House of Commons

Monday 8th September 2014 Commons Chamber

Monday 8 September 2014

The House met at half-past Two o’clock

Prayers

Monday 8th September 2014 Commons Chamber

[Mr Speaker in the Chair]

Business before questions

Death of a member

[Mr Speaker]

It is with great sadness that I have to announce the sudden death of our colleague Jim Dobbin, Member of Parliament for Heywood and Middleton, while on a Council of Europe trip to Poland. Before being elected to the House in 1997, Jim worked as a microbiologist for 33 years. He was elected as a councillor to the metropolitan borough of Rochdale council in 1983, becoming group leader in 1994. Jim was an assiduous, independent-minded and principled parliamentarian who enjoyed respect on both sides of the House. He will be sadly missed. We send our condolences to Jim’s wife of 50 years, Pat, and their four children: Patrick, Barry, Mary and Kerry.

New Writ

Ordered,

That Mr Speaker do issue his Warrant to the Clerk of the Crown to make out a new Writ for the electing of a Member to serve in this present Parliament for the County constituency of Clacton, in the room of John Douglas Wilson Carswell, who since his election for the said County constituency has been appointed to the office of Steward or Bailiff of Her Majesty’s Manor of Northstead in the County of York.—(Michael Gove.)

Speaker’s Statement

Monday 8th September 2014 Commons Chamber

[Mr Speaker]

Following the third Division on Friday afternoon, in relation to the committal of the Affordable Homes Bill to a Select Committee, the Chair received a report from the hon. Member for Alyn and Deeside (Mark Tami) that the hon. Gentleman had been unable to vote as the Division Clerks and Tellers had left the Lobby. Having investigated the matter, I am content to direct the Clerk to correct the numbers voting in the Division accordingly. The Ayes were 236 and the Noes were 265.

Oral Answers to Questions

Monday 8th September 2014 Commons Chamber

The Secretary of State was asked—

[Jim Fitzpatrick (Poplar and Limehouse) (Lab)]

1. What progress has been made in negotiations to settle the fire service pensions dispute.

[The Parliamentary Under-Secretary of State for Communities and Local Government (Penny Mordaunt)]

Since taking office I have had several meetings with the Fire Brigades Union, the Retained Firefighters Union, the Fire Officers Association and the women’s committee of the FBU. Further meetings are in the diary. It is only through such discussions that we will bring the dispute to an end.

[Jim Fitzpatrick]

I welcome the Minister to her post, although I notice that she failed to answer the question—that is a great start to her ministerial career.

The Minister has made positive comments during her visits to fire stations throughout the country. The Government commissioned the Williams review on the impact of medical retirements for firefighters aged between 50 and 60, and especially the impact on women. Do the Government accept the need for minimum fitness standards?

[Penny Mordaunt]

There need to be minimum fitness standards. That is a priority for me, and it is key to bringing the dispute to an end, so we need to consider carefully how firefighters who wish to maintain operational roles can be appropriately supported to maintain their fitness standards. I have asked the chief fire and rescue adviser to chair a working group to examine these issues in detail, and I expect that group to meet later this month. I also requested, and have had, a meeting with the FBU women’s committee regarding its concerns about fitness.

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

As the number of fires has gone down, firefighters’ roles have changed. For example, Cheshire fire and rescue works with the Prince’s Trust to support young people into work, and it is fitting fire alarms in old people’s homes and working to reduce antisocial behaviour. Is it not right that as the role of firefighters expands, we look at their terms and conditions to ensure that there are the right skills in fire services so that they can move forward?

[Penny Mordaunt]

My hon. Friend is absolutely right. Some of the best ideas for developing roles in the fire service have come from firefighters themselves, and they are at the head of the queue of people who want to remove the obstacles to change and reform. I am pleased that the review has already received a very large number of replies to the consultation, and some great ideas have emerged from that.

[Kate Hoey (Vauxhall) (Lab)]

I welcome the Minister to her position. I hope that she will bring a bit of common sense and rationality to this long dispute over pensions, but does she not agree that morale is very low among all those working in fire and rescue services across the country, not just because of pensions, but because of the age issue that has already been mentioned and the reductions in numbers in front-line fire services? We have to recognise that there is support for these men and women across the country.

[Penny Mordaunt]

I thank the hon. Lady for her warm welcome. I take issue with her claim that morale is low. I have made going out and seeing firefighters and chiefs a priority in the short time I have been in office—in fact, just this weekend, I was up with the west midlands service. I asked them about morale and was told that morale is good. Clearly, everyone will benefit from the dispute being brought to a close, but actually morale is good and we need to keep it good, to keep firefighters engaged with the reforms the service needs.

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

I welcome the Minister to her place and thank her for visiting my constituency on Saturday. We had what I think were constructive discussions with local firefighters, as well as celebrating the launch of the Haden Cross community fire station. Does she agree that the new fire station is a splendid example of a station that will serve the people of Halesowen and Rowley Regis and allow firefighters to do an effective job for my community?

[Penny Mordaunt]

I was pleased to be part of that wonderful community event. It is a fantastic new facility, not just supplying state-of-the-art services to the fire and rescue services and as a base for other blue light services, but available for use by the local community as well. I had a wonderful day and I look forward very much to going back and doing more with that fire service.

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

Mr Speaker, I am sure the whole House echoes your sentiments about our colleague, Jim Dobbin.

I too welcome the Minister to her post. The Government’s dispute with firefighters has now been ongoing for 1,091 days and there have been 31 strikes. Can she explain why her predecessor and colleague failed to bring the dispute to an end and what she will now do differently?

[Penny Mordaunt]

I thank the hon. Gentleman for his words of welcome. Resolving the dispute is a key priority for the Government. I have some advantages that my predecessor did not have: when he entered office, we did not have the Williams report, the Knight review and other such reports that enable me and others to make evidence-based judgments. Everyone wants the dispute to be resolved. We are now in a position to have constructive talks, and we have been doing so with the FBU; and we have further meetings in the diary—we meet next after the trades union conference. I am optimistic that the dispute will be resolved soon.

[Pat Glass (North West Durham) (Lab)]

2. What steps he is taking to improve stability and affordability in the private rented sector.

[The Minister of State, Department for Communities and Local Government (Brandon Lewis)]

We will soon publish a model tenancy agreement to encourage longer tenancies. Our £1 billion Build to Rent fund will deliver up to 10,000 new homes for private rent, and our housing guarantee schemes will attract long-term investors into the market, which in itself will increase choice, quality and stability for renters.

[Pat Glass]

I thank the Minister for his answer, but the fact remains that we are building fewer than half the homes we need in this country, and the combination of that and rising private sector rents is putting home ownership out of reach for many families. Is the Minister content that under his Government the dream of home ownership will be out of reach of millions of families in this country?

[Brandon Lewis]

I am slightly surprised by the hon. Lady’s question, given that under the previous Administration the number of affordable rental homes fell by 420,000 and under this Government, since 2010, we have got about 480,000 new homes built. To be clear, and contradicting something she said, average rents are down in real terms year on year under this Government.

[Mark Pawsey (Rugby) (Con)]

Does the Minister agree that the way to improve stability and affordability in the private rented sector is for local authorities to make more land available for housing? That is happening in my constituency, where we are delivering new housing at double the rate seen in the country as a whole.

[Brandon Lewis]

My hon. Friend is absolutely right. The affordable homes programme is on track to deliver 170,000 new affordable homes between 2011 and 2015. It is important that we keep on top of that and keep moving forward with the new homes that we need.

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

May I draw attention to my interests as declared in the register? In its consultation earlier this year on the future of the private rented sector, the Minister’s Department proposed the possibility of extending a requirement to have working smoke alarms fitted in all private rented units. I understand that there has been overwhelming support for that in the response to the consultation, and I would welcome an indication from the Minister as to when the Government intend to act on this recommendation.

[Brandon Lewis]

As soon as we are ready to respond to that consultation, the right hon. Gentleman will be among the first to know.

[Jeremy Corbyn (Islington North) (Lab)]

Will the Minister cast his mind over the problems that are faced by people living in the private rented sector in London? It is unaffordable for anyone on average or below-average income, and those on benefits can no longer remain within the communities that they have lived in for many years. Does he accept that it is time for full regulation of the private rented sector and for a limitation on the levels of rent that can be charged so that we can maintain the diversity and cohesion of communities all over the capital city?

[Brandon Lewis]

The hon. Gentleman makes an interesting point. However, affordable housing starts in 2013-14 show an increase on the previous year, with a large percentage of them being in London. I remind him of what I said a few moments ago: under this Government average rents are down in real terms year on year, not just elsewhere in England but in London. It has been clear from the suggestions by Labour Members that the idea of short-term gimmicks such as rent controls are simply something from the past.

[Christopher Pincher (Tamworth) (Con)]

3. What steps he is taking to (a) encourage development on brownfield land and (b) bring empty buildings back into use.

[The Parliamentary Under-Secretary of State for Communities and Local Government (Stephen Williams)]

In June we announced a new £400 million package to encourage development on brownfield land which we estimate could provide up to 200,000 new homes by 2020. We have extended permitted development to give new life to thousands of empty buildings. The number of empty homes is now the lowest since records began a decade ago.

[Christopher Pincher]

I am encouraged by that answer. Tamworth council has relatively few publicly held brownfield sites, but it is working innovatively with the private sector to redevelop our town centre with a mix of leisure, retail and accommodation property to keep it vibrant. What further support can Ministers give to local authorities with relatively few brownfield properties to encourage private owners to make better use of their assets?

[Stephen Williams]

I have indeed visited Tamworth, which already has a very handsome town centre with a statue of Peel that I went to visit. I suggest that my hon. Friend’s friends in the local authority look at the empty homes programme. I understand that, as of October last year, Tamworth has 579 empty homes, of which about 150 have been empty long term. If the council were able to work with the owners to bring just a third of those properties back into use, there would not only be new homes for people but a substantial new homes bonus of about £350,000 for Tamworth council.

[Mr Clive Betts (Sheffield South East) (Lab)]

In its current inquiry into the national planning policy framework, the Communities and Local Government Committee has had dozens of complaints from local residents about local councils having to find more greenfield sites to build on because brownfield sites cannot be included in their local plans as they are deemed not to be viable. At the same time, more and more applications are being considered under the presumption in favour of sustainable developments and are being approved for building on greenfield sites. Given that the vast majority of those complaints come from the constituencies of Government Members, what is the Minister going to do to address them?

[Stephen Williams]

It is up to local communities to work with their local councils and, indeed, their local constituency MPs to see what is most appropriate for each area. It is a mistake to make pronouncements from the Dispatch Box about particular circumstances in particular areas, but if the hon. Gentleman has a specific example he wants to put to me, I am sure we will be able to take it up.

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

At the risk of testing your sense of order, Mr Speaker, would you allow me to place on record our, as Members of the Parliamentary Assembly of the Council of Europe, sadness at the death of Jim Dobbin? He was a true Christian and a true gentleman, and we shall all miss him. Our thoughts are with Pat.

I applaud the Government’s efforts to bring brownfield sites back into use, but deplore the equal efforts by Mrs Ann Gloag to reduce a perfectly serviceable airport, Manston in Kent, to a brownfield site, with a view, presumably, to gaining Government assistance. Will the Minister join the Prime Minister in recognising the importance of Manston as a national asset and applaud the efforts of Thanet council, on a cross-party basis, to seek to bring it back into use as an airport?

[Stephen Williams]

I hear what my hon. Friend says and I heard what the Prime Minister said. He was obviously better briefed on Manston airport than I am, so I simply commend to my hon. Friend the Prime Minister’s words in answer to his previous question.

[Roberta Blackman-Woods (City of Durham) (Lab)]

Last week the Minister of State, Department for Communities and Local Government, the hon. Member for Great Yarmouth (Brandon Lewis), who has responsibility for housing and planning, was clear in rejecting urban extensions, yet under his Government brownfield development has fallen from 70% under Labour to just 53% now. As his new proposals to support brownfield development will help only about a third of councils, where do the Government think the new houses will go?

[Stephen Williams]

We have announced a £400 million fund for local authorities to bid to create new housing zones, with 20 in London and 10 around the country. With the additional money the Mayor of London is putting in, that is a £600 million investment. We will also publish a consultation next month on further measures to get planning permissions on brownfield sites, and we are working with local authorities to produce a support package, available from next March, to further encourage the use of brownfield land. There is, therefore, a lot of activity taking place in this area.

[Mr David Nuttall (Bury North) (Con)]

4. How many shops in Bury North constituency have benefited from the reduction in business rates.

[Stephen McPartland (Stevenage) (Con)]

5. How many shops in (a) England and (b) Stevenage constituency have benefited from the reduction in business rates.

[Chloe Smith (Norwich North) (Con)]

6. How many shops in (a) England, (b) Norwich local authority area and (c) Broadland local authority area have benefited from the reduction in business rates.

[Margot James (Stourbridge) (Con)]

10. How many shops in (a) England and (b) Stourbridge constituency have benefited from the reduction in business rates.

[The Parliamentary Under-Secretary of State for Communities and Local Government (Kris Hopkins)]

We are providing £1 billion for the business rates support package, including a £1,000 discount for smaller shops, businesses and restaurants. We estimate that about 300,000 retail premises will benefit from this discount in England, including more than 1,000 retail premises in Bury; nearly 400 retail premises in Stevenage; more than 800 in East Hertfordshire and 600 in North Hertfordshire; more than 1,000 retail premises in Norwich and 300 in Broadland; and 1,000 retail premises in Dudley.

[Mr Nuttall]

I thank the Minister for that reply. Does he agree that the business rate relief, together with the new employment allowance, makes a vital contribution to maintaining the viability of parades of small shops such as those on Mile lane in my constituency?

[Kris Hopkins]

It is important to recognise that the Department is playing a role, as are the rest of Government, to get business going, to make sure that communities can stand on their own feet and to support very small businesses. That is why a £1,000 discount this year and next year will help those businesses.

[Stephen McPartland]

I am delighted that the Minister has given local authorities the power to review and reduce business rates locally. I have teamed up with a local accountancy firm in Stevenage to launch a campaign to help businesses to do just that. Will the Minister support that campaign, and does he agree it is ridiculous that many small businesses in my constituency pay more in business rates to Stevenage borough council than they do in rents to their landlords?

[Kris Hopkins]

I know that my hon. Friend is absolutely passionate about supporting people in Stevenage and that he is ruthless in pursuit of the Labour council, which yet again has failed local businesses. I am sure we can offer our support to his campaign and those businesses.

[Chloe Smith]

This tax cut for small shops, pubs, cafés and restaurants is already getting real help to hundreds of businesses in my constituency, and I think it is sad—perhaps the Minister agrees with me—that no Opposition Members rise to support it. Would the Minister like to give a message to Dixie’s café in my constituency—a regular pit stop for hungry Conservative canvassers—about the bill change that it already welcomes?

[Kris Hopkins]

As my hon. Friend observes, and as many of us have seen, the Labour party is not business-friendly, unlike those campaigners who are supporting Dixie’s café and are out seeking to secure a Conservative majority while buying coffee and bacon sandwiches from what I am sure is a fantastic local shop.

[Margot James]

Lower business rates are undoubtedly a factor in the recovery of high streets in my constituency of Stourbridge. Will my hon. Friend update the House on how many shops have benefited from the additional discretionary and hardship rate relief powers made available to local authorities by the Localism Act 2011?

[Kris Hopkins]

Unfortunately, I cannot give my hon. Friend those details, because we do not record them. We should, however, recognise that this £1 billion package is part of the Government’s response to ensure that we have more businesses and more jobs. The £1,000 discount for local businesses this year and next year has had the successful impact of bringing 1.8 million people into employment, and that is a direct consequence of this Government’s intervention.

[Mike Kane (Wythenshawe and Sale East) (Lab)]

7. What steps he is taking to increase the building of affordable homes.

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

13. What steps he is taking to increase the building of affordable homes.

[The Minister of State, Department for Communities and Local Government (Brandon Lewis)]

Almost 200,000 affordable homes have been delivered since 2010. A further £23 billion of investment will deliver 165,000 affordable homes between 2015 and 2018. This will be the fastest rate of affordable house building for the past 20 years.

[Mike Kane]

As someone born and raised in an affordable home, I know the value of such homes. I also know that not enough units are coming on stream in my constituency at the moment. This Government have presided over the lowest build of new affordable homes in peacetime since the 1920s. Does the Minister regret slashing the budget by 60% on coming into government?

[Brandon Lewis]

I respectfully point out to the hon. Gentleman that we actually inherited the lowest level of house building since the 1920s from the previous Government. In fact, as I have just said, we are about to get the fastest rate of building in the past 20 years. Just to be specific, in his home area of Greater Manchester alone, 5,724 new affordable homes will be delivered as a result of this Government’s investment in this period’s affordable homes programme.

[Meg Hillier]

The Minister has been keen to bombard us with statistics and to blame anybody but this Government, but it is they who have set affordable rents at 80% of private sector rents. In areas such as Hackney, that means that such rents are not affordable to the average, ordinary working person, while it also puts pressure on the housing benefit bill. When will the Government rethink this crazy and unfair policy?

[Brandon Lewis]

To an extent, I am having to apologise for the previous Labour Administration’s failure to deliver the sufficient number of council houses that we need. It is good to see that, under this Government, building is getting going again.

[Mr Mark Prisk (Hertford and Stortford) (Con)]

Despite the awful inheritance that the Minister has had to deal with, the truth at the moment is that the public sector is continuing to hoard surplus land and buildings. May I urge Ministers to look at ripping up the financial rules of Government, ensuring that we penalise the hoarding of public sector land and buildings and incentivise Whitehall and town halls to get such assets turned into real affordable homes?

[Brandon Lewis]

My hon. Friend makes a very good point. I know that one thing he previously worked on, and I am now working on, is to make sure that we can go forward and deliver the land, as we are doing, to deliver the houses that we so badly need in this country.

[Annette Brooke (Mid Dorset and North Poole) (LD)]

In an area with a very recently adopted core strategy that, because of the current severe shortage and a backlog of many years, requires 50% affordable housing, what advice would the Minister give planning officers determining new applications should there be requests for deviations from that requirement?

[Brandon Lewis]

I would say to the right hon. Lady that planning decisions are obviously matters for the local authority, and it would be wrong for me to comment on the core strategy of a particular area. However, if she wants to come and see me, I will be happy to go through any queries she has.

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

I welcome the Minister to his new position. According to his Department’s own forecasts, housing starts are due to fall in this financial year. His predecessor admitted that that was due to an expected hiatus between the current affordable homes programme and the next one. Will the Minister explain what steps he is taking to avoid this? Does he think that there will be such a hiatus in 2015?

[Brandon Lewis]

No, I do not. The more than 41,000 affordable housing starts in 2013-14 is an increase of 15% on the previous year.

[Emma Reynolds]

Regrettably, the truth is that the Government have undermined affordable housing, not promoted it. With the 60% cut to the affordable homes programme, the watering down of section 106 agreements, and the hated and discredited bedroom tax, will the Minister now admit that for all Ministers’ talk on affordable homes—we have heard the same today—the number of homes built for social rent has dropped to a 20-year low and that simply changing Ministers will not overcome this Government’s failed housing policies?

[Brandon Lewis]

I am slightly astounded that such a question has been put by the hon. Lady, who represents a party that oversaw a drop in the number of affordable rental homes of 420,000 between 1997 and 2010. Under this Government, house building has got going again. We need to keep on top of that to deliver the houses we need, and we are looking at an increase of 170,000 in this period alone.

[Michael Fabricant (Lichfield) (Con)]

8. What steps his Department is taking to support community pubs; and if he will make a statement.

[The Parliamentary Under-Secretary of State for Communities and Local Government (Kris Hopkins)]

In the autumn statement, we announced a £1 billion package of business rate support, which included a £1,000 discount for shops, pubs and restaurants with rateable values below £50,000. That could benefit three in four pubs. We are also providing funding to help communities diversify their pubs, and pubs can be saved through the community right to bid.

[Michael Fabricant]

There are many reasons why pubs are closing: people do not want to drink and drive; some people do not go to pubs because of the smoking ban, although I support that; and people buy low-cost alcohol from supermarkets. Is my hon. Friend aware that one problem is the pubcos that charge high rents? How will the new statutory code help?

[Kris Hopkins]

I reassure my hon. Friend that tied tenants will be able to report breaches in the statutory code to a new independent adjudicator, who will be able to arbitrate and bring penalties against individuals or organisations that fail to act appropriately.

[Grahame M. Morris (Easington) (Lab)]

15. In August 2011, the Government consulted on ending the use of restrictive covenants by pub companies to prevent new owners from reopening valued pubs. Three years on, the Government are yet to announce the outcome of the consultation. Will the Minister commit to ending the disgraceful practice of using restrictive covenants to prevent closed pubs from being reopened?

[Kris Hopkins]

The Government pledged to release the consultation relating to covenants by the end of this year. I hope to release the information in the coming weeks.

[Ian Austin (Dudley North) (Lab)]

The popular, successful and profitable Seven Stars pub in Sedgley in my constituency is threatened with closure because Marston’s and Morrisons are discussing turning it into a supermarket. Does the Minister agree that those companies ought to accept my invitation to meet residents who are concerned not just about the loss of the pub, but about the impact on traffic, parking and businesses in the nearby town centre? Is it possible to introduce tougher rules, so that planning permission is always required before a pub is demolished or closed?

[Kris Hopkins]

I think that the businesses concerned should meet local residents—that dialogue is absolutely appropriate. The Government have given powers to councils under article 4 and the community right to bid mechanism. If communities have treasured assets that they want to be recognised as community assets, they can register them with the local council and give them some protection. I welcome the hon. Gentleman’s participation and the dialogue that he is having with local business.

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

9. What assessment his Department has made of the effect of changes to right to buy on the viability of maintaining and increasing the stock of social housing in England.

[The Minister of State, Department for Communities and Local Government (Brandon Lewis)]

In 2013, social housing stock topped the 4 million mark for the first time since 2004. In the first year following the reinvigoration of the right-to-buy scheme, there were almost 6,000 council right-to-buy sales. In the same period, affordable rented stock increased by 20,000.

[Tim Farron]

In South Lakeland in my constituency, of the 7,500 council homes, only 3,000 remain, and there is a council house waiting list of 3,500 individuals. That must be set against the backdrop of local house prices being 12 times average local wages. Does the Minister agree that, in the spirit of localism, it would be right to do as the Scottish Parliament has done and allow local authorities the right to suspend right to buy in those places where it is having the worst impact?

[Brandon Lewis]

I do not entirely agree. I believe that people who aspire to own their own home should have the opportunity to do so if they can afford it, because it allows them to have the pride of ownership not just in their home, but in their street and their neighbourhood.

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

It is sad not to have Jim Dobbin jumping up and down today, as he usually did in this House. He was a man of courage. He would have joined me in saying that we need courage in facing the lack of good social housing. I have always been in favour of the right to buy, as long as the homes are superseded by more social housing. Is it not true that some Government some time must have the courage to say, “We will not meet housing need in this country—social or private—until we build on some of our green belt”?

[Brandon Lewis]

I agree with some of what the hon. Gentleman said, but I do not think that we need to go down the line of his final few comments. From April 2012 to June 2014, almost 3,700 homes have been started on site or acquired with the £514 million that has been generated by additional sales through the reinvigorated right to buy. The additional receipts that are raised by local authority right-to-buy sales are now used directly to fund homes for affordable rent, thanks to the changes that the Government have made.

[Robert Halfon (Harlow) (Con)]

Is my hon. Friend aware that under this Government an astonishing 437% more people in Harlow have bought houses under the right to buy? Is that not an example of a housing policy that helps lower earners and gives people the ladder of aspiration?

[Brandon Lewis]

My hon. Friend is absolutely right. The Government have stood firm behind this clear policy to give people the chance to aspire to move on, own their own home, and play an important part in developing that home in their community for the future.

[Fiona Mactaggart (Slough) (Lab)]

For the avoidance of doubt, will the Minister tell the House what is affordable in London and the south-east? What is the capital cost and what is the rent?

[Brandon Lewis]

I will write to the hon. Lady with that information.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

11. What assessment he has made of the adequacy of the discretion given to local authority officers in the national planning policy framework.

[The Minister of State, Department for Communities and Local Government (Brandon Lewis)]

Our planning reforms and locally led planning system have given more discretion to local authorities—to members, and through them, to local communities—especially when preparing local plans that identify where development should and should not go. Wherever possible we want local authorities to make decisions about their local areas.

[Chi Onwurah]

On Friday, following a concerted campaign by local residents, Newcastle city council exercised that discretion and rejected an application recommended by officers to site a two-storey McDonald’s drive-through opposite the city’s largest school at the northern gateway to our city. Does the Minister agree that the spirit of localism is best served by McDonald’s respecting democracy and not appealing?

[Brandon Lewis]

The hon. Lady will appreciate that I cannot comment on a particular planning application, but she is right to say that local democracy means that local decisions should be made by local members of local council authorities.

[Charlie Elphicke (Dover) (Con)]

Will the Minister confirm that the national planning policy framework has provisions that protect the green belt from developers and people like the hon. Member for Huddersfield (Mr Sheerman) who would like to build all over it?

[Brandon Lewis]

My hon. Friend is right, and I intend soon to issue additional guidance to reiterate the protection that the national planning policy framework provides to the green belt and other designated areas. That will make it clear that local planners should seek to meet their objectively assessed needs, unless there are specific environmental and other policies in the framework—such as those on the green belt—which indicate that development should be restricted.

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

What guidance or instructions has the Minister given to local authorities to protect the green belt?

[Brandon Lewis]

I refer the hon. Gentleman to the answer I just gave. The NPPF gives clear protection and priority to the green belt, and I encourage local authorities to respect that.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

The Secretary of State has said that only in the most exceptional cases will fracking be allowed in national parks. Will my hon. Friend say what those exceptional circumstances will be, and that the precautionary principle will normally prevail for fracking?

[Brandon Lewis]

Any planning application must be decided on its own merits. That means that things will change from application to application, based on the merits of each individual case.

[John Mann (Bassetlaw) (Lab)]

12. What recent assessment he has made of local enterprise partnership boundaries.

[The Parliamentary Under-Secretary of State for Communities and Local Government (Penny Mordaunt)]

There has been no recent assessment of local enterprise partnership boundaries. Through growth deals, the Government invited local enterprise partnerships to submit proposals to revise those boundaries, but none did.

[John Mann]

Some areas such as Bassetlaw are in two LEP areas. Will the good people of Bassetlaw be given the choice which local enterprise area they go in, or will it be a central Government decision?

[Penny Mordaunt]

We have been clear that those decisions must be locally driven. The Government are happy to consider such requests, and we are currently considering the results of a consultation on the rules surrounding the creation of combined authorities. It must be a locally driven ask, and in the hon. Gentleman’s case it is vital that both combined local authorities work together and not centrifugally. That will provide the best backdrop to spending £300 million—soon to rise to £550 million—of local growth funding for the hon. Gentleman’s area.

[Mr Philip Hollobone (Kettering) (Con)]

The borough of Kettering is in two LEPs—the Northamptonshire LEP and the South East Midlands LEP—and Kettering borough council is happy to be in both. Will the Minister confirm that no pressure should be applied by larger local authorities to force smaller ones to choose between two LEPs?

[Penny Mordaunt]

My hon. Friend is right. It is important that people choose locally how to organise themselves. There would be no support for pressure to get smaller authorities to change how they operate.

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

Greater Manchester is a case in point. The city region and the LEP boundaries are coterminous, which is working well, but there is a democratic deficit. What more will the Government do to address that problem, so that local populations have buy-in to the economic regeneration plans for the city region?

[Penny Mordaunt]

We are providing support, as are other organisations, such as, most recently, the Federation of Small Businesses, to help LEPs to develop and to have better representation on their boards. The Manchester LEP is doing extremely well—we need to do more to encourage it to allocate its growth funding to projects, but it is doing well. Further support, both from the Government and from third-party organisations, is being provided to develop democratic structures.

[Dr Sarah Wollaston (Totnes) (Con)]

16. What his policy is on whether planning inspectors at appeal or local authority planning committees should determine what constitutes cumulative impact on the landscape from large-scale solar arrays.

[The Parliamentary Under-Secretary of State for Communities and Local Government (Kris Hopkins)]

I know from recent correspondence of my hon. Friend’s concerns about large-scale solar arrays. Although I cannot comment on particular cases, I can assure you that the same expectations on deciding planning applications apply to inspectors and local councils.

[Mr Speaker]

Order. May I invite the Minister to remember the merits of the third person, of which I am sure he is very conscious?

[Dr Wollaston]

I thank the Minister for his reply. He will know that local residents and South Hams district councillors were very disappointed that he did not haul in the application for another 58 acres of solar arrays near Diptford. That is the fourth large-scale development within a three-mile radius of a tiny community in my constituency. He will also know that district councillors are under great pressure to accept such applications, because when they turn them down, as they did in Kingsbridge recently, the applications are overturned on appeal, with punitive costs. Will the Minister reassure me, and meet me to discuss how the situation can be resolved?

[Kris Hopkins]

I am more than willing to meet my hon. Friend. I cannot comment on individual cases, but I should emphasise that the solution to giving confidence to a local council about the decisions it makes, and to the community, is to have a secure local plan, under which people clearly determine what they want to be built in their area. At the moment, the plan that covers the area where the hon. Lady works and lives is not appropriate and does not give that security.

[Mr Stewart Jackson (Peterborough) (Con)]

Peterborough city council is misguidedly pursuing a solar energy park to the east of the city, around the villages of Thorney and Newborough, which will involve 500,000 glass panels on an area the size of 700 football pitches. Do we need to consider the use of more robust language in the strategic planning framework to ensure that such proposals to build on prime agricultural land are not pursued in future?

[Kris Hopkins]

There is clear guidance on building on agricultural land and a preference to build on brownfield. I cannot comment on the case that my hon. Friend raises, but I am sure that his robust position will be heard by the local council.

[Duncan Hames (Chippenham) (LD)]

Wiltshire council recently permitted a well-sited solar project—it was behind an industrial estate, next to a sewage works on the outskirts of Trowbridge—yet Broughton Gifford, a small village, has had a number of applications for several different arrays in its vicinity, despite the presence of National Trust buildings and English Heritage listed buildings. Is the Minister confident that the protections that we give our heritage assets are appropriately recognised in respect of such proposals?

[Kris Hopkins]

As I have said in answer to previous questions, there is clear guidance on what is appropriate and inappropriate. It is absolutely appropriate for individual local authorities to get a secure local plan that determines the shape and use of renewable energy sources.

[Justin Tomlinson (North Swindon) (Con)]

17. What assessment he has made of the extent of take-up of the Help to Buy scheme in (a) England and (b) Swindon.

[The Secretary of State for Communities and Local Government (Mr Eric Pickles)]

More than 50,000 families have already purchased a home in England with the support of Help to Buy since March 2012, helping them to achieve their ambition of owning their own home. In Swindon, 430 families have bought through Help to Buy.

