House of Commons

Tuesday 2nd December 2014 Commons Chamber

Tuesday 2 December 2014

The House met at half-past Eleven o’clock

Prayers

Tuesday 2nd December 2014 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Tuesday 2nd December 2014 Commons Chamber

The Secretary of State was asked—

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

1. What recent support his Department has offered to peace talks in Colombia.

[The Minister of State, Foreign and Commonwealth Office (Mr Hugo Swire)]

The UK is a prominent supporter of the peace process and we have regular discussions with the Colombian Government. Last month, the Deputy Prime Minister reaffirmed the UK’s commitment when President Santos visited London. We are considering now how the UK can best support the implementation of any peace agreement, drawing further on our experiences in Northern Ireland.

[Mr Sutcliffe]

Following the Colombian army’s rampage in a village near Turnaco, in which nine bombs were dropped, machine guns were fired at civilians and two young men were shot dead, one of them later by the army as they took him away pleading for his life, with the army then dressing the men in FARC uniforms and claiming they were guerrillas—that incident does not get reported in the world press—is it not right that we have a bilateral ceasefire and not the unilateral ceasefire that keeps being offered by FARC?

[Mr Swire]

The big prize remains the ceasefire with FARC, which will benefit all the people of Colombia. I have always been happy to discuss the peace process and human rights with Members of both Houses. In October, I met at the Foreign and Commonwealth Office Members from the Parliamentary Friends of Colombia, the all-party group on Latin America and the all-party group on human rights. I am happy to do that again to discuss these things, and I am also putting together a meeting, as I promised, with the Colombian ambassador. If the hon. Gentleman wants to come to the meeting with me, he is more than welcome.

[Mark Pritchard (The Wrekin) (Con)]

Last December, I visited Colombia, with part of the talks being about reforming the Colombian intelligence services—the DAS. Does the Minister agree that for there to be public confidence in the peace process, the Colombian Government need to go further and faster in reforming their intelligence services?

[Mr Swire]

I do not think it is for me to give a running commentary on the intelligence services of Colombia. We assist the Colombian Government in our mutual desire to stamp out the drugs trade—we co-operate closely with them on that. A lot of things need to be reformed in Colombia, not least the perception of impunity for the armed forces, but I say again that the big prize is, first, to secure the peace—then the dividend can be cashed in.

[Jim Sheridan (Paisley and Renfrewshire North) (Lab)]

The unlawful killings of innocent people in Colombia continue, as they did even last week. I am delighted that the Minister is arranging a meeting with the ambassador, but may I ask him whether he would invite along the Justice for Colombia all-party group, because the people on it are working at the sharp end and can tell us exactly what is happening in Colombia?

[Mr Swire]

My meeting really should be for Members of both Houses who wish to accompany me, many of whom are expert advocates for Justice for Colombia.

[Martin Horwood (Cheltenham) (LD)]

Last week, I met Irrael Solano, indigenous governor of the Zenú community, who is on a death list of the so-called Caribbean coast commando. At least 60 members of his community have been assassinated, so he takes that threat very seriously. Will the Government urge the Colombian Government to do whatever they can to protect Señor Solano and other human rights defenders along the Caribbean coast?

[Mr Swire]

Indeed, and I think the hon. Gentleman is a perfect candidate to come with me to raise these matters personally with the ambassador in January. We are concerned about human rights defenders, as I have made clear, including when I was in Bogota. I hope that the Colombian Government will realise how keen an interest this House takes in both the peace process and the wider case for justice for all in Colombia.

[Mark Durkan (Foyle) (SDLP)]

The Minister is aware that a number of Northern Ireland Members have engaged both with the Colombian Government and the FARC negotiators in Havana. Is he also aware that we are particularly concerned that the democratic opposition in Colombia, which is not represented at the negotiations, should have its position affirmed because it, along with civil society groups, has a key role to play in taking the peace process forward—a peace process for which it has fought so long?

[Mr Swire]

All have a role to play in gaining peace in that country, which has been ruined by the civil war with FARC. When I was recently in Cuba, as the first British Minister to visit in 10 years, I raised this matter with Cuba, which is playing host to the peace process. I say again that these negotiations with FARC are quite a long way through and what we need to see is a final settlement with FARC—we have just seen the release of the brigadier general and the others who were taken by FARC within the last month or so. That remains the big prize and everybody should have a say in the peace that will ensue from that.

[Kerry McCarthy (Bristol East) (Lab)]

Land grabs have been a predominant feature of the conflict, and restitution of land is a key part of the peace discussions. With the Government promoting business opportunities in Colombia, will the Minister say what guidance they issue to UK companies on forced displacements and what safeguards they insist on to ensure that the UK is not supporting economic projects using illegally acquired land?

[Mr Swire]

All British companies anywhere in the world are issued with guidelines on ethical investment, and those operating in Colombia are no exception. I am delighted that in 2013 we met our £1.75 billion bilateral trade and investment target for Colombia two years ahead of schedule. We have now set a revised target of £4 billion by 2020. Growth stood at 126% from 2009-12. Ethical investment is important, but so too are investment and bilateral trade. We are a Government who believe that increased trade is the sea on which all ships rise together. That benefits all in Colombia, even the poorest.

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

2. What steps he has taken to prepare for renegotiation of the terms of the UK's membership of the EU with his EU counterparts; and if he will make a statement.

[Maria Miller (Basingstoke) (Con)]

12. What assessment he has made of the scope for reform of the EU under the new European Commission.

[The Secretary of State for Foreign and Commonwealth Affairs (Mr Philip Hammond)]

I have already visited 10 member states over the past few months to discuss EU reform with my counterparts and others. More and more leaders across Europe agree that the EU needs to change. We have already made progress: the June European Council agreed that EU reform was necessary and that the UK’s concerns should be addressed.

[Miss McIntosh]

I wish the Foreign Secretary well in his renegotiation. Does he share my view that we should be confident about achieving it? Some areas will require treaty change but others will not, particularly as there is common interest in benefits for migrant workers and in limiting the access shared by Germany, Denmark and other member states.

[Mr Hammond]

I agree that we should be optimistic about the scope for achieving change in the European Union because more and more of our EU partners agree with the agenda that we have set out. They agree that the European Union must reform to survive and prosper in the future. But it goes further than that. We have already had success: our Prime Minister is the first one ever to have negotiated a reduction in the EU budget; we have opted out of the eurozone bail-out fund; and we have secured vital protections for non-eurozone countries in the banking union. I am confident that we will secure the reforms that the EU so urgently needs to be more competitive and more democratically accountable and, crucially, to make it acceptable to the British people, who, under a Conservative Government, will be the ones who have the last say in 2017.

[Maria Miller]

The British people should have the final say on the UK’s relationship with the EU, and I applaud the Prime Minister’s approach on an in/out referendum. The constituents who contact me support a trading partnership with Europe, but not a political union. Will the Secretary of State emphasise the vital importance of trade when discussing the future of the UK in the European Union? My constituents who work for major multinational companies headquartered in Basingstoke want to know that that is at the forefront of our negotiations.

[Mr Hammond]

I could not agree more with my right hon. Friend. Trade is at the heart of the European Union. Completing and deepening the single market and extending it into the digital, energy and services markets—areas on which we have scarcely scratched the surface—is the way to deliver economic growth in the European Union in the future, together with completing international trade treaties such as the transatlantic trade and investment partnership that will also hugely expand our opportunities.

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

We are not part of the eurozone and neither is Poland. Part of a reformed European Union will have to accommodate those countries that are not part of the eurozone. When did the Secretary of State last meet his Polish counterpart to discuss what that new architecture might look like?

[Mr Hammond]

I have had a couple of meetings with my new Polish counterpart and had more extensive meetings with the former Polish Foreign Minister Sikorski. I will be going to Brussels later on this afternoon and will have the opportunity to meet my Polish counterpart again. What the hon. Lady says is absolutely right. An essential emerging feature of the new EU architecture is the fact of the eurozone and the non-eurozone. If those countries in the eurozone wish to pursue closer political integration, they will be able to do so. Those countries that are outside the eurozone must be assured of the integrity of the single market, even though they will not take part in that process.

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

When the Secretary of State is meeting all his important European Union people, will he tell them that there are many people in this country and in this House who value the peace and prosperity that the European Union has brought to this country? Given the threatening world in which we live with President Putin and all the other things that are happening, we value that relationship and want to build on it.

[Mr Hammond]

Of course we value the benefits that being in the European Union brings us, principally through the single market but also with security, as we have seen in the confrontation with Russia over Ukraine. What we now need to do is address the bits of the European Union that are not working effectively, that are holding Europe back so that it is no longer competitive in the world and that represent a failure of democratic accountability so that we get a European Union that is acceptable to the British people. We as a Conservative Government will allow the British people to have the final say on that.

[Sir Malcolm Rifkind (Kensington) (Con)]

I caution my right hon. Friend that it is rarely wise to reveal too much detail of one’s negotiating objectives more than six months before the negotiations can possibly begin. In such circumstances, one’s negotiating partners tend to give a very hostile response even in areas where they might ultimately be willing to compromise.

[Mr Hammond]

My right hon. and learned Friend’s advice is very wise. I think the correct approach is probably to show a little ankle, but not too much. We need to be clear to our European Union partners that we are entering negotiations with a constructive agenda. We want to get a reformed European Union and a renegotiated relationship between Britain and the European Union that is acceptable to the British people, but the hurdle is high because it will be the British people, under a Conservative Government, who make the decision in a referendum in 2017.

[Mr Douglas Alexander (Paisley and Renfrewshire South) (Lab)]

In his first answer this morning, the Foreign Secretary was specific about the number of European countries he has visited as Foreign Secretary, so will he now be specific about at least some of the repatriations he is seeking from the European Union? Even a little ankle will do.

[Mr Hammond]

The right hon. Gentleman’s question was slightly unfortunately timed, given the question asked by my right hon. and learned Friend the Member for Kensington (Sir Malcolm Rifkind). Of course we do not want to run around Europe at this stage in the negotiations with a list of specific repatriations. It is far more important to establish the principle and how we will deliver it—that is, the principle of subsidiarity and how it will be effectively overseen within the European Union.

[Mr Alexander]

I think that the whole House, including the Foreign Secretary’s Back Benchers, will have noted the unwillingness to name even a single repatriation, but one will do when he gets back to his feet. What is the Government’s estimate of the economic benefit of the UK’s membership of the European Union?

[Mr Hammond]

As I have said, we are clear that the UK benefits enormously from access to the single market in Europe. We want to remain part of the European Union and we are entering these negotiations on the basis of a clear intent to negotiate the very best deal we can for Britain, addressing the concerns clearly expressed by the British people. In the end, it will be the British people who decide whether that package is good enough.

[Andrew Rosindell (Romford) (Con)]

Does the Foreign Secretary agree that any change in our relationship with the European Union should be based on trade and co-operation and not on political union?

[Mr Hammond]

We want trade and co-operation to flourish in the European Union and we do not subscribe to the view that ever-closer union is the answer for United Kingdom. I regard it as significant progress that in the conclusions of the June European Council this year we had for the first time an explicit recognition that not every country will pursue the same level of integration and closer union. That is progress.

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

3. What assessment he has made of the effects of incitement to hatred in the Palestinian media on prospects for a peace settlement in that region.

[The Secretary of State for Foreign and Commonwealth Affairs (Mr Philip Hammond)]

I am aware of recent provocative material published in parts of the Palestinian press. We deplore incitement on both sides of the Israeli-Palestinian conflict and we are clear that inflammatory language and images damage still further the already fragile prospect of a peace settlement.

[Mrs Ellman]

Official Palestinian Authority TV has praised as martyrs the terrorists who mowed down civilians on the streets of Jerusalem and the terrorists who killed rabbis and others at prayer in a Jerusalem synagogue. Does the Foreign Secretary agree that this is about perpetuating hatred and violence rather than promoting peace?

[Mr Hammond]

Yes, and we do not hesitate to raise these instances of incitement with the Palestinian Authority. I spoke to President Abbas last night and raised these issues with him while at the same time thanking him for his personal robust condemnation of the synagogue attack in West Jerusalem. We have to raise these issues whenever they occur, but we should also praise robust responses by leaders of the Palestinian Authority when they make them.

[Dr Julian Huppert (Cambridge) (LD)]

None of us would condone the incitement of hatred, and there is no doubt that there are people on each side who make matters worse, but does the Foreign Secretary agree that illegal settlements, extra-judicial punishments and discriminatory laws also make the search for a peace settlement much harder?

[Mr Hammond]

Yes, we are clear that settlements in the occupied territories are illegal under international law and, perhaps even more importantly, deeply unhelpful to the prospects of a peace process. We urge the Israelis at every opportunity to cease the settlement programme. If we are to move forward into peace talks, which I fervently hope we can do in the coming weeks and months, there will have to be a cessation of settlement activity while that process is ongoing.

[Andy McDonald (Middlesbrough) (Lab)]

The Israeli Knesset will soon vote on the Jewish state Bill, which would deny national rights to Israel’s minorities, remove Arabic as a national language and assert that Israel’s identity as a Jewish state comes before its nature as a democracy. At a time when tensions between Jews and Arabs are running high, does the Foreign Secretary agree that it is wrong for the Government of Israel to press ahead with that discriminatory piece of legislation?

[Mr Hammond]

That is a piece of legislation before the Israeli Parliament, but I can tell the hon. Gentleman that we are always opposed to discriminatory legislation. Depriving people who are resident within a state of their citizenship and discriminating against them with regard to language will never be conducive to the peaceful co-existence that I think virtually everybody seeks for Israel and Palestine.

[Sir Bob Russell (Colchester) (LD)]

Does the Foreign Secretary agree that public opinion in the UK is moving strongly against Israel because it is morally indefensible to support a state that has policies of ethnic cleansing and apartheid?

[Mr Hammond]

I am not sure that I agree with the hon. Gentleman’s characterisation of the reasons, but I agree that public opinion is moving against Israel in a country that has traditionally been understanding of the Israeli position. We have made the point strongly to Israeli Ministers and politicians that they are losing the argument and public opinion not only in Britain, but in Europe and, perhaps more importantly for them, in the United States.

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

What will be the effect on the Palestinian media of the renewed Israeli policy of demolishing the houses of offenders, thus making their families homeless and punishing the entire family for the crimes of one person? Is not that inhumane, and ought it not to be stopped?

[Mr Hammond]

We do not approve of the collective punishment strategy and make our views on that very well known on every possible occasion. I cannot give the right hon. Gentleman an analysis of the impact on the Palestinian media, but I can see exactly where he is coming from. We will continue robustly to oppose policies of collective punishment.

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

4. What assessment he has made of the implications for his policies of the vote by the House on 13 October 2014 on recognising Palestine as a state alongside Israel.

[The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Tobias Ellwood)]

This weekend marks 67 years since the UN General Assembly adopted resolution 181, which recommended a two-state solution, and it has been 21 years since the Oslo peace accords, so it is no wonder that Parliaments and citizens around the world are calling for debates and for leadership in implementing plans that were devised and agreed decades ago. However, British recognition of Palestine must be not just symbolic but strategic and used in the wider context of securing that solution.

[Michael Connarty]

I think I half-thank the Minister for that answer, because really he has not done anything, and nor have this Government, to recognise what Parliament has said. By 274 votes to 12 we called for recognition. Some 40% of Labour Friends of Israel voted for that recognition, as did 40 Conservative Members of Parliament. What will it take to get this Government to stand up, do the right thing, get out from under the shadow of the USA and speak for the UK Parliament?

[Mr Ellwood]

Well, I ask the hon. Gentleman what is the right thing. We can only use this card once, and we need to use it sensibly. We need to bring parties back to the table. This Government share Parliament’s commitment to recognising a Palestinian state but as a contribution to a negotiated two-state solution. We are in the process of getting people back around the table. That is what John Kerry is committed to, and that is what should happen next.

[Mr Peter Bone (Wellingborough) (Con)]

I accept what the hon. Member for Linlithgow and East Falkirk (Michael Connarty) said about the Back-Bench debate, and I think it was unfortunate that the Government did not ask more Members to be here to express those views. I take the view myself that if we are going to get peace, the overall position is that a recognition of Palestine has to come at the same time as an overall peace agreement. Do the Government agree that that is the best way forward?

[Mr Ellwood]

I pay tribute not only to the debate that took place in this Chamber but the debate that took place yesterday called by the hon. Member for Easington (Grahame M. Morris) and prompted by an e-petition signed by over 100,000 constituents. We do pay attention to these issues. Bilateral recognition would not end the occupation. Without a negotiated settlement, the occupation and the problems that come with it would still continue. That is why, at the stage we are at now, we must invite people back to the table, and I hope this will happen very soon.

[Lisa Nandy (Wigan) (Lab)]

The Minister said that the Government can only play this card once. After the horrific events in Gaza over the summer and the recent violent clashes in the west bank and Jerusalem, will he tell this House how many more children have to die before the Government decide that it is the right time to play the card to give the Palestinian people an equal seat at the negotiating table, and recognise that recognition of the Palestinian state is a contribution to meaningful negotiations and not a consequence of them?

[Mr Ellwood]

I hear what the hon. Lady says, but if she had attended yesterday’s debate she would be aware that the whole world is concerned about this. Ban Ki-moon, the UN Secretary-General, has said, “Is this what we do—reconstruct and then it gets destroyed, reconstruct and then it gets destroyed?” We must bring people to the table to make sure that there is a long-term solution to the problems and so that we do not see another Operation Cast Lead, Operation Pillar of Defence or Operation Protective Edge. That requires both sides to come together, and there is much work to do before Britain is going to be ready to recognise Palestine as a state.

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

Will the Minister consider for a minute how it would sound to a Palestinian to hear him say that recognition of their right to self-determination is a card to be played, any more than how it would sound to an Israeli to say that recognition of Israel is a card to be played? What is he actually doing to talk to European partners to secure recognition and not to put the day off?

[Mr Ellwood]

Forgive me if my comment sounded flippant—that was not my intention at all. Anybody who attended the debate yesterday, or indeed the debate that took place in this Chamber, will know of my personal commitment to working with people on both sides. I spent some time in Israel. I visited Gaza and saw the destruction with my own eyes. I should also underline the commitment that Britain is making to the reconstruction; that was outlined when I attended the conference in Cairo. I say again that it is important that given where we are in the process, with John Kerry about to embark on a new round of talks, that is what we should allow to take place at this very moment.

[Gareth Johnson (Dartford) (Con)]

5. What steps the Government are taking to support Falkland islanders experiencing harassment by the Argentine Government.

[The Minister of State, Foreign and Commonwealth Office (Mr Hugo Swire)]

As I said only yesterday to representatives of the Falklands Islands Government who were in London for the Overseas Territories Joint Ministerial Council, this Government remain steadfastly committed to the defence and security of the Falklands. We will continue to speak up for the islanders’ right to self-determination and to provide them with support as they seek to develop and internationalise their economy.

[Gareth Johnson]

I thank my right hon. Friend for his answer, particularly his reference to self-determination for the Falkland islanders. Does he agree that anything other than self-determination would be nothing other than an affront to the 255 British servicemen who gave their lives during the Falklands conflict?

[Mr Swire]

Yes, I entirely agree. As a result of that conflict, we are still mine-clearing on the islands. I congratulate BACTEC, the company in my hon. Friend’s constituency that has just secured the contract to carry out the fourth phase of de-mining in the Falklands. The people of the Falkland Islands have spoken. I was there in February. There was a 92% turnout, and 99.8% voted yes. People in the region should respect their human rights and their rights to self-determination.

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

The Minister will know that there is going to be an election in Argentina soon and that rhetoric against the Falkland Islands usually increases considerably in such periods. What representations are the Government making to other countries in Latin America and the Caribbean, including some that are in receipt of British development assistance, to try to neutralise the rhetoric that will come out of Argentina?

[Mr Swire]

We do not seek to neutralise anything; we just seek to tell it as it is and we encourage the Falkland islanders, who are by far the best advocates, to travel around the region to tell others about their life. The hon. Gentleman is absolutely right: we anticipate an increase in rhetoric, threats and intimidation as we approach the election, but we are hopeful that after it we might be able to have a more mature and sophisticated relationship with whoever will be the President of Argentina.

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

6. What further support the Government plan to provide to the coalition effort to defeat ISIL.

[The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Tobias Ellwood)]

Britain is one of 60 countries participating in a coalition to defeat ISIL and we are making a significant contribution, including the air campaign and training Iraqi ground forces. The training of those local forces is critical in order for them to take and hold the ground, maintain security and begin the process of stabilisation and governance.

[Rehman Chishti]

I thank the Minister for that answer. He will know that ISIL needs to be defeated in Iraq and Syria. Two years ago, I raised with the then Foreign Secretary the creation of safe havens on the border of Turkey and Syria. They could now be used by the Free Syrian Army as a launching pad to defeat ISIL in Iraq and Syria as well as the brutal Assad regime. I understand that some Arab countries have raised the issue with the United Kingdom. Will we support them?

[Mr Ellwood]

I understand what my hon. Friend is saying. We have had discussions with our Turkish counterparts and others, and General John Allen is also looking at the issue. It needs to be considered in the wider context of the campaign and it is on the table at the moment, but that is as far as it goes.

[John Woodcock (Barrow and Furness) (Lab/Co-op)]

18. Do the Government recognise that the failure of reconstruction after the last Iraq war shows that any military effort will be insufficient unless the UK does far more to engage with its partners and allies, to enable good governance in currently ungoverned spaces in Iraq and Syria to prevail?

[Mr Ellwood]

The hon. Gentleman raises a critical point. The international community, especially Iraq’s neighbours and Iraq itself, must play a crucial role in providing assistance and technical support and governance and stabilisation once the fighting has happened. We are seeing successes: Iraqi forces have liberated the key town of Baiji, and the National Guard programme is formalising the militia structure, to improve security as well as command and control. They are stopping ISIL in its tracks and pushing it back, out of Iraq. This is a turning point.

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

I pay tribute to our superb efforts in Iraq, but I absolutely agree with the hon. Member for Barrow and Furness (John Woodcock) that we are not going to defeat ISIL—the question is about defeating ISIL, not containing it—by doing what we are doing at the moment. We will defeat ISIL only if we engage politically with the Government in Baghdad and find ways of engaging with the friendly Sunni forces in Iraq. What discussions are the Government having with Baghdad about how they can extend their political influence?

[Mr Ellwood]

My hon. Friend makes an important point. It is the inclusivity of the al-Abadi Government, in contrast with the Malaki Government, that is making sure that Sunnis are included in Iraq and Baghdad. It is therefore important that they, not us, take the space, which is why the boots on the ground are Iraqi boots, not ours, so that they can move towards more inclusive governance and reconstruction capability.

[Meg Munn (Sheffield, Heeley) (Lab/Co-op)]

Many Yazidi Kurdish women have been abducted by the so-called Islamic State. They have been held as slaves and raped. What are the Government doing to ensure that there is more publicity about the issue and that we do more to stop these crimes against humanity?

[Mr Ellwood]

The hon. Lady raises an extremely important point that underlines exactly why ISIL and its ideology must be removed from Iraq and, indeed, Syria, and prevented from spreading elsewhere. We are working very closely with our Kurdish counterparts on this very issue. I shall visit the region soon and raise the matter.

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

One crucial part of the effort to defeat ISIL is surely to help those made even more vulnerable by its advance. Given that the World Food Programme has had to suspend assistance to almost 2 million Syrians, what action are Ministers taking to help to ensure that the World Food Programme can resume its efforts to ease the plight of Syrian refugees?

[Mr Ellwood]

The hon. Gentleman makes an important point. While we discuss military matters and indeed governance, an entire generation is suffering in Syria itself. Britain is one of the largest donors to Syria. We have committed over £700 million in aid to provide support on the very issues he talked about, and we have also provided £23 million-worth of aid to Iraq. If I may, I shall look into the issues concerning the World Food Programme and get back to him.

[Jim McGovern (Dundee West) (Lab)]

7. What steps his Department is taking to help bring Israeli and Palestinian leaders back to peace talks.

[David Mowat (Warrington South) (Con)]

9. What recent assessment he has made of the likelihood of a two-state solution emerging in the middle east.

[The Secretary of State for Foreign and Commonwealth Affairs (Mr Philip Hammond)]

The UK is fully supporting US-led efforts, working with the Egyptians, to bring Israeli and Palestinian leaders back to negotiations aimed at achieving a lasting peace. We are also working with European partners, especially France and Germany, to support that US-led process.

[Jim McGovern]

I thank the Minister for his answer. The point that I want to make was possibly covered earlier, but it is so serious that it is worthy of repetition. Illegal Israeli settlements are causing friction, to say the least, and they are a roadblock in the peace process. What is the Secretary of State doing with his EU counterparts to challenge this and to make sure that there are no roadblocks?

[Mr Hammond]

As I said earlier and have said on previous occasions in the House, the settlements are illegal. We condemn them, and every time a new one is proposed, we make that view known to the Israeli Government. But I have gone further than that, and I repeat today that we have to be clear that we will not allow the fact of illegal settlements to define the shape of an eventual settlement. We cannot allow one of the parties to this conflict to build themselves into a position to dictate the eventual peace. Settlements can be built and settlements can be removed, but every settlement that is built is illegal and it cannot be allowed to stand immovably in the way of the peace process.

[David Mowat]

The Secretary of State has talked about the preference for a successful peace process, but actions speak louder than words. The 1,000 acre land grab around Bethlehem in September surely indicates that Israel does not really have the serious intention of allowing a two-state solution. Given that, should we not be thinking about how we are going to recognise Palestine?

[Mr Hammond]

This is not an excuse, but a great deal of domestic politics is involved in this issue. The 1,000 acres that my hon. Friend mentioned have not, as I understand it, been developed in any way; it was simply a designation. It is unacceptable, but it is a political statement, and we have to make sure that it does not stand in the way of an eventual two-state solution.

[Several hon. Members]

rose—

[Mr Speaker]

Order. I am afraid that colleagues will have to see what opportunities are presented during topical questions. Progress today has been incredibly slow, and we have a lot of questions to get through.

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

8. What recent assessment he has made of the effects of Russia’s ban on EU food imports.

[The Minister for Europe (Mr David Lidington)]

We estimate that about £4.5 billion of EU food exports stand to be affected, of which the UK share amounts to £39 million. At the same time, import restrictions have led to price increases to Russian shoppers of about 15%.

[Ms Ritchie]

Russia’s ban on EU food imports has contributed to the creation of an imbalance between market demand and supply in the dairy industry, particularly in Northern Ireland, where we rely greatly on exports. In view of that, will the Minister have immediate discussions with his ministerial colleagues in the Department for Environment, Food and Rural Affairs with a view to pursuing other global markets for the dairy industry?

[Mr Lidington]

I completely understand the hon. Lady’s point about producers in Northern Ireland. As she knows, some EU compensation arrangements are available, but she has put her finger on the really important point. My colleagues in DEFRA and UK Trade & Investment want to work with producers in Northern Ireland and elsewhere both to access the EU funds available for getting into alternative markets and to promote the excellent produce from Northern Ireland in third markets worldwide.

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

Given that Russia’s food import problems are due to the financial sanctions imposed on it by the EU because of Russia’s illegal behaviour in Crimea and eastern Ukraine, and given that yesterday the rouble had its worst day since the 1990s, does the Minister agree that financial sanctions will bring Russia to the negotiating table, and will he continue with them?

[Mr Lidington]

Russia has certainly suffered heavily as a result of the imposition of sanctions in the way that my right hon. Friend describes. We have seen a flight of capital out of Russia, as well as the precipitate fall in the value of the rouble. I hope that the Russian leadership will accept that it is in the interests of the Russian people to implement the Minsk agreement with Ukraine in full and, in particular, to return to Ukraine control of her sovereign borders.

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

Further to the question from the right hon. Member for Croydon South (Sir Richard Ottaway), world leaders rightly made their views known about the Russian actions in Ukraine at the recent G20 summit in Australia. Will the Minister say more about the effect that he thinks the sanctions and the recent fall in the oil price are having on Russia and, in particular, whether he believes that the combined effect is producing a change in Russian attitudes towards fostering nationalism in Ukraine and possibly in other countries with Russian-speaking minorities?

[Mr Lidington]

I agree with the right hon. Gentleman’s implicit point that we are concerned not just about Ukraine, but about the doctrine of a right to intervene in support of Russian speakers anywhere in the world. The answer to his question is that, sadly, we are not yet seeing a return to serious talks and the implementation of the Minsk peace agreement by the Russian leadership, but the impact of sanctions on the Russian economy, coupled with the decline in oil prices, is catastrophic. It is in the interests of the Russian people that we see a change.

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

What assessment has the Minister made of the impact on the people of Russia and on Russian public opinion of the effect of the sanctions and the declining oil price?

[Mr Lidington]

The people of Russia—ordinary families—are bearing the brunt of the cost of the Kremlin’s adventurism in Ukraine through much higher inflation, a lack of access to high-quality, good-value imported produce, and a decline, every week, in the value of the rouble in their pockets.

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

10. When he next plans to visit Malaysia.

[The Minister of State, Foreign and Commonwealth Office (Mr Hugo Swire)]

I plan to visit Malaysia early next year. My visit will coincide with the start of Malaysia’s chairmanship of the Association of Southeast Asian Nations and its elevation to a non-permanent seat at the UN Security Council. My discussions will focus on issues of mutual interest, including trade, security, the Commonwealth and human rights. My right hon. Friend the Foreign Secretary looks forward to welcoming Malaysia’s Foreign Minister to London next week.

[Tom Greatrex]

I am grateful to the Minister for his reply. He will be aware that last week, the Malaysian Government went back on their pledge to repeal the sedition law, and are instead entrenching and extending its characteristics. He will also be aware that there is growing international concern that the law is being used to imprison political opponents and religious minorities, particularly the Christian community. Will he and the Foreign Secretary undertake to ensure that those issues are raised with the Malaysian Government in their engagements over the next few weeks?

[Mr Swire]

My right hon. Friend the Foreign Secretary reminds me that such issues always are raised. He will certainly raise them. We are aware of the recent comments by Prime Minister Najib regarding the Malaysian sedition laws. We will look at his comments about the proposed legislation closely. We are clear that the Malaysian Government should conform to international standards and norms.

[Mr Philip Hollobone (Kettering) (Con)]

11. What estimate he has made of the number of rockets in Hezbollah’s arsenal in southern Lebanon which could be deployed against Israel; and what diplomatic efforts his Department is making to seek a reduction in that number.

[The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Tobias Ellwood)]

We are aware of continued reports of Hezbollah’s arsenal of weapons in southern Lebanon. Those weapons pose a threat to regional security and are in violation of UN Security Council resolutions.

[Mr Hollobone]

Hezbollah’s extensive arsenal contravenes UN Security Council resolutions 1559 and 1701, which call on it to disarm, yet the UN peacekeeping force in Lebanon has not stopped the re-arming of Hezbollah and rarely inspects Hezbollah-controlled villages for illicit activity. Given that every Israeli city is now within range of the rockets, will the Minister use his good offices in the UN to ensure that the United Nations Interim Force in Lebanon has the resources it needs to police southern Lebanon effectively?

[Mr Ellwood]

My hon. Friend makes an important point. That matter was raised with me during my visit to Israel. We are committed to supporting peace and stability in Lebanon. Since 2012, the UK has been delivering a $31-million programme to train and equip the land border regiments to provide stability. More work needs to be done with the UN and we must ensure that Hezbollah agrees to the UN resolutions.

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

Lebanon’s position in the middle east is being destabilised by the fact that a quarter of the population is made up of Syrian refugees. The United Nations has called for countries throughout the world to resettle at least 130,000 of those refugees. Why have only 90 been allowed into the United Kingdom?

[Mr Ellwood]

As has been made clear before, we feel that it is best that refugees are kept closer to the region so that they can return. The whole House should pay tribute to Lebanon for its work in taking 1.2 million refugees, which, as the hon. Gentleman says, is almost a quarter of its population. The UK Government have provided more than £273 million to help with stability in the area and to support refugees there.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

13. What recent progress the Government have made on the transatlantic trade and investment partnership.

[The Minister for Europe (Mr David Lidington)]

The seventh round of negotiations concluded in October, and our ambition remains to agree a deal next year that could benefit the average British family by £400 a year.

[Stephen Metcalfe]

I thank my right hon. Friend for his answer. Will he confirm that as part of his negotiations, he will reiterate that signing TTIP is not the start of the privatisation of the NHS?

[Mr Lidington]

I can absolutely confirm that to my hon. Friend. In early October, both the United States and EU chief negotiators made it clear in public statements that there would be no provisions in the trade agreement that would limit the ability of Governments to regulate health provision or other public services.

[Mr David Hanson (Delyn) (Lab)]

At a meeting in my constituency last Friday, those very concerns about the privatisation of the health service were raised, as were concerns about the reduction in minimum standards such as the minimum wage and conditions at work, and about the ability of a UK Government to put conditions on suppliers to the UK. Can the Minister give my constituents some reassurances on those points?

[Mr Lidington]

I would like to think that the right hon. Gentleman made it clear that he was not going to add to the scaremongering rumours that he has just described, especially given that the Government in whom he served were an ardent champion of this trade deal with the United States. It is clear that the TTIP deal will not limit the ability of Governments to legislate for, or to regulate, public services. It will provide businesses large and small in this country with enormous opportunities to get access to a US market of 300 million customers, and the entire House should be united in supporting that.

[Nic Dakin (Scunthorpe) (Lab)]

15. What recent discussions he has had with his EU counterparts on freedom of movement within the EU.

[The Secretary of State for Foreign and Commonwealth Affairs (Mr Philip Hammond)]

I have discussed EU migration extensively with my counterparts as part of a series of visits to EU capitals to discuss EU reform and renegotiation. We are not alone in seeing EU migration as a qualified right. We secured reference in the June European Council conclusions to the need to protect EU migration from misuse, and last week the Prime Minister set out his proposals for doing just that.

[Nic Dakin]

Will the Secretary of State confirm that we should use the Dano judgment, which confirmed that member states have significant leeway, to ensure that people who come to the UK come to work, not to claim? Will he also confirm that we can do that without threatening our position as a member of the EU?

[Mr Hammond]

The hon. Gentleman is absolutely right. The Dano judgment has once again shown that sometimes we in this country assume that the body of EU regulation requires us to do things that it actually does not. We sometimes find, as we did in that case, that there is more flexibility to work within the existing treaty powers than is assumed.

[Pauline Latham (Mid Derbyshire) (Con)]

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

[The Secretary of State for Foreign and Commonwealth Affairs (Mr Philip Hammond)]

Since the last Foreign and Commonwealth Office questions, I and my team have been focused on the major foreign policy challenges facing the UK—ISIL in Iraq and Syria, Russian aggression in Ukraine, the middle east peace process, Libya and the Ebola outbreak. In addition, I have been continuing my programme of visits to EU capitals, exploring the common ground that exists on the need for EU reform, explaining Britain’s requirements for its future relationship with Europe and listening to the views of parliamentarians, academics, journalists, commentators, Ministers and Government officials across the continent.

[Pauline Latham]

I thank my right hon. Friend for his answer. What assessment has he made of the co-ordination across Whitehall Departments in delivering the Government’s response to Ebola, both in Sierra Leone and here in the UK?

[Mr Hammond]

Over the summer I led the Government’s cross-departmental response, involving a huge amount of resource from the Department for International Development, the mobilisation of our diplomatic networks by the Foreign Office, and a massive infusion of manpower and capability by the Ministry of Defence. The people of Britain can be immensely proud of the way that the UK has stepped up to the plate and, using a combination of military and civilian resources, delivered real effect on the ground in Sierra Leone.

[Mr Douglas Alexander (Paisley and Renfrewshire South) (Lab)]

The Foreign Secretary has just paid generous tribute to the Department for International Development, and I echo those sentiments. However, he is reported to have recently called the Government’s own commitment to enshrine in law a pledge to spend 0.7% of UK GDP on international aid as “bizarre” when he was thousands of miles away from Westminster—[Interruption.] Some Members seem to agree with that sentiment. Ahead of Friday’s discussions of this issue in the House, is he prepared to repeat that judgment at the Dispatch Box today or has he had his mind changed?

[Mr Hammond]

Unlike the Government in whom the right hon. Gentleman served, we have delivered the 0.7% target. We made a political commitment to do it and we have delivered on that political commitment. Talk about the need to legislate is yesterday’s discussion. We are doing it—something he never did.

[Alistair Burt (North East Bedfordshire) (Con)]

T2. Stability in north Africa—in Morocco, Algeria and Tunisia, where there has been remarkable progress by the Tunisian people—has been helped immeasurably by the United Kingdom’s Arab Partnership programme. Will my hon. Friend confirm that that programme will continue and that, just because there is some success in those areas, we will not take our eye off the ball or off the need to do more in north Africa?

[The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Tobias Ellwood)]

My right hon. Friend can take part of the credit for some of the success stories that we have seen in Tunisia, Algeria and Morocco. He is right that we should not forget these countries. Bilateral trade continues to flourish and the Arab Partnership scheme is very important. I visited Algeria last week and we look forward to the Prime Minister’s visit when he comes here next week.

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

T4. In Uganda there appears to be renewed attempts to target and persecute the lesbian, gay, bisexual and transgender community. If the Ugandan Government proceed with new legislation in this area, what will be the impact on bilateral relations with the UK?

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

The FCO’s work to combat violence and discrimination on the basis of lesbian, gay, bisexual and transgender rights is an important part of our international work in Uganda and elsewhere. I have made representations to the Ugandan Government and will continue to do so, and I will continue to work with NGOs and parliamentarians interested in this issue. It is a high priority for the British Government and for me.

[Alok Sharma (Reading West) (Con)]

T3. The Foreign Secretary has made it clear that any renegotiation with the EU will have trade at its heart, which my constituents welcome ahead of the referendum, but does the Minister envisage concurrent discussions on bilateral free trade agreements with high-growth economies such as India, which will be needed in case the British people choose to leave the EU, or will any such discussions come after the referendum vote?

[The Minister for Europe (Mr David Lidington)]

As my hon. Friend knows, the treaty provisions are that the EU has exclusive competence over international trade negotiations, which means that we benefit from the collective leverage of a market of about 500 million people in prising open access to third markets. As regards India, the Prime Minister raised with the Indian Prime Minister at Brisbane the need to reopen the EU-India talks on free trade which had been paused because of the Indian election. We hope very much that Mr Modi’s Government will want to take that forward now.

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

T5. Is the Minister really saying that Britain has fulfilled its commitment by taking 90 of the most vulnerable Syrian refugees, when 130,000 need to be resettled around the world?

[Mr Philip Hammond]

The UK Government have taken the view that because we expect Syria to be rebuilt with a new and democratic future, we want to support these people as close to their home as possible. Britain is proud to be the second largest international donor of humanitarian aid to Syria, supporting those communities so that they will eventually be able to return and rebuild their country.

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

T7. The Foreign Secretary knows that my constituent, Ollie Gobat, was brutally murdered in St Lucia in an apparent assassination. I am grateful that officials are discussing assurances on the death penalty to allow UK police to support the investigation, at St Lucia’s request, but we are seven months on from Ollie’s murder. The death penalty has not been applied in 19 years. Will the Minister pick up the phone to the St Lucian Prime Minister and help to resolve the outstanding issues so that we can get justice for Ollie and his family?

[James Duddridge]

This is indeed a tragic and brutal murder, and my heart goes out to the Gobat family. I wrote to the St Lucian Prime Minister on 14 October to seek assurances that any person convicted of this crime will not receive the death penalty, and following my hon. Friend’s excellent work, yesterday I wrote to the St Lucian high commissioner to press him on this issue. I will take up the suggestion to phone the St Lucian Prime Minister if an answer is not forthcoming, and I will speak to my hon. Friend as soon as I have done so.

[John Woodcock (Barrow and Furness) (Lab/Co-op)]

T6. The Secretary of State is a former Transport Secretary, so will he admit to motorists in my constituency and other rural areas that the Government’s bid for a rural fuel discount has completely failed because he has no friends in Europe?

[Mr Philip Hammond]

The UK has many friends in Europe, and one of the most striking things of the past four and a half months has been that everywhere I have gone in Europe, it has been emphasised to me—again in Italy last week—how central Britain’s role is to the European Union. Indeed, my Italian counterpart said clearly that he cannot imagine a European Union without Britain at its heart.

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

T9. I previously raised the case of Asia Bibi with the Prime Minister, and authored a letter signed by 57 Members of Parliament from across the House calling for justice in this case. I understand that the Prime Minister raised the case with Prime Minister Sharif, but what was his response? Is Prime Minister Sharif prepared to reform these laws, because I have spoken to the senior leadership of the main opposition in Pakistan, the PPP, and it is prepared to work with him to do that?

[Mr Ellwood]

Asia Bibi is a Christian woman who was sentenced to death for blasphemy in 2010. That sentence has obviously provoked international condemnation, and was the first death sentence handed to a woman under Pakistan’s new blasphemy laws. We are deeply concerned that the Pakistan court has upheld the imposition of the death penalty, and we hope the verdict will be overturned on appeal. The Prime Minister will be in the Chamber tomorrow, and I understand that he and the Foreign Secretary will try to raise this matter again.

[Kevin Barron (Rother Valley) (Lab)]

T8. Aston academy secondary school in my constituency and Makunduchi school on the island of Zanzibar in Tanzania have had a link for more than 20 years, with regular visits of staff and pupils from both schools to one another, lifting the horizons of young people in both countries. How does the Minister’s Department support such twinning arrangements?

[James Duddridge]

I thank the right hon. Gentleman for that question, not least because I remember visiting Aston school in 2001 when I was a parliamentary candidate in Rother Valley. More recently, as Minister for Africa I have visited a number of schools, and twinning arrangements such as that in Zanzibar are a fantastic way to support schools and build understanding of what the British Government are doing by supporting the DFID budget and the foreign affairs team. I recommend that more colleagues encourage such schemes in their constituencies, just like the hon. Member for Wrexham (Ian Lucas), who supports an excellent scheme in Lesotho.

[Sir Hugh Robertson (Faversham and Mid Kent) (Con)]

In his answer to question 11, the Minister mentioned the welcome assistance given by this country to the Lebanese border regiment. Will he look again at that, particularly in Lebanon and Jordan, to see what further assistance we could give armed forces in those countries to prevent contagion from Syria and Iraq?

[Mr Ellwood]

I pay tribute to the work done by my right hon. Friend when he covered this portfolio. He will be aware from his visit to the region of the start of a programme to build watchtowers, and the MOD is very much involved in that to prevent ISIL from running across the border and taking hostages. More funds are being provided for that successful programme, and I will be visiting Lebanon soon.

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

For nearly half a century, on and off, I have heard Ministers say that they are committed on behalf of the British Government to justice for Palestinians, yet the situation has deteriorated for Palestinians over that time—it is has certainly not improved in any way. Would recognising a Palestinian state not show a genuine commitment on behalf of the United Kingdom that we want justice for Palestinians, as well as ensuring that the state of Israel is secure?

[Mr Philip Hammond]

The hon. Gentleman’s timeline merely serves to underscore how complex, difficult and intractable the problem is. Our commitment to a two-state solution is loudly expressed at every opportunity—no one can be in any doubt about it—but, as the Under-Secretary of State for Foreign and Commonwealth Affairs, my hon. Friend the Member for Bournemouth East (Mr Ellwood) has made clear, recognition is a tool to be used in trying to bring about the peace settlement all hon. Members ardently desire.

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

May I just say what a great school Aston academy is? Of course, it was Aston comprehensive when I went there, but I will not ask about that.

Does the Foreign Secretary agree that millions of people around the country will have taken the Prime Minister’s speech last week on immigration as setting out that the revision of the rules on benefit claimants would be a red line in the renegotiation?

[Mr Hammond]

I am happy to agree with my hon. Friend both on Aston academy and on the Prime Minister’s speech last Friday. The right hon. Member for Paisley and Renfrewshire South (Mr Alexander) called for clarity on our agenda with the European Union. He got clarity from the Prime Minister on Friday, but I have not heard him acknowledge that.

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

In this Question Time, Members have mentioned official Palestinian media and TV, and the Palestinian Authority. Effectively, they are talking about the apparatus of a Palestinian state. Surely calls for peace should be heard with equal respect for both Israel and Palestine. Is it not time the UK Government followed this House of Commons and gave recognition to the Palestinian state, which would be the first stage of the two-state solution?

[Mr Hammond]

This is a bit like groundhog day. The Government will recognise a Palestinian state at a time of our choosing. We will choose that time on the basis that it is designed to deliver the maximum possible impetus to the peace process.

[Sir Gerald Howarth (Aldershot) (Con)]

Will Her Majesty’s Government be supporting the resumption of World Bank loans to Argentina? If so, would it not be bizarre for the UK to underwrite loans to Argentina, which is awash with its own cash, and which is in the process of acquiring 24 advanced combat aircraft for its defence portfolio, which could present a risk to the Falkland Islands?

[The Minister of State, Foreign and Commonwealth Office (Mr Hugo Swire)]

I am not sure that my hon. Friend has uttered a single word with which I would disagree.

[Mr Jeffrey M. Donaldson (Lagan Valley) (DUP)]

Further to the earlier answer on Colombia, the Minister will be aware that paramilitaries continue to target members of the peace movement. In the past three years, 60 members of the Patriotic March have been assassinated. Will he take steps to put pressure on the Colombian Government to protect peace activists in Colombia?

[Mr Swire]

Yes, we will do that, and already do so. When I was in Bogota, I met a lot of peace defenders and human rights activists, and a lot of Government officials. We continue to be extremely concerned about the situation, but I repeat what I have said: we are very keen to help to move forward the FARC peace negotiations, which will bring peace to the whole country. However, serious institutional issues in the country will then need to be addressed. The UK Government will provide every assistance we can in that respect.

[Henry Smith (Crawley) (Con)]

Marlborough house is one of the great meeting places of the Commonwealth and yet, reportedly, the Labour party says that it wants to sell it. What is the Government’s view?

[Mr Swire]

I read that report with some incredulity. The Government are trying to put the “C” back into FCO, but it seems that the Labour Opposition are trying to put Marlborough house back on the market. That is the difference between us. We can accuse the Labour Government of many things, but we can never accuse them of being helpful to, supportive of or keen on the Commonwealth.

[Ann Clwyd (Cynon Valley) (Lab)]

With reference to the forthcoming ministerial visit to Malaysia, will the Minister consider its sedition laws? They are constantly being used to gag the opposition, including important opposition leaders such as Anwar Ibrahim. We left those laws behind. Why do we not get rid of them?

[Mr Swire]

I will be brief because I have already addressed this issue. My right hon. Friend the Foreign Secretary is meeting the Malaysian Foreign Minister next week, I believe. He will raise that issue, as we always do. We are studying the implications of the Malaysian Prime Minister’s comments and will respond in due course.

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

Will the UK Government be represented at the forthcoming Vienna conference on the humanitarian impact of nuclear weapons?

[Mr Philip Hammond]

We have decided to accept Austria’s invitation to attend the Vienna conference on the humanitarian impact of nuclear weapons on 8 and 9 December. We will be represented by Mrs Susan le Jeune, the UK ambassador to Austria and permanent representative to the International Atomic Energy Agency.

[Mr Andy Slaughter (Hammersmith) (Lab)]

May I raise again the case of my constituent Ghoncheh Ghavami, who is still facing prison in Iran and is forbidden from leaving that country? I am grateful to the Under-Secretary of State for Foreign and Commonwealth Affairs, the hon. Member for Bournemouth East (Mr Ellwood) for meeting Ghoncheh’s family with me, but I found the Foreign Secretary’s view, that there is little he can do because Iran does not recognise dual citizenship, somewhat unhelpful. Ghoncheh is a British citizen and is entitled to the support of the Foreign Office. May I ask the Foreign Secretary again what he is doing to ensure that she can come back to her home in Shepherds Bush?

[Mr Hammond]

I was not intending to be unhelpful; I was simply pointing out one of the realities we have to deal with. She is a British citizen and we make representations on her behalf. One of the by-products of the nuclear talks with Iran is that we have far more contact with Iranian counterparts than we might otherwise have done. I take every opportunity to raise this with Minister Zarif, my opposite number, and will do so again when I see him at the Afghanistan conference in London this week. Iran’s position is that it does not recognise her British citizenship and will therefore not engage with us on this issue.

[Several hon. Members]

rose—

[Mr Speaker]

Order. I am sorry, but we must now move on.

Points of Order

Tuesday 2nd December 2014 Commons Chamber

12:35

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

On a point of order, Mr Speaker. Since written answers began to be answered online, Hansard no longer publishes written questions and answers. I find this a deprivation because it has long been my practice to study the written questions and answers published in Hansard. I find it a deprivation for our constituents who no longer have the opportunity of seeing the written questions and answers. It means that Hansard is no longer a complete record of the proceedings of this House. I am therefore asking you, Mr Speaker, to give instructions that in future written questions and answers should be published in Hansard.

[Mr Speaker]

I am extremely grateful to the right hon. Gentleman for his point of order. My response is as follows. First, my distinct recollection is that the House has already decided on this matter. There is a reassuring nod of the head from the hon. Member for Liverpool, West Derby (Stephen Twigg) sitting on the Opposition Front Bench, which suggests that my recollection is correct. I am not sure, therefore, that that can easily be revisited, and certainly not impromptu by me from the Chair.

However, my second point to the right hon. Gentleman is that if he wishes to obtain a hard copy of the questions and answers, in accordance with his usual practice, he can obtain that from the Vote Office. That facility, although of course it could be extended to the right hon. Gentleman alone on grounds of his seniority and distinction, is in fact also an opportunity afforded to other right hon. and hon. Members.

I accept that these are matters of interpretation and opinion, but my last point would be that as far as the public are concerned I think the material is readily accessible and, arguably, as a result of this approach more accessible. Now, to judge by the rather sceptical expression on the right hon. Gentleman’s face, I fear I may have some way to go before persuading him of the merit of our approach. But what I am seeking to do—[Interruption.] Somebody chunters, slightly irreverently, from a sedentary position, “analogue”. In many respects, the right hon. Gentleman is modernity itself, not least in his original approach to sartorial elegance, but on these matters he does tend to be rather trad. I am trying, in a utilitarian spirit, on a Benthamite basis, to give the greatest satisfaction to the greatest number and I hope that we can do that. However, if the right hon. Gentleman is dissatisfied, I have a feeling that he will be beating a path to my door.

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

On a point of order, Mr Speaker. I wonder whether you can give me some guidance. A young girl from my constituency has been tragically murdered in Cologne. There is no police investigation, although there is every evidence that her drink was spiked—she was poisoned. There has been no police investigation and no help for the family. There is not another Foreign Office Question Time for another month. Can you advise me on how I can raise this issue in the House?

[Mr Speaker]

The answer is twofold. First, the hon. Gentleman can write to a Foreign Office Minister, and he can be as confident of as speedy a reply these days, not least on the grounds of his seniority and persistence, as can his right hon. Friend the Member for Manchester, Gorton (Sir Gerald Kaufman). Secondly, as the hon. Gentleman knows, he has effectively raised his point, through the ruse of the use and—some would say—the rather gentle abuse of the point of order procedure. Foreign Office Ministers will have heard his utterance, and let it never be said that he and the right hon. Member for Manchester, Gorton are not heard in this House; I think we will all agree they are heard with appropriate regularity.

Overseas Voters (15 Year Rule)

Tuesday 2nd December 2014 Commons Chamber

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

12:40

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

I beg to move,

That leave be given to bring in a Bill to allow British citizens resident overseas for more than 15 years to vote in UK Parliamentary elections and referendums; and for connected purposes.

It is estimated that there are 5.5 million UK citizens living abroad, of whom possibly 1 million are under 18 and a further 1 million are debarred by the 15-year rule and who maintain strong cultural, emotional, financial and historical links with this country. However, under current laws, British citizens who live abroad can only vote in UK parliamentary elections for a maximum of 15 years from the date they last lived in the UK. I believe this to be incredibly unfair and unjustified, given that many people who have lived abroad for more than 15 years decided to move to a different country only after having paid into this country’s system for the whole of their working lives, and still have strong connections to the UK. Why should they, after all that, be disfranchised by their country of origin?

The 15-year limit we impose on voters is one of the strictest in the world. Indeed, from my research, the only countries with stricter rules on overseas voting are Ireland, Greece and Malta, where citizens who have left their country are not allowed to vote at all. However, countries as diverse as the US, France, Japan, South Africa, Belgium, the Czech Republic and Italy all have no limit on the ability of their citizens to vote from abroad. We must surely question why, as a country with a proud history of democracy and a wide franchise, we set some of the strictest rules in the world against our own citizens.

Much of the opposition to abolishing the 15-year rule is centred around the fact that relatively few of the 3.5 million citizens living overseas and currently eligible to register to vote actually do so. Only about 32,000 overseas citizens are registered, which is disappointingly few. I have been pressing the Electoral Commission for some time dramatically to step up its efforts to increase the number of eligible overseas voters, and I am pleased it has now accepted a target of 100,000 voters to be registered by May 2015—before the general election.

There are some possible reasons why overseas citizens do not register to vote. It might be that many are simply not aware of it, so we should do more, through passports, pensions and Government Departments, to make them aware of their rights. Until recently, it has been a long, drawn-out process, involving paper forms having to be sent across the world simply to register, but under changes made by this Government, I am pleased to say we have now made progress, and people living abroad can now register to vote online in just a few minutes at www.gov.uk/register-to-vote. A further deterrent was the time it took to return postal votes from around the world, but again the Government have recently introduced changes to the individual voter registration system increasing the period for returning postal votes from 17 to 25 days, which will be of considerable advantage to people living around the world.

Despite the low registration figures, however, we should not simply discount such a large number of British citizens and take away their right to vote. If that many people living in this country were disfranchised, there would be an outcry. I strongly believe that one reason registration numbers are so low is the deterrent effect of the 15-year rule. I have had people contacting me from all around the world, saying “What is the point in registering to vote now, when I will lose my vote after 15 years?” It is not that they do not want to vote, but that they do not want to have to register and then lose that right.

Contrary to the assertion by some that people living abroad do not care about participating in UK elections, people actually feel very passionately about it. I have had people contacting me from across the world, thanking me for raising this issue today. They want to vote; they want to engage and take part, but they are prevented from doing so by this 15-year rule. I strongly believe that the rule acts as a real disincentive for people to register and vote.

Throughout history, it has been the Conservative party that has championed the rights of overseas voters. Only under a Conservative Government have the rights of overseas voters been extended. Labour and Liberal Democrats have consistently tried to limit the voting rights of our citizens around the world. Indeed, in 1998, when there was a Home Affairs Select Committee inquiry into the issue, Labour and Liberal Democrat members urged that the length of time should be reduced—despite the Home Office saying that the vast amount of correspondence received on the subject was in favour of an extension of the limits.

The extent to which the Opposition parties have denied the right of overseas voters was clearly demonstrated here earlier in the year when I and a number of my hon. Friends tabled amendments to the Electoral Registration and Administration Act 2013 to abolish the 15-year rule. However, these efforts were thwarted by a combination of Labour and Liberal Democrat Members, and the same thing happened in the other place when the noble Lord Lexden tabled the same amendments.

It is absolutely right that citizens living abroad should be able to participate in our democratic process. After all, more often than not, they are the people who have worked hard through their working lives and contributed to the system through taxes and national insurance, and they usually keep their UK bank accounts. They should therefore have the right to maintain a say in how that money is spent. Indeed, decisions of the UK Government continue to have effects on overseas citizens once they have left our shores.

Many hon. and right hon. Members will have received correspondence regarding overseas pensions. This is a classic example of an issue that continues to affect citizens after they have moved away from this country. They should be able to raise these issues with their votes, just as citizens living within the country are able to do. I would urge all those who feel strongly about this or any other issue to register for an overseas vote. If they do so in significant numbers, their voice will be heard.

It is clear from my conversations through our Conservatives Abroad network around the world that many people living abroad often pay closer attention to British politics and current affairs than many who live here. They are absolutely passionate about this country; they diligently read the British press and listen to our media; they often have families and friends in the UK whom they visit. As true democrats in this mother of Parliaments, we should encourage and facilitate all the millions of overseas voters to register, and we should abolish this 15-year rule. This would send a strong signal to those people that we are enormously grateful that they are the unofficial ambassadors, trade envoys and representatives for our country around the world. This is why I am pleased that the abolition of the 15-year rule is now official Conservative party policy, and will feature in our manifesto ahead of the general election in 2015. It has always been our party that has recognised the rights of overseas voters and understood their desire to remain linked to this country.

Today’s Bill is an important part of a long-running campaign by some very determined people for the unfettered right of all British citizens living abroad to have the vote—the universal franchise. Up until now, only the Conservative party has campaigned on this issue. Today, however, I issue a challenge to all other parties to join me in this campaign, to make this a cross-party issue and to ensure that it duly happens.

Question put and agreed to.

Ordered,

That Geoffrey Clifton-Brown, Miss Chloe Smith, Sir Roger Gale, Glyn Davies, Henry Smith, Mr Nigel Evans, Sir Peter Bottomley, Sarah Newton, Alistair Burt, Mr Dominic Grieve and Dr Liam Fox present the Bill.

Geoffrey Clifton-Brown accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 6 March 2015, and to be printed (Bill 129).

Foreign Affairs Committee (Hong Kong Visit)

Tuesday 2nd December 2014 Commons Chamber

Emergency debate (Standing Order No. 24)

[Mr Speaker]

Before I call the Chair of the Foreign Affairs Committee to move his motion, it may be for the convenience of the House to know that I intend to call the Front-Bench speakers to wind up the debate. The thrust of the debate is in the ownership of the House, and I think that we shall want to hear from Back-Bench Members, led by the Chair of the Foreign Affairs Committee, Sir Richard Ottaway.

12:49

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

I beg to move,

That this House has considered the ban by China on the Foreign Affairs Committee visit to Hong Kong.

As one who travels more than most, I have become only too aware of the high regard that the world has for the United Kingdom—for what this iconic building stands for, what the Chamber stands for, and what those who sit in it stand for. It is, in a phrase, freedom and democracy: a respect for human rights around the world, and an abhorrence of tyranny. The decision by the Government of China to ban the Foreign Affairs Committee’s visit to Hong Kong is a mistake. It is an attack on the men and women of the free world.

It is nearly five years since the House did me the great honour of electing me Chairman of the Foreign Affairs Committee. During that time, I have been ably supported by my colleagues. We have visited some of the most troubled parts of the world—places where democracy is all but non-existent, or an illusion—but in none has anyone ever sought to deny us access, or accused us of

“meddling in the internal affairs of another country”,

as the Chinese ambassador did during a meeting with me on 15 August. That is an accusation unsupported by any evidence.

Between the end of the first opium war with China in 1842 and withdrawal in 1997, the Union flag flew over the island of Hong Kong. In 1898, the Chinese authorities granted a 99-year lease of the new territories on the mainland. The looming expiration of that lease began to exercise diplomats in the 1970s and 1980s. The Chinese made it clear that they wanted the return of the new territories, without which Hong Kong was not a viable entity. A course of action and a handover were carefully planned, and the Sino-British joint declaration was agreed. The declaration was signed in the Great Hall of the People in Beijing on 19 December 1984 by Margaret Thatcher and the Chinese premier, Zhao Ziyang. It was deposited with the United Nations a few months later.

I am afraid to say that I am old enough to have been a member of the House of Commons at the time of the signing. The reaction then was that this was not a bad deal at all. It was as good as we were going to get, and it was either this or no deal at all. At its heart was a commitment to a “one country, two system” style of government, and a pledge that the socialist system of China would not be practised in Hong Kong, that Hong Kong would retain its status as an international finance centre, and that its previous capitalist system, its rights, its freedoms and its way of life would remain unchanged for 50 years. The joint declaration provides that those undertakings shall be set out in the Hong Kong Basic Law, and—critically—stipulates that the Chief Executive may be elected. Article 45 of the Basic Law states:

“The ultimate aim is the selection of the Chief Executive by universal suffrage upon nomination by a broadly representative nominating committee in accordance with democratic procedures.”

The flashpoint for the current protests in Hong Kong was the publication in August of a decision by the standing committee of the National People’s Congress in Beijing on procedures for the election of the Chief Executive in 2017. Aware of the forthcoming decision, two key pro-democracy campaigners, Anson Chan and Martin Lee, told our Committee in July that their main concern was that the “broadly representative nominating committee”, which approves candidates for the post of Chief Executive, would be “dominated” by Beijing loyalists. Martin Lee said that anyone who was not trusted by Beijing would be

“screened out ...even though they were trusted by the Hong Kong people”.

That is the problem that has given rise to unrest, and to the peaceful protests that have received global attention.

Let me clarify for the record, and for those who are not familiar with the workings of the British constitution and the House, that a Select Committee is not part of the United Kingdom Government. On the contrary, the job of the Foreign Affairs Committee is to exercise oversight of the Foreign Office and its policies, and we operate totally independently.

Since the handover in 1997, the Foreign Office has published a report to Parliament on Hong Kong every six months. In its report of 12 July this year, it said of the growing constitutional arguments:

“the important thing is that the people of Hong Kong have a genuine choice and feel that they have a real stake in the outcome.”

It continued:

“But it is clear that there is still some way to go for consensus to be reached.”

Given the hundreds of thousands of protesters who were on the streets, that was a wonderful British understatement by the then Foreign Secretary, who I am pleased to see is in the Chamber today.

In response to growing concern here and abroad, the Foreign Affairs Committee decided to conduct an inquiry into the strength, accuracy and veracity of the Foreign Office reports. Our terms of reference are simple: to investigate not just the six-monthly reports and the political and constitutional issues that are raised, but the bilateral relationship in terms of trade, business and culture, and the work of the British Council. The most important point is that we embarked upon our report with an open mind. We have no preconceived conclusions, and we invited all interested parties to give evidence, including the Hong Kong and Chinese Governments.

However, shortly after we announced our inquiry, the Chinese ambassador to London wrote to me on 14 July stating that

“The affairs of Hong Kong SAR”—

Special Administrative Region—

“are purely China's internal affairs”,

and that he was

“firmly opposed to any interference in Hong Kong…by any foreign country and by any means.”

He concluded with the advice that the Committee should not make its planned visit to Hong Kong in December. We rejected that advice, because we believed that it would be an abrogation of our responsibilities to the House if we accepted it.

In a letter to me dated 22 November, Mr Song Zhe, China's commissioner to Hong Kong—that is, its representative in Hong Kong—went further, saying that our visit would be viewed as

“support to ‘Occupy Central’ and other illegal activities”.

Occupy Central is the name of the protesters’ campaign on the streets of Hong Kong. In response to the letter, the Committee simply stated it was still our intention to visit. As a result, the deputy ambassador to the Chinese Embassy came to see me in the House on Friday afternoon, and informed me that the Committee would not be allowed entry into Hong Kong for the purposes of our inquiry. The meeting took place in a Committee Room on the Upper Committee Corridor. Fortunately, for the purpose of greater accuracy, I invited the editor of Hansard to attend to ensure that there would be a verbatim record of the conversation. I am grateful to her for her efforts.

At the heart of the Chinese argument, conveyed to me at the meeting, is that the joint declaration signed by China and the United Kingdom is now void and only covered the period from the signing in 1984 until the handover in 1997. Given that the Chinese Government gave an undertaking that the policies enshrined in the agreement would remain unchanged for 50 years, this is a manifestly irresponsible and incorrect position to take. It is a live agreement, which is why the Foreign Office rightly continues to produce its six-monthly reports on Hong Kong. Britain is a party to over 18,000 international treaties and agreements. To suggest that we have no right to assess the performance of our counter-parties to such agreements is ridiculous.

The second point made is the old Aunt Sally—which was made not once, but twice—that we are not a colonial power any more and must not behave like one. I only mention this to enable the House to assess the mindset inside the Chinese Government.

I believe that the decision to ban the Committee is wrong and will have a profound impact. First, decisions on entry to Hong Kong are devolved under the Basic Law and are clearly a matter for the Hong Kong Administration, not the Chinese Government. This sends a clear signal that the pledge that Hong Kong would

“enjoy a high degree of autonomy”,

as set out in paragraph 3(2) of the joint agreement, is now under threat. That the ban on the Committee clearly came from the Chinese Government brings into question whether the key principle of “one country, two systems” still has any meaning.

Secondly, we are China’s partners, not a distant third party. This decision will do nothing but damage Anglo-Chinese relations, something I regret. China is a fellow member of the G20. We have a free flow of parliamentarians, officials, businessmen and those involved in cultural exchanges. I say to China, “If you want to be a member of the G20, you have to behave like a member of the G20.” We have Chinese delegations here all the time. It should not be a one-way street. The Minister of State, my right hon. Friend the Member for East Devon (Mr Swire), is, in fact, due to visit Hong Kong in a few weeks’ time; are they going to ban him, too?

[Keith Vaz (Leicester East) (Lab)]

I fully support what the right hon. Gentleman has said today. He has put his case in a very measured and eloquent way and I am sure the whole House supports the position taken by the Foreign Affairs Committee, which of course has implications for other Select Committees, should they wish to visit other countries.

Of course, Select Committees are separate from the Government, but were any representations made by the Government to the Chinese Government about the refusal to grant a visa and allow the FAC to go to China?

[Sir Richard Ottaway]

As a fellow Select Committee Chairman, I am very grateful for the right hon. Gentleman’s support and he will fully understand the position the Committee finds itself in. If he does not mind, I will leave it to the Minister to answer his question, perhaps when he winds up, but I would say that the Foreign Office has been nothing but supportive of the Committee throughout this unhappy episode.

Thirdly, and most importantly, this decision points to China’s direction of travel. If there is a commitment to democracy in Hong Kong, one first has to understand democracy. Democracy embraces criticism, and constructive criticism is the most valuable thing democracy can provide. If China blatantly blocks well-wishers like this Parliament, that raises big, unanswered questions which will alarm the people of Hong Kong and the region. This decision will not go unnoticed in Taiwan.

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

May I say that it is a pleasure to serve on the FAC under my right hon. Friend’s chairmanship? Does he agree that the Chinese Government have already concluded that they know what our report will say, which is unwise, and they have forfeited the opportunity to put their case to the Committee?

[Sir Richard Ottaway]

My hon. Friend is absolutely right and I value his support on the Committee. We have approached this inquiry with an open mind, and I think the Chinese Government and the Hong Kong authorities are missing a real opportunity by declining to give evidence to us. Indeed they do not even recognise the Committee as they continue to call this a “so-called inquiry.”

Finally, Hong Kong is the largest stock market in China and its main financial services hub, supporting a fifth of the world’s population. It currently has free flows of money, goods and services. What sort of message does this send to future investors? This arbitrary action can only harm China’s reputation and financial interests in an increasingly global world. In Asia, a stable Singapore looks a much better place to do business at the moment.

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

I have been listening with great interest to the right hon. Gentleman’s speech, which I think is absolutely spot-on. Does he agree that the Chinese are looking at this in the following way: “Well, there was all that fuss about Tibet and we just got on with it, and there was all that fuss about our appalling human rights record but we have just got on with it. So over time, this too, will all go away and we’ll continue to trade and be able to sell our goods around the world and nobody will take a blind bit of notice”?

[Sir Richard Ottaway]

The hon. Gentleman makes a very good point. After the spat over the Dalai Lama, Anglo-Chinese relations were on the right trajectory, and I think this is a very serious hiccup now, which will give a lot of people reason to pause and reflect.

We will continue with our inquiry, but this decision cannot go unchallenged. As Members of this House are well aware, as we enter this Chamber we pass under the archway which has been deliberately left with the damage inflicted by a bomb in the second world war. It is a reminder of the damage that can ultimately be caused by the enemies of freedom. The anchor in our world today is freedom. It gives us our sense of direction. It is how we decide between right and wrong. I invite the Government to condemn this action in the strongest possible terms.

13:07

[Ann Clwyd (Cynon Valley) (Lab)]

I hope that China will, even at this late stage, change its mind. I say that because 26 years ago, as a Member of this House, I went with a delegation to Hong Kong. We stayed there for a week, and then at the end of the week we booked through a tourist organisation a visit to mainland China. We got as far as Macau and got on a tourist bus ready to cross the border into China, but at the border three of us—three British MPs—were asked to get off the bus. We questioned at the time why we were asked to get off the bus when we had tickets for a three-day visit to China. The tour operator said he could not answer the question, but we were welcome to stay at their expense in Macau for the weekend. That, of course, was not the idea. It was not until we got back to London and I visited the Chinese ambassador that I was told what the reason was: it was that one of our MP members had “journalist” written in his passport. Because it was 26 years ago and around the time of Tiananmen square, the ambassador said they were afraid that if they let us into China we would create some bother. However, he then apologised and said it had all been a bad mistake, and offered us a visit to China at the expense of the Chinese Government, which we took him up on, and there followed a very interesting visit to China. I hope that, if the Chinese Government are listening to these speeches, there is still time for them to admit they have made a mistake and that we should be allowed in.

I support the views of the Chairman of the Foreign Affairs Committee, the right hon. Member for Croydon South (Sir Richard Ottaway), who has eloquently presented the case.

While I have the opportunity, I want to talk about freedom of the press. The Chairman talked about the importance of freedom of speech and of the press. Under article 27 of the Basic Law, residents of Hong Kong

“shall have freedom of speech, of the press and publication; freedom of association, of assembly, of procession and demonstration”,

and the right to join trade unions and to strike.

In recent years, however, there has been an increasing number of complaints from Hong Kong that the freedom of the press, in particular, is being undermined in a number of different ways. For instance, this year, Hong Kong fell to a record low of 61st in the annual global ranking for press freedom complied by Reporters Without Borders. The 2014 annual report of the Hong Kong Journalists Association, entitled “Press Freedom Under Siege”, calls 2014

“the darkest year for press freedom for several decades, with the media coming under relentless assault from several directions.”

The report also argued that the suppression of press freedom was happening

“despite the existence of protection by law.”

Violence against journalists has also increased in Hong Kong as part of the growing intimidation of journalists. The most recent such incident was a knife attack carried out on 26 February against Kevin Lau, the former editor-in-chief of the popular daily, Ming Pao, which was often critical of Beijing. Mr Lau had been abruptly fired a month beforehand by the paper’s owner, a tycoon with major investments in China, and replaced by a new editor who was widely seen as more pro-Chinese. The attack drew widespread condemnation, including from the Hong Kong Government.

Attacks have also been carried out this year against senior figures in the Hong Kong Morning News Media Group and, in 2013, against the owner of the free newspaper am730, the publisher of iSun Affairs and the Next Media chairman Jimmy Lai. All the victims were connected with media outlets known for expressing critical views of Beijing.

Aside from the attacks, many of which have not been solved, other complaints about press freedom centre on issues such as self-censorship and personnel changes. Such complaints do not generally allege that the legal right to press freedom in Hong Kong is being challenged, but rather that journalists or media outlets that are known to criticise Beijing are increasingly facing problems such as the withdrawal of advertisers, the abrupt and unexplained sacking of outspoken management or editorial staff, and the denial of applications to renew broadcasting licences.

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

I am listening with great attention to my right hon. Friend’s speech, and we all deplore the events that she has described. Would it not, however, be naive to believe that a China controlled by the Communist party and determined to maintain its dictatorship is going to allow freedom of expression and the democratic rights in Hong Kong that we all wish to see?

[Ann Clwyd]

The point that I was making earlier was that those rights are enshrined in law, and that the Chinese Government are therefore breaking the law if those rights are being violated.

These issues are creating a climate in which, although press freedom is respected according to the letter of the law, journalists are either being pressurised by advertisers and media owners to avoid criticising Beijing or being denied a platform from which to make such criticisms. The rise of the Chinese-owned media in Hong Kong, in tandem with China’s more general economic growth, also plays a role in debates over press freedom. Reporters Without Borders drew attention in its annual report to this fact, stating:

“China’s growing economic weight is allowing it to extend its influence over the media in Hong Kong, Macao and Taiwan, which had largely been spared political censorship until recently. Media independence is now in jeopardy in these three territories, which are either ‘special administrative regions’ or claimed by Beijing.”

I would describe the situation for press and broadcasting freedom in Hong Kong as dire.

The Foreign and Commonwealth Office’s six-monthly report on Hong Kong covering July to December 2013 included a section on press freedom and freedom of expression. It noted that there were “some concerns” that these freedoms were “under threat”. I think that is rather too mild. The report concluded that those rights were “generally well respected”, but detailed a number of controversies particularly relating to press freedom. It its six-monthly report covering January to June 2014, the FCO listed several similar incidents of controversy or demonstrations relating to concerns in Hong Kong about perceived infringements of press freedom. It noted that people in Hong Kong appeared to be increasingly worried about self-censorship. It also noted, however, that in April, the Chief Executive had spoken in support of press freedom because it was

“a cornerstone of a free society”.

The Foreign and Commonwealth Office did not take a particular stand on the specific concerns it mentioned, stating:

“We believe that freedom of expression, including of the press, has played an important role in Hong Kong’s success. It is one of the fundamental freedoms protected by the Joint Declaration. As such, we take seriously concerns about press freedom, including fears about self-censorship. We welcome the Chief Executive’s clear statements on press freedom and we will continue to monitor the situation closely.”

As the Chairman of the Select Committee has said, our investigation is going to continue. I hope that the Chinese Government are listening to the points that are being made in this debate and that they will think again, as they did 26 years ago when they recognised that they had made a mistake by excluding three of us from China at that time.

13:17

[Sir Malcolm Rifkind (Kensington) (Con)]

I pay tribute to my right hon. Friend the Member for Croydon South (Sir Richard Ottaway), the Chairman of the Foreign Affairs Committee. Central to the concern that the House is expressing is the question of whether the United Kingdom can reasonably be accused of interfering in the internal affairs of China. I was privileged to serve as Foreign Secretary for the final two years of British sovereignty over Hong Kong and I was personally involved in the final stages of the negotiations. If the Committee had been trying to comment on matters that were irrelevant to either the joint declaration or the Basic Law, there could be a legitimate complaint that those were the internal affairs of China. However, the question of the franchise in Hong Kong goes to the very heart of the joint declaration and the Basic Law.

The Chairman of the Committee was entirely correct to say that it is patently absurd to suggest that the right—in fact, the obligation—of the United Kingdom Government to take an interest in the fulfilment of the commitments expired when sovereignty transferred to Hong Kong. Only 17 years have passed in the 50-year commitment by the Chinese Government to fulfil those obligations. That commitment was part of an international agreement reached with Her Majesty’s Government, and it is an obligation, not just an entitlement, for the British Government and the Committees of this House to monitor these matters and to express their views on them.

I genuinely believe that the Chinese Government have done themselves a disservice by taking this step. They have demonstrated not their strength but their weakness. The idea that vetoing the issue of visas would resolve the issue was simply wrong. I understand that the Committee is, quite rightly, going to continue its work, and all that has happened is that this action has created some very adverse publicity for the Chinese Government, which could easily have been avoided. They should have welcomed the Foreign Affairs Committee and used the visit as an opportunity to put forward their point of view. They could have explained that, under their own proposals, there would be a mass franchise. They could also have explained the justification for their belief that the selection of candidates should be under their control.

As to whether the Chinese Government would have persuaded the Committee, we cannot say one way or the other, but that is how they should have operated. They have done themselves a disservice in a much wider sense than simply the implications for Hong Kong, because part of the reason for the original commitment by Deng Xiaoping to two systems in one country was not just to find a solution to the issue of Hong Kong; infinitely more important to Chinese policy and Chinese national aspirations is whether Taiwan will one day agree to rejoin the motherland. Central to the Chinese Government’s position ever since Deng Xiaoping has been an attempt to reassure the people and the Government of Taiwan—now a democratic Government with a pluralist system and the rule of law—that their way of life would not be endangered by some agreement at some stage to peacefully join with China under the People’s Republic. The controversies that are convulsing Hong Kong at the moment do enormous damage to the credibility of the Chinese Government’s ability to put forward that argument. They should realise that, and it is astonishing that they still persist in the policy that we are debating.

Central to these issues is not just the question of democracy in Hong Kong, but the rule of law, which is not just about the number of political parties, the candidates or free elections. We all understand what the rule of law means. A fascinating speech was made by the current leader of China and a policy was implemented by the National People’s Congress just a few weeks ago, when the Chinese Government declared that the priority objective for the immediate future was the rule of law in China—but they described it in a specific way. They said that China would be utterly committed to the rule of law “with Chinese characteristics”. That is an interesting qualification. I recall the days of the Soviet Union, when people referred to “people’s democracies” and we knew that the addition of “people’s” was in practice a negation of the democracy itself. Once people start having to qualify democracy, it is an excuse to try to justify ignoring it. So when China is now committed to the rule of law “with Chinese characteristics”, it is worth asking what the characteristics are.

I have a reason to think I know what those characteristics mean and I wish to share it briefly with the House. When I was Foreign Secretary, one of my obligations was to have a series of negotiations with the then Chinese Foreign Minister, Qian Qichen, about the handover of Hong Kong to the People’s Republic. I vividly remember one meeting in Beijing when I said to him that what was important to the people of Hong Kong when they became part of China was not simply that they would have elections, a pluralist political system and so on, important though that was, but that they would also continue to enjoy the rule of law. I knew what I meant by that, as this House would, but I have never forgotten his response, which was, “Please don’t worry, Mr Rifkind. We in China also believe in the rule of law. In China, the people must obey the law.” I had to point out to him that when we and the people of Hong Kong talked about the rule of law, we were talking not just about the people obeying the law, but about the Government obeying the law—the Government had to be acting under the law and there had to be an independent legal and judicial system. Manifestly, the then Chinese Foreign Minister not only did not agree with me, but had not the faintest idea what I was saying; he could not understand that distinction, and we see that elsewhere; we see it in Putin’s Russia at the moment. The view is that Governments make laws and therefore, if they do not like them, they can either ignore them or change them with impunity, and that is a very serious matter.

It is now 17 years since the transition. I think we have to acknowledge that in many fundamental respects Hong Kong remains very different from China. Compared with the rest of the People’s Republic, it is an open and relatively free society, and we should commend the Chinese Government for the extent to which they have carried out not only much of the letter of the commitment, but a significant amount of its spirit. If they had not done so, Hong Kong would not be the open society that it still remains today. But this House, like the world as a whole, is conscious that these distinctions are being eroded, and in the short term the situation is rather grim if the Chinese Government are determined to nibble away wherever they can at the freedoms that the people of Hong Kong enjoy and are entitled to continue to enjoy.

In the medium to longer term, the difference between Hong Kong and the rest of China will erode, but not in the direction that the current Chinese Government would like; it will not be by Hong Kong becoming more like China, but in the longer term by China becoming more like Hong Kong. Already the pressures within China for a more open and more pluralist system, and for some choice in the election of its leaders, are becoming very significant. To be fair, the Chinese Government have already experimented in some local elections with allowing more than one candidate and a real element of choice, albeit in a very restricted way.

The final point I make is simply that the Chinese Government’s current assumption about pluralism, democracy and the rule of law is that they are western values, not Chinese ones. The evidence that discounts that, showing it to be worthless as an argument, is not what happens in the west; it is found by looking at the transformation of Taiwan, at Hong Kong and, to a significant degree, at Singapore—all Chinese communities that not only talk about democracy, but practise it. They practise pluralism and have independent judicial systems, and that clearly corresponds to the wishes of the people they govern. So we are talking about universal values, and the Chairman and members of the Foreign Affairs Committee have done a great service, not just to this House, but to Hong Kong and to China as a whole, by opening up this debate in the way that we are able to do today.

13:26

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

I hope the House will forgive me if I do not remain throughout this debate, as I have other commitments, although I very much wanted to be present for it.

I was in Hong Kong at the handover from the United Kingdom to the Chinese Government. I remember that Prince Charles gave a party aboard the royal yacht Britannia, but there was nothing to celebrate. I was there in an auditorium when Chinese troops goose-stepped along the stage, hauled down the Union flag and hoisted the Chinese flag, and I regarded it as a day of shame for Britain. There was never any obligation to hand over Hong Kong to China. Chris Patten, when he was governor of Hong Kong, belatedly tried to stop it, but by then it was too late because the then Government had decided that that was what should be done. I have no doubt that it was Foreign Office officials abiding by their usual custom of ingratiating themselves with a Foreign Government with whom we could have valuable trading relations, with democracy as the second consideration.

[Alok Sharma (Reading West) (Con)]

The right hon. Gentleman makes a point about trade. China is looking to deploy enormous amounts of capital in Europe and, clearly, a lot of investment is taking place in the UK, which I welcome. What more could be done to impress upon the Chinese Government that these incidents ultimately hit business confidence and that they need to get over this because we want to see more investment from China in Europe?

[Sir Gerald Kaufman]

The problem is that the Foreign Office and other Departments such as the Department for Business, Innovation and Skills say, “In the end, human rights in China and in Hong Kong are secondary to the fact that China is now an immense economic power and a very important trading partner.” The problem is that the days when morality dictated foreign policy have diminished, and it is very important for us to understand what is going on there. I remember making a great mistake when I led a Labour party delegation to China as shadow Foreign Secretary. I said to the leaders of the Chinese Communist party that if they wanted China to be a capitalist country, which they clearly did, they would have to abandon autocracy and adopt democracy. I could not have been more wrong, because they have managed to create a capitalist economy without putting in place a democratic society.

This is a very important moment in our relationship with Hong Kong. I pay tribute to many of the things that were said at Foreign Office questions today, but the Government must take into account the fact that although trade and jobs are important, morality is also very important and we should stand up for it.

I have a painting in my house of the gate to Tiananmen square. When we look at what has happened in China, we should be more realistic about the situation. Okay, if we want to be brutal and say that trade matters more than anything else, we should understand that that is a point of view and a policy. But let us take into account the fact that China still has the death penalty, which it uses whenever it feels so inclined. It tortures and imprisons without trial—I saw a programme on television about an artist who was imprisoned for producing the wrong paintings. There is no genuine freedom of speech, and the state interferes with the social media whenever it feels so inclined. I am not saying that we can transform all of that; of course we cannot. I am just outlining what is happening.

The day may come when China, like the Soviet powers, suddenly becomes a democracy. I hope that I will live to see it. But at this moment, it is very, very important for this House to register its anger at what has taken place and at the insult to the Foreign Affairs Committee and therefore to this House of Commons. I am grateful to you, Mr Speaker, for calling on me to speak, because I did not wish this incident to go by without stating my experience and my view.

13:32

[Sir John Stanley (Tonbridge and Malling) (Con)]

I am glad to follow the excellent opening speech of my right hon. Friend the Member for Croydon South (Sir Richard Ottaway), the Chair of the Foreign Affairs Committee, of which I have been a member since 1992.

When you, Mr Speaker, gave your most welcome consent to this debate yesterday, you were entirely correct in stating that the situation we face is entirely unprecedented. The Foreign Affairs Committee, during the long period in which I have been privileged to serve on it, has never before been refused entry to any country in the world. As the Chair of the Home Affairs Committee has already pointed out, this is a dangerous precedent for other Committees in the House and for the House as a whole.

In a previous visit to China in the last Parliament, we were subject to threats and a degree of intimidation, as the authorities tried to deter us from going to Tibet. I was privileged to lead the group that eventually went to Tibet, and we faced down those threats and attempts to intimidate us. At the end of the visit, we faced further intimidation and threats from the Chinese authorities when they found out that we were going from mainland China to Taiwan. That difficult situation was admirably handled by the then Chair of the Committee, the hon. Member for Ilford South (Mike Gapes). Again, we faced down the Chinese authorities and went to Taiwan as planned.

I am sure that all parts of the House would regard this unprecedented situation as wholly unacceptable. What the Chinese are seeking to achieve by barring the FAC from Hong Kong escapes me. As the Chairman of the Committee made clear, we will not be deflected from our inquiry. We shall continue to take evidence for our inquiry, including from people in Hong Kong—we are capable of doing that without actually going to Hong Kong—and we shall make our report to the House in due course.

In political terms, the Chinese authorities have scored a spectacular own goal. They could not have given more eloquent credence to the case being made by the pro-democracy demonstrators in Hong Kong that the joint declaration is under threat; they could not have made it clearer by the way in which they have dealt with the House of Commons’s Foreign Affairs Committee. Notwithstanding that, the issue of how the British Government respond is of key importance.

I must say to the Minister of State, Foreign and Commonwealth Office, my right hon. Friend the Member for East Devon (Mr Swire), and to my right hon. Friend the Foreign Secretary that I have, thus far, been very disappointed with what I have seen in the public domain from the Foreign Office in its response to the situation in which this House and the FAC have been placed. As far as I can see, all they have said is that the Chinese authorities’ response and ban on the Foreign Affairs Committee is “regrettable”. That is nothing like good enough. The House and democracy in this country have been treated with contempt. I hope that the Minister of State will give us a robust response when he ends this debate.

13:36

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

As always, it is a great pleasure to follow the right hon. Member for Tonbridge and Malling (Sir John Stanley) He will recall that I, as a newly elected Member of this House, joined him on the Foreign Affairs Committee in 1992. In my time as a member of the FAC, I made many visits to many different countries. We might have had some issues about who we were able to meet and the exact timings of visits, but we were never told—not even by Russia, Iran, Saudi Arabia, Pakistan, Afghanistan or China—that we were not welcome to come and that the authorities would stop us getting off aircraft. It is not, as some Members have said, a matter of visas; UK citizens do not need visas to go to Hong Kong. The Hong Kong Government determine their own internal arrangements, yet the people in Beijing and their diplomatic representatives in London have told us that we are not welcome in Hong Kong, which is, as the Chair of the Committee so ably put it, a breach of the undertakings given by the Chinese to the people of Hong Kong and to our representatives in the negotiations that led to the joint declaration.

Members have asked why China is doing this. I suspect—and this really surprises me—that they are afraid that the presence of a handful of British parliamentarians is somehow going to change the internal dynamics in Hong Kong and China. They must be very nervous and worried. What is happening in Hong Kong is not being broadcast in the Chinese media. We can see it covered in the rest of the world and we can see it in Taiwan, but the Chinese authorities have rigorously censored communications about events in Hong Kong. That also happens when the people of Hong Kong protest on the anniversary of the massacre in Tiananmen square—not a word of it is broadcast by the Chinese state authorities. This is an indication that the Chinese regime is prepared to use a ruthless power because it is afraid. That augurs badly for what might happen in Hong Kong in the coming weeks and months.

I do not want to spend too long talking about that, but I did want to talk about the issues about Parliament and the Committee’s inquiry. Let me go back to the previous time we visited China. In May 2006, the previous Parliament’s Foreign Affairs Committee, which I had the great honour of chairing, went to Hong Kong and from there to Beijing. The group then split into two. One went to Tibet, to Lhasa, and the other, which I led, went to Shanghai. We then met up again in Hong Kong and went to Taiwan. One of the interesting episodes, to which the right hon. Member for Tonbridge and Malling just referred, was the meeting we had with Foreign Minister Li Zhaoxing. He was very pleasant to begin with and asked me how my right hon. Friend the Member for Derby South (Margaret Beckett), the then Foreign Secretary, was doing as he had had amicable discussions with her in the United Nations Security Council meetings. After 10 minutes, he switched completely to tell us, “I understand that you intend to go to our 19th province”—that is, Taiwan. “We have no objection to your going, but only after the reunification of our country.”

He then said, “You are all diplomats.” We said, “No, we are parliamentarians. You don’t understand. We are not here representing the British Government but doing an inquiry and our presence and visit will not in any way change the British Government’s policy. We are doing this because we need to investigate Taiwan and its relationship with China.” He said, “If you do this, there will be serious consequences.” We wondered what those serious consequences were. As the right hon. Member for Tonbridge and Malling said, the visit continued and we went to Tibet and to Shanghai, went back to Hong Kong and then to Taiwan. There were no serious consequences for the Foreign Affairs Committee.

Later on in the previous Parliament, when the Committee was considering human rights issues globally, we decided as a Committee to receive the Dalai Lama for a public evidence session, which I chaired. At that point, I received a very long and vitriolic letter from the National People’s Congress in Beijing and a visit from the then Chinese ambassador, who subsequently became a deputy Foreign Minister, bringing lots of different materials including piles of books about the CIA’s role in Tibet and other documentation. The Chinese are obviously very sensitive, as they always have been, about issues to do with their status and the respect others have for China in the world. We can have a robust exchange about such issues, but there has never been a ban on parliamentarians from this House as a result of those differences. That tells me that there is something happening internally in China that is worrying.

