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Oral Answers to Questions
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Sir Henry Bellingham (North West Norfolk) (Con)
1. What progress his Department is making on the creation of a more modern and efficient government estate.
The Minister without Portfolio (Robert Halfon)
My hon. Friend will be pleased to know that since 2015 the Government estate strategy has ensured that running costs have fallen by £750 million. We have raised some £1.8 billion in council receipts and reduced the estate size by nearly a quarter. This is a huge achievement and in terms of space it makes the UK Government one of the most efficient organisations in the world.
Sir Henry Bellingham
I thank the Minister for that reply and congratulate him and his team on the work they have done. Given that the estate has been reduced by nearly a quarter since 2010, is it not crucial that as much of this land as possible is used for new housing, especially given that quite a bit of it is going to be brownfield?
Robert Halfon
My hon. Friend, as so often, hits the nail on the head. A huge Government programme has ensured that available public sector land is used to build more houses for our country.
Andrew Gwynne (Denton and Reddish) (Lab)
A 2010 report suggested that to end the London magnet we had to move more top civil servant jobs out of the capital and into the regions. How are the Government getting on with that aim?
Robert Halfon
The Government are getting on very well with it: the number of civil servant buildings in central London has gone down hugely. We have created hundreds of thousands of jobs all over the country— 95,000 new jobs in the last year in the north of England alone—and what matters is what kinds of jobs we are creating and how many people are being employed.
Deidre Brock (Edinburgh North and Leith) (SNP)
2. What representations he has received on his Department’s boycott and divestment guidance.
The Minister for the Cabinet Office and Paymaster General (Matthew Hancock)
We have received a wide range of representations about boycotts in public procurement. The Government’s position is very clear: public sector organisations should not use procurement to run their own independent foreign policies.
Deidre Brock
Does the Minister agree that people who stand for election to local authorities and who then serve as councillors perform an important role in communities the length and breadth of these islands, and does he further agree that they should be trusted to make political judgments for themselves? Will the Government abandon the boycott and divestment guidance in favour of supporting local democracy?
Matthew Hancock
Yes, I think councillors do an excellent job at what councils are meant to do, but councils are not meant to set foreign policy, and attempts at local foreign policies that are discriminatory are potentially illegal, and we make that clear at every opportunity.
Mr David Hanson (Delyn) (Lab)
Was it wrong for my local authority to boycott South African goods in the 1970s?
Matthew Hancock
Where a national boycott is in place and where a national decision has been made, local authorities should of course follow that, but these decisions are rightly for the Foreign Office and not for local authorities; the country cannot be run by having hundreds of different foreign policies.
Tommy Sheppard (Edinburgh East) (SNP)
I think that, not for the first time, the Government are looking at this through the wrong end of the telescope. Rather than try to prevent local authorities from taking ethical and environmental considerations into account when making decisions, surely the Government should, as the Scottish Government do, encourage local authorities to do so—or does the Minister really believe that council tax payers’ money should be used to prop up oppressive regimes and support unlawful activity throughout the world?
Matthew Hancock
I find it surprising that the Scottish National party engages in and supports discrimination of this kind. We should trade with the world, except where a boycott decision has been made at a national level. The idea that we should discriminate against companies with which we otherwise have a good trading relationship is wrong.
Vicky Foxcroft (Lewisham, Deptford) (Lab)
3. What recent assessment he has made of diversity among permanent secretaries in the civil service.
The Chancellor of the Duchy of Lancaster (Mr Oliver Letwin)
I am afraid that following an outstanding permanent secretary’s move from Whitehall to become chief executive of Ofcom there are no permanent secretaries from BAME communities at present. However, 20% of permanent secretaries are women, which is higher than the figure for 2010 of 17.5% and much higher than the figure for 2005 of 8%, but clearly it is still considerably too low and we have a great deal more work to do to make sure we are drawing on a talent pool that reflects the nation as a whole.
Vicky Foxcroft
In 2011, for the first time, 50% of permanent secretaries were female. Since then, and since the Prime Minister took control, the glass ceiling has been painstakingly reassembled. If he cannot be trusted to appoint women, is it not about time we introduced some positive discrimination?
Mr Letwin
The hon. Lady refers to a brief moment during which, because of appointments already in place and new appointments being made, there was a spike, and we would very much like to see that replicated on a long-term basis. We have appointed a range of women permanent secretaries in the past few months, and I am glad to be able to tell the hon. Lady that we are doing a great deal to ensure that the pool from which we draw the permanent secretaries—directors general—is improving significantly, in that 37% of our directors general are women. We are seeking to move that further forward, and we need to see this happening throughout the senior civil service.
Sue Hayman (Workington) (Lab)
According to Leonard Cheshire Disability, only 4.5% of senior civil servants are disabled. What are the Government doing to ensure that disability is not impeding disabled people in the civil service from reaching the highest levels? Will the Minister review the Government’s policies and keep the House updated on his efforts to improve the employment prospects of disabled people in the civil service?
Mr Letwin
The hon. Lady is right. As a matter of fact, the situation is even slightly worse than she suggests. The percentage of disabled senior civil servants—or, at any rate, of senior civil servants who have registered themselves as disabled in staff surveys—is only 3.4%. That is much too low, and it reflects the fact that we have not yet been able to remove all the barriers that we need to remove. I am sitting next to the Minister without Portfolio, my right hon. Friend the Member for Harlow (Robert Halfon), who has shown that it is perfectly possible for someone who suffers from a significant disability to reach the highest level in politics, but we need that to be true throughout our public administration because we need to draw on talent from wherever it comes.
Louise Haigh (Sheffield, Heeley) (Lab)
As the Minister confirmed, since the Prime Minister gave himself the power to appoint, 80% of permanent secretaries are men. In the spirit of open government, will the Minister commit to publish the shortlists from which the Prime Minister has made appointments?
Mr Letwin
I will go back and talk to colleagues about the methods by which we publish what happens under that procedure. I would like to point out to the Opposition spokesman—[Laughter.] I would like to point out to the Opposition spokesperson that we draw permanent secretaries from the pool of directors general. If we are to draw on that talent, we have to encourage more women to be directors general. As I have said, I am glad that the percentage of women directors general is now up to 37%. We would like to get up to 50% or beyond, and as we do so we will have the talent from which to draw into the permanent secretary ranks, which is obviously where we want women of talent to end up.
David Mackintosh (Northampton South) (Con)
4. What progress his Department is making on reducing the number of Government offices in London.
The Minister without Portfolio (Robert Halfon)
The Government’s direction of travel is ensuring value for money for the taxpayer and value for money overall. The Government Property Unit is working closely with the Departments to reduce the Government estate from around 800 buildings to closer to 200 by 2023. The number of Government offices in London has fallen from 181 in 2010 to just 54 today, and we will seek to reduce it to about 20 by 2025.
David Mackintosh
Does my right hon. Friend agree that, wherever possible, all taxpayer-funded bodies should consider relocating outside central London to save money? Will he write to the Independent Parliamentary Standards Authority with that suggestion?
Robert Halfon
If I did not know my hon. Friend better, I would think that he was bidding for IPSA’s headquarters to be located in Northampton South. All I will say to him is: be careful what you wish for. I note that Northamptonshire has led the way by being the first area in the country to announce plans to bring its police and fire services together in a shared estate.
Mr Gregory Campbell (East Londonderry) (DUP)
The Minister mentioned the value-for-money approach. Does he agree that it would be better if Government offices were spread across the United Kingdom? Given the value-for-money approach we take in Northern Ireland, would he consider Northern Ireland as a location?
Robert Halfon
Yes, my hon. Friend makes an important point. There is a policy on rebalancing the civil service between London and the regions across the United Kingdom. The civil service already has a significant presence across the United Kingdom, and he will know that many civil servants are employed in Northern Ireland. We are looking to extend this further and to create multi-occupancy offices in key locations around the country.
Caroline Ansell (Eastbourne) (Con)
13. I am happy to make a bid for the relocation of Government offices. As my right hon. Friend will know, coastal communities have many advantages, but they face serious challenges. Does he agree that as the sunniest town in our fair United Kingdom, with a thriving cultural scene and buoyant chamber of commerce, Eastbourne might be just the place for such a relocation, as might East Sussex in general?
Robert Halfon
My hon. Friend, as a former teacher, is a brilliant MP for her area and a key component of compassionate Conservatism in Eastbourne. I note that Eastbourne chamber of commerce said the town is one of the 10 happiest places to stay in the UK, and it might be a good place for all of us to go after the European Union referendum—whatever the result.
Bob Blackman (Harrow East) (Con)
5. When he expects the Boundary Commission to publish its initial recommendations for new constituency boundaries.
The Parliamentary Secretary, Cabinet Office (John Penrose)
The conduct of the boundary review is, rightly, a matter for the independent Boundary Commissions. The Boundary Commissions for England and for Northern Ireland plan to publish initial recommendations this autumn, and the Boundary Commissions for Scotland and for Wales plan to do so later this year.
Bob Blackman
I thank my hon. Friend for that answer. Will he confirm that the guidance given to the Boundary Commission is to split wards by polling districts so that we have equal-sized electorates for Members of this House elected in 2020?
John Penrose
My hon. Friend is absolutely right to state, first and foremost, the principle that all votes, no matter where in the country they are cast, should have equal weight, and that constituencies must therefore be more equal in size. Ward-splitting has for some time been part of the Boundary Commission’s work in other parts of the country, but I can confirm that it expects to be able to introduce it in constituencies in England as well.
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
The number of democratically elected Members of this place from Scotland will be cut by six, but are plans afoot to cut the number of unelected Lords, who are able to make laws affecting Scotland and the rest of the UK?
John Penrose
I think the hon. Lady was supporting the principle that votes should have equal weight no matter where they are cast in the country, and I welcome her support if my reading is correct. I cannot confirm plans to alter the size and composition of the Lords, although I understand that discussions at that end of the corridor are going on fairly continuously.
Mr Speaker
The supplementary was only tenuously related to the terms of the question, but I am in a generous mood.
Gordon Henderson (Sittingbourne and Sheppey) (Con)
10. I welcome the consultation period that will follow the Boundary Commission’s recommendations, but does my hon. Friend agree that it is important to ensure that people are aware of the consultations so that they can make their views known? What does he intend to do to publicise the consultations?
John Penrose
My hon. Friend is right: it is vital that people are aware of the consultation period. It is being advertised on the Boundary Commission website and will be advertised further to make sure that everybody can comment, but it is up to political parties from all parts of the House to make sure that their supporters and organisations are galvanised and submissions can be made.
Gloria De Piero (Ashfield) (Lab)
The number of registered voters has gone up massively since December 2015—in some constituencies, the equivalent of two extra wards have been added. Will the Minister therefore reassure us that he cannot possibly use the December figures to redraw the boundaries—or will his Government go back to using voter registration for their own political gain once this referendum is over?
John Penrose
I am intrigued that the hon. Lady thinks she knows what has happened to individual constituencies’ electoral rolls, because the final versions will not be published for another week or 10 days. Whatever the outcome of that publication, it cannot be right that we carry on with the existing political constituency boundaries, which are based on the electoral rolls from 2001 or, in some parts of the country, from 2000. They are shockingly out of date and we absolutely need to update them. I can, however, reassure her that there will be updates every five years, rather than every 10, and that constituency boundaries will be more up to date and accurate than they have been in the past.
Mike Gapes (Ilford South) (Lab/Co-op)
7. Whether the agreements reached at the anti-corruption summit in May 2016 will be applied to other countries.
The Minister for the Cabinet Office and Paymaster General (Matthew Hancock)
This Government and this Prime Minister have taken a global lead on tackling the scourge of corruption. Each delegation at the anti-corruption summit signed up to the commitments set out in the communiqué. In addition, 42 countries and eight international organisations issued statements setting out further measures that they will take.
Mike Gapes
In April 2014, the Prime Minister said:
“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.”
Will the Minister explain why the Government are no longer calling for public registers of beneficial ownership in the British overseas territories?
Matthew Hancock
We are calling for them. The Prime Minister was absolutely right then, and we are delivering on that now. Later this month we will publish the beneficial ownership register for the UK. All the overseas territories have signed up to beneficial ownership registers, and we urge them to make them public.
Helen Hayes (Dulwich and West Norwood) (Lab)
11. In the run-up to the anti-corruption summit, leaders of charities and faith groups around the world were calling on the Prime Minister to insist on the same levels of transparency in our overseas territories and Crown dependencies as we have here in mainland UK. Why did the Prime Minister ignore them? Was he unable or unwilling to stop the facilitation of corruption in our tax havens?
Matthew Hancock
We have made huge progress in ensuring that we have registers of beneficial ownership in the overseas territories. We are also publishing the beneficial ownership register for the UK. The progress that has been made in the overseas territories is the greatest under any Government in history, which perhaps is one reason Transparency International said that the summit had been a good day for anti-corruption.
Jonathan Ashworth (Leicester South) (Lab)
The Panama papers have shown how illicit finance robs the very poorest countries of the world. Malawi, for example, loses about $130 million a year through such finance. Will the Minister explain why the Malawian company Press Trust Overseas Ltd cannot have its tax affairs scrutinised because it is in the British Virgin Islands? Should not the summit have come to an agreement to force such overseas jurisdictions to publish central beneficial registers?
Matthew Hancock
If the hon. Gentleman cares so much about the matter, he might have congratulated us on the progress that we made at the summit. He will be delighted to know that the British Virgin Islands has signed up to have a beneficial ownership register and to share that information with the UK Government. We are making progress in tackling the scourge of corruption, about which previous Governments, including the one he supported, did too little.
Chris White (Warwick and Leamington) (Con)
8. What progress has been made on implementation of the Public Services (Social Value) Act 2012.
The Minister for Civil Society (Mr Rob Wilson)
It is important to begin by acknowledging that, thanks largely to my hon. Friend’s efforts, the social value Act came into force in January 2013. He can be proud that the Act has unlocked a range of public benefits from the procurement of goods and services. Lord Young reviewed progress in 2014 and reported in 2015. His findings inform our current work to quicken the pace of implementation. As part of that work, we will publish a paper this summer that will give examples of how central Government are driving forward the social value Act and what further actions we will take.
Chris White
The social value Act has been seen to benefit commissioners, service providers and the wider community. What progress has been made in ensuring that government, both local and national, applies the Act to their procurement processes more widely and consistently?
Mr Wilson
We reviewed central Government’s progress on the Act and found increasing awareness of it and a clear willingness and commitment to implement it. I will publish an appraisal of central Government’s commitments to the Act later in the summer, which will set out the steps being taken and the plans for the future. In preparing for that, I have invited a panel of external social value experts to review and critique current plans and practice. That process is helping to ensure that central Government’s aspirations for social value are being stretched.
Cat Smith (Lancaster and Fleetwood) (Lab)
T1. If he will make a statement on his departmental responsibilities.
The Minister for the Cabinet Office and Paymaster General (Matthew Hancock)
The Cabinet Office is responsible for efficiency and reform in government, transparency, civil society, the digital economy and cybersecurity to deliver the Government’s agenda.
Cat Smith
Will the Minister confirm that, whether appropriate in the Government’s view or not, it is still lawful for public bodies to refuse to award contracts to companies for reasons other than nationality, such as human right records, compliance with international law or a connection with trades such as the arms trade or fossil fuels?
Matthew Hancock
As I said earlier, the boycott of, and discrimination against, countries is potentially illegal. The guidance that we set out was designed to make it absolutely clear that these decisions on boycotts against countries need to be taken at a national level, and it is inappropriate for local authorities to try to set their own foreign policies.
Jason McCartney (Colne Valley) (Con)
T3. The National Citizen Service has been a wonderful success in Huddersfield and Colne Valley. What more can be done to make sure that even more young people in Yorkshire can find out how to access this transformative experience?
The Chancellor of the Duchy of Lancaster (Mr Oliver Letwin)
My hon. Friend is right that the National Citizen Service around the country and in his own constituency has made a huge difference. There were 467 people who went through it in 2015 in Kirklees, the local authority in which his constituency lies. We are determined to increase that number. There is a new marketing campaign, and I am glad to say that 8 million hours of volunteering have so far been contributed by National Citizen Service participants. I hope my hon. Friend will see in his constituency a proportion of that effect coming through in the next year.
Deidre Brock (Edinburgh North and Leith) (SNP)
T2. What provisions are the Government putting in place to ensure that non-UK citizens of the EU living here will continue to enjoy the same rights after a possible Brexit vote as they do now?
Luke Hall (Thornbury and Yate) (Con)
T4. This Government have a responsibility to ensure that their citizens are safe online. Will my right hon. Friend update the House on what progress he is making in developing the 2016 national cyber-security strategy?
Matthew Hancock
Cyber-security is incredibly important, especially as we increasingly deliver digital government. The national cyber-security strategy ran up to 2016. The new strategy is underpinned by investment of £1.9 billion—almost double the funding—and we will publish the strategy later this year.
Helen Hayes (Dulwich and West Norwood) (Lab)
T5. The backward steps in gender inequality at the top of the civil service are unacceptable. Will the Minister release the gender breakdown of those who were shortlisted for the role of permanent secretary so that we can have further transparency on this important issue?
Mr Letwin
As I said to the House a few moments ago, we will take that serious suggestion away and come back with a view about whether it is possible to release those data without compromising individual sensibilities. I am absolutely with the hon. Lady that we need to see more women joining the ranks of the permanent secretaries, and as I mentioned to her, it is of great importance that the directors general are now much better distributed in a gender balance.
Derek Thomas (St Ives) (Con)
T6. The National Citizen Service provides a real opportunity for young people in Cornwall, a part of the world that is quite deprived. What more can we do to ensure that young people have access to the service this summer?
Mr Letwin
My hon. Friend is right. There were 312 people in Cornwall who participated in the National Citizen Service last year. We want to see that number rise significantly. Already 486 people have signed up and we hope to see more come through during the coming year. We are spending £1 billion over the four years to increase the proportion of young people who can do National Citizen Service, which I think will have an enormous effect on, among other things, social cohesion—80% of those who went through National Citizen Service said at the end that they had a better view of people from other backgrounds than they had before they joined it. [Interruption.]
Mr Speaker
The Minister is offering serious thoughts in a cerebral manner on a very important topic, the National Citizen Service. I think he deserves a more attentive audience.
Wes Streeting (Ilford North) (Lab)
Given the surge in voter registration, how can the Minister possibly justify using such woefully inaccurate figures to redraw the electoral map of the United Kingdom?
Matthew Hancock
We just had this question a few minutes ago, and the answer is very clear: the alternative of using figures from 2001 or 2000 is completely unacceptable. We have, in fact, made the process more frequent, not less, and we now update the register for the purposes of writing the boundaries every five years, not every 10.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
T8. What steps will the Secretary of State take after a resounding victory in the vote to stay in Europe next week to get all Departments working harmoniously and well again after the disruptions we have had over the last month?
Mr Letwin
I am afraid that the hon. Gentleman is mistaken in his implication: actually, the fact is—I see this day by day—that the Departments of State have functioned smoothly and effectively throughout this period, as have members of the Cabinet. I am glad to say that we intend to continue doing so to fulfil the manifesto commitments on which we were elected.
Peter Aldous (Waveney) (Con)
Q1. If he will list his official engagements for Wednesday 15 June.
The Prime Minister (Mr David Cameron)
I know the whole House will join me in sending our profound sympathies to the family and friends of the 49 people who died in the horrific attack in Orlando on Sunday. This was an evil attack of terrorism and homophobic hatred, and we utterly condemn both of them. This attack, along with the callous murder of a French police couple on Monday, is a stark reminder of the challenge we face to defeat the poisonous ideology of Daesh, both online and on our streets, but I believe that, together—with our friends, with our allies and with our common values—we will prevail.
This morning I had meetings with ministerial colleagues and others, and in addition to my duties in this House, I shall have further such meetings later today.
Peter Aldous
I share the sentiments and sympathies the Prime Minister expressed to the victims and their families and friends in Orlando.
The Australian parent company of Sealite United Kingdom Ltd see Europe as a major market for expansion, but it has put on hold its plans to build a factory in the enterprise zone at the South Lowestoft industrial estate. Lowestoft has enormous potential as a centre serving the European maritime market, but does the Prime Minister share my concern that this opportunity would unnecessarily be placed at risk if the UK leaves the EU?
The Prime Minister
I certainly share my hon. Friend’s concern. I well remember visiting his constituency and seeing what a thriving business location Lowestoft is. He is right that many companies come to Britain and invest in Britain for many reasons, but one of the most important is access to the single market of 500 million customers. Next week we have the opportunity to put our place in that single market beyond doubt, and I hope that we wake up on 24 June knowing that businesses are going to invest more in our country, create more jobs in our country and see more growth in our country, because that will help the families of our country. The unemployment figures today show another welcome fall. We can see continued progress—let’s keep our country moving forward.
Jeremy Corbyn (Islington North) (Lab)
I concur and join with the Prime Minister in his remarks about the terrible deaths in Orlando. On Monday I joined a vigil of thousands of lesbian, gay, bisexual and transgender people in Soho, in London, to mourn the deaths of those 49 people. We say thank you to all those all over this country who attended vigils on Monday night to show their concern and their horror about what happened. Quite simply, we defeat such atrocities through our love and solidarity, and we need to send that message out.
Three years ago, there was a cross-party agreement for the implementation of section 40 of the Crime and Courts Act 2013 and to proceed with Leveson 2 once criminal prosecutions were concluded. The Prime Minister will be aware that today there is a lobby of Parliament by the victims of phone hacking. He said a few years ago that
“we all did too much cosying up to Rupert Murdoch”.
Well, some of his Tory Brexit colleagues are certainly cosying up to Rupert Murdoch at the moment, but will he give a commitment today that he will meet the victims of press intrusion and assure them that he will keep his promise on this?
The Prime Minister
First, let me echo what the right hon. Gentleman said about the Orlando bombings. In terms of the Leveson issue, we said that we would make a decision about the second stage of this inquiry once the criminal investigations and prosecutions were out of the way. They are still continuing, so that is the situation there. I have met victims of press intrusion, and I am happy to do so again. Right now, people can accuse me of many things, but I think that cosying up to Rupert Murdoch probably is not one of them.
Jeremy Corbyn
My question was, “Will the Prime Minister meet the victims of phone hacking?” I hope he will, because they deserve it, and he promised that he would.
A major funder of the leave campaign has said:
“If it were up to me, I’d privatise the NHS.”
The hon. Member for Uxbridge and South Ruislip (Boris Johnson) has said:
“If people have to pay for”
NHS services
“they will value them more.”
Both he and the right hon. Member for Surrey Heath (Michael Gove) are members of a Government who have put the NHS into record deficit. These people are now masquerading as the saviours of the NHS—wolves in sheep’s clothing. Did not the hon. Member for Totnes (Dr Wollaston) get it right when she rejected the duplicity of this argument in the leave campaign and decided to join the remain campaign?
The Prime Minister
I was delighted with what my hon. Friend the Member for Totnes (Dr Wollaston) said about changing her mind, which is a brave thing for politicians to do, and saying that she thought that the NHS would be safer if we remained inside a reformed European Union. I believe that very profoundly, because the key to a strong NHS is a strong economy. I think there cannot be any doubt, with nine out of 10 economists, the Governor of the Bank of England, the International Monetary Fund, the OECD and all these other organisations saying that our economy will be stronger, and it is a strong economy that delivers a strong NHS.
Jeremy Corbyn
Last week, the Prime Minister gave a welcome commitment to the closing of the loophole in the posting of workers directive. We will hold him to that, but we are concerned about the exploitation of migrant workers and the undercutting of wages in this country as a result. On that issue, will he today commit to outlawing the practice of agencies that only advertise abroad for jobs that are, in reality, jobs in this country?
The Prime Minister
First of all, the right hon. Gentleman and I absolutely agree about the evils of modern slavery. That is why this Government passed the Modern Slavery Act 2015, with all-party support. We have doubled the fines that can be put on companies for exploiting labour in this way. We have strengthened the Gangmasters Licensing Authority, which has commenced and carried out a number of prosecutions, including in the east of England, where I was yesterday. We will continue to take action on every level to make sure that people are paid the wages that they should be paid and that protections are there on the minimum wage, and now on the national living wage. All those measures are vitally important, and we will continue with all of them. I want people to get a fair day’s pay for a fair day’s work.
Jeremy Corbyn
My question was about outlawing the practice of advertising by agencies only in other countries.
Tens of thousands of EU migrants work in our public services and do a fantastic job. Many people in Britain, also, are concerned about the impact of immigration on their local communities. Surely what communities need is practical solutions such as the migrant impact fund set up Gordon Brown when he was Prime Minister to deal with extra pressure on housing, schools, and hospitals. Will the Prime Minister now concede that it was a mistake to abolish that fund, and will he work with us to reinstate it as a matter of urgency to give support to those communities that are facing problems with school places and doctors’ surgeries?
The Prime Minister
The right hon. Gentleman is absolutely right. In answer to the question about employment agencies that only advertise for overseas workers, we are looking at that to see—we have announced this already—if we can ban that practice, because we do not believe it is right. Of course, the answer to so many of these questions is to make sure that we are training, educating and employing British people and getting them the qualifications they need to take on the jobs that our economy is creating. Today’s unemployment figures are another reminder of that.
In terms of funds to help communities impacted by migration, we have a pledge in our manifesto that we are looking forward to bringing forward, which is a controlled migration fund to make sure that we put money into communities where there are pressures. Of course there are some pressures and we do need to address them, and I am happy that we will be able to work on a cross-party basis to do that. As I have said many times, there are good ways of controlling migration, and one of them is the important rules we are bringing in so that people do not get instant access to our welfare system, but there are bad ways of controlling immigration, and leaving the single market and wrecking our economy is certainly one of them.
Jeremy Corbyn
Today a flotilla of boats is due to come along the Thames campaigning on fishing quotas not going to the domestic UK fleet. I have been looking out of the window and I have not seen them come yet, but presumably they are on their way. The Prime Minister will be very well aware that reforms that were made three years ago actually put the power back into the hands of member states, and it is the UK Government who have given nearly two thirds of English and Welsh fishing quotas to three companies, thus excluding the small fishing communities along our coasts. Will the Prime Minister stop blaming Brussels on this and tell our small-scale and sustainable fishing communities what action he will take to allow them to continue their work, and indeed go further out in collecting fish?
The Prime Minister
First, I thank the right hon. Gentleman for speaking about the reforms we carried through in the last Parliament; my hon. Friend the Member for Newbury (Richard Benyon) was absolutely crucial in delivering those changes. We have seen in the last five years an increase in the value of the UK fishing industry of something like 20%.
The point I would make is that we export every year about £1 billion-worth of fish to the EU. No country in the world has a trade agreement with the EU that does not involve tariffs—taxes—on the sale of its fish, so there is no way we would get a better deal from the outside than the deal we get on the inside. Working with our fishing communities, working with our fishermen, keeping that market open and making sure that we manage our fish stocks locally and appropriately are very much part of our plan.
Jeremy Corbyn
The Prime Minister’s Government still did hand quotas over to three very large companies at the expense of small communities around Britain. I hope that he will reflect on that.
With just eight days to go before the referendum, the Labour position is that we are going to be voting to remain because we believe it is the best way to protect families, protect jobs and protect public services. We would oppose any post-Brexit austerity Budget, just as we have opposed each austerity Budget put forward by this Government. Will the Prime Minister take this opportunity to condemn the opportunism of 57 of his colleagues who are pro-leave—these are Members who backed the bedroom tax, backed cutting disability benefits and backed slashing care for the elderly—who have suddenly had a damascene conversion to the anti-austerity movement? Does he have any message for them at all?
The Prime Minister
There are very few times when the right hon. Gentleman and I are on the same side of an argument. For people watching at home, when the leader of the Labour party—and, indeed, almost all the Labour party—a Conservative Government, the Liberal Democrats, the Greens, the official Ulster Unionists and the Scottish National party all say, “We have huge disagreements, but on this vital issue for the future of our country, the best option for Britain is to vote to remain in a reformed European Union,” that really says something.
The truth is this. This is a huge choice for our country, and choices have consequences. If we wake up on 24 June and find that we have remained in, our economy can continue to move forward. If we vote out, the experts warn us that we will have a smaller economy, less employment, lower wages and, therefore, lower tax receipts. That is why we would have to have measures to address a huge hole in our public finances. Nobody wants to have an emergency Budget. Nobody wants to have cuts in public services. Nobody wants to have tax increases. But I would say this: there is only one thing worse than addressing a crisis in your public finances through a Budget, and that is ignoring it. If you ignore a crisis in your public finances, you see your economy go into a tailspin and you see confidence in your country reduced. We can avoid all this by voting remain next week.
Amanda Solloway (Derby North) (Con)
Q3. Having recently undertaken a real ale tour of some my constituency’s finest public houses, and having sampled some of the finest ales that anyone is likely to taste —many of them brewed locally in Derby North, which is recognised as the real ale capital of the UK—may I ask the Prime Minister to join me in acknowledging the virtues and massive benefits to local economies from small and medium-sized breweries up and down the country?
The Prime Minister
I am happy to agree with my hon. Friend. Having spent last week at Shepherd Neame in Kent, and having spent yesterday at Greene King in Bury St Edmunds, I agree with her that a large quantity of real ale is one of the best ways to get through this gruelling referendum campaign, and I would recommend it to everybody. The British beer industry is in good health because of the duty cuts made by my right hon. Friend the Chancellor. Because of the micro-brewers tax regime, we have a lot of craft ale coming through in our country. It is an industry in a good state. The brewers that I am talking to and going to see want the single market open and they want us to remain in.
Angus Robertson (Moray) (SNP)
On Orlando and on the deaths in France, we on the SNP Benches join in the condolences that have been expressed by the Prime Minister and the Leader of the Opposition.
We are now only a week away from the biggest question that the UK has faced in a long time—continuing membership of the European Union. Exports of goods and services from the Scottish economy are massively important: hundreds of thousands of jobs depend on them. Meanwhile, our public services, including the NHS, are supported by many hard-working people from elsewhere in the European Union. Does the Prime Minister agree with me that if we want to protect jobs and if we want to protect our public services, we must vote to remain in the European Union?
The Prime Minister
I believe that the most important argument—there are many arguments people make, but this is the most important—is about the future of our economy. It seems obvious to me: you can listen to the experts, or you can just make a common-sense argument. Today, we have full access to a market of 500 million people. For an economy such as Scotland’s, which is such a big exporting economy, there is no way we would get a better deal on the outside of the single market than we get on the inside, so if we left we would see our economy suffer, we would see jobs suffer and we would see people’s livelihoods suffer. That is just plain common sense. I absolutely agree with the right hon. Gentleman that for jobs and for livelihoods, we should remain in. There is a consequence for the public finances, because if our economy is doing less well, our public finances would be doing less well, and that would have consequences for Scotland, too.
Angus Robertson
May I raise that issue with the Prime Minister? Today, we have learned from a Conservative Chancellor of the Exchequer and a former Labour Chancellor of the Exchequer that there would likely be £30 billion of cuts to public services or tax rises were there to be a Brexit vote. What impact would that have on public services in Scotland? Please can we learn now, before we vote, what impact that would have on the budget in Scotland, which pays for the NHS in Scotland, for our schools in Scotland, for local government and for all key public services? Is that not yet another reason why we must vote to remain in the European Union?
The Prime Minister
These figures are not based on what the Chancellor of the Exchequer is saying; they are based on what the Institute for Fiscal Studies and the National Institute of Economic and Social Research are saying. They are talking about a £20 billion to £40 billion hole in our public finances if Brexit were to go ahead. Those organisations are often quoted across this House—many times against the Government—because they are respected for their independence. Clearly, if that is the impact on the public finances, decisions to cut public spending in the UK Budget do have an impact, through Barnett, on Scotland. To anyone who says, “Well, these warnings could of course be wrong, or they could be inaccurate”, I would make the point—it is perhaps an uncomfortable one for the right hon. Gentleman—that there were of course warnings about the oil price before the Scottish referendum, and it turned out actually to be worse than the experts warned.
Mike Freer (Finchley and Golders Green) (Con)
Q4. Since the terrorist attacks in Paris and Brussels, many of my constituents are worried that remaining in the EU increases the risk of terrorism, fears exacerbated by the disgraceful comments of people such as Nigel Farage. Does my right hon. Friend agree with me that our security services are helped, not hindered, by the EU?
The Prime Minister
I would say very directly to my hon. Friend that I have done this job for six years and, working with the Home Secretary, I have seen how closely our intelligence and security services work with other services around the world. Of course we keep ourselves safe by investing in anti-terrorism policing and of course we keep ourselves safe by the way we work with the Americans and the “Five Eyes” partnership, but I am in no doubt that the increasing extent of information exchange and intelligence exchange that takes place through the European Union is of direct benefit to our country.
It is not just that you need a border; you also need information and intelligence to police that border properly. We are now seeing an enormous amount of exchange about criminal records, terrorist records and passenger name records. Of course, outside the EU, we could try to negotiate our way back into some of those agreements, but right now we are in them, we are driving them and we are making them keep people safe in our country.
Mr George Howarth (Knowsley) (Lab)
Q2. Knowsley is expecting to receive £10 million in EU funding over the next three years. EU funding has helped attract businesses to the borough, including QVC, which created 2,500 jobs. Is it not the case that that important funding from the EU could be lost if we vote next week to leave the European Union?
The Prime Minister
The right hon. Gentleman makes an important point. All the independent economic reports say very clearly that there is no financial saving from leaving the EU. The Institute for Fiscal Studies put it like this:
“we conclude that leaving the EU would not…leave more money to spend on the NHS. Rather it would leave us spending less on public services, or taxing more, or borrowing more.”
I would argue that there is a big dividend from remaining inside the EU, which we would start to feel next Friday, as companies would be able to see that Britain had made a decision, and the job creators, wealth creators and international investors would know that Britain meant business and they would invest in our country. There is no saving from leaving. That is what the experts agree.
Mr Alan Mak (Havant) (Con)
Q5. The number of children growing up in workless households has fallen by nearly half a million since 2010. Will the Prime Minister continue to tackle child poverty by focusing on rising wages, more jobs and a growing economy?
The Prime Minister
My hon. Friend is right that the most important thing we can do for parents in our country is help them to get a job, earn a living and provide for their family. In our life chances strategy, measuring worklessness and school attainment will be really important in helping to ensure that we continue to lift children out of poverty.
Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)
Q6. Thomas and Elke Westen live and run their businesses in Kirkcaldy, but, as Germans, they are denied a vote next week. They are hurt by the portrayal of immigrants in the EU debate. They leave for France on Sunday, and are considering leaving permanently if we exit the EU. Will the Prime Minister join my call for them and others in a similar situation to stay, as they are highly valued?
The Prime Minister
Of course, there are many people who come to our country, work hard, make a contribution and help to build our communities. It is important to get the numbers into some sort of perspective. I think 5% of our population are EU nationals—Italians, Germans, Poles, Spaniards and the rest of it—so if you stop 100 people in the street, only five will be EU nationals. It is just as the hon. Gentleman said. Look at our NHS—there are 50,000 EU nationals working as doctors, nurses and care assistants. Look at our care homes—there are 60,000 EU nationals helping to look after our elderly relatives with dementia and other conditions as they come towards the end of their lives. Yes, we need to make sure that people who come here work and make a contribution, but we should celebrate the contribution they make.
Mr David Nuttall (Bury North) (Con)
Q8. Given the Government’s recent enthusiasm for making forecasts and predictions, will the Prime Minister tell the House in which year we will meet our manifesto commitment to reduce immigration to the tens of thousands?
The Prime Minister
The last year for which EU migration was in balance—that is between the number of EU and British nationals leaving our shores to work in Europe and the number of EU nationals coming to live and work here—was as recently as 2008. Yes, we need to do more to control migration from outside the EU, and we are doing so, with the closure of bogus colleges and other measures. We are also doing more inside the EU, not least by saying that if people who come here do not get a job after six months, they have to leave, and that if they work, they have to contribute for four years before getting full access to the welfare system. Those are big changes. They are also sensible ways of controlling immigration. A non-sensible way would be pulling out of the single market, damaging jobs and our economy, and so having to explain to our constituents why we have a self-imposed recession.
Carolyn Harris (Swansea East) (Lab)
Q7. Many in my constituency of Swansea East are already struggling to make ends meet. The World Trade Organisation says that if we leave the EU we could face major tariffs on trade, and would have to renegotiate more than 160 trade agreements. Does the Prime Minister agree that leaving the EU would hit hard-working families the most by raising the cost of living, and that it is too big a risk to take?
The Prime Minister
The hon. Lady is right. It is always the poorest and those with the least who get hit hardest if an economy suffers a recession. There are two ways in which the cost of living could be impacted. She is absolutely right that if we leave the single market and go to World Trade Organisation rules, tariffs will be imposed on the goods we sell to Europe, which would make us suffer. Also, if the pound falls, as many independent experts forecast, the cost of living rises, the cost of the family shop rises and the cost of the family holiday rises. She is right that it is not worth the risk. We should not risk it—we should keep our country safe.
Kelly Tolhurst (Rochester and Strood) (Con)
Q9. Following the Chancellor’s welcome announcement about the launch of the new Thames estuary 2050 growth commission, will the Prime Minister outline his hopes for how the commission’s focus will deliver the much needed infrastructure and economic development that will allow north Kent to prosper, including in my wonderful constituency of Rochester and Strood?
The Prime Minister
Whenever I get a question from my hon. Friend, I remember how grateful I am that she is representing Rochester and Strood—happy days. For the 2050 growth commission, the key areas are skills and infrastructure. A serious amount of money is being committed to that infrastructure, and we need to look at things, including the lower Thames crossing, to ensure that the economy of that region makes the most of its potential.
Ruth Smeeth (Stoke-on-Trent North) (Lab)
Q12. Some 2,500 people are employed in the ceramics industry in my constituency. Their jobs are dependent on EU trade, their rights are protected by the EU social charter, and their town centres have been rebuilt with EU funds. With his friends in the leave campaign producing more spin than a potter’s wheel, does the Prime Minister share my fears that despite Europe’s flaws, a Brexit vote could leave us picking up the pieces of a broken economy for years to come?
The Prime Minister
I will nick that soundbite—it’s a good one. The hon. Lady is right. If we leave the single market and the European Union, the Council President has said clearly that that process probably takes two years, and after that we will have to negotiate a trade deal with the European Union. If that trade deal is like Canada’s, it could take seven years. We are looking at a decade of uncertainty for our economy.
On the ceramics industry, I am advised by my Parliamentary Private Secretary, who before coming to this House did a worthwhile job of working in that industry—[Interruption.] He may not be spinning pots any more, but he is spinning for me very effectively. Last year we exported £38 million in porcelain and china to the EU. If we were outside the EU without a trade deal and had World Trade Organisation tariffs, there would be a 12% tax. I do not want us to hit British manufacturers, car makers and aeroplane makers. We should be investing in and supporting those industries, not making their situation more difficult, which Brexit would undoubtedly do.
Robert Jenrick (Newark) (Con)
Q10. Thirty years ago when I was just a little lad—[Hon. Members: “Aah”] Thirty years ago, my parents quit their jobs and founded a small manufacturing business around our kitchen table. Today, British manufacturers—particularly small businesses—are worried because if we leave the European Union, they will continue to make their products to common European standards because they value the free market. They value the single market and want to export, but they are aware that the United Kingdom will have no say whatsoever in the formulation of those standards, and their competitive advantage will be destroyed. What advice does my right hon. Friend have for my parents and for small businesses and the millions of jobs that depend on them across the country?
The Prime Minister
I had always assumed that my hon. Friend was under 30, so I am shocked to get that news. He makes an important point. If we were to leave the EU, we would lose the seat around the table that sets the rules of the single market. Of course sometimes those rules can be annoying or burdensome, but at the end of the day those are the rules we have to meet. If we leave and have no say over those rules, we do not gain control, we lose it. That is a crucial argument, and it is why the majority of small businesses—as well as a very large majority of larger businesses—back staying in the EU.
Dr Alasdair McDonnell (Belfast South) (SDLP)
I endorse the Prime Minister’s comments about the deaths in Orlando and Paris and associate the Social and Democratic Labour party with those remarks.
I assure the Prime Minister that the SDLP is fully behind him in his efforts to secure a remain vote. The Brexit campaigners have made securing our borders their resounding war cry, but when it comes to the only land border between the UK and the rest of the EU we are dismissed and told that nothing will change there. A return to customs posts, passport checks and a hard border will be a critical economic issue for Northern Ireland’s voters in eight days’ time. Will the Prime Minister now, once and for all, clarify this point and tell the people of Northern Ireland what will become of the border if the UK votes to leave the European Union?
The Prime Minister
I thank the hon. Gentleman for his remarks about the Orlando shootings.
If we vote to stay in, we know what the situation is: we know that the common travel area works, we know it can continue and everyone can have confidence in that. If we were to leave—the leave campaigners want to make a big issue about our borders—we will have a land border between Britain outside the European Union and the Republic of Ireland inside the European Union. Therefore, you can only have new border controls between the Republic and Northern Ireland or, which I would regret hugely, you would have to have some sort of checks on people as they left Belfast or other parts of Northern Ireland to come to the rest of the United Kingdom. We can avoid these risks. There are so many risks here: risks to our children’s jobs, risks to our economic future, risks to our borders, risks to the unity of the United Kingdom. I say: avoid the risks and vote remain next Thursday.
Huw Merriman (Bexhill and Battle) (Con)
Q11. Next week, I will be visiting 25 schools in my constituency to explain both sides of the EU referendum argument to those of our population who will be the most heavily impacted by a decision they cannot make. Does the Prime Minister have any words for these young people for the remain segment?
The Prime Minister
I am very grateful for my hon. Friend’s hard work. What I would say is that, even if those people in our schools are not able to vote, this will affect their futures. I hope that, after being inspired by my hon. Friend, they will talk to their parents and their grandparents about wanting to grow up in a country with opportunity, and we are bound to have more opportunities if we remain in a reformed European Union with 27 other countries. I also think it goes to a point about what sort of country we want our children to grow up in; not just one of economic and job opportunities, but one where our country is able to effect change and get things done in the world. We do not diminish ourselves inside a European Union; we enhance the power of Britain and the greatness of our country.
Siobhain McDonagh (Mitcham and Morden) (Lab)
Approximately 11,000 of Marks & Spencer’s most loyal employees, many with over 14 years’ service, are about to get a serious pay cut. Cuts to Sunday pay, bank holiday pay and antisocial hours pay, all made on the back of the national living wage, mean they will take home less next year than they do this year, with some losing up to £2,000. This is not just any pay cut, this is a big fat Marks & Spencer’s pay cut. Does the Prime Minister agree with his Chancellor that cutting take-home pay at M&S or anywhere else on the back of the national living wage is wrong? If so, will he move to close the loopholes that make this possible?
The Prime Minister
Obviously, we want to see the national living wage feeding through into people having higher take-home pay, not lower take-home pay. We urge all companies to make sure that that is the case. I have not seen the information about Marks & Spencer, but it knows, like any retailer, that it needs to attract, retain and motivate the staff they have. It is absolutely crucial in retail, particularly with all the competition online, that it continues to do that, and it will not do that if it cuts people’s pay.
Jack Lopresti (Filton and Bradley Stoke) (Con)
Q13. I agreed with the Prime Minister on Europe when he said to the CBI on 9 November last year:“Some people seem to say that really Britain couldn’t survive, couldn’t do okay outside the European Union. I don’t think that is true…The argument isn’t whether Britain could survive outside the EU; of course it could.”So if, as I hope, despite the panic-driven negativity from the remain camp in Downing Street, the British people vote next week to become a free and independent nation again, will my right hon. Friend join me in embracing the great optimism and opportunity for our country and our people that such a momentous decision would bring?
The Prime Minister
As I said at the CBI, of course Britain can survive outside the EU—no one is questioning that. The question is: how are we going to do best? How are we going to create the most jobs and investment, how are we going to have the most opportunities for our children, how are we going to wield the greatest power in the world, how are we going to get things done? On all those issues—stronger, safer, better off—the arguments are on the remain side.
Tim Farron (Westmorland and Lonsdale) (LD)
I associate myself and my party across the country with the Prime Minister’s remarks about the killings in France and the brutal homophobic murders in Florida. The killer and his vicious homophobic act do not speak for Islam.
The wealthy elite fuelling the leave campaign will be unharmed by the inevitable hike in interest rates that will follow Britain’s exit from the EU and the decline in sterling. The rate rise will, however, hit millions of ordinary British people. It will cause people to lose their homes through repossession and push low-income people further into crippling debt. Will he advise his Tory Brexit colleagues that there is a long-term economic plan on offer—one that can help hard-working families not to suffer—and it is to vote remain next Thursday?
The Prime Minister
The hon. Gentleman and I are often on opposing sides of arguments, but it says volumes about the breadth of the campaign to remain in a reformed EU that we have the Liberal Democrats as well as the Labour party, the Greens, the trade unions, business, voluntary bodies and so many others all coming from different perspectives but—crucially—all saying that our economy will be better off, and therefore families and our country will be better off, if we remain in. He is absolutely right about interest rates. The last thing that homeowners and homebuyers need—the last thing our country needs—is a hike in interest rates damaging our economy. I am glad he supports a long-term economic plan. Such a plan should include our remaining in a reformed EU.
Nigel Adams (Selby and Ainsty) (Con)
Q14. I congratulate my right hon. Friend on honouring our manifesto pledge and delivering this historic referendum. Unfortunately, however, we have heard some hysterical scaremongering during the debate, and there are those in this House and the other place who believe that if the British people decide to leave the EU, there should be a second referendum. Will he assure the House and the country that, whatever the result on 24 June, his Government will carry out the wishes of the British people—if the vote is to remain, we remain, but if it is to leave, which I hope it is, we leave?
The Prime Minister
I am very happy to agree with my hon. Friend. “In” means we remain in a reformed EU; “out” means we come out. As the leave campaigners and others have said, “out” means out of the EU, out of the European single market, out of the Council of Ministers—out of all those things—and will then mean a process of delivering on it, which will take at least two years, and then delivering a trade deal, which could take as many as seven years. To anyone still in doubt—there are even Members in the House still thinking about how to vote—I would say: if you have not made up your mind yet, if you are still uncertain, just think about that decade of uncertainty for our economy and everything else, don’t risk it and vote remain.
Catherine West (Hornsey and Wood Green) (Lab)
The North Middlesex hospital accident and emergency unit is in complete meltdown. Will the Prime Minister commit to taking swift action to tackle this crisis?
The Prime Minister
I understand that this is a very busy accident and emergency unit: it received more than 13,600 patients through its doors in April alone. It manages, however, to carry out 40,000 operations and more than 62,000 diagnostic tests every year, and since 2010 the trust has recruited 120 more doctors and 280 more nurses, but the Health Secretary will continue to monitor the matter closely. This brings us back, however, to the core argument today: if we remain in, we will have a stronger economy, and then, yes, we will have to take the proceeds of that growth and continue to put them into the NHS, as I have always done as Prime Minister.
Mr Christopher Chope (Christchurch) (Con)
I am looking forward to the British people giving me the opportunity to vote against the vindictive emergency Budget. Will my right hon. Friend explain, if the Government are so strapped for cash, why they remain intent on spending £50 billion on HS2?
The Prime Minister
We will be strapped for cash, if we believe the Institute for Fiscal Studies or the National Institute of Economic and Social Research—both impeccably independent—who say that there would be a hole in our public finances of between £20 billion and £40 billion. You do not have to be an economic expert to see this: if the economy shrinks, and there are fewer jobs and lower wages, there will be less in tax receipts. If there is less in tax receipts, we will clearly need to make cuts, put up taxes or increase borrowing. It is a simple matter of mathematics. There is an easy way to avoid that situation—vote to stay in a reformed European Union next Thursday.
Points of Order
(7 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Peter Bone (Wellingborough) (Con)
On a point of order, Mr Speaker. According to newspaper reports—[Interruption.]
Mr Speaker
Order. I want to hear the hon. Gentleman’s point of order, which I suspect might relate to topical matters.
Mr Speaker
We are in the realms of speculation here. If there were to be such a Budget, it would have to be delivered here and we would have been notified of it in advance. There is no such declared intention. There are all sorts of briefings, but to my knowledge, there is no such declared intention. If the Chancellor were here and wanted to comment on the matter, he could do so, but he is not, so I fear that he will not. If the Chancellor manifests himself during the course of today’s proceedings —there is quite an important debate taking place in the House today that relates to economic matters—the hon. Gentleman might choose to raise the matter with him. We shall have to await the development of events.
Several hon. Members rose—
Mr Speaker
I shall save up the hon. Member for St Albans (Mrs Main) for later. I call Mr David T. C. Davies.
David T. C. Davies (Monmouth) (Con)
Further to that point of order, Mr Speaker. You seem to have confirmed that you are not aware of any such Budget. That being the case, is it in order for members of the Government to be going around telling the press that there is such a Budget when it does not in fact exist?
Mr Speaker
The hon. Gentleman is being a bit cheeky. I know of no such plan. The hon. Gentleman is an assiduous constituency representative and he is a politician. He knows very well that all sorts of things are speculated upon and made the subject of conversation and rumour. All I know is what concerns the business of the House today. What people say outside the House is a matter for them. If people have important things to say on public policy—between now and next Thursday, for example—it would perhaps be prudent and judged to be courteous to say them in the House of Commons.
Mrs Anne Main (St Albans) (Con)
On a point of order, Mr Speaker. I am sure it was an error on the part of the Leader of the Opposition, but he said that there were no boats outside on the Terrace—[Interruption.] On the Thames by the Terrace. May I confirm that the Wayward Lad was certainly giving voice, in a way that concerned some of the river authorities? These boats were indeed saying “Vote Leave”, and some of them have spent three days coming up the river to convey their views to those on Terrace. We wish them well.
Mr Speaker
It is always useful to have a bit of information, but I am not responsible for boats—or indeed for what Hyacinth “Bouquet” used to call “riparian entertainments”. They are not a matter for the Chair.
Mr Christopher Chope (Christchurch) (Con)
On a point of order, Mr Speaker. We are about to embark on a very important debate that is being led by the shadow Chancellor on—[Interruption.]
Mr Speaker
Order. Some Members are disquieted because they want to get on with the debate. I want to get on with the debate, too, but points of order must be heard. They can be dealt with more quickly if we hear them.
Mr Chope
We are about to embark on a very important debate on the economic benefits of UK membership of the European Union. The shadow Chancellor of the Exchequer is going to lead the debate. Surely it is essential that the Chancellor of the Exchequer is in the House to answer the points that are made and to defend the ludicrous stance that he has been taking in the media. Why is the Chancellor of the Exchequer not here? What can this House do to require him to maintain its conventions and attend this debate?
Mr Speaker
What I would say to the hon. Gentleman, and to those who are attending our proceedings, is that who the Government field to respond to a debate is a matter for the Government. The hon. Gentleman will probably—on the whole—be relieved to know that the matters for which I am responsible do not include the Chancellor’s movements, and I am bound to say that—on the whole—that is a considerable solace to me too.
There will be people, and I get the impression that the hon. Gentleman is one of them, who will feel that it is somewhat discourteous if a very senior Minister who is responsible for the policy area in question is not present in the Chamber, but it is not against the rules of the House. I would hope that the Chancellor would have some interest in what Members think about the matter. That would be courteous, and it would show a degree of humility and respect, but beyond that, it is a matter for the Government to choose. I gather that the Secretary of State for Foreign and Commonwealth Affairs will respond to the shadow Chancellor, and that is perfectly orderly.
Sir William Cash
(Stone) On a point of order, Mr Speaker. It relates to the resolution of the House of Commons of 1997, which states:
“It is of paramount importance that Ministers should give accurate and truthful information to Parliament, correcting any inadvertent error at the earliest opportunity.”
Last week, in reply to a question from my hon. Friend the Member for South Dorset (Richard Drax), my right hon. Friend the Prime Minister said that he had
“secured two vital treaty changes”.—[Official Report, 8 June 2016; Vol. 611, c. 1184.]
I subsequently sought a correction. Today, I received a letter from the Prime Minister stating that my letter to him was “misleading”. His reply flies in the face of the published facts, the law and common sense. In those circumstances, Mr Speaker, will you take note of the fact that I am stating that I believe that there has been a breach of that resolution?
Mr Speaker
I do take note of what the hon. Gentleman tells me, and I take what he has said very seriously. He is an extremely long-serving and serious-minded Member of the House. However, I have already advised the hon. Gentleman—to whose representation I paid very close attention—that I do not think it proper or necessary for me to add anything to what has already been said on this matter. I would simply say to him, and to other Members, that although of course I have my own thoughts on these matters, I do seek wise professional counsel, which is impeccably independent and based on very great experience in the service of the House. That does not automatically mean that it is right, but it does mean that it is serious.
I think we must leave it there. I have, I think, very generously given the hon. Gentleman full opportunities to record this thoughts, and they are now recorded.
Opposition Day
(7 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
EU Membership: Economic Benefits
(7 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
18:59 - The House divided: - Ayes: 257 / Noes: 0 - Question accordingly agreed to.
Mr Speaker
An amendment was tabled, but I should advise the House that I have not selected it.
John McDonnell (Hayes and Harlington) (Lab)
I beg to move,
That this House believes that the UK needs to stay in the EU because it offers the best framework for trade, manufacturing, employment rights and cooperation to meet the challenges the UK faces in the world in the twenty-first century; and notes that tens of billions of pounds worth of investment and millions of jobs are linked to the UK’s membership of the EU, the biggest market in the world.
This is the last opportunity that the House will have to debate the issue of our membership of the European Union before our people vote in the referendum next week. It has been described as the most important decision for a generation, and it may well turn out to be so. We therefore have a responsibility to ensure that it is made on the basis of the fullest possible debate, which will be considered and, hopefully, calm.
We need to acknowledge, however, what many of our constituents have been telling us about the debate so far. It has not, as yet, risen to the occasion. On the doorstep, people repeat that they simply want the facts and our honest assessment of the consequences for them and our country of whether or not we remain in the European Union.
John McDonnell
I will give way to the hon. Gentleman when I have finished this paragraph. I will be taking interventions, Mr Speaker, but I know that many Members wish to speak, so I shall try to limit the number of times that I give way.
On the doorstep people have simply asked for the facts, and I have to say many of them say they have been turned off by the exaggerated claims on both sides of the argument—put off by references to world war three on one side, and to comparisons of the European Union with the Third Reich on the other. “Project Fear” from both sides simply is not working. People will not be scared into the ballot box.
Sir Edward Leigh
I am most grateful to the shadow Chancellor for his courtesy in giving way, but does he understand that many of us believe that the real threat to our economy is not whether we stay in the EU or leave it; the real threat would be the implementation of the disastrous tax-and-spend policies that all his life he has advocated?
John McDonnell
I always find the hon. Gentleman’s interventions entertaining to say the least, but may I return to the subject of today’s debate?
Many people have seen this debate going on within the Westminster bubble among the Establishment. They do not feel involved, and many suspect that what they are witnessing is an unseemly battle for the succession in the Conservative party rather than a considered debate about the future interests of our country.
Much of the media coverage of the internal Tory strife has drowned out other parties. Polling suggests that many of our own Labour supporters are unclear about Labour’s position. So let people be absolutely clear: as the motion before us today unambiguously states, Labour is for remain. Today’s motion spells it out. It is about jobs, investment, trade with our largest market and the protection of the employment rights of workers so they can secure the benefits of participation in that market, but for many of us it is also about creating another Europe—a Europe that is more democratic, that promotes social justice as well as prosperity, that is more equal and sustainable economically and environmentally. We must do nothing now that jeopardises our European future.
John Redwood (Wokingham) (Con)
Does the shadow Chancellor share my concern about all those many cases where a UK manufacturing plant shut down and job losses have been very great, only to see new investment made in another EU country benefiting from specific and general grants and soft loans from the EU?
John McDonnell
My fear is that if we vote for Brexit we will cut ourselves off from the opportunity of that financial support as well, and that many other companies will move out. It is only courteous to also congratulate the right hon. Gentleman on his 65th birthday today.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
My hon. Friend is absolutely right about the bubble in Westminster. Does he not think that over these next few days every Member of this House has got to tell people in our constituencies what leaving the EU would mean for them? In Huddersfield it would mean catastrophic loss of income into our university and catastrophic impact on manufacturing industry.
John McDonnell
I fully agree. It is clear that a large percentage of people have not made up their minds yet, and that there are others who can be influenced, and it is essential that they make this decision on concrete facts rather than exaggerated claims like those we have seen so far.
Let us be absolutely clear: this is about jobs. There are 3.5 million jobs directly dependent on Britain’s membership of the EU. These will be put at risk as a result of a Tory Brexit. The traditionally Eurosceptic Treasury estimates that unemployment would rise following Britain’s leaving the EU by between 520,000 and anything up to 820,000. EU member countries accounted for nearly half of the UK’s stock of inward investment at £496 billion. This is far more than the US or any other single country.
Philip Davies (Shipley) (Con)
Can the hon. Gentleman answer a question that those on the Government Benches have been unable to answer so far? Why should we spend over £10 billion a year net to the EU in order to have a £68 billion trade deficit with the EU, when anybody with even a modicum of common sense knows that we can have a £68 billion a year trade deficit with a declining part of the world’s economy for nothing?
John McDonnell
The single market provides us with the largest market we have, and enables us to create long-term secure jobs. The benefits of our contribution come in the growing economy we have had over the years.
Several hon. Members rose—
Geraint Davies (Swansea West) (Lab/Co-op)
May I intervene on this very point?
Mr Speaker
Order. Before the hon. Member for Swansea West (Geraint Davies) intervenes, let me say that Members must not harangue the hon. Member for Hayes and Harlington (John McDonnell). He is generously giving way, but people should not insist on intervening until it has been agreed. I call Mr Geraint Davies.
Geraint Davies
I apologise for my Welsh mannerisms.
May I simply put it to the shadow Chancellor that only two countries—Holland and Germany—have a trade surplus with the UK, while the other 26 have a deficit, and does he therefore agree that in the event of Brexit those countries would vote for tariffs to protect their own jobs and we would be turning our back on 44% of our trade?
John McDonnell
The concern, obviously, is that tariffs would be introduced, but also the negotiating period to establish a new trade deal will take, optimistically, as the Prime Minister has said, seven years, if not longer.
Mrs Anne Main (St Albans) (Con)
I want to pay tribute to the thoughtful way that the hon. Gentleman is saying this should not be “Project Fear”. May I ask him, therefore, to join those of us who agree that this panic punishment Budget that has been suggested is not the way we should treat people who choose to vote leave? Can he say that his side would not implement those punitive measures, including slashing the NHS budget?
John McDonnell
We have yet to see the details of this Budget proposed this morning, but let us make it absolutely clear: the Labour party is an anti-austerity party and we have voted consistently against austerity measures.
Alex Salmond (Gordon) (SNP)
Is the shadow Chancellor aware that not only have we had the Chancellor’s proposed emergency Budget, but we have a six-point plan from the Brexiteers including a Finance Bill, which sounds less like a campaign than a coup to take over the Government? Does the shadow Chancellor detect any enthusiasm in the country for replacing this extreme right-wing Government with an even more extreme right-wing Government?
John McDonnell
I will come on to that subsequently.
With regard to trade, the EU is Britain’s largest export market by a long way. Some 44% of UK exports go to the EU, worth £223 billion. That is more than double the value of exports to the US, and more than 10 times the value of exports to China. That just gives an idea of the scale of the impact of the EU on our economy. It is argued that withdrawal from the EU will have no implications for jobs, investment and trade, almost as though things will just carry on as before. That flies in the face of experience of all other trade relationships. Access to the single market would have to be renegotiated. That would take at least two years, and more likely the seven to 10 years predicted by others. The climate of uncertainty created would undermine the critical factors investors and decision makers require when they invest for the long term: certainty, security and stability.
We have seen only this morning in Rolls-Royce the latest example of a company expressing its doubts about its long-term investment plans if Brexit goes ahead. We have also seen competitors across Europe welcoming with open arms those companies considering relocation if the decision goes to Brexit.
Angela Rayner (Ashton-under-Lyne) (Lab)
In my constituency people on the doorsteps are talking to me about two things: the economy and immigration. Does my hon. Friend agree that leaving Europe would affect only one of those things—our economy, which will be negatively affected? Leaving will do nothing around immigration.
John McDonnell
I will come on to that later in my speech, but the evidence is clear: the impact on our economy overall will set us back a number of years. Brexit will undermine our economy and undermine the futures of our families and communities, while at the same time doing nothing with regard to migration overall.
Sir William Cash (Stone) (Con)
In response to my hon. Friend the Member for Shipley (Philip Davies) referring to the trade deficit, will the shadow Chancellor comment on the fact that our trade deficit in export of goods and services with the other 27 member states is now £67.8 billion and has gone up by £10 billion this year alone, but our trade surplus with the rest of the world is £31 billion, up by £7 billion in the same year? Germany, however, has a trade surplus with the rest of the EU of £81.8 billion. What kind of single market is that for us?
John McDonnell
I join the hon. Gentleman in his critique of Conservative economic policy over the past seven years, which has undermined our ability to export, but is he really proposing to impose tariffs against the rest of Europe, which would undermine free trade generally? If that is the case, he would be undergoing a damascene conversion to a planned economy, which would amaze me.
The Labour party places critical importance on employment rights because those rights enable ordinary workers to secure the benefits of the jobs, investment and trade that membership of the single market brings. To be frank, over the past 40 years, as trade unionists we have been promiscuous in where we have gone to secure those rights. In the decades when trade union rights were under attack in this country, we have gone to the EU to secure those protections. And we have succeeded. We have secured statutory holiday pay, maternity rights and the right to parental leave, TUPE protection and a maximum working week. This has served not only to protect British workers but to prevent a race to the bottom across Europe, so that our own and all other workers are protected, wherever they work. There is a well founded concern that withdrawal would put jobs, investment, trade and employment at risk.
Chris White (Warwick and Leamington) (Con)
I recently spoke in the debate on the Queen’s Speech and called for an industrial strategy, not least because the manufacturing sector needs long-term assurance if it is to succeed. Irrespective of whether the shadow Chancellor agrees on the need for an industrial strategy, does he agree that a vote to leave would create unwelcome uncertainty at a time when our vital manufacturing sector needs stability?
John McDonnell
There is a desperate need for long-term, patient investment in our manufacturing base in order to develop an industrial strategy. The threat of Brexit is undermining those who make the decisions about that long-term, patient investment, and Brexit would be a disaster for recreating our manufacturing base in this country.
Mr Dennis Skinner (Bolsover) (Lab)
There is no better time than this for the labour movement to be considering employment rights in the manner that my hon. Friend is now doing. There is a pit site at Shirebrook that is now owned by Mike Ashley where he employs only 200 full-time employees and 3,000 people, mainly east Europeans, on zero-hours contracts, and where a lady went to the toilets to give birth to a child on new year’s day. That is horrific. At that pit site, after the war, east Europeans got the same money as me for working down the coal mine and they were members of the NUM. We have to get rid of this idea that people can be brought here on zero-hours contracts. If we state it loud and clear here today that we are going to get rid of this Mike Ashley and thousands of others around Britain, we will set fire to this campaign.
John McDonnell
I wholeheartedly concur not only with the criticisms that my hon. Friend has levelled but with his solution, which is based on the development of employment rights that have been consistently undermined in recent decades in this country.
As I was saying, there is a well founded concern that withdrawal will put jobs, investment, trade and employment at risk. The unpredictability of the outcome of this leap in the dark has united virtually every economist and economic institution of any standing, from the International Monetary Fund and the OECD to the Bank of England and the Institute for Fiscal Studies, in expressing their concerns about the risk to the economy. In the past 72 hours, we have witnessed the reaction of the world markets to shifts in the polls pointing to a possible Brexit, with £100 billion knocked off the value of shares, and the value of the pound dropping. The Brexit campaign has done more damage to capitalism in four days than the Socialist Workers party did in 40 years. This comes at a time when our economy is extremely fragile. Six years of unnecessary austerity, the chaotic failure of the various fiscal rules adopted by this Government, and our record current account deficit have made our economy extremely vulnerable to even a minor shock. And as the markets have just demonstrated, leaving the EU would certainly not be interpreted as just a minor shock.
Let me turn to the issue of migration. I believe that the economic arguments for remaining are overpowering—
Pete Wishart (Perth and North Perthshire) (SNP)
I want to make an appeal to the hon. Gentleman and the Labour Party: please don’t go near immigration. You have no credibility on that issue. You’re all over the place. You’ve been bullied by the Tories, and raising immigration will only help the leave case.
Mr Speaker
Order. I have never been bullied by anybody, and I am not all “over the place” on this matter. The Speaker is keeping out of it. I am simply seeking to facilitate fair play, and I remind the hon. Gentleman of the correct parliamentary language.
John McDonnell
With the greatest respect, I ask the hon. Member for Perth and North Perthshire (Pete Wishart) to listen to my speech before he comes to a judgment on this matter.
I believe that the economic arguments for remaining are overpowering, but the polls and the feedback from the doorstep confirm that immigration is a key motivating factor for some people in different parts of the country. Let me deal with some of the economic arguments around migration. I admit that I do not come to the debate on immigration completely objectively. I am the grandson of an Irish migrant. My grandfather’s generation of Irish migrants and subsequent Irish migrants built many of this country’s roads, railways and homes. They staffed the factories while many Irish women were the nurses who formed the backbone of the NHS and the teachers who taught in our schools. They all contributed to making this country’s economy the fifth largest in the world. That is what migrants overwhelmingly do. Over the last decade, migrants from new EU member countries contributed £20 billion more in taxes than they used in public services and benefit payments. More than 52,000 EU migrants work in our NHS. With labour shortages reported in key sectors such as construction, it is migrant labour that helps to fill the gap. The Royal Institution of Chartered Surveyors’ recent surveys show that a lack of skilled workers is already hurting the delivery of infrastructure projects.
Let us admit, however, that genuine concerns have been expressed about the impact of migration on wages and employment, as my hon. Friend the Member for Bolsover (Mr Skinner) suggested. Those concerns should not be dismissed. Research presented by Oxford University’s Migration Observatory has demonstrated that migration has not had the impact of reducing wages except in a small proportion of the workforce: those at the lowest end of the pay scale. This has to be addressed, and that is why Labour is calling for greater protection for this group of workers. Yes, reforms are needed with regard to the free movement of labour, to introduce greater protection of wages and employment rights and to halt the undercutting of wages and employment conditions. In government, we will renegotiate to give effect to those changes.
Other concerns have been expressed at the pressure placed on our public services by migration. The reality is that our public services struggle to cope with existing demand because of the austerity measures, the cuts and the chronic underfunding forced through by this Government over the last six years. But there is an argument that where pressures on public services increase in a particular area, funding must be made available to respond to that increased demand. That is why Labour has consistently argued for a special migration fund to assist those communities where demand increases. We condemned the abolition of the fund that was set up by Gordon Brown, but we welcome the Prime Minister’s statement today that he is exploring the establishment of a fund of that sort. We also want to seek further European funding to support this initiative, and that will be on our agenda.
Mark Pritchard (The Wrekin) (Con)
Does the shadow Chancellor agree that being an EU citizen in the United Kingdom might be an uncomfortable experience at the moment, particularly in the light of the language and tone being used by one of the leaders of the Brexit campaign, Nigel Farage? Does he also agree that if we were to remove those EU citizens and put in place the 50,000 cap proposed by Nigel Farage, we would see an exodus of people who work in our care homes, our hospitals and our schools? That would have a real impact on our ability to deliver public services. Is it not the case that we are an open and tolerant United Kingdom?
John McDonnell
I find some of the statements that have been made reprehensible and irresponsible, because they do not weigh up the impact of the policies being advocated on our public services and our economy.
Jim McMahon (Oldham West and Royton) (Lab)
I am listening to the debate and the contributions from across the Floor, and I am staggered, again, that people who come here to make a new life for themselves, uprooting their family to make a contribution to this country, are the scapegoats for the austerity measures of Government Members.
John McDonnell
Nothing more than that eloquent statement needs to be said.
Migration cuts both ways: British people have been among the main beneficiaries of the free movement of labour and people across Europe, with 1.2 million UK citizens living permanently in other EU countries and a further 1 million living in another EU country for at least part of the year. I remember the “Auf Wiedersehen, Pet” generation, when British workers secured jobs across Europe when our own economy was in recession. The eurozone is slowly coming out of recession and will, once again, provide opportunities that our own people will want to take advantage of. Young people, especially, are now studying, working and settling in large numbers across Europe. The number of UK students studying in Europe through the Erasmus scheme has risen by 115% in less than a decade.
Mike Gapes (Ilford South) (Lab/Co-op)
As honorary president of Labour International, may I remind my hon. Friend that any overseas voters who have lived abroad for up to 15 years and wish to get a proxy vote in this referendum need to apply by 5 o’clock today?
John McDonnell
I suggest that all those engaged with social media apply as quickly as possible.
Dr Philippa Whitford (Central Ayrshire) (SNP)
I, too, echo the point about the number of EU migrants who work in the NHS, which I have come from. They include my husband, who has worked here and paid taxes here for 30 years and yet is excluded from the vote. We should also remember that the people we export to Europe are predominantly those who have retired there. We import young working people and we export retired people, and we should remember that balance.
John McDonnell
That is an interesting point, and in this debate people have talked about our ageing population and just how much we need youth coming into this country to enable us to balance the population growth.
Barbara Keeley (Worsley and Eccles South) (Lab)
We need to point out that one in five of the adult social care workforce in this country—230,000 people—was not born here. Greater London, in particular, is reliant on migrant care workers, with 60% of the adult social care workforce born abroad. Much of that sector would collapse without them, so those who talk about interfering with and restricting this have to remember that our care sector relies on these people.
John McDonnell
It is true to say that our care sector would collapse without the migrant labour we currently have, and that is a danger.
Much of the EU debate so far has dwelled on the past and immediate present, but as a country we need to look to the future. Many of the issues we face are transnational: climate change, tax evasion, tax avoidance and the refugee crisis. They cross country boundaries. The EU provides us with the vehicle to work in co-operation with our European neighbours to tackle these issues, but we have to recognise that people do care about what they see as a loss of sovereignty. A strong reform agenda is needed to ensure that where sovereignty has been pooled in decision making, there is democratic accountability. That means making decisions in the EU completely open and transparent, and ensuring that the Commission is effectively democratically accountable. It starts within the UK, by ensuring that we have more open and effective mechanisms for holding to account those Ministers and others who represent us in the EU decision-making process.
Britain takes the EU presidency shortly, which will enable us to lead the drive for reform. For the first time in a generation, there are parties and movements across Europe mobilising on an agenda of reform that we can share. There is the real and growing prospect now of a new European progressive coalition emerging that is willing to seize the agenda of the EU to end austerity, secure employment growth, tackle tax evasion and avoidance, confront climate change and of course co-operate to deal with the tragic humanitarian crisis of the refugees.
To conclude, in the overall debate on the EU I think I am where a great many British people are when it comes to making the decision next week. I did not vote to go into the Common Market, and I have been generally a Eurosceptic, critical of the frustrating bureaucracy of the EU. I am not a Europhile or a Europhobe. People like me are carefully balancing the prospects for my family, my community and my country. I think that, like me, many will take a pragmatic view that the leap in the dark of leaving Europe is a risk too far. For Labour supporters there is the added concern that needs to be taken into account: this would be a Tory Brexit. On 24 June, if Brexit goes through it will be a Tory Government who will be implementing withdrawal.
Mrs Cheryl Gillan (Chesham and Amersham) (Con)
Will the hon. Gentleman give way?
John McDonnell
If the right hon. Lady will let me, I will conclude.
It is likely, given the political fall-out from the campaign, that we would be talking about a Tory Government much further to the right than this one, with the UK Independence party yapping at their heels. I ask Labour supporters to ask themselves: do they really trust the hon. Member for Uxbridge and South Ruislip (Boris Johnson), and the right hon. Members for Surrey Heath (Michael Gove) and for Chingford and Woodford Green (Mr Duncan Smith) with our jobs, public services and employment rights? It is a risk too far and it closes the door on a European future that we have the opportunity of decisively shaping in the next few years. I urge hon. Members to support the motion and our people to vote next week to remain. But I also want to assure our people that whatever the result the decision will be respected and that the Labour Party will listen to the people and respond to their concerns. We will seek to bind our country together and not let the extremes divide us.
The Secretary of State for Foreign and Commonwealth Affairs (Mr Philip Hammond)
I welcome the opportunity to speak in this crucial debate, Mr Speaker, and I consider that the subject matter falls perfectly well within my remit of foreign affairs.
As we approach the final stage of this campaign, it sometimes feels that we have lost sight of the key question that people are supposed to be answering in the polling booths a week tomorrow. That question is not, “Do we like the EU?”, or “Do we agree with everything it does?” It is not, “What message do you want to send the EU?” or even, “What message do you want to send the Government?” It is certainly not, “Is the EU perfect?” I would be the first to say loudly that it is not. This is a straightforward question that requires a clear-eyed, hard-headed analysis and response: “Are we safer, stronger and better off inside a reformed EU or outside it?” As Foreign Secretary, I know as well as anyone the frustrations of decision making by committee of 28 and the compromises that entails, but I also know that we are winning the arguments in Europe and are increasingly influential in shaping its future. I know, too, that we have greater global influence as a result of being a leading member of the world’s largest trading bloc.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
The right hon. Gentleman asked the question that we hear all too often: is the EU perfect or imperfect? The reality is that people complain that their council is imperfect. Unbelievably, some people in Scotland even complain that their Government are imperfect. A lot of people definitely complain that Westminster is imperfect. I find that a lot fewer people complain about the EU being imperfect, so can we stop saying that the EU is uniquely imperfect? There are imperfections at all levels of government, and to brand the EU in that way is a problem. The EU is a club for independent countries, which Westminster most certainly is not; it is a family of nations, which this is not.
Mr Hammond
I am grateful to the hon. Gentleman. He certainly did not hear me claiming that the EU was uniquely imperfect. It is just another imperfect institution among very many, including our own Government, I am certain.
I know that we are safer because we work with other EU member states to tackle the threats of terrorism and organised crime, and I know that we are better off for being part of a market of more than 500 million consumers, with the combined economic weight of a quarter of the world’s GDP, when negotiating trade deals with the rest of the world. I want to dwell on that point, because it is fundamental. We said back in 2010 that our economic security and our national security are two sides of the same coin, and it remains true today. Without economic security, there is no national security. How could we be safer if we could not afford to invest in our nation’s security and defence? How could we be stronger and more influential if our economy was shrinking?
John Redwood
How can the Foreign Secretary say that we are more secure and better off? If we take the fishing industry, for example, the number of fishermen has halved since we joined the EU and the industry has been under a common fisheries policy that has driven us into import dependence on other countries.
Mr Hammond
I say that because I take a holistic view. I am looking at the interests of the United Kingdom as a whole, taking into account all the pluses and minuses of our EU membership—yes, there are negatives as well as positives—balancing those arguments and reaching a conclusion about the net benefit to this country of being a member of the European Union.
Mark Pritchard
My right hon. Friend is absolutely right that there can be no economic security without national security. Will he tell the House how many of our NATO allies want the United Kingdom to leave the European Union? Many in the Brexit camp invoke Commonwealth leaders. Perhaps he can enlighten the House about how many Commonwealth leaders want the UK to leave the European Union.
Mr Hammond
My hon. Friend knows very well that the answer to both those questions is zero, but it goes further than that: I have not found any foreign leaders at all urging Britain to leave the European Union and saying that Britain would be a more influential and valuable partner if it left the EU.
Mr Hammond
I will give way in just a moment, but I need to make some progress, because many Members wish to speak.
The hon. Member for Hayes and Harlington (John McDonnell) set out some of the economic benefits of our continued membership of the EU. By the way, I welcome his candid assessment of the achievements of the SWP over the past four decades—I never thought that I would hear that coming from his mouth. I agree with him that workers’ rights such as paid holidays and maternity and paternity leave are important. However, it is perhaps worth reminding him that it was a Tory-led Government who abolished Labour’s jobs tax and took 3 million of the lowest paid out of income tax altogether, and that it is this Conservative Government who are introducing the statutory national living wage, which addresses his point about the wages of the lowest paid.
It is also worth reminding the hon. Gentleman—the Labour party periodically appears to forget this—that the most fundamental right for any worker is the right to have a job and a pay packet at the end of the month. That is a right that 2.5 million more people enjoy today under a Conservative Government than in 2010 under a Labour Government, which is the result of Conservative fiscal management and Conservative economic reforms. A Tory-led Britain that is a member of the European Union has delivered record levels of employment.
Sir William Cash
The Foreign Secretary has just referred to the net benefit to the United Kingdom from being in the single market. Will he tell me how a net benefit is actually a UK trade deficit? According to the House of Commons Library and the Office for National Statistics, in our trade in goods and services with the other 27 member states, we had a deficit of no less than £67.8 billion in 2015, which was up £10 billion on the previous year and is escalating. How is that a net benefit?
Mr Hammond
I shall come to that in a minute, but my hon. Friend dwells like an old-fashioned mercantilist on the trade statistics alone. I suggest to him that there are wider issues at stake about the overall impact on our economy and the benefits of the growth, investment and dynamism that being part of a 500 million-strong market of very wealthy consumers delivers to us.
Alison McGovern (Wirral South) (Lab)
I have been very happy to campaign in a cross-party way to remain, but as the Foreign Secretary has criticised my party’s record in government, may I ask him whether his Government’s cuts, loaded on to the poorest parts of our country, have made too many people question whether they have anything to lose in the referendum? Their wages have been falling since the crash, which has damaged their confidence in our economy to deliver for them. Does he believe that, when we vote to remain, we need to see real action to help people in the poorest parts of this country?
Mr Hammond
Yes, but we will do that only by delivering a robust economy that is soundly based and can go forward in the future. The most effective way of doing that is by being part of the European Union.
Our membership of the EU gives us both the freedom to trade in the world’s largest single market—a market of more than 500 million consumers—without tariffs and the bureaucracy of customs barriers, and access to more than 50 other markets besides, through EU free trade agreements. The benefits of being in that single market are clear for us to see: 44% of Britain’s exports go to the EU. How much of that trade would be lost if we put up the shutters and renounced our EU membership? How many businesses and employees who depend on that trade would go to the wall? How long would it take to negotiate a new trade agreement with our European neighbours? What would the terms be? I am prepared to bet that they would be nothing like as favourable as the terms that we have on the inside.
Andrew Gwynne (Denton and Reddish) (Lab)
What assessment has the Foreign Secretary’s Department made of the length of time that it would take for the British Government to negotiate not only a trade deal with the European Union, but, as he mentioned, all the free trade deals that currently exist between the EU and other parts of the world, so that we can trade with the rest of the world?
Mr Hammond
The hon. Gentleman raises a good point, and he will have heard the Prime Minister talking about that very issue only a few moments ago. We can expect that it would take us at least two years to negotiate our exit from the European Union if that was what the British people decided on 23 June. Thereafter, we would have to negotiate a trade deal with the European Union, and then trade deals with the 53 other countries around the world with which the EU has free trade agreements.
There is a small technical hitch, to which I have drawn the House’s attention before: we do not have any trade negotiators, because for the past 40 years the European Union has conducted our trade negotiations for us. It is about not just time but the price that we would have to pay to negotiate that access to the single market from outside. From the evidence of others who have done that, the answer is clear. That price would involve our freedom of movement, acceptance of the entire body of EU regulation, and a whopping sub to boot—all the things that the leave campaign tell us we will escape from—with no say at all in how the rules are made. It would be the worst of all worlds.
Chris Philp (Croydon South) (Con)
On the question of the trade deficit with the EU, which my hon. Friend the Member for Stone (Sir William Cash) mentioned a moment ago, does the Foreign Secretary agree that were we to exit the single market, the component of EU free trade that would be placed most at risk would be free trade in services, on which we enjoy a £20 billion trade surplus with the EU?
Mr Hammond
My hon. Friend is absolutely right. I want to address that important point later in my speech.
Any deal that we achieve with the European Union will almost certainly exclude free access to the market for services, which is something of a problem when services account for almost 80% of our economy.
Mr Hammond
Let me just make this point, then I will give way again.
By contrast, if we remain inside the EU, we can look forward to a huge dividend from an opening of the market in services over the coming years. The truth is that we have barely scratched the surface when it comes to the EU single market. The single market in goods is well developed, but in the sectors in which the UK is truly market-leading—financial, business, technical and professional services, the digital economy, the creative industries and energy—the potential remains huge, and the EU’s high-value market is the place to realise it.
Mark Tami (Alyn and Deeside) (Lab)
Has the right hon. Gentleman seen the warnings from Airbus about the threats to future investment in this country? I am talking about more than 6,000 jobs in Alyn and Deeside and 5,000 jobs in Bristol. Does he agree that the Brexit camp think that those are jobs that we can afford to lose?
Mr Hammond
That question has never been effectively answered—how many jobs are those advocating Britain’s exit from the European Union prepared to sacrifice on the altar of their notion of sovereignty? We have never had a straight answer to that question. What we do have is a range of independent estimates of what that number would be if we voted to leave next Thursday. I shall come to that in a moment.
It is because of the potential for the UK to open up the services market in the European Union that the deal the Prime Minister negotiated in February is so important. We now have a clear political commitment from all 27 other EU member states, plus the Commission, to accelerate the development of that market. These are the sectors in which the UK leads in Europe, and in which an expansion of the single market will disproportionately benefit the United Kingdom over the years ahead.
Robert Neill (Bromley and Chislehurst) (Con)
Does my right hon. Friend recognise that that commitment to a proper completion of the single market in services, added to the completion of a capital markets union, places the United Kingdom in a unique position to develop its world-leading sector, and that it would be mad to walk away from that opportunity?
Mr Hammond
My hon. Friend is right. That is what I hear from many of my European colleagues: we are about to move from one phase of European Union development into a new phase that is hugely beneficial to the United Kingdom, yet we are talking about walking away from it. Our financial services industry alone currently contributes more than 7% of UK GDP and employs more than 1 million people, two thirds of them outside London, but there is not yet a single market for financial services across the EU. The potential is huge.
A fully functioning digital single marketplace could be worth as much as £330 billion a year to the EU economy, with the UK again set to benefit more than any other country, as the leading digital economy in Europe. By the way, it would be a huge boon for Britain’s digital-savvy consumers, who would be able to shop freely across the digital single marketplace. Individuals are already feeling the benefits of last year’s EU agreement, led by the UK, to end mobile roaming charges, which it is estimated will save UK consumers around £350 million a year, and for years we have all been enjoying the budget airline boom created by EU regulations.
Nigel Huddleston (Mid Worcestershire) (Con)
Does my right hon. Friend agree that the reason why the markets had such a shock yesterday was the prospect of us leaving, based on a couple of polls? That £30 billion shock to our financial system hit not just capitalists but the pension funds of hard-working people, which deteriorated. If the prospect of Brexit caused that shock, what on earth would actual Brexit look like?
Mr Hammond
My hon. Friend is right. We can regard what has been happening in the markets this week as a fore-tremor—a taste of what could be to come if the people of Britain vote to take a leap into the dark on 23 June.
A fully fledged energy union in gas and electricity markets could save £50 billion a year across the EU by 2030, with huge benefits for consumers through their energy bills, as well as making Europe safer from threats of energy blackmail. But it is not just intra-EU trade benefits that our membership delivers. As a member of the world’s largest economic bloc, we benefit directly from being party to EU trade agreements with more than 50 other countries, with terms far more favourable than any that we could have negotiated alone, because of the combined negotiating muscle of an economic bloc with a quarter of the world’s GDP.
Caroline Flint
Trade is one of the areas where size does matter. Will the Foreign Secretary comment on the attempts to strike a deal between Switzerland and China? We hear much about what the world might be like if we leave the EU. My understanding is that as part of the deal the Chinese are negotiating for full access to the Swiss market, but have told the Swiss that they will have to wait 15 years to get into the Chinese market.
Mr Hammond
The right hon. Lady is right. The deal on the table between Switzerland and China is deeply asymmetric and deeply unfavourable to the Swiss, but reflects the mismatch in scale between those two marketplaces. Being part of the world’s largest economic bloc allows us to stare squarely into the eyes of Chinese and American interlocutors when negotiating trade deals.
It is a well rehearsed and well understood fact that 44% of the UK’s exports go to the EU, but it is an underestimate because it addresses only exports to the EU. If we take into account the countries with which the EU has a free trade agreement—destinations for another £56 billion of British exports—the figure goes up to 56%, which does not take into account any of the countries with which the EU is negotiating free trade agreements. If we included them, we would be talking about more than 80% of UK exports going either to the EU or to countries with which the EU had trade agreements. At the very least, more than half of Britain’s exports would therefore be at risk if we left the European Union, and it could take a decade or more to put in place new deals with the EU 27 and the 53 other countries with which we have free trade agreements. It is not about choosing between growing our trade with the EU or with the rest of the globe—as the figures show, our EU membership is key to both.
James Cartlidge (South Suffolk) (Con)
Is not the central absurdity of talking about the EU deficit and the surplus with the rest of the world that our trade with the latter is largely conducted through foreign companies—Japanese car makers and American banks, for example—that base themselves here precisely because we are in the single market? They trade with the whole world—they do not see it as two different places. We as a country should have that attitude.
Mr Hammond
My hon. Friend is right. The world’s supply chain has globalised itself. If I am honest, when I listen to the arguments of some of our opponents in this debate, although framed in terms of hostility to the European Union, I sometimes wonder whether what I am hearing is hostility to the globalisation of our economy.
What is true for trade is also true for investment—the other side of the coin. The reality is that Britain benefits hugely as a platform for investment from both EU and non-EU countries, many of which see us as a gateway to the rest of the European Union. They come here because of our language, our skills, our flexible labour market and our domestic regulatory environment, but if I talk to foreign companies based in this country—I have lots of them in my constituency, and other Members will be in a similar position—and to others around the world thinking of making that investment decision, it is clear that the single most important factor in the decision making of most of them is our membership of the European Union. Our membership makes Britain a launch pad for doing business with the rest of Europe. Almost three in every four foreign investors cite our access to the European market as a principal reason for investment in the UK. If we lost that access, we would lose the investment. It is as simple as that.
David Rutley (Macclesfield) (Con)
Is my right hon. Friend aware of Ernst and Young’s recent report showing that the UK continues to be the No. 1 destination for foreign direct investment in Europe, with the north-west seeing the biggest increase? Does he agree that a vote to remain would encourage yet further investment in the northern powerhouse and in other regions?
Mr Hammond
My hon. Friend is right. Treasury analysis shows that the UK is the largest recipient of foreign direct investment in the EU, ahead of Germany and ahead of France. We get almost a fifth of total inward FDI into EU countries—20% of the investment, with less than 12% of the population. I remind the House that every pound of that investment creates jobs in the UK. It is why Australia is a disproportionately large investor here, it is why so many Indian firms use this country as a base, and it is why world leaders, such as President Obama, Prime Minister Abe and Prime Minister Modi, believe we would lose out if we voted to leave the EU.
Mr Jamie Reed (Copeland) (Lab)
Will the Foreign Secretary confirm that that is particularly true of Japan and Japanese investment, on which this country relies for new nuclear power generation?
Mr Hammond
Not just for our new generation of nuclear power, but for a large part of our thriving car industry, which is built and based on our ability to export to the European Union. Japanese investment has transformed the economics of and labour relations in our car industry—it has done wonders for this country. It astonishes me that we would even contemplate undermining the basis on which that investment is made.
Mr Hammond
I will just make a little progress if my hon. Friend will allow me.
If we left the EU, the practical consequences of lower trade and lower investment would be felt directly by the British people: fewer jobs and higher unemployment. An estimated 3.3 million jobs in the UK—more than one in every 10—are linked to exports to other EU countries, with 250,000 jobs in Scotland, a quarter of a million in the south-west, half a million in the midlands, and 700,000 in the north. How secure will they be if we vote for Brexit next Thursday? How will the spectre of rising unemployment undermine consumer spending and sap business confidence—to blight, once again, those areas of the country that have been in this cycle all too often?
Patrick Grady (Glasgow North) (SNP)
Given the risks to the nations and regions of the United Kingdom that the Foreign Secretary is outlining, and given that the most recent poll shows support for leave in Scotland at only 32%, is he beginning to regret rejecting the SNP’s call for a four-nation lock on the referendum’s outcome?
Mr Hammond
No, I am not. This is a very important debate, but we have to use the power of persuasion to win it, not tricks. We have a week to make the case—openly and fairly. We need to let the British people decide, and then, as the hon. Member for Hayes and Harlington said, whatever their decision and however much we may not like it, we have to accept it, abide by it and implement it, and that is exactly what we will do.
Over 100,000 British businesses export to the EU. The future of every one of them—and of every person who works for them—will be put on hold if next Thursday there is a vote to leave. Will they be able to maintain access to their markets? Will they face tariffs? Will their customers hedge their bets and take their business elsewhere, just in case? It is difficult to see how even the most upbeat Brexiteer could not see that we are likely to face months, years and perhaps a decade of confidence-sapping, investment-eroding, job-destroying uncertainty that will take this country back to the dark days of 2008, and I for one never want to go there again.
Antoinette Sandbach (Eddisbury) (Con)
Rolls-Royce has a manufacturing facility in my constituency and has made the threat to jobs very clear. Unemployment has fallen 60% since 2010, but that improvement will be put at risk, as highlighted by a CBI report stating that the shock to our economy could cost 950,000 jobs. Does the Foreign Secretary agree that that risk is simply not worth taking?
Mr Hammond
I absolutely agree with my hon. Friend. It is a risk we do not need to take, and it is a risk that it would be absurd to take. I just cannot believe that after all the grief and pain we have been through in this country to rebuild our economy following the disaster of 2008-09 we are seriously thinking about going back there. That astonishes me.
Economic experts have judged overwhelmingly from the evidence that Britain’s economy will be stronger and more resilient if we remain in the EU. The G7 Finance Ministers, nine out of 10 economists, and independent organisations such as the IMF, the World Bank, the Institute for Fiscal Studies and the World Trade Organisation have expressed the view that the UK will be better off inside the EU.
And not just economists but more than 200 entrepreneurs —founders of household names such as Skype, lastminute.com and innocent drinks—agree. Rarely, if ever, can an issue have united the opinions of everyone from global institutions, through trade unions, to British businesses, large and small. The overwhelming weight of economic and business opinion is clear: Britain is better off in.
Simon Hoare (North Dorset) (Con)
Will my right hon. Friend nail from the Dispatch Box the canard that some on the exit side are peddling—that this is just a vehicle for another round of never-ending renegotiations? This is a serious, one-off decision. We will abide by the decision, and it has to be right for the future of our country.
Mr Hammond
My hon. Friend is absolutely right, and I am happy to repeat what he says, as the Prime Minister did earlier. The British people will have their say; they will make their decision, and we will implement it. I do not believe that our 27 partners in the EU would say, “Oh, fine, let’s go through all this again,” even if we wanted to. This has to be the deciding point. It is make your mind up time. People have to look at the options bus: a future they know and can predict, with Britain in the European Union—a Britain that has created 2.5 million jobs over the last six years, and a Britain with a growth rate that has outstripped that of every other country in the European Union—or a leap in the dark.
Several hon. Members rose—
Mr Hammond
I am going to make some progress now. I want to finish so that others can contribute.
What would be the consequences of a vote to leave? They would be: less trade, of course; lower investment; slower growth; and fewer jobs—less trade, because we would lose our access to the EU single market and to the free trade agreements the EU has; lower investment, because foreign businesses using the UK as a launchpad into the EU would go elsewhere, and UK businesses would be seeking to rebuild their markets, rather than investing for expansion; slower growth, because the economy would effectively be on hold for at least two years, and almost certainly very much longer, while we negotiated the terms of our exit from the EU; and fewer jobs, because, in a climate of such economic uncertainty, few companies would be hiring or expanding their workforce. Indeed, to answer the question asked by my hon. Friend the Member for Eddisbury (Antoinette Sandbach), the director general of the CBI, Carolyn Fairbairn, estimates that, if we left the EU, there would be almost a million fewer jobs in the UK by 2020 and that those under 34 would be hit the hardest.
Let us be clear: an exit negotiation with the EU will be far from the straightforward affair the leave camp is suggesting. We have general elections next year in France and Germany, and I can promise that every single vested interest in both those countries will be seeking to benefit from the British exit. We should expect no favours from those whom we have just snubbed. The Brexit campaign wants us to believe that we could negotiate a better deal for Britain from the outside than the one we actually secured from the inside at a time when the entire European Union was seeking to persuade us to stay. This is simple fantasy. [Hon. Members: “Hear, hear!”] It will not happen.
Helen Whately (Faversham and Mid Kent) (Con)
My right hon. Friend spoke about how companies that export to Europe would be badly affected by leaving the European Union. If we have a Brexit recession, not only will businesses that export to the EU be hit, but almost all businesses will be affected by the loss of investment in the UK and the loss of consumer income. Will not all businesses be affected?
Mr Hammond
My hon. Friend is absolutely right. I am afraid that I can predict, on the basis of experience, what will happen. If we get a Brexit vote, markets will go into freefall, business confidence will collapse, business investment will freeze, and consumers will panic and stop spending, and that will have a massive effect across the width and breadth of our economy.
The United Kingdom is, and should remain, an outward-looking trading nation. If we want to remain prosperous, we must move up the value curve, not down it. Britain’s future has to be about higher skills, higher wages and higher investment, not the opposite.
The EU has many failings, and no one is pretending that the reforms negotiated by the Prime Minister should be the last word. If we remain on the inside, we can and should continue to influence the speed and direction of reform. If we step outside, we will continue to be affected by EU rules, but we will have no way of influencing them and no way of reforming the institutions.
The consequences of the decision the British people make on 23 June will reverberate down the generations. This is not a decision to be taken lightly; all our futures depend on it. Now is not the time for reckless risk-taking; it is time for cool, calculated consideration of the facts, the evidence and the expert opinion, and all point to the same conclusion: we are stronger, safer and better off inside a reformed European Union.
Stephen Gethins (North East Fife) (SNP)
Once again, we find ourselves involved in a crucial referendum and a crucial debate that is fundamentally about more powers for this place, and, critically, more powers for Government Front Benchers. They may have denied 16 and 17-year-olds the vote, but let us not forget that this is about younger people, about the future, and about the kind of country that we want to see. Those Front Benchers may even have been reluctant to extend the deadline so that more young people could vote, yet fundamentally next week’s decision will impact on young people, and on our future, for far longer than it will impact on most people in this Chamber.
I hate to say it, but the Tory Brexiters have fought an endlessly negative campaign founded on a cynical misrepresentation of the facts. I found that out for myself a few months ago when I appealed for us to avoid “Project Fear”, have a positive campaign, and give the benefit of the doubt to our opponents, only to find myself on a Vote Leave leaflet advocating for the side for which I was not advocating. That was cynical misrepresentation by those on that side, who fundamentally, instead of working in co-operation with other member states, want to launch a power grab for a Government who are the most right wing of recent times and could be about to become even more so.