[Justin Tomlinson]

Government-backed schemes have helped 430 hard-working families in Swindon get on the housing ladder. Will the Secretary of State comment on whether the scheme has been successful in Wales under the Labour Administration there?

[Mr Pickles]

It has not been as successful in Wales, because Labour rather botched its introduction of Help to Buy. I was recently in Mid Bedfordshire looking at some houses on a Barratt Homes development, and I was surprised to find that all the brickies came from Wales. The explanation was that because of the decline of house building in Wales, ambitious brickies are coming to England for work.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

Help to Buy is strengthening demand for housing, but if that is not met by an increase in supply, it will simply end in higher prices. What is the Secretary of State doing to increase supply, which we know is at one of the lowest levels in recorded history?

[Mr Pickles]

I think we have made quite a lot of progress. As the hon. Gentleman admits, we inherited the lowest level of house building at any time since the 1920s. The current figures for the amount of house building taking place are more than encouraging—it is quite a success, and I think he will be pleased when the latest figures are released.

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

18. What steps his Department is taking to support coastal communities.

[The Parliamentary Under-Secretary of State for Communities and Local Government (Penny Mordaunt)]

Having been appointed the first ever Minister with responsibility for coastal communities, I can reassure my hon. Friend that we are committed to coastal areas. Since 2012, we have provided more than £62 million through the coastal communities fund to deliver more than 8,500 jobs, 3,000 training places and 400 new business start-ups, helping to make our coastal towns better places to live, work and visit.

[Eric Ollerenshaw]

I congratulate the Minister on that new position and wish her well.

In Fleetwood, Wyre borough council has a long-term economic plan to develop and expand the fish processing industry. Will the Minister and her officials meet me and representatives of the council so that we can pursue that project further?

[Penny Mordaunt]

I congratulate my hon. Friend, who is a champion of that industry and what it will bring to his constituency. He has successfully campaigned both on fisheries reform and for CCF funding, which will improve the Fleetwood coastline. I would be happy to meet him about the issue that he raises and the hoped-for improvements to St George’s quay.

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

T1. If he will make a statement on his departmental responsibilities.

[The Secretary of State for Communities and Local Government (Mr Eric Pickles)]

May I join you, Mr Speaker, and Opposition Members in expressing my sadness at the death of Jim Dobbin? As you rightly said, he had a very distinguished career in the health service before becoming a Member of Parliament, which demonstrates what someone of a more mature age coming into this place for the first time can give us. He was a charming man and always very courteous, and Government Members will miss him deeply.

I am sure the whole House would like to congratulate the Duke and Duchess of Cambridge on the wonderful news this morning that they are expecting a second child. We wish them well.

My Department is announcing the first wave of funding for the builders finance fund, which will help to kick-start the building of 13,000 homes on 160 small sites across England that stalled because of Labour’s housing crash. Thanks to our long-term economic plan, housing construction is up and Britain is building again.

[Mr Gray]

Jim Dobbin was indeed one of the nicest and kindest men in Parliament, and we will miss him greatly.

The Secretary of State for Energy and Climate Change has made it plain, both in letters to local authorities and by withdrawing the subsidy, that large and industrial-scale solar farms like those discussed earlier are simply not acceptable on greenfield agricultural sites. However, planning regulations do not so far reflect the robustness of the Department of Energy and Climate Change’s determination. Will the Secretary of State either write to local authorities or change the planning regulations so that the Planning Inspectorate and local authorities will take account of what DECC is saying on the subject?

[Mr Pickles]

The short answer is yes. I was struck by what Members said, and this country clearly needs a robust and sustainable housing policy with regard to energy. We need a degree of reality and reasonableness in this approach. We have made a number of ministerial statements on the matter. It is excellent to see these solar panels on the roofs of houses, but we do not want them taking away valuable agricultural land. I shall look carefully at what my hon. Friends and Opposition Members have said, and we will work with fellow ministries and produce a statement soon.

[Hilary Benn (Leeds Central) (Lab)]

I join the Secretary of State and you, Mr Speaker, in expressing our profound sadness at the death of our good friend and colleague Jim Dobbin. Jim served his constituents and this House with distinction. He was a passionate defender of the national health service, for which he worked for many years, and a campaigner against global poverty. His integrity and his decency shone through in everything he did. All our thoughts are with his wife Pat and their children in their great loss.

I also join the Secretary of State in passing on our congratulations to the Duke and Duchess of Cambridge.

Over the summer, the nation has come fully to realise the scale of the grooming and recruitment of young British Muslims to go and commit atrocities in the name of the so-called Islamic State. Every single one of us has responsibility to tackle the causes of this radicalisation, and the Secretary of State particularly so. Will the right hon. Gentleman therefore tell us what specific steps he and his Department have taken to counter this threat?

[Mr Pickles]

The right hon. Gentleman will readily understand that when we came to office, the Prevent strategy was moved to the Home Office. We have concentrated on the matters that bring people together and encourage communities not to be isolated. We have spent the best part of £45 million on that endeavour, on things ranging from “English First”, which ensures English is taught in perhaps unusual places—trying to target young mothers, for example—to putting a lot of money, about £10 million, into the recruitment of detached youth workers to appropriate organisations. We have also funded groups that work together, whether it be in mosques, churches or synagogues. The right hon. Gentleman is quite right to say that we all have an obligation in this regard. Speaking as someone brought up in a multicultural city, I think this issue goes far deeper than funding streams. It is an extraordinary sight to see someone born and brought up in this country participating in atrocities in the middle east. I pledge the Government, along with the Opposition, to work hard on this—

[Mr Speaker]

Order. I am grateful to the Secretary of State, but we have many questions to get through.

[Hilary Benn]

I am grateful to the Secretary of State for his reply. Given what he said, however, why does he think that last month the widely respected counter-extremism think-tank Quilliam criticised his Department’s failure to produce a proper strategy as “catastrophic”? Does the right hon. Gentleman accept that much more needs to be done across government and the country to protect our young people, including confronting head-on Islamic State’s repugnant ideology, its promoters and apologists here in the United Kingdom and its utter contempt for our democracy and way of life? As he does so, he will have the full support of the Opposition.

[Mr Pickles]

I am grateful. We came to the conclusion early on not to fund some of Quilliam’s work, which might well have clouded its judgment. I am grateful for the right hon. Gentleman’s support. Quilliam’s criticism does not reflect what my Department, working closely with the Home Office, is doing, but as I say, I am grateful for his support.

[Dr Sarah Wollaston (Totnes) (Con)]

T2. The Rural Services Network has expressed some concern about the unintended consequences of removing section 106 obligations on small developments and its effect on raising land values, making it more difficult to provide affordable housing in small rural communities. Will the Minister meet me on this issue as well so that I can be reassured?

[The Minister of State, Department for Communities and Local Government (Brandon Lewis)]

Yes, I would be very happy to meet my hon. Friend.

[Mr Clive Betts (Sheffield South East) (Lab)]

T4. Last week, in a statement on child exploitation in Rotherham, the Home Secretary said that the Secretary of State was “minded” to commission an independent investigation of what had happened there. Will the Secretary of State update the House on his thinking, and tell us whether it would be within the remit of those conducting such an investigation to look into the accountability of officers who work for Rotherham now or have done so in the past, and their responsibility for anything that happens in this regard?

[Mr Pickles]

I hope to make an announcement very soon. There has been a delay because I want to ensure that the person that I should like to lead the inquiry is able to clear their diary.

I think that the fundamental question does revolve around governance, accepting responsibility and ensuring that there is a chain of command, so I take what the hon. Gentleman has said very seriously, and I think he is on the money.

[Mr Mark Spencer (Sherwood) (Con)]

T3. Will the Secretary of State update the House on plans to support my constituents who were victims of flooding in the summer of 2013 and who missed out on the compensation scheme that was afforded to the people of Somerset?

[Mr Pickles]

My hon. Friend has raised a very reasonable point. We are working with other Departments to identify funds for that purpose, and we hope to make an announcement very soon.

[Jim Fitzpatrick (Poplar and Limehouse) (Lab)]

T6. The Secretary of State commissioned PricewaterhouseCoopers to conduct an examination of the finances of Tower Hamlets council. Tower Hamlets council will be paying for that audit. Will the Secretary of State update us on how long it will be before the auditors report?

[Mr Pickles]

We are talking in terms of a matter of days. I understand that the consultants have finished their report, but the facts will have to be checked with Tower Hamlets, and only when that process has been completed will I be briefed on it. I shall then have to make a “minded” statement, because Tower Hamlets will obviously have the right to respond before I make a final statement to the House.

[Caroline Dinenage (Gosport) (Con)]

T5. This Saturday I shall be cleaning up Gosport with my local litter action group. [Hon. Members: “Hear, hear.”] Thank you so much.In the light of the recently launched inquiry into litter by the Communities and Local Government Committee, will the Minister join me in commending the litter action initiative, which involves community volunteers from all over the United Kingdom working to keep their local streets clean?

[The Parliamentary Under-Secretary of State for Communities and Local Government (Kris Hopkins)]

I fully commend the work of the group that my hon. Friend is supporting. The local authority of which I used to be a member identified that £6 million had been spent on picking up litter. How many more elderly people and individuals in schools throughout the country could we have helped with that money? How many books could we have bought for libraries? This is about a lack of responsibility on the part of individuals, which needs to be addressed and challenged.

[Mr George Howarth (Knowsley) (Lab)]

Ministers will be aware that, during the lifetime of this Government, the grant that Knowsley council will receive has been reduced by between £65 million and £74 million. Given that half the total amount spent by the council is spent on adults’ and children’s services, will the Minister consider reintroducing the council tax resource equalisation adjustment in order to mitigate the worst effects of the cuts?

[Kris Hopkins]

Council tax nearly doubled under the last Government. This Government have effectively reduced it by some 11%, but that does not detract from our responsibility to look after elderly people, which is why we are providing a £3.8 billion package to support them.

[Bob Blackman (Harrow East) (Con)]

T7. Over the summer, a disabled pensioner in my constituency received a parking penalty notice after his car had suffered a puncture. His car was pushed to the side of the road by good Samaritans, and when he got out of his car to go into the premises of a firm to find some people to help him to change the tyre, a traffic warden came along and gave him a parking ticket. Ealing council refused to cancel the ticket. [Laughter.] The council has exercised no discretion at all. Does my right hon. Friend agree that that is outrageous?

[Mr Pickles]

I must say that I was very shocked to hear the laughter from the Opposition Benches. I think it is a disgrace that the full panoply of the state should fall on a disabled person in this way. I urge Ealing council to look at the file again right now, to rescind the parking ticket, and to treat that disabled person with a degree of respect.

[John Cryer (Leyton and Wanstead) (Lab)]

Will the Minister make dealing with flooding a statutory duty for all fire services, or at least undertake to consider doing so, and then report to the House?

[Mr Pickles]

I have had an opportunity to see this very close up and am very firmly of the opinion that the way in which this is dealt with now, through gold command, and with the firefighters, the Environment Agency and the police working together, is by far the best system.

[Charlie Elphicke (Dover) (Con)]

T8. May I welcome the massive support the Department has given to coastal communities like mine in Dover and Deal, and the great backing to high streets, of which Deal’s is officially and definitively the best in the country?

[The Parliamentary Under-Secretary of State for Communities and Local Government (Penny Mordaunt)]

I congratulate my hon. Friend and his constituents on what they have managed to secure themselves in terms of on local growth. Deal is a fantastic example of a thriving high street, which I myself visited only a few weeks ago. It is already award winning, but I wish it good luck in the great British high street contest, which it has entered. I look forward to visiting Betteshanger park sustainable energy centre, which has secured £2.5 million of coastal communities funding to bring together business, education, heritage, green technology and tourism.

[David Simpson (Upper Bann) (DUP)]

Can we be sure that small local businesses are benefiting from the scheme whereby councils can come together and cluster to provide services and procurement?

[Mr Pickles]

I can see no reason why not. In terms of procurement, my Department has looked at helping small and medium-sized firms, and I think it is very important that local councils support local businesses.

[Mr David Heath (Somerton and Frome) (LD)]

Somerset county council is reported to be paying one officer £318,500 through a limited company owned by him and his wife, his deputy £275,000, and has 15 other posts paying over £96,000. At the same time it says it has not got the money to run our services. Does the Secretary of State think that is right?

[Mr Pickles]

Obviously, the possibility of applying for the job is something one would not rule out. I think that is an absolutely outrageous use of public money. People should pay their taxes in a normal way, and it is an abuse of process for that to have happened.

[Mr Steve Reed (Croydon North) (Lab)]

Is the Secretary of State aware that the Tory leader on Croydon council has been forced to resign in disgrace after he was exposed last week for secretly taking £10,000 in extra allowances before the council elections in May? Will he reassure the House that no other Conservative councils have set up allowances schemes that allow them to boast in public that they have frozen their allowances while leaving them free to claim the increases retrospectively after the polls have closed?

[Mr Pickles]

I do not mind whether somebody is Labour, Conservative, Liberal Democrat, Independent or UKIP—if they are on the fiddle, they deserve to have their collar felt, and that behaviour was completely unacceptable.

[Mr Speaker]

Last but not least, Mr Nick de Bois.

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

The Hertford road in Enfield is a struggling, though viable, shopping parade. Does the Secretary of State agree that Enfield’s Labour council’s obsession with mobile CCTV cameras in the area is simply a demonstration of its wish to raise fines and not support local businesses, and will he offer assurances to help out?

[Penny Mordaunt]

We now have a huge amount of evidence of what prevents local growth, and over-zealous parking restrictions are top of the list. My hon. Friend’s remarks are absolutely correct. We need to be giving support to local traders, listening to them and removing these obstacles to help our high streets thrive.

NATO Summit

Monday 8th September 2014 Commons Chamber

15:33

[The Prime Minister (Mr David Cameron)]

With permission, Mr Speaker, I would like to make a statement on the NATO conference, but before I do so, I am sure the whole House will join me in paying tribute to Jim Dobbin, who died suddenly this weekend. Jim gave his life to public service. He worked hard for his constituents, he loved this House of Commons and he contributed hugely to all its work. With his expertise in microbiology, he also did outstanding work in this House championing vaccines for children in the developing world. Though we may not have agreed on everything, we did agree about the important contribution of faith in politics—although, unlike Jim, I have to say I am not expecting to get a knighthood from the Pope, which Jim received, and much deserved it was, too. He will be missed by us all, and our thoughts are with his family at this time.

We have also heard this morning that the Duke and Duchess of Cambridge are expecting their second baby. I am sure the House will join me in congratulating them on behalf of the whole country on this fantastic news and wishing them well in the months ahead.

The NATO summit in Wales saw the successful coming together of this vital alliance. Everyone could see its unity, its resolve and its determination to meet and overcome all the threats to our security. I want to thank the local council in Newport, the Welsh Assembly, the First Minister, the Secretary of State, our armed services and police and all those who worked so hard to deliver a safe, secure and successful summit. It was, I think, the biggest gathering of world leaders that has ever taken place in our country. Most of all, I want to thank the Welsh people for their incredibly warm welcome. They did our United Kingdom proud.

The summit reached important conclusions on Ukraine, on defence spending and the reform of NATO, on countering Islamist extremism, on the future of Afghanistan and on supporting our military and their families. I want briefly to take each one in turn.

First, on Ukraine, we welcome the ceasefire that has been in place since Friday. At the NATO summit, I chaired a meeting with President Poroshenko and the leaders of France, Italy, Germany and America to agree that what was needed was the implementation of a proper peace plan that respected Ukraine’s territorial integrity. NATO sent a clear message to Russia that what President Putin was doing was illegal and indefensible. We stand firmly behind Ukraine’s right to make its own decisions and not to have them dictated by Russian soldiers trampling on Ukraine’s sovereign soil.

We will continue our efforts to support Ukraine, including by providing financial assistance to improve its command, control and communication capabilities. Today’s new sanctions from the European Union will further ramp up the economic cost to Russia. They will make it harder for its banks and its energy and defence companies to borrow money. They will widen the ban on selling so-called dual goods, such as machinery and computer equipment, which could be used for military as well as civilian purposes. They will also prohibit the provision of services for the exploration and production of shale, deepwater and Arctic oil.

Secondly, the summit reached an important agreement on defence spending. One of the problems with NATO is that only a small number of countries have achieved the commitment to spend 2% of their GDP on defence. As a result, the share of spending by the largest country, the United States of America, continues remorselessly upwards and now accounts for around 70% of the total. That is not sustainable. The summit addressed that by agreeing the responsibility of those countries that have not achieved 2%. The conclusions were very clear about that. Through the Wales pledge, every NATO member spending less than 2% has now agreed to halt any decline in defence spending, to aim to increase it in real terms as GDP grows and to move towards 2% within a decade.

There was also a second target—namely, that a fifth of all defence budgets should be dedicated to major new equipment, because what matters most is having military assets that we can actually deploy. Here in Britain, we have the second largest defence budget in NATO and the biggest in the European Union. We have taken long-term and often difficult decisions to put our defence budget on a sustainable footing, and the fruits of that are now coming through.

We are equipping all three of our services with the best and most modern military hardware that money can buy. This includes a £3.5 billion contract for Scout armoured vehicles, which I announced on Friday—the largest such order in over three decades. [Interruption.] It includes new fleets of joint strike fighter and Voyager refuelling aircraft; 22 new A400M transport aircraft; new Astute hunter-killer submarines; Type 45 destroyers and Type 26 frigates; and HMS Queen Elizabeth, our brand new aircraft carrier—

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

Labour.

[The Prime Minister]

The hon. Gentleman keeps saying “Labour”. He might remember that Labour left us a £38 billion defence black hole.

At NATO, I announced that our second new carrier—

[Mr Jones]

We ordered them.

[The Prime Minister]

It is all very well to order them, but they actually have to be paid for. In a nutshell, that is the difference between a socialist and a Conservative. They dream about having money; we actually raise it and spend it.

The hon. Gentleman will be very pleased to hear that I announced at the NATO summit that that our second new carrier, HMS Prince of Wales, will also be brought into service. This will ensure that we always have one carrier available 100% of the time. This investment in our national security, our prosperity and our place in the world will transform our ability to project power globally, whether independently or together with our allies.

Turning to the wider reform of NATO, after the end of the cold war, NATO stood down its highest readiness force. At this summit, we decided to reverse that decision and scale up our readiness to respond to any threat. At the same time, we agreed to do more to build the capacity of other nations outside NATO, to help them with their defence capabilities. A new multinational spearhead force will be formed, and it will be deployable anywhere in the world within two to five days. That is vital in underlining our article 5 obligations to collective defence, and the UK will support that by providing a battle group and a brigade headquarters. We will also contribute 3,500 personnel to exercises in eastern Europe between now and the end of 2015, as part of NATO’s efforts to ensure a persistent presence on our eastern flank.

On capacity building, NATO has a vital role in helping other countries with their capacity to defend themselves against all threats, including terrorist threats. When we consider how many of the threats that NATO countries, including the UK, now face from the middle east, north Africa and elsewhere, we see that this capacity building is becoming ever more important. It was a key priority for the UK at the summit that we made progress. NATO will now undertake capacity-building missions, beginning in Georgia and Jordan, with the offer of a training mission for Iraq as soon as the new Iraqi Government are in place.

Next, the alliance was clear about the scale of the threat from Islamist extremism, and we agreed that we must use all the instruments at our disposal—humanitarian, diplomatic and military—to squeeze this barbaric terrorist organisation out of existence. We should be clear about what needs to happen: we will continue to support the Kurds, including by providing them with arms and training their troops; we will work to support a new and representative Iraqi Government, which we hope to see in place later this week; and the fight against ISIL must be led by the Iraqis themselves, but we will continue to encourage countries in the region to support this effort and to engage allies across the world. We will proceed carefully and methodically, drawing together the partners we need, to implement a comprehensive plan. Earlier today, I spoke to Ban Ki-moon to seek support at the United Nations for a broad-based international effort to confront ISIL, and I will be working on building that international support when I attend the United Nations General Assembly later this month.

Turning to Afghanistan, we called on the two presidential candidates to work together to deliver a peaceful election outcome and a new Government as swiftly as possible. They made a statement during the conference that they would make those endeavours, and it is vital that that comes about. The summit paid tribute to the extraordinary sacrifice made by all our armed forces in driving al-Qaeda out of Afghanistan and training the Afghan security forces to take control of their security. We reaffirmed our long-term commitment to supporting a peaceful, prosperous and stable Afghanistan, including through our development conference in London in November.

Finally, as our troops return home from Afghanistan, it is right that we do all we can to support them and their families. In Britain, we have the military covenant—a pledge of commitment between the Government and our military—and we are the first British Government to write this covenant into the law of the land. We have made it ever more real by taking a series of measures, including doubling the operational allowance; introducing free higher and further education scholarships; investing £200 million in helping our service personnel to buy homes; increasing the rate of council tax relief; signing up every single local council in our country in support of the military; and giving unprecedented support to military charities.

At the summit, we took our military covenant internationally, with every NATO member signing up to a new armed forces declaration, setting out their commitment to support their military and enabling all of us to learn from each other about how we can best do that. We will continue to do everything possible to look after those who serve our country and whose sacrifices keep us safe. This, I believe, was a successful NATO conference. It proved that this organisation is as important to our future security as it has been to the past, and I commend this statement to the House.

15:43

[Edward Miliband (Doncaster North) (Lab)]

First, I join the Prime Minister in paying tribute to Jim Dobbin. He was an assiduous Member of Parliament who always put the people of Heywood and Middleton first. He was, as the Prime Minister said, a man of faith, which underpinned everything he did, and he was a lifelong public servant, having worked in the NHS for 30 years before coming to this House. He was also a proud Scot, and was planning to be in Scotland this week to help campaign to keep our United Kingdom together. He will be sadly missed, not just by his family and friends, but by colleagues from across this House.

I also join the Prime Minister in congratulating the Duke and Duchess of Cambridge on their happy news, and I, too, wish them well in the months ahead.

I congratulate Wales on its successful hosting of the summit. Perhaps we should also congratulate the enterprising Raffle family on their picture at Stonehenge with President Obama.

I thank the Prime Minister for his statement. This NATO summit was the most important for a generation. Today, NATO faces the gravest challenges in Europe, the middle east and beyond since the fall of the Berlin wall and the first Gulf war. I commend NATO leaders for seizing the opportunity to put down firm markers on the key issues: Russia and Ukraine, ISIL, and defence co-operation.

Starting with Ukraine, the ceasefire and peace plan announced on Friday by the Presidents of Ukraine and Russia was welcome, but it must be observed. It would be a grave mistake to ease international pressure on Russia before Russian troops no longer operate in Ukraine. We therefore welcome the readiness action plan, which is a step towards more nimble and flexible capabilities, sending a signal that if a NATO member is in danger, allies will take quick action. I welcome the attendance of President Poroshenko at the summit. What assurances were specifically given to Ukraine by NATO? Given also the desired aim of agility in the plan, how is the NATO decision-making process requiring agreement of all 28 countries being made sufficiently reliable and swift? Specifically, on the spearhead force, what countries will be host to it and in what situations will it be deployed?

Let me move on to the rise of ISIL in the middle east. The whole world is acutely aware of the barbaric threat that ISIL poses, and it was right that NATO members sought to address that. It is right also to seek to build the widest possible consensus in pursuit of that aim. There is no long-term solution to ISIL without a long-term plan that is based on widespread partnership in the region and the legitimacy of an inclusive Iraqi Government, and that includes a genuinely multilateral, political, diplomatic and humanitarian alliance.

In that context, will the Prime Minister tell us what progress is being made in the urgent task of assembling a genuine inclusive Government in Iraq? I welcome the united position taken by the Arab League yesterday against ISIL. Will the Prime Minister update the House on what other progress has been made in the vital work of building regional support?

Let me turn to NATO’s clarity of purpose, which is the collective defence of a strong transatlantic alliance. On defence spending, we share the commitment to maintain strong defence and a strong NATO. In the light of the pressures that all countries face, does the Prime Minister agree that part of the task that NATO faces is better pooling of alliance resources so that we have the kinds of capabilities that are required?

Finally, on Afghanistan, I commend the commitment of NATO members to Afghanistan. Our country has made huge sacrifices, and so have a number of others. It is right that by the end of 2014 we will see the drawdown of British forces. I pay tribute to our forces for the sacrifices that they have made and I join the Prime Minister in giving my full support to the military covenant, the armed forces declaration and its implementation.

We know from the past, not least in Iraq, the crucial importance of securing the right political settlement. To ensure that the sacrifices that have been made lead to a better future, Afghan leaders must resolve their current post-election differences and agree to a unified leadership. Will the Prime Minister update the House on progress on that matter and on a security agreement with the remaining forces? Given that the force contribution from coalition nations will be critical, will the Prime Minister tell the House the number of NATO troops expected to stay past 2014 and the UK contribution to that mission?

This summit has demonstrated that the NATO alliance is strong and is needed by its member states more than ever. As President Obama said:

“The defence of Tallinn, Riga and Vilnius is just as important as the defence of Berlin and Paris and London.”

The task for NATO is to demonstrate this commitment and to understand that wherever our interests lie, we need a strategy that combines military readiness with political, diplomatic and strategic alliances. We join the Government in supporting a NATO that meets that challenge.

[The Prime Minister]

I thank the Leader of the Opposition for his response. He was right to say that this was the most important NATO conference for a generation. That is because we face multiple challenges—in Europe and Ukraine, with ISIL and the other threats around our very dangerous world. Let me take his questions in turn.

On Ukraine, the mood of the NATO meeting and the meeting I chaired with the Ukrainian President was that there should be no easing of the pressure on Russia. With regard to what NATO is doing for Ukraine, there is some important defence capability building being done on things such as command and control and ensuring that the Ukrainian army is properly managed. There is also support in the form of non-lethal equipment such as body armour and other facilities that countries are giving. It is important that we do not measure the NATO commitment to Ukraine through military support for war-fighting capabilities. The real measure of support is the EU and US approach on sanctions, which have been ratcheted up. As I have said in the House before, it is important that we keep up the pressure in that regard.

As for the new spearhead force, different countries will be contributing and Britain has got out ahead by making clear the nature of our commitment through the brigade headquarters and the battalion. I am sure that others will come forward with their contributions, but the right hon. Gentleman is right that the implementation of the NATO agenda will now be vital.

On the question of combating ISIL, I agree absolutely with what the right hon. Gentleman says about the need for an inclusive Government in Iraq. That is supposed to be being put in place this week. It has already taken time and it is a complex undertaking, but it is absolutely vital. I would argue that without that, it is very difficult to take the further steps that need to be taken, so it is vital that it is put in place.

The right hon. Gentleman asked about regional support. Jordan, as a partner nation of NATO, was at the conference and made a very strong statement about its support for squeezing ISIL. He asked whether NATO countries are properly pooling their resources, and this is where the 20% pledge on new equipment is so vital. When new equipment is commissioned, it should be properly interoperable between NATO countries, and increasingly it is.

On Afghanistan, the right hon. Gentleman is right to say that the way to secure our legacy in Afghanistan is to ensure that there is a proper political settlement. A lot of pressure is being put on Dr Abdullah Abdullah and Dr Ghani to bury their differences and form a Government together. They have promised to do that, but we need to see it happen. The right hon. Gentleman asked about the contribution that Britain will make to the NATO forces. Our principal contribution post the end of 2014 will be the officer training academy that President Karzai specifically asked for and that we are providing. That should put our contribution of troops for that facility into the low hundreds. Some other countries, most notably the United States but also Germany and some others, will have more NATO troops on the ground, as it were.

The right hon. Gentleman asked about the bilateral security agreement; both candidates have said that they will sign it, and I would expect it to be signed. As for his general point, what is required in Afghanistan, as in Iraq, is a combination of all the assets we have at our disposal. On occasion, that will include military assets, but the importance of politics cannot be underestimated. The future of Afghanistan will best be secured by an inclusive Afghan Government and the future of Iraq will best be delivered if there is an inclusive Iraqi Government.

[Sir Richard Ottaway (Croydon South) (Con)]

Never has there been a time when decision makers have been faced with so many key decisions, and I congratulate the Prime Minister and his colleagues on an excellent summit in Wales. However, as they were meeting, yet another front was opening up, with reports of militia activity on the Russia-Estonia border. Does the Prime Minister agree that Estonia is a red line? Can he assure me that if there are any incursions, the UK and NATO will treat them with the most serious attitude conceivable?

[The Prime Minister]

I thank my right hon. Friend for his remarks and I can absolutely give him that assurance. It was important that one of the first things that needed to happen at the conference was for NATO to be very clear about the article 5 commitment that all members of NATO are subject to collective defence, Estonia included. It is important that that message goes out and that we should not only have the readiness action plan and the new spearhead force but start to see more NATO exercises, so that when Russians look at Estonia—or Latvia or Lithuania—they see different nationalities involved in their defence, not just Estonians. That is vital and yes, it is a red line.

[Mr Jack Straw (Blackburn) (Lab)]

May I thank the Prime Minister and my right hon. Friend the Leader of the Opposition for their generous tributes to our north-west colleague and friend, Jim Dobbin? I know that they will be much appreciated.

I want to ask the Prime Minister about the searing divisions that are now opening up within the Gulf Co-operation Council, with allegations by some states in the GCC that others, including Qatar and to a lesser degree Kuwait, are harbouring people, sometimes quite senior, who are helping to finance and give other support to the Islamist extremists in Iraq and elsewhere. What representations are the Prime Minister and others making to the Governments of those states to ensure that if such activities are taking place—there is high suspicion that they are—they should stop?

[The Prime Minister]

The right hon. Gentleman makes the important point that, on occasions, there have been concerns that some Gulf states have supported players—whether in Syria, Libya or elsewhere—with extremist views. We have repeatedly said how unwise we think that is. There are discussions between those Gulf states but, as I have said many times with respect to our domestic arrangements, Britain is clear that we need to oppose not only violent extremists, but the extremist narrative.

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

May I associate myself and my right hon. and hon. Friends with the tributes that have been paid to Jim Dobbin? He was proud to be a Labour MP and he was proud to be a Scot, and those things are not mutually inconsistent, despite some of the observations made elsewhere in the kingdom about loyalty.

The attempt to obtain a 2% level of expenditure within 10 years can be regarded only as a rather gentle target, so is my right hon. Friend satisfied that it is strong enough? The real question that will be in the minds of many hon. Members is this: exactly where do we stand on action with regard to ISIS? Does he agree that it is right to recognise that the best that can be done in relation to an ideology such as that of ISIS is to degrade it as far as possible, but that it would be entirely unrealistic to believe that political, economic or military means would destroy it?

[The Prime Minister]

I agree very much with what my right hon. and learned Friend says about Jim Dobbin. As a passionate Scot, a passionate Brit and a passionate Labour MP, he showed that you can be all three of those things, and we could replace the word “Labour” with “Conservative” or “Liberal Democrat” and say absolutely the same thing.

