benefit cap? Three hundred and forty pounds a week. There was only one flat on Rightmove that was under the amount of the cap so how can people in my constituency, who will be subjected to the housing benefit cap, afford to continue to live in Islington?
There is an argument that the poor should not be living in Islington, but I respectfully disagree. My constituency should be a mixed constituency and should have rich and poor. Generations of poor people who live in my constituency should be allowed to continue to live there. Furthermore, the housing benefit cap is one atrocious measure that this Government have introduced, but we wait for the next, which is universal credit. There will be a cap of £500 a week for a four-bedroom flat in my constituency. There were 69 that were under the £400 current housing benefit—
Richard Drax (South Dorset) (Con)
It is a pleasure to follow the hon. Member for Islington South and Finsbury (Emily Thornberry). I agree with her on one point: everyone should pay tax, but more of that later.
May I pay tribute to those who made their maiden speeches, and welcome them to this place? I remember mine all too clearly; it is a nerve-wracking moment for all of us.
In the eight minutes that I have, I do not want to look back or play the blame game with the Opposition, other than to remind the country of their profligate years, but enough said: we have to look to the future and how we get ourselves out of this mess. Let me go back over some basic principles which, it seems to me—maybe I am getting this horribly wrong—many in the House have forgotten. Baroness Thatcher, a lady for whom I have huge respect and admiration, was brought up, as the House knows, in a grocer’s store. Her economic principles, like most of her principles, were very simple and on the whole they were sound: “You spend what you earn. You borrow too much and you go broke. Eating into capital is the road to ruin.” She believed in a light-touch, low-tax Government.
We had the chance to be radical when we came to power, but regrettably, linked to the Lib Dems as we are, that was never going to be a reality. Taxes, both business and personal, remain at punitive levels. They curtail incentive, reinvestment, aspiration and jobs. Employers’ national insurance contributions are a classic example. I run a business, albeit a small one, and pay nearly 15% for each person I employ. That is madness, and it is certainly not based on Conservative or free-marketeer principles. My advice to those on the Government Front Bench is to scrap employers’ national insurance contributions if they want to see unemployment fall and businesses thrive.
The deficit is down, which I welcome, but borrowing is rising, as we have heard, and state expenditure remains unacceptably high, with savings in real terms at negligible levels. So we print more and more money—it is called quantitative easing—tons of it, in fact, and down the plug it has gone. But at some stage it will spill over into the bath and we will start to spend it. Inflation will rise and interest rates will inevitably have to rise to combat it. At that stage, we will see pain on an unprecedented level in this country.
In the meantime, we pile more and more taxes on the better-off, who already face punitive rates, while those at the bottom are taken out of tax altogether. Why? The hon. Member for Islington South and Finsbury said that everyone should pay their taxes fairly. If we take those on the lower end out of tax altogether, what incentive do they have to put away their rubbish or to contribute to their fire or police service?
Sheila Gilmore (Edinburgh East) (Lab)
The hon. Gentleman’s view of economics seems to miss the fact that when Governments invest, jobs are created, more money comes into the Treasury and less goes out by way of wasteful benefits. What has gone wrong in the last two and half years is that the Government have pulled the plug on investment, which now, rather belatedly, they are trying to put back in a small way. By the way, some people might not be paying income tax, but they are paying council tax towards the very services he has just mentioned.
Richard Drax
Unfortunately, the Government have invested; the hon. Lady is absolutely right. Governments, particularly during Labour’s 13 years in office, invested to such an extent that we are now in the mess we currently find ourselves in. It is not for Governments to play economics; it is for business men and women, entrepreneurs, small businesses and retailers to generate our economy. I hear again and again from people on all sides that the broadest shoulders should bear the biggest load and that we are all in it together. We are not, and we never will be, and we fool ourselves and do a disservice to those struggling to make ends meet if we think otherwise. Let us not forget that the better-off, whether businesses or individuals, play a useful role in our economy. Except for a few notable occasions, they pay tax. They create jobs and buy goods, which generates jobs, and in many cases they take their wealth responsibly and give back in countless ways, so let us stop killing the golden goose.
The simple fact is that we must cut state expenditure. The EU is a classic case. Some £51 million a day goes to that unaccountable, Soviet-style bureaucracy, the same EU that mislays €5.2 billion every year, according to the European Court of Auditors. Yet they want more, and we give it to them. We boast about giving 0.7% of our GDP in overseas aid. Do not get me wrong: I am all for charity, but charity should start in this country, particularly now that so many of our constituents are struggling. Let me give an analogy, the farming analogy, as I call it. If a third-world country needs to learn how to farm, we do not send it millions of pounds that go into the pockets of some genocidal maniac; we send a farmer and we teach them how to look after themselves. How many apprentices, nurses, doctors, hospitals and schools could be looked after if we had all the money that is going abroad?
Let us not forget the defence of our country and our armed services, which are being slashed to an unforgivable level. We have a bloated welfare bill; it has been discussed in this place again and again. Then there is the NHS, where all sides bury their heads in the sand. That bill will go on rising and rising to unaffordable levels. There may be—I am sure there is—another way, but no, we do not do that; we ring-fence it instead.
We need a country where the entrepreneur—the business man and woman—can fly free of red tape, punitive tax rates and burdensome regulations from the EU. In South Dorset, I have a young Marine who has set up a company called Ovik Solutions. He makes armoured vehicles based on old Land Rover chassis. Riot-proof and bomb-proof, they are currently serving in Northern Ireland—120 of them. One can see the white vehicles—they are his. The company is going from strength, from employing two people to 15. Ovik will provide British jobs, based on British engineering and ingenuity, in Britain. How ironic that its inspiration, Jaguar Land Rover, is now owned by India and production is moving to China.
What lessons have our Government learned? Here we are, on our knees, and what do we do? We appoint the right hon. Member for Twickenham (Vince Cable) as the Business Secretary. This man is no friend of business; he is a friend of those who say “Tax, and tax, and tax, and tax.” We do not need a man of that ilk in charge of our business.
Another crazy move, brought in by the Opposition when in government, involves our brewing industry. I am of course talking about the beer duty escalator—it is absolutely mad; jobs are going in their scores every year—and it is possible for no other reason than that people like to drink beer. This is a home-grown industry that we are singularly doing an awful lot to destroy.
What must we do? We must deregulate, we must lower taxes, and we must cut state expenditure. Yes, there will be pain—of course there will—but I am convinced that in the longer term, if the private sector is allowed to flourish, as it has done, much to this Government’s credit, with the creation of 1 million new jobs, then we, and it, will create the wealth and the jobs that we need.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
May I say what a pleasure it is to follow the maiden speeches by our new colleagues, my hon. Friends the Members for Rotherham (Sarah Champion), for Croydon North (Steve Reed), and for Middlesbrough (Andy McDonald)? I think that I speak for everyone on the Opposition Benches when I say that they were superb contributions and that the arrival of six new Labour MPs, in all, has given us a tantalising glimpse of what life will be like in 2015 when Labour again has a parliamentary majority.
There is no doubt that the economy is the defining issue of this Parliament and that the deficit reduction plan is the defining measure by which this Government will be judged. In that context, last week’s autumn statement showed us that it is shocking how far they have fallen short, on the basis of their own yardstick, in terms of the progress they have made so far. In the emergency budget after the election, the Chancellor told us that he would need, first, four and then five years to sort the deficit out. He said that we could not afford to do it any slower and ease the pain, as Labour wanted. He said that it would be painful but it would be worth it. Last week, two and half years in, with hundreds of thousands of people made unemployed and the stripping out of the Army, the police, council services and everything else, he told us: “I need another five years.” He told us that we have almost nothing to show for the pain our constituents have endured so far.
Whether people are supporters of the Chancellor or not, the fact is that every time he comes to the House to report on his progress, he has to tell us that the economy has not grown as he had hoped since the last time he was here; that he is planning, more often than not, to borrow more than the last time he was here; that spending on public services will be cut more than the last time he was here; and that future growth will be less than he expected the last time he was here. Crucially, we now know that without the Treasury’s accounting tricks, borrowing would be higher this year than last year. This is a Chancellor who has failed, but it is our constituents who have to pay the price of that failure.
Lisa Nandy (Wigan) (Lab)
Austerity has wreaked havoc in areas such as Wigan precisely because the public and private sectors are so interdependent. The huge cuts to the public sector have had an appalling impact on the private sector as well. Does my hon. Friend share my disappointment that the Chancellor has refused to acknowledge that and refused to change course, as we have urged him to do? Having listened to the hon. Member for South Dorset (Richard Drax), it seems to me not only that the Government refuse to acknowledge that, but that they simply do not understand it.
Jonathan Reynolds
I completely agree. It is self-evident. The economy has grown by just 0.6% in the past two years and this year it has shrunk by 0.1%, with talk of the UK yo-yoing back into recession for the third time as the recovery continues to falter.
Without any significant growth, the Chancellor will fail to meet his own targets. Borrowing is only lower this year because the Chancellor has included on the balance sheet the £3.5 billion from the auction of 4G. That would make sense if the 4G mobile spectrum had indeed been sold for that amount, but the auction has not taken place yet. That means that the Chancellor has balanced the books with money that he simply does not have. If I asked my bank manager to accept that I had paid off a chunk of my mortgage as long as she factored in the sale of my car, but that I had not actually sold it yet, she would laugh at me. We should be no more convinced by the Chancellor’s actions.
Without the addition of the estimated windfall from the 4G auction, borrowing this year would actually be £2 billion higher than last year. Despite the promises that the austerity measures would stabilise the economy, this year the Government will borrow more—£212 billion more—than they had planned. Coalition MPs frequently warn us of the dangers of borrowing too much, but they never seem keen to take their own medicine. The Government’s deficit reduction plan is not working and it is simply mismanagement to pretend otherwise.
Deficit reduction is not the only promise that the Chancellor has broken. As well as telling us that austerity would be the solution, he famously promised that we are all in this together. We are not all in this together. The Government have given a £3 billion handout to the richest people in the country, yet a family with two children where one parent earns a relatively modest income of, for example, £20,000 are the ones who lose out.
Furthermore, the Government’s claim that the 50p tax rate meant that millionaires fled the country does not stand up to scrutiny. A simple look at the figures shows that the overall number of taxpayers remained almost unchanged between 2009-10 and 2010-11. Following the introduction of the 50p rate, there may have been a deterioration in declared incomes above £1 million, but that was without doubt the result of the wealthy forestalling their income from one tax period to another. The Government should have kept the rate for the next tax year to ascertain exactly what it brought in, because, goodness knows, we needed the money.
It is the same unequal story right across the country: it is Labour-run councils, particularly those in the north of the country, that bear the brunt of the cuts. On average, Labour-run authorities have seen their budget cut by £107 per person, which is three times higher than the figure for Conservative town halls. Councils will not receive detailed information for their 2014-15 budgets until later this month, but nationally they know that they will face cuts of £445 million in that financial year. Councils such as Tameside face an anxious wait to see whether that reduction will be applied equally or whether councils such as ours will again have to suffer disproportionately.
The situation in adult social care in particular is of great concern to me. I meet people in my surgeries who are in severe need of help, but simply not enough money is provided for social care in this country to meet that need. I have met people with caring responsibilities for adults and children who have told me of their sheer desperation at the prospect of their respite care being taken away. We need to do something urgently to properly support those people.
On unemployment, in my constituency 10 jobseekers are now chasing every advertised vacancy. A good portion of them are over 50 years old and starting to wonder if they will ever work again. Long-term unemployment is rising across the country and nearly 1 million young people are out of work. That is the principal cause of the Government’s borrowing problems and the OBR forecasts that the claimant count will continue to go up.
The Work programme was the Government’s attempt to get people off welfare and into work, but a successful welfare-to-work programme is not possible if there is no work available. According to the Government’s own statistics, just two out of 100 participants were still in work after six months, which means that the chance of getting a job was higher if people did not take part in the scheme. Members should contrast that with the success of the future jobs fund, run by the previous Government and spearheaded by the former Member of Parliament for Stalybridge and Hyde, James Purnell. Unlike the job-hunting support offered through the Work programme, the future jobs fund provided six months’ real work for every participant. It also had long-lasting results: in Tameside, half of those who took part went on to secure permanent employment. Of course, if we are to cut the deficit, we need to get people back into work—that is vital—but the turnaround is not just about the nation’s finances; it is also about an individual’s pride. I therefore urge the Government to look again at the success of the future jobs fund as they try to move forward from the failure of the Work programme.
For those who want to work, but have been failed by the lack of jobs and the impotence of the Work programme, there was even worse news last week. The Chancellor announced that they will be made poorer in real terms because their benefits will not be increased in line with inflation. That will cause hardship not just for the unemployed, but for a great many people in work. We heard today in Treasury questions that the majority of the people who will be affected are in work.
If that had been done as part of the Chancellor asking us to tighten our belts, it would be one thing, but the autumn statement in its totality represents a net giveaway for the next three financial years. It was not the Chancellor asking for more from the British people. The Chancellor can afford a tax cut for millionaires and a cut in corporation tax, but he asks people who get out of bed and go to work on low wages to pay for it. That is a disgrace.
The autumn statement is proof that the economic policies of the Conservative Government are simply not working. We cannot cut the deficit effectively unless the economy is growing, and the Government are not doing enough to foster economic growth. Today, while we talk about taxes, growth, double dips and triple dips, let us not fall into the trap of thinking that this is a debate purely about numbers; this debate is and should be firmly rooted in the increasing struggles of the people we all represent: the growing number of people who are accessing food banks, those who are choosing between eating and heating, and those who live with the fear that their homes may soon be repossessed. Those people are the economic reality of our country and we owe it to them to run our economy better than we are doing at present.
Frank Dobson (Holborn and St Pancras) (Lab)
As one of the ancients, I must say that I was heartened by the maiden speeches of my hon. Friends the Members for Middlesbrough (Andy McDonald), for Croydon North (Steve Reed) and for Rotherham (Sarah Champion), who brought a great deal of cogency and compassion to the debate. I look forward to their participating yet more.
I have been struck, yet again, by the extent to which the thinking of Conservative Members is utterly dominated by the myth of the Thatcher legacy: that she transformed the British economy and that it was saved from ruin through competition, deregulation and privatisation. One can expect Tories to think that, but a lot of commentators in the newspapers and on television and radio clearly take the same view. It is entirely erroneous. The annual economic growth under Mrs Thatcher was exactly the same as that under the Governments of Jim Callaghan and Harold Wilson who preceded her.
But Mrs Thatcher had no excuse. The windfall takings from privatisation and North sea oil amounted to £155 billion. Practically every other country in the world that had such a windfall established a sovereign wealth fund to be invested over a long period. Instead, these Tories who claim to be careful with money blew the lot.
Frank Dobson
No, I shall not give way for the time being because I cannot make up my mind whether the hon. Gentleman is here or not.
The hon. Member for Burnley (Gordon Birtwistle) ought to remember that Mrs Thatcher abolished apprenticeships. She did not invest in research, improving engineering, infrastructure or retooling British industry. Her real legacy was to introduce the almost total dominance of banking and finance into our economy. What a decade and a decade and a decade we got out of that!
The bankers’ bonus has become one of the greatest scandals of all time. The British Bankers Association, the trade group of these respectable bankers, actually ran the LIBOR rate rigging so that people could make money. The payment protection insurance scams were intended to make money—they were not a charitable effort. Barclays was involved in the LIBOR scandal, in the PPI scandal and in sanctions busting, and it managed to lose £7 billion in the crash. Its auditors, PricewaterhouseCoopers, apparently did not notice any of that. It should have noticed, because the bank was not involved in those things as a charity; it was getting a percentage of every transaction and one would have thought its auditors might have spotted that.
The magnificent HSBC was involved in the LIBOR and PPI scandals, and we now know it was involved in sanctions busting in Iran, Burma and North Korea. It has been involved in the financing of gunrunners and in money laundering from drug barons in Mexico. To facilitate the Mexican drug barons it opened not six, 60, 600 or 6,000 but 60,000 secret accounts for Mexicans in the Cayman Islands, and it received a percentage from each. HSBC was not in it as a charity; it was in it to get money.
Presumably, some of the bankers were paid bonuses for the profits they made from sanctions busting, gunrunning and money laundering, yet HSBC, the former masters of the universe, lost £27 billion in the crash and its auditors, KPMG, did not get a sniff of it—not a thing. That is a disgrace and is damaging our economy and the reputation of British businesses trying to get work abroad. People say, “Have you got one of these dodgy auditors? Have you got a dodgy banker on your team? It’s not very helpful if you have.” That is a real problem.
To make up for the mess that the bankers caused—and continue to cause—ordinary people in this country are expected to skimp and save. My hon. Friend the Member for Islington South and Finsbury (Emily Thornberry) shares the problem I have in my constituency of housing benefit. She will, therefore, be familiar with stories such as that of the woman who came to my advice service on Friday and lives in a council flat that was sold under the right to buy. She is expected to pay £485 rent to the private landlord who now owns that flat, but has been told that her benefit will come down by £160 a week, meaning she can no longer live there. Perhaps more importantly—even to decent, what used to be one-nation Tories—her nine-year-old daughter who is doing well at primary school will not be able to live in that flat any more, and neither will her 19-year-old son who is doing an apprenticeship. They will be driven out under what I first described—I know the Deputy Prime Minister does not like this description—as a policy of social cleansing.
The chair of the Tory party—when he isn’t Mr Green—says that people should not be able to live in places they cannot afford, but what about the people in my constituency who sweep the streets, keep the hospitals clean, work as nurses, drive buses and make the city work and a civilised place? They are exactly the people who are being driven out by the benefit changes, and I hope to God my party will vote against them.
Ms Margaret Ritchie (South Down) (SDLP)
I begin by congratulating my hon. Friends the Members for Rotherham (Sarah Champion), for Croydon North (Steve Reed) and for Middlesbrough (Andy McDonald) on making their maiden speeches today.
I commend the Treasury for coming to its senses and cancelling the proposed increase in fuel duty. It seems there is at least some acknowledgement of the need to encourage growth in the economy rather than cut a path to perpetual stagnation. The move will put money back in people’s pockets, encourage local businesses and hopefully spur growth in the local economy, particularly in rural areas. Social Democratic and Labour party Members called for that measure, like many of our colleagues from other parties who take their seats in the House of Commons.
However, that was a brief moment of hope in an otherwise dismal autumn statement. Statistics show that this is the slowest recovery from a financial crisis in history. The OBR downgraded growth to minus 0.1%. Since the statement, the City of London has cast doubt on the Chancellor’s assertions that the economy will return to growth next year, stating that falling revenues from North sea oil and poor manufacturing figures could push the UK into an unprecedented triple-dip recession.
In the light of that, the only commitment the Chancellor will have no problem meeting is his promise to extend austerity until 2017-18. The only reason the borrowing figures look slightly healthier than expected is the sleight-of-hand, last-minute inclusion of the 4G spectrum auction windfall. On that topic, will the Chancellor or the appropriate Minister confirm, as I was told in response to a written question recently, why Northern Ireland will not receive Barnett consequential funding as a result of that sale?
Against such a backdrop, it is hard to see how anyone could argue that the Chancellor’s economic strategy is bringing the economy back to a position of strength. Quite simply, austerity is not working, including for people in Northern Ireland.
David Simpson (Upper Bann) (DUP)
At the beginning of the hon. Lady’s speech, she mentioned the cancellation of the 3p increase—it is a good thing the Chancellor did not go ahead with that because it would have had a detrimental effect on the domestic user. Does she agree that one way to help the Northern Ireland economy would be for the Government to get to grips with smuggled fuel from the Irish Republic, which loses them tens of millions of pounds?
Ms Ritchie
I thank the hon. Gentleman for his intervention. Like him, I believe that fuel laundering and smuggling is a major problem. It needs to be addressed by the Treasury, and by the Department of Finance and the Revenue Commissioners in the south of Ireland.
We have record youth unemployment in Northern Ireland, and local businesses face a climate of extremely low consumer confidence and no prospect of growth. We had the highest rate of youth unemployment in the last quarter for which figures are available—some 18%. More recently, we heard the terrible news of the closure of Patton, a major construction firm, with the loss of more than 150 jobs.
The Government have spoken repeatedly of rebalancing the economy, but talk of their flagship policy—the devolution of corporation tax—was notable only by its absence from the Chancellor’s statement last week. It is critical that the Northern Ireland Assembly and Executive are granted more economic levers that we can use to rebuild our economy. The Government’s decision has been a long time coming, but it is crucial for our medium and long-term planning that they make it as soon as possible.
The Chancellor listened to our concerns about the adverse impact of the carbon floor price and the exemption will deliver a degree of much-needed support to local business. However, such news does not remove the reality of the broader economic picture. As the Northern Ireland Finance Minister has indicated, the result will likely be more cuts being implemented by the Northern Ireland Executive, particularly with regard to welfare payments.
Dr William McCrea (South Antrim) (DUP)
I commend the hon. Lady for her speech. Does she agree that banks need to be more sympathetic in lending to small and medium-sized businesses if they are to prosper, because of the challenges they face?
Ms Ritchie
I thank the hon. Gentleman for his intervention. I agree that the banking regime in Northern Ireland is stringent at the moment. We have a unique situation in Northern Ireland. Some of the banking institutions are owned by the south of Ireland, but some have direct links to the Royal Bank of Scotland and Danske Bank. So there is that sort of mix as well. Suffice it to say that small and medium-sized enterprises are facing difficult economic challenges, and to have banks unwilling to lend or provide the necessary credit at this difficult time is not helping economic growth. That needs to be explored by the Treasury and, in the case of Northern Ireland, in some instances, directly with the Department of Finance in Dublin.
Jim Shannon (Strangford) (DUP)
Does the hon. Lady think that one way of boosting the economy would be to encourage the construction industry, which, as all Members know, has had particular problems? Does she think that the banks should be more sympathetic to the construction industry in particular?
Ms Ritchie
I agree that the construction industry, along with agriculture and tourism, is a vital economic lever in Northern Ireland, but, owing to the economic challenges of the recession, many people employed in the construction industry have found themselves without work and many businesses have gone to the wall. They did not meet with a sympathetic reception from the banking institutions, but they need assistance because they are necessary to pump-prime our local economy.
The Chancellor’s welfare plans will remove more than £4 billion from the welfare budget by uprating benefits by just 1% a year until 2015. With a legacy of physical and social neglect from the troubles, this will remove the necessary level of support from many of our people and a substantial sum of money from the local economy. Instead of addressing their own shortcomings, the Government are vilifying the poor and those on welfare as a smokescreen for their own appalling economic record. That will place those most needy and vulnerable in the current economic climate in an even more precarious situation and will hurt not just the unemployed, but those who rely on in-work benefits. It is nothing more than a real-terms cut for those most in need by the same Chancellor who handed out a tax cut for the wealthiest in society at the last Budget. It would seem that some of us are more “all in this together” than others.
The autumn statement might have been politically more surefooted than the Chancellor’s last Budget, but I fail to see what it will do to address the core problems facing the economy. It might reassure some Tory voters here, but I do not think that my constituents or the people of Northern Ireland will find much to cheer about. I fear that we will be having this same debate, with similarly poor economic figures, come the next Budget.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
I congratulate my hon. Friends the Members for Middlesbrough (Andy McDonald), for Croydon North (Steve Reed) and for Rotherham (Sarah Champion), who gave three excellent speeches and demonstrated the great capabilities and talent coming into the parliamentary Labour party and which we hope to see more of in 2015.
The economy has been weakened by poor decisions by the Chancellor leading to declining growth, so borrowing is higher, which means that the public debt is worse. While public spending totals are similar to those in the March Budget, tax revenue forecasts are far more pessimistic. The Office for Budget Responsibility suggests that by 2015-16 tax receipts will be £662 billion instead of £692 billion. That is a 4% overestimation, as corporation tax, income tax and VAT at 20% have not brought in and will not bring in the tax take expected. That £30 billion shortfall translates into a £30 billion rise in public sector net borrowing.
In every year except 2012-13 borrowing is higher, and the gap grows over time. This year’s figures are flattered by the £3.5 billion sale of the spectrum for 4G, which is yet to occur, and by the £5 billion tax deal with Switzerland. Let us look at the Chancellor’s much lauded
“largest tax evasion settlement in UK history”.
It is anticipated by the Chancellor to bring in more than £5 billion over the next six years, although the OBR described that clearly as “highly uncertain” because of the lack of information about the value of the assets held by UK citizens in Switzerland. Indeed, the Treasury has stated:
“The final stage of the ratification process is expected to be concluded shortly, but there remains a possibility that the Swiss government will have to hold a referendum on the agreement… This is therefore a significant fiscal risk to the forecast.”
The Treasury added:
“The estimated revenue raised by this measure is also highly uncertain as there is little hard information about the value of UK individuals’ financial assets in Switzerland, and how these individuals will respond to the policy.”
Apart from those settlements, by 2015-16 three years of higher borrowing will push up public sector net debt by £67 billion, or 4%. The Chancellor’s own rules state that public debt as a share of national income must fall by 2015-16. To pass that test, the growth in public debt must be lower than growth in cash or nominal GDP.
In March, the OBR massaged its nominal GDP growth forecast up to 5.7% in 2015-16 alone, in order just to exceed the 5.3% rise forecast in public sector net debt. Now the OBR has slashed its GDP growth forecast for that year to 4.6%. No matter how much the Chancellor likes to fudge and fiddle the figures, he cannot massage down the 5.9% hike in debt forecast by the OBR for 2015-16. The chances of his meeting the terms of his own debt rule have taken only two and a half years to be completely destroyed by the growth-strangling policies he now wishes desperately to reverse, as we saw with the U-turn on capital allowances. The Chancellor says he has missed his debt rule by a fraction and that he will retain the 2015-16 debt target, even though it will now be impossible to hit.
The public finances are now difficult to compare with those under previous Budgets because the statistics are affected by large transfers of cash or classification changes. In fact, the Chancellor’s raid on surplus funds sitting in the Bank of England originates from his quantitative easing programme. The OBR says the surpluses are temporary, so although the Chancellor’s cash grab flatters headline public borrowing figures by some £12.3 billion in 2013-14, future Governments will have to repay the Bank of England an estimated £6 billion to £7 billion in 2021-22 for this Chancellor’s record purchasing of our own bonds. Without that cash grab, the Chancellor would have broken not just his fiscal rule—which he clearly has—but his debt target for 2016-17 and his deficit promises.
Here we are, going into 2013, and all the Chancellor can say is that we need another five years to deal with the deficit problem. That is exactly the same statement he made in June 2010—a stagnant sentence for a stagnated economy, stifled by a part-time Chancellor. This is an autumn statement following autumn statements and Budgets for the last two and a half years, all of which have failed to meet any of the stated aims of the Chancellor’s original objective. Two and a half years later, we are still five years away from the total eradication of the deficit. This Government will have accrued more debt in five years than in the entire 13 years of Labour’s rule. Under this Chancellor’s watch, in 2015 the UK will unfortunately hold the worst public sector net deficit in the west, according to OBR and IMF figures.
Was the autumn statement a growth strategy? No. Is this a deficit and debt-reducing strategy? No. Is this a strategy for borrowing? Yes it is, and on the backs of the low and middle-income workers—borrowing for failure, not for investment.
Tom Blenkinsop
I am sorry, I will not.
Can the Chancellor guarantee that we will borrow at a low interest rate because we will still have a triple A rating? No. The very cornerstone on which this coalition is premised has been utterly flawed. As a result, a recovering economy in May 2010 has been so damaged that we have witnessed a double-dip recession, with the strong likelihood that it will become a triple-dip recession—something that the Secretary of State for Business, Innovation and Skills had to admit only this Sunday was a distinct possibility. In essence, the Chancellor is on the brink of exchanging the triple A credit rating he inherited from Labour—and which he prized most of all—for a potential triple dip of his own making.
Mr Michael Meacher (Oldham West and Royton) (Lab)
I cannot help but begin by noting that, with nearly two hours to go, there is not a single Tory MP rising to defend the Chancellor’s policies. That speaks for itself—I cannot remember the last time it happened.
Mr Meacher
No, I am not going to give way; I have not even started. I am just observing what has happened.
I congratulate my three new hon. Friends the Members for Middlesbrough (Andy McDonald), for Rotherham (Sarah Champion) and for Croydon North (Steve Reed) on what I thought were quite remarkable speeches—confident, informed, quite amusing in places and committed. When I first came to this House—a long time ago—new Members took their listeners on a tour of their constituencies, touching on the buildings, the people and the history, but saying nothing about politics. That was not the protocol. I am glad that that rule has gone. We heard passionate speeches today that were all about politics, including the national health service, child care services and the defence of the unemployed. I think that all three of my new hon. Friends will make a big contribution to this House.
Richard Drax
I do not want to touch on the economy, but may I just say that if what the right hon. Gentleman has just described was indeed the case, is it not rather sad that that protocol was not observed?
Mr Meacher
I obviously made a mistake in giving way to the hon. Gentleman.
As the Chancellor acknowledged, he had two main objectives in his autumn statement/mini-Budget. One was to generate the growth that has certainly eluded him for the past two and a half years; the other was to rebalance the economy and lay the foundations for genuine, sustainable, long-term growth. He failed miserably on both counts. On the first test, the International Monetary Fund, the OECD, the Federation of European Employers, the CBI, the British Chambers of Commerce and the Federation of Small Businesses have all been telling him that he simply must inject growth into the economy and stop endlessly hacking away at public expenditure. Just how desperately such actions are needed is shown by the fact that the Chancellor’s own forecast in his 2010 Budget that cumulative public sector net borrowing over the next four years would be £322 billion has now been increased to a staggering £539 billion. That is an increase of £217 billion. The key point is that that increase is almost wholly attributable to the failure of the economy to grow. That is the significant point behind this debate.
Mr Meacher
I will give way to the hon. Gentleman, because he was kind enough to give way to me at the end of his speech.
Kwasi Kwarteng
I am glad to see that some courtesies are still observed in the House. Does the right hon. Gentleman accept that this country and this Government have a problem with current spending levels, or does he believe that we can carry on increasing spending indefinitely?
Mr Meacher
Of course I believe that there is a problem with the level of debt and the level of the public sector deficit; everyone accepts that. The issue is how it should be dealt with. I believe that the way this Government are dealing with it is profoundly self-defeating.
The Chancellor has failed in the sense that, according to the OBR, despite an output gap that remains incredibly high at 3.7%, the net effect of all his measures in the autumn statement will be to raise the general growth rate by a footling 0.1%. That is an extraordinary judgment on the Chancellor.
The Chancellor also failed his second test, which was to shift the economy on to a more sustainable long-term footing, moving away from his over-dependence on finance—a move we all agree with—and towards a much stronger industrial and manufacturing base. Eighteen months ago, he announced with great fanfare the march of the makers. That never happened, however. He has now promised a £40 billion guarantee for private infrastructure investment, but the problem is not one of too little credit; it is one of too little demand for credit. The latest figures show construction plummeting ominously, largely because of its great dependence on the public sector, which the Chancellor is shrinking. Moreover, UK manufacturing will this year suffer the biggest deficit in traded goods in its entire history—a deficit of roughly £110 billion, or 7.5% of gross domestic product. That is utterly unsustainable, and if that trend is not reversed, it will inevitably lead to an almighty crash in British living standards before long.
Mr Meacher
I will not give way again, as I do not have much time left.
Why is the Chancellor not meeting his own tests? It is because he is obsessed with a neo-liberal ideology that forbids any public sector lead role in the economy. In fact, the Chancellor is crucifying Britain today on a cross of dogma. What should a sensible steward of the British economy do now? He should do two things: reinstate the capital spending programmes cancelled in the great drive towards deficit reduction, with special priority given to house building, energy and transport renewal and green technology; and set up a national investment bank with its own portfolio of investment projects, focused on key infrastructure and cutting-edge technology.
How will that be paid for? There are three options. Instead of any further £50 billion tranche of quantitative easing being used to consolidate bank balance sheets, as has happened every time up till now, the Chancellor should divert at least a portion of it towards generating 1 million or more jobs by investing it directly in industrial and manufacturing projects. Or he could levy a capital gains tax charge—I know that this would not be welcome on the Government Benches—on the colossal gains made by a minuscule proportion of the mega-rich, which The Sunday Times, a Murdoch paper, believes to have been in the order of £155 billion in the past three years. Or he could justify—yes, I think he could—a temporary increase in borrowing, of, say, £150 million to raise £30 billion at an interest rate of 0.5% on the reasonable grounds that with such a weak economy but cyclically adjusted net borrowing forecast at only 3% this year, he has given himself enough leeway to delay tightening. Those are the three options, and not to do any of them is a culpable negligence for which he will not be forgiven.
On the Chancellor’s second objective of rebalancing the economy, several measures need to be taken urgently. First, British manufacturing clearly needs a larger flow of qualified skilled workers. The academic underpinning of the STEM subjects—science, technology, engineering and maths—should be steadily increased; a viable and effective post-14 vocational route, with a much stronger work component, should be established in schools; and employers should be made to take responsibility for on-site training. Secondly, the bane of short-termist bank lending to British manufacturing must be tackled by giving incentives to develop a long-term ongoing relationship between banks and their customers, as is done very successfully in the German Mittelstand. Thirdly, the supply chains, which are crucial to any successful manufacturing economy but which have been broken up by privatisation and foreign sell-offs over the past 30 years, urgently need to be restored to achieve a secure base for SMEs. Fourthly, the sacrifice of key industrial sectors and companies to uninhibited acquisition in the international markets—Pilkington, P&O, Corus, BT, O2, Smith Electronics, Cadbury and BA; it is a very long list and a laissez-faire policy that no other major country in the west would ever allow—should be reversed if Britain’s economy and its survival are to be secured.
All those things need to be done, because the alternative under present policy is semi-permanent continuation of a condition of semi-slump.
George Freeman (Mid Norfolk) (Con)
It is pleasure to rise and to prove the right hon. Member for Oldham West and Royton (Mr Meacher) wrong through my passionate defence of the Chancellor, not that he needs it, and my welcome for the autumn statement.
I am old enough to remember the 1970s and when the economic history of that period is written, I think it will be rather simple: in 1979 a Conservative Government inherited bankrupt public finances and put them straight with an enterprise economy. A Conservative Government sorted out the mess of the European currency-inspired recession of the early 1990s and gave the future Labour Government a golden legacy in 1997. After two years of sound public finances following the previous Conservative Administration’s public spending commitments, the previous Labour Government embarked on an unprecedented spending spree—a boom disguised under various labels, such as cool Britannia—that left this generation with an historic debt legacy for which we, our children and our grandchildren will be paying the bills for many years to come.
Sheila Gilmore
One of the problems with the hon. Gentleman’s retelling of history is that the Labour Government paid down national debt so that it was lower after the first few years of that Government than it had been at the end of the previous Tory Government.
George Freeman
I am grateful for that intervention. If the previous Labour Government paid down the debt, why have we inherited this historic debt legacy—a legacy, it is worth reminding the House, that sees us paying debt interest payments that are set to rise to £76 billion a year, which is more than the amount spent on more than three Departments? This is a historic legacy, for which the Labour party should be ashamed.
Kwasi Kwarteng
I was wondering what my hon. Friend thought about the fact that the previous Labour Government ran consistent deficits from 2001 to 2007—even while the economy was growing.
George Freeman
My hon. Friend makes an excellent point, principally about the structural deficit. The public are not daft: they know the difference between a Government who spend more each year than they receive and one who wilfully disregard the underlying causes of the deficit, which were and still remain for us to tackle—the problem of an ageing society for the NHS, the public sector pensions bill and the out-of-control welfare state. I shall say something shortly about the Government’s important reforms in that regard.
I welcome this autumn statement, which begins the process of tackling once again the toxic debt legacy left to us by the Labour party. I welcome the fact that a Conservative Chancellor in a coalition Government has been able to deliver substantial savings—£33 billion in the welfare budget, £60 billion savings in interest repayments and £70 billion savings on the cost of government in Whitehall—allowing us to create the incentives for work, taking a million of the lowest-paid employees out of tax altogether, raising the tax threshold and abolishing Labour’s planned fuel duty rise, with the net result that over the last two years we have seen the creation of more than 1.2 million net new jobs in the private sector.
Frank Dobson
Does the hon. Gentleman not think it rather odd that the Government are unprepared to give any estimate of how many of those “new private sector jobs” are ones that have been outsourced by the public sector? Has it not been estimated that even in the field of further education, the total approaches 200,000?
George Freeman
I am grateful for that intervention because it gives me the chance to make the fundamental point that Labour Members seem constantly unable to grasp—that every penny they spend from this Dispatch Box is money that has to be taken off this country’s citizens in tax, and that they will receive it only if it is earned by the private sector. It is the private sector that ultimately earns the money that the public sector spends. This Government’s rebalancing programme to restore our public finances will allow us once again to spend on the public sector sustainably with moneys earned by the private sector. That is one of the most crucial and important reforms made by this Government, and I welcome it.
Yes, the Office for Budget Responsibility has made clear what the Chancellor has consistently said—that this will be a long a fragile recovery and that it has been made worse by the crisis in the sclerotic eurozone, with the debts of the 2008 recession now being clearer than they were at the time. That has become clear not least because we now have the OBR—another of this Government’s important reforms—putting some transparency and honesty at the heart of Government statistics. That is not always comfortable, but it is an important—
George Freeman
No, I have already given way to the right hon. Gentleman.
Of course we are in the process of a long and slow recovery, but the evidence—in terms of new jobs, the data on private sector growth, and the business community’s strong support for this statement and the measures previously announced by the Government—suggests that the policy of rebalancing the economy is right and working. We must have an economy that is led by the private sector. We need to do more to support industry and the knowledge economy, which this Government are doing, and we need to do more to support regional growth outside Greater London and the south-eastern area.
It is an irony of the last Labour Government that, despite preaching the language of regional economics, what it came down to was a vast tax transfer through the regional development agency structure. In my own field, more than £15 billion was spent on business support, but according to the Richard report, only 0.5% of that was received by businesses on the ground floor, as it were. The last Government embarked on a major boom in regional spending, but it was not sustainable. One of the sadnesses of this crisis is that many of the people who were offered jobs during that boom in the public sector are paying the price now. That is not their fault; it is the fault of those who were running the economy at the time, and I for one am waiting for them to say sorry.
The net growth figures are low at present, but that disguises a very important and profoundly positive change. We have rightly taken money out of the public sector in order to rebalance the economy and bring our public finances under control. The fact that the net growth figures are positive is a sign of the profound growth that is beginning to happen in the private sector, and which bodes well for our public finances in the long term.
I welcome the Government’s plan A-plus, which is intended to restore our public finances and get the deficit under control, and I welcome the fact that the annual deficit is now down by 25%, although there is more to be done. The plan is also intended to free up money to be invested in infrastructure. More than £20 billion has been committed to infrastructure projects that are long overdue, and last week £600 million of extra investment in science and the knowledge economy was announced. I shall say more about that in a moment. The truth is that we need a plan A-plus plus plus, but we do not need the plan B espoused by the Opposition. That B stands for borrowing, it stands for the bankruptcy of our public finances, and it stands for Balls.
Nigel Adams (Selby and Ainsty) (Con)
My hon. Friend said earlier that he remembered the 1970s. I wonder whether he remembers the late 1960s, when Viv Nicholson, the pools winner, said that she would “Spend, spend, spend.” She eventually went bankrupt. Does my hon. Friend agree that even she would be embarrassed by the Opposition’s approach to spending and debt?
George Freeman
My hon. Friend has made an excellent point. One must choose one’s advisers carefully. When taking advice from rock stars, one should listen to the music, but not spend accordingly. “Spend, spend, spend” is exactly what the last Government did, and we are all paying the price now.
I entered the House after a 15-year career starting companies in the life sciences sector—which involves some of the most exciting parts of the country’s economy: medicine, agriculture and the clean technologies—in Cambridge, Norwich, Scotland and some of the northern cities, and in London. I believe that that sector represents a hugely exciting opportunity for the country as we rebalance our trade away from the sclerotic eurozone and towards the faster-growing emerging nations of the world—some of the BRIC economies, and the “next 11” that were identified by Jim O’Neill in his seminal paper.
Those economies are growing at a rate of 7% or 8% a year, which, compounded over 10 years, amounts to 100% growth. They are the vibrant markets of tomorrow, and we have an opportunity to support them with our knowledge economy and our life sciences. Today that means helping them to develop the basics of public health care, such as nutrition, food security and medicine, but tomorrow they will quickly grow and develop much more sophisticated needs and markets.
The life sciences sector is crucial to our economic recovery and to a sustainable model of economic growth, and I strongly welcome the support for it that has come from the Chancellor and his team. Last week a further £600 million was announced for our science base, which is already paying dividends—in the last year alone, more than £1 billion has been invested in early-stage life science ventures funds in this country—and GlaxoSmithKline has announced a £500 million investment in an advanced manufacturing facility. The strategy is working, and I encourage the Government to stick to it.
I am the Member of Parliament for Mid Norfolk, a rural area which, in recent decades, has been viewed as something of a rural backwater, and has received all too little investment. In our region, the dualling of the A11, the investment in the Cambridge-to-Norwich rail link between the two life science clusters and the £90 million announced recently for support for our research and innovation centres have all been extremely welcome, and are already having positive effects locally. I was in Cambridge on Monday with the Prime Minister, launching the new cancer genomics centre.
There is a spirit of optimism afoot in our region. That speaks for the success of this strategy, which I welcome and commend to the House.
Austin Mitchell (Great Grimsby) (Lab)
It is a pleasure to take part in this debate, during which we have heard three excellent maiden speeches. All of them were very impressive, so it is clear that we oldies will have to pull our socks up. As I listened to the speeches, I abandoned my long-standing hope of reaching the shadow Cabinet, because the competition will clearly be too strong.
However, much of the debate, including the last speech from the Government Benches, has been disappointing, as it has been too much about who got us into this mess and not enough about how we can get out of it. We are undoubtedly in a mess: we have a fiscal deficit; we have a massive debt burden; we are in the grip of deflation; demand is very low; we have just had a double-dip recession and we are heading for a triple-dip; unemployment is far too high; GDP is 4% down on 2008, because, unlike most countries, we have not made up that shortfall; the balance of payments gap is now gaping, standing at 7.5% of GDP; and our manufacturing has shrunk too much to pay our way in the world. By any definition, that is a mess.
The question is: how will we get out of this mess? The Government’s policy shows no sign of getting us out of it. It was described at the start as an expansionary fiscal contraction, which is an oxymoron—more “moron” than “oxy”. Their aims have been impossible to achieve because every increase in unemployment means a reduction in tax revenues and an increase in spending to support misery, and the Government are therefore not cutting debt. The Chancellor says, “We’re cutting debt to keep our triple-A rating.” Such a rating goes to a healthy economy with prospects, which our economy is not, and next year we will lose our triple-A rating. Interestingly, the Government are now saying that that does not matter. We will lose that rating because of the disastrous state of our economy.
The only answer is to have growth. It is a simple way of paying off the debt. The only way to pay off the debt is to get growth into the economy, and the only way to get growth into the economy is to stimulate the economy. A few years ago, President Obama put in a $780 billion stimulus through his national recovery Act. We must have such a stimulus, too—although Labour has been very cautious on that—and it can only be paid for by borrowing. There needs to be more borrowing.
The arguments against borrowing are pathetic. Borrowing has become the fig leaf of the Tory party; it covers any failure, and the failures have been fairly substantial. The Government are obsessed; they have a piggy-banking fear of borrowing. We cannot, however, pay off debt and deflate the economy at the same time.
Where else are we to get this stimulus if not from Government borrowing? Individuals and families are burdened with debt, as are companies. They are not spending; they are trying to pay off debt. Spending and stimulus will come only if the Government borrow more, therefore. There is no problem with that. Interest rates are at record lows, and our credit is good at present, so we can borrow, and we should borrow to spend.
We should borrow to build housing. We should have a big housing drive, and most of it should be public housing for rent. That is what we need, because people cannot afford to buy. We should subsidise jobs if necessary, too. We must borrow, spend and stimulate. That is the only way out.
We need more quantitative easing, which I hope will bring the pound down. The pound is now up 8%. When the Governor of the Bank of England starts saying in his speeches that the pound is too high, it must be horrendously overvalued because no Governor of the Bank of England has said that before. The value of the pound needs to fall, to boost exporting industry.
The Government have been very clever at apportioning blame for the situation the country is in. First, they blamed Labour, although our borrowing was essentially to save the banks, and I am sure the current Government would not have wanted us not to save the banks, would they? If they did not want that, Government Members should say so now. The Government then blamed scroungers lying in bed as the strivers go off to work—that is a very touching picture. They then blamed the size of the benefit bill, which we now gather must be cut still further—although not until 2015, after the election, it should be noted. Now they are blaming the eurozone. It certainly has problems but it must be pointed out that the deflation here and the deflation in the eurozone are both being done for ideological reasons. The ideological reason in Europe is that people do not want to give up on the euro. They cannot afford it to break up, so they have to keep trying to make the unworkable work. That is depressing the European economy, because it is producing deflation in all the Mediterranean economies. That deflation in those weaker economies—the uncompetitive economies—in turn produces a fall in demand for German goods; they cannot afford the BMWs and the Mercs any longer, so Germany becomes depressed. We perhaps feel a touch of schadenfreude about that, but it spreads depression right round Europe.
Our depression is caused by the Chancellor’s ideology and his horror of borrowing. We know how to get out of this recession but for ideological reasons no Government are doing what they should do to get of it. The same is true in the United States, where President Obama is being held back from giving any stimulus and cutting taxes for the mass of the population by the Republican desire to cut taxes only for the wealthy. That has produced the fiscal cliff on which the American economy is now hanging.
So there is no prospect anywhere—no certainty—of expansion, and if there is no possibility of growth and expansion, people and companies are not going to invest. All the pious hopes that the hon. Member for Mid Norfolk (George Freeman) has just given us about a resurgence of companies are in vain, because companies will not invest as there is no prospect of profit and no prospect of success. That is the trap we are all in, and we are there because of piggy-banking ideology, ignorance about real economics and simple bad economics in practice, which is killing growth and blighting the lives of our young people.
What do the Government have to offer at the end of this debate? It is pathetic to see that Government Members have not even bothered to turn up to defend the Government; Labour Members have had to do all the attacking and the speaking, because Government Members have had to be dragged in. All the Government have to offer is more debt, more misery, more cuts—£10 billion to £15 billion of them—and more fracking. This Government are one of the best fracking Governments in the world, holding out great hopes that it will provide a new regenerative miracle. That is all they can offer. What they cannot offer is hope, prospects, improvement, growth.
Mr William Bain (Glasgow North East) (Lab)
Regrettably, the economy is on course for a lost decade under this most paradoxical of Chancellors: reckless on one hand, but complacent on the other; a historian, but with precious little grasp of learning its most obvious lessons; and a tactician, but now pursuing the basest strategy of all in politics—attempting to divide and rule by separating those on middle incomes from low-wage Britain, and the poorly paid from the unemployed. His Conservative predecessors, people such as Winston Churchill, Harold Macmillan and Iain Macleod, would surely recoil in horror if they could they see what this Chancellor is doing to the reputation of the party that once proudly stood for the principle of one nation, but does no longer.
There is no social group that this Chancellor will not exploit for perceived political gain, but he stands exposed in this debate: he has no idea of how to regenerate the missing growth in the UK economy; he has no clue on how to undo the damage he is doing to ordinary families’ living standards and slumping real wages; and he has no concept that his policies on welfare represent no more than a throwback to the worst excesses of harsh Victorian Toryism.
Mr Jim Cunningham (Coventry South) (Lab)
Does my hon. Friend not recall that when Government Members were in opposition, in the good years, as we might call them, they took the credit, but they will not take the credit for getting us into this mess in the bad years?
Mr Bain
I thank my hon. Friend for that. What I do remember is that when the right hon. Gentleman was shadow Chancellor he backed every single penny of the public spending plans of the Labour Government until the financial crisis hit. Indeed, he had the sauce to call them “eye-wateringly tight” on occasion in this House.
What we see is a Chancellor with a plan aimed at winning marginal seats at the next general election at any cost, but bringing in the cruellest sequence of benefit cuts since those of the national Government in 1931 and aiming his harshest measures at the most vulnerable in our society.
Our economy is suffering from the slowest journey out of recession since the 1870s. As a result of the extreme austerity measures that the Chancellor has introduced, it will now take nearly seven years to repair the lost output from this recession, compared with just four years during the great depression in the 1930s. We were told two and a half years ago that a policy of expansionary fiscal contraction would restore confidence, but instead nearly 4% of output has gone, the Chancellor’s supplementary target on debt falling as a share of GDP by the end of this Parliament has gone, and many economists, including at Citigroup, expect the loss of Britain’s triple A credit rating within the next 18 months, the retention of which the Chancellor made his principal criterion of credibility.
No wonder that on The New Yorker website last week, the Chancellor’s policies were dismissed as an example of what the US should avoid—a commitment to the deflationary economics of the 1930s, with the Reaganite trickle-down economics of the 1980s and the even harsher Benthamite economics of the 1830s. Instead of uniting this country in a crusade against long-term and youth unemployment and what Beveridge called the social evil of idleness, this Chancellor wants to divide society by demonising the unemployed in a way that no Government have done since the time of the Poor Law in 1834.
Despite the Bank of England running the loosest monetary policy in several generations and owning three tenths of our national debt through the use of its asset purchase facility, the OBR predicts that joblessness will rise by as much as 340,000 over its forecast period. So we can see that the US economy, having adopted a different policy from the austerity of this Government, yet described by the Nobel laureate Paul Krugman in The New York Times yesterday as
“still, by most measures, deeply depressed”,
has grown nearly three times as fast as the UK, and according to the Congressional Budget Office, will have a deficit next year of 4%, compared with a deficit of 6.1% in this country, and UK debt will be nearly 18% higher in 2015-16 as a share of GDP than that forecast by the OBR in 2010 on the EUROSTAT measure.
Make no mistake, this Chancellor’s policies on taxation, benefits and spending are cutting the incomes of the poorest tenth of households by 2.7%, at a time when the OECD forecasts that we will see barely half the rise in economic demand that will be seen in America next year, and barely a third of that the year after, despite the looming fiscal cliff. Despite the stream of measures unveiled in the autumn statement, the OBR’s verdict on their usefulness was as unerring as it was deadly for the Chancellor’s reputation—just a 0.1% rise in GDP over the next two years, at the same time as the OBR downgraded growth by 1.7% over the same period.
Increasingly, we see that this Chancellor’s legacy will be to turn the long-term prospects of the UK economy into those of a low-wage, low-skill, low-investment and low-productivity economy. On wages, this Government cannot answer positively the question posed by millions of ordinary people across the country: am I better off now than I was four years ago? The Government cannot answer positively the question: am I better off now than I was eight years ago? The reality is that with the median wage across the UK having fallen by a shocking 7.9% in real terms in this Chancellor’s first two years in office, and by 7.4% in Scotland, people are worse off now than they were 10 years ago. The Resolution Foundation, in evaluating the effects of the autumn statement, predicted that real wages in 2017 will be no higher than they were in 1999. This Government have made the wrong choices on who to help at a time of poor consumer confidence and weak demand. When they could have helped households with the cost of child care, which is rising in Scotland by 6% a year, boosted female employment and cut inequality, they decided to hurt the poorest 40% of the public harder, as a share of their income, than they will hurt the richest 10%. Lone parents who are in work and on tax credits, of whom there are 115,000 in Scotland, will be worse off by an average of £300 a year by 2015, according to the Resolution Foundation. Three quarters of the cuts in tax credits will hurt precisely the strivers the Chancellor purports to back.
The Chancellor’s legacy on investment is equally dire. Business investment is now lower than the Office for Budget Responsibility forecast a year ago, with manufacturing investment having dropped by 6.7% in the last quarter compared with a year ago. Despite funding for lending, there is precious little evidence that demand for lending in the economy is rising. Net lending by the banks to small and medium-sized businesses fell by a further £2.4 billion in the three months to August this year, according to the Bank of England.
The Government could have changed course in the autumn statement and acted to stem the £20 billion rise in the benefits bill during this Parliament by getting more of the 1,320 long-term jobless in my constituency back to work by cutting VAT and adopting more active labour market policies than their failing Work programme. They could have bolstered construction and housing by building as many as 100,000 homes across the UK by allocating the 4G proceeds to productive use rather than simply trying to cook the books with them. They could have done that, but they did not. They have let the country down, and that is the legacy not only of the Chancellor, but, sadly, of the entire Government.
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)
I start by thanking my hon. Friends who made their maiden speeches. We heard some excellent contributions, which gives the Opposition hope that when we return to government we will have some extremely good people representing their constituencies. In particular, my hon. Friend the Member for Rotherham (Sarah Champion), who made a very dignified speech, brings a wealth of experience from her background in the children’s hospice movement and will be a great asset to Parliament. My hon. Friend the Member for Croydon North (Steve Reed), who has direct experience of local government, and indeed of a co-operative council, will also bring us experience. We heard a passionate speech on the plight of the unemployed from my hon. Friend the Member for Middlesbrough (Andy McDonald), who talked about his home town and the people he represents. I was particularly interested in his speech because he mentioned two things that are close to my heart: football and art. It sounds as though I ought to visit Middlesbrough in the not-too-distant future.
I should also mention the speeches made by other right hon. and hon. Members, particularly my right hon. Friends the Members for Edinburgh South West (Mr Darling), for Holborn and St Pancras (Frank Dobson) and for Oldham West and Royton (Mr Meacher), my hon. Friends the Members for Islington South and Finsbury (Emily Thornberry), for Stalybridge and Hyde (Jonathan Reynolds), for Middlesbrough South and East Cleveland (Tom Blenkinsop), for Great Grimsby (Austin Mitchell) and for Glasgow North East (Mr Bain) and the hon. Member for South Down (Ms Ritchie). They all demonstrated why there are problems with what the Chancellor did in the autumn statement, and every one of them took the opportunity to make suggestions, to pick up on the problems and to represent their constituents.
When the Chancellor came to the House last Wednesday to deliver his autumn statement, he was clearly determined to have no repeat of the omnishambles Budget that unravelled last time around. He was determined this time to avoid pasties, churches and caravans. There was a bit of hilarity and laughter on the Government Benches while he delivered his statement, but I must say to the Minister and to Government Members that many millions of people across the UK do not feel much like celebrating or laughing because of the bad news the autumn statement brought them.
The hon. Member for Spelthorne (Kwasi Kwarteng), who is now back in his place, having been removed to the naughty step for a period of time, talked about the gravity of the situation. I am not sure that he really understands the gravity of the situation facing families in my constituency who are struggling on part-time hours and who have seen their working tax credits cut. Nor do I think that Government Members really understand the problems faced by the woman with chronic health problems whom I met recently, who is panicking that she is going to be forced to move house because of the bedroom tax, or the plight of young people desperate to get a start in a real job.
In the middle of what one journalist described last week as “jiggery-pokery” and the hon. Member for South Down spoke of earlier as “sleight of hand”, the harsh reality is that the economy is set to shrink and growth forecasts are downgraded yet again. Over the past two years, the economy has grown by just 0.6% compared with the 4.6% that the Government promised. Nearly 1 million young people are out of work. Prices are forecast to carry on rising faster than wages for at least another year, until 2014. Debt figures are revised upwards this year and for future years. The Government are set to borrow £212 billion more than they planned. The Chancellor has failed on his own fiscal rule and the Prime Minister’s pledge to balance the books by 2015. So much for the Chancellor claiming to be healing the economy.
Last Wednesday the Chancellor made a big song and dance about how borrowing is forecast to fall. As we have heard repeatedly since then—indeed, several hon. Members commented on it today—the only reason he has been able to claim this is that the Government have added the 4G mobile spectrum auction to this year’s figures even though Government delays mean that the auction has not happened yet. Without the receipts pencilled in from the 4G sale, borrowing would be forecast to be £2 billion higher this year than last year. Government Front Benchers may try to brush off those figures, but Labour Members are not going to let the Chancellor get away so easily, because they are the real figures that expose the reality behind his failed economic plan. As we have heard in speech after speech, the fact is—I hope that Ministers are listening to this—that the Government’s policies have failed to bring growth back to the economy.
The Chancellor claimed that he would cut the welfare bill, yet it is forecast to be some £13.6 billion higher in this Parliament than he boasted two and a half years ago. Again, rather than face up to reality and change course, he has decided to carry on regardless and instead make hard-working families shoulder the cost of his failure. Speaker after speaker has highlighted how the impact falls on precisely the people the Government say they want to support. Most working-age benefits, including child tax credit and maternity pay, will rise by only 1% for the next three years—a real-terms cut. Child benefit is to go up by only 1% for two years from 2014—another real-terms cut.
We do need to reform and modernise our welfare system. People who can work should work if the jobs are available for them; there should be no ifs or buts about that. However, that is not what the Chancellor is about. He is trying to characterise this as the workers versus the workshy and trying to get the public to believe that it is about the strivers versus the shirkers. That might make for some soundbites but it does not do anything to help the decent people who are out of work through no fault of their own, who are desperate to get a job, who want to pay their way, and who will do everything they possibly can to do so.
As we have heard, six out of 10 households who will be hit by these real-terms cuts to tax credits and benefits are actually in work. The House of Commons Library has shown that the decisions in the autumn statement, together with all the other changes to tax and benefits that take effect in April, mean that a one-earner family on £20,000 a year with two children will lose £279 a year. The Chief Secretary to the Treasury did not seem to recognise those figures when my hon. Friend the Member for Leeds West (Rachel Reeves) spoke earlier, but perhaps the Exchequer Secretary will have something more to say about them.
Not only is this hitting hard-working people and families who are striving to do the right thing, but research from the Library shows that 81% of the revenue from the key additional direct tax, tax credit and benefit changes in the autumn statement will come from women—£867 million of over £1 billion raised. The Chancellor has added a mummy tax to his granny tax. Women are being hit three times harder than men by a Cabinet with three times more men than women—perhaps no surprise there.
We heard a number of excellent contributions this afternoon. Opposition Members spoke about the true cost of the Government’s failed economic policies and the reality behind the measures announced in the autumn statement. The Prime Minister may have once promised that we are all in this together, but given that hard-working, striving families and workers were singled out on the same day that the Government gave a £3 billion handout to the richest people in the country, it is clear that his promise has been broken.
Constituents across the length and breadth of the UK may well have given the Chancellor the benefit of the doubt, but many of them are now coming to realise that he is more interested in tax breaks for millionaires than in getting people into real jobs. I suspect that the 6,000-odd people in each Tory constituency who will be affected by that will wake up to the reality and that many of them will not repeat their vote for the Conservative party or, indeed, vote for the Liberal Democrats come the next election.
While the Chancellor is playing games and making the worst-paid workers pay for the costs of his failure, Labour will continue to fight to make sure that the voices of those whom he is hitting hard are heard. Opposition Members are proud to represent the voices of those people—the workers and the strivers. We will keep pushing the Chancellor to change course, to cut VAT temporarily, to bring in a bank bonus tax to fund a job guarantee for young people, genuinely to bring forward infrastructure investment, properly to reform the banking system, to introduce a national insurance contributions holiday scheme for small businesses, and to come up with a real strategy for growth, not just a strategy to cover the cost of failure.
To repeat the words of my right hon. Friend the shadow Chancellor earlier today—I say this to my right hon. Friend the Member for Holborn and St Pancras and others who raised this point—we will look at the Government’s proposed legislation, but if they intend to go ahead with such an unfair hit on middle and lower-income working families while giving a £3 billion top-rate tax cut, we will oppose it.
The Exchequer Secretary to the Treasury (Mr David Gauke)
This has been a passionate and thoughtful debate. I begin by congratulating the three hon. Members who made their maiden speeches this afternoon—all three were of the highest standards. The hon. Member for Rotherham (Sarah Champion) spoke with great pride and passion for her constituency. The hon. Member for Croydon North (Steve Reed) brought his local government expertise to the debate, and his understanding of the area he represents was most impressive. He also spoke movingly about his predecessor, Malcolm Wicks. The hon. Member for Middlesbrough (Andy McDonald), who is the first Middlesbrough-born Labour MP, spoke with great pride about his constituency. I imagine that being the MP for one’s home town must bring a particular pleasure to delivering a maiden speech and representing one’s constituency. He also spoke warmly of his predecessor, Sir Stuart Bell. I congratulate them all and wish them well in the House of Commons. I am sure they will make many further eloquent and passionate speeches from the Opposition Benches over the years ahead.
I also thank a number of my hon. Friends for their contributions. My hon. Friend the Member for Macclesfield (David Rutley) spoke about how it is necessary to get growth in the economy and discussed ways of achieving that. My hon. Friend the Member for Spelthorne (Kwasi Kwarteng) made a strong and persuasive critique of the previous Government’s record and, indeed, of the level of borrowing under them.
My hon. Friend the Member for Dudley South (Chris Kelly) set out some of the benefits for businesses in the autumn statement, highlighting in particular the corporation tax cuts and the annual investment allowance, which will benefit many west midlands businesses. My hon. Friend the Member for Bristol West (Stephen Williams) made the point that it is right to reduce the deficit, even though it is taking longer than we had envisaged.
My hon. Friend the Member for North Swindon (Justin Tomlinson) welcomed the cancellation of the fuel duty rise, which was due in January, and set out the case for greater tax transparency. He was absolutely right to raise that and this Government are taking steps to ensure that people understand the tax they pay.
My hon. Friend the Member for Burnley (Gordon Birtwistle) spoke about apprenticeships, of which there are 1 million more as a consequence of the Government’s actions. He talked about help for businesses in the north-west, including in the aerospace industry. He also spoke about the annual investment allowance.
My hon. Friend the Member for South Dorset (Richard Drax) made a strong and passionate speech calling for lower taxes. My hon. Friend the Member for Mid Norfolk (George Freeman) set out the steps that the Government are taking to turn around the economy, and drew a parallel with the steps taken by Margaret Thatcher’s Government in the 1970s and 1980s.
I will not go through the list of all the right hon. and hon. Members who contributed to the debate, but I thank them all. In particular, I acknowledge the speech by the former Chancellor, the right hon. Member for Edinburgh South West (Mr Darling). As ever, he brought great expertise to these matters. I did not agree with everything he said, but I thought that his was a far better response to the autumn statement than some that we have heard from Opposition Members, not least the shadow Chancellor.
The right hon. Member for Edinburgh South West said that we live in difficult times. When there is clearly major disagreement between the parties in government and the Opposition about the correct response to the difficulties, we should all acknowledge that growth is lower than we would like it to be and lower than the independent Office for Budget Responsibility anticipated, but we should also acknowledge that there are encouraging factors in the economy. We should all welcome the fact that private sector employment has grown significantly in recent months. The fact that the deficit is falling in every year of this Parliament is to be welcomed. It would be regrettable if the Labour party sought to undermine the Office for Budget Responsibility in making its independent assessment of the public finances.
These are clearly difficult times, not just for the UK economy, but elsewhere. Growth in the UK economy next year has been revised down from where we had hoped it would be, but it is still likely to be greater than the growth in Germany, France and the eurozone. The key question is why growth is lower. The analysis of the Office for Budget Responsibility is very clear: it is because of the uncertainties created by the crisis in the eurozone, because commodity prices are rising more than we would have liked and because the damage done to the economy by the crash of 2007-08 was greater than had been realised.
The answer from the Labour party, essentially, is that we could solve all those problems simply by borrowing more. Very few Labour Members say that explicitly, although the hon. Member for Great Grimsby (Austin Mitchell) was happy to say that that is the right approach. The Labour party says that borrowing is higher than we would like, which it is, but its solution is to borrow more. That makes no sense at all.
It is also not the case that the high level of borrowing that we inherited—a record amount outside wartime—was purely to do with bailing out the banking sector. The shadow Chancellor may not accept this, but the International Monetary Fund tells us that the structural deficit before the crash was 5.2% of GDP—a hugely dangerous level. Any Government who ignored that and failed to address it would be taking the most enormous risk with the country. It is vital that we have fiscal credibility. We could not have gone on as we were. Had we not taken action and gone further than was set out in the plans of the right hon. Member for Edinburgh South West, we would have faced great difficulties. We could not dismiss the risk of the UK being sucked into a sovereign debt crisis, and it would have been complacent of us if we had done so.
The Government have acted to bring the deficit down, but at every step we have been opposed by the Labour party. Most of us did not come into politics to raise VAT, but it was necessary to do that and we also had to take steps to reduce departmental spending—again, that was opposed by the Labour party. We had to reform the welfare system and find £18 billion of cuts, including the introduction of a welfare cap, and we had to make changes to the child benefit system that hit the top 10% or 15% of households. The Labour party opposed all that and, as far as we can see, will not touch a penny of the welfare budget. That is not a great surprise given its record in office. In real terms, the welfare bill increased by 40% in 13 years. Before Labour Members say that that was a response to the crash in 2007-08, half of that increase—20%—occurred before the crash. In the good times the welfare bill was rising out of control.
Kwasi Kwarteng
What does my hon. Friend think about the fact that spending between 1997 and 2007 doubled in nominal terms—it went up more than 50% in real terms—and that the welfare bill more than doubled in that time?
Mr Gauke
My point is that we could not continue in that way. The difficulty with the Labour party’s record is that it believes most problems can be solved by throwing money at them. We have run out of money and cannot afford to do that. That is why we are taking difficult decisions and the welfare uprating will be 1%—we now know that the Labour party will oppose that. We must get welfare spending under control. That measure will save £2 billion, and if one looks at other measures introduced in the autumn statement, one sees that working households—including those in the lowest decile—will gain in 2013.
Mr Gauke
I will press on because we are running out of time. If all measures to be introduced next April are taken into account, all working families gain, including those in the lowest decile. It is the right thing to do. We have raised the personal allowance yet further and cancelled Labour’s increase in fuel duty next January. Each time the average car is filled up, the motorist will pay £5 less fuel duty than they would have done had we implemented the Labour party’s plans.
As the Prime Minister and Chancellor have said, we face a global race and must make ourselves more competitive. That means moving from current spending to capital spending, which is why we will be spending £9 billion more on capital in this Parliament than the Labour party would have done. Do Labour Members support that switch from current spending to capital spending? That is why we can afford—and why it is necessary—to reduce corporation tax from 28% to 21%. The Labour party allowed our tax position to become uncompetitive.
There is competition for investment. Businesses can choose where they locate and invest. To ensure they choose this country, we need improved infrastructure and to control public spending. We must reform welfare and public services and we need competitive taxes. The Government are prepared to take difficult decisions but the Labour party consistently ducks those decisions and opposes every spending cut and reform. It opposes getting to grips with welfare spending and panders to every group, and the country will recognise that at the next election.
Question put and agreed to.
Resolved,
That this House has considered the matter of the economy.