In our report after the inquiry in the previous Parliament, we commented on the situation in Hong Kong. In one of our conclusions, we recommended that

“the Government urge the Hong Kong Special Administrative Region to make significant, major steps towards representative democracy and to agree with Beijing a timetable by which direct election of the Chief Executive and LegCo by universal suffrage will be achieved.”

I hope that that is a position to which we all, including Members on the Government and Opposition Front Benches, could agree today. It is of course a matter for the people of Hong Kong and China to make proposals using the arrangements set out in the Basic Law, but the aspiration for representative democracy and universal suffrage should apply for all people as soon as possible, including in Hong Kong.

The Committee also commented on the internal situation in Hong Kong with civil liberties, humanitarian issues and the rule of law. Our conclusion in 2006 was that

“despite some concerns, overall Hong Kong remains a vibrant, dynamic, open and liberal society with a generally free press and an independent judiciary, subject to the rule of law.”

I hope that we can say the same about Hong Kong today. Obviously, our report will have to be published in due course when we have finished taking evidence, but I think that the behaviour of the Chinese authorities towards our Committee as well as other issues that have been raised with us so far in the evidence we have received prompt concern about whether those principles and values are under threat today.

Let me conclude with a more general point, which has been mentioned in passing. Some people believe that we should turn a blind eye to this and some people believe that the economic imperative should determine everything. Those of us who have been to Taiwan, however, or to other countries around the world with significant Chinese populations, know that there is nothing inherently authoritarian, Stalinist, Leninist or Maoist in the Chinese character. What is communist about China today? Only the name of the ruling party. It has a state capitalist economic system run by an elite that holds political power through a one-party system and suppresses and controls dissent. How sustainable is that in the future? I do not know. China’s economy is turning down and the rate of growth is slowing. China has a major demographic problem long term and its ability to meet the aspirations of its people, which it has done, taking hundreds of millions of people out of poverty in recent years, is not necessarily sustainable indefinitely under its current political model.

There are clearly big questions for the rest of the world about how we deal with a growing China. People have talked about China’s rise and Martin Jacques, an author who is very well informed although I do not agree with his rose-tinted conclusions, has written a book called, “When China Rules the World”. Frankly, if China were to become the most important country in the world politically that would raise serious questions about what kind of universal values it would have and what kind of rule of law and humanitarian law there would be.

It might be a small point for some people that a Committee of the House of Commons has been prevented from going to Hong Kong, but it raises fundamental questions.

[Margot James (Stourbridge) (Con)]

Does the hon. Gentleman agree that the banning of the visit is symptomatic of China’s attitude to the rest of the world, particularly her near neighbours, considering the aggression over the Senkaku islands, the adventurism in the South China sea and the intransigence she has demonstrated in the Security Council?

[Mike Gapes]

I would be fairer to China, because it has played a positive role in some international matters, such as climate change, and certainly on international security, so I do not think that all its actions have been on the bad side. However, there are concerns about its attitude and, as the hon. Lady has highlighted, there are a number of territorial disputes around the coast and in east Asia, where a number of states are in contention for territories that have the potential for gas and oil exploration. I do not want to go down that track now and so will conclude by talking about democracy.

In our 2006 report, the Committee came to an important conclusion. We were commenting on the Chinese military build-up across the Taiwan straits and the possible threat to peace and stability in east Asia. Relations between Taiwan and China have since improved significantly: there are now far more direct flights, there is massive investment, and millions of mainland Chinese tourists visit Taiwan, as I saw last new year—the hotel I was staying in was full of mainland Chinese. Nevertheless, there is still great sensitivity in China about what is happening in Taiwan. The Taiwanese people, as they have shown in recent local elections, are very committed to democracy. They throw politicians out and reject incumbent parties and Governments regularly.

Our 2006 report—I think that this is still pertinent today—concluded:

“the growth and development of democracy in Taiwan is of the greatest importance, both for the island itself and for the population of greater China, since it demonstrates incontrovertibly that Chinese people can develop democratic institutions and thrive under them.”

That is also relevant to Hong Kong, which is why what is happening there matters and why our Committee is absolutely right to continue our inquiry and, in due course, produce a report. The Government will then have to respond to that report, hopefully before the next election, so that the House can have a further debate about developments in Hong Kong and China over the coming months.

13:53

[Richard Graham (Gloucester) (Con)]

The House debates today in unusual, if not unprecedented, circumstances. It is a matter of deep frustration, disappointment and regret to me not only that are we here to do that, but that I am here as an individual who has played a part in the events leading up to the debate. For it is not only the Foreign Affairs Committee that has been effectively prevented from visiting Hong Kong: a week ago my visa application to join the UK-China leadership forum in Shanghai was rejected, as a result of which the entire parliamentary delegation has pulled out of the forum.

We must ask ourselves why that has happened. The underlying answer, of course, as my right hon. Friend the Member for Croydon South (Sir Richard Ottaway) rightly said, is that we have a serious disagreement with China over our ability to discuss and debate issues in Hong Kong. As other Members have said, it is sad that even before the Committee’s report has been drafted, let alone completed, China has concluded that it must be negative in principle because of its existence, rather than its content, which is as yet unknown.

In the same way, I was clearly penalised for having the temerity to organise a debate on Hong Kong on 22 October. In my speech on that day, I congratulated Britain and China’s leaders in 1984 on finding

“a formula, and later the trust, that maintained confidence within Hong Kong and by the world in Hong Kong. Thirty years on, the architects can congratulate themselves. Broadly, Hong Kong has thrived and remains special and successful.”

I concluded my speech thus:

“For the people of Hong Kong and we”—

meaning all of us in Parliament—

“have no interest, no advantage or no conceivable selfish purpose in any form of car crash with Hong Kong’s sovereign master, China. Rather, it is in all our interests, but particularly those of Britain and China in fulfilling the joint declaration, that Hong Kong continues to thrive and prosper, in a different world from that of 1984 or even 1997.”—[Official Report, 22 October 2014; Vol. 586, c. 276-81WH.]

I do not believe that anyone in this House, or indeed anywhere, could take violent objection to the thoughts and beliefs behind that statement. However, I am afraid that there was an objection, which I received today in hard copy—it had insufficient postage and so arrived only today—from Ambassador Liu of the People’s Republic of China. He expressed severe displeasure and disappointment about a letter I had written to him some 10 days before the debate, outlining my reasons for holding it.

I will recap the crucial part of the reason. As chair of the all-party China group, I believe that I have two main responsibilities, as outlined on our writing paper and clearly laid out on our website: first, to provide a forum for debate on all matters of bilateral interest; and secondly, to help to inform parliamentarians through regular visits to China. I believe that by holding the debate on Hong Kong I was fulfilling the first objective.

Ambassador Liu wrote:

‘Matters related to Hong Kong are none but China’s internal affairs, where China is firmly opposed to intervention or interference of any kind by any country or any individual, including the House of Commons’ inquiry, debate and investigation involving Hong Kong. Your insistence on having the aforementioned debate in the House of Commons has in effect meddled in such internal matters of Hong Kong and sent out a wrong signal. Such moves, exploited by the opposition in Hong Kong, will only create an impression that Britain supports unlawful activities such as ‘occupy Central’.”

I have read out excerpts from my speech, and I do not believe that any objective reader could reach any of the conclusions reached by Ambassador Liu, least of all an impression that Britain supports unlawful activities such as those of Occupy Central, which did not feature in my speech at all.

Ambassador Liu’s letter went on to state that I, as chair of the all-party China group,

“charged with the responsibility and mission of advancing China-UK relations”—

that is not strictly my mission, as I have just explained—should

“refrain from interfering in the internal affairs of Hong Kong as well as China. I urge you to do more things to promote China-UK relationship, rather than disrupt or undermine its healthy development.”

It is true that relations between our two countries have improved considerably. My right hon. Friend the Minister and I were both part of the very successful delegation led by the Prime Minister to China a year ago, and earlier this summer we had a very successful visit by the Chinese premier, Li Keqiang, to the UK. All of us here want to see positive relations between Britain and China for precisely the reasons I have outlined. We have much that is to our mutual benefit, much in the way of mutual challenges and much that we are doing together to make the world a better place.

I genuinely believe that the role of diplomats is to build bridges, not barriers; to solve problems, not to create them; to help bring our two countries closer together; and to strengthen the relationships between this Parliament and the National People’s Congress in Beijing. Let me, for the record, respond to Ambassador Liu’s comment that I should

“do more things to promote”

the China-UK relationship. For three years, I was this country’s British trade commissioner to China, and also our consul to Macau. Later, I opened the first merchant banking group office in China and listed the first Chinese company on the London stock exchange. In 1993, I was part of the Anglo-Chinese expedition to make the first ever crossing of the Taklamakan desert. During that expedition, I should, by rights, have died from amoebic dysentery. I was saved by some unbelievably strong antibiotics that meant I could not eat for five days while walking some 25 miles a day in the heat of that hitherto uncrossed desert, so every day since the winter of 1993 has, to some extent, been an extra day in my life. When I came out of the desert—so thin that my trousers fell down when I tried to pull them up—and went straight to Shanghai to open the office of my employers, I vowed that I would dedicate a chunk of my life to doing things that would continue to help relations between Britain and China.

Some two years later, my wife, Anthea, made me aware of what was happening in Chinese orphanages in Shanghai. She was, at the time, the person in charge of the welfare team of the Shanghai Expatriate Association. Many Members will know that, largely because of the one-child system, huge numbers of orphans, often predominantly female, were dumped on the doorsteps of orphanages and would spend the rest of their lives in an institution. This was a human tragedy. My wife’s dedication to helping two or three individual orphans led me to create a charitable company in Hong Kong called Children First and to get pledges of significant amounts of money from businesses in Hong Kong to support the creation of what would effectively become a foster care system in Shanghai.

At that time, talks with the Shanghai municipal government fell through, largely on the issue of trust about who would have control of the money. However, the relationship with the civil affairs bureau was so strong that when a British citizen, Robert Glover, arrived in Shanghai and was introduced to the bureau by my wife, he was able to take forward our original vision and create what is now Care For Children—the first ever joint venture Sino-British charity, now joint ventured with the central Government’s civil affairs bureau. To date, it has taken between 250,000 and 300,000 orphans out of orphanages and put them in foster homes. It is a remarkable success. I pay tribute to Rob Glover, who is in London this week, and all that the charity has achieved. I am proud to have been first its adviser and later a director.

That is one example of a personal commitment to improving things between Britain and China that I hope will show the House that far from doing things to disrupt and undermine the healthy development of the relationships between our two countries, I have consistently tried to enhance them.

In that context, I am deeply disappointed by what happened this summer when the Foreign Affairs Committee rightly decided, owing to the events in Hong Kong and to the six-monthly update report on Hong Kong by Her Majesty’s Government, that it was time for it to write a report on the state of the relations between the UK and Hong Kong. It is very disappointing that a China that is now in every way stronger, more confident and more robust than it was 35 years ago, when first I visited, has been unable to recognise that this should be seen as a positive and encouraging development that opens doors rather than closes them, and to welcome a report that, in many ways, may turn out to be a lot more positive than it expects.

Today’s debate is unfortunate in many ways. When my visa was rejected 10 days ago, I decided not to say anything about it because I did not want to contribute to a worsening situation. It was already, to me, a huge disappointment that a body like the UK-China leadership forum—which exists precisely to have the dialogue that two countries with different histories, cultures and systems of government and parliament must have in order to overcome their differences of opinion and views on the world at large—was having to be disrupted on the simple principle that China chooses its delegation and we choose ours.

This debate is essentially about the freedom that this House must have to fulfil our duties and obligations to our constituents. Our constituents are interested in a strong relationship with China. Of course, business and the economy are a vital part of that, but our constituents are deeply interested in other aspects of the relationship, many of which relate to human rights and animal rights. We must raise those issues and they must be debated and discussed. The all-party group cannot and should not avoid them; it must discuss them. We must recognise that there will be differences of opinion, but they should be aired in a sensible, responsible way that recognises the cultural differences. This debate is all about the ability of our House to discuss and debate—and ultimately to enhance, not disrupt—relations between these two great countries.

14:06

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

It is a pleasure to speak after the hon. Member for Gloucester (Richard Graham), who made a very moving and sombre speech about his experiences in China and how sad it is that China has chosen to reject his arrival. The Chairman of the Committee, the right hon. Member for Croydon South (Sir Richard Ottaway), gave a very full and effective explanation of what he called this unfortunate and unhappy episode—I am sure we all agree with that.

I am pleased that we have the opportunity in this emergency debate to highlight how unacceptable the actions of the Chinese Government have been in banning the entry to Hong Kong of democratically elected representatives and hampering our ability to scrutinise our own Government’s actions, as is our role as the Foreign Affairs Committee. It is very important to emphasise, as others have, that we are totally separate from Government. I think that is sometimes misunderstood by some foreign Governments, and certainly by the Chinese Government. We do not take orders from our own Government, so we are certainly not going to be deterred from carrying out our duties by any foreign Government, from whatever part of the globe.

I cannot honestly say that I am surprised about what has happened, because I was present when the Foreign Affairs Committee went to China during the last Parliament, as outlined by my hon. Friend the Member for Ilford South (Mike Gapes). It was quite an experience. I recollect that we received a friendly welcome and had meetings with many representatives of the Chinese Government. However, as my hon. Friend said, when it became clear that we intended to visit Taiwan, we were told in no uncertain terms that this would lead to “serious consequences”. My recollection of the meeting that he described is that we were more or less thrown out; “asked to leave” would be a more polite way of putting it. As he said, the serious consequences did not arise for us, but it was an illustration of the kind of overreaction we can expect from a Government who do not understand the concept of transparency and democracy, not to mention scrutiny and accountability.

Taking the unprecedented step of refusing entry to a Select Committee takes the whole matter much further. I believe that this amounts to a diplomatic crisis. It is more than regrettable, as the Foreign and Commonwealth Office has publicly stated—it is totally unacceptable. I hope that the FCO will make the strongest representations on the matter and take it further with a view to seeking a change of position on the part of the Chinese Government forthwith. I look forward to hearing what the Minister has to say about what the Government intend to do.

We as a Committee have been working hard on this inquiry for some time and taken extensive evidence to date. However, there is no real substitute for finding the facts on the ground, as we have often found in some of the most dangerous places in the world, which often lack democracy. Under the chairmanship of the right hon. Member for Croydon South (Sir Richard Ottaway), we have sought to conduct the inquiry in a responsible manner and as inclusively as possible, preferably with the full co-operation of the Hong Kong authorities. Of course, our concern for human rights and democracy is part of that, but our inquiry is wide ranging and we believe it is timely to look at how the Sino-British joint declaration is being implemented 30 years after it was agreed by both parties.

Contrary to the views of the Chinese Government, Lord Patten told us that the terms of the 1984 joint declaration between the UK and China, agreeing the transfer of sovereignty to China and setting out “one country, two systems” principles of governance, explicitly gave the UK a legitimate interest in Hong Kong’s future. When China asserts that what is happening in Hong Kong is nothing to do with us, we should make it absolutely clear, publicly and privately, that that is not the case. We are not interfering in China’s internal affairs.

Notwithstanding all that, we have the right and the remit to scrutinise the work of the FCO throughout the world, which, of course, we do. This snub by the Chinese Government and the confrontational manner with which they have conducted themselves is an insult not only to the Committee, but to the whole House. We cannot accept it, especially from a Government with whom we have friendly and mutually beneficial relations. The FCO has pointed to the visit of the Chinese premier in June as an example of the positive trend in UK-China relations, but it is fundamental to our democratic system that we reserve the right to criticise our friends, and that should not have come as a surprise to the Chinese Government.

Mr Speaker, I hope you will be able to find it in your power to draw to the attention of the Chinese Government the role of Back-Bench MPs and the House’s disapproval of what has happened. If in refusing us entry to Hong Kong it was their intention to shut us up, they have achieved the exact opposite and shown to the whole world what their agenda is for Hong Kong in a way we will not be able to achieve in our report. However, we have postponed, not cancelled, our visit, so I look forward to the Committee engaging with all parties in Hong Kong in due course.

14:12

[Martin Horwood (Cheltenham) (LD)]

It is a pleasure to follow the hon. Member for Ayr, Carrick and Cumnock (Sandra Osborne) and my parliamentary neighbour, my hon. Friend the Member for Gloucester (Richard Graham), who made a typically well-informed and moving speech.

I will start on a slightly sober note with a touch of realism. We in this Parliament are obviously not in a very strong position to influence events in Hong Kong. Nevertheless, it is absolutely right that we should support human rights and democracy for the people of Hong Kong and support the right hon. Member for Croydon South (Sir Richard Ottaway) and his Committee in stating very clearly that the accusation of unjustified meddling in the internal affairs of China is not justified. Indeed, it is not justified either to try to inhibit the work of the all-party group on China, chaired by my hon. Friend the Member for Gloucester.

[Richard Graham]

My hon. Friend is being generous, both in what he says and in giving way, but I want to make a tiny point. He said that we may not have much influence over Hong Kong, but the whole point of this debate, of course, is that we are not trying to influence Hong Kong. We are trying to discuss the issues, but we are not trying to interfere, meddle, influence or anything else.

[Martin Horwood]

I understand my hon. Friend’s point and I will come back to it. There is an argument for us to comment on universal human rights and thereby try to influence their conduct throughout the world. To that extent, I think we are trying to influence events, but my hon. Friend is right to say that the focus of this debate is on, in a sense, the opposite situation, which is the Chinese Government’s unjustified attempt to curtail a parliamentary inquiry. It is true that we are not seeking in this debate to change anything in Hong Kong immediately.

The accusation of unjustified interference is wrong on two counts. First, as many hon. and right hon. Members have pointed out, we are party to an international agreement—the 1984 joint declaration—which refers in article 3(12) to the

“basic policies of the People’s Republic of China regarding Hong Kong”.

Article 3(4) states:

“The chief executive will be appointed by the Central People’s Government on the basis of the results of elections or consultations to be held locally.”

That is not the strongest wording in the world, but it is repeated in the Basic Law that was also implemented by the joint agreement. Article 3(12) goes on to state that those policies would

“remain unchanged for 50 years.”

We are clearly within that time scale, so the British Parliament has a perfectly legitimate right to look at how the Basic Law and joint agreement are being interpreted in practice in Hong Kong, particularly in the light of the Beijing Government’s announcements in August.

The second reason it is wrong to criticise the Foreign Affairs Committee is that we are all party to the United Nations universal declaration of human rights, which affirms that human rights—from Iran to Colombia and from China to Britain itself—are inalienable for all members of the human family. It is legitimate for any member of the United Nations to look at, comment on and take an interest in the conduct of human rights worldwide, and no Parliament or democratic assembly anywhere in the world should feel inhibited from doing so. It is common for this Parliament to comment on human rights in a variety of countries. Indeed, the Government publish an annual human rights report, in which they comment on human rights in many countries around the world.

As Lenin once said, what is to be done? First, we have to be clear that the Foreign Affairs Committee should continue to highlight the issues raised by events in Hong Kong, to investigate them thoroughly and to draw reasonable conclusions without fear of intimidation. We need to be clear that everyone in this Parliament supports its right to do that and encourages it to continue its inquiry.

Secondly, it is important that the British Government continue to raise concerns about China’s interpretation of the Basic Law and the joint declaration, and in doing so draw on the expertise of the Foreign Affairs Committee and its eventual report.

Thirdly, this country needs to adopt a deeper and more sophisticated policy towards China. Parliament and Government have tended to address China as if the only important thing we want it to do is buy and sell more widgets. The view has been that trade and capital investment are important, but almost to the exclusion of other considerations, and many hon. Members have reinforced the point that that is not the case. Trade and capital investment are important, but policies have to be wider and more sophisticated than that.

Part of that policy has to be an understanding from our side of China, its sensitivities and history, and the progress it has made. That means acknowledging that our shared history with China has not been particularly glorious on the British side on many occasions. We have to acknowledge that our role as a colonial power in events such as the opium wars was, in retrospect, disgraceful. We have undervalued contributions such as that of the 96,000 members of the Chinese Labour Corps during the first world war. They behaved with complete heroism and lost thousands of their number, but they were treated pretty disgracefully at the time and, equally disgracefully, their heroism and contribution to this country during the first world war have been neglected. A broad-based campaign is seeking to rectify that omission and obtain a memorial in this country to the Chinese Labour Corps. I hope that will attract Government support.

We have to acknowledge our own failure to deliver democracy in Hong Kong. We were the administrators and rulers of Hong Kong for many years, and we never delivered a Chief Executive who was elected by the people of Hong Kong without interference. We appointed colonial governors, and I am sure that some of them were very skilled, talented and caring, but in a sense it was a benign colonial dictatorship. It is difficult for us now to turn around and criticise China on how it behaves towards Hong Kong, and we have to be sensitive to that.

[Sandra Osborne]

It is important to remember that the Committee has not come to any conclusions about the rights and wrongs of the situation. We are protesting about being refused access to Hong Kong.

[Martin Horwood]

I completely accept that point, which the hon. Lady is right to emphasise. I am talking in a wider context about how we need a sophisticated approach to China. We should not constantly hector the Chinese for any failings we detect on their side, without acknowledging that over the long period of history—their approach is very much to look at the long picture—there have also been historical failings, injustices and omissions on our side. We have to be honest and acknowledge that.

A sophisticated policy towards China must include firmness in the face both of contraventions of human rights on Chinese territory, and of the militarisation and the sometimes unjustified indulgence of dictatorships in different parts of the world. That firmness should include the way in which the Chinese allow the perpetuation of wildlife crime in pursuit of markets for things such as ivory, which the International Fund for Animal Welfare has highlighted in the House of Commons only this week. In our pursuit of trade and investment, there is a risk that not only the UK but democracies all over the world will find ourselves divided and perhaps to some extent ruled by a Chinese foreign policy that seeks to intimidate smaller democracies and to influence our discussion of their affairs.

[Jim Shannon (Strangford) (DUP)]

It just so happens that I had an opportunity to speak to a chief superintendent from the Hong Kong police this week. In our conversation, he confirmed that 6,500 demonstrations take place in Hong Kong. We are very fond of demonstrations in Northern Ireland, as the hon. Gentleman probably knows. Does he share my concern to ensure that demonstrations commemorating workers’ rights and other events should continue in the way they have until now, with no bother, actions or friction?

[Martin Horwood]

The hon. Gentleman makes a very important point, which underlines the fact that it is sometimes difficult to deal with the idea of free protest. It is fine in principle, but in practice even in our own country—even in Northern Ireland—it is sometimes a difficult challenge for policy makers and the authorities. The right of free protest is enormously important. It has been a hard-fought and hard-won right in countries all over the world, and we should certainly try to defend it in Hong Kong.

I was making the point that the free countries of the world risk being subject to a kind of divide-and-rule approach by the Chinese, with the Chinese Government using the rather intimidating tactics of trying to suppress inquiries and to inhibit activities, even those of all-party groups that are nothing to do with the British Government and are not part of this country’s Executive.

Part of the relationship building has to be to try to communicate to the Chinese Government what we understand not just by the rule of law, as has been mentioned, but by the separation of powers. In democracies such as ours, the Executive, the judiciary and the legislature are completely separate, and they have their own rights against each other, let alone in relation to other countries.

The democracies of the world must start to develop a more sophisticated approach to China, so that we can present a united front and say, “It is quite clear that you are the emerging new superpower of the world, an enormous economic force and probably a growing political force, and that you have an enormously rich and important history and a fabulous civilisation, but that does not give you the right to take smaller countries, democracies and economies and inhibit them from carrying out their proper business.”

[Ian Paisley (North Antrim) (DUP)]

Our links with China should be emphasised. Historically, the first ambassador to Beijing hailed from Ballymoney—his name was Macartney—but today that link between my constituency and Hong Kong continues through the Kowloon Motor Bus Company, with Wrightbus manufacturing buses not only for London but for Hong Kong. Such economic links should be used as influence, saying, “Look, we have an economic driver that brings us closer together. Let us not be separated by this division that is currently preventing Members of Parliament from entering Hong Kong.”

[Martin Horwood]

I am happy that the hon. Gentleman has intervened on that point, which emphasises our strong cultural and human links with Hong Kong and with China as a whole.

Countries such as the UK must support democracies in the region, such as Taiwan. The example of Hong Kong is very important to Taiwan’s security and confidence. The language that Beijing is using about Taiwan has changed subtly in the past year or so. It is talking about the problem of Taiwan not being handed down from generation to generation, as though there ought to be some conclusion to the perpetual debate about Taiwan’s possible independence, its reintegration into the Republic of China or its continuation with its current status. That is potentially threatening to the democracy of Taiwan, as we must acknowledge. We must understand that how the one country, two systems approach has worked in Hong Kong is vital, and that that example is being watched very carefully in Taiwan.

The underlying message of this debate must be that we have to understand and respect China, but that we equally want China to understand and respect how our democracy works, including how we separate powers between parliamentary inquiries and the Executive, and how a Select Committee’s right to look into a legitimate area of concern—in terms not only of British foreign policy but of universal human rights—is something that we can and must defend.

14:19

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

May I first thank you, Mr Speaker, for allowing this important—not just important but, quite frankly, unprecedented—debate to take place? The question that has been asked is: why should Parliament allow another nation to determine the way in which we work on behalf of the people we represent? The answer is that we should not just allow that to happen without a proper debate and without making sure that our views are known.

Our Committee agreed on 22 July to hold an inquiry into the United Kingdom’s relations with Hong Kong 30 years after the signing of the joint declaration in 1984. The inquiry’s terms of reference were wide-ranging, with four pillars. The Committee planned to assess, first, the FCO’s monitoring of the joint declaration via its six-monthly reports; secondly, the Government’s relationship with the Government of the Hong Kong Special Administrative Region; thirdly, business, trade and cultural links; and fourthly, the work of the British Council.

The Committee received letters from the Chinese ambassador, the Chinese Parliament and Hong Kong Government representation in London urging us to cancel our inquiry. They argued that the inquiry would constitute interference in their internal affairs and provide a platform for “unlawful propositions” on democratic reform. Indeed, the ambassador warned that our inquiry would

“ultimately harm the interests of Britain.”

As our Chairman, the right hon. Member for Croydon South (Sir Richard Ottaway), so ably said, he informed the Chinese that we understood the sensitivities involved in our inquiry, but intended to continue with it and with the visit that we planned to make to Hong Kong at the end of the month.

The visit would have been an important opportunity to meet a range of people in Hong Kong—not just politicians or those at the top of the tree, but business people, ordinary working people and, yes, probably student protesters. The students have a point of view, and they deserve to have it heard. We would also have spoken to the people in our hotel and the people we met in the street. We were not hoping to have some high-level, closed-door discussion.

The Chinese Government have all but accused us of providing support and a platform for the protesters. That is not what the inquiry is about and it is not what our visit would have been about. Unfortunately, that is where it is beginning to head. We had never mentioned Occupy Central. We announced that we were holding the inquiry in July. The announcement about the elections in Hong Kong was not made until 31 August. That is when the demonstrations started.

At every point along the way, we have made it clear that we want the inquiry to be balanced, objective and, most importantly, evidence-based. We want to hear a range of views and perspectives from all sides, including the Chinese and Hong Kong authorities—I repeat, including the Chinese and Hong Kong authorities. We have made it clear that we have no intention of meddling in China’s internal affairs. That is not why we were elected as parliamentarians. However, we are focused on doing our job, which is to scrutinise our Foreign and Commonwealth Office—to scrutinise the work of the men and women of the FCO and the job that they do for the United Kingdom.

[Mark Pawsey (Rugby) (Con)]

The hon. Gentleman is referring to the reasons why the Chinese authorities were not happy about the visit of the Select Committee. They said that it

“may send the wrong signals to the figures of ‘Occupy Central’”.

Can he allay the fears of the Hong Kong authorities by saying that in visiting and talking to people who are demonstrating, we are not necessarily indicating that we support them?

[Mr Roy]

That is exactly what we had hoped to do. We had hoped to speak to as many people as possible and hear as many views as possible. We wanted to ensure that no matter what our inquiry said at the end, it was evidence-based. We were not going there to be a cheerleader for Occupy Central, but we were not going there to ignore it either.

Unfortunately, on Friday last week, we were told directly that the Chinese Government would not allow us to enter the territory of Hong Kong. As I said earlier, that is unprecedented. During this Parliament alone, the Foreign Affairs Committee has visited countries such as Saudi Arabia and Russia, which have had internal problems and which would not have been too happy about the Committee doing an inquiry. Regardless of their opinions, we were allowed to visit, to meet people and to publish our reports. In previous Parliaments, as we have heard, the Committee has visited China, including Tibet. We have never been denied entry to any country. In fact, no Committee of this House has ever been denied entry to any country.

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

The hon. Gentleman says that the Select Committee has been denied entry into Hong Kong. Has the Committee considered going ahead with its proposed visit and being turned away by the Chinese authorities to show the significance of what has taken place? That would clearly show the international community the contempt with which the Foreign Affairs Committee is being treated. What hope can the demonstrators have of how they will be treated by those same authorities?

[Mr Roy]

There is an argument for doing that. Unfortunately, the Committee would not be allowed to board the flight in London, because it is against the law for somebody to take a flight to somewhere they know they will not gain entry to.

[Richard Graham]

Does the hon. Gentleman agree that if a select committee of the National People’s Congress wished to visit Britain, it is inconceivable that we would decline its members a visa?

[Mr Roy]

Absolutely. Think of the uproar there would be if we suddenly said to Chinese parliamentarians, “You are not coming to this country. You are not coming into this building.” It does not take a huge brain to work out the uproar that would result from such a ban if it were the other way around.

[Sir Richard Ottaway]

The hon. Gentleman might be interested to know that it is my understanding that a delegation from China is coming to Parliament this week.

[Mr Roy]

If they are coming this week, I am sure that I speak on behalf of the whole House in saying that they are most welcome to attend Parliament and to have a full and frank discussion on any subject they wish to raise with any politician.

I was talking about areas that we have visited where one would imagine that there could have been problems. Several Members recently returned from the Kurdistan region of Iraq, which we visited in connection with our current inquiry into Kurdistan. Like Hong Kong, it is a sub-region within a sovereign country. Kurdistan is constitutionally very sensitive for the Iraqi Government, but the Iraqis were welcoming and helpful. They understood that we were travelling there not to build on discord or to start a row, but to do a job on behalf of the people we represent and ultimately, we hope, to make more people understand the problems that there are in Iraq and Kurdistan.

The Prime Minister’s spokesperson said yesterday that the Prime Minister believed that the decision was mistaken. He said that it served only to

“amplify concerns about the situation in Hong Kong, rather than diminish them.”

As the Chairman of the Select Committee said so eloquently, China’s decision to deny us entry sends a worrying signal about its direction of travel regarding Hong Kong. It is also a worrying signal for the people of Taiwan and the Government of Taipei. We must be under no illusion: the people of Taiwan and the Government of Taipei will be watching this situation and asking, “Is this where we could go? Is this what could happen to us?” Who could blame them if they did?

I will be grateful if the Minister answers five questions when he sums up. First, how do the Government intend to respond to this unprecedented ban? Secondly, what meetings and conversations have Ministers sought or held with their counterparts in China in the past five days to discuss this issue? Thirdly, has the FCO called in the ambassador? Fourthly, has the United Kingdom’s embassy in China protested formally to the Chinese Government about the ban, and if not, why not? Lastly, what does the Minister think the ban says about China’s approach to the United Kingdom and the work of democratically elected parliamentarians?

The decision to ban our Select Committee is wrong and totally undemocratic. It must not go unchallenged.

14:38

[Andrew Rosindell (Romford) (Con)]

I commend my right hon. Friend the Member for Croydon South (Sir Richard Ottaway) for his robust defence of the right of the Foreign Affairs Committee of the Parliament of the United Kingdom to carry out an inquiry into a subject that it has every reason and right to examine.

The shameful action by the Government of the People’s Republic of China to deny the Select Committee the ability to visit Hong Kong in order to conduct our legitimate business is a demonstration to the entire world that China has little respect for freedom, free speech and democracy. It is a sad state of affairs, which will have grave implications for British-Chinese relations for a long time to come.

I first visited Hong Kong in 1996, when Lord Patten of Barnes was the Governor of the Crown colony. It was indeed then one of Her Majesty’s Crown colonies. The people of Hong Kong did not choose to have that status taken from them, of course; that was imposed upon them without their consent. Two years earlier, in 1982, the people of the Falkland Islands had their right to freedom and self-determination upheld by Her Majesty’s Government. Although the circumstances were very different, it cannot be denied that the people of Hong Kong were not accorded the same rights.

Today, 30 years later, the streets of Hong Kong are filled with young people who, understandably, demand freedom and democracy—basic rights that the People’s Republic of China continues to deny them. The Sino-British joint declaration made clear the expectations between the United Kingdom and the People’s Republic of China regarding the sovereignty of Hong Kong and how it should be governed. I am deeply saddened that over recent weeks and months, the assurances given to Her Majesty’s Government at that time have been forced into question by Beijing’s actions.

Over the past three decades, Britain and China have enjoyed a growing partnership, in which trade and bilateral relations have been strengthened. China’s behaviour this week is wholly inconsistent with the positive diplomatic trend that our two nations have observed since 1984. It is nothing short of an outrage that the Foreign Affairs Committee of this democratic House of Commons, the mother of Parliaments, should be treated in such a way by an undemocratic Chinese Government. I am gravely concerned about the aggressive and confrontational position that China has taken on a matter of such importance. In the 21st century, there is no place for such an attitude. It is an unjustified attack not only on elected British parliamentarians but on transparency and on democracy itself.

What exactly is China trying to hide from us? It is the right of the Committee to carry out an inquiry into relations with Hong Kong and to formulate its report. It is beyond question that it is within the gift of the British Foreign Affairs Committee to examine not only British-Hong Kong relations but adherence to the joint declaration. As a joint signatory, we must of course have the right to look at whether that agreement is being upheld, both in the letter and the spirit of the accord.

Denying the Committee the right to visit Hong Kong does not close the door on the issue at all, as China may have hoped. In fact, it has brought it to the world’s attention. The Foreign Affairs Committee will not back down. We still intend to visit Hong Kong, and our inquiry continues. By its actions, what China has actually achieved is to raise many serious questions in the eyes of this House and the British people—questions that must now be answered. The British Government must show no hesitation in demanding an immediate response. Will the Minister insist that the Chinese ambassador be called to the Foreign Office to explain his Government’s actions. I certainly hope that he will.

As many of my colleagues have stated, Britain has no interest in interfering in the internal politics of China. However, Hong Kong is different. Britain has a duty to the people of Hong Kong, and we must not abandon them. The United Kingdom owes them an allegiance—many of them served bravely in Her Majesty’s armed forces, and it is imperative that we do not back down from such an important commitment to them.

Today, there are still many former Hong Kong servicemen living in the territory, and they are seeking British citizenship. They are people who fought, and were prepared to make the ultimate sacrifice, for this country, and we should care deeply for their well-being and status. They are servicemen from the Hong Kong Military Service Corps and the Hong Kong Royal Naval Service who did not receive a UK passport following the handover of Hong Kong to China. Those men and their ancestors served British commitments in south-east Asia greatly. They stood shoulder to shoulder with Britain through two world wars, and in France, Burma, Korea, Malaya, Singapore, Hong Kong and China, and they served the United Kingdom—King, Queen, empire, Commonwealth and country—for all those years. The British Government must surely now recognise that the decision not to give all those servicemen a right to British nationality was unjust and an error of judgment that should be rectified.

I had hoped that the Foreign Affairs Committee would be able to meet some of those loyal ex-servicemen while we were in Hong Kong, but alas, that will now not happen. The actions of the Chinese Government have highlighted why Her Majesty’s Government should now be prepared to offer all those Hong Kong ex-servicemen the right to a British passport. I ask the Minister directly whether Her Majesty’s Government will urgently review their policy on that issue.

Moreover, I believe that we are at a crossroads. We are in a position where serious decisions must be taken. Britain has to decide whether we tolerate and simply accept China’s behaviour or whether we demonstrate that we are prepared fundamentally to reconsider what until now has been a positive bilateral relationship that we share with China.

The Home Secretary recently announced that 25,000 visas would be given free to Chinese nationals. Of course we must strengthen and embolden links between Britain and China, but it is now clear that China has the ability to behave in an irrational and confrontational manner, so such special arrangements must surely be brought into question.

Alternatively, China could, even at this stage, draw back from the brink, accept that Hong Kong is different and allow the people of that territory the right to make their own choices about their own future. It must be made clear that China cannot take British co-operation for granted. Britain is a strong nation—we have the sixth-largest economy in the world, and our trade with China is largely one-sided. So we must not be afraid to stand firm for our national interests and the interests of people who were part of our British family, whom we have pledged to support, simply in fear of potential trade repercussions.

Britain cannot and will not be bullied. If China is not prepared to honour the spirit of the 1984 joint declaration, Britain will have no choice but to conclude that the hand of friendship and trust that Margaret Thatcher held out to China 30 years ago has been betrayed.

14:48

[Keith Vaz (Leicester East) (Lab)]

It is a pleasure to follow the passionate and robust speech of the hon. Member for Romford (Andrew Rosindell), which showed the concern among Members of all parties, and all Select Committees, about how the Foreign Affairs Committee has been treated. All but two members of that Committee have spoken in today’s debate, and I am sure that others will want to catch your eye, Mr Speaker. I wanted to speak after they had had the opportunity to express their views, and I am grateful to you for calling me.

I am also grateful to you, Mr Speaker, for granting this Standing Order No. 24 debate to allow the House to discuss this matter. I have been in the House for 27 years, and I know that the standard response of most occupants of the Chair when right hon. and hon. Members ask for such a debate is to say no. You said yes, which must have come as a surprise to the Chair of the Foreign Affairs Committee. It is the only time this year that an emergency debate has been granted, and although I had originally planned to come to the Chamber and speak on the Second Reading of the Counter-Terrorism and Security Bill, I can well understand your desire to allow the House to debate the Hong Kong issue, which is urgent and important and should take precedence over all other activities and debates in the House. Thank you for allowing the debate.

I pay tribute to the Chair of the Foreign Affairs Committee, who is normally a quiet, modest individual. It is rare for him to use the House as a platform to prosecute a case on behalf of his Committee. The last time he did so, as I recall, was over the attempts to close the World Service. He led the debate on that and there was a successful outcome. I hope he will have similar success, having asked for the present debate. We wait with bated breath to see what the Chinese Government decide to do.

This is an important debate not just for the Foreign Affairs Committee, but for every Committee of the House. I hope the Foreign Office will take note of it. I do not think the House understands the huge amount of time and effort invested by the Clerks and the Chairs of Committees when we decide to travel abroad. I chair the Home Affairs Committee. By its nature it does not do much travelling, although we will be going as far as Calais on Friday; I hope very much that we will be allowed to enter Calais when we get there.

[Mike Gapes]

Are you going by lorry?

[Keith Vaz]

No, by Eurostar.

A huge amount of time is spent organising such travel by a Committee, involving everyone from the Clerk of the Committee and the operation manager in the Clerks Department to a more senior Clerk, and ending up with the most senior Clerk of all—some of the most senior Clerks sit in front of you, Mr Speaker. Then the bid comes back to the Chair because the cost is too high, and the bid has to be re-entered and we have to change all the arrangements. A huge amount of work must have gone into the bid by the Chair of the Select Committee and it must have taken months to put the arrangements together. To be knocked back at the end for no good reason is extremely depressing and distressing for members of the Committee.

I want to ensure that we set a precedent today and that we send out a strong and powerful message, not so much to the Chinese Government—I am not so arrogant as to believe that the entire Chinese Cabinet is sitting in Beijing watching the proceedings of the House today—but to the Foreign Office. That message was put powerfully from either side of the House, most recently by the hon. Member for Romford. When we arrange these visits, we always do so with the encouragement and support of the Foreign Office. We cannot, as Committees of this House, organise a visit to a place such as China, or even to Calais, without informing the posts abroad. In our case, in France, we have a first-class ambassador, Peter Ricketts, who has organised an incredible programme in the space of just 10 days.

I do not know our current ambassador to Beijing, but I am sure that embassy staff would have put as much effort into the proposed programme of the Foreign Affairs Committee. It is not enough for the Government to say, “Well, this is Parliament, and Parliament is separate from the Government, and you must do this on your own.” I am not sure, because I did not read the press release put out by the Foreign Office, if the word “regrettable” was used. That would probably be quite serious, in the context of the words used by the Foreign Office. It is so long since I have been there that I have forgotten the hierarchy of words and which term constitutes a condemnation from the British Foreign Office, but to the public it would not seem strong enough.

A Select Committee of this House wishes to visit a country that is a friendly country and that has been visited so many times by Ministers—I think more Ministers have visited China than any other country in the world, apart from India. The Prime Minister has been there recently, encouraging many, many Chinese students to come to this country. We have 80,000 Chinese students studying in the United Kingdom. The number of applications from China since the Prime Minister’s visit has shot up, whereas the number of applications from India has gone down. Chinese graduate students make up 25% of all graduates from overseas studying in our country.

We want a very clear response from the Foreign Office. I hope the Minister can use his best endeavours to try to persuade the Chinese Government to change their mind. After all, is the Committee going to interfere with the proper running of the Chinese Government? I have looked down the list of members of the Committee. I see no known troublemakers on the list. I see three distinguished knights of the realm among the 11 members. Even my hon. Friend the Member for Ilford South (Mike Gapes), who might be considered a troublemaker, is actually a very reasonable man. He was trying to buy a slice of cake in the Tea Room earlier on. I persuaded him to take a banana so that he would not get diabetes and he readily agreed to do so. Members of the Committee are all Members who would want to make a positive contribution through their visit.

Select Committee visits are not about taking the flag and planting it in the middle of the biggest piazza in Hong Kong. That is not what they are about. The aim of such visits is fact-finding. The Committee is going to find out the facts about what is happening so that members can come back and write their report. That is what all Select Committees do when we travel. It is important that Select Committees travel, even though we are sometimes criticised by the press, and the number of visits and the amount of money spent are publicised. The best way to find out what is happening abroad is to go there, speak to people and ask them what is happening.

We were criticised because the Home Affairs Committee was conducting an inquiry into drugs and we decided to go to Colombia. One or two of the usual suspects in the Press Gallery wanted to know what the Home Affairs Committee was doing in Colombia. We were going to look at cocaine production and see what the Colombian Government were doing to try to stop cocaine entering Europe. Some 60% of all the cocaine that enters Europe comes into the United Kingdom. That is why we went, and our report was so much better for our doing so. That is all the Foreign Affairs Committee wants to do.

On behalf of my Committee and, I hope, other Committees and other Chairs, I can say that the Chair of the Foreign Affairs Committee and its members have our full support. Even at this late stage, I hope the Minister can persuade the Chinese Government, through the ambassador or by other means, to change their mind and allow the Committee to visit so that it can produce a good, fair and balanced report, as the Foreign Affairs Committee has always done.

14:57

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

Thank you, Mr Speaker, for allowing me to catch your eye in this important debate. I am pleased to follow the right hon. Member for Leicester East (Keith Vaz)—I would almost call him my right hon. Friend; he just happens to be in a different party.

We have had a sober and reflective debate and I want to add one or two points.

Like my hon. Friend the Member for Romford (Andrew Rosindell), I first visited Hong Kong just before the handover in 1996. I met Chris Patten, the then Governor, and his two dogs, and we had a cordial and productive meeting. I am chairman of the Conservative Friends of the Chinese and I chair Chinese breakfasts in the House and have had frequent high-level meetings with Chinese diplomats. I therefore have some insight into the Chinese character and psyche.

I have recently been conducting a quiet campaign to see whether we can align British visas with Schengen visas, not in any way weakening the British biometric visa system but aligning the two systems so that a family coming from China does not have to undergo two separate applications. I have been patiently negotiating with the Home Secretary over this issue. If we could resolve it we would get many more Chinese visitors to this country.

The right hon. Member for Leicester East mentioned that there were 80,000 Chinese students in this country. I believe the figure is over 100,000. They represent one of the largest student blocs from any country. That shows how welcoming we are to Chinese students in this country. The right hon. Gentleman mentioned the number of Chinese post-graduates in the UK. Some of those students are at the university in my constituency, the Royal Agricultural university. The principal says that he likes Chinese students because not only do they pay well, but they work hard and teach his other students how to work. There is a lot of synergy.

At the time of the handover I discovered that the wise negotiations between Deng Xiaoping and Margaret Thatcher in 1984 recognised a number of things, including that the way of life in Hong Kong should broadly be preserved for the next 50 years. The Chinese and the National People’s Congress adopted their own system of Basic Law, and my right hon. Friend the Chair of the Foreign Affairs Committee cited the most important article, article 45. It is worth repeating that because it is the Chinese Government’s Basic Law—they adopted it, not us, and it states:

“The ultimate aim is the selection of the Chief Executive by universal suffrage upon nomination by a broadly representative nominating committee in accordance with democratic procedures.”

That was the Chinese Government’s own process.

Since then, there has been progress in Hong Kong. I visited just a fortnight ago, and I walked down Nathan road and saw the protesters. I have been there many times since 1996, and each time I cannot help marvelling at its progress. It is an amazingly dynamic place. Progress has been made on the democratic front with the election of Legislative Council members and there is now the aspiration to elect the new Chief Executive by universal suffrage, going from a nomination committee first of 400 people, then 800, and now 1,200. The process is going in the right direction.

Hong Kong is an important national asset for this country, and others, and the links between the economies and people of Hong Kong and the UK are huge. Some 40% of British investment in Asia goes directly to Hong Kong. That was just under £36 billion at the end of 2012, and there was £7 billion of trade with Hong Kong last year. As I know from my discussions with them, British companies are always welcome in Hong Kong and it is a fantastic place to do business. Indeed, it is reckoned to be the second easiest place to do business, whereas this country is in 8th place. One reason for that is that Hong Kong has a system of low bureaucracy, low taxation and an independent judiciary based on English law. Around 130 British companies have regional bases in Hong Kong, and many countries around the world see it through that light. Hong Kong is the economic jewel in China’s crown, and it is in China’s interest to ensure that it continues to prosper. Large businesses and capital are very portable in the 21st century and could easily move to other centres such as Singapore if financiers and other businessmen feel that the governance of Hong Kong is not going in the right direction. The importance of Hong Kong could diminish, and other competitors will overtake it.

[Mark Pawsey]

My hon. Friend is speaking about the attraction of Hong Kong for young people who want to set up a business and the business environment there, but in the 1984 declaration Hong Kong was intended to be “one country” with “two systems”. Does my hon. Friend believe that that principle is exemplified by the actions of the Chinese authorities in this instance?

[Geoffrey Clifton-Brown]

My hon. Friend makes an interesting intervention and I will address his point directly in a minute.

It is unfortunate that we have to debate this situation, following the news that the Foreign Affairs Committee will not be granted entry to Hong Kong. As I said, I visited Hong Kong recently and paid visits to Mong Kok. I walked down Nathan road where I saw relatively few tents and protesters, and numbers were beginning to dwindle. Whether by coincidence or not, the situation seems to have flared up again in the last few days in conjunction with the proposed Foreign Affairs Committee visit.

Demonstrations have throughout been largely peaceful and without interference from the Hong Kong or Chinese authorities, and it is a tribute to both sides that they have managed to keep the protests within peaceful bounds. I absolutely understand the aims and aspirations of the demonstrators. My neighbour and hon. Friend the Member for Gloucester (Richard Graham) secured a debate on Hong Kong in Westminster Hall the other day, in which I outlined the disparity between those in Hong Kong who have, and those who have not. People are finding it difficult to get on the housing ladder or get decent jobs, and in some cases it is difficult to get a decent education. The authorities in Hong Kong need to address those issues. It is not that Hong Kong is not dynamic or successful economically, it is that it is not benefiting everybody. There is a class—particularly some of the younger people—who are being left behind, and that is leading to demonstrations. People want a greater say in the way Hong Kong is run.

Wanting to ensure that relations between this country and China were not damaged, I met high-level representatives from the Chinese embassy in Parliament last week. I tried hard to convey to them a number of things, including that we have a separation of powers in this country, that right hon. and hon. Members of the House are representatives of the people and able to do exactly what they like and can form Committees to investigate matters around the world, and that my right hon. Friend’s Foreign Affairs Committee is entitled to investigate any matter in which the British Government have an interest, including Hong Kong.

I think I failed in that part of my discussions. It is hard for those in a Government run by a communist system, who say to representatives in the Communist party, “You will not do that”, to understand that Members of Her Majesty’s Government—I welcome the Minister to his place—cannot simply say to a Committee or Member of the House, “You will not do this; you will do that.”

[Richard Graham]

On that point, has my hon. Friend heard members of the Chinese embassy say, as they have said to me, that ultimately the Government decide what happens in Parliament, in Committees and all-party groups, and even in Buckingham palace?

[Geoffrey Clifton-Brown]

My hon. Friend is right—that is exactly what they think and they have conveyed that to me. Somehow we must keep on repeating the facts about how this country operates.

[Mr Speaker]

Order. Pursuant to what the hon. Gentleman has just said, perhaps it would be helpful for the Chinese to realise, by being told in terms, that the decision to grant this debate is the decision of the Chair, and it is not interfered with or commented on, or the subject of representations by the Government one way or the other. I cannot be clearer than that. I know that, the hon. Member for The Cotswolds (Geoffrey Clifton-Brown) knows that, the Chair of the Foreign Affairs Committee and the House know that, and it is time the Chinese Government knew it as well.

[Richard Graham]

On a point of order, Mr Speaker. Would be in order for the Speaker’s Office to contact the Chinese embassy to put it straight on what the protocols are?

[Mr Speaker]

I think I have just done so, but I am happy to communicate as necessary with the Chinese, if the House would think that helpful.

[Geoffrey Clifton-Brown]

I was trying to explain to the Chinese authorities how our parliamentary system works, and your intervention, Mr Speaker, has more than amply demonstrated the true situation.

The second point that I tried to explain to senior Chinese representatives was that if they allowed my right hon. Friend’s Committee to visit Hong Kong, not only would the Committee see for itself that the demonstrations were dwindling, more importantly it would see the huge economic success and dynamism of Hong Kong. As the hon. Member for Ilford South (Mike Gapes) said, there is nothing like seeing with one’s own eyes the true situation on the ground, and it is more likely that the Committee’s report would have been more favourable to Hong Kong. By taking this action, the whole situation has been whipped up and made far worse.

The third thing I said was that it would be better if we could keep the whole matter as low key as possible, try to avoid it getting into the press, and discuss it behind the scenes and consider what measures could be taken to avoid the problem.

We are in limbo, but the hon. Member for Ayr, Carrick and Cumnock (Sandra Osborne) hit the nail on the head when she said that the best thing—I suggested this to the Chinese authorities last week—would be for the visit to be postponed. I know I am slightly at odds with the House, but I have a hypothetical situation to put to it. Suppose the Chinese authorities were about to send a high-level delegation to the UK at the height of severe riots in Chinatown, with buildings being burned down. What if we said, “Please don’t send your delegation now, but we are very happy to see you in a month or two”? I believe from my discussions that, if quiet diplomacy goes on behind the scenes, the Foreign Affairs Committee will be allowed to visit Hong Kong some time next year. That might be after the end of the inquiry—I do not know—but it is important that quiet diplomacy takes place.

I was heavily involved in the Dalai Lama affair. In the light of that, I have learned—one needs to learn in life. Had the Dalai Lama situation been handled very slightly differently, our relationship with the Chinese would have been much easier in the past two or three years.

It is important that we have good relations with the Chinese. I believe a member of the royal family will visit China next year, and we have high-level leadership visits next year both in this country and in China. Rather than meeting each other head to head, we are more likely to achieve what we want to achieve in Hong Kong through good relationships. There has been substantial progress.

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

rose—

[Geoffrey Clifton-Brown]

I was about to wind up, but my hon. Friend is itching to get in.

[Daniel Kawczynski]

I pay tribute to my hon. Friend’s work in the international department of the Conservative party, which he has done for a long time. He has told us what he said to the Chinese delegation, but will he allude to its response?

[Geoffrey Clifton-Brown]

I am more than happy to do so, because I conveyed the response to my right hon. Friend the Member for Croydon South (Sir Richard Ottaway). The Chinese delegation said in terms that, if the Foreign Affairs Committee were to press ahead with its visit, it would be barred entry. When I went to Hong Kong a fortnight ago, I did not need a visa. Therefore, the Chinese have to take other action to bar entry, such as stopping my right hon. Friend and the Committee from getting on the plane. Bearing that in mind, this is an extremely serious occurrence. The Chinese made it clear that they understood that, because they said that there would be harm to British-Sino relations. That is the response I conveyed to my right hon. Friend. He rightly took his own decision after taking counsel from his Committee—they decided to press ahead with the visit. That is the state of affairs.

I say to the House that we should have quiet diplomacy. It is in everybody’s interest that this country has excellent relations with China. That does not mean to say that we should not criticise China quietly behind the scenes over human rights, animal rights and various aspects that we do not like. I would say this to the Chinese: please follow the dictum of Deng Xiaoping; please be an internationalist country; and please do not start closing in and becoming isolationist—one or two trends have emerged in the past two months since the change of leadership. After all, Deng Xiaoping said that a flow of water must be carefully channelled. A former Prime Minister of this country said we should trust the people. I say this to the Chinese authorities: let us trust the people of Hong Kong; let us keep Hong Kong the jewel that it is; and let us include everybody in that growth and increasing prosperity.

15:13

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

Thank you, Mr Speaker, for granting this important debate. As a member of the Foreign Affairs Committee, I congratulate our Chairman on the measured and yet resolute manner in which he has dealt with the matter. Hon. Members on both sides of the House will acknowledge that.

I am almost tail-end Charlie, and time is beginning to press, so I will dwell on a couple of points that have not been covered in the debate. It has been said outside this place that China does not fully understand how our system works, and that the Foreign Affairs Committee is basically a part of the Government. Hon. Members know that that is clearly not the case. If anybody seriously believes that any member of the Committee is a mouthpiece for the Government, they have no idea how Parliament works. They need take only a cursory glance at what happens in Parliament to get a more accurate picture. That leads me to suggest that the situation is not a result of negligence, an accident or a simple misunderstanding, but a result of a fundamental wish to ignore the facts. A country with the size, wealth and intelligence of China cannot fail to understand that the Foreign Affairs Committee is not the mouthpiece of the Government or involved in the Government in any way. Our job is to scrutinise. Some of us take our responsibilities more seriously than others, but there is no doubt about the Committee’s role.

There are repercussions for both parties when a treaty is not respected. There is no doubt that the Sino-British joint declaration is an international agreement. It is a treaty and was lodged with the UN—if there is any doubt, the treaty number is 23391. This is therefore not about interfering or meddling in the internal affairs of China. China very willingly signed up to the agreement and is a counterparty. Let us be clear about what the agreement says. It mentions Hong Kong having a high degree of autonomy, and rights, freedoms and lifestyles remaining unchanged for 50 years. The fact that China has reneged on that treaty—there is no other way of putting it—has repercussions for both sides, because it takes two to sign a treaty.

As has been mentioned, the repercussions for the Chinese will be profound, although perhaps not immediate. What message does the situation send to the world? What message does it send to Taiwan? If China wants Taiwan to return to the fold, this is not the way to go about it. Not only reneging on the treaty but stopping us entering Hong Kong shows weakness rather than strength. China has shot itself in the foot.

There are also repercussions for the UK. I suggest that the UK has a moral responsibility to do what it can to ensure that China respects its commitments not only to the treaty and the spirit of that treaty, but to everything that follows. That includes allowing access by democratic bodies to visit Hong Kong.

The term “honourable” is an old-fashioned one, but I believe it remains a strong word, as I hope most hon. Members do. We should live our lives by it. We risk being dishonourable as a country if we do not hold China to its commitments. We know that the joint declaration lacks an arbitration clause and that, therefore, little process or recourse is allowed to check China if it transgresses, but there is little doubt what the treaty tries to achieve.

It is clear that China has reneged on the treaty, but we have that honourable responsibility to hold China to account. We must be clear that there is a danger that the term “dishonourable” could be applied if we are not careful. We need to look carefully at the UK Government’s response to events so far. Hong Kong 2020, a pro-democracy group, has described the UK as “sleeping on watch” with regard to the weakness of its response to the Chinese treaty transgressions. Human Rights Watch believes our response has been “shamefully weak” so far. I put it to my right hon. Friend the Minister of State that we need to look at how we are responding to China’s treaty transgressions. The treaty places obligations on both sides, and we must do what we can to ensure that we hold true to our end of the treaty and act in a totally honourable way.

[Sir Gerald Howarth (Aldershot) (Con)]

My son is in Hong Kong working as a banker. He tells me pretty much the same thing: that there is concern that the British Government have perhaps been slower than they might have been. I accept the sensitivities around this issue, but is it not the case that the demonstrators have behaved in the most extraordinarily restrained fashion? I believe they have put up huge notices saying, “We apologise for the inconvenience caused” and cleaned up all the litter. This is not the sort of demonstration we are accustomed to in the western world.

[Mr Baron]

Absolutely right—my hon. Friend makes an excellent point. This is not mob rule. The protests could not be described as any flagrant breach of the law. People are exercising the rights that we ourselves suggested they should have when we signed the Sino-British joint declaration. The action they have taken so far has been totally within the declaration, yet the Chinese have transgressed on that agreement. Our response has been very weak indeed. I would like to hear more from the Minister on what the British Government will do to make it clear that the Chinese entered the agreement in good faith, as did the British, and that all rights, responsibilities and freedoms under the law should be upheld by the Chinese authorities.

Just as China has shot itself in the foot by taking the action it has so far—not just with regard to banning the Committee from entering Hong Kong, but in transgressing on the agreement—we, too, have a downside risk in this affair. By not protesting enough—by not holding the Chinese Government to account and by continuing to be somewhat weak in our response in defence of the protesters who are operating within the law and the terms of the agreement—our reputation will suffer. We must not allow that to happen. This House must not allow it to happen. I look forward to hearing from the Minister how the British Government intend to toughen up their response to this outrage.

15:23

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

I echo my hon. Friend the Member for Basildon and Billericay (Mr Baron) in thanking you, Mr Speaker, for granting this emergency debate, and in commending the Chairman of the Foreign Affairs Committee, my right hon. Friend the Member for Croydon South (Sir Richard Ottaway), for the way he has behaved throughout this inquiry, and as I am sure he will continue to do as it moves forward.

The Chinese Government have said that my Committee has no business being in Hong Kong. They are wrong on three counts, the first of which is legal. The United Kingdom has a treaty obligation to the people of Hong Kong, to which the People’s Republic of China is a signatory. We have heard that over and over in this debate. This is very much our business. The Sino-British joint declaration of 1984 is lodged with the UN and commits China to maintaining the Hong Kong way of life until 2047. Until the treaty expires, we have a duty to ensure that the Chinese are meeting their obligations, both to us as co-signatories and to the people of Hong Kong as beneficiaries of the joint declaration. China has shown that it is committed to upholding the international order and that it places great emphasis on the principle of national sovereignty. By undermining a treaty, signed with another sovereign state and registered with the UN, it is undermining the very international order to which it claims to belong.

Secondly, the Chinese Government are wrong to exclude us, because it is counter-productive to do so. My Committee is not just looking at the joint declaration, but considering UK-Hong Kong relations as a whole. The UK and Hong Kong have extremely close ties of history, culture and commerce. Other hon. Members have spoken eloquently on the first two, so I will confine my remarks to the third. We are Hong Kong’s eleventh biggest trading partner. More than 560 British companies operate there and the region accounts for 35% of all UK investment in Asia—although my hon. Friend the Member for The Cotswolds (Geoffrey Clifton-Brown) has told me that the figure is 40%. This year, a record number of Hong Kong students—more than 4,000—received offers to study at British universities. As a major financial centre, we co-operate closely on global financial governance. Of course, we both have a key role to play in helping China internationalise its currency, the renminbi. This is a time when we should be deepening and strengthening that relationship, because all parties have so much to gain. We should be over there, meeting businesses and universities, asking what more we can do to increase our mutual prosperity. Instead, we are here, debating whether China is ready to be a responsible member of the international community.

The third reason why the ban is wrong is that it is misguided. The Chinese Government have decided that they do not like our conclusions before we have even had a chance to make them. That means that they will not have a chance to tell their side of the story. It also means they will not see a House of Commons Select Committee in action. That is a shame, because if the Chinese saw what we do, they might find that our Committee system had a useful application within their own Government. Independent committees, with the power to hold public bodies to account, could go a long way towards tackling China’s corruption problems, for example. Rather than a lecture, however, the inquiry could have been a genuine exchange of ideas.

We in this House have a lot to learn from Hong Kong and what can be achieved when backing business and getting behind free markets. Hong Kong is one of the best examples we have that Britain has been a force for good in the world. We signed the joint declaration because we believe in the rule of law, free speech and individual rights. With the important exception of representative democracy, Hong Kong is a living embodiment of our values. For that reason alone, we have a clear and legitimate interest in the future of the region. We do not seek to tell the Chinese how to run their country, but rather to ensure that they are holding up their side of an international agreement, an agreement which has been of great benefit to them. If we cannot be there in person, what we can do is send a clear message to the people of Hong Kong that this House believes in their aspirations, shares their commitment to liberty and the law, and calls on their Government to safeguard their way of life in line with their international obligations.

15:27

[Kerry McCarthy (Bristol East) (Lab)]

We are grateful to you, Mr Speaker, for granting this debate, and grateful to the right hon. Member for Croydon South (Sir Richard Ottaway) for making the application for the debate under Standing Order No. 24.

As we have heard, the House is united in its concern—indeed, its unhappiness—that the Foreign Affairs Committee has been prevented from visiting Hong Kong. We have also heard that the hon. Member for Gloucester (Richard Graham) was denied a visa for the all-party group on China’s visit to Shanghai, causing that visit to be abandoned at short notice too. The hon. Member for The Cotswolds (Geoffrey Clifton-Brown), among others, referred to what he described as the Dalai Lama affair, when there was concern about the Prime Minister being refused a visa to visit China after his meeting with the Dalai Lama.

Speakers in today’s debate have also raised wider concerns. My right hon. Friend the Member for Cynon Valley (Ann Clwyd) highlighted issues relating to press freedom and the repression of journalists, and spoke of the problems she encountered on an earlier visit to China. My hon. Friend the Member for Ilford South (Mike Gapes), a long-serving member of the Select Committee, and my hon. Friend the Member for Ayr, Carrick and Cumnock (Sandra Osborne) spoke about their attempts to visit Taiwan. My right hon. Friend the Member for Manchester, Gorton (Sir Gerald Kaufman) spoke of his apprehension about the future of Hong Kong when he was there at the time of the handover, and the hon. Member for Gloucester told us of his substantial experience of working in the region and on fostering Sino-British relations, including by setting up a charity. The hon. Member for Cheltenham (Martin Horwood) focused on how we should not let our desire to trade with China, and the importance of China as a potential trading partner, deter us from raising other issues, such as human rights, animal welfare and wildlife crime.

Select Committees are an integral part of our parliamentary democracy. The FAC’s reports are always informative and make an invaluable contribution to the scrutiny of the Foreign Office, and as the Chair detailed, overseas visits are an important part of the Committee’s work in that they offer a greater insight into the countries being visited and the opportunity to foster bilateral relations. As stressed by several speakers, independence is a fundamental feature of Select Committees. It is not for the Government or the Opposition to seek to interfere with their inquiries or determine with whom they can or should meet—or indeed where they should visit.

Neither is it for other Governments to intervene or seek to ward off Committee members. Over the summer, I was therefore troubled to read the letters from the Hong Kong Government, the Chinese foreign affairs committee and His Excellency the Ambassador explicitly requesting that the Committee cease its inquiry and intimating there would be serious consequences for UK-China relations if it did not do so. The ambassador’s letter warned that the Committee’s inquiry

“will ultimately harm the interests of Britain”,

and the letter from the Chinese equivalent of the FAC advised Committee members to

“bear in mind the larger picture of China-UK relations”.

We value a strong relationship with China, as several speakers have said, and we do not believe that the independent decisions of the FAC should affect this. It is important to emphasise, as others have done, that its inquiry is in no way intended to interfere in the sovereign affairs of China. The operation of “one country, two systems” and the implementation of Hong Kong’s Basic Law are matters for the Governments of China and the Special Administrative Region of Hong Kong, as I made clear to the Vice-Minister in the International Department of the Communist party of China’s Central Committee when I met him this morning. The Committee’s interest in Hong Kong does not signify any latent imperialist tendencies on the UK’s part. I think we are all very aware, when we take an interest in other countries’ affairs, particularly where there is a direct British colonial legacy, that we should avoid giving such an impression.

We should also recognise that the joint declaration specifically affords Hong Kong

“a high degree of autonomy”.

However, it is a matter for the UK, working with China, to ensure the continued success of the Sino-British joint declaration signed by our two countries 30 years ago, and it is also a matter for the UK to honour the joint commitments it made to the people of Hong Kong to facilitate the handover in 1997. Accordingly, the FAC decided to scrutinise the Foreign Office’s implementation of and respect for the agreement.

The joint declaration states:

“Rights and freedoms, including those of the person, of speech, of the press, of assembly, of association, of travel, of movement, of correspondence, of strike, of choice of occupation, of academic research and of religious belief will be ensured by law in the Hong Kong Special Administrative Region.”

As a signatory to a binding, international treaty, the UK must speak up if the agreement is not fully upheld. It is deeply troubling to hear that the Chair of the Committee was told that China regarded the joint declaration as no longer in force and as having ended at the time of the handover. We all noted the contribution from the former Foreign Secretary, who made it clear that this was not the intention when the agreement was entered into.

We have all seen the scenes in Hong Kong: the clashes between protestors and the Hong Kong police and the authorities’ use of force. The protestors have sought discussions with the Chinese authorities and a resolution to the different views within Hong Kong on the best form of universal suffrage there. Reports indicate that their negotiating team has previously been prevented from travelling to China for talks—another worrying sign—and it should be noted that the joint declaration refers to freedom of travel being ensured by law in the Hong Kong Special Administrative Region.

Following the violence in recent days, one of the student leaders has now announced a hunger strike in an attempt to secure talks with the Hong Kong Government. We believe this situation can only be resolved by dialogue involving the Chinese Government, the Hong Kong authorities and representatives of the pro-democracy campaigners. However, while the response is a matter for the Chinese and Hong Kong Governments, it is appropriate to raise our concerns. Members would be concerned by reports of pepper spray, batons and water hoses being used, whether in a city in this country or anywhere else around the world.

As the Opposition, we would also be calling on the Government to speak with their overseas counterparts if we had concerns that basic human rights were not being upheld, as we do now. The UK’s responsibilities under the joint declaration add to the imperative to do so. The Government were right to seek assurances from China regarding the police response over the past few months, and we hope that the Minister will continue to do so.

Parliament also has a particular interest, because we now know that the tear gas was supplied by British companies. Indeed, it seems that the Committees on Arms Export Controls have elicited a change in policy—or perhaps just a confused policy—from the Government. The Business Secretary wrote to the Chair of the Committees on 28 October to confirm that he had accepted the advice of the Foreign Secretary that the use of tear gas

“was an uncharacteristic response... not indicative of a wider pattern of behaviour”.

No licences were revoked or suspended. It has been reported, however, that the Business Secretary told the Committees yesterday that he would “urgently seek advice” on the issue. It is not clear why it has taken so long for him to investigate such a serious matter. We hope he will take it very seriously indeed.

The Government have a role in offering their support for dialogue and calling for the basic freedoms and rights of all people to be respected and protected. It is vital that Hong Kong can preserve these fundamental rights, and everyone in the House hopes to see all the parties in China and Hong Kong reach agreement on universal suffrage and deliver Hong Kong’s vision for democracy. That would be the most fitting way to celebrate 20 years of Hong Kong’s high degree of autonomy within China in 2017. Well before then, however, we hope that the FAC will have the opportunity to renew and strengthen its friendly ties with the FAC of the National People’s Congress and that its members will have the opportunity to visit.

As the Prime Minister’s official spokesman has said, the travel ban

“only seeks to amplify concerns about the situation in Hong Kong, rather than diminishing concerns”.

We are all disturbed by these latest developments. UK-China relations are best served and strengthened by a spirit of transparency and co-operation, which I hope the Foreign Office will be able to promote. It would be hugely disappointing if the Committee’s inquiry was allowed to affect the bilateral relationship between the UK and China, and I hope the Minister will use his influence to bring this matter to a speedy and satisfactory resolution—one which allows the Committee to continue its inquiry unimpeded. I hope to visit Hong Kong in the near future.

15:37

[The Minister of State, Foreign and Commonwealth Office (Mr Hugo Swire)]

I thank you, Mr Speaker, for granting this important debate, which no doubt will be watched closely here in London, in Beijing and in Hong Kong. The fact that this is only the fifth debate under Standing Order No. 24 to be granted in this Parliament shows the seriousness with which the House takes this issue and demonstrates a clear and strongly held concern that stretches right across party lines.

I share that concern. The decision to refuse the members of the Foreign Affairs Committee—all of whom, bar one, have been present this afternoon—entry into Hong Kong as part of their inquiry is wholly unjustified, counter-productive and, as the hon. Member for Motherwell and Wishaw (Mr Roy) and others reminded us, unprecedented. It is also not consistent with the positive trend in UK-China relations over the past year and does not reflect the fact that the UK and China have considerable shared interests in respect of Hong Kong. Nor is it in the spirit of the Sino-British joint declaration. As my right hon. Friend the Member for Croydon South (Sir Richard Ottaway), the Chair of the FAC, said, the declaration was signed in good faith in 1984 by the then Prime Minister Margaret Thatcher and the then Chinese Premier Zhao Ziyang. It is lodged at the United Nations and still remains central to Hong Kong’s rights and freedoms.

The Chinese Government have made clear their opposition to the FAC inquiry on the basis of what they say is “interference” in China’s internal affairs. I am aware of the efforts of the FAC to establish a constructive dialogue with the Chinese embassy and the Hong Kong Trade Office, and the British Government have repeatedly explained to the Chinese authorities that Parliament is completely independent of the Government. As the hon. Member for Ayr, Carrick and Cumnock (Sandra Osborne) rightly reminded us, the Foreign Affairs Select Committee, as a Committee of this House, is also rightly completely independent of Government. The FAC inquiry scrutinised UK Government policy towards Hong Kong. Indeed, that is clear from its title: “The UK’s relations with Hong Kong: 30 years after the Joint Declaration”. It is the Committee’s role in our democracy to hold the Government to account.

I have made clear to the Chinese ambassador on more than one occasion that the Government would not and could not try to prevent the Committee’s inquiry or its visit to Hong Kong. There are numerous precedents for the FAC visiting Hong Kong—in 1998, 2000 and 2006, each time engaging with the broad range of society in a wholly constructive spirit. When I met Guo Yezhou, Vice-Minister of the Communist party international liaison department yesterday morning, I repeated my concerns. I pointed out again that barring the Committee from Hong Kong is unjustified and, as the Prime Minister has said, “counter-productive”. What is more, it runs counter to the positive trajectory in our bilateral relations over the past year, which have witnessed a welcome increase in dialogue, mutual respect and understanding.

It is perfectly reasonable for Members of Parliament to want to visit Hong Kong as they scrutinise the British Government’s policy and quite properly hold us to account over it. Barring them from going simply makes it more difficult for them to hear from all sides in order to make an accurate and fair assessment—a point well made by my right hon. and learned Friend the Member for Kensington (Sir Malcolm Rifkind), a former Foreign Secretary.

In a little over two weeks, we will mark the 30th anniversary of the Sino-British joint declaration on the question of Hong Kong, which set out arrangements for the transfer of sovereignty over Hong Kong to China under the “one country, two systems” principle. It is, as its name implies, a joint declaration to which both parties made a solemn commitment. As a co-signatory, the United Kingdom has both a legal interest and a moral obligation in the monitoring and implementation of that treaty—a treaty that enshrined a high degree of autonomy and basic rights and freedoms for the people of Hong Kong. These are at the heart of Hong Kong’s way of life, and it is vital that they are fully upheld.

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

One thing the Minister might like to mention to the Chinese ambassador, or for that matter to any Chinese delegation on Hong Kong, is that in the early ’70s when China was not popular with the Nixon Administration, Coventry city council made visits to China and started to link up with the country, which resulted in trade deals.

[Mr Swire]

Indeed, and there are many Members who have dedicated their parliamentary careers to furthering relations with China.

[Richard Graham]

My right hon. Friend mentioned that this year is the 30th anniversary of the signing of the joint declaration. What plans may there be to celebrate this important event?

[Mr Swire]

I shall look to my hon. Friend for inspiration as we look forward to commemorating the signing in good faith of that declaration. I am sure he will be full of ideas.

As I said in the Westminster Hall debate on Hong Kong on 22 October, which my hon. Friend the Member for Gloucester (Richard Graham) secured, we strongly believe that it is the “autonomy, rights and freedoms” guaranteed by the joint declaration that underpin Hong Kong’s success. He is right, by the way, to raise the regrettable incident recently when he, too, was refused a visa, this time to China itself, and when he and other members of the UK-China Leadership Forum felt they had no choice but to postpone their to visit Shanghai for talks with the Communist party. We again made it clear to the Chinese authorities our view that refusing visas is no kind of solution. It is clearly counter-productive that these talks have not now taken place. The important thing is to pursue dialogue on issues, even where we disagree.

I would equally emphasise my understanding that the FAC inquiry is focused on the promotion of economic, cultural and educational links, too. My hon. Friend the Member for Reading West (Alok Sharma) stressed the importance of the economy and trading links. Last year, Hong Kong was the UK’s second largest export market in Asia Pacific, and Hong Kong was the UK’s 12th largest investor. In addition, Hong Kong is an important factor in the UK’s dynamic relationship with mainland China—for instance, as Hong Kong and London work together to develop the financial service infrastructure for the internationalisation of the renminbi. These links are beneficial to the UK, China and Hong Kong, and absolutely deserve the attention of the FAC.

My hon. Friend the Member for Romford (Andrew Rosindell) raised the issue of former British servicemen in Hong Kong, and we will look into this, although it is more properly a matter for the Home Department. It is the case, however, that around 250,000 British citizens live in Hong Kong, and a further 3.4 million people—approximately half the population—hold the status of British nationals overseas, giving us a clear consular interest.

For these reasons, I can assure the House and those following this debate that the Government have been emphasising the context and importance of the inquiry at senior levels through official channels in Beijing, Hong Kong and London. I am grateful for the suggestion made in the press today by the hon. Member for Bristol East (Kerry McCarthy) that the Foreign Office should be engaging with our Chinese counterparts on this matter. I can tell her and others who raise it that that is precisely what we have been doing: our ambassador in Beijing, our consul-general in Hong Kong, myself and the Foreign Secretary have done so repeatedly.

[Mr Baron]

Will the Minister give way?

[Mr Swire]

I must make progress, if my hon. Friend will forgive me.

We cannot, of course, ignore the context of political protests in Hong Kong, which have now been going on for over two months. We have publicly welcomed the Hong Kong police’s stated commitment to exercise tolerance and restraint. As I have said before, it is essential that Hong Kong citizens’ fundamental rights and freedoms, including of assembly and demonstration, continue to be respected, as guaranteed by the Sino-British joint declaration. We have consistently called on all sides to ensure that the demonstrations are peaceful and in accordance with the law.

The issue at the centre of the protests is of course Hong Kong’s democracy, and specifically the arrangements for election of the Chief Executive in 2017. We believe that a transition to universal suffrage will safeguard Hong Kong’s future prosperity and stability, in line with the Basic Law and the aspirations of the people of Hong Kong. That is why we continue to encourage the Governments of Hong Kong and China to find a consensus that offers a genuine choice to the people of Hong Kong and gives them a real stake in the 2017 election for the Chief Executive, and then in due course for the elections to the Legislative Council in 2020.

Of course, the detailed arrangements for reform are for the people of Hong Kong, and the Governments of Hong Kong and the People’s Republic of China to determine. The United Kingdom has consistently called on all parties to engage in dialogue within the parameters of the August decision by the National People’s Congress. We believe that there is scope for a consensus that will deliver a meaningful advance for democracy in Hong Kong, consistent with the commitments that have been made.

As Premier Li himself has said, we have an “indispensable” relationship with China. We have many shared interests, from our bilateral trade to our co-operation on global challenges such as Ebola. It is important for that relationship to be conducted with mutual understanding and respect based on open and honest dialogue, and we will continue our endeavours to that end.

15:49

[Sir Richard Ottaway]

I am grateful to the House for the debate. Four things have emerged from it. First, the joint declaration is still alive and well, and this Parliament will continue to take an interest in it. Secondly, it is the view of Parliament that China is the loser in this situation, from both a commercial and a strategic point of view. Thirdly, although bilateral relations will suffer in the short term, we are quite capable of rebuilding them; the question for the Chinese is, are they? The Foreign Affairs Committee remains willing to visit Hong Kong if agreement can be reached. Fourthly, the hon. Member Member for Motherwell and Wishaw (Mr Roy) posed a number of questions in his speech, and we should be grateful if the Minister could give us answers to them in writing.

Finally, Mr Speaker, I thank you for your unfailing support for this process. The winner in it is Parliament, and the quality of the debate has justified your decision.

Question put and agreed to.

Resolved,

That this House has considered the ban by China on the Foreign Affairs Committee visit to Hong Kong.

Counter-Terrorism and Security Bill

Tuesday 2nd December 2014 Commons Chamber

Second Reading

15:50

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

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

The threat that we face from terrorism is serious, and it is growing. The Security Service believes that since the attacks on 7 July 2005, about 40 terrorist plots have been disrupted. It is thanks to the hard work and dedication of our security and intelligence services, the police, and our allies overseas that almost all those plots have been thwarted, and countless lives have been saved. I am sure that the whole House will want to join me in paying tribute to those men and women, whose work so often goes unreported and unrecognised as they strive to keep us safe.

Today, however, the threat from terrorism is becoming ever-more complex and diverse. Last year we saw the first terrorist-related deaths in Great Britain since 2005: Fusilier Lee Rigby was brutally murdered by Islamist extremists, and Mohammed Saleem, an 82-year-old Muslim from Birmingham, was stabbed to death by a far-right extremist who then tried to bomb mosques in Walsall, Wolverhampton and Tipton.

ISIL and its western fighters represent a clear danger. This summer, partly in response to that threat, the independent joint terrorism analysis centre raised the threat level for international terrorism from “substantial” to “severe”. That means that JTAC considers a terrorist attack to be “highly likely”. We face the very serious prospect that British nationals who have fought with terrorist groups in Syria and Iraq will seek to radicalise others, or carry out attacks here. We have already seen the appalling murder of four civilians outside the Jewish Museum in Brussels, and the recent attack on the Canadian Parliament was a shocking reminder that we are all targets for these terrorist organisations and those whom they inspire.

However, ISIL is not the only threat that we face. There are further threats related to Islamist extremism, and there are threats from far-right and Northern Ireland-related terrorism, among others. Just last week, a report from the Intelligence and Security Committee on the intelligence relating to the murder of Lee Rigby highlighted the real, and potentially very dangerous, capability gaps that exist for the security and intelligence agencies—and when our security and intelligence agencies tell us that the threat that we face is now more dangerous than at any time before or since 9/11, we must act.

We are engaged in a struggle against terrorism which is being fought on many fronts and in many forms, so our response must be comprehensive, coherent and effective. Since April 2010, in Great Britain, more than 800 people have been arrested for terrorism-related offences, more than 210 have been charged, and more than 140 have been successfully prosecuted. Only last week, Mohammed and Hamza Nawaz became the first Britons to be jailed for terrorist training in Syria, and we have outlawed groups linked to terrorist attacks in Syria, Iraq and Egypt.

We have protected the budgets for counter-terrorism policing and for the security and intelligence agencies, and, as the Prime Minister announced last week, we have made an additional £130 million available over the next two years to help us tackle the increasing terrorist threat. We have replaced control orders, which had been whittled down by the courts, with terrorism prevention and investigation measures, or TPIMs. We have strengthened the criteria governing the use of the royal prerogative, which allows the Government to cancel British passports to disrupt the travel of people planning to engage in terrorist-related activity overseas. I have used that enhanced power 29 times since April 2013.

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

The Home Secretary referred to the Government decision to replace control orders. One of the decisions she made when she did that was to remove the relocation powers within control orders. That was a decision of choice, not one forced on her by the courts. This Bill reverses that judgment to get rid of relocation powers. Will she now admit that it was a grave error to put the public at increased risk as a result of a political deal within the coalition, and that the fact that she is now legislating to reverse those changes shows that it was a grave error of judgment?

[Mrs May]

I would say two things to the right hon. Gentleman. First, as I have just been outlining, we face today a different threat background from that we faced in recent years. Also, if he looks carefully at the Bill, he will see that we are not simply reintroducing a power of relocation into the TPIMs. We have taken on board the recommendations of the independent reviewer of counter-terrorism legislation, David Anderson QC, who did propose the reintroduction of relocation, but who also proposed a number of other changes to TPIMs, which we are introducing, including the raising of the threshold for the introduction of TPIMs from “reasonable suspicion” to “the balance of probabilities”.

We have worked hard to make it easier to get rid of undesirable foreign nationals, including terrorists and terror suspects. We have changed the law to make it clear to the courts that article 8 of the European convention on human rights, the right to respect for a family life, is qualified and not an absolute right. We have significantly reformed the Prevent pillar of the counter-terrorism strategy so that it is tackles the ideology behind the threat, and we are working with the internet industry to remove terrorist material hosted in the UK or overseas. Since December last year, the counter-terrorism internet referral unit has secured the removal of over 46,000 items that encouraged or glorified acts of terrorism.

The emergency legislation that Parliament approved in the summer ensured that two important capabilities, communications data and interception, were not eroded further. Both of these capabilities are absolutely crucial to the investigation of those involved in terrorist activity.

[Derek Twigg (Halton) (Lab)]

Is the right hon. Lady satisfied that we now have enough interception powers, or not?

[Mrs May]

If the hon. Gentleman is referring to the power to issue warrants on companies who offer services in the UK but who are based overseas or the holding of whose data is based overseas, we addressed precisely that issue in the legislation introduced in the Data Retention and Investigatory Powers Act 2014 that this House put through under emergency powers in the summer.

So we are taking action at home, but we must also have a comprehensive strategy to defeat these extremists abroad. This involves using all the resources at our disposal: humanitarian efforts to help those displaced by ISIL’s onslaught—efforts that Britain is already leading—and diplomatic efforts to engage the widest possible coalition of countries in the region as part of this international effort.

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

I am glad the Home Secretary just mentioned tackling the terrorists’ narrative. Does she have in mind in that respect not only taking down extremist postings on the internet, for example, but promoting a counter-narrative that exposes the fallacies of the terrorist narrative?

[Mrs May]

I commend my hon. Friend because he has been resolute in promoting this aspect of dealing with terrorism for some time, and he is absolutely right that it is important to promote that counter-narrative, but I think it is also important to do something else: to take a further step back and look at the whole issue of extremism more generally. That is why we have been very clear, and the work of the Prime Minister’s extremism taskforce is very clear, that we need to introduce an extremism strategy, and the Home Office is currently leading on that. It will be a cross-Government piece of work, but the Home Office is leading on that and the strategy is being developed.

[Keith Vaz (Leicester East) (Lab)]

The Home Secretary is right to say that progress has been made during the past year, but will she help me on one point? Where a British citizen has been found to be involved in terrorist-related activities in a foreign country, is it right that we will no longer seek their return to this country, and that they will have to be punished and dealt with abroad?

[Mrs May]

No. Under the temporary exclusion power in the Bill, when someone who has been involved in terrorist-related activities—that will be considered on a case-by-case basis—returns home to the UK, that will happen on what I would describe as our terms. In other words, that return will be managed so that appropriate action can be taken here in the United Kingdom.

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

The Home Secretary has just said that we need a counter-extremism strategy. May I ask her when that might be available? I remind her that the Department for Communities and Local Government was charged with producing just such a strategy three years ago, but it has not done so. My big concern about the Bill is that it appears to have a gaping hole at its centre. We have a lot about action on individuals who are radicalised, but it has little to say about countering the narrative and countering extremism in general.

[Mrs May]

As I have indicated, the Home Office is leading on the extremism strategy. We will be working on that, but the right hon. Lady should not expect to see anything published before the end of the year. On the wider issue, when we came into power, we made two changes to the way in which Prevent operated, and we did so for a good reason. First, we ensured that Prevent looked not only at violent extremism but at non-violent extremism. Secondly, we saw that in some communities, work being done on community integration under a Prevent heading was being rejected or arousing suspicion. People saw that the work was being done under a counter-terrorism heading and thought that it was about spying on individuals, when it was actually more about community integration. That is why we separated the integration work and gave it to the Department for Communities and Local Government, which has been undertaking that work.

[Chris Bryant (Rhondda) (Lab)]

May I press the Home Secretary about the temporary exclusion orders that she wants to have the power to exact? They would, in effect, result in the exile—albeit short term and temporary—of British citizens, in many cases, to other countries. All history suggests that such action further radicalises people and makes them more dangerous enemies to this country. If we do so without any judicial process, as she advocates in the Bill, is there not a real danger that we will put ourselves in more danger rather than less?

[Mrs May]

I caution the hon. Gentleman about the terminology that he uses in relation to the power. He has used the term “exile”, but the proposal is not about saying that people cannot return. It is possible for people to return, but they will return on the basis that we have set out in the Bill. Their return will be managed and we will have some control over it.

In response to an earlier intervention, I said that the change that we were making to the threshold for TPIMs was from “reasonable suspicion” to “the balance of probabilities”. The change is actually from “reasonable belief” to “the balance of probabilities”. I apologise to the House for having given the wrong impression about that.

Aside from the diplomatic efforts that we must make and the work we must do with those in the region, I have always been clear that we would keep our terrorism laws and capabilities under review. As the House knows, the first and most important duty of Government is the protection and security of their citizens. As my right hon. Friend the Prime Minister made clear to the House on 1 September, we must ensure that our law enforcement and intelligence agencies have the powers that they need to keep us safe. The Bill will strengthen our existing powers so that we can disrupt people’s ability to travel abroad to fight, as well as their ability to return to the country. It will enhance our ability to monitor and control the actions of those in the UK who pose a threat and it will help to combat the underlying ideology that feeds, supports and sanctions terrorism.

Part 1 of the Bill will provide the police and MI5 with two new powers that will significantly enhance their ability to restrict the travel of those suspected of seeking to engage in terrorism-related activity overseas. First, it will provide the police, or a designated Border Force officer under their direction, with the power to seize a passport at ports. That will allow them to disrupt the travel of individuals, and give operational agencies the time to investigate and assess whether long-term disruptive action should be taken, on a case-by-case basis. Such action could be taken through, for example, criminal prosecution; the exercise of the royal prerogative to refuse or cancel a passport; a TPIM; deprivation of citizenship; or deportation. The use of this power will be properly safeguarded through a range of measures, including the need for a senior officer’s approval; an additional check by a more senior officer independent of the investigation after 72 hours; an initial retention period of 14 days for the passport; and a court review of the ongoing need to retain a passport, where a judge can allow more time for the police to continue their investigation—up to 30 days. There will also be a statutory code of practice for officers on how to exercise the power, and we intend to publish this code for consultation shortly.

Secondly, the Bill will create a power to issue temporary exclusion orders, to which I have already referred in response to interventions. These orders can temporarily disrupt the return to the UK of a British citizen suspected of involvement in terrorist activity abroad, ensuring that when individuals do return, it is done in a manner that we control. This power will cancel an individual’s travel documents and add them to watch lists, notifying the UK if they attempt to travel. Depending on the individual case, it may also require the individual to comply with certain activities once they are back in the UK. There has been a lot of interest in the nature of this power, as we have seen already this afternoon, but I want to reassure the House that it will not render an individual stateless. All those concerned will have the right, which their citizenship guarantees, to return to the UK. But when they do, it will be on our terms—quite possibly in the company of a police officer. Once they are back in the UK, the police will interview them, in order to explore their activities abroad, and can make them subject to further requirements. We are discussing this proposal with other Governments, in order to agree how it will work best in practice. So far these discussions have been constructive, and this proposal is consistent with all our existing international legal obligations.