What is different about this time is that the 2% spending pledge has never before been included in a leaders declaration in quite the same way, and there has never been a time scale for it. I particularly pick out that it puts in its sights those who are below 2%, saying that they need to halt any further decline in their defence spending. I think that is a powerful statement.

On ISIL, of course one has to degrade an ideology. However, when it comes to terrorists who have taken control of a state’s institutions, meaning that they have land, oil, money and weapons, we should be more ambitious and say that the right people to run the state of Iraq are the Iraqi Government and the right people to run Syria are an inclusive Syrian Government, and that there should be no place in those states for these extreme terrorists.

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

Can we presume that the implication of the undertaking of those countries spending below 2% not to let that fall even lower is that those countries at or above 2% have undertaken not to allow their contribution to fall below 2%, particularly the United Kingdom?

[The Prime Minister]

The hon. Lady is basically right, but I refer her to the text of the declaration. Interestingly, it says that all allies

“currently meeting the NATO guideline to spend a minimum of 2%...will aim to continue to do so”,

which is important, and then it sets out the point about spending 20% on equipment, which is absolutely vital. The declaration then singles out allies

“whose current proportion of GDP spent on defence is below this level”.

Page 4 of the document sets out in some detail that those allies will

“halt any decline in defence expenditure…aim to increase defence expenditure in real terms as GDP grows”

and

“aim to move towards the 2% guideline within a decade”.

It is important that for the first time all 28 countries signed up to that sort of specificity.

[Mr Andrew Mitchell (Sutton Coldfield) (Con)]

On ISIL, my right hon. Friend is clearly right to have been cautious and to have sought the widest possible support for any international action, including by going through the United Nations and working closely with the Arab League. Will he continue to make it clear that this long and painstaking problem will not be solved only by smart weapons delivered from 12,000 feet, but will need long-term engagement on many fronts?

[The Prime Minister]

My right hon. Friend is right to say that this is long and painstaking work. What is needed is a comprehensive plan that includes everything: humanitarian aid, political support, diplomacy, regional pressure and, above all, an inclusive Iraqi Government. President Obama and I very much agree that military action can be only one part of a plan; it is not, in itself, a plan, and it is important that people understand that.

[Angus Robertson (Moray) (SNP)]

I would like to associate myself with the Prime Minister’s comments on the sad news about Jim Dobbin and the happy news about the Countess and Earl of Strathearn.

There is particular concern about the hostage David Haines in Tayside, where he is from, and in Sisak in central Croatia, where his wife and child live. What more can the Prime Minister say about the support for David’s family both in Scotland and in Croatia?

[The Prime Minister]

It is obviously a tragic situation. One only has to think for a few moments of what it would be like to be in his or his family’s position to understand what they are going through. What I try to make sure of in all these situations is that the family gets support from a police liaison officer and directly from the Foreign Office. There is always an offer for Ministers to speak directly to the hostage’s family to tell them about all the efforts being made on their behalf. We have a clear policy, which I believe is right, not to pay ransoms when terrorist kidnaps are involved. I made that point at the NATO dinner and pleaded with other countries to do the same, but no one should interpret that as our not doing everything we can in every case to help the family and the hostage.

[Sir Nicholas Soames (Mid Sussex) (Con)]

The whole country will be delighted to see a NATO restored and newly vigorous after the summit, but will the Prime Minister tell the House specifically what assistance he is seeking from the Sunni Gulf states, without which this coalition will find it hard going?

[The Prime Minister]

First, my right hon. Friend is right that what was interesting about this NATO conference was that it was one of resolution and unity in purpose. There were none of the sort of debates that might have been had in previous discussions about Iraq. There was real unity about what needed to be done, and part of that unity was not just about the Iraqi Government that were required, but the support—the active support—that would be needed from the regional players, in particular Sunni countries that can provide not only resources, diplomacy, aid and even military support, but real insights and input into the thinking of the Sunni tribes in Iraq, whom we need to rise up against this appalling regime.

[Hugh Bayley (York Central) (Lab)]

I welcome the readiness action plan, which will enable NATO to respond with greater force and greater speed in a dire emergency—provided the 28 member states are able to give political authority for its use quickly. In the bad old days of the cold war, the similar Allied Command Europe mobile force gave the SACEUR—Supreme Allied Commander Europe—pre-authority to use it in a dire emergency. If there is any question of pre-authority being given to use the readiness action plan, will the Prime Minister bring that proposal to the House for debate?

[The Prime Minister]

The short answer to that is yes, I will. As the hon. Gentleman knows, a lot of the detail of how the force will be constructed, who will contribute to it and how exactly it will work is still to be determined. The main thing is that the readiness of it is decided. May I take the moment, though, to thank him for his contribution to the NATO summit? He spoke as head of the NATO Parliamentary Assembly with great clarity and great support for what NATO is doing.

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

In support of what my right hon. Friend the Member for Mid Sussex (Sir Nicholas Soames) has just asked, may I draw the Prime Minister’s attention to a very important article by General Jonathan Shaw, a former director of special forces, in the Evening Standard on 5 September, in which he wrote:

“Deploying the Western military without a Muslim political plan would be folly”?

What approach will we be taking to Saudi Arabia, which has a habit of looking both ways on these questions, and where the Government appear to be friendly but sources inside Saudi Arabia supply funds to organisations like IS?

[The Prime Minister]

I shall certainly look at the article my hon. Friend mentions. It is sometimes hard to keep up with all the contributions and advice that retired military figures are given to offer, but I do my best. The point my hon. Friend makes is absolutely right: were there to be a military element to the strategy, it would work only if it was in conjunction with all the other parts of the strategy. As I put it, we cannot intervene over the heads of local people and leave them to pick up the pieces; it has to be part of a strategy and a plan.

[Keith Vaz (Leicester East) (Lab)]

As the Prime Minister knows, secure borders are essential in the fight against terrorism. During his discussions with President Hollande, was the crisis in Calais mentioned, given the French Government’s criticism concerning British Ministers’ inaction in dealing with our juxtaposed borders? Will the Prime Minister ask the Home Secretary to visit France at the earliest opportunity to engage in meaningful discussions to end this crisis, including giving the French the fence that we used at the Cardiff summit?

[The Prime Minister]

The offer of the use of the fence is there, and it was a very effective piece of equipment. These discussions are taking place at every level. I do not think it is fair to say that Britain has been unengaged in this. The juxtaposed border controls have been a success, but we need to work very closely together to make sure that the appalling scenes that we have seen are not repeated.

[Sir Gerald Howarth (Aldershot) (Con)]

Did the Prime Minister have time to discuss with our NATO partners the very serious implications of Scottish secession for the defence of the rest of the United Kingdom and NATO’s northern flank—in particular, the potential threat to our sea lanes? Does he agree that in these very seriously troubled times, surely England, Wales, Northern Ireland and, indeed, Scotland would be infinitely better defended and better together?

[The Prime Minister]

A number of people raised their concerns about the referendum. The overwhelming view of people who wish our country well is to say that of course it is a decision for people in Scotland but they hope that we stay together. I would absolutely echo that. Two visions of Scotland’s future are being put forward. The vision I believe in, and I believe the majority of Scots believe in, is, yes, of a proud and strong Scotland with strong institutions and a powerful place in the world that is in part secured by its membership of the United Kingdom. The alternative vision of separation involves such uncertainty about all these organisations—not knowing whether they would have a place in the European Union, or indeed a place in NATO, or indeed what currency they would use. These are real problems of uncertainty. I believe that the patriotic choice for Scotland is a strong, proud Scotland but within the United Kingdom.

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

May I echo the Prime Minister’s words about Jim Dobbin? I sat beside him at the meeting of the parliamentary Labour party that we had on Friday, and we both discussed the Scottish situation. His death has come as a great shock to us all.

President Obama will set out his strategy for dealing with ISIS on Wednesday. If, as seems likely, military action is part of that strategy and if the UK Government decide to join in that military action, even if that decision is restricted to action in the air and not forces on the ground, does the Prime Minister believe that that would require a vote in this House?

[The Prime Minister]

The short answer is yes, but we are not at that stage yet. As I said on Friday, we should be building this comprehensive strategy. We are already helping the Kurds, delivering arms to them. I said that we should step up to arming them directly and to training Kurdish peshmerga battalions, and increasing all the elements of the strategy. I have always believed, in this role and as leader of a Government, that you should consult the House of Commons as regularly as you can and the House of Commons should have an opportunity to vote. The point I always make, though, and this is not to run away from the right hon. Gentleman’s particular scenario in any way, is that it is important that a Prime Minister and a Government reserve the right to act swiftly without consulting the Commons in advance in some specific circumstances—for instance, if we had to prevent an immediate humanitarian catastrophe or, indeed, secure a really important, unique British interest. But other than that I believe it is right, as he said, to consult the House of Commons.

[Martin Horwood (Cheltenham) (LD)]

I welcome the summit declaration. Does not the discussion about parliamentary consent, parliamentary consultation and the need sometimes for swift action underline the need for a proper legislative framework to govern this country’s engagement in military action overseas?

[The Prime Minister]

That has been an interesting issue of debate and we have not come up with the final answer. There are problems with trying to write down every scenario into a law of the land. The convention that has grown up—it is now clear that the House of Commons should be consulted and a vote taken—is now very clearly understood on both sides of the House, and my personal view is that that might be better than trying to write everything down in some inflexible document that can create all sorts of legal problems of its own.

[Dan Jarvis (Barnsley Central) (Lab)]

Given the debate about our defence capability that has taken place both at the NATO summit and in the wider context of UK foreign policy, if it can be shown that we might in the foreseeable future require areas of our defence capability that have been recently removed or are in the process of being removed, would the Prime Minister consider reinstating that lost capability?

[The Prime Minister]

I always have an open mind on these issues, but I say candidly to the hon. Gentleman that in the last four years I have often wanted to see even more of the capabilities that we have been ordering—intelligence, surveillance, special forces and transport—rather than more of the things that we have got rid of or discontinued. My instinct is that defence reviews are vital, but only if we make bold decisions about the future capabilities rather than hang on to old ones that might not have so many uses.

[Mr David Jones (Clwyd West) (Con)]

May I commend the Prime Minister on the confidence he showed in Wales by bringing the NATO summit to Newport? It was the biggest international event of its kind ever held in this country and was clearly a resounding success. Does he agree that it is now important that Wales should capitalise on its period of international attention by ensuring that the international investment conference, which will take place in November, is an equal success?

[The Prime Minister]

I am very grateful for my right hon. Friend’s comments. The Welsh Assembly Government, the Secretary of State, the police and all the organisations, including Newport council, which I singled out, did a brilliant job, and Celtic Manor was an absolutely excellent venue. Something like 24,000 hotel room nights were required, not just in Wales, but on the other side of the Bristol channel. Wales must make sure we secure the legacy from the summit, and that can be seen in trade and investment. It was a great window on Wales. I also think there is a legacy in making sure that young people in our country understand the importance of NATO and of defence.

[Paul Flynn (Newport West) (Lab)]

Perhaps the best way we can honour the memory of Jim Dobbin is to ensure the continuation of the fine work he did here and in the Council of Europe to help those who have become addicted to prescription drugs.

May I thank the Prime Minister for the chance he gave Newport to display its magnificent facilities as a world habitat for occasions of this kind? I also thank him for the chance he gave himself and his Ministers to see the high quality of education in Newport, including a lecture the Secretary of State had from a young 10-year-old in St Woolos on the wonderful Chartist history of Newport. May I emphasise the fact that in November there will be a world conference of almost equal importance to get business opportunities to Newport, Wales and the United Kingdom? What is the Prime Minister going to do to ensure that that will be an equal success?

[The Prime Minister]

It is a rare event for the hon. Gentleman and I to be in almost complete agreement, but I think this is it! I agree with what he said about the importance of the issue of addiction to prescription drugs, but above all I think Newport really did put a great face forward in how it responded, because there are pressures with a NATO summit: there are traffic problems and disruption, but I thought people were incredibly reasonable about that and very welcoming, including the local media, to everyone who came. Securing the legacy is about supporting the investment conference and making sure we maintain a pro-business environment in south Wales.

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

The growing parliamentary convention, which the Prime Minister mentioned a moment ago, that this House should be consulted and given a vote on all overseas deployments would fail for two reasons in this context. The first, of course, is that the NATO rapid reaction force he has described would be deployed within two days, so presumably there would be no possibility of any such vote—perhaps there should not be one anyhow. It would also be deployed under NATO command. Secondly, the House has voted on war on only two occasions—one was Iraq in 2003 and the second was Syria last year—and neither of them was an outstanding success. Does the Prime Minister agree that serious thought ought now to be given to precisely what role this House should have when we decide to deploy our troops overseas?

[The Prime Minister]

I hear what my hon. Friend says, but I would say that the convention that has grown up is that if a premeditated decision is made by the Government about action to be undertaken—whether the war in Iraq, or my view that it was right to consider action in response to the use of chemical weapons in Syria—it is right to consult and, if possible, to have a vote in the House of Commons. I do not think that we need to write that down in some book of rules for it to be the overwhelming convention. But as I have said, there are times where very rapid decisions have to be taken, and I think that the House of Commons understands that when that happens, as was the case with Libya, you make the decision and come straight to the House to explain yourself afterwards.

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

Will the Prime Minister clarify the position as regards arming the Kurds? He said in his statement that

“we will continue to support the Kurds, including by providing them with arms”.

I took that “we” to mean NATO, because he was referring to the alliance. Yet he has just said in an answer both that we are supplying them with weaponry from other countries and—I think this is what he said—that we might arm them directly. Is he now saying that we will arm the Kurds, which I would welcome, and what weaponry will we give them?

[The Prime Minister]

The short answer to that is yes. Up to now, we have helped to provide the Kurds with weapons. We have transported some weapons, for instance from Albania to the Kurds, using our transport planes, because that fitted in with the weaponry they have been using, some of which is from the Soviet era. However, I have always said that we would respond positively to requests from the Kurds for a direct supply. We are now prepared to do that, so we will provide them with arms, as the Germans and others will. We think it is right, also with allies, to step up our training and mentoring efforts. We have said that we were willing, if they would like, to train a battalion of peshmerga fighters, because they are doing such a vital job in holding back ISIL. That is “we” as in the United Kingdom, rather than “we” as in NATO.

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

The Prime Minister and the NATO summit have been absolutely right to stress the importance of strong defence, but given recent critical reports from the National Audit Office and the Public Accounts Committee and given the very disappointing reserve recruitment figures—creating the risk of capability gaps and false economies—has the time not come for the Prime Minister to reconsider the Government’s Army reforms?

[The Prime Minister]

The short answer to that is that, no, I do not think that it would be right to reconsider the reforms. Over the last year, 3,200 people joined the Army Reserve—I am confident that we will now see some good recruitment figures to the Army Reserve—but we are putting in place a major change.

The bigger point that I would make to my hon. Friend is that when we consider the sorts of things that we contemplate doing—whether helping the Nigerian Government to overcome their problems, what we did in Libya or the sorts of things we are doing in Iraq—what we need more of is intelligence, surveillance, special forces, mobility, assets and equipment that can be used with partners, the most modern equipment, and armed forces that have no extra equipment needs because they have everything they want. That is what is required, rather than just very large numbers of people involved in any of three services.

[Ian Paisley (North Antrim) (DUP)]

May I associate myself, my party and my colleagues on these Benches with the Prime Minister’s tribute to our colleague, Jim Dobbin? For me, Jim will of course be remembered greatly for his strength of opinion on Gibraltar, particularly his support for the right to self-determination of the people there to remain British. That resonated very strongly with me as an islander, and with my desire to remain British. I also associate myself with the Prime Minister’s comment that he is not expecting any knighthood from the Pope—he’s not the only one in this House in that particular regard.

To turn to the military or armed forces covenant, the Prime Minister will know that Northern Ireland is a fertile recruiting ground for Her Majesty’s forces. Indeed, we are more than matching our weight in numbers for Her Majesty’s forces. However, the military covenant has not been fully implemented; indeed, in many cases it has been dishonoured. Will he go the extra mile and ensure that the Northern Ireland Executive do more to ensure that it is honoured in every regard?

[The Prime Minister]

The hon. Gentleman makes an important point. I have discussed this with the First Minister and Deputy First Minister in Northern Ireland, because it is important that we look after our armed forces and their families in every part of the United Kingdom. I hope that some progress can be made on that. In the meantime, local councils can of course take up the community covenant to make sure that they act in a way that supports the armed forces and their families. Many councils in Northern Ireland will be able to do that. As for the hon. Gentleman’s remarks about the Pope, I assumed that there might be something that cascaded down the generations, but obviously not.

[Mr Andrew Robathan (South Leicestershire) (Con)]

The House will share the Prime Minister’s concerns about the situation in Ukraine, particularly his description of President Putin’s actions as indefensible and illegal. At his meeting with President Poroshenko and other leaders, did they reach any conclusions on what were the aims of Russia and President Putin in Ukraine, and on what action might be taken if he continues to pursue those aims?

[The Prime Minister]

I think that the aim of Russia is to deny the people of Ukraine their legitimate choice to be closer to the European Union and to have an association agreement with it. We need to say very reasonably to President Putin that he cannot overcome the stated will of a people to determine their own future. Of course there should be a relationship between Ukraine and Russia, and indeed between the European Union and Russia, but he cannot use force to stop people choosing their own future. That is why we should measure our response to Russian action not in a military response through NATO or Ukraine, but in raising the pressure through sanctions. We should say to Russia that if she continues down that path, she will suffer economically, because ultimately, as I have said from this Dispatch Box before, Russia needs America and the European Union more than America and the European Union need Russia.

[Helen Goodman (Bishop Auckland) (Lab)]

Further to the Prime Minister’s last answer, it is clear that ultimately, we will need to move to a political process with the Russians. What support have NATO and the United Kingdom given President Poroshenko in developing his political dialogue with the Russians?

[The Prime Minister]

That is a very good question. We are supporting President Poroshenko by saying that a ceasefire is only the first stage and that what is required is a proper, worked-up peace plan. He set out a 12-point plan in front of all of us at the meeting. We are giving him our support by saying that we will do everything that we can to engage with Russia to ensure that it engages properly in the peace process. That has to include getting Russian soldiers out of Ukraine and Ukraine being able to determine her own future. Obviously, Russia also has a number of concerns, including over the treatment and rights of Russian minorities in Ukraine, which it is perfectly legitimate to discuss.

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

May I add a tribute to Jim Dobbin from the Government Benches? He worked tirelessly for vulnerable people in the tropics, in particular through his work on tropical disease eradication and his expertise in pneumococcal disease. He will leave that legacy for the benefit of the most vulnerable people on our planet. We will miss him.

On the combating of ISIL, I welcome the Prime Minister’s statement on the unity of approach in respect of the development of governance and security at the same time—NATO is speaking with one voice. I urge him to put those arguments forward at the upcoming United Nations meetings, as he indicated he would, and to use NATO as an example of finding a united way, not least because that is one of the great lessons that we learned from the rapid reaction in Mali, which dealt somewhat successfully with the most recent outbreak of the al-Qaeda threat.

[The Prime Minister]

There are good lessons from Mali because there was proper concentration on the importance of the political process that would bring a new Government in Mali, as well as some important military action. My right hon. Friend is right to stress the importance of the United Nations as a way of building support and legitimacy for what needs to be done.

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

Does the Prime Minister agree that the reason most of us support NATO is not that we are warmongers, but that we want to prevent war? The more strong, organised, strategic and well-resourced NATO can be, the better. The news from Newport was very good, as long as it is carried through and we check that the members of NATO deliver. However, did he think it strange that nearly every report said that President Obama and everyone else had stipulated that there should be no boots on the ground? Is that not strange coming from NATO?

[The Prime Minister]

First, let me agree with the hon. Gentleman that NATO is a defensive alliance. That is at the heart of its success. Of course, it now has to think more about the threats from outside Europe, such as terrorism and cyber-attacks, which might require more activism. On his remarks about boots on the ground, in order to squeeze ISIL out of existence, as I have put it, there will have to be boots on the ground, but those boots should be Iraqi boots. It is their country and they should be leading the process. The question for us is what we can do to help those boots on the ground, rather than put our own there.

[Crispin Blunt (Reigate) (Con)]

The absence of any of Russia, Turkey, Saudi Arabia and Iran from a commitment to or the formation of an international strategy to destroy the Islamic State, will probably fatally compromise such a strategy. What efforts are being made to include them?

[The Prime Minister]

My hon. Friend makes a good point, and the Turkish President, with whom I had quite extensive talks at the NATO conference, is, like everyone else, extremely worried about the creation of that state on his doorstep, not least because of the appalling kidnaps that have taken place of such a large number of Turkish personnel. My hon. Friend is right that discussions must be held with all those regional partners and players to ensure that the strongest possible squeeze can be put on that organisation.

[Jeremy Corbyn (Islington North) (Lab)]

The west went into Afghanistan 13 years ago, Iraq 11 years ago, and now a massive NATO summit agrees to spend yet more money on defence around the world. What consideration was given to why there has been such an increase in terrorism since those two wars, and to why ISIL has grown as such a big force? Should the NATO summit, and indeed all leaders, be looking at the causes of war, and at the perception of the role of the west in seeking commercial and mineral advantage around the world, rather than bequeathing us yet more military expenditure?

[The Prime Minister]

Let me try to find a little common ground with the hon. Gentleman. As well as believing in the importance of defence expenditure and keeping our defences strong, I also believe that international aid and development is an important tool not just for helping people out of poverty, but in demonstrating the compassion and generosity of the west in helping people who are less fortunate than we are. Where I think the hon. Gentleman is wrong is that we have to understand that a fundamental cause of the extremism and terrorism that we saw with al-Qaeda in Afghanistan, and that we see with ISIL in Syria and Iraq, is the poisonous ideology of Islamist extremism. We see people joining it who have not suffered poverty or deprivation, but they have bought into that perverted world view. Irrespective of what we might think of them, they are very clear that they want to kill us.

[Mr Christopher Chope (Christchurch) (Con)]

Is the Prime Minister satisfied that all our NATO allies are taking sanctions against Russia? In particular, is he concerned about the role of Turkey, which does not seem to be taking sanctions and is alleged to be undermining some of the sanctions that we are taking?

[The Prime Minister]

My hon. Friend makes an important point. The EU has through its mechanisms decided and implemented sanctions, as has the US. There are a number of countries that have serious trading relationships with Russia, and which I believe ought to see the dangers to them of the approach that Russia is taking to the sovereign authority of another country. Yes, it is important that we have those conversations.

[Jessica Morden (Newport East) (Lab)]

May I echo the comments already made about Newport in this statement? Hosting the summit certainly put our city in the headlines; the community grasped the opportunity and we all hope that we benefit from things such as the investment conference coming up in November. Will the Prime Minister join me in thanking those public services that worked collaboratively, not least Gwent police force that worked with 42 other forces to deliver one of the largest security operations ever in the UK, with fantastic community policing?

[The Prime Minister]

I would like to say a particular thank you to the police. The Gwent force did a brilliant job, but police had to be called in from all over the country to deal with, I think, 54 Prime Ministers and Presidents, and the heads of a number of important international organisations. That is more Heads of Government or State than have ever come to a conference in Britain’s history. We were asking a lot of Newport, and Newport, the local police and all those involved responded magnificently.

[Sir Tony Baldry (Banbury) (Con)]

Does my right hon. Friend agree that the response to ISIL must be global, with the ambition of securing peace in the long term, and that it must include religious leaders, because it is not to exaggerate the facts to say that the traditional Christian communities of the Levant are more threatened with extinction than at any time in more than 1,000 years?

[The Prime Minister]

My right hon. Friend is right to talk about the threats to minority communities in the area, including Christian communities. We should be standing up for them. He is also right to draw attention to the role of religious leaders and religious communities. It has been heartening to see how many Muslim and Islamic leaders have come out to condemn ISIL and to say that those people are not in any way acting in their name. They have even gone viral burning the ISIL flag. It is thoroughly worth while for people right across different religious communities to condemn ISIL.

[Fiona Mactaggart (Slough) (Lab)]

In response to the right hon. Member for Mid Sussex (Sir Nicholas Soames) and the hon. Member for New Forest East (Dr Lewis), the Prime Minister confirmed that the response to ISIL must involve regional Governments more effectively. In view of the fact that the British military has trained many people in those regional Governments, and certainly in the militaries of those countries, what is our Army doing to ensure that its counterparts are on board?

[The Prime Minister]

The hon. Lady makes a spot-on point. We have good relations with, for instance, the Saudi military, the Qataris, the Emirates and the Jordanians, partly because many have trained here alongside our armed forces. We should maximise those relationships and that defence engagement. That should be part of the comprehensive plan that has been put in place—we should work with them to squeeze ISIL. One thing we decided at NATO was that we need to do even more to build the capability of those militaries because, increasingly in our dangerous world, we are confronting problems, whether in Syria, Mali or Somalia, where it would be good if the regional players had the military capabilities better to deal with the problems—with our assistance and help, but not always with our direct interaction.

[Conor Burns (Bournemouth West) (Con)]

Jim Dobbin campaigned with gentle tenacity about the plight of minority Christian groups in the middle east. When even Pope Francis has indicated that he supports limited intervention to stop the massacre of the innocent, may I press my right hon. Friend on the two previous questions he has been asked about Saudi Arabia? Saudi Arabia is allegedly our ally. We train Saudis and supply them with military wares. Will he tell me specifically what interventions he and his Foreign Secretary have made with the Saudi Government to ask them whether they will be part of the solution in their back yard?

[The Prime Minister]

Engagement is certainly taking place. I spoke to the King of Saudi Arabia around 10 days ago about how we should best work together to confront the threat, which the Saudis see very much as a threat to them. John Kerry, the US Secretary of State, is currently in the region and talking to a number of the important regional players. That process needs to continue.

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

Will the Prime Minister clarify what support is being provided to Iraq to ensure that it has an inclusive and strong Government to tackle its national threat, and to ensure that it has the resources to support the safety of citizens in war zones, particularly women and children, given the reports of appalling sexual violence perpetrated by ISIL?

[The Prime Minister]

To take the second part of the hon. Lady’s question first, our aid budget is obviously being brought to bear, working with others, to build refugee camps and to help those people who get to safety, whether the Yazidi community or other people who are being persecuted.

On working with the Iraqi Government, we are stepping up what we are doing. We obviously have a full embassy engaged in that work, as do the Americans. We are doing more, but the crucial decision needs to be made by the Iraqi leaders. They need to decide that it is time to end the client politics of looking after the Shi’a and not the Sunni, and instead to form a proper, inclusive Government that includes Sunni, Shi’a and Kurd.

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

In the light of Russia’s destabilisation actions in Ukraine, what discussions were had at the summit on improving NATO’s cyber-security capabilities and on the article 5 implications of cyber-attacks?

[The Prime Minister]

I thank my hon. Friend for that question. The issue was discussed, because clearly some very vicious cyber-attacks have been carried out on NATO members. It is no good having a defence alliance if we cannot address one of the modern threats, which is the ability of people to take out computer programs, electricity grids or what have you. That is an important part of the work that we do, and Britain has some particular expertise in that area.

[Kevin Brennan (Cardiff West) (Lab)]

May I, too, convey my shock and sadness at the loss of our good friend and comrade Jim Dobbin? His daughter lives in Cardiff, and he never missed an opportunity to tell me how proud he was of his grandsons and their achievements.

Will the Prime Minister add to the list of organisations that he thanked Cardiff council, which organised the NATO dinner in Cardiff and the warships in Cardiff bay? Will he comment on the question that I think my hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart) was trying to get at—namely, is he offering a guarantee that the UK will not allow its defence expenditure to fall below the 2% target next year?

[The Prime Minister]

First, I thank the hon. Gentleman for accurately reminding me that I should include Cardiff city council in my thanks. It did a brilliant job with the dinner in Cardiff castle, which was a fantastic setting for discussing the issues we needed to discuss. I am very grateful for everything that it did.

We meet the 2% target and have done so under this Government. The new targets are set out clearly in the document, and as I said, they put particular emphasis on those not currently meeting the 2% target. All parties in the House will have to set out their spending plans, including for defence, at the next election.

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

May I thank my right hon. Friend for his commitment to investing more money in equipment for our armed forces?

Should the Scots tragically decide to vote for independence in the forthcoming referendum, would my right hon. Friend consider Plymouth dockyard for the building of future naval ships, rather than continuing to have them built in what would then, of course, be a foreign country?

[The Prime Minister]

Of course, my hon. Friend loses no opportunity to stand up for Plymouth, but let me say, as Prime Minister, how much I welcome the fact that we bring to our armed forces those from every part of the United Kingdom. We can think of the magnificent service of the Scottish regiments and the expertise of those who have built our incredible warships in Scotland—most recently, of course, the aircraft carriers. It is the contribution of all parts of the United Kingdom that means we have a defence budget that is one of the top five in the world and armed forces that are the envy of the world. My argument would be not just that Scotland benefits from being part of that but that it contributes a huge amount to what is a unique asset around the world.

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

May I add my tribute to our colleague and friend Jim Dobbin, who has been supportive of me since I came into the House in 2010? He will be greatly missed.

The appalling attack on flight MH17 saw two avid Newcastle United fans, Liam Sweeney and John Alder, murdered along with 296 other innocent passengers. What specific discussions did the Prime Minister have with his NATO colleagues about ensuring that the perpetrators of that appalling atrocity are brought to justice?

[The Prime Minister]

The appalling act of the shooting down of MH17 was discussed at the NATO summit. I have also met some of the relatives of the constituents to whom the hon. Lady refers. It was an absolutely horrific set of affairs that came about. The Dutch will be publishing their report in the next few days, and I think we all wait patiently for what they have to say about how this was caused.

[Sir Bob Russell (Colchester) (LD)]

In the light of Britain’s further defence commitment at the NATO summit, will the Prime Minister give a categorical assurance that there will be no more cuts in the size of Her Majesty’s armed forces?

[The Prime Minister]

I certainly do not want to see further reductions in, for instance, the size of our Army. We have had to take difficult decisions, such as going to a regular force of 82,000 and a larger reserve force, and I do not want to see further changes to that. But as I said in answer to a question earlier, what matters most of all is having armed forces that we are confident to use because we know that we have the most modern equipment and that we are never going to send soldiers, sailors and airmen into a difficult situation with substandard equipment. We have been able to make sure they have the very best equipment now, with the Scout vehicle to come, because that is absolutely crucial.

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

May I thank the Prime Minister for his kind tribute to our friend Jim Dobbin, who was a greatly respected member of both the labour and co-operative movements in Greater Manchester and will be missed?