Business without Debate
“Innocence of Muslims”
Alex Cunningham (Stockton North) (Lab)
I should like to present a petition on behalf of the chairman of Stockton mosque, Councillor Mohammed Javed. It declares that the petitioners are profoundly concerned about the portrayal of the Islamic faith in the online video “Innocence of Muslims” and calls for it to be banned. The petition is accompanied by a larger one that was presented to my hon. Friend the Member for Hartlepool (Mr Wright) and I at a meeting last month, which was attended by hundreds of local community members from mosques across Teesside. The petition is signed by some 4,000 Teesside residents, mostly Muslims, who are shocked and upset about how their proudly held faith has been affronted in that way—their shock is shared by my hon. Friends the Members for Middlesbrough South and East Cleveland (Tom Blenkinsop) and for Middlesbrough (Andy McDonald). I hope the House will take the strength of feeling into account and stand with the hundreds of thousands of Muslims up and down the country who are calling for the Government to ban this appalling film.
Following is the full text of the petition:
[The Petition of Cllr Mohammed Javed,
Declares that the Petitioner believes that the film, “The Innoncence of Muslims” is disrespectful, offensive and untruthful, and could incite hatred towards Muslims.
The Petitioner therefore requests that the House of Commons urges the Government to take necessary measure to ban the film, and introduce new legislation to prevent Islamophobia and the incitement of religious hatred against Muslims.
And the Petitioners remain, etc.]
[P001149]
Israel and Palestine
(12 years ago)
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Mark Hendrick (Preston) (Lab/Co-op)
On 29 November, the United Nations General Assembly voted to upgrade Palestine’s status to non-member observer. The Assembly voted 138 to 9 in favour, with 41 nations abstaining, including the UK. The USA supported Israel and voted against upgrading Palestine’s UN status.
The vote should be welcomed as a symbolic milestone in Palestine’s ambition for statehood, rather than as “unfortunate and counter-productive”, as the US Secretary of State has chosen to describe it. Enhanced UN status brings Palestine closer to the international community, its organisations and values. The Palestinians can now take part in UN debates and potentially join bodies such as the International Criminal Court.
By abstaining in the vote, Britain has made itself less relevant to meaningful engagement in the search for peace. As my right hon. Friend the Member for Paisley and Renfrewshire South (Mr Alexander) warned the Foreign Secretary before the vote:
“Abstention tomorrow would be an abdication of Britain’s responsibilities.”—[Official Report, 28 November 2012; Vol. 554, c. 231.]
The UK did not stand on the side of progress but instead chose the politically expedient option. I would be interested to know what the Minister believes was achieved by the UK abstaining from the vote and how that strengthens the goal of a two-state solution.
In response to the vote, Israel announced on 30 November that it will build 3,000 new housing units in the west bank and East Jerusalem and withhold more than £75 million in customs duties. Israel’s response to the perfectly legal move of upgrading Palestine’s UN status is an illegal move to try and ruin a two-state solution and withhold Palestinian money. The proposed housing units would be built in the Ariel, Elkana, Efrat and Karnei Shomron settlements in the west bank, and in the settlements of Pisgat Ze’ev and Gilo in occupied East Jerusalem, according to the Ministry of Housing and Construction. In the words of the Foreign Secretary, if implemented the plans would make the two-state solution “almost inconceivable”, because in effect they would largely cut off occupied East Jerusalem from the rest of the occupied territories.
Jim Shannon (Strangford) (DUP)
It might come as no surprise that I have a slightly different opinion. Does the hon. Gentleman feel that if there is to be peace in the middle east between Palestine and Israel, recognition of the state of Israel has to come first?
Mark Hendrick
Yes, I do. It is important that Hamas recognises Israel and that Israel is there to stay.
Andrew Percy (Brigg and Goole) (Con)
It is not just Hamas. In August 2010, the Palestinian Authority’s Minister for Tourism said that the Palestinian goal was to bring about an end to Israel, so senior members of the PA also need to come clean and recognise the state of Israel’s right to exist, do they not?
Mark Hendrick
I think the hon. Gentleman is referring to one member, not members, of the PA, and it is not the majority view among Palestinians. The majority view is that Israel should exist alongside them, and a two-state solution is what most people would want in Israel and Palestine.
The negative impacts of the E1 plan on the prospects of a viable and independent Palestinian state, with East Jerusalem as its capital, cannot be overestimated. If fully implemented, E1 would deny East Jerusalem its last remaining area for future growth and economic development. In addition, the location of E1 and its massive size would assure Israeli control over the key junction area connecting the northern part of the west bank to the south.
Israeli ambassadors to the UK, France, Sweden, Spain and Denmark were summoned to hear condemnation of the plans, but no further action has been taken, unless the Minister can give me an update.
Graham Jones (Hyndburn) (Lab)
Does my hon. Friend agree that it should not be a surprise that the E1 development is going ahead, given that all the infrastructure was in place for quite a while and that this announcement comes on the back of all the roads and other infrastructure that already exists in that area, which is problematic in itself?
Mark Hendrick
The fact is that that infrastructure should not be in place and that Israeli settlements should not be on Palestinian land—full stop. To say that it is a result of previous illegal development, and that there should therefore be future development, is illogical.
Bob Blackman
I think the key issue of settlements is one of the concerns. Does the hon. Gentleman not accept that Israel has habitually given land for peace in a series of settlement destructions to enable a peaceful solution to take place, and that the biggest obstruction to peace is the failure of the Palestinians to sit down and negotiate with the Israeli Government on a proper peaceful solution for the whole region?
Mark Hendrick
The hon. Gentleman talks about giving land for peace, but the land Israel has given did not belong to it in the first place. The only land of any size that has been given is Gaza, but the Israelis have made it plain that they do not want Gaza; they want as much of the west bank as they can take. While the building of settlements by stealth is going on, Israel claims to want peace but in the meantime does everything it can to build these settlements, which we know will be an obstacle to peace.
Mark Hendrick
I will not, because I want the Minister to have time to respond and I still have quite a bit to say.
Despite vigorous efforts to win over European countries, only the Czech Republic supported Israel on 29 November. The move signals a widening gulf, not just between Israel and Europe but between Europe and the United States. Israel’s response might well be a bluff, given that bellicose rhetoric will play well with the settlement wing of Likud ahead of the elections on the 22 January. It has been reported that President Obama secured a commitment from Israel not to construct any units in E1 back in May 2009. However, whether or not this announcement is sabre rattling, it remains another chapter in an intractable dispute that is at the heart of geopolitical instability in the region. It is also a further clear sign that Israel is not committed to securing a two-state solution. Israel is continually changing the facts on the ground, which is an obstacle to peace, and at the same time blames the Palestinians for not entering into talks.
Let us remember that settlements are not residential enclaves, but virtual military barracks—fortified castles that separate Palestinians from their schools, places of business and extended communities. They threaten the safety of Palestinians who venture near, consume the lion’s share of the region’s water and prevent normal movement of people and goods. The result is ethnic segregation and discrimination, with Palestinians treated as second-class citizens in the occupied territories that belong to them. There are also more than 1.25 million forgotten non-Jewish citizens of Israel—principally Muslims and Christians—who are treated as third-class citizens. Indeed, both Desmond Tutu and Nelson Mandela have compared Israel’s segregation of Palestine to apartheid.
Mark Hendrick
Everybody says that, but then there are lots of people.
According to the UN Office for the Co-ordination of Humanitarian Affairs, Israeli settlers in the west bank consume approximately six times the water used by Palestinians. There has been a threefold increase in the number of settler housing units in 2012 compared with 2011. The settler population was estimated at more than 520,000 last year. When I first visited Palestine in 2002 the population was 50,000, so there has been a tenfold increase. The UN also estimates that there are around 540 internal checkpoints, roadblocks and other physical obstacles that impede Palestinian movement in the west bank. The demolition of Palestinian structures is on the rise, displacing more than 1,000 people in 2011. The Palestinian economy is also severely constrained by Israeli restrictions on access to markets and natural resources. The annual cost of this has been estimated at €5.2 billion, or 85% of total Palestinian GDP, which has led to the Palestinian Authority being dependent on large amounts of funds from the EU and other foreign donors. Between 1994 and 2011, the EU gave €5 billion to Palestine. However, the impact of Israel’s paralysing constraints on Palestinian access to markets and resources is too great to be covered by aid alone. The PA currently faces an acute budget crisis.
The real tragedy of this tit-for-tat conflict is the human collateral. The continued loss of lives on both sides is truly appalling. I am concerned that inertia has set in and that the international community has become an observer of a tragedy that is regularly broadcast across the world, with hope of finding a viable resolution lost. Last month Israel launched a major offensive on Gaza —Operation Pillar of Defence, so-called—killing the military commander of Hamas in an air strike. After continuous bombardment, a ceasefire was negotiated between the two sides. The UN confirmed that 158 Palestinians and six Israelis were killed. The fatalities included a pregnant woman carrying twins, an 11-month-old boy and two infants. The reality of these statistics on the ground is truly appalling. The UN Office for the Co-ordination of Humanitarian Affairs reported:
“On 4 November, Israeli forces stationed in an observatory tower shot and killed a 23 year-old mentally-challenged Palestinian…It was not until two hours later, following coordination with the Israeli military, that a Palestinian ambulance was permitted to reach the area”.
The fact remains that this is an uneven conflict. Some 1,377 Palestinians were killed in the Gaza war from 27 December 2008 to 18 January 2009, while 13 Israelis died in the same period. More recently, statistics from the OCHA for casualties and fatalities prior to 6 November show that 71 Palestinians were killed by Israel in the Gaza strip in 2012, with 291 injured. In the same period, 19 Israelis were injured by Palestinian fire from Gaza and none were killed.
I call on the Minister to press the European Union and the Israelis to secure an end to the siege of Gaza. Even our Prime Minister once described Gaza as a prison, so it is incumbent on our Government to demand the freedom of the prisoners who are being subjected to collective punishment because of the sins of a minority. When I questioned the Foreign Secretary on a statement last month, he refused to comment on what he regarded as proportionate. I can only take from that the embarrassment that he might feel if he tried to explain away Israel’s grossly disproportionate response to terrorist rockets fired from Gaza.
I should like briefly to talk about the Quartet’s road map for peace, which was first announced in 2002. My first visit to Israel and Palestine was in 2002, when the road map was a source of hope for peace. At that time there were 50,000 settlers in the Palestine territories; there are now more than 500,000, and peace seems much further away. Ten foreign ministers of the European Union’s Mediterranean states—Bulgaria, Cyprus, Spain, France, Greece, Italy, Malta, Portugal, Romania and Slovenia—sent an open letter to the then Prime Minister, Tony Blair, in 2007, in which they stated unequivocally and without any diplomatic nuance that they believed the road map had failed. The letter stated:
“We might as well admit it straight away”.
It went on to say that this was
“the recognition of a shared failure we can no longer ignore: the ‘road map’ has failed.”
It is clear that there is no credible plan on the table to achieve a two-state solution or peace, and I believe that the UK has a responsibility to work with our European partners to create a credible plan and to use all the instruments at our disposal to bring pressure to bear on Israel. The settlements are illegal under international law, specifically article 49 of the fourth Geneva convention and United Nations Security Council resolutions 242 and 338. The United Nations, the International Court of Justice and the overwhelming majority of states share this view. Israel controls the borders, airspace and coastline and has overwhelming control of life in the area.
The establishment of settlements has created a discriminatory two-tier system in the west bank, with settlers enjoying the rights and benefits of Israeli citizenship while the Palestinians are subjected to Israeli military law. This year, I had an opportunity to visit a prison in the west bank, where I observed children as young as 14 being tried by a military court for throwing stones at an Israeli defence force vehicle. One of the children received a two-year prison sentence from military officers who should not have been in a court in Palestine; indeed, that court should not have been on Palestinian land in the west bank.
In a recent report, the former EU Commissioner for External Relations, Hans van den Broek, gives evidence of how EU member states have helped to sustain the Israeli settlements. He stated:
“As settlement construction has continued and accelerated, however, we Europeans have failed to move from words to action. So far we have refrained from deploying our considerable political and economic leverage”.
Will the Minister tell us what the UK Government are doing to apply pressure on Israel to cease settlement building, either bilaterally or multilaterally through the European Union? The Foreign Secretary has made it plain that it is impossible for an EU of 27 countries unanimously to agree to economic sanctions against Israel, but he has yet to say whether he would be in favour of sanctions against Israel in principle if agreement on sanctions could be found across the EU at some stage in the future. I invite the Minister to comment on that point.
The most recent estimate of the value of EU imports from the settlements, provided by the Israeli Government to the World Bank, is €230 million a year. That is approximately 15 times the annual value of EU imports from Palestinians. With more than 4 million Palestinians and over 500,000 Israeli settlers living in the occupied territory, that means that the EU imports over 100 times more per settler than per Palestinian. The most common settlement products sold in Europe are agricultural products such as dates, citrus fruits and herbs, and manufactured products including cosmetics, carbonation devices, plastics, textile products and toys. Despite its firm position that the settlements are not part of Israel, Europe has been accepting imports of those settlements’ products with the origin designated as Israel. I believe that the UK Government should lobby the EU member states to adopt our own policy of consumer labelling for all settlement products and also for manufactured goods. Beyond the trade in settlement goods, some European-owned companies have invested in settlements and related infrastructure or are providing services to them. Examples that have been reported include G4S.
Adding to the contradictions at the heart of the EU’s policy towards Israel’s illegal settlements, the EU has failed fully to exclude settlements from the benefits of its co-operation programmes and bilateral agreements with Israel. In several cases, EU public funds for research and development have been used directly to support activities in settlements. The newly ratified EU-Israel agreement on conformity assessment and acceptance of industrial products is an example of the EU’s failure to insist on a firm distinction between Israel and the illegal settlements. The Government need to raise this with the European Commission. At the heart of the UK’s policy towards Israel is the contradiction between recognising that the settlements are illegal, running counter to achieving a two-state solution, and our continuing to trade with the region through the EU. I would be grateful if the Minister could share with the House any updates on recent developments in the political situation in Israel and Palestine.
I also want to press the Minister to assure me that his Department will consider the following proposals for action against inertia: the suspension of appropriate strategic dialogue meetings with Israel to show that the UK is prepared to act in opposition to Israel’s settlement policy; the use of Government advice to discourage businesses from purchasing settlement goods and from all other commercial and investment links with settlements; a ban on the imports of settlement products, as called for by Ireland; the championing of the exclusion of all settlement products in the EU and European Free Trade Association from preferential market access by insisting that Israel starts designating the origin of settlement products other than by “Israel”; the exclusion of settlements from bilateral agreements and co-operation instruments with Israel by means of explicit legal provisions and safeguards; the removal of organisations’ funding settlements from tax deduction systems, as happens in Norway; the prevention of financial transactions to settlements and related activities by means of applying restrictive measures as a more comprehensive approach; the issuing of guidelines for European tour operators to prevent support for settlement businesses; and no longer selling UK-supplied components that can be used in the conflict.
As I have said, there is tragic complacency in the international community and the UK about the latest developments in the Palestine-Israel conflict and an observable lack of commitment from the key players towards securing a two-state solution. I believe that the UK has an important role to play and we should not underestimate our influence, particularly in Europe, in leveraging more political and, more important, economic pressure on Israel. That will require moral and political leadership and action, but we should not shy away from that and I urge the Minister to use his office to promote peace in the region by pushing for a two-state solution.
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mark Simmonds)
I congratulate the hon. Member for Preston (Mark Hendrick) on securing this important debate and apologise on behalf of my colleague the Under-Secretary of State for Foreign and Commonwealth Affairs, the hon. Member for North East Bedfordshire (Alistair Burt), who has responsibility for the middle east and is, I am afraid, out of the country on Foreign Office business.
Right at the beginning of my speech, I want to contradict the hon. Gentleman’s view that there is complacency at the heart of the international community and in the UK Government. I can assure him that there is no complacency at all. Indeed, the UK worked intensively to support Egypt and the United States in facilitating the negotiations to stop the conflict. The UK is continuing to provide international development support both to the Palestinian Authority and in Gaza, where it is providing health and social services to the population. That help is available for as long as it is required.
I also want to make it clear that the settlements that the Israelis have built and are proposing are condemned by us. Settlements are illegal under international law and undermine the possibility of a two-state solution to the Israel-Palestine conflict and those working for a sustainable peace. We look to Israel to take all necessary steps to prevent settlement construction.
The Government’s central objective is to ensure a rapid return to credible negotiations in order finally to achieve a two-state solution, which I believe all Members of this House want to see, irrespective of which side of the debate they are on. That has been and will continue to be the guiding principle that determines our policy on this issue. We firmly support a negotiated settlement leading to a safe and secure Israel alongside a viable and sovereign Palestinian state based on 1967 borders with agreed land swaps, Jerusalem as the shared capital of both states and a just, fair and agreed settlement for refugees. That is the only way to secure a sustainable end to the conflict and it has wide support in this House and across the international community. We strongly believe that achieving such a solution is firmly in the interests of the Israelis, the Palestinians and the wider region.
I have to acknowledge, however, that we are gravely concerned about the dangerous impasse in the peace process, particularly over the last two years. We believe that the window to a two-state solution is rapidly closing. That is why we took the stance we did on the Palestinian resolution at the UN General Assembly, which was guided by the principle of how to create the right environment for a swift return to talks and the strongest possible foundations for the peace process.
In support of that principle and objective, we sought a commitment from the Palestinian leadership immediately to return to negotiations—without preconditions. This was the essential answer to the charge that by moving the resolution, the Palestinians were taking a path away from negotiations. We also sought a reassurance from the Palestinian leadership that it would not immediately pursue action in the UN agencies and the International Criminal Court. Our country, the UK, is a strong supporter of international justice and the International Criminal Court, and we would ultimately like to see a Palestinian state represented throughout all the organs of the United Nations. However, we judge that if the Palestinians were to build on this resolution by pursuing ICC jurisdiction over the occupied territories at this stage, it could make virtually impossible a swift return to negotiations, which is what we all want to see.
Mark Hendrick
I thank the Minister for his generosity in giving way. First, what is the point of upgrading Palestine’s status if it does not get the benefits of an upgrade? Secondly, if settlements continue as they are, it is unlikely that there will ever be meaningful discussions. Thirdly—I have forgotten the third point.
Mark Simmonds
As this is the hon. Gentleman’s debate, I will allow him to intervene again if he remembers his third point.
I understand the points he made. What we have to do is to look forward to try to bring together all the respective parties that are interested in trying to find a satisfactory two-state solution. As part of that, a Palestinian state will, I hope, be a full member of the United Nations at some point in the future.
Mark Hendrick
My third point is that a peace process has been mentioned, but there is not really a peace process to speak of at the moment. All we had were meetings convened by the Egyptians to try to stop the conflict in Gaza. We would all like to see a peace process continue and the Minister agrees with me about a two-state solution, but there is just nothing happening on the ground.
Mark Simmonds
If the hon. Gentleman will be patient, I will come on, time permitting, to exactly what we are doing to try to stimulate, encourage and facilitate the peace process and get it back on track. It is not true, however, to say that nothing is happening. There are, for example, ongoing talks chaired by the Egyptians between the Palestinians and the Israelis, albeit not directly as the two sides are in separate rooms. The two key elements coming out of that are, first, the need for Israel to ease the restrictions on Gaza, particularly so that economic activity can take place; and, secondly, the need for Egypt to tackle the arms smuggling into the Sinai, which is Israel’s main concern about the rockets that are going into it.
We engaged intensively with the Palestinians before the vote in the General Assembly, and in advance of it we urged Israel to avoid reacting in a way that would undermine the peace process and to return to the negotiations. We made it absolutely clear that we would not support a reaction that sidelined President Abbas or risked the collapse of the Palestinian Authority. We have made it very clear to the Israeli Government that their decision to build 3,000 new housing units on the west bank and in East Jerusalem, to unfreeze the development of the area known as E1 on the west bank and to withhold tax revenue from the Palestinian Authority is not acceptable. The settlements plan in particular has the potential to alter the situation on the ground on a scale that threatens the viability of a two-state solution.
Michael Ellis
Does the Minister agree with me that provocative actions on both sides is unhelpful in such a volatile situation, and that it is particularly provocative of the Palestinians to have involved or threatened to involve the ICC in this context because that is clearly not going to advance peace on both sides? Does he agree that Israel has a right to protect its citizens?
Mark Simmonds
I certainly agree that Israel has a right to peace and security, and a right to protect its citizens from rocket attacks, which were extremely prevalent during the fortnight leading up to the escalation of the conflict in Gaza. However, what the international community and the House need to focus on is how we are to get the Palestinians and the Israelis back around the negotiating table, without preconditions, to find a satisfactory, lasting solution to the conflict that has dogged that part of the world for so many years.
Graham Jones
I am grateful to the Minister for giving way, as he has not much time left. When will we reach a point when the two-state solution is dead and a one-state solution becomes a viable option?
Mark Simmonds
I do not think that we are there yet, but, as I said earlier, I think that the door is beginning to close on the realistic possibility of a two-state solution. That is why it is essential for the international community to act now, and essential for the United States in particular to engage with the peace process following the vote in the UN General Assembly. My right hon. Friend the Foreign Secretary has had a series of discussions with the United States Administration in an attempt to persuade them to become seriously engaged with the peace process, and they are doing that.
The hon. Member for Preston asked what we were doing with our European Union partners. We have had a series of meetings in the European Union in which there has been collective agreement on the necessity to push further for EU concerted action to try to bring the parties together. We need to ensure that not only the EU but the UN is engaged in the process, alongside the United States. The UK’s position, however, has been absolutely clear. We will engage with any Palestinian Government who show, through their words and actions, that they are committed to the principles set out by President Abbas in Cairo.
I hope that Members will forgive me for not saying more. I am running out of time. I very much hope that the House will continue to engage with this—
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Overseas Territories (Governance)
(12 years ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
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This information is provided by Parallel Parliament and does not comprise part of the offical record
Sir Alan Haselhurst (Saffron Walden) (Con)
It is very good to be here under your chairmanship, Dr McCrea, as I recall that you were the first representative of Northern Ireland in my time as Chairman of Ways and Means to join the Panel of Chairs. You have clearly relished that appointment, and I know how much time you devote to it.
The debate is timely, in that it is taking place shortly after the UK and overseas territories joint ministerial council. The debate provides an opportunity for parliamentarians to offer their perspective on the relationship between the United Kingdom and the overseas territories and, indeed, the relationship of the overseas territories to the Commonwealth as a whole. I do not think that it needs stressing that there is great good will in this Parliament and, I guess, in the country as a whole towards our overseas territories. I dare say that if people in general were asked, “Which are the overseas territories?” not everyone would be able to name them for sure, but there is a feeling that by their very nature they have a close relationship with this country, so they must be a good thing. I hope that the debate will further underline that friendship and the support that exists at Westminster for the territories. I recognise that that may not be without criticism from time to time, but friendship is devalued if there cannot occasionally be plain speaking.
My hon. Friend the Minister and probably other colleagues will be pleased to know that I will not attempt a tour d’horizon. To do so would represent the most enormous cheek on my part, because, of the 14 overseas territories, I have only as yet visited one, and that was 40 years ago. Admittedly, it was one of the most inaccessible—St Helena. I was there with a Labour colleague, Ray Carter, the then Member for Birmingham, Northfield, and our recommendation on returning was that the island needed an airport. That has not happened quickly, but it is very satisfying that there is now a commitment to seeing an airport constructed. I hope that I shall be blessed with a long enough parliamentary life to be able to make a return visit to that splendid island.
However, I am hoping, in the course of 2013, to up my score with direct knowledge of the overseas territories, in that I am expecting to attend the British Islands and Mediterranean region conference of the Commonwealth Parliamentary Association, which will be held in the Falkland Islands; the executive committee of the CPA is due to meet in 2013 in the Cayman Islands; and I also hope to schedule at some point in that year a visit to Gibraltar.
I currently wear two hats that provide me with some credentials to initiate the debate, being the chairman of the UK branch of the CPA and the chairperson of the international executive committee of the CPA. My starting point—my theme—is the wording in the June 2012 Foreign and Commonwealth Office report on the overseas territories, which declares:
“We would welcome greater engagement between the UK Parliament and the elected bodies of the Territories.”
From the CPA’s point of view, that seems exactly right. We can be an instrument to ensure that that engagement takes place. I would widen it to suggest that there could be greater engagement between the Commonwealth as a whole and the territories. The report to which I have referred suggested that our Government should seek a form of observer status for overseas territories within the Commonwealth. At the moment, they are only members through the UK’s membership. There may be some difficulties about that, but the fact is that they are very much part of the Commonwealth family and I believe that they should be given some form of status that underlines the value that we see in their membership.
It is a widely shared belief and one that is certainly at the core of CPA activities that good governance is the key to advancing the well-being of any jurisdiction, large or small. We believe in the CPA that we can play a key role. The CPA exists not just to promote better relationships, but specifically to enhance knowledge and understanding of democratic governance. Eight out of the 14 overseas territories are branches of the CPA in their own right. The UK branch undertakes, on behalf of this Parliament, parliamentary diplomacy and parliamentary strengthening activities. It involves Members of Parliament and our officials, because our expert Clerks are able to give guidance to those in the overseas territories who are seeking to set up their own arrangements. There is a constant need for that engagement, because a consequence of democratic elections is that there is sometimes quite a large turnover of elected members, so someone will come into a Parliament or legislative assembly and suddenly say, “That’s great, but now what do I do? How can I be an effective member of this body?” Sometimes there is a need to be able to reach out and talk to someone else. Those people need not be exclusively from the UK by any means, but the ability to have that guidance can be very useful.
As I said, eight of the 14 overseas territories are branches of the CPA. Anguilla, the Cayman Islands, Bermuda, the Turks and Caicos Islands, Montserrat and the British Virgin Islands come under the Caribbean, Americas and Atlantic region. The Falklands, Gibraltar and St Helena come under the British Islands and Mediterranean region. I think that we ought to promote as standard the idea that there should be available to the territories, first, the possibility of election observation missions and, secondly, post-election seminars. The hon. Member for Dunfermline and West Fife (Thomas Docherty), who has been closely involved in that type of work, will probably wish to expand on that if he seeks to catch your eye, Dr McCrea. Both those types of activity ought to be seen as core activities. We should not be entirely satisfied if that is not a service that is universally available to the overseas territories. It was therefore rather disappointing—I do not know whether the Minister will be able to comment on this—that the Bermudian Government in the end decided that they did not wish to take up that possibility. It ought to be seen as a non-threatening exercise that is of positive value in the territories involved.
James Duddridge (Rochford and Southend East) (Con)
My right hon. Friend refers to the situation in Bermuda. Is the issue the fact that it did not take election observers from the Commonwealth Parliamentary Association or the United Kingdom, or that there was no independent election monitoring during the elections or will not be in the elections coming up?
Sir Alan Haselhurst
We are certainly not trying to impose; it is a matter of finding the right composition for any mission of that kind, whether during or after an election. The composition should be constructed according to what seems most appropriate. In fact, some Crown dependencies—the Isle of Man, Jersey and Guernsey—have shown a willingness to offer, from the perspective of themselves as small jurisdictions, the kind of assistance that might be valuable to our overseas territories. I want to emphasise that it is not about the United Kingdom knowing best; there is wider experience that can be drawn upon, as demonstrated by the mission to the Turks and Caicos Islands.
The CPA could also play a bigger part internationally. At present, the nature of the CPA, and one of its complications, is that it is not an association simply of states; provinces and states within a federal Government arrangement can all be individual branch members, as can overseas territories, small countries and so on. We have nearly 180 branches in membership.
The small branches conference, which takes place every year, organised by the CPA, is a great experience for our overseas territories. Not only do they meet with an agenda expressly about the needs of smaller jurisdictions—they have some issues in common, but also issues peculiar to them—but there are topics relevant to branches with populations smaller than 500,000. Providing an arena in which they can realise that they are not alone and that others around the Commonwealth and across the oceans have similar issues is one of the valuable services that the CPA provides. We should intensify the efforts to help many such small jurisdictions.
Apart from what might be described as steady, perhaps unspectacular, continuing work, how else might we turn the warm words, which we frequently use when we speak of the overseas territories, into solid action? There are calls for closer integration between the overseas territories and this country. Some other countries are very closely integrated with their overseas territories, which have direct representation in their legislatures and so on. That may be a more difficult question for the UK, but to illustrate to the overseas territories how seriously we take them, something more than an all-party group—presided over with great vigour by my hon. Friend the Member for Romford (Andrew Rosindell)—might be appropriate.
Returning to the island of St Helena, let me say that there are parts of the world with which we have an historical association that deserve solid support. I mentioned that I came back from the island absolutely convinced of the need for better communication to give that small territory a fair chance for its population, because the opportunities for work and wealth creation are limited by the enormous difficulties in getting in and out of the island. It has taken a long time, but I am delighted that there is a real prospect of air communication with the island.
Another thing I came away with—and from the anecdotes I hear from colleagues, I suspect that it is true—is the belief that there are tremendously warm feelings and a tremendous sense of loyalty towards this country in our overseas territories, which we have not perhaps rewarded as generously as we should. My visit to St Helena was a long time ago, but I doubt whether much has changed in that particular. It was very difficult to find a household on the island, however lowly or grand, in which there was not a portrait of Her Majesty the Queen or her father on the wall. I do not think that one could say that of our country. We take our loyalty to the Crown for granted, but they were very proud to display it. We ought to remember that enormous good will in our dealings with our overseas territories, to see whether we can give them an enhanced sense that we are thinking about them and are ready to do the right things to support them.
There is one specific that it would be wrong of me to overlook: air passenger duty. It impacts particularly hard on some of the island territories. I was one of a group of colleagues who sought to persuade the Government to review the present banding arrangement, which was perverse in its effect, particularly on territories in the Caribbean. In the end, the review disappointingly led to no change. There are special links between the territories and ourselves. APD should be looked at again.
I cannot for the life of me believe there is no way to help specifically. If we identify certain territories as considerably dependent upon us, cannot they be ring-fenced as a group, so that there could be some concession on the amount of APD that applies? I hope that my hon. Friend the Minister might start to exercise a little discourse between his office and the Treasury to see whether, in pursuit of demonstrating stronger support for the overseas territories, a concession on APD might be found.
If we are honest, the relationship between this country and the overseas territories, despite the warm words I have used on this occasion, is not without its hiccups, but we need to be aware that underlying loyalty and support generally emanates from them towards this country. As I have tried to emphasise, we owe them more and we should look for every way to intensify the closer engagement that the Foreign and Commonwealth Office professes to want to encourage. We should do everything we can to intensify that to our mutual advantage.
Thomas Docherty (Dunfermline and West Fife) (Lab)
I am grateful to have the opportunity to speak in the debate. It is a pleasure to serve under your chairmanship once again, Dr McCrea. I was trying to recall the last time that I had the pleasure, and I think it was when you were artfully chairing the Committee on the Budget Responsibility and National Audit Bill. You did so with some aplomb and I am sure you will bring the same chairing ability to today’s debate.
I suspect that one or two observers will be slightly confused, as they may have been expecting a debate on unmanned aerial vehicles. For the benefit of any observers who are confused, that will be this afternoon at 2.30 pm. The Minister has a diary commitment this afternoon to give evidence to the Select Committee on Foreign Affairs on, I think, overseas territories. I am grateful that he has been able to move things around to attend the debate today.
I pay tribute to the right hon. Member for Saffron Walden (Sir Alan Haselhurst). I have the pleasure and privilege of serving under his chairmanship on the Administration Committee and as a member of the executive committee of the UK branch of the CPA. He eloquently set out the role of the CPA and the high regard in which overseas territories are held by the Foreign Office and Parliament.
I also pay tribute to the Minister’s predecessor, the hon. Member for North West Norfolk (Mr Bellingham). His work was appreciated on both sides of the House and, indeed, in the overseas territories. He served with distinction for two and a half years as the Minister with responsibility for the overseas territories. One of the great debates about Ministers is whether they are the Minister for the overseas territories or the Minister to them. I am sure that in his new role the Minister will navigate skilfully through those rocky waters, making both us and the overseas territories believe that he is “our” Minister. I look forward to hearing his priorities when he responds.
Parliamentarian that you are, Dr McCrea, you will be aware that the CPA is a unique institution. It is more than 100 years old, having been founded in 1911 as the Empire Parliamentary Association, with six founder members. They were the United Kingdom, Australia, New Zealand, South Africa, Canada and—curiously—Newfoundland. I was not aware that until after the second world war, Newfoundland was a separate dominion from the rest of Canada; I will not digress on the long history of how that came to be.
As the right hon. Member for Saffron Walden mentioned, the CPA is now a much larger organisation, comprising the Parliaments and Assemblies of not only members of the Commonwealth, but devolved institutions at state and regional level around the world from Canada to the Seychelles, from Pakistan to Scotland and, indeed, Dr McCrea, the Northern Ireland Assembly, which is a full and active member of the CPA. You will also be familiar with the story that at last year’s CPA conference, I confused Mr Basil McCrea with your son; they are both Members of the Legislative Assembly.
As the right hon. Gentleman said, one of the CPA’s strengths is that it provides a unique platform for the overseas territories. It is the only Commonwealth institution that recognises them in a formal capacity. From having spoken to several of those from the overseas territories last week, when they were here for the joint ministerial council, one thing they are keen for—perhaps the Minister will reflect on this—is a more formal status within the Commonwealth, perhaps as associate or observer members. At the moment, their only voice is Members of the House and of the other place, plus the CPA. I know that the premiers and chief ministers would like a more formal opportunity, an issue which may be appropriate for this debate.
The CPA, and of course the Commonwealth as a whole, is linked by a common and shared identity. It is not simply the fact that we have a common Head of State—we all have Her Majesty the Queen as head of the Commonwealth—but a shared history. When the hon. Member for Rochford and Southend East (James Duddridge) and I were in Turks and Caicos on an election mission, we jointly had the great honour and privilege of laying a wreath on behalf of the CPA on Remembrance Sunday. It is worth reflecting on the fact that when the United Kingdom sent out the call to arms in two world wars, the overseas territories played a full role in answering that call, just as your constituents, Dr McCrea, and mine did, as well as other dominions and territories in the Commonwealth. It is perhaps unfortunate that the overseas territories do not always get the recognition that they deserve for the full role they enjoy playing in the United Kingdom and the Commonwealth.
I have had the privilege of undertaking two observer missions—one to the British Virgin Islands in November last year, and one to the Turks and Caicos, with the hon. Member for Rochford and Southend East, last month. Observer missions are vital to any vibrant democracy for the purposes of transparency, for providing comfort to all those participating, and, indeed, those watching around the world, and sharing best practice. As hon. Members will know, the itinerary of an observer mission includes, in the build-up to an election, meeting all the political parties privately to give them the opportunity to talk about their experiences of the election. We obviously seek reassurances that they are comfortable that the election is free and fair. As someone who has stood for elected office, I think it useful to have such meetings before the election. From my experience, if there is a favourable result, we have a slightly more favourable view of the whole process than if there is an unfavourable one. It is therefore vital that those discussions take place before election day, rather than afterwards.
We also take the opportunity to meet the governors—I will return to their role later—and election officials to understand election ordinances and rules, and to see their processes. Like the proverbial swan, although elections always appear to move serenely over the surface of the water, underneath a vast amount of paddling, often to some purpose, is going on in the build-up. We undertake press and media monitoring. On our most recent mission, the hon. Member for Rochford and Southend East and I observed a political party rally in the Turks and Caicos Islands. That was an experience in itself; as he will recall, it was difficult to get the PNP—the Progressive National party—tune out of one’s head, because it was played over and over again.
I pay tribute to the Westminster Foundation for Democracy for its work in various countries, for example in the build-up to the restoration of local democracy in Turks and Caicos. It visited several times to help build election ordinances and confidence in the process, and to put an electoral system in place. One very simple thing was done there—or at least I would say that it was simple. Previously, political parties could treat voters by supplying them with free alcohol and food both at rallies during the build-up and on polling day. Westminster Foundation for Democracy helpfully made the proposal, which was certainly taken up with enthusiasm by party treasurers, to prohibit giving alcohol to potential voters on polling day. In the United Kingdom, we look with some bemusement at the idea that we could, in effect, treat voters, but it was standard practice for 30 or 40 years in the Turks and Caicos Islands. That is a simple example of how engagement by other Commonwealth parliamentarians can help improve the democratic electoral process.
James Duddridge
I congratulate the hon. Gentleman on his work in relation to the Turks and Caicos Islands and more broadly. Does he agree that we have as much to learn from some of the territories about governance as they have to learn from us? I remember coming back from an election at which people queued up for hours, because they were so passionate about voting, and the turnout was 95%, to a United Kingdom election at which people told me on the doorstep that they could not be bothered to vote and turnout was 15% to 20%.
Thomas Docherty
I absolutely agree with the hon. Gentleman, who was a pleasure to work with on the mission. He is right that turnout was 80% or above. People queued for an hour before polls opened, and for three or four hours after they had officially closed, to take part in the democratic process, which is a tribute to them and their commitment to democracy. As the hon. Gentleman will recall, I recounted to an election official that in my constituency if somebody was asked to wait for two minutes, they would probably turn tail and go home. I cannot imagine such enthusiasm in the United Kingdom, so he is absolutely right.
I want to pay particular tribute to Ms Juliette Penn, who is the returning officer for the British Virgin Islands. She is a formidable woman, who organises her elections with some efficiency. I regret to say that my local returning officer could learn quite a lot from her about producing a result efficiently and with confidence. I press the Minister to consider what more we can do to partner and work with electoral registration officers in the overseas territories and those in other Parliaments and Assemblies, whether the Crown dependencies, the devolved Administrations or local government. The hon. Gentleman is entirely right; it would be incredibly patronising and foolhardy to think that this was a one-way process of the UK teaching the overseas territories how to do things. Quite often, it is the reverse.
That leads me nicely to the on-the-day observing that we do. It is our goal to visit all polling stations on polling day, which in some places can be a logistical challenge. In some territories, there are a very small number of electors on very small islands. One of our observers spent a day—I imagine not an unpleasant day—on an island that had 30 voters. He had to take a good book with him to get through the 12 hours while the polls were open. However, there is a serious point. We are clear about what we are looking for; we want to ensure that no treating of voters takes place and that no undue influence is placed on voters in the vicinity of the polling stations. As the hon. Member for Rochford and Southend East will recall, we heard some fascinating tales from around the world. For example, in recent years, voters were taking their mobile phones, which now have cameras, into the polling booth when they cast their vote. They photographed their ballot paper, which they duly took to the polling clerk and put in the box. They then went outside to a gentleman sitting in a car about 100 feet away from the polling station, showed the picture of their ballot paper and received $100 or £100 in the local currency. Things that we would find absolutely astonishing have been common practice in some parts of the Commonwealth.
When we reviewed the last election in the Turks and Caicos Islands, it was clear that such things were not happening, because robust processes had been put place. I pay tribute to the Governor’s office, the local police and election officials for the work they have done with the parties to stamp out such behaviour. However, it is not an uncommon problem in some parts of the world, which is why our missions are so important.
We also attend the counts and, in some cases, the recounts. This is an area where there is still room for improvement. It was heartening to talk to the new Premier of the Turks and Caicos Islands, Dr Rufus Ewing, about the matter; I know the Minister will want to welcome him to his new role. On the island I mentioned, where there were only 30 voters, electoral officers took two hours to count the ballot papers—even my returning officer would not take two hours to count 30 voters’ choices. There is perhaps some room for a more efficient system to be introduced. The count is a vital part of the whole process. It is critical that the voters feel, and can see, that their democratic choices are reflected in the results. Although I may joke that the process is slow, there was no real dispute that it was fair. There was no indication that anything untoward had happened to the ballot papers between the close of the poll and counting.
Clearly, there are differences in approach. For example, rather than bringing all the ballot boxes to one polling station or to one count, the territories often count the votes in situ. They close their polling station at, say, 6 o’clock and go straight to a count, and I can see the advantage in that. In a new democracy, or one that is establishing its confidence, there is a strong argument that there should be as little movement as possible of ballot papers. To be fair, it makes for a long day for election officials and campaign workers. Dr McCrea, you and I have fought enough elections to know that our day does not begin when the polls open and end when the polls shut; there is a little bit before and a little bit after.
The CPA missions produce a report. If anyone is interested, they are publicly available from the Foreign Office. Both our report on the BVI and our preliminary report on the Turks and Caicos, which I think the Minister has had an opportunity to look at, said that the process was fair and transparent and that the people’s will had been adequately reflected in the results. While we recognise that some efficiencies can be introduced, it is fundamentally a robust system.
That leads me to the ways we can help some of the overseas territories strengthen their democratic processes. As the right hon. Member for Saffron Walden has mentioned, there are a number of overseas territories in the Caribbean. I will not list them all because I am bound to forget one, which would be a terrible offence. It strikes me that we can do more, through the governors, to encourage election officials to share good practice, and I would be interested to hear the Minister’s views. It is surely not beyond the wit of the Foreign Office to bring together the EROs for all the overseas territories to share common practice. Perhaps the Minister can outline what steps he is considering to encourage the returning officers from the BVI, the TCI and the Anguillas to observe the build-up to the Cayman elections that are taking place next year and to offer suggestions. In that way, they can build an informal network so that as each election comes round, the returning officers learn from each other.
The Minister will be aware of the role of the Crown dependencies within the Commonwealth Parliamentary Association. On our mission last year to the British Virgin Islands, we were delighted to be joined by representatives from the Isle of Man and Guernsey. It struck me that on a practical level, they have more in common with the overseas territories. Like many of our Crown dependencies, their strength lies in shipping registries, tourism and financial services. They also have relatively small numbers of legislators in their Assemblies and Parliaments.
James Duddridge
Earlier, the hon. Gentleman made the point that he would encourage the Minister for, or of, overseas territories—hopefully both—to look at EROs regionally becoming more involved in the process. Does he agree that one of the strengths of our mission was that it was chaired not by a politician from the United Kingdom Parliament, but by Joe Bossano, a Minister from the Gibraltarian Parliament? It would be constructive to have a cadre of politicians who were regionally involved in peer-to-peer assessment of the elections, rather than simply relying on people to travel over from Gibraltar or the United Kingdom, which is not the most economic thing to do. Furthermore, we do not have the same degree of expertise and the same understanding of those territories.
Thomas Docherty
The hon. Gentleman makes an incredibly powerful and valid point. He is absolutely right, and I pay tribute to Joe Bossano for the way he led the observer mission; he spoke very eloquently, and with some credibility, about the role of overseas territories, which, of course, include Gibraltar. We need to encourage not just EROs but the overseas territories’ politicians to work together where appropriate. Clearly, it is slightly more challenging logistically for Members from the Falkland Islands to go to BVI, which, by my count, involves five stops or changes, plus a train journey from Brize Norton to Heathrow. The hon. Gentleman is right to say that we should be encouraging the territories of, say, the Caribbean and Bermuda to work together as parliamentarians, especially as many of the territories have slightly different electoral systems. Some have not just districts but at-large, all-island systems which we do not have in the UK Parliament, although our colleagues in Scotland and Wales do to an extent. The different electoral systems are one of the things that we UK politicians must get our heads around. The hon. Gentleman is right to say that encouraging that involvement will be a slightly more economical use of the FCO’s pound.
I am very keen that within the British Isles and Mediterranean region branch of the CPA we have a group of parliamentarians who develop their skills, know what they are looking for and know how to write their reports. We are seeing the Minister next week and he is aware that one of the issues I am keen to talk to him about is how we develop skill-sets within this Parliament, so that we have a group of colleagues who are able to go to elections, whether in overseas territories, in Africa—if we are invited—or in Australia.
It is worth bearing in mind that having election missions is now the norm rather than the exception. Just last month, the United States had a delegation from overseas, including at least one Member of the House of Commons, my hon. Friend the Member for Preston (Mark Hendrick). I know that the hon. Member for Rochford and Southend East has taken a great interest in Africa, and many African countries have such delegations. Territories and nations that do not have election observers from elsewhere run the risk of opening themselves up to questions such as, “What is it they have to hide?” Perhaps the Minister can enlighten me, but I think that there are very few countries in the world that do not have election observers; North Korea springs to mind. Perhaps he can think of a slightly more exhaustive list, but I think it would be a very small list of countries. Any electorate that has elections coming up should ask why they do not have election observers coming into their country or territory.
I want to touch briefly on the role of governors. I pay tribute to the two governors I had the privilege of working with during elections: His Excellency Governor Boyd McCleary of the British Virgin Islands; and His Excellency Governor Rick Todd in the Turks and Caicos. Can I press the Minister to say a little bit about the role of governors in helping to build the democratic processes? I particularly want to press him to say something about Governor Todd. He will be aware, as I am, that there has been a petition, which no one seems to be taking ownership of, criticising the Governor. I would be grateful if the Minister would place on record whether the Governor still has the full confidence of Her Majesty’s Government. Hopefully, he can put an end to the speculation that has started up in some quarters in parts of the Turks and Caicos.
In the remaining time, I will move away from talking about the Caribbean specifically. I hope that the Foreign Office will look at the CPA as a useful ally and partner in building the governance arrangements of the overseas territories. As I said, the CPA is a unique organisation. There is no other organisation in the world with a common identity and common history that brings together such an eclectic mix of assemblies and Parliaments, from sovereign nations through to Crown dependencies, devolved Parliaments and assemblies, and overseas territories. I would be grateful if the Minister could set out what he thinks the CPA can bring as a partner to strengthening the democratic processes.
My hon. Friend the Member for Wrexham (Ian Lucas) will be setting out the Opposition’s position on the territories shortly. In closing, I will just say that on the issue of air passenger duty there is genuine concern among our overseas territories that they are being discriminated against. I am sure you would agree, Dr McCrea, that it is a slightly bizarre situation that because we measure by distance to a capital, if someone flies to Honolulu they will pay far less in APD than if they fly to an overseas territory in the Caribbean or to Kingston or to any other Commonwealth country.
When the Minister met the premiers and chief ministers of the UK’s overseas territories last week the issue of APD was raised, so I would be grateful if he could set out how he found his first joint ministerial council—indeed, the first JMC. Perhaps he could say a little about what his priorities are for the coming 12 months and how he will evaluate success. I hope that he will also set out how we go forward with the White Paper, which was relatively uncontroversial, as far as a Government White Paper can be uncontroversial—I say that in the nicest possible way. I would be very interested to hear how he intends to take forward the ideas in the White Paper and the submissions from the CPA and others.
Finally, I wish the Minister all the best in his role. I know that he will find it deeply stimulating and challenging, and we look forward to working with him in the months ahead.
Ian Lucas (Wrexham) (Lab)
Thank you, Dr McCrea, for calling me to speak. It is a real pleasure to appear under your chairmanship; I think I am doing so for the first time.
I welcome the new Under-Secretary of State for Foreign and Commonwealth Affairs, the hon. Member for Boston and Skegness (Mark Simmonds). I think that this is the first time we have had the opportunity to debate with each other; I suspect that the topic of today’s debate will not be the most controversial topic that we will address.
It has been a real pleasure to attend this debate, and I pay tribute to the right hon. Member for Saffron Walden (Sir Alan Haselhurst) for securing it. He has kept me in order on many occasions in the past and it is a pleasure to hear him on the other side of the fence, talking about this important issue. We have had a very interesting debate.
I am a great fan of the Commonwealth Parliamentary Association, which is a tremendous institution in Parliament. My own constituency of Wrexham has benefited massively from the CPA, because we have developed a very strong link with Lesotho in southern Africa as a direct result of a visit that I paid there in 2005. It led to very close links between schools in my constituency and in Lesotho, which is a developing country. As a direct result of the CPA visit that I made, Wrexham hosted the Lesotho Olympic team. That sort of link, which is between not only parliamentarians but constituencies and institutions within constituencies, is what we should be working to try to achieve with the overseas territories.
One of the real challenges of modern parliamentary life is that the focus of MPs is very much on their own constituencies or their own constituency work; sometimes that work does not extend beyond the borders of the constituency, let alone of the United Kingdom. We all know that the overseas territories are an intrinsic and central part of our history. That has been very evident in this debate—they are part of what makes the United Kingdom, and it is absolutely imperative that we recognise that and continue to have a strong and developing relationship with them.
We have heard today about how those links are carried forward through the CPA and, of course, through other avenues. However, it is also the case that, because of the disparate nature of the overseas territories and their geographical spread, it is very difficult for the overseas territories and those developing knowledge of democratic institutions to secure regular experience of elections of the type that we have. We have secured our experience in a country of 60 million people.
It is very important indeed that we work with the overseas territories to share our experience of elections. I think it was the right hon. Member for Saffron Walden who made the point that we can also learn from the overseas territories, and my hon. Friend the Member for Dunfermline and West Fife (Thomas Docherty) made the same point. In an era of turnouts of 12% or 15% in some UK elections, we must not think that we are in a state of grace as far as dealing with elections is concerned. The enthusiasm of a novel election process, as we saw all those years ago in South Africa and as we see today in other places, tells us and the people of the UK that democracy is an important process, which needs to develop. We also need to bring that experience from other places to the UK.
What we as parliamentarians can offer is the benefit of our experience, and I strongly agree with my hon. Friend’s point about electoral registration officers. In an era when communication is becoming easier because of the development of the internet, it is possible to maintain relations that might not have been possible 40 years ago. When the right hon. Gentleman visited St Helena, the prospect of maintaining contact with individuals there was so remote as to have been virtually impossible, but that is now possible once a connection is made. I would like relations to be extended to not only parliamentarians but the communities they represent in the UK, so that we can pool our resources and secure the relationships that are so necessary to building good governance and democracy in the overseas territories.
It is important that parliamentarians should be involved. Increasingly, under the European Union, electoral observation tends to focus on European institutions rather than Parliament. One theme I want to pursue with the Minister is that I would like more parliamentarians to take part in electoral observation missions to Commonwealth countries and the overseas territories. Elected politicians bring a substantial benefit to the observation process, and it is essential in a multi-party democracy that they play a role, although not an exclusive one, in electoral observation missions. It is unfortunate that that role has diminished in recent years, and while civil servants from a particular institution often go on missions, politicians are sometimes excluded.
Thomas Docherty
Does my hon. Friend agree that one key advantage politicians have is not only that we can talk candidly, face to face, with fellow politicians, but that we have extensive experience as campaign workers before we are elected and during the process of being elected? We can therefore see what the wider political party is looking for from a process.
Ian Lucas
That is absolutely right. Elections in a democracy are about competition between parties. Campaigning is incredibly important, and politicians are much more familiar with that skill than even the most experienced electoral registration officer. It is therefore important that communication takes place, although the far-flung nature of the overseas territories makes it difficult for them to have the interactions that we have developed over the years. We should build strongly on our experience in that respect.
The other relevant issue—to be slightly more controversial —is financial transparency; I was pleased that it played an important part in the Foreign Office White Paper “The Overseas Territories: Security, Success and Sustainability”. The Government were clear about the importance of financial transparency, which is of great importance at present to my constituents and others across the country.
As democracy develops in the overseas territories, we must ensure that the transparency that goes with a well functioning democracy is also evident in their financial and taxation affairs. When we work with the overseas territories, and the British taxpayer makes a contribution to assist them, we cannot have a situation in which businesses and individual UK citizens might use them to avoid paying tax. We need to work with them to ensure that international principles on fair dealing in taxation matters are a central part of their developing democracy.
It is hugely important that the connection that the CPA has developed through visits over a number of years should continue. We should try to encourage more Members of Parliament to take part in such visits. There are many new Members, some of whom have arrived here only in the past month or so, and they need to know the importance of engaging with the overseas territories and with other countries beyond the UK and the important role that parliamentarians play in ensuring that good governance is spread across the world.
I pay tribute to the right hon. Gentleman and my hon. Friend for their hard work, for which they are not thanked often enough. There is huge respect abroad for the work of the CPA and the Inter-Parliamentary Union, and our colleagues abroad value the commitment of this Parliament—the mother of Parliaments—to developing institutions in countries that are building a level of democracy that we want to encourage.
I am pleased to support the thrust of the White Paper, which was published earlier this year. Clearly, it builds on the 1999 White Paper published by the then Foreign Secretary, Robin Cook, under the previous Government. The Opposition have noted the commitments made to the overseas territories, and we strongly support applying the principle of self-determination to them. We want to ensure that they have a close link with this country, but we also want, in an age of devolution, to ensure that they have sufficient autonomy to deal with their individual circumstances and to build a democratic system appropriate to them.
Sir Alan Haselhurst
I am grateful to the hon. Gentleman for his kind words. Does he agree that the serious discussion we are having gives the lie to the general mockery that occurs in the press whenever Members of Parliament try to improve relations with, and democracy in, other parts of the world—particularly those closely associated with us?
Ian Lucas
That is certainly the case. That work is often unseen; it is demanding and difficult and involves much discussion and thought. Much assistance is given to overseas territories, which have the difficult task of designing government—something that has taken 1,000 years in this place. It is hugely important to share our experience.
Thomas Docherty
My hon. Friend is setting out a compelling argument. Does he agree that lending our expertise to promote local development is about not just political expertise but civil service expertise? I am thinking, for example, of the work the Department of Energy and Climate Change can do to help the Falkland Islands as they prepare for hydrocarbon exploration, and the work the Department for Environment, Food and Rural Affairs can do to help protect the fisheries and the natural environment in the Caribbean.
Ian Lucas
The White Paper uses the word “partnership”, which is something that we need to build on. Owing to the size of our country and our experience, we have resources and expertise that the overseas territories cannot draw on; given our historical relationship and our links, it is important to share that expertise and work with them. We need to build a strong relationship that will endure, although it will change as democracy and good governance develop. The Opposition are committed to the continuing relationship with the overseas territories, to building good governance, to developing institutions and representation appropriate to each individual territory, and to working with the Government in taking that important agenda forward.
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mark Simmonds)
It is a pleasure to serve under your guidance this morning, Dr McCrea. I congratulate my right hon. Friend the Member for Saffron Walden (Sir Alan Haselhurst) on securing the debate and generously allowing the time to be changed, and on the informed and articulate way in which he introduced it. I was keen to hear of his prescient and visionary visit to St Helena all those years ago. He will be delighted, as I think the whole House is, that the airport is predicted to open in 2016. I know from his remarks that he is ambitious to visit many of the other territories, but I hope that he will find time to return to St Helena to benefit from the airport, once it is open. I also congratulate the Commonwealth Parliamentary Association, which does an enormous amount of significant work. In particular, I congratulate Andrew Tuggey on his professional and detailed work to ensure that the CPA is such a success in building relationships and sharing knowledge between Parliaments. Long may that continue.
I thank the hon. Member for Dunfermline and West Fife (Thomas Docherty) and my hon. Friend the Member for Rochford and Southend East (James Duddridge), who, sadly, is no longer in his place, for the work that they have done recently, particularly in the Turks and Caicos Islands. I look forward to discussing with them the report, which I have seen, and how to pursue the lessons that they think can be learned. I also thank the hon. Member for Wrexham (Ian Lucas) for his positive and thoughtful contribution.
I want to respond to specific points made in the debate, but also to take the opportunity, if Members will bear with me, to respond to comments by the hon. Members for Dunfermline and West Fife and for Wrexham about the projection made at the joint ministerial council last week. The JMC builds on the White Paper published in June, which sets out a strong and positive vision for the territories to build on their excellent facilities and ensure that, where appropriate, they can proudly retain their links with the UK for present and future generations. The White Paper sets out clearly the benefits and responsibilities of the relationship for the territories and the United Kingdom. As the hon. Member for Wrexham pointed out, it builds on work done by the previous Government as well, but we thought it important to set out in a White Paper the UK Government’s fundamental responsibilities and objectives to ensure the security and good governance of the territories and their peoples.
I want to say a little about the priorities for the Foreign and Commonwealth Office in driving UK Government apparatus to support the development of the overseas territories. We should focus on three areas: building stronger links with the UK; getting the territories the support they need; and working together on good governance, financial management and economic planning, where necessary. My priority in the first strand of the work is to encourage more trade and investment to benefit both the territories and the UK. I have already had the opportunity in my time as the relevant Minister to visit the British Virgin Islands, Anguilla and the Turks and Caicos Islands. That allowed me to see for myself what opportunities exist. Those are not just in the sectors where some of the territories are already strong; there may be opportunities to assist them in diversifying their economic base, whether by expanding financial services, assisting with UK investment in tourism, or using UK companies to help build and develop infrastructure. To that end, Lord Green, the Minister for Trade and Investment, and I discussed those issues with territory leaders and a selection of business representatives last Monday in the Foreign Office, and that meeting has the potential to be significantly productive.
The point that I want to emphasise is that building stronger links with the territories is not just down to the Foreign and Commonwealth Office, but is a cross-Whitehall effort. Every Department has written a paper setting out how it can help. Eight of my ministerial colleagues met the territory leaders last week. The Department for International Development is doing particularly valuable and significant work, particularly in St Helena, Montserrat and Pitcairn, and through its temporary assistance in the Turks and Caicos Islands.
Another important area of work is the strengthening of political links with territory leaders. That was the thrust of the JMC last week. We have upgraded the meeting to make it our annual summit, which enabled us to discuss a substantive and significant agenda and to agree for the first time a detailed communiqué setting out an ambitious programme of joint working for the year ahead. If colleagues have not seen that joint communiqué I would urge them to look at it, because it responds to the sensible and correct point made by the hon. Member for Dunfermline and West Fife about the action points and work streams that will flow from the JMC towards the next one, across a range of areas. I see the focus of the UK Government in the year ahead as assisting the territories with their priorities, rather than what we think their priorities should be. I took territory leaders to No. 10 Downing street to meet the Prime Minister—I understand that it was the first time that a British Prime Minister has met all the overseas territory leaders collectively—and the event was very well received and a positive time in all our diaries.
The second goal in my list of priorities is to make sure that the territories have the support they need. That was a common theme in the speeches this morning. We already provide significant development support, of which perhaps the most obvious example is the £350 million that we have provided for Montserrat since the volcanic crisis of 1995 to 1997, which destroyed the capital and economy; also, £247 million has gone to St Helena to build the airport, and for other aspects of its development.
In the context of supporting the territories to develop, a key element is making links with the Commonwealth. My right hon. Friend the Member for Saffron Walden will be pleased to hear that that is a significant thrust of our efforts, set out in the White Paper. As part of that approach, the secretary-general of the Commonwealth came to the JMC and made a presentation. He received questions and responded to points that were made, and said that he greatly valued the part played in the life of the Commonwealth by the overseas territories. I can reassure him that we are working with the secretariat to explore what more can be done. The territories already participate in some areas—not just the CPA, important though that is. Some of them have participated in events aimed at supporting small island states, which have been particularly valuable as the territories have many challenges in common with other small island states elsewhere in the world, including some governance challenges. We continue to encourage the secretariat to invite the overseas territories to participate in Commonwealth meetings.
It might help if I explained why we are in the situation we are in. We very much agree with my right hon. Friend the Member for Saffron Walden and the Foreign Affairs Committee that there should be a more formal tie between the overseas territories and the Commonwealth family, in the form of observer or some other status but, as Members will know, membership of the Commonwealth has to be agreed by a consensus of all Commonwealth Heads of Government, and the membership category is that of “sovereign state as full member”. In 2007, the Heads of Government endorsed the recommendation of the Commonwealth committee on membership not to establish any other status.
Officials have discussed different categories of membership with Commonwealth members, and it will come as no surprise that at the joint ministerial council last week territory leaders raised the matter with me, with other colleagues who were there and with the secretary-general. I have spoken to the Minister of State at the Foreign Office who has responsibility for the Commonwealth to see if we can work together to find a solution. Indeed, the Foreign Secretary told the Foreign Affairs Committee back in 2011:
“We are exploring the possibility of creating observer or associate member status of the Commonwealth, from which many overseas territories would benefit. We are still continuing to explore that possibility.”
Thomas Docherty
I am sure that the territories will be heartened by that. It would, however, be remiss of me not ask whether that was seen to be for Crown dependences as well as for territories.
Mark Simmonds
The constitutional relationships with overseas territories and with Crown dependences are very different, but the ongoing discussions should certainly involve both.
I want to move on to important issues that some Members have raised: good governance, financial management and economic planning. We take very seriously the responsibilities for the security and good governance of the territories, and we believe that what is good enough for the UK should be good enough for the overseas territories as well. One key aspect of the White Paper was the commitment to strengthen training and exchanges between the public services in the territories and the UK. Our jubilee programme, which is worth £500,000, will fund some of the exchanges, with UK civil servants going to overseas territories to assist in building capacity and in training public servants through the civil service learning service, and overseas territories public servants being facilitated to come to the UK.
On 16 October, I opened the first meeting, in the Foreign and Commonwealth Office, of the heads of public services, one purpose of which was to exchange best practice across a range of important areas for further work including procurement, codes of conduct for Ministers, parliamentarians and public services, and e-government—an area in which we think we can do significantly more together. However, as the hon. Member for Dunfermline and West Fife rightly said, it is not just about overseas territories learning from us; there are things we can learn from them.
Democracy is flourishing in most overseas territories, and I am delighted that the new Turks and Caicos premier, Dr Rufus Ewing, was able to attend the joint ministerial council last week. He was extremely warmly welcomed, and he made a significant contribution to all our debates. It is an excellent and positive development that democracy has returned to the islands after a difficult period. It is important also to recognise that all overseas territory constitutions are different. They have developed over time, most of them have been updated and they are not necessarily set in stone; they need to be debated and discussed over the coming years.
All Members who contributed to the debate mentioned election observers. We rightly encourage observers to monitor elections all over the world, to promote internationally accepted standards, and we encourage other confident and open democracies, including the territories, to welcome observers.
I have to say that we are slightly disappointed that Bermuda has not recognised the need for election observers. The Governor of Bermuda has suggested to the Premier that as a sign of a mature, advanced and open democracy the country might invite an external independent team—perhaps a Commonwealth Parliamentary Association group—to observe its elections, but unfortunately the Government have decided not to do so. I raised the issue with the Bermudan Attorney-General and Minister of Justice last week, and she assured me that she would reflect our views to the Premier. Interestingly, the example I gave her was the comparison with North Korea, which the hon. Member for Dunfermline and West Fife mentioned earlier. It is a positive sign, rather than a negative one, to accept external election observers.
The hon. Member for Wrexham is absolutely right about the need for more elected politicians to be involved as election observers. Although civil servants play a significant and important role, politicians can often bring a slightly different perspective—perhaps over a longer period, including during the campaigning before the election and what may or may not happen immediately afterwards, depending on whether it has been successful. I support the hon. Gentleman’s train of thought in that area.
The hon. Member for Dunfermline and West Fife talked about the electoral registration officers—EROs—in the overseas territories, and particularly in the Turks and Caicos Islands. We have included a partnership in TCI, and elsewhere, with an experienced UK election official. In TCI, the official supported the practical planning for the preparation of the new electoral roll, the training of election officials, and an arrangement for the counting and announcement of results.
As I mentioned, we have set up the jubilee programme to support training and exchanges between public servants in the territories and the UK, and a priority is to foster and support networks of professionals across the territories. I think that we will commend to the overseas territories the idea of a network of EROs, so that lessons can be learned and best practice put in place for future elections.
The hon. Member for Wrexham was absolutely right to speak about transparency in all financial matters. He will notice that in the White Paper there are two or three strands to that. The first is to ensure that overseas territories have in place proper legislation for appropriate and prudent fiscal and financial management. The Turks and Caicos Islands and the British Virgin Islands have that, as now do the Cayman Islands. The second strand is to ensure that we have proper, transparent, competitive tendering for procurement, so that there is no longer any opportunity for shenanigans. The UK Government have played a significant role in building capacity and in providing advice and training to enable that to happen.
I turn to the specific point about responsible fiscal and tax arrangements. Given the discussions held last week, previous actions relating to the overseas territories and the detail set out in the communiqué, both the UK and the overseas territories’ Governments accept the requirements to comply with international standards on tax transparency and financial regulation.
Tackling financial crime is important, as was set out at the JMC. Bermuda, the BVI and Cayman have tax information exchange agreements with the UK. The OECD, a global forum, says that the overseas territories meet tax transparency standards. I have met on a couple of occasions the impressive team that regulates the financial services sector in the British Virgin Islands, and there is a real desire in that sector to ensure that it keeps up to speed with international standards, which is what it is doing.
Overseas territories’ tax rates, of course, are their responsibility; individual territories have the right to set the tax rates appropriate for them. On secrecy, which the hon. Member for Wrexham alluded to, I would argue that they are at least as compliant as major financial centres in meeting international standards. We also have to be clear that revenues from the financial services sector make a huge contribution to ensuring that those overseas territories are self-funding, self-supporting and self-reliant.
Finally, the significance and importance of the relationship between the UK and the overseas territories has never been higher up the political agenda.
Thomas Docherty
The Minister is doing an excellent job of setting out in some detail the Government’s position on a range of matters. I appreciate that he has to cover a large number of issues, but before he finishes may I press him to confirm that the Government have full confidence in Governor Todd? The Minister will be aware that there has been media interest in the Turks and Caicos about the work that Governor Todd continues to do.
Mark Simmonds
As the hon. Gentleman may have picked up in his visits to the TCI and, to a lesser extent, to the BVI and elsewhere, there are always tensions between elected representatives and the Governors both in terms of who has responsibility for what and the perception—sometimes incorrect—that the UK Government are not always on the side of the elected representatives in a particular territory.
In a spirit of partnership and friendship, we should be listening to each other, but that does not always necessarily mean that we will agree. I have full confidence in all the Governors currently in place, and I said so forcefully at the JMC last week. Governor Todd in particular has done a significant job in running the interim Government who were put in place after the elected territorial Government were suspended, back in August 2009. On 9 November when the elections took place, he put the TCI in a significantly stronger place, across a whole range of areas, than the one in which they were in 2009.
Finally, I confirm that this significant area of policy will become increasingly important as we develop the workstreams highlighted in the communiqué. I am delighted that colleagues have expressed their positive desire to remain engaged and to make intelligent suggestions as to how we may develop the partnership even further.
Sir Alan Haselhurst
Before my hon. Friend concludes, will he say whether he will take away the comments on air passenger duty, which has a particularly perverse impact on the smallest territories?
Mark Simmonds
I apologise to my right hon. Friend. I was not avoiding air passenger duty; I just did not see the piece of paper I had written it on.
My right hon. Friend will not be surprised to hear that I was lobbied vociferously both by the leaders of overseas territories in the Caribbean last week and by the wider Caribbean community. He will also be aware not only that there was a review of the operation of APD but that there was a meeting fairly recently, between representatives of the Caribbean high commissioners here in London and a Treasury Minister, to discuss APD further and to understand the issues.
I suggested to both the territories’ leaders and to those elsewhere in the Caribbean that there had already been significant discourse between the Foreign and Commonwealth Office and the Treasury, and that discourse continues. Those Caribbean leaders need to provide us with evidence of the negative impact of APD, particularly on the tourist industry. Mixed messages and mixed evidence are coming through so far.
