House of Commons

Wednesday 20th November 2013 Commons Chamber

Wednesday 20 November 2013

The House met at half-past Eleven o’clock

Prayers

Wednesday 20th November 2013 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Wednesday 20th November 2013 Commons Chamber

The Secretary of State was asked—

[Bob Blackman (Harrow East) (Con)]

1. What discussions he has had on new investment in energy infrastructure in Wales.

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

Wales is already attracting significant investment in new energy infrastructure. From Hitachi’s investment in new nuclear to promising marine energy projects such as the Skerries tidal stream array, Wales is proving that it can play a leading role in meeting our country’s energy needs.

[Bob Blackman]

It is good news that Wales is getting energy infrastructure, but what will my hon. Friend do to ensure that businesses and consumers can access it?

[Stephen Crabb]

I thank my hon. Friend for that question. This country needs more than £100 billion of new energy infrastructure investment in the next eight years. We at the Wales Office are determined that Welsh businesses should be at the forefront of those opportunities in Wales, which is why my right hon. Friend the Secretary of State will host an energy summit to explore with Welsh businesses the opportunities that this new investment will afford.

[Hywel Williams (Arfon) (PC)]

Will the Minister assure the House that when an assessment is made of competing means of transmission, full consideration will be given to the full costs, including those to tourism and outdoor pursuit industries?

[Stephen Crabb]

I recognise the important point made by the hon. Gentleman and I followed the debate secured by the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) yesterday evening on that very issue. It is clearly important that the distribution transmission companies take a view of all the costs involved, but there is concern that when we make these transmission projects more expensive—through, for example, underground cabling—the cost is ultimately borne by households who pay energy bills.

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

Anaerobic digestion is an important player in energy production in Wales. There appears to have been a problem in the feed-in tariff order scheme for anaerobic digestion of less than 500 kW, which could affect investment in the technology. Will the Minister work with the ministerial team in the Department of Energy and Climate Change to rectify this problem?

[Stephen Crabb]

I thank my hon. Friend for that question. We are very aware of the issue. A discussion is taking place with officials and colleagues at DECC. They are in contact with the trade body for the developers of such projects, and I hope a solution will be found soon.

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

2. What assessment he has made of the effect of recent increases in the cost of energy bills on living standards in Wales.

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

The recent price increases announced by the big six are unwelcome, especially at this time, which is why we are legislating to force energy companies to put people on the lowest tariff that meets their preference. We are also helping to keep bills lower by increasing competition in the market and opening up the marketplace for new independent suppliers to challenge the dominance of the big six.

[Huw Irranca-Davies]

Last week a friend of mine who works with elderly residents in Ogmore visited four elderly residents in one day. All four would not put on their heating because they were frightened of the effect on them of rising fuel prices. They sat in the cold. Yesterday, it snowed in Ogmore. Is not this the time to call for a freeze on prices so that elderly people are not afraid that they will freeze in their homes?

[Stephen Crabb]

As I said, the increases in bills are unwelcome at this time and we all know from our communities the pressures that puts on vulnerable households, but I would say to the hon. Gentleman that, on the slogan of a price freeze for energy, the Leader of the Opposition knows full well that that is not deliverable. We know from Labour’s track record in government that it was intensely relaxed about gas prices doubling, electricity prices going up by more than 50% and increasing fuel tax 12 times. It was too relaxed and complacent.

[Robert Halfon (Harlow) (Con)]

Does my hon. Friend agree that one of the biggest impacts on the cost of energy is the high cost of petrol and diesel, and that the fuel duty freeze will mean that petrol and fuel duty will be 13p cheaper in tax terms and will help the cost of living enormously in Wales and across the country?

[Stephen Crabb]

My hon. Friend is exactly right. It is of particular benefit in rural Welsh areas, where average incomes are lower. By the end of this Parliament, average fuel prices will not be 13p per litre lower; they will be more than 20p per litre lower than under the previous Government’s plan.

[Jessica Morden (Newport East) (Lab)]

13. A report by the CAB last week showed that over the past three years energy bills have increased eight times more than earnings. Does the Secretary of State not share the concern that Wales has the highest energy bills of anywhere in the UK? If he does, why does he not tackle that far more urgently?

[Stephen Crabb]

Wales has some of the highest energy prices, but regional variations are partly due to higher transmission costs—an important component of an energy bill. That brings us back to the earlier question about wanting more expensive transmission projects in Wales, not cheaper ones. We are very aware of the pressure on households in Wales because of the energy prices increase, and we are not complacent about that.

[Mr Mark Williams (Ceredigion) (LD)]

A particular concern in rural areas such as Ceredigion is the crippling price of domestic oil. What work will my hon. Friend do, including with the Department of Energy and Climate Change, to support oil syndicates and oil clubs and encourage bulk purchasing to reduce price?

[Stephen Crabb]

The collective purchasing power of communities and groups of buyers of oil might have a role in bringing down prices for consumers in rural areas. We are seeing that with switching as well. My colleagues at the Department of Energy and Climate Change are encouraging community groups to come together to strike collective switching agreements with companies to help bring down prices.

[Mr Peter Hain (Neath) (Lab)]

With sky-high energy bills in Wales, which are higher than anywhere else, and a Tory-aligned think-tank saying that people are maxed out on personal debt—there are about 250,000 of them in Wales—does the Minister agree with the planning Minister, the hon. Member for Grantham and Stamford (Nick Boles), that his party is the party of the rich and that its members are seen as aliens and heartless extremists?

[Stephen Crabb]

The right hon. Gentleman is a member of a party about which one of his colleagues said it was “intensely relaxed” about people becoming filthy rich. It was intensely relaxed about many families on low incomes being pushed into greater household debt. We do not take that approach; we are trying to bring down household debt.

[Guto Bebb (Aberconwy) (Con)]

Does the Minister agree that the Labour party claims to be concerned about the cost of living in Wales, yet on the one cost it can control, the council tax, it has failed miserably to support Welsh constituents?

[Stephen Crabb]

My hon. Friend is absolutely right. If Opposition Members were genuinely concerned about tackling the cost of living in Wales they would be hammering on the door of their Labour colleagues in the Welsh Government in Cardiff and demanding that they freeze council tax bills, as we have for households in England.

[Nia Griffith (Llanelli) (Lab)]

Wales has seen the sharpest increase in the number of people falling behind with their energy fuel bills—up 24% from 68,000 two years ago to an alarming 85,000 households now in arrears. With SSE’s massive 8% price hike kicking in last Friday, will the Minister explain why he thinks it is not possible to deliver an energy freeze and to break up the six big energy companies to deliver a fairer system for the people of Wales?

[Stephen Crabb]

The uncompetitive big six were of course created by the previous Labour Government. We are opening up the marketplace to seven new independent suppliers, challenging the dominance of the big six and increasing competition in the marketplace, which will deliver lower bills for households in Wales.

[Mr Henry Bellingham (North West Norfolk) (Con)]

3. What plans he has to encourage growth in the small and medium-sized enterprise sector in Wales.

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

Small and medium-sized enterprises are vital to the economy in Wales and, indeed, the UK as a whole. That is why we have launched the Business is Great campaign, focusing on how we can further support these thriving businesses.

[Mr Bellingham]

I agree with the Secretary of State that small businesses in the Principality and across the country are the lifeblood of the economy. Considerable moves have been made already on the tax front and in lifting burdensome regulations. What more can he do, working with the Welsh Government, further to enhance wealth creation and the job-generating power of small businesses?

[Mr Jones]

My hon. Friend is absolutely right that SMEs are the backbone of the Welsh economy, and we are keen to do all we can to encourage them. That is why we have initiated the StartUp loans scheme, which has already lent about £50 million to more than 9,000 new businesses. With effect from this October, working with the Welsh Government, we have announced the scheme’s roll-out to Wales, so that any Welsh entrepreneur with a good idea can come forward and apply for a loan.

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

The Secretary of State will know that SMEs in Dwyfor Meirionnydd are doing their best to thrive in the face of coalition austerity, as he visited the first ever Meirionnydd day the week before last. I thank him for attending it. However, the economic situation outside London is far different from down here, so why not make the National Insurance Contributions Bill, which is currently going through the House, apply everywhere outside London and south-east England, thereby mirroring a move in the Government’s emergency Budget of 2010?

[Mr Jones]

I did, indeed, enjoy my visit to the Meirionnydd day that the right hon. Gentleman held, and I was very impressed by the positive attitude of SMEs from his constituency. He will know that the national insurance contributions employment allowance will benefit 35,000 businesses across Wales by a total of £50 million, with 20,000 of those businesses being taken out employer national insurance contributions altogether, which I would have thought his constituents welcomed.

[Mr Llwyd]

Welsh exports were down by just under £1 billion over the past 12 months, which is the biggest fall in any UK nation or English region. What discussions is the Secretary of State having with the Chancellor to ensure that the Welsh producing economy, which is comprised mainly of SMEs, is not paying the price for a growing service and finance economy centred on London and the south-east?

[Mr Jones]

We are anxious to ensure that as many SMEs as possible export. That is a good reason for Welsh SMEs to utilise the services of UK Trade & Investment. UKTI has global reach and is available to every business, including those in Wales. I encourage the right hon. Gentleman to encourage his constituents to seek the services it offers.

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

The extension of the StartUp loans scheme to Wales is fantastic news for budding entrepreneurs across the nation. Will the Secretary of State join me in calling on the enterprise agencies, such as Business in Focus, which serves the Vale of Glamorgan, to co-ordinate their activities in a campaign to get more people to start their own businesses?

[Mr Jones]

Indeed; we need more entrepreneurs in Wales to set up their own businesses. The roll-out of the StartUp loans scheme to Wales is extremely good news. It was done in co-operation with the Welsh Government and I was pleased to see their entirely positive attitude to it.

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

Swansea accepts that Hull, coming out of the shadows, not Swansea, continuing to shine, was named the UK city of culture for 2017. Does the Secretary of State agree that to maximise the growth of SMEs, we need to keep the momentum of the bid going, maximise the opportunity of the Dylan Thomas centenary and confirm Swansea as the city of culture of Wales?

[Mr Jones]

I agree entirely with the hon. Gentleman. While I congratulate Hull, I was bitterly disappointed that Swansea did not get the accolade of city of culture. Nevertheless, Swansea’s bid was an extremely good one and the networks that were built up can form a good platform for future enterprises. I agree that the Dylan Thomas centenary is a massive opportunity for Swansea.

[Bill Wiggin (North Herefordshire) (Con)]

4. What assessment he has made of the potential effect on the Welsh economy of upgrading the M4 motorway.

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

6. What assessment he has made of the potential effect on Wales of upgrading the M4 motorway.

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

Upgrading the M4 is a key priority for the Government and for businesses in Wales. That is why we are enabling the Welsh Government to use their existing limited borrowing powers to begin work on upgrading the motorway as soon as possible.

[Bill Wiggin]

Will my right hon. Friend assure the House that he will continue to persuade his colleagues in the Welsh Government to work hard to ensure that there are improvements to the M4 around Newport?

[Mr Jones]

My hon. Friend is entirely right. That infrastructure improvement has long been called for, particularly by the CBI. An upgrade is grossly overdue. We have given the Welsh Assembly Government the borrowing powers that they need. We hope and expect that they will proceed with the upgrade as quickly as possible.

[Andrew Selous]

Is it the case that although funding to upgrade the M4 around Newport may not have been available in the past, the Government’s recent agreement to increase the borrowing powers of the Welsh Government means that the upgrade can now go ahead?

[Mr Jones]

Yes, indeed. The Welsh Government have already started the consultation process. I repeat that this is a massively important infrastructure improvement and we expect them to proceed with it as quickly as possible.

[Kevin Brennan (Cardiff West) (Lab)]

One of my earliest memories is cramming into the back of my dad’s Ford Anglia in 1966 with my two sisters and my brother, and crossing the original M4 Severn crossing. Forty-seven years later, it costs £6.20 for a car, £12.40 for a van and £18.60 for a heavy goods vehicle. The second Severn crossing was built 17 years ago. Is it not time that we improved the Welsh economy by getting rid of those burdensome tolls?

[Mr Jones]

I agree with the hon. Gentleman that the tolls are a major impediment to businesses in south Wales. Having said that, these are important pieces of infrastructure that assist the south Wales economy immensely. As he will know, the franchise ends in 2017-18. At that time, we will look at ways to reduce the cost of crossing the Severn.

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

8. Businesses and commuters have given a warm welcome to the announcement about the M4 relief road that was made by the Prime Minister and his deputy. Given that, what does the Secretary of State make of the headline in the South Wales Evening Post on Monday, which suggested that the Liberal Democrats in Wales oppose that vital piece of infrastructure?

[Mr Jones]

Having spoken to certain other Liberal Democrats, I can say that they are entirely in favour of the proposal. Both the Prime Minister and the Deputy Prime and Minister are united in wanting to see the road upgraded.

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

5. When he plans to bring forward legislative proposals to give the Welsh Government borrowing powers.

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

Our detailed response to the Silk Commission’s recommendations, which we published on Monday, confirmed that we will include proposals in a draft Wales Bill to give the Welsh Government borrowing powers. We will publish the draft Bill, for pre-legislative scrutiny, in the current parliamentary Session.

[Susan Elan Jones]

I welcome the fact that, after a year’s wait, we finally have a statement from the Secretary of State, but I would like to press him further, as he speaks of details. When will we know the basis on which the Welsh capital borrowing limits will be calculated? There is a precedent in the Scotland Act. Why will he not just say that he will follow that?

[Mr Jones]

I make no apologies for ensuring that the proposal was properly scrutinised. The package we announced is good for Wales and I am glad that it was welcomed by the Welsh Government, who will have new borrowing powers. The borrowing limit that will apply to those powers will be commensurate with the Welsh Government’s access to independent streams of funding to repay the borrowing they incur. The details will be placed on the face of the draft Bill when it is published.

[Michael Fabricant (Lichfield) (Con)]

If the National Assembly for Wales is going to have borrowing powers, and if it is going to smell like a Parliament and look like a Parliament, is it not time that it became the National Parliament of Wales?

[Mr Jones]

I am not entirely sure how a Parliament smells.

[Mr Speaker]

Order. Noisy and discordant conversations are taking place in the Chamber. I am sure I am not alone in wanting to hear the Secretary of State’s answer to the hon. Member for Lichfield (Michael Fabricant).

[Mr Jones]

We have no plans to change the name of the Welsh Assembly.

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

In Monday’s statement, the Secretary of State closely tied in borrowing powers with the income tax sharing arrangement between the UK and the Welsh Government. Will he confirm that the proposed sunset clause on the referendum has been dropped?

[Mr Jones]

We have no proposals to put a sunset clause in the Bill.

[Mr David Hanson (Delyn) (Lab)]

7. What steps the Government are taking to increase the number of people in Wales who earn a living wage.

[Chris Ruane (Vale of Clwyd) (Lab)]

11. What steps the Government are taking to increase the number of people in Wales who earn a living wage.

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

We support strong minimum wage legislation and rigorous enforcement as a way of protecting people on the lowest incomes. Decisions on wage rates above the minimum wage are for employers and employees to agree together.

[Mr Hanson]

According to a Barclays bank survey in my constituency, in the past year those earning £100,000 or more saw their spending power rise by 4.4%, while those on less than £15,000 saw their spending power fall by 5.6%. Does the Minister think that that has anything to do with Government policy? Will he work towards a minimum wage to help the 700,000 people in Wales who currently earn less than the living wage?

[Stephen Crabb]

I gently point out to the right hon. Gentleman that the vast majority of the decline in real wage values in his constituency and throughout Wales occurred in the last three years of the Labour Government. We are working incredibly hard to bring new jobs and investment to constituencies such as the right hon. Gentleman’s. If he is saying that those jobs are not welcome unless they pay more than £7.60 an hour, he needs to make that clear, but it would be a significant barrier to inward investment.

[Chris Ruane]

Welsh wages have fallen in 40 of the 41 months since the Government came to power in 2010. By the next election, Welsh workers will be £6,000 worse off than they were in 2010. What is the Minister doing to help Welsh workers improve their living standards?

[Stephen Crabb]

The best way to achieve better living standards for people in the hon. Gentleman’s constituency and throughout Wales is to tackle our problems head on, to take the responsible decisions and to do everything we can to encourage businesses to create jobs. That is why unemployment is falling in his constituency when it increased so rapidly under last five years of the Labour Government.

[Jonathan Evans (Cardiff North) (Con)]

Surely the best way to raise living standards in Wales is to bear down on economic inactivity in Wales. Will my hon. Friend share with the House what has happened to economic inactivity since the 2010 election?

[Stephen Crabb]

My hon. Friend is quite right: economic inactivity and worklessness have been a curse on Wales for too long. Under the last Labour Government, economic inactivity rates averaged around 21%; under this Government they are down to around 21%. [Interruption.] We are not complacent: we want to go further with improving the situation.

[Ann Clwyd (Cynon Valley) (Lab)]

14. In some parts of Cynon Valley, over half the children are living in poverty. Why?

[Stephen Crabb]

I am grateful to the right hon. Lady for that question. I visited her constituency and I am well aware of the deep-seated, long-entrenched problems there. I have been to the jobcentre in Aberdare and seen how hard the excellent team are working to tackle long-term unemployment, but there are no quick fixes. What we are doing, with the Work programme and our other efforts through the Department for Work and Pensions, is trying to bear down on worklessness and get more people into jobs.

[Karl MᶜCartney (Lincoln) (Con)]

9. What assessment he has made of the potential effect on the Welsh economy of varying the current level of taxation in Wales.

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

The power to vary tax is an important way of driving economic growth and ensuring that Governments are accountable for the way they spend money. We will devolve certain taxes to the Welsh Assembly and Welsh Government and provide for a referendum, so that people in Wales can decide whether some of their income tax should be devolved, as in Scotland.

[Karl MᶜCartney]

I thank my right hon. Friend for that answer. Could he explain what role devolving stamp duty land tax will play in stimulating the housing market in Wales, including in rural places such as Llanbedr Pont Steffan? Does he agree that the expansion of the Help to Buy scheme—

[Mr Speaker]

Order. Unfortunately the question has got nothing to do with the current level of taxation in Wales. [Interruption.] Come on, finish it off.

[Karl MᶜCartney]

Will the scheme help not only aspiring home owners in Wales, but my constituents in Lincoln?

[Mr Jones]

Devolution of stamp duty land tax should be an important tool in the armoury of the Welsh Assembly Government when addressing the issue of borrowing, but one would hope that they would seek to maximise the tax take by being inventive and adopting lower rates.

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

What substantive planning is the Secretary of State doing for the Welsh economy to take full advantage of the benefits that Scottish independence will bring to these islands in the coming years? Surely tax-varying powers are the minimum requirement in Wales, so that it, too, will benefit in the way that Scotland will benefit in the years to come.

[Mr Jones]

The hon. Gentleman will understand that that is not an eventuality that I expect, and neither does the First Minister of Wales, who I am glad to see is in Scotland today, making the case for the UK being better together.

[Owen Smith (Pontypridd) (Lab)]

On Monday, we heard in this House the Secretary of State commit his party to cutting a penny off income tax for taxpayers in Wales, including millionaires. I am sure he did not pluck that figure out of thin air; I am sure he consulted the Treasury. Will he therefore tell us what the precise cost to the Welsh budget will be of his proposed tax cut?

[Mr Jones]

The point I made was that a cut of one penny in the pound would do a tremendous amount to stimulate the Welsh economy. Let me repeat what I said to the hon. Gentleman on Monday. We in the Conservative party are ambitious for the people of Wales. We want to see the Welsh economy growing; he wants a Welsh economy reliant on handouts. That is the difference between our parties.

[Owen Smith]

No, the difference is that I want some answers. I assume from the Secretary of State’s answer that he did not consult the Chancellor and does not know how much the proposal will cost the Welsh budget, so let me help him out. The static effect is £200 million, or the equivalent of 5,000 teachers in Wales, so will he tell us which services he would propose cutting to pay for that tax pledge?

[Mr Jones]

The hon. Gentleman clearly does not get it. The issue of whether income tax should be devolved will be in the hands of the Welsh people. It will be up to the Welsh Assembly Government to make the decision to trigger that referendum. For our part, we want them to trigger that referendum, to call it, to elect for a lower rate of tax and to give Wales the competitive edge that so far it lacks under the Labour Welsh Assembly Government.

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

10. What assessment he has made of the potential economic effect of the proposed new prison in north Wales.

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

Our £250 million investment in a new prison in north Wales will be a significant driver for growth in the local economy and provide around 1,000 jobs. The prison is expected to contribute £23 million a year to the regional economy.

[Stephen Mosley]

Will the Minister join me in welcoming the fact that the prison will allow prisoners from north Wales and Cheshire to live closer to their families and maintain vital links with them, thus helping rehabilitation?

[Stephen Crabb]

My hon. Friend is exactly right. Aside from the important economic benefits to Wales of the new prison, importantly it will help families stay in closer touch with prisoners, which has been proven time and again to be a vital factor in whether people reduce their offending behaviour when they are out of prison.

[Mr Speaker]

I call Mr Crispin Blunt.

[Hon. Members]

Hear, hear.

[Mr Crispin Blunt (Reigate) (Con)]

Good ideas have many parents, and I am sitting alongside two of them in the case of the prison in Wrexham. I urge my hon. Friend the Minister to make sure that, as a new large prison, it contains units that can deal with all the different types of offenders who will need to be addressed to produce the best rehabilitative effect, and that there are proper work facilities for prisoners under that regime.

[Stephen Crabb]

I thank my hon. Friend. Last week, I saw a great example of a large and diverse prison—Parc prison in Bridgend—which shows just how effectively different categories of prisoners can be brought together and offending behaviour can be tackled. We have exactly the same aspiration for the new prison in north Wales.

The Prime Minister was asked—

[Steve Brine (Winchester) (Con)]

Q1. If he will list his official engagements for Wednesday 20 November.

[The Prime Minister (Mr David Cameron)]

I am sure the whole House will wish to join me in paying tribute to Warrant Officer Ian Fisher of 3rd Battalion the Mercian Regiment, who was killed on operations in Afghanistan on Tuesday 5 November. It is clear from the tributes paid that he was a professional and well respected soldier who made a huge contribution to the Army over many years on a number of operational tours. Our thoughts and our condolences should be with his family and his friends.

This morning, I had meetings with ministerial colleagues and others, and in addition to my duties in this House, I shall have further such meetings later today.

[Steve Brine]

I am sure every Member will want to associate themselves with the Prime Minister’s tribute—a reminder that in this season of remembrance we will in faith always remember their service to our country.

MPs from across the House will have grave concerns about the nightmare unfolding at the Co-operative bank. Does the Prime Minister share my sense of disbelief that a person such as Reverend Flowers, responsible as he was for such large sums of our constituents’ money, was ever appointed to the position of chairman? What can my right hon. Friend now do to find out how on earth that happened?

[The Prime Minister]

My hon. Friend makes an important point. Constituencies across the House will have people who hold Co-op bonds who are very worried about what will happen to their investment. Let me be clear that the first priority is to safeguard this bank—and to make sure that it is safeguarded without using taxpayers’ money. That must be the priority. My right hon. Friend the Chancellor will be discussing with the regulators what is the appropriate form of inquiry to get to the bottom of what went wrong, but there are clearly a lot of questions that have to be answered. Why was Reverend Flowers judged suitable to be chairman of a bank, and why were alarm bells not rung earlier, particularly by those who knew? In the coming days, it will be important for anyone who has information to stand up and provide it to the authorities.

[Edward Miliband (Doncaster North) (Lab)]

I join the Prime Minister in paying tribute to Warrant Officer Ian Fisher of 3rd Battalion the Mercian Regiment. He died serving his country, and all our thoughts are with his family and friends.

Can the Prime Minister tell us how his campaign to save the Chipping Norton children’s centre is going?

[The Prime Minister]

I support children’s centres across the whole of the country. The fact is that, in spite of very difficult decisions that have to be made right across the country, the number of children’s centres has reduced by around 1%. Like all Members of Parliament, I fight very hard for services in my constituency.

[Edward Miliband]

The Conservatives are going round saying that children’s centres are safe and there is no threat to them. Things are so bad that the Prime Minister has even signed a petition in his own area to save his local children’s centre. Can he clarify: is the petition addressed to his local Tory council, or is he taking it right to the top?

[The Prime Minister]

More people are using children’s centres than ever before in our country. The right hon. Gentleman does not want to give the figures, but there are 3,000 children’s centres. This Government can hold their head up high, because we are increasing the amount of money that is going to local councils for children’s centres. That is what is happening under this Government.

[Edward Miliband]

We all wish the right hon. Gentleman luck in his fight as a local Member of Parliament. Imagine what he could achieve if he were Prime Minister of the country!

I think that we have established the Prime Minister’s double standards in Oxfordshire. Let us take another example. In Tory Essex—[Interruption.] I know that the Tories do not care about children’s centres, but they should hush down a bit and listen. In Tory Essex, they propose to close 11 centres and downgrade 37, whose opening hours will fall from 50 a week to as few as five. So there will be fewer centres, fewer staff and fewer hours. How is that doing what the Prime Minister promised to do before the election, which was to protect and improve Sure Start?

[The Prime Minister]

Let me tell the right hon. Gentleman what is happening to child care under this Government. For the first time ever, there are 15 hours a week of child care for every three and four-year-old in the country. That never happened under Labour. For the first time, under this Government, there are free child care hours for every disadvantaged two-year-old in the country. That never happened under Labour. Also, to come, there will be tax-free child care under this Government. That never happened under Labour. And the child tax credit has been upgraded by £420 under this Government. That is what is happening, but let me be clear: there is one policy that we will not adopt, and that is Labour’s policy of funding more hours through its bank levy. I will tell you why: Labour has already spent the bank levy 10 times over. The youth jobs guarantee, VAT cuts, more capital spending—Mr Speaker, that is not a policy; it is a night out with Reverend Flowers.

[Edward Miliband]

Let us talk about the people the Prime Minister associates with—[Interruption.]

[Mr Speaker]

Order. Let the House calm down. I am concerned, as always, about Back Benchers, and Back Benchers who want to speak should be accommodated, so calm down and let us move on.

[Edward Miliband]

The Prime Minister obviously wants to talk about who he associates with. He has taken nearly £5 million from Michael Spencer, whose company was found to be rigging LIBOR; he has a party chairman who operated a company under a false name and was investigated for fraud; he has taken millions from tax exiles and tax avoiders; his party has never paid back the money from Asil Nadir—and they are just the people I can talk about in this House. Did not the planning Minister have it right yesterday, when he said

“the single biggest problem the Conservative party faces is being seen as the party of the rich”?

[The Prime Minister]

How extraordinary that, today of all days, the right hon. Gentleman wants to talk about the people he associates with and takes money from, because what we can now see is that this bank, driven into the wall by this chairman, has been giving soft loans to the Labour party, facilities to the Labour party, donations to the Labour party, has trooped in and out of Downing street under Labour, and is still advising the leader of the Labour party—and yet now we know that Labour knew about his past all along. Why did Labour do nothing to bring to the attention of the authorities this man who has broken a bank?

[Edward Miliband]

I think we can take it from that answer that the Prime Minister does not want to talk about his planning Minister. Where is the planning Minister? Where is he today? Only last January, the Prime Minister was praising him to the rafters, saying that he was leading the debate. I think that the House should hear more from him. This is what he says about the Tory party: that it stands for people who

“work for private equity”

and

“make a ton of money.”

He is right, isn’t he?

[The Prime Minister]

We have finally found a public inquiry that the right hon. Gentleman does not want. He comes to the House and asks for inquiry after inquiry into the culture and practices of this and that, but when it comes to the Co-op bank, he is absolutely frightened of it.

This is also an interesting week in which to talk about people on the Front Bench. This week, the right hon. Gentleman referred to his own shadow Chancellor as a “nightmare”. I am sorry; I hate to say “I told you so”, but I have been saying that for three years. However, that is not the most interesting thing in this fascinating exchange of e-mails. Labour’s head of strategy—yes, they do actually have one—replied to the shadow Chancellor:

“When did built to last become a part of our thing?”

I agree. Their policies are not built to last; they are built to self-destruct in about five seconds.

[Edward Miliband]

What the Prime Minister has shown comprehensively today is that he has no answers on the cost of living crisis facing families up and down the country. That is the truth and his close friend the planning Minister is right. [Interruption.]

[Mr Speaker]

Order. The House must calm down. Questions will be heard, however long it takes; it is very simple.

[Edward Miliband]

The Prime Minister’s close friend the planning Minister is right. He says this: there are many people who “don’t like” the Tory party and “don’t trust” its motives, and he says that the Prime Minister is not the man to reach them. What he is really saying is that this Prime Minister is a loser.

[The Prime Minister]

What this proves is the right hon. Gentleman cannot ask about the economy because it is growing, he cannot ask about the deficit because it is falling, he cannot ask about the number of people in work because that is rising, and he cannot even ask about banking because he is mired in his own banking scandal. [Interruption.] What we have learned in the last fortnight is that he is too—[Interruption.]

[Mr Speaker]

Order. The Prime Minister’s answer must, and will, be heard.

[The Prime Minister]

What we have learned in the last fortnight is that the right hon. Gentleman is too weak to stand up to his paymasters in the trade unions, too weak to stand up to his bankers and too weak to stand up to his shadow Chancellor. We all know that it would be a nightmare, and that is why we are dedicated to making sure the British people do not have to live through it.

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

Q2. My right hon. Friend will recall visiting the London Gateway port in Thurrock, which is now open for business, but is he as appalled as I am to hear that Unite is picketing the potential clients of that port and encouraging its sister unions to boycott any ship that docks there? Is that not more evidence that Unite’s bully-boy tactics cost jobs, not save them?

[The Prime Minister]

My hon. Friend is absolutely right. I have visited the London Gateway port and it is one of the most compelling things I have seen in recent years about Britain’s industrial renaissance. It is an extraordinary investment that is going to be of huge benefit, bringing about 12,000 direct and indirect jobs. She is absolutely right about the dangers of union intimidation and bully-boy tactics. That is why it is important that we have a review and, frankly, it is important that both Unite and the Labour party take part in that review.

[Mr Nigel Dodds (Belfast North) (DUP)]

I am sure the Prime Minister will agree that the victims of terrorism deserve not just words of sympathy but our full support and help and must be at the core of any process dealing with the past in Northern Ireland. Given the very worrying statement by the Attorney-General for Northern Ireland overnight, made on his own account and his own behalf and without consultation, does the Prime Minister agree there can be no question of an amnesty for any terrorist atrocities and crimes and that all victims of terrorism deserve truth and justice?

[The Prime Minister]

First, let me agree with what the right hon. Gentleman has said, which is that the words of the Northern Ireland Attorney-General are very much his own words and not made at the behest of anybody else. I can reassure the right hon. Gentleman that the Government have no plans to legislate for an amnesty for crimes that were committed during the troubles. As he knows, Richard Haass is currently consulting all the Northern Ireland parties on issues from the past as well as parades and flags, and I think that is the right forum in which to discuss these issues.

[Sir Tony Baldry (Banbury) (Con)]

Q3. General Synod is meeting today and hopefully will find a way to enable women as soon as possible to be consecrated as bishops in the Church of England. If this is successful, will my right hon. Friend and the Government support amendments to the Bishops Act to ensure that women bishops can be admitted to the House of Lords as soon as possible rather than new women bishops having to queue up behind every existing diocesan bishop before we can see women bishops in Parliament?

[The Prime Minister]

My hon. Friend follows these matters closely and asks an extremely important question. I strongly support women bishops and hope the Church of England takes this key step to ensure its place as a modern Church in touch with our society. On the problem he raises—there is, of course, a seniority rule for bishops entering the House of Lords—the Government are ready to work with the Church to see how we can get women bishops into the House of Lords as soon as possible.

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

Q4. Does the PM believe that the proposal from the Conservative Free Enterprise Group, supported by 42 of his own MPs, to put VAT on food and children’s clothes shows the true face of the party he leads?

[The Prime Minister]

I do not support that policy.

[Mr Adrian Sanders (Torbay) (LD)]

I recently joined the Plough and Share credit union in my constituency. Credit unions can help to ensure that a lot of people do not have to go to payday lenders. What more can the Government do to support credit unions and encourage anybody with a few pounds to spare to put them into a credit union and take trade away from awful payday lenders?

[The Prime Minister]

I am grateful to my hon. Friend for raising this issue. The Government strongly support credit unions and think them a big part of the answer to the problems of payday lending. We have invested £38 million in credit unions and want to see them expand. Also, for the first time, we are properly regulating payday lending through the new regulator and are prepared to consider all the steps that can be taken to sort out this problem.

[Alex Cunningham (Stockton North) (Lab)]

Q5. Today is universal children’s day, and the Prime Minister will be aware that Save the Children has highlighted the importance of early years in children’s development. Does he accept that the closure of three Sure Start centres a week is undermining the life chances of countless needy children?

[The Prime Minister]

I would challenge the hon. Gentleman’s figures. Whereas the pot of money for children’s centres was £2.3 billion in 2012-13, it is going up to £2.5 billion in 2014-15; there are 3,000 children’s centres open; and as I said, only about 1% have closed, so I think the Government have an excellent record on this front.

[Mr David Burrowes (Enfield, Southgate) (Con)]

Q6. Now that the changes to Enfield’s A and E and maternity services have been given the green light—not by politicians and bureaucrats, as happened under the previous Government, but by local GPs—will the Prime Minister confirm that Enfield is getting increased primary care funding and that Chase Farm hospital is getting 24/7 access to urgent care?

[The Prime Minister]

First, let me pay tribute to my hon. Friend, who I know has worked hard on this difficult issue for his constituents. I understand that the Barnet, Enfield and Haringey strategy has been approved, and once it has been implemented Chase Farm hospital will provide a service giving access to GPs 24 hours a day, seven days a week. Enfield is also getting an increase in primary care funding. That is part of our plan of not cutting but expanding our NHS.

[Karl Turner (Kingston upon Hull East) (Lab)]

Will the Prime Minister join me in congratulating the good people of Hull on winning the city of culture 2017?

[The Prime Minister]

I am absolutely delighted to join the hon. Gentleman, and everyone in Hull and around the country, in celebrating this great award of the city of culture to Hull. It is a very exciting opportunity for Hull. We will be able to celebrate the birthplace of Wilberforce and the fact that Andrew Motion lectured there and Philip Larkin was the librarian. Slightly more incongruously, Peter Mandelson is the high sheriff—but every city has its burden to bear. And of course Hull has a fantastic record on popular music. I remember some years ago that great Housemartins album, “London 0 Hull 4”—so named because they said they were the fourth-best band in Hull. I am sure it will be a huge success for Hull and for Humberside more generally.

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

Q7. My constituency registered 600 new business start-ups last year, putting it among the top-10 places in the UK for new business growth. In preparation for small business Saturday on 7 December, will my right hon. Friend meet me to discuss a review of business rates to encourage future growth, especially in London, where rateable values are very high and therefore rates are excessive?

[The Prime Minister]

I am very happy to discuss this issue with my hon. Friend, who always stands up for business and enterprise. She refers to the number of start-ups. It is a real success story for our country, with an extra 400,000 businesses now operating. The Minister for Skills and Enterprise, my hon. Friend the Member for West Suffolk (Matthew Hancock), will shortly be telling the House about the 10,000th StartUp loan—a Government scheme that has got off the ground extremely quickly. Of course, there are concerns about business rates, and I am happy to discuss those with her, but may I take this opportunity to encourage all colleagues to take part in small business Saturday? It is a brilliant initiative that worked well in the United States and which will allow everyone to demonstrate how much they care about small businesses on our high streets.

[Sarah Champion (Rotherham) (Lab)]

Does the Prime Minister agree with his planning Minister that when modern Britain looks at the Conservative party it sees an old-fashioned monolith?

[The Prime Minister]

We have had some interesting interventions from Front Benchers past and present. I hope I can break records by explaining that a tweet has just come in from Tony McNulty—we remember him—the former Labour Security Minister, saying this:

“Public desperate for PM in waiting who speaks for them—not Leader of Opposition indulging in partisan Westminster Village knockabout.”

So I would stay up with the tweets if you want to get on the right side of this one.

[Dr Matthew Offord (Hendon) (Con)]

Q8. I refer the House to the Register of Members’ Financial Interests because I have recently returned from a delegation to Israel—[Interruption.]

[Mr Speaker]

Order. I want to hear the words of Dr Offord, and at the moment I cannot hear them.

[Dr Offord]

I will repeat my declaration, Mr Speaker. I refer the House to the Register of Members’ Financial Interests as I have recently returned from a delegation to Israel and the Palestinian Authority with Conservative Friends of Israel. On the Israeli streets and in the corridors of power, Iran remains the No. 1 issue of concern. Earlier this week, French President Hollande visited Israel to discuss this matter with Israeli counterparts and appears to have clearly understood Israel’s legitimate concerns. When will our Prime Minister be visiting Israel, our close democratic ally in the region, to discuss the Iranian nuclear issue and other regional concerns?

[The Prime Minister]

I thank my hon. Friend for his question. I know that many people in his constituency care deeply about this issue and about the future of Israel. I will never forget the visit that I made as Leader of the Opposition, and I look forward to visiting, I hope, next year. I completely understand—

[Sir Bob Russell (Colchester) (LD)]

What about the Palestinians?

[The Prime Minister]

Of course. When I went to Israel, I visited not only occupied east Jerusalem but other places in Palestine as well, as is proper. I do understand the very real concern that Israelis have about the potential Iranian nuclear weapon. That is why I spoke to President Rouhani of Iran last night to make it clear that we want a good outcome to these talks, but it has got to be an outcome that takes Iran further away from a nuclear weapon rather than one that retains the status quo.

[Mr Peter Hain (Neath) (Lab)]

While agreeing with the right hon. Member for Belfast North (Mr Dodds) that there should be no question of an amnesty, surely there is some merit in the proposal from the Northern Ireland Attorney-General that rather than incurring enormous expenditure pursuing crimes committed during the troubles decades ago—where the evidence is difficult, if not impossible, to establish—the justified grievances of victims, including widows of police officers and prison officers, should be addressed in other ways so that Northern Ireland can move on from its hideous past.