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

Will the Home Secretary clarify something so that we can understand the implications of the legislation? What are the circumstances in which she would not grant a permit to return?

[Mrs May]

These matters will be looked at on a case-by-case basis. The point is to be able to manage the return of individuals who have been involved in terrorist-related activity abroad, and we are discussing how the power would be operated practically with a number of other Governments, as I have said. The point is to ensure that when somebody returns, they do so under control and on our terms.

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

I confess that I am by no means convinced of the legality of what is being suggested under temporary exclusion orders, which will, no doubt, be known in due course as TEOs, given our enthusiasm for acronyms. What is the position of someone who declines to accept conditions of return and who is not subject to deportation by the country in which they temporarily find themselves? Are they not de facto stateless in such circumstances?

[Mrs May]

They are not de facto stateless. It is open to somebody to return, but the proposal is that they would be returning on our basis, under documents that would be issued by the Government, and therefore we would be aware of their return, be able to manage that return and, as I have indicated, take appropriate action when they return to the UK. So this is not rendering people stateless.

[Mr Dominic Grieve (Beaconsfield) (Con)]

I understand the system that my right hon. Friend is putting in place of managed return, but what is not clear in the Bill is the system that will be present to enable that managed return requirement to be challenged. I wonder whether she can help the House on that point. It seems to me that there must be a mechanism by which a person who is told that they have to return in a particular way can challenge it on their return to this country, and do so expeditiously, if it is not to be an unwarranted interference with their rights.

[Mrs May]

There will be a form of challenge available to an individual under judicial review. We will also have to notify the individual that action is being taken against them, so that they are aware that the measure is being put in place.

[Yasmin Qureshi (Bolton South East) (Lab)]

On a point that was made earlier, if an individual has the right to challenge how they are managed—I think the right hon. Lady said that it would be by means of judicial review—can we ensure that they have legal aid to do that?

[Mrs May]

As the hon. Lady knows, the Government have made a number of changes to legal aid, and we are looking at the position in relation to that particular issue on these new measures.

[Mr Kenneth Clarke (Rushcliffe) (Con)]

The Home Secretary is being very reasonable to a lot of Members who wish to get in. Let us take the position of someone subject to one of these orders who finds themselves in a friendly country such as Turkey or France. If the Governments of Turkey or France request the British Government to take that person back into the United Kingdom without going through the deportation process, is it not a fact that we would really feel under an obligation to take back such a person?

[Mrs May]

If someone were in a country such as France or Turkey, and the Government of that country requested us to take back the individual, it would be possible in those circumstances for us to act in exactly the way that we are proposing in the Bill. I am talking about managing the return of that individual. For example, they might be accompanied by a police officer who would go out to bring them back into the UK, and various actions might be taken on their return. There might be an interview with the police, the introduction of a TPIM notice or a requirement to go on a Prevent programme. Those sorts of measures could be judged on a case-by-case basis.

[Richard Fuller (Bedford) (Con)]

rose—

[Mrs May]

I will give way one further time, and then I will move on to part 2 of the Bill.

[Richard Fuller]

As someone who wants to protect civil liberties in this country, may I warmly welcome this measure from the Home Secretary? There are many in my constituency who would like to see people in this situation given a one-way ticket and not allowed back into the country, so she has found a balance. Does she not think that one benefit of this piece of legislation is that it empowers mothers and fathers of impressionable teenagers to have a clear conversation with them about the consequences of their mind being warped by people on the internet trying to induce them to acts of terrorism overseas?

[Mrs May]

My hon. Friend makes an interesting point. That is part of the process of trying to disrupt people from travelling to Syria and Iraq or from being active with terrorist groups. We want to get the message across to young people that if they want to help people in Syria there are better ways of doing it than crossing into the country. They can, for example, assist the humanitarian efforts in the UK to support refugees from Syria, which can be of genuine support to people in Syria. In recent weeks, I have met some very impressive women from Muslim communities around the United Kingdom. They have been working with young people and their families, developing a number of programmes, which relay the message, “Don’t go to Syria.” The #MakingAStand campaign and the work that is being done by the charity FAST are about helping families to ensure that young people get the message that they should not be going over to Syria.

Part 2 of the Bill relates to TPIMs. It gives effect to the recommendations of David Anderson QC, the independent reviewer of terrorism legislation, in his most recent report on TPIMs. The changes to the Terrorism Prevention and Investigation Measures Act 2011 will provide the police and MI5 with valuable new capabilities. That includes allowing TPIM subjects to be relocated to different parts of the country. We will also be raising the legal test for imposing a TPIM—

[Hazel Blears]

rose—

[Mrs May]

May I make a little more progress and then give way to the right hon. Lady?

[Hazel Blears]

It is on that point.

[Mrs May]

Will the right hon. Lady at least allow me to get to the end of the paragraph before I give way?

The changes to the TPIM Act include allowing TPIM subjects to be relocated, but we will also be raising the legal test, as I said earlier in response to an intervention, and narrowing the definition of terrorism-related activity in relation to this power. David Anderson is clear that there is no need to turn the clock back to the previous Government’s control orders regime, and I agree with him.

[Hazel Blears]

I have a simple inquiry, as I genuinely do not understand why the clause as drafted states that if someone is going to be relocated 190 miles away that can be imposed by the Home Secretary, but if they are going to be relocated 205 miles away it has to be a matter for agreement. I do not understand the logic in that provision at all.

[Mrs May]

We looked carefully at the proposals made by David Anderson and I believe he suggested that there should be a geographical limit for the relocation.

Part 3 seeks to amend the Data Retention and Investigatory Powers Act 2014 to help us identify who in the real world is using an internet protocol, or IP, address at a given point in time. Changes in how service providers build their networks, made to enable them to cope with the increased demand for their services, mean that these identifiers are often shared between a great number of users. Companies generally have no business purpose for keeping a log of who used each address at a given point in time, which means that it is often not possible for law enforcement agencies to identify who sent or received a message. The provisions will allow us to require the key UK companies to retain the necessary information to enable them to identify the users of their services. That will provide vital additional capability to law enforcement in investigating a broad range of serious crime, including terrorism.

The Bill deals only with limited fields of data relating to a specific technical problem. Without the full package of data types included in the draft Communications Data Bill, published in 2012, there will still be gaps in law enforcement and intelligence agencies’ capabilities. For example, the child exploitation and online protection command in the NCA might still struggle to identify those who have been accessing servers hosting illegal images of child sex abuse. That is an issue to which Parliament will need to return after the general election, subject to the outcome of David Anderson’s statutory review of investigatory powers.

Part 4 contains measures on aviation, shipping and rail security. They will help us to stop terrorists and those involved or suspected of being involved in terrorism-related activity from travelling to and from the UK, and will mitigate the threat of an attack on those transport services. The proposals cover three main areas. First, they will require carriers to be able to receive instructions not to carry a specific passenger in a way that is compatible with our border systems. Secondly, they will establish a new framework for authority to carry schemes, commonly known as our no-fly arrangements, that will extend to new categories of British nationals and apply to outbound travel. Finally, they will enhance our ability to require carriers operating to the UK to undertake specified security measures, including the screening of passengers. Carriers that will not comply with security requirements will not be allowed to operate into the UK.

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

I am puzzled that the Home Secretary has just said that carriers will be required to provide some sort of security screening. How will they do that? Would that not involve additional cost?

[Mrs May]

Obviously, carriers in most parts of the world are already required to carry out some security screening. From time to time, we say that if someone is going to fly into the United Kingdom we wish them to adopt additional methods of security screening. At the moment, this is done on a voluntary basis, but the Bill takes that and puts it into statute, which will enable us to stop someone from flying into the UK if they do not adopt the security procedures.

Part 5 addresses the issue of those at serious risk of succumbing to radicalisation and terrorism. We propose a new statutory duty on certain bodies, including local authorities, the police, prisons, probation services, schools, colleges and universities, including in the private sector, to have due regard to the need to prevent people from being drawn into terrorism. That will ensure that Prevent strategy activity is consistent across the country and in all those bodies whose staff work on the front line with those at risk from radicalisation. The detail of how the duty should be fulfilled will be set out in statutory guidance, which we will publish shortly.

I hope that the House will find it helpful if I take the opportunity to clarify one specific issue that the guidance will address, which is the need to create an appropriate and sensible balance between the need to prevent people from being drawn into terrorism and the existing duty on universities to promote freedom of speech. I believe that our universities, with their commitment to free speech and the advancement of knowledge, represent one of our most important safeguards against extremist views and ideologies. There is no contradiction between promoting freedom of speech and taking account of the interests and well-being of students, staff and the wider community. That is already subject to guidance issued by both Universities UK and the National Union of Students. We must ensure that poisonous, divisive ideologies are not allowed to promulgate.

[Yasmin Qureshi]

The right hon. Lady mentioned universities and other institutions being sent statutory guidelines on Prevent. Why do the guidelines have to be in statutory format? Why cannot they just be sent, knowing that any responsible institution will follow them without their having to have legal force behind them?

[Mrs May]

The purpose of putting Prevent on a statutory basis is twofold. First, the statutory duty will now relate to a number of front-line institutions, as I have said, such as local authorities and universities. There is already some guidance that Universities UK and the National Union of Students apply to universities, as I have indicated. However, I believe it is important to ensure that there is that statutory duty on bodies such as universities, and the Bill allows the Secretary of State to make a direction to one of the bodies covered by that power if they are failing to exercise their statutory duty.

[Yvette Cooper]

Will the Home Secretary clarify what she means by that? Could she envisage a Home Secretary making a direction in order to tell a university or institution not to allow somebody to speak?

[Mrs May]

That is not the intention of the duty; its intention is to ensure that the university or institution has in place a policy on matters relating to extremism. For example, they might have a general policy that they apply in relation to extremist speakers coming to their institution. The purpose of the power to make a direction in the Bill is to ensure that they are doing something like that, taking their statutory duty seriously. It is for those institutions that are failing to comply with the statutory duty that that particular power has been put into the Bill.

Alongside that statutory requirement in relation to Prevent, the Bill will also provide a statutory basis for the existing programmes for those at risk of being drawn into terrorism, known as Channel in England and Wales. That will enshrine existing good practice and help to ensure consistency across all local areas.

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

As the Home Secretary knows, the Prevent strategy falls within the competence of Scottish Ministers under the devolved settlement. Scottish Ministers have their own priorities and agenda when it comes to delivering those measures in Scotland. I know that there have been discussions with Home Office Ministers about excluding Scotland from that power, so that we can have the opportunity to consult our public bodies properly. Is she open to that type of approach, so that Scotland could be included in the measures later, when we have had an opportunity to work out what it would actually mean for our public bodies and their responsibilities?

[Mrs May]

I point out to the hon. Gentleman that counter-terrorism is obviously a reserved matter. He might like to know that his point relates to the very next paragraph I was about to read. It is the Government’s hope and intention that these provisions should also apply to Scotland. We are consulting Ministers in the devolved Administrations about the practical implications of our proposals, and obviously those discussions will continue with the Scottish Government.

Part 6 includes amendments to two provisions in the Terrorism Act 2000. First, it will put it beyond doubt that UK insurance firms cannot reimburse payments made to terrorists in response to ransom demands. To put that in context, the UN estimates that ransom payments raised up to £28 million for ISIL over the past 12 months alone. We need to avoid any uncertainty on that issue.

Secondly, the Bill will clarify our counter-terrorism port and border controls in relation to where goods may be examined and the examination of goods comprising items of post. That is an important part of our counter-terrorism port and border controls and the disruption of those engaged in terrorism. We must ensure that the law is clear and that the police can fulfil their duties.

The powers in the Bill are essential, but they should be used only where it is necessary and proportionate to do so. Their use will be stringently safeguarded, including through suitable legal thresholds and judicial oversight of certain measures. Part 7 of the Bill will also allow for the creation of a privacy and civil liberties board to support the important work of David Anderson QC, the independent reviewer of terrorism legislation.

Finally, the Bill includes a provision to ensure that challenges to refusals of applications for British overseas territories citizenship can be heard before the Special Immigration Appeals Commission, so that sensitive material can be protected. This simply addresses an anomaly in existing legislation.

I have stressed the urgency and importance of this legislation. This is not a knee-jerk reaction but a considered, targeted approach that ensures that our law enforcement and intelligence agencies have the powers they need to respond to the heightened threat to our national security. Substantial work, in consultation with the police and MI5, has gone into drafting the clauses. Where the measures impact on those in the private sector or civil society, we have consulted the relevant bodies.

I am grateful to the shadow Home Secretary for engaging in constructive discussions on the timetable for the Bill.

[Michael Ellis (Northampton North) (Con)]

I commend the Home Secretary for the measures in this Bill, which are reasonable measures that accord with our international obligations. Does she agree, though, that there is a gap as regards communications data? I hope that we will be able to include that area in future measures as soon as possible, because although the measures she is announcing go some way towards improving national security and meet our national obligations, we must address that gap.

[Mrs May]

My hon. Friend is right that we continue to have a gap in relation to communications data. Although the Bill introduces the question of IP address resolution, it will still be the case that data that previously would have been available to our law enforcement agencies and security services will not be available in future. I am very clear that Parliament will have to return to this issue after the general election.

The need to introduce this legislation today is pressing, but I do not propose to rush it through Parliament in a matter of days or weeks. Parliament must have adequate time to consider these measures. Expediting the Bill’s passage over the next couple of months will enable that to take place, while allowing us to seek approval for crucial secondary legislation prior to the election. This will ensure that proper scrutiny can take place, and that the police and agencies are able to use these new capabilities without undue delay.

We are in the midst of a generational struggle against a deadly terrorist ideology. That is why we have brought this legislation forward at the earliest opportunity, and we will seek its swift passage through Parliament. We must ensure that the police and the security and intelligence agencies have all the legal powers and capabilities they need to stop people travelling to fight in Syria and Iraq, to tackle this terrorist threat, and to protect all the law-abiding citizens who believe in keeping the UK an open, free and tolerant nation. That is what this Bill will do, and I commend it to the House.

16:27

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

As the Home Secretary said, it is the responsibility of Government to protect the liberty and the security of our people, to protect our communities from extremism and terror threats, and to protect our liberty and our democratic values so that the terrorists and extremists do not win. At a time when the terror threat has grown, more action is needed to make sure that the police, the security agencies and other organisations have the powers that they need to protect us, but also to make sure that we have sensible safeguards in place—the right kinds of checks and balances to prevent abuse.

We will support this Bill because it responds to new and changing threats and also corrects some past mistakes, but we believe that amendments are needed in some areas to make the measures more effective or to ensure that sufficient checks and balances are in place to prevent powers from being abused and discredited, thus undermining the fight against extremism.

Last week’s Intelligence and Security Committee report on the murder of Fusilier Lee Rigby provided stark evidence of the serious challenges that our security services and police face in keeping us safe. It is a 24 hours-a-day, 365-days-a-year job, and every decision is loaded with doubt. Today we should pay tribute to their quiet stoicism and heroism. This year alone, the Metropolitan police has made 270 arrests following counter-terrorism investigations. Along with our agencies, it has disrupted several attack plots, including plots against those whose very job it is to protect our communities.

That job of protecting us all from terrorism has become increasingly difficult in the face of the growth of ISIL and its barbarous brand of terror. As the Home Secretary said, the Government believe that about 500 people have travelled to Syria, with about half having already returned to the UK. However, this problem is not unique to Britain. The United Nations estimates that foreign fighters from 80 countries may be in the region, mainly fighting for ISIL. France estimates that 900 French nationals are fighting in the region. Belgium, Sweden, Denmark and Finland have all seen significant numbers of their citizens go to fight. Many countries across Europe are introducing new policies and legislation to address the problem and we should work with them as they do so. We have also seen, through the awful propaganda videos, what people have become involved in, including beheadings, kidnaps and brutalising whole communities in Syria and Iraq.

Of course, a foreign policy response is required to defeat ISIL in the region and to strengthen the Governments who will have to fight them. A humanitarian response is also needed to try to save the lives of communities in the path—or, worse, the wake—of ISIL’s advance. The Home Secretary’s policy of taking only 90 of the most vulnerable refugees from Syria, in parallel with the UN programme, is shameful. Other countries are doing far more, and she was urged to do far more as well. She has the opportunity at next week’s Geneva conference to change her approach, and I urge her to do so.

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

Does not the right hon. Lady accept that Britain is one of the leading donors to the provision of humanitarian relief to Syria, and will she not celebrate that fact?

[Yvette Cooper]

The Government have rightly provided a very strong response in the region and support for those who are fleeing the conflict. Members on both sides of the House have supported the Government in doing so and call on them to continue to do so. Twelve months ago, however, Members on both sides of the House also called on the Government to do more to help the most vulnerable Syrian refugees who struggle to cope in the camps, and I do not believe that the Government are doing what they undertook to do 12 months ago.

[Chris Bryant]

There are now literally millions of refugees in Lebanon and children are being born there who are effectively stateless. That is not a recipe for a peaceful middle east, is it?

[Yvette Cooper]

My hon. Friend is right to say that the huge stresses and strains in the region will have long-term consequences. That is why we need to do our bit with our humanitarian response and recognise the long-term security consequences both in the region and here in Britain.

Let me turn to the Bill’s measures and how they respond to the challenge we face. More needs to be done to prevent young people from being radicalised or drawn into extremism in the first place. The Home Secretary has said that she wants to strengthen the Prevent programme, which we welcome, and we hope that putting it on a statutory footing will help do that. She will know, however, that getting the Prevent programme right is not simply about legislation. The programme has been narrowed over the past few years, which has led to criticism from the Intelligence and Security Committee, which noted in its report last week

“the relatively low priority (and funding) given to Prevent in the CONTEST programme as a whole”.

The Committee concluded:

“The scale of the problem”—

by which it meant the number of people travelling—

“indicates that the Government’s counter-radicalisation programmes are not working.”

We know that Prevent support for local community programmes has dropped from £17 million to less than £3 million over the past few years. Although the Home Secretary talked about the promotion of a counter-narrative, the evidence suggests that far less work is being done now than a few years ago to promote counter-narratives within communities.

[Hazel Blears]

Does my right hon. Friend share my concern that, although many of the Bill’s provisions are very welcome, including those relating to the panels and putting things on a statutory footing, it is couched in terms of individuals? It mentions individual referrals and individual plans, yet, in essence, challenging the narrative is a collective responsibility for all of us, not simply individuals.

[Yvette Cooper]

My right hon. Friend is right. She has great expertise in looking at the work of the Prevent programme, particularly the community and local work that was being done. This is a concern. The Government originally cut the number of local authorities receiving funding through the Prevent programme from 90 to 23. They have subsequently reinstated some of them, but only four out of the 30 councils that were tasked with delivering Prevent submitted evaluations to the Office for Security and Counter-terrorism last year.

The Home Secretary has talked many times—we have pressed her on this—about the fact that she has passed some of the Prevent work to the Department for Communities and Local Government, but it is of considerable concern to us that there is no evidence that it is doing significant work on it. The community-led programme to counter radicalisation simply does not seem to be strong or effective enough. Much more could be done even without legislation to improve the Prevent programme, and if the Government do not do their bit, all the legislation in the world will not make the programme effective.

[Keith Vaz]

Evidence suggests that the biggest pressure on young jihadists comes not from organisations, but from peer groups. What is missing is that we have not yet got into the DNA of trying to deal with peer group pressure. Does my right hon. Friend agree that we should direct more of the funding to such community organisations?

[Yvette Cooper]

My right hon. Friend makes a very powerful point. We should be honest about the fact that we do not know the perfect answers. This is a difficult area, and different things need to be tried. However, the current programmes are not addressing two significant challenges: peer group recruitment, which is clearly taking place in many areas, and social media, through which recruitment and radicalisation are taking place. Much more should be done to address those challenges, and community-led programmes might be considerably more effective than police-led or Government-led programmes in achieving results.

[Dr Julian Lewis]

I applaud the constructive tone of the right hon. Lady’s remarks so far. May I take her back to the intervention by the right hon. Member for Salford and Eccles (Hazel Blears)? Most of what is being discussed is still at community or even individual level, whereas we believe that something needs to be done at national level that is comparable to the efforts made to counter Nazism in the second world war and to counter communism during the cold war.

[Yvette Cooper]

I agree with the hon. Gentleman that more needs to be done at the national level. The Bill introduces a statutory duty on a series of organisations to do more, and those organisations should certainly work in partnership to prevent people from being drawn into extremism and terrorist activity. Given the points made by my right hon. Friend the Member for Salford and Eccles (Hazel Blears) about some of the gaps, particularly in relation to the Department for Communities and Local Government, there is a question about whether the duty should in fact extend to that Department, rather than simply to local organisations across the country.

In Committee, we will probe the Home Secretary further on what she intends to do with her power of direction. That is still unclear from the Bill, and it is unclear what she envisages putting in guidance. She said that guidance would be published alongside the Bill, but we have not yet seen it. I do not know whether it has already been published.

[Mrs May]

I have listened very carefully to what the shadow Home Secretary is saying about the Prevent programme. As I said earlier, one of the first things that the Government did when we considered the programme was to decide that it should no longer look simply at violent extremism, but at non-violent extremism as well. Does what she is saying mean that she agrees with the step that we took, and does she therefore accept that the previous Labour Government got it wrong in concentrating the Prevent programme only on violent extremism?

[Yvette Cooper]

It is absolutely right to look at both violent and non-violent extremism. If the Home Secretary has listened to what my right hon. Friend the Member for Salford and Eccles has said on the issue over many years, she will know that the previous Government’s work was about looking at both violent and non-violent extremism and at the process of radicalisation from beginning to end. The whole point of providing counter-narratives is to tackle non-violent as well as violent extremism.

It is unfortunate that the Home Secretary chose to narrow the programme in the way she did and handed over community-led Prevent programmes to the Department for Communities and Local Government, which simply did not pursue them. The police have done very good work, but narrowing Prevent to just a police-led programme means that it has simply not been effective, and there have also been considerable gaps in the programme.

On the Secretary of State’s power of direction, there will be questions not only about how she intends to use it, but about what safeguards will ensure that she does use that power inappropriately.

The next challenge is how to deal with those who have become radicalised and pose a serious threat. Wherever possible, those people should clearly be prosecuted and passed through our courts. We know that there are difficult cases in which that is not possible, but people still pose a serious terror threat. It will come as no surprise to the Home Secretary or the House that we welcome the return of the relocation powers. She told the House in 2011 that the removal of the relocation power was a deliberate and desirable part of TPIMs. She said:

“Forcible relocation will be ended”,

and individuals

“will have greater freedom to associate.”—[Official Report, 26 January 2011; Vol. 522, c. 308.]

The Home Secretary defended her decision on relocation after Ibrahim Magag absconded in a black cab on Boxing day in 2012 once his relocation order had been revoked. She said at the time:

“I am confident in the TPIM package that was available”.—[Official Report, 8 January 2013; Vol. 566, c. 165.]

She also defended her decision in 2013, when Mohammed Ahmed Mohamed fled in a burqa after his relocation order was revoked.

No powers are perfect, but it is significant that no terror suspect has absconded under a relocation order. The Home Secretary has said in the House that she made those changes because control orders were under threat in the courts and TPIMs were not. In fact, both the former and current independent reviewer of terrorism legislation have made it clear that relocation orders were never under threat in the courts. It was a policy decision that was taken by the Home Secretary and the coalition.

The truth is that TPIMs have not worked. Despite the increased terror threat, only one is in place at the moment and it relates to someone who has left prison. TPIMs simply do not contain enough powers to be useful for the agencies or the police, or to be worth the extra effort involved. The independent reviewer of terrorism legislation, David Anderson, concluded in his review:

“A power to relocate subjects away from their home areas would be of real practical assistance…in distancing subjects from their associates and reducing the risk of abscond. It would also facilitate monitoring, save money and could help restore faith in a TPIM regime that has withered on the vine.”

It is not because of the increased terror threat that the regime has withered on the vine; it is because the TPIM regime simply was not effective without the relocation orders that it needed.

[Pete Wishart]

I have not heard from either Front Bencher the two words “civil liberties”. Is it the right hon. Lady’s view that the measures we are discussing today will tilt the balance between civil liberties and security too far towards security and compromise some very important civil liberties?

[Yvette Cooper]

In fact, I talked about the importance of protecting both liberty and security when I opened my remarks. We need both in a democracy and it is the responsibility of Government to protect both. On TPIMs, I think that the Government were wrong to remove the relocation powers. They are important and effective, and it has been recommended that they should be restored by the independent reviewer of terrorism legislation, whose judgment has proved to be balanced and sensible on a series of issues. There are other areas where additional safeguards are needed, and I will come to them shortly.

[Richard Fuller]

The right hon. Lady will understand that there is some sensitivity on this issue, given the rather poor record of the last Labour Government on protecting civil liberties. For example, we had 90 days’ detention without trial and the imprisonment of children for immigration purposes only. Does she at least agree with the Home Secretary’s move to raise the threshold for when relocation can be imposed from reasonable belief to the balance of probabilities?

[Yvette Cooper]

I do support the proposals, because they came out of David Anderson’s report about changes to the TPIMs regime. He looked at the evidence and came up with sensible recommendations. However, I warn the hon. Gentleman against playing party politics on this issue, because that is what got the coalition into trouble in the first place. The reason the coalition removed relocation orders was that it wanted to make party political points, rather than look at the evidence. That is why it has had to do a U-turn: it has finally had to look at the evidence. I caution him about doing the same again.

[Mr McFadden]

The Home Secretary said in her speech both that we were engaged in a generational struggle and that the security situation had changed markedly in the past couple of years, justifying the U-turn that part 2 of the Bill represents. Are those statements not contradictory? It is true that we are engaged in a generational struggle. It would be better for the Home Secretary to apologise for the grave error of judgment that put the public at risk than to pretend that the situation has changed radically.

[Yvette Cooper]

My right hon. Friend is right that the threat level is the same now as it was when the Home Secretary came into office. There have been ongoing threats to our security and liberty for many years, and it was not increased threat that led either Ibrahim Magag or Mohammed Ahmed Mohamed to abscond when their relocation orders were revoked. It was the lack of a relocation order and the weakening of the counter-terrorism powers.

Counter-terrorism policy is always difficult. There will always be things that Governments find challenging, and there will be times when they get the balance wrong. However, we should look at the evidence together. The Home Secretary and the Government failed to look at the evidence about relocation powers, and they failed to listen to the advice of the security experts. They have had to do so now not because the security threat has changed but because TPIMs simply did not work. It is right that they should be strengthened now and that powers should be restored.

There are two other puzzling things about the Home Secretary’s measures on TPIMs. The first relates to the point that my right hon. Friend the Member for Salford and Eccles made about the 200-mile limit: what is the difference between someone being 205 miles away and someone being 195 miles away? More puzzling is the measure that the Government are introducing to prevent people on a TPIM from having access to a firearm. That seems extremely sensible—we would not want any terror suspect to have access to a firearm—but how could any of them have had such access before? That raises the question whether either the gun licensing regime or the TPIMs regime is considerably weaker than we thought. We hope that some clarity will be provided in Committee on why that measure is needed. We will clearly support it, but it is a puzzle that existing powers are not strong enough to ensure that that sensible restriction is in place.

The next challenge is how to deal with the new and growing problem of British citizens leaving to join the conflict overseas, where they may become involved in awful crimes and barbarism, be further radicalised and become a threat to this country. We need new measures to prevent people from going. Removing people’s passports through the royal prerogative is understandably not a swift process, and sometimes faster action is needed. If troubled parents ring the police because they are worried that a son or daughter has left to join ISIS and taken their passport with them, the police need to be able to move quickly. We therefore agree that temporary powers are needed.

The lack of judicial oversight is a concern. As the Bill stands, the police will be able to seize a passport based on their own judgment of reasonable suspicion, and there will be no judicial oversight for 14 days. Even then, a magistrate will look only at whether the police are continuing to investigate, not at whether there was reasonable suspicion in the first place. The power to seize a passport is important, but that means that it is also important that it is not abused.

[Mr Khalid Mahmood (Birmingham, Perry Barr) (Lab)]

Does my right hon. Friend believe that the apprehension of passports requires proper border agency staffing, which the Home Secretary has cut by 50%? She is now proposing to cut the police by 30,000 in the next period, which will make it extremely difficult for any of the actions set out in the Bill to be carried out.

[Yvette Cooper]

My hon. Friend makes a really important point. There are no proper exit checks in place across the country, and we need the staff to be able to do them. That is why we have made proposals for 1,000 additional border staff, which is the right thing to do to ensure that such checks are in place. There should also be checks and balances on the power to seize passports. It is important and necessary, but there should be further safeguards to ensure that it cannot be abused.

The next important measure in the Bill is temporary exclusion orders. There is a serious problem for the police and the agencies dealing with those returning from conflict, who may have committed awful crimes abroad and might pose a threat in Britain. More needs to be done to address that threat, which was why we called for TPIM powers to be strengthened and for the Channel programme to be made compulsory. There should be requirements on people returning, and I understand the Home Secretary wanting to manage people’s return, but it is still unclear exactly what the Government want to achieve through the new powers.

The Prime Minister has said:

“We are clear in principle that what we need is a targeted, discretionary power to allow us to exclude British nationals from the UK.”—[Official Report, 1 September 2014; Vol. 585, c. 26.]

However, it seems that that is not what the power in the Bill will do. If someone is served with an order and the host country decides to deport them anyway, Britain will co-operate and they will be returned. There is no power to exclude them. If they apply for a permit to return, the Home Secretary can refuse to grant one only if the suspect does not turn up to an interview. Presumably, that is an interview in the foreign country; otherwise, they would already be home. The suspect does not have to co-operate with the interview, only to turn up.

Thirdly, what I asked the Home Secretary under what circumstances she would refuse to grant a permit to return, she did not give a clear answer and gave the impression that even if the suspect did not turn up to the interview, a permit to return might still be granted. It appears, then, that there is still no power to exclude them, so this is not the power that the Prime Minister said he would introduce. It seems to be described as a temporary exclusion order simply to give the Prime Minister the headline that he wanted.

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

Temporary exclusion orders may be necessary—there are obvious dangers in people coming back, having been indoctrinated and wanting to commit crimes. There may be a strong possibility of that, but surely judicial oversight is needed so that if the Home Secretary takes such powers, they can be challenged in court. I trust that my right hon. Friend will take the opportunity in Committee to table appropriate amendments.

[Yvette Cooper]

More judicial oversight is needed in this area and we will certainly table amendments. It is also important to clarify what the powers are intended to achieve. It appears that they are not intended to achieve exclusion at all and have a very different intention.

[Chris Bryant]

My right hon. Friend is right to raise such queries. May I add two others that she might want to put to the Home Secretary? The first is what constitutes serving notice on somebody. Presumably this happens in another country. How is that notice to be served? How will somebody be deemed to be suitable to have that notice served on them? Secondly, at what point does the exclusion start? Is it before they get on an aeroplane or a boat to come to this country, or is it at they moment they arrive in this country? Once they are in this country, what happens to them? Are they effectively deported?

[Yvette Cooper]

Again, my hon. Friend raises important questions. The independent reviewer said that the policy was an announcement in search of a policy. It started with an announcement by the Prime Minister at a press conference. To be fair to the Home Office, it probably worked hard to try to turn it into some kind of sensible measure that might achieve something as part of the Government’s counter-terror policy but that could still have the label “temporary exclusion order” attached to it in order to keep the Prime Minister happy. The House needs to understand exactly what the Home Secretary’s intention now is. This is not a hugely responsible way to make counter-terror policy or for us all to be able to understand whether it gets the balance right between the powers and measures that are needed and the safeguards that are needed as well.

The Home Secretary has described this as a policy to manage return. The intention behind that is sensible, requiring people to co-operate with the police and security agencies and to attend Channel interviews if they have been involved with ISIL or have been in the region. That is important, but there are some practical questions about how the policy will work—first about co-operation with other countries, secondly about bureaucracy in the process, and thirdly about the safeguards and the judicial oversight.

What happens if a country does not want to co-operate? Have countries such as Turkey said that they will co-operate? Will they immediately deport people? Will they detain people at the airport? How will those orders be served and what will the response be?

[Sir Edward Garnier (Harborough) (Con)]

What are the right hon. Lady’s suggestions, therefore?

[Yvette Cooper]

There are some changes that could be made and we will table amendments to that effect, but we need to know from the Home Secretary what discussions have taken place with other countries. It is very hard for anybody in the House to propose appropriate amendments without knowing what discussions have taken place and what other countries intend to do in response. Will the measure work because other countries will co-operate, or will it struggle because other countries have said they will not co-operate?

[Sir Edward Garnier]

rose—

[Yvette Cooper]

I will give way to the hon. and learned Gentleman if he can tell me whether Turkey, for example, has said that it will co-operate.

[Sir Edward Garnier]

It may well be that the right hon. Lady is making a good argument, but I cannot judge that until she tells me what her position is.

[Yvette Cooper]

In which case perhaps the hon. and learned Member should stop intervening and let me get on and speak about the amendments.

[Mr Jim Cunningham]

One thing that has bedevilled these debates is that neither the Home Secretary nor anyone else has made it clear which countries are prepared to co-operate, particularly with Turkey which sends different signals.

[Yvette Cooper]

My hon. Friend makes an important point, and by the time the Bill gets to Committee, the House needs to know whether there have been discussions with other countries, how those countries will respond, and what the level of co-operation will be.

My second question concerns what happens if the Home Secretary wants someone to return and be required to co-operate with the Channel programme, but does not want to delay their return. At the moment it appears that the order must be served and a permit applied for, and then the Home Secretary has to issue a permit, potentially introducing delays during which someone might abscond again. Is there any way to place requirements on someone once they return, without having to go through that further bureaucratic process at the airport? It appears from the Bill as though the Home Secretary cannot compel people to go to appointments at the police station or to comply with the Channel programme unless she also introduces bureaucratic delays with the application for a permit at the foreign airport. It would be helpful to know whether she has the power to allow someone to swiftly board the plane and also to introduce those powers.

Thirdly, what are the safeguards to prevent abuse? At the moment, temporary exclusion orders can be imposed by the Home Secretary on the basis of reasonable suspicion. That could include ongoing requirements for someone to attend regular appointments, or perhaps even to report daily to the police for two years after their return. There is no ability to appeal when someone returns—for instance, if they have been involved in humanitarian work in the region—and if the orders are breached, the penalty is the same as for breaching a TPIM. I think the Home Secretary should consider that further, because for TPIMs a judicial process rightly has to be satisfied. For a temporary exclusion order there is no judicial oversight, yet penalties for breach are the same. We believe that the powers need to be debated in detail in Committee to ensure they are effective, cannot be abused, and involve appropriate oversight. In response to the question from my hon. Friend the Member for Walsall North (Mr Winnick), we will be tabling amendments on judicial oversight.

Finally, I wish to raise an issue familiar to the House which was included in the original Communications Data Bill. That Bill was far too widely drawn, but there was wide consensus on the need for action on IP addresses, which had the support of the Joint Committee that considered the Bill. IP addresses are created and assigned automatically. Some companies retain those data, but some do not or routinely allocate multiple IP addresses to lots of people. That means that if an abusive image of a child has been sent from a particular IP address, agencies can struggle to discover who that address belongs to or where the child may be being abused. The Opposition support the principle behind that change, although I am sure it will need detailed scrutiny to ensure that the legislation does what is intended. We must be clear that simply having the technical and legal capability to do things is not sufficient as long as, for example, there are huge delays in the National Crime Agency investigating child abuse cases and passing them on to local forces.

[Julian Smith]

I may have interrupted the right hon. Lady at the wrong point, but I would be grateful if she could outline Labour’s view on communications data more generally, and say what measures she would support as we introduce further changes.

[Yvette Cooper]

We said some time ago that we would support measures on IP addresses, and that the whole area needs to be looked at by the independent reviewer. That is why we called for an overall review of the Regulation of Investigatory Powers Act 2000 by David Anderson, and insisted on that being included in the Bill. It is right to allow him to provide expert evidence on the way that the police and agencies are having difficulty keeping up with changing technology, and on the scale of the additional safeguards needed. In all those areas, strong powers may be needed in some cases, but we also need strong checks and balances and proper oversight. I think there are areas where sufficient checks and balances are not currently in place.

More action is needed to deal with the serious threats resulting from the conflict in Syria and the rise of ISIL. That means preventing radicalisation and dealing with people who pose a threat. It means having the right foreign policy and action in the region, but it also means ensuring that our laws at home are effective and proportionate, and that they cannot be abused, so that we do not let extremists threaten our democratic values, the protection of our historical liberties and our security.

At the beginning of this Parliament, the Home Secretary and the Deputy Prime Minister were inclined to make grand, sweeping statements attacking previous Labour Governments, and to make strong party political claims about our counter-terror policy, be they about the Prevent strategy or control orders. The Opposition warned the Home Secretary and the Deputy Prime Minister that that was not wise, because counter-terror policy is not easy; it requires care and thought. All Governments will get things wrong, and all parties will get things wrong. The Opposition will therefore work with the Home Secretary. We agree with her on some things, but we do not think she has got it right yet on others, and amendments are needed. Parliament as a whole must be thoughtful and responsible, because our liberty and security depend on each other. We need both in a democracy to keep us safe.

17:00

[Mr Dominic Grieve (Beaconsfield) (Con)]

It is a pleasure to be able to participate in the debate. At the outset, I should say that I welcome my right hon. Friend the Home Secretary introducing the Bill. I entirely agree with her that the House needs continuously to address the challenge and threat that terrorism poses to us. Some people think that the threat is exaggerated, but from my time as Attorney-General—I had to see some of the background briefings, and sometimes to consider cases relating to individuals who had gone abroad, particularly to Syria and Iraq—I have no doubt that she is absolutely accurate in her description of the real threat they pose to us.

With that in mind, I do not intend to take up much of the House’s time on my broad welcome of the legislation. Although the House will want to look in detail at the proposals on TPIMs and data retention, which is undoubtedly important, and the measures on preventing people from being drawn into terrorism, there is no doubt in my mind that they make good sense.

However, I hope to take a little of the House’s time this evening to talk about chapter 2, on temporary exclusion from the United Kingdom; I have flagged up my concerns on how the House should best proceed on that in a question to my right hon. Friend the Prime Minister. It is a fundamental principle of the common law in this country that an individual, unconvicted—the presumption of innocence applies—should be free to reside in his own land. The principle of exile, as a judicial or even an administrative tool, has not been tolerated in this country since the late 17th century. It is certainly no part of our criminal justice panoply, and certainly not part of administrative provisions or powers given to the state.

[Chris Bryant]

Will the right hon. and learned Gentleman give way?

[Mr Grieve]

I shall make a bit of progress.

Therefore, when we consider the question of temporary exclusion from the United Kingdom, we must bear it in mind that what is proposed, even if exclusion is on a temporary basis, is a draconian and unusual power being taken by the state. The point has been made that the proposal could be in breach of our international legal obligations by rendering a person stateless.

That is a separate consideration, and I know the Home Secretary has had it in mind in introducing the legislation, but I come back to the more fundamental point about the common law right. The point is often well made that as Parliament is sovereign, it can exclude the common law whenever it likes, but the fact is that the more fundamental the common law principle, the more careful we should be before excluding it. I simply say to my right hon. Friend that this is one of those common law rights that I regard as being of a fundamental character.

If I move on from that to consider what is proposed, I am pleased to note that it seems to me that my right hon. Friend the Home Secretary has given careful consideration to the issue. The temporary exclusion orders, which she has put forward, appear to be of a character such that she accepts she must issue a permit within a reasonable time after a person makes the application. The process therefore is—in my view, correctly —one of managed return: a return that provides reassurance that the state, which has to protect citizens here, knows of the returnee coming back to this country and, furthermore, provides opportunities, if necessary for the state to impose conditions on that individual after they have come back.

I have to say to my right hon. Friend that what has intrigued me in reading the Bill is the relationship between that and the TPIMs the Bill seeks to enhance in a number of perfectly legitimate and sensible ways. As she will know, the TPIM is also a serious interference in the liberty of the subject, and is therefore provided with a number of safeguards and protections in how it operates. The principal one is that although the Home Secretary instigates the application for a TPIM, the process has to be initiated through the High Court. There are some circumstances, however, in which that can be bypassed in the event of an emergency, and permission sought retrospectively.

The obligations after return to the United Kingdom, in clause 8, appear—the Minister may be able to help us when he comes to sum up—to be in large measure identical to those one might expect a TPIM to include, although there may be some differences, in which case it would be useful to have some clarification. Of course, the principal difference, as far as I can make out, is that this process does not have to be instigated by an application to the High Court; it is simply done on the basis of the Home Secretary concluding that she has reasonable grounds for requiring this process to take place.

I have to say to my right hon. Friend that I will be interested, in the course of the debate during the passage of the Bill, to understand why we should introduce two separate regimes of this kind. We know that, in respect of TPIMs, she has been broadly satisfied with the way they have been operating, even though she wishes to expand some of their scope. That is, I think, supported on both sides of the House. After all, if an individual is located in Iraq or Syria, or has crossed the border into Turkey and has indicated a desire to return when my right hon. Friend has removed his or her passport, the one thing one probably has as a result of this legislation is a short period of leisure—the reasonable period where the application is being made—for, if necessary, the process of a TPIM, or a TPIM which applies to a returnee, to be instigated through the High Court. I am a little mystified as to why we should simply resort to a judicial review process, which, although I accept it may comply with our international legal obligations and also the principles of due process, is nevertheless by its nature likely to be more ponderous and cumbersome, and would not allow the High Court to be seized of this matter at an earlier opportunity.

I say to my right hon. Friend that this is a matter on which we need to spend a bit of time during the passage of the Bill, to see whether in fact the two ways of approaching this are justified. Beyond that, I want to emphasise that the principle of the managed return seems to me eminently sensible, and my right hon. Friend has my support on it. The House will of course also want to look at some of the other issues that may apply to the details in respect of this scheme.

On the seizure of passports, the point needs to be made that a passport is not actually a right to come into the United Kingdom. I say that because we have discussed it in the terms of the matter I have just been talking about. Ultimately, the issue of a passport is a prerogative power. It is, in some ways, vouching for the person concerned. There are many reasons why my right hon. Friend may rightly remove somebody’s passport, either before they leave the United Kingdom or when they are abroad. However, I raise the following issue. We are progressively giving more and more summary powers to seize passports. There is nothing wrong in that, if, for example, it is preventing people from leaving the country when there are good grounds for considering whether they are going to commit, or are likely to commit, an act of terrorism, but it increasingly raises the likelihood of travel documents and passports being seized when it might turn out subsequently on examination that there was no justification.

The memorandum, properly prepared and passed off—I am sure—by the Law Officers before being issued, makes the point that taking passports interferes with article 8 rights. It must therefore raise the possibility of individuals who can show that their passports were wrongly taken making a claim for compensation. As far as I am aware, no issues of compensation have hitherto arisen from passport seizure. I appreciate that it might be different were it done maliciously, but I am talking not about malice but about errors made at the time the passport was removed.

During the passage of the Bill, I hope that my right hon. Friend and other colleagues on the Front Bench will think about the likely consequences, which might often be financial, of increasing powers of passport removal. I do not think that where there are reasonable grounds to suspect involvement in terrorism an individual has a right to compensation, but unfortunately there might be instances of people being targeted when they have no involvement in terrorism.

Ultimately—I have said this previously in the House, but it is worth saying again—we are engaged in a values battle. We will not stop terrorism or prevent young people from going to participate in terrorism by whatever methods of law we pass in this House, however draconian they might be; we will stop this phenomenon when we can persuade people that the virtues of our society, which are many, despite some of its drawbacks, are very considerable and that its values should be respected. For that reason, when we enact such legislation, we must have it in mind that we do not, as an unintended consequence, create the very resentments that are likely to fuel terrorism in the future.

Listening to the shadow Home Secretary, I was reminded that I have said that previously—over 90-day and 42-day pre-charge detention, both of which, I might add, were far more draconian attempts at interfering with the liberty of the subject than anything my right hon. Friend is doing in this measure, which I know she has brought forward with a prudent eye to the issues I have raised. On that basis, I welcome the Bill, but I hope that the matters I have touched on will be given serious thought.

17:12

[Keith Vaz (Leicester East) (Lab)]

It is a pleasure to follow the right hon. and learned Member for Beaconsfield (Mr Grieve), whose excellent and thoughtful speech leads me to conclude that were he still the Attorney-General, the Bill would not have appeared before the House in the form it has. I hope he makes it to the Committee, because the points he raised are extremely important to ensuring that the Bill is robust before it is passed by the House.

I agree with the Home Secretary, the shadow Home Secretary, my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper), and the right hon. and learned Member for Beaconsfield that these are dangerous times, which is why we require the greatest possible scrutiny of the Bill. I therefore begin by raising the concern of the Home Affairs Committee that we have not had the opportunity to scrutinise the Bill to the extent we would have liked. It was published only last week, and today is its Second Reading. We have not had an opportunity to hold any sessions, and no Minister has come before us. I know that the Home Secretary is extremely busy, but she managed to fit in several other engagements instead of coming before the Committee. It would have been much more appropriate had a Minister come before us before the Bill came to the House.

[Mrs May]

When we were discussing the Wanless and Whittam report, the right hon. Gentleman challenged me in the Chamber over the fact that I had not appeared before the Committee, when in fact the Committee had withdrawn the invitation. As I understand it—he might have a different understanding—I am due to appear before his Committee in two weeks.

[Keith Vaz]

The Home Secretary is right that she is due to appear before us in two weeks’ time, but the legislation will probably have passed through the House by then. If a piece of emergency legislation is coming before us, as it is now, Ministers should put themselves before the relevant Select Committee. The right hon. Lady managed to fit in a visit to the British curry awards last night, at which we were of course all delighted to see her, but the point is that the date of 16 December for this emergency legislation to come before the House was fixed many months ago, and Ministers must be prepared to be scrutinised on such legislation. That message clearly applies to all Select Committees. The Home Secretary may nod her head, but that is the position. Our Select Committee is now left to conduct a session on this Bill after its Second Reading, which we will do tomorrow.

[Chris Bryant]

Is it not a particular irony that the Government always drag their heels on legislation when it comes to a subject such as circus animals, but when it comes to legislation dealing with the liberty of the individual, the Government always want to expedite the processes through the House. Is that not a nonsense?

[Keith Vaz]

I thank my hon. Friend, although that also happened with a Government of whom we were both Members; it is a feature of the way in which Governments tend to introduce counter-terrorism legislation. Indeed, as the shadow Home Secretary said, mistakes are made, and there were mistakes under the last Government. I remember the incredibly important speeches of the right hon. and learned Member for Beaconsfield on 42 days and 92 days, and the role played by my hon. Friend the Member for Walsall North (Mr Winnick) on these issues. That is why it is so important to pause, consider, scrutinise and then report to the House. The Select Committee will not be in a position to produce a report for this House as we had hoped we might, simply because there is no time to do so as we have already reached Second Reading. By the time the Home Secretary makes her much-heralded appearance before us, the legislation will probably already have passed through the House.

Having made my complaint about that matter, I agree that these are dangerous times. The Home Secretary and the shadow Home Secretary are absolutely right that we need to act quickly but carefully, while recognising not only that ISIL and extremist groups are operating in Iraq and Syria but that those who support those groups are acting in countries all over the world.

Yesterday I met Nathalie Goulet, the chair of the French Senate Committee that is inquiring into the struggle of jihadi networks in France and Europe. I was astonished to hear that the situation in respect of French citizens travelling to Iraq and Syria is much worse in France than it is in our country. I looked up the last report our Select Committee published, and it must be a surprise for the House to learn that countries such as Belgium, Australia and even Norway are in exactly the same position as we are in respect of citizens who wish to travel abroad to fight.

That is why we cannot see the fight against terrorism as something that affects just this House. The shadow Home Secretary was right to raise the international dimension. The Select Committee was very clear in its last report published earlier this year in saying that there needed to be an international platform, with countries able to pool information and act together. We suggested that we should work through Interpol, which we saw as the most appropriate organisation, as it already exists to share information about organised crime. We felt that that was a platform that could be developed to build an international network with allies such as the French, the Dutch and others to ensure that we do things together and learn good practice.

I learned that in France, for example, they have a dedicated “Green Line”, which people can ring with information about those they suspect of being involved in terrorism, and parents can ring for advice and be guided in the right direction. As a result of the activities of the “Green Line”, the French authorities have been able to stop 200 people from travelling abroad to fight. There are other examples, and I hope that we use the good practice developed in other countries in order not to repeat mistakes and to move forward and try to find effective methods of stopping people travelling.

[Mr Winnick]

My right hon. Friend talked about mistakes. Going further back, would it not be wise to remember some of the measures taken against IRA terrorism? Like everyone else, I opposed such terrorism from the very beginning; it had no justification. However, some of those measures, such as internment, were counter-productive and played right into the hands of the IRA. Should we not take that sort of thing into account?

[Keith Vaz]

Those are exactly the unintended consequences to which the right hon. and learned Member for Beaconsfield and others have referred. Of course we need powers in order to deal with those who wish to undermine the values of our society, but we need to be very careful about the way in which we use them, and we need to think about the consequences.

A number of the recommendations made by the Select Committee over a number of years have been adopted in the Bill. We support what is being done in respect of radicalism, but we are cautious about some of the programmes that are being used. I do not support the placing of the counter-terrorism narrative in the Department for Communities and Local Government. The Select Committee has not inquired into that, but I believe that the Home Office is the lead organisation and these should be Home Office programmes. The problem with dealing with more than one Department is the need to persuade different Ministers and civil servants of the necessity of changing things. I do not think that it works very well when two Cabinet Ministers are responsible for roughly the same area of policy. This should be done with and through the Home Secretary, so that she can deliver locally what she tells the House that she wishes to deliver in a more strategic way.

[Dr Julian Lewis]

Some of us feel that a seamless counter-narrative needs to be presented, and that therefore it would be more appropriate to set up one of the MISC or GEN Committees, as I believe they are called. Several Departments—I can think of four or five—could then have overall control of a counter-narrative that has yet to be properly generated.

[Keith Vaz]

The hon. Gentleman has worked very hard on this issue for some years. I believe that the status quo does not work, and I have every sympathy with his proposal, which would enable the different programmes to be delivered together.

I mentioned earlier that the Home Secretary had addressed the Bangladeshi community yesterday. She was extremely well received by the 2,000 people who were present; she made a strong effort to relate directly to that important community. Obviously her message yesterday was different from her message today, because a different kind of event was involved, but the point is that we need to get into the DNA of communities.

The Home Secretary’s constituency contains a south Asian community—indeed, like my own constituency, it contains various communities—but we have in this Chamber Members such as my hon. Friends the Members for Birmingham, Perry Barr (Mr Mahmood) and for Bolton South East (Yasmin Qureshi), both of whom are very much a part of their communities. Anyone who walks down the Lozells road with my hon. Friend the Member for Birmingham, Perry Barr will see that the entire community relates to him. We are lucky to have not just him and my hon. Friend the Member for Bolton South East, but other Members with different origins, on both sides of the House. They will tell us what the voice of the community says, which is that being told what to do never works, whether by police officers or—if I say so myself—by men in grey or black suits. What is necessary is peer group pressure and community engagement, and those must come from communities themselves.

How many times do we discover from the BBC news that parents have no idea that their children have gone to Syria to fight? One parent from Brighton said that he did not know where his son had gone until he was phoned and told that the son had died. That is why peer group pressure is so vital. How do we miss this point every time? We cannot tell communities what to do; we need to engage with them, and they need to move that process forward.

[Pete Wishart]

The right hon. Gentleman is, of course, absolutely right about the need for us to engage with communities, but is it not our responsibility to try to understand some of what motivates people to go and do these appalling, dreadful things—the illegal wars, the conflicts in the middle east, and the injustices that they observe in Palestine? Is there a way in which we could try to understand, and perhaps take on, some of the issues that motivate people to become involved in extremist activity?

[Keith Vaz]

The hon. Gentleman is right. We need to understand much more, and we can only do so at local level: in the mosque, through community activities, in schools—as the Home Secretary said—in colleges, and in prisons. People who have not been radicalised go into those institutions and come out radicalised, and then there is a failure to monitor them. The solutions are all there—in reports written by Committees over a number of years, in contributions made in all the time Members have been in this House, and in speeches of Home Secretaries, as strong as the one we heard today, when she said what she wanted to put right as far as terrorism and radicalisation are concerned—but they are not acted upon, and they have to be acted upon, otherwise we will be back here in a year’s time doing the same thing again, and we do not want that.

[Chris Bryant]

Does that not highlight why, in considering giving new measures to the Home Secretary, it is incumbent on us to assess whether that would radicalise people further or provide greater security to us? My anxiety about temporary exclusion orders is that exile has not had a good history in Britain. When Richard II exiled Henry Bolingbroke, he simply went abroad, gathered a whole load of allies and came back to this country and removed the King. My anxiety is that these new orders will do exactly the same thing.

[Keith Vaz]

My hon. Friend is a greater historian than I am, but our constituents would say, if they were to find out there is someone causing mischief in Kenya, as Adebolajo was, that he should be kept in Kenya if the Kenyan authorities want to prosecute him, and that we should not try to bring him back. If there are people in these countries who are up to mischief and who wish to undermine the values of our country, I can understand perfectly why the Government are suggesting an exclusion order.

The issue here is not that we should not accept that; it is to do with the practicalities that the shadow Home Secretary and the right hon. and learned Member for Beaconsfield have mentioned. Sometimes we need to be very careful that there is proper judicial scrutiny of the decisions we take. I think that sometimes our constituents would prefer such people not to come back. If they are brought back, they have to be monitored so they do not end up putting on a burqa, leaving a mosque and leaving the country, as Mohammed Ahmed Mohamed did. He wanted to stay in Somalia but was brought back to this country and now is nobody knows where.

Of course I support this legislation. When a British Home Secretary comes before the House and says, “These measures are necessary in order to combat the severe threat we face,” the House will obviously support what the Home Secretary is doing. However, there is a need to scrutinise the practicalities, and the Home Office must work closely with the Select Committee and the House to ensure that we have a solution and decisions that will be in the best interests of our country, and will not create the kind of unintended consequences that we all wish to avoid.

17:27

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

My right hon. Friend the Home Secretary opened the debate by referring to the nature of the threat, as did my right hon. and learned Friend the Member for Beaconsfield (Mr Grieve) in his contribution. The truth is that in some quarters there is a continual effort to suggest that the characterisation of the threat is in some way designed for political purposes. Both my right hon. Friend the Home Secretary and my right hon. and learned Friend have been closer to the centre of the ring of secrecy than I ever have, although we on the Intelligence and Security Committee do acquire a degree of information that is not public. It is important that people understand that what we are facing is unprecedented, and that in such conditions, in deciding where the balance rests between security and privacy, it may be felt necessary to tilt the balance in a direction other than that in which one would normally wish to tilt it.

May I make one preliminary point? I happened to be at St Andrews university yesterday conferring degrees on grateful students, and in the course of that it became clear to me that there is some anxiety among the university authorities about how they would properly implement the obligations that may be placed upon them. I therefore agree with the shadow Home Secretary that my right hon. Friend the Home Secretary’s guidance in this matter is going to be of enormous importance. I am sure it will be as well drawn as possible, but the sooner that guidance is available, perhaps even for consultation, the better.

In my intervention on my right hon. Friend the Home Secretary, I made it clear that I am still not yet persuaded about the legality of the temporary exclusion order. It is helpful to look briefly at the conditions that would apply to someone against whom such an order was pronounced. They would be required not to return to the United Kingdom unless one of two conditions was satisfied: either the Secretary of State has issued a permit, or the individual has been deported to the United Kingdom. Some concern has been expressed about the fact that it is entirely within the power of my right hon. Friend the Home Secretary, or indeed her successors, to apply the terms of such a permit. We are entitled to assume that they will be reasonable, but they may not be reasonable in the mind of the person against whom they are directed.

So far, it has been perfectly clear from the contributions that have been made that everyone accepts that the exclusion of a British-born national from the United Kingdom is contrary to both law and practice. The right hon. and learned Member for Beaconsfield was eloquent in his description of what the common law amounted to. Is it not the case that the effect of exclusion is to remove the right of statehood to return, even if only temporarily, if the individual accepts the terms of a permit? If an individual does not accept the terms of a permit—subject to the fact that the orders have to be renewed at two-yearly intervals—the individual may, in effect, be unable to return in perpetuity to the United Kingdom, of which he or she is a national.

The Prime Minister’s original statement on 1 September suggested that some kind of blanket ban on return could be effected, and my right hon. and learned Friend the Member for Beaconsfield and I were both at pains to say that we doubted the legality of that. I understand that the temporary exclusion order is designed to bring within the sphere of legality the provision that the Government consider to be appropriate. However, I maintain my reservations for this reason: if the right to return is a matter of such principle, it can be neither capable of modification nor subject to conditionality. We are told that we are dealing with managed return. If it is managed return, why is it described in the Bill as a temporary exclusion order? The sense is turned right around by the description in the Bill, notwithstanding the explanation that my right hon. Friend the Home Secretary has given.

[Sir Edward Garnier]

I may have misunderstood the point that the right hon. and learned Gentleman is making, and I hope that he will forgive me if I have done so. If the orders were to be called managed return orders, but the same procedures applied, would that make any difference? I am not sure that it would.

[Sir Menzies Campbell]

No, it certainly would not. I think that that points up the fact that perhaps the issue was to find a description that, as has been suggested, might easily fit a headline, rather than the substance of the proposal. I see heads shaking on the Treasury Bench, but it would not be the first time that a definition created for easy understanding by the public and the press did not accurately reflect the precise terms of the legislation.

One difficulty is that the Government, although they were no doubt informed by the advice of Law Officers, have none the less produced something that on any view innovates against the principle of the right of return. I respectfully say that if that principle is as inviolate as has been suggested, any such innovation must be contrary to law and contrary to practice. In that, I differ from my right hon. and learned Friend the Member for Beaconsfield but, as was pointed out to me on my first day as a law student, lawyers are well paid for being wrong 50% of the time. There are genuine differences of emphasis and understanding. The one thing we can be most certain about, however, is that this matter will be tested in the courts and, no doubt, in the Supreme Court in due course.

[Mr Grieve]

I should emphasise that I do not disagree with the right hon. and learned Gentleman’s characterisation of “contrary to law”, which is why we have to be so very cautious about this. However, Parliament is ultimately sovereign and despite the existence of great things such as Magna Carta and habeas corpus, Parliament has, on occasion, ignored some of the key terms of both. One has to remember that power ultimately resides here, but when one starts to interfere with what is seen as a fundamental common law right, one should look at it carefully, and the courts will look at it carefully if they come to have to scrutinise it.

[Sir Menzies Campbell]

A lot would depend on the interpretation of the strength of the right that a court was willing to place on the right of return. That is why I suspect that this will eventually be a matter for the Supreme Court, rather than for any intervening forum between the House of Commons and the Government.

I wish to draw attention to another element in this matter. My right hon. Friend the Home Secretary and her successors—I almost said heirs and successors, according to law—have a considerable discretion conferred upon them in this matter, first, about the imposition and, secondly, about the terms of a permit. It is said that judicial review is available for this, but let us consider the position of someone in a foreign country with a legal aid system less generous than ours—how could we even describe ours as generous these days? What is the possibility of their mounting a judicial review in advance of accepting that they can return only under certain conditions? David Anderson QC, who has already been referred to with some approval in this debate, has drawn particular attention to this matter. So the Government would be well advised to follow the suggestion that came at one stage in our debate—I do not recall from which side of the House—to ensure that there is some intervention from the court much earlier in the system. My right hon. Friend might be obliged to go to court to ask for such an order.

As my right hon. and learned Friend the Member for Beaconsfield and I can agree, even if we do not agree in the ultimate interpretation, these are matters of considerable seriousness involving the liberty of the individual. In those circumstances, not only would it be right and proper to have the intervention of the court, but that might avoid the Home Secretary and her successors being engaged in political controversy because of the pronouncement of a TEO in a particular case. So I retain my scepticism and there is certainly a requirement that if this provision is to pass into law, the discretion of the Secretary of State should not be as stated in the Bill. Instead, there should be a requirement to seek judicial authority before the pronouncement of such an order.

[Mr Winnick]

I have listened carefully to the right hon. and learned Gentleman’s speech and fully agree with it. When the matter is being debated on the Floor of the House, as it will be on more than one occasion—I am also pleased about that—will we get the support of Liberal Democrats? I am not making a party point as such, because I know that he will vote as he considers appropriate. But it would greatly help to strengthen the measures announced by the Home Secretary, particularly on TEOs, if we could get a majority vote in favour of the High Court being involved before any such order is made.

[Sir Menzies Campbell]

I am too long in the tooth to try to speak on behalf of my party leader, as the hon. Gentleman might expect, but I would most certainly support an amendment of that kind, and I would seek to persuade other men and women of like mind and good sense to do exactly the same.

[Sammy Wilson (East Antrim) (DUP)]

The right hon. and learned Gentleman has spoken a lot about the rights of those who may be excluded as a result of this provision, but would he care to say something about people who feel under threat from those who have gone from this country, trained to be terrorists, committed acts of terrorism and are likely to come back here to commit acts of terrorism? What has he got to say to the people who feel threatened? What safeguards would he put in place for them?

[Sir Menzies Campbell]

In my own defence, when I first got to my feet—I do not know whether the hon. Gentleman was present at the time—I went out of my way to applaud the fact that the Home Secretary and the former Attorney-General had both emphasised the nature of the threat that we face. I am in no doubt about it as I am a member of the Intelligence and Security Committee, but that does not mean that we should close our eyes to the possibility of an illegality that might be challenged in the Supreme Court, which would have an enormously undermining effect on legislation of the kind that we are proposing. It is an argument in favour of careful consideration, which I am sure that this Bill will have as it passes through Committee.

17:39

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

It is a pleasure to follow the right hon. and learned Member for North East Fife (Sir Menzies Campbell). The learned discussion between him and the right hon. and learned Member for Beaconsfield (Mr Grieve) is slightly reminiscent of the legal discussions that we have in the Intelligence and Security Committee, where we are blessed with three Scottish Queen’s Counsel members.

As a former counter-terrorism Minister, I am well aware of the difficulties of legislating in this area. Most of us wish that this legislation was not necessary. No politician in a democracy takes lightly action that will inevitably impact on the rights of individuals unless there is a compelling case to do so to protect our citizens as a whole.

The framework against which we set this legislation should be the test that we apply to our agencies and all the work that we do. I am talking about the fact that any action must be lawful, necessary and proportionate, and that should be our guide in our scrutiny of this Bill today. That is the language of universal human rights, and we should judge any proposals against that test, which is well established in our law.

Inevitably, this area will be contested territory; it always has been. I remember trying to take control orders through this House. It was one of our last all-night sittings. We sat throughout the night and had some amazing discussions at 4 am, some of which were intelligible and others of which were not, so I know how difficult it can be. It is contested territory, and that is as it should be in a strong democracy. I have no doubt that the debate over the next few weeks will be intense, passionate and occasionally noisy. It is up to us here in this House and in the other place to determine whether the proposals before us are necessary and proportionate to the threat that faces our country.

Lots of Members this evening have set out the nature of that threat. I agree with my right hon. Friend the Member for Leicester East (Keith Vaz) that if we look at the analysis, we can see that we have a problem in this country. We have at least 500 young men and women who have gone out to Syria, 250 of whom have probably come back. By comparison, France, the Netherlands, Denmark, Sweden, Tunisia and Saudi Arabia have thousands of people who have gone out to be part of the conflict in Syria, so we should put the matter in perspective.

If 250 people have come back, perhaps one in nine or 10 of them will be radicalised to the extent that they may want to do us harm in this country. If that is the case, we are talking about 25 or 30 individuals who have come back trained, radicalised and experienced in conflict. That may sound like a small number, but in actual fact it is a significant and serious threat. The resources required to have 24-hour surveillance on 25 to 30 people in this country are absolutely immense, and I am concerned about the resources that are being made available, even with the extra £130 million that the Prime Minister announced the other day.

Professor Peter Neumann from the International Centre for the Study of Radicalisation has done some interesting work on segmenting the kind of people who go out to fight in Syria and the people who come back. He has grouped them into three categories.

First, we have the disturbed people who undoubtedly have mental health problems and who are particularly susceptible to the kind of narrative that is promulgated and that draws them into extremist activity.

The second category is dangerous. It includes those who are simply evil people and want to do us harm. They have records on social media of enticing other people to go out and take knives to people, chop their heads off or blow people up—they are dangerous people within our society. Interestingly, he describes the third category as the disillusioned. That includes all the people who have gone out to fight in Syria, perhaps in sympathy because they have seen on their televisions the terrible things that have happened to refugees and innocent families, but when they have got out there they have discovered that ISIS is a different proposition from what they thought. They never contemplated the viciousness, brutality, crucifixions and beheadings, and they often find themselves fighting and killing other Muslims because of the factional and sectarian nature of the forces in Syria. It is an interesting analysis.

I do not for one moment subscribe to the idea that there should be some kind of amnesty and that people should be allowed simply to come back into this country without facing any sanctions whatsoever. I absolutely believe that when people have committed criminal offences they should be prosecuted, convicted and put away for a long time.

[Keith Vaz]

My right hon. Friend has done a huge amount of work on community engagement, when in government and since then, as part of the taskforce. Drawing on all the work that she has done, what does she think is the tipping point? When does someone go from being a law-abiding citizen to deciding that they want to go? What pushes people over the edge? Are we any nearer to finding the cause?

[Hazel Blears]

I am grateful to my right hon. Friend for raising that issue. We have more experience now of the different paths that people take towards extremism, but it is still very complex. It is different for different people, but one key issue is emotional vulnerability. The analysis suggests that there are key points in people’s lives when they feel lonely or isolated and are more vulnerable to a message.

The first year at university is often a difficult phase for people. They do not have a friendship group and can easily be drawn into activity that is glorified, that represents an adventure and that is full of passion and idealism. Some of us will no doubt have experienced similar circumstances in our own politics, and I was certainly fired up to go and do something about the injustice and inequality I found around the world. Luckily, I was not being groomed by extremists—at least, I do not think I was.

One of the other causes for the 7/7 bombers was the possibility of being drawn into forced marriage. Those young men wanted to fall in love and to do so on their own terms and in their own way, and they found the prospect of forced marriage very difficult. Many emotional issues and transition points are key in young people’s education, as well as the messages that are put out.

I am grateful to places such as the International Centre for the Study of Radicalisation at King’s college, as well as other academic institutions, for the work they are doing on this issue. As the shadow Home Secretary said, we must follow the evidence where it takes us and not simply our own prejudices and views.

I welcome the provisions in the Bill as a whole. Many are common sense. I have no doubt that the judicial involvement in the issues to do with temporary exclusion orders will be contested. The measures on aviation and rail security are simply common-sense approaches to matters that we need to take seriously.

I want to focus on the issues to do with the Prevent strategy set out in part 5. I have a number of questions for the Government. Obviously, I welcome the fact that Prevent will be put on a statutory footing, as that is important in getting the appropriate resources in place and ensuring a consistent approach. A crucial part of this will be the evaluation of its effectiveness. When the Government did their review of Prevent three and a half years ago, they said that there were not sufficient measures of effectiveness, that there were no metrics, and that they were not able to measure the impact. What progress have the Government made in measuring the impact of the Prevent strategy, because I have seen no metrics, no valuation and no evidence on that score? If we are going to spend significant amounts of public money, as we have done and as I hope we will continue to, we must ensure that it is making a difference. Evaluation is therefore important.

The duty that will be placed on schools, prisons, probation providers and local authorities is very welcome. The explanatory notes stated that the guidance would be published in tandem with the legislation, but I think that the bicycle has got a little bit ahead of the guidance. I hope that the guidance will be published as soon as possible, because it will be a key part of the debate. We need to see how effective it will be, how it will operate in practice and what its parameters will be. I urge the Minister to make that a top priority.

My concerns about that agenda—I know that the hon. Member for New Forest East (Dr Lewis) shares them—relate to counter-ideology. Where is the work, in the way chapter 5 is set out, on counter-ideology? Where is the work on tackling the narrative and ensuring that both online and offline there are positive messages that expose the poverty of this mediaeval ideology, which is about sharia law and establishing a caliphate, which is absolutely inimical to the right of women and girls, which does not believe in education, which is backward-looking, reactionary and does not provide a forward-looking view of what it means to be a Muslim in a modern, free and liberal democracy? It is all very well putting that duty on those organisations, but where is the work on counter-ideology? I want to hear from the Minister on that.

[Mr Khalid Mahmood]

Does my right hon. Friend agree that that is why we had to tackle the issue of the “Trojan horse” schools in Birmingham, which were deliberately separating pupils, putting young girls to the back of the class and not giving them the same opportunities as boys, further reinforcing that stereotype?

[Hazel Blears]

My hon. Friend is so right. I would like to place on the record my huge admiration for the courage he has shown in his community by standing up to some of the voices of reaction. That is never an easy place to be when taking a stand for something one believes in so strongly. He is second to none in the way he has enabled ordinary people in his community to speak out. They did not want that going on in their schools; they wanted their schools to educate their children for the future, not the past. He has done an amazing job.

My second question to the Minister is this: where is the collective work happening? Tackling the threat is an issue for us all—parents, all of us in this House and people in the community. When we see people starting to be led down the extremist path, we have a responsibility to act. Even before that point there is work to be done in increasing the resilience of communities to withstand the extremist message. Again, that is difficult to do. My right hon. Friend the Member for Leicester East asked what the evidence is for a tipping point. The truth is that it is complicated and we do not have all the answers, but I am absolutely convinced that it is not enough just to deal with individuals who are already radicalised, to refer to the Channel group, to have a panel discussion and to come up with a bespoke programme for that individual. That is not enough. It is essential, but it has to be complemented by work that empowers people in the community, the decent vast majority of Muslims in our country who feel absolutely betrayed by this perversion of their faith. They have to be empowered to stand up, be counted, push that message back and gather the consensus around the majority of the community. I do not see that in this Bill, and I want to.

I want to put on the record my personal position on this, because there is a lot of confusion about it. As I think the Minister knows, I have always supported action against non-violent extremism as well as violent extremism. I did not always get 100% of my way—I am sure that the Home Secretary has experience of not always getting 100% of her way in Cabinet—but my personal position has always been that it is not enough to tackle violent extremism; we must also tackle the conditions in which it is allowed to become the accepted discourse and dialogue. That is where our strategy should be.

I have no problem with the Home Office leading on Channel and on the police and the agencies, but I agree with the hon. Member for New Forest East that we need a broader view on this agenda, because there are so many Government Departments involved. I do not think that the Department for Communities and Local Government should lead on this, but I believe that it has a role to play in bringing communities together. I am very disappointed by that Department’s lack of action and its failure to produce a counter-extremism strategy. We have had a statement, but we have seen no action to back it up over the past three years. I think that the issue is now incredibly pressing.

I will briefly say something on de-radicalisation. It is an even newer field and we have even less best practice on it. A very good European Union study by the Institute for Strategic Dialogue has given examples from other countries, but they are mainly based on bringing people out of far-right extremism. The Islamist threat has not yet been explored enough. We need to do more work on that. People in this country are doing great work, including Shiraz Maher from the International Centre for the Study of Radicalisation, Fiyaz Mughal of Faith Matters, and those at the JAN Trust and the Active Change Foundation. We have some great, great people whom we need to support to make a difference.

I conclude with what the Prime Minister said—credit where it is due—in his Munich speech three and a half years ago:

“This terrorism is completely indiscriminate and has been thrust upon us. It cannot be ignored or contained; we have to confront it with confidence—confront the ideology that drives it by defeating the ideas that warp so many young minds at their root, and confront the issues of identity that sustain it by standing for a much broader and generous vision of citizenship in our countries.”

Our country is a great place for people to live and grow up—a country of freedom, tolerance and inclusivity. We have to stand for those values and stand against the wicked, pernicious, narrow, divisive extremist agenda that is unfortunately pervading so many of our young people.

17:55

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

Thank you, Mr Speaker, for calling me to follow an excellent speech by the right hon. Member for Salford and Eccles (Hazel Blears).

At the end of the Home Secretary’s forthright speech, she said that we are “in the midst of a generational struggle”. That is true, but we are also in the midst of an ideological struggle. That is the message that the right hon. Member for Salford and Eccles and I have been trying to deliver to the Government. Our message is that we are well served by our security and intelligence agencies in identifying and disrupting home-grown terrorists, but we lack comparable capacity to neutralise the ideology that infects them in the first place and to support mainstream moderate Muslims in challenging the extremists’ perverted distortion of Islam.

In reviewing our current strategy and policies to prevent people from being radicalised and drawn into extremist activity, we should, as I said in an intervention, follow the precedents of the wartime efforts to expose and denounce fascism and the cold war campaigns to counter communist totalitarianism. The extremist ideology of political Islam is a similarly totalitarian creed requiring an organised effort to undermine its appeal and to strengthen the long-term resilience of the communities that are most vulnerable to it.

In order to succeed, this work must be owned by the whole of Government on a cross-departmental basis, working closely with local government in engaging with civic and faith organisations on the ground. It requires the creation of a specialist counter-propaganda agency—I use the word “propaganda” in its non-pejorative sense—to develop a counter-narrative and to support communities in their efforts to challenge the extremists. This agency should operate under the supervision of a permanent ministerial committee on which the Home Office, the Foreign and Commonwealth Office, the Department for Communities and Local Government, the Ministry of Defence and the Department for International Development are represented.

I assure you, Mr Speaker, that I did not give the right hon. Member for Salford and Eccles any warning of what I am going to say next, but I am nevertheless going to say it, at the risk of embarrassing her. I feel—as, I am sure, will many others—that it is a great loss, given her specialist knowledge and flair for this subject, that she has decided to leave the House of Commons at the next election. Should such an agency be set up in future, I can think of no better person to run it than the right hon. Lady—whether she wants the job or not.

As we have heard, the Prime Minister has said, as far back as three years ago but also more recently, that it is not enough to tackle terrorism; it is also necessary to counter what he calls the “poisonous ideology” that underlies it. The Home Secretary now says that we need to tackle non-violent as well as violent extremism, so the message is clearly getting through, but there is still some way to go. Why is there such reluctance to recognise that what we ought to be calling un-Islamic extremism, and what we certainly should not be calling Islamic State, should be confronted at a similar level, on a similar scale, and in a similar way to our approach to fascist and communist ideologies in the past? The answer, I suspect, is the fear of the pseudo-religious basis of this incarnation of traditional totalitarian, extremist doctrine.

I want to draw the House’s attention to a particularly important article by Charles Moore in The Daily Telegraph on Saturday 29 November. It is headed, “We won’t defeat extremism until we understand their ideology”, with the sub-heading, “Stopping jihadists is one thing—but stopping them from wanting to kill is more important”. The article reflects very much the views that I have been putting forward in this speech, but neither I nor the right hon. Lady had any contact with Mr Moore before he wrote it. It is always very encouraging when somebody of that calibre independently arrives at similar conclusions to those that one has oneself reached.

[Hazel Blears]

I cannot anticipate what the hon. Gentleman is going to say next, but I did speak to Charles Moore last week, so I would not want him to mislead the House inadvertently.

[Dr Lewis]

That only goes to show that the right hon. Lady and I do not co-ordinate our efforts as seamlessly as perhaps we ought, because I should have known that. Anyway, the important thing about the article is that it looks at the consequences and conclusions of our recently published Intelligence and Security Committee report on the terrible events in Woolwich. The main question in Charles Moore’s mind about the killers is: what is it that made them so bloodthirsty and so bold in the first place? Why did they want to do such a terrible thing? He comes to the conclusion:

“Islamist extremism combines something very new—the power of internet technology—with something very old—the power of belief.”

He says that the report establishes that

“Lee Rigby’s murderers were ‘self-starting’”,

but that

“they were not lunatics or even ‘lone wolves’. They took large doses of the drug called ideology…It was supplied by pushers who might live in their neighbourhood, but might equally well live in Yemen or Aleppo.”

Charles Moore refers to the calls that have been made to start a counter-narrative, but he notes that MI5, for all its good work, does not have—some would say that it should not have this; it is not necessarily its responsibility to have it—an ideological unit. He says:

“It is rather as if we were trying to combat Communism without knowing the theories of Marxist-Leninism.”

He concludes:

“Time after time, it is non-violent subversion that has prepared the ground for serious trouble”,

and he warns against the danger of running around

“trying to catch the bad fruit, instead of taking an axe to the tree.”

This is a problem that we face at a scale that is not yet insupportable, but which could get very much worse.

Somebody once said that the problem with the world is that the ignorant are cocksure and the wise are full of doubt. The problem we have is that some people with a racist, radical, totalitarian, extremist, murderous ideology have found a way, in the name of their interpretation of their God and their Prophet, to do what extremists have always wanted to do, which is to enjoy untrammelled power over everyone else.

One cannot mobilise a society or a community to counter that successfully if one confines oneself simply to dealing with individuals whom one has already recognised as at risk of radicalisation, because they will already be on the conveyor belt to an extremist outcome and, very probably, to a violent extremist outcome. What one has to do is not to be shy about the virtues of democratic politics, institutions and ideas, or about denouncing the follies and iniquities of systems based on an ideology that stands in total opposition to everything that moderate and liberal-minded people believe.

[Pete Wishart]

The hon. Gentleman is making such a powerful speech that I am loth to interrupt him. I am sure that he would appreciate, respect and understand the fact that we, too, have a responsibility for creating some of the conditions that have allowed this dreadful, awful and appalling ideology to take root, through decisions such as those about military adventures in the middle east, injustice in Palestine and illegal wars. In his rounded assessment, surely he should also look at our responsibility for allowing this to happen.

[Dr Lewis]

When I heard the hon. Gentleman, in his articulate fashion, make that point in an earlier intervention, I felt, frankly, that it was a counsel of despair. If he is saying—[Interruption.] Let me give him my answer. If he is saying that the only way to stop terrorism is to bring peace to the middle east, then, frankly, we are never going to stop terrorism. [Interruption.] I will let him intervene again in a moment if he so wishes. I want to put to him the more serious point that we have a Muslim community of between 2 million and 3 million citizens, but I am very pleased to say that out of that very large number, only a very tiny number resort to such methods. If the real cause was western folly in interfering in the middle east, that would still not justify what the tiny minority of Muslims are doing. I will give way to him again.

[Pete Wishart]

In no sense was my intervention an attempt to justify what is happening. It was about accepting and assuming our responsibility following the decisions that we have made. There is absolutely no doubt whatsoever that military adventures in the middle east have increased radicalisation, with some people finding such an ideology as a response to their ultimate and desperate frustration. Surely the hon. Gentleman must recognise that.

[Dr Lewis]

What I recognise is that the events the hon. Gentleman is talking about are legitimate in a democratic society for argument and disagreement, but not for resorting to terrorism.

[Pete Wishart]

indicated assent.

[Dr Lewis]

I see the hon. Gentleman nodding in agreement, so I will quit the exchange at that point.

[Sir Menzies Campbell]

rose—

[Dr Lewis]

I was about to wind up my remarks, but I cannot resist giving way to the right hon. and learned Gentleman.

[Sir Menzies Campbell]

The hon. Gentleman will forgive me for taking advantage of his good manners. In his very careful analysis, does he draw any parallel between the fact that for a long period in the 1930s Nazism was tolerated—indeed, in some parts of this country, it was welcomed—without a full understanding of the philosophy behind it, and the extravagant and extreme fruition of that philosophy in Hitler’s expansionist ambitions?

[Dr Lewis]

I absolutely accept that parallel. Many other parallels could be drawn that are similar to the one the right hon. and learned Gentleman has made so perceptively. For example, democracies in the 1930s faced the twin dangers of Soviet communism on the one hand and Hitlerism on the other, which is why it is understandable, although unforgivable in retrospect, that some people chose to back the Nazi approach in preference to meeting what they thought was the threat of bolshevism advancing against the western system of life and liberty.

Therefore, one can indeed draw parallels with the twin problems that we see now. There is a thousand-year war between Shi’a Muslims and Sunni Muslims. As the hon. Member for Perth and North Perthshire (Pete Wishart) said in his interventions, as we make our attempts—sometimes misguided and sometimes more sensible—to mitigate the outcomes of such conflicts, we should not be surprised if there is a blowback effect, to some extent, on the more volatile elements in the community here. I think that I have now got his point to his satisfaction.

In conclusion, bearing in mind your precept, Mr Speaker, that one should never have more than one or perhaps two main points for somebody to take away from a contribution in the House of Commons or any other public arena, the point that I wish to urge on the Government is the same one that I have urged before with the support of—indeed, I should say under the leadership of—the right hon. Member for Salford and Eccles: we need to face up to the ideology in its purest and most evil form. It is an ideology. It is not the ideology of Islam. We must mobilise and support those people in the Muslim community who wish to tackle this matter, and we must not be afraid to set up institutions and organisations that are capable of dealing with this formidable threat.

18:11

[Mr Khalid Mahmood (Birmingham, Perry Barr) (Lab)]

Today and over the past 10 days or so, the vast majority of people in the Muslim community in the United Kingdom, which numbers between 2.5 million and 3 million people, will have been apprehensive about what the Bill holds for them, how they will come to look at it and in what way they must play a part in delivering this policy and moving it forward. There will, of course, be those who will try to capitalise on that. They will say, “This Bill is about putting you down. It is about doing things to you because you are not regarded as full UK citizens or as belonging to society in the UK.” Those are the people we have to look at and deal with.

I stand before the House as a member of the Muslim community who believes that those people do not speak for me. The ideology that the hon. Member for New Forest East (Dr Lewis) spoke about is very warped. I refuse to call it a Muslim or Islamic ideology, because in no way does it encompass the beliefs that I have. To me, Islam translates as submission; it is not about torturing people and it is not about killing people of different faiths. Recognising the three great Abrahamic faiths, which belong to the book, and calling any of them kufr is certainly not justified in any way. These people will use whatever little snippet they can grab hold of, try to turn the whole thing upside down, and use that as a recruiting sergeant for their ideology. They did not have the right to cruelly butcher Alan Henning. My respects go to his whole family for what they have suffered. There is certainly no justification for that in any religion of Islam that I support, believe in and will continue to believe in.

Before I consider the issues before us, I pay a huge tribute to the police, not just in Birmingham and the west midlands where I belong, but across the country, and to the security services, which have done a tremendous job over the past decade or so to protect us all from the plots that have been mentioned by the Home Secretary and others. That is what they do, day in, day out, and they deserve huge gratitude.

As for the Bill, the first issue that I wish to raise concerns the strengthened powers of temporary restrictions on travel and the suspension of passports. A number of Members have dealt with that point, so I will try to make my remarks fairly brief. The shadow Home Secretary had a significant amount to say about it, and the right hon. and learned Member for Beaconsfield (Mr Grieve) made some important remarks about it. My hon. Friend the Member for Bolton South East (Yasmin Qureshi) also made some good points about whether legal aid would be granted to the people in question. We need to look more deeply at the proposal, because, as a number of Members have mentioned, it will leave us in a legal quagmire. I only wish the Government had taken some more time to consider it. Unless we are prepared to do that, the problems will not be dealt with properly.

On the subject of passports and people coming into the country, I do not believe that we currently have sufficient border agency staff to deal with the problem. We need to move forward on that if we are to solve it in any way. It was said earlier in the debate that 500 people have travelled to Syria—a figure that I do not necessarily agree with—and that at least half of them have returned. If so, where are they? If we had proper passport control and exit controls, perhaps we would know. Not only are we missing those people coming back, but we are missing a huge opportunity to learn from them how they were radicalised, what their points of contact were and what happened. We miss that opportunity at our peril. I welcome the fact that the shadow Home Secretary said that she wanted to reinstate 1,000 border control personnel to fill that gap, because it is important that we deal with the problem.

I turn now to control orders, if I can call them that. I was in the Chamber when TPIMs were first discussed, and the Government did not really want to listen to the Opposition or the shadow Home Secretary. Unfortunately, we are back here now discussing control orders under different guises and different names, and there are different protestations about what we are supposed to be doing. Control orders are a difficult legal issue, but when people are significantly radicalised, it is important to try to resolve that problem. We have to start tackling it so that we can stop those people spreading their evil ideology and recruiting more people through their presence in the community. We need to find a proper answer, and we have not had the wherewithal to do that—as has been said, two people under TPIMs escaped.

The Government need to consider security arrangements overall. The new budget for the security services is welcome, but the cuts to the police and the forthcoming further cut of 30,000 people will not help. If we are saying that TPIMs are important for the safety and security of our citizens, surely we must consider how we can best put them into effect. Without the personnel on the ground, it will be difficult for us to do that.

I deal now with Prevent. My right hon. Friend the Member for Salford and Eccles (Hazel Blears) made a fantastic point about the work that she has done, particularly when she was in office. I remember a meeting that we had about some of these issues just before she left office. The issue that I raised at the time was ideology. On the subject of Prevent and how these problems are dealt with, slashing the budget from £17 million to £3 million did not help, nor did giving the responsibility to the Department for Communities and Local Government, which was not bothered about how we dealt the matter or how we moved forward, and which did hardly anything in that respect. We need to consider how we deal with radicalisation through Prevent.

I welcome the measures placed on schools, colleges, universities, prisons and young offenders institutions. Those measures will go some way. I had to deal with the “Trojan horse” schools in Birmingham, and found myself in a very lonely place. Everybody criticised me. Colleagues on the Opposition Benches were not happy with what I said. I had known for some time that there were issues that had to be dealt with. The difficulty for me was that they were not in my constituency, but in the end I got involved because I thought enough was enough. Somebody had to get involved and deal with them.

There were clear signs of what was happening in the classroom. I had taken an interest in such matters before. I spoke to head teachers of those schools, former head teachers who had been excluded from those schools, deputy head teachers, senior teachers who had been excluded from those schools, parents and governors who had been pushed out of those schools. I even spoke to students in those schools. Practices that went on were, for example, boys and girls not being allowed to sit together, and the girls being pushed to the back of the classroom so that they would know their place.

I spoke to one of the parents, who said everything was fine and none of that happened. I asked whether any of her children went to the school in question. She said that both her son and her daughter went there. I asked her to ask one of them. She asked her son. He said, “Yeah, Mum, that happens normally.” The mother asked, “Why don’t I see it?” Her son said, “When you come to school, there’s a different arrangement from what we normally do in class.” On parents evening, the parents were shown the school acting normally, but when they were not present the girls were made to sit at the back and the boys in front.

The schools had a specific interpretation of music and art and photographs of the human form or living form. The children were even told that if they had photographs of their parents or grandparents at home, or photographs of other family members, perhaps deceased, that was not right and was a crime under Islam. That is what was happening. Many people might see it as non-extremist radicalisation, but if a school has a child for eight years and passes on such teaching, what happens when the child leaves and goes to college with that ideology fixed in their mind? We need to think about how we deal with these issues and move forward.

As part of Prevent, we should recognise that we have a generation of lost young people—a small minority, as the hon. Member for New Forest East said, but still far too many.

[Jeremy Corbyn (Islington North) (Lab)]

My hon. Friend is making a very interesting contribution. Does he agree that one of the problems—only one of them—is the high degree of Islamophobia that is reported in many of our newspapers and media all the time? Any discussion about anything to do with the Muslim community rapidly descends into a quite unpleasant area. This is played out in our communities, schools, colleges and streets, and some young people are forced into extreme positions because of it. That is bad, but we should recognise that there is a bigger problem concerning perceptions in society, which has to be challenged.

[Mr Mahmood]

I certainly agree that there are issues of Islamophobia in terms of employment, but it comes to something when people call me Islamophobic because of the work I did with the Trojan horse schools. Control of the press is difficult, given the way it sometimes tries to—excuse the pun—“sex up” certain issues. That is difficult to deal with and we need a far wiser press to do that. Trying to further excite the issue of Islamophobia affects the wider community, and we must look at that.