I was interested in what the Prime Minister said in his statement about the new exercises in eastern Europe. Given that NATO’s permanent bases have historically been located in what is probably now the wrong part of Europe, may I ask him, without wishing to ramp up the tensions on NATO’s eastern flank, what discussions were had at the NATO summit about where NATO’s permanent bases ought to be located in the future to face the challenges of the future?

[The Prime Minister]

The hon. Gentleman is absolutely right to make that point. Part of the readiness action plan is that there should be prepositioning of equipment and better use of bases in central and eastern Europe. He will see from the detail of the declaration that that is very much anticipated by the NATO conference.

[Philip Davies (Shipley) (Con)]

We have always been told that the more we spend on overseas aid, the more it will enhance our security. We have been spending more on overseas aid, but the security threat level has been raised, so that correlation has clearly been shown to be a load of old cobblers. Will the Prime Minister therefore divert some of the money from the overseas aid budget and give much-needed additional resources to our armed forces and security services to help keep us safe in these very dangerous times?

[The Prime Minister]

I do not think it is quite right to make that correlation. I would argue that had we not put money into stabilising Somalia, for instance, or Afghanistan or into helping save lives in countries such as Pakistan, we would have seen even more pressures from asylum seeking and migration, and even greater problems with drugs and terrorism. What we have to get right is the balance between armed forces to keep us strong and an aid budget that fulfils our moral responsibility to the poorest in the world, which also helps, I would argue, to keep us safe.

[Richard Graham (Gloucester) (Con)]

The NATO summit showed how vital NATO still is. It was good to see the Gloucestershire constabulary in RAF Fairford playing a small role in the logistics, and I welcome the Prime Minister’s statement. As part of the security discussions, did members discuss the role of foreign imams in our mosques? UK-born and educated imams preach in the context of understanding Britain and are valued, but that is not always the case with foreign imams. Does my right hon. Friend believe that it may be time to tighten the policy on foreign imams while encouraging the training of British ones?

[The Prime Minister]

There is a lot in what my hon. Friend says. I think what matters most of all is that imams are able to communicate to their constituents in English—that is absolutely vital—and that they are up to date with how to help young people by diverting them from the extremist preachers that they find online.

[Jason McCartney (Colne Valley) (Con)]

I, too, pay tribute to Jim Dobbin. As a new member on the Transport Select Committee, I particularly appreciated his expertise, knowledge and shared passion for trans-Pennine infrastructure in transport. He will be sadly missed in the Committee.

I very much welcome the news about the full commissioning of our carrier, the HMS Prince of Wales, but will my right hon. Friend take the opportunity to debunk the myth that our carrier force will not have the aircraft it needs and confirm our full commitment to the new joint strike fighter, the F-35 Lightning II, which will provide the aircraft for both HMS Queen Elizabeth and HMS Prince of Wales?

[The Prime Minister]

I can confirm that. We will have joint strike fighters on these aircraft carriers, as well as, of course, vital attack and other helicopters, which will provide platforms of real power. The announcement I made about making sure that both are commissioned means that at any time we will always have a carrier available. I think that really strengthens this country’s defence capabilities.

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

I chair the all-party parliamentary group on Georgia. The Prime Minister referred to NATO beginning its capacity-building missions. He is held in very high regard in Georgia since his visit shortly after the war with Russia. Will he say a little more about the enhanced partnership, which will put Georgia alongside Sweden and Finland, among other countries, and how it will help the country, and particularly its Defence Minister Alasania who has done exceptional work on modernising the Georgian armed forces?

[The Prime Minister]

I thank my hon. Friend for his question. There are various elements to this. First, the fact that there will be a defence capability-building mission in Georgia is very significant; it will help the Georgians modernise and build up their armed forces. It is also worth noting that a lot of this is being done because of the real contribution that Georgia has made, not least to the ISAF forces in Afghanistan, where the Georgians took on some very difficult work and paid a high price in terms of casualties. This is an enhanced partnership. Georgia is one of the strongest partners that NATO has, and I am sure that this defence capability mission will be much welcomed.

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

I think it reasonable to regard the defence budget of our country as an insurance policy for its security, and to regard NATO as a group insurance policy. However, it is clear that while all NATO members wish to enjoy the security that the cover of membership gives them, not all of them wish to pay the premiums. Does my right hon. Friend agree that now is the time for Germany, in particular, to step up to the plate and increase its defence spending to 2% in line with NATO guidelines?

[The Prime Minister]

My hon. Friend puts it in a good way. In order to enjoy the collective security, we must pay into the insurance policy, but the Germans tend not to sign things unless they have read the small print. They are quite meticulous. I know that Chancellor Merkel looked very carefully at what the agreement said before she signed it. I think that that is important, because Germany’s defence expenditure is below 2%, and it must therefore halt any decline in that expenditure.

[Mr David Nuttall (Bury North) (Con)]

May I associate myself with the remarks made about the late Jim Dobbin? He was my parliamentary neighbour, and he was a man of faith and a man of great principle and decency.

Does the Prime Minister agree that, in an increasingly dangerous and uncertain world, our 27 allies in NATO provide a better guarantee of safety and security for the British people than could be provided by the other 27 members of the European Union?

[The Prime Minister]

I must point out to my hon. Friend that they are two quite different organisations. NATO is about defence and collective security—and we have, if you like, signed away a bit of our sovereignty in NATO, in that we are pledged to go and defend anyone who is attacked—whereas, of course, the core purpose of the European Union is not defence, but should be about securing our prosperity and ensuring that we can trade freely with our 27 partners.

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

Does the Prime Minister agree that in considering defence equipment increases across NATO, we should give equal weight to the importance of co-operation on cyber-defence and cyber-attack? Will that not be an important area of theatre in the future, particularly in relation to countries such as Russia?

[The Prime Minister]

I entirely agree with my hon. Friend. He mentioned cyber-defence and cyber-attack. If we believe in deterrence in the field of, say, nuclear power or conventional forces, we should apply the same logic to cyber-warfare.

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

In the context of achieving a secure, stable, democratic Afghanistan, does the Prime Minister agree that it would be helpful to have a secure, democratic, successful Pakistan? That being the case, and in view of recent events, does he also agree that the United Kingdom will always support a democratically elected Government in Pakistan rather than those who are trying to derail that Government?

[The Prime Minister]

I agree with my hon. Friend: we should be friends of a democratic Pakistan. I think it is good that, in spite of that country’s difficulties, there has been a transition from one democratically elected Government to another democratically elected Government, and we should be encouraging that process.

[Robert Halfon (Harlow) (Con)]

I thank my right hon. Friend for the work that he has done in NATO to secure a strategy to deal with ISIS. Does he agree that Kurdistan is the only beacon of democracy and the rule of law, and the only place of religious tolerance, in Iraq? Does he also agree that, as well as supporting Kurdistan in the short term, we should bear in mind the fact that, given its status, it will need continuous political, military and humanitarian support in the long term? May I also ask whether there was any discussion in NATO about Iran’s onward march towards nuclear capabilities?

[The Prime Minister]

Obviously, this meeting spent more time on ISIL, Ukraine and other elements than on the Iranian nuclear issue, which has been discussed a great deal at other recent meetings. As for what my hon. Friend said about the Kurdish regional authority, yes, of course we should support it—I very much admire what it has done to protect minorities and foster democracy—but I think that we should support it as part of our effort to build a pluralistic and democratic Iraq. I think it is absolutely vital that we see it as part of that country.

[Mr Philip Hollobone (Kettering) (Con)]

Both Greece and Turkey are members of NATO, and both were at the weekend summit. Was it made clear to Turkey that it needs to secure its border to prevent the flow of foreign jihadist fighters to the new caliphate forces, and was it made clear to Greece that it must secure its border, which is the weakest part of the EU’s external frontier, against the hundreds of thousands of illegal immigrants who are making their way into the EU and across it to Calais, and then trying to make their way on ferries to our shores?

[The Prime Minister]

My hon. Friend makes two points that I totally agree with. First, I discussed the Turkish border issue with President Erdogan. The Turks have taken quite a few steps to provide further security at their border, and they are looking at a range of military intelligence and security co-operation with us to that end. There is a real problem with Europe’s external borders—the Greek border being one—where people are coming into Europe to claim asylum, but instead of claiming asylum in the first country they arrive in, which is what they ought to do, they are making their way to Calais in order to try and come to the UK. We need those external borders secured, but we also need everyone properly to implement the rules we have all agreed.

[Martin Vickers (Cleethorpes) (Con)]

Although the British people are united in their opposition to terrorism and their determination to overcome it, they remain somewhat nervous about possible military involvement unless there is a clear link to our own security. I welcome my right hon. Friend’s approach, particularly when he says that he will make careful and methodical moves towards a comprehensive plan. Can he assure the House that he will be equally careful and methodical in his moves to ensure the full support of the British people?

[The Prime Minister]

I will try to be careful and methodical about everything I do, but the point I would make, even today, to the British people is: be in no doubt about the threat that the so-called Islamic State poses to us here in the United Kingdom. We have already seen something like six planned attacks by ISIL in the countries of the European Union, including of course the appalling attack in the Brussels Jewish museum where innocent people were killed. That flows directly from this organisation. It kidnaps people, it has ransom payments—it has made tens of millions of dollars in that way—and it now has the weapons, resources and oil of a state and is using some of that money directly to target people in this country and across the European Union. We have to be fully cognisant of that fact. There is no option to look away, to put our heads in the sand, to hope this will all go away if only we did not get involved. The fact is that we are involved because it has decided to target us, and that needs to be the beginning of the conversation we have.

Points of Order

Monday 8th September 2014 Commons Chamber

16:52

[Mr Charles Walker (Broxbourne) (Con)]

On a point of order, Mr Speaker. Over the weekend, my surgeries were picketed by an individual in dispute with the Courts Service. I recognise the right to protest, but the use of a loud-hailer made it almost impossible to hold a conversation with those visiting my surgeries. The protest also extended to my home and, more worryingly, those of my patient and generous neighbours, which resulted in multiple calls being made to the police throughout Saturday and Sunday. The protester made it clear to my neighbours that unless I succeeded, as their MP, in changing the law to his liking, he would mount a sustained campaign against them. These threats caused great distress. Protest is one thing, but it is intolerable to try to coerce an MP to act in a particular way under the threat of his neighbours and constituents being harassed, disrupted and distressed. To paraphrase a US President—I think it was Truman or Roosevelt—“Your right to throw a punch ends where the nose of another constituent begins.”

[Mr Speaker]

I am extremely grateful to the hon. Gentleman both for his point of order and his courtesy in tipping me off yesterday about his desire to raise it. I think the whole House will have been shocked to hear the hon. Gentleman’s account of the distress and disruption to which he, his family and his neighbours have been subjected. Let me, perhaps—I hope on behalf of the House—make the situation clear beyond doubt: however strongly any individual feels about a particular cause or campaign, each and every Member of this House has a right to go about his or her legitimate business without intimidation or harassment, or fear thereof. Moreover, it is quite unacceptable for any individual to threaten continuing such harassment if the Member fails to seek to bring about the particular change in the law that that member of the public seeks. That simply will not do. I think I can say that the whole House will be behind the hon. Gentleman on this matter, and I hope he will be good enough to keep me informed of the developing circumstances. We wish him, his family and his neighbours well.

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

Further to that point of order, Mr Speaker. May I remind the House that in 2009 we had an intense debate on the security of Members’ home addresses, in which the then Labour Leader of the House, the right hon. and learned Member for Camberwell and Peckham (Ms Harman), rightly said that MPs must be able to do their jobs without fear or favour and without having to look fearfully over their shoulders. What disturbs me, from what little I know about this incident, is that the police appear reluctant to intervene. If that is so, is it not absolutely disgraceful?

[Mr Speaker]

I cannot comment on that because I do not know whether it is true or not. I think I had better reserve judgment on that point—

[Mr Charles Walker]

rose—

[Mr Speaker]

Order. I will come back to the hon. Gentleman in a moment. The hon. Member for New Forest East (Dr Lewis) and I will have known each other for 30 years next month, and I say in all courtesy to him that when first he proposed, in the interest of all colleagues, to bring about a change in the law on the subject of home addresses, I do not mind admitting that I did not think his chances of securing such a change were very good. I should have known better than to predict failure, however, because his mission was successful. I have a feeling that the hon. Member for Broxbourne (Mr Walker) wants to get in again.

[Mr Walker]

Further to that point of order, Mr Speaker. May I just make it perfectly clear that the Hertfordshire constabulary has been simply wonderful in its dealings with me? I wholly accept the first part of the intervention by my hon. Friend the Member for New Forest East (Dr Lewis), but Hertfordshire constabulary has been absolutely brilliant. It has supported me and my neighbours, and I have nothing but admiration for it.

[Mr Speaker]

I am grateful to the hon. Gentleman for that further point of order.

[Dr Lewis]

And I am happy to withdraw what I said.

[Mr Speaker]

I am grateful to the hon. Gentleman for that.

[Angus Robertson (Moray) (SNP)]

On a point of order, Mr Speaker. Have you received notice of an imminent Government statement on new devolution legislation or other plans for Scotland? If there is no statement, would it be correct to conclude, given that the UK Government are currently in strict purdah, that there is no substance to what is being proposed outside this Chamber?

[Mr Speaker]

If I did not know the hon. Gentleman as well as I do, and if I were not inclined to regard him as a straight dealer—which, through my natural generosity of spirit, I am—I would think that he was seeking to inveigle me into some sort of partisan debate, perhaps relating to an upcoming plebiscite. But of course I cannot believe that he would attempt to do any such thing. To seek to dragoon the impartial Chair into such a partisan debate would be quite improper, and I cannot believe that he would seek to do anything that could be described as quite improper. We will leave it there for today.

[Jeremy Corbyn (Islington North) (Lab)]

On a point of order, Mr Speaker. I was very pleased with the way in which you gave us the sad news about the death of Jim Dobbin at the start of today’s proceedings. I treasure a photo of him outside this building campaigning for the end of nuclear weapons in this country. However, something seems to be missing here. When a Member dies in office, tributes have to be paid through interventions in debates on completely different subjects or through a brief statement by you, Mr Speaker. Could there not be a proper facility for paying appropriate tributes to people we have worked with who have been good friends and to whom we wish to pay due regard?

[Mr Speaker]

I thank the hon. Gentleman for his point of order. I am very open to that proposition, although it would not be right for me to seek to impose a new arrangement. I have, however, sought to update and humanise the procedure. When I first took office, I was told that the proper practice was to report the fact of a death very baldly and rather coldly. When I suggested that I should perhaps utter a couple of sentences of tribute to the Member, I was told, “Oh no, Mr Speaker, that is not the way it is done. That is not appropriate.” I am afraid I decided that it was appropriate, and that we should move on and invest these matters with some humanity. I do not know whether there is a feeling in the House that we should have a short, dedicated session in such circumstances, but I have a feeling that the hon. Gentleman’s point of order will quickly be brought to the attention of the Procedure Committee, whose Chair was here only a few moments ago. Let that conversation begin. I will happily be guided by the House, and I thank the hon. Gentleman for his point of order.

National Insurance Contributions Bill

Monday 8th September 2014 Commons Chamber

Second Reading

16:59

[The Financial Secretary to the Treasury (Mr David Gauke)]

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

This is the third national insurance contributions—NICs—Bill this Parliament. The Government have already taken action to reduce significantly the burden of NICs on earnings and employment through previous Bills. At Budget 2011, the Chancellor announced a £21 a week above-inflation increase to the employer’s NICs threshold. Last April, the employment allowance was introduced, which will benefit up to 1.25 million businesses and charities. Next April, the vast majority of under 21-year-olds in work will be lifted out of employer NICs, which will support 1.5 million jobs. All those measures have been strongly welcomed by business and have contributed to the current record levels of employment.

This Bill contains four measures: simplifying NICs paid by the self-employed; accelerating the payment to the Exchequer of NICs in dispute in avoidance cases, and providing for the issue of follower notices where the scheme or arrangements have been shown to fail in another party’s litigation; applying new information powers and penalties to promoters of avoidance schemes; and introducing a targeted anti-avoidance rule—TAAR—to prevent people from circumventing new legislation tackling avoidance involving employment intermediaries.

Let me explain each of those four measures in more detail, starting with the simplification of NICs paid by the self-employed, which is contained in clauses 1 and 2, and schedule 1. Hon. Members may recollect that at Budget 2014 the Chancellor announced that the Government intended to simplify the NICs collection process for the self-employed, who currently have to operate two different processes for two separate classes of NICs. This followed a 2012 recommendation by the Office of Tax Simplification and a consultation published in July 2013 entitled “Simplifying the National Insurance Processes for the Self Employed”, which sought views on proposals to simplify class 2 NICs.

The number of self-employed individuals in the UK is growing, with more people having multiple jobs and moving in and out of self-employment. Having two separate collection methods for class 2 and class 4 NICs causes confusion and extra work for both the self-employed and Her Majesty’s Revenue and Customs. The objective behind the measure is to modernise the way class 2 NICs are assessed and collected, making the system simpler and more straightforward, and reducing administrative burdens on the self-employed. Class 2 NICs are currently collected via a flat-rate charge of £2.75 per week, paid through six-monthly billing or by direct debit, while class 4 NICs are a percentage charge on profits—of 9% between the lower and upper profits limit and 2% above the upper profits limit—paid through self-assessment alongside income tax.

The aims of clauses 1 and 2, and schedule 1 are to change the way in which class 2 NICs are structured; change the means by which class 2 NICs are collected, by moving their collection into self-assessment, so that they can be collected alongside class 4 NICs and income tax; change the means by which class 2 NICs are enforced, with changes to associated appeal rights to mirror broadly those for class 4 NICs and income tax; and make consequential changes to legislation relating to maternity allowance to allow women to continue to become eligible for it post-reform.

Those changes are proposed to take effect for the 2015-16 tax year onwards, so that the collection of class 2 NICs under self-assessment will be from 6 April 2016. The changes are aimed at simplifying NICs for the self- employed and small businesses—sole traders, partnerships and unincorporated businesses—by enabling them to report their class 2 NICs liability and pay it through their self-assessment, thus reducing the administrative burden of the two current separate collection mechanisms. The six-monthly billing and direct debit systems will cease from April 2015 and July 2015 respectively.

During the consultation there was some concern that the reform would mean that the self-employed would no longer be able to spread the cost of paying class 2 NICs. I want to take this opportunity to reassure the self-employed that there is already the facility in self-assessment to make budget payments to spread the cost of tax and NICs through the year.

Hon. Members may be interested to know that one of the key changes that we made through this reform is that there will no longer be a need for customers with low profits who want to opt out of paying class 2 NICs to apply for a small earnings exception in advance—something that we know they find confusing and burdensome. Under this reform, customers with profits below the new small profits threshold, which will be equivalent to the current small earnings exception threshold, will not be liable to pay class 2 NICs, but will be able to choose to do so on a voluntary basis. That means that those with low profits who want to opt out of paying class 2 NICs will not need to do anything apart from confirm that when they are completing their self-assessment return, while those who still choose to pay in order to protect the benefits entitlement will be able to do so quickly and easily. Rather than a separate process, the decision will be built into the self-assessment return.

There is a small proportion of HMRC customers who pay class 2 NICs but who are not in self-assessment. Those individuals will continue to get a separate class 2 NICs payment request. They will receive that once a year instead of twice a year as they currently do. Hon. Members will be pleased to learn that the tax information impact note published by HMRC about this measure indicates a net administrative burden reduction to the self-employed of £74 million over five years as a result of these reforms.

I now wish to take the House through the provisions in the Bill that deal with accelerating the payment to the Exchequer of amounts of NICs in dispute in avoidance cases. That also includes providing for the issue of follower notices where there is a relevant case in which the scheme or arrangement has been shown to fail in another party’s litigation. Those provisions are in clauses 3 and 4 and schedule 2.

The provisions broadly follow, for NICs, new powers that are included in the Finance Act 2014—the hon. Member for Birmingham, Ladywood (Shabana Mahmood) and I debated this matter not that long ago—which allow HMRC to issue a notice to taxpayers who have used avoidance schemes that have failed before the courts in another party’s litigations. The provisions in the Bill and the Finance Act 2014 are estimated to raise £5 billion in tax and NICs for the Exchequer in the years ahead.

A follower notice sets out HMRC’s view that a judicial decision in another case is directly relevant and that those who receive the notice should settle their disputes. If the taxpayer does not settle in response to this notice, they will face a tax-geared penalty if they are unable to show that their case is materially different from the other party’s litigation or if they did not have reasonable grounds to continue the dispute.

An accelerated payment may be required from taxpayers in the following circumstances: where a follower notice has been issued and the taxpayer decides not to settle their dispute; where taxpayers are involved in schemes subject to disclosure under the disclosure of tax avoidance schemes—DOTAS—rules: and where taxpayers have used arrangements that HMRC decides to counteract under the general anti-abuse rule.

For both follower notices and accelerated payments, taxpayers will have 90 days to make representations. There is no formal right of appeal against the notices or payments, but taxpayers can appeal against any penalties. The measures are expected to lead to the issue of payment notices to around 43,000 taxpayers involved in avoidance schemes currently under dispute with HMRC over the period to the end of March 2016.

Now that I have outlined what the provisions in the Bill do, I want to address some of the points raised in debate on the Finance Bill and by some commentators. One point that has been made is that the measure effectively assumes that someone is guilty before they are proved innocent. The Government do not agree, as most people pay their tax up front and can apply for a refund afterwards, for example through pay-as-you-earn, VAT and tax on interest income, and the measure extends the existing practice of having disputed tax sit with the Exchequer. That is already the case when taxpayers seek tax refunds for disputed avoidance. The measure in no way alters the rights of appeal that people already have when disputing the tax or NICs they owe HMRC; it is only about where the money sits while the dispute continues.

Hon. Members might also be aware that the measure has been described as having retrospective effect. The Government do not agree. It is not retrospective and there is no change to the liability to make a contribution. It involves NICs that the individual and his or her employer would already have paid if they had not entered into the avoidance scheme. The taxpayer can continue to dispute the case and will be repaid with interest if they succeed.

It has also been suggested that taxpayers are likely to find it difficult to find the money to pay. The Government’s view is that we would expect a prudent taxpayer to anticipate that an avoidance scheme might not deliver savings and would be subject to challenge by HMRC and that such a taxpayer should have made some provision against that possibility. I can reassure the House, however, that when a taxpayer has genuine difficulties in paying some or all of the NICs, HMRC will use its usual collection tools, including appropriately structured payment arrangements, to assist taxpayers in paying the required amounts.

I have seen representations from businesses suggesting that they entered into such arrangements to reduce business costs and that the measures will now put unacceptable pressure on their business activity. The Government have put in place an attractive business tax regime and expect everyone to pay the taxes that are due. Avoidance involves trying to pass the burden on to the vast majority who have not tried to avoid tax and where business is concerned it involves attempts to gain an unfair competitive advantage against those who pay their taxes and do not try to avoid tax.

I want now to take the House to the provisions in the Bill that apply new information powers and penalties to the highest risk promoters of tax-avoidance schemes. The provisions are also contained in clauses 3 and 4 and schedule 2. The measure was announced for tax in Budget 2013 and the Government’s intention has been to extend it to NICs at the earliest opportunity. A consultation on the tax aspects, called “Raising the stakes on tax avoidance”, ran until 4 October 2013.

Hon. Members might also be aware that the Finance Act 2014 includes legislation that allows HMRC to issue conduct notices to promoters of tax-avoidance schemes and monitor promoters who breach a conduct notice. The Bill applies the tax legislation to NICs so that the legislation operates as one unified measure that covers tax and national insurance contributions. Monitored promoters will be subject to new information powers and penalties, which will also apply to intermediaries who continue to represent them after the monitoring commences. The monitored promoter will be named by HMRC and the naming details will include information on why the conduct notice was breached. It will be required to inform its clients that it is being monitored by HMRC. Clients of monitored promoters will also be subject to certain obligations that have a penalty for non-compliance and extended time limits for assessments.

The measure is part of the Government’s strategic response to avoidance. It will deter the use of avoidance schemes through influencing the behaviour of promoters, their intermediaries and clients and it is aimed at changing the behaviour of promoters of NICs and tax-avoidance schemes. Naming a monitored promoter should deter intermediaries from acting for them and clients and potential clients from using their products. I can confirm to the House that the measure is not expected to have any significant economic impact and that the cost to HMRC of dealing with the additional information and reporting it is expected to be negligible.

Now that I have outlined what those provisions do, I would again like to address several points that have been raised during Finance Bill debates and by some commentators. It has been suggested that the Bill is too wide and will catch innocent promoters, but the Government disagree. To be covered by the legislation, a person must be the promoter of avoidance schemes that give a tax advantage, or that avoid or reduce a NICs liability, and to have made a significant breach of a threshold condition. The vast majority of promoters will not be in that position.

Hon. Members may be aware that it has been suggested that this response to avoidance is disproportionate, but we disagree. The Government have made it absolutely clear that we are determined to crack down on tax avoidance. The vast majority of taxpayers pay the right tax and NICs at the right time, and should not have to subsidise those who participate in avoidance.

One part of the Government’s strategy is to tackle the behaviour of the supply side of the market—those highest-risk promoters who design and sell avoidance schemes. We want to ensure that promoters who avoid their obligations to HMRC and their clients are made to change their behaviour, and the Bill achieves that by imposing consequences for those who do not meet acceptable standards of behaviour. It requires monitored promoters to tell HMRC about their schemes and clients, and there will be significant fines if they do not comply.

Another argument that has been made against the measures is that they apply retrospectively. The House will not be surprised to learn that the Government disagree with that proposition. While the provisions involve looking back at a promoter’s past behaviour, they are designed to improve current and future behaviour. It is only if there is no improvement in the promoter’s compliance with their obligations that they are subject to significant information powers and penalties.

I shall now describe to the House the provisions relating to the new targeted anti-avoidance rule that will prevent people from circumventing new legislation that tackles avoidance involving employment intermediaries. The proposed TAAR is set out in clause 5. The National Insurance Contributions Act 2014 strengthened legislation in respect of offshore employment intermediaries. It was specifically intended to address the non-payment of employer’s national insurance in the oil and gas industry involving the placement outside the UK of the employer of oil and gas workers working on the UK continental shelf.

Hon. Members may be aware that the temporary labour market is quick to react to legislative change and to find new convoluted ways to reduce the amount of income tax and NICs that would otherwise be liable to be paid. Stakeholders have indicated to HMRC that intermediaries involved in the facilitation of false self-employment may set up avoidance vehicles with convoluted structures that are specifically designed to circumvent the 2014 Act. To dissuade such intermediaries, the Government propose that a TAAR is included in NICs legislation to deter such avoidance. That TAAR is similar to the tax TAAR established for the same purpose through the Finance Act 2014. The rule will focus on the motive for setting up arrangements—on whether it is to avoid NICs—and whether those arrangements result in less NICs being paid. To ensure that the tax and NICs TAARs operate as one, both will take effect from 6 April 2014.

Let me explain why we are bringing forward the TAAR now. The use of employment intermediaries as a way of avoiding tax has grown in recent years, and they are increasingly marketed and promoted as a way of avoiding employer’s NICs. The TAAR will dissuade some businesses from entering into convoluted arrangements to avoid NICs. The proposed measures will help to level the playing field for UK businesses and ensure that compliant UK businesses that facilitate the UK’s flexible labour market are not undercut by those trying to avoid tax.

The Government have already taken action significantly to reduce the burden of NICs on earnings and employment through previous Bills. At Budget 2011, the Chancellor announced a £21 a week above-inflation increase to the employer’s NICs threshold. Last April the employment allowance was introduced, which will benefit up to 1.25 million businesses, and next April the vast majority of under-21s will be lifted out of employer NICs, which will support 1.5 million jobs.

The Bill introduces further welcome measures and is both important and necessary. The modernisation of the way class 2 NICs are assessed and collected will make the system simpler and more straightforward and will reduce administrative burdens on the self-employed. The Bill also includes a package of measures aimed at activity that attempts to reduce the amount of NICs payable to the Exchequer. I commend the Bill to the House.

17:20

[Shabana Mahmood (Birmingham, Ladywood) (Lab)]

I thank the Minister for his introduction to this short Bill, which, as he said, aims to simplify the administrative process of paying class 2 NICs for the self-employed; apply measures from this year’s Finance Bill, now the Finance Act 2014, to NICs; and introduce a targeted anti-avoidance rule, TAAR, to tackle disguised self-employment made possible through employment intermediaries and offshore employers. We support the measures and so will support Second Reading, but we will examine in detail some of the expected practical impacts of the measures in Committee.

As the House will know, national insurance benefits are funded by a system of compulsory contributions on earnings paid by employees, employers and the self-employed. Most of the income from NICs goes into the national insurance fund to pay for contributory benefits, including the state pension, contributions-based jobseeker’s allowance and bereavement benefits. Some NICs money goes directly into the national health service. NICs are the second largest tax after income tax, raising £108 billion in 2013-14.

The self-employed make two types of national insurance contribution. Class 2 NICs are paid by the self-employed at a flat weekly rate of £2.75. A self-employed person can apply to be exempted from liability if their annual profits are under a certain threshold—the so-called small earnings exemption—which is currently set at £5,885. Class 4 NICs are paid annually by self-employed persons on profits immediately derived from a trade, profession or vocation that are chargeable to income tax. Class 4 NICs are payable at a rate of 9% on profits between £7,956 and £41,865 and 2% on profits above £41,865.

Until now, payments of class 2 and class 4 NICs have had to be made separately. Individuals may pay class 2 NICs by direct debit either twice a year, in January and July, or monthly, paid four months in arrears. Alternatively, HMRC will issue two payment requests a year. In contrast, self-employed persons pay class 4 NICs with income tax on completion of their self-assessment tax return. From 2011, the dates on which payment of class 2 NICs is due have been aligned with the dates for tax and self-assessment—31 January and 31 July each year—but payment of both has continued to be made separately.

As the Minister said, when the Office of Tax Simplification looked at these matters in 2012, it suggested bringing class 2 NICs within self-assessment, and that this would bring administrative benefits to self-employed persons and businesses. In July 2013, HMRC published a consultation document in which it noted that the present system places significant burdens on small business, and that while class 2 NICs accounted for less than 0.3% of the £102 billion-worth of NICs collected by HMRC in 2012-13, they accounted for more than 40% of national insurance-related telephone calls to HMRC and the associated processing work that resulted. The Bill therefore changes the liability for class 2 NICs so that it arises at the end of the tax year and not weekly, as now, and moves class 2 NICs into self-assessment, so that self-employed people can deal with their class 2 NICs together with their income tax and class 4 NICs.

We support the aim of making the system easier for self-employed people and reducing the administrative burden caused by the current arrangement of having two separate systems for collection of class 4 and class 2 NICs. Almost one person in six is self-employed, so this is a significant issue affecting a large number of people. Making the system easier to navigate is therefore welcome and of genuine practical benefit for the self-employed.