In contrast to the Tory Brexit plans, the positive reason for staying in the European Union is one of co-operation between independent and sovereign member states. That co-operation makes us wealthier, with access to a single market of 500 million wealthy consumers. The EU is Scotland’s top export destination—42% of our exports go there, and more whisky is drunk in France in a month than cognac in a year. But that is not going to stop us exporting to the rest of the world. Scotland benefits from a huge diaspora in markets in the United States, Australia and elsewhere, and that will still be there—it is not going away. The European Union benefits us in that people can step from Scotland into a large EU market; we are very well placed for that. Critically, this is not just about big business: small businesses benefit almost more than any others. Many businesses in my constituency cannot afford lawyers in 28 capital cities around the European Union for all the different rules and regulations, so the EU fundamentally helps them, and makes us wealthier.
Geraint Davies
Brexiters who say that Britain is the fifth largest economy in the world and that we are big enough to fend for ourselves forget that we are not the United States where California is nearly as big as us, we cannot be China or India, we would not want to be Japan, and France and Germany are part of the EU and locked into the biggest economy in the world. Does he agree that theirs is a ridiculous claim?
Stephen Gethins
The hon. Gentleman will not be surprised that I do agree. Just as Scotland is a medium-sized European state, so the UK is a medium-sized global state.
John Redwood
Can the hon. Gentleman explain why the trade of a number of countries that are neither a member of the EU nor have any special arrangements with it has grown considerably faster than our trade with the EU from inside it?
Stephen Gethins
The right hon. Gentleman oddly suggests that our trade will grow more once we leave this enormous trading bloc, with all the benefits that come with it. Like all his colleagues in the leave campaign, he is failing to face up to facts.
The EU makes us healthier. We gain from healthcare across the European Union whereby citizens from the EU can benefit from our healthcare just as we benefit from theirs. There is research that makes us healthier. Scotland is currently taking the lead role on dementia research, involving 15 organisations in 11 member states. I am proud of the role that we play in that, just as other member states are contributing to our health through their research.
Stephen Gethins
I give way to my hon. Friend, who will have something useful to say on that point.
Dr Whitford
I will do my best. We have had many health gains. Part of the reason we are in this debate is that for 40 years we have never talked about anything that we have gained—the cleaner air, the cleaner water, the cleaner beaches, and the fact that medicines are regulated across the EU through its regulation system. The European Medicines Agency is sitting right here in London. This morning I chaired a—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. We have 50 speakers who want to get in. I want to get them all in, but I cannot do that with very long interventions; they have to be short and sweet and get to the point.
Stephen Gethins
My hon. Friend makes a very important point about the health aspects that we all benefit from in a large range of ways.
My hon. Friend also mentioned that the European Union makes us greener. I am sure that Members on both sides of the House will join me in congratulating the Scottish Government, who have met their world-leading climate change targets four years ahead of schedule, with very little help from this place but plenty from co-operation with our European partners. We have worked together on the environment. She mentioned air quality. A number of years ago, complaints about acid rain affecting Germany’s forests led to air quality directives that are benefiting each and every one of us.
Stephen Gethins
I will make some progress.
Scotland’s renewables industry is thriving, with no thanks to this Government, but a huge amount of thanks to our co-operation with our European partners, which has created a huge amount of benefit.
Stephen Gethins
I will happily take an intervention from a Conservative Member—they are all helpfully badged.
Mr Deputy Speaker
Can I help a little? I say to people who are going to speak very shortly and want to remain on the list: if you intervene, I am going to drop you down the list. Make your minds up—you cannot have it both ways at the expense of everybody else.
Stephen Gethins
Working with our partners has made us greener, and wealthier in terms of the industries in the sector.
Collaboration with our partners has made us smarter through our universities, not least the University of St Andrews, where I see the benefits daily. Since 2014, Scotland has received over £200 million from the EU science fund, and is set to gain £1.2 billion by 2020. The opportunities for collaboration and from the students that come here benefit us all and enrich our campuses.
Carol Monaghan (Glasgow North West) (SNP)
Across the UK, nearly 11,500 EU students are contributing income to our universities, benefiting them greatly. Does my hon. Friend agree that collaborations such as the work on gravitational waves at Glasgow University could not have happened had we not been part of the EU family?
Stephen Gethins
My hon. Friend makes an excellent point about collaboration in our universities. I saw that for myself at the University of St Andrews when a French student showed me the creation of a black hole—although it is not true that that is what Vote Leave’s arguments all disappeared down.
I am someone who has benefited from freedom of movement within the EU. Through Erasmus, I was able to pick up skills and opportunities that I would not otherwise have had. I do not want to vote next week to take away from young people the opportunities that I, and other Members from across this House, have had. Freedom of movement often benefits local companies as well as enriching our society. The net contribution that has been made by EU migrants is significant. If we removed EU migrants from the UK, the Chancellor would have an even bigger black hole than the one he is talking about, with the imposition of even more austerity than at present.
Jo Churchill (Bury St Edmunds) (Con)
The students in our universities not only gain from what the European Union gives to them, but lever in some €80 billion of additional research spending, so they can help to educate more people.
Stephen Gethins
The hon. Lady makes a very good point. The £350 million figure that was splashed across Vote Leave’s bus did not last very long when subjected to scrutiny. It also did not take into account the huge range of benefits that we gain from membership of the European Union that go beyond that membership fee, as Vote Leave put it.
Freedom of movement—this is often lost—is a two-way process. There are 1.5 million UK citizens who benefit hugely from freedom of movement across the European Union. I often pose this question, but it is yet to be answered: what is the difference between an EU migrant and a UK ex-pat living in the European Union? They are exactly the same. I and others have been appalled by the language used by the Vote Leave campaign, not least about migration and refugees, because we benefit from working with our European partners on foreign policy.
President Obama has said that his worst foreign policy mistake was not dealing with the aftermath of Libya. The campaign in Libya had nothing to do with the EU; it had everything to do with this Government not dealing with it appropriately. And where is the biggest influx of refugees coming from? They are coming from the failed state of Libya. It was a UK foreign policy failure of the worst kind and it had nothing to do with the European Union.
On the issue of UK foreign policy disasters, Labour Members will be well aware that Chilcot will be published in a few weeks’ time. The European Union had nothing to do with the disaster in Iraq; it was another UK foreign policy disaster.
Stephen Gethins
I will make some progress.
Compare that with the EU as a soft power. It has made progress in stabilising south-east Europe and it could play a future role in the middle east and north Africa region and in dealing with the former Soviet Union. Europe can be a soft superpower and we need to be at the heart of that. As our partners in the EU have said, our membership of NATO and of the EU complement each other and have given us the longest period of peace, stability and prosperity in European history. We should not forget that.
The EU has also made us fairer. It protects us in so many ways, including through provisions for paid holidays and by giving parents—mums and dads—the right to parental leave. Just think of the draconian trade union laws that this lot here want to bring in: do we really want to be left to the mercy of a right-wing Conservative Government when it comes to social protections? Those social protections have been advanced through our membership of the European Union.
Last night, the hon. Member for Uxbridge and South Ruislip (Boris Johnson), who is not here—which does not surprise me, given the going over he got from my right hon. Friend the Member for Gordon (Alex Salmond)—was reminded that he had previously said that
“we could easily scrap the social chapter”.
He is right—they could easily scrap the social chapter and all the benefits that go with it, because, when it comes down to it, this is a right-wing Tory power grab. The right-wing Tory foxes would be put in charge of the chicken coup of progressive politics in the United Kingdom.
Mark Durkan (Foyle) (SDLP)
The hon. Gentleman is confronting directly the supposedly leftist leave argument that ignores the fact that we would be plunged into Brexession and that pretends that there would not be more austerity or EUsterity in Europe. There would be a carnival of reaction, not just on the Conservative Benches, but across Europe, where right wing and neo-fascist parties would destroy rights in their countries, too.
Stephen Gethins
The hon. Gentleman makes an excellent point. Frankly, we cannot trust the Tories with social protection or the environment, and we certainly cannot trust them with workers’ rights. This is a Tory excuse for more austerity, and that is what is coming if people vote to leave.
We often hear Vote Leave and Brexiteers talk about democracy and the EU, but it has a Council of 28 democratically elected Governments, as well as 28 commissioners who are appointed by those Governments and a Parliament that can sack them. They talk of a Tory Government here who were voted for by just one in four voters, and who experienced their worst election result in Scotland since 1865. They talk of democracy and a Tory victory in Scotland with a fifth of the vote, and an SNP defeat with just under half of the vote. They also talk up democracy as they eye up a seat in the affront to democracy that sits at the end of the corridor, the House of Lords. Do not be fooled by their appeals to democracy; they could learn a thing or two from Europe about democracy.
On independence, the EU is made up of 28 independent member states. Nobody questions the independence of Germany, France, Denmark or Finland. Mary Robinson has said that she believes that Ireland truly became independent only after it joined that European Union. My hon. Friend the Member for Na h-Eileanan an Iar (Mr MacNeil) made a valuable point earlier when he said that the European Union is a club for independent countries but the Union of the UK is not. Not being independent here means areas having the poll tax, nuclear missiles on their soil, their fisheries being described as expendable and a Tory Government against the wishes of their people. That is not democratic.
I joined the SNP because I want to see Scotland in the world. The real isolation came from the Union and doing things through the prism of London. I started by saying that this is about our future, but let me reflect on the past. Scotland may be at the fringes of Europe geographically, but we sit at its heart politically. I am wearing the tie that commemorated the visit of Pope Benedict to Scotland, which was once called a filia specialis—a special daughter—of the Church. In 1218, the Pope tried to set out an archbishopric in St Andrews in my constituency, so even back then our European partners were protecting us from the worst excesses of this place. Even William Wallace’s first act was the letter of Lübeck and a letter to rejoin the Hanseatic League, the European Union of its day.
With our environmental commitment to a clean, green future, the excellence of our universities and our commitment to social progress, Scotland remains at the heart of Europe. I hope that the isolationist tendencies of Vote Leave and many in this place will not win out and that we vote to remain next week.
John Redwood (Wokingham) (Con)
Prosperity, not austerity, is what we want, and that will be so much easier to achieve when we cast off the shackles of the European Union. It is an institution renowned for its gross austerity and the damage it has done throughout great swathes of our continent, driving young people into unemployment, preventing school leavers from getting any job at all, and starving public services of cash. Those policies have done terrible damage in Greece and in parts of Italy, Spain and Portugal. It is good that we have some freedom to distance ourselves from those policies, and we will have even more freedom when we take back control of our money, taxes and budgets.
It was bizarre to wake up this morning to press comments that there would need to be a post-Brexit-vote Budget. I am going to wait to see what the British public really want in a vote that is still to be decided, but the Government seem to have conceded defeat by saying that they would launch an austerity Budget if the British people dare to vote for their freedom and democracy. There is absolutely no need to do that, and I reassure the British people that there would be absolutely no chance of them getting such a Budget through the House of Commons. There is no enthusiasm for it from the SNP or the Labour party, and after Brexit many Conservative MPs will vote for lower taxes and more public spending, because that is what we will be able to afford as a result of the Brexit bonus, or dividend, when we get back the £10 billion a year that we send to the EU and currently do not get back.
John Redwood
No, I cannot. I have to be tight on time, because others wish to speak.
Those who want to remain so hate the idea that there is going to be a dividend, because they know that that money is taken away from us and is not used for the priorities of their electors and their local health and education services. Within the European Union, we are not legally allowed to get rid of VAT on fuel—a much hated imposition that hits those on lower incomes far more than others—but we would be free to do so as soon as the British people vote to leave, if that is their wish.
The issue of our membership of the EU needs to be looked at over the longer term. All of the gloomy and bogus forecasts by those who wish to remain are based on the assumption that the single market is a precious and virtuous body to which we can belong, which has fuelled our prosperity and manufacturing growth so far, and which would no longer be available to us if we left. Of course, they are wrong on both counts. Our membership of the single market has not helped our manufacturing. When we leave, we will still have access to the single market, just as 165 other countries around the world have access to it daily without being members, without having to accept the freedom-of-movement provisions and without having to accept the taxes and the laws that are imposed on us on a wide range of issues that have nothing to do with trade whatsoever.
The single market, when it was introduced, did not accelerate our growth rate or our exports in manufacturing in any way. The Government did a very good long-term survey, which covered the period 1951 to 2007. They started in the stable year ’51—it was necessary to leave out the bit immediately after the war, when there was a big demobilisation effect—and went up to 2007. The figures for manufacturing today are identical to those from 2007, because unfortunately we had a deep manufacturing recession in ’08-’09 and we are just about getting back to the ’07 levels. The survey showed that between 1951 and 1972, before we joined the European Union, we had manufacturing output growth of 4.4% per annum; and that since 1972, during the long period of time for which we have been in the thing, there has been absolutely no manufacturing growth at all.
If we look at individual sectors, we can see that prior to joining the European Union, our metals sector grew at 3% per annum, but it has declined at 6% per annum since we have been in the European Union. Our food and drink industry grew at 5.6% per annum before we joined, and it has fallen at 1% per annum ever since. Our textiles sector grew at 2.6% per annum when we were out of the EU, and it has fallen by 6% per annum since we joined. We used to have a 45 million tonne a year steel industry, thanks to massive national investment and the Labour Government of the ’60s, but it now produces only 11 million tonnes. We had a 400,000 tonne aluminium industry when we joined the EU, but we have only a 43,000 tonne industry left. We had a 20 million tonne cement industry when we joined the EU, but we have a 12 million tonne industry left. We had a 1 million tonne a year fishing industry when we joined the EU, and we have only a 600,000 tonne industry now.
Some of those industries, particularly the fishing industry, as my hon. Friend the Minister well knows, have been gravely damaged by our EU membership. EU rules in the common fisheries policy, and the quota allocations to other countries against the interests of our own fisherpeople, have caused the number of fishermen in our country to halve during our membership of the European Union. Our experience of manufacturing as a member of the European Union has been far from benign. High energy prices, rigged subsidies, arrangements that help other countries more than ours and a policy, quite often, of providing subsidy, grant and cheap loans to manufacturers literally to transfer plants from Britain to other continental countries have been part of the background to the dreadful erosion of our manufacturing.
It is fair to look at manufacturing because, as I think remain campaigners always say, there is no full single market in services. The single market was completed in goods by 1992. We have experienced that single market since 1992, and it has not made any beneficial difference whatsoever to our manufacturing. The deep-set decline that has characterised our period of membership of the European Union was not turned around by the introduction of those single market measures. Fortunately, our services have not yet been damaged by the growing regulation within the EU, but the evidence from what happened to manufacturing is not encouraging when we look at what might happen to our services. There have already been many cases in which the City of London, defending its interests as a financial services provider, has found itself at variance with incoming European rules. The matter is settled by qualified majority vote, so being around the table is of no use to us because we get outvoted. If we dare to take it further, we get European Court judgments against us for our alleged infringement of the rules.
Several hon. Members rose—
John Redwood
Mr Deputy Speaker, I know that you are very keen that I keep these remarks very short. This is an important case that does not get heard in the House, so for once I will not be able to take interventions.
The position is quite simple. Outside the European Union we will continue to trade fully with it, as we do today. We who want to leave the European Union are not proposing a wholesale removal of rules and regulations. One of the genuine benefits of the single market, as has been pointed out, is that there are common rules and regulations for trading with all countries. The great news is that we will get the benefit of that whether we are in or out. The Americans, who have grown their trade with the EU more quickly than we have done from within, get the benefit of that part of the single market because they have to supply only to one specification, just as we do from within. Many of the common rules and standards are informed by global ones, but we have been kicked off the global bodies by the European Union. Outside the European Union we would have the advantage of getting back our seat, vote and voice on the global bodies, so we would have more influence at the top table in return for no longer being part of the EU.
For prosperity not austerity, for control of our own taxes, for spending our own money, for providing growth by spending that extra money, and for trading freely with Europe without all the restrictions, controls and arguments, vote leave.
Mr Nick Clegg (Sheffield, Hallam) (LD)
I am grateful to be following the right hon. Member for Wokingham (John Redwood) because he is widely considered to be one of the more erudite spokesmen for the Brexit campaign. I waited with bated breath for a cogent, coherent and practical economic analysis of why Britain’s economy would thrive out of the single market. Instead we got this curious mix of fantasy and naivety, which I never thought I would hear expressed in such a way.
I would like to make three points. First, the right hon. Gentleman’s diagnosis of the British economy and its relationship to its European economic hinterland is based on a backward-looking view that belongs to an era of gunboat diplomacy, tariff wars and 19th-century economic rivalry. As Margaret Thatcher and Lord Cockfield, the inventor of the single market, recognised, modern trade is not about taxes, levies and tariffs; it is about the rules, the standards, the norms, the qualifications and the regulations that assist or impede trade. What possible control would we gain by being outside the room in which those rules are made but none the less, as the right hon. Gentleman has just admitted, abiding by them? That would be a catastrophic loss of sovereignty and control.
Sir William Cash
As usual, the right hon. Gentleman is off beam. He is completely incapable of getting anything on the European Union right. Decisions are taken in the Council of Ministers, as he well knows, largely behind closed doors by COREPER. Those decisions are not made in the manner he suggests.
Mr Clegg
Being called “off beam” by the hon. Gentleman is quite something. He and I share a passion for Sheffield, however, so I shall put that aside for a minute. In the economy of this country, 78% of GDP is generated by services. Services are barely affected by taxes, tariffs and levies, but British lawyers, British engineers, British architects and British creative industries trying to sell their wares, as they successfully do—we are a services economy superpower in Europe—are affected by precisely the rules that are thrashed out in Brussels, in discussions that we would be excluded from if we left the European Union.
As the right hon. Member for Wokingham acknowledged, the completion of the single market in services is, indeed, a work in progress. We are the chief author and architect of the success in that area. Why on earth would anyone walk away from the construction of a building of which they were the chief architect and the chief beneficiary? A 7% increase in our GDP is the calculated improvement in the economic performance of this country if we complete the single market in services, but the Brexit camp want to walk away from that.
John Redwood
Why was there no improvement in manufacturing activity with the single market?
Mr Clegg
Dare I say it, but even by the fairly specious standard of the statistics bandied about by both sides in this campaign, the way the right hon. Gentleman used statistics was spectacularly misleading. From listening to the Brexit campaign, people would think that the club we have been a member of for 43 years has been the fount of all misery. How come we are still an independent, free and broadly speaking prosperous nation if we have been a member of it for over four decades? I simply think that that applies to his example.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
Will the right hon. Gentleman give way?
Mr Clegg
I will, if I may, make a little progress.
The second point, which is completely omitted by the analysis of Brexit campaigners, is our current account deficit. To be fair, the Government are very silent on that as well, for the very good reason that it is shockingly large. We now have a current account deficit which, at 7% of GDP, is historically and internationally very high and, in my view, unsustainable by historical standards in the long run. As the Governor of the Bank of England has said, if a country runs such a huge, unprecedented current deficit, it has to rely, as he put it, on the “kindness of strangers”.
Mr Clegg
If I may finish this point, I will then give way.
The only way in which that current account deficit is sustainable is if strangers from elsewhere in the world invest in assets in this country—in property, infrastructure, the financial services sector, factories and companies. It is on those investors, and on the kindness of those strangers, as Mark Carney has said, that the sustainability of the ballooning current account deficit relies. What will those strangers think after next Thursday, when they do not even know whether our country will survive at all? The United Kingdom may not persist because Scotland may trigger a second referendum, and see the United Kingdom fall.
Mr Clegg
May I just finish this point?
What will those strangers say as they see year after year of grinding political, constitutional and economic uncertainty? Why would they continue to invest in UK plc? And if they suddenly pull out their money, I tell you what will happen: the pound will plummet; inflation and prices for ordinary people will go up; and we will be caught in an economic whirlwind that, irresponsibly, these people want to inflict on millions of our citizens. It is a scandalous position to take.
Ian Blackford
The right hon. Gentleman is making some very powerful points. May I remind the House that we are still living with the consequences of the financial crisis in 2007 and 2008? We have the answer to the question he is asking: the stock market has fallen by £80 billion in the past few days as investors recognise the risk to this country if we have a Brexit vote next week. That is the start of the tsunami that he is talking about. Why would we risk the prosperity of the United Kingdom and, indeed, of Europe by taking such a rash action?
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Interventions must be short to give everybody a chance to speak.
Mr Clegg
I played a role, somewhat thanklessly as it turned out, for five years in the coalition Government—as did my party, although it is not abundantly represented today on the Bench next to me—to try and provide the political stability that the country needed to recover from the cardiac arrest that occurred in 2008. I think it was the right thing to do. A country cannot recover from that kind of trauma if there is constant constitutional and political instability, yet that is what the Brexit camp want wilfully to inflict on this place and on this country. It is astonishing that they want to drag us back into the furnace of that economic disaster from which we are still escaping right now.
My third and final point is that, unlike, I think, every other Member of the House, I actually worked in a relatively lowly manner—in a previous incarnation, before I went into politics—as an international trade negotiator. I was part of the EU trade negotiation team that sought to settle the terms of China’s accession to the World Trade Organisation. I spent months haggling with hard-nosed Russian trade negotiators about the overflight rights paid by British Airways and European airlines for flying over Siberia. I have spent a lot of time with a lot of international trade negotiators, and I know that they are very unsentimental folk. It is almost laughable simply to state it, but the idea is that we could pull out of the world’s largest economic bloc and then say to these unsentimental folk, who have driven such a hard bargain with that bloc of 500 million people, that we want not just the same but better deals and a better set of conditions on behalf of an economy of only 60 million people. Who do the Brexit camp think these negotiators are? They are not stupid or naive: they will just snigger.
I have looked in vain—I scoured the internet this morning—for the apparently many freedom-loving nations that will cut such favourable deals with us as we depart into this world of milk and honey in which, effortlessly, people will give us concessions that they did not give to a bloc of 500 million people. Can we find anyone? Have the Indians said, “Yes, sure, we’ll give you what you want”? Have the Americans, Canadians or Australians said that? Has anyone said it? Not a single country anywhere in the world has said that it will give better terms of trade to the United Kingdom on its own than to the European Union.
So please, if we do one thing between now and next Thursday, by all means let us thrash it out between those who want us to remain in the European Union, flawed though it is and reformed though it must be, and those who want us to go out, but let us not do so on the basis of these falsehoods, this misleading nonsense, this naivety and fantasy, which would do this great country of ours such a terrible disservice.
Mr Peter Lilley (Hitchin and Harpenden) (Con)
It is a great pleasure—a nostalgic pleasure—to follow the right hon. Member for Sheffield, Hallam (Mr Clegg). He reiterated the fears he first enunciated in relation to our leaving the exchange rate mechanism, and those fears proved to be wrong. He next enunciated those fears in relation to our not joining the euro, and they proved the reverse of the truth. It is nostalgic to hear him recycling his damaged goods again today.
It is even more of a pleasure to follow my right hon. Friend the Member for Wokingham (John Redwood). He and I worked together at the Department of Trade and Industry. I think I am the only serving Member of Parliament, apart possibly from the right hon. Member for Sheffield, Hallam, who has experience of successfully negotiating an international trade deal and of introducing, with my right hon. Friend the Member for Wokingham, the single market programme into this country.
We have that experience, and I want to apply it to some of the arguments because on this issue, as on most issues, I find that when we in politics do not have that experience, we simply adopt the most plausible argument that supports our case. By and large, that is what happens on matters of trade and economics in this House, because there is so little experience of them. In a way, I am a member of an endangered species as one of the few Members who has such experience.
Let me first take the very idea that trade agreements are necessary and essential for trade. I hate to say this, because I have a vested interest in claiming to have experience of these things, but trade agreements are less important than people imagine. That is particularly the case for agreements between developed countries, largely because of the success of the Uruguay round, which brought down tariffs between developed countries to negligible levels. The average WTO tariff that would apply to British exports to the EU, in the almost inconceivable circumstance of our having no free trade agreement with it, would be 2.4%. It is better not to have it and I would rather not have it, but compared with the movements in the exchange rate, it is negligible or much less important than it is made out to be. The only important trade deals are those with fast-growing markets in Asia, Latin America and Europe that still have high tariff levels, and we ought to be looking to negotiate trade deals with those markets.
Bob Stewart
I entirely agree with everything my right hon. Friend has said. We have not so far discussed the fact that people want our market just as much as much as we want their market. It takes two to tango in any trade deal, and trade deals will go on regardless.
Mr Lilley
My hon. Friend is absolutely right. Trade deals take place because they are in the mutual interests of both parties; they are not military conflicts. They take place between two parties, like trade itself.
A very plausible but incorrect argument is that trade agreements always take a long time. When the Secretary of State for Foreign Affairs was asked whether Ministers had done any study of trade agreements, he sidestepped the question. A freedom of information request has actually revealed that neither the Treasury nor the Government have done any study of the trade agreements about which they talk so knowledgeably. However, such studies have been done. I refer to the study by Professor Moser of the Centre of European Union Studies in Salzburg of every single trade agreement in the past 20 years. There are 88 of them. They took an average of 28 months, but the time for each varied greatly. The deals that took a long time were those that involved lots of countries, which certainly concurs with my experience. Of course, by definition any EU treaty involves 28 countries and takes a long time, because all 28 have vetoes. A lot of EU treaties are being held up now, but bilateral treaties take less than that average of 28 months. We should not start deluding people into thinking that it will take a long time to negotiate bilateral deals with countries that already have bilateral deals with Switzerland, for example.
The right hon. Member for Sheffield, Hallam asked rhetorically whether anyone was queueing up for trade deals with us. Well, look not for what they say but what they do. Switzerland has trade deals with countries whose total GDP is four times that of the countries with which the EU has trade deals. Chile has trade deals with countries whose collective GDP is even bigger. Switzerland has a trade deal with China. We are told that it is a bad deal for Switzerland, but clearly the Swiss did not think so. The Swiss published the details of the deal online; Members can look at it themselves. By the time the EU even gets around to negotiating a trade deal with China—which by the way will never succeed because the EU will always insist on human rights terms the Chinese will not accept—the Swiss will have zero tariffs on the vast majority of their exports to China.
Mark Pritchard
My right hon. Friend is a distinguished former Trade Secretary so knows what he is on about. We come from different sides of the debate on this issue, but does he—with all his experience and wisdom, and all his contacts both in the Commonwealth and the European Union—accept this point? Brexiteers invoke the Commonwealth leaders as wanting to do business with Britain whether we are in or out of Europe. Is it not the case that Commonwealth leaders want a trade deal with the whole of Europe, not just with the United Kingdom?
Mr Lilley
They probably want trade deals with whoever they can negotiate sensible ones with, if they are sensible. They will not say that it is either/or; they will want a trade deal with us, because we are the fifth biggest economy in the world, and they will probably also want a trade deal with the EU. They will find, however, that that deal takes a very long time because all 28 countries will have to agree to it first.
It is often suggested that the EU will get better deals because it is bigger. Actually, not only is it more complicated to do those deals with lots of countries, and so takes longer, but the result is worse and less comprehensive, because there are 28 times as many exceptions and exclusions. They are even less likely to be in the UK’s interests, as we can see from what has happened so far. A third of the trade deals that the EU has negotiated with other countries do not include services. As has been repeatedly stated, services are very important to this country, but they are less important to the rest of the EU, so it does not bother to include them in the deals. Switzerland also attaches great importance to exporting services, so more than 90% of its trade deals include them—as of course would ours if we were independent and making our own deals.
Kevin Hollinrake (Thirsk and Malton) (Con)
My right hon. Friend has mentioned Switzerland quite often. Switzerland is part of the European economic area, but still locates its banking services in London so as to access the rest of the European Union through passporting agreements. Does he have a solution to that difficulty?
Mr Lilley
Switzerland moved its banking centres to London post big bang and before the single market. I negotiated the second banking directive, which introduced passporting for banks. I was very proud of it, and subsequently wanted to make a speech saying what a wonderful thing it was, and how wonderful the single market programme was, so I asked my officials to find examples of banks and other businesses that were doing things that were made possible by the single market programme and that sort of passporting. They could not find a single one. Nearly all banks trade through subsidiaries, so do not take advantage of passporting, which allows operation through a branch rather than a subsidiary, regulated by the British financial authorities rather than those in the country in which they operate. I will perhaps come on to other aspects of the passporting issue if time permits.
Barry Gardiner (Brent North) (Lab)
I always listen very carefully to the right hon. Gentleman. He has made a very strong point about the difficulties in negotiating with a large trading bloc of 27 nations, including the time it would take. Why then does he feel that it would be possible, in short measure, for the UK to re-establish its trading relations with an EU of which we were no longer a part? He has made a very compelling case for why it would not be.
Mr Lilley
That is a very good point that I was going to come on to. It takes quite a long time for the EU to negotiate a trade deal with Canada, for example, because each country has tariffs against the other, and different product specifications and so on. Each has to trade off, say, a cut in tariffs on steel against one in tariffs on leather goods. We can see how that could take a long time, particularly if there is not much enthusiasm for it. We would start negotiating with the rest of the EU with zero tariffs on both sides and with common product standards. Zero to zero can be negotiated in a fairly short space of time, I would have thought, compared with the time needed when 10,000 different tariff lines are involved, as in other tariff agreements. It should not take long to negotiate a continuing free trade deal, with good will on both sides.
Mr Lilley
I am afraid the hon. Gentleman has burned his boats.
Another myth, which I am afraid has been proffered by my right hon. Friend the Foreign Secretary, is that we will need to renegotiate trade agreements with all the countries with which the EU currently has trade agreements. That is not the case. There is an accepted principle in international law called the principle of continuity: if a political unit splits into parts—as the Soviet Union or Czechoslovakia did, for example—the component parts continue with the same agreement unless one party objects to it. There is absolutely no reason to suppose that the countries with which we are currently party to free trade agreements will want to end those agreements when we leave. For example, when the Soviet Union broke up it was not a member of the WTO, so had traded under separate trade agreements with other countries. Those trade agreements migrated by agreement, so that within weeks even America had migrated its agreement to Russia and other successor states. There is absolutely no reason—
Mr Lilley
I am sorry, but I am under pressure to finish.
I will say one final word, on the single market. It is often talked about as some arcane inner sanctum. It is simply the European market. It is like the American single market. We have no agreement with the American single market, and are not members of it; none the less, America is our biggest trading partner nationally in the world. The introduction of the single market consisted simply of standardising the product specification, so that instead of having to have 28 different ranges of refrigerator, lawn mower or whatever, we have one.
That is very sensible. It is also just as much of an advantage to an exporter from outside the EU exporting refrigerators or lawn mowers to it as it is to member states within it. In fact, others outside the EU have taken more advantage of it than we have, and their exports have gone up more than ours, perhaps because they have to bear the burden of EU regulations only on those aspects of their activities carried out within the EU, not on 100% of their firms. That is another aspect of the benefits we would get from leaving, along with our ability to negotiate free trade agreements with the fast growing but protected markets of the world on which our children’s futures will depend.
Several hon. Members rose—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. After the next speech there will be a five-minute limit.
Caroline Flint (Don Valley) (Lab)
It is a pleasure to follow the right hon. Member for Hitchin and Harpenden (Mr Lilley), and he has added to my “Heinz 57 Varieties” for what the future of our trading arrangements might be if we leave the European Union. Like the Foreign Secretary, he was right when he said that few people say they love the EU, but many, like me, passionately love our country, and believe that Britain is a strong country, one of the world’s great nations, and a force for good. Our status as the fifth largest economic power is not undermined by 40 years of EU membership; rather, it has been sustained and enhanced by it.
The leave campaign has no credible answers to the question of what we gain economically by leaving the EU, and those voters who have not yet decided how to vote, often raise their concerns about the uncertain place that Britain may occupy after 23 June if we leave. I do not believe that that uncertainty is a price worth paying. Unless the Governor of the Bank of England and almost every independent economic forecaster are wrong, the UK will lose business, trade, jobs and investment if we leave, landing the Government with lower tax revenues. That means less money for our hospitals and schools. Even Brexit campaigners acknowledge that there will be an economic shock, while they plan to spend fantasy money 10 times over.
I appreciate how difficult it is for my constituents, and many others, to see the wood for the trees. Some of the claims and counter-claims from both sides have not helped, but my first concern is not for the wealthy, because they will survive whatever the outcome. The leave campaign likes to suggest that remaining in the EU is only in the interests of big corporate companies, the wealthy and the establishment. I suppose that as MPs we are all part of the “establishment”, but if I were not an MP, I would not be—none of my family are. It is thanks to that background, wanting the best for my constituents and living in Doncaster for nearly 20 years, that I am so concerned that ordinary families might pay the price should we leave the EU.
When I was a child, only the well-off could fly abroad. Today, we have cheap air travel and we can stay in touch with home without a £300 phone bill. We have guaranteed paid holidays that we are able to enjoy, and if we fall ill our European health insurance card guarantees access to health treatment anywhere in the EU. People are helped to afford those holidays because their shopping and other bills are cheaper, and more jobs are available because of our EU membership. I do not want people to exist just to work—through the opportunity to work I want them to enjoy life too. In Yorkshire, 250,000 jobs are directly linked to the EU. Siemens is investing £160 million in offshore wind manufacturing, creating 1,000 jobs on our east coast. Siemens and BAE Systems, along with many small and medium-sized businesses in Yorkshire, believe that it is in the interests of our region and country to stay in the EU. We must protect those jobs, rights and benefits, and the enjoyment that we get from them.
The previous Labour Government signed up to the social chapter, ensuring that every worker won the right to four weeks’ paid holiday. We added bank holidays on top—a good example of how we can improve workers’ rights through the EU as a sovereign nation. We forget this because it is so long ago, but 7 million more people gained paid holidays or enhanced their holidays as a result of that change. Voting to leave the EU could put at risk hard-won rights, because we know that some of the biggest cheerleaders for Brexit see protections for ordinary British workers as red tape to be binned.
Some people will use immigration as a reason to leave the EU, but they do not want to tackle the exploitation of foreign workers that affects British workers too. Immigration has become the issue on which those who want to leave the EU place the blame, but the failure is not the European Union’s—it is ours. I have spoken out about people’s insecurities about jobs, housing and public services in the future, especially in parts of Britain such as Don Valley where we do not live in metropolitan cities. For some Labour voters and others, the benefits of globalisation seem to have passed their town by, and for many, work has become way too insecure. Those people are not racist; they want fairness, and they want the benefits of immigration to employers and to the tax take of the Treasury to be matched by a greater amount of that tax supporting communities that have additional pressures on housing, schools and health services. We need openly to discuss the benefits of migration, including the many businesses and jobs that European migrants have created in Britain, but we must not ignore it when it causes problems. Is it perception or reality that Brits are not getting the jobs filled by European migrants? Are Brits being turned down or are they not applying? Is that happening in some sectors, and why?
Barbara Keeley
As I said earlier, a large number—230,000—of those who work in the adult social care workforce were not born in the UK, and that sector has a 5% vacancy rate because people are not applying because of the poor terms and conditions. That partly answers my right hon. Friend’s question, but is she as concerned as I am that the care sector, which is already in crisis, could collapse if there are further restrictions on those who come to work here?
Caroline Flint
My hon. Friend is right, and in Yorkshire alone more than 2,000 EU migrants work in health and social care. Sometimes we must consider the nature of the work going on, and ask why those insecure, poorly paid sectors are using migrant workers. Those workers are being exploited, and that does not do much for the users of those services either.
James Cartlidge
Is the right hon. Lady aware that the Labour Government introduced tier 3 in 2008, which was for unskilled migration from outside the EU? That has been closed ever since, with the official reason that we get those unskilled workers from the EU. Will she speculate on where we will get unskilled workers from in future, when the Poles, Lithuanians and so on no longer come here to do the jobs that we struggle to fill with UK workers?
Caroline Flint
I will not speculate, but we need a future where work in social care is not poorly paid, because we are doing a disservice to social care workers, and to the elderly people and other independent adults who rely on them. That is the challenge, and we as a country must take ownership of that and not blame the EU for all the problems on our doorstep.
There is fraud and people who are paid off the books, but that happens with British people who work illegally too, sometimes with bad employers or organised criminal networks behind them calling the shots. Many more people come here because of the work available and because English is the international language. Change is not as easy for some as for others, and leaving the EU will not solve that. The coalition Government were wrong to abolish the migration impacts fund, and it is right that freedom of movement should mean freedom to work, with people putting in before they take out. It is good news that the much maligned European Court of Justice has ruled that it is right for EU member states to be able to withhold benefits.
Let us be honest. Young Brits today do not queue up to pick crops or work in social care. The greatest deceit by the leave campaign is that the UK can keep all the access to the EU single market, but not allow EU workers to work here. If we restrict EU workers who are allowed to work here, why would the 1.6 million Brits who work or live in Europe not face similar restrictions?
Caroline Flint
I will not give way because I have already done so twice.
Non-members of the EU do not get better deals. Why would the EU offer Britain a deal that is better than that of any of the other 27 members? That would be a recipe for every country to leave. Most of all, we must not let members of the leave campaign claim that they are more patriotic than those who want to remain in the EU. I love Britain, and we will continue to be a strong, proud nation, but we are stronger and better-off as members of the European Union.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I now have to announce the result of the deferred Division on the Question relating to local government. The Ayes were 278 and the Noes were 4. Of Members representing constituencies in England, the Ayes were 260 and the Noes were 3, so the Question was agreed to.
[The Division list is published at the end of today’s debates.]
I now introduce a five-minute time limit on speeches.
Sir William Cash (Stone) (Con)
I have one simple message as we approach the last week of the referendum campaign: people fought and died for the right to govern themselves; people fought and died for our democracy, and it is on democracy that everything else depends.
Sir William Cash
In a minute, but not now.
People fought and died for the right to govern themselves, and everything else depends on that, including the economic arguments. I urge the British people to consider the consequences for future generations if we get this wrong and vote to stay in the European Union. As a result of successive leaderships since 1972, we have given away more and more of our powers to govern ourselves.
If I may say so, I predicted the consequences of that in a book in 1990, at the time of the Maastricht treaty. I said there would be protests and riots throughout Europe, and massive unemployment. I said there would be recession and waves of immigration. I said there would be breaches of the rule of law and the rise of the far right. I was concerned about those things then and I remain concerned about them now. The direction in which the European Union is being taken is putting the United Kingdom—our voters, our people—in the second tier of a two-tier Europe dominated increasingly, through the eurozone, by the excessive economic nationalism of the German system of economic government.
Members must bear in mind that the consequences of the single market are demonstrated by what I said earlier in an intervention: we run a trade deficit, or loss, with the other 27 member states of £67.8 billion a year. That has gone up by £10 billion in the past year alone. Our trade surplus with the rest of the world has gone up by about £10 billion in this year alone to £31 billion. European growth is going down—that is the trajectory of our capacity to have growth and jobs for the young people of this country. In Europe as a whole, youth unemployment in certain countries is as much as 60%. That is a complete disgrace.
In contrast, the German trade surplus with the same 27 member states is running at £81.8 billion and has gone up by as much as £18 billion in the past year alone. That trajectory is what the third-rate so-called economists are ignoring. They are the ones who got it wrong over and over and over again: they got it wrong over Maastricht, they got it wrong over the euro and they got it wrong over the exchange rate mechanism. I listened to the absolutely absurd nostalgic nonsense of the right hon. Member for Sheffield, Hallam (Mr Clegg). It is evident that those who got it wrong are trying yet again to mislead people.
Ms Tasmina Ahmed-Sheikh (Ochil and South Perthshire) (SNP)
I am grateful to the hon. Gentleman for giving way, not least because we might have the opportunity to get answers to some important questions. He will be aware that when the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith) was asked about the impact on the economy in GDP of Brexit, his answer was, “We don’t know.” He will also be aware that when Diane James, a UKIP MEP, was asked whether visas would be required, the answer was, “We don’t know.” Given that the answer to every question posed to the leave campaign is, “We don’t know”, perhaps the hon. Gentleman could answer these questions now.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. We need to have short interventions, not speeches. That was longer than five minutes!
Sir William Cash
I can say that I do know. I know because I look at the facts as they are now. The facts I have just given demonstrate that inside the single market we run a monumental trade deficit, while we have an enormous and growing trade surplus with the rest of the world. That surplus is the future. That is the vision. That is the means by which we will get jobs and ensure the future of our children and our grandchildren.
To conclude, it is very simple: this is about who governs us. If we get this wrong, we will not be able to organise and establish a democracy in this country, which is what people fought and died for in not just one world war but two.
Tom Tugendhat
I appreciate the loss that my hon. Friend’s family suffered in the second world war. My family suffered too, and I have had the privilege to wear the Queen’s uniform and fight for the peace we enjoy today. When I see the division and the spreading of hatred and virulent anti-foreign messages by some people in our country, I wonder whether they are really talking about peace or just stirring the pot.
Sir William Cash
I simply say to my hon. Friend that there is one person who has never, ever done that: me.
Sir William Cash
I am glad my hon. Friend acknowledges that. I do believe in peace. I do believe in good relations. What really troubles me, however, is that the majority voting system and the decisions taken behind closed doors are so manifestly undemocratic that they are completely impossible to justify. It has become a kind of dictatorship behind closed doors. We in this House make our decisions based on speeches and votes that are made in public and reported. We are held accountable. That is not the case in the European Union. If we give that up on 23 June, I say to my hon. Friend and to all hon. Members that they will live to regret it. This is about democracy above all else.
Diana Johnson (Kingston upon Hull North) (Lab)
I want to bring the debate to the local level and address some of the concerns that ordinary people are grappling with in making a decision on what to do on the EU. Many people in my constituency over the past few weeks have said to me that they feel angry. They feel that their city has suffered most because of the global recession and the downturn after the banking crisis. We have seen a lot of cuts to our public services. We have had the botched NHS reorganisation and people are having to wait longer in A&E. People have concerns about immigration, and the slogans the Government use about the northern powerhouse are not followed through with any action.
What worries me is the idea being put about that leaving the EU is some kind of panacea, and that somehow, magically, all those issues will suddenly disappear on 23 June if people vote to leave the EU. There are four very clear, self-interested reasons why my city of Hull, a proud trading city, should vote to remain in the EU. They are based on the economic benefits of being in the EU.
First, Siemens recently invested £310 million in building a wind turbine manufacturing factory in Hull. One thousand jobs will serve the work that DONG is doing in the largest offshore wind turbine farm off the east coast, creating another 2,000 jobs. Siemens states:
“Siemens believes that being part of the EU is good for UK jobs and prosperity and we have concerns about the possible effects of a vote to leave. We see the main benefits of EU membership as: tariff-free access to the UK’s biggest export market; a common set of rules between 28 countries that reduce business costs; and access for British businesses and universities to EU-wide innovation and research initiatives, which are helping to shape the industries of the future. These advantages help to make Britain a better place to do business, not just for Siemens, but for companies across our supply chain and beyond.”
Secondly, caravans are manufactured in east Yorkshire. The Sunday Times HSBC International Track 200 found that exports to Holland and Germany had increased by 21% in the past year, because their market is open and available to us.
Thirdly, on pharmaceuticals, Hull is the home of Smith & Nephew and Reckitt Benckiser. Deloitte has said that if we leave the EU there is a real risk to the UK pharmaceutical industry. At the moment, we have access to £8.5 billion of research, which would not be open to us if we left. We also have access to the innovative medicines initiative, which again will not be open to us if we leave the EU.
Fourthly, I want to say something about the university. Hull University employs 2,500 staff, with 1,000 in academic and research posts. It has received £12 million of direct EU funding in recent years, which is part of the £200 million of EU-funded research available to British universities. The vice-chancellor of Hull University states:
“There is a huge value in being at the EU table. If you are in the club, you get the chance to shape the research programme. If we weren’t in the club, we wouldn’t have that opportunity.”
In the end, in this referendum, the power is with the people, not Members of Parliament, but the last thing my constituents need is a home-grown, self-inflicted recession and years of uncertainty and instability, and we know that the effect of recession will be felt much more strongly in places such as Hull than in Surrey Heath or Uxbridge. The UK will struggle to renegotiate a trading relationship with the EU, and I am sure we will find we still have to contribute to the EU budget and accept the free movement of labour—an issue about which many people have genuine concerns—while having no say in shaping the EU’s future direction on that and many other issues. Whatever happens on 23 June, I will keep fighting for Hull, exactly as I have done up to now. I ask that Hull electors bear in mind the fact that if they choose to leave the EU, it will make the task of standing up for the city even harder.
Mrs Sheryll Murray (South East Cornwall) (Con)
I want to make a short contribution about the effect of the EU on the economic viability of our fishing industry and to congratulate the fishermen who have taken part in the flotilla on the Thames today to make sure we hear where they stand.
Our fishing industry is a ghost of its former self. Before we joined the EU, we had a successful, viable fishing industry all around the coast. I remember seeing fishing boats in south-east Cornwall moored three or four deep along the quayside. I do not see that today. Although fishing is no longer the largest employer in Looe—tourism is—people come to traditional fishing towns and expect to see fish being landed. A highlight they often mention is tasting fish and chips from one of the award-winning restaurants or buying fresh catch from fishmongers such as Pengelly’s in Looe. Where would tourism be without our fishing?
In 1971, just before we joined the EU, we had a thriving fishing industry bringing home millions of tonnes of fish and directly employing over 21,000 people. Last year, it caught about 600,000 tonnes and employed under 12,000 fishermen. According to a report co-ordinated by the New Economics Foundation, there was a 12% fall in the number of fishermen between 2003 and 2013. My late husband, Neil, was one such fisherman. He was forced to fish alone on his boat as a result of economic pressures arising from reducing quotas while still trying to meet the costs of increasing insurance, harbour dues and landing charges, not to mention repair costs and gear replacement.
The report attributes the decreasing employment to a decline in the number of vessels owing to the forced scrapping imposed by successive Governments to meet the artificial targets from the European Commission and to vessels investing in new technology—the latter might be true for larger vessels, operating with several deckhands, but is certainly not the case for small fishermen like Neil. It was a simple economic decision taken because he often could not land and sell the fish that swam into his net. The report also says that the trend of declining numbers of fishing vessels and fishermen is likely to continue.
The report does not mention the declining fish quotas that the EU sets each year. Haddock is just one example. The UK gets 10% of the total allowable catch, while France gets 70%, and the same applies to many other species in many other areas. Would hon. Members go into a bank alongside a French person, each of them with a bundle of notes to the value of £70, and throw £60 into the wastepaper bin, while the French person invests it all? That is effectively what fishermen in Looe are being forced to do today because of the quota share-out agreed by the EU in 1983 known as “relative stability”.
Bob Stewart
Everyone in the House knows the sad story of my hon. Friend’s husband. How much increased capacity would the fishermen of Looe get were we to leave the EU?
Mrs Murray
My hon. Friend makes a good point, and I will come to it in a moment.
I will not get into arguments with those who want to remain, further sacrifice this great industry and abandon the economic wellbeing of our coastal fishing towns, which would be disproportionately affected. I cannot say that Neil died as a result of the common fisheries policy, but I can say that it contributed to the economic pressure he felt when deciding to fish alone. We talked about it and decided that it was better that he work alone in less rough water than work in storms to provide for two families.
I say we throw our fishermen a lifeline. Our Fisheries Minister has been to Brussels and seen for himself how little he can deliver through horse trading in the Council of Ministers over proposals put forward by the unelected European Commission. I say, in response to my hon. Friend the Member for Beckenham (Bob Stewart), that if we vote to leave, the Minister could make the decisions that apply to fishermen in the UK’s 200-mile median line limit.
As someone who has lived and breathed the UK fishing industry for 30 years, I say there are no economic benefits to UK fishermen from EU membership. About 92% of UK fishermen are calling for the UK to leave. I say we throw them a lifeline, vote to leave and take back control of our 200-mile line—80% of the total EU pond. We would not necessarily have to say to member states, “You can’t come and fish in our waters”, but it would be on our terms, not those arising from horse trading among 28 states sitting around the EU table debating proposals from the unelected, appointed, bureaucratic European Commission in Brussels.
Ann Clwyd (Cynon Valley) (Lab)
Back in 1979, I was among the first elected Members of the European Parliament, and I supported withdrawal from the Common Market. Those were the days of wine lakes and butter mountains and an out-of-control common agricultural policy subsidising overproduction and dumping on world markets. It was some years before the development of the social chapter introduced legislation on workers’ rights and equality, and there was no European environment policy.
After several years working with colleagues from all the other countries in the European Parliament, I came to a different conclusion. On 19 February 1982, I wrote an article in the New Statesman headed, “Why I changed my mind on the Common Market”. This year, I have written another article, again in the New Statesman, explaining why I still support remaining in the EU. The arguments I made then are still true. Then, as now, our socialist and social democratic colleagues in the European Parliament urge us to remain and work with them for a better future for jobs, security and workers’ rights.
One of the concerns I had then was about European action to save the steel industry. Today we are still battling to save the steel industry, particularly in Wales, but it is important for workers in multinational companies to have information about management plans for closures or mergers, and European legislation has helped to improve these rights to information. While none of us would claim that the EU is perfect—and it is not unique in that—peace, jobs, workers’ and consumers’ rights, the European social model and the environment are safer if we stand together as constructive members of the EU.
My party has always been a party of internationalists, but Brexiteers would swiftly make a bonfire of hard-won rights if we left. They consider four weeks’ holiday, maternity and paternity leave, equality and health and safety legislation, temporary workers’ rights and much more to be so much red tape to be dispensed with. Standing up to globalisation alone is a pipe dream; it requires nations to co-operate. Likewise, the pressures of immigration will not fade if we go it alone. We live in difficult times when many people are feeling discontented. To help combat that, the way forward for Britain is to continue to work with the EU for more reforms.
We see reforming and modernising the EU in solidarity with continental socialists and social democrats as an ongoing process. Do those who advocate developing hundreds of individual trade deals with countries large and small really expect to achieve more than can be achieved as part of the world’s largest trading bloc? Would the Brexiteers achieve better terms in the TTIP negotiations than the EU can with strong pressure from directly elected MPs in the European Parliament and strong member states to ensure protection from rampant multinationals? I doubt it. We in Britain benefit enormously from European co-operation funding for research, regional development, cultural projects and, yes, agricultural support, as well as from peace and free trade. The EU has always been at the forefront of working to protect human rights in the world.
In Wales, EU countries buy 41% of our exports, which is worth £5 billion a year to us. Companies invest here precisely because we are in the EU, giving them direct access to the largest single market in the world. If we leave, we would soon see our big firms switching their investment to continental Europe, with the loss of thousands of jobs here.
In 2016, I still believe that we are better together. Those who will be celebrating if we leave the EU include such unsavoury characters as Putin, Trump, Farage and a bunch of climate change deniers, who have no intention of working towards a better future for the most vulnerable in our society. For prosperity and collective security, and if we want an economy and society that work for all, not just for the few, I stand by my belief that we are better off remaining in the EU.
Neil Carmichael (Stroud) (Con)
The fact of the matter is that this referendum would not be useful exercise if we were not a sovereign nation, because we would be unable to implement the outcome. That proves that we are sovereign—the questions are what we do with our sovereignty; what we do to influence our neighbours; and what we do to advance our national interest. Because we are a vibrant, ambitious and decent society, we have to do that within the European Union, as I will explain. It is about the future; it is not some blast to the past. It means this country thinking about what we do for our people beyond today.
Let us take trade; we have heard a lot about it today. We export twice as much to the Netherlands as we do to China. That is a fact. Why does it matter and what does the European Union provide for us? It provides a huge pool of wealth. It is the world’s largest single market, not just in its activity but in its value. It is nearly twice the size of China, yet some are thinking of leaving it. That would be madness, because the people we trade with most are the people who are most like us and who will benefit most from us as well. That is the trade argument.
Then we come to investment. In my constituency—and I bet in most other Members’ constituencies—there are examples of powerful intervention from the European Union through investors. That matters, and 48% of our foreign direct investment comes from the European Union. What does that equal? It equals jobs and it equals rising wages and opportunities for our young people.
That brings me on to the issue of our universities and young people’s opportunities to develop careers after they have been to university, not to mention the importance of opportunities for young people who do not want to go to university. The fact remains that the opportunities open to them by moving around Europe are immense, and it is vibrant for them and great for our economy. Do we want our young people to be stuck here when others are thriving somewhere else?
That brings me on to migration. It is a two-way street. We must remember that. There are just as many people coming here to help us with our skills as there are people going from here to there to make money for this economy. There are nearly 2 million Britons working or living in the European Union, benefiting from the opportunities with which being in the single market provides them.
Mark Pritchard
Does my hon. Friend agree that the majority of EU citizens coming to this country come here to work hard, pay their taxes and better their and their families’ lives—and that the majority are not here to scrounge?
Neil Carmichael
Absolutely. Some factories in my constituency could not do as much as they do without the sort of skills that they can get from the European Union. My hon. Friend is absolutely right about that.
Neil Gray (Airdrie and Shotts) (SNP)
The hon. Gentleman is making a fantastic speech. Does he agree that in some quarters, this referendum has been allowed to descend into a pseudo-referendum about immigration and that for the remain side to win, we need to show leadership over the next week and bring forward a positive case for remaining in Europe; and that we should shoot the right-wing Brexit fox that is scaremongering about immigration?
Mr Carmichael
The hon. Gentleman is absolutely right. I was coming on to leadership, but I will tackle the issue now. The European Union has benefited from Britain’s membership countless times in the past. It was the British Government who drove through the single market. It was the British Government who ensured that a country like Poland could come into Europe and benefit from all its opportunities. We should not forget that when I was born, that country was based within the empire of the Soviet Union—a place where liberal democracy was non-existent and where growth and economic opportunity could not take place. Yet we have managed to get that country into a position of being totally democratic and absolutely robust in its economy. That drives a coach and horses through the argument of anyone who says that being in the European Union is somehow undemocratic or a challenge to democracy. The reality is that, when Britain shows leadership, as we have in the past, it has been good for Europe and, obviously, also good for us.
When we win this referendum campaign—I certainly hope that we do—we need to focus on the positive case. It is not a question of sniping from the sidelines; we need to get involved, set the agenda, work with our allies and ensure that the people we represent can continue to benefit from the good things that the European Union has brought.
Mr Carmichael
I am afraid not. I am running out of time.
All organisations need to be reformed. The other day, I was told to move my car for a reason that I have still not understood. This House needs to reform; all organisations need reform—and the European Union is no exception. The key thing is that we are the ones to drive those reforms. We are the ones who should be constructing the alliances to push through the kind of Europe that we want—one that is competitive, that recognises freedom and that is at the heart of promoting liberal democracy, not just within the EU but beyond it.
The question of international impact must also be borne in mind. Europe is the world’s largest single market, but it is also a place of huge influence in the world. We in Britain want to be part of that. We want to shape and develop that influence. That is why every single US President has told us, in one way or another, that we should be a member of the European Union. That is why every single Commonwealth leader has told us that we should be in the European Union. The only two country leaders that I can think of who are casting some doubt on this matter are those of North Korea and the Russian Federation. If that is the supporter group of the leave campaign, I am staying!
It is essential to make the positive case. We must do so not from an apologetic position or as a result of some tepid hope; we should do so out of ambition for our country and our young people. They need to know what we really believe—that by participating internationally with a clear agenda and a determination to turn away from narrow-mindedness and the concerns of little groups of people, we can instead think big and be big. With that drive behind us, this country has the capacity for an exciting future ahead.
Mr Jamie Reed (Copeland) (Lab)
I will begin by echoing what the shadow Chancellor said about the rights that the working people of our country have as a result of our membership of the European Union. I am delighted to see the Labour party leadership making a strong, positive case for Labour people to remain in the European Union for strong Labour reasons—but not just for Labour reasons, because remaining in the EU is in the best interests of everyone in our country.
I want to speak directly to my constituents today. I want to speak to them about what they care about, what I care about, what they have sent me here to do for the last three general elections, and why they have done so. First, I want to acknowledge the confusion, the anxiety and even the anger that my constituents will feel about the European Union. I understand that anger, and I understand that frustration, because for more than 25 years my constituents, like those in the rest of the country, have listened to incredible, outrageous lies—damned lies—about the European Union and our place in it, from talk of straight bananas to any number of invented stupidities.
People like me who believe in the benefits to our country of our membership of the European Union are largely to blame for that. We have never taken it on; we have never called it out. We have rolled our eyes, we have shrugged our shoulders, and we have been shy about taking on the lies. Now we are seemingly paying the price, but it will be constituencies like mine, and communities like the one that I represent, that will overwhelmingly suffer the most if we vote to leave the European Union.
There are specific issues that will be of profound concern to the people of Copeland, west Cumbria and Cumbria as a whole if we vote to leave the EU—our local NHS; our economic future, particularly the nuclear industry; our security; and our environment. I shall deal with them all in turn.
Alison McGovern (Wirral South) (Lab)
My hon. Friend is speaking with characteristic eloquence about the north-west. Will he explain further why we must pay attention to the parts of our country that are geographically furthest away from metropolitan centres?
Mr Reed
In an ever more globalised world and economic marketplace, we absolutely must pay special attention to those peripheral communities, which have contributed so much to the economic strength of our country over many decades, particularly since the end of the second world war, but which have been—deliberately, I have to say, as a result of policy—marginalised and ignored for too long. I have to say, too, that whatever happens in respect of this referendum, the country has changed, fundamentally and permanently, as a result of that policy. The situation in the north-west, the north-east, the south-west and other peripheral economies in the United Kingdom, but particularly in England, must form a pivotal part of the national conversation in future.
Alongside my constituents, I have campaigned for years to protect local health services, including those at West Cumberland hospital, in our local community hospitals, in our general practices and dental practices. We have built a new hospital in Whitehaven and a new health centre in Cleator Moor, and we are improving and expanding the health service in the cottage hospitals in Millom and Keswick, but enormous challenges remain. At the heart of our NHS difficulties are the policies of the Conservative Government, who deprive our community of the necessary resources, investment and recruitment. It is absolutely clear that the economic damage that would be done to our country if we left the EU would be felt throughout the NHS in Cumbria. Make no mistake: an already intolerable situation would become worse. The Conservative Government would have every excuse it could ever want to cut, slash and burn local health services in a way that we have never seen before.
As for our economic future, I have spent more than 10 years on the project to build a new nuclear power station at Moorside, in my community. That has involved writing new nuclear policy with the No. 10 policy unit in 2005, ensuring that my community was chosen as a new nuclear development site—which was never automatic —and attracting NuGen to our area as a power station developer. The project represents the single largest private sector investment that my community has ever seen—more than £20 billion—and thousands of jobs. That is investment that we need, want, deserve and have earned.
I want my constituents to think long and hard about this during the time that remains before the referendum. The United States is pleading with us to stay in the European Union, the Japanese are pleading with us to stay, and France is pleading with us to stay. NuGen, the company that is responsible for the investment in that project, is a consortium of American, Japanese and French companies. I urge my constituents to “do the math”. Brexit would undoubtedly increase the risks to the project, not just because of the financial turmoil that it would create, but because of the damage that it would do to the EU and France in particular. There are potentially profound implications for the Hinkley Point C project as well. So I say to my constituents, “Stick with our plan, stay on course with our project, do not squander more than a decade of work, and do not risk our future.”
Then there is the security issue. Brexit would undoubtedly make us less safe and less secure. With the United Kingdom out of the European Union and with the EU shrinking, contracting and weaker as a result, we will cause profound damage to NATO. What message will that send to an increasingly belligerent and expansionist Russia? Brexit could give no greater encouragement to Vladimir Putin. This is not “Project Fear”, but “Project Fact”. When I went to Chicago recently as part of the delegation to the NATO Parliamentary Assembly, we were told by the former United States ambassador to NATO that Brexit represented
“the greatest threat to the security of the United States, the European Union and the NATO area.”
Finally, let me deal with the environment. My constituency takes an uncommon pride in its natural environment: we have England’s highest mountain and lake, and some of the best beaches in the country. The European Union has helped to deliver massive improvements in our natural habitats, all of which are visited by thousands of tourists from the EU who contribute to our economy every year. Moreover, the EU paid attention to the Sellafield clean-up before the United Kingdom did.
My constituency is special, my constituents are special and we are creating something special. A vote for Brexit would threaten it all.
Robert Neill (Bromley and Chislehurst) (Con)
A few moments ago, my hon. Friend the Member for Stroud (Neil Carmichael) made a passionate and magnificent speech in support of our membership of the European Union. He and I have been on the same side on this matter for many years, and I endorse every word that he said.
Let me begin by referring, like the hon. Member for Copeland (Mr Reed), to matters that particularly affect my constituents. The largest employment sector in Bromley and Chislehurst, in Greater London, is its business and financial services sector. According to the Office for National Statistics business and employment survey, 32.4% of my constituents and their families work in that sector. It is critical to their local economy—and that is leaving aside all the jobs in the supply chain that result from the income that it provides. It is crucial to the London economy, which benefits the whole of the United Kingdom. Leaving the European Union would, without question, damage the interests of the financial services industry, in which Britain is a world leader. This is an issue in which I have taken some interest in my capacity as secretary of the all-party parliamentary group on wholesale financial markets and services.
We have a winner here, and we have an opportunity not just to make it survive, but to make it better and stronger in a reformed European Union. That is why, when I intervened on the Foreign Secretary’s speech, I wanted to stress the importance of the Prime Minister’s renegotiation achievements. There were two key achievements. First, there was the commitment that British financial firms based here in the UK, and therefore outside the eurozone—of which we will never be members: we will never be subject to its internal governance rules or their bail-outs—will none the less have the significant advantage of being able to trade freely within the eurozone and the rest of the single market. That puts us in a unique position which no other free trade agreement replicates.
If we add to that the commitment in that renegotiation to completion of the capital markets union, that gives us a double opportunity to push forward in this area, at which we excel. It would be lunacy to walk away from that opportunity. Of course the Prime Minister is right to say we could survive outside the EU; London and the financial services industry, and my constituents, would survive, but I believe there is a real risk that they would be impoverished and I see nothing patriotic in running the risk of impoverishing my constituents or the people of this country.
Alex Chalk (Cheltenham) (Con)
My hon. Friend is making a powerful speech and makes an important point about patriotism. Does he agree that key to Britain’s national security is our economic security, and at a time when as a nation we are still borrowing as a nation more than the entire defence budget we need every single penny of public revenue to ensure our economy is strong, our finances are strong and our country is strong?
Robert Neill
My hon. Friend is absolutely right. The economic interest is a national strategic interest of the United Kingdom. It is a damaging thing to this country for anyone to put that at risk; there is nothing patriotic in that.
Mr Jim Cunningham (Coventry South) (Lab)
So far I can agree with what the hon. Gentleman says, but some of us can remember the 1975 referendum, and the reality is that the options put to us by those who want to opt out were looked at then—trading with EFTA and the Commonwealth countries. The reasons why Harold Wilson thought we should go into Europe are there for all to see.
Robert Neill
I would not like to speculate as to the motives of those who, sometimes from genuine belief, but maybe sometimes from cynicism, want this country to leave the EU. The hon. Gentleman is right, however, that the issue was debated then. He and I can remember it—we both voted in that referendum, I suspect. Of course the EU needs reform, as everybody has said, but any businessperson will tell us, “You don’t walk away from a major market that you’re in just because it isn’t perfect; you stay in there, you negotiate your trade and you make the market work better for you.” That is basic common sense, and frankly I am amazed and mystified that some people who really ought to know better cannot get that.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
Will my hon. Friend give way?
Robert Neill
I have been generous in giving way so far and I am conscious that others want to speak. I hope my hon. Friend will forgive me, because I know he will speak later.
Given the position that we have of that double success for the City of London, it would be a tragedy—a criminal thing, virtually—for this country to turn away. The financial services industry, as well as being a key UK asset and part of our national strategic interest, is not just about people in the City of London and those working in banks, insurance and offices. A successful financial services sector affects every family in this country. It affects every pension fund. It affects the pensions of millions of people, whatever their income situation or previous position in life. To put that at risk is not to damage just that industry, but to damage the whole population of this country. It damages the revenue stream, as my hon. Friend the Member for Cheltenham (Alex Chalk) just said, that underpins our public services. I am sorry to have to say this to some of my friends who I know genuinely believe otherwise, but it will be a profoundly unpatriotic thing to leave the EU.
Victoria Prentis
My hon. Friend is making a passionate speech about various areas of the economy. Has he considered how leaving the EU might affect manufacturing industries, including a company in my constituency that has today told me that it has written to its employees to implore them to vote to remain?
Robert Neill
I am sure my hon. Friend is right. I too have manufacturers in my constituency. Every sector of the British economy will be damaged by Brexit. Uncertainty damages business. Economic uncertainty damages business and so does legal uncertainty, which, as a final point, makes me all the more amazed to see some people who ought to know better suggesting that somehow we could introduce some emergency legislation to circumvent the rules laid down in article 50 of the treaty were this country, regrettably, to decide to leave. That would be a breach of law. It would involve the UK being suspended from the EU, losing the protections the EU gives to our businesses and turning 200 years of British constitutional practice, whereby this country has never unilaterally abrogated a treaty we have entered into, on its head.
It would be a scandal to ask this House to do that, and I say now that I, for one, would never vote for it. But I want to make sure first of all that we never get into that situation. We need to make the positive case for why this country is better economically, socially and, I suggest, morally for being in the European Union—because ultimately we are a broader-minded, a broader-looking, a happier, a more diverse nation as a result of our membership, and I do not want the likes of the vile creature who leads UKIP to drag this country backwards.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
I rise to support the motion because, first, coming out of the EU defies all the logic of our emerging global economy. If we look around the world, we see that the emerging global economic superpowers are China—which might well overtake the USA as the major economic power in the world in the next 20 years—India and Brazil. As the former Chair of the Business, Innovation and Skills Committee, I visited Brazil and China to see how our businesses were faring in those countries. Some were doing very well. JCB had opened a joint venture company in Brazil and GKN had a joint venture company in China. The reason they were opening those companies was that the tariff barriers were too high for them to export from their British manufacturing bases into those markets.
We must be realistic about this. If we were to come out of the EU and try to expand our exports to those countries, we would be expanding into countries that are, quite justifiably and understandably, ruthlessly self-interested in what they need to do to develop their own standard of living. The idea that, on coming out of the EU, we could somehow make up for the deficit in our exports to the EU by expanding our trade into those developing countries is, frankly, a fantasy. The fact is that there is nothing we could do afterwards that we are not doing now, and there would be no compensatory boost in exports to those countries after coming out of the EU.
My constituency in the west midlands offers a supreme example of the benefits of globalisation and the international movement of capital. If we go back 10 or 15 years, the car industry—which for donkey’s years had been the mainstay of local manufacturing—was in a terrible state. Since then, however, there has been investment in the motor industry there, which has been mirrored in other parts of the country.
Mr Jim Cunningham
My hon. Friend mentioned the motorcar industry. Twenty to 25 years ago, Coventry companies such as Massey Ferguson, British Leyland and Standard were household names. That is why it is vital that we remain in Europe, in order to further develop the recovery of manufacturing in the west midlands.
Mr Bailey
Absolutely. My hon. Friend’s experience echoes my own on the other side of the midlands economy.
The fact is that investment, particularly by Tata in Jaguar Land Rover, has transformed the manufacturing economy in my constituency and the surrounding constituencies. We now have the new i54 development, which is a supreme example of what new investment in modern motor manufacturing can do. As a result of that, the local supply chain has been rejuvenated.
We have problems, however. My constituency has more foundries than any other in the country, and they form a vital part of the supply chain that underpins our ability to produce high quality cars and superb manufacturing exports, but they have skills shortages and an ageing workforce. However, they have been helped by the recruitment of skilled workers from eastern Europe through the EU. The companies involved tell me that without those workers, their ability to meet the demands placed on them by the cutting-edge technology that we are producing to expand our manufacturing exports would be hampered and jeopardised.
James Cartlidge
Is the hon. Gentleman aware that the policy of vote leave is that, when we leave the EU, we will stop all unskilled migration into this country? Does he think that that is even remotely credible?
Mr Bailey
No. Unfortunately, however, I do not have time to address all the issues that would arise from the leave campaign’s immigration policy, or lack of it. I need to focus on the relevance of these arguments to my constituency.
The fact is that without those workers, our ability to sustain this country’s cutting-edge manufacturing capacity would be lost. I would be the first to agree that we should be pioneering better skills, apprenticeships and so on, and I am glad that the industry is looking at that, but it does not have the capacity to recruit those workers at the moment. If those in the leave campaign were to carry out the promises they have made on migration, there would be a real prospect that those companies would be starved of the skills they need, and it could well lead to unemployment among the long-standing indigenous population who have worked in those industries.
As I do have a few moments left, I will address some of the wider issues raised by those in the leave campaign’s migration policy. Andrew Neil got out of Nigel Farage eventually the idea that they would try to reduce net migration figures to 50,000. They then deploy a seductive argument that if they stopped migration from Europe, they could have more from the non-EU countries, which I think is a pitch to our ethnic minority population, without it having an impact on our skills base in this country. The fact is that the sort of figures being quoted by the leave campaign, and by Nigel Farage in particular, would mean there would be no way we could recruit the levels of staff needed both for the manufacturing industries, which we have in my constituency, and the service industries, particularly the care industry, which have been highlighted by one or two Members today. Those in the leave campaign are raising a particular issue to try to inflame local public opinion, but then peddling only a bogus solution. We have one week to expose that and demonstrate to people that their interests are within the EU and in sustaining our current economic and manufacturing base.
Tom Tugendhat (Tonbridge and Malling) (Con)
It is a great pleasure to see you in your place, Madam Deputy Speaker. Over the next few days, we will make the final arguments on the question that will decide the future of not only our country, but our continent. We will be asking ourselves not only who we are, but what we wish to become. Whatever answer the people of the United Kingdom give us, it will be for us here in this House to apply that decision in the best interests of our whole nation. Like many on these Benches, I have made my views known. I have spoken out for what I believe in and for what I believe to be in the best interests of my community in west Kent and the whole nation. I have fought for this country and despite some of the comments I have heard, I will not be silenced when speaking in its interest.
I recognise that today, no matter what we say, it is no longer Parliament that is sovereign—it is the people, as it rightly should be. Whatever is decided in the ballot next week, that decision will be final—50% plus one vote will carry the day. To argue otherwise would be to threaten the fabric of our political settlement and undermine the legitimacy of this House. I urge all Members to remember that in the days after the referendum and not to question the integrity or intelligence of the British people in having expressed their opinion. What may follow is less certain, but, as we used to say, it will be our job to receive our orders, gain height, turn to the right and carry on.
Of course that does not mean we have to wait to be ready. On the contrary, we should be thinking, even now, about what an in vote or an out vote would mean for Britain.
Jim Shannon (Strangford) (DUP)
The EU’s bureaucracy and regulations have reduced the number of fishing boats in Portavogie in my constituency from 130 to 70. Six major processing factories have closed in Portavogie and jobs have been lost—young people are drifting away from the sea. The EU has devastated the fishing sector in my constituency. Does the hon. Gentleman agree that if we want to ensure the re-emergence of the fishing sector in the whole of the United Kingdom of Great Britain and Northern Ireland, we have to be out of the EU? For that to happen, we have to vote no and leave Europe.
Tom Tugendhat
The hon. Gentleman speaks well for his constituency, but the Member who represents Menai may talk about Menai Oysters and Mussels, which sells most of its catch to Europe and would probably wish to stay in the EU. Even in one industry, there is no single answer, and it is worth listening to the debate of the whole House and to all the people of this United Kingdom, rather than just one pressure group. Of course that does not mean that we have to wait to be ready. As I said earlier, we need to get ready.
The change in the stock market over the past few days has shown that Europe affects not only the fishing industry—for the better in some ways and for the worse in others—but investment in our entire island. Today, people are looking at us and wondering what the future holds.
Tom Tugendhat
I wish to make some progress.
People are understandably concerned that the factors that led them to put money into our businesses may not last. The interconnected market, the skills base and the global trading agreements are not as permanent as they once thought; they are not even as permanent as they looked a few days ago. The implications and the consequences for us are very severe. Some have begun to doubt us, but they are wrong. Britain is a powerful and growing economy, and despite the undoubted hiatus that would follow a Brexit, we will recover. Indeed, for the markets, we will once again become a safe haven, but only by comparison with our neighbours. The implication that the Europe Union could disintegrate is worrying.
Let us be under no illusion as to why the option to leave the EU is bad for Britain. It is not, as some have sadly claimed, because Britain is too small. It is not because we cannot survive in a globalised world—it is clear that we are better connected and better integrated with the global economy than many other nations. No, it is because we are the economic leaders of a continent of more than 500 million people who are crying out for that very leadership and the very reforms that we offer.
Tom Tugendhat
I will make a little progress if I may.
It is worth remembering that this House has shaped the leadership of Europe. We have already achieved two very significant reforms. First, Britain, under the then Prime Minister Margaret Thatcher, steered the competing economies of Europe into a single market. She achieved that against pressure from many other member states. She did so to extend what Britain needed then and what it needs now: economic relationships that endure across the continent. The result was a huge boost to the economy. I pay tribute to my right hon. Friend the Member for Wokingham (John Redwood), who is no longer in his place, for what he did as a member of the Cabinet that took us into the single market. I also recognise the work of my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), who is also not in his place, as he helped us to achieve the lowest debt levels in a century.
Secondly, we have extended the boundaries of European co-operation to the borders of Russia. This may seem obvious now, but when I was growing up during the cold war, the challenge of uniting a continent seemed extraordinary. Now so obviously one nation and at peace with her neighbours, Germany was not always so, and many opposed the unity that was achieved. The inclusion of Estonia—I had the privilege of serving with Estonian troops in Afghanistan—Lithuania and Latvia shows what inclusion can achieve in the service of peace.
Simon Hoare
I know that my hon. Friend is a busy man, so I do not know whether he has seen General Smith’s comments in today’s media about the importance of and need for co-operation and partnership. It is a compelling case that underlines the point that my hon. Friend is making.
Tom Tugendhat
General Smith is one of the great strategists of our generation. His book “The Utility of Force” is well worth reading.
Britain played an essential role, but it did so not just for ourselves or for others. It did so because shared wealth is good for us all. We prosper when our partners prosper, we are strengthened when our friends are strong, and we achieve peace when our friends are at peace. Therefore, whether we stay or go, we must have a plan.
Our allies around the world—in the middle east, South America, the far east and the United States of America—have invested fortunes through our markets, billions in our industries, and decades in our friendship. They need to know that our promises count and mean something. They need to know that our agreements will endure. They need to know that if we vote out, we are not turning our back on the world, because it will look to them as though we are.
Whatever happens, I urge Her Majesty’s Government to commit to investing heavily in the Foreign Office over the next few years, because the trouble that we have caused our friends and allies in this very debate and the doubt that we have sown across the world are so serious that our markets are struggling, and we need messengers of hope and praise to go to our friends’ capitals to reassure them. Too often we have ignored our allies, and too often we have laughed at our friends. We must move on. I have heard many people talk about patriotism. Today, I say that I am a patriot, but this is my land here and it extends beyond the sea and beyond the cliffs. This is our continent and we must lead it.
Phil Wilson (Sedgefield) (Lab)
History shows what happens when this country turns its back and stops engaging with Europe. That is why most of the world and many experts are asking us to remain where we are. Those who say that we must look to the world as well as to the EU are correct and I agree with them, but we should do that as part of the biggest and richest single market in the world. If the rest of the world is telling us that we can best deal with the rest of the world by being in the EU, we should listen. The USA, China, India, Canada, Australia, New Zealand, Japan and the whole Commonwealth have said that we should remain where we are. Not one country has come out and asked us to leave the EU. Only Russia and North Korea might want us to do that.
World economic forums such as the OECD, the International Monetary Fund and the World Trade Organisation all say the same. Unite, the GMB, the CBI and the National Farmers Union say we should remain where we are. NATO says we should remain where we are, as do universities and 90% of scientists. The Royal College of Midwives says the same thing. Even the Royal Society for the Protection of Birds says, “Stay where you are.” If the coalition telling us to remain where we are stretches from the world’s superpowers to the local birdwatcher, we should listen to what they have to say.
I want to say a few words about the north-east of England and the con that the leave campaign is perpetrating on people not just in the north-east, but across the country. The north-east is a net beneficiary of EU grants and subsidies that help to train our young people for work and fund small businesses, our universities and agriculture, helping our economy to grow. Even the Chancellor of the Exchequer said on Monday that leaving the EU would put the northern powerhouse at risk. Between now and 2020 the north-east is due to receive about £800 million from the European Union.
Mr Kevan Jones (North Durham) (Lab)
Does my hon. Friend agree that the north-east of England has benefited tremendously from inward investment, of which the most successful recent example is Hitachi in County Durham? I pay tribute to him for his role in securing 700 well-paid jobs building trains not just for the UK market, but for Europe.
Phil Wilson
My hon. Friend is right. Hitachi has come to the north-east of England for two reasons: it has an excellent workforce and is the gateway to Europe. We know that its business model for that investment— £82 million in Newton Aycliffe in my constituency—was predicated on the fact that we are part of the EU. Those who support the leave campaign say that we should not worry about losing the £800 million that we would get from the EU because they will find the money themselves.
Nick Thomas-Symonds (Torfaen) (Lab)
My constituency, like that of my hon. Friend, benefits tremendously from European social fund money. Does he agree that it is not credible for the leave campaign simply to say one day, “We will replace that money,” without any sense of where it will get it from?
Phil Wilson
My hon. Friend makes a good point, which I shall expand on during my speech.
The leave campaign says that it will pick up the tab after 23 June if we vote to come out of the EU. I say to the people in the north-east, “Don’t listen to those people. They can’t do it. It’s the biggest con ever.” First of all, they are not the Government. Secondly, they have already committed to spending the money that we contribute to the EU many times over. Thirdly, the people making those comments are Conservative politicians who for years said that there was no money available, but they have now suddenly discovered a magic money tree. Like all things to do with magic, it is an illusion. Don’t fall for it. It is what it is—an illusion.
The leave campaign is spraying spending commitments around as if there were no tomorrow. Perhaps if we leave the EU, there will be no tomorrow. The campaign’s analysis shows the figures involved. It has committed to building more hospitals, providing more school places, and more spending on science, regional airports, improving railways, more housing, more this, more that, and the list goes on and on. The cost is over £100 billion— £100 billion it does not have. So now we know: as of today, we can honestly say that the campaigners who want to leave the EU are perpetrating the biggest con trick ever on the north-east. I say to the people of the north-east, “Don’t be conned by the leave campaign’s fantasy economics.”
I must admit that I fear for the future of our region, where I have lived all my life, if we do leave the EU. Over 50% of the north-east’s trade is with Europe, and that provides more than 100,000 jobs. Those two facts alone should make people think twice about leaving. If they do think twice, and if uncertainty sets in, they should vote to remain. They should not be conned into believing that a land of milk and honey awaits us on 24 June, the day after the referendum, because it does not.
I want to say this to the people of the north-east, “Do you really believe that the people who want to leave, such as the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith), who gave us the bedroom tax and food banks, and the Lord Chancellor and Secretary of State for Justice, who said that the NHS needs to be dismantled, have the best interests of the north-east, and especially Labour voters, at heart?” I do not believe they do. They are very well off, and they will remain well off whether we vote to remain or to leave. I say to the people of the north-east: don’t be conned—vote to remain.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
I enter the debate with a certain amount of trepidation, especially after the powerful speech by my hon. Friend the Member for Tonbridge and Malling (Tom Tugendhat).
The reason I will be voting to remain is that, frankly, I do not trust the Germans and the French to run Europe without us there to keep a close eye on them. Over the last 16 years—as the parliamentary candidate for Plymouth, Sutton and Devonport and, more recently, as its Member of Parliament—I have always sought to take a realistic Euro-view. I am not Euro-suicidal; we should make sure that this thing works for us and that we get as much as we can out of it. However, if there is a downturn in our economy, which appears likely should we come out, any action on the issue I have campaigned on for the last 16 years—the improvement of the railways and roads down to the south-west—will be put off for another 10 or 15 years, which would be a personal disaster.
The debate on our membership of the European Union is very similar to previous debates, such as those on the corn laws and imperial preference. Thank goodness our country eventually found a way through those issues, but it unfortunately had to get involved in a few world wars in the process. I am keen to ensure that that does not happen again, especially as my relatives have fought in every world war and probably every other war—we have been here for a long time.
Our job in Europe is to maintain the balance of power. That is utterly crucial. When we have walked away from Europe, we have had to pay with an enormous amount of blood and an enormous amount of treasure. I received a briefing the other day from one of the more renowned journalists in this country, who told me that America is now looking less at Europe—it sees Russia as a regional, rather than a world, issue—and that it is much more interested in the Pacific. If we come out of Europe, therefore, we will be Billy No Mates, and I do not want that to happen.
Earlier this year, during the recess, I spent a few days in Norway with the Royal Marines, seeing for myself some of the issues they have to deal with. I got involved in trying to build shelter, light a fire and kill a chicken—I did not do that—and it was all rather difficult. However, I also learned how important the Baltic states are for this country, and we must continue engaging in Europe because I am afraid that that issue is going to be very big. I would also add that the Americans are not interested in putting money into NATO; they are seeking to take it out, and the moment we decide to walk away from all of that, we will find ourselves having to spend more money.
Tom Tugendhat
Does my hon. Friend recognise that the Republican candidate for the United States presidency has declared NATO obsolete?
Oliver Colvile
Absolutely. I find that utterly stunning. That is why we want to remain.
Babcock, which runs the dockyard in my constituency and employs 5,000 people, has written a letter to The Times very firmly in support of remaining. I have a boat manufacturer that is very worried about what would happen should we come out, because it thinks that the French and the Greeks will seek to protect their own boat-building industries and that it will therefore have to pay a significant surcharge. We would end up seeing the university and students in my constituency very badly damaged. We have a global reputation for marine science engineering research, and I do not wish to jettison that.
The claimant count has come down to below 4% in an extremely deprived constituency. It is rather unique to have a Conservative Member of Parliament representing an inner-city seat that has an 11-year life expectancy difference between the northern and western parts and around Devonport. It is very important that we continue to be able to invest in changing these kinds of things.
The Prime Minister has done exactly the right thing in seeking to make sure that he got the best possible deal out of the Europeans. We have to remember that if by some chance it was decided that we should become much more integrated in the European Union, we would have another referendum. I hope that will horrify all Conservative Members, because we have had enough of all this.
This is about making sure that we have a strong position in Europe and that we deliver on the economy for the west country, but also that we do not get involved in any more world wars, or wars of any sort.
Liz Kendall (Leicester West) (Lab)
Madam Deputy Speaker,
“by the strength of our common endeavour we achieve more than we achieve alone, so as to create for each of us the means to realise our true potential.”
Those words, written on Labour’s membership card, are why I joined my party. I believe they are as true for nation states as they are for the people I am now privileged to serve. I say that because the central argument made by those who want us to leave the EU is that Britain will achieve more, and have more power and control, if we vote for Brexit. I could not disagree more. In a world that is more connected than ever before, real control—the power to shape our destiny, tackle challenges, and seize opportunities rather than be left to the mercy of events—comes from working with our neighbours and allies to get the best for the British people.
President Obama says that the nations that wield influence most effectively do it through the collective action that today’s challenges demand. He is right. Being a member of the EU gives Britain more influence and power, not less: the power to sell our goods in a single market of 500 million people, according to rules that we help decide, and to reach better trade agreements as part of a bigger bloc of 28 countries; the power to tackle cross-border terrorism and crime, and to act together when the rule of international law is threatened on our doorstep, as we did with the sanctions regime we imposed following Russian aggression in Ukraine; and the power to address serious, long-term global challenges such as climate change, using our influence to secure a better deal within the EU and using the EU’s influence to get a better deal with the rest of the world. Cutting ourselves off from our neighbours and allies in Europe and attempting to go it alone would diminish Britain’s power, not increase it, and give us less control in shaping our future, not more.
While I care passionately about Britain’s influence and role in the world, in the end this referendum will come down to the central question of our economy and whether we will be better off in or out of the EU. Not a single serious or credible organisation thinks that we would be more prosperous out. The TUC and the CBI are united on this: jobs, investment and wages will be hit, and businesses and workers will suffer. The Institute for Fiscal Studies warns that our economy will shrink if we leave the EU. The costs would far outweigh the money that we would get back by no longer being a member, and we would require an additional £20 billion to £40 billion of borrowing or spending cuts on top of what is already planned.
I am campaigning for remain not just because of the risks of a Brexit vote but because of the opportunities for British businesses, workers and young people to build a better future if we remain in the EU. Membership has already benefited this country hugely, attracting crucial investment from companies such as Nissan, Siemens, Hitachi, Toyota and Jaguar Land Rover, which has brought decent jobs and training for young people in the areas that need them most.
Businesses in my constituency, such as the IT company Rock Hall and the energy efficiency company BillSaveUK, tell me that they have real potential to expand and grow their businesses in future, particularly as the single market in digital services is completed and new trade deals open up markets in areas such as clean energy. I desperately need such companies to expand and thrive so that more of my constituents can get decent jobs in the modern manufacturing industries of the future.
Many of the students I meet tell me that they are passionate about us remaining in the EU. Our great University of Leicester has benefited hugely from EU investment in its new Centre for Medicine, which is doing world-leading research on heart disease and training the doctors of the future. Being part of the EU enables my local students to live, learn and study in other countries. They are terrified that, if we leave the EU, their job prospects will be worse.
Like me, those students are astonished that people who back Brexit, such as Aaron Banks, say that even if there is an impact on our economy, it is a “price worth paying”. But who will end up paying the price? Not Mr Banks, the right hon. Member for Surrey Heath (Michael Gove) or the hon. Member for Uxbridge and South Ruislip (Boris Johnson). It will be those who always suffer in an economic downturn—the poor, the vulnerable and the low paid. Jobs will be lost and incomes will be hit, and families will be left struggling to cope with the consequences. Slower growth and lower tax receipts will reduce funding for the public services we all rely on, and for what? The mirage of greater self-control. That is why I am passionate about us voting to remain in the EU—so that we do not put our communities at risk and so that we can seize the opportunities of the future.
Helen Whately (Faversham and Mid Kent) (Con)
It is a pleasure to follow the hon. Member for Leicester West (Liz Kendall), who rightly made the positive case for staying in the European Union and, most importantly, asked who will pay the price if we leave.
I want my constituency and my country to be prosperous, peaceful and proud of being British. That is why I will vote to remain on 23 June. I could make the security case, or a case about the sort of country that I want us to be, but today’s debate is about the economic benefits of European Union membership, so I will focus on that. Being in the European Union brings investment and jobs to the UK. It is not perfect—no relationship is—but being in the EU is good for our economy, which is good for our country.
My right hon. Friend the Prime Minister recently joined me in my constituency on a visit to the UK’s oldest brewery, Shepherd Neame. It has been expanding successfully since the recession, thanks to our strong and stable economy in the European Union, but that is not something that it, or we, should take for granted. Like many businesses, Shepherd Neame is worried about the risk that we will leave the EU, and I am worried because it is the largest employer in my constituency. If it struggles, jobs will be lost.
There is no doubt—almost everybody agrees about this, including those who are campaigning for us to leave the EU—that there will be a recession if we vote to leave. That will result in the loss of thousands of jobs. I have heard some on the leave side of the argument suggest that the loss of those jobs perhaps does not matter, and that they see it as a sacrifice that might be worth making. But jobs really do matter; they mean livelihoods and the income needed to pay the mortgage, rent and bills and to buy children’s shoes. I could go on. It may sound obvious, but I really am shocked at how dismissive some of those arguing to leave are being.
I think about what the economic squeeze that we will experience—whether it lasts five years, 10 years or longer—will mean for today’s school leavers. A generation of school leavers was hit hard by the last recession, and we cannot have another lost generation as a result of a decision to leave the European Union.
Some Members have argued that a vote to leave could boost trade with non-European countries, but that is highly uncertain and, I would say, unlikely. Our largest export market outside the EU is the US. We exported £84 billion of goods to the US in 2014, but that is dwarfed by the more than £150 billion of goods and services that we exported to EU countries. Some Members have argued that if we leave, exports to India, Australia or Canada should increase, but the value of our exports to each of those countries is less than £10 billion per annum, and that would not change overnight.
Some time ago, before I became an MP, my day job was negotiating deals for AOL Time Warner, which at the time was the largest internet provider in the world. One thing I learned as a deal negotiator was that size matters for bargaining power. To those who say that the UK would somehow get better deals if we left the EU, I make the point that the EU is a much larger market and so has greater bargaining power in negotiations with other countries. I do not think we can be remotely confident, however great we are as a country or however good we are at negotiating, that we would be able to negotiate better trade deals with other countries than we can as part of the EU.
I am conscious of time, so I will move on quickly. The NHS is the reason why I became a Member of Parliament. Since my time doing the deals that I mentioned, I have worked mainly with hospitals and the NHS. I know just how difficult things are for the NHS at the moment. If we are to be able to afford the costs of care for our society as we live longer and demand more from the NHS, we need a strong economy. A vote to leave would damage not only our economy and prosperity but our international reputation. We are respected abroad for our values, our integrity and our collective conscience, and many countries seek to emulate our democratic system. Leaving the EU sends the wrong message. It suggests that when things get tricky, we walk away. That is not the sort of nation that I want us to be. We must be an optimistic country playing an influential role in the world, and that means being in the EU and leading from the front.
Alison McGovern (Wirral South) (Lab)
As part of Labour’s in campaign, I spoke to a woman on the phone last night. She was not sure how she was going to vote, and she did not know who to believe. She said that she just wanted the facts, so that is where I begin. We must be absolutely clear: globalisation is happening, and it is not going away. With democracy in eastern Europe and the opening up of China and India, capital, goods and people move freely across borders like never before, creating opportunities but also causing disruption. The globally connected economy means that problems in the American mortgage market can trigger a recession that spreads around the globe in hours.
That is the modern world. For us in Britain, each generation must answer this question: although we accept free trade because of the opportunities it offers, what rules are required to make the market fair? The global economy offers the UK huge potential. We have advanced service sectors, and our creative economy has boomed. Nowhere is that more obvious than in our capital, which is perhaps the most globalised city in the world, but go to Manchester or Liverpool and the story is the same.
We must be honest about globalisation. Although it creates opportunity for many, it causes others disruption and dislocation. Jobs are created, but jobs are also lost. Capital movement can grow the economy, but capital hiding—offshore and untaxed—hits our public services. How do we get maximum gains from this changing world, and how do we minimise the disadvantage? That is the real question to be answered by the EU referendum.
Amid all the misinformation in this debate, there is a deep dishonesty about the campaign to leave the European Union—or perhaps I should say the two campaigns, because there are two completely contradictory arguments up and running at the same time. On one hand, we are told that we must leave so that we can stop the disruptive effects of globalisation, close the borders, introduce protectionism and give British workers preferential treatment.
Oliver Colvile
Does the hon. Lady recognise that the Brexit campaign has also led people up to the top of the hill in relation to immigration and could be doing enormous damage to community relations?
Alison McGovern
I could not have put it better. Those who are feeling the sharp end of globalisation are presented with a particular suggestion about that as a solution, but as the hon. Gentleman says, it is nothing of the sort. It would sabotage the British economy, destroy even more jobs and reduce revenue for public services.
On the other hand, there is the other set of leavers—the people who think the problem with the EU is, as we heard earlier, that it shuts us off from globalisation. They say we should leave Europe and face the world, embrace non-EU immigration and let the market rip. Even if we ignore the difficulty of facing the world when we have no trade deals, that is not an attractive option. It would mean even more churn in the British economy, even more losers from globalisation and an even greater sense of dislocation.
Those are therefore two bad options and a false choice for Britain, but there is one even bigger deceit: the lie that we can have both those things at once. That is not true, because people are either up for free trade and taking part in the world, working with others to make markets work, or they want to shut Britain off from the world. By allowing that confusion, the leave campaign is misleading people. This dishonesty, which is put across as plain speaking, is about telling low-paid workers that there is an easy remedy for their woes when, in reality, the medicine will only make the patient sicker.
I agree with the Brexit lot on one thing: it is time for plain speaking. The truth is that the world economy has globalised, which brings big opportunities but also brings disruption and loss to many people. We will solve that not by running a siege economy or letting the market rip, but by staying in the single market and taking advantage of the opportunities that will come in the next few decades as we properly integrate services and energy into that market, which is where we stand to benefit. Given that the EU is the market for 47% of our exports, we should help eurozone countries make the economic reforms they need so that they can buy more of our goods, not just leave them to fail.
As we know, co-operation is key to how we maximise our success and central to minimising the negative effects of globalisation. It is only through co-operation in the EU that we will make sure there is no race to the bottom on working conditions. For a low-paid worker, Brexit will mean worse conditions and worse career progression. For a higher-paid worker, Brexit will mean fewer opportunities, less trade, worse pay progression and higher taxes. For a pensioner, Brexit will mean less money to invest in the pensions system. Even pro- Brexit economists acknowledge that there will be a short-term hit.
I have talked about the long term, but let me take a moment to consider the short term. Brexit will mean a recession, as if we needed another recession after the horrors of 2008. Unlike in 2008, however, we would not have a Government willing to work with others around the world to solve the crisis; we would have a recession under the most right-wing Government in living memory, and we would have a closed economy that would make all of us, but especially those with the least, poorer.
This is the question on the ballot paper next week. It is a choice between prosperity in the EU and austerity out of it; between influence in the EU and irrelevance out of it; and between facing up to the modern world economy and making it work for Britain, and pretending that we can solve our problems by quitting, which we will not. Let us vote remain.
Mark Pritchard (The Wrekin) (Con)
I believe it is in our national security interest to remain in the European Union and, indeed, that it is in the national security interests of the United States and of our allies in Europe. At a time when there are many conflicts around the world and when the world is very unstable, with an aggressive Russia and a belligerent North Korea, the very last thing we want is a fragmentation of the European Union, ambiguity in foreign policy or a weakening of the European Union and of the strength we draw from one another.
There has been a lot of debate about whether NATO or the European Union is the cornerstone of our national security, but I would argue that both have become such a cornerstone. I do not resile from the fact that NATO is a major cornerstone of our national security. However, I ask Brexiteers this: if the UK were to leave the European Union, is it more likely that France and Germany would fast-track EU defence structures? My answer is yes. If that is the case, is it likely to undermine NATO? Again, my answer is yes. In my view, in the medium term we would see EU defence structures compete with NATO rather than complement it. That makes me very concerned indeed.
We also hear, on counter-terrorism, that our so-called open borders endanger our cities and towns and those who live in this country. But the majority of counter-terrorism challenges in this country are home grown. The majority of those involved in the awful and egregious attacks in Brussels and Paris were EU citizens. It is completely misleading to suggest that remaining in the European Union increases our likelihood of suffering a terrorist attack. We could be attacked at any time. I pay tribute to our intelligence services, our armed forces and police.