There are real issues about how we deradicalise our young people, and the way to do that is not to allow a half-way house—as we have done previously—or look to non-extremist organisations to hold that place. If they do that, the ideology of the non-extremist organisation allows issues to foment; we allow people to get the whole of that ideology into place, and it is then easily pushed to the next stage. That is my problem when people say that we can use some of those organisations to prevent extremism. We are currently trying to deal with issues in Birmingham, and Channel and Prevent programmes have been used with some of those organisations.

If we are to provide the safeguards we must consider the issue. Unfortunately we have had the missing link of leadership from within the Muslim community—whether the Muslim Council of Britain, the Muslim Association of Britain, or other national organisations that said they represented Muslims across the community—which did not quite deliver that. To save that lost generation, and future generations, we need a joint effort. We must start ideologically, from the point of Islam, to stop people persuading young people from within the Muslim community—including different schools of Sunni, Shi’a and other schools of thought in Islam—to be ripped away from their parents, community and societies. That is the best way to move forward. I would like to discuss other issues in the Bill, but time does not permit so I will do so at a later stage.

18:27

[Martin Horwood (Cheltenham) (LD)]

It is a pleasure to follow the hon. Member for Birmingham, Perry Barr (Mr Mahmood) who made a heartfelt speech and spoke as an authentic voice for British Muslims in a way that extremists of various ideologies do not.

I often speak in the House on international issues rather than domestic home affairs, but it is important to reinforce the importance of the international context. If we talk about tackling the free flow of potential terrorists to and from various countries in Europe to states in the middle east, and if we ask the Gulf states to stop the flow of funds and support to those organisations, or ask Turkey and others in the neighbourhood to stop the flow of people across its borders, we must also play our part. It is important that we respond to the new challenge of people going as potential fighters from this country and other countries across Europe to play their part in atrocities and the awful war in the middle east that is spreading from country to country.

We can do that in our own self-interest, not only because we are legitimate potential targets for Daesh, or IS, or whatever we want to call it, but because it is the right moral and humanitarian response to try to inhibit those who would cause such unimaginable brutality, and instead to promote peace and an end to the suffering. That in turn would reduce the need for us to contribute enormous resources in humanitarian, political and even military terms to help solve these crises.

The right hon. and learned Member for Beaconsfield (Mr Grieve) was right to support the Government in saying that there is a clear and present danger to the UK from IS, as indeed there still is from al-Qaeda and other similar extremist organisations that pose a threat to the security of this country. However, it is important to remember that we have faced terrorism before, and while the dangers may be new and extremely violent, we must guard against over-reacting or reacting in such haste that in some way we compromise the liberties we seek to protect.

I am a great defender of our security and intelligence services—I have to be as the Member of Parliament for Cheltenham. I see a great tradition stretching back to the code-breakers of Bletchley Park. People regard them as absolute heroes for their contribution to surveillance and intelligence during the second world war, but the same people sometimes forget that the self-same organisation under the new name of GCHQ has continued through to the present day, and protects our liberties in a vital way. In fact, GCHQ works under a much more comprehensive scrutiny, legal and oversight framework. Such a framework did not apply to the Government code and cipher school during the second world war so, in a sense, we could say that Bletchley Park was illegal. GCHQ certainly does not act illegally.

Even my constituents in Cheltenham who work for what is euphemistically called “the office” would be the first to say that it is not for them to tell the Government or Parliament where the line should be drawn between liberty and security. It is also not for hon. Members to over-respond to the fears of the intelligence and security services in drawing those lines. We must take a measured view and judgment, and be cautious about where the line is drawn.

The Labour Opposition and Liberal Democrat Ministers have accepted that the Bill broadly strikes the right balance, and will support the Bill today. Therefore, it is right to point out that the modifications to people’s right to come back into the country with a British passport are not the same as making them stateless, and that the differences have been carefully drafted in the Bill; that the new version of TPIMs are not control orders, and that there are many differences between them; and that the data retention elements of the Bill on IP addresses were not objected to in the original draft Communications Data Bill by, for instance, the Liberal Democrats.

There are differences and the safeguards have been thought about, but there are serious questions. The former Attorney-General, the right hon. and learned Member for Beaconsfield, and my right hon. and learned Friend the Member for North East Fife (Sir Menzies Campbell) raised some of those questions. They spoke of the process of temporary exclusion and asked where precisely it leaves the legal status of those who are temporarily excluded or denied passports, and what their rights are to challenge those orders. There might be a suggestion in the explanatory notes or the Government’s response that we need not worry, and that processes will ensure that the orders are designed only temporarily to interrupt someone’s return to this country, so that they can be met either by a person or by a legal measure designed to make them less of a threat to the public, but that detail or explanation needs to be in the Bill. Perhaps the question whether the phraseology of the Bill is clear enough will be addressed in Committee.

The same goes for the questions about TPIMs. Liberty and others have suggested that TPIMs reinstate aspects of control orders that allowed for internal exile, which led to some control orders being declared illegal. They say that that is not just the wrong thing to put into legislation, but a weakness, because it would make the measures less effective.

The Open Rights Group and others have focused on some of the loose definitions in the data retention portion of the Bill. If we follow the trail of what constitutes relevant data in the Bill through the various clauses to the annexes and the explanatory notes, we find that it is not absolutely clear what relevant data are in the Bill. Internet providers are not absolutely defined, so perhaps more clarification is needed and more safeguards need to be built into the Bill in Committee.

There is a slightly deeper question. The House often responds to a challenge to security and public safety with legislation, but the response we need is often not a legislative one. The hon. Member for New Forest East (Dr Lewis) and others talked about ideology. There is good evidence that many young people who go out to the middle east to take part in these battles are not really seduced by any sophisticated form—or even a perverted form—of Islamic ideology. In fact, they know very little about Islam at all. They are more seduced by attractive slick internet videos, social media and social pressures from within a peer group who have become alienated from their own communities. That is not about ideology, but a propaganda war that has to be fought. The best response to that is not always legislation. The best response may be to understand what mainstream society needs to feed back to communities and young people, and to understand why they are so alienated and why they are being seduced by these social media techniques.

[Dr Julian Lewis]

The hon. Gentleman is absolutely right that these people are not steeped in the religion of Islam, and are receiving a perverted and simplistic message. Our side of the argument still needs to be put in a comparably efficient way.

[Martin Horwood]

The hon. Gentleman makes a reasonable point. My underlying point is that legislation is not always the forum through which we will provide the answers to these questions.

It seems there is consensus across the House that the Bill should go forward, but there are serious questions to be answered. There needs to be careful examination in Committee to ensure that the Bill strikes the right balance between liberty and security.

18:36

[Mr George Howarth (Knowsley) (Lab)]

Before coming on to specific provisions in the Bill, I want to say a few words on the context. Taken together, the provisions need to be subjected to a number of tests, some of which have already been debated, to see whether they are a coherent and effective way of tackling the problems we have already experienced with home-grown terrorism, and the problems of fighters in Syria and Iraq coming home, which has already started to happen.

The first and most important test, which has been discussed but needs to be reiterated, is whether proposed restrictive or intrusive measures strike the right balance between personal liberty and the right to privacy, and the degree of monitoring and restrictions placed on those who are considered to be posing a threat.

The second test is in some ways more problematic. It relates to the practical and legal framework in which any of the measures must operate to be effective in practice. The exchange between the right hon. and learned Member for Beaconsfield (Mr Grieve) and the right hon. and learned Member for North East Fife (Sir Menzies Campbell) brought out perfectly how legal principles and practical considerations sometimes do not quite work out in the way set out in a Bill.

My final introductory point is not so much a test, but, rather, relates to having a better understanding of the paths to radicalisation, something my right hon. Friend the Member for Leicester East (Keith Vaz) talked about. If we ignore those paths and do not understand them, there will always be a danger that proposed measures will be ill-suited to the problem we are trying to challenge.

Before saying a few words on the process of radicalisation in the UK, I want to thank, like my right hon. Friend the Member for Salford and Eccles (Hazel Blears), the International Centre for the Study of Radicalisation and Political Violence at King’s college London, and in particular its director Peter Neumann. Its work has shaped my own thinking on this subject.

Researchers who have studied the phenomenon of radicalisation have identified certain key ingredients. These include “root causes” or “grievances”, including poverty, political marginalisation and exposure to a specific ideology—we have talked about how violent jihadism seems to offer an answer, or at least an explanation, for that sense of grievance—and what my right hon. Friend the Member for Leicester East called “peer group pressure” and what social scientists call “social and group dynamics”. However, this area is problematic, because there are different types of group and different types of individual; some act alone, operate differently and are influenced by different means.

I shall give two examples. First, Mohammad Sidique Khan, the leader of the London bombers, whom my right hon. Friend the Member for Salford and Eccles mentioned, became disillusioned with his family and the local mosque over the teaching on arranged marriages. He wanted to make other life choices, as is modern and understandable in a young person, but the initial rejection escalated to the point where he became a violent jihadist and bought completely into the Salafist violent ideology, which was then reinforced by group loyalty. The ISC in its report studied that issue in great detail.

Secondly, by way of contrast, there is the case of Roshonara Choudhry, who tried—thankfully unsuccessfully —to murder my right hon. Friend the Member for East Ham (Stephen Timms). She was a lone wolf, as the media put it, unconnected to any group; her radicalisation took place entirely on the internet. She had a grievance over foreign policy, bolstered by a growing sense of a particular version of Islamic identity, which took on a violent and ideological character. Those are some of the things that researchers have come up with and which we need to take into account.

The hon. Member for New Forest East (Dr Lewis) talked about counter-narrative in the context of the Prevent strategy and was asked about comparisons with Nazism in Germany and Marxist-Leninism. I understand the point, but there is a difference: the ideology we are talking about is intertwined with a particular view of Islam, which makes it a different kind of belief. Nazism and Marxist-Leninism offer particular world views, but this offers a world view that extends beyond the realms of the world—if he follows my meaning.

We ought to acknowledge that perhaps the state is entirely the wrong organ to propose a counter-narrative. If I were a Muslim in this country, I would resent the state’s telling me what Islam was and what I could believe, as I would were I a member of a Christian faith, a Hindu or any other religious believer. It is not the job of the state to tell people what views to hold. I agree that there is a need for a counter-narrative, but I do not believe it is the role of the state to come up with it—and certainly not to promote it.

Part of the Bill deals with the problem of communications data, and here I think there is one area where a certain part of the private sector could help. I refer to internet providers. Our ISC report last week referred to an unnamed internet provider that had some information about one of the people who killed Fusilier Lee Rigby that was not passed on to the agencies.

A paper that came out earlier today from the Quilliam Foundation made what I think was a sensible suggestion. It said:

“Private sector companies, particularly social media companies and ISPs, can also work to facilitate”

what it calls “counterspeech”,

“in a way that provides deliverables to counter-extremism. These private companies benefit from supporting counterspeech content as a means of countering online extremism since it creates a healthier realm of ideas within their platforms and naturally develops a more hostile environment for individuals wanting to use online platforms for extremist and/or terrorist-related purposes.”

I think that is a good idea, so I hope Ministers and others will think carefully about how those companies can be used if not exactly to promote a counter-narrative, at least to provide space where a counter-narrative can exist, and perhaps in some cases even a side bar where the opposite point of view can be put.

The final issue I want to cover is TPIMs. The ISC, on which I and other right hon. and hon. Members sit, raised its concerns about them in two of our annual reports. In 2012-13, we said:

“The Committee shares the concerns of the Independent Reviewer of Terrorism Legislation over what happens when individual Terrorism Prevention and Investigation Measures…come to the end of their two-year limit. The Government must take steps now to ensure that they have sufficient policies in place when TPIMs have reached their limit and cannot be extended.”

In our annual report of 2011-12, we said:

“The Committee is concerned about the potential increase in the overall risk as a result of the introduction of the Terrorism Prevention and Investigation Measures (TPIMs) regime.”

My late friend, Paul Goggins, who was also a member of our Committee, pursued this issue doggedly both in our Committee and on the Floor of the House. I would like to cite a point he made in June 2011:

“My final point is whether the whole new TPIM system represents the same level of risk as we had with control orders or a greater level of risk. I can only assume that the Home Secretary believes there is an increased risk from the new TPIM system, otherwise why would she be committing a serious level of resource—whatever that level is—to the police and the Security Service to help them deal with the additional work and the additional pressures that will result from the new system?”—[Official Report, 7 June 2011; Vol. 529, c. 88.]

As ever, Paul showed a sensible note of caution in what he said at the time, and in view of what has happened since, he was characteristically prescient in the remarks he made.

I started with a principle or a test, saying that the loss of civil liberties on the one hand always has to be balanced against the gains in national security on the other hand. As we have heard, those judgments still cannot be fully made in respect of large sections of the Bill. I do not oppose its Second Reading and I do not think that there is any move to do so, but a number of questions remain to be asked and a number of tests remain to be passed before everyone can feel comfortable with it, and I hope that those concerns can be laid to rest during its later stages.

18:49

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

Here we go again, with yet another counter-terror Bill to tackle yet another threat posed by extremism—yet another essential set of measures to keep our nation safe, and to be rushed through at breakneck speed—accompanied, predictably, by yet another escalation of the threat that we are supposed to be experiencing. We are invited to believe that we are surrounded by terror plotters and backers, jihadist bombers, extremists, and just good old-fashioned nutters. No one is safe; threats are everywhere. That is why we need this legislation as quickly as possible, just as we have needed all the other Bills as quickly as possible. There have been seven counter-terrorism and security Bills since 9/11, all of which have been rushed through Parliament, all of which have been absolutely necessary, and all of which have been fast-tracked.

I suspect that this will not be the last counter-terrorism and security Bill. In fact, I do not suspect that it will be the last of the calendar year. I suspect that there will be at least one more, perhaps two, and that they too will have to be rushed through Parliament to meet the escalating threat with which we must deal. As we have heard so many times in so many speeches, we live in an era in which there will always be an existing, growing threat for us to address. So what do we do? We do the same things.

Every counter-terrorism Bill that we have considered in the House could probably be characterised by a few key features that seem to crop up again and again. We must gather, retain and collect vast amounts of personal data from internet service providers. In this instance, internet protocols must be collected just in case we find something that could be used in the future. That cause is very dear to the Home Secretary’s heart, because she still hankers after a snoopers’ charter. She would probably have her way in the event of a majority Conservative Government next year, because I fully expect it to be included in any Conservative manifesto. We must continue to subject suspects to internal exile, for that is exactly what we are doing. I applauded the Conservatives when they reversed new Labour’s control orders—I thought that TPIMs were an improvement—but we are back to what is effectively internal exile. We are working towards depriving people of statehood. We are preventing people from travelling, and we are considering home arrest without trial. It is all the usual stuff.

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

My hon. Friend may recall that, during the last Parliament, 90 days of detention without trial seemed to be the litmus test of the Blair Government’s machismo. That fell by the wayside, but, in view of what my hon. Friend has been saying about those seven Bills and the groundhog day aspect of this debate, does he envisage a return to the “90 days” proposal?

[Pete Wishart]

I know that my hon. Friend has been paying real attention to some of the conversations that we have been having. That is exactly how Labour behaved. What a Government! They established and effectively monitored an anti-civil libertarian state. My hon. Friend is spot on when he reminds us of the proposal for 90-day detention. The one reason for which I applauded the incoming Conservative Government was that the first thing they did was bring about the bonfire of the ID cards and the national database. Is it not depressing that they have fallen into their old manners and customs? They are almost right back to where the Labour Government were in supporting the creation and maintenance of an anti-civil libertarian state.

We always get this wrong. At the heart of all these counter-terrorism Bills is a critical balancing act. On one hand there is our need for security—the need to make our citizens safe—and on the other hand are the civil liberties that we all enjoy as a result of being part of a democracy.

[Jeremy Corbyn]

Does the hon. Gentleman agree that one problem is that there is a mentality and a default position that anything to do with national security and terrorism has to be dealt with by secretive special courts and a secretive special process, all designed to protect the security services from any kind of accountability? Does he agree that we should actually rely much more on the basis of the criminal law, so that where people commit criminal acts, they should be tried for that crime?

[Pete Wishart]

The hon. Gentleman reminds me of the last feature I wanted to include in the list of what we always see in these counter-terror Bills, which is the very thing he mentions; it is all about suspicion, and the powers of the Home Secretary and how she will be allowed to exercise them, never testing things in courts, because the evidence is not substantive enough. It is all to do with this idea that somehow we have got to make people safe in this country by proposing all sorts of control mechanisms on suspects. If the Government were serious about this—if they believed and had the courage of their convictions—they should take it to court and test it in the public court, and give people an opportunity to defend themselves. If someone is subject to one of these new TPIMs, they have no means to try to fight their defence; they have no access to having that tested in court. The Government talk about how extremism develops, about radicalisation and about the furthering of ideologies, but when they are doing things like this, it is no surprise that people might take a jaundiced view about some of the things that happen.

I enjoyed the contribution of the hon. Member for New Forest East (Dr Lewis). It was good and there was very little I could disagree with. Some of the things that are necessary to tackle extremism are the sorts of things he presented, and many of the things mentioned by the right hon. Member for Salford and Eccles (Hazel Blears) are also absolutely necessary, but we have got to look at ourselves. We have got to look at the decisions we made. We have got to understand the things we have said, passed and done that may have inflamed the situation. If we cannot do that, we are not acting responsibly. We have got to make sure we account for our actions and see what they led to.

I was in the House when we had the debate on the Iraq war, as were other Members, and we said what would happen as a consequence of the Iraq war—an illegal war that inflamed opinion and passions not just in communities here, but communities around the world. We said that there would be a consequence and a reaction. That has come true. That has happened. The reason why we are now having to mop up with this type of legislation and these types of measures is because of some of the critical decisions we took, and some of the appalling and bad decisions we made and are still accounting for.

[Hazel Blears]

Does the hon. Gentleman not recognise that, in equal measure, the decision not to intervene in the events in Syria may also have inflamed the feelings of some of the people who saw the terrible events played out on their screens showing what was happening to vulnerable families in those circumstances?

[Pete Wishart]

What I accept is that there was a failure to recognise some of the international dynamics that influence communities in this country. The solution always seems to be that we have to intervene—that we have got to try to make the world better—and sometimes we are unaware of the unintended consequences that come from that. All I am saying to this House is that at some point we have got to acknowledge what we have done in terms of framing the conditions and setting the environment in which these things happen. By failing to do that, and by failing to acknowledge that type of issue, we will be hampered in our approach to these matters, and the very good things in Prevent and all the anti-radicalisation programmes will fall and fail, because we will have missed out a crucial part of the holistic view we need to take of these things.

[Mr MacNeil]

Syria has been mentioned. Last year the idea was to intervene in Syria on one side, but this year the idea was to intervene on the other side. As we encourage professionals in all walks of life in this country to critically self-assess, my hon. Friend is right to say that we should be moving towards a point where Government, MPs and Parliament critically self-assess what the consequences of our actions have been over decades past.

[Pete Wishart]

Again, my hon. Friend is spot-on. We should be proofing anything we suggest and put through, and assessing the impact and effect it might have and any unintended consequences on communities we represent. If we were to do that, we would start to make progress.

What does the Bill do? It is specifically designed to tackle the threat posed by the so-called Islamic State, which, according to the Home Secretary, has given energy and a renewed sense of purpose to subversive Islamist organisations and radical leaders in Britain. No kidding, Madam Deputy Speaker. What does this rush Bill propose that is different from all the others? It has got all the usual features, of course, because they are the bedrock—

[Madam Deputy Speaker (Dame Dawn Primarolo)]

Order. If the hon. Gentleman will allow me to deal with the 7 o’clock motion, I will come back to him so that he can complete his speech.

19:00

The debate stood adjourned (Standing Order No. 9(3)).

Motion made, and Question put forthwith (Standing Order No. 15),

That, at this day’s sitting, the Second Reading of the Counter-Terrorism and Security Bill may be proceeded with, though opposed, until Ten o’clock.—(Damian Hinds.)

Question agreed to.

Deferred Divisions

Tuesday 2nd December 2014 Commons Chamber

Motion made, and Question put forthwith (Standing Order No. 41A(3)),

That, at this day’s sitting, Standing Order No. 41A (Deferred divisions) shall not apply to the Motion in the name of Secretary Theresa May relating to Dangerous Drugs.—(Damian Hinds.)

Question agreed to.

Debate resumed.

Question again proposed, That the Bill be now read a Second time.

[Pete Wishart]

I thought that I was going to get one of my traditional and routine tickings-off from you, Madam Deputy Speaker. I am glad that it was just an interruption for the 7 o’clock motion.

[Madam Deputy Speaker]

It is the season of good will, Mr Wishart.

[Pete Wishart]

I am grateful for the early Christmas cheer.

To return to the Bill, what new measures does it contain? I suppose that its unique selling point is the introduction of temporary exclusion orders. They are a relatively new feature, and I do not think that there has been much discussion of them. They are designed to ban British citizens who are suspected of travelling abroad to fight for terror groups from re-entering the UK, and they involve the cancellation of travel documents and the inclusion of such individuals on watch lists and no-fly lists. The Bill allows the cancellation of passports at the border for up to 30 days. The police and border forces will be able to seize the passports and tickets of British citizens if they suspect that those individuals intend to engage in terrorism-related activities at their destination.

That all moves us quite conveniently and neatly towards the idea of statelessness, which we have looked at in relation to other matters that we have debated in the House, and which seems to be the drift and the trend. I would be grateful if the Minister would tell me where we have got with the 30 days issue. I listened carefully to the Home Secretary’s speech, in which she said clearly that the Government are in control of allowing people back in. Well, we have heard about some of the difficulties with that. What happens if there is a breakdown of bilateral relationships with other nations that are not prepared to play along with the UK’s game? Surely, an effective state of statelessness will emerge.

The Bill includes the stronger enforcement of TPIMs, including an ability for the authorities to force suspects to move to another part of the country, which amounts to internal exile. There is no great difference between that and the main feature of Labour’s control orders. The Bill also contains curious stuff about colleges and universities, and the expectation that our higher education institutions will prevent individuals from being drawn into terrorism. The measures include banning extremist speakers from campus grounds. How that is to be achieved without massive impacts on academic freedom and freedom of speech in higher education institutions is beyond me. I am looking forward to guidance about how those freedoms will be maintained and guaranteed. Our universities and colleges have already started to raise concerns. I listened carefully to the right hon. and learned Member for North East Fife (Sir Menzies Campbell) who said that only yesterday there was concern about how the proposal would be represented in colleges and universities. We have to be careful about how we pursue such a measure.

Perhaps most controversially, the Bill contains measures to require internet service providers to retain data on internet protocol addresses to enable authorities to identify individual users. That brings us neatly to the ongoing concern about, and the trend towards, the Home Secretary’s much-coveted snoopers charter. We are all in the business of doing all that we can to keep the people of our nation safe and secure, but that does not always mean that we must necessarily agree with everything that the Home Secretary says from the Dispatch Box. Some of us might even have a different way of doing things and different suggestions about how to get the balance right between assuring our safety and security and making sure that there is no compromise on our civil liberties. That is why in Scotland, where we have specific responsibilities on that agenda, we take a different view about how it can be better progressed. In Scotland, we want to ensure that our police and our other public bodies have the tools they need not only to tackle and prevent terrorism but to maintain a community where civil liberties are respected and where measures that are introduced are proportionate and have full community support. We have our own separate and distinct legal system in Scotland, and we have a range of devolved responsibilities. We have responsibilities for delivering large parts of the agenda in the Bill, particularly on the Prevent side. Once again, we have seen an almost total lack of consultation between this Government and the Scottish Government, who have specific responsibilities for delivering large swathes of the Bill because of devolved competences.

[Mr MacNeil]

Does my hon. Friend think—this is emerging in his speech—that in the seven Bills he has mentioned, and in the responses of both the Labour and Conservative Governments over the years, the reaction has been, “Must do something, although we are not sure what”? That seems to be the driving policy. There is not much thought in their policy, but the policy is, “Must do something.” It is probably headlines driving the policy.

[Pete Wishart]

That “must do something” feeling has probably increased as we approach an election year. The Conservative Government have gone a bit more cautiously and trodden a little more gently and carefully into this area than the previous Labour Government. The Labour Government went all guns blazing straight into the Labour anti-civil libertarian state they so carefully constructed and made sure they managed so effectively. The Conservatives have played this game a little differently, but we are now into an election year. So what is a good move to get people overexcited about political issues? What is the approach to take? It is, “Get a terror Bill, to make sure you are seen to be hard on this. That will differentiate us, and challenge the Labour party and all our political opponents to say we are doing this wrong.” That is not a game we have a particular interest in playing.

So we have this idea and this conversation we are having between the Government and Scottish Ministers, but the Scottish Government did not even get sight of some of the measures in this Bill on First Reading. I know that the Minister has been in touch with our new Justice Secretary, so he will know the unhappiness there is in Scotland about some aspects of all this. The Scottish Government have said that because we have responsibility for the public bodies mentioned in so many bits of this Bill, we want proper consultation. We are not interested in this fast-tracking and getting it through as quickly as possible because it is an election year—we want to do this right. Where we have devolved responsibilities for delivering this agenda, we want to make sure that the public bodies accountable to our Parliament will be properly consulted, so that we can shape up and make sure we have a proper agenda. We have therefore asked the Minister to take Scotland out of the Prevent side of these measures. The schedules relating to Scottish public bodies have already been dropped in part of this. I suggest, and I hope the Minister may be open to this approach, that he seeks to ensure that we at least have the opportunity to engage with our public bodies and consult them properly, and to make the right decisions that suit our agenda and our responsibilities. That would be good. Sometimes we tend to look at things such as the Prevent strategy in a proper, holistic way, considering how public bodies could also promote cohesion, well-being and democracy. That is the way we differ on looking at these things, and we hope the Government follow our approach.

Let me say something about my commitment and my reason for taking this on. David Haines, the British man so brutally executed by ISIS forces in Iraq, was a constituent of mine. His family were in Perth, and I was at the memorial service that was held. His killing was an appalling act and it brought this right home to my community. The way the people of Perth responded to what they had observed—the brutal, appalling murder—was nothing short of magnificent. They made sure that David Haines was properly commemorated and that his memory will endure in Perth, and it was fantastic. So I know how these issues are brought home to specific communities and I have seen the wonderful way communities unite to make sure they gather around that family, making sure they are supported, and try to understand. But the most impressive thing for me was that I saw a real attempt to understand what was going on within this—more so than probably the Government have done. People wanted to understand why this happened in our community and what special conditions led to this happening in a small, sleepy little city such as Perth.

Every single one of us in this House has a job of work to do to keep our communities safe and to keep brave people such as David Haines safe. David Haines went out there to help the world become a better place and to ensure that communities without help and assistance could be helped and assisted. All of us have a responsibility in this regard, so I will take no lectures from anybody in this House about being soft on terrorism or about our Government taking no interest in this matter. We all have an interest in this matter. We might not all agree on everything. I vehemently disagreed with the approach of the right hon. Member for Salford and Eccles when she was in the Labour Government. I was keen on what the Conservative-led Government were doing at first, but I am less keen now. But let us all work together. We need to look at this whole thing holistically. We should take responsibility for the things that we do wrong and challenge the horrible extremism and ideology that exist in our communities, but let us do it together, do it sensibly and do it constructively.

19:09

[Yasmin Qureshi (Bolton South East) (Lab)]

It is a pleasure to follow the speech by the hon. Member for Perth and North Perthshire (Pete Wishart), some of which I agreed with. Let me place it on the record that I also agreed with some of the things that were said by the right hon. and learned Member for Beaconsfield (Mr Grieve), the hon. Member for Cheltenham (Martin Horwood) and, of course, my Labour colleagues.

I ask the House to bear with me for a few moments while I explain what I did before I became a Member of Parliament. It is important for the House to know where I am coming from when I make the observation that I am about to make. I was a prosecutor for nearly 15 years, so I am not shy of having strong laws in the criminal justice system. I do not have a problem with people being prosecuted for crimes that they have committed and being sentenced appropriately. If people commit a serious offence, they should receive a serious sentence. I do not think there is a problem in having laws that deal with criminality.

I understand the position from which Governments approach this subject. Obviously, they have an obligation and a duty to protect their citizens. That duty must, of course, be balanced with individual rights and civil liberties. I know that it can be a difficult balance to strike, especially in these challenging times. Perhaps it is at times of pressure that a civilised society can be recognised. When a civilised society loses sight of its liberties, it is giving in to the terrorists. It is saying, “You have succeeded, because we have put up all these fences and brought in all this legislation.”

I ask the Government to consider the following points. On the issue of temporary exclusion orders, there should be proper legal and judicial oversight. There should be a categorical commitment that a UK national who is overseas will be allowed back into the country. At the end of the day, everybody knows that, under international law, a person will be stateless if they cannot come back to the country of which they are a national.

Earlier, I put a question directly to the Home Secretary. As I understand it, she said not that people would be stopped from coming back to the country, but that they would have to go on a managed programme, by which she meant that they could come back on our terms and conditions. The question is, what happens to the person who does not want to accept our terms? We can deal with them if there is evidence of criminality against them, as we can prosecute and, if necessary, imprison them. But what if no criminal allegation can be proved? What happens then if they want to return? The proposed legislation suggests that they can return only on our terms. I ask the Government to reconsider that concept in its entirety. If they want a managed return, the person who is subjected to the order should be able to go to the courts to challenge it. I do not mean the judicial review process, because that is incredibly complex and the Government have recently passed quite a lot of stringent rules about whether people can have legal aid for judicial review.

The process of challenging a managed return order should not be dissimilar to that which applies when someone is charged with a criminal offence. They can apply for legal aid, they can go to court and they can contest the allegations against them. That element should be strengthened in dealing with people who are excluded. Legal aid should be available in a very simple system, allowing people to challenge the orders in the proper courts, as opposed to having to go through the very circuitous route of judicial review. As a lawyer, I can tell hon. Members that that is not an easy route. A straightforward application to challenge orders, such as that which people would make in any other example of criminality, is the right way forward. I hope that the Home Secretary and the Opposition Front Benchers, when tabling amendments to the Bill, will consider the judicial safeguards.

The second part of the proposals involves taking away people’s passports or travel documents when they are travelling. I understand the rationale for that. A father or mother might ring up, saying that their child is travelling across the country and might be heading for somewhere they should not, and asking whether something could be done. I accept that it might not be possible, in the space of a few hours, to get a court order to ensure that there is a legal sanction behind the removal of that person’s documents. However, the proposal that the police or law enforcement agencies could keep the documents for up to 14 days—even after 14 days people might only be able to go to the courts for a judicial challenge—needs to be reconsidered.

Although there might be an urgent need for such a provision for the first few hours, or even for a day, the judicial oversight should kick in within a certain time—say 48 hours—of the stoppage taking place, rather than 14 days, which is what the Bill proposes if I understand it correctly. Even after those 14 days, the person would only be able to challenge whether the police officer had been diligent. They will say that they are diligent; what needs to be challenged is whether taking away the document was a right and proper decision. We know from history that whenever powers of stop and search are introduced, they are always abused and they are quite often never properly implemented. We therefore need to be careful about these draconian powers and how they are exercised. Adding a legal and judicial element to the process is necessary so that we have a balance between protecting the citizen from criminality and retaining people’s liberties. I hope that the Secretary of State will consider that. At the same time, it is pointless to have rights if people do not have the legal aid with which to exercise them. I hope that that will accompany this.

On TPIMs, I agree with the Home Secretary’s new definition involving reasonable probability. The standard of proof has gone up, but it should be even tighter. Provisions such as TPIMs take away people’s liberties and they should be able to challenge that. I know that people can challenge those orders in law. Members might not be aware that, interestingly enough, quite a lot of people who challenged their TPIMs in court were released from those orders, and that was with a very low standard of proof, as we call it in the legal system. I am very pleased that the standard of proof will go up and I think that there should be clear judicial safeguards in this regard as well.

I now come to my final observations on a point that is causing me some concern—the provisional statutory framework for universities, prisons, schools, nurseries and so on, intended to prevent radicalisation. It always makes me uncomfortable when the state tries to enter the arena of monitoring and controlling thought and discussion. Other hon. Members have alluded to the fact that some universities are worried that that might prevent the proper, sensible discussion of issues. There are many in this country, and across the world at large, who hold views that could be called socially or morally conservative, religiously conservative, or even radical; but there is a big difference between holding socially conservative views and getting to the stage of committing a criminal offence—that is a big jump.

Although I will wait to see the Home Secretary’s guidelines, I am concerned about another proposal in the legislation. If an institution does not carry out what it has been asked to do, or fails to monitor it properly, the Secretary of State can direct them to do it. It would be helpful to know what we are talking about in relation to the guidelines. I say this not to criticise, because I know that all Governments, of whatever complexion, do this, but when this type of legislation is introduced, we should have more time to analyse and discuss the matters sensibly and get the details. Regrettably, that has not happened in this case. We have not had enough time. I know that three days will be set aside for debate in Committee of the whole House, but we really should have had more time to discuss the measures in the Bill before it came to the Chamber today. I therefore look forward to hearing the Government’s proposals in relation to libraries, universities and other institutions.

Let me move on to my concerns about the state interfering in thought processes. The provision might look, on the face of it, very comforting and reassuring, but will it actually achieve anything? Will it be effective, or are we just bringing in another layer of rules and regulations without thinking about whether they will work? I think that organisations should be told that these dangers exist, and I do not see anything wrong with sending out guidelines that say, “This is the kind of thing you’re looking for,” but I think they should be voluntary, not statutory. I think that resources should be made available to help institutions deal with radicalisation and extremist views.

Although everybody is talking about radicalisation in general, we know that we are talking about a tiny number of people who call themselves Muslims but are doing things that I can quite honestly say most of us just do not connect with in any shape or form. As the hon. Member for New Forest East (Dr Lewis) said, of the 2.5 million to 3 million Muslims in this country, those people number in the hundreds. Many of them are young, and most of their information seems to come from the internet.

It is right that there should be a counter-narrative. The state should not set up a unit specifically to deal with that, but there is nothing wrong with going into a Department and putting in place funding, for example, to look at countering the narratives. Many Members have talked today about certain institutions that have been looking at radicalisation, such as the one in King’s college, but there are other people who have looked into it who, perhaps because what they say is sometimes a little broader, do not get enough attention.

A famous American academic, Professor Kundnani, has looked in detail at all aspects of radicalisation, and one of his suggestions—this is very pertinent—is that in universities and places of education there should be spaces for wide-ranging discussion of religious ideology, identity and foreign policy. Those spaces should not be undercut by the fear that expression of radical views will attract the attention of intelligence agencies or counter-terrorism police. If we scare people so that when they come out with some radical or conservative idea they will not discuss it, we will never find out what is going on in their head and never be able to challenge them and say, “Actually, your narrative is wrong.” A safe space should be allowed for that discussion to be had.

[Mr Khalid Mahmood]

When we start to engage with those with radical views that differ substantially from the views of the general Muslim community and of Islam, allowing them access at that level sets us back, because instead of putting their views forward, they put the whole radical doctrine and ideology forward, which weakens the entire case. We have done too much of that here in the past. We need to start to tackle those with very different and radical views that need to be addressed.

[Yasmin Qureshi]

I am sorry, but I respectfully disagree with my hon. Friend. Yes, some people have radical views that we would all disagree with, but unless we hear what they have to say, we cannot challenge them.

I speak to a lot of young people all the time, especially young Muslim males, and I listen to what they say. Sometimes they come out with things that do not make me think for a minute that they are going to commit a crime, but show that they have a view about certain issues. I sit there and explain to them, “That is not right and this is how it should be,” and they listen. That kind of discussion is important, and we cannot stifle it.

[Jeremy Corbyn]

My hon. Friend is making an interesting contribution. Does she think that young Muslims, particularly young Muslim men, sometimes feel rather patronised because the only concern of the whole world is the danger of their being radicalised? I have had many discussions with young Muslim men at mosques in my constituency, and in schools and colleges, and their concerns are jobs, housing, health, and career prospects. They sometimes feel that they are being unfairly singled out as a danger to society, when they want to make a contribution just like everybody else.

[Yasmin Qureshi]

I thank my hon. Friend for that intervention. He will not be surprised to hear that I entirely agree with him.

As somebody who talks to a lot of young Muslim males, let me explain that they are very fearful and frightened at the moment. We see all the headlines in the newspapers about what happened at the school in Birmingham, for example. Yes, what happened at that school was wrong, but pictures are painted that every Muslim school in the country is acting in that way, or that every single young Muslim male is behaving in a certain way. That kind of narrative is dangerous. Sometimes we in this place need to be careful about what we say as well, because these people are very vulnerable.

While I have no doubt that people I talk to are not going to do anything stupid or wrong at all, it is appropriate to be able to discuss things. In talking about a safe space, I do not mean that people should be allowed to say things unchallenged, but that we should hear what they have to say and then challenge them and tell them that they are wrong. Unless we confront people’s difficult thoughts, we will not be able to challenge them. That is how we deal with this. Professor Kundnani has suggested that proper research should be carried out with some of the people who have returned from Syria and other places to find out their motivation for going there.

Governments and politicians can certainly do a lot more to furnish a counter-narrative. As my right hon. Friend the Member for Knowsley (Mr Howarth) said, we should see on the internet a counter-narrative to the other narrative. That is very important. As the Home Secretary has said, many imams and scholars of Islam living in this country post on websites and blogs and clearly state that the stuff that ISIL and others are doing is completely un-Islamic. It is important for the Government and institutions to push what those people and scholars have written to the forefront of the media, so that the country at large and young people can be educated by it.

[Dr Julian Lewis]

That is precisely the sort of role I see the Government playing—not setting themselves up as Islamic scholars, but giving support to those authentic Islamic scholars who can speak with authority.

[Yasmin Qureshi]

I agree. I will finish by saying that there are people in this country who can help to create the counter-narrative, which is really important. If we sort out the narrative, half of this Bill will not be necessary.

19:30

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

The Home Secretary set out in her opening remarks why she believes it is necessary to introduce this Bill. She referred to the threat level, which has increased, and to the number of terrorist threats thwarted by our intelligence and security services and the police. She also referred to the need for the Bill’s additional powers to keep this country safe.

My right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper), the shadow Home Secretary, said that we will work with the Home Secretary: “We agree with her on some things, but we do not think she has got it right yet on others, and amendments are needed. Parliament as a whole must be thoughtful and responsible, because our liberty and security depend on each other. We need both in a democracy to keep us safe.”

This afternoon’s debate has been very thoughtful and responsible. The contributions of Members on both sides of the House have been of very high quality, and the debate has been very well informed and knowledgeable. The former Attorney-General, the right hon. and learned Member for Beaconsfield (Mr Grieve), started with a succinct but powerful speech. The Chair of the Home Affairs Committee, my right hon. Friend the Member for Leicester East (Keith Vaz), reminded the House of the need for effective scrutiny of legislation and the role the Committee can play in that regard. He was followed by the right hon. and learned Member for North East Fife (Sir Menzies Campbell), who is an esteemed member of the Intelligence and Security Committee. My right hon. Friend the Member for Salford and Eccles (Hazel Blears), who is also a member of the ISC and a former counter-terrorism Minister, said that the provisions were both necessary and proportionate.

I will comment on Members’ contributions when I refer to specific provisions. The hon. Member for New Forest East (Dr Lewis) is another member of the ISC, and he was followed by my hon. Friend the Member for Birmingham, Perry Barr (Mr Mahmood), who speaks with such authority, as a member of the Muslim community, about his own experience in Birmingham, particularly with regard to schools and Operation Trojan Horse. He was followed by the hon. Member for Cheltenham (Martin Horwood) and it is important to note that GCHQ is in his constituency. I think that all Members would want to pay tribute to the security and intelligence services for all the work they do, every day of the week and every week of the year, to keep us all safe. I think the hon. Gentleman is the Liberal Democrat spokesman on this issue and it was interesting to hear him say that he thought the Bill strikes broadly the right balance. He noted in particular the support for the data retention provisions.

My right hon. Friend the Member for Knowsley (Mr Howarth), who is a former Home Office Minister and another member of the ISC, spoke powerfully about radicalisation and the work of the International Centre for the Study of Radicalisation at King’s college to inform the debate. We then heard from the hon. Member for Perth and North Perthshire (Pete Wishart). We know, of course, that terrorism has touched Scotland in recent years, with the attack on Glasgow airport. Finally, my hon. Friend the Member for Bolton South East (Yasmin Qureshi) spoke with her experience as a prosecutor and her knowledge of her community.

I will now briefly refer to the specific contents of the Bill to pick up some of the issues raised in the debate. Part 1, which deals with exclusion and passports, introduces new powers to deal with the emerging threat from ISIL—it is known by various names—and the British citizens and residents who have gone out to fight for it. The level of the threat is unprecedented, and we accept the need for new powers.

My right hon. Friend the Member for Salford and Eccles referred, very interestingly, to academic studies about those who go to fight but then want to return to this country, and she mentioned the three categories of the disturbed, the dangerous and the disillusioned. That will help to inform our debate on ensuring that the laws are proportionate and deal with the problems we face.

As my right hon. Friend the shadow Home Secretary set out, we have some concerns about aspects of part 1. Strong powers must be accompanied by equally strong checks and balances, but such checks and balances are absent from the Bill.

That issue was raised by the right hon. and learned Member for Beaconsfield, who made a very interesting comparison. He used the fact that a regime was put in place to ensure that there was judicial oversight, originally for control orders and then for TPIMs, to argue very effectively that we need to do something similar for exclusion orders. He also made a point about passports and possible claims for compensation, and I hope that the Minister for Security and Immigration will respond to that. The right hon. and learned Member for North East Fife also talked at length about exclusion orders and his concerns about interfering with the right of return.

We will table amendments in Committee to strengthen part 1. My hon. Friend the Member for Bolton South East asked whether we would do so, and I can reassure her that we will. We will also seek information about the exclusion power, as it is called in the Bill. As my right hon. Friend the shadow Home Secretary mentioned, the Prime Minister originally promised to exclude people from the United Kingdom, but the Home Secretary has said that the power is in fact about managing the reintroduction of individuals into the UK on certain terms. The process is important, but many questions remain about how part 1 will work, and about whether the powers will be used proportionately.

On part 2 on TPIMs, we of course welcome the Government U-turn. Having looked at the evidence, they are reintroducing relocation powers. The Opposition have called for that to be done for several years. The last Tory Home Secretary, the noble Lord Howard, has also called for it, as have both the current and the former independent reviewers of terrorism legislation. We are therefore very pleased by that change, and we also welcome the proposals to strengthen TPIMs in various ways.

We will seek clarification from the Minister on certain issues in Committee, including the 200-mile relocation limit and firearms licences, which my right hon. Friend mentioned. There is concern about the fact that firearms licensing officers did not know in the past that someone was on a TPIM.

[Mrs May]

indicated dissent.

[Diana Johnson]

I am very pleased that the Home Secretary is shaking her head, but it would be helpful if the Minister enlightened us about why the Government feel the need to make a provision specifically about that issue.

Part 3 is about data retention. We know that telephone records have always shown who receives calls and from whom, and that it has always been possible to link a number to the individual who owns the line. The Opposition think that it is appropriate for equivalent records to be kept for e-mails and peer-to-peer sharing.

As my right hon. Friend said, that issue is particularly important in relation to the National Crime Agency. It has IP addresses for about 20,000 individuals whom it suspects of accessing online child abuse images, but against whom it has not been able to follow through. We think that this power is urgently needed because, until the NCA can get the names of the 20,000 individuals, it will not know how many of them are known sex offenders, are working with children or are living with children. Those are the most basic checks that should be undertaken. The case of Myles Bradbury, which ended in the last 24 hours, should serve as an urgent reminder to the Government of the dangers of the NCA failing to follow up on leads. We accept what was said this evening about the drafting of clause 17. It should be looked at to improve the clarity.

On part 5, we welcome the fact that Prevent is being put on a statutory footing. My right hon. Friend the Member for Salford and Eccles made an excellent contribution on that and spoke, in particular, about the need for consistency and evaluation. It is important to show that whatever is put in place is working and having an effect. We are concerned that the guidance must be made available as soon as possible. Even if the guidance is in a draft format, it would be helpful to have it available when the Bill is in Committee over the next couple of weeks so that we can see what the Government’s thinking is on this issue.

There is, of course, a need for the community to develop resilience and for us to get into the DNA of the community, as a number of hon. Members said. The point has been made strongly this evening that the Department for Communities and Local Government has not taken the lead on the Prevent agenda in the way that the Home Secretary had perhaps hoped. It is therefore important that Prevent is put on a statutory footing. There are lessons to be learned from the experience of my hon. Friend the Member for Birmingham, Perry Barr of schools in Birmingham in relation to Prevent and the duties that will be put on schools.

Finally, the hon. Member for New Forest East gave a thoughtful speech about the need for a counter-narrative at a national level, and my right hon. Friend the Member for Knowsley spoke about how private companies can be engaged in getting that message out. That area needs to be developed.

In conclusion, this Second Reading debate has been constructive. It has highlighted where there is support for the provisions in the Bill and where changes are needed. It has raised a series of specific questions for the Government to answer in the coming stages of the Bill’s passage. We must act proportionately, ensuring that the balance between security and liberty is dealt with properly, and that all the checks and balances are in place, in order to secure as much support as possible for the proposals.

19:42

[The Minister for Security and Immigration (James Brokenshire)]

In responding to what has been a very good debate, it is important to underline the context and background to our discussions. As the Home Secretary emphasised in opening today’s debate, the terrorism threat to the UK is considerable and as bad as it has been at any time since 9/11. That is the assessment that we have been given. It is our duty as a Parliament to ensure that our law enforcement and intelligence agencies have the tools and powers that they need to keep us safe.

I am grateful to all right hon. and hon. Members who have contributed to the debate. Many of them have great knowledge of the subject matter and experience in their communities, which has ensured that the debate has had great breadth and has touched on many issues. It is notable that we have heard from four members of the Intelligence and Security Committee of Parliament, the Chair of the Home Affairs Committee, a further member of the Home Affairs Committee, a former Attorney-General and other Members who have great knowledge, expertise and experience. That has contributed enormously to the debate. I believe that if we continue in that vein and with that approach, the Bill will benefit.

It is important to underline some of the themes of the debate, such as the need to ensure both privacy and security. The right hon. Member for Salford and Eccles (Hazel Blears), my hon. Friend the Member for Cheltenham (Martin Horwood) and the right hon. Member for Knowsley (Mr Howarth) made that point. The two things are not mutually exclusive, and should be mutually reinforcing—one goes with the other. Security brings us liberty, and liberty is basically what we are trying to provide and protect through the security arrangements.

The issues of proportionality and necessity have also been mentioned, and we believe that they are reflected in the measures in the Bill. We look forward to the House’s forthcoming scrutiny and examination of those measures. I note that, almost without exception, the right hon. and hon. Members who have spoken have recognised and understood the importance of the powers in the Bill and broadly supported them, even if some would like to see further focus and reflection on specific aspects of them. On a subject as vital as national security, and confronting and combating terrorism and the extremism that may lead to it, it is right that the House presents a united front to those who would seek to do us harm. The debate this afternoon and this evening has done precisely that.

The threat that ISIL presents to us is serious, as my right hon. and learned Friend the Member for Beaconsfield (Mr Grieve) said, but it is not the only threat we face. There are a range of other terrorist organisations, including Boko Haram, al-Qaeda in the Arabian Peninsula and al-Shabaab, and we must also protect ourselves from the threat of home-grown extremists who have been radicalised here in the UK. I recognise some of the points that the hon. Member for Perth and North Perthshire (Pete Wishart) made, but the threat is not static. It is dynamic—it constantly evolves and changes. That is why it is right that the Government continue to challenge ourselves on what more we can do through legislation, but also through other processes such as the extremism taskforce. That is reflected in the Bill.

It important to recognise the excellent job that the police, MI5 and others do in keeping us safe through the actions that they take day in, day out and week in, week out. My hon. Friend the Member for Cheltenham, who has GCHQ in his constituency, made that point well. I should put on record, as other Members have, our recognition of and thanks to all those who work so hard to ensure the security of this country.

Some broader themes were also raised, such as the issue of counter-ideology and narrative. The hon. Member for Birmingham, Perry Barr (Mr Mahmood) made points about ISIL, which is clearly neither Islamic nor a state. The extremists who seek to advance its poisonous narratives do not do so in the name of Islam, which is a peaceful religion practised by millions of people around the globe. It is important to underscore that clear message from this House—we recognise the threat, but ISIL’s narrative is twisted and poisonous and does not represent Islam, which is one of the great religions.

On the issue of a counter-narrative, a number of Members, including the hon. Member for Bolton South East (Yasmin Qureshi), mentioned communities standing up. It is important to recognise that 100 imams have stood together and signed a letter absolutely condemning the actions of ISIL and others. That has shown a community coming together, and it has used social media to do so. It has used hashtags such as #NotInMyName and #MakingAStand to ensure that a counter-message is delivered in a way that is likely to reach those who need to be reached. Of course we want more of that, but it is important to recognise the stances and responses that the community has given to confronting and combating some of the sheer evil that has been perpetrated, and how it is making a stand in a direct and powerful way.

[Keith Vaz]

The Minister is making a sensible and thoughtful speech and his tone is absolutely right. May I put to him a point that I put to my right hon. Friend the Member for Salford and Eccles (Hazel Blears)? Has any research been done on the tipping point and the moment a law-abiding citizen suddenly becomes a radical jihadist? We have a lot of experience in counter-terrorism and have spent a huge amount of money on the issue. Are we any closer to knowing where that profile changes?

[James Brokenshire]

This is a complex subject and we cannot point to one individual factor for a specific individual. We can examine the profiles and backgrounds of terrorists who have been convicted for their crimes, but it is hard to generalise. We can point to individual factors or circumstances that may have contributed over a number of years, and some contributions to the debate have been about the vulnerability of certain individuals. Equally, for whatever reason, some people have sought to create an identity by allying themselves to an extremist organisation in some way. There is good understanding, but answers will be different for different circumstances and individuals, and it is important to understand the layers and complexity. Equally, we must look at the safeguarding agenda. Our work through Prevent is to ensure that front-line professionals are acutely aware of identifying any issues, so that people are directed to support and measures and do not progress down the path towards radicalisation and terrorism. We will continue that important work.

[Mr Khalid Mahmood]

Following on from what my right hon. Friend the Member for Leicester East (Keith Vaz) said, a study has been done by Professor Kam Bhui of Queen Mary university of 600 people from London and Bradford—it should have been Birmingham, but it was not—on a clinical and psychological basis. That provides a certain way forward although it does not address the issue of ideology.

[James Brokenshire]

That is why it is so important that we continue to see that response from the community and families. The Home Secretary mentioned FAST—Families Against Stress and Trauma—and the good work it seeks to do to encourage families who are concerned about a loved one or someone they know to have the confidence to come forward to talk to someone. That may not necessarily be the police—it may be another agency or someone from the community—but where there are concerns we should act earlier to prevent someone from moving down a pathway that might lead them to be radicalised or to want to make the journey to Syria or Iraq. We must give a clear message that that is not the way to help or assist in that conflict.

On oversight and engagement, I am keen to ensure that we respond to Select Committees—indeed, I will give evidence on the Bill tomorrow morning to the Joint Committee on Human Rights. The Home Affairs Committee will also hold an evidence session tomorrow, and we will respond to inquiries from various Committees that have an interest in this matter.

Today’s main contributions have largely focused on the temporary exclusion order and Prevent, so I will concentrate my remaining remarks on those issues. On discussions with our international partners, as the Home Secretary made clear in her opening remarks we are actively engaged with a number of countries, and those discussions have been positive thus far in relation to practical operations. On the ability of someone to request a return, I point right hon. and hon. Members to clause 5(1), which states that the Secretary of State “must” issue a permit to return. The concept is of a managed return when a request is made, and the only circumstances in which a permit can be refused is if a person fails to attend an interview with a police or immigration officer. Therefore, the sense that we will deprive people of their citizenship or make them stateless does not bear examination, because they will have that right to return and the ability to make that request.

The speedier mechanisms can operate in circumstances around deportation. We will seek to cancel someone’s travel documents and to ensure that they can be put on watch lists, so that they can be met and we know when that return will take place. That is our stance. I therefore tell my right hon. and learned Friend the Member for North East Fife (Sir Menzies Campbell) that we are not seeking to say that someone cannot return in perpetuity. As we have made clear, those concerned will have the right to return to the UK. We believe and are confident that the measures we propose are compliant with our international obligations and relevant human rights legislation.

[Sir Menzies Campbell]

But an individual can return only under the terms specified by my right hon. Friend the Home Secretary. Can the Minister think of any other occasions or circumstances when the right of return has had conditions attached?

[James Brokenshire]

The power rightly reflects the challenge and threat we see from those returning from areas of conflict. They might have been radicalised and might have been acting on the instructions of a terrorist organisation. That is why we judge that the power is necessary. Equally, we know that the power deserves appropriate scrutiny, which I know the House will give the measures.

We think it is important to put Prevent on a statutory basis to ensure that there is greater consistency in the manner in which it is provided. It will also ensure that organisations recognise their responsibilities. The measure is about preventing terrorism. It is important to understand the specific frame in which Prevent exists, and to underline the work Prevent has undertaken since 2011. It has delivered 180 community-based projects; it ensures that front-line officers understand the context; and, in the 2013-14 financial year, Prevent local co-ordinators in our 30 Prevent priority areas worked with more than 250 mosques, 50 faith groups and 70 community groups.

In her opening remarks, my right hon. Friend the Home Secretary addressed a concern that has been expressed about university campuses. Her point was that universities’ commitment to freedom of speech and the rationality underpinning the advancement of knowledge mean that they represent one of our most important safeguards against extremist views and ideologies. We need to ensure that they take their responsibilities seriously and have the basic framework in place. That is what the guidance will seek to enunciate. I hear and understand the point made on giving greater clarity in the guidance. It is our intention not only to publish the guidance, but to put it out to consultation, to ensure that we receive appropriate inputs.

To the hon. Member for Perth and North Perthshire (Pete Wishart) I say that it is the Government’s intention that the measure will apply to Scotland, on the basis that counter-terrorism and national security are reserved. The provisions will be subject to further consultation and discussion with Ministers in the devolved Administrations, which is apt, right and proper.

In conclusion, I reiterate that the threat we face from terrorism is real and severe. The collapse of Syria and the emergence of ISIL in Iraq not only threatens the stability of the middle east, but presents a clear danger in the UK. The Bill will ensure that our law enforcement and intelligence agencies have the powers they need to keep us safe. I hope the House agrees that this is a matter of the utmost importance. We are seeking to ensure that the Bill is passed speedily but not over-speedily, so that there is proper consideration. We believe that the time allowed in Committee and on Report will ensure that the House can do that. We will ensure the swift passage of this vital legislation, but in a way that enables appropriate examination. We recognise and appreciate that the Opposition will, as they have said, do that constructively. We look forward to working with them in that regard. On that basis, I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Counter-Terrorism and Security Bill (Programme)

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

That the following provisions shall apply to the Counter-Terrorism and Security Bill:

Committal

(1) The Bill shall be committed to a Committee of the whole House.

Proceedings in Committee

(2) Proceedings in the Committee of the whole House shall be completed in three days.

(3) The proceedings shall be taken on the days shown in the first column of the following Table and in the order so shown.

(4) The proceedings shall (so far as not previously concluded) be brought to a conclusion at the times specified in the second column of the Table.

Table

Business without Debate

Tuesday 2nd December 2014 Commons Chamber

delegated legislation

Tuesday 2nd December 2014 Commons Chamber

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

Dangerous Drugs

That the draft Misuse of Drugs Act 1971 (Amendment) (No. 2) Order 2014, which was laid before this House on 7 November, be approved.—(Harriett Baldwin.)

Question agreed to.

Tackling Corruption

Tuesday 2nd December 2014 Commons Chamber

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

20:00

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

Tonight’s debate on the Government’s approach to tackling corruption is timely for a number of reasons. It builds on the progress and leadership given by the Prime Minister at the G8 and G20. It comes as we anticipate the long-awaited Government report into corruption, which has been delayed for a year but is due out, we understand, later this month. It comes as London is hosting a conference of 14 overseas territories discussing their approach to corruption, and it comes just a day after changes applying to extraction companies on disclosing payments came into legal force.

The debate is not just timely; it is relevant to London specifically. London is home to more than 250 foreign banks, the most of any financial centre. It is the largest currency trading centre in the world, processing 18% of cross-border transactions. In 2013, the then regulator, the Financial Services Authority, estimated that the level of money being laundered through London and the UK was between £23 billion and £57 billion. Indeed, the Home Secretary used the £23 billion figure when she gave a speech to the Royal United Services Institute, which suggests that the Government accept the scale of the challenge. To put those figures into global context, the African Union estimates the cost of corruption in Africa to be $148 billion and the World Bank estimates that up to $1 trillion is paid in bribes. We know this is a serious issue, and that is why it is timely that Parliament should address it.

I want to highlight three broad themes. The first is resourcing: how to get investigating corruption right and how we give life to the Government’s plan and address some of the challenges they face on the transfer of key personnel to the National Crime Agency. Secondly, how do we improve the policy in terms of industry, so that we move from a quantity approach, particularly on suspicious activity reports, to one based more on quality and targeted at the more serious multi-million pound cases rather than low-value transactions? Thirdly, I want to highlight a number of loopholes in the legislative framework, given that there will be the Second Reading of the Serious Crime Bill in the next week or two.

On resourcing, will the Minister clarify whether colleagues in the Department for International Development have asked for reassurance on key financial investigators moving to the NCA, particularly from the proceeds of crime unit and the City of London anti-corruption units? Is it the case that, to date, only two of the 35 key investigators have agreed to move across? Such expertise takes time to grow. If we are to have a new plan, there is clearly a risk if the experts are not there to implement it. I understand that, in a letter to the Home Secretary on 20 November, the Bond group of non-governmental organisations also highlighted this issue. Given that police officers do not TUPE across and terms and conditions are less favourable, is the Minister confident that the staff will move across? I understand that in the two years that the NCA has had the intelligence unit, not been a single investigation has resulted from that intelligence. We need to tackle the concerns about resourcing.

Will the Minister update the House on the challenges of buying in resource, if that is seen as a short-term fix? The case of Malawi and “cashgate” is a good example. DFID paid for a British firm, Baker Tilly, to provide expert consultancy advice. The scandal is known as “cashgate”, but we have not recovered any cash. Has there been any enforcement? We gave £106 million—a significant amount—in aid to Malawi last year. How much has been spent on the investigation? Is it true that these consultants had no powers to require banks to disclose financial transactions or request intelligence from foreign Governments? If so, what are the constraints on using external consultants in respect of such investigations in the future?

For policy reasons, the Government have decided not to pay for law enforcement out of money recovered from corruption investigations, but given that we have fewer than 100 investigators—in the Serious Fraud Office, the proceeds of crime unit and the City of London unit—would that not make sense? It would allow us to conduct more investigations, which would be in the interests of the countries being defrauded.

Will the Serious Crime Bill deal with the evidential test? It appears to be set too high and so acts as a cost disincentive to the bringing of cases, which is compounded by the time scales. Where there is a financial institution with a complex, multi-jurisdictional case, perhaps spanning many years, law enforcement agencies have just 38 days to build a case to the satisfaction of the courts to block a payment. That is clearly insufficient. We could learn lessons from Guernsey and its approach in the Indonesian logging case. We need a mechanism of unexplained wealth orders to allow law enforcement agencies to stop the clock and allow time to investigate. Does the Minister accept that 38 days is wholly inadequate when it comes to building a complex legal case on payments?

On the relationship with industry, the suspicious activity report procedure is based on regulatory compliance, rather than investigation. The industry pays out millions of pounds for document checks on one’s granny in respect of low-value transactions, while serious cases receive little scrutiny. Of the 316,527 serious activity reports filed by banks last year, just 110 were looked at by the proceeds of crime unit. The banks do not want to exit profitable clients and see them go to other firms, so we have this defensive filing of suspicious activity reports, 95% of which are not acted on by law enforcement agencies—they just sit on file for intelligence. It is not cost-effective.

Last Thursday, on the BBC’s “Question Time”, the Chief Whip—the Whip might want to sharpen her pencil—said that Facebook had been aware of intelligence relating to a terrorist attack but had not passed it on. Do the Government know whether the 300,000 or so suspicious activity reports filed by banks include any transfers of funds to people complicit in those attacks? We do not have the mechanism for filtering them effectively. Is that an issue of concern to the Government, particularly in the light of the discussion about Facebook?

We need to shift away from this catch-all defensive policy to one based on targeting high-value corruption cases, and we need to work more in partnership with financial institutions, and combine that with a greater fear factor in respect of money laundering. Does the Minister share my concern that the current consultation relating to the Financial Conduct Authority seems to be repeating past errors? We had a Financial Services Authority report in 2011 that showed problems relating to the money laundering of banks, and two weeks ago we had an FCA report showing again that small banks were failing on money laundering. If we go back to the 1990s, 23 banks were complicit in money laundering, yet no action was taken.

It might surprise the House to know that over the last decade, only two fines appear to have been imposed against individuals for money laundering, the highest of which was for £17,500. How confident is the FCA that, particularly given the number of foreign banks in the UK, we have the right approach to money laundering even today?

[Jim Shannon (Strangford) (DUP)]

I appreciate the opportunity to intervene. The hon. Gentleman refers to money laundering. In Northern Ireland, over some 30 years of a terrorist campaign, it was clear that paramilitaries were involved in it. A wealth of experience was built up by police officers both from the Royal Ulster Constabulary and from the present Police Service of Northern Ireland. If the hon. Gentleman wants to enable more prosecutions for money laundering, does he think it might be a good idea for the Government and the Department to take on some of those officers who have now retired and take advantage of their expertise to bring more prosecutions for money laundering?

[Stephen Barclay]

The hon. Gentleman makes an interesting point about how we learn from other jurisdictions in other territories. Italy is another example, with its experience of dealing with the mafia. The hon. Gentleman speaks from experience of the challenges within Northern Ireland where there is a great deal of expertise, from which we can learn.

On the fear factor for individuals, the Parliamentary Commission on Banking Standards put forward very good proposals, allowing a reversal of the burden of proof, but it is still the case that money laundering reporting officers are often not seen enough within the organisation and, not being at executive level, they often do not control the budget. That risks repeating past mistakes. Let us look at HSBC and the problems it got into in Mexico. To what extent does the Minister believe that the current regime would ensure that at a group level executives would be liable individually for fines if similar mistakes were made today?

The High Court recently heard the Nigerian OPL 245 case, which was dealt with by Lady Justice Gloster. It reveals a current impediment that applies to the judiciary, which I would like to draw to the Minister’s attention. In her ruling, Lady Justice Gloster said:

“I find as a fact that, from its incorporation and at all material times, Chief Etete had a sufficient beneficial interest in Malabu”.

She refers to the well-known case of Malabu, a $1 billion oil fraud. One can only look at that judgment, which says that if Etete had the beneficial ownership, he must have had it from the point of origin when he was the oil Minister of Nigeria. That is where the companies in beneficial ownership sat, having been set up in six days by a lawyer convicted in the French courts of money laundering. Yet Lady Justice Gloster could essentially adjudicate only over the spoils of that corruption. She had no power to do otherwise, because neither of the parties to the case claimed that the funds were corrupt. To what extent would the new plan put forward by the Government allow the judiciary greater powers where, in its judgment, a case that is being disputed is corrupt? That applies particularly in the arbitration courts, given the lack of transparency often seen in those proceedings.

Of course, non-governmental organisations could act as a friend of the courts in theory, but cost pressures invariably make that very difficult, while the likes of the Proceeds of Crime Act 2002 cannot be used to intervene unless there is a victim. If in this case the Nigerian Government are not of the view that they have been defrauded, very little can be done. We need to look at the way our courts operate in that regard.

Property is another area. It has been suggested that 45% of London properties valued at over £2 million are currently owned by offshore companies. The Prime Minister has taken some positive measures relating to the register of beneficial ownership, but the Minister must realise that that is null and void when it comes to those properties owned by offshore companies.

It is a well-known fact that beneficial ownership is very opaque, especially in the case of shell companies. Estate agents currently have no duties in relation to buyers, and even their duties in relation to the sellers who are their clients usually extend only to the offshore companies with which they are acting, or their lawyers. Would the Minister consider a requirement for beneficial ownership of property worth over £2 million to be disclosed to the Land Registry? She might even want to consider the imposition of a fine on offshore property-owning companies that did not wish to comply with the disclosure requirement—along the lines of those that were introduced as a result of recent banking regulatory changes—with the proceeds going to good causes. That simple measure could be applied over the next 12 months, and could bring a huge amount of transparency to the top end of the property market, where we know that money is being laundered.

Let me now ask some questions about legislation. First, will the Minister update the House on the position of the British overseas territories and Crown dependencies, given the lack of transparency surrounding their plans? Consultations in the British Virgin Islands closed 300 days ago but nothing has been reported, and the same applies to the Cayman Islands. Secondly, it is feared that industry guidance might fetter the effectiveness of new United Kingdom law relating to the transparency of payments to Governments for the extraction industry. A QC’s opinion recently raised concern in that regard. Will the Home Office be making any representations to the Department for Business, Innovation and Skills on the subject?

Thirdly, will the Government make it a condition that the countries to which we give aid comply with the United Nations convention against corruption? In particular, will they provide global leadership in requiring the publication of asset declarations on politically exposed persons? The UN has pressed for that, and I do not understand why we are giving aid to countries without expecting them to comply with the convention. Fourthly, will the United Kingdom introduce administrative orders, such as those introduced by Switzerland and Canada, so that we can rapidly freeze assets in post-revolutionary circumstances?

Let me end by referring to the troubling case of Sergei Magnitsky, about which concern has been raised with the Government by Members in all parts of the House, and on which there appears to have been a woeful lack of progress so far. The Minister will be well aware that the 25-year-old Russian lawyer was tortured to death in a Russian jail. I know that detailed forensic information has been given to the UK Government about British nationals who were complicit in the money laundering linked to his death, and that information has been provided by Hermitage Capital Management, but the UK authorities appear to have taken no action, despite a Back-Bench debate initiated by my hon. Friend the Member for Esher and Walton (Mr Raab), and supported by the hon. Member for Rhondda (Chris Bryant) and many others.

Other Governments have given leadership, notably the United States Congress, but there has been a serious lack of action from the UK Government in relation to the proceeds of the tax fraud that was linked to Magnitsky’s torture and death. What reassurance can the Minister give that there will be a change of gear, and that amendments will be tabled to the Serious Crime Bill to give effect to it?

20:19

[The Parliamentary Under-Secretary of State for the Home Department (Karen Bradley)]

I congratulate my hon. Friend the Member for North East Cambridgeshire (Stephen Barclay) on securing the debate. I must be honest: I will endeavour to respond to the many points that he has raised, but, given the time that is available, I suspect that I shall not be able to address them all. Let me reassure him, however, that my officials and I have heard everything that he has said, and I have already asked for a meeting with him to be arranged. I know that he has great expertise and experience in this regard, and I think it would be helpful to sit down with him and explore his comments and their practical implications. The figures he quoted in his speech show just how important it is that the Government tackle this issue, and I was interested to hear his points about the resourcing, having a targeted approach and dealing with loopholes. That offers a good structure to consider this matter by.

This Government recognise that corruption harms society, undermines economic development and threatens democracy. The impact of corruption is disproportionate to the level and the frequency at which it occurs in the United Kingdom, and often has serious ramifications in terms of public confidence across the public and private sectors. I want to make it clear that the Government are totally and absolutely committed to tackling corruption in all its forms. As my hon. Friend highlighted, this Government are doing more than any before to tackle the blight of corruption both here in the UK and around the world. In our serious and organised crime strategy, which we published last year, we set out what the Government are doing to improve our anti-corruption systems and to stop organised criminals using corruption as a tool of their trade, and in our open government partnership national action plan we acknowledged that, although the UK already has good structures and legislation in place, there was more to do to improve our standing at home and better manage our reputation for dealing with corruption and bribery offences overseas.

As part of that work, we committed to publishing a robust cross-Government anti-corruption plan that will bring greater co-ordination and coherence to the work that is already ongoing and the work we plan to take, from preventing corruption in the first instance to taking effective enforcement action when it arises, as well as increasing the protection of the public and private sectors. I am pleased to tell the House that we will publish that plan very shortly.

My hon. Friend is also aware that the Prime Minister recently appointed my right hon. Friend Minister for Business and Enterprise as the Government’s anti-corruption champion, and he and I have been working together across Government to ensure that the commitments set out in our anti-corruption plan are fully implemented and make a real difference to some of the points that my hon. Friend raised tonight.

It is also important to recognise, however, that we have not simply waited to publish a plan before starting work on these important issues. We already have some of the most comprehensive anti-bribery legislation in the world, and were recently recognised as one of only four active enforcers globally by Transparency International, one of the leading non-governmental organisations working in this area. Where we have found gaps in the legislation, such as in relation to police corruption, we have brought forward new measures to address them. My hon. Friend referred to the Serious Crime Bill, which has been through the other place and which will shortly receive its Second Reading here—at some point. In working through that Bill, we will be able to debate again many of the points raised and we will be able to look at how we can tighten our legislative framework as much as possible.

My hon. Friend talked about transparency, which is also a key tool in the fight against corruption, and this Government have put transparency at the heart of our approach to reducing the opportunity for corruption. As my hon. Friend will know, measures are being taken through this House to establish a publicly accessible central register of company beneficial ownership. This will ensure that law enforcement and tax authorities have access to the information that will help them to tackle corruption, tax evasion and the laundering of the proceeds of crime. In my own professional experience before I came to this place as a tax accountant, beneficial ownership was one of those phrases I used on a frequent basis and was a great fan of. It is important to reiterate that the UK made beneficial ownership a cornerstone of our G8 presidency in 2013, so that we can tackle tax evasion and fraud and promote greater transparency of company beneficial ownership.

Despite comprehensive international rules to prevent money laundering from being in place, we recognise that some financial institutions failed to comply effectively with the requirements placed upon them, and we are determined to be a global leader in this space by taking forward legislation to ensure UK companies know who ultimately owns and controls them and that this information is made publicly available. I think we can all agree that greater transparency about who owns and controls our companies should make it more difficult to conceal an individual’s involvement in a company, and should act as a deterrent to crime. The points that my hon. Friend has made about ownership of property and other assets are vital if we are to stand as a world leader in tackling corruption.

[Stephen Barclay]

The measures that the Government have taken on beneficial ownership are hugely positive, but does the Minister accept that if almost half of all property in London worth more than £2 million is owned offshore, the measures will not provide transparency on beneficial ownership? Does she agree that property is a particular opportunity for the Government to extend their reach?

[Karen Bradley]

My hon. Friend has highlighted a powerful fact, which brings home the challenge that we face. I would appreciate it if we could cover that point when we meet outside this place.

The Government have taken steps to strengthen the law enforcement response to corruption. Last year, as I have said, we established the National Crime Agency to manage the overall law enforcement response to serious and organised crime, including bribery, corruption and associated offences such as money laundering. We have introduced measures to create a new offence of police corruption, and the Home Secretary has asked Major General Chip Chapman to chair a review of the police disciplinary system.

The Government have also provided dedicated funding for UK law enforcement units to investigate illicit financial flows to the UK, which are linked to corrupt foreign officials from developing countries. My hon. Friend talked about funding from the Department for International Development for the various units, and he is right to highlight the importance of ensuring that we have a dedicated force working in that area that does not duplicate effort. In such a way, we can ensure that we get the most effective response from law enforcement specialists, who really know what they are doing and are first-class professionals in their field. That approach is recognised internationally as highly successful and innovative. To date, those units have restrained or confiscated more than £120 million of stolen funds, and further investigations and confiscations are under way. Our enforcement response must be the best that it can be, so we are reviewing the overall co-ordination and effectiveness of the UK’s enforcement response to cases of bribery and corruption. That work is ongoing, and Ministers will consider the findings in due course.

My hon. Friend raised points regarding Malawi, and I would appreciate it if we could discuss that point further. If he can provide detailed information about individuals who might be involved, or any other information, it would really assist us in our work. [Interruption.] He is making comments from a sedentary position, but I am sure that if we discussed the matter, it would assist us all.

I am conscious of the time, so I will quickly cover the suspicious activity reporting regime, which is a significant part of our work. Suspicious activity reports are a crucial source of information for law enforcement agencies, and they provide a mechanism for financial institutions and others in the regulated sector to obtain a statutory defence from a money laundering prosecution when they report their suspicions and are granted consent to proceed with a transaction by the NCA. As someone who has worked in risk management at one of the major accounting firms, I remember the joys of having to deal with such things, so I understand the criticism that my hon. Friend has highlighted. The economic crime command in the National Crime Agency is working with banks. The Home Secretary and I attended a business breakfast hosted at the Bank of England to kick off the work that we are doing with the financial institutions to find appropriate and acceptable ways to help them to deal with the bureaucracy of SARs. My hon. Friend made an important point about the profile of the issue, and all financial institutions need to raise the profile of the issue internally and see it as a key part of their own mechanisms for dealing with corruption and bribery.

My hon. Friend mentioned the proceeds of corruption, and there is much that I could say on the matter. Given the time, I will simply say that he made an important point about dealing with pre-regime changes and changes in regimes in other countries. When I attended, on behalf of the Government, the AFAR III—Arab Forum on Financial Recovery—conference about Arab countries in transition, it brought home to me the importance of making sure that we have the information that we need to enable us not only to restrain those assets but to seize them, and to return them to the countries that need the money.

I hope that my hon. Friend will acknowledge the work that the Government have done to tackle this important issue, and the improvements that we have recently initiated. I note the issues that he has raised, and I hope that our forthcoming measures will go some way towards addressing them. I look forward to debating the matter further with him.

Question put and agreed to.

20:30

House adjourned.

Ministerial Corrections

Tuesday 2nd December 2014 Ministerial Corrections

Tuesday 2 December 2014

Defence

Tuesday 2nd December 2014 Ministerial Corrections

Reserve Recruitment

The following is an extract from Questions to the Secretary of State for Defence on 24 November 2014.

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

25. However these figures are dressed up, the Ministry of Defence’s own figures show that the trained strength of the Army reserve has actually fallen over the last 18 months. Given that the Government have had to throw more money at the reforms, including added incentives to join up, will the Minister answer the one question that the Government have so far ducked: how much extra are these reforms costing, over and above original estimates?

[Mr Brazier]

Over the past six months, the trained strength of the volunteer reserves has increased by 400, and it is only in the last three months that most of the reforms we have introduced have bitten. The answer to my hon. Friend’s question is that we are confident that the figure that we originally offered—1.8, over the 10-year period—will be adequate for the purpose. We are still aiming to reach our targets. Numbers are growing and recruiting is increasing rapidly.

[Official Report, 24 November 2014, Vol. 588, c. 624.]

Letter of correction from Mr Brazier:

An error has been identified in the answer I gave to my hon. Friend the Member for Basildon and Billericay (Mr Baron) during Questions to the Secretary of State for Defence.

The correct response should have been:

[Mr Brazier]

Over the past six months, the trained strength of the volunteer reserves has increased by 400, and it is only in the last three months that most of the reforms we have introduced have bitten. The answer to my hon. Friend’s question is that we are confident that the figure that we originally offered—£1.8 billion, over the 10-year period—will be adequate for the purpose. We are still aiming to reach our targets. Numbers are growing and recruiting is increasing rapidly.

Home Department

Tuesday 2nd December 2014 Ministerial Corrections

Asylum: Deportation

[Mr Hanson]

To ask the Secretary of State for the Home Department how many people have been removed from the UK under the Dublin Convention in each year since 2010.

[Official Report, 13 May 2014, Vol. 580, c. 450W.]

Letter of correction from James Brokenshire:

An error has been identified in the written answer given to the right hon. Member for Delyn (Mr Hanson) on 13 May 2014.

The answer was given as follows:

[James Brokenshire]

The information requested is shown in the following table:

[James Brokenshire]

The information requested is shown in the following table:

Westminster Hall

Tuesday 2nd December 2014 Westminster Hall

Tuesday 2 December 2014

[Mr George Howarth in the Chair]

Benefit Sanctioning

Tuesday 2nd December 2014 Westminster Hall

Motion made, and Question proposed, That the sitting be now adjourned.—(Mr Wallace.)

09:30

[Paul Blomfield (Sheffield Central) (Lab)]

It is a pleasure to introduce this debate under your chairmanship, Mr Howarth.

During the September recess I organised a community consultation across my constituency. With 63 meetings over three weeks, the consultation raised a wide range of issues. A dominant theme from some of my most vulnerable constituents, and from those in the voluntary, community and faith sector who work with them, was the impact of benefit sanctions. I cite the example of the Cathedral Archer Project, which works with the homeless. The project has been visited by Ministers and is held up as a model of good practice in taking people off the streets and getting them back into society by giving them skills and a home. The project’s work has been fundamentally changed by the response that some of its clients receive when they start—

[The Minister for Employment (Esther McVey)]

I had the same cough.

[Paul Blomfield]

I didn’t catch it from you, Minister.

Some of the project’s clients, in their first home, will suddenly receive a letter that they either cannot read or do not understand, and they will therefore miss an appointment and find themselves sanctioned, out of their home and back on the streets. They go to the jobcentre and are told, “Go along to the Cathedral Archer Project. They will feed you.” That transforms the role of an important local charity from making a strategic intervention to help people off the streets, into homes and into work to just being a crisis centre.

I am pleased to have secured this debate to raise such concerns directly and to make some practical proposals on how the Government can address the issue. Much of what I have to say is based on the work of Sheffield Citizens Advice, which is a great organisation that provides vital support to people across our city, finds solutions and supports people in complex situations. In doing so, it saves public money by averting crisis further down the line. In May, the organisation’s social policy group produced a report on the experience of jobseeker’s allowance sanctions based on the previous 12 months. I am pleased that the report’s author is in Westminster for today’s debate. The Department for Work and Pensions received a copy of the report when it was published, and it has been in correspondence with Sheffield Citizens Advice. I sent a further copy to the Minister before today’s debate so that we can properly consider its recommendations.

I must stress how helpful it is for such evidence to be gathered and presented so clearly by those working directly with the people affected by Government policy, with concrete recommendations about what can be done to improve the system. I hope the Minister will treat that work by people on the front line as seriously as it deserves to be treated. I make it absolutely clear at the outset that neither the report nor my contribution opposes the principle of sanctioning within the benefit system. Applying sanctions to those who are deliberately not seeking work, who are unavailable for work or who have no intention of working can disincentivise such behaviour and, in combination with the right support and training, can help people on the road to getting a job that provides not only an income but self-esteem, purpose, socialisation and accomplishment, but—and it is a very big but—any sanctioning regime has to be humane. The Sheffield Citizens Advice report clearly shows that there is an increasing number of incidents where the system is neither humane nor—this is important—serving its stated purpose of getting more people into work. In fact, the system is having the opposite effect in many cases.

Some of the stories outlined in the report will be all too familiar to hon. Members. I will briefly share the experiences of a couple of my constituents that are not detailed in the report. One constituent prefers to remain anonymous, so I will call her Mary. She was made redundant from a job as a cleaner, so she had to sign on for the first time in her life. She was told by an officer at the jobcentre that her next appointment with a job adviser would be on her signing-on day. She was told that there was no need to come in and sign on in the morning because she could do it when she came in for her 3 pm appointment. That information was wrong: the job adviser appointment was two days before Mary’s signing-on day. We all make mistakes, but it is simply and clearly not right that Mary, who had gone to the jobcentre for help to find a job, was punished for the officer’s mistake. It was an honest mistake, but it was a mistake, and she faced the consequences. Mary had to borrow money to get by, and I am pleased to say that she is now back in work with a cleaning job, but she got there despite the system, not because of it.

Mary understood what she needed to do, but she was wrongly advised. There are plenty of examples in the Sheffield Citizens Advice report of people who are not clear about what is expected of them:

“Alan was given a 4 week sanction for not actively seeking work. Because of his limited literacy/numeracy skills he had been enrolled for an 8 week course in English and Maths. He thought that as he was taking this course he did not need to complete his work search book for that period.”

That was an honest mistake. The report continues:

“Tony is in his mid 50s and is vulnerable because of his learning disabilities and dyslexia. He can’t read or write. Despite the fact that he gets significant support with looking for work from a local Job Club, he was sanctioned for not doing ‘enough’ jobseeking.”

Another constituent, coincidentally also called Tony, thinks he was sanctioned because the activity on his Universal Jobmatch account was considered too low by the jobcentre. I say that he thinks that was the reason for his being sanctioned because he has not yet been notified of the reasons for the sanctioning. Tony is eager to find employment and has completed an IT course through the jobcentre to help him find work online. He does not have access to a computer at home, so he spends much of the day at the central library waiting for his turn on the computer to show activity on Universal Jobmatch. That is in addition to going to workplaces in Sheffield looking for work, but he has been sanctioned. As a result of that sanctioning, he has been referred to the Salvation Army food bank in my constituency.

The question is whether sanctions are the right response to such situations, and not only because of their impact on people. Will they actually bring about the behavioural change that they purport to seek? Might the sanctions hinder, rather than help, the people who are affected?

[David Simpson (Upper Bann) (DUP)]

I congratulate the hon. Gentleman on obtaining this debate. The emphasis should be on how we root out those who are abusing the system. If the sanctions are harder on some people than on others, how do we get a mechanism that will root out those who are abusing the system by not turning up for appointments? When I speak to benefits centres in Northern Ireland, they tell me that a large number of people are abusing the system. How do we get a system that provides a level playing field for all?

[Paul Blomfield]

I understand the hon. Gentleman’s point. There are people who take advantage of any system, there are people who avoid their tax obligations, and so on. The point I am seeking to make is that if we design a system with the stated objective that he describes—supporting people back into work and taking sanctions against those who deliberately avoid it—we have to measure the effectiveness of the system against its stated objectives. My contention is that the operation of the system is failing that objective, so I ask myself why these seemingly illogical sanctioning decisions are being made.

Coincidentally, last Thursday I was out knocking on doors and meeting constituents, and I knocked on the door of a jobcentre worker. She described to me a range of issues that she faced in her daily work. I happened to mention that we were having this debate this morning, and she immediately responded by talking about the pressure that she and her colleagues felt they were being put under to impose sanctions.

That is a serious point. Indeed, in a survey of staff within the Department for Work and Pensions that was conducted by the Public and Commercial Services Union, 23% of union members surveyed said they had been given explicit targets for referring claimants for sanctions; 36% stated that they had been placed on a performance improvement plan for not making enough sanctions referrals; and 10% said that they had gone through poor performance procedures for not making enough sanctions referrals.

I know that the Government will say that there is no pressure to sanction, but the DWP acknowledges that statistics on sanctions are collated centrally and that local jobcentre managers will be contacted if their performance is out of line with that of other jobcentres. If this is a matter of good management, and no league tables are being compiled and no targets are being set, why is a lower level of sanctions seen as a sign of poor performance by a jobcentre manager?

Turning to how the situation can be improved, I start on a positive note. The Government’s independent review of jobseeker’s allowance sanctions carried out by Matthew Oakley was certainly a welcome step. Although its remit was limited—I will come on to that point shortly— it made some important suggestions about how communications and processes within the JSA sanctioning system can be improved.

I will not go into details, but a key point to take from that review is the lack of understanding between the claimant and the jobcentre. That chimes exactly with what Sheffield Citizens Advice is saying: too many claimants are not being adequately or appropriately informed of what is expected from them in the first place. They are not being informed about what they have done wrong when they have been sanctioned, and how to avoid the situation happening again.

The Sheffield Citizens Advice report chimes with the points that Matthew Oakley made. It says:

“A common experience is that they realise that no money has been paid into the bank first and then later get a letter stating that their benefits have been stopped.”

Will the Minister say what school of behavioural economics that sort of approach comes from? If a jobseeker does not understand the agreement that they have entered into, how does sanctioning achieve its aim, and how can sanctioning serve as a disincentive if a jobseeker does not know what behaviour triggers a sanction?

Perhaps Tony, whom I mentioned earlier and is mentioned in the report, was told that he needed to do more jobsearching, or perhaps he was sent a letter to that effect. That might be the case; I am not clear on that point. However, I know from talking to other constituents that such letters have led to sanctioning when they have not been responded to properly. The problem is that Tony cannot read; he has learning disabilities. He wants to work, but in that context the letter is meaningless, so what is the Minister doing to ensure that jobcentre staff are sensitive to such barriers—the barriers that claimants face in engaging with them? As I have said, it is positive that the DWP has responded to the Oakley review by setting up a specialist team to look at communications, but I would be grateful if the Minister updated us on the work of that team and outlined exactly what has changed as a result of its work. Will she also address some of the other recommendations in the report when she responds to the debate?

Many claimants tell Citizens Advice that they were not aware that they had been sanctioned until they contacted the jobcentre after finding out that they had no money in their bank account. Subsequent decision letters are often poorly worded, and without a clear explanation as to the misconduct that led to the imposition of sanctions. I urge the Minister to respond to the following proposals to address this issue: the wording of decision letters should be reviewed, so as to provide more detailed information about what led to the sanction, and to give information about the possible knock-on consequences of not responding to the decision letter; a sanction should not be put into effect until the decision letter notifying the claimant has been sent and a reasonable time for it to be delivered has passed; and notification letters should clearly inform the claimant of their right to challenge the sanction, explaining how to do so and, where appropriate, how to access hardship payments.

I say that because the Sheffield Citizens Advice report details how sanctions are often imposed because claimants failed to carry out agreed steps or activities even though many of them face barriers—through language, caring responsibilities or health problems—that mean they could not reasonably have carried out the agreed steps. That is an important point: they could not reasonably have been expected to respond. Other claimants do not understand what has been agreed and, according to the report, jobcentre staff are not aware of the genuine barriers that some claimants face.

I urge the Minister to respond to the following proposals to address this situation. First, jobcentres should make claimants aware that they have a say in the content of jobseekers’ agreements, and that this is a two-way process that should have claimants’ full engagement. It is supposed to be a partnership leading people into work. Claimants should be made aware that they have a right to have the agreement reviewed if they are not happy with the content.

Secondly, jobcentres should take whatever steps are necessary to be certain that all relevant factors that could possibly act as a barrier to work have been taken fully into account when deciding on the content of a jobseeker’s agreement. I have already cited some of the barriers that exist. Thirdly, jobcentre staff should be invited to awareness training about the practical and specific difficulties faced by some claimants; those difficulties may be learning disabilities, mental health issues or language barriers. I make this proposal because the Minister will agree that without workable, reasonable and well-understood agreements between jobcentres and claimants, the process is bound to fail, and if it fails it will clearly cause extraordinary hardship. I visited a food bank that I helped to establish in the heart of my constituency. The increase in the demand for its services is in significant part due to the increase in benefits sanctioning—the same is reported by other food banks across the city.

[Yvonne Fovargue (Makerfield) (Lab)]

I congratulate my hon. Friend on securing this debate. In my constituency, Compassion in Action provides a food bank that covers the whole of Wigan. The charity’s statistics show that 37% of the people who go there do so as a result of being sanctioned. One individual who had gone to the food bank had actually received training for a month with a guaranteed job at the end of it; he had found that job himself. His employer was willing to say to jobcentre staff that he needed the individual there every day that month, but the individual was sanctioned for that month and Compassion in Action kept him fed.

[Paul Blomfield]

I thank my hon. Friend for that intervention, which echoes many reports I have received from the food banks in my constituency. The desperate level of hardship that we are talking about needs to be understood in the House. We understand that food banks provide a weekly food parcel, but when I recently spoke to colleagues at the S2 Food Bank in Sheffield, they pointed out that they were now receiving demand for food parcels containing cold food that would not require heating as people did not have enough money not only for food but for basic fuel supplies. People are living in houses or flats illuminated by candles and eating cold food provided by food banks. That is desperate hardship.

[Steve Baker (Wycombe) (Con)]

I am deeply troubled by some of the substance of this debate. The hon. Gentleman will know that the Government argue that nobody should go without essentials as a result of a sanction, and that they should receive hardship payments. Can he imagine why the evidence on the ground that he is presenting falls so far short of the Government’s obvious intent?