A number of specific issues arise as a result of this change on which we will seek greater clarification from Ministers in Committee. However, it would also be helpful if the Exchequer Secretary offered some further comments on the points I am about to raise, as that could help to clarify the issues ahead of Committee. The first relates to the maternity allowance. At present, 25,000 self-employed women claim maternity allowance each year. Entitlement to maternity allowance is not assessed on self-employment and class 2 NICs paid in a particular benefit year. Instead, it is assessed over a test period of 66 weeks up to and including the week before the baby is due. Collecting class 2 NICs at the end of the tax year means that some women may find that it appears as though they have not been paying class 2 NICs during the period needed to make them eligible for the maternity allowance.

In order to address this problem, the Government have proposed measures in the Bill that would enable women who have not had the opportunity to file a self-assessment return and pay class 2 NICs to pay them early in order to secure maternity entitlement at the standard weekly rate. However, there is a danger that these proposals may be impractical. Women would have to make voluntary contributions before they filed their self-assessment returns, and this demands a very high level of forward planning on their part. The provisions may therefore require some additional clarification. If the Exchequer Secretary or the Financial Secretary have had any additional representations on these points—I know that some stakeholders have been raising such concerns—it would be helpful if they set out their thinking. The Minister will be aware that the Chartered Institute of Taxation has suggested that the Government should review these changes at the earliest opportunity—in two years, I think—to ensure that they have not resulted in a reduction in the number of claims for the standard rate of maternity allowance. Again, it would be helpful to have an indication of the Minister’s current thinking on this point.

For the 650,000 self-employed households that claim universal credit, these proposals will have a different impact. Universal credit regulations require the individual to report their income, net of certain expenses, on a monthly basis. That net income is then used to establish their entitlement to universal credit. Certain safeguards are built in so that if income from self-employment for an assessment period falls below a certain level, the claimant’s income is treated as being a higher amount called the minimum income floor. Because universal credit is assessed on a monthly basis, if a claimant has to pay all their class 2 NICs in one month, this could push their earnings under the minimum income floor, thereby reducing their universal credit for that month. Simplification should not come at the cost of hardship, We will press the Government for assurances that they have fully considered the potential impacts of this change along with the introduction of universal credit, and the interplay between both policies.

The tax information and impact note suggests that the option of monthly payments will still be made available to self-employed persons and businesses. However, there is no provision for that in the Bill. A number of stakeholder groups have suggested that the retention of a monthly payment system would be of particular value to those on very low incomes who may struggle with one lump sum payment. Even accepting that for many people the total amount does not seem large or too onerous, of course that is not necessarily the case for those on extremely low incomes, and retaining the monthly payment option would therefore be helpful. It is not clear why the note suggests something that the Bill does not touch on. I would be grateful for some further clarification on that.

The Chartered Institute of Taxation points out that there will be a gap of 22 months between the collection of class 2 payments for 2014-15 and the collection of payments for 2015-16 as liability moves from a weekly basis to arising at the end of the tax year. Thereafter, the payment of class 2 will be in arrears on 31 January following the end of the tax year. This could affect entitlements to benefits. Under the current system, the entitlement to many contributory benefits is based on the claimant having paid contributions and operating on a pay-as-you-go basis. Have the Government considered the cash-flow implications of class 2 NICs coming in up to 10 months after the end of the tax year, rather than being paid in-year as they are at the moment? Are they able to give us some more information on that today?

We will also seek reassurance and confirmation that moving class 2 into self-assessment will not adversely affect entitlement to contributory benefits. These are significant changes and the Government will need to ensure that they are properly advertised and that taxpayers are educated about them. We do not want a situation to arise whereby people have gaps in their payments. As I have said, NICs relate to eligibility for important benefits that people rely on. We need greater reassurance from the Government that they will have a full programme of education and information about the changes. It is also fair to say that we will need a relatively widespread publicity programme ahead of April 2015, as existing direct debits will need to be stopped. It would be helpful if the Exchequer Secretary could tell us what the Government have planned in relation to educating taxpayers who will be affected by the changes.

As the Financial Secretary said, the Bill also extends measures introduced in the Finance Act 2014 to cover NICs, particularly in relation to follower notices, accelerated payment notices and measures to tackle high-risk promoters of tax avoidance schemes. During the passage of the Finance Bill we had an extensive debate on the issues raised by the new provisions, which are the same as those contained in this Bill, and we will continue to press Ministers in Committee on the practical arrangements for the measures.

On follower notices, we welcomed the amendment made on Report of the Finance Bill, which brought in a right of appeal on three grounds where a follower notice has been issued. Outside of those three grounds, however, the only other option will be for taxpayers to seek a judicial review. What further reassurances can Ministers give that follower notices will be issued only in cases that are on all fours, as it were, with the precedent or lead case, so that occasions where a taxpayer may have to resort to a judicial review are kept to a minimum?

It is important that the internal systems operated by Her Majesty’s Revenue and Customs in deciding whether to issue a follower notice allow for the points of difference in a case to be considered, rather than the process amounting to a more straightforward box-ticking exercise to determine eligibility for a notice. Now that the Finance Act is law, I would be grateful if the Government could set out what further work has been done on the approach and methodology that will be adopted by HMRC staff and officials as they make important decisions about whether to apply a follower notice to a particular case.

As the Financial Secretary has noted, there has been considerable controversy and heated debate about whether accelerated payment notices amount to retrospection, as we discussed in Committee. Although we have put to him the concerns of stakeholders and constituents from all over the country, I agree with him that, from a legal perspective, they are not retrospective per se. The issue is more one of tax liability that has already been disputed and of where that liability sits. We have, therefore, supported the measures relating to accelerated payment notices. The Government have assured the House that decisions about whether to issue an APN will be made only by HMRC staff with sufficient seniority who are at a high grade. The Financial Secretary and I have had a number of discussions about HMRC staffing and resources, so he will not be surprised to hear that I will be taking up those issues again.

The Association of Revenue and Customs believes that HMRC faces a demographic time bomb, with more than half its work force aged over 45 and 18% over 55. That proportion is even higher at senior level, where about 30% of grade 6 employees are over 55. It is important to know how that will affect the implementation of APNs. We will need to be satisfied that there will be enough sufficiently experienced staff and that those who are due to retire are being replaced at the correct rate.

We have pressed Ministers on the resourcing of HMRC, and I note the Financial Secretary’s comments in our previous debates about the expansion of the counter-avoidance team at HMRC. Again, we will pick that up in greater detail in Committee. Now that the Finance Act is law, we must keep a close eye on implementation and resourcing. Especially given the high level of interest in such matters, the first decisions made about follower notices and accelerated payment notices must be robust and stand up to scrutiny if they are to inspire confidence within the population of taxpayers.

The Bill will introduce a new targeted anti-avoidance rule to cover the payment of national insurance contributions, which sits alongside the provisions in this year’s Finance Act aimed at tackling the issue of employment intermediaries who falsely label workers as self-employed to reduce their tax liabilities. The problem is widespread, and a Government review found that at least 100,000 individuals working in this country were employed through an intermediary company that had no presence, residence or place of business in the UK. In many cases, the employee was unaware that their payroll was located offshore and that tax was avoided on their earnings.

For workers falsely badged as self-employed, particularly those who do not know that that is the case, the impact is that they are not eligible for many of the benefits available for employed earners, such as holiday and sickness pay. This year’s Finance Act amended legislation directly to address the issue in relation to the payment of income tax. A worker will now be designated as an employee if they are under the supervision, direction or control of someone else, and in that case they must be paid through PAYE, rather than as self-employed people. That is a change from the previous designation, under which a worker was deemed to be an employee if they provided their services personally. It was found that many intermediaries could exploit the test by claiming that there was no obligation for the worker to provide their services personally, and to get around that, a clause was often inserted into a worker’s contract stating that they could send someone else to do their work, even though the employee in reality wanted that specific worker.

The role of the TAAR in this Bill is to ensure that the new measures cannot be circumvented, and that workers who would be employed earners if it were not for the intermediary arrangements are treated as employed earners. The TAAR will allow HMRC to consider both the motive for setting up such an arrangement, including whether it was set up with the motive of avoiding NICs, and what was achieved, including whether it resulted in less NICs being paid.

During debates on the Finance Bill, we supported the new measures and the corresponding TAAR for income tax, but we stressed the importance of considering the resource that HMRC would need both to implement the changes and to ensure that sufficient guidance was provided to those affected. The same applies to this Bill. In addition, we will continue to press, as we did on the Finance Bill, for further examination of the case for having deeming criteria to combat disguised employment in the construction industry, particularly where such practices are a significant problem, with self-employment levels at 40% compared with an average of 14% across all industries. However, the TAAR envisaged in this Bill takes us forward in dealing with the problem, and we will support it.

With those points, I hope that I have given Ministers sufficient notice of the debates that we will have as the Bill progresses, and I look forward to picking up those issues in greater detail in Committee.

17:38

[Ian Swales (Redcar) (LD)]

I rise to say a few words in favour of the Bill, which the Liberal Democrats wholeheartedly support. We are very pleased that it incorporates measures to deal with tax avoidance.

The whole problem of disguised employment is rife across the country, and the Bill will go some way to combat it. The shadow Minister, the hon. Member for Birmingham, Ladywood (Shabana Mahmood), spoke about it as though people were unwilling to be disguised employees, but in many cases people are willing disguised employees who duly make savings themselves. I believe that the Bill will help to combat the problem.

The measures in relation to offshore workers are particularly welcome in my constituency, which has a large number of them. Some only realised what their real national insurance status was when they claimed their pension and found that their contribution record was nothing like they expected, because the payments that they thought they had paid were not properly rendered as national insurance contributions. I therefore very much welcome the removal of another anomaly in the system.

I look forward to the Bill passing smoothly through the House, as it so far seems to be doing.

17:39

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

Before I begin my remarks, I should probably declare an interest as a member of the all-party parliamentary group on the freelance sector. As such, I am fully aware of the invaluable contribution that genuinely self-employed people, including freelancers, make to the economy. They play an increasingly prominent part in the generation of economic growth and prosperity.

As my hon. Friend the Member for Birmingham, Ladywood (Shabana Mahmood) and the Financial Secretary set out, the main aim of the Bill is to make life a bit easier for self-employed people in respect of the payment of their national insurance contributions. That is more important than ever, given the structural changes in our labour market over the past few years. There are 4.5 million self-employed people, which is more than at any point in the past 40 years, according to the Office for National Statistics. Welcome though the changes are, the Government need to go further in supporting the self-employed because, while we know that the majority of working people are not feeling better off in their pockets, it is becoming increasingly clear that the self-employed have been hit particularly hard by the cost of living crisis of the past few years.

The latest labour force survey figures from the ONS show that more than a third of the new jobs that have been created since the last quarter of the last Parliament—39%—are self-employed jobs. The self-employed make up one in seven people in the work force. The Institute for Public Policy Research recently described the UK as the

“self-employment capital of Western Europe”.

Although the Government like to boast that 2,000 businesses have been set up and have been “flourishing” in every month over the last year, that masks the true effect of the cost of living crisis on many self-employed people. Although self-employed people are included in the employment figures in the ONS labour force survey, they are not included in the pay figures. The Resolution Foundation has concluded that, were the 4.5 million self-employed people included in the labour force survey, average wages could have fallen by a further 20% due to the huge shift towards low-paid self-employment. Whereas the official figures show that working people are, on average, £1,600 a year worse off since 2010 after inflation, Labour’s analysis shows that the self-employed have been hit particularly hard and that their average incomes have fallen by £2,000 a year. According to the Institute for Fiscal Studies,

“the fall in average living standards was caused primarily by sharp falls in gross earnings and self-employment income.”

We know that the Bank of England’s Monetary Policy Committee has a range of views on the extent to which the growth in self-employment has painted a false picture of the strength of the labour market. We also know from a recent survey by the Resolution Foundation that more than a quarter of those who have become self-employed in the past five years—almost half a million people—would rather have salaried jobs.

It is for those reasons that the shadow Secretaries of State for Business, Innovation and Skills and for Work and Pensions have written to Sir Andrew Dilnot, the chairman of the UK Statistics Authority, to ask him to examine whether new measures are needed to take better account of the earnings of self-employed people. The truth is that they are working harder for less and that many of them are struggling to make ends meet. We must ensure that they get the support that they need.

My hon. Friend the Member for Birmingham, Ladywood set out the Opposition’s concerns about the Bill. The first relates to clauses 1 and 2 and schedule 1, which will simplify the payment of national insurance contributions that are currently paid by monthly direct debit or in six-monthly instalments, so that they will be paid under the self-assessment regime at the end of the tax year. Although that simplified process will be welcomed by many self-employed people, there are concerns that shifting all liability for NICs to the end of the tax year, potentially to be paid in one big lump sum, could be difficult for low-paid workers.

The Chartered Institute of Taxation recommended that the option of monthly direct debit is retained, and the Government’s tax information and impact note also anticipates that

“a small number may want to continue to make Class 2 NIC payments through a regular payment option.”

No such option is referenced in the Bill, however, so it would be helpful if the Minister cleared up that point and said whether there is any intention to include such a measure.

There are also implications for self-employed people who receive universal credit—I say receive, but I mean when, or if, universal credit is ever fully rolled out, given the current timetable. Because under universal credit income is reported net of expenses on a monthly basis, as my hon. Friend the Member for Birmingham, Ladywood said, if income falls below a certain threshold in a given month—the minimum income floor—the claimant’s income is treated as being a higher amount, and they therefore lose some of their universal credit entitlement for that month. NICs and income tax will count as such deductions, and in any one month liability may fall on both of those under self-assessment. That could result in universal credit claimants losing out in that month, which could set them back significantly for a longer period. The Low Incomes Tax Reform group has expressed its concerns that that shift could “spell misery” for some self-employed people, and create a system where

“payments will be made much later and could affect entitlements to benefits in the meantime.”

[Ian Swales]

I am following the hon. Lady’s argument with interest and she is making an excellent point. Does she believe that the annual assessment and payment of class 2 NICs will cause a big problem for people on universal credit? How does she think that could be dealt with? Clearly, it is part of their costs and deductions from income, which will not be known when they are claiming and receiving universal credit.

[Catherine McKinnell]

I think the hon. Gentleman very much agrees with the concerns raised by Labour Members, and I hope that the Minister will have some suggestions on how those potential pitfalls can be addressed. If not now, thought should certainly be given to that before the Committee stage to ensure that the most vulnerable self-employed workers, and those on lowest incomes, are not penalised by the change in processing national insurance contributions. We accept that there are clear benefits to reducing red tape and the administrative burden on self-employed people who would benefit from such a measure, but there are those in a more vulnerable position who could be forced into “misery”, as the Chartered Institute of Taxation puts it well.

There is also an increased administrative burden for those who are self-employed as a result of the introduction of universal credit. They will have to draw up two separate accounts—one for HMRC that they report yearly, and one for the DWP that they report monthly. Perhaps Ministers will provide some much-needed clarity about the provisions that they intend to put in place to support low-paid self-employed people, so that they are not disadvantaged by the Bill.

My hon. Friend the Member for Birmingham, Ladywood mentioned the 25,000 self-employed women who claim maternity allowance each year. Currently, class 2 contributions are the means by which a self-employed earner accesses entitlement to contributory benefits, including the standard rate of maternity allowance. In order to receive that, a self-employed woman must have paid 13 weeks’ of class 2 NICs within the previous 66 weeks. That shifting liability for class 2 NICs to an annual payment to cover the previous 12 months’ liability could mean that they fail to satisfy those criteria and are not able to access the standard rate of maternity allowance. HMRC’s consultation document from July 2013 flags those concerns. It states:

“The Government recognises that the proposals have implications for the way eligibility for”

maternity allowance

“is determined for pregnant self-employed women and will be considering how best to ensure the changes have no adverse impact for the small group who might otherwise be affected.”

Despite the promise of that wider review of maternity allowance eligibility for self-employed women, the Government have settled on what has been described as a “wholly impractical” solution, whereby women must pay their class 2 NICs throughout the year of their own accord before they file their self-assessment returns at the end of the year.

The Bill’s aim is to simplify NICs for the self-employed, but the proposed approach is anything but simple. In fact, it places a much greater burden on some 25,000 pregnant women each year who want to access their entitlement to the standard rate of maternity allowance. The Chartered Institute of Taxation has labelled that approach as “impractical”, and has suggested that a review should be carried out after two years to see what impact it has had on the claims of self-employed women for standard rate maternity allowance. Perhaps the Minister could respond to those concerns. Have the Government considered alternative approaches, and why have they settled on what has been described as an impractical approach for those women who could be affected?

My hon. Friend the Member for Birmingham, Ladywood spoke in depth about the anti-avoidance measures in the Bill, which were debated at some length in the Finance Bill Committee. However, I want to make the general point that the Opposition are committed to anti-tax avoidance measures. We believe strongly that everybody should pay their fair share. That is why we support the measures in the Bill, but what reassurances can the Minister provide for hon. Members that HMRC will be sufficiently resourced in order to implement the measures and the safeguards? My hon. Friend mentioned the demographic challenges that HMRC is likely to face in the coming years, and the challenge of the numbers of those available to ensure that the promised safeguards are put in place. Will the Minister provide reassurances on that? I am sure the matter will be debated at some length in Committee.

To conclude, we have only to look at the Government’s past record on tax avoidance to understand why the Opposition seek those reassurances. The Government have got it wrong in some respects, such as on the UK-Swiss tax deal, and have over-egged their tackling of tax avoidance and the tax gap, which the National Audit Office recently said is almost £2 billion lower than it should have been, and that the Government have mis-stated the situation. Ministers must provide reassurance for hon. Members and for those who are interested in the debate that they have learned those lessons, and that we will not experience tax avoidance in relation to measures in this Bill that the Government are similarly unable to deal with.

17:53

[The Exchequer Secretary to the Treasury (Priti Patel)]

This has been an efficient debate—the Bill was discussed at great length in debates on the Finance Bill. On that basis, I will not recap the purpose of the Bill or the clauses, which have been effectively discussed. However, it is fair, right and proper that I address the points made by Labour Members. Clearly, there is consensus in a number of areas—work has taken place in debates on the Finance Bill and discussions have been had—but there are a number of areas that I should like to address.

The hon. Member for Birmingham, Ladywood (Shabana Mahmood) asked a number of questions. I will begin the debate on them now, and I have no doubt that they will be explored further in Committee. On the reform of maternity allowance for self-employed women, I challenge the assertion that the process is burdensome. As we have heard, the Bill is about simplification and introducing a degree of efficiency to NICs. Primary legislation and supporting regulations, and a revised claim process, will ensure that expectant mums are no worse off than they were under the previous class 2 arrangements. Right hon. and hon. Members will be pleased that HMRC and the DWP are working together to ensure that the process is straightforward and simple for them. As I have said, that will no doubt come up again in Committee.

The hon. Members for Birmingham, Ladywood and for Newcastle upon Tyne North (Catherine McKinnell) made a point on reform for the low paid and the impact of universal credit. It is fair to say that most self-employed people have the option to pay their class 2 NICs regularly using the budget payment option that is already available in self-assessment. Importantly, they are enabled to spread the cost of those payments. That is not legislated for in the Bill because the option to make the budget payments already exists within the current system of self-assessment. Once the Bill becomes law, the issue is how we raise awareness to ensure that people know about that. NICs are accounted for on an accruals basis, so the important fact is the time period within which the money is due rather than the date for payments. Of course, they will continue to be counted in the tax year, but as I have said, it is a question of spreading the costs.

The hon. Member for Birmingham, Ladywood rightly asked how HMRC will ensure that it applies the rules fairly for all taxpayers. It is fair to say that that argument was rehearsed in Finance Bill debates. The Government recognise that there are significant new powers. Obviously, the system must be administered fairly and consistently for all taxpayers. To that end, HMRC will establish clear governance for the key decisions on which cases can be designated as followers, which disclosure of tax avoidance schemes will be within scope and on the appointment of designated officers for the calculation notices. One important point is that clear separations will be established so that reviews of follower notices are carried out independently of the original issuing team. In addition, clear internal guidance and training will be provided for staff within HMRC on how they are to apply the rules. That goes with the clear external guidance, which has been published by HMRC so that taxpayers and advisers know how the rules impact on them. This is about not only fairness, but transparency, so that there is no confusion. On follower notices, those who know that they are deliberately avoiding tax will also know that they are being looked at, which is important. It is fair to say that our determination to lift every stone, and ensure that those who deliberately avoid tax are actively watched and pursued, is unequivocal.

The hon. Member for Newcastle upon Tyne North touched on wage growth for self-employed individuals. The self-employed community is growing, which is a good thing. This is about how we support them through the tax system, but there must be agreement that the only way to raise living standards is to tackle wider challenges and economic problems. We appreciate that times are tough, but this is about how we support hard-working people and the self-employed. We have increased the tax-free personal allowance to £10,500 from April next year, which will save the typical taxpayer £805 per year. We have also taken more than 3.2 million people out of tax altogether and cut income tax for someone on the minimum wage by nearly two thirds. There have been other effective measures such as the freeze in fuel duty and the freeze in council tax in every year of this Parliament.

There is no doubt that more discussion will follow in Committee, but given that there is a great deal of agreement on the Bill’s provisions, at this stage I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time.

National Insurance Contributions Bill (Programme)

Monday 8th September 2014 Commons Chamber

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the National Insurance Contributions Bill:

Committal

(1) The Bill shall be committed to a Public Bill Committee.

Proceedings in Public Bill Committee

(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Tuesday 28 October 2014.

(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.

Consideration and Third Reading

(4) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.

(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.

(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and Third Reading.

Other proceedings

(7) Any other proceedings on the Bill (including any proceedings on consideration of Lords Amendments or on any further messages from the Lords) may be programmed.—(Mark Lancaster.)

Question agreed to.

NATIONAL INSURANCE CONTRIBUTIONS BILL (WAYS AND MEANS)

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the National Insurance Contributions Bill, it is expedient to authorise:

(1) provision for, and in connection with, the application of Part 4 of the Finance Act 2014 in relation to national insurance contributions;

(2) the payment into the Consolidated Fund of any increase attributable to the Act in the sums payable into that Fund under any other Act.—(Mark Lancaster.)

Question agreed to.

Business of the House (10 September)

Monday 8th September 2014 Commons Chamber

18:01

[The Deputy Leader of the House of Commons (Tom Brake)]

I beg to move,

That at the sitting on Wednesday 10 September, the Speaker shall put the Questions necessary to dispose of proceedings on the Motion in the name of Jesse Norman relating to Select Committee on Governance of the House not later than two hours after their commencement; such Questions shall include the Questions on any Amendments selected by the Speaker which may then be moved; proceedings may continue, though opposed, after the moment of interruption; and Standing Order No. 41A (Deferred divisions) shall not apply.

Last Thursday during the business statement, the Leader of the House announced, following representations from and discussions with the Backbench Business Committee, that on Wednesday of this week the House would consider a motion to establish a Select Committee on governance of the House. The motion to establish the Select Committee has been found time additional to that already provided for Back-Bench business. Given the level of interest throughout the House and the importance to the House of resolving its governance arrangements in a timely manner, the Government have brought forward the motion to allow the issue to be considered and resolved after the moment of interruption on Wednesday should that prove necessary.

The House will be aware that the major item of business being taken on Wednesday is the general debate on Ukraine, the middle east, north Africa and security. That is obviously a significant debate, and it is important that the House is given an adequate opportunity to debate those issues. That is why the Government have agreed, on this occasion, to provide Government time for the debate on international issues, in addition to the statements and other debating opportunities that the House has had to consider those issues. I hope the House will agree that this business motion will facilitate the business of the House in a sensible way, and I commend it to the House.

18:02

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

We support the motion to timetable a Back-Bench debate on Wednesday evening on the creation of a Select Committee on governance of the House. The time proposed by the Government will give Members throughout the House a sufficient chance to have their say, and the motion also recognises that we will have spent a significant amount of time on Wednesday debating international matters of crucial importance.

Mr Speaker was right last week to say that it is important that the House move as one on the issue of its governance. That is why we welcome both the chance to have the debate and the motion proposed to the Backbench Business Committee. I do not want to address the content of Wednesday’s debate now, but it is clear that the moment is right to consider splitting the roles of the Clerk and the chief executive, and that the House should have a process for considering that properly and in a timely fashion, so I hope that Members will support today’s motion.

Question put and agreed to.

Backbench Business

Monday 8th September 2014 Commons Chamber

Food Fraud

Monday 8th September 2014 Commons Chamber

[Relevant documents: The Eighth Report from the Environment, Food and Rural Affairs Committee, Session 2012-13, on Contamination of Beef Products, HC 946, and the Government response, HC 1085; and the Fifth Report from the Environment, Food and Rural Affairs Committee, Session 2013-14, on Food Contamination, HC 141, and the Government response, HC 707.]

18:04

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

I beg to move,

That this House has considered food fraud.

First, I thank the Backbench Business Committee for granting the debate on this important and topical issue. I must say that some of us had anticipated that the Government business would take rather longer this afternoon and that this debate would start rather later. I was given the information that we might have the debate this evening rather late last week, and despite the best efforts of my staff to contact right hon. and hon. Members to urge them to make a contribution, the message obviously got out rather late. Perhaps there was not much contentious business to debate today, either. Nevertheless, the debate is topical, coming soon after the Elliott report, which the Government commissioned following the horsemeat scandal of just over a year ago. I should declare my interests related to meat production, which appear in the Register of Members’ Financial Interests.

I first became interested in food crime when I was elected in 2001. We were in the middle of a foot and mouth disease outbreak, and the election had actually been postponed for a month until the first Thursday in June so that the outbreak could be contained and dealt with. Unfortunately, it went on well after the election, particularly in my constituency. Thousands of sheep were slaughtered on the Brecon Beacons in an attempt to control the disease, which did happen. At that time, farmers were concerned about the lack of checks taking place at the ports on meat coming into this country. They were particularly concerned about the seaports through which meat was imported and the airports through which illegal meat was thought to come. I tabled a ten-minute rule Bill to ask the Government to re-examine the checks and balances, and that was what happened.

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

I congratulate my hon. Friend on securing the debate. Does he agree that the lesson that we have learned about food fraud is that we need spot checks on processors so that they do not know we are coming? We should go to them and find out exactly what sort of meat they are processing so that we can stamp out fraud, rather than carry out general testing all the time, which is expensive.

[Roger Williams]

I thank my hon. Friend for that point, which is made in the Elliott report. Intelligence-led monitoring is also important. Controls on food coming into this country have been tightened at the airports and seaports. Sniffer dogs have been introduced at Heathrow, and I have been there and seen them in action. It was extraordinarily impressive to see dogs being able to find little bits of food that were being brought into the country—not intentionally but because somebody had forgotten they had left a ham sandwich in their suitcase or backpack.

[Ian Swales (Redcar) (LD)]

I congratulate my hon. Friend on fighting on this issue. My hon. Friend the Member for Tiverton and Honiton (Neil Parish) mentioned checks on food processors. Given the amount of food that comes into this country already processed, is my hon. Friend the Member for Brecon and Radnorshire (Roger Williams) satisfied that spot checks and other measures can be undertaken outside the country?

[Roger Williams]

My hon. Friend makes a good point. Of course, because we are in the European Union we expect that all food that comes into this country will have been slaughtered, processed or manufactured to a standard that would be acceptable in this country. Food coming in from third world countries is another matter altogether. One issue that I concentrated on when I first became involved with the issue of food fraud was the smuggling of meat into this country from Africa. There were various types of meat, but the most serious were parts of primates, including gorillas, apes and monkeys, which certain ethnic communities in this country particularly value. It was obvious that there was no scrutiny of the safety of these meats or even what they were. There was a real concern that not only animal diseases but human diseases could be brought in by this means. Much of the meat came from west Africa. The problem of Ebola today shows that we might still face a real danger from this problem.

I certainly welcomed the final publication last Thursday of the Elliott review of the integrity and authenticity of the UK food supply. We waited quite a long time for the report, but it was worth the wait because it is a comprehensive and well set-out document. It demonstrates the UK Government’s commitment to improving the integrity and assurance of our food supply networks. Professor Elliott’s report highlights that the UK has one of the safest food supply systems in the world, with a great deal of work being done to ensure that food is safe to eat and free from chemical and microbiological contamination, and all those involved in the supply of food and those responsible for developing and enforcing legislation should be commended for what has been achieved.

More attention and more resources, however, need to be put into food authenticity and combating food fraud and food crime. At the beginning of the horsemeat problem, the important question arose about what was meant by adulteration and what was meant by contamination. As far as I am concerned, contamination is not the deliberate introduction into food of other substances—it happens by mistake or inadvertently—whereas adulteration is the deliberate introduction into food of mostly lower-priced commodities. That issue was certainly at the heart of the horsemeat scandal.

[Mr David Heath (Somerton and Frome) (LD)]

My hon. Friend will remember that I had some involvement in the problems at that time. It was important early on to establish a threshold for contamination/adulteration that made sense. Otherwise, we would have been in the absurd position of testing every piece of meat and finding that it was contaminated simply because somebody in the room might be shedding human DNA or because the meat had been sitting in a butcher’s shop where beef or pork sausages were not in separate airtight compartments. The level of the threshold, it seems to me, was one of the most important early advances we made in understanding the issue and ensuring that we were not attacking the wrong problem.

[Roger Williams]

I commend my hon. Friend for the work he did right at the beginning of the horsemeat scandal. He provided us with greater clarity about what was involved and about the difference between contamination and adulteration. Of course, contamination is not something that should be taken lightly in its own right. Halal meat contaminated by pork, for example, is a very serious matter for the religious beliefs of some of our communities. I do not in any way view contamination as of little interest; it is of great interest, but it must not be confused with the deliberate adulteration of food.

Food fraud is corrosive of consumer confidence, which has ramifications right through the food chain. The horsemeat contamination incident last year is an example of such a damaging effect on the food industry and on consumer trust. After “Horsegate”, a poll showed that only 56% of consumers were confident that the food they bought was what it claimed to be—a rather shocking statistic. This figure is far too high, and it is one of the reasons why it is so important that we are having this debate today.

Small businesses are especially vulnerable to food fraud, and according to the Elliott review, many have said they are struggling to stay in business because they are competing against those who cheat. That goes for farmers, too, as they grow the raw ingredients for the food industry and rely heavily on consumer confidence. It is essential to safeguard this industry.

[Neil Parish]

I thank my hon. Friend for giving way a second time. Does he agree that there is huge pressure on the processors to reduce their prices, especially from some unscrupulous retailers? Of course, if we drive the price too low, beef cannot be put in the beefburgers and other things start to get mixed in with them. Although retailers are not directly responsible for what happens, I think they play a rather bad part in the whole saga.

[Roger Williams]

My hon. Friend is completely right that food fraud is price-driven—there is no doubt about that. Food adulteration and fraud are as old as history, as we know from many centuries of experience. The watering down of milk was one such example, but an even more heinous crime is the watering down of beer, which should carry an especially heavy penalty!

