House of Commons

Wednesday 15th May 2013 Commons Chamber

Wednesday 15 May 2013

The House met at half-past Eleven o’clock

Prayers

Wednesday 15th May 2013 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Wednesday 15th May 2013 Commons Chamber

The Secretary of State was asked—

[Mark Tami (Alyn and Deeside) (Lab)]

1. What recent discussions he has had with the First Minister on future investment in the aerospace industry in Wales.

[The Secretary of State for Wales (Mr David Jones)]

The aerospace industrial strategy published in March sets out a vision for the sector, including a joint industry and Government investment of £2 billion across the next seven years. I am pleased that the Welsh Government have endorsed that strategy.

[Mark Tami]

Aerospace and Airbus are great success stories in Wales, so why do the Secretary of State and his Government believe that now is the time to create uncertainty on the question of Europe, which could threaten future investment in the sector? Does he not want quality jobs in Wales?

[Mr Jones]

I agree entirely with the hon. Gentleman that Airbus is an important and innovative employer. I have visited it twice recently, including when the contract for the AirAsia order was signed. However, Europe is an important issue. The Prime Minister considers it right that we should debate it properly, and that, at the end of that debate, we should have a vote. After the dust has settled, the fact will remain that, of all the mainstream parties, only the Conservative party wants to give the people of this country a vote on Europe.

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

St Athan enterprise zone in my constituency is focused on aerospace, and offers fantastic facilities, including hangars, runways and skills. What action is the Secretary of State taking to ensure that UK Trade & Investment is playing its full part to work with the community, those employed in St Athan and the Welsh Government to develop its status?

[Mr Jones]

My hon. Friend is entirely right that St Athan offers an enormously important resource in south Wales. The Aerospace Technology Institute will lead collaborative research and development projects across the UK, which will involve universities and industry. I suggest that that is a tremendous opportunity for St Athan.

[Owen Smith (Pontypridd) (Lab)]

Airbus is a quintessentially European company. It employs 6,000 people in Wales and 10,000 in the UK, and 100,000 further jobs support it. Does the Secretary of State believe that those jobs will be more or less secure if Wales is not part of Europe?

[Mr Jones]

The hon. Gentleman is wrong because Airbus employs 6,600 people in Wales, but he is right that it is an extremely important employer. Nevertheless, the people of this country deserve to have their voice on Europe. The Prime Minister will carry out important negotiations in the next few years. At the end of that period, the issue of Europe will be put to the British people. It is right that it should be. I am astonished that the hon. Gentleman and the Labour party want to deny the people of Wales and the UK their voice on that important issue.

[Owen Smith]

Leaving the pedantry aside, we had no answer from the Secretary of State on whether he believes that those 6,600 jobs in Wales will be more or less secure if Wales is not part of the EU. For the record, could he clarify his position on whether the jobs will be more secure if Wales is in or out of the EU? What is our Secretary of State’s opinion?

[Mr Jones]

I am entirely happy to clarify the point. Membership of the EU will be subject to negotiation. To repeat, at the end of that negotiation, we will see whether the conditions are right for this country to remain in the EU. The interests of companies such as Airbus will, of course, be taken fully into account.

[Mr David Hanson (Delyn) (Lab)]

2. What assessment he has made of the effects of changes to housing benefit rules in Wales.

[The Parliamentary Under-Secretary of State for Wales (Stephen Crabb)]

Information on the expected impact in Wales and Great Britain of the changes to housing benefit is provided in the impact assessments prepared by the Department for Work and Pensions.

[Mr Hanson]

When the Minister gave support to that policy, what assessment did he make of the number of one-bedroom properties available in Wales for the 40,000 people hit by it? Does he agree with the Under-Secretary of State for Work and Pensions, his noble Friend Lord Freud, who suggested that those who are concerned should sleep on sofas?

[Stephen Crabb]

I followed closely yesterday the questioning of the Under-Secretary of State who has responsibility for welfare reform. His comments about sleeping on sofa beds were made in the context of families where the parents have split—he discussed whether there is a duty on the state to provide benefits sufficient for each separated parent to have family-sized accommodation for children during the same week. If the position of the Labour party is that they should have such provision, it should be stated clearly from the Opposition Front Bench, but picking up all the costs of relationship breakdown in that way would be an enormous burden on the taxpayer.

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

Is it not the case that, despite the jeering and catcalls from Opposition Members, they will make no commitment to reverse those reforms, which have been introduced because of the financial mess the country is in? They know that better than most since they were the ones who caused it.

[Stephen Crabb]

As ever, my hon. Friend is correct. The Opposition’s position is characterised by two things: opportunism and hypocrisy. They know they will not reverse the changes if they ever form a Government again.

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

Today, 10 brave families will be applying to the High Court to declare the immoral bedroom tax unlawful. They are parents of disabled children and, in many instances, are disabled themselves. Will the Minister update the House on what steps his Government are taking to exempt those families from this immoral, unjust and unworkable tax that, according to an all-party report in March, will not save a penny?

[Stephen Crabb]

I am not going to comment on the specifics of the legal case, but the right hon. Gentleman rightly asks what we are doing to protect the most vulnerable people—those with severe disabilities in housing with adaptations. [Hon. Members: “Nothing.”] Opposition Members are heckling from a sedentary position, but contrary to what they are saying, we have set aside an extra £25 million for people with severe disabilities living in adapted accommodation and who need additional support at this time.

[Mr Llwyd]

I hear what the Minister says, but I would like him to respond to recent research conducted by BBC Wales, which revealed that there are approximately 28,000 individuals in Wales living in social housing that is considered to be under-occupied, with 400 one-bedroom homes available for them to move to. What will happen about that disconnect, or does he not care?

[Stephen Crabb]

There is a mixture of housing stock throughout Wales. Decisions will be taken on a localised basis, which is why we have more than doubled the amount of discretionary housing payment to more than £6 million to help meet the issue that the right hon. Gentleman raises.

[Guto Bebb (Aberconwy) (Con)]

My hon. Friend has just mentioned the £6 million increase in discretionary housing payments in Wales. In Conwy in my constituency, the increase to £300,000 doubles the amount available to the local authority. Is it not the case that many of the individual cases mentioned by Opposition parties will be dealt with at a local level as a result of this fantastic increase?

[Stephen Crabb]

We have more than doubled the amount available to local authorities for discretionary housing payment. In the local authorities of Wrexham and Caerphilly, it has been increased by more than 300%. We are determined to protect the most vulnerable people at a time when we have to restore budget discipline to housing benefit expenditure.

[Nia Griffith (Llanelli) (Lab)]

Official housing allowance figures indicate that even if only a third of bedroom tax victims in Wales manage to move to smaller private accommodation, that will mean at least a £17 million increase in the annual housing benefit bill going straight into the pockets of landlords. How many jobs does the Minister reckon could be created with that £17 million?

[Stephen Crabb]

I am not sure that the hon. Lady will want to talk about jobs, because today’s figures show yet again that unemployment in Wales is falling, economic inactivity is falling, and employment is up. I do not really follow the logic of her question, but she should welcome today’s good news

[Kevin Brennan (Cardiff West) (Lab)]

3. What discussions he has had with Ministers in the Welsh Government on the measles outbreak in south Wales.

[The Parliamentary Under-Secretary of State for Wales (Stephen Crabb)]

My noble Friend Baroness Randerson, the Parliamentary Under-Secretary of State for Wales, will be meeting the Welsh Government Minister for Health to discuss the matter further, and we remain in very close contact with Welsh Government officials. While this is a devolved matter, I share the concerns of the local community and I encourage those not yet vaccinated to do so.

[Kevin Brennan]

Will the Minister join me in praising the response of NHS Wales to the measles outbreak? In addition, will he urge those who have not taken up the MMR vaccine to do so immediately, particularly given the reports from Public Health Wales this week about outbreaks further east in Wales? Will he urge them to do that, so we can stop the spread of this dangerous disease?

[Stephen Crabb]

The hon. Gentleman is exactly right. It was very worrying to see the figures announced yesterday that more than 4,000 children in the Swansea area still have not been vaccinated. In Gwent, more than 10,000 children have not yet been vaccinated, and we have particular concerns about a measles outbreak in Gwent. It is absolutely right that Welsh Government public health officials are doing everything they can by making clinics available at the weekend and so on. The onus is now on parents to go out and get their children vaccinated.

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

Does the Minister agree that it is essential roundly to condemn the totally incorrect research done by Andrew Wakefield many years ago linking MMR with autism? It simply was not true, and now is the time to say he got it wrong and that everyone must have the MMR injection.

[Stephen Crabb]

My hon. Friend is also right. Dr Andrew Wakefield’s research has been discredited not just in this country, but by medical and scientific opinion throughout the world. There is no reason for parents to feel alarmed about the MMR vaccine, and there is plenty of dispassionate advice for them if they have concerns or questions. They should crack on now and get their children vaccinated.

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

Will the Minister commend the work of local authorities such as Bridgend working hand in hand with the Abertawe Bro Morgannwg university health board and running drop-in clinics in every school in the constituency? Does he agree with me, a father of three teenage boys, that the very best protection against this disease is for everyone not to be afraid and to turn up to these clinics and get all their children vaccinated against this terrible disease?

[Stephen Crabb]

The hon. Gentleman is exactly right as well. The response from public officials in Wales at all levels—Welsh Government, local authorities and within Public Health Wales—has been exemplary. They have done everything right so far, but we need to get the message out to the communities affected that parents with children not yet vaccinated urgently need to get them vaccinated.

[Mr Philip Hollobone (Kettering) (Con)]

4. What discussions he has had with the Welsh Government on the effects on the economy in Wales of the Government’s fiscal policies.

[The Secretary of State for Wales (Mr David Jones)]

I have regular discussions with the Welsh Government on economic issues. Action taken by the Government to deal with the deficit has helped keep interest rates at near record lows, helping families and businesses across Wales.

[Mr Hollobone]

How many people in Wales have seen their personal tax-free income tax allowances increase since May 2010, and how many small businesses in Wales are set to benefit from the new £2,000 national insurance employment allowance being introduced next April?

[Mr Jones]

The increase in the personal allowance announced by the Government will benefit 1.1 million taxpayers and remove 130 individuals from paying income tax altogether. More than 35,000 businesses in Wales will benefit from the national insurance employment allowance, with 20,000 of them being taken out of national insurance altogether.

[Albert Owen (Ynys Môn) (Lab)]

I welcome the drop in unemployment in Wales—that is in sharp contrast to unemployment in England—and credit must go to the jobs growth fund introduced by the Welsh Government. What practical steps are the Secretary of State and the Government taking to work with the Welsh Government to eradicate long-term unemployment, which is rising in north Wales and in his and my constituencies?

[Mr Jones]

The hon. Gentleman should also commend Welsh businesses, which are increasing the number of their employees, but certainly I am happy to commend initiatives by the Welsh Government. His point highlights the importance of the UK and Welsh Governments working closely together. That is something that we are prepared to do, and I expect to see reciprocation from the Welsh Government.

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

The UK Government-sponsored Silk commission recommended empowering the Welsh Government and Welsh local authorities with fiscal responsibility to incentivise economic development. Why were these recommendations not included in the Finance Bill or the Queen’s Speech in a Government of Wales Bill?

[Mr Jones]

As the hon. Gentleman will know, the Silk proposals are still under consideration by the UK Government. We have always made it absolutely clear that we will announce our response to Silk this spring, so we will issue that response in the next few weeks.

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

6. What assessment he has made of the potential for co- operation between enterprise zones in England and Wales.

[The Secretary of State for Wales (Mr David Jones)]

I see great potential in a joined-up approach to enterprise zones in England and Wales. Co-operation will enhance the offer that each of the zones presents, and I will continue to engage with the Welsh Government to explore these opportunities.

[Stephen Mosley]

Today’s unemployment figures show that the Chester and north-east Wales economic sub-region is becoming a jobs powerhouse in the local area. By working together, the three enterprise zones in the area—Deeside, Wirral and Daresbury—can pack a stronger punch than if they act individually. Will the Secretary of State ensure that local authorities work together to pack that bigger punch?

[Mr Jones]

I visited the Deeside industrial park forum last Friday, and that was very much the message I got from employers in that enterprise zone. There is far more to be gained from the three enterprise zones working closely together. One of the catalysts for expansion of those zones would be electrification of the Wrexham to Bidston railway line, which is a matter that my office is working on.

[Ian Lucas (Wrexham) (Lab)]

I am delighted to hear that the Wrexham to Bidston line project is under consideration by the Secretary of State’s office. Will he convene a meeting of MPs and Assembly Members from north-east Wales, and of MPs from Cheshire, to discuss the project and what steps can be taken, using enterprise zones, to take it forward?

[Mr Jones]

I am pleased to hear the hon. Gentleman welcome that initiative. His proposal is certainly worthy of consideration. I am having a number of meetings in the immediate future with representatives of other enterprise zones, and in due course I will write to him and perhaps invite him to such a meeting.

[Alison McGovern (Wirral South) (Lab)]

It is indeed heartening to hear the Secretary of State speak supportively of the Wrexham to Bidston line upgrade project, which we want to see happen. Does he welcome Network Rail’s publication of its Long Term Planning Process, which sees connections between Wrexham and Liverpool being much improved, and can MPs from Merseyside also be invited to any such meeting he might convene?

[Mr Jones]

I am pleased to hear the hon. Lady’s comments. I think she would agree that electrification of the railway line between Liverpool and Wrexham would add greatly to the economies of north-east Wales, and Wirral and the north-west of England. It is important that we work with Merseyrail, and I hope to meet Merseyrail in the very near future. I am grateful to the hon. Lady for her support.

[Jonathan Evans (Cardiff North) (Con)]

7. What discussions he has had with his ministerial colleagues and others on the contribution of the M4 to the UK’s national transport infrastructure.

[The Secretary of State for Wales (Mr David Jones)]

I have regular discussions with ministerial colleagues, Welsh Ministers and others on the strategic importance of the M4 to the UK road network.

[Jonathan Evans]

Does my right hon. Friend agree that it is excellent news that the talks between the Welsh Assembly Government and the UK Government have resumed after 10 years of inactivity on this subject? Is he aware of the recent remarks of the director general of the CBI, who indicated that progress on this issue, coupled with electrification of the line through to Swansea, would represent the biggest investment in the Welsh economy for a generation?

[Mr Jones]

I certainly agree with that. Furthermore, I would point out that the M4 is an extremely important UK national asset and it is a great pity that it was not upgraded long ago. Recently, I have had discussions with Welsh Assembly Ministers on this issue, and I hope that we will be able to make further progress.

[Geraint Davies (Swansea West) (Lab/Co-op)]

Will the Secretary of State press the Treasury to invest now in the M4 above Newport and Port Talbot, going westwards, and to reduce the Severn bridge tolls, to give a real stimulus to the south Wales economy?

[Mr Jones]

I am heavily engaged with the Treasury on that very issue. However, I must point out to the hon. Gentleman that the road network in Wales is a devolved competence, and it is a great shame that the Welsh Government have not attended to this problem sooner, before the situation declined to the extent that it has. We are certainly engaged with the Treasury, and I hope that we will be able to make announcements in the future.

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

Does my right hon. Friend agree that the M4 in south Wales is in desperate need of improvement, to relieve congestion that is hampering economic development there?

[Mr Jones]

Yes, the congestion on the M4 is causing significant difficulty to Welsh commerce and, of course, to Welsh motorists. I repeat that it is a great pity that the Welsh Government did not carry out their statutory function by upgrading that road long ago. This is a matter on which I am engaged with the Welsh Government, and I hope we will be able to make further announcements in due course.

[Wayne David (Caerphilly) (Lab)]

Will the Government introduce road tolls on the new M4 relief road?

[Mr Jones]

I must point out that the Assembly Government already have the competence to introduce road tolls, under the Transport (Wales) Act 2006. That is, of course, a matter for the Assembly Government.

[Roger Williams (Brecon and Radnorshire) (LD)]

8. What discussions he has had with his ministerial colleagues and others on increasing the accessibility of educational institutions in Wales to students from overseas.

[Mr Mark Williams (Ceredigion) (LD)]

10. What discussions he has had with his ministerial colleagues and others on increasing the accessibility of educational institutions in Wales to students from overseas.

[The Parliamentary Under-Secretary of State for Wales (Stephen Crabb)]

A thriving higher education sector is vital to our economy and I recognise the significant contribution that overseas students make to the sector. The reforms we have introduced have tackled abuse of the student migration system while protecting universities, to ensure that they can continue to attract the best and the brightest.

[Roger Williams]

I am sure that the Minister will want to join me in congratulating Swansea university, whose pro-vice chancellor I met last night, on the start of its new, second campus, which will house 5,000 students. Will my hon. Friend make every effort to publicise the fact that Welsh universities are open for business and open to applications from overseas students?

[Stephen Crabb]

My hon. Friend is absolutely right. Welsh higher education institutions attract a greater proportion of overseas students than similar institutions in England, Northern Ireland or Scotland; they are at the forefront of attracting overseas students. My right hon. Friend the Secretary of State visited the new campus at Swansea university recently; it illustrates the strong offer that the university now has.

[Mr Mark Williams]

Notwithstanding the Government’s necessary direction of travel on immigration policy as set out in the Queen’s Speech, may I ask my hon. Friend to endorse the work of Aberystwyth university, which plans to treble the number of its overseas students by 2017? That will be essential for the local economy, and for building links with emerging economies throughout the world.

[Stephen Crabb]

Aberystwyth is another university with an extremely strong track record of attracting overseas students. In fact, in an international survey of students, it was voted the best overseas university for student satisfaction and the best place to live. It is front and centre of our efforts to attract more overseas students.

[Nick Smith (Blaenau Gwent) (Lab)]

What discussions has the Minister had with the Home Office about the impact on higher education institutions in Wales of 42,000 fewer students coming to the UK?

[Stephen Crabb]

There is a constant close dialogue between us, the Home Office and the Minister for Universities and Science about how we can attract more overseas students to the UK. I do not know what figures the hon. Member for Blaenau Gwent (Nick Smith) has seen, but if he looks at the figures for overseas students coming to Wales, he will see that there has been a 73% increase in the past five years, and those numbers are continuing to go up. [Interruption.]

[Mr Speaker]

Order. There is a large number of extremely noisy private conversations taking place, including among those on the Opposition Benches, who I am sure will now wish to hear Jessica Morden.

[Jessica Morden (Newport East) (Lab)]

9. What assessment he has made of the effects of the Government’s welfare policies on disabled people in Wales.

[The Parliamentary Under-Secretary of State for Wales (Stephen Crabb)]

The introduction of the personal independence payment will ensure that we provide more targeted support to those who need it most. Under our reforms, a greater proportion of disabled recipients will get the higher levels of support compared with disability living allowance.

[Jessica Morden]

In Wales, 25,000 disabled people will be hit by the bedroom tax, more than 40,000 are set to lose their disability living allowance and more than 50,000 will see their benefits reduced. Does the Minister agree with Disability Wales that a cumulative impact assessment of the Government’s welfare changes is urgently needed?

[Stephen Crabb]

I suggest that the hon. Lady looks at the cumulative impact of the range of welfare reforms that we are bringing in. Under universal credit, 200,000 households in Wales will see their entitlement go up by about £140 a month, and a large proportion of the people currently receiving disability living allowance in Wales will also see their entitlement go up. She should not necessarily believe the scaremongering from Opposition Members.

[Michael Fabricant (Lichfield) (Con)]

11. If he will consider proposing an alternative name for the National Assembly for Wales as part of the Government’s response to the Commission on Devolution in Wales; and if he will make a statement.

[The Secretary of State for Wales (Mr David Jones)]

The Government have no plans to change the name of the National Assembly for Wales.

[Michael Fabricant (Lichfield) (Con)]

In the light of the Silk review, which is likely to give fundraising powers to the National Assembly, does the Secretary of State not agree with me—and, more importantly, with the leader of the Welsh Conservatives, Andrew R. T. Davies—that now is the time to consider calling it the Welsh Parliament?

[Mr Jones]

Well, have I got news for my hon. Friend! The Silk commission has not yet completed its work; it will report in the spring of next year. The title “National Assembly” is used by the primary legislatures of countries such as France and South Africa, and also by the regional legislature of Quebec. The issue is what the legislature does, rather than what it is called.

[Karen Lumley (Redditch) (Con)]

12. What assessment he has made of the potential effects in Wales of the reduction in the rate of corporation tax to 20%.

[The Secretary of State for Wales (Mr David Jones)]

In total, the main rate of tax is set to fall by 8 percentage points under this Government. The United Kingdom will have the lowest rate in the G20, lower than most of our main competitors.

[Karen Lumley]

As well as reducing corporation tax, what else can the Government do to help small businesses in Wales?

[Mr Jones]

The reduction in corporation tax will be of immense benefit to Welsh small businesses. The Budget did, of course, announce that the national insurance employment allowance will benefit 35,000 businesses in Wales, with 20,000 of them taken out of paying national insurance contributions altogether.

[Susan Elan Jones (Clwyd South) (Lab)]

13. What assessment he has made of the effects of the Government’s policies on the living standards of people in Wales.

[The Secretary of State for Wales (Mr David Jones)]

This Government are committed to supporting those on low and middle incomes and to assisting growth by putting more money in the pockets of ordinary taxpayers. For example, the cumulative effect of this Government’s announced increases to the income tax personal allowance will result in a cash gain of £705 per annum for a typical basic rate taxpayer.

[Susan Elan Jones]

Some 400,000 individuals across Wales will face real-terms cuts in tax credits and benefits at a time when 13,000 millionaires across the UK will get a tax cut. Does the Secretary of State think this is right—yes or no?

[Mr Jones]

What I would say is that those on higher earnings will be paying more tax under this Government than they did during any year of the last Labour Government. We are supporting families with lower taxation and we are reducing the tax burden progressively; it would appear that the hon. Lady’s party has no interest at all in supporting the interests of hard-working families.

The Prime Minister was asked—

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

Q1. If he will list his official engagements for Wednesday 15 May.

[The Deputy Prime Minister (Mr Nick Clegg)]

I have been asked to reply. My right hon. Friend the Prime Minister—[Interruption.]

[Mr Speaker]

Order. The Deputy Prime Minister must be heard—from the start of the session to the end of the session.

[The Deputy Prime Minister]

I have been asked to reply. My right hon. Friend the Prime Minister is visiting the United States for meetings with President Obama, making the case for a transatlantic trade agreement between the United States and the European Union and chairing the high-level panel on development in New York today. This morning, I had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall have further such meetings later today.

[Tristram Hunt]

I thank the Deputy Prime Minister for his answer. If Conservative Members of Parliament do not have to support the Government on Europe, why do Liberal Democrat MPs have to support the Government on tripling tuition fees, top-down reorganisation of the NHS, the bedroom tax and all the other wretched policies of this Government?

[The Deputy Prime Minister]

Liberal Democrats, and indeed Conservatives, are working together to clear up the mess left by the hon. Gentleman’s party. It is this Government who are delivering more apprenticeships than ever before, delivering a cap on social care costs, delivering a decent state pension for everybody and clearing up the mess in the banking system left by that man there—the right hon. Member for Morley and Outwood (Ed Balls)—and so many other people on the Labour Benches.

[Mr Peter Bone (Wellingborough) (Con)]

Will the Deputy Prime Minister confirm that the only party in this House offering an in/out referendum is the Conservative party?

[The Deputy Prime Minister]

I know the hon. Gentleman hates to be reminded of things that he and I have actually done together when we have been on the same side of the argument, but we spent 100 days in the early part of this Parliament passing legislation, opposed by the Labour party, that for the first time ever gives a guarantee in law about when a referendum on Europe will take place—when the rules next change or new things are asked of the United Kingdom within the European Union. The hon. Gentleman and his colleagues in the Conservative party are perfectly free for their own reasons to move the goalposts, but this legislation is in place and the people of Britain have a guarantee about when a referendum will take place, and that is what I suggest we should all go out and promote.[Official Report, 16 May 2013, Vol. 563, c. 7-8MC.]

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

I am sure that everyone is thrilled to see the Deputy Prime Minister and, of course, myself at the Dispatch Box today. This is meant to be Prime Minister’s questions, however, yet once again the Prime Minister is not here. Why is it that out of the last eight Wednesdays, the Prime Minister has answered questions in this House only once?

[The Deputy Prime Minister]

I think that the Prime Minister is unusually assiduous in coming to the House to make statements. I think that the leader who should be relieved that there is no Prime Minister’s Question Time today is the leader of the right hon. and learned Lady’s party. I am still reeling with dismay over the fact that recently, on Radio 4, he denied 10 times that borrowing would increase under Labour’s plans. Who said that there is not enough comedy on Radio 4?

[Ms Harman]

We have all seen what the Prime Minister has been doing in America. He has been on a London bus in New York—something, incidentally, that we do not see him doing a great deal when he is here. He has also been busy explaining to President Obama the benefits of Britain’s membership of the European Union. Why is he able to do that in the White House, but not in this House?

[The Deputy Prime Minister]

To be fair to the Prime Minister—notwithstanding our other differences on this subject—I think that he has always made it clear that he believes in continued membership of the European Union, if it is a reformed European Union.

There is a fundamental debate that we need to have in this country about whether we are an open or a closed nation, and about whether or not we stand tall in our European neighbourhood. That debate will continue, and the Prime Minister will continue to make his views known.

[Ms Harman]

It is indeed an important debate, and we have an important vote on an amendment to the Queen’s Speech tonight, but the Prime Minister is out of the country. Can the Deputy Prime Minister help the House? If the Prime Minister were here today, would he be voting for the Government or against the Government, or would he be showing true leadership and abstaining?

[The Deputy Prime Minister]

The right hon. and learned Lady has used three questions to point out that the Prime Minister is not here. That is a striking observation—a penetrating insight into the affairs of state today.

Just two years ago, the right hon. and learned Lady’s party rejected an opportunity to vote on legislation that Government Members pushed through, giving the British people, for the first time, a copper-bottomed legal guarantee in relation to when a referendum would take place. Our position is perfectly clear; hers is not.

[Ms Harman]

This is an extraordinary situation. The Deputy Prime Minister has not told the House how the Prime Minister would have been voting if he were here. Is it that he does not know, is it because he does not want to tell the House, or is it because he thinks that the Prime Minister would probably have changed his mind by the time we would have been told?

While the Prime Minister is bogged down in confusion about Europe, people are suffering. Today’s figures show that unemployment is up. More people are out of work, and the number of people who have been out of work for more than two years is at its highest since 1997. So what is today’s excuse?

[The Deputy Prime Minister]

The right hon. and learned Lady has commented on today’s figures. Of course when anyone is without work it is an individual tragedy, and we must always work to bring unemployment down, but I think that she is giving the House a somewhat partial snapshot. Full-time unemployment is actually up by 10,000 this quarter, more people are employed in the private sector than ever before, employment has risen by 866,000 since the election, and the number of women employed is the highest that it has ever been. Is that not something that the right hon. and learned Lady should celebrate rather than denigrate?

[Ms Harman]

We see complete complacency while things are getting worse. The fact is that even those who are in work are worse off. Wages are falling behind prices, and figures from the Institute for Fiscal Studies show that as a result of all the Deputy Prime Minister’s changes, families on lower and middle incomes are worse off. Will he own up to that? Will he admit it?

[The Deputy Prime Minister]

Complacency? This from a party that crashed the British economy, went on a prawn cocktail charm offensive—sucking up to the banks—which led to the disaster in the banking system in the first place, and operated a tax system under which a cleaner would pay more tax on his or her wages than a hedge fund manager would on his or her shares?

Under this Government, the richest are paying more in taxes every year than they did under Labour. Under this Government, 24 million basic rate taxpayers will be £700 better off next year than they were under Labour. Under this Government, as of next April, nearly 3 million people on low pay will be taken out of income tax altogether. How about that for a record to be proud of?

[Ms Harman]

So the right hon. Gentleman votes for a tax cut for millionaires and then comes to the House and says the rich will be paying more. Three years into this coalition Government everyone knows that the country faces big problems, and what do we have? We have a Prime Minister who is not just indecisive, not just weak, but fast becoming a laughing stock.

[The Deputy Prime Minister]

The right hon. and learned Lady mentions—as Labour party Members often do—the upper rate of income tax. Under us, it is 45p.

[Sir Bob Russell (Colchester) (LD)]

It was 40p under Labour.

[The Deputy Prime Minister]

Hang on; my hon. Friend is a great enthusiast. What was the rate under Labour? What was it for 13 years? Was it 50p? No. Was it 45p? No. The Labour rate was 40p, which is 5p lower. They let the richest in this country off the hook; we didn’t.

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

Given the Liberal Democrats’ commitment to a European Union referendum, will my right hon. Friend see fit to help facilitate Government time for a private Member’s Bill on the subject, should that become available?

[The Deputy Prime Minister]

As my hon. Friend knows, my party has always believed there should be a referendum on Europe when the rules change and when new things are being asked of the United Kingdom within the European Union. That is what we had in our last manifesto, and that is what we have now acted on in government by passing legislation, together in the coalition, just two years ago giving an absolute legal guarantee in legislation for the first time ever that when the rules change, there will be a referendum. By the way, I think it is a question of when, not if, because the rules are bound to change. I would just simply suggest that we should stick to what we have done as a Government in giving that guarantee to the British people, rather than constantly shift the goalposts.

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

Q2. Perhaps the Deputy Prime Minister shares my dismay at allegations of price fixing in the oil market. If so, will he explain why he has consistently opposed Opposition amendments for proper regulation of oil and commodity prices by the Financial Conduct Authority? Will he now accept that he was wrong, accept the amendments from this side of the House, and get petrol and diesel prices at the pump reduced?

[The Deputy Prime Minister]

That is yet another example of astonishing amnesia. What happened for 13 years? Did the hon. Gentleman or any Labour Front-Bench Members do anything? The investigation into alleged price rigging—and, by the way, it is very important that the oil companies concerned should of course co-operate with a European Union institution that is doing very good work on behalf of British consumers—stretches right back to the years when Labour was in power. What on earth did it do? Once again, it was asleep at the wheel.

[Margot James (Stourbridge) (Con)]

I am sure the Deputy Prime Minister shares the widespread revulsion at the perpetrators of the crimes against the young and vulnerable girls in Oxford. Does he agree that we now look to the courts to impose the severest possible penalties against these evil men, so that those poor girls can get the justice they were denied by the police and the local authority?

[The Deputy Prime Minister]

I am sure my hon. Friend speaks on behalf of everybody in this House, not only about the sense of revulsion at these truly evil acts, but about the fact that we should pay tribute to the courage of these young women. The innocence of their childhoods was so horridly destroyed by this evil gang, and we must all pay tribute to the courage it must have taken for them to come forward and give evidence. I certainly agree with my hon. Friend that lessons should be learned particularly about how the police forces and social services work together, and that these people should be handed down the severest possible sentences in response to this reprehensible crime.

[Toby Perkins (Chesterfield) (Lab)]

Q3. The Deputy Prime Minister talks about the individual tragedy of unemployment, but a year ago this Government made thousands of Remploy disabled workers unemployed, and 69% of them are still unemployed. They wanted to work, but it is costing the Government more to keep them on the dole. Does that not show that the Government are not just heartless, but utterly incompetent?

[The Deputy Prime Minister]

As I hope the hon. Gentleman knows, the approach we have taken to Remploy was in response to independent recommendations made by senior figures active in the area of disability and the rights of those with disabilities. The recommendation that came through was very clear: that it is simply not right to say to people with disabilities that somehow they should be hidden away and put in a separate silo, and we should do what we can to give them support to be part of the mainstream labour market along with everybody else. That is why we have not in any way cut the support for those workers in Remploy factories as they make the transition from those factories into the world of mainstream work.

[Mr Andrew Turner (Isle of Wight) (Con)]

Q4. Does not the Deputy Prime Minister recall that at the election he promised to go for an in/out referendum? That has not taken place yet. Does he understand that residents of the Isle of Wight, and many from elsewhere, would feel betrayed if the Liberal Democrats did not now support an amendment regretting that a referendum is not included in the Gracious Speech?

[The Deputy Prime Minister]

As my hon. Friend knows, our commitment was for a referendum when there is a fundamental change in the relationship—[Interruption.] Read our manifesto—I have. I helped to write it, and I can guarantee that that is what it says, and we have acted on that. I have an old-fashioned view—[Interruption.]

[Mr Speaker]

Order. I do not think the Deputy Prime Minister particularly minds being shouted at, but I do not want him to be shouted at excessively. The House should hear his answer, and certainly the people of the Isle of Wight should hear his answer.

[The Deputy Prime Minister]

That is very kind of you, Mr Speaker, thank you.

I have an old-fashioned view that when a Government put forward a Queen’s Speech that has a lot of good things in it—a cap on social care costs, a decent single-tier pension for everybody and a cut in national insurance contributions for employers to create jobs—we on this side of the House should go out and promote it and not spend days bemoaning what is not in it.

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

The police in Northern Ireland have stated that if the National Crime Agency is unable to operate fully in Northern Ireland it will have a detrimental impact on their ability to keep the people of Northern Ireland safe and to combat serious and organised crime. Surely no political party in Northern Ireland has a right to gamble with the safety of the people of Northern Ireland, so what do the Government propose to do to ensure that no one is able to hold the people of Northern Ireland to ransom and make Northern Ireland an easy target for international crime?

[The Deputy Prime Minister]

I am sure everyone shares my instinct that, as with all sensitive issues in Northern Ireland, the more we can talk across parties and across traditional divides and hostilities, the more we promote the prosperity and security of the people of Northern Ireland and of the people of the United Kingdom as a whole.

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

Q5. This Government have helped motorists in my constituency by cutting fuel duty by 13p on the mainland and 18p on the island, compared with Labour’s disastrous plans. Now that the European authorities are investigating the oil companies, will the Government ensure that oil companies here obey the rules and end any price fixing that might be going on? It is important that the Government’s good policy on fuel duty means that the benefit ends up in the pockets of the motorists, not the oil companies.

[The Deputy Prime Minister]

I am grateful to my hon. Friend for reminding the House that the price of fuel on the forecourt would be 13p higher under the plans embarked on by the Labour party—[Interruption.] Labour Members hate to hear this and to be reminded of it, but I am afraid it is true—the price would be 13p higher, which would be a crippling additional cost of living for millions of people in this country. I agree with him that the large oil companies now under investigation for these allegations should, of course, fully co-operate with the European Commission.

[Jim McGovern (Dundee West) (Lab)]

May I put a question to the Deputy Prime Minister that might go against the grain for me? I have been vociferous in my support for the Remploy organisation. Unfortunately, the Remploy factory in my constituency is earmarked for closure, and members of the work force received letters in March advising them to seek alternative employment. Some of them have done so successfully, but on Monday they were given an interview and told that they would not be allowed to leave their employment with Remploy and, if they insisted on doing so, they would not receive the severance package offered to every other member of the work force. Will the Deputy Prime Minister look into this?

[The Deputy Prime Minister]

Of course—I am sure that my right hon. Friend the Secretary of State for Work and Pensions will look into the specific issues that the hon. Gentleman raises. As I said in response to the earlier question, the thinking behind this is of course to ensure that those who work in Remploy factories find gainful employment in mainstream work. That is the recommendation that came not from the Government but from independent observers; they said this is the best way to ensure that we do not ghettoise those with disabilities in the labour market, and that is what we will continue to work towards.

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

Q6. Millions of people are struggling with their electricity bills and our electricity infrastructure is creaking. We have a solution in Wigton, where we are developing a smart grid that will make our electricity more reliable and more affordable. Will the Deputy Prime Minister commit to visiting Wigton and make the bold investment to roll a true smart grid out across the country?

[The Deputy Prime Minister]

I would like to convey my congratulations to the hon. Gentleman and to all those in Wigton who have launched this smart energy pilot project. I am delighted to hear that it has elicited so much enthusiasm from the local community. It is, as he says, the first step towards creating a smart energy community. I know that officials from the Department of Energy and Climate Change have met the pilot’s network provider to discuss its benefits, and if it works it is exactly the kind of thing that we should seek to extend to other parts of the country.

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

Q7. Replying to earlier questions, the Deputy Prime Minister blamed everybody but himself and his Government for the fixing of fuel prices. I am old enough to remember the Prices Commission, which ensured that the price of petrol and other commodities was the same across the whole land. Asda is able to do that, but the oil companies are price fixing in my constituency and elsewhere. Also, this Government have introduced an increase in the VAT on fuel. What is he going to do about all that?

[The Deputy Prime Minister]

As I said, we have scrapped the fuel price hikes that were planned and decided upon by the previous Government, but of course allegations of price manipulation are incredibly serious. I am pleased that the European Commission is taking the matter so seriously and it is very important for us and for our constituents, for whom petrol, diesel and fuel prices are an incredibly important part of the weekly and monthly household budget, that those companies now engage seriously in looking at the allegations put to them by the European Commission.

[Mr Edward Leigh (Gainsborough) (Con)]

I have here a leaflet issued by the Liberal Democrats at the time of the passage of the Lisbon treaty. On the front page is a man posing as one Nick Clegg, who says:

“It’s time for a real referendum on Europe”—

an in/out referendum, not a referendum on a treaty change. Was that man an impostor or just a hypocrite?

[The Deputy Prime Minister]

That man, whom I believe to be me, was stating something then that my party has restated ever since: that we should have a referendum on Europe when the rules change. We said that— [Interruption.] We said that at the time—[Interruption] We said that at the time of the Lisbon treaty and we said it in our manifesto. We even legislated on it, and we will say it again. [Interruption.]

[Mr Speaker]

Order. Mr Gray, I was thinking of calling you to ask a question, but if you continue to misbehave, I might not.

[Ian Murray (Edinburgh South) (Lab)]

Q8. Does the Deputy Prime Minister agree with me, the late Baroness Thatcher, senior Government members on the Business, Innovation and Skills Committee, the Liberal Democrat manifesto, the Minister in charge of the Royal Mail and his own Government, and does he still agree with himself, that the privatisation of the Royal Mail is a step too far?

[The Deputy Prime Minister]

We should welcome the innovative way in which we are seeking to give workers in Royal Mail a stake in the company. The hon. Gentleman’s party used to believed in worker ownership, but as on so many other issues it is still a blank sheet of paper when it comes to public policy of any significance. The Government are moving forward; the Opposition are standing still.

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

I have to tell my friend that I cannot support the decision of the Prime Minister to go to the Commonwealth Heads of Government conference in Sri Lanka because of the human rights record of the Sri Lankan Government. What can the Deputy Prime Minister tell us about how we can respond to that terrible regime’s record? What can we do to make sure that in future the Commonwealth does not just say it believes in human rights, but does something about it?

[The Deputy Prime Minister]

We are all aware that the decision that the Prime Minister and the Foreign Secretary will attend the upcoming Commonwealth Heads of Government meeting in Sri Lanka is controversial, especially in the light of the despicable human rights violations during the recent civil war. But I assure my right hon. Friend that the Government condemn those violations, the way in which political trials, regular assaults on legal professionals and suppression of press freedom continue, and the fact that too many recommendations of the lessons learnt and reconciliation commission have not been implemented. If such violations continue, and if the Sri Lankan Government continue to ignore their international commitments in the lead up to the Commonwealth Heads of Government meeting, of course there will be consequences.

[Helen Jones (Warrington North) (Lab)]

Q9. When the Deputy Prime Minister spoke about youth unemployment in 2011, he said that “the coalition won’t sit on our hands and let a generation fall behind.” Now that we know that long-term youth unemployment has trebled under this Government, why is he sitting on his hands and refusing to match Labour’s jobs guarantee? Is it because he has no influence in government or because he does not care?

[The Deputy Prime Minister]

On the day in which youth unemployment declined, in view of the fact that youth unemployment went up remorselessly year after year after year in the latter half of the Labour Administration, and given that this Government are introducing a £1 billion Youth Contract, which gives everyone between the ages of 18 and 24 who has been out of work for a certain period the opportunity to take up an apprenticeship, subsidised work or a place on work experience, it is pretty rich for the hon. Lady to lecture us about the problems of youth unemployment.

[Nigel Adams (Selby and Ainsty) (Con)]

Has the Deputy Prime Minister had time to reflect on this week’s analysis of Yorkshire’s top 150 companies by the accountancy firm BDO, which shows that in the last year businesses in Yorkshire have seen an increase in revenues of £5 billion, that investment is up 20%, that exports to emerging markets are up 50%, and that 10,000 new jobs have been created?

[The Deputy Prime Minister]

As an MP for a great Yorkshire city, I of course want to join my hon. Friend in celebrating the great achievements of businesses in Yorkshire, particularly the rebirth of so many great manufacturing companies. I am immensely proud that this Government have been backing manufacturing, after years of neglect under Labour.

[Mr Stephen Hepburn (Jarrow) (Lab)]

Q10. The Government’s much trumpeted Mesothelioma Bill was introduced last week, but only those diagnosed after 25 July 2012 will be compensated. Does the Deputy Prime Minister agree that it is wrong and unfair that the leeches in the insurance industry who are bankrolling the Tory party are getting away with millions and millions, when working class people who have been negligently poisoned by their employers are getting away with nothing?

[The Deputy Prime Minister]

What does the hon. Gentleman think happened for 13 years under Labour? I am hugely sympathetic, as I am sure everybody is, to the plight of people who are unable to trace a liable employer or insurer against whom they can bring a claim. We announced our intention to bring forward legislation to introduce the scheme on 25 July 2012, and it is from that date that people have a reasonable expectation that if they are diagnosed with asbestos-related cancer and they meet the eligibility criteria they will receive a payment. But because we have also decided to pay dependants of people who have died from that cancer, the scheme will not be able to pay dependants of every person who has died, and that is why we have taken the approach we have.

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

The Deputy Prime Minister is a great democrat as well as a Liberal, and I salute him for that. Will he therefore stand by the precise wording in this very fetching Liberal Democrat leaflet that I happened to find on my desk this morning, which says:

“Only a real referendum on Britain’s membership of the EU will let the people decide our country’s future.”

Will he now stand by that solemn pledge to the people of Britain and join us in the Lobby tonight?

[The Deputy Prime Minister]

I fully stand behind the position that I took then and my party has taken ever since, that when there is a change in the rules and new things are asked of the United Kingdom within the European Union, there should and there will be a referendum. Not only that, we have done better since we issued that leaflet in 2008: we legislated to guarantee that to the British people for the first time in primary legislation just two years ago. We spent 100 days debating that in this House at the time. If my hon. Friend wants to reinvent it all over again and keep picking away at the issue, what will he give up from a fairly crowded Queen’s Speech? Will he tell his constituents that we will not put a cap on social care costs; we will not deliver a single tier pension; we will not pass legislation to have a national insurance contribution cut for employers? I think that we should stick to the priorities of the British people, which are growth and jobs.[Official Report, 16 May 2013, Vol. 563, c. 8MC.]

[Naomi Long (Belfast East) (Alliance)]

Q11. Three of my young constituents, Emma Carson, Emma Magowan and Sophie Ebbinghaus, recently presented me with posters they had made supporting the IF campaign. They asked me to tell the Prime Minister of their concerns for boys and girls growing up without enough food to survive. Unfortunately, he is not here, but what assurances can the Deputy Prime Minister give them that the forthcoming G8 summit in Northern Ireland will deliver real action to ensure that there really is enough food for everyone?

[The Deputy Prime Minister]

Like the hon. Lady and many Members on both sides of the House, I am a huge supporter of the IF campaign, and I attended its launch here in Westminster, as did many hon. Members. Of course it is a total scandal that in 2013 nearly 1 billion people globally are hungry or malnourished. I am delighted about the co-operation between all the different campaign groups in the IF campaign and the Government in pushing forward a radical agenda, which has never really been tried before, in the G8, under our presidency, to ensure tax fairness and proper transparency in the way primary resources are exploited in the developing world and the way trade works for the poorest around the planet. That is why we will work hand in hand with the IF campaign during our G8 presidency.

[Stephen Lloyd (Eastbourne) (LD)]

Q12. In 2008 the Independent Reconfiguration Panel made a series of recommendations in response to an attempt by my local NHS trust to downgrade maternity services at Eastbourne district general hospital. The IRP recommendations were, in my view and those of eminent local clinicians, never properly introduced, which has now led to safety issues that, perversely, have enabled the trust to implement the service changes that were originally rejected by the IRP. Will the Deputy Prime Minister look at addressing that anomaly and ensure that hospitals implement IRP recommendations robustly and that that is audited, including at Eastbourne district general hospital?

[Mr Speaker]

Order. There is probably scope for an Adjournment debate on the back of that, so let us have a brief answer.

[The Deputy Prime Minister]

I pay tribute to my hon. Friend for all his work on behalf of his local community in relation to his local hospital. My understanding is that the changes to maternity services at Hastings hospital are temporary and that, of course, no permanent changes will be made without full public consultation. He makes an important point about the role of the Independent Reconfiguration Panel and I will ask the Secretary of State for Health to discuss the matter further with him.

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

In answer to the question the right hon. Member for Bermondsey and Old Southwark (Simon Hughes) asked on Sri Lanka, the Deputy Prime Minister gave a long list of atrocities committed by the Sri Lankan Government. Why, then, are his Government going to the Commonwealth Heads of Government summit in Sri Lanka, why are they announcing that six months ahead of time, and why do they want to see an alleged war criminal as Chair of the Commonwealth?

[The Deputy Prime Minister]

I think that we all accept the controversy and unease about this matter, but by attending the Commonwealth Heads of Government meeting in Sri Lanka we will be using the opportunity to cast a spotlight on the unacceptable abuses there. As I said earlier, of course there will be consequences if the conduct of the Sri Lankan authorities does not change. The Commonwealth matters to us all, and it is based on a number of values. Where I accept the hon. Lady’s implicit criticism is in relation to this point: all Commonwealth Governments should do more to not only talk about those values, but ensure that they are properly monitored and enforced.

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

Q13. The Special Olympics movement showcases the abilities and achievements of learning-disabled athletes around the world while delivering positive inclusion, education and health outcomes. The British Special Olympic games will take place this summer in Bath. Will the Deputy Prime Minister assure me that the Government are doing all they can to spread the legacy from last year’s Olympics across all disability sports, including the Special Olympic games?

[The Deputy Prime Minister]

Yes, I can give my hon. Friend that assurance. As he knows, last summer my right hon. Friend the Prime Minister appointed Lord Coe to be his legacy ambassador. A Paralympics legacy advisory group has also been established. I know that Lord Coe’s team is meeting Special Olympics GB shortly to discuss potential links between the London 2012 legacy and the national games to be held in Bath later this summer.

Petrol Prices

Wednesday 15th May 2013 Commons Chamber

12:35

[The Secretary of State for Energy and Climate Change (Mr Edward Davey)]

With permission, Mr Speaker, I would like to make a statement on petrol prices and the cost of living.

On 14 May, officials from the European Commission directorate-general for competition carried out unannounced inspections at the premises of several companies active in the crude oil, refined oil products and biofuels sectors, including Statoil, BP and Shell. The Commission has concerns that the companies may have colluded in reporting distorted prices to a price reporting agency to manipulate the published prices for a number of oil and biofuel products. Any such behaviour, if established, may amount to violations of European antitrust rules that prohibit cartels and restrictive business practices and abuses of a dominant market position.

This Government are deeply concerned by any allegation that prices for consumers could have been artificially or unnecessarily driven up. The UK Government and regulators will provide any assistance necessary to the European investigators, and we expect the companies concerned to fully comply with these investigations. However, these investigations are at an early stage and the Commission has made it clear that investigations do not imply guilt. Until the facts are clear, it would be inappropriate to comment further on this investigation. I should also be clear to the House that these investigations are not directly linked to the allegations of market manipulation in the gas markets, which Ofgem and the Financial Services Authority are continuing to review.

This Government believe strongly that it is in our mutual interest for motorists and businesses to be confident that they are being treated fairly, and that when wholesale costs come down, these reductions are passed on transparently and without unnecessary delay. That is why we welcomed the Office of Fair Trading’s decision to look into the market for road fuels in late 2012. At that time, the OFT did not receive evidence on the impact on pump prices of potential manipulation of derivatives markets and the accuracy of reported prices of crude and wholesale road fuel that built the case for such an investigation. However, it did set out that it believes such manipulation is possible and encouraged market participants to approach the OFT and FSA, as appropriate, if they had evidence of such practices.

In a case such as this, where there are potentially cross-border issues, it is more appropriate for the Commission to lead the investigation. The OFT has and will continue to co-operate fully with the Commission.

This Government have taken direct action to ease the burden on motorists. Due to action taken in this year’s Budget, fuel duty will have been frozen for nearly three and a half years, the longest duty freeze for over 20 years. That builds on previous action to cut fuel duty, abolish the previous Government’s fuel duty escalator, introduce a fair fuel stabiliser and scrap two increases planned by the previous Government. As a result of Government actions, average pump prices are 13p per litre lower than if the Government had implemented the fuel duty escalator, and they are forecast to be 18p per litre lower by the end of the Parliament. Furthermore, as reported by the OFT, the UK consistently has among the lowest pre-tax petrol and diesel prices in Europe.

In the OFT’s investigation it identified an absence of pricing information on motorways as a concern and did not rule out taking action in some local markets if there is persuasive evidence of anticompetitive behaviour. The Government are now acting on this recommendation and increasing transparency of motorway fuel prices.

More widely, this Government’s reform of the competition regime will improve the speed, robustness and independence of decision making in UK competition enforcement. Creating a single Competition and Markets Authority and modernising its competition toolkit will improve markets and help consumers and businesses by providing greater coherence in competition practice and a more streamlined approach to decision making. The Government are also publishing a draft consumer rights Bill to give consumers clearer rights in law and to ensure that consumer rights keep pace with technological advances. That will give consumers greater confidence to take up new products, switch suppliers and make online purchases.

Although we cannot control volatile world energy prices, we can still help people get their bills down. The easiest ways to get energy bills down quickly are to get consumers paying the lowest possible tariffs and to reduce the amount of energy that is wasted.

We are ensuring that all households get the best deal for their gas and electricity by using the Energy Bill to give statutory backing to Ofgem’s retail market review proposals. Those proposals require energy suppliers to move consumers on poor value dead tariffs to the cheapest standard variable rate tariff, so that no customers are left behind on a poor value, out-of-date tariff. They will also create a new tariffs framework to reduce the number of tariffs that suppliers can offer to four per payment method and simplify tariffs so that the market is much more manageable for consumers. Customers will have personalised information from their supplier on their bills about the cheapest tariff that the supplier offers and any savings that they could make by moving to it.

These proposals will put consumers in the driving seat, giving them clearer choices and incentivising companies to compete hard for their custom. We hope that Ofgem can keep to its projected timetable, which could see measures begin to be implemented from summer 2013, with full implementation expected by March 2014.

Through the green deal and the roll-out of smart meters, we are helping people to reduce the amount of energy that they use so that they can have warmer homes for less and lower bills than otherwise. We know that the poorest and the most vulnerable often struggle to pay their energy bills. Through direct payments, such as the winter fuel payment and the cold weather payment, we are helping them directly to manage their bills.

We are also determined to ensure that Ofgem has the necessary powers so that consumers do not lose out when energy companies break the rules. Although Ofgem can fine energy companies up to 10% of their annual turnover for breaking the rules, unless it can agree compensation for consumers with energy companies, such fines are currently paid into the Consolidated Fund. That is why we are legislating, through the Energy Bill, to give Ofgem consumer redress order powers. Those powers will fill the gap and give Ofgem a powerful weapon to ensure that consumers are treated fairly.

We take very seriously any allegations of price manipulation. The Government are determined to ensure that consumers and motorists get the best possible value for money. We will continue to take the necessary action to deliver value to the consumer.

12:42

[Caroline Flint (Don Valley) (Lab)]

With the greatest respect, I say to the Secretary of State that no amount of tariff simplification or sorting out retail at the pump will deal with the problem that we face today, which is allegations about how energy and petrol are bought and sold, and the way in which the market works.

The allegations that have been made about the three oil companies, BP, Royal Dutch Shell and Statoil, as well as the price reporting agency, Platts, are extremely concerning. They suggest that those companies have both colluded in reporting distorted prices and prevented others from participating in the price assessment process, with a view to distorting the published price. If the allegations are true, there has been shocking behaviour in the oil market which should be dealt with strongly. I therefore have three questions for the Secretary of State.

First, the Secretary of State will know that the OFT inquiry concluded at the end of January that the UK fuel market was operating fairly, and that a Competition Commission inquiry was not needed. Given the amendment that has been tabled for debate later today, it will not be lost on hon. Members that it is the European Commission, not any British authority, that is investigating this situation. In light of today’s allegations, will the Secretary of State say whether any British authorities have plans to revisit their own investigations? If the EU investigation uncovers any wrongdoing, it will raise serious questions about the effectiveness of our authorities.

Secondly, last year we tabled amendments calling for commodities such as oil and gas to be part of the Financial Conduct Authority’s regulatory net, but Ministers refused to act. We argued that the regulatory perimeter needed to be explicitly set out in the Financial Services Act 2012, and that it was insufficient just to add references to LIBOR. Does the Secretary of State now accept that the Office of Fair Trading and the FCA should be explicitly equipped to tackle attempts at rigging commodities trading, whether spot trading, forward contracts, futures contracts hedging or benchmark pricing indices?

Thirdly, when the allegations of price fixing in the gas market were made last year, we warned that opaque over-the-counter deals and a reliance on price reporting agencies left the market vulnerable to abuse. The latest allegations of price fixing in the oil market raise similar questions. I tabled a parliamentary question in February asking for an update on the earlier investigations, but the Government were unable to provide any more information. Can the Secretary of State give us any assurance that progress is being made, and that we will not need another EU investigation to get to the bottom of what is happening in the gas market?

As we all know, LIBOR was a massive scandal, but global commodity markets include a vast range of products, including grains, fibre, other food, precious metals and energy, affecting every household. Consumers need to know that the prices they pay for their energy or petrol are fair, transparent and not being manipulated by traders. I hope that the Secretary of State will assure the House that no stone will be left unturned to establish the truth behind the allegations.

[Mr Davey]

I thank the right hon. Lady for her reply. May I make it absolutely clear to her and the House that we take the allegations extremely seriously? If it turns out that hard-pressed motorists and consumers have been hit in the pocket by the manipulation of markets, the full force of the law should come down upon those responsible. Let there be no doubt about that.

However, I am surprised that the right hon. Lady wishes the Government to interfere directly in competition investigations. It was her Government who rightly moved competition authorities on to an independent basis. We believe it is very important to have independent competition authorities, because that strengthens their ability to act. [Interruption.] She asks from a sedentary position what they are doing, but arguably we could ask what they were doing under the Labour Government. I hope that we can get cross-party consensus that competition authorities should be independent.

It is good news that the European Commission directorate-general for competition has acted, and I would have thought that the right hon. Lady would welcome that. When there are cross-border allegations, it is important that the European Union can act.

The right hon. Lady asked whether we would act on the effectiveness of competition authorities. We have. Indeed, I was the competition Minister who proposed the changes to the competition regime inherited from the previous Government, which are strengthening it. Bringing in the Competition and Markets Authority will make our competition bodies and regime far more robust, so we have a very good record on the issue.

The right hon. Lady asked whether there should be wider powers to deal with commodities trading. An issue to be considered—we have seen it with LIBOR and the gas market manipulation allegations and now we see it today—is how price reporting agencies operate. They are unregulated bodies, as they were under the previous Government. She will know that the International Organisation of Securities Commissions has been looking into both price reporting agencies in general and oil markets specifically. It reported to the G20 last November, stating that it had potential concerns about the operation of the global market. It did not refer to any particular allegations of manipulation, but there is an ongoing debate, globally as well as in this country, about how we deal with price reporting agencies given that there have been instances of market manipulation. We are taking action; the previous Government did not.

The right hon. Lady’s final question was what was the state of play with respect to the Ofgem review of gas market manipulation. She described it as an investigation, but I clarify that it is a review of the allegations. She will also know that Ofgem is independent. We do not expect an independent investigator or regulator to give the Government day-by-day reports as that would go against its independent nature and reduce its power. I would be surprised if the Labour party wanted to reduce the power of our independent regulators. These are serious allegations, and we stand behind our independent competition authorities and believe they will take action on behalf of the consumer, as they should.

[Robert Halfon (Harlow) (Con)]

Despite the fact that the Government have cut and frozen fuel duty, prices at the pump have gone up by 60% since 2009. Last year a motion for a full OFT inquiry into price fixing by oil companies was passed unanimously in the House. We were approached by a whistleblower who suggested that the things we have seen over the past two days had been going on. Does my right hon. Friend agree that the OFT carried out a limp-wristed, lettuce-like inquiry, when it should have made a full 18-month inquiry into what has been going on? Does he also agree that if proved true, this is a national scandal for the oil companies concerned, and the Government should look at changing the law and put people in prison for fixing oil prices? This has caused misery for millions of motorists up and down the country. Finally, if the accusations are proved, will he impose harsh penalties on all oil companies involved and give the billions of pounds in penalties back to the motorist?

[Mr Speaker]

I have been generous with the hon. Gentleman, which I hope the House will realise, but I cannot help but feel that his appetite would be satisfied only by a full day’s debate on the matter. He will have to make do with what he has had so far.

[Mr Davey]

I am grateful for my hon. Friend’s questions, and I pay tribute to the way he has campaigned on this issue. He has made a big impact in the House and we have reacted to his campaigns with respect to fuel duty—something the Labour party never did. The OFT is a strong, independent body. It has powers and carried out its investigation. It received a call for information and it is responding to that. It made some warnings. As my hon. Friend knows, it was concerned about a number of areas, not least the transparency of petrol and diesel prices at motorway service stations, which I referred to in my statement. I know that as a result of that, my hon. Friend—indeed, the whole House—will be concerned to ensure that any evidence is put before the European Commission and the UK competition authorities. If any Members of the House or members of the public have such information, I call on them to pass it to the competition authorities.

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

My constituents in the Hebrides have felt ripped off by the highest fuel prices in the UK for years, and shockingly we now hear of raids associated with suspected price fixing on huge oil companies—household names. Will the Secretary of State ensure that if there are any fines, they are passed on to hard-pressed motorists who might have been ripped off, so that my constituents in Lewis, Harris, Uist and Barra, and everybody else’s constituents, can feel the benefits of any justice? Do these events not call for a review of the OFT’s methodology?

[Mr Davey]

It is important for the hon. Gentleman, and all right hon. and hon. Members, to realise that these are very early days in the investigation. These are allegations only and we should not jump the gun. As he knows, because the allegations are so serious, both UK and European law allows competition authorities to levy serious fines—dependent, obviously, on the particular transgression—should a company be found guilty. The hon. Gentleman will have to wait, but he can be reassured that there are powers to levy heavy fines.

[Sir James Paice (South East Cambridgeshire) (Con)]

I welcome my right hon. Friend’s robustness regarding such manipulation—if, indeed, the raids produce evidence of such manipulation—but will he tell the House how long he thinks it will be before the European Commission is able to report on the issue? In line with those of my hon. Friend the Member for Harlow (Robert Halfon), and others, my constituents in South East Cambridgeshire cannot accept that the market is working fairly. In our area we pay a higher price for petrol and diesel than in most other parts of mainland England, yet only 20 miles away, the same retailers and supermarkets are selling road fuel for 1p, 2p, 3p, or in some cases 5p, a litre less. That cannot be a fair marketplace.

[Mr Davey]

I am grateful for my right hon. Friend’s question and his support for the robust action that we propose to take, supporting our competition authorities. He asked how long it will take, but I am afraid it is impossible to give a straight answer to that. We have seen with the Ofgem and FSA review into allegations of gas market inflation that such things can take some time, in order to ensure that the allegations are looked into seriously and robustly, as consumers and markets should expect. Equally, I cannot give a timetable for the conclusion of the European Commission’s investigations.

My right hon. Friend and other colleagues are concerned that the OFT did not find problems in the market, and I have heard that point. It is worth remembering, however, that not only did it mention the absence of price information on motorways, as I mentioned earlier, but it said that it did not rule out taking action in some local markets if there is persuasive evidence of anticompetitive behaviour. The OFT is ready to act, but we need the evidence.

[Helen Goodman (Bishop Auckland) (Lab)]

Obviously, it is extremely welcome that the European Commission has taken the steps it has, but when the Secretary of State heard it was doing that, did he speak to the OFT and ask why it did not find the same problems only three months ago?

[Mr Davey]

We heard about the raid of these companies’ offices late yesterday evening. We have seen the OFT’s statement and know that it was accompanying European Commission officials, and we will no doubt find out more as the day goes on. The hon. Lady must remember that these competition bodies are independent, and I hope she will reject the idea that we should get ourselves into these investigations. We will seek more information, but we will not be interfering in the investigations.

[Mr Stewart Jackson (Peterborough) (Con)]

This is an issue of parliamentary sovereignty as much as anything else. One thing people say, and one of the most pernicious opinions in the wider electorate, is that the Government only look after big business and not ordinary working families, and—most importantly—that quangos are non-accountable. When will the Secretary of State look hard at the efficacy and accountability of the Office of Fair Trading and, if necessary given its lamentable performance, ensure that heads will roll?

[Mr Davey]

Although I strongly support the sovereignty of this Parliament, for some matters the outcome for consumers can be improved when they are given to an independent or European body. We give authority to the independent central Bank—the Bank of England—because evidence and theory has shown that an independent body can set interest rates in a more effective way. The analysis, not just in this country and Europe but in America, is that an independent competition body is the most effective way. When I was Minister responsible for competition in the Department for Business, Innovation and Skills, I looked thoroughly across the whole competition regime and made proposals that have gone through the House to bring together the OFT and the Competition Commission into a more robust, speedy and effective regime. I hope that reassures my hon. Friend, Members of the House and the public that this Government are determined to have the most effective competition regime in the world.

[Mr Frank Doran (Aberdeen North) (Lab)]

As the Secretary of State will be aware, there has been a long-term disconnect between the price of oil on the market and the price at the pump. He will also know that over the decades, numerous inquiries have been made by the OFT and other competition authorities into the oil and petrol market, but not one has uncovered what is now alleged to have happened. The other issue for the consumer is the LIBOR market, which my right hon. Friend the Member for Don Valley (Caroline Flint) mentioned. Fines were paid by shareholders and customers in extra charges, but the men responsible walked away free. We do not want the same thing to happen in the oil and gas industry, and the Secretary of State is in danger of being complacent in relying simply on the competition authorities.

[Mr Davey]

We are not complacent at all. We stand by the independent bodies. If it was not for them taking action, we would not have had this statement. They are acting, and we should support them. It is good that the European Commission competition DG has looked not only at the UK, but across Europe. Many of those markets are integrated, cross-border markets, so it is vital we take that view. People should not rush to judgment. We must wait for the outcome of the investigations, but the fact they are happening shows that the public authorities do not treat those matters with complacency.

[Several hon. Members]

rose—

[Mr Speaker]

Order. I gently point out to the House that there is a lot of interest in this important statement, which I am keen to accommodate, but, in the final day of the debate on the Gracious Speech, there are literally dozens of colleagues wishing to contribute, so some self-discipline from Back and Front Benches alike is urgently required.

[David Mowat (Warrington South) (Con)]

The allegations are serious, and yet the EU energy portal told me this morning that the pre-tax and duty prices of diesel and petrol in the UK are among the cheapest in Europe—indeed, they are cheaper than in Germany, France and Holland. Given that, will the Secretary of State tell us whether the focus of the inquiry is the UK market or the cross-border European market, which, on the facts, would appear to have bigger problems?

[Mr Davey]

My hon. Friend is right that pre-tax petrol and diesel prices in the UK are among the lowest in the EU. Nevertheless, we cannot be complacent, and it is right that there are investigations—I am sure he was not suggesting that the competition authorities should not investigate. He will know that, as I said in my statement, one issue surrounding the investigation is the reports made by different companies to a price reporting agency. We must wait to find out whether that affects domestic or European markets, but it is the reporting agencies and the prices they report that concern our competition authorities.

[Andrew Miller (Ellesmere Port and Neston) (Lab)]

One aspect of the industry we need to consider is the massive number of refineries that have closed throughout Europe recently. Will the Secretary of State ensure he does all he can to work with companies who are investing in our refining capacity to ensure there is more competition in that part of the market?

[Mr Davey]

The hon. Gentleman is right to mention the impact of the refining industry on the wider market. My Department is working with the refining industry and various operators in the sector to ensure we have a healthy refining industry in this country. The margins for refineries have been seriously squeezed in recent times. It is critical that we ensure fuel security, which means we need a healthy refining industry.

[Mr Robin Walker (Worcester) (Con)]

In supporting the comments of my hon. Friend the Member for Harlow (Robert Halfon), I commend the Secretary of State for making changes to the legislation he inherited from the Leader of the Opposition to ensure that fines levied in the UK are returned to consumers rather than to companies. However, I urge him to make urgent representations to the European Commission to ensure that, if the investigation leads to fines, the detriment to UK consumers, taxpayers and motorists is returned to those UK consumers, taxpayers and motorists.

[Mr Davey]

My hon. Friend makes an interesting point. He is right that the Government are legislating to ensure that, when Ofgem finds misdemeanours by companies, fines go to the consumer and not to the Consolidated Fund. That is an extra tooth for the independent regulator, and puts consumers’ rights ahead, where they should be. He asks me to make representations to the European Commission to see whether European law can be amended to mirror the change we have just made. Clearly, there is a case for that, but I may need to speak to my colleagues in the Department for Business, Innovation and Skills before I make unilateral representations.

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

The general public will have two things in mind: open competition and cheaper prices at the pump. Beyond the European Commission ruling—the Secretary of State has said that we do not know the timing of it—what steps will the Government and the OFT take to ensure that prices come down, that people see openness and transparency, and that the Government reduce fuel duty rather than put increases on hold?

[Mr Davey]

Like every right hon. and hon. Member, the hon. Gentleman is concerned about the price of fuel and the impact that that has on household budgets. I know from speaking to right hon. and hon. Members who represent rural constituencies how the price of fuel impacts on them. That is one reason why my right hon. Friend the Chief Secretary to the Treasury has paid such attention to the matter since he entered Her Majesty’s Treasury. The Government’s record on bearing down on fuel duty, which is one thing we can directly influence, is exemplary. We have had the longest freeze in fuel duty for 20 years—that is us playing our part.

[Duncan Hames (Chippenham) (LD)]

The allegations of price rigging that are being investigated by the European Commission directorate-general for competition stretch over nearly a decade—they go back over years under the Secretary of State’s Government and over even more years under the previous one. At 8p a litre on the price of fuel, the scale of the price distortions is potentially vast. Given the scale of the impact on consumers’ expenditure and on our economies, how can fines compensate consumers in Britain and on the continent?

[Mr Davey]

My hon. Friend is right to ask that question, but I remind him and the House that we are talking about allegations, and that we are at the early stage of investigations. It is important that people remember that.

One benefit of the investigations by our independent competition authorities is that we can try to ensure that our markets work more effectively. If manipulation is proved, and if it is proved that the manipulation led to higher prices, we could see lower prices, which would be welcomed by many outside the House.

[Barry Gardiner (Brent North) (Lab)]

In January, the OFT did not find no evidence; it found evidence of price fixing, albeit limited evidence. At that time, did the Secretary of State ask what the evidence was? If so, what consideration did he give it, and what actions did he recommend as result?

[Mr Davey]

I have not seen that specific evidence, but I know that it was very small and that the OFT felt that the evidence was unable to lead it to a further investigation. However, it was clear that the OFT announced a call for information—the Government supported that. The OFT wants people to bring forward information, which is exactly what they should do.

[Jason McCartney (Colne Valley) (Con)]

Commuters from my constituency to Leeds, Manchester and beyond who have been suffering the nightmare of the M62 roadworks will welcome the fact that fuel duty is 13p per litre lower under this Government than it would have been under the previous one. However, I echo the suggestion that fines, if they are levied on oil companies found guilty of price fixing, should be passed on to consumers and hard-pressed commuters.

[Mr Davey]

I believe that the law does not currently allow fines levied by the European Commission to be passed on directly to consumers, but consumers will benefit from any lower prices that result from freer and fairer markets, which Government Members are determined to see.

[Paul Flynn (Newport West) (Lab)]

What is the Secretary of State doing to prevent another rip-off by Électricité de France, which has an atrocious record in cost overruns and delays, and which demands a 40-year guarantee of twice the current price for building Hinkley Point, at a time when abundant sources of energy are being discovered throughout the world? Will he guarantee that the House debates that before a deal is done with EDF?

[Mr Davey]

I congratulate the hon. Gentleman on getting the subject of nuclear power into this statement. Some of the tests in our negotiations with EDF on a contract for difference in relation to the proposed nuclear reactor at Hinkley Point C are to ensure that we get value for money and that the proposal is affordable.

[Mike Crockart (Edinburgh West) (LD)]

While the European Commission’s involvement is welcome, will my right hon. Friend outline what more UK authorities, such as the Competition Commission and the OFT, can do to ensure that fuel duty cuts made by the Government end up in the pockets of motorists rather than in the coffers of oil companies?

[Mr Davey]

My hon. Friend makes a good point. UK authorities are working extremely closely with European competition authorities. Indeed, they accompanied them on their raids of various companies’ offices. They are active in this investigation, and I hope he takes reassurance from that.

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

The Minister constantly congratulates his Government on keeping the price of petrol down. Why then, when I travel to America, do I find that consumers there pay half the price for their fuel than we pay in the United Kingdom? Why is the price of fuel in the Irish Republic 10p less than it is over the border in Northern Ireland?

[Mr Davey]

The difference in the tax levied in the United States on petrol and diesel might be one of the main explanations. I have not made a study on the difference in price between Northern Ireland and the Republic of Ireland either, but that might also have something to do with duty differentials.

[Mr Philip Hollobone (Kettering) (Con)]

My constituents will be very concerned about the price-fixing allegations and will want the oil company executives, if found guilty, to go to prison. Today’s findings have come about as a result of unannounced inspections by the European Commission. To what extent does the Secretary of State believe that the OFT, Ofgem and the Financial Services Authority are undertaking unannounced inspections in their inquiries? If they are not, should they not be encouraged to do so?

[Mr Davey]

It is interesting that my hon. Friend supports the use of these powers by the European Commission competition directorate-general. I am grateful that he recognises that it is important to have an independent, strong competition body at European level. I think people will have noticed his support for that, and I am grateful for it. He asked whether the OFT, Ofgem and other regulators involved in enforcing competition have those powers. I believe that they do. If I am wrong, I will write to them. He will recognise, as I hope everyone does, that it is not for the Government to tell an independent regulatory body to go and do dawn raids. It is up to them to decide to do that, based on the evidence. We strongly support them when they use those powers, and we strongly support them in the powers they need to gather the information ahead of such raids. If the OFT and Ofgem were to make such raids based on proper information, we would support them.

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

When did the Secretary of State find out about the European Commission investigation? If the investigation had not been undertaken by the EU, would the Government have been any the wiser?

[Mr Davey]

I found out about it late last night. We do not know on what evidence the Commission decided to launch the raids. Apparently, there were suspicions that companies had been giving a price reporting agency false information about prices in the market. We need to know more about what information it had. The question is whether the UK competition authorities had similar information. To date, my understanding is that they did not.

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

I remind the House of my entry in the Register of Members’ Financial Interests. The hard-pressed motorists of the north-east of Scotland—for whom a car is an essential, not a luxury—will want to be confident that they are paying the best price possible for their fuel at the pump. To that end, I welcome my right hon. Friend’s commitment to help the European Commission and to encourage the companies to co-operate fully with the inquiry. Will he take forward to the Commission the need to co-operate with the G20 if there is any evidence that the alleged price fixing extends beyond EU borders?

[Mr Davey]

My hon. Friend has been a doughty defender of motorists in north-east Scotland, making the point, with other hon. Members, that people in rural areas often depend on their car and therefore have no choice but to use it. The G20 received the report from the International Organisation of Securities Commissions in November and I believe it is being looked at carefully. The issue of price reporting agencies and price benchmarks is one that both UK and global regulators are paying much greater attention to. One might ask the question: why were they not being paid attention to before?

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

My right hon. Friend the Member for Don Valley (Caroline Flint) made the point that if this is happening in energy, there is every reason to believe that it could well apply to other commodities. What are the Government going to do, with the EU if necessary, to be proactive and to ensure that there is no price fixing in other areas of international trade? We do not want to come back in a few years’ time and wonder how we are going to compensate consumers in other fields.

[Mr Davey]

I am afraid that the hon. Gentleman is behind the times. We are already acting at both a global and a European level to support work that looks into how benchmarks and price reporting agencies operate, and to check that there is no danger of price manipulation or of rigging the markets in another way. The Government are taking this very seriously. We are working with a number of bodies, including the International Organisation of Securities Commissions, and are operating at EU and G20 level. We are very proactive on this issue.

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

My constituents are concerned about why they pay more for a gallon of petrol than those in other parts of the country, so they will welcome the investigation. What is the Secretary of State doing at a European level to ensure that the European Commission does not cut off this country’s access to Canadian oil sands, which has the potential to bring down prices at the pump for everybody?

[Mr Davey]

The Under-Secretary of State for Transport, my hon. Friend the Member for Lewes (Norman Baker) is actively engaged at the European Council on this. It is a rather more complicated question than my hon. Friend the Member for Brigg and Goole (Andrew Percy) implies. It is not so much about access to our markets, but how those tar oil sands and any fuel produced from them are rated in terms of their carbon content. The debate is complicated, but the UK and my hon. Friend in the Department for Transport are pushing hard to obtain a fair outcome.

[Ms Margaret Ritchie (South Down) (SDLP)]

The Centre for Economics and Business Research reported in March 2013 that the average weekly spend on vehicle fuel is higher in Northern Ireland than in comparable regions in Britain, and takes up a significantly larger proportion of consumers’ net income. What further action will the Government take to lower fuel duty to provide equality for all consumers?

[Mr Davey]

As the hon. Lady will know, my right hon. Friend the Chancellor keeps these issues under constant review. He has an extremely strong record of delivering fuel duty freezes and not proceeding with rises proposed by the previous Government. I am sure that he will consider her question and early representation for next year’s Budget.

[Roger Williams (Brecon and Radnorshire) (LD)]

If there has been market manipulation by big companies in the oil market, then as well as consumers suffering, small independent suppliers and retailers who were not part of the scam will also have suffered. Independents are important in rural areas, as they are often the only supplier. While the Secretary of State will not want to intervene directly with the regulatory bodies he mentioned, I hope he will give them the hurry-up, because we want to ensure that no more damage is done to independent suppliers in this country.

[Mr Davey]

I pay tribute to my hon. Friend for raising the issue of businesses, in particular small and medium-sized enterprises. If the allegations are proved to be correct, and petrol and diesel prices have been higher than they otherwise should have been in a fair market, then they will have been hit as well. He will know from previous debates on petrol and diesel prices the impact that fuel prices have on the wider haulage industry. It is vital that we get to the bottom of this not just for consumers, but for our whole economy.

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

If anything untoward is discovered at the end of this process, it will not show the OFT in a good light. While price is important, the quality of fuel that people purchase is also an issue. I find that more and more of my constituents complain about poor mileage from cheaper fuel. I put to the Secretary of State a quick calculation: 2p a litre extra and two miles per gallon is far better than cheaper fuel. I have asked Which? to conduct a survey on fuel quality. Does the Secretary of State agree that we should be looking at that too, and will he support an investigation into the quality of the fuel that people are purchasing at the pumps?

[Mr Davey]

That is an extremely interesting point. I hope the hon. Gentleman is liaising with his local trading standards department, in case there are any serious problems, but I shall certainly ask my officials to look into it. It is not just the quality of the fuel, however, but fuel efficiency that matters: we need far more fuel efficient cars and we need standards that send a signal to the industry that we want it to make its cars more fuel efficient. The Government have a proud record of supporting the electric motor industry, and the UK is beginning to be a real producer of electric cars.

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

Daventry residents will be unsurprised by the Commission’s raids on oil companies last night. In fact, they are fed up to the back teeth with paying way more than other consumers nearby. I was interested in what the Secretary of State said about anti-competitive actions and how the OFT might be looking at local markets in the future. Could it not look for evidence simply by going to a price comparison website, where straightaway it would be able to see prices and demonstrate such behaviour historically? Furthermore, does he recognise the concern about such European Commission investigations, which can limp on for decades?

[Mr Davey]

I hope that the hon. Gentleman supports the fact that the European Commission is investigating the market. It is important that it gets our full support. On the OFT and its finding of possible problems in local markets, I am sure that the OFT does exactly what he says, but it might well need more information to prove manipulation. Again, I call on hon. Members and members of the public to provide such information, if they have it, to the competition authorities.

[Nia Griffith (Llanelli) (Lab)]

Last year, Labour called for commodities such as oil to come under the Financial Conduct Authority’s regulatory net, but Ministers refused to act. Not only are people in rural areas hit by high fuel prices, but many of them rely on oil for heating. What assurances can the Secretary of State give them that he will now strengthen the OFT and the FCA by giving them the power to deal with commodity price rigging?

[Mr Davey]

We certainly are strengthening the competition authorities in this country, as I explained earlier. We are looking at a range of issues that have come to light as a result of the LIBOR scandal, the allegations of gas market manipulation and so on. As I explained to the hon. Member for Edinburgh North and Leith (Mark Lazarowicz), we are working not just nationally, but at a European level and globally to ensure that these commodity markets are fair and not being manipulated. Our record on this stands in stark contrast to the inaction of the last Government.

[Guy Opperman (Hexham) (Con)]

People in the north-east welcome the three-year fuel duty freeze, but we have concerns that the OFT, despite having had repeated evidence, particularly in rural Northumberland, of a lack of competition, has still failed to act. Does the Secretary of State agree that a way forward would be to summon the OFT to the House so that all MPs can make representations in his presence and get some action from it? No one has any faith in the OFT.

[Mr Davey]

I am sorry to hear that my hon. Friend does not have faith in the independent competition authorities. According to the empirical evidence of how they compare to other competition authorities around the world, they actually score extremely highly. Nevertheless, even though I saw those findings when I was competition Minister, I wanted to strengthen them still further, because there is no room for complacency. I hope he realises that the Government will ensure that the competition authorities have the powers they need.

[Albert Owen (Ynys Môn) (Lab)]

My constituents are now paying more for petrol and diesel at the pumps not least thanks to the VAT increase of 2.5p on every litre which the Secretary of State and his Government introduced. He boasted in his statement that he was going to give Ofgem extra powers and responsibilities. In light of these allegations, will he seriously consider giving the OFT similar powers and extending its remit, so that we can prevent this from happening again in this country, instead of relying on the European Commission?