Along with my hon. Friend the Member for Bury North (Mr Nuttall), I co-wrote a motion on having a European referendum that went against the Conservative Prime Minister and Government. We are where we are, and I make no apology for having played a key part in that, because it is right that, after 41 years, the British people are re-enfranchised on the European question. Nevertheless, I served on the NATO Parliamentary Assembly for five years and on the Joint Committee on the National Security Strategy for four years and, after serious reflection, I have come to the view that, on balance, for national security reasons we should remain in the European Union.
We have rightly heard a lot about the economic impacts of withdrawal from the European Union. I have absolutely no doubt that there would be a massive shock for our economy. If there was a £30 billion or £40 billion hit, yes, there would be further public sector cuts and tax rises. That would be bad for Britain, which today is leading the economies of Europe and indeed has the fastest growing economy in the G7. But without national security, we cannot have economic security, and without economic security we cannot have national security, because we will not have the funds to pay for our defence and our intelligence agencies. My hon. Friend the Member for Tonbridge and Malling (Tom Tugendhat) quite rightly called for an expansion of the Foreign Office—both the Secret Intelligence Service and the mainstream Foreign Office.
My hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile) put his finger right on it: do we want to put up the white flag and surrender all that we have worked for in Europe to France and Germany? They are close allies, but occasionally on foreign policy they can be eccentric, to put it politely. Diplomacy is a key part of national security. Are we going to surrender the diplomacy of the European Union to some of the more eccentric play of France and Germany? Would we have the robust and tough sanctions on Russia over Ukraine if it had not been for the Prime Minister’s and Foreign Secretary’s robust representations in Brussels and around the capitals of Europe to make sure that Russia paid for its aggression? If Russia were not paying for that aggression through sanctions, would there be aggression in the Baltic states?
I am not a Europhile. I am not passionate about Europe. I love the United Kingdom. That is why I believe that, on balance, the best prospect for a safer, more secure and more prosperous United Kingdom is to remain in the European Union.
Mr Mark Hendrick (Preston) (Lab/Co-op)
The forthcoming referendum on the UK’s membership of the European Union will say a great deal about how we, the British people, see ourselves as a nation. Are we a nation at peace with ourselves, internationalist in outlook, confident of our place in the world and comfortable in the belief that by working closely with others we can govern our peoples to the benefit of everyone? Or are we fearful of the outside world, feeling that the European Union is doing Europe to us rather than us being a part of Europe, and fearing the threat of immigration, because the concept of free movement of European citizens has been conflated with free movement of refugees, economic migrants and legal or illegal migrants from outside the European Union?
We face a whole host of problems: illegal migration, people trafficking, drug smuggling, terrorism, environmental pollution to our rivers and seas, and so on, and none of those things respect national boundaries. Working together in the most successful multinational organisation that the world has ever seen, with its own single market, is a solution to our problems, not a problem in itself. Yes, we have our differences with our European neighbours, but they are settled on conference tables in places such as Brussels, Strasbourg, London, Berlin and Paris; not by bloody wars on European soil as they were for hundreds of years—indeed, in the last century, those problems escalated into two world wars and resulted in the deaths of millions of people.
The real response is for Britain to admit that those problems are also our problems. We cannot shut ourselves off politically and economically from the rest of Europe, and we must recognise the geographical and political fact that we are part of a union of nations that share common interests, values and goals, and that our neighbours’ problems will soon become our own unless we work with them to help solve them. If we did not already have the European Union, we would have had to create something similar to deal with those problems, and many others.
History, solidarity, and common sense are good reasons for staying in the EU, but let me be a little more hard-headed and talk in terms of costs and benefits—I have said little about the benefits of the EU and many of the things that we take for granted. The anti-Europeans and xenophobes who say that Europe is a threat totally disregard decades of successful membership that have contributed to making Britain the world’s fifth largest economy. Yes, we could “survive” and “manage” outside the European Union, but at what price? The benefit of being a member of the largest single market in the world has a cost, which is why we pay contributions for membership as we would when joining any club. We do so because we accept that the benefits outweigh the costs.
Let us consider what the UK’s largest business organisation, the CBI, has said, as well as the UK’s largest workers’ organisation, the TUC. We have access to a $16.6 trillion a year single market of 500 million people, which is a key benefit. The single market goes beyond a standard free trade agreement. The EU has eliminated tariff barriers and customs procedures within its borders, and it has taken strides towards removing non-tariff barriers, such as goods regulations, across the board. The UK’s contribution is a small net cost, relative to the benefits, of around €7.3 billion, or 0.4% of GDP. It is clear that the UK’s largest business organisation is in favour of our remaining in the EU.
The TUC general secretary, Frances O’Grady, says:
“Working people have a huge stake in the referendum because workers’ rights are on the line. It’s the EU that guarantees workers their rights to paid holidays, parental leave, equal treatment for part-timers, and much more…These rights can’t be taken for granted…And without the back-up of EU laws, unscrupulous employers will have free rein to cut many of their workers’ hard-won benefits and protections.”
Without remaining in the EU those protections could well disappear. Vote remain.
Simon Hoare (North Dorset) (Con)
It is a pleasure to follow the hon. Member for Preston (Mr Hendrick), and I agreed with most of what he said.
When we started this process, if I had been split down the middle I was 49% for leave, and 51% for remain. Today, I am 127% in favour of remain—don’t worry, I haven’t got my figures from the leave campaign. Two reasons have got me to that position. The first is just looking at some of the facts. I am a south-west Member of Parliament. In the first quarter of this year, we exported goods worth £9.7 billion from the south-west to the EU. Some 64% of all exports from the south-west go to the EU. In my constituency, 5,249 jobs are reckoned to be dependent on trade with and membership of the EU—one of the highest, if not the highest, in the county. On a conservative estimate, 45,000 jobs will be at risk in my region were we to leave.
The average take-home pay in North Dorset, leafy and beautiful as it is, is £16,500. It would be a dereliction of my duty to vote in any way other than to protect and to preserve that. I am not one of those ideologues who wishes to sacrifice, on some altar of so-called sovereignty, the livelihoods of my constituents. Sovereignty as an abstract does not pay the mortgage, does not pay the rent, does not pay the bills and does not put food on the table. I would not be able to look my constituents in the eye and say, “But don’t worry, we’re free and all the rest of it, so we can starve in our own independence.” What a marvellous, marvellous legacy to leave!
Mrs Sheryll Murray
I relied on fisheries to pay my mortgage and put food on my table for my children. Will my hon. Friend look me in the eye and say he is happy to sacrifice an industry for the EU ideal?
Simon Hoare
In the first instance I would not say that our fishing sector has been sacrificed, but I have to think about agriculture. We are all absolutely right to look at this issue from the perspective of our constituents. Agriculture, in particular the dairy sector in North Dorset, would not be able to survive without the continued, guaranteed, politically colour-blind support the EU provides to British agriculture.
There are two specific things I would like to say. The first relates to the absolute lack of clarity and united vision from the leave campaign: Albania, Norway, the World Trade Organisation, something like the North American Free Trade Agreement, we can stand alone, imperial preference, let’s bring back the corn laws—whatever it might happen to be! Somehow or other we have an arrogance, which I think was probably the death of a lot of our industries some years ago, that we have a right to sell to the rest of the world, in particular Europe, on terms to our satisfaction, and that they should feel jolly grateful that they are allowed to buy our product. The global marketplace does not work like that anymore. We have to earn our living.
Chris Stephens (Glasgow South West) (SNP)
Is this not the big contradiction of the leave offer from some? They claim that we can be in the European Free Trade Association, but that would mean signing up to every single EU rule and regulation, which we would not be able to change. The only way to change EU rules and regulations is to be a member of the European Union.
Simon Hoare
The hon. Gentleman is absolutely right. It is either the longest suicide note in history or the worst-written business plan I have ever come across. Imagine going to the bank manager and saying, “I’ve got a fantastic wheeze. I’m going to put at risk 42% of my almost-guaranteed sales and leap in the dark to see if I can grow a few other markets.” We can actually do both, but it seems to me to be an act of the highest folly to endanger tariff-free access to the world’s largest free trading area. That would be a dereliction of our duty.
For those who slather and get frightfully excited when their erogenous zones of sovereignty are being tickled—not, in the cases of some, the most attractive prospect I can think of—let us recall and put it on the record that they keep saying that this sovereign House of Parliament must take the decisions. That is absolutely right. We are accountable to our constituents and if, after five years, they do not like what we have done they can jolly well kick us out. If we had a vote of this sovereign Parliament this afternoon, 74% of us would vote to remain—across party, across regions and across country. It is a telling sign of the clear merits and benefits of UK plc doing that traditionally British thing of fighting for our interests, championing our businesses, speaking up for our people and making sure we get the best deal possible.
I want to mention the other 60-odd per cent. of the reason I am voting to remain. I had prayed that we would not have a rerun of the debate in Russia in 1870s and 1880s and in Germany in the late ’20s and ’30s. Our infrastructure is under pressure. Well, we can solve that—it is a sovereign job of this place and our local councils—but, no, we will blame the Jew, the Ugandan—anybody but ourselves; we will blame them for taking our jobs, our houses, our places on the hospital waiting list, forgetting that in constituencies such as mine, 65% of people are retired and that we have a falling birth rate. We need these young people coming in to work in our services. Regrettably, we are hearing that bitter, twisted, mealy-mouthed, acid-riven debate about immigration. I do not want any part of it. There is a strong, positive narrative, about how we need that new blood and talent coming to our shores. When we go to Spain and set up a business, we call ourselves expats; when they come here, we see them as a drain. Not in my name or the name of this party! We will be voting to remain.
Paul Farrelly (Newcastle-under-Lyme) (Lab)
Madam Deputy Speaker, you, like many of us, might have seen a front-page splash in The Times last week trumpeting the support for Brexit from Lord Anthony Bamford of JCB, the iconic digger maker based in my county of Staffordshire. I was intrigued by the story, mainly because it smacked a little of desperation. It was, as it is called in the trade, old news, because anyone reading The Sentinel newspaper in Staffordshire would have known that when the good lord came out all of a year ago.
Anthony Bamford is part of just a small smattering of industrialists on the Brexit side that includes a maverick knight of the realm, Sir James Dyson, who makes those costly, complicated hoovers—in Malaysia. In reality, their views are not reflective of the large majority of British businesses, investors or economists. Our membership of the EU has been vital to our attracting much needed investment here. Nissan, Toyota and Honda from Japan made that clear very early on, when they urged the UK to remain, and the likes of BMW, Volkswagen, Bosch and Siemens from Germany have since joined them.
Helen Goodman (Bishop Auckland) (Lab)
Did my hon. Friend see the story in the Financial Times today pointing out that both Sir James Dyson and Anthony Bamford had been caught breaking competition laws by the European Commission, and suggesting that that was their motivation?
Paul Farrelly
I cannot speak for their personal motivation, but I am sure that they are speaking for themselves personally rather than for their own businesses.
German companies here employ 500,000 people. Along with the Japanese, they have made the UK car industry today the most successful in our country’s history—along with Tata of India, of course, with its investment in Jaguar Land Rover. Tata, too, cannot fathom why Britain would want to leave the world’s biggest single market. In this debate, their voices deserve to be heard and listened to, not silenced through intimidation, as was the intention at the beginning of the leave campaign. Then, of course, there are the voices of great British companies—household names such as Rolls-Royce, one of our biggest exporters. My grandad built Spitfire engines at Crewe for Rolls-Royce, and today the company, patriotically, urged its staff to vote remain.
It is not just multinationals that are emphatically in favour of our remaining in the EU. This spring, like other colleagues on the Opposition Benches, I carried out a survey of about 1,000 predominantly small businesses in my constituency, and we had a good response. Some 80% were in favour of remaining. Some wanted reforms, but they firmly believed that we should stay in, to reform from within. The response to our survey reflected the balance within the wider membership of Staffordshire’s chamber of commerce and the views of the British Ceramic Confederation—the industry from which my area of the potteries takes its name. This—particularly for us—vital export-led industry wants us firmly to stay in because it is in its and the country’s interests. It recognises that it is better to have one rule book, rather than 28 different ones for each country in the EU.
Let me take a local example of the new economy. One of our most passionate supporters of the remain campaign is bet365, which is now the world’s biggest online gaming company and the owner of Stoke City football club, which I must of course mention. In little more than 15 years, the Coates family has built that business up into the biggest private sector employer in North Staffordshire, with more than 3,500 highly skilled staff. It is one of the UK’s biggest business success stories of the last decade. Frankly, bet365 can only dream of one rule book, because at the moment it has to contend with not only 28 but far more rules, with each of the German Länder and other different European regions having their own individual regulations. Bet365 is precisely the sort of business that will benefit by staying in and extending the single market to services and e-commerce, which were key topics in the Prime Minister’s renegotiations.
Mr Jim Cunningham
Earlier on, my hon. Friend probably heard me mention the reasons why two Prime Ministers of two different parties wanted to enter Europe, but a third who was not exactly friendly to Europe should be borne in mind—Margaret Thatcher. Why did she sign up to the single market if alternatives were available? This is what led to the free movement of labour, the proposal for a central bank and, more importantly, the euro. This shows that some of these Brexit people were the very ones who signed up to support the EU.
Paul Farrelly
My hon. Friend is absolutely right. Margaret Thatcher knew exactly which side the country’s bread was buttered on, as did John Major, whose Government were held to ransom by many of the people who are campaigning for Brexit this time, and who will no doubt make the life of the right hon. Member for Witney (Mr Cameron) a misery after this referendum, when we will hopefully vote to stay in. The businesses that I have mentioned, locally and nationally, will not benefit—and neither will the wider British economy —by us stomping out truculently and bad-temperedly next Thursday.
If I had more time, I would talk in greater detail about the benefits of EU membership to the NHS and higher education. I have a whole campus, Keele University, in Newcastle-under-Lyme which, together with our NHS, now has one of the country’s leading medical schools. Its position is shortly to be boosted by a £20 million new research facility for drugs and medical treatments, £13 million of which will come from the EU. In all, the university, the NHS and therefore our local economy are due to gain £30 million-worth of EU funding for research and education over the next few years. It is right to point out the risk of losing it if we vote to leave. The EU has been pivotal in securing other rights that are too often taken for granted—equal rights for agency workers, minimum paid holidays, maternity pay and indeed equality of pay across the board.
To conclude, I firmly believe that having this referendum was a reckless and unnecessary gamble with our country’s future. It was a tactical exercise in party management, which has seen the governing Conservative party fall apart over the issue. The right hon. Member for Witney, through two general elections and two referendums so far, has in many respects been the luckiest of Prime Ministers. I hope that his luck holds next Thursday. The decision we face next week is about much more than jobs, investment and prosperity. It is about learning the correct lessons from history. The past has shown that Britain has an important role at the heart of Europe. That engagement and co-operation make our continent more progressive, more outward-looking and more stable. Next Thursday, the right lesson to learn from history is to vote remain.
James Cartlidge (South Suffolk) (Con)
It is a great privilege to be called to speak in this historic debate. I will vote remain for one fundamental reason. I am a father of four small children, and the last thing I want is for them to grow up in a country with less opportunity than I have had the great privilege to enjoy. What an opportunity it is. If we vote to leave, this country will not go to the dogs; it will rather be a case of an opportunity cost and an opportunity missed. Alone in the world, we are the only major nation on earth that enjoys unfettered access to the European single market in a currency over which there is no existential doubt.
I was passionately opposed to membership of the exchange rate mechanism and the European Union, but I believe that to be a major nation in the EU but outside the straitjacket of the eurozone is to be in an incredible position; and that position has been strengthened greatly by the Prime Minister’s renegotiation. Some say that it was not a fundamental renegotiation, but the securing of the one key point that the EU cannot discriminate against countries that do not use the euro means that our platform of prosperity is now secure. I believe that, by voting to remain, we can build on that in four vital strategic economic areas.
First and foremost, we will restore our reputation as a safe haven and a sound and stable country in which to invest. This referendum, like the referendum in Scotland, puts that at risk by threatening huge uncertainty. If we vote to remain, while those two constitutional issues will not go away, to the people who matter—
Stephen Gethins
The hon. Gentleman has mentioned the independence referendum in Scotland. At least he will concede that the Scottish Government provided a 650-page White Paper saying what they would do in the event of an independent Scotland. I have seen squat from the vote leave campaign.
James Cartlidge
I do not need to add very much to that, but the point that I am making is in no way intended to incite the Scottish National party. I am simply saying that I believe we will restore our international reputation as a sound and stable nation by putting those two constitutional issues not to bed but to the margins, in the eyes of the investors and the people who matter most.
My second point concerns the terms of trade. Last year I was standing on the platform at Marks Tey station, on the main line into Liverpool Street, with a member of my Conservative association. A goods train passed, travelling from the Felixstowe direction towards London, and therefore its load was obviously from China. There was a container on every single wagon. A few minutes later, a chap looked at me with dismay when another goods train went in the opposite direction, with not a single container on it. I reassured him by saying, “Don’t worry: that’s what we mean by ‘invisible exports.’” [Laughter.] But actually, that is the key point. Because a few minutes later, on the same platform, herds of commuters—including many from my constituency —boarded the train to Liverpool Street, not to go and make widgets to be sent back to China, but to sell the insurance, to negotiate professional services, to do the finance.
That is where our comparative advantage lies. Trade is about comparative advantage—doing what you do best. If we leave, there is no way in which we can have a say in the attempt to complete the single market in services. I believe that if we stay, we will achieve that, and you cannot put a value on what that will add to our economy, given our expertise in the service sector.
My third point is about inward investment. I find it absolutely astonishing that we keep hearing from Brexit campaigners about the deficit in European trade compared with trade with the rest of the world. Only one group of companies is doing all that trade, and most of those—the ones that are making the biggest dent in exports—are foreign companies: Japanese car makers, American banks, and French pharmaceutical firms such as Sanofi, based in Haverhill, which I visited recently. Its biggest export market is, by far, the United States of America, but it is based here in the United Kingdom because we have access to the single market. To pretend that European trade and global trade are somehow separate is complete nonsense.
I believe that if we vote to remain, we will drive inward investment far higher, and therefore drive our exports. Instead of worrying about trade figures as some negotiating stance, let us look at them as we should, and conclude that we need to do better—and one way of doing that is to vote to remain, to show that this country is open again for business from around the world.
My fourth point relates to what is said about the future of the eurozone. Those who want to leave the European Union say, “The glass is half empty: we should leave because the eurozone will collapse,” and so on. Our flexible position means that if the eurozone gets into trouble, that will simply reinforce our unique status in that we alone, as a big country, have unfettered access and are not in the euro. If the eurozone strengthens, that will massively boost our exports and help with our trade deficit. We cannot lose, provided we play our cards right.
I would make one final, fundamental point. There are those who say that in this referendum on neither basis are we voting for the status quo, and they are right. If we vote to remain it will not be the status quo, because we will have made up our mind: after all these years of being held back by this interminable debate about whether to be in or out, if we decide as a country to remain, we are deciding to get stuck in in Europe, representing this country. I believe we will then have to stand tall, proud and prosperous in this great continent on behalf of this great country, and the only way to do that is to do the patriotic thing and vote to remain in the EU.
Mr Steve Reed (Croydon North) (Lab)
This afternoon I want to focus on why it is important for Croydon North that Britain remains a member of the European Union. Croydon North is part of an outer London borough, but it has many of the features of an inner-city area: an extremely diverse population, high levels of youth unemployment—particularly, sadly, in the black community—and too much poor quality housing, particularly in the private rented sector, but it also has a very enterprising and ambitious population.
Croydon is at a crossroads. The Labour council elected two years ago has announced a massive £5 billion regeneration project for the town centre that will affect the whole borough. It will reshape the retail centre around a new Westfield-Hammerson’s shopping mall, including thousands of new homes, thousands of new jobs, new education and leisure facilities, and a growing new tech hub. Being a 15-minute train journey from Gatwick in one direction and central London in the other, Croydon is ideally placed to take advantage of being part of the world’s biggest trading bloc.
The future looks bright for Croydon, but a big question-mark hangs over it all, and that is the threat of Brexit in next week’s referendum. The investors Croydon hopes to attract will think again if Croydon is outside the European Union. They do not want trade barriers blocking their access to Europe and they will think twice about investing in an economy that is going backwards into recession.
If we tried to stay in the single market without EU membership, we would be subject to EU rules and freedom of movement, like Norway and Switzerland are, but without the veto we currently have: the same circumstances, but no voice.
Lyn Brown (West Ham) (Lab)
That is the one argument that people on my street just are not aware of. They think we can have a trade agreement with the EU and still lower the immigration from EU countries. It simply is not true, because we would have to sign up to the same freedom of movement. We need to get that message out.
Mr Reed
That is absolutely true. I am sure my hon. Friend is doing as much as she can in her constituency, and I am going to be doing as much as I can in mine.
We would become weaker, not more powerful, if we left the EU. We would lose control over our destiny, not gain it. The Governor of the Bank of England has warned that a vote to leave the EU could trigger a recession, and nine out of 10 economists agree with him that Brexit would damage the economy. A vote to leave next Thursday would be the first time a country had voluntarily chosen to throw its economy into recession, and that would mean more job losses, lower tax revenues, a growing deficit, more cuts in public services like health and education, rising interest rates to prop up the pound and, because of that, higher mortgages. And it is not the wealthy élite that will suffer; it is ordinary people in places like Croydon North.
Immigration has helped London’s economy to grow, and it has benefited Croydon immensely. Where there are pressures because of immigration, like housing or the NHS, those are not the fault of immigrants, who put in more than they take out; they are the fault of a Tory Government who are underfunding our health service and selling off social housing. We cannot allow immigrants to be scapegoated for the failures of this Conservative Government.
Too many people in Croydon work long hours for low pay in insecure jobs. Their lives would become harder still without the employment protection that comes from our membership of the EU. Pro-Brexit Tories have already made it clear that they cannot wait to leave the EU so that they can cut workers’ rights in half. That is exactly what one of them has said they want to do. They want to remove rights for part-time workers and parents, increase working hours, and reduce paid leave. It was the European social chapter that triggered the Tory revolt on Europe, not because they want to protect British workers, but because they want to exploit British workers.
Chris Stephens
Is the hon. Gentleman aware of the independent legal opinion of Michael Ford, QC, who has said that in the event of a Tory Brexit, the damage would go much further and affect collective consultation, collective bargaining and the rights of part-time workers? He also believes that TUPE rights, which apply to outsourcing, would go.
Mr Reed
I was not aware of that particular opinion, but I am keen to learn more about it. It does not surprise me, however, because that is what many commentators are saying about the implications of a Tory Brexit for workers’ rights, jobs and the prosperity of ordinary people in this country.
For that reason, and all the others that we have heard this afternoon, I am confident that voters in Croydon North will vote next week to remain part of the European Union. The EU is an organisation that needs reform to make it more accountable, but we need to hear the concerns being expressed by people of good will and use them to make the EU work better. We cannot cut ourselves adrift and leave ourselves subject to an EU that we can no longer influence because we are isolated on the outside. Croydon is better off in Europe, and Britain is better off in Europe. I will be voting to remain next Thursday.
Mrs Flick Drummond (Portsmouth South) (Con)
Like many others in the House, I am a firm supporter of our membership of the European Union, and I was campaigning on this issue even before the general election. I support our membership not simply out of fear about what would happen if we left, even though there remain serious questions that the leave camp need to answer; my support stems from the positive contribution we can make to the organisation and the benefits we get from being a member.
We are the fifth largest economy in the world, as the leavers continue to remind us, and the second biggest in Europe. Long-term forecasts from the OECD suggest that our economy will overtake Germany’s in the early 2030s, but that will happen only if we carry on along the same trajectory that we are now on. It would certainly not happen if we were to leave the EU. Why, when we enjoy such a prominent position in the world, and when we have the potential to champion the ideals that have made our country great, would we want to walk away from providing leadership, just at a time when Europe is crying out for it? People wishing to leave the EU say that our values need to be defended, and I agree, but I say that our values are also worth exporting. And exports —and, indeed, the economy—are among the most important reasons we should remain.
As a single market, the EU remains our biggest trading partner. A company can set itself up in the UK from anywhere in the world and instantly have access to 500 million consumers. The virtue of our membership attracts some of the best talent from around the world and encourages new businesses to set up here, investing in the UK and creating jobs. The UK market for goods and services is the second-least regulated in the OECD, second only to that of the Netherlands. Surely that is proof that the EU is not making us less competitive for investment.
We attract world-leading companies because of our access to the single market, but the EU is also a vast scientific and academic network that our own universities and companies can draw on. Portsmouth is home to several international companies that depend on free access to European markets. It is also home to one of the most rapidly developing universities in Europe, and I believe that, in Portsmouth, our interests are best served by remaining in the European Union.
The United Kingdom is the gateway to the EU for other countries, including all the major and developing economies of the world, but particularly for the Commonwealth. Narendra Modi, the Prime Minister of India, has said:
“As far as India is concerned, if there is an entry point for us to the European Union that is the UK, that is Great Britain.”
Our membership of the EU is one of the factors that binds the Commonwealth together. We did not abandon the Commonwealth or leave it behind when we joined the European Economic Community; we provided the simplest and most straightforward route for our Commonwealth partners to get most benefit from it.
Our links with some of the most powerful emerging economies are enriched by our membership of the EU, not jeopardised by it. There are many other benefits that our membership brings to the UK and to the rest of Europe, but the overarching theme is one of stability. The equal partnerships between us and our neighbours have supported a period of peace and stability that is unprecedented in our history. We have had 70 years of peace following 1,000 years of war. That has to be worth fighting for. I hope we will vote to remain on the 23rd, not out of fear but out of confidence in our ability to shape the future of the continent, where Britain already plays a leading role.
Tommy Sheppard (Edinburgh East) (SNP)
This debate has consumed us in this Chamber for the best part of the year, at times compromising our ability to scrutinise and properly review other matters of public policy. It has also been raging for months in the communities outside, yet the most dispiriting thing about this process for me is that I find so many people who say now that they are less well-informed than they were at the beginning of the discussion. The reason for that is all to do with the manner in which the debate has been conducted. Not only has it been incessantly negative, but it has traded in glib soundbites and tried to pander to prejudice, rather than illuminate, educate and inform people so that they can make a proper decision.
I therefore hope in the limited time available to explode some of the worst myths and misrepresentations that have been put about, the first of which relates to sovereignty. Next Thursday, we will be part of the European Union and the people of this country will vote on whether to continue that relationship. In that moment, sovereignty will lie with the people of the United Kingdom. Nothing they can do next Thursday will change that situation, so no matter what the result is, in one, two or five years’ time or never the people of the UK can choose to review the decision they make next Thursday. Nothing is forever, and government must always be with the consent of the people. Therefore, when those in the leave campaign say that the choice next Thursday is between retaining sovereignty here and giving it away, that is not a half truth or a misrepresentation—it is a lie.
The next point is to do with the money. We have talked about how much we contribute and how much we get back. It is a fact, and we need to tell people, that we are net contributors to the European Union, but we need to explain why that is and where that money goes. The bulk of that money goes to support social and economic development programmes in European member states that are less prosperous than we are. That is not a result of charitable donations by philanthropists in the Cabinet; it is a strategy to try to develop the economy across the continent so that in years to come the people who live in southern and eastern Europe will have the economy, the support and the money to be able to buy the goods and services we offer in this country. It is about a continental approach to economic development.
Mr David Anderson (Blaydon) (Lab)
Is it not also much better to invest in these countries so that we can trade with them and build democratic structures than to send young men and women out there to die on battlefields, as we have done on this continent for centuries?
Tommy Sheppard
I could not agree more. I also want to tackle the question of democracy, because the leave campaigners have suggested that this is about an unelected, unaccountable European bureaucracy versus—I guess—the exemplar of democratic participation that we apparently have in this country. That also is untrue. There are three institutions in the European Union: the Parliament, which is directly elected by the people; the Council of Ministers, which is composed of elected Ministers from the national Governments; and a third institution made up of appointed Commissioners—but they are appointed by elected national Governments. So when people say that the European Union is undemocratic, that is also not a mistruth—it is a lie.
I now wish to speak to some colleagues on the left who have joined the leave campaign, some of whom are in my party. I regret what they have done because they have given the veneer of political breadth to a campaign that is fundamentally reactionary in its nature, and I hope they will reconsider. When we come across glib phrases such as “a bosses’ Europe” or “a bosses’ club”, we should take a moment to try to understand what is happening. Anyone who has a materialist view of philosophy knows that we make our own history. Therefore, the institutions that govern us are not divine, and are not inherently one thing or another; they are created by us. It is a fact that every European Union treaty there has been has been a reflection of the political balance of power in the continent at that time. In the 1980s we made great advances in workers’ rights because the social democratic parties and the left parties were in the ascendency, much to the chagrin of Margaret Thatcher at the time. In recent years, that has not been the case and some treaties have been more pro-corporate, but that is because, my friends, the left is not in the ascendency in Europe. What those who believe in a progressive Europe need to do is link up, as the shadow Chancellor said, with other forces across the continent and explain that a different form of Europe is possible. I believe we can do that.
Finally, let me talk about this issue of migration and public services. I have been an MP for over a year. In that time, I have tried to help more than 1,200 people. Invariably, most of them have problems with public services: they want to move up the housing ladder, they want their benefits reinstated, and they are worried about the NHS waiting lists. I can count on the fingers of one hand the number of people among that 1,200 who are citizens of other European countries. Most of them are young, working couples who are trying hard to build up their families and to build a better future for themselves—by the way, in doing so, they are making Edinburgh one of the most vibrant capitals in Europe.
Peter Grant (Glenrothes) (SNP)
I am grateful to my hon. Friend for giving way during such an impassioned and informative speech. Does he agree that it is deeply regrettable that, for far too much of the debate on immigration, too many people on both sides of the House have concentrated on the supposed negative side of immigration rather than following the example of the Scottish Government and talking much more forcefully about the massive benefits that immigration can bring to all our communities?
Tommy Sheppard
Absolutely. In my experience, the people in Edinburgh East who are migrants from other EU countries, many of whom are here temporarily and do not intend to settle here, put less of a strain per capita on our public services than the population on average. A way to tackle that is to have a system of funding our public services based on population, so that if migrants go to a particular area, more money is put into the public services in that area. That is probably the fairest way to do it.
I greatly resent the way that some people have tried to turn this into a referendum on immigration. That is what it has become in some places, and I find that not only distasteful but disreputable. What I say to those people who may be seduced by those arguments is that when they see ruthless right-wing employers, who would if they could pay their workers nothing, complain about low pay, do not believe them. When they see right-wing politicians waxing lyrical about an NHS that they have made their career trying to underfund and destroy, do not believe them. Do not be seduced by this right-wing reactionary rhetoric, and vote to remain next Thursday.
Jeremy Lefroy (Stafford) (Con)
It is a great honour to speak in this debate after so many powerful and lucid speeches. I am unashamedly speaking in favour of remain, but next week my constituents each have one vote—the same number I do. My job here is to try to represent what I see as their best interests. They may not see it like that, but it is what I see as being in the best interests both of my constituency and the country.
I will follow on from what my hon. Friends the Members for Faversham and Mid Kent (Helen Whately), for Portsmouth South (Mrs Drummond) and for North Devon (Peter Heaton-Jones) have said about the importance of stability, prosperity and co-operation, and about the United Kingdom’s place in the world and its position as a force for good.
Let me start with stability and prosperity. It is quite clear—this is acknowledged even by those who speak for leaving—that there will be at least a short-term impact on the United Kingdom economy if we leave the EU. My hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson) has said as much. He talks about the Nike swoosh, or the dip, that would happen. We are talking about not a graphic but a direct impact on people’s pockets and on Treasury revenues.
As for what happens in the medium term, there is more debate. A vast majority of economists have said that being part of the European Union would be better for our economy in the medium and long term, but I accept that there are a wide range of views on that. How much that would cost—how much we would gain, or not gain—is more difficult to say. One thing is absolutely clear: those who claim that we will thrive outside the European Union in a way that we do not inside are profoundly mistaken.
Economically, there are two areas in which we suffer the most. The first is our failure to export enough, which we have spoken about time and again, and the second is our productivity. Neither has anything to do with our membership of the European Union, and both have everything to do with ourselves. Germany and France have considerably higher productivity levels than us, as does the United States. Germany is quite capable of exporting three or four times as much to China as we can, from within the European Union. I fully agree that there are aspects of regulation and so on where we might do better if we controlled them entirely ourselves, but those are minor points—mere pinpricks—compared with the responsibility on our shoulders to improve our productivity and exports. We can do that whether we are inside or outside the European Union. Coming out of the EU is no panacea.
It is clear that where we will suffer if we leave is in inward investment. I have spoken to inward investors in my constituency on whom thousands of jobs depend, and they say they want us in and that it is very important. As the Foreign Secretary said earlier, with our current account deficit as it is, a reduction in foreign investment would be dangerous. I have not had investors coming to me and saying, “I’ve been waiting for you to leave the European Union so that I can invest in Stafford.” That has never happened.
On co-operation and Britain’s place in the world, I am unashamed about the need to work together. There are many challenges in this world, and putting ourselves on the outside is not the way forward. We must not underestimate the importance of good relations with our neighbours, even if they come through difficult meetings in the European Union week in, week out and month in, month out. The other bodies of which we are a member, such as the United Nations, are no substitute. They meet infrequently and are much bigger bodies.
Who wants us out? Do our best friends? Do the United States, Australia, New Zealand and Canada—those with whom we have the strongest personal and political ties? Absolutely not.
Mr MacNeil
The hon. Gentleman is making a very good speech, which plays into the idea of getting some sort of independence from the European Union. It strikes me that there is a misunderstanding among some people in the debate about the referendum. The EU is not a country, it is an intergovernmental organisation. That fundamental point has been misunderstood by people who imagine that they are leaving some country. They are not. They are leaving an almost global body, and that is the mistake that many of the exiters make.
Jeremy Lefroy
The hon. Gentleman is right. The EU is a body of proud sovereign countries that take their independence extremely seriously. The east European countries did not throw off the Soviet yoke to get a yoke from Brussels.
When it comes to stability, prosperity, co-operation with others and the United Kingdom’s place in the world, I firmly believe that we are better in, so I shall be voting to remain.
Wes Streeting (Ilford North) (Lab)
It is a pleasure to follow the hon. Member for Stafford (Jeremy Lefroy) and to return to the topic of my maiden speech barely a year ago, as this country prepares to take what will undoubtedly be the biggest decision of our lifetime, which will determine the direction and destiny of our nation not just in the coming days, weeks, months and years but over the course of this century.
Global power is shifting from the western economies that dominated the 20th century to the emerging giants of the 21st century. Powers are pivoting away from nation states toward global corporations, and in that context the only question that should be on people’s minds as they cast their vote next week is which route and which choice will deliver prosperity, security and opportunity in a rapidly changing and globalised world.
Globalisation is an unstoppable process. It brings many possibilities and many opportunities for our constituents and for our country, and it also brings challenges. The question for any Government, whether our Government or Governments around the world, is how to shape globalisation to serve the best interests of their people, how to mitigate its challenges and how to make the most of the possibilities. How on earth can the right answer to those questions be to say, “Stop the world—I want to get off”? Has it not been striking in the course of this debate on the economy that there has been no debate about which is the best route to achieve what I have described?
Trying to get consensus among economists is like trying to get consensus among Labour MPs or Conservative MPs about the direction of their respective parties—virtually impossible—yet it has been achieved. The overwhelming consensus of our nation’s leading economists is that our country would be more prosperous inside the European Union than outside it. The Trades Union Congress and trade union leaders argue that being in the EU is in the best interests of working people and workers’ rights. Businesses small and large say that they can make the most of the opportunities available to them if we are a member of the European Union.
Well evidenced claims have been made about the impact of leaving the EU on jobs, investment and opportunities for our workforce, but what has been the response of the leave campaign? It can be summed up in the two words uttered by Nigel Farage last weekend when he was asked about the impact of a fall in sterling: so what? I would love to be in the privileged position of not worrying about what the state of the economy means for the financial security of me and my family or that of my constituents. The truth is that when sterling falls and jobs are lost, it will not be the wealthiest who are hit but the opportunities of the vast majority of people on low and middle incomes.
The members of the leave campaign seem to have largely left the Chamber. [Interruption.] They have sailed down the Thames. However, was it not striking that we heard the right hon. Member for Wokingham (John Redwood) reinvent himself as an anti-austerity campaigner? We have also heard the right hon. Member for Surrey Heath (Michael Gove) claiming to be the saviour of the NHS, repeating the untruth that £350 million a week will be saved and invested in the NHS if we leave.
It is not often that I turn to our former Prime Minister, Sir John Major, for words of wisdom and encouragement about the direction of our national health service, but did he not have it right when he pointed out how preposterous it is to believe that the hon. Member for Uxbridge and South Ruislip (Boris Johnson), the right hon. Member for Surrey Heath and their friends have the best interests of the NHS at heart? Even a former Conservative Prime Minister says that we cannot trust those on the right wing of the Conservative party and their fellow travellers in UKIP with the future of our national health service, so why should we believe them?
On economic forecasts, there can be no certainty, only analysis and assumption. In picking figures, we should trust the judgment of every leading economic voice, every university leader, the leaders of our trade union movement, the leaders of our businesses, and our leaders from across the political spectrum. They have come together because they believe remaining in the EU to be in our national interest.
Lucy Allan
Does the hon. Gentleman also think that we should trust the voice of the people?
Wes Streeting
I absolutely do. I voted to give the people a choice, and I will abide by their decision next week.
I say directly to my constituents that they have an enormous responsibility resting on their shoulders. Every day since I was elected to Parliament last year—on a slim majority and against the odds—I have said that I will put their interests first. They may not always agree with me, but they will always know where I stand. Every day, in every vote, the only question in my mind is, what is best for my constituency and my country? Now, my constituents face that choice in a vote that is more important than any that Members of Parliament will take part in during this Session.
Where does our country’s future lie? Leading Europe or leaving Europe? As far as I am concerned, there is only one answer to that question if people want a future for our country that provides economic security, national security and the ability to take on the big issues and global challenges facing us in this century. That is why I urge my constituents to make the progressive, the pragmatic and the patriotic choice to remain in the European Union.
Several hon. Members rose—
Madam Deputy Speaker (Natascha Engel)
Order. We are getting slightly tight on time. If Members do not take so many interventions, there will be no need to lower the time limit. However, if they continue to take interventions, I am afraid there will be. For now it is fine, as long as people keep to a minimum of interventions.
Rebecca Pow (Taunton Deane) (Con)
I am pleased to follow the impassioned words of the hon. Member for Ilford North (Wes Streeting).
I want to start my speech in this historic debate by asking a question: have we been prosperous for the last 40 years? Yes, we certainly have. We have become the fifth greatest economy in the world, and that is while being part of the European Union, and not despite being part of it. Our economy has grown by 65% during that time. That time has also been peaceful, as my hon. Friends the Members for Tonbridge and Malling (Tom Tugendhat) and for Portsmouth South (Mrs Drummond) said, and we should not forget that.
The EU is by no means perfect—there is much that I personally do not like—but on economic grounds there is an overwhelming reason to remain within it. That is the overwhelming consensus when I talk to businesses in my constituency. I will mention a few companies I have visited that all say that we are better off in. Pritex in Wellington manufactures sound-proofing for the car industry. The chief executive heads up the Society of Motor Manufacturers and Traders, and he has categorically stressed that the car industry operates totally EU-wide; it is a £15 billion trade for the UK, so we need to remain in the EU. W. H. Hendy and Sons makes high-pressure water pumps in Wiveliscombe. That is in a rural area, but the company exports right across the EU. It goes with delegations to get contracts in other parts of the world, and it could not do that alone, so it needs us to be in Europe. That is critical for rural jobs in my constituency, which we must not put in jeopardy.
Ministry of Cake, based in Taunton, is a £30 million business employing 300 people and the largest dessert maker in the EU. You have probably eaten some of its cakes, Madam Deputy Speaker, as it supplies coffee chains here and right across the EU. The managing director says that his UK bestseller is chocolate fudge cake, but the market in the UK is saturated, so he now needs to get 25% of his trade from the EU. He therefore needs us to stay in, because it is the best place to get trade from. We share E numbers, standards and clear labelling, and we have a free market, and he has access to all the labour in that market. He could not operate without the migrant labour force in Taunton. Nor could another great business in Wellington—K. S. Coles, the vegetable packers, run by Ken Coles. He employs 70 labourers in the winter, mostly migrants, and hundreds more in the summer, to pick beans, peas and strawberries. I do not know whether you like mashed swede, Madam Deputy Speaker, but I do. The company is not only the largest supplier of swedes to our supermarkets in this country but the second largest supplier of swedes to Germany, so it exports right across the EU and needs us to stay in for the sake of that trade.
On all those grounds, we need to remain within the EU. It is a no-brainer. As we have heard, we already have the best possible deal. We have no euro, we have free trade, we have 300 million people we can access, we have a rebate, and we have a veto on laws. What more could we want?
The subjects of agriculture and the environment are close to my heart and important in my rural constituency. The CAP is vital to our agricultural industry. The £20 billion of funding that the industry gets to keep the environment in good shape is absolutely priceless. It not only keeps the rural economy going but keeps people on the land and gives us low-priced food. If we leave the EU, the price of food will rise, mark my words. We have high welfare standards that we have to keep to, so our food will be expensive to produce and we will be flooded with cheap food from Europe. Our farmers therefore need us to stay in.
On the environment, birds do not stop at the boundaries of countries, and we share the water and the air, so we are much better off within the EU. The framework of EU legislation made us clean up our beaches and water. Our beaches, in particular, are vital for our tourist industry in the south-west. There is a direct spin-off between the environmental benefits of being in Europe and the economic benefits, both of which are absolutely clear.
The EU is not perfect, but let us be at the table fighting to improve it, especially through our presidency. Let us be sure that there is some of that chocolate fudge cake at the EU table.
Mary Glindon (North Tyneside) (Lab)
It was really good to hear the hon. Member for Taunton Deane (Rebecca Pow) make the case for the EU in terms of the economy, agriculture and the environment.
It is very easy for me to support this motion on behalf of the people of North Tyneside and, I hope, the wider community of the north-east, because over the years our region has received billions of pounds in investment from Europe. As my hon. Friend the Member for Sedgefield (Phil Wilson) said, our region is entitled to more European funds than any other English region, and in the next five years it is due to receive £726 million in European funding. The single market has been hugely significant for business development in the north-east, with more than half our exports going to the EU and 160,000 jobs relying directly on that trade.
Mary Glindon
I will carry on, if my hon. Friend does not mind.
It is no wonder that in a recent survey the North East chamber of commerce found that the majority of the region’s businesses wish to remain in the EU. The same survey highlighted the frustration that businesses feel about having to deal with EU regulations, but the conclusion was that the single market remains the region’s most important market and that it will continue to be so well into the future.
The benefit to the north-east is further illustrated by a study by The Chronicle in Newcastle, which found that the north-east has received an average of £187 per head in EU funding since 2007, compared with £82 in the rest of the UK. The generous funding from the EU to our region stands in stark contrast to how we fare when it comes to receiving funding from this UK Government.
I remind the House that it was a Tory Government who forced the closure of the Swan Hunter shipyard in Wallsend in the mid-1990s, with devastating consequences for Tyneside. However, thanks to money from the EU, the yard is undergoing a massive transformation. North Tyneside Council was awarded £6.7 million of European regional development funding to part-fund enabling infrastructure works at the former shipyard, which has opened up development on a strategically important enterprise zone site.
Between 2007 and 2013, under the European structural fund programme, North Tyneside Council was the accountable body for nearly £13 million in our region. That money part-funded the refurbishment of a new centre for innovation on our enterprise zone site, creating flexible start-up and business incubation space for small and medium-sized enterprises. Some £1.8 million of ERDF funding was used towards funding business support to enable start-up support, particularly in our disadvantaged areas, resulting in a rate of 400 start-ups per year.
The council is already undertaking work to maximise European structural and investment funds from the current programme to meet the EU 2020 strategy ambitions of achieving smart, sustainable and inclusive growth. The newly funded business support programme, Made in North Tyneside, will bring great benefits to the local community and businesses alike. In addition, the council is working with partners on a community-led development to help the most disadvantaged communities in the top 20% most deprived areas to utilise both ESF and ERDF funding to achieve economic growth in their own localities.
I hope that the north-east will not be fooled by those in the Brexit camp who claim that we would be better off leaving the EU. Since 2010, the north-east has suffered huge public spending cuts right across the board under the Tories—from the police and fire services, to the closure of Government offices—all of which have cost jobs and a loss of income to our local communities. The truth is that the future prosperity of my constituency and the north-east region is inextricably linked to the EU. Being unrepentantly parochial, I say that that is reason enough to remain.
Lucy Allan (Telford) (Con)
Thank you, Madam Deputy Speaker, for calling me to speak in this very important debate. I have listened with great interest to the many excellent speeches that have been made.
There is an increasingly healthy trend of Members from all parties coming to this place having had a career outside of politics and life experience that they can bring to our debates. During the year in which I have had the honour to represent Telford, I have seen many fine examples of our debates being informed by that experience and expertise.
I am a chartered accountant. Before coming to this place, I specialised in the financial sector, specifically in investment in financial markets. I want to draw on that experience and bring it to the debate. Over the months, the debate on the EU has, naturally, been characterised by passion on both sides. That has led to increasingly impossible claims and predictions, which have seemed to the outside world, on occasion, alarmist and fanciful. I want to put on record some of the more moderate and balanced perspectives of investors who, because they earn their living generating investment returns for clients, truly understand the meaning of the word risk. We have heard that word repeatedly today and on other occasions. Investors are motivated to put economic considerations before any others.
I am sure that Members present who have an interest in economics will be familiar with the outstanding reputation of Neil Woodford, an investor in UK business. The Woodford report, which was published earlier this year, provides a balanced commentary on the economic impact of Brexit. I encourage those who genuinely harbour fears about a post-Brexit economy to read that report. In case they do not have the chance to do so, its main conclusions are: first, that the most extreme claims about the costs and benefits of Brexit are wide of the mark and not evidence-based; secondly, that a more tailored immigration approach, the freedom to make trade deals with global trading partners, moderately lower levels of regulation and savings to the public purse, although they will not be huge, will have some positive net benefits; and, thirdly, that the most plausible outcome from Brexit will be a modest positive impact on jobs and growth. Neil Woodford states:
“We continue to think that the United Kingdom’s economic prospects are good whether inside or outside the European Union.”
We have a Conservative Government to thank for that.
Neil Woodford is in good company. Richard Sharp, an external member of the Financial Policy Committee who has more than 30 years’ experience in finance and who is in constant contact with major international investors in UK businesses, said in evidence to the Treasury Committee:
“The UK is a thoroughly investable economy and it would remain a thoroughly investable economy whichever way the vote goes”.
The tone of those professional investors is a welcome relief from the sound and fury that political campaigns inevitably generate—although the debate today has been moderate and considered.
From my experience in the financial sector, and after listening to investors and advisers, I believe that when we look back in the not-too-distant future at GDP, employment rates, the FTSE 100 index and inflation, it will be difficult to identify when exactly Brexit occurred. The FTSE 100 is up £17 billion today; I think that some people may not have been following the markets. I want to reassure the House that despite what is said by the ardent campaigners, whose will to win I fully understand, we can sleep easy in our beds on June 24 because the economy will remain strong either way.
We have heard a great deal from the establishment, the elites and bureaucrats, and all those who benefit from the EU, but they are not talking the language of my constituents in Telford. They are not listening to the millions of ordinary people across Britain whose everyday lives are most affected by our membership. Many people in Telford are affected by increasing pressure on public services, by the difficulty of getting a school place and by waiting times to see their GP. The less well-off are the most exposed to the day-to-day reality of our membership of the EU.
We in this place have said enough. Now it is time for the British people to have a say. They want to be free—free to decide who comes to our country, free to make our own laws and free to trade with the rest of the world. On Thursday, I know that the people of Telford will trust their hearts and their instincts and vote for Britain’s future.
Helen Goodman (Bishop Auckland) (Lab)
Britain stands at a crossroads. The nation has to make a big choice: whether to stay in the EU or to leave. The EU was built on the ashes of world war two once people realised that security and prosperity were linked. Today, again, the world is an uncertain place. Russia has forcibly taken Crimea. Syria is in the throes of a devastating civil war. What is the best approach? Should we pull up the drawbridge or co-operate with our neighbours?
The Labour and trade union movement was built on the principle of solidarity, and what is true for individuals is also true for nations. I believe that, since 2010, this Tory-led Government have set about mending the public finances in the wrong way—cuts instead of investment, austerity rather than growth—and this has led to deep unfairness and economic insecurity. People must now think carefully about what is the best choice in the real world.
On putting jobs first, why has the head of Hitachi said that “jobs would be lost” if we left the EU? Because Britain is a market of 60 million people, whereas Europe is a market of 500 million people. If we leave, next time he invests in a new production line, it will be more economic to build it somewhere else. Today, Rolls-Royce has said the same. Foreign indirect investment creates 85,000 jobs in this country every year, which are all at risk from Brexit.
The Brexit campaign has totally failed to set out how a new trading arrangement would work. It has suggested the arrangements for Norway, Switzerland, Canada and Albania, but even the Prime Minister of Albania does not think that that is a good idea. Why has the head of Glaxo, part of our brilliant pharmaceuticals industry, said that the EU is the best platform for success? Because one system for drug licensing is faster and more efficient than 28 systems. Yet Dominic Cummings, the Lord Chancellor’s former Spad who now runs Vote Leave, told the Treasury Committee that “that is complete rubbish.” Such breath-taking arrogance is putting 93,000 jobs at risk.
Let us look at the car industry. If we leave, it will face tariffs of 10%. It is supposed to cope with that through labour market flexibility, which, translated into English, means wage cuts. Wages account for only a third of total costs, so people would have to take a 30% pay cut or lose their jobs. There are 450,000 jobs at risk.
The hon. Member for Uxbridge and South Ruislip (Boris Johnson) and my right hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart) have visited textile factories that, outside the EU, would face a 6.5% tariff. It is hard to cut wages in such factories because the Low Pay Commission reports that most of the workers are on the minimum wage, so another 56,000 jobs are at risk, mainly in the north and the midlands. When I challenged the hon. Member for Uxbridge and South Ruislip about that, he said that
“there is no need for them to worry.”
It is all right for him: on top of his MP’s salary, he takes home another £250,000 every year for his column in The Daily Telegraph. His attitude is flippant to the point of irresponsibility, and this is not a joke.
Let us look at what is happening in the markets: £60 billion has been wiped off the value of shares in London in a week, and people are so desperate to get their money out of London that they are prepared to pay the German Government to look after it. That may be good news for the hedge funders, who make their money betting on volatility and then use it to fund the Brexit campaign, but it is certainly not good news for the millions of people whose pensions depend on the strength of the FTSE 100.
Security and prosperity are linked. The question on the ballot paper is the choice between letting off the leash a right-wing Tory Brexit group that is able to destroy the life chances of millions of ordinary people, and voting to remain in and holding on to the security and prosperity that we have in the EU.
Steve Double (St Austell and Newquay) (Con)
I feel a bit of a lone voice because I am going to speak in favour of voting to leave next week. It is very important for me to do so because I believe that Labour Members’ comments about a Tory Brexit betray the fact that they are not listening to the British people. The vote next week will quite clearly be very close, but at least half of the British people have had enough of the EU and want to leave. By calling this a Tory Brexit, Labour Members are just not listening to the many millions of British people who have genuine concerns about our current relationship with the EU.
This debate, however, is about the supposed economic benefits of our membership of the EU. I will address one very specific point in that regard. According to the House of Commons Library, in 2016 Britain is forecast to give £20.5 billion gross and £11.2 billion net to the EU, so we will be getting back some money from that £20 billion. No one can deny that that will be a large sum of money, and there are various opinions about how it could be spent, but only if we leave will we get to decide how it can be apportioned.
Part of the money we get back from the EU comes in the form of economic development aid. The constituency in Cornwall that I have the privilege of representing is one of the areas in England that benefits the most from that aid. Over the past decades, Cornwall has received hundreds of millions of pounds in regional growth funding from the EU.
Mrs Sheryll Murray
I believe Cornwall has been getting around £65 million a year since 2001.
Steve Double
I thank my hon. Friend for that—I was about to make the point that over the past 10 years or so Cornwall has received around £600 million in economic development aid. But we need to remember that that is not EU money. The EU does not actually have any money—there is no magic EU money tree. It is our money, which we give to the EU. It converts it into euros, then converts that into sterling to give back to us, except that it gives it back with a whole load of strings, bureaucracy and red tape attached about how we can spend it.
The fact is that that money is not working. It was meant to create 10,000 new jobs in Cornwall. In fact, in the past 10 years or so, it has created around a third of that number. That Cornwall has now qualified for a third round of EU funding demonstrates that the funding is failing. It is not lifting the Cornish economy as intended. It is not raising wages or the standard of living in the way it was designed to.
Steve Double
I will not take any more interventions, I am afraid.
There is a very simple reason for that failure. We are not able to spend the aid on what we need to in Cornwall. How we should spend it is dictated, Big Brother fashion, by the EU. The requirements are designed for a Europe-wide programme that does not fit the Cornish economy. I will give an example. The current round of funding is targeted only at supporting and providing facilities for small and medium-sized enterprises. But Cornwall does not need another load of SMEs. We need big companies to come and invest in Cornwall, to create better-paid jobs and provide career opportunities for our young people. That is what Cornwall desperately needs.
Just this week, business leaders told me that there were two projects on the table and ready to go. One was from a large company that wants to invest in Cornwall and create jobs, and the other was from a manufacturing company in Cornwall that is ready to expand, producing lots more jobs. Both need European regional development fund support but do not qualify for the current round because they are not SMEs. The EU is giving us back our own money but telling us we cannot spend it on what we need and want to spend it on in Cornwall.
I do not know whether any other Members recognise this situation, but I get quite wound up when I see that wonderful blue plaque saying, “Funded by the European Union”. Every time I see one, I think, “No, that was funded by British taxpayers’ money that you have recycled and given back to us then told us how to spend.”
We are often told we should vote remain because of all the economic support we get from the EU. Well, from a Cornish point of view, it is not working. Our own money is recycled, but how it can be spent is dictated to us. I contend that we would be far better off keeping that money ourselves in the first place and having the British Government decide how we can support our regional economies.
The theme of this debate has been the risk of leaving against the certainty of remaining. I say that there are quite clearly risks in remaining. No one knows what the future of the EU will be. The eurozone crisis has not gone away, but has just been kicked into the long grass, and the migration crisis will continue to be a major issue in the EU. There is no certainty. The vote is not between the status quo and leaving. We are voting on whether to remain, and there are many, many risks in a remain vote. Let us be honest with the people of this country that there are risks on both sides. I will certainly be voting next week to leave.
Several hon. Members rose—
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. I must reduce the time limit for speeches—[Interruption.] Members may well sigh, but I cannot add to the number of hours in a day or minutes in an hour. The time limit is four minutes.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
Sometimes in this Chamber we say that we have heard it all, but talk about turkeys voting for an early Christmas! The hon. Member for St Austell and Newquay (Steve Double) wants to give back £600 million that has been given to Cornwall by the EU. What twisted logic. Over the past two days, the world has woken up to the risks of Brexit. The hon. Member for Telford (Lucy Allan) said that the markets bounced by £17 billion today, but she ignored the fact that the FTSE index has fallen by £100 billion over the past week—a net £80 billion has been wiped off the FTSE as investors around the world begin to recognise the threat to our prosperity. Every renowned economist in the land has talked about the risk that we face from Brexit, not just in this country, but the risk of instability in Europe as well.
Not long ago we faced the financial crisis of 2007 to 2008, from which we have barely recovered. We have seen the markets react and sterling fall; the euro has fallen as investors flee towards the door. That is the risk that the Brexiteers are putting in front of the people of the United Kingdom. When we consider the fall in the value of the stock market, we are talking about people whose future pensions are being cut. That is what the Brexiteers are threatening for pensioners around the country, and we must all wake up and ensure that we vote for prosperity, security and sustainability by remaining in the EU.
Martin Docherty-Hughes
Does my hon. Friend agree that the argument made outside this House, and critically in English communities, is about policies such as housing? The problem of England’s housing shortage lies fairly and squarely at the feet of the British Government, and with successive Governments who have undermined social housing for the working class since the times of Margaret Thatcher.
Ian Blackford
My hon. Friend makes an important point. We hear scare stories about constraints on housing, health and education, but it is the Government’s responsibility to plan for the increase from immigration. We must also consider the opportunity for all our people to live and work throughout Europe, from which we have benefited. In Scotland, 42% of exports go to the European Union and have a value of £11 billion, with 300,000 jobs directly connected to them. We must not play with fire and risk prosperity and jobs in Scotland and the rest of the UK.
There is a complete fallacy about immigration. Mark my words: we will end up back in the single market, and as a consequence we will have to accept free movement of people. The idea that we will fix the so-called problem of immigration with an exit from the EU is simply flawed and a lie. In Scotland, as my right hon. Friend the Member for Gordon (Alex Salmond) has often said, we are not full up. We need migration, and for young people to come with families and deliver prosperity for Scotland. We need families such as the Brains, who live in Dingwall in my constituency and who this Government want to throw out.
Let me turn to Europe’s potential, and how trade and investment have benefited us. Let me mention opportunities for jobs, and workers’ rights that have been protected through Europe. The Minister for Employment is not in her place, but she said that she wants to deal with some of the rights for workers that come from the European Union. We must say to those on the left and those who voted for Labour, the SNP, the Green party and Plaid Cymru: “For goodness’ sake, don’t risk your employment rights with a vote for Brexit next week.”
There is a real danger to this country that if the UK votes for Brexit, the keys to Downing Street will be taken by the likes of the ex-Mayor of London and his cronies on the right of the Tory party. We face the risk of a right-wing Tory Government that will affect people throughout the country. Scotland’s future is in Europe, and if we end up next week with the UK voting out but Scotland voting in, the SNP will stand up for the rights of Scottish people and ensure that this House does not pull us out of Europe against our will.
Ben Howlett (Bath) (Con)
It is a pleasure to follow such eloquent speeches from across the House. I probably share exactly the same concern as the hon. Member for Ross, Skye and Lochaber (Ian Blackford) about a possible increase in whisky prices. I hope staying inside the EU will keep prices down low.
It is often quite difficult, in a debate that has lasted for so many months and so many hours, to add something new. I want to commence today with a measured assessment of the highly likely instability a vote to leave would cause our economy and what that instability may lead to. Later, I want to return to the benefits our economy receives from our membership of the EU, particularly in the south-west and in my constituency.
We have heard from many economists in this debate, some of whom were more convincing than others. I am not an economist—I am an economic historian—but I think it is helpful to look back at recessions caused by external factors in our history and explain how their impact helps to predict what could happen after a Brexit in a couple of days’ time.
During the 1976 International Monetary Fund crisis, the Labour Government of the time faced one of the largest crises of confidence in the British economy since the second world war. Britain racked up huge debts, creditors lost confidence, there were runs on the banks, inflation was sky high, interest rates rocketed and unemployment began to shoot up. Fast-forward 30 years to the recession of 2007 to 2008 and the country was running a substantial deficit, debts had been rising for years and the world economy faced the worst sovereign debt crisis in our history. There were queues of people withdrawing cash from their bank, unemployment rose, recession hit the UK and it has taken years of hard work to rebuild the confidence of our creditors. The current Government have worked hard to restore our economy, brought unemployment levels to record lows and put more money in all our constituents’ pockets.
Both those incidents caused a reduction in the confidence of our creditors in our ability to repay our debts. One required an IMF bailout, the other a downgrade in our credit rating. Despite the hard efforts of this Government, a budget deficit still persists and it is vital that the costs of servicing that debt are kept low. We retain confidence that the UK will be able to service the debt. Rating agency Standard & Poor’s has already signalled a downgrade of the UK’s credit rating by up to two degrees in the event of Britain leaving the EU. We cannot sacrifice years of hard work of deficit reduction for a leap into the dark. We have to learn from our past mistakes before we make that decision. That is on top of the risks posed to jobs and economic growth that Members from across the House and almost every major economist and financial institution have warned about thus far. Leaders of the leave camp cannot guarantee a single job in the event of an exit. I seriously do not think Britain is in a position to be able to put all that at risk. If we take the leap into the unknown, we do not know how big the recession will be, how long it will continue or how deep it will go. It is an absolute no-brainer: Britain is stronger, safer and better off inside the European Union.
Finally, I want to turn quickly to the benefits that the UK’s membership of the EU brings to the UK economy, in particular to my constituency. Many Members who are also from the south-west have noted that 250,000 jobs in the south-west are linked directly to our place in the EU, and that withdrawal from the European Union could put tens of thousands of jobs at risk in our region. The Government have done so much to boost our economy and reduce unemployment levels. All that hard work could be undone quickly as the result of a Brexit. My constituency has a very vibrant tourist economy. I do not want anything to put it at risk. In conclusion, we are better and stronger in the European Union than out.
Mike Gapes (Ilford South) (Lab/Co-op)
It is a pleasure to follow the hon. Member for Bath (Ben Howlett). He rightly reminded us of some of the economic problems this country has had, so let us go back to 1973 and 1974 when we had a three-day week. Since then, despite difficulties throughout the time we have been in the European Union, our country has been wealthier, more prosperous and more influential in the world in those deep dark days of 1973. People forget that.
One thing that really concerns me about the referendum debate is that when people come to vote, they will not be answering the question that is on the ballot paper. Some are angry about rubbish in the street and some are disappointed because it takes them four hours to get through to their GP surgery on the phone. Someone told me she did not like it that her next-door neighbours, from eastern Europe, smoked in their garden rather than in their house, meaning she could not open her windows. When I put that on Twitter, I was accused of being patronising. I am sorry but these are the kinds of reasons being given in conversations I have had. The referendum is in danger of becoming a generalised, anti-Government and anti-politician vote. That is the danger of referendums.
But we are where we are. I ask my constituents to think about their children and grandchildren. This referendum is not a vote on how they feel today; it is a vote forever. It is like buying a dog: it is not just for Christmas. We need to think about what kind of country we are. Are we, as the Foreign Affairs Committee said in a recent report, going to become smaller and less influential in the world? Do we, by leaving the EU, want to put our permanent membership of the UN Security Council in doubt? France would then be the only permanent member from the EU. At the moment, the other 27 member states broadly accept the status quo within the EU, but that would change. Do we want to damage our relations with our Commonwealth partners and neighbours? India, Pakistan, Bangladesh, Sir Lanka, Australia and Canada all want the UK to remain in the EU because we make it more outward-looking to them and the rest of the world.
We face a fundamental choice over our future. How do we work effectively with partners on climate change? How do we deal with tax avoidance globally? How do we ensure minimum standards? How do we uphold the values of the universal declaration of human rights, which are under attack from Russia and others? On that last point, it is great that today an EU country—unfortunately not us but Slovakia—has beaten Russia 2:1 in the Euros. It augurs well for our country on 23 June. Russia is not going to win the Euros, and it is not going to get its way in our referendum.
Matt Warman (Boston and Skegness) (Con)
It is with some trepidation that I rise to speak in this debate, because the Euroscepticism of Lincolnshire in general and the town of Boston in particular is well known. It awarded UKIP the highest share of the vote outside Clacton—we all know what happened there—and UKIP also won in the EU elections. I do not take it lightly that the constituency changed heart in 2015 and sent a Conservative to this place, and I do not for one moment deny that there is a single, clear reason why Boston is so often on television, in the papers and online. That reason is Europe, and specifically immigration.
A generation of politicians failed Boston. First, it was Portugal and then Poland, Lithuania, Latvia and beyond that sent their most motivated people to do low-paid work, primarily in Britain’s fields. Two things happened as a result. First, agriculture thrived and population growth meant a raft of businesses sprang up aimed specifically at new communities. Some churches thrived and local hospitals that previously struggled for numbers found they had the opposite problem. But the second thing was the other side of the coin: pressure on public services increased, the tax credits bill rose and local people saw their town change rapidly. People started to say they did not hear English accents on the streets as much as they previously had. Those tensions were palpable.
The impact of free movement and of economic growth means that Boston is, on paper, thriving, but it is often cited as the most Eurosceptic place in the United Kingdom. Some 10,000, and in reality many more, of the 65,000 population are not English. Why, then, did they elect a pro-EU MP? It is clear to me that Europe needs reform, but ultimately this referendum is a once-in-a-generation opportunity to look to the future.
The most recent figures suggest that some 4,452 jobs in the constituency depend on our membership. That is more than four times the jobless total. When I visit local schools, I see that integration can work, and I view Boston’s future diversity with profound optimism. I deeply regret that the Government cancelled Labour’s migration impacts fund in 2010, and I passionately welcome its imminent return at three times that level under this Government. I passionately believe that the economic gamble of leaving is not one that I can responsibly ask my constituents to take. If we vote to leave, it will disillusion even more voters with politics, when it turns out not to be a panacea.
I believe one thing above all else: this referendum is not an opportunity to punish the young for the mistakes of previous politicians, but it is a chance for politicians to reflect on ourselves here. We need to explain better, communicate more and make sure that disconnection does not extend to disenfranchisement.
I will vote to remain tonight, and I expect that the House will do the same, but we must note the difference between the result in this House and the result on Thursday. We must look to our own future if we are adequately to represent our constituents in the future. I will vote to remain, but I urge all Members to understand why there is a deep and legitimate disconnect between many of our constituents and many of us across this House.
Andrew Gwynne (Denton and Reddish) (Lab)
It is a pleasure to follow the hon. Member for Boston and Skegness (Matt Warman), who described next week’s vote as a “once-in-a-generation opportunity”. Having been born in 1974, that is certainly how I see it. I was just one at the time of the last European referendum in 1975. For me, it really is a once-in-a-generation opportunity to plough our future. At that time, my constituency voted to remain in the European Economic Community by 2:1. I have been knocking on doors for several months and have spoken to many of my constituents on the Labour In for Britain bus and at the street stall last Saturday in the centre of Denton, so I am not naive enough to think that that result will be repeated next Thursday. It is likely that when the votes are counted, my constituency will be on the opposite side of the argument.
In common with the hon. Member for Boston and Skegness, I think it would be remiss of me not to explain to those among my constituents who have yet to make up their mind why I believe that a vote to remain in the European Union would offer the best future for the communities that make up Denton and Reddish. I do so by challenging some of the assumptions of the leave campaign. I was unfortunate enough to watch its television broadcast last night, and it seemed to fall into five areas: the £350 million; the NHS; immigration; Turkey; and “take back control of our country”.
Well, we know that the £350 million figure is incorrect because it fails to take into account the rebate that Mrs Thatcher secured or the money we get from the EU for our fishing and farming industries, for science, training, education and urban regeneration.
When it comes to the NHS, I say that money cannot be spent twice. The money that we send to the European Union would almost certainly have to be sent to the EU anyway for us to continue to trade within a free trade area. If we use Norway as an example, we find that it pays more per head of population for its position than we do to be a fully paid-up member of the European Union. That money is not going to be there for the NHS.
As for immigration, if we have a Norwegian or Swiss-style deal—, of course, none of us actually knows what deal the Brexiteers are proposing—we shall have to accept free movement within the single market. And as for Turkey, we have a veto on Turkish membership, because we are at the table with the other 27 European Union member states. If we give that up, we shall have no say, particularly if the rest of the European Union reaches an agreement on Turkish membership, and we are in the free trade area that will then include Turkey.
Finally, there is “taking back control”. I agree, in one sense, with the right hon. Member for Wokingham (John Redwood), who says that being in a free trade area, or a common market, means having to accept common rules and regulations. What kind of control are we taking back when we give up our seat at the table in the Council of Ministers, when we give up our European Commissioner, and when we give up our European parliamentary seats, where precisely those common rules and regulations are being made? That is not taking back control; it is giving up control.
I say this to the constituents of Denton and Reddish: next Thursday, vote remain.
Wendy Morton (Aldridge-Brownhills) (Con)
It is a pleasure to speak in such an important debate.
Next week, as we know, the country faces an historic vote. We will all have the chance to have our say on the UK’s future, be it remain or leave. However, we must remember that this is not a general election. If we are not happy, we cannot vote again in five years’ time and change our minds.
It was the campaign to keep the pound that first got me involved in politics. I was, and still am, sceptical about the European Union, and I will always feel more British—in fact, more northern—than European. I also come from a business background, and, having seen it at first hand, I understand the frustration caused by the red tape with which small businesses in particular are often faced.
On a personal level, I have found the decision on whether to remain or leave a tough one. Like many, I have pondered, and I have considered the arguments for and against. I have sometimes struggled with the arguments presented by both sides, and, I must add, the tone in which they have been presented. Having spoken to constituents at the weekend, I believe that a number of them feel the same. I am not content with the EU, and that is why I have taken my time. I wanted to be sure about my decision. I am under no illusion about the fact that there are those who will accuse me of having sat on the fence, but for me, it was important to make the right decision.
Over the weekend, I talked to one of my constituents about the EU. We had had discussions with others about remain and exit, and all the ins and outs and all the arguments, but that one person said something that really struck me: “All that I want from politicians is for them to be straight with us, the British public.” It was one of those moments when one hears very wise words, and I heard them from someone on my patch.
Having taken account of all the matters involved—but especially business and the economy, safety and security—I will, on balance, support the remain campaign. That does not mean that I am content with the status quo; far from it. The EU needs continuous reform, and it is time that it was more accountable to us. I noted the wise words of my hon. Friend the Member for Boston and Skegness (Matt Warman) about our connecting, or reconnecting, with the public. We need that connection with Europe as well, so that we understand more about what it is doing for us.
During the last few years, we have done so much work and made such tough decisions to secure our country’s economy, and I do not want that to be put at risk. I believe that it is in the interests of my constituency and my country to remain.
Stephen Kinnock (Aberavon) (Lab)
It is a pleasure to follow the hon. Member for Aldridge-Brownhills (Wendy Morton). I congratulate her on making absolutely the right choice about the referendum.
The decision facing the electorate on 23 June is a choice between economic security and global influence inside the EU or a leap in the dark outside it, and nowhere will the consequences of that choice be more deeply felt than in my constituency, where the Port Talbot steelworks is the beating heart of our economy and community. I was therefore pleased to see that this week Tata Steel UK sent an all-staff communication stating:
“The European Union influences very important aspects of Tata Steel’s business in the UK. The EU is by far our largest export market, with over a third of our UK steel heading there. And that’s not including the steel that goes via our customers—the EU is a critical export market for the UK’s car makers for example. So access to that market is fundamental to our business and one of the preconditions for this trade is that EU laws and regulations are followed. If the UK were to exit the EU and set these rules ourselves, it is likely we would still need to adhere to EU rules to enter that market. The difference: we would no longer have a say in how those rules are set up or applied.”
We know that the British steel industry is in a precarious state. The last thing it needs now is the turmoil that would be unleashed by a Brexit. That is why I am looking forward to once again joining steelworkers in Aberavon town on Saturday to send the message loud and clear that the steel industry is stronger, safer and better off inside the EU.
The bread-and-butter case for remaining is clear, but there is also a compelling strategic case to be made. The fact is that Britain succeeds when we open ourselves to the world, not when we close ourselves off. We succeed as a nation when we trade, forge alliances and build bridges. We are at our best when we are leading, not leaving.
In the spirit of cross-party consensus that is gripping the House this afternoon, I would like to quote Winston Churchill, who in 1948 spoke of the “three majestic circles” that should define our approach to the world: the Commonwealth, the United States and Europe, with Britain being
“the very point of juncture”,
the only country with
“a great part in every one of them”.
Churchill’s message is as true today as it was almost 70 years ago. He knew then, and we know now, that weakening our ties with one circle will inevitably weaken our ties with all three. President Obama made that clear during his recent visit, because he knows that a strong Britain in a strong Europe is a stronger ally for the US. We need not just take his word for it; Prime Minister Modi has said that Britain is India’s gateway to the EU. If we leave, Mr Modi’s priority will not be us, it will be to find a new gateway.
Like all nations, we have grappled with the forces of globalisation for thousands of years. From the moment the Romans landed on our shores, we have been an integral part of the international community, buffeted by the winds of commerce, conflict and geopolitics. Over the centuries we marshalled the arts of empire building, trade, and alliance building to emerge as the pre-eminent global power. Since 1948 we have evolved from being an imperial power to being a global partner. This transformation—this journey—has been morally, politically and economically right, and it has been powered by the politics of economic realism. The movement of goods, services, capital and people across national borders has given rise to a world in which the lines between the domestic and the foreign have blurred. Fast-forward 42 years and we see how right we were; from the steel crisis to the Panama papers, from the refugee crisis to taking on the Kremlin, the EU is the key player in all those issues, and that is why it is critical that we vote to remain on 23 June.
Mike Wood (Dudley South) (Con)
I was born in March 1976, almost exactly nine months after the last referendum; I have not dared ask my parents how they felt about the result. I never expected to be campaigning to leave the EU, having spent seven very happy years working in the European Parliament for what was then the EPP-ED Group, working on internal market policy, including the development of the existing services directive. I have certainly seen a number of benefits of the EU, but I have also seen too many of the frustrations and limitations that are involved in our membership.
This is a question on which it is possible to have mixed feelings. It is also a question on which it is quite possible, and indeed right and natural, for good and reasonable people to reach different conclusions without any of them ceasing to be good, reasonable and rational people. I do not take a negative view of the Prime Minister’s renegotiations, as some people have done. I think it was genuinely the best deal available, and it is an improvement as far as it goes. If we end up staying in next week, I would rather it was on the basis of having those changes than of not having them. However, they do not represent the fundamental reform that the EU needed in order to really transform our relationship with it.
I understand the argument that the Foreign Secretary made earlier. He talked about the number of our partners who are suddenly committed to competitiveness. I used to feel that way too—I used to believe it—but unfortunately, I saw that happening far too many times during the seven years that I was in the European Parliament. I remember Lord Patten calling for an end to the EU interfering in every nook and cranny of daily life. I remember Romano Prodi’s competitiveness action plan and, a few years later, José Barroso’s revitalised Lisbon strategy. Each was announced, with a great deal of fanfare as a game changer in how the EU approached competitiveness and growth, but it was always back to business as usual within a few months. I have seen nothing to suggest that anything has really changed since I left 10 years ago, because it is in the culture of the European Union to be a rather more insular and inward-looking organisation than it ought to be.
I am proud to be Member of Parliament in the black country. It is the home of the industrial revolution, and we still produce world-class goods and services that are sold around the world. I am proud to represent businesses that export to some of the fastest-growing economies in the world—countries such as India, Brazil, Saudi Arabia, China and Taiwan. Sadly, the EU is too often a barrier to trading with those countries. I saw that when I was in Brussels, and I have certainly seen it since, as a Member of Parliament. I have therefore reached the conclusion that black country trade would be better served if Britain were to take back the power to negotiate those trade deals and reclaim its independent voice on international bodies.
This week’s edition of The Spectator is surely correct in saying that no one—politician, economist or mystic—can be sure what the future has in store, and whether we will remain or leave. However, we can be sure that whatever happens, Britain will be better able to respond and adapt as a sovereign country living under its own laws. Britain can look forward to a prosperous, more outward-looking future trading and co-operating in Europe and also with countries outside Europe. That is why, like so many of my constituents and so many small businesses, I shall be voting to leave the European Union.
Nic Dakin (Scunthorpe) (Lab)
I shall be voting next week to remain in the European Union, for three reasons —an idealistic reason, a practical reason and a selfish reason. The idealistic reason is that the EU has contributed to peace and freedom within its member states, and that is something for us to be proud of.
The practical reason is that we are interconnected with our European neighbours. A constituent stopped me on the street and asked whether we would still be able to use the European health insurance card if we came out of Europe. She was anxious because her husband has a particular medical condition and they have to go to a warm climate in Europe every winter. They are protected by the European health insurance card while they are there. That makes a practical difference to her, and she told me that if it were not for the card, they would have to pay an extra £2,000 each time, which would make it impossible for them to go. So practically, it is important that we stay in the European Union.
The selfish reason is that we are better off in the European Union. No one in this debate has challenged the view that there will be a massive economic shock if we leave. Everyone accepts that. Indeed, that fact is recognised by nine out of 10 economists, by the OECD, by the IMF and by the World Bank. There is consensus on that, and it is clear that there will be difficulties if we leave and that jobs and livelihoods will be affected. It is better for our self-interest if we remain in the EU.
The list of businesses lining up to say that they are in favour of remaining in the European Union is vast. It includes Hitachi, J. P. Morgan, GKN, Airbus, Glaxo, BT Openreach and, today, Rolls-Royce. They are joined by 90% of trade unions. Businesses and employers’ and employees’ organisations are in favour of remaining. The EEF, the manufacturers employers association, is overwhelmingly in favour of remaining in the EU because it is good for manufacturing, and as my hon. Friend the Member for Aberavon (Stephen Kinnock) said, the steel industry would face even more challenges if we left the EU.
Kevin Barron (Rother Valley) (Lab)
My hon. Friend is right. After the miners’ strike in the mid-1980s, the running down of coal mining in my constituency and many others in South Yorkshire devastated the local economies, which were fragile even when mining was taking place. Thousands of jobs were lost not only in coal mining but in supply industries. The objective 1 programme, which was introduced in 2000 and ran for six years, put some £2.4 billion into not only jobs and skills but health, neighbourhood renewal and housing. More than £820 million of that came from Europe, and without it south Yorkshire would not be what it is today. Many Ministers travel to places like the advanced manufacturing park, but they would not be able to go there if Europe had not taken the lead in the regeneration of poor areas in the UK. Such places just would not be there.
Nic Dakin
My right hon. Friend is completely right about the power of the European Union in assisting us in regenerating areas of the countries like his so that there can be a renaissance and they can move forward.
I echo the reference that has been made to Siemens, which is an important employer in my region, with a base in Lincoln and developments in Hull. It has said:
“Siemens believes that being part of the EU is good for UK jobs and prosperity and we have concerns about the possible effects of a vote to leave.”
The company is investing in new wind power and renewables, which bring a lot of opportunities for steel. We should not take any risks with that future.
There is a massive choice about our future before the nation. In making that choice, I hope that everyone thinks it through very carefully. We respect the view of the British people, and I hope very much that they vote to remain.
Several hon. Members rose—
Mr Speaker
Order. I am afraid that a three-minute limit will need now to apply.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
I wish to speak today to outline the huge benefits that have been secured by our membership of the European Union and, in particular, the benefits to my constituency and the wider valleys of south Wales. There is no doubt that the choice facing our country next week is the biggest political decision many of us will face in our lifetime. The EU was set up after the second world war and has acted as a forum to bring the countries of Europe together to promote peace and partnership. We have seen a long period of sustained peace during this time, and we should not underestimate the role of the EU in promoting peace across the continent of Europe.
In my constituency, and across south Wales, we have seen huge investment in recent years in transport projects, regeneration and support for training and job opportunities. In the 1980s, the Thatcher Government ripped the heart out of many of the communities in south Wales and left thousands of people on the scrapheap. Following the election of a Labour Government in 1997, and the work done by Gordon Brown and Tony Blair to secure European objective 1 status for the valleys and west Wales, we have seen our valleys regenerated. Working with the Welsh Government, many communities have seen their areas transformed. In the community where I live, local people, the local authorities and others have worked hard to develop a regeneration strategy that secured European funding and regenerated our area. Over the past 15 years, we have seen new employment units, new museums and a new community resource centre, all match-funded with EU funds. These projects were also a catalyst for further investment from the local authority and the Welsh Government.
Merthyr Tydfil town centre has seen huge regeneration, and the area is almost unrecognisable from what it was about 15 years ago. Town centre enhancement has taken place, with the creation of open space with a new town square. The wider county borough of Merthyr Tydfil has seen improved transport links, flood alleviation schemes and village centre improvements. Merthyr Tydfil has a brand-new, state-of-the-art college, attracting and supporting students in a variety of fields. The college has benefited hugely from the EU and continues to do so. When I visited there last October, students highlighted to me the benefits of the Erasmus programme, which supports our young people to study and undertake exchange visits and learning across the EU.
In Wales, thousands of jobs are supported by, or are reliant on, EU funding, and leaving the EU would have a massively negative impact on the Welsh economy. The claims by some Tories that leaving the EU would free up investment for public services is almost laughable. These are the very people who have spent their political lives dismantling public services and creating a smaller state. I do not believe for one minute that they have had a damascene-style conversion. The idea there would be extra investment for public services is just not credible.
As a socialist, I believe that we are always better off together—better off working in partnership with others. We will always achieve more by our common endeavour than we will do alone. I believe that to be the case for individuals, communities and indeed countries. For the sake of our communities and for our standing in the world, the only vote next week, on 23 June, is for us to remain.
Rachael Maskell (York Central) (Lab/Co-op)
The EU is far from perfect—we have heard that today—but that is true of this place, too. The policies that have come out of this place have really impacted on people in our communities, and many of them are finding life tough.
As I have gone through the streets of York listening to people, I have heard them talk about housing and the fact that this Government have not built the houses in which they can afford to live. They are talking about their job insecurity. Some 4.5 million people are now experiencing insecurity at work, and people are really struggling with the cuts to public services. All those issues that people are articulating come from Westminster, not the EU.
I want to consider and draw out these questions. Why is it that those who have always strived for people to have decent jobs and good employment rights; who are against the agencies undercutting workers; and who have always argued for protections around health and safety in the workplace—the trade unions—are arguing for us to remain and reform? Why are those who have always spoken up against inequality, injustice and poverty; who have created the fight against the things that are happening at the moment; and who have always supported our communities saying remain and reform? Why is the Archbishop of Canterbury making the argument? Why is the Archbishop of York, who has just spent six months walking 2,000 miles and listening to people, saying remain and reform Europe?
The environmental movement understands the fragility of our planet, and it is saying that the way that we will change that is to remain and reform. The universities—the brains of Britain—say that for the future of our science base and research base we must remain in Europe and reform from the inside.
We must listen to the forces of good in our country. These are the people who have a history of always standing up for our families and our communities, and they are united in saying remain in Europe, but reform it as we go. They are unlike the Brexiteers—the people who have brought forward the bedroom tax, cuts to the benefits of disabled people, and harsh pension rules, and who have not protected people desperately needing homes. The hon. Member for Uxbridge and South Ruislip (Boris Johnson), for example, slashed social housing plans in London so that the millionaires could buy their assets. These are the people who have also advocated privatisation in the NHS.
We need to stand with those who have always fought for the people of this country. They are the people who are saying remain and reform. History is on their side, and as we face the challenges of our planet today, we need to be in the debate and at the table so that we can form the agenda for the future. We should not be isolated and on our own. Therefore, the only option on 23 June is to vote to remain in the EU.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
I wanted to use my short time to focus on the importance of the European Union to communities in my constituency of Inverness, Nairn, Badenoch and Strathspey, in the highlands and of course in Scotland. There are 175,000 EU citizens living and working in Scotland out of a population of 5.4 million people. We have a problem not of immigration, but of emigration in the highlands. Those people from the EU who work for us are vital to the health industry. They fill skills gaps and help our tourism economy, but they are more than that. These people are not just numbers and EU citizens, but our neighbours, our friends and part of our communities. It is a two-way process. At the moment, both of my sons are working abroad in Europe: one in Germany and one in Spain. Earlier, we heard it said that this is about not immigrants or migrants, but expats when it suits.
Ian Blackford
I am delighted that my hon. Friend has given way. He is making some very important points. Does he also agree that those of us representing seats in the highlands and islands have benefited enormously from the European Union with the investment that is taking place in our roads and our infrastructure? The European Union has been a voice for good, and that is true for our crofters and farmers. All highlanders, along with everyone else, should vote to stay in.
Drew Hendry
My hon. Friend makes a very good point. If not for the 40 years of the European Union, I wonder whether we would have that symbol of progress in the highlands, the Kessock bridge, which unites our constituencies. Given the paucity of investment from the Westminster Government through those decades, I believe that we would not have seen that or many other investments. Just imagine what would have happened there.
The UK’s relationship with the EU is a two-way street. We heard earlier about the European health card. This week I got the great news that Stephanie Inglis, the Commonwealth games medal-winning athlete who was critically injured in Vietnam, is coming home. That is terrific news. She was out there with travel insurance, and the insurance company found a loophole allowing it not to pay. It has taken £300,000 worth of fundraising to pay her bill. Imagine if that accident had happened in the European Union to one of our constituents without cover. That is why it is important that we recognise what we get back.
Between 2014 and 2021 the EU will have invested €192 million in the highlands and islands through the transition programme. We get more out than we put in. The hon. Member for St Austell and Newquay (Steve Double) is not in his seat—he obviously read his badge and took it as an instruction. If he wants to give that money to the highlands and islands, he is welcome to do so. Tourism is a £5.4 billion industry in the highlands, and airfares have been reduced by 40% over the time that we have been involved in the European Union, and budget airlines have become available to us.
The right-wing element in the leave campaign—which is the Leave campaign—wants to get rid of red tape, employment rights and consumer rights. That is the kind of red tape that leave campaigners want to get rid of. The hon. Member for Uxbridge and South Ruislip (Boris Johnson) has spoken of a takeover. He has always had a long-term plan. Today it seems that there is a possibility that he will make Mr Farage a Lord so that he can bypass holding a by-election for him. We know that the hon. Member for Uxbridge and South Ruislip wants a Boris island. On 23 June let us not make the UK Boris island.
Mr David Anderson (Blaydon) (Lab)
I will start as I intend to finish. We need to think what will happen next week if we vote to leave. Who will be driving the Brexit bus? It will not be the hapless Prime Minister or the man who has been described as Pinocchio from No. 11. It will be people such as the Lord Chancellor and Secretary of State for Justice, the man who trebled tuition fees, brought us a Back to the Future school system, took away the education maintenance allowance and destroyed Sure Start, or the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith), who destroyed Remploy, brought in the bedroom tax, gave Atos free rein, cut sick pay, cut jobseeker’s allowance and hit disabled people’s security.
Others who would be on the Brexit bus include the Leader of the House, who privatised probation, sacked 7,000 prison officers, destroyed legal aid, restricted access to tribunals and cut support for personal injury legislation; the new kid on the block, the Minister for Employment, who described British workmen as the laziest in the world and pretends that she will pump billions into the NHS and VAT cuts; the Secretary of State for Northern Ireland, who is risking the peace in Northern Ireland, ignoring the impact on our oldest and closest neighbour, and pretending that we can leave the porous border between the north and the south and still keep out the so-called hordes from Turkey, Syria and Iran; and finally, the clown prince, the hon. Member for Uxbridge and South Ruislip (Boris Johnson), who sold out his friends, his party and his country to move from City Hall to No. 10. His idea of negotiation was never to meet the unions while the tube was in chaos. He is a man who thinks that a funny line puts everything right. Well, I’m sorry—this is no laughing matter. If we want a joker to be Prime Minister, let us vote for Peter Kay.
That is the motley crew who will be in charge if we vote leave next Thursday. Behind them all is the man who has had the Prime Minister on the run for a decade, Mr “Farridge”. These are the people who will be heading off to Brussels with the intention of coming back here and starting this country on a path to deregulation and a free-for-all. They really do want the UK to be the Hong Kong of Europe.
To all those who are confused by the position of my party in the debate, I say, “Be very, very clear. If the Brexiteers win next week, you will need Labour more than ever.” This is the fight of our lives and it is more important than party politics. It is the defining moment of this new millennium. I urge everyone not to make the mistake of getting even with politicians who they think have let them down. I urge people not to let their anger and worries blind them to the reality of where we could end up, and not to let an unprincipled bunch of right-wing deregulators use xenophobia and racism as a front to change the future prosperity and security of this country.
Danny Kinahan (South Antrim) (UUP)
This is the last of my chances over the past few weeks to put the case as an Ulster Unionist that not all Unionists are for leaving—the Ulster Unionist party is for staying in, although it is a free vote for the others. I am proud to be part of the Northern Irish team that wants to remain, along with the Social Democratic and Labour party, the Alliance and Sinn Féin, although we all have slightly different views. As we have heard, we all need to pull together if we are to remain. The public are fed up with the battling, the bullying and the hyping; they just want—in so far as they can—to have the facts on the table, to know how they will be affected and to have a chance to vote. We have to let them decide, and then things fall to us.
I say, as a Unionist, that we all have to work together. My greatest concern in this whole debate is that the Union may fall apart if we leave the EU. If Scotland, as SNP Members have indicated today, does its own thing, Northern Ireland will be stuck out there in the north-west, with Ireland on a different set of rules and Scotland on a different set of rules. We will then be coming to England for help whenever we need it, although I do not want Northern Ireland to carry on holding out a begging bowl.
When it comes to the economy, I am proud to have been on a Northern Ireland Affairs Committee that produced a balanced document, given that seven of its members were for out, and all the others were for in, and I recommend that document to everyone. However, the key point for me was when an Italian hedge funder told me, “It’s all very well for everyone in the south and everyone who is wealthy. They’ll be able to bounce along and succeed on their own if you leave, but everyone else—those who don’t have the strong marketing teams and the funds to expand—will struggle. They will be the ones who suffer.” That is the north, Scotland and all sorts of other places. We need to pull together. The Union should pull together.
The last point I want to make is that, when we go to the Somme and see the countryside and all the graves, we realise that there was not just that war—there was Waterloo, Agincourt and all the other European wars. Our duty is to lead and to be in there, showing people how to do things, pulling them all together, changing what needs to be changed, and not having the bloodbaths we had in the past. That is why I want to stay in.
Christina Rees (Neath) (Lab)
There are great economic benefits from being a member of the European Union, and those are nowhere more obvious than in Wales. I am very proud of the investment that has been made in west Wales and the valleys, but less proud of the fact that we receive this money because we are one of the poorest regions in Europe.
A generation ago, the economic foundations of my constituency were torn apart by the closure of the mines; but visit Neath now and you see a bustling town, with shops opening, businesses starting up and a £13 million town centre redevelopment in progress, due to EU funding. But that image of a bright future is now on hold until a week tomorrow.
Projects financed through our membership of the EU have helped launch 485 businesses, supported 7,300 people into work and created more than 1,355 jobs. Some 14,870 qualifications have been gained, and nearly 5,000 people have completed an EU-funded apprenticeship in Neath County Borough.
Neath Port Talbot County Borough Council is leading with the Workways project, funded through £16.7 million of EU structural funds. The project has tackled barriers that prevented individuals from finding or returning to employment; supported job searches; improved CV-writing and interview skills; and provided access to training. It has also developed links with local employers.
I must also mention the Swansea Bay science and innovation campus, which has had a substantial impact on Neath and the surrounding region. That would not have happened without £95 million of EU funding. I praise the efforts of Derek Vaughan, Labour MEP for Wales and former leader of Neath Port Talbot County Borough Council, and Ali Thomas, the current leader, for creating that project. We are very proud of them.
I would be delighted if the leave campaigners could offer guarantees that in the event of Brexit, structural funds currently provided to west Wales and the valleys would be replaced like for like by the Government—gobsmacked, but delighted. However, like the Welsh First Minister, Carwyn Jones, I doubt that would happen. Yesterday, Carwyn said of the leave campaigners that they
“have no more power”
to make such a promise
“than my children’s pet cat.”
They could do nothing to protect the 100,000 jobs in Wales that depend on our trade. For that reason, I will vote to remain.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
I thank the more than 35 hon. Members from both sides of the House who have made speeches. I cannot mention them all, but I shall highlight a few of the points that were made.
My hon. Friend the Member for Kingston upon Hull North (Diana Johnson) talked about anger at cuts to public services but said that there is no way that leaving the European Union will magically solve that problem. My hon. Friends the Members for North Tyneside (Mary Glindon) and for Sedgefield (Phil Wilson) said that 160,000 jobs in the north-east are reliant on trade with the European Union, with much that comes through European structural funds that create opportunities for jobs, start-ups, and their local economies.
My hon. Friend the Member for West Bromwich West (Mr Bailey) talked about concerns about the impact on our manufacturing industries. My hon. Friend the Member for Bishop Auckland (Helen Goodman) noted the total failure of the leave campaign to set out how any new trade agreement could work.
Seema Malhotra
I am afraid I do not have time to give way.
My right hon. Friend the Member for Cynon Valley (Ann Clwyd) said that our rights are safer if we stand together, and that we should not risk those rights being jeopardised by those who see them as red tape. My hon. Friend the Member for Wirral South (Alison McGovern) said that we need to stay in the single market for our economic prosperity and security, that we should not risk a race to the bottom on working conditions, and that the vote next week is a choice of austerity versus prosperity and influence versus irrelevance.
We are a proud nation—proud of our history, our diversity and our place in the world as a nation that has been at the forefront of progress in science and technology and in politics. I am proud of our place at the heart of the European Union. The vote next week is not just about keeping the world as it is today—it is about how we stand tall with our neighbours in shaping and creating the world of tomorrow, and facing the global challenges of sharing our prosperity and tackling the issues on the environment, tax avoidance and humanitarian crises. Those challenges will not go away if we leave the European Union; instead, we will have fewer allies as we seek to confront them. For our trade, manufacturing and employment, we gain from being members of the European Union. That is why Labour is pro-Europe and the party for reform in Europe. Our message is based on opportunity, hope and fairness—opportunities for future generations and for our economy and society from our membership, now and in the future.
I spoke to a man in my constituency who was conflicted about his vote. His parents were planning to vote leave, but then he asked himself what that would mean for his children. He thought about his children’s opportunities and decided it was vital to get his parents to think again about what their vote would mean for their grandchildren. Why are young people so positive about the European Union? It is because they cherish the freedom to travel, to learn and to experience what Europe and the world have to offer. When young people think about migration, they can see it also in terms of the opportunities it brings for them. Yes, we recognise that immigration needs fair rules and proper controls, but we cannot deny the benefits. Over the past decade, migrants from new EU member countries have contributed £20 billion more in taxes than they have taken in public services and benefits. More than 52,000 EU migrants work in the NHS.
We understand people’s legitimate concerns about the threat to their jobs from the undercutting of wages and the pressure on public services, but that is why we need stronger laws against bad employers and the migration impact fund, which should never have been cut. We need more houses and access to skills and apprenticeships.
I have no truck with those who say that we should choose between the Commonwealth and the European Union. That is absolutely a false choice. When the people and leaders of the Commonwealth nations say that it is in our interest to remain, we should listen to them. Likewise, when young entrepreneurs say that being in the EU has given their businesses the chance to go global overnight, and when scientists such as Stephen Hawking and 150 fellows of the Royal Society say that membership is vital for the future of scientific research, we should listen to them. When the National Union of Students, the Institute for Fiscal Studies, the OECD, the National Farmers Union and many others say that we should remain, we should listen to them.