[The Prime Minister]

I have great respect for the right hon. Gentleman’s views on this issue. He served in Northern Ireland and knows how important these issues are. I would make two points. First of all, I do think it is important to allow Richard Haass to do his work about parades, about flags and about dealing with the past. Clearly, the dealing with the past part is the most difficult of the three and the most difficult to unlock. The second point I would make is that we are all democrats who believe in the rule of law and believe in the independence of the police and prosecuting authorities, who should, if they are able to, be able to bring cases, and it is rather dangerous to think that you can put some sort of block on that. But of course we are all interested in ways in which people can reconcile and come to terms with the bloody past so that they can build a viable future and a shared future for Northern Ireland.

[Mr David Ruffley (Bury St Edmunds) (Con)]

Q9. The people and the businesses of Suffolk are driving economic growth in the east of England, but they are increasingly fearful that the proposed A14 road toll will put Suffolk at a serious competitive disadvantage compared with other counties. Will my right hon. Friend seriously reconsider the current road toll proposal?

[The Prime Minister]

I will, and I know the Chancellor and the Transport Secretary will, listen carefully to the representations made by Suffolk MPs. I think we have all received representations. The important point is that we want new roads to be built, and we all know there are shortages in terms of the capital expenditure that we can bring forward. That is why the idea of having tolling for some new roads and new schemes is properly worth looking at, but we will listen carefully to colleagues and people in Suffolk, and businesses in Suffolk too.

[Mr Tom Harris (Glasgow South) (Lab)]

Bereaved parents coming to terms with their loss have no right to paid employment leave, which forces many of them to go back to work far too soon after the death of a child. Will the Prime Minister commit to amending the Employment Rights Act 1996 so as at last to give British parents the legal right and the time to grieve?

[The Prime Minister]

The hon. Gentleman raises an important issue, and I am happy to look at that, having suffered that experience myself. As a Member of Parliament, it is possible to take a little bit of time to stand back and come to terms with what has happened, because colleagues and the people who help us are ready to step in and do what they can. He has raised an important point; let me look at it and get back to him.

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

Q10. If he will rule out the removal of continuous at-sea nuclear deterrence for as long as he is in office.

[The Prime Minister]

As I told my hon. Friend when he last asked about this issue, if we want a proper, functioning deterrent, we need to have the best. That means a permanent, at-sea, submarine-based posture, and that is what a Conservative-only Government after the next election will deliver.

[Dr Lewis]

May I reassure my right hon. Friend that that excellent answer will remain on my website for as long as it takes for the pledge to be fulfilled? I notice that he used the words “Conservative-only Government”. Will he reassure the House that never again will Liberal Democrats be allowed to obstruct or delay the signing of the main gate contracts, and will he undertake to sign those contracts at the earliest possible opportunity?

[The Prime Minister]

I would say a couple of things to my hon. Friend. First, investment in our nuclear deterrent has not ceased. Actually, we are taking all the necessary steps to make that main gate decision possible. Also, we have had the alternative study, which I do not think came up with a convincing answer. I have to say, however, that I do not feel that I would satisfy him even if I gave him a nuclear submarine to park off the coast of his New Forest constituency. [Laughter.]

[Mr Speaker]

I rather fear that that is true, having known the hon. Member for New Forest East (Dr Lewis) for over 30 years.

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

Is the Prime Minister aware that, according to The Economist, Britain is now 159th lowest in the world in terms of business investment, just behind Mali, Paraguay and Guatemala? Will he therefore please tell the House when, under his esteemed leadership and that of his Chancellor, Britain can expect to catch up with Mali?

[The Prime Minister]

I can only conclude that the right hon. Gentleman, too, has been on a night out on the town with Rev. Flowers and that the mind-altering substances have taken effect. The fact is that in the first six months of this year, Britain has received more inward investment than any other country anywhere in the world.

[Mr Stephen O’Brien (Eddisbury) (Con)]

Q11. Had my right hon. Friend and the Government taken the advice of the Opposition, what would have been the impact on the cost of fuel and what would have been the consequences for families?

[The Prime Minister]

My hon. Friend makes an important point. Let us look at the cuts and freezes on fuel duty that we have made. Fuel duty would be 13p a litre higher under Labour’s plans than under our plans. To use a simple word, it would be a “nightmare”.

[Bill Esterson (Sefton Central) (Lab)]

The Prime Minister’s own Education Department has said that it has closed 578 children’s centres. How is that protecting Sure Start?

[The Prime Minister]

I gave the hon. Gentleman the figures, but I am afraid that he was unable to think on his feet and alter his question. The fact is that there are 3,000 such centres open, and only around 1% have closed.

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

Q12. Aston Manor brewery in my constituency has invested £10 million and created lots of jobs in Tiverton. The OECD has upgraded its forecast for Britain while downgrading global forecasts. Does my right hon. Friend agree that reducing debt is the way to get the economy moving, rather than incurring more debt, as the party opposite would do?

[The Prime Minister]

I am grateful to my hon. Friend for that question. The OECD forecast that came out this week shows a massive increase in the forecast for UK growth over the next couple of years. Of course, the Opposition do not want to talk about the economy. They told us that we were going to lose 1 million jobs, but we gained 1 million jobs. They told us growth would be choked off, but growth is growing in Britain. That is what is happening. The nightmare of the shadow Chancellor wants to talk about everything else. When it comes to debt, let me just remind him of this important point, which is directly relevant to the issue of debt. The former Mayor, Ken Livingstone, said this:

“Gordon Brown was borrowing £20 billion a year at the height of the boom in the first decade of this century in order to avoid having to increase taxes, because he wanted to increase public spending. It was an act of cowardice.”

That is, if you like, the “daymare”. [Interruption.] We are also hearing ranting from the nightmare.

[Teresa Pearce (Erith and Thamesmead) (Lab)]

The housing—[Interruption.]

[Mr Speaker]

Order. The hon. Lady has a right to put her question and to be heard when she does so, and that is what is going to happen.

[Teresa Pearce]

Thank you, Mr Speaker. The housing association that is landlord to some of the poorest people in my constituency recently voted its chief executive a non-contractual redundancy pay-off of £397,000. Will the Prime Minister join me in condemning the board’s action and asking for it to be repaid and invested in much-needed tenant services?

[The Prime Minister]

I am very happy to look at the case the hon. Lady mentions, because some of these pay-offs really are completely unacceptable, and we need to make sure that local authorities properly take responsibility for stopping such high pay-offs. In terms of other parts of the economy, we are making sure that if people are re-employed, having taken these pay-offs, they have to pay back the money. I think that is vitally important, and perhaps it might apply in this case too.

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

Does my right hon. Friend agree that a key element of the success of the plan for the Reserves would be if he joined with the Leader of the Opposition in inspiring employers to recognise that its success—because there is no plan B—is in the national interest?

[The Prime Minister]

I completely agree with my right hon. Friend. This is an important programme for the future of the country. Of course I understand hon. and right hon. Members’ concerns about this, but if we pass the amendment in the name of my hon. Friend the Member for Basildon and Billericay (Mr Baron), that would simply stop us investing in and improving our Reserves, rather than changing the overall stance.

I have noticed that Labour put out a statement today, saying,

“We are not calling for the reforms to be reversed. We are not saying the reforms should be shelved.”

In that case, if they vote against the Government, one can only assume that it is naked opportunism.

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

Can the Prime Minister explain to the House why he wanted to delete his pledge of no cuts to public services from the Conservative party website?

[The Prime Minister]

What we promised is that we would not cut the NHS, and we have not cut the NHS. We made it absolutely clear before the last election we would have to take difficult decisions, but it is because of those difficult decisions that the deficit is coming down, employment is growing, there are 1 million more people in work and our economy is doing better. If we followed the advice of the party opposite, we would have more spending, more borrowing, more debt—all of the things that got this country into the mess in the first place.

Petition

Wednesday 20th November 2013 Commons Chamber

Paul Burstow (Sutton and Cheam) (LD)

- Hansard - - Excerpts

The petition relates to the future of St Raphael’s hospice in my constituency, which is being put at risk by the actions of the trustees of the charity that owns it, the Daughters of the Cross. The threat to the hospice, which is much loved and respected, has led staff, volunteers and the families of people who have used it to collect more than 5,900 signatures on a petition calling on the Vatican to intervene. Next week the chair of the hospice’s advisory committee, Dr Ron McKeran, and I will meet the Pope’s representative in this country, the Papal Nuncio, Archbishop Mennini, to tell him about the petition and the more than 5,900 signatures collected from the public and urge him to use his good offices to secure a resolution to the dispute between the staff and volunteers and the charity.

The petition states:

The Petition of residents of the UK,

Declares that the future of St Raphael’s hospice has been put in doubt by plans drawn up by Daughters of the Cross, a charity that funds the hospice, and by plans to sell off St Anthony’s hospital, which shares the site with the hospice and provides administrative and other support services worth up to a million pounds a year; further, that the sale of the hospital will break the funding link with the hospice and undermine the Christian character of the institution; further, that the Petitioners regret that rather than engaging with the staff and supporters of the hospice and hospital to find a mutually agreed solution to the future of both institutions, the charity has pursued a course of action that is not widely supported; and further, that the Trustees have failed to grasp that the success and respect in which both institutions are held is the result of a shared endeavour between themselves, the staff and volunteers and the local community who raise and donate the funds to pay for them.

The Petitioners therefore request that the House of Commons thanks Her Majesty’s Government for raising the matter with the relevant authorities in the Vatican; further, that the House urges the Papal authorities to intervene to protect the ethos of St Anthony’s hospital and its special relationship with St Raphael’s hospice; and further, that the House holds a debate on the future of St Raphael’s hospice and possible ways forward.

And your Petitioners, as in duty bound, will ever pray.

[P001297]

Point of Order

Wednesday 20th November 2013 Commons Chamber

12:34

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

On a point of order, Mr Speaker. As you will have heard and as everyone else in the House heard, I asked a perfectly reasonable question that was based on clear documentary evidence, as I indicated. Is it parliamentary for the Prime Minister to respond by accusing another right hon. Member of sounding as if he has been taking mind-altering substances? Is that—[Interruption.]

[Mr Speaker]

Order. The right hon. Gentleman will complete his point of order. The Prime Minister has indicated a readiness to respond, and that is how we will proceed. A bit of patience is all that is required.

[Mr Meacher]

I want to ask, Mr Speaker, whether it is parliamentary to use such an unjustifiable, rude and offensive phrase about another hon. Member.

[The Prime Minister]

I completely respect the right hon. Gentleman and the important question he asked, which I tried to answer with the point about inward investment into Britain. I made a light-hearted remark—if it caused any offence, I will happily withdraw it. I think it is very important that we can have a little bit of light-hearted banter, and a sense of humour on all sides.

[Several hon. Members]

rose—

[Mr Speaker]

I was looking for the hon. Member for Bromley and Chislehurst (Robert Neill) and I am pleased to have found him. We will just wait for a moment so that an attentive House can hear him.

Gibraltar

Wednesday 20th November 2013 Commons Chamber

12:35

[Robert Neill (Bromley and Chislehurst) (Con)]

(Urgent Question): To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the unauthorised incursion of a Spanish naval vessel into British territorial waters at the entrance to Gibraltar harbour on 19 November 2013.

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

On 19 and 20 November 2013, RV Ramon Margalef, a Spanish Government research vessel made an unlawful incursion into British Gibraltar territorial waters that lasted 22 hours in total. During that time, the vessel undertook significant survey activity. Vessels of the Royal Navy Gibraltar Squadron challenged the vessel with radio warnings and continued to shadow the vessel until it departed. The Ramon Margalef was joined in British Gibraltar territorial waters by three vessels of the Spanish Guardia Civil, which attempted to act as escorts to this vessel. The Guardia Civil vessels were also challenged and shadowed by the Royal Navy until they left Gibraltar waters.

Yesterday evening, the Foreign Office summoned the Spanish ambassador to the UK in order to underline the British Government’s serious concerns regarding this provocative and unlawful incursion by a Spanish state research vessel. During the meeting, the ambassador was again reminded of our continued concerns regarding border delays, which continue on a near-daily basis, and our desire to move relations on to a more positive track through ad hoc talks, as proposed by the Foreign Secretary in April 2012.

Yesterday’s incursion occurred despite repeated diplomatic protests to Spain in recent months, and comes only two weeks after a dangerous manoeuvre by Guardia Civil vessels put lives at risk and resulted in a minor collision. According to the United Nations convention on the law of the sea, the waters around Gibraltar are indisputably British territorial waters, under United Kingdom sovereignty, in which only the United Kingdom has the right to exercise jurisdiction. We remain confident of UK sovereignty over the whole of Gibraltar, including British Gibraltar territorial waters.

The British Government strongly condemn this provocative incursion and urge the Spanish Government to ensure that it is not repeated. We stand ready to do whatever is required to protect Gibraltar’s sovereignty, economy and security. We believe that it is in the interests of Spain, Gibraltar and Britain to avoid incidents such as this, which damage the prospects for establishing dialogue and co-operation. The UK wants to maintain our strong bilateral relationship with Spain, which stretches across a range of areas and delivers support for UK and Gibraltarian interests. However, the Spanish Government are wrong if they believe that they can advance Spain’s position on sovereignty by increasing pressure on Gibraltar, whether at the border, through unlawful incursions or by other actions, such as complaints and posturing in the EU.

[Robert Neill]

I am grateful to the Minister for his response. Does he agree that this is just the latest incident in an escalating and cynical campaign of harassment of the people of Gibraltar by the Government in Madrid for their own domestic reasons? Will he conclude that it is now the time not only to make strong diplomatic representations, but to take specific legal action against Spain through the international courts for the clearest possible breach of international law? Furthermore, does he think that we should discuss with Her Majesty’s Government in Gibraltar the possibility of reinforcing the naval presence that supports our forces in Gibraltar by means of a larger, deeper depth patrol boat or of an ocean-going tug that will be able to remove offending vessels from British territorial waters in a way that our current admirable patrol boats are not able to do?

[Mark Simmonds]

I thank my hon. Friend for articulating the concern of many people both inside and outside this House, across the United Kingdom and in Gibraltar. It may be helpful if I give the House the most up-to-date information and the facts. It was not a Spanish naval vessel that went into British territorial waters, but a Spanish-owned oceanographic vessel. It did not get to the entrance of Gibraltar harbour, but was about 250 metres from it. It needs to be reiterated that an escalation of this matter is in nobody’s interest. A political solution to the dispute is required. Of course nothing is taken off the table. We constantly review the naval presence in and around Gibraltar, and we are certainly doing so now. We are keen to return to the ad hoc talks, from which the current Spanish Government withdrew in 2011, involving both the British and Spanish Governments and also the Government of Gibraltar.

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

I congratulate the hon. Member for Bromley and Chislehurst (Robert Neill) on securing this urgent question. I rise now to underline the deep concern on the Labour Benches that further Spanish ships entered British Gibraltar territorial waters yesterday without authorisation and stayed for more than 20 hours. Spain is our ally in NATO and on the world stage and is often our ally in the European Council, so its actions on Gibraltar are even more reprehensible in that context. The Spanish Government should be in no doubt that both sides of the House share the anger about yesterday’s events.

Will the Minister tell the House when he or other Ministers became aware of the Spanish ship’s incursion into our waters yesterday, and whether any effort was made during the 20 or more hours the ship was in our waters to contact officials or Ministers in the Spanish Government to demand that the ship be ordered to withdraw?

I welcome the decision by Ministers yesterday to again summon the Spanish ambassador. Is the Minister or the Foreign Secretary planning further calls to their Spanish Government counterparts to underline the seriousness with which this latest action is viewed? Gibraltar cannot and should not be used by Spain’s Government to score cheap political points.

The Chief Minister of Gibraltar is quoted as saying that he has discussed the possibility of more senior assets of the Royal Navy being put at the disposal of the commander of British forces in Gibraltar. Will the Minister give us more information on those discussions and tell us whether he has had, or intends to have, further talks with the European Commission on the ongoing delays at the border?

Finally, the Minister made brief reference to the Spanish Government having pulled out of the trilateral forum in 2011. Does he see any sign of the Spanish accepting the need to return once again to the use of that sensible diplomatic channel for discussions?

[Mark Simmonds]

The hon. Gentleman asked a series of questions. I first became aware of this incursion yesterday morning. The House will not be surprised to learn that there were contacts between the British Government and the Spanish Government to encourage the Spanish Government to ensure that the vessel was removed from British Gibraltar territorial waters. I can give the hon. Gentleman an assurance that, as far as I am aware—this was the situation when I came to the House to answer the urgent question—the vessel had not returned to British Gibraltar territorial waters as was its intention yesterday, so those contacts have had some impact. The discussions about whether the naval presence in and around Gibraltar is correct are ongoing and the hon. Gentleman will not be surprised that I will not go into the detail at this stage. We are also in constant contact with the Government of Gibraltar to ensure that the information being provided is available to the Governments of both the UK and Gibraltar.

Let me also address the point that the hon. Gentleman made about the European Commission and its role in trying to settle this political dispute. He will be aware that the Commission visited the border on 25 September and will not be surprised to hear that there were few delays during that visit. The Commission has committed to monitoring the situation and possibly to returning in six months’ time. We continue to provide evidence to the Commission about what we believe is the unlawful Spanish activity. We also urge the Spanish to implement the recommendations made by the Commission to the Spanish Government about how they can improve ease of access across the border. Those recommendations are to optimise physical space on the Spanish side, including increasing the number of vehicle lanes; to carry out more targeted checks, particularly as they relate to the significant problem of tobacco smuggling; and to develop a mechanism to exchange information with the United Kingdom specifically to target tobacco smuggling.

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

I commend my hon. Friend for his measured and carefully considered answer to the question. He will be well aware that the purpose of provocation is to provoke—that is, to provoke a reaction that justifies the initial action of provocation. I hope therefore that his policy will be to ensure that the United Kingdom does not fall into that trap. May I go back to the question of NATO, however? Under article 5 of the north Atlantic treaty, all members of NATO are obliged to regard an attack on one as an attack on all. Under those circumstances, is not the NATO route perhaps one of the most effective diplomatic routes that could be followed in this case to bring some sense to the attitude of the Spanish Government?

[Mark Simmonds]

My right hon. and learned Friend makes an important point. Of course, we have strong and positive relations with Spain in a range of areas. Approximately 1 million UK citizens live in Spain and approximately 14 million UK citizens visit Spain each and every year. He is absolutely right to focus on the importance of not responding aggressively to this provocation and to re-emphasise and reiterate the necessity to de-escalate what is a political dispute. My right hon. and learned Friend’s point about NATO is absolutely right, although the UK Government do not consider this a military attack. At no time has the Spanish navy come into British Gibraltar territorial waters.

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

The Minister says that a political solution is needed, but surely he would accept that we have a political solution. Gibraltar is British, the people of Gibraltar wish to remain British and that is that. Will he make it absolutely clear to the Spanish Government that this constant harassment is unacceptable, that if the Spanish navy is involved in such incursions we will retaliate with our naval vessels and that the harassment at the border must stop? It is no good going on saying that we are friends. Friendship consists of friendship; it does not consist of immoderate and intolerable harassment by the Spanish Government.

[Mark Simmonds]

The right hon. Gentleman can be assured that we express our concern and distaste in the strongest possible terms about both the incursions into British territorial waters and the border disputes we were talking about a moment ago. I assure the right hon. Gentleman that our position on the sovereignty of Gibraltar is clear and unchanged. We will protect the right of the people of Gibraltar to determine their political future. The UK will never enter into arrangements under which the people of Gibraltar will pass under the sovereignty of another state against their wishes. Furthermore, the UK will not enter into any process of sovereignty negotiations with which Gibraltar is not content.

[Mr Henry Bellingham (North West Norfolk) (Con)]

When my hon. Friend next sees his Spanish counterpart, will he remind him that Spain possesses two enclaves on the coast of north Africa, and will he tell him that we will respect Spain’s sovereignty over its overseas territories if it does the same in respect of Gibraltar?

[Mark Simmonds]

My hon. Friend makes a powerful point in an extremely relevant way, and I have no doubt that the Spanish ambassador and others in Spain will have noted his comments.

[Mr Peter Hain (Neath) (Lab)]

I agree with the Minister’s measured response, but I put it to him that the problem is that there is no agreement between Spain, Britain and Gibraltar that resolves these problems. May I advise him to look again at the agreement that I signed as Europe Minister with the Spanish Government, but which was subsequently reneged on at a higher level? It was supported by the Conservative former Foreign Secretary, Lord Howe, and by Lord Garel-Jones. It guaranteed Gibraltarians British citizenship and their rights, including the right to political self-determination, but acknowledged the historical Spanish interest. If we move down that road, we might resolve these problems.

[Mark Simmonds]

The right hon. Gentleman makes a very fair point, and that is why, while we are making sure that we deter, as far as possible, any further incursion into those waters and are trying to put in place mechanisms to resolve the challenges and the significant unacceptable delays at the border, the focus is on returning to the talks—both the ad hoc talks that the Foreign Secretary proposed in April 2012 and, hopefully, the tripartite talks that were under way before the current Spanish Government came to power, in which there was detailed discussion of the operation of the border and other matters between the Spanish, British and Gibraltarian Governments. In the long term, that has to be the way forward.

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

Given the Spanish Government’s sudden enthusiasm for rigorous border controls, will the UK Government consider setting up a special line at Heathrow airport for planes coming from Spain, and a line dedicated to Spanish passport holders, so that we can show the same rigour with regard to their entry to the United Kingdom as they are showing in allowing our citizens to enter Spain from Gibraltar?

[Mark Simmonds]

My hon. Friend makes a passionate point, but he will no doubt be aware that the majority of people who are inconvenienced by the significant delays at the Spanish-Gibraltar border are Spanish citizens trying to get into Gibraltar; many of them work there. We have to try to make sure that the Spanish implement what the European Commission set out in its correspondence with Spain, which I outlined earlier, to ensure that any citizen of any country wishing to travel across the border between Spain and Gibraltar can do so in an expeditious manner.

[Mr Nigel Dodds (Belfast North) (DUP)]

Given the escalation in the violations of British Gibraltar’s waters by Spanish vessels and the increase in illegal road checks, instead of calling in the Spanish ambassador for possibly the fourth, fifth or sixth time, is it not time for the Prime Minister to get involved directly, at Head of Government level, to pursue the NATO route alluded to by the right hon. and learned Member for North East Fife (Sir Menzies Campbell)? Is it not time to spell out the consequences for Spain—it would be helpful if the Minister could do that today—if this action continues?

[Mark Simmonds]

I can assure the right hon. Gentleman that there is constant contact between the UK and Spanish Governments. We certainly call in the Spanish ambassador, as we did yesterday and have done on previous occasions, when we feel that behaviour is unacceptable, but I can give the right hon. Gentleman an assurance that over the summer the Prime Minister, the Deputy Prime Minister, the Foreign Secretary and the Minister for Europe all spoke to their respective counterparts in Spain to try to de-escalate the challenges that we are talking about. That will continue unless the Spanish change their behaviour.

[Bob Stewart (Beckenham) (Con)]

Spain is a NATO ally, so perhaps the Spanish will understand that we may express our disquiet by stopping our naval vessels going to places such as Rota to re-provision, and may instead re-provision them in Gibraltar, or perhaps by sending an infantry company to Gibraltar on roulement more often, to express our extreme worries about what is happening to our people in Gibraltar.

[Mark Simmonds]

I am grateful to my hon. Friend for his remarks. I assure him that the Royal Navy challenges all unlawful incursions by vessels, and indeed puts out radio warnings about the monitoring of all offending state vessels until they leave our waters, but it is clear that we need to de-escalate this, not go in the other direction.

[Kate Hoey (Vauxhall) (Lab)]

The Minister should not hold his breath waiting for the European Commission to do anything more on the problems at the border. As a huge morale boost for Gibraltarians, perhaps he or the Foreign Secretary will get on a plane in the next couple of days, and go to Gibraltar, and make it very clear publicly that they will do whatever is needed to protect Gibraltarians from Spanish bullying.

[Mark Simmonds]

I am grateful to the hon. Lady for that suggestion. I cannot speak on behalf of the Foreign Secretary, but I can certainly give her an unequivocal assurance that the United Kingdom Government, including the Foreign Office, stand shoulder to shoulder with the Government and the people of Gibraltar to make sure that they can keep their links with the United Kingdom. We will work together to do everything that we can to reduce and mitigate this unacceptable behaviour, both on the part of Spanish oceanographic vessels and as regards the border delays.

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

Will my hon. Friend remind his Spanish counterpart that in 1967 almost 100% of Gibraltarian people voted to remain under the sovereignty of the United Kingdom? In the most recent poll, in 2002, 98.5% of the people voted to reject joint sovereignty with Spain. Will he tell our Spanish counterparts that this harassment by the Spanish Government is totally unacceptable and violates all UN charters?

[Mark Simmonds]

I can give my hon. Friend the assurance that of course we will continue to make the strongest possible representations to the Spanish Government. It is relevant, in response to his question, to highlight that Gibraltar’s constitution reflects the principle that the people have the right of self-determination. The realisation of that right must be promoted and respected in conformity with the provisions of the charter of the United Nations that are applicable under international treaties. Certainly, we will not go down the route that the previous Government took in 2002.

[Mr David Winnick (Walsall North) (Lab)]

I agree with the Minister that everything should be done to de-escalate the crisis, and we should recognise that Spain is a long-term ally of ours, but is the Minister aware that those of us who supported Spanish democrats during the very long years of Franco’s brutal dictatorship much regret the pressure that Spain is putting on the people of Gibraltar, who have made it clear, as has been stated time and again today, that they want the status quo to remain?

[Mark Simmonds]

The hon. Gentleman makes a powerful point. Bullying and intimidation, wherever they occur, are unacceptable, but that certainly appears to be what is happening in relation to Gibraltar. I can give him, as I have given others, an assurance that the British Government will continue to make the strongest possible representations to ensure, hopefully, that the situation is de-escalated, and that the Spanish Government change their behaviour.

[Robert Halfon (Harlow) (Con)]

Does my hon. Friend agree that the behaviour of the Spanish Government has got worse and worse, and that rather than behaving like the democratic European country that it is supposed to be, Spain’s intimidation tactics put it more in line with Iran than Europe? Does he agree that if this carries on, we should send the Spanish ambassador packing from this country?

[Mark Simmonds]

I am not sure that the comparison that my hon. Friend makes is fair or accurate. As I mentioned, the Spanish ambassador was called in yesterday, and we clearly set out, in no uncertain terms, the strength of feeling in both the United Kingdom and Gibraltar about Spain’s actions. Ultimately, as I have said, we have to return to the ad hoc talks suggested by my right hon. Friend the Foreign Secretary. Interestingly enough, the Spanish Government have publicly said that they will return to those talks, but have not yet specified the exact date when that will happen.

[Chris Bryant (Rhondda) (Lab)]

With massive corruption allegations swirling around the Spanish Government, I am sure there is nothing Señor Margallo would like more than for our Government to take up the suggestions of the hon. Member for Monmouth (David T. C. Davies), my hon. Friend the Member for Vauxhall (Kate Hoey) or the hon. Member for Harlow (Robert Halfon). The Spanish Government would love to escalate the situation. They would love to wipe all those stories off the Spanish newspapers’ front pages so that they could have a good old-fashioned Francoist row with Britain. May I urge the Minister, if he ever gets anywhere close to his sabre, just to leave it alone?

[Mark Simmonds]

I am grateful to the hon. Gentleman for those remarks. He is right that we need to be calm, but we need also to be firm, to make sure that the Spanish understand that the behaviour, both at the border and in the territorial waters, is not acceptable. He is also right to highlight the domestic political problems that Spain and the Spanish Government have. In addition, there are clearly some issues that relate specifically to tobacco smuggling across the Spanish-Gibraltar border. The Spanish Government, the Gibraltarian Government and the United Kingdom need to work together to resolve those.

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

I am left wondering whether there has been a breach of article 5 of the NATO treaty. I served in the Army in Gibraltar in 1995 as aide-de-camp to the Governor. Three-hour waits at the border were commonplace then, caused by overweight Spanish security guards taking far too long to do their inspections. When my hon. Friend met the ambassador yesterday, did he give him a copy of the treaty of Utrecht signed by the Spanish in 1713, which makes it very clear that Gibraltar is not part of Spain?

[Mark Simmonds]

My hon. Friend makes a powerful point. I do not think the ambassador was given a copy of the treaty of Utrecht; I am sure he is very much aware of its contents. But he was told in no uncertain terms about the unacceptability of the oceanographic vessel entering British Gibraltar territorial waters and staying there for the length of time that it did. He was also made well aware of the strength of feeling that exists in both Gibraltar and the United Kingdom about the unacceptable delays at the border, which are potentially hindering the economy in Gibraltar, and hindering free access and movement for Gibraltarians and for Spanish people as well.

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

By my count, this is the fourth time that the Foreign Office has summoned the ambassador and his representatives for a stern ticking-off. On each occasion the Spanish have escalated the dispute by trying to ruin Gibraltar economically with these absurd border checks. Does there not come a point where even the Minister would accept that this strategy is not working and that we need real action from this Government?

[Mark Simmonds]

The United Kingdom is standing shoulder to shoulder with the Government and the people of Gibraltar. The Spanish activity, both the incursion into territorial waters and the border delays, are unacceptable. The British Government have made this clear in the strongest possible terms. The Prime Minister wrote to the EU Commission President to ask the EU Commission to get involved, which it has now done. We continue to provide evidence to the EU Commission, we continue to press the EU Commission to make sure that its recommendations to the UK, Gibraltar and Spain are implemented in full, and we will continue to do everything we can through diplomatic and political means to resolve what is a political dispute to the satisfaction of Gibraltarians and everybody in the United Kingdom.

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

Partido Popular in Spain and the Government are extremely unpopular, so these activities are just a diversion. The trouble is that the people of Gibraltar are the ones who suffer every time the border is closed. We need to stop these things constantly being escalated. In the end, it is the democratic right of the people of Gibraltar to remain British, which they emphasise all the time. We must do more as a Government to make sure the borders are open.

[Mark Simmonds]

My hon. Friend makes an extremely important point about the necessity to improve access across the border, which is why we will try to do everything we can to ensure that the EU Commission’s recommendations are implemented in full. We also fully expect Spain to act on the Commission’s recommendations. The Commission is still clearly concerned by the situation and is committed to remaining engaged and following up in the way that I outlined. Interestingly, it has reserved the right to reconsider its position and has explicitly offered the possibility of a further visit to the border. If the Commission is to do that, I suggest that it does so without giving the Spanish notice so that it can see how people are suffering.

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

The right of self-determination of Gibraltar must surely be respected above all, and we should stand with Gibraltar and put some backbone into the European Commission to rein in Madrid. Although Gibraltar is not in the UK, it is a British overseas territory in special social union with us, but regardless even of that, international law must be respected. As Spain is a democracy, in the EU and in NATO, should it not start behaving accordingly, and certainly not fire shots at a young man on jet skis in Gibraltar harbour? Finally, is there any hope of making the European Commission rein in Spain much sooner than in six months?

[Mark Simmonds]

The hon. Gentleman is right about the incident that happened a little while ago with the jet ski. He will be aware of the strong protestations that we made at the time. To clarify the position, our policy on Gibraltar is crystal clear. The people of Gibraltar have repeatedly and overwhelmingly expressed their wish to remain under British sovereignty and we will respect their wishes. This is entirely consistent with the purposes of the principles of multilateral organisations such as the United Nations, which determine the principle of self-determination.

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

Is my hon. Friend aware that a possible political solution is already going through the House? My Gibraltar (Maritime Protection) Bill seeks to enshrine and update the treaty of Utrecht to ensure that Gibraltar’s waters have a stipulation of three miles in UK law. I know I have the backing of Members on both sides of the House, and that the Bill will have its Second Reading on 28 February next year. Will the Government give it priority and speed it through to ensure that the behaviour that we have seen over the past few weeks from the Spaniards does not continue and will not happen again?

[Mark Simmonds]

I am grateful to my hon. Friend. I am aware of the private Member’s Bill to which he refers. My understanding is that it is not required, because under international law the three-mile limit in British Gibraltar territorial waters is already in place. Indeed, my understanding is that it may be possible to extend that to 12 miles, but we have not chosen to do so. The three-mile limit is already enshrined in international legislative structures.

[Martin Horwood (Cheltenham) (LD)]

Gibraltar’s Member of the European Parliament, Sir Graham Watson, has emphasised that the authorities would be quite within their rights to board and impound Spanish vessels, should there be a further incursion. Does the Minister agree that the Royal Navy has so far shown admirable restraint, emphasising Britain’s unwillingness to escalate the crisis on our side?

[Mark Simmonds]

The hon. Gentleman is right. The simplistic answer to his question is yes, but we will ensure that the Spanish and those vessels that make any incursion into British Gibraltar territorial waters are under no illusion about the fact that they are not welcome, and that those are British waters and do not belong to Spain.

[Mr Philip Hollobone (Kettering) (Con)]

The Spanish Government seem to regard the dressing-down of their ambassador about as seriously as a miscreant youth regards an antisocial behaviour order. What is required for miscreant youths who have an ASBO is a firm deterrent, so what is the Minister saying to the Spanish Government about what will happen, should an incursion happen again?

[Mark Simmonds]

We have made it very clear that these incursions are unacceptable. We continue to ensure that the Royal Navy will take tough action, but we are also making sure that our differences with Spain regarding these territorial waters should be resolved by diplomatic and political means, not through naval confrontation. My hon. Friend may be disappointed with this, but we do not believe that gunboat diplomacy and tit-for-tat escalation is in anyone’s interests.

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

Last night Gibraltar marked its debut as a UEFA member by holding Slovakia to a goalless draw. Does the Minister, like me, look forward to a qualifying fixture in a future tournament for which the Spanish football team will have to cross the border into Gibraltar?

[Mark Simmonds]

I join my hon. Friend in congratulating the Gibraltarian football team on last night’s result. To be absolutely clear, the incursions by Spanish vessels are a violation of sovereignty but not a threat to sovereignty.

[Heather Wheeler (South Derbyshire) (Con)]

My constituency is completely land-locked and in the centre of the country, but I have been amazed by the number of e-mails and contacts pouring in from constituents fed up to the back teeth with this. I appreciate that the Minister has given us some soft and warm words about de-escalation and the need to resolve this diplomatically, but I have a feeling that the people of South Derbyshire would like the Royal Navy to send some bigger ships there as soon as possible.

[Mark Simmonds]

I understand my hon. Friend’s concern and that of her constituents, and she will not be surprised to hear that they are not unique in holding those views. There is genuine anger about both what has happened at the border and the incursion into British Gibraltar territorial waters. Obviously, as I said in my initial remarks, we constantly review whether the Royal Navy’s deployment in Gibraltar is adequate. She will be under no illusions about the fact that we are now reviewing that, but ultimately this has to be resolved through diplomatic and political mechanisms. It is in no one’s interest to escalate this conflict. We hope that implementation of the European Commission’s recommendations, as set out in its letter to the Spanish Government, and maintaining the firm stance that incursions into the waters are completely and utterly unacceptable will change behaviour.

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

Will my hon. Friend join me in paying tribute to Gibraltar for its 300 years of gallantry, fortitude and loyalty to the British Crown? Is he willing to meet me and some of my constituents who have been campaigning for that great naval port to be granted the George Cross? Finally, if he ends up having to send the military to Gibraltar, will he ensure that he sends the Royal Marines to support the Royal Gibraltar Regiment? After all, it was they who secured it in the first place.

[Mark Simmonds]

I am well aware of my hon. Friend’s determination and his passion for the links between the United Kingdom and Gibraltar, which most Members of the House, if not all, share. He is absolutely right to highlight the 300 years of history. I can sum up those historical links in one neat phrase: their history is our history. He is also passionate about his campaign for Gibraltar to be given the George Cross. He will be well aware of the extremely high bar that exists for achieving the George Cross on a collective basis—it has been received only by Malta and by the Royal Ulster Constabulary. There is a process for that, and I know that he and those who support his campaign are already engaged in it.

[Ian Paisley (North Antrim) (DUP)]

I am sure that it will have struck the Minister from the questions asked today that the weight of opinion in this House is in favour of action. On that basis, will he take the opportunity when he next speaks to the ambassador to reflect on that weight of opinion and make it abundantly clear that we will take this no longer?

[Mark Simmonds]

The hon. Gentleman makes a powerful point. It is certainly true that the strength of feeling across the House about the unacceptability of Spain’s behaviour towards Gibraltar sends an extremely powerful message to the Spanish Government and others in Spain who wish to make life difficult for the people of Gibraltar. I can give him an assurance that we will continue to make that case in very strong terms on behalf of hon. Members.

[Glyn Davies (Montgomeryshire) (Con)]

Many Members have contributed to this urgent question, and it is clear that there is cross-party support for the considered clarity that my hon. Friend the Minister has shown. Will he reassure us that the British voice, whatever form it takes, in other institutions, such as the United Nations, NATO and the European Union, will reflect just as clearly the fact that Gibraltar is British and will remain British?

[Mark Simmonds]

I can give my hon. Friend the assurance that in bilateral meetings and on the multilateral stage we will continue to make those points extremely strongly and forcefully.

[Bill Wiggin (North Herefordshire) (Con)]

It appears that the Spanish and the Argentines egg each other on over our disputes. What is the Foreign Office doing to encourage Spain’s other allies to dissuade it from putting its seamen’s lives at risk?

[Mark Simmonds]

That is part of the effort we are putting into providing evidence to the European Commission so that it can play a responsible role in changing Spanish behaviour. My hon. Friend raises an interesting point about talk of co-operation between Spain and Argentina. Despite the threat from the Spanish Foreign Minister, there has been no visible co-operation between Spain and Argentina at the UN General Assembly in 2013. Let me be absolutely clear that the people of both the Falkland Islands and Gibraltar have expressed a democratic wish to remain British.