[Mr Davey]

Some of the information and allegations of market manipulation are cross-border, so it might well turn out that these allegations required a European competition authority. It is important that we have a strong European competition regulator, and I hope the hon. Gentleman would accept that, but of course we keep under review the powers of the regulators and competition authorities in general. The Government have acted strongly to strengthen them.

[Mark Durkan (Foyle) (SDLP)]

Businesses that we have long known to be profiteers now stand suspected of being racketeers. While the allegation of price manipulation and derivatives distortion might take some time to investigate, does the Secretary of State accept that the wider question of commodity price indices speculation needs to be addressed at the G8, particularly in order to limit the degree to which financial institutions can pass off such speculation as legitimate areas of investment?

[Mr Davey]

I agree with the hon. Gentleman’s main point: there are concerns that these price benchmarks have been manipulated, and some of the evidence suggests, if they prove true, that they have been manipulated for many years. I am proud that the Government are taking action. We cannot be complacent. Too many consumers and businesses could be hit if these sorts of allegations prove true. We have to wait for the investigations to be completed, but if any company is found to have breached the rules, the full force of the law will be used.

Speaker’s Statement

Wednesday 15th May 2013 Commons Chamber

13:26

[Mr Speaker]

I have received a report from the Tellers in the Aye Lobby for the Division at 6.59 pm yesterday, Tuesday 14 May. The hon. Members for Lewisham East (Heidi Alexander) and for Poole (Robert Syms) have informed me that the number of those voting Aye was erroneously reported as 254, instead of 244. I will direct the Clerk to correct the numbers in the Journal accordingly. The Ayes were 244 and the Noes were 316.

I have another matter I must draw to the attention of the House before we move on to the main business of the day. Owing to human error, a motion in the name of the Leader of the House to refer item 33 on today’s future business part B to a Delegated Legislation Committee was omitted from today’s Order Paper. A corrigendum paper has been issued and is available in the Vote Office. The motion may be moved today as the last item before the Adjournment debate.

Members might also wish to be reminded that the book for entering the private Members’ Bill ballot is open for Members to sign in the No Lobby. It will be open until the House rises today, except during Divisions.

I also remind Members that nominations for the Chair of the Backbench Business Committee must be submitted to the Table Office by 5 pm today.

Debate on the Address

Wednesday 15th May 2013 Commons Chamber

[6th Day]

Debate resumed (Order, 14 May).

Question again proposed,

That an humble Address be presented to Her Majesty, as follows:

Most Gracious Sovereign,

We, Your Majesty’s most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament.

Economic Growth

Wednesday 15th May 2013 Commons Chamber

[Mr Speaker]

I inform the House that I have selected amendment (g) in the name of the Leader of the Opposition. I have also selected amendment (b) in the name of Mr John Baron and amendment (e) in the name of Mr Elfyn Llwyd for separate Divisions at the end of the debate. Those amendments may therefore be debated together with the Leader of the Opposition’s amendment. The amendments will be put in the order: (g), (b) and (e).

[The Leader of the House of Commons (Mr Andrew Lansley)]

On a point of order, Mr Speaker. For the benefit of the House, may I ask you to set out your application of the terms of Standing Order No. 33, relating to the number of amendments to the Queen’s Speech motion that are selectable?

[Mr Speaker]

Yes, I am very happy to do so, and I am grateful to the right hon. Gentleman for his point of order. I believe that there is a need to interpret the Standing Orders in a way that facilitates the business of the House in a developing parliamentary context. Conditions and expectations today are very different from those in October 1979, when that Standing Order was made. I must tell the House that I have studied the wording of Standing Order No. 33 very carefully. My interpretation is that the words “a further amendment” in the fifth line of the Standing Order may be read as applying to more than one amendment successively. In other words, only one amendment selected by me is being moved at any time. Once that amendment is disposed of, a further amendment may then be called. I am extremely grateful to the right hon. Gentleman—almost as grateful, I suspect, as he is to me.

13:30

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

I beg to move amendment (g), at the end of the Question to add:

‘but regret that the Gracious Speech has no answer to a flatlining economy, the rising cost of living and a deficit reduction plan that has stalled, nor does it address the long-term economic challenges Britain faces; believe that the priority for the Government now should be growth and jobs and that we need reform of the European Union, not four years of economic uncertainty which legislating now for an in/out referendum in 2017 would create; call on your Government to take action now to kickstart the economy, help families with the rising cost of living, and make long-term economic reforms for the future; and call on your Government to implement the five point plan for jobs and growth, including bringing forward long-term infrastructure investment, building 100,000 affordable homes and introducing a compulsory jobs guarantee for the long-term unemployed in order to create jobs and help to get the benefits bill and deficit down, legislate now for a decarbonisation target for 2030 in order to give business the certainty it needs to invest, implement the recommendations of the Parliamentary Commission on Banking Standards and establish a proper British Investment Bank.’.

Thank you for your ruling, Mr Speaker. It is certainly in line with my understanding of the particular interpretation of that Standing Order, and I hope that it satisfies the Leader of the House as well.

It is an honour to open the final debate on the Queen’s Speech today, and to move the amendment, which you have selected on behalf of Her Majesty’s Opposition. It is a Labour amendment that calls for decisive action and a stimulus now to kick-start the recovery, boost living standards and get the deficit down, including 100,000 affordable homes, urgent action to accelerate infrastructure investment and reforms to get young people and the long-term unemployed back to work, with a compulsory jobs guarantee.

The amendment also proposes radical long-term reforms to promote economic growth and investment in manufacturing, services and our creative industries by implementing the recommendations of the Parliamentary Commission on Banking Standards, legislating now for a 2030 decarbonisation target to give businesses the certainty they need to invest here in Britain and setting up a proper British investment bank. It is a one nation Labour amendment, which stands in marked contrast to the complete and utter shambles we have seen from the Government over the past seven days since the Gracious Address—a divided coalition, out of ideas and running out of road, and a weak Prime Minister, out of touch and fast losing control of his party and his own Cabinet.

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

How much more money would the shadow Chancellor need to borrow to deliver on his alternative Queen’s Speech?

[Ed Balls]

As I said in my opening remarks and as our amendment says, we need a stimulus now. We, the International Monetary Fund, the Business Secretary and The Economist all agree that taking action now to kick-start our recovery is the right thing to do. We should borrow now to get growth moving, so that we get our deficit down.

I have to say to the hon. Gentleman that that very question was asked of the Business Secretary on the “Today” programme just a few weeks ago. He was asked by John Humphries, “So, should you borrow more?” Guess what the Business Secretary said? He said:

“Well we are already borrowing more”.

That is the truth—£245 billion more. I will tell you what I want to do—[Interruption.] I will answer the hon. Gentleman’s question. I want to get the borrowing down. Under this Chancellor, the borrowing has flatlined—the same last year, this year and the year after. That is the reality.

[Charlie Elphicke (Dover) (Con)]

Will the right hon. Gentleman come clean with the House: how much more would he borrow?

[Ed Balls]

As I said, I want to see the borrowing coming down, and it is not coming down because this Chancellor has flatlined the economy. We have had almost no growth since 2010 and the result is that he is borrowing £245 billion more.

I have made speeches in the last two Queen’s Speech debates: I have said that there should be a temporary VAT cut, which would cost £12 billion. I have called for a national insurance cut, VAT at 5% and for infrastructure investment to be brought forward. If those things had been done, borrowing would be coming down now; under this Chancellor, it is not. The economy has flatlined and the deficit reduction plan has flatlined as well.

With the IMF here in town, what the Government should do is listen to the IMF chief economist, who says they are “playing with fire”. The IMF has said they should slow the pace of deficit reduction, stimulate the economy and get growth moving to get the deficit down. That is what the Government should do.

[Christopher Pincher (Tamworth) (Con)]

Is that the “borrow, borrow, borrow” advice that the shadow Chancellor gave to the President of France, whose deficit is well above the EU average and whose economy has shrunk by 0.2%? Is that the kind of advice he is giving to his fraternal friend?

[Ed Balls]

The EU produced the latest growth figures today. The figures for France are disappointing. France has gone into recession. It is in the eurozone, trapped in austerity, and its economy is not growing. I looked at the figures today to see what French growth had been since the Chancellor’s spending review compared with the UK. Since the spending review in 2010, growth in France has been 1.1% and growth in the UK has been 1.1% as well, compared with Germany, which has had three times more growth, and America, which has had four times more growth. The eurozone is locked into austerity by virtue of those countries’ membership of the single currency. Our Chancellor imposed on our economy austerity that went too far, too fast, and what has happened? He has delivered the same growth performance over the last two years as that of the French economy, well behind that of Germany and America, where, as we now know, the deficit is coming down.

[David Rutley (Macclesfield) (Con)]

With the IMF in town, will the shadow Chancellor confirm that the IMF has forecast that the UK will be growing faster than France over the next two years?

[Ed Balls]

The hon. Gentleman should be congratulating me and the Labour Government on not taking us into the single currency in 2003. That is what he should be doing, but if he wants to have a debate about the IMF, this is what the IMF said in September 2011:

“If activity were to undershoot current expectations, countries that face historically low yields”—

such as Germany and the United Kingdom—

“should also consider delaying some of their planned adjustment”.

In April—just a month ago—it said:

“In the UK, where recovery is weak owing to lacklustre demand, consideration should be given to greater near-term flexibility in the fiscal adjustment path.”

That is technical language that means the Chancellor should slow the pace of deficit reduction, provide a stimulus and get the economy moving to get the deficit down. What do we hear from the Treasury? Treasury advisers, who a year ago were saying the IMF was on their side, now say that the Chancellor will ignore the IMF and plough on regardless with a failing plan.

[Guy Opperman (Hexham) (Con)]

I am glad to see that the shadow Chancellor is beginning to agree with our plans for regional banking reform with local banks. However, he would improve his banking credibility if he were to repay the £3 million owed by the Labour party to the Co-operative bank. Does he agree with that?

[Ed Balls]

I have to say—

[Nadhim Zahawi]

You have to answer it!

[Mr Speaker]

Order. Mr Zahawi, you have already intervened with some gusto, but I would ask you to behave in a seemly manner, as the people of Stratford-on-Avon would expect and are themselves wont to do.

[Ed Balls]

The hon. Member for Hexham (Guy Opperman) has made some wise interventions in these debates. He said just last year that

“too often we are talking about the 50p tax, a tax which affects those on six times the average salary, rather than the taxes on the lowest paid.”

It is a pity his Front-Bench team did not listen to his views in this year’s Budget.

[Several hon. Members]

rose—

[Ed Balls]

I want to make some progress, then I will take some more interventions.

This is not simply the Queen’s Speech of a coalition Government who have ground to a halt; it is much worse than that. At a time when living standards are falling; when child poverty is rising; when more than 950,000 young people are out of work; when, as we learned today, unemployment is rising again and is now higher than at the general election; when, as we also learned today, prices are rising four times faster than wages in our economy; when our economy has flatlined for three years; when overall business investment has stalled and actually fallen in the past two years; when, as a result, our triple A credit rating has been downgraded; when the Office for Budget Responsibility says that the deficit reduction plan has completely stalled; and when the International Monetary Fund is now in town saying that the Chancellor is “playing with fire” by sticking to his failing plan, you would think that the priority for the Prime Minister, the Chancellor, the Cabinet and the Conservative party would be to see what they could do to boost economic growth and long-term investment in our country. But no, it seems that that is not their priority.

[Andrea Leadsom (South Northamptonshire) (Con)]

We have already had a credit downgrade from one of the agencies, and the agency made it clear that that was a result of the problems that our economy has had in recovering. Is the right hon. Gentleman not concerned that if we were to abandon our plans, there could be a further downgrade? If we simply did as he suggests and opened the floodgates to more debt and borrowing, we would put our economy into severe crisis as a result of rising interest rates and a lack of credibility in international markets.

[Ed Balls]

I ask the hon. Lady to reflect for a moment on the logic of her position. For the past three years, she and the Chancellor have consistently said that they had to stick to the plan, even though growth was low, even though the deficit was not coming down and even though living standards were under pressure, because otherwise they would lose the triple A credit rating. Now they have lost the triple A rating, but they still maintain that they have to stick to the plan. That is completely illogical. The credit rating agency said in terms that it had downgraded us because there was no growth in the economy, and that that was choking off deficit reduction. Sticking with a failing plan that is not working and that has resulted in the deficit reduction being stalled is not the way to keep our credit rating—if that is the Government’s objective. The way to keep it is to get the economy moving, get people investing and get people back into long-term sustainable jobs. Until we do that, the Chancellor is going to continue to fail.

[Andrea Leadsom]

rose—

[Ed Balls]

If the hon. Lady would like to have another go, I am happy to give way to her.

[Andrea Leadsom]

I am grateful to the right hon. Gentleman for letting me have another go. I put it to him that he really does not understand the point about the credit rating agency in this context. The whole point about confidence in the British economy is that people need confidence in Britain’s ability to get out of the economic mess that his Government left us in. This is not about the absolute level; it is about market confidence. He must surely understand that keeping a very good credit rating is essential in order to have an affordable cost of borrowing.

[Ed Balls]

I do not want to prolong this argument, but I must explain to the hon. Lady the term structure of interest rates. The 10-year bond yields are the accumulation of market expectations of three-month interest rates added up every three months over 10 years. Why are our long-term interest rates so low? It is because people think that short-term rates are going to stay low because the economy is flat on its back. People would have to be economically illiterate to think that our long-term interest rates were driven by market confidence at a time when we are being downgraded by the agencies. Our long-term interest rates are low because our economy is not growing.

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

rose—

[Ed Balls]

I was hoping to debate the Europe issue with the hon. Gentleman in a moment, but I am happy to give way to him on this one as well.

[Jacob Rees-Mogg]

I look forward to debating many issues with the right hon. Gentleman. The markets show confidence in this Government’s policy by keeping interest rates low. This is not purely to do with an expectation of where short-term rates will be; it is about confidence in the creditworthiness of the British Government under this Chancellor.

[Ed Balls]

I have to say that that is a deluded view of the way in which credit ratings work. Let us not forget that in 2007 these same credit rating agencies were saying, “Stick with Lehman Brothers” and giving America a triple A rating despite all the sub-prime lending. That is the reality. The fact is that the credit rating agencies are downgrading Britain because our economy is not growing. That is the fundamental problem.

I will give the hon. Gentleman a bit of ground, however. It is true that the Labour Government left a longer-term interest rate structure than other economies. We had far less foreign currency borrowing and more index-linked borrowing than other countries. That helped, but the fundamental thing was that we did not join the single currency. In Spain, Italy and elsewhere, we see a currency risk premium, which relates to the central bank’s ability and willingness to stand behind sovereign debt. That is not an issue here. Our interest rates are low, and they have fallen because our economy is not growing. The market is therefore reflecting expectations of continuing stagnation. I am afraid that that is the reality—aside from the political rhetoric of the Chancellor.

[Jacob Rees-Mogg]

In my previous intervention, I was careful to talk about the markets, not the credit rating agencies. It is the markets that count, because they reflect people investing their money. I agree with the right hon. Gentleman that the credit rating agencies got the whole of the pre-crash period wrong, but it is the markets we need to bank on.

[Ed Balls]

Unlike the Chancellor, the markets do not pay a huge amount of respect to the credit rating agencies. The hon. Gentleman agrees with me on that. That is why, two or three years ago, it was so ridiculous for the Chancellor to say, “Trust me. I’ll keep us as a safe haven because I’ll keep the triple A credit rating.” We told him, in 2011 and 2012, that the plan was not working, that the economy was not growing and that the deficit was not coming down, but when we told him to change course, he said, “I can’t do that because the credit rating agencies will downgrade us.” Well, they downgraded us anyway, because the economy was not growing.

[Andrew Selous (South West Bedfordshire) (Con)]

The shadow Chancellor believes in plain speaking, so I want to give him a third—and perhaps final—opportunity to tell us the amount of extra borrowing that his policies would require. Just a number—plain and simple.

[Ed Balls]

I am not going to write our Budget for 2015 two years ahead. That would be the wrong thing to do. Right now, if the Chancellor had done what I recommended a year ago, borrowing would be coming down. At the moment, however, it is absolutely flat.

What have we learnt in the last seven days? What have we learnt from today’s Tory amendment about the priority of the Conservative party? What are Conservative Members demanding in their amendment? What are they rebelling on? Accelerated bank reform? Energy market reform? Housing investment? Infrastructure investment? Tough welfare reform through a compulsory jobs guarantee? If they want all that, they can vote for our amendment today. But no, according to the Tory amendment, the No. 1 priority that is so vital that Conservative Members are planning to vote against their own Government’s Queen’s Speech involves enabling legislation to allow Eurosceptic Conservative MPs to try to take Britain out of the European Union.

The Tory amendment states that those Members

“regret that an EU referendum bill was not included in the Gracious Speech.”

Let me tell the House what they should be regretting. They should regret the fact that, after three years of pursuing a failing economic plan, the Chancellor is still ploughing on regardless, even when the IMF is telling him to change course. They should regret the fact that, when calculations based on Institute for Fiscal Studies figures show that families are, on average, £891 worse off this year, the Government have cut taxes for the highest earners, giving a £100,000 tax cut to 13,000 millionaires. They should regret the fact that the Government have refused to use the Queen’s Speech to put in place the long-term reforms necessary for our economic future—reforms that I fear will not be in the spending review, either. The Chancellor and the House should regret, too, the fact that the Conservative party seems to have been hijacked by those within its ranks, including within the Cabinet, who are determined to lead Britain out of the EU regardless of the impact on investment and jobs.

[Sir Bob Russell (Colchester) (LD)]

Will the shadow Chancellor confirm that the number of Labour Members who have signed this Tory amendment on the EU referendum is now in double figures?

[Ed Balls]

I have not seen the figures, but I would be happy to study them—it is when it spreads to the Cabinet that there is a real problem. The hon. Gentleman should regret the 15% rise in long-term youth unemployment in his constituency, which was confirmed today. I have to say that this coalition was really not worth his support.

[Mr Peter Bone (Wellingborough) (Con)]

The shadow Chancellor is generous in giving way. It is a shame he is not the leader of his party, because if he was he would make sure it was not the anti-referendum party—I think those were his very words. The message from today’s debate and tonight’s vote will be that Labour is against an EU referendum and the Conservatives are in favour of it. To put the facts straight, it is not just Conservative Members or just Labour and Democratic Unionist Members who signed the amendment—a Liberal Democrat Member signed it, too.

[Ed Balls]

I will read our amendment to the hon. Gentleman so that he knows exactly what we will vote for. We say

“that the priority for the Government now should be growth and jobs and that we need reform of the European Union, not four years of economic uncertainty which legislating now for an in/out referendum in 2017 would create”.

Let me quote to the hon. Gentleman the press release issued this morning by the Engineering Employers Federation, which knows about manufacturing investment in the long term. It says:

“EEF, the manufacturers’ organisation believes the current debate is ‘letting British business down’ with politicians making claims that the EU isn’t working for Britain rather than focussing on how to work to make it better”.

Let me set out further our position on this reform agenda, which has been set out in recent weeks and months by the Leader of the Opposition, the shadow Foreign Secretary, the shadow Home Secretary and me. Instead of four years of uncertainty, our Labour amendment says that the priority now should not be walking out of meetings or being entirely ignored but arguing with influence to get the reforms agreed. These include reform of the common agricultural policy, tough new budget discipline in the European budget with stronger independent audit—[Interruption.] Conservative Members should listen, as I would have thought they agreed with many of these things. The priorities include reform of family-related payments to EU migrants, greater national flexibility in transitional arrangements, a balanced growth plan and a new growth commissioner, an end to the wasteful Strasbourg Parliament and more powers for national Parliaments.

Let us reflect for a moment on what the president of the CBI said just a few weeks ago:

“UK membership of the EU encourages large company capital investments within the UK, creating jobs and wealth that trickle down to medium and small company suppliers”—

the kind of trickle down we quite like. He continued:

“Departure would be bad for employment and growth across a broad business spectrum.”

This is what Sir Richard Branson wrote in January:

“An exit would be very bad for British business and the economy as a whole...The EU is the UK’s biggest trading partner, its combined market dwarfs the US and China. For that reason alone the UK must stay in to help rebuild the EU.”

He was right.

Let this sink in: Conservative Back Benchers, with the blessing of many Conservative Front Benchers, are proposing today an amendment that aims to break our ties with our main trading partner, blight inward investment into the UK and put at risk upwards of 3 million jobs. Let it sink in, too, that the leader of the Conservative party, the Prime Minister of our country is not just too weak to do anything about it—he is caving in, day by day, to their demands.

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

I agree with the shadow Chancellor almost entirely on Europe, but will he pledge today that he will not support an in/out referendum that might take the UK out of Europe?

[Ed Balls]

I want us to stay in the European Union; I am absolutely clear about that. Our amendment is absolutely clear, too, about the effect of an in/out referendum announced now. I am going to quote someone, which might go down well with the hon. Gentleman but perhaps not so well with some Conservative Members. Lord Heseltine said:

“To commit to a referendum about a negotiation that hasn’t begun, on a timescale you cannot predict, on an outcome that’s unknown, where Britain’s appeal as an inward investment market would be the centre of the debate, seems to me like an unnecessary gamble”.

My answer to the question of the hon. Member for Perth and North Perthshire (Pete Wishart) is that we will not take that unnecessary gamble now. It would be the wrong thing to do. This is exactly the same position as the one the Prime Minister and the Chancellor joined us in the Lobby to vote against in October 2011. How things change!

Let us remind ourselves of what the Prime Minister told the Conservative party conference in 2006; it is worth reading the whole quote so we can understand its full impact:

“For too long, we were having a different conversation. Instead of talking about the things that most people care about, we talked about what we cared about most. While parents worried about childcare, getting the kids to school, balancing work and family life—we were banging on about Europe.”

His party has certainly been banging on about Europe day after day over the last week—banging the nails in the coffin of Tory modernisation and in the coffin of this Prime Minister’s prime ministership, too.

We should not forget that this is the Prime Minister who last summer rejected calls for an in/out referendum. Then, just three months ago in his much-heralded Europe speech, the Prime Minister pulled his referendum stunt—a Europe speech to wrong-foot Labour and UKIP and unite the Conservative party. This is how The Independent reported Downing street’s gleeful boasting back in January.

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

Will the right hon. Gentleman give way?

[Ed Balls]

Let me tell the hon. Gentleman what The Independent said about Downing street; then we can reflect on it together in a few moments. It said:

“They judged that, to calm the fractious Tory pack, they had to split off the hardliners who want to leave the EU from pragmatic Eurosceptics...They also needed to unite the Tories at the next election and reduce the threat from the UK Independence Party...The best way, they calculated, would be to promise an ‘in/out’ referendum after 2015. The trick seems to have worked”,

the article concluded,

“at least in the short term.”

Downing street claimed the speech took six months to formulate; it has taken just three months to unravel. We have seen Tory Back Benchers last week defying the Prime Minister to vote against the Queen’s Speech; former Tory Chancellors openly calling for Britain to leave the European Union; serving Cabinet Ministers joining the chorus at the weekend, saying they would vote for Britain to leave the EU now; and the embarrassing spectacle and truly ludicrous sight of a British Prime Minister in Washington negotiating an EU-US trade deal, while back home members of his own Cabinet say they would vote to exclude Britain from its benefits.

Then, on Monday night, we heard the Prime Minister’s panic announcement that he would, after all, publish a draft referendum Bill—not as Prime Minister, but as leader of the Tory party—only to be told by his own Back Benchers the next morning that it was not good enough because the public did not trust him, and they did not trust him either. This is really what it means for a Prime Minister to be “in office, but not in power”. It is not John Major all over again; it is much worse than that, because at least he tried to stand up to the Eurosceptics in his Cabinet.

[Mr Baron]

I am afraid that the right hon. Gentleman fundamentally misrepresents the amendment. Members in all parts of the House believe that the time has come to give the British people their say on our relationship with the European Union. May I put this question to the right hon. Gentleman? Why does he not trust the British people on the issue?

[Ed Balls]

I will take a second intervention from the hon. Gentleman if he will tell me how he would vote in the referendum.

[Mr Baron]

No, no, no—[Interruption.] All right, I will answer. [Interruption.]

[Mr Speaker]

Order. Let us hear the hon. Gentleman.

[Mr Baron]

I will answer the right hon. Gentleman’s question most directly, provided he promises to answer my question most directly. My answer to his question is that if the referendum were held tomorrow, I would vote “out”, but I support the Prime Minister in his idea of holding a referendum in 2017. If he can successfully renegotiate and re-engineer an EU based on trade and not on politics, that will be a different kettle of fish, and we will judge it at the time.

May I now return to my question to the right hon. Gentleman? He has ducked it, and that is what gives politicians a bad name outside this place. Why will he not give the electorate their say on this issue?

[Ed Balls]

For precisely the reason that I gave in an earlier answer—and I have to say that I am not sure that the public like to hear us repeating ourselves.

Let me quote the words of another business organisation, London First. [Hon. Members: “Answer the question!”] I will answer the question. London First—[Interruption.] London First—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. We have a long afternoon ahead of us. It would be good to hear everyone’s views on this subject, which means not shouting over speakers.

[Ed Balls]

No wonder the Prime Minister has gone to America, Madam Deputy Speaker, if that is what he has to put up with.

Let me quote the words of London First—[Interruption]—which is my answer.

“The announcement that a referendum on our membership of the EU may be held in a few years’ time, dependent on the result of the next General Election, risks condemning the UK economy to several years of further uncertainty.”

London First is completely right. We can see why the Prime Minister is so worried. If that is the kind of support he has, no wonder he is in trouble.

[Mr Baron]

We have just had an exchange in the Chamber, Madam Deputy Speaker, in which I directly answered a question in return for the Chancellor’s directly answering mine. [Hon. Members: “Shadow Chancellor.”] I mean the shadow Chancellor. He has refused to answer my question. Let me ask it one more time. Why is he denying the British public their say on Europe?

[Ed Balls]

I am the shadow Chancellor, not the Chancellor—at least for now.

I have answered the question, but I will answer it again. We do not believe that a referendum now is the right priority. The hon. Gentleman asked me why, and I have answered the question. I have answered the question because, actually, I agree with him. This is what he said last year:

“Austerity can only do so much. Longer term, the better solution is greater competitiveness and economic growth.”

I think that the priority now, in the Queen’s Speech, should be for the Government to act on economic growth, short-term and long-term. Hanging a sign above our door saying, “For the next four years, Britain is closed for business”, would be a very, very foolish thing to do.

[Mr Baron]

rose—

[Ed Balls]

I will give way again.

[Mr Baron]

I thank the shadow Chancellor for giving way. He is being gracious, if nothing else. However, he still has not answered the question. Why will he not support the concept of trusting the British people to make up their minds on this, say, in 2017? Does he support that position?

[Ed Balls]

I have answered the hon. Gentleman’s question. For us to join him, or the Prime Minister, in committing ourselves now to a referendum four years ahead would lead to lost investment and lost jobs, and would be the wrong priority for Britain. Our amendment makes it absolutely clear that we disagree with that strategy.

If there were a treaty change that altered the balance of powers, we would support a referendum. I think it important for us to listen to and understand people’s concerns about Europe, and show that we can reform. I must say to the hon. Gentleman, however, that we will not get the reform that we need by walking out of the room in a flounce, as our Prime Minister did in December 2011. That was one of the worst pieces of statesmanship we have seen for many years.

[Andrew Gwynne (Denton and Reddish) (Lab)]

In order to be a member of the European economic area outside the European Union, would we not still have to pay a membership fee and accept most of the rules and regulations coming from Brussels? Would we not also lose our seat on the Commission, lose our seats in the European Parliament, and lose our voice on the Council of Ministers?

[Ed Balls]

My hon. Friend is entirely right. The problem is that the Prime Minister no longer knows whether to agree, disagree, or sit on the fence on that question, which is why we are in such a mess.

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

The right hon. Gentleman has seen the Prime Minister’s draft Bill. If it became an Act of Parliament requiring a future Government to move an order to set a date for a referendum before 2017, would he do so?

[Ed Balls]

I have just explained that we do not support the idea of legislating now for a referendum four years ahead, for precisely the reasons that the Engineering Employers Federation, London First and Lord Heseltine have set out and I have set out in our amendment, as have my colleagues. I think that it would destabilise investment and jobs.

[Several hon. Members]

rose—

[Ed Balls]

Normally there are plenty of interventions in debates on the economy, jobs and growth, but it seems to be Europe that really gets them going. I give way to the hon. Member for South West Bedfordshire (Andrew Selous).

[Andrew Selous]

The shadow Chancellor is being very generous in giving way. Will he explain very briefly what he meant when he said hat he did not want his party to be caricatured as the anti-referendum party?

[Ed Balls]

We are not against the idea of referendums. We proposed the first referendum, in the 1970s. If there were a change in the balance of power in the treaties, we would support a referendum, but it would be wrong to do so now.

[Geraint Davies (Swansea West) (Lab/Co-op)]

Will my right hon. Friend give way?

[Ed Balls]

I will take one more intervention.

[Geraint Davies]

As my right hon. Friend knows, today’s figures show that unemployment has risen again. He also knows that the EU provides 50% of our trade. In the event of our securing a free trade agreement between the EU and the United States, alongside bilateral trading agreements between the EU and other countries such as China, what does he think the impact of withdrawal from the EU would be on growth, jobs and trade?

[Ed Balls]

In 1983, our party supported the idea of withdrawal from the European Community, as it was at the time, but the Conservative party and the Confederation of British Industry agreed that it would cost 2.5 million jobs. Our trade share with Europe has deepened since then, and our labour market is bigger. I think that upwards of 3 million to 3.5 million jobs would be lost now, because we would be turning our face away from those big markets around the world.

[Several hon. Members]

rose—

[Ed Balls]

Many other Members want to make speeches, and I have taken rather a lot of interventions already.

Let me ask a political question that brings us back to the economy. Why have things gone so badly wrong for the Prime Minister and his strategy over the past three, four, five months? I think I can help. I have discovered a column that was written in January by the Chancellor’s cheerleader, the former Member of Parliament, and now Sun columnist, Louise Mensch. Straight after the Prime Minister’s Europe speech, she wrote that

“the sound we just heard was Cameron shooting Farage’s fox...This speech saw the George Osborne/Michael Gove wing of government triumphing over the Nick Clegg one...Canny Tories will take this and run with it...George Osborne is a tactical genius.”

There we have it, from a former MP whose one political achievement was to make Corby Labour again. There it is, completely exposed: the Prime Minister is the front man, but the tactical genius—the brains behind the Europe strategy—is the Chancellor of the Exchequer.

We all remember when the Prime Minister said that his Europe speech represented

“a tantric approach to policy-making.”

I have to say that from this side of the House it looks more like sado-masochism—and we all know that the Chancellor likes a bit of that. “'If it’s not hurting, it’s not working” has been his motto for a long time.

[Helen Jones (Warrington North) (Lab)]

Will my right hon. Friend give way?

[Ed Balls]

Not now.

I have checked this, and, sadly, it is true. A rather more serious Conservative commentator, Mr Paul Goodman of ConservativeHome, confirmed on his blog back in May of last year that the Chancellor was, indeed, the brains behind the Prime Minister’s referendum stunt. That casts further doubt on the judgment of the Prime Minister. Surely by now he has worked it out. After all, his Back Benchers and the country have worked it out. This is the Chancellor who claimed bringing back Andy Coulson would be a strategic triumph. He is the one who said taking child benefit away from middle-income families would be a masterstroke. He is the one who said that gambling his credibility on our triple A rating was sound economics, and that cutting tax credits and labelling as scroungers 3 million working families—an average of 6,000 in every Tory constituency—was somehow good politics, and that cutting taxes for millionaires would wrong-foot Labour. Surely even the Prime Minister has worked it out by now. This is the man who last year gave us “Omnishambles 1” and “The Budget debacle” and who has now given us “Queen’s Speech 2”, “Omnishambles 2” and the European debacle as well. The fact is the economic plan has failed, the deficit plan has failed and the European plan is failing as well, and when this Government finally collapse in chaos, it will be this Chancellor who gets the blame.

14:11

[The Chancellor of the Exchequer (Mr George Osborne)]

That was certainly an odd speech from the shadow Chancellor. He called me a tactical genius, but those on his side are going around calling him a busted flush, and after the extraordinary 40 minutes of comments we have just heard from him, we can see why. The contrast is with a Government who are building an economy where those who want to work hard and get on are rewarded. The contrast is with a tax system that is being changed to support effort, with the largest ever increase in the personal allowance. The contrast is with a welfare system that is being changed so it always pays to work and benefit bills are being capped so no family gets more from being on benefits and out of work than the average family gets from being in work.

In this Queen’s Speech we have measures to help those who want to set up a small business and employ people through our employment allowance—which was not mentioned by the shadow Chancellor, but I assume the Labour party will not vote against it. We have measures to help families who dream of home ownership and to help them with their mortgage costs. We have measures for savers, with a Pensions Bill that will provide a generous single-tier pension, and we have measures to help those who want to stay in their homes and avoid the lottery of care costs, with our Care Bill. The only reason we can do all these things is because we are clearing up the mess and the things that went so badly wrong in our economy.

[Clive Efford (Eltham) (Lab)]

On the issue of fairness, the 13,000 people who earn more than £1 million a year share a combined income of £27.4 billion, and they are going to share in a £1.2 billion payout. How can that be justified and fair?

[Mr Osborne]

In every single year under this Government the rich will pay more in tax than in any single year of the Labour Government that the hon. Gentleman consistently supported, and the top rate of tax will be higher than in any single year of the Labour Government he supported. We put up capital gains tax so we avoided the scandal that they presided over—indeed, that the shadow Chancellor presided over—of cleaners paying higher rates of tax than the hedge fund managers they work for. That is what we have done to ensure fairness in our tax system, and that is what we are going to continue to do.

[Anas Sarwar (Glasgow Central) (Lab)]

The Chancellor said those who work hard will be rewarded. Can he explain why wages are falling, household budgets are falling and the cost of living is going up? How is that fair?

[Mr Osborne]

Let us look at what the Governor of the Bank of England said in his press conference this morning:

“there is a welcome change in the economic outlook…But this is no time to be complacent—we must press on to ensure a recovery”.

Yes, there was also the disappointing news that unemployment had gone up, but we also saw that the claimant count and youth unemployment had come down, and the monthly unemployment data were a lot more encouraging than the three-month survey. That is the reality of the current data.

[Geraint Davies]

Does the Chancellor agree that the key problem is that the debt:GDP ratio will rise from 55% in 2010 to 85% by 2015? The answer to that problem is not just to cut the debt, but to increase GDP. Under Labour, GDP went up by 40% between 1997 and 2008, and the Chancellor inherited a growing economy which is now flatlining because of his policies.

[Mr Osborne]

We inherited an 11.5% budget deficit that was adding to our national debt every year, and what the hon. Gentleman and the shadow Chancellor want to do is add further to borrowing. The shadow Chancellor was asked time and again what the cost of the proposals in the amendment the Opposition are asking the House to vote on tonight would be. He would not give that figure, but I will give it for him: it is a £28 billion amendment that would add to borrowing. He comes up with the ludicrous argument that by borrowing more, we can borrow less. That is why he is making so little progress with his economic argument.

[Chris Williamson (Derby North) (Lab)]

Will the Chancellor at least acknowledge that when he came into office he inherited a growing economy, and his policies have led to it flatlining?

[Mr Osborne]

This is what I have to say about the idea that this Government had some kind of golden economic inheritance from the Labour party: we inherited a situation in which Britain had had the deepest recession since the 1930s, the worst banking crisis in the entirety of British history and the highest budget deficit in the entire peacetime history of this nation. If that is a golden economic inheritance, I would hate to see what the hon. Gentleman thinks a hospital pass looks like.

The shadow Chancellor mentioned France in his remarks. Exactly a year ago the Labour leader could not contain his excitement about the economic programme being unveiled in France and about the red carpet being rolled out for him at the Elysée palace. “Chers camarades” is how he addressed the Socialist party gathering. He said, “What President Hollande is seeking to do in France, I want to do in Britain.” We do not hear much these days about Labour’s French connection. We still have liberté and egalité, but not much fraternité—although fraternity has never been a great topic for the Miliband family.

What we did not hear from the shadow Chancellor was his response to the fact that 1.2 million jobs have been created in the private sector, and that although, yes, our deficit is still too high, it has fallen by a third. He says we are borrowing more. We were borrowing £158 billion a year as a country in 2009-10, and this year it is forecast that we will be borrowing £114 billion. That is a £45 billion reduction in borrowing. None of that has been easy to achieve, and every single measure has been opposed by Labour. Not a single measure in its amendment today would help deal with that deficit, but our plan of monetary activism, fiscal responsibility and supply-side reform is delivering progress.

[Andrew Selous]

On employment, is the Chancellor aware that the United Kingdom’s overall employment rate is growing at almost double that of the United States and is rising faster than that of any other G7 country?

[Mr Osborne]

My hon. Friend is absolutely right. Last year, employment in the UK grew faster than in the US, France, Germany, Japan and the eurozone as a whole. Employment in the UK is now above its pre-recession level. Of course we must go on taking the difficult measures necessary to get our deficit under control, and make sure we support businesses that want to hire people to support the private sector recovery. The path being offered by the Opposition, however, would lead to complete disaster.

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

When the Chancellor’s party was in opposition, the right hon. and learned Member for Rushcliffe (Mr Clarke) took the credit, before the banks collapsed, for the economic prosperity, claiming he had created it when he was Chancellor. How does the current Chancellor answer that point?

[Mr Osborne]

The hon. Gentleman is saying that somehow we have a responsibility for the financial crash or for the problems in the banking industry, but he neatly skips the fact that not only was Labour in office for 13 years, but the shadow Chancellor was the City Minister. He did not have any old job in Government —he was the City Minister when Northern Rock was selling those 120% mortgages and the Royal Bank of Scotland was thinking of taking over ABN AMRO. He is the architect of the tripartite regulation, which failed so catastrophically. He is, literally, the last person to have any credibility on this subject.

[Nadhim Zahawi]

The shadow Chancellor also claimed victory in keeping this country out of the euro. Will the Chancellor remind the House of the cost of the euro preparation unit, and when that unit was closed down?

[Mr Osborne]

The euro preparation unit was shut down by this Government in 2010, but the shadow Chancellor does not seem to know what Labour policy is. The Labour party is committed in principle to joining the euro. [Interruption.] The shadow Treasury team do not know what the monetary and currency policy of their own party is—that is absolutely ridiculous.

[Charlie Elphicke]

The Government have set out a clear and costed economic policy, which they are pursuing. Does the Chancellor share my concern that the Opposition cannot set out their costings, cannot say how much they would borrow and cannot even say whether they would back a referendum? The shadow Chancellor has been completely unable to answer any questions put to him in any straight way whatever.

[Mr Osborne]

The shadow Chancellor could not answer the simple question of how much the amendment he is asking us all to vote on this evening would cost. Surely he must reflect a little and realise that each year his appearance in these debates is a source of consolation and comfort to the Government. He must wonder why each year he makes the same arguments for borrowing but there is no improvement in Labour’s economic credibility. He does not seem to understand that the public think that Labour spent too much, wasted their hard-earned money and would do it all again. Does he not feel that he owes it to the British people to apologise for the mistakes he has made and the damage he has inflicted on their living standards? Should he not stand up and say, “I’m sorry, we got it wrong and we won’t do it again”?

[Sammy Wilson (East Antrim) (DUP)]

The Chancellor’s point, “You can’t borrow more to borrow less”, is a good soundbite, but he does himself a disservice, because some of the borrowing undertaken by this Government has been very effective in reducing the deficit. Only yesterday, we saw 850 new jobs in Allstate in Belfast as a result of investment in the broadband network—that is 850 new taxpayers. Does he not accept that we can borrow, and that by borrowing and putting the money into the right things we can bring the deficit down?

[Mr Osborne]

I am all for spending money on vital economic infrastructure, including broadband, and all for trying to switch the budget more from current spending to capital spending. That is precisely what we are engaged in as part of this spending round, but we have to take the hard decisions on where we are going to get our revenue from or take the hard decisions on what we will cut instead. We are making a sensible switch towards capital spending.

[Mr George Howarth (Knowsley) (Lab)]

Can the Chancellor name a single occasion before the banking problems in 2008 when he and his party argued for tighter regulation of the City?

[Mr Osborne]

My party voted against the tripartite arrangement. I do not have the quote with me today—I will send it to the right hon. Gentleman or ensure that my right hon. Friend the Chief Secretary has it for the wind-up—but the shadow Chancellor at the time, my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley), warned in this House that taking prudential regulation away from the Bank of England was a massive mistake and that the Bank of England would not be able to spot the growth of debt bubbles in the economy. Tragically, that is precisely what happened a decade later, and in part the responsibility lies with the people who set up the regulatory system. Is it not extraordinary that Labour Members get up and say that the Conservatives said this or that, yet we are looking at the City Minister at the time? We are looking at the person who, before that, was the chief economic adviser who devised the system and who used to take pleasure in telling everyone that he turned up in government and gave Eddie George a letter saying that he was no longer in charge of banking regulation—that used to be the shadow Chancellor’s story, but he never talks about it now.

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

I think the country understands that we could not go on as we did, with a completely unregulated City, with bonuses out of control and with unjustifiable profits. The Government’s policy on taxation is fairer now than it ever was under the previous Government. May I ask the Chancellor, however, to address the matter of the housing market, to which he partly referred? In addition to the welcome measures in the Queen’s Speech, will he look into how we can increase the supply of social rented housing and deal with the fact that many non-domiciled people are buying property in this country, not to live in or to rent out, but to keep empty, forcing up prices for everyone, beyond what people can afford?

[Mr Osborne]

We are putting in place, right now, new guarantees—the first time that the Treasury has done this—for social housing associations to enable them to build more social homes; in the Budget, we also confirmed support for an additional 30,000 social homes, so we are taking action to help on that front. With our Help to Buy scheme we are also helping those who want to buy their own home in the private market. My right hon. Friend is absolutely right that we should do both, which is precisely what we are doing.

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

As we learned with great interest, there was much in the Queen’s Speech that will affect employment, skills and manufacturing in our country. This is an important part of our country’s future. Can the Chancellor assure me that there is a unit in the Treasury—or a plan for the Treasury—to carry out an independent evaluation of how skills, jobs and manufacturing would be affected if this country left the European Union?

[Mr Osborne]

I will come on to talk briefly about reform in the European Union, but I am clear that an unreformed European Union is also doing damage to British competitiveness and British jobs.

[Margot James (Stourbridge) (Con)]

The estimated cost of the Labour party’s plans is £28 billion. Labour opposes every one of our spending cuts, so does that not imply that it would fund the whole lot by pushing this country’s borrowing back towards £150 billion? Is that why the shadow Chancellor is so reluctant to say what more borrowing he could commit to?

[Mr Osborne]

My hon. Friend is right to say that that is the approach of the shadow Chancellor. The right hon. Member for Neath (Mr Hain), who is sadly not in his place, gave the shadow Chancellor some unsolicited advice last week—I think it was unsolicited. He said:

“Labour’s Treasury team need to get out on the stump now and work even harder. It shouldn’t just be left to Ed and Harriet”—

Miliband and Harman—

“to carry the heavy load”

on shows such as the “World at One”. We could not agree more, because it is fair to say that when the Labour leader appears on the radio—I am not sure how to put this delicately—there is a little confusion about what Labour’s economic policy might be. Ten times he was asked whether borrowing would go up or what his party’s policy was, and he did not reveal it. I will be fair to the shadow Chancellor and say that he is much more straightforward. He has a much clearer message than his leader: “Vote Labour and borrowing will go up. Vote Labour and welfare bills will rise.” Vote Labour and he will do it all again. It is not just the right hon. Member for Neath who wants to see the shadow Chancellor on the media more—we want to see him on the media much more.

[Helen Goodman (Bishop Auckland) (Lab)]

Yesterday, I met the chairman of Fujitsu, which has just put £800 million into the British economy. He told me that his company had done so only because this country is in the European Union. He was, however, rather disappointed not to have had a reply from the Prime Minister after writing to him with that news. Does the Chancellor of the Exchequer not understand that his Government should be more interested in providing stability for business than in pleasing their own Back Benchers?

[Mr Osborne]

It is very good news that Fujitsu is choosing to employ in the United Kingdom. I do not see the hon. Lady’s intervention as a hostile one that has put me on the back foot; what am I supposed to do about the fact that international companies are choosing the United Kingdom as the place to invest and create jobs? That is a tough one!

I have to admit that the hon. Lady has a point, but let me come on to say something about the change that is required, including the change in the European Union, which of course is a subject of debate today.

It is true that for much of my political life and, I suspect, the political life of many in the House, the concerns about Europe have primarily been ones of sovereignty and constitutional power—not exclusively, but those have been the most dominant. Those concerns have not disappeared, but they have been complemented by economic concerns, and those economic concerns have grown. There is concern that the European prescription of high taxes, expensive social costs and unaffordable welfare is slowly strangling the European economy. There are concerns from business that directive after directive, regulation after regulation load costs on European companies, especially small firms, and cripple their ability to compete against new challengers around the world.

The crisis in the eurozone has created an immediate institutional challenge for the UK: as 17 member states attempt to take steps to save their monetary union, how can we change the EU to protect our interests and make it work for us? But the crisis has only accelerated an economic argument that was coming anyway: is Britain’s membership of the European Union right for Britain’s economic future? My answer, like the Prime Minister’s, is that if we can achieve real change in Europe and our relationship with the EU, then yes, it is. That is the renegotiation that my right hon. Friend the Prime Minister seeks—a Europe that is more globally competitive and more flexible, a Europe that creates jobs and offers its people prosperity and accountability.

[Mr Bone]

Is not the Chancellor exactly right? Is not his view shared by those on the Conservative Benches? I am sure the Chancellor is forced by coalition politics not to be able to vote for the amendment, but if he were free from that restraint, would he back the Prime Minister’s policy by voting for the amendment tabled by my hon. Friend the Member for Basildon and Billericay (Mr Baron)?

[Mr Osborne]

This is a coalition Government with a coalition Queen’s Speech, which contains things such as the single-tier pension, the Care Bill and the help for small employers, which will make a real difference to people across the country. Our view is that the best route to achieving what I know my hon. Friend wants to achieve is by legislating in this House. As the Prime Minister said in his January speech, we now have draft legislation for an in/out referendum on the EU. We have done it in good time for this Session’s ballot for private Members’ Bills. It is now open to any hon. Members who do well in that ballot to adopt the draft Bill that we published yesterday and take it forward as the basis for legislation. As the Prime Minister said yesterday, we will do everything we can to make it law.

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

A moment or two ago the Chancellor said that if the renegotiation that the Prime Minister has set out on produced fundamental change, he would vote to stay in the EU. What will his position be if the renegotiation does not produce much change? That is what happened the last time this was tried in the 1970s. Not much change is not exactly an unlikely prospect, given the attitude of other European member states so far to the Government’s stance.

[Mr Osborne]

I do not think the Prime Minister will fail in his negotiating effort. I do not think the Conservative party will fail in its negotiating effort with the European Union. Do Members know why I do not think we will fail in that effort? The Prime Minister pulled us out of the eurozone bail-outs when everyone said that was impossible. The Prime Minister delivered a cut in the European budget when everyone said that was unachievable. The Prime Minister vetoed a bad treaty when people said that was unprecedented. I am confident we can achieve that new settlement.

There is another reason why I am confident we can achieve that settlement. I see around the table in Europe—around the ECOFIN table, where I was yesterday— many countries as concerned as we are about the future of jobs and investment on the European continent, people who know that the EU is not working as currently arranged.

[Several hon. Members]

rose—

[Mr Osborne]

I will give way to the Scottish nationalists in a moment.

It was not this Chancellor but the German Chancellor who said the other day:

“If Europe today accounts for just over 7% of the world’s population, produces around 25% of global GDP and has to finance 50% of global social spending, then it’s obvious that it will have to work very hard to maintain its prosperity and way of life.”

That was the leader of Germany speaking. I believe that there are out there other people who also seek change, but above all, for the United Kingdom, because of the changes happening in the eurozone, we need a new settlement and I am confident that the Prime Minister will deliver it.

[Pete Wishart]

The Chancellor of the Exchequer and I know that the UK is halfway out of the European Union. Does he agree that the best way for the Scottish people to remain within the European Union is to vote yes in the referendum next year?

[Mr Osborne]

As our Scotland analysis papers show, Scotland would have to apply to join the European Union as it became a new state. I am glad the Scottish National party is taking part in this debate on economic policy. Perhaps we will get a clearer view from SNP Members, after the shambles of the past three weeks, of what their policy is on the currency that Scotland would use, should Scotland vote to leave the Union. We have not had a clear answer. Some members of the SNP have said that Scotland should have its own currency, others have said that Scotland should join the euro, and still others have said that they would negotiate a monetary union with all of us in order to keep the pound. There is complete confusion in the SNP ranks and until they have a clear answer to that, they will not be listened to on much else.

[Mr Jenkin]

Does my right hon. Friend agree that the Government are committed to what one might call a policy of negotiate and decide, although that has a familiar ring to it? Would it not help the clarity of this debate if the Government set out exactly what they intend to negotiate on? That has not been clear from anything they have so far said.

[Mr Osborne]

As my hon. Friend knows, and he takes a close interest in these matters, this is the beginning of a process of setting out what we want to achieve in a renegotiation, and in a conversation about that. Of course, we will then seek to achieve that renegotiation, achieve that new settlement—I am confident that after the election the Prime Minister and a Conservative Government will be able to achieve that—and put it to the British people in a referendum.

[Charlie Elphicke]

One of the things my right hon. Friend drew attention to was the problems facing our European neighbours and the challenges posed by their welfare states. Our action in getting on top of the problems of welfare, reforming welfare and making sure that work pays is key to dealing with our place in the world and making this country competitive. I draw a distinction between that and the attitude of the Labour party, which has opposed every welfare reform proposed by this Government.

[Mr Osborne]

My hon. Friend is right. There was a ludicrous remark—I do not know whether anyone noticed it—from the shadow Chancellor when he said that Labour supports tough welfare reform. Labour Members have voted against every single welfare proposal put to the House. The shadow Chancellor thinks the benefits cap is “too low” and that it is not set at the right level at £26,000. That is the problem. Any view of Britain, and any view of western nations, is that they need to do more to constrain the growth of entitlement spending and more to make sure that welfare pays, and to spend the money that they save on things such as infrastructure in Northern Ireland, broadband, high-speed trains and the Crossrail project under London—the vital economic infrastructure that our country needs.

[Several hon. Members]

rose—

[Mr Osborne]

I will give way to Labour Members in a moment if they can help me answer this question. What on earth is the policy of the Labour party towards an in/out referendum on Europe? The shadow Chancellor was asked that again and again. The question is this: do the Opposition rule out offering an in/out referendum at the next general election—yes or no? What is the answer?

[Chris Williamson]

Perhaps the Chancellor can answer this question. Toyota, just down the road from my constituency and the biggest inward investment in western Europe, came to Derbyshire because it gave access to the European market. Does the Chancellor think that, if an in/out referendum was hanging over this country and Toyota was thinking about investing now, it would take that decision to invest in Derbyshire, or would it take its investment somewhere else inside the EU?

[Mr Osborne]

A lot of those big Japanese car plants came to Britain under a Conservative Government who were offering them a competitive place to do business in the world. I am pleased to say that under this coalition Government we now export more cars than we import for the first time since the mid-1970s, and we will go on having a successful car industry because we have specific policies to back the car sector, but above all because we have cut corporation tax and made this a competitive place in which to do business.

[Several hon. Members]

rose—

[Mr Osborne]

I will give way to whichever Labour MP can answer this question: do the Labour party rule out an in/out referendum on Europe?

[Andy Sawford (Corby) (Lab/Co-op)]

It is six months to the day since the voters of Corby in east Northamptonshire delivered a damning verdict on the Government. The key issues in that by-election were not the preoccupations of the right wingers in the Chancellor’s Tory party, but jobs and health care in this country. But since the Chancellor is so keen to ask us questions, will he answer the question that the hon. Member for Basildon and Billericay (Mr Baron) answered very clearly, which is: if there were an in/out referendum tomorrow, how would the Chancellor vote?

[Mr Osborne]

The policy is this: change the European Union, seek a new settlement, then put that to the British people in a referendum. This debate has revealed that Labour cannot answer the simple question: does it rule out offering an in/out referendum before the next general election? If it cannot answer that question, it will not be listened to on this subject any more, and people will be very, very clear that the only way to get an in/out referendum on Europe is to have a Conservative Government after the next election, so people should vote Conservative in that election and make sure that they have their say.

[Nadhim Zahawi]

Does the Chancellor not agree that the double-speak we heard from the shadow Chancellor and his reluctance to trust the British people feed the people’s mistrust in politics?

[Madam Deputy Speaker (Dawn Primarolo)]

Order. I listened very carefully to the hon. Gentleman’s intervention and I am sure that we are not implying any misleading in this Chamber by any hon. Member.

[Nadhim Zahawi]

Double-speak is not misleading.

[Madam Deputy Speaker]

I think it implies something. [Interruption.] I would be grateful if the hon. Gentleman did not argue with me, particularly if he wants to be called in this debate. That is a very dangerous route to take. All hon. Members would do well to moderate their language and participation in the debate to a more reasonable level.

[Mr Osborne]

Let me conclude, because I am conscious—

[Ed Balls]

Will the Chancellor give way?

[Mr Osborne]

Of course I will give way.

[Ed Balls]

rose—

[Mr Osborne]

Hold on. I have not given way yet. I will give way to any Labour Member who can answer the question: do they rule out an in/out referendum before the next general election? Yes or no?

[Ed Balls]

To avoid any risk of double-speak, Madam Deputy Speaker, in order to make sure that we have the full facts before us, the Chancellor claimed that he was tackling the welfare bill—[Interruption.] No, no double-speak. Let us be absolutely clear that between 2010-11 and 2012-13, expenditure on benefits has gone up, because of higher unemployment, inflation and other things, by £8.1 billion. To avoid double-speak, will the Chancellor confirm that welfare spending is up by £8 billion in the last two years?

[Mr Osborne]

We have spent more on pensions, and we are proud that we have done so, and we have a triple lock on pensions and pensioners last year got the biggest ever increase in the state pension. As for other areas of the welfare state, we have cut welfare entitlements by £19 billion a year.

Let me conclude, because there is a five-minute limit on Back-Benchers’ contributions. We have spoken about Europe, but many of the economic challenges that we face remain at home. We spoke about banking regulation, and an important part of the legislative programme this year is the Financial Services (Banking Reform) Bill, which is a carry-over Bill. We are making the changes necessary to fix our banking system, ring-fence our retail banks and make sure that we deal with the too-big-to-fail problem. We also have legislation to support small businesses. It will not be the most controversial Bill, because I suspect that the Labour party will not dare to oppose it, but it will be of enormous help to our constituents and to many businesses throughout the country. Our new employment allowance will cut the tax on jobs—

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

Not for another year.

[Mr Osborne]

We have to get the legislation because we need a national insurance Bill, which is what—[Interruption.] The hon. Gentleman had 13 years to do something for small businesses, and the only idea he came up with was to put up the small companies’ tax rate.

From next April, every business and every charity will have their employer national insurance contributions bill cut by £2,000 a year. It means that a business will be able to employ four adults on the minimum wage without paying any employer NICs at all. I know that the shadow Chancellor does not want to hear it, because his policy was to put taxes up on jobs. That is what he fought the general election on, and that is what he still talks about when people listen to him in his interviews. That is the point. The Opposition offer more borrowing; we are reducing the deficit. They want to increase the size of government; we want it reduced. They penalise enterprise and wealth creation; we support it. They would put a tax on jobs; we are abolishing it. While they would repeat all the mistakes of the past, we are engaging in the great economic challenges of the future. We are building an economy that will enable Britain to compete and succeed in the world. We are building an economy that helps people who want to work hard and get on. I commend the Queen’s Speech to the House.

[Several hon. Members]

rose—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. I remind hon. Members that there is now a five-minute limit on contributions from Back Benchers. I ask that interventions are brief and relevant, and those waiting to speak might wish to be a little conservative, or however one might like to put it, and not make interventions that would reduce the time available to them later in the debate.

14:47

[Margaret Beckett (Derby South) (Lab)]

The best that can be said about this Queen’s Speech is that it is inadequate on the economy. A pattern is emerging in the way the Government weigh the national interests on the one hand against the interests of the Conservative party on the other. From the outset, the Chancellor claimed that we had to cut faster and deeper than Labour had proposed, because only that level of austerity would reduce the deficit. It was clear then that the speed and depth of the proposed cuts were dictated by a political goal—a massive early deficit reduction speedily followed by economic success well before the next election.

The Chancellor was warned then that the scale and pace of that austerity risked the fragile growth re-established before the election, but for potential political gain he was ready to take a huge gamble with our economy. To that gamble he added self-inflicted wounds. He constantly told the British people, again for political reasons, that we were on the brink of bankruptcy, and so almost destroyed confidence. He made a fetish of our triple A credit rating, and then he lost it. He has hit our economy with a double whammy—greater austerity and, as a direct result, higher, not lower, borrowing.

There are three ways to cut the deficit: growth, taxation and spending cuts. The Chancellor made it clear from the beginning that he preferred spending cuts to tax increases, though his VAT increase hit everyone. Now he talks only about either tax or spending; he never mentions growth, because he does not have any. Meanwhile, other developed countries that have not followed his lead are growing while we are not.

The Chancellor is neglecting the opportunity of green growth. Potential first-mover advantages in green technologies are, just, still to be had, and with them new high-skill, high-value-added jobs, but unless the Treasury allows more ambition, those jobs will be elsewhere, not in this country. Meanwhile, his cuts increasingly come at the expense of the most vulnerable, justified by the rhetoric of scroungers and strivers. He justifies the bedroom tax as encouraging people to downsize, but the Government must have known that for many people there is nowhere to downsize to, so it is just a cut. If we cannot afford not to cut that benefit, as he alleges, we cannot afford to cut taxes for millionaires in the same week.

With the EU referendum omnishambles, what began as a gamble with our economy in the interests of the Conservative party has become the disregard of our economic interests. The Conservative party claims to be the party of business, but a key hate of business is prolonged economic uncertainty. Now we are telling inward investors, “We might leave the EU, but we’ll let you know in four years’ time.” Japanese, American and European inward investors all make it clear that they are in the UK because the UK is in the EU. Millions of jobs are at stake. A semi-detached status, such as that of Switzerland and Norway, means being bound by EU decisions without having a voice. The voice we have now is continually being weakened by the continued uncertainty about our membership and whether the Government even support it.

It is crystal clear to everyone, in this country and outside, that that disregard of our national interest has nothing to do with cool calculation of how that interest is to be served and everything to do with the interests of the Conservative party. The Prime Minister and the Chancellor are running scared—scared of the UK Independence party and scared of their own Back Benchers. As has been said already today, they are in office but not in power.

14:51

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

I would like to thank you, Madam Deputy Speaker, for selecting the amendment standing in my name and those of other hon. Members, and I would like to thank those Members who have signed it for their unwavering support. There can be no doubt that the nature of our relationship with the EU is of fundamental importance to this country, but the EU has changed since we first joined, and it is still changing. “More Europe” is the cry, and “More political and economic harmonisation” is the shout, but that is not why we joined.

[Mr James Clappison (Hertsmere) (Con)]

Does it not follow that the time for the British people to be given their say is long overdue and that we should give them every assurance that they should have that say?

[Mr Baron]

I completely agree. I think that the political system has denied the electorate their say for far too long and that Parliament needs to understand that. That is why some of us on the Conservative Benches have been campaigning for some time for a referendum in the next Parliament. I am pleased to say that the Prime Minister deserved credit for listening. In January he became the first major party leader to offer the country a referendum in 2017. But we, as a group on these Benches, have also long argued that our commitment must be both credible and believable. It is credible because the referendum in 2017 has an “out” option, but it is not yet believable.

The British electorate, quite understandably, are deeply sceptical of any politicians making promises about matters European, particularly EU referendums. Too many promises have been broken in the past. They remember Tony Blair’s broken promises about a referendum on the EU constitution, which never materialised. They are constantly reminded about Liberal literature promising an in/out referendum, which never materialised, even when they came to power. That is why we on these Benches have also campaigned for legislation in this Parliament for a referendum in the next, not because we do not trust the Prime Minister, but because the electorate do not trust politicians generally. I would argue that we as a party are more united on this issue than we have been for a generation. We have all signed up to the referendum in 2017; what we disagree on is the best way of convincing the electorate of the seriousness of our intent.

[Mr Bone]

Will my hon. Friend make it clear that 2017 is the back-stop, the latest date for the in/out referendum, and that it might in fact be earlier?

[Mr Baron]

It could well be earlier, but I am very content having a referendum in the next Parliament, because that will give time to renegotiate. However, that option does exist.

That is why legislation is more believable than election manifesto promises, too many of which have been broken in the past. That is why I very much welcome the party’s promise to support a private Member’s Bill, something that was not on offer when I asked a week ago. I also support the publication of the draft Bill yesterday. It just goes to show that a week can indeed be a long time in politics. However, the problem with a private Member’s Bill is that it is the second best option. We all know that a determined minority can block it by letting it run out of time. The Bill will fail, as so many others do, on a soggy Friday afternoon when no one notices.

That is why I urge the Prime Minister—I am pleased to see that the Chancellor is still in his place—to support the amendment. It provides him with a golden opportunity. If we were to win, that would provide him with the mandate to try to introduce legislation through the normal channels, which would stand a far better chance of succeeding. He should seize the moment. He could claim, quite rightly, that the situation was not of his making and blame me or us as a group. It would therefore be outside the confines of the coalition agreement. I must say to my right hon. Friend the Chancellor that the Liberals would be very hard pressed indeed to refuse to give time, given that Parliament would have expressed its view and that of the electorate. Let the media then knock at the Liberals’ door to ask questions.

The argument that there is no certainty that we would win such legislation is weak. There is no downside in trying. We may well win. Some MPs on other Benches—honourable and principled Members—support the concept. Even if we fail, we will have tried. On a matter of this importance, political transparency is paramount, and the electorate could then take note.

As a group on these Benches, I hope that we have helped in a small way to move the party closer to the electorate on this issue, but it is more important than party politics. I encourage other Members to do likewise within their own parties. Were the amendment to pass tonight, we as a Parliament would be opening the door to the possibility of introducing legislation that would stand a far better chance of succeeding. It would take a majority to defeat that legislation, rather than the determined minority it takes to defeat a private Member’s Bill. I therefore urge Members across the House to support it. I urge my own Front Benchers to support it. I urge the doubters to put aside their doubts and support it.

For too long the electorate have been unable to express their opinion on the changing nature of our relationship with the EU. The political establishment have essentially closed ranks over the past 30 years and denied the electorate a choice. We now have a golden opportunity to right that wrong. We should be bold of heart, seize the moment and do what is right by the electorate, and indeed by the country. I therefore intend to move the amendment.

14:58

[Mr George Howarth (Knowsley) (Lab)]

I will first say a few words about employment, particularly in the light of statistics released today, and then a few words about Europe. The employment situation in the UK and in my constituency is frankly depressing, and the figures released today by the Office for National Statistics emphasise that. Nationally, 3.8% of those aged 16 to 64 are on jobseeker’s allowance. Today in Knowsley the number of JSA claimants is 4,245, which equates to 6.3% of Knowsley residents, well above the national rate. Similarly, the JSA count for those aged 18 to 24 is 7.2%, whereas in Knowsley it is 13.2%. In my view, therefore, there is no room for complacency.

To be frank, many of the existing opportunities do not reflect the expectations of an ambitious country. Practices such as zero-hour contracts and the use by many high-profile companies of unpaid internships and agency work amount in many cases to systematic exploitation, particularly of young people.

There is growing concern about what is often referred to as the race to the bottom. In The Times a few days ago, the noble Lord Sainsbury of Turville was reported as arguing for a more progressive form of capitalism that recognises social justice and discussing the role that institutions could play in bringing it about. He also rejected the neo-liberal consensus of the past several decades.

Frances O’Grady, the recently appointed general secretary of the TUC, has mentioned the Prime Minister’s ambitions to erode workers’ rights. She said:

“'The Prime Minister wants to ‘repatriate’ those rights, and not because he thinks he can improve them”,

but because he

“wants to make it easier for bad employers to undercut good ones”.

Moreover, on the question of employment rights, Jon Cridland, the director general of the CBI, has said that the Prime Minister’s proposals would not be his starting point in any negotiation. It is clear that there is an emerging consensus that we should be discussing the quality of employment and the opportunities for people, rather than taking away the rights and privileges they already enjoy.

I am a Eurosceptic compared with many on the Labour Benches. I voted against the Maastricht treaty, because it removed the social contract. I am in favour of renegotiating the terms of our EU membership and think there should be a referendum at some point. It is not healthy for our democracy that the relationship between the political classes and the country has eroded to the extent that it has.

Where I part company with the Prime Minister, however, is on the sort of Europe that he wants to renegotiate, which is entirely different from the sort of Europe that I want to be a part of. I believe firmly that there is a case for renegotiation and that it should be followed by a referendum, but I certainly do not agree with the sort of Europe that the Prime Minister wants to bring about.

[Mr Bone]

The right hon. Gentleman is making a thoughtful speech and I understand entirely his position, but will he consider voting for amendment (b)? It does not specify a particular Bill; it just regrets that there is no EU referendum Bill in the Queen’s Speech.

[Mr Howarth]

No, and the reason why I am not prepared to do that is because the hon. Gentleman and the amendment anticipate a different kind of renegotiation from one that I would support. I have given serious thought to supporting the amendment, but it is possible on occasion to agree with the words of an amendment while not necessarily agreeing with the sentiment behind it. I do not want to be associated with a proposal to renegotiate Britain’s involvement in Europe that differs from how I would want it to be conducted. The difference between me and the hon. Gentleman and others who support the amendment is not necessarily over its wording, but over the intention behind it, which I do not want to be associated with.

I hope that in the coming years we will see a different arrangement between Europe and the United Kingdom. I also hope that we can improve people’s working lives and make work pay for a lot more people, particularly young people. I do not believe that that is the direction that this Government want to take, and I hope that when there is a change of Government we will be able to make the changes that I want to see.

15:04

[Sir Bob Russell (Colchester) (LD)]

Successive Governments have spoken of localism and sustainable communities, but the reality has not matched the rhetoric in many respects. That is particularly true with regard to the loss of post offices and neighbourhood and village shops, whereby Government policies over the past 30 years have hastened their decline, rather than helped sustain them to the overall benefit of society and the communities that lose them.

Nowhere is Government failure more obvious than in the closure of thousands of neighbourhood and village public houses—the traditional English “local”—and the rise of mega-drinking establishments with wall-to-wall boozing and round-the-clock easy availability of alcohol, aligned with below-cost-price special offers in supermarkets, which has fuelled an explosion in alcohol-related incidents in town and city centres, making many people wary of going to them in the evenings and putting serious extra pressure on our emergency services, including clogging hospital accident and emergency departments.

There is also worrying evidence from health professionals of an increase in drink-related conditions and that this self-inflicted rise in alcohol-induced illnesses is occurring in increasing numbers of young people. All this adds yet further burdens on the national health service and it also, of course, leads to devastation for the individuals concerned and their families. It is therefore a huge disappointment that we have not been presented with a Bill to address the failure of the past 30 years.

Early-day motion 57 supports a campaign group—a coalition of organisations—known as Fair Deal for Your Local, which is calling, as its name suggests, for a fair deal for local public houses. The group comprises the Federation of Small Businesses, the Forum of Private Business, the Campaign for Real Ale, Fair Pint, Licensees Supporting Licensees, Justice for Licensees, Licensees Unite, the Guild of Master Victuallers and the Pubs Advisory Service. That is a worthy list of organisations whose views both the coalition and the Opposition should listen to.

The campaign’s emphasis is on a much-needed reform of the tied model operated by large public owning companies, or pubcos as they are commonly called. Pubcos take more than is fair or sustainable from the sales of drinks, which makes it difficult or impossible for many licensees to make a living. This results in the failure, on a huge scale, of pubs up and down the country, with a closure rate of 20 or more a week and the pubcos selling them as though they were asset-stripping property developers rather than custodians of our nation’s rich social heritage.

The following statement could easily be adapted as a Bill:

“The Fair Deal for Your Local campaign believes that the way to ensure a fair deal for pubs—and to deliver the Government’s clear commitment—is to include in the statutory code an option for tied publicans to only pay a fair, independently assessed market rent to the pub owning company—a ‘market rent only’ option.”

It is estimated that this would bring down the cost of a pint in pubco-owned pubs—around a third of all British public houses—allowing many pubs to survive and thrive. It would also lead to fairer access to public houses for small brewers, which would boost their businesses and increase choice at the bar. I would have thought that the coalition welcomed such measures. It must be stressed that all family brewers would be excluded, because the code would apply only to companies that own more than 500 pubs. This relates to pubco public houses, but legislative help would also benefit other neighbourhood public houses.

In commending the Fair Deal for Your Local campaign, I congratulate the excellent work of my hon. Friend the Member for Leeds North West (Greg Mulholland), who tabled early-day motion 57. I also remind the House of what I have said on this subject in previous debates. In November I said:

“We need to amend the tax levy on beer sold in our traditional public houses. We should have a tax-neutral approach to keep the Treasury happy and bring huge social benefits, including job retention and creation, rather than there being the loss of jobs that we continue to witness in the sector.

Most publicans of neighbourhood and village public houses run responsible establishments. Their customers should be rewarded, not financially penalised because of the irresponsible marketing carried out by supermarkets and mega-drinking establishments.”—[Official Report, 1 November 2012; Vol. 552, c. 429.]

I returned to this theme in the Budget debate in March, when I observed that

“there are mixed messages on alcohol tax and the coalition Government’s desire to tackle binge drinking and improve the health of the nation.”

I described the confusion caused by having a debate on whether there should be minimum unit pricing alcohol when the Chancellor was knocking 1p off the price of a pint of beer, and added:

“We need a variable price structure to help traditional, community and village public houses, which would fit well with the coalition Government’s localism agenda and the last Government’s sustainable communities legislation.”—[Official Report, 25 March 2013; Vol. 560, c. 1362.]

Time prevents me from mentioning other Bills that I would have liked to be included, such as one on building council houses. The lack of council house building over the past 30 years under the policies of the Tory Governments led by Thatcher, Major and Blair has led to a housing crisis.

Unlike some, I will loyally support the Queen’s Speech this evening.

15:09

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

As always, I listened carefully to the Queen’s Speech with the intention of examining how the new measures would affect my constituents. I was also looking for measures that would ease the strain on the families in my constituency who are worried about unemployment and the rising cost of living. I was sadly and expectedly disappointed.

Before listing my concerns, I will place on the record a couple of observations on how we got into the deep economic difficulty that is causing desperate hardship for many families in my constituency. The fundamental error of this stagnant coalition Government was to assume that they could clear the deficit in four years. Their plan was to use the final year in office to hand out sweeteners to the electorate, who would be so overwhelmingly grateful that they would elect a Conservative majority.

Dealing with the deficit is the defining issue facing this country. However, that should never have been conditional on or linked to the outcome of the next election. That was a political fix that was destined to fail. Everybody could see that it was politically too far-fetched, except for the opportunistic Liberal Democrats who disregarded their electoral mandate and traded their principles for government office.

The UK economy is 9% smaller today than was expected when this stagnant Government took over. In 2009-10, the deficit was £159 billion. It is now forecast to be down to £121 billion. However, the public debt overall is rising from £795.5 billion to a predicted £1.1 trillion.

On any reasonable analysis of our economic situation, two significant themes scream out loud and clear. The first is the continual anaemic economic performance and the second is our ability to pay off the debt, which is becoming increasingly strained as a consequence of the first point. While those two heads travel in opposite directions, our economy will never recover. The policies simply have to change. It is time that this stagnant Government chose to put the national interest first and their party political interests second.

Ordinary hard-working people and their families are struggling. Rents and mortgages have to be paid, as do ever-increasing energy and water bills. Families who spent £600 a month to cover those costs in 2005 now spend more than £800 a month. We have record fuel prices and record amounts of people in fuel poverty. We have 1 million young people out of work and left behind. Lending to businesses is continuing to fall. We have soaring unemployment. We have a Chancellor who has to borrow £245 billion more than he planned, who has failed his own economic test of retaining our triple A credit rating and who, over the course of this Parliament, will have delivered growth of a mere 1.7%. Ordinary working people are paying the price of this out-of-touch Government’s economic stagnation.

[Mr Jim Cunningham]

Does my right hon. Friend agree that one of the methods that the Government are using to make ordinary people pay for their incompetence is the bedroom tax?

[Mr Clarke]

My hon. Friend raises a very important point. While we witness the introduction of the second home subsidy, the effects of the bedroom tax are being seen in my constituency, where an estimated 2,128 individuals will be affected, two-thirds of whom are believed to have disabilities. Citizens Advice Scotland has revealed that nearly 800 victims of the welfare axe are desperately seeking its support. Welfare recipients are an easy target, but we should not point the finger too quickly because no job is safe in this economy.

To get our economy moving again, we need investment—investment for jobs, investment for the future and investment in the ordinary hard-working people of our country. We have been treated to a more-of-the-same economic plan, with no change on anything of importance. The Government are cutting taxes for millionaires while cutting support for our economy. Led by the Prime Minister and the Chancellor, this stagnant Cabinet of out-of-touch, upper-class millionaires has run out of ideas and run out of steam, while our country is running out of time. What a way to run Britain.

15:15

[Richard Ottaway (Croydon South) (Con)]

As a secondary modern schoolboy, I am always pleased to follow the right hon. Member for Coatbridge, Chryston and Bellshill (Mr Clarke).

In the regrettable absence of a debate on foreign affairs, I will use today’s theme to focus on the EU’s rule in economic growth. The British economy is not an isolated beast. It is part of a global economy and, in particular, a European economy focused on the EU. That European economy needs reform, but we need to be part of it.

Global economic success is to be found in single markets around the world. We should look at the economic growth in Brazil, Russia, India, China and the USA. What do those countries have in common? They are all single markets. The EU single market, an invention of Margaret Thatcher, which stretches from Athens to Oslo, is the largest single market in the world. We in the UK are 60 million in a world of more than 7 billion—less than 1%. Do we want to face the global markets alone or as a member of a trading bloc that represents 500 million people?

What is the alternative? Perhaps we could be outside the EU, negotiating our own terms of trade. Perhaps we could be an independent sovereign state, calling the shots on our own terms like Norway and Switzerland. Those propositions may sound attractive, but I disagree with the Secretary of State for Education, who says that life outside the EU would be “perfectly tolerable”. Norway and Switzerland do not call the shots. They pay billions every year for access to the single market and Switzerland has been forced into renegotiation.

We would have to renegotiate our own free trade agreements. The holy grail of trade agreements is an EU-US deal. We would look pretty dumb if we were leaving the EU just as it was signing up to such a trade agreement. Imagine the impact on our car industry, which exports five out of every six cars made in the UK, if it had to pay the EU import tariff on cars of 9.6%. Where would a foreign car manufacturer invest, faced with that situation?

[Mr Jenkin]

The United Kingdom has a trade deficit with the other 26 EU member states of £70 billion. I cannot imagine that the EU would want to cut itself off from the British market by getting into a trade war with the United Kingdom. May I also point out that we export more to the rest of the world than to the EU? The EU is declining in relative terms, whereas markets in the rest of the world are expanding. Surely we are a global trading nation, not just a regional trading nation, and that does not require us to be a member of the single market.

[Richard Ottaway]

We can all trade statistics on who trades what with whom, but about 50% of our exports are to the European Union. We export four times as much to the EU as to the United States.

[Mr Jenkin]

Will my hon. Friend give way?

[Richard Ottaway]

I will not give way.

We sell more to Sweden, which has a population of 9 million, than to India, which has a population of 1.1 billion. That is the truth of the matter.

[Mr Jenkin]

Will my hon. Friend give way?

[Richard Ottaway]

I am not giving way.

The EU is not going to let us set up an offshore free trade island like Hong Kong, undercutting its industries. We will have to pay for access to the single market. The EU will dictate the terms of trade, and we will still be under the thumb of Brussels. I say to my hon. Friend that that is not gaining sovereignty, it is losing it. The plan to impose an EU-wide financial transaction tax is just a warning shot. As a member of the EU, we can go to the European Court of Justice and challenge it. Outside the EU, it would simply be imposed and we would just pay the tax.

I say to the Economic Secretary that his policy on the eurozone is spot-on. Supporting policies that will stabilise the single currency area and encouraging growth through integration is exactly the right approach. At the same time, we expect the Treasury to keep a watchful eye on the national interest in the single market. A good example of that is the agreement on the single supervisory mechanism in the banking union, which shows the clout that we still carry in the EU and how we protect our position inside the single market but outside the eurozone. He should continue with that approach. That example also illustrates how far we have come in building alliances inside the European Union since the veto in December 2011. Inside, we simply have more strength.

No one denies that the EU needs reform, and I am no great Europhile on this. [Interruption.] May I say to my hon. Friend the Member for Harwich and North Essex (Mr Jenkin) that that sort of contemptuous laugh does no good to the debate whatever? No one denies that the EU needs reform. Primarily, it has to choose between being a social market economy and being something tougher. In his Bloomberg speech, the Prime Minister set out a course of action that recognises British Euroscepticism but keeps us at the table, using our influence. Within the EU, the UK will continue to thrive as a major player on the world stage and our economy will be stronger, but outside, I believe that the future will be bleak.

15:21

[Stewart Hosie (Dundee East) (SNP)]

It is a pleasure to take part in the debate. This Queen’s Speech is important, sandwiched as it is between the Budget and Red Book, which we already have, and the forthcoming spending review, the details of which we do not have but which still casts a shadow over the potential for growth and recovery in the UK. The Prime Minister mentioned growth in his speech on the opening day of the debate, stating that the measures in the Gracious Speech would “grow the economy”. He also said that they would

“deliver a better future for our children…win the global race”—[Official Report, 8 May 2013; Vol. 563, c. 28.]

and “cut the deficit”. Given the austerity programme so far, it looks like it will lead to 300,000 more children being in poverty by the end of next year, and the forecasts are that there will be up to 4 million children in poverty in a few years’ time. It is difficult to see how any of the measures in the Queen’s Speech can possibly live up to the billing that the Prime Minister gave them.

Given that the balance of trade has been in deficit to the tune of more than £100 billion for the past two years, and that the gap in the total balance of trade has risen by more than £10 billion in the past year, it is difficult to see how anything in the Queen’s Speech can live up to the Prime Minister’s description and do anything to allow us to “win the global race”, whatever that means.