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

Is there watered-down beer in Brecon?

[Roger Williams]

We do not have any examples in Brecon; it is mostly down in south Wales! But the history books are full of examples of this sort of thing.

As I was saying, it essential to safeguard this industry. Food and farming is the UK’s largest manufacturing sector, contributing £96 billion to the economy and employing almost 4 million people. It is essential to keep up confidence in the UK, while also protecting the reputation of our food abroad.

Another point inn Elliott’s proposals is the setting up of a cross-Cabinet Committee on food safety and food crime. I fully agree with that recommendation and I am glad that the Government have accepted it.

[Huw Irranca-Davies]

I congratulate the hon. Gentleman on securing this debate and thank him for giving way. Particularly in the light of the splitting of the roles and responsibilities of the Food Standards Agency in 2010, was he surprised that some sort of cross-Government or cross-Cabinet regular systematic group was not established to take account of that fact?

[Roger Williams]

The hon. Gentleman makes a very good point—one that is addressed in the Elliott report and one that the Government have accepted, as I said. I am very pleased that the Government have accepted all the report’s recommendations, so we should pay tribute both to the report and to the Government’s response to it.

Following on from the hon. Gentleman’s point, there was such a cross-Government forum for co-ordination on food at Cabinet level until May 2010. Up to that point, there was also more clarity on the responsibilities for food, as the FSA then had the responsibility for authenticity, testing and policy on compositional labelling of food, as well as on nutrition policy, which subsequently went to the Department of Health.

[Huw Irranca-Davies]

I thank the hon. Gentleman for generously giving way again. In his interim report, Professor Chris Elliott made it clear that he wanted to see both responsibilities returned directly to the FSA. In his subsequent final report—he has made it clear that it is because of the political difficulty—he has stepped back a little from that, but the suggestion is that he would still like to see this done. What does the hon. Gentleman think about that? Should these responsibilities be returned to the FSA?

[Roger Williams]

If the hon. Gentleman reads the full report by Professor Elliott, he will find that he responds to the concern that the final report took quite a long time to come out. He makes it very clear that none of the recommendations in the final report is the result of any political pressure, but are the result of his committee looking at the issue and coming up with what he believes are the best proposals for protecting food and consumers.

[Huw Irranca-Davies]

No doubt the Minister will correct me later if I am wrong, but I believe that Professor Chris Elliott said he was loth to include the full recommendation in the interim report—that is, the recommendation that all the responsibility should be returned to the FSA—and made it clear that that was because of the political difficulty of doing so. I make that point purely for the sake of accuracy.

[Roger Williams]

I am sure that the hon. Gentleman will develop his point further when he makes his own speech, and that the Minister will do so as well.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

I congratulate my hon. Friend on securing the debate. As he has already pointed out very eloquently, the Government will be setting up—at a very early date—a cross-departmental Committee, which I think will prevent the same thing from happening again.

On Thursday, the Minister did not have time to respond to an important question that goes to the heart of this issue, namely the question of what is happening in regard to traceability and labelling at European Union level. I hope that we shall be able to stay here all evening and hear about that at first hand from him.

[Roger Williams]

As always, the Chairman of the Select Committee has made a very good point. I listened to what she said on “Farming Today”. Was it on Thursday? I cannot remember. When one is up very early in the morning, the days may not be readily identifiable. Anyway, the hon. Lady made the very good point that the real problem with the horsemeat scandal was that we had never identified the point at which the horsemeat entered the food chain. There have been a number of prosecutions, but they have taken place on a very small scale. Whoever perpetrated this fraud on such a large scale is still out there, and is still, perhaps, waiting for an opportunity to commit either the same or a similar crime.

The real problem is that we do not know where that horsemeat came from. Were the animals slaughtered in a registered slaughterhouse? Were they slaughtered in a farm barn? Was the meat properly looked after? As it turned out, there was not, we understand, a very big threat to public health, but that may have been due more to luck than to judgment.

[Miss McIntosh]

In order to prevent a Select Committee love-in, may I press my hon. Friend a little further? I think that the key proposal from Professor Elliott is the proposal for a food crime unit, with intervention by the police. However, even a close reading of the Secretary of State’s written statement does not make immediately clear what powers the police will have. Perhaps my hon. Friend has had more time to look into the matter than I have.

[Roger Williams]

I have not, but I was going to mention the establishment of a police crime unit, which I think is essential. This was criminal: laws were broken, and people should face the consequences. I hope that the new unit will ensure that those people are brought to book in future, that they are named and shamed, and that they will not be able to have a role in the food industry again.

[Neil Parish]

I thank my hon. Friend for indulging me a third time. I rather fear that a few small operators may have been singled out for what happened, and that there are some very big guys out there who have never been thoroughly investigated.

[Roger Williams]

That is the point that I was trying to make. There have been a number of arrests, but on a very small scale. Certainly the prime operator in the crime has not been identified and brought to book. It is important for there to be a police involvement, but it is also important for there to be an international police involvement. As the horsemeat scandal demonstrated, the food chains are very long and convoluted, and the people involved often do not actually handle the meat at all. They are traders who buy and sell it without ever knowing its quality or composition. It is therefore essential for an international police view to be maintained.

[Ian Swales]

While we are on the subject of crime, may I ask what my hon. Friend thinks are the ultimate responsibilities of retailers? Are they not ultimately responsible for what they sell? Does my hon. Friend believe that the right controls are in place, and that the penalties are right? My hon. Friend the Member for Tiverton and Honiton (Neil Parish) mentioned the prices of some of the processed meals involved. Does my hon. Friend not think that the retailers ought to have known that those meals could not have been produced at that price with the proper contents?

[Roger Williams]

My hon. Friend has put his finger on it. As has already been pointed out, price is the driver of food crime, and as Professor Elliott said in his report, if major retailers or processors have a deal that is too good to be true, they should trace it to its source. Both processors and retailers have a real responsibility in that regard. It is no good saying that they have not the facilities or the wherewithal; they have the ultimate responsibility.

[Huw Irranca-Davies]

The hon. Gentleman is making a very good and wide-ranging speech on the basis of his experience. He mentioned European and international co-operation, whose importance Professor Elliott has stressed strongly and repeatedly. Did he share my concern when, only a few months after the height of the horsemeat scandal, the European Commissioner for crime and justice—who deals with such collaborative approaches—remarked how preposterous it was that, at a time when we were seeking international collaboration, the coalition Government were seeking opt-outs on 130 areas of European co-operation on that very issue?

[Roger Williams]

I think that the hon. Gentleman is trying to introduce a political point which is far outside the scope of the debate.

[Guy Opperman (Hexham) (Con)]

I congratulate the hon. Gentleman on securing the debate. Let me return it from the political point-scoring of the hon. Member for Ogmore (Huw Irranca-Davies) to the fact that we all support the fundamentals of the report. More specifically, and more importantly, does the report not ram home the point that our constituents should be buying from their local butchers whenever possible, because they offer the greatest possibility of traceability in the food chain?

[Roger Williams]

The hon. Gentleman is absolutely right. I am tempted to give a long list of local butchers in my constituency, but I will confine the list to butchers in my village. Brian George operates a very fine butcher’s shop, and slaughters the animals in the back. I am told by the Welsh Assembly Government that the hygiene standards there are excellent. I also know that it is possible to walk around other butchers’ shops in my constituency, and to be told “This piece of beef came from a bullock belonging to Mr Price of Llanafan”, or “Mr Jones of Drostre”. After the horsemeat scandal, there was a tendency to use local butchers, but, unfortunately, people now seem to be going back to supermarkets and more processed food.

My father always used to say that he would never eat any meat other than in slices, because then he could see where it came from. Once people started mincing it up, he said, there was doubt. That takes me back 30 or 40 years, but it strike me as good advice which some of our retailers could have taken during the horsemeat scandal.

Professor Elliott rightly observed that the main priority should be a “consumers first” approach. That returns me to the point made by my hon. Friend the Member for Redcar (Ian Swales) about the interface between the retailer and the consumer. Given that interface, the retailer should take the responsibility.

[Ian Swales]

To press my hon. Friend on one of the points I made earlier, does he feel that the legal responsibilities of the retailer are sufficiently strong and that the penalties on the retailer in this case were sufficiently punitive?

[Roger Williams]

No, my hon. Friend makes a good point, and certainly there was a lack of prosecutions. Where penalties are imposed, they tend to be of a very low order. Some of this large food fraud involves large criminals, probably acting across-country. They get involved because profit from food fraud is equal to that from drug smuggling or human trafficking, yet the chances of being caught are a lot lower, and if they are caught, the penalties are a lot lower as well.

Despite the Government’s having implemented many of the recommendations already, research carried out by Which? that tested 60 takeaway lamb curries and minced kebabs found that 24 of them had been mixed with other meats such as beef and chicken. Worryingly, seven of the samples did not contain any lamb at all. That is particularly worrying to me, given the area I represent and our dependence on the lamb trade. I was very pleased that recently our local authority prosecuted a restaurant that was advertising Welsh lamb, but in which inspectors found nothing but New Zealand lamb. That is obviously a fraud of its own kind—only on a small level, but even at that level, local authorities must take action.

Since the publication of the Elliott report, Which? has conducted another poll through Populus, and it shows that there is still concern among the public. The fieldwork for that research was conducted between 5 and 7 September, and the poll shows that, even after the publication of the Elliott review, over half of people are worried that a food fraud incident will happen again, a third are not confident that the food they buy contains exactly what is stated in the ingredients list, and, a year after the fiasco, nearly a quarter say that in the past 12 months they have changed the type of meat products they buy because they are worried about food fraud.

We welcome the publication of this report. The Government have accepted all the recommendations, but one thing that will give us cause for concern is whether the resources will be available to carry out all the recommendations, and if they are carried out, whether that will be at the expense of other good work that needs to be done in this area. In general, however, I welcome the report and the Government response.

18:32

[Jim Fitzpatrick (Poplar and Limehouse) (Lab)]

I congratulate the hon. Member for Brecon and Radnorshire (Roger Williams) on leading our bid to secure this debate and thank the Backbench Business Committee for affording us the opportunity to have it. It is good to see the Minister and the shadow Minister in their places. I think this is the third time in four days that we have been in the Chamber discussing various issues that fall under their brief, and we look forward to hearing their comments in due course.

I am also delighted to see the Chair of the Select Committee, the hon. Member for Thirsk and Malton (Miss McIntosh), in her place. I see that she issued a press release last week, in which she says:

“Many of Professor Elliott’s conclusions echo those made by the Environment Food and Rural Affairs Committee in its two reports on Contamination of Beef Products and Food Contamination.

In particular, both the Committee and Professor Elliott raised concerns about the reduced capacity for testing in the UK and stressed the need for more Public Analysts to undertake such testing. The Government must set out how it intends to deliver this.

We also welcome the creation of a Food Crime Unit which should help to deter criminals from seeking to defraud consumers.”

I know the hon. Lady will speak extensively on those points, and I will return to them in my comments, too. I do not intend to speak for long. I just want to draw on several of the briefings we have all received over recent days, and I will begin with the National Farmers Union briefing.

The NFU makes two very strong points which are worth reading into the record. It says:

“It is important that the costs of any new regulation, or the proposed food crime unit, aren’t pushed on to farmers, who weren’t implicated in the horse meat scandal.”

That is very important, because farmers may very well end up being looked on, sometimes unfairly, by Governments of different colours as the people who should be funding certain things, but this scandal was not of their making and therefore they very strongly defend their position, which is absolutely correct. The NFU goes on to say:

“This highlights the need for short, traceable, supply chains and the importance of food assurance schemes such as ‘Red Tractor’, which ensures high standards and traceability from farm to fork.”

The Minister may well wish to discuss such schemes that provide assurance to consumers that the products they are purchasing are safe.

The Food and Drink Federation is a very respectable organisation that represents very respectable trade bodies that are, however, vulnerable to unscrupulous traders who damage reputations across the industry. As the hon. Member for Brecon and Radnorshire said, the latest polling of consumer confidence demonstrates that the industry’s reputation has been damaged. It is not the reputation of those involved in criminality or unscrupulous trading that has been damaged, but the reputation of the whole industry—the good traders and good producers. The FDF says in the opening paragraph of its briefing:

“The final report of Professor Elliott’s Review into the integrity and assurance of food supply networks…recognises that UK consumers have access to perhaps the safest food in the world. However any supply chain, no matter how simple or complex, can present risks that need to be adequately managed.”

I want to draw quite heavily on the briefing from Which? It is extensive and highlights the eight key pillars identified in the Elliott report. It refers to

“the National Food Crime Prevention Framework for ensuring the integrity of our food system”

and, of the eight key points, it starts with the “‘consumers first’ approach”, which must be the key priority of any Government. It goes on to talk about zero tolerance and states:

“The Report’s call for the reintroduction of a central register of food law convictions should be acted upon urgently to ensure information is available to consumers to enable them to make an informed choice about the food they buy.”

The briefing also talks about improved intelligence to pre-empt fraud and says:

“We support the creation of an FSA intelligence hub and a ‘safe haven’ to enable industry intelligence to be better shared…The Government should also address the need for mandatory local authority testing and sharing of information in order to identify problems and draw national linkages.”

I would very much like the Minister to address the local authorities issue. We covered it in when we debated puppies last Thursday, when my hon. Friend the Member for Hayes and Harlington (John McDonnell) in particular said it is all very well us all wanting trading standards bodies and local authorities to do a better job, but if local authorities are not resourced, they are not going to be able to do the job we expect them to do. One theme that frequently crops up in the different briefings we have received on food fraud is that the quality of the job the public sector and local authorities are able to do varies across the country. It would be interesting to hear the Minister’s comments on local authority testing and their ability to carry out mandatory testing, and how to make sure best practice is replicated across the country.

Which? goes on to talk about laboratory services and says it

“supports the finding that a more strategic and effective public sector laboratory testing service is necessary.”

It also says that the Government’s

“additional £2 million funding is welcome, but in light of the challenges raised by the Elliott report, a more systematic approach to ensuring future provision is required.”

I would welcome hearing the Minister’s comments on the Which? analysis that the £2 million is very welcome, but is it going to be adequate for the task in hand?

On audits, Which? states:

“The Government should now provide guidance and set minimum standards to help smaller as well as larger players understand the level of action that is appropriate, including the level of testing that is needed. It is also important the FSA leads national investigations and works more closely with local authorities to ensure effective enforcement.”

It then goes on to talk about Government support. It shares the report’s concerns about local authorities’ resources being increasingly stretched. As evidence, it cites a 16.8% drop in food standards interventions and a 6.8% drop in testing the composition of our foods. It states:

“Our research has also found a huge variation in the way that food enforcement is carried out across the UK.”

Will the Minister tell us more about the standard and quality of testing across the different local authorities? On Government support, Which? goes on to state:

“The FSA’s audit process identifies areas of weaknesses within individual local authorities, but now needs to take a more fundamental look at the way local authorities are performing. The Agency must also have sufficient powers to intervene in particularly complex or national cases.”

On leadership and co-ordination of investigations and prosecutions, the Which? briefing states:

“The report raises questions around the effectiveness of penalties and the limits of the current sanctions to deter criminal activity.”

I shall ask the Minister a question about that in a moment. On crisis management, Which? states:

“The Report notes the need for timely support to the FSA from across government in the event of a serious incident.”

It goes on:

“The Report identifies the need for the Government to urge the FSA to be better prepared for responding to future food incidents.”

In conclusion, I want to make a couple of brief comments and ask a few questions of the Minister. My hon. Friend the Member for Ogmore (Huw Irranca-Davies) pointed out to the hon. Member for Brecon and Radnorshire that the machinery of government changes and the weakening of the FSA in 2010 was criticised by the National Audit Office, which stated that the changes had created confusion and offered “no obvious benefit”. The changes included removing responsibility for food authenticity from the FSA to DEFRA, which was thought to have been part of the problem. Do the Government now accept that that change was a mistake?

Professor Elliott’s report, which was commissioned by the Government, was due in the spring. It is now here, and we would be interested to hear about the delay and about what is believed to have been the softening of the recommendations between the publication of the interim report and the final report. The fact that the Government are accepting all the recommendations is good news, however.

Returning to one of the points raised by the hon. Gentleman, serious criminality has been uncovered but, although investigations are continuing here and in many other countries, there has been only one prosecution for breaching food regulations and a lack of traceability of meat. Huge frustration has been expressed over the lack of accountability. Does the Minister envisage more prosecutions as a result of these recommendations, or does he think that the legal examinations and prosecutions have run their course? Are we drawing a line under that and moving on to change the regulations?

I hope that the Minister will also comment on the eight pillars of the Elliott review. Everyone agrees that food security is too important to be left to chance or to unscrupulous traders. It is up to the Government to act, and I am pleased that they will be acting on the Elliott recommendations. We look forward to those recommendations being implemented, but the fundamental question relating to the ability to act revolves around the adequacy of the funding and resources to enable the appropriate agencies, the new structures and the local authorities—especially trading standards officers—to deliver the improvements that we all want to see.

18:44

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

It is a great pleasure to follow my fellow Committee member, the hon. Member for Poplar and Limehouse (Jim Fitzpatrick). I congratulate him and my hon. Friend the Member for Brecon and Radnorshire (Roger Williams) on their contributions to the debate. Before I begin my speech, I should like to say how sad I was to hear today of the loss of Jim Dobbin. As a microbiologist, he played an important role in the health service and in keeping us all safe. He was a particularly delightful colleague, and I had the pleasure of working with him on the European Scrutiny Committee. Our thoughts are with his friends and family at this very sad time.

My Committee met briefly on Thursday to consider the Elliott report. The Minister also gave a good summing up of the report, and I hope that he will now be able to respond to all our questions. I repeat the request I put to him on Thursday to update the House on the labelling and traceability provisions at European level.

There have been two positive and, I hope, long-lasting developments following the aftermath of the horsemeat scandal. One is that buying meat more locally from butchers and local shops has increased incrementally. That is very welcome and I hope that it will be a lasting trend.

[David Simpson (Upper Bann) (DUP)]

I congratulate the hon. Lady on her work on the Committee. I declare an interest in the agri-food sector. Does she agree that, even though it is a good thing to put in all the necessary strategies and traceability mechanisms, if we are going to root out fraud in the food sector—and in any other industry—we need proper deterrents? The perpetrators need to know that they will do time for this. No matter how big a company is, or the reputation that it has had in the past, penalties need to be put in place so that it cannot perpetrate such fraud again. Some people are making millions of pounds out of this.

[Miss McIntosh]

I thank the hon. Gentleman for his intervention. My hon. Friend the Member for Brecon and Radnorshire has made a similar point. I believe that the new provisions will address this; the use of the criminal law is important. The fact that the City of London fraud police were invited to carry out the examinations was illuminating, in a sense. They are very skilled in tackling business fraud and paper crime. I shall elaborate on that point later.

The second development, which I hope will be long-lasting following the horsemeat scandal, is the emergence of shorter supply chains. A number of hon. Members have already mentioned the comments of the Food and Drink Federation and the testing that has been carried out. We must not forget the cost of that testing. I hope that the Minister will be able to confirm that such testing will be more regular. I welcome the fact that there will be unannounced testing and auditing of food companies. Will he confirm that the testing will take place not only on the basis of risk assessment?

We can see the lengths to which the retailers are now going from the briefings that they are issuing. We must not forget that they were not necessarily in the best place. One supermarket—a leading household name—had not checked the integrity of its supply chain for months, if not years. That simply cannot be allowed to happen again. The Food and Drink Federation has flagged up certain questions for retailers. It has asked them to identify their key raw materials, asking the simple question, “Where do they come from?” It also asks them to assess how resilient their supply chain is, and how they protect their business from food fraud. This shows just how far the food industry has come.

Like other hon. Members, I was approached by Which? magazine in advance of today’s debate. I took the precaution of contacting my local authorities in North Yorkshire. I am sure it took them time and probably some expense to go through the recent testing, but I have reams of results from North Yorkshire county council, Hambleton district council, Scarborough borough council and Ryedale district council. I say to Which? that it would be helpful to know how extensive its survey was, because such surveys can be alarmist if the message goes out to consumers that our food is in any way unsafe to eat, and we have come on a long journey since the first horsemeat adulteration was found in January 2013. In welcoming this evening’s debate, it is important to accept that the Select Committee has not had the chance to consider collectively the final report and recommendations of Professor Elliott on food security, but it is very welcome that the Secretary of State and the Government have announced that they will accept all the proposals. I am delighted that the two reports on contamination of beef products and on food contamination that the Committee adopted last year form part of this evening’s debate.

[Roger Williams]

One important part of the report is where Professor Elliott says that he anticipates that the Select Committee on Environment, Food and Rural Affairs and the House of Lords Select Committee on Science and Technology will be keeping a watching brief on how the recommendations are put into place.

[Miss McIntosh]

Indeed. I wish to record how pleased I am that Professor Elliott has agreed in principle to come to discuss his final report findings with us.

It is a matter of regret that no prosecutions leading to conviction have been brought—one might say that the horse has already bolted.

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

I fully support some of the proposals the hon. Lady has mentioned, and I think there should be criminal prosecutions in this area and more inspections. Have there been any more incidents of horsemeat finding its way into the food chain?

[Miss McIntosh]

Not to my knowledge, but the Minister will be better placed to answer that. As my hon. Friend the Member for Brecon and Radnorshire said, there have been instances—I believe this was in part of Yorkshire, but, thankfully, not in North Yorkshire—where kebabs and other takeaway foods were found not to have been what they were reported to be; we are talking not about processed food there but about other retail outlets. So we must be ever vigilant and the level of testing must remain high. The point raised earlier is key: consumers must now be at the heart of this process, as Professor Elliott has said and the Government and DEFRA have accepted. However, the second note of regret is that we still do not know at which point the adulteration or contamination, whichever we want to call it—my hon. Friend gave some eloquent definitions—entered into the food chain. This was a multimillion-pound business and, as Professor Elliott concluded, these events crossed 26 out of 28 EU member states, which is why it is so important that we must find out where the adulteration took place. Perhaps we will never know that, but if we do not, how can we say to consumers, in all honesty, that we can prevent it from happening again?

Importantly, Professor Elliott’s interim report identified two weak links—two particularly vulnerable areas—in respect of the horsemeat scandal. The first was slabs of cold meat held in cold storage. The second was raw products, and ingredients of processed foods or processed foods, travelling the long distances that we now know they did. I will be honest and say that I have not had chance to go through Professor Elliott’s report line by line, but it is extremely important that the Minister reassures us this evening on the Europol aspect, where there has been wilful criminal acts. It is also important that he reassures us that the rest of Europe has tightened up its act. This is not just about Europol and Interpol. I go to markets regularly in my constituency—I tend not to go to abattoirs—and if someone were to string up a cow carcase and a horse carcase, I would be hard-pressed, ignorant as I am, to tell the difference between them. Professor Elliott did us a great favour by spelling out in his interim report, and repeating in his final report, the two most vulnerable aspects in this country. I do not think that he was being in any way alarmist, so we must not lose sight of the fact that he did say that we are still vulnerable to such adulteration in future. The purpose of the Which? report is probably to say that the criminals will move on, and they have moved on from the meat, slab or carcase form—the processed form—to other retail outlets selling kebabs and other takeaways.

The Committee’s report and Professor Elliott’s conclusions show the concerns about the reduced capacity for testing, which has been alluded to by the hon. Member for Poplar and Limehouse. The Committee report stressed the need—we took powerful evidence in the Select Committee—for more public analysts to do the testing. The hon. Gentleman made the point well that it must not be the innocent party—the farmers—who should pay for that. Obviously, the closer to home it is produced and the shorter the supply chain, the more confidence we can have in our food and in our meat. I am a meat eater who represents a large livestock producing —meat producing—area. I want to make sure that we have absolute confidence in the production in this country, and I believe it is second to none.

Professor Elliott’s final recommendations are on the national laboratory service and the drawing together of the nine—I believe it is—public laboratory services. He specifically says that public laboratory services need to be protected, that they are in “a fragile position” and that the review should be seen as

“an opportunity to develop a sustainable national asset.”

A lot can be done through DEFRA, the Food and Environment Research Agency, which is in my constituency, and LGC, a major science service company, to develop these centres of excellence—that would be pleasing indeed. He goes on to say that the Government should:

“Work in partnership with Public Health England and local authorities with their own laboratories to consider…options for an integrated shared scientific service around food standards”.

The Minister must grasp that point and reassure us—whether it is the labs, the food analysts or the police—that they will be given a specific target and resources to do that. It is important that the Government address the potentially reduced capacity for testing arising from the stranglehold on local authority budgets. Will the Minister use his good offices to speak to the relevant Minister in the Department for Communities and Local Government to see whether this money for public testing and public analysts could be ring-fenced? That would put a lot of people’s minds at rest. So we need the national laboratory service and we need to ensure that the level of food testing by local authorities remains high. These unannounced audits and tests by the food industry will be a very positive development. Perhaps we need to be reassured again that shorter supply chains are in place and will not be jeopardised in the future.

Briefly, the food crime unit will go to the heart of preventing food adulteration incidents in the future. We need to see real leadership. The fact that the new unit will be placed within the FSA is pleasing. There was some criticism of the FSA in the Pat Troop report and in our own report. It was felt that perhaps the agency needed to co-operate more with local authorities and with other FSAs across the European Union. I hope that the Minister will tell us that that will be a top priority.

The hon. Member for Ogmore (Huw Irranca-Davies) rightly touched on the matter of crisis management. The Government must clarify the roles and responsibilities of the various agencies before another incident occurs—it could be an incident of food safety rather than food adulteration—and ensure that all incidents are regarded as a risk to public health until there is evidence to the contrary. That was in the Troop report in June 2013. Will the Minister assure us tonight that NHS England will make that matter a top priority?

The Secretary of State set out in her written statement that she would like to see the food crime unit set up by the end of the year, which is pleasing. Will the Minister assure the House that the resources will follow the responsibilities and set out who will pay? I was very taken by the two models set out in Professor Elliott’s report. The Danish model was found to be slightly less adequate than the Dutch one, but if we look at the costings on page 138 of the report, we find that they are very high for the Dutch model. The population of Denmark is 5.5 million, and the population of Holland is between 10 million and 11 million Obviously, the costs will increase incrementally; one figure that is mentioned is between £2.8 million and £36 million. Can the Minister explain how those costings have been reached and promise that the money will match the responsibilities? How does he think the money will be raised and who will pay?

Importantly, will the police have the ability to make arrests? Apparently, police in Denmark do not have that power, but they do in Holland. Under the Elliott model, the police will have the powers to swoop and investigate. Presumably, they will then be able to make an arrest. As concerns on that matter have been expressed this evening, it is extremely important that the Minister clarifies whether arrests can be made. Furthermore, will the Minister set up a detailed timetable for implementing the recommendation, confirm that the food crime unit will be in place by December, provide an update on labelling and traceability and tell us whether the police will have the right powers in this regard?

Finally, in November 2012, the Food Safety Authority of Ireland alerted the FSA in England to a potential food adulteration problem, as meat was being sourced from the same suppliers. No testing took place in England until we had the horsemeat adulteration confirmed in January 2013. What reassurance can the Minister give the House tonight that we will not find ourselves in that situation again in a year, two years’ or three years’ time?

19:04

[Mr David Heath (Somerton and Frome) (LD)]

I congratulate my hon. Friend the Member for Brecon and Radnorshire (Roger Williams) on securing this debate, which is of critical importance to consumers, retailers, producers and everyone involved in the food industry. As I said earlier, I was Minister with responsibility for food when the horsemeat scandal broke, and I have to say that nothing has made me angrier than what was happening then. Not only was a deliberate fraud perpetuated on consumers who deserve better, but that fraud had a serious reputational effect on very good producers in this country who had no part whatever in what had taken place. Retailers who had good reputations were trying to do the right thing but were none the less affected. We must put in place systems that are as effective as they possibly can be to prevent such a thing from happening again.

I am unashamedly a fan of British food and British food producers. We have some superb production in this country, and we should be proud not only of the quality of the food we produce but of the standards that we maintain day to day, week to week and year on year. We should deal to the best of our abilities with anything that sullies that reputation.

[Huw Irranca-Davies]

I thank the hon. Gentleman and former Minister for giving way. He has great experience and knowledge of this area. One of the great things about Professor Elliott is the great emphasis he places on this safe haven of intelligence coming forward and on a strengthening of the powers around whistleblowing. When the scandal was kicking off, it astonished me that people were then coming forward and whistleblowing. Elliott is right to say that there is a cultural change in the industry. There are lots of good players out there, but there needs to be a cultural mindset change to encourage people to come forward.

[Mr Heath]

The hon. Gentleman is absolutely right. One of the earliest actions I took as a Minister was to convene a meeting—I remember it happening—at the Food Standards Agency with all the major retailers. I made it plain to them that they had a very real problem to deal with, and that that problem was not going to be resolved unless they were prepared to do the work that was necessary in terms of testing and of sharing information, which were not part of the culture of the industry at that point. I said that unless they were prepared to do that, it was impossible for the Government to take the steps that would help to restore the reputation of the food industry.

[Jim Fitzpatrick]

Let me reinforce the point that the hon. Gentleman is making. Every food retailer was affected by the scandal. Nobody was left untouched. The most diligent retailer was also being conned by unscrupulous dealers somewhere down the chain. Did the hon. Gentleman get a sense that they were going to invest more in their own testing, or were they looking to Government for that investment? What was the balance there?

[Mr Heath]

We made it clear that testing was the retailers’ responsibility. Retailers had not only a legal responsibility but a moral responsibility to their consumers to ensure that the material they put on their shelves was what they said it was. They were put in no doubt whatever that they had to up their game, and they did, and all credit to them. I have no criticism of the actions that the retailers took to meet the demands that we placed on them for this very comprehensive testing regime, which took place not just once but time after time to ensure that the incidents that had been identified had been eliminated and remained eliminated. I have one caveat, which the Minister may wish to address: I did not feel that I had the same level of commitment from the catering industry. I am worried that as a lot of food arrives unlabelled on tables across the country through the catering industry, that might perhaps still be a weak spot. I would like to think that continuing pressure will be placed on the catering industry to be as assiduous as I hope the retailers now are about composition, testing and ensuring the integrity of their systems.

[Zac Goldsmith (Richmond Park) (Con)]

I enjoyed my hon. Friend’s tribute to British food earlier, to which I completely subscribe. Does he share my hope that we will do everything we can to maintain the high standards of British food as progress is made in the transatlantic trade and investment partnership? As negotiations continue, there is tremendous pressure from US agribusiness to try to weaken our resolve to avoid unlabelled GM food, beef treated with hormones and poultry meat that has been contaminated with chlorine, and we should do everything we can to resist that pressure and to maintain the standards that he has just praised, which I totally support.