Start-up Loans

Wednesday 20th November 2013 Commons Chamber

13:16

[The Minister for Skills and Enterprise (Matthew Hancock)]

With permission, Mr Speaker, I wish to make a statement on start-up loans. Since the great recession of 2008, concern has been raised repeatedly across the House about access to finance, particularly for the smallest companies. The contraction in support for small and medium-sized business lending following the financial crisis led to a sharp drop in the growth of lending to, and support for, small businesses. All Members will recognise the constraints facing aspiring entrepreneurs across the country trying to access finance.

Those problems were a consequence of an overreliance on bank finance compared with our international competitors, a hollowing-out of business lending units in the big banks and too much concentration in our banking system, followed by the biggest banking bust ever faced in this country and the biggest bank failure in the world in 2008.

A calamity of that scale cannot be addressed by a single policy, so since 2010 we have engaged on a comprehensive programme of bank reform: splitting retail and investment banking; requiring greater capital; introducing a tax on leverage; introducing much stronger requirements to check that the people running banks are fit and proper persons, so that we do not get the likes of Fred Goodwin and the Rev. Paul Flowers sitting atop our banks in future; and introducing criminal charges for those who behave negligently in charge of big banks.

Those changes are part of a wider drive to change the culture of banking so that our banks serve the economy, rather than the other way around, but alone they are not enough. To help companies access finance, we have introduced the British business bank, doubled the seed enterprise investment scheme, expanded the enterprise finance guarantee, and last year we introduced start-up loans of up to £25,000 per founder—although, more typically it is around £6,000—to help budding entrepreneurs access the seed capital to make their idea a reality.

For too long Britain has been a home of great ideas that are then commercialised and developed elsewhere. We want British business men and women to take brilliant British ideas and turn them into blossoming British businesses. The first start-up loan was made in September 2012, and since then growth has exceeded expectations. Over a third of loans go to black and minority ethnic entrepreneurs and over a third go to people previously unemployed. In June this year the Prime Minister announced that start-up loans would no longer be restricted to young people, so the age cap has been removed altogether. We are now seeing strong growth in the number of people over 30 being helped to realise their full entrepreneurial potential through the programme’s mentoring and financial support.

In August we introduced specialised support to finance ex-military service personnel who want to start their own business within the start-up loans scheme. I am pleased to announce that today we have made the 100,000th start-up loan—[Interruption.] Today we have made the 10,000th start-up loan.

Mr Allen Martin, a Royal Navy engineer from Truro, is the 10,000th loan recipient for the programme. Allen joined the Royal Navy in 1991 as an engineer and mechanic, working with helicopters, search and rescue, and commando forces. He served for 22 years, in Bosnia, Kosovo, Iraq and Afghanistan. Having been medically discharged, Allen knew what he wanted to do—start his own business—so he applied for a start-up loan and founded Eclipse Property Cornwall, which will manage properties on behalf of landlords, renting them out and offering full or part-time management. Allen Martin has benefited from the extension of start-up loans to all ages and the specialised support of our ex-service personnel.

Given the success of this targeted approach within the full age range, we are now going even further. I can tell the House that we are committing a total of £151 million to the scheme this year and next, with the goal of backing 30,000 new businesses by 2015. From 1 January, the Start-Up Loans Company will specifically target priority groups: entrepreneurs over the age of 50, young people not in education, employment or training, and new mothers who are ready to return to the workplace and are seeking the ability to manage their own time and commitments on their own terms.

Age UK estimates that one in five of those over 50 now work for themselves—a growing trend accounting for 70% of the businesses started in the past five years, compared with 28% of those started by young people. With the added support of mentors who understand modern media and marketing, new retail platforms and communication channels, start-up loans can help to bring even more of those in this age group to success. That is why we are tasking Start-Up Loans to find the specialist providers who will make the loans a perfect fit for the older entrepreneur.

On NEETs, I know that Members throughout the House have seen just how valuable and popular these loans are in tackling youth unemployment. Working with the new enterprise allowance, start-up loans give specialist support to those who have been away from the workplace for a long time and need strong and committed mentors with an understanding of what it is to start from a very low base. The Prince’s Trust has already demonstrated just how effective that approach can be, and much more can be done to create a targeted offer that creates the right conditions for these businesses to survive and thrive within the safe environment of start-up loans.

Finally, new mothers are also turning increasingly to self-employment. According to Mumpreneur UK, self-employment for women is rising at three times the rate for men. So far, 37% of start-up loans have gone to women. We want to do more to increase that figure, so we will introduce specialised support for mothers seeking to start businesses who are juggling child care and seeking flexible ways to turn a business idea into reality.

With record new business creation, 400,000 new businesses, record jobs and a record 4.9 million companies in the UK, Britain is once again becoming an entrepreneurial beacon of the world. Our future prosperity rests on the entrepreneurial aspirations of the British people. This Government will not rest in our drive to support those who want to work hard and get on, and I commend this statement to the House.

13:22

[Toby Perkins (Chesterfield) (Lab)]

I thank the Minister for his statement. Given that I first saw it when I arrived at the House, I also thank him for not saying anything surprising during it. I want to place on record the thanks of the whole House for the work that has been done by James Caan and the Start-Up Loans Company to support people to set up their own businesses. I also record our congratulations to Allen Martin, the 10,000th recipient of a start-up loan.

I understand that Allen is one of the very first ex-servicemen to benefit from a start-up loan. It was immense good fortune—I am sure the Prime Minister, as a public relations professional, will have appreciated his luck—that the 10,000th recipient of a loan should happen to be a Royal Naval veteran who gave 22 years’ service to our country, is over the age of 30 and lives far away from London. Sadly, he is not all that typical of the people who are benefiting from the scheme. However, atypical as he may be, he is a great role model to inspire future business leaders.

Small businesses are the lifeblood of our economy, so the £50 million that has been lent to 10,000 new entrepreneurs is an important symbol of the enterprise spirit that runs deep through the proud history of our great island people. The Minister was right to broaden his remarks to address the broader context of the scheme. As we examine the performance of start-up loans in the context of the broader picture for small businesses and the support available, we will see that James Caan is right to say there is still much work to be done.

Does this scheme have a default target and, if so, how is it performing against it? A key lesson from the start-up loans programme is that access to finance schemes is only as good as the infrastructure that supports them and that the schemes rely on a wider system of business support, mentoring and signposting—the very fabric of support that is so lacking in many parts of the country in the absence of Business Link, the abolition of the regional development agencies and the impoverishment of local government.

That is borne out by the statistics that we are welcoming today. In every recession, there has been an increase in business start-ups. People faced with a flat job market and low demand for their skills will often seek to create their own job by setting up a firm. Desperation is not a bad motive for launching a firm—I have done it myself—but it is noticeable that far and away the most loans have been given where businesses support networks are strongest, namely London: 15% of the population lives in London, yet 36% of the start-up loans have been delivered there.

Does the Minister recognise the links between an integrated business support network and successful start-ups? If so, does he regret the destruction of Business Link and the failure to replace it with anything meaningful to provide support, not just to start-ups, but to developing small firms around the country?

Just as with the regeneration money from the Growing Places fund that went much more to London and the south-east, just 5% of the loans under discussion are going to areas such as the north-east, which has seen huge job losses and which we would have thought would be ripe for skilled workers looking to set up their own firms. What is the Minister doing to create a one nation business support network for those areas receiving the least of the start-up loans money? Although we absolutely recognise and welcome the scheme’s success in attracting people from black and minority ethnic backgrounds and the number of women who have benefited from it, it is important that that geographical aspect is recognised.

Is the Minister aware that James Caan has said that support and mentoring is a more important part of the success of this programme than the loan? Is the Minister therefore embarrassed that recent research has shown that people using the Government’s Mentorsme website are four times more likely to offer themselves as experts than as businesses needing mentoring? Does he think that a scheme with four times as many experts as recipients of that expertise sounds like a success?

Will the Minister promise that the success of this worthwhile scheme will not blind him to the fact that there is a crisis in business support in many areas of this country and that businesses that would have had a chance of success will fail because of a lack of signposting and mentoring?

The Minister spoke about commercialised British ideas going overseas, but this type of scheme, important though it is, is not likely to make a difference, because it seems to be targeting a very different part of the market.

The Government’s failure to support small firms with access to finance cannot be camouflaged by this worthwhile scheme. Given that the Government have overseen a £14 billion reduction in lending to small business, will the Minister, at the same time as he celebrates his £50 million scheme, recognise that total lending from it is less than 1% of the shortfall in net lending that British business has experienced? [Interruption.]

[Mr Speaker]

Order. May I gently say to the hon. Gentleman that I think he is approaching his last sentence?

[Toby Perkins]

You are very wise, once again, Mr Speaker, to notice that.

Will the Minister make a statement on the real access to finance crisis that he has done so little about? Will he recognise the need for radical change to the banks through the Labour party’s proposed network of local banks and support for challenger banks, which will lead to the desperately needed improvement in the position of small firms seeking access to finance?

[Matthew Hancock]

Mr James Caan, who runs the start-up loans scheme on our behalf and to whom I pay tribute, is absolutely right to say how important mentoring is—and I think we have just seen why. What a pity that the Labour party cannot be enthusiastic about and supportive of a scheme that has done so much: 37% of start-up loans go to BME entrepreneurs and more than a third to the unemployed. We are aiming for 30,000 and the pace of delivery is accelerating.

I will turn to the specific questions asked. I entirely agree with the hon. Gentleman’s point about business growth in hubs, which is why the development of Tech City UK and of start-up hubs around the country—in Manchester, Cambridge, Edinburgh and almost every city—is welcome and I hope it will get cross-party support.

The hon. Gentleman said that we need to ensure that this scheme is part of a package, but I am not sure whether he was listening to the statement. The whole point is that the scheme is precisely part of a plan to start improving access and helping people right at the start of their business careers, and to then expand the enterprise investment scheme, enhance the guarantees available, establish the business bank and, most importantly, turn around the banks. I think that a little more support from the Labour party for turning around the mess it created would be more appropriate.

[Several hon. Members]

rose—

[Mr Speaker]

Order. I am conscious of the level of interest, but also of the pressure on parliamentary time. Depending on the length of questions and answers, it may or may not be possible to accommodate everybody, but we will begin with Mr John Redwood.

[Mr John Redwood (Wokingham) (Con)]

As we wish to spread the news to constituents, what is the typical interest rate for loans and the average duration of them?

[Matthew Hancock]

The interest is typically 6% and the average duration is up to five years, but those matters are of course also dependent on the proposition that is made. So far, in the year and a bit that the scheme has been going, the amount paid back has been pretty strong.

[Mr George Mudie (Leeds East) (Lab)]

The Minister berated my hon. Friend the Member for Chesterfield (Toby Perkins) for not looking at the wider picture, but he will be aware that of the outstanding loans from British banks in August, more than 30% were loans to other banks and more than 40% were loans to consumers linked to house buying, while only just over 1% were loans to small businesses. After three years of having scheme after scheme, how can he persuade this House to take Government policies in this area seriously?

[Matthew Hancock]

That is precisely why we need programmes such as this one, which I hope the hon. Gentleman supports. It is important for us all to realise just how difficult it is to recover from the scale of the banking crisis under the previous Government. Many measures are of course needed, and this very important one is helping thousands of people to start their own businesses and realise their dreams.

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

I congratulate Mr Martin and wish him well. I started two small businesses that now employ almost 300 people, having gone into a sub-branch of Lloyds bank and come out with a facility of £60,000 in 1989. That would not happen now, so my concern is about whether information is getting through properly at the coal face. Will the Minister tell us whether that is happening, and will he continue to monitor that matter to ensure that the people he rightly says are in need of loans can receive them?

[Matthew Hancock]

Absolutely. The development and acceleration of the scheme includes an acceleration in people being able to get hard cash. In many cases, the turnaround time from application to delivery of the cash is about two weeks and, given that speed kills in relation to starting a new business, that is an important part of the process.

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

A Welsh Government-sponsored report by Conservative member Professor Dylan Jones-Evans recently recommended the establishment of a publicly-backed Welsh development bank, very much based on a model proposed by my party, Plaid Cymru. Will the Minister enter into negotiations with the Welsh Government, give them a nudge and offer Treasury support for that concept to ensure that Welsh businesses get the access to finance that they deserve?

[Matthew Hancock]

I can do better than that. In collaboration with the Welsh Government, the roll-out of start-up loans in Wales commenced on 15 October, and I would encourage anybody in Wales to get involved.

[Anne Marie Morris (Newton Abbot) (Con)]

I commend the Minister for all the help he has given to small businesses since he took up his post. I am particularly pleased that he has recognised the diversity of groups wanting to start businesses. With regard to the over-50s in particular, how will he get information out—not to the banks, but to local authorities, local enterprise partnerships and other places in which people who are not used to computers will look for such help?

[Matthew Hancock]

The Business is Great website is an important part of that. I commend my hon. Friend’s work in supporting small businesses, in pushing for improvements for them and in getting out personally to demonstrate what is available. There is a broad communications campaign about the scheme—yes, online, but also offline—and I take every opportunity to tell people what is available.

[Bill Esterson (Sefton Central) (Lab)]

Will the Minister confirm that the advice that goes with the funding, which is crucial, is specific to individual businesses and the markets in which they operate? Will he also confirm that funding and advice for existing businesses is equally important, because without that second element, start-up loans will ultimately lose much of their effectiveness?

[Matthew Hancock]

Yes. Those are extremely important points. The growth accelerator programme offers support for small and growing businesses and is itself expanding rapidly. The start-up loan programme is not only about access to finance for those starting businesses, but about mentoring. The number of businesses sponsored by each mentor is small, so that mentors have the opportunity to spend time and put effort into ensuring that such ideas get the best possible chance.

[Julian Smith (Skipton and Ripon) (Con)]

Many of the people who have so far benefited from the programme are truly inspirational. The Minister may be interested to know about a perfume called Pink Addiction—I have tried it—which was created by Nabila Ismail. She was so positive about the scheme that the only thing she asked for was specialist mentoring wherever possible, a point which has been mentioned.

[Matthew Hancock]

I pay tribute to Pink Addiction. My hon. Friend has put a huge amount of effort into supporting start-ups and small businesses. I am sure that being mentored by him would be one of the best ways in which someone could grow their business.

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

The Minister told the House that there will be £151 million for the scheme this year and next year, but will he clarify whether that is new or additional funding, or is he simply announcing something that has already been announced? If it is new or additional funding, will he ensure that businesses in Scotland can benefit from the project either directly or with additional funding through a Barnett consequential to the Scottish Government?

[Matthew Hancock]

The £151 million is available over the next two years. Further details will be set out in the autumn statement. We are working with the Administration in Scotland to ensure that the scheme can be rolled out across Scotland as well.

[Andrew Griffiths (Burton) (Con)]

May I congratulate the Minister on a scheme that has helped to deliver the lowest unemployment level in my constituency since August 2008? I particularly congratulate him on the 4,500 disabled people who have been able to access a scheme that is hugely important in allowing them to reach their true potential. Will he assure me that he will continue to promote that objective?

[Matthew Hancock]

Yes. My hon. Friend makes an important point. It is vital that the scheme should allow everybody the opportunity to reach their potential through starting a business, and he put that very eloquently.

[Jessica Lee (Erewash) (Con)]

I congratulate my hon. Friend on the success so far of the start-up loans scheme, which I will continue to promote locally. Does he agree that the support of local business organisations, such as the successful Erewash Partnership in my constituency, is vital, in that they provide mentoring support and networking opportunities to help businesses to flourish?

[Matthew Hancock]

I pay tribute to the Erewash Partnership. Such local business support groups, as well as LEPs, the chambers of commerce, the Federation of Small Businesses, the Forum of Private Business, the CBI and the Institute of Directors, play a part in making sure that businesses get to know what is available and are given support. We work in partnership with many of those organisations, which have done a great deal to make such a success of the scheme.

[Mr Stewart Jackson (Peterborough) (Con)]

I believe it is a moral imperative for the Government to offer a route from welfare dependency and poverty to self-employment and prosperity, and on that basis I strongly welcome the scheme. Will the Minister undertake to look at the work done by third sector and voluntary groups, such as the Cambridgeshire Community Foundation and the Peterborough-based Cross Keys Homes, in helping tenants and those not usually involved in the business world to avail themselves of the scheme and access funding for micro-businesses and SMEs?

[Matthew Hancock]

Yes, I will do that. The fact that more than a third of the loans have gone to people who are unemployed is one of the scheme’s great strengths. Along with the new enterprise allowance, the scheme is helping us to reduce unemployment for people who do not want to go into an ordinary 9 to 5 job, and instead want to grow their own business.

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

I congratulate the Minister on his success with the start-up loan scheme. Will he reassure the House that he will continue to champion efforts to build on the scheme, particularly in my Isle of Wight constituency?

[Matthew Hancock]

Yes, I will take a special interest in ensuring that the Isle of Wight has access to the scheme. Many of the partners through which it is delivered are regional, but there are many national partners and much of it can be done online. I am sure that broadband internet is readily available on the Isle of Wight. If it is not, it soon will be. I will take a special interest in how many loans are taken up on the Isle of Wight.

[Justin Tomlinson (North Swindon) (Con)]

This is welcome news, especially as the start-up businesses have gone on to employ a further 10,000 people. To build on that, what more can be done to encourage an entrepreneurial spirit within the education system to equip the next generation of young entrepreneurs?

[Matthew Hancock]

I am grateful to my hon. Friend for adding to the statistics at my disposal. He is a doughty campaigner for enterprise in the education system. One of the main purposes of bringing together the skills and enterprise briefs is to ensure that the education system reflects and prepares people for the world of employment and enterprise. That is very close to my heart and I look forward to working with him to make it happen more.

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

The start-up loans scheme has been a fantastic success story. One reason for that success is the presence of business mentors. Will the Minister reassure the House that as the scheme grows, as new groups get involved and as the age cap is lifted, the number of business mentors will keep up in order to ensure that all the businesses have access to the support that they need?

[Matthew Hancock]

We are finding that lots of business men and women are interested in mentoring, partly because they feel that they got so much out of growing their business and want to give something back. Engaging more mentors is a vital part of the scheme, but that is not a constraint on expansion owing to the enthusiasm—to which I pay tribute—of business men and women who want to help others to get the sort of start that they had.

[Mark Pawsey (Rugby) (Con)]

As someone who started and ran a small business, I know about the challenges that are faced by people who want to run their own business, particularly in accessing finance. I was pleased to join the start-up bus when it visited Rugby. Does the Minister agree that the start-up loans scheme shows that the Government are providing real help to small emerging businesses, unlike the Labour party, which took advice on business and industry from the man who managed the decline of the Co-op bank?

[Matthew Hancock]

My hon. Friend makes an important point. It is surprising to see the Labour Benches almost entirely empty when the House should be uniting in support of the excellent start-up loans scheme. I pay tribute to my hon. Friend, who started his own business and who does much in this House to promote those who start their own businesses.

[Mr Marcus Jones (Nuneaton) (Con)]

I recently met a number of young entrepreneurs who had started successful small businesses using start-up loans. They had been refused loans by mainstream banks. Will my hon. Friend assure me that the scheme will be broadened to create tens of thousands of budding entrepreneurs of all ages across our great country?

[Matthew Hancock]

The scheme is growing and accelerating, and it has the capacity to do more. I hope that we can do more with it, not least because it is helping people who would otherwise not be able to start their own business. We started the scheme because of the difficulty that is faced in getting finance from banks at an early stage. The evidence that my hon. Friend sees in his constituency is what I see across the country. That is exactly what this successful scheme is for.

[Neil Carmichael (Stroud) (Con)]

I have great pleasure in welcoming this excellent statement because it brings good news about the real economy. Does the Minister agree that encouraging schools and colleges to have governors with business experience would enhance and embed the entrepreneurial spirit that we need in those places?

[Matthew Hancock]

I encourage links between colleges and local enterprise partnerships, which can be strengthened a great deal by their governors and board members sitting on each other’s boards. There are schools around the country that bring in businesses and entrepreneurs, not only to talk to students, for example through the brilliant Speakers for Schools programme, but to help design the curriculum and motivate children to improve their performance in academic subjects. That is a great success when it is done well and I encourage more schools to do it.

[Robert Halfon (Harlow) (Con)]

Is my hon. Friend aware that Harlow has had the highest business growth in the United Kingdom according to a BBC and Experian survey? Will he congratulate Danielle Field, a young mother who from nothing set up an apprentice hairdressing academy with her partner thanks to a James Caan loan? That has been a tremendous success. Is this scheme not an example of the Government helping the lowest-paid to get back into work?

[Matthew Hancock]

I pay tribute to Danielle Field. I also pay tribute to my hon. Friend. I did not know that Harlow was the best place in the UK to start a business according to the statistics. That shows just how brilliant Harlow is, almost all of which is down to its brilliant MP.

[Mr Philip Hollobone (Kettering) (Con)]

Northamptonshire was recently declared by the Department for Business, Innovation and Skills to be the most enterprising place in Britain. Will the Minister ensure that a ready supply of start-up loans is made available to the entrepreneurs in that county so that the entrepreneurial spirit that is abroad can be captured, developed and promoted to the full?

[Matthew Hancock]

There seems to be a competition to be the most enterprising place in Britain. That is superb, because enterprise is all about being competitive and getting ahead. I am glad that that has been brought to my attention. Of course, all Government Members know that Harlow is in Essex, not in Northamptonshire or Kent. Ensuring that Northamptonshire and all other places get the support that is needed for small business is vital.

[Several hon. Members]

rose—

[Mr Speaker]

I remind the House that there is a ten-minute rule motion to follow. I remain fully committed to moving on to the main business at or very close to 2 o’clock, so if everybody wants to get in, Members will have to help each other.

[Guy Opperman (Hexham) (Con)]

People in Northumberland welcome the Government’s support for start-up businesses. Does the Minister agree that the key to the reform of bank lending is the development of local and regional banks? Is he surprised that in April 2012 the Labour party voted against such banks?

[Matthew Hancock]

That is a surprise, given that ensuring that there is more competition in banking is a key part of the answer to that problem.

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

I strongly welcome the statement. Having started businesses myself, I know how hard it can be. A key element of the statement was mentoring. I urge my hon. Friend to build on the targeted approach to mentoring that he has outlined today.

[Matthew Hancock]

I pay tribute to my hon. Friend, who is the Prime Minister’s apprenticeship ambassador. He does a huge amount of work to promote apprenticeships, small businesses and start-ups across the country.

[Jeremy Lefroy (Stafford) (Con)]

I welcome the scheme and its extension to include sharia-compliant finance. The UK is a world centre for ethical finance on Judaeo-Christian principles, which, like sharia-compliant finance, concentrates on risk sharing. Will the Minister consider including an ethical product?

[Matthew Hancock]

I will certainly consider that proposal.

[Richard Fuller (Bedford) (Con)]

Would-be entrepreneurs will recognise the cynical, negative response of the Opposition as evidence that the Labour party does not share their passion for creating businesses. The Minister referred to the 100,000th start-up loan. We were only at 1,000 start-up loans in February and we are now at 10,000 start-up loans, so we might well get to 100,000 start-up loans. What will be the Minister’s response if this policy continues to enjoy the success that it has had so far?

[Matthew Hancock]

I was getting ahead of myself. Mr Speaker, if we get to 100,000 start-up loans, I hope that I will be able to make a statement about that too.

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

My hon. Friend was right to single out Mr Martin as a great role model for people of all ages and from all backgrounds in setting up a new business. I would like to give one of the last words this afternoon to Mr Martin. It is important for everyone in this House to listen to what he has to say about start-up loans. He says that they have given him

“the opportunity to start a new life”

and that it is “an amazing feeling”.

[Matthew Hancock]

It is terrific to hear directly from Mr Martin’s MP, who is such a champion of Falmouth and Truro, about the effect that the loan has had on him. Similar stories abound from all 10,000 of those who have received the loans.

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

Start-up loans are helping many people to set up their own small businesses. We are coming up to small business Saturday, which is on 7 December. Mr Speaker, you are welcome to come to my networking event for small businesses at the iCon centre in Daventry on that morning and I will happily buy you a coffee. Will the Minister say how important it is to celebrate small businesses on small business Saturday?

[Matthew Hancock]

I love small businesses. I come from a small business background. Government Members have demonstrated their commitment to growing small businesses and doing everything they can to support them. To show that support, I urge everyone to get out there on 7 December—small business Saturday—to buy something from small businesses and to tweet about it, so the whole world knows how much we support small and growing businesses.

Point of Order

Wednesday 20th November 2013 Commons Chamber

13:50

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

On a point of order, Mr Speaker. Have you had any indication from the Justice Secretary on whether he intends to come to the House and make a statement to clear up the confusion regarding the announcement by G4S yesterday that it has been overcharging for services it is contracted to provide to the Ministry of Justice? The confusion is twofold. First, there have been reports in the press that G4S has offered to repay roughly £23 million to the MOJ, but that that has been refused. I think hon. Members would want to know the reason for that. Secondly, on the proposed changes to the probation service, last week on Second Reading the Under-Secretary of State for Justice, the hon. Member for Kenilworth and Southam (Jeremy Wright), who has responsibility for prisons and the probation service, indicated that

“if…G4S do not come out satisfactorily from the audit processes, which this Government instituted, they will not receive any contracts.”—[Official Report, 11 November 2013; Vol. 570, c. 744.]

We need to know whether the MOJ is now excluding G4S from that process.

[Mr Speaker]

I am grateful to the right hon. Gentleman for his point of order. He speaks both as a concerned constituency Member and a former Prisons Minister. The short answer is that I have received no indication that any Minister intends to come to the House to make a statement on the matter. My recollection from the media coverage is that the issue is one of ongoing investigation, but the words uttered by the right hon. Gentleman in his usual measured terms will have been heard on the Treasury Bench. We shall have to leave it there for today.

Regulation of Refractive Eye Surgery

Wednesday 20th November 2013 Commons Chamber

Motion for leave to bring in a Bill (Standing Order No. 23)

13:55

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

I beg to move,

That leave be given to bring in a Bill to regulate refractive eye surgery, including laser eye surgery.

Nine years ago, the late Frank Cook, a former hon. Member, brought together a group of senior MPs to take evidence and examine widespread concerns about the operation of the growing laser eye surgery industry. Those concerns included high-pressure sales tactics, variable standards of service and a frequent failure to provide adequate aftercare, particularly if the treatment had had unfortunate side effects. At the time, the consumer group Which? and the then National Institute for Health and Clinical Excellence brought forward reports expressing their concerns about the development of the industry.

In 2005, Frank Cook introduced a Bill in the same form that I am promoting today. The aim was to give the industry the opportunity to address concerns voluntarily, before Government needed to act. Eight years on, I and other hon. Members have been shocked that there are still many incidences of the problems that we then identified. In some cases, they have got worse.

I pay tribute to the public and practitioners who came forward to their MPs to explain how they were treated and to expose current malpractice. I particularly want to pay tribute to Sasha Rodoy, from the My Beautiful Eyes campaign, who has supported many victims of the industry. I do not want to tarnish all practitioners in the field, because there are many good practitioners out there, but confidence will be undermined if we do not tackle the problems.

Eight years ago, we found that many of the corporates in the sector employed aggressive sales tactics to secure clients. Recent evidence from clients and former salespeople shows that the problem continues and has got worse. It often starts with a phone call, the offer of a time-limited discount or entry into a competition for free treatment. Patients visit the shop on a no-obligation basis for a consultation; then the phone calls start. We have evidence of people receiving 20 phone calls in a single day. Some salesmen are described as counsellors or refractive technicians, but have minimal training in what the surgery involves and come under intense pressure from their managers to clinch deals no matter what. Patients are often not given adequate information on the potential risks. One former Optical Express salesman described pressure from managers not to give customers all the available information for fear of scaring them off.

Material used by some companies to promote sales has been proven on several occasions by the Advertising Standards Authority to be unfounded, lacking in evidence and misleading. In 2011, the ASA upheld 17 complaints against Optical Express brochures.

Concerns continue to be expressed about the quality of patient assessment. Assessments are often undertaken by a different person from the surgeon who performs the operation or who provides aftercare—there is no consistent approach. Good practice in any surgery recommends that a patient’s consent is assured. A cooling-off period is recommended between the assessment and advice provided, and the final decision. Many companies state that a 24-hour or 72-hour cooling-off period is built into consent procedures, but we have evidence that that is not the case. Complex documents are placed in patients’ hands, and they are pressurised into providing a signature on the actual day of the surgery.

There is no legal requirement for a surgeon to be qualified or experienced in this field of surgery. There are no regulations to that effect: any doctor can undertake this surgery. The Royal College of Ophthalmologists introduced a certificate in laser surgery, but only half of practising surgeons have it. It is worrying that certification is on a downward trend: in 2009, 29 surgeons took the exam; in 2011, 13; in 2012, five; and this year, none. Worries have been expressed about the number of surgical operations an individual surgeon is contracted to undertake in one day: sometimes 17 to 20, sometimes more. There is no limit on the number of procedures a surgeon can undertake. That puts time pressures on assessments, pre-op procedures, operations and aftercare.

There are definite risks involved in this surgery. Some estimate that one in 20 patients experience post-operative problems, including dry eyes, blurred vision, starbursts and glare. In many cases, patients have found it extremely difficult to secure aftercare from companies. Many are forced to resort to the law, and it takes months—in some cases, years—to receive effective remedial action or compensation. On many occasions, they are forced to sign compromise agreements including gagging clauses so that they do not expose what has happened to them. In addition, in some instances they later find that the cost of corrective surgery is deducted from their compensation.

I could go through many case histories, but there is not time to do so. Many hon. Members have also brought cases to my attention. Ex-staff have talked about company patient satisfaction surveys being heavily influenced, or even filled in, by staff. On at least one occasion, an expression of dissatisfaction never came to light. I will quote what one person said to me:

“I was misled, misinformed and mis-sold.”

What needs to be done? Sir Bruce Keogh, the NHS medical director, examined laser surgery practice in his recent report on cosmetic surgery. He concluded that action needed to be taken to regulate the industry. His report was published in April and the Government are yet to respond.

The agenda that the Government need to address is set out in Frank Cook’s Bill, which I have updated. First, the industry needs statutory regulation, as voluntary mechanisms have failed. At minimum, all surgeons must be qualified, certificated and have regular competence assessments from here on in. There should be openness and transparency so that the success rates of individual surgeons and clinics can be published. Patients will then be able to make considered choices. The Government should consider limiting the number of operations that surgeons can undertake in one day: we restrict the hours of lorry drivers and pilots; we should also restrict the hours surgeons work, because patients are being put at risk. We should ensure that high-pressure sales techniques are made illegal in this area. There should be a legal requirement for companies and surgeons to provide full information, in a comprehensible form, on all risks to patients.

There should also be heavier sanctions for breaches of advertising standards and mis-selling by such companies, because the result of their actions is to expose people to serious health risks. There should be a seven-day breathing space, enforceable in law, between the initial decision and final consent. There should also be guaranteed aftercare and, if things go wrong, remedial action at the expense of the company, not the individual. Finally, there should be a compensation scheme. The mechanism for securing compensation for individuals who suffer loss and damage as a result of such actions should be swifter and less litigious. We have argued this case before, but perhaps it would be easier and less litigious if there was an industry-funded scheme to provide compensation to those who can demonstrate that they have been harmed by such surgery.

It is difficult to get a figure for how many such operations take place, but it looks as though between 100,000 and 120,000 people a year undertake such surgery. That is too many people. Even if the figure for those affected is one in 20, as I suggested, that means that thousands of our constituents are being put at risk by an industry that is completely unregulated. I therefore urge the Government to act now. There are many former patients, excellent practitioners and Members of this House who are willing to work with the Government on a programme to secure action based on the Keogh principles, which are about ensuring high standards of service, openness and transparency, accountability and a proper sense of care for such patients in the long term. This is a serious matter. I know that the Government are currently considering their response to Keogh. I hope that it will be imminent and that this part of the cosmetic surgery industry and the surgery industry overall will be covered in that response.

A large number of Members wished to support the Bill—I have had to select a range of Members from different parties and areas in presenting it—and I thank them for that.

Question put and agreed to.

Ordered,

That John McDonnell, Ann Clwyd, Sir John Randall, Sir Bob Russell, Hywel Williams, Mark Durkan, Jim Shannon, Naomi Long, Sandra Osborne, Michael Fabricant, Nia Griffith and Chris Williamson present the Bill.

John McDonnell accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 28 February, and to be printed (Bill 131).

Defence Reform Bill

Wednesday 20th November 2013 Commons Chamber

[Relevant Documents: Seventh Report from the Defence Committee, Session 2012-13, on Defence Acquisition, HC 9, and the Government Response, HC 73. Oral evidence taken before the Defence Committee on 4 September 2013, on Defence Acquisition, HC 652-i. Oral evidence taken before the Defence Committee on 5 December 2012 on Future Army 2020, HC 803-i, Session 2012-13, and on 10 July and 8 October 2013, HC 576-i-ii. Uncorrected oral evidence taken before the Defence Committee on 5 November 2013, on Future Army 2020, HC 576-iii. Written evidence to the Defence Committee, on Future Army 2020, reported to the House on 24 April, 9 July, 8 October and 5 November 2013, and published on the internet.]

Consideration of Bill, as amended in the Public Bill Committee

New Clause 1

Annual report by scrutiny group of reserve forces and cadets associations

‘(1) The Reserve Forces Act 1996 is amended as follows.

(2) After section 112(3) insert—

“(4) In respect of subsections (2) and (3), it shall be the duty of the Council of RFCAs to provide an external scrutiny group to report annually in July to the Secretary of State on the state of the reserves, making particular reference to—

(a) provisions for recruitment and retention;

(b) the upkeep of estates owned or controlled by RFCAs;

(c) support arrangements;

(d) training facilities; and

(e) any other factors which have a bearing on reserve effectiveness.

(5) The Secretary of State shall by Order lay the report before Parliament.

(7) The membership of the external scrutiny group shall include—

(a) the Chairman of the Council of RFCAs as chair;

(b) five other members to include—

(i) representation balancing reserve and regular service across the three armed forces; and

(ii) at least one independent civilian member with a broader understanding of defence issues;

(c) specialist members.

(8) Specialist members of the external scrutiny group may be appointed by the Council of RFCAs from time to time, but shall not be permanent members.

(9) The Defence Council shall by Order provide compensation for specialist members of the external scrutiny group for the purposes of subsistence or other reasonable expense encountered in the course of work undertaken in this capacity.”.’.—(Mr Brazier.)

Brought up, and read the First time.

14:03

[Mr Julian Brazier (Canterbury) (Con)]

I beg to move, That the clause be read a Second time.

[Mr Speaker]

With this it will be convenient to discuss the following:

New clause 2—Duties and powers of reserve forces and cadets associations—

‘(1) The Reserve Forces Act 1996 is amended as follows.

(2) After section 113(1) insert—

“(1A) In deciding which of the matters set out under subsection (2) should be transferred or assigned to the associations, the Secretary of State should take account of—

(a) the cost effectiveness of associations as compared with wider defence operations; and

(b) the ownership of the particular site.”.’.

New clause 3—Report on Future Reserves 2020—

‘(1) Within one month of the passage of this Act, the Secretary of State shall make and lay before Parliament a report on the viability and cost effectiveness of the plans set out in Reserves in the Future Force 2020: Valuable and Valued, Cmd 8655, together with his recommendation on its further implementation.

(2) Further implementation of the plans shall be halted 40 days after the laying of the report unless both Houses shall have resolved to approve the recommendation from the Secretary of State contained in the report.’.

Provides for a Government report detailing the viability and cost-effectiveness of the plans set out in the White Paper on Reserves (Cmd 8655). Both Houses must approve the report and the Secretary of State’s subsequent recommendation in order for the implementation of the reforms to reserve forces to continue.

New clause 4—Mental health provision for members of the reserve forces—

‘(1) The Secretary of State shall publish annually an analysis of mental health provision for members and former members of the reserve forces.

(2) The report shall include information and annual spend on such services.

(3) The Secretary of State shall within one year of this Act coming into force bring forward proposals clarifying provisions for the transfer of medical records belonging to former members of the reserve forces to the NHS and for the monitoring of the health needs of former members of the reserve forces.’.

New clause 6—Leave entitlement for reserve forces—

‘(1) The Employment Rights Act 1996 is amended as follows.

(2) After section 63C insert—

“63CA Right to time off for reserve forces

(1) An employee who is a member of a reserve force (as defined in section 374 of the Armed Forces Act 2006) is entitled to be permitted by his employer to take time off during the employee’s working hours in order to undertake training activities connected to the reserve force.

(2) An employee’s entitlement to time off under subsection (1) is limited to 14 days maximum.

(3) An employee is not entitled to paid remuneration by his employer for time off under subsection (1).

(4) This section does not apply to employees of companies with fewer than 50 employees.

63CB Complaints to employment tribunals

‘(1) An employee may present a complaint to an employment tribunal that his employer has unreasonably refused to permit him to take time off as required by section 63CA.

(2) An employment tribunal shall not consider a complaint under this section unless it is presented—

(a) before the end of the period of three months beginning with the day on which the time off was taken or on which it is alleged the time off should have been permitted, or

(b) within such further period as the tribunal considers reasonable in a case where it is satisfied that it was not reasonably practicable for the complaint to be presented before the end of that period of three months.

(3) Where an employment tribunal finds a complaint under this section well-founded, the tribunal shall make a declaration to that effect.”.’.

A reservist would be entitled to two weeks statutory additional unpaid leave from their employment (where the company has more than 50 employees) for the purpose of reserve forces training, for which they shall receive their military pay.

New clause 7—Publication of data on reserves—

‘(1) The Secretary of State shall publish quarterly recruitment figures and trained strength numbers of the reserve forces against adjusted quarterly targets.’.