Bringing the deficit down was another of the Prime Minister’s claims, but as the right hon. Member for Coatbridge, Chryston and Bellshill (Mr Clarke) said, net borrowing was forecast at £92 billion but ended up being £121 billion. The cumulative deficit—the net debt—was forecast to rise to about 92% of GDP in a couple of years, but it is now forecast to hit more than 100% of GDP and about £1.6 trillion. There is a great deal of Government rhetoric about what the measures in the Queen’s Speech are supposed to do, but very little real evidence.

However, it is not as though the Queen’s Speech contained no growth measures. There was one potentially significant one—the national insurance employment allowance—but that was not altogether new. It was in the Red Book and budgeted to cost the Government £1.3 billion next year. It is welcome, but because the impact of the Budget policy decisions is to be fiscally neutral over the five years from 2013-14, the overall impact on economic growth of that one meaningful measure will be muted to say the least. It is worse than that, because any beneficial effect on growth of that sensible policy will be wiped out entirely by the additional cuts to expenditure that are anticipated in the forthcoming spending review.

[Charlie Elphicke]

If Scotland became independent, which currency would it use?

[Stewart Hosie]

It would use sterling. We have answered that question many times. We are speaking about the UK Government’s Queen’s Speech and how their programme for the Session will fail to deliver growth not just for Scotland but for everybody throughout the UK.

Let us be clear that the impact of the one good thing in the Queen’s Speech, the employment allowance, will be wiped out entirely if the economy is supposed to absorb the anticipated £11.5 billion of new cuts. That is the figure most commonly used for what is likely to be in the spending review. That will take the UK to discretionary consolidation—tax rises and cuts—somewhere in excess of £155 billion a year, every year, from 2015-16 onwards. Indeed, the Institute for Fiscal Studies has helpfully provided some information stating that it believes the real level of discretionary consolidation could reach £172 billion a year by 2017-18.

The Government plan to cut £11.5 billion, in addition to the cuts so far. To return to the point made by the hon. Member for Dover (Charlie Elphicke), that will be added to the 8.7% real-terms departmental expenditure limit cuts and 25% capital DEL cuts in Scotland. It seems extraordinary that when we are looking for real growth, the Government seriously propose stripping consumption out of the economy to the extent of about 8% of GDP and putting an additional £11.5 billion on top of the £140 billion or so of discretionary consolidation that is already planned, and replacing it with only a single sensible measure, the employment allowance.

What the Government are trying to do is not doable. They are trying to cut their way to growth, which cannot be done. They are ignoring all the evidence that austerity is hurting across the board, and I urge them even at this late stage to think again about their plan. They should rethink not just the contents of the Queen’s Speech or what we are likely to see in the spending review in June but the measures that we have already had in this and previous Budgets. Those measures will lead, as Olivier Blanchard from the International Monetary Fund has said, to the Government “playing with fire” if they allow the economic stagnation to continue.

15:27

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

When I received, somewhat to my surprise, a telephone call from my hon. Friend the Member for Basildon and Billericay (Mr Baron), inviting me to add my name to an amendment that regretted the absence of an item in the Queen’s Speech, I confess I was somewhat astonished. I think it a mark of the enormous shift in opinion that is taking place on what has for decades been a matter of fundamental consensus in British politics that we find ourselves straining the conventions and normal behaviour, and even the Standing Orders of the House, to accommodate this debate. I say to my hon. Friend the Member for Croydon South (Richard Ottaway) that I utterly respect the sincerity of his views, and I was expressing no more than frustration that he would not allow me a spare minute of his time to explain the statistics on which I think this fundamental debate should be based.

I agree with the terms of the amendment and will support it, although I might not have tabled it myself. I doubt that some of the noise and discord around this issue has impressed those who failed to support us in the elections two weeks ago, reflecting a certain and widespread despair about the ability of all three main parties to keep their promises on referendums, which has become an emblem of the distrust in which so many of our voters hold the British political establishment.

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

Many members of the British public, whether they hold the views of my hon. Friend the Member for Croydon South (Richard Ottaway) or those of my hon. Friend the Member for Harwich and North Essex (Mr Jenkin) and indeed myself, would like to have the discussion. We went into a referendum on the alternative vote with a discussion led by the Prime Minister, who was not in favour of it, and other Members held honourable positions on the issue. This is about giving the discussion to the British public, however they would like to view it.

[Mr Jenkin]

I am grateful to my hon. Friend for that intervention. I will not debate at length the quality or timing of an EU referendum, although I think that those who voted for UKIP and are likely to do so in next year’s European elections will not be impressed unless we make every effort to hold a referendum as soon as possible, rather than when it suits the three main political parties for whatever reasons we have to continue putting it off.

I wanted to say to my hon. Friend the Member for Croydon South that I have the figures from the House of Commons Library, and our total earnings from abroad constitute 44% of our GDP. We are a global trading nation and trade a higher proportion of our GDP than any other major European state. Trade with the EU comprises 19% of GDP, and 25% with the rest of the world. The rest of the world is the growing proportion; the EU is the declining proportion. Manufacturing is the only part that would be excluded, by virtue of the tariffs that were mentioned earlier by my hon. Friend, and manufacturing exports to the EU comprise 10% of GDP, and 10% to the rest of the world—a substantial and important part of our economic activity.

The point is that there is no evidence that we would not continue to trade that proportion of our manufactures with the European Union—incidentally, the figures are inflated by what we know as the Rotterdam-Antwerp effect because a lot of what we export to the EU is instantly exported to the rest of the world. We are regulating our entire economy and burdening our taxpayers with the costs of the contribution—rising to £19 billion gross—with our membership of the European Union. One hundred per cent. of our economic activity is burdened with those regulatory costs for the sake of less than 10% of our overall GDP.

[Sir Bob Russell]

May I ask my neighbour and parliamentary colleague whether anything he has just said could not have been said by a member of UKIP?

[Mr Jenkin]

I totally agree. The irony of this debate is that a lot of people in UKIP are saying things that are similar to what is felt by a lot of people who would like to vote Conservative at the next election. There is a majority in this country, and I think the Prime Minister was right to say that he wants a different relationship—a new relationship with our European partners.

This entire debate is conducted on the premise that membership of the single market is indispensable to our national interest, is it not? Those who say we must remain in the EU come what may believe that the single market is indispensable to our national interest, but here are the facts. I have already mentioned how little of our GDP that we export in goods would be subject to tariffs were we not to have a free trade arrangement with the EU—probably around 8.7% of GDP. The idea that 3 million jobs are dependent on exports to the EU and that we would lose them if we left is a myth. There is no substantial evidence that we would lose any jobs. On the contrary, if we had a freer and less regulated economy, we would probably create more jobs by trading more easily with the rest of the world.

The EU is in long-term structural decline and our non-EU markets are expanding. The UK enjoys a trading surplus with the rest of the world—with which we trade much more effectively—and we have a £70 billion trade deficit with the EU. The rest of the EU would therefore not want a trade war with the UK; it would not be in its interest. The idea that Ireland, or even Germany, would enter a trade war with the UK is absolutely ridiculous.

By the Commission’s own admission, EU red tape costs 4% of the EU’s GDP. The single market does not reduce the costs of doing business in the EU; it is a regulatory burden on trading in the EU.

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

Will the hon. Gentleman give way?

[Mr Jenkin]

I am not going to give way.

The EU internal market has become an end in itself—it is a means of promoting political integration. We must accept that, in the minds of our European partners, the single market is indivisible from the treaties. Even if the UK were to leave the EU altogether and apply for article 50, the EU would be legally required to negotiate free and fair trade with non-EU countries, so we would continue to have access to EU markets. That different perspective, which voters and large parts of business are beginning to appreciate, is shifting the burden of the debate.

Are we doing the right thing in creating such long uncertainty by putting off a referendum until 2017? Should we not have the referendum much sooner to bring the debate to a head? Are we too scared of our own voters to face the truth?

15:35

[Mr Jim Hood (Lanark and Hamilton East) (Lab)]

I am delighted to have caught your eye, Mr Deputy Speaker, and to speak in the debate on the Gracious Speech. I made my maiden speech in a debate on the Gracious Speech on 8 July 1987, following Mrs Thatcher’s third victory. I remember using an analogy. I said that the Government and the Gracious Speech were more of the same poison in a different bottle. I thought of that comment when I looked at the Conservative Back-Bench amendment. It is déjà vu, or Maastricht, all over again. If historians check the speeches on the Maastricht debate in Hansard against what we have heard in the past hour or so, I am sure they will understand what I am saying.

[Mr William Cash (Stone) (Con)]

As one who led the Maastricht rebellion, I should say that, at the time, we made predictions. Exactly what we said would happen has happened—that is the difference.

[Mr Hood]

The hon. Gentleman has been saying exactly what he said in the Maastricht debate ever since, at every opportunity. It will surprise no one, including me, if he continues to say those things, but I am speaking to the reality. Some say that the Conservative amendment is a UKIP amendment. In fact, the hon. Member for Harwich and North Essex (Mr Jenkin) accepted that he agrees with a lot of what UKIP says.

I remind the House of something the Prime Minister said in his Conservative party leadership campaign. He promised the country and his party that he would make the Conservatives electable again, and get rid of the “nasty Tory” image. He travelled to the Arctic to embrace huskies, and came back here and cuddled hoodies. These are changed days. Where is he now? This week, with conspiracies going on behind his back in his own party in Parliament, he is away negotiating an EU trade deal. You could not make it up! As my grandmother used to say, when the cat’s away, the mice will play. That is what is happening to him.

The debate and the run-up to it are more like Shakespeare’s assassination plot in “Julius Caesar”. The big question is who will be Brutus. Margaret Thatcher’s political assassination in 1990 had nothing, or nothing much, to do with Europe, but we have the same modus operandi. As my hon. Friend the Member for Bolsover (Mr Skinner) pointed out in a speech two weeks ago, the Conservatives kicked Mrs Thatcher out on the street like a dog.

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

My hon. Friend is asking questions, but not pointing fingers. Does he think it was significant that the Chancellor made a very anti-European statement today? He made it clear that he is in line with the people who are calling for the referendum, and demanding we join them, while the Prime Minister is away. He may not be the great wizard, but he is certainly the great Machiavellian.

[Mr Hood]

I do not disagree with that. The Chancellor is supposed to be the campaign manager for the Conservative party and he could well fit the title of Brutus. I do not want to accuse him of being a Brutus, because there are so many of them about. It will be interesting to see who is the first to stick the dagger in. I should thank the hon. Member for Croydon South (Richard Ottaway) for having the temerity to speak up from the Government Benches in a pragmatic and sensible way on our membership of the European Union.

One of the many questions thrown at our Front-Bench team is whether they support a referendum. Hon. Members should not bother to ask me. I do not support a referendum on staying in the United Nations, I do not support a referendum on staying in NATO and I do not support a referendum on staying in the European Union. Yes, the EU needs reforming, but it can only be reformed from within. We cannot reform it and influence it from outside, and I hope that can be taken as read.

It is my judgment, supported by a considerable weight of evidence, that today’s Conservative party is so far to the right that it refuses to select candidates that are moderate, pragmatic or pro-Europe. There lies the difficulty. I started my younger political life being anti-Europe, but I accepted that the world moves on and I moved on with it. In the Labour party in the late ’70s and ’80s, it was difficult to be a candidate for a European seat without being anti-Europe. That is exactly where the Conservative party is now. The selection process is causing all the difficulties for its leader today in Parliament.

[Mrs Main]

The hon. Gentleman is making an interesting speech. Does he not see that there is a slight bit of humble pie he should eat when he has a leader who is selected and guided by the unions?

[Mr Hood]

The hon. Lady will know that I always try to be respectful, but that is a foolish comment to make on such a serious subject. If she wants me to give my comments on the leader of the Labour party, I am absolutely delighted. I supported the leader of the Labour party, and I might point out that he is not doing badly, because we are considerably further ahead in the opinion polls than the Conservative Government.

It looks like I am running out of time. The Queen’s Speech should have been about stability, growth and employment.

15:43

[Mr William Cash (Stone) (Con)]

Basically, I regard the whole question of having a referendum as fundamental. I led the Maastricht referendum campaign, and the question now is about the same fundamental questions we were addressing then. This is the problem: nothing has changed, but much has got worse. The real problem is one of urgency. This is not just about an abstract theory of sovereignty; it is about the economy, who governs Britain and whether we can achieve economic growth, which is what the debate is actually about. We cannot achieve economic growth in the circumstances I shall now describe. In my judgment, it would be wrong to wait until 2017, given that the situation is so urgent, as hon. Members will hear in a moment. The British Chambers of Commerce, which represents 104,000 businesses and 5 million employees, is concerned about the delay and the uncertainty that goes with it and about over-regulation.

It is generally acknowledged by all parts of the House that our relationship with the EU has to change, but the trouble is with the institutional treaty changes, on which I have had meetings in Brussels. I saw Mr Van Rompuy only 48 hours ago and also Mr Olli Rehn, and the fact is that they are on a railway line, and are continuing along it. They talk about destiny, contracts with other countries—unenforceable as they might be—and more centralisation. The European Scrutiny Committee had an interesting meeting on that.

[Mr Jenkin]

In his travels around Europe, has my hon. Friend gained the impression that there is any appetite in the Commission or among our European partners for substantial treaty change that would allow the United Kingdom to have a different relationship with the EU while remaining signed up to the existing treaties?

[Mr Cash]

It is my opinion, based on extensive discussions yesterday and over several months, that there is absolutely no prospect of any changes that would even begin to alter the circumstances we are now in and which are pivoted on the existing treaties.

The problem is one of debt and deficit. We cannot pay for the public services needed in the country, whether health, education or whatever. I hear the point from Opposition Members and I agree with some of their arguments—it is not right that people should be deprived of services—and I do not believe that the entire answer depends on cuts. It depends on the subject of this debate, which is economic growth. We can grow with the rest of the world. We are running a trade surplus of about £13 billion with the rest of the world, other than the EU, with enormous potential in south-east Asia, India and Africa, which is where the emerging markets are. This is where we have to concentrate our efforts.

On our trade relations with the other 26 member states, I ask hon. Members to take account of the following very alarming figures. Two weeks ago, during a debate on the Maastricht treaty and the convergence criteria, I gave what was then the latest figure, which was that we were running a trade deficit with the other 26 of £47 billion. Now, some might think a deficit of that scale is an awfully big loss, but the following Monday the new figure came out. In one year, the deficit had risen from £47 billion to £70 billion. Furthermore, the German surplus, which was running at £30 billion, rose to £70 billion between 2011 and 2012. It is essential that we take note and hold this referendum—and hold it urgently—because we have to deal with fundamental changes in the relationship that will enable us to disentangle ourselves from the spider’s web that we have got caught up in and which we have not asked the British people about since 1975. It is a vital question of national interest, and I beg hon. Members to listen.

[Mr Jenkin]

Is not the corollary of what my hon. Friend is saying that if we follow the programme of the Labour party and continue to pursue a policy of closer integration and more burdens on our economy, it will mean more cuts, more borrowing, slower growth and more unemployment than if we sort out this relationship?

[Mr Cash]

My hon. Friend is completely right. Labour caused the debt and the deficit; now Labour Members want to engage in more borrowing without the growth that would come from expanding our trade with the rest of the world.

[Mr Hood]

rose—

[Mr Cash]

I will give way to the former Chairman of the European Scrutiny Committee.

[Mr Hood]

I am listening with interest, as I always do, to the hon. Gentleman’ s speech, and I have heard it a few times—a lot of times, in fact. If he gets his referendum and the vote is overwhelmingly, or marginally, in favour of staying in the EU, will he then embrace the EU and work from the positive side, in the same way as everybody else?

[Mr Cash]

I have come to the conclusion that we have to leave the existing treaties, but I will say one last thing. The UK Independence party argument is self-defeating, for a simple reason. If UKIP were to take a number of marginal seats on the scale that seems likely and we were to lose the next general election, UKIP will not get the referendum or make the changes it wants, because we would be faced with a Lib-Lab, pro-integrationist, anti-referendum situation, which would be a complete disaster. UKIP, with which I am quite obviously much in agreement, will not produce the answers, because it is not possible to repeal the European Communities Act 1972 or have a referendum without a majority of MPs. It does not have a majority and it will not get one.

15:51

[Mr Michael Meacher (Oldham West and Royton) (Lab)]

The Tory party is obviously going through one of its regular hissy fits over the EU. My experience is that it is best not to intrude in toxic family feuds, so I will confine my remarks to the economy.

Support for the Chancellor’s policy has totally evaporated. His intellectual ballast, provided by Reinhart and Rogoff—namely, that growth rapidly declined once a threshold of debt of 90% had been reached—has been blown out of the water. The International Monetary Fund, the citadel of neo-liberal capitalism, has deserted the Chancellor. The British Chambers of Commerce, the Federation of Small Businesses and even the CBI are now openly criticising from the sidelines. The only austerians who are still full square behind the Chancellor are those in the eurozone. I hope he takes comfort from the fact that that paragon of economic virtue is now his last remaining ally. Contractionary fiscal expansion—his policy—is, to use the words he used today, a totally busted flush. It is an absurd oxymoron, as it always was. Once the rate of growth has slowed below the expansion of debt, the policy is doomed, and that is exactly where we are. Given that, it is so counter-productive now to continue with a policy of semi-permanent stagnation that one has to wonder what the Chancellor’s real motives are—apart, of course, from his own personal survival.

The US has put in place demand-creating measures and is steadily coming out of recession. The UK and the eurozone have not put such measures in place and they are slowly sinking deeper into recession. So why is the Chancellor so obstinately refusing to accept what the evidence is telling him? Why is he refusing to accept what even the IMF is telling him to do? The only plausible explanation is that this is not, in the last analysis, a deficit reduction policy at all; it is ultimately driven by the obsession to shrink the state and squeeze the public sector into the farthest recesses of a fully privatised regime. If that is so, crucifying the UK economy on a cross of ideology is hardly a proper way to proceed.

Of course, the Chancellor likes to defend himself, as he did again today, by saying that any stimulus to the economy will only increase the debt and thus make matters worse, but that is simply not true. First, instead of being kitted out for privatisation, the Royal Bank of Scotland and Lloyds—which taxpayers and the Government own 82% and 39% of respectively—could be instructed to prioritise lending for industry, infrastructure, low-carbon technology and key manufacturing niches in which the UK has a natural advantage.

A second option is the taxation of the hyper-rich, who have so far contributed almost nothing to tackling the recession that they largely caused. The latest rich list published in The Sunday Times a month ago showed that the richest 1,000 people—that is, 0.003% of the adult population—have increased their wealth over the past four years since the crash by a staggering £190 billion. That is considerably more than the total budget deficit, and if it were taxed at the current capital gains tax rate of 28%, it could theoretically raise £53 billion.

[Stephen Williams (Bristol West) (LD)]

I note that the right hon. Gentleman talks about the “current” capital gains tax rate of 28%. Would he like to remind us what the rate was for the last five years of the Government in whom he served?

[Mr Meacher]

As the hon. Gentleman and everyone else knows, it was 10% less. I strongly opposed that; I think that it was wrong. I do not think that 28% is right either. The rate should be where Nigel Lawson left it—namely, at 40%. But let us stick with 28%. That would easily raise enough money to create between 1 million and 1.5 million jobs in two years, which would kick-start a virtuous spiral of growth.

The third option is another tranche of quantitative easing. The gigantic sum of £375 billion of quantitative easing has already been printed, and it has disappeared into consolidating bank balance sheets. A further, much more modest, tranche of £25 billion, invested directly into the economy, bypassing the banks, could once again kick-start the economy without any increase in borrowing at all.

It is also highly relevant to point out, which the Chancellor never does, that the balance of payments on our traded goods, which has been going up for a long time, reached the staggering level of £106 billion in this last year. That is 7% of gross domestic product. Worse news can be seen when we consider the growth that we like to think occurred in the UK during the best years up to 2007. The National Statistics register shows growth of £300 billion, but that is slightly less than the total for equity withdrawal from housing for the same period. In other words, the inflation of property assets largely accounts for the apparent growth. So, rebalancing the economy, which is now vital, is not going to occur simply with a flourish of the Chancellor’s wand. It will need a hard-won, relentless programme of manufacturing revival, and the restructuring of the banks to ensure that they look after the national interest and not their own.

15:57

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

People used to say that England’s bread hung by Lancashire’s thread. In this debate, I want to focus on some of the good news on the rebalancing of the economy. The news has not been all bad, and, despite the economic circumstances, my constituents and the people of Lancashire have a good track record of rebuilding and moving forward and of expanding exports and manufacturing.

Manufacturing output rose last month. Today’s figures show that, in my constituency, unemployment dropped again. It dropped compared with last month and with last year. We now have 81,000 more people working in manufacturing than we did in 2011. Despite all the economic troubles, the people of Lancashire live in the real world. They know how the welfare changes have helped to encourage people to get back into work, and they know that the Government’s policy is trying to help businesses large and small to export and grow.

Despite our domestic difficulties on the European Union at the moment, that “real-worldness” of my Lancashire constituents has been demonstrated in the recent local elections. The real story in Lancashire was not the United Kingdom Independence party; it was that the Labour party failed to take back the county that it had run for 26 years. Funnily enough, people are not convinced by the Ed and Ed show, or by Labour’s economic credibility. But let us move away from the European thing. I know that the Opposition would like to focus on it, but I think that it will pass—[Laughter.] Opposition Members might laugh, but there are nine marginal seats in Lancashire, and if Labour cannot win Lancashire county council, it is not going to win a general election fast. Labour knows that.

BAE is one of our local employers, and 19,000 people work in the aerospace industry. Profits are up, orders are up, and it has recently landed a £2.5 billion order from Oman to build Hawks and Typhoons. The Typhoon Eurofighter is made in Samlesbury and Warton. That did not happen by accident, but because of the investment in skills that successive Governments and this Government have put into my constituency. Recently, the Government announced extra funding for Preston further education college, and more is on the way for Myerscough. Building up the skills base is one reason why BAE remains one of the most competitive and leading exporters in the country, training thousands of apprentices every year—some Government funded, some not.

As we speak, the Prime Minister is abroad yet again, trying to make sure that we negotiate a free trade treaty to allow British business to prosper in the American market. Only recently, we had a state visit from the President of United Arab Emirates, which was partly about trying to sell more British and Lancashire-made manufacturing to the middle east. The Prime Minister has taken rebalancing the economy and moving forward on growth seriously.

We have seen investment through the Department for Business, Innovation and Skills, under its Secretary of State—the Liberal Democrat part of our coalition—that has helped to support the Lancashire local enterprise zone in Samlesbury, where we hope to get skills academies and more investment in our young people.

Then, beyond that, are the changes the Chancellor has produced in the Budget—an increase in the use of the R and D tax credit that rewards our investment, for example, and the rolling out of the patent box, which means people who exploit their intellectual property in this country will pay some of the lowest corporation tax in Europe. That is why this country has a future in growing its manufacturing base and is on the right path to rebalancing.

In future, I want the Government to continue to invest in the F-35 joint strike fighter and the new generation of unmanned aerial vehicles. I also look to a city deal for Preston, hopefully worth £300 million—if we can get the Treasury to move along a bit quicker.

Something that is important for the future of the whole country is shale gas, and it is under my feet, in my constituency, that the Bowland shale exists. It is currently valued at 35 billion barrels of oil equivalent of gas—a $200 billion revenue stream, should it be extracted. We need it in Lancashire and in the country more widely for security of supply; we need it as alternative energy; and we need it to make sure that this country benefits from its assets and its mineral wealth.

We in Lancashire have a story to tell. Lancashire’s history is about reinventing itself and building for the future. It is not for nothing that Preston is one of the northern cities that bucked the trend since 1908 and has been one of the most progressive cities. Let us remember for the future that—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order.

16:02

[Hazel Blears (Salford and Eccles) (Lab)]

I am pleased to follow the hon. Member for Wyre and Preston North (Mr Wallace), but I can assure him that it is not our party that is obsessed with Europe. I think he needs to get his own house in order.

The last few years have been enormously difficult for families trying to make ends meet, working really hard and trying to give their young people a decent start in life. Arguments will rage about austerity cuts and the lack of investment—there are as many opinions as there are economists. I do not want to rehearse those arguments today, but to talk about something practical that I believe can help to address our economy’s problems that are causing such misery to thousands of families across the land.

There is sometimes a moment—in business, in politics and in communities—when an idea begins to take root, to gather support and to gain traction and momentum. I believe that the emergence of social value is one such moment. If it is pursued with energy and integrity, it could make a reality of the so far rather nebulous concept of responsible capitalism.

Eighteen months ago, I worked with the hon. Member for Warwick and Leamington (Chris White) to take the Public Services (Social Value) Act 2012 through this House, and I was delighted to do so. The duty to put social value at the heart of public procurement came in at the end of January. If implemented across government, across local government and in private sector supply chains, I believe it could make a huge difference to the number of apprenticeships, the amount of local labour, the building of small and medium-sized enterprises and the encouragement of innovation.

Over the last year, I brought some big companies together with social enterprises to see how they could collaborate to renew our economy. I have been heartened by the commitment from the private sector. Good companies know that this is not about philanthropy or altruism, because doing good is good business. Moving from traditional corporate social responsibility into a place where businesses are using their mainstream models to make a social impact in procurement, human relations, marketing and product development is helping to get social value into companies’ DNA. That is the way to get our economy moving.

Let me give a couple of examples. Sodexo, whose headquarters are in Salford, is working with one of my local social enterprises to take on ex-offenders to carry out grounds maintenance and facilities management. That is a fantastic partnership. Deloitte is helping 30 social enterprises to grow to scale under its social investment pioneers programme. CH2M HILL, which built the Olympics stadium and is working on High Speed 2, has values that extend to every level of the company when it comes to apprenticeships, training and social mobility. Trading for Good is a brand-new website where people can ask questions such as “Which is the company that takes apprentices? I want that company to redo my roof. Which is the company that is building local supply chains? I want to spend my money there.” It is a fantastic resource.

[Mr Sheerman]

Does my right hon. Friend agree that social value, if combined—as it can be, and will be—with crowdsourcing and crowdfunding, will bring a real democratic renewal and a modern capitalism to our country?

[Hazel Blears]

My hon. Friend is absolutely right. The combination of social value and the creation of social investment through crowdsourcing, peer-to-peer lending and the activities of the Big Society Capital bank, which was a Labour idea, will take us along precisely that track.

My final example is Interserve, which employs 50,000 people and has a turnover of £2 billion. Its chief executive, Adrian Ringrose, recently committed himself to reinvesting 3% of his profits in the communities where his companies operate. That is the kind of thing that good, decent companies can do, and it can make a big difference. Such companies want to rebuild trust and secure a better reputation for big business, which has suffered from a lack of trust because of the activities of the banks and others. There is also the fact that it is good business.

The challenge for the Government is to enable that activity to become mainstream, rather than a niche activity in which only a few people engage. I ask them to think seriously about extending the Public Services (Social Value) Act 2012 to cover goods and major infrastructure. Over the next five years, we shall spend £200 billion on the really important things that we need: energy, transport—including High Speed 2—and building broadband. Why should we not include social value clauses relating to local labour and local supply chains in all infrastructure contracts? Can we not imagine the difference that that could make?

When money is tight—and it would be tight for us if we were in government— we can make a real difference by gaining extra impact from procurement and by doing business differently. We need community reinvestment, and we need to provide incentives for companies such as Interserve to do the right thing. A year ago, when I presented a ten-minute rule Bill in the House, I suggested that bankers could voluntarily put some of their income into local social enterprises. That might even make bankers popular, for goodness’ sake, and it is a very practical thing that we could do.

The Government must also support the development of measurement and metrics for social impact. There is a lot of good work going on. The Connectives Limited in Manchester, which is run by two inspirational woman accountants, has done fabulous work on social audit and accounting, but if we are to make such activity mainstream, we need to ensure that the metrics are rigorous and substantial. I should like the Treasury to do some more work on that.

In the time that I have left, I want to mention the Big Society Capital bank. It was the bank’s first anniversary last week, and I went to an event to mark it in the City. There was standing room only because there was such a huge appetite for the creation of a social investment market. The leadership of Sir Ronald Cohen and Nick O’Donohoe is first class. They have some really good ideas about how to get products to market, and about new types of bond such as social impact bonds. They are trying to persuade foundations and pension funds to invest. I welcome the Government’s consultation on a tax relief for social investment; I think that that is a very good idea. It could release an extra half a billion pounds into the market.

Difficult economic times demand creativity, innovation and boldness. We must get behind that, and make it happen.

16:08

[Mr Peter Bone (Wellingborough) (Con)]

It is a great pleasure to follow the right hon. Member for Salford and Eccles (Hazel Blears), who made a passionate and knowledgeable speech about social value.

Amendment (b) has been signed by 92 right hon. and hon. Members, drawn from the Conservative, Labour, Liberal Democrat, and Democratic Unionist parties. The amendment respectfully regrets

“that an EU referendum Bill was not included in the Gracious Speech.”

Members may wonder why I am speaking about the European Union on a day that was allocated to a debate on economic growth. The one thing that is certain is that there is absolutely no connection between economic growth and membership of the EU—quite the reverse. However, it is the Labour Opposition who choose the subject for each day of debate on the Queen’s Speech. On no day did they choose to debate foreign affairs, which indicates how little regard they have for international relations in general and Europe in particular. I suspect they did not want to let the House know of their divisions over Europe.

The Prime Minister would have liked to put an EU referendum Bill in the Queen’s Speech, but was blocked by the Deputy Prime Minister and the Liberal Democrats. However, yesterday the Conservative party published a draft EU referendum Bill. If this Bill can be debated in Parliament, I believe it can become law.

[Mr Hood]

The hon. Gentleman has just imparted some very interesting information to the House. Is he saying that the Prime Minister has told the Conservative party that he wanted a referendum Bill in this Queen’s Speech but he was stopped by the Liberals?

[Mr Bone]

That is exactly what I am saying.

The published Bill is short and to the point. The question is clear—

[Stephen Williams]

Will the hon. Gentleman give way?

[Mr Bone]

May I make a little progress, as I am about to quote the question?

The question is clear:

“Do you think that the United Kingdom should remain a member of the European Union?”

If the Bill is passed, the Prime Minister could try to negotiate a European free trade area or, in other words, a common market, without all the regulations, red tape, and cost, without the EU laws, the European Court, the European Parliament, the Commission and the bureaucracy, without the £19 billion a year it costs just to be a member of the EU, and without the £30 billion-plus trade deficit with the EU each year. However, ultimately I do not believe that these negotiations will succeed, not because of the efforts of the Prime Minister, but because of the attitude of the EU elite.

[Stephen Williams]

I thank the hon. Gentleman for giving way. I sometimes think there are three parties in the coalition: my party, the Liberal Democrats; the sensible wing of the Conservative party, whose Members serve on the Government Front Bench; and the hon. Gentleman’s wing of the Conservative party. However, my information is that the Conservative party did not ask for this referendum to be in the Queen’s Speech, so I think he ought to have a word with his colleagues.

[Mr Bone]

It is very good news that the Liberal Democrats have had a change of heart and will now allow the European referendum Bill to come forward in Government time. I appreciate that useful intervention.

In any case, once these negotiations have finished, there will, for the first time in 30 years, be a vote by the people of this country on whether we should remain in the European Union. That will happen no later than the end of 2017, but of course it may be much earlier.

Anyone who votes against the amendment in the name of my hon. Friend the Member for Basildon and Billericay (Mr Baron) is clearly opposed to a referendum on our relationship with the EU. However, if Members vote for the amendment, they are clearly supporting the prospect of an in/out referendum. If the amendment is carried, the House will, in effect, have said that the Government should bring in an EU referendum Bill. It will say to the Prime Minister that the House of Commons supports his position. It will say to the Liberal Democrats, “How dare you block the will of this House and the will of the nation?”

The Liberal Democrats went into the 2010 general election claiming that they would offer an in/out referendum on Europe. On page 67 of their extraordinary manifesto “Change that Works for You”, the Liberal Democrats said:

“The European Union has evolved significantly since the last public vote on membership over thirty years ago. Liberal Democrats therefore remain committed to an in/out referendum”.

That works for me. This change of heart is, even by Liberal Democrats standards, totally absurd.

Now I shall turn to the position of the Labour party. The Labour Opposition promised a referendum on the EU constitution before they were elected, yet as soon as they came to power, they dropped the referendum. On Europe, they are the poodles of Brussels—they roll over and do everything the EU wants, including giving away Mrs Thatcher’s hard-won rebate. They simply cannot be trusted on Europe.

The shadow Chancellor sort of indicated that Labour Members would vote against the amendment today—it was impossible to know what he thought about an EU referendum—but every Member will have to make their mind up. Members who vote against the amendment are voting against an EU referendum—[Interruption.] Colleagues from the Scottish National party will do so, and their position is clear. Labour Members who do so will also make their position clear—they are against giving the people the chance of a say on the relationship with Europe.

A vote for the amendment today would give the Prime Minister the moral authority to bring in his EU referendum Bill as a Government measure. Members of the House should vote for the amendment because it is in the national interest. It is right that after 30 years the British public should have their say on Europe. When Members cast their vote tonight, they should not decide on the basis of party politics. That is not why we are in this mother of Parliaments; we are here to represent our constituents and to put the country first. I know that some principled Opposition Members will support the amendment, and many principled Opposition Members will oppose it, because they do not support having a referendum. One thing is for sure: every Member of this House must vote according to their conscience, and when it comes to the vote, their constituents will know whether they are in favour of an EU referendum or against it.

16:19

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

The central question since the financial crash has been how to secure recovery in tough economic times. When the election took place, economic growth had been restored and unemployment was falling, but since then we have seen precious little growth, and unemployment is rising once again. Dealing with that should have been the central purpose of this Queen’s Speech and this debate.

There are measures in the Queen’s Speech—some worth while—to help small businesses to recruit new employees, which we called for, and to extend apprenticeships, which were significantly expanded during our time in government. However, one is left with the impression that although some of the measures may be worth while, as a whole they are not equal to the depth and durability of our economic problems. In fact, the Government seem to have given up and are waiting desperately for the new Governor of the Bank of England to secure the economic growth that they have so signally failed to secure.

The Queen’s Speech seems to be more about positioning and fear of the UK Independence party than about genuinely dealing with the country’s economic problems. UKIP, however, is a movement against the political establishment as a whole. It is based on a vision of the United Kingdom as it used to be, not as it is or how it will be. I have to say to Government Members that they cannot fight nostalgia with policy or positioning; the only way to answer nostalgia is to offer a better tomorrow, rather than having an argument about a better yesterday.

The Queen’s Speech has been completely overtaken by the argument about Europe. The amendment has attracted more and more signatures, and as it has done so, the Prime Minister’s professed relaxation has become greater and greater—presumably, by 7 o’clock tonight he will be completely asleep. His relaxation is not strength but weakness, and it fools no one. It is not only about the Back Benchers; while he is in the United States arguing for a European-American trade agreement, his own Cabinet Ministers are touring the studios to say that they would vote to come out of the European Union. It all feels very familiar, and it is little wonder that John Major’s former press secretary said this week that

“there are some parallels with the back end of John Major’s premiership.

One of the differences is, that was when the Conservatives had been in power for 17 or 18 years. Now the Conservatives have only been in power in coalition for two or three years.”

No wonder President Obama had to warn the Prime Minister this week that the UK’s influence is greater when we are engaged with and in the European Union. The notion that we can swap membership of the European Union for some other transatlantic embrace is confounded by that warning, which I hope is heard on the Government Benches.

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

Is it not about time that we asked the British people—that the people of the United Kingdom made the decision, rather than politicians dictating to them the future relationship with Europe?

[Mr McFadden]

We then come to the draft Bill. There was no talk of that beforehand, no suggestion of it in the Queen’s Speech. It is a panic response to the amendment, a failed attempt to buy off tonight’s rebels. This tells us so much about how the Government operate—short-term tactics, not long-term strategy. However, the tactics fail to buy off the rebels, who are simply emboldened and come back for more. Even this afternoon we have heard people saying, “2017 is not soon enough. We need the referendum now.”

The truth is that whether the Bill is a private Member’s Bill or a Government Bill in this Parliament, no Parliament can bind the next Parliament. The time to put legislation forward to have a referendum is before the Government want the referendum, not four or five years in advance. The tactics will not work in the short term; they will simply increase the Government’s pain. Instead of stopping banging on about Europe, the Tories are back to doing little else. That is because too many people on the Government Benches care more about this than about the country’s economic problems or about being in government.

The centrepiece of the Prime Minister’s strategy is renegotiation. We have been here before, too. Harold Wilson had exactly the same strategy in the 1970s—renegotiate, then hold a referendum. He put the conclusions to the House in March 1975. To those who have not read them, I recommend that they do so. They will find plenty about beef, butter and sugar, but nothing about fundamentally altered terms of membership.

When today’s Prime Minister is asked what he wants from the renegotiation, the only specific he mentions is the working time directive. The working time directive was already renegotiated in the previous Parliament. We dealt with the on-call issue and the preservation of the UK’s opt-out. The important thing about that is that it was done without threatening to leave the European Union. If that is all that the Prime Minister can come up with, no one will believe it. Of course the European Union needs reform. It needs to be more flexible and less rigid and it needs to concentrate more on growth and jobs. The Prime Minister has a far greater chance of achieving those goals if he is not threatening to leave at the same time. This is a broader argument about our vision of the UK. Is it to be engaged or is it to retreat into nostalgia? I know which I prefer.

16:22

[Ian Swales (Redcar) (LD)]

I was pleased to see that the Gracious Speech mentioned tackling tax evasion, and that the Chancellor later added tax avoidance in a G8 conference interview. He often says he is proud of a corporation tax rate that is the most competitive in the G20. Unfortunately, large companies can easily move their profits and operations outside the G20. I want to speak about the effect that this is having on the UK economy and growth.

There is widespread bafflement about how we can have an extra 1.2 million private sector jobs and so little growth. Part of the answer is tax avoidance, because many of those workers are employed by offshore companies. For example, Amazon is growing in this country at more than 20% a year. It employs thousands of people, but its sales of £4 billion do not appear in our economy. They appear in Luxembourg. Microsoft, eBay, Google and others have large businesses in the UK but their figures do not show up either, and the Google chief executive proudly talked about avoiding $2 billion in tax last year.

Now let us turn to the companies that are based here. The tax system encourages them to move manufacturing and other parts of their supply chain overseas. The Government’s change in controlled foreign company legislation makes this even more likely. Companies that do declare large profits here will find that they get a knock on the door from a well-paid tax partner of a large accountancy firm, who will put forward schemes whereby corporation tax can be avoided, the simplest of which is to export the profits to Luxembourg via interest payments. This is a route followed by well-known companies such as Vodafone and Pearson, owner of the Financial Times. In fact, it is done by most of our national newspapers, which might explain why media reporting of this issue is patchy at best.

If a profit-making company fails to succumb to the charm offensive of the tax partner, something more sinister is likely to happen. The next knock on the door could be from the vulture capitalists—representatives targeting an aggressive takeover of the company. Let us take a current example. The outstanding business success and growth of Betfair has led it recently to declare £247 million in profits. Its prospective suitors are CVC Capital. What will it bring to Betfair—better management; outstanding new internet technology? The clue is probably in the description of CVC as a London and Luxembourg-based venture capitalist. I am guessing that it will bring a shameless approach to exporting Betfair’s profits to avoid paying UK corporation tax. Boots and Thames Water are just two of the many companies that have been taken over and had their UK profits stripped out of the country and placed in tax havens.

The Government have themselves facilitated tax avoidance, not just through the tax framework but through their procurement and private finance initiative activity. The Green Book on PFI assessment still contains an assumption that 10% of total PFI payments, not profits, will come back to the Government in tax. This is risible when one examines the facts. The vast bulk of PFI deals now have an offshore element. HMRC’s own offices are owned in Bermuda, the Home Office HQ is owned in Guernsey, PFI schools in my constituency are 50% owned in Jersey, and, most bizarrely of all, junction 1A to junction 3 of the M40 is 50% owned in Guernsey. This is the story throughout the country. It is high time the Green Book was changed.

The leakage of money from our tax system and the incentives for companies to operate in certain ways are bad for the economy, bad for growth and bad for individual taxpayers. I welcome the moves that the Government have already made. Let us remember that nearly all the framework was put in place or left in place by the last Government, and they compounded the problem by sucking up to their friends in the City, stripping high-level resource out of HMRC and telling it to go easy on big companies.

I hope that the Government will consider limiting offshore interest payments and closing the loopholes in Luxembourg and Holland, via our membership of the EU. They should prosecute tax evaders and expose and, where appropriate, prosecute their advisers. They should add advisers to their team who are not from big business or big accountancy firms and can speak up for ordinary taxpayers and small business, and they should increase specialist HMRC resources. Tax evasion and avoidance is a cancer in our society and I hope that the Government will keep on acting aggressively to cut it out.

16:27

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

The debates on the Queen’s Speech are a good time to look again at the relationship between us as elected Members and those who sent us here. I always feel that the one thing that I should be doing for my constituents in Huddersfield is to try to ensure that they have a good life, and most of us know what that entails. One of the things that make me feel that the good life is achievable is that over the years we have come closer to being a high-skilled, high-paid economy. However, in recent years we have faltered, and we must look closely at the challenges that we face, globally and internationally, that might lead to us being a low-skills, low-pay economy. There is already great competition around the world from people with high skills who are low paid, and I think of India in particular. Any Queen’s Speech debate on the economy must think thoroughly about the policies that we pursue in order to obtain the good life for our constituents, with high pay in a high-skills economy.

I quite liked some measures in the Queen’s Speech, including those relating to capital allowances and the employment allowance. It is not all bad; it is just all a bit vapid. There are some big gaps; big opportunities. We have just spent about 18 months with almost nothing to debate in the House, so there is plenty of room for a vigorous programme to get this country moving and working again.

I would have loved to see more vision, leadership and courage in the Queen’s Speech. There are so many things that we could be doing. Everyone will know of my interest in skills. I think that any Queen’s Speech at this time, when nearly 1 million young people are unemployed, should have introduced a Bill to abolish unemployment before the age of 25. It would cost only between £4.5 billion and £5 billion a year, but it would have stopped politicians condemning young people to live in the shadows of society on a bit of unemployment benefit here and a bit of housing benefit there. We could have ensured that every young person in this country was in education, training or work experience of some kind. That would have broken, and can still break, the curse of intergenerational worklessness. That is what we should have had in the Queen’s Speech.

What is wrong? We can have high-falutin’ economics in this debate, but the fact is that I would be in favour of a little inflation and debt, rather than less. Keynes was in favour of that, and so am I. I am an economist, I am afraid, and my economics are from the London School of Economics. We had two good things there: we were pretty Keynesian in those days, but certainly not Marxist, and we believed in our motto, which was “To know the causes of things.” It means getting beneath a subject and understanding it in an intelligent way.

There are two things that I think plague us today. First, because people are so threatened, they are turning to UKIP, and the terror and fear on the Government Benches is apparent, as today’s debate has been taken over by a debate on Europe and fear of UKIP. The fact of the matter is that I have seen no major independent assessment of what the impact of leaving the European Union would be on the living standards of my constituents and on the well-being and good life of the people of this country.

Secondly—I will just throw this point in—I am a little worried about one thing that is in the Bill: HS2. It is expected to cost between £45 billion and £50 billion. That money, if invested in the northern and midland cities of this country, could transform the lives of cities that are now endangered. I will use the debates as the Bill goes through to make that point.

There were some good things in the Queen’s Speech, although there has been a bit of a diversion today, and it is sad to see the Conservative party in such a terrible state of distress, but the fact is that there could have been more content to get jobs, skills and homes into our country.

16:32

[Richard Drax (South Dorset) (Con)]

It is a pleasure to follow the hon. Member for Huddersfield (Mr Sheerman). I very much agree about the importance of apprenticeships, on which the Government are rightly concentrating. One radical solution would be to reduce welfare even further and use the money to encourage employers to employ youngsters so that we can train them and get them back into work, rather than giving them money to stay wherever they are doing nothing. That would be a radical solution, or part-solution, to our problems.

We have been talking about negotiating with Europe for some time, and I learnt from the Library today that we have failed to block a £6.2 billion hike in this year’s EU budget, a rise of 5.5% on the original plan. If that is a successful negotiation, I would hate to see a bad one. For the United Kingdom, that means an extra £800 million, taking our contribution this year to £14.7 billion.

Yesterday I heard Nick Robinson on Radio 4 describe the amendment tabled by my hon. Friend the Member for Basildon and Billericay (Mr Baron), and signed by me and others, as “parliamentary graffiti”, which I understand to be a meaningless scrawl that has no real impact. I must say that I am slightly tired of the way the press and other commentators just deride the genuine aim of looking at our relationship with the EU, which is desperately needed. Members on both sides of the House—this is what is so extraordinary—agree on that point. As I indicated at the start of my speech, despite the negotiations that go on, we simply do not succeed.

[Mr Bone]

My hon. Friend is making a powerful speech. Does he agree that the problem with the BBC is that it is institutionally biased towards the European Union?

[Richard Drax]

After I left the BBC I think it certainly lurched to the left.

We have seen what happens when we peddle the line of fruitcakes and loonies: the electorate, who are disaffected enough with us as it is, vote for the party accused of having fruitcakes and loonies. The votes for UKIP two weeks ago only showed what thousands and millions of voters believe. They do not believe that the amendment is graffiti; they believe that we have a major problem and that we—this is why I was sent to this House—have to deal with our relationship with the EU.

The amendment is not, and we are not, attacking the Prime Minister at all. In fact, if hon. Members listen to what the Prime Minister has said, they will hear that he agrees with the amendment. We have been sent here—all of us—to look after our country’s interests and those of our constituents. It is my view, and that of many learned Members, that a renegotiation with the EU is vital. I suspect that it will not be successful, which will lead, I hope, to a referendum and the inevitable vote of “out”.

How often have I heard—I have heard it again in today’s debate—those who are opposed to leaving the EU say that we should focus instead on the economy and jobs? But that is what the EU debate is all about—it is about the economy and jobs. The hon. Member for Huddersfield turns his eyes to the ground as if to say, “Oh dear, here’s another xenophobic Euro-nutter banging on,” but that is not what I am doing; I am speaking for our country and acknowledging what the vote for UKIP showed. We have to wake up in this place.

[Ian Swales]

Will the hon. Gentleman give way?

[Richard Drax]

I will carry on, if I may.

If we do not wake up, we will lose the respect of the people of this country. I would suggest that repatriating the competences that still go to the EU, despite the treaties that have been agreed and the promises that have been made, would do more than anything else to generate jobs in this country. This is a golden opportunity that we must take if we want to restore the trust in this House and this country that was thrown away as a result of the failed promises over Maastricht and Lisbon.

What more evidence do we need that the EU is dead? It is finished. Look around! Wake up! Greece is a disaster and Spain is potentially on the brink of civil war—53% of youths are unemployed. [Interruption.] Hon. Members say, “Oh, my God!”, but there are riots in the streets and their own police are bashing youngsters over the head. This is the Europe that we now face.

[Margot James]

rose—

[Stephen Williams]

rose—

[Richard Drax]

I will not give way, because I have only a short time left.

France is a basket case. Outside the EU, the economies of the BRIC nations—Brazil, Russia, India and China—and Asia are growing. In the past few days, President Obama has been encouraging our Prime Minister to fix the relationship with the EU. We have been trying to do that for years and years, but we have not succeeded. We joined the common market to trade with Europe and that is the relationship that we need and must have. Finally, this is not about nostalgia, as I think an Opposition Member has said, but about reality.

16:34

[Sammy Wilson (East Antrim) (DUP)]

It is a pleasure to follow the hon. Member for South Dorset (Richard Drax). The Democratic Unionist party endorses his views on the amendment, which we support. We believe it is important that the people of the United Kingdom should have a say about their relationship with Europe. Some of those who oppose the commitment to a referendum claim that it will somehow leave us with four years of uncertainty and that that will damage investment in the UK, but the genie is out of the bottle as far as renegotiation and a referendum are concerned. Any investor knows what will happen at some stage in the future, so there should be no difficulty in giving the people of the United Kingdom a say on this very important issue. I will concentrate on other issues that relate to economic growth, but I accept that our relationship with Europe impacts on economic growth in this country.

If we are to achieve the objectives in the Queen’s Speech of giving people job opportunities, rewarding hard work and reforming welfare, economic growth is important. If we are to create economic growth, we need proper stimulus. The Chancellor and the Government argue that we cannot borrow more in order to borrow less. That is not true. Good, solid investment in the economy would help us to grow and to pay our debts. That is not the view of those on the extreme left wing; it is the view of the IMF, which is hardly a left-wing organisation. In fact, many of its policies resonate with what is said by the Government. It is also the view of many industry organisations.

More importantly, the evidence of what has been happening in the economy bears out that view. The hon. Member for Wyre and Preston North (Mr Wallace) talked about what is happening in his constituency. Nearly every example that he gave was the result of stimulus through Government borrowing and spending to create infrastructure and produce jobs. I could give stacks of examples from Northern Ireland. There has been investment in our tourism industry. Not so long ago, we got a Barnett consequential as a result of the Government deciding to spend more money on housing. We put it into co-ownership housing, which has brought money down from the banks and has led to almost half of the houses being built in the private sector. Just a small amount of money from the public sector has created construction jobs and allowed people to pay their taxes, which adds to Government revenue and helps to pay off the deficit.

There is a strong case, even from traditional supporters of the Government, for borrowing and spending more money to stimulate the economy. The Chancellor made a big point today about the money markets. Actually, the money markets are quite relaxed about this. They are lending money to the United Kingdom on negative interest rates. There is more demand for Government bonds than supply. If there are sensible investment policies, the money can be made available. The question is whether there is the will or whether the Government have some other motive.

I am disappointed that there is not much detail on what the Government intend to do about banking. According to the figures published by the British Bankers Association, lending by the banks in Northern Ireland has fallen substantially since 2010. We have not dealt with the banking crisis. There is not time in this debate to talk about the detail, but unless the Government grasp the nettle and decide what to do with failing banks that are undercapitalised and unable or unwilling to lend, we will not stimulate growth. I believe that there is great potential and that a Government stimulus could release the billions of pounds of cash assets that are sitting on company balance sheets, which would enable us to get growth and achieve the objectives of—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order.

16:44

[Neil Carmichael (Stroud) (Con)]

It is a great honour to follow the hon. Member for East Antrim (Sammy Wilson).

This debate is about economic growth, and quite right too. It is good that the Governor of the Bank of England has signalled that growth is on its way and that inflation is likely to decline. That is a good combination. It is absolutely right, therefore, that we should focus on monetary activism.

Another important matter to which the Gracious Speech referred was supply-side reform. We still need to achieve elements of that, and we still have two years to do so. It is at the core of rebalancing the economy, so I want to say a word or two about supply chains. We labour under an illusion in our arguments about the trade deficit if we do not understand the complexity of supply chains and their importance across Europe and the globe. It is not just the finished product that matters but the components that make it, which provide added value. The Department for Business, Innovation and Skills is looking into that matter, because if we understand supply chains we will get a better understanding of why the European Union and the single market matter to us. That situation is made clear in my constituency, where Delphi makes the diesel injectors for the engines of 40% or so of heavy trucks manufactured and used in Europe. That is an example of component parts that go towards an end product making a big difference to the economy as a whole.

I move on to trade, and first to EU-US trade. We have to have a relationship between the United States and the European Union that makes sense and promotes trade. Right now, there are far too many tariffs, both the type that we know about and hidden tariffs. We have to end that, and the Prime Minister is absolutely right to talk about doing that. That is why President Obama was helpful to him in pointing out that we may as well fix our relationship before we decide to end it. That is a simple message that we have to consider.

Germany, Italy and usually France trade more than we do with India, China and Brazil, the economies with which we need to develop relationships. We have to pose the question whether leaving the EU would help us overtake the countries that would still be in it, and the answer is no. Instead, we should consider what we can do here to improve our exports rather than worry about having an alibi and a series of excuses. It is what we do here that actually matters. That is why it is important that UK Trade & Investment, for example, is providing the right network of support for small and medium-sized enterprises. We need to ensure that some of our SMEs are big enough to penetrate the markets that I mentioned and have the right skill sets and determination. We need to start emulating Germany’s mittelstand approach to ensure that our firms are big, robust and strategic enough to tackle export markets. If we do that in a way that signifies an intention to improve our export performance, we will succeed, but it will not be because we have abandoned our partners.

Obviously we need to renegotiate our relationship with the EU, because no form of government or system of institutions should remain unchanged and unreformed. The EU is a classic example of that. However, we have to decide what our priorities in those negotiations are and what we need to achieve. For me, it should be increased competition, both within Europe and through Europe being able to compete globally. We are in a global situation, and we cannot start arguing about some sort of family dispute. The reforms have to focus on the global scale and the need to be competitive.

One area that we need to explore is energy, because we need competition and connectivity between energy producers, especially for the benefit of consumers. I would put such topics on the agenda, but we need to reform and be positive, vigorous and confident.

16:49

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

It is a pleasure to follow the hon. Member for Stroud (Neil Carmichael). I agreed with virtually every word he said—I am sorry if that ruins his future career.

We are now in the fourth year of this Government, and during their time in office we have had flatlining economic growth, a squeeze on family incomes with a reduction of something like £2,000 per family per annum, and mounting debt, borrowing having increased by £245 billion. The growth industries are the payday loan companies or food banks, and in such a situation one might have thought we would have a Queen’s Speech that addressed those problems.

Instead, we have a Queen’s Speech that, as the Prime Minister said, contains as its flagship piece of legislation a Bill on immigration. Since then, an amendment to the speech has demonstrated that the preoccupation of a great majority of Government Back Benchers is with Europe and not issues that directly address the everyday concerns of our constituents. I looked at the Queen’s Speech and at the Prime Minister’s introductory remarks in support of it, and I could not help thinking that although some measures will be beneficial to the economy, the overall tone of its language and the way he introduced it could be profoundly prejudicial to our economic growth.

Let me start with the proposed legislation on immigration. The Prime Minister said:

“Backing aspiration means sorting out our immigration system.”—[Official Report, 8 May 2013; Vol. 563, c. 25.]

I cannot think of a more profound slur on the generation of migrants who came to my area, set up businesses, employed people and promoted economic growth in the black country. It is an insult to people such as the modern Polish worker—that demonised character—in David Manners, the Jaguar Land Rover spares company, which is a small business in my constituency. He uses his ability to speak Russian and Czech to work and find markets abroad for the seller of those parts, and last year he created £200,000 in extra contracts for his local company. The comments are also an insult to other countries and a repudiation of would-be students who want to come to the UK, study and contribute—at least for a limited time—to boost our economy.

We have an expanding world market in bright graduates worldwide. There were more than 4 million in the last academic year, which is increasing by 7% per year. They contribute £8 billion in this country alone. If we really want economic growth, one would think there would be a legislative and market strategy to reinforce the genuine affection that many of those students will have for this country, and their desire to use our first-class education system and research facilities to contribute to universities, local economies and the national economy.

In another quote—I cannot resist this one—the Prime Minister stated that

“from India to Indonesia, from Brazil to China. We must forge new trade deals that will bring new jobs and greater prosperity. We must use our commitment to open economies, open Governments and open societies to support enterprise and growth right across the world.”—[Official Report, 8 May 2013; Vol. 563, c. 22.]

That is at the same time as he introduces immigration legislation with the most inflammatory language, and while his Back Benchers are totally preoccupied with a policy in Europe that will marginalise us in that market.

I would like to go into these issues in more detail, but time prevents me from doing so. The core message, however, is that the headline issue in this Queen’s Speech, and the subsequent reaction of Conservative Back Benchers, is damaging to economic growth, which is the underlying issue that must be addressed to help the people of this country.

16:54

[Charlie Elphicke (Dover) (Con)]

It is a pleasure to follow the hon. Member for West Bromwich West (Mr Bailey) who is the true voice of the Labour party, particularly in his refreshing directness—we do not hear enough these days of the Labour party’s belief in open-door, unchecked migration to this country. My constituents in Dover and Deal raise migration on the doorstep time and again and say they are concerned.

[Mr Bailey]

Will the hon. Gentleman give way?

[Charlie Elphicke]

I will give way in a moment. My constituents know that 5 million people in this country could work but do not—

[Mr Bailey]

Will the hon. Gentleman give way?

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I am sure the hon. Gentleman will give way very shortly after he has made those comments.

[Charlie Elphicke]

I will give way to the hon. Gentleman in a moment.

My constituents feel that 5 million in this country could work but do not. They ought to have more investment and opportunity, and more chances to fulfil their potential. That is why the reforms to welfare to make work pay, the reforms to the skills agenda, the reforms to control migration, and the reforms to control, police and secure our borders are important—they give our fellow citizens more of a chance to do well and succeed in life, and to see their potential unleashed.

[Mr Bailey]

I thank the hon. Gentleman for belatedly giving way. His response to my speech—he has attempted to put words in my mouth that I did not say—demonstrates the exact problem within the Government. They are prejudicial and damaging to the carefully constructed and reasoned debate on immigration that we need in order to get a policy that suits our economy.

[Charlie Elphicke]

I thank the hon. Gentleman for his intervention. I have set out my concerns on behalf of my constituents, who raise immigration on the doorstep time and again. They simply say to me, “I want my sons and daughters to have a chance. I want to be able to get a job, do well and succeed in life.” The Conservative party is the party of aspiration and success, and the party of realising the potential that each and every one of us has. I support the Government’s reforms.

I also support the Government’s reforms on tax avoidance and evasion. Let us imagine the Labour party’s response if the Government doubled income tax and let “their chums” in big business off the hook. There would be howls of rage, and accusations that the Government are on the side of the rich and attacking the poor—accusations that they are latter-day sheriffs of Nottingham—but that is exactly what happened in 13 years of Labour government. Income tax receipts went up by 81%. The working people of this country were soaked with Labour party taxes. Meanwhile, leaving aside oil duties, corporation taxes went up by only 6%. Such is the legacy of the prawn cocktail offensive, representatives of which are in the Chamber.

The Labour Government sold the pass on fair and open competition for smaller businesses in this country in favour of large multinationals. People who work hard for a living were hit with high income taxes while large businesses were allowed to avoid taxes on an industrial scale. That is the legacy of 13 years of Labour. I am delighted that the Chancellor and the Queen’s Speech rightly take action on that.

YouGov polls show that 62% of the public consider legal tax avoidance—it is all perfectly legal, is it not?—to be unacceptable. A ComRes poll has found that 84% agree that the Government should crack down on tax avoidance by businesses operating in the UK. Indeed, 60% are prepared to call the bluff of every large corporation that threatens to disinvest from the rich, highly vibrant and successful UK market, saying that the Government should crack down on business tax avoidance even if it caused unemployment and caused some companies to leave the UK.

That is how strongly the British people feel. I feel strongly, and I was delighted to hear that my hon. Friend the Member for Redcar (Ian Swales) does, too. The Government are right to deal with the legacy of tax avoidance on an industrial scale. They are right to tackle the problem as an international problem, requiring international action. I therefore welcome the Chancellor’s use of the UK presidency of the G8 to take collective action to deal with tax avoidance and evasion.

In particular, we need to reform tax presence. The idea that Amazon is based in Luxembourg defies reality to the ordinary person. They look askance at Amazon warehouses from the motorway and just do not buy the idea that Amazon is based in Luxembourg. The rules need to be updated to cope with the globalised, competitive, internet-enabled world in which we live.

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

My hon. Friend is making a powerful speech. As well as welcoming the Government’s initiative on tax evasion and tax avoidance, will he join me in lamenting the fact that criminal convictions for tax evasion plummeted to 107 in the last year of the previous Government?

[Charlie Elphicke]

Absolutely. We need to send a clear message that everyone should pay a fair share of taxes. We have had too much unfairness for too long.

It is also important to reform the rules on transfer pricing. Starbucks has been the whipping boy for something that is done on a consistent basis by all large international businesses—accountants call it “supply chain optimisation”. Action to tackle it would be fiercely resisted, but it is something we should do. It is not right that profit parking by international tax planners means that our Exchequer does not receive its fair share.

Part of the agenda must be a positive, engaging discussion with the European Union where we say, “Look, these are the reforms we need.” I am pleased to see that the Chancellor has been getting the Germans on board and talking to the French. Indeed, he should talk to the US, because it too is losing tax revenues. Profits that should go back to the States get parked in tax havens, so Uncle Sam loses out as well. This is an international problem that needs to be dealt with internationally.

In Europe, a key reform must be to look again at the parent subsidiary directive, which a German MEP recently described as the heartland of tax avoidance, and which is too often abused. We need to ensure that the EU works positively with member states to help to secure their tax bases. The public finances of every member state in the EU are under pressure. Every member state in the EU should see it as in their interest to take effective, international co-operative action to deal with this problem that we all face. It is high time we stood up to large international businesses and said, “We have to secure our tax base.” We have to secure a fair deal for each individual who is living in this country, so that they pay a fair share of income tax while large international corporations pay a fair share of corporation tax. We must ensure that there is a level competitive playing field for home-grown businesses, just as much as there is a level competitive playing field for international businesses. That would be the right settlement and tax framework for the UK and all our European neighbours.

17:01

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

I think that some of us who have sat through this debate find it regrettable that, to a large extent, it has been hijacked by the obsessively anti-European faction in the coalition parties. It is not that Europe is not important, but the debate is about the Queen’s Speech and a reflection on the Government’s record after three years in office. Rather than intruding on the private grief of Government Members caught up in their internal and agonising debates, I would much rather say to those on the Treasury Bench that, in all seriousness, they have to face up to the fact that after a full three years in office they are responsible for the economy: they are responsible for the situation we are in, and they are responsible for getting us out of it. Unless they accept that responsibility, they will never accept the measures that are necessary to find a way out of the chronic situation in which we still find ourselves.

Three years ago, after only a few months into office and after they brought in the cuts that went too far and too fast, the Chancellor was already crowing that the plan was working and the recovery was on track. We know what the recovery was meant to achieve: central to all economic policy is growth. In the three years to date, we were meant to have achieved 6% growth, but have achieved only 1.1%. I wonder whether the Government realised that what they were committing themselves to, and which after three months they thought was working, would achieve only one-sixth of their central economic objective. Those who have doubts about whether they should change course should reflect on that. Had they realised what that would achieve, they would never have embarked on it. The only way forward is to change course. Of course, as my right hon. Friend the Member for Morley and Outwood (Ed Balls) pointed out, to do that would mean going back on so much of what they proclaimed to be absolutely essential, and that is impossible for them to do.

Time is limited for all Members, so I want to concentrate on just two aspects of economic policy where the Government’s incompetence and failure is hard to explain. The first is investment. What the Government call the national infrastructure plan has been variously described by conservative organisations as “hot air”, “complete fiction” and, by the chairman of the CBI, as “lacking all delivery”. Where does this leave investment? One cannot understand the Government’s failure, because there is no cross-party debate on investment or conflict over it. Less still is there any doctrinal argument such as we have on economic growth or financial policy—on the components, predictors or causal factors of, say, bond yields in 30 years and so on. Everybody in the House I have ever heard speak on this has said, “We must have more investment,” because traditionally the UK has not invested in R and D or fixed equipment and plant as much as we should have done or as much as our competitors have done. There is no argument about that.

[Stephen Barclay (North East Cambridgeshire) (Con)]

I am struck by the hubris of the hon. Gentleman, who is a former Paymaster General. The report on the extension of the private finance initiative by the Public Accounts Committee, which is chaired by a Labour Member, found that the previous Labour Government wasted more than £1 billion. Half, or more, of the PFI projects in the housing sector came in at double their original budget. He needs to accept his party’s record on major infrastructure projects.

[Mr Robinson]

Here we go again. I do not know of any major infrastructure project that has not run over budget. As my hon. Friend the Member for Huddersfield (Mr Sheerman) said, let us see what happens to HS2. They all run over budget. Some terrible PFI deals were done—there is no question about it—but all Government Members ever do is say what Labour did badly. We have admitted that we did many things badly. We failed on certain things, but it will not help to get the Government’s plan going to say, “Oh, look what you did when you were in office.” Nothing could be more pathetic. That is what I am trying to get through to the Government. They are now in charge, and they now have to face up to their own failures and the things that need to be done to put them right.

I come now to what those things are. I have mentioned how the Government budgeted for 6% growth, but in fact have achieved about 1% growth. It could not get much worse than that. Under their national infrastructure plan, they have about 567 projects in the pipeline, ready to go, but in three years they have achieved seven of them, or 1.2%. Everyone agrees that these projects are good ideas, so why can they not get these things done? We own one of the banks outright—I shall come to the banks in a moment—and we have a substantial stake in another, but the Government have created their own business bank. It could be investing in some of these projects, but against a background in which bank lending to businesses has fallen by £4.8 billion in the last quarter alone, they are offering £300 million through the British business bank. It is no wonder they are not getting the projects through. It is no wonder they are failing.

[Stephen Barclay]

With respect to the hon. Gentleman, who is a senior Member of the House, he is just not engaging with the facts. Public investment as a share of GDP will be higher on average over this Parliament and the next Parliament collectively than under the last Government. On housing, which was my previous example, his party’s record was absolutely shocking, whereas our build to rent fund is addressing some of these issues. Action is being taken. He is ignoring his own record as a former Treasury Minister and the action that this Government are taking. It is remarkable.

[Mr Robinson]

The Chancellor produces that tired statistic every time we mention investment. Let us take construction. The last time the level of house building was this low was in the 1920s. Overall, the level of construction has fallen 11% in the last year. This is against a background of a chronic need for the jobs and growth that investment can supply. We need a major uplift in the level of investment. It is higher, marginally, than it was 10 years ago, but so it ought to be. It is pathetic that Government Members continue not to face up to the reality of the failure of their own programme. As long as they do not, they will not succeed. Would the hon. Member for North East Cambridgeshire (Stephen Barclay) really have embarked on this plan if he had known that, instead of 6% growth, we would end up three years down the road with 1% growth? Would he? Of course not: nobody on the Government Benches would have done that, and if they had, they would have needed their brains tested—perhaps they need them tested anyway. That is the truth of it.

Then we come to the failure of Merlin and the question of the banks. Instead of making the Royal Bank of Scotland a national bank to invest in such projects, all the Government want to do is flog it off ahead of time. That will be another failure to add to the long list. This is a Government of failure who will not admit it, and therefore they will not put things right.

17:10

[Mike Thornton (Eastleigh) (LD)]

May I say that just a few months ago I could only have dreamt that I would be able to follow such a distinguished and respected Member of the House as the hon. Member for Coventry North West (Mr Robinson)?

Hon. Members will be glad to know that I will be brief—I will also talk about something other than our coalition partner’s internal difficulties over Europe. My e-mail inbox—like, I imagine, everyone else’s—is filled with demands that we spend more on the health service, education, defence and so on. However, to be able to do so in the current budgetary situation requires the economy to grow faster than spending. Otherwise, the resultant increase in debt would act like a massive anchor on a ship, bringing the SS Great Britain to a shuddering halt and leaving it vulnerable to the international winds and tides of financial misfortune.

I want to consider five fundamental issues which I think the coalition is addressing. They are: jobs, jobs, jobs, jobs and jobs. Let me deal first with jobs in our small and medium-sized businesses. We are putting in place £2,000 for each business to help them to take on new staff. They include businesses as diverse as SPI Lasers, Oswald Bailey and La Fenice in my constituency. We are looking at helping young people to get jobs. Already, 1.2 million apprenticeships have started. In Eastleigh, that has meant a 65% increase in apprenticeships since we came to power.

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

The hon. Gentleman will be aware that the unemployment figures came out today and that long-term youth unemployment is now more than double what it was when his Deputy Prime Minister introduced the Youth Contract. Does he think the Youth Contract is therefore working?

[Mike Thornton]

The Youth Contract still has a few months to go, but I think we can see that it has already been effective, and the March figures demonstrate a return to increasing employment and a reduction in unemployment. What is more, part of our work on apprenticeships is about preventing abuse of apprenticeships. We are setting out a definition of what an apprenticeship is, which will be a significant help in enabling businesses to take on more apprentices.

We have also seen an increase in jobs in manufacturing, with our continuing commitment to green energy and £5 billion of extra investment in science and high-tech. The electricity market reform alone could support as many as 250,000 jobs in that sector. Then there are jobs in the regions. I am lucky to have a very low rate of unemployment in my constituency, but a £2.6 billion investment in our regions is spurring economic growth in all our constituencies, not just mine. Finally, there are jobs through design. By making it easier for businesses to protect their designs, intellectual property rights will spur further investment in this British success story.

What do all those schemes mean? They mean more jobs, and more jobs mean a better life for millions of people, which I am sure all of us in this House would like to see. They also mean more revenue for the Government—more funds for the NHS, the disabled and our schools. What is more, the Lib Dem initiative to increase the tax allowance to £10,000—and, hopefully, onwards and upwards—means more take-home pay for every single one of those new employees. If that is what Liberal Democrats can achieve when they are in government as part of a coalition, just imagine what we could achieve with a Lib Dem majority in this place. [Laughter.] If Members want to hear, I will tell them what: a stronger economy and a fairer society, so that everyone can get on.

17:15

[Emily Thornberry (Islington South and Finsbury) (Lab)]

I should like to begin by belatedly congratulating the hon. Member for Eastleigh (Mike Thornton) on his election to the House. I also congratulate him on his constant optimism. For the sake of the record in Hansard, I must point out how very lonely he must be on the Liberal Democrat Benches. He is largely by himself over there.

So, here we are after three years of the coalition Government. The early growth that they inherited has been strangled, and the economy is flatlining. We have terrible rates of unemployment, particularly among the young, for whom long-term unemployment continues to increase. Many of those youngsters have no hope. Living standards are being squeezed, and it is more and more difficult for people to make ends meet. Business confidence is dying, and investment is declining as a result.

The country is crying out for a change and for the Government to do something. People were looking forward to a Queen’s Speech that would show that the Government were prepared to do something, but Her Majesty might as well have stayed at home. The measures in it do not address our economic crisis at all. I am not saying that there is nothing in it for us to welcome. Reform of the Independent Police Complaints Commission is long overdue. We have yet to see what it will involve, but I hope that the commission will be improved. I also hope that a proposal for a register of struck-off police officers will be included in the legislation. I even welcome some of the changes to the Dangerous Dogs Act 1991.

Apart from that, it is hard to see how this Queen’s Speech will help the country. We need a new plan to tackle the lack of jobs and growth, but it offers us nothing. Do the Government really believe that the draft deregulation Bill will get the economy going again? Do they believe that by snipping away at red tape they will encourage the private sector to rise up like the Incredible Hulk and get the economy working? I do not think that they really believe that. They cannot believe that that is going to save the economy. Surely they do not believe that they can just sit back and do nothing. In circumstances such as these, it is surely the responsibility of the Government to take a lead, but I am afraid that the Chancellor of the Exchequer gives every sign of being a man who has decided that he cannot afford the loss of face that would inevitably accompany a change of course. He cannot afford to expend so much political capital on doing something new, and we are all paying the price as a result.

[Henry Smith (Crawley) (Con)]

I take it that the hon. Lady is suggesting some sort of plan B, as offered by her party. Does she feel that the socialist model that has been pursued by President Hollande in France over the past year has led to success in that economy, given that it has now entered a triple-dip recession, compared with the growth in the UK economy?

[Emily Thornberry]

The difficulty is that, by carrying on regardless, this Government are killing the economy. I do not have time to go through my bundle of suggestions put forward by various economists, but Paul Krugman has said that the Government’s austerity plan is “fundamentally mad”. I was hoping to have time to read out more such views, but there is not time.

I would like, however, to use the few minutes that I have to give the Government some advice. They might listen—you never know! How about looking into housing? For example, £30 billion spent on infrastructure investment in housing—particularly affordable housing and social housing for rent—would represent 2% of GDP. The International Monetary Fund has said that the fiscal multiplier resulting from such investment could be between 0.9% and 1.7%, which could boost growth by 2.6% of GDP. That would be a short-term boost, but the TUC recently commissioned the National Institute of Economic and Social Research to look at the effect of such investment over the longer term. That research showed that such investment would continue, three to four years on, to have a positive effect on debt and GDP.

This is not just about the economy; it is also about fairness. We know that there is not enough housing. We know that people need jobs and training, and that our youngsters need something to do. They need hope. Investment in housing would provide all those things. This Government are building the smallest amount of housing of any Government; they have the worst peacetime record of doing that of any Government since the 1920s. Council house waiting lists continue to grow. If the Government continue at this rate, it will take until 2129 to build enough housing to meet the current need.

Of course, we know that the Government want to cut back on the benefit bill. They say it is wise to introduce a blanket cap without thinking about how some areas that have a desperate housing crisis will have much higher housing costs. My constituency provides a very good example. If a family of five is living in a three-bedroom house in the private sector in my constituency and someone is unlucky enough to become unemployed, the rent would be £400 a week. The question I wanted to ask the Chancellor earlier—unfortunately, he did not allow me to intervene—was this. If the rent is £400 a week and the cap is £500, what does such a family of five do? Does it live on £100 a week or not pay the rent instead? If the rent is not paid, does that mean the family is intentionally homeless, and if it does, does the council have to re-house the family? If the council does have to re-house them, but there is not enough social housing, where does the family go? Where would the Government suggest these people go? Perhaps they would go to Dover or to some of the marginal seats in outer London. Unfortunately, the Government have no idea of where these people should go. The tragedy of the debate so far is that there has not been enough emphasis on fairness.

17:21

[David Rutley (Macclesfield) (Con)]

The Queen’s Speech sets out a positive agenda—one that shows that Government Members are supporting hard-working people who want to get on in life and working to boost our national competitiveness to build the foundations for much needed sustainable economic growth.

The draft deregulation Bill rightly focuses on reducing the bureaucratic burden faced by all too many businesses. It is a subject on which I have campaigned long and hard during my time as a Member of Parliament. The Institute of Directors has calculated that the cost of regulation on business in this country is £110 billion a year. That is clearly too high. This Bill will make a difference by exempting from health and safety law the self-employed whose activities pose no potential risk to others. It will also give non-economic regulators a new duty—to have regard to the impact of their actions on growth. These are positive steps for businesses in Macclesfield and across the country.

Our ability to innovate has always been critical to our competitiveness. That is why it is indeed time to introduce the Intellectual Property Bill. I welcome the fact that the Federation of Small Businesses has said:

“Streamlining the patent system…will make it more cost effective for small businesses to protect their inventions.”

The Bill goes further by improving design protection, too. That is good news for this vital part of the UK economy, which accounts for more than 1% of gross domestic product.

As competitiveness improves, businesses will be better placed to create more jobs, and the national insurance contributions Bill clearly demonstrates the Government’s commitment to this vital task. The new £2,000 employment allowance will encourage in particular small businesses looking to take on more staff, and it will build on the Government’s proven track record of job creation, with over 1.2 million jobs created in the private sector since the election. I am pleased that we have the ambition to go further.

The Queen’s Speech sets out an important agenda that will improve our national competitiveness, but that ambition does not stop at the English channel—much to the disappointment of my hon. Friend the Member for Dover (Charlie Elphicke), who is no longer in his place. There is more work to be done within the EU and in wider international markets. As the UK’s competitiveness improves, we need British businesses exporting more. Britain needs to fall in love again with enterprise, entrepreneurs and exporting. Equally, businesses need to be more curious about exploiting opportunities overseas and follow the example of successful SME exporters such as J Tape in Macclesfield.

Trade associations and chambers of commerce should help raise awareness of the sources of support available to SMEs and they need to make sure that they are out there representing British businesses in vital growth markets such as Brazil and South Africa, where I suspect they are currently under-represented. British businesses should seize the day and make exports our business once again.

There have been reports in recent days of a real and growing appetite among my Conservative colleagues to address our relationship with the European Union. I can categorically confirm that those reports are true. It is increasingly clear that the public want the issue to be addressed as well. They understand that it is not just about sovereignty, but poses a clear and present danger to our real economy. I am pleased that the Conservative party, alone in the House, recognises that, and will offer an in/out referendum.

[Pete Wishart]

We have just learnt from The Spectator that the hon. Member for Mid Bedfordshire (Nadine Dorries) is talking about a UKIP-Conservative candidacy at the next general election. How many other Conservative Members are considering that, and does it constitute a new realignment of the right?

[David Rutley]

Whatever the hon. Gentleman may have read in the paper, and whatever blog may be in existence, there is no plan for any such coalition.

[Pete Wishart]

Are you sure?

[David Rutley]

Absolutely. We are categorical about that. We have a very clear plan. We are the only party in the House that is presenting proposals for an in/out referendum, and things will stay that way. On the back of that, I am confident that we can secure an outright Conservative victory.

[Angie Bray (Ealing Central and Acton) (Con)]

Does my hon. Friend agree that it is essential for us to get the message across that only under a Conservative Government will the country have an EU referendum, and that the referendum will come after we have renegotiated our terms of membership with the EU? That is vital if we are to give people a proper choice and present them with the best options. The draft Bill that was published yesterday underlines that message very clearly.

[Mr Speaker]

Order. I must gently remind the House that interventions should be brief. A large number of colleagues are still seeking to contribute to the debate, and I am keen to accommodate them, but brevity is essential if I am to do so.

[David Rutley]

What my hon. Friend has said is absolutely right. It is crystal clear that if the public want an in/out referendum, it is only the Conservative party that will offer them the choice. That is why I support the Prime Minister’s position, and welcome the publication yesterday of the draft referendum Bill. It is entirely proper for the British people to have a right to vote and to make their views heard on this vital issue.

I am keen to see a fundamental realignment in our relationship with the European Union. Although I am half-Danish, to me our involvement with the EU is about hard-nosed economic benefit, and has nothing whatever to do with some woolly sentimentalism that others may consider important. We are not alone in Europe in wanting to bring about fundamental changes in the European Union. I recently went to the Bundestag and met members of the Christian Democratic Union and the Christian Social Union. It is clear that they too have concerns about the future direction of the EU. When the public can see that youth unemployment in Spain is now at 50%, it is clear that new solutions need to be found. That is critical for the United Kingdom, and vital for other member states.

The Prime Minister’s recent speech has served as an important catalyst in taking forward the debate. Urgent negotiations should follow in the months ahead. A Member asked earlier, from a sedentary position, when those negotiations should take place; they need to start immediately. Given the promise of a referendum, other member states should not underestimate our resolve. When those negotiations have been completed, it will be absolutely right to let the people have their say.

We are entirely clear and serious in our intent. The plans have been set out, and I hope that other member states will recognise that the clock has started ticking. It is time for action. The Queen’s Speech shows that we are taking action to improve our competitiveness and create jobs at home, and we need to see the same commitment to action in the EU.