[Paul Blomfield]

I thank the hon. Gentleman for his intervention and I will come to that point; often a part of the communications breakdown is people’s lack of awareness of the hardship payments that they are entitled to. The Government have to deal with precisely that issue as part of the challenge.

In the time I have left, I want to stress the inhumane nature of some of the sanctioning I have referred to. It is clear that, if claimants do not understand agreements, they will not keep them and sanctioning will not have its desired effect as a deterrent against non-jobseeking.

[Sheila Gilmore (Edinburgh East) (Lab)]

On the point raised a moment ago, my experience is that some people without dependents or without other needs do not get hardship payments. In Scotland, we have the Scottish welfare fund—our equivalent of devolving responsibility for hardship payments to local authorities—but authorities were telling people, at least initially, that those who had been sanctioned could not apply for help from it.

[Paul Blomfield]

I thank my hon. Friend for that important clarification. Although hardship payments are available to some vulnerable groups—as I said in response to the hon. Member for Wycombe (Steve Baker), there is a problem even there, and communication is breaking down—there are many groups to whom payments are not available. One recommendation, which the Minister should address, is that access to hardship payments should be given to all householders, not just those in certain defined groups.

Sanctioning is not only ineffective in many circumstances, but deeply damaging. That is particularly the case when it has a knock-on effect on housing benefit and council tax support for those on the lowest incomes. A claimant and their family can soon find that they face rent arrears and that they are unable to pay basic bills. In the case of council tax, non-payment is punishable by imprisonment.

Often, people find themselves in that situation without adequate warning, so they have no time to plan for the shortfall. Emma, another Citizens Advice client mentioned in the report, came very close to losing her home as a result of the knock-on impact of a JSA sanction. Sadly, she is not alone. When margins are tight, the slightest change in income can trigger a downward spiral into deep money problems. The system is not designed for that, and rightly so—how would someone in such dire straits be able to find a job?

The DWP agreed to change its IT software and amend the notification sent to local authorities when a sanction has been applied to allow housing benefit to continue without interruption. Action on that was promised by the autumn, but it is now December. Can the Minister assure us today that that relatively minor change, with the potential to make a substantial difference to the lives of some of the poorest people in our communities, is happening or is imminent?

Will the Minister respond to the report’s proposal that all households, as I said a moment ago, have immediate access to hardship payments to avoid the situations I have talked about? Will financial redress be considered where a sanction is found to have been incorrectly applied, resulting in significant consequences and distress for those involved?

There is much more to be said on the issue, and I have asked the Minister a number of specific questions. I want to end with one point.

[Dame Anne Begg (Aberdeen South) (Lab)]

Before my hon. Friend finishes, will he tell us whether the research found evidence of people having to resort to payday lenders or loan sharks to get over the immediate problem of a lack of cash? Did that then create problems for them further down the road because they had lost a lot of their ability to pay back those loans, even when they had been wrongly sanctioned?

[Paul Blomfield]

I thank my hon. Friend for that intervention and for the great work she has done as Chair of the Work and Pensions Committee, along with the other members of the Committee. She is right to highlight the link between benefits sanctioning and payday lending. As she will know, payday lending is a concern to me. With colleagues from all parties in the House, I introduced a private Member’s Bill on high-cost credit.

I have subsequently worked with colleagues on the all-party group on debt and personal finance to push the Financial Conduct Authority to introduce effective regulation of payday lenders, and I am delighted that we have made some progress on that. However, that is only part of the solution. We are dealing with the consequences of poverty—people resorting to payday lenders—but not the causes, and one of the most significant causes is benefit sanctioning. I am therefore pleased that my hon. Friend raised that point.

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

I apologise to my hon. Friend for being a little late. Is he aware of the evidence from Oxford university, which shows that one in four JSA claimants who are sanctioned leave JSA and that more than half of them do not get into work? Using sanctions to get people into employment has therefore proved ineffective.

[Paul Blomfield]

I was not aware of that research, so I am doubly grateful to my hon. Friend for her intervention. That makes the point powerfully that the sanctioning regime is failing to achieve its stated intention. Even leaving aside the hardships and all the consequences of sanctioning, we still need to look carefully at the issues I have raised because of the failure of sanctioning to meet its stated objectives.

So far, the Government have resisted calls from the Work and Pensions Committee, Citizens Advice and others for a full review of the sanctioning system. I have commended the work of the Oakley review, but that focused only on the practicalities of the current system. I understand the Select Committee is conducting its own inquiry, which I strongly welcome, and I am sure Citizens Advice and many others will engage fully with it.

Why, however, are the Government refusing to address one fundamental question: is the sanctioning system proving effective at getting people into work, which is its stated intention? Why is there no performance evaluation of the system against that criterion? There is no shame in that, whatever the answer—even if it is that, no, the system is not proving effective. However, we need to know the answer as policy makers; if we do not even ask, we are showing enormous contempt for the people whose lives are being dramatically affected. I hope the Minister will give us a commitment on that today.

[Several hon. Members]

rose—

[Mr George Howarth (in the Chair)]

Order. It might be helpful before we proceed any further if I point out that I intend to call the two Front-Bench spokespeople at 10.40 am to begin the winding-up speeches. I do not intend at this point to impose a time limit on speeches, but, depending on how things go over the next few minutes, I may decide to do so.

09:57

[Steve Baker (Wycombe) (Con)]

One of the things that has troubled me most in my parliamentary career has been when serious allegations have been made about the unintended consequences of benefits reform. In some cases, it is alleged that it has led to people’s deaths.

In the Library brief, I read an article from The Independent about the cases of Mark Wood and David Clapson. Mr Wood died. He had a number of mental health problems and was found starved to death. Apparently, he thought that he deserved only £40 a week, and when a member of his family gave him money, it is alleged that he gave it to charity. Mr Clapson also died. He was a former soldier and a type 1 diabetic. It is said that his benefits were cut. The article says:

“He had no food in his stomach, £3.44 in the bank and no money on his electricity card”,

so he could not run the

“fridge where he kept his insulin.”

Those are appalling cases. The DWP has apparently said of Mr Wood:

“The coroner attributed Mr Wood’s eating disorder and food phobia as the likely cause of his death”

and Mr Clapson had not appealed or applied for a hardship payment. In the system set up to help such people, it may well be that unforeseen circumstances arose that led to the deaths of both those men.

The Government explain that the majority of claimants do not receive a sanction and that vulnerable claimants can receive hardship payments immediately if they are sanctioned. It seems to me that in the cases of both Mr Wood and Mr Clapson, there should have been immediate hardship payments, if not a suspension of the sanction in the first place.

Why do such decisions get made? First, it is because the state is not an instrument of compassion and kindness. In the end, it is an instrument of rule following and coercion. Something is going on in the system when the Minister’s and the Government’s good intent, which I do not doubt for a moment, goes through a set of rules, procedures, structures and bureaucracies that ultimately leads to some edge cases in which people may even die as a result of the system. Why does that happen?

The other question is why people working within the system allow these things to happen in front of them. I have observed that people with the least are often the most generous, and those who are the closest to human suffering usually feel the most for the people they see suffering, so why do these things happen? I am afraid that I found myself turning to the Milgram experiment, which gave a psychological explanation of why people obey authority. It is just a fact—this has been shown repeatedly—that people will obey the rules far beyond their personal morality regarding the consequences. I ask the Government to think about how the incentives for staff could be changed to allow their personal morality to flourish in the system, so that the small minority of cases that are clearly illogical and wrong never arise.

It has been pointed out that the vast majority of decisions are correct. In the 12 months to June 2014, decision makers considered 1.76 million JSA cases and imposed 850,000 sanctions or disentitlements, but fewer than 15% of those decisions were changed on reconsideration or appeal. Some 15% were changed after review and fewer than 1% after appeal, and that was often because the claimant brought forward new evidence. The problem I am most concerned about is how in the tiny minority of cases where a different decision really ought to have been made, it was not made.

[Debbie Abrahams]

The hon. Gentleman is making an interesting speech. He might not be aware of the Select Committee inquiry and the report we published earlier this year that clearly showed that the pressure on Jobcentre Plus advisers to get claimants off-flow—off the books—was such that it was distorting what should happen. He mentioned the rules in society, but the rules and culture being set up within the Department contribute to those tragic cases.

[Steve Baker]

I am grateful to the hon. Lady, because I was not aware of the report. I will be sure to dig it out after the debate and have a good look at it.

My point is that I do not doubt the Government’s good intent or that the overwhelming majority of the people working in the system do an extremely difficult job that is demanding both on their skills and talents and on their emotions; but I have to ask why it is that in a tiny minority of cases things go so badly wrong. The hon. Lady made a good point about the systems that are put in place. How do people end up feeling incentivised to sanction people whom they otherwise might not sanction? Why do they not notice that someone has a mental illness such as a food phobia and feel able to refer them to help elsewhere? How can that possibly be? I am absolutely convinced that every Member of this House believes not only that we should have an ultimate social safety net, but that there is one there that should be and largely is effective.

I will finish my speech with some obvious suggestions for the Government, which I feel sure they will have considered. First, it is obvious that everything should be clearly communicated to people, taking into account issues such as those the hon. Member for Sheffield Central (Paul Blomfield) mentioned, where someone cannot read. It is obvious that a person cannot be expected to comply with rules that have not been explained to them. The rules should be explained simply and people’s understanding of them confirmed. It is not enough sometimes just to send a letter—if people cannot cope with life, they will not open their correspondence. Secondly, how can we expand the capacity of individual members of staff to exercise their personal moral judgment in cases, so that we do not end up with a type 1 diabetic with no money to pay for the electricity to keep the fridge on for his insulin? I suggest that all staff should have a duty to inform claimants of their right to appeal and to apply for hardship payments.

I am absolutely sure that the Government intend to drive people into work, and that is right. If people can work, they should work; it is good for them and it is good for society. I am also absolutely sure that the Government intend to bring hope to people who are without it. I just hope very much that we can deal with all the issues around the edges and set up a system of welfare that works for everyone, all the time.

10:05

[Sheila Gilmore (Edinburgh East) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Howarth. I congratulate my hon. Friend the Member for Sheffield Central (Paul Blomfield) on securing this debate. I want to look at two particular groups affected by sanctioning and how changes could improve their situation. The first group is single parents.

Gingerbread, which supports and campaigns on behalf of single parents, published a report in November called “Single parents and benefit sanctions”, which looked at some of the issues. Its concern is that single parents appear to be more likely than other claimants to receive what is called a “non-adverse sanction decision”, where it is decided not to sanction. Single parents receive such decisions in 41% of cases compared with 32% of other claimants, which means that more inappropriate referrals are being made for single parents. Someone might say, “Okay, they don’t actually get sanctioned in the end,” or, “The sanction is overturned within the reconsideration period,” but it increases anxiety and the difficulty people face while they go through the process. A substantial minority of decisions are overturned not before the sanction is applied, but afterwards, during the initial reconsideration period. In that post-sanction period, 26% of low-level sanctions applied to single parents are overturned, 46% of intermediate-level sanctions—that is very high—and 17% of high-level sanctions. That suggests a relatively high proportion of wrong decisions, which is particularly important for departmental working.

The Gingerbread report also cites a previous piece of research done for the DWP and published in 2013, which looked at lone parent obligations in the period towards the end of the previous Government. That DWP study showed that in getting people back to work, the effects of voluntary and tailored back-to-work support were greater than the effects of programmes based on increasing conditionality. Tailored support had a higher success rate. That is important because it was the DWP that commissioned the report.

If single parents or any other group are to be involved, it is particularly important that the claimant commitment that people are expected to enter into is individually tailored. We are told by Ministers that it is individually tailored, but the experience of many constituents is that it does not appear to take their circumstances into account. There are single parent flexibilities in the system, which allow the conditionality applied to single parents to be tailored to their particular needs, but Gingerbread found that in a number of cases that was not happening. When universal credit is rolled out beyond the 17,000 people currently on it, to the whole of the UK, only one in 12 of the lone parent flexibilities will be carried over in its entirety. Gingerbread is concerned that universal credit makes it less likely, not more likely, that single parents will be protected by conditions that take into account such things as school holidays, school hours and the difficulties of working evenings and nights for lone parents responsible for their children.

Gingerbread makes some practical proposals—it has not just put out a report that says, “This is all awful.” It suggests that at the start of a claim there should be a thorough diagnostic interview with a specialist lone parent adviser—a jobcentre provision that seems to have become less common of late—to give appropriate conditionality; that similar processes should be applied if that particular person is later referred to the Work programme; that if claimants receive a sanction, they are given better information on hardship payments and how to appeal, as mentioned by other hon. Members; and, of course, that lone parent advisers be reinstated.

In a worrying trend, another group that appears to be increasingly affected by sanctions is those on employment and support allowance in the work-related activity group who have been through the work capability assessment and have been assessed as not fit for work at this stage. These people are not expected to be job-ready, but they can be referred to the Work programme if their prognosis is that they will be fit again within 12 months, and people are increasingly being referred. Most sanctions for this group appear to arise from the Work programme experience. The number of ESA sanctions in June 2014 was 5,132, up from 1,091 in December 2012. The rise over that period was steady and it is still going up. Of the sanctions, 431 were for failure to attend a mandatory interview, but 4,700 arose from a failure to participate in a work-related activity, which basically means the Work programme. Many of these people have mental health problems or learning disabilities, so we must ask why this group is being increasingly sanctioned and how effective that can be.

However much some deny it, there is a link between the increasing use of food banks and a decision that has been made about benefits. Some of those decisions involve delays, but a survey undertaken this year by the Child Poverty Action Group, Citizens Advice Scotland and other organisations found that 20% to 30% of food bank users said that their household’s benefit had recently been stopped or reduced because of a sanction. I do not deny that often there is a backdrop of other, wider problems, as shown by the report. Many people have a background of homelessness, recent marital separation, relationship problems, ill health or bereavement, but it is against that backdrop that sanctions have a particularly dramatic impact, because people in a more stable family situation can more often get help from family members.

Ministers in this Government sometimes give the impression that the growth of food banks is somehow a ploy by anti-Government campaigners to make them look bad, but I genuinely have not seen that before. Had it been a problem during, say, the Thatcher Government, I am sure that we would have known about it and would have been shouting about, so it is a relatively recent phenomenon.

We are not saying that there should not be any conditionality in the system. I was struck by a report by Paul Gregg that was prepared for the DWP before the last election. His fundamental recommendation was that sanctions must be linked with personalised support. In the foreword to the report, he states that there are

“a number of risks associated with conditionality that need be designed out as far as possible at inception”

of the system. The problem is that the risks have not been designed out properly, which is what causes severe hardship among some of those sanctioned; some people are then directed to inappropriate courses or jobs, which do not help them to move forward; and some are pushed outwith the system altogether.

Paul Gregg’s proposals are interesting when juxtaposed with what has actually happened. He recommended that for a first offence, if we want to call it that, there should be a formal warning built into the system. Interestingly, that there should be such a stage prior to sanctions being applied has also been recommended by Policy Exchange, which is far from left-wing. A second offence would result in the

“loss of one week’s JSA”

and a third offence would lead to the loss of two week’s worth. Interestingly, he recommended that after a fourth offence there should be

“be an investigation by Jobcentre Plus…to determine the underlying reason”

and to talk to those who gave the individual support in order to find out what was actually going on before applying “a non-financial sanction”. He thought it would be a small group, but one that had to be looked at in some detail. Those proposals, and the need for personalised support and a much less draconian system than the one applied by the Government, are worth considering.

In conclusion, perhaps the Minister will be good enough to cut out of her reply the usual generalisations about how good work is for people, with which we all agree, and how it is the route out of poverty. Yes, being employed is a necessary part of moving out of poverty, but it is insufficient in many cases. We can bypass that debate because we keep having it and we are not moving forward. No Labour Member and, indeed, few people that I meet in my constituency think that people should not work if they can, but we do have concerns about the system for deciding who is fit for work. Will the Minister concentrate instead on why sanctions referrals and sanctions have increased, particularly in relation to the ESA group? What is her response to the specific recommendations of organisations such as Gingerbread? What is she doing to evaluate whether sanctions actually work to increase the number of people entering employment, which is meant to be the answer? What research has she commissioned to find that out?

10:16

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

It is a pleasure to serve under your chairmanship, Mr Howarth. I congratulate the hon. Member for Sheffield Central (Paul Blomfield) on securing this important debate. I was sorry to hear the aggressive tone with which the hon. Member for Edinburgh East (Sheila Gilmore) concluded, because this debate needs elevating above party politics.

I am proud to represent a constituency that has this country’s fourth most deprived ward, which is where our local jobcentre is sited. Just over the road in Blackpool South is the most deprived ward in the country. Our jobcentre deals with a vast range of highly vulnerable people with complex needs, including mental health problems, learning disabilities and addictions of one sort or another.

The walk from the jobcentre to my constituency office is 30 seconds, and I have dealt with numerous cases involving the word “sanctions” over the past four and a half years. I have seen the ebb and flow and the changing patterns in how the Department for Work and Pensions has sought to deal with the matter. It would be wrong of me not to make the effort to visit the local Jobcentre Plus to discuss why all this is occurring, what is going on and what is lying behind it. What truth lies behind the things that I read in the newspaper about targets and inappropriate sanctions? There is an element of black and white here.

The system has problems, many brought out by the Oakley review, that the Government are now dealing with by accepting the review’s 17 recommendations. However, I would welcome confirmation from the Minister that that acceptance applies not only to the sanctions imposed on those participating in the back-to-work schemes that fell within the remit of the Oakley review, but to the two thirds of sanctions that were not covered by Mr Oakley.

It is a fair point that there is a lack of clarity about what people understand they are being asked to do. The welfare state is a complex thing to navigate in the first place, which is why we have bodies such as Citizens Advice. A lot of it can be off-putting.

[Yvonne Fovargue]

Will the hon. Gentleman give way?

[Paul Maynard]

I will give way to the hon. Lady as this is her specialist topic.

[Yvonne Fovargue]

There have been a lot of references to the citizens advice bureaux, which issued the valuable report mentioned by my hon. Friend the Member for Sheffield Central (Paul Blomfield) and provide help to the most vulnerable. Many of those bureaux, however, are under threat as local authorities are hard-pressed and cutting their budgets. Does the hon. Gentleman agree that today’s debate demonstrates the value of the advice and the saving to the state?

[Paul Maynard]

I agree entirely. One of my caseworkers also works part-time at the local citizens advice bureau; her experience in the one role helps her in the other, and vice-versa.

What is not made sufficiently clear to all claimants of jobseeker’s allowance is that participation in any activity to get claimants closer to the workplace, whether computer or other skills training, does not invalidate the obligation to continue job-seeking activities. That is often the golden thread running through so many of the sanction cases that come across my desk. That central and essential point is somehow lost on people and, given that it is so central, I urge the DWP to make it much clearer.

What might be driving the ESA issue in particular, which the hon. Member for Edinburgh East mentioned, is the lack of freedom that Work programme providers have not to refer an infringement on for a further decision. That seems to be building into the system an accelerator of the number of referrals on potential sanctions. I urge the Minister to look at how we can build more flexibility into the system so that Work programme providers may choose not to refer if they deem that the claimant has a good reason.

I was struck by the reference of the hon. Member for Sheffield Central to the number of increasing incidents. We can all argue over the figures—some people cite 4.5 million—and I am sure that we will argue about them in the Select Committee, but the essential point to me is that any change in the welfare state or in any particular benefit inevitably creates confusion for those who have to administer the system and for those seeking to navigate it as claimants.

We have seen tremendous changes in the benefits system in recent years—new benefits coming in and new requirements being placed on claimants, none more so than the claimant commitment—and that has required a great degree of comprehension on the part of many of those applying for JSA. Many have none the less found the new document off-putting. Yes, it is certainly personalised, but it is still a matter of putting ticks in boxes as they apply to the individual, so the personalisation is a little limited. It still requires a variety of boxes to be ticked, rather than being built around the needs of an individual. That still creates problems.

I am also struck by the number of people making the journey over to my office from the jobcentre who say, “I have been sanctioned”, when on investigation no sanction is officially part of the story. To me, that was an anecdotal impression—that people said that they were being sanctioned, but were not being sanctioned—so I was intrigued to read in the Oakley report that DWP research had found that 28% of JSA claimants had said that they had been sanctioned in some way, shape or form. Once the case load was reviewed, it turned out that only 11% of claimants had been sanctioned.

I am not saying that those individuals were in any way seeking to misrepresent what had occurred. Once again, benefit claims can be complex, and the amount that one receives each week can change according to a wide range of factors, such as social fund repayments, late payment of bills or the Child Support Agency—the list is endless.

[Debbie Abrahams]

Will the hon. Gentleman give way?

[Paul Maynard]

I am conscious that I am taking a lot of time, so I would like to get through my comments rather than give way. I do apologise.

What interests me is that sanctions appear to be becoming a shorthand for a wider range of issues in the welfare system, all of which undoubtedly need to be addressed. Meanwhile, the issue of conditionality is almost getting a worse name for itself than it should be. Conditionality is not always responsible for all the problems that individual claimants are bringing forward and identifying. We need to drill down to what exactly is occurring.

We obviously have the endless debate about whether Jobcentre Plus employees are expected to hit particular sanction levels. I try to take a pragmatic view. If I am managing a process and I have an outlier branch of my network that is producing figures that I do not recognise, I will of course investigate. I specifically asked my Jobcentre Plus advisers in Blackpool whether that was occurring, and I was assured that it was not. I can only take their word for it, but I understand such concerns. I suggest to those concerned that entering into a potential sanctioning process can often bring out some of those underlying problems—[Interruption.] Was it something I said? I see that the hon. Members for Makerfield (Yvonne Fovargue) and for Oldham East and Saddleworth (Debbie Abrahams) are leaving the Chamber.

On the underlying problems, one gentleman who came to my office had not completed any of his back-to-work activity, but he was then found to be functionally illiterate at the last-but-one stage before he was due to be sanctioned. The sanction was not applied and his literacy issues were then dealt with; Jobcentre Plus employees can use discretion and can already get to the bottom of what is causing some of the problems. I revert to the underlying point of Mr Oakley’s report, which is that the system is not fundamentally broken. He states that quite explicitly. Improvements can certainly be made but, as a system, conditionality is not fundamentally broken.

The hon. Member for Oldham East and Saddleworth made a point about the sizeable numbers exiting JSA totally. I hope that the Select Committee will investigate that important issue, because one of the challenges in Blackpool has been to estimate the size of the black economy. The suspicion is that many people, who until the introduction of the new claimant commitment were able to maintain their job-seeking activity while working in the black economy, could no longer juggle both balls and therefore voluntarily chose to exit JSA. It is a persuasive narrative and I would like the Committee to investigate the extent to which it holds true. Does it depend on the size of the black economy in any particular local economy? What estimates have been made? That is another important issue to be drilled down into.

I want to ensure that other people can speak, so my final point is that, as we have all been saying, conditionality has to be part of any functioning welfare system, but it must be done in such a way that it is also seen to be humane. The Litchfield review of the work capability assessment was always careful to make the point that there is such a thing as institutional justice. People will accept an adverse decision if they have confidence in the process that they have gone through and feel that they have been given a fair opportunity to have their say. The fact that institutional justice is part of the welfare state is an important factor in making it work in the interests not only of those claiming, but of those funding and administering it.

10:27

[Ian Lavery (Wansbeck) (Lab)]

It is a pleasure, as ever, to serve under your chairmanship, Mr Howarth. I congratulate my hon. Friend the Member for Sheffield Central (Paul Blomfield) on bringing to the House such an important issue, which concerns me greatly and can have a devastating impact on many people’s lives and on communities up and down the country, including my constituency.

I wonder why “sanction” is used, because the word means “approved”, and people are in fact being disapproved—that is just something to ponder. That sanction may be imposed if a claimant is deemed not to have complied with a condition for receiving the benefit in question. Since October 2012, according to House of Commons Library figures, 1.4 million people have been sanctioned. Sanctions give people a huge problem, as they have four weeks at the very least without any finance—four weeks without the means to live, to put bread on the table or to feed the kids. That is what sanctioning means, and it is unacceptable.

This morning, I had a look on the internet and I found a site that gives some incredible examples of how and why people are sanctioned, and it is worth noting one or two, if not more. The first is the case of an Army veteran who volunteered to sell poppies for the Royal British Legion at a local supermarket in memory of his fallen comrades. He had applied for lots of jobs, including one at the supermarket where he was selling the poppies, but without any success. He was sanctioned for four weeks.

Another fellow got a job interview that was at the same time as his jobcentre appointment, so he had to reschedule that appointment. He tried to do so, but the people at the jobcentre said he did not have a good enough reason for not being there, so he was sanctioned for four weeks. That is four weeks with no food and little electricity, suffering greatly—in 2014, in the sixth richest economy in the world.

In another example, somebody’s relative died during the night, and their partner rang the jobcentre the next day to ask whether they could come in on the following day. Their partner was told that yes, of course they could, but after they went in, they were written to. They replied, explaining the situation in writing, but were sanctioned for six weeks for not replying.

There is a fellow in my constituency who I have seen three times now; I have also mentioned his case in the House. He is 62 years old. He suffers greatly because of a heart condition and has to go to hospital regularly. He has been sanctioned again. The last time he came to see me he had been living on blackberries, apples and mushrooms from the local field. Is that what we want from sanctioning?

There are two ways to look at this issue. We could suggest that the Government did not mean those sorts of things to happen with sanctioning, and that those cases are one-offs. In that case, we might think they would put them right, but I am not sure they are inclined to do that. They see them as consequences, but I see those people as human beings—not as consequences or as collateral damage, but as human beings, like me and like everyone else in this Chamber. The other view is that the Government are aware of the consequences of sanctioning and are prepared to put up with them.

[Steve Baker]

The hon. Gentleman is making a powerful speech. He has given some extremely good reasons why people ought not to have been sanctioned. Under the system, if people give a good reason they should be exempt from sanctions, so has he considered why that system has broken down in those cases?

[Ian Lavery]

I have given lots of consideration and thought to sanctions. My view, which is not perhaps the view of the party that I am proud to represent, is that sanctions are inappropriate in this day and age, in any way, shape or form. I understand the point made by the hon. Member for Upper Bann (David Simpson) that there has to be something in place for the odd person who, as we all know, swings the lead. That does happen, but those people are then put at the top of the agenda, as if everybody was swinging the lead when they are not.

People do not want to be on benefits. People on benefits are not the wealthiest in this world—they are not living a life of luxury but are merely existing. As I have said before, that is not good enough—it really is not. That is not just because of Government policy, but because of a whole array of things. As politicians we have a duty to make sure that we look after the residents of this country.

I have given a few real examples. I have another one: there is a man in my constituency who was sanctioned only two weeks ago. He had got a job, but he was not going to start it for a fortnight; he did not look for any employment after he got it, because he had a job. He was sanctioned because he had not put enough work into finding a job, when he had already found one. That is absolute nonsense. If anyone thinks any different I would be incredibly surprised.

If we look at the class of people who are being impacted by the sanctions, it is the vulnerable and those who are desperate. They are not scroungers, as many people try to portray them—a lot of them are extremely desperate. As my hon. Friend the Member for Sheffield Central mentioned, a lot of people who are being sanctioned do not have anything to eat, so they are referred to the local food bank. Although the next point depends on the figures we have read and want to accept, there are in the region of 500,000 people attending food banks because they do not have enough food. These are families and single parents—people with kids—who have not got a scrap or a morsel on the table to feed themselves. No one here wants that to happen, so why is it happening?

We hear Ministers suggest that food banks are a great thing—we are all in this together and there is great community spirit in seeing people giving food to people who do not have anything. There is a factory in my constituency where, instead of paying proper wages, they are setting up a food bank. I am getting slightly off the issue now, Mr Howarth, but it is all connected to sanctioning and to the fact that the people at the very bottom are desperate and are looking merely to exist. My hon. Friend the Member for Sheffield Central said that the majority of people using food banks are there because of sanctions or delays to their benefits in one form or another. That needs to be looked at.

It is generally accepted that thousands of disabled people are being sanctioned. The group that really concerns me is the mentally ill—there are people who are mentally ill who are being sanctioned through no fault of their own. The hon. Member for Wycombe (Steve Baker) mentioned two prime examples. One was the 44-year-old man living in the Prime Minister’s constituency who starved to death because he had been sanctioned and did not know what the process was. That was in the Prime Minister’s backyard. There was also the case of the individual with type 1 diabetes. Those are just a couple of cases. I say to the Minister that we really need to have a proper look at who is being sanctioned and the consequences of sanctioning them.

I have been involved with the DWP work force for quite some time. Regardless of what might be said today, pressure is being put on people who work in DWP offices and deal with applications to ensure that their targets are as good as those of other offices. Basically, if their individual targets are not good enough, they are brought in to see the manager and are coerced into ensuring that their performances increase in line with those of other people in their section and other sections in other DWP and jobcentre offices. There are unofficial league tables. That will be denied, but I can prove that it is the case.

In concluding, I place on the record my thanks to the CAB in Wansbeck, which does a fantastic job. It is bursting at the seams with people with nowhere to go, no food to eat and no electricity when they get home. The people at the CAB do a fantastic job, although again they are being hit greatly by the cuts. Without them, a lot of people would suffer even more. I have one simple question for the Minister: is there ever any reason here in the UK for depriving people of a means to live?

10:39

[Stephen Timms (East Ham) (Lab)]

I welcome the opportunity to respond to the debate, and congratulate my hon. Friend the Member for Sheffield Central (Paul Blomfield) on securing it. I also congratulate Sheffield Citizens Advice and Tim Arnold, who produced the report that was the basis of much of what my hon. Friend said. I welcome the thoughtful debate, with contributions on both sides expressing grave concern about what has been happening with benefit sanctions.

My hon. Friend made the point that sanctions have been part of the social security system since it was established. It is right that there should be sanctions for people in receipt of benefits who do things they should not. However, it is clear that the sanctions system has gone badly wrong, that in too many cases it is no longer fair and proportionate, and that terrible damage is resulting from that.

The hon. Member for Wycombe (Steve Baker) and my hon. Friend the Member for Wansbeck (Ian Lavery) both mentioned one of the most harrowing cases, involving the diabetic ex-soldier David Clapson, who died, as his sister said, “penniless, starving and alone”, because three weeks after his benefit was stopped for missing a jobcentre appointment his electricity card had run out and his refrigerator was not working, so he was not able to keep the insulin on which his life depended. He died as a result.

That is an extreme case and should not have happened. No one in the Chamber today became a politician to preside over such harrowing events. We need changes to prevent them. I want the Minister to tell us more about the implementation of the Oakley review, whose recommendations were designed to introduce such changes. Such things seem still to be happening at the moment.

Certainly a very large number of jobseekers now feel that jobcentre staff are there primarily not to help them but to catch them out and find grounds for sanctioning them. That has done terrible damage to the reputation of jobcentres. I am sure that the perception is often unfair, but it is very widely held because of the destructive preoccupation with sanctioning. At some point, a major programme of renewal for Jobcentre Plus will be needed. The Select Committee on Work and Pensions was right to make the case that as a first step jobcentres should be evaluated on the basis not of benefit off-flow, with all the perverse incentives that that has created, but of sustained job outcomes—the same measure used in the case of Work programme providers.

There has been some discussion in the debate about the contentious issue of targets for sanctions. I am sure that the Minister will reaffirm in a few minutes that there are no targets for sanctions, but it is clear that that is not how many Jobcentre Plus staff understand the position. Indeed, it is not too difficult to find out why they think that there are targets for the implementation of sanctions. The Minister provided a written answer on 15 October 2013 to my question on whether Jobcentre Plus advisers’ regular personal reviews included discussions of the number of benefit sanctions that they handed out. She confirmed:

“Jobcentre Plus uses advisers’ personal reviews to monitor performance, to inform these they use a variety of performance data, including sanctions referrals.”——[Official Report, 15 October 2013; Vol. 568, c. 647W.]

So regular reviews of Jobcentre Plus advisers feature the number of sanctions issued. That is part of the assessment. I am told that the expectation is that advisers should give out at least eight sanctions per month and that if they do not they are usually, as my hon. Friend the Member for Sheffield Central mentioned, placed on a performance improvement plan, to help them pull their socks up and get them to give out more sanctions in the future. The Minister may be able to explain the difference between that arrangement and targets for sanctions. Clearly, in practice, targets are set for the application of sanctions by Jobcentre Plus staff, and if they do not meet the expectation they are in trouble.

Dr David Webster, of the university of Glasgow, has just published his latest briefing on benefit sanctions. He tells us that there were an estimated 1.03 million jobseeker’s allowance and employment and support allowance sanctions in the year to 30 June 2014, before reconsiderations and appeals, compared with 564,000 in the last 12 months of the previous Government; so the number of sanctions handed out has roughly doubled. Dr Webster says that JSA claimants are

“sanctioned at the rate of 6.92% per month before reconsiderations and appeals”.

Ministers sometimes say that the vast majority of benefit recipients are not sanctioned, but 7% of JSA claimants are sanctioned per month, and Dr Webster also says that about a quarter of JSA claimants get a sanction at some point during their claim. He also makes the point that ESA claimants were sanctioned at the rate of 1.16% per month in June 2014. Dr Webster comments—and this picks up on the point made by my hon. Friend the Member for Edinburgh East (Sheila Gilmore)—

“The DWP has not provided any explanation for the increase in ESA sanctions.”

There has been a dramatic increase in the number of ESA claimants being sanctioned, and it is not clear why.

The number of sanctions is one thing; another issue is their severity. To try to get a handle on that I tabled a series of questions asking for the total amount of benefit withheld as a result of benefit sanctions in each of the past four years. The Minister’s predecessor, the hon. Member for Fareham (Mr Hoban), gave a helpful answer on 25 March 2013, with a table showing

“the total amount of jobseeker’s allowance (JSA) withheld to the nearest £ million…as a result of fixed sanctions in each of the last four years up to 22 October 2012”.—[Official Report, 25 March 2013; Vol. 560, c. 986W.]

The table showed that in 2009-10—just before the election—£11 million was withheld. In 2010-11 the figure was £43 million, so it quadrupled after the election. In 2011-12 it was £45 million and in 2012-13, up to October 2012—so just for the first half of that financial year—it was £60 million. Therefore, taking the whole of 2012-13, benefit was being withheld at approximately 10 times the rate for the year before the general election.

I have since tried repeatedly to get an update on that figure, and the Minister yesterday provided a written answer in response to my latest attempt. She said:

“The Department has never estimated the amount of benefit withheld as a result of benefit sanctions.”

That clearly is not true, because her answer goes on to refer to the written answer of 25 March 2013, with its reference to the table—so the Department has previously provided an answer to my question. The Minister goes on to explain why her answer does not have a very helpful figure, but I am today tabling a further question to ask whether she will at least do the calculation again, so that we can see what has happened in the intervening period. I have also tried to find out with a written question how many jobseeker’s allowance claimants have been issued with a three-year benefit sanction. Some people have been sanctioned for three whole years—not four or six weeks, as we have heard—in each month since October 2012.

10:50

[The Minister for Employment (Esther McVey)]

It is a pleasure, Mr Howarth, to serve under your chairmanship. I thank the hon. Member for Sheffield Central (Paul Blomfield) for bringing this important debate to the Chamber. It is important for us to keep a spotlight on the sanctions regime.

Sanctions have always been part of the benefits system. As Oakley stated, benefits sanctions provide a vital backdrop in the social security system for jobseekers. They are a key element of mutual obligation underpinning both the effectiveness and fairness of the social security system. Sanctions help to ensure that claimants meet requirements designed to help to them to move into work. They are only a last resort as part of a wider agenda to help people to get a job and to move closer to the labour market.

Our approach is not to be tougher for its own sake, but to provide a clearer, more consistent and effective incentive to comply. Where sanctions are, how they are set up within the system and how they work are important. Before dealing with hon. Members’ questions individually and responding to the hon. Member for Sheffield Central, I will provide some context.

When the debate was arranged, I thought we should look at what was happening pre-2010. A system is always subject to changes, which must reflect what is happening, to make it better and support more people into work. When looking back—this probably answers the question from the right hon. Member for East Ham (Stephen Timms)—we must consider how sanctions were issued.

There was widespread inconsistency in decision making, with similar cases being treated differently even within jobcentres. We had to ensure that that did not happen so we focused on how to achieve greater consistency and efficiency throughout the introduction of our quality assurance framework. No targets were set and there are still no targets, but when we see variation, whether higher or lower, in the same jobcentre, we seek to ensure that a certain standard is maintained. We would check what various advisers are doing and whether the person concerned needs extra help and support to provide equality. It cannot be right that one jobseeker is treated differently from a friend, colleague or other jobseeker. That is why we made changes.

I also looked at what was happening in 2010 and there were some startling differences. Between 2004 and 2009—this raises a different question, but it is all part of the sanctions system and the extra help given—only four out of 10 British nationals got jobs, but six out of 10 foreign nationals did. We changed that round because it is key that, as well as sanctions, we provide a system that gives the right training, the right support and the right employability skills. In addition, discipline is necessary to maintain a job. All that must be provided. Since we have done that and fundamentally changed the system, nearly seven out of 10 British nationals are getting jobs. That must be seen in the context of the changes since 2010.

I look at the jobs market and what has happened, and at the various quotes. Since 2010, there has been an increase of nearly 2 million jobs. The Opposition said they thought there would be 1 million fewer jobs, but that is not the case. There are nearly 2 million more jobs and at the same time there are an extra 200,000 vacancies, so there are about 670,000 vacancies at any one time.

We must ask whether we have the right incentives in place to get people into work, and whether we are providing the right training, discipline and employability skills for people to get a job. We must look at the issue in the round. There have been significant changes.

[Ian Lavery]

On the millions of jobs that the Government claim they have created, the Office for National Statistics says that 1.4 million of them involve zero-hours contracts. Does the Minister believe that the Government are encouraging people into long-term employment by offering them contracts under which they might not make even £1 a week?

[Esther McVey]

The Labour party has already been brought to task by the UK Statistics Authority for talking about a significant increase in zero-hours contracts that did not happen. The contracts began in 2000 as the minimum wage was brought in. We know the number of people on them, and for the vast majority they work. When they do not work, we have not allowed exclusive contracts. We are doing something that the previous Government did not do. We want to ensure that people have a good job—not just any old job, but a job they want so that they have a career and progress. We know that three quarters of the jobs created since 2010 are full-time. I hope that answers the question.

The other key issue—for me, probably the most important thing the Government have done—is that fewer children are now growing up in workless households.

[Sheila Gilmore]

Will the Minister give way?

[Esther McVey]

I will not give way. I am setting the scene. I will answer the questions raised, and then I will take some more interventions, but not at the moment.

We know that the best route out of poverty is to have a job and that children born into a household where no one works are three times more likely to be in poverty. This year, we have reduced that number by 390,000. We are talking about poverty, and about support and help for people to get a job and to move forward. The Government have done significantly more than anybody else to support people on their way and into work. That is the background of sanctions and why they exist, and what we must do to meet and match and provide support.

We have introduced the youth contract for young people, with an extra 250,000 extra work experience places, and sector-based work academies. This year, we have seen the biggest fall in youth unemployment—by 250,000—since records began. We are fundamentally turning the lives of those people around, and sanctions are a tiny part of a massive system of support.

[Paul Blomfield]

The Minister is making a wide- ranging contribution, but I am conscious that she is— unintentionally, I am sure—leaving herself insufficient time to answer my specific questions. Will she meet me and Sheffield Citizens Advice to talk about them in more detail?

[Esther McVey]

What I will do first, so that I do not run out of time, is to answer the hon. Gentleman’s questions. He referred to various people who did not want their names given but had reasons why they thought they should not have been sanctioned. In many cases, there will have been good reasons for the sanction, but I would like to know what happened to those people.

The claimant commitment is being rolled out to 900,000 people so that the adviser understands what support people need, what journey they need to go on and their individual circumstances, which might mean that they are more vulnerable than other people and need more exemptions or time off because they can work or search for jobs only within certain time frames. That was the point of the claimant commitment and personalising the approach, which we are doing now.

Oakley rightly raised communications, what we were doing and how we could refine the system further. We know what we have done; we have helped people into work. We know what we have done with the sanctions regime, but how do we make it better, which we need to do constantly?

Oakley made 17 recommendations, all of which we have accepted. They include reviewing letters to claimants to ensure that they understand what is going on; work with experts to ensure that communication is better; and work with local authorities to improve communication on housing benefits, to ensure that people do not have their housing benefit stopped unnecessarily, which can make things worse for people. Those recommendations were implemented immediately unless they required substantial changes to the Work programme, in which case they will be introduced as that programme changes.

Assistive Technology Sector

Tuesday 2nd December 2014 Westminster Hall

11:00

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

We celebrate the UN international day for disabled people tomorrow and we will consider what help and support the Government should be offering small and medium-sized manufacturing enterprises, such as those in the assistive technology sector, in tomorrow’s autumn statement, so it is fitting that we should have a debate on the role of assistive technology and its empowering effects on disabled people in our society.

The UK is the world leader in the assistive technology sector, comprising 1,000 businesses and other enterprises, providing approximately 1,500 products to students with disabilities, helping to employ nearly 10,000 people in education and other connected sectors, and exporting technology across the world. A recent study by the Helen Hamlyn Centre for Design at the Royal College of Art, in partnership with BT and Scope, found that digital technology has the potential to change radically the lives of disabled people, but that they are a fifth less likely to be online than their peers. Scope’s partnership with BT provides disabled people with new opportunities to stay in touch with friends and family and help ease that digital exclusion, which can affect disabled people’s life chances and their state of well-being. That is done not only with new devices, but by adapting existing devices through, for example, developing new apps or open source software or hardware to cater for individual needs.

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

I congratulate my hon. Friend on bringing forward this important subject for debate this week. Given the beneficial effect he has highlighted of assistive technology, both for individuals and for our economy, does he agree that it is regrettable that the Government appear to be downgrading their interest in the subject, with their decision no longer to fund the Foundation for Assistive Technology to produce its independent report?

[Mr Bain]

Very much so—I am sure my hon. Friend will make an outstanding Minister for disabled people in a few months, and I look forward to working with her and championing the interests of disabled people. I think—I will develop this later—that what has happened reflects an attitude towards the needs of disabled people which sadly followed on from those terrible remarks by Lord Freud.

What we need from Government is policy that encourages the development of assistive technology, not discourages it. However, the sector feels neglected under this Government, with weaknesses in procurement practices in the NHS, responsibility divided between five different Ministers in three different Departments, and legislation affecting the industry being driven by a fourth Department.

In this debate, we should also thank Guide Dogs for the work that it does in promoting audio-visual final destination and next-stop announcement technology on buses. Many Members have had representations from constituents looking for that form of assistive technology to be installed on all new buses across the UK to boost accessibility, which would remove a barrier that many sight-impaired people experience when seeking to take up work.

Online services such as shopping or banking are vital for disabled people, but lack of accessibility remains a key issue. Most sites comply with accessibility standards, but the Scope study found that some disabled people still struggle to use those services, as codes and standards on websites do not meet accessibility needs. Scope has recommended measuring online services by how responsive they are, focusing on the person not the system, through, for example, examining how long it takes a disabled person to complete tasks online compared with non-disabled users of the same site. If it takes longer for a disabled person to use the service, the service provider must do more to make the site equally accessible. That is where assistive technology can really help.

One of the first Bills I voted on after being elected to this House was the one that became the Equality Act 2010, which creates duties on the Government and those providing services to the disabled, or hearing or sight-impaired people, or people with individual needs in learning, including the obligation to make reasonable adjustments to workplaces, places of study or elsewhere, to allow for the widest possible inclusion of people of talent in our universities, colleges and workplaces.

I experienced first hand, as a university lecturer in Glasgow and London for a decade, how essential the support provided by assistive technology to students’ learning experience is. It is a necessity, not a luxury. Many universities have improved greatly the resources available to students with particular learning needs, but it is wrong for the Government to shift the burden more and more on to universities, as the regulations before Parliament on disabled students’ allowances run the risk of doing. Government should work with universities to ensure that more students from backgrounds where there are special learning needs can prosper in higher education, not wash their hands of responsibilities to promote and deliver inclusive education under the Equality Act and article 24 of the UN convention on the rights of persons with disabilities.

Although the regulations on disabled students’ allowances would apply only to students and universities in England, they would have effects on UK-wide supply chains for companies involved in assistive technology manufacturing and development. That is something that, as a member of the Select Committee on Business, Innovation and Skills, I am extremely concerned about. All Members of this House should be concerned in this week of all weeks about additional costs for disabled people that could cause additional hardship for a section of the community which already feels that more acutely than many other people.

To be fair, the Minister for Universities, Science and Cities—I thought perhaps he was going to reply to this debate—responded to a strong, evidence-based argument earlier this year, when he decided to postpone the changes to disabled students’ allowances until 2016. He knows that the National Union of Students provided strong evidence showing that half of disabled students get their assistive technology through funding they receive through DSA, compared with only 8% of non-disabled students relying on allowances.

I hope that the Minister for Skills and Equalities will respond in a similar way to the representations that have been made on the regulations before Parliament. Regulation 10 of the Education (Student Support) (Amendment) Regulations 2014 changed the law to provide that DSA is only available in respect of expenditure on a computer minus a contribution by the student of £200. With 78% of disabled students surveyed by the NUS reporting owning a laptop, rather than an iPad, desktop computer or a MacBook Pro, it is effectively a tax of £200 per student on laptops payable next September for new students who qualify for DSA.

Many students are working long hours as well as studying at university, because for them, every penny counts. A look at any price comparison website will reveal that many popular brands of laptop computers are available for less than £200, but would not now qualify for DSA grants under those regulations, placing the obligation either directly on students themselves or on strained university budgets under this Government. Either universities will have to make the financial commitment themselves in pursuance of their duty to make reasonable adjustments under the Equality Act, or affected students will face the additional costs for equipment that is vital for them to be able to study properly.

It is grossly unfair that the Government have proven to be so out of touch in drawing up the new rules and bringing in a £200 laptop tax, even though the average expenditure per student has fallen over the past eight years. I urge them to take the opportunity presented by this debate to reflect again, or the Government who were the authors of the pasty tax and the granny tax will have a further problem with their legacy by inflicting an unfair £200 laptop tax on thousands of students with disabilities or acute learning needs who are beginning their courses next September.

Even more extraordinary is the Government’s position in the explanatory memorandum to the regulations, confirmed in parliamentary written answers to me by the Minister for Universities, Science and Cities, that the laptop tax would have no impact on business, charities or the voluntary sector. The views expressed to me by the assistive technology sector—by individual companies and by the British Assistive Technology Association—have been somewhat different from the complacent attitude shown by the Minister. It is striking that the Minister believes that the imposition of this new laptop tax would have no impact on the ability of students with disabilities or particular learning needs to attend university. That is not the view strongly expressed by the National Union of Students. There has been no answer from the Government about how the laptop tax would be paid or collected. It is the case that 83% of students purchase their laptop through their DSA payments and 98% of students told the NUS that that was the source of their funding for acquiring supportive software.

We have no details about what support the Government will provide to universities in cases in which a student faces particular financial hardship. We have no clarity on what will happen in the case of postgraduate students who would be eligible for DSA but no other financial support. We have no information about the Government’s plans for bulk purchasing, which they have previously floated as a solution to the problem that they have now got themselves into.

The Prime Minister once said that we should judge a Government by how they treat the most vulnerable. Disabled students have all the talent in the world and contribute billions of pounds in tax revenues to the economy when they graduate. They deserve a Government who are on their side, not acting against their interests with a £200 laptop tax being sneaked through the House without a substantive vote.

Assistive technology companies are one of our new economic success stories in manufacturing, contributing £55 million a year in tax revenues to the Exchequer. The 21 small businesses directly involved, some of which have been scathing about the lack of proper Government consultation and engagement on the proposal, and the wider supply chains that they support deserve better from Government than this. I urge the Minister to use the opportunity presented by the debate this week to reflect on what is right for disabled students and our universities, to support our small and medium-sized manufacturers in an important industrial sector and to scrap the laptop tax before it causes further financial hardship to thousands of disabled people across the country.

11:13

[The Minister for Skills and Equalities (Nick Boles)]

It is a great pleasure to serve under your chairmanship again, Mr Howarth.

I congratulate the hon. Member for Glasgow North East (Mr Bain) on securing this debate on a subject about which he is clearly very passionate. He is of course right to say that it is the responsibility of a fellow Minister in the Department for Business, Innovation and Skills, who unfortunately had another commitment today, which is why I am responding to the debate. It is fortuitous, therefore, that I have two advantages in coming to a subject on which I am otherwise not an expert. First, my Parliamentary Private Secretary is my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard), who has a great and equal passion for support for disabled people to make the most of their abilities and to be offered as many equal opportunities as it is technologically feasible to offer them in their lives. Secondly, by a bizarre coincidence—I was not even aware that I would be responding to the debate until quite recently—I spent yesterday evening, after returning home from voting in the House, filling out a disabled students’ allowance application form for someone in my family who has acute dyslexia and dyspraxia and scotopic sensitivity. I did not even know what that was until he told me, but it means that he is in a position to apply for some support with his studies. Therefore, although I am not an expert, I am entirely sympathetic to the cause raised by the hon. Gentleman and advocated passionately and consistently by my hon. Friend.

I entirely accept that this country is lucky in the range of businesses, charities and social enterprises that are active in trying to help disabled people to maximise their potential and gain access to all the opportunities on offer in education and employment. We are lucky in the range of innovation that is taking place—much of it is driven by this country—in improving technologies, inventing entirely new technologies and, as the hon. Gentleman said, creating adaptations to existing technologies that make them more accessible to people.

The hon. Gentleman’s core point, of course, is a direct attack on a proposal that the Government have brought forward on the disabled students’ allowance. He makes his argument with great passion, but as Members of his party and, even more, Front-Bench Members of his party ever do, he entirely fails to address the fundamental issue: the budget deficit, which remains very high and was the largest ever seen in peacetime in a western country, and the level of expenditure on the disabled students’ allowance in the years since this Government came to office. An increase did not take place only under the profligate chancellorship and premiership of the soon-to-be former right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown). A growth in expenditure has taken place under this coalition Government, who are pledged to try to bring the budget deficit down. To be clear, expenditure went up from £87.8 million in 2009-10 to £125 million in 2011-12. That is not the record of a penny-pinching or parsimonious Administration who are seeking to deny support to disabled people, or to withdraw access to technologies that would assist them. That is the record of a Government who are doing everything in their power to support vulnerable people but who nevertheless need to find economies.

[Mr Bain]

Will the Minister give way?

[Nick Boles]

I am afraid that I will not give way. The hon. Gentleman had his go and I am now responding to his very full speech.

This is the challenge we face: how do we continue to support disabled people in gaining access to education, employment and all the other opportunities of society while nevertheless ensuring that expenditure does not continue to increase by so great an amount? Disabled students’ allowance expenditure has increased by more than 30% in the space of less than three years and that is simply not sustainable.

Fortunately there have been further reforms—also opposed by the Opposition—to the state of university finance. Those reforms have dramatically improved the financial position of every university in the country by giving them access to higher tuition fees, funded by a system of heavily subsidised student loans. Universities are now in a dramatically different position from the one they were in when we came into government in 2010, so to expect them to make a contribution out of their broader, much improved resources to support disabled students is entirely reasonable.

Universities are benefiting from the tuition fees paid by those students; they are direct beneficiaries of the funding provided by those students; so to expect universities to play some part in discharging the responsibility to those students—not the whole part, because the Government will continue to play an important role and the disabled students’ allowance will continue to provide a great deal of the necessary support—by means of a further contribution is entirely reasonable.

The hon. Gentleman would have much more chance of making a persuasive case if he had an alternative plan for how to stop the growth in a budget that has increased by 30% in less than three years. If he came forward with such a plan, or indeed if any Labour Front-Bench Member on any area of government activity came forward with any plan to save any pound of public expenditure—we have not heard such plans from him, or from the hon. Member for Stretford and Urmston (Kate Green) in her area of activity, or from any Opposition Front Bencher—it might well be possible to look again at the Government’s proposals. However, until we hear such a plan, it is incumbent on him to explain why it is unreasonable for us to expect universities to make a greater contribution to the support for disabled people that we all passionately believe in.

11:21

Sitting suspended.

Wessex Route Study (Passenger Capacity)

Tuesday 2nd December 2014 Westminster Hall

[Mr Gary Streeter in the Chair]

14:29

[Maria Miller (Basingstoke) (Con)]

It is a pleasure to serve under your chairmanship in this important debate on the Wessex route plan, Mr Streeter.

In 1996, when the railways were set free from Government control, it was assumed that we would need to manage their decline. Nothing could have been further from the truth. Privatisation stopped what had become a gradual decline. Passenger numbers on our railways have more than doubled since then, going from 750 million to 1.6 billion journeys a year. There has been a 60% increase in freight, too.

Passenger numbers on routes in and out of Waterloo have doubled since privatisation to 220 million journeys a year. Waterloo is Britain’s busiest mainline station, with over 100 million passengers a year. It has more passengers than Heathrow airport, yet Waterloo is the only major route into London that in the past 30 years has not had money spent on it to make sure that it can cater for the record numbers of people using it every day to get to and from our capital and to and from work. Waterloo uses track layout that was designed for steam trains in the 1930s, which was when the last very big investment in infrastructure on the Waterloo route was made.

Why the delay? Why has no money gone in there? It is because decisions about redesigning the route were put off, because they were too complicated and nobody came up with credible solutions. Even when the last Government set sky-high house-building targets for the south-east, the infrastructure investment was not there for the railways to match that growth. In my Basingstoke constituency, the then council called for the highest possible levels of house building, with 13,000 homes built in Basingstoke in the last 15 years alone, but again, there were no solutions on rail and no solutions on transport for residents. What that means for my constituents and those of right hon. and hon. Members here today is increasing overcrowding, not only at peak times, but throughout other points in the day. Passengers now regularly stand for the 50 minutes between Basingstoke and London at peak times, but late-night trains, such as the one I got last Monday that left Waterloo at 10.20 pm, are also full to capacity, and weekend services can see that sort of extreme overcrowding, too. Just to remedy the existing overcrowding, we would need 20% more space on our trains. Passenger numbers are forecast to grow by another 40% in the next 30 years, so now is exactly the right time for a radical redesign and a radical solution for the future.

As rail becomes the overcrowded option, so our roads have to take more of the strain. The knock-on effect is chronic congestion on the M3 and other roads in the local strategic network. I very much welcome this Government’s approach of investing in our roads, and in Basingstoke we have had £20 million allocated to alleviate some of the worst problems of road congestion, but Basingstoke residents are still paying the price for the past under-investment. As the now leader of the council, Councillor Clive Sanders, has made it clear:

“Investment in the railways is vital if Basingstoke is to thrive economically. Connectivity and accessibility are key factors affecting growth.”

We cannot repeat the mistakes of the past, and we have seen this week that this Government are not going to do so. Their commitment to investing in infrastructure is clear for all to see, and the national infrastructure plan launched today is designed to ensure that investment in roads and rail is made part of our long-term economic plan for the country.

I want to put on the record my thanks to Network Rail and the alliance for their hard work in producing the Wessex route study, published just last week, because I believe that, for the first time, it offers a way to get the extra capacity that the Wessex route so badly needs. I know that there are many competing demands for Government spending, but I believe that a strong case can be made for the Wessex route to be a priority of future Government investment.

The main line out of Waterloo serves the most important economic area in Britain. It brings workers into London and serves businesses throughout the south-east. My constituency of Basingstoke is part of that, and our growth in new business was double the average of the south-east last year, with growth expected to continue at a rate of between 4% and 6% in the next year. Basingstoke has seen some 1,000 new businesses formed in the past 12 months, and our draft local plan could mean another 13,400 homes being built in the next 15 years. Along the length of the main line out of Waterloo, thousands of new homes will be built. It is estimated that that will result in 60% more train capacity being needed by 2043—equal to an extra 37 trains an hour into Waterloo on the main line in high peak hours.

More train capacity is needed the entire length of the Wessex route in Hampshire. In the words of Andrew Finney, the president of the Hampshire chamber of commerce:

“The market leading status of the Port of Southampton is threatened by a lack of rail capacity for cruise passengers and rail freight. In linking Coast, National Park and Capital visitor attractions, the route simply has to grow to maximise future tourism opportunities.”

Others have added their voice to calls for that investment. Mr Geoff French, the chairman of the Enterprise M3 local enterprise partnership, has said:

“Good transport communications have always been an important part of Basingstoke’s and indeed all of the Enterprise M3 areas’ development and economic success. Today these transport links are more congested and under greater pressure than ever before. That is why the current Wessex Route Study by Network Rail is so vital…rail capacity improvements are needed urgently.”

The economic case for investment in the Wessex route is strong. It is a compelling case that will support the long-term economic plan for our country. Doing nothing is not an option for Basingstoke, it is not an option for the south-east and it is not an option for the British economy.

As in our road strategy, we need to tackle the problems in the short term and the long term. The route into Waterloo already has more trains on it than any other in the country, with one train a minute arriving at Waterloo across its three routes at peak hours. That is all done on signalling that is 30 years old, as many of my residents can attest, thanks to the delays that they experience. By comparison, Thameslink is investing more than £7 billion to achieve the same frequency of services on modern signalling. In the short term, we will need to squeeze extra capacity from the current rail network, using the additional 150 carriages recently ordered to increase the length of shorter shoulder peak services from Basingstoke into London, to help people to spread their journeys through the day. However, longer trains will also be needed for late-night and weekend services, as well as adjustments in the signalling.

In the long term, the Wessex route study identifies that the additional capacity that is most required is inwards from Basingstoke and Guildford. I think the plan offers a real opportunity of a step change and real solutions. It is now out for consultation and I urge all right hon. and hon. Members to submit their thoughts as part of that consultation.

[Mr Mark Hoban (Fareham) (Con)]

My right hon. Friend is making a very cogent case on the need for extra investment in the routes into Waterloo, but she should not forget the importance of linking large urban centres outside London. The Wessex capacity study talks, for example, about the routes between Portsmouth, Winchester and Basingstoke, and Portsmouth, Southampton and Poole. Those are important centres economically, they are important centres of business, and they are residential areas, too.

[Maria Miller]

As I would expect, my hon. Friend makes the very important point that the Wessex route plan covers not only the main line, but all the surrounding areas. He is absolutely right to say that investment in this plan will yield even greater benefits than those that rely on the main line. If we took forward some of the recommendations in the Wessex route plan, that would be important not only for those of us in that part of the country, but for people throughout the country.

Bigger, faster trains are needed on the Wessex route. When we examine the situation in some detail, we can see that the problems that we are experiencing are akin to some of the problems the airline industry has had to consider in recent years, which led to the development of the Airbus A380. We should be looking at how we can develop longer, faster trains for our route in the long term.

The Wessex route needs to be the Government’s priority for the rail industry’s control period 6. We need to make good the under-investment of the past. In the short term, technical ingenuity will squeeze in some additional space for our local residents, who are suffering some of the worst train overcrowding in the country, and extra carriages at shoulder periods will help, but there will be no real solution in the long term without a significant plan of investment in both the hardware of the route and the vehicles that travel on it. Those bigger, faster trains will help the M3 corridor to continue to provide the power that the British economy needs. We need to ensure that businesses continue to want to locate themselves in the M3 corridor, because the people whom we represent rely on businesses seeing our area as an attractive place in which to locate and providing jobs for them and their families in the future. That certainty and economic success help to ensure that our constituents have the jobs that they need and economic prosperity for the future.

I very much welcome the opportunity afforded by today’s debate to put that message very firmly on the agenda of the Government as they look at their investment in rail in the future. I am very grateful to my right hon. Friend the Minister for coming here today and listening to the debate and to right hon. and hon. Members who have taken the opportunity to come and lend their weight to the case for prioritising the Wessex route.

14:43

[Mr Ben Bradshaw (Exeter) (Lab)]

I congratulate the right hon. Member for Basingstoke (Maria Miller) on securing the debate, which is very timely in the light of the document that was published earlier this week, or perhaps last week, if I have got the timing right. However, the principal reason why I wanted to speak in the debate is that when I received my copy of the document, it took me some time to find any reference in it to anything west of Salisbury.

As you will be aware, Mr Streeter, historically this was the main line, as far as Exeter, to the south-west. It was certainly the fastest and most direct one. It is only in relatively modern railway times, since the Great Western line took over as the principal route, that it has fallen into decline. However, with the renaissance of the rail industry that the right hon. Lady mentioned, it faces similar pressures to railways all over the country. It faces similar and very welcome increases in passenger numbers, and that is not just about people travelling between Exeter and Waterloo. This line is a favourite of retired people and students, because it has rather competitive pricing compared with the First Great Western line. That is an element of competition that I am sure everyone here agrees can only be a good thing. Although the journey times are a little longer as a rule, people can get cheaper prices, so it is a very popular line, not just with people for whom it is convenient—those living in the constituency of the right hon. Member for North West Hampshire (Sir George Young), who may be speaking in a few minutes—but with people from Exeter and people visiting Exeter from London and the south-east.

The line is a vital lifeline on the sadly increasing number of occasions when our main line, the Great Western line, is incapacitated, usually through some act of nature at the moment. In the past two or three winters, we have lost our connectivity on the main line for considerable periods and, as you will know, Mr Streeter, that has had a very damaging impact on the economy of the south-west. The alternative rail access provided by the Wessex line from Exeter to Waterloo has been incredibly valuable, although there was a week or so last winter when we had no connectivity at all because the line between Yeovil and Exeter was also blocked. I cannot remember whether that was because of flooding, landslides or trees, but the route suffers from resilience and vulnerability problems, which I shall discuss in a moment. I remember one famous weekend when I was coming back from my constituency and I was literally stranded. I always take my bicycle on the train between Exeter and London, and I had to put it in a taxi from Exeter all the way to Yeovil to get to the nearest train station. That, admittedly, was a rare event, but it helps to explain the sense of vulnerability and isolation that we have in the south-west, with these two fantastic but ageing and in-need-of-investment rail connections.

We can find one or two mentions of the line west of Salisbury in the document, which are welcome, but I hope that the Minister, when he sums up, will be able to reassure me that justified as all the investment is in the south-eastern portion of the line, east of Salisbury, this line will also receive investment. It performs a vital function, not just for long-distance travellers but increasingly for commuters in the Exeter area. We have growing and thriving communities. We have a new town, Cranbrook, just outside Exeter, which is getting a new station. We have growing villages and market towns—Feniton, Honiton and others—in east Devon and they have irregular services at the moment. In some cases, that makes it incredibly difficult for people who would like to use the train to commute to and from Exeter for work to do so.

Devon county council, along with the other local and regional partners, has come up with a visionary transport vision for the area, including something called the Devon metro, which would involve significant improvements and upgrading of the access routes in and out of Exeter by rail. This route is one of the most important. I do not have the figures with me, but I would not be at all surprised if a large number of people commuted every day to Exeter from the growing and thriving settlements in east Devon, but they have, as I said, very irregular services, which tend to finish early in the evening and do not always start early enough in the morning.

I shall explain what we desperately need on the this bit of railway west of Salisbury, which over time has been reduced largely to single track. That is the main problem. With a single-track railway, we cannot run services as frequently as we can on a double-track railway; we need passing places. There are a few passing places, but not enough; we need more. Just a few more passing places at strategic points would enable this railway to run trains more quickly and regularly. At the moment, it is difficult to combine a regular service from Exeter to Waterloo with local stopping services servicing the villages and towns that I have referred to, but we need both. With the huge growth in passenger numbers that we have seen in recent years, and which are projected to grow even more in future, and with all the public transport policy from all political parties urging and encouraging people to use public transport where possible, not just for climate change and pollution reasons but for reasons of chronic congestion in cities such as mine, we need those rail routes to function properly as commuter routes, as well as the leisure and long-distance routes that operate at the moment as an alternative to the Great Western line.

I say to the Minister, “Please, when you respond, don’t ignore the south-west.” I say that as chairman of the all-party group on rail in the south-west. The document unfortunately does not mention anything west of Salisbury in its opening pages or headlines. We have to look rather hard in the 180-plus pages to find anything at all about the line west of Salisbury. It is a very important line that has a great future.

I would like some reassurance that the proposals in the document will help Devon and enable Devon county council to deliver its vision for a Devon metro public transport system around Exeter. It is a fantastic, sustainable vision for transport around Exeter, and it is exactly the sort of thing that a forward-looking, visionary Minister, such as the right hon. Member for South Holland and The Deepings (Mr Hayes), should support. I look forward to his addressing it in his response.

14:50

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

It is a pleasure to serve under your chairmanship, Mr Streeter, and to follow the right hon. Member for Exeter (Mr Bradshaw), who is a fellow former chairman of the all-party group on cycling—I propose to say something about bicycles in a moment.

I congratulate my right hon. Friend the Member for Basingstoke (Maria Miller) on her choice of subject and on the way in which she made her case. My constituents are further west than hers, but they share an interest in increasing the capacity from Basingstoke to Waterloo. I commend her on the commitment to her constituents that she has shown in leading the campaign to drive up the quality of the service from Basingstoke to Waterloo.

As my right hon. Friend and the right hon. Member for Exeter both said, this is a timely debate, as the Network Rail-South West Trains alliance route study has just been published for consultation. It is a good example of how the public and private sectors can work together for the benefit of customers by taking local ownership of a problem and producing a collaborative solution. It is a thorough document running to 159 pages.

To put the debate in context, nearly 20 years ago I went on the first privatised train service from Twickenham to Waterloo. It was at 10 past 5 in the morning on Sunday 4 February 1996. The franchisee was South West Trains, which has retained the franchise. A fare dodger joined us, thinking that the train would be sparsely populated. Sadly for him, there were 100 journalists and 10 revenue protection officers on the train, so his crime was swiftly detected.

I mention that journey to emphasise how the context has changed in the past 20 to 30 years. Before privatisation, the only sources of investment in Wessex rail services were British Rail and the Government. If there was pressure on Government spending, the railways had to bear the pain. Nowadays, HMG are not the only source of investment, although I commend the Minister on the deal his Department has done with the Treasury. We now have rolling stock operating companies and train operating companies, which can invest in station improvements and service development using private funding.

We have also created a railway operating industry, which we did not have before. We have bus companies, airline companies and shipping companies. Train operators from overseas bid for franchises, thereby driving up the quality of the service for rail passengers. That was simply not possible when British Rail had a monopoly. The new system keeps the franchise holders on their toes.

Since winning the franchise some 20 years ago, South West Trains has done much to build on what it inherited. Crucially, it has increased services. We now have two trains that run at off-peak times to Andover. It has also increased capacity, which I will return to in a moment. There has been significant station investment at Overton and Andover, where we have a new newspaper and coffee shop, a refurbished waiting room and a new ticket office. I commend the regular surgeries that South West Trains holds in the House, at which Members of Parliament can discuss issues on behalf of their constituents.

However, South West Trains has become the victim of its own success, as my right hon. Friend the Member for Basingstoke explained. It has attracted more people to the railways, and there are now serious capacity issues. My constituents who return home in the evening often have to stand from Waterloo to Basingstoke because of the pressure on capacity. For those who travel in the morning from Andover, by the time the train reaches Whitchurch and Overton it is often standing room only. There is enormous pressure on seating at off-peak times—for example on Sunday evenings when university students are returning. As my right hon. Friend said, that problem is likely to become more acute. There is a forecast 40% volume growth over the next 30 years. Andover, like Basingstoke, is growing fast, with major expansion towards the east of the town, and both Overton and Whitchurch are likely to have more commuters.

The west of England line will be a vital lifeline when the A303 is dug up. As we heard yesterday, there will be a major improvement at Stonehenge, which I suspect will cause disruption, so people will rely on the west of England line. As the right hon. Member for Exeter said, it is a vital artery to the south-west, and it was the only rail connection during the bad weather a few months ago.

The problem at the moment is the massive constraint on capacity between Basingstoke, Woking and London. That is the key issue addressed by the timely Wessex route study, which rightly takes a long-term view of what needs to be done. I strongly support the measures to speed up journey times and increase capacity on the west of England line from Basingstoke to Salisbury by electrification and investing in faster and better rolling stock. The study proposes possible solutions, including running double-deck trains to Basingstoke and increasing some line speeds to 125 mph—something available for more than 40 years on other lines, such as the Great Western railway line.

If possible, we would like more carriages during the off-peak period. Often, the trains to Andover have three cars, which are under pressure. I would have thought that more rolling stock was available. Ticketing technology should be utilised. I would like to be able to print my ticket at home, which one can do on some lines, but at the moment one cannot do it on that franchise. I hope that in due course travellers will be able to swipe in and out at both ends of their journey.

One needs to keep an eye on the balance between first class and standard class to ensure that there is not over-capacity in first class and congestion in second class. We need to keep an eye on provision for bicycles—I am sure the right hon. Member for Exeter agrees. The most cost-effective and environmentally friendly way of making a journey is to bicycle to the station, go by train and bicycle at the other end. To do that, the trains must have the capacity to carry bicycles. I hope that will be a provision in the franchise.

We need a rail link to Heathrow from Woking station. There was a proposal, which I think was called air link, when I was in the Department that is now graced by my right hon. Friend the Member for South Holland and The Deepings (Mr Hayes). In the study, it is now called the southern rail access to Heathrow. A lot of travellers from the south-west want to get to Heathrow. At the moment, they must get off at Woking and catch a bus. It would be much more convenient for them to simply get on a rail link to Heathrow. I think the track is there for most of the journey, and I hope that my right hon. Friend the Minister will confirm that that remains a priority.

There are some local issues on which Kit Malthouse, who I hope will be the next Member of Parliament for North West Hampshire, and I are campaigning. There are real constraints on car-parking capacity at Andover, Overton and Whitchurch stations. There are proposals for a two-storey car park at Andover, which is urgently required. We also need more capacity at Whitchurch, where land is available to the north of the station. There is a proposal for a private operator to provide a passenger service from Andover to Ludgershall, perhaps on a steam train. It is supported by my neighbour, my hon. Friend the Member for Devizes (Claire Perry), a fellow Minister in the Department of my right hon. Friend the Member for South Holland and The Deepings. The Ministry of Defence has kept that line working—it is not used very often. I hope that my right hon. Friend the Minister will smile on a proposal to have a privately-run steam train on that branch.

Finally, I want to underline the point made by my right hon. Friend the Member for Basingstoke. We have done as much as we can with the existing infrastructure, and we now need a step change to increase capacity. The study offers a way forward. I hope that my right hon. Friend the Minister, when he winds up the debate, will smile on it and commend it as the right way forward.

14:58

[Steve Brine (Winchester) (Con)]

Like other Members, I congratulate my neighbour, my right hon. Friend the Member for Basingstoke (Maria Miller), on securing this debate. It is about an issue that she and I have discussed more times than we care to remember, and I have a feeling that we will talk about it many more times over the months and years ahead.

Today’s debate is a great success, not least given my right hon. Friend’s brilliant speech. Often in this House, we talk about things that are declining and problems in this country, but debates about the railways start with a great success story. As my other neighbour, my right hon. Friend the Member for North West Hampshire (Sir George Young), correctly said, South West Trains is the victim of its own success, and that could be said of the railway industry across our country.

I do not wish to speak for too long, although time seems to be on our side—I want to hear from the Minister—but I want to make a couple of points. My right hon. Friend said that we must watch first class carefully. I completely agree; I have thought that for a long time. We have all seen surplus capacity in the first-class carriages. The TOCs need to watch that closely. I have often wondered whether the idea of first-class provision on our railways is an anachronism in the modern age, but maybe that is a debate for another day.

For my constituents travelling to and from Winchester, the issue is all about capacity. I have stations at Micheldever, Shawford and Chandler’s Ford in my constituency, but the vast majority of travellers, some 4.5 million a year, use Winchester railway station. Thousands commute from Winchester to London, primarily, each day.

I echo others in mentioning some of the success stories for my station and my service during this Parliament, which have been significant. A £3.5 million scheme brought the new decked car park to the station. I say to my neighbour, my right hon. Friend the Member for Basingstoke, that it is very good and very welcome, but we should watch the lighting inside, which has to be right or there will be serious and legitimate safety concerns. We have excellent new cycling facilities. As a vice-chair of the all-party group on cycling, I was pleased to see those facilities come online.

We have a fantastic new footbridge at our railway station. When I became a Member of Parliament, people had to get taxicabs from one side of the station to the other, which was ludicrous. We now have wi-fi on many services leaving Winchester, which is brilliant, and we have made real steps on late-night safety around our railway station with the opening of a ticket office so that people do not have to go through the dark side gate. South West Trains—I do not apologise for pressing it again on this—knows that it needs to do better on that.

I am a regular commuter, and I receive feedback from constituents. The reliability of services on South West Trains is very good, and I get good feedback from people in that respect. That is not the issue on which I want to focus today. As others have said, the issue is with the lack of seats on the 6.31 am, the 6.48 am, the 7.5 am and the notorious 7.18 am—standing with one’s face in an armpit is probably one of the best outcomes for which one can hope on that service—out of Winchester into London. That is what really hurts my constituents.

A constituent who knew I was hoping to speak in this debate sent me a note saying that the key issue is obviously overcrowding on the early-morning services into Waterloo: “With ticket costs increasing year on year, and with little discernible increase in seating capacity, insult is being added to injury.” The Wessex route study, which I welcome very much, confirms that and neatly illustrates the current chronic undercapacity of services from Winchester. He said, “This is not news, Mr Brine,” and I completely agree. He talks about adding insult to injury—a standard season ticket between Winchester and London costs £5,500 a year, which is, next to their mortgage, the second biggest outgoing for many of my constituents. They are entitled to a seat for that money.

[Mr Bradshaw]

Is the hon. Gentleman aware that First Great Western has reduced the number of first-class carriages on its trains from three to two? That is a very good idea, although were South West Trains to follow suit, would he urge it not to lose the only quiet carriage in first class? I never go there myself because I am always in standard class, but I have had complaints from a number of people in the south-west who now have to put up with a lot of noise, as well as paying quite high fares.

[Steve Brine]

The right hon. Gentleman and I have spoken many times about some of these issues on the all-party group on cycling. Yes, the number of carriages should be reduced where there is a surplus, but I was making a wider point about whether it is morally correct to have first-class and second-class carriages on the railways.

On the subject of the so-called quiet carriage, some of my constituents—and probably some of the right hon. Gentleman’s constituents—would find the idea of a quiet carriage laughable. Even though there are big signs on the windows saying that the carriage is a quiet carriage, many people seem not to notice. I have heard many mobile phone conversations in the quiet carriage during my travels, so the railways may need to do some education work.

I was talking about the cost of a standard season ticket for my constituents, which is huge. It actually costs more to get a season ticket from Winchester to Waterloo than it does from Southampton to Waterloo, even though we are nearer London. South West Trains is well aware of that issue, and I wish it would address the situation. Part-time season tickets are a nut that we have failed to crack, and I would be interested if the Minister had a comment on that issue. Smart ticketing is a coming issue, and I believe I am right in saying that it requires some sort of change at parliamentary level. Perhaps the Minister will clarify that situation.

High demand for peak commuter services to Waterloo from all our constituencies is, as my right hon. Friend the Member for Basingstoke said, expected to increase dramatically over the years ahead. She coherently set out the housing development in her area; in my area our local plan, which is almost complete, is for 12,500 houses in the district over the next 20 years. Two thousand houses at the Barton Farm site, which is but half a mile from Winchester railway station, have been given the go-ahead in the past few years. I bitterly opposed that development. Yes, there will be a new primary school on the site, and there will be other infrastructure improvements from such a big development, but a brand new mainline railway station will not be built for my constituents as a result of that development, so something has to change and something has to give.

Southampton airport is a very short train ride from my constituency. Passengers going to and from that airport come through my railway station, and air passenger projections are only expected to grow. People relocating from London to places such as Winchester are welcome, and we enjoy having them. They come because of the “cheaper” housing in Winchester—everything is relative in life, but housing is certainly cheaper than in west London. They come to Winchester for the good schools, the great quality of life and the fantastic Christmas market that we have right now, but they want to commute back into London. They have every right to expect that they should be able to do that, and many contact me to say that they are horrified at the cost and the standing that they have to endure.

There are things that we can do, and others have mentioned some of them. The national infrastructure plan published yesterday has some very good announcements for my area. As I said in the House, the improvements to junction 9 of the M3, on which I campaigned for many years, are incredibly welcome. The smart motorways technology around junctions 10 and 14 are also a welcome investment in our motorway infrastructure for my constituents. Credit to the Minister and his Department for doing that. I thank him on behalf of my constituents.

There are things that we can do as a city. One of the core corporate priorities of Winchester city council is to reduce the daily outward migration from the city for work, which is why the council is so keen to redevelop Station approach, to keep top-quality employers such as Denplan and to attract other big, quality employers, all of which reduces the necessity for people to travel to London every day. It is important that should happen. Those are all things that we can do, but we cannot control all of them. The issue is about capacity.

The key constraints for passenger services are highlighted in the study, which states:

“the layout of the Waterloo throat restricts the number of services that can access the platforms at any one time; the layout at Clapham Junction does not allow all trains that currently pass through the station to stop there”.

The study continues:

“A further constraint on the ability…to accommodate passenger growth is the capacity of some station car parks”.

We have gone some way in that respect, but many other places have not yet done so.

Capacity is the issue. I admit that I was sceptical about the local enterprise partnerships, but they are part of the solution, as is Hampshire county council. Winchester Action on Climate Change sent me a brief ahead of today’s debate and, judging by its name, it is keen on railway travel, as am I. The organisation makes some positive contributions, and it will be responding to the route study in due course.

My right hon. Friend the Member for Basingstoke talked about a significant plan of investment, which is exactly what is needed—now really is the moment for that. Ahead of this debate one of my constituents said to me, “A lot of the discussion points in the Wessex route plan are very big-picture and will take a long time, cost a lot of money and need a lot of political and stakeholder buy-in. What can we do in the short term?” I place one point on the record for the Minister’s consideration—I know he likes to muse on these things. As a temporary solution, could we make greater use of Victoria station for trains coming in from the Wessex area? I leave that idea for him to ponder.

You will be pleased to know, Mr Streeter, that I have nearly finished. First, however, I have some questions for the Minister. I know that St Pancras and all the investment there are very much on Ministers’ radars, but is Waterloo on the Minister’s radar? I do not know whether it is, but it needs to be.

[The Minister of State, Department for Transport (Mr John Hayes)]

I may be able to deal with that point now, so that we can settle the issue. Waterloo is absolutely on our radar. Further improvements will be made in terms of platforms coming into Waterloo, but I want to go a little further, as the Rail Minister for the day. I think we should take the lead from King’s Cross and St Pancras when it comes to the look and feel of some of our major stations. On that basis, we could do a great deal of work at Waterloo. I will ask officials to discuss the matter with the relevant people in the same spirit as my hon. Friend has shown.

[Steve Brine]

That is a fantastic response, and my colleagues here will be pleased to hear it. Today must be the start of the conversation. The document is an excellent starting point, and we will all respond to it, as it has been suggested we must. As a group, Members from Hampshire are happy to see the Minister at any time to help push this conversation forward.

Do the Government have a view on double-deck rolling stock, which is mentioned in the document? Clearly, there are lots of historical issues to do with bridges, which sometimes make that particular issue challenging, but does the Minister have a view?

We have had a good document, a good start and an excellent debate. I am glad to hear that Waterloo is so firmly on the Minister’s radar. However, we really have done as much as we can on car parking, wi-fi, cycle parking, foot bridges, the wonderful new concessions at Waterloo and making things nice for the traveller there. In many ways, that is the icing on the cake, but we now need to go back and work on the cake—that is about the infrastructure and the routes in and out of Waterloo. That is where we need real help and real change for all our constituents.

15:12

[Lilian Greenwood (Nottingham South) (Lab)]

It is a pleasure to serve under your chairmanship for, I think, the first time, Mr Streeter. I congratulate the right hon. Member for Basingstoke (Maria Miller) on securing this timely debate. She spoke persuasively about the discomfort many of her constituents face, the inconvenience experienced when services are inadequate and the unacceptable numbers who have to stand on their daily commute and even in the evenings and at weekends.

I would like to take this opportunity to say how welcome it is to face the Minister for the first time. In May, I had the pleasure of travelling through his constituency on the line through Spalding. I know that he is familiar with Nottingham South, because he was a councillor in Wollaton for many years. I am sure that at some point he would be glad to hear about the excellent work his Labour successors are doing in the area.

The Wessex area suffers from serious overcrowding and other capacity constraints. The 07.32 service from Woking to London is reckoned to be the most overcrowded commuter train in the country. The hon. Member for Winchester (Steve Brine) described the uncomfortable commute he and his constituents face from his area. The route study itself says:

“Standing is commonplace from Woking and Basingstoke”,

and those are clearly not the only parts of the route that are affected.

Waterloo is the busiest station in Britain and has the second highest number of train movements on the network. The region has vital freight links, especially from the port of Southampton to the midlands and the north. As my right hon. Friend the Member for Exeter (Mr Bradshaw) said, it also provides an important alternative route to the south-west and vital local connections for his constituents.

The Wessex route study is a sobering reminder of the challenges the region faces. According to Network Rail, a 20% boost in capacity is needed to address just the current levels of overcrowding. To meet expected growth in demand, a further 40% increase in capacity is needed by 2043. The question is how that additional 60% can be found.

[Maria Miller]

Would the hon. Lady like to reflect on why we we already have a 20% shortfall in capacity? The former Labour Government encouraged so much demand and so many houses were built in the area, but there was simply no investment in the rail or road networks to make that house building sustainable.

[Lilian Greenwood]

I thank the right hon. Lady for that intervention, and I will set out in due course some of the issues around investing in the railways to meet demand.

There are some short-term steps that can be taken toward the 60% increase in capacity that is required. I am sure that, like me, the Minister is regularly lobbied—perhaps he is not, as he is only the stand-in Rail Minister today—on the need to extend trains that are formed of fewer than 10 carriages or even 12 carriages. Substantial investment has gone into rolling stock over the last 15 years, and I am proud of the last Government’s decision to fund the removal of unsafe, slam-door coaches from the region. In particular, my right hon. Friend the Member for Warley (Mr Spellar) deserves credit for the steps he took when he was Minister of State for Transport to bring together the train operators and manufacturers to hammer out a solution, which, just a few years earlier, was thought impossible.

There are routes where more carriages could be added and more trains run. As the report makes clear, however, the increase in capacity could be as little as 3% on some routes in the Wessex area, and some sections of track have reached the effective limit of their capacity on current signalling systems. We cannot pretend that there are easy solutions. Network Rail is clearly exploring all the options, including, as the hon. Member for Winchester said, the possibility of running double-decker trains for the first time in Britain since 1971. In that case too, however, there are significant obstacles to overcome.

I would like to focus on two points: first, the need for better planning of investment and the co-ordination of infrastructure improvements with orders for new trains; and, secondly, the rising cost of living for passengers who have faced fare rises of 20% in the last four years. In some cases, the prices of season tickets have risen even faster, and fares are, of course, set to rise again in January.

The Wessex area is one of the busiest on the whole network in both passenger numbers and the frequency of trains. As right hon. and hon. Members have said, the railways have seen a spectacular increase in the number of passengers over the last 20 years. They now carry the same number of passengers as in the 1920s, on a network that is less than half the size. That growth is probably not a result of privatisation; it has happened because, under 13 years of the Labour Government, there was record public investment in our railways. We could contrast that with the early 1990s. Network SouthEast had a major rolling stock order cancelled, even though it would have provided new trains. Instead, the industry saw job losses and 1,000 days without rolling stock orders. It took Labour to intervene to get rid of those unsafe, slam-door, mark 1 coaches. Let me just give an idea of the scale of that spending commitment. Some £500 million had been spent on the South West Trains area by the early 2000s—the same amount that was provided to the entire Network SouthEast sector under the previous Conservative Government. I am very proud of Labour’s record of investing in the railways, and I am delighted that investment has continued under the current Government.

In the context of long-distance Wessex services, the study notes:

“Capacity has failed to keep pace with rising demand.”

It is clear that, in the long term, significant infrastructure improvements will be needed to accommodate more passengers and more trains. Although new services could be run today, they would come at the expense of reliability.

It is worth dwelling on some of the language used in the Wessex document. I think it is fair to say that the Wessex route study was not intended for a wide readership, but passengers should be aware of the decisions being taken about their services and of the potential impact on the quality of their journeys. Options are being considered even though they could adversely affect other services. Also, frankly, the English could be plainer. When the option of running more trains is raised, the route study says:

“At this level of network utilisation, further measures are likely to be required to ensure the service can be operated punctually and reliably”.

Of the Windsor line, it says:

“Increasing the overall level of service into London Waterloo to 20 tph”—

trains per hour—

“on the Windsor lines may have a small negative impact upon the overall level of punctuality and reliability”.

On the option of adding two more long-distance services an hour, it states:

“Additional performance mitigation measures may be required”.

Punctuality on South West Trains is already below the national average. It would be helpful if the Minister explained what exactly the effect would be on existing trains if infrastructure improvements were not made.

Of course, the plans also require the purchase of new trains: 72 new passenger trains are required in the peak by 2024, and 156 new vehicles are required by 2043. There is also the possibility of running specialised double-decker trains from Waterloo to Basingstoke and Southampton. I am sure that passengers would welcome the increase in the number of seats, but the challenges of raising and widening bridges and tunnels on the route are likely to be significant. There have already been too many decisions about rolling stock that have not been co-ordinated with infrastructure changes. The technical challenges of the proposals in the document show up the need for a proper long-term rolling stock strategy that will bring together decisions about procurement and infrastructure investment.

[Steve Brine]

Does the hon. Lady agree that we are uniquely well placed within the rail industry to do some of the things she has mentioned, because the South West Trains and Network Rail alliance is the bringing together, as far as possible within the legislative framework, of track and TOC?

[Lilian Greenwood]

I think that the deep alliance on the Wessex routes provides interesting opportunities, although there is much talk in the industry about the fact that, although it sounds good, what it will deliver is not clear. We really need to break down the fragmentation to make sure there is symbiosis between the planning of infrastructure and the procurement of rolling stock, which of course falls outside the alliance.

We also need to plan ways for the rail network to benefit from major projects, which, as the report states, include High Speed 2, Crossrail and, potentially, Crossrail 2. I am glad that HS2 Ltd is finally hiring an experienced operations manager to plan the options for integrating HS2 with the existing network. It would be good if the Minister updated us on the progress that has been made with that appointment. Crossrail 2 in particular could benefit the Wessex area, because some local services could enter the proposed tunnel at Wimbledon, freeing capacity at Waterloo. Whatever the Davies commission recommends, we want better rail links to Heathrow, Gatwick and regional airports such as Southampton. We need to know that that planning work is already under way and that decisions about allocation of that capacity are made fairly. Perhaps the Minister will deal with that point.

As the right hon. Member for Basingstoke, my right hon. Friend the Member for Exeter and the hon. Member for Fareham (Mr Hoban) said, it is also important to strengthen links between towns and cities outside London. For example, off peak, the Basingstoke to Portsmouth train runs at only 32 mph. Proposals for a faster Brighton to Bristol service are welcome, but, again, passengers will want to know the implications for existing local services.

The five-year control periods have been an important mechanism for funding the railways with a degree of certainty. A project that was due to be completed in control period 5 was the conversion of the Southampton to Basingstoke line from third-rail to overhead-line electrification, a project that could bring significant cost savings. It was included in the Government’s 2012 high-level output specification statement for this control period, but the route study says that conversion is intended

“between Basingstoke and the docks at Southampton at some point during CP6.”

There has been uncertainty about the wider electrification programme, with reported cost increases of at least £500 million, so will the Minister confirm today that the Basingstoke to Southampton project has been delayed?