Amendment 3, in clause 49, page 31, line 32, leave out ‘1 to 3’ and insert ‘1 and 2’.

Amendment 4, page 31, line 35, at end insert—

‘(2A) Part 3 shall not come into force unless the receommendation referred to in section Report on Future Reserves 2020 has been approved by both Houses, and may then be brought into force on such day or days as the Secretary of State may by order made by statutory instrument appoint.’.

[Mr Brazier]

It is a huge pleasure to speak to new clause 1. Let me also say how much I enjoyed serving on the Public Bill Committee, through which we were so well guided by the Under-Secretary of State for Defence, my hon. Friend the Member for Ludlow (Mr Dunne).

New clause 1 seeks to establish, on a permanent basis, a power for the council of the reserve forces and cadets associations to report annually to this House and the Secretary of State on the state of the reserves, and will restore to the reserves a powerful independent voice.

I hope you will indulge me, Mr Speaker, if I give the House a bit of history. In 1908, when that great reforming Secretary of State, Haldane, set up the Territorial Force, as it was then called, on its modern basis, it was recognised that if the force was established simply under the Regular Army, it would not prosper. Therefore, the county associations—what we now call the RFCAs—were given control of recruiting and property management for the TF, as it then was. Just six years later, at the outbreak of the first world war, there were 250,000 Territorials stood to arms. Thirty units went over to the continent in the first wave. Sir John French, our commander over on the continent, remarked:

“Without the assistance which the Territorials afforded between October 1914 and June 1915, it would have been impossible to hold the line in France and Belgium.”

Sir John French was of course referring to the beginning of the war, but even at that stage, the same split view, which I am afraid we still see today, existed in the Regular Army. Lord Kitchener, as Secretary of State, announced on the very day that he took up his post that he could

“take no account of anything but Regular soldiers”.

He derided the Territorial Force, which was already fighting over in France, as “a town clerk’s army” and said that it got its orders from “Lord Mayors’ parlours”. However, had it not been for the vigorous lobbying of Parliament by the county associations—the forerunners of the RFCAs, with which my new clause deals—his efforts simply to break up the TF and use it as a source of spare parts for the Regular Army would have been successful, and the remarkable process whereby it delivered almost half our fighting units by the end of the war and scored 71 Victoria Crosses in the process would never have happened.

The system continued for nearly a century. Indeed, in 2003-04, by far the largest deployment of reservists in post-second world war history took place. At one point, one fifth of all our forces in Iraq and, just afterwards, one eighth of all our forces in Afghanistan were from the reserves. It is no accident that two years ago the RFCA council elected as its chairman General Sir Robin Brims. The RFCAs elect people to such positions and have a structure that would be recognisable to those in all parts of the House. It is almost like a party structure, although RFCAs are not party political. General Brims commanded the remarkable capture of Basra. Getting into the centre of the city was an almost bloodless exercise and almost the only thing that went seriously right in the British engagement in Iraq. His deputy is Major General Simon Lalor, who is known to a number of people in the House and who headed the reserves very effectively during the last two years of the Labour Government.

[Mr Bob Ainsworth (Coventry North East) (Lab)]

indicated assent.

[Mr Brazier]

I am glad to see the right hon. Gentleman nodding.

More recently in Afghanistan, General John Lorimer—he is our current commander there, but at that stage he was a brigade commander—made the following comment on a Territorial Army company that was put under his command:

“Somme Company was an outstanding body of men: well trained, highly motivated and exceptionally well led.”

Sadly, however, for a number of years the Territorials have lost their voice and position. Crucially, in 2006, their control of recruiting was taken away from them and given to the Regular Army.

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

I am grateful to my hon. Friend for giving way at this early stage in the debate. I hope it might be helpful if I indicate to the House at this stage that we are minded to accept the principle of his new clause 1. Indeed—[Laughter.] The hon. Member for North Durham (Mr Jones) laughs. We have already made arrangements to receive independent reports from the RFCAs on an annual basis; my hon. Friend is suggesting placing that requirement in statute. On reflection, we consider that to be a sensible idea that will strengthen the programme for the growth and reinvigoration of our reserves. I hope that making that clear to my hon. Friend at the beginning will help to set the tone for today’s debate.

[Mr Brazier]

May I express my thanks to my right hon. Friend? I am delighted by that, and I know that the knowledge that the reserve units out there will once again have a powerful independent voice will make a difference. When I talk about some of the current problems, people will understand just how much that voice matters every bit as much as it did in 1914.

[Mr Kevan Jones (North Durham) (Lab)]

I am grateful to the hon. Gentleman for giving way and I pay tribute to the work he has done over the years on the reservists. Can he explain why, when the Opposition tabled an amendment in Committee that asked for figures to be—

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

Sour grapes.

[Mr Jones]

It is not sour grapes; it is a matter of fact. When the Opposition tabled that amendment in Committee, the hon. Member for Canterbury (Mr Brazier) and other Conservative and coalition Members voted against it.

[Mr Brazier]

I do not think the gathering of individual statistics should be a statutory matter, but the fact is that the Government have made a perfectly clear pledge that they are going to publish them. The crucial thing from the point of view of the ordinary reservist is that this body, which is elected by former reservists and respected by them as a body that effectively looked after their interests for nearly a century, is back with a really crucial position, able to make this report. When it visits the Army Recruiting Group, it will be heard with considerably more authority when it is known that it will be put on a permanent statutory basis and will be able to tell us what is really going on. I would like to say, however, that the hon. Member for North Durham (Mr Jones) has taken a close interest in this matter, which I respect.

The plain fact is that when the Regular Army took over recruiting in 2006, the numbers collapsed. The collecting of statistics collapsed, too, and the structure made no serious effort to address the challenges it was taking on. It simply raided the budget and used it for Regulars. To provide just one example, from 2006 to this day—it is now seven years on—Army recruiting offices are open only from 9 to 5.30 Monday to Friday, so they are not even available for people with civilian jobs.

A number of other things happened at the same time. There was a steady reduction in the flow of equipment to the reserves. There was a huge cut in the training budget. In 2009, we almost lost the whole training budget for the Reserves for six months, and I pay tribute to a small number of colleagues on both sides of the House who supported us in that battle. Worst of all, from 2009, all deployments of formed bodies to Afghanistan stopped—echoing the argument that had taken place at the outset of the first world war—and units were effectively told, “You are just here to act as part-time personnel agencies for the Regular Army”. That really destroyed much of the Territorial Army’s officer corps.

I strongly support what the Government are trying to do with the reserves. The House will know how much I am in favour of a rebalancing. I also commend many things that have taken place: the equipment is improving; there has been a huge increase in the funds available for training, particularly for collective training; and there have been some interesting initiatives at Sandhurst, under the charismatic leadership of the recently appointed Commandant, General Tim Evans. He started a number of improvements in officer training, one of which was the personal brain child of the Chief of the General Staff—taking people through the training in a single eight-week package, timed to coincide with the summer vacation in universities. The pairing of units is another initiative.

The Army Recruiting Group, however, has not got its act together; it is every bit as disorganised as it has always been. I hope the House will forgive me if I give just one example in detail to show just how hopeless it is. When the RFCAs lost their recruiting brief, the requirement for medicals, which had been very efficiently organised, disappeared. Suddenly last year, as part of common selection, it was announced that the Territorials were to do medicals, too. A system was set up, using the NHS as the old one had done, but in a fashion that had not even been cleared by the lawyers in relation to the Data Protection Act 1998. It was completely unworkable. People were told to take a form to their GP and get him to sign it off and send it in. So inefficient was this system that GPs did not know what to do. If units rang up to see what was going on, they were breaching the Data Protection Act. The system was so hopeless that a unit I know well—for obvious reasons, I will not say which—that had had an average of 48 successful enlistees per quarter in the months up to that change, saw a rising trend in applicants turn into just eight enlistees per quarter in the subsequent quarters.

I could go on and on. The software is unworkable; Ministers have already acknowledged that. Unfortunately, that compounds the problems at the recruiting centres. Because it is de facto impossible for somebody to do the form online on their own—if they make one mistake, their application is lost in cyberspace—it has to be done either at recruiting centres or in the units. The recruiting centres, of course, are not available.

[Heather Wheeler (South Derbyshire) (Con)]

rose—

[Mr Brazier]

Heather.

[Heather Wheeler]

I thank my hon. Friend for giving way.

[Mr Speaker]

It was good of the hon. Gentleman to remind the hon. Lady of her own name.

14:15

[Heather Wheeler]

I forget many things, Mr Speaker.

Having sat in Committee week in, week out, with my hon. Friend, it is fascinating to note that it has taken this Bill, proposing this reform to bring all the discrepancies of the past out into the open, and indeed to bring things together with a new form of Territorial Army and a new form of reservists. I give great credit to my hon. Friend for his perseverance throughout the Committee stage; he attended as much as he possibly could and provided helpful background to our understanding of the Bill. My question to him is this: does he find it as interesting as I do that it has taken this Bill to show what a mess all the previous discrepancies were?

[Mr Brazier]

I am grateful to my hon. Friend for her kind words. My essential point is that Parliament recognised, when the Territorial and Reserve Forces Act 1907 was put through, that reservist recruitment would never work if it were simply run by the Regular Army. It does not work. There is no reserve army anywhere in the world that is effectively run by its regular counterpart. We need a strong independent body. This new clause, which my right hon. Friend the Secretary of State has generously said he will accept, will put the body that used to do this job very effectively into a powerful position as inspectors.

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

For the record, it is not just a question of the mess that it all was; it is a question of the mess that it still is. My understanding is that the new clause will help to put the mess right.

[Mr Brazier]

I am not sure that I heard the last few words of the hon. Lady’s intervention; would she mind repeating it, as I could not quite hear?

[Ms Stuart]

I was suggesting that the purpose of the new clause, which I sponsored, was to put the mess right.

[Mr Brazier]

A whole string of changes affecting the recruiting group are already taking place, and I am sure that the Secretary of State will address some of them. The key point—I am really grateful for the hon. Lady’s support in signing my new clause and in raising questions in the Select Committee and so forth—is that we would not have lost 18 months if people had listened to the RFCAs, to which all this was painfully obvious 18 months ago, instead of having some regular officers arrogantly cracking on without talking to the units or the RFCAs.

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

rose—

[Nicholas Soames (Mid Sussex) (Con)]

Will my hon. Friend give way?

[Mr Brazier]

I hope my right hon. Friend the Member for Mid Sussex (Nicholas Soames) will understand if I take an intervention first from my hon. Friend the Member for Bournemouth East (Mr Ellwood).

[Mr Ellwood]

I would be happy to give way to my right hon. Friend the Member for Mid Sussex (Nicholas Soames), but that would be out of order. I declare an interest as a member of the reserves and a former member of the regulars. I am able to relate to what is being said by my hon. Friend the Member for Canterbury (Mr Brazier). Does he recall in his time that the recruitment officers were manned by “the sick, lame and lazy”, as they were called? These were the people in the regular battalions who were sent to the recruitment offices because they could not keep up with the rest of the battalion. Would he like to see the commander taking a greater interest in who is signed up as a yardstick for promotion, so that numbers are kept up to par?

[Mr Brazier]

I have some sympathy with my hon. Friend’s point, but to be honest, the long-term solution is to sort the software out so that people do not have to go into the recruitment offices at all.

[Nicholas Soames]

First of all, the country and the Territorial Army owe my hon. Friend an enormous debt for everything he has done over the years, often under difficult circumstances, to promote their interests and to try to get things right. It is the case—and has remained the case for a distressingly long time—that there has been a very unsatisfactory attitude between the Regulars and the reservists. This has got to end. It has to end in a proper way, with the new proposed structure. Does my hon. Friend agree that all the points he raises about recruiting are correct? Things got off to a bad start; it has not been a success. However, I am told that my right hon. Friend the Secretary of State went to Upavon the other day and read the riot act. I am quite clear—I know from my own experience as honorary colonel of a TA squadron—that the situation is already beginning to improve and will continue to do so.

[Mr Brazier]

Indeed. I strongly agree with my right hon. and gallant Friend, and thank him for his kind words.

[Mr Philip Hammond]

I thank my hon. Friend for giving way again. I cannot resist following up the intervention of our hon. Friend the Member for Bournemouth East (Mr Ellwood). When I went to Upavon a couple of weeks ago, I found that a number of limbless ex-Afghanistan veterans had been integrated into the call centre and were managing the online process. I noted that they were able to use their own military experience to encourage and support the young recruits whom they were mentoring online.

[Mr Brazier]

My right hon. Friend is absolutely right to make that point. Not only is it good for the veterans to be integrated into the call centre while remaining in a military environment, but, crucially, the fact that the job is being done by people with military experience makes a huge difference. That is a message which, in a different context, I have tried to get across to our police force in Kent from time to time.

I do not want to speak for too long, because a great many other Members wish to contribute to the debate, but I should like to look abroad for a moment. It is no accident that the Haldane reforms came just after similar reforms in America which established the National Guard Bureau, just three years before the power was given to the forerunners of the RFCAs by the House of Commons. I have been privileged to visit National Guard units on operations in Afghanistan, and to see them doing various kinds of work. One airborne cavalry unit was mentoring the police, and an infantry unit from Virginia—whose origins, incidentally, date back to before American independence—was deploying its platoons along the Pakistani border, protecting aid posts there. Those units were able to bring to those jobs something that regular soldiers could not have brought to them.

“Losing Small Wars” is a book by Frank Ledwidge, who served in both Iraq and Afghanistan. It refers to a catalogue of things that went wrong with the British presence in Iraq and, in the early years, in Afghanistan. One of the saddest aspects of the book is that it paints a picture of the Army not as it used to be, when it was quintessentially good at dealing with civilian populations all over the world. The fact that our Army was entirely unable to relate to the population in Iraq—in particular, it failed to recognise the murderous nature of the Iraqi police—was fundamental to our problems there. By contrast, National Guard units, which contain, for instance, police officers, business men and farmers, related very well to their local areas.

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

I must challenge my hon. Friend at this point. In fact, the experience in Iraq was often that the British Territorial Army units had considerably more expertise than the National Guard units. In al-Amarah, for example, they had water engineers serving as majors and development specialists serving as corporals. I think that we should take much more pride in what the TA was able to do in Iraq, often outperforming the National Guard units on the ground.

[Mr Brazier]

I am delighted that my hon. Friend has intervened and put me right. I was not drawing a parallel between the National Guard and the British TA. By the stage when things were starting to unravel, the TA deployment, which had been large at the beginning, was very small. It is true that the TA punched above its weight. I have heard General Abraham, who currently leads the transition process, pay tribute to a military police TA sub-unit which was briefly under his command, while also making the point that it was only briefly: the presence was all-regular most of the time. However, because at one stage just over half the American deployment consisted of reservists, and because, typically, the regulars would capture the ground—and provided the surge—but the National Guard would hold ground, it was possible to introduce a range of different skills across a much larger number of people. Given my hon. Friend’s constituency, I could refer to agriculture and the role that the farmers in the National Guard played, most of them in infantry combat units rather than specialist units.

Let me now say a little about new clause 2, which, I hasten to add, I shall not be pressing, as it could not possibly become law. It is merely an attempt to initiate a short debate about property.

[Dr Liam Fox (North Somerset) (Con)]

I am grateful to my hon. Friend for giving way. I had hoped to speak in the debate, but those of us who are serving on a Committee will not be able to do so.

Before my hon. Friend moves on to new clause 2, may I make a point about new clause 1? The principle behind the change in the proportion of reserves to regulars was exactly right: it brought us into line with many more contemporary countries. The proviso, in practice, was that the reduction in the number of regulars would not take place until we saw the necessary improvements in training, equipping and numbers in the Reserves. The problem for the House of Commons was that we had very little information to go on when it came to assessing the decision. I therefore congratulate my hon. Friend on tabling new clause 1, which will provide the transparency that will enable the House to make that assessment. I also congratulate my right hon. Friend the Secretary of State on his wisdom in accepting a new clause that will give the House a good deal more pertinent information than it would have had otherwise.

[Mr Brazier]

I am most grateful to my right hon. Friend for his tribute. I understand how strongly he and a number of other Members feel about the timing of the decision. However, although he and I—and, I am sure, the Secretary of State in his private heart of hearts—would like more money to be spent on defence, it is a question of the cash envelope within which any Government are likely to operate. If we wound up the whole Territorial Army tomorrow, it would be possible to pay for only 6,000 or 7,000 regulars rather than 20,000, and that would mean losing most of our medical capability as well as a number of other benefits.

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

I accept what my hon. Friend has said about the MOD’s cash envelope, but surely this comes down to national priorities. The plan was not to wind down the regulars to such a degree without first ensuring that the reservists could take their place, but the plan has changed. None of the new clauses and amendments is asking for extra money from the MOD. It is, as I have said, a question of national priorities: it is a question of whether more money should be committed to defence, which is the first priority of Government.

[Mr Brazier]

I will respond to my hon. Friend’s intervention, but I hope he will forgive me if I leave it for a couple of minutes. I shall deal briefly with new clause 2, and then I shall come to his new clause.

Ever since Haldane, the reserve properties of the Army, but not all those of the other two services, have been managed largely by the RFCA. The fact is that the Defence Infrastructure Organisation—or the Defence Estates, as it used to be called—has a poor track record. There are so many quotations available that I am spoilt for choice, but according to the latest report from the National Audit Office,

“Defence Estates is not well placed to weigh up and challenge Budget Holders assessments of estate requirements.”

While I am certain that my right hon. Friend the Secretary of State and his team will sort out the problems, two quite different jobs are involved. We do not want an organisation whose job is to look after super-garrisons to be worrying about repairing the roof of a cadet hut. The vast number of locations—2,500—across which reserves and cadets are spread need to be looked after by a local organisation with local feel, which can call on local expertise, often free of charge, and which, above all, has a low overhead. As I have said, new clause 2 could not become law, but I wanted to put those points on the record.

I now come to the new clause tabled by my hon. and gallant Friend the Member for Basildon and Billericay (Mr Baron), who has fought a very good-tempered campaign, and one that I respect although I disagree with him. It is no secret that I stepped down as a Cabinet Parliamentary Private Secretary 20 years ago because I was unhappy about “Options for Change”. I would dearly love to see more money spent on defence, and I know that my hon. Friend would as well, but the reality is that the money is not there. Despite all the Secretary of State’s battles, the fact remains that no Treasury team that is likely to take charge will give us more money. The effect of my hon. Friend’s new clause would be not to guarantee a larger Regular Army, but to devastate our attempts to rebuild the reserve forces by putting them all on hold.

My hon. Friend must be familiar with his own wording. Are we to push to one side the plans for better training and better equipment? Are reservists, many of whom have served on operations and have struggled through a difficult period with no kit and no training, suddenly to be told. “This has all been put on hold, because the House of Commons wants it all to be looked at again”? The people to look at it are the RFCAs, and the Secretary of State has generously said that he will arrange for that to happen.

[Mr Baron]

My hon. Friend is being very generous in giving way, and I appreciate the tone in which he is setting out his case, but may I address his central point by reminding him that the delay or postponement—the pause—need not be long at all because the report could be laid before Parliament the day after the Bill becomes an Act, and then it is up to the Government to decide how promptly we can scrutinise that report? The pause may not be long at all, and as for all the other comments about wrecking amendments and that this would turn the plans upside down, they are wide of the mark—they are Aunt Sallies—that do not do the Government’s cause any good.

14:30

[Mr Brazier]

I wish I could show my hon. Friend some of the e-mails and texts I received before the debate. I know this is not his intention, but if Parliament passes his amendment, that will strike a hammer-blow to morale in the TA. Many Members on both sides of the House are concerned about the future of the reserve forces. Many Labour Members fought very hard when we were having the battles towards the end of the last Labour Government, and I am delighted that the former Secretary of State, the right hon. Member for Coventry North East (Mr Ainsworth), is present, as he took a very close personal interest in this, and I note that the problems that arose at the end were not of his making. I urge Members on both sides of the House to think very seriously before they send that message to the reserve forces.

[Mr Ellwood]

This Bill is the starting gun for allowing TA recruitment to move from 18,000 to 30,000. Anything that is done to delay that recruitment will cause confusion in the TA, and that is exactly what we do not want at this difficult time of change.

[Mr Brazier]

I thoroughly agree with my hon. and gallant Friend.

I want to bring my remarks to an end as many other Members wish to speak. A number of noteworthy people have come through the Territorials and the other reserves—I have said nothing yet about the RAF and naval reserves. My right hon. Friend the Secretary of State’s Parliamentary Private Secretary, my hon. Friend the Member for Portsmouth North (Penny Mordaunt), was recently commissioned into the Royal Naval Reserve and the Air Force Reserves heritage goes back to two of the three highest scoring fighter squadrons in the battle of Britain. The reserves have produced a number of distinguished individuals, including the grandfather of my right hon. Friend the Member for Mid Sussex, Sir Winston Churchill, and our greatest general in the last war, Bill Slim. People fondly imagine he was a regular officer who went to Sandhurst. He was not; he was a Territorial who sneaked in through the back door of the Birmingham officer training corps because his brother was a student there and nobody realised he was not a student too. There is also David Stirling, who founded the SAS. Again, people think of him as a Scots Guards officer. Yes, he was; he was a Scots Guards reservist. He had done his officer training at Ampleforth combined cadet force and then, through mountaineering, he had developed the qualities of character and team leadership that were so vital for setting up the SAS.

There are three reasons why we need reservists. First, because we can keep far more capability if we keep some of it at much lower cost—about a fifth of the cost—at lower readiness. Secondly, because they bring the energies, extra skills and imaginations of the wider civilian community into the armed forces. Thirdly, because that keeps the link with the local communities, which just after Remembrance Sunday we should all remember.

New clause 1 will give a strong independent voice back to the reserves. I am very grateful to the Government for accepting it and I must ask the House once more not to be persuaded by my hon. Friend the Member for Basildon and Billericay on new clause 3, because that will send a devastating message to the Reserve forces.

[Mr Dai Havard (Merthyr Tydfil and Rhymney) (Lab)]

I am a signatory to new clause 1, and I want to make a simple statement about its power. It will provide an independent element to the scrutiny of the whole process that comes back to Parliament. The debates that we will now have about new clause 3 and other things must be based on the truth on the ground; they must be based on the reality and an understanding so as to inform the decision making properly. This amendment is about doing that and also about cementing consent from the public and involvement of the public in building the consensus that we require to develop the quality of reserve recruitment into the Army, RAF and Navy and to make a whole force that is properly integrated. If we do not have that consent, we will not achieve that. If the amendment helps to provide that, it will be valuable and important. I am glad some Damascene conversion has taken place and the Government have now recognised the sense in accepting the amendment.

[Mr Baron]

New clause 3 and consequential amendments tabled in my name and those of other hon. Members will, if successful, postpone the implementation of the Government’s reservist plans until their viability and cost-effectiveness have been scrutinised and accepted by Parliament. I should clarify what these amendments are not about, because a number of Aunt Sallys have been proposed by various interested parties. Contrary to some claims and implications, these are not wrecking amendments; they are not designed to scupper, reverse or tear up the Army reserve plans, and they are certainly not an attempt to recreate, or go back to, Victorian-style and size armies. These arguments are Aunt Sallys that do not do the Government’s cause any good.

I also want to make it clear that if these amendments are passed the delay to the Army reserve plans could be kept to an absolute minimum if the Government allowed prompt scrutiny of the report. There is no intention to drag this out or turn it into a campaign that goes on for months and months. The report could be produced the day after the Bill becomes an Act and we could have a debate in this place within weeks. I have to say that the stories that this is scuppering the Army reserve plans or reversing them are very wide of the mark.

[Mr Philip Hammond]

As the House may imagine, my hon. Friend and I have discussed these issues at some length. I think he will acknowledge that while a debate could be held in short order the requirement is for the Government to carry the House at the end of that debate. Will my hon. Friend acknowledge that the Government would have to get that vote through before we could progress with the reserves agenda, and setting out that hurdle today would send a negative signal to the reserves community, which has heard a message of reinvigoration and growth for the future?

[Mr Baron]

I will very directly answer both those questions. I completely agree that the report the Government would submit would be subject to the scrutiny of this House and a vote, but the fact that the Secretary of State seems concerned about that points to a bigger story about the reforms. If the Government are concerned that they might not carry the House as to the logic of their report, I suggest that that shows a weak point. I therefore suggest that the Secretary of State should, perhaps, not pursue that argument for too long, because for the Government not to accept this amendment because they are concerned they might not be able to carry the House tells a bigger story.

[Mr Peter Bone (Wellingborough) (Con)]

I am very concerned about that point because if the Government are saying they think they have real problems with this and they might not carry Parliament, the Executive are trying to implement something that Parliament does not approve of, and that is totally unacceptable.

[Mr Baron]

I agree with my hon. Friend. The restructuring of other areas of government, such as the NHS, has been subject to the scrutiny of this place, yet here we are undertaking a major restructuring—the Secretary of State cannot disagree with that—of the Army and we are not prepared to subject it to that scrutiny, apparently for fear that we might not carry the House. It is not a very good reason.

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

Surely, this is a common sense approach, and to say it will cause confusion among the reserves is borderline ridiculous, because they are quite capable of rationalising things for themselves.

[Mr Baron]

I very much agree. I sometimes think in this place, where there is no shortage of former serving soldiers, that Front Benchers can be a little too sensitive about how stoical troops are. Their job is to get on with it, particularly if they are professional soldiers. They know these debates are taking place, but they get on with the job in hand, because that is what they are paid to do.

[Mr Philip Hammond]

Would my hon. Friend not accept, though, that there is no attempt to avoid scrutiny here? By indicating that I will accept the intention of our hon. Friends’ new clause 1 and legislate to require an annual independent report—not for a limited period, but as a permanent arrangement—we are in effect creating a mechanism whereby annually the House will receive a progress report on the state of the reserves, and I would expect the House to debate that progress report. That will provide the level of scrutiny that he seeks. What we cannot accept is the destabilisation of the programme that introducing an artificial hurdle—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. Interventions need to be brief. The Secretary of State is an experienced Member of the House, and he knows that. Also, it would be good if he addressed the whole House, particularly the Chair, not just the hon. Member for Basildon and Billericay (Mr Baron).

[Mr Baron]

What the Secretary of State cannot get away from, however, is that this is not that sort of report. It would be the equivalent of a speech to the House followed by questions; it would not be subject to proper parliamentary scrutiny and a vote. We are talking about proper scrutiny of the plans. We know that things are not going well. Reservist recruitment targets are being badly missed, TA numbers are falling, there is a widening capability gap as a result and we have deviated from the original plan, as was just clearly confirmed by the former Secretary of State, my right hon. Friend the Member for North Somerset (Dr Fox); the original plan was to maintain the regulars until the reservists could take their place, but that has now been scrapped, and as we keep missing the reservist recruitment targets, the capability gap gets ever wider. These are legitimate questions that we in Parliament should be asking, and we need proper scrutiny of the answers the Government are giving. At the end of the day, that is all we are asking for.

As I have said, the report on its own is not enough, because we need proper scrutiny and a vote in the House, and if it does not bear scrutiny, perhaps that tells a wider story. A number of us, on both sides of the House, have tabled these amendments because we have deep-seated concerns that we believe have not been adequately addressed by the Government. I take no pleasure from saying this, but that includes the response to a well-attended general debate in the Chamber only a few weeks ago, when the Government could not muster one single vote in support of their position. One reason was that we put forward a series of questions, but very few, if any, answers came back.

[Martin Horwood (Cheltenham) (LD)]

The hon. Gentleman’s points about scrutiny might be well-intentioned, but new clause 3 talks about further implementation of the plans being halted. What would be the implication for the process already under way of giving reservists access to the armed forces pension scheme? What signal would it send to our reservists if we practically halted the implementation of a widely supported measure to give them better pension provision?

14:45

[Mr Baron]

My hon. Friend will just have to accept that we are suggesting a brief pause. Why should Parliament not be able to ask for a brief pause in a process that is clearly not going to plan, with recruitment targets being missed, an ever-widening capability gap and rising costs? If we all accept that defence is the first duty of Government, which I know we do, it is incumbent on Parliament to ask these questions.

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

My hon. Friend is making some perfectly sensible points, many of which I agree with, and I entirely agree with my hon. Friend the Member for Canterbury (Mr Brazier) that his campaign has been conducted in an extremely measured way. My difficulty with his new clause is that I think it addresses a point he is not that interested in. I think he wants to reduce or stop the running down of the regulars, yet, so far as I can see, his new clause would stop the beneficial changes to the reserves that all of us—including him, I suspect—want to see.

[Mr Ellwood]

It is too late; the redundancy notices have already gone out.

[Mr Baron]

If I could just answer the question. I thank my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot) for his kind words, but let us be clear: there have been three major tranches of redundancies in the regulars already. I think a fourth one is due shortly, although I do not know the Secretary of State’s exact intention on that. The plan to replace 20,000 regulars with 30,000 reservists essentially hinges on our ability to recruit those reservists, but the plan is clearly in trouble, and if we do not stop now, if only briefly, to re-examine the logic and ensure it stands up and properly scrutinise the viability and cost-effectiveness of the plan and the widening capability gap, we risk heading towards false economies and unacceptable capability gaps, which people will not thank us for. It is not unwise, therefore, to say, “Pause briefly and let Parliament properly scrutinise these plans.”

[Mr Brazier]

I have just received another text from a Royal Air Force reservist that reads, “A pause will cause widespread concern”. The problems with recruitment are not about footfall, as I set out in my speech. What message does my hon. Friend have for the officers in a reserve unit who have seen the regular recruitment apparatus block up and wreck their ability to enlist people and who are now being told to stop once more, just as things are starting to move again?

[Mr Baron]

To save my hon. Friend mentioning texts and e-mails a third time, I can assure him that I have no shortage of texts and e-mails from reservists and members of the TA saying, “Yes, you’re absolutely right. These plans are not working and it would be right to pause and examine them again.” I will happily swap those with him after the debate.

On the effect of my new clause on the morale of the TA, let us consider the present situation. The latest figures, which came out last Thursday, show TA numbers falling, not rising, despite all the expensive recruitment programmes. Then we have the figures—and they are not full figures either; some of them were actually missing—for reserve recruitment going forward. I can tell my hon. Friend that it has got to such a state that the Army Reserve and TA courses scheduled for next January and February have had to be cancelled owing to a lack of recruits. The Secretary of State may be willing to check that, because I heard it very recently in one—in fact, more than one—of the texts and e-mails that my hon. Friend keeps mentioning. That shows the current state of recruitment. I therefore suggest to my hon. Friend that there are fundamental problems with this plan and it is only right that Parliament should scrutinise it more carefully.

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

I am a practical individual. In my lifetime, I have lost hundreds of full-time jobs within the armed forces in my constituency, with the latest losses due to air traffic control at Prestwick moving down to Swanwick. That means that there is not a single full-time job within our armed forces in my constituency, whereas before there were hundreds, yet there is still a recruitment centre. What chance is there of recruiting full-time members of the armed forces in my constituency when we have closed down the whole position as regards full-time jobs?

[Mr Baron]

I hear what the hon. Gentleman says, but I am focusing my remarks on the reservists—that is what the Bill is about—rather than full-time regulars. I suggest that we could very easily reverse the cuts to the regulars because, as things stand, more people are willing to become regular soldiers than reservists.

[Mr Brazier]

My hon. Friend is of course right that anecdotally one can prove anything. Nevertheless, I will tell him a story from half an hour ago. The last reservist I dealt with before coming to the debate—he is one of the cleverest members of the TA and the kind of person who should be its future—has a brother trying to join the TA who, for 13 months, has had his paperwork lost in the hopeless regulars system. While the TA is trying to struggle with that, it is grossly unfair to tell it that we are putting all this on hold too.

[Mr Baron]

I completely disagree; it is not grossly unfair at all. In fact, my hon. Friend highlights the fact that we have fundamental problems with the way the system works. If people are having to wait 13 months for computer systems to talk to each other, then that, if anything, reinforces the case that we should be saying, “Let us pause for a moment and properly scrutinise these plans.” That is all we are asking for.

[Mr Philip Hammond]

I have acknowledged in this House recently and shall do so again later that we have challenges in the recruitment pipeline and problems with the IT systems. We cannot wait until next May to deal with them—we are dealing with them now on a daily, weekly basis. The senior management at the Department and the senior leadership of the Army are all over these problems; they cannot wait until next year for my hon. Friend’s pause.

[Mr Baron]

My right hon. Friend is ascribing a victory to me before it has taken place. The bottom line is that the new clause, like the Bill, would not take effect until the Act receives Royal Assent in the spring of next year. If he is as confident as he says that this is all going to work out, then he has until the spring of next year, before the Bill becomes an Act, to work on these problems. So I do not buy that one either, I am afraid—it is a not a particularly strong card to play when the new clause, like the Bill, would not take effect until the Act receives Royal Assent.

[Rory Stewart]

My hon. Friend talks a great deal about pausing, scrutinising and thinking, but would it not be more accurate to say that he has already reached his conclusion and that he wishes to increase the size of the Regular Army? If so, will he confirm that and explain how he intends to pay for it?

[Mr Baron]

I disagree with my hon. Friend. The intention behind the new clause is very straightforward; it does what it says on the can. These plans are not working and a series of things are going wrong, and it merely says, “Let’s pause for a moment to make sure that the plans stand up to scrutiny in terms of viability and cost-effectiveness so that rising costs do not lead to false economies and we are not opening up ever-widening capability gaps.” I am afraid that my hon. Friend is not quite fair in ascribing such a motive to me.

One of the first questions I would like the Secretary of State to answer is why the plan has changed. As we heard from the former Secretary of State in his own words—it came from his mouth, not mine—the original plan was that the regulars would be held at their current level until the reservists were able to take their place. That plan has changed. To return to a point that several Members have already made, by the end of last year a good number of the regulars had already gone—the final tranche may be next year; we are not sure—and by the end of next year most of the regular units and battalions will have been disbanded. Meanwhile, the reservists are not due to reach adequate strength to take their place until 2018, if present plans are met, but there is every indication that, because we are struggling, we will not even achieve that. That was not the original plan, as the former Secretary of State said. It would be good if, for once, we could get an adequate answer to this question, because we have asked it many times in this House and have not got one.

Let me talk about the recruitment problems. Last Thursday, figures confirmed yet again that TA numbers are in decline—not rising, but in decline. We also know that the Army Reserve recruitment targets are being badly missed, as confirmed in a spate of reports, some derived from leaked MOD documents. Figures due last Thursday regarding Army Reserve recruitment were not released in full. It is clear that the required recruits are not coming forward and that computer problems have added to the problems, as confirmed by my hon. Friend the Member for Canterbury (Mr Brazier). As everybody can imagine, there has been no shortage of texts and e-mails about this debate, and I have learned in such messages from the north-east that raw recruits to the Reserve have been told that it could take up to 15 months for them to get into uniform once they sign up. These are the sorts of delays we are talking about and which Parliament has every right properly to scrutinise. As even the Secretary of State may not be aware, the Army Reserve courses for January and February have had to be cancelled in their entirety because of lack of recruits. The fact that the Government are offering significant payments to businesses underlines the reluctance of many businesses, particularly smaller businesses, to let valued and key employees go on more frequent and extended deployments. All that is part of the cycle which in itself is adding to costs.

Our concerns are not just about reserve targets not being met; we also have deep-seated concerns about the resulting capability and manpower gaps, which are getting worse as we miss the reserve recruitment targets. Let us take as an example the mobilisation rate. At present, the MOD confirms that the TA mobilisation rate is 40%. In other words, for every 100 reservists there are on paper, the MOD deems that 40 are deployable. That can be to do with fitness, kit, sickness or all sorts of reasons. In order to make the Army Reserve plans work, the mobilisation rate has to double from 40% to 80%. I see nothing in the plans about how that massive increase in the mobilisation rate can be justified or whether it has been costed. It is a massive ask to go from 40% to 80% mobilisation. These questions need to be answered.

There are also concerns about the plan risking capability gaps. The nature of conflict is changing. Many countries that are not necessarily friendly to the west are increasing their military spending, and war is becoming more asymmetrical. Gone are the days of binary conflicts involving good guys versus bad guys—terrorism has ensured that things are much more complex nowadays—and we need professional, mobile, high-readiness, agile forces that are ready to respond to the threats that we face.

15:05

The encroachment of the Human Rights Act 1998 also puts pressure on the plans, because we will now have to ensure that the same standard of training and equipment is available to reservists on deployment as is available to regulars. It is not clear whether the extra cost of that has been accommodated, given recent developments—this is a relatively recent ruling. It is no wonder that ex-military chiefs are worried, with many suggesting that strategic thought has been abandoned. These are questions to which we need answers.

Our concern must also focus on the real possibility that rising costs and flawed assumptions could easily lead to false economies. I suggest that the Government have yet to produce a fully costed plan, and that is what lies at the heart of new clause 3. It is clear that costs are rising: the extra resources being poured into boosting Reservist recruitment are an example. In addition to that, and to the extra payments to small and medium-sized enterprises, other rising costs include the £5,000 bonus, the reservist award, pensions and mental health costs. To the best of my knowledge, none of this has been properly costed. The charity Combat Stress has said that reservists are twice as likely as regulars to suffer from some kind of mental disorder, but I am not sure that that kind of extra cost has been fully accounted for in the plans.

We should also question the underlying assumptions in the Army Reserve’s plans. I think the Secretary of State is willing to admit that it costs more to deploy reservists than to deploy regulars. I do not think that there is any disagreement on that. It is therefore crucial, in costing the plans, to identify the central case regarding projected usage rates. The lower the rates, the lower the cost will appear, because, as I have said, it costs more to deploy reservists than regulars.

Let us look at the figures in the impact assessment. The case for deploying reservists centres on the figure of 3,000 annual deployments. That sounds somewhat low, given that the original purpose of the plan was to replace 20,000 regulars with 30,000 reservists, and that we would be using those reservists more frequently. Here, however, we have a projected usage rate of 3,000 annual deployments. Of course it will bring the projected cost down if we artificially bring usage rates down.