Thomas Docherty
The Minister may not be aware that the Eastern Caribbean economic union has seen a 20% drop in passengers from the UK since APD was introduced. In comparison, there has been a 1% drop in passengers going to the east coast of the United States, although I might be wrong. There is clearly evidence that the Caribbean is being disproportionately hit by the current APD arrangements.
Mark Simmonds
That is interesting, because it is not uniformly the case. There was a drop back in 2009, but that has not remained consistent, nor is it consistent across the board. There are countries in which tourism has gone back up, which is why it is a complex issue to analyse. We are aware of the issue, and my right hon. Friend the Member for Saffron Walden is right to put it in the way that he did. We are still in listening mode.
Mowden Hall, Darlington (DfE Jobs)
(12 years ago)
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Jenny Chapman (Darlington) (Lab)
It is a pleasure to serve under your chairmanship, Dr McCrea. I thank my hon. Friends the Members for Sedgefield (Phil Wilson) and for Bishop Auckland (Helen Goodman) for supporting me in preparing for this debate.
Mowden Hall is the workplace of more than 400 civil servants who support the education and well-being of children and families across the country. On 13 November, I received a letter from the Department for Education describing Mowden Hall as being in poor condition and requiring significant investment to remain in use. The letter said that the Department would be selling the site and searching for an alternative in either Darlington or Newcastle, which came as a surprise although not as a bolt from the blue.
Before 2010, the Department had secured funding and planning permission to build new offices in the centre of Darlington. The relocation would have brought jobs into the centre of town, providing public transport access and much-needed trade. The coalition Government cancelled the project almost immediately after taking office, saying that they were committed to remaining at Mowden Hall. All seemed relatively well at the time, but it did not ring true to me, given that the feasibility study for the new building highlighted the poor condition of Mowden Hall. It seemed pretty clear that at some point, the Department would either have to move from Mowden or invest heavily in it.
To be helpful to the Department, I arranged for a discussion between officials and a local developer, John Orchard of Marchday, which owns Lingfield Point in Darlington. The Lingfield Point site was built immediately after the second world war to house a wool factory by Patons and Baldwins, a leading British manufacturer of knitting yarn. At 2 million square feet, the site became the largest wool factory in the world. It is now one of the largest employment bases in the Tees valley, employing more than 2,000 people. The award-winning site is also home to the offices of significant north-eastern organisations including Darlington borough council, the NHS, the Student Loans Company, NFU Mutual and the Navy, Army and Air Force Institutes. It is a stone’s throw from the Independent Safeguarding Authority and can truly be described as a public sector employment hub. The business park even runs its own bus service to and from the town centre every half hour, alongside local bus services running to the site every 10 minutes.
In March 2011, discussions with the then permanent secretary and his officials to assess the possibility of a move to Lingfield Point were positive. Shortly afterwards, however, it became clear that any move was on hold and that the Department’s strategy, at least for the time being, was to stay put at the deteriorating Mowden Hall. It is not my intention to argue that the Department should retain Mowden Hall; a move is clearly justified. Nevertheless, the surprising element of the letter I received on 13 November was not that the Department had decided to move from Mowden Hall, but that it was considering moving its 480 staff members to Newcastle instead.
About 60% of the work force at Mowden Hall live in Darlington. The rest commute from neighbouring Teesside, Durham and North Yorkshire. The Minister, being familiar with the geography of the north-east, will know that Newcastle is 40 miles north of Darlington along a busy stretch of motorway. To reach the centre, staff would either have to drive past the Metro centre, which is legendary locally as a congestion hot spot, or travel via the Tyne tunnel, which has lengthy queues at peak travel times. Increased regional congestion and carbon emissions would be the unwelcome consequence of a move away from Darlington. Alternatively, staff could take a packed train, but the journey time—about half an hour, in addition to travel time into and out of Darlington and Newcastle town centres—would add about two hours to their working day. Other travel options from Darlington to, for example, Longbenton in Newcastle and back include two hours and 20 minutes on the train, four hours on the bus or two hours and 20 minutes driving.
Those travel times would make family friendly working impossible. Parents would find it harder to fit their hours around existing child care arrangements, which would increase their costs dramatically. According to Tees Valley Unlimited, our local enterprise partnership, the older, highly experienced work force would be less likely to commute to Longbenton and less likely to find alternative employment locally.
Phil Wilson (Sedgefield) (Lab)
I congratulate my hon. Friend on gaining the debate. My constituency takes in part of the borough of Darlington as well as part of south-east Durham. The issue is important not just for the town of Darlington but for local and surrounding areas. I receive letters and e-mails from people who work at Mowden Hall and places such as Newton Aycliffe. They say that if Mowden Hall is moved to Newcastle, there is no way that they will be able to get there and have a family life. I agree with the point that she is making.
Jenny Chapman
I am grateful to my hon. Friend for his intervention. People who live in outlying areas of Darlington such as Newton Aycliffe would have to get into Darlington to catch the train. An hour and 10 minutes would be an optimistic travel time for someone in that situation.
I understand that the Department will be responsible for the relocation travel expenses of staff commuting to an alternative workplace in Newcastle. What provisions has the Minister made to cover those costs? I hear that the Department may be required to cover staff travel costs for some years. Can she confirm that that is the case?
Staff at Mowden Hall make a substantial contribution to my local economy. The most recent information that I have been able to obtain from Tees Valley Unlimited suggests that nine are senior civil servants, 60 work at senior management grades 6 and 7, 58 work in operational management, 240 are executive grade and 80 work at administrative level. Those are senior posts providing expertise to the education sector across the UK.
Darlington is an attractive area principally because of its low cost base and highly skilled work force. In addition, the town has an excellent quality of life and an easy commute to work. Its main advantage is a stable work force and very low staff turnover, allowing for continuity of the specialist knowledge that makes a difference to children’s education throughout the country. The expertise at Mowden Hall has been built up over decades and includes school formation and investment, improvement and performance, school standards, school resources, early years, extended schools, special needs, safeguarding, international adoption, audit and free schools and academies. I understand that a free school is to be created at the old Mowden Hall, which I support and look forward to.
Mowden Hall has a talented, motivated and dedicated work force with skills that cannot be acquired quickly. A move from Darlington resulting in large-scale staff departures would damage the Department’s ability to continue its business. Schools and children’s services departments across the country rely on those skills. They are not easily, quickly or cheaply replaceable, and they should be highly prized by the Department. It is particularly worrying that the current uncertainty surrounding the future location of the Department’s offices is causing some highly skilled staff members to consider departing from the service sooner than they otherwise would have. I would be grateful for an assurance from the Minister that staff at Mowden Hall will not be required to make decisions about early exit before gaining certainty about where they will have to work.
I am grateful to the permanent secretary for meeting me and representatives from Darlington, including council leader Bill Dixon and the leader of the Conservative group, Heather Scott. Ministers and officials understand the pitfalls of a move away from Darlington, and I know that they will be mindful of the potentially damaging impact of a move on the Department’s performance. I know from those discussions that business continuity is a key concern of the Department in considering where to move the jobs. Staff turnover at Mowden Hall is low. The site has played a leading role in Government initiatives, such as free schools and academies, and we are keen that that role continues in Darlington.
In addition to the 480 DfE jobs at Mowden Hall, there are a small number of Ministry of Justice and Department for Business, Innovation and Skills staff. Will the Minister say something about the future of those posts? Some 500 staff at Mowden Hall are employed by Capita, servicing a DfE contract. Can the Minister say what discussions she has had with Capita about its future accommodation needs?
My principal arguments for keeping the Department’s jobs in Darlington centre on the unnecessary costs of relocation and the potential loss of skills to the Department. Also of huge concern is the impact on the local economy of the loss of such a large number of highly skilled jobs.
Although it is more of an issue for me, as the local representative, than for the Minister, it is worth outlining that Tees Valley Unlimited’s economic model forecasts that the economic impact for Darlington is direct employees plus indirect employees times the median wage of £19,000 per annum, giving an annual economic impact figure for Darlington of up to £21 million. It is estimated that around 70% of that sum is spent in the local economy.
Darlington’s unemployment rate is historically and currently higher than other potential locations in Newcastle. The decision to leave Mowden Hall is the most important issue facing Darlington today. There is cross-party support to keep the jobs in the town. We are not making party political points about this. We have support from the borough council and the local business community, the Public and Commercial Services Union and all political parties. The foremost regional newspaper in the country, The Northern Echo, with its proud history as a campaigning title, has lent its support to the campaign to keep jobs at Mowden Hall. Its Save Our Jobs petition has already attracted more than 1,000 signatures. There is no doubt that the task of persuading the Department to stay in Darlington is a whole-town effort, undertaken with confidence in what we have to offer and an understanding that these jobs are critical to the future economic success of our area.
The case for remaining in Darlington is persuasive. There are at least two high-quality alternatives in Darlington. This is a critical decision for our town. For business continuity, integration with Capita, retention of skills and the sake of the local economy, I trust that the Department will decide to keep these jobs in Darlington.
The Parliamentary Under-Secretary of State for Education (Elizabeth Truss)
I thank the hon. Member for Darlington (Jenny Chapman) for her excellent, insightful contributions to the debate and for tabling it. She made a persuasive case, not just in relation to the specific roles in the Department for Education, but for all employers to locate their operations in Darlington because of the cost-effective nature of the location and the high level of skills in the local work force. I hope that message about the value of Darlington is heard more widely by other potential employers who might think about locating in the north-east.
I note the hon. Lady’s points about the specific skills of Department for Education officials in Darlington. I pay tribute to the staff who work at Mowden Hall in Darlington for the contribution they make to the efforts of the Department. She outlined well how many different areas are supported from the Darlington office, including free schools, academies and early years, which is of particular interest to me.
The Secretary of State said that he wants the Department for Education to be the best Department in Government and to be a place where the best, most talented people want to work. I agree that that is an important objective. Given the general economic climate, we need to ensure that we are getting value for money and that we have a highly motivated and highly skilled work force. That is a key objective for the Department. The DfE review considered how we can achieve that and proposed fundamental changes to our ways of working, designed to make the Department the best it can be. Those changes include greater flexibility in how we structure and manage teams—I use video conferencing a lot to communicate with Department officials located in other parts of the country—and focusing on outputs rather than processing things internally, which is what we want the Department to do and what we are asking schools and children’s services to do.
I am fortunate to work with excellent civil servants on the many areas of policy that I cover. Over the past two years, the Department has achieved a great deal in terms of the reform agenda. We are also working on reforms to early years and right across children’s services and education. We in the Department need to set ourselves similarly high standards to those we ask of schools and children’s services throughout the country.
Many of the changes I have outlined will be welcomed by staff, because everybody, whatever job they do in whatever walk of life, wants to know that they are having a positive impact on the real thing that they do, which in our case is helping children in education and in the adoption process or in care. Staff will welcome the opportunity to spend more time on important front-line work. I recognise that other changes will be difficult, for instance, site closures and headcount reductions, but as a Department we have a duty to look for ways to secure value for money for the taxpayer.
As we outlined in our letter, Mowden Hall is no longer fit for purpose; it is old and would require substantial investment to upgrade. The hon. Lady confirmed that she agrees, so we all agree. I welcome her support for the proposed free school on the Mowden Hall site.
As the permanent secretary outlined, we are committed to a presence in the north-east of England. We announced plans to identify a new site in the area on 13 November. We are searching for a new location and are considering the following criteria. Ideally, the site should be an existing Government property. If that is not possible, it should be new leasehold or should share premises with another Department or a local council. It must be affordable and be well connected with transport, relating to the hon. Lady’s well-made point about how staff are expected to get to and from work and the travel difficulties that people in the Darlington area may face. It must have good quality facilities, and it must be available within reasonable time scales. We will do everything we can to minimise impact on staff and local areas. I took on board the hon. Lady’s points, which I will feed into our process and provide to the permanent secretary, about the impact on local employment and the area’s economy.
I am grateful for the hon. Lady’s positive, constructive approach in helping to establish a working group to identify potential sites in Darlington. Her positive engagement is welcome. I have spoken to the permanent secretary about this matter and he wants to continue the dialogue to ensure that she and other interested parties are involved in ongoing discussions, so that the decision does not just come out of the air, and people who represent staff and residents in Darlington are involved in the decision-making process and able to add value to it.
The Department expects to develop a shortlist of available property options in the region from January. I hope that the Darlington working group will be able to field a proposal for inclusion among the options to be considered. The hon. Lady made suggestions about two locations, which in her view are high quality and should be considered by the Department. I hope that she has raised those suggestions with the permanent secretary or will do so in a forthcoming meeting with him, to ensure that he is aware of them.
Once a shortlist of options is available, staff will be consulted about the effect of a move on them individually, and support will be put in place to help staff with a move if necessary. I hope that answers the hon. Lady’s question about whether staff are being asked: they will only be asked to consider what they want to do once a decision about a site has been made. If that is wrong, I shall write to her to confirm otherwise, but I believe that to be the case.
On the hon. Lady’s other questions, we will consult on such things as travel costs and how staff travel costs will be paid for, enabling us to determine the Department’s relocation costs and, therefore, to put together an overall budget. At present, we do not know exactly what travel costs will be entailed. We will evaluate the costs of all the different locations, once we are down to our final decisions, so travel costs will come into the final decision about the most appropriate site for relocation.
The hon. Lady also asked about others with a role. I have not had a discussion with Capita—in reply to her specific question—but I can certainly follow things up with the permanent secretary and get her an answer. Nor do I have any information specifically about the Department for Business, Innovation and Skills jobs, as my responsibility is for roles connected with the Department for Education. We are keen to ensure that the Department is using its resources as efficiently as possible, but we are clear about not wanting to lose expertise that has contributed to the Department’s success and that might be located in diverse geographical areas throughout the country, which is why we are anxious to maintain a presence in the north-east.
Once we have gone through the process and know where we are relocating, we will work with unions to develop a support offer for staff. The move will affect staff differently; some might live closer than others to the new site and some might have disabilities or be carers or part-time workers, so we need to take that into account. Our support offer will be responsive to individual circumstances and could, for instance, include elements such as flexible working arrangements. As I have already said, our Department is pretty forward-looking with such arrangements; we are very much focused on what people contribute, because that is a more effective approach to work, rather than encouraging presenteeism. We will continue that approach when we put our new proposals into place.
To conclude, I hope that the hon. Member for Darlington continues her discussions with the permanent secretary and the working group. Her input has already been extremely valuable, and her concerns are being listened to in the Department. To be clear, vital departmental functions and knowledgeable hard-working staff are based in Darlington, and I am very grateful to the hon. Lady for her assistance in finding a suitable building to which the Department could relocate.
Unmanned Aerial Vehicles
(12 years ago)
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Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)
It is a pleasure, Mr Leigh, to take part in this debate, not least because Westminster Hall is not quite as cold as elsewhere. I thank The Times for pointing out what the two Front Benchers will say in the debate: apparently, the Labour spokesman will ask for new rules of engagement, and the Minister will not entirely agree with the notion that our pilots are not sufficiently trained. I leave it to them to say their piece, but there are some areas I will not touch on because nothing is to be gained from repetition.
I want to start by defining the parameters of this debate. The Library helpfully says that unmanned aerial vehicles—UAVs—are used by the UK armed forces and are
“more commonly known as drones. These are remotely piloted aircraft that range from simple, hand-operated systems to high altitude, long endurance systems similar in operation to small aircraft.
UAVs are primarily used to gather intelligence and provide a surveillance and reconnaissance function for the armed forces. Only a handful of systems are capable of carrying weapons. The only armed UAV used by the UK Armed Forces is the Reaper and it is only used in Afghanistan.”
It is important to remind ourselves of those distinctions and limited use. The Library continues:
“Remotely piloted aircraft operate on the same rules of engagement as manned aircraft. However the growth in the use of armed UAVs, particularly by the United States, raises a number of moral, ethical and legal issues.”
It is the moral, ethical and legal issues that I want to examine more closely.
We can see in Hansard some of the questions that are being asked, and that the debate is about collateral damage and loss of life, which some people find difficult to explain. A wider argument is that if a country has armed forces, it uses lethal force, and it does so for a benevolent purpose: defence. We have not had much chance to talk about that, and I thought that such a debate would be suitable in Westminster Hall.
To put the matter into context, I understand that, depending on who is counting, between 76 and 80 countries have UAVs, but only three—the United Kingdom, the USA and Israel—use armed drones in military operations. The Minister will be more aware than I am that this country is investing extensively in that area, whether it is in the provision of specially designed headquarters for the Reaper station here or the Anglo-French initiative for Scavenger long-endurance UAVs, so there will be even further development.
That is combined with the strange situation that almost no one in this country under the age of 30 has a defined sense of who or what the enemy is. During the cold war, it was easy to define the enemy, which was another nation state. We now face warfare in which the enemy is no longer a nation state, but a group of individuals who are far away. The process is geographically remote, and some of the warfare engagement is physically remote. That creates problems.
Lethal force is a process by which we license to kill. Curiously, in this country that phrase is associated with James Bond more than with what our armed forces are doing. Politicians should spend more time thinking about the use of lethal force, and when it is appropriate. We need to take the public with us, and it has been clear, particularly when reading newspaper reports on the use of drones in Afghanistan, that in many ways we have not taken the public with us. In areas such as Pakistan, there is an argument that the fallout is greater than the benefits.
Rehman Chishti (Gillingham and Rainham) (Con)
I congratulate the hon. Lady on securing this important debate. On the use of drones in Afghanistan, does she agree that we need clarity from the Government on whether they are sharing location intelligence with the United States on drone strikes in Pakistan? If we want to win the hearts and minds of the public, we must carry them with us, but when they see hundreds of lives lost in drone strikes, they turn against the west and pose a danger to our national security.
Ms Stuart
That is an argument, but I do not want to go down that road. The hon. Gentleman has had an Adjournment debate on that matter, which I read with great interest, but I want to take in new territory. Parliament must explain why it does certain things, and take the public with it. The 1868 St Petersburg declaration refers to the requirement
“to conciliate the necessities of war with the laws of humanity.”
How to get that right is an ever-enduring struggle, and I am not sure whether we have debated that sufficiently here. That is why I am pleased to have this debate. We have become casualty-averse, and there is a debate to be had about moral equivalence, and whether it is morally superior to deal with threats remotely instead of in hand-to-hand battle. I want so spend some time discussing targeted killing, which is the area of the drone debate that causes greatest concern about whether it is right.
A defence research paper on the ethics of targeted killing defines it as
“a pre-mediated state sanctioned killing of a named individual beyond the territorial and jurisdictional control of that state, in an international or non-international armed conflict or hostilities against terrorist or non-state groups.”
In other words, we are not talking about assassination or illegal killing for purely political purposes, and that is what people find most difficult to get their head round.
Some people argue that military historians may view 19 January 2010 as being as significant as August 1945, when the bomb was dropped on Hiroshima, because technology suddenly allowed a move to something that was not sufficiently explained or spelled out in the ethical framework under which we operate. Two things happened: one was the killing in Dubai; the other, much more importantly, was in Pakistan where a US unmanned aerial vehicle killed six alleged militants in North Waziristan. That takes us to the legal and ethical dilemma that we must examine more closely.
On the history of lethal force, it may be worth reading “My Early Life” by Winston Churchill in which he describes a moment during a cavalry charge:
“Suddenly in the midst of the troop up sprung a Dervish. How he got there I do not know. He must have leaped out of some scrub or hole. All the troopers turned upon him thrusting with their lances: but he darted to and fro causing for the moment a frantic commotion. Wounded several times, he staggered towards me raising his spear. I shot him at less than a yard. He fell on the sand, and lay there dead. How easy to kill a man! But I did not worry about it. I found that I had fired the whole magazine of my Mauser pistol, so I put in a new clip of ten cartridges before thinking of anything else.”
The question these days is about the moral position of asking a man, or giving him the legal authority, to kill another within a framework that we find acceptable, because some people seem to think that if it is hand-to-hand combat, it has a greater moral force or value than if it is remote. I would argue that technology takes us to an ethical area where the framework might have to be configured slightly differently, but what the state is asking of the individual has, in many ways, not changed much. People are worried about remoteness, and it is worth remembering some experiments that were done in the 1960s in America, in the wake of the Adolf Eichmann trial, about the perils of obedience. Individuals were tested on how much pain they were willing to inflict on someone just because they were ordered to do so. In a military context, it is very important that we continue to keep that in mind.
The United Kingdom has always been clear that the chain of command, when it comes to killing or the use of lethal force, has always been retained within the military, whereas the United States and the CIA, as I understand it, are much more prepared to use civilian intelligence as part of that chain of command. That causes its own legal and ethical problems, because there is an argument about whether the civilians in that chain relinquish their right not to be targeted under international humanitarian law.
Rehman Chishti
On targeted killing and drones, the United Nations rapporteur, Christof Heyns, is now looking into extra-judicial killing in relation to the use of drones by the United States. Does the hon. Lady also think that that needs to be extended to see whether it can be applied to where the United Kingdom uses its drones?
Ms Stuart
I do not yet know, because I do not know what the outcome is, but to my mind, it is very significant that in the United Kingdom it is within the military chain, whereas in the United States it is not.
I am not trying to get us to ask today, “Is that particular application right or wrong?”. In the context of defence and us as parliamentarians, who are asking an Army and a public to order the use of lethal force, I want us to debate what the framework should be, rather than concluding whether it is right or wrong. I am also worried that the further away in the globe something happens, the easier it is—and the happier we seem to be—to jump to conclusions one way or another.
Rehman Chishti
I thank the hon. Lady for giving way again. My final point is with regard to the policy and the criteria. Drones were operated by the United Kingdom on 7 October 2007 in Afghanistan, so it is for many years that we have not had the criteria, policy, rules and restrictions, whether under a different Government or this Government. I absolutely agree, therefore, that it is vital for us to get it right.
Ms Gisela Stuart
Until we get that right, perhaps we all ought to become a little more articulate and explicit about where and when we are prepared to say that something is right or wrong. One point that I was trying to make at the beginning of my speech is that for those over the age of 30 who grew up during the cold war, the enemy was very visible—it was another nation state, very close to home—and the space of theoretical ethical argument tended to be much narrower than it is now, when the war is happening on the other side of the globe. We should face up to that, and given that the Government are intending to spend extraordinary amounts of money on future investment, and that we have international co-operation, this place needs to be aware of what the rules are.
I want, therefore, to draw the Minister further on a number of parliamentary questions that have been asked. First, am I right in assuming that the United Kingdom has no plan to change the operational kill chain, as it is called, to be anything other than within the military? If that is so, does he agree that that ethical dimension must play an enormously important part, as an institution of the military, in their continued training, and will he give a commitment on that? Secondly, the Minister was asked when Watchkeeper will see active service, and the answer was that it will be at some stage or another, but we cannot yet tell. He said:
“The Ministry of Defence remains committed to deploying it to Afghanistan at the earliest opportunity.”—[Official Report, 29 November 2012; Vol. 554, c. 461W.]
It would be helpful to hear how early the earliest opportunity is.
Thirdly, there was a question about unmanned aerial vehicles from the new aircraft carrier for surveillance purposes. I know that there has been a string of questions about whether that is within the remit, and the latest I heard from the Minister was:
“Although not all would be suitable for carrier operations, the UK has previously conducted trials with a Scan Eagle UAV flown from a frigate and is currently considering another such concept demonstration.” —[Official Report, 26 November 2012; Vol. 554, c. 30W.]
Has there been any progress on that?
Above all, I would like to hear whether the Minister is contemplating any changes to the ethical rules, and if he does so, at what level will that happen? Will it just be within the military, and does he have any concept of a time scale? Will it go in tandem with the greater investment? As unpopular a view as this may be, I think this is a technological development in warfare that—if used within the right constraints and controls—is with us, and we had better make the best of it.
Nick Smith (Blaenau Gwent) (Lab)
I congratulate my hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart) on securing this important debate. As a member of the Select Committee on Defence, she has considerable knowledge of such matters and it is interesting to hear her views on the issue.
Unmanned aerial vehicles can play a crucial role in keeping our servicemen and women on the front line safe. We know that the military operate in a hostile environment on the front line in Afghanistan, and convoys provide a target for rebels and improvised explosive devices. However, with the ability to scout their route with surveillance drones, commanders on the ground can avoid potential hazards quickly. Drones can also take the place of human pilots when carrying out dull, dangerous or dirty jobs, such as repetitive reconnaissance work, surveillance in hostile territory, or flying through areas where chemical or biological weapons have been used.
We can acknowledge that drones save the lives of many in our armed forces, but we must accept, as others have said, that there are civilian casualties and deaths from drones. That is principally an issue in Pakistan, and as “Panorama” reported yesterday, it affects real people, young and old, and has an indelible and devastating effect on their families and local communities. Therefore, drones must be used in accordance with international law, with every effort made to minimise civilian casualties.
John McDonnell (Hayes and Harlington) (Lab)
I point to the Medact report that was launched a few months ago in the House of Commons—I was involved in that—which says that the weapon is not damage-free for users. We now have significant medical evidence from monitoring the psychological effects of drones on those who are engaged in their use. Although it initially appears to have no effect, it undermines psychological well-being.
Nick Smith
My hon. Friend makes a fair point. More research must be done in this field. It could be very important.
Like regular manned aircraft, drones come in many shapes and sizes. I understand that the Global Hawk has a wingspan of 116 feet, while the technology is developing so quickly that we may soon see drones the size of insects. What is going on is incredible. Things are moving very quickly. The US air force now has more flight hours with drones than with manned aircraft. This innovation will see all branches of the armed forces benefiting from the technology. It has been reported that the Royal Navy is investigating the development of marine drones to detect mines in important shipping routes.
Developments in the military sphere can also lead to changes in routine or unpleasant jobs in civilian life. We read that old silos in Sellafield that were sealed off and left undisturbed since the 1950s are finally being examined by scientists using drone technology. Who knows what we could learn from those important investigations? Difficult or repetitive tasks, such as patrolling borders or monitoring weather patterns, could also be made easier.
With important work being done on the front line and potentially life-saving developments in the pipeline, this technology offers significant capability and may soon offer a range of important domestic applications, so it is essential that we have an open debate about both the ethics of drones and their practical deployment. This is an important debate, and I am glad that we are starting to have it.
Mr James Gray (North Wiltshire) (Con)
I apologise to the hon. Member for Birmingham, Edgbaston (Ms Stuart) for having missed the first few moments of her very interesting remarks. I was held up elsewhere. I apologise for that to her and to the House. I also apologise to Mr Speaker because I did not intend to speak in the debate and therefore did not write to him on the subject. However, having heard the very interesting contributions from the hon. Lady and from the hon. Member for Blaenau Gwent (Nick Smith), I hope that the House will forgive me for expressing a few ill formed thoughts. That may not take up much time, and we have plenty of time available.
I congratulate the hon. Lady on raising the issue. She is right to say that discussion about the ethics and morals surrounding the use of unmanned air vehicles is as great as or greater than discussion about the ethics and morals associated with armaments or any warfare that exists. It is a huge ethical problem and one that needs to be addressed. She is right to say that so far we have addressed it too little in this place, so I congratulate her on raising it. I listened carefully to her and I commend the extremely subtle and intelligent way in which she approached the issue. I agree very much with every aspect of what she said.
None the less, there is a series of misunderstandings in the world about the use of UAVs. The word “drones” itself often brings into people’s minds an image of something that is almost by definition worse than any other kind of warfare. If we asked people out in the street, “What do you think of the use of drones—unmanned vehicles firing weapons at civilians in Pakistan, for example?”, they would say, “That is absolutely disgraceful. It is scandalous. We must stop it. It is wicked. It is wrong.” There is a significant degree of misunderstanding in the public domain about the use of these vehicles. Therefore, it is right that we in this place should try as best we can to correct it.
There are two aspects to the ethical considerations. First, there are those who say that the use of any weapon of this kind at all is illegal and wicked and should not be allowed. That was said by perfectly good pacifists in this building for many hundreds of years. They would say that any weapon that potentially kills people is a bad thing and should not be allowed, and we should disarm and turn our weapons into ploughshares, or words to that general effect. That is a perfectly legitimate, although in my view incorrect, stance.
The motto of my regiment, the Honourable Artillery Company, is “Arma pacis fulcra”, which is of course the Latin for arms are the balance of peace. I have always held very strongly to that. We won the cold war not because we disarmed, but because Margaret Thatcher took a tough line by arming the United Kingdom and supporting the United States in our nuclear deterrence. That is why the Soviet Union fell. Arms were very much the balance of peace in that context.
Therefore, to those who say that in any conditions UAVs are by definition a bad thing, I simply say that the same could apply to almost any weapon or piece of warfare that they care to mention. Of course, the tragedy is that people are killed in wars. An even greater tragedy is that civilians are killed in wars. That is an unacceptable and unforgivable thing, but unfortunately it does happen. Therefore, one of the important things that we must do in considering warfare is to work out ways in which civilian casualties—collateral damage, as it is rather heartlessly called—can be minimised. We must find ways of minimising the damage to civilians and those who are not involved in the conflict.
In addition to the belief that all weapons are a bad thing, there is a strange piece of psychology that people seem to have in their minds. The hon. Lady touched on it in her interesting tale about Winston Churchill in a cavalry charge at, I think, Mafeking. Is shooting a man from a foot or two feet away more or less ethical than firing a weapon in Nevada that kills people in Afghanistan? Most people would say that Churchill was courageous: he galloped into the teeth of the enemy and fired. He fought a person: he looked him in the eye and shot him. That is courageous. However, a technician fiddling with a computer in Nevada, who will potentially kill hundreds of people, is somehow being cowardly. He is hiding behind technology and saying, “We want no part of that; I’m doing it remotely.”
It was interesting to hear the intervention from the hon. Member for Hayes and Harlington (John McDonnell) on the psychological effect that there may be on people who are firing these weapons at remote distances. Of course they are aware of what they are doing and of course they will be affected by it for the rest of their lives. The notion that because they are in a bunker in Nevada, they are somehow less affected by it than the chap on the front line is incorrect. The hon. Gentleman made an interesting point on that subject.
Ms Gisela Stuart
I am very grateful that the hon. Gentleman mentioned that point, because that is where the institutional ethics of the training of our military come in to ensure that there is awareness that on the other end of every piece of machinery there is a human being and that therefore the relationship and the ethical considerations must remain the same. It is a constant battle of vigilance to ensure that that is never lost.
Mr Gray
The hon. Lady is absolutely right. It is terribly important that we train all our people in the military and working in foreign affairs and elsewhere that there are human beings at the end of the weapon, whether that weapon is a knife used on the front line or a UAV from which a missile is fired remotely.
On a recent visit to Afghanistan, I was chilled by the conversation I had with a 19-year-old sniper in The Rifles. I said to him, “How many kills have you had?”, and he said, “Thirty-seven confirmed kills, sir, and about 40 or 50 others unconfirmed.” There was a young man of 19 who knew that he had killed 37 people—I think it was 37—and had probably killed 70 or 80. Is the psychological effect on him any greater or any less than the psychological effect on the man sitting in the bunker in Nevada or wherever it may be who is called on to press the switch that finally fires the weapon from the UAV?
There are two elements of concern. One is about the use of weapons themselves, which I think is a perfectly reasonable concern, although not one to which I would subscribe. The second is the question whether a remote killing is somehow less brave or less ethically supportable than an immediate killing. Again, I would not support that particular angle.
That leads me away from the negatives that people might raise on the subject of UAVs to the positives. As I said, it is terribly important that in all our warfare, whatever we are doing, whether it involves planes, bombs or UAVs, we seek to minimise civilian casualties. The use of UAVs and this extremely complex high technology is precisely the thing that will reduce collateral damage. We can, by using these things, spot a particular person from a very great height and track his movements. We know precisely who he is and can kill him very precisely, very technically, and minimise damage to civilians who may be nearby. That contrasts sharply with the use of artillery, for example. One round takes out a good square—1,000 metres by 1,000 metres—and who knows what is in that good square? It contrasts sharply with the use of bombs of all kinds, which also involves very substantial collateral damage. The use of these weapons is very particular and very precise and for that reason must be supported.
John McDonnell
There is a problem with mythologising drones by saying that they are precision weapons that can target individuals and not have an impact on innocent civilians. We now know, from more detailed research, that in Pakistan, for example, at least 3,225 civilians have been killed as a result of the use of drones. Therefore, it is also important not to exaggerate the clinical effect of these weapons.
Mr Gray
The hon. Gentleman is absolutely correct; every single civilian death that has occurred as a result of the use of drones, or through any other act of warfare, is to be regretted. He mentioned that 3,000 civilians have been killed through the use of drones in Pakistan, but many times that number of civilians have been killed in Afghanistan, Iraq and many other theatres of war across the world—collateral damage—by bombs and conventional warfare of one kind or another. The deaths are questionable, and I will come on to how UAVs are being used in Pakistan, in particular, across the border from the theatre of war.
Every death is regrettable. As the technology develops, it becomes more accurate and more reliable, so the risk of collateral damage lessens, whereas conventional weapons of warfare are no more accurate than they ever were. Indeed, one could argue that because such weapons are covering bigger areas, they are becoming less accurate, so the likelihood of collateral damage is greater.
The hon. Member for Hayes and Harlington brings me to where and how such weapons should be used. Most are used for surveillance, not as weapons. They are not armed. They provide a fantastic resource for our forces in Afghanistan and elsewhere, with their ability to see what is happening on the ground over a large area for an extended period. They can hover for significant periods over an area, which a plane or helicopter could not do. Their value as surveillance machines is incredible, even if they are not armed. We must be extremely proud of the development of such technology and encourage it in every possible way.
The hon. Gentleman is right to say that if we were to look at a battlefield 50 years from now, we would be likely to see a significant part of it dominated by UAVs. They will be used extensively in battlefields in future, which I welcome for several allied reasons. The first reason is accuracy, which may not exist at the moment, but I hope such weapons will become increasingly accurate in future. As the hon. Member for Birmingham, Edgbaston mentioned, war is no longer nice and easy, state on state warfare—invade that country and we can sort them out. It was nice and easy to do in the Falklands war and nice and easy to do in Gulf one, but warfare like that no longer exists. Civilians and all kinds of people are now mixed up in it. Wicked people often use civilians as shields. Accuracy is terribly important.
Secondly, maximising the effect while minimising the cost is terribly important. Of course, we can pile in tens of thousands of foot soldiers, who will slog around large parts of the theatre of war—often without ever seeing the enemy at all—but it costs an enormous amount of money. Of course, we can use conventional weapons of one sort or another, but they cost an enormous amount of money. By comparison, UAVs cost remarkably little because they can fly for a very long time and never fire anything, or if they do fire, the weapons need not be as expensive as conventional weapons often are.
Thirdly, there is no question about it; they are much safer for our own forces than most conventional warfare. If we send soldiers into the theatre of war to fire a tank or an artillery piece, take part in an infantry attack or, as Churchill did, gallop against the whirling Dervishes at the battle of Mafeking—I think it was the Dervishes—we are putting our own troops in significant danger. The worst that can possibly happen with UAVs is that they will be shot out of the sky. Not a single person will be killed if they are disabled, but that does not apply to any other type of warfare. There are huge benefits to be gained from the standpoint of the security and safety of our troops.
I shall make my final point briefly. The hon. Lady is absolutely correct: such weapons in the wrong hands or used incorrectly could become terrible weapons of war. We should never allow that to occur. It is vital that we know precisely who is allowed to use them and under what conditions. What are the rules of engagement? What is the chain of command? Who has the authority to use them and who does not? Is their use purely military or could other Government agencies use them in future? If so, who will authorise that use? What uses are they authorised for? Are they to be used entirely against military targets? Are there conditions under which they could be used against a civilian target? If we knew that a terrible dictator was driving along in his car, for example, would it be right to use a military UAV to kill him? Possibly. Possibly not. We need to know precisely.
The debate that the hon. Lady has opened is extremely important. UAVs are potentially enormously powerful and important weapons and vehicles. They could be of huge benefit to Britain as a war-going nation, but could be of huge disbenefit if they fell into the wrong hands or were used incorrectly. She is right that now is the time to initiate a widespread, deep and ongoing debate about precisely what these things are, what they should be used for, what the rules of engagement are and who should be allowed to use them. If we do that, this afternoon will have been well spent.
Mr Edward Leigh (in the Chair)
The battle of Omdurman was in Sudan. Mafeking is in South Africa. I am glad the hon. Gentleman is not driving a drone at the moment.
Thomas Docherty (Dunfermline and West Fife) (Lab)
I am grateful for the opportunity to speak in the debate. It is a pleasure to serve under your chairmanship, Mr Leigh—for the first time, I think—if only because you have given the hon. Member for North Wiltshire (Mr Gray) a history lesson.
I congratulate my hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart) on securing this important debate. She has brought to it the same level of expertise and knowledge that we are lucky enough to draw on in the Defence Committee, where she is also a voice of moderation and reason.
The history of warfare is one of innovation and, some would argue, progress, although I am not sure that the latter view is always valid. No one is clear about which of the city states was the first to deploy ballistic weapons, but it is fair to say that those were first used to great effect by the Romans in defeating the Greek hoplite phalanxes between 300 BC and 100 BC; it was the first time that stand-off weapons were used on a large scale. To pick up the point eloquently made by the hon. Member for North Wiltshire, at that point stand-off weapons were still limited by the kinetic capacity of the thrower or archer.
The first recorded use of gunpowder on the battlefield was in the 13th century. It was used in—I will try to pronounce this correctly, Mr Leigh; I am sure that you will correct me if I get it wrong—Ain Jalut in south-east Galilee by the Egyptian Mamluks against the Mongols; my hon. Friend the Member for North Durham (Mr Jones) was there at the time and will correct me if I am wrong. The Chinese are known to have invented gunpowder, although we do not have an earlier record of their use of it on the battlefield.
The Mamluks in Ain Jalut represent the first recorded use of hand cannons, and they were the first to cause the Mongol horsemen to turn back on their ride westwards. That is significant because it is the first recorded indication that the capacity for ballistic weapon use need not be limited by the human kinetic ability to pull or throw.
We then go forward to the 16th century and the decline in the use of pikes and halberds. Until the middle of the 17th century—probably the end of the civil wars in the British Isles and slightly later in continental Europe—the pike is still the weapon of choice for generals for turning the tide of battle. By the middle of the 17th century, pikes are in decline and there is the rise of the musketmen.
Mr Kevan Jones (North Durham) (Lab)
I think my hon. Friend has inadvertently forgotten the effectiveness of the archers. [Interruption.]
Thomas Docherty
I will not come between blue-on-blue discussions. I think a similar gesture was offered to the Prime Minister at last night’s 1922 committee discussion on gay marriage.
My hon. Friend is right to mention archers; he is thinking particularly of 1415 and the battle of Agincourt. Archery was an extension of the ballistic weapons used in ancient times, but he is right to mention it. The archers were underpinned by the cavalry charge, at the end of the battle, by King Harry’s noble British troops—many were Scots and Welshmen who, as ever, came to his rescue—who defeated the French.
Let me talk a bit more about warfare between the French and the British.
Mr Edward Leigh (in the Chair)
Order. Are we slowly arriving at the 21st century?
Thomas Docherty
We are, although I hope you will bear with me, Mr Leigh.
If we go forward to 1745, we find the Duke of Cumberland fighting in the battle of Fontenoy, during the war of the Austrian succession. Despite the use of ballistic weapons, he invited his French counterparts to fire first, although it is worth noting—this is the key point—that he had moved some distance back before inviting them to fire on his troops. As ever, the general was not in the firing line.
Moving forward to the 21st century, we see that UAVs are a logical extension of the use of such stand-off ordnance, which the hon. Member for North Wiltshire so eloquently discussed. As he said, if we look at the history of warfare, it is difficult to see a coherent argument pointing to a significant difference between the use of armed UAVs—it is important to note that the debate is about UAVs, not armed UAVs, although it has inevitably turned into a debate about armed UAVs—and the archers of Agincourt, the artillery of Fontenoy, the Mamluk gunners of Ain Jalut or the Roman archers of the 2nd century BC. However, in the modern world, our values mean that our sense of moral repugnance at the death of any civilian or military personnel has come a long way since the Duke of Cumberland so graciously invited the French to fire first on his British forces.
It is worth talking about not only armed UAVs but the important role played by unarmed UAVs. In an answer given on 30 October, Lord Astor said that only one of the five types of UAV that we currently deploy in Afghanistan is armed. The Minister will correct me if I am wrong, but I think that, of the 5,000 sorties that have been carried out in the past 12 months, only a handful have been carried out by the Reaper; the vast majority have been reconnaissance missions, using the ISTAR—intelligence, surveillance, target acquisition and reconnaissance—UAV, which is there to support our troops.
I pay tribute to the hon. Member for North Wiltshire, who organised the all-party group on the armed forces welcome for our brave men and women returning from Afghanistan and Libya. It is worth placing on the record not only our thanks for the courageous work that our personnel do in Afghanistan, but the fact that we remain committed to giving them the best support we can in their operations. I challenge any Member of the House honestly to tell me that the support our armed forces have when they are under fire would be enhanced if we removed the UAV capability from the field of operations.
The Minister with responsibility for procurement is here, and I welcome him to his post; this is the first chance we have had to debate. I hope he will not mind my saying that his predecessor is sorely missed by the British defence industry and all of us who are interested in it; he had a real passion for, and a real knowledge of, the field. However, I look forward to working with the current Minister in the remaining two and a half years before the general election.
Perhaps the Minister can answer a few questions that my hon. Friend the Member for Birmingham, Edgbaston raised in her opening remarks and which I will reiterate. As the Queen Elizabeth class carriers—the Queen Elizabeth and the Prince of Wales—come into service at the end of this decade and the start of the next one, what provisions will be made to supply them with UAV maritime capabilities? We also have the Type 26, which the Minister is currently developing with the support of BAE Systems and the Chief of Defence Matériel. What capabilities does he envisage it, or indeed the Type 45, having in the next decade or two decades?
How does the Ministry of Defence intend to support British industry on this issue? We have a long and inglorious tradition, as you will recall, Mr Leigh, of developing absolutely first-rate aviation capabilities and then allowing them to wither on the vine. The example I think of most often is the Hawker Siddeley Harrier, which was first developed by Britain in the early 1960s as the successor to the Kestrel programme and which is now flown by the United States Marine Corps and the Spanish Navy. However, it is no longer used by the UK armed forces—that is probably a debate for another day—and the latter versions are not even developed by British companies; I think that Boeing developed the latter Marine Corps version.
How will the Ministry of Defence support British companies that are assisting in the development of the next generation of UAVs, so that we do not repeat the mistakes that we have made far too often in the past? What role does the Minister see for UAVs as a replacement for RAF pilots? Those of us on the Defence Committee regularly discuss the issue with Sir Stephen Dalton and other leading members of the RAF, and so does the all-party group. To what extent does the Ministry of Defence believe that, as we move through this century, the fast-jet pilot will become obsolete, in much the same way as we went from having bombers such as the Vulcan and the Victor, with crews of five or seven, to the modern Typhoon, with just one pilot?
As technology improves, to what extent will the UAV be an all-weather, all-year-round weapon? Current UAVs are severely limited in their ability to operate; when there is a severe gust, quite a lot of them struggle. Their payloads are also severely limited in terms of reconnaissance and ordnance. How does the Minister see the long-term future in that respect?
I am conscious that my hon. Friend the Member for North Durham will be setting out the Opposition’s official position, so I will close by reminding Members that when we talk about drones or UAVs, we are not talking about some sci-fi technology, with the weapons thinking for themselves. These weapons are no different from a Paveway or a Brimstone; it is just that, rather than being dropped off a Typhoon or a Tornado on a stand-off by a fast-jet pilot, they are being flown under the command of a living, breathing, serving member of Her Majesty’s armed forces.
It will help the debate if we avoid wild flights of fancy—Members will pardon the dreadful pun—and remember that we are talking, I hope, about well-trained members of the British armed forces, who have, and will continue to have, overall control of these vehicles.
Mr Kevan Jones (North Durham) (Lab)
It is a pleasure to serve under your chairmanship, Mr Leigh. I congratulate my hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart) on securing the debate.
Any debate on the deployability of UAVs should be determined by military requirements, by the ethics of the conflict and, above all, by facts. I agree with my hon. Friend the Member for Dunfermline and West Fife (Thomas Docherty) that some of the supposed facts that are being circulated are getting in the way of the proper debate that my hon. Friend the Member for Birmingham, Edgbaston initiated.
My hon. Friend the Member for Blaenau Gwent (Nick Smith) mentioned Afghanistan, and I would like to put on record our admiration for, and thanks to, the members of our armed forces who are serving there.
Today’s technology and security issues are changing at an ever more rapid pace. The technology that has been developed was unforeseen a matter of years ago, but so too were the threats and dangers that we now face as a nation. Any threat that we face must be put in context, and the context and objectives for deploying force must involve a number of criteria: the maximum strategic advantage over our enemy, protecting UK service personnel and—quite rightly—minimising civilian casualties and acting at all times within humanitarian and international law. Also, we should make sure that deployment is in line with our national interest and our right, as a nation, to self-defence.
Anas Sarwar (Glasgow Central) (Lab)
My hon. Friend makes a strong case for the use of UAVs, but does he accept that the continuing criticism of and controversy about the misuse, sometimes, of drones, particularly in parts of Pakistan, where there are high levels of civilian casualties, undermine the rightful case for UAVs when they are in our strategic interest?
Mr Jones
I shall refer to Pakistan later, but having been there, and having been a Defence Minister, I accept that there is a big gulf between those who are democratically elected in Pakistan, and the military. I do not accept that some of the actions being taken in northern Pakistan are being done without the knowledge of the Pakistan military. I accept that that creates tensions in Pakistan, but not the idea that some of those things are being done without any knowledge on the part of people in authority there. Having spoken to politicians on my last visit to Pakistan I know that they find that situation difficult; however, that is a debate within the context of the democratic accountability of the armed forces in Pakistan. I assure my hon. Friend that some intelligence and other targeting involve co-operation with the Pakistan military.
In the context that I have outlined, our judgment is that the UK’s current position on deployment of UAVs seems to meet the criteria I have specified. However, we should keep that issue under constant review. It has already been said that it is important to distinguish the deployment of the UK’s UAVs from the deployment of those of our allies. I understand that at present some 76 nations operate UAVs and, as has already been described, the UK deploys four types in Afghanistan. However, only one of those, the Reaper, has an armed capacity. The main focus for our UAV technology in Afghanistan is surveillance and support of our operations, and I have seen at first hand the tremendous job it does in protecting convoys and intelligence gathering, which is vital for the security of our and our allies’ armed forces personnel.
As a matter of technology, UAVs can be more cost-effective in carrying out surveillance and other forms of projecting power. If we did not use their surveillance capacity in relation to convoy protection we would have many more casualties in Afghanistan. I do not accept the argument that UAVs are more indiscriminate, when used in a kinetic role, than conventional aircraft. Their ability to loiter for a long period gives more information to those who are deciding the targeting than is available to a manned aircraft. It would be wrong to give the impression that UAVs are a magic solution to all our defence needs; but they are very important in the defence of the country. The Opposition’s policy is clear. We support unmanned technology as an important element of military capability that complements our manned aerial capability, but with a desire to ensure that it is used in the right context.
The UK does not work on operations in isolation; it works with allies—and not only on operations, but, as has been mentioned, in co-operation on development. It would be interesting to hear what stage of development has been reached after the new Anglo-French agreement on co-operating on the next generation of UAVs. As my hon. Friend the Member for Birmingham, Edgbaston and other hon. Members mentioned, the use of UAVs by our most important strategic partner, the United States, has caused public controversy. It is important to distinguish the UK’s use of UAVs from that of the United States. My hon. Friend the Member for Dunfermline and West Fife made the important point that most of our UAV deployment in Afghanistan is for surveillance and is not armed, and that deployment of UAVs is only within the borders of Afghanistan. However, we must all recognise the threat that we, the United States and our other allies face from concerted Islamic terrorism and groups who seek to undermine our way of life and destabilise Afghanistan and other parts of the world.
A lot has been written and said about civilian casualties, and all civilian casualties are a matter of great sadness and deep regret. It is difficult to get the true picture and figures. I do not want to talk in statistics, because one life lost means a family is mourning a loved one. Our major aim should be to do anything that can be done to minimise civilian casualties, whether from a strike by a UAV or by any other conventional weaponry. I know from my time in the Ministry of Defence that the military take that very seriously. The hon. Member for North Wiltshire (Mr Gray) mentioned artillery rounds and other things that are far more indiscriminate than some of the technology.
Thomas Docherty
My hon. Friend is setting out an eloquent and articulate argument. He mentioned minimising casualties, and the families left to mourn. Does he agree that without the use of UAVs in Afghanistan the number of families of British service personnel mourning a loved one would undoubtedly increase?
Mr Jones
With respect to the use of UAVs for intelligence gathering and protection of convoys I certainly agree with my hon. Friend. That brings me to the point that my hon. Friend the Member for Birmingham, Edgbaston and the hon. Member for North Wiltshire raised. To people who are against war, we must be honest and say that war is not a pleasant thing; people die in wars. There are individuals and groups active in Afghanistan and northern Pakistan who are bent on undermining not only the way of life of the United States but the one that we take for granted. It is important that any use of force should be a proportionate response.
There has been a lot of talk about the United States and whether the UAV strikes in northern Pakistan are legal. They were authorised post the 11 September authorisation of the use of military forces and have been reinforced by the Obama Administration. When I was at the Ministry of Defence there was a big debate about whether they would continue when President Obama took over, and clearly they have. Article 51 of the United Nations charter, on a nation’s right to self-defence, is also relevant. We must remember that the individuals in question are not sitting around discussing philosophy; they are planning terrorist strikes and atrocities across the world. In the debate about whether we use force to counter those individuals, I am comfortable about recognising the existence of a threat: that has led to disruption of al-Qaeda and other terrorist groups, and it would not have happened without that type of action.
We support the move by the United States to codify the use of UAVs, which relates to the points made about new technology. It is partly because of the controversy that we need to do something. It is important that the UK examine whether we should have a code covering the contexts and limitations of usage, the process for internal Government oversight of deployments, command and control structures, and acceptable levels of automation. I accept that there is now someone at the end of a UAV, but the next generation of UAVs may be completely autonomous, and we must ensure that such a change is within a legal envelope.
One important point is that I am in no way criticising the Government by saying that no laws are in place. I am well aware of the legal constraints on the selection of targets, and that the same rules of engagement are used as for manned flights. We should however explain UAVs to the public. With the new technology, trying to codify their use and explaining to individuals exactly how targets are selected, for example, and how UAVs are used for both surveillance and military purposes would be a great step forward.
Jim Shannon (Strangford) (DUP)
UAVs could be used for piracy patrols on the east coast of Africa and for fishing enforcement. Those two examples would clearly show that drones can have acceptable roles. I agree about their acceptability, and I believe that other people can be persuaded to have the same opinion.
Mr Jones
The hon. Gentleman is correct. Certainly, if we can have unmanned vehicles in the UK—once agreement is reached with the Civil Aviation Authority—there may be many uses, as he says, including for security.
It would be helpful if we codified the operations. Am I arguing that no laws currently govern the situation? No, I am not. The rules are based on the Ministry of Defence joint doctrine note 2/11 on “The UK Approach to Unmanned Aircraft Systems”, but the MOD sometimes has a tendency not to answer questions and to think that it has to shroud such things in secrecy. Whether or not what is being said is true—in many cases, I do not think it is—the perception is that the technology is used indiscriminately and without control. Some type of code would go a long way towards reassuring people that there is a chain of command, as my hon. Friend the Member for Birmingham, Edgbaston said, for the individual who takes the decision.
There is also a perception that people sitting in Nevada or Florida are killing indiscriminately with no thought of the consequences of what they are doing. I do not accept that. Anyone who has met members of the armed forces of this country or other countries knows that the decision to fire—whether that is Winston Churchill with his revolver, a UAV operator or a pilot dropping munition—is not taken lightly. It is important that people know the full legal background. Unless someone has been involved in operations, they think it is strange that there is a legal context before targetings happen. If we explained that in a codified system, it would help the debate on the use of a new and developing technology.
The Opposition support the use of UAVs. The technology is important in relation not only to military capability, but to the development of our industry and technology in that area. We are developing technologies that will have applications other than military use. As has already been demonstrated in Afghanistan, the technology helps to protect and support our armed forces.
In conclusion, I accept that some of the information about what has happened in northern Pakistan is alarming. The important thing is to understand the context and how the deaths of some individuals have disrupted terrorist networks that were bringing danger not only to parts of Afghanistan and Pakistan but to the streets of London and the capitals of our allies. In terms of the general debate started by my hon. Friend, the use of weapons will never be something that people take lightly, and nor should they. If we can debate the use of UAVs as no different from the use of any other military weapons and we put that into some kind of code, which we could be open about, not secretive, it would do a lot to ensure not only that we in this country are moral leaders in the use of weapons, but that the public have full confidence, as they should, in the existing military chain of command.
The Parliamentary Under-Secretary of State for Defence (Mr Philip Dunne)
It is a pleasure to serve under your chairmanship, Mr Leigh, in a different capacity from when you chaired the Public Accounts Committee, on which I was privileged to sit.
I congratulate the hon. Member for Birmingham, Edgbaston (Ms Stuart) on securing the debate. As all speakers have said, it demonstrates the increasing interest among not only Members of the House but the public at large about the use of unmanned aerial vehicles, as currently deployed in Afghanistan and as might be deployed in the future. As she said, only last month I responded to a similar debate, which had been secured by my hon. Friend the Member for Gillingham and Rainham (Rehman Chishti). He made a brief intervention during the hon. Lady’s speech, and I am sorry that he is not with us to hear mine, because I will try to cover many of the issues raised in this debate and since the previous one in early November.
I start by setting out the context of how, where and why the UK armed forces employ remotely piloted aircraft systems, or UAVs as they are regularly referred to. In this debate, I shall use the term RPAS—remotely piloted aircraft systems—as the more accurate description of their capability, not only because that is what they are, but because that is how they are commonly referred to by the armed forces, particularly the RAF. Although the vehicles are unmanned, the system is guided by a whole team of highly trained and skilled people. Pilots, sensor operators and analysts all make decisions in real time, just like the crew of a manned aircraft. Defence remains a human endeavour. As the hon. Member for Dunfermline and West Fife (Thomas Docherty) said, humans have taken stand-off weapons development through the generations and the centuries, but there has always been human involvement.
Mr Kevan Jones
Does the Minister agree that there are also lawyers in the chain of that decision-making process, who ensure that the targets selected fall within legal parameters?
Mr Dunne
I will explain how the UK armed forces use rules of engagement that are clearly defined and informed by legal opinion, as the hon. Gentleman indicates.
RPAS technology is principally required and used by our armed forces for surveillance and reconnaissance tasks, as several Members mentioned, providing vital intelligence in support of our forces on the ground. While the utility of sensors is broadly similar to those aboard conventionally manned aircraft, RPAS have the ability to loiter for longer, building an intelligence picture that significantly enhances the situational awareness of commanders, forces on the ground and air crew.
RPAS surveillance and reconnaissance capability and the requirement for ever better intelligence, precision and situational awareness are such that they are now vital to mission success, as has been clearly demonstrated in theatre in Afghanistan. The UK currently only deploys RPAS for support of operations in Afghanistan. With the progress of technology and increasing appreciation of their military utility, the number deployed in Afghanistan has continued to increase, with further task lines of Reaper due to become operational next year.
To deliver operational RPAS capability for our forces in Afghanistan, a number of UK RPAS are being used for development trials and training in the UK and in a number of our partner nations. I confirm again that currently the operational deployment for RPAS is for the purposes of operations in Afghanistan, and that UK RPAS are saving the lives of both British and coalition service personnel and Afghan civilians on a daily basis. In that respect, RPAS are no different from other aircraft. The same rules that govern the use of conventional military aircraft apply to RPAS. As I said, UK RPAS are anything but unmanned.
Ms Gisela Stuart
Just for clarity, can the Minister tell us whether there are plans to use RPAS against pirate actions off the coast of Somalia? At the moment, he seems to be stressing that we are looking at the system in terms of Afghanistan and not further.
Mr Dunne
I was not intending to get into the wider deployment of RPAS, but it is the case that we are about to embark on a concept-of-use demonstration trial to see whether, for surveillance purposes, a maritime system could be deployed in the future, which relates to a question that was raised by the hon. Member for Dunfermline and West Fife. It is not at present beyond the demonstration phase.
Thomas Docherty
The Minister shows his skill by guessing what I am going to press him to say. As part of the procurement work for the T-26 and the development of the QE class, is it the intention of the Ministry of Defence that it will in the future be using RPAS?
Mr Dunne
The hon. Gentleman is seeking to jump some way ahead. The aircraft carrier will not be deployed in its full air strike capability until 2020. The main gate decision on the T-26 is not until the middle of the decade, so he is asking me to foresee military capability several years away. He may not be surprised that we are at least contemplating trialling some capability for future use at some stage. I will not be pressed further on that point, but I will address some of the issues that the hon. Lady mentioned. I want to continue setting the scene for a few more minutes.
The Reaper system, which is the UK’s only armed RPAS, is flown by professional pilots who remain in full control of the aircraft at all times; they follow the law of armed conflict and the UK rules of engagement in exactly the same way as pilots of manned aircraft. Reaper, as with other forms of RPAS, is primarily used for intelligence surveillance and reconnaissance, but through technological advance it has been enabled to be armed with precision-guided weapons, thereby meeting a secondary military requirement.
The decision-making process leading to the identification and engagement of a target by one of the two weapons systems available to UK Reapers is identical to that of conventionally manned aircraft, but the greater access to information through a combination of the aircraft’s onboard sensors, ability to access off-board information and duration of missions enables them to be deployed before engagement. Reaper pilots are, arguably, the best informed and connected of all air crew in this operating environment. They are well placed to provide battle-winning surveillance and engagement capability to meet UK ground forces’ needs.
The Reaper was fielded in 2007 and as of 1 December, despite more than 42,000 hours flown over Afghanistan, it has fired only 360 weapons—52 laser-guided bombs and 308 laser-guided Hellfire missiles. Of those precision-guided weapons on Reaper, the type employed is carefully selected in every engagement, which ensures that the most appropriate munition is used to deliver the required effect, in a proportional manner, thus minimising the risk to civilians and their property. The sophistication of the weapons also provides the ability remotely to change the course of the weapon post release, which is another example of the many steps taken by RPAS to avoid civilian casualties as collateral damage.
I am aware of only one incident where civilians have been killed by weapons deployed from a UK Reaper. As I mentioned last month, on 25 March 2011, there was a strike on two pick-up trucks in Afghanistan carrying a significant quantity of explosives, which resulted in the death of two insurgents and four Afghan civilians. That incident was highly regrettable. The subsequent report did, however, confirm that the actions of the Reaper crew had been in accordance with extant procedures and UK rules of engagement. Every weapon released by the UK’s RPAS is under the command of a professional pilot bound by the UK rules of engagement.
Touching on a point raised by the hon. Member for Hayes and Harlington (John McDonnell) about the psychological considerations of operating the Reaper, the experience thus far suggests that far from being detached from the reality of the situation, Reaper air crew are just as connected to the situation on the ground as operators of other aircraft types. They have increased information available to them, a longer time to study the information and the ability to abort the mission even after they have fired the weapon. The increasing specialisation of the role of flying RPAS is being considered by the RAF for recognition as a distinct skill within the flying service.
Of course Reaper is not the only RPAS operated in Afghanistan. To correct the hon. Member for North Durham (Mr Jones), there are in fact five types—not four—of unmanned aircraft systems in operation. As I have already mentioned, Reaper is the only armed version, but we have also deployed the Hermes 450, which has already flown 65,000 hours for intelligence, surveillance and reconnaissance purposes. It will be replaced by the more modern Watchkeeper, which again is for surveillance purposes and is not armed. In response to the question put by the hon. Member for Birmingham, Edgbaston about Watchkeeper, training is already under way and we expect the system to replace Hermes during 2013. These and other smaller deployed tactical systems being operated by Army units in Afghanistan form part of a mix of airborne ISR capabilities, of which they are but one, albeit increasingly important, component. They complement the more traditional manned surveillance capabilities provided by our other aircraft types. Looking further ahead, technological advances are likely to increase the level of automation in some systems, just as in other non-military equipment, but I stress the point that the Government have no intention of developing systems that operate without human intervention in the weapon command and control chain.
Let me turn to the other specific points mentioned by the hon. Member for Birmingham, Edgbaston. On the main thrust of her remarks on the moral and ethical considerations, it would be instructive for her to look at the joint doctrine note 2/11, if she has not done so already, to which the hon. Member for North Durham referred. It was published in March 2011 by the Government, and was the first Government sponsored document to go into the UK’s approach to unmanned aircraft systems. It has a specific section on moral and ethical considerations, which inform the rules of engagement and the operations in which we are engaged at present.
Anas Sarwar
The Minister has quite rightly outlined the moral and ethical use of drones by the UK Government. What discussions have we had with our allies to ensure that they are applying the same principles?
Mr Dunne
As is standard procedure, I am here to answer for the UK Government use of unmanned air vehicles. Other countries that use such systems have their own rules of engagement, as is the case for the UK. We do not publish rules of engagement for the sensible reason that to do so would risk prejudicing the capability, effectiveness or operational security of our armed forces, and that is also the doctrine applied by other countries.
The hon. Member for Birmingham, Edgbaston asked about the military chain of command and whether it would be retained. We have no plans in the Ministry of Defence to operate any of our facilities outside the military chain of command. The hon. Member for Dunfermline and West Fife referred to potential civil uses in the future for airborne surveillance equipment; the hon. Member for Strangford (Jim Shannon) referred to offshore fishing. It is conceivable that in due course other Departments might find other uses for the technology, but I am not aware that it is something that the MOD is engaged in at present.
Thomas Docherty
On Government thinking and working across Departments, can I press the Minister to say a bit more about what role he sees for UK companies in developing RPAS, and how the UK Government, through their various Departments, are supporting that procurement process?
Mr Dunne
Indeed, a number of Opposition Members asked about that issue. The extent to which the Government are supporting UK industrial investment in this technology is demonstrated by the commitments that we have made, in particular for Watchkeeper, where a very substantial investment has been made for a British-designed, British-built capability.
We have also undertaken some collaborative work with other nations. The issue of our collaboration with the French was raised earlier. We have committed, through a memorandum of understanding signed in July, to two specific strands of that work. One is investing in the concept phase for a future combat air system; that is at the very early stages of the work stream, but work is beginning. The second was in relation to potential French interest in procuring the Watchkeeper system. If British industry is able to export that system to the French in due course, that would be a further success for it. We recognise that British aerospace industry will take an increasing interest in this capability, and through our procurement we are seeking to support that interest.
Jim Shannon
The Minister, in an earlier response, said that there might not be a role for drones in the MOD in its entirety, but there is a role through the Royal Navy. The Royal Navy’s responsibility is for fishing enforcement, through European regulation. There are three ships set aside for that; I had the opportunity a few weeks ago to be on one, HMS Severn. Is there any intention of introducing drones in the Royal Navy for enforcement of fishing regulation?
Mr Dunne
As I mentioned earlier, the Royal Navy is undertaking a short-duration capability concept demonstrator, to inform the future concept of use for tactical maritime unmanned air systems. We are not intending to test a specific system, but a system will go through concept demonstration next year. The uses will be for the Royal Navy to decide, if it decides to procure a system in due course.
I think I have addressed the specific questions that the hon. Member for Birmingham, Edgbaston put to me.
Mr Dunne
As I have explained a couple of times, we are at present using RPAS on operations in Afghanistan, and at present we have no other operational use in mind for UK assets beyond Afghanistan. I think that is as far as I can go on that matter at the moment.
I will pick up on some of the comments made by the hon. Member for North Durham. I am grateful for his support for the continued use of unmanned aircraft systems. I am glad that he referred to the joint doctrine document, because it begins to set out some of the issues that are of concern. However, I do not accept the need to undertake a codification of separate rules for RPAS. As I have already mentioned, and as the hon. Gentleman acknowledges, all aircraft operators must follow national and international laws, together with the rules of engagement. Those rules are the same whether an air, sea or land-based platform is being used. Similarly, we have well-established command, control and supervisory frameworks for all our operational assets, so we do not believe at this point that additional measures are needed for RPAS. I will just pick up on the thrust of why I think he was suggesting that we need to take the public with us in our use of RPAS, which is something that I agree with. There is a greater role to be played by politicians and the military in explaining to the public the utility of unmanned systems from a military perspective, from the safety perspective of our own personnel, which is obviously vital, and in minimising the risk of collateral damage when weaponised systems are used. As a Government, we need to do more, and I welcome the help of the hon. Gentleman in advocating the use of such systems to the public at large.
Mr Kevan Jones
My hon. Friend the Member for Birmingham, Edgbaston said that we have to bring the public with us. The Americans are already looking at codification. Would it not be a help to the MOD in getting the arguments across? I accept that an anorak like me reads those documents, but the average person in the street does not. If we had a clearly laid out code, it would give reassurance to individuals who are rightly worried that this new technology is not under any type of control; that is not the case, so it will at least give them some reassurance.
Mr Dunne
The difficulty with a code is how it is differentiated from rules of engagement. For the reasons I have explained, we do not wish to publish specific rules of engagement, so having a code would head us down a direction of potentially having to publish more about our operational use than would be safe for us to do.
We already have procedures in place for the oversight of all the military capabilities that we have deployed, and the National Security Council will consider whether forces should be deployed in the future. It operates with the benefit of the NSDR and NSDA, to use military acronyms—
Mr Dunne
I am in danger of falling into a trap that I should not have set myself.
Finally, RPAS is not shielded in secrecy, which was the expression used in the article in The Times that was referred to earlier in the debate. During the last few weeks, months and years, we have released significant details about our use of RPAS, but our use of RPAS should not be confused with general MOD policy on safeguarding information relevant to targeting and intelligence. I hope that, on reflection, the hon. Gentleman will recognise that that is an overriding requirement and puts to rest the need for any potential confusion with a system of codification, rules of engagement or secrecy over the matter.
Let me finish by restating that the UK complies fully with its obligations under international law, as set out in article 36 of additional protocol 1 to the Geneva conventions, to review all new weapons, and means and methods of warfare. That process applies to unmanned capabilities as well as to other manned weapons systems.
I welcome the opportunity presented by the hon. Member for Birmingham, Edgbaston to put on the record once again the Government’s clear view of the benefits of RPAS in minimising the risk to civilians, as well as to our own service personnel and other coalition forces. RPAS provide vital intelligence to our forces on the ground and I can only see their importance increasing, as part of our overall service capability.
Health Services (Cornwall)
(12 years ago)
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Andrew George (St Ives) (LD)
I am delighted to have secured this debate on health services, which are important in Cornwall—and, I am sure, in the rest of the world as well.