Finally, but most important, passengers face ever-increasing travel costs, even when commuters are unable to board trains at stations and thousands are forced to stand every day. As the hon. Member for Winchester noted, some people’s season ticket costs almost as much as their mortgage. Fares have risen on average by 20% since 2010, even though wages have risen by only 5% in the same period, and they are set to rise again in January. Ministers’ decision to restore “flex” after the election has led to some fares rising even higher than the supposed cap. A season ticket from Basingstoke to London now costs £724 more than it did in 2010—an increase of 21.6%. There is evidence that “flex” has been used unfairly to target commuters who have no choice but to travel by train. The Government evidently agree, at least in principle, because they scrapped the “flex” for 2015—for one year only. I will finish by asking the Minister whether he will bring relief to commuters in Wessex and the rest of the country by implementing a real cap on fare rises, and scrapping “flex” completely.

15:25

[The Minister of State, Department for Transport (Mr John Hayes)]

What a pleasure it is to serve under your chairmanship, Mr Streeter, and to be Rail Minister for a day! It is not the first time, as I have already performed once in that capacity, but I am delighted to do so again, particularly in response to the Adjournment debate of my right hon. Friend the Member for Basingstoke (Maria Miller). I congratulate her on securing it.

My right hon. Friend has once again shown that she is a great champion of the interests of the people of Basingstoke. She has also brought to the Chamber’s attention some wider issues, which I shall attempt to address in the limited time available. Should I not be able to get to all the matters raised by hon. Members—and there were many—I shall certainly write to them with details afterwards.

I think it was G.K. Chesterton who said:

“The centre of every man’s existence is a dream.”

It was that spirit that led to the creation of this country’s railways; without the vision and the dream, the reality would not have happened. That spirit, vision and passion for railways is needed at the core of future policy. Of course utility matters, but we must not be constrained by facts. We must have a big view of what railways can be, and what we can achieve. I shall attempt to imbue all that I say today with that passion for what railways can be.

My right hon. Friend made it clear that we are going through a railways renaissance. She was right to highlight the doubling in passenger numbers and to say that the prophecies of the prophets of doom at the time of privatisation have been frustrated by the response of the railway industry and passengers to the opportunities provided by rail travel. I was grateful that she brought that to the attention of the Chamber.

Across Great Britain, railways are playing an increasingly important role in economic development, are they not? When we speak of travel and transport, we need to speak of well-being as well as the economic effect, although the economic effect is not inconsiderable. Rail links people to their homes, jobs and recreational pursuits. That is particularly true across the south-east commuter network, including the Wessex route. As my right hon. Friend said, passenger numbers have doubled across the country in the past 15 years, and the Wessex route is no exception.

It might be helpful to begin with if I were to explain that Network Rail’s Wessex route encompasses the long-distance routes of London Waterloo to Portsmouth, Southampton, Weymouth, Salisbury and Exeter. It also serves the north downs line, linking Reading and Guildford to Redhill and Gatwick airport. It is therefore a vital component of the railway network, transporting millions of commuters into London and providing essential links to Gatwick and Southampton airports. I promise the right hon. Member for Exeter (Mr Bradshaw) that I will deal with the south-west part of the network, as I attempt to address the range of matters raised in this important debate.

South West Trains operates about 1,700 services a day, and about 222 million passenger journeys were made on its trains last year. In Basingstoke station alone, there are more than 5 million entries and exits a year. In debates such as these, I like to offer Members rather more than a litany of what we have already done and to give them the prospect of what we intend to do. I am delighted to tell my right hon. Friend the Member for Basingstoke today that South West Trains is currently developing plans for improvements to the forecourt of Basingstoke station. Those works are yet to be guaranteed, but, if approved, they will start next year, with an estimated value of £30,000. We want to make the station as attractive as it can be and that work on the forecourt will do just that.

Crowding on services to Basingstoke and other destinations along the south west main line to London Waterloo, the UK’s busiest railway station, is, as my right hon. Friend said, a continuing challenge. One might say that it is a well-known issue. Ensuring that there is enough capacity on trains is one of the highest priorities for passengers and it is one of the key issues that we are tackling head on. The matter has been raised by a range of speakers in the debate, including my right hon. Friend the Member for North West Hampshire (Sir George Young), my hon. Friend the Member for Winchester (Steve Brine) and the hon. Member for Nottingham South (Lilian Greenwood). I am pleased and extremely proud that the Government have pledged more than £38 billion in support for the rail industry in England and Wales over the period 2014 to 2019. That massive investment will significantly contribute to improving the capacity and quality of the network, which is seeing such a big growth in demand.

I will return in a moment to another aspect of what my right hon. Friend raised. She is right to say that, in anticipating capacity demand, we need to look across government at the effects of other policies: the consequences of our plan for growth and the relationship of that with transport and travel—rail travel, in particular. In that spirit, she will be happy to hear that the investment I described includes a significant commitment to the South West Trains network.

It may be helpful if I explain to my right hon. Friend and other Members the process for delivering capacity improvements, because that was raised by both my right hon. Friend the Member for North West Hampshire and my hon. Friend the Member for Winchester. Essentially, it is a two-stage process. In the first instance, it is necessary to tackle the issues that constrain the suburban network in order to create the extra platform capacity at London Waterloo station. That will allow the industry to address the mainline capacity issues, which will benefit my right hon. Friend the Member for Basingstoke, her constituents and other constituencies. As I pledged earlier, in providing that extra capacity at Waterloo, we will also look at the style and character of that station. In a sense, we raised the bar at St Pancras and King’s Cross and people now expect the look and feel of London stations to match the best. We can do more in those terms at Waterloo.

In September, the Under-Secretary of State for Transport, my hon. Friend the Member for Devizes (Claire Perry), announced the latest capacity enhancement to be contracted with South West Trains. As part of plans to provide capacity for an extra 24,000 peak-time passengers each day, 150 new vehicles are being manufactured by Siemens to be put into passenger use by the start of 2018. However, the hon. Member for Nottingham South—as she said, I know her constituency well—made a good point in saying that we need to ensure that our policy is coherent. We need to be certain that the changes we make to rolling stock are integrated with the other necessary engineering considerations. I will ask officials to look afresh at that to ensure that we are pulling together all the necessary decisions in the way she proposed.

On the introduction of the new fleet, I should say that existing trains will be cascaded, which will provide some additional mainline capacity, including one additional peak service from each of Basingstoke and Woking. That is in addition to the extra 108 carriages that are already starting to arrive and are being put into passenger service, to increase capacity each day by 23,000 at peak times. A similar cascade is also adding capacity to a number of peak mainline services that are not already operating at maximum capacity. That issue was raised during the debate and it is very much part of our thinking.

During the same period, Network Rail will carry out major enhancement and renewal works in and around the Waterloo area at a cost of several hundred million pounds. The signalling system that covers much of the suburban network needs to be renewed, as my right hon. Friend the Member for North West Hampshire said. As part of that project, a new turn-back facility will be created so that an additional four services can operate at peak times from Hounslow to Waterloo.

By 2017, Network Rail will have carried out works to bring the remaining four platforms at the former Waterloo International terminal back into full operational use for scheduled domestic services, restoring a vital piece of the south western route infrastructure to domestic use. The availability of those extra platforms is essential to the plans to extend platforms 1 to 4 at Waterloo. Those platforms serve the main suburban routes and, once extended, they will be able to accommodate 10-car-length trains. That will remove the last constraint that has for many years hampered plans to increase mainline suburban capacity beyond trains with a maximum of eight cars.

All that takes time, and considerable effort in planning, to minimise impact on passengers. That point has been made and I recognise that people will have concerns—these are major engineering schemes and, as they are implemented, we need to ensure that disruption is minimised. There will be some disruption, however, so we have made it clear to the south-western railway that it will have to deliver high-quality communication to its passengers about what that will mean to their daily journey as it makes its plans.

However, I have every confidence that the long-term capacity uplift will be warmly welcomed by passengers and the prospect of better services will make short-term disruption more acceptable. My experience is that, when people know where they stand, they can adjust their arrangements accordingly, but it is important that we get the information out. I will endeavour to ensure that Members in affected areas are informed of the changes at the earliest opportunity so that they can act as one of the conduits for the dispersal of that important information. We will look at other mechanisms as well.

I understand that, even with this investment, some of the capacity issues on the main line remain and that that is a source of some frustration for my right hon. Friend the Member for Basingstoke and other Members. I therefore turn to the process for securing further investment in the railway.

To begin with, it may be useful to explain that major investments in the railway are funded on the basis of five-year funding cycles known as control periods, as hon. Members have mentioned. We are currently in control period 5, which began earlier this year and will run until 2019. During this control period, the Government are providing Network Rail and the rest of the rail industry with more than £16 billion to upgrade and enhance the networks in England and Wales. It is from that funding pot, known as the Government’s rail investment strategy, that many of the capacity enhancements I have already referred to will be financed.

The right hon. Member for Exeter asked specifically about services to his area. As he knows, although the rest of the Chamber may not—you will know this, Mr Streeter, given your local expertise—Exeter has two routes to London. The great western line is being upgraded during control period 5. That will include a number of resilience improvements, but I will ask that they are considered closely again to take account of some of the points that he made. The second route, via Salisbury, enjoys less demand and has less capacity. I think, however, that the route study needs to consider longer-term options to increase capacity, with more passing places and options for electrification of that route. As a direct result of this debate and the right hon. Gentleman’s overtures, I will ensure that we look at that closely and communicate those thoughts to him.

My right hon. Friend the Member for North West Hampshire, speaking with all the expertise from his own involvement in this Department as a distinguished Minister many years ago, before I entered the House—I was going to say “when I was a child”, but that would be something of an exaggeration—raised any number of fascinating matters. I will make all kinds of commitments to him, because if one is the Rail Minister for the day, one can do just that. The civil service will be shaking in its boots as I make this speech.

[Sir George Young]

Go for it.

[Mr Hayes]

Ongoing developments for cycle space provision should be part of all franchises, in my judgment, and from today they will be.

The business decisions of train operators on the issue of first and standard class balance has been raised by a number of hon. Members, including my hon. Friend the Member for Winchester. We need to ensure that we make best use of space on trains. That use will vary from time to time and I do not want to make any prescriptive judgment, but discussion of that issue needs to take place regularly, based on a proper analysis of use. If, as has been described, some carriages are empty and others are full to the point of bursting, we need to respond to that situation.

The argument about Heathrow southern access was a really good one. We need to have a new study on that issue, which should begin this autumn and which should be published as soon as possible, ideally—indeed, at the latest—by early next year, and we need to consider what more can be done.

On the issue of car-parking capacity, it is important that we identify demand and sites for car parks, and I am more than happy to commit to working with local councils to do that. Perhaps we just need to drop a line to those local authorities to remind them of our willingness to have that kind of dialogue, particularly where we know, from Members across the House, that there are pressing problems. There is a history at certain stations of parking issues, so perhaps we can initiate some new thinking on that.

When they think of railways, everyone thinks of Stephenson; some, with a more curious turn of mind, think also of Hodgkinson; and all romantics—such as you and me, Mr Streeter—think of Jenny Agutter and John Betjeman, do we not? We think of “The Railway Children” and Betjeman’s advocacy of the romance of rail. To that end, I would be very happy to facilitate contact with Network Rail to allow the steam train that the Under-Secretary of State for Transport, my hon. Friend the Member for Devizes, who has ministerial responsibility for rail, has pressed for. Indeed, the case for that train was amplified today by my right hon. Friend the Member for North West Hampshire. Let us allow this to happen, and in that spirit let us look again at the historic estate. We have many old railway stations, some of which could be brought back into use. We also have many glorious signal boxes; more of them should be listed. Let us once again be bold and ambitious to have our dream of the romance of rail, and turn that dream into a reality.

My right hon. Friend talked about the capacity issue. Of course, his area will benefit from the commitment to increase capacity at Waterloo during the period between 2014 and 2019, and from proposals to “grade separate” working junctions in control period 6. I will come on to that in a moment, because it is important to say first that the process for identifying possible investments and upgrades for the next control period—between 2019 and 2024—began recently. As such, there are opportunities for my right hon. Friend, other Members and the public in general to contribute to this process and to influence the Government’s next rail investment strategy.

When these drafts are issued, it is important that right hon. and hon. Members understand that they can play a part in shaping the final outcomes. When I last spoke on railway matters, I emphasised that these things are not set in stone. The whole process is by its nature consultative, and drafts should not be deemed to be the final word on these matters, but instead a catalyst for fresh thinking, with right hon. and hon. Members playing a vital role in the process.

I return to the specific part of the railway under discussion today. Network Rail recently published its draft Wessex route study for just that kind of consultation. It highlights the network constraints in the area of Basingstoke, which include a mix of speed limits and the confluence of several lines. Due to its location on the south-west main line, Basingstoke suffers from the convergence of several routes further up the line at Woking, as my right hon. Friend the Member for Basingstoke suggested.

For those reasons, two of Network Rail’s emerging priorities for the next control period are, as I said earlier when dealing with my right hon. Friend’s questions, to “grade separate” the junctions at Woking and Basingstoke. For the benefit of those Members who do not speak in railway terms, as I myself did not until very recently, that term refers to the lifting, via a bridge, or dropping, via a tunnel, of a track over or under another, which means that trains moving in one direction do not get in the way of trains going in the other direction, preventing some of the frustrating stopping and starting with which many rail travellers are familiar.

In addition, the draft route study sets out options for the possible introduction of double-decker trains between Basingstoke and London; such trains were mentioned earlier in the debate. Although they are a common sight in other European countries, they have not really appeared on the British rail network, partly due to the height of some of our Victorian tunnels and bridges. As I have said, because I value the historic estate I would not want to see those tunnels and bridges being disregarded. Nevertheless, while the introduction of double-decker trains would necessitate the adaptation of the network, Network Rail is of the view that they may be a viable option on certain lines, and I am sure that my right hon. Friend and her constituents would relish the chance to lead the roll-out of such exciting technology on their line, becoming early beneficiaries of the additional capacity that it would bring.

Let me reiterate that these ideas are some of the emerging views for control period 6. The draft route study has been articulated and published by Network Rail, based on the information available to it at the time the route study was published. Indeed, the document acknowledges that the dominant issue is the need to provide sufficient capacity in peak periods, and consequently it has focused on developing choices to address that issue where needed, such as options to increase peak main-line capacity through use of new technology and “grade separated” junctions.

To that end, Network Rail is working with Transport for London, local authorities along the route and other stakeholders better to understand their views on these matters. My right hon. Friend the Member for Basingstoke eloquently and clearly outlined the other pressures that are likely to affect capacity. I know that she is concerned that the housing growth that is planned in and around her constituency will have a dramatic impact on that demand-supply balance.

I want my right hon. Friend to know today that I understand that concern, and that the Government appreciate the point she made about the importance of ensuring that wider policies are fully taken into account when capacity on this line is being planned. The case she has made has been heard by the Government and will be built into our further considerations.

[Maria Miller]

I thank the Minister for giving way; he is generous with his time. It is incredibly reassuring to hear what he is saying, because at this point in time it appears that house-building levels are not taken into account when future capacity is determined, and indeed that capacity is more likely to be determined by the number of new jobs generated in London than by the number of houses being built in my constituency, or indeed in the constituencies of my hon. Friend the Member for Winchester (Steve Brine) and my right hon. Friend the Member for North West Hampshire (Sir George Young). We need to make sure that this issue is taken into account, so that we can ensure that the proper increase in capacity on the line is put in place now.

[Mr Hayes]

My right hon. Friend needs to know that Basingstoke, North West Hampshire and Winchester are never far from my mind, and that they have been brought to the forefront of my mind today. As a result of this debate, I will ask my officials to take into account the views she has articulated and to make it perfectly clear that—in a proper, joined-up and coherent way—we consider some of the effects of growing population and the likelihood of that growth increasing demand for rail use. It would certainly be a fitting tribute to her and to the debate she has stimulated today for me to deliver that fresh thinking for her, which is precisely what I will try to do.

I think that the issue of ticketing was raised by my right hon. Friend—my hon. Friend the Member for Winchester mentioned it as well—and I am open to further consideration of the options, in terms of technological changes, that would speed up the ticketing process. I am also mindful of what my right hon. Friend said about fares. My commitment on fares is very clear.

[Steve Brine]

On ticketing, I specifically mentioned part-time season tickets, which constituents constantly raise with me. It is a smart-ticketing issue, but is that solely down to the train operating companies or is there a regulatory issue that the Government need to intervene on before part-time season tickets can be made available? Perhaps he will write to me on the subject.

[Mr Hayes]

I will write to my hon. Friend about the detail, but my view about all these things is that there should be a dialogue between the Government and the operating companies, because there we need lines of accountability for all public services to Government and, through the Government, to this House. When hon. Members raise such issues, it is important that there are means by which they can be communicated to the people who make the decisions. It is right that we have that dialogue, and I assure my hon. Friend that that will take place.

We understand the issues about housing and why my right hon. Friend the Member for Basingstoke introduced this debate, and we understand the implications of her argument. Responses to the consultation will, as I said, feed into the final version of the Wessex route study, which is due to be published next year. That will then help to inform the Government’s priorities for the next rail investment strategy for the period 2019 to 2024.

Finally, as I reach my exciting peroration, may I explain that as well as looking at potential funding priorities for control period 6, the Wessex route study is looking at much longer-term funding priorities for this route? I spoke about vision and dreams. We should be ambitious for this route and, in looking ahead to 2043, we need to think about long-term changes to supply and demand and about rail travellers’ changing expectations, including considering increasing capacity—extra tracks—on key sections closer to London or, indeed, Crossrail 2. Again, on those matters of longer-term funding, all hon. Members and all interested parties are encouraged to respond to Network Rail’s consultation before 17 February next year.

My right hon. Friend has done the House a great service in bringing these matters before it. The Government are wholly committed to the railways and to rail investment. We published our investment strategy for roads yesterday. That, and our approach to rail, is indicative of a breadth of thinking and a long-term approach in respect of a transport strategy that is, I think it is fair to say, unprecedented in its ambition. It is right that we should think in those terms, because infrastructure and investment only serve economic purpose—they feed the common good—by adding to individual and communal well-being. To that end, my right hon. Friend made an important contribution—

[Lilian Greenwood]

Will the Minister give way?

[Mr Hayes]

As I am on well-being, I am delighted to give way.

[Lilian Greenwood]

I am interested in the Minister’s comments about the need for long-term vision and certainty. There has been a remarkable lack of long-term vision on the issue of fares. When his Government were elected, they were talking about raising fares by the RPI plus 3%, and we had announcements taking it down to RPI plus 1%, then to RPI. I am sure that is incredibly welcome for the hard-pressed commuter, but it does not give any certainty either to operators or to passengers. His scrapping “flex” for 2015 is welcome, but why is not there a long-term commitment to scrap “flex” altogether, to take the pressure off people who have had 20% fare rises in just four years?

[Mr Hayes]

Again, Chesterton said that how you behave when you lose determines how long it will be before you win. The hon. Lady’s thinking about fares may herald her party’s eventually winning: it will not be for many decades, but it will happen. It is absolutely right that she presses me on this issue and, because I am the Rail Minister for today, I make this commitment: fares will not go up by more than inflation. I will also commit to something else, which will cause some excitement in her constituency, which I know well, and feel that I owe it this obligation. We are committed to electrifying the midland main line between London and Sheffield via Nottingham. She knows the difference that will make, as someone who, like me, travels regularly on that line.

What a great debate this has been. It has provided an opportunity for hon. and right hon. Members to advance the interests of their constituents in the context of that bigger vision of the significance of rail. This debate has shown that the party divides in this place are small compared with our shared commitment to do our best by the people we represent.

15:55

Sitting suspended.

Textile Manufacturing

Tuesday 2nd December 2014 Westminster Hall

15:59

[Mr David Ward (Bradford East) (LD)]

It is very good to be here before you today, Mr Streeter. I am not his personal assistant, but I feel I should offer the apologies of the hon. Member for Huddersfield (Mr Sheerman), who most people know would want to be here today. Unfortunately, he cannot be here. He sent his apologies to me, which I felt I should pass on.

Allegedly, Mark Twain once said something along the lines of rumours of his death being greatly exaggerated. Based on my experiences over a long period of time—it has certainly been my experience as an MP for the past four years—I can strongly confirm that rumours of the textile industry’s demise are greatly exaggerated. Not only that, but the industry is alive and thriving. Coming from Bradford, I have seen the high quality of the manufacturing work taking place across the whole of the West Riding.

That might seem an odd point to begin on, but it is important for me to say it, because even many of those living in Bradford, where so many good things are going on, have a false belief that textile manufacturing in Bradford and the West Riding is a thing of the past. It is true that 11,000-odd workers no longer pour out of Manningham mill, also known as Lister’s mill, or Salts mill. The huge volume of production that once made Bradford the wool capital of the world might have gone, but scouring, carding, dyeing, spinning, weaving and finishing still take place to the highest standards. From Huddersfield to Keighley and across to Pudsey and Shipley, companies are not only still producing yarn and cloth, but doing so with great success. Such firms as Abraham Moon—if one is mentioned, Hainsworth and Laxtons and everyone else has to be mentioned—are producing for Dolce & Gabbana, Paul Smith and Burberry and doing exceptionally well in growth markets across the world, in Japan, Europe and America.

It is of course not just about wool, much as I would love to spend all day talking about it. I forgot to put my Campaign for Wool badge on, but it is in my bag. Reshoring or onshoring is beginning to happen on a large scale, as “Made in Britain” once more becomes a sign of real value and a badge of quality. That is good news. UK retailers such as John Lewis and Marks & Spencer with its “Best of British” range have been falling over each other to announce plans to bring back production on an ever increasing scale. Volume manufacturing will never return to its previous scale—the cut, the make and the trim will always be cheaper in the far east or Turkey—but there does seem to be a successful future at the premium end of production, where short lead times reduce the risks of markdowns for retailers. According to the manufacturing advisory service, one in six UK manufacturers have brought back some production from overseas in the last 12 months, and that process continues apace.

A further consideration is the ethical and sustainable dimension of much overseas production. We all know about the Dhaka factory collapse, which should have sent a sharp reminder to many UK retailers about the full cost—not just the financial cost—of some overseas sources of production.

[Philip Davies (Shipley) (Con)]

I commend the hon. Gentleman on bringing this debate to the House today. He and I have both purchased the Yorkshire suit. Does he agree that if anyone wants to support textile manufacturing in Yorkshire, one of the best things they can do is buy a Yorkshire suit, the brainchild of Mr Yorkshire himself, Keith Madeley? It uses material from Yorkshire, is manufactured in Yorkshire and is of the highest possible quality.

[Mr Ward]

I hope that that intervention results in a significant discount for the hon. Gentleman on the cloth. I should find out what he paid. The fabric is available in lengths of cloth for women, if they should want to make up a suit. We are all selling here tonight.

It is all good news for the industry, but that creates significant challenges, particularly in the availability of skilled labour. A high proportion of the sector’s skilled work force is nearing retirement age. I have been to Haworth Scouring, which deals with 100 tonnes of tops a week—large-scale work is still going on. A gentleman was working in the sorting area and, were the business to lose him, it would lose one of the only sources of that skill across the whole area. That is how near we are to losing precious skills. On that same visit, it was good to see a young apprentice learning the trade from scratch and helping to provide the much needed next generation of skilled people who are required for the industry’s continued success.

[Stuart Andrew (Pudsey) (Con)]

I too congratulate my hon. Friend on securing the debate. He mentioned Abraham Moon, which is in my constituency. It has just spent £3 million on expansion, but it needs a skilled work force to meet demand. Does he agree that we need to put greater emphasis on apprenticeships, so that such mills can succeed?

[Mr Ward]

Absolutely. With another hat on, as a member of the Education Committee, we are exercised by the problems of careers advice and ensuring that there are real careers for people, not only in textile manufacturing, but in manufacturing and in business. We need to ensure that fantastic jobs are available. Many parents will not even know that they exist, and one important part of the debate is making more people aware of them.

[Jim Shannon (Strangford) (DUP)]

I wish I was able to say that in my area we have had a massive increase in the number of jobs available, but the reverse is true; we have lost 15 or 16 factories over a number of years. Even now, however, we still have people with the skills to be involved in the factories and to take the opportunities. Does the hon. Gentleman feel that with the opportunities available in Yorkshire—in Bradford and elsewhere—direct contacts should be made with the Minister of Enterprise, Trade and Investment in Northern Ireland to ensure that job transfers can take place and that those skills are retained?

[Mr Ward]

Absolutely. One of the big difficulties that the industry faces is that it is not pharmaceuticals, the automotive industry or aerospace, where big companies can provide supply chains in local areas, which feed the skills back through to the big companies. In textiles, it is a lot of small businesses. Even the big mills exist without long supply chains, which would provide skilled jobs that offer that continuity. It is a serious issue, but do not despair. Many of the things I am saying on the potential for reshoring and bringing back production from abroad apply to other constituencies.

[Jason McCartney (Colne Valley) (Con)]

I congratulate my hon. Friend on securing this important debate and on his work with the all-party group on textile manufacturing. As he knows, there are 62 textile firms in Huddersfield, employing thousands of people. We are proud that the green jacket worn at Augusta by the winner of the Masters golf tournament is made in Huddersfield. Soft furnishings in the White House are made in Huddersfield. The crimson upholstery on Boris’s new Routemaster buses is made in Huddersfield. Talking about skills, the company that produced that fabric, Camira Fabrics, is working with the Entice Project to employ new apprentices. Does my hon. Friend agree that that is the way to get the new skilled work force moving up? Will he join me in congratulating—I am proud of this—the 4,200 new apprentices in my constituency since 2010?

[Mr Ward]

This is all excellent news, but how many people really know about it? It is a good news story of which more and more people need to be made aware. There are particular implications for energising parents to go out and find something other than the traditional route for their children and to discover the other options that are available. It has the potential to inspire young people into a manufacturing career.

As John Miln of the highly successful UK Fashion & Textile Association said:

“Volume manufacturing may never come back but there is significant interest in what we do make and whether we are able to grow it”.

The hon. Member for Strangford (Jim Shannon) referred to growing it everywhere. That is the big challenge we face. In addition to all that I have said about traditional textile manufacturing, the global technical textiles industry is growing at four times the rate of home and apparel textiles and now includes medical textiles, geotextiles, agrotextiles, protective clothing, textiles for the automotive and aerospace industries, construction textiles and many others.

Returning to John Miln’s comment, the big questions are how we get the sector to grow and what future it has. All that I have said so far is really good news and many miles away from the era of closure after closure, but at this time of great opportunity what strategic support are the Government giving to textile manufacturing? Back in 1998, after representations from clothing trade associations and unions, John Battle, a Minister at the then Department of Trade and Industry, encouraged the formation of the textile and clothing strategy group to consider in detail the issues and challenges facing the sector. It was recognised that the industry made a major contribution to the UK economy and that a strategic approach was necessary if it was to improve its competitive position. A report called “A National Strategy for the UK Textile and Clothing Industry” was produced and, as its name suggests, it provided the basis for a collaborative plan for the future development of the industry.

The purpose of today’s debate is to ask the Minister whether a similar plan exists today. I am aware of many worthwhile initiatives, and he may refer to the textile growth programme, about which I certainly know far more than I did an hour ago, after speaking to the project director, Lorna Fitzsimons. She told me about some of the fantastic investments that are being made through the programme, but I am interested in finding out whether there is a national strategic plan that underpins such initiatives and where the sector fits in with the Government’s overall industrial strategy.

[Andrew Stephenson (Pendle) (Con)]

I concur with what my hon. Friend says and congratulate him on securing the debate. I agree that the sector needs a strategic vision, but will he reaffirm his welcoming of the Government’s textile growth programme? It has so far engaged with 68 companies in Lancashire, eight of which are based in Pendle and two of which have benefited from £200,000 in grants and are now on target to create 104 jobs. I agree with what he says about the strategic vision, but the textile growth programme is delivering for many companies across the north of England.

[Mr Ward]

Absolutely. I hope to meet the programme’s project director next Tuesday in my constituency, but I already know the extent of the programme’s success from previous conversations.

However, a programme or initiative in itself does not amount to a national strategy, which is the point that I am trying to make today. Textile manufacturing is not a priority sector. There is no longer a textile team within the Department for Business, Innovation and Skills. The manufacturing advisory service and UK Trade & Investment are working together as part of the “Reshore UK” initiative, which is considering how to bring production back to this country, but the initiative is not specifically for the textile industry. Again, where does that fit in with the overall strategy? I am concerned because the industry is fragmented, which has been a weakness over the years.

[Gordon Birtwistle (Burnley) (LD)]

I congratulate my hon. Friend on securing this debate. Does he agree that we need support for the textile industry’s supply chain? Burnley is home to a company called boohoo.com, which is one of the biggest online fashion retailers in the country and perhaps Europe. Its problem is that it buys 70% of its products in the UK and yet the supply chain is not supported by the Government in any way. The aerospace and automotive supply chains receive Government support. Does my hon. Friend agree that to help the textile supply chain would create hundreds of jobs and stop a lot of this country’s imports?

[Mr Ward]

That is exactly the point. I congratulate my hon. Friend on the work that he does as the apprenticeship tsar. As has already been indicated, apprenticeships have developed fantastically over the past few years, but they need continuous pushing so that parents, children and young people see them as a viable alternative to the traditional academic route—although apprenticeships do of course contain academic provision.

I am concerned by the fragmented nature of the industry. I worry that it may be overlooked as other manufacturing sectors such as aerospace, pharmaceuticals and the auto industry dominate Government thinking. If that were the case, it would be a shame and it would be wrong. It would be good to hear today that the value of clothing and textile manufacturing in its widest forms—I mentioned technical textiles—is understood by the Minister. Beyond that, it would be good to know that the sector features in the Government’s long-term plans for the growth and development of the UK’s manufacturing base.

May I conclude by referring to the new all-party parliamentary group textile manufacturing that was formed last year? We already have the successful all-party fashions and textile group, and the aim is not to duplicate its work but to provide a clearer focus and concentration on UK textile manufacturing. It is still early days for the new group, but we are looking at our work programme, in which the textile growth programme will certainly feature. We will report back on that in the new year when the all-party fashions and textile group’s major report is finished. I hope the Minister will take an interest in and see the importance of the new all-party group and that he may find the time to visit us to discuss Government support for textile manufacturing in this country.

16:09

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

I pay tribute to the hon. Member for Bradford East (Mr Ward) not only for securing this important debate, but for his chairing of the all-party group or textile manufacturing, which he worked so hard to set up as a champion for the sector. I also pay tribute to other hon. Members and hon. Friends for their contributions.

The manufacturing of textiles at scale has a long and proud history in the UK that goes right through the industrial revolution and the industrial development of Lancashire, Yorkshire, the east midlands and elsewhere. Today, it plays a leading role even in my constituency in Suffolk, where Gurteen, a company set up in the 1700s and still run by the same family, continues to thrive making high-quality clothing mostly from wool. I pay tribute to the firm and its work in the industry. Over time, much of the UK’s production moved overseas, and the numbers involved in manufacturing fell. It is true that an impact was felt from the switch to lower-cost countries. Nevertheless, in 2013 the textile manufacturing industry contributed £2.4 billion gross value added in the UK, and 60,000 jobs.

The hon. Member for Bradford East asked what our strategy was. We are clear that the textiles growth programme, which several hon. Members mentioned, is a crucial part of the overall strategy. He asked what our goal was. Our goal is to support the textiles industry to grow and expand here in the UK and, in particular, to support companies that are thriving through supplying high-end, niche products. He mentioned especially the technical textiles sector, which is growing fast internationally and in which the UK is at the cutting edge of research. We can benefit from that so that we are also at the cutting edge of some of the production.

On the specific question of an overall strategy, of course the textiles growth programme is an important part of it. We have been clear—I have been very clear—that where an industrial strategy is required and demanded for a sector, we should work with the sector to develop one. If that means that we need to expand what is already available, I look forward to working with hon. Members to achieve that.

The textiles growth fund has invested millions to support the development of textiles capability and to capitalise on the reshoring mentioned by the hon. Gentleman. Reshore UK, which is our overall scheme through UKTI to support the reshoring of jobs back into the UK, is gathering pace. It provides support for companies that are reshoring jobs in all sectors. That is best done on a cross-economy basis, because many companies that sent production overseas now want to bring it back, often so that they can have shorter supply chains, with shorter distances, and maintain a tighter grip on quality than is possible when exporting jobs. They face many of the same issues in lots of sectors, whether textiles, high-value manufacturing or other areas.

The overall target of the textiles growth fund is to create or safeguard a further 1,000 jobs and to leverage in private sector investment on a ratio of 3:1. By the end of October more than 60 grant applications had been funded, with total project value in excess of £25 million. The projects are expected to fulfil the jobs goal and to create at least 70 apprenticeships, demonstrating the money behind the Government’s clear objective of supporting UK textiles manufacturing, in particular high-quality manufacturing.

The hon. Gentleman mentioned the skills shortage, which is an important issue. In Bradford, including his constituency, unemployment has fallen by 27% over the past year, according to the claimant count; in Huddersfield, it is down by 29%. Those are good figures, but with a tightening labour market, we are getting increased reports of skills shortages. The broader reforms to strengthen and improve education in the UK are an important part of the answer, but not an immediate one, because it takes time for children who are benefiting from an improved education to come through, so the importance of on-the-job training and apprenticeships cannot be overestimated.

On skills, however, we are improving our support to ensure that it is more focused on what employers need. Employer-led trailblazers are paving the way by writing new standards for apprenticeships, including in the textiles industry where standards are being developed in fashion and design to ensure that we capture the high-end market, although not in the manufacturing of textiles, which might be an area that we wish to address. As with industrial strategy as a whole, the invitation is open to sectors to approach and work in partnership with the Government to develop the apprenticeship standards required.

[Jim Shannon]

As I asked in my intervention on the hon. Member for Bradford East (Mr Ward), is the Minister aware of the skills that we have available in Northern Ireland since the closure of many factories? Will he agree to contact the responsible Minister in Northern Ireland, Arlene Foster, the Minister of Enterprise, Trade and Investment, to see whether some of those skills could be transferred from Northern Ireland to that area where there are vacancies at the moment?

[Matthew Hancock]

Yes, I work regularly with the Northern Ireland Executive, including Arlene Foster, on such issues. We should take up the question of the transfer of skills. Northern Ireland’s apprenticeship reforms are similar to our own, and we share the thinking about the need to ensure that the skills taught are the ones that companies need. The same direction of travel is being taken in Northern Ireland, so I will take that point away with me.

The employer ownership pilots are about putting funding for skills training directly in the hands of employers. The Huddersfield and District Textile Training Company has a multimillion-pound project that includes a textile centre of excellence to help to improve skills and, again, to ensure that we in the UK are adding to high-value manufacturing in textiles and in other areas, because we recognise that that is where we can add value and create the highly paid jobs that we want to see.

In addition, through the local response fund, two textiles projects have been approved in Manchester. For example, the north-west’s NWTextnet was awarded £75,000 for dynamic portfolio management to achieve integration of new product development with reshoring manufacturing capacity. Again, that is trying to drive up the skills in textiles production into the high-end, high-spec skills, which is where we see the UK market.

We therefore have a clear strategy. If further work needs to be done, I am up for that, and the Government are clear that we want to work with the sector to ensure that we get the benefits at the high end, where the UK can add the most value. We need to deliver on the skills and the supply chains; we need to put the support in place where it is appropriate to spend taxpayers’ money, which is usually best defined as where the companies are themselves willing to participate side by side with us, so that we can support the textiles industry, much as we are doing in many other industrial sectors. We need to ensure, as the hon. Member for Bradford East said, that “Made in Britain” is a highly esteemed badge of high quality. We need to build the small and medium-sized businesses in the textiles sector so that we can bring them together.

It is no surprise that of the brands that the hon. Gentleman mentioned, where UK textiles in fashion play an important part, he included the top-end brands that are among the most demanded and most expensive, because that is where the UK can add value, reshore jobs and ensure that such jobs are high quality. If we can turn that from a summary of what is happening on the ground into a strategy for how to make textiles strong in the UK—how to make an optimistic future—in Bradford, Huddersfield and throughout Yorkshire, Lancashire and the east midlands—the traditional heartlands of the UK textiles industry—and indeed in Northern Ireland, we will take an historic and proud industry and ensure that it continues to generate jobs and prosperity in the UK for many years to come.

Anti-freeze Products (Protection of Animals)

Tuesday 2nd December 2014 Westminster Hall

16:29

[Mr Mark Spencer (Sherwood) (Con)]

When MPs stand up to speak, it is traditional for them to say that they are delighted to give a particular speech, but I can honestly say that on this occasion I am not delighted to be here. I would rather not be discussing this issue at all.

We have had a traumatic summer in Sherwood. Calverton, a village in my constituency in Nottinghamshire, has to our knowledge suffered the loss of at least 22 cats due to poisoning with anti-freeze. Most of those losses were in the month of August, and people tend not to use anti- freeze in the middle of a heat wave; it is something they consider using at this time of year, when their car could become frozen. However, anyone malicious who wants to cause harm to animals—wildlife or cats—can use anti-freeze intentionally to cause an enormous amount of devastation. The product can also cause that devastation accidentally.

I am grateful for the support of Nottinghamshire police and the Royal Society for the Prevention of Cruelty to Animals in trying to catch the perceived perpetrator of those poisonings. At this moment in time we are no closer to catching an individual who may be acting maliciously in that way, but we are working hard to educate the public in and around Nottinghamshire and to make sure that people are on the lookout for anybody doing something suspicious or inappropriate.

I will outline the issue. Anti-freeze contains a product called ethylene glycol. It tastes quite sweet to small animals, and to mammals in particular, but it is extremely toxic when consumed even in small doses. Once EG has been consumed it is difficult to prevent the animal from dying because it is so toxic. It forms very small crystals in the kidneys, leading rapidly to kidney failure, then death. The moments between consumption and death are very traumatic for the animal, and owners of pets—cats or dogs—see unpleasant symptoms, such as vomiting, diarrhoea and extreme stomach cramps. Indeed, it is one of the worst ways in which a pet can lose its life. The trauma that that causes families and individuals, particularly families with small children who have become attached to the family pet, cannot be overstated.

We might think that such poisoning is a rare occurrence and that Calverton’s loss of 22 cats is a one-off—some individual in the village is causing trouble, but it does not happen anywhere else. Well, to my surprise that is not true. After putting our issue on social media and in the local press, I was inundated on Facebook and Twitter with messages from people all over the country who are experiencing similar issues and are concerned that their pets have been injured in that way. Cats Protection told me that it has been monitoring the media since November 2012 and is aware of 1,197 reports of such poisoning elsewhere in the country. That equates to 50 deaths a month, or more than a cat and a half—if we could have a cat and a half—a day suffering that terrible trauma. That sends a simple message to us as a Government: we have to do something to help and to try to prevent that from happening.

A lot of the debate on forums and on social media is about a product called Bitrex, which makes products such as anti-freeze very bitter and unpalatable. Bitrex makes anti-freeze so unpalatable that one very small taste or sniff would prevent an animal—and we are not just talking about cats and dogs; it could be hedgehogs or other small mammals in our countryside—from consuming it at all. If someone was malicious enough to try to mix such a product with chicken or tuna, the bitter taste would remain in the anti-freeze and, we hope, would prevent a pet from consuming it.

I ask the Minister and his Department for four specific things. First, will he explore the mandatory inclusion of Bitrex in anti-freeze for purchase in the UK? It is possible to buy anti-freeze and other products that already contain Bitrex, and some reputable retailers sell only those anti-freeze products that contain it. However, other retailers sell the quality products but also a cheaper version, at 50p less per bottle, next to them on the shelf. We should look seriously at making manufacturers include Bitrex in all anti-freeze products available in the UK.

I also urge the Minister to talk to his colleagues in the Department for Business, Innovation and Skills who can ask the manufacturers of such products—anti-freeze screenwash and also anti-freeze for radiators—to look at manufacturing alternatives that do not contain ethylene glycol. There are products out there available for purchase that do the same job but do not contain that toxic chemical. Of course, they are more expensive, which can mean retailers are not over-enthusiastic about stocking them, but that price is worth paying if we can prevent animals from suffering in the way that they currently do.

Thirdly, we should encourage better labelling on bottles, so that members of the public are aware of how toxic anti-freeze can be to small mammals. If someone is draining their radiator, or it springs a leak, and it is filled with an anti-freeze product, they should be informed about how toxic the product is to animals. I have been told by professionals that if a cat were to walk through a spillage of neat anti-freeze, get it on its paws, then go home and lick its paws clean, that would unfortunately be enough to lead to its death. Fourthly, and just as importantly, we should educate the general public so that we are all aware of the issue.

I do not intend to detain hon. Members much longer. The message is very simple: this is an enormous problem that leads to a great deal of trauma, not only for the animal but for those people who lose their pet in this way. I implore the Minister to encourage his Department to look at the issue seriously. I pay tribute to Blue Cross for Pets, Cats Protection and the RSPCA for their support on this issue. I am sure that this will not be the last occasion on which the Minister hears about the topic but I hope that in the near future we will be able to save pet cats, dogs and small mammals from suffering this most traumatic of deaths.

16:38

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

I congratulate my hon. Friend the Member for Sherwood (Mr Spencer) on raising awareness of the problems that can arise from the misuse of anti-freeze products, especially at this time of year. As he said, he takes no joy in having to come to this Chamber to raise the issue. I completely understand that the death by poisoning of such a large number of cats in Calverton has caused immense stress to the families involved. Every one of those 22 cats would have been a loved family pet. The situation is made all the worse by knowing that, as he pointed out, death by poisoning by this particular product is quite painful—that will have caused a great deal of stress to the families concerned.

I understand that the RSPCA is investigating the case and that a meeting was held recently with police and villagers to discuss the issue. The cause and circumstances, as my hon. Friend pointed out, are not clear at this stage, but the high number of deaths in one village during the summer suggests something more sinister than a simple accident.

It is important to recognise that deliberate poisoning is an offence under the Animal Welfare Act 2006 and is punishable by a fine of up to £20,000 and/or six months’ imprisonment. I do not know why anyone would want to poison cats deliberately by using anti-freeze, but there have been such instances in the recent past and they have been dealt with using the full force of the law. For example, in July a man was convicted of using anti-freeze to poison five cats and was fined £1,600. In April, another man received a 12-week suspended prison sentence for poisoning a cat with anti-freeze. As my hon. Friend said, it is too early to know whether the poisoning in Calverton was intentional or accidental.

[Kerry McCarthy (Bristol East) (Lab)]

Constituents have come to me when their cats have been the victims of anti-freeze poisoning, and I have met representatives of groups such as International Cat Care. I have also met Marc Abraham, the television vet who ran the successful Pup Aid campaign. They all say that this is a problem and that many cats that die of this poisoning are not identified as such.

I have tabled written questions about this issue. The Government say that the fact that alternatives are on the market that would not kill cats and that there is a focus on better labelling is enough to stop people from accidentally poisoning cats. However, as the Minister just said, some people are poisoning cats deliberately and those things will not stop them.

[George Eustice]

The hon. Lady makes a good point and I will come back to it. Ultimately, if anti-freeze included a bittering agent and if that deterred animals from taking anti-freeze in any circumstances, that still would not deal with the problem of people deliberately setting out to poison cats and other animals. They would simply find a different weapon of choice. We must recognise that and be very clear first and foremost that when deliberate poisoning takes place, that is a clear breach of the Animal Welfare Act 2006 and we should prosecute accordingly.

[Mr Spencer]

I am pleased to hear of the £20,000 fine and the six months’ imprisonment, although I am not sure that they are high enough. There are products on the market to deter cats; some squirt jets of water or emit a sound wave that distracts cats. There is no excuse in any way, shape or form for causing an animal harm when there are products that move them on or send them to a different property.

[George Eustice]

I could not agree more. The deliberate poisoning of cats is indefensible. It is a crime and should be punished as such.

It is too early to tell whether the poisoning was intentional in the case in my hon. Friend’s constituency. To avoid accidental poisoning, it is vital that people are careful when handling and storing poisonous products, particularly around children and animals. They should be especially careful when pouring poisonous liquids, which can spill easily. As my hon. Friend said, it does not take much anti-freeze to get on the paws of a cat and become hazardous. Anyone using products labelled as hazardous or poisonous should read the manufacturer’s instructions before using them and take note of the warning labels.

Anti-freeze and windscreen de-icer are a necessary part of our everyday lives, particularly at this time of year, but people must take great care when handling and disposing of them. Poisonous liquids that have spilt on the ground may seem innocuous, but animals, whether domestic or wild, may find them attractive, or at least be curious to try them.

A third phenomenon that I have been made aware of and which has the potential to cause poisoning—my hon. Friend did not touch on this—is that some people may be using anti-freeze in their garden water features to stop them freezing up in winter. There are reports of that and internet chat forums discussing whether that is sensible. It could result in animals, whether pets or wildlife, being inadvertently poisoned. We do not know for sure whether that is a cause of poisoning, but it could be; that caused me some concern when investigating the matter ahead of the debate.

Anyone in doubt about whether a household product is particularly toxic to animals should consult their vet or ask the RSPCA or groups such as Cats Protection. Many organisations provide helpful advice on their websites about animals and anti-freeze, and that is to be applauded. Their role in raising public awareness is important.

In common with most chemical products supplied for domestic use, anti-freeze is covered by the Chemicals (Hazard Information and Packaging for Supply) Regulations 2009—the CHIP regulations. They are being replaced from the beginning of January 2015 by the EU classification, labelling and packaging of substances and mixtures regulation. The CHIP and CLP regulations require suppliers of dangerous chemicals and products containing those chemicals to give information about the potential hazards to their customers. That is usually provided on the packaging.

Ethylene glycol, which is the chemical causing the problem, is the main ingredient of most anti-freeze. Manufacturers must label the product as a health hazard, which means placing the exclamation mark pictogram, which is replacing the current black “X” on an orange background, on the label. They must also include the following risk and safety phrases: “Harmful if swallowed” and “Keep out of the reach of children”. The regulations are enforced by local authority trading standards and are the responsibility of the Health and Safety Executive, an agency of the Department for Work and Pensions. The product is clearly labelled “Harmful if swallowed” so there is no excuse for people who use it inappropriately. They should take great care in how they handle it.

The classification of ethylene glycol, and hence the legally required hazard warning, is determined by its toxicity to humans, so it would not be appropriate to impose a stricter warning. However, the regulations allow manufacturers of anti-freeze to add supplementary information on the label as long as it does not contradict the legally required phrases and is placed separately from them. It would be possible for the labels on anti-freeze to warn about the particular risk to pets, for example, and to make it clear that it would not be right to use it in garden water features. That might be a step forward. Many domestic products for use around the home can be harmful to animals and measures to control them must be proportionate and targeted.

My hon. Friend called for manufacturers to be required to add bittering agents, such as Bitrex, but some people who have followed the debate closely have asked whether that would be effective. Cats Protection, which he cited, wrote to the Government earlier this year pointing out that although some people have called for the addition of a bittering agent to anti-freeze, research in the United States has cast doubt on whether it would be entirely effective and suggested that it would not necessarily deter children from ingesting it.

Cats Protection also said that the same research had shown that ingestion of ethylene glycol by dogs and rats tended to be influenced more by a motivational state, such as hunger, rather than by its sweetness. Adding a bittering agent is not necessarily a solution in itself, but it is an interesting suggestion and my hon. Friend is absolutely right to highlight it.

I would encourage manufacturers to consider the case for adding bittering agents on a voluntary basis. I am aware that at least one high-street retailer—Halfords—already includes Bitrex in all its branded products. However, I understand that adding ingredients could cause problems related to, for example, the effectiveness of the product and it may have some impacts on the vehicle. The debate is not straightforward, but I would nevertheless encourage manufacturers to consider what my hon. Friend has said today.

Finally, to come back to a point made earlier, we have to bear in mind that if the case that my hon. Friend mentioned involved deliberate poisoning, no amount of bittering agents or caution by people using anti-freeze would get away from that fact. If that happened in the Calverton case, it is very important that we have a rigorous investigation and that the perpetrators are brought to justice.

We have had an interesting discussion. I will draw this debate to the attention of my noble Friend Lord de Mauley, who is the portfolio holder for these issues, because my hon. Friend has raised some important points and made some very interesting suggestions.

Question put and agreed to.

16:50

Sitting adjourned.

Written Statements

Tuesday 2nd December 2014 Written Statements

Tuesday 2 December 2014

Cabinet Committees List

Tuesday 2nd December 2014 Written Statements

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

Today I am publishing an updated Cabinet Committees list. I have placed a copy of the new list in the Libraries of both Houses.

National Infrastructure Plan

Tuesday 2nd December 2014 Written Statements

[The Chief Secretary to the Treasury (Danny Alexander)]

The Government’s commitment to infrastructure is a crucial part of our long-term economic plan. High quality infrastructure boosts productivity and competitiveness, and can unlock economic potential across the UK.

The national infrastructure plan 2014 sets out an ambitious infrastructure vision for the next Parliament and beyond, reinforcing the Government’s commitment to investing in infrastructure and improving its quality and performance. It also summarises the substantial progress that has been made during this Parliament, including the completion of over 2500 different infrastructure projects or schemes.

The national infrastructure plan is underpinned by the infrastructure pipeline, which is a forward-looking, bottom-up assessment of planned public and private infrastructure investment in the UK. The refreshed infrastructure pipeline sets out over £460 billion of planned public and private investment to the end of the decade and beyond across the key infrastructure sectors.

The new announcements contained in the national infrastructure plan are as follows:

Flood defences

The Government have published their six-year programme of investment in flood defences, allocating the £2.3 billion capital funding provided at the 2013 spending round.

Interconnectors

The Government will ensure that interconnectors can participate in the 2015 capacity auction, estimating the eligible capacity of each interconnector on a case-by-case basis.

Swansea tidal lagoon

The Government will start closer discussions with Tidal Lagoon (Swansea Bay) plc to establish whether a tidal lagoon at Swansea Bay is affordable and value for money for consumers.

UK Guarantee scheme: Moorside

HM Treasury have reached a co-operation agreement with Toshiba, GDF Suez and NuGen with the aim of issuing a statement of intent to provide a guarantee to assist the financing of a new nuclear power plant at Moorside, subject to due diligence and ministerial approval.

Broadband connection vouchers

Connection vouchers—the Government will provide up to £40 million to extend the SME connection voucher scheme to March 2016 and to more cities. Vouchers will be available on a first come, first served basis.



700MHz spectrum change of use

Further details of the clearance process for high-value spectrum will be set out in 2015 ahead of a further auction of mobile broadband spectrum, subject to the development of delivery options by DCMS and Ofcom.

Northstowe

The Government will take forward development at Northstowe, to support accelerated delivery of up to 10,000 homes, and evaluate the feasibility and economic impact of using this model at a wider scale to support and accelerate housing supply.

Barking Riverside

The Government will agree a principal heads of terms agreement for a loan of £55 million to support the extension of the Gospel Oak to Barking line to Barking Riverside, to unlock the delivery of up to 11,000 new homes.

Brent Cross

The Government support the London borough of Barnet and GLA plans for the regeneration of Brent Cross which could deliver 7,500 homes, subject to a full business case.

Ebbsfleet

The Government are making the first £100 million available to fund infrastructure and land remediation at Ebbsfleet, taking forward their commitment to build the first new garden city for almost 100 years, which will deliver up to 15,000 new homes. Improvements to the A2 Bean and Ebbsfleet junctions will be delivered as part of the Highways Agency programme. The Government will also undertake a review of transport provision for the Ebbsfleet area, including Crossrail, High Speed 1, Southern and Southeastern rail services.

Queen Elizabeth Olympic Park redevelopment (Olympicopolis)

The Government will invest £141 million to support the London legacy development corporation and Mayor of London’s plans to build a new higher education and cultural quarter at the Queen Elizabeth Olympic Park.

Roads investment strategy

The Government are committing £15 billion between 2015-16 and 2020-21 to continue the transformation of the strategic road network, including major projects for the A303, A1, A47 and A27.

Crossrail 2

The Government will provide £2 million between 2014-15 and 2015-16 to support the development of a comprehensive business case produced jointly by the Department for Transport and Transport for London, to complete ahead of the next spending review. This will be combined with a full options appraisal of all potential major transport projects in London, including an extension of the Bakerloo line to improve connectivity in south-east London, and the devolution of South Eastern rail services to London.

Ultra-low emission vehicle research and development

The Government are announcing up to £50 million between 2017-18 and 2019- 20, to support innovation in manufacturing of ultra-low emission vehicles in the UK, based on a Government contribution of £25 million for which they will seek match-funding from industry.

Support for ultra-low emission vehicles

The roads investment strategy sets aside £15 million between 2015-16 and 2020-21 for a national network of chargepoints for ultra-low emission vehicles on the strategic road network. The Government are also announcing further detail of three funds totalling £85 million to support ultra-low emission taxis, buses and cities.

The Government will provide an additional £10 million between 2017-18 and 2019-20 to increase ultra-low emission vehicles in London, in support of the ambition to introduce an ultra-low emission zone by 2025.

Local highways maintenance grant

The Government have already announced that local highways maintenance funding will be increased, totalling £5.8 billion over the next six years, and can now announce how the formula grant will be broken down by region.

Clean vehicle technology fund

The Government will provide up to £4 million to extend the clean vehicle technology fund in 2014-15 which funds road vehicle modification by local authorities in order to reduce air pollution.

Chesterton rail station

As announced by the Prime Minister and Deputy Prime Minister the Government will provide £44 million between 2014-15 and 2016-17 to build a new rail station at Chesterton, linked to Cambridge science park.

Cycle city ambition grants

As announced by the Deputy Prime Minister on 27 November, the Government will provide £114 million between 2015-16 and 2017-18 to enable the continuation of the cycle city ambition scheme in the eight cities it already covers. This will provide capital funding for better cycle infrastructure such as segregated lanes and improved junctions.

Access for all

The Government will increase the funding for the access for all scheme by £60 million between 2015-16 and 2018-19, improving platform access at around 20 stations.

Norwich in ninety.

The Government support the key recommendations of the Great Eastern main line taskforce, including upgraded infrastructure and the latest rolling stock. Bidders for the next Anglia franchise, which will start in Oct 2016, will be incentivised to submit plans for achieving these recommendations for services to Norwich in 90 minutes and associated benefits along the Great Eastern main line.

East West Rail

The Government will consider the outputs of the Network Rail study into the East West Rail central section—Bedford to Cambridge—as part of the planning for control period 6 (2019-24).

Dawlish rail services

The Government will support Network Rail in its work to improve the resilience of the railway at Dawlish. Additionally, it will ask Network Rail to examine wider issues surrounding connectivity to and within the south-west peninsula. Specifically, Network Rail will consider alternatives to the current mainline route to the south-west via Dawlish, including an alternative route via the north side of Dartmoor through Okehampton. This work will feed into Network Rail’s initial industry plan for control period 6 (2019-24).

Bath city centre congestion relief

The Government welcome the strategy put forward by Bath and North East Somerset council and the West of England LEP to improve transport capacity east of Bath and reduce city centre congestion. The Government will consider a business case, which will be developed by Bath and North East Somerset council that assesses the viability of proposals including a park and ride, as well as a park and rail service, located to the east of Bath.

National transport policy

The Government plan to lay the national networks national policy statement before Parliament this month for consideration and a formal vote

Planning

The Government will publish proposals for compulsory purchase reforms for consultation at Budget 2015 to make processes clearer, faster and fairer, with the aim of bringing forward more brownfield land for development.

The Government will take forward measures to ensure that the principle of development need only be established once.

The Government will take steps to speed up section 106 negotiations, to reduce delays to the planning process.

The Government will keep speed of major decisions under review, with minimum performance thresholds increasing to 50% of major decisions made on time as performance improves.

The Government are also announcing today a number of additional housing and planning measures:

Bicester

The Government will support a new garden town at Bicester to provide up to 13,000 new homes subject to value for money.

Public sector land: housing delivery

The Government will set ambitious targets for the release of public sector land between 2015 and 2020. Government are committed to releasing land with capacity for up to 150,000 homes.

Affordable housing

The Government will extend affordable housing capital investment to 2018-19 and 2019-20, to ensure that 275,000 new affordable homes can be delivered over the next Parliament.

Shared ownership

The Government will work with housing associations, lenders and the regulator to identify and lift barriers to extending shared ownership, including a consultation on options for streamlining the process for selling on shared ownership properties.

Housing associations

The Government will consult on ways to increase the borrowing capacity of housing associations in relation to the valuation of properties transferred from local authorities.

Estates regeneration

Budget 14 announced a £150 million fund to kick start the regeneration of social housing estates through repayable loans. Following a bidding round, Grahame Park, Blackwall Reach, Aylesbury Estate and New Union Wharf regeneration projects have all now been approved for funding, subject to due diligence and contract negotiations.

Planning: small applications

The Government will publish new data on local authorities’ performance in meeting their statutory duty to process smaller planning applications within eight weeks.



Planning: small sites

The Government will work with industry and local authorities to test whether more can be done to support the approval of small sites in the planning system.

Copies of the national infrastructure plan 2014 will be available on the gov.uk website and have been deposited in the Libraries of both Houses.

Patent Boxes

Tuesday 2nd December 2014 Written Statements

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

As part of the base erosion and profit shifting (BEPS) project that this Government helped to initiate and have championed, the OECD has been considering preferential intellectual property regimes which include the UK’s Patent Box. Work by the OECD has focused on agreeing new rules on the level of substantial activities required for a preferential regime to be considered a tax relief that supports real economic activity and not to be considered “harmful”.

The OECD proposed a number of methods to determine substantial activity. While the UK and three other countries supported the “transfer pricing” method, a significant majority of OECD-G20 members supported the alternative modified nexus method. The UK expressed concerns about the modified nexus approach but in the interests of reaching agreement on this important issue, agreed to work with Germany to try to find a compromise position.

On 11 November 2014, the UK and Germany duly published a joint statement which outlined a compromise proposal to be put to the OECD-G2Q members at the forum on harmful tax practices (FHTP) and to EU member states at the code of conduct group. This compromise proposal adopts the main features of the modified nexus approach, but amends these in order to take account of previously expressed UK concerns.

The compromise proposal was presented to the FHTP at its meeting from 17 to 19 November, and to the code of conduct group on 20 November. The proposal was welcomed and will now form the basis of continuing work by the FHTP to determine how the approach will work in practice. As part of the agreement, countries with existing IP regimes must agree to close these to new entrants by 30 June 2016 and will abolish them by 30 June 2021, after which all countries will be required to operate only nexus-compliant regimes. The legislative process to introduce changes to existing IP regimes so that continuing IP regimes conform to the re-modified nexus approach will also begin in 2015. In line with the normal tax policy-making process, the Government intend to consult on these changes, once the FHTP has completed work on the detail of the new rules.

The changes that the Government have secured to the original approach proposed by the OECD will protect the interests of the UK as an excellent location for technology based businesses by retaining a competitive Patent Box regime, which will now align benefits more closely to research and development activity carried out in the UK. As such, the Government are confident that the new regime will continue to incentivise innovation and its commercialisation in the UK.

Education, Youth, Culture and Sport Council

Tuesday 2nd December 2014 Written Statements

[The Minister of State, Department for Culture, Media and Sport (Mr Edward Vaizey)]

A meeting of the Education, Youth, Culture and Sport Council was held in Brussels on 25 November. I represented the UK for the cultural and audiovisual section of the Council and Shan Morgan, the UK’s deputy permanent representative, represented the UK for the sport section of the Council.

Culture and audiovisual

The Council was invited to adopt Council conclusions relating to European audiovisual policy in the digital era. The UK supported the adoption of these Council conclusions.

The Council then invited Culture Ministers to state their positions on the contested wording in the draft conclusions on the EU work plan for culture (2015-18), which related to equal VAT treatment of e-books and physical books.

I noted that tax issues were the sole responsibility of ECOFIN, and successfully pushed back against the contested wording. The final text represented a good outcome for the UK, and was met with broad agreement by all delegations. The presidency also reached an agreement on actions for culture in the EU’s external relations.

Having concluded the work plan, the presidency invited Culture Ministers to discuss the contribution of the cultural and creative sectors to the objectives of the Europe 2020 strategy. While the majority supported culture being included in the Europe 2020 strategy, many delegations also warned that by doing so culture would be reduced to no more than a statistic.

The UK agreed that while culture did have a contribution to make to the goals of the strategy, it was not substantial enough to merit its inclusion in the strategy itself, which should remain focused on key contributors to jobs and economic growth. Others argued that by incorporating culture into the strategy, the EU would be able to ensure that culture was mainstreamed throughout all policy areas. Some delegations highlighted that by including culture in the Europe 2020 strategy, European funding that culture was not currently eligible for would become available.

Sport

The Council was invited to adopt Council conclusions relating to sport as a driver for innovation and growth. The UK supported the adoption of these Council conclusions.

Delegates were invited to discuss sport and physical activity at school age. Although some member states had experienced a decline in sport participation and others an increase, there was general agreement among all delegations that participation in sport offered many benefits and skills to young people, and that people that had participated in sport at a young age achieved better academic results and were more employable than young people who had not.

One of the key challenges identified during the discussion was how to motivate young people to opt for sport rather than computer games or other sedentary activities in their free time. The UK stated that major sporting events help to motivate young people to get involved in sport, as witnessed in the UK after London hosted the Olympic games in 2012. All member states stressed that another main challenge Governments faced was ensuring that sport on offer was inclusive. Several delegations cited data that showed girls were most likely to drop out of sports clubs early on or not participate in sport at all.

Other business

The Commission provided a brief update on the state of play of the transatlantic trade and investment partnership negotiations.

The incoming Latvian presidency gave a summary on its priorities, which would include cultural heritage, innovative architecture and the results of the mid-term review of the Europe 2020 strategy.

There was a report from the latest meeting of the World Anti-Doping Agency and a presentation on the Council of Europe’s convention against the manipulation of sports competitions.

Finally, the incoming Latvian presidency set out its priorities in the field of sport, which would primarily focus on the role of sport in fostering skills and competences.

Qualifications and Curriculum Reform

Tuesday 2nd December 2014 Written Statements

[The Secretary of State for Education (Nicky Morgan)]

On 30 September 2014, I launched a statutory one-month consultation seeking representations on the draft legislative order—the Education (National Curriculum) (Attainment Targets and Programmes of Study) (England) (No. 3) Order 2014 and associated regulations—required to bring the new national curriculum programme of study for science at key stage 4 into effect.

I am today publishing the final programme of study which is set out in the revised national curriculum framework document. The new programme of study will be taught in schools alongside the new science GCSEs from September 2016. It is important to consider the new programme of study in tandem with the GCSE subject content, published in April 2014, and to ensure that the curriculum and qualifications are fully coherent.

The programme of study in science at key stage 4 sets expectations that match those in the highest performing jurisdictions, and the content is closely aligned to GCSE combined science content. It focuses on the big ideas in science such as evolution and inheritance, the atomic structure and energy and forces and includes new content on developing areas such as the human genome. The working scientifically section emphasises the importance of practical work including experimental skills, analysis and evaluation of data and the understanding and nature of scientific evidence. It makes clear that working scientifically should be embedded within the subject content across all three science disciplines.

The publication of the key stage 4 science programme of study completes the review of the national curriculum. We have achieved our aim of ensuring that the new national curriculum provides a rigorous basis for teaching, and a benchmark for all schools to improve their performance. It represents a clear step forward for schools, ensuring that all children have the opportunity to acquire a core of essential knowledge in key subjects. The majority of the new national curriculum came into force from September 2014. The new national curriculum for English, mathematics and science for years 2 and 6 will come into force from September 2015; the new curriculum for English and mathematics for key stage 4 will be phased in from September 2015 and that for key stage 4 science from September 2016, alongside first teaching of the new GCSEs for these subjects.

A copy of the revised national curriculum framework document has been placed in the Library of the House.

EU Transport Council

Tuesday 2nd December 2014 Written Statements

[The Parliamentary Under-Secretary of State for Transport (Mr Robert Goodwill)]

I will attend the last Transport Council under the Italian presidency (the presidency) taking place in Brussels on Wednesday 3 December.

The first item on the agenda will be a public debate on the draft Council conclusions on transport infrastructure and the Trans European Network. The UK has worked constructively with like-minded member states to help the Italian presidency develop these conclusions which seek to align transport with the EU 2020 strategy by recognising the value that investment in building and operating transport infrastructure and creating efficient networks can bring to growth and jobs. The UK will support the adoption of the conclusions as drafted.

Secondly, the Council will be asked to agree in principle a proposed Council decision authorising member states to sign the international convention on standards of training, certification and watch-keeping for fishing vessel personnel, of the International Maritime Organisation. This is a procedural decision giving member states permission to accede to the convention. It is necessary due to union competence over the mutual recognition of the qualifications of fishing vessel personnel by virtue of directive 2005/36/EC (which provides for mutual recognition across a range of professions). Some aspects of the decision as originally proposed were unacceptable to the UK, for example the use of inappropriate legal bases and a general lack of clarity over the scope of relevant competence. Through negotiation the UK has secured significant improvements to the decision and the UK is now content with the text to be agreed at Transport Council.

The presidency will aim for a general approach on the proposal for a regulation of the European Parliament and of the Council on the implementation of the Single European Sky. The UK has been working hard with the Italian presidency and other member states to secure our objectives on this regulation. As a result I am pleased to say that we secured redrafting which has resolved the vast majority of concerns we had on this proposal. In terms of Gibraltar, our firm position is that it is part of the EU and must remain in the scope of EU aviation legislation such as SES. I expect further discussions to take place on this issue during the Council meeting.

Next on the agenda is a proposal for a regulation of the European Parliament and of the Council amending Regulation (EC) 216/2008 in the field of aerodromes, air traffic management and air navigation facilities. This proposal is part of a package with the Single European Sky (SES II+) regulation and transfers some SES provisions into the European Aviation Safety Authority system in order to simplify and clarify the regulation framework for the safety of air traffic management. As such we were very supportive and had just a few concerns which we have been able to resolve. We are therefore ready to support this proposal.

After this will be a progress report on the proposal to amend directive 2012/34 establishing a single European railway area, as regards the opening of the market for domestic passenger transport services by rail and the governance of the railway infrastructure, and the related proposal to amend Regulation (EC) No 1370/2007 concerning the opening of the market for domestic passenger transport services by rail. The Government support the presidency on their progress report, which is a very thorough summary of discussions to date. The suggestions for future options form an excellent foundation and mean that an agreement on the market pillar is now within reach of future presidencies. It is important that the remaining barriers to the single market in rail services are addressed.

There will then be a general approach on the proposal to repeal Regulation 1192/69 on common rules for the normalisation of the accounts of railway undertakings. The UK supports the repeal of this regulation which has become outdated and inconsistent with more recent EU railway legislation. It is a welcome example of legislative simplification and deregulation.

Under any other business, the Commission will provide information on EU satellite navigation programmes. The presidency will provide information on the recent European Aviation Safety Authority event on remotely piloted aircraft systems. The Lithuanian delegation will provide information on the road transport situation in the context of detailed inspections of Lithuanian vehicles recently introduced by Russian authorities. Also, the Latvian delegation will provide information on the work programme of their forthcoming presidency of the Council of the European Union.

House of Lords

Tuesday 2nd December 2014 Lords Chamber

Tuesday, 2 December 2014.

14:30

Prayers—read by the Lord Bishop of Peterborough.

Afghanistan: Interpreters

Tuesday 2nd December 2014 Lords Chamber

Question

14:37

Asked by

[Baroness Coussins]

To ask Her Majesty’s Government how many Afghan interpreters have applied for relocation to the United Kingdom; and by when their applications will be decided and relocation completed.

[The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever) (Con)]

My Lords, first, I express my condolences for the deaths of the Afghan interpreter and the British G4S employee who were killed in Kabul last Thursday. Around 600 locally employed staff, mostly interpreters, are eligible for relocation under the ex gratia redundancy scheme. Approximately 390 have chosen the relocation option. It is not possible to give a definite timescale for the relocation process due to the variable duration of medical checks, Afghan document verification, UK screening, visa processing and placement with a local authority. Nevertheless, in the past four months we have brought back 36 LESs and 19 immediate family to the UK.

[Baroness Coussins (CB)]

My Lords, I pay tribute to all the Afghan interpreters who have provided our Armed Forces with a vital service at great personal risk. The numbers quoted by the Minister are encouraging but the pace of the paperwork seems alarmingly slow. Can the Government not find urgent extra resources so that all eligible LECs can relocate before the last of the troops withdraw? Secondly, will the Minister comment on the plight of the large number of interpreters who do not qualify for the ex gratia scheme but who have appealed for help under the intimidation policy? Can the terms of this policy be more generous, bearing in mind that some of the interpreters could continue working as much needed linguists in the UK?

[Lord Astor of Hever]

My Lords, we recognise the huge debt that we owe to our Afghan employees, and we are working with the Home Office and the Afghan authorities to avoid any unreasonable delays in relocation. We take intimidation very seriously and trained police investigate claims. We provide security advice and relocation in-country—or, in extremis, back to the United Kingdom. We are aware of no staff killed or seriously injured on duty. We very much welcome the noble Baroness’s ideas on interpreter opportunities and we are working closely with the Home Office to try to take this forward.

[Lord Rosser (Lab)]

My Lords, we, too, extend our condolences after the deaths of the Afghan interpreter and the British security guard in an incident that is a stark reminder of the dangers that those in Afghanistan still face. How do the Government now keep track of the continuing safety or otherwise of those Afghans who were interpreters with our Armed Forces? It is surely only with this information available that a realistic assessment can be made of whether an application to move to this country under the intimidation policy should be agreed. Who in Afghanistan is now responsible for what the Minister, in responding to an Oral Question from the noble Baroness, Lady Coussins, last December, described as the,

“very thorough anti-intimidation policy which applies to all staff employed since 2001”?—[Official Report, 10/12/13; col. 713.]

[Lord Astor of Hever]

My Lords, on continuing safety, we have an enduring commitment to ensure the safety of our Afghan staff. Anyone who feels in any danger will contact our staff. On who is responsible, it is the same team in Kabul which was previously responsible for delivering our intimidation policy.

[Lord Trefgarne (Con)]

My Lords—

[Lord Ashdown of Norton-sub-Hamdon (LD)]

My Lords, I am grateful to the noble Lord for giving way. Does my noble friend the Minister realise that when it comes to honouring the debt that we owe to these brave men, there is widespread disquiet that the Government’s policy, particularly in relation to those on the intimidation scheme, is discreditable and even Kafkaesque? Is it not true that few if any of those on the intimidation scheme have received a visit to their home or community to assess risk because it is too risky to do so? If our current staff cannot even visit them in their own community because it is too dangerous, is it not too dangerous for them to live there?

[Lord Astor of Hever]

My Lords, I am very happy to discuss this issue with my noble friend outside the House, but I can assure him that we take intimidation very seriously. There is an in-theatre panel of very senior military and civilian personnel who consider every case on its merits. We have returned one locally engaged member of staff to the United Kingdom under the intimidation policy. We have relocated seven in-country, and many others have been assisted with security advice; for instance, changing the route.

[Lord West of Spithead (Lab)]

My Lords, I am afraid that the Government have been a complete shambles on this issue. They seem to have moved forward very slowly; they have been dragged into doing things. Now I believe that they are actually beginning to do things, but we are not telling the world that we are doing them. Does the Minister not agree that it is important that we make sure that our men and women around the world are supported by locally employed personnel? They will not do that unless they can see that they are going to be looked after.

[Lord Astor of Hever]

My Lords, I think that we have got a good news story here. We have engaged with media outlets and briefed individuals on the progress of our two LES schemes. Our focus remains the swift implementation of the generous offers under the ex gratia scheme and the thorough investigation of claims of and effective support for locally engaged staff who believe that their safety is threatened.

[Lord Trefgarne]

My Lords, what support will be provided to these people when they come to the United Kingdom?

[Lord Astor of Hever]

My Lords, we take care to welcome staff and their families and ease their arrival and integration into this country. Before they leave, we give staff an information pack on living in the UK and offer a question-and-answer session. On arrival, local authorities provide them with support for the first four months. They help them settle into their new neighbourhood and access the benefits and services to which they are entitled, including schools and healthcare.

[Lord Reid of Cardowan (Lab)]

My Lords, I thank the Minister for what he has said today and for keeping informed those of us who take an interest in this by communicating from the MoD. Obviously I pay my condolences to our late Afghan colleague and the G4S employee. I suggest to the Minister that this process will not be speeded up if he leaves it to the Home Office. Has he thought of volunteering assistance from the Ministry of Defence to the hard-working people in the Home Office to expedite what everyone in this House knows is an essential prerequisite, not only as a debt of honour but, as my noble friend and colleague said, to assure British troops that they will get local support in the future?

[Lord Astor of Hever]

My Lords, I agree with the noble Lord that we have a debt of honour. I can assure him that we have formal fortnightly meetings with the Home Office and we are in daily telephone contact. In Afghanistan, LESs are helped with applications by a member of the MoD staff, Edmund, who was formerly my assistant private secretary. He reassures them about the progress on their cases and liaises with the relevant authorities in the UK and Afghanistan to ensure that there are no unreasonable delays.

Kuwait: Bidoon

Tuesday 2nd December 2014 Lords Chamber

Question

14:45

Asked by

[Lord Avebury]

To ask Her Majesty’s Government what representations they have made to the Government of Kuwait about granting citizenship to the stateless Bidoon who are resident in that country.

[The Minister of State, Foreign and Commonwealth Office (Baroness Anelay of St Johns) (Con)]

My Lords, the British embassy in Kuwait is in regular contact with the Kuwaiti Government to lobby on this important issue. The UK recognises that the situation of the Bidoon in Kuwait causes real human rights problems. We encourage the Kuwaiti Government to implement swiftly their plan to naturalise those individuals eligible for Kuwaiti nationality and regularise the situation for the remainder.

[Lord Avebury (LD)]

My Lords, I know that my noble friend is well aware of the fact that Kuwaiti Bidoon children are born stateless and go through the whole of their lives without access to education, health and public services of all kinds. Over the many years that the Government have been making representations on the subject, their representations have fallen on deaf ears. Will my noble friend, bearing in mind the close relationship between the royal families of our two countries and the recent world public appeal of the UNHCR to reduce statelessness, consider making a high-level appeal to the emir himself to grant citizenship to those 120,000 stateless people, and procure that the EU High Representative for Foreign Affairs follows our example?

[Baroness Anelay of St Johns]

My Lords, I would not seek to invite the Royal Family to take particular actions, but I am sure that everything that the noble Lord says in this Chamber has due regard paid to it in these matters. He is right to refer to the UNHCR. The UK is a signatory to the UN Convention on the Reduction of Statelessness, but Kuwait is not. We encourage all countries to sign the convention.

I should remind my noble friend, and therefore the House, that the 105,000 estimated Bidoon who seek nationality are not all in the same category. Of those, about 34,000 were in Kuwait before independence in 1961 but did not register for citizenship. The remaining number have come to Kuwait after that date from other countries. Some of them went there to work; some were illegal immigrants. Therefore, their position is very different from those who, with their descendants, seek full citizenship.

[Lord Hylton (CB)]

Can the Minister give us some idea of what she described as the remainder, those who will not qualify for naturalisation? Their plight is surely the most serious.

[Baroness Anelay of St Johns]

My Lords, the estimate is that there are 105,000 Bidoon people—or people who claim to be Bidoon, as I should more accurately reflect the position—of whom 34,000 can be identified as being either those who were in Kuwait prior to June 1961 or descendants of those families, so there is some evidential link. Therefore, a substantial number of people would like to obtain citizenship. The Kuwaiti Government have created a system whereby the position is being reviewed for all those people, and those who qualify for full citizenship will do so. The remainder may be considered to have a regularised position, which means that they will be linked to the countries from which they came, if they have an evidential link, and could have a residential status in Kuwait, just not full citizenship.

[Baroness Falkner of Margravine (LD)]

My Lords, my noble friend will be aware that the Kuwaiti Government have offered to the 105,000 stateless Bidoons that they might emigrate to the Comoro Islands. They have particularly said that those who are found to have broken the law will be relocated compulsorily to the Comoro Islands, which sounds rather as if the Comoros are being treated as a penal colony. Have the Government had any conversations with the Comoros Government as to what their view is of Kuwait’s intention? Moreover, for the others that she identified as having evidential links to other GCC countries, what discussions are there with the GCC countries to facilitate their removal back to those countries, if there are those links?

[Baroness Anelay of St Johns]

My Lords, the situation in regards to the Comoro Islands is that there have been reports in the media that a senior official in the Kuwaiti Ministry of Interior recently stated that the Kuwaiti Government would start helping the Bidoon to register for what was described as economic citizenship of the Comoro Islands. That is a media report and we do not, as a Government, have further detail of any formal proposals. I am aware that the Comoros Government have previously provided passports to stateless residents from elsewhere in the UAE. However, with regard to those persons in Kuwait who claim to be Bidoon but who are not those who can claim full citizenship and go through that process, it is for that remainder to negotiate with Kuwait how Kuwait determines their link to other countries. This Government do not get involved in that situation.

[The Earl of Sandwich (CB)]

My Lords, is it not the case that the Kuwaiti Government made a positive move in 2011 towards bringing the health and education benefits of Bidoon people on a level with those of Kuwaiti citizens? Could the Government not encourage that move, because the Kuwaiti Government are not following through with it?

[Baroness Anelay of St Johns]

My Lords, in fact there were two steps taken, very appropriately, by the Kuwaiti Government. The first was to set up a mechanism by which adjudication can be made as to which category those claiming citizenship may fall into. That process is going ahead—it was established in 2010 and has a five-year life to run—and we, as others, are clearly getting impatient and making representations. With regard to education, we have had reports from NGOs and individuals that access to education has been made difficult, but the Kuwaiti Government say that that is not the case.

Wales: Fracking

Tuesday 2nd December 2014 Lords Chamber

Question

14:52

Asked by

[Lord Wigley]

To ask Her Majesty’s Government what representations they have received from the Welsh Government concerning the control and management of fracking for gas in Wales.

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma) (Con)]

My Lords, the Government have been in regular contact with the Welsh Government on the subject of shale gas and have had a number of official representations. The UK Government welcome the Welsh Affairs Committee’s report, Energy Generation in Wales: Shale Gas, which was received in June. Both Governments engaged throughout the process of that committee by submitting oral and written evidence. We welcome the conclusion from the committee that it is vital that the UK identifies new sources of gas to safeguard the UK’s security of supply. The UK Government are clear that developing shale gas and oil will not come at the cost of public health or the environment.

[Lord Wigley (PC)]

My Lords, in view of the recommendations of the Smith commission report that responsibility for the licensing of onshore gas development in Scotland should be transferred to the Scottish Parliament, and in view of the commitment given by the Prime Minister on 19 September that Wales would not miss out with regards to any such development in Scotland, can the Minister give an assurance that consideration will now be given to transferring to the National Assembly for Wales and to the Welsh Government responsibility for fracking in Wales?

[Baroness Verma]

My Lords, as I made quite clear in my opening remarks in reply to the noble Lord’s Question, the Government are in close communication with the Welsh Government on these issues.

[Lord Anderson of Swansea (Lab)]

My Lords, all the parties in Wales have come to an agreement that we will move to the reserved powers model in Wales. What relevance will that have for fracking? Given the trouble that the Government have had with the Supreme Court on a number of cases, including the recent agricultural one, will she give an assurance that the Government will act in the spirit of that and avoid the problems that they have had with the Supreme Court in the interim?

[Baroness Verma]

My Lords, I shall not comment on specific cases, but we have been very clear that the issue around hydraulic fracturing must take into account a number of issues—one, of course, is community engagement. As I said in my opening remarks, the Government are very closely involved in discussions with the Welsh Government on these matters.

[Lord Teverson (LD)]

My Lords, does my noble friend agree that the United Kingdom as a whole has an exemplary record in regard to hydrocarbons and environmental management both offshore and onshore? Does she also agree that when it comes to issues such as wastewater and particularly the integrity of wells, not just during exploration and production but afterwards when those wells are left, improved and clearer environmental regulations need to be enforced strongly through inspection?

[Baroness Verma]

My noble friend raises some very important points, and of course we have taken very seriously the issues around wastewater. As my noble friend rightly points out, after exploration has taken place, any wastewater will be stored in closed metal tanks before being treated in accordance with strict environmental regulation, which is used extensively across many industrial processes. During the drilling process, the Health and Safety Executive will scrutinise well design and the drilling companies themselves must appoint independent well examiners so that well testing may be routinely be checked.

[Lord Elystan-Morgan (CB)]

My Lords, on a basic constitutional issue, is the granting of drilling licences or eventual planning permission already devolved to the Welsh Government? If that is not so then, in line with the remarks of my noble friend Lord Wigley, it should be done immediately. Is it not the case that on 19 September the Prime Minister put it rather more elegantly than my noble friend when he said that the Welsh people must be at the very heart of devolution?

[Baroness Verma]

My Lords, the noble Lord raises some important points. Noise and traffic are covered in existing guidance in Minerals Planning Policy Wales. There is already quite a lot of engagement at local level. As I said in opening, we are working closely with the Welsh Assembly on these matters.

[Lord Howarth of Newport (Lab)]

My Lords, in the new spirit of promiscuous devolution of tax-raising powers, will the Welsh Government have complete freedom to levy what taxes they will on fracking in Wales, as well as to keep the proceeds and spend them as they will?

[Baroness Verma]

My Lords, businesses engaging in fracking will be working very closely with communities and are putting forward very attractive community benefits packages. As for tax-raising powers, I think that that is slightly above my pay grade.

[Viscount Ridley (Con)]

My Lords, does my noble friend agree that in all this discussion of the drawbacks of fracking we should also draw the attention of the devolved Administration and of others to the enormous benefits of affordable energy as provided by shale gas in various other parts of the world?

[Baroness Verma]

My noble friend is absolutely right. Of course, we will not know what the potential is until we do further exploration. I imagine that all those who want to see greater economic growth and job growth will welcome any matters that allow that to happen.

[Lord Berkeley (Lab)]

My Lords, in between the attractive packages that these applicants may offer the community, can the Minister assure the House that whoever issues the licences—in fact, we do not yet know—will have to do a full and comprehensive environmental impact assessment first, monitor methane in groundwater and keep the monitoring going for at least 12 months after production has started?

[Baroness Verma]

My Lords, I think that many of these issues were raised during consideration of the Infrastructure Bill, and many of the commitments that the noble Lord was asking for were agreed to. I think that he should be reassured that monitoring and reporting of the processes will be there and available, because the companies know that to generate confidence they have to be open and transparent.

[Baroness Worthington (Lab)]

My Lords, will the Minister please acknowledge that during the debate on the Infrastructure Bill we put forward a comprehensive plan of measures to improve the environmental regulation. We do not wish to stop fracking but we want to see that it is done, wherever it is done, in an environmentally safe way. The Government have put forward regulations but not a single one relates to changes in the environmental regulatory regime. Can she explain why that is?

[Baroness Verma]

My Lords, this country has a proud reputation of being one of the most robust regulators in the world.

[Lord Greaves (LD)]

My Lords, there are currently two planning applications for fracking with Lancashire County Council. Can the Minister tell us whether the Government have made any representations to Lancashire County Council on those applications?

[Baroness Verma]

My Lords, I shall write to the noble Lord.

EU: Research Budget

Tuesday 2nd December 2014 Lords Chamber

Question

15:00

Asked by

[Baroness O’Cathain]

To ask Her Majesty’s Government, in the light of the creation of the European Commission’s New Deal, what steps they will take to protect the European Union research budget.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Neville-Rolfe) (Con)]

My Lords, European Commission President Juncker made a statement about the investment plan last week. We are seeking to clarify details of the proposal, including any implications for the EU research budget, which is so important to the United Kingdom.

[Baroness O’Cathain (Con)]

The new deal will provide €315 billion in an attempt to improve the economy of some nation states that are still in economic slump. It is reported that the current €81 billion research and innovation budget is going to be, as the Daily Telegraph says, “gutted” and included within the new deal. I ask Her Majesty’s Government what will happen to the projects that have already been started, plans that are already made and teams that have already been drawn up to use part of the €81 billion for the research and innovation budget. The UK benefits hugely from that money. I just wonder what will happen to the academic staff and the scientists if that is completely gone.

[Baroness Neville-Rolfe]

My Lords, my noble friend is right. Horizon 2020 has been indentified as a possible source of €2.7 billion financing for the investment plan. Further detail is required from the Commission. However, it is proposing that the plan will make existing funding for research go further through leveraging private sector financing, which could deliver better value for money. However, of course the noble Baroness is right to express concern. We will be keeping an eye on the detail and the existing research teams to which she refers.

[Lord Soley (Lab)]

My Lords, I really do not understand the Government’s approach to this. There ought to be support for the process. There ought to be recognition that if we are to have growth in the UK, we also need growth in Europe. Therefore, we should be taking a lead in conjunction with the European Union on this. We cannot and will not sustain high levels of growth in the UK unless we also get it in Europe.

[Baroness Neville-Rolfe]

My Lords, the Government agree that it is important to have an investment plan of this kind. There is much detail, for example, in the priorities that it sets out, which we would support and which link well to our own national infrastructure plan announced by the Chief Secretary today.

[Lord May of Oxford (CB)]

My Lords, is the Minister aware that, as a preamble to the European Commission’s new deal, it got rid of its excellent chief scientific adviser? She had previously been—and did a very good job as—the chief scientific adviser for Scotland. The Commission did not replace her; it just got rid of her. This action seems to many of us to raise significant worries. In particular, can we really trust the Commission’s new deal to protect the EU science research budget, upon which so much industrial innovation depends?

[Baroness Neville-Rolfe]

My Lords, I pay tribute to the work of Professor Anne Glover, who has been such a force for good in Brussels. I support what the noble Lord has said about the importance of R&D. The Science and Technology Committee in another place has expressed a similar view directly to Brussels. I very much hope that a way can be found in future to ensure that robust scientific advice is at the heart of European policy-making.

[Baroness Ludford (LD)]

My Lords, will the Minister confirm that any EU budget money would be used as loan guarantees, not as cash upfront? It is very important to safeguard the research budget. Besides that, will she confirm that this plan, while welcome, has been compared to the loaves and fishes; that an even more important boost to private investment in Europe would be through the completion of the single market, structural reforms and good regulation; and that, in that effort, the UK can take a lead only by being a positive and engaged member of the European Union?

[Baroness Neville-Rolfe]

My Lords, my noble friend is right to say that this is done mainly through supporting loans. I completely agree with her on the wider point; it is part of our objective that in discussing this plan we should also promote the single market, better regulation, competitiveness and her wider points that are incredibly important to our recovery in Europe, which I am as keen to see as she is. Indeed, I am off to the Competitiveness Council on Thursday to support EU work in this important area.

[Lord Turnberg (Lab)]

My Lords, I reinforce the words of the noble Lord, Lord May, about the chief scientist and the loss of that post. Is any effort being made by the Government to find a replacement?

[Baroness Neville-Rolfe]

My Lords, I have explained that we are concerned. We are in discussions in Europe to see what the right way forward is to find strong, robust scientific advice at the heart of European policy-making.

[Lord Deben (Con)]

Is my noble friend aware that we hear a great deal from the Government about the ways in which the European Union could improve itself but we have not heard a great deal from them about getting this right? I hope she will ensure that the Government are seen as being very pro the European Union’s work in science.

[Baroness Neville-Rolfe]

I can agree with my noble friend that the Government are indeed very pro the European Union’s work in science. It is an area where we do well; the competitive processes that have been set up under the various R&D frameworks, including Horizon 2020, are an approach to funding out of which we do well. We have a good share of research for our brilliant scientists.

[Lord Allen of Kensington (Lab)]

My Lords, the success of UK business is dependent on R&D, as I am sure the Minister will agree, but when do the UK Government intend to set the R&D intensity target for 2020? Is this likely to be supportive of the investment of 3% of GDP, in line with the European Commission, which is likely to be discussed this week?

[Baroness Neville-Rolfe]

My Lords, I will write to the noble Lord as I do not wish to mislead the House on the R&D intensity target. I can say that we are extremely engaged in ensuring that the R&D framework helps the UK and UK scientists, and that we have both value for money and beacons of excellence. That is our approach.

Syrian Refugees: Food Aid

Tuesday 2nd December 2014 Lords Chamber

Private Notice Question

15:08

Asked by

[Lord Beecham]

To ask Her Majesty’s Government what steps they are taking to relieve the suffering of Syrian refugees and the pressure on their host countries, in the light of the suspension of the United Nations food voucher programme for want of funding.