17:28

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

It is a great pleasure for me to take part in this final day of the Queen’s Speech debate, and to talk about the Government’s plan for economic growth. I have serious concerns about their proposals for the big infrastructure project HS2, which will mean that high-speed trains go through the northern part of my constituency, just south of Sheffield—through Staveley, Killamarsh and, in particular, the village of Renishaw.

My main objections are to the lack of information for, and consultation with, the people whom the project will affect; the lack of a coherent economic case beyond a vague promise to open up the regions; and the lack of any real information about that economic case, when £800 million of taxpayers’ money has already been spent on preparatory work, and preparation is currently being made, in the two Bills that are to come before Parliament, for the spending of at least a further £33 billion.

Some of the things I am most concerned about, however, are the complete lack of understanding about people’s lives and the communities in which they live, and the fact that regeneration projects were blighted on the very day the plans for the HS2 route were published. Even though nothing will happen in my part of Derbyshire for 20 years, people are already finding it almost impossible to sell their homes, and businesses are starting to suffer. The main business and employer in the village of Renishaw is a fabulous wedding venue for people all around south Yorkshire and northern Derbyshire. It is very famous and has been operating for many years. Even though it is 20 years before anything may or may not happen, people are already cancelling weddings there simply because of the uncertainty.

The Chesterfield canal project, which regenerates very poor parts of the constituency, has also been operating for decades. The HS2 tracks will go right over the canal, and any match funding raised for the development of the canal has already stopped. These are important economic regeneration projects that have been stopped in their tracks because of the publication of a train line route, which has not even been finalised yet, let alone built.

This is not a “not in my backyard” argument. The tracks will go right through families’ houses, and through villages in which people have lived for many generations. They will not benefit from HS2, as the train does not stop in Derbyshire, but the HS2 project will stop all the regeneration and economic gains we have been making since the closures in the coal and steel industry.

That is not the only thing that is of concern to me. This is feeding into a far wider political problem. We say we represent these people, but they say they are not being consulted and not being allowed to have a say. In fact, we are saying we know better than they do what is good for them, but in this case we do not. I urge the Government to consult, persuade and explain, and to listen to all these people whose lives we are proposing to destroy. Until we do so, I will oppose these plans.

[Several hon. Members]

rose—

[Mr Speaker]

Order. I was going to call a Government Back Bencher, but none appears to be seeking to catch my eye at present. I therefore call Mr Michael Connarty.

17:32

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

I am very grateful to be called to contribute to this debate, particularly since some Members have decided to put Europe, which is one of my interests, firmly on the agenda.

This debate should be framed in the context of a paper passed by the Council of Europe in the last year entitled “The young generation sacrificed”, and the follow-up papers in which I have been involved. They address educational needs and opportunities for young people, the need for technical training and skills, and the right of youth to fundamental rights and access to a better life, because that is the generation we have stolen from as a result of our errors both in this country and across the EU. We should measure our Government’s wider performance alongside how that generation is treated.

In the European context, I have spent two days in Brussels and the Netherlands with the Chair of the European Scrutiny Committee, the hon. Member for Stone (Mr Cash), and others. I was astonished at the extent to which not just the EU but the eurozone are straitjackets preventing growth. We met Olli Rehn, Commissioner for Economic and Monetary Affairs, who had a blueprint, put forward on 5 December. We also met Herman Van Rompuy—one more president of Europe—who put forward a blueprint for a deep and genuine economic and monetary union in December 2012. On 29 January 2013 José Manuel Barroso, the other current president, spoke at a European conference in support of Van Rompuy’s blueprint, saying it was the only way forward. However, what it was, in fact, was a constraining arrangement in economics—in countries’ banking systems and budgets—as the Chair of the ESC said. The arrangement would be contracted and would have penalty clauses, and it would punish Governments who are already in dire straits, and the people of their countries, for not coming up to what are, in fact, the aspirations of the northern European countries, who are making so much out of the European arrangement at present.

In fact, the statistics showed that we had a growth-free, recession-bound EU, and alongside it we have a growth-free, austerity-choked UK economy. As we have heard, even in these times, our deficit against the EU has gone up to £72 billion, which represents more than £1.25 billion every week. These countries are in a bad condition, but we are still in a worse condition. Oddly, the G7—our Prime Minister was there—reported how happy it is with the arrangements for the EU to continue to squeeze and choke these people, but that contradicts what the Chancellor said today. What he said about the ECOFIN meeting suggests that there would appear to be an argument against how the EU is performing and constraining people. I do not know who is telling the truth—was he just making his speech because of the leadership bid in the background, was he playing to the dissidents on his Back Benches, or was he genuinely saying that an attempt is being made in Europe to unlock that terrible arrangement set up in response to the eurozone crisis?

The crisis is a eurozone one. Everyone we spoke to did not talk about the countries in the south being a danger to the EU; they said that they were a danger to the euro. The euro has become the symbol of what they are doing to others to punish them, because the euro is more fundamental than the European project, and that really worries me. There is a growing meanness of spirit in what is being talked about in the EU: people are to be punished because the euro is being threatened. That is very strange, and it is certainly not what I voted for when I voted yes in the referendum to join the EU. There are serious questions to answer here, because I do not think the renegotiation being talked about by the Prime Minister has anything to do with that—it is on the fringes. His renegotiation is to do with justice and home affairs and Schengen agreements; it is not about the fundamentals of the European project, which is now an economic project driven by the euro and not by the interests of the people of Europe.

I wish to remark on some things in the Queen’s Speech, one of which is apprenticeships. We must be frank about them. Apprenticeships are now talked about by McDonald’s, which has them—in-service training for six months constitutes an apprenticeship. Tesco and Sainsbury’s say that they have apprenticeships, too, but these are not apprenticeships. The reality is that 60% of the skills shortages are in non-graduate technical skills—we are not training proper apprentices to do the jobs that need to be done.

Secondly, my constituency contains a large petrochemical industry that is losing money hand over fist; it is burdened by massive energy taxation that is not paid by the rest of the world, and even has a 5% to 10% disadvantage against the EU. What is there in the Queen’s Speech to remove those burdens from our industries to let them take people on? If those burdens are not addressed, we will not deal with the problem in the beginning, that of the youth who have been betrayed by this Government and, basically, by the European project.

17:37

[Kelvin Hopkins (Luton North) (Lab)]

First, may I say how much I enjoyed the speeches of the hon. Members for Dover (Charlie Elphicke) and for Redcar (Ian Swales), and their comments on tax evasion and tax avoidance? I have been raising those issues for more than a decade in this House, and we are now starting to take them seriously. If we collected the tax that is owed, we would go a long way towards solving any spending problem we have. The speech made by the hon. Member for East Antrim (Sammy Wilson) was also first class, and I agree with what my hon. Friend the Member for North East Derbyshire (Natascha Engel) said as well.

I want to focus on the economy. Clearly, austerity is failing, and I was among those who predicted its failure. Early in the life of this Government, I quoted Paul Krugman and his view that the Government were going in precisely the wrong direction. What Britain needs is a reflationary programme, not austerity, with a boost to public spending in specific target areas. We have 2.5 million people unemployed, so it is logical that additional spending should be directed to areas of high labour intensity: construction and the public services, which are precisely the areas that have suffered the most savage Government cuts. Construction output has fallen by 12% since 2010 and by 20% since 2008, and thousands of jobs have been cut in the public services. Jobs in construction and the public services have the added advantage of pumping additional economic demand primarily into the domestic economy, so maximising the reflationary multiplier effects to boost growth. Reducing unemployment quickly and substantially will cut the bill for benefits, raise tax revenues and bring down the Government’s spending deficit into the bargain. Moreover, the kind of jobs created by such a programme will go to those whose marginal propensity to consume is high, thus putting their newly increased income straight back into the economy as they spend their new wages. If, indeed, additional borrowing is required—it may not be required if we just collect the taxes we are owed—the kick-start should not be expensive. I do not think reflation will be a problem. Interest rates are in any case very low so the costs of borrowing are also very low.

There is, however, a serious problem with such a reflationary programme. Although construction and the public services have minimal import content, meaning that additional spending goes initially into the domestic economy, the additional spending will quickly begin to suck in imports and Britain already has a massive and growing trade deficit, largely with the rest of the EU. The figures are stunning. We had a deficit on the current account in 2012 of minus £57 billion, up from minus £20 billion the year before. The goods deficit was more than £106 billion in 2012, more than £2 billion a week. The bulk of this deficit is with the EU 27 and rose from £4.8 billion in January this year to £5.1 billion in February, on course for a deficit of more than £60 billion this year and possibly £70 billion, as was said before. This is a massive problem.

There is a goods deficit with the rest of the world too, up to £4.3 billion in February from £3.4 billion in January, so the deficit is not just with the EU, but the EU is the major problem. Britain therefore has a desperate trade problem that can be solved only by rebuilding and expanding the UK manufacturing sector. It is a shocking fact that manufacturing as a proportion of GDP in the UK is half that in Germany, and it is no surprise that we have a gigantic trade deficit specifically with Germany.

This phenomenon is not new, of course. I have with me a copy of a pamphlet published 24 years ago by the Institute for Public Policy Research called “The German Surplus”. Even then, there was a massive problem that had grown quickly over that decade. It was just such trade imbalances that Keynes knew would cause economic damage and, if they were not addressed, would ultimately cause serious economic and political tension between economies and between nations. The 1944 Bretton Woods conference decided to provide for essential devaluations by deficit countries, and Keynes proposed too that countries with large trade surpluses should be required to revalue their currencies. The latter proposal was rejected by the US, but the necessity of appropriate exchange rates was recognised. This is why the euro is such a disaster and is doomed to fail.

Mercifully, Britain avoided the euro trap and is able to flex its exchange rate. However, it is glaringly obvious that we need to depreciate our currency to become competitive again and to maintain an appropriate exchange rate so that we can rebuild our manufacturing industry. We have seen manufacturing deteriorate over several decades and we need to reverse that trend.

17:42

[Henry Smith (Crawley) (Con)]

Thank you, Mr Speaker, for unexpectedly calling me in this debate. It is a great pleasure to follow the hon. Members for Luton North (Kelvin Hopkins) and for Linlithgow and East Falkirk (Michael Connarty), both fellow members of the European Scrutiny Committee. I very much enjoy the time we spend on that Committee, the worthwhile discussions and debates and the evidence that we take from witnesses. However, on this occasion I disagree with them both about our economic growth.

Listening to some of the contributions earlier this afternoon from the Opposition Benches, including the remarks of the former Paymaster General, the hon. Member for Coventry North West (Mr Robinson), one would be forgiven for thinking that this country had not been left with the highest peacetime deficit that we have ever witnessed in our history. It is remarkable that in three relatively short years not only has that deficit been paid down by a third, but we see economic growth starting to come through. Compared with our competitors—France has gone back into negative growth and back into recession and Germany has seen economic growth of only 0.1%—the latest growth figure of 0.3% is a remarkable testament to the very difficult and invidious decisions that this Government have had to make in clearing up the crisis that was left by the Labour Administration.

Fortunately, evidence of economic growth is coming through in my constituency. Today’s unemployment statistics in Crawley showed that in April unemployment fell to 3.4%, although I appreciate, as someone who has previously been unemployed, that it is 100% of a problem for each individual who makes up that statistic. That figure represents a fall on the previous month, and a fall on this time last year. Earlier this year, I was honoured to open a new production line at Vent-Axia in my constituency, which represented jobs coming back to Crawley from China—a sign of growing confidence in the British economy. I congratulate Gatwick airport on its significant infrastructure investment of £1 billion to upgrade its terminals, making that an attractive international trade destination, which is to the benefit not only of my local economy but of the UK economy.

In the brief time I have, I want to touch on the issue of the eurozone and the future of the EU, and the significant drag that that has had on this country’s economic growth. It is an example of a political project, which essentially is what the EU is, rather than largely an economic project, which is what it should always have been. The resulting eurozone crisis means that demand in the eurozone is down and therefore demand for British goods is down. Despite that, our Government’s performance in engendering economic growth is remarkably impressive. I was pleased in the last Session to serve on the Growth and Infrastructure Bill Committee, and am pleased to see in the Queen’s Speech further measures to reduce regulation and burden on business. If we give the people of this country a choice on our future membership of the EU, we can further free ourselves to ensure that economic growth and our competitiveness as a global, free-trading nation, a bridge between our historic links in the Commonwealth and our proximity to Europe, will mean that this country has a far brighter future.

17:47

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

In the few minutes available to me, I want to confine my remarks to amendment (b). When the history books are written and we come to the chapter that describes and explains the UK’s exit from the EU, this week will go down as an important and significant week. After this week, the UK’s departure from the EU becomes almost unstoppable.

The UK, already a surly, sulky, semi-detached member of the EU, always available to offer some withering criticism to one of its few remaining allies within the EU, already halfway out of the exit door, is like some sort of staggering drunk looking for the oblivion of last orders, on its way out chanting, “We are the famous United Kingdom. No one likes us. We don’t care.” That is the reality of the UK within the EU. Its exasperated, declining number of allies in the EU do not know whether to boo, cheer or sing hasta la vista, such is the state and condition of the UK’s membership of EU.

It is clear that the UK is on its way out. It will either be out on the basis of the salami-slicing favoured by the Prime Minister—let us renegotiate a new terms of entry, which will obviously be rejected by most of its European allies—or, more likely, it will be wrenched out following the yes/no referendum plan by the Government, in a sort of in-your-face Barroso gesture from the UK electorate. What we actually have is an irresistible momentum for the UK to be taken out of the EU.

Of course, the EU was not even mentioned in the Queen’s Speech—that now appears to be an unfortunate oversight—but it is centre stage, because we are entering a new Session of Parliament, the UKIP session. It is the age of Farageism, a desperate creed characterised by an obsession with departure from the EU and with immigrants. It is an unpleasant, intolerant, neo-liberal creed with a disdain and hearty contempt for minorities. That is what will underpin this Session of Parliament, because the Government know that UKIP will win the next European election.

That is not my country and I do not want it. I want my country out of all that. My country is very different. The reason UKIP does not do well in Scotland, and the reason there is the lone panda of one Conservative Member in the Scottish Parliament, is that that agenda simply does not chime with the collectivism and the social attitudes and values of Scotland. That is why UKIP got less than 1% of the vote in the most recent Scottish parliamentary elections. I am proud that my country is so different from the one we observe south of the border. I hope that England and the rest of the United Kingdom do not go down that road, but they are entitled to have the Government they vote for, just as my nation is entitled to the Government we vote for.

There is now the real prospect of a party whose members the Prime Minister refers to as fruitcakes, loonies and closet racists having a share in the running of the United Kingdom. What will the Government do to ensure that does not happen? They have tried to name-call and disparage, but that has not really worked, given UKIP’s success in the local elections. They could try to buy UKIP off, but that would not work either. They are absolutely stuffed. My advice to the Government is that they had been doing all right and should have stuck with the hoodie-hugging and huskie-mushing new Conservatism. They simply could never out-UKIP UKIP, which is the master of European obsession and grievance. They should stick to their guns and ensure that they are different from UKIP.

It used to be said that Scottish independence would lead to Scotland being taken out of the European Union. Not many people are saying that now.

[Henry Smith]

Does the hon. Gentleman think that an independent Scotland would have to join the euro, or does he want to keep the British pound?

[Pete Wishart]

The hon. Gentleman is not on particularly steady ground when it comes to the debate on Scottish membership of the European Union. To answer his question, we will not be joining the euro but instead will follow Sweden’s example.

The Scottish people are observing two futures. In one future they remain shackled to the United Kingdom, which will become increasingly shackled to an intolerant, right-wing agenda. The hon. Member for Mid Bedfordshire (Nadine Dorries) has already said that she will have a joint UKIP-Conservative candidacy at the next election. I do not know how many more Conservative Members will adopt that stance. What we are seeing is a realignment of the right. All I have heard from the 1922 committee, which has not been very pleasant recently, with all the disagreements about Europe, is that there is a faultline running through the Government. The Scottish people have a choice: they could have that future, or they could have their own future, determined by them and based on their values.

[Kelvin Hopkins]

The hon. Gentleman is making the case that Euroscepticism is an entirely right-wing view. In fact, across Europe the majority of Euroscepticism is on the left, among socialists, trade unionists and working-class people.

[Pete Wishart]

That might be true, but that is not how it is being demonstrated politically.

What we have observed is a total realignment. There are two different countries, and one is emerging south of the border with increasing UKIP results. It is absolutely certain that UKIP will win the next European election, and Conservative Members should be very careful about all that. They are right to be wary, because it could deprive them of office. I do not know what will happen, but Scotland has a choice—thank goodness—to do something different. We can remain shackled to an increasingly right-wing United Kingdom, almost relaxed about its continuing decline, or we can decide to have a future of our own, a future determined by the Scottish people, based on our social values and the type of community we want to develop and grow. We can choose to be a consensual and helpful friend in Europe, rather than one that likes to criticise, is semi-detached, does not really enjoy being there and is on its way out. Thank goodness we have that choice.

I know the type of future that my fellow countrymen and women will choose. They will opt to ensure that their future is in their hands. They will determine the type of Scotland they want: a Scotland standing proud in a coalition of nations around the world. That is the country I want and I am absolutely certain that that is what my fellow Scots will choose next year.

17:54

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

This is a Queen’s Speech that does not begin to rise to the challenges facing our country, that lacks ambition and that is so thin in content it could have been written on the back of a fag packet, had the Prime Minister not given in and shelved plans for plain packaging of cigarettes. It was vetted by a dubious Australian spin doctor, who deleted any reference to a measure on curbing the activities of lobbyists.

This is a Queen’s Speech from a failing Government presiding over the toxic combination of a flatlining economy and the biggest housing crisis in a generation. House building is down and housing completions are at their lowest since the 1920s. Homelessness is up; it fell 70% under Labour and has risen 30% under this Government. We have a mortgage market in which young couples in particular struggle to get mortgages, and a rapidly growing private rented sector characterised by insecurity over quality and ever-soaring rents.

I see first hand in my constituency the consequences of the Government’s failure, including the lengthening queues at my surgery of couples desperate to get mortgages and couples desperate to keep a roof over their heads. A building worker in Kingstanding burst into tears when he said he was desperate to get back to work, but could not do so—80,000 building workers like him have lost their jobs under this Government.

[Mr Douglas Carswell (Clacton) (Con)]

Does the hon. Gentleman think that the answer to this problem might be even more cheap credit—perhaps a British version of Fannie Mae and Freddie Mac? What does he think we should do to sort out the lack of availability of mortgages?

[Jack Dromey]

No, I do not believe that we should take the same approach as Fannie Mae and Freddie Mac in Britain. I will come in a moment to our proposal.

Three admirable young people in Castle Vale in my constituency told me recently that they were desperate to do an apprenticeship in the construction industry, as their dads and uncles had done, but they could not get one. R&C Williams, an excellent local building company, is surviving despite the problems in the construction sector. Nevertheless, its managing director told me that the previously successful companies run by his two best friends have now gone out of business.

I also see in my constituency the working poor—people on minimum wages and whose wages are being held down and sometimes cut—who end up having to claim housing benefit as their rents go up. It is a startling statistic that 10,000 households a month now go on to housing benefit, because struggling families cannot afford to pay their rent. Such things are pushing up the benefits bill, as is rising unemployment in the west midlands. The number of people unemployed rose in the last quarter by 16,000 to 253,000, which is up by 26,000 over the past year.

That is why Labour proposes urgent action now. The building of 100,000 homes would put 80,000 building workers back to work, create apprenticeships for young people who desperately want a future, lead to wealth in the supply chain—all those who manufacture bricks, glass and cement—and add 1% to GDP. The lesson of history is that our country has never had sustainable economic recovery after events such as the depression, the war and every recession since the war other than when there has been a major programme of public and private house building, and that is why Labour’s amendment proposes action to do precisely that.

[Andrew Gwynne]

Is not the set of measures mentioned by my hon. Friend in stark contrast to the Government’s own NewBuy scheme? We were promised that 100,000 families would have access to cheap mortgages, but only 1,500 families were able to take up that initiative.

[Jack Dromey]

My hon. Friend is right. The Government have a miserable track record of promising the moon and failing to deliver. I will say more about that in a moment.

There is growing demand for urgent action to stimulate the building of affordable housing from organisations ranging from the National Housing Federation to the CBI. There is a chronic lack of confidence not only in the economy, but in the Government’s housing policies. There have been four “Get Britain Building” launches and 300 separate initiatives, and yet the sorry saga of failure continues.

We now have Help to Buy. We are in favour of helping people to realise the dream of buying their own home. However, a powerful report by the Treasury Committee described the scheme as “unconvincing” and said that it was likely to push property prices up and unlikely to produce the significant lift in the supply of new homes that is badly needed. There is also the bitter irony that Help to Buy will help millionaires, fresh from their tax cut, to buy a second home worth up to £600,000—an absurd anomaly that stands to this day. There is one law for the rich and one room for the poor because of the bedroom tax.

That leads me to my concluding remarks. The Chancellor spoke earlier about the need to get benefits down, ignoring the reality that it is soaring rents and unemployment that are pushing benefits up. He has engaged in the most disgraceful debate that divides our country between shirkers and strivers. Only yesterday, Lord Freud said in a speech that people affected by the bedroom tax should—I kid thee not—get a job or sleep on a sofa. What would he say to the severely disabled couple who came to see me who can no longer sleep in the same room, but whose son has moved out? Because they have a “spare room”, they have to pay the bedroom tax. It is an immoral tax that will cost the taxpayer more because there will be a higher housing benefit bill as people are pushed out into the private sector and disabled people will be forced to move from adapted homes to unadapted homes that will then have to be adapted by local authorities and housing associations.

Instead of doing what they should be doing, the Government are seeking to divide the nation. They are driving more and more people into the trough of despair. The essential difference between them and us is this: they divide the nation, we will build one nation.

18:02

[Margot James (Stourbridge) (Con)]

I welcome the Queen’s Speech, especially the Bills that will drive growth and help businesses in my constituency. Manufacturing companies will welcome the capital allowances and companies of a certain size and charities will welcome the national insurance rebate. Everyone, including businesses, will welcome the fairer taxes and the Government’s commitment to tackling corporate tax avoidance.

I am delighted that the UK is now one of the 10 most competitive countries in the world in which to do business, according to the World Economic Forum. We must capitalise on our improved competitiveness by exporting more to the rest of the world outside the European Union. Our recent success is demonstrated by the two-thirds increase in our exports to China, India and Brazil over the past two years.

In the debate about our membership of the European Union, some people, including Lord Lawson, have argued that we need to extricate ourselves from the European Union to capitalise on the opportunities in the rest of the world. I disagree with that. We should be capitalising on the opportunities in the rest of the world as well as, not instead of, doing the bread-and-butter business that we already do with the European Union.

I liken that situation to running a business. I ran a service company for 15 years and we were always trying to balance our efforts to generate new business with the need to look after our existing business. That is always a tension. It is the same for the country. We have 45% of our exports going to the EU, and we need to look after that business in difficult times, but at the same time we need to go after the new business. That is why, out of the top 20 markets that UKTI is prioritising for Government support for exports, only one, Poland, is in the EU. All the rest are in the rest of the world, and that is as it should be.

The EU is fundamentally about the economy, growth, improving competitiveness and jobs. Throughout Europe, we need to improve our competitiveness. As my right hon. Friend the Chancellor said earlier, Chancellor Merkel stated at the beginning of the year that Europe accounts for 7% of the world’s population and 25% of its GDP, yet 50% of its social spending. That cannot go on in the EU and Britain.

The Prime Minister’s strategy of negotiating a new settlement with the EU and a change within it, has to be about improving the competitiveness of all member states. There has already been some success over the past two years. Britain has been extricated from the EU bail-out funds, we have a better policy on fisheries, we have managed to make some progress on the EU budget—not as much as we would like, but at least we have had no real-terms increase in the multi-annual financial framework for the first time ever—and there is starting to be some movement on regulation.

Regulation is a key matter. I am talking about not just employment law but all regulation. Businesses in some areas of my constituency are considering relocating their manufacturing outside not just the UK but the EU as a whole to become more competitive, and that problem has to be tackled. However, we will not tackle it by rubbishing the Government’s strategy of reforming the EU, which is the path that many in the press want to lead us down. We should give the Prime Minister our backing, because his strategy rests on change being delivered throughout the EU—change that will benefit all member states, not just Britain. That is the basis on which our strategy of negotiating change in the EU will succeed.

18:07

[Yvonne Fovargue (Makerfield) (Lab)]

There may have been concentration today on a certain topic in the Queen’s Speech, but in Makerfield it is the economy, the cost of living and jobs that concern my constituents the most. Without confidence in the economy and job security, they will not spend, and without spending the economy will not thrive. I stress that there need to be real jobs with real opportunities. When I last checked the universal jobmatch site, 45 of the 67 sales jobs that were advertised within 10 miles of Wigan were self-employed catalogue distribution jobs, many of which demand an up-front fee.

I welcome the consumer Bill of Rights, which has been proposed to simplify and consolidate consumer law. If people are to spend, it is important that they are free from misleading and aggressive practices and have access to proper redress if they have been ripped off. They should not have to go through tortuous legal processes because of grey areas. Last year, Citizens Advice found that three quarters of consumers had had a problem that was covered by existing consumer rights, and 94% of them had complained but only 10% were successful. Improvements are needed, and I hope that the consumer rights Bill will be amended so that consumers understand their rights, are clear about what to expect and are given a time scale within which they can expect redress.

One notable omission from the consumer rights Bill, and from the Financial Services (Banking Reform) Bill, is action on lead generators and the marketing texts that people receive. Some companies, particularly in the high-cost credit sector, for example Cash Lady, do not provide the service themselves but simply gather details and pass them on to lenders. The consumer is often not aware who their lender is until they get the paperwork. They do not know whether the company from which they are buying is in a trade association or has a code of practice that they can use if there is a problem. They think they are taking out a loan with one company when they are actually taking it out with another.

The consumer Bill of Rights aims to provide transparency, which I would like to see extended to all products and services. Particularly in the high-cost credit sector, consumers do not always know the full implications of their agreement. How many, for example, would agree to a continuous payment authority if they knew that it gave the lender unlimited powers to dip into their bank account at any time and for any amount? Such a power also militates against the rigorous affordability checks required.

Another area contributes hugely to the strength of our economy but is often overlooked: the humble bus. A excellent report was launched this week by Pteg entitled “The case for the urban bus”, and it describes the contribution that buses make to the economy. Bus networks generate more than £2.5 billion in economic benefits, about £1.3 billion of which reflects user benefits from access to jobs, training, shopping and leisure opportunities. The remaining £1.2 billion of benefits accrues to other transport users and society at large through decongestion, reduced pollution, lower accident rates and productivity. The overall economic benefits are around five times higher than the amount of public funding going to the bus networks, and the bus industry has a turnover in excess of £5 billion, much of which is ploughed back into regional economies through the supply chain and consumption expenditure by staff.

Public expenditure on bus networks is therefore likely to have a large and direct impact on regional economic growth. It helps the economy by contributing to flexible labour markets and by increasing the number and range of jobs accessible to workers, in particular less-skilled workers who are likely to have less access to a car. However, the bus service operators grant has been cut, and there are fears that it might be under threat in the next spending review. Instead of salami slicing the BSOG—an easy target—I urge Treasury Ministers to read the report and recognise the contribution that the bus makes to the economy. It might be the Cinderella of the transport service, but it is used by the highest numbers of our constituents—more than any other mode of transport—and we must look at the benefits that the service accrues, instead of cutting it willy-nilly.

18:12

[Shabana Mahmood (Birmingham, Ladywood) (Lab)]

I am grateful for the opportunity—albeit time-limited and short—to contribute to the debate on the Gracious Speech. We as a country face huge challenges, and those faced by my constituents and the people of Birmingham are acute. My constituents are getting poorer and my constituency has the highest rate of unemployment in the country. Youth unemployment is at 8.4% in Ladywood, and long-term unemployment has gone up. More and more of my constituents are dependent on food banks that operate in my constituency, and my advice surgeries are inundated with people who cannot make ends meet and for whom simply keeping a roof over their heads and putting food on the table is a serious struggle. That is the reality of 21st-century Britain after three years of this Government.

Given the scale of the challenge faced by the country, and the reality of what the last three years have meant for my constituents, we needed a change of direction in the Queen’s Speech and bold action to kick-start our economy—we desperately needed a jobs Bill. We have an unemployment emergency in this country and there are simply not enough jobs to go around. Instead of acting quickly and decisively as required by such an emergency, the Government are content to trundle along at a pedestrian pace, doing a bit here and not going quite far enough there, as if they have all the time in the world—or, more likely, two years to kill before the next general election.

My constituents, however, do not have the luxury of time to waste. The Government do not realise that each day one of my constituents remains unemployed there is a clear and present danger to their chances of ever being able to find work, and the longer that goes on, the more likely it is that they will be for ever on the fringes of the labour market. As individuals, my constituents will pay a heavy price, but so will the country. A lost generation is not only a tragedy for those unfortunate enough to be among their number, but frankly it does not come cheap. My constituents were crying out for a jobs Bill—something that would have given a chance of work to young people who have been unemployed for more than a year, and a compulsory jobs guarantee for the long-term unemployed who have been out of work for more than two years. The scale of the challenge demanded that, but the Government failed to deliver.

I am also disappointed that the Government’s proposals contained no reference to using public procurement to boost apprenticeship places. Again, that is a missed opportunity to put a rocket booster under apprenticeship policy. The Government have real power in the market—they are the UK’s biggest consumer—and should use it strategically and for the good of the country. In March, the Government voted against the Opposition’s plans to use public procurement contracts worth more than £1 million to create apprenticeship places. The Government could make a difference. I do not understand why they will not accept my point and weave it into procurement policy. It is no good them praying in aid EU law, because other European countries have been able to take into account the impact of procurement decisions on the local economic environment and remain within its confines.

In the absence of an effective, speedy and decisive response to the emergency we face, we in Birmingham are still trying to make a difference. My hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart) deserves special mention for the work she has spearheaded on the Birmingham Labour party policy review of education and skills in our city. The review culminated in a process to create a Birmingham baccalaureate, which will embed in the core school curriculum both generic employability skills and sector-specific skills in areas where Birmingham hopes to grow. I hope that, with the process we have embarked on towards a Birmingham baccalaureate, we can address the skills disconnect in our city, and move to a position in which young Brummies are first in line for the jobs that are created in our great city.

In addition, the greater Birmingham and Solihull local enterprise partnership and the city council await the spending review in June to see how much money the Government will put into the single local growth fund. However, the Government’s approach to regional growth so far has created uncertainty, deterred investment, and held back regional and local economies. I agree that local areas should have the powers and resources they need to get growth going and create jobs, but devolution should not be used as a cover for even deeper cuts.

I welcome any progress we can make in Birmingham, working with the council, the LEP and other stakeholders to address our skills gap and get more Brummies into work, but we will not achieve the jobs revolution we need without the Government taking bold and decisive action. That is why a plan for jobs and full employment should have been at the heart of the Queen’s Speech. The Queen’s Speech failed to deliver it. My constituents, Birmingham and our country deserve better.

18:17

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

I am grateful for the opportunity to contribute to the last day of debate on the Gracious Speech.

I want to talk about this chaotic Government’s shambolic attempts to revive our flatlining economy. The Government are running on empty. When it comes to the questions the British people most want answered, they have nothing to say. On our flatlining economy, where is the plan for growth? On building more homes, 130,000 construction workers are out of work, but new home completions are at the lowest level since the 1920s.

What assistance is there for small businesses when 1,600 firms in my constituency are crying out for help? I agree with many of the tax evasion and avoidance concerns raised earlier by the hon. Member for Redcar (Ian Swales). When an estimated £120 billion is lost to our economy every year, how can the Government believe that it is a bright idea to slash 10,000 staff from Her Majesty’s Revenue and Customs?

On the increase in child poverty, the explosion in food banks and, worst of all, unemployment, I have felt as if I am in a parallel universe sitting in the Chamber today. I remind Government Members that more than 2.5 million people are without a job, and that 900,000 have been without a job for more than a year—the highest long-term unemployment since 1996. That is nothing short of a crisis, but for this Prime Minister, this Chancellor and this Government, it appears that unemployment is a price worth paying. They have not met the 4,100 people in my constituency who cannot find work—more than a quarter of them are young people. It is an abomination that one out of every five 16 to 24-year-olds are not in employment, education or training.

Labour would rightly offer a guaranteed job for all young people who are out of work for more than a year, paid for by a bankers’ bonus tax. Labour Members understand that spending cuts that push young people into poverty are not savings—they are a cast-iron guarantee of increased welfare spending and higher borrowing, and of an entire generation being thrown on the scrap heap.

[Nigel Adams (Selby and Ainsty) (Con)]

Will the hon. Lady give way?

[Luciana Berger]

I would love to take the hon. Gentleman’s intervention, but I am conscious that there are still hon. Members who wish to speak.

The Government should be doing everything they can to get people into work—that is what should be keeping the Government up at night. I have been looking closely at those on the Front Bench and I do not see dark circles under Ministers’ eyes. I do not want to see just any kind of work. We need sustainable, high-quality jobs where employees are respected.

The Queen’s Speech states that the Government are

“committed to building an economy where people who work hard are properly rewarded.”

That is an aim I applaud, but it is not the reality for too many of my constituents. We have seen a massive increase in precarious employment: zero-hours contracts, temporary contracts and agency workers. One million people working part time want to work full time, and there is downright exploitation. There can be no clearer example of that than the experience of my constituent Sophie Growcoot. She is 20 years old, and she and her colleagues have been ruthlessly exploited by one of the most well known companies operating in the UK.

Sophie thought that she had landed her dream job when she was hired to join a Ryanair cabin crew after an intense recruitment process. It was not until she started that she learned she would not be paid for all the hours she put in, only the time when a plane she was working on was in the air. That meant not a penny for every pre-flight briefing she attended, nothing for sales meetings, nothing for turnaround time when a plane was on the ground between flights, and nothing for the hours waiting on the tarmac during delays and flight cancellations. She was only paid for four days each week, and on the fifth day she had to be available on unpaid standby, ready to come in at a moment’s notice but not receiving any payment if not called in. Sophie was told that she had to take three months of compulsory unpaid leave each year, and was forbidden from taking another job during that time. If she wanted to leave within nine months of joining the company, she had to pay Ryanair a €200 administration fee. To add insult to injury, she had to pay a staggering £1,800 to her employer for compulsory training.

Last year, Ryanair recorded profits of just under half a billion pounds. How can its chief executive, Michael O’Leary, think it is fair or acceptable for his company to be profiting on the back of poorly treated staff like Sophie? As her situation grew worse, Sophie knew that there were no other jobs out there for her.

18:22

[Graeme Morrice (Livingston) (Lab)]

l have to say that, having listened to the Queen’s Speech last week and the Chancellor today, I am still more convinced that, sadly, the Government’s remarkably thin legislative programme is a further reminder that this is a Government out of ideas, out of touch and just watching the clock tick until the next election.

How many signs have the electorate got to send before the Government recognise what is very much evident: that they have got it horribly wrong and need to think again before it is too late? The Government’s measures do not go anywhere near far enough in tackling the desperate and growing crisis facing the country. Populist slogans and easy mantras might satisfy narrow partisan audiences, but they do not fulfil the responsibility of government.

Nowhere is the Government’s insubstantial approach more evident than on their stance on economic growth. That is a matter of great regret. This is the Government’s third Queen’s Speech since the general election and all we have had is three years of failure: low growth, falling living standards and rising borrowing. Despite even manifestly failing their own tests for economic success, the Prime Minister and his Government are ploughing on regardless with a failed economic plan.

While the Government scrabble around for a coherent agenda, I warmly endorse the overall stance of my right hon. Friend the Member for Doncaster North (Edward Miliband), who has set out what would be in our Queen’s Speech: six Bills with a relentless focus on the economy, clearly demonstrating that growth and jobs are our No. 1 priority. It is sad to see the cavernous gap between the perfectly sensible and laudable proposals outlined in the Opposition’s alternative plans, and the half-hearted and half-baked measures from the Government.

In reality, the coalition has reached the limits of what the parties can achieve together, so all we get is this minimalist approach with only 15 Bills proposed. What was left out was almost as revealing as what was left in. With just two years to go, the Government have no answers and nothing to say on tackling the crisis in youth unemployment; nothing to back small businesses struggling to get credit; nothing on living standards at a time when families’ energy and other household bills are rising out of reach; nothing on housing at a time when new home completions are at their lowest level since the 1920s; nothing to stop the undercutting of wages by tackling the exploitation of immigrant labour; and nothing on growth.

I would have liked from the Government a substantial infrastructure programme for social housing. Getting house building moving again, along with home improvements, is one of the biggest catalysts to growth. We also needed something for young people and jobs. We cannot force people into a framework that says, “Work is better for you than welfare,” if there is no work to go into. A jobs Bill would get the 17,000 Scots, for instance, who have been unemployed for more than two years back to work. I want to see cheaper energy too. People are paying too much for their gas and electricity, and living standards are being squeezed. An energy Bill could have tackled rip-off energy companies and ensured that Scotland’s 400,000 over-75s were put on the lowest tariffs.

This is an uninspired, non-responsive Government who are too dogmatic to admit that they are on the wrong track. They are burying their heads in the sand while our economy struggles and the public suffer. This absentee Prime Minister has no ambition and little drive to change the country for the better. I said at the outset that I thought the Government’s approach might appease some, but now I am not even sure about that. The British people deserve better. They want leadership and decisive action, but all we seem to have is a Prime Minster who used to “agree with Nick”, but who is now “agreeing with Nige”, and, as we have witnessed, a Tory party reverting to type with its obsession with retreating from Europe at the expense of everything else.

I appeal to Government Members to wake up and smell the coffee; to consider the evidence and listen to our constituents, including hard-pressed working families struggling to make ends meet and the most vulnerable in society; and to devote this time to getting people back to work, getting our economy growing again and bringing the change our country needs. If they will not do that, we will.

18:27

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

The country is still in the midst of the longest slump for 140 years. We need to generate 2.6% of GDP and more than 900,000 jobs to match the output and employment rates we achieved before the financial crisis struck. Four years into what should have been a recovery, we have unemployment locked at an unacceptable 2.5 million, under-employment among young people at nearly one in five, construction output falling, the IMF describing Britain’s economy as severely demand-constrained, and the OECD saying that our society is increasingly unequal. Yet what has the country seen in this debate today? It has seen an out-of-touch Chancellor, an isolated and absent Prime Minister, a decaying coalition and a weak Queen’s Speech that cannot meet the aspirations of our people. A governing coalition riven with divisions over Europe, welfare and child care cannot unite the country on jobs and growth.

The Gracious Address should have contained measures to inject demand into the economy and offer hope to our struggling construction and manufacturing sectors, but instead it simply compounds the Chancellor’s obstinate refusal to use fiscal policy to ease the pressures on ordinary households. Only this morning, the Office for National Statistics revealed that in the first quarter of this year, pay excluding bonuses rose at its lowest level since 2001, at a mere 0.8%. The OBR’s March fiscal outlook reveals that the decline in real-wage forecasts since December would cost ordinary households a further £200 this year, which is more than four times what the Government are handing back through their increase in the personal tax allowance. The squeeze on incomes is tightening its grip on millions of households, and without an easing of that burden by the Government, the day of real recovery will remain far off.

A Gracious Speech that was focused on the issues of the country, rather than on managing fractures within the coalition, would have contained a jobs Bill to help 2,000 young people in Scotland who have been out of work for more than two years to get back into work.Even with a modest fall in joblessness today, more than 11% of the working-age population in my constituency is unemployed, which is utterly unacceptable. We know from our friends and neighbours the scarring effect that long-term unemployment has on people’s health and, if they can find another job after that period of unemployment, their earnings and job satisfaction. In the UK, 18 to 24-year-olds are now 10% less likely to be in work than they were in 2008. We should be following the successful example of countries such as Sweden with a jobs guarantee—initially for people out of work for two years or longer, but eventually extended to those jobless for a year or more—that would be paid for by a tax on bank bonuses and by limiting the pension tax relief that top rate taxpayers receive to 20p in the pound.

A Queen’s Speech that was focused on the issues of the country would also have contained a financial services Bill to reform our banks, creating a default power to separate investment banking from retail banking—if needed—to stabilise the economy, and new regional-based banks to boost investment and lending to our small and medium-sized enterprises.

Families in Scotland are losing £28.63 a week on average through the cumulative effects of this Government’s welfare and wages policies. That should have been addressed in this Queen’s Speech by cutting VAT, to put an average of £450 a year back into the pockets of 67,000 voters in my constituency. There should also have been a consumer rights Bill, to help nearly 6,400 over-75s in my constituency to receive an average £200 reduction in their energy bills this year.

We need a one nation Government who will build an economy for everyone in our society, not just—as is increasingly happening—for people at the top. We need that one nation Government as much in Glasgow as in every nation and region of our United Kingdom.

[Madam Deputy Speaker (Dawn Primarolo)]

I call Andy Sawford to speak. Could I ask you to resume your seat at 6.35 pm to enable the wind-ups to start?

18:32

[Andy Sawford (Corby) (Lab/Co-op)]

I am pleased to have the opportunity to speak in this debate, albeit briefly. It is six months today since I was elected as the Member of Parliament for Corby in east Northamptonshire, which is an incredible honour. Fresh from those doorsteps, I can say that the people in my constituency told me that they wanted action on our economy and action to protect our vital local services. It is to address those areas of policy that they elected me to be their representative, and it is against those priorities that I have considered the Queen’s Speech.

Since the day I was elected six months ago, 324 more people in my constituency have been made unemployed. Sadly, the Chancellor has ignored the message that he was sent by my constituents. He continues to ignore the impact of his policies on my constituents. When this Government took office, 2,009 people were unemployed in my constituency. That was far too many people, but of course we were coming out of a global economic recession. The figure now stands at 2,852. Youth unemployment, which we know rose after the global economic recession—it was far too high and we were doing everything we could to reduce it, with programmes such as the future jobs fund—stood at 590 in my constituency when this Government took office. The figure is now 770. One more person in my constituency has become unemployed each day in the time that this Chancellor and this Prime Minister have been in office.

We have heard what keeps the people at the heart of this Government awake at night: they lie awake worrying about how to pay the school fees. Even if the coalition parties do not care about the tragedy of unemployment for the people who are out of work and their families in my constituency and in other constituencies, perhaps they could be encouraged to see the economic folly of their policies. This Government are spending £21 billion more on keeping people out of work, rather than introducing policies that help people to get back into work. I wish that instead of lying awake at night worrying about the school fees or the latest factions in the Eurosceptic right, they worried about the young unemployed people and the 2,800 people who are out of work and desperately looking for work in my constituency. I wish the Government would stop stigmatising those people and calling them shirkers, when I know how hard each and every one of them I meet and speak to on the doorsteps or in my surgeries is looking for work.

After three years, this Government have no answers. They have nothing to say. I wanted to see a jobs Bill that would put in place a compulsory jobs guarantee, a finance Bill to kick-start our economy and a consumers Bill. I also wanted to see measures to deal with the housing market. In particular, had I had more time today, I would have said more about the real potential of co-operative housing solutions. There are already important co-operative models in the rented sector, but we also need to introduce more intermediate market housing.

18:35

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

I thank my hon. Friend the Member for Corby (Andy Sawford) and my many other hon. Friends for their consistently strong arguments about the shortcomings of the Gracious Speech. It is a Queen’s Speech that lacks vision, substance and coherence. It lacks any answers to the big challenges that Britain faces. As such, it is entirely typical of this pitiful excuse for a Government. It is as though they could not be bothered to think through the legislation that is needed to get our economy moving, perhaps because their minds were elsewhere. We know where their minds were. Downing street has been caught in the headlights. It is fixated with internal party management and is frantically trying to hold it all together, when what we really need is a Prime Minister and a Chancellor who can focus relentlessly on the weaknesses in our economy and on the action needed to kick-start growth. They are so distracted, however, that they have lost sight of the things that matter most to the British people.

Youth unemployment still stands at nearly 1 million, and the Work programme is so useless that the number of young people on the dole for more than a year has tripled since it was introduced. At the spending review in 2010, the Chancellor said that there would be at least 6% economic growth by now, but we have seen barely more than 1%. As my hon. Friends have pointed out, house building is at its lowest level since the 1920s, yet the Government housing scheme offers a better subsidy for second home buyers than for building new homes. The construction sector is collapsing on this Government’s watch, but only seven projects from the list of 576 in their infrastructure plan are actually completed or operational. That is pathetic.

The Government promised to help 400,000 businesses with a national insurance holiday for new firms, but they have helped barely 5% of them. They are now having to replace that legislation. We are experiencing the slowest economic recovery for more than 100 years, and deficit reduction has ground firmly to a halt. When we hear the Government claim that they have cut the deficit by a third, we must remember that it was the same last year as it was the year before, and that it will be the same again this year. It is no wonder that they have lost the triple A credit ratings that they promised to preserve. It is a simple lesson: if the economy is flatlining, they should not be surprised if the deficit stubbornly remains high.

The Government are either too weak to admit that they have made mistakes or too distracted to see it for themselves. As a result, we are left with a legislative agenda that fails to rise to the challenges facing our country. These Ministers see consumers and businesses that lack confidence and they see weak economic demand, but their Government’s response is to pull back from the role that they should play, pull the rug from beneath the feet of those who are trying to move forward, pull away the safety net from families facing hardship and pull up the drawbridge against the entrepreneurs and investment that our country needs.

Where is the jobs Bill to ensure that all the long-term unemployed are offered a decent job opportunity on at least the minimum wage, with the private sector in partnership with the Government? We could do all that, and cover the costs, if only the Chancellor would stop being so weak towards the banks and instead make them pay their fair share. Where is the finance Bill to reverse the unfair tax cuts for the richest 1% and to help to make work pay with a 10p starting rate of income tax? Where are the measures that my hon. Friends have so eloquently called for to tackle rip-off energy bills, extortionate train fares and rogue landlords? Where is the action, the drive, the activity? Nowhere, because the Government are frozen to the spot.

It says everything about the hollowness of this Government that the Queen’s Speech debate today has been totally dominated by one subject that is not even in it. Where once we had a Conservative Prime Minister who boasted of her convictions, tonight we have a Conservative Cabinet united only by their abstention. As that Prime Minister once said, this is not leadership but “followership”. The truth is that this Queen’s Speech is not a legislative programme of a functioning Government; it is a sticking-plaster programme trying desperately to hold things together while Conservative MPs kick lumps out of the Prime Minister.

A week ago, the Prime Minister did not think that an EU referendum was important enough to put in the Queen’s Speech, but a week later we find that it is the first Bill that the Government have published. If they want a referendum, why are they not supporting the amendment; if they do not want a referendum, why have they drafted their Bill?

The draft Bill that the Government have rushed out—I do not know whether the Chief Secretary or the Chancellor had a hand in the very technical drafting of the one side of A4—had nothing to do with consulting the public; it was all about silencing the Conservative party’s internal divisions. They are not so much a coalition as a contradiction. There are three parties in this Government: the two faces of the Conservative party in league with the Liberal Democrats—perhaps best represented by the Chief Secretary to the Treasury, to whom I wish many happy returns today. Hon. Members will be interested to know that this right hon. Gentleman spent a decade of his life before entering this House making the case for a federal Europe. What a triumph it is for the Government Whips facing a difficult vote on Europe that the final speech in support of the Government’s programme should come from the former chief spokesman for the campaign to join the euro. You couldn’t make it up, Madam Deputy Speaker. The sad truth is that this Government are too weak, too divided and too distracted; they are fiddling on about Europe while the economy burns.

[Mr McFadden]

On the subject of the Government’s tactics over the rushed, panicked publication of this referendum Bill, does my hon. Friend agree that today’s debate shows that the tactic has already failed because during the debate the people who wanted this were already asking the Government to go further by having the referendum this side of the general election rather than after the next one?

[Chris Leslie]

The Prime Minister said yesterday, “No more concessions; that is the line in the sand; this is as far as they will go.” It is amazing to think, though, that he has to keep feeding the beast. The problem is that Conservative Members are carrying on a bit like the strange man in the corner of that country pub endlessly moaning about the dreadful threat of outsiders and incomers. I have to tell them that if they spend all their time trying to be like UKIP, they should not be surprised when people vote for the real thing.

We are left with a Government increasingly out of touch with the real problems facing real families across Britain. Tonight, it is those families that are paying the price: higher taxes because growth is stagnant and lower living standards because wages are falling. Every year that goes by while our economy stands still and while our Government are divided and distracted, our international competitors get further and further ahead.

The Queen’s Speech lists 15 Bills that look as though full time has been called for this Parliament, not just the end of the first half of it. The Government’s legislative agenda, supposedly to drive Britain forward, did not even make it from Downing Street to the Cabinet Office before running out of support. We should look at their child care strategy, stumbling in more directions than a toddler learning to walk. They are not going to convince the public that it is sensible to have one nursery worker looking after six two-year-olds on their own if they cannot even persuade their own Deputy Prime Minister. Surely, the Prime Minister of all people must know how difficult it is single-handedly to watch over a group of immature and disobedient trouble-makers, constantly throwing tantrums. They cannot even manage the basics.

Just at the moment when we need a strong voice for the United Kingdom arguing for the reforms and change of direction we need across the European economy, we get a Prime Minister saying one thing, an Education Secretary who is not here and a Defence Secretary who is not here saying another, while his Back Benchers are revolting and the Deputy Prime Minister is wielding his veto. Our country and our partners deserve better than that. Britain needs to be leading in Europe, not leaving Europe, and the Prime Minister should be brave enough to say it. He should stand up to those who are undermining his authority. On the very day when he was extolling the virtues of a new EU trade deal with the United States, his own Ministers implied that they would rather turn their backs on that £10 billion advantage.

The amendment has blown the last semblance of unity in the coalition to smithereens. The Prime Minister could not even tell his own troops to vote against it, so we have ended up with the absurd spectacle of Ministers being told to abstain while the Prime Minister is supposedly “chillaxed” about the rest of them supporting it. The Prime Minister should not be relaxed when those on his own side express regrets about his own Government and his own Queen’s Speech; he should be embarrassed by it. He should not “chill” at the thought; he should be chilled by it. He should have led from the start and asserted his authority, but he is too weak, and his party is too divided and distracted to be brought into line.

The fact is that this in/out, in/out, hokey-cokey referendum policy sends all the wrong signals. The Prime Minister’s party is left leaderless, and the country is left rudderless. Make no mistake, Madam Deputy Speaker: there is a real-world price to be paid for this weakness, and it will be paid in jobs, with inward investors left mystified about whether or not they would have access to a single market with 500 million customers if they came here.

When will the Conservatives realise that the top priority for this country must be the strength of our economy, not their obsession with Europe? The Prime Minister once said:

“Instead of talking about the things that most people care about… we were banging on about Europe.”

They are back to banging on, and on, and on—not about jobs, not about growth, not about recovery, but about Europe, yesterday, today and tomorrow. They are too distracted to see what needs to be done, too divided to agree on how to do it, and too weak to take the action that the country needs. Weak, divided, distracted: we see a Government who are slowly imploding under the weight of their own contradictions.

Britain, at home and in Europe, needs a Government who are strong enough to make the tough decisions for our country’s future, united in seeing those decisions through, and focused on securing growth and recovery. That is the only genuine way of improving our national finances. Britain needs that one nation Government and we need it now, but sadly, with this Queen’s Speech, with this Government and with this Prime Minister, Britain must wait.

18:47

[The Chief Secretary to the Treasury (Danny Alexander)]

This has been an interesting and, at times, informed debate. Some very good contributions were made in support of the Queen’s Speech, particularly by the hon. Member for Crawley (Henry Smith), my hon. Friends the Members for Eastleigh (Mike Thornton) and for Redcar (Ian Swales), and the hon. Members for Stourbridge (Margot James) and for Croydon South (Richard Ottaway). They were a pleasure to listen to on my 41st birthday—and I am grateful to the shadow Financial Secretary for his good wishes. Many Opposition Members spoke against the Queen’s Speech, notably the hon. Members for Glasgow North East (Mr Bain), for Huddersfield (Mr Sheerman) and for Birmingham, Erdington (Jack Dromey), who presented their arguments passionately.

The debate was opened by my right hon. Friend the Chancellor of the Exchequer—[Interruption.] Of course it was opened by the shadow Chancellor; the Chancellor opened it on behalf of the Government. How could I forget the “busted flush”?

The Chancellor of the Exchequer referred to the welcome improvements in United Kingdom growth in the first quarter of the year, noting the contrast with today’s very unwelcome first-quarter figures in France and Germany. Labour Members certainly talk a great deal less than they did a year ago about their French connection. Perhaps they are worried about the fact that “FCUK” is now thought to be an anagram of their economic policy.

A few of the shadow Chancellor’s colleagues certainly seem to think that he should move on. One senior figure recently said “Balls is a busted flush when it comes to economic credibility.” Given a cost of £28 billion in extra borrowing, the Opposition’s alternative Queen’s Speech is certainly not economically credible, and I urge the House to reject their amendment.

This Queen’s Speech was motivated by the Government’s wish to create a stronger economy in a fair society, in which everyone can get on in life—

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

rose—

[Danny Alexander]

—including the hon. Gentleman.

[Karl Turner]

I suspect the right hon. Gentleman remembers that he visited my constituency last year to see the plans for a major new facility for Siemens to manufacture offshore wind turbines. Will he advise his Back-Bench Tory colleagues whether he thinks an in/out referendum would encourage Siemens to say yes or no?

[Danny Alexander]

I certainly do remember that visit, and I commend the hon. Gentleman for his work to secure that investment, along with many members of the Government, not least my right hon. Friend the Secretary of State for Energy and Climate Change. The Prime Minister has also worked very closely with Siemens in relation to that. My answer to the question is no, I do not think an in/out referendum or campaigning for Britain to leave the EU is particularly helpful in attracting inward investment of the sort the hon. Gentleman describes.

The Queen’s Speech contained a number of measures that will help people who want to get on, because the best way of increasing employment, increasing output and increasing growth is by creating a system that helps those who want to offer work and those who want to find work. Our new national insurance allowance will reduce the costs of employment for employers, and especially for small businesses looking to hire their first member of staff or expand their work force. We estimate that the £2,000 allowance in the Bill in question will benefit 1.25 million businesses, most of them small businesses. Our new tax-free arrangements on child care will reduce the cost of employment for employees, putting money back into the pockets of hard-working families and ensuring that it makes financial sense for parents to go out and seek work. The continuation of our reforms on trainees and apprenticeships will go a long way towards addressing employers’ concerns that some young people lack the right skills, attitudes or experience when applying for work. Alongside our much-needed welfare reforms through the introduction of the universal credit, these changes demonstrate that we are creating a society where it pays to find work, and where the Government will help all who want to do so.

[Sheila Gilmore (Edinburgh East) (Lab)]

The Chief Secretary and his party leader have chosen to flex their muscles on a couple of issues, including Europe and child care ratios. Can we therefore assume that they support all the other unfair measures on which they have chosen not to flex their muscles, such as the bedroom tax and people losing contributory employment allowance after a year?

[Danny Alexander]

I have to say to the hon. Lady that I think the fact that we inherited a welfare system where for too many people it did not pay to work is one of the greatest scandals of Labour’s time in government, so I make no apology whatever for reforming the welfare system and putting in place a universal credit where everybody on benefits knows they would be better off in work. That is the right thing for the country, and I am happy to support it.

The measures in the Queen’s Speech will also help all those workers who want to get on and plan for their futures. Our changes to the single-tier pension will provide millions of people—particularly women with broken work records, the low paid and the self-employed—with a firm foundation to support their saving for retirement. The single tier will be implemented from April 2016, and I am sure Members will join me in congratulating the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb), on his excellent work in bringing this policy forward to this stage.

The Queen’s Speech recognises that if we want our economy to succeed in the 21st century, we need to make significant changes to our business environment. We will not succeed in the 21st century if our businesses are slowed down by regulation, which is why we are taking steps through the deregulation Bill to remove excessive red tape from small businesses and to repeal legislation that no longer serves a practical use.

[Geraint Davies]

Will the right hon. Gentleman give way?

[Danny Alexander]

I want to make some progress, as I have a few further things to say.

We will not succeed in the 21st century if our businesses are slowed down by an outdated infrastructure. That is why we are increasing capital investment plans by £3 billion a year from 2015-16, meaning public investment will be higher on average over this Parliament than it was under our predecessors. That investment will help to improve our digital networks and our road and rail networks. We want to connect our biggest cities in a manner fit for modern business needs, and our investment in High Speed 2 will be a crucial investment for British jobs and prosperity. The hon. Member for North East Derbyshire (Natascha Engel) spoke against HS2 partly on the basis that there had been a decline in wedding bookings at an important venue in her constituency. I hope very much the progress of the equal marriage Bill will help raise demand at that venue.

In a debate focused on jobs and growth, a lot of Members have talked about the subject of Europe, and I have to say that I do not think contemplating British exit from the EU is helpful in supporting jobs and growth in this country. So I would like to remind the House of some of the economic opportunities that we gain from our membership of the European Union. Our EU membership supports UK jobs, prosperity and growth through increased trade, both inside the single market and outside, through free trade agreements. One in 10 jobs in this country—3.5 million jobs—are linked to that trade with the European Union. If we want to win the global race, we need to be part of a strong team.

[Ian Swales]

Is the Minister aware that the number of jobs in the UK has gone up every single year since we joined the EU, except 2009, and went down in eight of the previous 20 years?

[Danny Alexander]

I was not aware of that fact, but the House will remember what happened in 2009 and who was responsible.

The single market helps the UK to attract inward investment. As part of the largest single market in the world—it has 500 million people and is worth £11 trillion —the UK hosts more headquarters of non-EU businesses than France, Germany and the Netherlands combined. UK consumers benefit from EU regulatory standards, and the collective voice of EU member states helps to advance UK interests and influence throughout the world, as the US President said only this week.

[Mr Jenkin]

What evidence is there that the United Kingdom would be unable to negotiate a free trade agreement of its own with the United States if we were not part of the European Union and that we would not be able to negotiate a free trade agreement with the European Union if we were outside it? The treaties say that the EU would have to do that.

[Danny Alexander]

I respect the sincerity of my hon. Friend’s position. He has expressed those views for very many years and has done so coherently. As a politician, I believe, however, in breaking down barriers between peoples, not erecting new barriers, and I was making this point at the Scottish Affairs Committee today on the subject of Scottish independence. So of course it would be possible to strike these agreements, but the net effect on the UK economy of such an approach would be much less advantageous than being part of the largest single market in the world. The collective voice of the EU helps to advance UK interests.

[Mr Bone]

Will my right hon. Friend clear up one point? Are the Liberal Democrats blocking the Conservative party from introducing an EU referendum Bill in Government time?

[Danny Alexander]

I cannot block any Member picking up that Bill in the private Members’ ballot and seeking to advance it. We have already used more than 100 days of Government time to pass an Act that, for the first time in this country, gives our citizens a guarantee that the next time the treaties are changed there will automatically be a referendum. That should be sufficient for anyone.

In the Queen’s Speech, the Government have also sought an international environment in which we tackle tax avoidance—a point made by my hon. Friend the Member for Redcar. We have already taken significant strides in this country, but we are working together to support the development of an international tax environment that is much tougher on tax avoidance, and the Queen’s Speech recognises that. We are making real progress. The Chancellor, through his work in ECOFIN and in the G7, the G8 and the G20, supports free trade and is tackling tax evasion by encouraging greater transparency and accountability. Our efforts in that area represent real progress in creating a fairer international tax environment.

We are also creating a fairer society on UK shores. The Queen’s Speech is packed with radical reforms, a programme that in one year will deliver more long-term changes to pensions, social care, our energy market and employment for small businesses than Labour managed in any Parliament while it was in office. The measures set out in the Queen’s Speech this year will continue this Government’s progress in rebuilding the United Kingdom economy, clearing up the mess that Labour left. Those measures will help us to build a stronger economy and a fairer society, and they will help all of those who want to get on in life. I commend them to the House.

Question put, That the amendment be made.

18:59

Division 2

Ayes: 244

---

Labour: 233
Scottish National Party: 5
Social Democratic & Labour Party: 3
Plaid Cymru: 2
Alliance: 1
Green Party: 1

Noes: 329

---

Conservative: 275
Liberal Democrat: 49
Democratic Unionist Party: 4

Amendment proposed: (b) at the end of the Question to add:

“but respectfully regret that an EU referendum bill was not included in the Gracious Speech.”—(Mr Baron.)

Question put forthwith (Standing Order No. 33), That the amendment be made.

19:16

Division 3

Ayes: 130

---

Conservative: 114
Labour: 11
Democratic Unionist Party: 4
Liberal Democrat: 1

Noes: 277

---

Labour: 222
Liberal Democrat: 46
Scottish National Party: 5
Social Democratic & Labour Party: 3
Plaid Cymru: 2
Alliance: 1

Amendment proposed: (e) at the end of the Question to add:

“but respectfully regret that a Government of Wales Bill implementing the recommendations of the Commission on Devolution in Wales was not included in the Gracious Speech”—(Mr Llwyd.)

Question put forthwith (Standing Order No. 33), That the amendment be made.

19:30

Division 4

Ayes: 237

---

Labour: 226
Democratic Unionist Party: 4
Scottish National Party: 3
Plaid Cymru: 2
Social Democratic & Labour Party: 1
Green Party: 1

Noes: 316

---

Conservative: 269
Liberal Democrat: 45
Labour: 1

Main Question put.

19:44

Division 5

Ayes: 314

---

Conservative: 264
Liberal Democrat: 49

Noes: 237

---

Labour: 224
Scottish National Party: 5
Democratic Unionist Party: 4
Plaid Cymru: 2
Social Democratic & Labour Party: 1
Green Party: 1

Resolved,,

That an humble Address be presented to Her Majesty, as follows:

Most Gracious Sovereign,

We, Your Majesty’s most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament.

Address to be presented to Her Majesty by Members of the House who are Privy Counsellors or Members of Her Majesty’s Household.

Business without Debate

Wednesday 15th May 2013 Commons Chamber

financial assistance to industry

Ordered,

That the Motion in the name of Secretary Vince Cable relating to Financial Assistance to Industry in respect of Beechbrook Capital shall be treated as if it related to an instrument subject to the provisions of Standing Order No. 118 (Delegated Legislation Committees) in respect of which notice has been given that the instrument be approved.

Dangerous Dogs and Jade Lomas Anderson

Wednesday 15th May 2013 Commons Chamber

[Relevant documents: Seventh Report from the Environment, Food and Rural Affairs Committee, Session 2012-13, on Dog Control and Welfare, HC 575, and the Government response, Session 2012-13, HC 1092.]

Motion made, and Question proposed, That this House do now adjourn.—(Greg Hands.)

19:57

[Julie Hilling (Bolton West) (Lab)]

Jade Lomas Anderson was 14 on 9 March. On 26 March, she was savaged to death by four dogs. Jade was a very popular girl. She was full of life and loved to dance. The order of service at her funeral told us that she was the world’s biggest One Direction fan—Harry was her favourite. She entered and left the church to their music. At her memorial service and at her funeral, friends, family and teachers were full of praise for her. Her head teacher said that Jade was a lively girl who always had a smile on her face. Her friends and family said that she was beautiful, kind and a very good friend. She was the life and soul at family parties and was always first on the dance floor. She always had time to help and support other people. Her Facebook status said she was “in a relationship”, and her 13-year-old boyfriend Josh said that

“she was beautiful and wouldn’t hurt a fly”.

Jade had started at her new school only the previous June. Having come from a very small school, she made a tremendous effort to fit in and work hard at her studies. The school was very pleased with her progress and gave her a glowing end-of-term report. As a special treat for doing so well, her parents gave Jade permission to stay overnight at her friend’s house. It was a treat that ended in tragedy when Jade returned to the house alone and was savaged by four dogs.

The dogs were quickly shot by a police marksman but Jade could not be saved. It is still too early to know all the details of what happened that day, and indeed we might never know all of them because Jade was alone at the time of her death. I am certainly not going to speculate in this speech about the potential findings of her inquest. It is also too early to know for sure whether the owner of the dogs can be prosecuted under 150-year-old legislation, but it quickly became apparent that she will not be prosecuted under the Dangerous Dogs Act 1991, because the dogs were not a banned breed and because the attack took place on private property. It seems absolute nonsense that one of the first acts the police had to undertake was to test the dogs to see whether their DNA contained traces of any banned breeds. We should have legislation that reflects the deed of the dog, not its breed.

The Government’s proposals to amend the law to make dog attacks on private property prosecutable and to extend the legislation to cover attacks on assistance dogs are very welcome, but they simply do not go far enough. The consultation on dangerous dogs, started by the last Labour Government, closed in June 2010. Since then, there have been calls from organisations and charities, from Labour and from the Select Committee on Environment, Food and Rural Affairs to introduce holistic legislation. Indeed, the Select Committee Chair, the hon. Member for Thirsk and Malton (Miss McIntosh), stated in February 2013:

“DEFRA should introduce comprehensive legislation to consolidate the fragmented rules relating to dog control and welfare. New rules should give enforcement officers more effective powers, including Dog Control Notices, to prevent dog-related antisocial behaviour.”

Tinkering with the Dangerous Dogs Act 1991—cited by many to be the worst piece of legislation ever produced—is simply not good enough. There are around 210,000 dog attacks each year and more than 6,000 people are admitted to hospital—often with life-changing injuries or terrible facial injuries, especially for children. On average, 12 postal workers are attacked each day. The NHS spends more than £3 million on treating the victims of dog attacks; local authorities spend £57 million on kennelling costs; and Jade Lomas Anderson was the ninth person to be killed since 2006.

[Rosie Cooper (West Lancashire) (Lab)]

In two separate incidents in West Lancashire in the past two months, a female adult and a four-year-old boy—he suffered nine scars to his face—have been attacked by dogs. One attack was in the street and the other on private property. Neither the dog warden nor the police were able to take any action over these incidents. Does my hon. Friend agree that we need tougher measures immediately to ensure that people of all ages are better protected, and that agencies must have the necessary powers to enforce that protection?

[Julie Hilling]

I absolutely agree with my hon. Friend. Since Jade’s death there have been thousands of further attacks on people, including one on a child in Bolton who had her eyelid ripped away and has terrible marks under her eye. Fortunately, the dog missed the eye altogether so her sight was saved. This is not an insignificant problem. It is an issue that affects the quality of life of millions of people and one that deserves the full attention of the Government, who should provide legislation that will really make a difference.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

My hon. Friend is making a strong and passionate speech and paying a fitting tribute to Jade Lomas. My thoughts are with her family and friends. My hon. Friend will be aware that I recently witnessed a brutal attack by a Staffordshire bull terrier in which a cat was mauled to death in front of me and a man was injured—I only narrowly escaped injury myself. The family involved have been told that it would have been better if the dog had been running free in the street, because then something could have been done about it. That highlights again the issue of attacks taking place on private property. Does my hon. Friend agree that this simply has to change?

[Julie Hilling]

Absolutely. My hon. Friend has it absolutely right. I welcome the fact that the Government are going to extend the legislation to cover private property, but that in itself is not enough, because preventive measures are necessary, too.

Dog control notices would give the authorities the power to intervene if concern has been raised about a dog. They would be able to instruct the owner to take a range of actions that could include keeping the dog muzzled, keeping it on a lead or keeping it away from children. The owner and dog could be made to undertake training. I believe, although not everyone agrees with me, that we should be able to order the owner to reduce the number of dogs in a household if the home is not suitable for the number and size of the dogs.

Dog control notices are supported by a wide range of organisations, including the Kennel Club, the Dogs Trust, the RSPCA, the Royal College of Nursing, the British Veterinary Association, The Blue Cross, Battersea Dogs and Cats Home and the Communication Workers Union. They have already been introduced in Northern Ireland and Scotland, and they should be introduced across the UK. Their existence would provide a swift, flexible and proportionate way to deal with irresponsible dog owners. They would act as an early warning system and action could be taken to promote responsible ownership, rather than just prosecuting owners after a tragedy has taken place.

I welcome the Government’s intention to extend the legislation on out-of-control dogs to cover assistance dogs, but I do not understand why they have not included all protected animals. “Protected animals” are already defined under the Animal Welfare Act 2006, and that would deal with the increasing problem of attacks on livestock as well as dealing with attacks on cats, which can often be the first sign that a dog is dangerously out of control. Why should not a responsible owner walking a dog on a lead be protected by law from an attack by a dangerous dog?

My constituent Ryan came to see me when his dog was attacked in a park. He not only had to deal with the trauma of the attack, but then had a huge vet’s bill to pay. He did not need to describe the attacking dog to the vet; the vet could tell him about the dog, because a series of people had come to him with their injured dogs. Another constituent, Beryl, came to see me after her two cats were attacked by a dog in her own garden. After much pressure, the police did take action, but it would be so much easier if there were clear legislation.

Dog charities and local authorities are reporting an increase in the number of abandoned dogs. Some are abandoned because their owners can no longer afford to look after them, others because their owners can no longer control them. Battersea Dogs and Cats Home told me that 41% of the dogs that came to its shelter last year were what it calls “bull breeds”, and 32% of those were Staffordshire bull terriers. The home has also seen an increase in the number of Akitas—Japanese fighting dogs—and Rottweilers. Like other charities, Battersea finds it difficult to re-home such dogs. Indeed, it was unable to re-home 28% of the dogs of all breeds that came to it. It was keen to stress that it does not destroy any dogs that can be re-homed, and places no time limit on the length of stay. In fact, the longest stay was by a Staffordshire bull terrier, who stayed for two years until the charity found him a new home.

We do need to take action on the indiscriminate breeding of puppies. The Blue Cross says that it would like hobby breeders who are flooding an already saturated market with puppies to be stopped. That could be done by decreasing the number of litters a year that a person is allowed before having to become a licensed breeder. Many organisations think that the number should be reduced to two a year; others, including the former chief vet for the RSPCA, believe that anyone who breeds dogs—even if by accident—should be registered. The Government are proposing the compulsory microchipping of all dogs. Why can they not require a register of breeders at the same time?

If microchipping is to be effective, there needs to be an obligation for the dog’s owner to transfer ownership officially. My local police tell me that they sometimes take a dog back to the registered address, only to be told that the owner gave it away some time ago. The old slogan “A dog is for life, not just for Christmas” needs to be brought to life by proper controls of ownership. The issues of dog welfare and community safety cannot be separated.

Replying to an intervention by me in a debate last week, the Home Secretary told me that the Government had not included dog control notices in their Bill because they believed

“that the other powers and orders we are introducing under this antisocial behaviour Bill will give sufficient power to the police to be able to deal with dangerous dogs without needing to introduce a separate—and yet another—notice.”—[Official Report, 9 May 2013; Vol. 563, c. 170.]

I have to inform her that none of the experts agree with her.

Dogs that are used as weapons may come to the attention of the police, and the owners could become subject to the new antisocial behaviour orders, but dogs like those that killed Jade would never come to attention in that way. The only complaint about those dogs appears to have been a complaint about noise. If that could have been investigated with dog control notices in place, maybe—just maybe—action could have been taken; or maybe the people who were scared to walk past the garden would have felt it worth while to lodge a complaint because something could have been done.

Jade’s was not the first case of dog attack to arise in my constituency, and if the Government do not take action, it will definitely not be the last. We need holistic legislation to deal with both dog welfare and dangerous dogs, because the two issues are inextricably linked. A well-trained, well-socialised and well-looked-after dog is far less likely to be involved in an attack. However, we also need to educate people about both care and respect for dogs. Even the most well-mannered dog may behave differently around children.

Many owners have spoken to me in the past few weeks, and have told me that they would never leave their dog unattended with children. Why can we not support the voluntary sector in its efforts to train children and adults to care for dogs and take responsibility for them? Why can we not encourage secondary schools to make that part of personal, social, health and economic education, and encourage primary schools to educate their children about care for their pets? The current proposals will not protect our children, and they will not protect our communities from the blight of dangerous dogs.

I would be the last person to suggest that if we had had legislation in place, Jade would have been saved, but one thing is sure: if we do not take comprehensive action there will be more Jades, and more people’s lives will be ruined by out-of-control dogs. Jade’s parents, Michael and Shirley Anderson, are fighting for Justice for Jade. They are determined to campaign to change the law so that no other family has to suffer in the way in which they are suffering. The Minister has the power to listen to them, to the many hon. Members who have raised the issue, and to the experts, and introduce comprehensive legislation. Will he do so?

20:10

[The Minister of State, Department for Environment, Food and Rural Affairs (Mr David Heath)]

I congratulate the hon. Member for Bolton West (Julie Hilling) on securing the debate and on speaking with genuine eloquence and passion on behalf of her constituents. I salute her for doing so. Nothing I can say or do will fill the void in the lives of the family and friends of Jade Lomas Anderson, but I do want to send my condolences to them. The tragic circumstances of her death will, I hope, not be repeated, but they ought to make every Member mindful of whether we have the right legislation in place and what we can do. Such tragic incidents serve to remind us of the importance of responsible dog ownership and the far-reaching consequences of irresponsible dog ownership, which can affect all of us, regardless of whether we own a dog. I hope that that message will strike home.

The Government continue to take the matter of dangerous dogs extremely seriously, and the hon. Lady kindly set out some of the measures we have put in place. The previous legislation was passed in haste and was inadequate in many ways. It has been seen not to be fit for purpose and we must close some of the loopholes and gaps.

On 9 May, provisions amending the Dangerous Dogs Act 1991 were introduced into the House with the First Reading of the Anti-social Behaviour, Crime and Policing Bill. That follows the announcement on 6 February of the intention to amend the 1991 Act. Our legislating in this directed way, having taken the advice of many people, makes it clear that the Government are serious about tackling the issue of dangerous dogs and irresponsible dog ownership.

The key element of the amendments addresses the issue of dog attacks on people. Sadly, such incidents are on the rise, and 15 people have died in this country as a result of dog attacks since 2005. That is totally unacceptable. To address that, and to toughen the laws in this area, we are giving the police more powers to deal with attacks that happen on private property—a specific lacuna in the law—in order to protect the thousands of children, postal workers, health visitors, social care workers and others who are attacked each year. That has been widely welcomed by key bodies such as the Association of Chief Police Officers and the Royal Mail, which recognise the danger to their employees. The message from the Government is clear: owners must be responsible for their dog at all times and in all places.

This Government recognise that there are many responsible dog owners, and we support them. It is for that reason that the clauses amending the 1991 Act contain an explicit exemption from prosecution for householders whose dog attacks a trespasser who is in, or is entering, a home, whether or not the householder is present. That reinforces the Government’s position that it is right that householders should not be at risk of prosecution for reasonable actions taken in self-defence or in defence of property.

We have also made sure that irresponsible owners have to face up to the consequences of their actions. Last year, the Sentencing Council published new guidelines for judges and magistrates on sentencing for dangerous dog offences, including increasing the recommended sentencing range for an offence of allowing a dog to be dangerously out of control and injuring someone from six to 18 months’ imprisonment. According to the Sentencing Council:

“The new guideline will mean more offenders will face jail sentences, more will get community orders and fewer will receive discharges.”

Those new guidelines came into effect in August 2012.

The change is too late for the hon. Lady’s constituents—I recognise that—but it will ensure that any future cases are treated as a criminal matter. In addition, there are existing powers available to deal with any dog that is dangerously out of control or being used to intimidate people. Those powers have been and are being used, but it is right to extend the protection to people in all places, including their homes, so that owners know they will be held accountable for the behaviour of their dogs, wherever those dogs may be. We therefore look forward to the Anti-social Behaviour, Crime and Policing Bill moving through the House and being properly debated before it receives Royal Assent.

The Government consider that owning a dog is a serious undertaking and should not be done lightly. We are working closely with the animal welfare charities to encourage people to take more responsibility for their own actions and their pets. The hon. Lady made some very sensible points about education, because a lot of dog owners simply do not recognise what they should be doing. Whether through ignorance, neglect or malice, it is simply unacceptable for dogs to be kept in circumstances in which they remain a danger to other people. That is what we need to address.

Early intervention is vital in preventing poorly trained or poorly socialised dogs escalating to serious and ultimately dangerous attacks. As well as amending the Dangerous Dogs Act 1991, the Bill introduces six flexible tools designed to be used by local enforcement agencies, including the police and local authorities, to respond effectively to individual and local situations that may or may not involve dogs.

[Stephen Doughty]

I thank the Minister his assurances, particularly on increased police powers. One of the challenges I discovered when I engaged with the police over the incident I mentioned was that the police said that even if they had they been able to go on to private property to remove the dog, they had no facility in which to house the dog afterwards. The incident happened over an Easter weekend and no pounds were available—there was no place to take the dog. What assurances can he give about the facilities available to house dogs that are causing such distress?

[Mr Heath]

The hon. Gentleman makes an important point, and it is something we have been discussing with ACPO, because it is essential that if we give powers to the police, they can exercise them properly. A range of sanctions will be available to the police to deal with dogs. Some dogs, I am afraid, will have to be destroyed straight away—that is the reality—and others will be impounded, so it is important that there are facilities available to keep those dogs safely until they can be assessed or retrieved, as appropriate.

Returning to the proposals to amend the Dangerous Dogs Act, we hope that they will provide a set of flexible and effective tools and powers to enable the police and local authorities to tackle a wide range of antisocial behaviour, including dog-related incidents. The amendments to the Act, bolstered by the new antisocial behaviour measures, will provide the framework for tackling irresponsible dog ownership, from low-level incidents to more serious dog attacks. That will help to encourage a more responsible approach. The focus should also be on ensuring proper enforcement, which can only be helped by engaging local communities, who understand local problems and can report them, combined with educating owners on responsible behaviour, as the hon. Lady said.

[Julie Hilling]

If the Bill really does as the Minister says and offers that holistic approach that could be summed up with dog control notices, why are all experts in the field saying that the Bill does not go far enough? There is still real concern about not having the ability to intervene early and the particular things that we can instruct the owner to do, including having training for both the dog and the owner. Without those, it is hard to see how this will be a holistic, preventive measure, because it is not enough. I appreciate that there will be actions to take after the event, but we have to do things to stop the problems in the first place.

[Mr Heath]

The hon. Lady is right. It is not good enough to deal with problems after the event. We need a preventive measure—an injunctive measure, which will be provided by the antisocial behaviour provisions that I am describing. She raises an important point, which I hope my colleagues in the Home Office will have the opportunity to discuss during the Bill’s passage through the House. They are confident that the measures they are introducing will have the desired effect. Obviously, the hon. Lady is not quite persuaded of that view yet. I hope we will have that debate and get the right solution.