The national health service was created in 1948. It looks forward to its 65th birthday while facing the biggest challenges in its history, and nowhere more so than in Cornwall and on the Isles of Scilly. The previous Labour Government set a demanding target of £20 billion efficiency gain by 2015, something not advanced for any other health system on the planet, and the present Government have introduced the biggest reorganisation since the NHS was created.
As the Minister knows, I have argued, and voted, against the Government on what is now the Health and Social Care Act 2012. However, we must face up to what the Government have done, to ensure that, irrespective of the wisdom or otherwise of the policies, the Act does not undermine our vital local health services in Cornwall and on the Isles of Scilly.
Along with the significant financial challenges, which are a great deal more significant in Cornwall and on the Isles of Scilly than in the rest of the country, I hope to raise some of the many other challenges that the local NHS faces, including the consequences of the loss of the helicopter service to the Isles of Scilly.
I want to mention the important campaign that Sandra Cousins, one of my constituents, launched a year ago, following the tragic death of her daughter Mercedes Curnow, which led to the setting-up of the Mercedes Curnow Foundation. Mercedes died on 14 December 2011, aged 23. She and her mother had sought to highlight the need to strengthen the systems for detecting and treating cervical cancer in young women—particularly those under 25, who are denied screening in many circumstances.
There are many other issues. Nationwide, there needs to be a greater emphasis on registered nurse-to-patient ratios in some acute settings, and the need in Cornwall is significant. There is the risk of regional pay, the need to ensure adequate community hospital beds and primary care services, and the public health agenda, which must ensure adequate levels of NHS dentistry. That might be far too many issues to fit into the limited time available.
I am very reassured that highly professional and dedicated clinicians are already working hard to ensure that our local health services are the best they can be in the circumstances. In 2013, the new service in Cornwall will, as in the rest of the country, be largely led by local general practitioners. I am delighted that the shadow Kernow clinical commissioning group—“Kernow” is Cornish for Cornwall—chaired by Dr Colin Philip, was only this afternoon authorised by the NHS Commissioning Board to be responsible for the £700 million for commissioning health services across Cornwall.
The group is very open to working with the local community in ways that are extremely encouraging. For example, the Cornish campaign group 38 Degrees is already working with the group and suggesting amendments to its constitution to ensure that local health services are protected in ways that any local community would wish them to be protected. It is well on the way to creating new structures, challenging as they are, that will shape how the NHS operates in Cornwall.
A big challenge nationally is to ensure that the NHS really effectively puts patients before profit. The previous Government rolled out the red carpet for private health companies in Cornwall, as elsewhere, and gave them opportunities to profit their shareholders by delivering some of the less challenging elements of NHS work. I have questioned the basis on which tariffs will be awarded for procedures. After I raised questions with him about the risk of cherry-picking, the new Secretary of State told me, in a letter dated 30 October 2012:
“Under these new rules, commissioners should adjust the tariff price if a provider limits the type of patients it treats…resulting in lower costs than the average of the tariff category. As a result, providers undertaking only the more simple interventions—for example, because they do not have the proper facilities to handle more complex cases—would be paid a suitably lower price.”
That is certainly the case in Cornwall, where a number of private providers deal with some of the easier and less complex cases—for example, patients without anaesthetic risk and those without co-morbidities. If those providers are offered a lower tariff price the question that needs to be asked is whether that might have the unintended consequence of commissioners driving patients into the arms of the private providers that cannot provide the range of services that the Royal Cornwall Hospitals Trust, for example, excellently provides for our local community.
There is also fragmentation, which although a nationwide issue is a particular risk in a peninsula that depends on core services and has no alternatives. Although patient choice might well apply, and is welcome as a luxury beyond the core services, the risk is, of course, that it will not necessarily help services if it results in their fragmentation.
On the role of the private sector, my hon. Friend the Member for Truro and Falmouth (Sarah Newton) and I have raised concerns with the Care Quality Commission about what we detected had been going on with the out-of-hours GP service in Cornwall. The CQC, in its report in July, found—as the Minister will know because of the significant national ramifications—that there had been some manipulation of some of the data records, and inadequate staffing. The primary care trust, in its report on 20 September 2012, identified that it had deliberately altered data 250 times between January and June this year, which had the effect of inflating its published response times. That is not particularly encouraging. The problem is that in a very competitive environment there is an increased risk that that might happen.
Cornwall must ensure that it gets a fair share of the cake. Our allocation is significantly less than what the Government say we deserve—their stated target—and they should take account of the underfunding we have had in recent years. For example, between 2006 and 2012 Cornwall has received £201 million less than its target. That is a significant amount, and I would be surprised if anywhere else in the country had been allocated so much less than what the Government said it should get. This year, 61 primary care trusts will receive a total of £1.3 billion over target, while 88 PCTs, one of which is Cornwall and the Isles of Scilly, will receive £1.3 billion below target.
Added to that, Cornwall receives less money for each medical procedure within a national tariff, using the market forces factor framework as the index. The Royal Cornwall Hospitals Trust receives the lowest payment of any acute trust in the country. It inherited debts from troubles that originated in 2006-07, which rose to £46 million in 2008-09. Although repayments have reduced the debt to £22 million, it will be passed on to the new quasi-independent foundation trust, which we hope will be established next year.
Although we have had disappointing responses from Ministers so far, my hon. Friends the Members for Truro and Falmouth and for North Cornwall (Dan Rogerson) and I are still arguing that the debt should be written off to give that foundation trust a clean slate on which to begin its work next year.
I entirely support and thoroughly endorse the trust’s response to the latest revelations with regard to concern in the obstetrics and gynaecology department. I make it clear, so that there is no equivocation or uncertainty, that I entirely endorse the actions the trust has taken with the external review, and we hope that that will be brought to a conclusion as soon as possible. The trust is certainly doing all it can to reassure patients in Cornwall. The trust has high standards, and we entirely support the work it is doing. We hope that patients who may be concerned will contact the trust.
Sandra Cousins of the Mercedes Curnow Foundation has been working tirelessly. Although I have written to Ministers on this issue over the past year and have received helpful and instructive replies, a large number of young women are still dying, unnecessarily in my view and certainly in the view of Sandra Cousins and her many supporters across the country.
Sandra is also concerned that, even where GPs are prepared to undertake a smear test—smear tests for young women under 25 have to be authorised by a doctor—laboratories, apparently, are not always following through by undertaking work on those tests. She argues that laboratories must accept and follow through the necessary tests. She draws a comparison with Australia, where the cervical screening limit is 18 and where, since 2009, the human papilloma virus vaccination has been available for those up to 26 years old, which is much higher than in this country. The mortality rate from cervical cancer in Australia is half the UK’s.
Sandra Cousins says:
“I also feel regarding the hpv vaccination that it should be done nationwide in schools. Cornwall is a prime example of low uptake of the vaccination, 49% compared to many counties that are 89%, because it is done at G.P. practice not in schools.”
She advances the case for schools, but she is also concerned about the 18 to 26-year-old cohort, because HPV vaccination ends at the age of 18 and there is no cervical screening for those under 25. Her daughter, of course, fell into that cohort, and I certainly believe she has a strong case for advancing the points that she is making.
Of 20 cervical smear and HPV tests that the Mercedes Curnow Foundation has funded, 18 were positive. Those women went on to have further investigations and treatment. Sandra Cousins cites other examples where that is an issue that needs to be addressed in more detail.
I have mentioned regional pay, and I am pleased that MPs across the south-west met the Under-Secretary of State for Health, my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter) last week. We were reassured by his response, and he will be writing to the south-west consortium. Indeed, those south-west MPs will be writing to the chief executives of the 19 trusts engaged in that consortium to encourage them to get back to national negotiation.
I urge the Government to consider nurse staffing levels. With all the stories about poor care and nursing in hospitals, few are prepared to consider the resources that are going into the hospital wards themselves. On many occasions, nurses are running around unable to fulfil all of their duties because there is an insufficient number of them on the ward. There are mandatory registered nurse-to-patient ratios in places such as Australia and they work well, with good outcomes.
The commercial helicopter service to the Isles of Scilly ceased just over a month ago, and it is already having an impact on services to my constituents on the Isles of Scilly. Blood samples and patients are unable to get over to the mainstream health services on the mainland, and I hope the Minister is prepared to look closely at that and perhaps work with the Department for Transport to help find a solution. Cross-departmental co-operation is required.
We have low levels of NHS dental provision in Cornwall, and I am concerned that the local authority might put the director of public health not on the chief officers board of the local authority, but under one of those senior officers. There are major concerns across Cornwall that Peninsula Community Health, the community interest company set up last year, is unable to provide the necessary staff to staff community hospital beds. It is important that we front-load community and primary care to get the balance right between those acute hospitals seeking to discharge patients earlier than they are able and avoiding unnecessary admissions to those hospitals.
I am sorry that I have gone on for a minute longer than I intended. There are many challenges, but the biggest that we face—I hope the Minister will take this on board—is Cornwall’s unfair funding deal: £200 million of missing money over the past six years alone.
The Parliamentary Under-Secretary of State for Health (Anna Soubry)
It is a pleasure to serve under your chairmanship, Mr Leigh.
I congratulate my hon. Friend the Member for St Ives (Andrew George) on securing this debate and on raising what can only be described as a rich pot-pourri of topics relating to the state of the health service in his county and to his constituents, whom he serves not only in St Ives and across Cornwall but on the Isles of Scilly.
I assure my hon. Friend that the total revenue allocated to NHS Cornwall and Isles of Scilly increased by 2.8% in 2012-13, which is entirely in line with the 2.8% overall increase nationally. That represents an additional £26 million to invest in front-line care in his local area. Indeed, the total budget for NHS Cornwall and Isles of Scilly is £941.8 million for 2012-13. On top of that, I am advised that the local NHS expects to achieve efficiencies of 4%, totalling £36 million, with those funds being made available to support improved services to patients in Cornwall and the Isles of Scilly.
I understand that the independent Advisory Council on Resource Allocation has been developing a new allocations formula. I am told that allocations to clinical commissioning groups for 2013-14 will be announced by the NHS Commissioning Board later this month and that ACRA’s final recommendations are due to be published alongside those allocations.
It is not for me to say whether Cornwall should receive more or less money—it is difficult to think that Cornwall could possibly ever receive less—but if there are some inequities, I am sure my hon. Friend and his colleagues from the county will do their best, as they always do, to put forward those arguments with full force. I assure him that they will continue to be listened to.
Andrew George
The Government are clear that Cornwall receives less money than they say it should. I gave the figure earlier that Cornwall received more than £200 million less than the Government said it should.
Anna Soubry
Indeed, but it is for ACRA to come up with a new formula, and it is hoped that that can be advanced. The formula might, of course, be to the benefit of the county.
There is a rich number of topics to address, and it is difficult to know where to begin, but I will start by saying that I am disappointed that my hon. Friend chose to vote against the Government’s excellent NHS reforms. In his area, as he has already told us, the CCG was authorised yesterday. I will give some examples of how that movement of power and determination into the hands of front-line professionals will benefit his constituents.
The CCG has secured more than £500,000 from the Government’s dementia challenge fund to improve the lives of people in Cornwall living with dementia and their carers. The funding will be spent on improving dementia care in residential and nursing homes and in the community, and increasing peer support in communities and hospitals. Those are just some of the things that that successful application for £500,000 will achieve. The CCG is also investing £300,000 to expand the acute care at home programme. I have many other examples, including four services in Cornwall that have been expanded through the “any qualified provider” scheme: psychological therapies, back and neck pain treatments, adult hearing services and ultrasound and MRI diagnostic services. My hon. Friend raised concerns about the march of the private sector, but if there is such a march—I have no evidence of it—it would seem that in his county, it is by no means to be feared; indeed, it is to be welcomed.
My hon. Friend mentioned the loss of the helicopter from Penzance to the Isles of Scilly. I know that the service has ceased, and I understand the worry that that causes him and many of his constituents. I understand that the service previously fulfilled all non-emergency health transportation needs, but I am informed that emergency transport is usually carried out by RNAS Culdrose, so any interruption to routine travel affects only non-emergency appointments. The islands are also served by a passenger ferry, and the NHS has back-up arrangements in place to use a cargo ship if needed for medical samples.
In response to the ending of the helicopter service, I am told that the Isles of Scilly Steamship Company, which runs the fixed-wing aircraft Skybus and the passenger ferry Scillyonian—forgive me for not pronouncing it correctly—
Anna Soubry
My hon. Friend knows it better than I. The company has enhanced its services to accommodate NHS needs, and has committed to purchasing a second aircraft to enable it to increase flights. I hope that those arrangements are of some assurance to him.
On registered nurse staff ratios and the skill mix, we know that patient care in the 21st century is different from what it used to be. Hospitals report that the type of demand that they face is changing. In particular, the average lengths of hospital stays are about one third shorter than they were 10 years ago. It is true that the number of nurses has been decreasing, but the total number of professionally qualified clinical staff in the NHS is rising.
Planning the number of nurses and the shape and size of the work force must be based on the needs of the people in our care. Services must be properly designed around the care and treatment that people need. Those decisions could result in a need for nursing numbers to change, but that must be based on properly redesigning services, not just on affordability. Changes must be decided at a local level, based on evidence that they will improve patient care. It is important to use this valuable staffing resource wisely, in properly constructed multi-professional teams with appropriately blended skills focused on the care and treatment needed by patients, families and communities.
The Government are committed to improving quality standards in the NHS. Our role is to clarify the standard of patient care demanded of the NHS through the mandate and to underpin it with robust external monitoring and validation by appropriate bodies. We are not here to impose management solutions.
Andrew George
I am interested in what the Minister says. However, is she saying that she and her fellow Ministers are content that registered nurse staffing levels are currently adequate in all settings within the NHS?
Anna Soubry
With great respect, I could not possibly say either yea or nay to that, because I do not know what they are, but I always look forward to the continuing representations made by hon. Members urging Ministers to raise or change the numbers.
I turn to the concerns expressed about the financial situation of the Royal Cornwall Hospitals NHS Trust. I hope that those concerns will now be allayed; the trust is forecasting a surplus of £3.8 million for 2012-13, and is progressing well on its path to achieving foundation trust status. Yesterday, through a video link, I spoke to one of the trust’s officers, who told me with much encouragement about plans for the future of the hospital and said that the trust believes that it is now on top of its financial situation. By way of example, I asked specifically about the trust’s preparations for winter, as it looks like we are going to have one of the hardest winters in this country for a long time. I was heartened by not only the trust but the PCT and others to whom I spoke about the high level of preparedness in Cornwall and Devon, two counties that are used to unusual snaps of weather, quick changes and sudden emergencies. I was left with a feeling of great confidence that those two counties are doing everything that they should to be ready. For what it is worth in this short time, I urge all counties to be in as great shape as Cornwall and Devon are.
In my remaining few minutes, I will turn to one particular point. My hon. Friend may have raised others. If I have not answered them, I will write to him. He rightly talked about a foundation trust set up by one of his constituents in memory of another of his constituents. I did not catch their names, so if he will forgive me, I will not make a hash of them, as it is a serious matter and a young woman lost her life. I am told that 80% of eligible women in Cornwall and the Isles of Scilly took part in the NHS cervical screening programme in the previous five years. That uptake has increased from the previous year and exceeds the percentage of women who took part nationally.
My hon. Friend’s point was about screening for women under the age of 25. He said that it concerns him, and asked why the age should not be reduced. In May 2009, the advisory committee on cervical screening reviewed the screening age specifically and considered all the latest available evidence on the risks and benefits of cervical screening in women aged between 20 and 24. The committee was unanimous in deciding that there was no reason to lower the age from 25, which happens to be in line with the World Health Organisation’s recommendations. The committee gave a number of reasons, which I cannot read out given the time available. I am more than happy to supply him with a list of those reasons.
That is not to say by any means that my hon. Friend and his constituents should cease their campaign to achieve better levels of screening and awareness among young women about the fact that cervical cancer can affect them even though they are young. I say that as the mother of two daughters, one aged 21 and one 22. It may be of some interest to him that by complete coincidence, I was stopped today by my hon. Friend the Member for Loughborough (Nicky Morgan), who approached me because she too, unfortunately, had a constituent under the age of 25 who died of cervical cancer. She raised the same issue with me. I gave her an undertaking that I am more than happy to meet with her and her constituents to discuss it further, and I extend that invitation to my hon. Friend the Member for St Ives and to his constituents who are campaigning. It may well be that the matter should be revisited. As I said, the advisory committee considered the issue in 2009. The technology may have changed—I know not—but it is certainly a matter that needs to be considered, and I am more than happy to meet hon. Members to talk about it and see whether anything can be done.
It would appear that I have dealt with all the items on my list of notes, and so—
Dan Rogerson (North Cornwall) (LD)
I am absolutely delighted that the funding formula is being reviewed, but a crucial question for us in Cornwall, when the formula arrives at a solution saying how much Cornwall should get, is whether we actually get it. It has not necessarily been a problem with the formula; it is that we have never reached the existing formula. It is about renewed determination that there will be a road of travel.
Anna Soubry
With 50 seconds remaining, this is a perfect opportunity for any other Member to stand up and make exactly the same point. It is a good point, and it is about to be made again.
Sarah Newton (Truro and Falmouth) (Con)
I am pleased that we have made a lot of progress through the coalition—the gap has decreased from minus 7 to minus 2 —but a great enough rate of change to get Cornwall up to where it should be within this Parliament is essential for the people of Cornwall.
Anna Soubry
I am grateful for my hon. Friend’s intervention. She makes a good point. Like others who have spoken in this short debate, she advances her county’s cause eloquently and undoubtedly with some merit. I cannot make any promises, but I can ensure on my return to the Department that the matter is raised yet again at the highest level so that we can see whether we can make some progress.
Tackling Corruption
(12 years ago)
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Catherine McKinnell (Newcastle upon Tyne North) (Lab)
It is a pleasure to serve under your chairmanship, Mr Leigh.
Sunday 9 December marked the United Nation’s international anti-corruption day. This year, the UN Secretary-General, Ban Ki-moon, called on us all to pledge to do our part by cracking down on corruption, shaming those who practise it and engendering a culture that values ethical behaviour. Those words are poignant when considering the general feeling in the public, who have been protesting about fairness and ethical behaviour, particularly among multinational corporations.
According to the Christian relief and development agency, Tearfund, corruption hits the poorest sectors of society the hardest. It reduces access to and quality of essential public services, such as education and health care, prevents resources from reaching their intended destinations, undermines trust and harms economic growth. In Africa alone, the cost of corruption has been estimated at nearly £100 billion a year, or £3,000 a second, representing 25% of the continent’s GDP.
Tackling corruption is particularly important to ensure that money, whether tax, investment or aid, is used for economic growth and to tackle poverty. For example, the 2009 extractive industries transparency initiative report showed that in Nigeria there was a discrepancy of $800 million—equivalent to the health budget—between what companies said they pay to the Government and what the Government said that they received. That Government are rightly working to recover that money.
As co-chair of the all-party parliamentary group on anti-corruption—my fellow co-chair, my hon. Friend the Member for Glasgow Central (Anas Sarwar), is also in the Chamber—I say that we need much greater focus on this issue. The Prime Minister made it clear recently that, together, transparency and fighting corruption are part of
“‘the golden thread’ of conditions enabling open economies and open societies to thrive”.
He announced, rightly, that he is putting transparency at the heart of the G8. In addition, the UK Government have set themselves the ambitious target of becoming the most open, transparent Government in the world. We will hold the Prime Minister to that statement.
The Bribery Act 2010 is a strong piece of legislation. The Department for International Development, created by the previous Labour Government, came top in the recent ranking for aid transparency. The UK Government came third in the 2010 open budget index for transparency in budgeting. The UK is also showing strong leadership in pushing for effective transparency legislation in the European Union, so that oil, gas and mining companies publish what they pay to Governments. However, 2013 is an opportunity to continue this progress, because as chair of the G8 and co-chair of the Open Government Partnership, the UK has a unique opportunity to harness the energy and commitment of Governments, the private sector and citizens to ensure that resources are used to tackle poverty.
The UK Bribery Act has, in many ways, set the standard globally. Now, effective implementation of the Act requires sufficient resources for enforcement. The Serious Fraud Office is responsible for enforcing the new legislation, but its budget has been cut from £52 million in 2008, to approximately £33 million in 2012 and it is expected to be further reduced in forthcoming years, which is a huge worry. Without sufficient funding, the SFO will not be able to do its job of enforcement, however good the legislation may be. Given the importance of the issue at stake, I hope that the Minister will give assurances that the SFO will have sufficient funding to implement the Bribery Act effectively. What steps are the Government taking to ensure that that happens?
With at least 11 Departments and public bodies having the remit of tackling corruption, there is clearly a need for cross-departmental co-ordination and an overarching anti-corruption strategy. The Prime Minister’s commitment in June 2010 to make the then Secretary of State for Justice, now the Minister without Portfolio, the right hon. and learned Member for Rushcliffe (Mr Clarke), the Government’s anti-corruption champion was welcome. However, the role lacks clarity and after the summer’s reshuffle we heard little more about it. The all-party group recently wrote to the Prime Minister about that and, although it was reconfirmed that the right hon. and learned Member for Rushcliffe will remain anti-corruption champion, we have yet to see further details about the remit of the role or any cross-Government strategy to tackle corruption at home and overseas. Will the Minister confirm when further details of the role of anti-corruption champion will become available and when we can expect the production of a cross-departmental anti-corruption strategy?
Some 3.5 billion people live in countries rich in oil, gas and minerals. Revenue from those sectors is often one of the greatest sources of wealth generated within developing countries. In 2010, for example, exports of oil and minerals from Africa were estimated at $333 billion, nearly seven times the value of international aid to the continent, which is currently valued at $48 billion. However, such wealth provides little benefit to the people living there, especially the poor, in part due to lack of transparency.
The UK has shown leadership in Europe in pushing for strong EU transparency legislation, for oil, gas and mining companies to publish what they pay, and has received cross-party support in the UK. We in the all-party group wrote to the then Department for Business, Innovation and Skills Minister, the hon. Member for North Norfolk (Norman Lamb), to show our support for strong Government leadership in Europe on the matter. Nevertheless, more can be done. The recently passed US Dodd-Frank Act, together with the EU transparency legislation, will cover all extractive industry companies listed on the US and EU stock exchanges, including many from G8 and G20 countries, such as Australia, Canada, China and Brazil.
Anas Sarwar (Glasgow Central) (Lab)
I congratulate my hon. Friend on securing this important debate. It is said that developing countries lose three times as much in tax revenues as they receive in aid. We need to rush this legislation through so that we can start developing such countries and they can start raising their own income to allow their economies to prosper.
Catherine McKinnell
That is the crux of the issue. The Government have rightly supported the previous Labour Government’s calls for committing 0.7% of our GDP in aid to developing countries, but until we get the international structures right—the transparency—to ensure that that money goes to the right people and is spent in the right places, and that countries are able to protect their own resources and tax revenues, we will not make the progress that we would like and aid will not have the greatest effect. To win the argument on many fronts, work must be done on the anti-corruption agenda and increased transparency to improve the efficacy of that aid, which we are rightly committed to as a country.
Much more can be done. The UK has been a leader in spearheading and supporting the extractive industries transparency initiative, a mechanism by which companies report the payments that they make to Governments, host Governments report their revenues, and any discrepancies can be resolved. That has led to large differences being identified between payments made and revenues reported and, as a result, money has been recovered, as shown in the Nigeria example that I mentioned. However, despite supporting the EITI, the UK is not yet one of its 36 current members; only one G20 country is. Although many warm noises are coming from the G8 and G20 Governments on the transparency agenda, it is questionable whether we can provide global leadership without putting our own houses in order. What plans do the UK Government have to use the G8 to encourage other rich countries to pass transparency laws and to reach global standards on transparency for oil, gas and mining companies? Is there an existing timetable that the Government are using to sign up to the EITI?
Open and transparent budget systems promote development by enabling citizens in developing countries to help their Governments to formulate budgets that reflect public priorities, to reduce money lost due to corruption, and to hold their Governments to account on spending. Such systems ensure the optimal use of resources gained from tax, aid and investment, which is even more vital now in times of austerity. For example, Mexico made details of agricultural subsidies to small farmers publicly available, showing a high concentration of recipients among the wealthiest 10% of farmers, who received nearly 20 times what the bottom 80% received. In 2007, under public pressure from the International Budget Partnership, the local non-governmental organisation Fundar, and Congress, maximum and minimum limits for farm subsidies were introduced and the recipient list was then cleaned up. In Uganda, public expenditure tracking surveys led to a reduction in leaked funds from 80% to 20% in five years, from 1995 to 2000, which was connected to Government grants for school fees. Many Governments, however, do not have transparent budgets, and nor do they allow citizen participation in the process. According to the 2010 open budget index, 74 out of the 94 countries surveyed failed to meet even the most basic standards of transparency and accountability. Only seven provided extensive information, of which the UK was one.
Clearly, much more needs to be done at an international level. The UK has an opportunity to make sure that that happens through its role as chair of the G8 and co-chair of the Open Government Partnership. The partnership, with 58 member countries, had its first steering group meeting under the UK chairmanship on 3 and 4 December, led by the Minister for the Cabinet Office. Countries have committed to publish data on Government spending in a way that the public can use, but the commitment is still limited and only includes the Executive’s budget proposal and audit report, while missing other key documents. Most importantly, the commitment does not require member Governments to develop practical ways of engaging their citizens and Parliaments in the process. As a result, the Open Government Partnership eligibility criteria need to be strengthened, so that countries show year-on-year progress and reach the highest standards of budget transparency, and to state clearly how citizens and parliamentarians can be involved in the budget process. For that to work, other key G8 and G20 countries need to commit to joining—fewer than half are currently members. Greater support is also needed to support civil society groups in using the information produced to hold their Governments to account. That could also be done, for example, through DFID programmes.
The process is comprehensive but crucial, and I will welcome further information regarding the Government’s plans to support its development in the years ahead as part of their wider anti-corruption strategy. A cross-governmental commitment to fighting corruption, throughout all Departments and across parties, is vital. I look forward to hearing the Minister’s response to the various questions and challenges that I have put to her today.
The Parliamentary Secretary, Cabinet Office (Miss Chloe Smith)
I thank the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) for this important debate and for rightly celebrating international anti-corruption day, which fell on Sunday. We might be somewhat belated, but we are ensuring that we mark it in Parliament today.
Some interesting points have been made, which I will endeavour to answer as best I can. I will provide an update on the Government’s efforts to tackle international corruption, which, as the hon. Lady rightly said, have to go across Departments. I am sure that such efforts come with the strong good wishes of all parties. I also welcome the presence in the Chamber of the hon. Member for Glasgow Central (Anas Sarwar). He has not made a full speech today, but he is well known to the House as the co-chair of the all-party group on anti-corruption. He and the hon. Lady ought to be congratulated on their work on that agenda.
I will mirror many of the concerns that have been expressed this afternoon, and I lay out the reassurance that the Government are committed to tackling corruption at home and abroad. Corruption is a scourge that hurts individuals, businesses and social and economic development. Such injustice invariably hits the most vulnerable citizens the hardest, throughout the world, and it has a corrosive impact. Corruption can have a badly corroding effect not only on society, the rule of law and democracy but on the reputation of and trust in the state in general terms. In particular, if we look at people’s views of the ease and cost of doing business, the effect can be seen clearly in many places around the world.
The British Government’s view is that strong action to address corruption will help to move the vast resources involved to more productive ends. Instead of people’s resources being squandered to enable organised crime or to undermine the rule of law and those bonds of trust to which I referred, we seek for them to be used to support trade, commerce and growth.
The UK has played a leading role in the international fight against corruption, and I wish to make a few points about that today. I also take the opportunity to welcome the correspondence that hon. Members have had with the Prime Minister on the role of the anti-corruption champion. Indeed, I have a copy of that correspondence with me.
I am delighted to have the full support of the Minister without Portfolio, my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), as I address the issue today. I shall ensure that he hears the results of the debate, and I shall convey to him the points made by hon. Members in their desire for clarity on the breadth of his role and on his next steps.
I turn to what the UK is doing on the international stage. Over the past 20 years or so, there has clearly been progressive globalisation—not only of business but, crucially, of corruption. We must therefore internationalise the fight against corruption. The UK has taken part in the need for broader and more sophisticated legislation and co-ordination. The Bribery Act 2010 represents what many consider to be the most comprehensive anti-corruption legislation in the world, as I think the hon. Member for Newcastle upon Tyne North recognised. The Act clamps down on foreign as well as domestic bribery and addresses passive as well as active corruption. It acknowledges the international and multifaceted nature of the challenge, and I hope and believe that it will provide a template to many other legislatures around the world.
Some UK businesses might have been concerned when the 2010 Act came in so, as an aside, I reassure them that a legal system that provides a good reason not to pay bribes saves businesses money and protects their reputations. They could also point out any corruption with hope of redress if their competitors were not acting as honestly. Far from driving firms away, the Act ought to attract and to deliver something of an ethical premium in respect of doing business.
The UK has played a prominent role in co-ordinating international efforts. The hon. Lady mentioned the G20 anti-corruption working group, which the UK has co-chaired with Mexico and which has made progress on asset disclosure, mutual legal assistance and the denial of entry to corrupt public officials. The success of the group has been such that we have seen the bringing together of global expertise from civil society and, crucially, businesses.
Anas Sarwar
I agree with all the Minister’s comments so far, but can we tease out the details on what specific action the UK Government have taken, internationally or domestically, to clamp down on corruption?
Miss Smith
Without a doubt. I will carry right on and do exactly that, and I am happy to ensure that the hon. Gentleman has further information if I do not manage to cover everything in the time available.
The UK is the lead chair of the Open Government Partnership, an international initiative that has attracted 57 other countries since its launch, which is an accolade to the UK’s lead chairmanship. It allows us to help countries to build transparent governance structures which, because the battle is international, help the UK as well, demonstrating that transparency is a central plank of any effort.
The UK fully recognises the importance of the longer-term agenda, and Ban Ki-moon spoke about the millennium development goals on Sunday. That is another important point to note in the record. There is
“a golden thread of development”
and we intend that to be a central tenet of our G8 presidency in 2013. The UK intends to champion an agenda of transparency and accountability by changing the nature of the debate on development and aid. The power of open economies, open Governments and open societies can deliver that growth and prosperity that we seek and, crucially, the bonds of trust.
The hon. Lady asked about the extractive industries. The UK is leading efforts in the UK to require oil, gas and mining companies to publish key financial information for each country and project that they work on. In many ways, the UK’s work on transparency paves the way for the G8, and this is my point in answer to the hon. Gentleman.
The Department for International Development has made great strides over the last couple of years, as hon. Members recognise. We are publishing data according to the international aid transparency initiative. Through those efforts we have been able to move in one year from fifth to first place in the Publish What You Fund aid transparency index. I am sure that the hon. Gentleman will welcome that, and I know that both hon. Members will welcome the fact that the traceability of aid benefits those for whom the aid is intended. We all agree on that, and our constituents throughout the country want transparency of Governments and a reduction in waste, fraud, and corruption in the country’s aid budget.
Anas Sarwar
We want transparency in how aid is delivered, but one frustration for our constituents is that although they may believe in aid, they see corruption by Government officials coming the other way. We must reform our institutions here to ensure that we do not aid and abet corruption in other countries.
Miss Smith
The hon. Gentleman raises a wise point. If he will forgive me, I will allow a Minister from the Department for International Development to respond in more detail than I can today.
Let me turn to what we are doing on enforcement and what we are doing in the UK, because both are vital. We are playing a key role in the tracing, seizing, recovering and return of illicit assets. That is important, and in September the Prime Minister launched a taskforce to work with the Egyptian Government to gather evidence on stolen money, for example. That builds on the work of two police units that DFID has funded in that arena.
Effective enforcement is central and essential in the trustworthiness of the whole process. Laws mean very little if they are not enforced by every official who might come into contact with the process. The UK targets foreign and corrupt officials who launder the proceeds of corruption and bribery through our country, and I will give an example. James Ibori, the former Governor of Delta state in Nigeria, became one of its richest men by embezzlement. Following a British police investigation, he was sentenced to 13 years in jail, which sends a clear message to those who might seek to use the UK as a refuge for criminal acts.
In addition, the UK operates a comprehensive anti-money laundering framework which, in accordance with the revised international standards of the Financial Action Task Force, helps us to combat money laundering and terrorist financing.
Catherine McKinnell
Will the Minister clarify that the action that she is outlining and has given examples of is pursued under the Bribery Act 2010 and through the Serious Fraud Office? If so, will she clarify the SFO’s funding situation, and whether it has sufficient resources properly to tackle corruption on an international scale, an example of which she has given?
Miss Smith
I am conscious that the hon. Lady asked that question earlier, and perhaps I can return to it. I have just mentioned one case, and I can furnish plenty more than what I have been able to give on my feet this afternoon. She will appreciate from her role on the Front Bench that it will be hard for me to pre-empt future spending decisions, but we are putting a serious focus on the new UK National Crime Agency, which I am about to come on to. I hope that she will find reassurance in that.
As well as telling other countries to put their houses in order, the UK must put its house in order. We should not be complacent. According to Transparency International’s work, we are perceived to be less vulnerable to corruption than some of our friends, such as the US, France and Ireland, but we remain behind other counterparts with whom we might seek to compete. We have subjected and continue to subject our domestic systems to peer review by the OECD, the UN convention against corruption and the Council of Europe’s anti-corruption experts.
We are already working across Departments and law enforcement and prosecution agencies to see how we can make it easier for UK residents and businesses to identify, prevent and report bribery and corruption. We need to improve the intelligence picture through a more joined-up and co-ordinated approach that gives us a clearer picture of the true nature and scale of domestic bribery and corruption. We can then use that to support a stronger law enforcement response.
From next year, the new UK National Crime Agency will have a part to play, and while the details are being developed, it will seek to reduce the threat from corruption and bribery within the UK and internationally.
Anas Sarwar
The Minister is being generous in giving way, and I thank her for that. What role will institutions play as part of that framework? Clearly, our banks, whether consciously or subconsciously, are being used to funnel corrupt money through our institutions. Will they play a role in that framework?
Miss Smith
I see the force of the hon. Gentleman’s argument. If he will allow me, I will ensure that in due course he receives a fuller answer than I can give him in the three minutes remaining.
I want to add to some points about what has just been announced in the autumn statement. The Government have reinvested more than £900 million in HMRC to tackle evasion, unpaid tax debts and avoidance. That allocation of extra resources to HMRC during this spending review period will add a real element to what we have discussed today. Our serious compliance activity shows that the Government are committed to clamping down on tax avoidance wherever it is identified, and that is an important plank in what we are talking about in the most general terms and in preventing corruption.
The autumn statement announced the closure with immediate effect of some newly identified loopholes that were being exploited, and that will protect hundreds of millions of pounds for the UK. It also announced the introduction of the UK’s first general anti-abuse rule, which provides a significant new deterrent to abusive avoidance schemes and strengthens HMRC’s means of tackling them wherever they persist. Finally, we are cracking down on the marketing of tax avoidance schemes through proposals to introduce new information disclosure measures.
Catherine McKinnell
The Minister is aware that very little time is left for this debate. Apart from the measures that she has just outlined on activities at HMRC, she has not told us whether there is a cross-departmental anti-corruption strategy, or whether one is likely to be published. That would be useful information to have before we run out of time in this debate.
Miss Smith
I endeavoured to address that in my opening words. As the hon. Lady and the hon. Gentleman know, my right hon. and learned Friend the Minister without Portfolio is delighted to continue to be the anti-corruption champion; there has been no change in that respect following the ministerial reshuffle in September. It is with his full support that I am here today answering the hon. Lady’s questions.
It has been difficult to give a full overview of everything the Government are doing, but that is what I have endeavoured to do in this debate. I will convey to my right hon. and learned Friend her desire for a fuller response. I am sure that the all-party group’s work, which is supported across parties, will be well recognised, and I am sure that its desire for that strategy can be discussed in greater detail at a later date.
Question put and agreed to.
Written Ministerial Statements
Finance Bill 2013 and Tax Policy Update
(12 years ago)
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The Exchequer Secretary to the Treasury (Mr David Gauke)
The Government consulted on a number of tax policies, following their announcement in Budget 2012. Today the Government are publishing the response to these consultations alongside draft legislation to be included in Finance Bill 2013. This fulfils our objective to confirm the majority of intended tax changes at least three months ahead of publication. Draft legislation will be open for technical consultation until Wednesday 6 February 2013.
Details of the clauses published today are set out in the overview of legislation in draft document, which also includes tax information and impact notes for each measure. All publications will be available on both the HM Treasury and HM Revenue and Customs (HMRC) websites.
The Government are publishing draft legislation on policies announced at Budget 2012, including:
A general anti-abuse rule, to target abusive tax avoidance schemes;
Corporation tax reliefs to encourage investment in the production of animation, high-end television and video games;
An “above the line” R&D credit to encourage investment in research and development.
A package of property tax policies including a new annual residential property tax to be payable by certain non-natural persons that own interests in dwellings valued at more than £2 million, and an extension of the capital gains tax regime to non-residential non-natural persons disposing of interests in UK residential property valued at over £2 million. The capital gains tax (CGT) will be payable only on gains accruing on or after 6 April 2013. For consistency, the Government are considering extending the CGT regime to also apply to disposals of high-value residential property by UK NNPs. The Government would welcome views on the impact and implementation of this potential change by 18 January.
Introducing a statutory residence test, abolishing ordinary residence and eliminating the concept of “ordinary residence” for tax purposes as far as possible.
The Government will also publish draft legislation for policies announced in the 2012 autumn statement.
In addition the Government are also announcing a number of new measures for Finance Bill 2013. This includes draft legislation to:
Give HMRC the power to implement a special accounting scheme for air passenger duty that will allow eligible operators to submit annual returns.
Make changes to the carbon price floor legislation to clarify the tax point, taxable person and the treatment of auto-generators and combined heat and power stations.
Exempt universal credit from income tax.
To clarify the tax treatment of banks’ tier 2 regulatory capital instruments, as announced by the Financial Secretary to the Treasury on 26 October. This clarification will ensure that the coupon on tier 2 capital which is already in issue or yet to be issued will be deductible for the purposes of a bank computing its profits for corporation tax purposes. This will provide banks and investors with certainty.
Make amendments to allow the Finance Act 2003 inheritance tax measures on the treatment of open-ended investment companies (OEIC) and authorised unit trusts (AUT) to work in the way that was originally intended.
Amend the restrictions on when companies resident in the European economic area can surrender losses from their UK branches as group relief from corporation tax in the UK.
Introduce further minor simplifications to the remittance basis rules as they affect exempt property where such property is lost, stolen or destroyed and works of art on public display, and clarify the interaction between the time limits for the exempt property rules.
Ensuring that conditions imposed by a statutory body by which one company will leave a group at a pre-determined date will not prevent claims to corporation tax group relief. This targeted legislative amendment to the group loss relief rules will not remove the current loss-buying avoidance protection.
Ensure that a consistent time limit for repayment applies for all overpaid tax. This legislation will also correct an anomaly relating to time limits for loss relief.
In addition the Government are also introducing today draft secondary legislation to:
Clarify the tax treatment of new core tier one regulatory capital instruments which building societies have developed to ensure compliance with regulatory capital requirements under the forthcoming capital requirements directive IV. As building societies are mutual organisations their constitutions prevent them from issuing ordinary share capital in the same way as other companies. This change to secondary legislation will ensure that these new instruments, which will perform a similar function to ordinary share capital, will also be taxed in the same way as ordinary share capital.
The Government have also tabled one further related written statement today:
Draft legislation for Finance Bill 2013: Measures with effect on 11 December.
Finance Bill 2013
(12 years ago)
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The Exchequer Secretary to the Treasury (Mr David Gauke)
The Government are announcing today measures that will have effect from 11 December 2012 or shortly afterwards and will be included in Finance Bill 2013.
Further details have today been published on both the HM Treasury and on HM Revenues and Customs (HMRC) websites, together with the draft legislation and tax information and impact notes.
The following measures will take effect from today:
Debt cap: Group treasury company election
Legislation will be introduced to ensure that only the financing expenses and financing income-related to treasury activities are included in the election. If a company’s activities are all or substantially all treasury activities and its assets and liabilities relate to those treasury activities then its financing income and financing expenses can be included in the election. If a company’s treasury activities are not all of its activities then the election will only apply to its financing expenses and financing income that relate to the treasury activities.
The legislation amends section 316 Taxation (International and Other Provisions) Act 2010 and will take effect for periods of account of the worldwide group beginning on or after 11 December 2012.
Corporation Tax: Deferral of payment of exit charges
The Government are amending legislation to address the way in which HMRC collects corporation tax charges levied on unrealised profits or gains when a UK resident company that is registered in a European economic area (EEA) territory transfers its place of effective management to another EEA state (often described as an “exit charge”). This follows a decision by the Court of Justice of the European Union. The amendment will offer such companies the option to defer payment of the exit charge over a period of time provided that certain conditions are met. The change is intended to protect public finances, support businesses with cash-flow issues, and ensure UK law remains compatible with EU law.
The legislation will have effect to permit companies to submit claims for deferral of exit charges that fall due from 11 December onwards.
VAT forestalling road fuel
Draft legislation sets out the Government’s intention to impose an open market value (OMV) on supplies of road fuel made by taxpayers to employees and other connected persons where fuel is supplied at less than the OMV.
The draft legislation will apply from 11 December. However until the date of Royal Assent to Finance Bill 2013 affected taxpayers should declare output tax according to the invoiced value. After Royal Assent, to the extent that the amount charged is less than OMV and any part of the fuel has not yet been made available, these amounts will become incorrect and taxpayers will need to correct the under-declaration of output tax in the usual way. How to make corrections is explained in notice 700/45, which is available on the HMRC website.
In addition, the following measures will come into effect on 1 January 2013 and will be included in Finance Bill 2013:
Annual investment allowance (AIA)
To encourage investment and exports as a route to a more balanced economy, the Chancellor announced on 5 December 2012 a temporary increase to the AIA to support investment in the economy.
Legislation will be introduced to temporarily increase the AIA limit on qualifying expenditure that effectively receives 100% relief from £25,000 to £250,000. The AIA is available to most businesses, regardless of size. The increase in the AIA will apply to qualifying expenditure incurred between 1 January 2013 and 31 December 2014. This measure supports investment by accelerating the rate of relief on investment in qualifying assets.
Bank Levy
The Government have set out their intention that the bank levy should raise at least £2.5 billion each year. The full bank levy rate will increase from 0.105% to 0.130% from 1 January 2013 to restore expected yield for future years and to offset the benefit of corporation tax rate cuts to banks. The half-rate for chargeable equity and long-term chargeable liabilities will be increased from 0.0525% to 0.065%.
UK Swiss Remittance basis
Legislation will be introduced to ensure that, where levies are made under the terms of the Swiss UK tax cooperation agreement, those levies are not treated as remittances for UK tax purposes. To ensure that policy objectives behind the original agreement are delivered in full, this legislation will be effective from 1 January 2013, which is the date that the agreement is expected to come into force.
Amendments to Controlled Foreign Companies (CFC) rules
The Government are introducing legislation to prevent a potential loss of tax by amending the new CFC rules and limiting double taxation relief (DTR) in order to close avoidance and planning opportunities. In line with the new CFC rules the legislation will affect CFCs with accounting periods beginning on or after 1 January 2013.
Part 9A Taxation (International and Other Provisions) Act 2010 (TIOPA) will be amended to ensure that the new CFC rules apply to profits from all finance leases, including those made by way of a hire purchase or similar contract.
Part 9A TIOPA will also be amended to ensure that throughout the new CFC rules, questions of accounting treatment where accounts have not been prepared under either UK generally accepted accounting practice or international accounting standards are considered by reference to international accounting standards.
Part 2 TIOPA will be amended to limit the amount of DTR that can be claimed as a credit by a UK company or given by deduction to a UK company. The limitation will apply when one or more UK companies form part of an arrangement whereby a loan is made from one CFC to another CFC, where the latter is the ultimate debtor in relation to that loan. Where one or more UK companies form part of a conduit in such an arrangement the DTR will be limited to the corporation tax due in respect of the UK corporation tax profits that arise from that arrangement. The new limitation will apply to a UK company that derives profits from such an arrangement which involves CFCs with accounting periods beginning on or after 1 January 2013.
In addition the Government are introducing legislation to amend section 236(4) TIOPA with effect from 1 January 2013 to ensure the arbitrage rules do not apply merely as a result of the application of another territory’s CFC rules that are similar to those within part 9A TIOPA.
The Government have also tabled related written statement today:
Draft legislation for Finance Bill 2013 and tax policy update.
ECOFIN
(12 years ago)
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The Financial Secretary to the Treasury (Greg Clark)
A meeting of the Economic and Financial Affairs Council was held in Brussels on 4 December 2012. Ministers discussed the following items:
Banking Supervision Mechanism
Ministers discussed the latest proposal for a single supervisory mechanism (SSM). There will be a further ECOFIN Council on 12 December that will focus on the SSM ahead of the European Council meeting of 13 to 14 December.
Revised capital requirements rules (CRD IV)
The presidency updated Ministers on the current state of play of negotiations with the European Parliament on the proposals for revised capital requirements rules (CRD IV).
Economic governance—Two pack
The presidency updated Ministers on negotiations with the European Parliament on two draft regulations aimed at improving economic governance in the euro area. The UK Government tabled a minute statement where:
“The UK reiterated its clear understanding that there would be no new commitments from the European Financial Stabilisation Mechanism (EFSM) following entry into force of the European Stability Mechanism (ESM) Treaty on 27 September 2012, recalling the commitment in the European Council Decision of 25 March 2011, which states that as the ESM is designed to safeguard the financial stability of the euro area as whole, Article 122(2) of the TFEU will no longer be needed for such purposes. The Heads of State or Government therefore agreed that it should not be used for such purposes”.
Financial Transaction Tax (FTT)
The presidency updated Council on the European Commission’s proposal for an authorising decision on the introduction of a FTT by some member states using the enhanced co-operation procedure. The UK will not participate in an enhanced co-operation FTT.
Credit Rating Agencies
The presidency updated Ministers on the political agreement reached with the European Parliament on the credit rating agencies 3 (CRA3) dossier.
Macro-economic Imbalance Procedure—Commission annual report
The European Commission presented its second alert mechanism report, which is the first stage in the macro-economic imbalance procedure.
Annual Growth Survey 2013
The European Commission presented the annual growth survey for 2013.
Issues related to the Economic and Monetary Union
The European Commission outlined its report on a “Blueprint” for economic and monetary union.
Implementation of the Stability and Growth Pact
ECOFIN Council considered that Greece has taken effective action to correct the situation of excessive deficit; and adopted a decision granting Greece an additional two years to correct its excessive budget deficit in recognition that:
“effective action has been taken and unexpected adverse economic events with major unfavourable consequences for government finances occur after the adoption of the recommendation”.
VAT Quick Reaction Mechanism
Ministers held an orientation debate on a proposed directive amending the common system of value added tax as regards a quick reaction mechanism against VAT fraud, in particular on the issue of whether implementing powers under the proposal should lie with the Commission or the Council. A number of member states, including the UK, reiterated the importance of decisions on tax matters being made by the Council and being subject to unanimity. The Council agreed that further work was needed on this issue.
Annual Report of the Court of Auditors on the implementation of the budget for the financial year 2011
The president of the European Court of Auditors, Mr Vitor Caldeira, presented to Council the annual report of the Court of Auditors on the implementation of the budget for the financial year 2011. The UK expressed its disappointment that the Court of Auditors were unable to give an unqualified assurance for the 18th consecutive year and that the error rate had increased to 3.9% from 3.7% in 2010.
Code of Conduct (Business Taxation)
ECOFIN adopted Council conclusions on a report in relation to the code of conduct (business taxation), summarising the work of the code group under the Cypriot presidency. Following a minute statement at Coreper by Spain, the UK tabled a statement to confirm that the Government of Gibraltar have already begun work to ensure an element of their Income Tax Act complies with the principles of the code.
Financial Services
(12 years ago)
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The Economic Secretary to the Treasury (Sajid Javid)
UK Asset Resolution (UKAR) has identified certain Consumer Credit Act (CCA) regulated loans in the Northern Rock (Asset Management) (NRAM) portfolio where the loan documentation is not compliant with CCA requirements. In selected letters and customer account statements, certain paragraphs of mandatory wording were written incorrectly and compulsory information about the amount of credit was not included in the statements. The CCA provides that a lender is restricted in how it can enforce a debt and borrowers are not liable for interest, over the period during which the lender has not provided the specified information. The period of non-compliance originates from changes to the CCA implemented in 2008 before the separation of NRAM and Northern Rock plc.
UKAR has undertaken an internal investigation and has consulted with legal counsel, the Financial Services Authority (FSA), the Office of Fair Trading (OFT), UK Financial Investments (UKFI) and the Treasury. Following this, the UKAR board has recommended making proactive restitution to affected NRAM customers in receipt of non-compliant statements and default notices relating to CCA-regulated loans. Based on discussions with UKFI, the Treasury has no objections to UKAR’s proposed approach and UKAR will issue the corrected documentation and take steps to remediate interest and other charges to affected customers. Where redress is required, this will be made by correcting a customer’s account balance to reverse the consequences of them being charged any interest over the period in which the documentation is non-compliant. UKAR will contact potentially affected customers in writing with further information. NRAM will be writing to all existing customers in the next few days. There is no need for customers to take any action at this time.
Separately, the UKAR board has asked Deloitte to conduct an independent enquiry into the specific circumstances of the issue and to make recommendations on potential enhancements to the associated processes and controls.
The cost to NRAM of remediating the interest charges on affected accounts is estimated at £270 million. As a result of the reclassification of UKAR by the Office of National Statistics this year, UKAR was included within the OBR forecast for public sector net borrowing (PSNB) in 2012-13 in the autumn statement. The costs to UKAR from remediation were not included in this forecast. The impact of these costs on the public finances is a decision for the independent Office for National Statistics. This is likely to increase public sector net borrowing in 2012-13. However it remains the case that borrowing will continue to fall in that year.
UKAR has confirmed that NRA has the financial resources to make the remediation. NRAM’s interim financial results for the six months to June 2012 show a statutory profit before taxation of £305 million and NRAM is expected to remain profitable in 2012.
The remediation is not expected to delay materially the ultimate timing of the repayment of the NRAM Government funding, which stands at £19.6 billion as at June 2012. The Treasury continues to estimate that it will fully recover all the taxpayer support provided to NRAM.
East of England Regional Strategy (Revocation)
The Secretary of State for Communities and Local Government (Mr Eric Pickles)
The coalition Government have today laid in Parliament an order to revoke the regional strategy for the East of England. All directions preserving policies contained in structure plans in the area to which the East of England regional strategy relates are also revoked.
Following the passage of the Localism Act, the abolition of the regional strategy for the East of England is a major milestone for localism.
This Government have been clear from the outset that planning works best when the people it affects are placed at the heart of the system. The abolition of regional planning across this region will give local councils and local people right across the former East of England government region more control of shaping the places in which they live. It reinforces our policy to enshrine the local plan, produced with the involvement of local people, as the keystone of the planning system.
The regional strategy imposed development upon communities. Such a top-down process just built resentment. Its removal means the issues that matter to local communities in the region can take centre stage. Only local people understand the unique priorities, aspirations and heritage of an area. Local empowerment brings development by consensus; development that is more sensitive to local characteristics, including to habitats and the environment, and development that is good for growth. Matched with the duty to co-operate, a statutory requirement upon local councils to work together to plan for cross-boundary development, we believe that a locally-led planning system can better deliver the homes, jobs and infrastructure the country needs.
As outlined in the written ministerial statement of 25 July 2012, Official Report, House of Lords, column WS66-68, the decision to revoke the East of England regional strategy has been made after a strategic environmental assessment and comprehensive consultation on the environmental impacts of abolition. The reasons for the decision to revoke the regional strategy rather than retain all or part of the strategy are set out in a post-adoption statement, which has been placed in the Library of the House and is available online at:
https://www.gov.uk/government/consultations/strategic-environmental-assessment-of-revoking-the-east-of-england-regional-strategy.
The order is laid under the negative resolution procedure and will take effect on 3 January.
Education, Youth, Culture and Sport Council
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr Edward Vaizey)
A meeting of the Education, Youth, Culture and Sport Council was held in Brussels on 26 to 27 November. The UK was represented at the culture and audiovisual and sport sections of the Council by the deputy permanent representative to the EU, Shan Morgan.
Culture and Audiovisual
The Council adopted a revised partial general approach on the proposal for a regulation establishing the creative Europe programme for 2014-20. This programme will follow on from the current Culture, Media and Media Mundus programmes. The revised partial general approach incorporated the text relating to the proposed new loan guarantee facility into the partial general approach which was agreed at the Council meeting in May. It did not include the programme budget.
The UK did not support the revised partial general approach. We cannot consider supporting the loan guarantee facility until we are able to consider it in the context of the overall programme budget and in relation to the amount of funding allocated to grant expenditure. These will not become clear until the negotiations on the multiannual financial framework for 2014-20 have been completed. In addition, the revised partial general approach—like the previous partial general approach, which the UK did not support—does not provide for selection decisions, i.e. decisions about which projects will be awarded EU funding under the programme, to be subject to member state scrutiny through the formal comitology arrangements. However, we are able to support other elements of the revised partial general approach.
The Cypriot presidency presented a progress report on the proposal for a decision establishing the European capitals of culture action for 2020-33. This action will follow on from the current European capitals of culture action which ends in 2019. It envisages a further round in which each member state will have the opportunity to host a European capital of culture, with a selection and monitoring procedure similar to the current procedures but with some changes and improvements. In discussions in the Council working group, Member states have broadly welcomed the proposal but have identified a number of aspects which require further consideration. The UK has contributed some ideas and suggestions for amendments.
The Council adopted conclusions on cultural governance. These conclusions note the importance of research and statistics in cultural governance and in developing policies and strategies for the cultural and creative sectors; and they identify some key issues for future work and propose some actions for the Commission and member states to maximise the use and benefits of current work in these areas. The UK supported the adoption of these conclusions.
The Council also adopted conclusions on a European strategy for a better internet for children and held a policy debate on the internet: a better and safer place for children as a result of a successful interplay between Government and industry. The UK supported the adoption of the conclusions. In the debate member states agreed that co-operation between public and private players was essential to deal with rapid technological change and ensure that children were protected online, and most also supported the Commission’s emphasis on self-regulation. In this context, the UK reported on the work of the UK Council for Child Internet Safety and argued that more effective discussion and co-ordination of member state initiatives was needed. The Commission welcomed the UK’s initiative to appoint a UK digital champion.
Sport
The Council adopted, without debate, conclusions on strengthening the evidence base for sport policy-making and on promoting health-enhancing physical activity. The Council also formally designated the three EU representatives to the World Anti-Doping Agency (WADA) foundation board.
The Council did not adopt draft conclusions on establishing a strategy to combat the manipulation of sporting results, because of a disagreement which could not be resolved over a paragraph encouraging member states to put in place adequate measures to fight illegal gambling offers, notably those from third countries. The text was instead adopted as presidency conclusions.
The Council debated a proposal from the Commission to establish a European week of sport and measures to get people “from the sofa to the playing field”. The UK argued that the Commission’s proposal should present something “conceptually different” and also explained how virtual media is being used to drive physical activity and engage people, especially young people.
Any Other Business
The French and Slovak delegations presented information on Marseille-Provence and Kosice respectively, which will be the European capitals of culture in 2013.
The French Minister raised concerns about the revised draft cinema communication on state aid for films and other audiovisual work. He argued that the Commission’s proposed new rules on territorialisation could jeopardise the diversity of the European film industry and called for further discussion before any decisions were taken. This was supported by a number of other member states. The UK intervened to support the latest Commission text and call for a speedy resolution of the issue. The Commission acknowledged that member states have different measures to support the film industry but agreed with the UK that the uncertainty should not be prolonged. The Commission agreed that a new round of discussions was required, but hoped that the text of the communication would be finalised in January.
EU Education and Youth Council
(12 years ago)
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The Parliamentary Under-Secretary of State for Skills (Matthew Hancock)
I represented the UK at the 26 November Education Council. The Council adopted two sets of non-binding political conclusions, on literacy, and the role of education in Europe 2020; and a recommendation on the validation of non-formal learning. Ministers also discussed how the quality of teachers can be improved at a time of scarce financial resources.
Literacy
Non-binding conclusions on action to improve literacy were adopted. I intervened to acknowledge the importance of literacy but expressed doubt about the added value of EU-level action. Specifically, I questioned whether a proposed “Europe loves reading week” would be a good use of scarce resources, and whether Ministers really knew enough about the costs and benefits of such an initiative.
Education and training in Europe 2020
Non- binding conclusions on the role of education and training in Europe 2020 were also agreed. While accepting that education has an important role in promoting growth, I intervened to urge the Commission to move away from a prescriptive approach in the education field that is characterised by target-setting. As an alternative, I cited the OECD’s approach to putting high quality analysis and data into the public domain, challenging policymakers with evidence from around the world, but leaving it to individual countries to draw their own conclusions for policy design.
Validation of non-formal and informal learning
The Council adopted a non-binding recommendation calling upon member states to commit to the recognition of non-formal and informal learning within national qualification systems. The UK already has such systems in place at present.
None of these items will have any direct impact on the UK, and there are no follow up actions.
Improving teacher quality and status
Ministers had a useful discussion on how the quality of teachers can be improved at a time of scarce financial resources.
The Irish Minister opened the debate, highlighting the “inconvenient fact” that Europe is no longer the best place to get a good education and that we are now in a period of technological change which demands better, more effective training and support for teachers. I cited key UK reforms to improve teacher quality, including our ambitious “Teach First” programme, and initiatives aimed at making it easier for head teachers to tackle underperformance.
Doha Climate Change Conference
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
The annual conference of the parties (COP) to the United Nations framework convention on climate change took place in Doha, Qatar, from 26 November to 8 December. The United Kingdom was represented by the Secretary of State for Energy and Climate Change, the right hon. Member for Kingston and Surbiton (Mr Davey), and the Minister of State, Department of Energy and Climate Change, the right hon. Member for Bexhill and Battle (Gregory Barker).
What we agreed
After the success of last year’s Durban conference in agreeing to negotiate by 2015 a new global legally binding agreement to come into force from 2020, while focusing renewed efforts before 2020 on raising ambition in reducing greenhouse gas emissions, this year’s conference needed to make progress on both. It was never going to be a major breakthrough meeting, but I am pleased to say that, following two weeks of intense negotiations, the UK’s objectives this year were largely achieved. We agreed a high-level work plan for negotiating the new agreement by 2015 and for enhancing the political space for and breadth of recognition of efforts to raise ambition. In doing so, it was important to ensure the current regime would not fragment and that the rules and mechanisms within it can be developed further ahead of the new regime from 2020. To this end, we, with our European partners, Australia and some others agreed to bind our existing actions on reducing greenhouse gas emissions into international law by entering a second commitment period of the Kyoto protocol (KP2). We also secured agreement to further work on developing the rules base around accounting, measurement, reporting and verification of effort by countries not in the KP2, while also streamlining the three negotiating tracks working in parallel at Doha into one negotiation focused on the new agreement and the need to raise ambition. This was a step forward on the way towards getting back on track towards addressing the growing gap between current greenhouse gas emissions and a cost-effective trajectory of reducing such emissions that would be consistent with limiting average global temperature increases to below 2°C above pre-industrial levels.
Climate finance
The EU is the world’s leading provider of official development assistance and climate finance to developing countries. In Doha the EU demonstrated that it is on track to provide the full €7.2 billion it has pledged in “fast start” finance for the period 2010-12 and assured its developing country partners that climate finance will continue after this year. A package of decisions on finance encourages developed countries to keep climate finance in 2013-15 to at least the average level of their fast start finance. The decisions also extend a work programme on long-term finance for a year, with the aim of helping developed countries identify pathways for scaling up climate finance to $100 billion per year by 2020 from public, private and alternative sources in return for continued meaningful action by developing countries. I used the UK’s commitments on climate finance, agreed and first announced in 2010 as part of the current spending period, to add momentum to the negotiations at a key point during the second week. This helpfully also secured public announcements by many other donors of the climate finance they were also delivering, demonstrating that showing leadership draws others.
Loss and damage associated with climate change
A key concern of many developing countries was the issue of “loss and damage”. By agreeing to establish an institutional process under the regime to address more structurally loss and damage associated with the impacts of climate change in particularly vulnerable developing countries we headed off calls for an unbounded process towards compensation. The arrangements will be established at the UN climate conference to be held at the end of next year in Warsaw.
What does the second commitment period of the Kyoto protocol mean?
The second commitment period of the Kyoto protocol will start on 1 January 2013. It is a ratifiable amendment to the Kyoto protocol setting out the rules governing the second period. It will run for eight years, thus ensuring no gap occurs between its end and the entry into force of the new global agreement in 2020. The EU will apply the amendment from 1 January 2013 even though formal ratification by the European institutions and member states is likely to take over a year. I shall bring forward the process of ratification to the House in 2013.
For the second period the EU has taken on an emissions reduction commitment in line with its existing target of cutting emissions by 20% by 2020 compared to 1990, but has left the door open to stepping up this reduction to 30% if the conditions are right—an important provision given the coalition Government’s commitment to work towards this step up of climate ambition in the EU. The reduction commitment will be fulfilled jointly by the EU and its member states, Croatia and Iceland. The targets of all countries participating in the second period will be revisited by 2014 with a view to considering raising ambition.
The EU and other countries taking on targets under the second period will have continued access to the Kyoto mechanisms from the start of the period, an important element for businesses and market certainty across Europe. A limit on purchases of surplus emission budgets (“AAUs”) from the first commitment period and rules narrowing the potential for using such AAUs at all in the second commitment period will apply. Moreover, the decision includes political declarations by the EU and its member states and almost every other potential buyer—Australia, Japan, Liechtenstein, Monaco, Norway and Switzerland—stating that they will not purchase AAUs carried over from the first period.
The second period forms part of the transition to the global agreement taking effect in 2020. Including the EU, the countries taking part in the second Kyoto period account only for around 14% of world emissions—by 2020 this could be less than 10% of global emissions. This underscores the need for the future climate regime from 2020 to involve action by all.
Overall, the Doha conference represents a useful step forward. It has reaffirmed the commitment to a 2015 global agreement, given space and a process for focus on raising shorter-term ambition, and preserved the Kyoto protocol and a wider rules-based system that will help form the foundations of the new agreement.
Lastly, I wish to pay tribute to the UK delegation to the talks who worked tirelessly, including several times through the night, professionally and expertly across the range of issues, ensuring the UK played a leading role in delivering the outcome.
We continue to have much to do. Doha has kept the forward momentum that has been a feature of this process since the difficulties at Copenhagen in 2009. But we need to take significant further action globally, and urgently, if we are to stand any chance of limiting global warming to 2°C above pre-industrial levels.
Dairy Industry
(12 years ago)
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The Minister of State, Department for Environment, Food and Rural Affairs (Mr David Heath)
This has been a difficult year for domestic dairying and parts of the industry have struggled. However, there is now a positive way forward following the groundbreaking code of practice on contractual relationships that the industry has put in place. Dairy farmers, processors and their customers are now making use of the code to support better contracts and clear and transparent pricing.
The Government are also taking further steps to support the dairy industry so that dairy farmers can have a stronger position in the marketplace.
From today a new £5 million dairy fund will be open for business through the rural development programme for England. To help business growth, the fund will allow farmers to apply for £25,000 minimum grants to support groups of dairy farmers. The grants could cover costs to establish new co-operation structures, such as producer groups and co-operatives, or to invest in technology to take advantage of new market opportunities.
DEFRA is also consulting on new rules that will allow English dairy farmers to come together and form producer organisations to sell their combined milk to processing companies rather than negotiate as individuals. We are launching today a six-week consultation on how to implement the European Union’s dairy package in England. Scotland, Wales and Northern Ireland will hold their own consultations. Currently farmers negotiate with processors as individuals, but under the new EU rules, producer organisations, which are already widespread in other European countries, could cover up to a third of UK production and would negotiate on behalf of members.
Dairy is our largest agricultural sector and there are real opportunities for UK dairying with growing global demand for dairy products. Because of its strong natural dairying advantages, the UK is well placed to exploit domestic added value and export markets. The Government will continue to support the development of a profitable, thriving and competitive dairy industry.
Turks and Caicos Islands
(12 years ago)
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The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mark Simmonds)
My right hon. Friend, the Minister of State for International Development, and I wish to update the House about developments in the Turks and Caicos Islands (TCI), a British overseas territory.
On 9 November 2012 elections were held in TCI that brought back a democratic Government to the territory. There was an impressive 84% turnout of voters. The Progressive National Party (PNP) won eight seats and the People’s Democratic Movement (PDM) seven seats. Dr Rufus Ewing, the leader of the PNP, was sworn in as Premier on 14 November.
The Commonwealth Parliamentary Association organised an election observer mission with participation from Gibraltar, countries from the Caribbean region and the hon. Member for Dunfermline and West Fife (Thomas Docherty) and my hon. Friend the Member for Rochford and Southend East (James Duddridge). The mission’s full report will be issued shortly, but I note their initial statement that
“the voters had a genuine choice from among the candidates. The process was transparent and accountable and the results reflect the will of the people”.
This election opens a new chapter for TCI. In August 2009, the ministerial Government and the House of Assembly were suspended after Sir Robin Auld’s Commission of Inquiry identified a high probability of systemic corruption in Government and the legislature and among public officers in TCI. Since then there has been much progress. In a written ministerial statement on 9 December 2010, Official Report, columns 20-41WS, UK Ministers agreed milestones for progress towards elections. Over the last three years an interim Administration led by the Governor and supported by the UK Government has implemented a wide-ranging reform programme to meet the milestones, including putting the public finances on the road to recovery, establishing a robust framework for good governance, and strengthening the public service. The Foreign and Commonwealth Office and the Department for International Development Ministers last updated the House on progress against the milestones on 12 June 2012, Official Report, columns 20-23WS.
I have just returned from a visit to the Turks and Caicos Islands and in this statement today, I wish to inform the House on the progress made by the interim Government under each milestone in the run-up to the elections;
Implementation of a new TCI Constitution Order, in support of recommendations of the Commission of Inquiry, which underpins good governance and sound public financial management.
The new constitution was brought into force by the Governor on 15 October, and elections held on 9 November within the prescribed 30-day limit. Preparations for the elections were made in line with the revised elections ordinance. A new register of electors was compiled on the basis of a registration exercise for all islanders. An Electoral Boundaries Commission defined 10 new electoral districts with broadly similar numbers of electors. Practical preparations were made for elections at 17 polling stations across TCI’s main islands. The interim Administration adopted a statement of governance principles on 15 June. Under the new constitution, all organs of Government in the islands have a duty to give effect to the statement of governance principles established under the constitution and the Governor has certain powers to ensure compliance with the principles.