We are part of plans to create a digital single market in Europe, which will be a huge opportunity for Britain’s tech industry, creating the best part of 4 million jobs and worth €400 billion a year. Many of those jobs and opportunities will be available to this country’s entrepreneurs. Why would we walk away from that? This is what the future of the European Union can offer: more jobs, better jobs and better rights at work.
The European Investment Bank, an EU institution in which Britain holds a sixth of the shares, is the world’s largest international public bank and it is directly owned by member states. In the past 10 years, the bank has invested more than £40 billion in UK infrastructure. Last year alone, the UK received £5.6 billion from the EIB to help regenerate communities and invest in infrastructure up and down the country, with projects such as campuses in Swansea and Belfast and the technology and innovation hub at Strathclyde, and £250 million went to Northumbrian Water.
Let me be clear: I do not wish to scaremonger, and no one should vote based on fear, but people must vote with their eyes open to the risks. I have been asking businesses what makes Britain an attractive destination to invest in, and companies tell me time and again that they choose to invest in Britain because of our language, inclusive culture, heritage and world-class education system, but a key compelling factor is because it also provides access to European markets and, through them, to the rest of the world. That pull factor will disappear overnight if we walk away from the European Union.
Seema Malhotra
I will not give way, I am sorry. The right hon. Gentleman has already spoken today.
Just today, Rolls-Royce, a world-leading company, has joined other companies in making it clear to staff that a leave vote would be detrimental to their company, because uncertainty would put investment decisions on hold. I believe that businesses need to be as bold and forthright in public as they are in private, sharing with their employees the same analysis as they share with their shareholders about the impact of a leave vote.
This referendum must be about more jobs, better jobs and better rights at work. What would it say about Britain if we were to leave? What would it do to the reputation of a nation that has done so much to shape attitudes, culture and institutions across the world if we were to walk away from our closest neighbours? That goes against all that we have stood for as an open and progressive nation.
We know that the European Union is not perfect, but this is an argument for reform, not for walking away. A vote to remain is a vote for stability and security for all our citizens in an increasingly uncertain global world. It is a vote to remain part of the world’s biggest trading bloc, with safeguards for the environment and protection for consumers.
We achieve much more by our common endeavour and by working together. When we look around the world, the achievements of the European Union must not be taken for granted. Sometimes, in the words of Joni Mitchell,
“you don’t know what you’ve got till it’s gone”.
We know that the European Union is not perfect, but we should be leading, not leaving. I urge all hon. Members to join us in the Aye Lobby tonight.
The Chief Secretary to the Treasury (Greg Hands)
It is my privilege to bring this most timely debate to a close. This is, of course, the final word from the Government at the Dispatch Box before the British people go to the polls next week to make one of the most important decisions about the future of the United Kingdom in the modern era. For many people, this is the biggest political decision that they have ever had to make. Indeed, I was only nine years old at the time of the 1975 referendum.
This is not like a general election. It is not just a choice for the next five years. There is no going back from the choice that we make, as a nation, next Thursday. A vote to leave would be irreversible. There is no “try before you buy”, and there are no returns. That makes it all the more important that we make the most of the opportunities, such as this debate, to look again at what is really in the interests of everyone in the UK.
I thank all Members for their contributions. In closing the debate, I want to be very clear about my conviction that the UK is far better off as part of the European Union than outside on our own. There have been 53 speakers today, 46 of whom have supported Britain’s staying in Europe, many of them passionately so. I cannot mention all of them, so I will refer briefly to four—two from each side.
First, my hon. Friend the Member for Aldridge-Brownhills (Wendy Morton), in a moving and important speech, declared for remain here on the Floor of the House. I commend her for making the right choice. In the interest of fairness, let me briefly mention one of the speeches against the motion, of which there were not many; there were seven in all. I did not agree with the arguments made by my hon. Friend the Member for South East Cornwall (Mrs Murray), but she made extensive references to Looe in her constituency, where I spent many happy years as a child growing up, and it was great to hear references to places such as Pengelly’s fish shop.
I will mention two speeches from Labour, by the hon. Member for Kingston upon Hull North (Diana Johnson) and the hon. Member for Newcastle-under-Lyme (Paul Farrelly). Far be it from me to suggest how Members should campaign in their constituencies on the matter, but I thought both of them did well to mention the local businesses, local jobs and local facilities that would be under threat from a vote to leave the European Union. I have to mention that the hon. Member for Newcastle-under-Lyme and I were both migrant workers in the 1980s in West Berlin in the Feinschmecker-Etage of the Kaufhaus des Westens.
I want us to remain, and I say that as someone who is not blind to the faults and the flaws of the European Union. Being critical of the EU does not mean wanting to leave the EU; it means wanting to keep enjoying all the benefits it has to offer while continuing to fight for the best interests of the UK in Europe. If we choose to stay, we can have the best of both worlds. We will never be forced to join the euro, and the deal struck by the Prime Minister in February means that our rights as a country outside the eurozone will be protected, as my hon. Friend the Member for Bromley and Chislehurst (Robert Neill) said. We will have no membership of Schengen, no ever-closer political union, greater control over welfare and greater control over the pull factors for migration.
Crucially, we will also be at the heart of the single market, which is improving in the areas of services, capital, energy and digital. We will have a seat at the table when the rules affecting us are set. We can trade freely with half a billion people inside the EU. As part of this huge trading bloc, we have gained much better deals with other countries across the globe than we ever would have done had the UK been sitting at the negotiating table alone.
Greg Hands
I do not have the time. I am sorry.
Today, we have seen yet further proof that the UK’s economy is on the road to recovery. We have the highest employment level on record. Unemployment is at its lowest since 2005, the year I first entered Parliament. We can be proud of what we have achieved. However, we are putting our hard-won recovery in jeopardy: with one enormous leap into the dark in just eight days’ time, we risk throwing it all away.
I care about facing up to the facts. It is only right to examine what voting to leave might do and, frankly, we should be concerned. In the Treasury, we have done a lot of work to understand what leaving the EU might mean for this country. One study of the short-term impact of leaving suggests that if we vote to leave, we could be pushing ourselves headlong into a recession within a couple of years. In fact, compared with remaining, we might well see a rise in unemployment of between 520,000 and 820,000; a fall of between 12% and 15% in the value of sterling; a decrease in GDP of between 3.6% and 6.0%; and increased borrowing of anything up to £39 billion, which is the equivalent of a third of the NHS budget each year. Some people say, “So what?” Others say, “This is a price worth paying.” For the vast majority of people in this country, however, these things—they are just what will happen in the immediate aftermath—really matter.
We have debated employment rights quite a bit and heard about the benefits of the EU in creating and guaranteeing them, but no one among the leavers has been quite clear about which of these rights would be guaranteed if we leave. So many questions have been left unanswered about what Britain might be like if we left. Of course, there is also the possibility we might still just have to follow any regulations handed down by Brussels, but, crucially, with no choice or influence over what they are. Norway is a clear example: it is required to comply with EU legislation, such as the working time directive or the agency workers directive, in exchange for access to the EU market, but, crucially, with no vote on the decision making.
It is also unclear how leaving the EU could be better for our businesses and for our trade, because the world in which we live and trade is more globally interconnected than ever before. All the alternatives to EU membership would represent a huge step backwards in terms of trading with the EU and, I believe, with the rest of the world as well.
It is the sheer number of uncertainties about leaving the EU that is so concerning. People desperately want to know what leaving would really mean. What would our relationship with the EU be? Would we have access to the single market, and if so, on what terms? What about our trading relationships with other countries. and what happens to all the laws and rules we have that come from the EU? Resolving such questions will be intricately complicated—so much so that it is doubtful whether negotiations would be completed after a decade, let alone in this Parliament. Let us think about that for a moment: where will our lives be in a decade’s time? Let us think in particular about the young people whose futures also lie in the balance on this decision: where will they be after a decade?
Our economy is growing once more. In my view and that of the Government, that is not an accident. It is the result of the sacrifices we have all made, and the parts we have all played in fixing the economy. A vote to leave, with all the uncertainties that surround it, will put all of this country’s hard work at risk. Let us listen to our global allies such as the United States, Canada, Australia, Japan and Germany, and indeed to businesses based in this country—not just our major financial corporations, but the smaller companies that rely on exporting to the EU market. It is clear to me, as it is clear to them, that it is by remaining in a reformed European Union that we can keep growing, not bring about a recession of our own making; keep creating jobs, not jeopardise people’s livelihoods; and keep attracting investment, not lose out to our international competitors.
As I said at the start, this debate represents the final opportunity for this House to look at this vital question. This is not about the narrow interests of any one political party; it is about coming together in the national interest. If, like me, the House believes Britain is stronger, safer and better off in the EU, I urge it to support this motion.
Question put.
Business without Debate
(7 years, 10 months ago)
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Tees Valley Inward Investment Initiative
(7 years, 10 months ago)
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Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
Lord Heseltine’s report “Tees Valley: Opportunity Unlimited” was written to explore the possibilities of transforming the SSI steelworks site and attracting internal investment into Teesside. Unfortunately, I do not believe it offers the comprehensive plan that was promised. Instead, it recycles many proposals that have already been published or suggested by the combined authority and the local enterprise partnership. I hope the Government will pay more attention to those aspirations now that they have been endorsed by the former deputy leader of Conservative party, but few marks can be given for originality.
As we all know, the SSI steelworks closed in autumn 2015, and as a result 5,000 jobs were lost directly or indirectly. Government inaction over the Chinese dumping of cheap steel in the UK market, high energy costs and a lack of infrastructure helped contribute to the steel crisis that made the report necessary. From reading it, however, we would think that the economic impact of the closure had all but been dealt with. Specifically, Lord Heseltine claims that employment levels have recovered since the closure of the steelworks. Not in my constituency: unemployment has increased by 23%. In the constituency of Redcar, where the steelworks were located, unemployment has increased by a staggering 43% since September 2015. It is not acceptable to ignore those facts, or to deny the reality that many of my constituents are facing in trying to find a job. I believe it is right that Lord Heseltine paints a positive picture of Teesside’s future, but he cannot gloss over the fact that the heart of Teesside’s economy, the steelworks at Redcar, has stopped beating on this Government’s watch. Nor must we forget Caparo in Hartlepool or Air Products or the many redundant offshore workers returning to the Teesside conurbation.
Lord Heseltine’s report talks about the steel industry solely in the past tense, as if it was some relic rather than the industry with huge potential that we know it to be. Thankfully, the remaining steel mills in Teesside, including Skinningrove in my constituency, still produce high-quality long products. With the right Government backing, the steel industry has a genuinely long-term future on Teesside and in the UK.
Unfortunately, the report offers no serious recommendations to secure the future of the steel industry in Teesside and the UK, and this at a time when the future of the 25, 42 and 84-inch tube mill in Hartlepool is still uncertain. The Government are now finally attempting to respond to the steel crisis, in part due to the hard work of Teesside MPs. I hope that the remaining steel mills on Teesside that still have uncertain futures are not neglected by the Government in the way the works in Redcar were, and I urge Government action to secure the long-term future of the remaining works, despite the fact that the report fails to suggest any.
Mr Iain Wright (Hartlepool) (Lab)
I pay tribute to my hon. Friend for the fantastic work that he has done to ensure a viable future for the steel industry. He was kind enough to mention the pipe mills in my constituency. Can he reassure me that we will be talking up the steel industry in the north-east to make sure that it has a viable future we can be proud of as part of a modern, dynamic manufacturing supply chain?
Tom Blenkinsop
I thank my hon. Friend for raising that point. The Greybull deal for long products, which covered Skinningrove in my constituency, the beam mill in Redcar and of course Scunthorpe, took 18 months of hard work and negotiations to help the Government help the industry come to a deal. It meant assisting Tata in releasing the assets so that we could get not just a buyer but a responsible buyer. As we know, the initial purchaser was seen in a suspicious light in Government circles, as well as in Opposition circles, but eventually, given time, we were able to get Greybull in and formulate a new British steel company. Something similar needs to be done for strip and speciality steels as well as for tubes, for Hartlepool and, further down the road, for Corby. There has to be a national strategy that interacts with local agencies.
Although SSI TCP has gone through a hard closure, much related industrial expertise remains in the region. Specifically, the Materials Processing Institute in Grangetown uses world-leading research to develop innovative approaches in the materials processing and energy sector. Last week, the MPI welcomed representatives from the Slovakian steel industry who wanted to learn how to improve and innovate in their steel industry. That came after recent similar visits from Swedish and German Government representatives.
Another institute harnessing the UK’s expertise in this area is TWI, which not only exports knowledge and experience but trains more than 25,000 students each year in testing and researching welding and inspection technologies. Those are, of course, linked to the tube mills. TWI has offices around the UK, including in Middlesbrough. If the Government were to invest to unite and strengthen those institutes, steel in the UK could leap ahead of our global competitors. I have previously advocated the Department for Business, Innovation and Skills taking advantage of that expertise as a way to secure investment and harness expertise to give our industries the edge over competitors, which would make the term “northern powerhouse” more than just words.
I turn to the site itself. Lord Heseltine recommends that responsibility for it be passed to the mayoral development corporation as soon as possible. There are significant costs associated with reclaiming the site, and I am concerned that without additional funding from central Government, much of the corporation’s budget will be consumed by those costs. The clean-up costs at previous sites, such as Ravenscraig and Corby, ran into the tens of millions. I note that the report requests that Her Majesty’s Treasury pay for any further assessment needed on the site. Will the Minister outline what the Government contributions to the costs of regenerating the site will be? A cast-iron guarantee of long-term regeneration funding from the Government is necessary to secure private and commercial investment in the site.
We also need funding for an investigation into whether the existing blast furnace has a future—that has to be nailed down—and into the existing mills on the SSI site, whether the continuous casting plant or the basic oxygen steelmaking plant, because those assets could be reused. At the moment, under the official receiver, their future is unclear. For example, I know from local knowledge that the locos on the site, without which nothing can be moved on a 3 square mile site, have been cut up and sold off. We want a potential buyer to come forward to reuse the site for industrial purposes—hopefully steel, but we are not choosy as long as it is used for some form of industry. Removing the assets, cutting them up and selling them off undermines its ability to be resurrected.
That leads me on to the future use of the site. Helpfully, a large part of the former steelworks, earmarked for a second blast furnace and plate mill in the 1970s, is still empty and relatively clean. In my view, the prairie, as it is known, should be earmarked for job-creating development early in the process. With good access and links to the still existing deep-water terminal, it could be a prime area for warehousing and distribution. Indeed, it could have a manufacturing dimension if the Government were to revisit an earlier but rejected proposal by the combined authority, which was for the whole area around Teesport, including the SSI site, to be designated as a free port. That could mean tax-free status for the land, allowing the importing of raw or semi-finished materials that could then be fashioned into final products for possible re-export. The idea was turned down flat, as I understand it, by Her Majesty’s Revenue and Customs. If there is the will, it is one suggestion that the Chancellor could prioritise.
I turn to the recommendations that Lord Heseltine makes about boosting investment in the Tees valley. He rightly highlights the importance of transport to building the economy, but Government action does not seem to be aligned with his thinking. In answer to my question on the report’s recommendation to extend the trans-Pennine electrification scheme to include the Northallerton to Teesport line, the Minister confirmed that the line would not be included in the scheme and that its electrification would not be considered until after 2022. On top of that, on the day after the report’s publication, a clause was added to the Government’s Bus Services Bill limiting the ability of councils to run their own bus services, despite the fact the report states explicitly that local leadership is the key to boosting transport infrastructure.
We are therefore presented with the absurd situation of a Conservative Lord publishing a review commissioned by the Department for Business, Innovation and Skills, which makes proposals on transport, yet within days the Department for Transport contradicting or ignoring the report. I hope the Minister and the Department for Transport will present a united response to the report that provides Teesside with the infrastructure it needs to boost investment.
On the energy economy, Lord Heseltine rightly praises the work done so far to build the industry in Teesside. I hope that the Department of Energy and Climate Change will continue to work with local partners, in line with the approach outlined in the devolution deal. Lord Heseltine also rightly asks the Government to clarify their position on the carbon capture and storage industry. Their decision not to proceed with the CCS commercialisation competition has left a lot of uncertainty about the future of the industry. I asked for clarification of that point in April, and my hon. Friend the Member for Stockton North (Alex Cunningham) received an answer as recently as 1 June stating that the Government would set out their approach to CCS “in due course”. That is not good enough for Lord Heseltine; it is not good enough for me and my constituents; and it is certainly not good enough for potential CCS investors in Teesside, including existing energy-intensive industries. I hope a statement on the Government’s approach to the industry, which will only grow in importance in my constituency, will be presented soon.
I will finally highlight areas that I believe are vital to Teesside but are not touched upon by the report. As on steel, the report fails to make serious recommendations on mining, which employs hundreds of people in my constituency. Unfortunately, at one mine in my constituency, up to 250 of the 1,000 strong workforce were made unemployed at the beginning of this year. People are losing jobs that are vital to the east Cleveland economy, leading to some terrible and tragic consequences, with redundancy processes happening in the lead-up to Christmas last year. There is nothing in the report to help those people or to promote investment in a new mine, despite the fact that new mining locations are being developed by Sirius, for example. Logistics is another growing industry based around Teesport that is neglected in the report. I hope that Government action will extend to supporting that sector, too.
Put simply, the report is not good enough. It asks the Government to “consider”, to “make assessment for” and to “take account of” all sorts of things, but it does not call for clear action and Government support to keep our steel industry alive, regenerate the SSI site and make us the world leader that we know we can be. Without the action that is needed, I am afraid that under this Government and with these empty recommendations, the Hercules of Teesside will remain an infant.
Perhaps the Minister will be able to assuage my fears and commit the Government to the following: providing additional resources to the mayoral development corporation to ensure that its role in not limited to maintaining the SSI site but includes renewing its potential; re-evaluating the free port proposal for an area including the SSI site; acting to support the remaining works in Teesside and actively exploring how skills in institutes such as the MPI can give the industry a secure footing; setting money aside to fund an additional road crossing over the Tees; re-examining the proposal to include the electrification of the Northallerton to Teesport line in the trans-Pennine scheme; prioritising the Tees valley in the roll-out of the national teaching service, given Lord Heseltine’s criticism of educational establishments in the area—that should include addressing parity of school funding not just for Teesside schools, but for schools throughout the north that are not receiving as much as those in the south; continuing to commit resources and support from the Department of Energy and Climate Change to the energy sector in Teesside; and developing a new plan to support carbon capture and storage in the Tees valley.
If the Government cannot even commit themselves to implementing the recommendations in the report, it will have been a complete waste of time and money. Can the Minister tell us how much it has cost the taxpayer to produce a report that is full of proposals on which, apparently, the Government do not currently wish to act?
I hope that the review, and the comments that I have made today, will not be forgotten as a result of their proximity to next week’s referendum. Whatever choice the people of the Tees valley make on the European Union, Teessiders will need to see more action from their Government than they have seen so far.
The Parliamentary Under-Secretary of State for Communities and Local Government (James Wharton)
I congratulate the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) on the broad thrust of his speech. I think we can all agree that Teesside is a wonderful place that provides incredible opportunities, and that we should now focus on how those opportunities can best be delivered.
The Tees valley has many great strengths. Teesside contributes more than £12 billion to the national economy each year. Its rate of new business creations is higher than the UK average, and unemployment has fallen from about 31,400 in December 2014 to 27,000 in December 2015. However, that does not mean that it has not faced real challenges, of which the hon. Gentleman gave specific examples. He also gave us his thoughts on both the work that has been done and the work that still needs to be done to overcome some of the difficulties that our economy has faced.
The Tees valley economy has been growing for some years, but it has certainly faced difficulties. We must now focus on what is great about the area—what we can sell and what we can talk about, and how we can promote the economy to those who might wish to invest in it—but also on how we can gain the maximum benefit, and unlock the potential that exists. There is some good news. In February, Lord Heseltine and I attended PD Ports’ launch of its new £35 million redevelopment and expansion. In March, Cavitech opened its new office. Nifco, a company in my constituency, has expanded into two new facilities over the past four years. On Friday I opened the new offices of Odyssey Systems in Stockton, which means the provision of IT services, the creation of jobs, and investment in the Tees valley. There is, in fact, a great deal of good news, but there are also those challenges, which still need to be addressed.
Lord Heseltine’s report is an important part of the process. It is an important step in the journey towards both identifying opportunities and addressing them when we are able to do so. It is an independent report: although it was commissioned by the Government, it does not set out the Government’s position any more than it sets out the position of the local authorities, businesses and universities that contributed to its production. It contains a wide range of recommendations, many of which have been broadly welcomed, although there is, of course, debate about how some of the challenges that it identifies should be addressed. That debate is welcome.
The hon. Gentleman made clear his views about what night be done in future. I shall be happy to work with anyone who has the best interests of Teesside and the Tees valley at heart, to consider any specific recommendations and work with the Government to establish whether they should be delivered, and, if we conclude that they should, to ensure that that happens whenever possible.
Teesside has a complex local economy. We have experienced the great shock of the loss of SSI in Redcar and its impact on the economy—not just the impact on those who were directly employed, but the impact on those in the supply chain. We are left with a site which is in itself challenging, given the need for remediation, investment and support to bring employment back to the area, but which is also part of a bigger picture along the banks of the Tees, speaking not just to a glorious industrial past but to the incredible potential for a brighter future. That is why I very much welcome and support the establishment of the mayoral development corporation in its current shadow form. It is populated by some well-informed and capable business people and the leaders of our local authorities. It is bringing together many of those who want to make a contribution to the future of the Tees valley economy, and it has a remit that stretches further than the SSI site, which looks down the banks of the Tees, to what can and needs to be done.
The hon. Gentleman is right that a great deal needs to be done. We are still in the early stages of dealing with the official receiver, who has a job to do. Government and the board and the GovCo that sits under the Department for Business, Innovation and Skills are talking to the official receiver about the best way through the process, to give us the best chance of making a success of the site that is left at the end of those discussions and, at the end of that, when it is handed over fully to Government. We are in talks with local businesses about identifying opportunities, and work needs to be done to understand the needs of that site and to understand the clean-up, the infrastructure potential and the opportunities to attract investment. That stands at the heart of the issue we are here to discuss today: the investment we want to attract to Teesside.
In Lord Heseltine’s work in the Tees valley in recent months, he has worked with UK Trade & Investment to identify where Government can assist in bringing investment to the area, and to identify those potential investments that will help to drive regeneration and create jobs. I welcome that work and I know he is looking to support it where he can, and I have had discussions with a number of potential international company investors who could bring jobs and work to the Tees valley. I know that work will need to continue if we are to ensure employment is brought to that former site and into the broader area over which the development corporation will operate. This will go hand in hand with the Government’s programme of devolution.
Tees valley is at the forefront of the devolution agenda and will be one of the first areas to have elected a new metro-mayor, in May next year. It has agreed a deal with Government, but I want it to go further—to agree more, to take more control and to take more powers from central Government so they can be exercised closer to the people who are affected by the decisions the new mayor would be able to make for that local economy. None the less, it is on that journey and those talks are under way.
The hon. Gentleman spoke of areas of industry that he felt needed more attention than they have perhaps been given in the past. I can assure him I have had numerous meetings with Sirius to talk about the mining potential not just from its investment in north Yorkshire, but also through into the Tees valley, and the difference that can make to our economy locally and the jobs it can create.
The hon. Gentleman talked about logistics, which offer a huge opportunity for the Tees valley. The port is a great asset, is one of the largest and most successful in terms of tonnage in this country, and it is already making a significant contribution, but I have no doubt that it can do more and should be supported to do so.
Mr Iain Wright
The Minister mentions industries and sectors and I want to mention two more in which we have comparative advantage: the processing chemicals industries, with NEPIC leading; and the great potential in the offshore wind supply chain cluster. What tangible steps will the Minister and Government take to ensure we can accentuate the positive and fulfil the potential of these industrial sectors?
James Wharton
The hon. Gentleman makes an important point. Teesside is of course internationally respected for the chemical processing industry; not just NEPIC but CPI and the work done in that sector provide good jobs, long-term investment and real opportunity to attract more. We always want to continue to support that. As part of the process of looking for international investors, we are looking to support those organisations to see where more investment can be brought in. The chemicals and processing industry will form part of the story going forward of the sites that the MDC will become responsible for and the work it is doing.
Tom Blenkinsop
The Minister mentions CPI and its importance to the local and national economy. Can he comment on my question about MPI and the steel catapult: do the Government intend to go forward with that? In our area we have the capability of R and D closely associated with the former blast furnace. That could provide the inward investment necessary to get that industry going again in our locality.
James Wharton
I will come on to talk about that. I just want to address the second part of the question from the hon. Member for Hartlepool (Mr Wright). He asked about offshore wind, and significant approvals have been given for offshore wind not far off the coast of Teesside. This will present a real opportunity to bring investment to our area. I know that live discussions are taking place with companies in the Tees valley about how they can be part of that supply chain and bring jobs and investment to our area through being part of the processes of delivering that potential driver of our economy. I have had discussions with some of those local companies, and I am supporting them as far as I can. Some of the discussions are of course commercially sensitive, but I also want to extend a direct offer, particularly to the hon. Gentleman, given his constituency’s interest in the matter. If there is something specific that a company in his constituency would like to see done, if there is a meeting that it would like the Government to attend, or if there is any assistance that I can give, he need only call on me to arrange it. If the Government can support or help, I will join him and do everything I reasonably can to persuade people to take the right decisions.
The hon. Member for Middlesbrough South and East Cleveland asked about the Materials Processing Institute. There is a bid from that organisation for a catapult similar to the one we have already mentioned, but my understanding is that that bid is not sufficiently strong at this time. However, despite that having been the initial decision and recommendation by officials, it is my intention to ask the Secretary of State for Business, Innovation and Skills to look personally at that and to ask officials whether improvements or changes could be made that would enable that to be delivered.
The Government have to take these decisions on a sound basis, and they have to assess things fairly, wherever in the country they might be, but if there is potential and opportunity, it is important that we ensure that that has been explored to the fullest degree. If there is something that can deliver benefits and improvements to our area and bring investment and jobs to our communities, I want to see it explored and every avenue considered—certainly before any negative decision is made—in the hope that a positive decision might be forthcoming. I am happy to give a commitment to ask for that work to be undertaken, and I will do so following the debate this evening. I do not know what the outcome will be, but whatever happens with the individual projects of which we have spoken and with the individual recommendations in Lord Heseltine’s report on the economy of the Tees valley, we have great potential and I am confident that we have a great future.
The Evening Gazette newspaper is running an Invest in Teesside campaign, recognising that the more we talk up our area and highlight the opportunities that exist there, the more we can jointly achieve and drive forward for the benefit of its economy. I look forward to working with hon. Members across the House—indeed, I have little choice other than to make that offer in relation to the Tees valley. I look forward to working with the Evening Gazette, with local businesses, with the local enterprise partnership, with the new combined authority and with the mayor—when they are elected next year with the exciting range of powers that they will have, whoever they might be—to drive forward investment in Teesside.
Our area is very well placed to profit from many of the exciting things that are happening in the world and from the great skills of the people who live in our communities. We have a duty to work together to deliver on that, but that does not mean that the Government will acquiesce in every request, or that we will do everything that is asked of us immediately. It means that we will properly assess and consider the situation, and think long and hard about the right approach to take. We will build a broad consensus on what can be done for the good of the economy of our area. That work is well under way, as we can see in the mayoral development corporation and in the devolution deal that has been agreed. I hope we can also see that in the tone of this evening’s debate.
Tom Blenkinsop
I repeat a question I asked in my speech about an investigation into the remaining assets on site at SSI, including the continuous casting and basic oxygen steelmaking equipment. I also asked whether there would be an investigation into the blast furnace itself. This is important because it would enable us to establish the degree to which the assets might be redeemable or saleable. It would also give the official receiver an instruction about how those assets could be used in future.
James Wharton
Given the specific nature of the hon. Gentleman’s question, I will seek to address it. The site is in the hands of the official receiver, and the Government are talking to them. We are working to ensure that the site is handed over in the best possible circumstances that can be achieved, given its sad recent history, and when that happens we will of course seek to maximise the use of all the site’s assets and the land, including any assets that remain on it. That will primarily be channelled through the development corporation, which will drive that process. It is in all our interests that that proper work is done in the appropriate way and at the appropriate time.
I am absolutely confident that the Tees valley has a bright future ahead of it. We have the most incredible people, businesses and opportunities. Given the things those people and businesses are doing and the way in which the leadership in the private and public sectors is pulling together in the interests of the broader local economy, these could be exciting times. We have faced a difficult year, but I hope that by working together we can ensure a brighter future for all our constituents.
Question put and agreed to.
Deferred Division
(7 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Deferred Divisions
(7 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
The House divided: - Ayes: 278 / Noes: 4 - Question accordingly agreed to.
Town and Country Planning (General Permitted Development) (England) (Amendment) Order 2016
(7 years, 10 months ago)
General CommitteesRead Full debate Read Hansard Text
The Committee divided: - Ayes: 8 / Noes: 4 - Question accordingly agreed to.
Teresa Pearce (Erith and Thamesmead) (Lab)
I beg to move,
That the Committee has considered the Town and Country Planning (General Permitted Development) (England) (Amendment) Order 2016 (S.I. 2016, No. 332).
It is a pleasure to serve under your chairmanship, Mr Nuttall. I am pleased to be here, standing in for my hon. Friend the Member for City of Durham (Dr Blackman- Woods), who is unfortunately indisposed and unable to be here this week.
The Minister will be well aware of Labour’s long-standing concerns about the extension of permitted development rights and change of use, along with our dismay at the continual use of statutory instruments to make significant changes to planning legislation by both this Government and the previous Government, of whom he was a member. I am glad that our prayer against this statutory instrument was successful and that we have an opportunity this afternoon to discuss it.
The Minister will recall on a number of occasions my hon. Friend the Member for City of Durham telling him and the hon. Member for Grantham and Stamford (Nick Boles), in his former role in the Department for Communities and Local Government, that we are totally against the extension and relaxation of the permitted development rights system, because it takes away the ability of local people and their elected representatives to have their say. Let me make it clear that we are not against change of use per se, and we fully recognise the need for many more additional homes. We want additional housing for all tenures to be developed in a sustainable and appropriate way and in consultation with local people. Unfortunately, we believe that this statutory instrument flies in the face of that objective.
In the specifics of the order, there are several areas on which I would like clarification from the Minister. Article 3 appears to introduce a requirement that the Secretary of State reviews the operation and effect of articles 1 to 7 of the Town and Country Planning (General Permitted Development) (England) (Amendment) Order 2015 every five years. Labour has argued for that in the past and we would welcome such a review, providing it leads to meaningful action if there are problems within the operation of these articles and it is not just a box-ticking exercise that will be ignored.
Article 4 changes the working of the general permitted development order to clarify that the relevant boundary is opposite the rear wall of the residence being enlarged and it is probably a helpful amendment, but the fact that the Government need to clarify matters at this level of detail shows that allowing building through permitted development rights often throws up problems that need to be micromanaged by central Government, which would not occur if planning were done properly through the local authority planning system. The statutory instrument includes in article 5 the provision to include land as well as a building in a change of use from class A1 to A2. This change presents some real concerns that the Minister can perhaps address. Is there any limit on the amount of land and on what can be done with it? Will it be permitted to build on it? Given that the change is from A1 shops to A2 financial or professional services, could a car park be built on it?
Before I go on to look at the details of articles 6, 7 and 8, all of which relate to specific changes of use, I point out once again that we are not against change of use in general, and councils should be able to use it sensibly to plan their high streets. Sadly, with much permitted development in place, this is becoming increasingly difficult. Similarly, planning to increase housing supply should be undertaken through the proper planning system and not on an ad hoc basis through permitted development.
Article 6, which allows for laundrettes to change to residential use, is a case in point, particularly in London. It might be sensible to change a laundrette to residential use, but it might not be, as local community might rely on the laundrette to provide a service that they cannot get elsewhere. Will there be any consultation of local people about what their community needs? The Minister will know that the current prior approval system makes no allowance for this.
In article 7, the temporary permitted development right of change of use from office to residential is made permanent, which frankly dismays us. Surely the Minister can see that the reduction of office space without consultation from the local authority and local people is not only inherently anti-localist but could have serious impacts on the local economy. If a council is looking to regenerate its area by attracting businesses, office space is vital. If a local business wants to expand and cannot find the appropriate space, their ambitions will be stifled and they might take their business out of the area. We would welcome some comment from the Minister on whether he might recognise that or consider putting some kind of cap on the amount of office space that can be converted to residential use.
One element of article 7 that we welcome cautiously, and that Labour has long pressed for, is the condition that the noise impacts of the surrounding premises on the intended occupants of the new developments be taken into account. However, we have reservations, so perhaps the Minister will clarify. Will it work both ways? If there is an office or building that would be disturbed by noise from a new residential development, will that be considered? Similarly, if there are venues that are sources of noise in the area, such as live music venues, and development is still permitted, will those venues be protected from noise complaints from the residents in future? We discussed that during the passage of the Housing and Planning Act 2016.
Like article 7, article 8 gives temporary permitted development rights for change of use from light industrial to residential use. Again, will the Minister say how we can be certain that buildings of light industrial use will not be needed or be part of a local authority’s economic regeneration strategy? Although we welcome the additional element of prior approval that looks at how pre-existing businesses or distribution services would be affected by changes, why is that not extended to include the impact on the wider community or applied to other change of use permitted development rights, such as those in articles 6 and 7?
We are not the only people to have raised those issues. London Councils and others have raised all of them and more, including the resulting increases in office rents, the loss of occupied space and the loss of new affordable housing supply. They also expressed confusion over the article 4 direction, which allows them to suspend permitted development rights. Will that still be allowed to apply in those areas? The Minister will know that it is a very cumbersome process, and that the Secretary of State retains the right to modify article 4 directions, massively limiting the possibilities for their use. Nevertheless, we would like to know whether local authorities will be able to apply for exemptions, and if so on what grounds. Will the Secretary of State simply override all suspensions of office to residential change of use?
Article 10 seems to demonstrate that the Government are prioritising quantity over quality by requiring a developer that is changing a building to residential use to supply the local authority with the number of residences that will come from the development as part of the application to determine whether prior approval is required. We should focus on how appropriate new developments are for an area and on whether they are of the right tenure to meet local needs, as well as simply adding to supply. That can be done through the proper planning system. Article 11 gives temporary permission for commercial film making. We take no issue with that, but I would like clarification from the Minister about what safeguards will be in place to protect the local community and ensure that there is no lasting damage.
Finally, articles 12, 13 and 14, all of which relate to permitted development for mineral exploration, demonstrate how reluctant the Government are to allow planning changes that have potentially enormous and wide-ranging implications to be scrutinised properly. The three articles, subject to conditions, enable the drilling of boreholes for monitoring and investigative purposes in respect of petroleum exploration to be carried out for the purposes of groundwater monitoring, seismic investigation and monitoring, and location and appraisal of mine workings.
I note that there is a requirement for operators to notify the Environment Agency and drinking water suppliers when undertaking the drilling of boreholes, and to notify the Coal Authority of boreholes drilled for the purpose of locating mine workings, but although there is a limit on how near to an occupied building, hospital or school an exploration can be—no closer than 50 metres—there is no similar requirement to inform residents that development is being undertaken. It therefore appears that local communities will have very little say in whether the initial monitoring activity goes ahead. Will the Minister say whether that is simply a mistake by omission, or whether the Government have good reason to think that parents, teachers, doctors and patients need not be notified about these activities, when they could be happening just 51 metres away?
On the commitments to clean up within 28 days after the activity, what assurances will be put in place to ensure that developers comply or are able to comply? For example, what assurances will be sought from companies to ensure that they have the financial security to be able to comply after the event?
Labour has long called for a complete moratorium on fracking underneath areas of environmental sensitivity, such as national parks, areas of outstanding natural beauty, sites of special scientific interest and all levels of water protection zones. In the order, the Government have protected a number of those areas and we welcome that concession. Crucially, however, fracking underneath protected groundwater sources is still allowed, provided it is more than 1,200 metres below. Why is that the case when we do not know the long-term impacts on the water, and by extension, on public health? We ask the Minister to put a hold on exploration under groundwater sources, either indefinitely or at least until we know more about the long-term consequences.
Teresa Pearce
I have almost finished, so to give the Minister time to answer I would rather not give way.
We are concerned that the Government are trying to avoid proper scrutiny from MPs and from the country by enacting potentially enormous, significant changes to our planning system through a negative statutory instrument. I and, I am sure, my hon. Friend the Member for City of Durham look forward to hearing the Minister’s answers to my questions.
The Minister for Housing and Planning (Brandon Lewis)
It is a pleasure to serve under your chairmanship, Mr Nuttall. I look forward to hearing other colleagues’ contributions in the next few moments, and I also wish the hon. Member for City of Durham a speedy and full recovery. For many weeks, not too long ago, we enjoyed a good debate in this Room.
I welcome the opportunity to set out our case for the statutory instrument. As hon. Members have said, it is an important instrument that continues our vital work to simplify and streamline the planning system, to support the delivery of new homes and to support our wider economic growth. I will deal with the questions posed by the hon. Member for Erith and Thamesmead, but I find it intriguing to hear her say that she is not against change of use to provide new homes and then spend the next 10 minutes opposing everything to do with change of use, which will deliver the new homes this country needs. That is something we see regularly from the Opposition. At some stage we need to hear from them what they are in favour of, rather than continually hearing their ways to stop us from delivering the houses that our manifesto was very clear we would deliver for people to increase housing supply and home ownership, following the fall in home ownership after 2006 under Labour and the lowest level of house building since 1923 that it left us with.
I thank hon. Members for their contributions on the statutory instrument; I know some Members are going to make them shortly. Statutory instrument No.332, the Town and Country Planning (General Permitted Development) (England) (Amendment) Order 2016, came into force on 6 April 2016. I want to be clear and entirely transparent about the fact that permitted development rights are an important part of our approach. They reduce bureaucracy and delays and provide greater planning certainty, while recognising where specific planning issues require local consideration.
The hon. Lady talked about local voices. We have made sure they are heard in the process. Local authorities, when they have specific issues, can bring forward an article 4 direction. She outlined how that can be difficult and cumbersome; it is actually quite the opposite. Five hundred articles 4s have been brought forward across the country, with 24 specifically on the change of use to housing. Councils can do that. In terms of how the Government will deal with that and the Secretary of State will look at applications, we have a track record over the past couple of years with the temporary permitted developments, where we have worked with local authorities to see article 4s come through. We have specific exemptions for the City of London and certain other London authorities. We think those exemptions are important and should be there. We have structured it in a way that gives the authorities time to put their article 4s in place to overtake those exemptions; they get that full legal protection. Therefore, I think we have a good record of working with local authorities to deliver those article 4s.
The hon. Lady also touched on noise issues, which we rightly discussed and debated during the passage of the Housing and Planning Act 2016. We have brought forward changes to that, which the industry is happy with and warmly welcomes, to deal with the specific issue that she outlined. We do not want the problem—she makes a fair point; it is why we made those changes—where, if somebody takes on permitted development rights and puts a residential development in, the new residents cannot complain about a music venue or venue business that was there before them. That is absolutely right.
On the light industrial changes, article 4 can still apply there. Local authorities will look at that and applications can be put forward. The light industrial changes come in from October 2017 specifically to give local authorities plenty of time to put article 4 requirements in place, if they feel they need to. We are giving them more than a year to ensure that there is no question of any compensation issues. However, nobody has ever had a successful compensation issue.
Article 3 is a requirement under the Small Business, Enterprise and Employment Act 2015 and is required in all regulatory statutory instruments. That is why it is included. It is intended to ensure that the measures remain appropriate.
Article 5 specifically only covers the change of use of shops to financial and professional services. I have previously been the high streets Minister, so I support and want to do that to allow our high streets the flexibility to continue to develop. The high street should change and develop; the industry is telling us that it needs to. We need to provide the flexibility to do that. I want to be very clear that the order does not allow new buildings such as new car parks or anything like that. It is about the change of use of a property.
The permitted development right for the change of use from office to residential is an important part of our ongoing reforms, which will ensure that the right continues to play a valuable role in helping to tackle our housing challenges while reducing the pressure to build on greenfield and green-belt sites, which is something that we and the people of the country care passionately about. Where there are specific local issues, the local planning authority may bring forward an article 4 direction.
The permitted development right for drilling boreholes will enable the drilling of boreholes to carry out specific monitoring and appraisal activities, and the provision or assembly of structures connected with those investigatory works, as precursor actions to inform any potential oil and gas exploration proposals. The early collection and assessment of monitoring information that may be done through the exercise of the permitted development right will inform the environmental considerations for any future planning application for any proposed oil and gas exploration.
The right is subject to similar exclusions and restrictions that have applied to the operation of similar permitted development rights allowing the drilling of boreholes for mineral exploration. Under class KA of part 17 of the order, that includes the power, in the case of development that continues for longer than 28 days, for the mineral planning authority to issue a direction under article 5 of the Town and Country Planning (General Permitted Development) (England) Order 2015 to require an application for planning permission for the proposed development in some circumstances. The permitted development rights will not allow the drilling of wells for oil and gas exploration. Any proposed development involving shale exploration will need to be the subject of the planning application process.
The statutory instrument brought forward important legislation that is vital to the delivery of the additional housing that the country needs, and to allow environmental monitoring information to be obtained earlier in the planning process, which is logical and can inform any potential proposals for oil and gas exploration. For the reasons I have set out, I commend the order to the Committee.
Ruth Cadbury (Brentford and Isleworth) (Lab)
It is a pleasure to serve under your chairmanship, Mr Nuttall.
I echo the words of my hon. Friend the Member for Erith and Thamesmead. The Labour party is absolutely not opposed to the concept of the change of use of industrial and employment land to housing. We all agree—indeed, we discussed this in Westminster Hall yesterday—that there is an urgent need to deliver more housing, particularly in London, where my constituency is located. That is an admirable aim and one that, prior to coming to this House, I was very much involved with delivering as a lead member and the chair of planning in Hounslow, where we delivered and, indeed, significantly exceeded, the delivery of total and affordable housing targets.
One only has to drive west along the elevated section of the M4 to see the numbers of new-build housing for which planning permission has been granted by the London Borough of Hounslow in recent years. That is why I believe strongly that local authorities that are delivering on new housing targets have to be able to retain the right to make planning decisions without the cumbersome need to apply for an article 4 direction.
The three-year rule was launched under the coalition Government, and that period has just expired. As a result of that relaxation of the change-of-use rules and the new permitted development rights, the borough of Hounslow lost 81,500 square metres of employment floor space. That represented a gain of 1,251 residential units, but that is against an overall delivery through planning decisions of several thousand units. More importantly, because of that relaxation of the rules and Hounslow’s inability to make decisions on certain sites and apply the 40% affordable housing policy, 512 affordable housing units were lost. As developments came forward for which applications for planning permission did not go to Hounslow, the borough could not impose the important affordable housing requirements on those developments, so more than 500 affordable units were lost in that three-year period. Hounslow has delivered 1,400 affordable units in the past five years, but it could have delivered at least another 500 more.
The removal of proper planning consideration and scrutiny for new developments, particularly where they involve change of use from existing—often older—office stock to housing, also concerns me because of the loss of decent housing standards: space standards, access standards, potentially design standards, and so on. All such developments should be subject to public scrutiny. That is why the planning system was set up.
I will give an example of some buildings in Brentford and Chiswick town centres. The market buildings in Brentford and five or six buildings in Chiswick, which are older office stock, have been full to the gills of small and medium-sized enterprises. They have effectively been incubator units and an important source of economic regeneration and jobs because of the role that those businesses have played in the local economy. Those businesses were in the town centre. Jobs were housed in those buildings, which were full until the landlord deliberately let the leases fall in and all the occupants had to find somewhere else, often many miles away, to do business, which, given that many of the business owners and their staff lived locally, added to traffic congestion and their personal stress. Because the people who worked in those buildings were there every day, they helped to sustain the local shops, pubs and restaurants, and the other services in those town centres.
Chiswick town centre is fairly prosperous, but even there, the independent and specialist shops and some of the catering businesses struggle. In Brentford, there is a vulnerable retail and shopping centre, which could not afford to lose the workers from those office buildings, who spent money five days a week—they had lunch hours and might have gone out after work two or three evenings a week. Those people have been lost and replaced by people who often work long hours, leave early and get back late, and might spend an hour once or twice a week in those town centres.
The planning authority—the planning committee, the councillors and the officers—should be able, with due consideration, to assess the positive and negative impacts of such changes of use and the loss of such offices. That is why the planning system was created 70 years ago. That system has stood us in good stead. Particularly in London authorities—in Hounslow as in most of London—it has delivered the new housing that we so desperately need, and done so rationally. In certain circumstances, it has enabled the retention of employment property where that is relevant, such as in the examples that I have given.
Most of the new housing in Hounslow has been built on former employment land; we have got shedloads of it and the vast majority of it has gone to housing, but through proper local planning decisions. There are examples, such as those I have given, that absolutely illustrate why local control should be there. Why remove planning controls and then put them back through the article 4 direction route? Why even go through that route? As I said, it took some time for Hounslow to be able to get the article 4 direction in place—there was the legal challenge and so on.
I want now to move on to laundrettes specifically. This does seem slightly bizarre; laundrettes to housing is not going to deliver very many new housing units. There are not many laundrettes remaining, but in London they provide an essential service. In areas such as mine there are large numbers of people living on low incomes in poor-quality private sector housing or in overcrowded flats with different tenures. Sometimes a washing machine is not provided; sometimes a poor-quality washing machine breaks down. If someone is on a very low income and their washing machine breaks down, that is a serious catastrophe. If someone has young children or is caring for somebody with disabilities who needs laundry and bedding changed every day, they need a laundrette nearby that they can get to. A washing machine breaking down is a serious crisis for many people on low incomes.
It is beholden on us as public servants to have a say in whether it is appropriate that a laundrette should remain or not. Clearly if there is no business or demand locally for a laundrette, the owner or leaseholder can of course apply to the local authority for planning permission, making the case that there is no need for it. In that case, if the evidence is there, the planning authority could well agree that there is no justification for that laundrette anymore and that it should revert to another use, such as housing. However, how many laundrettes are actually suitable for housing, as many of them are in shopping parades? I really regret seeing this very small but for many people very significant—
Graham Stuart
There is a provision. People do not have to apply for planning permission, but they do have to get prior approval. Has the hon. Lady considered that? Does she think it is inadequate, or has she just ignored it?
Ruth Cadbury
I do not find the prior approval rule sufficient to prevent this use, because the Government policy is based on a presumption that we do not need laundrettes anymore and that is what I regret. I would like to hear from the Government what the justification, and where the impact analysis, is for this legislation. In conclusion, I want to know what impact assessment the Government did on these two elements of the statutory instrument before putting them forward, because I have not yet seen the evidence—certainly from my perspective in London—that this is necessary.
Mr Graham Allen (Nottingham North) (Lab)
It is very nice to be here, Mr Nuttall. I think this is the first time I have served under your chairmanship. I know you are very busy campaigning on a number of issues, so we are even more grateful that you are in the Chair today—but not wearing a badge of course, in your impartial role in the Chair.
I should declare an interest immediately and say that I am honoured to be on Lord Heseltine’s panel on estate regeneration, which is looking at a number of the matters touched on in the statutory instrument. I would have been very happy not to attend this Committee, but I was informed by my Whips that my attendance was absolutely essential. Clearly they were keen to hear a serious contribution from me, and they are going to get one for having had the good grace to invite me to sit on the Committee, which of course I have been looking forward to for a long time.
Coming to the Committee and listening to what has been said, I am struck that this would probably not even appear on a council agenda in a place like Sweden, Denmark, Germany or Italy. There are some who would like to leave those countries behind, but in many ways, they can show us the way to operate subsidiarity, which is taking decisions at the right level. I listened to the Minister very carefully. He and the Secretary of State are strong advocates of devolution, yet here we are, fulfilling not a political but an administrative function. This order is the Department, business and industry—an elite, in a way, beyond politics—deciding what should happen in technical terms on general development matters. We are here considering what in virtually every other western democracy is a devolved matter. The Congress of the United States would no more discuss these issues than anything else that should be done at state, local or neighbourhood level. That highlights for me a very serious matter: that the Town and Country Planning Act 1947 settlement is no longer relevant to what our modern democracy needs to deal with issues such as housing.
I fully understand why the Government and Labour Front Benchers should look at housing issues. Of course it is important to get better housing provision, but everything is done at what I dare call the federal level—in the Westminster Parliament of the United Kingdom—and what we tend to get with this degree of minutiae is a whitewash view across the whole of England, in this case, about what should happen on often very small and trivial issues. That flies in the face of the flexibility that we need if we are to develop balanced and healthy communities. I take second place to no one in the Opposition in my respect for the Minister’s work. I have had the chance to work closely with him on a number of issues, so I know his quality and what is in his heart—but this measure does not help get to where we both, and I suspect the whole House, want to get to.
The last thing we need in my constituency is housing, because my constituency is made up of nine enormous former council housing estates. Because we have lost our big-hitting manufacturing industries, on what little land becomes available, in what little space there is, we desperately need variety to help us rebuild and regenerate balanced communities,. We need to keep our laundrettes, as my hon. Friend the Member for Brentford and Isleworth alluded to, and we need to keep our pubs, as many colleagues have been lobbied on even in this last week, as variety in the community. Even more significant than that, we need to keep our skills base. We need to keep our jobs, our office space, our commercial and industrial spaces, from heavy industry—if it is still to be with us—through medium-sized plants right down to starter units and incubators.
Looking across my patch from one end to the other, I see a sea of council housing receding into the distance, and people who need jobs in one of the areas with the highest level of unemployment in the UK. The broad brush approach to what is needed on housing numbers does not apply. It is not relevant. In fact, it aggravates and makes worse the imbalance in some outer estate communities. We could use Dagenham or Skelmersdale as examples—everyone knows an area a little bit like mine somewhere near where they live.
More broadly across the city of Nottingham, I can see why there should be more houses and places where they might be built. However, whenever an offer of land comes up, it is looked first at as a housing possibility rather than as a longer term regeneration possibility. I fully understand the pressures on the Government and on my local council. When an order such as this is introduced, what will happen is that people in Nottingham City Council will think, “If we can sell this bit of land, we can get a capital receipt for it. If the council can get a capital receipt, we might be able to keep a couple of social workers or a director of public health going in a job. Therefore we have to have that money.” They are not encouraged, and the national system does not encourage them, to think in terms of what the regeneration possibilities might be. Once a council has a capital receipt, that is it: the family silver has gone, and it does not get an income stream forever that it would have had had it built something that was rented out and which had a long-term regeneration impact on a community like mine.
In addition, we have Government targets. Any council, whatever its political description, will feel pushed along to try to meet those targets come what may. By my reading of the order, it will aggravate that inflexibility and aggravate the problems in areas like mine.
The Minister asked what the alternatives are. As I always do—sometimes to his regret, I suspect—I will try to come up with some alternatives. When it is said that the market makes the development of certain properties and bits of land not viable, are there not ways that the Government can consider, not least through their devolution proposals, to offer incentives to bring such properties into use? Article 7 relates to changing light industrial units into housing. Are there not ways in which we can maintain them as light industrial units and increase the likelihood of their being brought back into use?
I have in my constituency a most fantastic further education building, which I fought hard to stop being demolished and being made into—believe it or not—another housing estate. Just what we need. We have had it rebuilt, and out of that further education college there are lots of young boys and young girls who are qualifying as plasterers, bricklayers and surveyors—construction sector skills. They do not have a pathway to progress so that they can stay in my constituency, perhaps start work with a unit and a white van and, if they do well for themselves, go on next year or the year after to a bigger unit. That trail is not there.
Much of what I have said the Minister and I have shared before. I ask him whether in those places where there is solid evidence from counting the numbers and looking at the vista that 95% of the land area is already covered by houses, there can be flexibility so that people can invest in other important things to bring variety and the healthy community we need, whether that is work spaces, commercial properties or offices. The order provides a one-club policy for housing. I acknowledge that we need that club, but we also need another 10 in the bag if we are to have a healthy and balanced community.
Article 3 of the order refers to land, which is probably the most important issue. I urge the Minister to do something quite radical and ensure that those who work in their local communities—Members of Parliament, councillors, community organisations, tenants associations or charities—are always given prior notice of land that becomes available, so that they have an opportunity to present a sensible proposal for regenerating their area. They should not find out after a good old-fashioned 1947 consultation process, like two men and a dog, or in this case 23 respondents, for something this important. None of this is secret if you know the way to find out about these things, but the process is not inclusive. Not one person in this room can honestly say that we really involve people in such decisions. Let it be out there so that local people can make a bid and an offer to do something with that piece of land. Perhaps it may be a small unit, perhaps it is about maintaining a laundrette or just turning something into a green space and playing fields in a sea of concrete.
Simon Hoare (North Dorset) (Con)
Before coming here, I was cabinet member with responsibilities for assets on West Oxfordshire District Council for seven years. I would be surprised if the hon. Gentleman did not know that any local authority seeking to dispose of an asset it holds has to secure best value. That is what we always have to try to find. We must sweat our assets to try to fill a black hole, often in central Government funding. Local government is not in a position to give hand-outs willy-nilly to any fanciful community group idea when it is trying to get money in the coffers to spend on vital public services.
Mr Allen
I am well aware of that, but I think we can either say, “It’s there and we have to deal with it,” or we can rail against it, as I do. Best value immediately may be to secure a capital receipt for a piece of land, but in reality a local authority should be allowed to go for not only best value but long-term value, to think strategically and to think about what people in the community need.
The hon. Gentleman talks a little dismissively, if I may chide him gently, about people in the community. Barratt is also people in the community. It seems to get to know pretty damn quick about these opportunities, and a housing estate goes up rapidly, before the average community group—run on a shoestring, probably not even with a full-time person in it—even gets a smell of those opportunities. All that group then gets involved in is the protest when bricks are going on bricks. We can work on best value, but we can also work with the community and indeed allow people in the locality to make decisions. They may well have a view about best value that is about better value, so that their children can get a job, so that they can have a health centre in their community and so that—in line with the Government’s policy on shopping parades and revitalising shopping in areas—we have the balanced and mixed community that many people talk about.
The hon. Gentleman, thankfully, prompts another thought that I will share with the Committee, which is about devolution. No one could seriously suggest that this order is in the mainstream of the Government’s thinking, or possibly even the Opposition’s thinking, on how power is devolved. We look in vain at articles 7 and 8 for things that say how the order ties in with, for example, the devolution deals happening at the moment. Do we want people out there to take more control of their lives or do we want to specify whether they can or cannot have laundrettes, what happens to local pubs or how use should be changed in their areas, through a one- size-fits-all view from Whitehall and the Department?
The Minister has to do his job this afternoon. He is probably very bored with it and wants to get to the Chamber to listen to the debate on Europe and put his point of view to colleagues in the Lobby. However, he is stuck here because this is performing part of the administrative role of Whitehall. If he were allowed out to make a speech on the stump on devolution—I have heard his speeches—he could rouse a crowd to run with their pitchforks flailing down Whitehall, and so could the Secretary of State, but they will not do it by reading articles 3 to 5 of this statutory instrument, because that is not what it is about. The order is not about devolving power and authority or about building diverse and healthy communities. It is just part of the administrative process of the Town and Country Planning Acts.
We all need a bit more imagination. Many of us do not get the nod from the Whips to appear on these very important statutory instrument Committees. As a renowned parliamentarian, Mr Nuttall, you will know that the opportunities are not always there for Back Benchers. That is why I take this opportunity to say that there is a great vision from the Government—I have said this on the Floor of the House—on devolving power to the localities. They are not going as fast as I want—they probably never could—but they have taken a series of significant steps. Opposition Members should not only welcome that but go further, because that is the way things will go in the very near future. I think that means that this sort of statutory instrument needs to sit in that broad context. Unfortunately, the only thing that I can do to get that on the record and to make my little heckle against the steamroller, as Austin Mitchell, the former Member for Hull used to say, is sadly to vote against the order.
Brandon Lewis
I will respond briefly to a couple of points. I tried to limit my contribution by intervening on the hon. Member for Brentford and Isleworth. She may not be aware that 97% of homes now have their own washing machine, so she will appreciate that that is why it is important that we maximise the use of facilities. It is important to note that the order contains an important safeguard that allows local authorities to consider their local area and the impact of the loss of a laundrette on local services and their key shopping areas.
I thank the hon. Member for Nottingham North for his kind remarks, but I fundamentally disagree with his premise. I make no apologies for the fact that we care passionately about housing. I am happy to be here today to make the strong case for why it is important that the Government pull every lever that we possibly can to deliver the homes that people need across our country. I am happy to make the case publicly about the importance of the order in terms of the thousands of homes that it has delivered, many of which would not have been delivered without it.
The hon. Member for Brentford and Isleworth said that her local authority would have given planning permission for every single application. I do not think that I have met a local authority that has ever done that, but it is very good if her local authority does so. In that case, the order does not have an impact on it other than to help it to get things going much quicker. The planning process can take many years, but the order gets homes moving much quicker. Of course, the councils then benefit from the council tax receipts and the new homes bonus.
If there is a healthy supply of homes in Nottinghamshire, market forces will mean that the terms of the order will be less attractive to developers. That is why the order is important, because it is delivering homes in those core areas where we need them most. My hon. Friend the Member North Dorset described how local authorities deal with land. Thanks to the Housing and Planning Act 2016, we will also now have brownfield registers, which means that information about the land will be in the public domain. That initiative is an important addition to planning permission in principle and gets public sector land out there for development.
The order, which is an important part of our policy to deliver housing, has made an important contribution in the past couple of years. Article 4 offers protection to local authorities but it also means that we can deliver housing through every opportunity available to us.
Teresa Pearce
I thank everyone who has contributed. My hon. Friend the Member for Brentford and Isleworth gave us a passionate defence of laundrettes. My hon. Friend for Nottingham North reminded us that when we talk about value, it does not always have to be financial.
Unlike the Government, the Labour party believes that the nearer to people decisions are made, the better those decisions are. That is the fundamental difference between us. England is a diverse place and we need different plans for different places. A one-size-fits-all plan will end up fitting no one. The Minister said that Labour Members challenge everything that he does. I think that is our job. After the many, many weeks that we spent in this room scrutinising legislation, I hope that he would find value in our scrutiny. I thank all Members for their contributions, and thank you, Mr Nuttall, for chairing our proceedings so well.
Question put.
Draft Double Taxation Relief and International Tax Enforcement (United Arab Emirates) Order 2016
Draft Double Taxation Relief (Isle of Man) Order 2016
Draft Double Taxation Relief (Jersey) Order 2016
Draft Double Taxation Relief and International Tax Enforcement (Uruguay) Order 2016
Draft Double Taxation Relief (Guernsey) Order 2016
(7 years, 10 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chair
First, I inform hon. Members that they can, if they wish, take off their jackets. [Hon. Members: “Hear, hear!”] I am here to help. Secondly, the orders can be debated together if that is the Committee’s wish. It means that we would have an hour and a half as opposed to a longer debate. Is that the wish of the Committee?
Rob Marris (Wolverhampton South West) (Lab)
I agree to that, Mr Hanson. It is a pleasure to be here with you as Chair. If you and the Minister agree to this, could we do it all in one debate but in two chunks? There are five orders. To my mind—the Government may disagree—three of them go together because they relate to Crown dependencies, and two of them, on Uruguay and the United Arab Emirates, go together because they follow a broadly OECD model.
The Chair
If the Committee agrees to debate the orders together, the debate will be an hour and a half long, and if the Minister agrees, they can be debated in two sections within the hour and a half.
The Chair
With this it will be convenient to consider the draft Double Taxation Relief (Isle of Man) Order 2016, the draft Double Taxation Relief (Jersey) Order 2016, the draft Double Taxation Relief and International Tax Enforcement (Uruguay) Order 2016 and the draft Double Taxation Relief (Guernsey) Order 2016.
Mr Gauke
It is a great pleasure to serve under your chairmanship again, Mr Hanson. When you moved on from the shadow Treasury team, I feared that we would never spend time together debating double taxation treaties as we had once done, so I am thrilled that we are reunited on this topic, as I can see you are.
Given the comments of the hon. Member for Wolverhampton South West, let me make some remarks about the identical protocols with Guernsey, the Isle of Man and Jersey, which I believe he wishes to discuss first, and then deal with the remaining orders in a second contribution. We have agreed three identical protocols with Guernsey, the Isle of Man and Jersey, amending the existing double taxation agreements to include modern OECD provisions allocating the primary taxing right over income, profits and gains from land to the jurisdiction in which that land is situated. These changes are connected with the offshore property developers measures announced in Budget 2016, to be legislated for in the Finance Bill—we look forward to that. They remove a potential loophole that may have allowed property development companies located in the Crown dependencies to argue that the DTAs prevent the UK from taxing them on the full amount of their profits from developing UK land. The Crown dependencies have agreed to the changes being effective from Budget day, 16 March 2016, which aids the effectiveness of targeted anti-avoidance rules that protect the new tax charge in the period between its announcement on 16 March 2016 and the introduction of the legislation. That demonstrates the continued co-operation between the UK and the Crown dependencies to tackle tax avoidance and evasion.
I hope that that explanation is helpful to the Committee. I look forward to returning to the double taxation agreements with the United Arab Emirates and Uruguay. I will cease my comments now and allow hon. Members to ask any questions that they have in respect of the protocols that I have described.
The Chair
Order. Although I appreciate why the Minister has spoken to the Jersey order, the motion before the Committee is that it has considered the draft Double Taxation Relief and International Tax Enforcement (United Arab Emirates) Order 2016. I will call Mr Marris to speak, and he can obviously at that stage refer to the Jersey order as part of the discussion.
Rob Marris
I am sorry if I got the Minister off on the wrong foot; I take responsibility for that. Just to clarify, would it be in order to reverse matters? I believe that we are to have a decision at the end of the hour and a half or sooner. I could talk about Jersey, Guernsey and the Isle of Man because the Minister has talked about them, and then, if you agree, Mr Hanson, we could deal separately, as it were, but within the one debate with the orders on the United Arab Emirates and Uruguay.
Rob Marris
Thank you, Mr Hanson; I appreciate your indulgence. I will be brief on Jersey, Guernsey and the Isle of Man. As would be expected, I have some questions for the Minister, although not many. The Jersey agreement goes back to 1952 and has been amended three times since then. The Guernsey agreement goes back to 1952 and has been amended three times since then. The Isle of Man agreement goes back to 1955 and has been amended four times since then. In terms, the three statutory instruments that will be decided on today are the same. They all refer to closing the potential loophole to which the Minister referred. That loophole relates to immovable property, which is defined in each of them—I will not read out the definition, but in essence, it refers to land, agriculture and forestry. In the 1950s in the Isle of Man, Jersey and Guernsey, there was land, agriculture and perhaps some forestry. I am slightly surprised—clearly, this is not just about this Government, given that there were 13 years of Labour Government—that after these have been around for 50 years, somebody seems to have noticed a loophole about land. I am slightly bemused by that, so I wonder whether the Minister could fill us in a little.
Secondly, will the Minister say a little more about the apparent retrospectivity? These measures all go back to 16 March 2016—that is, they would take effect, as per the wording of the statutory instruments, as I understand it, some three months ago. To me, that seems slightly unusual, but perhaps the Minister could talk us through it.
My third question is more on procedure. It bemuses me, and again, I hope the Minister can help the Committee with this, that in the explanatory notes to the statutory instruments—as opposed to the separate notes we get—it says, for example, in the final paragraph of page 5 of the Jersey order:
“A Tax Information and Impact Note has not been produced for the Order as it gives effect to a previously announced policy to enact a double taxation agreement.”
That bemuses me because it seems to say, “The Government have decided to do this, so we are not going to have a tax information and impact note.” I would have thought that if the Government decide on a course of action that needs, as these measures do, the approval of Parliament, it would be helpful to have a tax information and impact note—even a brief one—rather than simply saying, “We have decided to do it so you are not going to get such a note.” Perhaps the Minister could talk us through that.
Mr Gauke
I thank the hon. Member for Wolverhampton South West for his questions. To answer his first question about why these treaties have not been amended before, we have taken action in this Budget to prevent a form of avoidance that HMRC became aware of relatively recently. This ensures that a loophole that would have prevented the implementation of measures to protect the UK tax base can be addressed. The challenge was first, a recognition that profits relating to land in the UK were being booked in these Crown dependencies—the view being that these profits properly belong in the United Kingdom—and therefore, we announced the Budget measure. The concern was that the measures that we took in the Budget could not be implemented without these changes.
Perhaps if I can address the second point—
Mr Gauke
If I can just address the second point, I think it may be helpful to the hon. Gentleman. The new legislation announced in the Budget will include targeted anti-avoidance rules that will stop property developers structuring around the new charging provisions during the period from the announcement on Budget day, which is the date that the new legislation comes into force. Making the protocol changes effective from Budget day aids the effectiveness of these targeted anti-avoidance rules. This is not backdating all retrospection, as such. The double taxation agreements are changed only from the date that the protocols were signed. The targeted anti-avoidance rules will apply prospectively only from Budget day. I hope that provides a bit of clarification to the hon. Gentleman.
Rob Marris
I am grateful to the Minister for that explanation. Is it then the case that the, and I mean this positively, wonderfully innovative accountancy industry in the United Kingdom did not realise that they could advise their clients, quite legitimately, to offshore land profits—this is my shortening of the situation—to the Crown dependencies? They did not realise for 50 years, and then they suddenly realised and it started to happen. The Government then said, “That was never anybody’s intention, so the measures announced in the Budget”—in the statutory instruments today—“will stop that.” Or is it something else?
Mr Gauke
I understand the hon. Gentleman’s point. I want to be perhaps a little a cautious, if not tentative, about the wording. That is not to say that nobody was making use of these provisions—I think that people were making use of them. However, it was relatively recently that Her Majesty’s Revenue and Customs became aware that this loophole—I think it would be fair to describe it as that—was being used. That was not really the intention of Parliament. One could make an argument—if Parliament addressed its mind to this matter—that it would certainly not be the way that we want the system to work. In recent months, in the run-up to the March Budget, it was concluded that action needed to be taken. These changes to the protocols are all part of ensuring that this is effective.
If I can deal with the third question, I will then make my comments about the double taxation agreements. I was asked why there is no TIIN—tax information and impact note. We have not produced impact assessments because double taxation agreements are not of a regulatory nature. They impose no obligations on taxpayers. Rather, they give UK residents relief from foreign tax in prescribed circumstances. They also provide relief from UK tax for non-residents in a comparable situation. Given that the hon. Gentleman has raised that specific point, perhaps we will look again at the wording of the explanatory memorandum to see whether we can provide a clearer explanation next time. He has made a constructive point.
If I may, Mr Hanson, I will turn to the two other orders, on the United Arab Emirates and Uruguay. This first-time double taxation agreement with the UAE completes our DTAs with the Gulf states and follows the same principles that we have adopted with the other countries in the region. Although the UAE does not currently impose tax on individuals or companies, it has the potential to do so. Legislation was in place, but the UAE chooses for the moment not to apply it. Concluding the DTA now ensures that should the UAE start to apply its tax laws, UK companies will have greater certainty over the liabilities, as the taxing rights are constrained by the treaty.
The DTA generally follows the OECD model. Dividends are exempt from withholding tax, other than where the payer is a real estate investment trust, in which case 15% tax may be charged. Interest and royalties are also exempt, but with a provision to ensure that the benefits of the interest article can flow only to UAE residents and companies owned by UAE residents. The exchange of information article is the latest OECD version, which permits information to be used for non-tax purposes with the permission of the other state.
The Government signed a first-time DTA with Uruguay earlier this year. This is an important treaty for the UK as it expands our treaty network in an increasingly important region. The treaty gives valuable benefits to UK businesses and individuals with interests in Uruguay and will strengthen the economic ties between the two countries.
Withholding taxes can hamper cross-border investment, as they represent an extra and often excessive layer of taxation. I am therefore pleased that withholding tax on dividends is restricted to 5% on direct investment and interest is taxable at source at a maximum of 10%, with some important exemptions—for example, for certain bank loans. As we sometimes do with a country whose economy is in transition, we have agreed a provision that allows the taxation of services in the country where they are performed where they last for more than 183 days. The treaty also contains anti-treaty shopping provisions based on the BEPS—base erosion and profit shifting, as you know, Mr Hanson—recommendations on treaty abuse, the latest OECD exchange of information article and an arbitration provision to assist the mutual agreement procedure, which will be welcome to UK companies investing in Uruguay.
I hope those explanations are helpful. I commend the orders to the Committee and I am happy to answer any remaining questions that hon. Members may have.
Rob Marris
I shall try to be brief for the benefit of Minister. It may be that, on certain things, he would kindly offer to write to me. He will know whether he can make that offer when he has heard what I have to say.
I thank Treasury officials, particularly Mr Tom Matthews, for meeting me beforehand to go through these. Any accuracies are theirs, any inaccuracies are mine and any policy pronouncements are mine also. They gave me a talk through of a technical-only nature. As I understood it, the Uruguay agreement was negotiated after the United Arab Emirates agreement. When I go through them there are some differences in wording. There are always going to be some because it takes two to tango and make an agreement, and a country might agree to go with the OECD model but with certain tweaks, just as somebody buying a car gets certain bells and whistles and somebody else does not.
However, I gather that the agreements are, in a sense, generationally different, because when the model for the UAE agreement was used and negotiated successfully, as we see in the statutory instrument, the principal purpose test—which is in the Uruguay agreement—did not exist in the OECD model. The Uruguay agreement uses a later OECD model. That might explain quite a lot of why, when I compare the two, there is much common wording, but also some that appears to me to be different. That may not simply be different because of the different models, but it may be that it is.
I wonder whether, to save the Committee time—others on the Committee may not agree to this—the Minister might write to me, not necessarily in exhaustive detail, to set out some comparisons between the Uruguay agreement and the UAE agreement. No one would thank me if I went through the orders, article by article, and said what is in one and not in another and asked the Minister why. I am not sure that that would be a productive way to proceed. If the Minister felt able to write to me on that, it would be helpful.
I note with some amusement—again, for those who have been on these Committees before; the Minister has—that the UAE agreement refers to “entertainers and sportsmen” under article 16, whereas article 16 of the Uruguay agreement refers to “artistes and sportsmen”. “Entertainers” have become “artistes”. I do not think that has anything to do with the OECD update; the Minister may tell me. These things seem to vary from country to country.
One thing I say with a little more seriousness to the Minister is that, although I appreciate these things have to be negotiated with other countries, and I know a little bit—not a massive amount—about legal drafting because, like the Minister, I have a legal background, if we could find a better word than “sportsmen”, it would be a little bit more “with it”, as it were. I appreciate that the pronoun “he” rather than “she” is used because it can get awfully cumbersome in legislation to do otherwise, but can we not think of something different from “sportsmen”?
Peter Grant (Glenrothes) (SNP)
It is a pleasure to serve under your chairmanship, Mr Hanson. Had I known that you were a member of the jackets-off brigade I might well have nominated you for Speaker last year.
Peter Grant
If you continue to curry favour in that way with Members, who knows where you could be in a few years’ time.
I am happy to support the draft orders but I have a few questions that I hope the Minister will answer. Clearly, the UK has a very different relationship with places like Uruguay and the UAE compared with the Crown dependencies. It is noticeable, however, that the Uruguay and UAE agreements also include new provisions on information sharing on potential tax liabilities. Do we already have adequate information sharing with the Channel Islands and the Isle of Man? If not, is that something we need to return to?
Secondly, with regard to the Uruguay and UAE information sharing, does the confidentiality requirement prevent us from sharing that information further? If, for example, an inquiry is being carried out by the tax authorities elsewhere in Europe or the United States, are the UK authorities prevented from sharing information that we have got under this agreement that might help to uncover large-scale tax avoidance and evasion in Uruguay or the UAE?
There is a second point with regard to the definitions. In some ways it might appear to be very nitpicking to look at the definitions, but if we get them wrong or do not understand their meaning—with no disrespect to hon. Members present—the lawyers will have a field day and the taxpayer is likely to lose out. The definition of immovable property in all the draft orders is, in essence, not surprisingly, whatever the law in the individual country or state says. Is the Minister aware of any significant differences in definition of immovable property in the different places? Are there any instances of where a different definition of immovable property would mean that what we get is something different from what we think? To me, as a lawyer, it is obvious what kinds of property can and cannot be moved, but I know that slight differences in definition might give us problems.
I hope that we will get answers to my questions today, but I am happy for the Minister to write to me at a later date if not. The principle, however, is one that we can all enthusiastically support: it is not fair for someone to be taxed more than once on the one economic activity; and it is extremely unfair for someone not to be taxed at all on any large-scale economic activity.
Related to that, it is becoming more widely accepted that the principle should always be that the tax liability arises in the place where the economic activity takes place. We are all keen for that principle to be extended, particularly in the developing world, so that if international corporations make profits from the hard work and resources of some of the poorest countries in the world, the tax liability will go back to the Governments of those countries, to ensure that not only the workers, but the public services and tax income of the least developed countries get a proper benefit for the efforts of their citizens and, sometimes, the use of their natural resources.
I certainly applaud the direction of travel represented by the draft orders—we are creating a worldwide tax system, which is fairer not only because it prevents people from paying more than they should, but because it ensures that those who have got away with not paying for far too long will gradually find that more and more loopholes get closed. As a result, public services in our country and in many other parts of the world will be properly financed by the people who should be financing them. With those words, I am happy to support the draft orders.
Mr Gauke
I thank the hon. Members for Wolverhampton South West and for Glenrothes for their questions and, indeed, their support. Let me try to address as concisely, but as thoroughly as I can the points made.
First, on the differences between the two double taxation agreements, I am certainly happy to write to the hon. Member for Wolverhampton South West and to set out some details. The two main points that I would bring out, without going into a clause-by-clause analysis—tempting though that is—is that the hon. Gentleman is absolutely right to say that there is a difference of timing in when the draft orders were agreed, so the principal purpose test contained in the Uruguay agreement reflects the fact that that is a new direction for the UK. It comes out of the “Action 15” work of BEPS, and will appear in the next edition of the OECD model. That is the explanation for that, and we expect to see it more often in future. Another distinction worth pointing out is that we have no capital tax, but Uruguay has a wealth tax, so an article in the double taxation agreement properly reflects that.
The hon. Gentleman drew a distinction between artistes and entertainers. That perhaps should be best left to the letter. I will not dwell on that here or draw any general conclusions about the UAE or Uruguay and which is most appropriate, but he raises a fair point on “sportsman”. I am pleased to say that it has been changed to “sportsperson” in the latest OECD model. I fear that we are not going to be able to give him credit for that change in double taxation agreements, but he has certainly spotted something that needs rectifying, and I am pleased to say that it is being rectified.
Turning to the questions raised by the hon. Member for Glenrothes, let me reassure him that we have a tax information exchange agreement with all the Crown dependencies. It is not included here because these are specific protocols dealing with a specific issue, but we have well established treaties with those Crown dependencies. It is worth stressing that they meet the international standards in this area. We were early signatories to what became the common reporting standard.
I am entirely in agreement with the hon. Gentleman on the importance of tax authorities having an ability to share information much more widely than they have in the past and on its not being possible for the information to be held secret, as was once the case. Much progress has been made on the move to automatic exchange of information, which has long been an aspiration of all parties, and that is coming into effect. We have moved a long way in recent years on exchanging information with law enforcement authorities and so on, and on co-operation between tax authorities across the board.
I am not aware of any particular issues or controversy with differing definitions between one jurisdiction and another of the operation of immovable property, but if I may, I will write to the hon. Gentleman to confirm the position and to what extent it has proved difficult, whether in the jurisdictions we are talking about today or more widely. I add my support to his comment that we should have a tax system in which tax is properly aligned to economic activity. That is very much the direction of the OECD’s work on BEPS, and it is very much the direction that the UK has argued for. We believe that the international tax system has to properly reflect that alignment. It is the only sustainable way in which an international tax system can properly work, and we continue to make that argument.
I hope that those points of clarification are helpful to the Committee. With that, I hope that the orders before us will have the support of the whole Committee.
Question put and agreed to.
The Chair
With the leave of the Committee, I will put the remaining motions in a single question.
Draft Double Taxation Relief (Isle of Man) Order 2016
Resolved,
That the Committee has considered the draft Double Taxation Relief (Isle of Man) Order 2016.—(Mr Gauke.)
Draft Double Taxation Relief (Jersey) Order 2016
Resolved,
That the Committee has considered the draft Double Taxation Relief (Jersey) Order 2016.—(Mr Gauke.)
Draft Double Taxation Relief and International Tax Enforcement (Uruguay) Order 2016
Resolved,
That the Committee has considered the draft Double Taxation Relief and International Tax Enforcement (Uruguay) Order 2016.—(Mr Gauke.)
Draft Double Taxation Relief (Guernsey) Order 2016
Resolved,
That the Committee has considered the draft Double Taxation Relief (Guernsey) Order 2016.—(Mr Gauke.)
Ministerial Correction
(7 years, 10 months ago)
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Cabinet Office
(7 years, 10 months ago)
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Dr Liam Fox (North Somerset) (Con)
My right hon. Friend says that the problem of ballot papers being issued to those who are not eligible to take part in this election has been identified and cured. Can he therefore give us an idea of the scale of the problem? How many of these wrong ballot papers were issued?
Mr Letwin
We believe it to have been around 5,000.
[Official Report, 9 June 2016, Vol. 611, c. 1364.]
Letter of correction from Mr Letwin:
An error has been identified in my response to my right hon. Friend the Member for North Somerset (Dr Fox).
The correct answer should have been:
Westminster Hall
(7 years, 10 months ago)
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Developing Countries: Jobs and Livelihoods
(7 years, 10 months ago)
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Jeremy Lefroy (Stafford) (Con)
I beg to move,
That this House has considered jobs and livelihoods in developing countries.
I draw attention to my entries in the Register of Members’ Financial Interests.
“A good job can change a person’s life, and the right jobs can transform entire societies. Governments need to move jobs to center stage to promote prosperity and fight poverty”.
Those are the words of Dr Jim Yong Kim, president of the World Bank, in his introduction to the 2013 World Development Report. In 2014, my right hon. Friend the Secretary of State for International Development said:
“Growth reduces poverty through jobs…raising incomes for individuals through the dignity of work and providing tax receipts for governments to fund basic public services like health and education.”
On the other hand, the lack of jobs and the opportunity to earn a living fuels discontent and unrest and drives economic migration. We are seeing the consequences right now, which is yet another reason why working in partnership around the world is both the right thing to do and very much in our national interest.
In sustainable development goal 8, UN member Governments commit that by 2030 they will achieve
“full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value”.
Just last year the International Development Committee published a report on jobs and livelihoods. One of its recommendations was that jobs and livelihoods were “such an important issue” that its successor Committee in this Parliament should take it up
“to assess what progress has been made.”
I am sure that that will happen in the coming years, but I wanted to ensure that the matter was raised in the House. I am delighted to see so many colleagues present. Other members of the International Development Committee would have been here, but the timing of the debate clashes with a meeting of its Sub-Committee on the Independent Commission for Aid Impact.
John Howell (Henley) (Con)
Does my hon. Friend feel that the Prime Minister’s initiative to make a number of MPs, such as myself, trade envoys will contribute to the work he is describing, given the wide role we have been given? How much does he think the prosperity fund will play a role in helping to develop local industries and situations to enable the creation of new jobs?
Jeremy Lefroy
I am most grateful to my hon. Friend for that intervention. He is doing fine work as a trade envoy for Nigeria, which is vital, because British investment around the world will help to create jobs. The prosperity fund will provide opportunities for people to develop that work. I entirely agree with my hon. Friend.
The 2013 World Development Report estimated that, globally, 200 million disproportionately young people are unemployed, with a further 620 million young people neither working, nor looking for work. Due to age profile and population growth, the report estimates that a further 600 million jobs will need to be found in the next 15 years just to keep employment rates constant. Personally, I would put that figure even higher, at closer to 1 billion.
Mr Gregory Campbell (East Londonderry) (DUP)
I congratulate the hon. Gentleman on securing this debate. He is discussing the figures and alluded to the fact that we would like to go further. Does he agree that it is almost a pipe-dream that the sustainable development goal that appears to indicate the elimination of poverty and unemployment, particularly in developing countries, will be achieved by 2030? We really need radically to reassess what we are doing to achieve that goal.
Jeremy Lefroy
The hon. Gentleman makes a valuable point. One reason why I called for this debate is because not nearly enough work is going on around the world. The UK is taking a lead, but he is absolutely right that much more needs to be done here and around the world.
In many countries, much of the work is subsistence agriculture and low-income self-employment—that is true for something like 50% of the 3 billion people working worldwide. Making ends meet is extremely difficult. I have to admit that all the figures I have cited are imprecise and sometimes speculative, which is a problem. We do not have accurate data, but I hope we will see more in future. It is about not only data but action, but action depends on good data.
The World Development Report found that: first, there are too few productive waged jobs in modern, formal sectors; secondly, most people are engaged in very low-productivity, seasonal or subsistence work in both rural and urban areas; thirdly, there are large gaps in job opportunities for women, youth and marginalised groups; fourthly, much work is in poor conditions, or is unsafe or risky, including in formal employment; and fifthly, many labour market-related institutions are ineffective, including skills institutions.
Patrick Grady (Glasgow North) (SNP)
I congratulate the hon. Gentleman on securing this debate. I apologise that I cannot stay for the whole debate, but I am going to an event in the House of Lords to mark Small Charity Week and speak about the importance of small charities in international development. Does he agree that many small and grassroots organisations have an important role to play in equipping people in developing countries with precisely the kinds of skills he is talking about, which they need in order to move into productive employment?
Jeremy Lefroy
I entirely agree with the hon. Gentleman. I will give an example of that later in my speech, but he is absolutely right. I made a similar point in Monday’s debate in this Chamber on foreign aid expenditure.
What can be done? I shall give several possible solutions. First, let us work with what we have. I shall start with agriculture, because it is at the heart of the economies of most developing countries. It provides most of the work and a considerable share of GDP, Government income and exports. It also provides the basis for local manufacturing. Even in developed economies such as ours, food and drink production is the largest manufacturing sector. Why should that not be the case in developing countries?
Although all countries will of course wish to diversify into other sectors and reduce reliance on agriculture, that is not the same as neglecting agriculture. That mistake has been made far too often in the past, both by Governments and by their aid-funded advisers. I am glad to say that things have changed over the past three decades. Countries such as India and Vietnam, and more recently Ghana, Tanzania and Ethiopia—to name but a few of many—have given much more prominence to agriculture and increased their support of it. The same is true of development agencies, especially the Department for International Development. I welcome that.
Working with what we have in agriculture also means working with the smallholder farmers who are its backbone. When I started to work with smallholder farmers nearly 30 years ago, the view of many was that they were on the way out, and that the future of agriculture was large-scale farming. In fact, they are more important than ever, providing food security even in conflict zones. For example, in the 1970s Angola produced a similar amount of coffee to Uganda, but Angola’s coffee was almost all produced on large estates, while Uganda’s was produced by smallholders. Both countries went through long periods of turbulence. Today, Uganda’s coffee production is the same as it was back then, if not more, but Angola’s coffee production has almost disappeared. Smallholder farmers are incredibly resilient.
David Simpson (Upper Bann) (DUP)
I congratulate the hon. Gentleman on securing this debate. He has vast experience of developing countries. Does he agree that there needs to be an emphasis on educating young people so that there are links with the business community? He will know that every year in the House there are campaigns to get children in developing countries into education. That would help them on the pathway to jobs, no matter how little.
Jeremy Lefroy
I agree entirely. I shall address that issue in a moment, because it is vital.
I have a couple of other examples of sectors in which we can work with what we have. Hospitality is important in every developing country. It is about not only international tourism, but looking after people in one’s own country and wider region. Hilton estimates that, if there is proper investment around the world, the hospitality sector alone could create an additional 70 million jobs over the next decade. Apart from agriculture and agricultural processing, construction is very likely to create and sustain jobs and livelihoods in most parts of developing countries. I shall say a little more about that later in my speech. We must also consider local services. Services are often neglected in favour of large manufacturing investments, yet in every town and city, along every main street, one will see service businesses. We need to support and encourage them, because if every service business employed one more person, millions more people would be employed throughout the developing world.
Secondly, not only should we work with what we have, but we must not stand still. Everyone wishes to see a better life for their family. Incomes from agriculture can be improved in many ways. That subject is worth an entire debate in itself, but, to be brief, they include enhanced productivity through better inputs, advice, irrigation, finance, diversification, storage to reduce crop losses, and access to markets and to information about those markets. In other words, that means moving on from subsistence agriculture.
DFID’s recently published conceptual framework on agriculture puts it well. It says that there is
“the assumption that sustained wealth creation and a self-financed exit from poverty depend, in the long-term, on economic transformation and the majority of the rural poor finding productive and better paid employment outside of primary agricultural production”—
note that the framework says primary—
“Despite the need for this transition, agricultural growth and downstream processing and productivity growth are likely to be important, if not essential, as a continued source, if not driver, of growth.”
When I was involved in buying cocoa from smallholder farmers, we saw the price per kilo paid to farmers, and hence their income, rise at least fourfold over two or three years as result of a combination of improved quality, better logistics, a higher world market price and a greater percentage of that price being paid to the farmers. It also depended on having a reliable buyer prepared to take a long-term approach, rather than one driven by short-term trading considerations. The farmers’ improved incomes not only sustained and improved their own livelihoods but created jobs at a tremendous rate. The money stayed in the local economy to support input dealers, schools, clinics, general stores and bars. That, in turn, created jobs in local and national manufacturing and service businesses. I am a believer not in trickle-down economics, but in trickle-up economics, and smallholder agriculture is at the heart of that.
I have concentrated on agriculture, but the need not to stand still applies to all the other sectors I mentioned. In hospitality, training, good-quality service and investment meet the needs of nationals, not just tourists. There is no reason why someone cannot provide an excellent hotel or tourist spot for their own population. They do not need to rely on a few hundreds of thousands or tens of thousands of overseas visitors.
Construction jobs can be enhanced through a formal apprenticeship scheme of the kind I mentioned. They can also be supported by placing specific requirements on contractors in large infrastructure projects to employ and properly train local people in their work. That is increasingly happening, but it needs to be extended to the most senior levels of the contract, not just the grassroots workers. Skills are best transferred in the heat of building a major road, bridge, airport or railway line.
Imran Hussain (Bradford East) (Lab)
Does the hon. Gentleman also recognise the importance of urban planning, in particular for the foundations it lays for economic development? We need to do more on that.
Jeremy Lefroy
That is a very interesting point. I agree. We see the consequences of poor urban planning in many parts of the world. In that context and the general context of construction, I would like to ask the Minister whether all the infrastructure and construction projects that DFID supports now have clauses that require the training and development of local skills, rather than just bringing in professionals and others from outside.
Thirdly, we must act locally and regionally, not just from the capital city. People working at the grassroots are the best at creating large numbers of jobs, so Governments and aid organisations need to concentrate their work there, not just in capitals or large cities. The Bangladesh-based international development agency BRAC is effective at doing that, as I saw in Babati in Tanzania—a small town south of Arusha, which the International Development Committee visited in 2014. Charities such as Hand in Hand, set up by the Swedish entrepreneur Percy Barnevik, also work outside the main cities and capitals.
In Nigeria, which the International Development Committee visited in March, DFID has an office in Kano. I think it is the only major aid organisation based in Kano, which gives it the advantage of having a greater appreciation of the situation on the ground. I would encourage the same elsewhere. I would like to see DFID staff based in regional towns and cities, not just capitals. Given modern communication technology, we do not need expensive infrastructure to do that, and I think many would welcome the chance to do their work outside the bubble of a congested, expensive capital city.
Regional trade is vital. DFID has some excellent programmes—in particular, TradeMark East Africa, which, like many things I am going to talk about, is worth an entire debate itself. I will not say more about it at this stage, other than that I believe it has done some excellent work in breaking down trade barriers across the region.
Fourthly, we need to embrace job creation in public services, which are sometimes forgotten. Building public services, such as health and education, provides huge job opportunities. The NHS is the UK’s largest employer by far. At the moment, in Tanzania there is one doctor for every 25,000 people, whereas in the UK it is something like one for every 350. If Tanzania increased its number of doctors to one for every 2,000 people, that would create more than 20,000 highly skilled roles in that country alone, and probably more than 100,000 in total in the health sector. I am very glad to hear that this month Tanzania is considering increasing its health spending substantially in its budget. If that happens, there will be greater employment in the health sector. The same applies to education.
Of course, there is an argument that that depends on increasing Government revenue. That is absolutely true, but it also depends on choices about how Government revenue is spent. It is a virtuous circle: greater access to healthcare and education helps people’s productivity, and hence increases the income that generates taxes. I do not have an estimate of how many additional jobs will be created in developing countries if staffing and education reached just one quarter of developed countries’ levels, but it would be in the millions globally, and almost all would be filled by the young people who need them most.
Fifthly, we need to be inclusive. We need to ensure that the work covers everybody, and women and girls must be at the heart of it. Policies that exclude people are not only wrong, but bad for jobs and livelihoods, and hence economic growth.
Sixthly, there must be access to the right kind of finance, without which we cannot create jobs and livelihoods. Again, a separate debate is required on that issue, so I will limit myself to two examples. Small and growing businesses, which will create the most jobs and need finance, tend to be seen as risky. Commercial banks are increasingly risk averse in developing countries, as they are in developed countries, as they implement capital adequacy rules designed, understandably, to protect depositors. Loans come with high security requirements, so finance will increasingly need to come in forms that are not so restrictive. The providers will need to be willing to take on risk—that applies as much to the UK as to developing countries. The last thing we should do is discourage entrepreneurs by promising them destitution if things go wrong, which is pretty much what commercial banks in developing countries do: they take everything away if the loan goes bad.
The Economist recently published an article with examples of that kind of finance, including GroFin and Equity for Tanzania. I have to declare an interest: I helped to found Equity for Tanzania, and I am director of its charitable parent organisation in the UK. It leases equipment to the growing businesses in Tanzania, and takes as security only the equipment itself. It has the specific aim of job creation. Returning to the point that the hon. Member for Glasgow North (Patrick Grady) made, it was supported by a small grant from DFID about 12 years ago and developed into a much larger organisation.
The second example is CDC—formerly the Commonwealth Development Corporation—which invests in larger business. It has the specific aim, set up by the previous Secretary of State, my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell), to create jobs and livelihoods, and to work in the most needy countries. I welcome that.
Finally—this also relates to the point made by the hon. Member for Glasgow North—we need education and training. A strong and diverse economy built from the grassroots also needs a vibrant education and training system that teaches not simply the essential building blocks—mathematics, sciences and languages—but the skills that people need to work for themselves or run a small enterprise. When the International Development Committee visited Sierra Leone in 2014, President Koroma stressed to us his desire to see more vocational training. In Nepal in 2015 we saw a vocational training scheme run by the Swiss and supported by DFID. There is a tendency to see traditional vocational training models as ineffective, having high capital and running costs and being inaccessible to young people. I believe we need models that are more akin to our apprenticeship schemes, and that are based on working alongside skilled businessmen and women. People should receive financial support for doing so, together with some central training. That is cheaper and more effective.
I also suggest there is a need to embed business and self-employment training within school curricula. Most students will end up working for themselves, or in small enterprises, and they will be better prepared if the training starts in school—again, the same applies in the UK. We do not have enough of that in our school curricula. It would also raise the status of business and self-employment as something a student wishes to do, rather than as a last resort if they cannot go to university or obtain a government or salaried job of some kind. Excellent work on that is done by Youth Business International, part of the Prince’s Trust network, and Peace Child International.
I will now look briefly at DFID’s work, first at its economic strategic development framework, which has five pillars: improving international rules for shared prosperity; supporting the enabling environment for private sector growth; catalysing capital flows and trade in frontier markets; engaging with businesses to help their investments contribute to development; and ensuring that growth is inclusive and benefits girls and women. I have already touched on many of those subjects, so DFID is already covering a lot of the ground. The DFID framework, however, excludes the role of public services in economic development, especially job creation. When the framework is next revised, I ask the Minister to include that in it; it is important.
The second area in which DFID is doing a lot of work is its youth agenda, “Putting young people at the heart of development”, published only in April this year. It focuses on two transitions, between childhood and puberty, or adolescence, and between education and productive work, going from dependence to independence. The April publication has been followed up with a couple of internal papers on youth and jobs, and youth and entrepreneurship. DFID is apparently preparing for a consultation on the issues later this year. That is good, and I welcome it, but we need not only consultations and papers, but action. DFID has the opportunity to lead such work internationally.
Finally, there is the World Bank, which I began with. I declare an interest, as I chair the international Parliamentary Network on the World Bank & International Monetary Fund. In 2014 the bank launched its Solutions for Youth Employment initiative and an umbrella trust fund for jobs, which is supported by DFID. Will the Minister tell us about any progress on that? Are we simply discussing a lot of nice platitudes, welcome though they are, and even policies, or are we talking about real action to create, or support the creation of, those jobs and livelihoods, which are so urgently needed?
In conclusion, I welcome what is being done at the moment. As the hon. Member for East Londonderry (Mr Campbell) said, we must go a lot further and a lot faster. I want to see every DFID bilateral programme fully engaged with the host Government on jobs and livelihoods, particularly for young people. They will find an open door, because that will always be one of the top priorities of any responsible Government. That does not necessarily mean large programmes in every country—we need to avoid duplication—but it does mean constant dialogue to see how we can support the Government.
DFID needs to use its influence in all multilaterals to put jobs and livelihoods at the centre of activity, particularly in health and education, which we cannot see as somehow completely divorced from jobs and livelihoods, because they depend on people working in them and having their jobs and livelihoods in those sectors.
Make no mistake, this is possibly the biggest challenge of our generation, along with tackling climate change. Hundreds of millions of young people could be ignored, without hope, seeking to move elsewhere, and at the mercy of people traffickers or extremists, or we could have those same young people engaged, valued and able to contribute where they are.
Jim Shannon (Strangford) (DUP)
It is a pleasure to speak in the debate, Mrs Moon. I congratulate the hon. Member for Stafford (Jeremy Lefroy), who set the scene very well, as he always does. He clearly has not only a vast amount of knowledge and experience, but compassion for the people concerned and those he has interacted with over the years. It is always a pleasure to hear him, and it is a pleasure to follow him.
This issue must be highlighted; it is one in which many of us have an interest, especially given ongoing concerns about the amount of money that this House sets aside for overseas aid. We had a debate here on Monday about that, and the Minister responded to it. Every speaker in that debate said how important it was to retain the target of 0.7% of gross national income, although there were concerns about how the money is allocated. It is therefore important to not only retain money for aid in line with the GNI target, but look at its allocation.