It is unnecessary to devise new labels and new measures that replicate the existing ones, so I hope the hon. Lady she will approach the measures with an open mind and listen to what my colleagues in the Home Office have to say. If she is not persuaded, she will no doubt argue for strengthening the Bill when it comes to the House, but I hope she will be persuaded, as we believe that the flexible approach adopted in the Bill provides a suite of measures which can be used not just for dogs but for other antisocial behaviour practices which need to be addressed. That is not a subject for this debate but I refer, for instance, to the flag racing of horses, which I am very concerned about. I would like to see antisocial behaviour measures which deal effectively with that.

Let us have that discussion in the context of the Bill. I certainly hear the hon. Lady’s concerns; it would be foolish not to, and I will take them back to colleagues. Nevertheless, let us have the debate when we get to the appropriate stage of the Bill.

[Julie Hilling]

I thank the Minister for giving way again. To me, the crucial question is where intervention can start. Many of these cases would never have reached anything like antisocial behaviour. If we look at the deaths and terrible injuries that have occurred, we find that many of them would never have passed any threshold other than someone saying, “I’m a bit worried about those dogs.” That stage is crucial.

There are other issues, such as the breeding of animals and their welfare. There has long been a need for all those aspects to be wrapped up in one Bill, but it feels as though we are just dealing with little bits and we will still have to come back and do more.

[Mr Heath]

I do not entirely agree that it is necessary to have consolidated legislation in order to effect the suite of measures that the hon. Lady is looking for. There are many cases in criminal law where various provisions dealing with similar issues are contained in different legislation. Sometimes that has benefits. I agree that it makes it slightly more difficult for the lawyer or the police officer to find the necessary measure, but provided they know that there is a measure on the statute book, they can use it. This is fairly common in criminal law. There has been a great profusion of criminal justice legislation over the years, much of which deals with overlapping issues.

I do not entirely accept the hon. Lady’s criticism. In a perfect world we would have neat self-contained Bills on every subject, dealing with the entire statutory background to it. In reality, the House does not work like that. Also, there are provisions with respect to dogs and antisocial behaviour in common law as well as statute law, so even if we had a single statute, it would still not cover all the law that pertains. Nevertheless, I hear what the hon. Lady says.

To continue what I was saying, it is very important that we now work with practitioners, local authorities and animal welfare charities to produce guidance that clearly demonstrates how the new tools can be used to cover all that dog control notices do and more, and to take account of the needs of communities as well as dog welfare. One of the measures echoes the comments of the hon. Member for Cardiff South and Penarth (Stephen Doughty). Local authorities will be required to provide 24-hour accommodation, but the police should also have such a facility if they are doing their job properly. We need to talk to them about that.

A number of commentators have asked who will enforce the controls on dogs. The Government understand the pressure on both the police and local authorities at this time. The split that we see is that the police will concentrate their time on more serious criminal matters, which will involve investigating dog attacks under the Dangerous Dogs Act, and not spend time dealing with stray dogs. That makes sense. Local authorities should be taking decisions on local priorities for action and allocate their resources accordingly. Some local authorities have been very proactive and imaginative in providing local solutions and approaches to dealing with dogs. For example, it is a requirement of Wandsworth’s housing tenancy agreements that any dogs on its properties are microchipped. That means that there is a direct link between the dog and its owner, which encourages more responsible behaviour and reduces dog-related incidents.

The Dangerous Dogs Act prohibits four specific types of fighting dog, and the hon. Lady mentioned the issues relating to bull terriers—the pit bull terrier, Japanese Tosa, Dogo Argentino and Fila Brasileiro. It has been suggested that we should add to this list of prohibited dogs. However, none of the key stakeholders, such as the police or local authorities, consider it would be very effective to add more types of dog to the prohibited list. In fact some stakeholders want the list taken away completely and for us to concentrate on what the dog does, not on the breed of dog. Like the police, the Government are not in favour of introducing new categories. We take the view that both deed and breed are important.

The four types of prohibited dogs are fighting dogs—dogs specifically bred for fighting—but the Act also recognises that any dog has the potential to be dangerous if incorrectly trained and left in the wrong hands, which is why there are offences for any dog to be dangerously out of control. It is why education for the public is so vitally important, along with early intervention that will allow the correct agencies, such as animal welfare organisations or local authorities, to intervene and provide advice in order to correct behaviour that could have a detrimental effect on the safety and welfare of the dog.

In addition to the extension of criminal liability to all places, the proposed amendments to the Dangerous Dogs Act will include, for the first time, a specific offence for a dog attack on an assistance dog. I am glad that the hon. Lady welcomes that.

The Government believe that irresponsible dog ownership is best targeted through a number of actions and initiatives. The hon. Lady will know about the microchipping initiative that we also have under way. We will debate this many more times during the next few months. I hope that we will get the right results this time, unlike the last time the House legislated. I can only assure her—and through her, her constituents—that we take the issue of dangerous dogs extremely seriously. We want to get the right answers and we are bending every sinew to make sure that that is the case.

Question put and agreed to.

20:26

House adjourned.

Ministerial Correction

Wednesday 15th May 2013 Ministerial Corrections

Wednesday 15 May 2013

State Retirement Pensions

Wednesday 15th May 2013 Ministerial Corrections

[Yasmin Qureshi]

To ask the Secretary of State for Work and Pensions how many people will not get a full pension as a result of any increase in the qualifying period from 30 to 35 years.

[Official Report, 25 April 2013, Vol. 561, c. 1090W.]

Letter of correction from Steve Webb:

An error has been identified in the written answer given to the hon. Member for Bolton South East (Yasmin Qureshi) on 25 April 2013.

The full answer given was as follows:

[Steve Webb]

The single-tier pension will require 35 qualifying years of National Insurance contributions or credits for the full amount. Based on the illustrative amount of £144 for the full single-tier pension in 2012-13 terms set out in the White Paper, 30 qualifying years under the single-tier scheme would be equivalent to a value of £123.43 a week.

Under the current state pension system, people reaching State Pension age today require 30 qualifying years for the full amount of basic State Pension currently £107.00 a week and can make contributions to the State Second Pension for each year in their working life. When the single-tier pension is implemented we will recognise contributions made under the current system and translate them into a single-tier pension foundation amount.

In the long term around 85% of people will get the full single-tier pension under the proposals outlined in the White Paper published in January. Chart 4.1 shows the proportion who will receive the full single-tier pension by the year in which people reach State Pension age. In the early years of the reforms most people receiving less than the full single-tier amount will do so because they will have a deduction applied to take into account periods when they were contracted out of the additional State Pension, rather than because they have fewer than 35 qualifying years.

The correct answer should have been:

[Steve Webb]

The single-tier pension will require 35 qualifying years of National Insurance contributions or credits for the full amount. Based on the illustrative amount of £144 for the full single-tier pension in 2012-13 terms set out in the White Paper, 30 qualifying years under the single-tier scheme would be equivalent to a value of £123.43 a week.

Under the current state pension system, people reaching State Pension age today require 30 qualifying years for the full amount of basic State Pension currently £110.15 a week and can make contributions to the State Second Pension for each year in their working life. When the single-tier pension is implemented we will recognise contributions made under the current system and translate them into a single-tier pension foundation amount.

In the long term around 85% of people will get the full single-tier pension under the proposals outlined in the White Paper published in January. Chart 4.1 shows the proportion who will receive the full single-tier pension by the year in which people reach State Pension age. In the early years of the reforms most people receiving less than the full single-tier amount will do so because they will have a deduction applied to take into account periods when they were contracted out of the additional State Pension, rather than because they have fewer than 35 qualifying years.

Written Ministerial Statements

Wednesday 15th May 2013 Written Statements

Wednesday 15 May 2013

EU Informal Competitiveness Council

Wednesday 15th May 2013 Written Statements

[The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)]

I attended an Informal Competitiveness Council (internal market and industry) organised by the Irish presidency in Dublin on 2-3 May. The Informal Council focused on “Innovative pathways to jobs and growth” with a particular emphasis on the needs of SMEs.

Before Council began, there was a meeting between Ministers to discuss contracts for competitiveness and growth. In a full round table, most Ministers expressed caution about the introduction of contracts for competitiveness and growth.

The Council itself began with a plenary session introducing the theme “SMEs as a driver for European growth”. Keynote speakers included Commissioner Tajani, and a number of speakers from academia and business. There was no debate in this session itself.

The plenary then broke into separate working groups. I attended the session on access to finance, given we are a leader in Europe on this issue. In this session, Minsters agreed that the current model is close to being broken. Governments, therefore, needed to consider how to get banks lending; how far they can fill the gap in SME funding; and support/encourage alternative forms of finance such as crowd sourcing.

The consensus was that the EU should focus its attentions on completing the financial reforms that are already being discussed and looking again at structural funds and how these can be directed to supporting SMEs.

Concurrent workshops focused on “SME internationalisation” and “Cities and regions as drivers for economic growth”. There was no UK participation in these workshops, but feedback from the groups was as follows.

On cities and regions as drivers for economic growth, Ministers noted that: clusters should build on things that already exist (e.g. universities and traditional industry); member states should aim for a bottom-up approach that reflects the needs of particular regions; and clusters can help SMEs internationalise and the EU should consider cross-border clusters.

On SME internationalisation itself, Ministers emphasised that EU measures should compliment but not duplicate member state measures.

Specifically, the EU could focus on: promoting entrepreneurship training; sharing best practice; ways of making SMEs aware of support networks that are available; Erasmus programmes focusing on key trade partners; FTAs and special provisions for SMEs; better framework conditions at the EU level (e.g. single market, reducing regulation); and simplified regimes for micro-enterprises.

The Commission should continue with its missions for growth as well as focus on clusters and encouraging larger companies to work with SMEs. It should also focus on markets that SMEs want to access and where this is particularly difficult for them.

Jane Peters, (deputy director, international knowledge and innovation unit, BIS), represented the UK on the research day, 2 May.

The lunchtime discussion focused on the recommendations put forward by the high-level group on innovation policy management which had been set up during the Polish presidency. There was general support from participating delegations for the overarching recommendation of the group that more was needed to optimise the functioning of the European innovation system through improved management and coherence of the range of policy initiatives. The UK welcomed the report and in particular the reference to making sure policy makers and regulators understand how to use science correctly in the development of regulation. We did not, however, advocate a single, centralised authority with responsibility for innovation policy across the EU.

The lunch was followed by a plenary in which three keynote speakers addressed the topic of “How to optimise the benefits of research investment for European jobs, growth and society”. Breakout groups then discussed aspects of this broad theme. The UK took part in the workshop looking at “Ensuring the global competitiveness of European industry, including through the development and deployment of KETS (key enabling technologies)”. The discussion was wide ranging. The UK relayed the results of research undertaken in the UK which showed that a key driver for industry to take part in EU programmes was the development of pan-European networks. A major disincentive included the bureaucracy associated with the programmes. Other topics discussed included the importance of providing industry with a work force with the right skills.

UK Debt Management Office

Wednesday 15th May 2013 Written Statements

[The Economic Secretary to the Treasury (Sajid Javid)]

The United Kingdom Debt Management Office (DMO) has today published its business plan for the year 2013-14. Copies have been deposited in the Libraries of both Houses and are available on the DMO’s website, www.dmo.gov.uk.

House of Lords

Wednesday 15th May 2013 Lords Chamber

Wednesday, 15 May 2013.

15:00

Prayers—read by the Lord Bishop of Bath and Wells.

Housing Benefit

Wednesday 15th May 2013 Lords Chamber

Question

15:06

Asked by

[Baroness Quin]

To ask Her Majesty’s Government whether they have any plans to make changes in the under-occupancy rule for housing benefit.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)]

My Lords, we have no plans to make changes to the removal of the spare room subsidy. As well as conducting a formal evaluation of the policy over a two-year period, we have started an outreach exercise with a number of local authorities to monitor implementation and ensure that sufficient support has been provided to local authorities and claimants.

[Baroness Quin]

I thank the Minister, but the reply was disappointing. Many people feel that this is by far the worst of the welfare changes that the Government have made. There is mounting evidence not only of financial hardship but of families and individuals coming under severe emotional pressure. A particularly sad case was reported just last week in which there was a tragic outcome. It seems that the warnings of many noble Lords in our earlier debates on this subject have been borne out. I urge the Minister to reconsider this tax and, preferably, to abandon it altogether.

[Lord Freud]

My Lords, the policy as it stands is designed, first, to save money. We are looking to save £500 million a year here, which is within the context of the overall saving of £2 billion that we are trying to make over two years. The bulk of the burden has been on the private rented sector, on the LHA basis, and that has gone through reasonably safely. We are monitoring this particular change. All these changes have to be looked at very carefully and we need to keep a very close eye on this one, and we are keeping a very close eye on it. The change is designed to make sure that people can respond by trading down, pulling in lodgers or looking for work. People can make a behavioural response here, and clearly we are looking for that response.

[Lord Martin of Springburn]

My Lords, a couple were interviewed on television this morning by Eamonn Holmes. The wife had spina bifida and had to be in a special bed, which the viewers were able to see. The husband was therefore required to sleep in a second room. He stated that both of them will lose £60 per month and that they had made representations to the Minister’s department. Will the Minister look into this matter, which seems to me and many others to be very unjust indeed?

[Lord Freud]

My Lords, we are looking to protect people in difficult circumstances by looking to the local authorities to apply the discretionary housing payments, which have gone up enormously. Overall, they are running at £150 million this year, and at £360 million for the SRS. Our expectation is that these hard cases will be looked after locally.

[Lord German]

My Lords, as my noble friend the Minister has just explained, there are a large number of exemptions which are made through local authority discretion. The Government have, however, insisted on a certain number of exemptions, and one of the most welcome is the recent exemption given to a disabled child who was unable to share a bedroom. Will the Minister extend that commitment to include a disabled adult who is unable to share a bedroom, and so put this matter beyond doubt, rather than leave it to the discretion of local authorities?

[Lord Freud]

My Lords, we are looking for local authorities to deal with this matter with adults. We think that there is a difference between disabled children and disabled adults in that disabled children cannot know whether they pose a risk to themselves or to another child whereas adults and couples are able to exercise choice in how they run their lives.

[The Lord Bishop of Ripon and Leeds]

My Lords, I am told that estimates in Hull suggest that some 6,000 people there are affected by the under-occupancy rule and that there are something like 70 flats available for them to be moved to. I hear similar stories from all over the country. Will the Minister tell us just what people are supposed to do when no smaller accommodation can be offered?

[Lord Freud]

My Lords, there has been a substantial exercise by many local authorities and housing associations around the country to try to juggle people’s requirements. The figures on social-sector housing provision in England show that 31% of the housing has one bedroom, 34% has two bedrooms and the remaining 35% has three or more bedrooms. So there is provision. It is a question of getting people moved into the right accommodation. Let us not forget that 250,000 people are in overcrowded circumstances and 1.8 million people are on the waiting list for social housing.

[Lord Tomlinson]

My Lords, the Minister said very clearly that he was monitoring the situation carefully and keeping a close eye on what is happening. Will he tell us how many people have to commit suicide before he recognises that the policy is wrong?

[Lord Freud]

My Lords, clearly I am aware of the recent very sad case, and I wish to reiterate my condolences to the family. It is not appropriate for me to comment further on that because it is a matter for the relevant authorities to investigate.

[Baroness Hollis of Heigham]

My Lords, what advice would the Minister give to this chair of a housing association? We have a family consisting of a disabled couple who have two children and live in a house that has one double bedroom and two single bedrooms. They cannot move because there is no stock in rural Norfolk for them to move to. They cannot work because of their disability and caring responsibilities. They cannot afford the bills. They are applying for discretionary housing payments but that will run out by about September. At that point they will run into severe arrears. Would the Minister advise me as chair of that housing association to evict that family at that point and to send them into bed-and-breakfast accommodation at a higher cost to us all as well as to them?

[Lord Freud]

My Lords, the idea of providing discretionary housing payments is twofold. The first is to allow for the costs of making a change and a transition; and the other, in some cases, is to maintain the family in an appropriate home indefinitely. One of the most obvious examples of the latter is specially adapted homes where it does not make sense to move. So there should be a strategy of support for that couple regardless of whether it is in the short term or the longer term.

India: Aid

Wednesday 15th May 2013 Lords Chamber

Question

15:15

Asked by

[Lord Harries of Pentregarth]

To ask Her Majesty’s Government, in the light of United Kingdom aid to India being phased out in 2015, and the high proportion of that aid being targeted at the Dalit or Scheduled Caste communities, what information they have about how those aid programmes will be replaced.

[Baroness Northover]

My Lords, faster and more inclusive development, including for Dalits, remains a priority for the Government of India. India’s own development efforts have lifted 60 million people out of extreme poverty in the past five years. After 2015, we will support India’s poverty reduction efforts through technical assistance and private sector programmes.

[Lord Harries of Pentregarth]

I thank the Minister for her reply. As she knows, despite the growing wealth of the Indian middle class, poverty in India still exists on a horrendous scale. It is worse than all the African countries put together, with 500 million people living on less than $2 a day. One of the great advantages of DfID aid, as the Minister knows, is that it was focused on the poorest of the poor. Can she spell out—or, at least ask DfID to spell in more detail and set down on paper—what particular practical arrangements are being made for the continuation of these projects? On a government visit to these projects last year, of which I was a member, we saw the extraordinary and valuable work being done. Can we have something in writing about the practical arrangements to ensure that these projects will continue?

[Baroness Northover]

I thank the noble and right reverend Lord for his tribute to the work conducted by DfID in India. I am happy to write to him with a great deal of detail on what is happening. I think the noble and right reverend Lord saw the Odisha project for girls; boys are also being brought into secondary schools, initially supported by DfID. That is being taken over by the government there. DfID is in talks with both central and local government about how best to take forward the various projects in which it is involved, with the intention of carrying forward looking after the poorest and most vulnerable in India.

[Lord Bilimoria]

My Lords, to build on what the noble and right reverend Lord, Lord Harries, has just said, we own the only factory and brewery in Bihar. I work closely with the government there, and they appreciate so much the work that DfID does on the ground, helping the state to be more efficient, such as the Right to Public Service Act and the BLISS programme to help teachers learn and teach English. Will this work carry on? It is generally appreciated. This is not just aid, it is goodwill being generated. Do the Government agree?

[Baroness Northover]

I thank the noble Lord for his tribute. The British Council will continue to be supported in India, and some of the programmes the noble Lord mentioned may well fall under that. DfID will continue to be in India. It will have a hub of expertise there and is working closely with the Indian Government on the nature of that. It will be giving technical support. I remember visiting India and seeing how DfID acted as a lever for access to other funds, such as the Global Fund, and a great deal can happen in that regard.

[Lord Avebury]

My Lords—

[Lord Tugendhat]

My Lords, India has one of the most rapidly growing economies in the world—

[Baroness Kinnock of Holyhead]

My Lords—

[The Chancellor of the Duchy of Lancaster (Lord Hill of Oareford)]

My Lords, if I may suggest, my noble friend Lord Avebury was ready to go before, and then the noble Baroness, Lady Kinnock. We will have some quick questions, and some quick answers from my noble friend, and we will get them both in.

[Lord Avebury]

My Lords, further to the Question of the noble and right reverend Lord, Lord Harries, what discussions has DfID had with the Ministry of Social Justice and Empowerment in India, and with the state governments in Bihal, Madhya Pradesh and Orissa, about how they might be able to continue after 2015 with the projects that were undertaken by DfID, possibly with some transitional assistance from DfID? If it has not had these discussions, will it do so?

[Baroness Northover]

I can assure my noble friend that we are talking to partner state governments about sustaining the benefits of DfID support once UK financial aid ends. DfID projects in these states are already aligned to the large government schemes and in most cases will be taken forward by the Government of India. However, in spelling out the details I am very happy to write to both noble Lords.

[Baroness Kinnock of Holyhead]

My Lords, is it not clear that the decision to end aid to India, as well as to South Africa, neglects the reality that three-quarters of the world’s poorest people now live in middle-income countries? Thirty-nine per cent of South Africans live below the poverty line, while India is home to one-third of the world’s poorest people. Is it not time, therefore, to end the simplistic and misleading reliance on national averages, which so severely undermines efforts to eradicate poverty?

[Baroness Northover]

The noble Baroness needs to bear it in mind that it is through economic development that you lift people out of poverty and that India has lifted 60 million people out of poverty. The changes in the UK’s aid arrangements reflect India’s rapid growth and development process. We will continue to be involved with it in how this is taken forward.

[Lord Tugendhat]

Does the noble Baroness not agree that as India is one of the most rapidly growing economies in the world, with a very substantial space programme, a foreign aid programme of its own and an ambitious defence programme, the responsibility for dealing with its very considerable social problems rests with the Government of India? The purpose of British aid should be not only to help very poor people but to help very poor people in poor countries that do not have the means at their disposal which the Indian Government have. The Indian Government choose to spend money on space, foreign aid and defence, and that is their right, but it is not the responsibility of Britain to fill the gaps.

[Baroness Northover]

The two noble Lords may want to have a conversation in the margins of the Chamber. I would point out that the Government of India have been putting an increasing amount of money into education, higher education, access to finance, comprehensive village development, and so on. There is a range of areas where India is taking forward the kind of programmes that both noble Lords would wish to see.

Developing Countries: Budgetary Support

Wednesday 15th May 2013 Lords Chamber

Question

15:21

Asked by

[Lord McConnell of Glenscorrodale]

To ask Her Majesty’s Government what criteria they will employ for the allocations of direct budgetary support to developing countries in 2013-14.

[Baroness Northover]

My Lords, DfID will continue to provide budget support when it represents the best way of delivering results and value for money compared to other forms of development assistance, and when a Government are committed to the UK’s partnership principles of poverty reduction, human rights, fighting corruption and strengthening accountability to citizens.

[Lord McConnell of Glenscorrodale]

The Government suspended general budget support to Malawi in July 2011, and to Rwanda in November 2012. Malawi is a long-term ally of this country, with a new president who is changing many of the policies that were of concern to the Government back in 2011, and Rwanda has an excellent reputation on both corruption and spending this money as wisely as possible. Will the Government review both these decisions in 2013?

[Baroness Northover]

Both those decisions are kept under review. As the noble Lord will know, as regards Malawi, in November 2012 the UK provided emergency budget support, recognising what Joyce Banda had done. We will continue to monitor the situation in Malawi. As regards Rwanda, as he will know, the budget support was suspended because of actions by the Rwandan Government towards the rebel groups in the DRC. The Secretary of State will take a decision during the summer regarding any further disbursements and reprogramming decisions.

[Lord Chidgey]

Is my noble friend aware that the international development co-operation agreement, reached at the fourth high-level forum in Busan, established parliamentary capacity, accountability and transparency as key indicators for monitoring development progress? Can my noble friend confirm that these criteria for allocating budget support for HM Government will, in fact, follow the Busan international development model?

[Baroness Northover]

Parliamentarians clearly play a major role, or need to. My noble friend will know that in terms of the UK partnership principles, the third one is:

“Improving public financial management, promoting good governance and transparency and fighting corruption”.

Parliamentarians play a key role in making sure that those things are delivered.

[Lord Foulkes of Cumnock]

Is the Minister aware that not only is Haiti the poorest country in the new world but that it has suffered from earthquakes and, more recently, hurricanes? Why is there no direct bilateral assistance from the UK Government to Haiti?

[Baroness Northover]

The United Kingdom cannot assist in every part of the world, and the French have played a leading role in Haiti. The United Kingdom works out where best to focus its aid, as did the noble Lord’s Government, and we assess that through the bilateral review. However, as he will know, through our multilateral obligations and indirectly through multilateral organisations we support work in Haiti.

[The Lord Bishop of Bath and Wells]

My Lords, it is Christian Aid week and research recently published by Christian Aid shows that in India companies with links to tax havens pay on average 30% less tax, indicating that they are shifting profits to secretive, low-tax jurisdictions, many of which have come under UK rule. Alongside allocation of direct budget support, how are Her Majesty’s Government encouraging poorer countries to have a more effective tax system to ensure that money is kept in the appropriate place?

[Baroness Northover]

The right reverend Prelate is quite right. He will have noted that my right honourable friends the Prime Minister and the Foreign Secretary have focused very much on this and are emphasising it at the G8. DfID has a number of programmes assisting in the development of the tax collection regimes in countries in which we work, because we recognise that it is extremely important that those within developing countries, whether they are international companies or prospering citizens, contribute to the country’s development.

[Baroness Tonge]

My Lords, the Minister told us that the Government want value for money in international development—and rightly so. Will the Government therefore consider stopping aid to the Palestinians in the West Bank and Gaza, and persuading, if not forcing, Israel to pay for its illegal occupation of those territories?

[Baroness Northover]

My Lords, having visited the West Bank and Gaza, as has the noble Baroness, I would be extremely reluctant to do anything to stop aid to those in Palestine. I am sure that we will come on to a further discussion of the Middle East in the debate that is to follow. We continue to engage very actively in seeking to take forward a Middle East peace process, because that is the key to sorting out the problem.

[Lord Collins of Highbury]

My Lords, the Minister mentioned that the criteria for budget support included respect for human rights. Why has there been a large decrease in direct budgetary support since 2010?

[Baroness Northover]

We keep this under constant review, as did the previous Government. The noble Lord will know that the previous Government reduced budget support, particularly when it was reassessed under Hilary Benn. We continue to work out how best to support the poorest in these countries. Sometimes that is best done through supporting the wider Governments and sometimes in other ways. There is no specific policy to reduce this or increase that. We look at the situation in each country and how best to support the poorest within it.

[The Earl of Sandwich]

My Lords, Ethiopia has come in and out of direct budget support over the past decade. Will the Minister tell us which criteria, and especially which human rights criteria, are being applied to Ethiopia?

[Baroness Northover]

I refer the noble Earl to my initial Answer. There are four partnership principles that must apply, including one on human rights, when using budget support.

Emergency Services: Paramedics

Wednesday 15th May 2013 Lords Chamber

Question

15:29

Asked by

[Baroness Gardner of Parkes]

To ask Her Majesty’s Government under what circumstances unsupervised, unqualified paramedics may be sent to respond to an emergency call.

[The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)]

My Lords, ambulance trusts have a range of staff with different skill levels who are able to respond to patients depending on the severity of their illness or injury. It is the responsibility of individual ambulance trusts to determine how best to deploy those resources, ensuring that suitably qualified, skilled and experienced staff are sent to respond to calls.

[Baroness Gardner of Parkes]

Will the Minister tell me, therefore, whether he thinks that it was just an individual case or whether a general principle was at fault in the case of Sarah Mulenga, which has been widely publicised? The coroner ruled that neglect contributed to her death and found,

“a gross failure to provide basic medical attention”.

That was when two unqualified paramedics went to her call and, apparently, did not take her to hospital or even register her normal condition. How often does that sort of thing happen? Is it necessary to change the training system so that there will be more people qualified and trained?

[Earl Howe]

My Lords, the London Ambulance Service has advised that the article in the Sunday Times was slightly misleading, in that the two members of staff who attended that particular patient were student paramedics in their third and final year of training and so were sufficiently qualified to work unsupervised. It is inaccurate to call them “unqualified”. The issue in this case was that, despite their qualifications and experience, the crew did not act in accordance with their training or the procedures that were laid down. That has been acknowledged by the London Ambulance Service, which has said that it believes that the failings are not reflective of the hundreds of ambulance staff who provide a high level of patient care to Londoners every day.

[Lord Harris of Haringey]

My Lords, the Minister has suggested that, on the issue raised by the noble Baroness, Lady Gardner of Parkes, it is really down to the management of ambulance trusts to make all those decisions. There is widespread concern around the country about the delays in ambulances reaching emergency cases. For example, I am told that the police now find that they are the first responders and end up having to take people to hospital. Is this a problem with the management of ambulance trusts or is it about the level of resources being made available by commissioners for emergency services and ambulance services?

[Earl Howe]

The noble Lord is quite right that certain areas of the country have seen unacceptable delays in ambulance response times—I am aware of two trusts in that regard. However, this is not an issue around a lack of trained paramedics. Projections by the Centre for Workforce Intelligence show that there is a secure supply of paramedics until 2016. The College of Paramedics has stated that training posts on courses are always filled and, currently, 900 ambulance technicians are training to become paramedics. We are seeing an increase in paramedic numbers, which is encouraging.

[Baroness Masham of Ilton]

My Lords, does the noble Earl agree that first aid ought to be taught in all schools mandatorily, so that as many people as possible in the community can learn first aid, help when there is an emergency and save lives?

[Earl Howe]

I agree with the general thesis that the noble Baroness has advanced. As many people as possible should know first aid. That is how we will ensure that we can save more lives, particularly among those who suffer heart attacks in public places.

[Lord Davies of Coity]

Will the Minister address the question asked by the noble Baroness, Lady Gardner? It has been said quite clearly that there are circumstances in which unqualified paramedics attend an emergency call. Does he believe that any unqualified paramedic should be responding to an emergency call?

[Earl Howe]

My Lords, the issue here is that they were not unqualified, as I tried to convey. All ambulance trusts in the UK allow student paramedics to work unsupervised, but only after they have had nine months’ operational experience and have passed both a written exam and a clinical practice observation by a qualified assessor. In this case, the London Ambulance Service accepts that, despite their qualifications and experience, the crew did not act in accordance with their training.

[Baroness Jolly]

My Lords, there are also volunteer first responders, trained with a minimum skill set and working with ambulance trusts across England. Will my noble friend tell the House who keeps the information about their deployment and how they are monitored for quality outcomes?

[Earl Howe]

I think that my noble friend is referring to first responders, who should be integrated into the clinical governance structure of all ambulance trusts. The outcomes will be assessed for all calls regardless of who attended the calls in the first instance. A first responder is just that—further ambulance staff would always be sent to a call. In rural areas, these staff can often get there first and provide immediate help, so the use of those people is a matter for local decision.

[Lord Colwyn]

My Lords, how often are fully trained paramedics and those in the training process evaluated as being fit to practise?

[Earl Howe]

My Lords, it is up to the employer—in this case, the ambulance trust—to ensure that it has a body of suitably trained and experienced staff. That depends on regular monitoring and ensuring that training is kept up to date. Equally, it is up to commissioners to ensure that the service that they are receiving is delivered by suitably experienced and qualified people. The CQC will also have a role in this regard.

[Lord Hunt of Kings Heath]

My Lords, I refer noble Lords to my health interests in the register. To follow on from the noble Earl’s final comment, is this not an example of staff such as nurses being trained to be practitioners in the health service but finding that they have not been given enough practical training when they come to treat people on the front line? The noble Earl will know that Health Education England is being established as a non-departmental public body in the Care Bill. Can we ensure that that body has much more control over the curriculum of those being trained to fill these very important posts?

[Earl Howe]

The noble Lord makes a series of very important points about training. The answer to his final question is that, yes, Health Education England will certainly be looking at the degree of training required to fulfil specific professional tasks across the piece in the health service, including the ambulance service. However, I do not think that this case reflects a lack of appropriate training on the part of the individuals involved. They were appropriately trained; they were just incompetent. That is the point.

Medical Innovation Bill [HL]

Wednesday 15th May 2013 Lords Chamber

First Reading

15:37

A Bill to make provision about innovation in medical treatment.

The Bill was introduced by Lord Saatchi, read a first time and ordered to be printed.

Social Care Portability Bill [HL]

Wednesday 15th May 2013 Lords Chamber

First Reading

15:37

A Bill to make provision for the portability of care packages to promote independent living for disabled persons by local authorities in England and Wales; and for connected purposes.

The Bill was introduced by Baroness Campbell of Surbiton, read a first time and ordered to be printed.

House of Lords Reform Bill [HL]

Wednesday 15th May 2013 Lords Chamber

First Reading

15:37

A Bill to make provision for permanent leave of absence from the House of Lords; to make provision for the expulsion of Members of the House of Lords in specified circumstances; to make provision for the appointment of a commission to make recommendations to the Crown for the creation of life peerages and to restrict membership of the House of Lords by virtue of hereditary peerages.

The Bill was introduced by Baroness Hayman, read a first time and ordered to be printed.

Assisted Dying Bill [HL]

Wednesday 15th May 2013 Lords Chamber

First Reading

15:38

A Bill to make provision to enable competent adults who are terminally ill to be provided at their request with specific assistance to end their own life; and for connected purposes.

The Bill was introduced by Lord Falconer of Thoroton, read a first time and ordered to be printed.

European Union (Withdrawal) Bill [HL]

Wednesday 15th May 2013 Lords Chamber

First Reading

15:38

A Bill to make provision to repeal the European Communities Act 1972; and to make provision for the Secretary of State to repeal any enactment that has been a consequence of the European Communities Act 1972.

The Bill was introduced by Lord Pearson of Rannoch, read a first time and ordered to be printed.

Queen’s Speech

Wednesday 15th May 2013 Lords Chamber

Debate (5th Day)

15:40

Moved on Wednesday 8 May by

[Lord Lang of Monkton]

That an humble Address be presented to Her Majesty as follows:

“Most Gracious Sovereign—We, Your Majesty’s most dutiful and loyal subjects, the Lords Spiritual and Temporal in Parliament assembled, beg leave to thank Your Majesty for the most gracious Speech which Your Majesty has addressed to both Houses of Parliament”.

[Baroness Anelay of St Johns]

My Lords, we have a long speakers list today. I should be grateful if colleagues who are not staying for the debate will leave the Chamber quietly so that my noble friend the Minister may begin the opening speech shortly.

[Baroness Northover]

My Lords, my noble friend Lady Warsi, who had been due to open today’s debate, has been unexpectedly called away from Parliament on an urgent family matter. I am honoured therefore, as government spokesperson for the Department for International Development, to be taking her place. This debate will, I know, range very widely, and there is enormous expertise in this House. I look forward to all contributions and to the response at the close of the debate from my noble friend Lord Astor.

Representing my noble friend Lady Warsi, I wish to spell out our foreign policy priorities. In the next 12 months we will continue to build Britain’s global reach and influence in line with our core priorities—to safeguard our national security, to promote our prosperity and to support British nationals overseas. I want to set out this agenda in four areas, which I will take in turn. These are: first, responding to the immediate foreign policy issues that we face; secondly, our work to promote Britain’s values across the world; thirdly, our efforts to support economic growth; and, fourthly, the steps that the Foreign Office is taking as an institution to ensure that we are fully equipped to take forward this important work.

The most immediate crisis facing us is the humanitarian disaster unfolding in Syria, an issue that has much occupied your Lordships. Over 80,000 people have been killed, and over 6.8 million people are in dire need of humanitarian assistance. Evidence of torture, summary executions and the systematic use of rape is widespread. We must achieve a political solution to bring a fast but sustainable end to the conflict. We are therefore pleased that Russia has agreed to encourage the regime to the table. This could represent a step forward. We need now to ensure that it delivers tangible progress towards a transition. However, there is still work to do. That is why we think it is even more important that we amend the EU arms embargo to incentivise the opposition to come to the table and increase the pressure on the Syrian regime. We have always said that an amendment to the embargo is designed to create the conditions for a negotiated solution.

The United Kingdom is playing an important role on Syria, supporting the moderate opposition with £12.1 million of assistance last year, and now contributing £170 million to the humanitarian response. DfID is front and centre in this response, and I am proud of that. We will redouble our efforts to end the violence and achieve a political transition, and will continue to support the UN’s investigation into the use of chemical weapons.

Elsewhere in the region we are maintaining our support for political and economic reform in the wake of the Arab spring. While many of the countries affected are facing challenges, progress has been made. We have seen the first ever democratic presidential election in Egypt, a new and democratic Government in Tunisia, and a new and more open constitution in Morocco.

Through the Arab Partnership we have committed £110 million from 2011-15 to promote political and economic reform, and we are working through the Deauville Partnership to promote open economies and inclusive growth. At the height of the Arab spring, the UK played a crucial role in supporting the Libyan people in their struggle for freedom. Effecting long-term change after four decades of dictatorship takes time and there remain significant challenges, but we must not lose sight of the progress made over the past two years. The United Kingdom remains committed to supporting Libya’s transition to a democratic, stable and prosperous country through the provision of advice and capacity building on security, justice and economic reform.

However, lasting peace in the Middle East will be achieved only if a solution is found to the Israeli-Palestinian conflict. I am sure that noble Lords will underline that point in this debate. This is a critical year for the peace process. There is a need to return to credible negotiations, but it will require bold political leadership and both parties to build trust. President Obama and Secretary of State Kerry have shown a strong commitment to pushing the peace process forward, and we will do all we can to support US efforts.

The Government also remain focused on Afghanistan. We seek an Afghanistan that can maintain its own security and that is not a safe haven for international terrorists. This requires us to help to increase the capability of the Afghan national security forces, to make progress towards a sustainable political settlement, and to build a viable Afghan state with a strengthened economy. The ANSF now leads 80% of all security operations and are on track to assume full responsibility for security by the end of 2014. This will help us to reduce the UK military presence by nearly half this year.

Alongside other international donors, the UK will provide long-term support through a £70 million commitment to sustain the Afghan national security forces after 2014, and a £178 million per year commitment until 2017 to support governance and development. This is crucial. We are not, as some have sought to argue, seeking to cut and run. I know from my work in DfID how committed we are on this front, especially to ensuring that the gains that women have made are not lost.

I pay tribute to the courage and professionalism of our troops. Four hundred and forty-four British service personnel have lost their lives in Afghanistan since 2001, and we will never forget the sacrifice that they and their families have made.

Of course, it is not just from Afghanistan that threats to the UK’s security have emanated. The In Amenas attack in Algeria, the attack in Boston and the rising trend in kidnapping for ransom among terrorist groups in north-west Africa highlight the continued threat that we face from terrorism. To counter this effectively, we need to combine creative work from our intelligence agencies and police with intelligent diplomacy. It is crucial that we work with international partners to address the conditions in which terrorism thrives. We will use our G8 presidency to ensure that this issue remains at the very top of the international agenda.

That brings me to the action to halt the military advance in January of al-Qaeda-linked extremists in Mali. UK logistical assistance and intelligence sharing supported a swift French and African military operation that radically diminished the threat in northern Mali. We continue to encourage Mali’s transitional authorities to pursue an inclusive reconciliation process that supports long-term stability.

Nuclear proliferation remains a further threat to our security. In Iran, we are determined to prevent the regime developing a nuclear weapon. In the past year, we have intensified our efforts, as part of the E3+3, to find a diplomatic solution, but Iran’s position still falls far short of what is needed to achieve a breakthrough. We will continue to apply pressure in pursuit of a peaceful, negotiated solution.

Further east, North Korea remains a concern, not least following its satellite launch in December and nuclear test in February. We have worked hard to secure two UN Security Council resolutions in response and the strengthening of EU sanctions. We are making it clear to the regime that North Korea’s long-term interests will be promoted only by constructive engagement with the international community.

Our responses to these issues have been guided strongly by our values. There is no time in this speech to go into detail on the huge amount that we do globally to support and defend human rights and democracy, but I want to highlight some specific areas.

The first area is freedom of religion or belief. The past year has seen more religiously motivated attacks and more cases of abuse, imprisonment and discrimination throughout the world. We need to strengthen the global political will to address the underlying causes of this problem. We will be building on this work in the coming year, which will also see us run for election to the UN Human Rights Council in November. We believe we have the experience and commitment to make a strong contribution to the council’s work.

Secondly, we have sought to rally international action on the prevention of sexual violence in conflict. My right honourable friend the Foreign Secretary has shown real leadership on this issue, which is central to conflict prevention and peacebuilding worldwide. We have created a team of experts to help build the capacity of bodies responsible for investigating and prosecuting sexual violence; agreed an historic declaration on preventing sexual violence in conflict at last month’s G8 Foreign Ministers’ meeting; and secured commitments from the G8, including support for the development of an international protocol and £23 million in additional funding for this issue. These actions have started to build an international coalition to end impunity for rape and sexual violence as a tactic of war. We will continue the momentum by putting this issue on the agenda of the UN Security Council next month and the UN General Assembly later in the year. We also hope the Foreign Ministers’ declaration will be welcomed by the leaders at the G8 summit in June.

As noble Lords will probably know, DfID is supporting work on this on the ground in Syria and Jordan. My right honourable friend the Secretary of State for International Development has made women and girls a top priority of DfID’s work. I commend my honourable friend Lynne Featherstone, who, within DfID, is taking forward a campaign to tackle female genital mutilation, seeking its end within a generation. DfID, of course, looks to support the most vulnerable in the world and, for DfID, women and girls are therefore centre stage.

The third area is that we have helped to bring to a successful conclusion a seven-year, UK-led campaign for a UN international arms trade treaty. I pay tribute to my honourable friend the Parliamentary Under-Secretary of State Alistair Burt for his work on this. The treaty, adopted on 2 April, will hopefully make the world a safer place by saving lives, aiding development and stopping arms reaching the world’s most vulnerable regions. We will sign the treaty as soon as possible and aim to ratify later this year. We will encourage as many countries as possible to do the same. I pay tribute to the many people in the House of Lords who have played their part in bringing this about.

The fourth area is our leadership in supporting peace and stability in Somalia. Two years ago al-Shabaab controlled large parts of the country, piracy was growing and the threat from terrorism was acute. Today, a co-ordinated international effort has seen African and Somali troops drive al-Shabaab out of its strongholds, the creation of a new legitimate Government and a diminishing threat from piracy. The second London conference held last week was an important further step on the path to a peaceful and stable Somalia. The UK will remain actively engaged in this process.

The fifth area is the UK’s work in Burma, where we continue to shape the reform process. The past two years have seen the release of political prisoners, credible by-elections, initial ceasefire agreements and steps towards increasing humanitarian access to conflict areas. However, Burma needs to bring all ethnic groups into the process. We will continue our important work with Burma, including on inter-faith issues, and we are reviewing how we might assist with police reform.

Sixthly, we supported the agreement of a Commonwealth charter, which has for the first time given the organisation a single statement defining its core values. We debated this in the closing stages of the last Session. Given the importance we attach to the Commonwealth, my right honourable friends the Prime Minister and Foreign Secretary will attend this year’s Heads of Government Meeting in Sri Lanka. It is important that we are involved in the meeting and promote issues that matter to us. However, we continue to have concerns about human rights in Sri Lanka and will use every opportunity to encourage progress.

Seventhly, we are continuing with our work to support the British Overseas Territories. Good governance forms an important part of our work with the territories, together with ensuring their security and encouraging their economic development. We will continue to protect the Falkland Islanders’ and Gibraltarians’ right to determine their political futures.

This year, the United Kingdom honoured our promise to spend 0.7% of gross national income on development. As my right honourable friend the Secretary of State for International Development has made clear, we are the first G8 country to do so. This is critical because tackling poverty in the world’s poorest places helps us tackle the root causes of global problems that matter to Britain, from disease and drugs to migration and climate change, as well as being the right thing to do. It is an investment that will create a safer and more prosperous world.

Supporting economic growth and prosperity remains a particular focus of our work. My right honourable friend the Prime Minister wants to use our G8 presidency to advance trade, ensure tax compliance and promote greater transparency, all of which are critical for jobs and sustainable development. It is an ambitious, practical and pro-business agenda that benefits everyone, both in the developed and developing worlds. We will tackle barriers to growth such as protectionism and corruption, and work to ensure that global standards on cybersecurity are high enough to protect Governments, businesses and individuals from harm.

We will utilise the networks open to us to promote growth—networks such as the Commonwealth, whose members enjoy shared values and similar legal systems that provide solid foundations for business, trade, investment and development; and, of course, the European Union, with whom we will work to unlock free trade agreements such as the EU-US Transatlantic Trade and Investment Partnership. We are a trading nation. We do not just want to trade with Europe, we want to have a say over the rules that govern that trade. This is exactly what our EU membership gives us. Membership of the EU is in the UK’s national interest. My right honourable friend the Prime Minister has made it very clear that he wants Britain in the EU, shaping the debate on the things that really matter, such as reducing burdens on business, pushing trade deals with fast-growing economies and preventing a nuclear-armed Iran. We are clear, too, that the EU needs to reform, which is in the interests of all member states.

We are also developing the UK’s diplomatic partnerships with the fastest growing parts of the world, from the Far East and South-East Asia to Latin America, Africa and the Gulf. My right honourable friend the Foreign Secretary announced yesterday our decision to support the UAE’s strong bid for Dubai to host Expo 2020. If successful, Dubai would bring Expo to the Middle East for the first time in history. Over 100,000 British citizens live and work in the UAE and we enjoy a broad relationship on issues from education and trade to defence and foreign policy.

The Foreign Office and UKTI are working harder than ever to help British businesses overseas and promote Britain as a destination for foreign investment. In recent months, we have helped to deliver a £7.5 billion deal for BP to develop liquid natural gas in Indonesia and a £2.5 billion contract for BAE Systems to supply Typhoon and Hawk aircraft to Oman, and we have helped to promote the purchase of Battersea power station by a Malaysian consortium in a deal with an eventual value of £8 billion.

Finally, we are strengthening the foundations of the Foreign Office itself to ensure that it is fully able to defend Britain’s national and economic interest and contribute to a peaceful, stable and more just world. Part of this is equipping ourselves to give the best possible support to British nationals abroad, which remains a crucial element of our work. Our upgraded crisis centre helped us to provide a comprehensive response to crises such as those in Algeria, Gaza and the Egypt balloon crash; and last month we launched our 2013-16 consular strategy, which should allow us to improve our service still further.

Our foreign service is also about ensuring that we have the right resources in the right places, the most visible element of which is the expansion of our diplomatic network. We are deploying more staff to the fastest growing regions, upgrading existing posts and opening new ones. We have already opened or upgraded 12 posts across four continents, bringing our total number of posts to 267, with more planned over the next year.

We are also improving the skills of our diplomats, in particular in foreign languages and commercial diplomacy, and working to ensure that today’s Foreign Office reflects today’s Britain. We have made real progress in recent years, such as the number of women heads of post has more than doubled in the past decade. However, there is more to be done and we continue to work to ensure that the Foreign Office better reflects the great diversity of this country.

Today I have highlighted some of the Government’s recent foreign policy achievements and set out our priorities for the year ahead. The sheer breadth of issues on which we work, and their geographic spread, shows just how much the United Kingdom does on the international stage. Of course, the FCO works closely with the MoD and DfID in its work. This Government are committed to maintaining our “active and activist” approach, because we believe that Britain can and does make a real difference in the world.

16:01

[Lord Triesman]

My Lords, I thank the Minister for what she has said and hope to respond against the background of the four guiding principles that she mentioned in her introduction. The debate has 56 listed speakers with extensive knowledge and experience, which, in my view, speaks volumes for the case for a standing committee on foreign relations in your Lordships’ House.

This is a deeply unsettled, uncertain and unstable time. All leading powers are still hauling their way through a profound economic crisis, and United Kingdom policy has left us becalmed, or worse. The crisis makes the formulation of foreign policy all the more difficult—an international challenge in its own right. The state of the wider Middle East is unpredictable and the outcomes of the Arab spring are still far from clear. Progress between Israel and the Palestinians is imperceptible, and the nation with the greatest leverage, the United States, has for a while deployed far too little influence. However, I welcome the new urgency that we have seen in recent weeks, which is an improvement on the mistakes that were made by the Bush Administration in that region. The United Kingdom is largely absent as a force for progress, however much we may advocate it.

Nuclear proliferation continues. Iran is increasingly problematic, North Korea has become a fully fledged problem and south-east Asia a cauldron of tensions. Miscalculation is the present risk. It is a time, as my right honourable friend Douglas Alexander, put it,

“for careful words and wise heads”.

Global terror, now partially contained in Afghanistan, Iraq and the Pakistani tribal areas, has, as we know, sickening ways of growing new viperous heads on western streets and elsewhere in the world. Terror directed at religious communities, if anything, grows. Cyberwar and crime require constant attention.

Europe has moved along the spectrum from being seen as a source of enduring Nobel Prize winning peace and prosperity to being the plaything of populist politics. Those afraid of dealing with populism seem to buckle at every perceived blow, and the United Kingdom’s long-term interests are placed at great risk. The extent of cuts in defence expenditure reduces our flexibility so that we have to choose very carefully, within reason and international law, where we respond to threats. Alex Salmond seems intent on unravelling our deterrent capability, undermining Scotland and the United Kingdom in equal measure.

Behind it all, the international institutions appear to be weaker, lacking leadership and often dysfunctional. The institutions where we so often place our hopes, such as the United Nations, the G20, the G8, the EU and the multinational forums of Africa and Asia—the machinery designed to learn the lessons of World War II—increasingly lack authority for any concerted strategy. They often let down the people in the world who are suffering the most. The case for liberal democracy and economics, and for the peaceful norms that we have sought to achieve in the past decade, appears to be weaker than it was a decade ago.

Let us face it: the United Kingdom’s voice in international affairs is less audible and sometimes not regarded as very relevant. I welcome the emphasis on international trade relationships in the FCO, but I cannot welcome the subordination of the other key skills of international diplomacy and statecraft that I think we are witnessing.

The two pieces of legislation in the gracious Speech—defence and some minor housekeeping on Europe—are unlikely to be the focus of today’s debate. The defence Bill will be studied. Its backdrop is a sequence of culls in the 2013 Budget and probable cuts in the 2015 spending review. Long-term commitments to real growth in equipment budgets, particularly the F-35B, mean that apportioning future austerity will determine where we project force in our national interest and through our alliances.

The Bill that ought to have been announced—if the coalition had had the courage of its 2010 convictions—would have enshrined the aid pledge made so volubly at that time. Driven by a “Farage” of populist rhetoric, the Prime Minister has dropped the legislation—how sad. Progress in Africa was central to the previous Government; I believed it was central to this Government. The damage to the millennium development goals creates greater uncertainty, insecurity and violence in Africa. It will impact on us and it is an historic error. Popular it may be in some short-term view; mistaken it certainly is. Better for Mr Cameron to use the G8 presidency to act on aid tax and transparency—perhaps he can move an amendment to the Queen’s Speech in order to do that and be remarkably “relaxed” in doing so.

In identifying and assessing risk in policy, we must be complete realists. The decision on Britain’s membership of the EU can be based—as the noble Baroness did a few minutes ago—only on a judgment of national interest. Committing now to an in/out referendum fails that test. I fear that we are not so much sleepwalking to the exit but that our Government have, in some cases, actively embraced exit or are indifferent to the consequences of the process we are now in.

We are three years into the eurozone crisis. The underlying causes remain. Politics and economics are marching in opposite directions. New structures are slow in the making. Failure will be devastating to frail major world economies, and some are now estimating a risk of a 10% decline in global GDP, and EU unemployment, already unsustainable, reaching 20%.

Many issues demand reform in the EU and an astute United Kingdom can contribute massively to that. But there are no credible substitutes for our current trade relations. The prospect of a free trade agreement between the two largest global blocs, the EU and the United States, offers opportunities that are otherwise unavailable. The key is to be at the international table—not outside the door, subject to the decisions within but without a voice or a vote.

What an amazing moment to blight our economic prospects with what will be a four-year campaign over a referendum, the terms of which nobody today can express with certainty. I declare an interest as leading a merchant bank and in that role I now routinely see due diligence risk questions from potential inward investors to the United Kingdom. Global businesses now contemplate the consequences of us fighting for four years and then potentially fracturing the EU by the withdrawal they fear is likely. It has become a due diligence risk. I put it plainly: a robust global economy is in the United Kingdom’s interest; the prosperity of our people should be our only goal. Of course, we will not simply defend the status quo—there are many things to be corrected—because that also hampers the interest and the goal I have expressed.

Advances in reversing proliferation as major powers reduce their arsenals are welcome. Iran and North Korea are not only dangers themselves but encourage other, often not stable nations to create a new balance of terror. Our limited role—and it may be limited—could involve assisting Washington and Beijing, the powers most likely to intervene, in that part of south-east Asia to show that new co-operation is desirable. Shared intelligence on the DPRK’s WMD assets and some information on their own military resources tasked to intervene might reduce risk and build confidence. Co-operation in these ways is always risky, but non-co-operation is riskier still.

Relations with China have wider implications, and I am not clear that we really know what we are doing. We need to grasp what faces Xi Jinping and the new leadership in China’s domestic transformation and foreign policies, which are plainly problematic for them, to foster deeper relationships. All these things pose sharp and deep challenges.

I look to 2014 for an honest debate on our aims and their outcomes in Afghanistan. It is unhelpful to do so with our troops still on the ground. It is better at this moment to pay tribute to their courage and sacrifices. In due course, we will need to take stock of the security position that we leave behind. We will want to know whether Afghans regard their Government as legitimate and their economy as sustainable. We need a prospectus where security, good governance, the rule of law, universal rights, pluralism and the engagement of all forces in social reconciliation direct the efforts of the United Nations in that country.

Difficult as the Pakistani elections have obviously been, it is truly significant that an elected Government have been succeeded by another. The UK must engage early, not least in the interests of Afghani security, but we should also try to convince Pakistan, if we can, that India is not its greatest problem—far from it.

I turn briefly to the Middle East, where we surely have a role. We deplore the rocket assaults on Israel and the threats made by Iran, Hamas and Hezbollah to eradicate Israel. We tell our Israeli friends that seizure and construction on Palestinian land and the line of the wall breaches international law and is morally wrong. New life is needed in what is neither peace nor a process. The two-state solution hangs by a thread. As matters stand, it will probably not survive. The immediate consequence could be the collapse of the Palestinian Authority with Hamas filling the vacuum. It might be followed by an Israeli re-occupation of the West Bank and a violent Palestinian response. The Israeli Government and Palestinians need to understand urgently that they are each other’s best prospect for stability and finally peace.

We will work hard to bolster the durability of the Israel-Egypt peace treaty—I hope that it is a priority for the FCO—providing the assistance that President Morsi appears to want.

Syria will continue to pre-occupy this House as a humanitarian and strategic disaster, although I welcome what the Minister said about aid being provided in Syria, which is plainly very important. Each passing week has made it harder to identify and support a secular opposition, although we must surely continue. However, I believe—and I hope that the House will forgive me for saying so—that we are behind the curve. We have failed to learn from Richard Holbrooke’s approach to diplomacy and statecraft in the former Yugoslavia. There was there, of course, American leadership, but there was also aggressive and creative diplomacy and a willingness to use force in the cause of peace, anchored to a resolution where no ethnic or other group was completely denied a living space, a credible state and economic institutions. It was a sort of cantonisation, I know, but it none the less persuaded people that they were not being driven out of their homes permanently and to their continual detriment. For many, it was the least-worst outcome, but, with the exception of criminals such as Mladic, it has survived as a solution and as a diplomatic triumph. John Kerry has obviously learnt much from this approach, and that is why I welcome the discussions that he has had with Russia. We should have done so many months ago.

None of this is said to be disobliging. I simply conclude by saying that we use the skills of the FCO and DfID very well but we can do so to greater effect by responding with dramatic measures when it is right but, for much of the time, working far more consistently on the smaller and more persistent scale. Foreign relations are hard to predict but they can never be allowed to be a rollercoaster. We need a new calibration: more solid, patient work and more realism about what works with our allies and when we can work best with them. Upgrading and higher numbers, as we have just heard reported, are excellent and I welcome them but there also needs to be more traditional tasking of that workforce to provide what I fear at the moment is a missing ingredient.

16:15

[Lord Chidgey]

My Lords, I first thank my noble friend for her overview of the developments in defence, foreign and commonwealth affairs and international development. I will concentrate my remarks on the latter. Within that framework, the UK has, through DfID and the FCO, maintained a reputation over the past decade and more as a world leader in international development. To our great credit, our development programme has been maintained in spite of our straitened economic circumstances. Our overseas development aid is expected to rise to some £11.7 billion this year as we meet the target of investing 0.7% of gross national income—a target agreed by the G8 and others to help global efforts to meet the millennium development goals or MDGs.

However, there is growing concern that the UK has yet to enshrine this target in law as a permanent feature of our international development commitment. The MDGs were set to be achieved by 2015 but that is clearly not going to happen. It is clear that few if any developing countries will achieve all the goals. This must not be painted as failure. In reality, probably in every case, developing countries have made significant progress towards meeting some if not all of the goals, progress that arguably would not have been made without the MDG initiative. The debate is now in full swing over what should be done post-2015.

According to news reports this morning, the Prime Minister will announce at the UN today proposals for 10 new development goals that will be simple to understand and easy to implement. It is not clear whether these are extensions of the current MDGs or the outcomes of the post-Busan Global Partnership for Effective Development Co-operation, which the Prime Minister co-chairs. Also reported this morning were the results of a survey carried out among more than 600 MPs at the Inter-Parliamentary Union Assembly meeting in Quito. That revealed that MPs overwhelmingly backed democratic governance as a stand-alone objective for the UN post-2015 sustainable development goals—the new SDGs. More than 96% of the MPs surveyed believed that the key elements of democratic governance —participation, transparency and accountability—should be embedded in other SDGs to ensure success. Do the Government agree with that?

For more than a decade, and in parallel with the MDGs programme, there has been a concerted effort to achieve an international partnership in effective development co-operation. The fourth high-level forum in Busan at the end of 2011 saw the establishment of the Global Partnership for Effective Development Co-operation. Its main functions include maintaining political support for co-operation and monitoring the implementation of the Busan commitments, with more than 160 countries and 45 other organisations signed up to endorse the agreement.

The UK was and remains a major player in the Busan process. The Prime Minister is a co-chair of the high-level panel of Ministers and our Secretary of State for DfID serves on the international steering committee developing the indicators for monitoring aid effectiveness. Given that the steering committee’s work is carried out transparently, could my noble friend, either now or later, provide your Lordships with a brief on the progress made by the Prime Minister and the Secretary of State since December 2011 on their post-Busan duties, and by the former Working Party on Aid Effectiveness?

With more than 48% of the world’s population now living in democracies, the current western model for development and aid investment assumes that participation of citizens is essential to development. The promotion of democracy underlies much of western development policy and access to aid and investment from the UK, EU and other donors. That western model has been seriously questioned at the World Economic Forum in Addis Ababa. It has prompted the All-Party Parliamentary Group on Africa, of which I am a vice-chairman, to initiate an inquiry into democracy and development in Africa. The inquiry will focus in particular on the implications for UK development policy.

The gracious Speech made strong reference to curbing sexual violence in conflict, which would fall within the remit of Building Security Overseas, and in particular, the right to protect. There is a clear need for the UK to promote the right to protect to help states build the capacity to guard against the risks of genocide and crimes against humanity. The Minister has already given in her opening remarks some indication of where the budget now available through Building Security Overseas has led to improving the tools available to the international community before, during and after conflict, minimising the potential for atrocities. Can she or her colleague provide more detail about that process and the Government’s commitment in due course?

One of the most pressing issues, particularly on the African continent, is the predicted shortfall in the production of enough food to meet the needs of a burgeoning population. According to the Montpellier Panel at Imperial College, more than 200 million people, 23% of Africa’s population, are classified as hungry and 40% of children under five in sub-Saharan Africa are stunted due to malnutrition. Sub-Saharan Africa has a current population of about 875 million, which is expected almost to double by 2050 to close to 2 billion. The Montpellier Panel believes that a new paradigm to tackle food insecurity is urgently needed, through a programme of sustainable intensification. That, it says, will be essential if we are to overcome supply challenges. On present trends, food production will be able to meet only 13% of the continent’s food needs by 2050.

Can my noble friend tell the House whether the Government plan to recognise and act on the new paradigm of sustainable intensification to avert food insecurity and the threat of chronic hunger? Is she also aware of the report of the Institution of Mechanical Engineers, of which I am a former member, entitled Global Food: Waste Not, Want Not, which concludes that at least 30% of all food produced never reaches the intended consumer due to poor practices in harvesting, transportation and storage? Do the Government plan to follow the recommendations of the institution, and work with the UN Food and Agricultural Organisation and the international engineering community to bring their skills to bear on improving harvesting, transportation and storage practices?

As the ONE campaign pointed out in its latest report on fighting extreme poverty in Africa, the 19 countries that it assesses in the context of meeting the MDGs have together a funding shortfall of some $4.4 billion. It is also the case, apparently, that DFID directs less than 3% of UK aid to agriculture, forestry, fishing and agro-industries—the lowest among the G8 countries. Does my noble friend agree that there is a strong case for that aspect of government policy to be reviewed? It seems counterintuitive that while sub-Saharan Africa is facing an impending food crisis, according to Action Aid, more and more land is being switched from food production to growing crops for biofuels. Action Aid’s research reveals that in sub-Saharan Africa, 6 million hectares of land are now under the control of EU companies engaged in the biofuel industry. It estimates that the amount of food crops consumed as fuel by G8 countries could feed more than 400 million people.

Will the Government take the opportunity, when chairing the G8 summit next month, to follow the advice of the World Bank, the World Trade Organisation and the UN’s FAO, and press for the removal of biofuel mandates, which are forcing up food prices?

16:23

[Lord Craig of Radley]

My Lords, the gracious Speech barely touches on defence. Only “strengthening the Reserve Forces” and improving,

“the way this country procures defence equipment”,

get a mention. There is little else. Why indeed, is “this country” rather than “my Government” or even “my Ministers” given the task of improving procurement? It is tempting to consider, pace the other place, an amendment regretting the poor coverage of defence issues, a principal responsibility of government, in the gracious Speech.

Of course, much depends on what tasks and commitments the Government of the day will expect or wish to undertake. It would be helpful if there were unity of vision on this. Is thought being given to re-energising past attempts to find cross-party consensus on these issues?

Two and a half years have passed since the strategic defence and security review was published. We are approaching a third of the way to the goals set out for Future Force 2020 and the three services. It is timely to take stock of what has gone well, what is worrying and what cannot be achieved in the coming seven years. I expect the Minister to cover what has been going well, so let me highlight a few of my worries as we look towards 2020.

My principal concern is that the funding required to match the force levels for 2020 is not assured. Indeed, it seems from the trends in defence budget squeezes of the past couple of years that there is no longer any realistic expectation that Future Force 2020 is financially achievable. Added to that are the delays in future equipment delivery with carriers and F-35, for example, the latter now possibly further affected by the sequestration issues in the United States. There is still no provision for the maritime air capability lost when Nimrod mark 4 was abandoned. Combat air was almost halved in 2010, when the Harrier force and some other front-line squadrons were disbanded. The mooted projections of yet more force reductions in combat air further weaken a vital capability mounted with impressive speed and professionalism in the Libyan campaign two years ago, or in the ongoing work of the Tornado force in Afghanistan. The paucity of naval surface ships has created well rehearsed difficulties in meeting global commitments. Army regular force levels are to shrink by 20%. The prospect of relying ever more on the reserves has yet to be achieved or put to the test.

The cumulative effect seriously diminishes the putative scale and endurance of any future expeditionary commitment, but senior Ministers seem to be in denial about this. They still sound minded to strut their military stuff on the world stage. They rightly sing the praises of today’s Armed Forces but mass, too, counts in conflict. Do the Government realise that today they carry more of a sharp twig than the big stick of yesteryear? Moreover, as numbers are scaled down the resilience of the remaining forces is compromised. A favourable air situation and our operational and tactical skills, which have generally outmatched the opposition’s, have been providential but some future operation might not enjoy the benefits of such air and tactical supremacy, and low own-side losses.

There is a variety of the unexpecteds that could also involve serious numerical loss—losses that could be the equivalent of a 20% or 30% cut of the total strength available or even more, not a more manageable 5% or 10% attrition. Unexpected major risks might be: a serious loss of key passengers in an air transport accident; a major hangar fire with maybe six, a dozen or more airframes, engines and other critical kit lost in the bonfire; or even an extreme weather event which, as the Minister will know, can cause major damage to aircraft caught by it. I have not dreamt these risks up. They have happened. Is it not foolhardy to presume that they will never happen again? Is the Minister satisfied that enough allowance is being made for unlikely but catastrophic loss—for the unexpecteds of life—other than in combat operations?

Size is its own insurance. The Royal Air Force was almost 100,000 strong when the first Gulf conflict began in 1991. Today, it is not much more than 30,000. Aircraft numbers have similarly shrunk, and with them the resilience of the force to cope with the unexpected.

As regular personnel numbers reduce, the intention is to make good gaps in skills or shortages by drawing on reservists. We seem stuck in the mindset that they can be mobilised only by means of ministerial authority. We need to look again at an outmoded system which does not take account of the new and greater reliance on the reserves, in some cases when only two or three individuals with specialist knowledge or capability may be immediately required. A more flexible system attuned to the new policy for using reservists is now essential.

16:30

[The Lord Bishop of Bath and Wells]

My Lords, I welcome this opportunity to contribute to the debate on the humble Address, particularly in the area of foreign affairs. I welcome the Government’s continued commitment to preventing conflict and reducing terrorism and acknowledge their intention to strengthen the Reserve Forces, although I regret the lack of legislation to enshrine the necessity of consulting Parliament prior to the deployment of military force.

The promised support of countries in transition in the Middle East and north Africa and the opening of the peace process in Afghanistan are also significant. I welcome the various remarks made in relation to the Israeli-Palestinian conflict and agree entirely with the Minister and the noble Lord, Lord Triesman, on the urgency of this matter. I declare an interest as the recently appointed chair of Conciliation Resources, whose work is committed to supporting people at the heart of conflicts who are striving to find suitable solutions.

Like many of your Lordships, I am deeply concerned about the situation in Syria. I welcome the recent visit of the Prime Minister to President Obama, but I particularly wish to acknowledge the initiative of US Secretary of State Kerry in his dialogue with the Russians and the proposal to convene an international conference on Syria before the end of the month. Last year, I met the Russian ambassador to gain first hand the Russian perspective on the conflict. I welcome the initiative that looks to be in the process of being taken. That meeting last year followed one with Alistair Burt, who expressed the hope that a tipping point had been reached in Syria. Regrettably, no such tipping point was reached, and the evidence of that is clear in the growing sectarian nature of the conflict. A particularly disturbing piece of evidence lies in the recent kidnapping of two metropolitan bishops from Aleppo and the absence of any ransom demands for their release.

While some evidence exists that the various parties are realising that a negotiated transition is better than a fight to the death, does the Minister agree that in the absence of a political solution, the international community needs to contain the crisis by limiting the flow of arms to Syria and by strengthening the capacity of neighbouring countries to provide for the welfare of refugees? I raise this question because I regret the ongoing intention to seek an amendment to EU sanctions in relation to arms for Syria because if the Americans and Russians are successful in convening a peace conference, is such a strategy over arms provision the wisest thing we could be doing? The recent intervention in Libya offers evidence that the provision of arms without due attention being paid to the potential decommissioning thereof ought to leave us with some anxiety. Providing arms in this increasingly fragmented conflict makes any strategy for decommissioning arms, post conflict, very difficult.

Further, much as we hope and pray that a peace plan emerges from the diplomatic process, history suggests that such plans have durability only if the plan is owned locally and championed internationally. Rather than seeking the lifting of sanctions on the supply of arms, could Her Majesty’s Government consider how their role might contribute to being a custodian of any settlement? That would include taking steps to ensure that the Syrian National Council plays a constructive role at the peace conference, offering support to any regional or international peacekeeping force and facilitating, ensuring access and co-ordinating the humanitarian response. This would be an entirely appropriate action for our Government to be engaged in. While it is widely accepted that President Assad has no future in Syria, the wider question is whether his departure should be seen as an outcome of a diplomatic process, rather than the precondition of beginning one.

I return briefly to the impact of the sectarian conflict on religious minorities. Can the Minister kindly elaborate on the conversation that Alistair Burt recently had in Lebanon with religious leaders, and will he reassure this House that the Government will continue to take a robust position on the rights of all religious minorities in Syria?

It is now five years since seven Baha’i leaders in Iran were imprisoned. I welcome the remarks of Alistair Burt yesterday on these leaders and the need for freedom of all Baha’is in Iran to worship and practise their faith. I encourage Her Majesty’s Government to continue to pursue this matter with some urgency in the coming months.

While on the subject of religious freedom, I ask finally what consideration is being given to appointing a special envoy on freedom of religion and belief issues, and to foster dialogue and understanding as outlined in the Foreign and Commonwealth Office’s 2012 human rights and democracy report. I welcome the initiative of Her Majesty’s Government in respect of the United Nations humanitarian initiative and hope that it will be successful.

I acknowledge that these are substantive and difficult issues to which there are no easy answers, but Her Majesty’s Government are to be encouraged to see themselves as a custodian of a constructive approach to a diplomatic process, and cautioned against further arming in what is an already dangerously overarmed conflict.

16:36

[Lord Howell of Guildford]

My Lords, I will concentrate on two points. There has been a lot of talk about what was missing from the Queen’s Speech, mostly focusing on aspects of the European debate. However, my concern is with another word that was missing: it is “Commonwealth”. It was mentioned briefly by the Minister when she spoke but it did not appear in the Queen’s Speech, which is a great pity. Last year, we managed to get it in, but I notice that it is not there this year. The Queen is a worldwide figure, respected, with vast influence across the whole planet. She makes a speech before all the high commissioners, covering a vast area of 53 nations and encompassing a third of the human race.

This is not just sentiment. The Commonwealth network is growing rapidly, at 3.7%. It is the gateway to all the new markets, all the areas in which this country must succeed to survive. I am not saying that it is an alternative to the European Union, but the fact is that the EU is flat-lining and struggling with its unending problems over the euro, which will go on for many years; we need that to be repaired, of course. However, the truth is that all our success, all the statistics and a growing volume of evidence show that all the growth in the next 17 to 20 years will be in Asia, Latin America and, particularly, in Africa. These are the areas that the Commonwealth spreads across and to which it gives us access, along with gateways to the great markets of China, Brazil and so on.

It is a great pity that the word “Commonwealth” did not occur in Her Majesty’s Speech. It should have been there. I know that there are problems over the heads of Government meeting at Colombo, and I am very glad that my right honourable friends the Prime Minister and the Foreign and Commonwealth Secretary are going, and also that His Royal Highness Prince Charles is going. They will no doubt all speak out very clearly on the causes of human rights and liberty, as they should in Colombo because there are clearly matters to be dealt with there.

However, the links between Commonwealth Governments do not matter so much. It is the vast range of links beneath, the latticework of networks between every profession—education, science, schools at every level, universities, professions, the accountancies, the legal professions—which spread out through the Commonwealth and give this country a legacy which we have so far neglected and yet which provides us with just the access we need precisely to the markets where we have to succeed.

I mentioned that the Commonwealth is growing at 3.7%, which is good by European standards. The Commonwealth countries are not just the old countries in difficulties. It is a vast range of the fastest-growing high-tech economies; the obvious ones are of course India, Malaysia, Singapore, Australia, Canada and so on. These are leading nations with, in many cases, a higher income per head than us. On top of those is the new range of Commonwealth countries coming into the prosperity league either side of Africa, as they find through the shale gas revolution that they have fantastic raw energy resources and prospects. They are increasingly setting up their own sovereign wealth funds, from which we in this country will be borrowing. Rather than helping them, we will be borrowing from the sovereign wealth funds of the Commonwealth in order to finance our dilapidated infrastructure. Therefore, to leave the Commonwealth out of the story is a big mistake, and the word should have been there in Her Majesty’s speech. That is all I want to say about that.

I turn to the European Union issue. It makes one gasp to think of the naivety of some of my colleagues—some quite senior people—and the oversimplifications they make when they speak about the European Union as though it were a sort of canoe you could pop in and out of. My noble and good friend Lord Heseltine tells us that we will be irrelevant and marginalised if we get out, while my noble and very good friend Lord Lawson, sitting here, says the opposite—that we will be irrelevant and marginalised if we stay in. In fact, of course, both of them are gloriously wrong, and I am afraid that they are looking at a world that no longer exists.

The concern of the noble Lord, Lord Heseltine, about outside isolation is quite wrong. In fact, if we were out of the European Union, we would still not be in an independent state but in an interdependent state. We are totally interdependent and bound up closely with the concerns of almost every other country in the globe, because this is a network world with super, instant, continuous connectivity. That is what changes the whole nature of international relations. There is no question of being independent. Even the rogue states find that they have to bow to international pressures. We would be bound by a thousand treaties; we would not be independent at all but interdependent—so we would not be isolated.

Pro contra, if we stay in—and that that is the route I prefer, contrary to my noble friend—it is not true that we would be irrelevant and powerless, because the European Union is itself in total flux. It is undergoing a complete re-examination of its philosophy of integration, and the eurozone is the place where the divisions lie. People talk about Europe divided as though it were divided between the eurozone core and the countries that are somehow left out, including Britain. That is not where the division lies. The division goes straight through the middle of the eurozone. That is the slice through the middle of the apple. Half of the eurozone is made up of countries with one kind of approach and half of countries with another, and they will continue to be in trouble and to have difficulties for years to come. They have not even succeeded in getting as far as a bankers’ union. Italy has one idea on that, and Spain, Greece, Portugal, Cyprus and the other small countries all have other views. There is no combined view, whatever Mr Schäuble says in Berlin, on what a banking union should actually do, let alone a fiscal or a political union. None of these things is going to happen.

Europe needs a vast range of reforms; that will happen, and that, of course, is precisely what my right honourable friend the Prime Minister sought to set in motion with his superb speech back in January at Bloomberg, when he said that we are trying to reform, we need to reform, and that Britain must take an intellectual lead in reforming the whole European structure. That is what he said in the first line of his speech. I know that a lot of the media has said, “No, this is all about party politics; it’s all about grabbing things back for Britain. It is all very narrow”. That is not true. The whole speech was couched in terms of how Europe can be, in a sense, reunited, despite the divisions within the eurozone. That is what he was trying to do.

That is the right course. Frankly, it requires more than speeches. It requires enormous work in gaining allies all over Europe for European reform, because the present chaos throughout the Union has so many unsatisfactory features, and those allies must be worked for. It requires huge intellectual efforts to redesign the kind of united Europe we want to meet the conditions of hyperconnectivity and the cyberworld we now live in, which are quite different from those of the 20th century. That is what we have to get on with.

The other day, the IMF said that by 2017 the European Union will have shrunk to about 17% of the world’s GNP, and the eurozone will have shrunk to about 11% of the world’s GNP, compared with the Commonwealth, which will be more like 20% to 25%. Of course it is important; it is our neighbourhood and we must be good Europeans. However, we have to settle that matter and move beyond it to where our real interests lie, which is in the Commonwealth network, in the neighbourhood next door to the Commonwealth, and in the developing countries, many of which have huge new resources. That is where our real interests lie. It is a shame that the Commonwealth was not mentioned in Her Majesty’s Speech. The policy machine that puts out these speeches and creates their text needs to wake up and realise where our future and our destiny lie.

16:45

[Lord West of Spithead]

My Lords:

“It is upon the navy under the good Providence of God that the safety, honour and welfare of this realm do chiefly depend”.

Thus ran the preamble to the Articles of War, written more than 300 years ago. There is no doubt that naval dominance of European waters was the longest, most complex and expensive project ever undertaken by British state society. As a result a small, weak, insignificant offshore island was able to develop into the world’s greatest power. More recently, the prime reason we survived the German wars of the first half of the 20th century was the strength of the Royal Navy.

We remain the sixth wealthiest country in the world; world shipping, which is the sinews of our global village, is run from London; we are responsible for 14 dependencies worldwide; we are the biggest European investor in South Asia, South-East Asia and the Pacific Rim, where stability is crucial if we are to get the return we need from our investments; and we are a permanent member of the Security Council. We are, like it or not—and I know that many do not like it—a world power. We are of course an island, but the Government seem sometimes to forget that. The maritime sector was worth more than £10 billion in 2010, and 90% by value and 95% by volume of our imports and exports travel by sea.

How are we safeguarding this today? The noble and gallant Lord, Lord Craig of Radley, rightly said that there was hardly any mention of defence in the gracious Speech. The Prime Minister has stated on a number of occasions that defence and security are the first responsibility of government. These are fine words but I fear that they have not been backed up by actions. In the 2010 strategic defence and security review we took measures that severely weakened our ability to project power, yet within months our forces were being committed to action in Libya. There have been further cuts since, and further indications that the Government would be willing to commit British forces if we are not careful.

Similar cuts are being made by our European allies, and the USA is finding itself carrying more and more of the defence burden of looking after the military interests of the western democracies and other nations worldwide. The US, too, is having to find savings and is now looking across the Pacific rather than towards the Euro-Atlantic region. Europe will have to take on more responsibility for its own security. The US has consistently supported us in the European, African and near-eastern area. Are we really not going to support them in the Far East and Pacific if the call comes? Those areas are increasingly important to the UK as well as to the US.

None of us can predict the next crisis. It may happen tomorrow, and from my experience of the intelligence world I know that we have a very bad track record of predicting crises. In an increasingly chaotic and dangerous world we must carry our share of the burden. Simply and starkly, we are not carrying our share. I do not have time to list all our shortfalls that impact on the critical mass of the Navy. Manpower has to be one area of concern. We had 75,000 sailors in 1982, some 30 years ago, and have 26,500 today—a cut of two-thirds in naval manpower, with all the effects that that has on flexibility.

I will be fair to the Government and congratulate them on their realisation of the crucial significance of maritime strike, and their aspiration to run both new carriers. Not to run both would be a national disgrace. Let us hope that their gamble of getting rid of “Ark Royal” and the Harriers pays off. So far we have got away with it for three years; we have to get away with it for another four or five. It was a gamble.

I will focus on just one example of our many shortfalls in the maritime sphere. Noble Lords may remember the preamble about the importance of the Navy to our nation that I gave at the beginning of my speech. Do the Government really believe that 19 destroyers and frigates—that means only six deployed—are sufficient for our nation? At the time of the Falklands war, when the Royal Navy saved the Government’s bacon, we had about 60 destroyers and frigates. The difference in capability of our new ships does not make up for the huge lack of numbers; one ship cannot be in two places at once. We have cut to the bone and, in naval parlance, our nation is standing into danger. I have written to the Prime Minister stating that very point.

We can no longer be sure that our Armed Forces are capable of meeting the tasks that our nation and people expect of them. We are at a crisis point, and something has to be done. History has shown how our nation suffers if we forget the crucial importance of our military and, in particular, of the sea and our Navy.

16:50

[Lord Ashdown of Norton-sub-Hamdon]

My Lords, in listening to my noble friend’s speech at the Dispatch Box, I was struck by a lacuna. I hope that she might take this opportunity to clarify the position of the Afghan interpreters. We are in severe danger of committing an act both unwise and discreditable, if not shameful. I cannot understand why my Government have not before now clarified the position of these men, who have placed their lives at the service of our country and stood shoulder to shoulder with our troops in some of their most difficult hours. Without them, those troops could not have acted at all.