An equality ordinance became law in October to clarify the rights of all members of the community, in line with the non-discrimination provisions in the new constitution.
Introduction of a number of new ordinances, including those making provision for: i) the electoral process and regulation of political parties: ii) integrity and accountability in public life: Hi) public financial management
The political activities ordinance was introduced in August to define acceptable political financing and oversight. Work in this area was assisted by a visit in July by UK political party members, organised by the Westminster Foundation for Democracy, led by my hon. Friend the Member for Brigg and Goole (Andrew Percy).
The chief financial officer (CFO) ordinance was introduced in June 2012 to define this role within the restructured TCI Government, and as provided for in the 2012 Constitution Order and under the arrangements for the $260 million UK loan guarantee.
Establishment of robust and transparent public financial management processes to provide a stable economic environment and a strengthening of the TCI Government’s capacity to manage its public finances
Financial management regulations for the public sector were amended in line with the public financial management (PFM) ordinance and international good practice. A public financial management framework document was agreed that sets out the key principles of good financial management and the debt threshold targets agreed by the Secretary of State. Key requirements are that net debt is less than 110% of revenue by end of 2015-16 and less than 80% of revenue by the end of 2018-19, and that debt service is less than 10% of annual operating revenue and liquid assets at least 25% of annual operating revenue.
The public procurement ordinance was introduced in October creating a central public contracts unit, and defining the framework for future tenders and contracts.
Reforms to the Audit Department in the TCI Government split it into two distinct bodies: the National Audit Office, to operate outside ministerial control; and the Internal Audit Department to focus on internal Government controls, risk management and governance processes.
Implementation of budget measures to put the TCI Government on track to achieve a fiscal surplus in the financial year ending March 2013
The TCI Government are working towards achieving a budget surplus for the full year at the end of March 2013. The interim Government made good progress in stabilising the public finances. A recent mid-year forecast indicated that the expected surplus remains in line with the budget.
Implementation of a transparent and fair process for acquisition of Turks and Caicos Islander status
A revised immigration ordinance and immigration regulations were introduced in July. There is now no discretionary provision in law for the granting of Belonger status. The newly elected Government will need to bring forward an ordinance defining Turks and Caicos islander status in line with the new constitution.
Significant progress with the civil and criminal process recommended by the Commission of Inquiry, and implementation of measures to enable these to continue unimpeded
Thirteen people, including four former Ministers, have been charged with corruption and other serious criminal offences. These cases are now before the courts. The plea and directions hearing has been delayed at the request of the defence and is now expected to be held in April 2013. International arrest warrants and Interpol red notices were issued in respect of the former Premier Michael Misick and the developer Cem Kinay, and Michael Misick was subsequently arrested in Rio de Janeiro in Brazil on 7 December. His extradition to the Turks and Caicos Islands is being sought. The civil recovery team continued to recover property and redress loses arising from corruption. Some 52 separate recoveries of Crown land totalling 2,447 acres have now been made, and financial settlements totalling US$16 million have been reached.
Implementation of a new Crown land policy
The Crown land ordinance came into force in March 2012. The Lands Commissioner has continued to implement the reforms for land transactions, and assisted with the appointment of a new Lands Registrar.
Substantial progress in the reform of the public service
Progress has continued. The public service has focused on raising the standard of policy development in preparation for transition to an elected Government and providing support to new Ministers. The public service ordinance was introduced in October and defines the roles of Ministers and permanent secretaries, describes new discipline procedures and expects all staff to be subject to measurable performance management. The general orders regulating the work of the public service were updated and a new public service handbook issued to public servants.
Conclusion
A solid foundation has been built for the return to elected Government. Over the last three years an interim Administration, supported by the UK Government, has implemented a wide-ranging reform programme to meet the milestones, including putting the public finances on the road to recovery, establishing a robust framework for good governance, and strengthening the public service. The interim Administration has also modernised the management and delivery of public services, attracted substantial inward investment and restored economic growth. This programme of reforms has been a significant achievement.
The hard work is far from over. The TCI Government benefit from a $260 million UK loan guarantee. We will keep vigilant to help ensure they meet their fiscal objectives and can finance their borrowing independently and on an affordable and sustainable basis from the end of 2015-16 without a UK guarantee.
A robust framework for the management of public finances has been put in place. The constitution requires the new Turks and Caicos Islands Government to formulate and conduct macro-economic and fiscal policy for the sustained long-term prosperity of the people of the islands, and to manage public funds according to established principles of value for money, affordability and regularity and in the interests of long-term financial stability. The constitution provides the Governor with reserve powers to ensure compliance with the principles of good governance. It establishes a number of institutions to protect good governance including an Auditor-General and a National Audit Office.
A framework document has also been put in place that sets out the key principles of good financial management as well as the debt targets agreed by the Secretary of State. Key requirements are that net debt is less than 110% of revenue by the end of 2015-16 and less than 80% of revenue by the end of 2018-19, and that debt service is less than 10% of annual operating revenue and liquid assets at least 25% of annual operating revenue. The incoming Government will need to meet the provisions of the framework document including agreeing with the Secretary of State a fiscal and strategic policy statement (FSPS) which is a medium-term plan that includes revenue and expenditure forecasts for at least the next three financial years. The Turks and Caicos Island Government must seek agreement to the FSPS before proposing a budget.
It is important that the new Government maintain a credible and sustainable fiscal policy, including reducing their net debt levels, so that they can refinance themselves independently by the time the debt guaranteed by the UK Government is due to be repaid in March 2016. UK approval to the budget and fiscal plans will be contingent on TCIG formulating credible policies to meet these key objectives. DFID are providing a chief financial officer whose authority and responsibilities are set out in TCI law and who is expected to ensure that fiscal plans are delivered.
We are confident that the above arrangements will ensure sufficient financial controls over the public finances are maintained, including with the objective that a UK loan guarantee is no longer required after March 2016. Achievement of this objective will depend on many factors including the conduct of the Government of TCI and the performance of the TCI economy. Lenders will expect a record of sound fiscal policy as a necessary pre-requisite for the TCI Government to refinance independently.
In line with the overseas territories White Paper published in June 2012, the UK Government look forward to working with the newly elected TCI Government to promote good governance in order to help them attract new investment, maintain economic growth and so deliver sustained long-term prosperity for the people of the islands.
The UK will continue to support TCI to develop its democracy and in its efforts to build on recent reforms, particularly prudent financial management, economic growth and sustainable prosperity.
Whiplash Claims
(12 years ago)
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The Parliamentary Under-Secretary of State for Justice (Mrs Helen Grant)
I am today announcing the publication of the Government’s consultation “Reducing the Number and Costs of Whiplash Claims”.
Between 2006-07 and 2011-12 claims for personal injury caused by road traffic accidents increased by around 60%. Over the same period the number of reported road traffic accidents fell by around 20%.
The Government share the widespread concerns about such a disproportionate growth in whiplash claims and its cost to motor insurance policy holders, and is already taking forward work to tackle the issue.
The consultation considers two particular areas. The first is whether independent medical panels should be created and, if so, what model should be adopted.
The second is whether in respect of road traffic accident personal injury claims, the current small claims threshold for pain, suffering and loss of amenity should be increased from £1,000 to £5,000, either for all personal injuries or for whiplash injuries only.
The Government accept that the growth in claims for whiplash injuries is complex, and the consultation considers what more can and should be done by all with an interest in the personal injury sector.
Copies of this Government consultation are available in the Vote Office and the Printed Paper Office. The document is also available online at:
http://www.justice.gov.uk.
Grand Committee
Arrangement of Business
The Deputy Chairman of Committees (Baroness Gibson of Market Rasen)
My Lords, if there is a Division in the House, the Committee will adjourn for 10 minutes.
Financial Restrictions (Iran) Order 2012
(12 years ago)
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Lord Newby
That the Grand Committee do report to the House that it has considered the Financial Restrictions (Iran) Order 2012.
Relevant document: 12th Report from the Joint Committee on Statutory Instruments
Lord Newby
My Lords, the Treasury laid the Financial Restrictions (Iran) Order 2012 before Parliament on 20 November under the powers of Schedule 7 to the Counter-Terrorism Act 2008. The order contains a direction requiring UK credit and financial institutions to cease business relationships and transactions with all banks incorporated in Iran, including their branches and subsidiaries, wherever they are located, and the Central Bank of Iran.
The direction came into force on 21 November 2012 and is in the same terms as that contained in the Financial Restrictions (Iran) Order 2011. The Treasury considers that the conditions required to give a direction under the Act are met. I propose to set out the reasons for this action and provide details of the restrictions and what their impacts are, including what measures have been undertaken to ensure that the UK financial sector can comply.
On the rationale for the order, the Government are clear that activity in Iran that facilitates the development or production of nuclear weapons poses a significant risk to the national interests of the United Kingdom. The order was given in response to this risk. The Government continue to have serious concerns about Iran’s proliferation-sensitive activities and these concerns are shared by the international community.
Recent reports of the board of governors of the International Atomic Energy Agency, the UN body charged with monitoring Iran’s activities, reported evidence of Iran’s nuclear programme being used for non-civilian purposes. A report issued on 16 November this year set out the agency’s concerns about the,
“possible existence in Iran of undisclosed nuclear related activities involving military related organisations, including activities related to the development of a nuclear payload for a missile”.
Information available to the International Atomic Energy Agency in 2012 further corroborated analysis indicating that Iran has carried out activities that are relevant to the development of a nuclear explosive device.
A statement issued by the IAEA to its board of governors on 29 November 2012 raised a further concern, setting out that Iran is not co-operating with an investigation into its nuclear activities. The Government view this with the utmost concern.
In response to the November IAEA report, the board issued a resolution stressing that due to a lack of co-operation from Iran it was unable to,
“conclude that all nuclear material in Iran is in peaceful activities”.
Despite intensive efforts throughout 2012 by the IAEA to seek to resolve issues relating to Iran’s nuclear programme this has been without concrete results. The board urged Iran to abide by its international obligations and called on Iran to engage seriously on the nuclear issue. These are concerns of the most serious nature, with far-reaching consequences for the UK’s interests.
The case for UK action is underlined by continued calls from the Financial Action Task Force—the global standard-setting body for combating money-laundering and the financing of terrorism—for countries to apply effective countermeasures to protect their financial sectors from money laundering and financing terrorism risks emanating from Iran. These calls were renewed with urgency on 19 October 2012 and noted FATF’s particular and exceptional concern about Iran’s failure to address the risk of terrorist financing and the serious threat this poses to the integrity of the international financial system. The FATF has not expressed such serious and ongoing concerns about any other country.
It is clear, therefore, that activities in Iran pose a threat to UK interests and in particular a threat to the UK financial system. Iranian banks play a crucial role in providing financial services to individuals and entities within Iran’s nuclear and ballistic missile programmes, as companies carrying out proliferation activities will typically require banking services. Many Iranian banks have been sanctioned by the UN and EU for their role in Iran’s proliferation-sensitive activities. Unfortunately, experience under existing financial sanctions demonstrates that targeting individual Iranian banks is not sufficient. Once one bank is targeted, a new one can simply step into its place.
Over the past year the Financial Restrictions (Iran) Order 2011 restricted the options available to Iranian banks in accessing the global financial system by removing the option of utilising the UK, which is an important global financial centre.
The 2012 order will ensure that the Iranian banking sector continues to have its access to the UK financial system restricted. This will make it more difficult for Iranian banks to utilise the international financial system in support of proliferation-sensitive activities. This action also protects the UK financial sector from the risk of unwittingly being used to facilitate activities which support Iran’s nuclear and ballistic missile programmes.
This action is in line with the Government’s dual-track strategy of pressure and engagement with Iran. The aim of the pressure track is to encourage Iran to begin serious and meaningful negotiations on the issue of its nuclear programme. It is also in line with action taken by the UK’s international partners. The US, Canada and the EU have all implemented new financial sanctions against Iran in the last year.
Importantly, the EU has announced steps to mirror the UK’s action. The UK strongly supports the decision made by the EU in October 2012 that announced its intention to implement a prohibition on financial transactions between EU credit and financial institutions and Iranian banks. This will see the key elements of the UK order mirrored throughout the EU. When this EU-wide prohibition enters into force, Ministers will review whether it is appropriate to have both the EU and UK prohibitions in place.
I would now like to explain the specifics of the order. Like the 2011 order, this order was made under Schedule 7 to the Counter-Terrorism Act 2008, which provides the Treasury with the power to give a range of directions to UK credit and financial institutions in response to certain risks to the UK’s national interests. The power under Schedule 7 enables the Treasury to respond to proliferation risks, as we have done in this case, as well as money-laundering and terrorist-financing risks, or where the FATF calls for countermeasures.
The restrictions apply requirements to persons operating in the UK financial sector, which includes FSA-authorised firms, credit institutions, money service businesses and insurers. Firms are required to establish whether any current or future business relationships or transactions are affected, and to take steps to comply with the requirements of the restrictions. Although the restrictions are only given to the financial sector, they will continue to make it difficult for other companies to trade with Iran.
The UK Government actively discourage trade with Iran. The value of UK trade with Iran has declined by 39% in the period between November last year, when the 2011 order was introduced, and September 2012, when the most recent figures became available, compared to exports in the same period in the previous year. Companies affected by the restrictions can apply to the Treasury for a licence of exemption. We will examine each licence application on a case-by-case basis. The restrictions contained in the order sit alongside the existing sanctions measures imposed against Iran by the UN and the EU. However, the restriction goes further than current existing sanctions, because it prohibits certain activities that would otherwise be permitted under those sanctions.
I will now provide some further information on the operation of the restrictions. The order was laid in Parliament on 20 November, and came into force on 21 November. The Treasury published a series of documents on its public website that notify the financial sector about the restrictions and provide detailed guidance on their implementation. These documents were also e-mailed to more than 13,000 subscribers to our e-mail alert system.
The documents published on the Treasury website on 21 November included six general licences that exempt certain activities from the restrictions. These general licences permit credit and financial institutions to provide financial services for humanitarian purposes, and personal remittances between individuals here and in Iran. Where outstanding business relationships or transactions remain, they also permit credit and financial institutions to manage the cessation of business in an orderly and controlled way. A general licence will ensure that all the transactions or business relationships authorised under the 2011 order will continue to be licensed under the current order. The Treasury may grant further specific licences to manage the impact of the order on third parties. This approach is similar to that exercised under last year’s order.
As the direction is in the terms contained in the 2011 order, there are no additional requirements on financial sector firms as a result of this year’s order. Firms will already have in place procedures and systems to comply with the 2011 order and obligations relating to EU financial sanctions and anti-money-laundering measures. This should assist in minimising the burden of compliance with the restrictions. As a result of the 2011 order, since 21 November last year firms have been unable to undertake new transactions or business relationships with banks incorporated in Iran. The UK financial sector will need to continue to ensure that it does not undertake new transactions or enter into new business relationships with any bank incorporated in Iran, including the central bank, and branches or subsidiaries of banks incorporated in Iran. Supervision of the financial sector’s compliance with these restrictions will form part of the existing supervisory regime of the FSA and HMRC.
I conclude by emphasising that this direction was given by the Government to respond to the continuing and severe risk that Iran’s nuclear activities pose to the UK’s national interest. Iran’s proliferation-sensitive activities are a serious and ongoing concern for the UK and the international community as a whole. It is vital that we continue to take steps to increase pressure on the Iranian regime and encourage Iran to begin serious and meaningful negotiations on the issue of its nuclear programme. For these reasons, I commend the order to the House.
Lord Tunnicliffe
My Lords, I will speak very briefly. I thank the noble Lord for repeating this speech, which at least gave me the opportunity to read it beforehand. The key questions here are whether this order is necessary and whether it is effective. The speech refers to a report issued on 16 November to the board of governors of the International Atomic Energy Agency and I have taken the trouble to read through it. It is, as the noble Lord suggested, quite chilling in nature. There is the reference to potential missile capability, to which he has already alluded, but there is also reference to things that have happened in the past year, particularly at Parchin where,
“information provided to the Agency by Member States indicates that Iran constructed a large explosives containment vessel in which to conduct hydrodynamic experiments”.
I have a passing understanding of how to make a bomb, and the one thing you need is the uranium we all talk about; the other is very clever explosives to make the uranium go critical and create the bomb. The existence of this facility is indeed chilling since it is very difficult to believe that it had any non-military use.
Since then, there has been considerable activity during 2012 which seemed to be either trying to hide or dismantle the facility. As the report says:
“In light of the extensive activities that have been, and continue to be, undertaken by Iran at the aforementioned location on the Parchin site, when the Agency gains access to the location, its ability to conduct effective verification will have been seriously undermined. While the Agency continues to assess that it is necessary to have access to this location without further delay, it is essential that Iran also provide without further delay substantive answers to the Agency’s detailed questions regarding the Parchin site”.
I quote those parts of the report merely to emphasise that, in our support of this order, we are sensitive to the fact that the situation with Iran has sadly not improved over the past 12 months, and therefore the continuation of the order is essential.
In his speech, the Minister said words to the effect that the continuation of the order was in line with the Government’s dual-track strategy of pressure on, and engagement with, Iran. He said that the aim of the pressure track was to encourage Iran to begin serious and meaningful negotiations on the issue of its nuclear programme. I wonder if the noble Lord has had any reports of any progress that has been made on the dual-track approach over the past year.
Lord Newby
My Lords, I am extremely grateful to the noble Lord for his support of the order. I am not sure what to make of the fact that he knows how to make a nuclear bomb.
Lord Newby
On balance perhaps I should be reassured rather than alarmed. The noble Lord asked about the dual track. What is happening is that on the one hand there is active diplomacy that is being led within the EU by the noble Baroness, Lady Ashton. Since April there have been four meetings between the international group and Iran to discuss its nuclear programme. The pressure has been on Iran to take concrete steps to build international confidence around its nuclear intentions. It is hoped that we will have another meeting. I think that it is fair to say that the meetings have not produced a satisfactory conclusion, but they are ongoing.
The other element of action against Iran definitely is bearing fruit. The economic sanctions seem to have brought the Iranians back to the negotiations that I have just described. Iran’s leaders are increasingly concerned about the prospect of instability driven by economic decline, caused by a combination of sanctions and economic mismanagement. Iran’s oil exports have dropped by about 1 million barrels a day, which in real terms means that almost £8 billion in revenue is being lost every quarter. We are talking about very serious amounts of funding.
On the question of leakage and whether other countries are trading with Iran, the pressure on Iran is tightening, not just from the EU and the US but more generally. We are trying to make sure, as far as we can, that the UK financial sector is not inadvertently used to facilitate proliferation-sensitive activities. Iran will not be able to channel funds through overseas subsidiaries of its banks, as those are also subject to the restrictions. We continue to use all our ongoing close contacts with international partners to ensure that Governments of other countries are aware of our concerns and of the risk that moneys intended to facilitate proliferation-sensitive activities might be channelled through their financial sector, having been denied access to ours.
Finally, the noble Lord asked whether any firms in the UK have been found to be in breach of the restrictions. I am pleased to be able to say that no firms were felt to be in breach of the requirements under the 2011 order and that none has been found in breach of the 2012 order. It is fair to say that there is pretty considerable support across the financial services sector for the line we are taking and considerable willingness to keep very much to the letter and the spirit of the order.
Nursing Quality and Compassion: The Future of Nursing Education
(12 years ago)
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Baroness Emerton
To ask Her Majesty’s Government what is their response to the recommendations of the report of the Commission established by the Royal College of Nursing Quality and Compassion: the future of nursing education.
Baroness Emerton
My Lords, I am grateful to have this opportunity to seek the Government’s response to the commission looking at quality with compassion in the future of nursing education. First, I pay tribute to the Royal College of Nursing for commissioning this independent commission at such a critical time in the life of the nursing profession and congratulate the noble Lord, Lord Willis, as chairman, and his team of commissioners. I also thank those who gave the evidence that resulted in such a clear, comprehensive report with 30 recommendations, all pointing to urgent action being required of the profession it if it is going to be equipped to deliver high-quality care with compassion. It is so desperately needed today and will be very much needed in the future with growing demographic trends and the increase in the elderly population with increasing healthcare needs and, at the same time, rising costs of treatment. Within the last week, we have had the example of an MP describing the terrible treatment her dying husband received from nurses. At the other end of the spectrum, the NHS Commissioning Board’s chief nursing officer, Jane Cummings, introduced her vision of nursing with a culture of care, compassion, courage, commitment and competence for the future.
I declare an interest, as recorded in the register, but in particular as someone who has been closely involved in developing the profession’s move into higher education, and the introduction of Project 2000, as a chair of the regulatory body, the UKCC. The Willis report clearly sets out the time taken since the Briggs report to reach the point we are at 41 years later, on the eve of a graduate programme being fully implemented in September 2013. When introduced, Project 2000 produced many adverse comments, as the report says, due to inadequate preparation of all concerned, in the universities and the providers. By not working together, we are experiencing adverse comments as to whether it is necessary for graduate training to give compassionate care. This report demonstrates that registered nurses, educated at degree level, are more than equipped to deliver high-quality compassionate care. It says:
“The public needs to know what it can expect of registered nurses educated at degree level. Stakeholders should scale up recruitment campaigns and other measures, including dialogue with the media, to promote better understanding of contemporary nursing and nursing education and dispel the myth that better educated nurses are less caring”.
Perhaps I and colleagues have not had the courage to stand up and be counted to ensure that the 41-year gap did not exist. The document goes on to identify the urgent need to supply an academic nursing workforce and guarantee its future quality. The NHS Commissioning Board, the CCGs, Health Education England and the local education boards hold the responsibility for commissioning the right number of students to fill the right number of places to deliver the patient care pathways for well-being, public health, hospital care, and community care through the health and social care services, not forgetting the voluntary services.
The mandate to the NHS from the Secretary of State does not include Health Education England. This is funded directly by the Secretary of State but there does not appear to be a mandate, only an outcome measurement. This is but one of the 30 recommendations. My question to the Minister is: how will the Government ensure that what is necessary will be provided to enable the responsible bodies to adopt the recommendations of the report? We cannot afford a further delay in implementing these recommendations, as has been the history of Project 2000 and graduate training. We should not forget that the initial graduate registration is not the end; there must be provision for professional development and postgraduate development, with investment in research to allow evidence-based practice and innovation.
I have listened to a number of recent briefings and the evidence to date is that the medical professions—I exclude the medical professionals present—have little or no recognition of other professions’ contributions to delivery of care, research or innovations. Again, this is probably the professions’ fault for not speaking loudly enough to be heard and included or providing the evidence to support their case. It may also be a reflection of the status of the nursing profession as viewed by other members of the health teams which is now beginning to erode the public’s view. The answer surely must rest in the hands of the members of the professions.
The serious current economic situation presents many challenges. However, the evidence to date is that the delivery of high-quality care is cost effective in reducing complications, early discharge and reduced mortality—in other words, high-quality care is not only cost effective but safe and acceptable to the public. The recommendation relating to workforce planning describes the need to address skill mix. It states that there is an urgent need to revisit the workforce policy and skill mix and suggests:
“A planned programme of regulation should begin with the mandatory registration of all staff who deliver patient care”.
This, of course, includes support workers. It is a false economy not to follow this recommendation. Although the Skills for Care and Skills for Health bodies are due to report in January, it is a requirement of the Act to have a voluntary register.
The report recommends that there should be mandatory training and registration for support workers. Can the noble Earl please give an assurance that this issue will be revisited? At Third Reading of the Health and Social Care Bill it was said that the costs would be too high. Is it possible for a more recent up-to-date analysis of the cost to be carried out, as the one quoted was taken from a 2009 cost of a housekeeping scheme which does not equate to the work of the healthcare support workers? There is a growing awareness within the profession and among the public that there are insufficient registered nurses in some parts of the health service, more especially on wards for the elderly. However, there is a higher ratio of registered support workers where most in-patients have multiple conditions and require the skills of registered nurses. Action is required to produce a more accurate and sensitive workforce plan.
Time does not allow me to explore more of the report and its recommendations, but it is essential to note that, despite all the recent bad press and the criticism of the nursing profession, there is evidence of excellent care being given by dedicated, caring and compassionate nurses and support workers. It is also encouraging that the students interviewed showed great enthusiasm for the profession they had chosen, and were determined to hold high the traditions. Where this is obvious, it reflects good leadership of the profession and an organisational culture that fosters high-quality, compassionate care within the framework of the NHS constitution. I hope that Her Majesty’s Government will take on board the recommendations so ably set out in the commission’s report.
Baroness Cumberlege
My Lords, this House is impoverished; we do not do ourselves justice. We have a paucity of Peers who are nurses. We have some splendid surgeons, physicians and Fellows of the Royal Society but, of course, we have the noble Baroness, Lady Emerton. Noble Lords will know that she is not only a very remarkable person but an extremely distinguished and highly respected nurse. However, it is unfair to expect her to carry the burden of the profession on her own. Therefore, my first question to my noble friend—I suspect that I know the answer—is: will he do all he can to influence those who make the decisions on membership of this House? Yet again, we are very indebted to the noble Baroness not only for securing this debate but for her knowledge, expertise—and courage, because she has left her sickbed to come here today. She exemplifies so much that we know is superb in nursing.
If the noble Baroness, Lady Emerton, is the heroine of the hour, the noble Lord, Lord Willis, is the hero. The noble Lord has written one of the best clear, concise, informative, authoritative and action-packed reports that I have read. It is a model for others to follow. I pay tribute also to the RCN and to Peter Carter, who commissioned this report and who exercised a self-denying ordinance not to interfere. It must have been tempting. The fear that we all have is that, like other excellent reports, this will sit on a shelf and there will be insufficient political will to implement it. Therefore, my second question to my noble friend is: what can he do to ensure that the report lives?
The noble Lord, Lord Willis, pulls no punches in destroying the irrational idea that kindness and intelligence are incompatible with an all-graduate nursing profession. He states that this is not simply desirable but essential—and I so agree. The concept that a nurse must be a professional among equals, a leader of teams and, in some cases, the head of a very large organisation, is not new. However, those in positions of great authority have been appointed against enormous odds.
A good education is never wasted. It brings with it not only knowledge but the confidence to hold one’s own in vigorous debate and argument. The debate is all about maintaining and improving compassionate care. That care has to be underpinned by professionalism, which depends on values, behaviours and relationships that can be inculcated at an early stage. They can be taught but in practice, with restricted budgets, they have to be defended, cherished and fought for. A well educated, confident nurse leader is essential to maintaining staff and improving the quality of care.
District nursing has always been the unloved cousin who is forgotten, does not receive presents and does not even qualify in this context for any specialist community training. I declare an interest as a fellow of the Queen’s Nursing Institute and of the Royal College of Nursing, and I am a patron of the Association for Nurse Prescribing; all my interests are in the Register of Lords’ Interests. The Queen’s Nursing Institute is one of the few champions of district nursing. Commenting on the Willis report, the QNI made the point that there is currently no requirement for district nurses to have any specialist community training. They do not even have to have experience of working outside of hospitals, despite recognition that care provided for patients in their own homes is unique; it is different. Universities are reducing, and in some cases, have ceased altogether to run courses.
I know that the commission was tasked with looking at pre-qualification training, but our policy is to keep people at home, which is where they want to be. That depends on ensuring that there are enough nurses with the right qualification and training. My third question to my noble friend is, would he consider a further report, akin to the Willis report, to look at post-registration training.
The number of community nurses, particularly district nurses, is falling. In 2009, we saw, for the first time, the number of qualified district nurses in England fall to below 10,000, which represents a 23% reduction in the past 10 years. The most recent figures available, for the year up to September 2011, shows another fall of almost 10%. Furthermore, the community nursing workforce tends to be older, and some figures claim as much as 59% of current community nurses plan to retire in the next decade. I believe that this is a crisis in the making, and it will thwart the Government’s current plans to see fewer patients admitted to hospital. However, the Government are to be congratulated on their recent focus on the recruitment of health visitors. They have a clear plan, complete with measurable targets; they have provided a useful, recent example of a concentrated recruitment effort. My fourth question to my noble friend is, therefore: will he explore a similar commitment to district nursing?
I want to address the subject of healthcare assistants, but I appreciate that I am running out of time, and I have not got time to do that. However, I must say to the noble Baroness—and I regret having to say this—that I am not yet truly convinced that registration is the answer for healthcare assistants. Ultimately the employers must be accountable for the training, competence, supervision and performance of their own staff.
With the report of my noble friend Lord Willis, and the powerful strategy launched last week, referred to by the noble Baroness, Lady Emerton, we can see a real change for the better, a brighter future for nursing and a comprehensive return to compassionate patient care, which is, after all, what we all want.
Lord MacKenzie of Culkein
My Lords, I am grateful to the noble Baroness, Lady Emerton, for putting down this question to the Government today.
It is apposite that we should have an opportunity to discuss the matter of care and compassion in another week when issues have again been raised about the quality of care, not least by the awful story told by Ann Clwyd MP at Prime Minister’s Questions last week. There is a very similar on the comment page of the Nursing Times of 4 December, written by a senior lecturer in the Faculty of Health and Wellbeing at the University of Cumbria. It has not been a good week for the nursing profession, not least with the release of the final report on Winterbourne View yesterday.
As a nurse, and as someone who has worked for nurses and nursing for most of my working life, I feel deeply saddened by the adverse publicity that my profession is now getting. This stuff will run and run; it will take a lot of time and hard work to mend the damage that has been done.
The question before us today is about the report of the Willis commission. The noble Lord, Lord Willis of Knaresborough, deserves our thanks for undertaking this very important piece of work. I would disagree with little, if anything, in the report. In the introduction to his report the noble Lord, Lord Willis, said that,
“there has been insufficient political or professional will”,
to implement past recommendations. He expresses the hope that that will not be the fate of his report. I sincerely share that hope. As has already been asked of the Minister, I hope that he will tell us that this time we will go down the right path.
The nursing world has in many respects changed out of recognition since the days long ago when I commenced my training. However, some things have not changed. It is not new that there are brilliant nurses, good nurses, some who are less good and some who are not suited to the profession. In my student days, when most started training at the age of 18, many of these were eased out during training.
Neither is the debate new about whether nurses are the finished article on registration. I can remember nurses who thought they had arrived and done it all on the day they completed their training. I much preferred the view that one really started to learn only after one qualified and took some measure of responsibility and accountability.
The issue of fitness to practise on registration is often discussed, but it must depend on the appropriateness and quality of education and the quality of teaching on placements followed, after graduation, by good preceptorship and clinical supervision. I have a relative who is a lecturer in a school of nursing and midwifery in a university. She tells me that they are not allowed to go into hospitals and wards to see what their students are doing, although I understand that teachers in some other universities can; indeed, I know they can because one used to appear at my bedside in uniform, complete with Barts badge to supervise what her students were doing and procedures. However, I gather that some not being allowed to supervise any work is something to do with universities and vicarious liability. That underlines my view that we need a return to clinical teaching. Pressures on ward sisters and mentors are such that there is a gap here. It is not necessarily the case, as some academics argue, that clinical teaching disrupts the natural process and flow of care.
I will touch briefly on workforce planning and commissioning. The Willis report underlines the difficulty in getting good statistics and the risks of workforce planning being left to local employers. I endorse the commission’s view that there must be a well developed UK oversight. The future cannot be left to short-termism and localism.
My union, the Confederation of Health Service Employees, supported the Project 2000 proposals to move away from apprentice-type training and into the higher and further education sector. We also supported the ending of enrolled-nurse training, as it then was; I still have the scars on my back from trying to further that argument with many enrolled nurses, including my own daughter. What we did not support was that there should be no other form of regulated training for staff that would in the future carry out much hands-on care—what I still prefer to call nursing care.
I spent many months travelling the country addressing meetings on Project 2000 and the ending of enrolled-nurse training, and advocating COHSE’s policy of an entirely new second level that did not have the problem of confusion of roles between the first and second levels as there then was. We wanted a new second-level support nurse trained to an agreed standard of about a year or so. Apart from the support of a couple of regional nursing officers, we ploughed a lone furrow. There was no real support from the leadership of the profession at that time.
The quite proper drive to enhance the status of the nursing profession has left us now with a plethora of support workers of varying training, or little or none, together with a multitude of job titles, delivering a great deal of nursing care. As the commission of the noble Lord, Lord Willis, puts it, that care is delivered with greater or lesser supervision. We need to do something now about the training of support workers. In reality, with the demographic pressures and financial pressures that there are going to be, there will be fewer degree-level nurses and more support workers. That much care is not going to be delivered by nurses themselves.
It is not part of my purpose to rubbish support workers. Many, in my experience, are excellent, but they need to be trained to an agreed standard, and they need to be regulated and registered. Some progress is being made—I have no doubt that the Minister will reinforce that—but it is not enough. I know that he has heard me on this subject before, but it is wrong and unconscionable that nurses have to accept responsibility for staff whose abilities and competencies cannot be relied upon.
There are a number of issues facing us. Some of these are cultural, although I personally find it difficult when I hear of curtains not being drawn around a bed. The noble Baroness, Lady Emerton, will well remember that we were taught to do no procedure without having first pulled the curtains around the bed and telling the patient what we were going to do. Nobody ever did anything without that ringing in their ears. It is not difficult to do, and not difficult to teach.
My final plea is that the ward sister should be supernumerary and accountable, and that senior management should be accountable because it is not always the staff at the sharp end who should carry the can. We need to get the education, the training and the skill mix right, and must not leave everything to localism. There has to be some national responsibility and accountability. I hope that nurse leaders will continue, as I know that they will, to fight to restore the image of our profession. If not, there will be more inquiries, more scandals and, perhaps, a royal commission. I hope that we do not get that.
Lord Willis of Knaresborough
My Lords, I congratulate the noble Baroness, Lady Emerton, on securing this debate and I echo the comments made by the noble Baroness, Lady Cumberlege, about her efforts in the House. The fact that only four out of 788 Peers have a nursing background is a sad reflection on how important this profession is and how little it is regarded in terms of our debates and our work. I also thank the noble Baroness, Lady Cumberlege, for her very kind comments, particularly referring to district nurses—my mother was a district nurse and I remember only too well sniffing her bag.
The appalling events at Winterbourne View, which we discussed last night, and the disturbing revelations by Ann Clwyd about her husband are graphic reminders that care by nurses, or indeed other healthcare professionals, is not always what it should be. That has to be a starting point, rather than believing that everything in the garden is absolutely rosy.
This short debate does not allow us to look at the complex reasons why sometimes care breaks down but, no matter how difficult it is, I share the view of the general secretary of the RCN that poor practice has to be exposed. It has to be understood why it has happened, it has to be rectified and there should never be an excuse to patients or their carers about a lack of compassion.
I was privileged to be asked by the RCN to lead the independent review, which was about pre-registration nursing in the wake of changes to the Nursing and Midwifery Council standards and indeed to the growing media criticism that nurses were “too posh to wash” and “too clever to care”. Those descriptions were absolutely appalling to apply to any professional. Such comments were predicated on the assumption that the move to an all-graduate education programme for nurses would result in the recruitment of less caring and less compassionate students.
Today the vast majority of nurses are not graduates. If poor care is occurring today, it is not because we have graduates. In fact it will not be until 2013 in England that all entrants as registered nurses will be graduates. Making the bland assumption that by expecting higher educational attainment from nurses means you will get less care and compassion is absolute nonsense.
More than 100 organisations gave evidence to us, from every strand of opinion. We interviewed 29 witnesses, from the RCN to Health Education England; from charities to the NMC; from the Council of Deans to patient groups. I went over to Belfast and to Dundee, Cardiff, Oxford and Huddersfield to interview patients and to look at what was happening. Not one produced a shred of evidence to support the idea that raising academic standards would lower care and compassion, so we need to knock that on the head. We want the brightest and best of our young people, and indeed our mature entrants, to come into the profession. We want them to include care and compassion as part of those qualities.
Central to our report was the belief that patients must be at the centre of the education of tomorrow’s nurses. Universities must also do far more to ensure that patients and their representatives are central to recruitment and to programmes. If nursing is not about patients, quite frankly it is not about anything. We too often get tied into structures and to organisation rather than the root causes of what we are trying to do. I make a plea, too, for research to be placed right at the heart of training. I met students who saw the research component as an addition. You tick that box to become a graduate. I argued that that was not what graduateness is about. Graduateness is about developing critical thinking. It is about leadership. It is about challenge and if you are not building research right into the heart of it for nurses to ask: “Why am I doing this? Is there a better way of doing it? Can I be involved in a project to look at doing things better?”, then I think we are missing a trick.
I will finish, because of time, with the issue of healthcare support workers. The vast majority of patients I met did not understand the difference between a nurse and a healthcare support worker. Having a chart at the front of the hospital, showing people wearing fancy uniforms of different colours, really does not tick the box; when you are brought into an emergency ward, the last thing you want to do is say, “Stop, can I just have a look at the chart to see who everybody is?”. It is an absolute nonsense. I share the view of the noble Lord, Lord MacKenzie, that the vast majority of these people are hard-working, diligent and want to do a very good job. However, there is not a single care home in the United Kingdom that does not rely virtually entirely on this brilliant and dedicated workforce, which often performs tasks, including dispensing medicines, without any training or background and without there being any way of registering or regulating its members.
How can it be—I say this to the noble Earl, who I know is the most caring of Ministers—that the most vulnerable patients in the United Kingdom, often in their own homes and at the latter stages of life, are cared for by an underqualified and unregulated workforce? How can we allow that? We recognised, as a commission, how difficult it will be to move to a regulated and fully trained workforce. It cannot be done overnight, and to pretend that it can is fanciful. However, we should be making a start, which is what the commission recommended.
The idea of a voluntary register is perfectly okay for good providers—but they do not need a voluntary register, because they do it already. A voluntary register would not have made the slightest difference to Winterbourne View. I make a plea to the Minister that I would like to see all 29 of our recommendations referred to by the Minister in a proper report back. Ultimately, I am enormously grateful for having this opportunity to place the report before this Committee.
Lord Kakkar
My Lords, I join in thanking the noble Baroness, Lady Emerton, for securing this important debate and in congratulating the noble Lord, Lord Willis of Knaresborough, on his excellent report. I declare my own interests as professor of surgery at University College, a practising surgeon at University College London Hospitals NHS Foundation Trust and a member-elect of the General Medical Council.
The report that we are considering today is both reassuring and worrying. It is reassuring because it speaks with great optimism about the talented, dedicated and committed people who are still attracted to the vitally important profession of nursing. However, it is worrying because in describing the background that resulted in the necessity for this report, it highlights a worrying deterioration of organisational culture and values that have allowed patients to be characterised as statistics and consumers rather than as vulnerable and anxious human beings coming into our healthcare system and look at healthcare in terms of episodes of delivery of care rather than the delivery of healthcare in terms of compassion and dignity.
This report, rightly, identifies that providing an undergraduate basis for initial training in nursing is not attended by any inability either to develop the clinical skills and standards necessary for this important profession or to ensure that nurses qualify with the appropriate level of commitment and compassion that is vital to delivery of this important profession. The evidence available in the published literature from the United States and Canada shows that for every 10% increase in the number of nurses on the workforce who have reached a bachelor’s degree standard there is a 5% reduction in overall institutional patient mortality. If you look, for instance, at outcomes in surgical practice, the larger the proportion of highly educated nurses, the lower the perioperative mortality. In Canada, there is evidence looking not at surgical patients but acutely ill medical patients: those with heart attacks, strokes and acute respiratory problems. A similar pattern is demonstrated—the greater the level of nurse education, the greater the overall improvement in outcomes, with lower mortality. If one looks specifically, again in Canada, at discharges from acute medical wards, one sees that for every 10% increase in the number of nurses on staff having achieved a baccalaureate or higher level of education, so there is an improvement in survival, with nine fewer deaths per 1,000 patients discharged.
There are four issues in this important report on which I would like to seek further guidance from the Minister. First, preceptorships are very much like the original one year of house jobs prior to full registration with the General Medical Council for doctors, now reflected in the foundation year 1. It has been suggested that these preceptorships should potentially be extended from the original recommendation of four months. However, as is the case with newly qualified doctors, should it be necessary for the dean of the nursing school to have to sign off the graduated candidate at the end of this period of preceptorship before they can achieve full registration with the Nursing and Midwifery Council? This would ensure that those being delivered from the undergraduate programme could demonstrate that they have all the skills necessary to continue to full registration, having had to perform in a potentially stressful clinical environment for a period of time after immediate qualification.
The second area is one of graduate training to ensure that the most able and talented leaders in nursing can rapidly move through their period of post-qualification training and development to take up leadership roles such as those at ward sister level, while still being in a position to deliver front-line clinical care throughout that process.
At University College London Partners, where I chair the quality outputs, we have developed a programme called Excel which does exactly that. It takes the most talented nurses across the organisations within the partnership through a programme of development that will shorten the time from an average of seven years to just four years, in which they can take on senior nursing positions within our organisations, while continuing to maintain a strong clinical focus. Will Her Majesty’s Government support similar programmes across other academic health science networks when they are established, to ensure that we fast-track nurse leaders, helping them to continue their professional development, while maintaining a focus on the compassion and kindness which is ultimately the fundamental basis for all healthcare delivery?
In this debate we have already considered mandatory registration for healthcare support workers. This is a vitally important requirement. As we start to look at teams delivering care, with teams of different skill mixes, it is vital that all members of that team have to perform to a similar level and are able to command the same confidence from members of the public coming into hospital. It does not seem right that only some members of the team are subjected to statutory registration and not others. Have Her Majesty’s Government changed their mind on this? Are they now in a better position to recommend and provide a statutory basis for such registration?
Finally, on revalidation for nurses, as we move to a graduated profession it will be vitally important that, as we see with revalidation for doctors, nurses are also subjected to revalidation to ensure that the skills that they have developed early in their career are maintained throughout it. At the moment, registration requirements are reflected in 450 hours of practice in a specialist area over three years, and 35 hours of continuing professional development on an annual basis. But revalidation means much more than this. Will Her Majesty’s Government provide a statutory underpinning for revalidation of the nursing profession?
Lord Patel
My Lords, I realise that my time has been cut down; I was running the risk that I would be completely eliminated in a minute. However, I will try to cope with the three minutes that I now have.
First, I thank the noble Baroness for initiating this debate. I am sorry to hear that she is feeling unwell, but if she will kindly tell me what might be the best treatment, I will write a prescription. This is why I have always been used to taking advice from nurses first.
It is interesting that in this debate we have two nurses, two doctors, three former Health Ministers and a former teacher, who wrote the report on nursing education; and no doubt the current Minister will be the one to reply to it.
I had intended to concentrate on three issues: workforce planning, which the Willis report mentions; the education of nurses; and the registration of support workers. I will come to the last first.
I support what the noble Baroness, Lady Emerton, and the noble Lords, Lord Willis, and Lord MacKenzie, had to say. We have had this opportunity to discuss the large number of nursing support workers who are currently unemployed, and their training and registration. We will keep coming back to this until it is resolved. It is unacceptable that the Government still seem to think that employers should be responsible for whether these workers should be registered or not, and whether or not they should have training.
It is quite clear that the training of health workers who provide front-line healthcare should be mandatory. There should be a curriculum and an assessment, and they should then be registered. I understand that it is not possible to have a compulsory register straight away. However, we need to have a road map that will enable us to leave voluntary registration and move to proper registration.
I have no doubt that the Minister will not agree, but I am sure that we will keep coming back to this, and I look forward to a day when one of the political parties, when in government, will introduce registration. I hope that that will be the current Government.
I refer to two reports, both from the Royal College of Nursing. One, the Willis report, was commissioned by it, and the other was the Royal College of Nursing report, Overstretched. Under-resourced. The UK Nursing Labour Market Review 2012, which was published in October. Both of them highlighted the issue of what will happen to the workforce planning of nurses.
Experience in the 1990s showed that cutting student numbers led to a year on year reduction of new entrants, from 18,980 in 1990-91, to 12,000 in 1997-98. This contributed to an acknowledged nursing shortage later in the decade. The report highlights that there is a risk of repeating this funding and planning, for in 2011-12 there were approximately 22,640 places across the UK for nurse training, compared to 24,800 in 2010-11. Next year, there will be another 1,260 fewer places, with a total of around 23,000.
Workforce planning will be left at the local level, first of all with the local education and training boards, which will work with the commissioners to define how many training places there should be. Health Education England will then be charged with funding the numbers, and the national Commissioning Board will be responsible for providing oversight. The whole thing, therefore, will be left, with all due respect, to the managers, without any reference to the professionals who provide direct patient care.
In the report of the noble Lord, Lord Willis, the managers, NHS employers, felt that they,
“have confidence that through a co-operative and collaborative approach between service and education providers, the future workforce will not only continue to deliver quality care but will also be equipped to develop and deliver new and dynamic services for patients”.
I come back to my first point about support workers. The result of this will be more support workers, because costs will be cut, and there will be fewer graduate nurses. I declare an interest as the chancellor of the University of Dundee, where I have graduated several hundred nurses, the last occasion being on 14 November. I was also pleased to award several PhDs, so nursing is developing as an academic profession as well. I am therefore totally signed up to nurse graduates. I therefore plead with the Minister to look again at the training and registration of support workers.
Lord Hunt of Kings Heath
My Lords, I, too, must declare a number of health interests that are on the register—principally as chair of the Heart of England NHS Foundation Trust. I also thank the noble Baroness, Lady Emerton, for initiating this debate. In fact, only two weeks ago she presented badges to some of our nurses who had passed the trust’s intensive internal examinations. I am particularly indebted to her for doing so. I am also glad that my noble friend Lord MacKenzie, the other nurse speaking in this debate, spoke so eloquently and provided a background to some of the issues that laid the foundation for some of the concerns about the quality of nurse education.
In discussing the concerns, I hope that we acknowledge the tremendous strides the profession has made in the past 20 years. Nurses have taken on a lot of specialist skills and are looking after a much higher proportion of frail elderly patients with comorbidities. They have taken on other responsibilities as well. The noble Baroness, Lady Cumberlege, was very much responsible for that. I think of the work that she has done as regards childbirth and nurse prescribing. However, as the noble Lord, Lord Kakkar, suggested, we have this irony that at the same time as we have seen the huge potential of nurses there is concern about neglect of basic standards of care. We have all heard Ann Clwyd MP’s moving and distressing description of her husband’s last days and what he described as the indifference of some nurses.
The noble Baroness, Lady Emerton, referred to Project 2000, at which many point the finger of blame. However, I am glad that in his excellent report the noble Lord, Lord Willis, endorsed the ambition of a graduate nursing profession. I am sure that that is important, but I hope that the Minister will reflect on problems regarding the education of nurses within our universities. Clearly something is wrong. I believe that the monitoring of the curriculum has been left in the main to HR people in the health service and to the universities themselves, and that that has often led to major problems. HR people do not know about standards of nursing care—they are not in a good position to make decisions about these commissions—and universities are concerned with academic issues. They are not concerned with practical nursing standards on the ward. I believe that the answer—I am biased—is to allow the NHS to have much more involvement in the training and selection of nurses in the future. I am not suggesting that we go back to the old hospital nurse training schools, but NHS trusts need to be much more involved in future. My own trust is in discussions with the university hospital in Birmingham and the University of Birmingham about a tripartite approach to nurse training. That must be the way forward. I hope that the new regional structures will not get in the way of that.
My understanding is that the Nursing and Midwifery Council intends to deal with revalidation in about 2015, after clearing up the problems that it has. I very much welcome its approach. I also welcome the current leadership of the NMC, who show every sign of getting to grips with the many problems that they have inherited. I hope that the noble Earl agrees with the comments made on research. It is so important that we give more emphasis to nursing research.
My noble friend Lord MacKenzie spoke about the importance of supernumerary status. I agree, but I say to him that there is an issue of resources—I need to come back to that—and of being able to afford it. The noble Lord, Lord Patel, spoke about workforce planning. I urge the Government not to not leave it to local people to decide the number of commissions. We know that that will be a failure. I remember appearing before the Health Select Committee about five years ago to explain why education commissions had been reduced. I endured two not very happy hours doing so. I assure the noble Earl that his ministerial team will have the same problem. I gather that doctor commissions are also being reduced. This will prove to be a major mistake which the NHS will pay for one way or another in about five to 10 years’ time.
I will not repeat what other noble Lords have said about healthcare assistant regulation. The Government have been wholly unconvincing on this as, frankly, has the central health regulatory authority. We have to have the regulation of healthcare assistants; patient safety demands it. There is a clear consensus, and the only people opposed to it are the central regulator, which for some bizarre reason seems to cling on to this idea that you can do it through voluntary accreditation, and the Government. The intellectual argument against regulation seems very weak indeed.
Finally, before we put all responsibility for lapses in care in the hands of nurse education and the lack of regulation of support workers and of nurses themselves, we cannot ignore the huge nursing challenge posed by the increasing number of frail elderly people in our hospitals who are suffering from multiple chronic conditions. It is also grossly unfair not to recognise the financial pressure on the NHS at the moment. Nurse to patient ratios are being squeezed, and the reduction of the number of nurses in employment is an indicator of that. The Government must own up to the fact that they themselves are creating some of the pressures that are making it harder for nurses to do the job they want to do. I believe that we will come back constantly to these issues until we are able to resolve nurse education training, sort out the regulation of healthcare assistants and create the conditions in which nursing care can thrive.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, the noble Baroness, Lady Emerton, has been a tireless champion of the values and standards that underpin good nursing. This debate, on which I congratulate her, is therefore no surprise. Listening to her excellent speech reminds us once again of her long-standing expertise and wisdom in the field of nurse education and the regulation of the nursing profession.
My noble friend Lord Willis published his very comprehensive and helpful report into the future of nurse education in November. The report was the result of deliberations by his independent commission, which was established by the Royal College of Nursing under his consummate chairmanship. On publication, the report was handed to the chair of the RCN for her consideration. It was not a report to the Government and we will therefore not be formally responding to it. However, I recognise that its 29 wide-ranging recommendations are important and, as this debate has shown, need to be given due weight and consideration by leaders of the nursing profession.
As part of government changes, a new Secretary of State for Health was appointed this year. He has clearly stated that he has four priorities for his term in office: to improve the general quality of care, including nursing care; to rise to the challenge of caring for people with dementia; to improve the management of long-term conditions; and to reduce avoidable deaths from the major diseases. These priorities, importantly, impact on nursing care and nurse education and come as national nursing leaders have also changed significantly during the year. As part of the Health and Social Care Act, which passed through your Lordships’ House earlier this year, the NHS Commissioning Board was established, alongside the separate creation of Health Education England, both of which have prominent nurse leaders.
The noble Baroness, Lady Emerton, asked for some assurance that these bodies will take full account of the Willis report. Jane Cummings has been appointed chief nursing officer for England on the NHS Commissioning Board and Lisa Bayliss-Pratt is director of nursing for Health Education England. Both have significant leadership roles in the education and training of nurses, and I can tell the noble Baroness that they are looking at the Willis report in detail. Health Education England takes over the Secretary of State’s duties for ensuring an education and training system fit for purpose, and the chief nursing officer for England and the director of nursing for Health Education England will collaborate very closely in that regard.
My noble friend Lady Cumberlege asked what would make the report really live. It has a high degree of resonance across the profession already, with nurse leaders in the vanguard who will help ensure that it does not gather dust. Earlier this month, Compassion in Practice, a vision and strategy for nurses, midwives and care staff in the NHS, public health and social care, was published jointly by the chief nursing officer and the director of nursing in the Department of Health and lead nurse for Public Health England, Viv Bennett. Compassion in Practice articulates the values and behaviours expected of nurses, midwives and care staff. These values and behaviours are expressed as the “six Cs” of care, compassion, competence, communication, courage and commitment, each of which resonates with findings and recommendations of the Willis report.
This is not a vision without action. One area for specific action will be to ensure that the NHS, public health and social care services have the right staff with the right skills in the right place. This means that staff will be recruited for their values and behaviours as well as their capability to be lifelong learners. This point was made by a number of noble Lords. Importantly, the Willis report recognises how demanding and rewarding the practice of nursing is. It states very clearly that it found no evidence that revealed any major shortcomings in nursing education that could be held directly responsible for poor practice or the perceived decline in standards of care.
My noble friend and his commission are unequivocally supportive of degree-level registration for new nurses. This commitment by the Nursing and Midwifery Council will be fully implemented by September 2013. I am aware that the noble Baroness, Lady Emerton, too, is fully supportive of that. When it comes to achieving this change to nurse education, my noble friend Lord Willis rightly emphasised that educating nurses is a partnership between the NHS and universities. The noble Lord, Lord Hunt, was right to emphasise that. Student nurses cannot qualify and register if they have not satisfied both the university and, in practice settings, their NHS mentors, who formally assess them for their practical skills and knowledge as well as for their values, behaviours and ability to give care with compassion.
The compulsory state regulation of currently unregulated health and social care support workers in England is a topic that has arisen throughout the debate. It is a live issue in the nursing profession. We recognise the need to drive up standards among health and social care support workers, and have commissioned Skills for Health and Skills for Care to develop a code of conduct and national minimum training standards by January 2013. In addition, the Professional Standards Authority will have powers to accredit voluntary registers from this month. The Skills for Health and Skills for Care work will, for the first time, set clear national expectations about standards for these workers.
Health and social care assistants already work in environments that are subject to regulation by the Care Quality Commission. The Independent Safeguarding Authority can take action to bar them from working in regulated activity. Further, the work they do should be delegated to them and managed by staff—usually nurses—who are themselves subject to professional regulation and should not be asked to undertake a task for which they are not trained. The care given by health and social care support workers is at the heart of NHS-funded services. We plan to keep this under review in the light of the findings and recommendations in particular of the Francis inquiry, which is due to be published in the new year, to ensure that the system and process remain fit for purpose. I will repeat what I said yesterday at the Dispatch Box. The Government’s mind is open but we need to ensure that there is a good, evidence-based case before proceeding with mandatory regulation.
The noble Baroness, Lady Emerton, asked whether there had been a more recent cost analysis than the 2009 data of registering healthcare support workers. The answer is, not to my knowledge. Clearly, the cost of regulating 1.8 million health and social care support workers would be significant, but the basis of our decision not to regulate was not cost. Those who advocate regulation of support workers sometimes speak as if regulation were a panacea. I do not believe it is in any way a substitute for performance management. The duties of a support worker are always delegated from a responsible registrant, usually a nurse, as I have mentioned, and that fact could not, and should not, change.
If the concern is that we are somehow exposing patients to unacceptable risk by not regulating, then again, I do not think the assumption underlying that suggestion—that regulation would be the answer—is valid. It implies that support workers are inherently dangerous, which I do not accept at all. If a support worker were to be seen as a danger then, as I have mentioned, the Independent Safeguarding Authority has a vetting and barring scheme which can prevent unsuitable support workers being employed.
My noble friend Lord Willis asked about research as part of a nursing degree. I absolutely agree with what he said in that regard. It is already, in fact. Nurses, as undergraduate nurses, will be able to critically appraise research. Some will wish to become researchers and there are nationally funded clinical academic training schemes to support this.
A number of noble Lords, including the noble Lords, Lord Hunt and Lord MacKenzie, spoke about nurse education. Planning the number of nurses and the size and shape of the workforce has to be based on the needs of the people in our care. Services must be properly designed around the care and treatment that people need and these decisions could result in the need for nursing numbers to change, and very often they do.
At present, SHAs work with local employers to determine nurse training commissions. From April next year, Health Education England assumes national leadership for a new system of planning and developing the entire healthcare and public health workforce. HEE will ensure that the shape and skills of the future health and public health workforce evolve to sustain high-quality health outcomes in the face of demographic and technological change.
From 2013 all nurse education programmes will need to meet the new education standards set by the NMC and we support the NMC’s decision, as I have mentioned. It is the right direction of travel if we are to make all nursing degree level and if we are to fulfil our ambition to provide high-quality care for all.
Time is against me, so I will endeavour to cover just a few more questions but I will write to noble Lords with answers to other points.
The noble Lord, Lord Kakkar, asked me about preceptorship and I listened to his remarks with interest. Preceptorship is a development framework for newly qualified practitioners which, as he outlined, aims to ensure the smooth transition from student to qualified, accountable practitioner through a programme of bespoke support. It is predominantly administered through employment. We plan to develop the preceptorship framework further during 2012-13 within a clinical leadership framework. Work has commenced on that project and should be delivered by next April.
The noble Lord asked about deans of nursing schools signing off candidates after a period of preceptorship. That is an interesting idea which I do not believe has been fully discussed across the profession. I will ask officials to test the proposal with the Nursing and Midwifery Council and the Council of Deans of Health.
Will we support schemes for the fast-tracking of nurse leaders? That idea is most definitely supported and we have committed to £40 million in 2013-15 for leadership development that will assist aspiring and talented nurse leaders. Unfortunately, time prevents me from expanding on that, which I would like to have done.
The noble Lord, Lord Hunt, asked about monitoring standards of care by students. It is right that nurse education is a partnership between the NHS and universities, as I have mentioned, and it is true that the NHS must be more involved with the selection of students. Health Education England will work on that.
I think my time is now up. I thank noble Lords for a very rich and rewarding debate which, as I have mentioned, I will follow up in writing to all noble Lords who have spoken.
Empowerment and Responsibility: Financial Powers to Strengthen Wales
(12 years ago)
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Lord Wigley
To ask Her Majesty’s Government what is their response to the first report of the Commission on Devolution in Wales, Empowerment and Responsibility: Financial Powers to Strengthen Wales.
Lord Wigley
My Lords, this is the first occasion I have had to sponsor a short debate. I am glad to have the opportunity to focus on the recommendations of the Silk commission’s first report, published last month, and, through my Question on the Order Paper, to invite the Government to spell out how they intend to take forward the commission’s recommendations.
The Silk commission was established by the UK Government in October 2011, with a double remit. The first is:
“To review the case for the devolution of fiscal powers to the National Assembly for Wales and to recommend a package of powers that would improve the financial accountability of the Assembly, which are consistent with the United Kingdom’s fiscal objectives and are likely to have a wide degree of support”.
Secondly, the commission is now considering the National Assembly’s non-financial powers. However, Silk was specifically asked to report on part 1 by autumn 2012 and the Government, as far as I know, have indicated no intention to await the completion of part 2 before implementing part 1 recommendations.
It may be worth reminding ourselves that the National Assembly has no tax-varying powers. Llanwnda Community Council, where I live, has greater taxation powers than our National Assembly. It was surely short-sighted to create such a body without adequate financial powers. It makes it far too easy for a Welsh Government, of any party, to blame Westminster when they do not have the resources they feel they need to fund portfolios such as health, education and roads. The Assembly should, as a matter of principle, have taxation powers so that it can be truly answerable to the people for the way in which it spends their money.
This is a totally different question to whether the Assembly is currently receiving adequate finance to maintain services to a standard comparable to those obtaining in England. Successive reports suggest that there is a shortfall of some £400 million per annum, and all parties in the Assembly believe that the Barnett formula should be replaced by a needs-based formula. The previous Secretary of State, Mrs Cheryl Gillan MP, stated categorically that,
“we all recognise that the Barnett formula is coming to the end of its life”.—[Official Report, Commons, 11/5/2011; col. 1146].
It is suffering a slow and painful death and it is high time it was put out of its misery.
The second reason for new powers is that if the Welsh Government want to change strategic priorities and spend more, say, on our schools or hospitals, or want to introduce more enterprise zones or extend the business rate relief, they should have the capacity to do so provided that they accept responsibility for raising additional resources to undertake those tasks.
Thirdly, the most significant issue facing Wales is that of economic regeneration. Wales has the lowest GVA per head of any nation or region in the UK, standing at 74% of the UK average. We must await updated figures which will be published tomorrow, but the UK Commission for Employment and Skills forecasts that Welsh economic growth will continue to lag 0.5% behind the UK as a whole. This would mean that, by 2020, the Welsh GVA per capita will be less than 70% of the UK average.
Currently, places like Kensington and Chelsea enjoy a GVA per head 10 times higher than that of Anglesey, Merthyr Tydfil or Blaenau Gwent. This is frankly intolerable. The Assembly has devolved responsibility for economic development, yet it has virtually none of the necessary tools to do the job. In particular, it has no borrowing powers which would enable it to launch capital investment programmes to stimulate economic growth. If it uses its powers under the Welsh Development Agency Act, it loses a pound of its DEL limits for every pound it borrows. Similarly, the Welsh Government have no power to issue bonds, something which would be available to regional Governments in many overseas countries.
Devolving material taxation and borrowing powers to the National Assembly would change the mindset of political parties in Wales. They would have to consider the impact of proposed policies on the tax base. Political parties would offer the voters of Wales different approaches to taxation at election time, giving voters a wider choice of policies. As things stand, the Welsh Government are a spending agency. They need to be a more rounded and responsible form of government. All these issues were carefully considered by Silk. Unlike the Calman commission in Scotland, the Silk commission consisted of representatives of all four parties and produced a unanimous report that has been widely welcomed. This was a remarkable feat and I congratulate the commission on it. It reflects a single-mindedness of purpose on these issues across party lines in the National Assembly.
What are the recommendations that should now be implemented? They include the devolution to the Assembly of business rates in totality, stamp duty land tax, landfill tax, the aggregates levy, long-haul air passenger duty, powers to provide enhanced capital allowances at an increased number of sites and enterprise zones, the right—already conceded to Scotland—to raise new taxes with Treasury agreement, the right to borrow above DEL limits to fund capital projects with Treasury agreement, and the power to issue bonds. The Silk report also recommends that income tax raised in Wales should be shared between the Welsh and UK Governments. The Welsh Government should be able to change the basic, standard and additional rates of income tax independently, with the Assembly bearing the consequences of such changes. The income tax proposals would not be implemented until the fair funding dispute had been resolved.
Such unanimous recommendations from a body set up by the UK Government demand a positive response. In the debate of 27 November in the National Assembly on the Silk report, First Minister Carwyn Jones said that he was happy to accept the report as the basis for future funding reform and that he expected the UK Government to publish a White Paper in the new year. Plaid Cymru leader Leanne Wood stated that the recommendations,
“should be accepted in full and pushed forward”.
Conservative spokesman Paul Davies AM formally placed on record his party’s support for the Silk report and its recommendation, and Liberal Democrat leader Kirsty Williams called for early legislation at Westminster to implement the report. On the same day, I was heartened to hear the Minister say in our Chamber that the Government intended to respond to the report with all due speed and in a timely manner. Might a start be made today?
On the issue of income tax, I do not see why all income tax on earned income should not be transferred to the Assembly, so that taxpayers will be clear where responsibility lies for their income tax bills. Some colleagues seem to fear Wales taking responsibility for income tax because of our lower average-income levels. However, provided that—as recommended by Silk—there is agreement on fair funding, that a needs-based equalisation mechanism is introduced before responsibility is transferred, and that there is an agreement on the method by which the block grant is reduced to reflect the changes in taxation arrangements, there is no reason to fear the taking over of income tax by the Assembly.
I also believe that corporation tax should be devolved to the National Assembly. It is one of the tools with which we can tackle our economic problems. The Silk report was ambivalent about corporation tax. On page 84 it states that,
“it is clear that corporation tax is a potentially useful policy tool”.
However, it continues:
“We do not recommend devolving corporation tax to Wales”.
But then it adds:
“However, if the UK Government were to agree to devolve corporation tax to both Scotland and Northern Ireland, we would recommend the same powers be given to Wales”.
Will the Minister ensure that, if corporation tax is devolved to Scotland and Northern Ireland, the Wales Office will fight to secure the same powers for Wales?
What has been recommended by the commission is no more than common practice across the member states of the OECD. Silk’s first report pointed out that, on average, sub-state Governments in OECD countries are responsible for raising a material proportion of their budgets. Silk recommends a figure of about 25% of total devolved spending, which is in line with international practice.
The commission recommends that changes that do not need legislation should be implemented without delay, and that a new Wales Bill should be introduced in this Parliament to devolve tax and borrowing powers. The commission specifically states that this should not wait until the completion of part 2 of Silk. In the foreword to the report, Paul Silk pointedly states that he is proud to recommend the package of his recommendations to the Government “for early implementation”. From this it is clear that the commission expects the Government not to cherry pick the report but to implement it quickly in its totality as a balanced package of measures.
In conclusion, will the Minister confirm, first, that the Government accept the Silk recommendation that, in order to empower the National Assembly and to improve its answerability, it is necessary to give it the right to finance a material proportion of its budget, and that the most effective way of doing this will be by sharing responsibility for income tax between the UK and Welsh Governments? Secondly, will he confirm that if a referendum is to be held on the income tax issue, it can take place meaningfully only after the fair funding issue has been resolved? When do the Government intend to announce their proposals for fair funding for Wales? Thirdly, will the Government commit to implement the Silk recommendations during this Parliament?
I hope that the Government can now make a clear statement of their intentions, and I look forward to the Minister’s response.
Lord Morgan
My Lords, the Silk commission indirectly draws attention to a fundamental weakness of the devolution settlement, with Wales consistently subordinated for what are said to be historical reasons but which are in fact quite unhistorical reasons. It is an asymmetric settlement that has in some respects undermined the Welsh Assembly. As we know, it had no primary or legislative powers until 2006. As the noble Lord, Lord Wigley, said, the Barnett formula is persistently unfair. You can see it as a stop-gap created a long time ago, based on archaic and now quite unfair calculations, and it has been shredded, first by the Holtham commission in Wales, and more recently by an extremely powerful Lords Select Committee, which included at least one former Chancellor of the Exchequer.
Above all, the Silk commission points out the inadequacy of representation without taxation. The democratically elected Welsh Government do not have the resources either to promote their objectives or to achieve accountability with the Welsh elector when they spend money that they do not raise. The Silk commission addresses this, and I hope that the Government will respond. So far we have heard the sound of silence, particularly from Conservatives. I notice that no Conservatives are speaking in this debate, so I hope that the Liberal Democrat Minister will be more communicative.
The Silk commission underlines the weaknesses of the present situation in key respects. First, it shows that, almost uniquely in Europe, Wales has a democratically elected Assembly that does not have taxing or borrowing powers. It is fundamentally undermined by being denied that basic authority, which has been fundamental to many of the great upheavals in the history of the world; not only, as everyone knows, to the American Revolution but to the Civil War in this country and the coming of the French Revolution. We have representation without taxation, which is no basis for a democracy.
Secondly, the Silk commission shows that the baseline of the block grant is determined in an arbitrary fashion, and that this has led in practice to its being reduced in size year by year.
Thirdly, as we have heard, the discredited Barnett formula complicates matters, and we await a settlement on that. We have had discussions about the Barnett formula for many years. The coalition has replied with speeches of total irrelevance, claiming that it is a problem of the debt, which is not germane to the issue. The Labour Party replied with unmitigated waffle. We heard waffle in debate after debate, which did not advance the argument.
Finally, the Silk commission shows that the borrowing powers that the Welsh Assembly has are, in effect, not under its control but under the control of the United Kingdom Treasury, which sets those powers against the block grant in such a way that Welsh resources do not increase overall. Again, therefore, authority in financial matters does not lie with the Welsh Assembly. The formula encapsulated in the famous phrase, “For Wales, see England”, is still being played out.