[Mr Ellwood]

My hon. Friend is making an interesting argument. At its core is whether those on the Front Bench made a promise to increase the size of the TA before the regulars were downsized. Did he ever hear the Secretary of State say that he would guarantee that that number of reservists would be recruited before the regulars were downsized by the proposed number?

[Mr Baron]

I am pleased that my hon. Friend has asked that question. It completely misses the point, and illustrates the weakness of the Front-Bench position. I am not saying for one moment that the present Secretary of State has said anything other than what he has said. My point is that the plan under the previous Secretary of State was very different only two years ago. I do not want to labour this point, but we heard from my right hon. Friend the Member for North Somerset no more than half an hour ago that the original plan was not to wind down the regulars until the reservists were able to take their place. We heard that from his own lips. I do not want to enter into a war of words between the present and former Secretary of State, but we know that the plan has changed over the past couple of years, and that is another reason for scrutinising it.

[Jack Lopresti (Filton and Bradley Stoke) (Con)]

Going back to the cost of deploying reservists, the Government have said that they want to increase the percentage who are deployable at any given time from 40% to 80%. “Deployable” does not necessarily mean that they would be ready to be deployed in theatre, however. In many cases, it will mean that they are ready to begin training. I had five months of additional training before I was deployed in theatre. That kind of training involves additional costs, as does the reservist award, so this is not quite as clear-cut as the Secretary of State suggests.

[Mr Baron]

I completely agree with my hon. Friend. To double the mobilisation is a big enough challenge. The plan represents a fundamental change in another respect, which provides a further reason to scrutinise it in some detail. I am proud to have served alongside TA soldiers, but the bottom line is that they were in large part in-filling. We helped each other along.

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

Will my hon. Friend give way?

[Mr Baron]

I will not, if my hon. Friend does not mind; I am responding to another intervention.

Those TA soldiers were in-filling, but let us not forget that part of the present plan is to deploy reservists as units. That is very different from what has happened before; it represents yet another whole-scale change to the plan. It is therefore only right that we should scrutinise it in detail.

[Martin Horwood]

rose—

[Mr Brazier]

rose—

[Mr Baron]

I will not give way. I have given way three times to my hon. Friend the Member for Canterbury, and I must conclude my remarks, as I know other Members want to speak.

[Martin Horwood]

rose—

[Mr Baron]

No, I have already given way to my hon. Friend as well. Actually, I am doing a disservice to my hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile). He has not yet asked me a question, and I give way to him.

[Oliver Colvile]

I thank my hon. Friend for giving way. I apologise for being late; I have been upstairs in the Northern Ireland Select Committee. What impact would my hon. Friend’s amendment have on the Royal Navy and the Royal Marines, both of which play a significant role in my constituency? They have already been the subject of significant cuts, and the Army appears to be being protected as a special case.

[Mr Baron]

My hon. Friend missed the earlier part of the debate, and he has not heard the exchange of questions and answers. We are asking for a brief pause—it could be very brief indeed—while the plans are scrutinised. That is within the Government’s gift.

[Martin Horwood]

rose—

[Mr Baron]

I have made it clear that I shall be taking no more interventions. I think that hon. Members would agree that I have been quite generous in that regard, and I shall now move on because I know that others want to speak. We also need to address another important group of amendments.

The Government’s Army Reserve plans raise many questions on recruitment problems, assumed mobilisation rates and rising costs which could lead to false economies, but one of my greatest concerns is the ever-widening capability gaps that could result from the proposals. If passed, new clause 3 would confirm that the time had come for Parliament properly to scrutinise the Government’s plans. There comes a stage in any struggling project when the evidence and common sense suggest, and perhaps demand, a rethink. We have reached that stage with these plans.

If the Government are confident about their plans—that is what Ministers claim, and I have no problem with that—they should not be afraid of the new clause. Let them present their plans to Parliament, and if their case is as strong as they think it is, Parliament will allow the plans to be passed and the reforms will carry on as intended. However, I urge all Members to support new clause 3 and consequential amendments 3 and 4. I shall seek to press new clause 3 to a vote.

[Mr Ainsworth]

I offer profound congratulations to the hon. Member for Canterbury (Mr Brazier), not just for the concession he has achieved today but for the formidable way he has pursued this issue over the years. He harassed me when I was in office—I perhaps remember that with a fondness I never felt at the time—and has continued to harass his own Government and the defence establishment on the issue of the reserves and the role they can play in the country’s defence. No matter who wants to claim credit for some of the changes now being brought about, he can feel real satisfaction at something very few Back Benchers can say they have been able to do: profoundly to change a significant area of Government policy. He has most certainly done that through his work on the reserves over the years.

I totally support the hon. Gentleman’s new clause 1 and am enormously pleased that the Secretary of State has accepted it. I also support new clause 3, and I have to say that I believe the Secretary of State is being a little heavy-handed in suggesting that to support it is somehow to sabotage the direction of the Army or to play politics with the defence of the realm. I say that as a former Secretary of State who had to put up with allegations by the then loyal Opposition that I had deliberately delayed life-saving vehicles getting to our troops in Afghanistan. It is enormously important—particularly in the field of defence, where there is such a degree of cross-party support—that the Government’s own defence of their policies is somewhat measured, but I am not at all sure it has been in this regard. We can all read: we can see what new clause 3 says and does not say. As I say, my respect for the hon. Member for Canterbury is about as high as an Opposition Member’s can be for a Government Member, and I have not heard from him, or from anybody else here today, anything to suggest that the new clause does all the terrible things it is said to bring about.

New clause 3 calls for a report within a particular time frame after the Bill has been enacted, and a pause if Parliament does not accept it. It does no more than that. The hon. Member for Basildon and Billericay (Mr Baron) may have an agenda that is not mine—I do not know—because I support the general direction of policy in this area wholeheartedly. This development could bring about huge improvements in capability. I see nothing to justify the counter-argument that is being made.

[Mr Brazier]

I am most grateful to the right hon. Gentleman for his generous treatment of me, as leader of the all-party group for the reserve forces and cadets, which made the campaigning possible. The effect of this would be to send a message to those regular officers, many of them serving, who have rubbished this proposal for the past year and a half to the press off the record—they are a minority within the Regular Army but a significant one, some of whom the right hon. Gentleman will know—that if this can be kept down for just a little bit longer, they may get some regular manpower back instead.

[Mr Ainsworth]

The effect can and should be that this House is enormously interested in the development of the Reserves and wants to see their capability properly developed and scrutinised—and no more than that. That should be the message, and I do not think there is anybody in the House who is responsible for another message that I know of, other than the defence being offered by Government Front Benchers in the overreaction, as I see it, to new clause 3.

15:15

[Martin Horwood]

I am very grateful to the former Minister for giving way—[Hon. Members: “Secretary of State.”] Former Secretary of State; I beg the right hon. Gentleman’s pardon. He obviously has great knowledge of these issues, but on one he is quite wrong. He says that new clause 3 calls only for a report, but it does not. It is quite explicit: it calls for “Further implementation of the plans” to be “halted”. Why does the Labour party appear to be supporting the interruption of access to better pension provision and explicitly interrupting access to paid leave for training? Surely, that is not what he intends.

[Mr Ainsworth]

The new clause calls for a pause in certain circumstances, if the House has not been persuaded. To me, it gives time scales that are perfectly achievable, so I reject what the hon. Gentleman says.

[Mrs Madeleine Moon (Bridgend) (Lab)]

Let us be clear: we are not talking about any conflict or preference for reserves or regulars; we are talking about numbers, competency and capability for the defence of the realm. What we need to be assured of—but which this House, largely, is not confident we have—is that the Government’s plans will provide us with the necessary numbers, competency and capability. That is what the pause is about. It is not a throwing away of the plan: it is a pause.

[Mr Ainsworth]

The growth of the reserve element in all the services has huge potential benefits, such as a connection with the population at large that the small regular armed forces that we inevitably have today and will have tomorrow can never achieve on its own. Equally, as other Members have said, it brings skills into the armed forces that cannot be kept up to date within the regulars themselves. So there are those potential improvements.

Government Members have talked about a potential gap of three years, but it is not just a question of that: I am worried about the potential ongoing downgrading of capability if we do not get this right. In order to get into the reserves the calibre of people that will be absolutely necessary for the kind of operations we have unfortunately had to carry out in recent years, and will undoubtedly have to carry out in future, the skills required by every rank must not only remain at their current level, but must improve. That is for the obvious and simple reason, which everybody knows, that the huge reputational damage to such operations, to our armed forces and to our nation, of errors in such operations can be profound. We must therefore ensure, given the cuts that are inevitably taking place, that we maintain within the regulars the quality of not only the original recruits but of the training given to them, in order to lift capability. We are blessed with armed forces with a capability level that, in some ways, is higher than that in any other nation on earth, in my opinion, but it will need to be higher still.

[Mr Ellwood]

I have a lot of respect for the right hon. Gentleman and the experience he gained as Secretary of State, but I genuinely worry that he is fighting the last war. The conduct of warfare has changed. I hope he would agree that we will not be doing “boots on the ground” in the manner in which we have done so badly in Afghanistan and Iraq. The size of armed forces concertinas—it has done so over the past 400 years. I hope he would agree that withdrawal from Afghanistan will have a huge impact on the size of the standing Army, both Regular and Territorial, and batting for the old numbers that we had five years ago is out of touch.

[Mr Ainsworth]

I totally accept that. I like to study history and I know that after conflicts, the services—generally the Army more than the other services, but those, too—have generally been decimated in times of peace, only to have to be regenerated in times of danger thereafter. So I am not trying to fight the last war. I am saying that as we struggle with these enormous economic challenges and the cuts that are almost inevitable, we have to do everything we can to maintain the quality of our personnel. That applies to the regular forces as it applies to the reserves. Even at a time of downsizing, we can surely do that—we have to try to do it because of the reputational damage that inevitably flows from our failure to do so. There is nothing “yesterday” or “last war” about that approach; this is about the kind of operations we could be involved in tomorrow, of whatever scale, and the need for quality personnel.

New clause 3 calls for a level of scrutiny that is wholly justified by the importance of the decisions, and the changes of direction and structure, that we are implementing and that the hon. Member for Canterbury has fought for so valiantly and successfully for so long. That is why I support it, even if he does not.

[Mr Arbuthnot]

As I have said before, my hon. Friend the Member for Basildon and Billericay (Mr Baron) has made some sensible points that need to be taken seriously. I recall my right hon. Friend the Member for North Somerset (Dr Fox) telling the House that the regulars would not be reduced until the reserves had been built up to take their place. He said:

“of course, the rate at which we are able to build up the reserves will determine the rate at which we are able to change the ratio with the regulars.”—[Official Report, 10 October 2011; Vol. 533, c. 9.]

That was a good thing for him to say.

[Mr Ellwood]

Was that before or after a decision was taken to downsize fundamentally our contribution to the international security assistance force in Afghanistan?

[Mr Arbuthnot]

From memory, I believe it came after that decision, but I cannot be certain. It was a good thing for the then Secretary of State to say. Quite apart from that, it is a good thing for Governments to keep their promises. However, I thought I should briefly tell the House why I shall be voting with the Government tonight. First, as my hon. Friend the Member for Canterbury (Mr Brazier) said, although new clause 3 highlights the problem, it does not provide the answer. I think that what my hon. Friend the Member for Basildon and Billericay really wants to achieve is not the halting of changes to the reserves, but the halting of changes to the regulars, which his proposal does not mention.

[Mr Baron]

My proposal does not mention the regulars because the Bill is about the reservists. A couple of hon. Members have suggested motives for these proposals which I cannot agree with. The bottom line is that most of those regulars—this is my understanding and I am willing to stand corrected—have been disbanded in any case. Let me be clear about what my proposal says, because motives that I do not take kindly to are being attributed to it. The proposal is about saying that these plans are not working and we should take time, if only a brief amount of it, to scrutinise them properly to check for their viability and cost-effectiveness. That is the right thing to do—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. The hon. Gentleman has now made his point several times in one intervention, so I call James Arbuthnot.

[Mr Arbuthnot]

As I am coming on to discuss the reserves and why I think they are so important, I should perhaps declare an interest, in that my daughter is a second lieutenant in the Territorial Army. I think it is essential that we should change the reserves, boosting them, their numbers, their training and the equipment available to them. As a Defence Minister in the previous Conservative Government, I thought that that Government went too far in reducing the reserves, and I think that the previous Labour Government made the situation worse. It is high time that we begin again to build up and properly resource the reserves. I wish to pay particular tribute to two people, the first of whom is my right hon. and gallant Friend the Member for Mid Sussex (Nicholas Soames). When he was Minister of State for the Armed Forces, he valiantly championed the Territorials and found himself fighting rather a losing battle.

Even more, I wish to congratulate my hon. Friend the Member for Canterbury, who, as a Back Bencher—the right hon. Member for Coventry North East (Mr Ainsworth) made the point—has achieved more in supporting and championing the reserves than I or my right hon. Friend the Member for Mid Sussex did, when we were Ministers. My hon. Friend’s contribution to the reserves debate deserves an immediate dukedom. [Interruption.] Yes, a dukedom.

The reserves bring incredible value to this country. They bring vital specialist skills which are made contemporary by their civilian lives and they bring those skills to a changing world where they are essential. Crucially, as my hon. Friend the Member for Canterbury said, the reserves also tie the civilian world into the military world in a way that is becoming increasingly needed day by day. May I aim a shaft at my right hon. Friend the Secretary of State by saying that his clampdown on informal discussion between the military and politicians rather flies in the face of that need?

My second reason for supporting the Government is that wars are changing. We are increasingly less likely to see tank battles in Germany and increasingly more likely to be facing the emerging threats of cyber-attack, piracy and the covert destruction of our critical national infrastructure—the sort of things to which extra battalions of any particular regiment would not be the answer.

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

My right hon. Friend is making an important point about cyber-security capability. Is not one of the strong arguments for reserve forces that a lot of skills reside in the private sector, in things such as cyber-security and dealing with cyber-attack, which need to be brought into the armed forces? That is a strong argument for continuing to develop reserve forces.

[Mr Arbuthnot]

My hon. Friend is right about that. The new cyber-command that has recently been brought on stream will achieve precisely what he describes. It will not be possible to achieve that expertise within a purely military environment; we have to rely on those who have civilian expertise, too. Because of all this, we will need new investment, in satellites and in software—in the sort of things that will not be visible to the man in the street—all at the same time as we are trying to sell to the public increased spending on defence. That will be difficult to achieve while we are reducing in Afghanistan.

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

Does my right hon. Friend also agree that reservists who come from a commercial background will bring different working practices. That will be incredibly important as we begin to get ourselves ready for this expansion.

15:29

[Mr Arbuthnot]

Indeed. My hon. Friend’s constituency experience is very important in this.

The money for the investment to deal with emerging threats and emerging skills has to come from somewhere. I make no secret of the fact that I would like to see increased spending on defence. However, it is wholly unrealistic to expect that when every extra pound going on defence has to be added to an already increasing national debt. The Government are bringing down not the national debt but the rate at which it is going up. We cannot expect to have increased spending on defence, so money has to come from within the defence budget. That means reducing both waste and people. I hate saying that, but it is real life. I do not want any pause in the boosting of reserves. I want the building up of both them and their proper resources.

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

Will my right hon. Friend give way?

[Mr Arbuthnot]

I am sorry that my hon. Friend does not recognise a peroration when he hears it. I am just bringing my remarks to an end, but I will give way.

[Mr Binley]

My right hon. Friend is very kind. I have heard a lot about the Army and reservists, but little about small and medium-sized enterprises. We need to look at that particular aspect. I know little about defence, but a lot about SMEs, and I know about the damage that can be caused if we take one man out of a five-man team in an SME. I do not believe that the Minister has thought enough about that particular impact. One reason for a pause is so that the Secretary of State, through you, Madam Speaker, can relook at his whole connection with small and medium-sized businesses. He should look at the incentives that are given, because they are simply nowhere near enough.

[Mr Arbuthnot]

I must apologise to my hon. Friend for having entirely failed to cover in my few remarks about why I am supporting the Government the issue of SMEs, which are of less relevance to this reservist issue than larger companies. None the less, my hon. Friend makes a perfectly sensible point, and I hope that he will be able to make it again later during the course of the debate.

[Mr Baron]

May I briefly suggest that we would not have to make cuts to the defence budget if the Government were to put a higher priority on defence, as they do with other budgets and Government Departments?

[Mr Arbuthnot]

I said that there were a number of things that my hon. Friend had said and would be saying with which I entirely agree, and that is one of them. That was a peroration, so I had better sit down.

[Vernon Coaker (Gedling) (Lab)]

I hesitate to follow the peroration of the right hon. Gentleman, the Chair of the Defence Committee, but as always, we were informed by his remarks. I know that whatever his view on the amendments before us, his suggestion of a national debate and conversation about how to change the culture with respect to the reserves and to drive it forward in a national effort is one well made, and I think the whole House agrees with him.

I also thank my right hon. Friend the Member for Coventry North East (Mr Ainsworth), the former Secretary of State for Defence, for his contribution. He had all of us listening. Bringing his knowledge to the debate was worth while. He managed to lay to rest some of the Aunt Sallies that are being held up with respect to new clause 3.

I have heard people talk about the involvement of the hon. Member for Canterbury (Mr Brazier) with the reserves. He has achieved something that very few of us have managed to do, even with our own Governments—he has brought forward and had accepted an amendment to a Government Bill, and I congratulate him on that. He will disagree with my remarks on new clause 3, but we all recognise that new clause 1 will be an improvement. [Interruption.] He has heard what my hon. Friends on the Front Bench have said about his previous voting record, but his conversion on this matter is welcome. The fact that the Government have accepted his new clause is a good thing and will improve the Bill.

Let me explain to the House why we will support new clause 3 and the amendments tabled by the hon. Member for Basildon and Billericay (Mr Baron), why we have tabled some similar amendments, such as new clause 4, and why we have supported similar motions before. As the Secretary of State will realise from the tone of the debate, this House, including Her Majesty’s Opposition, will always put Britain’s security and national interest first. One of the first things I said when I was appointed shadow Defence Secretary was that when I thought the Government were doing the right thing on defence, I would work with them in a constructive and reasonable manner, and that is what the shadow Front-Bench team and I have done throughout the passage of this Bill. To be fair, the tone of the debate, notwithstanding the disagreements that exist between Members on both sides of the House, is one of reasonableness and constructiveness. We have been debating the best way forward with respect to these reforms and the proper defence of our country.

I am sorry to have to say to the Secretary of State that he should not try to turn the debate into a party political row. It is disappointing and unnecessary. Contrary to what he said, we have raised this issue in parliamentary questions, in Committee and, as recently as last month, on the Floor of the House, when we passed a vote to approve a motion almost identical to the new clause. Importantly, the Secretary of State knows that we are not calling for the reforms to be reversed. He knows that we are not saying the reforms should be shelved. Like Members on both sides of the House, we want to see an enlarged reserve force with an enhanced and more heavily integrated role alongside regular forces.

Let me once again praise and pledge my support, and that of the House, for our armed forces and the work they do. What we need is evidence that the reforms are progressing as planned and promised, and we are trying to get the Defence Secretary to take more responsibility for that. There is clearly an issue about viability. All signs coming from the MOD suggest that the plan has, to some extent, fallen off course. Members of the armed forces and of this House have justifiably and sincerely held concerns, and the Secretary of State has exacerbated those by his response to some of the concerns.

[Mr Philip Hammond]

I recognise some of the hon. Gentleman’s concerns, but does he not see that this is a long-term project? By accepting the substance of new clause 1, what we have put in place is a mechanism by which an annual independent report will be laid before Parliament and, we fully expect, give rise to a debate. That will allow the progress of this programme to be tracked over many years. New clause 3 would create a one-off hurdle, that sends a negative signal now. That is not an equivalent provision.

[Vernon Coaker]

I do not accept that. New clause 3, which the right hon. Gentleman will have read, seeks to examine the viability and cost-effectiveness of the reforms that are being put before of the House. We want the House then to assess them. He should have a bit of confidence in them, because if they are working, Parliament will be keen to accept them.

[Angus Robertson (Moray) (SNP)]

I welcome the hon. Gentleman to his new role, as this is the first opportunity I have had to do so. May I reinforce the point that he has just made? Surely if the Secretary of State were confident that his plans were on track and that they were going to work in the time scale he has proposed, he should have accepted not only new clause 1—and it is a good thing that he has—but new clause 3 too. Everybody on both sides of the House would then be in total agreement.

[Vernon Coaker]

I agree with the hon. Gentleman. The Secretary of State should have the confidence to put his reforms before Parliament. Is it not reasonable, when the Secretary of State and the Minister say at the Dispatch Box that they will publish recruitment figures for the reserves, that they should do so?

On 16 July, the Secretary of State told the House:

“I will be transparent about recruitment and trained-strength targets.”—[Official Report, 16 July 2013; Vol. 566, c. 958.]

Last month, the Under-Secretary of State for Defence, the hon. Member for Ludlow (Mr Dunne), told the Committee:

“We intend to publish the figure for the quarter to 1 October next month.”––[Official Report, Defence Reform Public Bill Committee, 22 October 2013; c. 434.]

That was due last week. As we have since found out, that has not happened and will not happen until next year. Why? The UK Statistics Authority states that the Government’s figures are not robust enough so there must be some delay in their production.

We do know that the overall trained strength of the armed forces reserve has fallen by 160 since last year and that time is slipping away, with the Secretary of State’s own 2018 target less than five years away. The last figures that were published showed that the Government were failing even to reach a quarter of the number of reservists they said they needed to recruit to meet their own targets.

[Mr Philip Hammond]

Let me clarify. The statistics that were published last week were on trained strength and on recruitment into the reserves. Those are the statistics for which the national statistician is responsible. She has indicated on her website that she intends to publish further data series once she is confident of their robustness. Separately, I have undertaken to publish for the House the targets to which we are working and I will do so before the end of the year.

[Vernon Coaker]

The whole House will be pleased to hear what the Defence Secretary has said. He said in his answer—I think I am quoting him, and Hansard will show whether I am correct or not—that the Statistics Authority had some doubt about the robustness of the Ministry of Defence’s figures and that once that robustness is sorted out, those figures will be published. That is my point.

[Mr Hammond]

I think the hon. Gentleman is referring to the figure for applications, not for enlistments or trained strength.

[Vernon Coaker]

It all needs clarification, which is my point. It is interesting that when we have a debate such as this, when the Secretary of State is feeling under pressure, we see amendments being accepted and more information being brought before the House. It is good that he is saying how he will publish this and how he will respond to that, but we now know that some robustness is lacking from the Government’s figures. That situation will no doubt be corrected much more quickly than it would have been before.

[Mr Brazier]

I thank the shadow Secretary of State for his generous words earlier, but I must pick him up on that last point. The new clause I have drafted is based on what the Government have already announced. It seeks to make that permanent and put it on the statute book, but it is working with the grain of what the Government are already doing.

[Vernon Coaker]

We think that the hon. Gentleman’s amendment, although it is welcome, does not go far enough. That is why we support new clause 3.

When the Defence Secretary responds to the debate, I think the House would like to know a little more about what negotiations are going on with Capita, which is running the recruitment programme for the Defence Secretary. What are the problems? Will the IT issues be resolved soon? Are there any other issues? He will know that various rumours are circulating about the problems with regard to Capita and I think it would help the whole House to know where we are with those negotiations, what the Secretary of State intends to do about them and whether there are any penalty clauses for Capita should it continue not to perform as the Secretary of State and the House would expect.

New clause 3 does not call for a reversal of the cuts to the regular forces, despite some of the accusations from those on the Government Front Bench. We support it precisely because we want the Government to prove that their plans are both cost-effective and viable. For that reason, we deem it reasonable that both Houses of Parliament should scrutinise and approve a report that assesses the viability and cost-effectiveness of the reforms.

It used to be the policy of this Government that regular forces would only be reduced contingent on the required increase in reserve recruitment—

[Mr Philip Hammond]

rose—

[Vernon Coaker]

I will give way in a moment. We are clear that reductions to the Regular Army must take place only at a pace that allows adequate uplift in the reserves to meet the shortfall.

15:45

[Mr Hammond]

The hon. Gentleman has half answered what I was about to ask him. Is he making a commitment to retain Regular Army strength at a higher level than the 82,000 funded into the future? If so, how will he meet the £1 billion a year cost of doing that?

[Vernon Coaker]

The right hon. Gentleman is flying another kite. I am not making that commitment at all. We support the thrust of the reforms to the Regular Army and the uplift in reserves, but new clause 3 seeks to obtain a proper understanding of whether the reform is working, whether it is saving money, whether it is offering value for money and what is happening with the recruitment targets. We need much more clarity and openness about all those things. The Defence Secretary can say that these are spending pledges or things we do not know. He can attack the hon. Member for Basildon and Billericay for not properly understanding the reform. However, he needs to address what is being said rather than what he thinks we are saying, and that is the whole point.

We talk about allowing adequate uplift in the reserves to meet the shortfall, and we heard from the right hon. Member for North Somerset (Dr Fox). He remarked only last month:

“When I was secretary of state, I said we would only decrease the numbers of regulars when we had guarantees that we would be able to get the numbers—training and equipping up of the reserves—to match.”

Members of the armed forces and of this House deserve to know from the Defence Secretary when that policy changed and why.

We support new clause 3 because we want the Defence Secretary to take more responsibility for these reforms. We consider it better to pause until the MOD has managed to get recruitment back on track as a plan accepted by Parliament than to be forced to ditch the entire reform a few years down the line when it is clear that it is not working. A pause before progressing the reforms would give him time to fix the problems, to provide us with the figures, to prove his plan is cost-effective and to show that he can meet the time frame he has set.

[Mr Ellwood]

I, too, welcome the hon. Gentleman to his position. Will he place on the record his thoughts on the fact that our commitments in Camp Bastion and in Afghanistan are to be downsized, with 9,000 troops coming home? In that situation, would a Labour Government keep the armed forces, particularly the Army, at the same size, bearing in mind that downsize, or return it—[Hon. Members: “This is about reservists.”] I am asking about regulars for the moment. Would he retain the regular forces at their current levels bearing in mind that we are reducing a major commitment in Afghanistan in the middle of next year?

[Vernon Coaker]

I have said on countless occasions—[Interruption.]

[Madam Deputy Speaker (Dawn Primarolo)]

Order. That is enough, Mr Ellwood.

[Vernon Coaker]

As I have said on numerous occasions in this debate, in other debates and in the media, and as my right hon. and hon. Friends have said, we support the thrust of the reforms. We know about the withdrawal from Germany and that the Army will end operations in Afghanistan in 2014, but that does not alter the fact that we must understand that the downsizing of the Army and the Government’s stated policy mean that as the regular numbers downsize and reduce an uplift in reserve numbers should go alongside that. The central thrust of the whole debate is that we do not have confidence that the uplift in reserves will be sufficient to conform to the policy on the reduction in the number of regular forces. That is the central point.

[Mr Ellwood]

I am grateful to the hon. Gentleman for giving way; he is generous. He talks about this uplift replacing the duties on the regular forces. That is why I posed my question. I am asking him what the commitments will be. What does he see as the commitments that will keep reservists busy, in the sense that our overall commitments have been reduced?

[Vernon Coaker]

I have given the hon. Gentleman the answer to his question, which he asked again. If he does not like or accept the answer, that is fine, but I will not keep repeating it. He was the Parliamentary Private Secretary to the previous Secretary of State for Defence when he made the commitment about uplift and about the relevant number of reserves having to be reached before the number of regulars was reduced. I wonder what comment he made to the then Secretary of State about that at the time.

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

I think the hon. Gentleman is trying to make quite a conciliatory speech. I have put my name to new clause 3. Does he believe that it would provide a focus and an impetus for ensuring that the measures are put in place more quickly, rather than slowly, and that it does not jeopardise the direction of travel that I think that we are all trying to agree on?

[Vernon Coaker]

I thank the hon. Lady for her valuable and important point. The hon. Member for Basildon and Billericay made the point that new clause 3 is not about trying to wreck the reforms, although that is one of the things that has been said about it. It is not about trying to stop the reform; it is about asking whether it is sensible for the House to demand of the Defence Secretary, “Are these reforms working? Are they delivering what they are supposed to deliver?” When the Defence Secretary comes forward again with viable plans, is it not the purpose and responsibility of this House to judge whether those plans are accurate and make sense?

[Mr Havard]

Does my hon. Friend agree that the central question under discussion is about what the military call integration, not only of reserves and regulars, but of contractors, people outside in society, and the businesses that are prepared to participate? We have a new commitment to an annual report, but that report would be 15 months from now. All that we are saying is: let us have that annual report debate now, in advance of things being done badly, so that we do those things well.

[Vernon Coaker]

I thank my hon. Friend for his comment, and agree absolutely with him.

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

I am grateful to the hon. Gentleman for giving way; he is being very generous in accepting so many interventions. This House, quite properly, has had many occasions on which to scrutinise these proposals, and will have many more. I have joined in debates, and have raised issues about what I feel is a mistake for the Territorial Army centre in Truro, and the Government are acting on those concerns. Is it not better that they carry on speedily resolving the issues than that they put a halt to sorting out the problems and cause further delay?

[Vernon Coaker]

I am sure the hon. Lady represents her constituency really well. She says that she has raised particular issues regarding the TA centre there, and she has worked hard to represent those to the Defence team in the Government, but this is about the strategic reshaping of our whole armed forces, and it is a reform that we need to scrutinise. We need to understand whether it is working. It is incumbent on the Defence Secretary to have a review and to bring the results before us, and there is a need for a pause. It is up to the House to agree on whether the Defence Secretary has got it right.

If we do not get this right now, we are taking risks with our country’s defence and security, and that is not an option for Britain or our armed forces. I know that we all want to support the Government in getting this right; I, too, want to give the Defence Secretary the opportunity to get it right. That is why my right hon. and hon. Friends and I will support new clause 3— it is in the best interests of our armed forces, and in the national interest.

[Sir Gerald Howarth (Aldershot) (Con)]

I agree with everybody who has said that reservists have performed a singularly valuable task in recent operations—about 25,000 have been deployed—whether by augmenting existing units or by contributing specialist skills that would not have been available to the regular armed forces. I remember very well visiting Basra with the Select Committee on Defence just a couple of months after the war ended, and finding that the entire Iraqi economy was being put right by an Army officer who, in civilian life, was a banker. He was responsible for putting Iraq’s finances in order. Clearly, he had more success than the previous Prime Minister had in this country.

That brings me to the point made by my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot), the Chairman of the Select Committee, about the budget deficit. It is important that we all understand why we are here today and why we are debating these matters. We would not be here if Labour had not left this country with a catastrophic budget deficit of £156 billion. That is why we had to make tough decisions—

[Mr Kevan Jones]

Will the hon. Gentleman give way?

[Sir Gerald Howarth]

I cannot resist giving way to my friend.

[Mr Jones]

I remind the hon. Gentleman that when he was in the shadow defence team in opposition, he was calling for a larger Army and a larger Navy. Did not the present Prime Minister and his team, when in opposition, agree with all our spending commitments, including those on defence, right up to 2008?

[Sir Gerald Howarth]

The hon. Gentleman had better wait to hear what I have to say. What I am about to say now is what I said when I was a Minister in the Ministry of Defence, which I would say more privately than I have been saying more recently. It is important that people recognise that in the Ministry of Defence we were faced, like every other Department bar those whose budgets were ring-fenced, with a requirement to produce savings immediately, because unless the Chancellor of the Exchequer was able to deliver a comprehensive spending review that reassured the capital markets that Britain was intent upon putting its public finances back in order, we would have been in an even worse position than we inherited in May 2010.

I have much sympathy with my hon. Friend the Member for Basildon and Billericay (Mr Baron) and I can see where he is coming from: he wants a larger standing Army, and so do I. I am a Conservative. I believe that defence of the realm is the first duty of Government. I found it deeply distressing to be a Minister in a Ministry of Defence that was having to cut its budget, but we were in coalition. I see my hon. Friend the Member for North Devon (Sir Nick Harvey), who was an extremely collegiate colleague in the Ministry of Defence. I make no criticism of him; my criticism is of his leader. We had to make some pretty tough decisions, and ultimately it was not we in the Ministry of Defence who decided what our budget was. That was decided at No. 10 and in the National Security Council. That is what happened.

We are here today because we had to make some tough decisions. In other circumstances we would not have wished to have a standing Army reduced by 20,000 and a requirement to supplement it with another 30,000 reservists. The White Paper which my right hon. Friend the Secretary of State produced earlier this year is littered with remarks about the financial constraints in which we have to operate, so it seems to me that we are making the best of a difficult situation. I hope, though, that the strategic defence review of 2015 will give us, particularly in the Conservative party, an opportunity to tell the nation that we intend to reorder the public spending priorities of the next Conservative Government.

I believe that in this uncertain and volatile world an increase in defence expenditure is a must. We are not there yet, and I hope to make the case over the next couple of years that that is what we have to do. We must restore some of the capability gaps from which we are suffering, and we must seek to repair some of the damage that has inevitably been done by the cuts that my right hon. Friend the Member for North Somerset (Dr Fox) had to make. He and my right hon. Friend the present Secretary of State for Defence should be hugely congratulated on having sorted out the Ministry of Defence’s appalling finances, which they inherited from the previous Administration.

The budget of the Ministry of Defence is now back on track, which is good news, but the strategic defence and security review of 2015 must give us an opportunity to enhance our niche capabilities, such as cyber, where my right hon. Friend has done an excellent job. I hope we can increase our investment in defence diplomacy.

I also believe that we need a larger standing Army. I must say to my hon. Friend the Member for Bournemouth East (Mr Ellwood) that I am not sure that he can predict what kind of world we will find ourselves in when we draw down from Afghanistan. The past four years have taught me that predicting the future is pretty difficult. None of us could have foreseen the Arab spring, the conflict in Syria or what is going on in the South China sea as we speak. This is an unstable world. Ultimately, the niche capabilities are important, but being able to take and hold territory requires having boots on the ground.

16:00

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

In support of what my hon. Friend has just said, which is the single most important observation anyone can ever make about defence planning, namely the unpredictability of future crises, may I remind him—that is not to say that he needs reminding—that only a few years ago the constant predictions were that it would be all about boots on the ground for the next 30 or 40 years? Let us therefore not make the mistake of doing something too rigid when we need maximum flexibility.

[Sir Gerald Howarth]

Naturally, I agree with my hon. Friend.

[Mr Brazier]

My hon. Friend the Member for New Forest East (Dr Lewis) has just made almost exactly the same point I was going to make. If we can keep a broader spectrum and a larger total mass, some of it at lower cost, by keeping reserve forces going, which brings in a wider range of skills and enables a multiplier effect, surely that is a better buttress against the unexpected.

[Sir Gerald Howarth]

I absolutely agree.

[Mr Ellwood]

My hon. Friend was absolutely right to mention my concern. I think that we have similar views on the desirable size of the armed forces, but I remind him that we had a vote on military intervention in Syria not long ago and this House decided fundamentally not to participate in that. I wonder how the House would vote on all the scenarios my hon. Friends have just mentioned. That will have a huge impact, and I worry about how this House is involved in that, but that is a concern on the size of the armed forces that we actually need.

[Sir Gerald Howarth]

If my hon. Friend thinks that Syria is a reliable or predictable template for the future, I urge him to be very cautious indeed, because it has special circumstances. I see no resiling by the Conservative part of this Administration from the Foreign Secretary’s statement to the International Institute for Strategic Studies in 2009 that a Conservative Government would seek to help shape the world in which we found ourselves and not simply to be shaped by it, and I entirely support that. I think that we need to have the means to back it up.

I will conclude by making this point: we are where we are. I have sought to set out why I believe we are where we are and what I believe we need to do for the future. I must say to my hon. Friend the Member for Basildon and Billericay that the Chair of the Defence Committee, our right hon. Friend the Member for North East Hampshire, made a good point when he observed that the new clause would require the Government to put on hold the process of enacting the provisions for enhancing the reserves, and I know that he feels strongly about maintaining the number of regulars. The numbers of regulars are reducing, in accordance with the timetable set out two or three years ago. Therefore, the imperative is not to put the reserve generation on hold, but to ramp it up as fast as we can.

[Mark Pawsey (Rugby) (Con)]

On the basis of “we are where we are”, did my hon. Friend hear the head of the Army, General Sir Peter Wall, say:

“We are well on our way to implementing this plan. To reverse course at this stage would be destabilising and damaging.”

Is not it the case that we have to do what we have to do, so let us get on with it?

[Sir Gerald Howarth]

I think that General Sir Peter Wall is right. I thought that my right hon. Friend the Secretary of State, when interviewed this morning on the “Today” programme, put the case eloquently. I do not dispute the fundamental position of my hon. Friend the Member for Basildon and Billericay, but I think that to put the reserve generation on hold would present a serious risk to the whole process and the destabilisation that my hon. Friend the Member for Canterbury (Mr Brazier) mentioned.

[Several hon. Members]

rose—

[Sir Gerald Howarth]

I give way to the former Defence Secretary.

[Mr Ainsworth]

I thank the hon. Gentleman for giving way. He has obviously read new clause 3. With good will and effort, how long a pause does he think it would result in?

[Sir Gerald Howarth]

I do not think it is for me to say that. I am not advocating a pause. It is my hon. Friend the Member for Basildon and Billericay who is doing so and he has told us that he thinks it all could be done in a matter of months. We have to understand what the Chief of the General Staff has said. There is a process under way.

I have talked to my commanders in Aldershot, about whom I am very proprietorial: the Secretary of State may think they are his commanders, but actually they are mine. The Army has taken this on the chin and said, “Right, this is the political remit we’ve been given. We salute, turn right, march off and do the bidding of the politicians.” Whether they think it is right or not, they do it and they are doing it now. Putting this spanner in the works will not hold back the run-down of the regular Army; it will create a run-down in the whole Army structure. As everyone knows, I am a light blue, but we are talking essentially about the Army.