I am unapologetic about always seeking what is in the best interests of my constituency and highlighting the best we have to offer. I have stood against austerity cuts that affect the vulnerable in our society and impact adversely on those who do not enjoy the same quality of life as many of us in this Chamber. I am proud to be an Ulsterman, with all that that entails—loyalty, compassion and generosity. My wee country is well known for having a big heart, which is why I have no difficulty in saying that it is essential for the Department for International Development to continue overseas aid. I know that on that issue, I speak on behalf of the vast majority of my constituents, who are generous to a fault.
In Parliament, we talk about the living wage and quality of life, and I argue passionately on behalf of my constituents on those issues, but I have also seen the flipside: those in other countries who have no quality of life or living wage. On a visit to a British Army base in Kenya with the armed forces parliamentary scheme—the hon. Member for Stafford was on the same trip—I was given a small glimpse of children living in absolute poverty, with no life and no hope whatever. I saw despairing mothers seeking to feed their children with scraps, and I saw men willing to work, but there was no work to be had. My heart was touched, just as I am touched by the needs in my community. When I saw such need, I knew that I would always stand up for the allocation of a small amount of funding to overseas aid to ensure that we can deliver the jobs and opportunities that the hon. Gentleman spoke about, and that the debate is all about.
I want the funding to be allocated, but there must be wisdom in how it is allocated to ensure that, as the saying goes, we give people the tools to feed themselves and their families for days and months, rather than simply giving them a meal. However, there is no point in giving a starving child a fishing net; wisdom lies in providing the child with a meal and the family with the ability to find future meals. That underlies the title of the debate, which is about promoting jobs and livelihoods in the developing nations that we support.
In March 2015, the International Development Committee published a report on jobs and livelihoods that said:
“Jobs and livelihoods is such an important issue we recommend that our successor Committee takes it up in the next Parliament to assess what progress has been made.”
It was clear in the previous Parliament and this one that the Committee knows that jobs are the only way to make a lasting difference to the lives of people throughout the world. The questions that arise are: have we been successful in our aim? Have we achieved those goals? Are we moving in the right direction?
Mr Gregory Campbell
I agree with my hon. Friend, but does he agree that the sustainable development target of eliminating unemployment and poverty over the next two Parliaments in the United Kingdom stands in stark contrast to escalating youth unemployment in developed nations? The eurozone has 40% youth unemployment. Without a radical and fundamental change, how on earth will we ever see anything remotely close to reducing unemployment and poverty in developing countries, let alone eliminating them?
Jim Shannon
My hon. Friend is most wise, as always. He sets the scene. There are many difficulties at home and abroad. All we can do in the debate is to set the scene and the goals, and contribute, we hope, to a strategy for a way forward. That is what we are trying to do. In 2014, the UK provided £752 million in bilateral aid directly related to jobs, businesses and the economy. Some £358 million was for particular production sectors, such as agriculture and forestry, and £394 million was for economic infrastructure and services, such as transport and storage, or banking and financial services. Together, that accounted for 11% of bilateral aid from the UK.
David Simpson
My hon. Friend has mentioned substantial amounts of money. Does he agree that it is essential for that money to be targeted on the people who need it? So often, we have seen corruption in a lot of the countries, with the money being siphoned off and going to the black market or whatever, and not getting to the people who need it.
Jim Shannon
My hon. Friend is right. Monday’s debate in Westminster Hall, to which the Minister replied, clearly hinted at such things. We all outlined examples where aid had not been focused on the sector that it should have been. My hon. Friend is right to highlight that point, as we did on Monday.
The Independent Commission for Aid Impact published a report on DFID’s private sector development work in May 2014, giving it an overall amber-red rating. It found that
“The impact of individual programmes is positive…and DFID has demonstrated its ability to assist the poor through a range of interventions”.
However, it also found that
“It has not turned these ambitions into clear guidance for the development of coherent, realistic, well-balanced and joined-up country-level portfolios.”
The hon. Member for Stafford is therefore right that that is what we should try to focus on.
How much of the money actually achieved its aim? Not much, it would seem. Have we made progress and moved from the amber-red zone? My fear is that we have not. Before her children came along, my parliamentary aide used to go to Africa every year in the summer to carry out mission and humanitarian aid work, and she told me of the horrific corruption in many countries that prevented aid from getting to where it was needed; my hon. Friend the Member for Upper Bann (David Simpson) mentioned that, too. The same goes for containers of agricultural equipment that we in Northern Ireland sent overseas; the containers reach their destination with some things having been taken out of them. In fact, those who pack the containers have learned to pack the essential stuff in the back, in the hope of it reaching its destination. The Elim church missionaries in Newtownards in my constituency of Strangford do fantastic work in in Malawi, Zimbabwe and Swaziland in Africa, as do many other churches across the whole of Northern Ireland, and indeed the United Kingdom.
Stories of corruption make it clear to me that work on ending it needs to be carried out with the Governments to which we send aid. We need to ensure that, when we send aid bilaterally, we do so only when there are procedures in place that allow it to make a difference on the ground, rather than being swallowed up in paperwork and translation. One of the best ways of achieving that goal is to use those who are already on the ground, and to divert funding through bodies that we see making a difference, whether that is Oxfam, Christian Aid or mission bodies with permanent staff on the ground.
The hon. Member for Glasgow North (Patrick Grady) spoke about charitable work. I know of one church in my constituency that, instead of giving Christmas presents, promoted the gift of a cow or a goat to Africa, so that individuals could breed the cows and in the meantime sell milk, or use it to live on. That is a practical way of doing things that changes lives in a small way. It may be a small change for the Government, but the change made in villages throughout Malawi and Zimbabwe was in no way small. Can we learn a lesson from missionaries who have been on the field for 20 years, and who know the systems and how to work in them to achieve results? I believe so.
There is a desperate need for jobs and livelihoods in these countries, and there is an onus on us, as a country that allocates a great deal of funding, to ensure that that is achieved, and that funding is not caught up, or whittled away in the process of getting to the man on the street. I look forward to hearing from DFID. I apologise to the Minister and the shadow Minister for the fact that I will not be here for their speeches, as I have a Select Committee to go to at 10.10 am.
I believe that we can effect change with the much-needed funding that this generous nation of the United Kingdom of Great Britain and Northern Ireland gives each and every year, and I encourage other countries to do the same.
Mrs Flick Drummond (Portsmouth South) (Con)
It is a pleasure to serve under your chairmanship, Mrs Moon. What a great opening my hon. Friend the Member for Stafford (Jeremy Lefroy) gave to the debate on this incredibly important subject. As I had only two minutes to speak the other day, I was unable to congratulate the Minister on his knighthood—congratulations!
The UK has made significant contributions to improving the livelihoods of the poorest on the planet, and it is in our interests to help developing states strengthen further, economically and politically, if we are to avert the rise in emigration to the UK from developing countries. The UN states that we will need to create 30 million new jobs every year to keep up with the growth in the global working-age population. The enormity of that challenge is not something that the developing world can—or even should— shoulder by itself.
Our commitment to overseas business development should not be seen as just another programme aimed at helping the poor. It helps everyone, including the countries giving the aid. We are a trading nation, and as such we must always be on the look-out for new markets and new partners to work with. That includes those countries where we have to help develop and foster the conditions necessary for business to flourish.
It is in our national interest to encourage the growth of developing countries by unlocking the enormous potential of the private sectors in those countries. By encouraging business growth, we are turning those who receive state aid into key trading partners. Investment in developing countries brings them into our markets, as we now see across Asia and Africa. For example, our programme to support Rwandan agriculture has transformed the industry from a subsistence-based activity into one that is commercially oriented. With help from DFID, the Rwandan Government have collected greater tax revenues, which has meant that Rwanda’s dependency on foreign aid has declined. The Rwandan Government’s spending on education and healthcare programmes has trebled as a result of the revenues they have collected. Bilateral trade in goods between the UK and Rwanda exceeded £10 million in 2012, and UK exports to Rwanda totalled £7 million. The top exports included power-generating machinery, medicinal and pharmaceutical products, and general industrial machinery.
It is vital that we get the world’s young into work for their own dignity and personal development as well as their economic future. In so many places in the world, we see the consequences of young people feeling that they have no future because of conflict or migration, but where people have the opportunity to support themselves and their families, we see greater stability. That in turn encourages greater business development and attracts more investment.
The UK can be proud of its involvement in the millennium development goals, which significantly improve the livelihoods of billions of people. In particular, the UK’s action on development goal 8 has meant that, between 2000 and 2014, bilateral aid to the least developed countries fell by 16% in real terms, while 79% of imports from developing countries entered developed countries duty-free.
Globally, the population covered by 2G grew from 58% in 2001 to 95% in 2015, and anyone who has travelled in developing countries can see that even the poorest individual now has a mobile phone. Internet use has grown from 6% of the world’s population in 2000 to more than 40% in 2015, and 3.2 billion people are now linked to the content and applications that we can access here in the UK.
Those achievements in internet provision, coupled with the ready availability of technology, mean that people are seeing the quality of life in the developed world, so it should come as no surprise that the UK is a popular destination for those who have the skills and qualifications to get themselves here. Technology has vastly improved all our lives, and the opportunities for developing countries are even greater. Developing countries and businesses based there have leapfrogged obsolete technologies, which has allowed them to take advantage of the same level of technology that we enjoy. That has also placed on us a need to accelerate our programmes and ensure that as the expectations of those who live in developing countries rise, so do the opportunities available to them.
A lack of sustainable jobs, and livelihoods that fall below expectations, threaten to undermine our progress on the wider goals of tackling poverty. Unless we address that problem, we will continue to drain away the most educated individuals from the communities that need them most. As of April last year, about 80,000 doctors registered in the UK had obtained their primary medical qualification outside the UK. Many of them qualified in India, Pakistan, South Africa and Nigeria. In effect, developing countries are paying to train doctors for our health service. We have a high demand for doctors, but taking them from the world’s developing countries is counterproductive and not sustainable. Our foreign aid and investment in business development will not see real results unless we create an environment in which aspirational people see their future in their own communities.
A UN report highlighted that 780 million people in the world are earning less than $2 a day, which is the UN development goals’ definition of absolute poverty. We know that society as a whole benefits when more people are contributing towards their country’s growth, but employment must be worth while and rewarding. That is why it was so important that the UN reaffirmed its commitment to the principles of the global development goals in 2015. We will continue to build on what we have achieved.
We have committed to ensuring that everyone can enjoy prosperous and fulfilling lives by 2030 through the creation of sustainable jobs and by sharing the benefits of technology. Our business development spending must continue to be directed towards developing countries, helping them to build their economies and develop themselves. Continuing with that programme contributes significantly to our wider goals of eradicating poverty and conflict. It is essential that we make that one of our major focuses for the next 15 years and beyond.
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)
It is a pleasure to serve under your chairpersonship, Mrs Moon. I congratulate the hon. Member for Stafford (Jeremy Lefroy) on introducing this important debate. He is a real advocate of what works in international development and it is a privilege to serve on the International Development Committee alongside him.
I am pleased to be able to take part in the debate. I have a great interest in the subject; I am a member of the Select Committee on International Development, and have a local interest as the Department for International Development in Scotland is based in East Kilbride, in my constituency. We need to recognise the importance of making sure that there are sustainable, inclusive jobs across the world; we must place that at the heart of the UK’s development agenda. I am particularly proud of my party’s work on that. The Scottish Government have a firm commitment to advance Scotland’s place in the world as a responsible nation. They have a £9 million international development fund and a £6 million climate justice fund, which supports 11 projects in places that include Malawi, Zambia, Tanzania and Rwanda.
Goal 8 of the sustainable development goals is about jobs and livelihoods. That key objective is required to be achieved by 2030. There is, as we have heard, much work to be done to realise that aim, and progress must be regularly monitored, and measured effectively through improved data collection and the development of disaggregated data. We need to ensure that the disproportionate unemployment rate for young people is tackled. About 600 million new jobs must be created just to keep things constant. Unemployment affects women and disabled people disproportionately. The target includes full and productive employment for all and equal pay for work of equal value, ensuring that no one is left behind. An example to consider is work that has been funded in Malawi, including projects focused on job development and economic growth. This month I met Malawian farmers who had developed a fair trade enterprise that enabled many people in their community to develop sustainable businesses. Their venture supported others besides their own families, and enabled many children to attend school. I would like DFID in future to fund initiatives of that type and think about developing them.
The Global Concerns Trust has run several projects that have helped adults with disabilities to receive vocational training. In one project, 106 adults have been given training in carpentry or tailoring, and the trust has given 57 people the tools they need to start their own business. Our development portfolio should ensure that no one is left behind. Another project has given 62 people with disabilities vocational training, as well as training in business skills and prevention of HIV/AIDS, so that they can help others in their community. That has helped people to earn a living, with a more than fivefold increase in income on average for those trained. Those achievements may seem small in scale, but they have a huge impact. They allow people the opportunity to develop and grow, and to create businesses and become economic contributors. They are then not reliant on government project work or aid for sustainability.
It is important for developing countries to have sustainable economies for growth—but that is not the only reason. There are also enormous psychological benefits to being employed and economically active. It gives dignity and fulfilment. Without a job people feel that there is no future for them or their families. Jobs meet important psychosocial needs, and work is central to individual identity and social status, whereas conversely there is a strong association between worklessness and poor health, including poor mental health, and poverty. Working towards full employment in developing countries helps to create a foundation of growing prosperity, inclusion and social cohesion.
DFID works on private sector development, but there is much work to be done in that realm. We need to engage private enterprise to ensure that the millions become the trillions that we need to leverage our sustainable development goals and make progress. We need a focus on entrepreneurship and allowing people to develop their own skills and attributes, including technological skills, which are so important to economic development. We also need effective measures to eradicate forced labour, slavery and human trafficking. We need to work at many levels.
It is necessary to develop clear guidance to ensure that future assistance is clearly structured to create coherent opportunities. It is a fundamental issue and it is of the utmost importance that we get it right and continually assess our progress. We need the UK Government to report on progress in an open, accessible and participatory way, supporting the active engagement of all, including children and marginalised groups. As I have mentioned, a key issue is that we require better datasets, which should be disaggregated across countries. I am hopeful that technology will be able to transform people’s lives—particularly women’s lives—across the world. Tools and equipment reduce drudgery and increase the amount of quality time that can be spent with family and on education. I would like a fair trade symbol to be developed, if possible, to show in particular women’s contribution to the production cycle, where women lead and develop businesses in the developing world. I should be grateful if the Minister commented on whether that is a helpful idea.
Jobs and livelihoods are crucial for all. The sustainable development goals mean that we must make progress at home as well as in developing countries. More focus is required on enabling, and less on scapegoating of the workless. That will give a motivation for change. I look forward to working constructively in the International Development Committee on this issue, as well as at home in my constituency, developing jobs and livelihoods for all.
Chris Evans (Islwyn) (Lab/Co-op)
It would be remiss of me not to congratulate the Minister on his elevation to a knighthood. I am sure that as a former Vice-Chamberlain of Her Majesty’s Household, who is traditionally held hostage in Buckingham Palace before the state opening, he had plenty of opportunity to lobby the right people, and his lobbying has come to fruition.
It would be remiss of me, too, not to pay tribute to you, Mrs Moon. Through your membership of the Select Committee on Defence you have become an expert in foreign affairs, international development and safety and security around the world, and I pay tribute to you for all that you have done in that field. You are now a leading light in this Parliament on those issues.
I want also to pay tribute to the hon. Member for Stafford (Jeremy Lefroy), whose speech taught us all a lesson. I have been a Member of Parliament for six years. So often in this place Members stand up, and we hear them read out a speech; but with his speech today the hon. Gentleman proved that he cares—and cares passionately. Throughout our debate we have seen something that we should remember in the midst of the referendum—many people try to divide us into in and out camps, but the one thing that unites us is that we are human. People in developing countries may live in places whose names we cannot pronounce, and that we do not understand; but if we care about poverty it does not matter whether it is in Blackwood or Newbridge in my constituency, Stafford or Mozambique. We all have a duty as human beings to care about those who are impoverished and who are suffering, around the world. The hon. Gentleman’s speech, and other speeches today, have expressed that.
There are many things we sometimes take for granted in the UK, which is one of the most developed countries in the world. We have fantastic infrastructure, such as our extensive network of motorways, which stretches across the country. We have the resources to put into projects such as HS2, to make a drastic improvement to rail links between the north and south. We do not have to rely on international aid for our business. Instead, we attract considerable foreign direct investment. Indeed, in 2014 the UK attracted foreign investment in a record 887 projects, which created more than 31,000 jobs in this country. Investors know that money invested in the UK is safe and will generate returns, in the main.
We are the lucky ones. For much of the rest of the world, specifically developing countries, the infrastructure and stability that we take for granted are simply not there. We have a responsibility to contribute towards the economic development of less developed countries, so those who live there become a market for us to trade with. More customers can never be a bad thing. Our assistance to developing countries in their efforts to industrialise, and to create business and thereby employment, is a moral duty. It will help to raise millions out of extreme poverty.
The United Kingdom has a long history of supporting international development. I may be partisan, but I am proud that the Department for International Development was founded by a Labour Government in the 1960s, under Jennie Lee, the widow of Aneurin Bevan. I welcome the commitment to more than double international development funding to £1.8 billion in 2015-16. We must ensure that that money is spent in the most effective way, providing the most value for money not only for our own citizens but for those we are trying to help. However, efforts so far have not been effective enough. The problem cannot be solved simply by throwing more and more money at it. We have seen over and over again that that does not work.
Although it is true to say that private enterprise contributes around 90% of jobs in developing countries, international aid must involve considerable planning and a joined-up approach in public institutions that takes a holistic view of a country. We must ask the question: what do they need, aside from money and finance, to do the business they need and to bring the jobs they need?
Businesses in developed countries rely on stability. It is simply not possible to do good business where there is war, conflict, crime and, above all, corruption. If we throw money at businesses in insecure countries, can we truly expect them to do well and ultimately provide jobs? It stands to reason that businesses will not prosper if they have to pay tributes or bribes to corrupt local politicians, or if corrupt businesspeople pocket aid money rather than invest it in their business. The president of the World Bank, Jim Yong Kim, said in 2013 that
“corruption is public enemy number one”.
In describing the effects of corruption, he said:
“Every dollar that a corrupt official or a corrupt business person puts in their pocket is a dollar stolen from a pregnant woman who needs health care; or from a girl or a boy who deserves an education; or from communities that need water, roads, and schools. Every dollar is critical if we are to reach our goals to end extreme poverty by 2030 and to boost shared prosperity.”
John Howell
The point the hon. Gentleman makes about corruption is a very good one. Is he aware that the country I look after for the Government—Nigeria—has a President who has come to power to try to cure the corruption problem there and is doing a very good job on it? We are trying to help that through a number of projects, including a very exciting one: the judicial college will help to train judges to be able to deal with that sort of situation.
Chris Evans
I am aware of the fantastic work in Nigeria and of the election of the President, who has got to the core of the problem. As we have seen in the past in places such as Rwanda, when corruption hits, it muddies the waters for fantastic projects such as those the hon. Gentleman mentions. It also gives rise to the idea that we should cut back on international aid and affects the efforts we are making.
Our strategy for international development clearly needs to focus on supporting the security infrastructure in developing countries and ensuring they have robust legal systems that can root out corruption. Security is fundamental to stability—I do not have to tell you that, Mrs Moon, since you are a long-serving member of the Defence Committee. Without stability, it is impossible for businesses to not only thrive but, in many cases, to survive.
The joined-up approach must also ensure that aid is given to education services and health services and invested in the infrastructure and logistics capability, which facilitate trade and economic growth in developing countries. A key reason for the rapid development of industrialised and highly developed economies is the heavy emphasis on education. A good, open and inclusive education system not only gives workers the basic skills they need to become a productive member of their local economy, but allows those with the ability to develop the skills to innovate and solve their own problems by developing their human capital.
Another key point is that the aid we provide should allow developing countries to help themselves, which we know they want, as nobody truly wants to rely on charitable aid. We all know the proverb, “Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime.” In this case, that is very apt.
If we do not focus our aid on the fundamental things without which business cannot flourish—security, law and order, education, healthcare and infrastructure—we run the risk of continuing the cycle of extreme poverty and unemployment. If crime pays more than work or education, it is no surprise that many young men in developing countries turn towards it. That is yet more evidence that developing economies need balanced and simultaneous improvement, investment and aid across the board. It simply will not do to build an extensive road network if corruption is rife, just as it will not do to tackle corruption without investing in infrastructure.
Some say that charity starts at home and that we should cut away aid to developing countries. To me, that is a narrow-minded view. If we support economies in developing countries, we open up new markets where we can sell our products. Surely that is a win-win situation, as we will bring millions of people out of extreme poverty—the goal we all strive towards—and create more export and business opportunities for British companies, creating more jobs at home. We have a moral duty when it comes to international development. I am pleased to see that everyone who has spoken in this debate, from all parties, shares that goal.
Several hon. Members rose—
Mrs Madeleine Moon (in the Chair)
Order. I need to go to the Front-Bench spokespeople at 10.30 am.
Wendy Morton (Aldridge-Brownhills) (Con)
I am grateful to you, Mrs Moon, for giving me the opportunity to speak. I will keep my remarks brief. First, I congratulate my hon. Friend the Member for Stafford (Jeremy Lefroy), who has over a number of years shown great passion, commitment and dedication to international development, and brings a huge experience and knowledge to this place. I have known him for a number of years. We have been to Rwanda, Burundi and Sierra Leone for Project Umubano, and I can vouch for his commitment to international development and in particular to entrepreneurship, livelihoods and jobs. This is a timely debate, following the debate in this Chamber earlier this week about the 0.7% target and the report on the implementation of the SDGs from the International Development Select Committee, of which I am a member.
I will keep my remarks to one simple fact: if we truly are committed to the 0.7% target, which I believe we are, and to the sustainable development goals, the way to move beyond aid and to move countries away from a dependency on humanitarian aid, with which I fundamentally agree, is through encouraging sustainable development and economic development. That means giving people a life chance, whether it is in our country or abroad. As the hon. Member for Islwyn (Chris Evans) said, if we teach a man a fish, he will feed several people. We must give people an education, which they need if they are to get on in life, just as they need to be able to earn incomes to look after themselves and their families.
DFID has a very good reputation for supporting many business projects. I have seen some of them, in particular in Nigeria. We need to keep our focus on enterprise and entrepreneurship. We need to keep women involved in this agenda as well, and above all, we need to recognise the value that business and enterprise can bring.
Stuart Blair Donaldson (West Aberdeenshire and Kincardine) (SNP)
It is a pleasure to serve under your chairpersonship, Mrs Moon. I congratulate the hon. Member for Stafford (Jeremy Lefroy) on securing this debate. It is not the first of his debates in which I have spoken in this place, and I am sure it will not be the last. I am delighted to contribute today.
As Members have said, goal 8 of the 2015 UN sustainable development goals makes promoting inclusive and sustainable economic growth, employment and decent work for all a key objective for the world to achieve by 2030. Sustainable economic growth will require societies to create the conditions that allow people to have quality jobs that stimulate the economy while not harming the environment. Job opportunities and decent working conditions are also required for the whole working-age population. An adequate supply of jobs is the foundation of sustained and growing prosperity, inclusion and social cohesion. Where jobs are scarce or where livelihoods leave households in poverty, there is less growth, less security and less human and economic development.
In the current turbulent economic environment, job creation is one of the most pressing global development priorities. The aim to support employment and livelihoods with rising incomes, dignity and respect is a development goal that the Scottish National party would like to see at the heart of the UK’s development agenda. Jobs connect people to their society and the economy. Access to safe, productive and fairly remunerated work is a key vehicle for battling poverty.
As has been mentioned, the World Development Report 2013 found that:
“Worldwide, 200 million people, a disproportionate share of them youth, are unemployed and actively looking for work. An estimated 620 million youth, the majority of them women, are neither working nor looking for work. Just to keep employment rates constant, around 600 million new jobs will have to be created over a 15-year period.”
It also highlighted that the problem in many developing countries was that, although unemployment rates could be low, only a minority of workers were wage earners. More than 3 billion people are working worldwide, but almost half of them are farmers or self-employed. Most of the poor work long hours, but simply cannot make ends meet.
The SNP is committed to advancing Scotland’s place in the world as a responsible nation by building mutually beneficial links with other countries, as outlined in the Scottish Government’s international framework. Since 2007, the Scottish Government have doubled the international development fund to £9 million per annum and launched the climate justice fund, bringing the total spend on international development work since 2007 to over £86 million. The SNP has also highlighted Scotland’s commitment to the sustainable development goals.
Work funded by the Scottish Government has included projects focusing on job development and economic growth in Malawi. For over a decade, they have supported the Scotland Malawi Partnership and its sister organisation, the Malawi Scotland Partnership, which is based in Malawi. Through the two organisations, more than 94,000 Scots and 198,000 Malawians work in partnership together, and more than 300,000 Scots and 2 million Malawians benefit from those activities every year. The main focus of the Scotland Malawi Partnership is to work in dignified partnership with local people or Ubale, as they say in Chichewa. Scotland is playing an active and important role in helping to support jobs and livelihoods in Malawi by building markets for Malawian products.
Kilombero rice is a high-quality aromatic rice which the Malawi Government believe is an important export crop. For smallholder farmers it is an effective cash crop, which is popular among the urban population. The challenge is to assist more farmers to turn their smallholdings into effective, market-orientated, small businesses, which together can dramatically improve the livelihoods of people in northern Malawi.
JTS—Just Trading Scotland—is a Scottish fair trade importer. KASFA—Kaporo Smallholder Farmers Association—is a farmers’ association in northern Malawi. They have been working together, with support from the Scottish Government’s international development fund, to improve livelihoods and to strengthen communities. Since 2009, JTS has been working to establish a market for Kilombero rice, selling through civic society groups in Scotland: schools, churches and fair trade groups. This in turn has encouraged fine food distributor, Cotswold Fayre, and larger retailers like the Co-op to stock the product.
Howard Msukwa and Kenneth Mwakasungula, who are both rice farmers, visited Scotland last month to promote the launch of the rice in Co-operative food stores across Scotland and to tell people about the project’s success. The benefits of the scheme have been recognised by local rice farmers in Malawi. I had the pleasure of hearing both gentlemen speak at the Scotland Malawi Partnership road trip in Aberdeen.
Over the last five years, membership of the farming association in Malawi has grown from 2,500 to 6,700. Northern Malawi now has an effective farmers’ organisation that can deliver training and cost-effective farm inputs, and plays a vital role in community development. More farmers can send their children to secondary school and the first students are finding places in universities and colleges.
The key to success has been to link farm development work with establishing markets, which offers farmers an assured income. This encourages them to invest time and money to transform their farms. With altitude, climate and weather conditions ideal for cultivating coffee, Mzuzu coffee is another crop with a fast-growing reputation from one of the best coffee-growing regions in the world. In the 2014-15 Malawi “taste of harvest coffee” competition, Mzuzu took the top five positions. Interestingly, the first coffee plant in Malawi was introduced in the 1870s by John Buchanan from Scotland—it originated in the Royal Botanic Garden in Edinburgh, so there is a strong historical link.
The recently completed project by Scottish Government-funded TraCSS—Trading with Climate Smart Supply—aimed to stimulate sustainable economic growth in Malawi through development of agricultural value chains in a climate-smart and pro-poor way. The objective was to improve the competiveness of tea, coffee and pigeon pea value chains in an inclusive way to deliver improved smallholder incomes and to reduce natural resource degradation. One of the outcomes of the project was the distribution and implementation of the “Handbook for Sustainable Coffee Production in Malawi” through the Coffee Association of Malawi—CAMAL.
I am coming to the end of my time. The work of the Scottish Government and the Scotland Malawi Partnership demonstrates how Government aid and civic society can work to create markets for developing countries that will support jobs and livelihoods in the developing world.
Imran Hussain (Bradford East) (Lab)
It is a pleasure to serve under your chairmanship, Mrs Moon. I follow other hon. Members in congratulating the Minister on his recent knighthood and elevation. In months to come, we may disagree on many things, but we can agree that there is no question of his commitment and passion to his current role and public service.
I also congratulate the hon. Member for Stafford (Jeremy Lefroy) on securing and introducing this important debate. He has a long-standing commitment and expertise in this area. Indeed, he was present when this important matter was last considered by the Select Committee on International Development. He made some important points in his excellent speech today and emphasised the importance of supporting industries such as construction and agriculture. He also made an important point about young people and putting more emphasis on education and training.
Hon. Members on both sides of the Chamber made passionate and important contributions about ending extreme poverty, at the heart of which is corruption. It is real and must be addressed. It is a major roadblock to economic development around the world.
Hon. Members referred to another important point: the SDG and whether it is over ambitious. I think it is time we were ambitious and aspirational. Unemployment around the world may not be eradicated by 2030, but we can have that vision and I ask the Minister to ensure we thoroughly mark the SDG8 indicators.
Regardless of who someone is and regardless of where they live in the world, a good job can change their life. Decent opportunities and decent wages provide families with shelter, food and security. That not only provides direct benefits for the earner, but their wage gets passed around the community and benefits others. We know this and it presents obvious reasons for helping to create jobs in developing countries. However, around half of the world’s population still lives on roughly $2 a day and the World Bank’s World Development Report 2013 estimated that 200 million people around the world were unemployed and looking for work.
Evidence shows that 600 million new jobs that are needed globally for a growing population and particularly in developing countries, so it is clear that much more needs to be done.
Mark Durkan (Foyle) (SDLP)
Should we not recognise that, even when people seem to be outside extreme poverty according to statistics and are earning more money, many are in newly urbanised centres in the developing world? Their income may be above the indicators, but that does not take account of the fact that they are paying crippling rents to live in shanty-town conditions, even though their working environment may be quite modern, and they pay huge costs for water. They may have a livelihood, but their living conditions may not be good.
Imran Hussain
The hon. Gentleman makes a pertinent and timely intervention. He is absolutely right: there is strong evidence to suggest that, for many people, employment does not mean they are not living in poverty or even extreme poverty in some cases. The other issue with regard to urban areas, which I raised in an intervention, is urban planning. That is another barrier and we need to give it a lot more thought.
Certain aspects of DFID’s overall record can be commended. For instance, it provided £752 million of bilateral aid directly related to jobs, business and the economy in 2014. However, the figure fluctuated throughout the time of the last Government before the strategic framework for economic development set aside £1.8 billion, so I would be grateful if the Minister gave an assurance that that spending will be maintained following the bilateral aid review. Can he also indicate when we will have the findings of the bilateral aid review or report?
There are also specific areas where I will give credit where credit is due. DFID is regarded as an expert on mid-level private sector development programmes, and I hope it learns from the success in that area and applies it to others. The International Development Committee, whose Chair, my hon. Friend the Member for Liverpool, West Derby (Stephen Twigg), is here today, noted that DFID also has excellent examples of work in areas such as public financial management that it should build on.
Nevertheless, I seek clarification from the Minister on a number of areas. First, on SDG 8, can he assure me that the indicators will be thorough when we get them? With regard to private sector development, we welcome work that facilitates the development of sustainable and secure jobs in developing countries, and we recognise that the majority of jobs will be created in the private sector. Indeed, the private sector provides some 90% of jobs in developing countries, according to various reports.
That is not to say that we are supportive of all measures. I have a particular concern about the expertise of staff in DFID working on private sector development—the Independent Commission for Aid Impact found in its May 2014 report that there were gaps in knowledge and experience. I would therefore be grateful if the Minister told me whether progress has been made in addressing the concerns raised by the commission. How many full-time staff in DFID are working on private sector development? How many, if any, are externally contracted staff brought in to advise on private sector development projects? How many staff working on private sector development come from backgrounds of working in the private sector and working on businesses in developing countries? Does DFID make training and mentoring opportunities available to staff working on private sector development, so that they can build their expertise? I appreciate that the Minister may not have all the answers to hand, but I would appreciate a response, even if it is a written one, at some stage.
The final issue I want to raise is working conditions. We cannot overlook the potential influence that DFID has in helping to reform labour practices and working conditions in developing countries, so I would like assurances from the Minister that any aid or assistance provided by DFID or other Departments to foreign states or businesses is provided only with assurances that they abide by working standards.
The Minister of State, Department for International Development (Sir Desmond Swayne)
It is a pleasure to follow the hon. Member for Bradford East (Imran Hussain), and I thank him for his kind words. He referred to my passion, but it is clear that his passion equals, if not exceeds, mine, as does that of the hon. Member for Hackney North and Stoke Newington (Ms Abbott). I sometimes imagine that we disagree less than we think, but what is clear is that we all share the same objective and the same passion.
Today we have debated a very important, game-changing report. Since that report, we have been pushed in a direction that we were very keen to head in in the first place. We have created a new directorate for economic development by combining five separate departments. We have created a new youth and education department to focus on the transition from school to work, and to drive that focus through all the bilateral relationships and all our programmes. We have implemented a new growth diagnostic. This is the focus that my hon. Friend the Member for Stafford (Jeremy Lefroy) demanded there be in every bilateral relationship and every programme. The diagnostic informs every team of the barriers to growth in the countries in which they are working, so that they can devise programmes with the greatest impact on growth. My hon. Friend referred to the new agricultural strategy; it is, as he demanded, focused on smallholder agriculture. We will shortly publish—after we have disposed of that business on 23 June—our new economic development strategy.
The delivery of this agenda is vital to all the global sustainable development goals across the entire piece, and not just to the most obvious ones—1, 8 and 9. We will not see a reduction in world poverty of the order that we want unless we get a great increase in inclusive growth. In the past, we have had growth that has not generated inclusivity or sufficient jobs. It is vital that we get inclusive growth, because as we have heard so often this morning, we need 600 million new jobs in the next decade; otherwise, we will have a growing army of underemployed, frustrated and increasingly angry young people. As we have heard again this morning, lack of economic opportunity, a job and a livelihood is the principal driver of migration. That has been going on for decades. Millions of people have dropped everything that they have known and moved from their homes to the unknown in pursuit of economic activity. We are beginning to notice it as we see that tide of humanity coming up from south-Saharan Africa. Nevertheless, that driver has existed for decades, and we have to address it by providing those jobs.
I accept that not any job will do. It is no good having jobs that enslave. That is why we are still concentrating our programmes on work and freedom. There is what we are doing with the International Labour Organisation in Bangladesh, and there is the ethical trading initiative and the responsible, accountable and transparent enterprise initiative. Those are vital, but in the end it all comes down to jobs. The Government have an important role in that regard. My hon. Friend referred to the importance of public services. Yes, public services are important; there are important jobs and roles in public services. It is precisely for that reason that we take—and manage—the very considerable risks of working through Government-provided services in places such as Nepal, where our healthcare programme is channelled through Government provision, although it is a corrupt environment.
I share the passion of the hon. Member for Islwyn (Chris Evans) for tackling corruption. He is absolutely right, and that is why our programme on governance under SDG 16 is so important to our economic development programme. It is precisely for that reason that we held the anti-corruption summit and, the day before, the summit to engage with civil society on how it deals with that. As I say, the hon. Gentleman is absolutely right: where elites hijack the lucrative parts of the economy and wreck it, that impoverishes everyone. When a person gets an important job in the Government or the civil service because they are someone’s cousin, rather than capable of carrying out that function, that leads to complete inefficiency.
Over and over again, we find Governments getting in the way of the creation of jobs, through unwillingness or lack of capacity to raise revenue to invest in the necessary infrastructure; a lack of regulation, or over-regulation; or a lack of contract law or any other law, or of the rule of law. All those things drive away investment.
The real engine of job creation is private sector-led investment. One of the principal barriers to that investment thriving is the lack of necessary infrastructure. A reduction in productivity of some 40% throughout Africa and Asia is accounted for by the lack of necessary infrastructure, and it is estimated that Africa suffers a vital reduction of 2.1% in its annual growth rate as a consequence of the lack of necessary infrastructure.
Some 1 billion people have no access to electricity, and 1.3 billion live nowhere near a road. We must address those infrastructure problems. There is an annual deficit of some $3 trillion a year, in terms of the infrastructure that we need to invest in. Most of that must be provided by Governments. Grant aid will remain important for filling about half of that infrastructure gap, but all investors will need to increase their ability to invest massively if we are to do that. That is why we are working with the World Bank and the regional development banks.
We are working on projects on hydroelectricity in Nepal and power sector reform and roads in Nigeria. We have launched Energy Africa, working in 14 sub-Saharan African countries to address the needs of 600 million people who are without electricity. Although we only launched the campaign last year, we have proved the root; we kick-started the campaign with the work that we did with M-KOPA, which has put in place some 300,000 solar panels that serve 1 million people. It has also used highly innovative methods, so that power can be paid for using pay-as-you-go mobile phones.
Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)
Where we have been relatively slow in moving to meet the infrastructure needs of Africa, the Chinese have moved relatively rapidly. Does he agree that that is not entirely unproblematic, because the Chinese do not share our commitment to human rights?
Sir Desmond Swayne
The quality of our investment and the fact that we do not tie our aid certainly make our aid of a higher standard. I accept the hon. Lady’s challenge: we need to raise our game, and that is why we use the Private Investment Development Group to leverage more investment. Through an investment of $1.2 billion, we have secured $20 billion from the private sector and $9 billion from international financial organisations to provide early equity, long-term debt and guarantees to meet vital infrastructure needs. Equally, we use CDC, our development capital arm, to blaze a trail and show other investors that there are profitable opportunities even in the most difficult markets. We recapitalised that with some £730 million last year, and we are driving that into the infrastructure sector. CDC has backed some 40,000 GWh of production as a consequence of the move into the power market.
Mrs Helen Grant (Maidstone and The Weald) (Con)
On the point about opportunities, does the Minister agree that we need policy coherence between the climate change goals and economic development policies?
Sir Desmond Swayne
My hon. Friend is right. Climate-smart development must be integral to everything we do. It has to be a part of it. It is not a box to be ticked; it must be designed into the programme from the start.
My hon. Friend the Member for Henley (John Howell) mentioned the prosperity fund in his intervention on my hon. Friend the Member for Stafford. I take a slightly different view of the prosperity fund. We are spending all this taxpayers’ money creating opportunities and opening markets, and my breath is taken away when other countries simply move in and take the opportunities that have been created by that investment. The prosperity fund’s primary objective must be to reduce poverty. However, it is right that that fund should make British companies alive to the opportunities available to them. We will not tie our aid.
As an aside, I point out that 80% of our procurement is with British companies simply because they are the most competitive we can find, but my hon. Friend the Member for Henley drew attention to an important point in the piece. This is, of course, an enormous agenda. It is a whole trade facilitation agenda, and my hon. Friend mentioned the importance of trade envoys. We spend about £1 billion a year on trade facilitation and improving the ability of the least developed countries to enter our markets and to trade effectively. Trade dwarfs aid. It is a vital part of the agenda. The hon. Member for Bradford East raised the vital issue of urban planning. It is precisely for the reasons that he gave that we launched the new programme for economic development in cities, and that will be driven forward with a will.
The whole piece, including TradeMark East Africa and the trade facilitation agenda, is part of the drive for economic development that is at the centre of everything that we do regarding the provision of jobs. I come back to a point that has been made several times this morning: it is all about jobs. We need 600 million high-quality new jobs that will not impoverish and enslave people. That is what we have to deliver. I defer to my hon. Friend the Member for Stafford to sum up the debate.
Jeremy Lefroy
I am most grateful to everybody here for their valuable contributions. We have touched on a huge range of subjects that are vital to consider in relation to jobs and development. The hon. Member for Strangford (Jim Shannon) spoke about the need to tackle unemployment everywhere, and the importance of small projects. The hon. Member for East Kilbride, Strathaven and Lesmahagow (Dr Cameron) mentioned the important work that the Scottish Government do through their development fund, and how critical it is to work with young people. The hon. Member for Islwyn (Chris Evans), in a powerful and passionate speech, spoke about the business environment, the importance of tackling corruption, stability and direct investment.
My hon. Friend the Member for Portsmouth South (Mrs Drummond) spoke about many issues, and particularly the importance of the digital economy in the developing world. My hon. Friend the Member for Aldridge-Brownhills (Wendy Morton) mentioned the importance of education. The hon. Member for West Aberdeenshire and Kincardine (Stuart Blair Donaldson) spoke about the vital nature of partnership working and the work that the Scottish Government have done in partnership with Malawi on Kilombero rice and, indeed, Mzuzu coffee, which I have had the pleasure of tasting. The hon. Member for Bradford East (Imran Hussain) spoke powerfully about the need to be ambitious and aspirational, and touched on city planning.
The Minister spoke about DFID’s work, which I commend. He indicated that DFID is moving powerfully in the directions in which I would like to see it go. He spoke about infrastructure and Energy Africa, which my right hon. Friend the Member for Welwyn Hatfield (Grant Shapps) instituted last year, and about how that is already making progress.
Above all, there is a passionate desire here to work for inclusive, job-rich growth in developing countries, because that is important for the people in those countries, and because it allows them to stay where they are and not put pressure on our country. It is in their interests and ours.
Motion lapsed (Standing Order No. 10(6)).
Electric and Low-emission Vehicles
(7 years, 10 months ago)
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Glyn Davies (Montgomeryshire) (Con)
I beg to move,
That this House has considered infrastructure and regulations to support electric and low-emission vehicles.
We have worked together a lot in various all-party parliamentary groups and on various issues, Mrs Moon, but this is the first time I have served under your chairmanship, and I very much look forward to it. There should be a large measure of agreement on this subject; I do not expect much disagreement. My interest is in securing information from the Government, rather than challenging them on policy, so this should be a pretty easy debate for you to chair.
I am not in any way a petrol-head—I am not even a car enthusiast. The drivers behind my interest have been more to do with climate change, the targets we set in 2008 to reduce carbon emissions and, following on from that, safety and training within the motor industry in relation to ultra-low emission vehicles.
The transformation we are seeing in the motor industry in our country and across the world is happening much quicker than we might have anticipated a few years ago. Last year, there was a more than 50% increase in the number of pure electric vehicles sold in Britain. We heard last week that by 2025 all new vehicles in Norway will be electric or low-emission vehicles, which is a tremendous change that will accelerate. This is not one of those issues where we are talking about what might be achieved. It is only five years since most motor companies decided to go down this route. Obviously Toyota started in the 1990s, but five years ago every car company in the world started to recognise that electric vehicles were going to be the future and were moving quickly down the road.
Additionally, we are seeing the development of driverless cars and trains. We are seeing an absolute transformation in the way in which we will use our roads in future. There are many important associated issues. One is the massive investment needed in the vehicle charging network across the country—the infrastructure, electric charging points and hydrogen charging points. We need unbelievable investment, which is the purpose of my speech.
We also need investment in training and developing technicians to support electric vehicles. The main driver behind my initial interest in this subject was the climate change targets we set in 2008 to meet the fundamental target of an 80% reduction in our carbon emissions by 2050. The stepping stones are the fourth and fifth carbon budgets—we are currently discussing the fifth carbon budget—and we want transport to contribute to that. Power generation has changed an awful lot. Generally speaking, we will meet the targets, but transport and heating are two areas that simply have not moved as quickly as we might have wanted.
Neil Parish (Tiverton and Honiton) (Con)
I congratulate my hon. Friend on securing this debate. The Select Committee on Environment, Food and Rural Affairs recently looked into air quality, and one issue is the hotspots in the cities where we have very high levels of nitric oxide. We therefore need to get our diesel lorries, cars and buses out of those areas. We need more electric cars and electric vehicles. Government support to install the necessary plug-in points, and so on, especially in the centre of cities, is important to increasing air quality in those hotspots.
Glyn Davies
My hon. Friend is certainly right, but it goes much further than that. We are seeing a whole new industry develop. The motor industry is a big part of the British economy, and it will completely change over the next 20 years. My interest in the climate change targets led me to accept an invitation to go to the BMW training centre at Reading. It was an eye-opener in several different ways, and not just my drive in an i8, which I would recommend to anyone. It is a bit like being in a rocket—it is an amazing experience. The visit helped me to understand what is happening, particularly on the development and training of technicians.
The second eye-opener was on the safety of working on electric cars. I had not realised that the batteries in electric cars are 600 V. Any mistake results in death or very serious injury. That is the reality, so training is crucial. Anyone who works on an electric car without experience and training puts themselves in great danger. We have a lot of work to do to ensure that people are properly trained. Of course, the main distributers already ensure that they have people who can work on such cars, but it will not be long before electric cars enter the second-hand car market and are taken to local garages and to people who do a bit of second-hand car repair. We have to avoid the sorts of accidents that will seriously damage the industry. Developing and discovering technicians is becoming increasingly difficult. The Institute of the Motor Industry tells me that its surveys show that more than 80% of small independent garages have huge difficulty recruiting technicians. Will the Minister comment on how we can increase the numbers, and the skills, of technicians available to work in this emerging industry across Britain?
Julian Sturdy (York Outer) (Con)
My hon. Friend is making a powerful argument about technicians and the way that technology is moving. I am delighted that York was awarded “Go Ultra Low” city status for its work on installing electric charging points to move the electric car industry forwards. He is right about infrastructure, but does he agree that electric cars will not solve the whole problem and that we have to consider hydrogen, too? Does he agree that Germany and Japan are moving their hydrogen technology forward at a rapid pace? Is that not something that the UK should follow? We need to train technicians in hydrogen technology, as well as on the electrical side of things.
Glyn Davies
My hon. Friend is absolutely right. We do not know exactly what the future holds. We should use the term “ultra-low emission vehicles,” rather than “electric vehicles,” because hydrogen fuel cell technology may well develop quicker. Things change incredibly quickly. It is only five years since the companies starting producing electric cars. In another five years, who knows? Hydrogen fuel cells might be the future, but that technology requires massive infrastructure investment, too. Unless people can charge their car at a reasonable distance from home, the industry will not take off. That is one of the issues the Government face. There has to be an element of assessment of what the future will be, but having said that, we must be prepared for technology and invention taking us down a road that we had not wholly anticipated taking.
There are three points that I wish to raise with the Government; I am keen to hear the Minister’s response to them. First, I am not a natural regulator, or a person who would naturally support new licensing regimes; I would probably support the opposite approach. However, this is a massive industry. The IMI claims that by 2030 there will be a commercial and social benefit of £51 billion. I do not know how accurate that figure is, but clearly there will be a huge commercial benefit from what is going to happen. There is potential for a huge export business. All those things will happen, but we must have the safety and the technicians. Developing that side of the industry is important. It is not just about having the ability to manufacture cars; we also need the technicians to support that industry, and at the moment we just do not have them. We have to develop a system to deal with the safety aspects, and probably to help the development of a professionalism in working with these low-emission vehicles.
The Government might have to consider providing financial support, and they will certainly have to introduce a licensing system, because one death in an electric vehicle would clearly be massively tragic for the individual concerned and their family, and also tragic for the entire industry. A report of a death from an electric car on the front page of the Daily Mail would inflict a massive blow on an industry that I think will be hugely important to the future economy of our country.
The second issue is whether the Government should financially support a training industry. Again, I am not a natural supporter of Government intervention, through finance, in commercial markets, but the Government already support the development of the electric car industry. We offer grant support for the purchase of new vehicles, to reduce their price and to develop the industry, so I do not see any reason why we ought not to consider supporting the training infrastructure that is absolutely vital if the industry is to develop successfully. That is another issue that I would quite like to hear the Minister comment on.
The third issue is about the IMI. I have been very grateful for its advice and support; it makes a very strong argument on this issue, and that has informed some of the things that I have said this morning. I hope that the Minister would consider meeting the IMI to talk through the points that it makes very powerfully and persuasively. In my view, such a meeting would be very helpful, and I hope that the Minister is willing to agree to it.
David Mowat (Warrington South) (Con)
My hon. Friend is giving the Minister some good points to consider; I have a further point that he might wish to consider about this industry. In most EU countries, electric cars increase carbon emissions because of our current generating profile. As was rightly said, the fifth carbon budget is under consideration. Do we not need to be aware that this technology, at least for the next decade, will potentially increase carbon emissions in the UK and most parts of Europe?
Glyn Davies
I thank my hon. Friend for that intervention. That is a comment I have heard before. However, we are developing a completely new technology. The aim is lower emissions. We are trying to reach a decarbonisation target. Unless we achieve the aim of decarbonisation, this industry will not deliver what we want. However, I think that in the longer run, this is the route that we will go down. Practically, this is what is going to happen, and we need to take commercial advantage of this opportunity.
James Heappey (Wells) (Con)
My hon. Friend has secured an excellent debate, and he is being a very useful advocate for electric cars. However, does he agree that the great advantage of electric cars, as part of the electrification of both transport and heat, is that they present a fantastic storage opportunity within the grid, which may help us to achieve our decarbonisation targets, rather than making them more difficult to achieve?
Glyn Davies
Again, that is a hugely helpful contribution to the debate. I am on the Environment and Climate Change Committee with my hon. Friend, and we know how important the development of storage is for the future. Electric cars are potentially one of the major means of storage. If their use develops quickly, as I expect it to, they will be a major contributor right across the board to our meeting our decarbonisation targets.
I do not disagree with the Minister; I hope that he can respond to the questions that I have put to him. This debate is the start of a major discussion about the development of a new industry, and I look forward to hearing his response to it. In closing, may I say how grateful I am to those hon. Friends who have intervened? They have made very good points that I probably should have included in my speech.
The Minister of State, Department for Transport (Mr Robert Goodwill)
It is a great pleasure to serve under your chairmanship, Mrs Moon. I congratulate my hon. Friend the Member for Montgomeryshire (Glyn Davies) on securing the debate. I must admit to being a petrol-head, or rather a diesel and steam-head. Nevertheless, I understand that although it is important that we preserve our historic vehicle heritage, we should also look to a more sustainable future. I assure the House that the Government are committed to positioning the United Kingdom as a world leader in electric vehicle uptake and manufacture.
Under the Climate Change Act 2008, the UK became the first country to introduce a legally binding target on climate change—an 80% reduction in greenhouse gas emissions by 2050. Transport needs to play a leading role, both to meet this important national target and to address air quality issues in the UK.
In the transport sector, emissions are dominated by those from road vehicles. We have therefore set ourselves the aim of nearly every car and van on our roads being a zero-emissions vehicle by 2050. That will require all new cars and vans on sale to be zero-emissions by around 2040. I understand that this is a bold and ambitious target, which is why we have in place one of the most comprehensive support packages in the world, and at the last spending review we committed over £600 million to help grow the UK market for these vehicles.
Neil Parish
I congratulate the Government on the money they are spending in this sector. However, in the particular hot-spots within cities, where there is actually a court case for Britain to reduce its emissions by 2025, there is a need to act much more quickly, particularly in those inner-city areas where we have problems with nitric oxide.
Mr Goodwill
Thankfully it is not nitrous oxide, which would be a laughing matter. Nitric oxide and nitrogen dioxide are major pollutants. Of course, now that we know more about what is happening in diesel engines after the Volkswagen scandal came to light, the Government are working on that issue. Indeed, I am working with my fellow European Ministers, particularly those in Germany, to address that problem. Sustainable vehicles such as electric and hydrogen cars, which produce no tailpipe emissions, will certainly play a very important part in the transport sector.
It is interesting to note that although the record on car emissions has been disappointing, trucks have been operating pretty much as they should, mainly due to the fact that the monitoring equipment, which previously was too big to get in the boot of a car, is now able to be put on the back of a lorry. So the truck and bus sectors have actually been very good.
Since 2011, more than 70,000 claims have been made for plug-in car and van grants. At least £400 million has been committed to this scheme. With the grant guaranteed until at least March 2018, tens of thousands more motorists will be helped to make the switch to a cleaner vehicle.
Electric vehicle sales are now growing rapidly. Registrations reached a record high in 2015, as 28,188 new electric vehicles arrived on UK roads. More electric vehicles were registered in the UK in 2015 than in the previous four years combined. I am very proud of that progress. Electric vehicles have the potential to unlock innovation and create new advanced industries that spur job growth and enhance economic prosperity.
The low emission vehicle industry already supports more than 18,000 UK jobs and is a key pillar in our ambition for a low-carbon, high-tech, high-skills economy. The UK is already attracting global investment. Nissan’s LEAF, which is built in Sunderland, makes up 20% of electric vehicle sales across Europe. Geely has pledged £300 million to make plug-in hybrid taxis and vans at a new plant under construction in Coventry, creating 1,000 jobs. Ford’s Dunton technical centre in Essex is one of only two global hubs for the development of its electric powertrains.
Support for electric vehicle charging infrastructure has also facilitated the growth of home-grown and ambitious small and medium-sized enterprises. For example, in 2015 Chargemaster, a company that designs and manufactures its products in Milton Keynes, launched its new UltraCharger, which is already being sold in the UK and abroad.
The electric vehicle market is already a success story for the UK, but we need to maintain momentum if we are to meet our ambitious goals. We recognise the need to develop manufacturing and servicing skills to support the growing ultra-low emission vehicle market. The Government have set out an industry-led approach to skills training and apprenticeships. The new Institute for Apprenticeships’ programmes are already emerging, for example at Gateshead College’s skills academy and at Nissan in Sunderland. I understand the point that my hon. Friend the Member for Montgomeryshire made: as cars get older and move down the vehicle food chain, so to speak, there will be more call for servicing at local garages. It is important that they have the skills to service the vehicles safely and so ensure that we do not have any nasty accidents.
In terms of air quality, the Office for Low Emission Vehicles’ “Go Ultra Low” city scheme is dedicated to supporting cities across the UK to deliver transformational change. Some £40 million has been awarded to eight cities delivering more infrastructure, including lane access, additional planning requirements and a host of other measures. Those exemplar cities will be key in demonstrating ways of addressing air quality issues. The Government-backed self-regulatory body for the motor industry is committed to maintaining high standards covering new technologies, warranties, car service and repair. The garage finder helps locate businesses committed to the Chartered Trading Standards Institute’s approved code of practice. I hope the progress we made through the block exemption on data for the servicing of conventional vehicles will also help people access the data they need to service these new kinds of vehicles.
Thanks to Government leadership and growing private sector and local authority engagement, the UK now has more than 11,000 public charge points, including more than 850 rapid charge points. That is the largest network in Europe. There are also more than 60,000 domestic charge points. The latest statistics suggest that the average distance to the nearest charge point is just over 4 miles in Great Britain, although I admit that my constituency is a little bit of a charge point desert, and I hope that will be addressed. There are a number of such locations; the constituency of the Secretary of State for Transport is another that does not have a large number of charge points, and we need to address that in parallel with the tourist industry.
James Heappey
In advance of the Energy and Climate Change Committee’s hearing about electric cars last week, I did some work to look at the roll-out of petrol pumps for petrol engines a century ago. It was clear that the car came first and the petrol network thereafter. Incentivising the uptake of electric cars must surely be the priority, rather than incentivising the roll-out of charging points. Will the Minister comment on how the Department for Transport and the Treasury intend to compensate for the loss of petrol pump tax revenues as a result of an increased uptake of electric cars?
Mr Goodwill
I suspect that that question should be put to the Chancellor of the Exchequer, but falling duty levels from petrol and diesel because we have embraced this new technology would be a very good problem to have. Dare I say it, but I am sure the Chancellor or future Chancellors will come up with other, more devious ways of collecting tax from everyday people. As someone who owns a car constructed in 1900, I am well aware of the problems—particularly in the UK, as we were so slow to embrace the gasoline engine car—that people had refuelling their cars. They are not unlike the problems that people are having in charging their electric vehicles.
The electric vehicle only really makes sense on a slow overnight charge, when we have surplus electricity in the grid. Although fast charging is there to address issues of range, there is not really a prospect of thousands and thousands of cars up and down the country fast-charging at service stations. Electric cars make sense in terms of overnight charging at home.
A point was made earlier about sustainable electricity. We talk about zero tailpipe emissions, but that electricity has to be generated somewhere. Germany has sustainable delivery, but given its decision to abandon its nuclear programme and rely more on fossil fuels, the way that hydrogen and electricity are generated is a problem when it comes to better electric and hydrogen vehicles. Norway, with its large amounts of hydroelectricity, is well able to take that up.
Another point raised in an intervention was about electric cars as a means of storage. I was recently at a conference in Germany, where that issue was raised with Tesla. One of the issues is the number of cycles that a car’s battery may have to undergo if it is used as a means of storing electricity to be released into the grid. Some of the manufacturers are concerned that the battery life of their vehicles—it is very good, and better than many expected—could be compromised by large numbers of charge cycles being used in that way. An alternative is that when cars are scrapped the old batteries could be put into banks and used for emergency power supplies in hospitals or to augment the grid.
David Mowat
I was listening carefully to what the Minister said about the potential for increased carbon emissions due to this technology, notwithstanding the storage point, which I accept. He said that there were 28,000 electric cars in the UK. Does his Department make any attempt to measure the incremental increase in carbon emissions that that has caused, given our current generating profile and our likely profile in the short term? Is that number measured at all? I know that is an issue for the Energy and Climate Change Committee.
Mr Goodwill
The calculation certainly needs to be done as we roll out these vehicles. I expect that the Department of Energy and Climate Change is making those predictions. It depends, as my hon. Friend said, not only on the proportion of sustainable vehicles in the fleet, but on how that electricity is generated, particularly off-peak and overnight. Nuclear energy—the Government are determined to press forward in building a new fleet of stations—is ideally suited to overnight charging using off-peak electricity.
Throughout this Parliament, charging infrastructure will also be delivered through dedicated schemes for cleaner buses and taxis. As part of the £40-million “Go Ultra Low” city scheme, millions of pounds of funding will contribute to infrastructure deployment across eight cities in the UK. Those projects are focused on the most advanced technology for fast, reliable, smart and easily accessible charging for every driver. Highways England, which the Government have more control over than cities, has £15 million of funding to ensure that there is a charge point every 20 miles across 95% of the strategic road network, with rapid charging where possible.
Hydrogen fuel cell vehicles also have an important role in decarbonising road transport. I heard what my hon. Friend the Member for Montgomeryshire had to say about driving the BMW vehicle. I drove the Honda vehicle, and it was no different from driving any other car, which is probably a problem solved. It was a pleasure, and I did not know that it did not have a normal engine under the bonnet. We are supporting infrastructure provision in line with the current state of market development. The Government provided £5 million of funding to help develop 12 publicly accessible hydrogen refuelling stations to support the roll-out of hydrogen vehicles. All 12 are being commissioned during the course of this year and will provide a significant first step towards an initial hydrogen refuelling network.
Just last month, a refuelling station in Teddington in London was officially opened by the Under-Secretary of State for Transport, my hon. Friend the Member for Harrogate and Knaresborough (Andrew Jones). The network of stations will support vehicle manufacturers that are introducing their first models of hydrogen fuel cell vehicles. Indeed, our support for hydrogen for transport has helped secure the UK’s status as one of only a handful of global launch markets for hydrogen fuel cell vehicles.
There is much more that I could have said about our ambitions to press forward with this new technology. I am grateful to my hon. Friend for securing this debate on an important subject. I underline the Government’s commitment to ensuring that these sustainable new technologies are rolled out in the UK.
Question put and agreed to.
Further Education Colleges: Greater Manchester
(7 years, 10 months ago)
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Mike Kane (Wythenshawe and Sale East) (Lab)
I beg to move,
That this House has considered further education colleges and skills in Greater Manchester.
It is a pleasure to serve under your chairmanship, Ms Ryan. May I beg your indulgence and that of other Members? As this debate is about Greater Manchester, we should pause for just a second to reflect that today is the 20th anniversary of the devastating IRA bomb in our city. I remember exactly where I was that day: I was loading my bike on to a car in Northenden, five miles away, and I still heard and felt the blast. I was one of the first civilians to be allowed through the cordon by the security services that week to see the impact at first hand. There were 200 people injured and £1 billion-worth of damage, and 1,000 business properties were wrecked. I pay tribute to the then Prime Minister, John Major, who stood side by side with the Labour authority at the time and—it is worth putting on the record—with the European Union, which pumped tens of millions of pounds into the regeneration of our great city, which started its great renaissance back then.
Greater Manchester is a city region of 2.7 million people and the fastest-growing metropolitan economy outside Greater London. The GM economy has great assets in health and life sciences, finance and professional services, as well as the creative and digital sectors, but there are considerable challenges with employment inequality and regeneration, about which there is wide consensus between stakeholders. Greater Manchester is at the forefront of moves to devolve central Government powers in England, which reflects the strong governance in its combined authority. Although it faces some challenges, the college sector in Greater Manchester also has considerable strengths. There are 21 colleges in the Greater Manchester region: 10 further education colleges and 11 sixth-form colleges.
I want to preface my remarks today by talking about skills in Greater Manchester, productivity and the link between productivity and pay. Finally, I shall discuss in detail the current area review, which is ongoing and hopes to report back in June. In GM, the education, skills and work system is currently characterised by the fact that 40% of children who enter school are not school-ready. Some 47% of young people in GM are leaving school without English and Maths GCSEs. We have a long-standing issue with low skill levels in our working-age population. Qualifications are an imperfect proxy for skill: nevertheless, Greater Manchester has enduring skills gaps at both the bottom and the top end of the skills spectrum. In GM, 33% of the 16 to 64-year-old resident population had at least a level 4 qualification in 2015, compared with 37% across the UK.
However, it is important to remember that there are larger differences within the GM districts than between GM and the rest of the country. For example, 48.4% of Trafford residents hold a level 4 qualification or above, compared with 25% in Rochdale—my hon. Friend the Member for Rochdale (Simon Danczuk) is here today—where there is huge inequality in educational attainment. Last year, 10% of 16 to 64-year-old GM residents did not have any qualifications at all, compared with 8.8% across the UK. In part, skills difficulties in GM owe something to historical problems with schools in the city region. In GM as a whole, in the past academic year 55% of pupils obtained five GCSEs at grades A* to C, including maths and English, which compares with the English state-funded average of 57.3%. Again, there are large differences within districts in GM.
The Greater Manchester city region has been a long-standing and emphatic supporter of apprenticeships. The districts that comprise Greater Manchester co-ordinate a strategic approach to apprenticeships through the apprenticeship hub. Of just under 30,000 apprenticeship starts last year, 27% were for 16 to 18-year-olds, 29% were for 19 to 24-year-olds and 42% were for those aged 25 and older. By level, 64% of starts are at the intermediate level, just over a third are advanced and 2% are at the higher level.
Analysis of job growth and economic forecasting suggest that the strongest job growth will be at level 4. Meanwhile, only a small minority of starts in the further education system are at that level, so there is an active debate about supply and demand mismatching. Employers in several key sectors report difficulties in recruiting the skills they need, and any MP who visits factories, workshops or other places of work in their constituency will hear that from the managing directors of those companies. In my constituency alone, I have recently been speaking to HellermannTyton, Manchester Airport and Endress+Hauser, and they have all highlighted that.
The city region is taking active steps to encourage more provision at level 4, including investing in apprenticeships and supporting the concept of an institute of technology in Greater Manchester. If I may be so bold, I really think that the agenda our current mayoral candidates should be talking about is how we close the gap in the Manchester economy. We spend roughly £23 billion on public services and we raise roughly £18 billion. The first job of any new Mayor will be to break even—to bridge that gap—so that we can become more powerful as a conurbation.
The skills challenge is not simply on the supply side, however; there are also issues relating to skills utilisation. For example, in recent years the number of graduates has risen faster than the number of graduate jobs in the local economy, in spite of Media City, the growth of Spinningfields as a financial district and the growth of parts of central Manchester as an agglomeration of law firms. Demand for skills is also likely to be constrained by the business models of GM employers. I am loth to criticise employers, but it is clear that many in the city region pursue low-cost, low-value, low-skill business models to a greater extent than is the norm in the UK. That has to change.
Let me move on to productivity. Labour productivity in Greater Manchester is lower than the UK average. In 2014 gross value added per job in GM was £39,000; in the UK it was £45,000. There are productivity gaps between GM and the UK in all the main sectors, with the notable exception of manufacturing, where GM has an advantage. The largest productivity gaps are in the knowledge-intensive sectors, including financial and professional services and property. In my recent discussions with Accenture, the company was very clear that the Greater Manchester economy lacks digital skills, which will be one of the largest growth areas in years to come. The low-productivity sectors account for a growing share of jobs; in 2000 they represented 35% of employment, but by 2014 the proportion was 40%. Overall, GM has a £10.4 billion productivity gap with the rest of the country.
Low pay is a significant problem in Greater Manchester. Nearly a quarter of jobs in GM pay less than the living wage. In some districts, such as Oldham and Rochdale, the proportion is around 30%.
Liz McInnes
I am grateful for my hon. Friend’s gratitude—I can see that he is flagging a little. He makes a very good point about areas that get less than the living wage. My constituency is the second-worst in the north-west for constituents not being paid the living wage, which 40% of my constituents do not get.
Mike Kane
I could not agree more. The key thing is that it is a complicated mix of skills, qualifications and pay. I do not want to turn this into a row with the Government, but Opposition Members do not believe that the national living wage is the actual living wage, as defined by the Living Wage Foundation. As I said earlier, we need employers to invest in technology and the skills of their workforce, so that people can move up from cleaner to chief executive in all the companies in the conurbation.
Greater Manchester wages are still recovering from the effects of the recession. There has been a decline of living standards in Greater Manchester, where they have fallen faster than elsewhere in the UK. Average hourly pay in 2014 was below that of 2002. In 2004 workers earned £11.62 on average for every hour they worked. By 2014 that was £11. Since 2009 wages have fallen by 10%, and last year inflation-adjusted annual median pay was more than £1,200 a year less than the UK average. Low-paying sectors account for 36% of all jobs in GM’s total employment market of 1.2 million jobs, and some 400,000 people work in those sectors. Approximately 130,000 women and 90,000 men were low paid in 2014. Men’s wages declined most during and after the recession, leading to a shrinking of the gender pay gap due to that levelling down. By 2014, after adjusting for inflation, men earned, on average, £12.92 an hour and women earned just £10.37—a 25% differential. Well over half of young people under 25 are low paid.
The national programme of post-16 reviews was announced in July 2015 and will run for almost two years until summer 2017. There will be 41 reviews in total, covering all parts of England. The University and College Union has raised a number of serious concerns about the Government’s area-based review programme, both in general terms and specifically in relation to Greater Manchester. Currently the net liabilities of the post-16 sector are estimated to be £1.5 billion and there are around 80 colleges in discussions about mergers. Over the past five years, funding has fallen by nearly a third in key areas such as adult education. If we add inflation-based costs, colleges need to make efficiency improvements of around 40% to 50%. At the same time, the general trend is that quality is worsening, according to Ofsted, which is a damning indictment of the Government’s record in the sector.
The review in Greater Manchester started in September 2015 and is now reaching a conclusion. The core aim of post-16 area-based reviews is to ensure that colleges are in a stronger position to deal with the challenges they face in the future, making them more financially sustainable and better placed to provide the education and training needed in their local economies and communities. The July 2015 policy statement on the area-based reviews set out the expectation that they will lead to fewer, larger colleges. The draft proposals would create a number of new groupings in the further education sector: a group in the north comprising Bolton College, the University of Bolton and Bury College; a group in the east comprising Stockport, Oldham and Tameside Colleges; and a group in the centre that would include the Manchester College and Trafford College, along with a number of other training partners. There are also FE colleges that are yet to declare any alignment.
A significant flaw in the review process has been the exclusion of 11-to-18 schools and university technical colleges from discussions about the future structure of 16-to-19 education in the city region. Although there are good logistical reasons for managing a review process with a limited number of institutions, there are more than 50 schools with sixth-form colleges in GM, educating more than 8,000 young people. Some of those sixth forms have very small numbers and may not be financially sustainable at current and future funding rates.
There is also a problem with the banking system. One of the key barriers to implementing change in GM is the banks’ attitude to the sector. They insist on charging colleges with contractual break clauses for their loans when merging with other colleges. Those fees can amount to more than £1 million, which restricts viable colleges from coming together for the benefit of Greater Manchester. Does the Minister believe that colleges will have to divert funds from community development to cover those fees? The Department for Business, Innovation and Skills and the Treasury have set aside a figure for restructuring the FE sector nationally, which is rumoured to be in the region of £500 million. In GM it is being described as funding that will be available only as loans and not as one-off grants. Viable colleges will not want to saddle themselves with debt from the merger with another college.
So what needs to be done? It is clear that Greater Manchester needs to make progress in tackling the large number of people in the workforce without qualifications, as well as attainment at age 16 and higher level skills development. The area-based review and devolution of the adult education budget will help, but in the main they are focused on the 19-plus skills system. Much of the funding is spent on tackling the lack of achievement by age 16. The combined authority would like further powers over the 0-to-19 skills system, rather than its existing powers over the 19-plus skills system alone. Work is under way to put in place a memorandum of understanding with the Department for Education to ensure that its commissioning of provision is aligned with Greater Manchester’s needs and that decisions taken in one part of the system are consistent with those that we are making in the 19-plus part of the system, which will be a devolved matter.
The skills system is confusing for many people and the quality of advice and guidance on careers and education is variable. The Sainsbury review of pathways, which is due to be published shortly, could be significant in helping to clarify that. However, we need to recognise that current Government policy is that skills at level 3 and above are the responsibility of employers and individuals via adult learner loans. Such loans are currently available only for full qualifications, but many people and employers want and need specific short courses to gain employment or tackle skills shortages. Research has shown that 40% of digital and creative companies in Greater Manchester have lost business due to skills shortages. Targeted short courses, for example in social media, could help to solve some of those issues. Greater Manchester is therefore working with BIS as part of the devolution deal to examine the potential for flexibility in adult learning loans. It would be great to hear the Minister’s views on that.
We need to increase employer engagement in the skills system. We know, as local MPs, that there is a huge mismatch. There are some great examples, but there is a lack of consistency across Greater Manchester. We have to work with employer groups to get the message out about investment in skills and to get their input into the provision that GM needs to meet its future needs. We need better modelling of workforce requirements, so that we can train our young people for the jobs of the future. The apprenticeship levy is an opportunity to drive higher level skills development for new recruits to GM companies and to upskill the existing workforce, which will drive higher levels of productivity in GM firms. Greater Manchester has made the case to the Government for greater involvement in the apprenticeship levy implementation. It should also be noted that the devolved Administrations in Scotland and Wales have far greater control over the way in which the levy is spent. The area-based review will help shape an important part of the infrastructure that GM needs to develop future skills, but it only will be part of the solution.
Ann Coffey (Stockport) (Lab)
It is a pleasure to see you in the Chair, Ms Ryan. I congratulate my hon. Friend the Member for Wythenshawe and Sale East (Mike Kane) on getting this important debate for Greater Manchester. The decisions made in the review will have far-reaching consequences for young people and employers in the region. He gave an excellent and comprehensive outline of some of the issues that we need to tackle.
In my contribution, I will refer first to the excellent report prepared by Councillor Andy Sorton, who represents one of the priority 1 areas in Stockport—the Brinnington and Central ward. “Educational Attainment in Priority 1 Areas” was produced in July 2015. In his foreword, he sums up the problem:
“Recent GCSE results showed a substantial drop in attainment for secondary school children in priority areas. Attainment in the Central Area of my ward fell from a low base of 36% attaining 5 A*-Cs in 2012-13 to only 14.3% in 2013-2014, a drop of 21.7%. In Brinnington this drop was 43.2% to 20.9%, a 22.3% fall. To contextualise this, performance in Stockport was, on average, 58.4%.”
The latest available figures, for 2014-15, show an improvement on that 36% attaining five A* to Cs in Central, but in the Brinnington area there was a further fall back to 15.3 %, a drop of 6 % on the previous year. Average attainment for the borough was 58.3%, similar to the previous year. Those are shocking statistics.
Stockport is a borough of contrasts, with areas among the 1% most and 1% least deprived in England. The “State of the Nation 2014” report, in a summary of the overall progress being made across the north-west, commented:
“38 per cent of poor children fail to achieve the expected level in reading, writing and maths at age 11: this varies from 32 per cent in Halton to 48 per cent in Stockport.”
Interestingly, of the four secondary schools with the highest number of students from priority 1 areas, when looking at English and maths GCSE results, only disadvantaged pupils at Stockport Academy performed well when compared with their peers by Ofsted. Stockport Academy was built under the Building Schools for the Future initiative of the previous Labour Government, recognising that issue of inequality of attainment for children in poorer areas.
There are further statistics, such as the December 2014 ones on 16 to 18-year-olds classified as NEET—not in education, employment or training—which suggest that 11% of young people from priority 1 areas fall into that category. The comparable figure for the rest of the borough is 4%. Also, 18% of 18-year-olds in priority 1 areas are not in education, employment or training. On absences, pupils from priority 1 areas are almost three times more likely to have an unauthorised absence from school than pupils from outside the areas. Also, 12.4% of all pupils from priority 1 areas were recorded as “persistent absentees” in the 2013-14 school year. That is more than twice the average rate across Stockport, which stood at 6.1 %. The unemployment benefit claimant rate in priority 1 areas is three times the average for the borough. We all know the lifetime effect of failure in the education system for young people and their families.
In an October 2015 letter sent to Greater Manchester MPs, David Collins, the Further Education Commissioner, and Peter Mucklow, the Sixth Form College Commissioner, announced the area review of post-16 education and training institutions. The letter stated:
“This is an important opportunity to shape the provision for learners and employers in the Greater Manchester area and to ensure clear, high quality professional and technical routes to employment, alongside robust academic routes, and better responsiveness to local employer needs delivered by strong, high status, and where relevant specialist, institutions.”
I agree.
I also agree that savings could be made by amalgamation, with consequent administrative changes, such as the sharing of human resources and payroll, or by looking at duplication of course offers, provided that no young people are disadvantaged by travelling costs. There could also be an argument for having one principal for all the colleges. The area review, however, must also address that issue of inequality of attainment in secondary schools, and the response of the post-16 sector to that.
In the area review, I want to see proposals for further education that will engage young people, such as those in Brinnington, because the challenges are huge. If young people have lost interest at school and have stopped attending, how will that change when they reach 16? How will their educational attainment be improved by a further education offer when they have already failed in the secondary system? At the very least, the offer that Stockport College or colleges in other areas make must be local, and attendance must be affordable for the young people and their families. They must believe that what is on offer will make a difference to their life, that it is something they want to do, and that they will get a job, or self-employment, from it.
Those young people have ability and they are creative, but they are young people for whom the education system and the wider social care system have failed. They are the children of the children I worked with as a social worker; some are the children of those children. Failure will be the inheritance of their children, and they and the wider community will continue to pay a price for that.
Those issues are, of course, not within the remit of the area review, but the response to the review has to have regard to the circumstances of those young people. I will be interested to hear whether, as part of the review, any young people talked to the commissioners about their issues and how they might be engaged more in learning and developing the skills that future employers will need.
As my hon. Friend the Member for Wythenshawe and Sale East mentioned, we are going through huge changes in jobs as a result of automation. I am the co-chair of the all-party group on retail, and we are undertaking an inquiry on the effect of automation on jobs. It is clear that there will be more jobs in retail, but entry-level jobs will be not shelf-stacking, but managing the robots that stack the shelves. That will change the entry-level skills needed. We have to meet those challenges by ensuring that all young people—particularly those who are difficult to engage—have those skills.
I would like, in the area review’s reorganisation of colleges and courses, an offer of partnership working between young people and secondary schools in every locality. Without that, any reorganisation will continue to exclude young people from the opportunity to achieve something in their life by making them an offer that they cannot or will not accept.
Mike Kane
My hon. Friend makes a powerful point about joining up the skills system and the further education system. It is astonishing to most Labour Members, who have in general been warm supporters of devolution, that the schools sector has not been devolved. Michael Wilshaw, the chief inspector himself, has said that local politicians in Manchester and Liverpool should get more involved in improving standards in our schools. The one way in which we could do so is by having the school commissioner system devolved to the conurbations. Does she agree?
Ann Coffey
I absolutely agree. That is an excellent point, which I am glad my hon. Friend has made, because I was about to make it. I put that point to the FE Commissioner—indeed, I sent him a copy of that report—and he assured me that he was on the case. As my hon. Friend has just said, however, if we are to make partnerships work, we cannot have national Government in charge of one part of the partnership and local government in charge of the other. That is where there has been a history of failure in delivering social policy. On the provision of education and skills to young people, there is no longer a separate education agenda and skills agenda; they have to be integrated from quite an early age. I agree with my hon. Friend that for the partnership to work, it must all be devolved to Greater Manchester. That is my plea. I hope that we can have further discussions about how we can make the partnership work, engaging those all-important primary and secondary education systems in how the FE sector responds.
Simon Danczuk (Rochdale) (Ind)
It is a pleasure to serve under your chairmanship, Ms Ryan. I thank my hon. Friend the Member for Wythenshawe and Sale East (Mike Kane) for calling this important debate. I will concentrate my comments on the area review that is taking place and how it relates particularly to my constituency of Rochdale but also to the wider conurbation.
That review will not solve but should have an impact on some key issues that need addressing, including the need to improve productivity, as my hon. Friend said, not just in Greater Manchester but right across the country, and to improve economic growth across the sub-region, particularly in the northern part of the conurbation around Rochdale and Oldham and perhaps into Tameside. The review could also help to reduce benefit dependency. It needs to address the “hourglass economy” that the UK Commission for Employment and Skills has described, in which we have too many low-level skills and some highly skilled workers but we do not have enough people with middle-level skills. I hope that the area review will go some way to helping to address that.
I like the ideas in the review of looking for economies of scale—that is positive—realising real savings so money can be redirected to funding real priorities rather than structures, and devolving to and involving local authorities. However, I have some concerns about whether the review genuinely addresses problems with the curriculum offer in Greater Manchester. Will it reduce duplication of courses? Are the right courses being offered in the right places for the right people and the right companies? I am also concerned about the review’s scope. As my hon. Friend said, it does not include 11-to-18 schools or university technical colleges. That said, the process has been more positive than negative. Let me say also that the combined authority has done good work in bringing the review together and acknowledging that there are gaps in the work that has been done, not least on the curriculum but also on how FE connects with transport and on quality and the estates. That must surely be the next stage of what follows from the review.
Let me turn to Rochdale. Rochdale Sixth Form College and Hopwood Hall College both perform very well and are highly regarded by both their respective sectors and, most importantly, the learners themselves. I was at Hopwood Hall’s awards ceremony just last week, and was extremely impressed by the diversity of learners and the progress that they are making. I am relaxed about the sixth-form college. It performs very well, is very well run and is beginning to go down the road of acquiring academy status. Although I am also exceptionally happy with the performance of Hopwood Hall College, I am a little worried that it is currently looking like it will remain an autonomous and independent college, which means that it will not merge with any other colleges. I think that the management and leadership of the college will be happy with that, but I have concerns on two levels. First, it is a missed opportunity for the college’s leadership and expertise to be fed into helping underperforming institutions. Secondly, I am worried that the college will be squeezed between the bigger beasts that are being created. Although it looks attractive to remain independent—I am not making a Brexit argument in this instance—and it would be positive for the college solely to serve the precise needs of Rochdale, the truth is that the larger establishments will have better and bigger lobbying power.
Let me conclude my remarks with some points that the Minister may want to consider addressing. First, if several colleges remain independent, how will we guard against that squeeze? Secondly, what further scope is there to address the curriculum offer? Thirdly, will it be possible for the combined authority to reshape the proposals during implementation if they appear to be inappropriate?
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
It is a pleasure to see you in the Chair, Ms Ryan. I pay tribute to my hon. Friend the Member for Wythenshawe and Sale East (Mike Kane) for securing this most timely and pertinent of debates. I think we can all agree that we like to talk about this subject, but to have 90 minutes in which we are not discussing the European referendum is extremely welcome.
I put it to colleagues that Greater Manchester is of course the greatest city region in the country. Anywhere we go in the world, people know who we are. We are a great city region that is, through devolution, on the verge of even further greatness. With more autonomy over long-term investment, infrastructure and innovation, we have a once in a generation opportunity proactively to reshape our economy. We can encourage the growth of specific industries, build proper communities, not just lists of houses, and attract better paid and better quality jobs; but to be ready for all that, we must first build a robust platform for educational attainment and significantly improve our population’s skillset. I share the aspirations that have already been expressed for even further local control and devolution in this area.
Further education is the bridge between schools and the world beyond. It is the link between education and the workplace. It is the sector through which life chances are enhanced, horizons are broadened and second chances are realised. Further education is a stepping stone. It is a leg up. It is a place where ambitions are fostered, new interests are cultivated and barriers are broken down. It is a vital chapter in my own story and in thousands of British success stories. Yet too often FE remains the poor relation in Britain’s education sector. It is undervalued, under-resourced and too often a political football.
I would like to join colleagues in taking the opportunity to reverse that position by making four brief points: first, that the skills revolution that we need in Greater Manchester depends upon a reasonably resourced and strategically valued FE sector; secondly, that we must improve our ability to predict what skills our economy and businesses will need in future; thirdly, that political interference and goalpost moving must be stopped for the sake of our local economy; and finally, that there needs to be a radical rethinking of FE provision for people with special educational needs in Greater Manchester to ensure that wider life chances are truly accessible to all.
Let me start with the need for resources and investment. As it stands, nearly half of the population of my borough of Tameside hold no qualifications beyond level 2. An enormous 48% of residents are only qualified to GCSE level or equivalent. Just 17% hold traditional degree-level qualifications and only 1% are qualified to postgraduate level. To boost wages, attract better jobs and reduce the local welfare bill, it is self-evident that we must urgently upskill the local economy.
It has long been my view that the most effective way to increase educational attainment is to invest heavily in early-years education. Interventions from birth will make the greatest difference to an individual’s life chances and provide the greatest return on investment to the taxpayer for every pound spent. However, to fail to invest adequately in further education is to write off successive generations of young people who did not benefit from the intensive early-years opportunities that we all want to see.
GCSE results have improved strongly in Tameside recently, but there are still significant legacy problems. It is imperative that an ambitious skills strategy forms part of the Greater Manchester devolution strategy and named funds are earmarked within that to support quality local FE institutions. It is also imperative that funds are directed to where they are needed most. I do not think that I am ever described as a parochial MP, and I absolutely understand that a strong Greater Manchester is essential to a strong Stalybridge and Hyde, but I am concerned that local FE leaders tell me that they simply cannot access capital funding and perceive a bias towards central Manchester in the funding of projects that they know the neediest people in our local population will not be able to access.
Tameside has shown that even in these times of quite painful austerity, local investment really works. Through the bold Vision Tameside project, which is a collaboration between Tameside Council and Tameside College, a newly built college in the centre of Ashton is bringing learning into the heart of our local economy. I can share the great news that Vision Tameside is already showing signs of success. Historically, one of the biggest problems in our borough has been an exodus of young learners to FE establishments elsewhere, but this morning the new principal of Tameside College confirmed to me that admissions to the newly built college in Ashton for this September are up on last year by a quite phenomenal 500 places. Students will now learn in an exciting environment that is fit for purpose, with local shops and cafés benefiting from their custom and Tameside becoming a net importer of FE students—not a net exporter. I cannot recommend that vision highly enough.
My second point is that we must diversify our local skills mix. We must get better at predicting what skills the economy in Greater Manchester will really need. As it stands, the skills base in Tameside is unequivocally too narrow. The latest labour market data that I have for this debate suggest that I have more individuals employed in health, social care and education in my constituency than in all other occupations put together. That is clearly not a sufficiently diverse employment base.
I also have, however, twice the national average number of constituents employed in the manufacturing industry, with thriving employers such as the Hyde Group, Smurfit Kappa and Kerry Foods. Even though I said I would not mention the EU, I cannot resist praying for a remain vote next week to protect jobs in the manufacturing sector. Although I will always value public sector jobs and will fight to defend the role of manufacturers and producers, we also need to understand what Tameside’s and Greater Manchester’s role might be in a future, more knowledge-based, economy.
Quality apprenticeships in relevant areas, like the creative and digital training opportunities, are being provided locally by Brother UK, and that is an excellent start. I would also like to see a focus on future roles in emerging sectors such as green and low carbon technologies. We need to work more closely with our existing employers to map their likely medium-term needs while we try to attract other employers and steer our economy’s longer term needs.
My third point is that political interference is actively harming the success of further education in Greater Manchester. Just as primary school teachers have seen SATs altered at the last minute and secondary teachers have seen GCSE requirements amended without sufficient warning, so educators in the further education sector have seen goalposts moved counterproductively by the Government with their heavy-handed approach to remodelling qualifications. The most acute example of this is perhaps the reforms to functional maths and functional English assessments. Such courses provide the opportunity for those who have missed out on essential GCSE-level qualifications to have a second chance at acquiring those core credentials. The Government have now introduced external testing to replace teacher assessment, which has moved the goalposts so dramatically that pass rates in Tameside have halved, and in many places have fallen to single figures. If we make it impossible for people to acquire basic level numeracy and literacy skills, we effectively consign them to the scrapheap, and there will be no winners from this approach.
Finally, as the parent of a child at a special educational needs school, I cannot contribute to a debate such as this without mentioning the dire need to improve further education opportunities for those with special and complex needs. Take autism, for example. It was my great privilege to help Ambitious about Autism’s youth patrons to develop their employ autism campaign, which highlights that although 99% of young people with autism want to work, only 15% of adults with autism are in work. That is a shocking one in four young people with autism not accessing education beyond school.
The employ autism campaign asks for more opportunities to develop skills post-16. As part of my drive to see Greater Manchester become an autism-friendly city, I want us to take a lead on this agenda with more specialist courses and more specialist day colleges, and with no young person left behind through a lack of post-school opportunities.
Ms Ryan, thank you for the opportunity to contribute to today’s debate and to re-establish further education in Greater Manchester as a top priority. Let us invest where it is needed and build a competitive sector that makes our region’s labour market fit for the future.
Jeff Smith (Manchester, Withington) (Lab)
It is a great pleasure to serve under you as Chair, Ms Ryan. I congratulate my hon. Friend the Member for Wythenshawe and Sale East (Mike Kane) on securing this debate and on the way he comprehensively set out the context in the education landscape. It was an excellent introduction.
I want to make a few short remarks about the process and scope of the area review, and about the effect on my constituents in south Manchester. Further education plays a vital role in our local economies and our communities. It can boost growth and drive personal achievement and social mobility. The best FE colleges are adaptable to local needs and provide skills and training where local areas need them most, and they can design courses according to local needs, such as the innovative higher education/further education hybrid courses offered at the Fielden campus of Manchester College in my constituency, so I welcome the chance to discuss FE and skills in Greater Manchester today.
We have a mission in Greater Manchester to skill up our communities to meet the challenge of the modern economy and to give them the flexibility and adaptability to thrive. We need to match our economic success with educational success, so there are questions about how we change our system to educate our young people, and how we deal with adult retraining and skilling up an underqualified population. These are big challenges. Overshadowing any discussion about FE and skills in Greater Manchester is the area review. Some would say that the area review has overshadowed the sector itself in recent months. The view among some people I have spoken to in the sector is that it has come at the wrong time, has the wrong focus and has distracted people from getting on with the job of improving standards in the sector. Certainly the delay in the process has not helped anyone.
There are merits, as my colleagues have mentioned, in some of the aims of the area reviews, but there is certainly a feeling that the area reviews are more about saving money than improving access for students or raising standards, which is not helped by the fact that the initial guidance on the review was about cutting costs, not meeting learner needs. The Greater Manchester area review is a process that should serve the needs of students and the local economy, not the need of the Government to cut budgets.
There is a wider problem about the scope of the review. People in the sector feel that the review has not addressed the real problem, which is the skills shortage that we have heard about and how we design a whole sector to meet the challenge. The Library has confirmed that the most popular reason given by employers in Greater Manchester for having hard-to-fill vacancies was,
“Low number of applicants with the required skills.”
There is an argument that the area reviews have been too focused on structures and governance, rather than tackling the challenge. The review falls short of tackling the long-term reforms that Greater Manchester needs, and it may turn out to be a missed opportunity to properly review post-16 provision across the system.
Liz McInnes
Does my hon. Friend share my concern that the Greater Manchester Combined Authority has spoken of its dissatisfaction with the proposals made by the 10 FE and 11 sixth-form colleges involved in the steering group? The GMCA is concerned that only two mergers have so far been proposed involving five colleges. Is my hon. Friend going to talk about that in his speech?
Jeff Smith
I will certainly refer to that. Such concerns are legitimate and the combined authority is right to raise them. They certainly need to be addressed.
The process needs to look at further education provision as a whole and should consult all post-16 providers. The Association of Colleges, Unison, the University and College Union and others have all pointed out the dangers of a narrow review process that ignores large numbers of FE providers. In its review of post-16 Government policy, the Public Accounts Committee argued:
“It is unclear how area-based reviews of post-16 education, which are limited in scope, will deliver a more robust and sustainable further education sector.”
I believe that is the case in Greater Manchester.
The area review, as we have heard, has not encompassed university technical colleges or the 50 school sixth forms in Greater Manchester, in which more than 8,000 young people are taught. There are 11 sixth-form colleges included in the Greater Manchester area review, of which 100% are judged good or outstanding. They are already doing a really good job for the students they serve. I have no problem with including them in a review of further education and skills in the region, but they do not work in isolation. The system needs to work together. I do not see how we can design a system for the future without looking at the whole system in the present.
The review also does not deal with the key issue of devolved funding. As we know, the Government have already moved to devolve £6 billion of health and social care funding to Greater Manchester, and there are plans of course for a wide package of devolution of resources that we in Greater Manchester have long argued for. I echo the comments made earlier about the need to have oversight of school improvement on a local and regional basis. The devolution of the adult skills budgets was announced in March, but there is no real sign of the same for 16 to 19 and apprenticeship funding. There is a question to be answered here. This inconsistency of devolution of funding arguably prevents the Greater Manchester Combined Authority from shaping the reviews according to the real demands of the region and the various parts of the sector that are trying to deliver the change that we need.
The needs of Manchester’s students are changing. There is higher demand than ever for English and maths courses; more students are choosing work-based learning over traditional FE pathways; and there are big increases in demand for English for speakers of other languages—ESOL—courses at a time when there has been a cut in Government funding. Giving the Greater Manchester Combined Authority the power to manage and distribute funding according to need could help colleges to be more flexible in such developments. That feeds into the wider agenda. If we are going to devolve responsibility we need to give the combined authority the proper means to deliver it.
Finally, I want to highlight some specific concerns about the proposed Tameside, Oldham and Stockport merger that will particularly affect my constituents in south Manchester. The various merger possibilities have been described as shotgun weddings, and it does feel a little like that. I wonder how much consideration was given to the idea of some of the less successful colleges working with a variety of the more successful ones, rather than being forced into mergers that may not be appropriate. What appears to be happening on the east side of the conurbation is a merger of three less successful colleges into, potentially, one larger less successful college. I hope that that is not what will happen: we need to learn lessons from successful colleges.
Leaving aside the estimated £50 million of taxpayers’ money that may be needed to make the mergers viable, I am concerned about the effect on learners—particularly the nearly 400 constituents of mine who attend Stockport College. I am concerned about what the new arrangements may mean for them in terms of their courses and access to institutions. There is a worry that my constituents currently studying at Stockport and the other colleges will suffer reductions in the number of courses, increases in journey times or other disadvantages as a result of the proposed mergers. I seek reassurance that my constituents will not be detrimentally affected.
It appears to many people that the review has not yet dealt properly with issues of quality. It has simply looked at college mergers to address financial concerns. It has not dealt with retraining and reskilling and has not yet come up with a convincing plan that will give us the confidence that we have an FE sector fit for the job of equipping our residents for the future. Greater Manchester residents deserve better.
Mr Gordon Marsden (Blackpool South) (Lab)
It is a pleasure to serve under your chairmanship, Mrs Ryan, and a great pleasure to be present at this debate. I congratulate all my colleagues who have spoken. My hon. Friend the Member for Wythenshawe and Sale East (Mike Kane) gave a speech that was a tour de force, covering the whole area. That does not always happen in such debates; sometimes cobblers stick to their narrow lasts, but my hon. Friend should be congratulated, as should my hon. Friends the Members for Stockport (Ann Coffey), for Manchester, Withington (Jeff Smith), for Stalybridge and Hyde (Jonathan Reynolds), for Heywood and Middleton (Liz McInnes) and for Rochdale (Simon Danczuk).
My hon. Friend the Member for Wythenshawe and Sale East introduced a personal point at the beginning of his speech, and rightly so, because the event he referred to was a seminal moment in the history of Greater Manchester. I hope I may be forgiven for saying that it gives me particular pleasure to be here today to hear the things that have been said, because I was born in St Mary’s hospital in the centre of Manchester. My parents came from Didsbury and Burnage, and I spent my first years—until I left school—in Levenshulme and Stockport, so the places and names that I have heard today have a lot of personal resonance for me, as well as their strategic resonance.
It is right to think of Greater Manchester as an organic area that had a long period of emergence and evolution. As a historian I am tempted to give a paean to the role of Greater Manchester in the history of the industrial revolution. [Hon. Members: “Go on!”] We do not have the time. People talk about the northern powerhouse and other such things, and how to replicate them elsewhere; I have on occasion said that the Minister should remember that the Construction Industry Training Board apprenticeship levy took a long time to get together, and in the same way we need to recognise that Greater Manchester’s cohesiveness and forwardness has not come about in a period of two or three years. It came about over 30 or 40 years, going back to the mid-70s when the Greater Manchester county was created, and the 10 boroughs entered it. The Government in the 1980s negatively and vandalistically got rid of that, with consequences that remain today in the area of transport. At the same time, that period was of seminal importance, because the 10 boroughs of Greater Manchester came together in particular to defend their municipal ownership of Manchester airport. In a way that started the process of cohering and evolving to the point where we are today.
My hon. Friend the Member for Wythenshawe and Sale East particularly talked about the fact that the Greater Manchester districts have for a long time been initiators, cheerleaders and co-ordinators for apprenticeships. When my hon. Friend the Member for City of Durham (Dr Blackman-Woods) and I compiled a pamphlet for the Smith Institute in 2013 about the work of local councils on apprenticeships, we highlighted the work of a number of Greater Manchester councils. That is something to remember in the context of my hon. Friends’ comments about the fact that, with regard to skills, the current devolution process is but half-formed. Without that involvement in apprenticeships, there is much that needs to be done about skills shortages that cannot currently be done through area reviews or by Ministers, however well-meaning.
My hon. Friend the Member for Wythenshawe and Sale East made a huge number of salient points and referred to the skills shortages in key areas. He was right to quote, as other hon. Members have, the concerns of the University and College Union. One of the things that is missing, by and large, from the area review process is involvement and consultation. That is a frequent issue extending through government. I see it when I am wearing my other hat, in higher education, where we await a major Bill. It is not just a question of getting things right with college principals or vice-chancellors. It is also a matter of getting things right with the skilled people under their remit: the junior lecturers and assistants, and all the people who keep those colleges, universities and campuses going. That is too often missed out of the process.