[Lord Beecham (Lab)]

My Lords, I beg leave to ask a Question of which I have given private notice.

[The Parliamentary Under-Secretary of State, Department for International Development (Baroness Northover) (LD)]

My Lords, the UK has committed more than £700 million in response to this catastrophe, of which more than £150 million has gone to the World Food Programme, funding food for refugees in Jordan, Lebanon, Turkey and Iraq and those in need inside Syria. We are in close contact with WFP, our other partners on the ground and other donors to assess what more should be done. The rest of the world needs to play its part both in terms of pledging money but also making good on its promises.

[Lord Beecham]

My Lords, I am sure we are all grateful to the Government for the resources that they have put in. However, 1.7 million refugees from the dreadful events in Syria are now threatened with starvation as a result of lack of funding for the World Food Programme’s support. In addition to the terrible hardship those innocent people face, it is surely unreasonable to expect Jordan, Lebanon and Turkey to assume total responsibility for them when they are already under immense pressure. Will Her Majesty’s Government press other nations in the region, notably the wealthy Gulf states, including Qatar, which is, after all, spending a fortune on preparing for the 2018 World Cup, to do much more to assist? Would it not also be in their own interests to do so rather than allowing ISIS and other extremists to exploit a possible tragedy for their own ends?

[Baroness Northover]

My Lords, the noble Lord is quite right about the fragility of the countries around Syria—not least, of course, Iraq and what is happening there. Just to reassure him slightly, the World Food Programme has fully suspended only in Lebanon, although that is enough of a challenge. As regards the other countries, in Turkey, Iraq and Jordan at the moment it is proposed that vouchers should be reduced, but the full suspension is happening only in Lebanon. The noble Lord is quite right that we need to engage internationally and I can assure him that we have been extremely active in that regard, not least in the Gulf. He will know that the United Kingdom helped to bring forward $1 billion at the various international gatherings that took place last year and this year brought forward $3.3 billion. We now need to make sure that the pledges that were made are delivered.

[Lord Cormack (Con)]

My Lords, the Government do not recognise the Government of Syria—that was perhaps premature. What discussions are we having with the Government of Syria to try to expedite delivery of relief?

[Baroness Northover]

We have to work with the Government of Syria, as my noble friend recognises, to get aid into Syria. There have been all sorts of access problems, which we are constantly working to resolve. He will know how challenging that is because of the variety of different groups in different places, which means that you cannot, for example, have safe corridors. However, that is an ongoing problem on which the United Nations is leading and working extremely hard.

[Baroness Lister of Burtersett (Lab)]

My Lords, last week a group of major charities wrote an open letter to the Prime Minister in the Independent. They welcomed the aid that the British Government are giving to Syria but said that aid is no substitute for accepting a reasonable number of refugees into this country. As I understand it, only 50 to 100 refugees have been resettled through the resettlement programme, which is far fewer than originally envisaged. At the pledging conference in Geneva, will the Government pledge to increase that number in response to that letter?

[Baroness Northover]

Clearly, the situation with refugees right across the region is extremely challenging. However, the United Kingdom’s emphasis is to try to make sure that the situation in Syria and around is alleviated. We are putting a huge amount of support, as the noble Baroness has recognised—I thank her for that—into those countries surrounding Syria. What is needed is to try to bring this incredibly challenging crisis to an end so that people are safe within their own country. We do not underestimate the challenge of that.

[Baroness Falkner of Margravine (LD)]

My Lords, does my noble friend agree that the only comprehensive and long-lasting resolution to this problem of refugees is to bring them back to Syria where they can live their lives in the communities they were in? What discussions have the Government had with the UN special envoy Staffan de Mistura about his attempt at a new plan to bring about those ceasefires?

[Baroness Northover]

I will need to write to my noble friend with the details of that.

[Lord Collins of Highbury (Lab)]

My Lords, the one thing that is clear is that this crisis will not come to an end in a short period. Does the Minister therefore accept that longer-term funding for host government authorities is necessary to ensure that their national infrastructures do not collapse under the weight of the refugees?

[Baroness Northover]

The noble Lord is right that a huge amount of support will need to go to these countries. That is what the United Kingdom is in fact doing, both as regards support within Syria itself but also for those countries around, some of which, as he well knows, were under a lot of pressure before this crisis occurred and are under further pressure. We have to ensure that the situation that developed in Iraq does not develop elsewhere.

[Lord Avebury (LD)]

My Lords, perhaps I may return to the question of the UK’s undertaking to accept a small number of refugees from the region, on which I received a Written Answer this morning. Can the Government not review the commitment to accept 500 refugees over the next five years? Is this not a very small commitment, bearing in mind the vastness of the problem?

[Baroness Northover]

I will certainly refer that to my colleagues.

[Lord Judd (Lab)]

It is reassuring to hear how seriously the Government are looking at the needs of surrounding countries and not only of the refugees themselves—that is a huge challenge—but does the noble Baroness not agree that this is an acute political issue as well? In Jordan, the number of refugees now is very much larger than the Jordanian population itself. The political implications of this in terms of future stability cannot be taken too seriously.

[Baroness Northover]

The noble Lord is absolutely right.

[Lord Foulkes of Cumnock (Lab)]

My Lords, the noble Baroness has not answered adequately the question raised by my noble friend Lady Lister and the noble Lord, Lord Avebury. She has dealt with the question of humanitarian assistance and with the political situation in Syria, which, as my noble friend just said, will last for some time, but she has not dealt with the question of those seeking asylum. As my noble friend Lady Lister said, we have been asked to take substantially more refugees, but we are very reluctant to take them and we are taking far fewer than other European countries. The noble Baroness is answering on behalf of the Government. Will she go back to the Home Office and her other colleagues and say that this House wants more sympathetic consideration for those people from Syria seeking asylum?

[Baroness Northover]

As the noble Lord will know, asylum claims are judged across the board fairly and squarely. As I mentioned in my earlier answer to the noble Baroness, Lady Lister, the United Kingdom is contributing disproportionately in supporting those in the region—way above many of our colleagues in Europe and internationally. I said in my reply to my noble friend Lord Avebury that I would take the comments back to my colleagues.

[The Earl of Sandwich (CB)]

Following the question raised by the noble Baroness, Lady Lister, is the Minister aware—I am sure she is—that there is an existing commitment to the United Nations High Commissioner for Refugees resettlement quota, which I understand is 500 people in the most vulnerable categories?

[Baroness Northover]

Yes, indeed, and we have prioritised women and girls at risk of violence.

[Baroness Hussein-Ece (LD)]

My Lords, my noble friend has explained the situation in terms of supporting the aid programme. However, I have just come back from a conference in Istanbul over the weekend and there was great resentment there about the number of refugees that they are looking after—some 1.5 million at a cost of £5 billion—and that is being compared to the contribution that some other European countries have made. Germany has taken 10,000 refugees and Sweden has taken more, while we have taken only a very few—hundreds. With the Syrian situation deteriorating, it is not getting any better soon. People are looking to some of the richer European countries such as ours to do a little more. I ask my noble friend whether there is any consideration about stepping up and taking more responsibility.

[Baroness Northover]

Again, I remind my noble friend of the huge financial commitment that the United Kingdom Government are making and that we are supporting all the surrounding countries, including Turkey. We have supplied mattresses and other non-food items and shelters for their distribution, as well as food aid within Turkey. I remind her of the huge contribution that the UK is making.

Misuse of Drugs Act 1971 (Amendment) (No. 2) Order 2014

Tuesday 2nd December 2014 Lords Chamber

Motion to Approve

15:19

Moved by

[Lord Ashton of Hyde]

That the draft order laid before the House on 7 November be approved.

Relevant document: 13th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 27 November

Motion agreed.

Electricity and Gas (Energy Companies Obligation) (Amendment) (No. 2) Order 2014

Tuesday 2nd December 2014 Lords Chamber

Electricity and Gas (Energy Company Obligation) Order 2014

Fuel Poverty (England) Regulations 2014

Motions to Approve

15:19

Moved by

[Baroness Verma]

That the draft orders and regulations laid before the House on 22 July, 22 October and 24 October be approved.

Relevant documents: 8th, 10th and 11th Reports from the Joint Committee on Statutory Instruments. 9th and 12th Reports from the Secondary Legislation Scrutiny Committee, considered in Grand Committee on 27 November

Motions agreed.

Nursing and Midwifery (Amendment) Order 2014

Tuesday 2nd December 2014 Lords Chamber

Motion to Approve

15:20

Moved by

[Earl Howe]

That the draft order laid before the House on 13 October be approved.

Relevant document: 9th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 27 November

Motion agreed.

Small Business, Enterprise and Employment Bill

Tuesday 2nd December 2014 Lords Chamber

Second Reading

15:20

Moved by

[Baroness Neville-Rolfe]

That the Bill be read a second time.

[Lord Foulkes of Cumnock (Lab)]

Before we begin the main business of the day, anyone wishing to participate in my QSD on Thursday about the ridiculous practices and procedures in this House will have found a great deal of evidence in our proceedings so far.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Neville-Rolfe) (Con)]

My Lords, I start by saying that I am delighted to see my noble friend Lady Harding of Winscombe and am much looking forward to her maiden speech.

Over 200 years ago, Napoleon said that the British were a nation of shopkeepers. He was nearly right. If he had expanded his vision slightly and said that Britain was a land of small businesses he would have been spot on. Small businesses have always been the lifeblood of our economy—and recently there has been some good news. At the start of 2014, there were a record 5.2 million small businesses in the UK, 7% more than at the start of 2013, representing the largest annual increase in the business population since the business population estimates began in 2000.

The coalition Government have led the way in their support for small business. Among the measures taken are the cut in corporation tax from 28% to 20% by 2015, the doubling of business rate relief for small firms and the doubling of the annual investment allowance. But we recognise that it is not sufficient just to offer help. People also need to be able to discover easily what help is available. We have therefore streamlined the support though the GREAT business website, giving a single point of access for advice. Similarly, we will bring together schemes for small firms into a single service, so they can access a wide range of support in one place, tailored to their needs.

The Bill before the House builds on the Government’s commitment and is designed to make the UK the best place in the world to start and grow a business. I will briefly tackle the content of this long Bill using five broad themes: making life easier for small business; improving the climate for business; improving company transparency to deliver on our 2013 G7 commitments; encouraging better employment practices; and—to pubs—helping beer drinkers and the publicans who serve them.

On my first theme, helping small businesses, one of the most daunting things for a small business is to start trading as a company. The Government propose to make the whole process easier by streamlining the company registration process, and the Bill requires this to be in place by May 2017. Especially since the economic downturn, another key challenge for businesses starting up or trying to grow is securing the finance that they need. The Bill promotes greater competition in the banking sector by opening up the market to alternative finance providers. Some 71% of small businesses approach only one finance provider when seeking finance. The Bill will require the big banks to share information on small businesses that they reject for finance with online platforms, when the small business would like them to do so. This will help them gain access to alternative finance providers.

Nine out of 10 small businesses still use paper cheques. The Bill will provide for electronic imaging via smartphones and other mobile devices, allowing cheques to be deposited remotely, thereby speeding up the process in the banks, in addition to—not, of course, separate from—more traditional methods. This will dramatically reduce clearing times, from up to six days at present to less than two, increasing convenience and providing net benefits of nearly £94 million a year.

Cash flow is particularly crucial for small businesses and is often the difference between success and failure. It is not right that small and medium-sized businesses are, according to figures published by the Experian payment performance index in July, owed nearly £40 billion in late payments. This affects 60% of UK small businesses, with the average small business waiting for over £38,000 in overdue payments. The Bill introduces measures that will give small businesses more information on what payment practices to expect from their customers. These changes will incentivise larger companies to improve their payment policies and practices. Business representative bodies, including the Federation of Small Businesses and the Confederation of British Industry, have welcomed this work.

We should not forget the public procurement market. It is worth £230 billion and is important to small business. Alongside other measures being brought forward through secondary legislation in the new year that will transpose the new European Union procurement directive into UK law, the Bill will further help small businesses to access public procurement opportunities. The measures will extend across the public sector, including local authorities and the NHS, and make an important change for small business.

My second theme is the business climate. This Government’s regulatory reform agenda has been at the heart of making the UK one of the best places in the world to do business. The World Bank’s Doing Business 2015 report ranked us eighth out of 189 economies—an improvement in our performance of two places on the previous year. Within the European Union we are behind only Denmark. We have reduced the annual cost of domestic regulation by over £1.5 billion since January 2011. For new regulations, our “one in, two out” policy seems at last to have led to something of a culture change in Whitehall. I have known and worked in Whitehall for nearly 40 years, in one form or another. The Bill will strengthen small businesses’ confidence in government by introducing a business impact target to be set at the beginning of each Parliament, which the Government will report transparently on. It will be used for the independent scrutiny of economic impact assessments related to this target.

Where regulation is essential, we know the regulators implementing it do not always enforce it properly; 63% of businesses have, at some point, disagreed with a regulator’s decision, but have never appealed. The Bill provides for small business appeals champions to be established in the non-economic regulators—ranging from the Environment Agency and the Health and Safety Executive to bodies such as the DVLA—to improve the handling of complaints and appeals and, most importantly, to ensure that the process works, particularly for small business. For the financial services sector, the existing independent Complaints Commissioner will be required to report annually on the regulator’s complaint-handling procedures.

There are 2.9 million home businesses in the UK and they are of growing importance to the economy, with an increase of 500,000 in their number since 2010. The Bill will amend the Landlord and Tenant Act 1954 to ensure that starting a business from home will not create a business tenancy, thereby encouraging further growth in this thriving sector.

The business community, along with all parents in employment, needs access to good-quality and flexible childcare. The Bill will make it easier for schools and other providers to offer more early education and childcare. The measures will promote a prosperous and growing market to meet the needs of working families.

The UK labour market is also dependent on having a properly skilled workforce to meet its demands. Until now, Governments have not done enough to track a person’s progress through their school life and into the labour market. The Bill will enable the effectiveness of education providers in preparing pupils for employment to be assessed. The additional data we will secure will be invaluable to young people and their parents, and will focus educators on employment outcomes, as well as performance tables.

My third theme is company law. As I have said, the UK is an outstanding place to start and grow a business. However, there is a clear link between illicit financial flows and company structures. Measures in the Bill will therefore help ensure that UK companies are not used to facilitate criminal activity, such as money laundering and tax evasion. The Bill will establish a register of “people with significant control” over each company, increasing transparency around who ultimately owns and controls UK companies. The Bill will abolish bearer shares, directly removing an easy means of facilitating illegal activity. This meets an important G7 commitment. At the same time, we are simplifying the current filing requirements for companies, removing duplication and improving the accuracy and integrity of our public companies register.

Unfortunately, a natural consequence of a competitive market is that sometimes some businesses become insolvent. The Bill makes a number of changes that strengthen and modernise our insolvency regime.

My fourth theme is encouraging better employment practices. Part 11 of the Bill deals with these matters. We should not forget that this Government have secured great achievements in job creation. There are now more than 30 million people in employment, which is a record high. Since 2010, an additional 2.1 million private sector jobs have been created. Within these totals, small businesses employ an estimated 12.1 million people. Therefore, for small businesses to succeed we must ensure that those employed are treated fairly and that businesses playing by the rules are not disadvantaged by those which do not.

The Bill will provide assurances to people who step forward and whistleblow that action will be taken. Last year, a report by the University of Greenwich and Public Concern at Work found that 75% of whistleblowers believe that nothing was done about the wrongdoing they reported. The Bill will require regulators or professional bodies dealing with whistleblowing to publish an annual public report.

The Bill will also improve confidence in the ability of the employment tribunal system to deliver justice by incentivising payment of awards and addressing the current position that there are no significant consequences for non-payment. The Bill will also reduce the delays in the tribunals process caused by frequent postponements, addressing the costs to business that often arise from these delays.

The Government are committed to ensuring that employers are penalised if they fail to pay the national minimum wage to their workers. On 7 March this year we increased the penalty percentage from 50% of total underpayments owed to workers to 100% and the maximum penalty from £5,000 to £20,000. The Bill goes further: it sets the maximum penalty to apply on a per-worker rather than per-notice basis.

Finally on employment, I know that there are strong views in this House on zero-hours contracts. Used correctly, I believe that such contracts support business flexibility and they are often welcomed by those employed on them. Recent research carried out by the Chartered Institute of Personnel and Development suggests workers on zero-hours contracts are more content than their counterparts in permanent employment. However, we want to make sure that these contracts are not abused and we recognise that exclusivity clauses sometimes included in zero-hours contracts are wrong, as they prevent people seeking work elsewhere. This is not in line with free-market or any other type of economics. I am pleased that the Bill addresses the problem by making such clauses invalid.

Finally, I turn to the subject of pubs. In my immediate family there are five adult males and me. That fact has many important consequences, one of which is that the majority view of the family is very much in favour of pubs. The pub industry makes a significant contribution to the UK economy. It is made up of many small businesses run by hard-working people and employs hundreds of thousands of people. While it is an industry which has suffered due to societal change, it contributes substantially to community spirit and cohesion, and it is one that we want to see grow and flourish.

The Bill will address the imbalance in bargaining power between pub-owning companies and their tied tenants to ensure that the latter are treated fairly and are no worse off than they would be if they were free of tie. For the first time, tied tenants will have a statutory code that they can rely on, based on the industry’s own voluntary code. It will be enforced by an independent adjudicator, who will have real sanctions at his or her disposal.

Noble Lords will be aware that this issue has a long history. Over the course of a decade there have been four Select Committee investigations into unfairness in the relationship between pub-owning businesses and their tenants. The Government have received, and continue to receive, a huge amount of correspondence from tenants about problems in their relationship with their pub-owning business. Research by the Campaign for Real Ale appears to show that 57% of tenants tied to large pub companies earn less than £10,000 per year, compared with just 25% of tenants who are free of tie.

Industry self-regulation has brought a number of improvements, and there is evidence that there is much responsible practice in this industry, yet some tied tenants continue to face unfair treatment and hardship. The Government gave self-regulation ample opportunity to succeed but the truth is that it has not delivered.

Noble Lords will know that there was much lively debate on this subject in the other place. Members there voted against the Government to include in the Bill a market rent only option. This provision requires large pub-owning companies to offer their tied tenants the right to go free of tie in certain circumstances. The Government resisted this proposal partly on the basis that it could have unintended consequences for the sector. However, we recognise that a majority of Members in the other place believe strongly that pub-owning companies need the threat of tenants going free of tie before they will offer their tenants a fair tied deal. The elected Chamber has spoken by voting this into the Bill and the Government have listened.

On that basis, I can confirm today that the Government intend to accept in principle the introduction of a market rent only option. Our focus now will be on making this option workable to ensure that tied tenants are no worse off than free-of-tie tenants and to minimise the risks of unintended consequences, such as job losses.

[Lord Snape (Lab)]

I wonder whether the Minister will allow me to intervene. I am sure that the House will recognise how far the Government have moved on this and will welcome that movement. However, can she assure us that any future discussions will involve representatives of the tenants and will not be dominated by the pubcos?

[Baroness Neville-Rolfe]

My Lords, I can assure the noble Lord that we are always discussing these issues and changes with tenants—that is extremely important when you are making changes of any kind—and, indeed, they have helped us to get to the position that we are now in. I thank the noble Lord for raising the point.

As I bring my opening remarks to their conclusion, I would like to take this opportunity to put on the record my thanks to the right honourable Member for West Suffolk and the Member for East Dunbartonshire, both of whom steered this Bill so successfully through the sometimes choppy waters in the other place, ensuring its safe and timely arrival in this House. I know that they will be continuing their keen interest as we move through the stages in this House. This Bill is important because it provides a number of significant benefits for small businesses, and they constitute a vital part of the economic framework of our nation. I commend it to the House and I beg to move.

15:40

[Lord Stevenson of Balmacara (Lab)]

My Lords, I thank the Minister for introducing the Bill this afternoon, and for going through the main issues with which we will be dealing. I am also very grateful to her for facilitating a meeting this week with the Bill team and the Minister who took the Bill through the other place. Collaboration at this level makes for a much better process, as we have found in other Bills and, indeed, with her three immediate predecessors, all of whom have been highly collegiate. Long may this last.

We are all looking forward to the maiden speech of the noble Baroness, Lady Harding of Winscombe, whose career and interests bear so powerfully on this Bill. I am sure that what she says will be of considerable interest to your Lordships’ House. I note from her CV—one researches these matters—that in February 2013 she was named by “Woman’s Hour” as one of the 100 most powerful women in the United Kingdom. It gets better: last year she was named seventh most influential woman in the same list, which was headed by my noble friend Lady Lawrence. Given that we will probably be ploughing through the Committee stages of this Bill in February 2015, one dares wonder what position she will occupy by then.

As I understand it, the Small Business, Enterprise and Employment Bill has two fundamental purposes: one is to help small businesses grow and succeed; and the other is to ensure that the UK continues to be regarded as a trusted and fair place in which to do business. These are aims that we hold in common with the Government. As the Minister said, this is an extensive Bill. She did not quote it, but it is worth noting that it is in 12 parts, has 157 clauses and 11 schedules. According to the Explanatory Notes the Bill contains provisions on a range of policies spanning the responsibilities of BIS as well as HMT, HMRC, UKEF, the Cabinet Office, DCLG, DfE and the Insolvency Service. BIS speaks for the whole of the Government when it chooses to exercise its legislative powers and we must all quake in the face of such incredible forces. That also means that we have to bring forward reserves ourselves, so I am very pleased to be joined on the Front Bench by my noble friends Lord Young of Norwood, Lord Mitchell, Lady Hayter, Lady Jones and Lord Mendelsohn, who will be joining me in dealing with the detailed scrutiny of the Bill.

I was slightly puzzled that in opening the debate the Minister developed a short riff on the ways in which the Government are helping small businesses, including several issues that are not in the Bill, such as creating a single point of contact for small businesses which seek assistance. We on this side have been calling for that for some time and indeed, if we were to be elected next year, we have plans to bring forward a small business administration. Given that this may already have been set up, I am sure that the noble Lord, Lord Leigh of Hurley, who is in his place, will be immediately inquiring whether it has the capacity to deal with the sort of inquiries with which he has been pestering BGF and other firms which purport to help small businesses. I look forward to hearing the results of his latest work in this area.

When this Bill was introduced in the other place, I noted that the Secretary of State said that there were five main topics, but they were not quite the same as the ones the Minister quoted when introducing her take on the Bill. Just for the record, the five main topics that came through in the other place were:

“to make changes to the legislation in a way that benefits both employees and employers to ensure that employees are not disadvantaged by unacceptable practices, be they exclusivity clauses in zero-hours contracts or underpayment of the national minimum wage … to ensure that our companies are trusted and transparent … to help our small businesses get access to the finance they need … to support the Government’s regulatory reform agenda … to introduce measures that strengthen the provisions on corporate transparency”.—[Official Report, Commons, 16/7/14; cols. 906-10.]

These are all sensible objectives, and we will be using the limited time we are being allocated in Committee primarily to scrutinise the draft legislation and, if possible, to improve it.

Our wealth creators—our entrepreneurs and particularly our small businesses—are fundamental to growth in this country and create almost two-thirds of private sector jobs. They are crucial to the success of large firms, but this is, of course, a symbiotic relationship. We on this side of the House are committed to building an environment in which business can flourish, which is why we can support the general purposes and principles of the Bill. But we also think that it can be improved. We believe that the Bill and the Government’s policies more broadly will not resolve the underlying problems which hold back businesses and employment in our economy. Surely, what we really need is a different model of capitalism—one that is more inclusive, more productive, more responsible and much more long term in outlook.

The fact is that our economy is grossly unbalanced by sector and by region. Short-termism is still endemic in business and in government. We still have a dysfunctional finance system and we have a stubborn and increasing trade deficit. The recession continues in many parts of the world, not least with our main trading parties in Europe. China and India may be slowing down, so the outlook is certainly not good. Meanwhile, the use of food banks has soared and many people still struggle. Wages have fallen in real terms and many people cannot get full employment. As a result, training and opportunities are being squeezed. The recovery, although welcome, is slow and patchy. Few people are seeing the benefits that some at the top appear to be harvesting.

Things are not what we would want them to be; nor can they be, as this is a business-as-usual recovery based on a rising housing market, increased personal debt and consumer spending. It is not the export and business investment-led recovery we need, and indeed it is not the recovery that this Government promised. So we look in vain for measures in the Bill that would intensify the pace of reform of the economy to build a better-balanced, sustainable recovery with a wider range of flourishing businesses that pay wages which increase earnings in real terms and that provide jobs of quality and opportunity. As I have indicated, there are many areas of the Bill that we can and will support, but I will not go through them line by line. Instead, I want to pick out three areas where we will be pushing hard for change, and one gap that we would like to see filled.

The first area of concern is the Government’s proposals on late payment of invoices, particularly those of small businesses. According to the Federation of Small Businesses, 51% of the invoices of its members are persistently paid late by large companies. The Bill as currently drafted simply gives the Secretary of State powers to direct companies to publish certain information on their payment practices. Despite the wide extent of this problem, small businesses are often reluctant to report issues of late payment as they rely on the custom of the large businesses they supply for their very existence. We will be seeking to amend the Bill so as to shift the burden away from small businesses going out on a limb to ask for interest payments so that they are paid as a matter of routine.

Secondly, in the employment sections of the Bill, we will try to introduce proper protection for workers on zero-hours contracts and ban the exploitative use of those contracts. Under our plans, workers would receive a fixed-hours contract automatically when they have worked regular hours over a period of time, unless they choose to opt out. We also think that workers should be protected from employers forcing them to be available to work at all hours or cancelling shifts at short notice without compensation. People sometimes go to great expense to turn up at work. They arrange childcare and pay train or bus fares. These things take time to organise and cost serious amounts of money. Therefore, those on zero-hours contracts should be able to seek compensation if, for example, their shift is cancelled at short notice. By ensuring that workers can seek redress, unscrupulous employers would be dissuaded from cancelling work at short notice, which is often the case.

Thirdly, the Minister mentioned pubs. In the Commons, the Government suffered their first defeat on a piece of legislation when a number of Tory and Lib Dem MPs joined the Opposition and voted through a new clause which gives pub tenant licensees the option of going free of tie so that they can buy their beers on the open market whenever they negotiate a new contract. In our view, this is the best way to ensure that large pub companies offer fair terms to their licensees and finally to address the scandal of so many valued community pubs shutting. Our objective in the Lords will be to retain this new clause and to work with the Government to ensure that it does what it is required to do. I am grateful to the Minister for making clear what the Government’s intentions are on this matter and we will work with her to make sure that they come through correctly.

Missing from the Bill at the moment is anything about takeovers—an issue that was trailed by the Secretary of State at Second Reading of the Bill in the Commons but which has yet to appear. We agree with Mr Cable that our economy will benefit if we continue to welcome inward investment and that we should welcome merger and takeover activity as a normal part of market processes. But, unlike him, we think that recent cases like AstraZeneca/Pfizer and Kraft/Cadbury reveal a problem about the enforcement of assurances on jobs and site closures which are often given during merger and takeover negotiations. We think that primary legislation is required here to make these and similar assurances stick, and we will be proposing amendments on this issue, as well as on the question of whether the Secretary of State needs additional powers in regard to the national interest in takeovers and mergers, although there is an argument to say that these are powers that are already available.

This is not a bad Bill and it is certainly better drafted and presented than many others we have seen in your Lordships’ House in recent years. It is a pity that it was not given pre-legislative scrutiny, as that could and would have improved it further. However, it makes some very sensible proposals on late payments, zero-hours contracts, the minimum wage, insolvency and how we can provide more support to parents who use childcare. But this Bill is not going to deliver a more balanced economy, a sustainable economy or even a skills-based economy in which people go to work knowing that they will be able to pay their bills at the end of the working week. It misses out on a whole score of opportunities, and we will hope to improve it considerably before it leaves this House.

15:49

[Lord Stoneham of Droxford (LD)]

My Lords, I join the Minister and the opposition Benches in welcoming the noble Baroness, Lady Harding, with all her industrial and business experience. I am looking forward to her speech. I welcome the Bill with its fourfold objectives: to protect employees from poor employment practice; to ensure that companies are trusted and transparent; to help small businesses gain access to finance, so vital to their growth; and to identify and eliminate ineffective regulation which holds up business growth.

I will look at the employment aspects first. The House should recall that over the past year 693,000 more people are in employment; 244,000 fewer young people are unemployed; and there has been a huge growth in small businesses—330,000 in 2013, with 66,000 employing additional people. This is a phenomenal record and wherever I go in business they talk about how remarkable it is: the fastest growing economy in western Europe, with the highest employment growth rates.

The Opposition have told us, and will tell us in this debate, that it is the wrong type of growth: we are promoting a low-wage economy and not sharing the benefits of recovery. But we know it is the vulnerable who suffer most from unemployment in a recession so the absolute priority has had to be to get employment going again. Although we are in the early stages of recovering from the massive heart attack that hit our economy, we are seeing a huge improvement in outlook, prospects and financial security for people in our communities—much greater than they experienced in the final two years of the Labour Government, and indeed the first two years of the coalition. Recovery takes time to come through and job flexibility has been fundamentally important to that.

We welcome moves to ensure that employers abide by minimum wage regulations, by increasing fines and by naming and shaming companies that fail to do so. We also support the removal of the exclusivity clauses in zero-hours contracts. The Opposition will tell us that we should do more but we should also ask them why they did not do more when the economic prospects were better. They also have to tell us what they would do that would not now stifle employment growth. The Government have given a commitment to raise the minimum wage further but they will do this—rightly so—using the cross-party agreement that we should use the Low Pay Commission so as not to threaten jobs with higher costs, so that the increases that come through from the low pay recommendations are sustainable.

We are right to question zero-hours contracts and their fairness but let us be absolutely clear that, as the economy recovers, zero-hours contracts are not all bad, as some may try to suggest. I know there are some bad examples in the care sector but I raise the example of a British company—which employs my son—easyJet, the UK’s biggest airline, which has grown to 9,000 employees since 1995. I pass over the immigration issue that it was founded by a Greek Cypriot entrepreneur educated at our universities, and I pass over what would happen to that company if we left the EU.

Instead, I go back to 2011, when pilots were coming out of aviation schools with no prospects of jobs and with £75,000 worth of debt round their necks to pay for their training. I was sceptical when my son was offered a zero-hours contract with easyJet, due to the economic uncertainty that he was facing. But easyJet took on several hundred of those pilot trainees to give them enough work to live on. It promised that it would take them on, provide them with a living, give them enough hours, help with their training and, after two years, provided the economic improvement continued, give them a permanent job. It has honoured that promise completely, and, in 2013, young pilots were granted permanent contracts.

A lot of young people are being put on the first step of their careers through zero-hours contracts at a time of great economic uncertainty. We should respect that and recognise that it has great value. Such an opportunity has been a huge relief to the young trainees whom I was talking about in terms of being able to repay their debts and it has given them valuable training. easyJet is going from strength to strength and long may it. There are examples of overly exploitative zero-hours contracts. Those must be exposed, but flexibility is important to recovery and we must not overlook the competitive advantage that we have in our flexible labour markets.

I particularly welcome in the Bill the help given to small businesses. There are a number of major improvements: rooting out late payment, which is a scandal, and encouraging the involvement of small businesses in the procurement of government contracts, which is long overdue.

There is also a commitment in the Bill to greater corporate transparency and openness, so that we know who is controlling companies and where the power lies. If we are to deal with tax evasion, accountability for high salaries, payment schemes and general poor practice, we have to know who owns these companies. The Liberal Democrats have long had a commitment to this and we are very glad to support this initiative in the legislation.

I suspect that we will spend a lot of time on pubcos, so I turn to this issue in my closing remarks. It is a parable of our time. My grandfather was employed in brewing in Dorset and Kent. When he was working there, it was probably a paternalistic industry—there is nothing necessarily wrong with that. There were close relationships between tenants, publicans and the local and regional breweries. There was mutual benefit in providing a market for beer, helping with the improvement of pubs and providing a livelihood for the landlords and the brewers. But in the 1980s, as breweries consolidated, pressure grew to break the link between large brewers and their pubs. Parliament introduced a limit whereby brewers could not own more than 2,000 pubs. The trouble was that it did not prevent other companies doing that, and the loophole was spotted and exploited, not by brewers or by people who really knew about pubs, but by financial engineers, speculators and bankers. They sought to increase shareholder value and they had a great business model. They acquired the pubs; they increased the length of the tenancies; they increased the rents; they raised the price of beer; and they made the tenants responsible for repairs and maintenance. As they did so, they increased the value of the property, sometimes overvaluing it, so that they could then borrow more money to buy more pubs. The companies were making forecasts of practically perpetually growing income from this model, but they became ever more leveraged in the boom that followed and it has become a classic pump and dump operation—some would say that this is almost a type of Ponzi scheme—and eventually it collapsed.

The winners, of course, were the insiders who got out in time; the losers were the publicans, their communities and the pension funds that lost their money, and we are left to pick up the pieces. The tenants are tied into 25-year leases; they cannot buy their supplies from anybody but the owner of the pub; and there is not much chance of investment by these overleveraged companies. Do not believe the rumours that are being put about that the provisions in the Bill relating to pubs will stop investment and create unemployment in this sector; it is already suffering job losses and not getting the investment that it should.

In 1969, the Monopolies Commission recommended the market rent option. That is what the Bill seeks to do. It will enable tenants to have a fair living, increase investment and employment, open up supply markets and lower prices for consumers, particularly helping the small, organic brewers. Just as the industry needs to consolidate and improve its prospects, we have this mechanism, working with the industry to help to achieve that change.

This is a parable of our time. Just as the coalition has been trying to share the burden of austerity, so it must make sure that it remains vigilant as the economy picks up. We must learn the lessons of the last boom and bust, exemplified by the pub industry. Small businesses lie at the heart of our economic recovery and will drive it forward. We must encourage and support them to do so.

16:00

[Lord Bilimoria (CB)]

My Lords, last month, I accompanied my university contemporary, Greg Clark, the Universities Minister, on a delegation to India. I spoke at an Indian higher education conference. Sitting next to me, sharing the platform, was the first ever permanent secretary-equivalent of a department newly created in India by Prime Minister Narendra Modi: the department for skills and entrepreneurship.

I declare my various interests to do with this debate and the Bill. Last Monday, I spoke at the opening of Global Entrepreneurship Week alongside Vince Cable, where it was revealed that London is one of the top two cities for entrepreneurship in Europe. Last week, I became a founding member of the Guild of Entrepreneurs, which will soon become a livery company in the City of London. We are currently on the 687th Lord Mayor of London, so it has taken us a long time to establish a Guild of Entrepreneurs.

Yesterday, I was at my old university, Cambridge, speaking at the 10th anniversary of the Centre for Entrepreneurial Learning at the Judge Business School. I have been proud to have been appointed one of the first two visiting entrepreneurs at Cambridge, and have been involved with the CfEL since its inception, spreading the spirit of entrepreneurship throughout the university—not just the business school but the whole Cambridge University community. More than 300 students from around the university attend projects such as Enterprise Tuesday. Look at the culture shift that has taken place. When I was at Cambridge in the 1980s, there was no business school. Today, there is not only a flourishing business school but a centre for entrepreneurial learning.

However, there is not one mention of the word “entrepreneurship” in the entire text of the Bill. Can the Minister explain that omission? I am of course delighted, as the Federation of Small Businesses noted, that the Bill even exists in the first place. There is a lot that is music to my ears. There is so much of what the Minister said that is fantastic, such as helping businesses start from home, and childcare help for businesses. She herself noted that small businesses make a huge contribution to the UK economy. Between them, SMEs comprise 96% of all UK businesses, accounting for about half of UK jobs and one-third of private sector turnover—the engine of our economy.

Speaking as someone who started a business with just two people that has grown over the years, I have seen first-hand entrepreneurial businesses. My business has dealt a lot with the curry restaurant industry. More than 10,000 of them are represented by the Bangladesh Caterers Association: pioneering entrepreneurs who have made curry the favourite cuisine of this country. I know the sacrifices that those individuals have made; I know how difficult it is to start, to grow and to survive in business. One of the first cases I ever sold of my product was to a local corner shop. Of course, those corner shops have survived and grown thanks to the Asian community. So I have been a micro-business, an “s”, an “m” and now I have a joint venture with a global giant.

There is a problem with the terminology used in the Bill. Grant Thornton—I declare an interest as I have dealt with the firm for many years as a client—has noticed that there is an unnecessarily restrictive definition of SMEs in the Bill. The current definition of SMEs used by the Government largely excludes mid-sized businesses from many of the provisions of the legislation, such as on access to finance, late payment and credit information. However, these same businesses will still have to abide by a number of additional burdens, such as the duty to publish a report on payment practices.

Grant Thornton estimates that approximately 34,000 mid-sized businesses will be left behind by the Bill, as they lack the resources of the large corporates that are needed to cope with additional regulatory reporting but are not granted the same exemptions granted to SMES within the Bill. Will the Minister acknowledge and, I hope, deal with this omission by widening the positive provisions to a larger section of the business population and altering the definition of an SME used in the Bill, which is based on the Companies Act and restricts an SME to a turnover of just £25 million.

On access to finance, the United Kingdom lags way behind our major competitors. Just look at Germany, where SMEs can draw upon close personal and financial links with a multitude of local lenders, many of which are state owned or operated as mutual firms. Germany’s small and medium-sized businesses, the Mittelstand, are exemplary and have been the centre of the economic success of that economy. The United States has always been brilliant in the way that it has helped to fund its small businesses, but I believe that we could go even further. In fact, the Institute of Chartered Accountants in England and Wales, of which I am proud to be a fellow, recommends that in order to help businesses with the wider issue of finance and cash flow the Government should foster new business growth by introducing critical growth loans, where a percentage of the loan is guaranteed for SMEs trading for between two and five years.

I have benefited personally from the Government’s small firms loan guarantee scheme, which is brilliant at enabling businesses that do not have the collateral to get the Government to back the security with the bank that lends to the business. We could and should increase that lending far more than we are. Does the Minister agree that we should be doing this? Business is going global. The Bill talks about export finance and there is so much good work going on. UK Trade & Investment has sponsored a programme called Sirius, where we attract the brightest young graduates from around the world to come and open their businesses here in the UK. This is the sort of initiative that we should be encouraging and growing.

With regard to the moral aspects of the Bill, the fact that we are addressing the minimum wage is excellent. If the Bill is clamping down on those rogue businesses which exploit their workforce, that is great news. I cannot think of any ethical business that would pay less than the minimum wage, let alone the living wage. However, the Guardian reported last week that despite the Business Secretary’s rhetoric last year that the coalition Government would crack down on firms that underpay their employees, there have been no successful prosecutions of such illegality since February 2013. Can the Minister confirm that? The annual survey of hours and earnings for the Office for National Statistics recently reported that around 287,000 workers were paid at less than the minimum wage in 2012. Are the Government aware of that and why are they not doing more about it? I hope that the Bill will be able to address this. Can the Government assure us about it?

With regard to the pub industry, I said that I declared my interest and I cannot spend the whole of my time declaring my interest in this area. The sad thing is that more than 10,000 pubs have closed down in the United Kingdom in just the last decade. We need to do everything we can to save the British pub, which is at the heart of British communities. The beer tie itself is somewhat of a double-edged sword. Of course, it allows big brewing or pub groups to invest in the pubs. To actually start a pub, you have to put down perhaps £250,000. However, if you are with a big pubco you do not have to do that and can actually run a pub. That is the advantage of being part of a big pub group.

However, if by doing that you also have to pay 70% to 80% above the market price for your beer, and pay higher rents, that does not feel fair at all. Given the recent defeat on this issue in the other place, I am delighted to hear the Minister say that the Government have listened and are going to try to achieve what I hope will be a middle way, where we can have the benefits that the big pub groups bring while enabling our pubs to be competitive and flexible, and to flourish, thrive and grow.

With regard to insolvency, Britain’s insolvency environment ranks pretty highly. In fact, we rank seventh in the world. The Bill talks about reforming insolvency in this country. I do not believe it is doing it in bold enough terms. For example, we are not going as far as having the famous American Chapter 11 or the Canadian Division 1 principles—and, surprise, surprise, countries number 1 and 2 in the insolvency environment are Canada and the United States of America. Those two measures, Chapter 11 in particular, provide a company trying to restructure with protection from creditors to give it time to do so. I have gone through this. I tried to institute a company voluntary arrangement. We got 90% of our creditors to agree, but we could not go through because there was no protection and one of the creditors scuppered the whole arrangement.

The Bill talks about pre-pack administrations. This is meant to be the least worst alternative. I have had to go through this procedure. It is awfully painful, but it is there to save brands and businesses if companies go through the procedure above board, as we did. I am proud to say that today we have a brand and a company that are flourishing. The worst thing about it is that when I went through that procedure I realised how badly misused it is in this country. It is misused to the extent that shareholders, creditors and, worst of all, employees suffer. That is not on. I do not think that the measures in the Bill go anywhere near far enough to improve the pre-pack administration regime. Bringing in Chapter 11 would be the best way of taking things forward. Do the Government agree?

Mostly importantly, this Bill is not just about businesses remaining as they are. As the Minister said, around one-fifth of small businesses say that they want to grow significantly and are determined to do so. The overall thrust of this legislation is aimed at making it easier for SMEs to operate and grow within the economy, which is something we should celebrate. Why are the Government not going further? One of the things that SMEs need is education. I attended the business growth programme at Cranfield. Cambridge has the diploma in entrepreneurship. These are fantastic courses, but they cost up to £10,000 a year. The Government should have a competition for 100 businesses a year to attend these courses to improve their competitiveness and help them to grow. Will the Government accept this suggestion?

I do not want to look a gift horse in the mouth. The fact that the Bill exists in the first place is wonderful, but I despair that it does not emphasise entrepreneurship. I worry that Britain today is number 2 in the world in inward investment. That is something we should be proud of because we are an open economy. However, I hear stories of Indian businesses having huge problems opening bank accounts and setting up companies over here. We are trying to address money laundering, but we are hampering our competitiveness and inward investment capabilities. We are one of the top 10 economies in the world. We have to encourage entrepreneurship, growth and employment.

16:13

[Lord Wakeham (Con)]

My Lords, one of the great pleasures I have had in this House before today is to follow a speech by the noble Lord, Lord Bilimoria. He always makes an interesting speech. In the first part, he tells us how he has been around the world advising people in different places how they should run their affairs, and he talks a great deal of sense thereafter. He is an old friend and he will not mind me saying that. He made one of his typically very good speeches and I enjoyed it.

I congratulate the Government on this Bill. I started my small business on 1 June 1960. If you work it out, it was very nearly 55 years ago that I started my first small business, and I think that this is the first Bill before the House that is entirely devoted to small businesses. That is some credit to the Government. While the noble Lord who spoke from the Opposition Front Bench made some interesting points, I did not detect from them that the subjects he raised, which were out of the Bill, were directed to small businesses in this country, important as they might be.

This is a very good Bill and it is designed for small businesses. It is interesting to look back to my early days in business 55 years ago; what was important then was persuading any bank manager to lend you any money to get going. That was the really important thing. Fifty-five years on, we still seem to have problems raising the money, but we also have problems dealing with the regulations that have arisen. There were not too many regulations 55 years ago when I got started. The question was: how was I going to get it going? So I welcome a great deal in this Bill. It is going to help cash flow and assist exports, and also start something to help small businesses to get paid quickly by big businesses. I suspect, however, that that will be more difficult than what is indicated in the Bill.

I remember when I was a major subcontractor for British Steel. Could I get paid on time? I could not. It was absolutely hopeless. In the end, they invited me in to see their accounting systems and how they did it. They said, “If you think we ought to be able to pay you quicker, tell us how we should do it”. In the end the compromise was that I added something to the bill to get my money, but I still could not get them to pay on time. So I congratulate the Government on trying to have a go in getting big business to pay on time; it should pay on time, but it is very difficult.

I was interested in reading the Second Reading debate in the Commons, which the Minister referred to. Of course, a lot of the debates were all about employment. They agreed an amendment to do with pubs and what is really important is whether that question can be resolved without creating unemployment. I have no great technical knowledge about it, but there are some interesting questions that the Government have to take on board.

There is one part of this Bill that I particularly welcome. It creates a duty on the Minister to set up the small business appeals champion. The aim, as I understand it, is that we should have clear and effective procedures in place so that small businesses are not hampered by decisions of various regulators that are cumbersome or unfair. If I wanted one word to say what that man should be asking, the word is “materiality”. That is the word that needs to be considered by these people.

There are quite a lot of areas where people have tried to improve things but have actually still made things quite significantly difficult. I will give a few examples. The Inland Revenue now has a very good system where, as a small businessman, you can ring up and speak to some quite well informed people. You can find out what is the position with this, that or the other thing that you are concerned about. But if it is going to take you an hour to get through on the phone, the thing needs to be speeded up. It is the same with planning decisions. I am not criticising necessarily the planning decisions, but when I was running a small business, I wanted to know quickly whether I was going to be able to do this or not. The delays in the bureaucracy need to be sorted out, because that is very unfair.

I have given two examples from the public sector; the third is from the private sector. I think that the present money-laundering arrangements are a disgrace. The banks and financial institutions have turned all the work around to the customers—of whom 99.9% are perfectly innocent—and they expect them to do all the work in order that they can employ cheap labour to do the job. If they employed better people who were able to make some sort of judgment on the situation, it would be more effective for money laundering and it would be better for the customers. One gets the impression that some of these institutions are more concerned with not being held responsible for money laundering than with trying to detect it. If the small business champion gets moved into some of these areas where people have tried to lessen regulations that do not help, that will be a very worthwhile effort.

I am going to sit down, but I want to say how much I am looking forward to the maiden speech of my noble friend. I made my maiden speech on small businesses in the House of Commons 40 years ago, and I guess that she will make a much better speech than I made then.

16:20

[Lord Kestenbaum (Lab)]

My Lords, this is such vital legislation and its core intention must be broadly welcomed by those noble Lords who remain desperately concerned by the uneven growth in large parts of the UK, so it would be churlish of noble Lords in all parts of the House to seem reluctant to praise good intentions when they see them. Yet so many of the interventions proposed in the Bill seem just that—modest, timid and good intentions. We do not need to go further than the Government’s own yardstick for the Bill:

“The … Bill has two fundamental purposes, one of which is to help small businesses grow … and the other is to ensure that the UK continues to be regarded as a … fair place in which to do business”.—[Official Report, Commons, 16/7/14; col. 906.]

I trust that my noble friends on this side of the House may well question whether the Bill meets that latter objective, the fairness agenda, but I fear not. However, I am convinced that it does not go remotely far enough in respect of the former objective—helping small businesses to grow.

We know what we are up against when it comes to driving small business growth. We know that the most imaginative global economies, the trend-setters of entrepreneurial zeal—the United States, Finland, Korea, Israel—all have substantial measures of supportive, and indeed aggressive, public policy and effective financing to drive their small business agenda. They have active, assertive, long-term and growth-oriented Governments who go much further than piecemeal and disconnected interventions that often lack in ambition and do little for an economy that, as someone recently put it, has become,

“drugged up on cheap money, subsidised credit and rock-bottom interest rates”.

So what might we reasonably expect at this fragile time from those with their hands on the policy levers? The first thing is an acknowledgment of what the Bill has definitely side-stepped: how to create the conditions for businesses that have the ambition and the potential to grow fast. As the horror of worklessness increases in so many parts of the UK, we know exactly where the next generation of jobs will come from. All the evidence shows, again and again, that small, innovative and high-growth firms will be producing the jobs of the future. These firms have a disproportionate impact on our national fortune and, crucially, they are creating jobs: just 7% of businesses in the UK classified as small, innovative and with high-growth potential are responsible for creating over half the new jobs in the past decade. These firms will produce tomorrow’s jobs and will be the productivity drivers of our economy.

What are those firms currently telling us? That the very businesses that are at the core of any attempt to rebalance and grow our economy are the very businesses to which banks right now are doing one of four things: not lending fast enough; not lending in sufficient amounts; not lending on reasonable terms; or just not lending at all. The lack of long-term patient capital, the lending infrastructure on which all small business growth depends, needs nothing less than a complete overhaul. To be serious with this legislation is to call for a financing revolution that targets the high-growth, high-productivity, ambitious small businesses that create our jobs. We need the type of legislation that propels innovative, enlightened and, yes, progressive new entrants into the world of financing—everything, from peer-to-peer structures that compete with banks to big institutions supported by government that target this sector. Surely we can go further than what we have heard today in this House about banks sharing information regarding loans declined with online platforms.

We just do not have the necessary degree of scale and ambition in the Bill in front of us. Instead, at a time of retrenchment in the banking sector and nervousness among investors, we see modest steps from government, and that makes it harder and harder for small businesses to grow. Can the Minister give the House some reassurance that we can go substantially further in helping small businesses access finance? As banks tighten lending criteria to strengthen their balance sheets and as risk capital from the private sector becomes more scarce, what are the consequences? The very businesses I referred to earlier—those with ambition and the potential to grow fast—are most at risk unless the Bill becomes less timid and more assertive.

Consider this: the most recent research conducted by Stian Westlake and his colleagues at Nesta shows, starkly, that simply encouraging lots of people to found businesses and then doing very little of consequence to support their growth in a meaningful way will do nothing for the economy. Further, the loss to our national prosperity by not making the UK a better place—not just for founding businesses but for scaling them—is staggering. Nesta’s research, The Other Productivity Puzzle, shows that over a 10-year period the loss to the economy due to the stagnation of the most productive small businesses was 7.4 percentage points of productivity, which totalled £96 billion of lost GDP per annum.

That evidence tells us what we have long sensed: that the most dynamic, most productive firms, which in turn create the largest number of new jobs, struggle to grow because the infrastructure of financing is just not there for them meaningfully to scale up. The impact of that on Britain’s productivity has been eyewatering. If we are talking about stakes as high as £96 billion per annum of lost GDP, why are we considering such a modest Bill, with such modest interventions? They are of course helpful, but at best, perhaps, they will keep fragile and small businesses just that—fragile and small.

Too many aspects of the Bill are reflective of much business policy in the last four years. Too many timid programmes, often disconnected, have been launched with fanfare and quietly closed 18 months later. We hope instead for an assertive, ambitious national programme which runs right through government, which will allow us to compete with the world’s most dynamic economies and which in turn sustains the fair society we must nurture here in Britain.

16:27

[Lord Cope of Berkeley (Con)]

My Lords, I am delighted to support this big Bill for small businesses. Throughout my political life, I have worked to try to improve a lot of small businesses. I share a considerable amount of the analysis expressed by the noble Lord who just spoke, but I am not quite sure exactly what measures he was proposing. Perhaps they will come in Committee in the form of amendments. Personally, I like the title of the Bill, with its emphasis on the link between small business, enterprise and employment. After all, as has been said, enterprise creates employment. Perhaps the noble Lord, Lord Bilimoria, would prefer to say that “entrepreneurship creates employment”, but it comes to much the same thing.

Many small businesses will always remain small. They are craftsmen or professional businesses that provide services or goods and depend on the skills of the individuals who run them. They will always remain small, but they deserve our support and help in these increasingly complex times, and I am glad to say that in some respects they get that through the Bill. Other small businesses, of course, can and do grow and become large businesses, and that is when enterprise creates employment.

One cannot this afternoon refer to every aspect of the very disparate set of measures in the Bill, but I want to comment, first, on late payment, which is in Clause 3. This is a potentially important move in the struggle against large companies which are slow payers. It enables the Secretary of State to require large companies to set out their practices and policies with regard to payment. I hope that the word “practices” includes a report on performance, because that, after all, is what matters. Late payment has been a consistent complaint of small businesses for many decades. When I was a lad, learning on the job to be an accountant in Leicester, it was general business practice to offer a discount for prompt payment, and it happened a great deal. I remember one of our clients, an old boy who had a good business in decorating supplies, whose boast was, “Thirty years in business and never missed a discount”. The result of that was that he was trusted—for that and for other reasons—and had a flourishing business.

Another problem today is large businesses—and, indeed, sometimes government departments and agencies—that use their enormous buying power to pay their small suppliers late. There is also, of course, a knock-on effect. If you are paid late by the people to whom you are selling, you cannot easily pay your own suppliers promptly. There is a knock-on effect right through the whole of business. Governments have tried different tactics in the past to improve this situation but it remains a big problem. Basically it is, I think, a problem of culture. The idea in the Bill is that disclosure will help to shame large businesses into doing better. However, the disclosure will work only if the press—prompted, I am sure, by the small business organisations—shines a light on big businesses that do not pay. I cannot imagine that their shareholders will take much notice. Indeed, they may welcome the fact that the directors of the large companies are relieving the strain on their finances at the expense of other people. But they should not, and I hope that this measure will be successful.

Like others, I welcome the provisions in Part 1 which are designed to make it easier for SMEs to get the necessary finance. As has been said, a high proportion of small business finance comes from the large clearing banks, but other sources are being used more and they certainly should be. Your Lordships’ Select Committee on Small and Medium Sized Enterprises, of which I had the honour to be the chairman, reported on exports in March last year. We recommended that businesses shop around for finance. We felt that too few businesses looked in more than one place for where their finance might come from. Well established sources such as invoice financing and that sort of thing have been around for a long time, and now there are newer sources, such as crowdfunding and the challenger banks. There are, in fact, far more banks available to help, particularly with export finance, than just the well known clearers. As we know, the Government themselves have an involvement, although not quite as vigorous as we would wish, but that is being improved. We urge the Government to help to stimulate the use of these new sources of finance. I therefore welcome Clauses 4 and 5, which open up information for such other sources of finance and will encourage people to use them.

Of course, privacy and transparency often conflict. We all want our banks to keep our secrets. The Bill ensures that information will be given to credit reference agencies or finance platforms only when the customer agrees.

Pubs are another aspect that has been mentioned. The problem of tied pubs and beer orders is another long saga, as the noble Lord on the Liberal Democrat Benches just made clear. When you look back, it is astonishing how the beer market has changed since I first started going to pubs. After all, there were fewer and larger businesses all the time at that stage, and Red Barrel was everywhere; there was practically nothing else, in places. But the credit for changing all this is due to one of the most effective campaigning organisations of recent decades, the Campaign for Real Ale, which my noble friend the Minister mentioned. Now, of course, there are microbreweries everywhere. The provisions in this Bill, particularly as amended in the Commons, are another tribute to that campaigning organisation. The Government were wise to accept the decisions taken in another place and inserted as amendments into the Bill. Titivate the drafting by all means, but I am glad that the policy of a market rent-only option will remain in the Bill.

I was somewhat startled by Clause 13, which relates to cheques. I did not realise that they could be presented for clearance only physically, not by electronic means. It is astonishingly Victorian, is it not? I do not wish to cast aspersions on Victorian methods; in many cases, they were very efficient. When there were four deliveries of mail a day and people’s businesses did not extend over such widespread parts of the country, they worked extremely well. However, things have changed, and the number of days it takes to clear a cheque has increased immensely over time. But cheques still have their uses, and it is very good that we are making this change to the law.

Clearly, we will discuss insolvency in Committee, as we already have a little. It is a very complex, specialist area, with the interests of creditors, employees and others all having to be balanced in seeing what is to be done with a business. As the noble Lord, Lord Bilimoria, remarked, we have no real equivalent of Chapter 11 in the United States to try to freeze the position and save a business, so I foresee Committee debates in that regard.

The last matter that I want to mention briefly is company registration. The clauses and the schedule dealing with that matter in the Bill are highly complicated, but they are designed to simplify the procedure, which is a very good idea. This contradiction is not a new phenomenon; we are used to complicated things being proposed in an attempt at simplification. I welcome the clauses, provided they will actually simplify the procedures, which are unnecessarily elaborate and, I suppose, Victorian in their origins.

Overall, it is a welcome Bill, which takes opportunities to help small and medium-sized enterprises. It is a Christmas tree of a Bill, but that is appropriate for the time of year.

16:38

[Lord Sugar (Lab)]

My Lords, I welcome the noble Baroness, Lady Harding, into the Chamber, and I look forward to hearing her maiden speech. We have worked together in the past on some rather large projects, and I assure noble Lords that she is a very capable business person who will bring a good contribution to the House. She will be about the only person here to recognise the genius in what I am about to say now.

I welcome the opportunity to discuss the Bill with your Lordships today. I start by stating that there are indeed a few positive parts in it. As your Lordships will recall, I was once appointed by the previous Prime Minister as an adviser specialising in SMEs. In that role, I travelled the country visiting many small companies and spoke to thousands of business people at specially organised seminars where the delegates were invited to ask me questions about their businesses or issues of government policy. I used these seminars to try to understand people’s concerns. Unsurprisingly, one of the most frequently asked questions of me was, “What can the Government do to help my business?”.

In principle, we all agree that support for small business and employment is a good thing, but this Bill does not go far enough in offering practical, common-sense solutions for small businesses. That is the test that should be applied to the Bill before us today. What can it do to help small business and enterprise in the UK? The simple answer is: as drafted, not enough. It goes some way to addressing the problems that small businesses face, for example around access to finance, but there are some seriously weak points in the Bill.

One of the biggest issues that came up in my seminars was late payment and how that was crippling the cash flow of some of these companies. Who were the culprits? They were the large organisations which in many cases were executing lucrative government contracts. Here we are, five years later, and the same issues exist. In the matter of late payments, we have an example of this Bill, as drafted, being great on paper but having no real impact where it matters—in people’s factories, offices and, most importantly, in small businesses’ accounts. One of the most crippling things for small businesses is to cope with late payments or, in some cases, no payments at all. It is, sadly, becoming an increasingly common issue, with 60% of UK small businesses reporting that late payments are a real problem for them.

In my early days of business I knew that one needed to build up trust with suppliers. I treated them as I would have treated a tax or electricity bill: they simply had to be paid on time. People who specialise in insolvency have estimated that one in five business failures is simply down to bills being paid late rather than a failed business model. It takes only a few late payments to bring a small business close to the edge. This government Bill will do very little to help solve this problem. It offers no incentive for companies to make payments on time and, more importantly, no deterrent for paying late. The Bill as written only gives powers to the Secretary of State to direct companies to publish certain information on their payment practices. This will have virtually no impact on whether they adhere to these self-published policies. In my opinion, it changes nothing. The onus will still be on the small businesses that are being short-changed to chase the payment.

I often wonder what experience those who draft these Bills have. It is clear in this case that they have no idea whatever of what it is like in the real world—at the coal face, so to speak. Small businesses are hesitant to alienate their suppliers for fear that they will have business taken away from them if they complain too much. We should be using this Bill to remove an environment in which businesses can be paid late. As has been suggested and discussed in the other place, we need the Government to be tougher in showing companies that late payments are not an acceptable part of our business culture. It is totally unacceptable for companies to accrue to their own interest and improve their own cash flow while other smaller businesses suffer. Harsh but fair penalties should have been included in the Bill. Instead of small businesses fighting for payments, causing further financial and reputational cost, late payers should automatically pay interest owed to their suppliers at, I suggest, 8% above the Bank of England interest rate. It is only then that we will see businesses suddenly waking up and starting to pay on time, where failure to do so will hit their bottom line. When you have a Business Secretary and, with respect, a Government who do not really get it—by that I mean what life is really like for the average small business—there is no point in creating legislation if some clever lawyer can find a loophole or where the policies have no impact on businesses or people’s lives.

I would like to draw your Lordships’ attention to the clauses that seek to deal with enforcement of the national minimum wage. We are in agreement on all sides of the House that we want to see more people in work and off benefits, but a staggering number of people currently do the right thing and do not even receive the minimum wage. They have gone out and got themselves a job, only to find that their work does not even amount to the minimum of £6.50 an hour. There are now reports that at least 300,000 people in the UK earn less than the minimum wage, which leaves the door open for unscrupulous companies to exploit inexperienced, desperate and, in some cases, migrant workers, all so that they can undercut firms that are playing by the rules.

The solution that the Bill offers is simply to increase the penalties for companies failing to pay the national minimum wage to their workers, which, on the face of it, sounds very good. It seems a sensible way to tackle the problem, but when one hears that the Government have identified only 25 firms breaking minimum wage law, it is clear that investigation and enforcement are the real problems, not the size of the penalty. The Bill fails to protect those people expected to work for less than the minimum wage and businesses that pay their staff a fair wage from being undercut. As I said before, it would appear that the current BIS Secretary aims to pass a Bill on small businesses without knowing what the real challenges of running a small business are, let alone how to deal with them effectively. The Bill contains some good intentions, but when we legislate to help small businesses, good intentions are not enough if they do not translate to real changes on the shop floor, in the backs of the vans or in the bank balances of our small businesses.

16:46

[The Lord Bishop of Peterborough]

My Lords, like others I welcome the noble Baroness, Lady Harding, and look forward to hearing her maiden speech when I sit down.

I warmly welcome the Bill. Small businesses and local enterprise are part of the life-blood of communities and play a major part in enhancing the life opportunities of many people. Granted, there are areas where the Bill could go further, but every initiative to support small businesses is to be welcomed.

I draw your Lordships’ attention to the role that churches and church-linked groups play in local enterprise. For example, the Cathedral Innovation Centre in Portsmouth has recently been involved in a number of very good initiatives, including working with the South East local enterprise partnership and Provide to develop a major social enterprise strategy, which is being launched today in Thurrock. Alongside my right reverend friend the Bishop of Derby, the centre has supported the St Peter’s Innovation Centre in central Derby. In partnership with the YMCA, this has created micro-businesses led by young people who have been unemployed. The centre has also opened a Southampton office, from which the Southern Policy Centre has been launched, with support from five parties in the southern counties. The noble Lord, Lord Adonis, and Greg Clark, the Minister for Universities, Science and Cities, spoke at the launch. Numerous small businesses and enterprises are up and running, often employing young people from disturbed backgrounds—all this using virtually no public cash.

I am also delighted to draw to your Lordships’ attention the good work being done by local authorities, not least the City of Peterborough. For example, through its involvement with the supply chain network, the city council is supporting larger organisations to work with and mentor smaller businesses to improve their resource efficiency and reduce their business costs. Local support for small businesses is vital and should be encouraged.

I very much welcome the introduction of a register of persons with significant control. This is an essential requisite for transparency and trust. I congratulate the Government on being, I think, the first in the world to set up such a PSC register. It is surprising—perhaps shocking—that we need to legislate to force businesses to reveal who runs them and who benefits from them, but, as we do, let us do it thoroughly but without too much delay.

I have some concern that the proposals in this area may not be strong enough, so I ask the Minister whether the Government are working to persuade the EU, G7 and G20 countries and our own overseas territories and Crown dependencies to introduce similar public registers. How will the Government ensure that the register is kept up to date and that there is an adequate verification regime? Will the Government publish a list of possible sanctions for those who do not fulfil their duties in regard to the register? I believe that these are important questions but I stress that I ask them in a spirit of support for the Bill.

16:50

[Baroness Harding of Winscombe (Con) (Maiden Speech)]

My Lords, I first visited this House when I was eight years old with my grandfather, the then noble and gallant Lord, Lord Harding of Petherton. I sat in the Gallery with my grandmother and my brothers looking down at my father sitting on the steps of the Throne, as he is today. Then, I was struck with awe at the wisdom and history that is this place. As the eldest daughter of a hereditary Peer, I knew with certainty of course that I would never sit on these Benches myself, so it is with deep respect, considerable trepidation and a deep sense that this is an honour that I do not deserve that I address your Lordships today.

One of my grandfather’s sayings when I was a child was, “You can’t be brave unless you are afraid. It’s not the fear that matters; it’s what you choose to do with it that counts”. I used to whisper this to myself every time I circled at the start of a steeplechase. I could almost hear him murmuring his sage advice to me as I walked up the stairs from the Peers’ Cloakroom this afternoon and passed his coat of arms. As an aside, a maiden speech takes about the same amount of time as a three-mile steeplechase, and—for me, at least—it is quite debatable which is the more terrifying.

Of course, my first few weeks here have been made so much easier by the tremendous help and support that I have received from all the staff and from your Lordships on all sides of this House. I thank everyone who has made such kind comments in this debate, and I particularly thank my two supporters, my noble friends Lord King of Bridgwater and Lady Lane-Fox. I also thank my noble friend Lord Henley—my mentor—whose advice in the procedures of this House has been completely invaluable, although please forgive me when I trip, as I undoubtedly will do, on a procedural hurdle.

My life to date has been made up of three things: my career in business; my love of steeplechasing and horseracing, itself an industry with many small businesses, employing some 85,000 people; and my still young family. I find all three represented in the Bill today.

I must declare an interest in that I am the chief executive of a publicly quoted company, TalkTalk Telecom Group. By most standards TalkTalk is a large company, but when compared with our large competitors, such as BT and Sky, we are in fact quite small and clearly affected by many of the provisions in the Bill. The business that I run went from no customers in 2006 to serving more than 4 million households today across the UK. As a result, I have great empathy with the many thousands of small businesses across the UK that are looking to grow.

I myself am proof that sometimes the little guy—or, in my case, the small blonde girl—wins big. I learnt this when I was 30, when my horse, Cool Dawn, won the Cheltenham Gold Cup as a long-odds outsider. I learnt then that sometimes dreams do come true. If a one-horse amateur can win the Cheltenham Gold Cup against the odds, entrepreneurs with big dreams can surely succeed as well, provided that we give them the space and encouragement to try.

I commend this Government for all the great work done over the last four years to make it easier for entrepreneurs to start and grow businesses. I would encourage the Minister, my noble friend Lady Neville-Rolfe, to stay true to the principles of this Bill to reduce unnecessary bureaucracy and burdens on businesses. It is so much easier to add regulation than it is to take it away, and the more complicated and complex the regulation, the harder it is for small businesses to compete. Whether it is greater transparency, easier access to finance, modernised and simplified insolvency procedures, or simpler procedures for childcare providers—all these measures will make it easier for all British businesses to thrive, but they will have a disproportionately positive effect on much smaller businesses. If we aspire to create the conditions to give birth to a British Google, Alibaba, or maybe the next generation Dyson or Rolls-Royce, by definition today they are at best very small businesses—maybe not even yet a business plan. This Bill will make it easier for them to join the FTSE 100 over the next 10 years.

I would also like to speak very briefly about one specific element of the Bill—zero-hours contracts. I suspect that I am alone in this House in having previously run a supermarket—not a chain of supermarkets, just one—Tesco Extra in Yeovil in Somerset. I spent one year out of my 10 in the supermarket sector as a trainee store manager for Tesco. I appreciate that many Members of this House are concerned about the impact of zero-hours contracts, especially when combined with exclusivity clauses. I totally agree with the Bill’s proposals to prevent such abuses. But I can tell you that, with Christmas fast approaching, with stores heaving with people filling their trolleys ready for the festivities and huge queues at the checkouts, zero-hours contracts are not all bad—for employers, for employees and for another critical constituency: customers.

I have been that store manager, walking down the bank of checkouts, staring at a sea of customers all impatient to get on with their Christmas celebrations and I have racked my brains on where to find extra people to man the tills. The ability to call on employees on zero-hours contracts to work at very short notice is something that not only every store manager in Britain would want to be able to do at this time of year, it is something that their customers would thank them for. Zero-hours contracts, when well managed, can be good for employees, too. These contracts work well for people juggling busy lives—from students to working mums to the recently retired—and I have found that they all get great value from them.

I completely support the provisions in this Bill to ban the use of exclusivity clauses in zero-hours contracts, but I would also ask my noble friend the Minister to ensure we remember that maintaining flexibility in our working practices is an essential ingredient to the success of British businesses, and it is an increasingly essential ingredient to many modern lifestyles. Flexible working practices help businesses, big and small, to deliver better customer service, which makes customers happy, and which in turn makes for happier and better rewarded employees. It is something that this Bill will help more businesses to deliver.

16:57

[Lord Mitchell (Lab)]

My Lords, last week I had the pleasure of having a drink with the noble Baroness, Lady Harding. We barely knew each other, but since we are both in the digital sector it seemed to me a good idea to get to know her. To me it was immediately evident that the noble Baroness was going to make a major contribution to your Lordships’ House and I knew instinctively that her maiden speech would be a tour de force. On both counts, I have not been disappointed. What she said today has given us all the hints we need to know that we are all the better for her having joined us.

The noble Baroness has an MBA from Harvard Business School. As a graduate from Columbia Business School myself, it takes some effort for me to admit that Harvard is as good as it gets. She has had a meteoric rise in the UK corporate sector, from McKinsey to Thomas Cook to Woolworths to Tesco. Today, as she said, she is CEO of TalkTalk, and as one of her customers I can attest to the quality of her company’s products.

This afternoon I will be addressing four policy issues: first, late payments; secondly, pre-pack administration; thirdly, the scaling-up of small and medium-sized businesses; and finally, the abuse of employing unpaid interns. I am nothing if I am not a serial entrepreneur, and nothing if I cannot speak about the joys, pains, thrills and disappointments of founding one’s own business. In my time, I have started three companies from scratch, all in the IT services area. On each occasion, it began by sitting around a table and asking the inevitable question, “Wouldn’t it be a good idea if?”. Three times I have been successful and the companies I started grew from nothing to become national and, in some cases, international market leaders. But I have also had my fair share of spectacular failures: the hugely costly Soho restaurant, the coolest place in town which attracted the young and the famous, but it haemorrhaged money and died an inglorious death. I founded a sophisticated asset finance company designed to lease intellectual property and brands. It also hit the buffers. There was the venture in Oxford to sell high quality souvenirs with “Oxford University” engraved on the items. It, too, bombed. And then there was the iPad app that was going to revolutionise mobile computing. Sadly, it did not. I know about the sleepless nights when you worry whether you will meet the monthly payroll. I have been to the meeting with the bank where a negative answer to a request for funds would be catastrophic. I have had an investment bank pull out of an initial public offering a week before impact day, only to recover and put the flotation to bed with another bank some three months later. Luckily for me, I have had more winners than losers.

I must make one declaration of interest. I am an investor in and director of a new company called Instant Impact. This company is involved in graduate recruitment and the placement of paid interns. My declaration is particularly pertinent because in this speech I will be addressing the issue of the mistreatment of unpaid interns. We on these Benches welcome this Bill but I think the Minister will get the message that we think it is timid where it should have been hard-hitting and much more encouraging.

The Labour Party is in no doubt that small business holds the key to our country’s economic success. We understand that the public sector has seen its employee base collapse under this Government and, to be honest, we see no reversal of that position for many years to come. It is similarly true that large companies are seeing little growth in their employee base. The real growth in employment, as many noble Lords have said, is coming from the small and medium-sized sector and that is why Labour is committed to providing a framework to ensure that this growth continues.

In my time, I have asked Ministers questions about the financing of the SME sector. I have pleaded with the Government to stop fooling themselves that Funding for Lending is working. I have said that it is a flop, that the money the Government have provided to banks has found most of its way into domestic mortgages and helped to fuel a boom in real estate that has been of little use to business. Nothing would improve the lot of small companies more than a commitment to eliminate late payment. It is endemic that big companies put the squeeze on small companies for no other reason than that they can. It is wrong and I am pleased to see that the Bill partially addresses the issue. Shaming late payers will be a start. Many of them are public sector organisations which pay late often because they have no motivation to do otherwise. They need to know that we simply will not tolerate any behaviour like this. I speak from experience. I have been involved in small companies which have diced with death simply because moneys due were delayed for spurious reasons. In these days of electronic payments, living off your creditors is simply unacceptable.

Pre-pack administration has always struck me as an odious concept. In effect, it occurs when a company is in severe trouble and is faced with administration or worse. It is abused where the directors, owners and the administrator conspire to put the company into administration and then—surprise, surprise—for there to be sitting on the sidelines a new company which quickly buys the assets and leaves the liabilities behind. On Friday, the company is Smith and Jones, and on Monday, the new company is Jones and Smith. It is true that jobs may be preserved and a business will continue, but to me it is all wrongly focused. I come from a background that says that the shareholders of a business are the ones who prosper if it does well and suffer when it fails. To see shenanigans where the creditors are dumped, legal cases are abandoned and other liabilities are tossed into the delete bucket cannot be right. I know that the Graham review into pre-pack administration argues in favour of pre-pack deals, but in my view the basic proposition that shareholders lose all when a business fails is not addressed strongly enough. I agree with the noble Lord, Lord Bilimoria, that we should replicate the US Chapter 11 option.

One report that has made a great impression on me recently was published in October by the serial entrepreneur and angel investor, Sherry Coutu. The Scale-Up Report on UK Economic Growth makes a very clear proposition: the game is not about creating companies, laudable though that may be; the real game is about scaling up our successes. As Reid Hoffman, the co-founder of LinkedIn, put it:

“First mover advantage doesn’t go to the first company that launches, it goes to the first company that scales”.

A “scale-up” is an enterprise with average annualised growth in employees or turnover greater than 20% per annum over a three-year period and with more than 10 employees at the beginning of the observation period. Why do we lag behind the US in companies being able to scale up? There are five reasons: the skills gap; leadership capability; accessing customers in other markets; accessing the right combination of finance; and navigating infrastructure. There is no reason why the UK has not produced its own Google or Amazon, but we must make it easy for our successful companies to scale up quickly.

Finally, I wish to address the issue of unpaid interns. I am prepared to bet that even in these Houses of Parliament there are many young people working for nothing. It is outrageous. Certainly, up and down the country many young hopefuls are forced into taking unpaid internships just so that they can enhance their CVs or in the hope that someone might notice them and offer them a full-time job. There is a word in English that defines forcing people to work for nothing—“slavery”. Indeed, the Modern Slavery Bill is currently going through your Lordships’ House. Unpaid internships are another form of slavery. For the rich kids, for those whose mummies and daddies can open doors, unpaid internships are a sure-fire way to get a good job. But what about the poor kids whose families cannot afford for them to work for nothing and whose parents have no such contacts? I hope the Government will back me in this. They should do if they are in favour of equal opportunity. But if they do not, I am determined and confident that Labour will support me. Certainly, I will be introducing amendments at later stages of the Bill to right this wrong. Quite simply, unpaid should become paid.

I have taken a smorgasbord of issues that I aim to address as the Bill goes through your Lordships’ House, and I look forward to our debates in Committee.

17:08

[Lord Curry of Kirkharle (CB)]

My Lords, I, too, congratulate the noble Baroness, Lady Harding, on her excellent maiden speech. Like other Peers present, I have no doubt that over the coming years her contribution to the debates in this House will be enormous, and we very much welcome that.

I am rather sorry that the noble Lord, Lord Bilimoria, has just left his place because I was going to comment on the fact that he had supported the establishment of a lot of curry businesses. I get lots of comment on my surname—I have started a number of Curry businesses. Like him, I employed two people when I formed my first business, although I must confess it has not been anything like as successful as his.

However, I speak not just as someone involved in small business but as the non-executive chair of the Better Regulation Executive. I will repeat what I said during the Deregulation Bill. I was appointed by the previous Government and it is an independent position. I was—very correctly—reprimanded by the Front Bench for using the word “we” when I referred to the Better Regulation Executive because it sounded as if I was part of the Government. I am not. I am an independent chair but we have contributed significantly to elements of the Bill.

I want specifically to refer to Part 2 of this important Bill and, first, to the proposal for small business appeals champions. Clauses 17 to 19 set out a new duty to appoint appeals champions to the national non-economic regulators. It is important to growth and the economy that poor regulatory decisions do not hamper businesses, so businesses must know how to appeal or complain when they feel that they have been unfairly treated by their regulator and believe that that process will be fair, value for money and accessible. Regulators’ appeals and complaints procedures must work for businesses—in particular, small businesses, which we know suffer disproportionately from burdensome regulation.

However, when we looked at this question, we found that most businesses did not feel that the procedures were working. Common issues included: that there was no informal way to resolve issues without a formal appeal; that there was often no alternative to court action; and that it could be extremely difficult to get a second opinion. Of the businesses we spoke to, many simply had not bothered to appeal a decision that they did not agree with, citing as reasons that there was no point, that it was too expensive or that they simply did not have enough time. Some felt that they might be targeted by the regulator if they appealed against the decision.

However, issues varied both between sectors and between regulators, and there were some examples of extremely good practice, so a one-size-fits-all approach will not work. That is why I welcome the duty to appoint small business appeals champions as part of a wider programme of work on better enforcement across national non-economic regulators, which also includes the regulators’ code and the growth duty. The latter was recently debated by the House as part of the Deregulation Bill.

Secondly, and in a similar vein, I want to speak on the business impact target, set out in Clauses 21 to 27. Regulation is important. We need it for essential protections and to allow the market to function efficiently. Many people have asked me as chair of the Better Regulation Executive whether I am against regulation. Of course, I am not; regulation is essential. But it needs to be efficient and smart. We need to ensure that regulations deliver the maximum protection for the minimum cost on small businesses. That way, we get the best of both worlds, with protections that do not create an undue drag on the rest of the economy.

The UK can take great pride in having been a leader in regulatory reform. Other nations, grappling with the same issue of balancing protections and burdens, look to the UK’s advanced regulatory management structure. A growing number of other countries are now following our lead in setting some form of regulatory management target. Italy, France, Spain, Portugal, Austria, Canada and South Korea, for example, are now all implementing forms of one in, one out.

When I visited Brussels after taking up my position and suggested that the approach be taken there that we were considering in the United Kingdom, I was scoffed at and told that this would be an impossible task and certainly would never be accepted in Brussels. Increasingly, member states within the European Union are following our lead in adopting this principle.

The savings to business that have been delivered under the current one-in, one-out and one-in, two-out systems are impressive: over £1.5 billion per year so far. But behind this figure lie real-world examples of how life has been made easier for all UK businesses, while retaining necessary protections. I could give a number of examples, but, for brevity’s sake, I will not. However, it is worth highlighting that much of the progress described in the business impact target clauses—the setting of the target, reporting against the target and independent verification—build on already established ways of working.

For example, Clause 25 creates a duty to appoint an independent body to verify the economic impact of new regulation in scope of the target. Currently, this function is performed successfully by the Regulatory Policy Committee, which verifies the impact of all measures in scope of one in, two out. The RPC also has a wider role beyond the proposals in the Bill. For example, it currently scrutinises the impact assessment for new regulation on the smallest businesses as part of the small and micro-business assessment process. It is the success of that approach that convinces me of the value of a long-term structure for regulatory management, which is why I support the introduction of a business impact target.

My third point concerns the provisions on statutory reviews of regulation. For too long, Governments of all types have focused on new regulation, rather than effectively managing their accumulated stock of existing regulation. Too often, I have heard from business groups that Governments have tried to remove regulatory burdens while at the same time new regulations kept piling over the horizon. When the Better Regulation Executive and the Cabinet Office began the Red Tape Challenge exercise, for example, we found that some departments did not even have a solid grasp of the regulations that they owned. They did not know what stock they had. Regular review of existing regulation to ensure that it remains fit for purpose in an ever-changing world is an essential part of good governance and, indeed, good policy-making.

Finally, I shall speak about the statutory definitions of small and micro-businesses in Clauses 33 and 34. I have no doubt that there will be further comments on this. We should be doing all we can to manage the often disproportionate effect of regulation on our smallest businesses. The clauses enable either exemptions or special treatment for small and micro-businesses in future secondary legislation. That will provide an important tool for future Administrations to design new regulations that are not just a one-size-fits-all imposition but are smarter regulations that recognise the significant differences between large and small businesses in the United Kingdom.

The regulatory reform measures in the Bill are an important evolution of the UK’s regulatory management structure. We lead the field in Europe. The Minister mentioned that we were second to Denmark in the “best place to do business” league in Europe. The truth is that we were top of the league and lost out to Denmark two years ago. We need to retain that position, and these measures will help us to achieve that.

17:17

[Viscount Eccles (Con)]

My Lords, as many of those who have spoken this afternoon have pointed out, there are things in the Bill that should happen anyway. I ask myself: when we legislate for things that should happen anyway, will it work? As the noble Baroness, Lady Harding, said, space—a very important word—is needed if things are to happen which should happen. The question then sophisticates into: will legislation reduce or increase space? I suggest that normally it reduces space; it does not increase it.

The Bill is 279 pages long and, as is said in the memo to the Delegated Powers Committee,

“contains 75 individual provisions concerning delegated powers, 14 of which are Henry VIII powers”.

The noble Lord just mentioned the one-in, two-out policy. Someone has to get rid of 150 regulations once the Bill is enacted. Apart from its length and the complexity, it is a package of very different subjects and is largely enabling. Intentions have been mentioned several times this afternoon, and I will not go down the path to hell. Nevertheless, the question arises: what will actually be achieved? For anything much to be achieved under the Bill, it is dependent on secondary legislation, not on what is in the Bill.

Five months from a general election, which of the 12 parts of the Bill will attract public attention? Perhaps three, including late payments and the lending, borrowing and credit discussion. That raises the question: where and why is there market failure, if indeed there is? Why have people departed from 30 or 60 days? Prompt payment is in everybody’s interests. I think the noble Lord, Lord Mitchell, mentioned cash flow but if you want to wreck your balance sheet, you just let your creditors go crazy. That may not affect the public sector but, in my business life, it certainly would have been a very serious matter if my balance sheet had looked all adrift on current liabilities. I am sure that we will discuss this question more. It seems very strange that people do not believe in prompt payment. When we come to the lending and borrowing issues and the market failure, my question is: will this legislation help? I rather think, as the noble Lord, Lord Sugar, said, that it is not likely to be of much assistance. Indeed, market failure needs more careful thought than it has been given in recent times, since 2008.

Part 4, on the pubs, will certainly arouse public attention and much discussion will be had in your Lordships’ House; we have already had some. Within the Bill, there is a Pubs Code Adjudicator, which I think is modelled on the Groceries Code Adjudicator— not, if I may suggest, as yet a very successful model. The Groceries Code Adjudicator is struggling to find the role that was envisaged in the 2013 Act, and I dare say that a pubs adjudicator would have some of the same problems.

Then there is Part 11, headed “Employment”. To me, this illustrates a division in our society. When problems occur, there is a big following for saying, “Somebody else should do something about it”, and another following which says, “We would rather get on with this ourselves”. That is not the end of the division because there are those in authority who think that something should be done because people cannot be expected to do it for themselves. That lack of confidence in people is certainly not good for business, for entrepreneurship or for all the virtues that we have been discussing this afternoon. Nevertheless, many people think like that.

I come back to the public reaction to the Bill and to our discussion of it. In general, the public will conclude that it does not have much to do with them. They will have flashes of recognition: in the pub, they will hear horror stories about late payment and credit, and the lack of a willingness to give them credit. Indeed, ever since Mr and Mrs Stainton kept the Strong and Co Cross Keys pub, 65 years ago, tied pubs have been debated. There is nothing new in that. In a slightly imaginary world, a white van would arrive with a delivery and the following exchange might take place. The van driver might be asked, “How are you doing?”, and the driver might say, “I’m doing okay. I’m getting £1 an hour more because I only work for Fred”. The reply might be, “Something should be done about that”. So will go the flashes of recognition but there will not be much public debate. I look forward to subsequent stages and, since all three main parties will in general be agreed, your Lordships can be sure that there are several things in the Bill that will not work well.

17:24

[The Earl of Lindsay (Con)]

My Lords, I welcome the Bill in its many parts. I particularly welcome Part 2, having had a long-held and active interest in better regulation. In that context, I should declare an interest as a former member of the Better Regulation Commission and the Risk and Regulation Advisory Council. I am at present a member of the better regulation strategy group, which advises the body chaired by the noble Lord, Lord Curry—the Better Regulation Executive. With this background, I shall talk about the four measures to which he also referred, which are set out between Clauses 17 and 34. The first is the proposed duty on Ministers to appoint an independent small business appeals champion to each national non-economic regulator. Driving greater efficiency, accountability and transparency into the interaction between regulators and those they regulate has to make sense, as does having a simpler, more effective, more transparent, less costly and better understood series of processes by which small businesses are able to challenge regulators’ decisions and behaviour.

For both the small business community and government to be confident that regulators are delivering against the goals relating to appeals and complaints set out in the new statutory regulators’ code is a positive step. Equally, ensuring that regulators have appeals and complaints processes that work well, are fit for purpose, rectify wrongs with minimal delay and are sensitive to businesses, in particular small businesses, will help to address any inefficiencies and unintended outcomes arising from the implementation of regulations.

The second measure I welcome is of very much greater significance in terms of the breadth of the benefit it will bring to the business community and civil society. This is the proposed duty on the Secretary of State to publish a business impact target, similar to one-in, two-out, for the duration of a Parliament. I believe that the one-in, one-out, and now one-in, two-out, approach has been and is working well. It is providing a powerful incentive on departments to measure, reduce and offset new burdens on business. It is important that future Governments maintain this progress and ensure that the regulatory system is as streamlined as it can sensibly be and delivers desired regulatory outcomes as efficiently as possible. I therefore wholly endorse a statutory requirement that the Government should publish an overall target for the economic impact of new legislation for each parliamentary term as well as a mid-point milestone target. I endorse that there should be transparent reporting of the burdens on business arising from new regulations and that the reporting should be underpinned by robust independent verification. The current Regulatory Policy Committee has proven itself to be very effective in providing robust independent verification, and this Bill rightly ensures that the Regulatory Policy Committee or a similarly capable body will continue to do so in future. I equally endorse departments being subject to annual and final-year reports that include assessments of: actions taken to mitigate the impact of new regulations on small businesses as part of the annual and final reports; and instances of gold-plating as part of the same reports.

The third measure that I welcome is the proposed duty on Ministers to ensure that, where appropriate, all new regulations affecting business will contain a statutory review provision on a five-year cycle to ensure that regulations remain effective and necessary and that businesses are not subject to unnecessary burdens. I recall that it was a continuing concern of the Better Regulation Commission that too little legislation and too few regulations were subject to post-implementation scrutiny and the benefits that can arise from such a process. The causes of better regulation and good government are both well served through regular reviews that assess the extent to which the original objectives of regulations have been achieved, and if not, why not; and whether those objectives remain appropriate, and, if so, whether they could be achieved in a less burdensome way.

This proposal is especially welcome in the context of the Deregulation Bill, which is currently before the House. Two important lessons arise from the Deregulation Bill. The first is that seeking to retrofit better regulation and deregulatory principles to the stock of existing legislation where there are no built-in reviews is a much more difficult and time-consuming proposition than seeking to improve the flow of new legislation where one can embed such principles at the start. The second lesson is illustrated by the sprawling nature of the Deregulation Bill, which shows just how widespread and inherent the need is to be able to revisit regulations and revise them as and when necessary. All legislation and all regulations, however well intended, intelligently designed and shrewdly enacted at the outset, have the propensity over time to become the cause of inefficiencies, anomalies and other consequences that were never originally intended or anticipated.

Relying on the occasional so-called portmanteau Bill to address regulations that are no longer fit for purpose, as is the case with the current Deregulation Bill, is an inefficient way in which to tackle an inevitable problem. However, embedding a rolling statutory review provision on a five-year cycle, as is proposed in this Bill for new regulations, is altogether a smarter, more intelligent and more efficient approach to updating and correcting regulatory inadequacies.

For a similar reason, the final measure I shall briefly touch on is the intention to create statutory definitions of small and micro-businesses so that, where appropriate, those two crucial sectors can be exempted from regulations that are judged to be disproportionately burdensome. Ensuring that all new regulations affecting business are not only reviewed regularly, but that small and micro-businesses in appropriate circumstances can also be exempted, has to make sense. I look forward to seeing this Bill have a successful passage through this House.

17:31

[Lord Snape]

My Lords, this is indeed a long and complicated Bill, in many ways, that has been welcomed from both sides of your Lordships’ House. As has also been said from both sides, it is rather timid in some areas, a couple of which I intend to touch on in my contribution.

I was struck by the comment earlier from the noble Viscount, Lord Eccles, who, if I may summarise what he said, suggested that when all parties agree, invariably there are problems as far as legislation is concerned. The view was often expressed during my time in the Whips’ Office—that somewhat cynical apparatus of state, if that is the right term, in the other place—that gloom would descend if it was visibly apparent that all sides of the House were united on a particular issue. That was largely on the grounds, we felt, that if everyone agrees, as the noble Viscount said, it probably will not work.