[Mr Baron]

rose—

[Sir Gerald Howarth]

I give way to my hon. Friend, because I have made some observations about his position.

[Mr Baron]

I thank my hon. Friend for giving way. Those who say that we are trying to reverse the Army Reserve plans are completely wide of the mark. I recommend that one or two Members actually look at the wording of the new clause. It is very simple. It basically proposes a pause while we examine whether rising costs will lead to false economies and whether we are opening up unacceptable capability gaps. The pause could be very short if the Government allow prompt scrutiny of the report. It need only take a few weeks: the report could be produced immediately after the Bill gains Royal Assent and we could have a debate and vote in this House within weeks.

[Sir Gerald Howarth]

I appreciate my hon. Friend’s position, but I am afraid to say that we will just have to disagree. I think it would have a destabilising, adverse effect. My hon. Friend has not made the situation clear. What would happen if we initiated his proposed process, scrutinised the plan and the House then rejected it? Where would we be then? Would the House go back to square one and trade alternative views—perhaps even within our own parties—while in the meantime the whole thing implodes and melts down?

[Mr Baron]

In direct answer to that question, if the plans do not bear scrutiny in this place, that tells us that we should not be doing it in the first place and suggests a much bigger story that the plans are not working. The argument that this place cannot scrutinise something because we are afraid it will not pass the test of scrutiny is a particularly weak one, and I would suggest that we do not promote it for those who genuinely want to defeat the new clause.

[Sir Gerald Howarth]

My hon. Friend is a gallant and, indeed, very honourable friend, but party politics do come into this from time to time. I cast no aspersions on the shadow Secretary of State, the hon. Member for Gedling (Vernon Coaker), but it is a fact that, sometimes, if the Opposition see an opportunity to defeat the Government, they will use it. That is the way in which our system works, notwithstanding what the shadow Secretary of State has said about the general cross-party agreement on defence. Such agreement never existed when I first came to the House in 1983, so it is refreshing to debate matters in a much more intelligent way than in the mid-1980s.

I will conclude, because others wish to speak. We are not where I particularly would like to be, but the Army is to be commended for its professional approach. My hon. Friend the Member for Canterbury is also to be commended for the lead he has given. Our duty now is to crack on and make this work and, in the meantime, to address some of the longer-term structural issues as we approach the 2015 strategic defence review. I put my right hon. Friends on notice that I want the Conservative party to commit to giving more money to defence and it has to come out of the aid budget or any other budget—frankly, I do not care which. I think that the world is a dangerous place and we need our armed forces. The world has seen how professional they are. They are the finest armed forces in the world and they really can deliver what the Prime Minister wants, which is for this country to help shape the world in which we find ourselves.

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

It is always a pleasure to follow the hon. Member for Aldershot (Sir Gerald Howarth), even if I do not agree with everything he says. I wish to speak in favour of new clause 6—in my name and those of the shadow Secretary of State, my hon. Friend the Member for Gedling (Vernon Coaker), and others—and about our broader debate this afternoon.

It is worth reminding the Secretary of State and other right hon. and hon. Members that the British Army is of course Parliament’s Army; it is not the Crown’s Army. That dates back to the so-called Glorious Revolution, which is why we have to have an Armed Forces Act in every Parliament.

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

I am sorry to be a little outraged, but surely the hon. Gentleman would be the first to admit that it is not Parliament’s Army, but Her Majesty’s forces. It has nothing whatever to do with Parliament, although Parliament may deploy the forces on behalf of Her Majesty.

[Thomas Docherty]

I have to disagree with the hon. Gentleman. Parliament must give permission for a standing Army in peacetime and, despite our actions in Afghanistan, we are in a time of peace. It is therefore specifically Parliament’s Army, not the Crown’s.

[Mr Ellwood]

Will the hon. Gentleman give way?

[Thomas Docherty]

No, I will not. We hear quite enough from the hon. Gentleman at other times.

It is not the Royal Army: we have a Royal Navy and a Royal Air Force, but a British Army. I make that point not to take up valuable time, but because the Secretary of State seems to think that it is the job of Ministers of the Crown, not of Parliament, to make decisions about the Army.

In an earlier exchange about the Back-Bench debate, the Secretary of State said from a sedentary position that it was a Back-Bench vote. The problem with his approach, and the one advocated by the hon. Member for Canterbury (Mr Brazier), is that if there is an annual report that Members of Parliament want not only to debate but to vote on, it is clear that the Secretary of State’s intention would be to ignore any such decision.

This is our last chance to tell the Government that although the House supports the broad thrust of the Army reforms, they are clearly not going according to plan. The Secretary of State has already demonstrated that he has the courage to change tack, as he did on the aircraft carriers, when something is clearly going wrong. I am genuinely surprised that he is not prepared to say, “This is not going as well as we want. We need to slow the rate of progress, so that we do not end up in a disastrous position.”

[Mr Philip Hammond]

For a moment, I thought that the hon. Gentleman was suggesting that we ought to slow the rate of progress on the reserves agenda, but if anything we need to speed it up. I would just tell the hon. Gentleman—seeing the Chairman of the Defence Committee, my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot) in his place—that if he believes Ministers will not be regularly scrutinised from morning till night by the Select Committee and at Defence questions in this House throughout the implementation of the programme, I do not know what planet he is living on. Of course we expect to be scrutinised.

[Thomas Docherty]

If the Secretary of State had been paying a bit more attention, he would have heard me say that it is quite clear that he does not intend to respect any such vote in Parliament. I am sorry, but this Parliament, not Ministers of the Crown, should be sovereign. If he is not confident of carrying his plans for the Army in Parliament, something is fundamentally wrong.

[Bob Stewart (Beckenham) (Con)]

In the time that it will take the Bill to travel through the other place, could we have a report similar to the annual report, so that when the Bill comes back to this House for final approval we would have an idea of the real situation? We could thereby avoid this problem completely and, frankly, it might get the approval of my good friend the hon. Member for Basildon and Billericay (Mr Baron).

16:14

[Thomas Docherty]

I am grateful for that intervention. I hope that it would not be a career-damaging move if I called the hon. Member for Beckenham (Bob Stewart) my hon. Friend, because I have had the pleasure of serving with him on the Defence Committee for the past three years. That is a perfectly reasonable suggestion and I am sorry that the Secretary of State has not offered that option.

There is genuine good will on both sides of the House. The armed forces and the defence of the realm are not issues that should be party political. This has been a good debate so far because we have managed, on the whole, to keep party politics out of it.

I agree with the Chairman of the Defence Committee about the growing value of cyber-warfare. When the Defence Committee visited the United States earlier this year, we went to cyber command and saw at first hand the key role that is being played by reservists. I think that Members on both sides of the House would agree that we need more such reservists coming through.

The problem is that the bald facts show that we are not recruiting sufficient reservists. When the generals appeared before the Defence Committee earlier this year, they said that we needed to recruit 6,000 reservists annually. I am sure that the Secretary of State has the most up-to-date figures, but I doubt whether a huge number of reservists have been recruited in the past few days. We are clearly falling short and we have been falling short for years. This is not just a teething problem; it is an ongoing problem.

As the Chief of the General Staff has said, there is no plan B on this project. It is therefore crucial that we get it right. At the moment—I say this in a genuinely bipartisan manner—the Government are not on track to meet these important targets. It is entirely sensible for the House to ask for a pause so that the Government can get back on track. The excellent observation was made earlier that that would help to focus minds. Having robust targets and the threat of a pause hanging over the Ministry of Defence might get it to pull the finger out.

The point on which I disagree gently with the hon. Member for Canterbury is that the problem until now has been that the regular generals have been siphoning off the money. They have not made enough progress.

[Mr Philip Hammond]

indicated dissent.

[Thomas Docherty]

The Secretary of State shakes his head, but the £180 million that was allocated to the reserves in the first year was spent on upgrading the regulars. The generals told the Defence Committee that that was what they did. The threat of a pause if they do not get things sorted might compel the generals to make greater progress.

[Mr Havard]

Does my hon. Friend agree that a pause, rather than creating confusion or demoralising reservists, businesses and others, might have the opposite effect of showing people that there is a proper re-examination of a plan that they do not yet have the confidence fully to join? It might give them that confidence, rather than destroy it.

[Thomas Docherty]

I agree with my hon. Friend, whom the House will recognise is one of the experts on the Defence Committee on the issue of morale.

[Mr Brazier]

The hon. Members for Dunfermline and West Fife (Thomas Docherty) and for Merthyr Tydfil and Rhymney (Mr Havard) are both good friends and colleagues on the Defence Committee. However, may I suggest to the hon. Member for Dunfermline and West Fife that what he is saying just is not right? What the reserves want is a strong voice of their own in a regular-dominated process. That is exactly what new clause 1 would give them and the Government have agreed to that. What they do not want is what is in new clause 3. Proposed subsection (2) states:

“Further implementation of the plans shall be halted 40 days after the laying of the report”

unless there is a resolution of both Houses. That would put yet another level of uncertainty into their thinking.

[Thomas Docherty]

I have huge respect for the hon. Gentleman, but I gently disagree with him. The reserves already have many strong voices in the British Army. He would agree that Major-General Munro is one of those strong voices. I think that the hon. Gentleman means that the reserves need stronger voices in the British Army.

I am sorry to disagree with the hon. Gentleman but, like many colleagues on both sides of the House, I think it is clear from present morale—I am not sure how it could be much lower—that our reserves are not being given adequate support. New clause 3, which is supported by respected figures on both sides of the House, would send a clear signal that we will not simply go along with the plans, come hell or high water, but that we want to see genuine progress.

[Mrs Moon]

We talk as if the members of our armed forces are delicate little flowers, whose sensitivities are such that debates in this House have them crying into their cocoa at bedtime. The reserves and the regulars, for whom we all have huge respect, want to ensure that the service in which they proudly serve is organised and run efficiently and effectively. They, and this House, do not have that trust at the moment, and that is what we are looking for.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

May I just ask for short interventions? Many Members still wish to speak. Let us make sure that everybody’s voice is heard.

[Thomas Docherty]

On new clause 6, we have all heard, in the Defence Committee and elsewhere, that the biggest disincentive to joining the reserves, of whichever service, is getting time off work. These are the words of the Secretary of State’s Parliamentary Private Secretary, the hon. Member for Portsmouth North (Penny Mordaunt):

“a lot of reservists find it difficult to get time off for deployment or training courses”.—[Official Report, 23 April 2013; Vol. 561, c. 273WH.]

I am sorry that she is not in her place today. Perhaps she is training. [Interruption.] She is away on a course and we wish her all the best. Even the Secretary of State’s PPS has acknowledged that this is a huge challenge.

The White Paper sets out an ambitious goal of increasing the annual training requirement to 40 days, and I think Members on all sides of the House recognise the importance of that. I hope the Secretary of State will support new clause 6—his Liberal Democrat colleagues will, for reasons I will explain in a moment—because it seeks to provide a simple way to address that goal: reservists would receive an additional two weeks unpaid leave from their employer, provided that their firms had more than 50 employees. The hon. Member for Northampton South (Mr Binley) made the point that we have to careful about the impact on small and medium-sized enterprises, and it is right that we provide protection to smaller companies. The proposal is sensible and measured, because reservists will receive their military pay at no cost to their employer. In the rare cases of resistance from an employer, we propose that complaints are referred to an employment tribunal for arbitration.

I must confess that I am confident that the Liberal Democrats will vote for new clause 6 because the idea was originally developed by them and was passed at their party conference only seven weeks ago. I suspect that the former Minister for the Armed Forces, the hon. Member for North Devon (Sir Nick Harvey), has had a large hand in writing their defence policy, and that, in the regrettable and unforeseen event of there being a Division, he will vote for the new clause.

[Sir Nick Harvey (North Devon) (LD)]

I admire the hon. Gentleman’s enthusiasm for the proceedings of the Liberal Democrat conference—I only wish I shared it. I confirm my party’s support for the idea of two weeks’ military training and, although I do not purport to speak for them, I am sure many Conservative Members take the same view. The difficulty with legislating for that now in the manner the hon. Gentleman is suggesting is that there is a serious cost implication: he is proposing that military pay will be provided for that period of time. I dearly hope that this Government or a future Government will at some point be able to find the resources, but a gargantuan effort has been made to balance the Ministry of Defence’s books and the resources are not there. I know the Labour party has a bit of form on making unfunded commitments, but it would be irresponsible to legislate on this when we do not have the funds to pay for it.

[Thomas Docherty]

I am genuinely baffled. I do not know where the hon. Gentleman was before he came into the Chamber, but reservists already receive pay when they are on training. This proposal is not about additional training time; it is about meeting requirements for the training they have to undertake. If his only concern is about the funding element, I can reassure him that there is no additional spending cost. It actually—[Interruption.] If the hon. Gentleman stops chuntering for one second, I will finish. There will be no cost to the business and no additional cost to the Ministry of Defence, because it is already providing pay for that training period. Having given him that reassurance, I look forward to his confirming that Liberal Democrats will support us in the Lobby, in the unfortunate event that we cannot just adopt the proposal as a whole and someone calls a vote.

I am conscious that many others wish to speak; I will therefore finish with this thought. This Parliament is sovereign. It is up to us to send a clear signal that we want to support our armed forces, whether they be regular or reserves, on land, on sea or in the air. It is crucial that we provide a robust target for the MOD to do what it should be doing and ensuring that we have an adequate number of regulars and reserves to meet the aspirations that we all have for them.

[Patrick Mercer (Newark) (Ind)]

It is a great pleasure to follow the hon. Member for Dunfermline and West Fife (Thomas Docherty). Many of his remarks I agree with; some I disagree with. However, I particularly admire my close and hon. Friend the Member for Canterbury (Mr Brazier)—who sadly has gone for a cup of tea—and my other close and hon. Friend the Member for Basildon and Billericay (Mr Baron). They have opposing views, but they both have the good of the nation and the armed forces at their heart. I have no doubt about that.

I think I am right in saying that of all the ex-regulars and ex-Territorials in the House, I am the only one who has been a professional recruiter. My last job in the Army was as a colonel in the Army training and recruiting agency. I use the word “agency” with a curl of the lip: it was not a command or a military formation of any sort, which was one of the reasons I resigned from the Army—because of its disgraceful conduct, particularly over recruiting. I will return to that in a moment. I also had the privilege to belong to and to command a battalion that, at the height of the Territorial Army, had to find permanent staff instructors, adjutants and the like for up to four Territorial battalions—our third and fourth battalions, and what were then called the 1st and 2nd Battalions the Mercian Regiment.

That is where I first heard about STABs, which stands for stupid TA—and then a word that means “illegitimate people”—and about arrogant Regular Army “illegitimate people”. That is an example of the desperate confusion and rivalry between regulars and Territorials, to which my hon. Friend the Member for Canterbury made such clear reference, from the first and second world wars, and so on. I am a little out of date now, but in my experience that was a deeply divisive and extremely unhelpful view. In the Regular Army, we had to provide a lot of those individuals, which absolutely was a nuisance. None the less, anybody who looked at the colours of my regiment—or, indeed, of the fusiliers or any of the infantry or cavalry regiments in the British Army—would have seen that the majority of the battle honours on those colours were won by battalions and regiments from the Territorial Force or the Territorial Army. It is a fact; we cannot get away from it. Any Regular Army individual who ignores the importance, the potential or the sheer enthusiasm of the reserves—the TF, the TA or whatever we want to call them—is simply daft.

However, there are reservations I would like to express about the future of warfare and the type of forces we need to fight those wars. Turning to new clause 1, my experience as a commanding officer is that I was told in the late ’90s that my battalion was about 40 men under strength and that we could not recruit more than that, which, in a recruiting famine, would be quite impossible. I talked closely to what was then called the recruiting group of the Army training and recruiting agency, listened to its advice and did precisely the opposite.

[Mr Kevan Jones]

The hon. Gentleman has first-hand experience of recruitment. Does he agree with the earlier comment of the hon. Member for Bournemouth East (Mr Ellwood) about recruiters being staffed from the sick, lame or lazy?

[Patrick Mercer]

I was deeply offended by that remark. If I may, I would gently suggest that it sounds like a comment from someone who left the Army as a junior officer, without having to provide the sort of individuals that we provided for our recruiting offices, who were the very finest, Brecon-trained senior and junior non-commissioned officers inside the battalion.

16:30

[Rory Stewart]

May I respectfully suggest to my hon. Friend that my hon. Friend the Member for Bournemouth East (Mr Ellwood) was not saying that as his own view; he was talking about the reputation that was attached at the time?

[Patrick Mercer]

I entirely agree, in which case, in my 25-year experience, that is completely wrong.

Moving swiftly on. The Army and training recruiting agency, as it was at the time, could not and would not recruit. We were 40 men under strength when I took command; inside a year, we were 120 men over strength—in a recruiting famine when the economy was apparently buoyant and there were difficulties in finding manpower. What was going wrong with recruiting in the late ’90s is going wrong with recruiting today. I dread to hear people talking about recruiting offices not being open at the weekends; I dread to hear that people are not being recruited especially for the Territorial and the Reserve forces.

In my experience the only way to produce a battalion with an extra company was by fully understanding where to recruit and how to recruit, and by using our own resources. When we realised that recruitment was not particularly for the TA, we took TA recruiters with us, ensured that the particular conditions of the Reserve forces and the Territorial Army were understood and sent those recruits straight to the TA rather than try to confuse them with the Regular Army. I make no pretence of fully understanding the impact of social media, on which Capita and other firms base the core of their recruiting effort—that was different in my day—but I do know that unless we get out with capable and experienced people, seek recruits in the places where they are most plentiful, and physically present the Army, the Navy, the Air Force and the reserve forces, we will not recruit people. We simply will not, and I would be happy to debate that with anyone who thinks it is incorrect.

My hon. Friend the Member for Basildon and Billericay tells me that TA numbers are falling, while the Secretary of State for Defence seems to disagree. I am not quite sure, but there seems to be a serious divergence between the two. I would respectfully say that the Secretary of State has mentioned in the past that applications for the reserve forces were going up. On the basis of my experience, however, I would say that applications are very different from enlistments and that the problem is even worse in the reserve forces than it is inside the Regular Army.

[Jim Shannon (Strangford) (DUP)]

I would like to put it on the record in Hansard that recruitment to the TA in Northern Ireland is at a high level, and it has been so over a number of years. From his experience, the hon. Gentleman will know that recruitment to all the services—the Royal Navy, the Air Force and the infantry—has met levels higher than in the rest of the United Kingdom. There are parts of the United Kingdom, then, for which levels of recruitment are high, and Northern Ireland is one of those areas.

[Patrick Mercer]

I am grateful for that intervention. Recruitment in the Province was always good—despite the troubles—and I hope that it is even better now.

[Mr Baron]

On the point of TA numbers, let me confirm that the figures released last week showed a fall in TA recruitment. That was clear to see, and it was reported by the media and mentioned in various circles. That is what the report showed.

[Patrick Mercer]

I thank my hon. Friend.

[Mr Philip Hammond]

As a supplementary to the intervention made by my hon. Friend the Member for Basildon and Billericay (Mr Baron), what he says is absolutely true. The fall was 130 over the course of 12 months—0.6% of the trained strength. That is unwelcome, but statistically not a relevant number.

[Patrick Mercer]

There we are: we see the opposing views of the two sides. All I ask is for the Secretary of State for Defence to be clear about it, and to continue to be clear about it. I find new clause 1 to be sensible; it has my complete support. New clause 3 posits some extremely interesting questions, and we have had a good debate about it this evening. However, I think that the point about the changing face of warfare is terribly important.

We have heard a lot of talk about cyber-warfare and other specialist forms of warfare. If we open our history books, we see that in the late 1920s there was a school of thought which held that the fighting of savage tribes could be done entirely from the air. That was tried by an emergent Royal Air Force in Wazirista, and it completely failed, because there were not the boots on the ground to support the Royal Air Force in the excellent work that it did.

Of course there are specialisations within the reserve forces and the Territorial Army which are desperately important, but what our regular forces depend on is a very high level of fitness, a very high level of training, and an ability to deploy instantly. One of my hon. Friends, who is no longer in the Chamber, observed that there was always a period of time before any reservist—any Territorial—was up to snuff. That is no criticism, but, as Members who have served in infantry battalions know, preparing an individual for combat is akin to training a professional athlete. The level of fitness is extraordinarily important. I challenge any civilian holding down a full-time civilian job—and I do not say this with any form of disrespect—to be at such a level of fitness for instant deployment.

What we want for the future is the ability to nip problems in the bud—to avoid confrontation and conflict—and we therefore require deployment that is instantaneous, or as near to that as we can make it. I must say, with the greatest respect, that no reservist can achieve that. It is not in the nature of reserve forces. The clue is in the phrase “reserve, not regular”. I say that with profound respect for all Territorials and all reservists, and for their naval and air force equivalents.

[Mr Gray]

I broadly accept what my hon. Friend has said about fitness, but does he not accept that a significant number of Territorial Army regiments are absolutely ready for deployment in the way that he has described? I am thinking particularly of my own regiment, the Honourable Artillery Company, but I am also thinking of the TA special forces regiments, which are as good as their regular counterparts.

[Patrick Mercer]

I accept that a very small number of Territorials are ready for instant deployment, but I have to say that the Territorial Army units that I have seen—none of which have been so-called special forces, and which I shall not name—have been a very, very long way from being ready for instant deployment. That is just my experience, but I fear that the Territorials who came to support me on operations were never up to snuff until we had given them concerted and extensive periods of training, including fitness training.

I think that if we wish to avoid trouble, it is quite wrong for us to reduce the size of our regular forces until our Territorial or reserve forces are fully in place, fully equipped, and fully trained to deploy. I understand that the standards are different, and I respect the fact that reservists need a period of training before they can deploy, but I think it irresponsible to allow our regular forces, with their instant deployment capability, to be run down before we have an adequate replacement.

[Caroline Dinenage (Gosport) (Con)]

It is a great pleasure to follow my hon. Friend the Member for Newark (Patrick Mercer), and, indeed, rather daunting to follow so many right hon. and hon. Friends—some of them gallant—who have so much personal and very relevant experience and knowledge of this subject. My special interest is the relationship between the armed forces and employers, and I believe that the Bill presents an opportunity in that context.

With a more integrated role for reserves will come a more open and supportive relationship between armed forces and employers. A number of the new clauses refer to business, implicitly or explicitly, and would have an impact on it. That is why I was so keen to speak at this point. As a small business owner and as someone who has been in business for more than 20 years and has employed reservists, I understand that, for many of them, successful service in the military depends hugely on the support of their employers. That will become even more important given the increased role of reservists in the future armed forces, and it is right for us to recognise the valuable contributions that employers make to our national security by hiring them.

Equally, however, it is important that trained-up reservists are provided with accredited qualifications that the armed forces can provide, and these will give a real service to employers. We must recognise the skills employees will gain from reserve service and how that will benefit employers and society as a whole. Ultimately business needs one thing more than anything else: certainty. It just wants to know what is expected of it with sufficient notice and what it can expect in return. I am delighted that this Bill commits to providing employers with full information about what hiring a reservist entails.

Too many businesses currently have no experience of hiring a reservist and the establishment of a national relationship management scheme will strengthen the partnership between the armed forces and employer organisations, leading to a much more open and predictable relationship in which all parties are fully aware of what is required of them.

One of my concerns with new clause 3 is that it will provoke confusion. It will delay or prevent payments being made to small enterprises when their employees are mobilised. This extra finance for small and medium-sized enterprises, who find it most difficult to plug the gap when their employees are away, is vital. These firms do us a great service by employing reservists and it is only right that they should be fully compensated.

My other concern with new clause 3 is about the delay in the delivery of the transferable skills. This Bill does not just compensate firms; it provides them with real benefits for deciding to hire a member of the new Army Reserve. Time with the reserves can greatly enhance an employee’s effectiveness through high-quality training, leading opportunities and the chance to gain specific civilian-recognised qualifications while on duty. By accrediting reservists with recognised qualifications, we not only help them progress their careers, but provide real incentives for employers to take them on in the first place. Businesses will know that while their employees are away on duty they will not be engaged in unnecessary training exercises, but will be gaining tangible and valuable skills. This will also encourage more people to consider serving with the reserves. The fact that they will be able to make a genuine contribution to our national security while increasing their employability in their chosen career path will be a real pull, attracting high-quality individuals into the Army Reserve.

This will help more than just those who are currently employed, however. Reserve service can help provide people who are currently out of work with boosts to both their skills and their self-confidence, helping them on to the job ladder. Joint industry-led apprenticeships will provide unemployed young people with a trade and accredited qualifications, but, more than that, reservists will learn how to work as part of a team, how to solve problems and how to present themselves with maturity. These skills are harder to define than others, but are no less valuable

Time with the Army reserves is a great preparation for life in the workplace, enhancing employability skills and boosting self-confidence. It is excellent news that this Government will be placing clear emphasis on the development of reservists, and on building and maintaining an open and productive relationship between employers and the armed forces. We owe a great debt both to the individuals who protect our national security and to the businesses that employ our reserve troops. I am delighted that this Bill will make sure that we are repaying both those employers and the reservists themselves by providing them with the training and skills to flourish both in the field and in the workplace.

[Mr Gray]

It is a great pleasure to follow my hon. Friend the Member for Gosport (Caroline Dinenage) both because I very much agree with her point about small and medium-sized enterprises and the Territorial Army and because it gives me an opportunity to thank her publicly for the superb work she has done as chairman of the royal naval section of the all-party group on the armed forces for the last three years. She has graced the position—both physically and intellectually, if I may say so—over that time and I am most grateful to her for it.

I did not intend to contribute to the debate, but I rise to speak briefly because I find myself in a difficult position. That difficulty has been highlighted by much of what has been said in the debate and in the media over the last 36 hours or so, and it is that, contrary as this may sound to our experience personally, most people observing, and taking part in, the debate are of the same, or at least a very similar, view. We all deeply regret the reduction in the Army from 102,000 to 82,000 soldiers. It is appalling; personally, I think it is disgraceful. I am extraordinarily concerned about the future of the globe if we have an Army of 82,000 soldiers and about the reductions in the RAF and Royal Navy. One or two of my colleagues have expressed that concern very well. This is a very uncertain world, and facing it with this reduced defence spending is extremely worrying. As a Back Bencher, I have no personal responsibility for these matters, but I accept that the financial position in which the Government found themselves when they came to power three years ago necessitated these cuts in defence spending, in the same way as they necessitated all kinds of unpleasant cuts in other Departments. None the less, I deeply regret them and am extraordinarily worried about them.

16:45

I also have great reservations about the Army 2020 plan for the Territorial Army. I am a passionate supporter of the TA and reserve forces. I served in the TA for seven years, and I think the work of my hon. Friend the Member for Canterbury (Mr Brazier) in forcing forward this agenda has been superb. Contrary to what my hon. Friend the Member for Newark (Patrick Mercer) said, I think that in the future the reserve forces will make a magnificent contribution to whatever we ask our armed services to do, as they have done in both Iraq and Afghanistan.

[Mr Baron]

I commend my hon. Friend for all his good work on behalf of the regular armed forces in this place, but with the greatest of respect his point that the MOD budget has to be cut because of the financial constraints does not quite ring true because other Departments have escaped the cuts. It is a question of national priorities. Does he agree?

[Mr Gray]

I always feel instinctively uneasy when anyone says, “With the greatest of respect,” because it almost certainly means, “With no respect at all.” Of course, I agree with my hon. Friend: of course, we would all love the budgets to be as they were; of course, many of us would like the aid or other budgets cut, possibly in favour of defence; of course, those of us who believe passionately in defence would like to see the defence of the realm maintained as it has been for the past many years; of course, we would like us to achieve the NATO target of spending 2% of GDP—or even the NATO target of spending 2.5%—of GDP on defence, but this is realpolitik and those things are not going to happen.

I will leave that to one side for a moment. We all start from the position of regretting the cuts but realising the reasons for them. On the reserve forces, we all hope the plans in place work. We are all committed to making them work and believe that the reserve forces have done a superb job. In recent years, and as long ago as the first world war, they have made a gigantic contribution to the defence of the realm, and we strongly support that. Everyone in the Chamber is deeply concerned about whether the 20,000 regular soldiers will be replaced by the increase in the TA that is posited. Of course, we are concerned about that, about the recruitment figures and about whether the Secretary of State’s plans will work out. Those are common positions. I suspect that not one person in the Chamber would disagree.

The disagreement arises when we consider what to do about it. The Regular Army is already at about 86,000 or 87,000. By early February, it will be at about 82,760. The redundancy notices have gone out. People are already on their leaving training and getting ready to leave the regular forces. We cannot reverse that. No matter what we do in the Chamber today, there is no magic wand that will reverse it. By the middle of January, the Army will be at 82,760 soldiers. Regret it as we may, we cannot reverse that. The second thing for certain is that, whether or not we have confidence it will work, we will have to set about increasing the size of the reserve forces, their training and their equipment so that they can replace the lost regulars. Those two things are certainties, and regret them as we may, they are going to occur.

The question, therefore, is: what do we do about it? That is the nature of this debate, and it seems to me that there are two possibilities. The first thing we could do, as my hon. Friend the Member for Basildon and Billericay (Mr Baron) seeks to do—I have to admit that I signed his new clause 3—is to write our aims and concerns into legislation. In recent years we have done that in this House on a number of occasions—for example, with regard to the green carbon targets and reducing child poverty. In such cases, there is a law that says, “The Government will do this or do that,” and if it does not achieve those aims there will be some penalty to pay. It is therefore perfectly possible that we could do what my hon. Friend seeks to do by writing into legislation—the law of the land—something that says that the Government will improve our reserve forces in the way described. The alternative approach would be to do what we do with regard to every single thing in this place—to scrutinise what the Government are doing in questions and debates in this Chamber, in Westminster Hall and in Select Committees. We can do that in a variety of ways.

I am very encouraged by the fact that my right hon. Friend the Secretary of State tells me that because of my hon. Friend’s new clause and this debate, he, the Prime Minister and the Ministry of Defence as a whole have been entirely focused on this matter for a number of days. That means we have achieved one of the things we wanted to achieve. We have said to the nation as a whole—it has been wall to wall in the media—that we are deeply concerned about these cuts in defence spending, about the fact that we have an Army of 82,000 that may not be able to do its job, and about whether the re-growing of the Territorial Army will actually occur. However, should we take the further step of writing those concerns into legislation?

[Bob Stewart]

Having talked briefly to my hon. Friend the Member for Canterbury (Mr Brazier), I suggest that one way of helping to get everyone onside would be to have a report on the state of the Reserves produced quickly, before the Bill comes back to this House. My hon. Friend thinks, unless he shakes his head to indicate the contrary, that the people to do it would be members of the reserve forces and cadets associations. That could take the sting out of the tail very quickly.

[Mr Gray]

My hon. Friend makes an extremely good point. There is an absolute requirement on the Government to come before this House and report on what they are doing about this, and I have every confidence that they will, whether through the all-party group on the reserve forces and cadets, chaired by my hon. Friend the Member for Canterbury, the Defence Committee, Opposition days that the Opposition will no doubt call, Back-Bench business days or regular oral questions. I am confident that my right hon. Friend the Secretary of State will be at the Dispatch Box day in, day out for the next two or three years answering difficult questions about recruiting in the Territorial Army. I pledge to him now that I will be his most difficult inquisitor. If he thinks that he is somehow going to get off the hook and that I am going to become a nice fellow and be gentle with him, he is completely wrong. I spent an hour in his study yesterday afternoon explaining these matters to him.

The question is whether it is right that our concerns about cuts in the Regular Army and our aspirations about improvements in the Territorial Army should be written into legislation. Having listened to the debate, I am sorry to have to advise my hon. Friend the Member for Basildon and Billericay—if he were listening he would no doubt shake his head in disappointment—that I am increasingly convinced that it is not right to seek to write these things into legislation because they are political rather than legislative matters.

Two things greatly concern me about new clause 3, despite the fact that my name appears on it. First, it would have no effect whatsoever on the reductions in the regular forces that we are mainly concerned about. Secondly, if we had a pause to examine the matter and produce a report, one of two things would happen at the end of that pause. The report would be satisfactory to the House of Commons and the House of Lords, we would vote for it, and the plans would plough ahead as they were before, or the report would not be satisfactory to us and we would turn it down. If the latter were to occur, who knows what would happen? Presumably we would have to start again. The one thing that would not happen, even then, would be that somehow we magically grew the regular forces to fill the gap that had by then appeared. If I am right in thinking that the House would approve the report, what on earth is the point of a huge gap between now and then in producing it? We would end up with precisely the same plans that we have for the growth and retraining of the Territorial Army. I am not convinced that the pause that the new clause would write into legislation would necessarily help the situation.

We are all deeply concerned about what is happening, and I very much hope that we will not be back in the Chamber in five or 10 years expressing our regret about it, although I have a horrible feeling that we might be. However, I am by no means convinced that the new clause is the solution to our concerns. I pledge to give my right hon. Friends on the Front Bench as hard a time as I possibly can—probably even a harder time than I gave the Government when we were in opposition—in the Select Committee and in this Chamber, but I am not convinced that writing these concerns into legislation is the right thing to do. I therefore have to disappoint my hon. Friend and tell him that, despite having put my name to his new clause, I shall be unable to support him in the Lobby.

[Dr Julian Lewis]

It is a pleasure to be able to say that, unlike the traveller who fell among thieves, I feel like one who has fallen among friends. On these issues, I have friends on both sides of the House, including, first and foremost, my hon. Friend the Member for Canterbury (Mr Brazier), who has been a wonderful advocate for the reserve forces for many years. I say to him and to those on the Front Bench that if this matter had simply been put forward in isolation, I would not have contemplated voting for the new clause tabled by my hon. Friend the Member for Basildon and Billericay (Mr Baron). I am thinking of doing that for two reasons but, before I go into detail, I shall mention a couple more of my friends.

It is a pleasure to welcome to the Opposition Front Bench another friend, the new shadow Secretary of State for Defence, the hon. Member for Gedling (Vernon Coaker). My experience of his activities and positions on security issues has been wholly positive, and he has lived up to that by making his first trip as shadow Secretary of State a visit to the Barrow shipyards. I am sure that we can rely on him to maintain the firm position in support of the successor generation of submarines for the nuclear deterrent that both Front Benches adhere to, and which only one small party has sought to obstruct.

Another friend to whom I would like to refer—he has just slipped out of the Chamber for a moment—is the Secretary of State for Defence, my right hon. Friend the Member for Runnymede and Weybridge (Mr Hammond). Most people would agree that he was a very fine Treasury Minister indeed. I cannot think of anyone who was better at tackling complex financial problems and explaining them in terms so crystal clear that, from time to time, I even thought that I understood them myself. In reality, I could not think of any person, when presented with a limited budget—whether for defence or any other portfolio—who would make a better fist than my right hon. Friend of adjusting the workings of the Department concerned to fit a budget that he had perhaps rather arbitrarily been allocated.

That has a direct bearing on the two reasons for my putting my name down in support of my hon. Friend the Member for Basildon and Billericay’s new clause and amendments. The first relates to the size of the defence budget; the second is the question of whether the scheme for the reserves is or was linked to the proposed reduction in the size of the Army. Those are the two things that worry me. Even if my hon. Friend’s new clause and amendments are not ideally drafted—I am not saying that they are not—they present me, and other hon. Members whose main purpose of being in Parliament, apart from representing our constituents, is to maximise the defence of this country against threats, with one of the few opportunities that we have to register our concerns when we think that defence has fallen too far down the list of priorities.

I listened carefully to my hon. Friend the Member for North Wiltshire (Mr Gray) saying that the defence budget was a given. I am afraid that I do not accept that. I do not accept that more money could not have been found from within the defence budget and outside it. There could have been more money. We did not need to spend £1.4 billion extending the life of four Vanguard-class submarines just to satisfy the Liberal Democrats, so they could put off the decision to sign the main-gate contracts for the successor submarines until the next Parliament. We did not need to spend a whole shedload of money reversing the plan for two aircraft carriers and to adopt a preposterous plan for one functional and one non-functional aircraft carrier, and then spend another shedload of money reverting to the original position. Nor do we need to spend £40 billion or £50 billion on a high-speed train service to the north of England—[Interruption.] It has a great deal to do with it.

17:00

[Martin Horwood]

On a point of order, Mr Deputy Speaker. Having missed some of the recent debate, I am unclear as to which clause we are precisely discussing—and I really cannot tell from the hon. Gentleman’s speech.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Dr Julian Lewis.

[Dr Lewis]

If the hon. Gentleman had not been absent, he would have heard the great deal of discussion that took place about the priority of defence in the nation’s schedule of priorities. If he had made that bogus, so-called point of order having been here, I would have had some time for him, but given that he did not even have the courtesy to listen to the debate before making it, it was unworthy.

The reality is that a nation gets the defence forces it is prepared to pay for and it can decide what level of services it will fund—whether that involves cuts in the Army, the Royal Navy or the Royal Air Force that could be avoided.

The next question is whether this scheme for the reserves was linked to the proposed cut in the size of the Army. As I said, if this scheme had been put forward on its own, I could have wholeheartedly supported it, but it was not. It was specifically put forward as a compensating factor for the Army’s regular strength being reduced by 20,000. We were told that that reduction would be compensated for by the 30,000 increase in reserves. Now we are told that that linkage no longer exists. My hon. Friend the Member for North Wiltshire asked what we will do if we find that in fact the reserve scheme is not working. If I understood him correctly—I think I did—he said that, by the time we discovered that we were not going to get the 30,000 reservists, it would be too late to regenerate any of the loss in the 20,000 regulars. [Interruption.] He seems to be indicating that I have understood him correctly. If that is the case, I take great exception to the fact that this linkage was ever made in the first place.

If we are to be told that we have to accept cuts in this country’s defence capability, we should be told that honestly. We should not constantly be confronted with shifting goalposts. If the recruitment of 30,000 reservists may or may not be achieved, and if the 20,000 cut in regulars will happen nevertheless and is irreversible, we should have been told that at the outset. [Interruption.] Somebody says, “We were.” Who said that?