The Silk commission makes two major proposals, as the noble Lord, Lord Wigley, explained. First, it proposes that the Welsh Assembly should have the power to raise its own taxes. It lists, as we heard, a variety of taxes such as stamp duty, landfill and air passenger duties, but the most important is income tax. The devolution or transfer of income tax to the Welsh Assembly would be central, and would enable the Welsh Government to do things that they cannot do now and to have a clearer horizon in terms of economic planning. Furthermore, the prospect is raised—although not, as the noble Lord, Lord Wigley, said, with total clarity—of the ability to vary the rate of tax at the top, standard and bottom ends of the tax scale. The Silk commission is cautious about this, but it is a principle that is bound to grow and extend. Rightly, the Silk commission states that there has to be engagement on these matters between the Welsh and United Kingdom Governments, but it seems clear that this is the way we are moving in terms of devolution being implemented in a much more complete way.
It is interesting that the Silk commission for Wales is more radical in some respects than the Calman commission for Scotland, in that it raises the issue of varying taxes. Secondly, it raises the issue of the power to borrow for capital purposes. There would be a stronger case for borrowing if the Welsh Government could vary the size of its budget through taxation to meet the repayment of loans. It is, as the Welsh First Minister said, a very strange system under which Welsh local authorities can borrow on the open market, say from the European Investment Bank, but the Welsh Government cannot. This greater power to borrow would give the Welsh Government the flexibility to meet variations in income and would make them more accountable.
Silk points the way to a more pluralist United Kingdom. It affects the whole of the United Kingdom—which may need a codified constitution—but its proposals cannot be put into effect until Barnett is dealt with. At the moment, the Welsh Assembly is locked into an unjust system that gets more unfair every year. Therefore, the Silk commission proposals cannot be implemented immediately. I hope that the Minister will tell us that the Government will find the will to deal with both the matter of raising more resources for Wales and securing a more honest and honourable system for their distribution, which is lacking today. Above all, I hope that the Government will communicate and tell us what they are going to do.
Lord Roberts of Llandudno
My Lords, I appreciate very much the opportunity to speak again on these matters; as we have heard, this is one of a series of debates we are holding. The Silk commission is the natural progression of what has been happening in Wales over the past century. It is a natural development, not an explosion, in Wales; perhaps it is because we are a more reasonable people that we act in such a way. You could go back to the century before last—although perhaps I should not in a time-limited debate. However, you can go back to ET John, a century ago, with his first Bill for a Welsh parliament, and then on to all the developments that we have had in education, such as the University of Wales, and with health boards and the setting up of the county councils. There have been myriad developments over the past century and the previous one as well. The former Secretary of State for Wales, Jim Griffiths—whom we admire whichever party we are from—did a tremendous amount. Others have had a hand in developments such as the setting up of the Council for Wales and Monmouthshire, with Huw T Edwards as its chairman, and the setting up of the first Welsh Office, in its embryonic sense; before Jim Griffiths of course, the Home Secretary shared the responsibility of being in charge of Wales.
However, these are different days. We have our own, very vibrant, television channel, which has done so much to safeguard the Welsh language, and the Welsh school movement. It is gradual but certain development, and last year of course we had the referendum that gave us more authority in 20 defined areas. We are on our way. We are not going as fast as some would like us to go but I think we are going as fast as it is possibly wise to go. Some might not agree with me, but we are on our way to having more responsibility and authority over our own affairs.
There is a great deal of unfinished business. I brought up three things with financial implications in a debate a wee while ago, which we have to look at again. What is the future of the television services in Wales? When will the DCMS and the BBC lose their grip and the Welsh Assembly Government take responsibility and have financial responsibility? We have problems there, and there are strong financial implications.
Then we have Welsh Water. I and others remember the great outburst when the Welsh valley, Tryweryn, was drowned and Liverpool took our water without any payment or anything. How are we now going to have authority over the water supplies, the rivers and the reservoirs, of Wales? There are great financial implications there.
I have worried about cross-border issues many times in the Chamber. The Welsh border with England is about 160 miles long. The Scottish border with England is only 96 miles. The problems of border responsibility are much greater for Wales than they are between Scotland and England.
The health service is another issue. It is much easier for us in north Wales to go to Liverpool or Manchester than to go to Cardiff or Swansea. Whatever happens, we have to keep these links with the north-west of England in a healthy state.
Then there is transport in Wales. The Welsh border is woven with railways and roads from the north to the south. You could never dig Offa’s Dyke again because the transport system would go berserk. The border issues mean that, whatever decision we take, in Wales we must always keep that link, in a healthy and positive way, with those on the other side of it.
We need the wisdom of Solomon or the magic of Merlin to be able to resolve some of the border issues, but they all affect Welsh revenue. How much revenue we are going to have, how we are going to dispense it and what taxation systems we bring in under the auspices of the Welsh Government are all involved.
I make one plea. I do not see independence for Wales as our final destination. I see a more federal establishment where, as now, the devolved issues in Wales—education, health and so on—remain entirely under the authority of the Welsh Assembly Government. Things such as defence would remain the responsibility of the Parliament of the United Kingdom: the four nations represented here at Westminster.
Where are we going with our devolution? I worry about the result of the Scottish referendum in a year or so. If Scotland, with 59 Members of Parliament, withdrew from the UK Parliament, you would have here what amounted—to some people’s delight, but not to mine—to a permanent Conservative majority. If that happened, the people of Wales would be very, very unhappy. At the moment, we have only seven Conservative Members for Wales—more than the Liberals, we admit—with a majority of Labour Members. The people of Wales would find life pretty intolerable under a permanent Conservative Government. I plead with the people of Scotland to vote no in their referendum for Wales’s sake.
We will have to tackle these issues, and not always by ourselves. Some things we in Wales can do, but for other things we are dependent on what happens in Europe, in the world and in financial circles. So we advance with care and with a wide vision, saying and realising that we are not absolute masters of our own destiny.
Lord Elystan-Morgan
My Lords, I, too, congratulate my noble friend Lord Wigley on achieving this debate. Few people in the past 100 years have contributed as honourably and richly to the cause of Welsh devolution as he has.
The referendum of March last year gave Wales limited but nevertheless very wide-ranging primary legislative powers. It seems to me that the Silk report gives the opportunity to complement those very considerable constitutional rights with fiscal power. Those twin sinews of authority would essentially give Wales a home rule Parliament, something which Thomas Edward Ellis and Lloyd George cherished over a century ago and, indeed, the noble Lord, Lord Roberts of Llandudno, referred to.
I reiterate everything that has been said about the Silk report being very much in the track of history in this context. One should see it in the context of the establishment of the Welsh Office in 1964, the Richard Commission, the 2006 Act, the Holtham report of 2010 and to some extent—we cannot be isolated or insulated from this—the Scotland Act 2012. It is in that devolutionary track that one should see the Silk report. The momentum that has been created is very considerable. I argue that it is a dynamic movement that cannot now be stopped, nor, indeed, essentially decelerated.
I wish to confine my few remaining remarks to the Barnett formula. Barnett, as we know, was a stopgap measure, intended to last perhaps only a year or two. It was a crude mathematical division which was calculated as follows: for any moneys that were invested in England, a sum would be allocated to Wales based on the percentage that the Welsh population bore to the population of England. It was crude and took no account of need. As we know, the Holtham commission clearly proved that as a result of that formula we have lost massive sums of money year by year. The estimated loss by now is £350 million. Indeed, today we have heard a figure of £400 million from the noble Lord, Lord Wigley. I am prepared to accept that figure. That, of course, is what we lose purely on the question of need. Our situation is very different from that of Scotland. In relation to Scotland, we lose more like £700 million per annum. Once Scotland gained a Secretary of State in 1885, the Goschen principles were applied. By various subterfuges all manner of weighting considerations were applied to Scotland, with the result, of course, that it was given massive subventions which Wales does not enjoy.
The First Minister of Wales has made it very clear that any question of varying income tax rates should depend first on the reform of the Barnett formula. That is the heart, core and kernel of the whole situation. It is an annual swindle to which Wales has been subjected for very many years and it must be brought to an end. How do we do that? We do it by exploiting this new feeling of unanimity and unity that has shown itself in relation to the creation and acceptance of the Silk commission. Mewn Undeb Mae Nerth—in unity there is strength. That is our prospect and our salvation. For too long we in Wales have been blighted by the curse of disunity. Now we have a chance to put that right. In relation to the Barnett formula, we must realise that justice delayed is justice denied. A stop has to be brought very quickly; there must be a concentrated campaign in Wales to bring it about.
Lord Rowlands
My Lords, I support a number of findings of the Silk commission. I support the proposed transfer of stamp duty land tax, of minor taxes and of business rates, as mentioned by the noble Lord, Lord Wigley. I also support the idea of additional borrowing powers. It is absolutely absurd that a Welsh Assembly Government cannot borrow when almost every other authority can. Apparently to do that one needs to service the debt. I assume and hope—perhaps the Minister will confirm this—that if you transfer the range of minor taxes, plus stamp duty land tax, it will bring in sufficient income to service any borrowing power. If that is the case, the package will be easy to introduce immediately. I also agree with all noble Lords who stated that it would be impossible to introduce major tax-varying powers unless the Barnett issue was addressed. There is little or no point in having tax devolution if such underfunding has not been addressed.
I will confine my remaining remarks entirely to one issue that I have raised before: my concern about the effect on low-income communities such as those I represented of raising tax rates by 3 percentage points or more. I hoped that the Silk commission would tell us what the impact would be on those communities of exercising such a power. I found the answer on two very difficult—in fact, almost incomprehensible—pages on estimates of the impact of income tax changes in Wales. There is a very complex equation and the introduction of the notion of the elasticity of taxable income. I hope that the Minister will translate those two pages into language that I can understand. It is essential to understand the impact the changes would have. If we will the power to a Government to raise the basic rate of tax by, say, 3p or whatever, we should understand the consequences for communities.
The most interesting in a wealth of tables in the report is that on income and income tax in Wales in 2009-10. It shows that of the 1,390,000 individuals who paid tax, 900,000—nearly two-thirds—had an annual income of between £10,000 and £20,000. Nearly 1.4 million people fell into that income tax bracket. I suspect that the percentage was bigger in Merthyr because the percentage of those on lower incomes will have been even higher. That substantial group of 900,000 or more would carry the additional tax burden if we raised the basic rate of income tax. Therefore, I am concerned that if we go down this path, it could lead to a regressive form of taxation. In constituencies such as the one I represented, we would be swapping—in fact, converting—beneficial public expenditure into a tax burden. That would be the effect of implementing additional rates of income tax. We must be honest. Politically it is highly unlikely that a future Welsh Assembly Government of any complexion will substantially reduce income tax and cut expenditure. The whole ethos of political life, among almost all parties now, would be against such a proposal.
If we will the power, we have to accept the consequence of it. I am not convinced, as the people on whom the burden of this would fall are those who should least expect to carry that burden. I keep an open mind, and am very supportive of all the other range of taxes, but I remain sceptical until I can find out exactly what the impact would be on the communities I represented of raising the basic rate of tax above the standard rate. We are not only talking about raising it 1p, 2p or 3p but, at this moment, have a very unfair tax anyway. The moment you come into tax and use up your personal allowances, which will eventually be around the £10,000 mark by the end of this Parliament, the tax on every pound then leaps from 0% to 20% because there is no middle band. I deeply regret the previous Administration’s abolition of the 10p band and have not been able to work out whether Silk recommends that a Welsh Government could actually introduce one. That would at least make an easier tax progression, if that was possible. I am sorry to end on a discordant note but, although it is now 10 years since I represented my former constituency, I still sense and feel that an injustice could be perpetrated if we started to raise the basic rate of tax on low-income communities and low-income families of the kind I represented.
Baroness Gale
My Lords, I thank the noble Lord, Lord Wigley, for giving us the opportunity to debate this important matter, and all noble Lords who have taken part in this short debate. I wish we could have had longer, but the contributions show the wisdom and the knowledge that we have in Wales, particularly with our Welsh Peers. Before giving our response to the report, I will ask the Minister two procedural questions.
First, why is the Wales Office limiting debate on such a vital constitutional matter to meetings of the Grand Committee in your Lordships’ House and the Welsh Grand Committee in the other place? The Minister will know that my honourable friend, the shadow Secretary of State for Wales, has written to the Wales Office asking that a debate be held on the Floor in the House of Commons. In his letter, my honourable friend urged the Secretary of State to hold a full debate so that Members from all parts of the United Kingdom would have the opportunity to participate. No reply has been received, but at Welsh Questions on 28 November in another place, the Secretary of State appeared to suggest that such a debate would not be held until legislation was introduced, which could possibly be two years away. Does the Minister agree that this debate should not be confined or restricted in this way and does she agree that the recommendations of the report are constitutionally significant enough to warrant a full debate in both Houses? I look forward to her comments on those points.
The second procedural point I will raise is the speed of the Government’s response. In a previous answer to me, the Minister said that the Wales Office was,
“committed to dealing with this with all due speed”.—[Official Report, 27/11/12; col. 88.]
However, since then, we have heard that the Government may not respond formally until spring next year. Can the Minister explain why it seems to be taking the Government longer than anticipated to respond to the report?
The Silk report is an important publication, which has wide-ranging recommendations for Wales and the rest of the United Kingdom. We welcome the report and congratulate the commission on its work. We agree with the list of taxes that Silk suggests should remain under the full remit of the United Kingdom Government and should not be devolved. We welcome the recommendation that certain taxes, such as stamp duty land tax and the aggregates levy, should be devolved to Wales and the recommendation that the devolution of these taxes should pave the way for borrowing powers for the Welsh Government, which would enable Ministers in Cardiff Bay to offset the impact of the 45% cut to their capital budget and allow them to further invest in jobs and growth. Can the Minister confirm that the devolution of these taxes would constitute an income stream against which the Welsh Government could borrow? What discussions has she had to this effect?
Furthermore, does the Minister accept that enabling the Welsh Government to borrow against this income stream—in addition to the devolution of the taxes in their own right—would be to the benefit of people in Wales? When it comes to the devolution of income tax-varying powers, the commission has recommended what my honourable friend the shadow Secretary of State described as a triple-lock test. Such devolution should be to Wales’s financial benefit and, to test as much, a nominal amount of Welsh income tax receipts—Silk suggests £2 billion—should be assigned to the Welsh Government without the ability to vary rates.
Proceeding with a test case is a sensible approach because Silk’s evidence suggests that it is far from clear that such devolution would be in Wales’s financial interest. Whether or not it would prove to be so would depend on the change in Wales’s income tax receipts and on the change in income tax receipts from the rest of the United Kingdom. If the Welsh change is higher, Wales will stand to benefit. However, Silk alludes to the fact that Wales was hit particularly hard by the recession and so, if this approach had been in place from the time the global financial crisis hit in 2008, Wales would now be worse off.
Since the Government took the United Kingdom into a double-dip recession, it could well be the case that Welsh income tax receipts have decreased by more than income tax receipts in the rest of the United Kingdom. In other words, Wales is being hit disproportionately hard by the Government’s failing economic policies. That is why the first test is crucial; there is no guarantee that the multiplier will be positive over the next few years. Is the Minister aware of any analysis or modelling that has been forecast regarding this first test? Does she acknowledge that Wales may be disproportionately hit by the Government’s failing policies?
The second test set by Silk concerns reform of the UK’s wider funding formula. Before devolving income tax, a funding agreement needs to be reached that is fair to all of the UK. Silk’s view is that that the Barnett formula would need to be revisited before income tax-varying powers were devolved. I would welcome the Minister’s comments on whether this view is shared by the Government.
The third of the triple-lock tests is that before income tax-varying powers are devolved to the Welsh Government, there should be—I believe that there must be—a referendum. Silk accepts this principle and we share the view expressed in the report that there,
“is a special nature to income tax”,
which necessitates approval from the Welsh people. These three tests would allow for the devolution of income tax-varying powers on the provisos that it would be in Wales’s short and long-term financial interests and that it would speak to the will of the Welsh people.
This debate has given an opportunity for the Minister to shed some light on the Government’s thinking and to inform your Lordships of the progress that the Wales Office has made on this report. I would be grateful for the Minister’s comments on the triple-lock test, as well as on the other questions that I raised. I look forward to her response.
The Parliamentary Under-Secretary of State, Wales Office (Baroness Randerson)
My Lords, I thank noble Lords, in particular the noble Lord, Lord Wigley, for proposing this debate, which has provided an opportunity to consider the recommendations of the Commission for Devolution in Wales—the Silk commission—on fiscal devolution and financial accountability. The noble Lord has rightly taken a keen interest in the Silk commission’s recommendations since they were published on 19 November and clearly recognises the importance of the report for Welsh devolution and for improving the financial accountability of the Assembly and the Welsh Government. I agree wholeheartedly with his comments in this regard.
The Government gave a clear commitment, in our programme for government, to set up a Calman-like process for the Welsh Assembly, depending on the outcome of the referendum on law-making powers for the Assembly last year. Following that vote in the referendum on Assembly powers, there was a clear need to examine Welsh devolution in a methodical way and to ensure there was no repeat of the case-by-case, drip-by-drip approach to devolution that typified changes to the Welsh settlement during the “LCO years”, as I call them. Our commitment to a Calman-like process for Wales did just what was needed.
The Secretary of State set up the Silk commission in October 2011, with, as the noble Lord, Lord Wigley, has emphasised, cross-party support. That support was reflected in the commission’s membership, which included representation from all four parties in the Assembly. Since then, the commission has gathered evidence and criss-crossed Wales to hold public meetings to inform its work on improving the financial accountability of the devolved institutions in Wales. The fruits of that labour, in the form of a nearly 200-page report, were published three weeks ago.
I take issue with the idea put forward by the noble Baroness, Lady Gale, that in some way three weeks is too long to spend analysing a complex package and a complex set of tax proposals, with 33 recommendations. I believe that noble Lords would expect the Government to take that seriously, as we are. Discussions on this are already well under way between Cabinet colleagues and between the Welsh Government and the Treasury. I assure noble Lords that we are taking it so seriously that there will be a response, we hope, in the spring, which I believe is timely for a report of this importance.
There is no doubt that the report is detailed and thorough. It relates to the financial accountability of the Welsh Government and the National Assembly, and how that can be improved through the devolution of tax and borrowing powers. I pay tribute to the commissioners for their hard work.
First, the commissioners recommend that the Assembly should be able to take tax decisions in order to better empower it to deliver policy objectives in devolved areas. To achieve this, the commission’s proposals include the devolution of smaller-yielding taxes, as set out here today.
Secondly, they suggest that to improve financial accountability, the Welsh Government should be responsible for funding a material amount of the money they spend. The commission recommends that responsibility for income tax should be shared between Cardiff Bay and Westminster, and that the Welsh Government should be able to set income tax rates within the UK income tax structure. The commission recommends that income tax devolution should be subject to a referendum, which the noble Baroness has indicated she supports.
Thirdly, it suggests that the Welsh Government should be granted borrowing powers; an issue that was raised very powerfully by the noble Lord, Lord Wigley, and others. That recommendation fits well with the announcement, already made before the publication of the report on 24 October, in which we agreed the principle of borrowing powers for the Welsh Government to fund infrastructure investment, subject to an appropriate independent revenue stream being put in place. In answer to the question of the noble Lord, Lord Rowlands, in general terms the minor taxes that are suggested would be considered to be a sufficient income stream to support borrowing, along the precedent set for the Scottish Government. Indeed, the UK Government have indicated that they will be prepared to anticipate the establishment and devolution of those taxes in order to enable more rapid progress to be made on infrastructure development in Wales.
Taken together, the package of measures recommended by the commission would make the Welsh Government responsible for raising about a quarter of their revenue. That is a significant change, and both the Government and Parliament need to scrutinise the implications in detail. In response to the noble Baroness, I say that my right honourable friend the Secretary of State for Wales has indicated his willingness and keenness to have a debate as soon as possible in the other place. Of course, there will be further opportunities when the Government officially respond to the Silk report.
That brings me on to where we go from here. As I have said, these recommendations would represent a fundamental change in Welsh devolution—perhaps the most fundamental change since it was established in 1999. That requires careful examination. As we announced in last week’s Autumn Statement, the Government plan to publish an initial response in the spring. It is a clear demonstration of our commitment to progress this work seriously, but in a timely manner. There is a significant amount of work to assess. Clearly, the Scotland Act sets a precedent for fiscal devolution, but we need to consider the Silk commission’s package for Wales on its own merits. As I have already said, discussions have already started.
The noble Lord, Lord Wigley, talked about the importance of economic regeneration. I feel that the Silk report neatly linked the policy objective of economic regeneration with its recommendations on specific taxes. The noble Lord also raised the issue of corporation tax. Of course, corporation tax is a very specific area for Northern Ireland in particular, because Northern Ireland shares a land border with the Republic of Ireland, where the rate of corporation tax is particularly low. Corporation tax is a particularly tricky issue if you are to avoid a “race to the bottom”. It is important to bear in mind that if you are on the wrong side of that border in that race to the bottom, you get the flight of businesses over the border. That is a difficult issue to be considered. The Silk commission certainly did not have a clear recommendation on that at all.
The proposed timetable is very tight, but I understand the issue. The Silk commission put forward a package of measures. Fair funding is also a package of measures, and there are ongoing discussions between the Welsh Government and the Treasury, with the agreement announced on 24 October that there would be discussions at the start of every spending review period. It would take into account whether there was likely to be convergence within that period.
The noble Lord, Lord Morgan, raised the interesting concept of representation without taxation. I felt that that was a neat way of referring to the problems that the Welsh Assembly has experienced. He drew attention to the weakness of the devolution settlement. He also spoke about the ability to vary the rate of income tax, and rightly says that Silk is more radical than Calman on this issue. He also rightly said that Silk affects the whole of the UK. However, I point out to several noble Lords who referred to the unfairness of the Barnett formula that it is a pretty blunt instrument because it does not take into account need, but it is also important to place on record that the discussions between the Welsh and UK Governments have led to an agreement that there is no longer convergence occurring. Indeed, in the past couple of years there has been divergence. In other words, Wales is doing rather better than it was a couple of years ago in terms of the Barnett formula. Indeed the figures show—and these are figures agreed between the Welsh and UK Governments—that we are within the rough area that the Holtham commission stated in its report was the fair level of funding for Wales. It is important to bear in mind that there has been that agreement.
Finally, I will, of course, review the record and will take the opportunity, with their permission, to write to noble Lords about any issues of substance that have been raised that I have not been able to address in my response.
The Deputy Chairman of Committees (Lord Brougham and Vaux)
My Lords, that completes the business in Grand Committee this afternoon.
House of Lords
Badgers
(12 years ago)
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Lord Hoyle
To ask Her Majesty’s Government what further plans they have to cull badgers.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley)
My Lords, badger culling is part of a package of measures to tackle bovine TB. The policy will be piloted, initially in two areas, during the summer of 2013 to confirm our assumptions about the effectiveness, humaneness and safety of controlled shooting. An independent panel of experts will oversee and evaluate the monitoring of the pilots and report back to government; only then will Ministers decide whether the policy should be rolled out more widely.
Lord Hoyle
I thank the Minister for his reply. However, scientific evidence conducted over 10 years says that the killing of badgers makes hardly any difference—indeed, no difference—and in fact eminent scientists say that it makes it worse. In view of that, will he now follow the Welsh Assembly and decide on a policy of vaccination rather than elimination?
Lord De Mauley
My Lords, the noble Lord and I will disagree on the science. Ultimately, of course, we want to be able to use vaccination both for cattle and for badgers, and we are investing in this option through extensive research and development. However, there are practical difficulties with the injectable badger vaccine, which the noble Lord refers to as being used in Wales and which right now is the only available option. The difficulties involved include the need for each badger to be trapped and the fact that vaccination does not appear to cure already infected badgers, along with the cost and the fact that it has to be repeated every year.
Lord Krebs
My Lords, I have spoken in your Lordships’ House before about the scientific evidence for the efficacy of culling as a way to control TB in badgers, and I do not wish to repeat myself. However, I should like to ask the Minister two questions. First, how will the success or failure of these two pilots be judged? The independent panel will make the judgment, but what will success look like? Secondly, is it not right that the Government should take the opportunity between now and next summer, when the cull is proposed to resume, to review all the options for controlling TB in badgers, bearing in mind that not even the most optimistic proponent of culling would consider it a credible strategy for the eradication of this dreadful disease?
Lord De Mauley
My Lords, as always, I respect the noble Lord’s position. An independent panel of experts will oversee the monitoring and evaluation of the two pilots for the badger control policy to test our assumptions, as I said, about the effectiveness, humaneness and safety of controlled shooting. The expert panel will play an important role in overseeing the design of the data collection and their analysis, and in providing additional advice on interpretation of the data. It will be on the basis of both the pilots and the panel’s report that Ministers will take a decision on whether the granting of culling licences should be authorised in areas besides the pilot areas, and whether the badger control policy should continue to include controlled shooting as a culling method. On the noble Lord’s second point, we are constantly reviewing the options. As I said earlier, we are working hard on a vaccination, and there are a number of other measures in progress. In a general sense, we are doing as the noble Lord suggests.
Lord Greaves
My Lords, how much have this year’s aborted culls already cost the police in those two areas? What is the estimate for the cost to the police if the two culls go ahead in the summer and who is going to pay this money?
Lord De Mauley
My Lords, to put things in context, we should bear in mind that in 2011-12 the total cost to the Government of controlling the disease in England will be about £90 million but that, without further action, the disease will cost the taxpayer approaching £1 billion over the next decade. In terms of the costs, a large proportion of which are borne by farmers, £750,000 was spent on surveying costs, which gave us the more accurate estimate of badger populations, £300,000 on Natural England’s costs and approximately £95,000 as part of humaneness monitoring.
Lord Harrison
My Lords, given that 92% of the people of this country are against the proposed cull, what conversations has the Minister had with his partners in the European Union who have successfully introduced vaccination?
Lord De Mauley
The noble Lord raises an important point. I can only repeat an extract from the report following the visit to the UK in March 2012 of the EU Commission’s bovine tuberculosis sub-group of the task force for monitoring animal disease eradication:
“It is however of utmost importance that there is a political consensus and commitment to long-term strategies to combat TB in badgers as well as in cattle … There is no scientific evidence to demonstrate that badger vaccination will reduce the incidence of TB in cattle. However there is considerable evidence to support the removal of badgers in order to improve the TB status of both badgers and cattle”.
Baroness Trumpington
My Lords, I do not believe that the Minister mentioned which areas were going to be part of this experiment. During the six years that I was at MAFF, people in Devon begged me to have a culling operation. Is Devon part of the experiment?
Lord De Mauley
My Lords, it is for the National Farmers’ Union to decide where it wants to conduct pilots. Natural England issued west Somerset and Gloucestershire with licences for the two badger cull pilots and these licences remain valid for the duration of the cull next summer. We are working with the farming industry so that badger control in two pilot areas can be implemented effectively in 2013 in the best possible conditions and with the right resources.
Baroness Royall of Blaisdon
My Lords, I declare an interest as a resident of the Forest of Dean, a cull area, and as a member of Gloucestershire Against Badger Shooting. My party still believes that there is no scientific, economic or moral basis for culling. What is the estimated additional cost to farmers or others of a more intensive cull, and are the Government confident of recruiting enough marksmen to do the work?
Lord De Mauley
My Lords, I have referred to costs already. I can only repeat that the cost of not bearing down on TB in cattle through, among other things, controlling the badger population is currently about £90 million a year and is increasing.
The Chancellor of the Duchy of Lancaster (Lord Strathclyde)
My Lords, the noble Lord, Lord Soulsby, is trying to get in.
Lord Soulsby of Swaffham Prior
I thank the noble Lord. My Lords, in view of the vast compensation paid for the slaughter of cattle that react to the tuberculin test, and in view of Britain’s vast experience of vaccination of wildlife—not only of badgers but all over the world—what attention is being paid to the vaccination of badgers in this situation by using techniques that are commonly used elsewhere in the world in very difficult circumstances?
Lord De Mauley
My Lords, I mentioned earlier the injectable badger vaccine, with which, as I explained, there are complications. The other alternative is the oral vaccine. An oral badger vaccine is in development but is still several years away. It is therefore not possible to say with any certainty if and when such a vaccine might be available for use in the field.
Georgia
(12 years ago)
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Lord Harries of Pentregarth
To ask Her Majesty’s Government what is their assessment of the current political situation in Georgia.
Lord Wallace of Saltaire
My Lords, following broadly free and fair parliamentary elections on 1 October, Georgia is now negotiating a tricky period, with a difficult cohabitation between the Government and the President. It is incumbent on all sides to work together to consolidate Georgia’s democratic progress. This message was delivered by my right honourable friend the Minister for Europe, David Lidington, on his recent visit to Georgia on 21 to 22 November.
Lord Harries of Pentregarth
I thank the Minister for his reply, but does he agree that there are very worrying signs coming from Georgia? More than 20 members of the previous Government have been arrested, including many high-ranking officials, former Cabinet Ministers, the deputy mayor of Tbilisi and the chief of the defence staff. It may be that some of those are guilty of misconduct, but will the Government join with other members of the European Union to make it quite clear to the new Prime Minister that the due process of law must be followed in every case and that there should be no hint of what has already been termed political retribution against former members of the Government?
Lord Wallace of Saltaire
My Lords, we are concerned about the number of political figures who have been arrested and we are following that situation very closely. The sentiments that the noble Lord suggested have been expressed by a number of foreign ambassadors and Foreign Ministers. There have been discussions with the Georgians in Brussels. Ivanishvili, the new Prime Minister, visited Brussels in the context of the NATO-Georgia council on 5 December. An active dialogue is therefore under way.
Lord Haworth
My Lords, Georgia is a sovereign, democratic and proud country, but is it not the case that recent events are staining its reputation for democratic development? Is not the Georgian Dream becoming the Georgian nightmare? Will the Minister comment on the cancellation of Prime Minister Ivanishvili’s visit to Washington? Some reports say that while his party is busy arresting and harassing opposition parliamentarians that should remain the case. Would he be welcome in this country while this situation continues?
Lord Wallace of Saltaire
My Lords, it is a little too early to be quite as definite as the noble Lord has been. This is a new Government who have been in office for, in effect, less than two months, and the Georgian Dream coalition is extremely diverse. It is led by the richest man in Georgia, who has very little previous political experience. It is finding its way. Georgia is the most democratic among the former CIS states. It is not by any means a perfect democracy, but one has to recognise that the elections were seen as being broadly free and fair, and there was a democratic change of Government. We have to cling to that and bring all the pressure we can to make sure that the new Government fulfil their full democratic obligations.
The Lord Bishop of Wakefield
My Lords, perhaps I may move the focus to Russo-Georgian relations. Prime Minister Ivanishvili made most of his millions in Russia and it is reported that he either has been, or is about to be meeting President Putin. Will the Minister comment on the Government’s informed understanding of how Russo-Georgian relations may alter or whether they will remain as they are?
Lord Wallace of Saltaire
My Lords, we would welcome an improvement in relations between Russia and Georgia. The new Government have indeed attempted to open a new dialogue with the Russians, but so far, as far as I am informed, the Russians have not responded very favourably. The problems of Abkhazia and South Ossetia remain; Russia still does not accept the territorial integrity of Georgia. There is a long way to go, but in the context of the multinational Geneva talks in which Britain also plays a part, we would very much like a more positive dialogue between Russia and Georgia to take place.
The Chancellor of the Duchy of Lancaster (Lord Strathclyde)
My Lords, there is plenty of time for both noble Lords. I think that we can hear from the noble Lord, Lord Hannay, and then my noble friend.
Lord Hannay of Chiswick
I thank the noble Lord, Lord Dykes.
I should admit that I was in Georgia by chance the week before the parliamentary elections, and, perhaps to offset some of the comments this afternoon, I should say that the massive demonstrations that took place then after the revelation of terrible human rights abuses in Georgian prisons were impeccable. There was no violence on the part of protesters and there was no force used by the police. What we need to do, surely—
Lord Hannay of Chiswick
I said that what we need to do, surely, is support those people in Georgia who showed that degree of maturity in advance of the elections.
Lord Wallace of Saltaire
I thank the noble Lord for those comments. The previous Government were not perfect. There is a very large prison population in Georgia and prison conditions were clearly awful. The current Government are not perfect either; media freedom is still very limited, but we have to do what we can to encourage a process of transition to full democracy, which is still under way.
Lord Dykes
Is my noble friend confident that the October 2010 constitutional measures will ensure greater accountability and duty by the president to avoid the Putin-Medvedev interchangeability that is such a feature of Russian politics?
Lord Wallace of Saltaire
My Lords, one of the worrying concerns has been that the Government have published a proposed series of cuts in the budget that would sharply cut the budget for the presidential administration. We are doing everything that we can, as are a number of other foreign Governments, to encourage a constructive cohabitation between the president and the current Government until the presidential elections next year.
Taxation: Avoidance
(12 years ago)
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Lord Newby
My Lords, the Government are fully committed to tackling avoidance and evasion wherever it occurs. HMRC is to receive additional investment of £77 million to expand its anti-avoidance and anti-evasion activity, including resources to identify and challenge multinationals’ transfer pricing arrangements. Following the Chancellor’s call for international co-operation to strengthen international tax standards, the UK, Germany and France have pledged resources to the OECD to speed up work to tackle profit-shifting and base erosion at the global level.
Lord Dubs
My Lords, the Minister will be aware that if companies and individuals complied with the letter and spirit of the law, the Treasury would be £32 billion better off. Is he aware that the public are extremely angry about this and that the whole situation is grossly unfair to those companies that pay their taxes, such as John Lewis and Marks & Spencer? Is he further aware that the army of bankers, accountants and lawyers advising those companies on how to evade their taxes are the same people the Government employ for their own business? Will he take action in the tax havens that make all this possible?
Lord Newby
My Lords, HMRC does indeed estimate that the tax gap in 2010-11 was £32 billion, which represents 6.7% of total tax due. The tax gap as a percentage of tax due has fallen from 8.2% since 2004. It is not good enough but it is going in the right direction. The absolute determination of the Government to bear down on this was evidenced by the decision we took last year to divert £900 million into this area, which has since been supplemented by an additional £77 million to increase the specialist abilities within HMRC to deal with some extremely clever advisers and companies that seek to minimise their tax.
Lord Naseby
Why does HMRC not take action a bit nearer home and look at the smuggling into this country of cigarettes and tobacco? The percentage for this is still 20% to 25%, denying retailers and the trade a normal profit margin and ensuring that cigarettes are cheaper and easier for young people to take up. That percentage has not changed for the past three years.
Lord Newby
My Lords, tobacco smuggling is a significant issue but in the overall quantum of tax that is currently not paid but should be, it represents a relatively small proportion.
Lord Barnett
My Lords, my noble friend Lord Dubs is quite right, but should the answer not be that there is nothing whatever that the Government can do until there is international agreement which, sadly, is unlikely to happen in the very near future?
Lord Newby
We need a greater degree of international agreement and that is why, along with France and Germany, we have just contributed an extra €150,000 to the OECD’s work to change the basis of accounting. We can do only a certain amount ourselves. It would be a counsel of despair to say that we cannot change the rules; the rules exist and can be changed.
Baroness Kramer
My Lords, I am glad that the Government are ending Labour’s indulgence to business on tax issues but, like many others here, I would like to play a part with my purchasing power. Is there a way we can find out who the good guys are so that we do not have to use the likes of Amazon, Google and Starbucks and can transfer our business elsewhere?
Lord Newby
The Government have yet to establish a good guys’ website but it is an extremely good idea. In the mean time, I suspect that the noble Baroness will just have to read the newspapers.
Lord Davies of Oldham
My Lords, the worry would be that if the Government constructed a good guys’ website they would not be on it. The Minister is absolutely right: we need international action. However, the significant European countries taking action with regard to places such as Monaco point a very accusatory finger at the UK Government, with our plethora of regimes that are in fact tax havens. That is why the Government should be taking a lead, not following others.
Lord Newby
I do not remember the noble Lord quite espousing those lines when he was in my position. The Government are working very hard with low-tax jurisdictions to make sure that we get the tax that is due. This is why the Liechtenstein disclosure facility has been so productive and why the agreement with Switzerland will yield many billions of pounds that we never got before. We also have the newly expanded exchange of information, announced with the Isle of Man, which sets an example that we hope to expand to other tax havens. We are trying to bear down slowly on them so that one after another they become less desirable as places for people to put money to evade taxes.
Lord Forsyth of Drumlean
My Lords, on the problem of leakage of tax revenue to tax havens with lower rates, is not the answer to lower the rates of corporate taxation in this country? In answer to a previous question of a similar nature, my noble friend told me that it was an accounting problem. It is not an accounting problem that leads people to base their company headquarters in countries such as Luxembourg—it is because they pay less tax there. If we wish to maximise revenue, should we not cut corporation tax still further in the way that my right honourable friend did in the Autumn Statement?
Lord Newby
We are reducing the rate of corporation tax but there is a danger of a race to the bottom. Corporation tax brings in a substantial amount of money and is an important contributor to the Exchequer.
Baroness Farrington of Ribbleton
My Lords, would the Minister join me in welcoming the fact that Her Majesty’s Government, having cut the money to HMRC for dealing with this problem, have now restored their own cut? Would he see whether it is possible to collate information about those companies with large numbers of employees that do not even pay a living wage to those employees, let alone their tax, and therefore cost the Treasury in additional income support?
Lord Newby
My Lords, I am afraid the noble Baroness is wrong about what has been happening with the resources: we have been reallocating resources within HMRC. Bearing in mind that so many taxpayers now pay their tax online, we do not need as many people opening envelopes. However, we do need highly sophisticated people working as analysts and investigators.
Immigration: Tuberculosis Testing
(12 years ago)
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Baroness Gardner of Parkes
To ask Her Majesty’s Government whether they will introduce blood tests for latent tuberculosis for immigrants from countries where tuberculosis is common.
Earl Attlee
My Lords, the Department of Health is evaluating the effectiveness of latent TB screening in migrant populations. NICE produces clinical guidelines on testing for diagnosing latent TB. It also advises on which is the most accurate approach in diagnosing latent TB in those who have recently arrived in the UK from high incidence countries.
Baroness Gardner of Parkes
My Lords, is the Minister aware that the moment you arrive here you become the responsibility of the National Health Service? Would it therefore not be much wiser to have these tests carried out in the country of origin where the visa application is made? As I understand it, something like three-quarters of the people diagnosed in the past year would have been missed with the present test. Can he assure me that, if country-of-origin testing is introduced, the Home Office will take action to ensure that the tests are up to standard and not subject to interference or even possible corruption?
Earl Attlee
My Lords, my noble friend is absolutely right. Overseas tests already take place, first by X-ray and then by a sputum test in the event of a positive result. This results in cost savings because we do not need to treat someone suffering from tuberculosis if they come to the UK.
Lord Morris of Handsworth
My Lords, given that tuberculosis is not exclusive to immigrants, does the Minister agree that everyone coming into the United Kingdom from some of the suspect countries should be tested?
Earl Attlee
My Lords, sadly, about 30% of the world’s population have latent TB. We would not test people from other European states even if they have a TB problem.
Lord Ribeiro
My Lords, TB and HIV co-exist. The NHS is required to test all new healthcare workers for tuberculosis and blood-born viruses, including HIV. In relation to overseas recruitment, it is recommended that the tests are performed in the country of origin before applying for employment. Can the Minister confirm that compliance with this guidance is being maintained and is it possible to move towards the situation that currently pertains in Australia, New Zealand and Canada?
Earl Attlee
My Lords, eventually for all the 82 high- risk countries, you will not be able to get a visa to the UK unless you are clear of TB. To clarify further my answer to the noble Lord, Lord Morris, arrivals from the other European states are not tested for TB because of course they do not need to be tested. They can come and go as they please.
Lord Hunt of Kings Heath
My Lords, is the noble Earl aware that the growing incidence of TB is actually a feature now in the UK, particularly in cities such as London and Birmingham? What priority are the Government giving within the National Health Service to dealing with a problem that is causing a great deal of concern?
Earl Attlee
The noble Lord is absolutely right: it is a problem in the big conurbations, due to deprivation and very dense accommodation. I can assure the noble Lord that the Government are on the case. We regard it as a serious problem. Further to the article in the Financial Times, we recognise that we must not let it get out of control. That is partially why we are insisting on testing people outside the UK so that we do not incur the costs for the NHS. It costs about £6,000 to treat someone who is very susceptible to treatment with antibiotics but if they are multiresistant it can cost £100,000 to treat them. We need to make sure that we do not import health problems and we concentrate on solving our own health problems—not just by activities in the NHS but also by improving housing, which I am sure all Governments have striven to do over the years.
Lord Avebury
My Lords, as blood tests for latent TB are already available to migrants through their GPs, is not the answer to encourage greater voluntary take-up in areas such as the noble Lord opposite mentioned—Birmingham, Hounslow and Newham—and enlist the help of diaspora organisations from the 67 countries where TB is most prevalent to increase the rates of take-up? Since the countries that undertake pre-emptive screening all depend on X-rays, as we are now doing with overseas checking of would-be migrants from those countries where active TB exists, and none is contemplating pre-emptive blood testing, should we not have discussions with those countries to concert a common approach on what should be done about pre-entry blood testing in overseas countries?
Earl Attlee
My Lords, I look forward to reading my noble friend’s comments in Hansard in the morning but it is important that testing is targeted. The health professionals will offer tests where they are most effective and most likely to find a problem.
Independent Press Council Bill [HL]
Parliamentary Privilege
The Chairman of Committees
That the Commons message of 4 December be considered and that a Committee of six Lords be appointed to join with the Committee appointed by the Commons to consider and report on the Green Paper on Parliamentary Privilege presented to both Houses on 26 April (Cm 8318) and that, notwithstanding the resolution of the House of 28 May, the Committee should report by 25 April 2013;
That, as proposed by the Committee of Selection, the following Members be appointed to the Committee:
L Bew, L Brabazon of Tara, L Brooke of Sutton Mandeville, L Davies of Stamford, L Peston, L Shutt of Greetland;
That the Committee have power to agree with the Committee appointed by the Commons in the appointment of a Chairman;
That the Committee have power to send for persons, papers and records;
That the Committee have power to appoint specialist advisers;
That the Committee have leave to report from time to time;
That the Committee have power to adjourn from place to place within the United Kingdom;
That the reports of the Committee from time to time shall be printed, regardless of any adjournment of the House; and
That the evidence taken by the Committee shall, if the Committee so wishes, be published.
Lord Lucas
My Lords, perhaps I may ask the Chairman of Committees, is there a lack of talent among the noble Baronesses that there should be none on this committee?
The Chairman of Committees (Lord Sewel)
I have a great deal of sympathy with the implied comment that the noble Lord is making. I have to point out that the Committee of Selection made these appointments on the basis of nominations from the usual channels. If the noble Lord or other Peers wish to take this matter further, they know where the first port of call should be.
Lord Grocott
My Lords, this is a Joint Committee of the two Houses, which I welcome—generally speaking, I think they work very well. We are a bicameral Parliament. This may seem a minor point, but it is part of a pattern: that on the last day before the Recess the Commons are sitting and we are not, and on the first day after the Recess we are sitting and the Commons are not—or whichever way round it is. As the Leader is obviously master of these matters, perhaps he could give us a rational explanation because I simply cannot find one.
Baroness O'Cathain
My Lords, perhaps I may ask the Chairman of Committees for his great advice on how to tackle this, to make sure that we do not develop into a second House of Laity of the Church of England and have no women on any of these committees.
Lord Cormack
My Lords, in attempting to lower the temperature slightly, can my noble friend the Chairman tell us whether any member of this committee from either House sat on the previous important Joint Committee on Parliamentary Privilege? It would clearly be an advantage if there were somebody who had experience of that committee. As one of those people was the noble Baroness, Lady Taylor, she would provide a wonderful answer to both questions.
Baroness Falkner of Margravine
My Lords, without referring to any of the people who have been proposed for this committee, the noble Lord mentioned that it was down to the usual channels. Can he assure the House that when a quarter of the membership of this House does not get to have a say in these important matters, that when he gets this kind of referral in future he will go back to the usual channels and propose to them that they need to incorporate perspectives from all sides of the House?
Lord Tyler
My Lords, I endorse the views of my noble friend Lord Cormack. I, too, served on that committee and I warmly endorse the suggestion that the noble Baroness, Lady Taylor, should be nominated to this committee. From memory, she and I sat through many sessions when we worked very hard on this issue. Parliament as a whole does not do itself any justice when it seems to go back and reinvent the wheel every so often instead of taking advantage of the work that both Houses have done in the past.
The Chairman of Committees
My Lords, I will deal with the list of complaints. First, the main issue has been the gender composition of the committee. I can only say that the Committee of Selection works on the basis of accepting the nominations that come from the usual channels. If Members of your Lordships’ House have a concern that the gender balance is incorrect, they should refer in the first instance to the usual channels that represent their own particular group. It is not up to the Committee of Selection to make that challenge in the first place, but I am absolutely sure that the usual channels have heard the comments that Members have made and will take these into consideration in future. In terms of the experience of the names brought forward today, I have not got the faintest idea whether or not they served on the previous committee.
Lord Richard
My Lords, the Chairman of Committees said that the first thing we should do is go back to the usual channels. With respect, that is not so. The first thing we have to do is not pass this Motion. If this Motion is passed, the committee is established; if it is not passed then certainly we can go back to the usual channels.
Baroness Royall of Blaisdon
I am very proud to be part of the usual channels. I am also acutely conscious of the need for gender balance. I am rather embarrassed by the fact that there is no gender balance on this committee. We have a very democratic system in my party and we ask people to put their names forward if they wish to serve on committees and we try to ensure a gender balance across committees. If, however, it were the will of the House that this should go back in order to find a better gender balance, I would have no hesitation in supporting that. It is something that I am very conscious of.
Lord Campbell-Savours
My Lords, I wonder whether the Chairman of Committees could respond to the question raised by my noble friend Lord Grocott. If he feels that it is difficult, perhaps the Leader of the House could intervene and explain to the whole House what the position is.
The Chairman of Committees
I take the chance that the view of the House is that it would wish to see the composition of this committee re-examined. On that basis, therefore, I will take the nominations back. On the issue of the meetings of the two Houses, the somewhat ingenious way in which the dates of the sittings of the two Houses are arrived at is beyond my comprehension. It seems that a great deal of effort is put into ensuring that we do not sit on the same days.
Equal Marriage Consultation
(12 years ago)
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Baroness Stowell of Beeston
My Lords, with the leave of the House I will repeat a Statement given by my right honourable friend the Minister for Women and Equalities in another place earlier today.
“With permission, I would like to make a Statement on the government proposals to enable same-sex couples to marry. Not so long ago, Mr Speaker, talk of marriage as one of the building blocks of society was dismissed by some as out of date. Of course, those of us in this House who have taken a closer interest know that marriage remains something which most people aspire to. So, far from being a peripheral issue, the future of marriage is something that should concern us all. Today we are setting out how the Government will extend marriage to same-sex couples.
This is a consultation that has been the subject of much debate within the House and outside it. I am immensely grateful to the many honourable Members who have taken the time to discuss these proposals with me, adding their voices to the 19 petitions received by the Government and the record 228,000 individuals and organisations who responded to the consultation.
For some, this is a contentious and radical reform, or, indeed, a reform too far. But the historical facts show that over the generations marriage has had a long history of evolution. In the nineteenth century, inequalities prevented Catholics, atheists, Quakers and many others from marrying except in the Anglican Church. When this was changed, was that accepted without protest? No, I am sure that it was not. In the 20th century, when the law was changed to recognise married men and married women as equal before the law, was that accepted without fierce protest? No. In each century Parliament has acted—sometimes radically —to ensure that marriage reflects our society to keep it relevant and meaningful. Marriage is not static; it has evolved, and Parliament has chosen to act over the centuries to make marriage more equal and fair. We now face another such moment and another such chance in this new century.
For me, extending marriage to same-sex couples will strengthen, not weaken, this vital institution. The response I am publishing today makes clear that we will enable same-sex couples to get married through a civil ceremony. We will enable those religious organisations that wish to conduct same-sex marriages to be able to do so. This will be on a similar ‘opt-in’ basis as is available to them for civil partnerships. That is important for the obvious reason that it would be wrong to ban organisations that wish to conduct same-sex marriages from doing so.
I am under no illusions. I am fully aware that the proposals set out today to allow same-sex couples to marry are contentious. I am also clear that there should be complete respect for religious organisations and individual religious leaders who do not wish to marry same-sex couples. The Government have to balance the importance of treating all couples equally and fairly with respect for religious organisations’ right to their own beliefs.
We need to be fair to same-sex couples. The state should not ban them from such a great institution. Equally, we need to be fair to people of faith. Our religious protections, which I will set out, will ensure that fairness is at the heart of our proposals. Churches have a right to fight for and articulate their beliefs and to be under no compulsion to conduct same-sex marriages. As the Prime Minister has said, we are 100% clear that if there is any church, any synagogue or any mosque that does not want to conduct a gay marriage it will not—absolutely must not—be forced to hold it. That is why as part of our response we will have a quadruple lock, putting into English law clear and unambiguous protections.
I will go into the detail of those locks, but before I do that I want to reiterate my comments yesterday concerning Europe. I know that many honourable Members are worried that European courts will force religious organisations to conduct same-sex marriage. The law is complex but that complexity is absolutely no excuse for misunderstanding the facts. The case law of the European Court of Human Rights and the rights as set out in the European Convention on Human Rights put protection of religious belief in this matter beyond doubt.
The Government’s legal position confirmed that, with appropriate legislative drafting, the chance of a successful legal challenge through domestic or European courts is negligible. I have therefore asked the Government’s lawyers to ensure that this is the case here. Our response sets out clear safeguards—a quadruple lock of measures to protect religious organisations. The Government have always been absolutely clear that no religious organisation will be forced to conduct same-sex marriages. This system of locks will iron-clad the protection in law, adding to the existing protections in European legislation, so that those who do not want to conduct same-sex marriages will never have to.
First, we will write on to the face of the Bill a declaration that no religious organisation, or individual minister, can be forced to marry same-sex couples or to permit this to happen on their premises. Secondly, I will amend the Equality Act so that no discrimination claims can be brought against religious organisations, or individual ministers, for refusing to marry a same-sex couple or allowing their premises to be used for this purpose.
Thirdly, the legislation will make it unlawful for religious organisations, or their ministers, to marry same-sex couples unless the organisation has expressly opted to do so. As part of this lock, a religious organisation will have to opt in as a whole and then each individual minister will have to opt in too. Therefore, if a religious organisation has chosen not to conduct same-sex marriage, none of its ministers will be able to. However, if an organisation has chosen to do so then individual ministers are still under no compulsion to conduct a same-sex marriage, unless they wish to do so.
Finally, because the Churches of England and Wales have explicitly stated that they do not wish to conduct same-sex marriage, the legislation will explicitly state that it would be illegal for the Churches of England and Wales to marry same-sex couples. This provision recognises and protects the unique and established nature of these churches. The church’s canon law will also continue to ban the marriage of same-sex couples. Therefore, even if these institutions wanted to conduct same-sex marriage, it would require a change in primary legislation at a later date and a change in canon law—an additional protection that cannot be breached.
I feel it is important also to directly address other concerns raised by religious institutions. Other legal cases, including provision of services such as bed and breakfast or the wearing of religious symbols, have no bearing on the legal situation regarding marriage. This is because, for most religions, marriage is a commitment made before God; it is at the heart of religious belief. There is clear protection under Article 9 of the European Convention on Human Rights and there is clarity in case law that the European Court of Human Rights considers same-sex marriage a matter for each member state.
Faith has underpinned British society for centuries and it is as important to me as equality for all before the law. These proposals will allow both to co-exist without threat or challenge to the other. People of faith hold views which must be respected. That is why I have always been absolutely clear that I would never introduce a Bill which encroaches or threatens religious freedoms. It is with these strongly held views in mind that the proposals presented here today have been designed.
I believe that these proposals strike the right balance by protecting important religious freedoms while ensuring that same-sex couples have the same freedom to marry as opposite-sex couples. By making it available to everyone, we will ensure that marriage remains a vibrant institution. Our changes will allow more people to make lifelong commitments and enjoy the benefits of an institution that has for centuries lain at the heart of our society”.
That concludes the Statement.
Baroness Thornton
My Lords, I thank the Minister for her Statement and the Government for bringing forward these proposals, which are consistent with the progressive changes that my Government carried through over many years. The Minister can expect our support in carrying forward this enlightened legislation to make it possible for couples who love each other and want to make a long-term commitment to each other to be able to marry regardless of their gender or sexuality. Labour strongly agrees that gay and lesbian couples should have an equal right to marriage. Same-sex couples deserve the same recognition from the state and society as anyone else. I wholeheartedly agree with the Minister that extending marriage to same-sex couples strengthens, not weakens, the institution.
Labour’s introduction of civil partnerships faced some opposition at the time, but much progress has been made in fighting discrimination in the past few years. We need to continue progress on lesbian and gay equality, and same-sex marriage is an important step. Indeed, freedom of religion is also important. No one is proposing that churches should be obliged to hold same-sex marriages. Religious freedom is guaranteed in law and both the Human Rights Act and the European Convention on Human Rights put the protection of religious belief beyond doubt.
Religious marriages are a matter for each church, religious organisation or denomination, not for the Government. We expect the Bill to rule out any church or individual minister being required to perform same-sex marriages and that the protection of religious freedom will be double-locked or double-double-locked, as set out in the Bill. However, freedom of religion also means that we support those churches and faiths that wish to hold same-sex marriage ceremonies in being able to do so, including the Quakers, the Unitarians, Liberal Judaism and Reform Judaism. The Government initially ruled this out in their consultation but, thanks to the campaigns that have been waged, I am happy to see that they have changed their mind and that these provisions may now be included.
Labour’s Front-Bench equalities team has been supportive of permissive legislation which would allow those religious organisations that want it the opportunity to celebrate same-sex marriage ceremonies. This has precedent in Section 6 of the Civil Partnership Act 2004, amended by Section 202 of the Equality Act 2010—now known in this House as the Waheed Alli amendment—which allows religious organisations to host civil partnerships on their premises if they wish.
Some religious leaders have expressed opposition even to proposals for same-sex civil marriage. Although we respect their right to hold such views, we do not agree with them. There was similar opposition to civil partnerships when Labour introduced them seven years ago, yet many people of all faiths now respect and support civil partnerships. I hope that, over time, the Church of England, among others, will take as enlightened a view of this matter and perhaps consider permissive legislation of its own; although I have to say that, after the vote on women bishops, I am not holding my breath.
Labour made huge progress on equality over 13 years in government. As well as introducing civil partnerships, we created an equal age of consent, ended the ban on LGBT people serving in our Armed Forces, increased sentences for hate crimes and outlawed discrimination in goods and services. Between 1997 and 2010, the Labour Government did more for the advancement of lesbian, gay, bisexual and transgender equality than any other Government in British history.
The Minister is correct: marriage is not a static institution. It has, rightly, changed many times over the years to make it relevant to the society it serves. Changes include, for example, the introduction of non-religious, civil marriages in the 1830s, allowing married women to own property in the 1880s and outlawing rape in marriage in the 1990s. Freedom of religion is extremely important. No one is proposing that religious organisations should be obliged to perform same-sex marriage ceremonies.
I listened with interest, as did the Minister, to the debate on the Statement in the Commons. I offer my sympathy to the noble Baroness and some of her colleagues over some comments made by Conservative Members of the House of Commons. One of them said that 98% of his constituents were opposed to this proposed legislation. Quite how he knows that, I am unable to say. I hope that noble Lords behind the Minister will take a more enlightened view of these proposals. The Minister has, unsurprisingly, dwelt on the safeguards. I hope that the Government will not be defensive over the Bill; they should be proud of it.
How will this legislation work? Will the people who currently have civil partnerships be able to, as it were, convert to a civil or religious marriage? How will they do that and will there be any constraints or time limits? The Government have made available their response to the consultation but will they make available its results?
The second lock mentioned by the Minister concerned amending the Equality Act, but I wonder whether, and why, this is necessary. My understanding is that this matter is already covered precisely in that Act.
In conclusion, the Labour Party strongly supports same-sex marriage. People who love each other and want to make a long-term commitment to each other should be able to get married. As a society, we should support and celebrate that commitment. We are pleased and we welcome the fact that the Government have gone further than they originally intended and that they will allow religious organisations that want to celebrate same-sex marriage the chance to do so.
Baroness Stowell of Beeston
My Lords, I am grateful to the noble Baroness, Lady Thornton, for her support. I recognise that her Government did much to enhance equality in this country during their time in office, and I am pleased that we are able to do more and that we have her support in doing so. However, I do not want to polarise this debate. I and the Government have absolute respect for religious freedoms and those who object to same-sex marriage on principled grounds. I want people to feel able to express any concerns that they may have or to raise questions, because I think that many people want to support same-sex marriage and will do so if they can be reassured that religious freedoms are protected. I certainly see that as my responsibility.
The noble Baroness asked a few questions, which I am happy to respond to. On her point about the conversion of civil partnerships to civil marriages, it is certainly our intention to propose in the Bill that the 50,000 or more people who have entered into a civil partnership since that was enacted will be able to convert it to a marriage. There will be a process for them to follow, and I am pleased to confirm that it will not be time-limited.
The noble Baroness also asked about the consultation responses. Today we have published the Government’s response to the consultation document, and that provides some details of those responses. Clearly, having received more than 228,000 responses, it is not our plan to publish all of them individually, but I hope that the details of the consultation document will provide the sort of information that noble Lords will be interested in.
She also asked about the Equality Act and why it was necessary for us to amend it, as we have proposed as part of the quadruple lock. This is necessary because we need to introduce a safeguard specific to the conducting of same-sex marriages so that anyone, such as a member of a religious faith, who chooses not to do so on religious grounds is not in any way at risk of any kind of legal challenge.
I think that covers all the points that the noble Baroness raised. I restate that obviously I am here to respond to questions. I hope that all noble Lords will feel free to express any views and that they will be reassured that those views will be respected today.
Baroness Northover
My Lords, I remind noble Lords that Statements are a time for brief comments and questions. Could noble Lords please show consideration to each other to enable as many as possible to contribute?
Lord Laming
My Lords, I thank the Minister for repeating this measured and very welcome Statement. I hope that she will understand that many of us in this House were brought up to believe that all people are equal in the sight of God, and that some of us are deeply saddened that some churches have given up their responsibility of being at the forefront in promoting equal opportunity.
That being so, I ask the noble Baroness—somewhat unusually for me—to convey to the Government my personal thanks for the thoughtful and sensitive way in which they are dealing with this matter, especially in providing the churches that want them with a remarkable range of safeguards, while the rest of us can go on enjoying and celebrating love and lifelong commitment among adults who love and care for each other.
Baroness Stowell of Beeston
I am very grateful to the noble Lord for his support and also for his comments about the way in which we are bringing forward these proposals. I hope that he will forgive me if I do not seek to respond on behalf of the right reverend Prelates in the House today and I am sure that he would not expect me to.
The Lord Bishop of Leicester
My Lords, those of us on these Benches entirely share the view of the noble Lord, Lord Laming, that we are all equal in the eyes of God. That is why many of us supported civil partnerships, as we believe that the rights and obligations that flow to those who wish formally to mark and celebrate their commitment to each other should not be denied to people simply because of their sexuality.
However, civil partnerships, while conferring virtually the same legal benefits, are not the same as marriage. Marriage is not the property of the Government, nor is it the property of the church. While the forms and legalities around marriage have evolved over time, as the Minister has pointed out, one fundamental feature has remained the same throughout—that marriage is a union of one man and one woman. It is a social institution that predates both church and state and has been the glue that has bound countless successive societies together.
Does the Minister recognise that our concern here is not primarily religious conscience or the protection of the Church of England’s position but, rather, a more fundamental concern for stable communities? Can she assure us that teachers in church schools, for example, will not be disciplined for upholding traditional religious teaching? Can she assure the House that, in spite of the accelerated pace of this process, proper time, even over a Christmas holiday, will be given for adequate consultation with the Church of England’s canon lawyers on the legislative drafting? Can she assure us that the great majority of members of the Church of England and other faiths will not be labelled as prejudiced against gay people for taking a traditional stand?
Perhaps most troubling is the fact that the Government and the Opposition have together in proceeding with this measure led to division not only within the country, where polls consistently show that around half the population is against this change, but also between the political class and the vast majority of practising religious people. What plans do the Government have for working towards some greater degree of consensus on this matter?
Baroness Stowell of Beeston
My Lords, I am grateful to the right reverend Prelate for setting out his view on behalf of the church. I acknowledge that people have concerns about some of these proposals, but the safeguards that we are putting in place to protect religious freedoms are there directly to address those concerns. We are not in any way redefining how religious organisations see marriage. Nothing that we are proposing affects any religious faith or teaching in a faith. We are not changing society. We are bringing forward changes to reflect society as it is. We are seeking to do so in a way that is respectful and understanding of different views.
The right reverend Prelate asked me about teachers and faith schools. I can reassure him that nothing that we are doing in this legislation will bring about any change to the approach for teaching in schools. A faith school would be able to continue to describe its belief that marriage is between a man and a woman while recognising that same-sex couples can marry.
The right reverend Prelate asked me about allowing proper time for consultation with canon lawyers. I can absolutely give him that assurance. It is our intention to make sure that we have watertight legislation that addresses all the concerns that religious faiths may have.
Finally, I say to the right reverend Prelate and to all Members of this House that there is absolutely no way that we as a Government would seek to label anybody who did not support same-sex marriage as prejudiced. We are trying to make marriage available in civil ceremonies to same-sex couples and to protect the religious freedoms that are rightly there for all faiths to continue to act in accordance with their beliefs, and we would not seek to change that in any way.
Lord Lester of Herne Hill
My Lords, will the Minister accept from these Benches our wholehearted congratulations on and support for this Bill? It was, of course, we who began civil partnerships though my Private Member’s Bill, which was taken over by the Labour Government. This is a further example of progress. The Act of Uniformity in the 17th century forbade religious marriages of any kind except those in the Anglican faith. It was in the 19th century that that began to change through Lord Brougham’s Bill of 1855. This is a further step forward. Will the Minister accept from me that the safeguards that she has just mentioned will be wholly compatible with the European Convention and will pass full muster before the European Court of Human Rights if anyone was silly enough to take a case there?
Baroness Stowell of Beeston
I am grateful to the noble Lord for his support, and I recognise what he has done over many years to bring forward the rights of others and to ensure that we continue to progress equality in this country. I am also grateful to him for his very clear statement about the compatibility of the safeguards with the European Court of Human Rights.
Lord Collins of Highbury
My Lords, I thank the previous Government, who enabled my husband and I to have the same legal rights as married couples. I welcome this next small step towards equal marriage and full equality under the law. My husband and I have been through two civil partnerships in recent times on the path towards equal marriage, and I very much welcome the cross-party support for this move. Having gone through a GLC civil partnership and a civil partnership under the law, my husband is determined that we have a proper marriage and a full ceremony in the local town hall. Will the Minister be able to guarantee that for me and my husband?
Baroness Stowell of Beeston
I am very grateful to the noble Lord for setting out why he feels as strongly as he does about this. I am pleased to be able to confirm to him that if the Bill passes through Parliament and becomes an Act, not only will he be able to marry in the local town hall but he will be able to convert his civil partnership into a marriage and will legally be able to call his partner his husband.
Lord Deben
As a practising Catholic I wholly support the church’s teaching on marriage, but I am also pleased that the Government have decided to bring in this Bill. The right reverend Prelate is right to say that marriage is not owned by either the state or the church. It is owned by humanity. Surely our understanding of sexual relationships and sexuality should lead us to understand that there is an extension of natural law from that understanding. That extension should lead us to be prepared in the state to allow people of the same sex to marry. It is wrong to suggest that there is something unnatural for them to wish to take this step. Therefore, I congratulate the Minister on repeating the Statement. I think she will have considerable support from Christians of all denominations, not least from Catholics.
Baroness Stowell of Beeston
I am very grateful to my noble friend for his remarks and support. He has very eloquently described why this is an important step forward and why—with the right safeguards in place to protect religious freedoms—we will be able to bring forward a right that many people should feel is theirs and which they can enjoy.
Lord Morgan
Like others in the Labour Party, I declare my support for this measure, which is liberal, humane and in accordance with the progressive consensus in our society, particularly among young people. This is not a young House and it is important that we strike a chord with younger people.
However, the Statement contained a quite absurd historical error: it referred to the established church in England and Wales. In Wales, the church has been disestablished since 1920. I declare an interest as the only living author of a book on that subject, and I hope I did not put quill to parchment in vain. I just wonder what the situation will be in Wales.
Baroness Stowell of Beeston
As the noble Lord was speaking, my heart started to miss a beat. I only hope that I read out a version that had not been corrected by my right honourable friend. I am absolutely clear about the noble Lord’s point that the Church in Wales is disestablished now, but the safeguards apply to the Church in Wales as they do to the Church of England because the Church in Wales has a duty to marriage in the same way that the Church of England has. Therefore, all limbs of those safeguards will apply to the Church in Wales.
Lord Harries of Pentregarth
Is the Minister aware that, notwithstanding the official position of the Church of England on this, a good number of its members warmly welcome the Government’s position on this? Is she aware that privately, a fair number of individual bishops in the Church of England also support it, but are not able to say so publicly at the moment because of the political situation in which the Church of England now finds itself?
Baroness Stowell of Beeston
I am grateful to the noble and right reverend Lord for making those points. I obviously note them, but I leave it to the church to comment on its own position on this matter.
The Marquess of Lothian
May I enter a slightly dissenting note in what otherwise appears to be a consensus? I fully accept the merits of civil partnership in our society, but are the Government aware that in moving towards this legislation, they will create two distinct and potentially divisive forms of marriage—statutory marriage on the one hand, which this legislation will create, and real marriage between a man and a woman on the other, which cannot be redefined by statute any more than night can be redefined as day by statute, or fiction as fact?
Baroness Stowell of Beeston
There is only one form of marriage and what we are setting out here is that it will remain a matter for religious faiths as to how they define marriage within their own faith. There is only one legal type of marriage and that will apply both to couples of opposite sexes as well as to couples of the same sex.
Lord Cormack
My Lords, notwithstanding what was said by the noble and right reverend Lord, Lord Harries, and my noble friend Lord Deben, the fact is that for the majority of Christians in this country, at the heart of their religious belief is the belief that marriage is between a man and a woman. In that context, can the Minister assure us, first, that the 500,000 people who signed the petition that was reported in today’s press will be taken into account? Secondly, will she assure us that every member of Her Majesty’s Government, as well as Back-Benchers, will have a free vote on this issue?