[Mr Heath]

I see no reason to compromise on high standards of quality. There are areas that I think we can quite properly discuss with the United States in which the answer is labelling and letting consumers make the choice rather than simply having bans. Some of the areas the hon. Gentleman mentions fall into that category; others do not. I have no interest in hormone treatments being used in this country and think that it would be a very great shame if that were standard practice in our dairy herds. We have been down that road before; I remember having exactly that conversation 30 years ago when I was leader of the county council and American Pharmaceuticals proposed to bring in bovine somatotropin to increase yield in our dairy herds. As a Somerset representative, I would say that we simply do not want that. It will be bad for our cattle and for their welfare and it will also be bad for the industry as regards consumer acceptance of a very wholesome product. I have a lot of sympathy with what the hon. Gentleman says.

[David Simpson]

I neglected to apologise for my late arrival when I intervened earlier, so if I was repetitive I apologise. A number of the complaints I received in my constituency from commercial companies concerned the fact that although we welcome an open border policy for free trade within the European Union, it has its downside as regards free movement, and there were not the border checks that there should have been. There is paperwork, and we can do many things with that, but there are not the necessary physical checks. I am sure that the hon. Gentleman heard that complaint when he was a Minister.

[Mr Heath]

I did hear that complaint and I must say that what was coming into our ports from outside the EU was a great concern of mine. I do not think sufficient precautions were in place, although they have improved since. Within the EU, although there were theoretical paper trails, when they were examined in the context of the horsemeat scandal they were found to be relatively easy to falsify. That cannot be acceptable and we need co-operation on that between member states.

The paramount responsibility of the Food Standards Agency and of Government is to maintain the safety of food. I do not want anything to be done in terms of the composition that takes away from the primary responsibility of ensuring that when consumers eat something, they are safe from infection or poisoning. That is not to say that composition is unimportant. It gives consumers something other than what they think they have bought. As we have heard, for some communities that is of very great significance, particularly those that have religious requirements about what they eat, but everybody is entitled to be sold what they think they are buying according to the label that the product bears. If people are deliberately setting out to sell something other than that, there is a very simple word for it, and that is fraud. The title of today’s debate is “Food Fraud” and the significant point is the fraud, not the food. It is a crime, and one that needs to be treated as serious. We need the apparatus to ensure that we interdict when it comes into the country and that we ensure prosecution when people involved are in this country.

[Miss McIntosh]

I am following my hon. Friend’s elegant words very closely indeed. The Secretary of State when he was the Minister responsible for farms and food, my right hon. Friend the Member for North Shropshire (Mr Paterson), promised that the perpetrators of this crime would be brought to book. It must be a source of great disappointment and regret to my hon. Friend, as it is to me, that no convictions or successful prosecutions have been brought.

[Mr Heath]

I find it enormously frustrating because, frankly, the then Secretary of State and I did absolutely everything we could to mobilise and energise enforcement agencies across Europe to try to ensure that the problem was traced. I can say now because I am free to do so—the Minister may feel more constrained—that I believe that at the root of this was large-scale, European-based organised crime and that more could and should have been done by other member states to get the bottom of it.

It was a very convoluted story—we know that—and it was not easy, but I felt that having raised the issue very effectively in European Council meetings, obtained the involvement of the Commission and persuaded other member states to take it seriously, there was a palpable feeling once the press and media furore had died down that some member states were suggesting, “Let’s not push it too hard, shall we, chaps? Let’s not remind people that we had a problem and let’s just hope it all goes away.” I do not think that is good enough. I do not think that the UK Government took that view, but I am not convinced that others did not feel that once the storm had passed, it was easier simply to carry on as before. The trouble is that that meant that those people who were making an awful lot of money—we are talking about huge sums across a European nexus—continued to do so, which means that the problem will arise again.

We in this country and manufacturers and retailers across Europe made the situation worse because of the complexity of the supply chain. That has been mentioned time and again, and the more we looked into it, the more extraordinary seemed the number of different hands that some of these products went through across so many jurisdictions in Europe. One only had to look at the price of the finished product and the number of people who were supposedly making a profit to realise that that could not possibly be done in a legal way. Some of our big retailers, which have very sophisticated procurement offices, perhaps had some responsibility to ask more questions. They do now, but they should have been asking at an earlier stage about how so-called beef could travel all the way around Europe only to be sold as eight burgers for less than £1 on a British supermarket shelf. It could not be done legally.

[Huw Irranca-Davies]

The hon. Gentleman is making a fantastic contribution to the debate. Does he agree that one of the strongest recommendations in Elliott is that part of the due diligence, for want of another term, from here on must be that when those in the supply chain see an offer that is too good to be true, they must ask why. When horsemeat was being sold at a quarter the price of good beef, anybody looking at it should have asked what on earth was going on.

[Mr Heath]

They should indeed. People should also be aware—the hon. Member for Tiverton and Honiton (Neil Parish) made this point in an intervention—that the more price wars we have in our supermarkets, the more dangerous it is for good, honest suppliers, and the greater the propensity for those in the middle to try to scrape an extra margin through unfair practice. That is why I worry when our major retailers engage in food price wars, because although it may seem that that is in the interests of consumers of modest means, it is not, because those people are just as entitled to get good-quality produce for the money they spend as those paying much higher prices.

Although they are beginning to do this, retailers need to raise the status and increase the independence of those they employ to carry out testing throughout the supply chain. That will mean that if the testers suspect that something is wrong, they can say, “This has to be looked at,” and the matter will be considered at board level so that appropriate action can be taken. I do not want to start a hare running or to suggest that something very wrong is happening in the catering industry, but I worry that the quality of products that sometimes find their way into catering establishments is not as high as those sold on retail supermarket shelves.

The Food Standards Agency has a crucial role to play, but one of the difficulties that I faced as a Minister—the current Minister will face the same situation—was that I had no responsibility for the agency, so I had to answer questions in the House that were strictly speaking nothing to do with me, in the sense that the FSA had an independent role. The distinction is important, because the food industry’s sponsoring Minister should not also be its regulator, and we saw many years ago that if that happens, the public lose confidence in the regulator. However, it is important that there is the greatest possible co-ordination between DEFRA and the FSA. We had that, and I pay tribute to the agency and its officers for the work that they did with me and for their help, which I appreciated. It is important that such co-ordination take place at a high level.

I worry that local authorities do not always play their part. We need a comprehensive local authority testing system. Some local authorities are very good, but others, frankly, are not. It is easy for anyone to say, “Oh, it’s about resources,” but there is no direct correlation between the resources available and whether an authority does a good or bad job. It is more a case of whether an authority recognises that it has an essential and primary responsibility to keep people in its area safe. Just as central Government have a responsibility, so does local government, so local authorities need to carry out testing. There is a question about the laboratory service—the recommendations on the laboratory and public analysis services are crucial aspects of the package—but I do not accept that local authorities should be let off the hook if they say, “This is a low-priority area and we want to spend our money elsewhere. It’s all the Government’s fault.” That is not the case, and local authorities must recognise their responsibilities.

[Jim Fitzpatrick]

I take the hon. Gentleman’s point that resourcing is no guarantee of local authorities providing good services, because there are some very good authorities and others that are not so good. The practice of various local authorities shows that this is not a party political issue either. However, one of the Elliott report’s main recommendations is that there should be an examination of what is happening in local authorities so that we can identify the good guys and those who are not doing such a good job, find out what is best practice and how it can be achieved, and then share that information.

[Mr Heath]

I entirely agree, although I suspect that the Food Standards Agency knows an awful lot of that information already because it works directly with local authorities from day to day and will know of the results it receives from local authority analysts.

We must not set out rigid structures for the FSA that impose testing regimes for no benefit. The system must be based on intelligence and proportionality. Earned recognition, if appropriate, is an important way of redirecting resources effectively but, as Professor Elliott says, that must be coupled with spot checks to ensure that what one thinks is going on is actually going on. Nevertheless, it would be foolish to redirect FSA resources, which are always under pressure owing to the extent of its responsibilities, to testing that serves no useful purpose.

I understand exactly what Professor Elliott says about the concept of a food crime unit, but I have a concern. Food crime and fraud cover a wide spectrum of offences, ranging from low-scale inadvertence and very minor adulteration—frankly, it is not difficult to pick up and prosecute such practice, and it should be well within local authority or FSA officials’ power to take appropriate action to deal with it—to the large-scale fraud that the horsemeat scandal revealed, which I think is based on organised crime. Such fraud might require action at a much higher level, such as through the National Crime Agency, and to deal with that sort of organised crime, we need a sophisticated approach and co-operation with counterparts throughout the world, such as Interpol and Europol. I worry that if we are not careful, the food crime unit could fall betwixt and between those two ends of the spectrum, and we might have something that is ineffective at dealing with the big guys, but over-designed for the little guys. The Government need to give serious thought to the terms of reference and composition of the food crime unit, as well as to how it reports and feeds into the gangbusters in the NCA.

The one thing that worried me enormously when I was a DEFRA Minister—it still worries me enormously, and I think it will worry me more and more—was the resilience of the Department itself. DEFRA is a good Department. It does an awful lot of good work and has to cover a huge number of contingencies, but its funding and resources are now such that it would find it difficult to deal with a major incident. I hope that the Treasury and leaders in government recognise that if we have a major incident to which DEFRA is unable to respond, the consequences could be enormously damaging. I am not saying that we are at that point yet, but we must be cautious that we ensure that we do not stretch what is already a thin line—a thin blue line, red line or whatever; let us think of a colour—

[Huw Irranca-Davies]

Green.

[Mr Heath]

I am grateful to the hon. Gentleman for coming up with a suitable colour on the spectrum. We must not stretch the thin green line so taut that we are unable to deal with an act of God, or an act of wicked men, that might cause our nation enormous problems, but I just feel that we are getting close to that edge.

19:29

[Julian Sturdy (York Outer) (Con)]

I apologise for missing the opening few remarks in this important debate, and I warmly congratulate the hon. Member for Brecon and Radnorshire (Roger Williams) on securing it. It is a privilege to follow the hon. Member for Somerton and Frome (Mr Heath).

I draw Members’ attention to my declaration of interests. As a proud Yorkshire farmer who supplies genuine Maris Piper potatoes to a well-known Canadian French fry producer with a factory in Scarborough, based in Yorkshire, I could not pass up the opportunity to say a few words in this important debate.

It is reassuring that Professor Elliott has commended the British food industry so highly for providing one of the safest food supply markets in the world. The report acknowledges the importance of developing shorter supply chains and securing domestically produced food for a more resilient food network. Indeed, I hope that hon. Members in all parts of the House will join me in recognising the hard work of British farmers, who have invested to provide us with such high-quality produce. We must do all we can to strengthen our nation’s food security, increase investment and maintain our international reputation for producing the finest quality produce anywhere in the world.

As has been made abundantly clear, however, the problem is increasingly complex retail supply chains, which can make accurate tracing of food all but impossible. According to the Irish Department of Agriculture, Food and the Marine, the factory that supplied a British supermarket with burgers made up with 30% horsemeat sourced the ingredients from 40 different suppliers. In such a long, complicated and unaccountable supply chain, the opportunity for fraud is sadly all too clear. Having familiarised myself with Professor Elliott’s excellent report, I agree entirely with the emphasis he places on the eight identified pillars of food integrity. It is, however, essential that we do not overlook the most effective way of ensuring the integrity and assuring the quality of our food: buying British produce.

[Zac Goldsmith]

On supporting British food and farming, does my hon. Friend celebrate as I do recent moves by DEFRA to encourage much greater use of the £2 billion or so we spend each year on food for schools, hospitals, military barracks and the like on domestic produce, so that a far greater volume of funds will be used to source and access good-quality local food for our children, patients and so on than was the case before?

[Julian Sturdy]

I entirely agree with my hon. Friend, who makes the point well. It is important that the Government, of which DEFRA is one Department, lead by example, and I feel that they are doing that.

In the wake of the horsemeat scandal, it was clear that consumers want to see more British food on the shelves of supermarkets. They want to buy more British food and eat more British food, whether they get it through schools and hospitals, or by buying it in their local supermarket and from local producers. Buying British food is important, because animal welfare in our country is second to none. Our farmers are rightly proud of their world-beating record, which sets us apart from other global producers. We must celebrate that. For me, that is a gold standard, which we have to maintain.

I draw the House’s attention to the fantastic but often overlooked red tractor assurance scheme, which was mentioned by the hon. Member for Poplar and Limehouse (Jim Fitzpatrick). The logo, with the Union flag, shows not only that the food was produced in the UK, but that the highest standards of animal welfare, food safety, traceability and environmental management have been rigorously enforced. Almost 90,000 farmers now take part in the scheme, and the retail value of food carrying the logo is now estimated to be more than £12 billion a year. Next week is red tractor week, and I urge everyone to support the scheme where possible. Young people are being asked to become red tractor recruits, to spread the word of high-quality British produce on social media. Sadly, I can no longer claim to be a young person, nor have I ever been an avid tweeter, unlike some other Members, but I hope my contribution will convince some consumers to put British produce into their shopping basket—or to buy local, which we have not touched on yet—

[Miss McIntosh]

Yes we have.

[Julian Sturdy]

I do apologise—buying local has been talked about already, but it is worth mentioning again. The best form of traceability and quality assurance is to go down to the local butcher, greengrocer or fishmonger and buy local. When we buy local, we know where the food has come from—we can ask the butcher where the meat has come from, even down to the individual farm.

The importance of farming to our economy should not be underestimated. Food production and farming contributes almost £100 billion to the British economy each year, employing almost 4 million people in the process. We can be proud that farming remains a family affair, with 90% of the more than 140,000 registered farming businesses run as sole traders or family partnerships. Food and drink products are now the country’s fourth largest export sector, with sales booming by about 5% a year. Indeed, some of the UK’s most lucrative exports are now from the farming sector, with lamb exports up 8% year on year, cheese exports up 9% and dairy produce up an incredible 18%. Such successes play an important part in creating jobs and fuelling our economic recovery and must be encouraged to continue.

We must also take the necessary steps to safeguard our hard-won reputation of excellence, which could easily be jeopardised by rogue elements operating in an increasingly complex international marketplace. Professor Elliott rightly calls for a zero tolerance approach as one of the pillars of food integrity. I understand that, at the request of the Food Standards Agency, the Sentencing Council is considering whether there is an opportunity to provide fresh guidance on food and hygiene offences. I urge that tough sanctions be brought to bear on anyone who would not only jeopardise the health of British consumers, but cheapen the reputation of the agricultural industry, which farmers have worked so hard to rebuild after the scares of the 1990s.

I welcome the Secretary of State’s response to the report, which recognises not only the value of British farming, but the importance of educating children about quality food. Cookery and food education will be a vital part of the national curriculum, and young children will now enjoy a much better understanding, not only of where their food comes from, but of why it is so important to eat fresh and healthy produce.

I could not let this debate pass without mentioning food security, as it remains a fundamental concern across the country. We are only 68% self-sufficient in food—a level that has, sadly, steadily declined over the past 20 years. Well meaning but poorly implemented schemes such as the common agricultural policy have limited our ability to increase food production in a sustainable way. Our competitive edge in quality and our capacity to increase yields can be promoted only through better understanding of the farming sector and investments in new technology.

It is all too easy to forget that the industrial revolution began with a revolution in Britain’s farming practices, transforming our island nation into the world’s foremost power for more than a century. With such a proud heritage we must remain focused on increasing yields, boosting exports and safeguarding our gold standards in quality produce and animal welfare.

19:40

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

I congratulate all right hon. and hon. Members who have contributed. We may be few in number, but we have had a very insightful debate with a lot of quality in the speeches, with more to come as well.

The hon. Member for Hexham (Guy Opperman), in response to an intervention, accused me of bringing politics into the debate—heaven forfend! That is my day job; I am a politician. I try to deal with evidence and rationality, but I am also elected democratically and I am a politician. If the hon. Gentleman, who is no longer in his place, does not understand that, I will happily sit down with him over a coffee.

I congratulate the hon. Member for Brecon and Radnorshire (Roger Williams) on introducing the debate. We go back a very long way. He talked about the 2001 election, which was delayed because of foot and mouth. I recall that well, because we were sparring partners, but he was also seeing daily, alongside farmers, the horror of the burning carcases. He has great experience in this area. He reminded us of the importance of Elliott, food fraud, food criminality, traceability and all the aspects of this to the farming community. As many hon. Members have said, those who are often hit really badly are the primary producers—farmers. It is they who get squeezed, whether in price wars or in burdens being laid on them. We need to guard against that.

The hon. Gentleman, like many others, strongly supports the proposals in the Elliott report. As hon. Members will know, I have spent my weekend poring over every line and word of it, as well as other briefings and so on. Professor Elliott makes it crystal clear that not only the eight pillars of food integrity but every detail must hold together. These proposals are not to be cherry-picked; equal effort must be put into every aspect.

During an intervention on the hon. Gentleman, we briefly discussed the FSA’s interim proposals, which some would argue have a different emphasis from the final report. However, it is about more than degrees of emphasis, because the Troop proposals mentioned by the hon. Member for Thirsk and Malton (Miss McIntosh), who chairs the EFRA Committee, among others, expressed a preference for putting these responsibilities into the FSA. Even though this is slightly modified in the report, Elliott makes it clear that if that is not going to be the case, he wants the matter to be pursued in a different way with equal rigour and clarity. Let us see how it emerges.

My hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick) has great experience in these matters. I served alongside him when he was the Minister responsible for food, farming and agriculture. He brought a great deal of experience to bear, as he always does in these debates. He talked about not having the full impact of this falling on farming communities. He discussed, as did others, including the hon. Member for York Outer (Julian Sturdy), the importance of the red tractor assurance scheme. That is an important element of some of the briefings from the National Farmers Union, the Food and Drink Federation, and Which? magazine—I am sorry, not Which? magazine but Which? the consumers association. It used to be a magazine when I was a young man but now it is far more than that.

My hon. Friend said that Elliott is proposing not to increase burdens but to reduce the burdens on the good guys and put the burdens on to the bad guys and the criminals. He talked about the importance of a strategic laboratory service, which is crucial. He asked whether the resources were sufficient for this very wide-ranging set of proposals to do Elliott justice. He referred to the machinery of government changes in the FSA. Like many Members, he queried why prosecutions are so few and far between and often do not go after the big fish in the pond.

The hon. Member for Thirsk and Malton has a great deal of experience in this area. I commend not only her speech but the work that the EFRA Committee has done over time on putting a spotlight on to this issue with considerable detail and forensic analysis. She opened her remarks by paying tribute to a friend of all of us right across the House—the late Jim Dobbin. We are all very sad and our thoughts are with his family. One of his great causes related to DEFRA—open access and the right to roam. There is nothing more political than putting one foot in front of the other and walking out into the countryside. He was a great believer in that. In fact, I have a debate about such matters on Wednesday afternoon in Westminster Hall, and anybody who wants to can come and take part.

The hon. Lady talked about the desirability of shorter supply chains. A lot of the retailers have “got” that now, but we have to keep the pressure on. On the day of the National Farmers Union conference a year ago, one retailer—I will not name it for fear of embarrassment but it knows who it is—took out full-page adverts with a big banner headline saying, “We get it”, that talked about how it would transform its business. I have met it subsequently, and it is trying to do that. It is our biggest supermarket chain. A lot of farmers are now watching for it to carry that through relentlessly.

In an intervention on the hon. Member for Upper Bann (David Simpson), the hon. Lady talked about penalties, which the hon. Member for York Outer also mentioned. We need to consider not only what the Sentencing Council is doing, and stronger penalties, but broader penalties so that some of these cases do not have to end up in court. That could be to do with naming and shaming, but there might be McCrory-style types of penalties that deal in the right way with relatively minor offences early on and deal in a heavy-duty way with the big offenders as well.

It was asked whether more incidents have taken place post-horsemeat. It is interesting to refer to the very good House of Commons Library briefing, which draws on Elliott’s observation that in 2007 there were 49 reports of food fraud to the FSA’s food fraud database, while in 2013 it received 1,538 reports. According to the National Audit Office, local authorities reported 1,380 cases of food fraud in 2012, up by two thirds since 2010. That is the scale of what we are looking at. That emphasises the importance of local authority intelligence, which a few hon. Members mentioned, and of how this ties together. It will not all be carried out by serious crime people; local information on the ground will open it out.

[Miss McIntosh]

As I hope the hon. Gentleman will confirm, there is not sufficient intelligence. A lot of the testing is done purely on the basis of risk assessment. The key is not just the food crime unit but the fact that there will be spot checks—unannounced audits. Surely that has to be a good thing.

[Huw Irranca-Davies]

I could not agree more. I hope that the Minister will also say that that is the way forward. It is not only about routine checks or risk assessment-based checks but turning up unannounced.

The hon. Lady rightly made a point about Troop and the FSA leadership, and clarity of roles. She also talked about the police’s powers of arrest, and I will be interested in the Minister’s response to that.

The hon. Member for Somerton and Frome (Mr Heath), a former Minister in the Department who also has great experience, discussed the importance of cultural change, which is crucial. He rightly talked about the importance of driving this through every area, including catering. It has to go deep into every individual sector and employee as well as the bosses and the leadership. The importance of caterers was brought home in the horsemeat scandal, because horsemeat was appearing not only in hospitals and schools but in the food used by caterers who were supplying Royal Ascot and the royal family—so at least we were all in it together.

On the complexity of the supply chain, Elliott says that we have to recognise that, even though it is more desirable to have shorter supply chains and to encourage food retailers and providers to move towards them, we are in a global system, under which global intelligence and the pursuit of crime come into play. He also says, wisely, that ultimately the food price wars that take place from time to time, including now, are not good for the consumer if they jeopardise food authenticity or—heaven help us—food safety.

The hon. Member for York Outer spoke up strongly for British farming and food produce. He talked about the gold standard of British farming and I agree with him. Curiously, when we were on the Government Benches, others would shout at us about gold-plating, but that is exactly the gold standard he was talking about. That is the reason our exports to many other countries are doing well—they demand the standards of animal welfare, hygiene and testing that this country delivers. Regulation is a darn good thing when it protects the consumer and allows us to export around the world. Curiously, the FSA has traditionally been looked on as the gold standard of food regulation.

The hon. Gentleman also talked wisely about the importance of knowing where our food actually comes from. There is a great deal of work to do on that right across the population, ourselves included. There is real value in knowing where food comes from; it ties into so many good things.

The Labour party is very clear—as we were when we were in government—that the consumer has always to be put first. That is why, when in government, we established a strong and independent Food Standards Agency, which had a powerful reach right across Government to regulate this vital industry that creates so many jobs and that wants the very highest standards. However, the changes brought about by tinkering with the machinery of government have jeopardised that.

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (George Eustice)]

Professor Elliott says in his report that when the FSA had control of authenticity testing in 2007-08, under the previous Government, it took the decision, as an independent body, to cut spending on the testing programme. If the hon. Gentleman had been a Minister at the time and had received a submission recommending such a cut, would he have agreed with it or might he have questioned it?

[Huw Irranca-Davies]

I was not the Minister at the time, but I would like the hon. Gentleman to continue to make his point, because Professor Chris Elliott was unable to address the detail. Will he confirm whether authenticity testing continued even though it had been reduced?

[George Eustice]

Yes, it continued, but the point Elliott makes is that the FSA, as an independent body, took the decision to start winding down authenticity testing.

[Huw Irranca-Davies]

Let me put it back to the hon. Gentleman: when the coalition Government entered office in 2010, one of their first decisions in DEFRA was to split away authenticity testing. At that point, did they think it was appropriate to increase investment in it? We could go back and forth on this issue, but authenticity testing was still happening at that time, even if it had been reduced. I am interested in the detail, but it was continuing.

[Mr Heath]

It is very important to distinguish between the testing regime that remains within the province of the FSA and local authorities, which continued according to their priorities, and the policy developed by civil servants, which was moved to DEFRA in order to inform Ministers who were having to deal with very complex European issues of labelling and composition. That was perfectly logical. If there was confusion, it was not at the level of central Government; it may have been elsewhere.

[Huw Irranca-Davies]

After the horsemeat scandal erupted in February 2013, the National Audit Office looked at the contributory factors to any delay or confusion. One of the things it pointed fairly and squarely at was the confusion about who was doing what. It pointed the finger at the machinery of government changes. The hon. Gentleman, who was a Minister, may be saying that he was not confused, but there was certainly confusion between local government and Whitehall, as well as within Whitehall, as to who was doing what. I agree with Troop and with Elliott’s interim findings that it should be put back together again, but we will have to differ on that. The question for the Government is: can they make this work if they are not going to do that?

One of our criticisms relates to the fact that just before we left government in 2010 we published what was at the time a ground-breaking, comprehensive food strategy, “Food 2030”, which followed on from our previous work on “Food Matters”. It mapped out a comprehensive and long-term strategy to ensure the provision of safe, nutritious, affordable and sustainable food, but it has been left on the shelf. Where is this Government’s overarching strategy to pull everything together? The answer is: there isn’t one.

Labour welcomes and supports fully all the Elliott report’s recommendations, and we will continue to urge the Government for full and speedy implementation. Professor Elliott sets out a new Government-industry partnership, some aspects of which will require a culture change in Government and in industry. He makes sound recommendations for a new food crime unit and a whole framework for national food crime prevention, encompassing Government, the FSA and industry. He calls for—it is interesting that he deals not just with the mechanics—a new mentality to meet the challenges of sourcing from complex international supply chains, and a zero-tolerance approach to food crime. He also fashions detailed proposals on whistleblowing, intelligence-gathering and co-ordinated laboratory and testing services, and stresses the need for leadership at all levels, including in Government. Most of all, he stresses—he puts this top and dead centre—the need to put the consumer first, and we agree.

Labour supports the report and all its recommendations. We believe that the industry is ready to drive the culture changes that Elliott demands and that the consumer and the public deserve. I say to the Minister, however, that we have reservations: we do not have the same confidence that the Government are serious about these changes.

Make no mistake: the Elliott report is not only a series of sound recommendations, but is an expert analysis and critique of the coalition Government’s policy on food governance and food crime. Since 2010 under this coalition Government we have seen the fragmentation of food governance; an ideological fetishism for stripping out regulation for the sake of it, whether that regulation is good for the consumer and industry or not; and front-line cutbacks in inspection at national and local level and in food-testing capabilities.

The Government have also been asleep at the wheel, reacting only when disaster happens, realising too late that cutting the brake cables and unscrewing the steering column was not a good idea. In 2010, one of this Government’s first actions was to split the responsibilities of the FSA, an agency that was, as I have said, previously regarded as the gold standard of consumer protection and industry regulation. It was deliberately fractured, which hampered clarity and leadership in food governance in the UK. It is not just me saying that; others are saying it, too.

The horsemeat scandal was the slow-motion car crash that showed how crazy that decision was. The NAO stated that when a prompt response was required to the breaking horsemeat scandal, there was confusion between, and lack of leadership in, Whitehall Departments and confusion between Whitehall and local government.

Similar, repeated concerns about the mishandling of the FSA and food governance have been raised for some time by the EFRA Committee and many other industry and food policy experts. Labour raised those concerns from the word go.

The interim Elliott report made it clear that the FSA responsibilities should be brought back together. That would deal with the NAO view that fragmentation had led to needless confusion and additional complexity. The final report has stepped back slightly, but it is still commendably forthright on the need to put rigour and reach back into the FSA.

On that and many other issues, the report carries implicit and sometimes explicit criticisms of this Government’s approach to food policy and food crime. It calls for a more robust FSA, retaining its independence, and for far greater co-ordination, which has been lacking, across government and industry. It highlights the absence of high-level round-table meetings between the chair of the FSA and the Secretaries of State for Health and for Environment, Food and Rural Affairs, which seems to me to be a shocking omission and a glaring fault bearing in mind the fragmentation of responsibilities since 2010.

The report cites evidence from recent local authority testing that appears to show high levels of failure, particularly in meat authenticity testing, which possibly indicates fraud or the criminal adulteration of food. That is deeply worrying when set against a near halving in the number of DEFRA officials working on food authenticity since 2010, as revealed by an answer given to me by the Minister in July. It is even more worrying in the light of the immense pressures on local authorities, which have led to severe cutbacks in local food inspections.

Professor Elliott does not pull any punches. He states on page 49 of his report:

“Enforcement activity is…very vulnerable when local authority services are cut to the bone.”

He also draws attention to the average 27% reduction in the number of trading standards officers dealing with food matters, and to the 40% cut in overall trading standards services during the lifetime of this Government. Concerns for consumer protection and for the reputation of the industry are heightened when, as Elliott notes, the number of public analyst laboratories has been reduced from 10 in 2010 to six today. I simply say to the Minister that he has his work cut out if he is to explain how, against the background of cuts in front-line FSA inspection, front-line local authority inspection and laboratory facilities, he can do what Elliott asks and put the consumer first.

Given that we are now four and a half years into this Government, the Minister must explain why the UK has been behind the curve and behind European counterparts in establishing a food crime unit. That led Elliott to note that the Dutch crime unit could find no one in the UK—whether in a crime unit or anywhere else—to speak to when the horsemeat scandal happened. Had the Government’s reluctance to place any burdens on industry given them an aversion to being proactive in such a way? Had Ministers looked at the threat of food adulteration and food crime since taking office? I understand that the Minister was not in office for the whole of that time, but I am sure that he has discussed it with his officials.

One month after the horsemeat scandal erupted, a survey by the consumer organisation Which? found that six in 10 shoppers had changed their shopping habits, and that trust had fallen by a quarter. A year after the scandal, an Ipsos MORI survey showed that 95% of consumers remembered the horsemeat scandal. As has already been mentioned, the latest polling by Which? has shown this month that 55% of people are worried that a food fraud incident will happen again, that a third of them do not have confidence that the food they buy contains what it says on the label—by the way, that goes up to half for people who have takeaways on a Saturday night—and a quarter maintain that they have changed the type of meat they buy. Seven out of 10 consumers have told Which? that more action needs to be taken. The damage is lasting, so we need to get this right.

Let me ask the Minister some initial questions; in the months to come, we will return with more. As the hon. Member for Thirsk and Malton suggested, will the Minister publish a detailed timetable for the implementation of every recommendation in the Elliott review so that the Government’s warm words can be measured against actual implementation? Will he give assurances that the resources for the new crime unit and the crime framework to go with it can be found from within existing FSA funding?

Will the Minister now apologise on behalf of the Government for the decision to fragment the responsibilities of the FSA, or does he continue to ignore the argument that that decision damaged its power, authority and independence? Does he accept the Elliott proposal that the FSA should continue as a non-ministerial department so as to retain its necessary independence from the Government? How does he answer critics who believe that the FSA has gone beyond the necessary close co-operation with the industry and is now too close to the industry to be a useful and critical friend? The recent decision not to publish campylobacter rates is one such example.

Bearing in mind the need for a more robust and rigorous FSA based on the report’s proposals and the need for the FSA to have the effective and independent leadership identified by the Elliott report, will the Minister give us an update on the search for a new chair? Will he confirm that the person shortly to be proposed as chair will appear before the Environment, Food and Rural Affairs Committee before final confirmation in post?