These men are different from our troops in this sense: our troops can be sure that their families are home, secure and safe, in Britain, whereas they cannot. Their families live, day in and day out, threatened by mortal threat from the Taliban in Afghan society. Our troops come home every six or nine months, whereas they do not. They have served us, day in and day out, month in and month out, year in and year out, yet the Government are havering as to whether they should have the same rights that interpreters had in Iraq. We are not asking much; we are not asking anything new, or for something that the Government have not done before. The precedent is already established.

There are some 400 Afghan interpreters—that is all. So what is holding this up? What is the Government’s position? I am told that the Ministry of Defence is perfectly content to make sure that those same conditions are offered to these brave men—they are all men, of course—who have done such service to our nation and to our troops on the ground. I am told—and it surprised me, because this is where I thought the problem might be coming from—that the Home Office is perfectly content. I am told that it is coming from Downing Street. I do not know whether that is true.

The Prime Minister has certainly said—and I understand where he is coming from—that he wants these men to stay in Afghanistan, because they have something to contribute there. I understand that. I remember very well in Bosnia the damage done by the internal brain drain, when salaries paid to those working for the international community so outweighed those paid by the local community that, for instance, my driver in Afghanistan was getting more than the Prime Minister. I understand that and I understand that the Government may wish to put an economic value on those people, if they wanted to stay and contribute to Afghanistan in peace.

Let us assume a value, plucking one out of thin air. I imagine that it is nowhere near this, but let us say that it is £50,000 for such people to stay in Afghanistan. That is fine—I am glad that the Government are prepared to monetise the value of their continuing in Afghanistan. However, the choice must be theirs to take. It is theirs to decide whether they want to balance their own life and face the risk, under mortal, declared and deliberate threat from the Taliban, against the sum of £50,000. Let us double that. I wonder how many of your Lordships would accept £100,000 to leave themselves at such mortal risk, and leave their family there as well. If the Government wish to come forward and place a sum of money that expresses the value of their staying in Afghanistan, I am entirely for that, provided that the choice is left to them.

It is time that the Government came clean on this and acted in honour. It is time that we did not continue with this shameful delay in clarifying the position of these men. We have paid a very high price for our engagement in Afghanistan. Let us not add to that price now with an act of dishonour by leaving these people in the lurch.

My second point is on Syria. I heard what the noble Baroness said and I welcome what the Prime Minister said. I congratulate him on negotiating with the Russians the possibility of a peace agreement. It appears that there is a chance of that happening. That is good. I do not accept that it will deliver very much; having a peace agreement is not the same as delivering a peace, but it is good that we should try to obtain such an agreement. What worries me is the implied threat that lies behind that. I heard it explicitly in Paris, it is also being said in Whitehall and it is certainly being discussed in Washington that we should lift the arms embargo. I have to say that that would be an act of the grossest folly.

I will try to explain why that is the case. What is the reasoning for this argument? Do the rebels need more arms? No, they do not. Some 3,500 tonnes of arms have been delivered, funded by rich Saudi businessmen and Qatar and facilitated by the CIA. By the way, that 3,500 tonne figure is not questioned by American official sources. Arms have also come from Croatia. We are talking not about tanks in that 3,500 tonne figure but about small arms. There is no shortage of weapons at all. By the way, I know where they are coming from: they are coming from Tito’s underground arms manufactories in Bosnia. I have no doubt that that arms trade is also funding their deeply corrupt forces. As I say, there is no shortage of arms. Indeed, the Government admit that there is no shortage of arms. They say, “We will supply arms in order to influence the moderate forces”. However, it is a fundamental fallacy that you influence people by supplying them with arms.

However, the real danger that I worry about is that we have misread the situation. Some in Britain believe that this is somehow Bosnia revisited. No, it is not; almost nothing about the present situation in Syria is comparable with that of Bosnia. It is deeply more complicated. By the way, those of us who knew something of Bosnia during the Bosnian war never recommended that we should lift the arms embargo.

Here is the problem: the law of unintended consequences will come into play again. We believe that we are fighting a rather simplistic battle between a brutal dictator and innocent citizens. Actually, I have to tell noble Lords that behind this a different battle is being fought. It is not a battle for Syria; it is a battle in which Syria is only one front line. What we are now seeing being prepared is funded by Saudi Arabian businessmen—I have to believe with the agreement of the Saudi Arabian Government—and the Qataris: namely, to capture the Sunni Umar and to radicalise it as a preparation for a wider war against the Shi’ites. That is what this is about. Some seek to produce that outcome. The war being fought in Syria is the same as that being fought in Mali, Libya, Egypt and elsewhere. The Salafists and Wahhabists do not love each other very much but they are working with the same aim of capturing the Sunni Umar as a precursor to a wider war. I do not know whether they will succeed, but that is their intent. I think that that would be catastrophic.

It is important that we understand the Russian position on this. It is not just about supporting their last supporter in the Middle East—Assad—but about the fact that they know that the same thing is happening in their Muslim republics, such as Dagestan. We need to understand that there are forces in the Arab world for whom the war is no longer a war against the great Satan; it is the preparation of a war against the great refusant of the Shi’ites. What is at stake here is a wider regional war. Mao Tse-Tung used to say that the First and Second World Wars were the European civil wars. Perhaps they were. Perhaps that is a better way of looking at it. It is possible to have a regional war with global consequences. It would be disastrous if we were inadvertently to stoke that up and enable it, with weapons being passed out of the control of those whom we would like to have them into the control of those whom we would not. It would be disastrous if the wider consequence was not that of alleviating the situation in Syria but that of building towards a much wider conflict in which we are instrumentalised on the side of the Sunnis and the Russians are instrumentalised on the side of the Shia. Let us at least understand what is at stake in this. I earnestly hope that we can achieve peace, as innocent people are suffering terribly every day in Syria, but let us not, by lifting the arms embargo, contribute to an even more terrifying and widespread conflict.

17:00

[Lord Williamson of Horton]

My Lords, I declare an interest as I spent a large part of my career in the British public service on European Union affairs and some part of it at the European Commission.

I am extremely grateful to the noble Baroness, Lady Northover, in her role as “super sub”, for her introduction to the debate, given that the statement on the Government’s international position in the gracious Speech is perhaps rather economical with the truth. There is no reference to the Commonwealth, although the Commonwealth is on the rise; there is no reference to the European Union, although it is the foundation of our international relations; and there is no reference to the serious situation in Syria. The only reference is the intention to “support countries in transition”, which perhaps confuses rather than illuminates the actual situation.

It has recently become more difficult to decide on which day in the debate to speak because in reality some elements of international affairs cover not only the European Union but economic, financial and home affairs. However, that is a consequence of our membership of the European Union. I wish to pick out some significant points in relation to EU affairs, notably how best we should carry through the course on which we have set ourselves—most recently in the Bloomberg speech by the Prime Minister and in the considerable amount of referendum speculation that is now all around us. We have to keep up the competition with the other House. The point of my intervention is that we need to examine the potential for agreement with other member states and the extent of existing flexibility in order to maximise potential improvements. What can be wrong with seeking potential improvements in the European Union, and seeking them soon?

I begin by congratulating the Government on their detailed examination, sector by sector, of the balance of competences. We need a solid base of information and adequate consultation of those directly concerned by the balance of competences between the EU and the member states. This exercise is substantial. The latest programme I have seen for the spring and winter shows that departments are working on nine important sectors of policy such as environment and transport, and on some of the most controversial such as asylum and immigration. We need to establish as efficiently as possible what the balance of competences is for future discussion and possible negotiation within the EU. There has been some critical comment that other member states are not participating, but that is hardly surprising because the eurozone member states have important and immediate economic problems on their agenda. It does not change my view that the balance of competences exercise can throw up anomalies and identify unnecessary legislation that some member states in due course may wish to correct.

While looking for improvements, it is important not to exaggerate the impact of the European Union on all our daily lives, although such exaggeration is common. Whole areas of policy such as defence, education, housing and health are only marginally touched by EU action. Further, public opinion in the UK is often more critical of some EU action on smaller issues—“meddling”, to use the word of the anti-EU commentators—and that is fully understandable because there is scope for some cooling off, both of purely national secondary legislation and of some EU-derived secondary legislation. Recent yearly statistics provided by the Library showed that 10,662 pages of secondary legislation went through this House, of which 8.5% was derived from the European Communities Act and 91.5% was our own legislative mountain. The balance is striking and, of course, some EU legislation expires on a regular basis.

I come now to a second element of flexibility within the EU—enhanced co-operation between a limited number of member states. On balance, I think that this is positive, but we need to be very careful to protect our own position. This is what we should be doing in relation to the proposed financial transaction tax, on which the EU Select Committee has urged the Government to consider a legal challenge.

More generally, enhanced co-operation between a number of member states allows those member states to participate but it keeps the initiative in their own hands. Enhanced co-operation derives from the treaties—the treaty of Amsterdam and subject to some change subsequently—but it is clearly not a one-size-fits-all system and is inconsistent with the normal application of legislation to all member states. It sits alongside other actions, such as partial opt-outs of the passport-free area and so on. Since there is frequent criticism in the United Kingdom of EU one-size-fits-all legislation, I take the view that enhanced co-operation could sometimes be of potential value for the UK. Of course, everything depends on the conditions. Those conditions are that it must be a last resort and must not affect the competences, rights, obligations and interests of non-participating member states in particular. However, where it has been, or is likely to be, applied—for example, on patents—it could be of some economic value to us. It would enable an inventor to register a patent once instead of in multiple EU states, and in relation to pharmaceutical patents, which are of considerable economic importance, this would be in London.

We need to make the most of the balance of competences exercise and the potential of enhanced co-operation. We still have before us the decision to be taken by the UK Government on the application to the UK of a large raft of EU law in the area of justice and legal affairs, including the European arrest warrant. If, as I assume, the Government will wish, before the Lisbon treaty deadline next year, to opt out, it would be very helpful to know whether they do or do not believe that it would be desirable to seek to opt in on some individual measures. I think that we need to be clear about what the Government are likely to do on this matter—we are talking about a substantial amount of legislation.

I believe strongly that in the possible run-up to a referendum on the European Union it is very important that the British public have the best information rather than the repeated soundbites attributing all evils to the Union. Of course, the current economic problems in the eurozone are serious for us, as they are for the members themselves, and we should not hide criticism if it is justified. However, I hope that we will not lapse into generalised criticism of the finances of Union institutions and their administration, which has happened. In fact, year after year the Court of Auditors has given an unqualified clean bill of health to the EU’s account-keeping and the Commission’s administrative expenditure. It has continued to do so this year, most specifically in relation to administrative expenditure. The latest report of the Court of Auditors states that in its view revenue and payments were,

“free from material error and that the examined supervisory and control systems were effective”.

I always like to finish my speeches within the advisory time and I also like to finish them on a positive note, so that is what I shall do.

17:07

[Lord King of Bridgwater]

My Lords, I shall try to follow suit. This is the third gracious Speech of this Government. It is interesting to carry out a bit of textural comparison of the three Speeches that we have had to date and I take this opportunity to do so.

The first item that I want to refer to was not mentioned in 2010 but it was in 2012. Then, the gracious Speech said:

“The United Kingdom will assume the Presidency of the G8 in 2013: my Government will use this opportunity to promote international security”.

This year, I think that the agenda has got too crowded and international security, which I would not have thought was now an easier subject than it was a year ago, has been dropped. This year, the gracious Speech says:

“In assuming the presidency of the G8, my Government will promote economic growth, support free trade, tackle tax evasion, encourage greater transparency and accountability while continuing to make progress in tackling climate change”.

The second item to appear in each of the Queen’s Speeches deals with Afghanistan. In 2010, it said:

“My Government will work with the Afghan Government, Pakistan and international partners for lasting security and stability in Afghanistan”.

Two years later, it said:

“My Government will work to support a secure and stable Afghanistan”.

This year, it said:

“My Government will … support … the opening of a peace process in Afghanistan”.

In this regard, I support what the noble Lord, Lord Ashdown, said about interpreters. In particular, I would say that this may not be the only time that we find ourselves in a foreign place where we have an urgent need of local people who speak the language and can help our people. We know, sadly, that the Taliban is not backward in its programme of targeted assassinations, which it has been carrying out for some time, and it would be dishonourable if we did not recognise the contribution that the interpreters have made. It is their judgment. It would be wonderful if they decided to stay and contribute to the ongoing success which we hope there will be in Afghanistan, but it must be their decision. I agree with what the noble Lord said on that.

The third item of interest is that we did not say anything in 2010 about the Middle East situation apart from the peace process, but in 2012 we did. We said:

“In the Middle East and North Africa, my Government will support the extension of political and economic freedom in countries in transition”.

This year we are hanging on to that. We are going to,

“support countries in transition in the Middle East and North Africa”.

My question is: in transition to what? The Minister and my noble friend have referred to the Somalia conference and to the efforts being made there, and I accept that there might also have been some developments in Yemen. However, consider the situation in Libya this year—not only recent events but statements made even in the past week and the serious problems developing there—compared with last year.

In Egypt, senior members of the present Egyptian Government are talking about the possibility of a total collapse of its economy and the problems that that could pose. Were that to happen, the only stable force in Egypt would be the army, and what might that lead to? It is a serious situation. It is also deeply disappointing against all the hopes that one had of what might develop.

On top of all that there is the question of Syria. I shall avoid echoing my agreement too much but I agree with the point made by the noble Lord and by a fellow Somerset man, the right reverend Prelate the Bishop of Bath and Wells. I am not in favour of lifting the arms embargo: that seems exactly the wrong gesture. I agree with the noble Lord, Lord Triesman, who referred to the use of soft power. I shall say a word about that because I think that it is a much more helpful approach.

Prospects have certainly deteriorated. One of the consequences of the eviction of President Gaddafi and the change in Libya was the departure of a huge number of mercenaries with some fairly sophisticated kit which is now causing chaos in Mali and the neighbouring territories. Some noble Lords may have heard the statement yesterday by the charmingly named President Goodluck Jonathan that some of the more northern parts of Nigeria are now outside government control. We face some really serious situations.

It is against that background that I turn to what our contribution might be. I listened to the noble and gallant Lord, Lord Craig, with whom I worked closely a number of times when we had rather more substantial resources than are currently available, and I worry now about our capabilities. As for the opportunities now for intervention, we have certainly learnt some lessons about not getting involved in long-term, enduring conflicts.

I made my maiden speech in your Lordships’ House in 2001 when the subject of the debate was Afghanistan. We are now in our 12th year in that country and I hope to goodness that we stick to our plan for withdrawal. However, I have to say that I think it will be an extremely difficult and challenging undertaking. Some of the answers to the questions we have about what our resources will be like going forward will depend partly on how successful we are at extracting some of the very substantial equipment that we currently have in Afghanistan.

There is a general recognition that intervention policy, given our resources and its questionable value in certain areas, is now much less attractive or realistic. Let us consider our own military situation, with the recent PAC report suggesting that there are gaps in our capabilities, whether it be in Sea Kings or in transport aircraft—the noble Lord, Lord West, referred to the seven-year gap in our carrier capability. We face some serious problems in our currently limited capability. Given that difficult situation and the challenge referred to by the noble and gallant Lord, Lord Craig, we have to consider whether we really can get reservists to fill the gap on quite a different scale of commitment than we have ever had before. The jury is still very much out on that.

It is against that background that I turn to the question of soft power and the need to mobilise the resource of the diplomatic skills of other countries with which we may not normally deal. As has been said, the Russians are important in this. They have a keen interest in the Shia and Sunni conflicts that are arising and the difficulties that they face in all the “-stans”. There is a common interest and I hope that any approaches to the Russians will lead to some progress, because these areas pose great dangers to them. I was also most interested to see the invitation of the Chinese Government to Mr Netanyahu and President Mahmoud Abbas to see whether they can make some contribution to breaking the logjam in that area.

We are dealing with a very dangerous world at a time when it is in a serious economic fix and we do not have the resources we need. We are facing a population explosion, mass unemployment in a number of areas, and issues of climate change. The rise of Islamic fundamentalism poses a challenge to the world. If I end on one note it will be to echo the right reverend Prelate the Bishop of Bath and Wells when he said in his contribution that a determined effort should be made to try to rally moderate religious forces. The danger otherwise is that the Shia-Sunni conflict, along with the spread of jihadism and fundamentalism in the dangerous climate that we have at present, will make the next gracious Speech even more challenging than the one that we face at the moment.

17:17

[Lord Reid of Cardowan]

My Lords, I begin by paying tribute to the young men and women of our Armed Forces who, day in and day out, protect us and our families, our country and our national interests, often risking life and limb and sometimes making the ultimate sacrifice. We owe all of them a deep debt of gratitude for what they do.

When I ask myself what is the chief characteristic of the modern world, it is difficult to escape the conclusion that it is, as the noble Lord, Lord Howell, said earlier, its networked nature. What also strikes me is that it is the predominance of this country in global networks that has led to the United Kingdom becoming known as a great power. It came about originally through exploration, then through the domination of our naval networks around the world, and then through the domination of the financial sector because of the networked nature of international finance. I want to spend a few moments talking about something that receives little attention, but I think it should because it is the central characteristic of today’s networked world, and that is cyberspace. I do this in the full belief that it is essential not only for our growth and our pre-eminence, but for our national security and our defence. I declare my registered interests in the academic and private sectors in this subject.

Cyberspace is an environment characterised by its breadth—it is transnational, across over 192 countries. It is deep, because it diffuses power downwards, now to nearly 4 billion people who have never been able to gain information, to influence or to communicate before. It is ubiquitous and now runs through politics, economics, finance and our social networks, as well as many other aspects of life. It is truly the first environment made by men and women. It is not just an amalgam of technologies anymore or a means of communication, it is an environment like the land, sea, air and space. That has enormous consequences for us in terms of our national security. It means that we now have a fifth domain of warfare potential as well as a source of great opportunity. That makes us very vulnerable if we are not alert to it, both in concept and in practice. Of course, cyberspace has been an amazing gateway of opportunity for billions in the world, but it has also seen an equal growth in virus and malware development; from the first malware inserted by floppy disk back in 1981 to the myriad threats we now see. I will not rehearse them to this House but they are extremely sophisticated.

Suffice it to say that three years ago, when I chose to raise the subject in my maiden speech, the pursuit of the study of cyberspace was regarded as a rather iconoclastic occupation of mine. We now hear of malware attacks every day, on big names such as Microsoft, Apple, Lockheed Martin, ThyssenKrupp and so on. It might astonish your Lordships to know that it is much more widespread than just those headline names. Last year, 93% of companies in the United Kingdom with more than 250 staff suffered a cyberattack on their systems. It is not just the quantity—we now face an increasingly sophisticated array of persistent attacks, sometimes lasting months or years. They are targeted, adaptive and dynamic attacks that can change as they hit the defences that have been installed for them. They can involve compromise of the supply chain and the storage of vulnerabilities—reconnaissance, if you like—in order to probe weaknesses for future use. All this is going on at the moment and that vulnerability will increase as we move to consumer technology in our workplaces: smartphones and so on, the movement to the cloud, and the “Internet of Things”, from road charging to pacemakers. All that will become more and more vulnerable.

Why does all this vulnerability from the network world matter to defence and national security? It is because our critical national infrastructure is now more vulnerable than ever before. Software systems and industrial operating systems will protect our water supplies, supply our energy distribution and generation, land our planes, run our trains, heat our homes and underpin our hospitals. They will become the infrastructure on which our lives, livelihood and morale depends. Why use an expensive platform such as a nuclear submarine to launch an expensive weapon such as an intercontinental ballistic missile when we have that platform in all our pockets and in an iPad in most of our bags?

All of them now allow the possibility of enormous damage, as can be seen through the operation of the Stuxnet virus, which, unknown to the Iranian authorities, was effectively running—or mis-running—the centrifuges that were meant to produce their enriched uranium. All that, every passing day, should alert us. I have just learnt today that there has been another wave of attacks on major US corporations, specifically aimed at energy supplies. That is the critical national infrastructure vulnerability that we face. Of course, there has been some response from the Government, for which I give them credit: £650 million has been allocated to cyber, admittedly over three years; there is now a national cybersecurity strategy; research continues at GCHQ; there is improved assistance to the private sector and sharing; and the CPNI, which protects our national infrastructure, has been trying to influence standards. The MoD has played its part: it has set up the Cyber Security Operations Centre and enhanced co-operation with GCHQ.

I welcome all of this but huge challenges and questions remain, especially in the working out of concepts, capabilities, understanding and operations. The idea of active defence is very popular. One anonymous American general, who must be very glad he remains anonymous, said that if the US was hit with a cyberattack, “We will stick a nuke down their smokestack”. That illustrates the absolute ignorance of the nature of cyber. Attribution is a major problem. It is difficult to know the culprits. There is no missile heading for you where you can retrace the route that it has taken. There are legal prohibitions on accessing computer networks without authorisation. There is a patchwork of international laws. There are normative, legal and diplomatic obstacles. There are “what ifs”. What if you pursued an attacker and encountered behind that attacker a foreign Government? What if an obscure digital trail leads to an unrelated system or it has been disguised within a hospital, as some artillery pieces have been in asymmetric warfare in the past?

Our concepts really need to be thought through. In defence, I am afraid that our experience has not helped us because the wars and conflicts in which we have been engaged have been bloody and dangerous, but they have been asymmetric. Our conventional systems on sea, in the air and on land, all of which are now based on software, have never really been tested. I warn against complacency in this area.

As I reach my conclusion, there is one point where I would criticise the Government. Historically, our intelligence services and police have depended for counterterrorism and anti-crime activity in defending the people of this country on the ability to match the technology of our enemies, particularly in communications. This capability desperately needs updating. For the third year running, the Government have equivocated and postponed. Their fear of the Deputy Prime Minister, Mr Clegg, appears to be greater than their fear of the consequences of not acting in updating our intelligence-gathering capacity to include Skype, the internet and texts. God forbid that a terrorist attack should be launched that would have been prevented if we had updated it. God help the Government if that should happen because I know from experience just how dependent we were on that capacity to save the lives of 2,500 people only six years ago in the liquid bomb plot.

I congratulate the Government on what they have done. I hope that they will go further in a number of areas. Above all, I hope that they will remember where I started: the pre-eminence of the United Kingdom over the past few centuries has depended on our dominance of a network world, whether it was exploration, the naval lanes or the financial networks of the world. If we do not capture such a pre-eminence and domination in cyber as a trusted centre of it, I am afraid that we will continue on a very long road of gradual—and perhaps not so gradual—decline.

17:28

[Lord Maclennan of Rogart]

My Lords, in opening this debate, my noble friend well set out the objectives of the Government in defence, foreign policy and overseas aid, but I have to say that the Queen’s Speech is remarkably deficient in indicating how these objectives are to be followed. What the noble Lord, Lord Triesman, described as “minor housekeeping” considerations in respect of the European Union scarcely reflect the importance of our integration with the European Union if we are to attain the goals that my noble friend set out. The time seems ripe to consider a new approach to the reform of the European Union, to ensure not only that we speak with a united voice but that we enjoy the support of the 28 member countries—as there will be when Croatia joins—and their populations in pursuing common objectives. There are different stages of development in all these European countries, but our overriding foreign affairs and defence goals are broadly the same. We are all affected by the threats of international terrorism; we are all affected by the growth of the world’s population; we are all affected by climate change; and we are all affected by extremist religious groups penetrating our society—that can be dealt with effectively only as a reflection of international threats.

I want to spend just a few moments considering how best to take forward this process of integration. One of the reasons why we are seeing a backlash against the European Union, not only in our country but in countries that have been committed from the beginning, is that we are not building up a transnational democracy within the European Union; we are instead aspiring towards executive federalism, and that does not engage the sympathy or support of the man on the street. Consequently, we have to address the democratic deficit in the European Union to enable it to be even more effective than it has been. It has been immensely effective in pacifying Europe, but it has not been so effective in bringing pressure to bear on those countries that have abandoned the civil objectives expressed within the European Union treaties. For example, nothing effective has been done about the progressive move to the right, towards a kind of neo-fascism, in Hungary, despite the fact that we have substantial financial influence on what is happening in that country.

We should not await a treaty suddenly being produced after a German election in the autumn, saying, “Do this; do that”. There will be 28 countries at that time. If the newly elected Federal Chancellor believes that he or she can lay down the law because of his or her power within the eurozone, there will be a great reaction against it in many countries. We should work towards a system of improvement that draws in the public. I served on the Convention on the Future of Europe as an alternate member. Although that constitutional change was rejected in polls in France and the Netherlands, that approach has merit. It can engage civic society and parties across countries and Governments, and ensure a genuine dialogue. That dialogue is not likely to follow or be present in a weekend Council of the European Union. The Heads of Government rarely get together for more than two or three days at a time. How could they possibly produce answers to all the questions causing such disquiet across the Union? How could they possibly go through a detailed constitutional proposal or a list of the concerns that need to be addressed?

I recommend that we, in association with other member countries of the European Union, now engage in a discussion about the modes of change and recognise that we cannot make that change overnight. We have to take our people with us. I fear that Heads of Government are likely to want to clutch to themselves the full responsibility for changes that come about, but that is not the wise way to strengthen a transnational democracy. I hope that the future of Europe will not be bounced on this or any other country in the European Union. We have an immense possibility to influence global governance if we speak with one voice, with some 500 million people and the strongest economic collectivity. That is the way: coming together to recognise how we can influence trade and all those issues bedevilling our development.

17:37

[Lord Ramsbotham]

My Lords, in noting the antics in the other place following the non-inclusion in the gracious Speech of a possible referendum on Europe, I am confident that they will not be repeated in this House if my contribution is devoted to the surprising absence of another issue. Before I come to that, as a vice-chairman of the Chagos Islands all-party group I agree with everything that will be said by the noble Baroness, Lady Whitaker, on the Chagossian return. As a former soldier, I express my surprise at the words in the Speech that,

“my Government ... will support ... the opening of a peace process in Afghanistan”.—[Official Report, 8/5/13; col. 3.]

That made me wonder what the Government think our Armed Forces have been doing in that troubled country since 2001. On the subject of Afghanistan, I associate myself completely with the sentiments of the noble Lord, Lord Ashdown, about interpreters.

However, the omission that most surprised me was the future of our nuclear deterrent, bearing in mind the alleged imminent publication of the Government’s Trident alternatives study. It is true that the noble Baroness, Lady Warsi, when summing up my debate on nuclear disarmament on 24 January, told the House that the purpose of that study was to help the Liberal Democrats make the case for alternatives to the current continuous-at-sea deterrent, but I submit that far from merely being a matter of internal coalition politics, the question of whether a weapon system of the potency of Trident is the minimum credible deterrent that the nation requires to maintain ought to be discussed and debated in both Houses. That debate needs to be wide-ranging because of the number of questions about the ability of a system designed to meet yesterday’s criteria to satisfy those of today and tomorrow.

The need for such a debate was confirmed by a recent exchange of letters in the Times following the statement by the Prime Minister on 3 April that, in his judgment, North Korea’s unveiling of a long-range ballistic missile, with a nuclear warhead that it claimed could reach the whole of the United States, affected the whole of Europe, making it foolish to leave Britain defenceless against a continuous and growing nuclear threat. The very mention of the alleged threat from that North Korean missile reminded me of the 45-minute nonsense over Iraqi weapons of mass destruction.

Immediately, General Sir Hugh Beach, a former Master-General of the Ordnance, wrote that no country on earth was less vulnerable to North Korean nuclear blackmail than the United Kingdom, and that, like it or not, the Trident missile, in British hands but supplied by America, was unusable without American support. His arguments were summarily dismissed by the noble Lord, Lord West of Spithead, on the grounds that the independence of our continuous-at-sea deterrent was not just technical but absolute, and that it would be reckless to abandon our ultimate insurance against threats that cannot be predicted from countries yet to be identified.

That prompted my noble and gallant friend, Lord Bramall, to write that the arguments of the noble Lord, Lord West, reminded him of the senior general who, after World War 1, said that there would always be a place for the horse on the battlefield, particularly if wellbred. Although the nuclear deterrent served both sides well in the Cold War, the reality today is that it does not, and cannot, deter any credible threats likely to be faced by this or any other European country; nor, in a highly globalised and interlocking world, could a weapon with the destructive power of Trident conceivably be used, even in retribution. For us, he said, nuclear weapons are superfluous and now redundant, and the sooner a Trident replacement is removed from the Treasury’s overload, the better.

My final quotations from that exchange are from two other retired admirals, with whom I fully agree. Vice-Admiral Jungius suggested that,

“whether or not the UK should continue to have a nuclear deterrent is primarily a political decision”.

Rear-Admiral Middleton wrote that,

“in the next few years a combination of smart delivery systems … together with cyberwarfare programmes ... will be able to provide a national deterrent that is demonstrable, effective, selective, non-lethal and cheap”.

In other words, the cost of our nuclear deterrent should not be borne by the defence budget, and our present deterrent is not only unusable but at best obsolescent when set against emerging technologies.

Two other aspects must be considered when determining whether a weapon system with the potency of Trident is the most appropriate minimum credible deterrent. The first is cyber, which presents a far greater threat to the economic, political and social life of a country than Trident, suggesting that cyberdefence should be at the top of any national defence priority list, and, to be credible, any proposed deterrent must be cyberproof, putting a question mark against Trident, as the noble Lord, Lord Reid, has advised. Secondly, not least on moral grounds, account must be taken of the devastating effects of the use of nuclear weapons on our climate.

All that is in the context of two other climates, both of which must be considered by those responsible for reaching a conclusion on an issue of such long-term national importance. The first is the continued efforts to achieve international multilateral disarmament, in line with President Obama’s commitment to ultimate zero. There is no time to discuss the present state of negotiations on the Nuclear Non-Proliferation Treaty, the Strategic Arms Reduction Treaty, the Comprehensive Nuclear Test Ban Treaty, the Fissile Material Cut-Off Treaty, or the continually frustrated attempts to establish a weapons of mass destruction free-zone in the Middle East. Although I am glad that we are contributing to these negotiations, I fear that questions arising from our continued reliance on Cold War logic have unintended consequences on the credibility of that contribution.

First, does our proposed replacement of one unusable system, designed to take out Moscow by another with the same capability, increase or reduce our right to prevent other countries from advancing their nuclear ambitions? Secondly, does not the presumption that war was deterred and peace maintained during the Cold War by uncertainty over whether either side would use their nuclear weapons suggest that if the same logic was applied to the Middle East, war would be better deterred and peace better maintained by allowing Iran to develop a nuclear weapon to balance Israel’s?

Finally, of course, there is the current economic climate. Here I remind the House of the two definitions of affordability: can you afford something, or can you afford to give up what you have to give up in order to afford something? I submit that the latter must be applied ruthlessly when considering conventional shortfalls such as those mentioned by my noble and gallant friend Lord Craig and the noble Lord, Lord West, and when considering whether we can afford to buy more well bred nuclear horses, unsuitable for use on post-Cold War battlefields.

Inevitably, in eight minutes, one can only scratch the surface of an issue as important as this. Having expressed my surprise that this was not included in the gracious Speech, I sincerely hope that the Government will make that omission good by allowing noble Lords time to prepare and make their contributions to a full debate, in government time, after the publication of the Trident alternatives study.

17:45

[Lord Naseby]

My Lords, my noble friend Lord Howell was so right to raise the question of the Commonwealth, particularly with the forthcoming conference in Colombo of the heads of state. Sri Lanka is a proud founder member of the Commonwealth. After nearly 30 years of civil war, it seems absolutely appropriate that the members of the Commonwealth should go to Colombo and see that country. I certainly know that His Royal Highness the Prince of Wales and the Duchess of Cornwall will have an enormously warm welcome from the people of Sri Lanka.

I place on record my thanks to the present Prime Minister of the United Kingdom for taking the lead in going to Colombo. He is only the second Prime Minister to do so. The late Mrs Thatcher went in 1984, soon after what was probably the worst experience of Sri Lanka since independence, which followed on from the riots in 1983 when six soldiers were killed in Jaffna. Frankly, the Government of the time there reacted too slowly to those riots and many Tamils suffered as a result. Mrs Thatcher made a brave decision to go, and in going she helped that country to move forward and heal some of those wounds. This meeting comes, in my judgment, at a good time. Terrorism has been defeated and our Prime Minister and the other leaders can see for themselves what has happened in the three years following the war. I think many good things have happened, but they should go and have a look for themselves.

It is not news that one of the key issues in Sri Lanka is human rights. I thank the Commonwealth Secretary-General and his staff for taking the initiative in leading a review of what is happening on the ground. There are two signals that I take heart from. First, a large number of Tamils left Sri Lanka through those years of the great difficulty of the civil war. More recently, more than 1,000 have come back from Australia of their own free will and, to the best of my knowledge, only one has had any difficulty. Several hundred have come back from the UK and substantial numbers from New Zealand. The one country where not too many have come back from is Canada. My analysis is that that is basically because a number of Tamils have become MPs in Canada and are deeply involved in Canadian politics. I hope that Canada will think again and come to Colombo.

The second good point that has happened is that President Rajapaksa is the first leader since independence to insist that it must be a trilingual country. There is very real progress in the Civil Service, in teaching, in the schools and in the road signs of a trilingual approach, which brings the Tamil community into becoming real members of Sri Lanka.

I have just received a letter from the Parliamentary Under-Secretary of State Alistair Burt, and I place on record my thanks to him for his diligence, time and patience and the even-handedness with which he has juggled the varying points of view that have been presented to him on Sri Lanka. His letter raised three points that the Foreign Secretary is going to look at when he goes to Colombo. First, he highlights free and fair provincial council elections in the north on 7 September. The portents are quite good. The electoral register has only just been compiled by Tamil teachers, which is healthy. I pray that those elections go reasonably smoothly. Secondly, he highlights the freedom of the press. We all believe that is important, but we have to reflect a little on Leveson. There is no Leveson problem, or certainly nothing of the scale of Leveson, in Sri Lanka. As someone who knows much of south Asia, in my judgment there is far more freedom of the press in Sri Lanka than in Malaysia or Singapore.

Thirdly, and this is perhaps one of the key points, the Foreign Secretary says he is going to go to the north. I hope by that he means Jaffna. It is the place to go. It is the key part of the Tamil community in the north. I am told he is going to meet civil society, NGOs and political representatives. That is a good start, but he must not exclude the military, in particular the CO at Palali base. Palali defends the northern shores of Sri Lanka and—I am sorry to say this, but it is true—within Tamil Nadu, the Indian state adjacent to Sri Lanka, it appears that the LTTE—the Tamil Tigers—is still welcome today As your Lordships may know, Tamil Nadu is a key component of the coalition in India, which perhaps accounts for some of India’s recent reactions. If it were me, I would also meet the religious leaders—you cannot divorce religion as it is far more powerful there than it is here—the government agent, which is the equivalent of our county councillor, and business leaders, because we want to get that economy going.

The letter also says that the Foreign Secretary is going to meet NGOs. There are some wonderful NGOs across the world. I highlight the International Red Cross as one of the most wonderful. I went out at the time of the tsunami. Much good work was done by many NGOs, but I am afraid that there was also much less good work done by some NGOs. Tragically, some containers came from the UK containing arms for the Tamil Tigers. There are all sorts of NGOs. Some do great work, some do less great work.

Finally, I look at Sri Lankans’ understanding of what happens elsewhere in the world. They look with some amazement at the USA leading this rights issue in the light of Guantanamo Bay, people being kidnapped for 10 years and shootings on campuses. Many in Sri Lanka say, “There’s nothing like that in Sri Lanka. We may have our difficulties and abuses, but there is nothing like that”.

My message is to all leaders in the Commonwealth and, in particular, to the Prime Minister and the Foreign Secretary. It is that they should go and see for themselves but should bear in mind that there was nearly 30 years of war. Near the end of World War 2, Herbert Morrison said:

“One of the lessons I hope they”—

that is, people—

“will have learned is that there are no shorts cut and no easy solutions. Nothing is made better by pronouncing curses on the older generation or the Government, or any other cheap and easy scapegoat”.

What was true of the UK in 1945 is equally true in Sri Lanka today after more than 27 years of civil war.

17:54

[Lord McConnell of Glenscorrodale]

My Lords, having led a coalition Government in Scotland for six years, I understand the difficulties of reaching agreement on a legislative programme and on other aspects of a programme for government and then expressing them clearly, but there are disappointments in Her Majesty’s gracious Speech that we need to highlight in this debate.

Through the vehicle of the speech, the Government rightly identify as key priorities for their strategy the need for Britain to compete and succeed in the world; our role in helping with conflict prevention; and some of the key building blocks of development to assist with conflict prevention in different parts of the world. In some of their specific actions not just now but over the past three years, they have been taking the right steps. I strongly welcome the initiative on sexual violence in countries affected by conflict and the objective set out for the G8 in Northern Ireland in June, particularly on tax transparency and trade. We should all welcome the fact that the Government have spent 0.75% of gross national income on overseas development assistance. The FCO’s prioritisation of countries with emerging markets is a helpful, but overdue, reprioritisation of the work of our overseas posts. I also welcome the fact that through the National Security Council the Government have continued and developed the comprehensive approach of the previous Government in bringing together the work of the Ministry of Defence, the Foreign and Commonwealth Office and the Department for International Development.

While the Government have the overall aspiration and some of the specifics right, there is a huge gap in the middle that is damaging the strategy working towards those aspirations, and I shall highlight three aspects of it. The first is immigration. We will compete and succeed in the world only if we are open, flexible and welcoming. The Government’s rhetoric on immigration is damaging Britain’s international standing and our ability to be entrepreneurial and competitive. The way in which the visa regime is being applied by the FCO is deeply damaging to our relationships, particularly in the Commonwealth, about which the noble Lord, Lord Howell, spoke so eloquently about earlier. The way in which the visa regime is being used to turn away or delay the entry into this country of people who have a perfectly legitimate right to be here and to contribute to our debates, discussions and economic progress is causing us all sorts of difficulties, and I urge the Government to address that issue and look again at their rhetoric on immigration.

The second area in which the gracious Speech was disappointing was the absence of legislation to commit to 0.7% of gross national income. This target is now agreed by all parties—the previous Government and the current Government—and was implemented by the current Government. That decision has been welcomed following the recent Budget. The way to take the politics out of it and to take the quantity of aid out of the debate to start to focus on the quality of overseas development assistance is to enshrine that in law, take the party politics out of the issue for ever and ensure that we focus on the way in which we spend the money rather than on how much we spend. Both coalition parties promised to do so, and they have let down the country and our allies abroad by backing off from that commitment.

In relation to aid, the way in which someone somewhere in the Government, behind the scenes, perhaps a special adviser or somebody of that sort, is hinting occasionally in the press that there will be some use of aid money to assist with security initiatives is also deeply damaging to the credibility we have built up on overseas development assistance. I know what the rules are, and Ministers and officials know what the rules are. The Government will not be using aid money for security purposes. Occasionally to drop hints to voices in the press who are reluctant to see our commitment to international aid implemented is damaging here, because it causes uncertainty, and damaging abroad, because it affects our credibility, and whoever is doing it should stop.

The third area I want to identify is that of the European Union. There can be no doubt that the three big challenges facing the United Kingdom and our strategy for international relations—covering defence, the Foreign and Commonwealth Office and the Department for International Development—are the impact of the global economy, our relationship with it and ability to succeed and compete within it, and the framework that exists following the crash of 2008. There are also changes in climate and population, and other aspects of our environment and quality of life in every continent. There are different changes in different places, but they will grow, not diminish, over the next two decades. Thirdly, there are the security issues which have been mentioned by other noble Lords, and their relationship with development and they key objective of trying to secure greater stabilisation in fragile states through development and security measures.

There can be no argument that multilateral action is vital to tackle all of those three challenges. Our engagement, not just in the United Nations but in the Commonwealth and the European Union, is absolutely central to our participation in tackling these challenges at an international level. There might be a debate on the economic benefits or otherwise of being in the European Union. There are views held passionately on either side of that debate in this Chamber; no doubt we will hear them tonight. In addition to the points made earlier about a trade agreement with the United States, some of those who are most concerned about our attitude to the European Union are the Japanese and other economic partners elsewhere, who see Britain’s participation in the EU as vital for us and for the European Union itself.

While some noble Lords in this Chamber and others elsewhere are passionately opposed to the idea of shared sovereignty in principle, the one way in which we can ensure that the world we leave behind us for future generations is more secure, more economically successful, prosperous, fairer and more able to adapt to change in climate, population and other aspects of our environment, is to have a strong Britain taking part in a strong European Union, and for that European Union to be contributing to those debates at the international level. It is absolutely time for those of us who believe in that strongly to speak up for those future generations, take action now and stop this damaging move into a referendum that may well conclude by damaging this country and also global affairs.

18:02

[Lord Alderdice]

My Lords, for the first couple of years of the coalition Government I was much encouraged and, indeed, enthused, by the change in the approach to foreign policy. It seemed that a number of problems had arisen. I listened carefully to the noble Lord, Lord Triesman—who is not in his place—and was struck by the fact that he was commending the Government for the improved investment in and development of the Foreign and Commonwealth Office; that there was a move away from some of the unfortunate approaches that had been taken during the George W Bush period; and that there were problems with the Government’s addressing of the European question. I found myself agreeing with him, and then thinking, “Wait a minute. The previous Government eviscerated the Foreign and Commonwealth Office that is now being repaired”. It was not just George W Bush during his period as the President, but Blair and Brown who were also in government. Our many problems with Europe were not fundamentally addressed during that time.

I will touch on Europe; on cyberspace, which was spoken about so eloquently by the noble Lord, Lord Reid, it not being the first time he has focused our minds on it; and on the situation in the Middle East, to which I devote a good deal of my thinking.

I have always been a convinced and committed European. I have based a lot of my own thinking and work in areas of conflict on the model of conflict resolution that Europe demonstrates. However, those of us who are pro-Europeans must recognise what my noble friend Lord Maclennan said about the inadequacy of European democracy. Many of us wanted to see the development of a Europe of the regions. Instead of that, we have not just a Europe of nation states but a Europe of national Governments, each playing off against the other. We must understand, too, that this inadequacy is not just in its democratic structures but in its failure to deliver on many of the things that could have been delivered in economic terms.

It is not possible to speak about Europe being a massive success these days. The worry is that we are a long way from getting through the problem. There is much talk about networks working together but, when it comes to the possibility of the European network being used in foreign affairs, where have we been in dealing with the Middle East? It is, I regret to say, still impossible to get our German colleagues to say anything that might be viewed as critical of any policy of the Israeli Government. It has proved almost impossible to get clear decisions from all Governments together on any serious foreign policy issue of any contention.

Of course it would be wonderful if we could work together on defence, but what has actually happened? Europe has basked under the umbrella of American protection since the Second World War. Not one of the countries, much less our own, is giving the resource necessary for Europe to defend itself. Again, in Germany, it is not yet possible to have a military parade in public, never mind to make commitments to serious overseas engagement. This is the reality of Europe. Unless those of us who are pro-Europe are able to convince the rest of our colleagues in Europe to take seriously what needs to be done on democratisation, on solving the economic problems, on having a common foreign and security policy and on being able to invest enough in defence, our people will not be persuaded that Europe is a viable entity. That would be an ultimate tragedy. That is the network that is closest to where we live.

The noble Lord, Lord Howell of Guildford, mentioned the network of the Commonwealth. Like him, I regret that there was not more focus on it in the gracious Speech. It is another important network for us.

As I said, the noble Lord, Lord Reid, referred to the fifth space that has now opened. There is land, sea, air, space and, now, for the first time, one created by mankind: cyberspace. Much work and investment has gone into it. However, there are two areas which we have yet to address properly. One is international law in cyberspace. The noble Lord, Lord Reid, mentioned the Stuxnet virus. Had there been an equivalent attack by one country on another in any of the other four spaces, it would have been a declaration of war. However, within cyberspace, we are unclear on the rules of international law. Some time soon, we need to be. Otherwise there will be a tragedy of the kind that the noble Lord referred to: there will be some kind of attack without real attribution being clear. This is an area on which I hope my noble friend will be able to tell me the Foreign and Commonwealth Office is focusing some serious international legal attention.

The second area is the psychology of working in cyberspace in war. In the other four spaces, in the main we understand how people function. However, all of us know that when people start sending e-mails to each other, tweeting and texting, they suddenly behave in a different way: less inhibited, less thoughtful and less understanding of the consequences of their actions in many cases. I am yet to see sufficient attention being paid to research in the psychology of cyberwar and cyberterrorism; I declare an interest as someone who has given time academically and in business to this area. I hope that my noble friend will be able to tell me that additional resource will be devoted to research into understanding how people function in this fifth space.

Finally, I turn to the Middle East, which is the issue that frightens me the most. During the last election, people used to say, “I agree with Nick”. In this case, I agree with Paddy, because I am extremely frightened by what is happening in the Middle East. Much of what has been done from outside has created only more trouble. The notion that we are now starting to supply weapons that are massively surplus to any possible requirement in the region because we want to engage in some kind of influence is total foolishness. Again, I come to the network. We will not solve the Israel-Palestine problem by engaging just those two players. It will have to be done regionally. The Arab peace initiative has not had the attention from this country, from the United States or from others externally. It has been retabled, and it needs to be responded to. We will never resolve the problems with Cyprus, north and south, unless we understand the need for regional engagement. The more that energy becomes available there, the more it will either become an instrument for co-operation or a basis for new conflicts there.

Syria is no longer only a Syrian problem. I went out to Lebanon a few weeks ago, just to see how things were going, and I came back very fearful because that border is already entirely breached. Hezbollah is attacking back into villages which have its faithful within Syria and which are under attack from others, and atrocities are being committed within Lebanon itself. Jordan is being deeply destabilised by the number of refugees, and now we have attacks in Iraq and Turkey. It is almost already too late. When Russia sets down its requirements, it is also saying to the United States, “Stop acting like a cowboy, prepared to do things without United Nations agreements. This is a line you should not cross”. For that reason, as well as for many others, I desperately hope that when we come to debate the Queen’s Speech next year we will not do so in the context of some kind of catastrophic conflagration that has developed from the situation in the Middle East, because we are perilously close to it.

18:11

[Baroness Whitaker]

My Lords, I am very grateful to the noble Lord, Lord Ramsbotham, for his trailer for my remarks, and for his support.

The gracious Speech promises to,

“ensure the security, good governance and development of the Overseas Territories”.—[Official Report, 8/4/13; col. 3.]

This is sorely needed for the Chagos Islands, the inhabitants of which were exiled from their homeland by the British Government in the late 1960s and early 1970s. I am indebted to our former high commissioner to Mauritius, Mr David Snoxell, for his advice.

It is not as if anyone now thinks this exile was an example of good governance. On 23 April 2009 the then shadow Foreign Minister, Keith Simpson, said:

“There is no doubt that there is a moral imperative”,

and that,

“I suspect … the all-party view”,

is that,

“the rights of the Chagossian people should be recognised, and that there should at the very least be a timetable for the return of those people at least to the outer islands”.—[Official Report, Commons, 23/4/09; col. 176WH.]

In a letter to a member of the public on 23 March 2010 the shortly to be Foreign Secretary William Hague said:

“I can assure you that if elected to serve as the next British government we will work to ensure a fair settlement of this long-standing dispute”.

I will briefly remind noble Lords of how this tragic fate overtook the Chagossians. In 1965 our Government detached the Chagos Archipelago from Mauritius in order to form a separate British Indian Ocean Territory, in defiance of four UN resolutions. They reclassified the inhabitants as contract workers, made the largest, most southerly, island, Diego Garcia, available to the United States for use as a military base, and gradually removed the Chagossians from all the islands, eventually depositing them in Mauritius and the Seychelles during 1971 to 1973. Some came to Britain from 2001.

Now, fewer than 700 of the original islanders remain. The United States base on Diego Garcia is 140 miles away from the outer islands, to which some would like to return. When the Government of the United States were asked by our Foreign Office publicly to affirm, as was reported in a WikiLeaks cable from the United States embassy in London, that they required the whole of the British Indian Ocean Territory for defence purposes, they did not do so. The State Department has indicated informally to a member of the Chagos Islands (British Indian Ocean Territory) All-Party Parliamentary Group, of which I also am a member, that if asked it will review the security implications of a limited return. Our Law Lords described official letters that claimed that there was a defence risk as “fanciful” and “highly imaginative”.

In 2014 the agreement with the United States will come up for renewal. I suggest that this gives an excellent opportunity for exploring whether a small number of Chagossian people could return to the outer islands. It would seem to have no security or defence implications for the base on Diego Garcia. I am assured that many will not want to return, but all want their right to do so restored, and some will want only to visit their homeland and come away.

Would this be a burden to the British taxpayer? The Foreign Office set up a feasibility study in 2001, which claimed that resettlement was not feasible and anyway was very expensive. The infeasibility argument has been discredited by one of its own consultants and by others, most recently in a report by Professor Paul Kench of Auckland University. As for the cost, it would be idle to pretend that justice would not carry some. However, the United Kingdom would not have to bear the whole burden of restoring the tiny infrastructure. The European Union high representative has confirmed to Charles Tannock MEP that funds are available. The UNDP may have capacity and it would surely be right for the United States, Mauritius and the Commonwealth to do their bit.

What of the marine protected area, with its full no-take ban on fishing—except, as it happens, around the waters of Diego Garcia, where recreational fishing can be practised—which was hastily declared by David Miliband, as Foreign Secretary, just before the last election? It is unlike most other MPAs, for instance around the Galapagos Islands, where the people who live there help to maintain it.

There is worldwide support for a marine protected area that takes account of the interests of the Chagossians and Mauritius. However, it should have been properly conceived, with a defined role for inhabitants. As it stands, there is only one vessel to patrol the ban over 640,000 square kilometres, and I have seen photographs of very recent substantial illegal fishing operating within the MPA.

The MPA was proclaimed without taking account of the views of the Chagossians, who applied for judicial review in the high court, or of Mauritius, which has brought a case under the Permanent Court of Arbitration for breach of the Convention on the Law of the Sea. There is much work to be done to make the MPA what it ought to be so that everyone can wholeheartedly support it.

In the time available I have simply tried to pinpoint the chief aspects of a manifest and agreed injustice of a fundamental kind. This hardly matches the human rights standards of the Commonwealth charter, which we signed only last March. However, it is very good news that the Foreign Secretary has shown indications of a positive attitude to righting these wrongs in his statement following the end of the human rights case in Strasbourg, and that he is reviewing the policy on resettlement. I hope that the Minister can say how the Government will now proceed and when Parliament will be consulted about the review of that policy.

18:18

[Lord Cameron of Dillington]

My Lords, I am aware that these debates are often used by Members of this House to get some deadly serious issues off their chests, and I am no exception. However, I am also aware that an endless string of deadly serious chest-clearing issues is pretty deadly.

In my intervention, which is addressed to our Department for International Development, I would like to start with a poem—in fact the first and last verses of a poem. It is called “The Seed Shop”, by Muriel Stuart:

“Here in a quiet and dusty room they lie,

Faded as crumbled stone or shifting sand,

Forlorn as ashes, shrivelled, scentless, dry—

Meadows and gardens running through my hand …

Here in their safe and simple house of death,

Sealed in their shells a million roses leap;

Here I can blow a garden with my breath,

And in my hand a forest lies asleep”.

I hope noble Lords captured some of the poet’s wonder from that short snippet; I believe that no farmer is immune to it.

I have another quote, this time from Dr Joe DeVries of the Alliance for a Green Revolution in Africa. He wrote:

“I can still recall vividly the days of war in Mozambique when we were distributing ‘emergency seed’ to farmers affected by the fighting there. The farmers would line up for hours, often in the rains of the new planting season, some of them clothed in tatters … But the gleam in their eyes when they walked away with the seed packs we were distributing always betrayed them ... For the moment, there was hope. They had seed. They would plant. New hope for better life would sprout along with the green shoots”.

Today things are better, but, to paraphrase Dr DeVries, he still sees that sparkle in the eyes of African farmers when they buy the dramatically improved and high-yielding seed that genuinely can now change lives. Modern biotechnology has enabled the development of crop varieties that can withstand attacks of pests, viruses and even weeds, as well as being nutritionally enhanced with nutrients vital for women and for the proper development of their children.

We in the UK have helped to develop these seeds. The reputation of our research establishments such as Rothamsted, John Innes and James Hutton are second to none. Furthermore, the partnerships of many of our institutions with similar bodies in China, Brazil and throughout Africa are worth millions, not only in contracts gained and public/private partnerships, but also in aid and influence, and the UK being a recognisable part of the gleam, just mentioned, in the eyes of smallholder farmers.

I know that the Government are working hard at this agenda and I hope that their soon to be published agritech strategy will help to raise our game even higher in the eyes of the international community, not to mention of the African farmer. However, we must not stop there. The end game of DfID must be to help developing countries become self-sufficient and eventually not need our aid. To quote Justine Greening, we must help,

“create economies that stand on their own two feet”.

Taking that goal to its logical conclusion in Africa, this economic transformation has to start with agriculture. It accounts for 32% of Africa’s GDP and nearly 65% of its employment, and few people now believe that it will be possible to promote prosperity there without a significant focus on agricultural transformation.

This agricultural transformation is not only an economic agenda of huge importance but an agenda of women’s rights. More than two-thirds of all women in Africa are employed in agriculture and they produce nearly 90% of the food. To empower agriculture is to empower women and, with the right training, it enables them to provide for the nutritional needs of their families and earn money to provide education for their children. It is truly a transformational agenda.

However, it would seem that as yet the UK does not get it. President Obama gets it; his Feed the Future programme and last year’s USA-led New Alliance show that. Ireland seems to get it; I was in Dublin last month and heard more than one Cabinet Minister speak up for the transformational ability of agriculture. From my conversations in Brussels with Commissioner Piebalgs, I would say that he, too, seems to get it. However, when did we last hear a DfID Minister or senior official talk about the transformational importance of agriculture? The ONE organisation claims that DfID’s agricultural spend is only 2.18% of its overall ODA. At one point it was as high as 18%. Even if the figure is wrong—I admit that it is hard to trace what is agricultural and what is not—it is certainly one of the lowest percentages of all donor countries.

All that is going to change, is it not? I am an eternal optimist. With the Prime Minister welcoming the IF campaign, which launches on 8 Junes this year, with the Government’s focus on nutrition at this year’s G8—it would be a travesty if we were not to talk about locally grown nutrition—and with the African Union calling for 2014 to be the year of agriculture, this is surely an ideal moment for the UK to commit itself to greatly increased funding to help CAADP and even individual countries to develop and deliver their national agriculture investment plans.

To return to my starting point, this is not only a seed agenda. I wish it were that simple, but there is no such silver bullet. It is, as I said, about women’s rights, including their ability to own land and borrow money. It is about roads, crop storage and markets and market chains. Above all it is about knowledge: knowledge not only about how to plant, fertilise and protect modern seeds and how to enrich and improve the soil, but about the benefits of co-operation and how to buy, sell and promote entrepreneurial flair throughout the food chain. An agricultural reformation is not only about growing food; it runs from plough to plate and includes investment in inputs, machinery, storage, processing, transport and retailing, to name but a few. This is an exciting agenda, but above all it is a transformational agenda, and I would hate the UK to get left behind.

18:25

[Lord Lawson of Blaby]

My Lords, there seems to be a growing interest in the question of whether this country should remain within the European Union, so if noble Lords will forgive me I will confine my remarks to that important issue. In that context I start by welcoming very warmly the Prime Minister’s pledge in the important Bloomberg speech he gave a little while back to provide the people of this country with an “in or out” referendum in 2017. I am also glad that a draft Bill was published today to give effect to this pledge. I gather, incidentally, that it is likely that an amendment may be moved in another place today, regretting the absence of any mention of this in the gracious Speech.

I would not presume—and neither, I am sure, would any noble Lord—to give advice to my right honourable and honourable friends in that place. However, if I may venture a personal opinion, what is needed is a thorough debate about the momentous political and economic issues involved. This will not be assisted by unnecessary and pointless votes. The Prime Minister’s position, as I understand it, is that the EU as presently constituted is not acceptable to the United Kingdom, and perhaps not acceptable on a wider basis. Therefore he will seek to renegotiate the terms of our membership to make it acceptable before holding his promised referendum if he is in a position to do so.

One does not serve as a Minister of the Crown for more than a decade, as I did, without getting to know the realities of the European Union pretty well. In light of that knowledge I do not believe that it will be possible for the Prime Minister to secure the fundamental changes that he seeks. It will certainly not be possible if it is thought that at the end of the day he will, following in the footsteps of his predecessor, Harold Wilson, recommend an “in” vote however inconsequential his renegotiation proves to be.

We are severely limited for time in this debate so I cannot touch on all the important issues involved, many of which I sought to address in an article in the Times last week, which some noble Lords may have had time to read. I will therefore focus on what inevitably is the central concern in all this, which is the fundamental change in the European Union following the coming into being of monetary union and the eurozone, with the United Kingdom rightly outside it. It is no use living in the past and deluding ourselves; that was a watershed and a Rubicon. Judged as an economic venture, monetary union is clearly and predictably a disaster, condemning the eurozone to long-term economic underperformance, which of course none of us wishes to see, as it lurches from crisis to crisis—not to mention the political discord that we see today in Europe as a result.

Of course, it is not an economic venture but a political venture, seen as leading inexorably to the creation of a full-blooded political union and a new superstate, the United States of Europe. This is the only context in which European monetary union can make any sense whatever, and it is not for us. Nor is there any future for a United Kingdom outside the political union, increasingly marginalised but still shackled to it. That, au fond, to use the language of the country in which I live, is why, unless monetary union is abandoned, we must leave the European Union.

Finally, I am puzzled, not upset, that this view is frequently characterised by the media as being rightwing. Of course, it used to be the view of the party opposite, and I have never considered the Labour Party to be a particularly rightwing outfit. My mind at this time goes back to a small private dinner party in Chelsea some 50 years ago, where the guest of honour was the then leader of the Labour Party and leader of the Opposition, Hugh Gaitskell. It was only a very few weeks before his sadly premature death. The discussion turned, not surprisingly, to the then topical question of whether we should join what was then known as the Common Market. I was in favour, but Hugh Gaitskell was passionately against it. His argument was that we should not be part of a European political union, a United States of Europe. At that time, when we had our argument 50 years ago, I insisted that that was not the issue before us and that the European Economic Community, to give it its correct name at that time, was something quite different. That may have been true then, but the issue today, after the watershed and after the Rubicon has been crossed, is clearly that identified by Hugh Gaitskell 50 years ago, and I find myself standing now pretty close to where he stood then.

18:32

[Lord Lee of Trafford]

My Lords, nobody disputes that many of the defence procurement overruns in cost and time terms have been a national embarrassment and that substantial improvements and changes are imperative. However, whether a GOCO, a government-owned and private sector-operated solution, is the answer, is highly questionable.

I have nothing against GOCOs in principle. Indeed, when I was a Defence Minister in the 1980s, I was heavily involved in the Bill to contractualise the dockyards, taking it through the Commons. But that was for a specific operation; what we are now talking about is a whole new order of magnitude—£14 billion of procurement with, currently, 16,000 civil servants. What the Government are effectively saying is that we cannot put our own house in order; it is just too big a job for us. That is a very substantial admission of failure.

No other country outsources its defence procurement through a GOCO route. Can you imagine a large plc such as Shell or Tesco or even BAE Systems putting out their purchasing to a third party? Of course, defence procurement is complex, and technological changes are rapid, but with the right systems, disciplines and quality of management, it surely could be substantially improved in-house. Indeed, the MoD is clearly still unsure about the GOCO option itself. We are now apparently in what is called the final assessment phase, scheduled to last 12 months, comparing the public sector option, DE&S plus, with the GOCO alternative. Could my noble friend tell us what the plus is, in DE&S plus? What is the change here from the current situation?

According to a recent article in the Financial Times, the US-based contractor, Jacobs Engineering, has been appointed by the MoD’s delivery partner to help to develop the business model for the handover. How was Jacobs selected, and at what cost? Indeed, how many MoD personnel are spending the majority of their time on the GOCO option?

A GOCO option would add a fourth player into this already complex arena. First, we have the customer, our Armed Forces. Secondly, we have a body, let us call it MoD Purchase, which will presumably place the order with the GOCO and, ultimately, check the procurement on completion. Thirdly, there is the GOCO itself, and, fourthly, the defence contractor with which the contract is placed. That is four bodies rather than the current three.

I turn to the GOCO itself. I have a number of questions for my noble friend and I fully understand if he is not able to answer them tonight and has to write to me. How will the GOCO operator be selected? Will overseas countries, particularly American-controlled companies, be considered? Will companies that are already involved with the MoD be considered, and will companies that already work or provide services for defence contractors be eligible? In today’s Financial Times, the chief executive of Babcock has ruled that company out. Perhaps our old friends, G4S, are champing at the bit.

What will the basis of the financial arrangements be between MoD and the GOCO? Will the GOCO receive a block of money and a list of spending requirements and be told to get on with it, or will the arrangement be fee-based, perhaps with an incentive? How many of the 16,000 MoD personnel will the GOCO be required to take on? What about those left? Will the GOCO be free in future to hire and fire as it sees fit? How long will the contract between the MoD and the GOCO operate, and in what circumstances can the operator be terminated? What restrictions will be placed on the GOCO’s freedom to operate—specifically, as between buying off the shelf and sustaining our national strategic capabilities?

How will collaborative programmes with our allies, joint procurement, be handled in the GOCO world? What cognisance will the GOCO take of regional employment issues and the need to encourage SMEs rather than support our major national contractors? What are the attitudes of our allies to our going down the GOCO route? An article in the Financial Times on 7 May headed “MoD outsourcing plan stokes US anxiety” refers to the United States’ concern that shared information between the two forces could be at risk. We are told that the UK and US have agreed to,

“establish a joint, bilateral, inter-agency team to explore”,

the new situation. Could my noble friend confirm this? Is it currently at work?

With regard to single-source contracts, where there is no competition for whatever reason, what would the interface be between the new Single Source Regulations Office to be implemented in 2014-15 and the GOCO? Will the GOCO’s remuneration be varied, dependent on whether a particular contract is single source or competed for? As I understand it, to facilitate the original shipbuilding merger between BAE and Vospers, a programme of future naval work was guaranteed. How long does that run on for, and how will it work if the GOCO is established? How will cancellations of major programmes be dealt with between MoD and the GOCO, such as the Nimrod disaster or the carrier aircraft fiasco—initially STOVL, then cats and traps, then back to STOVL? To put it bluntly, who pays? Who picks up the pieces?

On the delicate area of the revolving door, with MoD personnel and members of the Armed Forces being recruited by defence contractors it is already difficult enough to police. What is the future position going to be in the new GOCO world? Will any restrictions be insisted on?

We now come to the very important area of national emergencies and urgent operational requirements. Our defence contractors have a very proud record of responding to our nation’s needs, as we saw in the Falklands, Afghanistan and, more recently, in Libya, with financial considerations being put to one side to be sorted later. Will our Armed Forces and the MoD be free to go direct to defence contractors in such circumstances, or will they have to go through the laborious route of the GOCO?

Finally, given the inevitability of disputes between the MoD and the GOCO, with changes of specification, extras, variations in quantities and so on, will it not be necessary to establish some form of independent arbitration—perhaps an Office of Defence Procurement Arbitration—to handle disputed issues?

Outsourcing MoD activities has provided very lucrative revenue streams for the private sector. A GOCO is a major opportunity for the private sector but, I would suggest, a huge risk for the taxpayer and our Armed Forces. Many questions need to be answered. My noble friend Lord Levene, who was Chief of Defence Procurement and, of course, drove the defence reform agenda, has considerable misgivings—I spoke to him yesterday—and so do I.

18:39

[Baroness Cox]

My Lords, I wish to offer first-hand accounts of causes of deep concern in three countries I have visited this year. The first concerns Burma where there are welcome reforms but many problems remain, including severe violations of human rights affecting ethnic and religious minorities such as the predominantly Muslim Rohingya, the Christian Kachin and the Buddhist Shan peoples.

The Rohingya people have suffered horrifying waves of violence, displacing at least 130,000, with hundreds, perhaps thousands, of deaths. Moreover, security forces have often failed to prevent the killing of civilians and destruction of Muslim homes, shops and other property. Those forced to flee to camps are living in conditions of appalling squalor, many dying from disease without medical care. May I ask the Minister what steps Her Majesty’s Government have taken to press the Burmese Government to ensure that security forces act swiftly to protect vulnerable communities, arrest and prosecute perpetrators of violence, prevent the spread of anti-Muslim propaganda and hate speech, and end impunity? May I also ask whether Her Majesty’s Government have raised with the Burmese Government the denial of citizenship for the Rohingya people, who, despite living in Burma for generations, exist as a stateless people?

I turn briefly to the plight of the Kachin people. In June 2011, the Burmese Army broke a long-standing ceasefire with Kachin state and fighting continues. I visited Kachin state in February and saw the dire predicament of at least 100,000 people displaced from their homes by military offensives and human rights violations by the Burmese Army, with killing of civilians, arbitrary arrests, torture, rape and destruction of villages. At least 66 churches have been destroyed in the past year. May I ask what efforts Her Majesty’s Government are making to press the Burmese Government to end these military offensives and engage in a meaningful peace process with the Kachin and other ethnic nationalities?

Persistent violations of ceasefires also continue in Shan state, where the Burmese army continues to attack Shan people and to commit grave human rights abuses. May I ask whether Her Majesty’s Government will press the Burmese Government to ensure unhindered access for humanitarian assistance to all conflict-affected states, and what humanitarian assistance Her Majesty’s Government are providing? As the monsoon season approaches, the current dire humanitarian situation could become catastrophic.

The ethnic national peoples of Burma fear that the warm welcome given by the international community to the reforms will result in massive investment, which the Burmese Government will use for more exploitation of the resource-rich lands of the ethnic national peoples, with further expropriation and displacement. As one of the Shan leaders said to us with deep concern, “When the lights went on in Rangoon, all the world rushed there and no one stopped to see us in the darkness”. Given the decision to lift EU sanctions on Burma, may I ask the Minister what measures the EU, including the United Kingdom, will use to pressure the Burmese Government to stop these human rights violations, ensure genuine constitutional change, which includes a just political settlement for the ethnic nationalities, and bring an end to these decades of war and oppression?

I turn briefly to the new republics of South Sudan and Sudan, having been twice this year to South Sudan and once to the conflict-afflicted areas of Southern Kordofan and Blue Nile in Sudan. South Sudan needs massive assistance to recover from the war inflicted by the former north, in which 2 million people perished, 4 million were displaced and virtually all the infrastructure was destroyed. I had the privilege of being invited to the Independence Day celebrations in June 2011, where the joy of freedom was tangibly exuberant, alongside the sober challenges confronting the new nation. As President Salva Kiir said, it was not a case of rebuilding, as there was nothing left to rebuild.

The Government and the peoples of South Sudan deserve congratulations on their achievements in the 22 months since independence. Of course, there are massive problems, including inevitable internal conflicts in a post-conflict tribal society, with historic tribal tensions exacerbated by unemployment, especially of demobilised soldiers, a generation of children who have not been able to attend school because of constant aerial bombardment, some of the worst health statistics in the world, with only 15% of the population receiving immunisation, and a desperate need for roads in a country which, at independence, had only a few kilometres of tarmac road. The problems are exacerbated by the Republic of Sudan’s aggressive policies, including military offensives into South Sudan and sponsoring South Sudanese insurgents and criminal groups. There is also the problem of continuing violence along the border, especially in the disputed Abyei region.

However, I am delighted to see many signs of progress in South Sudan, including establishment of institutions of civil society, programmes for reconciliation between conflict-prone tribal factions and investment by major international companies. Can the Minister say what specific initiatives Her Majesty’s Government are taking to promote UK investment in South Sudan, as it is essential for the development of this vulnerable new nation trying to develop as a true democracy in a very challenging part of Africa?

Finally, I turn to the Republic of Sudan, still under the rule of General al-Bashir, who has been indicted by the International Criminal Court, together with two of his senior colleagues, one of whom he has imposed in a ruling position in southern Kordofan. Al-Bashir has declared his intention to turn the Republic of Sudan into a unified Arabic, Islamic nation. He is pursuing his racist policy of ethnically cleansing the African peoples from Blue Nile state and the Nuba Mountains in Southern Kordofan. Earlier this year, I witnessed constant aerial bombardment of innocent civilians, forcing half a million to flee their homes and hide in snake-infested caves, under trees or in river banks. Many have died of starvation as they cannot grow or harvest crops and a quarter of a million have had to flee to overcrowded camps in South Sudan. I and other noble Lords have repeatedly asked what pressure Her Majesty’s Government have put on the Government of Sudan to desist from this aerial bombardment of civilians which has caused such a massive toll of death and injury, and I do so again this evening.

Her Majesty’s Government claim that they wish to continue to “talk” to Khartoum. However, as many of us have emphasised, Khartoum continues to kill while it talks. There are also numerous other causes for concern in Sudan, including expulsion of many NGOs, attacks on Christian churches and schools and serious infringements of fundamental human rights, including freedom of the press. These deserve a separate debate. May I ask the Minister what Her Majesty’s Government are doing to bring an end to this culture of impunity, which allows, inter alia, mass killings and injury on that huge scale? May I also ask whether Her Majesty’s Government might consider assisting indigenous organisations in those conflict-affected areas, especially in the Nuba Mountains and Blue Nile, with the provision of life-saving food and medical supplies for civilians currently dying from starvation and disease? In one village we visited in Blue Nile, 450 people had died from starvation and those still alive had had to flee into the bush from aerial bombardment targeting their village. The people of Sudan and South Sudan look to the British Government as having a special responsibility to help, not only because of our historic responsibility but our continuing duty as part of the three-nation group responsible for monitoring and assisting with the implementation of the comprehensive peace agreement.

Our friends in Burma, Sudan and South Sudan passionately hope that we will hear more substantive promises from the Minister—if not tonight, in due course—to bring encouragement to people who have suffered too much for too long at the hands of Governments who continue to kill and inflict suffering on so many of their own people in Burma and Sudan with virtual impunity.

18:48

[The Lord Bishop of Ripon and Leeds]

My Lords, one of the privileges of a debate of this sort in your Lordships’ House is hearing speeches from those with a deep personal knowledge and understanding of places in the world they have visited. The speech of the noble Baroness, Lady Cox, was a good example of that.

I particularly associate myself with the magisterial speech of the noble Lord, Lord Naseby, on Sri Lanka, with which the diocese of Ripon and Leeds has connections, through the worldwide church, with the dioceses of Colombo and Kurunagala. Like him, I emphasise the need to work with the people of that land both in securing the peace which has been achieved and in ensuring human rights in that country.

The other thing that I have done this afternoon is go with a number of other noble Lords to the Christian Aid presentation in Westminster Hall. In the middle of Christian Aid Week, it is particularly crucial that the Government join millions of our fellow citizens in affirming our desire to see an end to hunger in our world. I welcome the leadership that the Prime Minister has shown to date, particularly in challenging tax evasion, which has a particularly detrimental effect on the poorest countries of the world.

In that context, I remain disturbed by the absence in the gracious Speech of any reference to the target of 0.7% of gross national income being spent on international aid, and I was grateful to the noble Baroness, Lady Northover, for her firm statement on the importance of achieving that target for our country. However, we still lack any information on the intention to embed this in law. That commitment represents our concern for the poorest people in our world and is an important part of the determination of the still-wealthy nations to continue their support of those in most need. I associate myself with the words of the noble Lords, Lord Chidgey and Lord McConnell, in wanting to affirm clearly at this point the millennium development goals and the need to move beyond them in seeking to put an end to hunger in our world.

There have been various assurances over the past 12 months that a Bill incorporating the 0.7% commitment is written and ready to be presented to Parliament when the business managers can find time for it. I am aware that a fortnight ago a Bill was lost in the other place under pressure of business after the Government had said that it was almost identical to what we would have tabled. I look forward to the Minister’s assurance that not only is it the aim of this Government to ensure that the 0.7% target continues to be met but that the search is still on to find parliamentary time for such a Bill. It may be that the noble Lord who is to reply can table it in this House because the promise is beginning to look somewhat thin unless it is now accompanied by action.

There has been much important debate on the proper objective of aid to other countries, and I welcome the desire to concentrate aid on where it can do most good in appeasing hunger. In particular, it is crucial that aid goes to those Governments who need the administrative power to collect tax and to close those loopholes that enable multinational corporations to send their profits offshore. However, that should not extend to military action, and it would help me greatly if the Minister can commit himself to the OECD requirement that aid is judged as such only when it is administered with the promotion of the economic development and welfare of developing countries as its main objective.

That brings me to the UK’s presidency of the G8. I am encouraged by the commitment in the gracious Speech to “tackle tax evasion” and to “encourage”—although I would have welcomed a stronger word—“greater transparency and accountability”. The key challenge is to ensure that any tax agreement concluded by the G8 benefits poor countries and enables them to access information about company ownership and assets held in tax havens. In particular, can the Minister tell us whether any tax haven has yet signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters? It would be a powerful example of leadership if the UK-linked tax havens were to sign the convention in the lead-up to the G8.

The Government must be aware that the IF campaign’s pressure, to which a number of noble Lords have referred, to end tax-dodging by individuals and major companies has rightly touched a nerve with the public in our country. The Government need to bring a beneficial ownership action plan to the G8 and encourage other countries to do the same, whereby we can know who ultimately benefits from the profits of companies and ensure that taxes are paid in the countries where those profits are made.

Finally, I welcome the commitment to a hunger summit prior to the G8 meeting. This concentrates attention on where it primarily belongs—on the appalling truth that the world has the capacity to grow enough food for its population and yet NGOs, Governments and individuals still need to provide for those who starve. That is the greatest scandal of all in our world economy.

18:55

[Baroness Wilcox]

My Lords, the gracious Speech includes a defence Bill and I speak to encourage the Minister of Defence to hold the Government’s position on recruitment and training of 16 to 18 year-olds to the Armed Forces, because siren voices are complaining that Army recruitment of under-18s is a waste of money. Other voices say that the Government should reconsider allowing 16 year-olds to enlist.

Here I should declare my interests. I am a member of the Defence Study Group of your Lordships’ House; I am from Plymouth, the home of the Navy and Marine Commandos, in which my family has served for generations; and I have employed many young people in fish processing units—not the most happy places to be, but useful—while they wait to go into the Army. It used to be a great tradition that they would go off and return within a year or so in uniform, for us all to gaze at them and glory at how much they had changed and improved.

In these difficult years of recession, many young people find it very difficult to find a job at all, and the social cost of the unemployed young is huge—youth on the loose, bored, losing confidence, depressed, prey to gangs in some places and obesity in others, in single-parenthood, dependent on government payouts, and open to temptations of all sorts. This is not the way to start a life and represents money wasted. The earlier that we can offer opportunities to these young people the better. We can give them greater confidence and pride by setting them on the road that perhaps their fathers or mothers took before them to apprenticeships, BTEC qualifications, training, and personal and team success. It may even be that they can learn to drive a tank.

The cost of recruiting these 16 to 18 year-olds is not wasted. In the year 2012-13, the Army identified that just 12% of under-18s leave before completion of their training, as against 14% of those over 18 who do so. It is the youngest entrant soldiers who stay as soldiers for the longest. It is they who become the best NCOs, and they are a great investment for us. This House is witness to the many years served here by our Staff Superintendent, Peter Horsfall. He was a member of the Coldstream Guards at the age of 16. Many of our Doorkeepers have backgrounds as boy soldiers and apprentices, and many of them became NCOs. They tell me that it is the NCOs who actually run the Army.

I turn to my second point, on allowing 16 year-olds to enlist. The Government believe that their policies on under-18s in service are robust and comply with national and international law. They have taken steps to bestow special safeguards on young people below the age of 18, under the Optional Protocol to the Convention on the Rights of the Child on the Involvement of Children in Armed Conflict. It continues to be the rule that they do not go to the front line to fight until they have reached the age of 18. Of course, a comprehensive welfare system is in place for all service personnel. I hope that the Minister—a soldier himself—will continue to support this Government’s route.

Finally, the voices “against” are against preparing the next generation for circumstances which are not abstract but real. Those same voices would, I suspect, leap to praise the youngster—the 16 year-old—who has performed well during a local crisis such as a flood, a fire or an accident. So often that youngster is a scout or a guide but is also an Army cadet, a Navy cadet, an Air Force cadet, or a boy or girl soldier.

19:00

[Lord Hunt of Chesterton]

My Lords, one of the features of the Queen’s Speech was that it implied that there would be less legislation. I believe that that is excellent because—this has nothing to do with party politics—it enables this House to spend more time considering big issues, including monitoring the programmes of government.

The policies and actions of the Foreign and Commonwealth Office and DfID are very important in helping the UK’s commercial and industrial interests, as well as ensuring that the UK works with other nations to deal with the global problems of climate change, the threat to the environment, global pandemics, and prospective food and water shortages, some of which were referred to by the retiring Chief Scientific Adviser, Sir John Beddington, and the noble Lord, Lord Chidgey. The role of science in this area of the Foreign and Commonwealth Office and defence was mentioned by the noble Lord, Lord Reid.

I declare interests as a professor, as a director of a small company and as a member of GLOBE, and I want to touch on that. With its limited numbers, further reduced by this Government, could the Foreign Office be more effective in collaborating with other UK, UN and EU organisations? First, I want to compliment the Foreign and Commonwealth Office for its support for and collaboration with NGOs, one of which is GLOBE. This has had the remarkable effect of bringing together Ministers, civil servants, parliamentarians and now UN agencies to achieve, rather unexpectedly, general agreement about national legislation to deal with climate change. There has been some learning in this process but it has been effective, and I believe that there is, as it were, a general moral in that.

However, I should like to introduce a slightly more sour note in commenting that the FCO could be considerably more effective in working with other branches of government to promote UK interests and commercial interests. The United States embassies use US government agencies to promote US business in quite a forward and ruthless way, rather unlike our embassies. This is a point made by Americans and foreigners all around the world. We are very good at some of the broader political issues but, as I see it, often we are not so great at pushing for British interests. The Chancellor increased some funding for this purpose. We had a debate in the House of Lords but I believe that more can be done. One point is that UK government agencies could provide objective information about UK companies and products. Here, I have a vested interest, as I say. However, it is nothing like the kind of information provided by the United States, which has, for example, whole sections in its embassy in Beijing pushing US technology.

Some UK companies felt that there were great opportunities to develop products based on the UK’s success with the Olympic Games and our success in developing east London—something that the British Government wanted to happen. However, the funding being put forward by other countries for similar kinds of urban renewal projects makes it quite difficult for British companies to compete, as has been stated to me.