[Mr Gray]

Allow me to be the person who says that we were indeed told that. I very much regret that that has occurred. None the less, my point is not that I endorse this, but that it has happened: by 10 January, the British Army will be 82,767. That is the case and cannot be reversed.

[Dr Lewis]

Yes, but if so, that was always going to be the case, and we should not have been sold the package of a cut in regular numbers of 20,000 on the basis that at least we could look forward to 30,000 reservists being added. That is no way to treat a mature Parliament or to show respect for the judgment of parliamentarians who are doing their best to supply the best level of defence that we can within the budget available.

A very simple principle is at stake here. Let us suppose that someone comes to a sovereign Parliament and says, “We are going to make a significant cut in the size of the Army, but don’t worry about it because we are going to compensate for it by building up the reserves to the tune of 30,000 people.” If there are any significant or reasonable doubts at all about whether the 30,000 target will be achieved, it is reasonable to say, “Hang on a minute, what happens if the 30,000 is not achieved?” If the answer is that the 20,000 cuts will take place in any case, it is absolutely unacceptable to have promised the 30,000 in the first place, especially as it was explicitly stated to the House that the cuts in the regulars would not be fully or irreversibly implemented until we knew that the reserves were going to be forthcoming. I do not want us to have this debate again in a few months’ time or in a few years’ time over the fact that we have neither the number of regulars we need nor the number of extra reserves that were promised. That is why, whatever the intricacies of the wording of new clause 3, I intend to support it.

[Rory Stewart]

I wish to speak briefly, because I am aware that many others wish to contribute, in strong defence of new clause 1 and against new clause 3. Both relate to the central issue, which has been raised by almost everyone in this debate: recruitment into the Territorial Army. New clause 1 will encourage recruitment, because it will show that we are taking the reserves seriously, whereas new clause 3 will discourage recruitment by introducing an unnecessary delay. The most important thing, which lies behind this entire debate, is defining what the reserves are for—what the function of the military is about. The best way to guarantee that we have a well-supported, well-recruited reserve is if we in this House can agree what the future shape of the Army is supposed to be and what we are supposed to be doing with it.

The central issue, which perhaps has not been touched on enough today and which I would like to touch on briefly, is whether we have or have not learned the lessons of the past 10 years. Do we have the shape of reserves or of the Regular Army required to meet the threats of the future? In essence, events of the past 10 years have completely exploded, or should have done in this Chamber, the entire consensus on nation building and counter-insurgency. For 10 years, the entire shape of our military has been arranged around those two principles, both of which I suggest, modestly, have been discredited. The experience of Iraq and Afghanistan should have taught us by now that we have designed the wrong kind of Army for the wrong kind of campaign. Those two central slogans, “nation building” and “counter-insurgency”, have not worked. We do not have time to talk through why they have not worked—if we had a long debate, we could do so—but we have to design reserve forces that meet that problem and that challenge.

Why has nation building not worked? In essence, it was because it was an over-ambitious fantasy. The jargon of “the rule of law”, “governance” and “civil society” turned out to be impossible to deliver. We never had the tour lengths, the linguistic knowledge or the deep area expertise to deliver things that require an understanding of culture and history. Counter-insurgency did not work for even deeper reasons, which the military predicted—in the United States and the United Kingdom—before we deployed. We never had the requisite number of troops, nor were we ever likely to. We never had the tour lengths we required. We never had a credible, effective, legitimate Government in Baghdad or Kabul to back us. We never had full control of the borders. In the absence of such structures, those missions turned out to be impossible.

Unless the reserves and the Regular Army take on those lessons, we will have the wrong kind of forces in the future. That does not mean that our military does not have a deep function in intervention, but that deep function needs to look at the model of Bosnia, and not that of Iraq or Afghanistan. We need to remember that in Bosnia our military proved exactly what an intervention can do. It went into a country with 110,000 people under arms. It went into a country when a million refugees had been displaced and when there were internal borders dividing it up in 25 different ways. By the time we had finished that intervention, the internal borders had gone, the militia had been reduced to 5,000 and the crime rate in Bosnia had dropped; it is now lower than that of Sweden. That is the kind of success for which we should be preparing our military.

The final thing—this really goes to the heart of what my hon. Friend the Member for Canterbury (Mr Brazier) has raised—is the question of how the knowledge, the imagination and the skills and the local links of the reserves should be adjusted to a new world. There are small ingredients that we should insert, and I plead with the Secretary of State to look very hard at reintroducing the short-service limited commission, or the gap-year commission. My hon. Friend the Member for Canterbury, I and a number of other Members of Parliament are proud to claim that we have been in the military. Our standing there was very brief, but it was an incredibly deep and important experience for us and for many other people. It is a relatively cheap programme, and it is one that can develop the links between the military and the local population.

On imagination and skills, the biggest prize for which we should be aiming is to fill in the gap that the Foreign Office, the Department for International Development and the current military are unable to fill in. I am talking about deep area expertise and deep linguistic expertise, which the right kind of reserve forces should be able to produce. We need to recruit, promote and incentivise the right kind of people. We want people with other lives, other jobs and other experiences, who should be able to develop what we have been sadly lacking for 20 years, which is a sensitivity to other cultures and an understanding of other environments, other local business and other political structures. If we can get those things right, we have exactly what we need for new clause 1, which is a template, a model or a bar to which to hold the Government accountable on how the reserve forces should function. We will also have a reason not to proceed with new clause 3, which delays the most important part of rebuilding the reserves.

[Mr Baron]

I agree with what my hon. Friend said about nation building. He had his opportunity to adjudicate on the Government’s nation building when we had the Afghanistan vote in 2010. Does he not accept that what we are arguing for here is a very brief pause—it does not have to be a long pause—and the longevity of that pause is in the Government’s gift?

[Rory Stewart]

I do not wish to quote my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot), but my peroration was somewhat interrupted by that intervention.

Above all, it seems important that our relationship with the reserves is characterised by one word, which is “seriousness”. We need a plan, a direction and a confidence of Government, and that will turn around recruitment. People do not join the reserves for exactly how many days they serve, for how much money they receive or for the pension terms they get. They join because they feel that it matters: Government are serious about them, Parliament is serious about them and we know where we are going. The reason I will not vote for new clause 3 is that it passes exactly the wrong model at exactly the time when we should be moving forward with the wonderful work of my hon. Friend the Member for Canterbury and producing the excitement and the vision that we require. Another muddle and another conversation would be catastrophic.

17:14

[Andrew Selous]

A lot of sorrow and anger has been expressed on both sides of the House this afternoon about the fact that it has been sadly necessary to make reductions in the Regular Army. We all understand that, but we all also understand that it was a necessary reaction to the £160 billion deficit with which this Government were confronted on taking office and the £38 billion black hole in the defence budget that there was at the same time.

We have heard a lot of praise for the reserves and for the Territorial Army throughout the debate, and that is right and proper.

[Mr Kevan Jones]

Will the hon. Gentleman give way?

[Andrew Selous]

Not at the moment.

As a former Territorial soldier, I extend that praise to the regular forces alongside whom I have had the pride to serve. There are wonderful people in both the regular and reserve forces of whom this Parliament can be justifiably proud. It is absolutely right, however, that the Government have agreed to new clause 1. Like many others, I pay huge tribute to my hon. Friend the Member for Canterbury (Mr Brazier) for tabling it. Indeed, I went to see the Secretary of State yesterday to lobby for new clause 1 and I am delighted to see that it has been accepted by the Government.

New clause 1 is important because, in spite of the praise we have heard for the reserve forces and specifically for the TA from Members on both sides of the House, all Territorials will say that a certain amount of antipathy exists between regular and reserve forces as they serve our country together. It is absolutely right that the new clause should put into law independent scrutiny and independent control over what is happening to our reserve forces and the reserve forces estate, as well as the progress in recruitment and so on.

The Government had to take very difficult decisions, and they decided to move towards a Regular Army of 82,000 and an Army Reserve, as we will soon call it, of 30,000, making a total Army strength of 112,000. Incidentally, we would still have the fourth largest defence budget in the world and a considerable list of new equipment to go with those armed forces.

The point that has been made, first and most clearly by the Chair of the Select Committee on Defence, is that the reductions in the regular forces have already been made and are in place and on track to happen. There is no proposal to increase the number of regular soldiers from any quarter of this House. A prescient intervention by the Secretary of State on the shadow Secretary of State led the shadow Secretary of State to say that the Labour party had no plans to increase the number of regular soldiers. The question before the House is therefore how to press on and ensure that the reserve recruiting plan works and is successful. That is at the heart of what we need to do this afternoon, and the question is what will best help and bring about that recruitment effort. I listened to the wise words of my hon. Friend the Member for Canterbury, who said that any legislative impact that would put a halt to the plans to increase the reserve forces would be a hammer blow to the morale of the TA. We need certainty, and for everyone in this House to get behind the plans and ensure that we can successfully increase the strength of the Army Reserve from 19,000 to the 30,000 that we want.

We must remember that as recently as 1990 we had 72,000 Territorial soldiers, so it is entirely possible for us to move up to 30,000. It is an increase of only 20 extra Army Reserve recruits by parliamentary constituency and is an entirely achievable objective. I believe that we can bring that about. We need employers’ help, and I am encouraged by the fact that companies such as Carillion, Barclays and BT are very much getting behind the measures to make sure that we get the reserves that we need.

We will have full parliamentary scrutiny of the process; of that there is no doubt. We do not need new clause 3 to have proper parliamentary scrutiny of it. That is what the House is providing this afternoon, and that is what happens every month at Defence questions. It is also the role of the Select Committee on Defence to make sure that we have proper scrutiny.

[Mr Bone]

My hon. Friend makes a point about scrutiny, but the only way to get a substantive vote on the issue by this House is to support new clause 3; that is the difference. Members can criticise the Government’s policy, but they cannot change it without a vote.

[Andrew Selous]

The point that I make to my hon. Friend is that Government Members have come to the conclusion that we want an Army of 112,000 people, made up of 82,000 regulars and 30,000 Reserves. There has been no proposal from any part of the House, including from Her Majesty’s loyal Opposition, to change those figures. That is a decision that the House has taken. I have heard no serious challenge to that this afternoon, given the financial situation that the country finds itself in. The issue before the House is: how do we all get behind the plan and make sure that it works, giving it proper scrutiny, but fully backing and supporting it?

We have had proper scrutiny this afternoon from pretty much every Member who has spoken. Even the most enthusiastic advocate of the reserve forces in the House, my hon. Friend the Member for Canterbury, was excoriating about the recruitment process run in recent months by the Regular Army to try to increase the Army Reserve. He is a shining example of someone giving proper parliamentary scrutiny to the process that we are considering because he wants it to work. He is doing that in a way that shows that he is committed to making the proposal a success, and that is the difference. That is why I am pleased that new clause 1 is being accepted by the Government, and why I think that it would be damaging, divisive and unnecessary to support new clause 3.

[Richard Drax (South Dorset) (Con)]

It is a pleasure to take part in the debate; I have listened very carefully to it all afternoon. I find myself in a very difficult place, particularly being a Conservative MP, for two reasons. First, in my view, the cuts to our armed forces have gone far too far. Secondly, I believe that the ratio of regulars to reserves is wrong. Rather than going for 70:30, we should be looking at 90:10.

[Andrew Selous]

Is my hon. Friend aware that the United Kingdom’s reserve proportion would, under the proposals, rise to 25%, while in Australia it is 36%, in Canada it is 51%, and in the USA it is 55%? We would have less than half the reserve proportion of some of our major NATO allies.

[Richard Drax]

I hear my hon. Friend, and I respect him hugely for his opinion, but it is slightly dangerous to look at other countries and think that we can meet their expectations. I remember when an American general came to speak to a few of us upstairs about reserves. He had served under President Clinton and then President Obama. He was an interesting and very decorated man who had fought in Vietnam. We asked him about the reserves that America has. He made a rather salutary comment: “In America, having a high proportion of reserves works, because we have the money to fund them. We have airstrips with Hercules aircraft lined up on them, just waiting for commercial pilots to step out of their 747s into them, and to go off to trouble spots or wars around the world.” We cannot begin to meet that level of expenditure; that is what really worries me. We are pushed to fund the regulars.

We have two aircraft carriers, but I bet my bottom dollar that we will not have enough men and resources to man and protect one, with frigates and destroyers around, submarines underneath, and aircraft above. It is a hugely expensive commitment that I do not think has really been considered.

[Mr Brazier]

I am so pleased that my hon. Friend enjoyed the presentation by Dave McGinnis, one of my oldest friends, but his point was that because in America reserve manpower is less than a quarter of the cost, America is able to afford, whatever size its budget—it is obviously larger than ours—a much larger range of capabilities, and more boots on the ground, albeit that some of them are at lower readiness, by having such a high proportion of reservists.

[Richard Drax]

Again, I have huge respect for my hon. and gallant Friend, but it is dangerous to compare one country with another. I stand my ground on that.

I shall not speak for more than another minute as I know that others want to follow and I have not got much more to add. I have huge respect for my hon. Friend the Member for Basildon and Billericay (Mr Baron). I will support him, although I do not like the element of delay. Why does not my right hon. Friend the Secretary of State conduct the assessment now, while the Bill is going through Parliament, as has already been suggested? That is perfectly possible. An assessment could be made without delay, and I would be grateful if that could be dealt with in the winding-up speeches.

[Mr William Cash (Stone) (Con)]

I noticed the Secretary of State commenting under his breath as my hon. Friend was making that point. It might be opportune, especially in the light of the votes that some of us will cast this afternoon, if the Secretary of State could reply to my hon. Friend’s point. If he did so now, we would not have to wait for another Minister to respond to the debate.

[Richard Drax]

I agree. I look forward to hearing whether that point is dealt with in the winding-up speeches.

Many hon. Members have said that wars have changed and perhaps there is no need for battalions of infantry. My right hon. Friend the Member for North East Hampshire (Mr Arbuthnot) said that there was no longer a need for the number of battalions that we used to have. May I give three examples where boots on the ground would be needed, quite apart from any conventional war that we might have to fight? First, God forbid that the Northern Ireland troubles ever rose from the ashes again. We had 32,500 men and women in Northern Ireland at the height of the troubles. With a professional Army of 82,000 men—a large majority of whom are not bayonets, to use the Army lingo; many are back-up forces—we would be pushed to man that one commitment.

Secondly, the Falklands has been mentioned so many times. Baroness Thatcher was looking at cutting our armed forces just before the war broke out—I think my historical facts are right—and, as I understand it, afterwards she said, “Never again am I going to take our armed forces for granted.” Thirdly, for a big evacuation, potentially from a friendly country—let us say Kenya—we would need, without aircraft carriers, boots on the ground to secure an area around which our citizens could be extracted. This takes huge resources, immediate resources, professional resources.

I say to all those who work in the reserves, alongside whom I have worked, that I have enormous respect for them. This is not a question of denigrating the reservists. I have a huge amount of respect for them all and thank them from the bottom of my heart, as does the nation, for what they do. All I am saying is that the ratio of 70:30 should be reviewed and it should be 90:10 instead. Finally, my military sources tell me that senior officers say one thing in public, but that a very different message is given in private.

[Mr Ellwood]

It is a pleasure to participate in this important debate. I wish we had more such debates in the House of Commons and more regularly. It is a pleasure to follow my neighbour down in Dorset, my hon. Friend the Member for South Dorset (Richard Drax), as it is to follow my hon. Friend the Member for Gosport (Caroline Dinenage), my hon. Friend the Member for North Wiltshire (Mr Gray), whom I congratulate on his Defence Committee appointment, and my hon. Friends the Members for New Forest East (Dr Lewis), for Penrith and The Border (Rory Stewart) and for South West Bedfordshire (Andrew Selous).

This has been a powerful debate. I congratulate, as others have done, my hon. and gallant Friend the Member for Canterbury (Mr Brazier)—he says not to do so, but I will anyway—on the work that he has done. I congratulate also General Sir Graeme Lamb, with whom I know my hon. Friend worked closely in his work on the armed forces. New clause 1 is welcome, providing for an annual independent assessment of what the reserves are doing and, I hope, for an annual debate in the House on the reserve forces as we move forward.

New clause 3 is a little mischievous. It calls for further implementation of the plans to be halted, which means that things stop and we drop tools at this point. We do not know the time scale. That has not been clarified by the debate. I was a little concerned when my hon. and gallant Friend the Member for Basildon and Billericay (Mr Baron) said that we should not be doing this in the first place if it is the wish of the House to go against the Government. That really worries me, because what is the genesis of new clause 3?

I am also concerned about Labour’s position. Labour Members were supportive on Second Reading and in the Committee, on which I served, but today they suddenly changed their tune. On their watch the MOD had to be put in special measures, because they burnt a £38 billion black hole in the budget.

17:30

[Mr Kevan Jones]

Will the hon. Gentleman give way?

[Mr Ellwood]

I am afraid that I do not have time to give way to the hon. Gentleman. Of course, Labour also cut TA training completely in 2009, so it is difficult to take lessons from Labour Members. It is opportunistic to join this argument now, as others have said.

[Mr Baron]

Will my hon. Friend give way?

[Mr Ellwood]

I will, but very briefly.

[Mr Baron]

I think that my hon. Friend has inadvertently misrepresented what I said. I was commenting on the previous Secretary of State’s plans and his commitment to the House that there would be no wind-down of regular forces until the reservists were able to take their place, which my right hon. Friend the Member for North Somerset (Dr Fox) confirmed only a few minutes ago.

[Mr Ellwood]

I hope that the Secretary of State will respond to that point, because in an earlier intervention I asked the question to get to the heart of that aspect.

I am concerned about the message that would be sent to our allies, both NATO allies and the United States, if Parliament halted or interfered with the recruitment drive that the Bill is designed to enable. The redundancy notices for the regulars have already gone out, so it is clear that there is no quid pro quo and that we cannot stop this plan and keep the regular forces at the size we would allow. The Bill allows a method of influencing, and indeed improving, recruitment, through the relationships with employers and so forth.

On the capability gap, an important question was asked: how will the wider world perceive that? Any pause in the recruitment of reservists would be dangerous, because the TA is at a lower state of readiness. The idea is to replace 20,000 regulars with 30,000 reservists. Are they the same? No, of course they are not, but that raises the question of what world we are now working with.

I was interested in what my hon. Friend the Member for Penrith and The Border said. He touched on some of the concerns about how the conduct of war is changing. I asked those on the Opposition Front Bench to say exactly what it is, with our withdrawing from Afghanistan and reducing in size, to have a standing commitment, and what the armed forces, however they are comprised, will actually do, because the balance between war fighting, stabilisation and peacekeeping has changed. The idea that we have to win over local support is now more central than it ever has been. Infrastructure, development, local governance and the drive for agriculture have all been mentioned. All that is secondary to the war fighting that takes place, but in Afghanistan and Iraq the war fighting was conducted and completed relatively quickly. We lost in those cases in the peacekeeping and nation-building. That is where it is very interesting to see the TA provide value, because it has the linguistic skills and can come in when skills in banking, cyber-technology, civil service and governance are required.

[Mr Brazier]

My hon. Friend is making an excellent speech. The new commander of Sandhurst in the sand, which will be our most long-lasting legacy in Afghanistan, is of course a TA brigadier.

[Mr Ellwood]

My hon. Friend is absolutely right. That is a long-term aspiration in helping Afghanistan.

My concern is whether this House will ever again entertain putting boots on the ground. I would like us to have a large standing Army, as others have mentioned, and to be that leader in the world, carrying that big stick. I ask that question because of my concern about the vote this place had on Syria. It was a very simple action that we would have been participating in, yet this House voted against the Government. Others say that perhaps that is not a yardstick for potential future interventions, and I quite understand that, but it could be that, because of the ghosts of Afghanistan and Iraq, interventions in future will have a light footprint and will be very different. I simply pose a question as to what our armed forces need to look like: do they need to look like what we have had in the past, or should they adapt to the type of footprint we will need in the future?

[Dr Julian Lewis]

The vote on Syria was absolutely different from any other vote, because it was not just about humanitarian assistance; it was about helping al-Qaeda take over another country, and many of us who support humanitarian assistance would not support that.

[Mr Ellwood]

I totally agree with my hon. Friend, who I know has spent a lot of time looking at the issues. The point I am trying to address is whether that situation will be repeated in the future. Will this House have an appetite to commit troops with boots on the ground or will it say, “What has it got to do with us? We cannot guarantee that we will vote on it”? We have to be prepared and ask ourselves what it is that our armed forces—[Interruption.] If hon. Members want to intervene, they may do so.

[Mr Gray]

Does my hon. Friend not realise that people such as me, who were very cynical before this debate but who have been persuaded by the argument that it would be wrong to put the target in legislation and have, therefore, moved towards the Government’s side, are now being persuaded by his argument in favour of a smaller Army, which is actually against what he is trying to achieve?

[Mr Ellwood]

My hon. Friend misunderstands me. I am not saying we should have a smaller Army; I am saying we should have faith in building up reservist forces with the capability to meet the challenges of the future. As a regular, I believe that the regular forces could easily adapt and be used in various situations, but I also have faith, as a result of the models we have seen in America and, indeed, Australia, that other skills sets can be used and that we can build the Territorial Army to match our requirements, not just for the security of our country and the protection of our overseas territories, or because of our NATO commitments, but because the conduct of war itself has changed. We need to consider that.

As a consequence of withdrawing from Afghanistan, we do not have one entire brigade training to go there and another recuperating after being there. The size of our armed forces needs to concertina. The new model army and the Glorious Revolution have been mentioned, but what happened to that army after the revolution? It was disbanded completely. This House needs to be able—very quickly—to expand and contract the size of the armed forces and be willing to do so as needs change. I do not believe it is right to have a massive standing Army when we are still uncertain about what we want it to do.

That is why I do not believe that the proposal in new clause 3 would be the right thing to do, because it would put a pause on developing the TA. It would stop us recruiting and building up the capability that we would be able to use in all the scenarios mentioned today. I urge hon. and right hon. Members to think very carefully about the damage new clause 3 would do and the message it would send if they vote in favour of it. It would be dangerous for the armed forces and dangerous for the Reserves.

[Sir Edward Garnier (Harborough) (Con)]

I defer to the military knowledge and experience of those who have spoken before me. The House has had the particular advantage of hearing the remarks of my hon. Friend the Member for Penrith and The Border (Rory Stewart) and it will now have the advantage of not hearing me repeat them.

My constituency of Harborough has a squadron of the Leicestershire and Derbyshire Yeomanry. It is suffering from poor recruitment and I have one practical solution to offer those on the Ministry of Defence Front Bench and the Secretary of State in particular. In order to avoid the attrition rate—the wastage rate—of those who express an initial interest in serving in the reserves, the Territorial Army as was, we should bring them into the units and give them weapons training much more quickly, rather than wait for them to go through medical tests and so forth. Once we have grabbed them, got their interest and introduced them to the practical, military side of the reservists and their camaraderie, we can then decide whether they are fit for the role they wish to play or whether we should deploy them in a less front-end activity. That is a simple, practical proposition and I trust it would enable the Secretary of State and his Ministers to produce the 30,000 reservists and not to lose so many on the way to achieving that number.

[Mr Philip Hammond]

I think this is the first time that I have had the pleasure of addressing the House while you are in the Chair, Madam Deputy Speaker, so I offer you my congratulations.

I congratulate all right hon. and hon. Members who have spoken this afternoon. This has been a good debate, during which many passionately held views have been expressed and much deep knowledge displayed. I thank those who served on the Public Bill Committee and scrutinised the Bill very effectively.

Most of all, I congratulate my hon. Friend the Member for Canterbury (Mr Brazier), who led the debate so ably on this group of new clauses and amendments. He speaks with an authority on this subject that is unquestioned throughout the House, and when he speaks on this subject, we listen. By “we”, I mean not only Members of the House, but the Government.

What my hon. Friend has said to me and the House today about the crucial importance of protecting the distinctive ethos of the reserve movement, even as we move to an integrated armed forces, is compelling. He is absolutely right that we must get right the balance between integration and protecting that distinct ethos if we are to achieve our goals.

I am happy to have made a commitment to my hon. Friend to introduce in the other place an amendment that reflects his new clause 1, which I have to say is technically imperfect, to ensure that this House has an annual opportunity to consider an independent report, produced under statute by the RFCA, not only once, as is proposed in new clause 3, but every year—not just as we roll out the programme, but thereafter—so that we can monitor not just the expansion of our reserves, but the maintenance of them in future.

[Mr Havard]

How will that consideration be undertaken? Will there be a proper, full debate on the report in the House in Government time, as several hon. Members have mentioned, or will there be some other mechanism?

[Mr Hammond]

That will be for the House to determine, and the hon. Gentleman knows the mechanisms available. However, I expect to be held to account for our delivery of this agenda. I am confident that the Chairman of the Defence Committee will give me no quarter in holding me to account for the delivery of this immensely complex agenda.

[Mr Cash]

Will the Secretary of State give way?

[Mr Hammond]

I will make some progress, because I have very little time, and I want to respond to some of the points made during the debate.

My hon. Friend the Member for Penrith and The Border (Rory Stewart) made an extremely important point that I fear was nearly missed. One could be forgiven for thinking that the recruitment of reserves as part of Army 2020 is simply a question of backfilling or substituting for regulars, but he pointed out that as the nature of warfare changes and we need more specialist skills, we will find increasingly that specialists have to be recruited through the reserves from the civilian sector. With the creation of our cyber-reserve force, we are already seeing the truth of that statement, as people in highly skilled technical jobs in the private sector queue to join the cyber-reserve and offer their skills and expertise to the defence of our nation.

I am the first to acknowledge—I have done so before, and I want to do so again today—that increasing the size of our Army Reserve to 30,000 and sustaining them at that level is a challenging agenda. We are doing it in the face of ending combat operations in Afghanistan, and however strange some people may find this, the prospect of going into a combat zone is a huge recruiting sergeant for the armed forces, regular and reserve alike. We are also doing it against the backdrop, about which I have been completely frank, of challenges with the existing IT system.

We have to get the balance right between our central recruiting system and the vital role played by reserve units in mentoring new recruits. My hon. and learned Friend the Member for Harborough (Sir Edward Garnier) was absolutely right that the key to converting applicants into recruits and getting them through the training process is to get hold of them early at unit level and mentor them through that process. That is what we are doing.

17:45

Across this agenda, there are dozens of work strands. The top echelon of the Army is completely engaged in this agenda. The top civil servants in the Department are completely focused on delivering this agenda. Countless pilots are under way to trial different approaches in different parts of the country to determine what is the most effective way not just to recruit Reservists, but to convert them to trained strength as rapidly as possible.

[Mr Cash]

Does my right hon. Friend accept that what he says will happen in the House of Lords is way off in February? Will he not take the advice of my hon. Friends the Members for Beckenham (Bob Stewart) and for South Dorset (Richard Drax) and initiate the pause that is needed to get this matter right and then submit it to a binding decision of the House at this stage, rather than waiting until the Bill has been passed? Why can he not do that?

[Mr Hammond]

I will not do that because this is a long programme—a five-year programme—that will need continued scrutiny throughout its life. I am asking the House to give the Bill a Third Reading this afternoon so that we send a clear message to the Army, which needs the space to deliver this agenda and is confident that it can do so; to the many thousands of reservists up and down the country who commit their time and effort to the defence of this country; and to the many thousands more waiting in the wings, whom we are seeking to attract to join the reserve forces.

[Several hon. Members]

rose—

[Mr Hammond]

I must make some progress, because I have very little time and I want to leave a couple of minutes for my hon. Friend the Member for Canterbury to wind up the debate.

I hope that my hon. Friend the Member for Canterbury will not press new clause 2. It is essential that we manage the defence estate as a whole. We are on the brink of completing the appointment of a strategic business partner for the Defence Infrastructure Organisation, which will mean that we have the very best private sector estate management capability to deliver the defence estates programme. That will be to the benefit of the regulars and the reserves.

[Mr Baron]

Will my right hon. Friend give way?

[Mr Hammond]

I will say something about new clause 3 and will then take an intervention from my hon. Friend.

First, I recognise that my hon. Friend is a passionate supporter of the armed forces. It is ironic that today, that passion has manifested itself in an attempt to block or inhibit the growth and reinvigoration of the reserves. I know that that is not what he wants. Indeed, I know that he would like to see more capability across our armed forces, not less. As I have made clear, we have no problem with submitting information to the House for scrutiny. By accepting new clause 1, we will deliver the intention behind subsection (1) of new clause 3. I believe that making it an annual report for annual scrutiny will provide for better scrutiny than what he is proposing.

I cannot accept the halt that is proposed in new clause 3. That would send out a signal now to the thousands of people who are in the reserve forces or are thinking of joining them. The Government have set out their plan and are legislating to deliver it. The Army has embraced the plan wholeheartedly. For Parliament to introduce additional tripwires at this stage would create uncertainty, undermine the message about the roll-out of improved terms and conditions, and cast doubt on our intention to spend the sizeable sum of £1.8 billion that is available to support this agenda. In short, it would make the whole agenda into a political football.

As my hon. Friend the Member for North Wiltshire (Mr Gray) said in his contribution, the proper way to scrutinise the implementation of this programme is through the established mechanisms of the House—the annual report, Select Committee hearings and the reporting of data—and not by halting the roll-out of the programme. We do not do that elsewhere and we should not do that for our reserve forces.

What I am attempting to do is to ascribe the most transparent of motives to my hon. Friend the Member for Basildon and Billericay (Mr Baron), but listening to him I could not help detecting just a hint of an undertone of a hidden agenda. Maybe what he wants is not to help us to fix the challenges we face in the reserves agenda, but to find a reason to abandon the project. In his own words, he told the House:

“we could very easily reverse the cuts to the regulars”.

[Mr Baron]

Using language such as “tripwires” and apportioning motives that do not exist does not do my right hon. Friend any good at all. The bottom line is that it is perfectly right for Parliament to say, “Let us pause and examine in detail,” and it is in the Government’s gift to make it a very brief pause indeed. The Secretary of State has still not answered the question. Does he accept that the plan has changed since 2011? We have heard in the House that the previous Secretary of State said that the intention was not to wind down the regulars until we were sure that the reservists could take their place. When and why did that plan change?

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order.

[Mr Hammond]

I have heard these arguments from my hon. Friend before. I have always been clear that we have no choice but to reduce the size of the Regular Army to operate within our budgets. The difference between an Army of 102,000 and an Army of 82,000 is £1 billion a year. He does not have that funding available, and neither do the Opposition. If we are to operate within our budgets, we have no choice but to draw down the Regular Army as we withdraw from Afghanistan and to build up the reserve strength that will primarily be needed if we again become embroiled in an enduring operation with six-month troop rotations.

[Mr Jeffrey M. Donaldson (Lagan Valley) (DUP)]

Recruitment is critical to the success of this project. In Northern Ireland, almost all our reserve units are at 100% recruitment capacity. Why not extend and raise the ceiling for recruitment in successful areas?

[Mr Hammond]

I can tell the right hon. Gentleman that, although we have not publicised it, we have increased the recruiting cap on units in Northern Ireland to 115% of liability, and the Army will continue to consider increases in liability caps in other parts of the country where recruiting performance is strong. I can go further and tell him that a review is currently under way to look at trade skills available in Northern Ireland. Most of the reserves recruiting is trade skills-specific. If we find that pools of additional trade skills are recruitable, we will consider locating additional units in Northern Ireland to tap into them. We have to be agile and go where the potential recruits are and where the skills we need are.

I want to go briefly through some of the other points that have been raised. I want to nail the point my hon. Friend the Member for Basildon and Billericay has made several times in debate and in the media. He says that a 40% or an 80% mobilisation rate is not achievable. We are looking at a maximum mobilisation of between 3,000 and 4,000 reservists at any given time, out of an Army Reserve of 30,000. By my maths, that is significantly below 40% or 80%. During Operation Telic in Iraq, 85% of reservists responded to call out—an 85% mobilisation rate—and Operation Herrick had a 79% mobilisation rate, so I do not quite understand his point.

[Mr Baron]

Will the Secretary of State give way?

[Mr Hammond]

I am sorry, but I have to press on. I also want to deal with—

[Mr Baron]

rose—

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. The Secretary of State is not giving way and he has very little time to finish.

[Mr Hammond]

I also want to deal with the cost of the Reserves. The ratio is 1:5—the cost of training and maintaining a reservist is one fifth of the cost for a Regular Army soldier.

I will not dwell on the Opposition’s position; I think I have made my views known in interventions. However, I want to make a comment about new clause 4, tabled by the hon. Member for North Durham (Mr Jones), which deals with mental health. He has a long and honourable record of raising this issue. While I hope he will not press new clause 4 to a vote, I would be prepared to ask the RFCAs, as part of their obligations under new clause 1, to include reservists’ mental health in the issues that they report on. I hope he will consider that helpful.

Finally, let me turn to new clause 6, which was tabled by the hon. Member for Dunfermline and West Fife (Thomas Docherty). His intentions are absolutely honourable and good: he wants to impose an obligation on employers to grant unpaid leave for training. We have not absolutely ruled out looking at that possibility in the future, but we have made a conscious decision that we want to do this working with employers, not against them. That has meant a couple of tough decisions on unpaid leave availability and discrimination rules. For now, we have decided to try to work with the grain, with employers, but if that does not work and we find there is a problem in the future, we will have an opportunity to return to this issue in the Armed Forces Act in 2016.

We have had a good debate. I urge the House to reject new clause 3 and embrace the concession we have made on new clause 1, so that we have an annual debate on the progress of the project in the House. I hope we can send from the House tonight a clear, cross-party message that we are behind the men and women of our reserve forces, who give so much for the defence of our nation.

[Mr Brazier]

May I say what a pleasure it is to speak for the first time under your chairmanship, Madam Deputy Speaker? I failed to declare my interest at the beginning of this debate: I am proud to have one son in the Regular Army and one in the Territorial Army.

This has been an excellent debate. I would like to mention two speeches in particular: the forensic analysis of my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot) and the piercing vision of my hon. Friend the Member for Penrith and The Border (Rory Stewart). They both gave the House a great deal to think about, as did many others, in excellent speeches.

I thank my right hon. Friend the Secretary of State for accepting the substance of new clause 1. I look forward to it being introduced in another place. I will indeed withdraw my new clause—I made it clear that what I wanted was for it to be properly discussed. He has been very patient with me pressing him on reserve matters, of which property is just one. The decision to adopt the substance of new clause 1, reinforced by many speeches from all parts of the House, sends out a message to the reserves that the House of Commons is behind the reserve forces, just as it is behind the regular forces. We are proud of both. Finally, I must ask colleagues not to vote for new clause 3, tabled by my hon. Friend the Member for Basildon and Billericay (Mr Baron). Much as I respect him, it would send out a disastrous message to the reserve forces at this sensitive time. I beg to ask leave to withdraw the clause.

Clause, by leave, withdrawn.

New Clause 3

Report on Future Reserves 2020

‘(1) Within one month of the passage of this Act, the Secretary of State shall make and lay before Parliament a report on the viability and cost effectiveness of the plans set out in Reserves in the Future Force 2020: Valuable and Valued, Cmd 8655, together with his recommendation on its further implementation.

(2) Further implementation of the plans shall be halted 40 days after the laying of the report unless both Houses shall have resolved to approve the recommendation from the Secretary of State contained in the report.’.—(Mr Baron.)

Provides for a Government report detailing the viability and cost-effectiveness of the plans set out in the White Paper on Reserves (Cmd 8655). Both Houses must approve the report and the Secretary of State’s subsequent recommendation in order for the implementation of the reforms to reserve forces to continue.

Brought up, and read the First time.

Question put, That the clause be read a Second time.

17:59

Division 130

Ayes: 252

---

Labour: 231
Conservative: 9
Scottish National Party: 5
Plaid Cymru: 3
Liberal Democrat: 1
Independent: 1
Green Party: 1

Noes: 306

---

Conservative: 255
Liberal Democrat: 45
Democratic Unionist Party: 3
Independent: 2

18:14

Proceedings interrupted (Programme Order, 16 July).

The Deputy Speaker put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No. 83E).

New Clause 6

Leave entitlement for reserve forces

‘(1) The Employment Rights Act 1996 is amended as follows.

(2) After section 63C insert—

“63CA Right to time off for reserve forces

(1) An employee who is a member of a reserve force (as defined in section 374 of the Armed Forces Act 2006) is entitled to be permitted by his employer to take time off during the employee’s working hours in order to undertake training activities connected to the reserve force.

(2) An employee’s entitlement to time off under subsection (1) is limited to 14 days maximum.

(3) An employee is not entitled to paid remuneration by his employer for time off under subsection (1).

(4) This section does not apply to employees of companies with fewer than 50 employees.

63CB Complaints to employment tribunals

‘(1) An employee may present a complaint to an employment tribunal that his employer has unreasonably refused to permit him to take time off as required by section 63CA.

(2) An employment tribunal shall not consider a complaint under this section unless it is presented—

(a) before the end of the period of three months beginning with the day on which the time off was taken or on which it is alleged the time off should have been permitted, or

(b) within such further period as the tribunal considers reasonable in a case where it is satisfied that it was not reasonably practicable for the complaint to be presented before the end of that period of three months.

(3) Where an employment tribunal finds a complaint under this section well-founded, the tribunal shall make a declaration to that effect.”.’.—(Thomas Docherty.)

A reservist would be entitled to two weeks statutory additional unpaid leave from their employment (where the company has more than 50 employees) for the purpose of reserve forces training, for which they shall receive their military pay.

Brought up.

Question put, That the clause be added to the Bill.

18:15

Division 131

Ayes: 235

---

Labour: 225
Scottish National Party: 5
Plaid Cymru: 3
Green Party: 1

Noes: 315

---

Conservative: 265
Liberal Democrat: 44
Democratic Unionist Party: 3
Independent: 2

Schedule 1

Exemptions relating to premises used by a contractor

Amendment made: 1, page 34, line 6, leave out

‘apart from sections 33 to 42’.—(Mr Dunne.)