As I have said, colleges have done great work to support young people, but also older people, in gaining skills. They are vital to sub-regional economies. We cannot afford damage to the link between colleges and businesses or the many decent networks of colleges and schools in the area, through errors and failures in the Government’s area review programme, even if it is an unintended consequence. That is why one of the first things I said when I took on my role on the Front Bench in October was that FE is all about getting local people into work, with skills, in the local economy. That is not just a pious plea. It is very necessary to think about it now. In January 2015 Professor Alison Wolf, who as the Minister will know was the author of the Wolf review of vocational education—which has been praised and much quoted by the Government—said that Britain’s supply of skilled workers could “vanish into history”. We cannot afford to let talented and skilled young people—and older ones—fall by the wayside because colleges have closed and the funding is not there to develop the skills needed to boost sub-regional economies. To that I would add the vital role of FE colleges in the community in working with local authorities and local enterprise partnerships.
We have heard a lot today about the working out of the devo max process—the devolution process in the Greater Manchester area. I particularly emphasise the point that my colleagues made to the Minister about the potential for combined authorities to take on skills, education and training powers. Over-centralised Whitehall-led area decisions that are taken now could hamper their ability to do that effectively. That is particularly the case for utilisation of the adult skills and community learning budgets that are being devolved under the relevant part of the settlement.
I want now to talk about some of the particular issues that have been touched on today in the Greater Manchester context. One hon. Friend—I cannot remember which one—referred to the Public Accounts Committee December report, which mentioned the absolute necessity of delivering “robust and sustainable” FE solutions. At the time that was said, we saw two things in the Greater Manchester process. First, the timescale that the Government set out—this is true across the country—was ludicrously optimistic. We know that there have been problems, delays, and everything that has gone with that.
The second point that has come out of what has been said today is the tension between what my hon. Friends are talking about doing—taking on more powers—and the clear frustration of the Greater Manchester Combined Authority that it is waiting in the wings, almost as a shadow boxer, while the process is going forward. I refer again to the points made by the Greater Manchester Combined Authority in the FE Week article, which came after the fifth steering group meeting on 25 May. The Minister needs to take account of this:
“The GMCA said it ‘remains to be convinced’ that the proposed outcomes will ‘deliver the integrated learning infrastructure that is needed, taking Greater Manchester as a whole rather than focusing institution by institution’.”
It also said that it
“wants to ask the Secretary of State to award it the ‘power to make further changes to these proposals, should it become clear that the current options cannot deliver a Greater Manchester-wide learning infrastructure that meets needs’.”
I do not want to rain on the commissioner’s parade and echo what my hon. Friends have said about the significant amount of co-operation that is needed to go forward in a sensible way, and I know that the commissioners are constrained by the narrow remit the Government gave them, which has been quite clear in some of the things that have been said publicly and even more clear in some of the things that have been said privately. This is an iterative process, and I ask the Minister what he proposes to do to widen that remit and to give more of that ability to his commissioners and others to be flexible. The Greater Manchester area-based review progress report, which went to the leaders of the town councils, says:
“As Leaders will recall, the options chosen are not the decision of the GMCA, they are up to FE Commissioner, Secretary of State and College Boards…which are still incorporated bodies which no one has the right to close at present”.
That is the factual state of play, and it is therefore important that it is taken into account.
The Minister will know that there have been massive funding pressures in further education for several years, which have led to a £1.5 billion deficit across institutions nationally. The report that Bury College put forward stating why it wanted, or felt it needed, to enter into this process, said:
“The Further Education Sector has been subject to five successive years of funding cuts and fiscal restraints, which has weakened the financial stability of Colleges across the sector. No college has been immune to this impact and many colleges have already sought to mitigate the impact by exploring different structural arrangements such as federation, merger or shared services.”
I could go on about our critique of the way in which the Government have, while promoting apprenticeships funding, treated them rather as a one-trick pony and have not looked at other serious cuts, such as in adult skills, retraining and so on, but I will not. FE colleges have often been very adaptable, but that statement from Bury College demonstrates that even adaptable organisations need to have a bit of framework to breathe.
As my hon. Friend the Member for Manchester, Withington said, this process seems to be a shotgun marriage. There would have been more confidence in the process if those broader institutions had been brought into the equation. Greater Manchester is a particularly sharp example of that. Figures were quoted of the numbers of sixth forms in schools and the number of sixth-form colleges. Comparative to the number of sixth-form colleges countrywide, there is a very high proportion. It is therefore particularly important that some of the particular needs are met, both of sixth-form colleges that are included in the process, but also of schools and academy sixth forms.
James Kewin, the deputy chief executive of the Sixth Form Colleges Association, has talked about some of the flaws in the process in not including school and academy sixth forms. That, too, has been a problem. I ask the Minister again whether there is any prospect, even at this late stage, of taking account of that broader framework in the remaining reviews. When he or whoever comes to decide on the recommendations, will they bear that in mind when accepting or modifying the recommendations the Secretary of State receives?
We have also heard about the impact on students. As I reminded the Minister when we had a debate on the north-east FE situation at the beginning of the year, mergers between colleges can be particularly harmful to the social fabric and social mobility of young people in rural and suburban areas. Suburban areas are an issue in Greater Manchester, and the observations of my hon. Friend the Member for Manchester, Withington about how his students will be affected by what happens at Stockport College are a very good example. However, it is not just about the mass of students; it is also about some of the particular groups of students who may be affected. At the University and College Union’s recent conference, Elane Heffernan, a member of its disabled members standing committee, made that point, saying that FE is
“one of the most integrated places where you can be”
as a learner. I am conscious of what my hon. Friend the Member for Stalybridge and Hyde said about the need to beef up the role and position of students with special educational needs in FE, which is part of the point.
Another point I want to make is that the process will affect not just FE, but higher education. Literally thousands of people in the HE sector get their qualifications at FE colleges. Because of that, what happens to those FE colleges in the context of mergers will have a significant impact on the provision of HE in the areas concerned. I do not want to comment on the merits or demerits of individual proposals, but I am thinking particularly about the potential merger of the University of Bolton with Bury College and Bolton College. The Minister needs to think about that process as well, and I would like him specifically to address what will happen to higher education under this set of reviews.
To put this into the broader context, the Government’s Sainsbury review, which is very important, is about to come out, and hopefully a skills White Paper will come along with it. It seems bizarre to many of us that what is actually the higher skills issue is likely to be dealt with not in the new Higher Education and Research Bill, but in the schools-for-all Bill. I am not particularly concerned about where things turn up—it could be in one Bill or another—but I am concerned about the apparent lack of co-ordination and co-operation between the Department for Education and the Department for Business, Innovation and Skills. I am even more concerned because, at the end of the day—this comes back to the points that my hon. Friends made—if we are to be successful in driving forward skills for older people as well as younger people in Greater Manchester and elsewhere, there has to be a strong engagement between that process and the process of job creation which, of course, also involves the Department for Work and Pensions. If it all goes wrong, the Government will have a lot to answer for, not simply because the structure process has sometimes been untimely, but because of the way in which they have framed it.
My hon. Friend the Member for Manchester, Withington referred to many people having felt that, in this process, they were part of a shotgun wedding. Many of the processes may have been shotgun weddings, but we need to see what sort of baby they produce. The baby that they produce will be firmly the responsibility of this Government and those two Departments. I hope they will take on board what has been said about the combined authority, and think positively and creatively about widening its powers and allowing it, and the boroughs concerned, to have a real say in the final outcome.
Joan Ryan (in the Chair)
I am going to call the Minister now, but may I ask him to be sure to leave just a couple of minutes at the end, so that I can go back to the Member who moved the motion?
The Minister for Skills (Nick Boles)
I will be very happy to, Ms Ryan. It is a pleasure to serve under your chairmanship, and to respond to what has been a really interesting and constructive debate. I congratulate the hon. Member for Wythenshawe and Sale East (Mike Kane) on securing the debate and on approaching it in such a thoughtful and constructive fashion.
The area review is taking place in the northern powerhouse, in the Greater Manchester authority. I am sure that we would all be happy to admit that the co-operation between the Manchester authorities has been long standing and has many mothers and fathers. Nevertheless, I hope that hon. Members will recognise that on the northern powerhouse’s birth certificate the name George Osborne is there as “father”. The delivery of the vision of the northern powerhouse is what the area review and devolution of skills to the Greater Manchester combined authority are critically designed to achieve.
Mike Kane
The shadow Minister, my hon. Friend the Member for Blackpool South (Mr Marsden), is the historian, but I just want to point out to the Minister that it was Daniel Adamson who built the ship canal in 1860 and who coined the phrase “northern powerhouse” when he envisaged a single market from the banks of the Mersey estuary to the banks of the Humber estuary—but carry on.
Nick Boles
I am always happy to be corrected on a point of history; I am sure that there is room for Mr Adamson’s name on the birth certificate as well.
It is a great pleasure to respond, because normally I find in these debates that, when the fundamental purpose of the Government’s policy has been attacked, I have to spend so much time explaining and defending it that I cannot actually address any of the more detailed questions of implementation that have been raised. Today, given that there seems to be a general acceptance that, at least in principle, the area review has the potential to create a stronger and more sustainable system of further education in Greater Manchester, I hope that I can actually spend the time available addressing some of the particular points.
I will start with the points made by the hon. Member for Wythenshawe and Sale East. As his hon. Friends have said, he gave a brilliant exposition of the skills challenges facing the Greater Manchester area. He specifically asked about concerns raised by the UCU. I want to reassure him that last week I met the union’s general secretary to discuss some of those concerns and how we can ensure that, where possible, we consult trade unions and their members on some of the ideas emerging from the area reviews. I have asked the union’s general secretary to come back with some specific ideas about how that might work. I hope that will satisfy some of the hon. Gentleman’s concerns.
The hon. Gentleman asked an important question about break clauses on bank loans—I have been asked it before in the House but have never had long enough to go into detail. I know that this has caused people some concern. We do not yet have a specific example of a college that is facing a very substantial payment that it was surprised by and that it does not want to enter into. The first point to make is that in the restructuring of bank facilities it may be, in a merger or some other kind of transaction, that the bank will have the technical right to impose certain charges. It is a matter of negotiation. They may have the right to, but if they see that the overall new construction or group is actually going to be a better borrowing risk for them, and make it more likely that they will get their money back or be able to lend more money, which is what banks are in the business of after all, then they can novate loans—to use the jargon—without break costs when the new loan is lower risk.
The critical point, which will apply not only to break clauses but to everything in a sense, is that although we will be strongly encouraging colleges to undertake the changes and mergers when that is what is recommended, ultimately that will be a decision for them. They are independent institutions and they will be able to take into account the full range of costs and benefits. There may be costs, to some extent, or bank charges, but they will need to go ahead only if the benefits of other cost savings or advantages are greater than those charges. As I said, I hope that in reality those charges will not prove to be as much of a problem as the hon. Gentleman perhaps feared.
The hon. Gentleman raised a very interesting question that we will not be able to go into in great detail now. However, I hear him and have some sympathy with his point that adult learner loans are not available for short courses. Although we have career development loans, their terms of repayment are less attractive to students than those of adult learner loans.
Nick Boles
May I just finish my sentence and then I will be happy to give way? I understand the point. I think we need to learn from some past mistakes. If we start having the taxpayer subsidising loan provision for very short courses, which is not something I want to rule out in principle, one has to ask how the Government and the taxpayer will be reassured that those short courses are genuinely valuable—as well as being valuable to the individual and their employer, they have to have some transferrable skills value. That is so that taxpayers’ money is not subsidising activity that is beneficial only to that narrow employer in that narrow job. That is something we are wrestling with, and I would be happy to hear ideas from the hon. Member for Wythenshawe and Sale East and other hon. Members on the subject.
Mr Marsden
I am grateful to the Minister for giving way and entirely take his point about not wanting to subsidise—if I can put it that way—short-term courses that are not going anywhere. That might lead us into a broader discussion about credit accumulation processes and the rest, but I do not want to touch on that now. The point I want to make is that at the moment, as the Minister will be well aware, the take-up of those adult learner loans was somewhat less than 50% at the last count. It might be—dare I say it?—in his interests, or in the future interests of any person occupying his post, when negotiating with the Treasury, to make the point that there is this demand in the way that my hon. Friends have described, and that it could be valuable if a reasonable construction of it could be made.
Nick Boles
I hear that, and I assure the hon. Gentleman that the Treasury is very much aware of the issue. We have obviously expanded the application of advanced learner loans to a broader age group and a broader range of levels, but he is right that we nevertheless have more budget than is currently being utilised and there may be a way safely to extend its use. There are also issues with the Student Loans Company, which has a pretty big administrative burden at the moment, as he will be well aware. It manages those loans, so there are also technical implications. I would be very happy to discuss detailed ideas about that with hon. Members in future.
I want to move on to the question, which a number of hon. Members raised, about the involvement of schools in the area reviews, the request by Greater Manchester Combined Authority for greater power over schools and—the hon. Member for Stockport (Ann Coffey) raised this—whether what is going on in those schools is going to be considered as part of the area review. There are a couple of things to say. First, the regional schools commissioners are required to contribute to the underlying analysis for the area review and to be closely involved. The Greater Manchester Combined Authority is absolutely encouraged to have a very close relationship with the regional schools commissioner, as are individual MPs. I know that Government Members have started meeting the regional schools commissioners, as we have encouraged, and have found the meetings to be incredibly useful. Regional schools commissioners are available to meet hon. Members to discuss any concerns they might have.
On integration, in the sense of the programme of study that leads people and makes it more likely that they are going to succeed when they move into college and post-16 education, I hope that hon. Members will be willing to wait until the Sainsbury review and the skills plan are published. I can promise them that it will be very soon after the referendum, so it will give us something rather more interesting to talk about. I hope that will give a more complete picture of how we are looking at the curriculum, how people, including people with special educational needs, as the hon. Member for Stalybridge and Hyde (Jonathan Reynolds) said, can be best placed to succeed in that curriculum, and how we can ensure better access and a better step up into further education programmes than is currently the case. That will all be addressed in the skills plan and the Sainsbury review. We are keen to discuss that with hon. Members in time.
The hon. Member for Heywood and Middleton (Liz McInnes) intervened to raise a number of concerns—the hon. Member for Wythenshawe and Sale East also referred to them—about whether the area review specifically in Greater Manchester is ambitious enough and whether it is taking too long. Theresa Grant, who is chairing the review, is one of the most impressive public officials I have come across in my time in government. I am strongly inclined to agree with anything she says about any subject. As the representative of the combined authority, she does not believe that the colleges are being sufficiently ambitious. Concerns were raised that those that are hanging on to their independence, for understandable reasons—perhaps they are already good or outstanding—may not be looking far enough out and should think about the future landscape and opportunities, not just about rifts and threats.
I strongly encourage the colleges that are part of the review to take on board Theresa Grant’s comments and to work with her in further meetings—I believe that there will be another one next week—to try to see whether there is a way to grasp the opportunities more boldly than the initial proposals were grasped. That is my comment about her comments as chair, because ultimately it is for the review and the individual colleges within it to decide what recommendations they will adopt and to implement them.
I understand that there have been questions, not least by the shadow Minister, about whether we could give the Greater Manchester combined authority more power to enforce some of the recommendations. If we render colleges no longer independent, their whole balance sheet will suddenly come into the public sector balance sheet. I am not sure that Greater Manchester combined authority wants all the liabilities of the Greater Manchester college sector on its balance sheet as it starts life as a combined authority, and nor do we in Government. We must be a little prudent.
Having said that, those colleges will understand that the Greater Manchester combined authority will shortly control the entire adult skills budget. It will form outcome agreements with different colleges and will be able to move money around, as they can do already with capital, as has been noted. If we are in the business of pleasing our customers, I hope that all the colleges in the area review understand that the Greater Manchester combined authority will be a tremendously important one and take on board its recommendations on how the review should unfold.
I think I have addressed everything I had noted. If no one wants to intervene before I sit down, I am happy to hand over to the hon. Gentleman who introduced the debate.
Mike Kane (Wythenshawe and Sale East) (Lab)
It has been good to have the time and space to debate this matter and I thank everyone who has contributed. My hon. Friend the Member for Stockport (Ann Coffey) was right to highlight inequality within boroughs and not just between boroughs, as I did in my speech. We must reflect more on that in the review process. She continues to champion the cause of carers, people in care and their further education, which she does brilliantly in this House.
I could not agree more with my hon. friend the Member for Rochdale (Simon Danczuk), or rather I sort of agree and disagree. Level 2 to level 4 skills are missing. I believe, although I do not have empirical evidence, that globalisation and the advance of technology is sucking out some jobs as we go to advanced manufacturing in our economy. We must address that. People now in their 40s and 50s who did apprenticeships when they were young are being hit hard by globalisation and sometimes blame the wrong people politically. We as politicians must all think more about that.
My hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) is right that we must have strong local colleges. They are doing amazing things in Tameside. Agglomeration and specialism are the way forward, but it must be remembered that that is easier in the south-east where there is fantastic transport. There must always be a strong local element.
My neighbour and hon. Friend the Member for Manchester, Withington (Jeff Smith) is right that there is a feeling that this is more about form than function. It must concentrate on what the outcomes are for young people rather than protecting institutions as they stand.
The shadow Minister is an historian, and he does not have to prove his Mancunian roots to me. We have been talking about this ever since Arkwright, who powered his mill in Miller Street in 1792, and the industrial revolution—I will match my hon. Friend history for history. He is right to highlight the concerns of the UCU.
It is good that the Minister is talking to the trade unions. I will take his word about the break clauses and we will try to find specific examples to help the Government work this through. I will take him up on his offer to provide ideas for learner loans. I agree with him that Theresa Grant is one of the finest local government officers in the conurbation. She is leading on this and we wish her all the very best in the review.
Question put and agreed to.
Social Investment
(7 years, 10 months ago)
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Susan Elan Jones (Clwyd South) (Lab)
I beg to move,
That this House has considered support for social investment.
It is a great pleasure to serve under your chairmanship, Mr Chope. I think it was the former New York governor Mario Cuomo who liked to repeat this quote:
“You campaign in poetry; you govern in prose.”
I apologise in advance because many of the practicalities relating to social investment and social enterprises are technical by their very nature, so most of my speech will be in prose, and pretty dry prose at that, but just for a moment I want a word of poetry, or at least a word of vision, to remind us what social investment and social enterprises are all about. As Social Enterprise UK, the national body for social enterprises, puts it:
“Social enterprises trade to tackle social problems”
and
“improve communities, people’s life chances, or the environment. They make their money from selling goods and services in the open market, but they reinvest their profits back into the business or the local community. And so when they profit, society profits.”
As a Labour Member of Parliament, I was interested to learn that it was the great social activist and researcher the late Lord Michael Young, author of my party’s 1945 manifesto, who 53 years later, in 1998, founded the School for Social Entrepreneurs. That perhaps reflects the fact that some of the best ideas for social improvement today come from the social enterprise sector.
Social enterprises are everywhere and can do almost anything. They are coffee shops, cinemas, pubs, banks and bus companies, to give but a few examples. Allow me, Mr Chope, to use the example of a social enterprise in my constituency: Splash Community Trust, which runs Splash Magic. That social enterprise was formed to reopen Plas Madoc leisure centre after Wrexham County Borough Council decided to close it in April 2014. The local community came together to save the facility, which the Splash Community Trust now runs for the benefit of the community. Splash Magic provides not only swimming and leisure facilities for the local community, but employment for local people, tackling health, employment and social problems. It is a great success story. This debate is about Splash Magic and every other social enterprise in our country, and how best we can support them.
Jim Shannon (Strangford) (DUP)
I thank the hon. Lady for raising this very important issue. She has outlined one example of how social enterprises can make a difference. Some 2 million people have been employed through social investment, and it contributes £55 billion to the economy and has helped many social ventures. Does the hon. Lady agree that more community groups and small charities need to be aware of the help that there is in accessing funds, such as the Big Lottery Fund and other charitable funds, and that they should not be put off by long, complex forms and in-depth requirements, and be left feeling unable even to apply for community-changing grants?
Susan Elan Jones
I agree totally with what the hon. Gentleman says and the importance that he attaches to social investment—but now back to the prose. In 2012, according to ICF GHK’s report, “Growing the Social Investment Market”, which was commissioned by the Government, there were 68,000 social enterprises in the UK and they contributed at least £24 billion to the economy. Subsequent estimates suggest that the economic contribution could be far higher than that.
Social investment is of course the enabler of social enterprise. It is the use of finance to achieve a social as well as a financial return. The social investment market assists voluntary, community and social enterprises to raise capital that they may not be able to secure from conventional investment sources. It also helps investors to find organisations that will deliver for them a social as well as a financial return. The Charities (Protection and Social Investment) Act 2016, with which the Minister will be very familiar, gave charities the power to make social investments. I welcome that.
As it is often difficult for social enterprises to secure conventional bank loans, social investment is often a more suitable way for social enterprises to finance their activities. A significant reduction in grant funding in the voluntary sector and a move towards a dominance of contracts are two reasons for the increase in the popularity of social investment. Although social investors do expect a financial return, that often decreases in inverse proportion to the level of social return that investors wish to see. As a report for the Big Lottery Fund found, that means that social investors are often willing to accept lower financial returns if the social impact is greater.
Last year, a significant report was published. The “State of Social Enterprise Survey 2015”, supported by Santander, is the most comprehensive research undertaken into the state of the sector. It told of some great successes, such as how the proportion of social enterprises that grew their turnover in the 12 months prior to the report was 52%, well above the comparative figure of 40% for small and medium-sized enterprises. It also revealed that 31% of social enterprises are working in the top 20% most deprived communities in the UK. That is in itself an interesting figure and a sign of the social enterprises’ success.
However, the same research also stated that 39% of social enterprises believe that the lack of availability of funding or finance is a barrier to their sustainability, and although there was widespread support for the Public Services (Social Value) Act 2012, there was concern about its practical implementation. Both points need careful consideration and action.
I am sure that the Minister will want to praise Big Society Capital Ltd, which came about because people such as Martyn Jones, my predecessor as MP, campaigned on dormant bank accounts. Big Society Capital Ltd was set up under the Dormant Bank and Building Society Accounts Act 2008, which defined Big Society Capital as an organisation that exists
“to…enable other bodies to give financial or other support to third sector organisations”.
It was established by the Cabinet Office and launched as an independent organisation with a £600 million investment fund in April 2012. The investment fund comes from dormant bank accounts via the independent Reclaim Fund and four leading UK high street banks. Both my party and the Minister’s are rightly proud of Big Society Capital.
As co-chair of the all-party parliamentary group on charities and volunteering, I was privileged to chair a meeting recently on social investments. An interesting range of opinions were expressed, many by practitioners who deal with social investments and individuals who run social investment funds. There were many excellent contributions at the meeting. I pay particular tribute to John Smart of the transport industry social enterprise HCT Group, with whom I discussed some ideas in greater depth. In the light of the ideas raised at the all-party parliamentary group meeting, I will make the following proposals, and I would be grateful if the Minister responded to them in turn. First, I would be grateful if the Minister considered a change in accounting regulations to allow quasi-equity to be disclosed as equity rather than debt. It is often inappropriate and/or difficult for a social enterprise to take out loans. That is particularly true during their start-up phase, when they need capital for growth.
Under Charity Commission regulations, charities are unable to raise equity—that is, sell shares—or distribute reserves by way of dividend. That poses the question of how a social enterprise or charity can raise money for its development or growth. Quasi-equity investment allows an investor to benefit from the future revenues of an organisation. Under a quasi-equity agreement, an investor would receive a percentage of a social enterprise’s future earnings, which means that if the organisation performs well, the investor receives a good return. Conversely, if the organisation does not do well, the investor will receive little or no return.
In a typical social loan, the investor is investing in the organisation to help it to grow, taking the risk that the growth will occur. That is similar to a conventional equity investment, but the organisation does not issue shares. However, under current regulations, quasi-equity must be disclosed as debt on an organisation’s balance sheet. That can lead to the balance sheet looking over-geared, which is a particular problem when bidding for contracts, especially as commercial organisations tend to raise equity to fund expansion, and so do not face the same issues with their balance sheets.
A change in accounting regulations to allow quasi-equity to be disclosed as equity rather than debt would improve the social investment market. The change would be of great help to social enterprises that work with local authorities. When the social enterprise has the opportunity for open dialogue with commissioning authorities, it can explain its position and balance sheet. However, online portals are increasingly used as the method of bidding for local authority contracts, which provides no opportunity to explain the balance sheet position. Allowing quasi-equity to be disclosed as equity would go some way towards creating a level playing field between social enterprises and their mainstream commercial competitors. It would also be beneficial if contracting authorities could recognise that social enterprises, as not-for-profit entities, have different balance sheets from their commercial competitors.
Secondly, will the Minister consider an increase in the level of social investment tax relief? Individuals making an eligible investment can deduct 30% of the cost of their investment from their income tax liability, but only up to about £290,000 over three years. I know that there are many technical and legal issues, but change would attract more inward investment to the sector and allow social enterprises to expand and build on the good work that they are already doing to benefit society.
Thirdly, will the Minister further discuss the role of social impact bonds? There is clearly a wide range of different views on the subject, and I suspect that the Minister has heard many of them. The National Council for Voluntary Organisations, for example, is concerned about the fact that such a high proportion of the Cabinet Office’s spending—somewhere between £80 million and £105 million, I believe—is being committed to social impact bonds, which it sees as largely untested and as having a costly commissioning model. Although the organisation welcomes opportunities to learn more about how that model could be used to deliver social outcomes, it questioned whether SIBs should be such a high priority for the Cabinet Office, at the expense of other projects, until there is a better evidence base for their efficacy.
Some of us see social impact bonds as an effective way of de-risking contracts for the delivering social enterprise and the commissioning body, and as a good way for social enterprises to tap into available funds and have a social impact without the cost and commitment of loan or quasi-equity structures.
I am delighted to have had the opportunity to make my points today, and I look forward to hearing the Minister’s response.
The Minister for Civil Society (Mr Rob Wilson)
It is always a pleasure to serve under your chairmanship, Mr Chope. I begin in the traditional fashion by congratulating the hon. Member for Clwyd South (Susan Elan Jones) on securing the debate. I welcome her interest in a very inspiring sector. She said it was quite dry, but I found her comments very interesting and I will come back to some of her ideas in due course. Her comments should not have been unexpected because, as she said, she chairs the APPG on charities and volunteering. The group recently held a session on social investment, which obviously proved to be interesting and has generated a number of ideas.
Social investment can drive innovation in the sector, as we heard from the example of Splash Magic in the hon. Lady’s constituency. It is a powerful tool to tackle some of the biggest challenges in society today and, in the case of her constituency, to tackle jobs and growth issues. Social investment helps economic growth by supporting the UK’s thriving social economy. It also supports social innovation by channelling funding towards entrepreneurial solutions to longstanding social problems, and helps public services by delivering better outcomes and, in some cases, savings to the taxpayers.
I have embarked on an ambitious reform programme for charities and social enterprises because it is my aim to deliver a sector that is more independent, resilient and sustainable over the long term, and much better able to meet the challenges that it faces. Since the general election, the Office for Civil Society has supported the creation of a new fundraising self-regulator. I know that is not directly relevant to social investment, but it is still important to raising money for charities, in particular. The new self-regulator is being led by Lord Grade, as the hon. Lady will know. It has the legislative powers needed to give the public confidence that fundraising scandals are a thing of the past, and is a chance to restore the public trust and confidence needed so that a generous public continue to donate to the causes that matter most to them.
The new Charities (Protection and Social Investment) Act 2016 gives the Charity Commission tougher powers to enable it to regulate the charity sector much more effectively. As the hon. Lady said, the new Act also clarifies the law on social investment, enabling smaller charities to have the confidence to get involved in this hugely beneficial area.
The UK is now recognised as a world leader in social investment. For example, we set up the world’s first social investment bank, Big Society Capital—the hon. Lady went into some of its history—and the first social investment tax relief, which I will talk about further. The first ever social impact bond was also in this country, so we have a lot to be proud of.
We also created Access, the Foundation for Social Investment, to which the hon. Lady did not refer. That has £100 million to support more organisations to take on and get ready for investment, helping to stimulate the pipeline of social investment deals over the next 10 or 15 years. We have made money available through the local sustainability fund, which was created to help organisations to secure a more sustainable way of working by providing funding and support to help them to review and transform their operating models.
Jim Shannon
In addition to what the hon. Member for Clwyd South (Susan Elan Jones) said in her speech, we also recognise the good work of the Big Lottery Fund. It is always good to recognise organisations that make a significant contribution to social investment, and the Big Lottery Fund enables that to happen. Does the Minister feel it is important to encourage and support that?
Mr Wilson
The Big Lottery Fund has some £700 million of grants at its disposal each year, and it is an important part of the funding landscape in this country. It does an awful lot of great work, and I encourage organisations that perhaps have not made funding proposals to the Big Lottery Fund in the past to do so now. The Big Lottery Fund is trying to do a lot to make it easier for organisations to get hold of grants and to ensure that it is focusing on some of the more disadvantaged areas across the United Kingdom.
Returning to my previous comments, I want the leadership that the Government have shown on social investment to continue. The Government are therefore supporting social impact bonds, as the hon. Member for Clwyd South said, and so far we have created 32 social impact bonds, which is more than the rest of the world put together. We have enormous experience of social impact bonds and the social impact bond market. SIBs work on the principle that the Government pay only for the outcomes that we want to see and that we agree should be delivered. Social investors provide the up-front investment to scale up innovative services and are repaid by the Government based on the outcomes delivered.
SIBs are being deployed to get to the heart of some of the biggest challenges that we face as a country. They often focus on things such as early intervention, which will help us to contain the ever-expanding demands on our public services. I recently visited the AIMS—accommodation, intense mentoring, skills—project of the Local Solutions organisation in Liverpool, which is supporting young homeless people into accommodation, training and employment. The programme allocates a trusted mentor to each young person to provide a single contact point, delivering personalised support across multiple services. The programme is financed via a SIB and is a great example of how commissioning for outcomes can give social sector organisations the freedom to do what is needed, when it is needed. SIBs help to foster genuine partnership between the Government, social sector organisations and social investors, supporting organisations that can innovate in ways that big government finds difficult. Perhaps most importantly, SIBs focus on delivering meaningful outcomes for people, and there is more to come.
As the hon. Lady will probably have picked up, the Prime Minister recently announced our new £80 million life chances fund, which is an important next step on the journey and will show how social investment can transform local public services. The fund is a down payment on a social impact bond market that I hope and expect to be worth £1 billion by the end of this Parliament. I want to see more social impact bonds and to support those who want to use this innovative source of capital, which is why we are working with the University of Oxford to create a new centre for excellence that will develop world-leading research in social impact bonds and innovative Government commissioning and will provide the practical support that local commissioners need as part of that process, but there is more to the market than social impact bonds.
Susan Elan Jones
The Minister is making some interesting points about SIBs, and the debate will clearly continue among organisations, but may I draw him on to the issues of quasi-equity and of equity and debt, please?
Mr Wilson
The hon. Lady made three specific proposals. The first was a change to the accounting rules, which she believes will help social investment by disclosing equity, rather than debt. I understand that, and I am happy to look at it. The second was an increase in the level of tax relief. Obviously I will need to discuss that with Treasury colleagues. Again, I am happy to look at it, but I cannot give her any commitments. Thirdly, she wanted to discuss further the whole investment in SIBs, which I have been trying to address.
I will talk about some other issues, too. Alongside charities and conventional social enterprises, new kinds of businesses are committed to making a social impact through their business without having constraints on how they distribute profits. Such businesses are part of the UK’s already diverse and growing social economy, and an independent review is currently considering how to increase the economic and social impact of mission-led businesses in the UK.
The hon. Lady mentioned dormant assets, which is another area that offers real opportunity. I believe there is a host of such assets that belong, in aggregate, to the public and should therefore be used to benefit society, not specific firms that may be sitting, unwittingly or not, on these stores of potential public value. I have set up an independent commission on dormant assets to explore what additional assets could be released to good causes, potentially transforming the way we support the sector.
We have done, and are doing, a lot to support social investment, but I do not plan to be complacent. There is more that we can do, and I will continue to drive the agenda forward. The breadth and innovation of our social sector in the UK is truly inspiring, as the hon. Lady will have witnessed. We are surrounded by incredible organisations that deliver life-changing services and reach all corners of our society. For example, I visited the social enterprise Clarity, which has been providing employment for blind and disabled people for 160 years. Employment in manufacturing a range of beauty and household products enables Clarity’s staff to develop their independence, build their confidence and play a full part in society. Such organisations demonstrate exactly why I am so committed to the sector, which is why I am determined to build their resilience and sustainability so that they can thrive and grow.
Again, that is where social investment comes in. I want to make it easier for anyone to be a social investor, from individuals to foundations to corporate organisations. I want to help investors to connect, through their investments, with the causes that matter the most to them. I would like to see pension providers offer products in which a percentage of their members’ money goes to social investments. We are seeing that work successfully in the French pension system, in which billions of euros have been channelled to social impact investments. Product providers in this country have so far made limited progress on developing social investment offerings for retail investors, so that area has real potential.
Some organisations are pioneering retail products. Threadneedle, for example, has a UK social bond fund with tens of millions of pounds under management that can be accessed by individual investors. That is just the tip of the iceberg for retail fund offerings. Millennials will be the beneficiaries of the largest intergenerational wealth transfer in our history, and in the future successful investment managers and product providers will need to cater for their preferences. They are more interested in values-based lifestyles than previous generations, which includes consumption choices but also the way they want to invest. The Government want to back those people in the choices they want to make, as well as supporting the incredible social enterprises and mission-led businesses we have in the UK to grow in scale to make an even bigger impact on the lives of beneficiaries and communities that they are changing every day.
I am delighted to have had the opportunity to discuss social investment in Westminster Hall today. Social investment is important because it is part of the long-term future of civil society in this country. We have a truly inspiring social sector here in the UK that contributes not only to the lives of our citizens but to the economy at large. We have all seen at first hand the impact that such organisations are having and the difference that they make to people who need them the most. We all want to ensure that the sector can thrive, which is why I am focused on delivering a sector that is more independent, more resilient and more sustainable over the long term. We can see that social investment is working. There is demand from social enterprises and investors alike, which is why I know that social investment is here to stay and will continue to grow and drive this vital sector.
Question put and agreed to.
Ceramic and Brick Industries
(7 years, 10 months ago)
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Wendy Morton (Aldridge-Brownhills) (Con)
I beg to move,
That this House has considered the ceramic and brick industries.
It is a great pleasure to serve under your chairmanship today, Mr Chope, and to see Members from both sides of the Chamber here in Westminster Hall. As vice-chairman of the all-party group on ceramics, and because the brick industry is in my constituency, I felt that it was important to raise this issue with the Minister.
The ceramics industry employs around 20,000 people in the UK, generating £2 billion in sales and exporting products all over the world. It is undoubtedly an industry of huge importance to our country.
In my constituency of Aldridge-Brownhills, there has been a large ceramics presence in the area since the early 19th century, when clay and coal mining boomed in the district. The availability of jobs in mining resulted in a population surge in Aldridge, to 2,478 by 1901, and by 1906 two of the mines—known locally as Drybread, which is near Coppice Road, and Bare Bones, at Leighswood—employed nearly 1,500 people between them. There is also the Brownhills Miner. If anyone is travelling through Brownhills or is on the A5, please make a detour to see Jigger, a 40-foot statue standing at the end of Brownhills High Street. It is a wonderful reflection of a proud industrial heritage.
Aldridge-Brownhills is now home to four companies working in the ceramics industry, which directly employ around 300 people across five sites. Some of the most famous clay products in the world originate in Aldridge, from the beautifully hand-crafted Imperial Bathrooms products, which are exported all over the world, to the bricks made at the Ibstock and Wienerberger sites, which are used to build new housing stock in the UK. Recently, some of the clay for the stunning art installation by Paul Cummins called “Blood Swept Lands and Seas of Red”—the poppies, as many will know, that were installed at the Tower of London—came from the Potclays quarry in Brownhills.
Robert Flello (Stoke-on-Trent South) (Lab)
I congratulate the hon. Lady on securing this debate. May I ask her to say a word not only for the fantastic ceramics industry itself—I am truly blessed in Stoke-on-Trent South with some wonderful businesses that are directly involved in ceramics—but all the ancillary businesses, which do related work such as designing or maintaining kilns?
Wendy Morton
Absolutely. The hon. Gentleman makes a very valuable point. In any discussion about business, it is always worth reminding ourselves that it is not only the one business that matters but all the other businesses that feed into it, be it businesses that work with kilns, businesses that provide paint brushes or businesses that do a whole host of other things. Also, there are all the other businesses, which are often family businesses, around the area, which perhaps provide sandwiches or other things for the people working in all these companies.
However, the ceramics industry is approaching a worrying period of uncertainty. The European Commission published its legislative proposals for the emissions trading system phase 4 in July 2015. These proposals cover the period from 2021 to 2030 and propose a target of achieving at least a 40% reduction in EU greenhouse gas emissions by 2030. The key issue for ceramics within the EU ETS proposals is carbon leakage, notably the evaluation of industries so that they are deemed either at risk or not at risk of it. Some sectors are likely to meet the proposed carbon leakage quantitative threshold, but the situation for other sectors, mainly the heavy clay industries and particularly those that produce bricks, clay roof tiles and clay pipes, is less clearcut, which is why I felt there was a need for this debate.
The UK Government recently announced their position on the EU ETS phase 4 and suggested that free allowances should be focused on only a handful of sectors, with other sectors receiving a lower-tiered proportion. The ceramics industry is extremely concerned by this tiering proposal, as ceramic manufacturing sites would need to purchase significantly more allowances. Indeed, it is predicted that heavy clay producers such as those in my constituency would have to buy all their carbon allowance after 2027. A number of ceramic manufacturers have said that that charge alone is likely to exceed their profits.
As part of its Ceramic EARTH campaign, the British Ceramic Confederation has used figures from the Department of Energy and Climate Change to estimate that UK heavy clay construction product manufacturers will pay more than £40 million by 2030 under this proposal, which equates to almost £1 million per year per factory on average.
Clearly this situation concerns me and many other people, because businesses, jobs and investment are at stake. Therefore, I ask the Minister to continue to look at this proposal, which is for a system that supports only a few energy-intensive industries at the expense of many others. I genuinely fear that the UK proposal will burden businesses with very high extra costs. In fact, energy costs and climate-related taxes already make up around 30% of a brick maker’s production costs, and I fear that this proposal will only add to the issues that they face.
I am sure that others in Westminster Hall today are aware that there is a growing demand for housing in this country—we often discuss and debate it in the Chamber. Construction of houses is at an eight-year high and therefore the demand for materials is growing too. Brick is the most popular cladding material for building walls, with over 80% of new homes using bricks. Brick is unmatched for its durability, low maintenance costs, aesthetics and lifetime sustainability.
I recently had the pleasure of visiting one of the brick factories in my constituency and it was an inspiration to follow the production of bricks, from the clay pit behind the factory all the way through to the finished product at the end. It was only when I stood on top of the huge kiln that I really appreciated just how much energy goes into such large kilns to produce bricks for us.
Angela Smith (Penistone and Stocksbridge) (Lab)
The point that the hon. Lady made about the sustainability of the industry is a good one, and she made it well. Clay pipe making is very prominent in my constituency—90% of the UK’s production of clay pipes takes place in my constituency. Of course, clay pipes are very sustainable and very long-lasting, with a life of well over a hundred years. Does she agree that, although other forms of production are of course valid and important, we ought not to forget the importance of such manufacturing capacity?
Wendy Morton
The hon. Lady makes a very valuable point. I will focus more on bricks, because they are produced in my constituency, but I appreciate and understand that this issue is not only about bricks but about clay pipes. When we look around the country, we often hear stories about, for example, the sewers under London. They have been in place probably for centuries, using British-manufactured clay products, pipes, bricks and lots of other things as well. I thank her for making that point.
To meet the UK demand for new housing, we will need a 60% uplift in clay products for over a decade. Unfortunately, rising demand for bricks and clay roof tiles has been met by unprecedented levels of imports. We need to encourage and focus on investment here in the UK, and consider future innovation. In 2014, brick imports accounted for 25% of sales in this country, representing a direct loss of around £80 million per year for the UK economy. The rising rate of imports of heavy clay from outside Europe shows how the EU ETS phase 4 will not really work if the industry loses its full carbon leakage status.
Jim Shannon (Strangford) (DUP)
The hon. Lady is setting a very important scene. I do not have any clay making or ceramics works in my constituency, but I see the issue that she is raising. Surely there is a very simple solution. On 23 June, vote no and get out, and we will not have to be under the regulations that she has referred to.
Wendy Morton
I am grateful to the hon. Gentleman for his intervention. I happen to disagree with him in terms of this debate. In fact, I have yet to declare my position on Europe, but it will become clearer later today.
The UK has some of the most energy-efficient manufacturing plants in the world. Specific energy consumption—in other words, energy efficiency—in the entire ceramics sector has improved by around 30% in just over a decade. To do this, hundreds of millions of pounds have been invested to make many UK plants as energy-efficient as is currently possible, and yet they could all be forced to buy all of their carbon allowance if the tiering proposal is accepted. I ask the Minister this simple question: is that fair?
The uncertainty in the industry caused by the proposals and the rise of imports means that future investment is becoming difficult and unsteady. It will make the UK even more vulnerable to higher carbon non-EU imports. We need stability and continuity. As someone who comes from a business background, I know how important that is for businesses from all sectors. It is only through stability and continuity that they feel safe and secure in investing in the future.
Caroline Nokes (Romsey and Southampton North) (Con)
I also congratulate my hon. Friend the Member for Aldridge-Brownhills (Wendy Morton) on securing this important debate. Michelmersh in my constituency is a fantastic local brick maker. It would always make the point that it wants continuity and certainty so that it can make investment decisions that ultimately mean that jobs stay in the UK and do not disappear to China.
Wendy Morton
My hon. Friend makes an important point. The subject of the debate is important, because behind it are jobs and our local economy. I do not wish to see de-industrialisation. The UK has a proud industrial history. We should also recognise that importing products from outside the EU would defeat the point of the emissions trading system. Overall, manufacturers outside the EU are not as well regulated. The electricity generation and the fuels used are more carbon-intensive, and the transportation of goods to market emits additional carbon.
As I said, the matter of housing is frequently raised in the House. The British Ceramic Confederation estimates that the Government’s programme of house building has the potential to create more than 3,000 direct ceramic manufacturing jobs in the UK and give a big boost to the sector and GDP. However, that is not being realised because of the threat of carbon leakage loss and the uncertainty that brings.
Turning to energy costs, brick makers in the UK pay about 80% more for their electricity than the EU average price, according to Eurostat. Despite much mention of the renewables compensation scheme for energy-intensive industries, brick makers are not compensated at all in the UK for renewables costs. I am sure my right hon. Friend the Minister will know that seven ceramic manufacturers in the UK are likely to receive renewables compensation, in contrast to more than 100 German ceramic and clay sites. Clearly we do not have a level playing field, and we need one.
Robert Flello
Given that a lot of the players in this market that have factories in the UK also have factories in such places as Germany, surely one pressure comes from saying to those companies, “You can get compensated in Germany. Put your production in Germany, not the UK.”
Wendy Morton
The hon. Gentleman is absolutely right. At the end of the day, I want a level playing field for our industries in the UK so that we can compete. We need to extend the number of companies that the compensation covers. I am pleased to note that the hon. Member for Stoke-on-Trent North (Ruth Smeeth) is here today. She is chair of the all-party group on ceramics. I am sure she will make reference to and, I hope, welcome the Chancellor’s announcement of the ceramic valley enterprise zone status in her constituency. That is welcome news, and I am sure she will have more to say on that, but we need the right energy and carbon policies to unlock investment at this critical time when we continue to secure the country’s economic recovery.
The Government have set a key target in their construction strategy of a 50% reduction by 2025 in the trade gap between total exports and total imports for construction products and materials. Ceramics and bricks can make a real contribution to that target, but that will happen only if we have a level playing field that enables us to compete.
The ceramics industry does not just face issues within Europe. As a result of dumped imports, between 2006 and 2011 a huge number of direct jobs were lost in the ceramic tableware and kitchenware industry within the EU as Chinese exports tripled. Since the EU anti-dumping measures were introduced in 2011 for tiles and in 2013 for tableware, the industry has stabilised its production, brought manufacturing processes back to the EU and created jobs and investment opportunities, including with clay and other materials suppliers.
The ceramics industry is, I fear, one of the most vulnerable to overcapacity in the Chinese economy. If market economy status is conferred on China by the EU, despite it only meeting one of the five necessary criteria, it will make the maintenance of adequate and meaningful anti-dumping measures, which currently protect tiles and tableware, impossible, the progress the industry has made since 2011 will be lost, and the industry will once again be put at risk. It would also further add to the uncertainty the sector is facing. What assessments have the Government and the Minister made of the impact of market economy status for China on the ceramics industry? Will they continue to listen to the views of the industry? Colleagues in the European Parliament recently rejected MES for China in a plenary vote.
I come from a business background. I believe in manufacturing. Businesses need continuity and stability to invest, innovate and thrive. As a country, we cannot decarbonise by de-industrialising and shifting our carbon emissions to another part of the world. Will the Minister look seriously at this issue? I want our industries to prosper and thrive. The ceramics industry needs competitive energy prices and the rejection of market economy status for China, but above all it needs a level playing field. That is why I am asking the Government to recognise the strategic importance of the ceramics industry and, in particular, bricks, pipes and roof tiles. I am sure that other Members will mention other products, too, and I leave that to them. We need the Government to look at today’s industries to see how they can be best be supported to thrive in tomorrow’s markets.
Ruth Smeeth (Stoke-on-Trent North) (Lab)
It is a pleasure to serve under your chairmanship, Mr Chope. I thank the hon. Member for Aldridge-Brownhills (Wendy Morton) for securing such an important debate. I agree wholeheartedly with all her comments, with the exception that I think the priority should always be tableware.
I am the chair of the new all-party group on ceramics, and am proud to represent the Potteries—the historic centre of our country’s ceramics industry—so it will come as no surprise that I consider the sector to be of great importance. Across Stoke-on-Trent, more than 7,000 people are still directly employed in ceramics—more than in any other industry. With the ceramic valley enterprise zone, the future of the industry is clear; there is huge opportunity for development and huge potential. We need to ensure the level playing field that the hon. Lady spoke about so articulately.
I was saddened in our last debate to hear that the Minister so rarely finds the time to eat a proper meal from our excellent Stoke-on-Trent tableware, or even from the less-than-excellent Chinese tableware utilised by her Department, but that lack of familiarity with the craftsmanship of Dudson, Churchill or Steelite need not concern her in today’s debate. There is so much more to the ceramics industry than just tableware, important though that is. It is those other applications that I wish to focus on today.
In my constituency, we are proud to be home to Johnson Tiles, the UK’s leading tile manufacturer and pioneers in the field of ceramic design. Like the brick factories in the constituency of the hon. Member for Aldridge-Brownhills, it is a major employer and a big contributor to our national economy. Bricks and tiles are not just important to the livelihoods of our constituents, however; they are key strategic industries in their own right, providing the raw materials that our country needs to build and to grow. The Government have repeatedly stated their commitment to a major programme of house building, which I very much support. We cannot build new homes without the raw materials for construction, and the Government’s ambitions, if fulfilled, could be an incredible opportunity for our brick and tile industries.
Ruth Smeeth
Indeed. My hon. Friend will undoubtedly highlight that later. I am concerned that under the Government’s policies on these sectors, the benefits will not be felt as keenly as they should or could be. Indeed, if we do not support the industries appropriately, the benefits of any construction boom will be reaped not by our businesses, but by brick factories in north Africa, Turkey and elsewhere, where costs of production are lower and future risks less pronounced.
Despite their importance in the supply chain for house building and construction, and despite the wide range of high-tech applications, I fear that the brick and ceramic industries are being treated as poor relations by the Government. I can only hope that this debate will help to persuade the Government that more can and must be done to support the industry, which sets the benchmark for innovation and for commitment to sustainable manufacturing.
The British Ceramic Confederation’s EARTH campaign is doing valuable work in highlighting some of the major issues affecting the brick and ceramic industries. One such issue concerns China’s ongoing bid for market economy status. I have spoken before in this hall about the threat that MES for China would pose to British industry, and I have also raised the Government’s apparent acquiescence to China’s demands. Nevertheless, the ceramics industry’s concerns on this matter are significant and bear repeating. Granting market economy status to China would leave us with no defence against unfair Chinese dumping practices, and would allow our domestic market to be flooded with inferior goods at prices that are simply not achievable without the state intervention and rock-bottom labour costs that Chinese industries take advantage of—or exploit.
It is well established that China has, to date, met only one of the five criteria required for market economy status. It is also recognised that the impact on the British economy of granting China such a status would be severe, with a potential cost of 3.5 million jobs across the UK—jobs we can ill afford to lose.
Robert Flello
I would, of course, mention wonderful firms such as Mantec, Wedgwood and Cromartie, but I do not want to go through the list because you will not allow me, Mr Chope. In addition to the “legitimate” importation, or dumping, of Chinese goods in the UK, there is still a massive problem with counterfeiting—including with dangerous chemicals and materials—and intellectual property theft by companies in China. That is being dumped on our market as well.
Ruth Smeeth
I totally agree with my hon. Friend and neighbour in Stoke-on-Trent South. I am dealing with one such case in my constituency, in which a company has, unfortunately, been a target of infringement. We have to look seriously at what we can do to provide support. There is no easy answer, but we have to deal with these problems at every level.
Ruth Smeeth
And not give China MES to make the situation even worse. Let us be clear: these fears are not baseless. They have been raised time and again by all the major employers in the sector, including those in my constituency, and by GMB, the trade union that represents the sector, and which has done an incredible job in both the UK and Europe to highlight the challenges that MES would pose.
In the European Parliament, these concerns have been widely recognised. A recent vote against granting market economy status to China was overwhelming: 546 votes in favour of not granting MES, and just 77 against not doing so. Furthermore, the motion received support from British MEPs from across the whole political spectrum—Labour and Conservative—who were united, as I hope we are today. Does the Minister agree that that demonstrates just how valuable our EU membership is to the protection of British industry? Will she confirm whether the Government will listen to their European representatives and work with our EU partners to help block China’s bid?
It is heartening to see so many Members from both sides of the House here today; it is a sign, I hope, of the depth of feeling on the issue. We all want our excellent brick and ceramic industries to continue to grow, thrive and prosper; all we are asking for is a level playing field, so that those ambitions can be fulfilled.
Craig Tracey (North Warwickshire) (Con)
It is a pleasure to serve under your chairmanship, Mr Chope. I congratulate my hon. Friend the Member for Aldridge-Brownhills (Wendy Morton) on securing this debate.
I shall focus on the EU emissions trading system policy, which has already been highlighted but is of particular concern to Wienerberger, a brick manufacturer based in Kingsbury in my constituency. Like my hon. Friend the Member for Aldridge-Brownhills, I had the chance to stand on top of the kiln when I visited the company recently, which was quite exciting. Wienerberger has 13 factories throughout the country that produce bricks and roof tiles. It is employs 1,165 people in the UK. Its Kingsbury factory alone produces 40 million bricks per annum, which is enough to build 5,000 new homes.
Wienerberger’s specific problem is the proposal concerning the future carbon leakage policy. As has already been pointed out, and as I know the Minister is aware, carbon leakage in this sense refers to the relocation of UK production to locations where it is cheaper to manufacture because of environmental policies and/or lower energy costs. The direct result is a loss of investment and jobs from the UK economy. In EU ETS phase 3, ceramic sector installations, which include brick and clay roof tile factories, are deemed to be at risk of carbon leakage. As a result, factories receive a proportion of allowances based on the average of the top 10 performers across the EU in that sector, free of charge. If, as has been proposed by the UK and France, a tiered approach to carbon leakage risk is adopted in phase 4, it is likely that the ceramic sector will be reclassified as no or low risk and will thus receive significantly less free allocation.
Wendy Morton
Does my hon. Friend agree that with the increased demand for housing, we should be looking at ways to support the brick manufacturing industry?
Craig Tracey
My hon. Friend pre-empted part of my speech. She is absolutely right that we need more houses, and that it makes absolute sense for the bricks for those houses to come from local businesses in the UK.
The loss of the free allocation I have described will, when combined with an escalating market price for carbon allowances, significantly increase the cost of production. Meanwhile, competing construction materials, such as cement, will retain free allocation, creating market distortion. The situation is particularly acute in the UK as the carbon price floor, a UK-only policy instrument, adds further costs to the EU ETS carbon price for power producers. That additional cost is being passed on to businesses via electricity prices, with manufacturers being unable to pass them on to customers. Countries such as Germany and Italy are compensating for renewable electricity charges, but the UK is not. That further reduces the competitiveness of the UK brick and clay roof tile industry.
Wienerberger has factories across Europe, including in countries with significantly lower electricity costs than the UK. Any increase in UK production costs makes future investment in its UK factories far less attractive than investment in other European countries.
Mike Wood (Dudley South) (Con)
On that very point, the family-owned Hinton Perry & Davenhill brickworks in my constituency has recently invested £5 million in new energy and production efficiency measures. Does my hon. Friend agree that undermining the business model on which such brickworks operate reduces investment in energy efficiency, thereby worsening the situation, rather than helping?
Craig Tracey
I cannot say much more than that my hon. Friend is absolutely right. That is the nub of the problem. It is about investment as much as anything else.
Given the Government’s commitment to delivering 400,000 affordable housing starts by 2021, and the Construction 2025 strategy, which seeks to achieve a 50% reduction in the trade gap between total exports and imports of construction products and materials, it is essential that we maintain a UK manufacturing base of bricks and clay roof tiles. In order to achieve that, we must support local manufacturers in the UK, which will ultimately reduce the need for imported materials.
Competing construction materials such as cement and steel are set to retain carbon leakage status, creating distortions in the UK market. Importing construction products will have a negative effect on the UK trade balance and increase the UK’s consumption-based emissions. I should add that it is not only the brick and ceramics industries that raise these concerns; there is also support from other energy-intensive sectors, such as paper and glass industries.
In summary, my asks of the Minister are that the Government support these very important industries by ensuring that no tiered approach is applied, and that ceramic installations retain full carbon leakage mitigation; by maximising the provision of free allowances to preserve the UK’s competitiveness; and, finally, by allowing the current qualitative assessment process to continue. I look forward to hearing my right hon. Friend the Minister’s response.
Mary Robinson (Cheadle) (Con)
It is a pleasure to serve under your chairmanship, Mr Chope. I am pleased to have the opportunity to speak in this debate, and I congratulate my hon. Friend the Member for Aldridge-Brownhills (Wendy Morton) on securing it.
As Members know, in the autumn statement the Government committed to building 400,000 new homes in this Parliament. I am pleased that brick manufacturers want to play their part in achieving the Government’s ambitious goal. Yet with that ambition comes a need for the steady production and supply of building materials for Britain’s new homes. When Britain last built 200,000 new houses a year, it required stocks of more than 1 billion bricks and the production of almost twice that number to fulfil orders and keep the prices of basic construction materials stable. Although I am pleased that figures from the Department for Business, Innovation and Skills show an increase in brick production, and that the Office for National Statistics and the chair of the Brick Development Association agree with those figures, we need to ensure that the brick manufacturing industry and the other elements that go into building our homes are recognised. They must be appreciated as an important staple for house building and increasing market values.
Wendy Morton
Does my hon. Friend agree that, as we seek to build more houses, the construction industry needs a continuity of construction materials? That includes bricks, roof tiles, pipes and everything else that is required for constructing a home.
Mary Robinson
I totally agree. We need exactly that package if we are to achieve this ambitious target.
I welcome the British Ceramic Confederation’s ceramic EARTH campaign, which aims to raise the profile of the industry’s important contribution to the UK economy. To be able to compete internationally and secure jobs, we must ensure that all sub-sectors receive mitigation measures to fully guard against the leakage of carbon investment and jobs outside the EU, and there must be action to lighten the cost of UK/EU energy, climate and environmental policies, which harm the sector’s ability to remain competitive on the international stage.
I share an interest with my hon. Friends the Members for Aldridge-Brownhills and for North Warwickshire (Craig Tracey): my constituency is home to the national headquarters of Wienerberger, the UK’s third largest brick manufacturer. Wienerberger is responsible for producing all the elements of construction. It is the only multinational producer of clay block for walls, clay roof tiles, ceramic pipe systems, and concrete and clay pavers. It provides what the firm calls a “whole building envelope”.
Wendy Morton
My hon. Friend is talking about one of her local companies that produces bricks. Does she accept that the many companies across the country that manufacture such products, from small family-run companies to the much bigger national and international companies, are all affected by the EU ETS and the market economy status?
Mary Robinson
That is exactly right. They have an all-pervasive influence.
Innovation and speed are important in meeting the Government’s targets. Innovation can drive down construction time. For instance, Porotherm—Wienerberger’s clay block walling system—has been used to build an apartment block complex in South Harrow, which is currently being finished. It has reduced the construction time by 20% from 15 to 12 months. One floor is rising every eight days, readying the roof for installation within 10 weeks. That new method of brick production has reduced overall construction time and speeded up access to home ownership. Therefore, where there is demand for good-quality housing, and where there are brownfield sites with appropriate planning permission for construction, we should recognise that developments in the brick industry enable quicker construction and allow properties to be released much sooner than the market is currently used to.
It is clear from Members’ contributions that investment in new capacity is needed to help the industry with the production of bricks. That should be at the forefront of our concerns. As Members have mentioned, in the EU ETS phase 3, all ceramic sectors and sub-sectors are deemed at risk of carbon leakage for direct carbon costs, but they will not be compensated for indirect carbon costs. The key issue for phase 4 legislation is to guard against the leakage associated with indirect and direct costs. However, there are shortcomings to those proposals—most notably, an insufficient number of free allowances for the industry. Thus there would be a uniform percentage reduction, known as the cross-sectoral correction factor, to keep within the minimum. To avoid the CSCF, the introduction of a tiered approach, although helping a limited number of sectors, could be damaging to other sectors. Under this tiering, ceramic installations would see a significant reduction in the level of free allocation received. That is worrying for the firms that are involved in the production of bricks, roof tiles and drainage pipes, which may cease to receive free allowances. That will make investment in UK operations challenging and undermine much needed investment in capacity.
The UK ceramic industry is steeped in heritage. Now more than ever it is vital to Britain’s growth. As we seek to build more homes, we should remember that good homes are built on strong foundations, and we should do all we can to ensure that those foundations are built on a strong brick and ceramic manufacturing industry.
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
It is an honour to serve under your chairmanship, Mr Chope. I congratulate the hon. Member for Aldridge-Brownhills (Wendy Morton) on bringing forward this very important debate. She spoke of the 20,000 people employed in these heavy industries, which generate £2 billion-worth of sales and exports worldwide. Interestingly, she said that ceramics, clay and coal mining have been in her constituency since the 19th century.
I, too, have a ceramics business based in my constituency. Having visited to Raeburn Brick and listened to its concerns, I feel obliged to speak up for it in this place. It is Scotland’s only remaining clay brick company, and makes 15% of the bricks used in Scotland. When I was doing some research earlier, I noted some of the names of the bricks, including Jacobite, Livingstone, MacKintosh Smooth, Holyrood Buff and Orkney Buff—very interesting. It uses clays won locally in west central Scotland.
I am familiar with many of the issues that the industry faces. As a member of the Scottish steel taskforce, I have listened to a wealth of evidence from many different sources about the problems that our energy-intensive industries face. We all recognise that the road ahead is not easy, and the industries acknowledge that there are serious and significant challenges. The ceramics and brickmaking industry is an important part of Scotland’s manufacturing heritage.
The hon. Member for Stoke-on-Trent North (Ruth Smeeth) raised the issue of EU support and funding during Prime Minister’s questions, and it is important that we recognise the vital role that the European Union plays.
Throughout the steel crisis, the Scottish National party consistently called on the UK business sector to bring forward a comprehensive and revised industrial strategy for heavy industry in the UK. That is more crucial than ever if we are to guarantee the long-term sustainability of the ceramics industry and other heavy industries in the UK.
Although the SNP Government in Scotland support energy-intensive industries, they recognise that energy efficiency and clean energy are the key to meeting our ambitious climate change targets and contributing to long-term and sustainable economic growth. We are well on our way. In fact, this week it was announced that Scotland has exceeded our 2020 target to reduce greenhouse gas emissions by 42% six years early. The transition to a lower-carbon economy is not easy. The challenge is that the payback on such investments is often achieved in the long term, so we need strong leadership, technical expertise and access to appropriate finance. We also need to support manufacturers that are taking a lead by adopting and investing in energy-saving measures, as Raeburn Brick is doing. We need a proactive response that engages constructively with the industry. Ceramics cannot be allowed to slump into crisis before the Government are willing to respond.
Many Members made very interesting points. The hon. Member for Aldridge-Brownhills said that we have to achieve a 40% reduction in greenhouse gases by 2030. That means companies in her constituency will have to purchase more allowances, at a cost of £40 million between now and 2027, which equates to £1 million per year per factory, she said.
It is important to support all heavy industry. The hon. Member for Sheffield, Hillsborough spoke up for clay pipe making in her constituency—
Margaret Ferrier
Sorry about that—I mean the hon. Member for Penistone and Stocksbridge (Angela Smith). I should have known that, because we have met many times to talk about heavy industry—my apologies.
The hon. Member for Stoke-on-Trent South (Robert Flello) spoke about ancillary firms also being important, and kiln production. He spoke kindly about Wedgwood, to mention it again, and that we have to be careful about market economy status for China, which has counterfeiting and dangerous chemicals in some products.
Wendy Morton
The hon. Lady always speaks with such passion about the industries in her constituency. Does she agree that we need to look not only at the EU emissions trading scheme, but at market economy status for China? Only by having a level playing field can we encourage businesses to do their bit, which is to invest and innovate for the future.
Margaret Ferrier
The hon. Lady makes a good point. We will hear from the Minister in her response to all our points. We have heard many times that market economy status will not mean that we cannot bring anti-dumping cases, so I am interested to hear how she will respond to everyone’s concerns.
We heard from the hon. Member for Stoke-on-Trent North (Ruth Smeeth) that there is more to ceramics than brick alone; it includes tableware. A tile manufacturer is a big employer in her constituency, and it has major concerns. The brick and tile industry has bases in north Africa and Turkey, where production costs are much lower, so we have to support our ceramics in the UK. She also made mention of labour costs, which are lower in those countries, although employees there can be exploited.
The hon. Member for North Warwickshire (Craig Tracey), which includes Bedworth, spoke about his brick and tile manufacturer in Kingsbury, which employs 1,100—
Mr Christopher Chope (in the Chair)
Order. I am sorry to interrupt the hon. Lady, but by convention the time available is split between the Opposition spokesmen. I have to call the Minister at 20 past, so if the time is to be split equally, the hon. Lady’s time is up.
Margaret Ferrier
I apologise, Mr Chope, and will conclude by saying that we have heard many concerns from Members in all parts of the House. We look forward to hearing the Minister’s response.
Kevin Brennan (Cardiff West) (Lab)
I congratulate everyone on their contributions to the debate, in particular the hon. Member for Aldridge-Brownhills (Wendy Morton)—I was going to call her the hon. Member for brick, because she was such an advocate for her brick makers, but I realised others might claim the title. However, she rightly celebrated the industry in her constituency, and pointed out her concerns about the uncertainties caused by some of the issues mentioned, which I will return to in my remarks.
I congratulate my hon. Friend the Member for Stoke-on-Trent North (Ruth Smeeth), or the hon. Member for ceramic tableware, as we might call her. She said that the industry is treated as a poor relation, and referred to the industry’s EARTH campaign, as well as market economy status, which is a thread running through the debate.
I congratulate the hon. Member for North Warwickshire (Craig Tracey), and for Bedworth, on his contribution—the hon. Member for tile and brick perhaps. He spoke about the potential negative interest of the Government proposal on the emissions trading scheme. I also congratulate the hon. Member for Cheadle (Mary Robinson), who spoke about bricks, pipes and pavers—so she, too, introduced a new product into our debate.
The debate was very informative, as they always are in Westminster Hall. We all learn a lot from hon. Members and their experiences in their own constituencies. Some of the debates are among the best seminars that we can get anywhere.
As hon. Members have said, the industry is important, and I want to praise it for taking the initiative with its EARTH campaign, which has been mentioned. The campaign raises the key issues that the Government need to address in order to secure the future of the industry. The industry employs many thousands of people, and there are 480 ceramic and brick manufacturing businesses in Great Britain, although that number has fallen from 640 in 2009. They are a key part of a modern UK economy.
The highly regarded new extension of Tate Modern is an example of a resurgence in the use of brick in construction and British architecture. The high-profile use of brick in an iconic building, combined with the strong growth figures forecast for the housing industry, which we have heard about, mean that there is a glowing future for the brick industry in the UK, which is renowned globally for its excellent design and architecture expertise and the innovative materials that make that possible.
Recently, the energy-intensive industries have made common requests to the Government, many of which have been mentioned. I will reiterate briefly that the cost of compliance under the renewables obligation compensation package must be looked at, and a level playing field is needed across Europe. We welcome the consultation that the Department for Business, Innovation and Skills is conducting, but action is required.
Carbon emissions can be massively reduced by undertaking research and development into energy saving and efficiencies, new innovations in fuel and energy efficiency, heat recovery, and furnace design. As hon. Members have said, we also need to be protected from cheaper Chinese products, otherwise we have the dumping of goods being produced for less than the cost of production, as we have seen in the steel industry. That is one of the key demands of the EARTH campaign.
The housing industry needs to be primed to create homes for millions of UK citizens awaiting decent housing, which will help to create demand in many UK materials products, including ceramics, bricks, steel and glass. The UK is pioneering new approaches in the brick and ceramics industry, with research in areas such as kiln firing and energy efficiency. I pay tribute to the work of the industry and to ceramics research centred in Stoke-on-Trent. Research and development in the brick and ceramics industry needs to be systematically spread across the whole of the materials industry.
We have not heard mention of this so far today, but a proposal is with the Government for the creation of a materials catapult, which could bring about the upscaling and commercialisation of relentless, continuous innovation in the materials sector, taking new science from the discovery stage to the practical stage, ready to be picked up by business. However, the brick and ceramic industries, in common with the rest of the UK materials sector, do not benefit from the support of an innovation catapult.
In developing the UK catapults, Professor Hermann Hauser outlined the foreign criteria for a new catapult to flourish: a large global market to exploit; a UK global lead in research capability; and the necessary absorptive capacity to exploit commercially in the UK. The UK materials sector clearly meets those guidelines, so I am interested to hear from the Minister what the latest thinking is on the establishment of a catapult in this field, and whether that could bring the UK into line with other advanced nations, including our competitors in the European Union, which I know the Minister is a strong supporter of, as I am.
Robert Flello
The advanced materials catapult is exactly the right thing to do, for the reasons given by my hon. Friend, but would it not be tragic if, at the same time as developing it, we lost the production to other countries?
Kevin Brennan
My hon. Friend is absolutely right, which is why the issues that have been identified in the debate are so important and why it is very important that the Minister responds to each of the asks in the EARTH campaign, with particular reference to the Government’s slight obsession with pushing through market economy status for China. It is clear from the recent vote in the European Parliament—it was cross-party, cross-sector and an overwhelming result—that there are strong feelings about that matter, yet the Government seem intent on pushing ahead, despite such a strong expression of opinion. I would be grateful if the Minister could update us on whether that is having any influence on the thinking and whether the Government are listening seriously to the voice of industry with regard to that.
I do not want to take up any more time because we want to hear from the Minister, but I urge her to listen to the requests from hon. Members and the demands from the industry, and tell us what she is doing about the proposal to create a materials catapult for the UK sector, with bricks and ceramics at the heart of that research and development, together with steel, aluminium, glass and those sorts of materials. That could give the sort of assurance to those great British industries that secures their continuity well into the 21st century.
The Minister for Small Business, Industry and Enterprise (Anna Soubry)
It is an absolute pleasure to serve under your chairmanship, Mr Chope. May I begin by congratulating my hon. Friend the Member for Aldridge-Brownhills (Wendy Morton) on securing this excellent debate and everybody who has contributed to it? It is indeed a fascinating subject. Such is my interest in all the sectors in my brief—especially ceramics, because of the breadth and depth of the sector—I am getting to the stage now where I could bore for Britain on the different technologies and techniques and how exciting it is. Yes, it relies on many traditional methods. I am helpfully reminded that brick making is some 5,000 years old, but it pretty much has not changed over those years.
I always have to pay tribute to my excellent Parliamentary Private Secretary, my hon. Friend the Member for Rugby (Mark Pawsey), who, within his constituency has Morgan Advanced Ceramics—actually, this is a serious point. I quickly looked at its website, and when we see the astonishing high value products it makes, it is almost difficult to believe that they all fall within the wonderful broad category of ceramics, which, of course, includes clay pipes.
As I said, brick has been used by people for building for at least 5,000 years for good reason: it is a durable and it is energy efficient. It is to be commended and, if I may say, it should be used at every opportunity. The sector is very diverse, including electronics, aerospace, automotive and healthcare.
After a prolonged and painful restructuring in recent decades, some parts of the brick and ceramic sector have seen a revival in past years. Strong demand from house builders has meant that previously mothballed brick factories have reopened and substantial investment has been made in others, such as the Ibstock Brick Ltd facilities at Chesterton and Ibstock in Leicestershire. Unfortunately there is nobody here from Leicestershire, but that is an outstanding company. In ceramics there has been new investment in both technology and factories, with distinguished names such as Waterford, Wedgwood, Royal Doulton, Wade and Steelite leading the way.
In response to the hon. Member for Stoke-on-Trent North (Ruth Smeeth), I want to put the record straight. I do eat when I can—I enjoy eating, in fact. However, I think her point was in relation to the fact that in BIS, apparently, we do not use crockery that has been made in this country.
Anna Soubry
It is absolutely shameful—I could not agree more. When we last debated this issue, I have to confess that I did not know Steelite, which is a disgraceful admission from the Minister responsible for ceramics. By a happy chance, that very weekend I happened to be staying somewhere in Scotland—I will not name it—where they used Steelite. It is an outstanding ceramic because it is incredibly durable. It has many other qualities, too—it can be very fashionable and traditional—and I could go on. It has outstanding British quality and it has stamped on its back proudly that it is all made in Britain. I know that the industry has been keen to overcome some of the difficulties it has had. Frankly, we know that some companies have imported products and then, because they will slip them and perhaps finish them off, they then put “made in England” on them. Anyway, Steelite is made here in Britain and it is brilliant.
The business environment has been tough, and it still is tough for many parts of the sector, especially those businesses that are caught up in the supply chains for sectors such as steel. We all know the difficulties they have been suffering. However, we are getting the fundamentals of the economy right. By way of example, we are cutting corporation tax to 18% by 2020, which is important to support the sector and indeed all manufacturing. We are cutting red tape and investing £6.9 billion. Again, all of that is important, as is our work creating apprenticeships so that we keep our skills base up.
In relation to Stoke-on-Trent in particular, the Stoke-on-Trent and Staffordshire local enterprise partnership has achieved many things. For example, there was £159,000 for Keeling and Walker, Fairey Technical got £159,000, Hygan Products got £30,000 and Siak Transfers got another £10,000 to help them with new jobs and new investment, looking to the future. The Ceramic Valley enterprise zone along the A500 corridor was announced in the autumn statement to help the United Kingdom to compete with the growing technical ceramics sectors in the United States, Germany and Italy. The Government’s city deal with the LEP includes a flagship proposal for the UK’s first at-scale, low-carbon heat network system, which will support the region’s world famous advanced manufacturing and applied materials sectors, including ceramics.
I turn to the sometimes controversial—understandably so—EU emissions trading scheme and reform. We are a strong supporter of the EU ETS as a cornerstone of EU climate and energy policy. It can help industry decarbonise in a cost-effective way in the transition to the low-carbon economy we all want, but the United Kingdom Government believe that improvements to the EU ETS in phase 4 can help it function more effectively and target carbon leakage support at those sectors at greatest risk. What we do not want is for us to be exporting jobs and importing carbon, so we have to get that absolutely right.
We favour a tiered approach that would focus a limited supply of free allocation on those sectors that need it most. Our recent joint non-paper with France sets out a number of potential approaches to tiering. It is important to note that, at this stage, we do not favour any one particular approach. We acknowledge that parts of the ceramics industry are at risk of carbon leakage and we are engaging proactively with the ceramics industry to discuss its concerns. It is always a pleasure for me to meet with it.
We are keen to see more simplified procedures and a potential increase in scope for the small emitter opt-out and to ensure that innovation funding is available for industry. All of those measures can help installations in the ceramics sector. The really important point, which was made by my hon. Friend the Member for Aldridge-Brownhills, who so ably represents her constituency, is that, like all sectors, this sector asks for nothing more than that level playing field. She is right that, as other hon. Members mentioned, it is only right and fair that, as a Government, we do or do not do stuff to ensure a level playing field. That is a proper and right ask to make.
Turning quickly to EII compensation and what we call the 2050 road maps, the industrial energy costs in this country are higher than in other European countries. We know that we face a genuine and serious challenge in our country, but in answer to my hon. Friend the Member for North Warwickshire (Craig Tracey), who made a very good contribution, eligible ceramics companies can apply for compensation for the indirect costs of the renewables obligation and the small-scale feed-in tariffs scheme. We have been working closely with the British Ceramic Confederation and ceramics companies to help them to apply for that. We have worked closely with the sector to develop a 2050 road map to help it to reduce greenhouse gas emissions and increase its energy efficiency while remaining competitive. We all agree that we now need to see some real action to ensure that our energy costs are cheaper, in particular for the benefit of our manufacturing sector.
I know that MES for China is controversial and I am aware of the vote. The Government of course continue to listen, but we should not get overly hung up on market economy status. Russia has it and the Commission is still able to act to put on tariffs, for example, and so on. Of course, the Government continue to listen.
There were some excellent contributions from all hon. Members. My hon. Friends the Members for Cheadle (Mary Robinson) and for North Warwickshire mentioned Wienerberger, an excellent brick company. It does not just make traditional bricks, as the hon. Member for Motherwell—I have the wrong constituency again. I apologise.
Anna Soubry
I thank my PPS for that help. The hon. Member for Rutherglen and Hamilton West (Margaret Ferrier) also made the point that it is not just traditional bricks that are proving so popular. A modern approach to bricks, based on traditional methods, means that bricks are now being seen as a beautiful design and feature in themselves in any work that is undertaken.
Because I am going to run out of time, let me say that I am happy to look at procurement. Perhaps we could do some work in persuading local authorities to do more in the procurement of British bricks.
Wendy Morton
In the short time that I have, I thank you, Mr Chope, for keeping us in good order this afternoon, and I thank the Minister for coming along and listening to us. I was pleased to hear that she is engaging proactively on some of the issues, and I urge her to continue to listen to the sector. I thank all the Members from across the country who have participated in the debate.
Written Statements
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ECOFIN: 25 May 2016
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The Financial Secretary to the Treasury (Mr David Gauke)
A meeting of the Economic and Financial Affairs Council was held in Brussels on 25 May 2016. EU Finance Ministers discussed the following items:
Anti-tax avoidance package
Ministers held an exchange of views on a compromise text relating to the anti-tax avoidance directive. Ministers agreed that this file would return to ECOFIN in June for further discussion and possible agreement.
Current legislative proposals
The presidency updated the Council on the state of play of financial services dossiers.
State of play of the banking union
The Commission gave an update on several dossiers linked to the banking union: the single resolution fund, the bank recovery and resolution directive and the deposit guarantee scheme directive.
VAT action plan
The Council held an exchange of views and agreed Council conclusions relating to the Commission’s VAT action plan, published 7 April, and a European Court of Auditors special report.
European semester
Following preparation by the Economic and Financial Committee, the Council adopted conclusions on the 2016 in-depth reviews of macroeconomic imbalances and the implementation of the 2015 country specific recommendations.
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ECOFIN: 17 June 2016
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The Financial Secretary to the Treasury (Mr David Gauke)
A meeting of the Economic and Financial Affairs Council will be held in Luxembourg on 17 June 2016. EU Finance Ministers are due to discuss the following items:
Anti-tax avoidance package
The presidency will seek a political agreement on a compromise text relating to the anti-tax avoidance directive.
Financial transaction tax
An update will be provided on the progress regarding implementing a financial transaction tax in participating member states. The UK is not taking part in the financial transaction tax.
Strengthening the banking union
A presentation will be given on a road map regarding strengthening of the banking union, alongside an oral update from the presidency on progress made in Council working groups.
Current legislative proposals
The presidency will update the Council on the state of play of financial services dossiers.
State of play of the banking union
The Commission will give an update on several dossiers linked to the banking union: the single resolution fund, the bank recovery road map and resolution directive and the deposit guarantee scheme directive.
Analysis by the Commission on temporary VAT derogations—reverse charge mechanism
Following a request by the Czech Finance Minister, the Commission will present analysis relating to widening the use of the reverse charge mechanism to combat VAT fraud. This will be followed by an exchange of views.
Implementation of the stability and growth pact
The Council will be asked to endorse the draft decisions to close the excessive deficit procedures for Cyprus, Ireland and Slovenia based on recommendations by the Commission. As these decisions cover euro area member states, the UK does not have a vote.
Report of the European Court of Auditors on the excessive deficit procedure
Following preparation by the Economic and Financial Committee, the Council will adopt conclusions relating to a European Court of Auditors report on effective implementation of the excessive deficit procedure.
Contribution to the European Council meeting on 28-29 June 2016
The Council will prepare a number of items ahead of June European Council. Specifically, Ministers will endorse the 2016 country specific recommendations, part of the European semester process.
Following this, views will be exchanged on: national productivity boards within the euro area; economic and fiscal governance; unified euro area representation at the IMF; and the Commission’s recent communications on external aspects of migration and the investment plan for Europe.
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EU Environment Council
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The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Rory Stewart)
I will attend the EU Environment Council in Brussels on 20 June, along with my noble Friend the Parliamentary Under-Secretary of State for Climate Change (Lord Bourne).
Following adoption of the agenda, the list of “A” items will be approved.
Under legislative activities the Council will debate a proposal to reform the EU emissions trading system. The presidency will provide a state of play report on the ongoing negotiations with the European Parliament to agree the national emissions ceiling directive.
Under non-legislative activities, the Council will aim to adopt Council conclusions on the EU action plan for the circular economy and the EU action plan against wildlife trafficking. They will also discuss a Council statement on the ratification of the Paris agreement.
The following items are due to be discussed under any other business:
a) NOx emissions by diesel cars
b) Recent international meetings:
i) High-level meeting (Montreal, 11-13 May 2016) and preparations for the ICAO assembly (Montreal, 27 September to 7 October 2016)
ii) Second session of the United Nations Environment Assembly of the United Nations Environment Programme (Nairobi, 23-27 May 2016)
iii) Eighth Environment for Europe ministerial conference (Batumi, Georgia, 8-10 June 2016
c) REACH forward priorities for effective regulation (Brussels, 1 June 2016)
d) High-level meeting “Make it Work” (Amsterdam, 4 April 2016)
e) Communication on environmental implementation review
f) Global amphibian deaths—combatting the fungus Batrachochytrium salamandrivorans (Bsal) infecting salamanders and newts in the EU
g) Informal meeting of the Environment and Transport Ministers (Amsterdam, 14-15 April 2016)
h) Endocrine disruptors
i) Work programme of the incoming presidency
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Foreign Affairs Council/General Affairs Council
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The Minister for Europe (Mr David Lidington)
My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs will attend the Foreign Affairs Council on 20 June and I will attend the General Affairs Council on 24 June. The Foreign Affairs Council will be chaired by the High Representative of the European Union for Foreign Affairs and Security Policy, Federica Mogherini, and the General Affairs Council will be chaired by the Dutch presidency. The meetings will be held in Luxembourg.
Foreign Affairs Council
The agenda for the Foreign Affairs Council (FAC) is expected to include the Arctic, Sahel, middle east peace process and Macedonia. Ms Mogherini is expected to raise Libya, Burma, cultural diplomacy and the forthcoming EU-China summit in her opening remarks.
The Arctic
The UK will support the proposed Council conclusions on the Arctic which we expect to be adopted at the Council, following the publication of the Joint Communication on 27 April. The conclusions acknowledge the important role the EU has in helping to meet the challenges now facing the region, and that the EU should focus on those areas where it can add value, such as research, climate change and the environment.
Sahel
The discussion will focus on the EU’s overall approach to the Sahel, and its support to the G5 Sahel group of countries (Burkina Faso, Chad, Mali, Mauritania and Niger). Ministers will consider how to accelerate implementation of the Mali peace agreement one year after its signature. The UK priority will be to ensure the EU’s approach in the Sahel and the instruments at its disposal are focused on tackling the long-term drivers of instability and migration.
Middle East Peace Process
Ministers will exchange views on the outcome of the international meeting which was held in Paris on 3 June.
Macedonia
Discussion will focus on the long-standing political crisis in Macedonia. We expect Ministers to register their concern about negative developments in the rule of law, and the impact on regional stability, as well as signal to Macedonia’s leaders that they must reverse this negative trend.
Libya
Discussions will focus on extending EUNAVFOR MED Operation Sophia's mandate to take on two additional tasks: capacity-building and training of the Libyan coastguard and implementing the UN arms embargo on the high seas off the coast of Libya.
General Affairs Council
The General Affairs Council (GAC) on 24 June is expected to focus on preparation of the June European Council, European semester, inter-institutional agreement, better regulation and transparency.
Preparation of the June European Council
The GAC will discuss the agenda for the 28-29 June European Council, which the Prime Minister will attend. The agenda will focus on migration, jobs, growth and investment, external relations and the outcome of the UK referendum.
European semester
The GAC will look to approve the country specific recommendations ahead of the European Council.
Inter-Institutional agreement (IIA) and better regulation
The Commission’s 2017 work programme is tabled for discussion at the General Affairs Council ahead of its release in October. The GAC will also discuss legislative programming in future years.
AOB—Slovakia’s presidency priorities
The GAC will take note of the draft priorities presented by Slovakia for their EU presidency, which begins on 1 July. They intend to focus on four areas: economic and financial; single market; external relations; and migration. The Slovak presidency will continue the work of the Dutch presidency, and be followed by that of their trio partner, Malta.
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Justice and Home Affairs post-Council statement
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The Secretary of State for the Home Department (Mrs Theresa May)
The final Justice and Home Affairs Council of the Dutch presidency took place on 9 and 10 June in Luxembourg. The Minister for Immigration (James Brokenshire) attended the justice day and I attended the interior day.
Justice day (9 June) began with a progress report on the draft directive on the supply of digital content. The proposal aims to advance the growth of cross-border e-commerce in the EU by setting common rules for governing the supply of digital content.
The Council then discussed four files in which the UK does not participate: matrimonial property regimes; registered partnerships; the European Public Prosecutor’s Office (EPPO); and the directive on protection of the Union’s financial interests. Ministers agreed general approaches on both matrimonial property regimes and registered partnerships, enabling negotiations with the European Parliament to begin. Ministers secured broad conceptual support on a number of issues relating to the internal functioning of the EPPO, and on the directive on protection of the Union’s financial interests, Ministers did not reach agreement on a number of compromise options. The presidency then presented a progress report on negotiations to extend the European criminal record information system (ECRIS) to third country (non-EU) nationals. The Immigration Minister intervened to support the principles behind the ECRIS proposal and to emphasise the importance of finding a suitable technical solution to data sharing.
Over lunch, the presidency facilitated a discussion on compensating victims of crime, focusing on improving co-operation and sharing best practice. The Commission committed to look at practical steps to support improved co-operation.
After lunch, the presidency sought a steer from Ministers on work to improve criminal justice in cyberspace. The Immigration Minister intervened to agree the importance of tackling cybercrime and to stress that best use should be made of existing tools.
Under any other business, the Commission informed Ministers that a code of conduct to combat hate speech online had been developed with the IT industry and the Commission will present an impact report to Council in December. The presidency also updated Ministers on outcomes from the recent EU-US JHA ministerial meeting on 1 and 2 June. Finally, the incoming Slovakian presidency presented its justice and home affairs priorities. The A points were then adopted.
Interior day (10 June) began with a discussion on the draft weapons directive, which relates to control of the acquisition and possession of weapons. Supported by other member states, I intervened to welcome the progress made, but underlined the potential to go even further in ensuring appropriately high standards of regulation. The presidency concluded that there was support for a general approach and trilogue negotiations with the European Parliament will now begin.
The Council then turned to the presidency’s data sharing road map. The road map contains a number of practical proposals aimed at enhancing data sharing between member states to enhance security and law enforcement, which reflects in particular proposals made by the UK and France. I fully supported the presidency’s prioritisation of this work to enhance internal security across Europe, particularly the sharing of data between Schengen and non-Schengen member states. Several member states supported both my position and the objectives and actions set out in the road map.
The discussion on the fight against terrorism focused on a paper from the European Counter Terrorism Coordinator (EUCTC) which made a number of recommendations to advance work to tackle the terrorist threat. I welcomed the role of the EUCTC in supporting member states in tackling terrorist finance, online radicalisation and firearms, and stressed the clear difference in mandate and competence between the work of Europol and that of the member state-driven Counter Terrorist Group (CTG). The CTG, which has provided a multilateral platform to enhance co-operation between independent European intelligence services, also gave a presentation.
The Council noted a report on the implementation of the renewed internal security strategy and the presidency updated Interior Ministers on the outcomes of the EU-US JHA ministerial meeting on 1 and 2 June, and the outcomes from the high-level meeting on cyber security on 12 and 13 May.
Over lunch, there was a discussion on migration through the central Mediterranean route and the Commission presented its communication on external migration. After lunch, the Council discussed the implementation of the EU-Turkey statement of 18 March. Supported by the Commission, I intervened to ensure a continued focus in the Council on the effective and full implementation of the statement by leaders.
The Council then discussed proposals concerning the relationship between the Schengen states and Georgia, Ukraine, Kosovo, and Turkey. There was an exchange of views on these proposals and the Council did not agree a general approach on Georgia. The UK does not participate in these measures.
Next on the agenda was the European border and coastguard, where the presidency provided a progress update on negotiations with the European Parliament. The UK does not participate in this measure.
The Commission then presented its proposals to the Council on reform of the common European asylum system. Finally, the incoming Slovakian presidency presented its justice and home affairs priorities to Interior Ministers.
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Second Reading Committee
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Arrangement of Business
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The Deputy Chairman of Committees (Lord Brougham and Vaux) (Con)
My Lords, before the Minister moves that the Bill be considered, I remind noble Lords that the Motion before the Committee will be that the Committee do consider the Bill. I should perhaps make it clear that the Motion to give the Bill a Second Reading will be moved in the Chamber in the usual way, with the expectation that it will be taken formally.
Intellectual Property (Unjustified Threats) Bill [HL]
(7 years, 10 months ago)
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The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills and Department for Culture, Media and Sport (Baroness Neville-Rolfe) (Con)
My Lords, it is pleasing that a number of technical and uncontroversial reforms have in recent times gone through the special procedure before this House which is reserved for Bills arising from the great work of the Law Commission. The most recent example was the Insurance Act 2015, which this House scrutinised towards the end of the last Parliament.
The Bill before your Lordships’ House today is similarly concerned with a complex and specialist area of law. It concerns a particular aspect of our intellectual property framework, and I am very grateful to the Law Commission and to legal, IP and judicial stakeholders who have worked together so effectively to produce these reforms. I hope my explanations today will help noble Lords to appreciate their efforts.
In my two years as the Minister for Intellectual Property, I have come to appreciate how important IP is to this country. The UK’s investment in intangible assets protected by IP rights has been estimated at more than £60 billion, equivalent to approximately 4.2% of total UK GDP. IP-intensive industries have been estimated to generate 37% of UK GDP. This Government also understand that a well-functioning IP regime is a vital foundation for economic growth. This is reflected in our manifesto commitment to make the UK the best place in Europe to innovate, to patent new ideas and to set up and expand a business.
To be successful, our intellectual property system needs to strike a balance. On the one hand, the law must reward innovators and ensure that their IP rights can be enforced. On the other, it is crucial that threats to sue for infringement are not abused, stifling new ideas and distorting competition. This concern is a real one, and the Bill before us today is designed to counter these risks. The costs of IP litigation are such that many businesses, understandably, wish to avoid it at all costs. The consequence is that the mere threat of proceedings for IP infringement is capable of driving customers away and causing significant commercial damage, especially if the threat is issued by someone with deep pockets and the other party is less favourably placed.
A threat to sue where there has been no infringement, or where the IP right in question is actually invalid, is known as an unjustified threat. Such threats are, I regret to say, not a new phenomenon. As long ago as the 1880s, unjustified threats were misused to damage trade rivals. In an early example, threats of patent infringement were made to the customers of a steam engine manufacturer by one of its competitors. The intention was simply to drive those customers away, and it worked. Parliament intervened in 1883 and provided a remedy for the person abused. Since then, similar statutory remedies have also been introduced in respect of trademarks and registered and unregistered design rights. These “threats provisions” offer much needed protection and provide remedies to those whose commercial interests have been affected by an unjustified threat.
But time moves on and new difficulties arise. Business and IP professionals have told us that the existing provisions do not work as well as they should, partly because they are overly complex. Experts can exploit loopholes in the law, while the unwary can find themselves unintentionally caught up in litigation. In addition, the provisions have developed in a piecemeal fashion across the different IP rights. Consequently, there are plenty of inconsistencies to further muddy an already complex area of law. This is particularly problematic for small businesses, which are disproportionately affected by the cost of any legal advice they require. They are a particular concern to this Government and to me personally.
A further problem arises over who should be approached when a question of infringement arises. Not all infringers are the same. Some, such as manufacturers and importers of infringing products, do more commercial damage than others and are better placed to determine whether a threat of infringement proceedings is justified. The threats provisions must differentiate between different types of infringement. This encourages rights holders to approach the most appropriate person or business, while protecting others, such as retailers, from unfair approaches and unreasonable threats.
In 2012, against this background, we asked the Law Commission to review the existing law of unjustified threats. The Law Commission consulted extensively in 2013 and made detailed recommendations for reform in 2014 and 2015. The Bill reflects those recommendations. The provisions in the Bill are essentially the same for patents, trademarks and designs—both registered and unregistered. For each right there are five main parts which deal, first, with the test for what constitutes a threat; secondly, with which threats are actionable; thirdly, with the safe harbour of permitted communications; fourthly, with the remedies and defences; and, finally, with exemptions for professional advisers.
It may be helpful to noble Lords if I briefly set out what each of those parts aim to do. The first is the definition of a threat. There are three elements to the test, which are to be understood from the perspective of a “reasonable person” receiving a communication such as a letter or email. Would a reasonable person, knowing what the recipient knows, understand from that communication that an IP right exists, that a person intends to bring proceedings for infringement of that right, and that the alleged infringement relates to an act done—or to be done—in the UK? If the answer is yes to all three aspects, then the communication can be said to contain a threat to sue for IP infringement. The test is taken from existing case law, with one change that provides the necessary link between the threat and the UK market. It also allows the provisions to apply to the forthcoming Europe-wide unitary patent, but not to apply outside the UK.
The second part sets out which types of threats trigger the threats provisions and which do not. The provisions set out that threats may be made freely to manufacturers or importers and their equivalents and they will not trigger the provisions. This allows rights holders to approach the trade source of a potential infringement, which could cause the most commercial damage. Manufacturers and importers are likely to be able to assess whether a threat to sue is justified and, having invested in the product in question, will be more willing to challenge the threat if it is not justified. In contrast, retailers, stockists and customers are unlikely to be able to make an informed decision about whether a threat to sue is justified. They are likely to be risk averse and want to avoid being taken to court and, as a result, they will probably simply stop stocking or buying the product in question without investigating further. Clearly, this is potentially unfair and damaging to a legitimate business. For that reason, threats made to businesses and people such as these are generally not allowed. Of course a rights holder may legitimately need to speak to such businesses, so the third part of the provisions gives guidance on what can safely be said to retailers or customers, and for what purpose. It clarifies the existing law by introducing the concept of “permitted communications”.
The fourth part of the Bill sets out remedies available in the case of a successful threats claim and the defences available to a defendant—the person who made the threat. The range of remedies available will be unchanged by the Bill. Damages may be awarded for commercial damage done by the threat and the claimant may seek an injunction to stop the threats, as well as a declaration that the threats were unjustified. I should stress that the threats provisions are not intended to stop rights holders being able to protect their assets, but to prevent the unscrupulous use of unjustified threats to manipulate the marketplace and prevent fair competition. Consequently, the ability to prove that the threat was in fact justified because an infringement occurred will remain a defence. An additional defence was introduced by the 2004 patents reforms. A person making a threat to a retailer or the like would have a defence if their efforts to find the trade source of the infringing patented goods were unsuccessful. This Bill will extend that limited but useful defence to trademarks and designs. The provisions also clarify that the person making the threat must use “all reasonable steps” to find the importer or manufacturer of the product in question before they are safe to approach the retailer.
The fifth part of the Bill prevents threats claims being brought against regulated professional advisers acting on instructions from their client. Currently, liability for making threats is not limited to the rights holder; any person who issues a threat will risk a threats action being brought against them. This means that professional legal advisers, such as solicitors and registered patent or trademark attorneys, may be held personally responsible for making threats even though acting on client instructions. This disadvantages rights holders as well as the legal advisers themselves. Threats actions can be used as a tactic to disrupt relations between adviser and client and may result in advisers asking for indemnities or telling clients that they can no longer act for them. The Bill therefore provides an exemption for professional advisers in relevant situations, but the instructing client will still remain liable for making the threat.
I hope that this explanation of the Bill’s provisions has been of assistance. I very much look forward to hearing what noble Lords have to say and to taking the Bill through the special procedure before the Committee, which I have not had the pleasure of using before and to which it is very well suited. These are worthy and important reforms, which will make a real difference to UK innovators, inventors and designers. I beg to move.
Baroness Bowles of Berkhamsted (LD)
I thank the Minister for that explanation. I declare my interests in the register as a retired UK and European patent attorney and a former fellow of the Chartered Institute of Patent Attorneys. As a consequence of that interest I have experience of the issues behind this legislation, stretching back to practice under the Patents Act 1949 as well as the Trade Marks Act 1938 and others.
I am afraid that I confess to being underwhelmed by the Bill because there are missed opportunities. But the Bill is here, so I can agree with making good on the 2004 promise to align the threats provisions in other IP rights with those of patents and to add some clarity to what can be communicated, to reduce likelihood of threats actions and to allow more permitted communications. However, not enough has been done to ensure that the Civil Procedure Rules or alternative dispute resolution are followed or to ensure that a recipient understands their full position and that such procedures should be followed. This should apply to exempted threats and, where relevant, to permitted communications.