Baroness Stowell of Beeston
I have tried to make clear that in bringing forward our proposals we recognise and respect the religious freedoms of those who are committed to their faith and the position that their respective faiths take with regard to marriage. Perhaps it is worth reminding my noble friend that the consultation was about how we bring about same-sex marriage and not about whether we should. The huge response was the largest that we have ever had to a consultation. In the consultation document that has been published today, we are very clear that in addition to the 228,000 who responded many others signed their names to a petition. We are firmly of the view that we are moving forward in the right way and taking account of everyone’s position on this. On my noble friend’s final point, I can confirm again that it will be a free vote.
Lord Northbourne
My Lords, does the noble Baroness agree that a very significant element in marriage concerns children? Will she give an assurance that the position of adopted children in single-sex marriages will not be changed for either better or worse by a partnership entering into a civil marriage?
Baroness Stowell of Beeston
We have been clear that what we are bringing forward will focus on allowing same-sex couples to marry. That is the purpose of this legislation and where the change in legislation will occur. There will be no impact on any adoption laws whatever.
Lord Eden of Winton
My Lords, where exactly did the pressure come from which has persuaded the Government that this proposal is a sensible, or even a desirable, thing to do? Why are they taking this further, beyond what I understand is already a very good provision that allows for civil partnerships to receive a blessing in the church? The union can therefore be blessed in the sight of God in a place of religion. Surely it is not necessary to go further than that. In proposing to do this, are the Government not requiring a complete redefinition of marriage as laid down in the Church of England?
Baroness Stowell of Beeston
I understand the points made by my noble friend. I can only restate what I have already said. As regards the Church of England or any religious faith, we are putting in place safeguards to prevent any change to their religious definition of marriage.
As to why we are doing this and why it is different from civil partnerships and allowing civil partnerships to take place on religious premises, while civil partnerships were a significant step forward, and were embraced and welcomed by many people, especially those who have taken advantage of a civil partnership, there is still a distinction between a civil partnership and marriage. We believe that marriage should be available and accessible to two people who love each other, and who want to spend their lives together, and that they should not be discriminated against just because they are of the same sex. That is why we believe that it is right that a same-sex couple should be able to marry and to define themselves legally as married, as do other people who have the same feelings for the one they love.
Lord Mackay of Clashfern
Apart from the name, what difference is there to be between a civil partnership, as enacted during the tenure of the previous Government, and the proposals made here?
Baroness Stowell of Beeston
The key issue is that two people of the same sex will be legally defined as married in the same way as two people of the opposite sex. There will be no difference in the definition of their relationship in future.
Police (Complaints and Conduct) Bill
(12 years ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Taylor of Holbeach
That the Bill be read a second time.
Relevant documents: 8th Report from the Constitution Committee
The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach)
My Lords, I beg to move that the Bill be now read a second time.
It is important that we remember why we are here today: the tragic events of 15 April 1989 resulted in the deaths of 96 innocent men, women, and children— 96 lives lost, and 700 people injured, many seriously. For those who survived, and those whose family members did not come home that day, the events that unfolded at Hillsborough changed their lives for ever. We must never forget that fact. Yet we are here today, 23 years on, still seeking justice—23 years of hurt and grief for the families, of not knowing the truth; 23 years suffering lies, rumours and innuendo in the media; and 23 years of the authorities actively obstructing the truth, by lying, amending statements and shifting blame for those tragic events on to the fans themselves. That is the “double injustice” to which my right honourable friend the Prime Minister referred. That is why we have brought forward this fast-track legislation: to help to tackle this double injustice.
The truth about the terrible events of that day is now known. The independent panel, chaired by the right reverend Prelate the Bishop of Liverpool, published its report in September. I take this opportunity to record our thanks to the right reverend Prelate, and the rest of the panel, for their dedication and hard work. It has provided the foundation for us to move this issue on. Its work has not only exposed the truth about Hillsborough but helped to keep the needs of the families to the forefront of all our considerations.
I shall not detain the House by thanking the many individuals who could be singled out for their efforts, but I will mention the right honourable Member in another place, Mr Andy Burnham, without whose dedicated work the panel would never have been set up. Most importantly, before I move on, I put on record my thanks and deepest respect to the families and friends of the 96 victims of the disaster, and to the survivors. I was privileged to meet some of their representatives, whose dignity and dedication to the truth is truly inspirational.
The truth exposed in the panel’s report is both shocking and disturbing. The safety of the crowd was “compromised at every level”, the ground was inadequate, and earlier warnings of the potential for disaster had not been acted on. Once the disaster started to unfold, the correct action was not taken, and the emergency response was poor. Then, in the aftermath, the authorities responsible for protecting the public and exposing the truth made a concerted effort to conceal the truth. Statements and evidence were altered. The original inquests were flawed. Attempts were made to shift blame on to the fans themselves, implying that drunken behaviour was at the root of the tragedy.
To understand the extent of the attempted cover-up is a chilling experience, but it is vital that this truth is known so that, after 23 years, we can be sure that it is not the end. For the families who have suffered years of injustice, simply knowing the truth is not enough; we now need to move from the truth to justice. It is for this reason that we have brought this Bill before the House today.
Following the publication of the panel’s report, the Independent Police Complaints Commission announced that it had launched an investigation into the panel’s findings. That is a vital step in the transition from truth to justice and accountability. The IPCC investigation will look into the conduct of all officers at Hillsborough on 15 April 1989 and all those involved in subsequent investigations. It is important to note here that the investigation will look at matters of both misconduct and possible criminality. It will consider the actions of officers currently serving with the police and those who have subsequently retired. The investigation into the Hillsborough disaster will be on an unprecedented scale for the IPCC, which estimates that 2,400 officers could be within its scope. We recognise the additional burden that an investigation of this scale places on the commission and we have made a clear undertaking to provide it with both the resources and the powers needed to conduct a thorough and transparent investigation into the panel’s findings.
Since the independent panel published its report in September, the Home Secretary, my fellow Ministers and officials have been in close contact with the IPCC. The IPCC has made clear that, in order to fulfil its obligations in the Hillsborough investigation, it needs two additional powers and it needs them urgently. Those are the two powers contained in the Bill. There have, of course, been ongoing discussions between the Home Office and the IPCC for some time regarding the powers that the commission has and whether they are sufficient. I should be very clear on this matter: those discussions are still continuing. Should it become apparent that the IPCC needs reform or further additional powers in relation to its regular, day-to-day functions, then the Government will act. If legislation is required, we will bring it forward. The fact that we have introduced this fast-track Bill is testament to our dedication to ensuring that the IPCC has the powers that it needs to function effectively.
However, those questions of wider reform are not for today. The IPCC has been very clear; it needs the two additional powers contained in the Bill in order to conduct as thorough and comprehensive an investigation into Hillsborough as possible. In order to fully investigate the tragic events of the disaster, the IPCC is clear that it will need to hear from those officers involved on the day and in subsequent investigations. The commission already has the power to call serving or retired officers to give evidence where the officer is a subject of the investigation. Officers suspected of misconduct or criminality are already required to attend an interview when they are called. However, the IPCC needs to hear from a wider range of officers; perhaps those who were simply at Hillsborough on the day and who may have witnessed conduct that the commission needs to be aware of, such as colleagues altering statements. The testimony of such witnesses will be vital to the IPCC investigations into Hillsborough.
Clause 1 extends the existing power, which compels officers who are themselves the subject of an investigation to attend the interview. The clause will provide that serving officers and police staff can be compelled to attend as witnesses. This can bite when the interview arises as part of any investigation managed by, or independently undertaken by, the IPCC. This power will apply to officers in Home Office forces and other policing bodies, such as the British Transport Police and the Civil Nuclear Constabulary. Of course, in the vast majority of cases, I expect that both serving and retired officers will attend an interview willingly, recognising the importance of assisting the IPCC to investigate as serious a tragedy as Hillsborough. Any decent human being would.
The power in Clause 1 applies to individuals still serving with the police. The IPCC will not be able to compel a retired officer to attend an interview as a witness through the use of this power. I am aware that some noble Lords may believe that, given the significance of this investigation, this power should extend to retired officers as well as those still serving. However, we must recognise the status of retired officers. Once officers retire, they are in the same position as any other member of the public. They are no longer bound by the same responsibilities and obligations as serving officers, and are not subject to the same penalties that can be imposed through police conduct regulations. The police themselves do not have the power to compel an ordinary member of the public to attend an interview as a witness. If the police want to compel an individual to attend an interview, they must arrest them as a suspect.
To give the IPCC powers of compulsion over retired officers would be to extend the commission’s powers beyond those held by the police. I do not think that any Member of this House would be comfortable with that, and such a matter would require careful and detailed consideration. Let us remember that the IPCC can, and will, investigate retired officers for misconduct and criminal behaviour, and it has the powers to compel such individuals to attend interview. The power contained in Clause 1 will be used in relation to witnesses, and it is proportionate that this applies to serving officers only. However, as I said before, I expect that many retired officers will attend voluntarily. The IPCC is currently scoping its investigation, and intends to start calling witnesses early in the new year. Noble Lords can be in no doubt, therefore, of the urgency behind this short Bill.
I turn my attention to Clause 2. This allows the IPCC to investigate matters that were previously subject to an investigation by its predecessor, the Police Complaints Authority. The power will be exercised by the IPCC only when it is satisfied that there are “exceptional circumstances” that justify its use. This is a high threshold. The need for this power is clear, because the PCA investigated certain aspects relating to the Hillsborough disaster. In particular, it considered the decision to open exit gate C at the Leppings Lane end of the ground and not to close the tunnel. Those decisions had a huge impact on the events of the day and, without the power in Clause 2, they could not be considered by the IPCC. We must ensure that no aspect of the events of that day is out of scope of the investigation. This power is therefore central to the eventual success of the investigation and, in turn, central to maintaining the trust of the families and the people of Liverpool. Although the power is essential, it must be tightly drawn if we are to avoid the prospect of reopening every old PCA investigation and turning the IPCC into a cold-case review body.
There must also be a sense of finality to the investigations concluded by the PCA or the IPCC. That is why the power in Clause 2 provides the IPCC with the discretion to reopen cases where the matter meets the high threshold of “exceptional circumstances”. This test will allow matters relating to Hillsborough to be considered, but the IPCC itself has stated in the briefing on the Bill that it has given to noble Lords:
“Unless there are powerful public interest reasons, as well as exceptional circumstances, it must be right that scarce resources are not diverted from addressing our extremely important current work”.
The commission goes on to say that,
“the IPCC must be in a position to resist becoming an historic cases body, which it is not designed nor resourced to be … The Commission will therefore want to take a rigorous approach to the application of this clause in other cases, and it would be helpful if it was clear during the Parliamentary debate that this was Parliament’s intention”.
I can confirm that the IPCC has precisely set out the Government’s intention. We do not want the IPCC to spend its time reinvestigating cases that have already been closed, and we see this power being used only in truly exceptional cases. Hillsborough is truly exceptional and it is right that these matters are reinvestigated. It will be for the IPCC as the independent body overseeing the police complaints system to determine whether a case meets this exceptional circumstances threshold, and it is appropriate for it, as an investigatory body, to hold that decision-making power.
The Bill before the House today is essential finally to achieve justice for the 96 innocent men, women and children who died as a result of the Hillsborough disaster. The Bill is narrow in scope, focusing on two powers that the IPCC needs to fulfil its obligations relating to Hillsborough. Rightly, it does not stray into the territory of wider reform of the IPCC. That would not be appropriate for a fast-track Bill. This short Bill provides the IPCC with the tools that it needs and marks one step further along the road to justice for the victims of Hillsborough. All who support this aim should support this Bill, and I commend it to the House.
Baroness Smith of Basildon
My Lords, I thank the Minister for his comments and for his explanation of the detail in the Bill before us.
On 15 April 1989, across the nation people watched with increasing incredulity and horror the unfolding tragedy of events at Hillsborough. It was hard to comprehend that people were dying in front of our eyes on what should have been an exciting day for the FA Cup semi-final. The loss of life was staggering: 96 innocent men, women and children were killed; 700 people suffered injuries, some serious; and thousands more were traumatised by the events of that day. It remains one of the biggest losses of British life in a single day since the end of the Second World War.
While many of us shared in the shock and horror on the day, those directly affected have been living with the aftermath ever since. That is not just because of the loss of loved ones or the injuries and trauma they suffered, but because, although at the time it seemed that we had witnessed the full extent of the horror, it has become clear that the tragedy of that day has been compounded and magnified by the 23 years of lies and obstructions put in the way of those trying to get to the truth of why and how something so terrible and dreadful could happen.
As we heard from the Minister, totally untrue but appalling and hurtful accusations and allegations were made about Liverpool fans and then reported by some as facts. That such lies were told and took so long to be corrected has created enormous anger and great sadness. Those lies and that lack of justice have made the search for the truth too long and unnecessarily hard and traumatic. Yet, that fight has made those affected only more determined to get to the truth. We in your Lordships’ House agree that they should not have had to have that fight.
The Bill and the welcome announcement by the Attorney-General yesterday that he is seeking to quash the original Hillsborough inquest verdict of accidental death is part of the way forward. As the Minister also said, it is appropriate. I am sure that your Lordships’ House would welcome the opportunity to pay tribute to the families and organisations that have fought for justice, to their supporters and to their legal advisers, including the noble and learned Lord, Lord Falconer of Thoroton, who will be speaking in this debate today, as well as those politicians and community leaders who have fought for truth and justice and who have taken courageous, sometimes unpopular decisions.
We must also pay tribute to the right reverend Prelate the Bishop of Liverpool and I look forward to his contribution to this debate. I have no doubt that the report of the independent panel which he chaired, while deeply distressing, is finally helping the people of Liverpool to move beyond that search for the truth and focus on their quest for justice. It is the shocking findings of that report that have led the Attorney- General to take his decision and also to the IPCC reopening the investigation. This Bill will assist in that quest for justice. There are a number of aspects to that quest and a hugely significant part is the investigation by the IPCC; the Bill seeks to ensure that it has greater powers to conduct that investigation.
There is genuine cross-party support for this Bill and it is cross-party, united action that has brought us to this point. We raised with the Government the issues in this Bill and we put on record our appreciation for the willingness and readiness of Ministers to engage in and listen to the concerns raised by my right honourable friend in the other place, Yvette Cooper, the Shadow Home Secretary, regarding the powers that were available to the IPCC. Without reservation, I thank the Government and the noble Lord for bringing this Bill forward largely to address those concerns.
We agree with the Government that is not the end of the debate or the end of the changes that need to be made. We also agree that what we have before us today is appropriate for fast-track legislation and note unanimous support for the Home Affairs Select Committee in the other place for the content of the Bill and its approach to it, while raising issues that are not covered by the Bill.
If the IPCC is fully to investigate the potential criminal and misconduct issues raised by the independent panel, it needs these greater powers in order to examine the conduct of the police on 15 April 1989 in addressing the culpability of the individuals and organisations involved and the safety standards, planning and operational decisions that led to the disaster. These greater powers are also needed to examine the evidence that suggests a massive cover-up following the disaster that has continued for years. The Minister gave some examples of that cover-up, but to those I can add that 164 statements were taken by the police and it is incredible that the panel found that 116 were altered in some way. This is how the tragedy was compounded and magnified and why my right honourable friend Yvette Cooper called for the inquiry to have greater powers.
Now I turn to the specific clauses of the Bill and look at Clause 1. At present, the IPCC can require police officers to give evidence if it believes they have committed a crime. However, the IPCC has been clear that in order to gain the fullest picture of events it also needs to be able to obtain evidence from police officers and police staff not themselves suspected of any criminal activity or misconduct but who are witnesses. The IPCC has expressed its concerns about the convoluted current process if an officer chooses not to attend an interview as a witness, which it considers can seriously undermine public confidence in its work. The IPCC, in a report to Peers, has informed us that it does not keep specific records of non-co-operation by the police and police staff but that, in what I assume was a quick exercise, it readily identified at least 25 cases involving over 100 police officers where they have refused to attend for interview as witnesses. Those involved cases such as death, serious injury, police shootings, road traffic incidents and the use of excessive force. Clearly that is a serious problem and one that the Bill seeks to address.
I also want to say something about what the Bill does not do, and invite the Minister to comment. As he explained, the Bill does not compel police officers or staff to answer questions. Although the IPCC is not asking for this power, in the debate in the other place it seemed to me to be clearly the intention of Parliament that, if called for interview, police officers and staff would be expected to co-operate fully with the IPCC. Indeed, we would argue that there is a moral duty to do so. Will the Minister confirm that refusal to co-operate, after being called by the IPCC to give evidence as a witness, would be a misconduct matter? Can that be clarified in regulations? Can he give further information to your Lordships’ House about the sanctions that would be available in these circumstances? It would be helpful if he could inform your Lordships’ House whether any disciplinary action following non-co-operation with the IPCC would be at the discretion of the chief constable of that police force, or if this will be specified in guidelines or in secondary legislation. There needs to be a national standard that provides clarity to police officers and staff about the need to co-operate and the consequences of not doing so. It is unfair on police officers, when called to give evidence, that different police forces have different standards.
I would hope that the majority of police officers will recognise their duty to co-operate—although that does not appear to be the experience of the IPCC to date—and that sanctions will rarely be required. However, clarity is needed for cases of the kind already mentioned where co-operation is not forthcoming.
I also recognise that, as the Minister said, the Bill cannot force retired police officers or staff to attend interviews as witnesses. I understand why that is—a retired person is a private citizen—and why the Government consider that it is not appropriate to deal with the issue in fast-track legislation. However, it is a serious issue and I hope that the Government will consider and seek to remedy it.
I trust that provision can be made to ensure that early retirement cannot be used as a way of avoiding giving evidence to the IPCC. Will an officer or staff member be able to have a retirement application considered after they have been asked to give evidence to the IPCC? I know that Ministers have discussed this issue. The shadow Home Secretary, the shadow Police Minister, the right honourable David Hanson, and other Ministers are aware that this issue needs to be addressed and I would be grateful for any indication that the Minister can give of the action the Government intend to take.
It would also be helpful to have clarification of an answer given by the right honourable Damian Green in the Commons to the right honourable David Hanson, the shadow Police Minister. Damian Green said that even if an officer had retired, the investigation will continue into criminal or misconduct matters. Can the Minister confirm whether that means that a retired officer will still be required to give evidence if he or she is the subject of an investigation; or can he or she only be compelled to do so prior to the date of his or her retirement? I am also unclear about whether the authority of the IPCC to compel witnesses who are police officers or police staff extends to civilian staff and private contractors working for the police.
On Clause 2, as the Minister said, currently the IPCC cannot investigate any matters previously considered by the Police Complaints Authority. If that situation were to continue, it would seriously hamper the work of the IPCC in investigating matters relating to Hillsborough.
The Bill will allow the IPCC to make investigations if it is considered that there are exceptional circumstances. The Minister discussed this in his comments. The IPCC is understandably concerned that, within its resources and other work, it will be unable to take on all cases where it might be considered that the circumstances are exceptional. It wants to be sure that it is able to confine itself to those cases that are exceptional and involve powerful public interest reasons. I know, understand and agree that the Government do not want the IPCC to become a bureau reinvestigating historical cold cases and the Minister’s comments on that were helpful. However, I am concerned that qualifying “exceptional circumstances” by ensuring that powerful public interest reasons are also involved could mean that without a powerful public campaign exceptional reasons would not be considered.
I do not think that is what either the IPCC or the Minister means to happen—there needs to be a balance. The exceptional circumstances have to be about the merits of the case and not the public interest—using the meaning of public interest as public enthusiasm or publicity about a case. The point I am trying to make is that this should not be about those who shout the loudest because there may be exceptional circumstances that the IPCC should look at but that are not the subject of a massive public campaign.
In the other place, David Hanson asked about the concerns raised by the Police Federation and the Police Superintendents’ Association about the lack of consultation. They had issues regarding the Bill that they wished to discuss with Ministers. The Minister said that he had a meeting scheduled with the Police Federation and was happy to meet the Superintendents’ Association. Have those meetings now taken place and is there any information from them that the Minister can share with your Lordships’ House?
We have this Bill before us today—and yesterday we had the welcome announcement from the Attorney-General on the inquest verdicts—because of the tenacity, dedication and faith of the families and the faith of those who supported them that truth will out. That quest for the truth and justice has been hard fought—it is of deep regret that it has been so hard fought. Too many barriers, lies and obstructions have been placed in the way of the truth. We support and welcome the Bill. It is not the end of the process but part of it. As indicated, there are other issues that we will return to. Through the independent panel and the work of families, their lawyers and supporters, we are now at the point where truth is emerging and justice can prevail.
Baroness Hamwee
My Lords, I am not from Liverpool but I am acutely aware of how central football can be to the DNA of the citizens of a city, and I mean more than loyalty to a particular club. In my home city, if you support Manchester City you celebrate when Manchester United loses, but tragedy brings people together. I have a vivid early memory of the air crash at Munich when Manchester United was returning from Belgrade. The shockwaves were felt throughout Manchester, among firm City supporters no less than others. Looking the other day at some information about that crash, I realised that of those who died there were as many reporters as players. That prompted me to reflect that, had that crash occurred in 2008 not 50 years earlier, the press would have behaved differently—and probably much more intrusively.
I mention the Manchester United air crash because I think I have some understanding of how the whole of Liverpool felt and still feels affected personally by the tragedy of Hillsborough—qualitatively quite differently from the public more widely. I say “feels” in the present tense because the tragedy is not just a past event. Of course, it never could be for the families of those killed or injured, or for those who were there, but the current sense of insult and outrage for the whole city and all right-thinking citizens who care about the reputation of their public services is something that is not in the past.
Tribute has rightly been paid to the right reverend Prelate the Bishop of Liverpool—I am embarrassed to be speaking before him—not just for the report but for the whole process. That the panel made contact with at least one member of each bereaved family says so much about how it approached its task. Again, tribute is rightly paid to the families and survivors whose grit, determination and dignity were recognised by the panel and the public. The panel’s report is powerful, telling and very shocking. I was pulled up short by its reference to,
“a narrative of hooliganism … against a background of times when football was perceived as a national disease”,
and shocked by the,
“confluence of establishment interests”.
I do not need to recite the shocking events related by the report and their quite extraordinary scale.
My other general point is that as a society we seem too often to shy away from saying “sorry”, perhaps because we focus too much on the implications for liability. That seems to have spilled over. We use weasel words like, “apologise if any inconvenience has been caused”. I want to emphasise the importance of apology. From time to time, things will go wrong—maybe badly wrong. Detail is important for those affected and those against whom allegations are made, but as well as investigating what happened, a simple apology can make clear that it is understood that there are real people with real feelings involved.
Like others, I am cautious about fast-track legislation but to delay the Hillsborough investigation even further or not to give the investigators the tools that they identified are required would not be right. I am prepared to trade extended parliamentary scrutiny of the Bill for scrutiny of the event. But having fast-tracked it, there is no excuse for not moving forward with the investigation with speed and determination. I hope that the IPCC will emulate the panel and work across agencies, individuals and issues in a co-ordinated fashion.
I will not ask the Government today when we might see legislation to address the issues that they themselves have identified as outstanding—or, on the other hand, an announcement that they have determined that legislation is not necessary. I refer here to things such as sanctions for serving officers refusing or failing to attend an interview, and the wider issues around sanctions and their application to former officers, including those who are now employed by companies providing contracted-out services, which is a growing issue. These issues are relevant to more than Hillsborough. I understand that 31 officers refused to be interviewed after the death of Mark Duggan. Conversely, there is the issue of the application of a caution before questioning. But as I say, I do not expect the Government to pursue those matters today.
There has been discussion of the term “exceptional circumstances”. It seems appropriate that the IPCC itself should assess exceptionality. The ability to make that assessment goes towards the very independence of the IPCC. It is worth reminding ourselves that the commission has the function—not just an aspiration—enshrined in statute of securing the establishment and maintenance of public confidence in dealing with complaints and possible criminal offences or behaviour.
I support the Bill, as the Home Affairs Select Committee put it,
“for the pursuit of justice for the Hillsborough families and for the future effectiveness of the IPCC”.
Lord Alton of Liverpool
My Lords, the report published on 12 September by the Hillsborough Independent Panel, chaired by the right reverend Prelate the Bishop of Liverpool, meticulously examined every aspect of the disaster at the Hillsborough Stadium on 15 April 1989, in which 90 men, women and children lost their lives.
The right reverend Prelate, from whom we will hear shortly, and those who worked with him deserve our gratitude and wholehearted appreciation. Their report exposed a number of significant failures and associated shortcomings in the investigation that followed the disaster. The welcome Bill before us today emerged from their findings. I particularly thank the noble Lord, Lord Taylor of Holbeach, for the way in which he introduced the debate on what, as he said, is an exceptional Bill.
The Independent Panel’s report concluded that police and emergency services had made “strenuous attempts” to deflect the blame for the disaster on to fans. One hundred and sixty-four police statements had been altered, 116 of them to remove or change negative comments about the policing of the match. The report also said that 41 of the 96 who had died had had the “potential to survive”—grounds, certainly, for ordering new inquests.
Lives that were lost can never be brought back but it has given significant comfort to those personally affected by Hillsborough that Parliament has at last recognised that a terrible tragedy was compounded by injustice and falsification, as the noble Lord said. Flawed and delayed investigations do significant damage to delicate and crucial finely balanced police-public relationships, and this Bill is a recognition of that. The Bill—and the new inquests—will allow the Independent Police Complaints Commission to bring some solace to the families and their supporters, whose signal resolution and dignity have been exemplary.
Twenty-three years ago, one of my saddest duties as a Liverpool Member of Parliament was visiting families of those bereaved at Hillsborough. Several of my constituents had died, including a child. Another, Andrew Devine, then aged 22, was left in a persistent vegetative state. Andrew was caught in the crush, deprived of oxygen, and following the resultant brain damage his parents were told that he would die within months. Ever since, his extraordinary parents, Hilary and Stanley, have lovingly cared for Andrew, who emerged from his coma in 1994.
The deaths of 96 people and the long-term trauma were compounded by the infamous aftermath, which combined vilification and procrastination. Agony was piled upon agony with the insulting and wholly fallacious attempts to smear and blame the victims. They had, it was suggested, brought the calamity of Hillsborough on themselves. Thanks to the Independent Panel’s report, 23 years later that calumny has finally been laid to rest.
For me, however, the most shocking aspect of the tragedy has always been that it could have been averted and that it had been predicted. In the month before the match, a Liverpool fan who had witnessed an earlier game at Hillsborough told me that staging the semi-final at Hillsborough would be unsafe. Following that conversation, I wrote to the then Sports Minister, Colin—now the noble Lord—Moynihan, to express my concern. This correspondence is referred to in a parliamentary reply which appears in Hansard. In 1989, the Minister said:
“The hon. Member wrote to me on 22 March about the arrangements at the FA Cup semi-final at Hillsborough on 15 April. No other representation was received. The arrangements for the match will be among the matters to be considered by Lord Justice Taylor’s inquiry”.—[Official Report, Commons, 24/4/89; col. 414.]
So ground safety and ticket allocation at Hillsborough had been an issue before the game. Many of us were reassured that Lord Justice Taylor’s inquiry would examine why sufficient weight was not attached to those concerns, as well as examining the events of the day.
Although much-needed changes would subsequently be made to ground safety, Liverpool fans found themselves branded by Kelvin MacKenzie as liars—for which he has now unreservedly apologised. Acting, he said, on information given to him by the police, his newspaper alleged that drunkenness was to blame. At the time, I questioned Ministers in Parliament about the fans’ behaviour, asking the then Minister at the Home Office, Douglas Hogg,
“at what level the publication of statements on 18 April by South Yorkshire police concerning the conduct of Liverpool fans at the Hillsborough semi-cup final was authorised; if he will publish a copy of that statement and the name of the officer who made it; and if he will make a statement”.
He replied:
“Statements made by officers of the South Yorkshire police are a matter for the chief constable. It would not be helpful for me to publish statements or counter-statements which have been made about the circumstances leading to the tragedy, or to name those who made them. It is for Lord Justice Taylor’s inquiry to establish the facts”.—[Official Report, Commons, 24/4/89; col. 404.]
The names of the officers who gave the authorisation were not subsequently made known and the falsehoods were allowed to stand. Taylor did not establish the facts; nor did he discover the truth. It was left to the grieving families to demand answers and to insist that justice should be done.
As the years went by I made repeated requests for the legal cases to be reopened. In the House of Commons in June 1992, the Solicitor-General at the time, Sir Derek Spencer, responded that he would,
“take a decision on an outstanding formal application for consent under section 13 of the Coroners Act 1988 as soon as possible”.
“As soon as possible” is a phrase which has been used again and again since 1989.
In 1992 I asked the Minister if he had any understanding of,
“the sense of grief felt by many people, including my constituent Philip Hammond whose boy was tragically killed at Hillsborough, and their sense that no line can be drawn on the issue until every legal remedy has been exhausted?”.
I urged him to,
“assure the House that that announcement will not be long in coming and that he will try to understand the feelings of the relatives involved, who do not feel that the inquest process has been exhaustive”.
Twenty years ago, the then Solicitor-General replied that he was,
“conscious of the continuing grief and anxiety of the many individuals affected by that tragedy. For that reason, the decision must be carefully considered—and it will be. We shall make a decision as soon as possible”.—[Official Report, Commons, 15/6/92; col. 644-45.]
Three years had then elapsed since the tragedy—and a further 20 now. If we had acted in 1992, telling the coroner to reopen the cases, it would not now be possible to cite “the passage of time” as the reason why details of what occurred will not and cannot be accurately recalled. It is not just the passage of time that is shocking: it is our lamentable failure to provide justice— as the noble Lord, Lord Taylor, said in his remarks earlier—in a country which prides itself on the rule of law.
In 1998, in your Lordships’ House, I once again challenged the failure to re-examine the Hillsborough deaths and asked:
“What account the Home Secretary and Lord Justice Stuart-Smith”,
had taken,
“in deciding against a fresh inquiry into the Hillsborough tragedy, of missing video tapes, changed statements by police officers, conflicting medical evidence and complaints of lack of impartiality in the original coroner’s process and in the granting of immunity from prosecution to police officers upon taking early retirement”.
That was a point alluded to earlier by the noble Baroness, Lady Smith.
The then Minister, the late Lord Williams of Mostyn, replied:
“Lord Justice Stuart-Smith considered all the material evidence submitted to his scrutiny about the Hillsborough disaster. My right honourable friend the Home Secretary”—
Jack Straw—
“accepted his conclusion that there were no grounds for a fresh inquiry”.
The Minister told the House that,
“there was no new video evidence”,
and that,
“the only missing video tapes were two tapes stolen on the day of the disaster, which remain missing. They were not police tapes and the judge was satisfied that they would not have shown anything significant”.
He added that the Director of Public Prosecutions had considered whether police officers should be prosecuted,
“but concluded that no officer should face prosecution”,
and that because one officer had retired on ill health, it would,
“have been unfair to pursue what was, in essence, a joint charge against one officer only”.
Imagine if any of us here were involved in a bank robbery, a fraud, manslaughter or a conspiracy to pervert the course of justice. Would the police decide that because one of us had retired they would take no action against the other? That is simply implausible. It also raises a worrying question about the ability of the IPCC to question retired officers. Ministers, of course, have got it wrong before. In 1998, the Minister was clear that,
“allegations of irregularity and malpractice are not substantiated”,
and that it had been found that there were,
“no grounds to suggest that the original inquests were flawed or that complaints of bias against the Coroner were justified”.—[Official Report, 23/3/98; cols. WA 232-33.]
As the Prime Minister made clear in his Statement on 12 September, we now know otherwise and that allegations of irregularity and malpractice were indeed substantiated. Mr Cameron told Parliament that the Liverpool fans had “suffered a double injustice”, both in the,
“failure of the state to protect their loved ones and the indefensible wait to get to the truth”.
In offering a full apology, he also admonished those who had denigrated the deceased and suggested,
“that they were somehow at fault for their own deaths”.—[Official Report, Commons, 12/9/12; cols. 285-86.]
In October, the IPCC published its Decision in Response to the Report of the Hillsborough Independent Panel, which makes it clear that despite the fact that it does,
“not have investigative powers over all of the parties referred to in the report”,
its desire is,
“to go forward in the spirit of the Panel’s work, to seek to ensure that there is a coordinated approach”—
a point which the noble Baroness, Lady Hamwee, referred to—
“that can encompass all the issues, agencies and individuals involved, and which liaises closely with the families”.
We can all welcome that.
It would, however, be helpful if, arising out of the exchange of letters on 10 December and 4 December between the right honourable Damian Green MP and the All-Party Group on the Hillsborough Disaster and the chair of the IPCC, Dame Anne Owers—concerning the decision not to specify effective sanctions in this Bill—the Minister will clarify precisely what action will be taken if serving officers refuse to attend an interview with the IPCC if required to do so. Will he also list the documents which the IPCC says were not given to the right reverend Prelate’s panel and say who is now looking at them, why they were not given to the panel in the first place and whether they are going to be made public?
Last week, the Home Affairs Select Committee said that there should be safeguards for police officers interviewed by the IPCC. This would surely point to the use of interviewing under caution. Perhaps the Minister will say whether that procedure will indeed be invoked. The Home Secretary, the right honourable Theresa May, gave a commitment in the House of Commons that the IPCC would be given the powers and resources it needs to carry out its investigation “thoroughly, transparently and exhaustively”. Perhaps the Minister will tell us more about resources and how that work is to be expedited.
When the Prime Minister made his Statement in September the Attorney-General, the right honourable Dominic Grieve MP, said he would make a decision in the forthcoming two months about whether to apply to the High Court for the original verdict of accidental death to be quashed. Yesterday the Attorney-General said:
“My application has now been lodged with the court. It is my intention to appear to argue the case at the hearing that will take place in the High Court. I believe that the case for the High Court to quash the original inquests is a good one”.
What is envisaged as the timetable for those new inquests? In particular, on 27 November I asked the Government,
“what consideration they have given to the petition by Anne Williams”—
supported by 100,000 people—to accelerate the new inquest into the death of her 15 year-old son Kevin at Hillsborough,
“and what consideration they have given to fast-tracking the request on compassionate grounds”.
The Advocate-General for Scotland, the noble and learned Lord, Lord Wallace of Tankerness, replied:
“The Attorney-General is in the process of preparing an application to the High Court to quash the original inquests and order new inquests into the deaths of the victims of the Hillsborough disaster. The evidence which supports an application in respect of Kevin Williams is essentially the same as that which supports an application into the other deaths and the Attorney-General expects to be in a position to lodge the application in December”.—[Official Report, 27/11/12; WA 38.]
Sadly, what is not the same as in other cases is that Anne Williams has terminal cancer. I hope that the Attorney-General, whom the noble Lord, Lord Faulkner of Worcester—who is in his place and was himself present at the Hillsborough game—and I will see tomorrow, will ensure that Kevin’s new inquest will be given the highest priority so that it does not come too late for his grieving mother, Anne. Otherwise, one tragedy will be compounded by another. When he comes to reply, I hope that the Minister will be able to tell us the precise timetable which will be followed so that these new inquests will be held without delay, and whether the Lord Chief Justice is likely to make an announcement before Christmas.
Having taken 23 years to uncover the truth, the bereaved families and survivors have a right to expect that the investigations by the IPCC and the inquests are taken forward as expeditiously as possible. I am grateful to the Government for bringing forward the Bill, to the Prime Minister for acting so decisively and to the right reverend Prelate and his independent panel. This time, the words need to mean more than the ones previously uttered and, in seeking justice, our institutions need to examine how and why these tragic events were allowed to fester and to be covered up for so long.
The Lord Bishop of Liverpool
My Lords, I thank the Minister for the clarity of his exposition of the reasons why we need the two clauses in the Bill. It is a great privilege to be able to speak in today’s debate. With your Lordships’ agreement, I would like to take the opportunity to speak more generally about the Hillsborough tragedy and, in particular, about the work carried out by the Hillsborough Independent Panel. It was a humbling honour to be entrusted with the task of chairing the panel.
I also declare an interest. As the Home Secretary announced in another place on 22 October, she has asked me to act as her adviser on Hillsborough-related matters and I was happy to accept that invitation. She was particularly keen that the principles that the panel had established in terms of engagement and consultation with the families should not be lost. In this role, I am very aware of how the families of the 96 and the survivors are following closely the different judicial processes and are understandably anxious that the momentum established by the panel’s report is not lost.
The 1989 Hillsborough disaster was Britain’s worst sporting tragedy. Ninety-six men, women and children lost their lives, many were injured, and the effects of the tragedy have been felt by many more: the relatives of those who died; the survivors who experienced the horror in pens 3 and 4, or who were elsewhere in the ground on that day; and those members of the emergency services who helped the dying and the injured. There have been, over the years, a judicial inquiry, an inquest—at the time the longest-running inquest in English legal history—scrutiny of evidence carried out by a senior judge and a private prosecution. However, despite all these inquiries and investigations, the families have always felt that the truth about Hillsborough had never been told. Instead, they felt and believed that the truth had been obscured.
As Bishop of Liverpool, it became apparent to me that a deep wound continued to exist within the community and it was on the occasion of the 20th anniversary in 2009 that the anger and frustration that had built up over the years was vented at the then Secretary of State, Andy Burnham. I was present and presided over the act of remembrance, which was attended by more than 30,000 people. Mr Burnham was visibly moved by this outpouring of anger, and it was a great credit to him—for this, along with other noble Lords, I pay him huge tribute—that he went back to the Government and the idea of a full-document disclosure process was developed.
Discussions took place over the next few months within the Government involving a number of prominent MPs, including Maria Eagle and Derek Twigg. Representatives from the Hillsborough Family Support Group, the group that represents the largest number of bereaved families, were also involved in these discussions. I pay particular tribute today to the bereaved families for their strength, dignity and fortitude, and their persistence in pursuing the truth. Without that persistence, it is unlikely that the work of the panel would ever have taken place.
The Hillsborough Independent Panel was established in January 2010. I place on record my thanks to my fellow panel members for their dedication. Each of them brought to bear their unique knowledge and expertise in a quite remarkable and exemplary manner. I also put on record the debt of gratitude that I and all those associated with the panel owe to Ken Sutton and his team of civil servants who formed the secretariat. They are the finest example of the British Civil Service.
At the outset, we had defined terms of reference, and these established three broad objectives: to oversee the disclosure of the documents to the maximum possible degree, initially to the families; to report on our work, outlining the ways in which the information disclosed adds to the public understanding of the tragedy; and to make recommendations about a permanent Hillsborough archive.
The panel met for the first time on 4 February 2010. That meeting was significant. Rightly, it took place in Liverpool, and it was at the very start of the meeting that for the first time the panel met representatives of the three family groups: the Hillsborough Family Support Group, the Hillsborough Justice Campaign and Hope for Hillsborough. Meeting the family groups for the first time in this way and listening to their views provided the panel with a sense of unity and common purpose that endured throughout our work.
Enshrined in the panel’s terms of reference and central to its work was the need to consult the bereaved families. This we did. We also met with those families that were not part of one of the three representative groups. Perhaps I could add here that, during the panel’s work, the families said to me on more than one occasion that this was the first time in 20 years that they were being listened to and taken seriously. That sentiment has given me much cause for reflection on some of our judicial processes that, by contrast, seem to distance the very people whom they are intended to assist.
The scope of the disclosure process was significant and complex. It covered documentation held by central government, local government, other public agencies and some private bodies relating to the events of the Hillsborough tragedy and its aftermath. Spanning two decades, this necessarily included material that was produced before the tragedy occurred in 1989 and extended to 2000 and the private prosecution of former Chief Superintendent Duckenfield and Superintendent Murray.
The panel developed a system for cataloguing and archiving relevant material, based on the principle of maximum possible disclosure with minimal redaction. We identified a wide range of relevant organisations, and the process involved us reviewing more than 450,000 pages of material from 85 separate organisations and individuals. The material was subject to analysis and research so that it could be considered in the context of the panel’s report. Throughout, the panel has been guided by the fundamental principle of “families first”—in other words, the bereaved families would be first to see the report and the disclosed material. As chair of the panel, I am grateful to all who accepted that principle.
The panel’s report and the disclosed material were made available to the families on 12 September in Liverpool’s Anglican cathedral. This was a very moving occasion. Those of us on the panel and from the secretariat who were present felt privileged to be with the families on that day. The cathedral protected the dignity of the families, which had so often been at risk over the previous 20 years. It provided a safe place for them to hear and absorb what we knew would be for them traumatic information. It allowed them to regain their composure before being exposed to the world’s media, and above all, it did this within the sanctity of a sacred place where they could remember and honour the 96.
The disclosed documents show that multiple factors were responsible for the deaths of the 96 victims and that the fans were not the cause of the disaster. It is also clear from the documents that the seeds of the disaster were sown as early as 1981, when warnings went unheeded.
The disaster should never have happened. The deficiencies at the Leppings Lane end of Hillsborough, the end occupied by the Liverpool supporters, were well known. Overcrowding had occurred at the turnstiles in 1987 and on the terrace of the equivalent FA Cup semi-final match in 1988. The risks were known and the crush in 1989 was foreseeable.
The scope of responsibility for the tragedy extends well beyond the role of the South Yorkshire Police. From the documents provided to the panel, it is clear that the crush at the Leppings Lane turnstiles outside the stadium was not caused by fans arriving late for the kick-off. The turnstiles were inadequate to process the crowd safely and the rate of entry was insufficient to prevent a dangerous build-up outside the ground. The documents do not detract from the conclusion of the judicial inquiry at the time that there were police failures, but for the first time the documents reveal the extent of the shortcomings in the emergency response. The ambulance service’s failure fully to implement the emergency incident plan is thrown into sharp relief by the disclosed documents.
The panel’s report reveals that the medical evidence from pathologists, who had conducted post-mortem examinations on the deceased, was central in establishing a picture of a single, unvarying pattern of death within a few minutes of crushing. This evidence was the basis for the assertion by the coroner and others that the outcome was predetermined from an early stage for all who died. This in turn underpinned the imposition of the 3.15 pm cut-off on the generic inquest and the repeated assumption that the emergency services’ response could not have helped. The panel’s access to all the relevant documents has confirmed that the notion of a single, unvarying and rapid pattern of death in all cases is unsustainable. Lives could have been saved.
It is evident from the disclosed documents of the multiple investigations that, from the outset, South Yorkshire Police sought to establish a case emphasising exceptional levels of drunkenness and aggression among Liverpool fans, alleging that many arrived late at the stadium without tickets and determined to force entry. In seeking to make this case, South Yorkshire Police went as far as to vet the written statements made by its officers. Once vetted, changes were made. As we have already heard, the panel found that 164 statements were altered significantly. Of those, 116 were amended to remove content that was unfavourable to the police, including on its lack of leadership.
The final chapter of the panel’s report looks behind the media headlines to the origins, promotion and reproduction of unsubstantiated allegations. Drawing on papers provided to the panel by the Sun newspaper, the panel is able to explain the background to the stories that appeared in a number of papers at the time. The documents show the role played by a local news agency in Sheffield, but also the part played by a local MP and a number of police officers. I hope that whatever emerges as the result of Lord Justice Leveson’s inquiry will be tested against the experience of the Hillsborough families and survivors. Misrepresentation and distortion by the press can endure for a generation or more. The press should be accountable not just to its readers but to an independent body that inspires confidence that truth and justice will be the benchmarks of a free press.
The Government’s response to the panel’s report has been unequivocal. We have already heard from the Minister, and the Prime Minister spoke very powerfully and clearly for us all in the Statement in another place on 12 September when he acknowledged that the families had suffered what he described as “a double injustice”. He went on,
“the injustice of the appalling events—the failure of the state to protect their loved ones and the indefensible wait to get to the truth; and then the injustice of the denigration of the deceased—that they were somehow at fault for their own deaths”.—[Official Report, Commons, 12/9/12; cols. 285-86.]
The panel has been enormously encouraged by the cross-party consensus and by the overwhelming reaction of support to its report and publication of the disclosed material. It is right that the publication of the panel’s report and the disclosure of the material should now allow us to move from truth to justice, a phrase which was coined by the Prime Minister in his Statement and echoed in this House today, but justice, for me, is making sure that the various investigations that are now taking place—and they are to be welcomed—allow the law to take its proper course. The panel interrogated documents, not people. Organisations and people who may be the subject of allegations need now to be give the opportunity to respond in a proper manner, for justice is about process as well as outcomes.
There have already been speeches from the Government and Opposition Benches in support of the principles of this short Bill. I will therefore not add to them, other than to say that I welcome any proposal which takes forward the panel’s work in a correct and proper manner.
I think back to the day when it was announced that I would be chairing the Hillsborough Independent Panel. I was asked what I thought would be achieved by the disclosure of the documents. I replied, not knowing fully the impact of my words, “Truth has its own pressure”. That is an article of faith that I believe generally. In the context of Hillsborough, it is something that I now believe specifically, not least in the week that the Attorney-General has been persuaded by the disclosed documents to make application to the High Court to quash the inquests of the 96.
In conclusion, I am grateful to your Lordships’ House for allowing me the opportunity to speak more generally about Hillsborough and, in particular, about the work of the panel, its context, the content of its report and the consequences. Hillsborough was a national tragedy, and it is right that the events there and in the aftermath should never be forgotten. The names of the 96 victims of the tragedy are publicly remembered each year at the annual memorial service at Anfield but, as we have already heard, the families, friends and survivors have to live with what happened every day of their lives. The sad fact is that it has taken 23 years to get to the point we have reached today.
In the preface to the report, I quoted a 4th century north African Christian philosopher called Lactantius on his definition of justice. He wrote:
“The whole point of justice consists precisely in our providing for others through humanity what we provide for our own family through affection”.
If members of our family had died on 15 April 1989, we would not have wanted to wait 23 years until truth could call out for justice. If we can put ourselves into the shoes of the Hillsborough families, then the journey of justice must not now be a long and winding road. The families know that justice delayed is justice denied. The panel’s work is now complete; we owe it to the memory of the 96 to ensure that the next stage is done in a just and timely manner. In short, the journey from truth to justice must itself be just in order to deliver true justice for the 96.
Lord Wasserman
My Lords, had I known a few days ago that I would be speaking directly after the right reverend Prelate the Bishop of Liverpool, I might not have spent any time writing a speech of my own. I probably would simply have congratulated him on the magnificent way in which he led his team in a very difficult and painful task and suggested that we all remain silent for a few moments and think about what he said in his illuminating, thoughtful and very moving speech. However, I did not know until noon today that I would be speaking directly after him, and because I feel very strongly about these issues, I prepared some remarks of my own. I beg the indulgence of your Lordships’ House if I deliver them now.
A distinguished Member of your Lordships’ House—alas, no longer with us—is reported to have said, “A week is a long time in politics”. I was reminded of that comment when, over the weekend, I read the Hansard report of the consideration of this short Bill in another place last Wednesday afternoon. Reading those proceedings, I was struck not by the discussion of those horrendous events of 15 April 1989; these are seared in the memories of all of us old enough to have been around at that time. I was not even shocked by the references to how police officers on duty at the ground that day had mismanaged the tragedy once it had begun to unfold and thus unwittingly contributed to the toll of deaths and injuries. The pressure on those officers at that time is impossible for us, sitting in this place at this time, to comprehend fully. I, for one, am not prepared to pass judgment on their actions on this basis.
No, what shocked me about the debate in another place last Wednesday was the way in which one speaker after another, on both sides of the House, referred to how police officers had behaved in the subsequent investigation of the tragedy. There were endless references to officers as having lied, covered up the truth and obstructed the course of justice. Several Members referred—as did several noble Lords today—to the fact that 164 witness statements had been amended, 116 of which were changed in some way as to remove or lessen the culpability of police officers and others. As one Member described it, this was,
“deceit on a huge scale”.—[Official Report, Commons, 5/12/12; col. 935.]
It was this which shocked me. Here were Members of another place describing ordinary, English police officers as guilty of lying, obstructing justice and covering up the truth, and doing so without interruption, without apology and without shame.
Contrast that debate with the debate in your Lordships’ House on the Police Reform and Social Responsibility Bill on 27 April 2011. In our debate, less than 20 months ago, noble Lords were falling over each other to extol the international reputation of the British police service, particularly its reputation for integrity and professionalism. We were told that our police leaders are the envy of the world and the introduction of police and crime commissioners would put that reputation at risk, precisely because PCCs, directly elected by the people, were unlikely to adhere to the same high standards of personal and professional integrity that were the hallmarks of the British police officer. Indeed, we were warned that PCCs would facilitate, if not encourage, the growth of the culture of cover-up and corruption that would undermine the cherished integrity of our police service.
I have to admit that I, too, enthusiastically participated in that chorus of praise for the British chief officer of police. I went so far as to say that I believed that it was their,
“outstanding ability, unquestioned integrity, a high level of professionalism and a deep commitment to public service”,
which would keep us,
“safe from the sort of corruption dangers which other countries have faced and which some noble Lords have mentioned as one of the problems inherent in the Bill”.—[Official Report, 27/4/11; col. 209.]
How sentiments have changed since those words were spoken. I am not sure about a week being a long time in politics but to judge from this context 19 months certainly is long enough to effect a fundamental change in public opinion and, hence, in the political narrative.
Why has that happened? Why has the reputation of the British police service for integrity and professionalism taken such a knock in the past year or so? Why has our policing brand—undoubtedly the most respected in the world until so recently—become so tarnished so quickly, not only in this country but, thanks to the internet, all over the world? I fear that the explanation lies, sadly, with the behaviour of some of our police leaders themselves. No one who has ever even had the slightest interest in the work of the independent panel on the Hillsborough tragedy, which the right reverend Prelate led, can fail to be shocked by the behaviour of our police leaders in the aftermath of that event. One hundred and sixty-four witness statements were altered, 116 of them significantly, as part of a massive cover-up. What does that say about integrity and professional standards?
But the Hillsborough report, as shocking as it is, would not have produced the kind of reaction we heard in another place last week if it had been a one-off, isolated event, describing something that had occurred more than 20 years ago. No, I fear the truth is that the right reverend Prelate’s report triggered the kind of debate that took place last week in another place because it was not an isolated event. It triggered that reaction because it was simply the latest, if the most shocking, in a series of reports to have emerged in the past two years about corruption, cover-ups and collusion in our police service.
For most members of the public, the biggest shock came some 18 months earlier on Sunday 17 July 2011 when the media reported in screaming headlines that Britain’s top police officer, the Commissioner of the Metropolitan Police, had accepted a free five-week stay at a top health spa and that this had been justified by a Metropolitan Police spokesman by the fact that the managing director of the spa had been a friend of the commissioner. The very next day, my right honourable friend the Home Secretary, in an Oral Statement related only tangentially to the health spa story, added to the sense of public shock about police leadership by saying that allegations about phone hacking were,
“not, unfortunately, the only recent example of alleged corruption … in the police”.—[Official Report, 18/7/2011; col. 623.]
A few days later, the public learnt that both the Chief Constable and Deputy Chief Constable of Cleveland had been arrested in a dawn raid on suspicion of corruption. Four months later, on 13 December 2011, Her Majesty’s Inspectorate of Constabulary published a report following up the Home Secretary’s comments on phone hacking. Entitled Without Fear or Favour, the inspectorate’s own press notice described its findings as follows:
“Corruption not endemic in the police service—but police need more robust systems”.
If noble Lords can think of a better example of damning with faint praise, I would love to hear it.
And it does not end there. A story in the Guardian on 14 September 2012 began as follows:
“A crisis is brewing at the top of English policing after another chief constable was suspended on suspicion of serious misconduct”.
The report went on to say that this brought,
“the number of the country’s most senior officers who have faced or are facing disciplinary action or investigation by the police watchdog to nine. It is unprecedented for so many senior serving officers to be the focus of investigations at the same time”.
A month later, in October, we learnt that the chief constable who had been arrested in that dawn raid had been sacked for gross misconduct after a disciplinary panel found that he had lied to the IPCC and ordered a member of his own staff to lie to the IPCC. The IPCC described his actions as “shameful.”
Is it any wonder that Members of another place reacted so strongly when discussing this Bill and were so anxious to give the IPCC the powers that it needs to get to the truth about the Hillsborough tragedy? I am inclined to think that their reaction would have been very different two years ago. They probably would simply have suggested that this matter be followed up by ACPO. We must take the same robust stance. We owe it to the police service to save it from itself by helping it to restore its reputation for integrity and professionalism. We can help the police service best by sending it a clear message that we are prepared to provide the IPCC with whatever support it needs to do its work effectively. More importantly, we can help the police service best by sending a clear and unequivocal message to police officers at all levels that we expect them to put their own house in order as a matter of the greatest urgency and, to this end, we expect every serving police officer and other police staff to co-operate fully with the IPCC’s investigation. This does not mean simply showing up when summoned to do so; it means answering all questions put to them fully and truthfully.
As for retired police officers and staff who know something which could help the IPCC’s investigation, we should send a clear and simple message to them as well. Although the IPCC itself has not asked for legislation to compel you to attend interviews as witnesses, the reputation of the police service in which you served so proudly, and which served you so well, has been badly damaged. You can help to repair that damage and restore the reputation of the uniform you wore by coming forward voluntarily with any information which might help the IPCC to get to the truth.
The last thing the police service of this country needs at this time are headlines announcing that retired officers and staff have declined to help to get at the truth of the Hillsborough tragedy. This must not happen. I very much hope it will not.
Lord Falconer of Thoroton
My Lords, I declare an interest: I am acting, pro bono, for the Hillsborough Family Support Group, which includes members of over two-thirds of the families of the 96 people who died in the Hillsborough disaster. I apologise to the House that I am not able to attend the winding-up speech. I have apologised personally to the noble Lord, Lord Taylor of Holbeach, who has kindly urged me nevertheless to intervene in the debate.
I greatly appreciate the House having the opportunity to reflect on Hillsborough and to think about the way forward. The tragedy on 15 April 1989 was entirely foreseeable. The tragedy which befell the Liverpool supporters who came from all over the country that day was unspeakable and unimaginable for them and for the families of those who were injured or died. They could have expected the state, the organisations involved and the media to support them, and some did. However, elements in the state, in the organisations involved and in the media did not support them; instead, they vilified them without justification. They blamed Liverpool fans—both those who died and those who lived—for what happened in order to deflect blame from their own responsibility.
The inquiry by Sir Peter Taylor—later, Lord Taylor of Gosforth—rejected the police’s attempts to blame the fans and put the blame four-square on the police. However, as the right reverend Prelate has indicated, the inquiry gave no consideration to the role of the emergency services because it accepted the theory of a uniform and quick mode in relation to each of those who died, and, as a result of the right reverend Prelate’s commission, we now know that to be wrong. The inquests which followed saw the police seek to put the blame back on the fans in a way that Lord Taylor had rejected. The 3.15 pm cut-off meant that the truth was never investigated, let alone revealed. The courts and the judges subsequently did nothing to redress the balance in the years to come.
The families of those who died never gave up. Andy Burnham said in a debate in the other place in October:
“Those truths have been told only because of the sheer love of mothers, fathers, brothers and sisters … a love that provided strength when hope was lost and provided dignity in the face of provocation”.—[Official Report, Commons, 22/10/12; col. 795]
I thoroughly endorse those words. The resilience and courage of the Hillsborough families has led to the truth coming out and the cover-up being revealed. Their role and their achievement dwarfs all other contributions to the revelations that have come out in the past few weeks. They were supported by the people of Merseyside, who stuck with them through thick and thin when almost the rest of the country had abandoned them. The Merseyside MPs, whom it is invidious to name but I name five of them—Andy Burnham, Derek Twigg, Maria Eagle, Alison McGovern and Steve Rotherham—stuck with them throughout; the Liverpool Echo stuck with them throughout; David Conn of the Guardian stuck with them throughout; and Jimmy McGovern, who wrote and produced a drama-documentary which made a real difference, and Phil Scraton, who was on the bishop’s panel, stuck with them.
The role of the right reverend Prelate the Bishop of Liverpool has been stunning and fundamentally transforming of what has happened to the position of the families. He did not say it about himself but he should have: he listened when the state, the establishment and the other organisations involved stopped listening pretty soon after the Taylor inquiry. The bishop’s panel revealed that the families were right and the establishment was completely wrong in the way it had been addressing the matter.
The Prime Minister’s response on 12 September 2012 was conspicuous in its decency and leadership. It has been quoted on a number of occasions, but he unequivocally accepted the injustice that the families had suffered and he unequivocally apologised to the families for what the state had done. His attitude was incredibly important in making it absolutely clear that the families had been right.
What of the future? The Bill is helpful and we support it. I do not want to go into the detail of these issues but, in relation to what happens now as regards the investigations following Hillsborough, perhaps I may make the following points. First, the families have waited 23 years for justice. Many of the families did not discover how their loved ones had died until the bishop’s panel produced its report 23 years after the event, which is an appalling indictment on the institutions that should have been looking after those families. The consequence of that 23-year wait is that the state should do everything that it reasonably can to ensure that the criminal investigation, any prosecutions that follow and the process of any inquest—if the High Court agrees to it—take place as quickly as reasonably possible.
Secondly, it would appear that more than one body will be involved in the criminal investigations. By that, I mean the IPCC and the police. It is imperative that those investigations should be properly integrated. It would be intolerable if any sort of disagreement between the bodies involved led to anything short of complete integration or any repetition and unnecessary duplication in the investigations that take place.
Thirdly, the work of the panel provides an incredibly good route map for the investigation. There is no doubt, as the right reverend Prelate the Bishop of Liverpool acknowledged, that there is a need for further investigation, but the investigation now knows so much more about what happened than any other normal police investigation. Build on it, do not reinvent the wheel and use it as a route map.
Fourthly, it is important to make sure that all the investigations that take place and any subsequent prosecutions are properly resourced. I know from my own experience within government that properly resourced investigations are incredibly effective and focused. In the past 15 years, we have seen investigations take place in relation to particularly heinous crimes. This can happen in this case. Resources are important.
Fifthly—again, I pick up a point made by the right reverend Prelate—it is important to consult the families throughout the investigation and the processes. The families have said directly to the Home Secretary, who was sympathetic and incredibly decent in her response—and they said it in my presence—that trust has to be earned back in the light of what has happened. Regaining that trust will be greatly assisted by consulting the families and discovering what their wishes are—not to compromise independence but to ensure that their views are taken into account.
Sixthly, it is necessary to build into the process something that does not deprive the investigation and the prosecution of their independence but makes sure that the process has drive and momentum, even when the searchlight of publicity has moved on.
Finally, from beginning to end, until 12 September, this has been a series of processes whereby the state and other bodies have failed—and have failed the families and the people they were supposed to serve—including the football authorities, the football grounds involved, the media, the police, the emergency services, the prosecution authorities, the judges and the coroner’s court. They have all been found wanting, as the panel’s report strongly indicates. What happens now is an opportunity for those bodies to prove that they have learnt the lessons of Hillsborough. In a sense, for the past 23 years it is the people who were at the game who have been on trial. Now it is the bodies that let them down that are on trial. I hope they can prove that they are worthy of the trust that the country should be able to have in them.
Lord Rennard
In this excellent and emotive debate, I wish to speak briefly as someone who is very proud to have been born and brought up in the city of Liverpool. My church was Holy Trinity, Wavertree, and I remember being confirmed there by the then Bishop of Warrington who used three words as the theme of his sermon that day: love, faith and courage. He was a clever bishop because he knew that many of us would remember “love”, “faith” and “courage”, spelt out by the initials LFC, our football team. It is love, faith and courage that the families and friends of the victims in 1989 have shown these twenty-three and a half years.
Liverpool people are generally proud of our city, but they are aware, too, of prejudices held against it by some who know little about it, its people and its culture. I am sure that I am not alone in fearing that elements of prejudice against the city contributed to the terrible events at Hillsborough—the false allegations that were made in some newspapers and the cover up of responsibility for 96 deaths that persisted for 23 years. Questions are still being asked. How can it have taken 23 years to get to this point? Why have police officers in the past not been compelled to give evidence in such cases until now? Is it right that evidence about the death of 96 people cannot necessarily be taken, even with these proposals, from people who have retired or resigned from the police?
People in Liverpool and across the country are right to ask why previous Governments did not act more decisively to ensure that the truth that was well known in Liverpool was made more widely known nationally? This Bill is necessary. It will help to bring about the justice sought by the families and friends of the victims over almost a quarter of a century. The families of the victims have shown great resolve and determination in the face of much opposition to exposing the truth. They lost loved ones, and saw those whom they lost blamed unfairly for what went wrong. But because of their dignified, brave and consistent commitment to the cause of justice for the 96, they are finally beginning to get answers. They are all grateful, I know, to all those who helped to establish the truth by serving on the panel led so effectively by the right reverend Prelate the Bishop of Liverpool.
The report of the Hillsborough Independent Panel has been universally accepted, although some of those responsible for the defamation of those who died have yet to accept any proper responsibility for what they said and did at the time. Some of those who colluded in decisions not to let the truth emerge have yet to explain themselves. There is now widespread agreement in all the major parties that confidence and trust in the police needs to be restored by looking carefully at all the issues surrounding how we police the police. This Bill goes some way towards addressing that question and from these Benches I am very pleased to support it.
Lord Dear
My Lords, it is my privilege to try to record some new facts in this debate and perhaps to balance some of the comments that have been made today—indeed, some of the rhetoric that has been employed—and particularly to answer, if I can, some of the questions posed by the noble Lord, Lord Alton of Liverpool.
As we have heard, the disaster at the Hillsborough Stadium occurred on Saturday 15 April 1989. The following day, I was asked to support Lord Taylor in the investigation of the causes of that terrible event. I was then chief constable of the West Midlands Police, which, I might add, is the largest police force in England and Wales, outside London. I met Lord Taylor in Sheffield on Tuesday 18 April and he expressed his wish to begin to take evidence in public within three weeks of the disaster. We discussed what would be involved to meet that three-week timescale; a timescale that had never before been attempted in circumstances of that magnitude and, I believe, has never been attempted since. Even with the 440 police officers that I was able to deploy to that inquiry, it was obvious to both of us that some extraordinary measures would have to be taken if we were going to work to that timescale. To speed the process, he directed that we should request South Yorkshire Police to arrange for police officers who were witnesses to the disaster to write their own statements and that their force would produce them for the inquiry. On that point, more later. I should also say that the procedure did not relate to the half dozen or so officers who would later be interviewed by my team to explore whether criminal charges should be brought against them personally.
To make the position clear, those decisions regarding the process concerning South Yorkshire officers and those timescales were his. I agreed with them and since his death in 1996, in post as Lord Chief Justice, I am happy to assume full responsibility for that decision. He was required to report, if possible, before the start of the next football season; speed therefore was of the essence. We concluded together this unusual approach hardly mattered. What did matter was that witnesses should be examined in a public inquiry as soon as possible, while memories were still fresh, and it was what they said in that inquiry that mattered, not what was or was not included in their witness statements.
Working to that timescale the West Midlands team, as you might conclude, faced a mammoth task. That investigation commenced six days after the disaster on 24 April. Special police offices were established in Sheffield, Liverpool and Birmingham. A free-phone telephone number was advertised and operated on no fewer than 28 different lines, all of them manned around the clock. They received 2,666 calls. Witnesses who were interviewed and had statements taken totalled 3,777. Many of my officers who were involved in those interviews were deeply emotionally affected. We have heard of the anguish, shock and horror of those in Liverpool who were caught up in this tragedy and this affected those officers as well. Some 3,777 statements were taken and 71 hours of CCTV footage were examined in detail. An inquiry into possible criminal charges was commenced. Most of that took place in only three weeks.
Lord Taylor began to take evidence in public exactly four weeks after the disaster occurred. He sat for 31 long days and examined 174 witnesses. Only three and a half months after the disaster, he published his report on 1 August. He had many conclusions but his major ones fell into three categories. First, he found there were a number of causes for the disaster. The right reverend Prelate the Bishop of Liverpool has already referred to the fact that there were serious misgivings from as early as 1981 and Lord Taylor reported on that and what had been done—and indeed not done—in the interim period. He was adamant, however, that the final and most serious cause of the disaster was the failure of South Yorkshire Police to control the crowd and to ensure its safety. Secondly, he looked at the conduct of the crowd and found there were a few very isolated examples of drunkenness, but there was absolutely no evidence that Liverpool fans had contributed in any way to what had occurred on the terraces. Thirdly, bearing in mind what we are debating today, he found that the oral evidence given by 65 South Yorkshire police officers impressed for the most part in inverse proportion to their rank. As he said, with some notable exceptions the senior officers were defensive and evasive witnesses, and did not, as he put it, show the qualities of leadership to be expected of their rank.
In particular, in his report at paragraph 285, he said:
“It is a matter of regret that at the hearing, and in their submissions, the South Yorkshire Police were not prepared to concede they were in any respect at fault in what happened”.
He continued:
“The police case was to blame the fans for being late and drunk, and to blame the Club for failing to monitor the pens”.
He concluded:
“Such an unrealistic approach gives cause for anxiety as to whether lessons have been learnt. It would have been more seemly and encouraging for the future if responsibility had been faced”.
Finally, both he and the Football Supporters’ Association warmly praised West Midlands Police for the way in which the evidence had been gathered and presented at the inquiry.
So it seems a little strange, and not a little disappointing, that the hugely excellent report recently published by the right reverend Prelate the Bishop of Liverpool has been hailed as the report that finally exposed the truth when it roundly endorsed and mirrored the findings of the Taylor inquiry. It perhaps begs the question that some of the language used by the Prime Minister and others that this has finally produced justice ought to reflect the fact that Lord Taylor got to the truth 23 years earlier.
It might also reflect on the fact that Lord Taylor informally expressed serious doubts to the coroner about the coroner’s plans to limit his inquest by employing the 3.15 pm cut-off; and also that he did not agree with the coroner’s intention to have witness statements read in the inquest which effectively denied opportunity for cross-examination. He was unable to influence the course of that subsequent process, which was out of his hands, and it did not begin until several months later.
The truth was first made public by the Taylor report in 1986. As we have heard, the waters were muddied considerably, more and more with the passage of time. Immediately the Taylor report was published, the South Yorkshire Police went public—on to the attack, if you like—with a condemnation of the conclusions and stoutly maintained that the police were in the right and the Liverpool fans were in the wrong. The inquiry that will be eventually mounted by the IPCC will of course examine this aspect in detail, and especially whether attempts were made by South Yorkshire Police wrongly to attribute blame. The Bill seeks to facilitate that inquiry. I hope that we shall not have to wait too long for the results.
By common consent, Peter Taylor was a man of rare talent. Noble Lords will understand already that I held him in high regard and respect. He was prepared to move fast to expose the truth. His report employed elegant and economical prose and it managed to cover the ground in only 71 pages. It was published a mere three and a half months after the disaster with firm, clear, unequivocal conclusions. That is exactly the same passage of time that has elapsed since the publication of the report of the right reverend Prelate the Bishop of Liverpool, and the IPCC is still scoping its inquiry and deciding on how it might begin to progress. I do not want to appear unduly critical, but I hope that we shall not have to wait too much longer for action.