[Miss McIntosh]

indicated assent.

[Huw Irranca-Davies]

They will, which is great.

What other foodstuffs are of primary concern for authenticity fraud, and which are on the priorities list for criminal activity at present? How will the Minister guarantee that the high number of authenticity failures can be identified now and in future against the backdrop of cuts in the front-line services involved in food authenticity? As so many hon. Members have asked, 18 months after the horsemeat scandal erupted, why have prosecutions been so few and far between? Does he share the public’s frustration that criminals appear to be getting away with messing with their food?

Elliott repeatedly argues for improved co-operation on an international and especially a European level to tackle food crime and fraud. Does the Minister expect us to believe that the Government’s general approach to European co-operation and the specific Tory proposals to opt out of 130 areas of European policing and justice measures will help the fight against international food crime? If so, has he done an impact assessment of those proposals? Will he support calls for an urgent review of criminal, financial and other penalties to toughen and widen the measures against rogues and criminals, and to protect the many good food businesses? Finally—for now—will he guarantee consumers and the industry that another horsemeat scandal or the like will not happen in the short time left of this Government?

Let me end by saying that this Government have their work cut out to persuade the industry and consumers that they are serious about tackling food crime and fraud because, as they say in police dramas, this Government have got “previous”. Their track record of delay and dither when facing a crisis, their ideological aversion to effective regulation and their wholesale absence of leadership and strategic thinking on food mean that they are in the dock as a serial offender. We urge the Government to get serious about food crime, food governance and food strategy. We will support them if they drive through all the recommendations with the rigour they deserve, because consumers and this vital UK industry deserve no less.

20:07

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (George Eustice)]

I congratulate the hon. Member for Brecon and Radnorshire (Roger Williams) on securing the debate. He expressed some disappointment about the number of Members attending, but we have had a really substantive event; it does not take away from the gravity of the subject because the speeches made have really got to grips with the issues. Let me start by making it absolutely clear that food fraud is totally unacceptable: it is a crime, and this Government will not stand by while consumers are duped and deceived.

As my hon. Friend the Member for York Outer (Julian Sturdy) made very clear, food and drink manufacturing is important to this country. It is our largest manufacturing sector, a significant contributor to economic growth and a big employer. British food is renowned throughout the world for its quality, and our farming industry is world-renowned for our high animal welfare standards. The integrity of our food supply chain is essential for the great reputation of our exports, as well as for the confidence of consumers at home.

I want to say a little about the action that the Government and others have already taken since the horsemeat scandal broke at the beginning of last year. First, there has been robust testing of meat by industry and by the Government, with more than 50,000 tests of processed beef products carried out during that time, and I can say that no horsemeat was present in any of those 50,000 tests undertaken since the initial scandal at the beginning of last year. The Government have provided an additional £2 million of funding to local authorities for food sampling in the current financial year to help them carry out that vital consumer protection role.

We have commissioned additional sampling and testing for authenticity in response to intelligence that has been received. The hon. Member for Brecon and Radnorshire cited the example of lamb kebabs that did not contain as much lamb as they ought to have done. There has been comprehensive sampling of take-away meals to seek undeclared meat and undeclared allergens, which are another cause of concern. We have also instigated the development of new testing to ascertain provenance and country of origin, so that we can check that the country of origin that is stated on the label is correct and that those who claim that products come from the UK are being honest.

Finally on testing, we are developing and road-testing a new method to detect undeclared offal in processed meat products. The hon. Member for Ogmore (Huw Irranca-Davies) asked me what area we would look at next and where we think there might be additional problems. This is an area that we highlighted very early on. That is why we have been developing testing in the area.

At the end of last year, the FSA set up a new intelligence hub to collect, analyse and share information on emerging risks. We have also taken action to empower consumers to understand where their food comes from. That includes improved country of origin labelling requirements for products such as lamb and pork that have been set at an EU level, which take effect from April next year. The UK argued strongly for those changes. We are also improving the public procurement of food and catering services to provide schools and hospitals with high-quality British food.

A great deal has been done, but this debate has focused very much on the final report of Professor Christopher Elliot, which was published last Thursday. I want to say at the outset that the Government have accepted all Professor Elliott’s recommendations. As I said earlier, many of them are already being implemented. We will be taking forward other improvements that were recommended by him to ensure that consumers have absolute confidence in the food that they buy. I think that there can be a universal consensus around the House about the key point that Professor Elliott made: the consumer must come first.

Chief among Professor Elliott’s recommendations was the formation of a new food crime unit, based within the Food Standards Agency. That will build on the intelligence hub that was established in the FSA at the end of last year, but will add investigative powers. We have made a commitment to establish the unit and it will be fully operational by the end of the year. Initially, it will focus on building the intelligence and evidence picture of the risks and nature of food fraud in the UK.

It is important to note that Professor Elliott made it clear both in his interim report and his final report that the incentives for organised crime to get involved in food fraud are high. The hon. Member for Poplar and Limehouse (Jim Fitzpatrick) highlighted that in his contribution. Although Professor Elliott stated that he was unable to find any credible evidence of serious organised criminals operating in this area in the UK, he highlighted the serious risk of that happening, given the incentives. The Government are not at all complacent about that. If there is any evidence of criminality in our food supply chains, we are determined to find it and fight it.

A number of Members, including the hon. Member for Ogmore, highlighted the importance of whistleblowing. That is the subject of one of the main recommendations made by Professor Elliott. There is a concern that employees and others who have knowledge of food fraud do not feel that they have the right mechanism through which to alert people. The FSA has had a whistleblowing service, but it is fair to say that the awareness of it has not been sufficiently high. The FSA is looking seriously at steps that can be taken to increase people’s knowledge of the whistleblowing service. In addition, steps are being taken by the food industry to put in place similar measures to make it easier for whistleblowers to report wrongdoing.

Linked to that issue is the need for better intelligence gathering and sharing across Government and the industry to improve our ability to protect consumers. As a number of hon. Members said, Professor Elliott spoke about the need for a safe haven for industry so that businesses can share intelligence in a way that does not compromise commercially sensitive information. The FSA has made a commitment to improve its systems for dealing with sensitive information and to facilitate the kind of intelligence sharing and analysis for which Professor Elliott called. We will work with the industry to facilitate its development of a safe haven to contribute to that intelligence-sharing process.

A number of hon. Members, including the Chair of the Environment, Food and Rural Affairs Committee, my hon. Friend the Member for Thirsk and Malton (Miss McIntosh), and my hon. Friend the Member for Tiverton and Honiton (Neil Parish), talked about the importance of supply chain audits. That is another key theme throughout Professor Elliott’s report that we want to learn from. Professor Elliott highlighted the action that the food industry has already taken to assure the integrity of its supply chains and restore consumer confidence following the horsemeat fraud.

Professor Elliott made a number of key recommendations for the industry on that issue. First, he said that there should be a shift of emphasis towards the use of unannounced audits and the use of sampling as part of the audit process to act as a deterrent. My hon. Friend the Member for Tiverton and Honiton made the point powerfully that we need to have unannounced audits if the audits are to be meaningful.

Secondly, Professor Elliott made an important point about duplication in the audit process. The hon. Member for Ogmore has talked about Government Members being negative about regulation. We believe in having regulation where it serves a purpose, but we should all share the hope that we can remove duplication. Professor Elliott made the point that a lot of retailers are doing similar audits, but with slight differences. There is a good case for the British Retail Consortium bringing its members together to review their audit standards and give consistency to their approach to audits so that there is a single industry audit system. He also called for the introduction of a new fraud module in the audit, which is incredibly important.

We must recognise what the industry has done to restore confidence in the food supply chain. I commend the work that the Food and Drink Federation has done to introduce a guide to help its members protect themselves against the risk of food fraud. My hon. Friend the Member for Thirsk and Malton referred to that. Although a number of hon. Members, notably the former Minister, the hon. Member for Somerton and Frome (Mr Heath), highlighted concerns about the catering industry, it is important to note the good work that is being done by the British Hospitality Association to engage small catering businesses on good practice in food authenticity, and its work with Whitbread to develop an audit standard for larger food service businesses. He is right to highlight the concern and there might be further difficulties in making progress on that front, but we welcome the work that the industry has done.

The shadow Minister spoke about the machinery of government. He asked why, after the interim report called for a change in the machinery of government, Professor Elliott seems to have stepped back slightly from that. Professor Elliott spells out the reason quite clearly on page 49, where he highlights the fact that representations were made to him regarding the machinery of government changes. He says:

“The review investigated this issue and was able to ascertain that the winding down of the FSA’s food authenticity programme was initiated prior to the machinery of government changes. While not attributing any blame for this decision, it was certainly not helpful”.

The final point he makes is that wherever the boundaries are drawn in the machinery of government, there will still be a need for different parts of the machinery to work together. That is why his ultimate conclusion is that wherever the boundaries are drawn, the most important priority is to have better co-ordination. That is exactly what we will deliver with the food crime unit.

The hon. Member for Poplar and Limehouse spoke about the vital role of local authorities, and around 2,500 trading standards officers provide an important part of our field force in that area. As he knows, we have made available an extra £2 million per year, and the Food Standards Agency runs training programmes for those 2,500 officers in the field. Local authorities have a legal responsibility to do that work under the Food Safety Act 1990, and a number of protocols and service agreements that the FSA has with local authorities set out exactly what is required, which is monitored centrally by the FSA. The hon. Gentleman is right to say that there could be a mixed picture, with some local authorities being better than others, but the FSA monitors them and holds them to their service agreements and requirements.

[Jim Fitzpatrick]

In my exchange with the hon. Member for Somerton and Frome (Mr Heath), I accepted that this issue is not necessarily about extra funding, and it is certainly not about party political control because there are good and bad local authorities. The hon. Gentleman said he believed that the FSA had information about which local authorities were good and which could perform better. Is the Minister personally examining that in discussions with the FSA or with ministerial colleagues in the Department for Communities and Local Government? Getting those local authorities to raise their game, whatever the reason, is an objective that I am sure the Minister holds. Will he reassure the House that he is considering that issue?

[George Eustice]

The FSA manages and monitors the work of local authorities, but one of Professor Elliott’s recommendations is that we should have a new committee on food integrity and food fraud. I will chair that committee, and it will be attended by my colleagues and a Minister from the Department of Health. We will discuss those issues and monitor the situation to which the hon. Gentleman alludes.

Let me mention some of the other points that Members have raised. Sanctions were mentioned, and it is important to note that the maximum penalty is already 10 years. Sentences are ultimately a matter for the courts and the Ministry of Justice, but 10 years is quite a significant sentence. A number of Members asked why we have been so slow to get prosecutions, but as many will know, the City of London police are leading the investigation. There have been five arrests and two prosecutions, which are currently going through the courts. Hon. Members will understand that it is not appropriate for me to comment on ongoing legal cases, but we should recognise that the City of London police have faced challenges as they have had to engage with many different police forces across the European Union to bring prosecutions together, which has taken some time.

My hon. Friend the Member for Thirsk and Malton raised the issue of labelling in the European Union. From April next year we will introduce improved country of origin labelling measures for pork, lamb and goat. In future—just as has been the case for beef for the last decade or so—pigs and sheep must be reared and slaughtered in the country that claims to be the country of origin. That is similar to the situation that pertains for beef production. On traceability, provisions have been in place for more than 12 years, and EC regulation 178/2002 requires all member states to establish a means of monitoring where the food has come from at every stage of production. That legal requirement is enforced by the FSA in this country and by other member states.

My hon. Friend made the good point—my hon. Friend the Member for York Outer also alluded to this—that however good the traceability and labelling systems in place, a long supply chain is not conducive to eliminating food fraud. It is important for retailers to look at their supply chains and try to shorten them. It is also encouraging that many consumers have taken more interest in where their food comes from, and we need both consumers and retailers to take a little more interest.

[Miss McIntosh]

I am grateful to the Minister for giving way because he did not have the chance to reply to this point last Thursday. Will the police have powers of arrest? We will not be rushed by future business, Madam Deputy Speaker. We need to know whether the police will have powers of arrest, and who will pick up the bill for the additional costs of the food crime unit.

[George Eustice]

The key point is that the new food crime unit will have investigative powers, and it is envisaged that people from the National Crime Agency in the police force will be seconded to that unit. As my hon. Friend knows, the police always have powers of arrest—indeed, they have arrested people in this current investigation. The new food crime unit will be properly linked to the police force so that it has those powers.

Finally, let me turn to lab capacity. Professor Elliott raises a specific concern about whether there is consistency between existing private labs and their approach to testing. As a result, we accept his recommendation and have asked the analytical methods working group—an advisory panel to the Government—to consider that issue and ensure consistency. We had no lack of lab capacity in the crisis last year. In fact, our excellent laboratories at the Food and Environment Research Agency in York were on stand-by if they were needed, although in the event they were not. Private labs like LCG, which I will visit tomorrow, led on most of that work. My hon. Friend also mentioned the Danish model and expressed a view—perhaps because she has Danish roots—that it is better than the Dutch model. When it comes to the food crime unit, it is difficult to compare the Danish or the Dutch model with what we have in the UK because we have some 2,500 trading standards officers in local authorities, who are an integral part of our protection in that area.

It is perhaps fitting to conclude where my hon. Friend the Member for York Outer ended his remarks, and with Professor Elliott’s conclusion that we have some of the safest food in the world. I completely agree with him that we should protect the reputation of our hard-working farmers. The Government have introduced a new Government procurement plan which, as my hon. Friend the Member for Richmond Park (Zac Goldsmith) pointed out, will encourage greater sourcing of local food. We are also working to encourage more schools to take a greater interest in and promote food and an appreciation of food in the curriculum. I thank all hon. Members for their contributions to the discussion. We have covered many detailed issues, and I again congratulate the hon. Member for Brecon and Radnorshire on securing the debate.

20:27

[Roger Williams]

I voiced a slight concern at the beginning of the debate that I thought the seriousness and importance of the subject might be compromised by the small number of hon. Members present, but that concern has been confounded by the quality of the contributions made. I thank all Members who took part, including the hon. Member for Poplar and Limehouse (Jim Fitzpatrick), my hon. Friend the Member for Somerton and Frome (Mr Heath), the Chair of the Select Committee, the hon. Member for Thirsk and Malton (Miss McIntosh), and the hon. Member for York Outer (Julian Sturdy), for their contributions and a number of helpful interventions on the subject.

Professor Elliott set out eight pillars for the work that needs to be done. Paramount are the quality and reputation of British food and the rights of the consumer. I am sure that the House, the House’s Committees and Committees in the other place will take an interest in how the Government deliver on their commitment to accept all the report’s recommendations. We look forward to continuing that work.

Question put and agreed to.

Resolved,

That this House has considered food fraud.

Business without Debate

Monday 8th September 2014 Commons Chamber

Delegated Legislation

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Children and Young Persons

That the draft Children and Young Persons Act 2008 (Relevant Care Functions) (England) Regulations 2014, which were laid before this House on 24 June, be approved. —(John Penrose.)

Question agreed to.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Terms and Conditions of Employment

That the draft National Minimum Wage (Amendment) (No. 2) Regulations 2014, which were laid before this House on 30 June, be approved. —(John Penrose.)

Question agreed to.

European Documents

Monday 8th September 2014 Commons Chamber

Motion made, and Question put forthwith (Standing Order No. 119(11)),

EU Industrial Policy

That this House takes note of European Union Documents No. 5489/14 and Addendum, a Commission Communication: For a European Industrial Renaissance, No. 13964/13 and Addenda 1 to 3, a Commission Staff Working Document: Member States’ Competitiveness Performance and Implementation of EU Industrial Policy, and No. 13966/13, a Commission Staff Working Document: European Competitiveness Report 2013: Towards knowledge driven reindustrialisation; and supports the Government in pressing the Commission to develop a roadmap for industrial competitiveness that focuses on open markets, competition, trade, better regulation and innovation. —(John Penrose.)

Question agreed to.

Committees

Monday 8th September 2014 Commons Chamber

[Madam Deputy Speaker (Dame Dawn Primarolo)]

With the leave of the House, I will take motions 9 to 11 together.

Ordered,

Justice

That Mr Robert Buckland be discharged from the Justice Committee and John Howell be added.

Public Accounts

That Justin Tomlinson be discharged from the Public Accounts Committee and Stephen Phillips be added.

Work and Pensions

That Dame Angela Watkinson be discharged from the Work and Pensions Committee and Paul Maynard be added. —(Geoffrey Clifton-Brown, on behalf of the Committee of Selection.)

International Mining Industry

Monday 8th September 2014 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(John Penrose.)

20:29

[Eric Joyce (Falkirk) (Ind)]

We go from one important debate on a primary industry—farming—to another. I want to say a few words for the next short while on mining, a subject that gets too little attention in the UK. Like the shipping industry, we rely on mining for pretty much everything we use daily, but it is invisible to most of our constituents and most consumers. We do not mine that much in the UK, although it is still an important industry to an extent in parts of the country; we still have aggregates on the go and there is still quarrying, but mining is something that happens abroad. Like other primary industries, it can be more important in developing economies than it is in the UK.

I want to emphasise the UK’s contribution to international mining, which primarily comes through trading in the City of London. Most large mining companies, or certainly many, choose to be listed in the UK for the prestige and the convenience, and because they can raise capital here, and many that are not primarily listed in the UK are present in a large way. The large mining companies are listed here—smaller ones are on the AIM, the alternative investment market—and UK industries such as financial and legal services service the mining industry. Arguably London, along with Toronto, is at the forefront of the international mining industry, but much like shipping, we often do not realise that, because most of the mining goes on abroad.

In developed states, the things that we think of and speak of most and that dominate our daily lives are the services that we consume—the constant flow of ever more astonishing inventions, technologies and concepts that make our lives easier, more fulfilling or, often, simply better. People’s creativity often seems boundless. That ability and instinct to improve design means that new, astonishing things appear almost daily. The acceleration of ideas and technologically intelligent advances seem to be on a near-constant upward convex curve.

As an eight-year-old, I remember very well—I checked on Google to see whether it was a false memory—my dad getting me out of bed at 4 or 5 o’clock in the morning to watch Neil Armstrong and Buzz Aldrin landing on the moon. They played a bit of golf and turned the moon into a fairway for a brief period. That seemed like the apex of technological advancement for a very long time, but when we look back, we can see that technological advances have continued on a remarkable upward curve. The moon landing seems a very long time ago in technological terms. It is almost a bore to reflect on how things have changed. One thinks about computers in the period since then; the technology involved in that amazing scientific advance and historical event is very far behind where we are today.

We tend to reflect on what affects our daily lives and our services at the expense of the primary industries that facilitate them. In fact, mining uses many technological advances. One sometimes makes a false dichotomy between complexity and cleverness and the services we use daily. We sometimes forget that the primary industries on which the service industries rely are very sophisticated.

One reason why technology dominates our daily discourse is that we quickly adapt to new ideas, come to rely on them and want yet more. We adapt using our intelligence, and that is fabulous—we expect fabulous things and see them every day on the internet. The internet itself is a fabulous thing. Not everything that evolves through it is the best, but much of it is.

I am not complaining about new technologies dominating our daily lives, but they often challenge us to think about what values lie at the heart of the way we live. We have to consider whether certain new developments are advantageous, such as the potential meeting of the internet, DNA and new insurance products. We have to decide whether to allow them to happen and to go with the flow. We have to make a value judgment: perhaps we will know more about our futures and our own likely means of death if we choose to allow such things. That might or might not be desirable, but technology makes us make such value judgments. I guess that that is why these things are often at the forefront of minds in the developed world.

What is often at the forefront of people’s minds in the developing world is that the mining industry is potentially the only way of getting early money other than aid into the economy. Aid is very nice, but it is on a relatively small scale and can only ever be a sticking plaster. Often, the international mining industry comes along and has a transformative effect on the economy in the developing world, although not always. People talk about the resource curse, but we never think of calling oil and gas in Scotland a curse. We think, in a rather superior fashion, that it is okay if we have it, but that perhaps it is a curse to people in the developing world.

Of course, the result is not simply a function of the mining industry. It is usually a function of local governance and the capacity of a country to benefit from the exploitation of its natural resources. Sometimes other variables have to be fixed. Expectations can be high, and mining is very capital-intensive—it takes many years before the money is won back in profits, which is when populations start to benefit. Another variable is that people are sometimes moved out of other necessary parts of the economy, such as agriculture, into mining; there is a drag factor that takes people away from essential parts of the economy, often primary industries themselves. However, there are places in the world where it has been got right—in Africa I think of Zambia, and elsewhere I think particularly of Brazil. In many places, developing economies are being pulled out of low income into middle income and potentially, in the future, even into high income. I think even of Rwanda, where mining is not a large industry but a significant one all the same and makes a very important contribution.

I wrote down a few ideas for this speech last week having spent a month in Cornwall, as I do every year. I was in a very beautiful part of Cornwall—I should say that I informed the hon. Member for St Ives (Andrew George) that I was going to mention his constituency. I was staying in a cottage with my partner, and I looked out at what appears to be a memorial standing on the edge of a promontory, sticking out over a point where two seas join, which I discovered when I was down there is called Cape Cornwall. It is quite a remarkable sight—it looks like a memorial, but it is actually a chimney stack on the very edge of the promontory. Underneath the chimney, out to sea in the cape itself, is a set of rocks called the Brisons, where the mining industry pulled tin out of the ground, as it did right across Cornwall, effectively starting the industrial revolution. Hayle, the local port, was involved right at the start of the industrial revolution.

In due course, Cornwall’s mining industry had its time and then declined, which was largely to do with world tin prices. It was cheaper to extract it elsewhere in the world, and we became a different type of economy. As I said earlier, the service industry and new technologies came along, and other countries took over tin production. I will not bore the House with where tin extraction takes place now, but it is concentrated in a small number of countries, as is the extraction of things such as bauxite, which potentially will be concentrated in Guinea. That development is very much led by Rio Tinto, a UK company based and listed in London. The ground has already been broken for the initial infrastructure work, and when that development takes place, it will lead to the employment of thousands of people, and in many years to come—hopefully not too many years’ time—that will lead to substantial tax receipts for a country that currently has very few. It will also lead to infrastructure, because a railway will need to be built to export the bauxite from the site.

It is easy for us to forget the benefits of mining. I well understand why many good people I have known over the years through my involvement with the mining industry and the non-governmental organisations that are interested in it are often very negative. In this place, I hear more negative things being said about the international mining industry than I hear positive ones. To some degree, without wishing to be critical of people per se—certainly not Members of this House—there is a lack of awareness. Among our constituencies and our constituents, very few have a direct or immediate interest in this sort of mining—unlike with oil and gas—and their experience of mining is modest.

My constituency is just outside a next-door-neighbour refinery, so everybody understands the oil and gas industry. Everybody in the UK consumes oil and gas, and everybody sticks petrol and diesel into their cars as well as use gas in their homes. In the end, while there is much discussion and debate about the consumption of energy, I think people get a balanced perspective. The NGOs and the environmental bodies will lobby for good reason and encourage us to consume less and look for other ways of fuelling our lives. People also understand that we rely heavily on fossil fuels as well—and will do for some time to come. I often think, however, that when it comes to the mining industry, the public understanding is not there.

I am glad to see here on this occasion a Minister from the Department for Business, Innovation and Skills and not one from the Department for International Development. We tend to view mining as an international development issue when it is, in fact, very much a BIS issue. It is about UK businesses, and UK-listed businesses generating revenue for the UK and for overseas states. It is about helping with all sorts of areas of technological training within the UK and in the United States, contributing tax dollars or tax pounds. It is something we hear very little of.

People tend to hear the message that mining has had a chequered history. We all recognise and know about the many legacy issues throughout mining. For a period, and particularly in Africa—I know this very well—many deals and sales of assets were made that were very dubious. Mining companies bought assets off middle men, and 20 years ago, many questions were asked about mining companies. Now things are really quite different. The mining industry, including very large operators, as well as middle-sized and small operators, are very aware of public scrutiny of what they do, and they have very high standards of governance. That is sometimes not reflected in this place. It sometimes seems very hard to get a balanced debate or a balanced sense of what the mining industry is about.

When I engaged with the Government in the past, I tended to find myself having conversations with DFID. I understand why the matter will not be a top priority for all BIS Ministers, because this is not a big industry as such for our constituents, but in the end, I think the UK is probably in the leading position when it comes to this industry.

The Minister will probably be aware that I sit on the UK EITI—extractive industries transparency initiative—multi-stakeholder group. People might say that the UK does not need to sign up to the EITI. The initial concept was that it was for the developing world. Then Brazil and other countries such as India said, “If it is just for us, we are not going to sign up to it.” The UK sensibly decided to sign up, and we are going through the process now. So is the US, which is moving a bit faster, I suspect, because it has pretty much unlimited resources.

At the same time, legislation involving transparency and accounting directives to which we are signing up has by and large gone through with the consent of the whole House and, in the context of Europe, Britain has been at the forefront of those standards. In terms of who benefits, beneficial ownership from shares in large operators will pretty much be a feature of an open book as well. That is not to say, however, that the legacy issues do not exist. They certainly do, but sensible, well-governed mining operations need an opportunity to present their case to the public, so that we can understand the benefits, as many of the people they employ understand.

I will conclude on that point. No doubt the Minister will have a number of things to say about the support that his Department gives the mining industry in the United Kingdom, but I wonder whether he would consider meeting me, along with representatives of the mining industry, to discuss what the Government and the industry can do together to give people a much clearer understanding of the benefits that the industry brings, in balance with the important nature of governance under the control of the NGOs that we all know and love.

20:44

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

I congratulate the hon. Member for Falkirk (Eric Joyce) on securing the second debate on this subject that he and I have enjoyed. I think that his approach—including his emphasis on the role of mining in helping developing economies to trade their way out of poverty and into prosperity—is precisely the same as the approach that the Government take. It should be borne in mind that without the extraction of minerals such as coltan from developing countries such as Ethiopia, Mozambique and Brazil, it would not have been possible for his mobile phone to ring at the start of the debate. That approach is telling and practical, as well as being the right approach and one that we have taken at national and international levels.

The hon. Gentleman observed that some countries had used mining to take themselves out of poverty. He mentioned Rwanda, Zambia and Brazil, but it is also true that Botswana, which became an upper-middle-income country in 2007, was one of the world’s poorest countries when I visited it for the first time in 1996. Its success has been due largely to well-managed mining revenues from diamonds.

The hon. Gentleman spoke about the transformative effects of mining, pointing out that in some parts of the world such transformations are not positive. The success of mineral exploitation is down to governance as much as to physical extraction, low bribery rates, and law and order. The problem of conflict diamonds, for instance, arises when law and order and governance break down. This country has experienced the benefits of mineral extraction under good governance. That began in Cornwall, and evidence of the tin mines still litters the peninsula, but it has also happened in the midlands and the north of England where coal has been extracted, and, of course, in Scotland. The potential boost to economic growth is strong, is recognised, and is due to good governance as much as to the minerals themselves.

We take a cross-Government approach, which includes the Department for Business, Innovation and Skills and, of course, the Department for International Development. DFID has invested more than £50 million in bilateral aid spending on support for trade structures—for instance, building trade capacity and promoting regional integration to help to ensure that the governance is in a good place. The hon. Gentleman rightly emphasised that trade can serve as one of the most powerful functions ever introduced to increase prosperity and remove countries from poverty, but, as has been demonstrated throughout the world—not least in China—DFID also has a role to play in strengthening institutions, and strengthening the structures and the governance under which trade operates. We know, from our experience over the past few decades, of the enormous benefits that that engagement under good governance can bring. Indeed, extractives companies are important partners for us in government, ensuring that we help developing countries to make the most of their riches when they find them under their soil in order to drive up growth. That is the approach we take.

The hon. Gentleman mentioned the extractive industries transparency initiative. This is about progressing towards a common global standard of extractives transparency so that more citizens in poor countries share the benefits from natural resources. We are working with the World Bank, for instance in Mozambique, where we are investing in mining and gas sector reforms. We will support the Government of Mozambique to make sure that the laws on the ground are supportive, that operational standards are good, that health and safety is supported and that geological information systems are helpful. I pay tribute to the work that the hon. Gentleman has done as part of the EITI.

In May last year, the Prime Minister announced that the UK would sign up to the EITI. It is designed to build trust and dialogue between companies, civil society and industry. This is all about putting information into the public domain to promote public debate.

I also want to pay tribute to my hon. Friend the Member for Worcester (Mr Walker), who instigated the Business, Innovation and Skills Committee report into this area. This transparency is important, and many extractive companies are listed or headquartered in the UK and are supportive of the EITI. That stakeholder engagement has been very beneficial. For example, Rio Tinto and Shell sit on the multi-stakeholder board. Furthermore, in taking forward the beneficial ownership rules—pushed by the Prime Minister internationally and in the small business Bill—and in abolishing bearer shares and increasing the accountability of international business, we are acting in support of the direction of travel that the EITI plays such an important role in encouraging.

I note the presence of the hon. Member for Linlithgow and East Falkirk (Michael Connarty), who plays an important role in driving this agenda and helping to ensure that, through engagement and improving policy at a global level, mining and industrial development in developing countries can, through good governance, benefit the whole of those countries.

I reiterate the Government’s support of the EITI multi-stakeholder group, of which the Under-Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for East Dunbartonshire (Jo Swinson), is the Government representative. I acknowledge the rapid progress that has been made to date. The UK successfully submitted its candidacy application on 5 August this year. That is a key milestone in taking the EITI forward, and we look forward to the outcome in October of the next international board meeting. By signing up to the EITI, we want Governments to know that the EITI is not just for developing countries but that it is a global standard, and we have a stronger argument to encourage emerging and developing countries to adopt similar rules if we have adopted them here at home.

Finally, I want to reiterate the importance of the trust and transparency agenda more broadly. It matters in mineral extraction, but it also matters across the board: making sure we know who really owns and controls UK companies, which will help us to have a publicly accessible central registry of people with significant control; improving the transparency of corporate ownership; and making sure that the UK is a trusted place to do business and invest.

The UK has a specific role to play in driving this agenda because of the number of global companies headquartered here, and because of London’s role as the pre-eminent global centre of international finance. Therefore, taking steps here in this House of Commons, such as allowing overseas conduct to be used as a basis for disqualification here in the UK and increasing the time limit within which proceedings can be brought following an insolvency, have an impact across the world in driving this agenda forward.

I hope I have assured the hon. Gentleman that the Government recognise the important role of mining companies in developing economies, as well as the role of good, strong governance domestically and internationally in ensuring that bringing prosperity out of the ground through the extraction of minerals has a positive economic impact on the local economy, supports prosperity and ultimately supports what we are all here to do—namely, to improve the well-being of our citizens and other citizens around the world.

Question put and agreed to.

20:55

House adjourned.