The United States also uses its technical and commercial colleagues as part of its delegations to meetings of the United Nations technical agencies. I used to represent the UK at the World Meteorological Organisation. We had civil servants; the Americans had a whole array of people. Every night, they would ring up the Department of State and would get information back. It was a very different operation. I believe that this is a significant problem and that the Foreign Office should do more in monitoring and promoting the use of the UK delegation to the United Nations, not only to be effective but to promote UK interests. In fact, some of the UK government agencies which are part of these delegations do not take it as seriously as they should. Indeed, a recent chief executive of a UK agency said, “I don’t regard this as part of my job at all”. The job description of the new Foreign Office chief scientific adviser did not even mention the United Nations or the UN agencies, which are enormously important for all these technical issues.

As the Government, through the United Nations department at the Foreign Office, are not able, or choose not to, give sufficient information about what is going on, if you really want to find out what is happening in this whole world of UN agencies and you are no longer an official, you can use, on either your BlackBerry or your iPhone, the extremely effective information provided by IID, an organisation in Canada. From that, for example, we can learn this week about what is happening in the Arctic Council. Last week, we could hear about what was happening in discussions on the Stockholm and other conventions. Surely, if the United Kingdom wants to promote itself as a country which is really on top of the use of the internet and communications, the Foreign Office should be at the forefront of informing at the very least parliamentarians but also, one would hope, the public about what it is doing.

Through a PQ, I had correspondence from the noble Baroness, Lady Warsi. Apparently this year is the International Year of Water Co-operation but no information is to be provided about the UK objectives and there is to be no report on what happens at the United Nations. Yet today I understand that the Prime Minister is talking at the United Nations about the importance of water. Therefore, we really need to do more.

Equally important in the role of UN agencies is their help in developing countries. I am sure that the late Lord Brett, who was a great advocate of the International Labour Organisation, would have been reassured to hear that the ILO played a very positive role in calls for trade union involvement and more consultation following the Dhaka disaster.

I should like to touch on Europe, which the Minister was very enthusiastic about. “Hear, hear” could be heard a lot as she made her speech. The Ministers in BIS are even more positive about the EU, and I particularly commend the enthusiasm of Mr Willetts in promoting the space industry. This involves not only software, in which the UK has often been very strong, but hardware, which leads to jobs. Of course, David Willetts has a constituency with a lot of factories in the space business, but it is a very important aspect.

We need our UK embassies and consulates to inform the rest of the world not only about the UK’s technology but about how we are working with the other countries of Europe. It is very interesting that last week in China the French Prime Minister spoke about the excellence of the Airbus. The wings of the Airbus are made in Britain. How often does the British Prime Minister talk about a European project in which the British and French are participating? Then the German Prime Minister might talk about Rolls-Royce, which has factories in Germany. This would be the development of a broader way of working. When you go to embassies and consulates, it is regrettable how little advocacy there is about the important role of the UK in working on the most advanced projects in Europe.

Finally, I should like to say—perhaps uniquely in this afternoon’s debate—that people have been talking about the UK as an important global player with networks and so on. However, surely we should be thinking beyond the framework of World War II and the Cold War. It is extraordinary that this little country, then with 2% of the world’s GDP and a population of 50 million, along with France should still have seats on the United Nations Security Council. Surely one seat should be for Europe with a population of 500 million, as referred to by the noble Lord, Lord Maclennan, and the other for India, which is soon to be the country with the largest population. This will not happen immediately but surely there should be the beginnings of a discussion about the future by Parliament, the United Nations associations and other foreign relations. We cannot carry on with this World War II framework.

19:09

[Lord Avebury]

My Lords, I warmly echo the remarks of the noble Baroness, Lady Whitaker, and the noble Lord, Lord Ramsbotham, on the right of the Chagossians to return to their homeland, from which they were ejected many years ago in one of the most shameful episodes in British colonial history. I also join her in welcoming the review by the Government of their Chagos policy, which I hope will lead to the removal of this blot on our reputation.

Up to this point the Government have had an excellent record on international development and I am proud, with my noble friend Lady Northover, that we hit the target of 0.7% of GNI this year, as promised in the coalition programme for government. However, as several noble Lords have said, the Bill to enshrine this commitment in law, which is also in the programme, is not in the gracious Speech and it has been reported that the Prime Minister has dropped it entirely. That cannot be because of the pressure of other legislation, so it looks as though the Tories are laying the ground for cuts in spending after 2016 if they get the opportunity. I am sure that Liberal Democrats will note this breach of the coalition agreement.

Another Bill that has disappeared from the list is the one on the standard packaging of cigarettes. This would have been consistent with the proposed European directive to strengthen the WHO’s Framework Convention on Tobacco Control, which was supported by your Lordships’ European Union Committee and strongly backed by Cancer Research UK but which is desirable independently as a means of deterring people from taking up smoking, as the director of health and well-being at Public Health England has advised. The opposition comes from the tobacco manufacturers and from Nigel Farage, who is apparently unconcerned that almost a quarter of a million young people between the ages of 11 and 15 take up smoking each year. One assumes that the Bill was axed in the panic over UKIP’s threat to the Tory vote even before the local elections.

Mr Cameron also pandered to the supposed dislike by the electorate of everything European in September last year by again attempting to placate the UKIPs and Tory crypto UKIPs when he announced during a visit to Brazil, rather than in the Commons, that the UK would opt out of some 130 EU pre-Lisbon justice and policing measures. The coalition agreement committed us to approaching legislation in the area of criminal justice on a case-by-case basis with a view to maximising our country’s security. There is no doubt whatever that European measures on corruption, drugs, pornography, terrorism, illegal migration, cyberattacks, organised crime and racism have enhanced our security, because these offences are all borderless.

Co-operation between law enforcement authorities across Europe is essential for investigations, the exchange of evidence and information and for the recovery of the proceeds of crime. We need institutions such as Europol and Eurojust to manage the links between the 27 member states, and we need the European arrest warrant to ensure that we do not get saddled with all the criminals in Europe. It is the height of folly to jeopardise all this as it is by no means certain that we can walk back into the measures that we like the day after leaving them.

We all agree that the European Union can be improved, but we do not improve our chances of contributing to that discussion by constantly threatening to leave it. What conceivable grounds are there for thinking that other member states would agree to renegotiate membership on more favourable terms for us—a point on which I agree with my noble friend Lord Lawson? There are more likely to be demands from other European countries for the annulment of the extraordinary rights that we already enjoy in the European Union.

Unsurprisingly, the word “Europe” does not appear anywhere in the gracious Speech, but there is no mention of the Commonwealth either, as several noble Lords have remarked. The Prime Minister and the Foreign Secretary are both attending the CHOGM in Sri Lanka in November, as are the heads of all the other member states so far except Canada, as the noble Lord, Lord Naseby, mentioned. The Australians say that it is better to stay engaged because of the extra leverage that it gives us in the run-up to CHOGM, but how has that been illustrated? Amnesty International describes the systematic attack on dissent, including the impeachment of the chief justice without due process, her replacement by a close associate of President Rajapaksa, the blocking of BBC broadcasts, the arbitrary detention and disappearance of hundreds of government opponents and the targeting and removal of journalists such as the chief editor of the Sunday Leader, Frederica Jansz, after she had been threatened by the Defence Secretary in a foul-mouthed diatribe.

If the Commonwealth does have the influence that Australia believes it has, will the Government suggest to Sri Lanka that it issues an open invitation to the UN Special Procedures so that their advice on human rights issues can be considered before the CHOGM?

How can the Commonwealth encourage Bangladesh to uphold the fundamental values of the recently adopted charter, including democracy, human rights, the rule of law, the separation of powers, freedom of expression, good governance, tolerance, respect and understanding and the role of civil society? In Bangladesh, political objectives are pursued on the streets instead of in Parliament, most recently when Islamist mobs rioted in downtown Dhaka at the beginning of May in support of a 13-point list of demands that included the execution of atheist bloggers, a law against blasphemy and restrictions on women at work. These objectives are clearly incompatible with the Commonwealth charter, but at the same time security forces used disproportionate force against the Islamists, causing many deaths, and the Government closed down two TV channels that were reporting the mayhem.

Previously, huge demonstrations and counter- demonstrations had erupted over the death sentence passed by the war crimes tribunal against a person for offences committed in the liberation war of 1971. Those proceedings were not conducted in accordance with the rule of law and are the source of violent divisions in Bangladeshi society.

There are also gratuitous attacks on members of religious and ethnic minorities, particularly the indigenous inhabitants of the Chittagong Hill Tracts. The Government have failed to implement the CHT accord of 1997, promised by Sheikh Hasina within the lifetime of this Parliament, and they no longer recognise the native inhabitants of the CHT as indigenous people. As co-chair of the international CHT Commission, I asked the Government to raise these matters in the Bangladesh universal periodic review, which has just taken place, and I would be grateful if the noble Lord who is to reply can tell me whether they did so.

Pakistan, too, in spite of the successful elections, warrants the attention of the Commonwealth. As the Commons International Development Committee says, it exhibits unstable politics, a large defence budget, historic levels of significant corruption, tax avoidance, and low levels of expenditure on education and health programmes, and its status is that of a middle-income country. Pakistan is the largest recipient of UK aid, but our aims of promoting peace and stability in the border areas, thus creating the conditions for achieving the MDGs there, have already failed. During the election, more than 100 candidates and election workers were murdered by Islamist terrorists. Over recent years there has been a crescendo of murders and massacres of religious minorities throughout Pakistan, which the international community cannot and must not ignore.

My noble friends Lord Ashdown and Lord King of Bridgwater both raised the issue of the global threat of Salafist terrorism against the Shia Muslim communities. This is nowhere more acute than in Pakistan. The movement is alternatively aimed at the creation of a universal caliphate based on a supposed model from the 7th century. Its activities will not be confined to Pakistan, Yemen, Somalia, Mali or Syria, and we ignore it at our peril. I regret that neither in the gracious Speech nor anywhere else in government policy do we see the prospect of a coherent strategy to combat this ideology.

19:18

[Lord Stirrup]

My Lords, the gracious Speech last week set out the Government’s intent to prevent conflict and reduce terrorism. These are ambitious aims to encapsulate in such a few words, especially given the kind of international turmoil that we currently see in so many parts of the world. So how are they to be achieved?

The conflict in Syria steals most of the headlines these days, and not without cause. The consequences for the Syrian people are tragic and the stresses on the wider region become ever more worrying, but what can external actors do to help address these issues? The first thing, perhaps, is to ensure that by their actions they do not make the situation even worse. We know little for sure about the Syrian opposition groups. We believe that some of them at least are pursuing an extremist agenda, and the noble Lord, Lord Ashdown of Norton-sub-Hamdon, has pointed out some of the other concerns about the nature of the conflict. The Assad regime is extremely unsavoury and we would certainly like to see something better in its place, but how content are we that this is actually achievable?

These are not new questions, but there is a natural concern that while we grapple with them, so far unsuccessfully, more people are dying and the humanitarian situation is growing steadily worse. I have sympathy with this concern, but it is important to remember that the issue in Syria is essentially political in nature and that any attempt to address it must itself be at root political. Employing military force in the region without a clear and achievable political objective would be a leap into the unknown and would certainly risk worsening the situation rather than improving it. We most certainly can and should be making every effort to contain the regional impact of the conflict. We see the consequences in Turkey, in Lebanon and, most worryingly of all, in Jordan. Sustaining and increasing our support for the latter country is perhaps one of the most useful things we can do in this crisis, at least in the immediate future.

Meanwhile, President Obama’s second term and a new Secretary of State present yet another window of opportunity for the Middle East peace process. The current regional turmoil makes progress on this issue more rather than less pressing. The experience of many weary years makes us naturally cautious about expecting too much, if anything at all, from the latest efforts in this regard. Nevertheless, unrelenting persistence is one of the most important prerequisites for dealing with the problem. As has been pointed out already, Israeli settlements are certainly a major obstacle, but treating them en masse is likely to make them a showstopper in any negotiations. Some of these settlements would almost certainly remain on the Israeli side of the line under any land swap deal, while others are much more controversial, and it is on these that negotiators should perhaps focus their efforts.

The Palestinians, for their part, will have to acknowledge that there can be no right of return. This presents all sorts of difficulties, but there are no easy parts to this puzzle. This is another issue on which negotiators should perhaps concentrate their efforts to find an acceptable formula. Most important of all, the peace process needs to focus on constituents within Israel and the West Bank. The leaders are important, but if they cannot deliver the key elements of their constituencies, they will be unable to make the concessions necessary for progress. It may be unrealistic to expect a resolution of the Palestinian issue in the near term, but just a degree of movement on these key points would go at least some way to relieving the air of stagnation and pessimism that seems so prevalent at the moment.

There are of course a great many other challenges for the UK on the international scene, and numerous potential threats to our interests. Other noble Lords have covered or will cover some of these, and time precludes me from touching on more of them today, but they exist and we must guard against them. If we are to do so, we shall need the appropriate resources, including adequately manned, equipped and trained Armed Forces. The Government’s plans for Future Force 2020 set out how that particular requirement is to be achieved. These plans, while constrained to a greater degree than I believe wise, are at least coherent, but when they were conceived during the strategic defence and security review in 2010, it was made clear that they depended on real-terms increases in the defence budget—and, I stress, in the entire budget, not just in the equipment programme—in each of the years after 2015: that is, beyond the period of the 2010 spending review from financial year 2015-16 onwards.

This is the basis on which the Ministry of Defence has conducted its planning over the past three years, but far from increasing the budget from 2015-16 the Government seem to be about to reduce it further, and the prospect for the succeeding years does not look bright. Some will say that the circumstances have changed and the economy is not where, in 2010, we all hoped it would be by now and therefore we have to tighten our belts further. They would say that defence cannot be protected from this further pressure. That may indeed be the Government’s judgment, but in announcing the outcome of the 2010 review in another place, the Prime Minister himself was clear that the plans for Future Force 2020 depend on the sort of budget increases that I have outlined.

One does not have to be a master logician to work out that the reverse must also be true: that without those rises, the Government’s plans for the Armed Forces will be unachievable. That appears to be the current situation. The Ministry of Defence is working to a plan that is not being funded appropriately and that will therefore fail. I should be grateful if the Minister could say in his winding up how his department intends to square this circle.

Finally, I feel that I, too, must say a word about the Afghan interpreters who contributed so much to our operations in their country and who now face such a fraught future. The Government have so far declined to put in place for them a scheme similar to the one that allowed endangered Iraqi interpreters to settle in the UK. I simply cannot understand this. I accept entirely the desirability of talented Afghans remaining in and contributing to the development of their country, and I welcome the introduction of incentives to persuade them to do so, but if they judge that the risk to themselves and their families outweighs the incentives to remain, surely we have a duty to provide them with a viable alternative. It is simply not good enough to say that they can apply for asylum like everybody else; they deserve far better from us than that.

The moral argument for treating these people as a special case is clear, but there is a practical one, too. As the noble Lord, Lord King of Bridgwater, noted, we shall certainly need high-quality interpreters in future crises. If we are to persuade people to work for us in such a capacity and in such circumstances, they will need to have some confidence in the long-term prospects for themselves and for their families. We need to be seen as a country that looks after those who serve it. That, I regret to say, is not how we are seen at the moment. The case for a change of course is overwhelming. The Government’s case for their current stance is, to my mind, wholly underwhelming.

19:27

[Lord Browne of Ladyton]

My Lords, I am pleased once again to follow the noble and gallant Lord, Lord Stirrup, in a debate in your Lordships’ House because it gives me an opportunity to commend his well-argued and characteristically clearly delivered speech. I sense from the response of noble Lords that the Minister would be well advised to heed the words of the noble and gallant Lord, as indeed I did every day that I was the Secretary of State for Defence when we served together in the MoD. I am also pleased because it gives me an opportunity, which I have not had so far, to congratulate the noble and gallant Lord on his elevation to Knight Companion of the Most Noble Order of the Garter. I remind noble Lords of my entry in the Register of Lords’ Interests, particularly my involvement in organisations associated with non-proliferation, arms control and disarmament issues.

On 6 and 7 May, the two days before the gracious Speech, I attended the ninth annual NATO Conference on Weapons of Mass Destruction, Arms Control, Disarmament and Non-proliferation in Split at the invitation of NATO and representing the European Leadership Network. There were over 100 participants in this conference, which has a very extensive agenda. Some 20 NATO countries were represented, as were four countries from the Middle East along with Japan, China, India and other nations across the world.

Chatham House rules apply to those discussions so I will not—even if I could in the short time available to me—share with noble Lords all of what was said. However, it was an extensive agenda, covering nuclear, biological, chemical and cyber threats. There was a significant discussion about the defeated ambition to have a conference on a weapons of mass destruction-free zone in the Middle East, and all aspects of proliferation were discussed. Many of the national delegations present had been at the preparatory committee of the NPT review in Geneva and had come from there. It was good to see that the Egyptians were at the conference in Split despite their leaving the NPT review disappointed that no date was fixed for a rearranged conference on weapons of mass destruction in the Middle East. The House will also be aware that the fourth P5 meeting to discuss the P5 obligations under Point 5 of the 64-point plan that came from the NPT review in 2010 and the P5 obligations under Article 5 of the NPT took place on the margins of the Geneva discussion, hosted by Russia.

I think there will be agreement on all sides of the House that these are important issues. In almost any hierarchy of threats, these issues would be high in anybody’s priorities and on the list of issues being discussed. As I have said before in your Lordships’ House, when representing a European organisation in that environment, when both the United States and Russia are represented, and if China is also in the room, you have to have pretty sharp elbows as a European to get into the discussion. The scale of their weapons capabilities is such that Europeans, even when aggregated, appear rather small. It was slightly disappointing and worrying that there was no Russian voice in these discussions and at the conference, for the first time to my knowledge.

What was even more disappointing from my perspective was that there was no official United Kingdom voice either. At the NATO discussion on weapons of mass destruction, we appeared to have no point to make. This is not the only recent example of our country not being represented at important discussions relating to the threats and challenges that the world faces. Recently, the Norwegians convened a meeting to discuss the humanitarian effects of weapons of mass destruction, particularly nuclear weapons, and we did not turn up. On that occasion, I think, it was out of solidarity with our P5 partners, none of which turned up to take part in that discussion, to my disappointment and that of many other countries of the world, and which I am sure your Lordships will share. Although it was no surprise to me, I share the disappointment of the noble Lord, Lord Ramsbotham, that these issues did not deserve one line in the gracious Speech.

As will be clear to every noble Lord in this debate in your Lordships’ House today, the range of this debate shows the extensive competition there is for that priority. Almost every noble Lord who has spoken has bemoaned the fact that something was not in the Queen’s Speech. Of course, not everything can be in it, and the range of challenges for priority are very obvious from the nature of this debate. However, it is also obvious that if Europe is to seize the opportunities of the future, it has to deal with the legacies of its past. That has been a significant part of the debate this afternoon and it will be into the evening.

Nowhere is that more evident than in defence and security issues. The blunt truth is that the security policies of the Euro-Atlantic region remain largely on Cold War autopilot, 20 years or more after the end of the Cold War. The Euro-Atlantic region is home to nine of the 14 states in the world that have nuclear weapons on their soil and 95% of the nuclear weapons that exist in the world. However, we seem always to want to talk about the “other”, instead of what is in our own neighbourhood. We are home to large strategic nuclear forces, many—indeed, thousands—of which are ready to be launched in minutes. Thankfully, that does not include the United Kingdom’s forces, but it does include Russian and American forces. Thousands of tactical weapons remain in Europe and a decades-old missile defence debate remains stuck in neutral. New security challenges associated with prompt-strike forces, cybersecurity and space remain contentious and inadequately addressed.

This legacy contributes to tensions and mistrust across the Euro-Atlantic region and needlessly drives up the risks and costs of national defence at a time of unprecedented austerity and tight national budgets. We must ask ourselves why, two decades after the Cold War ended, the United States, Russia, France, Germany, Italy, the United Kingdom and other European nations spend hundreds of billions of dollars, roubles, euros and pounds in response to these tensions while both local and national leaders face a growing list of fiscal demands and unmet needs. This is not just about guns versus butter, although that is a very attractive argument in the current environment. The likelihood of a major war in Europe may have radically reduced since the end of the Cold War but this legacy undermines any effort to build a true Euro-Atlantic partnership to meet the common threats and challenges of the 21st century, which we can all list and which we all know will have to be addressed in a collective and multilateral fashion across the world. The status quo divides our continent and will set Europe and Russia up for a future of failure and irrelevance in the emerging international system if it is not addressed.

Many across the world believe that we need a new approach to defence and security issues in the Euro-Atlantic region. In response to that growing demand, the European Leadership Network, under my chairmanship, the Nuclear Threat Initiative under the chairmanship of Senator Sam Nunn, the Russian International Affairs Council under the chairmanship of Igor Ivanov, the former Russian Defence Minister, and the Munich Security Conference, under the chairmanship of Wolfgang Ischinger, brought together a Track II dialogue to discuss some of these challenges with experts. I was pleased to be able to invite my noble friend Lord West of Spithead, who accepted, and General Sir John McColl, the former DSACEUR, who recently retired and is now the Lieutenant Governor of Jersey, to join that significant group of people, including very senior former soldiers from Russia and the United States, to address some of these issues.

I do not have time now to go into the detail, but I have a copy of the report from that dialogue and I commend it to both the House and the Government. It is a comprehensive document that sets out the principles that ought to instruct such a dialogue and a step-by-step approach to take us, over 15 years, away from this difficult set of circumstances that we have got ourselves into by not addressing these challenges. We need political leadership but we will not have it if we do not even recognise this challenge when we set the course for a year’s debates.

19:37

[Lord Taverne]

My Lords, I want to address the implications of a referendum in 2017, which I do not think have been properly considered very often. I very much agreed with the remarks made by my noble friend Lord Howell when he said that the European Union is, at present, in a state of flux. It faces entirely new circumstances and completely new challenges, but that is not an argument in favour of having a referendum in 2017. If the eurozone is to survive, it will need some greater degree of fiscal co-ordination and some initiative for growth. Both of these mean more Europe and yet there has never been greater disillusionment with Brussels throughout Europe than there is at the present time—people want less Europe. How will that be resolved? We will not know by 2017. How large will the eurozone be? It may be smaller but it may be larger. What will its relations be with the outside?

Another thing that will be needed is a banking union. However, Germany and France are very far apart at the moment about what sort of banking union there should be. It is likely to take considerable time and is not something that is likely to be resolved by 2017. The form of any banking union will have very serious implications for the City of London. What sort of Europe is likely to have emerged by 2017? We do not know. If we are going to have a referendum that is meaningful, the choice must be clear, but we will not know what sort of Union we are supposed to vote on—either to leave or to stay in.

The noble Lord, Lord Howell, also said that we should play a leading part in the kind of changes that Europe needs. I completely agree. The noble Lord, Lord Williamson, said that there were many opportunities for us to exploit the need for change that there is in Europe. I entirely agree. But what will be the effect on our influence in Europe in leading these changes if we have a fixed referendum that leads to the possibility—indeed, in many people’s eyes, the likelihood—of an exit?

Many people in Europe look at the polls and the rise of UKIP, this xenophobic, populist party. They hear the speeches of my noble friend Lord Lawson and other Tory grandees, and indeed the statements made by some Cabinet Ministers, and they assume that Britain is likely to exit. What sort of concessions are they likely to make if they think that we are not going to be a member in any case? How will they respond to what in effect is a threat—“If you do not give us what we want, we will walk away”? Fixing a referendum is not likely to enable us to achieve the kind of changes that we want and need, because you can achieve those only if you are inside, if you have a commitment to the Union, not if you are threatening to leave and exercising what will appear to some as a form of blackmail—when we need good will.

My third reason is that the only people likely to benefit from a referendum in 2017 will be the antis, which is not surprising; that is why they are in favour. Suppose the Conservatives win the next election and Mr Cameron starts his negotiation for substantial repatriation of powers backed by the threat of walking away in a referendum, is he likely to achieve these successes? He is extremely unlikely to do so. He may get a few cosmetic concessions, a few sops thrown to him, but I agree with my noble friend Lord Lawson that people will see through that; there will not be any substantial repatriation of powers. If he is still Prime Minister—which would then be somewhat unlikely—what would Mr Cameron do in a referendum if all his negotiations have failed? He could not say, “But we must still say yes”. The Government would be forced to support a no campaign, together with a vitriolic anti-European press. One could not guarantee a repetition of 1975, when all three parties were in favour and so was the press.

What happens if Labour wins the election and commits itself to a referendum in 2017, which fortunately so far it has not done? Suppose that Labour, too, feels that it cannot be left out in this competition for the popular vote, would it agree to a referendum? Two years after the election, just at the time when Governments are supremely unpopular, a Labour Government would have a vote, which would be unanimously opposed by an anti-Europe Conservative Party and the press. Again, it is quite likely that the result would be exit.

Who will be the beneficiaries of a referendum that is fixed in 2017? I am not opposed to the idea of a referendum when we know exactly what we are voting for and if it is an absolutely major issue such as whether or not we should join the euro. I am not opposed to a referendum in principle. I am not very keen on it; on the whole I am a supporter of Burke in this matter. Let us assume that there is the likelihood of an exit. What would be the result of that? We would finally have an answer to the problem posed by Dean Acheson when he said:

“Great Britain has lost an empire and not yet found a role”.

We have not yet found a role—I think we have to face that fact—but if we exited from Europe we would have found a role, and what would it be? The sort of influence we would have in the world if we exited from Europe would be that of a less prosperous Norway or Switzerland.

19:44

[The Earl of Sandwich]

My Lords, I will comment on the EU at the end. First, I will speak on conflict and post-conflict states. I begin by acknowledging the work of our Armed Forces, diplomats, journalists and aid workers in Afghanistan. There have been many casualties among Afghan soldiers and civilians as well as our own soldiers and Marines, but we often forget that our own civilians and aid workers are also working in a dangerous environment. I declare an interest because two members of my family have served in that capacity, while another is currently serving in our Armed Forces.

I completely agree with the noble Lord, Lord King, and others about the translators. I put it to the Minister—when he comes back—that the United Nations High Commission for Refugees has a resettlement programme which would exactly fit this group of refugees. I hope that he will give us a reply on that point.

One key aim we have all been fighting for in Afghanistan has been the rights of women. Madonna said recently, when making a generous donation, that she did not want to live in a world where women and girls are treated as they are in Afghanistan. I expect the same could be said by all of us, yet despite what the noble Baroness, Lady Northover, said at the beginning, it appears almost inevitable that after we have withdrawn our Armed Forces, we shall gradually downgrade our aid programme, at least from the scale on which it has been operating

At best, we shall see continuity and perhaps a return to true Islamic ideals, which respect the role of women. At worst, we shall see the Taliban exerting increasing pressure and perhaps returning to power.

I look back at what the aid agencies were saying during the Taliban era after 1996, when any movement of women from their homes was discouraged and education was banned in many areas. I was at that time involved in a clandestine project in Badghis province to support girls’ education in private homes, which was the only way of doing it. At that time the UN and most of the large aid agencies were wary of getting involved at all. Women were discouraged even from working for the United Nations agencies—we forget that.

Of course, the situation has dramatically changed and it seems almost inconceivable that today’s programmes for women can be reversed. We are told that after NATO withdraws, aid through agencies such as our own DfID will continue, but we have to be realistic: less security means less protection for programmes outside the main cities. Every degree of un-Islamic prejudice or extreme interpretation of the Sharia in the madrassahs means less take-up of education and more opportunities for terrorism. Can the Minister assure me that DfID will maintain its support for education and that its programmes in rural areas, including the successful National Solidarity Programme, will continue to have priority and be given adequate support? Knowing that protection will be provided by the Afghan army and police, what arrangements are being made to equip and train Afghan soldiers and men after 2014?

It is not just Afghanistan that will lose international aid but Pakistan, which, besides foreign aid, has received massive US backing for the war against the Taliban in the Federally Administered Tribal Areas. We should recognise, especially this week, that Pakistan has made huge sacrifices and is still at war with terrorism, as are we. Whatever the future make-up of Governments in Kabul and Islamabad, the world will not tolerate the brutality of the Taliban towards young women or men seeking education in either country.

We remember the pleas of the remarkable Malala Yousafzai, the child activist who was the victim of the Taliban. She has been nominated by Desmond Tutu for the Nobel Peace Prize. Dr Nafisa Shah, a prominent Member of Parliament and chair of the National Commission for Human Development, said recently that no other nation was suffering from terrorism like Pakistan, and yet,

“there seems to be little understanding … from the international community. The world needs to ... support us to promote, expand and strengthen the political and social space for a democratic and progressive civil society”.

It is certainly time to congratulate Pakistan and its new leader. Although the election last weekend saw violent episodes, mentioned by the noble Lord, Lord Avebury, earlier, it at least demonstrated a leap forward in the democratic process following electoral reform and a recent strengthening of the judiciary. I am pleased to say that we have been part of that. DfID, alongside its focus on girls’ education, supported voter mobilisation, with an emphasis on the participation of rural women voters. We are claiming to have helped 100,000 first-time women voters in that election.

I was impressed also by our involvement in helping IDPs—internally displaced persons—in the Khyber region, especially with water and sanitation. This is the key frontier area around Peshawar—where we should be working—represented by a famous cricketer whose anti-corruption campaign has won him a lot of votes. Most of the IDPs have fled violence in the tribal areas, but the vast majority of them, 88%, are still living outside any organised camps or UN protection. Foreign investment in Pakistan is draining away and donors are getting tougher. Even our own International Development Committee in its latest report has emphasised corruption and human rights violations and calls for more effective aid through the aid programme and through IMF lending, conditional on better governance. Pakistan is a fragile state, but, for reasons of history and security, we must do our utmost to remain there, both to meet emergency needs and to respond to the pleas of the heroic Malala and many others working for a better future.

Nepal is another Asian post-conflict state still recovering from the bloodshed of only a few years ago before the Maoists entered government. Political stultification has set in and the country is now run by civil servants, for lack of any Ministers, pending elections which are always being postponed. I know that our aid programme is still in place despite delays in the forestry programme, but we cannot consider that Nepal is yet off the danger list.

In Africa, thankfully, May has been a month of positive development. We have to be pleased that the Kenyan elections went well, although while the new president remains on the ICC list, there can be no lasting political stability. Kenya has played a vital role in the quelling of al-Shabaab in Somalia, although that country will take years to rebuild and the diaspora is still cautious.

Sudan and South Sudan, mentioned by my noble friend Lady Cox, are due to reopen oil supplies at any moment following the success of Thabo Mbeki’s high level panel under the auspices, we must remember, of the Ethiopian Government and the African Union. The 50th anniversary of the AU would be a good opportunity to celebrate ultimate reconciliation between the two sides of Sudan, but unfortunate1y, as my noble friend said, the conflicts in Darfur, South Kordofan, Blue Nile and Abyei still have to be resolved.

Nearer home, we need to work harder to promote more reconciliation in Europe’s own conflict states, notably between Serbia, Bosnia and Kosovo. Serbia’s Deputy Prime Minister Vucic visited four Serbian municipalities in northern Kosovo last week and spoke in favour of the recent compromise agreement in Brussels, saying that it was the only way for Serbia to survive. He is right. I firmly believe in gradual enlargement of the EU as a means of preserving peace in Europe.

Once the quarrelling in the Conservative Party is over, I hope that the coalition or whatever Government succeeds it will bring this country back to its senses. We belong in Europe and we have to remain in Europe if we are going to solve any of the problems there or in conflict states all round the globe.

19:54

[Lord Freeman]

My Lords, I shall speak briefly about a rather narrow but important issue: the expansion of our Reserve Forces. There was reference in the gracious Speech to this, but, so far, the response from not only colleagues in both Houses of Parliament but also in the press has been rather muted. I can assure my noble friend on the Front Bench that I am not expecting any reply this evening; I seek simply to place on record my strong support and admiration for what the Minister has achieved already in supporting the Reserve Forces.

My very modest qualification for contributing to this debate is having been the Minister responsible for the Reserve Forces in the United Kingdom and recently, during the past decade, president of the Reserve Forces Association. I commence by paying tribute to the 29 Territorial Army soldiers who lost their lives in Afghanistan in recent years.

The Government have a very ambitious target—the gracious Speech referred very briefly to this—of increasing the number of the Reserve Forces to 30,000 by 2018 from a current base of about half that, and half that, frankly, is not as well trained as would have been the case 10, 20 or 30 years ago. The challenge is significant and represents the most radical reform over the past 50 years.

The advantage of recruiting men and women into our Reserve Forces is that they often have very special skills; for example, as engineers, doctors, linguists et cetera. There is also greater geographical cover and therefore a relationship between our Armed Forces and the community which is now becoming either limited or non-existent as our Regular Forces fall in number and are concentrated in fewer bases.

According to exchanges that I have had with the Ministry of Defence, a White Paper on precisely how we are going to recruit 30,000 reserves is due very soon. It will set out the challenges. In my judgment, a sensible notice period has to be given to employers, particularly small employers, about when a reservist is likely to be called up. That has been one of the biggest problems that the Territorial Army has faced during the past 20 or 30 years. We also need to increase employer awareness of the requirements. This is particularly important for small firms. If you employ only five or six people, it is extremely important that you know how long the notice period will be before someone is called up, how long they will be away and when they will be back. There must be an opportunity for young men and women who join the reserves as officers to command. During the past 10 or 20 years when we have sent troops to Afghanistan and other theatres of conflict, we have sent regular soldiers and reservist soldiers but not the young officers who need to get experience in command. We need to deploy units of the Reserve Forces together with the Regular Forces so that they can train together in this country and serve together.

A distinguished previous Black Rod in this House and I worked on post-traumatic stress, which is extremely important as other Ministers who have served in the Ministry of Defence know. It affects far too many of our returning regular soldiers. We have to make sure that services are available also for our reservists. It is a hidden and very worrying problem for many in civilian society.

To double the size of our Reserve Forces from about 15,000—I would not claim that all of them were properly or fully trained—to 30,000 by 2018 is a bold objective, but I congratulate not only the Minister but the Ministry of Defence and the senior military staff there on making sure that we are going to meet that challenge. I am sure that it will be in the interests of service to the country, and I hope that we will see and debate the White Paper very soon.

20:00

[Lord Collins of Highbury]

My Lords, I want to raise an issue on which there is cross-party consensus: the previous Government’s commitment to meet the UN’s target of spending 0.7% of gross national income on aid and to legislate on that by 2013. This was taken on by the current Government and included in the coalition agreement. The Minister pointed out in her opening contribution that this year the UK reached that target and was the first G8 country to do so. I welcome that achievement: I am very proud of our country for it.

However, the commitment to legislate on that is missing from the gracious Speech. I have heard the argument that having met the target legislation is not necessary. I cannot put it better than the former International Development Secretary, Andrew Mitchell, who said last March:

“I think it takes it beyond doubt. And also we and the Liberal Democrats and the Labour party all made clear at the time of the general election that we would legislate. It takes it out of politics. On the whole, politicians should do what they say they are going to do”.

UK aid works. Every year, it helps raise more than 3 million people out of poverty and gets millions of children into school. In 2012 alone, it stopped 2.7 million mothers and children going hungry and vaccinated 12 million children against life-threatening diseases. Instead of making the case that that is the right thing to do from the perspectives of both global social justice and long-term national interest, the Prime Minister puts internal party interest above giving leadership on an issue that has multiparty consensus.

As my noble friend Lord McConnell said in his contribution, in recent weeks we have seen a series of off-the-record briefings and ad hoc policy announcements that appear designed to appease those in the Conservative Party opposed to increased aid. We have had from the suggestion that in future UK aid will be used to replace cuts to the defence budget and promote British trade interests to ending our aid programme to South Africa. The latter was originally spun as a decision agreed by the South African Government. That patently was not the case. Again, that is putting media headlines three days ahead of local elections before the needs of South Africa’s poor, our foreign policy interests and our relationship with a country that is central to progress in Africa and the wider world.

The critics of legislation also ignore the fact that making permanent the link between 0.7% and gross national income would ensure that the UK aid contribution will always be related to the health of our economy. In an increasingly interconnected world, the fortunes of people in the UK are linked to those of people in developing countries. The untapped potential of developing nations represents lost customers, trade and ultimately growth for the UK and global economy. Investing in effective development means investing in new markets for UK companies abroad. As UK aid is used to lift more people out of poverty and provide developing countries with opportunities to enter international markets, UK companies will have an expanded market as new companies develop and consumers have increased disposable income. The CBI has estimated that the impact of the UK working in new markets in these sectors could lead to a £20 billion boost to the UK economy.

Effective aid, particularly when targeted at fragile and conflict-affected states, can assist in averting security threats and instability. For example, with 43% of the world’s population now under the age of 25 concentrated in some of the world’s poorest nations, well-targeted aid can provide better life chances and opportunities to young people who would otherwise face a future with little or no prospects. This is an important moment. It is time for all of us, Government and Opposition, to come out and be proud of UK aid and what it achieves.

20:00

[Baroness Nicholson of Winterbourne]

My Lords, following three decades of conflict and international sanctions, Iraq’s economy is set to become one of the fastest growing in the world over the next 10 years. Its GDP growth for 2013 is forecast for around 14%, largely fuelled by a rapidly developing hydrocarbons sector that already generates around $8 billion a month in oil revenues. On the back of this sizeable wealth stream, Iraq’s import demand is projected to increase by 150% by 2020, with major opportunities in sectors including power generation, infrastructure, healthcare, education, financial and professional services, telecoms, security and defence, IT and beyond. Inevitably, rapid population growth is also anticipated, from maybe 30 million today to maybe 70 million or beyond. These are large numbers for government and the private sector to satisfy demand for investment.

Where is Britain in this? British companies are especially well placed to capitalise on investment opportunities in Iraq given the significant historical and cultural ties that exist between us, as well as the UK’s solid reputation for quality and transparent business practices. UK exports to Iraq totalled £782 million in 2011 and exports of goods increased 40% in 2012 to just over £1 billion. Although commendable, this is minuscule compared with Turkish trade with Iraq, which climbed to $8.3 billion in 2011 from $2.8 billion in 2007 according to Turkish government statistics. Almost 600 Turkish construction companies are working in Iraq according to the Turkish Foreign Economic Relations Board. Iran’s trade with Iraq is worth more than $10 billion according to the Iran-Iraq Chamber of Commerce—that is 10 times as much as Britain’s.

Iraq is rebuilding the country from the ground up but there is continuing evidence that Britain is losing out to competitors, especially from the Far East and other European countries. There are many examples: massive contracts to build huge power stations in Basra have gone already to Greek and Turkish companies and recent defence expenditure favoured Russia and the Czech Republic. Iraq is rebuilding her railway system at a cost of more than $60 billion. The world’s first railway engine was invented here in Britain and a UK company, Bombardier, makes high-performance trains that are sold all over the world. Yet only this week the Iraqi Government announced that they were importing 10 trains from China.

I must point out that British company BP and Anglo-Dutch company Shell are between them producing more than 70% of federal Iraq’s total income from two giant oil and gas fields at Rumaila and Al Majnoon. Shell has just started a unique $18 billion gas capture programme, the first in the world, which will enable Iraq to fuel all its power stations with gas by the end of the decade. That will provide wealth for the Iraqi economy and jobs for the Iraqi people. It is a fantastic achievement by one British-owned and one partly British-owned company, with subcontractors that in many instances are also British. We should be very proud of their achievements.

Other sectors in Iraq such as construction and infrastructure are wide open to British expertise. Where is agriculture or the many other things we have to offer? With a few exceptions, I am sorry to say that British business is making less impact than we should in the federal Republic of Iraq and even less in areas such as the Kurdish regional government.

Alas, it is not only in Iraq that Britain has failed in the region. At the Opportunity Kuwait conference last week, I was disturbed to hear that Britain had only 2% of all investment in Kuwait by foreign companies, compared with 14% by the Netherlands. High-profile and important British politicians, including our Prime Minister, the Mayor of London and the Lord Mayor of the City of London, have shuttled through Gulf countries lately, aiming not just to sell British goods, such as warplanes, but to attract oil money to help fund pressing UK infrastructure needs.

Our bilateral trade with Gulf countries is estimated by analysts to be worth more than $15 billion annually, but that is still a modest sum given the estimated $2.2 trillion-worth of infrastructure under way in the Arabian peninsular states. We can and must do more. I pay tribute here to the extraordinary skills and sheer hard work of the Foreign and Commonwealth Office. I share its focus on the paramount importance of the development of the free market and the private sector as fundamental to the development of democracy. I am delighted that under the skilful leadership of the noble Lord, Lord Green of Hurstpierpoint, UKTI’s excellence is both more obvious and more effective in the region. UKBA is also working immensely hard.

Indeed, I am proud to be leading a UKTI-IBBC 100-strong mission to Iraq—I should explain that I chair the Iraq Britain Business Council. There, we will be led by a UK Cabinet Minister, the right honourable Member for Havant. We will be focusing on opportunities for small and medium-sized enterprises and, in particular, on universities and science—his portfolio.

I believe that the key to success for Britain in Iraq and the region lies in rebuilding confidence. There remains in Britain much hesitancy about Iraq. We should be proud of the important part that we played in freeing the Iraqi people from their decades-long misery, which included institutionalised torture, genocide and slaughter by chemical weapons. We should be very proud of the work of our wonderful Armed Forces.

In just 10 years, Iraq has made huge strides forward. The recent free and fair local elections, and a growth rate today of well over 10% surely show that Iraq is fast becoming one of the most powerful countries in the region, and also the most stable. It is surely the best financial partner for us all. I believe that confidence-building measures, which I urge the Government to adopt, are the key to opening the door for a truly successful partnership between Iraq and Britain.

20:12

[Lord Eames]

My Lords, I wish to draw attention to the issue of the United Kingdom’s contribution to international development and, in doing so, to express serious concern to the Government about the absence of any detailed reference to it in the gracious Speech. In so doing, I find myself repeating the concerns already expressed in this debate by, among others, my noble and right reverend friend the Bishop of Ripon and Leeds and the noble Lord, Lord Collins of Highbury.

Back in 2010, the Government made a strong and welcome commitment to give priority to international development. This would be achieved, we were told, by protection for the overseas aid budget by pledging to spend 0.7% of gross national income on overseas aid from 2013 and, most important of all, by cementing that commitment in legislation. The welcome that such intentions received from many sources indicated, if evidence were required, the widespread willingness to support international aid. That support came from across the political arena, from voluntary aid societies such as Christian Aid, humanitarian aid agencies, the churches and many others.

In this year’s Budget, the United Kingdom finally reached the target of 0.7%. Is it any wonder that there has been genuine and widespread disappointment that a Bill to enshrine that target has been omitted from the Queen’s Speech? Those promises issued in 2010 were one thing. A failure to move ahead on legislation which would have overwhelming support in this House, in the other place and in the country, is difficult to understand.

We are told that there are such economic pressures at present—pressures which were not fully understood in 2010 and which have arisen since—that it is dangerous to translate intentions into law and that 0.7% must remain the aspiration only. In the light of economic recession, such arguments spring easily to our mind, yet the temptation to reallocate resources across the board in times of economic hardship raises serious dangers for such matters as overseas aid.

However, legislation which would allow long-term reassurance—a long-term basis for planning and long-term reassurance for the voluntary sector—is vital. Such legislation would underscore the effectiveness of the United Kingdom’s overseas aid. As we approach the G8 conference in Fermanagh, such legislation would show the world that the United Kingdom can provide global leadership in attempts to reduce world poverty and to reduce the desperate plight of the hungry. Such legislation would demonstrate to the world that Britain had the courage to back up good intentions even in difficult economic situations.

In the complex tapestry of challenge in our current economic climate, the issue of overseas aid stands high on our list of priorities on moral grounds. One can think of numerous examples where effective aid programmes save lives, lift communities out of poverty and—of equal importance—empower people to take control of their own lives. Hardly a day passes without vivid and tragic evidence in the media of such needs. As one who has often found himself visiting areas of such desperate human need, I have a sense of pride in recognising how much our contribution as a nation has made to the amelioration of such suffering.

Our nation has so often demonstrated that generosity, that compassion, and we have seen ourselves rise steadily in the global estimate of those who are willing to provide aid. Surely, by enshrining those intentions in legislation we would have done much to raise the morale of so many involved.

I remind the House of the words of the Prime Minister when he said,

“We will not balance the books on the backs of the poorest”.

By placing a legal duty on the Government by allocating 0.7% of GNI in years to come, we would become the first country in the world to provide a permanent guarantee to those who need it most that we will live up to promises that we have made.

My final point comes from connections with the ongoing tragic situation in Syria. Words fail us in the face of the relentless suffering of the people of Syria. We commend the strong leadership of the United Nations in the international humanitarian response. We commend the Secretary of State for International Development on her efforts in support of the UN initiative, but we must not forget the ongoing work of humanitarian aid agencies in our country, and their workers who face such danger in Syria and elsewhere at this time. However, there is the question of co-ordination. Is the Minister satisfied that sufficient effort is being made to co-ordinate the efforts of the voluntary agencies involved in the Syrian situation, and co-ordinate them well with those of government and international humanitarian aid at this time?

Overseas aid has long been a sign of our compassion as a people. In a world order where humanitarian need is now the most critical reality, surely we have a moral duty as well as a political duty to give urgent consideration to this question.

20:20

[Viscount Eccles]

My Lords, having worked in international development for the best working years of my life, I can only admire the admirable simplicity of the approach of the noble and right reverend Lord, Lord Eames, to this subject. However, as I will demonstrate, I do not think that compassion is enough. I also regret that the noble Lord, Lord Cameron of Dillington, is not in his place. I worked for an organisation that had equity investments in three seed companies in Africa. It worked very closely with the largest privately owned American seed company. It brought clonal tea to Zimbabwe and Tanzania and bred elite oil palms for the Far East. In fact, it did everything that the noble Lord suggested should be done now, and I was part of the British aid programme at the time.

International development and aid has in fact always been controversial. It has never been a simple subject. Indeed, if your Lordships were to read the 238 pages of DfID’s annual report—perhaps noble Lords do not read those 238 pages—you may end up, like me, completely confused. I say that advisedly. I am not sure, but I think that DfID is driven by the millennium development goals, yet those are not working. It is true to say that the countries that will be able to achieve the millennium development goals would have achieved them anyway and that those that cannot achieve them would never have done so anyway. There are countries going in and out of the green, amber and red definitions of the millennium goals, which certainly need to be thoroughly revised in 2015.

Our own House of Lords Economic Affairs Committee wrote a very good report about the effectiveness of aid, which noble Lords will no doubt have read. Reading that report, you see that there is deep controversy in the evidence given to that committee about the effectiveness of aid. Whatever might be said about my noble friend Lord Ashcroft’s blogs, he knew and knows about Zimbabwe from when he was young, and about Belize. Those are two quite difficult countries and in his blogs there are very interesting views.

There used to be great debate in this House about development and aid. Lord Balogh and Lord Bauer used to go head to head. Lord Balogh was an adviser on official development assistance, while Lord Bauer would say that economic growth and development were what was needed and that aid interrupted the progress towards economic growth and the elimination or amelioration of poverty. We now have consensus, which the noble Lord, Lord Collins referred to, so we cease to debate the matter as we are all agreed. All that does, if I may say so, is open the door to Mr Nigel Farage—not a very welcome development—because, as he says, if all three Front Benches agree there must be something wrong. On that proposition, I agree with him, even if his attitude to aid is completely mistaken.

I suggest a way of thinking about economic development and international development. There are four strands to it. First, there is economic growth, which leads one on to poverty. I think everybody agrees—the Secretary of State has said it—that economic growth is the most important means of reducing poverty. The House of Lords committee said that economic growth is essential if poverty is to be reduced, which is of course absolutely right. Secondly, the millennium development goals talk about the eradication of poverty but then refer to the eradication of extreme poverty. However, the Joseph Rowntree Foundation says that we have poverty in the United Kingdom. Thirdly, we have corruption. Nothing should be done if it leads to corruption and we must do everything to avoid it, but we have corruption here. We have not lost it; there is still some about. Fourthly, there is disaster relief, which I would like to leave out, but of course if Cockermouth gets flooded we give its people relief.

We need economic growth now in the United Kingdom. I have heard economic growth mentioned several times tonight in connection with the eurozone and Europe. We have not eliminated poverty and we never will. We have corruption. The Charity Commission is looking at the moment at a charity that appears to have behaved very badly. Is anybody suggesting that we should get rid of the serious fraud squad? We do disaster relief, too, so when thinking about international development we should stop thinking about achieving things and about targets or exits and endings. It is not that at all but a continuous process, which has gone on here and in the whole of the developed world and will go on everywhere else. When it goes on successfully, of course we will build much more interesting relationships of the kind my noble friend Lady Nicholson mentioned with Iraq, because that is all part of how you come out of problems of one sort or another and create positive relationships. We can make sense of the debate about international development only when we realise that none of the four strands which I have mentioned go away. They all persist.

I have quickly to declare an interest. I used to work for a thing that was called the Commonwealth Development Corporation. It was a classic development finance institution. We used to look for economic opportunities, carrying our own technology and management capability with us. We were prepared to lead and to be in consortia. We took risks and went where other people—the pure private sector—were not quite prepared to go. We did things that were quite risky and exciting and on the whole very successful. However, the previous Administration wanted rid of it. They thought that there was no place for such a gap-filling development finance institution, so they tried to sell it to the private sector. They modelled it on that private sector and left it in limbo.

The Secretary of State now says, “We work with the CDC”, although she qualifies that by describing it as the “revitalised” CDC. I wonder what that means and whether my noble friend on the Front Bench will tell us, if not now then later, when we have a Statement on CDC. I hope that we might get a trailer tonight because we still need a classically designed development finance institution that is not aid per se, or a profit maximiser, but a central economic development institution.

20:29

[Lord Anderson of Swansea]

My Lords, I do not share the expertise of the noble and right reverend Lord, Lord Eames, or the noble Viscount, Lord Eccles, on development, so I shall return to mainstream foreign affairs. On them, the gracious Speech is thin. Bizarrely, the European Union is not mentioned, yet it is likely to dominate the debate, at least until the general election as the civil war within the Conservative ranks continues. The unfortunate Prime Minister, like a penguin house keeper in a zoo, keeps feeding fish to the Eurosceptic critics hoping they will be satisfied, but they swallow the fish and will continue to ask for more.

So not turning to Europe, I look elsewhere. Traditionally, these debates turn into somewhat gloomy analyses of wars and rumours of wars, blighted hopes, such as, perhaps, the Arab spring, massacres, floods, tempests and development ending with an appeal that we must do something. There are, of course, many such events and crises in our world today, but temperamentally, as a Welsh nonconformist, I seek signs of hope and improvement since we last had such a debate, and there are indeed such signs of hope: for the first time, one civilian Government has followed another in Pakistan; a general election in Kenya ended without tribal massacres; discoveries of natural resources will assist needy Commonwealth countries, such as Ghana and Papua New Guinea and developing countries such as Indonesia; and the PKK has agreed a ceasefire with the Government of Turkey. Major challenges remain, but there are positive developments in Somalia. Last September, the first President was elected since 1991 and elections are planned by 2016. I warmly congratulate the Foreign Secretary on co-hosting the London conference earlier this month and receiving pledges of support, particularly for the security sector. Piracy has more than halved.

Nearer home, there are continued improvements in the western Balkans. On 19 April, an accord was signed between Serbia and Kosovo that does not amount to the recognition of Kosovo but in effect concedes legal authority to Pristina over the whole territory, which is a step, although there are continued problems in the Serbian-controlled part north of the River Ibar. This shows the importance of EU membership as a magnet and is—dare I say it?—a triumph for a Member of this House, my noble friend Lady Ashton, and EU diplomacy. Perhaps the Minister will say a little about how Her Majesty’s Government intend to help both parties build on that agreement.

After these signs of hope, I turn to more traditional themes: Israel/Palestine and the Syrian refugee crisis. I have just returned from that area. It is clear that the parties concerned cannot reach agreement on their own, and outside intervention, particularly that of the United States, is needed. The area is known not for any spirit of compromise or for power sharing but for winner takes all, so President Assad and Israel face existential threats, and there is the danger of both conflicts spreading regionally well beyond their borders.

As for the Middle East peace process, having recently visited Israel, I read with approval the excellent article by Sir Tom Phillips, our former ambassador to Saudi Arabia and to Israel, in August’s edition of Prospect. He gave 10 rules for why hopes for peace have grown bleaker in the past six years. However, since then some developments suggest that the prospects are marginally less bleak. As wags might say, “We have reached the last chance yet again”. Senator Kerry has been very active in what might be a pre-negotiation phase. I was delighted that my meetings with Abu Mazen and Tzipi Livni were interrupted by him. Qatar, on behalf of the Arab League, modified the Arab peace initiative to include agreed minor border swaps.

The Palestinian Authority has delayed taking Israel to the International Criminal Court, and although there have been ambiguous signals from Israel on a settlement freeze, on 1 May Prime Minister Netanyahu told senior officials of the Israel Ministry of Foreign Affairs that Israel needs to reach peace with the Palestinians to avoid becoming a bi-national state. Perhaps he now recognises that he had no answer to the question: “If not two states, then what? What is your plan B?”. Only a two-state solution can be properly sought. Perhaps his rethinking is being sparked by a hard look at demographic trends between the Mediterranean and the Jordan and the increasing international isolation of Israel, shown most markedly in the vote at the UN General Assembly last November, with the settlement policy criticised even by the Czech Foreign Minister, who alone of the EU countries supported Israel in that November vote.

Alas, neither side seems ready to educate their constituencies. The Palestinians refuse to abandon the illusion of some vast right of return to Israel proper, and Israel refuses to educate its constituency about the future of Jerusalem. Of course we have to understand Israel’s need for solid security arrangements, for regional recognition of its legitimacy and to avoid silly gestures, such as that by Professor Hawking. If there were to be a sustained international effort, there are at least some limited signs of hope.

On Syria and refugees, we despair at the paralysis at the United Nations, the military stalemate, the danger of the conflict spreading regionally and the continued suffering. Only a political solution can solve the problem, hence the importance of last week’s meeting in Moscow between Senator Kerry and Foreign Minister Lavrov. The UN and the Arab League envoy, Mr Brahimi, called the decision to seek to convene an international conference before the end of this month,

“the first hopeful news concerning that unhappy country in a very long time”.

I will make three brief observations from my recent visit to Jordan. First, on the scale of the humanitarian disaster, an estimated 4 million refugees will have fled Syria by the end of the year. There are 140,000 refugees in the Za’atri camp, which I visited in Jordan. There has been a failure of the international community to respond adequately, with only about one-third of the sums pledged at Kuwait actually available for the UN to spend on those refugees. Secondly, on the financial and resource pressures on the fragile state of Jordan, at present 10% of the population of Jordan is composed of refugees; by the year end it will be 25%; and by this time next year it is estimated to be 40%.

Finally, there is an apparent lack of planning in the international community for the day after Assad. Any successor Government in Syria will inherit a wasteland for which vast reconstruction resources are needed. I ask the Minister what is being done to encourage the laggards to honour the promises made at Kuwait to pay for the Syrian refugees. What are HMG doing to help Jordan? What lessons have been learnt from reconstruction after the fall of Saddam in Iraq? Given the poor precedent of the international response to the refugee crisis from Syria, what preparations are there to assist the reconstruction of that sad country after the eventual fall of Assad?

20:39

[Lord Roberts of Llandudno]

My Lords, I was delighted when the noble Lord, Lord Anderson of Swansea, introduced himself as a Welsh nonconformist. It is not often that you find one Welsh nonconformist following another in these debates, but I am delighted to do so.

This year is very special: it is the 20th anniversary of the Maastricht treaty. We have, since 1993, been European citizens, each of us endowed with the rights of free movement, settlement and employment across the Union. Of course, we are anxious, and others even more so, about the lifting of barriers for some European Union workers at the beginning of next year. I suggest that we remove all hostility and suspicion and treat them as they are: fellow citizens of the European Union. If we treat them otherwise, we are asking for trouble. Facts must take prominence; scaremongering must be stamped out.

Of course we treat refugees differently; they are not economic migrants. Asylum seekers do not travel to this country to find work. Instead, they petition us for protection from persecution in their own countries. However, this does not always happen. Asylum seekers are not always treated with dignity and the compassion which many of them need. The whole field of immigration in which they find themselves is a minefield. I was trying to understand and plough my way through some of it the other day. It needs simplifying and modifying. Some who submit applications for UK residence have to wait months if not years for an initial decision. One, we know, is still waiting after four and half years. We need to look at the Immigration Rules. They need to be clear and understandable to the main, ordinary user.

At the close of 2012, we saw the effect of this minefield with the backlog of asylum applications, which stood at 28,500. The backlog had peaked in 2000 when 120,400 cases were waiting for their asylum applications to be dealt with. Things have improved, but the present situation remains unacceptable, especially when we consider that many exist on a mere £36.62 per week during this time. If you read some of the newspapers, you would think that they were given a £1 million cheque when they arrive at Dover, but they exist on a meagre pittance. They are barred from seeking work, which is where I will eventually go with this speech. They survive on pitifully low levels of support. They are unable to contribute or integrate. They are in a legal limbo.

It was found that 25% of those who appealed because they had been denied a place in the UK were successful. The primary reason was that Home Office staff were wrongly making negative assessments. That is not to say that the policies are entirely wrong. However, we are told that often the case owners simply do not follow those policies. All employers—case owners, interviewers, interpreters and decision-makers—should be trained to the highest level, mentored and professionally developed. We could have a career structure for immigration officers, who could go from one qualification to another so that we have the best qualified staff possible to deal with these applications in the first instance. If we do not deal with them in the first instance, we are wasting a lot of taxpayers’ money and reducing asylum seekers and their children to massive anxiety.

We do not say that the Home Office is not doing anything right; things have improved in the past year. However, I am simply calling on Her Majesty’s Government to review how Home Office employees are both recruited and trained. This must be improved. A lot of this backlog—I have been to Croydon and seen the queue at six o’clock in the morning—could be removed if these officers were properly trained.

Like many on these Benches and in other parts of the House, I want our immigration department to be the envy of the world: firm yet fair, attracting skilled migrants but also sheltering those who are fleeing a well founded fear of persecution. Yes, we crack down on abuse, but we ensure that we meet—and I would like to see us surpass—our human rights obligations and commitments. I was delighted when the Minister for Justice, my colleague the noble Lord, Lord McNally, said that he had no plan whatever to withdraw from the European Convention on Human Rights. We must not withdraw. One of the great sayings that I relish is that of Dr Martin Luther King: that we seek to build,

“a society that can live with its conscience”.

We seek to live in a society that is true to its conscience.

I think most would agree that we should not prevent those who can from contributing to the good of society. It is bizarre to think that today we have a system of work in which only those who are serious about finding employment can claim benefits, so we deny the most needy asylum seekers—many of whom are forced into poverty, poor health and hunger by our own immigration laws—the dignity of paying their own way in life.

We can draw inspiration from the recast reception conditions directive. I suggest that we consider applications for permission to work from those who have waited six months—not 12 months or more, as at present—so that after six months they will be eligible to take a job. The benefit would be enormous in many directions. Our friends in Austria, Belgium, Cyprus, Finland, Greece, Italy, the Netherlands, Poland, Portugal, Spain and Sweden all allow them to work in that six-month period. If that is good enough for them, I suggest that we should consider it good enough for ourselves. Those are the obligations and steps that can be taken. However, we also have a moral step to take.

I was looking at the fourth commandment. I do not often look at it. It says that we should care for the stranger within our gates, not only for our families, our manservant and maidservant. We should remember this. It is, after all, a commandment. Finally, therefore, because my time is at an end, I plead with the political parties: do not aim to win easy votes by coming down hard on migrants in a populist way. Let us instead have a sensible, rational discussion, keeping in mind at all times the tremendous contribution that migrants have made to this nation down the centuries and the enormous benefits we harvest today. I suggest that we must care for the stranger within our gates.

20:48

[Lord Hylton]

My Lords, I have very great sympathy with what the noble Lord, Lord Roberts, has just said. However, in this long debate I believe and hope that I may have found an area which has not yet been covered.

I want to argue that the war on terror, as waged since 2001, has been a costly failure. Afghanistan and Iraq were then already suffering trauma from previous wars and the impact of sanctions. Today they remain dysfunctional states, with high levels of corruption. Despite having major natural resources, it is likely that both countries will need more than one generation to become normal societies. As a side-effect, Pakistan has been partly destabilized, with political assassinations not fully curbed by elements of martial law. This is particularly serious in a country that owns nuclear weapons. All three countries are saddled with huge police and military forces for which they have difficulty paying except at the expense of their civilian populations. For example, in Pakistan barely half the children attend primary school. In Iraq the security forces are almost 1 million-strong, which equates to 12% of adult males. This is happening at a time when the Government of Iraq cannot organise sufficient electricity, water or sewers, and while schools and health services are poor.

The war in Syria, where some British volunteers are probably fighting, threatens—as has been mentioned—Iraq and Lebanon, together with Jordan and Turkey. Meanwhile, the virus of terrorism has spread widely to Yemen, Somalia, Mali, Algeria and elsewhere. The extreme jihadi pursuit of aggressive war remains attractive to partially educated young people. However, even graduates, when politically powerless, can be recruited to the ideology of violence. Unstable and despairing people can make good suicide bombers.

I am not alone in thinking that the so-called war on terror has gone badly wrong. Experienced British diplomats such as Sir Sherard Cowper-Coles and Sir Ivor Roberts have expressed strong disquiet. In the United States Mr Robert Grenier, the former CIA chief in Pakistan who was later director of its antiterrorism centre, proposed that the United States should find ways of appealing to the many Muslims who have sympathies with al-Qaeda but who disapprove of its methods. He said that the US would have to open paths to justice for those long denied it, whether in Kashmir, Chechnya or Palestine.

Unethical methods and shortcuts considered expedient largely explain why the West does not hold the high moral ground. Indefinite detention without trial for 10 years or more cannot be justified by law-abiding democracies. Guantanamo Bay remains open despite President Obama’s pledge to close it. We do not know how many other prisoners are detained elsewhere.

I remind Her Majesty’s Government of the case of Mr Shaker Aamer, the former British resident, who has twice been cleared for release but who remains incarcerated and separated from his family, who cannot visit him. In the past, suspects have undoubtedly been transferred to third countries for purposes of torture. Enhanced interrogation by techniques such as waterboarding were approved. If we still condemn what was done by the Gestapo and the KGB—as I hope we do—surely the West has to be clear and open about its treatment of suspects. Do the Government accept the criticisms that have been made of the Gibson inquiry? They should also be warned that many eyes will watch their implementation of the Justice and Security Act.

In recent years a shoot-to-kill policy has been adopted, overturning the previous doctrine of minimum force. So-called targeted drone attacks have killed many innocent civilians in Afghanistan, Pakistan, Yemen and Somalia, as well as some suspected terrorists. Each death or wounding raises up scores of relatives eager for revenge. Warfare by remote control will never win hearts and minds, but it will alienate many. It should at the minimum be controlled by civilians and not intelligence agencies.

Everything I have mentioned, together with the long-standing demonisation of national resistance and liberation movements, should be reconsidered most urgently. We should understand how religious beliefs often motivate political behaviour. We should examine the demographics of North Africa, the Middle East and southern Asia. These will guide and govern what is likely to happen in future.

The co-ordinated use of soft power, which has been mentioned already, seems a better strategy, usable alongside or instead of hard power. Joseph Nye defines soft power as the,

“ability to get what you want through attraction rather than through coercion or payments”.

For him, there were three components of such power—culture, where this can attract others; political values, where these are credibly projected; and foreign policies, where they are,

“seen as legitimate and having moral authority”.

During the Cold War, the West by and large had these. I fear, however, that during the war on terror it may have lost them. Robert Pape, Mr B Raman and others have described ways to recover credibility.

Huge sums have been lavished on brutal rulers and on allies who demand far more from us than they can give in return. Further billions have been spent in search of military victory in countries that have then needed complete reconstruction. We must re-examine what we have tried to achieve and the methods that we have condoned for so long. Only after fundamental revision and acknowledgement of policy faults will we be able to face the world with a good conscience. The days of single-power hegemony are over, just as much as those of empire. Hard as it may be, these are the facts that we have to face. They demand the recasting of our foreign, defence and security policies, and our security should rely less on searches and other static protections and far more on good intelligence.

20:56

[Lord Northbrook]

My Lords, I want to focus on three separate areas in my speech today to show how Her Majesty’s Government are pursuing sensible policies in two of them but are severely lacking in initiative on the third.

The first is Hong Kong, which I visited as a member of the All-Party Parliamentary China Group delegation in February, under the able leadership of my noble friend Lord Wei. Every aspect of our visit was excellently planned, from the detailed FCO briefing before we left to the full programme while we were there. Further credit is due to the Hong Kong Government and the consul-general there, Caroline Wilson, for their superb organisation and interest in hearing our feedback. The British Chamber of Commerce executive director, Christopher Hammerbeck, was a credit to the organisation, and our trade envoy, the noble Lord, Lord Marland, was most helpful.

What we learnt overall was totally contrary to my expectations. I had believed that the dead hand of communism would have stifled enterprise and initiative. After a week, I realised that the opposite is true. The Chinese have skilfully allowed, under the principle of “one country, two systems”, the entrepreneurial spirit to continue. Business is not weighed down by unnecessary regulation, tax rates are low and government finances are in good shape, while the focus of the economy has moved away from manufacturing and is now service based.

The UK is making an excellent effort to increase trade. Exports of goods were up by 21% in 2011. Noting the strength of our trade with China, I support the Prime Minister in not needing to apologise for meeting the Dalai Lama. He should note that every US president has met the Tibetan spiritual leader, and this has not affected the USA’s exports to China as a whole, which are up 20% in dollar terms from 2010 to 2012.

The one area that seemed to cause concern to Hong Kong businessmen, as expressed at a fascinating meeting with the Vision 2047 Foundation, was that UK politicians’ visits to China were too often only to sign deals. The feeling was that not enough regular contact was being made outside these events. When I reported this back to the consul-general, her excellent suggestion was that I should express concern to BIS and the FCO, so this is what I am doing.

The second area I wish to discuss is Taiwan. I declare an interest as a member of the British-Taiwanese All-Party Parliamentary Group, having made visits to Taiwan under its auspices in 2011 and 2012. The country is fascinating as it has made great strides to a two party democratic system. President Ma, who was elected for a second term last year as KMT president, has taken the pragmatic and sensible view that it is better to improve relations with the mainland, which had fallen into a parlous state, through increasing trade links and travel between Taiwan and the mainland. Noble Lords may not know that 1 million out of a population of 23 million work on the mainland. Since 2008, the number of weekly flights between Taiwan and the mainland has increased from zero to 616. There have been 18 cross-strait agreements with the mainland. As a result, the Taiwanese economy showed excellent growth overall during his first term although, like many other countries, it has suffered more in 2011 and 2012.

Although we do not have an ambassador in Taiwan, I was very impressed on both visits with the very good work that our British trade and cultural representative, David Campbell, who has just retired, has done there. He had an excellent finger on the pulse of the political scene, business and cultural opportunities. In 2012, the UK was Taiwan’s second largest trading partner in Europe. An EU-Taiwan economic co-operation agreement would further strengthen the relationship. Can the Government help progress this?

As stated, the Government are in general pursuing the correct policies with regard to Hong Kong and Taiwan. I wish I could say the same about our relationship with Cyprus. I declare an interest as a member of the all-party Northern Cyprus group. The current dispute between Turkish and Greek Cypriots is now more than 40 years old. Over those 40 years, there have been many serious attempts by people of good will from both sides of the island and from outside organisations to bring about a resolution. All those attempts failed and all had one very significant fact in common: as noble Lords might expect, they all used the political machinery of the island as the primary, if not the sole, mechanism for negotiation. Perhaps repeated failure of essentially the same process, albeit with different actors, should come as no surprise. However, at some stage, those involved have to address the obvious question of whether it really makes sense to do the same thing over and over again and expect something different to happen. The two communities seem to be resigned to the status quo. Research conducted last July shows that over 70% of both communities now feel that they should assert their own rights, even if it means that members of the other community would be adversely affected. The same survey revealed that only 14% of Turkish Cypriots and 39% of Greek Cypriots would prefer a feasible solution now to an optimal solution sometime in the future.

This is all regrettable but does it really matter? The two sides are de facto separate states. I believe that it is very important to the people of Cyprus, the people of the eastern Mediterranean and to Britain. The eastern Mediterranean is now more troubled and unstable than at any time in the past decade. We have a civil war in Syria, enormous tension between Iran and Israel and unresolved situations in Libya and Egypt. Now, in addition, there are the problems raised by the huge gas finds in Cypriot territorial waters. Exactly who that gas belongs to and in what quantities, how to develop the fields and how to transport the gas are all questions which, if unresolved, are highly likely to add severely to the political tensions. They may also stop the gas fields being developed at all in the foreseeable future.

Last September, Alexander Downer, the UN envoy who has struggled for many years to achieve a settlement, said that the Greek and Turkish sides now had a strong economic reason to agree to a reunification that would reduce the sovereign risk of investing in Cyprus, clear up the problems of investing in property, grow GDP and offer the capacity to service and pay off debt. The British Foreign Secretary made a similar comment when he said last autumn that,

“we have supported the rights of Cyprus to develop resources, but I hope that doing so can somehow be an incentive for a settlement to the problem, rather than a disincentive”.

How the banking crisis among the Greek Cypriot banks will affect the issue is still a matter for conjecture. However, if you are to compare the state of the Turkish economy, which is booming, and the Greek economy, which is in a state of collapse, a neutral observer would say that more Turkish input to the Cyprus economy would be hugely beneficial.

The UN Secretary-General’s report of March last year stated,

“Civil society also has a crucial role to play in building public confidence in the process. Unfortunately, civil society organizations, and women’s groups in particular, remain outside the framework of the negotiations. I therefore call on the sides”—

and indeed the FCO—

“to step up their engagement with civil society and women’s groups, with a view to building public confidence in the benefits of a settlement”.

This view has been repeated by James Ker-Lindsey of the LSE, and was hinted at by the House of Commons Foreign Affairs Committee in its report of March of last year. This opinion was strongly expressed by myself and many others in the Moses Room debate on Cyprus on 23 October. However, the Government have not seen fit to take this idea seriously. A Written Answer to my noble friend Lord Sharkey last June was vague and woolly. The noble Baroness, Lady Warsi, in her wind-up speech to last October’s debate was little better in addressing the issue, and I ask the Minister whether a firmer commitment can be made to work to a settlement by this route. Only such a new approach has a chance of solving the deadlock.

21:05

[Lord Sharkey]

My Lords, it is a pleasure to follow my noble friend Lord Northbrook, and I will follow him in speaking about the situation in Cyprus. I declare an interest as chair of the All-Party Parliamentary Group for the Turkish Republic of Northern Cyprus. However, before I do that, I join others in saying how sorry I am that our 0.7% aid commitment was not in the gracious Speech. I have heard it said that this omission resulted from the negative reaction of some Tory MPs. If this is true, it is a pity. If it is not true, it is hard to see why the 0.7% commitment was left out. In either case, I am glad that we are currently on target and that Nick Clegg has confirmed that he remains committed to writing the 0.7% into law.

When I spoke about Cyprus in the debate on the humble Address last year, I was, on the whole, fairly pessimistic about the prospects for reunification, as was the UN’s representative Alexander Downer and most of those involved in the process of negotiation at the time. I pointed out a year ago, as the noble Lord, Lord Northbrook, has done today, that there was a fundamental reason for being pessimistic—namely, that the negotiations over reunification had been going on for around 40 years, using the same methods, often with the same people and always with the same result: failure.

I argued then that some new event, stimulus or approach was needed if any progress were to be made. In the past 12 months there has been no shortage of new events. Most obviously, the economic situation in the south has worsened very dramatically; the region itself has become more and more unstable as the conflict in Syria continues and as the danger of Turkey being drawn into the conflict increases; and Turkey itself has grown in economic strength, regional influence and overall importance.

Furthermore, the existence of huge gas reserves in Cypriot territorial waters now presents itself as a possible way out of the economic difficulties being experienced on both sides of the island. There are the cautious beginnings of a feeling among those involved in the effort to reunify that there may just be, for the first time in many years, a real opportunity to make progress. I would not go so far as to say that there is yet optimism, but the pervading pessimism may have abated a little.

There are some encouraging signs. The election of President Anastasiades, who voted for the Annan plan, is surely encouraging. The realisation that the gas finds may help all Cyprus economically is encouraging. The work being done in this area by the FCO with the two diaspora communities will, I am sure, prove to be helpful if it is developed and continued. In addition, Alexander Downer, the UN’s representative, is back and active on the island—not entirely to everyone’s complete satisfaction, of course. Five days ago, the Cyprus Mail carried an article by a former Greek Cypriot ambassador, headlined,

“Alexander Downer’s odious transgression”.

I acknowledge of course that the reunification process cannot currently be right at the top of President Anastasiades’s agenda, and I know that the fact that negotiations have not yet recommenced is a source of real frustration to Turkey and to Turkish Cypriots. Turkey’s Foreign Minister was quoted in Today’s Zaman two weeks ago as saying that the Turkish Cypriot side’s call to restart talks should be urgently addressed. By contrast, the Greek Cypriot Foreign Minister has recently said that negotiations should wait until October. I think that both points of view are entirely understandable. October is, after all, only four months away, which is not a long time in the context of 40 years of negotiation.

I remain encouraged that President Anastasiades has explicitly restated the high priority that he assigns to the reunification process. The fact is that both sides of the island badly need the gas finds to be exploited, or at least to be recognised as commercially exploitable. The economic difficulties of the south are well known and highly visible, but the north is an economic dependency of Turkey and it needs investment on a large scale if it is to escape poverty, fulfil its citizens’ aspirations and realise its potential. Gas would go a long way to helping this. It is estimated that $3 billion a year could accrue to Cyprus from gas, and this would be on top of the estimated 3% per annum growth in GDP predicted as a consequence of reunification.

The difficulties to overcome are immense. Where the pipeline should come ashore, how supply is to be guaranteed free of interference and how the proceeds are to be managed are just three obvious and fairly difficult questions. None the less, without gas revenue, the economic prospects for both sides are really very bleak indeed and I think that this realisation may have got home or be getting home.

In discussions and critiques of the reunification process, inevitably a lot of attention has been paid to the governing UN resolutions and to the treaty of guarantee signed by the UK, as is quite right. However, I think that in the past the UN resolutions may have been subjected to a very strict reading, which might not have helped creative thinking or discussion.

Much attention has also been paid to the fact that the negotiations must be held by Cypriots for Cypriots. This requirement has been interpreted far too narrowly. It is entirely possible for interested third parties to involve themselves at the invitation of the principals without contravening this rule. This applies to us. All the parties acknowledge our legitimate interests and obligations as the ex-colonial power and treaty guarantor. All parties welcome, at least some of the time, our efforts to help. I know that the FCO is aware of the constant need for tact and delicacy in what is a complex and often passionately contested situation.

I think that now is the time for the UK to increase its involvement in Cyprus. I urge the Government to continue to look for ways of persuading both sides of the island to expand their traditional models of negotiation, as the noble Lord, Lord Northbrook, said, to create room for the voices of civil society—and women in particular—and for the business community inside these discussions, and to continue here their valuable dialogue with the diasporas. I also urge the Government to press the case for an early agreement on confidence-building measures. It would be very helpful if the sides could be persuaded of the merits of gradualism and of the defects of “nothing agreed until everything agreed”.

The people of Cyprus need to see progress. For 40 years, there has been essentially none at all. There needs to be something that gives new hope and fresh energy to the popular desire—such as it is—for reunification.

Things have changed significantly in the past 12 months. We may now be looking at the most favourable set of circumstances for successful negotiation for reunification that we have seen or can foresee. It would be an absolute tragedy if negotiations continued to fail. It would be an absolute tragedy if both sides of the island were condemned to poverty because the gas fields could not be exploited as a result of the continued division of the island.

21:14

[Lord Hastings of Scarisbrick]

My Lords, in the seven years that I have been in your Lordships’ House I have missed a gracious Speech on only two occasions, one of which was last week while I was attending the World Economic Forum on Africa in Cape Town. I was attending there with two roles in mind: one as the vice chairman of the Global Agenda Council on the Future of Civil Society—I was delighted to hear the two references to civil society in Cyprus by the noble Lords, Lord Northbrook and Lord Sharkey—and the other as a director of KPMG, in which I declare an interest and to which I shall refer later.

One thing that was abundantly apparent at the WEF on Africa was that among the thousand leaders who had gathered from politics, business and civil society there was a profound enthusiasm and great new optimism about the state of their countries and their continent. Enormous wealth was on display, not only from political leaders but from business executives who now see much of Africa’s wealth being realised. During the course of the week, Realizing Africa’s Wealth, a new report by the UNDP, was published about building inclusive businesses for shared prosperity. Poverty is being replaced with the language of prosperity. As the report indicates, some of the good news is that remittances at $50 billion a year and foreign direct investment of $58 billion a year is roughly, in total, four times that of foreign aid engagements within the continent. So there is good news to be had despite the continuing gloom of those remaining still desperately poor.

I was fascinated to note that the Prime Minister has broken away from his frustrations over Europe and Bills in the other place while in New York to spend a little time today at the UN, where he is discussing what will be the next sustainable development goals. On the sustainable development goals, which should replace the millennium development goals from 2015, the Prime Minister said, according to the Guardian, which is the only serious newspaper to carry a major report on this today, that there will be 10 new objectives, which are all believable, necessary, realisable, we hope, and intellectually defensible. They are obvious issues such as ending extreme poverty, ending hunger, ensuring the provision of safe and sustainable water, school development, empowering girls and women and so on. There is nothing that we would dispute.

However, the Guardian reports that the Prime Minister is busy disputing with the President of Liberia, one of the poorest countries in the world which probably will not achieve any one of the major millennium development goals, whether there should be a provision in the new sustainable development goals on removing income inequality. I find that odd. No. 10 says, according to the Guardian, that the Prime Minister wants to keep the focus on measurable concrete actions that are going to help to alleviate poverty and keep the focus on being something that people could judge whether we are delivering. If one thing is abundantly apparent in the new optimism in Africa it is that income disparity is becoming an ugly reality. There are booming numbers of new billionaires and multi-millionaires in Africa’s new wealthy cities who are becoming gated and divided from the poor that they once lived alongside. Those poor remain without water, electricity, social supplies, good hospitalisation, healthcare and adequate work. It is an absolute necessity to close the gap in that income disparity and I am somewhat despaired, if not shocked, at David Cameron’s approach. I hope the Minister will consider taking this aspect back to No 10. It is rather odd to dispute with the president of one of the poorest, most conflict-ridden zones in the world a fundamental principle point on removing income disparity.