However, there are matters within the Bill that people do agree on and that I hope do work. The late payment proposals are welcome and overdue. The fact is that small businesses in particular have great difficulty in getting their money out of larger companies, which often behave in a way that they would not tolerate from their own debtors. The attempt within the Small Business, Enterprise and Employment Bill to bring them to heel is more than welcome. Similarly, on zero-hours contracts my noble friend Lord Mitchell, who is not in his place at the moment, spoke vehemently about the need to abolish such contracts, particularly the exclusivity parts of those contracts, which indeed should have no place in the modern workplace.

I want to concentrate the bulk of my—hopefully brief—remarks on Part 4 of the Bill, on the future of pubcos and, in particular, the relationship between some of the pubcos and their tenants. All of us who take an interest in these matters will be aware of the pathos of the sad cases involving many tenants of pubcos. Many of them have written, I know, to noble Lords on both sides of the House about the problems that they have had. However, at this stage I should perhaps issue a disclaimer about my current physical appearance. I would like the House to bear in mind that the bruises and black eye that I suffer at the moment came as a result of medical intervention rather than occurring on licensed premises. So that is not the reason why I shall express the view that I do.

I would sum up the problems that many tenants of pubcos have by quoting an e-mail that I received in the last few days from a couple, Dawn and Michael Shanahan, who run the Bulls Head in Old Whittington near Chesterfield—not a part of the world I know particularly well. I received their assurances that they did not object to their names and address being heard during the course of our debate. They talk about their relationship with the pubco Enterprise Inns:

“Lord Snape,

Our story is short but not very sweet”—

it was Mrs Shanahan who sent the e-mail.

“I have lived in the village all my life. I am now 60 years young. When the Bulls head came up for lease 6 years ago we decided that we could bring it back to life as a thriving village community pub. I left a job with the ambulance service and my husband retired from 40 years joinery. We didnt count on any person in this world being as conniving and devious as enterprise are. Our plan was to run the pub for 8 years and then sell the lease on, what a joke that turned out to be!!. We have put all our money, time and energy into trying to run a business that had no chance of success from the beginning. The whole model is designed on people sinking their money into a pub, failing and reeling the next unsuspecting victim in. We have survived for the whole of our time here by robbing Peter to pay Paul. We work all the hours ourselves, we dont take a wage and are now totally wiped out and skint, we have no option but to walk away with nothing but leaving enterprise with a cleaner, better maintained pub for the next person to add to, or to undo all the work we have done, enterprise dont really care as long as the money keeps coming their way.”

“Because we went to our bdm”—

their regional manager—

“asking for help and making it clear we have no more money to offer they came up with a proposal. They would loan us the money to … refurbish the pub and put us on ‘the beacon Scheme’. This would have made us managers and if we didnt hit a certain amount of barrelage a week would have given them the right to give us 8 weeks notice to quit. So they were willing to loan us thousands of pounds knowing full well we would not be able to pay it back. That would have left us homeless but still paying for a newly refurbished pub!. When we refused their answer to us was to cut our credit off. So even though we didnt owe them any money we now have to pay for our beer before they will deliver it. They deliberately put you in a position where you have to buy out of tie and then fine you and remind you that you have broke your terms and conditions of your lease. We are desperately trying to hold on until after christmas. Whatever happens within the law now, will be too late to help us but our stories must make a difference and stop these unscrupulous business practices that ruin peoples lives. I am crying as i write this because we have been so naive and trusting and have put our heart and soul into this Pub that has been our home. We have nothing left but debt to look forward to and will be coming out feeling like the worse failures. Please stop these people”.

I think that summarises what is happening as far as relationships between tenants and pubcos like Enterprise Inns and Punch are concerned.

I have a personal story before I sit down. My own daughter and son-in-law ran a pub, an Enterprise Inns pub called the Red Lion in Longdon Green in Staffordshire. They invested all their life savings into the pub—an almost six-figure sum. Like Mr and Mrs Shanahan, when occasionally they had problems paying their bills, the pubco stopped delivering beer, leaving them with no choice—they cannot get beer from anywhere else—but to buy out of tie. They were then fined £500 a time by the pubco. My son-in-law was badly beaten in the pub by a couple he had befriended previously one New Year about seven years ago, and he has never worked since. In the three months that he was in intensive care, Enterprise Inns expressed a view to my daughter that they “had no duty of care to any publican”. My daughter and son-in-law eventually left the pub, literally with nothing, and my son-in-law will never work again. Of course, someone else then took over the tenancy of the Red Lion in Longdon Green, left after about six months and the building was then sold to another company. It has since been refurbished and is a going concern as a restaurant and pub. That is how tenants of the pubcos are being treated.

Although I am grateful that the Minister opened this debate saying that the Government were prepared to accept the amendment from the other place, I would like more clarification from her about any future consultation before these particular clauses— Clause 40 and the succeeding clauses—are redrafted to ensure, as I indicated in a question to her earlier, that the pubcos will not be allowed to turn back the clock and behave in the way that Jeremy Paxman in the current issue of The Spectator this week describes:

“Publican after publican has been telling the same story for years, of spivs from rapacious ‘pubcos’ driving them to penury through a beer-buying arrangement more suited to the truck shop on a slave plantation”.

It is some years since your Lordships’ House passed the Truck Acts, and it is about time that we passed another Act outlawing some of the practices of the pubcos. I welcome the clauses from Clause 40 onwards, although they go only so far, and I hope that the Minister can assure us that there will be no attempt to turn back the clock and allow these nefarious practices to continue.

17:40

[Baroness Byford (Con)]

My Lords, I would like to make a short contribution to this important Second Reading. Rather than repeat many of the items that have been raised by other noble Lords, the areas that I shall concentrate on are late payments; broadband; pubs and work experience; encouragement and enterprise; farm businesses; and regulation.

The Bill is to be welcomed. Among other things, it outlaws a number of practices that are difficult to prosecute because, while clearly wrong, they are not statutorily illegal. I believe that some of them contain unintended consequences of legislation passed by previous Parliaments that were formed of and staffed by people who were basically straightforward. We shall need to be aware of our own unintended consequences as our scrutiny of the Bill progresses. At the same time, we should not create laws that are too easy to amend without proper debate and the ability to alter the official proposals. The use of the affirmative procedure is welcome in many cases, but I have doubts about applying it to amend at some time in the future the purposes of a piece of legislation, as reflected in Clause 8, which will be passed today when we finally have the Bill.

Bearing in mind my farming interests in a small farm business, I am particularly pleased with the clauses that should have a positive impact in rural areas. I am pleased to see the proposals on streamlining company registration that move to make it easier for the residential landlord to allow a tenant to run a business from home. As the cuts bite, as they have done over recent years, the plight of rural dwellers dependent on public transport worsens in many rural areas. I believe that these moves will make it easier for numbers of people to work in their own village instead of having to travel into town.

Farming directly employs some 464,000 people as a small part of the very important food industry as a whole. Some 56% of farms surveyed in 2012-13 have diversification on them. However, I should like to raise a general query about the timetable for the introduction of a streamlined system. Is the deadline of 2017 sufficient for the computer system specification, the tender process and then the development, testing and final approval prior to installation and rollout with regard to new systems? Perhaps the Minister will comment further on this aspect when she comes to wind up.

The change of definition for small and micro businesses makes sense, but I have questions about the effect on the numbers involved. Businesses will be reclassified to their disadvantage or advantage, so is there any danger that some at the margin will fall in and out of a particular classification as their turnover fluctuates? This last point may particularly affect the farming community, where employee numbers may tend to stay the same but the prices obtained for their output can vary widely. The annual statistics on farm incomes reflect this aspect.

Many noble Lords have spoken in great detail about the Pubs Code. I will therefore not go into it but I take up the comments about flexibility from the noble Baroness, Lady Harding, who at the moment is not in her place. Having had two grandchildren who worked in pubs to earn money while they were at university, I know that the experience of getting work in them is hugely beneficial. I realise that there are other aspects to employment, but the point should not be lost that giving someone that opportunity to work in the first instance is very valuable.

I turn to late payments. In many cases, sadly, small businesses are totally dependent on large businesses paying their dues at the right time. My late father-in-law ran Byford’s, which sold socks and sweaters. It started as a very small company at the turn of the 1920s, when he employed three people, and ended up as a company employing 2,000 people. He used to say of his competitors or the people that he was supplying, “Could you at least put my invoice into the hat so that I might have a chance of getting paid at some stage?”. I suspect that that is something I shall always remember. I suggest to the Minister that that message should be passed along to other government departments, because public procurement is clearly one of the big offenders. That is something that we should not lose sight of.

Another big problem for those living in rural areas is the whole question of having rural broadband. I am sure that some noble Lords who are based in urban areas cannot believe that there are still areas in the countryside where broadband is just not available, let alone at the speed of two megabits per second. I believe that the last 10% of areas that do not have broadband still need to be connected. I wonder if the Minister is in a position to tell us any more about that, because any small business has a better chance of succeeding if it is attached to broadband. You can operate anywhere in the country if you have access, but if you do not then it is very difficult.

I turn to regulation. I follow the noble Lord, Lord Curry, and my noble friend Lord Lindsay in support of the necessity for regulation, but it should be risk-assessed, proportionate and relevant. Where it is not, and where it has been surpassed, it should be done away with. I congratulate them on the work that they have been doing but there is much more to do. If I kept within my farming context, there are still some items covered by the Macdonald task force that have not been fully concluded. Again, I hope that they will not get lost because this new Bill is coming into being.

I want to pick up the theme of the right reverend Prelate, who spoke about the input of churches. I would like to give two examples of ways in which we can stimulate and help people to get started on the first rung of the ladder. I give them very humbly; they are fairly small but both relate to agriculture and the countryside. I cannot see anywhere in the Bill—I am not asking for this, but I think we should recognise it—a provision to urge individuals, charities, trusts and businesses to encourage apprenticeships or give start-up loans. I am not calling for this to be included in the Bill, but we should at least recognise it. I shall give two examples. The first is the Prince’s Countryside Fund, which gives grants to projects that support people who care for the countryside. Grants of up to £50,000 have been given and since 2010 they have aided 87 projects, helping some 64,000 people. In the overall global context of our debate today that might seem quite small, but one success then goes on to help someone else.

The second, more recent example that I share with noble Lords is the newly formed Henry Plumb Foundation, which in the past 18 months has helped 18 young people who have come up with ideas about what they could do by giving them small grants. More important than that, though, was the fact that they were allocated a mentor as well. So they started with a small grant but they did not get the rest of their grant until their mentor was happy that their business would succeed. I commend these examples to the House because they are but one small way in which we could do more.

I commend the Government on bringing the Bill forward. There are many good measures within it and I look forward to taking part in the debates that follow.

17:49

[Lord Hunt of Chesterton (Lab)]

My Lords, I welcome this opportunity for Parliament to revise its legislation on small businesses and enterprises and to examine the important implications for employment. It is a pleasure to follow the noble Baroness, Lady Byford, and, in particular, her remarks on rural small businesses—some of which I visited recently in Wales—and on the issue of green energy and its difficulties and opportunities for businesses. Although the Bill is important, it is, as comments made on this side of the House have revealed, quite timid in addressing the need to greatly expand UK business and exports and use small companies to advance technology everywhere.

I have experience of setting up a small high-tech company, in Cambridge. The company has grown slowly—which is not a bad thing—over the past 29 years. A notable feature of the UK since the 1970s is that many professionals, including academics, have found that setting up small companies enables them to apply their knowledge and experience more effectively than would work as a consultant or in a large company. I saw a similar situation back in the 1960s at MIT in the United States. Many people learnt from and were stimulated by what happened there. The Cambridge phenomenon was, of course, supported by the universities, and eventually by all sorts of other people, even colleagues in the Labour Party. There was a rather amusing joke. People in the Labour Party said, “If you bring high-tech into Cambridge, it will turn Cambridge into an inland Bournemouth”—if you can imagine such a thing. In fact, this whole journey has been considerably more exciting than an inland Bournemouth.

Many of those companies were set up by members of the Labour Party, and the Labour Party broadly supports the principle of the Bill. As was said earlier, however, much more could be done. One remarkable example of doing more is—without referring to people who are still alive—the late Bob Edwards FRS, who was the initiator of test-tube babies and the founder of the Bourn Hall Clinic. He did many other things at the same time: he was chairman of Cambridge City Council’s finance committee, for example. The previous Labour Government introduced financial measures that considerably helped small companies, especially tax relief on research as well as improved maternity and paternity allowances, which are extremely important for small companies. They also improved redundancy payments to employees of dissolved companies.

I would also point out—I think that this view is shared by noble Lords on all sides of the House—that British red tape is as nothing compared with Italian red tape or red tape in some other European countries. I was recently in Rome and heard horror stories about the difficulty of setting up a company in Italy. In this country you have only to put down a couple of quid and off you go. As the process is much easier here, I do not always completely follow all the moaning and groaning about it. Compared with other countries, it is relatively speedy here.

Another aspect of small enterprises which I have not heard mentioned this afternoon is that many small companies are charitable or not-for-profit organisations—which are, of course, also limited liability companies. Those organisations are often very effective in working with Governments, legislators and the public, and the Government frequently use them to promote their policies, often abroad. However, as I and some of my colleagues know, life in such companies is quite precarious. Some of them become insolvent, so the rules of insolvency are relevant to them as well.

Many small companies are based on innovative ideas, services and products, which they provide to government, government agencies and large businesses. That is why it is important that we should consider the question of payments. There are many situations where smaller companies compete with larger companies and even with government agencies. In such situations the large companies sometimes want to get a government contract and will use their powers to do so. Another aspect is that they do not always want to pay promptly. It is important that government departments ensure a level playing field when large and small companies bid for important contracts because small companies do not have the financial resources of some of the larger ones. Sometimes there is also unfair competition between small companies because of differences in the subsidies provided to them. Some small companies are based in public sector organisations or universities while others pay rent in commercial premises. There should be more openness about such information as it is important when government provides contracts.

In Clause 3, the Secretary of State is required to ensure that payments from large to small companies are prompt so as not to stress or even bankrupt smaller companies. Clearly, that should be supported, and it is welcome—but it could go further. The Secretary of State should also ensure that payments made by government departments and agencies—including European and international government departments, such as the European Commission—should be prompt. My experience is that UK departments are rather better than some of those international bodies. However, there are examples of payments on European Commission contracts being delayed by 12 or even 24 months, which has been absolutely devastating for some of the small companies involved. The Government should look into that just as much as they should look into UK practice. The reason that the European Commission has given for those delays is that it deals with many small companies from many different countries and it does not pay out until every company has filled in every dot on every form. That is not necessary. It is equally important that there should be greater clarity from such international bodies about when and how decisions on contracts are communicated to potential contractors, who may be waiting, and have their resources waiting, to participate in projects. Delays and uncertainty can also bankrupt small companies, including non-profit companies.

If the Government want UK small businesses to compete internationally, it is also important to insist on good practice internationally. Clause 10 refers to the growth of UK exports and the fact that the provision of better information can contribute to it. The clause could also be amended to ensure that the Secretary of State and all relevant government departments are more open to foreign customers about services provided by UK companies to the UK Government and their agencies. Foreign customers currently have great difficulty in obtaining objective technical information about the services provided by UK businesses. For large companies, that is not necessary; but small companies want to be able to say to prospective customers that the information can be provided by BIS or the relevant departments or agencies. Currently, that is not available. Some information from previous contracts is now on the web but the technical information which clients need is often very difficult to obtain. Indeed, some government agencies are prevented from providing such information. By contrast, the European Commission trade commissions in foreign countries will provide that information when it relates to EC contractors.

My last point concerns the issue of insolvency, an issue which is dealt with at the end of the Bill and is important for high-tech companies. Many high-tech companies are formed and many become insolvent—it is a chronic situation. The need to have Chapter 11-type arrangements here to enable our small companies to avoid insolvency and continue trading has been raised both by the Financial Times and by the noble Baroness, Lady Wheatcroft, in our discussions yesterday. I recently saw how such arrangements worked in France, where a high-tech company which provided high-level environmental services to most cities in France became overextended. Such a situation in Britain would have resulted in the collapse of the company. In France, however, the Government stepped in; arrangements for creditors were arranged for several years; the service continued, and the technology is developing. In the UK I recently visited the law courts, and seeing 70 companies going down every 30 minutes is a pretty sombre sight. With some assistance or investigation some of the value in those companies could be saved. BIS could provide that kind of information.

Finally, Part 10 addresses an important aspect of insolvency, when the employees become redundant. Current legislation makes the compensation dependent on the payment rates of the staff. In some cases where the company descends into bankruptcy, the payments to the staff may well be less than the minimum wage. Surely the redundancy payment by the Government’s Redundancy Payments Service should be based on minimum wages. That is not allowed for in the Bill but I strongly recommend it.

18:00

[The Earl of Lytton (CB)]

My Lords, I very much welcome this Bill. As needs must, I declare my interest in local government, particularly in the parish and town council movement. I am also a small business person; my professional practice as a chartered surveyor is a micro-business. The only other interest I ought to declare is that I have one recently graduated, job-seeking son, who is still at home; in that sense I share the comments of the noble Baroness, Lady Byford.

There are many things that I will address in my comments here, albeit briefly; but it is quite probable that I will not return to all of them later in the progress of the Bill. The first one is access to finance. It is my experience that businesses with assets but few ideas get ready access to finance, while those with ideas and no assets do not. Therein lies a disconnect. That is why we have lots of property development and residential investment interest with fewer high-tech start-ups. Development finance for small businesses is therefore still difficult where it ought to be better.

On electronic cheque cashing, my interest derives from what I have discovered in recent months about fraudulent digital evidence used in the courts, about which I have spoken in the past. I simply want confirmation from the Minister that there will be safeguards against the digital alteration of scanned cheques, the paper copies of which often contain many security devices such as UV printing, holograms, chemical reagents and microtext, none of which readily replicated on a scan.

On procurement, the All-Party Parliamentary Group for Excellence in the Built Environment, of which I was privileged to be a vice-chairman, produced a paper on the subject in 2012. The first thing to note is that lowest cost is not necessarily best value for money, even though it may be seen in some circles as best value. In that report we made a lot of recommendations about procurers being better equipped, identifying what they needed and the best way of procuring it, determining whether they were getting what they needed, and allocating sufficient resources to quantify and reduce the risks. Bear in mind that often these were municipalities, trustees or school governors, who did not have the relevant expertise in procuring large-ish—for them—projects.

We made a whole series of recommendations about standards, relating primarily to construction. There was an item about selecting teams and getting the best performance from an integrated performance arrangement, recommending that the teams should be based on a balanced scorecard so that you could look at the bids against specified criteria, of which sustainability would be one. I am glad to see that the Bill refers to prequalification criteria. The object, of course, is not to squeeze out the little man but to produce increased efficiency and better, more durable, reusable, longer whole-life spans for our projects. There are other impediments, such as high insurance standards imposed on potential small business bidders, or perhaps—more appropriate in my case—very high levels of minimum professional indemnity insurance cover. These need to be looked at to make sure that they are reasonable and proportionate.

All I will say about the Pubs Code is that over the years I have seen a number of leases relating to these lettings. Almost without exception they are absolutely appalling. It is not just an issue that might be disposed of as being between a pub-owning company and a tenant, both of whom might be assumed to be consenting and adult parties. It is a mismatch of relative strengths. There is a community interest here as well in a thriving facility, not the shackling of a hapless tenant to somewhere not far short of eternity.

I have a comment to make on company registration. I welcome the proposals for greater transparency in this area, but I draw the Minister’s attention to those mutual and co-operative companies which are registered via the FCA in Canary Wharf. It appears that they can still hide behind the fact that it is prohibitively expensive and awkward to search for and get access to their information, as compared with the relatively free and low-cost access to information from Companies House data held in its various offices in Belfast, Cardiff, Edinburgh and London. I am sure that many of these mutual and co-operative companies are entirely worthy, but the suggestion has been made that some of them may not be or that they may be used for shielding criminal or terrorist activities. In a debate on Ukraine about a year ago, I asked whether the Government could be sure that ill gotten gains from that country were not being invested in UK government bonds. I was told that the information was not available, and I accept that. Perhaps I could also suggest that a lack of political will and the potential for political embarrassment might have been an impediment.

I welcome the removal of exclusivity clauses in zero-hours contracts but I continue to feel that the regulatory impediments to employment require further work, and I will return to that later.

The provisions relating to whistleblowers are welcome. The present proposals, however, are embodied within employment law and I am satisfied that that is really not where they should be. They ought to be independent of the employment environment, of line managers and of first-stage scrutiny within the company. Indeed, the matter complained of may not be an employment issue as such. The organisation Public Concern at Work has sent me a briefing at my request. The noble Lord, Lord Willis, who is a great champion of this cause, is not in his place today, but I know that he takes a great interest in this issue and I am sure that he will come back to it in Committee. The Bill does not deal with gagging clauses, disclosure by legal professionals or protecting a whistleblower from sanction, blacklisting, career destruction and so on. There ought to be some non-discrimination provision, perhaps along the lines of sex or race anti-discrimination laws. There needs to be a per-sector series of industry ombudsmen to protect organisations from false accusations or malicious complaints. It is important that those responsible for bad practices will not for ever continue, safe in the knowledge that few will ever dare snitch on their organisation.

Some things are missing from the Bill. I would like to see a proper dispute resolution service so that businesses—small businesses in particular—can bypass or in some way overcome the far too expensive recourse to normal legal processes though the courts. Even mediation, I fear, is being hijacked, in its commercial sense. We need something locally based, acceptably priced, reasonably quick and conclusive, delivered by people who know what they are talking about and cannot be manipulated through the rules and procedures by a powerful and well funded party against an honest but impecunious one. A nation that allows access to justice to be prejudiced in the way in which I see it fails to hold the candle up to a belief in fair justice and the rule of law. It is also a matter of great economic inefficiency.

I refer again to empty rates. At the moment, this is having seriously negative effects on business premises. HMRC does not appear to be cognisant of the fact that it is producing a significant skew, haemorrhaging people’s incomes and making properties difficult to let or sell, while all the while high empty rates have to be paid. Most billing authorities are unable to remit the charge for financial reasons. That is something that ought to be dealt with here. Then there are planning and development and the upfront compliance costs before you can expect a planning application to be put through—the environmental stuff, the access and design criteria and everything else that goes with it. This is putting the cart before the horse. Of course, fewer and fewer people can do this, although everybody is in the hands of developers.

There are many other things that I would like to mention, but it would be better if I wrote to the Minister. I commend her for introducing a very useful Bill, and I hope that between us we can improve it as it goes through the House.

18:11

[Lord Flight (Con)]

My Lords, I add my congratulations to the noble Baroness, Lady Harding, on her excellent and, if I may say, charming maiden speech. Seeing the noble Lord, Lord Wakeham, in his seat, perhaps I may just mention—I declare an interest as a director—that Metro Bank has solved the issue to which he referred. You just present your driving licence and that plugs into a system that tells the bank more about you than you know; then you can open an account in 10 minutes—so the ridiculous procedures that other banks have are entirely unnecessary.

I support what the Minister said about entrepreneurship in this country. I have never known more active entrepreneurship, but it is not just happening in London and the south-east—it is all around the country. Young people are being brave and courageous enough to start their own businesses when in my generation we were told we had to go and work for the Civil Service or a large company. The universities are becoming, as they have been in the United States for many years, a cradle of new business, including new technology businesses. The numbers are immensely impressive. Over the past two years some 1 million new companies have been formed. Not all of them are necessarily actively trading, but something immensely exhilarating is happening in this country now.

I declare my interests as in the register. There are a lot of good things and good intent in this Bill, and things that could be added, as the noble Lord, Lord Hunt, and others have said. I very much hope that they will achieve their objectives as they become law.

However, I want to speak about something that is unsatisfactory in the Bill and could be quite damaging. It is covered in Parts 7 and 8 and in Schedule 3, on public company registers. The requirement, as noble Lords will be aware, is that for shareholders holding 25% or more or having some form of control over the company, ownership has to be kept in a register and that register must be made public, recording what are called the PSCs. This is really a Treasury anti-money-laundering issue, and it sits ill in this Bill, which is about positive things, particularly for SMEs. Everyone is in agreement about what is needed in this area. Beneficial ownership should be available to the tax authorities, the police and the security authorities on any sort of investigation to do with crime, terrorism or tax evasion, and companies should also know who their shareholders are. My main objection to what is in the Bill is to the public aspect. It adds nothing to the objectives and, among other things, it casually breaches 200 years of company law in terms of this embodying and including private companies, which are thrown out of the window with no evidence that a public register will achieve anything. The Government have offered very little and perhaps no justification or consultation in thus destroying the right to privacy.

The requirements of the G8 and the G20 are that companies should know who owns them, not competitors, spammers or media folk looking for a good story, or others looking to misuse such information. In arriving at where we are, I criticise in particular the impact assessment project. It is unclear whether other options were proposed or considered other than that in the Bill, and I think that it amounted to a stitch-up. It does not properly assess the potential cost to individuals. One of my colleagues in the other place said that it was the worst impact assessment that he has ever read.

As for considering other possible options, the Crown territories have for a long time had a system where all beneficial ownership is recorded and made available to the authorities. That has worked extremely satisfactorily. The United States similarly has its own system. No case has been made as to why the register needs to be public or what is added by being public. Indeed, the impact assessment itself found that the public register’s addition of value would be precisely zero and that only 10% of respondents indicated that the proposed reforms would ensure that they knew with whom they were dealing.

The big hole in the proposals is that they cover only UK companies—non-UK companies are exempt. That aspect means that it is completely avoidable. We will see a migration of the ownership of investment in the UK from UK companies to UK branches of foreign companies. It is also potentially damaging to our interests in discouraging investment. Sovereign wealth funds, investors from the Gulf, Islamic and Chinese investors like to be discreet, and for them a public declaration of their ownership is often anathema from a business and cultural perspective. It is also costly to individuals and small businesses. Some 2.4 million companies will be affected and the estimated costs so far are £1.1 billion, but that is without any potential allowance for a proper verification system.

Interestingly, public registers are also not required by the FATF guidelines, although the FATF guidelines do require proper verification procedures. So rather ironically, given that the reason for these proposals is that they are to comply with the FATF, which will add a lot of regulatory hassle for people, the Bill will not comply with the FATF unless there is proper verification.

The Minister rightly applauded growing UK entrepreneurship and the growing number of small businesses in the UK. I believe that she mentioned a total of 5 million. Part of that growth is due to the UK’s policy of making it extremely easy to use UK companies—much easier than it is to use companies in most other western economies. I think the Minister said that she wanted to see incorporation made even easier. However, the proposals in the Bill add hassle, regulation and costs when using UK companies. I am particularly concerned about the position of entrepreneurs. They typically own at least 25% of their companies. Most of their businesses are small. They will probably not know that they are supposed to keep a public register and to make information on their ownership available, partly because it will often be recorded at Companies House anyway, but they will commit a criminal breach by not so doing. If they do follow this procedure, it will add another regulatory cost. It is a further hassle for the innocent law-abiding while the guilty can very easily avoid the requirements. I think that it is substantially the NGOs which have called for public registers. It is somewhat ironic that there are no comparable requirements for public registers detailing who controls NGOs and what other organisations have an interest in them. Indeed, in one or two cases, NGOs have been shown to have had exposure to terrorist funding.

I do not believe that what is proposed in the Bill is what the Prime Minister intended in his G8 pledge. The City division of the Law Society has objected to public registers and the British Venture Capital Association has objected to their impact on the small venture companies it represents. Surely what is needed in this territory—here the right reverend Prelate the Bishop of Peterborough and I agree—is international legislation. I urge the Government to consider delaying this legislation in order to promote a common model across the western world. As I have said, if this goes ahead, we will have something which is not effective in achieving its objectives. The sensible approach that has been followed in other jurisdictions is to require beneficial ownership registers to be kept and for these to be instantly accessible to the police, the tax authorities and the security authorities but for the registers not to be public. I am disappointed to be critical but I think that we have a dog’s dinner in this part which will not achieve its objective and will simply add regulatory cost and hassle for many innocent people.

18:22

[Lord Young of Norwood Green (Lab)]

My Lords, I thank the Minister for her contribution, to which I listened with interest. I also congratulate the noble Baroness, Lady Harding, who, unfortunately, is not in her place, on her maiden speech. I think it is an odds-on racing certainty that she will make a successful contribution to this House.

[Noble Lords]

Oh!

[Lord Young of Norwood Green]

It took a long time for noble Lords to appreciate that masterly piece of wit.

As I said, I listened to the Minister’s contribution but I want to redress the balance and mention what is missing from the Bill. We have heard a lot today about the flexible workforce and the need to ensure that we have minimum regulation. However, one of the most disturbing statistics I have come across is that only one in five managers of small businesses has any training at all. That ought to be addressed. It is no wonder that they have difficulty in recognising regulation. We tend to forget that, properly applied, regulation saves lives and stops unfair exploitation.

I cannot help recalling that when the Labour Government came to office in 1997 there was real exploitation. Before we introduced the minimum wage, you could go to work and earn about £1 an hour, or even less in some circumstances. Would anybody say nowadays that that was unnecessary regulation? If my memory serves me right, it was vigorously opposed by Members on the Benches opposite, who told us that it would cause massive unemployment. Therefore, we need to adopt a balanced view of regulation and set it in context. My noble friend Lord Mitchell reminded us that exploitation still exists in the form of unpaid internships quite apart from the other instances of exploitation—I do not mean to say this in a dismissive manner—that I hope will be addressed in the Modern Slavery Bill.

I also want to address what I describe as the Panglossian analysis of the noble Lord, Lord Stoneham, whereby everything is for the best in this best of all possible Governments, given that the deficit is shrinking and there is hardly any unemployment at all. I do not want to negate the significant gains that have been made in employment. However, we need to remind ourselves that some people in this still unfortunately low-wage economy have to have one, two or three jobs to survive, so everything is not as wonderful as it was painted by the noble Lord. We should also remind ourselves that in some parts of the country there are still very high levels of unemployment and disturbingly high levels of youth unemployment. I make those points because it is necessary to set this important piece of legislation in the right context.

Unfortunately, the noble Lord who described this Bill as a Christmas tree Bill has gone but that description amused me. If we get our way, it will be not just a few flashing lights and baubles but will have a bit more substance than that. If it is a dog’s dinner, I hope that it will be a nourishing one with all the right vitamins. No doubt, by the time the Bill has been through Committee, we will get it right.

I want to focus on the employment aspects of the Bill, covering employment tribunals, the national minimum wage and zero-hours contracts. In my view, if anything demonstrates that this Government have run their course and are running out of steam, it is the employment provisions in Part 11. The Government have done the minimum in this part that they thought they could get away with or that they could reach agreement on. I will deal with the points of agreement first. There are measures in the Bill seeking to limit the number of postponements that parties can be granted in a case, which we welcome, with judges being given the power to make cost orders where late applications for postponements are made. Based on my experience as a former practising trade union officer, I think those measures are sensible, as do others, such as the TUC, which points to the difficulties that witnesses face in getting time off work to attend hearings.

However, improving the process once people get to a tribunal will be no more than an academic exercise for those claimants who, frankly, cannot afford to pay the tribunal fees instituted by this Government. We should remember that you cannot even claim for unfair dismissal until you have worked for two years. What the Government have done with those fees is erect a barrier to justice for some of the lowest-paid people in the country. They have simply priced them out of the system. That is the reason for the 79% drop in employment tribunal claims that was referred to earlier. Women and low-paid workers in particular seem to be the principal losers, so parts of the Bill certainly need to be changed in that regard.

I also wish to address the education evaluation section of the Bill in Clauses 75 to 77. The Explanatory Notes state:

“Clauses 75 to 77 are intended to make the sharing of information between Government Departments and schools, colleges and other assessment centres easier. This is expected to have the following benefits: enable parents and students to make more informed choices concerning education and employment destinations; help providers of education and training to evaluate their effectiveness in delivering qualifications”.

As I have said on a number of occasions to this House, when I go to secondary schools to talk to 15 and 16 year-olds about their destinations in careers, my experience is that most are being pushed towards universities. I am not knocking that but we know how important it is for young people to understand that universities are not for everyone and that there are really good prospects in a vocational career. What the Government are proposing does not do enough to ensure that schools live up to their legal requirements to ensure that when they give career guidance it covers the full range of career and educational opportunities for young people.

As someone who enjoys the odd pint or so, I cannot resist having a little ramble around the tied pub and tenancy provisions in the Bill. The noble Lord, Lord Cope of Berkeley, who is unfortunately not here, mentioned the dreaded two words: Red Barrel. I was going to my local about 30 or 40 years ago—I dread to think of that now; it shows that I am now over 21. The pub, which is now long gone, was the Alma in Harrow Weald, where I used to enjoy a pint of Manns IPA. I protested at the bar and asked where Manns IPA pump had gone; in its place was the dreaded Red Barrel. We have CAMRA to thank, as the noble Lord, Lord Cope, acknowledged, for a fantastic campaign.

We undersell the glories of British real ale, served at the right temperature by a landlord who understands the importance of settling the beer and keeping the pipes clean. We should see it as our equivalent to “appellation controlée”; I mean that seriously because it is important. Not a lot of people know this but we now have more breweries than Belgium, which is an interesting but important statistic. This is an important area. At my current local, the Plough in Norwood Green, I discussed this issue with the landlord at a recent visit. He is a tied tenant who pays a significant amount for his beer, and he will be pleased that there is progress in this area. I am glad that the Government have seen sense because, if they had not done so, we know what would have happened.

I am conscious of the time but will end my contribution by drawing attention to the fact that this Saturday is an institution—I hope it is an institution; it has happened for the second year running—introduced by my honourable friend Chuka Umunna MP after a visit to America, where he observed Small Business Saturday as a means of drawing attention to the importance of small businesses. This Saturday is Small Business Saturday; so it is the duty of every Member of this noble House to make sure that they patronise one of their small businesses. I say that seriously. It makes a significant economic contribution and reminds people of the importance of small businesses.

I thank noble Lords for their sufferance of my contribution and look forward to participating in the proceedings on the Bill.

18:33

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, it is always a pleasure to follow the noble Lord, Lord Young of Norwood Green. He is always engaging. I shall come back to the pub in a minute but hope that he will not take offence if I gently remind him that one of the reasons for the high levels of employment is the flexible labour markets introduced by this Government. Some of the removal of flexibility that he was recommending, proposing or thinking about would reduce employment, which we all agree it is essential to preserve.

If one is 23rd in the speakers list, much of what one wants to say has been said already—sometimes more than once; sometimes several times over. However, like other noble Lords, I agree with and support the Government for what they are proposing. I have some questions that we shall wish to examine in Committee but applaud the general direction of travel. I want to make just three points.

First, I congratulate the Government on taking up the challenges of pre-pack administrations in Part 10. Pre-packs have been promoted as a way of saving jobs in the firm in question—and they may well do so. However, in my experience, the ability to write off debts often appears close to a fraud on the creditors. When the firm that has been pre-packed arises like a phoenix from the ashes, no one considers the position of the creditors in the firms that have lost everything. Job losses may have been avoided in the pre-packed firm but may well have been replaced by job losses in the creditor firms. Nowhere is this more important than in pre-packs involving connected parties. I am therefore very glad that the Government are going to tackle this aspect, and I look forward to discussing the details of this in Committee.

My second point concerns the procurement provisions in Part 3. I wrote a report for the Government entitled Unshackling Good Neighbours, which, inter alia, looked at the problems and regulatory burdens that inhibited the growth of small companies, charities and voluntary groups. It is not yet clear to me that the well meaning provisions in Clauses 38 and 39 will enable the Government to tackle the fundamental issues that too often put smaller companies at a competitive disadvantage. The noble Earl, Lord Lytton, referred to these. In particular, it is the innate conservatism of commissioners, for whom risk aversion is the default option. Of course, one has to applaud the objective, as explained in the memorandum that my noble friend on the Front Bench so kindly circulated, which is,

“to create a simple and consistent approach to procurement across all public sector authorities”.

However, we have been here before. Four years ago, the Merlin commissioning approach, designed to provide a common governmental template—originally devised by the Department for Work and Pensions—was then being rolled out across government generally. What has happened to Merlin; where has it gone to? Perhaps my noble friend could let us know, either by letter or when she responds.

My final point is about the pub tie, on which, as others have mentioned, the Government suffered a defeat in the House of Commons. I am afraid that I am going to have to upset the noble Lords, Lord Snape and Lord Young, because I was disappointed to hear that the Government do not propose to reflect further on this decision. The arguments are not as simple and straightforward as our colleagues down the corridor believe.

In making these comments, I have to recognise two things. First, in any dispute that can be broadly characterised as David versus Goliath, the British people will instinctively side with David. It is one of our most endearing national characteristics to want to stick up for the little man. Secondly, in any arrangement involving more than 20,000 people—and there are between 20,000 and 25,000 tied pubs—there will always be problems, difficulties or misbehaviours. While we need to deal with and remedy these, they must be set in context and proportion to the whole.

[Lord Snape]

I apologise for interrupting the noble Lord, but before he leaves that point will he at the next stage of the Bill bring forward some evidence from satisfied pubco tenants about how wonderful their relationship is with Enterprise Inns or Punch Taverns?

[Lord Hodgson of Astley Abbotts]

I shall be glad to bring forward some evidence. I have some here but, given the hour, I should not be talking about the Black Bull, Mansfield, which is one of the pubs on which I have some evidence for the noble Lord. We will discuss this at a later stage.

There are two types of integrated pub. The first, called integrated operators, are companies that brew beer and sell it through their own estate, whether managed by employees or tenants in tied pubs. They sell their beers also through supermarkets, free houses and off-licences, but their estate is an important route to market. The second group consist of what are known as pubcos. They do not brew any beer but buy it in, often from the breweries of the integrated operators. Their focus—which the noble Lord, Lord Snape, is driving at—is on rental levels. They are, to some extent, very specialist property companies.

Noble Lords may wonder how on earth this rather counterintuitive second group came into existence. As my noble friend Lord Stoneham of Droxford said earlier, it is the result of a decision of Parliament. The beer orders were designed to strip the breweries of too much market power, and the pubcos were the result. If our predecessors all those years ago had seen where we were going to end up, they might have considered it better to think of an alternative business model. If we do not revisit the decision to end the tie, our successors in 20 years from now may find that, far from this decision slowing pub closures, it may well accelerate them.

Before I get into the rest of my remarks, I need to remind the House that I was, until a year ago, a director of an integrated brewery. We had five breweries, two big and three small, stretching from Cumbria to the New Forest, and more than 2,000 pubs—500 managed and the balance tied in various forms.

Why is it that pubs arouse such strong emotions? In some large measure it is the result of the image that we have of a community—a point made by the noble Lord, Lord Bilimoria, earlier this afternoon. That community has three aspects: a church, a post office with a shop and a pub. We may not wish to use them much: we may go to the church on high days and holidays and for hatches, matches and dispatches; to the shop or the post office only to buy the milk when we have forgotten to buy it at the supermarket; and to the pub only for the occasional drink. However, we like them to be there. We also like them for the ambiance we believe they project. We all have our image of the ideal pub: the welcoming atmosphere, the cheery landlord dispensing pints and homespun philosophy over the bar. However, for reasons quite unconnected with the brewers, the pubcos or the tenants, the pub sector is under severe strain.

I identify three fundamental features behind this. The first is the rapid rate of socioeconomic change in Britain. Twenty-five years ago, the company of which I was a director would have operated probably a dozen pubs in Kidderminster, the home of the carpet trade. The carpet trade has gone and there are three pubs left. In areas of Nottingham, Leicester, Manchester, Leeds and Birmingham the increase in the Muslim population, who do not drink, leads to many pub closures. It is exceptionally hard for a publican who has put 10 years of his life into trying to build up a business to accept the inevitabilities of these tides of history.

Secondly, there is the inexorable rise of regulation and of cost generally. Noble Lords may not be aware that, for many pubs, business rates and council tax are more important items than rent.

Thirdly, there is the availability of low-priced alcohol in supermarkets. The average price of a pint in a UK supermarket last year was £1.13. It would be substantially less in the weeks leading up to Christmas and in the few days before a bank holiday. If any noble Lord can find a pub, tied or untied, that is selling lager at less than £2.50 a pint—more than double the price in a supermarket—let me know and we will go along to sample the wares.

These are trends that defy King Canute, so pubs are likely to continue to close. The reasons for closure may be portrayed as rapacious owners increasing rent, wishing to profit by turning pubs into houses or corner stores, but the tide is turning against the ordinary pub. To offset this trend, the pub has to offer an experience and value for money for its target market: maybe with food, with fine dining or pub grub; maybe for families, with play areas for kids; maybe for younger men, with Sky Sports and pub games; maybe for younger women, with more of a wine bar feel to the place; or maybe for pensioners, with cheap food, particularly at lunch. However, this all requires operational experience and capital resources. It is this that pub owners can provide. It is exceptionally difficult to find capital for all the sorts of things that are required to refurbish a pub—kitchen fittings, signage, fixtures and fittings of one sort or another—and it is the pub owners who can do this.

The balancing item is the tie. The brewery is assured an outlet for its beer and other drinks, though it should always be remembered that every bit of profit from the foods goes to the tenants alone. Remove the tie and you risk removing this ladder, by which many people have become very satisfactorily self-employed. No pub owner is going to invest many thousands of pounds—hundreds of thousands of pounds in some cases—in refurbishing a pub if the tenant can then walk away from supply agreements.

In an effort to lance this boil of suspicion about rents and treatment, some breweries have introduced a franchise agreement, which has been approved by the British Franchise Association. This means that the tenant is in exactly the same position as a franchisee selling hamburgers, pizzas or ice-cream. The Bill apparently proposes to ban even these arrangements. To do so only where they involve a pub and not, for example, a McDonald’s outlet, seems to me to be illogical, perverse and unfair.

My final word must go beyond your Lordships’ House to the wider world: the most important thing to do if you wish to save your local pub is to use it. If you do not, you will lose it whether it is tied or not. I look forward to some vigorous debates in Committee.

18:45

[Lord McKenzie of Luton (Lab)]

My Lords, I start by congratulating the noble Baroness, Lady Harding, on a sparkling maiden speech. We look forward to hearing many more. I had not originally planned to speak in this debate but was tempted by Christian Aid and its briefing on the Bill’s transparency provisions. I am grateful for its briefing and the follow-up information.

Before I address that subject, perhaps I can revert briefly to the contribution made by the noble Lord, Lord Stoneham, at the start of our deliberations. He waxed lyrical about easyJet. He was right to do so, but he might have mentioned that it has flourished in part by its partnership with London Luton Airport, an innovative public/private partnership developed by a Labour council.

As noble friends have already made clear, we think the Bill has generally been a missed opportunity and to be deficient in a number of key respects. However, we should be supportive of the thrust of these transparency provisions, although, as the right reverend Prelate the Bishop of Peterborough said, we wish to probe whether they go far enough. I am bound to say that I do not share some of the concerns expressed by the noble Lord, Lord Flight. The problem under consideration has been clearly set out in the impact assessment: the lack of corporate transparency over who owns and controls companies is facilitating illicit activity and undermining good corporate behaviour, eroding trust and damaging the business environment.

The scale of the problems and illicit money flows involved are truly staggering. In 2013 the EU considered the scale of criminal proceeds associated with money laundering and terrorist financing to amount to 3.6% of GDP—around $2.1 trillion. This includes billions of dollars lost to Africa. The human misery and lost economic opportunities resulting from all this beggar belief. Reducing the potential for these flows through the misuse of company structures will not solve the problem but offers one means of helping to counter it, particularly if there is international co-operation, a point on which I agree with the noble Lord, Lord Flight. The Government are right to pursue this.

This lack of transparency also facilitates tax avoidance and evasion. This continues to be one of the scourges of our time. We know that a global response is the only way effectively to tackle the challenges it presents. In this regard we acknowledge and support efforts considered by the G20 in September this year to complete progress on the base erosion and profit shifting project, to provide support for developing countries in preserving and growing their revenue base, and to progress the automatic exchange of tax information on a reciprocal basis. Some of the EU initiatives to rebuild trust in the international tax system have yet to bear fruit: the common consolidated corporate tax base is stuck in ECOFIN, but work goes on. We may hear more tomorrow about further measures on the domestic scene, but the EU is negotiating the anti-money-laundering directive at the moment. Can the Minister say what efforts are being made to include public registers in the final outcome?

Corporate transparency was, as we have heard, a particular focus of the G8 meeting held in June 2013 under the UK’s presidency. In determining to act, the G8 agreed that the lack of knowledge about who ultimately controls, owns and profits from companies assists not only those who evade tax but those who seek to launder the proceeds of crime. Each of the countries has published its action plan. In the UK’s case, we have the resultant legislation before us, which introduces the obligation to implement a central register and for this to be made public. Such arrangements will only be most effective if other countries follow suit. Perhaps the Minister might say a word about progress across the EU, and other G7 and G20 countries.

The Minister will also be aware that in 2013 the UK’s overseas territories with financial services centres committed to conducting consultations on creating registers of beneficial owners of companies and on whether to make them public. This commitment was matched by the Crown dependencies. The BVI, the Cayman Islands, Montserrat, Gibraltar, Anguilla, the Turks and Caicos Islands, Jersey and the Isle of Man have each held consultations, but none, according to the briefing that we have received, has published the submissions received, responded or set out a policy position. Bermuda seemed to have abandoned its commitment to consultation, and Guernsey has yet to hold a consultation. It is suggested that these territories account for some one-third of the world’s shell companies, which might explain their reluctance to proceed but the importance of encouraging them to do so.

At the end of April this year, the Prime Minister wrote to the overseas territories stating:

“I have welcomed your … commitments to work with the UK to promote the application of high international, including EU and OECD, standards and your action plan on beneficial ownership setting out the concrete steps you will take to strengthen your laws on financial transparency ... I believe that beneficial ownership and public access to a central register is key to improving the transparency of company ownership and vital to meeting the urgent challenges of illicit finance and tax evasion”.

We very much agree, but can the Minister say what continued engagement there has been with these territories and what, if any, progress is in sight in ensuring that the overseas territories and Crown dependencies meet their commitments? Unless they do so, the very legislation that we are considering in this Bill will be substantially undermined.

As for some of the detail, we note that the existing definition of “beneficial ownership” used in the anti-money-laundering provisions is to be adopted, setting a 25% test as the threshold. Some of the responses to the consultation expressed concern that this was too high a threshold and that it would be capable of manipulation so that a few could collude to obfuscate ownership of a company. The justification for the 25% is that it will be familiar from the money-laundering rules and is, anyway, the shareholding level at which a minority can block resolutions. We see the merit in that approach but want to test it further in Committee.

We also wish to examine how it might all work where there are tiers of overseas companies in a structure where those overseas territories have not signed up to any form of register. We support the concept that there is a responsibility on the beneficial owners, as well as on the companies themselves, to identify beneficial ownership arrangements, and that companies to be brought within the scheme properly include at least companies limited by guarantee, as well as limited liability partnerships. Keeping the register current, as the right reverend Prelate said, will also be an important task.

We note that there was some opposition to exempting companies required to comply with the disclosure and transparency rules, and we will need to understand the extent to which such rules effectively cover what the register will require. The Government are wise to keep under review the definitions of control, given the proven ingenuity of companies and their advisers to construct arrangements to circumvent the intent of legislation. We note that the Government say that they cannot extend these requirements to overseas companies because of EU company law directives, but can the Minister say whether this applies to overseas companies which operate in the UK as well as to those that do not?

The prohibition of corporate directors, which we support, is qualified to be subject to exceptions which will be introduced by regulations under the negative procedure. Such regulations can make different provisions for different parts of the UK. Again, this is something that we will need to probe in Committee to understand its extent.

The prohibition on the creation of new bearer shares and arrangements to eliminate existing bearer shares should receive our support. They are currently an instrument which makes it all too easy to disguise ownership.

These provisions are a small part of the Bill but, nevertheless, a very important part. They will help in the fight against crime, money laundering and tax evasion. We should recognise that they will not solve these problems and will be faced with huge efforts to negate and ameliorate their effect. It behoves us to scrutinise them as rigorously as we can to send them on their way as watertight as possible.

18:54

[Lord Leigh of Hurley (Con)]

My Lords, I add a very warm welcome to my noble friend Lady Harding. A friend who is a bit of a wag suggested to me that she has been elevated to this Chamber as a person who runs a business called TalkTalk, but through her maiden speech she has shown herself to be a great asset to this House.

I very much welcome this Bill, focusing as it does on small businesses, which, as has been said, amount to some 5 million enterprises employing some 24 million people and with a turnover in excess of £3 billion. In so doing, I draw your Lordships’ attention to the register of interests. Additionally, I am advising a pre-revenue start-up in the crowd-funding space, which will be relevant later on. Having said that, so far it is without any financial reward, but I live in hope and expectation.

I am concerned that progress is made with this Bill. It would be a great shame if it fell away because Parliament ran out of time before the election. The Bill has been welcomed by a large number of business bodies—in particular, the Institute of Directors, which specialises in this space, the BVCA, of which I am an associate member, and the Federation of Small Businesses.

It is pleasing to note, by way of background to the Bill, that in the last four years the number of small businesses has grown substantially and that, since the election, generally employment is up by 1.7 million. This means that since the election the employment rate has risen by 2.8%, while unemployment has dropped by over half a million. That is a great result for the coalition Government.

That has not happened by chance and it is no coincidence that this country has shown a dramatic increase in employment—greater than the whole of the rest of Europe combined. This has been brought about not just by economic success but also, as my noble friend Lord Hodgson of Astley Abbotts said, by changes in legislation to facilitate that growth in employment, such as this Bill and others.

I note that this is the first Bill ever brought forward which focuses on small business, and, as a partner in a small business, I am delighted to see it. My business and professional life has given me an insight into most parts of this Bill, so I apologise in advance if I stretch my remarks over most of it other than the part relating to the pubs adjudicator and the Pubs Code, in which, sadly, I have had no professional involvement.

The noble Lord, Lord Stevenson, whose excellent memory I must commend, will be pleased to hear that I have new areas to highlight and on which to bang a new drum in addition to those that I mentioned last time, but they do not include takeovers, which I believe are satisfactorily regulated by the Takeover Panel.

Looking at the finance side of the Bill, it is clear that, while high-street banks have provided the majority of finance to our businesses in the past, high-growth SMEs need alternative finance—as the noble Lord, Lord Kestenbaum, said—and London has become a world leader in providing it to the whole of the UK. We must make it as easy as possible for SMEs to operate and allow them to get the information that they need to access finance. We must strike the right balance between showing world leadership on transparency and regulation—on which I will say more—while encouraging external investors. I believe that this Bill strikes a sensible balance.

I particularly welcome the proposal for banks to be required to pass information to finance platforms in respect of customers who have been rejected. The Government have been extremely successful in encouraging challenger banks and alternative sources of finance for both debt and equity, and this has helped British businesses to grow. I am, however, concerned that the proposal is simply and only to allow banks to refer customers to software-based finance platforms. Typically, these platforms have a small number of lenders—roughly three or four—who interact with each separate platform, and that obviously restricts the potential borrower. In my opinion, borrowers need advice to access the full range of alternative lenders, which currently number around 130 or more in London alone. More importantly, they need face-to-face advice which clearly would not happen by simply transferring details on to a software platform.

The Bill seeks to give much more freedom to SMEs by forcing incumbent banks to share information fully, if requested by the customer. This would allow other banks, including the new challenger banks, to offer finance more competitively as they have a different view of risk. The more information available to them, the less risk they feel they would be undertaking, and therefore, the better terms they are likely to offer. High-street banks currently have a monopoly on that information. There is a lot of confusion in the marketplace on whether the banks are lending to SMEs. Major banks, such as Lloyds, for example, representing 25% of SME lending in the area of invoice financing, claim that they are lending to 80% of requests. On the other hand, it is very clear from talking to SMEs that in many cases they do not feel they are receiving the finance for which they applied.

This section of the Bill motivates the banks to list all their rejected applications where the applicant consents. That then means, first, that banks will take much more care before rejecting an application, as not only will it have a significant impact on their published success statistics, but by rejecting it they are opening the door to their own competitors. Secondly, the SMEs will now be exposed to many potential sources of finance, which should help them to not only achieve their goal but do so at a competitive rate. The marketplace for lending, combined with a much needed requirement to share bank-held information, could dramatically transform lending to SMEs within the UK. Access to finance is an issue that has been debated in this House many times before. The coalition’s excellent initiative to start the Business Growth Fund, start-up loan schemes, the British Business Bank and other organisations complement the direction of travel of this Bill.

Like my noble friend Lord Flight, one area of interest to me relates specifically to the transparency of companies. Clearly, generally speaking, greater transparency is welcome and the Prime Minister’s commitment to G8 in this respect has to be honoured—in particular, as has been said, in support of crime-fighting initiatives. My concern is that the cost to business of implementing these reforms could be substantial. For a regular business owned by one or two people, it would be easy, but there are many private companies that have been established for years which have ended up being owned by descendants of the original founders, and many of such companies’ shares are held in trust. The costs of establishing exactly who is the ultimate shareholder could run into tens of thousands of pounds per company.

There are wonderful examples in the UK of businesses currently run by the grandsons, great-grandsons and indeed, great-great-grandsons of the founders, and it would be a great shame if these businesses faced unnecessary administrative burdens simply because they have been around a long time and the shareholding has become diffuse.

It also seems to me that this is another example of the UK leading the way, possibly to our cost. I note that the disclosure regime is not extended to foreign companies operating in the UK, as has been noted by my noble friend Lord Flight and the right reverend Prelate the Bishop of Peterborough. As a result, the rest of the world can choose to preserve privacy while doing business in the UK, which is, of course, a significant loophole in trying to ensure transparency.

I would like to say a few things about persons of significant control and the PSC register. In particular, my concern is that all investors should be treated equally when it comes to being required to disclose. For example, in the case of private equity, it is clearly the GP—the fund itself—that exercises control over the businesses it invests in and, as such, stakeholders have a right to demand information from them. However, the investor base, possibly numbering in the hundreds or even thousands does not, and mandating disclosure there would be unnecessary, misleading and unhelpful for those stakeholders interested in finding out more about those who control the business. Thankfully the Government understood this position and have amended the Bill in the other place so that those investing in English limited partnerships do not have to make that sort of disclosure. However, I believe that it is crucial to extend this amendment to include other limited partnerships, in particular those established under the Channel Islands law, which is the conduit for most overseas investments into the UK.

Ensuring the continued attractiveness of investing through such partnerships for international investors will continue to encourage more capital to flow into the UK. While I can see that this information might be needed to fight criminality, I am not clear why it has to be available to a company’s competitors, customers and all sorts. Concerns have been expressed, with which I agree, that shareholder lists could be open to abuse if they are in the public domain in an unintended manner. I ask my noble friend the Minister to consider that any such register should not be made public initially, with information restricted to law enforcement bodies and then possibly to open the register fully to the public at a later time, once matters have settled down.

I have to say that I do not have quite the same experience as the noble Lord, Lord Bilimoria, in respect of insolvency. I am pleased to say that I have had limited involvement with the insolvency profession, but from time to time I have seen it in my professional career and I welcome the Government’s approach to bring a spotlight to this area. Generally, the direction of travel to provide greater competence to unsecured creditors is very welcome. I am not sure that abolishing the creditors’ meeting carries us in that same direction and I note that some amendments in the other place have led to the beginnings of a rethink. I certainly welcome mechanisms that compensate creditors for director misconduct, and I am pleased to see that administrators have been given the same powers as liquidators in certain circumstances.

It is, of course, appropriate to consider regulation of the insolvency business. I believe that the current system works quite well, but having the reserve power to establish a sole regulator if there are instances of abuse seems to be the right approach. Christmas, which will shortly be upon us, is traditionally a great time for retailers but also a time when many go to the wall. The experience of a well known electrical retailer two years ago has raised some valid questions about some professional practice in this area.

Similarly, the Government’s approach in respect of pre-packs is very welcome. To put it into perspective, every year some quarter of a million businesses disappear from the register of Companies House. Of those, 20,000 go into insolvency procedure, and of those, only about 600 to 700 are through a pre-pack. So the numbers are relatively small, but the public are right to be concerned when very quick deals take place and the subsequent owners of the business turn out to have been the same people who ran it into the ground only a few days before. I believe that the direction of travel of the BVCA’s turnaround code of conduct and, in particular, the Graham report, is the right direction. There are some specifics in the report which are, of course, not mentioned in the Bill, such as the requirement for a pre-pack pool. I have reservations about how that would work in practice. Other ideas, such as the requirement for the proper marketing of a business within a pre-pack process, must be right.

I appreciate that the Government want to see the impact of the Graham report before putting new legislation in place. Indeed, as the author of the report herself says, nobody wants unnecessary legislation, so again the creation of a reserve power to make regulations if things do not work out seems to me to be the right approach. A major concern to me is that the pre-pack proposals, while seeking to protect against abuse, fail to give employees, customers and creditors any comfort about the ongoing viability of the business itself. One idea for my noble friend would be, as part of a pre-pack, and possibly other insolvency situations, for a turnaround professional to be charged with the role of reviewing the business before administration and that professional ensuring that the management of the business is undertaken as intended after the pre-pack for the greater good and not just for themselves. To date the focus has been on Old Co., and I would like to look at New Co.

There is an extremely welcome section on employment. As I mentioned earlier, employment has grown dramatically in the UK and employers, in particular small businesses, must be given every assistance in feeling encouraged to take on more people. They will do so only if they are confident they can let employees go without huge penalties. No one likes letting people go, particularly in a small business, but it is sometimes essential for the health of the rest of the business. The employment tribunal system in the UK has dramatically improved through the changes made by the coalition Government, but a tightening up is needed to cut the costs and, in particular, reduce the delays, as envisaged in the Bill.

Similarly, the only way in which employers will seek to take on more people is if they are given the flexibility to employ people in a manner which suits their business, rather than the old-fashioned nine-to-five, 35-hours-a-week approach, which is simply inappropriate in the current workplace for most employers. I strongly encourage the Government to give employers and individuals the opportunity to take advantage of the flexibility of zero-hours contracts, while, of course, stopping any obvious abuses. It also seems fair to allow employees to work flexibly for a number of organisations—not just one—and I welcome the proposed changes.

Finally, it is interesting to compare the coalition Government’s approach to small business in the UK, which has been so successful, with the approach taken by the left-wing Government in France, which actually led to a demonstration by some 8,000 business owners on the streets of France yesterday in protest against their policies. That is unimaginable here but a stark warning to us all. I congratulate and pay tribute to the Ministers who have produced a Bill with so much that could help our economy grow. I wish it a speedy outcome.

19:10

[Lord Watson of Invergowrie (Lab)]

My Lords, I wish to speak in particular to Parts 7 and 8 and Schedule 3 to the Bill, an area that has already been covered by noble Lords. I hope that I can find something different to say. I want to start with a quote:

“Companies should know who really owns them, and tax collectors and law enforcers should be able to obtain this information easily, for example—through central registries—so people can’t avoid taxes by using complicated and fake structures”.

Those were the words of the Prime Minister who, as host, made corporate ownership transparency central to his theme when he spoke at the 2013 G8 summit in County Fermanagh. I have to say that he has been as good as his word, and it is very much to be welcomed that this Bill includes provision for a,

“register of people with significant control”,

representing as it does a major step forward in preventing people hiding criminal activities behind shell companies. This is something that is strongly supported by the general public, according to a recent ComRes poll for Christian Aid, which revealed that only 9% of the British public believe that company ownership should be allowed to be kept secret. I suggest that it would not be too demanding a task to work out what sort of people might be included in that 9%. Legislating for a PSC register in this way would deliver Commitment 7 of the UK’s Open Government Partnership National Action Plan 2013-2015. Although it is not something I do very often, I want to congratulate the Government on making the UK the first country to introduce a public register of the beneficial owners of companies.

Businesses play an important role in developing thriving societies across the world, but some companies abuse global corporate structures for their own gain. Secret ownership structures allow wealth to be hidden away, preventing useful investment and driving inequality. The way companies are structured is more often than not at the heart of how such illicit flows are facilitated, either through evading tax, money laundering or outright corruption. The cost to developing countries of this behaviour is quite staggering. It has been estimated that such countries may lose as much as $120 billion to $160 billion annually in tax revenue, a figure greater than the entire global aid budget.

Many companies and individuals dodge taxes by keeping their money in a complex network of trusts and so-called shell firms, whereby companies are hidden inside each other without revealing their true owners. These are often based in secretive tax havens, and it is secretive company ownership that makes most cases of large-scale corruption, criminal money laundering and terrorist financing possible. A World Bank review of 213 big corruption cases from 1980 to 2010 found that more than 70% relied on anonymous shell entities. Company service providers registered in the UK and its Crown dependencies and overseas territories were, to our shame, second on the list in providing these shell entities. I shall give just one example. An anonymous UK company owned the Ukrainian presidential palace of the vilified and ultimately overthrown Viktor Yanukovych.

Unlike the noble Lords, Lord Flight and Lord Leigh, I urge the Government to tighten the actions they have taken in this regard rather than loosen them. I want to see the Government build on the commitments in the Bill and I believe that there are various actions they could take. As has been stated by other noble Lords, the EU, other G8 and G20 countries are yet to introduce public registers, although progress is being made. I would call on the Government, using their own example, to do all they can to persuade others to introduce public registers. Surely it is deplorable, as my noble friend Lord McKenzie said, that despite the pressure exerted on the UK’s Crown dependencies and overseas territories at the 2013 G8 summit and since to introduce such public registers, not one has yet done so. Ministers should do all they can personally to persuade the dependencies to introduce public registers so as to shine some light on to what are often pretty murky waters.

In terms of actions specifically relating to this Bill, it provides that the public register will be updated annually. The Government need to monitor the accuracy of the public register closely and to consider what measures they might employ to ensure that it is updated more often. The Bill does not propose a verification regime for the information in the register and assumes a 100% compliance rate. I believe that the Government should work with Companies House to ensure an adequate verification regime for information that will go into the public register. In another place, the Government said that exemptions to publishing information in the register would be given only in exceptional circumstances. It is essential that they should abide by that commitment, and the broad categories under which exemptions may be granted should be published. There should also be adequate sanctions for those who fail to update the registers properly and, pour encourager les autres, the Government should publish a list of the sanctions available.

Finally in relation to this part of the Bill, businesses must keep their own registers up to date. It is important that members of the public can view them as they will be updated more often than the public register could be. For that reason, new Section 790O(4)(d) on page 162 should be removed because it seeks personal information that may well discourage organisations from publishing information that they have obtained about businesses’ registers. I would ask the Minister to give an assurance that that new section will not be used to prevent reports or investigations being undertaken and published.

I would like to make some brief comments on two other aspects of the Bill. Prior to being a Member of another place and the Scottish Parliament, I was a full-time trade union official and, at a different time, a director of a small company. I know what it is like to wait anxiously for debts to be paid as staff salaries become due. Indeed, when I eventually left the company I was owed thousands of pounds because, like the other directors, we had forgone part of our salary simply to ensure that the staff could be paid. That was not because we were unable to find business, but because we were unable to force those businesses to which we had provided our services to pay what was due. My noble friend Lord Sugar drew attention to the fact that one in five insolvencies is the result of a business being unable to secure payment for goods and services that have been provided. That is surely a scandal, and yet the figure is unlikely to improve through the implementation of this Bill.

Clause 3 requires merely that certain companies—I have to say that it is notable that the financial services sector is exempted—must publish information about their payment practices and policies relating to business-to-business contracts. I have to ask the Minister why the Bill does not contain measures that would force late payers to play fair. Perhaps I may make a suggestion, although it is not particularly scientific. Debts of up to £10,000 should be paid within 30 days and debts above that figure within 90 days. If this was enshrined in legislation and the debts were not paid in that time, a 1% increase to the debt could be applied. I suggest that that would make most companies pay within what by any standards are reasonable timeframes. I cannot see what the legal arguments against this suggestion would be, although I am sure that there would indeed be some.

Several speakers have mentioned the fear of small companies not wanting to make a fuss about unpaid debts for fear of losing future business with the larger company. If there were a legal requirement for debts to be paid within a certain period, every business from the smallest to the largest would be in the same position and would suffer no detriment. Without some sanction being applied, I believe that small businesses will continue to go under through non-payment of debt and through no fault of their own. That is not a situation that should be tolerated.

On the other side of the coin, as a trade union official I represented people who wanted security in the form of a regular job with good conditions such as sick pay, maternity pay, holiday pay and pensions. I will concede to the noble Lord, Lord Leigh, that we are no longer in the position of nine to five jobs and 35-hour weeks. I did not know many people who worked a 35-hour week then and I certainly do not know any now, and I accept that. However, that is not to say that the conditions to which I have referred should simply be swept aside. None of the above—sick pay, maternity pay, pensions and so on—is payable to people on zero-hours contracts, and to hear such contracts being defended by so many speakers in this debate, including the Minister, is dispiriting, to put it mildly.

Often we hear Ministers speak, as several noble Lords have done today, about the need to reduce burdens on business. I accept that in many cases that is legitimate. But what thought is given to reducing the burdens on the individuals who work for those businesses—the burden of not knowing when or perhaps even where they will next be working; the burden of receiving no sick pay when they are too ill to present themselves for work; the burden of arranging childcare to enable them to get to work, only to find when they get there that the employer says, “No work today”, and there is no compensation for the costs that they have incurred; the burden of being unable to get a mortgage because they do not have a regular wage or salary; and the burden of being unable to make financial plans with any certainty? Other than removing the exclusivity clause from zero-hours contracts, those with no alternative than to work under them get no solace or support from the Bill.

Please, let us not justify zero-hours contracts by suggesting that the arrangement suits some people. Yes, I am sure it does but it is a small minority of those subject to what is no more than modern-day serfdom. Surely in an advanced, high-tech economy, we can do better than this for our people in the workplace.

19:20

[Lord Mendelsohn (Lab)]

My Lords, I draw attention to my entry in the register of interests, which includes my current involvement in small businesses.

We have had an extensive and interesting debate, which has covered most of the aspects of a quite wide-ranging Bill. Our debate was punctuated by a simply outstanding maiden speech by the noble Baroness, Lady Harding of Winscombe. The noble Baroness, Lady Harding, has an outstanding academic pedigree, has had a great career in consulting and has been a tremendous success in business. It is very strange to welcome her to the House given her comments about her strong association with and connection to this House. I have a confession to make: the noble Baroness, Lady Harding, has been part of my life for quite a few years. It dates back to 19 March 1998, when, watching the Gold Cup—I am occasionally attracted to a flutter—I was convinced to back a rank outsider very heavily. Unfortunately, that horse, which was a 14-1 bet, came second to a 25-1 outsider, which led from start to finish—Cool Dawn. Strong Promise turned out to be anything but. However, “strong promise” is what we saw today and I am sure that the noble Baroness, Lady Harding of Winscombe, will make a great contribution to this House.

It is encouraging that there is such strong support across the House for a Bill that covers small businesses, and for a number of employment and other measures to encourage and foster enterprise. As my noble friend Lord Stevenson made clear at the beginning of the debate, we are broadly supportive of the objectives and measures contained in the Bill. We of course have issues with many of the provisions; indeed, in the course of this debate we have seen that there is a strong desire for the Bill to have been far more ambitious. There are also some provisions that will require some careful scrutiny in Committee to ensure that they not only achieve the objectives intended but are sufficiently clear and appropriate to ensure that they do not create merely temporary fixes which can be evaded.

We are strongly supportive of the overall intentions of the Bill. Small businesses are a great engine of economic activity and wealth creation, as well as providing huge levels of employment and essential goods and services to all parts of our country. They also represent a key area of life that ensures quality of life for many; provides motivation, aspiration and ambition; creates fulfilment and a social context for co-operation between people and in families; and is an important springboard for social mobility. It is therefore true that, despite the many important provisions in the Bill that will tackle many of the problems and ills experienced by small businesses and those involved in them—ranging from late payment issues to zero-hours contracts—our country needs a much stronger small business support strategy.

The definition of micro-businesses is welcome. Enterprises with fewer than 10 employees—and most of these entities have far fewer even than five—are frequently placed at a great disadvantage in the market next to other sorts of companies. They get limited opportunities to receive discounts and benefits available to firms with scale. Indeed, on many occasions micro-businesses are at a disadvantage to individual consumers, who have access to better discounts. We support being able to treat micro-enterprises as consumers in certain circumstances and think that this sort of measure would provide great benefit to those that frequently are paying in relative terms considerably more for services in circumstances where cash flow can be very acute.

In addition, echoing the comments of the noble Lord, Lord Kestenbaum, there are imbalances across the country that are not being adequately addressed by the Bill. With approximately 850,000 private sector small businesses, London has more firms than any other region in the UK. The south-east has the second largest number, with around 800,000. Together, these regions account for almost a third of all small businesses. I hope that we will be able to take a closer look in Committee at how we can open up public sector procurement across the country to help expand the opportunity to start and grow new small businesses in every region of the UK.

On the provisions covering transparency relating to ownership, control and direction, we are strongly supportive of the thrust of the Bill. We are also very keen on the provisions on company filing requirements. These are important measures to fulfil our G8 commitments. While these measures address illicit activities, the size of which was outlined by the noble Lord, Lord McKenzie of Luton, and in a powerful speech by the noble Lord, Lord Watson of Invergowrie, we support the thrust of these measures because we believe that employment, wealth and effective markets will be strengthened if they are built on transparency, information and fairness.

In Committee, we will naturally want to scrutinise and ensure that the balance between any particular requirements for privacy—and there are legitimate concerns—can be covered appropriately. In addition, we will want to ensure that overseas companies and those that were established in, or that have moved to, favourable tax regimes or places with limited disclosure requirements are not provided with unfair advantages. But we hope that the Minister will confirm that all these measures cover the complexities of ensuring maximum disclosure, including, for example, from the finance industry and fund structures.

We are also pleased that these measures assist in strengthening the provisions looking to ensure that director disqualifications have more teeth in order to protect the integrity of the operation of the market and the interests of consumers and to ensure better corporate behaviour. We are all too often made aware of the terrible experiences inflicted on some consumers by rogue traders. Of special concern are those who target the vulnerable. Many will have experienced the terrible circumstances caused to suppliers who suffer loss, and in many instances small businesses are disproportionately negatively affected by such losses. We will be looking to Ministers to ensure that people are not just unable to act as directors but unable to continue to act with little consequence in circumstances where the public have a full opportunity to feel reassured that they have access not only to information but to a regulatory regime that can act to protect them.

In relation to the provisions on insolvency, we heard a strong consensus across the House regarding measures looking at pre-packs. We believe that there is a case for pre-packs but we must ensure that we deal with the abuses and the potential negative consequences of introducing them. The speeches of the noble Lords, Lord Bilimoria, Lord Mitchell, Lord Hodgson of Astley Abbotts and Lord Leigh of Hurley, all identified the balances that have to be struck when we are dealing with this issue. I am sure that the comments of the noble Lord, Lord Bilimoria, about Chapter 11, which were warmly received in parts of this House, will come up in Committee, and I look forward to that.

When addressing some of the provisions on finance, the House seemed to have a clear consensus, which we share, that there are wider concerns about failures in the credit markets and that there are many broad problems of lending that we have to deal with. In relation to access to finance, we share the concerns raised by the noble Lords, Lord Bilimoria and Lord Leigh, and the noble Earl, Lord Lytton. The noble Lord, Lord Kestenbaum, made a very powerful speech which evoked some very strong phrases, which we strongly support, such as “long-term patient capital” and looking at measures to create progressive public policy that can support small businesses rather like some of the things we have seen in other countries, such as Israel and Korea, which have really encouraged small businesses to scale.

We are concerned by late payments and share the concerns raised by the noble Lords, Lord Sugar and Lord Mitchell, and by the noble Baroness, Lady Byford. On zero-hours contracts, we agree with the powerful comments made by the noble Lord, Lord Young.

Many noble Lords have used this opportunity to raise a variety of other issues that are slightly outside the Bill. The noble Lord, Lord Wakeham, made some important observations on the impact of the money laundering regulations. The noble Lord, Lord Mitchell, referred to interns. The noble Lord, Lord Hunt of Chesterton, spoke on a range of issues not contained in the Bill. The noble Baroness, Lady Byford, also raised issues around rural communities and agriculture, where there is a high concentration of small businesses. The noble Earl, Lord Lytton, raised the possibility of introducing different forms of dispute resolution to assist SMEs.

The noble Earl, Lord Lindsay, addressed provisions that are in the Bill on regulation and expressed strong support for the appointment of small business champions in non-economic regulators—something which we, too, support and look forward to scrutinising in Committee.

It is useful to outline our approach to the measures set out in Part 4 of the Bill relating to the Pubs Code and the Government’s announcement today. We remain concerned by the unintended consequences mentioned by the Minister in her opening remarks and are concerned that this is a partial view of the state of the current market and of the impact of the changes on it. We would encourage a broader view to be taken of the consequences to take account of what is happening. The noble Lord, Lord Stoneham of Droxford, gave an astute analysis of the market and argued powerfully that the fears being expressed to us are designed to prop up strategic errors that ultimately and disproportionately disadvantage publicans.

The noble Lords, Lord Cope of Berkeley, Lord Bilimoria and Lord Snape, spoke of the consensus on continuing to push with great force for the market rent only option in Committee. It is our view that the industry is in a process of change and that tenants need more flexibility to operate in the changed environment. We are very pleased by the Minister’s confirmation that the Government will now adopt the will of the other place and develop an effective market rent only option. We will work constructively with the Government on this measure in Committee. We accept that there is work to do to make Part 4 consistent and coherent, and we will be happy to co-operate to ensure that the Government shape a Bill consistent with their new undertaking. In addition, our deliberations will be an opportunity for us all to look collaboratively at how we can add a strong dynamic to the pub sector. There will now be an opportunity for us to look at additional measures to boost the position of publicans.

This Bill could have benefited from pre-legislative scrutiny. However, the debate today has demonstrated how strong the support is for its core principles and how productive the Committee stage is likely to be. That is, of course, after we all do our bit when we face our first challenge—how we perform on Saturday, which is Small Business Saturday.

19:33

[Baroness Neville-Rolfe]

My Lords, I thank all speakers for their contributions, which have helped highlight and distil some of the main issues that we look forward to discussing further as the Bill moves through the parliamentary process. I am grateful to the noble Lord, Lord Mendelsohn, for so elegantly summarising the views of noble Lords, which I shall try not to repeat too closely.

Perhaps I may start by joining all noble Lords in congratulating my noble friend Lady Harding on her maiden speech. I was looking forward to it, and it was certainly a tour de force. We used to work together, and I always told her that she would end up in politics. She brings an extraordinary mix of experience, judgment, intelligence and charm to our House and her presence will lead to some great racing jokes. The noble Lord, Lord Young of Norwood Green, was the first to give us a great joke, so I thank him for that. I welcome the support expressed by my noble friend for the measures on zero-hours contracts. Her point was very well made that these can be helpful, especially in dealing with peak business in the run-up to Christmas.

Noble Lords have emphasised the critical role of small businesses in the UK economy, which the Government fully endorse. The purpose of this legislation is to adopt specific measures that recognise that reality. There are different views as to how best to take this forward, but that should not obscure the fact that there is great common ground across the House, not least on the importance of tackling late payment. Small businesses are the bedrock of our economy, so it is essential that they are supported and promoted to give them every chance of success. I am glad that the noble Lord, Lord Mendelsohn, mentioned Small Business Saturday, which takes place this very Saturday. This yearly event has been established to support, inspire and promote small businesses and encourage consumers to shop locally, which I hope we will all do.

In that regard, I was glad to hear my noble friend Lady Byford comment on the benefits of the Bill in rural areas. As she knows, I was brought up on a farm and so have business in my blood, even though, like many small businesses, it faltered and my father had to sell up—a useful experience in the context of this Bill. That was probably at about the time that my noble friend Lord Wakeham was starting out on his more successful career in small business. I was also glad to hear my noble friend Lady Byford asking about broadband coverage, a matter on which I, too, used to campaign. Progress has been made. I shall not delay the House this evening, but I will update her and anyone else who is interested by letter on the latest position on broadband.

I reassure noble Lords that the Bill will open up new opportunities for small businesses to innovate, compete and secure the necessary finance to create jobs and to grow. It builds on previous initiatives that we have implemented to support small business. More of them are getting access to the finance that they need; they are paying the lowest corporation tax in the G20; and have better access to support and advice. Evidence that these initiatives are working can be seen in figures from the Global Entrepreneurship Monitor, stating that in 2013 7.3% of adults were involved in starting or running a business in the UK. That compared to only 6.3% in Korea and 5.3% in Finland, which the noble Lord, Lord Kestenbaum, cited as best practice. We should be proud of our track record in this country. When I travel overseas, people are fascinated by the success that we have had over the years in creating small businesses and, latterly, of cutting unemployment. This Bill will further enhance what we have done and provide more support to small businesses. To suggest that it is timid is to do it a disservice. It will ensure that the UK continues to be recognised globally as a trusted place to start and grow and do business.

We have heard from a number of noble Lords on pubs and I was glad to hear of the widespread support for the goal of ensuring that tied tenants are treated fairly and are no worse off than free-of-tie tenants. My noble friend Lord Stoneham spoke in favour of the market rent only option, while the noble Lord, Lord Bilimoria, and my noble friend Lord Cope of Berkeley supported the Government’s decision to accept the strong will of the other place to include this option in the Bill. I also noted the arguments advanced by the noble Lord, Lord Hodgson of Astley Abbotts, and look forward to debating with him in Committee. I agree with him on one point: that to save our pubs, we should all use them and not stay at home watching the TV—in fact, we could start tonight.

The noble Lord, Lord Snape, gave us some real examples of the difficulties that tenants can face, and I was very sorry to hear of the problems which his daughter and son-in-law seem to have experienced. These are exactly the sorts of issues that we are committed to address in these measures to ensure that tenants are treated fairly.

I reassure my noble friend Lord Wakeham that we will be looking at the market rent only option in detail to ensure that it is workable and that we minimise any potential unintended consequences. I also assure the noble Lord, Lord Snape, that officials and Ministers have been meeting and will continue to meet tenants’ organisations, pub-owning companies and their representatives to discuss those issues.

The noble Lord, Lord Young of Norwood Green, brought us down to earth. I agree with him on the importance of British real ale, and I am glad that we are doing better than the Belgians. I am grateful to the noble Lords, Lord Stevenson and Lord Mendelsohn, for their commitment to work with us to ensure that the measures deliver and that the thousands of tied tenants across England and Wales are treated fairly.

Turning to finance, I welcome the support of my noble friends Lord Wakeham and Lord Cope for the access-to-finance measures. I assure the noble Lord, Lord Kestenbaum, that the Government are very ambitious in that regard. I look forward to his scrutiny on this point in Committee.

It was good to hear from the noble Lord, Lord Sugar, and I pay tribute to his work to raise public awareness of entrepreneurship. I hear that he wants the Government to go further, but at least he did not tell me that “I am fired”—so far. The noble Lords, Lord Sugar, Lord Watson of Invergowrie, and others, talked about late payment, to which we will certainly come back. I fully agree that we need to do more on late payment; that is why we have made it a central feature of the Bill.

Our legislative proposals will help a lot, but of course legislation is not the only answer. Existing remedies are not being used, largely because smaller suppliers do not want to risk relationships with bigger companies, as the noble Lord said so eloquently. We therefore need to effect a culture change by making it unacceptable to pay late. I look forward to discussing how to do that—probably mainly outside the legislative process.

The noble Lord, Lord Bilimoria, talked about the burden of the failure of prompt payment on medium-sized businesses. We are currently consulting on which companies should be subject to the prompt payment reporting requirements. I have heard concerns that its scope covers too many medium-sized companies, and we will consider his comments during the consultation.

The noble Lord, Lord Mitchell, was, I think, a little unfair about what we have done to help small businesses. Take Funding for Lending, for example. Funding for Lending has played a part in improving the willingness of large banks to lend, but we need to increase the sources of funding available to SMEs. Therefore, we welcome the rapid growth of challenger banks for business lending, such as Aldermore and Handelsbanken, and the growth of peer-to-peer lending and crowdfunding, which we have brought into the regulatory framework for the first time. By providing the data that those lenders need, the Bill will help to transform the lending landscape.

The noble Earl, Lord Lytton, asked about electronic cheque imaging. I am glad to say that the industry will be able to put in place a number of measures to mitigate any fraud and security risks. In a number of respects, cheque imaging provides an opportunity to address security risks that currently affect cheque users. The industry will be adopting proven technology that has been in operation in the USA for 10 years. The US banking industry has told us that it has no significant concern about fraud risk associated with cheque imaging. I hope that that will reassure the noble Earl.

My noble friend Lord Leigh gave a comprehensive contribution. I am very grateful for his support on the Bill. I echo his point about comparisons with Europe: when compared to France, our employment rate is more than 6% higher. On his concern about finance platforms, in which I think that the noble Lord, Lord Stevenson, was also interested, I am pleased to be able to reassure him. The platforms designated by the Government will be required to give fair access to financiers that request it. That requirement will be enforced by the Financial Conduct Authority. When designating a platform, the Government will certainly consider and take into account the ability of that platform to open up opportunities across financing markets for small and medium-sized businesses.

Turning to regulatory reform, I welcome the support of the noble Lord, Lord Curry of Kirkharle, for the measures in Part 2. I know that his comments draw on very long experience of better regulation. I completely agree that the measures in Part 2 will make life easier for millions of businesses, many of them small businesses. The measures build on the UK’s continued success in delivering regulatory reform and will help to embed our leadership internationally. I also thank the noble Earl, Lord Lindsay, for supporting the regulatory reform measures and for the work he has done.

I also listened with great interest to my noble friend Lord Eccles, because of his long experience. I know that there are a significant number of delegated powers in the Bill, but we are trying hard to issue consultations on the SIs concerned in parallel to our discussions. The key such consultation on prompt payment was issued last week.

I can assure my noble friend Lady Byford that the Government consider the timetable for delivering the target in Clause 15 of streamlining company registration to be achievable. We recognise that it will be a complex IT project, and the timetable allows for thorough engagement with businesses to ensure that they are an integral part of the solution. That is very important.

On public procurement, the noble Lord, Lord Hunt of Chesterton, talked about paying suppliers promptly in the private sector. We agree that it is important for all suppliers to be paid promptly, and that the public sector should lead by example. That is why the Bill supports a simple and consistent approach, and we will be requiring contracting authorities to mandate prompt payment terms of 30 days across the entire public sector supply chain early in the new year.

The right reverend Prelate the Bishop of Peterborough moved me a lot by what he said about local entrepreneurship—a word that the noble Lord, Lord Bilimoria, rightly asked us to use more—and about micro-businesses helping the young unemployed and people from very distressed backgrounds. I so much agree with him about the value of local support for small businesses. I loved his examples. More importantly, he supported our trailblazing measures on a register of persons of significant control. We recognise the clear advantages of collective global action. That is why we continue to lobby other jurisdictions, notably in the context of the G7, the G20, the EU and through the Financial Action Task Force to take equally ambitious action on transparency of company beneficial ownership—a concern also expressed by the noble Lord, Lord McKenzie. We are also working with the Crown dependencies and overseas territories in this space.

The noble Lord, Lord McKenzie, also asked about anti-money-laundering. The UK is lobbying hard to encourage EU member states to take equally ambitious steps in the sphere of company transparency. It is encouraging that the European Parliament voted in favour of public central registers and that negotiations are ongoing. We hope that that work will conclude soon.

This part of the Bill was also a concern of my noble friend Lord Flight—albeit from a different perspective. He questioned whether the registers should be made public. The UK’s G7 action plan committed to consult on the question of whether the register should be publicly accessible. When we consulted in July 2013, there was strong support for our proposals. That was evident during the public sessions on the Bill in the other place. The FSB, for example, said:

“Trust and transparency are absolutely critical. That is why we fully support other bits of the Bill that deal with some of these areas”—[Official Report, Commons, Small Business, Enterprise and Employment Bill Committee, 14/10/14; col. 19]

Allowing public access is consistent with the UK’s commitments to openness and transparency, and builds on the established practice of making information on UK companies and shareholders available on the public record. The public register will enhance corporate transparency, promoting good corporate behaviour and building trust in UK companies. It will also help to ensure accuracy.

Furthermore, making this information public could assist international co-operation on law enforcement, reducing the time and cost associated with mutual legal assistance requests. I am sure that we will discuss the detail further in Committee, and I encourage my noble friend to read our consultation document on the implementing rules. This is a key plank of the Bill and I am grateful, too, to all noble Lords who supported these transparency provisions.

I assure the noble Lord, Lord Watson, that the Government do not intend to use Section 790O(4) to prevent legitimate access to company registers.

The noble Earl, Lord Lytton, asked about mutuals and co-operatives. As he knows, our reforms apply only to companies and to limited liability partnerships through secondary legislation. However, EU proposals in the fourth money-laundering directive may have a wider application and require mutuals and co-operatives to obtain and hold more information in this area.

The noble Lord, Lord Stevenson, asked what we are doing on takeovers. Following the AstraZeneca-Pfizer discussions, the Government said that they might need legislation to ensure that companies always honour big commitments. The Takeover Panel has now consulted on amendments to the takeover code that would significantly strengthen its ability to ensure that such commitments are honoured. We have therefore accepted its assurance that no further legislative change is needed in the Bill.

The noble Lord, Lord Bilimoria, started the discussion on Chapter 11. We shall talk about this in Committee, as there was quite a lot of interest expressed on it today, but it might be worth mentioning in advance of Committee that World Bank data indicate that the UK regime pays more to creditors, quicker and at lower cost, than the US, France and Germany. Chapter 11 is often criticised for its high cost; hence it is potentially sometimes less successful for small business.

On insolvency, the noble Lord, Lord Mitchell, expressed concern about pre-packs, although my noble friend Lord Hodgson took a different view. The independent Graham review found that pre-packs fulfil a positive and unique role in the insolvency landscape but identified a number of issues with current practice in how pre-packs are carried out. The review recommended a voluntary package of six reforms, which are being taken forward by the profession and the industry. They are making good practice on the recommendations and we hope to see these in place early in 2015. On the point made by my noble friend Lord Leigh about the future viability of pre-pack businesses, I am sure he would agree that swamping business with increased regulation would be counterproductive. I was glad that he agrees that a reserve power is the right approach.

Finally, I come to the employment measures. There are several new measures, which I will not run through except to emphasise the increased penalties for breach of the national minimum wage legislation and the fact that exclusivity clauses in zero-hour contracts will become invalid and unenforceable, so that no one is tied into a contract without any guarantee of paid work. The noble Lord, Lord Stevenson, asked about the possibility of compensation. Late-notice cancellations are clearly an issue for some individuals. However, a single solution would not be appropriate and could prove very costly to business. It could also lead to employers offering work only at short notice to reduce the risk of cancelling, which could be a step backwards for the individuals. We feel that the issue should be addressed in sector-specific codes of practice on the responsible use of zero-hour contracts.

A number of noble Lords raised the issue of enforcement. The noble Lord, Lord Sugar, seemed to welcome the tougher penalties on the minimum wage but felt that the scale of investigation and enforcement was an issue. HMRC has actually increased the numbers in its team of inspectors who are responsible for investigations on the minimum wage. However, enforcement is an incredibly important area and I am sure that we shall discuss it in Committee.

On interns, which were raised by the noble Lord, Lord Mitchell, we have to achieve the right balance. Under current law, it is legitimate for employers to provide paid internships where an individual is not a worker for the purposes of minimum wage legislation. If the individual is acting as a worker, they must be paid the national minimum wage. This depends not on the job title but on the working arrangements. However, given the dependency on employment status, the Secretary of State has launched an internal review of employment status in this area. We will be getting a report early in the new year.

Small businesses in the UK can feel hampered by barriers that restrict their ability to innovate, grow and compete. The Bill will address these challenges and pave the way for the Government to be more supportive of, and less burdensome to, small businesses in the UK. I again thank noble Lords and noble Baronesses for their contributions today and I ask the House to give the Bill a Second Reading.

Bill read a second time.

House adjourned at 7.55 pm.