Third Reading

18:29

[The Parliamentary Under-Secretary of State for Defence (Mr Philip Dunne)]

I beg to move, That the Bill be now read the Third time.

This is the first time I have had the opportunity to serve under your chairmanship, Madam Deputy Speaker, and it is a great pleasure to welcome you to the Chair. I want to begin by thanking the members of the Public Bill Committee, who did an outstanding job in ensuring that the Bill was subject to detailed scrutiny. As a Committee, we benefited particularly from the expertise of those who are or have been members of the armed forces, both regulars and reserves, a number of whom have contributed to our debate today.

The Bill deals with important matters, some, I accept, of a rather technical nature. In particular, I would like to thank my hon. Friend the Member for Canterbury (Mr Brazier), who has had much praise heaped on him, quite properly, from all quarters of the House. He brought his deep understanding of current, and several historic, reserve issues to our deliberations in Committee and today. In fact, it was remarkable to be taken back by him well over a hundred years, thanks to his knowledge of reserve numbers before the first world war.

I should also like to thank the hon. Member for Plymouth, Moor View (Alison Seabeck) for fulfilling her promise on Second Reading to give the Bill a fair wind. I understand that she is not with us this evening. I completely understand why, and I ask her colleagues to pass on my kind words and hope that she shortly becomes a grandmother again. Her contributions in Committee were insightful and constructive, with the enthusiastic assistance of her shadow Front-Bench colleague, the hon. Member for North Durham (Mr Jones), who frequently brought his experience as a Defence Minister to bear on our proceedings. They both ensured that the Bill left Committee having been thoroughly examined, after more than 40 hours of debate.

Defence of the UK and the protection of our national interests can be achieved only if we provide our armed forces with the capabilities they need to operate effectively. We have a duty to them to ensure they have the tools they need in terms of manpower, training, equipment and logistical support. The Bill will allow significant improvements to the way in which defence operates in the two crucial areas of procurement of equipment and support, and of rebuilding our reserve forces.

There is widespread agreement that the procurement and support of defence equipment can and must be improved. It is clear from our debate in Committee that there is a consensus on the need for reform. In the past, under Governments of both parties, too often defence procurement has not delivered the equipment needed by our armed forces on time or within budget. By producing for the first time a balanced and affordable equipment programme, we have already made significant progress in improving the framework in which defence equipment is procured. Now is the time to make further structural changes to ensure that the ground we have already gained is not lost in the future.

The outline of our approach on procurement reform was set out in the White Paper “Better Defence Acquisition”, which we published on 10 June. Our preference, as we expressed around the time of the White Paper, is to transform the existing Defence Equipment and Support organisation into a Government-owned, contractor-operated organisation—a GoCo. But as we have explained, it not a foregone conclusion that a GoCo will be chosen instead of a public sector comparator, which we are calling DE&S-plus.

In addition, as was made clear in the written ministerial statement by my right hon. Friend the Secretary of State for Defence, the Cabinet Office and the Ministry of Defence have recently completed a review into the viability of the matériel strategy commercial competition. After a rigorous examination, it concluded that a viable commercial competition for a GoCo provider exists, albeit with risks. We welcomed this conclusion; indeed, we have already made considerable progress in addressing the recommendations and managing the risks the report highlights, including strengthening the DE&S-plus team.

The report also recommended that any further reduction in the number of bidders should stimulate a formal reconsideration and decision on whether to proceed further with the GoCo option. Last week, we received through this competition, which we have been running in parallel with the Bill, one bid for a GoCo from Materiel Acquisition Partners, a consortium led by Bechtel, with PA Consulting and PricewaterhouseCoopers. This is a complex, detailed proposal, running to more than 1,200 pages, which is currently being evaluated to understand what benefits it offers, at what cost and with what conditions. We intend to subject the bid to run a GoCo to a rigorous comparison with the public sector comparator, DE&S-plus. We expect a proposal from the team developing the DE&S-plus option shortly.

Colleagues have asked me, rightly, about what DE&S-plus means. As we have said, we believe that the GoCo option is most likely to embed and sustain the significant behavioural change required to transform defence acquisition, but we need to test this, and we are testing the GoCo proposition against the best that we could do wholly within the public sector. The DE&S-plus proposition is being worked up now. I cannot give much detail at this stage, as I would not want to compromise its proposal. What I can say is that we are focusing on ensuring an optimum balance between the need for an organisation that has the freedom to run its affairs in a way that best meets Ministry of Defence needs, and retaining and building on the values of the public sector. Should the GoCo option be the chosen way forward, the legislation that we have set out in part 1 of the Bill is essential to ensure that it can operate effectively without delay.

The Secretary of State’s written ministerial statement yesterday also announced the withdrawal of the other consortium competing to run a potential GoCo—clearly, that is regrettable. The Ministry of Defence, with the Cabinet Office and the Treasury, will now study the detailed proposal received from Materiel Acquisition Partners. In parallel, the DE&S-plus team will continue to refine and enhance their proposition. This analysis will inform a decision on whether it is in the public interest to proceed with only a single commercial bidder and a public sector comparator, and a further statement will be made once this process is complete. All I can say at this stage is that the bid we have on the table is substantial and from a consortium of world-class private sector businesses.

While analysing these proposals, we are going to continue to work with our allies and with industry, who have expressed a desire to understand how the potential changes to the matériel strategy for DE&S would work. We are confident that through this engagement we will work to determine how a GoCo would manage our international business and relations with industry as effectively as possible.

One of the most valuable aspects of the Committee was the opportunity it provided me to set out the GoCo proposal in greater detail than was possible in the White Paper. We have been able to describe the mechanisms, in addition to the legislation through which the Government will exercise strategic control over a GoCo. For example, through both this Bill and the contract, the GoCo will be required to protect information that is sensitive for national security or commercial reasons. Much of our debate in Committee centred on protecting confidential information and on intellectual property.

Open competition will usually be the best way of ensuring value for taxpayers’ money. However, sometimes there is only a single provider of a capability we require, and sometimes the need to maintain critical national industrial capabilities or sovereign control of the intellectual property in equipment programmes requires us to place contracts with UK companies without a competitive process. This so-called single-source procurement typically accounts for about 45%—some £6 billion a year—of the total that the Ministry of Defence spends on defence equipment and support, and it is likely to remain at that level for the foreseeable future.

The MOD currently uses a framework for single-source procurement that has remained largely unchanged for the past 45 years. It is a system that is failing the taxpayer—neither does it help industry to remain competitive in an increasingly globalised world. It is therefore in the interests of both the MOD and its suppliers to create a framework with incentives to deliver efficient and competitive behaviour. Part 2, based on the 2011 report by Lord Currie of Marylebone, addresses this need. It sets out a new framework based on transparency, with more and better information on costs, stronger supplier efficiency incentives and stronger governance arrangements. At its core is the principle that industry gets a fair profit in exchange for providing the Ministry of Defence with transparency on cost and better value for money. To oversee that new framework, the Bill will create a small, non-departmental public body to be known as the single source regulations office with approximately 30 staff. That will replace the existing pricing review board. The SSRO’s role will be to keep the statutory framework under review and to monitor adherence to it. The new arrangements will operate routinely through agreement between the Ministry of Defence and industry, but where agreement cannot be reached, the SSRO will have the power to make binding determinations on both parties.

Finally, the third part of the Bill relates to our reserve forces. We have already had a long debate on many aspects of that this afternoon and, as has been made clear by everyone who spoke, the reserves already make an important contribution to military effectiveness. The White Paper of July makes it clear that we expect them to make an even greater contribution in the future. We need to update the legislation that supports the revitalised reserve forces and their contribution to defence. Part 3 remedies that situation.

The title of the White Paper published by my right hon. Friend the Secretary of State last July encapsulates the Government’s attitude towards the reserve forces, as they are both “valuable and valued”. The Bill reflects that and replaces the outdated title of the Territorial Army with the Army Reserve, which not only far more accurately describes the reserves’ current role, but is a change that reservists themselves have resoundingly called for.

The Bill also allows reservists to be mobilised for the breadth of tasks carried out by regular forces, which is not currently the case. It recognises the contribution that employers make in supporting our reserve forces, by providing an additional monthly payment, per reservist, to small and medium-sized enterprises when their reservist employees are mobilised.

Finally, the Bill contains a measure to ensure that reservists are not disadvantaged by their reserve service. Reserve service does not count towards the two-year qualifying period for claims of unfair dismissal. For claims where the reason for dismissal is, or is primarily because, the individual is a reservist, we will remove that two-year qualifying period.

In conclusion, the thread that runs throughout the Bill is the need to deliver the equipment and support that our armed forces need, while ensuring a fair deal for reservists, their employers, industry and the public. The Bill makes important changes to the way in which we might deliver defence capabilities in future and I commend it to the House.

18:42

[Mr Kevan Jones]

I thank the Under-Secretary of State for Defence, the hon. Member for Ludlow (Mr Dunne) for the constructive way in which he has engaged with the Opposition. We are not used to that—certainly not from the Secretary of State—on Bills or things to do with defence. The Committee as a whole gave a good and detailed examination of all aspects of the Bill. I accept that parts of it are still developing as we speak. Events this week have shown that with the withdrawal of one of the contractors for the proposed GoCo.

I thank my hon. Friend the Member for Plymouth, Moor View (Alison Seabeck) for her work on the Bill. I also add my best wishes as she should hopefully become a grandmother for the second time in the next few hours. May I also thank the members of the Committee, the Clerks and the witnesses who came before us? I thank, too, the Minister’s hard-working civil servants who, at times, had to think on their feet when replying to some of the points that were made. I thank them on behalf of the Committee for their work.

I do not think that there is any disagreement in the House that we want to ensure that we procure the best equipment and support for members of our armed forces. In the debate this afternoon, it has been recognised that we should thank the men and women of our armed forces for the contribution they make to our safety. We often take that for granted, but we should never do so because they put their lives at risk to ensure that we can sleep safely in our beds at night.

The first part of the Bill concerns defence procurement. The Government have put forward two options: a GoCo or DE&S-plus. It was clear in Committee and is still quite clear that there is a determination within the MOD that a GoCo should be the way forward—

[Mr Philip Hammond]

indicated dissent.

[Mr Jones]

I am sorry that the Secretary of State says that, but that was not the tenor of what we heard in Committee. Clearly, the withdrawal of one of the potential bidders has left serious questions about the future of the GoCo. We will certainly look closely at how the process goes forward.

[Mr Hammond]

For the sake of the record, I have said many times before in this House and say again today that we are open-minded about the choice between the GoCo and the DE&S-plus solution. We understand that the GoCo will bring certain advantages, but DE&S-plus might bring different advantages. We will weigh the two in the balance and select the solution that is in the best interests of the taxpayer and the armed forces.

[Mr Jones]

I am pleased to hear that, but I am also rather sceptical about what the Secretary of State says. Clearly, the emphasis in Committee and the mood music have been that the GoCo seems to be the main show in town, and there has been scant examination of what DE&S-plus will do. We must ensure that as the process goes ahead and the Bill goes to the other place proper scrutiny is maintained. Not only is this a major change to how we procure defence equipment in this country but it will have an impact on our relationships with international allies.

[Mr Dunne]

I agree with the hon. Gentleman’s final point: this clearly needs to be scrutinised properly. However, let me gently make the point to him that part 1 of the Bill inevitably focused on a GoCo rather than DE&S-plus because DE&S-plus does not need legislation whereas a GoCo does.

[Mr Jones]

I accept that point, but the mood music coming out of the MOD seems to be that there is a concentration on the GoCo. We will certainly wait and see how things develop.

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

We have been here before with such privatisations, but surely the concept of competition is stretched to absurdity when there is only one bidder. We risk demoralising the staff we employ at the moment; today, we did not even reach the part of the Bill that would have given them the assurances that are needed about their long-term employment prospects.

[Mr Jones]

My hon. Friend makes a very good point. As the process goes forward, there is obviously a lot of concern among people who work in defence procurement. It is important that things are brought to a conclusion so that they can have some reassurance. It will be interesting to see how the process goes ahead with just one bidder. We need to ensure that that is scrutinised in the other place, as I am sure it will be. I hope that the Minister will keep us informed in the House about that ongoing process.

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

One of the key concerns was that if a new provider was created to run the GoCo it would effectively be difficult for another provider ever to come in and take it on. Are not those concerns aggravated by the fact that we have only one bidder going through the process to start with?

[Mr Jones]

I thank my hon. Friend for that question and for his work in Committee. He raises an interesting point, as one of the concerns raised in Committee was what would happen after the nine-year process as regards renegotiating the contract. We will now have only one contractor who, if successful, will certainly be in pole position come the renegotiation at the end of the contract, whether or not any others are able to bid. We must consider those issues very carefully in the coming months as the process develops.

The other issues on which we spent a lot of time and about which there are still concerns are those on intellectual property and single-source procurement, about which we had numerous discussions in Committee. I think that industry still has concerns on those points. Part of the process is about not only reassuring the work force but ensuring confidence about working with the defence sector, because it is a major employer in this country. It is also important to ensure that we are at the leading edge of not only defence technology but security technology. Full involvement of the sector throughout the process will be very important. I think that the Bill will have an interesting passage through the other place.

We spent most of the afternoon on the reserves part of the Bill. I reiterate the point made by my hon. Friend the Member for Gedling (Vernon Coaker), the shadow Secretary of State: Labour Members—and Members generally—look with pride on the contribution that reservists make to our armed forces. I have seen them at first hand, in both Iraq and Afghanistan; they are very brave men and women, doing a fantastic job on our behalf.

On the process ahead, I welcome the Government’s slight change of heart on producing an annual report. May I say thank you to the Secretary of State for including mental health in that report? If he wishes for any assistance with the organisation involved, in terms of how it approaches that, I am quite willing to engage, or point him in the direction of other organisations that will be interested in knowing how mental health can be seen as a priority, because there is an issue, whether we like it or not, with reservists and mental health. I know that the Government have followed through on work that we did in government and have added to that, in terms of making sure that veterans’ mental health is seen as a priority.

On the overall position of reservists, after this afternoon’s debate, I would say that the jury was still out, but we did get some clarification from the Secretary of State on the reduction in the Regular Army. Remember, when the strategic defence and security review was first announced by the Prime Minister, there was to have been a reduction of 7,000; then the figure went down from 95,000 to 80,000. I think the Secretary of State was very candid this afternoon: that was about money, not about what was best for our armed forces.

[Mr Philip Hammond]

Or about spending it in different ways.

[Mr Jones]

Well, we can have a debate about that; the Secretary of State still bandies around the £38 billion figure. What he and many others seem to forget is that there was also the impact on the defence budget of the 9% decrease that this Government brought in as part of the SDSR.

On monitoring how the changes go forward, the hon. Member for Canterbury (Mr Brazier) has done a fantastic job. He has been an assiduous champion of reservists for many years. When we were in government, he worked closely with the then Secretary of State to try to improve the lot of reservists. He raises an interesting point about the issues between the regulars and the reserve forces. There has been, in some quarters of the Army, a view that somehow the reserves are second-best. It will be important to ensure that that is not the case going forward.

It was interesting to hear General Sir Peter Wall say that the proposals were the way forward. When we were in government, he was part of the senior command of the Army that recommended the £20 million cut for the reserve forces. It is important that senior officers in the Regular Army fully buy into the process, because that is how we will make sure that we have the joined-up approach that we require.

The Secretary of State has moved a lot this afternoon; he has gone from holding the position that we should not have annual reports to giving a commitment to them. However, we need parliamentary time, so that the report does not just sit on a shelf in the Library, but is debated on the Floor of the House. I tell him gently that the more engagement he has, not only with the Opposition, but with his party’s Back Benchers, the better, when it comes to making sure that the best intentions that we all have for our armed forces are realised.

The nonsense that we are still going through—we are being barred from speaking to senior officers, and barred from military bases—is not helpful. When I had a role in the Ministry of Defence, I took the view that the more engagement that parliamentarians, irrespective of political party, have with members of the armed forces, the better—and not only for MPs’ understanding; members of the armed forces also get a lot out of coming to understand how this place and politicians operate.

[Mr Hammond]

For the record, we have, as far as I am aware, arranged for the Opposition Front-Bench team and individual members of it to visit military bases.

[Mr Jones]

indicated dissent.

[Mr Hammond]

I am sure we have. If the hon. Gentleman wants to contact me—I have said this to the shadow Secretary of State—and let me know where they would like to go and when they would like to go, we will facilitate it.

[Mr Jones]

That is a very good change of heart. [Interruption.] It is a change of heart; that is not what has been going on over the past few years since the right hon. Gentleman has been Secretary of State. I know it is an issue that the Chairman of the Select Committee has raised as well. I take that at face value and we will test the system, as the Secretary of State has made the offer on the Floor of the House.

We will not press the motion to a vote—[Interruption.] The Minister is chuntering away. The shadow Secretary of State wrote to the chiefs of the armed forces, wanting to meet them, and I have here a note from this afternoon which says that the MOD just rang the shadow Secretary of State’s office to say that the pre-arranged meetings with several chiefs have been cancelled because there is a change in protocol and he must now arrange the meetings through the Secretary of State’s office. Under the old process, the request would be made and the Minister would sign it off at the end. I know that he is paranoid about leaks, and the process is not helping.

I conclude by wishing the Bill well when it goes to the other place.

18:56

[Mr Arbuthnot]

The focus of debate today has been on the reserves, but the issue of the withdrawal of one of the only two remaining bidding consortia from the competition to run the equipment procurement for the Minister of Defence is central to the defence procurement of this country, and I would like to ask the Under-Secretary of State for Defence, my hon. Friend the Member for Ludlow (Mr Dunne) to explain.

My right hon. Friend the Secretary of State intervened on the hon. Member for North Durham (Mr Jones) to say that the private sector bid will be weighed against the DE&S-plus bid, but I thought the review that my right hon. Friend announced yesterday was precisely into the question of whether that weighing-up would take place. I am not entirely sure that my right hon. Friend has got the Treasury and the Cabinet Office on his side on that point.

[Mr Dunne]

I will happily try to clarify the position to my right hon. Friend the Chairman of the Select Committee. There are two processes happening, one as a result of the single GoCo bidder. As was made very clear in the statement that my right hon. Friend laid before the House yesterday, that would require a further review across Government as to the validity of the competition. Secondly, we at the Ministry of Defence will be assessing the bid that we have on the table for a GoCo with the DE&S-plus proposal, when we have it, to see which provides the best solution for defence.

[Mr Arbuthnot]

I am grateful for that clarification. So when will my hon. Friend receive the DE&S-plus bid? It would be good if he knew exactly what that DE&S-plus bid was. Will it be days, weeks or months? It is an initiative forming within his own Department and it might be better that we all discover what it is sooner rather than later.

The Defence Committee has to take evidence on this fundamental shift in the circumstances surrounding the central plank of our country’s defence procurement. We need a clear time scale to know when we should take evidence, as Ministers need to realise. Scrutiny of what they do will be determined by the Select Committee and not by them.

Finally, to what do my right hon. Friend and my hon. Friend attribute the fact that they started with three private sector bidders and they are now down to one? What caused that?

18:59

[Martin Horwood]

In the time available, I would like to say that I think that the background to the Bill is both the challenge of deficit reduction and the greater challenge of a new military and security landscape, to which the Bill forms part of an imaginative and strategic Government response. Those challenges also bring opportunities, such as the opportunity for more efficient and cost-effective defence procurement. We on these Benches and our noble Friends in the House of Lords have raised some questions about the GoCo model, but I think that whichever model is eventually chosen will offer the opportunity to improve on the past history of defence procurement. The other opportunities are obviously those offered for reservists by the Bill, including a new name and status, new employment protections, the new possibility of paid leave—

19:00

Debate interrupted (Programme Order, 16 July).

The Deputy Speaker put forthwith the Question already proposed from the Chair (Standing Order No. 83E), That the Bill be now read the Third time.

Question agreed to.

Bill accordingly read the Third time and passed.

[Jim Shannon (Strangford) (DUP)]

On a point of order, Mr Deputy Speaker. In yesterday’s debate on women and the cost of living, I asked the Economic Secretary to the Treasury a question about the bonuses paid to men being double the size of those paid to women. I spoke to her in the Lobby tonight. Her reply yesterday was about pay, but my question was about bonuses. Is it right and proper for that to be clarified in Hansard tonight, and perhaps by the hon. Lady in person?

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

It is not a point of order, but it is certainly a point of clarification, which the hon. Gentleman has achieved.

Business without Debate

Wednesday 20th November 2013 Commons Chamber

Delegated Legislation

Motion made, and Question put forthwith (Standing Order No. 118(6)),

National Health Service

That the draft National Health Service (Approval of Licensing Criteria) Order 2013, which was laid before this House on 16 October, be approved.—(Anne Milton.)

Question agreed to.

St Raphael’s Hospice (Cheam)

Wednesday 20th November 2013 Commons Chamber

19:01

[Paul Burstow (Sutton and Cheam) (LD)]

The petition relates to the future of St Raphael’s hospice in my constituency, which is being put at risk by the actions of the trustees of the charity that owns it, the Daughters of the Cross. The threat to the hospice, which is much loved and respected, has led staff, volunteers and the families of people who have used it to collect more than 5,900 signatures on a petition calling on the Vatican to intervene. Next week the chair of the hospice’s advisory committee, Dr Ron McKeran, and I will meet the Pope’s representative in this country, the Papal Nuncio, Archbishop Mennini, to tell him about the petition and the more than 5,900 signatures collected from the public and urge him to use his good offices to secure a resolution to the dispute between the staff and volunteers and the charity.

The petition states:

The Petition of residents of the UK,

Declares that the future of St Raphael’s hospice has been put in doubt by plans drawn up by Daughters of the Cross, a charity that funds the hospice, and by plans to sell off St Anthony’s hospital, which shares the site with the hospice and provides administrative and other support services worth up to a million pounds a year; further, that the sale of the hospital will break the funding link with the hospice and undermine the Christian character of the institution; further, that the Petitioners regret that rather than engaging with the staff and supporters of the hospice and hospital to find a mutually agreed solution to the future of both institutions, the charity has pursued a course of action that is not widely supported; and further, that the Trustees have failed to grasp that the success and respect in which both institutions are held is the result of a shared endeavour between themselves, the staff and volunteers and the local community who raise and donate the funds to pay for them.

The Petitioners therefore request that the House of Commons thanks Her Majesty’s Government for raising the matter with the relevant authorities in the Vatican; further, that the House urges the Papal authorities to intervene to protect the ethos of St Anthony’s hospital and its special relationship with St Raphael’s hospice; and further, that the House holds a debate on the future of St Raphael’s hospice and possible ways forward.

And your Petitioners, as in duty bound, will ever pray.

[P001297]

DEFRA Office (Alnwick)

Wednesday 20th November 2013 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Anne Milton.)

19:03

[Sir Alan Beith (Berwick-upon-Tweed) (LD)]

I am glad to have the opportunity to raise a matter that is of great concern in Alnwick in my constituency, particularly as the Minister responding is the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for North Cornwall (Dan Rogerson), who knows a thing or two about the problems of rural areas, as he represents one himself. We have already met to discuss the problem, and he of course has come to it after all the key decisions have been taken, but I still hope that he will use his good offices to try to improve the situation for the staff at Alnwick.

Lion House, which has been rebuilt in recent years, has been in Alnwick since long before the first of my many years in this House. The reason we are considering this issue, which involves 40 jobs, is the Cabinet Office’s shared service centre initiative, which began in 2004 under the then Labour Government and was refashioned in 2011 by the present Government, and which has been subjected to severe criticism by the National Audit Office throughout for not delivering the savings it promised.

The office has a long history. About 30 years ago it ceased to be the regional office of the Department for Environment, Food and Rural Affairs, because the Department gave up its network of regional offices. I went to see the then Agriculture Minister, Peter Walker, who was the kind of Tory we do not see many of these days. He was extremely helpful. I suggested to him that he find other work for the office from the central work of the Department, and he did: library functions were transferred to Alnwick and in subsequent years the staff moved on to other work, in particular the handling of civil servants’ expenses. They could have given a lesson or two to the House authorities and the Independent Parliamentary Standards Authority on the efficiency with which they managed their operations. Indeed, I am going to suggest to IPSA that it might move its work from central London to DEFRA’s Alnwick office. I will come back to that. The staff earned a very good reputation, and not just in DEFRA—they provided a service to several Departments.

What is to happen? A company has been formed, 75% of which is owned by a French company called Steria and 25% by the Government. That immediately prompts the question: what do the Government intend to do with their ownership and board membership of the company? Will they use them to good effect?

My hon. Friend the Minister has indicated to me that the work is likely to remain at Alnwick for 20 months while the company considers how it will be handled in the future. That raises the question how likely it is that the work will be offshored, perhaps to India or who knows where. There are different views on the matter. The unions are fairly convinced that the work will be offshored and Steria seems to have a commitment to offshoring as a major part of its operation. Of course, there are other sites involved, not just Alnwick. The Cabinet Office’s position is that non-customer-facing jobs will be offshored. I am not sure what that means when we are talking about civil servants and their personal expense claims. I think that they are customers of the service, so in that respect it is a customer-facing service.

What does the period of 20 months really mean? I was concerned to receive a letter from my hon. Friend in which he wrote that the company would

“continue to occupy accommodation at Alnwick (Lion House)”.

Does that mean that the work will continue for 20 months or that the company will just pay the rent of an increasingly empty building—which is already a matter of concern—for 20 months? Some rather unhelpful phraseology has crept in.

The situation is very worrying for staff. Let us consider their position under TUPE and the transfer arrangements. The unions have negotiated an agreement that is referred to as TUPE-plus. There seems to be some acceptance that, as these things go, it is not a bad agreement, but I would be interested to hear my hon. Friend the Minister explain what will be available to staff. During or after the 20-month period, will some of them be offered other civil service posts? It has been suggested that they will, but the trouble is that many of the posts may be down in Tyneside or even much further away, perhaps over in Carlisle, where the Rural Payments Agency is situated. What did the Department’s equality impact assessment have to say about the situation and about people with caring responsibilities who cannot easily move? They do very good work in the Alnwick office, but they would not be able to continue to provide a good service to the Government if they were told that they had to move a long distance away. That raises a question about what the Department will do, if outsourcing goes ahead, to seek other work for its staff. It seems to me that if there is a period in which the new company reviews what it does, that period should be used to look for other work that could be done at the Alnwick office, as Peter Walker did 30 years ago.

After all, this is the Department for Environment, Food and Rural Affairs, and it exists to promote the health of rural communities, so it must not be in the business of relocating jobs from rural to urban areas. When change has to happen in particular functions, the natural response of the Department ought to be to see how far it can relocate work from urban to rural areas. Of the urban centres, I am thinking particularly about central London, where the Department still carries out activities that need to be considered for out-posting to its rural centres, of which Alnwick is one.

Other questions have been asked about the changes. The Public and Commercial Services union has asked about the tax status of the new company. The Minister for the Cabinet Office and Paymaster General said in a letter to me that the joint venture

“will promote UK growth as a UK based taxpayer”.

What assessment has been made of the overall tax impact, which obviously includes VAT, and the impact of any offshoring, as well as of the domicile in France of the majority owner of the new company, Steria, which is a French company? The union has also asked about the handling of civil servants’ personal data if there is outsourcing to a country that does not have the rigorous data protection regime of this country. Ministers must address that question.

I will sum up the questions that the Minister must answer, and if there are any that he cannot answer tonight, I hope that he will do so by letter. What use will the Government make of their 25% ownership? Will they use it to encourage keeping jobs local, where that is an efficient outcome? I do not expect the Department to do so if there will not be a good outcome and value for money for the taxpayer, but there is pretty good evidence that Alnwick provides good value for money. I want the Government to use their participation in the company structure to encourage sourcing jobs locally wherever possible.

How committed is the new company to outsourcing? I am meeting people from it shortly, and I will put the same question to them, but the Government must have formed a view. What will happen in the 20 months? Will the work stay at Alnwick during that period, or will the office be virtually emptied with the work leaving earlier? Will the office be viable for the small number of remaining staff if most jobs go? What will the company and the Department do to seek other work if the Alnwick office loses its current work to outsourcing, and will alternative public service jobs be offered? What is the equality impact assessment in respect of carers, especially women? What is the tax impact, and what is the situation in relation to personal data?

Above all, does DEFRA recognise that it is the Department for rural affairs and is supposed to be committed to that role? How is it going to demonstrate that commitment to the people of the Alnwick area? Forty jobs may not seem many in the London context, but they have a big impact in a small rural community such as Alnwick, where there are not many such professional jobs and where the quality of locally available staff has been clearly demonstrated.

19:13

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Dan Rogerson)]

I pay tribute to my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith) not just for how he is currently representing his constituents as regards the Alnwick office, but for how he has done so, as we have heard, over many years—going back to the era when Peter Walker was the Secretary of State. I am sure that they are very grateful for and well aware of all that he has done to support them.

My right hon. Friend has set out the issues from his perspective. I will set out the Government’s point of view on the office in Alnwick and its history. The building is owned by the Department on a freehold basis. There are three occupants: DEFRA, Northumberland county council and the newly created joint venture organisation that we have heard about, Shared Services Connected Ltd. I will take each of those in turn.

The DEFRA network has a large estate spanning England and Wales that supports the delivery of its business. That includes officers, operational depots and scientific sites. The cost of the estate has come down significantly since 2011. By 2015, the savings from exiting properties and reducing the amount of space that we use will reach about £53 million per annum. However, the annual cost will still be about £113 million. We will look for ways to reduce that further. In Alnwick, DEFRA occupies office space for about 24 full-time equivalent staff who are focused on the management of information and providing warehouse facilities for archiving. There are also two full-time equivalent members of staff from the Rural Payments Agency.

Northumberland county council occupies 2,000 square feet of the Alnwick site. That lease expires on 2 February 2017, although a mutual break is available with 12 months’ notice from February 2015. However, there is no indication that Northumberland county council is looking to vacate the site.

Stimulating economic growth is a top priority for the Government. We want rural areas to contribute to and benefit from that growth. As my right hon. Friend kindly pointed out, I represent a rural area, although it is perhaps not as far flung and widely set as his area. None the less, it is a rural area and it faces many similar challenges. The Government have introduced a wide range of policies and initiatives to promote business and deliver growth in urban and rural areas, including new infrastructure, raising skill levels and supporting business, particularly small and medium-sized enterprises, which make up a significant element of the rural economy, as my right hon. Friend knows.

The roll-out of superfast broadband infrastructure is vital to sustainable economic growth and the creation of jobs in rural areas. Online small businesses, whether rural or urban, grow four to eight times faster than their offline counterparts. The Government are investing £530 million in rural broadband up to 2015, which, through match funding, will result in up to £1.2 billion of public funds. The pace of progress is accelerating, with 42 of the 44 local projects contracted, including all of those in the south-west. Across the UK, 10,000 rural properties are being connected each week. As was announced in the spending review, a further £250 million will be available from 2015 to extend superfast broadband to 95% of UK premises by 2017.

I am setting out these policies to establish that the Government are very much committed to seeing rural areas share in the economic growth that we are delivering, in contrast to the position that we inherited.

[Sir Alan Beith]

I am pleased that my hon. Friend has responsibility for this area, not least because Northumberland is way ahead of the field in its work on rural broadband. However, if small businesses can operate from rural locations, so can the Department for Environment, Food and Rural Affairs.

[Dan Rogerson]

Absolutely, we can. I have set out the history of the office. As my right hon. Friend has pointed out, it has shown that it can be a very efficient place from which to operate. We want to get to the position where the new company recognises that. What is being delivered there must be so competitive that it is attractive on a continuing basis. We would welcome that, but it must be a matter for the new shared venture company.

We are taking other action to support the rural economy, including improving competitiveness and skills, investing in rural tourism, and supporting new micro-enterprises and those that have aspirations to grow. We have established five pilot rural growth networks, which aim to tackle the barriers to economic growth in rural areas, such as the shortage of work premises, slow internet connectivity, which I have mentioned, and fragmented business networks.

DEFRA’s rural development programme for England has, to date, invested more than £400 million in projects to grow the rural economy. Completed projects have created more than 8,500 new jobs and safeguarded a further 9,700. The next seven-year rural development programme is a major opportunity to continue to invest in rural growth and the environment. We are working together with interested groups to design a programme that makes a measurable contribution to improving the environment and economic growth, while providing real value for money. The civil service is moving to being faster, smaller and more unified, and sharing services is a central part of that. The next generation shared services strategy sets out a new model to share human resources, procurement, finance and payroll functions with five centres, instead of the current eight, to deliver more efficient and cost-effective services.

As my right hon. Friend pointed out, the Government signed an agreement on 1 November 2013 with Steria Ltd to create a joint venture partnership with Government. The new company, Shared Services Connected Ltd, has been formed initially from a consolidation of some existing shared service centres: the Department for Work and Pensions, DEFRA and the Environment Agency, with in-scope services from UK Shared Business Services Ltd expected to become part of SSCL by 2015. All DEFRA staff previously engaged in the delivery of shared services transferred to the new organisation from 1 November 2013. Services to existing customers are being maintained and delivered out of DEFRA offices in Alnwick and York.

The creation of SSCL is a key part of the civil service reform plan, which will harness industry best practice to deliver Government back-office functions more efficiently. Transforming back-office operations across Government could help to deliver between £400 million and £600 million in savings for the taxpayer, freeing up scarce resources to be better spent on front-line services. Economies of scale will enable Steria to drive down costs and improve service levels by sharing expertise across customers, adopting common processes and systems and investing in new tools. To be a competitive and viable business, SSCL needs to be in line with other companies of this kind, which see some non-customer-facing transactional roles being sourced offshore. As longer term transformation plans are agreed, SSCL will consult staff and representatives. Assistance will be provided to any affected staff, including reinstatement and redeployment opportunities.

Over time, the objective is to establish SSCL as the pre-eminent provider of shared services to UK central Government and the wider public sector. By migrating clients to a low-cost shared service model, it is estimated that total benefits delivered by SSCL will be in excess of £l billion. It is expected that in the course of the next couple of years there will be some site consolidation from the nine existing delivery sites, and we expect some staff reductions. Steria has made a number of commitments on behalf of SSCL, including: no compulsory redundancies in the first six months, an intent to minimise the need for compulsory redundancies through work force planning, and a series of redundancy avoidance measures during the transformation period. Steria has also agreed that any final decisions on location will not be made for six months. That will be a business-based decision. My right hon. Friend will be well aware that this is a key point. There will be a chance to demonstrate office efficiency, given the low cost of locating in the base, the ownership of the premises and so on, so there is a good case to be made to Steria for the Alnwick office. However, the decision will ultimately be based on what it aims to deliver to Government and the taxpayer.

With regard to shared services staff currently based in DEFRA’s Alnwick office, we have an agreement that SSCL will continue to occupy accommodation at Alnwick Lion House for a period of 20 months. That is an update on the minimum 12-month commitment that was previously communicated. That represents progress in the right direction, and my right hon. Friend’s efforts to focus attention on what has been achieved at Alnwick have played a part in that. The Department is well aware of what it has delivered over many years.

[Sir Alan Beith]

May I press my hon. Friend on the 20-month period? The phrase “occupy accommodation” is unpersuasive. I had understood him to anticipate that in the 20-month period the work would be likely to remain there, although that would not involve an absolute guarantee on the number of jobs that would remain during that period. Will he clarify that for me?

[Dan Rogerson]

I understand my right hon. Friend’s concern about that. He is right that, in a period of transition, members of staff might look to the future and decide whether to look for other opportunities, while others will stay on. The agreement is as described, which is to say that the accommodation will continue to be occupied. The company’s plans for carrying out the activity there is essentially a matter that he will have to take up with the company itself, but he has certainly put his concerns on the record tonight. I am happy to take those concerns back, so that we can get a little more clarity for him and his constituents about what that might mean.

My right hon. Friend asked what staff could expect. There is an expectation that other opportunities for staff will be put forward first, so that options for redeployment can be explored. I have a great deal of sympathy generally for his view about Government jobs in rural areas. The tax office in my constituency went during the last Government drive to narrow the HMRC estate, which was a matter of great sadness. As a Government, we need to ensure that we explore all the options for keeping jobs in rural areas. He was generous enough to point out that I am relatively new to my responsibilities, but I know that previous Ministers will have made the case for keeping as many jobs as possible in rural areas, and I am keen to do so too, alongside ensuring the private sector investment that we are stimulating in the ways that I have set out.

The company’s tax position is clearly not a matter for DEFRA, but my right hon. Friend asked that I seek further information for him, and I am happy to do so. He also made a fair point about how the Government will use their stake in the new organisation. Clearly we will want to ensure that lessons are learned and that the objectives of the original project to make efficiencies are met, but there might also be opportunities to ensure that the company takes into consideration some of the points he has raised this evening. Again, I can feed his concerns about that through to ministerial colleagues in the Cabinet Office.

The shape of what will happen at the office has not been decided—that is a matter for the new organisation to take forward. I welcome the fact that my right hon. Friend is in discussions with the company, which is a sensible way for him to proceed. I thank him for the diligent way in which he has pursued this matter. Having been in this role for about a month, I have heard from him on several occasions—through parliamentary questions, in discussions with officials and, now, on the Floor of the House. I know that he will continue to ensure that his constituents get the very best service as the transformation project moves forward.

I hope I have given my right hon. Friend a little reassurance that we recognise the huge achievements of people at the Alnwick office, who will be well placed to make the case for how efficient they have been in the duties they have discharged. The commitment to continue to occupy the accommodation in Alnwick for 20 months goes much further than the original 12 months. Some of the questions he has raised tonight will be considered during that period and the answers will come forward. I am happy to remain in contact with him about this matter, and in particular about the questions he has posed that I have been unable to answer without reference to ministerial colleagues.

Question put and agreed to.

19:28

House adjourned.