The Bill does not capture the kinds of abuses that can and do happen nor even all the loopholes mentioned in paragraph 34 of the original consultation document. The first loophole was issuing proceedings merely as a negotiating tactic; that can still be done, and done repeatedly. The second was careful drafting around threats; drafting may be easier but wider exemptions will no doubt open new loopholes. The third was threatening on related matters such as passing off—that is still available, with no need to be comprehensive about all rights—and finally, forum shopping remains, apart from any commensurate reduction with any reduction in actionable threats.
The Bill also relieves regulated legal advisers of the risk of being liable as a threatener. Paragraph 7.65 of the original consultation suggests that smaller, non-specialist lawyers are at risk even though it is also acknowledged that threats actions against lawyers are very rare. My own experience is that, although actions may be rare, aggressive threats are alive and well. And just as highly qualified advisers have a hand in other walks of life to dream up aggressive and even egregious strategies, so too have some IP specialists. Overaggressive strategies should not be exempt and I will come back to that.
There is also the issue of not having fulsome compliance with the Paris convention. I seem to recall that one of the section heading quotations in Blanco White—a popular tome for practical advice, at least when I first qualified—was:
“Agree to the resolution and say that British Law already conforms”.
The fact is that the more we have allowed exceptions from the original threats provisions, no matter how logical, the further away we are from compliance, and the tapestry of available other torts does not fill the gap, as has been elaborated in the consultation and background documents.
The current law, and the proposed revisions, continue with the presumption that a manufacturer does not need any protection against unjustified threats of proceedings for infringement, that the attitude of the rights holder is irrelevant and no good faith or belief in validity requirement applies, even though it does—or, at least, something called truth does—to the new permitted communications. Experience shows that this presumption leaves small manufacturers, and “start-ups” in particular, open to oppressive behaviour by larger entities. I will turn to some anonymised real life examples.
US corporation X threatened small British manufacturer M with proceedings for infringement of a British patent. The products made by M were within the scope of the claims of the patent. However, investigation showed that all the claims of the patent were clearly invalid in view of a document of which corporation X had demonstrably been aware for at least seven years, it having been cited in proceedings for amendment of X’s United States patent. There was no intention to litigate because of the vulnerability in the US legal position and the motive behind the threat was apparently to produce adverse publicity for M, and consequentially depression of its share price, making M cheaper for X to purchase.
Nothing in the new law would help the manufacturer M in what was a threat under an invalid patent. If aggressively repeated and publicised, the only remedy is still an action for revocation and even if successful there are merely costs and not damages. In similar situations where the patent is valid but there is not infringement, a threatened manufacturer might need instead to seek a declaration of non-infringement, which is even worse protection with merely costs and a declaration and no damages nor an injunction against future threats under the continuing patent.
SMEs cannot be going back to court asking for additional injunctions, even if that is the lesson of Apple v Samsung. In the absence of being able to claim an unjustified threat, the rights holder gets away with it. Here I point out that the purpose of legislation is not just about what happens in the small number of cases that get to court; it is about the deterrent to bad behaviour. It is about the speed limit, not just the speeding fine.
A second example: patentee A threatened small British manufacturer B with infringement proceedings. B commissioned an independent report which demonstrated beyond doubt that A’s patent was not infringed and offered to share that report with A. A refused to consider the report, but each year for four years—always just before a trade fair—A used a different lawyer to repeat the threat and publicised it. Using trade fairs in this way is a common ploy mentioned among the consultation documents. The Bill does not provide a defence for a manufacturer, so it is back to the non-infringement declaration, again with no injunction to stop future and repeated threats and publicity. In this case, A’s fourth solicitor then proceeded to threaten one of B’s distributors, C, on the alleged basis that C was an importer. Since the solicitor was already aware that the products were made by B in the UK, because of their own previous correspondence to the manufacturer and the replies, the threat to the distributor was plainly oppressive.
In subsequent correspondence the solicitor, somewhat smugly, said that a threats action was not applicable because the letter referred only to making and importation, which do not allow proceedings to be brought. That of course was simplistic, and a demonstrable ruse that it would have been interesting to see being explained to a judge. This was a circumstance when I consider it would be appropriate to pursue the solicitor in a threats action for the seemingly deliberate strategy of a deceitful letter in which they must have been complicit, and potentially the deviser. This was not a non-specialist firm.
What can we do? Other countries take the tone and circumstances into account when looking at the issue of liability. Paragraph 6.27 in the consultation says that the law in the Netherlands provides that,
“even a ‘justified’ threat may be unlawful if it is unnecessarily offensive or unnecessarily public”.
That comes from a tort which a senior Dutch colleague described to me as,
“violation of what has to be regarded as proper social conduct”.
The wording in the consultation document would be a useful addition to the Bill, not as a separate tort but as both a general requirement and one applicable to lawyers or advisers. It would enable bringing back lawyer or adviser liability for egregious behaviour without damaging the more general exemption and deal with the “copy and distribute to customers” tactic at trade fairs.
The wording could be extended for the purpose of other abuses—for example, along the lines of the Paris convention that any exempted or permitted threat becomes unlawful if it is contrary to honest practices in industrial or commercial matters; after all, that is what we are meant to comply with. Alternatively, to make a more homegrown version, one could use the tests from the Broxton abuse of process case, which refers to conduct of proceedings,
“designed to cause the defendant problems of expense, harassment, commercial prejudice”,
or for “collateral” reasons.
It is most unfortunate that the Bill only helps rights holders and does nothing for the threatened party, when a significant part of the consultation was about abuses by rights holders. However, infringing manufacturers can be sneaky too and seek a new source, or there may be a commissioning party as the economic actor. I would be interested to cover those situations by allowing wider undertakings to be sought from manufacturers that cover selling from any other unlicensed source and more generally treating those commission acts as primary actors.
I will not elaborate in detail now, but I flag up concerns over new Section 70C(3) and possible ambiguity in the burden of proof for validity, and over whether the position of notice and takedown notices under Article 14 of the electronic commerce directive should be referenced. We could greatly improve the Bill, and I hope I have whetted appetites to help all SMEs with the anti-abuse measures that I have outlined.
Lord Hope of Craighead (CB)
My Lords, I add my words of welcome for this Bill and for the use of the special procedure, which will enable detailed scrutiny to be conducted in a more appropriate setting for a Bill of this kind than on the Floor of the House. Considerable thanks are due to the Law Commission for the care it has taken in the formulation of the proposals, and to the Government for initiating the process in the first place and agreeing to take the legislation forward in this way.
By way of background, though it may be an obvious point, intellectual property is a highly specialised area of the law. The problems that it gives rise to are often complex and difficult to resolve. In the case of patents, for example, which I had some experience of in practice when I was at the Bar—though nothing like the distinguished practice that the noble Baroness, Lady Bowles of Berkhamsted, has had—I found that construing and understanding the patent specification in itself can be a time-consuming and difficult exercise. One must understand the subject matter of the patent as well. What may appear at first sight a fairly simple matter will very often turn out to be far from simple once you get down to the detail of the design or the process that is protected. Specialist advice is almost always needed both as to the law and the technology. Advice of that kind tends to be expensive because the intellectual effort required is so demanding and so time-consuming. Anyone who is drawn into legal proceedings in this area of law has to face up to that fact, and that is why threats are so compelling in this field. For the same reason, those who have taken the trouble to register their rights will usually have had to spend quite a lot of money in taking that step.
As the Minister has properly recognised, it is essential that those who go to the length of registering their patents, trademarks or design rights should be able to enforce the rights that registration gives to them. The law must allow those rights to be enforced. Those whom the law in this area regards as the primary actors—those who make things or affix signs to their goods or packaging, for example—must accept that there may be others who do such things who have taken steps to protect themselves against infringement of their rights and have a legitimate commercial interest in doing so. They must take the risk of proceedings against them if they do not do their homework first to see whether there are any relevant intellectual property rights that must be respected. Registration is designed to give notice to those who need to know, because they are primary actors, that these rights exist. In that respect, as I understand it, the system across all these IP rights works well.
But—and this is the area we are really concerned with here—there are others, as the noble Baroness has explained, whom the overzealous or unscrupulous may see as competitors, and they are not in that category. These are the secondary actors, whom the law has long sought to protect against misuse of the right that has been protected. The noble and learned Lord, Lord Mackay of Clashfern, told me yesterday about a case which he had when he was at the Bar in which his client was unashamedly seeking to drive his competitors out of the market by making threats of infringement proceedings against them. The competitors were simply using, not making, equipment of the same kind—it happened to be cranes—as that over which his client had a patent. He told me that his client was one of those people who would not take no for an answer—I suspect that the noble and learned Lord was the person saying no—and he was not to be put off what he was doing. As the impact assessment for this Bill puts it, people such as users, retailers, wholesalers and customers ought not to be and, under the law as far as it is, cannot legitimately be threatened with proceedings of this kind. I think that the noble and learned Lord was rather relieved when at the end of the day the overzealous patentee, when taken to court under the previous legislation—that is before the 1977 Act—lost his case. Situations of this kind are not confined to that one experience. They are, as has been explained, not uncommon, and that is what this Bill is all about.
Two questions need to be answered at this stage. The first is whether the protection provided by the existing law is sufficient and proper and needs to be reformed at all. The second is whether the reform proposed here is the right kind of reform. As to the first, it seems that there are ample grounds for believing that reform is needed. I do not think that the noble Baroness, Lady Bowles, disputed that point. Section 60 of the Patents Act 1977, which Clause 1 of the Bill will replace in relation to patents, looks relatively simple and satisfactory at first sight. However, we will have to see how it works in practice. The provisions in this Bill are longer and more elaborate. One might wonder whether it was wise to depart from the simple approach. However, the present approach in the statute suffers from major defects, among which are a failure to distinguish clearly between those threats that may be made legitimately and those that may not. The defences which may be advanced if proceedings are taken need to be clarified. The existing law fails to set out clearly what communications will not amount to an unjustified threat and, as has been pointed out, says nothing either about the position of professional advisers acting on the instructions of someone else. The result is a situation that, despite its apparent simplicity, has been shown to be unduly complex as the boundaries between what is permissible and what is not are unclear, resulting in unnecessary costs.
As the Minister explained, the arguments for reform were fully explored by the Law Commission in an impressive series of studies in its report of April 2014 in the light of the responses received to its consultation paper of the previous year, and in its further report of October 2015 in response to the Government’s request for a draft Bill. For my own part, I think that the arguments advanced for reform are compelling, and it seems to me that a strong case has been made out. I was particularly struck by an observation by the Scottish Law Commission in the course of its examination of the same issue. It made the point that a Scottish rights holder may prefer to issue proceedings for infringement in Scotland against a potential infringer rather than simply write a letter because it risks ending up in the High Court in London, which is the last place that a Scots infringer would wish to be taken, facing an action for groundless threats. This is the “sue first, write later” culture which seems to exist under the present law and which the Bill seeks as far as possible to eliminate. As the Law Commission put it in its October 2015 report, the current law tends to drive cases to court.
As for the question of whether this is the right reform, the Law Commission acknowledged in its report of October last year that one of those who responded to its consultation paper, Professor Sir Robin Jacob, a former judge with much experience in this field, said that the solution which had been adopted here was not the right solution and that it should be scrapped. The paper does not elaborate in great detail on Sir Robin’s points but it looks from what we are told that his complaint was that the Bill is excessively elaborate and complicated—I do not think he was making quite the same points as the noble Baroness has made—and that there is no hurry and therefore one should take more time to devise a more satisfactory reform. However, so far as the people who responded to the Law Commission are concerned, he seemed to be out on his own. Those who have taken a different view include a variety of professional bodies, including the Law Society of England and Wales, the intellectual working party of that society and the City of London Law Society Intellectual Property Law Committee. They also include the Law Society of Scotland, which in a communication I received earlier this week said that it welcomes and is supportive of the Bill.
It looks as though there was a clear choice whether to create an entirely new remedy to deal with the problem, such as something based on tort, or to build on the existing structure instead. The advantage of the latter, which was chosen, is that it makes use of a system with which those who work in this field are fairly familiar. That seems to be an advantage. The defects in the system are known, have been identified and can be addressed now without the need for further research and consultation, which a redesign would certainly need. Yes, Sir Robin is right, the Bill’s provisions are more elaborate and complicated than the legislation that exists at present but that is the price that has to be paid for clarification. If a more fundamental solution is needed, it can wait until later.
Detailed scrutiny is for the next stage, of course, but I will mention one point in passing, which I simply picked up when comparing the draft Bill, which the Law Commission set out in appendix C to its October 2015 report, and the Bill before us. The Bill before us is almost exactly the same as what was drafted by the Law Commission. There seem to be only two differences apart from a change to the headnote of Clause 3. One is the very proper addition to Clause 1 of provisions to ensure that protection against unjustified threats will be available in the unified patent court—which I think will become a reality next year—as well as in the UK courts. That does not require any explanation other than that one might observe that issues of infringement and the validity of a unitary patent, which might be raised by a defence of justification by a patentee to a threats action, will be in the exclusive jurisdiction of that court and cannot be brought to the UK court.
The other point that struck me as requiring some explanation is the omission in regard to each kind of intellectual property of the provision in the Law Commission’s draft. It seems designed to clarify what is meant by the references in those clauses to infringement in relation to proceedings for an order for delivery up or disposal. It may be that, on further consideration, clarification was thought not to be necessary. If that is so, then that is a perfectly good explanation. I am not searching for an answer now but, if one is available, I would be interested to know why that bit was taken out.
On the issues of principle, I fully support this Bill. I believe it to be uncontroversial, on the whole, and I agree that it should receive a Second Reading in the terms of the Motion.
Lord Hodgson of Astley Abbotts (Con)
My Lords, I am a lay man. As a lay man, seeing this rather daunting title, and glancing through the Explanatory Notes and the Law Commission’s background paper—number 360—underlines the technical nature of much of what is proposed. Furthermore, I see that my fellow speakers include two distinguished noble and learned Lords and, now I understand, an equally distinguished retired patent attorney who has made a very incisive speech. I have the sense that the ice may crack beneath my feet at any moment, but I want to persevere because the safeguarding of the proper use of intellectual property provides an important element in the future prosperity of this country. In doing this, I pray in aid my career in helping, advising and financing small and medium-sized enterprises.
Before I go any further, I will briefly divert to add to the remarks of the noble and learned Lord, Lord Hope, and give a word of thanks to the Law Commission for its work. I had the pleasure of working with the commission quite a lot, following the review I carried out for the Government on the Charities Act. A further Law Commission Bill is on the stocks, updating some of the more technical aspects of charity law. I will not say that I always agree with all of the Commission’s conclusions, as that would be going too far. However, one cannot but admire the intellectual rigour with which it takes issues apart, and it often does so in a way that brings clarity to pretty dense topics. The Bill before us today is no exception.
One of my regrets is that a lot of the Commission’s excellent work is dissipated because Bills get stuck somewhere at an early stage of drafting. Since we are discussing a Law Commission Bill, I wonder if, in due course, my noble friend could write to the noble Lords who participated in the debate today to give us all a progress report into where the various Law Commission Bills are—whether they are in draft form or still in consultation. I know, for example, that there is an extremely important consultation finishing on electoral law, which is an area of considerable interest. It would be good to know where the Government have got to in their thinking on the various proposals before the Law Commission so that the terrific work in what it does is not wasted because time passes.
I turn to the Bill itself and its policy background. My noble friend on the Front Bench will have heard me on this issue before, but whatever the outcome of the referendum, for the next quarter or half a century this country will have to watch an irreversible shift of relative wealth from the West to the East. One way to mitigate the impact of this trend will be for us to be smarter and more innovative—not just to make the discovery but above all to develop and exploit it successfully. A vital part of that process will be an appropriate legal framework for intellectual property.
Noble Lords may be aware of the new use of the name “unicorns”. A unicorn in modern financial speak is a start-up company now valued at more than $1 billion. Last year, 11 unicorns were created in Europe—over half of them in the UK. Before we become complacent, I should say that the US created 22 unicorns in the same period. These larger early-stage companies represent competitive threats to many established players, who can react violently to the threat. This is where I am interested in exploring how the Bill could be of assistance.
Not just unicorns need protection and support; in many ways they are reasonably resourced to deal with the litigious, the unruly or the obsessive. Small and medium-sized companies are more vulnerable to unreasonable behaviour. In part this is because they may lack access to expert legal advice—not for them the expertise and the associated invoice of the magic circle firms. I am pleased to see that in paragraphs 1.32 and 1.42 the Law Commission placed special stress on the importance of and the vulnerability of small business rights holders. It will therefore be important in due course to publicise these new provisions—of course through legal channels so that smaller firms of solicitors away from London can advise their clients in confidence, but also through trade bodies, chambers of commerce, and so on.
For example, if the safe harbour protection afforded by the “reasonably regarded” test—an important development, as I read it—is to have a real commercial effect, it will need a commercial interpretation and approach as well as a legal one. Matters which seem so open and shut in the calm deliberation of a court-room, often with the added advantage of several years of hindsight, do not always seem so clear in the hurly-burly and time pressures of day-to-day commercial life.
Just in passing, on the power of the court to add to the list of permitted purposes in proposed new Section 70B(2), is this a normal conventional power? It seems to be a legal Henry VIII power, but I may be wrong, and no doubt I shall be put firmly in my place shortly. I rang a solicitor to ask him and he told me that he had not come across it anywhere else, but I will be interested to hear what my noble friend has to say about that.
I will follow the noble Baroness, Lady Bowles of Berkhamsted, on forum shopping. I have an interest in extradition—I am a trustee of Fair Trials International—and in extradition cases there have been attempts by one side or the other to manoeuvre the case into the courts seen as most likely to reach a favourable answer. This issue is addressed in 3.12 of the Law Commission paper, but could it happen in IP cases under the provisions of the Bill? As I read it, I think not, but perhaps my noble friend will give some further clarity in due course.
Sadly, however, the Bill does not—perhaps cannot—address one of the major causes of inequity in IP cases: the time it can take to get cases to court and to a decision. It is not so much the time it can take as the ability of one side, particularly a large company, to obfuscate and delay so that the smaller company runs out of cash and/or energy to prosecute or defend its case. The Law Commission is clearly aware of this, because it says at paragraph 1.19:
“Sometimes, the risk of facing costly litigation may prevent a small enterprise from asserting its intellectual property rights where these have been infringed by a larger competitor with greater resources”.
That addresses the issue of money but not the issue of time passing and its associated costs—not just financial but, for a small company, the diversion of inevitably scarce senior management time and expertise.
The noble and learned Lord, Lord Hope of Craighead, referred to the issue of the approach that has been taken in drafting the Bill. I find it slightly strange that, at paragraph 4.4, the Law Commission reached the conclusion that a,
“standalone measure could easily go unnoticed by this group”,
and instead decided in its drafting to amend three existing Acts of Parliament. I would have thought that a stand-alone provision was less likely to be overlooked than amendments to existing pieces of legislation, but I leave that to more experienced and wiser heads than mine.
I conclude with a sad, real-life example of why this Bill is necessary but also why I fear it cannot provide a complete answer. A company with which I was involved developed a new chiller cabinet, familiar to Members of your Lordships’ House from every supermarket and grocery store. Imagine the company’s delight when a major supermarket chain bought six of the new models. Imagine its dismay when, a few months later, a whistleblower who had left the supermarket on bad terms revealed that the six chiller cabinets had not been purchased to be used, but to be taken to pieces and re-engineered to get round the IP and the patent. It proved exceptionally difficult for the smaller company to discover what was going on. The supermarket chain was not intending to sell any of the new-style cabinets, merely to use them internally.
In due course, enough evidence was found to build a case against the larger company. It naturally denied any patent infringement. More importantly, it took the opportunity to tell the smaller company that its legal advice was that, given the time needed to obtain technical advice and so forth, it would take at least two years for this case to get to court and that, before it started, it should be prepared to allow for that time lapse and build it into its cash flow. In a “just so you know” add-on—the chilling phrase used in the box on page 10 of the papers before us—the supermarket gave the smaller firm notice through its solicitors that it would inevitably wish to consider launching a counter-claim to protect its position.
There is only one winner is such circumstances. If the provisions of this Bill can do anything to reduce the inequality of arms in these sorts of cases, it will be well worth while. I therefore very much support it.
Lord Brown of Eaton-under-Heywood (CB)
My Lords, it was with some considerable diffidence that yesterday I put my name down to speak in this Second Reading debate. I would not have done so had not my noble and learned friend Lord Walker of Gestingthorpe been tied up as chairman of the HS2 Bill Committee and unable to take part today. He is a great expert in this field, and I certainly am not. Realistically, I am virtually as much of a layman as the noble Lord, Lord Hodgson, who has just spoken.
As it happens, my only direct experience in this particular area of the law was sitting with my noble and learned Friend, Lord Walker of Gestingthorpe—Lord Justice Robert Walker, as he then was—in the Court of Appeal in 1999 in a reported case called Unilever v Procter & Gamble, which concerned more particularly the interrelationship between the jurisprudence on intellectual property threats and the without prejudice rule. My noble and learned friend Lord Walker gave the lead judgment, while I gave an altogether shorter concurring judgment, which I began thus:
“Coming as a stranger to this arcane world of patent infringement threats actions, I am struck by the initial difficulty in understanding just what is the policy underlying section 70 of the Patents Act 1977”.
I then turned to examine some of the preceding and subsequent law, continuing:
“I must say that I find the position today”—
this of course was 1999—
“most curious and unsatisfactory. Although, essentially, I take the policy to be … that rival manufacturers may threaten each other but should not threaten each other’s customers with the objective of inducing them to cease dealing with their rivals … it cannot be pretended that the legislation is this narrowly confined”.
In that context, I then referred to the Cavity Trays case, which is one of those discussed in the Law Commission’s 2015 report and which, in 2004, led to an earlier change in our law.
However, as recorded in paragraph 1.23 of the Law Commission’s report, that change has not yet been extended—as it certainly seems to need to be—from patent law to the law of trademark and design. I confess at once that in truth I remain a stranger in this arcane world of unjustified threats in intellectual property cases, but I read the Law Commission’s report with considerable interest and no little admiration. It has certainly persuaded me that changes in the law are now required and that the Law Commission’s own proposed Bill is indeed the right way of seeking to achieve these changes and reforming this undoubtedly problematic area of our law.
I do not intend at this stage to comment in detail on the present problems and their proposed solution. I recognise of course, as another noble Lord did, that Professor Sir Robin Jacob—another great expert in intellectual property law, with whom, again, I used to sit in the Court of Appeal—fundamentally opposes the evolutionary model of reform which is now advanced. One only has to look at paragraphs 1.44 to 1.48 of the report to see his quarrel with that. However, I find the Law Commission’s response to this view, which is backed by the great majority of consultees, to be convincing. By all means let further work be done hereafter on the possibility of substituting for the existing, somewhat elaborate and complicated statutory scheme a new general tort of false allegations. But in the meantime let us deal with the identified, specific problems, which require an altogether more immediate solution.
I am struck not only by the quality and cogency of the report but by paragraphs 4.8 and 4.9, under the heading, “Stakeholder comments on the Bill”. They indicate that it commands the substantial support of a host of experts, including not least two Lord Justices—both specialists in this field—a High Court patent judge, others to whom the noble and learned Lord, Lord Hope, referred, the Law Society, the IP committee, the Chartered Institute of Patent Attorneys, the Intellectual Property Office and of course in Scotland that most distinguished academic, Professor Hector MacQueen of the Scottish Law Commission.
Above all, I make the point that, as we all know, this is a Law Commission Bill and as such I suggest that it deserves to be supported unless compelling arguments are raised against it. We often complain—in my view, rightly—that generally speaking there is not enough pre-legislative scrutiny in our parliamentary process. But Law Commission Bills par excellence have manifestly enjoyed pre-legislative scrutiny. Plainly, there has been here an exhaustive process of progressive consultation and analysis. The Law Commission itself is an admirable body which I strongly support. Only the very best lawyers serve upon it and presently they serve under the expert guidance and chairmanship of that most estimable member of the Court of Appeal, Lord Justice Bean. I echo what my noble and learned friend Lord Hope of Craighead and, indeed, the noble Lord, Lord Hodgson, have just said about this topic generally and Law Commission Bills. With them, I welcome the Government’s response to this report.
I, too, therefore wish the Bill a smooth and swift passage, with or without the sort of tweaking which the noble Baroness, Lady Bowles, suggests. I support the Motion to give it a Second Reading.
Lord Lucas (Con)
My Lords, I am not going to differ from anyone who has spoken before in welcoming this Bill. It seeks to deal with an acknowledged mischief of unjustified threats and, to my mind, follows related improvements that we made to the law of defamation a couple of years ago. I hope—as I think the noble Baroness, Lady Bowles, does—that this is a direction in which the Government will continue. There are clearly other opportunities for improving our national life in this direction. It is therefore a puzzle to me that the Government appear to be going in the opposite direction on copyright.
The repeal of Section 52 of the Copyright, Designs and Patents Act 1988 opens up any and every photographer and reproducer of photographs of interior or exterior views to threats of legal action from the copyright holders of any designed object depicted in those photographs. All the defences that exist now are to be swept away. There was no need for the Government to do this. There is nothing in the underlying EU legislation or court judgments that requires this. It appears to have been done for ease and tidiness. However, we will find ourselves in a position where if you publish a photograph of a London street scene, you will be actionably infringing the rights of the manufacturers of cars, clothes, traffic lights, lamp-posts—anything designed that can be identified in them, except for sculptures, which alone are exempted under Section 62. The threat applies to historic images, too, so any reproduction of any image taken some while ago is actionable in the same way. Because we do not have in this country an artistic merit restriction on copyright, the ability to take action does not apply just to the designers of an object but to anyone making a design drawing preliminary to the object. Do the Government really believe that in a world flowing with lawyers and collection societies no one will buy up the rights of some former designer of everyday objects, say Douglas Scott who designed the Routemaster bus, and start suing anyone who depicts them? The world is sadly full of people who like to play a junior version of the game that this Bill addresses.
A few years ago, I had a small role in the demise of ACS Solicitors, which were thankfully sacked by the Law Society after some long delays. They were shaking down internet users for allegedly infringing copyright on pornography and other low-grade media. Their evidence was extremely suspect but was never tested in court. ACS made its money from the threats and never took anyone to court, although it used the courts to target its victims via Norwich Pharmacal orders. Now some careless person has dropped blood on to the ashes of ACS and the same scam is alive again with the same thin evidence. The relevant body has an IP address. It has not revealed how it got it. But, given that IP address, it is going through the same old pharmacal procedure, but this time, to avoid the vulnerability that ACS experienced, the solicitor involved—Wagner & Co—withdraws after obtaining the Norwich Pharmacal order, so it is not involved in the threat processes, which are undertaken by shell companies. There does not seem to be any redress for people threatened or for ISPs which are asked to comply with Norwich Pharmacal orders.
If anybody comes across the names of Hatton and Berkeley, Ranger Bay, Golden Eye International, Mircom International, TCYK—all of them well known in the correspondence about what is going on—I urge them to put this thing in the bin. The current scammers are not pursuing anyone: they are just after threats and extortion and shaking people down. If you really feel you need to talk to a solicitor, there is a firm called Lawdit which has hundreds of these cases on its books and is consolidating them.
I applaud the Government for helping our businesses avoid unjustified threats but I would like to know what they intend to do to help the granny in the Clapham nursing home who is being threatened by their smaller, nastier cousins with allegations that she has been downloading pornography illegally. Surely it is not acceptable to the Government that that should continue. These villains are laughing at and abusing the system, just as ACS did until it was closed down, just as the people that the Bill addresses are doing. Could we not, for instance, allow citizens and those acting for them to send a sue or desist letter and then make any further threats short of action liable to penalty, as is done in the Bill? Would that not be a good right for citizens who are being threatened in any circumstances? Also, what do the Government intend to do to mitigate the mischiefs that they are unleashing by the abolition of Section 52? Could they not, for instance, extend the protection given to sculpture in Section 62 to all objects incidental to a 2D or virtual production? That would be very similar to the protection which exists at present.
The Bill shows an admirable intention to protect businesses and citizens from the parasites who live by making unjustified threats against them and from those who seek to use very important and well-meaning legislation, intended to protect those who create in this economy, to unjustified advantage. I hope that the Government will look at their own actions and at what is happening at a lower level and consider going further than they have in the Bill.
Baroness Wilcox (Con)
My Lords, I am delighted today to be speaking under the guidance of my Minister here: after all, she has had experience of large companies and food companies, mine being a tiny one and hers being a very large one. She was a very senior civil servant when I first worked with her. She was working in No. 10 and we were trying to sort out how to write complaints systems for all sorts of other businesses. It is very nice to be talking with a Minister who knows what it is to be a Minister, to be a civil servant and to work in business. I feel that I will be very well led by her on this.
I have also had experience of large companies and trademarks. My own company was getting ready to put together a whole new range of foods. We had had our own experience of trademark registration: we had just started doing this registration when suddenly, one day, I got a telephone call from a very large company saying that it thought I had made a mistake, that I was attempting to put something through, that it had not gone through and that I should stand back, because this company had gone ahead and decided on its new product. It had got all the paperwork, packaging and everything done. I was very fortunate to be able to phone the civil servants who had been guiding me that far and who had told me that, once I had started to make this registration for what was then a trademark, I was safe and that I should tell them to go somewhere else. The answer was, “Oh dear, we have made a terrible mistake. We would like to give you lots of money to not go forward with what you are doing”. As it happened, we had not even started properly and were looking to build a new factory. The outcome was that the company paid us enough money to build it. I encourage any small company that gets threatened by anybody else to immediately assume that it is in the right and not, as most small companies do, automatically assume that it might have got it wrong.
I will move forward to other people who have spoken. My noble friend Lord Hodgson talked about unicorns—the larger, earlier-stage companies—and I was very interested in what he had to say. The Law Commission emphasises how vulnerable SMEs are, and I am only too delighted to support this here today. I will not say much more, as there will be plenty of other times for us to do that as we go forward, but I will just say thank you very much indeed for bringing forward something which is going to be such a help to small and medium-sized businesses. Whether we vote to stay in or vote to stay out, our patents are our patents.
Lord Stevenson of Balmacara (Lab)
My Lords, unlike the noble Lord sitting on my left who admitted he got into this with only 24 hours’ notice, or slightly more, I have seen this coming for some time. However, that did not help ease my nerves or concerns, particularly when I saw the notable list of those who are speaking, including—I am able to say this for the first time—my noble kinsman, the noble and learned Lord, Lord Hope. It is a very distant relationship but it is very nice to be able to say that. The noble Baroness, Lady Bowles, speaks from detailed experience, and my nerves did not settle as I listened to the debate. However, fortune favours the brave and we must make progress on this important issue before us. I want to make it absolutely clear from the start that Her Majesty’s Opposition do not wish to oppose the Bill in any sense, although we might wish to see it improved. My main point will be that there is a wider context, and I hope some of the points that have been made today might be brought forward, in particular as we have evidence sessions—a point I will come back to.
I thank the Minister for her very good introduction to the Bill, which covered all the ground needed to get us into the debate. I also thank her for the helpful pre-meeting which we had with the Law Commission and the official Bill team, which certainly helped to set us up for this. As the Minister said, we are in a relatively new process, which is being used for only the second time here. As I have already hinted, the key to the way forward on this—because it does not apply to many Bills that we see in your Lordships’ House—is that we will have an opportunity to ask for evidence to be presented to us before we get into the detailed scrutiny. Given that we are not opposing the Bill, my points today will therefore be largely about suggesting areas where we might receive some additional information which will help us as we move forward.
The first point is one that has been picked up in a couple of speeches today, and appears every time we have an intellectual property Bill in your Lordships’ House. It may be that we do not have enough intellectual property Bills, which therefore feeds this desire for a wider and broader discussion—I can see the Minister quailing slightly at that, but I think that is broadly a good thing. After all, she started her work in this House with a robust defence of an issue, I think with the Enterprise and Regulatory Reform Bill—I forget, as it was two years ago when she first joined us. That was a bit of a baptism of fire, but she survived that and is now able to bring Bills before us with great confidence and skill.
However, I do not think we have ever really had the chance to debate the assertion made in some of the documents we have seen today, which I think was picked up by the noble Lord, Lord Hodgson, in his remarks. The reason for having an IP regime is precisely because it encourages a flow of wealth, employment and rewards based on the ability of those who have innovation at the heart of their work to develop that and bring to the market material, objects and things that can be sold for reward.
I wonder whether the links between the incentive needed to encourage innovation and the rewards are slightly out of sync, particularly looking across the range of rights. The design right regime is still being changed slightly. Today we are mostly talking about registered design rather than the huge amount of unregistered designs, which I believe are orphans in our discussions about IP rights. Patents and copyright are moving in slightly different directions, particularly in relation to the timescale in the licensing arrangements following the granting of such rights, and the way in which competition can be encouraged. This is not the occasion to do this but, as a context for the debates we are having today, it would be interesting to get a broader discussion. Maybe the evidence sessions could do that.
My second point was raised by the noble Baroness, Lady Bowles. It is an important point and I hope that we do not lose it. At a time when, as a country—or perhaps more in terms of the broader thrust of consumer rights—we are moving to an alternative dispute resolution system, it seems a little strange that we do not see much of that in the Bill. I therefore wonder whether it would be interesting to get more context for how Civil Procedure Rules and the rest would apply if there was a more vigorous and appropriate ADR system. I think that would be a helpful and useful part of what we are doing.
We owe a great debt of gratitude to the Law Commission for its work on this. I have read right through its reports and appreciate the considerable amount of work that was involved in getting us to this stage. The main reason for changing the law is that the present arrangements are complex and inconsistent. We are responding to that, and the Bill clearly takes a line on this, which the Law Commission calls “an evolutionary approach”. Part of its argument for that approach is that there is less cost and uncertainty, which is a point that I think was picked up by the noble Lord, Lord Hodgson. I agree with that in the sense that it is a sensible path through and we can do it. However, as we have heard—a number of noble Lords mentioned this—there is another much more radical approach that would bring the UK into line with how threats are dealt with in mainland Europe. As we heard, most countries deal with groundless or unfair threats as an aspect of the general law on competition, in particular by producing a tort which would reflect that. Where there is a specific tort, this brings us back to the Paris Convention for the Protection of Industrial Property, where signatory states are required to offer effective protection against unfair competition and specific acts are prohibited. It also goes much wider in relation to false allegations in the course of trade and some of the points that we have heard about needing to bring back a sense of the proprieties of business practice, which seem to have come a bit detached from the rather technical approach that we are taking in this Bill. Therefore, I would like to hear evidence in Committee around where this debate might go. Assuming it goes through in broadly the same form in which it is before us, is there a horizon that we can look to over which will come a cavalry charge bringing in the new tort that might bring a broader and better solution to the issues we face today?
Fourthly in my list is the question of client and professional adviser relationships, which has been touched on, in particular in the comments by the retired judge, Sir Robin Jacob, who thought that this was a rather bad idea. I think his words were that there were too many cowboys out there. He would argue that the provision that is now in the Bill appears to be in response to special pleading by solicitors to avoid liability and get more work while writing more letters to scare SMEs. That may be an extreme position. Indeed, the number of responses has already been quoted in respect of the general support that there appears to be for the Bill as presently drafted. However, it seems to me that, by taking a step down this route, the Government may be attacking the whole basic common-law position on the liability of agents acting on the instructions of their principals. We should perhaps hear a bit more about this before we take this step because, once it has happened here, it may have an impact somewhere else. Why is it, for example, that we are choosing to cover US lawyers and others, not those based in the UK, on this matter? Are there not other ways in which those who might be threatened by this could take cover within either their own professional organisations or through insurance? I do not have any expertise in this area at all but I have received representations on it, and we should have a bit more understanding before we go into it.
That is an agenda for how Committee might be prefaced by an information stage. This is a small and important Bill, which we can get through relatively quickly, but the processes and procedures are important. It should be borne in mind that when embarking on this process, we in your Lordships’ House are largely taking the responsibility for ensuring that the material that goes forward to the other place has been properly looked at and explored, and obviously we need to have the sort of scrutiny that would give credence to that approach. But having said that, I am happy to support the Bill, and I wish it well.
Baroness Neville-Rolfe
My Lords, I am very glad to hear such a welcome for the provisions in the Bill. It is based on careful and detailed recommendations from the Law Commission, which worked very closely with stakeholders to develop the proposed approach and the Bill itself. However, as I said in my opening remarks, this is a very complex area—“highly specialised”, in words of the noble and learned Lord, Lord Hope of Craighead. I therefore welcome the expertise in the Room and the experts we have in this discussion. That will be helpful when we come to Committee. I am especially grateful to the noble Baroness, Lady Bowles of Berkhamsted, for bringing her enormous experience to this area and for illustrating her comments with telling examples, which I am sure we will come back to when we come to the next stage of proceedings.
I also agree with the noble and learned Lord, Lord Hope, and my noble friend Lord Hodgson of Astley Abbotts, that we should thank and congratulate the Law Commission for and on its work. The debate shows what tough and specialist judgments it has to make all the time in the work it does. I agree with the noble and learned Lord that the Law Commission gives us ample reasons for supporting this reform—it seems to be of the right kind. I am obviously very aware of Sir Robin Jacob’s views, which do not, as he said, tally with those of most stakeholders, and I was glad to hear from the noble and learned Lord, Lord Brown of Eaton-under-Heywood, and was pleased that he was struck by the quality of the Law Commission report. I also take this opportunity to thank my noble friend Lord Hodgson for the work he has done with the Law Commission, which I know it values. On his comments on the dissemination of better information on the Law Commission’s wider work, we will see how we can progress that, and if it would be helpful I will write to noble Lords.
Lord Hodgson of Astley Abbotts
It is not so much the dissemination of the Law Commission’s work but the question of where the individual reports have got to. It is not that nobody knows it is happening—its electoral law report is excellent—but it needs to be followed through, and if it is not, we need to be told why. Frankly, asking about this was a way to put pressure on the Government to make sure that this very good work is not dissipated. I understand that what the commission does may not always be acceptable—that is fine—but let us make sure that we either bring it forward and use it or kill it off and say that we do not want it. That is why I hope that the Minister will be able to tell us—not now; I quite understood that she could not do that, but perhaps she could write to those of us who have interests in this—the situation with regard to the tremendous work that the Law Commission has been doing on individual projects, not just this one.
Baroness Neville-Rolfe
I think I have already said I will write. In his inimitable way, my noble friend has pressed me on details. I am delighted to say that I will look into his points and write.
We can encourage the Government to do more to take up the Law Commission’s good work and progress it into Bills, if this Bill has a smooth passage. We need to resist the temptation to make it too much of a Christmas tree. I think that others have said the same thing. As the noble and learned Lord, Lord Brown, said, the Law Commission is a model of pre-legislative scrutiny, and we obviously should have proper regard to that.
As noble Lords have said, getting the IP framework right is key to supporting business, especially small business, entrepreneurs and the economy and society. I was so glad to hear from my noble friend Lady Wilcox from her own experience of pressing ahead and having success in defending her own inventions—a role model, if I might say.
We also need to prevent the misuse of threats to sue for IP infringement as a way to distort competition, so getting the IP threats provisions right is important for supporting our creators, innovators and businesses large and small.
The noble Baroness, Lady Bowles, had a number of questions on the Bill which I will seek to address. I suppose there is a flavour of being underwhelmed. I would say that the Law Commission made 18 detailed recommendations across the whole area to tackle the problems that stakeholders had identified. The Government have accepted all these recommendations, and so have brought forward changes across the whole scope of the Law Commission’s work. I think the noble Baroness felt that there might have been a missed opportunity to change the Civil Procedure Rules. The Law Commission has at all times been mindful of fitting the new provisions into the framework of negotiation and settlement set out in the Civil Procedure Rules. That was a good point to make.
The noble Baroness also asked about compliance with the Paris convention, which I am sure we shall hear some more about. This was a complex point which the Law Commission discussed in its report. However, I do not accept that the Law Commission would, after its careful work, put forward reforms which were somehow non-compliant with international obligations. That is not the case.
The noble Baroness and the noble Lord, Lord Stevenson, looked forward to a more dramatic reform—a new tort. Of course, the Law Commission’s wide public consultation received responses from lots of different stakeholders. It ranged from rights holders and industry bodies to IP professionals and members of the judiciary, and explored the possibility of a wider new tort. But it has to be said that, by a large majority, the consultees—not just the legal stakeholders who you might expect but also organisations like the BBC and Qualcomm—preferred the model which this Bill will implement. Furthermore, as has been said, the introduction of the long-awaited Unitary Patent and Unified Patent Court means that change is needed. I think that makes it more urgent. Without question, protection against unjustified threats should apply to unitary patents. However, that is not going to be possible under the existing framework that we have. If we do not make the reforms that we are proposing today, we will, I fear, leave a loophole which might allow threats to be made freely regarding the unitary patent infringement.
As the noble Lord, Lord Stevenson, said, there are some wider issues here. I am keen to keep on the straight and narrow to progress this Bill but I am sure that there will be wider debates on these subjects here and, indeed, on other occasions.
The noble Baroness, Lady Bowles, also said that the Bill did nothing for threatened parties. Our businesses tell us that the problem is not that the existing threats provisions are too weak but that they are unclear, inconsistent and do not allow proper pre-litigation talks. Therefore, the measures in this Bill make it easier for all parties involved in a dispute over IP infringement to negotiate a settlement and avoid litigation. They provide a much clearer framework within which innovative businesses and third parties can operate, giving more certainty over what approaches can be made legitimately to potential infringers. I was especially interested in her US example because, in about 10 years of being head of legal affairs at a major retailer, the only time I experienced disturbing threats from an attorney was when I was engaged in an antitrust case in the United States. You cannot believe—or perhaps you can—the aggressive nature of the call I took, not that it changed my position. The noble Baroness also said that under the legal adviser exemption you should still be able to pursue extreme or abusive behaviour. I understand her sentiment, but malpractice will remain an issue for professional regulatory bodies. The exemption applies to regulated professionals. Lawyers who go beyond their instructions will still be personally liable, so I am not convinced that a complex exception to the new legal adviser exemption is right.
I should take this opportunity to respond to the point that the noble Lord, Lord Stevenson, made at the end of his contribution when he questioned whether there was a case for an exemption for legal advisers. There are two problems. One is that suing the adviser is used simply as a tactic to play games and disrupt negotiations. That also means that the clients have to indemnify their legal adviser to cover any damages or legal costs that the adviser may face when pursuing potential infringement, which means that the client ends up paying, rather than the adviser. Industry figures say that this is a worry for small businesses and makes them reluctant to tackle alleged infringers which, as we know from my noble friend’s experience, is right for them to do. The new exemption deals with this and will therefore benefit rights holders as well as professional advisers. It exempts only advisers who are acting on their clients’ instructions in a professional capacity and are regulated in the provision of the services they provide. Where the adviser is exempt the instructing client will remain liable for making the threat, as they are now. Therefore, as we see it, no loophole is created.
The noble Baroness, Lady Bowles, also said that she felt the remedies were not sufficient. I was interested to hear her remarks, but I do not believe that there was evidence in the Law Commission’s extensive consultation —the working group discussions—for extending the remedies, which we believe are effective, clear and well understood.
My noble friend Lord Hodgson, in a wide-ranging intervention, reminded us of the problem of Henry VIII powers and asked about the situation in the Bill. Stakeholders were keen that law on permitted purposes could evolve, so it is not a wide power. The courts must have regard to the exemptions that already exist, and the Bill sets out limits regarding what may not be a “permitted purpose”. He was also concerned that it addresses bullying of small firms by big business and the provisions provide a much clearer framework within which businesses and third parties can operate. We believe that this clarity helps SMEs to navigate the law. Less complicated provisions also mean that less complicated legal advice is required, so there is a proportionately bigger saving for SMEs. The new provisions are clear that the rights holders must be sure that the right is valid before making threats. They cannot just bully people, and the threats provisions exist to ensure that threats of infringement action are not misused. ADR was also mentioned by a couple of noble Lords, and I am sure that people will want to understand the context with regard to ADR at the next stage.
I was glad that my noble friend Lord Lucas joined the discussion today. He added the issue of copyright to our debate, and I am very grateful to him for sharing his own experience in such detail. It is of course outside the scope of the Bill, but it might be helpful if I make a few observations. We needed to repeal Section 52 of the CDPA to give the full term of copyright to artistic works, whether industrially manufactured or created as one-offs, and to meet legal obligations, which have been made very clear. Guidance has been published for effective businesses and this is a living document, which we can refine to explain terms such as works of artistic craftsmanship, as the need arises.
We cannot speculate as to what individual companies will do in terms of threats of legal action, but I do not agree that all defences have been swept away by this appeal, as he perhaps suggested. A range of copyright exceptions still apply—indeed they were the subject that we debated on my first day as Minister. Photographers can rely on Section 62 if their work of artistic craftsmanship is in a public place, so that is not restricted to sculptures. It is also not the case that a photograph of a painting of a street scene will now infringe the rights of creators in all cases bar sculptures.
We have put transitional provisions in place for those who had pre-existing contracts, so they have a little more time to adjust, but I am of course happy to provide further clarification if my noble friend would find that helpful.
My noble friend asked what we are doing about aggressive invoicing. I am aware that there are some firms of solicitors who are still in the habit of contacting alleged copyright infringers with a financial offer to settle out of court. We must remember that when carried out properly this approach is legal. The Solicitors Regulation Authority has shown itself able to act effectively where firms repeatedly step over the line and we support their efforts in that regard. The IPO has published guidance on what its users should do if they receive a notice alleging that infringement has taken place using their internet connection. The Government remain a great supporter of the Get it Right from a Genuine Site campaign, which sends out notifications which never ask for money but instead educates the internet user about the consequences of infringement and where they can access content legitimately. This work is very important in upholding respect for IP and ensuring that our creators get the return on their inventions.
My noble friend Lord Hodgson asked about guidance on the changes. There will of course be extensive guidance on them. He suggested that perhaps this should be a standalone measure, but the Law Commission has decided to include the provisions in the relevant parent Acts. I suppose this is, again, a point about good regulation. Not only is it less likely that changes are missed that way but it ensures that the parent Acts remain a one-stop shop for relevant law on each right. I hope I have understood correctly what my noble friend was asking.
I believe that reform of the threats provisions is long overdue and I am delighted that we have been able to find some parliamentary time to progress this important Law Commission Bill. It will deliver the changes desired by stakeholders. It will help business negotiate fairly over IP disputes, while protecting those businesses which can be most harmed by unjustified threats. It will provide clarity and bring much-needed consistency across a complex area of IP law. As a result, the reforms in the Bill will help us, in some measure, to deliver our manifesto commitment to make the UK the best place in Europe to innovate, to patent new ideas and to set up and expand a business.
As the noble Lord, Lord Stevenson, said, the provisions of the Bill will be subject to a special procedure—a new one for me—and I very much look forward to taking advantage of your Lordships’ considerable expertise in carrying forward the debate. I look forward to constructive and helpful scrutiny in this interesting area, of the kind which I know, from working with your Lordships previously, we can certainly expect. I commend the Bill.
House of Lords
Planning: Retrospective Applications
Baroness Gardner of Parkes
To ask Her Majesty’s Government whether they will include in the draft regulations flowing from the Housing and Planning Act 2016 measures to deal with retrospective planning applications and variable fees for higher cost developments.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Williams of Trafford) (Con)
My Lords, I understand the frustration that breaches of planning control can cause. National planning policy was strengthened on 31 August 2015 to make intentional unauthorised development a material consideration in the determination of planning applications. We do not intend to impose higher fees for retrospective applications, but it is right that larger developments attract a higher planning fee. Fees already vary depending on the application type and the type and size of development proposed.
Baroness Gardner of Parkes (Con)
I thank the Minister for that Answer, but I remind her, although she may not need any reminding, that on the first day of consideration of the then Housing and Planning Bill, the subject was raised of the need for draft regulations and the scant detail that came to this House in that Bill. Can she confirm that we will definitely have draft regulations now that it is an Act, and that there will be adequate time for this House to consider this very important detail?
Baroness Williams of Trafford
My Lords, I do not need reminding; I shall never forget the first day of the Housing and Planning Bill. It has not become a recurring nightmare yet, but I certainly heard the feeling of the House loud and clear. I totally concur with my noble friend’s point that regulations should be in draft and ready on time for proper consideration by this House.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, at a time when local authority budgets are stretched and planning departments are often underfunded, does the Minister agree that it is time for the setting of planning fees to be delegated to local authorities, alongside the ability to impose heavy fines with enforcement action for those who knowingly flout planning regulations?
Baroness Williams of Trafford
My Lords, the noble Baroness makes a very valid point. We certainly want to balance the imposition of too high fees and encourage people to bring forward applications, but in terms of budgets local authorities have certainly played their part in contributing to reducing the deficit. They have performed that service very well indeed. We need to strike that balance between having fees that do not encourage efficiency and enabling local planning authorities to carry out their role.
Lord Beecham (Lab)
My Lords, the Minister was candid enough to acknowledge the frustration felt by those of us who were involved for so long with the Housing and Planning Bill, but is there not a larger issue here? The House has repeatedly received reports from the delegated legislation committee and other committees expressing their concern about the increasing reliance on secondary legislation and the inadequate scrutiny that ensues from that, both in this House and in the other House, where it is probably even worse. Is it not time to have discussion between the two Houses, and within this House, as to the proper role of secondary legislation and how the House can exercise proper scrutiny over it in advance of the completion of legislation?
Baroness Williams of Trafford
My Lords, we have had many debates on the subject of when secondary legislation should be used and its appropriateness. I hope that some of the pressure which this House, and indeed I, have brought to bear has ensured that we have had better information about secondary legislation. Certainly, where we have a framework Bill, that necessitates quite a lot of secondary legislation, but I think that the House has made its view very clear going forward in this Parliament.
Lord Forsyth of Drumlean (Con)
My Lords, given that the Treasury’s own projections show that the population will increase by some 3 million over the next decade, mainly as a result of immigration, will not planning departments surely need considerably more resources to deal with the housing needs of that group?
Baroness Williams of Trafford (Con)
My noble friend makes a valid point. The whole point of the Housing and Planning Act is not only to get more houses built but to ensure that the planning system is more efficient to enable that.
Lord Campbell-Savours (Lab)
My Lords, if the Government had been listening to concerns about the use of secondary legislation, why was it that my noble friend Lord Watson of Invergowrie had to introduce the amendment that he did to yesterday’s legislation? Surely the Government are not listening.
Baroness Williams of Trafford
I understand that the Minister replied to that yesterday. I apologise to the noble Lord because I was not here for that debate, but I can reply to him in writing.
Lord Young of Cookham (Con)
My Lords, can my noble friend tell the House what percentage of planning applications are dealt with within the statutory period by local authorities?
Baroness Williams of Trafford
My noble friend sends a question to try me. I will have to write to him on that.
Baroness Gardner of Parkes (Con)
My Lords, is it not a fact that the statutory instruments brought to us are unamendable and that, following the comments we have heard today in the Chamber, there may be a need to look at that again? Opinion is divided and some say that there is no reason why they have to be unamendable—it would be a question of legal decision and a procedural matter. In a case such as this, where my noble friend has assured us that we will have the right to go into the detail, we will be satisfied, but there are many cases where the statutory instrument comes up, such as the one concerning the leasehold valuation tribunal, and it has to be either abolished or accepted—there is no choice of any halfway house.
Baroness Williams of Trafford
I think my noble friend made her point very clearly in her supplementary question about draft regulations being ready on time for proper consideration. I am not a constitutional expert and I do not want to go into that area, but giving noble Lords sufficient time to consider regulations is certainly important.
Baroness Farrington of Ribbleton (Lab)
My Lords, I declare an interest as someone approaching the age of 76. Many of the people who come to this country referred to by the noble Lord will work in services to support those of us who are older, in caring, nursing and medical support. Does the Minister agree that, without them, our services would be the weaker and the poorer?
Baroness Williams of Trafford
I am sure the noble Baroness makes a very valid point. On the question of planning, it is important that the types of housing that people need, both in London and elsewhere but particularly in London, meet the needs of those people—hence why the Government have doubled the housing budget to £20 billion over this Parliament.
Careers Education
(7 years, 10 months ago)
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Lord Storey
To ask Her Majesty’s Government what plans they have to develop careers education.
The Lord Privy Seal (Baroness Stowell of Beeston) (Con)
My Lords, later this year the Department for Education will publish the Government’s strategy for improved careers education and guidance for young people. This will set out a clear vision of the progress that we want to achieve by 2020. We are investing £90 million into careers policy over this Parliament. This includes £20 million to increase the number of mentors from the world of work, supporting young people who are at risk of underachieving.
Lord Storey (LD)
I am delighted to hear that the Government are producing this strategy. Would the noble Baroness not agree that careers education is hugely important to young people, particularly those from low-income backgrounds and from certain ethnic groups, who may not have the informal social networks that provide the equivalent advice and opportunity? She must also be concerned that the last Ofsted inspection found that only one in five schools was offering effective careers education.
Baroness Stowell of Beeston
Of course I am concerned if careers advice is not properly provided to students in all schools. It is vital that people have access to good careers advice and that through careers advice they can see clear opportunities for them when they leave school that go beyond just the academic route. That is why the Government have invested £90 million into careers policy this Parliament and will continue to place great emphasis and importance on careers guidance.
Baroness Corston (Lab)
As the chair of the Social Mobility Committee of your Lordships’ House, I would like to tell the Minister that we found that careers advice and education in this country is in a parlous state. The committee recommended that there should be: independent careers advice and guidance, supported by a robust evidence base and drawing on existing expertise, which should not involve schools and colleges; independent face-to-face careers advice which provides good-quality, informed advice on more than just academic routes; a single access point; and, finally, improved career education in schools.
Baroness Stowell of Beeston
The committee that the noble Baroness chaired on social mobility was incredibly important. It covered a topic close to my heart and to that of all noble Lords in this House in ensuring that people from all backgrounds have the opportunity to fulfil their potential and have great awareness and understanding of the various routes available to them in achieving their potential. That is why we as a Government are doing so much to try to improve the careers guidance, not just in schools but, as the noble Baroness says, to strengthen the dialogue and connection between schools and local employment and businesses in school areas.
Lord Leigh of Hurley (Con)
Could my noble friend tell the House what role she sees for employers in inspiring young people in careers? I declare an interest as an employer.
Baroness Stowell of Beeston
Employers should play a big part in inspiring young people and see that as an important part of their responsibility. That is why we have invested so much in creating opportunities for apprenticeships and how we want to see employers playing their part not just in providing those apprenticeships but in making sure that, in schools, students and pupils understand what is needed for them to be successful in the world of work.
Lord Aberdare (CB)
My Lords, I meet a lot of apprentices, hardly any of whom appear to have been directed towards their apprenticeship by their schools or careers adviser. How will the government strategy ensure that students, teachers and parents are more aware of vocational career opportunities, such as apprenticeships?
Baroness Stowell of Beeston
I hope very much that this is part of the responsibility of the Careers & Enterprise Company—and I am sure that it is—which we funded to inspire young people and help them to prepare for the world of work. But I accept and understand the point that the noble Lord makes about ensuring that families and young people understand the range of opportunities open to them. In my maiden speech in your Lordships’ House, I talked about how it is important and vital that people understand that there are a range of routes to success, and it is not just about going through to university—as important as that is, and as important as it is that we make that available to as wide a group of people as we can. For me personally, this is a mission that I feel very strongly about.
Lord Watson of Invergowrie
My Lords, I thank the noble Baroness the Leader of House and hope she will assume this role at some time in the future, given the clarity of the answers that we have had from her thus far. The Social Mobility Committee of your Lordships’ House said in April that the quality of vocational education in schools is sadly lacking and that not enough emphasis is placed on that. Its report made a recommendation to the effect that a new 14 to 19 transition stage should be established to delineate clearly between technical and academic lines. I understand that the noble Baroness will not be familiar with this but, when she has time, will she speak to the noble Lord, Lord Nash, and ask him whether he intends to accept that recommendation to demonstrate clearly to schoolchildren that post-school life involves much more than university?
Baroness Stowell of Beeston
On the noble Lord’s first point about vocational education, when the coalition Government in the previous Parliament were first elected we took significant steps to improve the quality of vocational education. It is something that we continue to give priority to, because it is important that vocational education has great status for it to be of value to people when they are in the world of work. I point out to the noble Lord that one of the new measures that have been introduced in the school regime in recent years is UTCs, which were championed by my noble friend Lord Baker as well as by the noble Lord, Lord Adonis. I feel strongly that all young people who are ambitious and want to get on should be clear in their teens that there are more routes to success than just through university. I hope very much that they feel very inspired to succeed through other routes because there are many people who have been able to go through a vocational route and have made it to places which they might not have thought they were able to get to when they started off in life.
NHS: Unsafe Hospital Discharges
(7 years, 10 months ago)
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Baroness Walmsley
To ask Her Majesty’s Government what action they are taking, in the light of the report of the Parliamentary and Health Service Ombudsman, to prevent unsafe discharges of frail and elderly people from hospital.
The Parliamentary Under-Secretary of State, Department of Health (Lord Prior of Brampton) (Con)
My Lords, unsafe discharge of frail elderly patients is unacceptable. Discharge can be very complex, and the integration of health and social care is vital for safe, joined-up care. We are using sustainability and transformation plans to promote integration, supported by the better care fund, creating a seven-day NHS and supporting local systems to develop integrated discharge systems and new models of care.
Baroness Walmsley (LD)
I thank the Minister for his reply, but is he aware that the ombudsman reports patients being discharged before they are clinically ready, without being assessed or consulted and without a care plan or their family being told that they are coming? Does he know why this is still happening 12 months after Healthwatch England’s report on the same issue? Does he agree that this not only puts an enormous financial burden on the NHS but is an appalling way to treat vulnerable people?
Lord Prior of Brampton
My Lords, there are millions of interactions between patients and consultants and doctors every day of the year, and there will be some mistakes. We cannot draw conclusions from one or two desperate situations. In so far as they reveal systemic problems, it is valid to draw attention to individual cases of this kind, and there are some systemic issues lying behind the PHSO’s report. In particular, it states:
“We are aware that structural and systemic barriers to effective discharge planning are long standing and cannot be fixed overnight … health and social care … have historically operated in silos”.
That is the issue on which we should be focusing.
Baroness Pitkeathley (Lab)
My Lords, I ask often in this House and elsewhere about co-operation between health and social care. Does the Minister agree that one thing we lack is a cohort of people, be they nurses or paid professional carers, who can work across health and social care in hospital and follow patients into the community? Will the Minister update the House on what is happening to encourage that kind of cohort?
Lord Prior of Brampton
The noble Baroness is right. Most well-run hospitals will have integrated discharge teams comprising people who work in the community, social care workers and people who work in the hospital. However, the fact is that over the last 20 years, with the benefit of hindsight, too much resource has gone into acute hospitals and not enough into primary care and community care. You cannot wish into being lots of district nurses overnight. There are some parts of the country—I will pick on Northumbria and Salford, for example—where serious integration is now going on, with hospitals also managing adult social care, GPs and community care.
Baroness Butler-Sloss (CB)
May I pick the Minister up on one point? He said that there were one or two examples, but my understanding is that this is right across the country.
Lord Prior of Brampton
The noble and learned Baroness is right, up to a point. I said one or two because the PSHO report focuses on nine individual cases. In so far as they are representative of behaviour across the country, they are important, but I want to put on record that the vast majority of hospitals the vast majority of the time are getting their discharge procedures right and are doing an outstanding job.
Lord Hunt of Kings Heath (Lab)
My Lords, the Minister has readily identified the problem of unsafe discharges. Why is there no explicit reference to this issue in the NHS mandate to NHS England for 2016-17?
Lord Prior of Brampton
I cannot give the noble Lord a reason off the cuff. It is very much a part of the better care fund. There is a CQUIN for 2016-17 that is focused on delayed discharges. One of the fundamental purposes underlying the STPs and the vanguards, which are a critical part of taking the Five Year Forward View into a serious plan, is to reduce delayed discharges and improve the relationship between acute care and social care.
Lord Rennard (LD)
My Lords, given that those nine cases were considered to be representative of the problem, does the Minister agree that it might be cost-effective to make greater use of voluntary sector organisations such as Age UK in better preparing people who are frail, elderly and on their own for going into hospital, and then looking after them when they are leaving, to avoid unnecessary, expensive and painful readmissions to hospital?
Lord Prior of Brampton
The third and voluntary sectors have a potentially huge role to play. I was talking this week to the chairman of the Chelsea and Westminster Hospital about the plans he had for involving the voluntary sector far more in discharge planning, particularly for frail and elderly people. I agree entirely with the noble Lord’s sentiments.
Baroness Wall of New Barnet (Lab)
My Lords, the Minister has referred to the STP, the sustainable transformation plan. Could he accelerate the way in which that plan is now going? We are into phase one, and some of the shocking things in the report that the noble Baroness, Lady Walmsley, has referred to could be remedied by using the STP properly. I wonder if we should look further and quicker at how we can achieve that.
Lord Prior of Brampton
My Lords, this is a difficult issue. You can lead a horse to water but you cannot make it drink. To some extent you have to rely on local people working together, and it is behaviour and culture that determine long-term sustainable improvement. If we try to force the pace beyond that at which local people are prepared to go, in the long run we may not make as much progress. In the first instance we hope that the STP process, involving all local people and giving them a framework for working together, will deliver the results we need. If it does not, we will have to revisit it.
Baroness Watkins of Tavistock (CB)
My Lords, could the Minister ask why the NHS has not considered funding nursing home places for people who are ready to be discharged for two or three weeks, so that they can have 24-hour care funded by the NHS while they prepare to move back home? People who live alone, in particular, are just waiting for financial assessments while reducing other people’s access to acute hospital beds, including young people who are routinely having standard operations cancelled.
Lord Prior of Brampton
My Lords, looking back over 20 years, the reduction in the number of what you might call step-down facilities—community hospitals and the like—has been a huge mistake. We lack step-down facilities. In America they are called skilled nursing units. The fact is that an acute hospital is not a good place to be for anyone once they are medically fit to be discharged; all the evidence suggests that it is more expensive but, more importantly, less good for the patient. I agree entirely with the noble Baroness that we need to explore avenues of discharging people earlier to nursing homes, community hospitals or, better still, back home with the right community support.
Electoral Status: Online Access
(7 years, 10 months ago)
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Lord Rennard
To ask Her Majesty’s Government, in the light of the recent technical difficulties regarding online applications to register to vote, what plans they have to enable all eligible electors to check their electoral status electronically.
The Parliamentary Secretary, Cabinet Office (Lord Bridges of Headley) (Con)
My Lords, we are conducting an investigation into what went wrong with the website last week. In the light of the findings, we will carefully consider the potential benefits of an online registration checking tool, but there may be other, possibly better, answers, such as filtering out duplicates with electoral management software, to consider as well.
Lord Rennard (LD)
My Lords, after the 2015 general election the Electoral Commission reported that there should be a system whereby people can check online whether they are already registered. Will the Government endeavour to make sure that such a system is in place by the May 2017 elections? In the meantime, will greater efforts be made to ensure that young people who are perhaps still at school are registered in the same way across Great Britain as they are in Northern Ireland, and that students are registered as part of the enrolment process at university, as successfully piloted in places such as Sheffield this year?
Lord Bridges of Headley
The noble Lord makes some very good points. My answer is yes to the second two regarding encouraging enrolment. As regards the first, I would like to wait for the findings of the investigation before I commit to a timeframe. Clearly, however, there is a need to look at the issue of duplicates, as raised by the Electoral Commission and as the Government have made clear on many occasions. I thank the noble Lord for his constructive comments to me privately about this.
Baroness Deech (CB)
My Lords, will the Minister spare a thought for the approximately 16% of the population who have no access to the internet, many of whom are probably elderly and not so well off, and people who have conditions that prevent them using it? For the next few years, foreseeably, there needs to be parallel provision.
Lord Bridges of Headley
The noble Baroness makes an extremely good point and it is one that I have raised with officials. Electoral registration officers are able to accept applications in person or on the phone, and Electoral Commission guidance encourages them to offer this service to those unable to make an online or paper application for any reason in order to meet their equalities obligations. As I said, the noble Baroness makes an extremely good point and it is one that I am convinced the Electoral Commission will heed.
Lord Kennedy of Southwark (Lab)
My Lords, I refer noble Lords to my declaration of interests: I am an elected councillor for the London Borough of Lewisham. What plans do the Government have to ask organisations such as the Post Office, the Department for Work and Pensions, the DVLA and HM Passport Office to help people to get on to the electoral register by asking the people they come into contact with whether they are registered to vote and pointing out the benefits, such as an improved credit rating, with information on their forms and a link to the site to register to vote?
Lord Bridges of Headley
The noble Lord makes a good, practical point. I have had conversations with other agencies across government about precisely that, and we are actively considering how we can use the regular communications that government undertakes with individuals. However, I am told that, where this has been piloted in the past, there has been a problem with mixed messages—in other words, a call to action to do one thing can be confused with a call to action to do another. But the noble Lord is absolutely right and it is a matter that I continue to look at.
Lord Cormack (Con)
My Lords, I return yet again to the subject of compulsory registration. There are penalties for not registering. What conceivable logic is there in not having compulsory registration? It is not the same as compulsory voting, even though some of us might think that there is merit in that. Can we please look at this again?
Lord Bridges of Headley
I am sure that we will continue to discuss and debate this matter, but the Government believe that active engagement on registering to vote is preferable. The success of the new individual electoral registration system shows that it is making it easier to register to vote. Between the unfortunate downtime at 10 pm last Tuesday and the close of the registration period on Thursday night, for example, there were more than 453,000 applications.
Lord Grocott (Lab)
My Lords, it is of course welcome that substantially increased numbers of people have registered to vote in recent weeks, but does that not have clear implications for the work of the parliamentary Boundary Commission? It is due to report in September but is now likely to report on the basis of substantially out-of-date electoral registration figures. If the Government can bring in emergency legislation to extend the period during which people can register, surely they must commit themselves—I ask the Minister to do this—to ensuring that any redrawing of constituency boundaries by the Boundary Commission is based on a totally up-to-date electoral register.
Lord Bridges of Headley
I am sorry to disappoint your Lordships, but I am not going to commit the Government to that. Without the implementation of these boundary reforms, MPs would, by 2020, end up representing constituencies that are drawn up on data that are over 15 years old for all of the UK.
Lord Tyler (LD)
My Lords, will the Minister please take very seriously the issue raised by the noble Lord, Lord Cormack? There is a financial penalty, but it is not widely advertised. Would the Minister also accept our offer to work with him—he has been very generous in saying that he wishes to work on a cross-party basis—to examine the lessons of the last few weeks? This is a matter that concerns all Members of your Lordships’ House, and indeed the other place. In so doing, can we look at the particular issue of the potential discrepancy that the Electoral Commission anticipates between the 1 December register and the register next Thursday?
Lord Bridges of Headley
I am more than happy to work with the noble Lord and others on the practical consequences of the problems that we faced last week with the website and the lessons that can be learned as regards duplicates. As for the issue of automatic registration, I am sorry, but I have made the position clear.
Lord Campbell-Savours (Lab)
How can the Minister ignore the question of my noble friend Lord Grocott? We have now perhaps as many as a million new people on the register arising out of what has happened with the referendum. Surely, people on those registers should now be taken into account in the setting of boundaries; otherwise, the boundaries will be false boundaries and not relevant. Is it not a fact that if the Government do not do this, they will be showing political bias?
Lord Bridges of Headley
I refute the final point that the noble Lord makes. Without defined data and a set of registers to assess, it is impossible to run a review. Registers for a boundary review are necessarily a snapshot. As regards the number of applications, it is the case that reviews have always been conducted like this. I say further that we need to wait for these registers to be compiled to see how many of those who have applied to register to vote are duplicates or not.
Carbon Emission Reductions Bill [HL]
EU Referendum and EU Reform (EUC Report)
(7 years, 10 months ago)
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Lord Boswell of Aynho
That this House takes note of the Report from the European Union Committee The EU referendum and EU reform (9th Report, Session 2015–16, HL Paper 122).
Lord Boswell of Aynho (Non-Afl)
My Lords, alongside The EU referendum and EU reform report, the House will also be debating my committee’s report, The Process of Withdrawing from the European Union, and the report from the Science and Technology Committee on EU Membership and UK Science, to which the noble Earl, Lord Selborne, will speak. Our committees have a history of harmonious collaboration on European matters, and I had the privilege, a generation ago, of serving on a research council under the noble Earl’s chairmanship. I look forward to his contribution with anticipation. I record on behalf of the committee our thanks to its impeccable staff and to all our many correspondents and contributors.
I am delighted that we have the opportunity to debate these reports before 23 June—referendum day. The process that has led up to that momentous decision has, of course, been a continuing preoccupation of the EU Committee. At the end of the previous Parliament, we reported on the coalition Government’s balance of competences review, highlighting in particular the Government’s failure to provide an overarching summary of their findings; a summary that might have driven, or at least influenced, proposals for EU reform. Then, last July, we published a short report warning the incoming Government of the need to approach their negotiations inclusively, and in particular to have regard to the importance of parliamentary scrutiny. The problems we explored in these two reports were never fully tackled and have played into the end game on which we now report.
Before I delve further, I should emphasise, or re-emphasise, our committee’s settled view that it is not for us to take a view on whether the UK should remain in or leave the EU. That critical decision is for the British people next week. Our remit is to scrutinise Her Majesty’s Government and to interrogate the approach which—in distinction from that of the political campaigners on both sides of the campaign—they are adopting in presenting their official case for remaining in the EU.
That is the basis for our current report on EU reform in which we analyse the process whereby the Government decided on their four negotiating “baskets” of sovereignty, fairness for the eurozone’s ins and outs, migration and competitiveness. These negotiating objectives were not confirmed for several months following the publication of our report in July 2015. Perhaps it was only pressure from Europe that crystallised them in the form of a letter from the Prime Minister to President Tusk last November.
Chapters 2 and 3 of our report dissect the rather opaque process that led to the publication of this letter. It is history now, and I shall not dwell further on it. It was the so-called “new settlement for the United Kingdom”, agreed by the European Council last February, that in effect fired the starting gun for the referendum campaign. Chapter 4 of our report analyses in some detail this new settlement, in which the Government sought to achieve their reform objectives.
In broad terms, we found that some concrete progress had been made, reflecting perhaps a welcome degree of realism in the approach of all parties. The new settlement takes the form of an international law decision. Given the known difficulties of treaty change, and the explicit buy-in of all member states and the European institutions to this process, we accept this as a realistic and viable approach to delivering commitments to reform.
If the UK votes to remain, we will need to pursue further our detailed scrutiny of these provisions; if we opt to leave, the deal automatically falls away. The assurances received on the UK opt-out from the commitment in the treaty to ever closer union, whatever their intrinsic merits, appear to signal conclusively an end to any ratchet process leading towards greater centralisation. We concurred with the Foreign Secretary, who told us in evidence that we have “reached the high-water mark” and the intense involvement in our national life which,
“irritates so many people in this country, is a thing of the past”.
Under the same sovereignty heading, the new settlement also sets out an enhanced role for national parliaments by means of a so-called red card—that is, power for a 55% majority of national parliaments, acting collectively, to stop an unwelcome proposal. We have no objection in principle to this, but I remind noble Lords that my committee has also consistently argued for what I have called a “forward gear”, involving positive upstream engagement with European policymaking, whether it is better regulation, simplification of laws or more widely. Hence, in conjunction with a number of other national parliament chambers, we as a committee pioneered last year the first European green card on food waste.
On the crucial but legally and technically complex issue of fairness between eurozone and non-euro states, we see the terms of the new settlement as providing welcome clarity and assurance that the interests of both groups will be safeguarded. We are also not alone among member states in wanting a more competitive Europe, and we have the European Commission as allies in this. We welcome the agreement to press for better regulation, including an annual progress report, and the intention to reduce administrative burdens, particularly on SMEs, as well as to press forward an active and ambitious trade policy. We have of course heard similar aspirations in the past and we shall have to hold the European institutions to account for them.
The final main “basket” of the negotiations relates to migration, or free movement. Self-evidently, this is the one with the greatest political salience. The analysis in the report speaks for itself, and, in light of more recent controversy, I do not intend to rehearse it now.
I turn to our short report on the process of withdrawing from the EU. This was based primarily on evidence provided by two experienced and expert lawyers, Sir David Edward and Derek Wyatt QC, supplemented by our excellent internal committee legal advisers. The report is largely self-explanatory, but if I may summarise, our key finding is that Article 50 of the Lisbon treaty provides the only means of withdrawal consistent with EU and international law. Withdrawal is final only once a withdrawal agreement enters into force, so a member state that had given a notification under Article 50 would be legally empowered to reverse that decision before this stage.
Lord Lawson of Blaby (Con)
I was slightly puzzled when the noble Lord said that Article 50 was the only means. Is he saying that the 1975 referendum, when the Lisbon treaty and Article 50 did not exist, was a complete fraud because we could not have left anyway?
Lord Boswell of Aynho
My Lords, provisions in the Vienna convention on treaties would enable a member state to withdraw from any international obligation by consent of the parties involved. As the noble Lord rightly said, the Lisbon treaty followed long after the 1975 referendum, in which we probably both participated. In order to be consistent with European and international law—which, of course, are obligations for Ministers as well—the treaty confines any action to the terms of Article 50, under which it would have to be carried out. I hope that that is helpful to the House.
Notwithstanding this legal argument, which I have some diffidence in opining, it has not escaped us that there would of course be political consequences on both sides of the argument in doing so. On the practicalities, the process of negotiating withdrawal would be complex, involving, among others, vital issues of trade policy and complex issues of rights acquired by individuals, as well as the need to review our existing body of law. It can be done, but it will take time—probably several years—to complete.
Lord Spicer (Con)
On Article 50, surely force majeure will come into play. Is it realistic to suggest that a nation state could be forbidden from leaving the European Union if it wished to do so?
Lord Boswell of Aynho
My Lords, the question is not whether a nation state would be inhibited from doing so, because the Lisbon treaty specifically empowers and provides a process for it. The question for the noble Lord and this House as a House of law and proper procedure is how we may meet our international obligations if the nation decides to initiate that process—no more, no less.
I am conscious—although it is beginning to seem that the note I had marked may be a little obsolete in the circumstances—that I have yet to address the more overtly “political” issues which loom large in all our minds as we approach the referendum. Reverting to our report on EU reform, perhaps the key question is: what happened to the new settlement? A little like the dog that did not bark in the night, its almost complete absence from the current debate on EU membership is telling. This was the agreement on which, we were told, the Government’s support for EU membership depended, yet it has had almost no influence at all on the referendum campaign.
This takes us back to our starting point: the Government’s failure initially to provide an overarching assessment of the findings of the balance of competences review; the failure to offer a considered, evidence-based diagnosis of what, if anything, is wrong with the EU; and what the real costs and benefits are to the UK, so that we can understand what needs to be fixed for the UK to remain a member. If the British people need anything over the next eight days, it is real, objective evidence, on the basis of which they can make an informed decision.
This brings me to my final point. As a committee, we have tried our best to fulfil our duty in tackling complex technical issues around the process leading to the referendum, and we have done that in our traditionally non-partisan style. Yet we also stressed that the Government’s case for EU membership needed to be an inclusive one, crossing party-political lines and speaking to all the peoples of the United Kingdom. We suggested that it needed to be based on a positive vision of the UK’s role within a reformed EU, and we warned that a campaign based on narrow national economic self-interest, alongside mere fear of the alternatives to membership, might be insufficient. Noble Lords may wish to reflect on whether our plea has been listened to, or whether our warning has become a reality.
The decision in eight days’ time will be as much of the heart as of the head. If the Government are to persuade the people to endorse their recommendation to remain in the EU, they need to focus on facts, but also appeal to the feelings and ideals of the voting public. It is not too late, but in that somewhat sober context, I beg to move.
The Earl of Selborne (Con)
My Lords, it is a great privilege to follow the noble Lord, Lord Boswell. It is most appropriate that the report of the Science and Technology Committee on EU membership and UK science should be debated with these two reports from the European Committee. I thank our specialist adviser, Professor Graeme Reid, our clerk, Chris Clarke, and our policy analyst, Dr Cat Ball, for their contributions to this report. As I am introducing the third Motion of this debate, I understand that I might be allowed a little longer than the advisory time of six minutes.
Once the date of the referendum on the United Kingdom’s continued membership of the European Union had been announced, the committee decided that it would be important to conduct an inquiry to help understand the wide-ranging influences, for better or worse, that the EU has on UK science and research. Science is, after all, a major component of the UK’s membership of the European Union, with nearly one-fifth of EU funding to the UK spent on research and development. Our inquiry aimed to understand and characterise the principal linkages between EU membership and UK science, and this proved rather more complicated than expected. In order to inform our investigations, we sought a diagrammatic representation of the main ways that the EU supports science and research. We could not find such a diagram so we have attempted, in figure 2 on page 28 of our report, to draw up such a representation ourselves.
The EU supports science and research through five main mechanisms: namely, the Horizon 2020 programme, formerly the series of framework programmes 1 to 7; the European structural and investment funds; sectoral research and development programmes; other connected programmes; and, lastly, partnerships. I will refer just to the Horizon 2020 programme and the structural and investment funds for reasons of time.
Horizon 2020 is the EU’s flagship programme for science and innovation. It replaces the seven successive framework programmes and will run from 2014 to 2020, with a budget of €74.8 billion. Funding is mostly allocated competitively through calls for proposals to which researchers and organisations can apply. However, criteria for allocating funds vary and also include scientific excellence, alignment with a number of strategic objectives, geographical and disciplinary diversity and potential for commercialisation.
The exception to this is the European Research Council funding, as its funds are awarded solely on the basis of scientific excellence. Its grants have neither thematic priorities nor geographical quotas. The United Kingdom is the top performer across member states in terms of securing European Research Council funding. This reflects the quality of UK science. We heard from universities that this funding is equivalent to having another research council. Framework programme 7, which ran from 2007 to 2013, provided 3% of the total UK expenditure on research and development. The evidence we received from national academies, professional bodies, universities and research institutes was overwhelmingly enthusiastic for EU membership.
The university sector was our largest recipient of the framework programme 7 funds. However, it is not the university sector which undertakes the majority of research and development in this country. Sixty-four per cent of UK research and development is conducted by business, yet businesses attracted just 18% of the total funds awarded to the United Kingdom through framework programme 7. Participation of UK businesses in framework programme 7 was below that of Germany and France. Indeed, it was below the EU average. However, this low participation was not uniform across the spectrum of United Kingdom businesses. Small and medium-sized enterprises attracted more funding than French SMEs and a similar amount to German SMEs. It appears that it is large businesses that are particularly underrepresented in the United Kingdom’s EU-funded research and innovation portfolio.
We formed the conclusion that while it was clearly for businesses to decide for themselves whether they wish to engage in EU funding schemes, there is a need for the United Kingdom Government to assess whether their support for businesses which seek to engage in EU funding schemes is as effective as that of other member states. In this respect, the support formerly provided by regional development agencies might have deteriorated with the absence of local enterprise partnerships.
The purposes of the competitive framework programme funds and structural funds for research and innovation are different. By designating a portion of structural funds for research and innovation, the European Commission aims to boost scientific capacity across member states and increase the success rate from regions with weaker economies. It is not surprising, therefore, that the UK does not benefit greatly from structural funds for research. However, we were concerned by the apparent lack of evidence as to whether this spending has actually raised the scientific competitiveness of recipients, and we suggest that the evidence should be assembled by the European Commission.
It was repeatedly put to us that one of the most significant aspects of the UK’s EU membership is provision of opportunities to collaborate. A number of EU schemes enable researcher and student mobility across Europe, including the Marie Sklodowska-Curie actions and the Erasmus+ schemes. Many would maintain that the provision of collaborative opportunities is perhaps the most significant benefit that EU membership affords science and research in the United Kingdom. These collaborative opportunities are not just between member states but can extend to non-EU and non-European countries.
Although witnesses highlighted several grievances with the EU regulatory environment, the majority of evidence suggested that the regulatory harmonisation brought about by the EU was of benefit to the UK. Such harmonisation can provide a strong platform for collaboration and commercialisation in science and research. The increasingly global nature of science and business means that international harmonisation is becoming ever more relevant. However, those EU regulations highlighted to us as inappropriate or defective included: the protection of animals used for scientific purposes directive, the protection of personal data directive, the deliberate release of genetically modified organisms directive, and the clinical trials directive. On the latter directive, a new clinical trials directive has now been developed and is expected to come into effect in 2017. The Academy of Medical Sciences stated that the United Kingdom health and research community has played an important role in influencing the improvement of this regulation.
We found that the UK plays a leading and valued role in the development of EU policies and decision-making processes that relate to science and research. UK scientists in various European Union committees and organisations act to ensure that the UK’s voice is clearly heard and that the EU remains aligned with the advancement of UK science. The long-term prosperity of this country will be highly dependent on attracting inward investment into the new technologies that will provide jobs in the next decades. All scientific collaboration, whether with our European neighbours or elsewhere around the world, must be fostered, and the European Union should be credited for having advanced this cause.
Lord Liddle (Lab)
My Lords, I declare an interest as a member of the EU Select Committee and say what a pleasure it is to serve on that committee under the wise chairmanship of the noble Lord, Lord Boswell. I should like to address my remarks to the shorter of our reports, which attempts to answer the question: a vote to leave is a vote to leave, but what happens then? I will express some personal views on this subject. The leave campaign tells us that it is all very simple, and it has launched something today to that effect. Parliament would legislate to do such things as end the jurisdiction of the European Court of Justice over the UK, end the free movement rights of European citizens, stop EU budget contributions and so on, and we would negotiate a free trade deal with our EU partners by 2020.
With respect, the campaigners have obviously not taken the trouble to read your Lordships’ report. Their plans would pitch Britain into a limbo, a state of ill-defined economic and legal uncertainty that would be the most serious self-inflicted damage to the UK economy since the three-day week, which I remember being imposed in December 1973. This economic and legal uncertainty runs a very significant risk of weakening private investment, particularly overseas investment, including overseas purchasing of UK assets, over the next few years. We have needed that overseas investment to continue funding our very substantial trade deficit, which has been in place for a generation. That would be put at risk. It would create an environment in which firms that are able to move their activities to the legal certainties of the single market would do so because otherwise their boards would be failing in their duty to their shareholders to minimise risk. The logic of a Brexit is that any British-based company whose business is mainly with the European single market would, in the event of a leave vote, substantially reduce its risks by relocating its activities within that market. That is what I believe companies will do.
Why do I talk about limbo rather than a quick and clean exit? In my judgment, this would be a painful and protracted state of limbo before—I am not sure I have the theology right—we reach the permanent purgatory of Brexit. It is clear to me how our EU partners would react to a leave vote and the Brexiteers’ plans. They do not want us to leave the EU and there will be a lot of real sadness at our parting, but I do not think there will be any special favours for Britain. Their granting Britain special favours would only encourage the populist forces in their own countries. Like our Brexiteers, they are wrongly and unscrupulously seeking to blame the European Union for difficulties in European societies, in the rest of Europe as well as in Britain, in finding an adequate economic and social response to the structural tensions and injustices of globalisation. That, essentially, is the problem.
Instead, the EU will decide that it will negotiate with Britain in a civilised way, but only within the terms of the treaties that we have signed and that this sovereign Parliament has agreed. The EU would say that Article 50 provides the path and that it will not talk to us unless we follow it. The EU 27 would instruct the Commission to draw up a negotiating mandate for British withdrawal that the European Council must then endorse, without of course Britain being present.
This mandate will make clear that there can be no continued access for Britain to the single market unless we meet existing obligations on free movement and contributions to the EU budget. On this point, the EU will never yield. I expect this mandate to be agreed relatively quickly later in 2016, but there will then be a pause for the French and German elections, so we will not get around to anything serious until the end of next year. After that I anticipate a lengthy stand-off, with a new British Government under a new Prime Minister, and probably after a general election in which the Brexiteers will have sought a mandate to pursue their demands.
However, the Brexiteers are fundamentally divided and inconsistent on one central point, which is their attitude to the single market. On one hand, they say that Britain will no longer be part of the single market and will be free to take back control. On the other, they say that a free-trade agreement will be dead easy to negotiate because we currently meet the regulatory requirements of the single market. Under their plan, they say that they will not accept free movement and contributions to the budget.
As for the regulatory obligations, they use these at one point to argue that we could easily have a free-trade agreement, while also saying that they want to scrap all these regulations because they think it will mean a huge boost to British enterprise. The truth is that the proposition that a free-trade deal will be easy to negotiate depends on an essential fallacy: that we will stick to the single-market rules that the Brexiteers have no intention of sticking to.
Is their aim a better deal, on the Norway model, or is it for Britain to pursue a wholly different economic course? They cannot agree among themselves and it is unlikely that they will get a majority in either House of Parliament for a credible leave option. Vote leave has no practical alternative to British membership of the EU. As Nye Bevan memorably said of unilateral nuclear disarmament, it is an emotional spasm. We should brace ourselves for a long period of limbo that could do incalculable damage to the British economy and Britain’s working people. I pray that it will not happen.
Baroness Falkner of Margravine (LD)
My Lords, I should declare that I am a co-owner of a property in the eurozone area and that I am married to a citizen from another EU member country whose right to remain in the UK could theoretically be affected by Britain leaving the European Union.
It has been a pleasure to work under the chairmanship of the noble Lord, Lord Boswell, and the committee has been extremely well served by its chairman and its secretariat through the inquiries and its scrutiny work. For my part, as chairman of the sub-committee responsible for economic and financial affairs, I will confine my remarks to those areas where additional safeguards have been obtained in economic governance.
I turn to the new settlement for the UK. It is an extraordinary settlement when viewed from other EU capitals. One has only to talk to the delegations from the 27 other countries to see how special this new status the UK has secured is in their eyes. We are not in the eurozone or in Schengen. We have chosen our opt-outs in justice and home affairs and we now have safeguards on the impact of eurozone integration, on welfare, on sovereignty and on further integration. The other EU countries are rather envious that we can dine à la carte while they are stuck with the set menu.
This renegotiation has also been dismissed for lacking legal force, as our chairman pointed out. In the committee’s view, the terms of the new settlement have the same legal force as any other intergovernmental treaty under international law, so those who rubbish the legal status of the renegotiation need to explain to the public why any other treaty has legal force if they believe that this one does not. Why should the public believe that our international obligations under the UN charter hold, or indeed under the WTO, in which the Brexiteers have such faith as the basis of a new trading relationship—oblivious, of course, to the fact that the WTO does not cover services or financial services trade? That is such an important and vital aspect of the UK’s relationship with the EU and the rest of the world. So the question they need to answer is why their new trade deal would have any legal basis if this renegotiation does not. Moreover, the renegotiation specifically states at Article 7 of the section on economic governance that the provisions under Section A will be incorporated into EU law the next time treaty change takes place.
On the details of economic governance, the UK and my committee had concerns that eurozone integration would disadvantage sterling. In Section A of the new settlement the UK has ensured that there can be no discrimination against those who do not use the euro and that our interests are protected. There was concern that eurozone caucusing might leave us outside the room, so to speak, when decisions are taken by the eurogroup. That, too, has been addressed and we have secured safeguards not only for ourselves but for the other eight countries currently outside the eurozone. We also have the additional safeguard mechanism whereby, if we feel that Section A has not being upheld, we can escalate our concern to the European Council, which, if our argument has merit, is required to,
“do all in its power to reach … a satisfactory solution”,
within a “reasonable time”.
I have been bemused by Vote Leave’s obsession with the Five Presidents’ Report. This, for the uninitiated in the Chamber, is a paper published last year by the leaders of the five EU institutions. The sub-committee I chair has conducted an inquiry into this and we published our report only last month. We say, in terms, that the ambitions of the five presidents apply mainly to the eurozone. Where they do not, such as recommending national competitiveness boards, they are voluntary. The Five Presidents’ Report is actually notable for saying so little. We commented on that in our report. We criticised it on the institutional direction and political structures needed for the eurozone to proceed to be successful. It is a very thin statement of good intentions. The conspiracy theorists in Vote Leave need to be pressed as to where they find all that they claim indicates the direction of European monetary integration—it is pure fiction.
I turn to the process of withdrawal, as the framework proposed by Vote Leave today sets out, and on which the noble Lord, Lord Liddle, has commented. We are led to believe from what one is tempted to call the presumptive Government—pace the Republican nominee; both have rather similar traits—that they will not need to use Article 50. Presumably they will take their time until 2020 to finalise the exit, including their new trade deal.
As noble Lords have heard, the legal experts consulted by the committee told us that Article 50 provided the only means of withdrawing that was consistent with the UK’s obligations under international law. If the UK unilaterally decided to start putting Bills through Parliament to disentangle ourselves—and, of course, this assumes that Parliament would be prepared to break its own treaty obligations in a very significant way, demonstrating to the world that it does not live by its word—the same UK, assuming Parliament were prepared to do this, would then seek to sign a whole lot of other treaties with the rest of the world, including the 27 other EU states, having spectacularly broken its word. What a non-display of bona fides this would represent.
So those who seek to disregard law while they sit in a law-making body need to bear one thought in mind. Trust is at such a low ebb in British political life, but the British public still expect their country to uphold the rule of law. That is the foundation of our democracy. This is a nation that values integrity, and if it finds that it has sleepwalked into a self-made disaster it will be a very long time indeed before it will permit itself to be led in that way again by that group of individuals.
Lord Jay of Ewelme (CB)
My Lords, I speak as a member of the EU Committee and draw attention to my interests in the register.
My own view is that remaining in the European Union and playing a full and constructive role in its policy and development at a crucial time for Europe is firmly in the United Kingdom’s economic and political interest, all the more so after the Prime Minister’s renegotiations. As the noble Lord, Lord Boswell, said, that is seldom mentioned now by either side, but the measures to protect the single market of 28 against a more closely integrating eurozone, in particular, seems to me of great importance, not just for us but for other non-eurozone members, notably Denmark and Sweden.
The report on the process of leaving the European Union makes clear that it would be uncertain and lengthy. In the immediate aftermath of a no vote, I suspect that not a great deal would happen, although the Prime Minister’s renegotiations would immediately fall. I leave aside any effect on the currency markets, or any effect on the domestic political scene, which I think is not for a Cross-Bencher to comment on, but looking further ahead I cannot see how, in order to respect our international legal obligations, we can do other than invoke Article 50 of the Lisbon treaty, leading to fraught and difficult negotiations with our 27 EU partners. Even if we did not invoke Article 50, it seems to me that we would still have to have the difficult, fraught and lengthy negotiations. I think that that is an important point.
As our report says, there would need to be two separate negotiations. What would be our relationship to the European Union? Would we be in the single market or not? What would be the implications for EU citizens in Britain and British citizens in the European Union? There would need to be a second negotiation on the process and timing of leaving. The articulation of those two negotiations is unclear, but it is clear that the outcome of those negotiations will be immensely important for the United Kingdom.
Those will be immensely important, too, for the rest of the European Union, but the context there will be entirely different. There will be a powerful desire to ensure that British exit does not stoke demands for other countries to exit or to seek a new relationship with the European Union. There will be other questions, too. What will be the relationship between France and Germany? What will be their relationship with the United States? And so on. We would not be immune from some of those concerns ourselves. We are already seeing the French start contingency plans for enticing London-based banks and bankers to Paris—I am sure Frankfurt will follow.
At the same time, the European Union will need to continue to confront the huge challenges that it now faces: terrorism, migration, and the need for closer integration within the eurozone. Dealing with those issues will not be made any easier by the need to hold complex and difficult talks with the United Kingdom—indeed, quite the contrary. The idea that these negotiations will somehow be straightforward and constructive, and that it will be in the European Union’s interests to give us more or less whatever we decide to ask for, seems implausible to say the least.
We will not just be negotiating with a bloc or with the Commission; we will effectively be dealing with 27 member states with 27 sets of vested interests, which they will want to see reflected in the negotiating mandate that is given to the Commission to negotiate with us. The German Finance Minister is upping the ante already by saying that membership of the single market will not be on offer to us after a vote to leave. I was in Paris when the French tried to prolong the ban on British beef following the BSE affair, after the Commission had declared it safe. With the Commission’s support, we saw them off. I mention in passing that British beef is not accepted into the United States. The chances that the French and other member states will not seek to further their own interests during their negotiations with us seems to me to be exactly zero.
Here is the irony: a vote to leave the European Union will lead to two, five, or up to 10 years of fraught negotiations with the other 27—us against them, with the Commission on their side—which will make the present relationship with the European Union look like sweetness and light. The tougher the negotiations—and they will be tough—and the greater the dissension and the greater the uncertainty, the greater will be the disincentive to invest in this country and the greater will be the consequences for jobs.
All this leaves aside the consequences of Brexit for the cohesion of the United Kingdom and, in some ways most worrying of all, the implications for the external border of the European Union running between Northern Ireland and the Republic, on which my noble friend Lady O’Neill spoke eloquently in the debate on the Queen’s Speech. My guess is that it would not be long after a vote to leave before there was an agonising cry of “How on earth did we get ourselves into this mess?”. It is my earnest hope that we do not take that risk.
Lord Pearson of Rannoch (UKIP)
My Lords, I cannot help mentioning that, of the 34 speakers in this debate, I can see perhaps only two who think that we should leave the European Union. I remind your Lordships, and anyone who may read this debate—and indeed the one that follows, where I cannot see a single Brexiteer on the Order Paper—that your Lordships’ House is a very Europhile place, well-stocked with former government Ministers, Members of Parliament and servants of the EU, who between them have been responsible over long, and what they no doubt regard as successful, lives for bringing this country to its present state of subservience to the corrupt octopus in Brussels. It must be disappointing for them to see so much ingratitude and anger boiling up among the British people against the project in which they have invested so much and in which they so fervently believe.
That is why, during this referendum campaign, we have seen Project Octopus turning into Project Fear—we are told to be fearful of leaving the clutch of its tentacles. This morning we have Project Panic as the Chancellor threatens us with all manner of taxes and pestilence if, as the world’s fifth-largest economy, we dare to take our own place outside the failing project of European integration and simply join the 160 other countries in the world that have not made the mistake of joining it.
At the heart of this threat of economic disaster if we vote to leave next Thursday lies a wholly improbable scare: that somehow we would lose our present free trade with the single market and have to pay job-destroying tariffs to export into it. I propose to spend the rest of these few minutes examining that central fallacy in the remain position.
Government figures suggest that around 10% of our GDP goes in trade with clients in the EU—supporting some 3 million British jobs; another 10% goes to the rest of the world; and 80% stays in our domestic economy. But EU overregulation strangles all 100% of our economy, so 90% of it would be set free from Brussels overkill if we leave the EU. Of course, we would have to meet single market requirements for the 10% that we export to it, just as we do for what we export to the foreign markets outside the EU.
Lord Hannay of Chiswick (CB)
The noble Lord says that EU regulation strangles our economy. Can he explain why the OECD found that we were the second-least regulated economy in the OECD—that is, we were less regulated than its non-EU members—and that the only country less regulated than us was another EU member, the Netherlands? Perhaps he could give a little thought to that before he makes foolish remarks such as the ones he has just made.