On the Bill, perhaps the question at the forefront of the minds of many of us is: do hard cases make bad law? Nothing could be a harder case than the tragedy of Hillsborough. Is the Bill bad law? In some ways I think it is. The loophole that the Bill seeks to block by requiring serving police officers to attend for interview has been a small but recurring problem for investigators, on and off, for years, so why use emergency procedures to rush it through now? After all, that power will not much assist the Hillsborough inquiry by the IPCC because most of those it may wish to interview, as we have heard already, will no longer be serving. Mostly they are retired; in some cases, they are dead.
The power to require retired officers to attend interview is not sought, although one hopes that those who are approached will co-operate—and I fully concur with what has been said. Certainly I shall, if evidence is ever sought from me.
I am not sure whether Clause 2—the application of Part 2 of the Police Reform Act 2002 to old cases—breaches rules of double jeopardy. In particular, at this stage or shortly after, there have to be safeguards in place for police officers interviewed by the IPCC. The practice of sometimes interviewing an officer as a witness without first cautioning him, then using that witness statement against him in later criminal proceedings, has to change. Interviewing under caution is standard procedure for non-police officers and should be a protection afforded to the police as well. I endorse the recommendation of the Home Office Select Committee and believe that the IPCC should employ a more rigorous interpretation of the threshold set out in the Police Reform Act to ensure that it becomes the norm that officers are interviewed under caution in the most serious cases.
This is certainly a Bill in a hurry. Usually I would resist it on that ground alone, seeking more time and due process to consider the issues in depth. But having stood here and praised the approach of Lord Taylor, who identified the truth in double-quick time, I can hardly complain at another attempt to speed up the investigative process, when so much time has been wasted over the last 20 years or so chasing irrelevancies or trying to find a way through a fog of half truths and worse. So great is the public interest in Hillsborough for understandable reasons, and so important is it that this issue should be dealt with once and for all that, with some jurisprudential reservations, I support the Bill.
Lord Blair of Boughton
My Lords, I need to start by saying that I fully support the Bill. However, I have two caveats that I have already outlined to the Minister and to which I hope he will respond in a while. In asking the Minister about these two matters, I am not trying to weaken the Bill but to strengthen it. Put simply, it would be helpful if this House was to demonstrate that it understands that police officers themselves need to believe in the provisions of the Bill. They will best do that if they believe that the provisions are fair.
I was not at Hillsborough; I was not involved in Hillsborough; but I have no illusions about it. I am on record recently as describing in the Times what happened at Hillsborough as appearing,
“to be the most egregious example of deliberate dissimulation in the history of the British police”.
When I read the right reverend Prelate’s report, I felt thoroughly ashamed of my profession. So, like all noble Lords, I wish the IPCC and the future coroner well with all their efforts. I have no illusions about Hillsborough.
However, it is vital to remember that although the Bill is occasioned by Hillsborough and the tragedy and failures there, it is not only about Hillsborough. Until and unless these provisions are repealed, they will provide powers to the IPCC and other organisations working under IPCC supervision that will cover all their investigations now and in future. I need to declare a rather unusual interest: I think I am safe to believe that I am the only Member of your Lordships’ House who has been interviewed by the IPCC as a witness. I have a personal duty to try to help get this matter right for the future. I shall say something briefly about both clauses.
I do not think that there are any noble Lords with a military background currently in the Chamber but if there were, they would recognise something that I am about to say. Servicemen and women are always uneasy at being interviewed by military police. It is the same for serving police officers when faced with people investigating complaints against the police. The powers in Clause 1 compel serving officers to attend as witnesses. We seriously need to distinguish between witnesses and suspects. I am not sure that I agree with the noble Lord, Lord Dear, about strengthening the idea of cautioning all police witnesses. Remember that all police witnesses if cautioned will be told, “You are not obliged to say anything”. We want them to feel obliged to say something, so we have to distinguish between witnesses and suspects.
Lord Blair of Boughton
I am grateful to the noble Lord. What I took him to be saying was that all police witnesses in serious cases should be interviewed under caution. Perhaps we can agree to get the definition of that right.
If we are talking about witnesses, it would be extremely unlikely that the Police Federation or any other representative body would be able to provide detailed legal advice to those officers, let alone a lawyer, so they will be going into the interview room accompanied only by a friend. We need to dispel the kind of uneasiness that they will be feeling. My suggestion to the Minister is that, when closing the debate, he makes clear his expectation that police officers being interviewed as witnesses by the IPCC investigators should be given the maximum disclosure of information—that is what proposed new Section 19F(3)(c) should mean.
In no way should a compelled witness have any cause to fear, as he or she enters the interview room, that he or she will be tricked. These are witnesses, not suspects. If they are suspects, they have to be treated differently. If they are witnesses, they must be treated with obvious and visible fairness. Whatever happened at Hillsborough, the men and women now serving in the police service deserve no less than that.
I entirely agree with the purpose of Clause 2. However, some IPCC investigations and those by its predecessor body can be—and have been—very long. Careers are put on hold and the pressure of such an investigation can sit at the back of the mind month after month, year after year. When, after such a long time, the investigation is finished and an officer is exonerated—if he or she is—they are largely entitled to expect that that is and will remain the end of the matter.
I therefore ask the Minister to make clear his expectations of the IPCC that the words “exceptional circumstances” in proposed new Section 28A(1), in relation to opening a closed inquiry, not only mean what they say but refer only to circumstances in which new evidence appears to have arisen or the level of public concern makes it imperative for the case to be reopened. Cases should not be reopened capriciously nor for political advantage. It is not enough for the Minister to emphasise that it is important that IPCC resources are not to be misused in this way. The majority of officers in England and Wales deserve no less than a statement today that fairness to officers is also a consideration.
Putting it bluntly, a police officer—like any other free citizen—has the right to refuse to assist the police in an investigation, but I also believe that any police officer who does so should forfeit the right to be a police officer. I want all police officers to believe that full compliance with the inquiry is their professional duty and I want their predecessors, now retired, to believe that their pride in their previous profession should also make them want to assist the inquiry. To do that, we should try to ensure that the working practices of the IPCC, outlined in this Bill, make fairness clear and obvious. I look forward to hearing the Minister’s response.
Lord Taylor of Holbeach
My Lords, we are privileged to sit in this House and have been privileged today to have had the opportunity to participate in this debate. We have heard some impassioned and authoritative speeches, which have helped this House to consider this Bill, as it should do, in the proper context in which the Government have brought it forward.
I think that all noble Lords will have been emotionally touched by the speech of the right reverend Prelate the Bishop of Liverpool. The work that he has done in trying to build a bridge between the authorities and the families has been remarkable. In a way, this is a story of the failure of the establishment to properly engage with the families, to understand the distress of those who suffered loss or were injured or, indeed, those who were just at the match on the day. I hope that we can all help remedy that by our contributions here today.
I think that I can reassure noble Lords that this Bill has been brought to the House with the purpose of expediting truth and justice on this issue. I do not pretend that it can be easy; we have seen from the history of this matter that it is easy for people to make mistakes. Clearly, however, the investigatory role of the IPCC and of the police will be essential in clearing up the fog and mystery of misinformation and in providing clarity for the future.
There have been a number of speeches. I will start with the comments made by the noble Baroness, Lady Smith of Basildon. Indeed, many of her remarks were echoed by the noble Lord, Lord Alton, in his contribution. I readily understand the concern about what happens if officers attend but do not co-operate. There is a power to compel officers to attend if it is a matter of criminal investigation. If it is a question of witness, however, there are limits to the way in which legislation can achieve this objective, as I think the Government have acknowledged. But we are seeking to do that. Compelling witnesses to speak would be an unusual power to bring into a Bill of this nature. I hope that noble Lords will accept that we do not consider it to be appropriate.
However, I said in my opening address that people who volunteer to appear would want to help this process. There is a responsibility on all of us. When he gave evidence at the Home Affairs Select Committee on November 27, Chief Constable Mike Cunningham said that where a police officer attended but refused to answer questions, he would have to consider whether the officer’s employment should continue. This sent a strong signal of how seriously non-co-operation would be taken by the chief constable. I believe that the noble Lord, Lord Blair, said that he agreed that that was the right approach.
The noble Baroness, Lady Smith, also asked whether we would be issuing guidelines to chief officers to ensure that all forces treated refusal to attend interview in the same way. We have already committed to considering whether the existing conduct regulations should be amended or made clearer in this area, and whether misconduct sanctions should apply where an officer refuses to attend an interview as a witness. If we were to make such changes, we would also amend the relevant guidelines relating to the regulations to effect these changes.
The noble Baroness, Lady Smith, also asked about where retired officers may be suspects. I can confirm that any officer, whether serving or retired—or, indeed, an officer who retires part-way through an investigation —can continue to be investigated for criminal or misconduct matters. Officers can be compelled to attend an interview if they are a suspect. The noble Baroness asked also whether, when officers seek early retirement, their application will be considered if this prevents them from appearing as a witness before the IPCC.
It would not be appropriate to stop an officer from retiring who had been called as a witness, not as a suspect. However, the IPCC can investigate retired or resigned officers for criminal and misconduct matters, as it can with serving officers. Therefore, the IPCC will no doubt call retired officers to provide evidence during its investigation into Hillsborough, and I believe that in the vast majority of cases these retired officers will understand the importance of this investigation and attend willingly. If the police had reason to suppose that someone was retiring in order to avoid appearing, they may well consider that as suspect behaviour. However, that would be for the police to decide, not for us or the Bill.
The noble Baroness also asked, with regard to Clause 2, about the IPCC reopening cases where there is a powerful public interest. I know that the noble Lord, Lord Blair, is also concerned about what is meant by “public interest”. If I may disentangle the semantics, public interest in terms of popular interest is of course different from public interest as seen by the Government or by the IPCC itself. It is the IPCC that will determine where the public interest lies, and that is not measured by populist interest. I hope that I have made that clear; I think that I have a clear understanding of the interest.
The “exceptional circumstances” bar means what it says. They will be only cases where exceptional circumstances are involved; indeed, one of those exceptional circumstances is where the discovery of new evidence of high significance could then lead to a case being legitimately reopened. However, the purpose of this legislation is to deal with the particular instance which we have been debating today.
It was interesting to hear from the noble Lord, Lord Alton, who was a Liverpool Member of Parliament and able to talk about the incident as it appeared to someone representing the people of Liverpool. On the discovery of documents, I can confirm that the documents which will be available to the IPCC as part of its investigation will include some which were not available to the panel, because they were discovered after the panel had reported. It is clearly essential that every document is available to those taking forward the investigation. I assure noble Lords that that will happen, so fresh discovery will reinforce the IPCC investigations.
The noble Lord, Lord Alton, asked whether witness interviews will be given to the IPCC under caution. That question was repeated by the noble Lord, Lord Blair. I should make it plain that the police issue a caution to those whom they wish to interview because they are suspected of having committed a criminal offence and therefore may be charged. However, we would not therefore expect anybody providing evidence as a witness to be so cautioned. I think that that is the only way in which I can answer that question.
As many noble Lords have pointed out, the Attorney-General has secured a hearing on the question of reopening the inquests. That was applied for yesterday but it is up to the courts to consider that application. We must not prejudge the outcome of this legal process and even if the Attorney-General’s application were successful, it would be for the coroner to decide how to conduct the inquest. Again, this is an independent, statutory role which the Government cannot interfere in. I am sure that all those involved will recognise the need to expedite this process. Public opinion, the pressure for the truth, will drive this through.
I appreciate that it was not possible for the noble and learned Lord, Lord Falconer of Thoroton, to stay until this point, but I shall answer his question about integration. Clearly, we are dealing with different authorities with different responsibilities, but they have a shared responsibility for providing reconciliation and truth in this matter, and, indeed, justice. The IPCC, the Director of Public Prosecutions, the Attorney-General and the coroner will all work together and the Government will work with them to ensure that they work effectively to provide an outcome. The imperative for this is understood by the Government.
The noble Lord, Lord Blair, asked about disclosure. I can be clear that disclosure of information in relation to an interview by the IPCC, or, indeed, decisions as to how to conduct that investigation, are solely a matter for the IPCC, as the independent body with oversight over the police complaints system. Given that it has that independence, it would be inappropriate for Ministers or the Government to interfere or direct the commission on any aspect of the interview process or the investigation. I hope that that helps the noble Lord, although it does not provide him with an answer. I think that we have dealt with the question of the reopening of the inquiry.
I hope that I have answered most questions; it is quite probable, given the contributions that have been made, that I have not answered them all. I will be happy to write to noble Lords on the detail but our task today is to consider the Bill. We have had an excellent Second Reading; it is an important Bill to take forward reconsideration of the way the establishment dealt with the Hillsborough disaster in the first instance and an opportunity for Parliament, at least, to play its part in addressing this issue.
Arrangement of Business
(12 years ago)
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Baroness Stowell of Beeston
My Lords, as noble Lords will see from the Order Paper, provision has been made for a short delay between Second Reading and the remaining stages of the Police (Complaints and Conduct) Bill. The Public Bill Office has not yet received any amendments for the Bill’s Committee stage but will accept any amendment tabled within the next 30 minutes—that is, until 6.38 pm. The House will return to the Bill when the Statement and the QSD have concluded—I suggest that that will be not before 7.38 pm—either to go into Committee if amendments have been tabled or to take the remaining stages formally if not.
Northern Ireland: Recent Events
(12 years ago)
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The Parliamentary Under-Secretary of State, Wales Office (Baroness Randerson)
My Lords, with the leave of the House, I shall now repeat the Statement made earlier today in another place by my right honourable friend the Secretary of State for Northern Ireland on events in Northern Ireland.
“I would like to make a Statement about events in Northern Ireland over recent days. Over the past week, a series of protests has taken place relating to the decision taken by Belfast City Council on the flying of the union flag. A number of these have witnessed violence, rioting and attacks on police officers. Yesterday evening a masked gang threw a petrol bomb inside an unmarked police car; a young policewoman narrowly escaped very serious injury. This is now being treated by police as attempted murder.
As I made clear in the House last Wednesday, there can be absolutely no excuse or justification for this kind of thuggish and lawless behaviour. It is despicable. We condemn it unreservedly and it must stop immediately.
I welcome the Motion passed unanimously yesterday in the Northern Ireland Assembly, which unequivocally condemned,
‘rioting and the campaign of intimidation, harassment and violent attacks on elected representatives’,
and reaffirmed,
‘the absolute and unconditional commitment of all its Members to respecting and upholding the rule of law and the pursuit of their political objectives by purely legal and political means’.
Let us be very clear. No one can be in any doubt about the Government’s support for the Union and its flag, but the people engaged in the kind of violence that we have seen in the past few days are not defending the Union flag. There is nothing remotely British about what they are doing; they are dishonouring and shaming the flag of our country with this lawless and violent activity. They discredit the cause that they claim to support. They are also doing untold damage to hard-pressed traders in the run-up to Christmas, and they undermine those who are working tirelessly, day in and day out, to promote Northern Ireland to bring about investment, jobs and prosperity.
In addition to outbreaks of violence, appalling threats have been made against elected politicians, including a death threat to the honourable Member for East Belfast. I know that the whole House will join me in expressing our complete solidarity with the honourable lady, her colleagues in the Alliance Party and all the people who have been threatened and intimidated over the past week by this disgraceful conduct. The right of elected representatives to go about their daily business without the threat or fear of intimidation is one of the hallmarks of our democracy, and these threats are nothing less than an attack on democracy in this country.
Throughout this crisis I have stayed in close contact with the chief constable of Northern Ireland. Thirty-two police officers have been injured in the line of duty during the past week, and I take this opportunity to pay the warmest tribute to the brave men and women of the Police Service of Northern Ireland, who once again find themselves in the front line encountering and tackling violence. They have shown themselves again to be fearless guardians of the rule of law, whenever and from wherever it comes under attack.
I received another update from the chief constable this morning. He informed me that around 38 people have now been charged in relation to this disorder. Those who are engaged in violence should be in no doubt of the determination of the chief constable and the PSNI to apply the full force of the law. Those engaged in violence should be well aware of that fact.
I have also discussed with the chief constable the threats to elected politicians. Again, I am in no doubt as to the extreme seriousness that Matt Baggott, like the rest of us, attaches to those unacceptable threats. I assure the House that the PSNI is doing all that it can to enable elected politicians to carry out their duties and serve their constituents.
For our part, the UK Government will continue to give our fullest backing to the PSNI. That is why, in the face of the deteriorating security situation that we inherited, the Government secured an exceptional additional £200 million from the Treasury reserve. We will continue to do all that we can to assist the chief constable in keeping the people of Northern Ireland safe and secure, whether from so-called dissidents or from those responsible for this week’s events.
Yet responsibility for solving the underlying issues that have led to the violence does not rest solely with the police or the UK Government. It is right that local politicians in Northern Ireland take the lead in trying to reach agreement on a way forward. In tackling these issues, I believe that everybody has a responsibility to consider very carefully the impact of their words and deeds on wider community relations.
Once again, the trouble that we have seen in Belfast and elsewhere underlines the urgent necessity of working towards a genuinely shared future for all the people of Northern Ireland. We have made it clear that, where the Executive take the difficult decisions needed to deliver that, they will have the Government’s full backing. It would be a huge lost opportunity if Northern Ireland politics were to continue to be defined by questions of identity. There is a pressing need to focus on the wider issues of the economy, jobs and delivery. The scenes of the past few days have been deplorable, but we should not let them detract from the positive progress that Northern Ireland has made in recent years.
That was highlighted last Friday by the visit to Belfast of the US Secretary of State, Hillary Clinton. She rightly pointed to the many difficult decisions taken by local politicians and the leadership that they have shown in bringing us to where we are today. I am sure that those politicians will not allow the achievements that have been made to be undermined by lawless violence of the kind that we have seen over the past week. I am also sure that this House will remain united in support of their efforts to move the peace process further forward towards a genuinely shared future for all in Northern Ireland”.
My Lords, that concludes the Statement.
Lord McAvoy
My Lords, I thank the Minister for repeating the Secretary of State’s Statement in the House of Commons and I also thank my honourable friend Vernon Coaker for initiating this Statement. I shall now repeat the response made by Vernon Coaker in the other place.
“Mr Speaker, can I thank the Secretary of State for coming to the House to make this Statement and for advance sight of it? Let me say why I and the Opposition called on her to do so. There have been eight consecutive nights of violence in Northern Ireland. A Member of this House has had her life threatened and her Alliance Party has seen its representatives intimidated and subjected to violence, and its property attacked.
Violence against the police has escalated, to the extent that an attempt was made to murder a female officer last night by breaking the window of a police car and throwing a petrol bomb inside while she was still in the vehicle. Dozens of officers have been injured after coming under sustained attack over the course of the week. Another murderous attack on the police was only narrowly avoided when a vehicle carrying a rocket was apprehended outside Derry. It cannot go on and Westminster’s voice must be heard. This violence would not be tolerated in London, Cardiff or Edinburgh, and it should not be tolerated in Belfast. A clear and strong message must be sent from this place today that says that this violence is wrong, unacceptable and without justification.
Once again I pay tribute to the Police Service of Northern Ireland for its dedication and bravery. I spoke earlier to the Justice Minister, whom I also met a few days ago in Belfast. What discussions has the Secretary of State had with him and the chief constable about resources and the police’s capacity to deal with this disorder and the continuing national security threat? What is the latest security assessment?
The homes of public representatives have been vandalised and attacked. Local councillors, who are doing their best on behalf of the communities that they serve, and their families have seen their homes targeted and vandalised. I am sure that I speak for the whole House when I say that whether we are talking about a DUP councillor in Dungannon, two Alliance councillors and their families in Bangor, or the husband of a Sinn Fein councillor in Armagh, such violence is wrong and must stop. I stand shoulder to shoulder with public representatives in Northern Ireland for democracy and against violence. When a Member of Parliament is threatened and attacked, I view it as a threat and an attack on all of us and everything we stand for.
Will the Secretary of State tell me what assessment she has made of the involvement of loyalist paramilitaries in the rioting? Does she view their actions as a threat to national security? What discussions has she had with the Prime Minister about this? Has he discussed the ongoing violence with the First Minister and the Deputy First Minister or the Justice Minister?
I know that there are underlying issues, and I am realistic about the challenges we face. I have been with unionist and loyalist political representatives to visit areas in Belfast and other parts of Northern Ireland, and I want to say this: honourable Members and others from Northern Ireland are doing a really difficult job in these communities, and I do not doubt their sincerity, integrity or hard work. They are dealing with frustration and anger, and they need support in helping to channel that away from violence and towards politics. I will do what I can to help, and I make that offer in republican and nationalist communities, too, but violence is never justified and it is wrong. It is damaging those communities and, until the violence stops, we cannot even begin to discuss or do anything about the longer-term issues that need to be resolved. What discussions has the Secretary of State had with political representatives about supporting work in these communities? Will she bring political leaders together to see what can be done together?
I care deeply about Northern Ireland and its people, and I know the Secretary of State and all other honourable Members do too. I think it was important today that we came together as the United Kingdom House of Commons and said that. Northern Ireland matters; it is important. I hope that we see this awful violence ended and that we can look forward to a 2013 in which Northern Ireland is showcased on the world stage as the great place it is”.
Baroness Randerson
I thank the noble Lord for his response. The key point he made, which was also made in the other place, was that we would not tolerate this kind of behaviour and violence in Cardiff, London or Edinburgh and therefore we must not tolerate it in Belfast. We must condemn it strongly and insist that any issues of frustration or differences of opinion have to be dealt with and aired through freedom of expression and opinion, not through violence. There is no place for violence in a modern democracy. Northern Ireland has travelled a very long way in the past 10 to 15 years. When one looks back at the issues that the country faced 15 years ago, the progress that has been made is astonishing. It is important that we do not allow it to slip back, particularly, as the noble Lord pointed out, when 2013 offers the opportunity to bring the world spotlight on to Northern Ireland and to give it a real opportunity for economic progress.
The noble Lord referred to a number of issues. The first was the resources that have been provided. My right honourable friend the Secretary of State has had discussions with the chief constable, who regards himself as having sufficient resources. In the Statement, I referred to the extra £200 million that was given to take the PSNI through to 2015. However, there are now further discussions about any need for additional resources after that. My right honourable friend the Secretary of State is very willing to consider additional resources if it is felt that they are needed.
My right honourable friend the Secretary of State has kept the Prime Minister closely informed. The Prime Minister is extremely concerned and is in close touch on what is happening in Northern Ireland at this moment. She has also had a number of meetings and telephone discussions. She has spoken with David Ford, the Justice Minister in Northern Ireland, three times over the past week. She has spoken with the chief constable three times and has spoken to the MP for East Belfast, Naomi Long. I know that she—and, indeed, I—would be happy to do more if it were needed in order to ensure that people are brought together and that we bring an end to the appalling violence that we have seen in recent days.
Earl Attlee
My Lords, the whole House would benefit from short questions to the Minister so that she can answer as many as possible.
Lord Alderdice
My Lords, I thank my noble friend for repeating the Statement made in another place. I would like to add our appreciation on these Benches for the dangerous and courageous work of the Police Service of Northern Ireland. We add our support for Naomi Long, whose life has been threatened as an elected representative, and for other elected representatives whose homes and offices have been attacked and whose families have been terrified and frightened by mobs that have been roaming about. Not only have elected representatives suffered, but many other people have been discomfited as well. A doctor told me today that cancer patients were not able to get to hospital because of what was going on.
There is the question of the violence, but it did not come about just with this issue of flags. It has been developing over the last number of months, with issues about Catholic churches and parades. This is clearly a mounting process with paramilitary organisations. What is most concerning is that instead of some political leaders trying not just to condemn but to contain this, it is actually being spread out to other circumstances. While the Assembly in Stormont has flown the flag only on designated days, now the whole question of the flag being flown on all sorts of other days is being raised and creating difficulties which were never there before in more than a decade of the Assembly functioning.
I am disappointed that it has taken some time for any clear guidance to come out of 10 Downing Street and the Prime Minister. I ask my noble friend why that is so. There have been no clear statements saying not just how wrong this is but how important it is for politicians not to spread the problem but to seize the problem and control it. I ask my noble friend if she could give me some reassurance that the Prime Minister and his colleagues will not merely sit at Number 10 Downing Street and be concerned, but that they will start putting pressure on political colleagues in Belfast, who are picking up on this and spreading the problem rather than containing it and closing it down. Of course, there are other issues that need to be dealt with, including difficulties for Protestant young men and their educational status in some loyalist areas. But this is not the way to deal with them. I plead with my noble friend to make a case to the Prime Minister to be more engaged.
There have recently been complaints by the Deputy First Minister that he can see the President of the United States more easily than he can see the Prime Minister of our United Kingdom. This is not a help in a situation which is beginning to spin out of control.
Baroness Randerson
I thank my noble friend for that powerful response. He speaks with a great deal of experience of the situation. He was a prime force in the early days of the Northern Ireland Assembly. He knows only too well how difficult it is on occasion to make progress. I also thank him for his tribute to the bravery of the PSNI and to the elected representatives. I have always thought that politics in general is not for the faint-hearted, but in Northern Ireland it is certainly not for the faint-hearted. Given the progress that has been made in Northern Ireland, we almost began to take for granted that progress would carry on there. The past few days have shocked us in relation to the threats to elected representatives. The blocking of the road to the hospital was totally inexcusable.
My noble friend referred to the gradual increasing violence, which has been a general trend in recent years. As he knows so well, the flying of the flag is an issue of great sensitivity. However, the flag has been flown over Stormont on designated days, which has been accepted up to now. Indeed, the union flag has been flown over a number of council buildings throughout Northern Ireland on designated days. I have to emphasise to the House that the decision on flying the flag is a local, democratic decision. It is a matter for the councillors in Belfast and for the MLAs.
My noble friend referred to a possible delay in response from the UK Government to this situation. It is important to bear in mind that so many of these things, including the PSNI, are devolved issues. It is also important that we allow the devolved Government in Northern Ireland to make decisions and to take leadership when it is needed. Finally, it is truly important that leadership is exercised strongly and responsibly by politicians in Northern Ireland.
Lord Kilclooney
He sits on the Cross-Bench group but he is not a member of our group.
Lord Rogan
My Lords, I, too, thank the Minister for repeating the Statement. Has she noticed that the Ulster Unionist Party has condemned in the strongest possible terms the harassment of and violence towards police officers and elected representatives? Anyone who engages in this illegal activity on our streets fails to understand the values that are encapsulated in the union flag. In doing what they did, they lose the very argument that they want to promote.
Does the Minister agree that it is not sufficient to condemn the violence? One must look at the underlying causes which triggered this violence. It is not just the removal of the union flag from Belfast City Hall where it had flown continuously since 1906. It is about a people who feel that bit by bit they are having their Britishness stripped away from them. It is also about a people who perceive themselves as becoming second-class citizens in their country. These are deeply held beliefs, whether they are real or imaginary. The Government must recognise them and begin to address them.
Police officers who were simply doing their duty of protecting the community under extremely difficult conditions have been subjected to outrageous attacks. Rather than being attacked, these officers deserve our thanks and support for standing between us and anarchy.
Baroness Randerson
I thank the noble Lord for his comments. He refers to the underlying causes. I would point out that culture changes and identity develops over a period of time. Indeed, the people of Northern Ireland have seen considerable development in their political culture in the past few years. I would also like to point out the association between the violence and the areas where there is social deprivation in Belfast in particular. That is why it is so tragic. Every time a picture on television of rioting in Northern Ireland crosses the world it does economic harm to Northern Ireland and hits its opportunity to develop a better world, particularly for its young people.
Lord Mawhinney
My Lords, does my noble friend recognise that she was right to point out that that what is happening is an attack on democracy? I am sure she carries the whole House with her when she says that. Although we are all shocked, we ought to be mildly encouraged that there have been previous attacks on democracy in Northern Ireland, and the people stood firm and good people prevailed—and, if I may say so, Ministers stood firm, and progress was made. We need to remember that in these difficult days. Does my noble friend also recognise the truth of part of what the noble Lord, Lord McAvoy, said? Those who participate in this violence, or at least some of them, think that by doing that they can force their political agenda. Will the Government make it clear that violence will never force a political agenda and that the political agendas that have already been discussed and need to be addressed, including questions of ongoing identity, cannot be addressed in the context of a response to, or as a consequence of, the threat to democracy that this violence constitutes?
Baroness Randerson
My noble friend makes some important points. It is important that we make it absolutely clear that the leadership in Northern Ireland and the Government in the UK will stand firm and show the appropriate leadership. Of course, there are always issues to be addressed, and the way in which the Northern Ireland Executive have attempted very successfully to work together to overcome huge divides on occasions has always been a great example to us. It is important that political leadership at every level in Northern Ireland shows that.
Lord Dubs
My Lords, those of us who had some involvement with Northern Ireland over the years must feel particularly dismayed and disappointed by the events of the past little while. By chance, on the day when the troubles began in Belfast City Hall, I was attending a small meeting with Naomi Long when she predicted what was going to happen—and it was a very depressing occasion. She is a remarkably brave woman, given all the threats to her. It is particularly disappointing that it is a month ago that the Irish Prime Minister went to Enniskillen on Remembrance Day and the Deputy Prime Minister went to a similar ceremony in Belfast. These were very important and positive gestures, which did not get much publicity at all in Britain—but they were very significant in terms of the Irish Government trying to play their part. That is a long way away from these very disappointing events.
I do not want to excuse violence, and it is not excused under any circumstances. If it was direct rule, I would ask the Minister this very positively. I am a member of the British-Irish Parliamentary Assembly, and some years ago we produced a report on the life chances for young people in some of the most disadvantaged parts of Belfast. One could see something of this sort coming, with young people, particularly from the Protestant areas, being prey to loyalist paramilitaries because they had no other future in life at all. I am afraid that that report was ignored. I urge the Government to talk to Northern Ireland Ministers and say that they must not neglect things like poor life chances for young people. In those poor life chances, we see the seeds of some of the events that have happened. It does not excuse them for one second—it does not excuse them at all. But we have to understand that and see what can be done in the longer term.
Baroness Randerson
The noble Lord makes some important points and draws our attention to what are sometimes stunning symbolic examples and positive gestures by political leaders in the island of Ireland as a whole. When I was in Belfast last week, I was very impressed by the determination of the First Minister and Deputy First Minister to develop the economy of Northern Ireland. I also had a meeting with Invest NI, which is doing excellent work on inward investment. It is key that that investment trickles down to those socially deprived areas where problems such as we have seen in the past week particularly occur.
Lord Carlile of Berriew
My Lords, I declare an interest arising from two appointments connected with security in Northern Ireland. Will my noble friend join me in respecting the dignified way in which David Ford has conducted a very difficult job—as difficult as any ministerial appointment on this side of the water—as Minister of Justice in Northern Ireland? Secondly, does she agree that the evidence is that what has happened is a threat to public order but not a threat to national security? The vast majority of the public in Northern Ireland, whichever religion or part of the community they come from, are absolutely hostile to the sort of public disorder that has occurred in recent days and wish strongly that the hooligans who have been committing the acts that have been described would simply go home and stop.
Baroness Randerson
My noble friend has introduced two important new topics. One is the excellent way in which the Justice Minister, David Ford, has gone about his work. I met him as well last week and, having met him several times in the past, I was yet again tremendously impressed by his determination and the clear and even-handed way in which he approached his task. On the issue of whether it is a threat to public order or a threat to national security, I would agree with my noble friend that the latter definition has not yet been reached. The important thing is that, however you define it, it is wrong and it must be condemned on all sides.
The Lord Bishop of Bath and Wells
My Lords, may I also express, from these Benches, our abhorrence at the violence that has been experienced in Northern Ireland, pay tribute to the PSNI for the work that it is doing and encourage the bravery of its officers? I have been involved in Northern Ireland for many years: I have been married to an Irish woman for 45 years and have been engaged in various different aspects of the progress towards peace during those years. One thing that has impressed me, and continues so to do, is the work being done by grass-roots groups in communities. These are very often people who have been involved in acts of violence themselves and have come to a new place in their experience. As we look at this particular situation and circumstance, I encourage the Minister to nurture those grass-roots groups that are endeavouring to form and make peace within the communities and which are, very often, aware of the various participants in these situations and can themselves be the means by which some of the violence is reduced.
Baroness Randerson
My Lords, the right reverend Prelate makes a very important point about the voluntary sector. We all know that the voluntary sector is important to our society throughout the United Kingdom, but nowhere more so than in Northern Ireland. The work of some of the community groups to improve a sense of security and belonging is absolutely astonishing. It is of particular interest how many community leaders have had an association with violence in the past in Northern Ireland and have seen that it is the wrong way to go.
Lord Kilclooney
My Lords, I think it is the turn of the Cross-Benchers, and I am a member of the Cross-Bench group. As one who suffered intimidation and was shot 10 times through my body by the IRA, I totally deplore—and have every reason to deplore—attacks on politicians of any party in Northern Ireland. Secondly, the Minister may have given a wrong impression about what is happening in Northern Ireland. We have had more than 50 demonstrations in the last week in Northern Ireland and many of them have been totally peaceful and well organised. That was not said. The impression given was that there were riots at all these demonstrations. We had five demonstrations in my home city of Armagh last night. They were well organised and very civilised.
It was mentioned that the honourable Member for Belfast East foresaw the violence. The reaction was caused when Sinn Fein and the SDLP, joined by their colleagues in the Alliance Party, decided to lower the union jack for 350 out of the 365 days of the year. One of that team said, “We have done a good day’s work”. That really inflamed opinion among the majority community in Northern Ireland and a vast minority within the City of Belfast. Would that group who decided to lower the union jack in Belfast have been better to delay their decision until January and not damage the retail shops in Belfast in the run-up to Christmas?
Finally, I bring the Minister good news. We had our census figures in Northern Ireland today. First, some 45% of the population are Roman Catholic, but now only 25% say they are Irish only—proof that sectarianism is fading. Secondly, 59% now hold a United Kingdom passport, while only 21% hold an Irish passport. In the United Kingdom, the union flag is the flag of Scotland, Wales, England and Northern Ireland; but Scotland, Wales and England also have their own local flags. Would it not be a good idea, given that flags are a divisive issue in Northern Ireland, to put our minds together to get a flag—as well as the union jack—to which Roman Catholics and Protestants, unionists and nationalists, and anyone can give joint loyalty? So far, we have no Northern Ireland flag. Is it not time we started to design a flag that would appeal to everyone?
Baroness Randerson
I thank the noble Lord very much for his comments. I freely and fully acknowledge that there have been a significant number of totally peaceful demonstrations in the past week. Unfortunately those people are overshadowed by those who decided that they wanted to provoke violence. The right to demonstrate peacefully is the core right of our democracy. That is absolutely accepted on all sides.
The timing of the decision on the flag on Belfast City Hall was a matter entirely for Belfast City Council. As for the noble Lord’s point on sectarianism, I join him in the hope that Northern Ireland politics will be less marked by sectarian differences in the future. He makes an interesting point about a new flag for Northern Ireland—one that I am sure will be well aired, now that he has raised the matter here. It is bound to be discussed with interest. I come from Wales and we talk a lot about the Welsh flag and the place of Wales in terms of the union jack. I can therefore understand the significance of a new flag, which could be an interesting option for the future.
Earl Attlee
My Lords, before we start the Question for Short Debate, I remind noble Lords of the speaking times. Except for the right reverend Prelate the Bishop of Derby, who has 10 minutes, and the Minister, who has 12 minutes, all speeches are limited to four minutes. I will be able to help noble Lords.
Developing Countries: Impact of Multinational Companies’ Financial Practices and UK Tax Policies
The Lord Bishop of Derby
To ask Her Majesty’s Government what assessment they have made of the impact of multinational companies’ financial practices and the United Kingdom’s tax policies on developing countries.
The Lord Bishop of Derby
My Lords, I am very glad to have secured this debate on what has come to be known as tax justice. The point is to ask Her Majesty’s Government what assessment they are making of the impact of the policies of multinational companies in terms of taxation, the effect that that has on developing countries, and the impact of our own tax policies on developing countries. They are the issues that I am inviting your Lordships to discuss.
I declare an interest. I am a trustee of Christian Aid, which does a lot of work in this area. I put down for this debate a long time ago and suddenly it has become very topical, with Starbucks, Amazon and others bringing it to the fore. That should remind us that we are talking about citizenship—corporate citizenship, in this case. People recognise that as individuals and companies create wealth and income, it is only right that a proportion of that should be invested in the country in which it is created for the well-being of its resources and development.
We know that in our own country the cost of health, education and infrastructure is high and very difficult to maintain so everybody should make a contribution. That is why there is such an outcry about Starbucks and other companies. In developing countries, the need for those basic things is much greater. As rich countries are getting richer, poor countries are getting poorer. Therefore, the need for health, education and very basic infrastructure is enormous. It is estimated by Christian Aid and others that developing countries, through not collecting tax revenue that they might be expected to collect, are losing something like £160 billion a year. That is more than the whole flow of international aid into developing countries. The figures can be debated and disputed, but the point is that the scale of the loss of revenue through taxes not being paid in developing countries is massive at a time when there is enormous social need.
We should not be surprised that the Chancellor himself says that tax justice is a moral issue. We should not be surprised that concern comes from these Benches because, in the Christian tradition, Jesus and Paul make it very clear that there is a duty to pay taxes to contribute to what we would call the common good and the common life. Each country needs the resourcing to provide a common good and a common life. What happens is that multinational companies are able to create wealth in developing countries, but then shift the wealth often to secret tax havens and other locations, making very little contribution to the needs and resourcing of the country where the wealth is created.
There are a number of key issues that I want to offer to frame this debate. The first is about corporate citizenship. What is the moral duty on organisations and companies that gain wealth from being in a particular country if they shift it away to other places to minimise their tax payments and the wealth that was created does not contribute to the society that created it? Secondly, surely it is in the interests of multinational companies in developing countries to have more stable structures and a better health and education provision for the workforce, so that the businesses they are trying to run are better resourced. It would seem to be sensible for multinational companies to contribute more to the better infrastructure and resources of developing countries.
Thirdly, it must be in the interests of companies working in developing countries, and of our Government, that these countries are resourced well enough to be stable politically, economically and socially, because poverty creates instability. For companies operating in a country, and for Governments like ours, we want to encourage a resource base that allows stability and security. An increasing number of people in our society think that tax justice is a very high priority as a moral issue. In a recent poll, 58% of people in this country want tax justice to be recognised as a moral issue. The Prime Minister himself has said that as we go into the G8 next year he wants tax justice to be an important issue. People are recognising it as an issue. The question is: what are we going to do about it?
Within Parliament, the International Development Select Committee, which is a cross-party grouping, has recently produced a report about tax resources needing to be paid in developing countries to combat poverty, promote stability and create better conditions for business. The committee makes a number of specific recommendations which highlight what we could be doing and what we could be contributing towards. The first recommendation is that we should support country-by-country accounting for greater corporate transparency. In each country, we should try to gain information about profits, the payment of tax and where money is coming from. The second recommendation is that there should be an improved exchange of tax information. Many developing countries do not currently have the civil service infrastructure to gain this information or even to ask the questions that might help them discover what is going on. As we can develop information from companies that have their headquarters here then we might have information that can help other Governments. Many developing countries have multinational companies within them that are subsidiaries of major companies based in this country and in the City of London. We would therefore be in a position, as we gain more information and transparency about the movement of money and where tax is paid, to share it with other Governments. Thirdly, besides a new country-by-country accountancy for greater corporate transparency, besides improved exchange of tax information, the committee recommends that in our own tax practices we assess as we make policy the impact they will have on developing countries.
The Government have accepted the recommendations about capacity building in developing countries to handle matters of tax better but they have yet to give a clear steer on their response to the recommendation about the exchange of information that would help developing countries better perceive the wealth that is being created and ask for a proper share of it. I have a major concern that we are developing bilateral conversations with countries such as Switzerland about exchange of tax information. That may be helpful in the short term on some fronts for us domestically but it is creating agreements from which developing countries are excluded. It therefore makes it more difficult rather than easier for developing countries to know about the wealth that is being created within them and any tax revenues they may be able to claim a share of.
I welcome the fact that in 2013, through the G8, our Government are going to take a lead in this area. I welcome the Government’s commitment to reaching the 0.7% aid target. However, I want to offer two perspectives to frame this short debate. The first is the point I made about corporate citizenship. Many subsidiaries of companies that operate and extract wealth and resources from developing countries have a base in the UK. If we develop a sense of transparency here then our corporate citizenship that these companies must be challenged to step up to must include a governmental approach to citizenship that shares that information.
My second strand comes in the form of questions to the Minister. Will the Government consider provision in UK tax policy to assist developing countries to collect the taxes that they might be due? Would a Treasury Minister be willing to meet a delegation of interested people from this House and other agencies so that we can look at the impact of our tax policies on developing countries? What concrete steps will the UK Government take to tackle secrecy and the lack of transparency which allows this huge outflow of wealth and stops countries getting the deserts that they might claim? Finally, what steps will the Government take to consult global civil society, including the churches, to gather intelligence, recognise needs and see how they can be put together?
I look forward to contributions to the debate.
Lord Brooke of Sutton Mandeville
My Lords, the whole of your Lordships’ House is in debt to the right reverend Prelate the Bishop of Derby for securing and launching this debate. If I follow him in telegraphic mode it is because four minutes is a tiny span given the complexity of the debate’s subject. I also welcome my noble friend the Minister to these matters, which respond well to his past experience.
The coalition Government have fundamentally changed the basis of UK tax in this area. Previously we used at least to seek to tax UK-based companies on their world-wide profits, if sometimes with variable success. Now we have moved to a territorial tax system so that only profits arising in the UK are HMRC’s target. The logic of this is not the subject of this debate but it is a salient background point. If profits arising in Africa, Latin America or elsewhere are no longer in our purview and we make no claim on them, it will cost us little to help such countries to collect the taxes owed to them and we potentially make our own aid giving more effective in the process. In this regard, justice marches hand in hand with national and international interest.
The right reverend Prelate alluded to building a tax capacity in the third world, and both DfID and HMRC do valuable work in this area. I hope we can extend this to enlarge DfID’s own tax capability. This would promote DfID reinforcing the Prime Minister’s clear intention that tax should be at the centre of his agenda for the G8 next year. In the mean time, I hope that the Minister in his wind up will give examples of current tax help that we are bestowing on developing countries.
For this intention to work, we need to ensure that we go beyond finding solutions that work for ourselves and more widely for the G8 and find solutions that work for all countries. If due and proper revenues are effectively raised by developing countries, then present desperate poverty can, in part, be assuaged to the mutual benefit of all. The G8 conference can be an opportunity for the rest of the G8 and ourselves to make a pellucid commitment to developing countries that we shall put our own houses in order to prevent our structures being used to evade tax in developing countries, and that the G8 will use its power and influence to persuade others to change as well. It is a good and honourable cause and we should be grateful to the right reverend Prelate for having raised it.
Lord Browne of Ladyton
My Lords, I am delighted to follow the noble Lord, Lord Brooke of Sutton Mandeville, whom I have admired for almost two decades. I am impressed by his ability to use only two of the four minutes that he was allocated and yet to have made such piercing points. I join him and others in the debate in congratulating the right reverend Prelate on securing the debate, identifying exactly the right theme in his introduction and short contribution and on asking some very pertinent questions. The timeliness of this debate is set by the discussion which is taking place loudly outside about corporate citizenship in this country and the avoidance of taxation by a number of well identified companies. Disturbingly, it would appear to be a growing list as this debate ensues.
The debate is timely also because our Government have a conjunction of opportunities in 2013 to address these and related issues. In 2013 we take the chairmanship of the G8; we are the co-chair of the Open Government Partnership; and we are, as we have debated previously, the chair of the high-level panel on post-millennium development goals. So the conjunction of these, plus G20 opportunities, creates an opportunity for multinational action that has not previously been there.
We are encouraged by the Prime Minister’s approach to this. In the Wall Street Journal on 1 November, David Cameron published an article in which he identified combating corruption—which is the overarching issue here—as part of the golden thread of conditions that enable open economies and open societies to thrive. He has in the past repeatedly emphasised the role of transparency, while he aims to lead a Government that is the most transparent and open in the world. So we have a Prime Minister and a Government who ought to be focused on these issues.
I agree entirely with all the points that the right reverend Prelate has made and have been made before, and I am sure that I will agree with many of the points that are focused on tax transparency and accountability. In the next two minutes, I will give an expansive interpretation of the Motion before us to draw the House’s attention to opportunities that lie in improving corporate social responsibility by multinational companies in the areas both of the extractive industries and in relation to corruption to expand upon these challenges.
Some 3.5 billion people live in countries rich in minerals. Very few of them are enriched by the extraction of those minerals from their countries. In the All-Party Parliamentary Group on Anti-Corruption only last week, we were treated to an explanation of what has happened to the mineral wealth of the DRC. It has been traded for a fraction of its value to companies in our overseas territories, the beneficial ownership of which appears to be not very far away from senior politicians in those countries. There is a need for transparency in this direction and I congratulate the Government and the European Union on engaging in this and trying to bring our laws up to speed with the United States’ laws on transparency of payments to governments. I ask them to ensure that the return that we get for that investment is a proper directive which is influential all across Europe.
Again on transparency and enforcement, the Bribery Act 2010 offers an opportunity to try to interdict this sort of behaviour. If we are to do that, first, we need it to be applied to all legal persons incorporated in all of our overseas territories and crown independencies; I have already identified some of the reasons for that. The OEDC has asked us to do that; perhaps the Minister is able to indicate when we are able to do it. Secondly, we need adequate resources to enforce the Act. Thirdly, the Ministry of Justice guidance needs to be more focused on these issues. Fourthly, we need to appoint some champion in government for anti-corruption. All these things are necessary.
I want in one sentence to make one other point. None of this behaviour in the United Kingdom would be possible if it were not for the behaviour of people called “enablers”. Embarrassingly, as a lawyer in the United Kingdom, most of these people are professionals. They are lawyers, accountants, bankers and finance people. Our regulators in this area must be made accountable. When was the last time that a member of one of these professions was struck off for behaving in this way?
Lord Shipley
My Lords, I, too, thank the right reverend Prelate the Bishop of Derby for initiating a very timely debate. The current debate on the payment or non-payment of corporation tax in the UK shows that it is a tax that does not work well for the UK, so it is unsurprising that it is not working well for developing countries either. We know that developing countries lose significantly more from lost tax revenue than they receive in international development aid.
In a debate on 22 October in your Lordships’ House on the Economic Affairs Committee’s report on the economic impact of development aid, I raised the claim of ActionAid that British multinationals were directing profits into tax havens from developing countries to the value of around £4 billion—or one-third of the UK’s total planned development aid budget. The Government have subsequently challenged that number. While there may be disagreement on a precise figure, there is common acceptance that the money leaving developing countries owing to tax evasion and avoidance far exceeds the amounts received in aid. In fact, the OECD has estimated that it may be up to three times higher. Christian Aid has estimated that developing countries as a whole lose some $160 billion a year in lost revenues from multinational companies.
We have a clear responsibility to help developing countries. It is not just a question of increasing our spending to 0.7% of our national income. The UN, the IMF, the World Bank and OECD all emphasise that developed countries have a responsibility to undertake spill-over analysis where changes in domestic policy may impact on developing countries. We should welcome the fact that DfID is investing in helping developing countries collect more tax revenues. I have been wondering which Whitehall department is responsible for this matter. Should DfID or the Treasury address where tax is taken? I would be very grateful for the Government’s view on where the responsibility lies between DfID and the Treasury.
I know that the Government are active internationally in promoting tax transparency and the exchange of information between jurisdictions, but I wonder if they are doing all they could in this area. For example, recent reforms to UK-controlled foreign companies rules mean that we need to assess urgently how we can better support developing countries’ tax systems. It would be helpful if the Minister could confirm what action is planned by the Government to address this.
If we want to help ourselves and developing countries alike, we should now be demanding real reform of corporation tax so that profits are paid where they are really earned, including mines and wells in the case of many developing countries. If we could find a way to allocate the profits of international companies on this basis, the money could be so much better invested.
The recent outrage in the UK will, I hope, prompt decisive action, but this action cannot be simply for rich countries. We need reform that works for all countries. If we want our aid to be effective, we cannot undermine it by allowing tax revenues to be transferred out of developing countries.
The Lord Bishop of Hereford
My Lords, I, too, begin by congratulating my friend and colleague the right reverend Prelate the Bishop of Derby on securing this debate at such a timely moment.
The 19th report of the House of Commons Public Accounts Committee, published only a few days ago, began:
“Transparent, predictable and fair taxation is at the core of our public finances. The Government has a responsibility to assess and collect tax due from all taxpayers, without fear or favour, and taxpayers should pay all that tax which is due”.
It continued:
“The hearings we held showed that international companies are able to exploit national and international tax structures to minimise corporation tax on the economic activity they conduct in the UK. The outcome is that they do not pay their fair share”.
This is all familiar to us, but if that is true for the United Kingdom, it is even more so for developing countries.
The key issue with regard to collecting any tax—unless it is from the extraction companies, to which reference has already been made, where it may be the outcomes that we need to be looking at—is finding the profits on which it is due. You can have the best tax law in the world, but if you cannot find the profits, it is all a waste of time. That means that the first and most important job for developing countries is to identify profits that should be declared in their countries but are not.
There are three ways in which we can do this. We can call for the introduction of country-by-country reporting that requires a multinational corporation to publish a profit and loss account for each and every country in which it trades. We can also voluntarily supply to developing countries information, obtained here in the United Kingdom, on the tax affairs of multinational corporations based in this country, where that information suggests that developing countries have tax issues that they might want to raise with those companies.
Changing our disclosure of tax avoidance schemes rules to include developing countries, not just the UK, as well as potentially high-risk transactions, could greatly assist. It would enable the UK to provide valuable, targeted information to developing countries to help them to both enforce their existing laws and identify and improve their legislation, just as DOTAS has here in the UK.
Lastly, we can ensure that if in future we collect information from tax havens—as it seems that we are likely to do with the Isle of Man and, I hope, others—on who beneficially owns companies in places such as the Crown dependencies that would be of benefit to developing countries, we should send that on as well, although this should be only a stepping stone to ensuring that all countries have access to information, not just the United Kingdom and other richer countries. The United Kingdom should work proactively to ensure that jurisdictions offer developing countries the same access that they grant to the United Kingdom itself. All of this needs not only action here but, ideally, international agreement to act in this way, especially from the G8. The relationship between multinationals and developing countries is skewed by the wealth, influence and power of the former, which makes it extremely difficult for the developing countries themselves to challenge them legally or financially. We need to act to redress this balance, and improving the information is a vital step in that direction.
Lord Haskel
My Lords, I also congratulate the right reverend Prelate the Bishop of Derby on this debate. He really has caught the spirit of the times; the spirit that, nowadays, business plans have to stand up to scrutiny socially and ethically as well as commercially and financially. Be good corporate citizens, as he put it. Not only is it reasonable to pay tax where people work, where the infrastructure and facilities are provided and the business is done; but also, avoiding the tax puts the local firms who pay their fair share of tax at a disadvantage.
It is fair to ask, “What is it to do with us?” All this happens an awfully long way away, over the water somewhere. However, it does concern us because London is the place where a lot of these tax-avoidance schemes are thought out and prepared. The right reverend Prelate the Bishop of Hereford just reminded us that there is often no relationship between the consolidated accounts and the tax accounts prepared by firms here in London. Committees in both your Lordships’ House and another place have drawn this to our attention, and so did my noble friend Lord Browne. In addition, some firms that use these procedures are controlled here in London. Your Lordships’ Select Committee has also told us that many of these tax schemes are prepared and sold by the big four accountancy firms based in London—the very firms employed by the Government as consultants. Will this form part of the Chancellor’s consultation about honest tax payment being a condition of getting a government contract? For overseas companies, London is quite often a tax haven, alongside the better known ones in Alpine meadows or on islands tropical or not so tropical.
Incidentally, many of these islands are controlled by the UK. Why can we not close down these activities, which deny the Chancellor legitimate tax? Today we are getting the draft Finance Bill. I am sure that the Minister is familiar with its hundreds of pages. Can he tell us, therefore, whether the promised general anti-avoidance rule will draw a line under this activity? Will the Finance Bill have an effect, or are more up-to-date international rules needed to put a stop to this, such as the unitary tax system described by the noble Lord, Lord Brooke?
It would be a big step to get the G8 to agree to this. Meanwhile, as the right reverend Prelate said, we have to rely on morals and society; on good corporate citizenship. However, there are glad tidings. The good news is that the right reverend Prelate has an important ally, perhaps even better placed than the Prime Minister, who has referred to these activities as immoral. I speak of the Mayor of the City of London. What caught my attention when Roger Gifford became the 685th Lord Mayor of the City of London was that he went to my old school—no, Minister, it was not Eton. So I was interested to hear that he has chosen “the City in society” as the theme for his year in office. I quote him:
“Unbridled capitalism is something none of us believe in but it’s how to bridle it and yet leave room for growth, entrepreneurship and job creation”,
was how he described his task, and that is what he set out to do. I found that pretty inspiring and brave so, when he was interviewed on the “Today” programme on the day of the Lord Mayor’s show, I listened with interest. He spoke about how his efforts are to be directed towards the City reaching a newer and healthier capitalism. Truly, I wish him every success, and may part of that success be shared with the right reverend Prelate, working on his important campaign. As I have tried to point out, the Government can do a lot to help, and I hope that they will.
Lord McKenzie of Luton
My Lords, like others, I congratulate the right reverend Prelate the Bishop of Derby on introducing this debate and I welcome the manner in which he did so.
I was not going to speak in this debate but I was prompted to do so because I was recalling a largely happy time in the mid to late 1990s when for a couple of years I had responsibility for leading a practice of a major accounting firm in Vietnam. We had offices in Ho Chi Min and Hanoi, and we lived in Ho Chi Min. My observations today are not meant in any way to be a criticism of those incredibly resourceful people but are an anecdotal recollection of the tax challenges of a country at an early stage of the opening of its economy to international investment.
In common with a number of countries at that stage in their development, it had no embedded concept of international accounting standards and, at best, a rudimentary set of tax rules applicable to foreign investors. Not surprisingly, there was no broad understanding of the international tax environment, or indeed of international auditing standards, and the issue of corruption, to which my noble friend and others have referred, was a challenge. In these circumstances, the need for capacity-building was paramount and continual. We certainly saw it as part of our obligation to engage in training sessions for the Ministry of Finance, but there should be a continuing government programme of secondment into the local revenue authorities and transfers and secondments out to more sophisticated regimes.
Experience on some major auditing assignments, which were funded by money from the World Bank or, in another case, the Asian Development Bank, would have been easier had the requirements to have training been more tightly prescribed. Having to have uncomfortable negotiations with a few people who wanted an international study tour, rather than several hundred of their middle-ranking people having good-quality training, was a disappointment at best.
In Vietnam, foreign investors had to be licensed. You could do business either by way of a wholly foreign-owned enterprise or a joint venture with a local partner, depending on the sector and technology transfers. Some sought an in-country presence by way of a representative office, which should have precluded them doing business there although often, sadly, it did not. The concept of aiding transparency by having separate local accounts is to be supported, although there are issues where the business is a joint venture and a local partner, possibly an arm of government, that may be less welcoming of the concept. Having a requirement to identify related party transactions in accounts is also to be strongly supported, but it is not a panacea.
Transfer pricing, or the inflated pricing of goods or services from connected companies, is a challenge the world over, and the opportunities for companies to unbundle their products, sometimes stripping out a royalty flow, is a challenge as well. The IMF points out that developing countries signing up to sophisticated OECD-type tax treaties that generally seek to lessen the tax costs on interest, royalty and dividend flows may not be in those countries’ best interests when there is a large imbalance of such flows between two territories.
Vietnam, like a number of other developing economies, has gone down the path of adopting a VAT system. It was in the process of doing this at the end of the 1990s. As a source of tax, of course, it is not reliant upon the computation of profit and the vagaries of that process. A VAT system can be supportive of exports, although it may not always be progressive. Notwithstanding that, developing countries need a profit or corporation tax also, but one which is based on clear rules and where the fuzziness of the law does not lead to tax liabilities being negotiated. The risks are obvious even for a Starbucks. Also, taxation of individuals should not be overlooked. There can be a huge differential between local wages and expat salaries. The latter are often bolstered by accommodation and tax protection packages. For some, the temptation to split contracts and park some remuneration offshore may be too great. Requiring more vigorous reporting on such arrangements opens the way for local officials to challenge this.
These are a few anecdotal comments from the coal face of a developing economy and the challenges that it faced.
Baroness Royall of Blaisdon
My Lords, I, too, offer my congratulations to the right reverend Prelate the Bishop of Derby on the superb timing of this important debate and on his excellent introduction, with which I agreed.
In recent weeks, high-profile cases of multinationals avoiding taxes have attracted real anger, both from the public and politicians. When families and businesses are squeezed and living standards are falling, it is right that we expect everyone to pay their fair share. Corporate citizenship is a good concept. While we should not taint all businesses with the same brush—most of our businesses make a significant contribution to the UK economy—this phenomenon is not restricted to a few multinationals. According to ActionAid, of the 100 biggest FTSE companies, 98 use tax havens. This suggests that tax avoidance is a systematic feature of the way in which many large companies operate, rather than an occasional one-off.
Tax avoidance has a devastating effect on developing countries. As noble Lords have said, the OECD estimates that developing countries lose three times more to tax havens than they receive in aid. This has the effect of depriving developing countries of a much-needed, sustainable source of revenue, taking money away from essential services, restricting growth and preventing Governments investing in crucial infrastructure. Tax avoidance must be at the centre of future aid policy. Indeed, in its report published in August, the International Development Select Committee stated:
“Tax is an issue of fundamental importance for development. If developing countries are to escape from aid dependency, and from poverty more broadly, it is imperative that their revenue authorities are able to collect taxes effectively”.
An expanded tax-revenue base is one of the only ways for developing country Governments to develop a sustainable source of revenue to deliver social programmes and target poverty and inequality. Of course, as has been said, poverty and instability go hand in hand too often.
The successor to MDGs, and to the future of development must be values-led, with the goal of tackling inequality at its heart, and this must include tax avoidance. Labour in Government made progress on this issue but not enough. For example, in 2002 we launched the extractives industries transparency initiative, which has been mentioned and which promotes revenue transparency at a local level, but much more needs to be done. We pledged in our 2010 manifesto to take further action and we are now launching an anticorruption review with the Mo Ibrahim Foundation to build a strategy that will aim to deliver a strong, global anticorruption coalition.
The Finance Bill 2012 introduced a relaxation of the Government’s anti tax haven laws; the so-called controlled foreign companies rules. Under the current rules, if a UK company reports profits in countries with lower corporate tax rates than the UK, the UK Government can impose an extra tax charge on the company to make up the difference. Under the revised rules, however, the UK will only be able to impose this extra charge if the profits have been moved out of the UK. Profits moved out of a developing country and into tax havens will no longer incur the charge, providing a greater incentive for companies to shift profits into tax havens. This move was strongly criticised by a number of NGOs, as allowing multinationals to avoid paying taxes in developing countries.
In its recent report, Tax in Developing Countries: Increasing Resources for Development, the International Development Select Committee stated that the revised rules,
“will incentivise multinational corporations to shift profits into tax havens. This is likely to have a significant detrimental impact on the tax revenues of developing countries”.
The committee recommended that,
“the Government should conduct … an analysis of the likely financial impact”,
of the CFC rules on developing countries and, depending on the outcome, should consider dropping its proposals. However, the Government rejected this recommendation on the grounds that the measures were intended to benefit the UK economy and that such an assessment would not be feasible.
During the passage of the Finance Bill, Labour urged the Government to reconsider changes to the CFC rules and tabled an amendment but the Government pushed ahead—despite advice to the contrary from NGOs, the IMF, the OECD and the World Bank. Will the Government urgently review the CFC rules? Could the Minister also tell the House what the Government are doing now, following the lost opportunity of the Finance Bill, to promote responsible capitalism?
Tax avoidance is a moral and an economic issue. With the G8 and the discussion about the new MDGs, there is an excellent opportunity to bring this issue to the fore and find a global solution. I would strongly urge the Government to take heed of the wise advice given this evening and stand up for social justice and responsible capitalism, at home and abroad.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Lord Marland)
My Lords, I, too, extend my thanks to the right reverend Prelate for initiating this debate. As all noble Lords have said, the debate is at a very timely moment where this is very much in public debate. It is important that this whole debate started from the moral standpoint, because that is the key to where we can go. With moral leadership, we can make great progress.
I would just take issue on a couple of points that the right reverend Prelate and the noble Lord, Lord Shipley, raised. We do not recognise the figure of $160 billion; in fact, we are thinking that if it was a man called James Henry who produced that figure, perhaps he should come and help us out in the Treasury. The right reverend Prelate also made the point that some rich and some poor countries are getting poorer, but in fact a lot of poor countries are getting richer. I have seen that first-hand in Mozambique and in Angola—and in Vietnam, which has been getting much richer even if it is getting a bit poorer at the moment. It is not just the picture as he painted it.
We must not forget that multinational companies are nation builders. I look at places such as the Middle East, where great British oil companies have established themselves and helped to create a country—as they have in Nigeria—and helped to create the wealth of that country in an incredibly responsible way. I do not particularly want to be quoted on the statistics, but look at the work of Shell in Nigeria and how few people it employs there from the UK in that entire company, and how it has developed skills in the country. This must not just be a debate where we attack the multinational companies, a great many of which act morally and properly and contribute greatly to the future of a country. Yet I completely recognise, as do this Government, that tax justice is an important issue.
A number of noble Lords raised the IDC report, which was extremely measured and well thought-out. The right reverend Prelate asked about country-by-country transparency and the Global Forum on Transparency and Exchange is one of the vehicles that can be used for that. The improved exchange of tax information across countries would obviously help and will be key to the co-operation required in tackling this substantial issue, which quite rightly takes favour with noble Lords. I shall pick up on a number of his points later. However, on the subject of a Treasury Minister meeting with Members of your Lordships’ House, I am not a Treasury Minister myself so I am delighted to volunteer a Treasury Minister to do that immediately, and I think that it should happen many more times than once. The right reverend Prelate’s final point about global civil society gathering together information is key. It is about corporate citizenship. I am delighted to hear the church speak in that area.
As has already been referenced, my noble friend Lord Brooke of Sutton Mandeville said in two minutes what most of us would take two hours to say. He asked what support DfID has given. DfID has given £20 million a year to support tax regimes throughout the world. The total is about £100 million over a five-year period. For example, it is £11 million in Sierra Leone, £8 million in Tanzania and £8 million in Rwanda. In Rwanda, because of that intervention tax take has gone up by six times, which is a significant issue. Some £21 million has gone into Afghanistan. In 2004 the tax take there was 4% and now it has gone up to 11%. It is working, it is direct action. The report by the IDC said that DfID does not have the capability within its department to understand the tax issues that are going on—many of us do not have the capability for understanding them—but with the support of the Revenue DfID has acknowledged that and is building up its capacity.
The noble Lord, Lord Browne of Ladyton, talks about the G8 and the leadership through that, and he talks about a champion. I think that there is no greater champion than our own Prime Minister, who is championing this cause and profiling it highly, and has made it a major point as the G8 chair. I am grateful that he mentioned the Bribery Act. It is one of the great selling tools for British businesses in the work that I do abroad as the Prime Minister’s trade envoy. British companies are transparent and have to be by law. This is admired by countries across the world as they seek to become transparent. In January I will go to Libya, where transparency is the main focus of everything that they do now. With that law we have shown great international leadership. I give credit to the previous Governments, which I do quite often, for bringing in that law. It has been a bedrock for the way forward for British companies.
The noble Lord, Lord Shipley, knows as much as anyone about this. He was at Procter & Gamble and part of an international business. The right reverend Prelate the Bishop of Hereford echoes many of the words that are spoken by his right reverend colleague. I am delighted to see that they are in unison in showing this moral leadership.
The noble Lord, Lord Haskel, identifies a number of points. He was educated not at Eton but at a northern fee-paying school, Sedbergh, which I thought gave a decent education. Certainly my school did. I was at Shrewsbury. Like most of the country, we did not go to Eton but we could add up. A lot of my schoolmates and no doubt his went into the big four companies. In the days when we were growing up, they were where the money was to be made if you became an accountant. It is important that accountants act within the law, and I am sure that the big four do. There are penalties if they do not. They provide an incredibly important global service and are in an unrivalled position to have a perspective on that and advise government.
I am grateful to the noble Lord, Lord McKenzie of Luton, for his anecdotal comments about Vietnam. These points bring everything into focus and to hear them at first hand is always interesting. What a great pleasure it is to sit opposite the noble Baroness, Lady Royall. Along with the couple of points that she made, we all look with interest to the anti-corruption review that her party is carrying out. I shall make a small political point, as she did, which is that a lot of this stuff went on under the previous Government and that, “We’re all in this together”—this is a nice opportunity to say that. Indeed, this debate shows that. It is a massive global issue.
From the UK’s point of view, we have a lot of things in place. We have the disclosure of tax avoidance schemes and the anti-abuse rules, in relation to which Mr Aaronson QC has come up with a lot of advice. We have taken a very proactive stance against Switzerland, and not before time, as many would say. We announced in the Autumn Statement that we are going very hard for British citizens who have deliberately avoided paying tax in this country. Indeed, our country is leading the way on how the tax take should be made. It is through leadership that Britain has always been so strong. From the global point of view, we announced on 4 November that we are going to co-operate with the Germans, the French and all other G20 members. We are contributing financially to support this global endeavour. The controlled foreign companies reform prevents companies unreasonably moving into lower tax regimes, which should help in this country. As I said earlier, we have the global forum on transparency and exchange of information for tax purposes, and we are very much part of the G8 financial action task force. As chair of that, we will be showing significant leadership.
I want to go back to the fundamental point that the Government are showing leadership. I congratulate my right honourable friends the Prime Minister and the Chancellor for taking up this issue. I am sure we would all do it. This is not a political point because everyone is behind this issue, and I thank noble Lords for their kind remarks about what we are doing. The Government are showing leadership, as they must, but I do not believe it is for the Government to talk about morals. It is for the church and Christian bodies to talk about morals, and I am therefore delighted that this debate was initiated by the bastion of moral guidance in my religion. I congratulate the right reverend Prelate on taking such a lead on this issue and on an excellent and purposeful debate.
Police (Complaints and Conduct) Bill
(12 years ago)
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The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach)
My Lords, I thank all those who have been engaged in putting this Bill on the fast track through your Lordships’ House and another place. It is not easy to get legislation organised in such a way. I pay tribute to those involved, and I am sure I do so on behalf of the noble Baroness, Lady Smith, and other noble Lords.