Perhaps I may move on to a second area in the few minutes left to me—I declare a specific interest as a director of KPMG International—which is the work that my firm does on behalf of DfID in leading and supporting the work of the Independent Commission on Aid Impact. When the previous Secretary of State, Andrew Mitchell, took up office in 2010, he had established by 2011 the Independent Commission on Aid Impact, which reports to the Select Committee in another place. In the course of the exactly two years that ICAI has been in existence, it has published 21 reports of great significance. In fact, at this moment an ICAI commissioner, Mark Foster, formerly head of Accenture, and a group of assessors are in Jordan and the Lebanon looking at the refugee crisis for a report for DfID.

Some of ICAI’s reports have looked at DfID’s approach to anti-corruption, oversight of EU aid to low-income countries, electoral support through the UNDP, engagement with the World Bank, climate change, impacts in Bangladesh, the health sector in Zimbabwe, education programmes in Nigeria and so on. In total, ICAI has made 85 independent recommendations to DfID, of which the department has accepted 70 in full, 11 in part and has rejected only four. In other words, the case is proven that there is a need for an independent body that looks hard at £11.8 billion of public expenditure and comes to a sensible, independent adjudication on value for money and takes an adequate approach to ensure that the public get a sound investment. Indeed, ICAI has just published its latest report on the work of UNICEF, in which I am delighted to declare an interest as a vice-president and to mention the UK president, the noble Lord, Lord Ashdown, who is in his place.

However, it is interesting to discover that ICAI is being reviewed by the Cabinet Office, which it has asked DfID to undertake, so the very body to which the recommendations of ICAI are meant to go is assessing whether it would like the commission to continue. That seems to me to be a significant potential conflict of interest. It is obvious that if ICAI can make 85 independent recommendations which had not previously been seen and have 70 of them accepted, there is a real and genuine need to maintain the independence of the independent commission and strengthen its role, not just for the remaining two years of its life, but beyond.

For my last point I want to declare another interest as a member of Trade Out of Poverty, a group chaired by Peter Lilley from another place. As we all know, there is continuing pressure on trade negotiations to be completed by the end of this year. Should trade opportunity be better liberalised as markets would require, it would release new energy into the market system, boosting the potential of poor communities, particularly agricultural communities, by an estimated further trillion dollars of income that would go to the poorest people. Solving trade issues will be up to the big decision-makers and the G8 must play its part. The group firmly believes that it is necessary to open up rich country markets unconditionally to the poorest countries of all, and that it is time to end the ridiculous subsidies, such as $2 per cow per day in the EU and $3 billion spent in the US to subsidise cotton and then dump it, which undermines the jobs of 25,000 cotton growers in the poor world, particularly in Africa. It is time to stop protecting our own agricultural base through subsidy and let the rest of the world have access to markets and thus generate jobs. It is time to let trade be what delivers the economic future necessary for the world’s poorest.

21:22

[Lord Jopling]

My Lords, I had to smile a little as I listened to my noble friend Lord Lawson talking about the case for leaving the European Union. In areas further east there is a strong desire to join the Union. Perhaps that desire has something to do with the prospect of handouts, but far be it from me to delve into their motives.

Over the past three years I have paid three visits to the western Balkans, first to Bosnia-Herzegovina, moving on to Republika Srpska and Banja Luka further north. The second visit was made at the end of last year to Serbia and Kosovo, and we also visited the Serb-dominated area north of the Ibar river. Finally, just a few weeks ago we went to Macedonia. All these countries share very strong aspirations to join the European Union and, to a lesser extent, NATO as well. All are very anxious to open negotiations as soon as possible. The response of the European Union has, correctly of course, been to say to all of them that they still have a great deal to do to qualify for membership. Indeed, there is a vast amount that needs to be done before they can join.

The fact is that, in so many of these countries, they find it extremely hard to live together in harmony. There is a degree of malevolence which is scarcely below the surface and, too frequently, pops up above the surface. In Bosnia, development is bedevilled by the existence of Republika Srpska in the north and its connections with Serbia and Belgrade. Kosovo, too, is a country divided, with a Serbian enclave to the north and suffering from a lack of recognition. Macedonia is a country in limbo, facing non-recognition by Greece and other states, with added confusion and doubt raised by the recent remarks of the Albanian leadership about aspirations for a Greater Albania.

There is much to be done before we can contemplate European Union membership for these states. My guess is that, if they were to join prematurely, they would be nothing but trouble until they can put their house in order. We must insist that they learn to live amicably with each other before European Union membership is a reality for them. I know of course that recent steps and meetings between them have made an important start to this essential progress and I certainly would welcome real progress when it can be made. Cathy Ashton—the noble Baroness, Lady Ashton—of course has, within the past few weeks, quite rightly prided herself that the recent so-called agreement between Serbia and Kosovo could lead to a breakthrough and to the beginning of negotiations for EU membership for them. However, to be honest, the agreement that she negotiated and worked on is only paper-thin. Serbia still refuses to recognise Kosovo and still funds Kosovan municipalities, particularly those north of the Ibar river.

Turning to Bosnia, again we hear of progress in the past few days in the talks between Belgrade and Sarajevo. However, the truth is that there is no love lost between the two, in spite of the Dayton agreement. Perhaps I am being cynical, but I cannot help wondering whether these recent, rather cosmetic, so-called agreements and understandings are, in reality, examples of what I would describe as them going through the motions in order to get accession negotiations for European membership started while, at the same time, not really intending to put their differences behind them.

Frankly, the European Union and its entire membership holds the whip hand here and can use that power to offer the carrot of European Union membership. We must make it clear—and stick to it—that unless the west Balkan states learn to drop their antagonisms, and are seen genuinely to do so, we really do not have a place for them in either the European Union or NATO. It is essential that the Government and the Foreign Office insist on the European Union—the Commission or whoever it is that does the negotiating—using very strong negotiating positions in insisting that we can welcome these countries into the European Union and NATO only if their relationship with their neighbours and their own citizens is one of peacefulness and tolerance.

21:30

[Baroness Dean of Thornton-le-Fylde]

My Lords, the gracious Speech referred to the Government bringing forward measures,

“to improve the way this country procures defence equipment”.

The noble Lord, Lord Lee of Trafford, has covered to some degree the number of questions that that raises. It is shorthand for government-owned contractor-operated, although for some time the MoD, rightly, was considering various models.

My concern is that we seem to have slipped into the one model—GOCO—on which the MoD is now concentrating its resources and time, in an area that, as has already been said, receives £14.5 billion a year expenditure, with 16,500 people working in it. My concern is that such a large decision should have the proper processes, which must include a debate in the other place and indeed this House. I ask the Minister: is that going to be possible before the Government move to a decision in principle to go out to the OEJU process for inviting bidders, or decide to appoint a preferred bidder; in other words, that we are not faced with a foregone conclusion on which no influence at all will be able to be brought to bear by this House or the other place?

There has been quite a public debate, although there has not been much in Parliament. I initiated a debate in the Moses Room a short while ago but I think the Minister would readily agree that he was not in a position to give answers of any substance to the questions that were asked. The Financial Times has followed this very closely. As recently as last week, on 7 May, it reported that officials in the US Department of Defense were expressing concerns about how a GOCO scheme could affect our close and special relationship with the United States on defence. So it is an important matter and I would welcome whatever information the Minister can give in his winding-up.

There are two other issues I would like to touch on that were not covered in the gracious Speech, although one has been covered in this debate, particularly by the noble Lord, Lord Ashdown: the interpreters in Afghanistan. We have a real and moral responsibility there. We accepted that principle when we reached arrangements for the interpreters in Iraq and we cannot walk away from the duty of care that we have to the interpreters in Afghanistan. The Prime Minister has not given a definitive answer on this. He says that the Government are looking at it. He said a short while ago that money would be available but in the majority of cases money is not necessarily the issue; it is their future safety and that of their families. I would welcome an answer from the Minister on that.

The third area I would like to cover has not been covered at all in this debate. I have just mentioned our moral duty to the interpreters in Afghanistan. We have an overall moral duty to our Armed Forces. Indeed, in this debate, rightly, due respect and credit have been given to the service they give this country day in and day out, many of them paying with their lives. As a country, we have a contract with our Armed Forces, the Armed Forces covenant. It covers a number of areas. One relates to members of our Armed Forces not being allowed to join a trade union or federation to represent them, the argument being that their officers in the rank system represent them. The previous Government, under some duress—they did not want to do it—set up a Service Complaints Commissioner. She took office in 2008 and since then has published an annual report. Her report stated quite clearly, and backed it up with facts, that the number of complaints was increasing. That may be a good thing—it may be that, because people know that the service is there, they are making complaints—but I would have thought that the fact that 48% more cases were dealt with last year than in the previous year, with 46% of complaints still not resolved at unit level, is something to be concerned about. The Select Committee on Defence in another place is also concerned.

The commissioner has said, “I’m not really as effective as I could and should be in meeting the responsibility to the Armed Forces”. The Armed Forces should have an ombudsman, who would step in almost as a last resort. The concern within the services is, understandably, the rank system—the belief that the officer rank system is what maintains discipline and looks after service personnel. I only wish that that were the case; all too often, that falls down. The Navy has certainly improved its complaints system by saying, “What is reasonable? Let’s not just stick to the rules. Let us sometimes put those on one side and deal with the complaint”. Its list of complaints has gone down. That is not true of the Army, where the number has gone up. There is certainly great resistance within the services to the idea of an ombudsman. I gather that the service chiefs said that they did not understand what an ombudsman did, but they were sure that they did not want one. I think that many of us could picture them saying that.

Earlier this year, the Select Committee on Defence in another place published a report which said that it, too, felt that there needed to be an ombudsman. Like the Service Complaints Commissioner, it did not define what the remit should be; it was something that needed to be discussed between the MoD—taking into account the concerns about rank—and the Service Complaints Commissioner. Although the deadline has passed, the Government have not yet responded to that report but have in any statements that they have made said that they are not in favour of an ombudsman.

I believe that this is an integral part of the Armed Forces covenant. The Armed Forces are entitled to it; we have a responsibility to them. Many of them are leaving the services without their complaint having been dealt with. This may appear a small matter—if the decision was the right one, it would be—but we have a complaints system which is not meeting the needs of our service personnel. If that is part of the Armed Forces covenant—and it is—we are falling down on our responsibility to our own service personnel. I hope that the Minister will be able to give some assurances in response to the questions that have been put on this matter.

21:38

[Lord Hussain]

My Lords, I strongly believe in the United Kingdom Government’s overseas development budget, which is making a huge difference to the lives of millions of people around the world. It helps in reducing poverty, addressing dire medical needs, providing nutrition, combating deadly diseases such as TB, malaria and AIDS, empowering women and tackling radicalisation in many parts of the world. In the past 12 months, I have had the opportunity of visiting South Sudan and Ethiopia and have witnessed how our aid is helping to build the lives of some of the neediest people in the world. While I fully understand the economic situation at home and the hardship that some of our own citizens have to go through, I fully support our commitment to DfID. Can the Minister assure the House that we will continue that commitment?

On the diplomatic front, the world’s focus has been on developments in the Middle East, Africa and the Far East. However, I have watched the Indian subcontinent more closely. India is steadily making its place in the emerging economies of the world but the gap between rich and poor in that country is not decreasing. Hence more people suffer from hunger and poverty in India than anywhere else in the region. Yet, according to Russia Today, India is stepping up its space programme with a higher budget, the launch of a new satellite and a proposed mission to Mars. The country’s space agency will attempt 10 space missions by November 2013, bringing its total budget to $1.3 billion.

In Pakistan, at the end of the elected Government’s tenure, elections have been held despite many threats and deadly attacks by extremists. The new Government face many challenges including terrorism, law and order, corruption, an energy crisis and the country’s relations with its neighbours, particularly with its historic rival, India. The good news is that Indian Prime Minister Mr Manmohan Singh and Mr Nawaz Sharif have exchanged warm greetings. Let us hope that they are able to resolve their disputes, including the Kashmir issue according to the wishes of its people. If that happens, it will ultimately save both countries millions of pounds from their defence budgets that they need to spend on their publics.

Bangladesh is generally known as a progressive, multi-party democracy and a growing economy in south-east Asia. It has strong political and economic ties with the United Kingdom. Our bilateral trade has steadily grown over the years, largely in favour of Bangladesh. Bangladesh also receives £250 million in aid from the United Kingdom every year—at least until 2015. In the past few years, reports of corruption, torture, extrajudicial killings and the sudden disappearance of journalists and political activists from opposition parties have risen significantly. It is over a year now since Mr Ilias Ali, one of the prominent leaders of the main opposition party, the Bangladesh Nationalist Party, was kidnapped along with his driver. He has not been found since. I had the opportunity of meeting Mr Ali on his visit to the United Kingdom a few months before he was kidnapped. He is one out of thousands of such victims considered by many to have been abducted by government agencies and who have not been seen since—some have been found dead.

According to Human Rights Watch’s World Report 2013, the overall human rights situation in Bangladesh has worsened in 2012,

“as the government narrowed political and civil society space, continued to shield abusive security forces from accountability, and flatly ignored calls by Human Rights Watch to reform laws and procedures in flawed war crimes and mutiny trials”.

In February 2013, the United Nations special rapporteur on the independence of judges and lawyers, Gabriela Knaul, and the special rapporteur on extrajudicial executions, Christof Heyns, expressed concern at aspects of non-compliance with fair trial and due process reported during proceedings before Bangladesh’s International Crimes Tribunal, including the pronouncement of death sentences.

Another deadly fire in a Bangladeshi garments factory this time killed over 1,200 people—one of the deadliest industrial disasters in history. The disaster has created worldwide concern for the factory workers who provide, through their sweat and blood, cheap clothes for the developed world. However, before all the victims of the factory collapse were buried, another human tragedy visited Bangladesh with the killings of unknown numbers of opposition protestors by the Government in the early hours of 6 May. This was after a massive anti-government rally. The exact number of casualties in the darkness of the night is still unknown, but the Asian Human Rights Commission calls it “a massacre of demonstrators”. In the absence of any reliable information, the Economist states that what happened in Dakar and beyond in the early hours of 6 May looks like a massacre. Bangladesh police say that 22 people died, but the Opposition claim that the figure could be as high as 2,000.

Bangladesh has been known as a land of religious moderation and the Bangladeshi diaspora are generally recognised as such. About half a million British Bangladeshis in the UK are troubled by the recent events in Bangladesh. On behalf of many of them, I ask the Minister to urge the Foreign and Commonwealth Office to use its good offices to ascertain the truth behind the 6 May massacre in Dakar. The world’s microfinance guru and practitioner Professor Muhammad Yunus commented on the state of Bangladesh:

“The collapse of the building is just a precursor to the imminent collapse of all our state institutions. If we don't face up to the cracks in our state systems, then we as a nation will get lost in the debris of the collapse ... We will have to find ways to fix the institutions to protect them from complete collapse”.

The situation in Bangladesh is showing all signs of anarchy and civil war that could derail democracy and drag the country back into the dark ages. It is time for the influential friendly countries such as the United Kingdom to help Bangladesh to bring back peace, tolerance and reconciliation to the country. I ask the Minister to ask the Foreign Secretary to raise those issues with his counterpart or indeed with the Prime Minister of Bangladesh, Sheikh Hasina, at the earliest opportunity.

21:46

[Lord St John of Bletso]

My Lords, the gracious Speech referred to the importance of ensuring security, good governance and development. There was no reference to the important role that our Government continue to play in the economic, social and political developments in Africa. In her opening speech, the noble Baroness spoke about the successful elections in Egypt and Tunisia, as well as the positive developments in Somalia—all very encouraging. She did not speak about the recent election in Kenya, which thankfully was peaceful and where President Kenyatta has given a commitment to the devolution of government and the promotion of growth as well as much needed infrastructure development.

In my short allotted time, I shall touch briefly on three challenges facing southern Africa: the forthcoming general election in Zimbabwe, which is likely to be in September; the millennium development goals, more specifically food insecurity and the need for more support infrastructure, particularly by the Commonwealth Development Corporation; and, finally, an issue close to my heart, as I wear the tie, the poaching crisis in sub-Saharan Africa.

The recent successful referendum on the constitution in Zimbabwe should be the first step towards democratic reforms leading to the general election scheduled for September. So far, so good. Although over the past five years there has been considerable economic progress in the country, with the so-called unity Government of the MDC and ZANU-PF, the army, the police and the dreaded CIO are all still controlled by President Robert Mugabe’s ZANU-PF, which raises the threat that the forthcoming elections may be marred by intimidation.

To ensure that the elections are free and fair, transparent, non-violent and sustainable, it is essential that international observers are allowed to monitor the general election. Unfortunately, not much progress has been achieved in getting that consent from ZANU-PF. That is certainly a cause of concern. Can the Minister assure us that we will put pressure on SADC as the guarantor of democracy in Zimbabwe to ensure that that essential check and balance is put in place? The dividends of a free and fair election in Zimbabwe would be a huge boost not just to the country but to the entire region. It would lead to the lifting of the remaining economic sanctions and, I hope, pave the way to Zimbabwe rejoining the Commonwealth.

The noble Lord, Lord Chidgey, referred to the millennium development goals and the fact that many countries, particularly in sub-Saharan Africa, have made major progress towards achieving them, while my noble friend Lord Hastings referred to the wealth divide in Africa. While there has been steady economic growth with improvements in poverty reduction, universal primary education, gender parity and healthcare on the continent, the lack of efficient farming, inadequate storage and, in particular, poor infrastructure and transportation have added to the threat of a major and escalating food insecurity crisis.

The lack of adequate infrastructure in Africa has been identified as one of the major impediments to development and economic growth. Increasing the power supply is a key driver of sustainable growth. Most countries in Africa have chronic power supply problems. The Commonwealth Development Corporation, which is controlled by DfID, has played a major role in investing in African infrastructure but could, in my opinion, play a much bigger role in stemming the rise of China’s influence across the continent, in which it has already carved out a substantial role.

Finally, in speaking of the Chinese impact on Africa, while China has in many ways played an important role in the economic transformation of sub-Saharan Africa, by importing its own labour force it has been responsible for the worst wildlife poaching crisis in the continent for several decades, particularly of elephants for the ivory trade and in rhino horn. According to an official recent CITES report, up to 11.7% of Africa’s elephants were illegally killed in 2011, which equates to almost 25,000 elephants in a single year, to supply ivory to the illegal markets in China and the Far East. If this continues, elephants in many countries in Africa will be facing extinction within a decade. The poaching crisis in rhinos is equally stark. What measures can our Government take to draw attention to this crisis and to put pressure, particularly on the Chinese Government, to tackle it?

In conclusion, we have been a leader in international development and have played a pivotal role in ensuring progress in Africa. I hope that the Minister, in winding up this debate, can either write to me or give me some assurances that we are taking a proactive approach to tackling some of these issues.

00:00

[Lord Selsdon]

My Lords, I must admit to finding myself a little emotionally confused. I have suddenly realised that this is my 50th Queen’s Speech. I have spoken on most of them. One year, I was minding my own business when the Leader of the House asked if I would see him. He asked, “Would you be kind enough to agree to reply to the Queen’s Speech?”. So I put my name down to vote, but I did not know that I would be grabbed and taken off to a dinner where the Chief Whip guarded the door. They then read the speech and I was meant to sit on a Bench and say something.

I was also told that I should wear naval uniform. Having been a sub-lieutenant, I had grown a bit. It was quite difficult to find one to fit, so we had to borrow an admiral’s and take a couple of stripes off it. Then I was given a sword, but I had never had a sword before and did not know what to do. I was seconding the reply to Lady Macleod, who was Iain Macleod’s widow. She was slightly disabled and had a walking stick, and as I stood up to speak I picked up her walking stick by mistake. I remember I was given a wonderful brief by bright young people in the Foreign Office who were twice my age. Everything was provided for me. I was told what to say and that I should possibly deliver some historic joke, so I looked something up and said that I remembered the words of that great admiral Jacky Fisher that the role of Army should be that of a projectile to be fired by the British Navy.

I shall try to work out why all the bits that used to be in the Queen’s Speech are not there. I shall treat the Speech like a Bill. There are 37 clauses. The first states that,

“my Government’s legislative programme will continue to focus on building a stronger economy so that the United Kingdom can compete and succeed in the world”.

As my noble friend Lord Howell mentioned, there is hardly anything in it about defence or anything at all.

We come to foreign affairs. Is the EU a foreign affair? Are members of the continent of Europe foreigners? Of course they are foreigners in the eyes of British subjects. They are not Europeans, and nor are we. I was told that I would be treasurer of the Conservative group for Europe to raise a lot of money and go around the country to persuade people to vote yes in the referendum. In that House, we had a great debate on entering the EU—the EEC as it was then called—and had the biggest majority, other than for the abolition of hanging. There was an enormous majority in the House of Commons, but suddenly people became anti something. I was asked and it was my job. I would go around the country, speak and raise money. I drove all around the country, not realising that the party was sufficiently intelligent to believe that I was young enough to be able to take the strain.

I was told that I was going at the last moment to Manchester and that it was a dinner jacket do. I did not really have a dinner jacket that fitted, but I put it on on the train and when I got there, a dinner-jacket chap came up to me and said, “Oh, thank goodness you’ve arrived. We thought you’d forgotten or you couldn’t get back in time”. I went to the dinner and sat there waiting to make the standard speech I had, slightly nervous, I am afraid, as I am now. The head man turned to me and said, “Well, Professor, if you’re ready, please deliver your address”. I said, “Excuse me?”. He said, “You are Professor McCluskey? You’ve just come back from Antarctica haven’t you?”, and I suddenly realised that I was at the wrong dinner.

People like me became known as the Snopake speakers. If the Minister was too tired to go, they would send a young blade who could hang himself. You would go and scratch the menu and the Snopake would come off and you would try to see what was underneath. It might say “law”, and you knew it was probably Willie Whitelaw.

I went round this great country of ours and realised to my surprise that there was a great opportunity. At that time, we coined the phrase: “Britain in Europe; it’s our business to be there”. It was business related, not politics related. I believe that is one of the problems at the moment: how do we divide it into two? How does the Labour Party, which flatly refused to send a delegation to the European Parliament in the beginning and we then had to fund Peter Kirk going, change around? If we look to moving towards a referendum, is there suddenly going to be a switch of attitude?

The world is a wonderfully large place. I have been privileged in recent months to have some remarkable briefs by bright people in the Ministry of Defence and the Foreign Office and genuinely believe that we have a worldwide role. My noble friend Lord Howell pointed out that the Commonwealth has not been quite so widely mentioned, but if you look at the opportunities that exist, you must go back to why we went to places in the beginning. We went because they had raw materials and the ability to produce things.

I was put on to go to the francophone territories. I did not know what “phone” meant. I knew gramophone. When I was on the Council of Europe, I was in Paris and I was asked whether I would go and meet the Foreign Minister of Mauritania. I thought Mauritania was a ship; I did not know it was a country or that it was one of the biggest iron producers in the world. Until I went round all the French territories, I did not know that the sole reason why people had gone to them was to create added value for the natural resources, whether they were labour, water, agriculture or sun.

I really believe in the potential that we have with the Commonwealth these days, if we just get out our historical atlases and look at what we used to go there for. Then we look at the sea. Naturally, and I have raised this before, we look at the economic exclusion zones. You find the United Kingdom, her overseas territories and the Commonwealth occupy the biggest slot of the sea in the whole world. If you then, by chance, look at some other countries, such as France and its territories, you realise that the maritime world is the most important of all and you have a great opportunity.

I have spoken before on all aspects of trade, but I get quite excited now as I look at the potential that exists for alliances that we can pool. I really believe that foreign policy is one of the most important issues that we can address today, and who is going to decide with whom we are going to do what and when.

22:00

[Lord Loomba]

My Lords, I am grateful for the opportunity to contribute to this debate. The topic of my speech is international development.

British aid to India will end officially in 2015, a decision that has caused controversy among politicians and charity organisations alike. Some people say that if India is able to afford a multi-million pound space programme, then she has reached a position of development where aid is no longer needed. Others rightly point to the grim reality that for many people in pockets of India it is in fact one of the worst places in the world to live today.

It cannot be denied that both points are true, but where does that leave Britain? Personally, I take the same stance as the right honourable William Hague, that since we can and should recognise India’s position as a growing superpower, there must be a shift from simply providing aid to fostering skills and training. This is true of many other countries around the world. It will ensure sustainable development for the future of developing countries, as opposed to dependent growth.

It is also important to note that the term “development” is not restricted to economic prosperity. India is an example of a country seemingly rich with its booming economy, but desperately poor given its dismal living standards. When we look at a country’s development, we need to look not only at its economy but its health standards, literacy rates, social progress and promotion of fundamental human rights.

Living standards are often far worse for women, and in India the issues faced by widows can make their lives barely worth living. This is particularly important, since although women make up just over 50% of the world’s population, they account for 70% of the world’s poor. Through a transition from giving financial aid to delivering skills and training, we can try to address this gap. I declare an interest as the founder of the Loomba Foundation, and I have seen this gap myself through my foundation’s most recent sewing-machine project in my home state of Punjab and in Andhra Pradesh. At present, we are in the process of empowering 10,000 widows in India by providing each with a sewing machine and skilled training to make garments. This offers them much more than a lifelong skill. It gives a widow the opportunity to generate her own income. It gives her back her dignity, independence and the real chance of a future.

These effects are not limited to a widow as an individual, but extend to her children who no longer need to sacrifice their education, and to her family who no longer need to live from hand to mouth. She has, in essence, lifted herself and her family out of poverty—and that is one less family to add to the statistics. The principle goes back to the age-old saying: teach a man to fish and he will never go hungry. The same can be said in the case of development and a woman’s place in its process. Educate and empower a woman and you save a family, eliminate poverty and develop a country.

My noble friend Lord Hussain just spoke about the political situation in Bangladesh. However, if we look at its economic situation we can get a better understanding of the vital role that women play in development. Bangladesh was once dismissed as having no hope of a future, but today it is hailed as a model of development. In the past decade, Bangladesh has slashed its poverty by half, ensured that 90% of its girl children are enrolled in school, moderated population growth, limited child mortality, increased life expectancy and ensured overall social progress for all. This success has, in large part, been due to the empowerment of women, not only through education and family planning but also through microcredit schemes aimed at giving out tiny loans to the destitute, thanks to Muhammad Yunus.

What has emerged as a result is a picture of growing prosperity. By no means is Bangladesh developed in every sense, but grass-roots development is taking place, which is important in signalling sustainability. Therefore, as we go back to the issue of aid and international development, I feel that the solution lies in investment in women’s empowerment through skill training and education. I hope that the Minister agrees with me, and that he will push for the vocational skill training and empowerment of women as an integral part of international development.

22:07

[Lord Weidenfeld]

My Lords, just as Syrian territory has become a mosaic of every brand of political and religious extremism and operational terrain for barbarous practices, neither the USA nor Europe is in the mood to intervene decisively on the ground or in the air—shades of Iraq and Afghanistan. So in parentheses, the tragedy of at least one of the Iraq campaigns lies not so much in its moral deficit but in its inadequate preparation and execution. Frankly, can the overthrow of that most savage and inhuman regime in Baghdad, fielding one of the largest armies in the world, be held to be a deep moral error?

In the case of Syria it may well be that by now the choice between the brutal Assad regime and some heinous elements from the terror scene must be extremely difficult, but had the West reacted much earlier, before Islamic fanatics crossed the porous borders of Syria, we might have avoided the present, most distressing, situation.

I fully agree with the analysis of the noble Lord, Lord Ashdown, that this war in Syria is a war of religious sects within the larger frame of the great faith of Islam—probably one of the bitterest fights between the sects. However, it is even more complicated than that, because both the Sunnis and the Shia are not united. The Sunnis are divided into those who take their cue from the House of Saud and from some of the emirates, and the Wahhabis; the others, such as al-Qaeda and other splinter groups, are much more radical, and indeed hate the guardians of the holy places. Among the Shia are the Alawites and the pro-Assad faction, and the much more powerful and decisively important followers and liegemen of Iran, which of course wishes to become the great power in the Middle East.

When aspects of existential threat to a peaceful neighbour are implicit in the present situation in Syria, the civilised world must understand and not decry the initiatives of a seriously threatened country. I refer to the Israeli air strikes on a research institute, storage facilities and convoys of the most sophisticated, up-to-date rockets on their way from Iran through Syria to Lebanon and destined for Hezbollah, a movement which, in word and deed, stands for the elimination of the State of Israel.

One of the grim leitmotifs of the political and religious wars on Syrian soil is the ambition of Iran to thwart an international campaign of economic boycott and possible military action by establishing a second front in Lebanon by raining tens of thousands of rockets on Haifa, Jerusalem and Tel Aviv, and in the mean time amassing an arsenal of 60,000 rockets that are meant to have a harassing and demoralising effect on Israel’s citizens. When the stakes are so high, sniping criticism of the Israeli Government from the outside world, some of it full of bile and bias, is at best unfair and at worst irresponsible. Israel’s intervention renders a signal service to the cause of peace by weakening Assad’s strongest partner and arms procurer, Iran.

The recent visits of President Obama’s Secretaries of State and Defence to the region may hold out a flicker of hope and faith in the resumption of bilateral talks between Palestinians and Israelis. Enemies of a two-state solution in the Arab world have gained ground since the Arab spring because neither the Muslim Brotherhood-controlled Egyptian Government, with their links to Hamas, nor restive forces on the West Bank reluctant to drop sweeping preconditions make compromise easy. However, there is a more realistic outlook in the Gulf emirates and above all in Saudi Arabia and Jordan. On the other side, recent Israeli elections have brought new forces to the fore which consider a two-state solution the only desirable outcome. If Obama were able to rival President Clinton’s solid personal engagement, and if Europe seconded him, the chances of success would grow exponentially. In parentheses, ironically and sadly, the possibility of Europe playing a part comes at a time when we are discussing whether we should be in or out of the European Union.

For peace talks to succeed we could now have spokesmen on both sides who are filled with good faith. In Mr Netanyahu’s Government, Mrs Livni and Mr Lapid, a rising star, are passionately committed to an honourable agreement. The Palestinian Authority should make use of that remarkable man, former Prime Minister Salam Fayyad, who with President Abbas’s help could be reinstated. The Arab League, Saudis and Jordanians can be trusted to opt for peace, but it is a challenge for all of us throughout the world to work for reconciliation and to avoid offensive and provocative initiatives.

In conclusion, I will express my deep regret that the great scientist and humanist, Stephen Hawking, felt that he should boycott a scientific conference in Israel under the auspices of the one man who has always stood for peace and close co-operation between Israel and all her Arab neighbours: President Shimon Peres. Academic boycott strengthens the enemies of free speech and, in its radical forms, one must classify these associations of academics, certain human rights groups, trade unions and professional organisations as either innocent “useful idiots” or intentional handmaidens to the enemies of freedom.

22:15

[Lord Bates]

My Lords, many noble Lords have highlighted the essential work being done by our courageous servicemen and servicewomen around the world in protecting us at home from the global terrorist threat. I join in paying tribute to their service and what they are doing for us. But there is another global war—the war against poverty. Many British NGOs and people who work for them are putting themselves in harm’s way in very difficult countries and situations to provide healthcare, sanitation and education to the world’s poorest—organisations such as Save the Children, Christian Aid, Oxfam, CAFOD and the British Red Cross. We can be equally proud of their work in the name of this country and what they do to represent our interests.

According to the most recent global terrorism index, there were 4,564 terrorist incidents, resulting in 7,473 deaths, in the past year. Most of those incidents have been clustered in Syria, Afghanistan, Pakistan and Iraq. In the global war against poverty, we live in a world in which 11 million children die each year from preventable diseases. In the six hours so far of this debate, more children have died from preventable diseases around the world than have died in the entire previous year through terrorist attacks. That is not to minimise one and emphasise the other, but it is very important that we remember that.

When I say that those diseases are preventable, research shows that 6 million of those 11 million children who die each year could be saved by low-tech, evidence-based and cost-effective measures, such as vaccines, antibiotics, micronutrient supplementation, insecticides and bed nets. They could make a profound difference to people’s lives. Supplements of vitamin A taken every four to six months can reduce child mortality from all causes by as much as 23%, measles deaths by 50% and deaths from diarrhoea by 33%.

Bill and Melinda Gates have done so much in this area. In fact, the Bill & Melinda Gates Foundation has already dispensed £21 billion, which is three times the level of the entire British aid budget, as existed last year. It has given that money to seek to eradicate certain diseases. Bill Gates said:

“All you need is over 90% of children to have the vaccine drop three times and the disease stops spreading. The number of cases eventually goes to zero. The great thing about finishing polio is that we’ll have resources to get going on malaria and measles”.

There is a realistic possibility, presented by Bill and Melinda Gates, of the eradication of those diseases that kill so many children in our world. That is not surprising, given that I regard this Government’s commitment to achieving 0.7% of GNI and their realisation of that as perhaps their most significant political decision, and one of the most courageous political decisions that I have ever witnessed. To raise it to that level, to increase over the past year, at a time of acute economic hardship, the budget for overseas aid by almost £3 billion, is something that required real leadership. It would have been the easiest thing in the world to capitulate on that and pander to some of the populist press, which would prefer that the money was spent elsewhere. But David Cameron has shown immense leadership and courage in standing firm on that, which is something for which he deserves credit and in which we can all take great pride. While Britain is increasing its aid budget in the current year, other countries in Europe such as Germany and France are cutting their aid budgets. Even Sweden is cutting its aid budget this year by 3.3%. It is a tragedy that this should be the situation when the war on poverty was beginning to be won and victory was getting closer. However, we wish the Prime Minister well in trying to bring people to the table.

Some people have made the point that what we actually needed in the gracious Speech was a piece of legislation to tell us to do what was morally right. Personally, I do not think that we need a piece of legislation. We have had endless promises from the UN. The 0.7% commitment goes back to the Pearson commission in 1969. It has come up through the OECD, it was raised at the UN Security Council and at the Gleneagles summit and still has not been honoured. However, today, it is being honoured. There ought to be an annual debate about the world’s poor. We ought to see that as a conscious moral choice and an obligation. I would not want to see a piece of legislation take that away and be almost like a direct debit. I would like it to be seen as a constant ongoing debate in which we remember the world’s poorest.

In conclusion, there is a wonderful campaign at present called the “If” campaign. Sometimes charities and NGOs can compete with each other for resources and projects. However, they have all come together around the simple concept that there is enough food for everyone and yet 2.3 million children die each year because of malnutrition. The Prime Minister, who organised a hunger summit during the Olympic Games on 12 August last year, made a pledge to reach 25 million children under the age of five by the time of the Rio Olympics in 2016. There will be a follow-up hunger summit on 8 June in advance of the G8 summit. It is critical that the Prime Minister uses all his considerable diplomatic skills to encourage other members of the G8 to step up to the plate this time. Things are extraordinarily tough for us economically but nowhere near as tough as they are for the bottom billion and the poorest in our world.

22:22

[Lord Grenfell]

My Lords, when I noted that my name was in the 50th position on the speakers list, I was minded to dig out an old after-dinner speech and seek to entertain your Lordships for a few minutes. However, I am very happy to note that the noble Lord, Lord Selsdon, in his inimitable way, has pre-empted me on that.

With your Lordships’ indulgence, I would like to say a few words by way of preface to my main remarks on the way in which we conduct these debates on the gracious Speech. I have always found the structure bizarre. Why can we not segment each daily debate and group the speakers so that those who wish to address one topic can follow each other, permitting the Minister or Whip speaking for the appropriate department to answer speeches focusing on that topic before we go on to the next topic, which in turn would be answered by the Minister or Whip answering for the relevant department, and so on? I pity the poor Ministers who have to wind up at the end of an eight-hour debate which has covered issues in the remit of as many as five different departments. Capable as they are, it is an unreasonable burden. It is cruel and unusual punishment. I believe that a sequenced, segmented debate would bring greater coherence and maybe even greater interaction among speakers addressing the same topic. In my humble view, both Front and Back Benches would benefit. I should say that I am not expecting the Minister to react to this because it is a matter for the House, not the Government.

I now come to the substance of my brief remarks. I need hardly remind the House that the word “Europe” is nowhere to be found in the gracious Speech. The Prime Minister’s staff seem to have obeyed the instruction to eschew the “E” word with even more zeal than did the staff of “Fawlty Towers” when instructed not to mention the war, but it has not done the Government any good. Within hours they were embroiled, yet again, in their own internal war over an in/out referendum.

In a debate on the humble Address, custom allows us to comment on matters related to, but conspicuously absent from, the list of measures that the Government have just announced in the gracious Speech. That is just as well, for otherwise this year’s four-day debate would be remembered as the one in which never had so much been said by so many about so little. Therefore, I, like others who have spoken before me, will dare to use the “E” word, but in relation only to the question of a referendum. I do this within the framework of today’s debate because the shape of our future relations with not only Europe but the wider world will be determined by the outcome of any referendum.

Let me at the outset lay my cards on the table. My right honourable friend the leader of the Opposition is absolutely right when he says that Labour will not commit to an in/out referendum by a set date, and he is equally right not to rule out a referendum when the time is judged to be ripe. Therefore, when Tory spokespersons and some of the media tell us that Labour has once again made clear that it will never trust the British people to have their say and opposes a referendum, they have, to put it charitably, either misread what the leader of the Opposition said in his address to the annual conference of Progress last Saturday, or they are deliberately making a misleading statement. What is at stake is the national interest. My right honourable friend said in his speech that,

“our national interest lies in staying in the European Union and working for the changes that will make it work better for Britain”.

That is the logical approach. Europhile though I am, I am not blind to the huge shortcomings in the structure and functioning of the European Union. There is deep thinking and massive work to be done to make the Union fit for purpose—to serve the peoples of all its member states, with their full participation in that process of reform and their consent to its outcome.

Those looking for an early exit are in reality saying, “It’s broke, it can’t be fixed, and we want nothing more to do with it”. Any idea that Britain might offer its wisdom and skills to help to design a better Union is alien to them. They are the defeatists. Others, such as the Prime Minister, say, “Let’s negotiate a few concessions from our fellow member states and then see if the British people will buy them”. As the noble Lord, Lord Lawson of Blaby, has correctly observed, such concessions are bound to be inconsequential. At least I can agree with him on that.

The case for staying in cannot be credibly made, let alone won, on the basis of inconsequential concessions. The people will not be fooled by that. The case for staying in can be credibly made and eventually won only when, with Britain’s help, serious reforms are agreed and put in place to the satisfaction of all its members. It is to this that we should be now turning our minds and applying our best efforts. It is a daunting challenge but, together with our European partners, we can meet it. There are plenty of interesting ideas being discussed here as to how we might best fashion a more flexible two-speed or two-tier European Union, more accountable to national parliaments and people, in which those inside the eurozone and those outside it respect each others’ rights and preferences and work together to each others’ advantage. The noble Lord, Lord Maclennan of Rogart, suggested a possible way forward to that end.

The Government should engage fully with other EU Governments to develop these ideas and not simply go whining to them for concessions that irritate them and do little, if anything, for us. For those who accept this approach, it follows logically that you call a referendum when you are able to show the people what a reformed Union looks like. Will we know by 2017? If we do, we could go ahead with a referendum, but it could well take longer than that. Why, therefore, commit to a referendum with an irrevocable deadline, and so far in advance? It makes no sense unless you are determined to invoke Article 50 and embark on a long and complex negotiation to leave the European Union, whatever the reform process might produce.

I should like to see a Government who have the courage to say to the people, “Let us see what we can do to make the Union work for all of us. Give us the time to achieve that”. That will take political courage, and I am convinced that my right honourable friend Ed Miliband has that courage. Political courage has not been much in evidence of late in the European corridors of power. I recall what the Prime Minister of Luxembourg, Jean-Claude Juncker, said five years ago as the great financial crisis unfolded. He said, “We know what needs to be done but we don’t know how to get re-elected when we’ve done it”. Spoken half in jest maybe, but he correctly identified what lies in the back of the minds of too many leaders facing tough decisions. We need more leaders with the courage of the German Chancellor Gerhard Schroeder, who in 2003 set out his Agenda 2010 to reform his country’s social system and labour market to improve economic growth and reduce unemployment. It was deeply unpopular in his own Social Democratic Party and many thousands of members left the party, but he persevered even though he knew it would cost him the next election, and indeed it did. However, the reforms went through, the eventual effects were what he had hoped for and Germany has benefited from them ever since. That is political courage.

I was therefore heartened last Saturday to hear Ed Miliband once again remind us forcefully that Labour, despite what the Tories claim, will always stand up for the national interest. I take that as a personal pledge, and I trust him not to waver in his stance on the in or out referendum. I trust him not to heed siren voices warning that such a stance, logical as it may be, could nevertheless cost him and his party dearly at the next election. I hope that the party will stand with him in rock-solid support.

Charles de Gaulle once remarked that, since a politician never believes what he is saying, he is always astonished when others believe him. Of course, the general, throughout his life, held a pretty jaundiced view of politicians. And so, it seems, do most of the British people these days. If we are to restore confidence in the political class, we, with our differing political labels and beliefs, have to say what we believe is right and in the true national interest, not, as so often, what we think will gain us short-term political advantage. In discussing our future relationship with the European Union, and in acting in concert with our European partners to fashion a Union fit for purpose for all of us, that must be our guiding principle. We must show that de Gaulle’s perception of politicians does not apply here.

22:31

[Lord Hennessy of Nympsfield]

My Lords, I declare an interest as a member of the Chief of the Defence Staff’s Strategic Advisory Panel, although naturally I speak this evening in a purely individual—perhaps even eccentric—capacity.

Unlike any previous Parliament in the years since 1945, we know when the next defence review will take place. By my calculation, it will be the 12th such review since VE Day and we will receive it in the autumn of 2015, a few months the other side of the May 2015 general election if the coalition does not collapse in the mean time and the House of Commons activates the get-out clause in the Fixed-term Parliaments Act.

Whitehall, quite rightly, is already gearing up for the next defence review with a series of preparatory papers already commissioned by the Cabinet Office on geographical areas of concern and functional topics of various kinds. As in the autumn of 2010, the 2015 strategic defence and security review will be twinned with a new national security strategy document.

I have considerable sympathy for the framers of the 2010 SDSR and NSS. They had to work at great speed and against a financial backdrop that resulted in the combined exercise possessing the characteristics of a fistful of absolutely desperate spending reviews overlain with the thinnest patina of strategy. The 2010 productions reflected, too, the usual British tussle between what Paul Cornish and Andrew Dorman have aptly described as “smart muddling through” and “grand strategy”.

There was, however, only one passage in the 2010 national security strategy which, to be a trifle unkind, clings to the velcro of memory. It was written under instruction to be boring and, my Lords, it succeeded. The sentence that stands out is truly in technicolour and it is in the introduction:

“The National Security Council has reached a clear conclusion that Britain’s national interest requires us to reject any notion of the shrinkage of our influence”.

I am a convinced supporter of the idea of a National Security Council. I think that it is an innovation of the Prime Minister that will endure. However, this product of its collective wisdom was a mixture of Tommy Cooper-style “just like that” assertion of the worst political kind and hubris, not least because the very next day the strategic defence and security review revealed that several of our instruments of influence in the world were going to be reduced—indeed, shrivelled —substantially.

The next pairing of NSS and SDSR in 2015 must do better than that. It must not fall into the trap described by the great cosmologist Carl Sagan of confusing hopes with facts, as the unfortunate 2010 NSS declaration plainly did. I respectfully suggest to whoever finds themselves in government in the summer and early autumn of 2015 that they open the next National Security Strategy document with a different kind of introduction. A 2,000-word essay—no more than that is needed—of Britain’s place in the world, the range of resources we can realistically apply to whatever aspirations the following pages display, and why and how we should deploy those resources effectively and successfully when and where we can.

I share the impulse that we should strive to be a force for good in the world, but in 2015 Parliament and the public will need a long, deep, illusion-free look at our country’s appetite to remain a global player given our size, wealth, population and economic capacities. None of the previous 11 post-war defence reviews did this satisfactorily—not one of them. Such a think piece must pass the Sagan hopes and facts test, too.

Allied to such an essay we would benefit from two extras. First, a statement of what the 2015 Government believe are the core musts of British defence provision. My list would be—and it is only a personal list—air defence of the UK; home defence of the UK, not least against cyber attack, and including the capacity of the Armed Forces to bring aid to the civil authorities if required; the sustenance of the UK nuclear deterrent; the security of the eastern Atlantic and the near north; maintaining our NATO commitments; and our duties to the Falkland Islands and Gibraltar. After this can come the almost limitless list of “wouldn’t-it-be-nice-to” if we had the kit, the money, the allies and the legal cover.

On the resources front, the drafters of and customers for the 2015 SDSR and NSS will need to remember the lessons of defence reviews past. Full funding for the settlement agreed is rarely forthcoming and unforeseen events usually change the picture, sometimes dramatically, in the periods between reviews.

On that score, horizon scanning is enjoying a welcome revival and boost across Whitehall, and not only in the politico-military departments, thanks to a review commissioned by the Cabinet Secretary, Sir Jeremy Heywood, last year and carried out under the supervision of Jon Day, the chairman of the Joint Intelligence Committee. It was declassified in January.

Finally, that second extra to a possible opening think piece in the 2015 National Security Strategy. We have up until now had three years’ experience of the National Security Council and its supporting apparatus at work. Might this be the time to review how all the inputting departments and agencies have adapted themselves to this new and welcome broader-gauge approach which, in structural terms, is better than any of its predecessor Cabinet Committees since 1945? An audit and a capability review of all these inputs would be of real value and a summary of its findings could be included in the National Security Strategy of 2015.

We can as a country do a great deal of good in the world, but let us not over-reach, let us not over-preach, and let us do in the world what we sensibly can with the skills and the capacities with which our history has endowed us, but no more than that.

22:38

[Lord Dobbs]

My Lords, it is always a pleasure to follow the noble Lord, Lord Hennessy—I would follow him almost anywhere—but not on this day his logic and his argument.

I wish to say a few words about Syria and the tragedy that is being played out there. More than 80,000 have already been killed and there will be many more to come. It is only right that we want to help and, as my noble friend Lady Northover indicated earlier, we are doing so. Yet, there is always the law of unintended consequences that dogs our every step in the Middle East. Syria is not a country or a crisis in isolation. It comes with the context of so much that has gone before. Let us take Iraq, for instance. It is almost exactly 10 years since we invaded, and yet all those years and all those lives later, Iraq is a country still beset by religious and ethnic division and consumed by corruption. We invaded the country genuinely committed to supporting democracy, human rights and western values. We left that country with the images of Abu Ghraib and Guantanamo Bay burnt into our reputation, and into the imaginations of a generation of young Arabs. Those tiny, irritating, unintended consequences have bitten us hard.

Much the same might be said of our involvement in Afghanistan. Earlier, the Minister said that we are “on track”, but we shall see. We have troops on the ground, so I want to be extremely cautious about what I say, and as the president of the Langford and Wylye branch of the Royal British Legion, I want very much to pay tribute to the servicemen of our Armed Forces and the sacrifices that so many of them have made. But there is one question above all others that must be asked when we consider these issues. After all these years and the expenditure of lives and treasure in our war on terror, have we succeeded in making Britain a safer place? Unless we can say that that is clearly the case, that Britain is more secure, we must at least consider the possibility that the policy we have been pursuing has been wrong.

I want to put this into a little more context before I get to Syria by talking about Libya. We overthrew Gaddafi, a man who we had once armed, just as we had once armed Saddam Hussein, and even Osama bin Laden when he was fighting the Soviets. The law of unintended consequences had a field day with that one. It is still too early to measure the success in Libya. There is still widespread violence and lawlessness, and despite all the support we have given to the new Libyan Government, we seem to be no closer to discovering the truth behind the Lockerbie bombing or bringing to justice the killer of PC Yvonne Fletcher. It is not just truth or justice that have disappeared into the sands, so has Gaddafi’s enormous arsenal of weapons. Some 20,000 surface-to-air missiles, artillery pieces, mortar rounds and much more have flown away and found new homes. Those weapons are now turning up in new hotspots in north Africa and the Middle East—Algeria, Niger, Mali, Somalia and, of course, Gaza, although that is scarcely a new hotspot. These are more unintended consequences.

Some of those weapons have turned up in Syria as well, contributing to the bloodbath and the inhumanity. As a result, it is being argued with increasing passion in some quarters that we must do something, go further, arm the good guys. I understand the deep humanitarian concern that lies behind such suggestions. The Minister herself as good as said something earlier today about amending the EU arms embargo and facilitating a negotiated solution, but putting more weapons into that area might also facilitate an even greater catastrophe. The war in Syria, as we have heard from many speakers in the debate, is not simply a civil war, it is part of a war of sectarianism that is burning across so much of the Middle East. It is a war of opposing ideologies, tribes, cultures and religions; a kaleidoscope of confusion.

That raises a question: if we intervene, just who are we supporting? Simply being an enemy of Assad does not make any group a friend of this country. The Middle East is not a pick-and-mix sweet shop. It is a cauldron of subtle and shifting loyalties that in the past we have had little success in understanding, let alone exploiting. It is being argued in some quarters, possibly even implied in what the Minister said in her remarks earlier, that because Assad’s arsenal is huge, we must give the rebels more and thus level up the playing field—or level up the killing field. It is suggested, for instance, that we supply items such as body armour, which does not kill. No, it does not, but the weapons in the hands of those wearing the body armour will most certainly kill.

I believe that, so far, the Government have got our policy in Syria right. They have provided humanitarian aid and there must be more—much more—of that. We have supported our great ally Turkey, whose interests and frontiers are so directly threatened. The Prime Minister has emphasised the need for an international solution. He has gone to Russia and talked with others in the Middle East in the attempt to find some common ground and to isolate the conflict. We should also talk to the Iranians, if we can, after their elections in a few weeks.

Talking may not find any easy solution, but there may be no solution of any sort in Syria, not for a few years. We lack the ability to make it otherwise. Sometimes it is braver and far wiser to resist the siren call to arms and to do less rather than to promise more. We should be providing no military equipment of any sort to the conflict in Syria. We should instead remember that there is no tragedy in Syria that cannot be made far worse by misguided western intervention and by allowing ourselves to be caught, yet again, by that unavoidable law of unintended consequence.

22:46

[Lord Palmer of Childs Hill]

My Lords, we have heard excellent speeches today, covering so many areas not included in the gracious Speech. I will focus most of my remarks on the defence reform Bill, which is mentioned in the gracious Speech.

I welcome the Bill as it addresses the fundamental areas of defence that have needed urgent attention for some time. Although the detail is needed, at least it sends the signal that the coalition Government are serious about improving procurement. I trust that no noble Lord in this Chamber is calling for the status quo to be maintained where defence procurement is concerned, but that does not mean that we can leap straight into any particularly new model without careful scrutiny of the proposals, as the noble Baroness, Lady Dean, said so eloquently. One lesson from my experience of outsourcing is that a service that is badly run in-house is unlikely to be transformed overnight simply by letting a contract with the private sector for that service. My noble friend Lord Lee has set out many questions about the GOCO alternative and I am sure, in due course, that the Minister will reply to that book of questions, which were, I believe, asked from such a very positive stance that they need to be answered.

The Royal United Services Institute has rejected the GOCO idea as “undemocratic” and said it would put the power in the hands of defence contractors, on the basis that the MoD is not good at negotiating contracts with the private sector. The main question is whether the MoD should negotiate contracts with the private sector to negotiate on its behalf. I do not agree with the rejection of the proposals, but I have some questions. How will the contractors’ fees or commission be calculated? Would it be possible to keep some procurement in-house if the purchases were non-contentious, such as buying off the shelf? Why pay commission if it is so easy to purchase? Can the Minister make clear that the contractor will not itself be a defence contractor in any way? What safeguards will there be to avert conflicts of interest? How would a contractor be picked? Sadly, in this global world, many firms have connections which would make that conflict of interest quite difficult to avoid.

A newspaper has reported that Defence Equipment and Support consists of 16,000 civil servants. A couple of noble Lords have said that today. If this is true, a light-hearted observation at this time of night might be: how many members of MoD staff does it take to change a light-bulb? Sixteen thousand is a lot of people. My noble friend Lord Lee asked if this meant that we could not put our house in order. I am afraid that we do seem to be unable to put our house in order. If we were able to reduce this 16,000 down to, say, 1,000 to deal with the intelligent customer function, as is proposed, that model needs be looked at very carefully. There is also a MoD warehouse full of equipment and parts. What is the value of this stock, and should moves be made to sell off the items so as to realise the cash and save costs on the warehousing?

This debate has covered a number of subjects, including the Middle East. I do not want to dwell on it but will make one or two points on the Israel-Palestinian impasse. My noble friend Lord Alderdice very clearly put the case for a regional solution using the Arab peace process. That is certainly a way forward. But my point, which I have often made in this Chamber, is that peace is not possible, a Palestinian state is not possible and a secure Israel is not possible unless both parties come bilaterally to the negotiating table without any preconditions. If that happens, there may possibly be a state of Palestine and a more secure State of Israel, but if it does not, I guarantee that there will be no peace.

My noble friend Lord Ashdown made a very potent case about the treatment of the Afghan interpreters. I hope that my noble friend the Minister will take that forward in his answer. My noble friend Lord Ashdown also talked about whether we should lift the Syrian arms embargo, as did the noble Lord, Lord Dobbs. I agree with them that we should not supply more arms to Syria.

The noble Lord, Lord Ramsbotham, made an explosive intervention about Trident, which I heartily endorse, and I hope that my right honourable friend in the other place who is dealing with the review of whether there should be a like-for-like replacement for Trident will take those remarks, which were so well put, very much to heart.

My noble friend Lord Chidgey put a very potent case for food security, particularly in Africa, and other noble Lords have said the same. I hope that my noble friend the Minister can address that in his reply.

My noble friend Lord Sharkey and others talked about the 0.7% aid target, and a comment was just made about the fact that there was no need for legislation. We must all take pride that we have got to the 0.7% without any legislation, but I confirm to noble Lords that the Liberal Democrats are committed to putting this into law.

We hear discussion of the Ministry of Defence becoming a more intelligent consumer, but we must hear in concrete terms how this transformation is to take place. It has been promised many times over by different Administrations. Overall, I think many in your Lordships’ House believe that a deep change in MoD culture is needed, particularly in procurement, but we will need to be persuaded—and I hope we will be—that the GOCO proposals really are the answer to our procurement problems. We have heard today from sceptics about GOCO but I wonder what their solution would be. I am convinced that real change is needed and I hope that when my noble friend the Minister replies the fears expressed today can be addressed.

We heard from a number of noble Lords about Europe. During the passage of the defence reform Bill, I hope that we will value the pooling of resources within the European Union. European Union countries spend about €200 billion on defence. In these financially pressurised times, there are strong arguments for looking for opportunities for joint procurement. The recent paper Europe’s Strategic Cacophony says:

“Europe’s defence ambitions are crippled by the lack of a common strategic outlook”.

There are so many ways in which we must progress the reform of procurement and I hope that we will do that with the defence reform Bill when it comes from the other place.

22:54

[Baroness Stern]

My Lords, I feel very privileged to have the 54th slot on the speakers list and to be the last Back-Bench speaker in this fascinating debate. I want to concentrate solely on matters relating to the International Criminal Court.

I welcome warmly the support that the UK Government have given to international criminal justice before and since the Rome statute came into effect. I paid a visit to the court last month under the auspices of the parliamentary network, Parliamentarians for Global Action. The officials whom I met at the ICC spoke most warmly of the UK Government’s support for the ICC system and for the co-operation extended to the ICC in its investigations and prosecutions. The UK was one of the few states to condemn the visit of Omar al-Bashir, for whom the ICC has issued an arrest warrant, to Chad. All that is much appreciated.

The court is now at the beginning of its second decade of applying the rule of law to crimes against humanity. The Foreign Secretary said in March:

“I am pleased to hear today that Bosco Ntaganda is on his way to The Hague. This is a hugely significant day for victims of conflict in the region. I hope it will contribute to a resolution of the problems in the eastern DRC along with determined efforts to implement wider peace agreements”.

When he said that, he summed up the huge change that the existence of the court has brought to victims, to helping resolve conflicts and to bringing peace.

The Rome statute represents a leap forward in international criminal justice in a number of respects. First, the court has severe punishments for those who are convicted, but it does not have the death penalty. That sends a message around the world about the proportionality of the use of the death penalty in those countries which retain it. I particularly welcome that, as I chair the All-Party Parliamentary Group for the Abolition of the Death Penalty.

Secondly, the court gives victims a right that they never had before to participate in court proceedings by expressing their views and their experiences through their own legal representatives. Victims also have the possibility of reparations. The UK Government’s announcement of a contribution of a further £0.5 million to the criminal court’s trust fund for victims, the third such contribution, is enormously to be welcomed.

Thirdly, the court has the most advanced gender provisions. The Rome statute is the first international treaty to identify crimes against women as crimes against humanity, as war crimes and, in some cases, as genocide. These provisions are all exemplary. The Government’s initiative on sexual violence and the G8 declaration on preventing sexual violence in conflict are a great encouragement to all those trying to respond to this particularly terrible aspect of war and conflict.

Against this background of the Government’s long-term support for the ICC, perhaps I may raise with the Minister just two issues. First, there is the question of the crime of aggression and the Kampala amendments. These are the amendments to the statute agreed in Kampala in 2010 that will enable the court by 2017 to begin a process to exercise jurisdiction with respect to the crime of aggression. Some 30 notifications are needed for the amendments to be activated. The UK played an important role in Kampala in achieving a consensus on the amendments. What is the Government’s thinking now on ratifying the Kampala amendments? Are the Government working with other states’ parties, especially in the European Union and Commonwealth, to encourage ratification? Are the Government proposing to incorporate the definition of the crime of aggression in our domestic legislation?

Secondly, there is the very difficult question of the ICC budget. Clearly there are financial difficulties and the court must seek efficiencies and use its money wisely, but the Minister must be aware of the great concern among a large number of those involved about the approach being taken to the ICC and the imposition of a zero-growth budget. This is happening at a time when more cases are being undertaken and there is wide encouragement to take more action against sexual violence. This approach to the budget could bring the danger that there will only be enough funds for conducting cases before the court, so that all the other work essential for justice to be done will be reduced. In particular there is a fear that work with victims and outreach to affected communities will be seriously impaired. Are these concerns being recognised and addressed? I do not expect the Minister to answer these questions tonight: he has not had very much notice. Perhaps he will be able to write to me sometime in the near future.

23:01

[Lord Rosser]

My Lords, as I am sure noble Lords anticipated, indeed expected, today’s debate has been wide-ranging and has covered a great many issues, from the Chagos islanders to cybersecurity and attacks. That was inevitable in a debate covering Foreign Office, international development and defence matters. However, that is not in any way a criticism. Particularly in a far from secure and stable world, defence policy, foreign policy and our international development goals should be geared towards agreed, co-ordinated objectives and priorities, with our diplomats and Armed Forces working in tandem alongside our international aid and development programmes to deliver them, recognising the role that the use of soft power can play.

Whether that has been the case, or is likely to be the case over the next two years, is another matter. The 2010 strategic defence and security review was not related to Foreign Office or international development goals. It was a straight exercise in rapidly cutting costs at a time when the economy had been restored to growth over the previous nine months. The consequences of rushed decisions were highlighted by a recent National Audit Office report that was scathing about the double U-turn since 2010—which means we are now back where we started from—on the Joint Strike Fighters for our future aircraft carriers. We now learn from Lockheed Martin, the programme’s main contractor, that US Government spending cuts could inflate the overall cost of the F-35 jet fighter, since a reduction in the number of aircraft under construction at any time could drive up unit costs. What is the Government’s assessment of the possible impact of US Government spending cuts on the cost of the Joint Strike Fighter? Has provision been made in the budget for an increase in cost or would such an increase mean that we have to purchase a smaller number of aircraft?

An indication of just how rushed was the 2010 SDSR came when the Government told us it could be some months—up to another seven months from now since the phrase used was “later this year”—before they could make a decision on whether to offer Afghan interpreters, fearful for their lives as our front-line troops withdraw, the same option to move to this country as was offered to Iraqi interpreters who had served our Armed Forces. The noble Lord, Lord Ashdown of Norton-sub-Hamdon, the noble and gallant Lord, Lord Stirrup, and my noble friend Lady Dean of Thornton-le-Fylde have already spoken on this issue far more eloquently than I could manage.

It seems odd that a Government prepared to make decisions on an SDSR in six months need longer than that to make what is surely a more straightforward single decision on Afghan interpreters. Perhaps it is a case of defence policy being determined by the objectives of others, rather than by co-ordinated Foreign Office, defence and international development objectives. I hope that the Minister will be able to update us on the current situation on Afghan interpreters when he replies and, if he cannot tell us what decision the Government have made, at least explain why it is taking so long to come to a conclusion.

At this point, I refer to the speech made by my noble friend Lady Whitaker and the issue of the Chagos islanders—a matter also referred to by the noble Lords, Lord Ramsbotham and Lord Avebury. The issue is whether they should be able to return to the outer islands. My noble friend referred to the statement made in 2010 by the now Foreign Secretary that he would,

“work to ensure a fair settlement of this long-standing dispute”.

My noble friend asked what the Government were doing or intending to do in the light of that undertaking. I do not know what that statement by the Foreign Secretary was meant to mean. I hope that the Minister will provide a direct answer to my noble friend’s question when he responds.

It is not easy to ensure that defence, foreign office and international development actions are synchronised towards common policy goals if policy is changed for no clear reason. The Government have previously said more than once that they are committed to legislating for 0.7% of gross national income, in line with the UN target, to be spent on international aid and development. Several noble Lords have expressed concern that there was no mention of such legislation in the gracious Speech. No indication has been given about when such legislation may appear. We are now hearing suggestions emanating from the centre of government that UK aid should be redirected to prop up a defence budget facing further cuts—cuts about which the noble and gallant Lord, Lord Stirrup, expressed such powerful concern, to which I await the Minister’s response.

The previous Labour Government’s commitment to meet the UN target of spending 0.7% of gross national income on aid and to legislate on it by 2008 was taken on by the current Government and included in the coalition agreement. I hope that the Minister will be able to tell us what has happened to the undertaking on that legislation in the coalition agreement and what are the Government’s intentions on the issue, including how they consider that the absence of that previously promised legislation will promote international aid and development objectives.

A further area where policy appears to be shifting is over Europe; a number of your Lordships have spoken on that matter. The vision of the larger party in the coalition appears to be that the European Union should be a free trade area and nothing more. The Prime Minister has plans to try to renegotiate the terms of Britain’s membership and then hold a referendum in 2017. Large sections of his party want a referendum on our continuing membership as soon as possible, with a view to securing a no vote. What is clear is that the larger party in the coalition will probably spend much of its time between now and the general election contemplating its own navel over Europe. The statute in this country as it stands provides for a referendum if there is a significant transfer of sovereignty from Britain to Brussels. We have no plans to repeal that legislation. We are not in favour of the status quo and will make the case for reform of Europe but reform, not exit, must be the priority.

The gracious Speech indicated that we will be experiencing a relatively unusual event: a defence Bill that is separate and distinct from the five-yearly Armed Forces Bill. The defence Bill is to address the issue of changes that the Government wish to make in defence procurement arrangements and their intentions in respect of the expansion of our Reserve Forces. There have of course already been changes in the working arrangements between the Ministry of Defence and the private sector, following changes progressed under the previous Government by my noble friend Lord Drayson, which are resulting in improved co-operation and shared knowledge and expertise, particularly in fields of advanced technology, that enable better control of costs and enhanced value for money. It is not clear what impact the changes being contemplated by the Government for future procurement will have on these arrangements, and certainly not what improvement they would bring and how.

The noble Lord, Lord Lee of Trafford, and my noble friend Lady Dean of Thornton-le-Fylde asked the Minister a number of questions about the effect and impact of the proposed GOCO. I will not repeat those questions but I am as interested as the noble Lord and my noble friend are in the answers that the Minister gives. We will want to be satisfied that any proposed changes by the Government will improve the present situation. We will want to be satisfied that any new arrangements involving the private sector will be transparent, ensure that there is value for money and, at the very least, not lead to less information about procurement activity and costs being in the public domain than is the case at present.

The Government’s defence Bill is also intended to help strengthen our Reserve Forces in the light of the decision that with the contraction in the size of our regular forces, the reserves will have a more prominent role. It would be helpful if the Minister could update the House with the progress being made on this issue. What is the most recent assessment of the willingness of business and industry to employ reservists on the basis of the greater commitment that will be required in future, and what is the feedback from existing and potential reservists on their willingness to be away from their civilian career for longer periods than at present? Are the Government still absolutely confident of finding sufficient reservists of the required quality, in the required timescale, to meet the increased role and level of commitment that will be needed under the Government’s future plans? Is there a plan B if the Government’s expectations are not realised and, if so, what is it?

At the beginning of this debate, some hours ago, the noble Baroness, Lady Northover, paid tribute to our Armed Forces—to their bravery and commitment, and to the sacrifice that all too many of them have made on behalf of our country. On this side, we associate ourselves wholeheartedly with those tributes. We owe our Armed Forces clarity and consistency on their role, through co-ordinated defence, Foreign Office and international aid and development policies and objectives. We also owe them a determination to ensure that the resources we provide in all forms are sufficient, appropriate and relevant to ensure that the demands and objectives we place on our Armed Forces can be delivered.

23:13

[The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever)]

My Lords, today’s excellent debate has reminded us repeatedly of the opening words of the noble Lord, Lord Triesman: that we live in an uncertain and unstable world. We are fortunate to be able to rely on the men and women working across the FCO, DfID, the MoD and the agencies. Their dedication to maintaining our security, protecting our interests and promoting our values means that Britain is able to act as a force for good in the world, defending our own citizens and the citizens of other countries when they, too, need defending.

Within the Ministry of Defence, our vision is to deliver a versatile, agile and battle-winning Armed Forces, working effectively with each other and with people ready to lead, to accept responsibility and to spend wisely to protect our security in a changing world. I, too, pay particular tribute to our Armed Forces. Their bravery and professionalism represent the very best qualities our nation has to offer. We owe them, and the families who support them, an enormous debt of gratitude. Their role is difficult and frequently very dangerous. We must never forget the sacrifices that they make on our behalf.

I will now do my very best to respond to the many questions asked during this excellent debate before I run out of time, but if I cannot I will write to noble Lords.

Many noble Lords mentioned Afghanistan. In the Ministry of Defence, current operations in Afghanistan remain our priority. In the light of the changing nature of the operation, we have looked at how we can best deploy what will be declining numbers of troops and smaller amounts of equipment over the next 18 months to deliver the best possible protection to our people while continuing to provide the Afghans with the support they need during this critical transition period.

Brigades deploying to Afghanistan on Operation Herrick have usually done so on a six-monthly basis. This pattern of rotation has worked well for the enduring deployment, but is judged not to be sustainable during the final months of the drawdown period. The Army has therefore decided that the brigade deploying in October—Herrick 19—will deploy for eight months, from October this year until June 2014. The subsequent brigade—Herrick 20—will deploy for six months, from June to December next year when the ISAF campaign concludes, but the deployment could extend up to nine months for a small number of individuals who may be needed to support final redeployment activity post-December 2014. Those eligible will be paid a Herrick drawdown allowance of £50 per day from the seven and a half month point until the end of their tour in addition to their normal allowances.

My noble friend Lord King asked whether we can extract the equipment that we will need. I assure him that we are well on track to withdraw all that we require. We are not putting all our eggs into one basket but are using air, land and sea to bring our kit back.

The delivery of the acquisition and support of defence equipment is one of the key parts of the Armed Forces Bill, as announced in the Queen’s speech. This has been recognised by successive Governments as being in need of reform. There have been attempts to make improvements but, frankly, none has had lasting effect. This Government set up the materiel strategy project to find a radical solution to a persistent problem. The legislation that we are bringing forward will enable us to make the necessary changes should the recently announced assessment phase conclude that a GOCO is the best solution, but we have made no decision as yet. That will follow when we have determined what the marketplace can deliver. The noble Baroness, Lady Dean, asked whether we can have a debate on this issue. I would certainly welcome one and will take it up with the usual channels.

We owe it to the men and women of the armed services to deliver the equipment they need to do the job we ask of them. My noble friend Lord Lee made the point that no other country is currently taking this approach, but that does not mean that we should not. Many are watching with interest, because they too recognise and face the problems that we are trying to solve. I assure my noble friend Lord Palmer that the GOCO contractor will not be a major defence contractor, as potential bidders will have to satisfy us about how they would deal with conflicts of interest. We are not just looking at the market. DE&S+ is the MoD alternative to a GOCO model and is being developed in parallel. The GOCO model will be tested against DE&S+ next year before a final decision is made.

As also mentioned in the Queen’s speech, we are intent on developing the reserves, which were mentioned by a number of noble Lords, including my noble friend Lord Freeman, who I thank for his continued support. The reserves are a vital component of our Armed Forces. As my noble friend said, 29 have sadly been killed in Afghanistan. The reserves have consistently made and continue to make a significant contribution to the nation’s security at home and overseas. Our plans are challenging, but we are determined to stick with them. Looking forward, reserve forces will be central to our new Future Force 2020 structure, forming a greater proportion of the whole force than in the past. Our future reserves will be a fully integrated component of the Armed Forces.

We recognise the contribution that employers make in supporting their reservist employees. We recognise that they have needs and challenges in a tough economic climate, so we shall work with employers to establish better relationships and to enable them to plan ahead for reservist training and mobilisations. As my right honourable friend the Secretary of State has said, we are looking at financial incentives for those employers to whom it matters: small and medium-sized employers.

We need to increase the size of the reserves, but the numbers that we need are well within historic levels. We are investing an additional £1.8 billion over 10 years to help deliver these changes. The new proposition for the reserves will be set out in the forthcoming White Paper on Future Reserves 2020, to be published by the Summer Recess. The White Paper will set out an extensive programme of measures further to develop and grow the role of the reserves.

The noble and gallant Lords, Lord Craig and Lord Stirrup, were both concerned about the defence budget. In 2012, the MoD announced that it had balanced its budget. We have now set out a fully funded and affordable equipment programme of nearly £160 billion over the next 10 years to meet Future Force 2020, which has recently been audited by the National Audit Office. The Government are fully committed to increasing the equipment budget by 1% a year from 2015, but of course we have a spending review under way for 2015-16 which will cover the rest of the defence budget. As the Defence Secretary has made clear, there are some genuine efficiencies we can make, but any further significant reductions would have an impact upon capabilities.

Many noble Lords, including my noble friend Lord Dobbs, the noble Lord, Lord Eames, and the right reverend Prelate the Bishop of Bath and Wells, were deeply concerned about Syria. After more than two years of bloodshed, this conflict has reached catastrophic proportions. Almost 80,000 people have been killed; there are more than 1.4 million refugees in neighbouring countries; more than 4.2 million civilians are displaced within Syria; and more than 6.8 million people are in dire humanitarian need.

The UK’s total humanitarian funding for Syria and the region to date is £141 million, which has all been allocated, including the £50 million pledged at Kuwait. UK aid is already funding food for more than 140,000 people a month, and water for more than 400,000. We have provided more than 100,000 medical consultations. We know our support is reaching people in all 14 governorates of Syria as well as refugees in the neighbouring countries.

Several noble Lords including the right reverend Prelate the Bishop of Bath and Wells and my noble friend Lord Ashdown were concerned that we might be arming the opposition. We have taken no decision to send arms to anyone in Syria. We have always said that the goal of amending the embargo is to create the conditions for a negotiated settlement.

My noble friend Lord Howell and the noble Lord, Lord Williamson, were concerned that the Commonwealth was not mentioned in the gracious Speech. I assure them both that the Government are strongly committed to strengthening our engagement with and role within the Commonwealth. Because of the importance we attach to the Commonwealth, the Prime Minister and the Foreign Secretary have decided to attend this year’s Commonwealth Heads of Government Meeting in Sri Lanka.

Many noble Lords, as one would expect, touched on the EU, which was well covered by my noble friend Lady Northover. David Cameron has said that if he is Prime Minister, there will be an in-out referendum in the next Parliament. Yesterday the Conservative Party published a draft Bill to legislate for an in-out referendum by the end of 2017. We are examining all opportunities to bring this Bill before Parliament, including as a Private Member’s Bill. As my noble friends Lord Howell and Lord Lawson said, the EU is changing because of the eurozone crisis. As part of these changes we want to negotiate a fresh settlement in the EU that is a better settlement for Britain, and then put the result of those negotiations to the British people. We want to be able to campaign heart and soul for Britain to stay in the EU under that new settlement, and we are confident that we will be able to do so, but the British people must have the final choice.

I was happy to hear that my noble friend Lord Northbrook has had a successful visit to Hong Kong. We want a strong and positive relationship with China, which I believe is of mutual benefit. Our bilateral trade with China is growing faster than that of any other country in Europe, and we welcomed a huge increase in Chinese investment last year. We have more Chinese students than any other foreign nationality, and numbers are still rising healthily. This benefits both countries. When dealing with Tibet this Government’s approach has always been clear and consistent. The Chinese Government are aware of our policy on Tibet.

A number of noble Lords, including my noble friends Lord Bates, Lord Chidgey, Lord Avebury, Lord Sharkey, Lord Hussain, and the noble Lords, Lord McConnell, Lord Collins, Lord Eames, and the right reverend Prelate the Bishop of Ripon and Leeds, spoke about our commitment to spending 0.7% of gross national income on aid. The coalition Government are the first UK Government ever to meet this, and we are the first G8 country to do so. I can also assure noble Lords that we remain fully committed to delivering 0.7% of GNI on aid. I can also assure the noble Lords, Lord McConnell and Lord Collins, that only aid which conforms to OECD rules counts as ODA, and we will adhere to that.

We agree with my noble friend Lord Chidgey that good governance should be a core part of new development goals. We also agree with him, and with the right reverend Prelate the Bishop of Ripon and Leeds, the noble Lord, Lord Cameron, and the noble Lord, Lord St John of Bletso, about the importance of the development of agriculture to tackle hunger and malnutrition. DfID invests heavily in new farming techniques, and, as my noble friend Lord Bates pointed out, we will host a global Nutrition for Growth event on 8 June as part of the UK’s presidency of the G8. I hope that the right reverend Prelate will be pleased to hear that the priority for the G8 presidency is to push for fairer taxes and transparency.

My noble friend Lord Avebury and the noble Earl, Lord Sandwich, flagged up Pakistan. The new Pakistani Government will have an important responsibility to implement urgently needed economic and tax reforms. DfID works extensively on tax reforms in developing countries. In South Sudan, I can tell the noble Baroness, Lady Cox, that DfID has allocated £40 million to help with humanitarian aid in 2013. In Burma we have provided £2 million for humanitarian support, with a focus on water, sanitation and nutrition. The Foreign Secretary and Aung San Suu Kyi agreed two weeks ago that it was time for the EU to move beyond sanctions.

The noble Earl, Lord Sandwich, was concerned about our continuing commitment to Afghan development. I can reassure the noble Earl that DfID will provide £178 million every year at least until 2017. We are working with the Afghan Government to ensure the protection of women’s rights. In regard to Bangladesh, I can assure my noble friend Lord Avebury that the Chittagong Hill Tracts were raised in the universal periodic review.

My noble friend Lord Eccles and the noble Lord, Lord St John of Bletso, mentioned CDC. A revitalised and reformed CDC is at the heart of the Government’s emphasis on the private sector in development. New investments are made only in the poorest countries in sub-Saharan Africa and south Asia.

The noble Lords, Lord Rosser and Lord Ramsbotham, my noble friends Lord Ashdown and Lord King, and the noble and gallant Lord, Lord Stirrup, were very concerned about the situation of the Afghan interpreters. I will take back the strength of feeling in the House tonight to my department. However, as the Prime Minister restated very recently, people who have laid their life on the line for the United Kingdom will not be abandoned.

My noble friend Lady Nicholson drew attention to the opportunities in Iraq. The noble Lord, Lord Anderson, pointed out the fragile state of Jordan. My noble friends Lord Northbrook and Lord Sharkey made important points about Cyprus. The noble Lord, Lord St John of Bletso, spoke eloquently about southern Africa. I assure him that we will play an active role in ensuring fair elections in Zimbabwe.

I am very grateful to the noble Lord, Lord Grenfell, for his sympathy for me tonight. I have heard enough amusing stories from him to know that he would be a brilliant after-dinner speaker, and I am sorry that I have never heard him.

The noble Lord, Lord Reid, made a very thoughtful speech on cybersecurity. I assure noble Lords that this is an area that we take very seriously and in which we invest a great deal of money, as the noble Lord said. We have trained 37,000 personnel and established a joint forces cybergroup, with close links across industry, government and partner nations. As the noble Lord said, we have committed £650 million over four years to the transformative national cybersecurity programme to bolster cybersecurity.

The noble Lord, Lord West, asked whether we were taking a risk with the two carriers. They are on track to be completed on time. More importantly, the aircraft that they will carry, the Lightning, is on track to have a squadron operational by 2016 for training in the United States. As the noble Lord knows, pilots are already flying the aircraft in United States, and we hope that they will be flying off the first carrier around 2020.

The noble Lords, Lord Ramsbotham and Lord Browne, mentioned the Trident replacement. Certainly I would welcome a debate on this issue, which I understand the noble Lord, Lord Ramsbotham, has asked for. UK nuclear policy remains one of minimum deterrence. We maintain a minimum level of nuclear weapons to guarantee a credible deterrent against any potential aggressor. The UK is fully committed to working towards a world free from nuclear weapons, is living up to the letter and spirit of its international legal obligations, and has a strong record on fulfilling its disarmament commitments.

My noble friend Lady Wilcox mentioned the recruiting and training of 16 to 18 year-olds. The minimum age for entry into the UK Armed Forces reflects the normal school leaving age of 16. There is no intention to change this policy, which is compliant with the United Nations Convention on the Rights of the Child.

The noble Baroness, Lady Whitaker, asked why the Chagos islanders could not return. We regret what happened in the late 1960s and 1970s. The responsibility for decisions taken then has been acknowledged by successive Governments. However, the reasons for not allowing resettlement, namely feasibility and defence security, are clear and compelling. The Government will continue to look at the issues involved and engage with all those with an interest.

The passion and intelligence of today’s debate show that noble Lords understand that the defence of the realm is, as the noble Lord, Lord West, said, the first duty of any Government. In closing, I will say only this: the task of safeguarding our national security, developing stability overseas and promoting our prosperity does not take place in a vacuum. Above all, our efforts must be credible, and it is this Government who are putting the country back on a sustainable footing.

Motion agreed nemine dissentiente, and the Lord Chamberlain was ordered to present the Address to Her Majesty.

House adjourned at 11.34 pm.