Lord Pearson of Rannoch
My Lords, I do not see that anything the noble Lord has said alters what I said. The Dutch Prime Minister recently went so far as to say that he thought a large proportion of the Dutch economy was afflicted by EU regulations. The noble Lord will simply have to wait until we are out of the European Union and then he will see how we set ourselves free.
As I was saying, we would go on exporting to the rest of the world as we do now. We would meet the conditions required by the rest of the world, just as it pays to put the steering wheel on the left if you are selling a car to the United States.
The Government’s ONS Pink Book reveals that our growing trade deficit with the single market reached £85 billion in 2015. This means that manufacturers in the EU sold us £85 billion-worth more in goods than we sell them. If we accept the Government’s suggestion that some 3 million jobs support the 10% of our GDP which exports to the single market, this means that there are around 5.5 million jobs in the EU which support exporting to us. So if the politicians in Brussels try to impose tariffs on our trade together, that would hit 2.5 million more jobs in the single market than it would here and would not be tolerated by EU manufacturers.
Let us take the specific example of our car trade, which the Prime Minister and other Europhiles pretend would suffer a 10% tariff on its exports to the single market if we leave the political construct of the EU, with consequent job losses here. That must be nonsense, because we import twice as many cars from the EU as we export to it—1.7 million cars in and 700,000 cars out—while EU manufacturers also enjoy having 64% of our domestic car market. So those powerful manufacturers, with their suppliers and employees, will simply not tolerate a tariff which would damage them so much more than us, however much Herr Juncker and Herr Schäuble and sundry other mischief in Brussels might wish to punish us for leaving the rest of the EU.
Baroness Armstrong of Hill Top (Lab)
I wonder if the noble Lord will reconsider what he has just said. Nissan in the north-east exported 800,000 cars in 2014, largely to the EU and all of them through EU agreements. It exports one in three of the cars exported from this country, so he has his numbers wrong somewhere. Nissan may well be thinking, given that its major owner is actually Renault, that if we in the UK are not in the EU, it might as well move to France.
Lord Pearson of Rannoch
My Lords, I do not, with all due respect to the noble Baroness, withdraw a word of what I said. The fact is that 1.7 million cars come into this country from EU manufacturers—they have 64% of our market. I was about to say that anyone who wants to read the detail of what I have just said should consult the globalbritain.org briefing notes, particularly Nos. 114 and 118, which give the detail which is supported by the Society of Motor Manufacturers and Traders.
Time moves on, but the noble Lord, Lord Lamont, made another good point in yesterday’s Daily Telegraph. The tariff which we might suffer on our goods going into the single market would be around 3%, if the Brussels politicians get their vindictive way, but the net £10 billion we pay to Brussels every year is equivalent to a tariff of around 8%. Whichever way you look at it, tariffs will not be imposed to our detriment, so the whole economic scare story falls away.
In conclusion, I am often asked what happens if we vote to leave the EU next Thursday. The answer is: nothing much in a hurry. For a start, it will take the Conservative Party until its conference in September to elect a new Prime Minister, who would start withdrawal talks, so there will be plenty of time for the Eurocrats—
Lord Lea of Crondall (Lab)
On the thought about nothing happening next Thursday if the vote was for Brexit, until recently we were told that the idea of economic effects was scaremongering. Does not the noble Lord observe that the pound has been falling, and would he say that nothing will happen to the pound in this scenario?
Lord Pearson of Rannoch
My Lords, a falling pound is not a disaster; it helps our exports, for instance. It has been falling, but not as fast as some other currencies. We will have to see what happens, but there is no disaster here: the pound goes up, the pound goes down. A far more important influence on trade is the interest rate and the exchange rate, so I really do not accept that point. The noble Lord is clutching at straws to make it look as though we will be in terrible trouble next Friday if we have voted to come out of the EU; we will not.
As I was just mentioning, the new Prime Minister will emerge next September and it is he who will start withdrawal talks, so there will be plenty of time for the Eurocrats and noble Lords to cool down and face the reality of the strength of our negotiating position. For instance, we do not have to trigger Article 50 immediately. We do not have to trigger it until we have pretty much agreed the terms of our departure. We have other strong cards to play in the meantime. For instance, we could offer to reduce our net £10 billion over a period of years. We could say that we will not impose tariffs on our trade together if they do not try to mess around with the City of London. We could withdraw from the supremacy of the Luxembourg court and take control of our borders in a way that causes them least inconvenience, and so on.
After all, we wish them well. We are not their enemies. We want to continue in friendly collaboration with them, but we want to get off their “Titanic” while we can.
Lord Howell of Guildford (Con)
My Lords, the noble Lord, Lord Pearson of Rannoch, has certainly raised the temperature of the debate. I would say on his behalf that he is a reminder in the calm Chamber and calm wisdom of your Lordships’ House that outside, the temperature on this issue is rising—certainly at the more excitable end of the media—to boiling point. It is also worth commenting that so far in this debate—indeed, in the very facts that the noble Lord, Lord Boswell, set before us—there is now an assumption that Brexit, or leave, is a possibility. Indeed, the report addressed itself to how that possibility would unfold.
I was not in the excellent and learned team of the noble Lord, Lord Boswell. He has produced a very interesting report, which makes one think a great deal about these different possibilities, although there is one omission from the report, which I shall come to in a moment. I am not really surprised that, outside this House, in the wider world, the stay campaign is now on something of a back foot. You would have to be completely deaf not to hear the dismay and grumbles from many people—I suspect the majority in this country—who feel that this is the wrong debate about the wrong issues altogether. They believe that the renegotiation, which was attempted but has been somewhat forgotten, as the noble Lord, Lord Boswell, reminded us, was on the wrong basis and assumptions.
On the generality, although the big markets of the future are most probably in Asia, Africa and the Commonwealth, geography and history nevertheless keep us firmly in Europe. Every attempt to stand on the sidelines or wash our hands of continental European development has always ended in disaster, as the Prime Minister pointed out. In Britain, we have always, in the end, been drawn in. So for us, the sidelines, as we should long ago have discovered and as we have discovered, just do not exist. Incidentally, we keep being told that countries such as Canada and Japan have a perfectly good access to the single market without being members of the European Union. I have looked in the history books and I cannot find any time when Canada or Japan were in Europe—we are, and that is the basic difference.
The referendum project and the negotiation project started from the right point. The first sentences of the Prime Minister’s Bloomberg speech of 23 January 2013 made it clear that the task was to be about the reform and future of the European Union to meet 21st century conditions, not just the reform of UK relations within it on a bilateral basis. But then something went wrong, and the debate lost its way. Experts crowded in to insist that all should be reduced to a sort of shopping list of British demands, and that was what the negotiations had to be about, and that the fundamentals—the pillar principles of EU architecture—should on no account be touched, because they were the ark of the covenant. So what should have been from the outset to be a European question—I believe the Prime Minister wanted it to be that way—became a British question, and an increasingly narrow one at that. For example, reputable think tanks such as the Centre for European Reform advised loudly that on no account should the Prime Minister even try to address or look at fundamental changes in the Union. Yet far from not touching on the fundamentals of the European model, it was always those basic features and principles that needed addressing and opening up. Why? Because the EU is a 20th century construct, rooted in and founded on 20th century concerns, which it addressed to great effect. But it is trying now to operate in a totally transformed world environment where big data and new platforms have completely revolutionised markets, business models and trade patterns, and are about to change much more—and, of course, where huge migrant flows have become a permanent feature, and will get much worse.
The digital and big data age invalidates all past precepts. There is simply no need for the doctrines of centralisation, integration and control in Europe; nor is this any longer the path to efficiency and innovation in our respective economies. With not only trade but actual production processes being globalised, the very concept of a single, tariff-protected goods market, as was designed in the 1970s, 1980s and 1990s, begins to melt away. Instead, the technologies cascading out from digitalisation permit and demand decentralisation, flexibility, differentiation and localisation. Those are the underpinnings of what should be the vision that the report has been looking at. The age of platform technology not only alters radically the relations between consumers and producers but places individuals—voters or the grass roots, call them what you like—in a completely different relationship to the governing authorities. The ground beneath the feet of the ruling caste who created the EU hierarchy is being visibly washed away. We should be aware of that and should not shut our eyes to it.
My one criticism of the report is that it does not come to grips with this vital aspect of what is happening as opposed to what we think, from our various standpoints, ought to happen. Common sense, when it is allowed into the debate, confirms that neither of the extreme campaigning poles—the leavers’ nirvana of pure sovereignty and control snatched back from some embryo superstate, along with a magical insulation from migrant flows, versus the remainers’ happy and overcomplacent idyll of staying in the EU in its present form—is remotely available in the real and changing world or will ever be. The centrifugal powers of the information age, the ever-stronger restraining interdependence of all modern states, the absolutely unavoidable need for massive and continuous reciprocity and the spaghetti bowl of new types of trade and supply chains across the planet, which are now mostly in data and information form, will put paid to both those dreams. Big changes are certainly coming, but not the ones that either camp predicts, and we should surely be warned about that.
Whatever happens on 23 June, the time has come to analyse coolly the very fast-changing international order of things and put deep and serious intellectual effort into redesigning and preparing the European region—our region, whether we like it or not—for the torrent of changes from the wider world and the storms to come. Some, like the migrant flood, have already arrived. The global repositioning of Britain should be a central part of this story. Our relations not just with a changing EU but with America and the whole gigantic Commonwealth need revisiting. They are all relevant to the renegotiation approach. Meanwhile, we are being asked to travel on a wrong and fruitless route with the possibility of some very nasty shocks along the way immediately ahead. A still, small voice should be reminding us that as a nation we are making fools of ourselves instead of offering the best of ourselves, which could be very good indeed, when confronting the real issues and threats.
The debate now should be a negotiation—if that is the right word—about how Britain can help lead the European Union out of the trough and the time warp in which it has become entrapped. On the morning of 24 June, whether in or out has won, we will still find ourselves enveloped of necessity in a common purpose: to help reform and equip the European region in which we live for its survival in a totally transformed international milieu. It will be a context in which, with skilled statesmanship, bridges can be rebuilt between the bitter antagonists in this debate. Why? Because in today’s hyperconnected world all the countries of Europe, including Britain, are functionally inseparable. That is the reality that has to be faced or, to put it in more homely terms, the egg that cannot be unscrambled, Brexit or no Brexit. The EU today, troubled though it may be, is our village and our neighbourhood, but it is not our destiny. We should remain good neighbours but lift our vision to much higher challenges ahead.
Baroness Smith of Newnham (LD)
My Lords, I welcome the suite of reports that came from your Lordships’ European Union Committee and, in particular, the fact that finally we have some documents contributing to the debate on the UK’s future in the European Union that are based on fact and evidence and, as The Process for Withdrawing from the European Union states, conclusions that are as far as possible neutral statements of fact. That has been very rare in the debate that we have seen in the country in recent weeks and months. We have seen fear, mendacity, hyperbole and hysteria on both sides of the argument, and that includes some of the actions of Her Majesty's Government; they cannot be exonerated either. We have heard from both sides arguments based on fear, myth and fantasy. But it may not surprise noble Lords, particularly the noble Lord, Lord Pearson of Rannoch, that I intend to focus particularly on the issue of what we might be withdrawing from and where we might be going to.
As the noble Lord, Lord Liddle, pointed out, there is an issue about why we are leaving and what the leavers think we are doing. First, though, I suggest that those who would have us leave, having already left the Chamber for today, have no agreed position on what it is they think they are leaving. If we are in the realms of fantasy and fairy stories, I thought I might give noble Lords a modern fairy story based on Goldilocks and the Three Bears. I suggest that at least three different visions of what the European Union currently is are being put forward by the leavers. The first, the Daddy Bear scenario, is that the EU is a dangerous place that has entrapped and ensnared us. As the noble Lord, Lord Forsyth of Drumlean, put it very graphically, we are caught in a bear trap, bleeding to death. One notes that this poor bear is looking at a £10 note, wondering how he got it when it used to be a £20 note, thanking God that it is not a euro note but still being extremely puzzled by how he ended up in an enterprise that he never thought he had agreed to be in.
Mummy Bear, meanwhile, is represented by my Cambridge colleague Dr Christopher Bickerton, who says that actually both sides of the debate have got it wrong and that the European Union is not overbearing, it is not a very strong edifice, it is not powerful and, although it is not particularly democratic, it is actually a mirage. The closer you get to Brussels, the more you see that the EU does not really exist. So Mummy Bear disappears as a mirage.
Meanwhile, Goldilocks goes and talks to Baby Bear, thinking, “Surely this third member of the family will have a better understanding of the European Union”. But she walks in and finds him with the godfather, Daniel Hannan, reading him a goodnight story: not Why Vote Leave but his elegant essay A Doomed Marriage: Britain and Europe—not necessarily something you would think was suitable for small bears or children, but nevertheless something that explains why the UK and the EU are fated to be separate and not to be together.
So we have three very different visions of what the European Union currently is, and the leavers cannot even agree on what it is they think they want to leave. Now they are trying to persuade us that we should vote to leave and negotiate some new arrangement. Of the three scenarios, the idea of a marriage breaking up is probably the best and most relevant. With regard to how we would get out of this European marriage, there is now a legal mechanism, thanks to Article 50, and your Lordships’ European Union Committee report makes it very clear how that would work legally. However, we do not have any practical experience of how this European divorce would work in practice because it would be the first time that Article 50 had ever been triggered. But one of the things that we know about divorce in the real world is that it is usually expensive and very often acrimonious. Even if a couple think they will be happier apart than together, it is very rare to have a divorce that does not include lawyers—who benefit probably more than anybody else—and that does not end up being costly. Then you leave behind the rest of the family.
The parallels with the United Kingdom leaving the European Union are surely clear. There is a legal process that is as yet untried, but the reality is one that is human, emotional and economic. The 27 other states that we are leaving behind, just like leaving members of a family, are not going to say, “That’s fine, off you go. We’re happy to see you go but we’ll carry on trading with you just like before”. Inevitably, those whom we leave behind will have a sense of hurt and betrayal, particularly given the amount of time that the other 27 states, plus the European Commission, spent on trying to create a deal that would work for the UK and keep us in the EU.
The leavers are not just saying, “Let’s have a divorce” but suggesting that they want another relationship altogether. Perhaps they want to go back to EFTA, which is what Daniel Hannan suggested recently—like a girlfriend they left behind years ago, trading her in for the European Economic Community because they thought that was the better offer. Like a long-term spouse, the EEC may have changed—but it is still your long-term spouse of over 40 years. Do you really want to give that up and walk away at considerable cost, trading it in for the mistress—the European Economic Area? Eventually you will find that being with a mistress is quite similar to being with a wife, except that your original family are a little unhappy, to say the least. They still have loyalty to the wife—the European Union. You have probably ended up with a slightly inferior relationship and have begun to wonder why you did it. Was it all worth taking the risk? I suggest not. The United Kingdom should not head towards an Article 50 type of divorce.
I hope that this will all turn out to have been just a fairy story, with Baby Bear waking up and finding that he has chased away the demons of Uncle Dan. I very much hope that citizens of the United Kingdom will do likewise on Thursday of next week; otherwise, they will only have bought into a cruel deceit and an unhelpful fantasy.
The Earl of Caithness (Con)
My Lords, I feel that I am rather in the position of Willie at the “Wet Review” as the person out of step. I am going to talk about the Motion on the Order Paper, but I shall at least be in step with the noble Lord, Lord Boswell.
It is strange to debate reports that your Lordships have produced—I was honoured to serve on the committee that produced the two reports under the chairmanship of the noble Lord, Lord Boswell—when we do not have a reply from the Government. However, that may be just as well, as we would not have had the debate if we had had to wait for the Government’s reply. First of all, I thank all those who helped us on the committee. I pay special tribute to the work of our clerks and our legal adviser, and I thank them for the help that they gave us.
I want to turn to what is called the “new settlement”, which was very much the subject of our first report. As the noble Baroness, Lady Falkner of Margravine, said, this is an important document, although it may well never see the light of day. From the evidence that we got, we came to some very strong conclusions about that new agreement and they are well worth studying.
We have talked in economic terms—I declare my interest as having just served on the EU Financial Affairs Sub-Committee, chaired by the noble Baroness, Lady Falkner—and we have been very concerned about competitiveness, which is addressed in the new agreement. It is one of the major issues that has been taken forward. Indeed, we say in Recommendation 27 that,
“the competitiveness element of the new settlement is a significant achievement”.
It is important to remember that.
Another point that I would like to highlight is the wording of the “new settlement”. It is completely wrong to have called it “A new settlement for the United Kingdom” because much of it relates to how the EU works. As we say in Recommendation 44, it is,
“a misnomer: as our analysis demonstrates, many aspects of the ‘new settlement’ reflect the views of most if not all Member States. If the ‘new settlement’ is in due course implemented, it will have far-reaching effects”,
on how the EU works as a whole. It is sad that the new settlement has played no part in the discussion in the European referendum campaign.
Turning to the campaign, I think that the important thing to remember as part of the background is highlighted in paragraph 5 in our conclusions and recommendations. This refers to the UK being less knowledgeable about the EU than any other member state. I do not think that that position will have improved at the end of this campaign, and that, to me, is a real tragedy.
In paragraph 2 of our conclusions and recommendations, we say:
“The debate leading up to the referendum should be of a quality and breadth proportionate to the importance of the decision. It should be wide-ranging and inclusive, based on accurate information”.
Given that we know so little about the EU, the campaign has been darkness itself.
The noble Lord, Lord Boswell, is right to say that we are here to hold the Government to account, but at this point I want to widen my remarks. I am very angry and saddened by the campaign. I say to the noble Lord, Lord Pearson, that the leave campaign and the remain campaign have done this country no favours at all. To tell a lie often enough and to persuade the public to believe it, and to recklessly disregard history, is a fatal flaw. I am fearful that senior politicians are entering into the no-truth zone. That has huge implications for government in general. It is a serious worry.
There has been no attempt by either side to look at a way forward that could work for Britain and the continent. No effort has been made to project how the future might be or to realise that the eastern part of the EU and the countries adjoining it are in a state of almost anarchy in some cases and heading close to war in others. This is a supremely important time in Europe’s history and both campaigns are looking away and facing inward. That is a real sadness. Perhaps the campaigns have been burnished and become light only on the egos of those involved.
The press have not helped either. It is sad to see but one person in the press box today. Perhaps when we reform this House we might get rid of the press box altogether; it would make no difference to how things are reported.
I turn to the process of leaving. The EU is a highly legal structure. The noble Lord, Lord Jay, made that point, and I want to strengthen it. If Brexit wins the day, we will have to have two agreements: a withdrawal agreement and a new agreement for continuing ongoing business. However, because of the legal structure, if those agreements are what is called “mixed”—that is, they include member state and EU competences—they will have to be agreed by the EU Council, the EU Parliament, 27 member states individually, the UK Parliament and our three devolved Governments, because European law is involved. That is going to be hugely complicated.
One talks about the timescale in which this can be achieved. It is worth remembering, as is pointed out in our report, how little time was given to the renegotiation or “new settlement”. With Britain coming out of the EU, how much less time will the EU give to our problem of trying to negotiate a withdrawal and a new agreement, particularly when there are French and German elections? There is a two-year period—the legal advice is quite clear on this—and because the European Union is a legal structure, we are duty-bound as a country to obey international law. If we do not, we are providing new meaning to “perfidious Albion”.
I have come to the conclusion that referendums are divisive and very distracting. The result of this referendum will not end the problem or the debate on Europe. It is merely a stepping stone in the long history of how Britain and the continent have made an arrangement to live. If we look back over the past 1,000 years, we see that it has been a turbulent arrangement. No doubt that will continue.
Baroness Armstrong of Hill Top (Lab)
My Lords, this is a very timely debate. As a fairly new member of the European Union Committee, I thank the chair, the noble Lord, Lord Boswell. He makes sure that we approach these things in a measured way and has been incredibly inclusive and supportive of all members, particularly the new members. I thank him for that.
I will concentrate on the short report on the process of withdrawing from the EU. There is a lot of other business in the House today, and I am very tempted by more general matters, but I am going to confine myself to that. As the report makes clear, the only mechanism for withdrawal in all the treaties and the international agreements is Article 50. The process of withdrawal, therefore—as is made very clear in the report and in Article 50—will not be determined by the minds of the Brexiteers. No one group will have the whole say in how things are developed and progressed.
That is very important. I was a bit astounded to hear one of the Cabinet Ministers this morning speaking about the Bills that would be brought in immediately. As the noble Baroness said, there is—as in a divorce—more than one party involved. What Britain decides will have an effect on the rest of Europe; it has the right to have a say, and we have to acknowledge that. One side cannot determine both the terms of the negotiation and the end point of the negotiation.
The Commission, as the report makes clear, will be responsible for the day-to-day negotiation, but it will be the EU member states, all of them, through the Council, that will have control over the terms of the negotiation. The European Parliament also has to give its consent. The idea that we can be totally in control of that is, to put it mildly, somewhat naive. Those giving evidence to us said that, as far as the negotiating terms were concerned, they thought that there would have to be near unanimity in the UK Parliament about these terms. I agree with previous speakers today that the debate externally has been horrendous and has shown the worst of Britain and its politicians and everyone else. It is certainly not the right way to enter a referendum debate or to enter negotiation should a particular outcome occur.
We can therefore only be relatively pessimistic, and I do not like being pessimistic because I want to see the best of this country and not what I think is the worst. The debate has revealed incredibly strong divisions and differences which are not just about European Union membership, yet of course what the report demonstrates clearly is that there will have to be good, firm relationships which demonstrate trust. At the moment, that is quite difficult to see, not just here but between this country and the other members of the European Union as well as the other institutions.
The agreements will also need the support of individual parliaments in the European Union. If we are not going to work in a more positive way, how on earth are we going to improve those relationships? It is only through good relationships that we will get a good outcome. Governments will have to work well together, as all the key decisions will continue to be taken by the Council.
The other thing that our inquiry made so clear to me was that the UK Parliament will be trapped in unpicking legislation and in deciding which piece of legislation we might want to keep and which piece we have to unravel in order to uphold a decision to leave the Union. My great fear is that the real anxieties of the British people during this time will be squeezed because we will be so busy unpicking the relationship with the European Union that we will not understand what the vote was about. I know that the vote is ending up being about whether we remain a member of the Union, but actually it reflects a deep fear and uncertainty about the experience of globalisation and how different people in our country are being greatly affected in different ways.
I spoke last week about my own region, and I am not going to repeat that. We would be the greatest sufferers because of our dependence on European trade. Through that dependence, we bring a balance of trade surplus to the region; we are the only region to do so. The people out there really feel that, whatever we are doing, we are not reflecting their needs and their ambitions. In that way, I agree with the noble Lord, Lord Howell, that there can be no ending of the debate on the referendum and that we have to rediscover the ambition to reconfigure things in this country and in our relationship with the world if we are to make sure that everybody in this country is able to benefit from the effects of globalisation.
The battle for Britain’s future, as it is being played out, should not be seen as the end point, whatever the result next week. It should be seen as a staging post for that new phase of globalisation that the noble Lord, Lord Howell, was talking about, one that offers hope to those who feel disenfranchised by the changes of recent years and a sense of purpose to every part of the country. Whatever the outcome, that is our challenge; but we know from this report that, if the outcome is that we leave, there will be a very painful and difficult negotiation. We will have to up our game in a way that, quite honestly, we have not done over the period of the referendum to date.
Lord Maclennan of Rogart (LD)
My Lords, this has been a very good, and timely, debate. I declare an interest, in that I am a beneficiary of the common agricultural policy. I would prefer to focus not on the short term, as I think most people have, but on the longer term.
We have lived in a peaceful Europe for more than 70 years. That is part of the outcome of bringing together the member countries in Europe into a community, and has been one of the most important aspects. In the 20th century, millions of people were killed because the European Union did not exist and member countries of Europe fell out with each other. That goes back a very long way. We have seen countries such as Germany and France, western European countries, falling out with each other over a long period of history. This has not been sufficiently focused on during the referendum campaign; the Prime Minister spoke of that on one occasion.
We should recognise this as a benefit of our membership. The economic benefits for this country are considerable—46% of our exports go to Europe; rather fewer of the exports from other European countries come to us—but a whole tendency towards disintegration could be started by Britain. That is a great risk that we take. The Union is to some extent not as close as it was, and some Nordic countries might consider following our lead if we go for Brexit. We have also noticed in eastern Europe the coming together of member countries. Hungary has a very poor Government at the moment, but it is none the less a beneficiary of the European Union and I think that it wants to stay a member of it. Let us consider what the greater impact might be of our withdrawal from the Union. I fear that it could be the stimulus to the Union falling apart.
The connections we have made are very important. I served on the Convention on the Future of Europe in 2002-03. That seems to me a more favourable circumstance in which to negotiate agreements. On that occasion, the members of the European Union found it possible to reach consensus. Afterwards, France and the Netherlands rejected the outcome in referenda, but they did so not on the substance of the agreements—which they finally came to accept—but because they wanted to vote against their Governments, and the Governments of both came to grief shortly thereafter.
We need unanimity about the objectives of the Union and should recognise that we can lead in this negotiation and this debate. We should help in that. “Lead not leave” is the message I want to put across.
Lord Hastings of Scarisbrick (CB)
My Lords, these reports and this debate give us an opportunity to look away from some of the more myopic aspects of the referendum discussions so far. So much of the conversation to date has focused on what the UK may get back, how much richer we might become or how much poorer we might become. One of the great institutions of the European Union, one of the great roles it does well, is to focus and co-ordinate international aid and humanitarian work. That is an important dimension of the EU’s work which, ironically, is not mentioned in these reports but deserves our attention. After the United States, being the largest cash provider of aid but one of the worst percentage providers by GDP, the European Union comes next, and then comes the United Kingdom, followed by a series of smaller nations. We are proud of our 0.7% of GNI contribution to international aid assistance, and of everything that DfID and the UK do, but, in contributing some 20% to EU aid budgets, the UK also punches well above its own capacity. We do more for fragile states, we do more to support the development of democracy, and we do more to respond to the challenges of climate change and continuing desperation in our world.
While we have had politically insensitive conversations about what it means to separate from other rich parts of the world, almost nothing has been said about what that separation would mean for the poorest people in the world. The European institutions created to facilitate collective aid had a good purpose in mind: if we could have more effective co-ordination, greater focus, a clearer line of sight, we could achieve those development objectives which raise the collective boat of wealth around the world, empower markets to work better for our exports and, importantly, prevent some of the tragedies of migration and trafficking that we are now witnessing.
We have to remember that, although the effort focused on the problems of migration from Middle Eastern countries, particularly Syria, across to Turkey and Greece has been the subject of media attention, an equivalent number of people are coming across the Mediterranean from poorer African countries where development aid is fundamental to addressing some of the most desperate conditions created by climate change, poor harvests and inadequate agricultural production methods. The European Union has a massive amount of investment to give in not only technology but techniques, and it improves the UK’s position as a supporter of development in the world to have the European Union acting in concert.
An article in the Economist last week reflected on the disparate problems of fractured aid:
“In one big way … the proliferation of donors harms poor countries. Aid now comes from ever more directions”—
it might be welcome that more money is coming from countries which never gave money in the first place, particularly China and, in some cases, India—
“in ever smaller packages: according to AidData, the average project was worth $1.9m in 2013, down from $5.3m in 2000. Mozambique has 27 substantial donors in the field of health alone, not counting most non-Western or private givers. Belgium, France, Italy, Japan and Sweden each supplied less than $1m. Such fragmentation strains poor countries, both because of the endless report-writing and because civil servants are hired away to manage donors’ projects.”
The noble Lord, Lord Howell, referred to Africa as one of the most important next-level markets for our goods and services, and he is right: the 54 countries of the continent could provide phenomenal opportunities for the United Kingdom, let alone the other countries of the EU. But it will not be so if we undermine and destroy the impact of our collective aid investment, if we reduce our capacity for aid because we wreck our economy by foolishly pulling out of the European Union without foresight to the poor, and if we continue to lose sight of our collective responsibility to stand up for those who are more desperate than even this argument around the referendum has been.
Lord Hunt of Chesterton (Lab)
My Lords, I refer back to the debate introduced by the noble Earl, Lord Selborne, on the Science and Technology Committee report, while acknowledging the important remarks of the noble Lord, Lord Hastings.
The result of the referendum may have a great and potentially adverse effect on UK science, particularly the relationship of science to industry. One of the vice- chancellors speaking in the House last week commented that their university might lose up to £100 million a year through the loss of research grants, so these are big effects. I declare my own interest and experience as a scientist. I have worked in university research with universities across Europe and helped set up a small company that works with the European Commission. I was head of the Met Office, a government agency that worked very closely with all the agencies across Europe. One other interesting feature of being a scientist in Europe over the past 30 years has been the development of very effective networks. One that we set up for aviation and the motor industry carries on very well, and the European Commission helps it.
The question is, what will happen? In my experience and that of many of my colleagues, European officials and European committees have considerable experience and vision and they have encouraged these networks across Europe. The capacity for the same thing in the UK is, I am afraid, not present. Of course, UK science takes a leading role in some of the greatest pure science projects across Europe—in astronomy, fundamental particle physics, bio and pharma—and the evidence to our committee was that Europe takes a leading role and co-ordinates very effectively. There are controversies in terms of working with the European Parliament, which often takes a particular view, but nevertheless the European science scene is very strong and at the top internationally.
An important aspect of collaborating across Europe, which was perhaps not so strongly written into the report, comes from the collaboration of the governmental agencies and laboratories—the Met Office is one, but there are many others that are important. These institutions will continue, as will the collaboration between them if the UK makes the unfortunate decision to leave the EU. The way these agencies programmes work means that they will involve countries in Europe that are not part of the EU, but the primary decision-making co-ordination comes from the EU component in those programmes. We would see the UK take a secondary position. Given the experience and brilliance of all the UK contributions, it would be very galling for us to be in the second tier of advising on these projects. Some noble Lords have been dismissive in previous debates about the European Commission, but all I can say is that our programmes benefit from its advice.
The chairman of our Science and Technology Committee at the House of Lords, the noble Earl, Lord Selborne, explained that UK industry does not make the best use of EU funds. That was strongly expressed in one session of the committee by the director of Rolls-Royce speaking on behalf of his company and the Royal Academy of Engineering. He said that SMEs did not have enough support from the UK Government to learn best how to collaborate across Europe and make best use of European funds. Given that we may now leave the EU, how will HMG provide funding at a higher level for UK SMEs to compensate for the loss of EC funds? The companies that I am talking about are vital for our economy and employment in the UK in the future.
Of course, there will have to be continued collaboration with all the European countries on the key issues of the environment, natural resources, energy and fishing—as we are hearing from the noises beyond—but it will be much more effective if the UK remains in the European Union. I can see no benefits from Brexit.
Lord Browne of Madingley (CB)
My Lords, I welcome this thorough report on the referendum and EU reform. In particular, I wish to comment on its conclusion that the Government should set out a positive, inclusive vision of the UK’s role in a reformed EU. As a businessman, I have long been convinced of the economic benefits of being part of the EU’s single market. In leaving the EU, we deny ourselves not only access to the European market, its consumers and its ideas, but a very important gateway to most of the world. We would create barriers for those who would contribute to our economy. It would be a backward step towards self-imposed exclusion.
My personal perspective on the European Union has been heavily influenced by my family’s experiences. I was born to a father who served in the British Army and to a mother who survived the horrors of Auschwitz. The link that they made, as the continent was being rebuilt, transformed their lives. They demonstrated that, although the EU’s origins may have been economic in nature, its core purpose was to promote peace and prosperity in Europe and to help dampen the ever present and damaging trend towards nationalism. Its relevance in this regard is not diminished.
A vote to leave would be to reject the economic benefits and political security that we enjoy as part of Europe. As an optimist, I am sure that this country will not sever its ties with the European Union, but just staying part of the EU is not enough. It will shape our future, for better or worse. We need to engage more deeply with the process of government in Europe and I want to make one point about that and about reform.
As the Government’s lead non-executive director from 2010 to 2015, I worked closely on this country’s Civil Service reform programme. I was always impressed with our civil servants. We pride ourselves on their analytical rigour, independence and skill at navigating government, and the creation of policy to its very important implementation. It is still one of the most coveted employers among graduates. It is a body that is ultimately responsible for the functioning of government in this country. We should use the experience of building an exemplary Civil Service to our advantage in Europe.
We currently have just over 1,000 officials in the EU. That is less than 4% of the total number of officials and roughly the same as the Romanians and the Greeks. The French have almost three times this number; the Italians almost four times as many. It also stands in stark contrast to our contribution to the EU economy, where we account for roughly 16% of total output. We complain about underrepresentation given our economic clout. The solution is not to withdraw altogether from Europe. In my experience, giving up your seat at the table is a surefire way to lose control. Instead, we must continue to work with Europe, as part of the EU.
Europe’s laws and regulations are largely made through technocratic processes. We must attract, train and send more of our best technocrats to work in Brussels for our mutual interests. In the pursuit of both practicality and excellence in Europe, we must remove the prohibitive and probably outdated requirement for British candidates to prove their proficiency in French or German. English is now the world’s working language and might well be enough. We must inspire the next generation of our most gifted public servants with a vision of what Europe can and should be, not just for business but for peace and security as well. Then we must motivate them to help us shape it.
Lord Cormack (Con)
My Lords, it is a great pleasure to follow the noble Lord, Lord Browne of Madingley. I wish that we heard him more often because he brings with him a wealth of business experience whenever he speaks in your Lordships’ House. Having heard every single word of this debate, it is quite clear that one thread is running through it and that is a degree of real disappointment in the tone, quality and content of the debate. Although I believe that more criticism can correctly be levelled at the Brexiteers, I do not believe that the Government’s case has been made as effectively as it should have been. The report which the noble Lord, Lord Boswell, introduced extremely moderately and persuasively, is itself a moderate and persuasive document that does great credit to the European Union Committee of your Lordships’ House. I want to quote just one paragraph towards the very end, paragraph 258:
“Finally, the EU has always been driven by values as well as pragmatism. We urge the Government, in putting forward its vision for the UK’s place in a reformed EU, also to affirm the shared identity and heritage of the peoples of Europe”.
Would that more attention had been paid to that particular paragraph. It is a great pity that so little vision has infused the speeches made on all sides of the debate. We do have a shared heritage and we need only to look around Westminster to remind ourselves of that. Go across to Westminster Abbey to the glorious chapel of Henry VII, to the monument for the King and Queen, made by an Italian, Pietro Torrigiano, to Westminster Hall, where we owe that wonderful hammerbeam roof, one of the glories of European civilisation, to the master carpenter Henry Yevele.
I would also like to endorse most strongly the words of my noble friend Lord Howell of Guildford, who made a very fine speech. We are, whether we like it or not, part of the European continent. One of the most ill-advised speeches of the campaign was made by Mr Johnson—Boris, not the other one—when he talked about the domination of Europe. He cited everyone from Julius Caesar to Adolf Hitler and he suggested that there was now a great conspiracy within the EU for another dominant dictator. I have never heard a more grotesque misreading of history. All your Lordships need do is step a few yards from this Chamber and look at the marvellously recreated Armada tapestries in the Prince’s Chamber, or go into the Royal Gallery and see the great Maclise paintings of Trafalgar and Waterloo, currently being restored, and you discover the real nature of Britain’s European involvement in preventing any one power having hegemony in Europe and bringing balance by its own participation.
Is now the moment for our great country to turn its back on its history and its destiny? The lesson of life—we all know this—is that no man is an island and no family or community can function sufficiently of itself; every country needs allies and partners. That is the lesson of history. On 23 June, the British people have a dramatic choice to make. Do they remain with their European allies and partners and seek to strengthen an imperfect but very remarkable Union of 28 nations, or do they come out and seek new and different partnerships and arrangements, knowing that every agreement this country enters into always involves the pooling, sharing and indeed sacrificing of a degree of sovereignty? Do we forsake what we have, rather than seek to improve it, not knowing what we will get? The noble Lord, Lord Jay, touched on that issue in his admirable speech and we would be well advised to read, mark, learn and digest his words and those of my noble friend Lord Howell of Guildford, because we do not know how successful we would be.
First of all, in talking to 27 nations who would have every reason to feel aggrieved, we do not know whether we would be able to forge trade agreements and other alliances. As for this talk of emulating Canada or Norway—or, if you please, tiny Iceland—where do these people get their facts and logic from? It is absurd to suggest that this country can become another Norway, as wonderful as that country is; Norway itself has obligations to the European Union, without any of the reciprocal advantages that we enjoy.
I hope the message from this debate and from the more coherent and visionary exponents of the values of the European Union will begin to resonate with the British people over the next seven days, and that they will remember the one achievement of the former mayor, noticeable to all of us who live in London: gridlock. Rhetoric is no substitute for vision, and neither Mr Johnson nor indeed many of his colleagues have really articulated a vision of a Europe that we should be a proud part of. I believe we would be doing our nation a disservice and blemishing its history if on 23 June we voted to sever our ties. The noble Lord, Lord Maclennan, said that he hoped the moral of his speech would be that it is our function to lead and not to leave. I wholly endorse that. As I sit down, I look up at these windows above me, which I see every day, and there are three heraldic mottos there: mindful; Agincourt; que sera, sera. Let us draw some inspiration from each of them.
Lord Lea of Crondall (Lab)
My Lords, I thought that I was going to be late for the start of the debate because I spent part of this morning trying to get hold of a Polish plumber. He was going to ring me back, perhaps from Gdansk, I do not know. This was after I had tried a Cockney plumber who eventually called me back and said, “Sorry, mate. I am in Barcelona”. At least he is not causing mayhem in Lille. I shall come back to this because freedom of movement is one of the four freedoms, and it would be true in EFTA as well, so we ought to think about the reciprocal side of all of that.
I want to cover three points. The first touches on the malaise of voters, many working-class voters in particular, about the referendum. The second point looks at the tendentiousness of the slogan, “Take Back Control”. I would ask this: is it from Brussels that they want to take back control, is it from globalisation or is it from some other force? That is a different question entirely and it raises the twin question of the credibility or otherwise of unilaterally imposed regulation at the national level. The third point is the notion that there are no economic costs to Brexit when in fact they far outweigh the savings. There is indeed no such thing as a free lunch. Boris Johnson, Michael Gove, Iain Duncan Smith and all the rest of them are telling us a big lie about which someone in history would have been very proud.
On the first point, I am a convinced European. I have not been so all my life, but since I wrote in 1975 the TUC pamphlet saying vote no—an instruction I agreed with—I have been heavily engaged in the EU and have seen the inevitability and indeed the benefits and desirability of co-operation, of doing things together so that Europe is to some degree a more social-democratic part of the world than it would otherwise be. In terms of the present position in Britain, I do not think that “one nation” rings a bell in much of our industrial heartland. In terms of people’s identity, they certainly do not like being preached at about what they should like or not like, and coming from their experience we have to listen and understand that. In terms of our standard of living, our grandparents would have found the four freedoms—the freedom to travel, to work, to live as individuals and, of course, as businesses within the European Economic Area—almost unbelievably beneficial. There is a malaise about the type of work experience and the inequality we have.
I turn now to the second point about taking back control. In 2008-09 the crash of Lehman Brothers created a huge fall in the trend of the world economy and certainly in Britain as compared with the previous trend. It cost us a fall of many percentage points in national income, caused a flatlining of people’s living standards, and encouraged the growth of insecurity through things like zero-hours contracts. Whether they are called that in Gateshead, they are part of the malaise. Take back control, yes, but we can do that only on the basis of a degree of co-operation. Brussels is not the enemy when it comes to protecting us. Brussels is our ally. The Sun, the Daily Mail and the Daily Express are all telling people a big lie about their interests and it is clear that we have not done enough to put across our own explanation. However, I think that we are doing better as of now.
The third point is about the free lunch—the idea that we can get all the benefits and pay none of the costs. The noble Baroness, Lady Smith of Newnham, drew the analogy of marriage and divorce as if the experience of a divorce is that you get all the benefits but pay none of the costs. Surely the experience of most people, when looking at it from the outside, is that divorce is precisely the opposite. You have all the costs and none of the benefits. That is what would be true in this case, and I am glad that the European Union Committee has started to paint for us a picture of the leave scenario that exposes many of the fallacies which so far have not been adequately tested in the television studios and elsewhere.
There is a constituency that can be characterised as, “Stop the world—I want to get off”, but that is because in some respects we have ground to a halt on social-democratic workers rights reforms after a very good period inspired by Jacques Delors in 1988 which introduced many of the things that improved the quality of contracts of employment. Perhaps I may just underline the fact that reform has to be made at the level of Brussels because it would not be done by employers in Britain. They could be undercut and they were explicit in what they said: “We cannot do this on our own in Britain”. Even now, a lot of people do not understand that. It can be done only at the European level. Twenty-eight countries represents a big GDP. The GDP of the European Economic Area is larger than that of either China or the United States. We have to make sure that the positive picture is put across. I am quite sure that the big corporations of the world can live with a proper system of taxation and not take up the chicanery of McKinsey as reported last week by Gillian Tett in the Financial Times.
Finally, I shall put the actual numbers on the record. The Institute for Fiscal Studies has never hitherto been accused of being partisan. It has pointed out that the net figure for the so-called extra £350 million a week that has been promised is some £8 billion rather than £18 billion a year. When we look at the Norwegian and Swiss deals, the net saving on that basis would be £4 billion. That is to be compared with a hit to the public finances, leaving aside devaluation, of some £20 billion to £40 billion per annum against trend by 2019-20. Translate that into living standards.
The noble Lord, Lord Pearson, is not in his place. Some of us were accused of scaremongering when we—along with the Bank of England and others—said that the value of the pound would fall significantly. I suspect that not many noble Lords would disagree if I said that that has now become obvious to everyone. It is not scaremongering, it is the frightening scenario that Brexit would open up.
Baroness Sharp of Guildford (LD)
My Lords, I will speak mainly about the report from the Science and Technology Committee on European Union membership and science. Before doing so, I would like to say how much I agreed with the noble Lord, Lord Cormack, and the noble Earl, Lord Caithness, when they said how important it was that we should not throw away the lessons of history. I was born just before the Second World War. My parents experienced both world wars across Europe. Like them, I believed strongly that it was necessary to create a kind of united states of Europe, as Churchill put it—a confederation that would stop European nations constantly warring with one another. The project of my lifetime has in many senses been the construction of the European Union. It is a huge achievement. It would be very sad and retrograde if we were to throw that achievement away. As my noble friend Lord Maclennan suggested, that might happen if we exit the European Union.
I was not a member of the Science and Technology Committee. I was in the past, but I came off it at this time last year, and I have therefore not played a part in putting together the report on EU membership and science. My claim to speak in the debate on the subject is in having authored two books, in the 1980s and 1990s, on the early development of these European Union programmes.
It is interesting to note that in those early days when the programmes were being forged, first by the late Lord Dahrendorf when he was a European commissioner—and who until about 10 years ago was a member of this House—and subsequently and more decisively by Vicomte Davignon, in the early 1980s, they were to a considerable extent shunned by the British Government and British academia. The general feeling was that if the members of the then European Community wished to get together and collaborate over science, that was fine, but it had at that point very little to offer us. Our links were primarily with the United States and other English-speaking countries, such as Australia and Canada. The feeling was that the more profitable links were likely to remain that way.
In fact, measured by collaborations, in terms of publications, by the end of the 1980s UK collaborations with our European partners overtook our collaborations with our US partners, and it has remained that way ever since. As the evidence taken by the Science and Technology Committee demonstrated, these collaborations are now very highly valued. I was amused to compare the conclusion of the committee:
“It was repeatedly put to us that one of the most significant aspects of the UK’s EU membership is the provision of opportunities to collaborate”,
with the conclusion of the 1998 volume authored by me and John Peterson:
“What is striking about these programmes is the very high value placed by their participants on collaboration per se, as opposed to public funding per se, or the effects on competitiveness”.
Again, the Science and Technology Committee report states:
“We view the EU to have three main influences: the provision of collaborative funding schemes and programmes; ensuring researcher mobility; and facilitating and fostering participation in shared pan-European research infrastructures”.
The 1990s evaluation of what the UK gained from the framework programme, written by Luke Georghiou of Manchester University—now Vice-President for Research and Innovation there—identified four key benefits: access to funds for collaborations; enhanced skills training; access to improved and new processes; and commercial links.
It is important to remember that the most effective way to transfer knowledge is through people. Collaborations and working together with other scientists and researchers in other countries, especially when accompanied—as many of these European Union programmes are—by exchanges of doctoral and post-doctoral researchers, involve learning about new and different approaches, ideas and processes. It is this interaction that has proved so valuable, especially for our younger researchers and for those countries in the European Union that are relatively new to research activities. The great benefit for the so-called cohesion countries of southern and eastern Europe was the opportunity for their researchers to work alongside scientists at institutions such as Imperial College or University College, London—or for that matter at the Institut Pasteur or the Max Planck institutes in Germany.
I have two further points in relation to the report. The first is on downsides. The report raises two issues, bureaucracy and low participation by industry. On bureaucracy there have been endless promises of simplification but very little seems to have been achieved. One can have some sympathy with the Commission, which is constantly being accused of being too lax with its money and of not having a proper audit trail. The science and technology field is one of the few areas where it has responsibility for disbursing resources. Agricultural and structural funds rely on national Governments, where it is often difficult to keep track of precisely who is spending what, and where. However, where it does have control the Commission rather overcompensates.
The issue of poor industrial participation has been around since the start of the programmes. It arises partly because the programmes aim at pre-competitive R&D. Originally the focus was on early-stage R&D. The development of the European Research Council has tipped the balance more towards blue-sky, pure research. Governments in continental Europe have been more sympathetic than UK Governments of all complexions to getting involved with applied research and helping companies bridge what is here called the “valley of death”. The Catapult programme was developed under the coalition to respond to this. But, as the committee notes, greater discretion given to regional governments in other European countries, combined with stronger regional banking systems, has often provided a better framework for industrial participation, frequently alongside university partners.
Finally, I would like to say a brief word about the role played by Britain in European decision-taking. There is a tendency to talk a lot about unelected bureaucrats in Brussels taking decisions. In this area the decisions are in fact taken by myriad advisory committees of one sort or another, with only the really contentious issues going to co-decision between the Council and Parliament. The key decision-makers are to be found in the nexus of these committees, which is effectively a complex and somewhat incestuous system of advisory committees and peer review. Many smaller countries do not have the experts or the capabilities to play a significant part in this process—but it is one in which many British experts have played a substantial role.
I will take the example of Horizon 2020. As the committee points out in its report, 46 experts have played a key role in advisory groups, developing the Horizon 2020 programme. The UK CEO of Syngenta, giving evidence to the committee, said that,
“if Britain went its own way in Europe, we would lose the most powerful, most influential, significant voice pushing for a rational, science-based regulatory system governing our technologies”.
There is no doubt that the British voice in science and technology is heard in Brussels. Its loss will be a loss not just to Britain but to the whole of the European Union.
Lord Bilimoria (CB)
My Lords, there is a great deal I do not like about the European Union. No one knows who their MEP is. MEPs have no connection with the people they represent and are not accountable or representative. The EU Parliament moving from Brussels to Strasbourg every month for a week is a ridiculous waste of time and money. The euro is a complete failure—one size will never fit all. It is surviving only because it is more difficult to dismantle than keep together. I used to think we lost out on tourism and business visitors by not being in Schengen; now we are fortunate, given the migration crisis and security concerns, not to be in Schengen. I am a true Eurosceptic.
However, given a choice, I have no hesitation in saying that we should remain in the EU. I thank the noble Lord, Lord Boswell, and his committee for producing their reports. I came to this country from India as a 19 year-old student and I have seen the immense change in this country from the time I arrived in the early 1980s, when it was the sick man of Europe, to today being the envy of Europe. The transformation is remarkable. Back in the 1980s, this country had a glass ceiling. Today it is a country of aspiration and opportunity where anyone can get to the top, regardless of race, religion or background. We have seen the highest cumulative GDP growth rate in the European Union since the single market began in 1993. For the United Kingdom it is 62% versus Germany, for example, at 35%. On this point alone, the well-known economist David Smith said in the Sunday Times:
“Britain succeeds in the EU: we’d be daft to leave it”.
This country, with its flexible labour market and open economy, has given me the opportunity to build Cobra Beer from scratch. When we first exported Cobra we chose European Union countries to export to because it was so easy. Now we have exported to more than 40 countries.
I cannot believe that Vote Leave could put out a TV advertisement that states the UK pays £350 million into Europe every week, and then states the purported health spending that this could result in. This is complete nonsense. It should have been taken down by the Advertising Standards Authority. The Vote Leave campaign cannot even get its sums right. We get a rebate from Europe that brings it down to about £150 million a week. If we leave, our current growth rate of 2% a year might flatline or even go into recession. That would be a drop of well over £30 billion —four times our net contribution to the EU.
This country has to wake up and smell the coffee. The Vote Leave campaign is based on a number of bogus claims. Brexit bogus claim number one is about loss of sovereignty. What loss of sovereignty? We are in the EU, but not in the euro; we are in the EU, but not part of Schengen; we are in the EU, but we drink our beer in pints not litres; we are in the EU, but measure our roads in miles not kilometres. No one can tell this country what to do. We have total sovereignty.
Brexit bogus claim number two concerns the lack of democracy. There are elected Members of the EU Parliament. The EU Commission is appointed by elected representatives from each country. We are having a referendum on EU membership right now and we can pull out of the EU whenever we want. Where is the lack of democracy?
Brexit bogus claim number three: Vote Leave says EU regulations cost British businesses £600 million a week. Where has this figure come from? It is completely subjective to try to quantify the impact of red tape. The claims are made by people who have never run a business in their life. Of course there are unpopular regulations, but there are good regulations that protect workers’ rights. I can assure noble Lords that when you run a global business, as I have, you do not think about EU red tape, you just get on with it. The biggest barriers to business are the UK’s own overly complex, vast and continually increasing taxation, housing and planning laws. These are self-inflicted by the Government of the day and are nothing to do with the European Union whatever.
Brexit bogus claim number four concerns migration. Immigration has benefited this country over the decades. EU immigration has been continually demeaned and vilified by Brexiteers. There are 3 million EU migrants working in the UK. This has built up over a number of years and we know how hard-working they are. For example, surveys show that the Polish community is respected and appreciated by the British public and seen as contributing to our country. We have one of the highest levels of employment on record. We have one of the lowest unemployment levels ever seen—in fact, in practical terms we have full employment, despite 3 million EU migrants. Where is the problem? There are a few bad apples trying to take advantage of our welfare state, but, on the whole, EU migrants have helped us to become the fastest growing country in the EU and they contribute to this economy five times more than they take out.
People talk about a drain on public services. If we need 3 million people to boost our economy, our Government have failed if they have not been able to provide the necessary accompanying public services. In fact, our public services would collapse without the contribution of those 3 million people. Our country needs migration due to our ageing population. Misleading nonsense is proliferating from the Vote Leave campaign about immigration, which states that if we leave the EU we will be able to take in immigrants from elsewhere. Michael Gove has said that he wants to bring net migration down to the tens of thousands. We have net migration of 330,000 now, of which half—about 180,000—is from outside the EU. Even if EU immigration stops dead on Brexit, we still have well over the tens of thousands. Their argument is illogical and the public should not fall for it.
Brexit bogus claim number five is that we could negotiate more trade deals with other countries and we would be in control of our destiny if we left the EU—that we could engage in trade deals with India and America. We are the second-largest recipient of inward investment in Europe. Some 60% of companies operating in the EU have their headquarters in the UK. Would they continue to if we leave? Of course not. Our inward investment would dry up and London would no longer be the number one financial centre in the world. Other countries see the UK as the gateway to Europe. As a professor from the Harvard Business School, of which I am an alumnus, said, we would be mad to leave the EU. If we were to have a deal like those of Switzerland or Norway, we would still have to agree to free movement of people and we would still have to contribute—maybe not £8 billion, but maybe £4 billion.
The Brexiteers tell us that those advising against leaving the EU should not be listened to: “Who are they to tell us? They’ve been wrong in the past”. We do not live in a vacuum. We are an integrated member of the global economy. We are not a superpower, but a global power—we sit at the top table of the world: the UN Security Council, the G7, G8, G20, NATO and the EU. If we leave, we jeopardise our standing in the world and our future investment. I did not think I would ever quote the Prime Minister’s wife, but she said:
“I want my children growing up with the advantage of starting their careers in a country that is a big fish in a big pond, leading the way in Europe”.
If we leave the EU we will be a tiddler in an ocean.
Brexit bogus claim number six is that the EU is in a mess and our share of trade with it has been falling. That is quite obvious because we are trading more with emerging markets, but the EU still accounts for 44% of our exports and 55% of our imports. It is too big to jeopardise.
Brexit bogus claim number seven is that there will be further integration, leading to a superstate, and we will be dragged into EU bailouts. There will never be a united states of Europe. I come from India, a country that is a true federal state. Europe will never look like that. The Prime Minister’s negotiations have ensured that we are not committed to further unification and bailouts in the future.
Brexit bogus claim number eight is that there will be an EU army that will subsume the British Army. This is complete fantasy. This will never ever happen. It is also claimed that peace in Europe has been brought about by NATO. It has been brought about by NATO and the European Union.
Brexit bogus claim number nine is that Turkey will become a member of the EU and we will not be able to stop 75 million people coming here. Turkey is light years away from joining the European Union—this is scaremongering.
Lastly, Brexit bogus claim number 10 is that the EU is an economic mess, with youth unemployment up to 50% in countries such as Spain, Italy and France. These countries have been in a mess since 2008-09, when the financial crisis began. We, on the other hand, because of our flexibility and control of our destiny, have thrived. The fate of these EU countries has not prevented us succeeding and getting our economy back on track. Even if the economies of Europe absolutely implode and Europe breaks up, I would rather we were at that table trying to help out and knowing what is going on. As has been said, I do not want to jeopardise our own United Kingdom in a Brexit situation, where Scotland might want to leave. Then there is the huge number of years it has taken to get to the present Northern Ireland situation, which would be jeopardised.
Brexiteers try to say that they are the ones who are proud of Britain. I am proud of Britain—a country that has given me everything, that is not isolationist, selfish or blinkered. What speaks more about a country than anything else is its spirit and values. British people are respected around the world for their values. If we Brexit, we will be sleep-walking over the cliffs of Dover into huge uncertainty and instability. Even Brexiteers are saying that it will take years to renegotiate our position with Europe. A protracted period of negotiations, a possible recession, the loss of jobs—we have a fragile recovery and huge debt. We have a current account deficit and a budget deficit. Why risk all this when we do not have to? It is far wiser and far more productive for us to try to reform the EU from within. Why destroy the growth we have achieved? Why risk our standing as the fifth largest economy, with the highest growth rate in the EU and the largest amount of investment in the EU?
There is an African proverb: “If you want to go fast, go alone; if you want to go far, go together”. We are in control of our destiny and we have our sovereignty. I conclude with a very short poem—my favourite poem—written by the Indian Nobel laureate Rabindranath Tagore, which is so pertinent to what we are speaking about:
“Where the mind is without fear and the head is held high
Where knowledge is free
Where the world has not been broken up into fragments
By narrow domestic walls
Where words come out from the depth of truth
Where tireless striving stretches its arms towards perfection
Where the clear stream of reason has not lost its way
Into the dreary desert sand of dead habit
Where the mind is led forward by thee
Into ever-widening thought and action
Into that heaven of freedom, my Father, let my country awake”.
Lord Parekh (Lab)
My Lords, I have been in this country for more than 50 years and I cannot recall an equivalent occasion when it was likely to take such a momentous decision as to whether we should remain in or leave the European Union, on the basis of a rather shallow and polarised debate conducted in a mood of panic created or exploited by a motley crowd of politicians who are prepared to change their convictions as often as they change their underwear. I want to argue as forcefully as I can why it would be unwise of us to leave the European Union; or rather, more positively, why it is crucial that we stay.
First, as several speakers have pointed out, there is no clear alternative. There is all this brave talk about our being able to do this, that or the other, negotiating like Canada or Norway, but it is all based on fantasies. The European Union will not view us as kindly, and therefore will be less disposed to accommodate us. Other countries will not be able to deal with us because they have been dealing with us on the basis of our membership of the European Union and, once that is taken away, the assumption based on the fact that they will continue to co-operate with us does not hold. I therefore think that it would be absolutely mad to move in a direction about which we know so little rather than build on what we have achieved so far. The Prime Minister has brought back a settlement. In 2017 we have the unique opportunity to be president. There are all these possibilities whereby we can use our good offices to set our own agenda and take the European Union in the direction we want to take it.
The second reason that we ought to stay in the European Union has to do with the idea of sovereignty. We are constantly told that we should take back control over our affairs. Well, we already have control over our affairs, because our MEPs sit there and our commissioners take decisions. Getting out does not give us any greater control, because the forces we deal with are global and they require a global response. Sovereignty is ultimately about power and power is not gained in isolation, because isolation is impotence. Power is gained when we share with others in jointly collaborating and organising our affairs. The choice is therefore between insisting on being sovereign, going it alone and becoming impotent or being part of a larger unit and working together with it.
The third reason I think membership of the European Union is crucial to us has to do with the fact that Europe has been a constant point of reference and has provided standards of comparison. In all matters having to do with social and other affairs—for example, survival rates for patients after cancer, unmarried mothers, teenage pregnancies—there are comparative figures for other European countries and for our own. These hurt us when they show that we are not doing as well as other countries, because all European countries, more or less, are at the same stage of development. These comparisons inspire us, they shame us, they make us proud when we do better and they lead to important changes.
It is also very striking that membership of the European Union has been a force for great good for us. I can remember those occasions when people had to take matters to the European Court. In matters having to do with human rights, equal pay, paid holidays, maternity and paternity leave and health and safety standards, Europe has been a champion of social democracy and has helped us maintain a certain standard of decency in our country which otherwise might not have obtained.
My fourth reason has to do with the fact that our membership of the European Union has helped us create a stable and peaceful Europe. This is partly because of our great role in the Second World War and the policies we have followed since. If we leave, there are two possibilities. Either other countries may try to emulate us and the European Union may break up into a conglomeration of small nation states, or the process of unification may go further, resulting in a continental state. A powerful continental state can never be in our interest. It is striking that our foreign policy has always been based on a balance of power in Europe.
The other reason this is important has to do with the fact that nation states are becoming ever less important. All countries are forming alliances and it is only those countries that are part of stable alliances which are able to make an impact. The United States matters not just because it is large and independent but because it is able to work through international institutions such as the IMF and World Bank or its control over Latin America. Likewise, China matters because it has all manner of alliances with neighbouring countries. The EU is another example. Through it we are able to shape the global agenda. Outside it, we would not have any of the influence we currently have.
I readily agree that the EU has its economic and political problems, but these can be tackled by remaining within the EU. The Prime Minister’s proposal as to the kinds of changes he has been able to secure tells us how those changes can be brought about, and I therefore suggest that we should not only stay within the EU but show a greater degree of commitment and enthusiasm than we have done so far, rather than appearing to be sulky and constantly threatening to go home with our marbles if we do not get our way. That is not the way a great nation should behave.
Lord Hennessy of Nympsfield (CB)
My Lords, I declare my membership of your Lordships’ Science and Technology Committee and my fellowship of the British Academy.
In the grand sweep of the wider history of our islands the science and technology element of our debate today is a tad strange, because the life of the mind should have little or nothing to do with customs unions, and that is what the European Union, in its various forms since 1952, has been and will remain. Free trade comes no freer than the global intellectual trade in ideas and research. A free trade of the mind is something we can all sign up to, wherever we stand on the great European debate. The United Kingdom was a very considerable player in the world when it came to research, science, technology and the arts and humanities before we joined the European Economic Community in 1973, and it will remain so whatever happens on 23 June.
The reasons for our global prowess in the little grey cells department, if I can call it that—our cultural World Service, as the noble Lord, Lord Bragg, of Wigton, likes to put it very well—are multiple. I am pleased to say that the British Academy will soon be mounting a study of its vectors and ingredients, with the encouragement of your Lordships’ Science and Technology Committee. All that said, research needs fructifying institutions and funding streams to irrigate the life of the mind at both the national and international levels, and it is my belief that our 43-year membership of the European community has, on balance, been a positive aid to this end. From the evidence sessions of your Lordships’ committee on today’s theme I acquired an impression that had not dawned on me before that this aspect of our relationship with Europe has been the least jagged and raw of all the other linkages which, taken together, have produced a very substantial emotional deficit with the European Union on the part of the people of our country, or many of them. This, I fear, will endure even if the country votes to remain.
I have often pondered the roots of this emotional deficit. It has occurred to me more than once that it is a tragedy that we did not invent the community. The European Coal and Steel Community came out of the minds of clever, Catholic, left-wing, French bureaucrats. Most Brits have a problem with three of those five. I have not, as it happens, but most have. If only we had invented it, it would be a very small secretariat in an area of high unemployment, sending perhaps two or three letters a year to the member countries: “Would you mind doing a little more on free trade here, here and here—but only if you’ve got time?”. We are not a directives people. The emotional deficit is very powerful. Of course I am being facetious in the way that I am regarding it—it is very deep and complicated.
Science and technology, plus funding for the arts and humanities, are, as the committee’s report puts it,
“a major component of the UK’s membership of the EU. Nearly one fifth (18.3%) of EU funding to the UK is spent on research and development”.
There would, I believe, be a real loss to the UK on this front if we leave. It was put to the committee, as our chairman, the noble Earl, Lord Selborne, said earlier in the debate, that the funding streams we acquire from the EU—more than we put in—are the equivalent, at least, of an extra research council for the UK. We might also lose part of the human flow in and out of our labs that the free movement of people within the EU permits—in an era where, ever more, the prizes go to the international and the collaborative. It is crucial for our country to think heavier than our weight in the world, as we have done since at least the 17th century. I am convinced that our membership of the EU enhances our ability to do this.
Switzerland, another country that prides itself on thinking heavier than its weight in the world, is not a happy example for those who wish to leave, even though Switzerland has associated country status in its relationship with the EU. The committee received eloquent testimony on this from Professor Philippe Moreillon, vice-rector for research and international relations at the University of Lausanne. He said that when Switzerland,
“became an associate, it was much, much easier, of course, but we are still not sitting at the decision table or on the consultative committees where the decisions are made. We have a number of ways to interact, such as through university associations. We are still in the corridor, but at least we are part of the whole programme”.
The implication of this evidence is that if the UK leaves it will, in terms of European R&D funding, become a corridor nation, which is a condition not to be wished for.
Remainers, of whom I am one, have to recognise, however, that there are unsatisfactory elements within the existing scientific relationship, which the Select Committee inquiry illuminated. Harmonisation and EU regulations can bite into that prime principle of intellectual free trade. For example, the committee concluded that, in the area of genetic modification and clinical trials, UK business and research were placed at a disadvantage compared to non-EU competitors because of EU regulations.
This leads to my concluding thought. If we remain, how refreshing it would be if the Prime Minister quickly turned up in Brussels with a positive, constructive plan for a wider reform of the European Union. I was greatly impressed by what the noble Lord, Lord Howell of Guildford, said earlier in our debate about wider reform—a wider reform of which a greater slice of funding and trimming of bureaucracy for R&D could be a shining element. Not only would this be an inherently good thing, but just think of the shock value. To adapt that great expert on national identity, PG Wodehouse: for a very long time now in Brussels, it has always been easy to distinguish between a ray of sunshine and a British Prime Minister bearing a grievance.
The Duke of Montrose (Con)
My Lords, I also declare my membership of the Science and Technology Committee and express my thanks to the chairman and the clerk who led us so well on all these issues. The topics chosen in my time on the committee were the nearest thing one is likely to get in politics to a crystal ball, whereby we try to determine some of the future. Whether we have been able to determine anything meaningful in our report is probably up to others to judge, but I certainly hear some approval from around the House.
The United Kingdom has a reputation for invention but often these inventions are not exploited by us but are taken up by others and turned into successes. We learned in the evidence how manufacturing companies in Germany are heavily integrated with government research. As my noble friend Lord Selborne mentioned, the committee was left wondering whether it was just a coincidence that no British manufacturing company offered to come and give us its views. Does this indicate where the lack of communication begins between science and the practical side of manufacturing?
We heard the views of various European-based companies about what our role has been in Europe. As the noble Baroness, Lady Sharp, reminded us, the representative from Syngenta told us that,
“if Britain went its own way … we would lose the most powerful, most influential, significant voice pushing for a rational, science-based regulatory system governing our technologies”.
That is very important. We heard a lot of statistics about the success of our research base in sourcing funds from Europe. When it comes to that most demanding element, the seventh framework programme, we are at the top of the league with Germany, gaining just under €7 billion. We heard from a variety of scientists who have had success in securing these funds. My noble friend Lord Selborne outlined the frustrations caused by certain EU prohibitions on research—the noble Lord, Lord Hennessy, also mentioned it—such as work on stem cells or with animals. However, our own politicians have supported several such causes, in both the EU and the UK; we cannot always say that it is because of EU regulation.
As a Scot, I found it particularly interesting to hear evidence of the experiences of Switzerland and its unconventional relationship with Europe, because there are certain parallels. In European terms we can see ourselves as small nations and inevitably, because we are both mountainous, we have historically been poor in natural resources. The Scots thought that they had escaped this element but it has now been re-established rather unexpectedly. In Scotland we have certainly had to survive on our brains and our brawn, and we have developed a culture of care and co-operation. We have had an emphasis on education and a readiness for invention. But there is one big contrast, in that Switzerland is geographically at the centre of Europe while we are on the periphery, so it is that much harder to make a success of our trading relationships. Switzerland wished to participate at most levels in Europe but did not wish to be a member of the EU or of the European Economic Area so, as your Lordships know, it has had associated country status but with a bilateral agreement to ensure free movement of people. This has allowed it to participate at many levels, particularly in the EU framework programme funding scheme, but the minute it implemented any participation, it had to apply all the rules we have heard about in those spheres. Even more significantly, when, as a result of a national referendum, it decided to rule out all immigration and free movement, it was immediately barred from all participation and co-operation within Europe and is now having to renegotiate its way back in.
From what I can see, there is a very clear divide with Europe—you are either in or you are out. Thoughts of some cosy compromise do not really have that much to offer. This is the choice we will be asking the people of this country to make next week. I hope that we will continue to participate in Europe.
Lord Howarth of Newport (Lab)
My Lords, I add my thanks to noble Lords for the sober analysis of the processes of change provided in these reports. Tragically, however, the European Union is not capable of the reforms that could justify Britain remaining. The dreams of the Prime Minister in his Bloomberg speech have been all too comprehensively dashed. The EU is failing both economically and politically and its member states are incapable of achieving agreement on the reforms that might save it. There is very little willingness even to contemplate the radical redesign that the noble Lord, Lord Howell of Guildford, called for in his thoughtful speech. The noble Lord, Lord Boswell, deprecated the failure of the Government to explain—as I think he put it—what, if anything, is wrong with the European Union. Perhaps I might therefore venture to assist.
Britain joined the EEC in the early 1970s at a low point in our national self-confidence, and just when the economic miracle that had brought the original six to new heights of prosperity was faltering. Self-inflicted wounds followed: the Maastricht criteria condemned Europe to weak growth, and the ultimate hubris, the disastrous turning point, was the formation of the eurozone. Without political consent to create a federal “United States of Europe”, the single currency project could not work. The Germans have enjoyed an undervalued currency but even in Germany wages have stagnated. The Mediterranean countries have suffered grievously from an overvalued currency. There has been little redistributive fiscal relief across the EU. Membership of the euro encouraged reckless borrowing and creditors have ruthlessly ensured that there is no debt relief. Across swathes of the eurozone, unemployment, particularly among young people, has been running at catastrophic levels.
The eurozone countries are incapable of extricating themselves from their predicament, either by advancing or by retreating. Britain is infected by Europe’s economic stagnation and chronic financial instability. The UK should continue to reorientate its exports and strategically disengage itself from our debilitating entanglement with the European economy.
Of course I acknowledge the ideal of peace, about which the noble Lord, Lord Browne of Madingley, and the noble Baroness, Lady Sharp of Guildford, spoke so feelingly. I do not belittle that at all but it is not our membership of the European Union that prevents the French and the Germans going to war in 2016. Europe’s economic failure now begets political division and crisis. For all the invocation of ever-closer union, the gulf between Europe’s haves and have-nots has grown ever wider. Market forces, to which EU orthodoxy is dogmatically committed, have concentrated wealth in certain regions of the north and west of Europe: Baden-Württemberg, the Rhône-Alpes and Lombardy. Your Lordships should note that these areas of prosperity are regions, not countries, and that one of the effects of the EU is to fracture the old nation states. Meanwhile, the south and the periphery struggle and everywhere the less-educated and less-skilled, the industrial helots, the culturally alien and the urban underclass are frustrated and angry. Migration, both into Europe and across Europe, intensifies resentment and generates extremism.
The democratic deficit and the governing structures of the EU threaten to be as disastrous as the euro. The system is an aggregation of democracies but it is not itself democratic. It was never intended to be so by its authors, rational public servants who were horrified at what they had seen weak democracies and populist fascism do. Policy initiative continues to rest with the unelected Commission. The Council of Ministers as such has no accountability. The inner eurogroup—of which, of course, we are not members but which commands the majority and has no regard for our interests—takes the major economic decisions. It has no status in European law and its proceedings are opaque. The European Parliament and national parliaments remain marginal. This is not a system of government that should be acceptable to the British people, who take pride still in a unique history of parliamentary democracy.
Baroness Smith of Newnham
Does the noble Lord not agree, however, that there is a directly elected European Parliament and that it has the right of co-legislation in EU decision-making?
Lord Howarth of Newport
It has indeed gained some powers but I would still contend that its influence is marginal. I certainly do not see that the European Parliament has any worthwhile accountability to the peoples of Europe.
Yanis Varoufakis has described how, equipped with a democratic mandate from the Greek people, he sought to renegotiate the terms of Greek debt and, Germany’s finance minister, Wolfgang Schäuble, told him:
“Elections cannot be allowed to change an economic programme of a member state”.
With rule by technocrats, troikas and creditors, the gulf between governors and the governed is increasingly offensive to the peoples of Europe.
Across the European Union, parties of the far right are gaining support: PEGIDA, Law and Justice, Jobbik, the Front National and Golden Dawn. There is the SNS and its rival, People’s Party—Our Slovakia, whose leader Marian Kotleba takes to the stage wearing the uniform of the wartime Slovak fascists. The two neofascist Slovak parties already have almost 20% of the seats in parliament. The Freedom Party of Austria came within an ace of winning the Austrian presidency.
It is complacent to suppose that we are immune from this pathology. If in Britain our metropolitan political elite continues to display contempt for people who do not share its enthusiasm for membership of the EU and for globalisation, the disturbing problem we already have of disaffection from mainstream politics will grow worse. People who loathe the EU will seek recourse in the nation and if their nationalism is not to turn ugly, they must be listened to and treated with respect. If reputable politicians will not stand up for the losers, disreputable ones will. Remain campaigners, I suggest, would be wise to stop giving the impression that they regard supporters of leave, who decline to be instructed by experts as to what they should believe or how they should vote, as ignorant, stupid and bigoted. Remain MPs who threaten to use a majority in the House of Commons to thwart the will of the people in the referendum seem bent on destroying our citizens’ trust in politics.
I hope that the British people will have the confidence to leave the EU. We should not doubt that we have the enterprise, skills and resilience to cope with the transition. Our businessmen will know how to seize their opportunities across the world. Our excellent scientists will flourish in the global academic community—the free trade of the mind of which the noble Lord, Lord Hennessy, just spoke. We will forge new relationships with the peoples of Europe, with whom we have always engaged and always will. It will be open to us to become more, not less, internationalist. We will be able to handle the issue of migration decently on our own authority.
The process of withdrawal should open exhilarating vistas. After reclaiming rights to take our own decisions and before activating Article 50, we should engage our people in an extensive national debate of new quality—and we will find that the people of Britain do not want workers to be stripped of their rights, or science to be stripped of its funding. We should seek to reach national consensus on our objectives in negotiations, tough as they will be, with the EU and other global institutions and powers. There will indeed be a great programme of legislation. In all this lies the opportunity to renew our parliamentary democracy.
Lord Taverne (LD)
My Lords, the last speaker was correct in telling us that there are some very unpleasant elements inside Europe in some of the parties. What the noble Lord did not mention is that all our friends—our allies, members of the Commonwealth, the democracies of the world—are desperate that we should stay a member, while the voices which are keenest that Europe should break up are those of Mr Donald Trump and Mr Vladimir Putin.
This has been an excellent debate and I have learned a lot from it. I had not appreciated fully, until I heard the speech of the noble Lord, Lord Boswell, and the very effective speeches from the noble Lords, Lord Liddle and Lord Jay, quite how huge the problems are of extracting ourselves from the European Union and how serious the consequences would be of the prolonged process which would have to take place.
I want to refer to a more particular issue: science and the European Union. A recent survey in Nature showed that 83% of scientists want Britain to stay in the Union because being in the European Union is good for British science. Sir Paul Nurse, for example, an ex-president of the Royal Society and a Nobel prize winner has written:
“Permeability of ideas and people is crucially important to science, and it flourishes in environments that pool intelligence, minimise barriers, and are open to exchange and collaboration”—
a point which has been made by many people in this debate. The European Union, he wrote,
“helps provide such an environment, and scientists value it”.
Then there were the 150 fellows of the Royal Society who wrote in March to the Times warning that Brexit could be “a disaster for science”. The reaction of the leave campaign was, as usual, to trot out someone from the small minority who contradicts those views. That is its normal reaction to the majority views of experts who seek to destroy its arguments.
When the IMF, the OECD, the Bank of England, every international economic authority and 90% of British economists concluded that Brexit will reduce our growth rate and adversely affect wages and jobs, their views were contemptuously dismissed. When the universally respected IFS, whose objectivity has never before been questioned, confirmed the Treasury’s detailed forecast of the harm Brexit would cause, we were told that the IFS was a lobby for the European Commission. Here I should declare an interest, because a long time ago, in 1971, as a recent Financial Secretary, I was asked by the founders of the IFS to become its first director, was responsible for its launch and helped it take some of its early steps. I am rather proud of having been the midwife at the birth of this baby, which has grown into such a formidable adult.
This excellent and most informative report from the Science and Technology Committee illustrates many of the reasons why scientists are so strongly pro-EU. They want to be part of a body that promotes big science, that is, science that is now performed on an increasingly large scale. The report quotes Professor Cowley, head of the UK Atomic Energy Authority:
“In the years since the early 1980s, Europe has become the world leader in big science. More and more science is progressing towards big science”.
One could cite many examples, but perhaps the paragraphs that sum it up most comprehensively, and which have been referred to by the noble Earl, Lord Selborne, and others, including my noble friend Lady Sharp, are paragraphs 157 and 158. Paragraph 157 states:
“It was repeatedly put to us that one of the most significant aspects of the UK’s EU membership is the provision of opportunities to collaborate. We view the EU to have three main influences: the provision of collaborative funding schemes and programmes; ensuring researcher mobility; and facilitating and fostering participation in shared pan-European research infrastructures”.
The next paragraph continues:
“Many would maintain that the provision of collaborative opportunities is perhaps the most significant benefit that EU membership affords science and research in the UK. These collaborative opportunities are not just between Member States but can extend to non-EU and non-European countries”.
What are the arguments against? Several have been referred to, but the main culprit, as usual, is bureaucracy. As the noble Lord, Lord Hennessy, pointed out, there is an urgent need for reform of some of the regulations, but I quote Sir Paul Nurse again. He says:
“The UK can be very bureaucratic. At the Francis Crick Institute, where I work, we recruit the best in the world, wherever they come from, so we plough through the paperwork. But it costs us effort that would otherwise be spent on biomedical science. In contrast, when we recruit scientists from within the EU, the bureaucracy is much less”.
Our excellence in science is one of our greatest national assets, and so is that of our universities. The effect of Brexit on science and our universities has seldom featured in media reports of the referendum debates, but let me once more cite the views of people who are not generally politically partisan but who know what they are talking about: Universities UK and the vice-chancellors of the Russell Group. They are unanimous in expressing their deep concern about the serious damage Brexit will do to both those precious assets. For example, Sir Leszek Borysiewicz, the eminent vice-chancellor of Cambridge, has warned that Brexit could mean that Cambridge could no longer expect to maintain its status as one of the very top universities in the world.
Brexit would harm science and diminish our universities.
Lord Hannay of Chiswick (CB)
My Lords, every one of the three reports we are debating today is relevant to the event that will take place a week tomorrow and is given a great deal of added topicality by that event. Each one, as is invariably the case with such reports of our EU Select Committee and the Select Committee on Science and Technology, is a small part of the complicated jigsaw that makes up our EU membership—one which is so poorly understood, alas, by the electorate and one which, also alas, is so badly explained by politicians. There is plenty of blame to go around for that lamentable state of affairs, but none of it, I suggest, is attributable to your Lordships’ committees or to the admirable chair of the EU Select Committee, the noble Lord, Lord Boswell, who introduced this debate with such lucidity.
No one who has read Article 50 of the EU treaty even once—I fear that there may be some at least in this room who have not done that—can possibly doubt what a cat’s cradle we will enmesh ourselves in if next week we vote to leave. No one also can, or at least should, doubt that we will be at a negotiating disadvantage if we decide to go down that path of withdrawal—a negotiation in which we will inevitably be cast in an adversarial position from the outset.
Let me just make this point. Up to now, the other 27 member states have unanimously made clear—and they really mean it—that they want the 28-member European Union to continue. That is an entirely valid position, from their point of view and an admirable one from mine. But do not doubt: the day we vote to leave, that will change. Then, the 27 other member states will know that we are no longer to be a member of the European Union, and they will look after their national interests in that context. That will not take account of our national interest.
We would thus, under the Article 50 arrangements, lose control over the content and timing. That is all the more so, of course, given that the views expressed sometimes in this Chamber and by Vote Leave seem to indicate a desire not to trigger Article 50 too soon—that is, in plain speech, to prolong the agony and uncertainty, which is likely to have an extremely damaging effect on investment in this country for even longer than would be the case if it was triggered straightaway. Indeed, it looks to me as if most of the two years provided for in Article 50 could well be taken up with the supporters of leave working out which of the future trading options with the EU we want to aspire to, because they certainly are not making a great deal of sense out of it yet.
On what basis do the supporters of Brexit base their sunny optimism as to the outcome of those negotiations? It is certainly not on any contact with the leaders of the 27 other member states who will be on the opposite side of the table from us—as far as I can see, none of them has had any contact with them at all. Meanwhile, the leaders of the leave campaign miss no opportunity to insult the other member states, and proclaim that they want to destroy the European Union or even, with supreme arrogance, that they want to give them a lesson and a wake-up call. Is that likely to encourage them to give us a good deal? I rather doubt it, even if they are not likely to be heavily preoccupied with the risk of contagion to their own protest movements if they are too generous to us. It is honestly no good saying that the Germans will still want to sell us BMWs and the French will still want to sell us wine. That is the politics of the saloon bar, not of the negotiating table.
The second report, on EU membership and UK science, on which I welcomed the introduction from the noble Earl, is equally sobering, as is the virtually unanimous view of our universities and research establishments that withdrawal would be seriously damaging to them. We have heard plenty of evidence of that. It is not just a matter of EU funding, of which, of course, we get a disproportionately large share—although, given the steady reduction in the Government’s own contribution to our scientific budget in recent years, it is a little hard to believe that they will leap forward and substitute for it with great alacrity. But there is also the important issue of collaboration, to which many noble Lords, including the noble Lord, Lord Taverne, referred. The studies done by Universities UK showed, if I understood rightly, that every pound, dollar or euro put into research in this country was worth 1.4 times as much if done within a collaborative European programme as if it was done in a purely national programme. That is not to be discounted. The scientific effort being made here and elsewhere in Europe is a crucial part of our national capacity to compete effectively in the decades ahead. It should not be subjected to a game of Russian roulette by politicians who have devoted a good deal more of their time to the humanities than they have to the sciences. I confess that I am one of those.
The noble Lord, Lord Boswell, was quite right to say that the three reports are not partisan, but I am sorry if I offend him by saying that all three are basically building blocks in the remain argument. They all represent compelling arguments why remain is in the national interests. When we meet next in this House, the die will have been cast. If, as I hope, the majority vote to remain, it will be important for the Government to set out and implement an agenda that enables us to play a leading role in a reformed European Union, to which we are committed as a wholehearted and constructive member. If the result goes the other way, some of us may be accused—I expect I shall be—of being bad losers. I would not accept that deploring an outcome that will, irretrievably and in a lasting manner, damage our economy, weaken our security and diminish our role in the world, is worthy of that characterisation.
Baroness Neville-Jones (Con)
My Lords, I contribute to this debate as a member of the Science and Technology Committee, which reported on EU membership and UK science. I declare an interest as a member of the Engineering and Physical Sciences Research Council. I take this opportunity to thank our chairman, the noble Earl, Lord Selborne, for the excellence of his chairmanship, and also thank our committee clerk and advisers for the support that they gave us, which was of the highest quality. As our chairman said, it was not our aim to pronounce on the merits of UK membership from the point of view of UK science—rather, our approach was forensic. Our chairman has laid out our conclusions clearly and cogently, and I am not going to repeat what he has said, or repeat the points of other members of the committee. Instead, I shall try to make a few additional and separate points.
There are many contributors to the debate today and I shall be brief. Before I make a few points that struck me in the course of the committee’s work, I want to say how dismayed and alarmed I am by the way in which the pied pipers of leave are attempting to lead the people of this country into a dark mountain from which we can only emerge reduced and poorer. Pace the noble Lord, Lord Howarth, I see no exhilarating distance in front of us, on that route.
My noble friend Lord Howell made some very pertinent points about how the world is going, and he is quite right about that. He is also quite right to suggest that the change and reform agenda in Europe has a long way to go. But the conclusion that I draw is that we are more likely to see that come about in a form that suits us, and sooner, if we are active from inside the political heart of Europe.
I turn to our report. Hardly surprisingly, we found that the overall picture was not one of unmitigated benefit. As our chairman has said, the biggest complaint was about regulation—not the principle of regulatory harmonisation, which was accepted as being necessary and valuable, but some of the EU regulatory regimes, which have been politically driven, with highly negative results for important things such as genomic science and clinical trials. However, we should not delude ourselves into thinking that we do not contribute sometimes to those outcomes—we do. A credible mechanism for the injection of scientific advice into policy-making in the Commission has at last come about, and that will be a very salutary safeguard, provided that it works well; we have yet to see how effective the scientific advice will be. The European Union is ahead of many member states in doing this—not the UK but many others—and I hope that it will contribute to preventing lobby-driven law-making, particularly in the European Parliament.
The overwhelming weight of witness opinion before us was in support of the value of EU membership to UK science. This positive verdict has, in the last few days, been strongly endorsed by British Nobel Prizewinners. First, the funding coming from EU sources was very highly valued. As other noble Lords have commented, the UK does disproportionately well in getting hold of EU money, and I might add that engineering does particularly well. This country has a history of neglecting engineering—to our cost, I might say—and nearly half the increase in engineering funding has come recently from EU sources. EU funding might not be so important were the UK to put the level of funding into science that our comparators spend. Most countries are increasing their spending on scientific research, but we in the UK are cutting back. We consistently underfund by relevant international standards, so EU money helps to make up a gap that would otherwise be bigger. I would like to see those trends reversed but, in the present state of affairs, it matters to us a great deal that EU money is forthcoming. I do not believe that, were the UK to decide to leave the EU, that gap would be made up by national funding, let alone exceeded. No one before the committee gave any suggestion that EU scientific programmes were in any way misdirected. On the contrary, the general feeling was that they were extremely relevant to the future of big science.
Secondly, the enthusiasm for the scientific network built up and the work done in UK universities as the result of the free flow of scientists from other European countries was very marked. Enriching was the word used. There are many reasons for this, including the fact that the base is the Erasmus programme and students coming to this country for first degrees then stay and do advanced work. Twenty-eight per cent of academic staff in UK universities are non-UK nationals, of whom 16% come from other EU countries, often bringing salary funding with them, which helps our universities, and 60% of the UK’s internationally co-authored papers are with EU partners. That is not an insignificant intellectual and other contribution. Given the high reputation of UK science, it cannot be argued that EU quantity is at the expense of British quality. Something very precious to science in the UK has been built up which has helped to consolidate the leadership we hold. Collaboration is the key to that. I should hate to see it undermined by a sapping of the flow of students and researchers coming from our European neighbours.
Thirdly, our weakness in translational activity and the links between science and business which are so important to innovation showed up in the European story. British business did not respond to the call for evidence and, as our chairman has said, while SMEs evidently value European funding and apply for it, larger British companies do not. Our witness from Siemens commented on this and clearly thought the UK was missing a trick. He is right, so it is doubly important that the Government, in their forthcoming extensive restructuring of UK publicly-funded research and innovation do not mess up the role of Innovate UK. That, however, is a debate for another day.
Lord Judd (Lab)
My Lords, like others, I thank most warmly the members of the committees whose reports we are discussing. I particularly thank the leadership of those committees. The noble Lord, Lord Boswell, made a fine, outstanding, balanced and telling introduction to this debate. I have been privileged to serve on a Select Committee under the chairmanship of the noble Earl, Lord Selborne. I remember and treasure that experience because he was a particularly effective chair, not least because of his open-mindedness and his firm views about where the committee should be going.
Those of us who come down in favour of remaining, as I heavily do, must not run away from the realities that surround us in society as a whole. There are real anxieties, however well or ill-founded, among the people of Britain. I shall pick two which in our future in the Union, which I hope we will have, we must take very seriously. The first is not so often expressed, but I am certain it is there. It is resentment at what people see as elitism in the working of the community, an arrogant bureaucracy which is, for many people, underlined by its very expertise. They do not feel involved in that expertise or relate to it, and therefore it can come across, however unfortunately and however far it may not be true, as a kind of institutional arrogance. What is more, those of us who have been caught up—and I was a Minister working on European affairs way back in the 1970s—become part of that in club. We will have to tackle that issue resolutely in our future in the Union. It is unfortunate that we ever moved away from indirectly elected assemblies, as they then were, because with the large impersonal Parliament we have, there is a tendency for it to be remote from the people, not to have to take as seriously as it should the real issues and anxieties being debated in member countries and their Parliaments and to breed national Parliaments that do not have a feeling of responsibility for European success. From that standpoint, it was sad that we did not remain with an indirectly elected assembly.
The other big issue has hardly been mentioned in today’s debate. It is immigration. I live in Cumbria. All the social surveys done in Cumbia find that it is one of, if not the, counties with the smallest amount of immigration. They also find that it is one of the counties with the highest rate of anxiety and prejudice about immigration. That is interesting. National Parliaments and Governments have been responsible for greatly neglecting the realities of how immigration works. We have not been giving priority to the housing, schools, hospitals and infrastructure of the areas in which the majority of immigrants settle, and therefore existing issues of deprivation, the unequal provision of services and the rest become underlined. We should also help with positive social policies on integration and on how people can be helped with language and, let us face it, behaviour to become part of the traditions and realities of the society in which they are living.
If we are speaking of immigration, the point that must be made very firmly is that anything we are encountering and the pressures we see today are small compared to what is going to happen. It is certain that with climate change and the other issues, not least the associated political problems that will arise from them, we will see the issue of immigration growing all the time. Let us remember that countries such as Lebanon and Jordan already have migrant populations that almost equal the size of the population of the country concerned. We will have challenges ahead.
I have said before in this House that I am not ashamed of putting this as a father and grandfather, although I think it is true for our generation too. The overriding reality is that whether we like it or not or may wish it were not the case—I happen to enjoy it—we are part of a totally interdependent world. That cannot be escaped. It is true economically, in terms of security and increasingly in terms of health and in almost every dimension of life that one can think of. The challenge to us as politicians in various countries is to find a way of meeting that challenge of interdependence and a means of governance that can make a success of an interdependent community rather than turning into a frightened, paralysed international society. What worries me is that within so much of the Brexit debate there are—I am sorry to put this bluntly—all the manifestations of insecurity and inadequacy.
Do we want a Britain that is self-confident, outward-looking, sees and accepts the challenges and says, “It’s exciting and fulfilling to meet those challenges”, or do we want an introspective society frightened of the world and becoming, in its language and in other ways, increasingly aggressive in its defensiveness—a kind of raft floating out into the Atlantic, almost sinking under the weight of the missiles, defence systems and bureaucracies that will then become necessary? I want to belong, and I want my children to be able to belong, to a self-confident, outward-looking Britain that sees itself as part of the world, sees its challenges and says, “We are determined to play our full part in meeting those”. Of course Europe is not the total solution—after all, the size of the issues we face is global—but it is a very good starting point for playing a full part, together in Europe, in the wider world.
Lord Watson of Richmond (LD)
My Lords, I declare an interest as high steward of Cambridge University. In that context, I was particularly delighted by the remarks of my noble friend Lord Taverne. I endorse the harsh reality that the pre-eminence of our science, and the pre-eminence of Cambridge University in particular in science, would certainly be damaged by exit from the EU. It is simply a fact.
With every day that passes in this European referendum, I am seized by the folly of the enterprise. It has been born of divisions within the Conservative Party, and its outcome, whatever it may be, will certainly not resolve them. Thus far the referendum has in fact exacerbated them. It started before the last general election, essentially as a tactic to outmanoeuvre UKIP and Eurosceptic activists in Tory constituencies. As such, it was rendered pointless by the outcome of that election—but the die was cast, the commitment was made and the outcome can deliver one of only two verdicts on the Prime Minister: he will go down in history either as the Prime Minister who took us out of Europe by accident and miscalculation or as a kind of Houdini who, as with the Scottish referendum, at the last moment escaped fate with a final flourish.
Is “folly” the appropriate description of this enterprise? I believe so. It is hard to describe it as anything else when Boris Johnson, the most conspicuous contender for the hollow crown, thinks that the prize justifies questioning the motives of President Obama’s interventions on the grounds of his part-Kenyan ancestry, or feels persuaded to claim that the European Union is an attempt to impose Hitlerian unity on Europe by other means. These are surely the cadences of folly.
If the genesis of this referendum lies in the long-festering blue-on-blue clash within the Conservative Party, it has now enveloped all parties, all parts of the United Kingdom, all the nations of the European Union and the transatlantic relationship itself. The principal consequence of the referendum is division—indeed, a welter of different divisions that collectively and cumulatively jeopardise to a real extent the unity of the people and indeed of our society. These divisions pull us apart, as an authoritative analysis published by the Financial Times on 2 June demonstrated all too painfully.
There is the evident division between majority and minority attitudes in London, and between London and many other parts of England. Then there is the division between sentiment in Scotland and England and, possibly, between opinion in England and Wales. Within the framework of devolution and the evolution of separate parliaments, there is the promise of further serious trouble ahead. Then there are the divergences between young and old, between better educated and those less fortunate, and between those more prosperous and those less so. Above all there is a psychological divide, as has been referred to in the debate, between optimism and pessimism.
Both sides can and do claim self-belief, and I believe that both share patriotism. But the prominence of immigration in this referendum shines a harsh and revealing light on the whole enterprise. The division here is more than a row about statistics; it is a thermometer taking the temperature of who we think we are. Of course, this is not unique to us: the Americans are torn by the issue of immigration and it lies at the heart of Europe’s crisis. However, is our reaction to reject international interdependence, build walls and draw up drawbridges? If it is, we are indeed at risk.
There is of course nothing wrong in facing up to fundamental issues, even if so often they are deeply divisive and painful. It is the process of democracy. But we should remain increasingly vigilant that referenda are not allowed to replace the power and responsibility of Parliament. Here again, folly lurks in the wings. The public have been encouraged by both sides to see the referendum as decisive, and historically it may prove to be so. But if decisiveness is assumed to deliver instant or even rapid change, the public will have been misled and indeed deceived. The excellent and worrying report of the European Union Committee on the process of withdrawing from the EU contains judgments that make a mockery of the expectations engendered by the referendum. First, as paragraph 15 says:
“There is nothing in Article 50 formally to prevent a Member State from reversing its decision to withdraw in the course of the withdrawal negotiations”.
Secondly, paragraphs 31 and 34 of the report state that if a majority on 23 June is for Brexit, the United Kingdom will need to negotiate two treaties, one for withdrawal and, in parallel, one to establish our future relationship with the European Union, including terms of access to the single market. Given that the single market is where half our exports go and that it is vital for attracting inward investment from countries such as the States, India and South Korea, the second, parallel negotiation is vital to whatever Government negotiate on our behalf. The parallel negotiation will be tortuous and tense. As one witness to the committee said, the United Kingdom will be presented with “almost unimaginable … long-term ghastliness”, given the legal complications involved.
I shall cut to the point. The parallel negotiations, let alone those involving EU legislation embedded in Scottish legislation, may well outlast the life of this Parliament and indeed of this Government. Instant resolution is a myth; it is not going to happen, and to appear to offer it is folly. One matter is clear: this perilous and hugely demanding series of negotiations that Brexit must involve requires a Government who are united and command a majority in Parliament. For this to be achieved may require, whatever the constitutional difficulties, a further general election.
I have spent a large part of the last two years writing a book about Winston Churchill in 1946. During that period he made two very famous speeches. One was at Fulton, Missouri, where he revealed to the American public that Joe Stalin was not good old Uncle Joe at all but a tyrant determined to extend his control over the rest of Europe, and he appealed to the Americans to come to Europe’s defence—which, thank God, they subsequently did. If we ever wonder whether Mr Obama has a right to offer his opinion, surely what the Americans did then and in the post-war period justifies it.
Churchill made the second speech six months later in Zurich—the so-called “let Europe arise!” speech. In it, he said to his audience, “I am going to startle you”—and he did, because what he proposed was a kind of united states of Europe which would be led by a partnership between France and Germany. He did not propose that we should join it—it was not there—but he said that we should unequivocally support it, and he was absolutely right. That second speech had as much impact as the first. The first, arguably, kicked off the process that led eventually to NATO and the defence of Berlin. The second definitely kicked off the process that led to Marshall aid and eventually to the European Coal and Steel Community.
I have been asked by many people—it has been discussed in the media a great deal—what Churchill’s view would have been. Of course, we do not know, but there is something that we should remember. Churchill advocated and supported Franco-German unity and a kind of united states of Europe because he believed that Britain’s place in the world turned decisively on being at the centre of three great circles of influence: the English-speaking world outside the United States, the Commonwealth; the United States; and Europe. He also believed that if we allowed ourselves to be pushed out, or took ourselves out, of any one of those three circles, we would be critically damaged and diminished in the remaining two. If we do that now with Brexit, I believe that that will again be the case.
Lord Low of Dalston (CB)
My Lords, as I listened to the wonderful speeches of the noble Lords, Lord Jay, Lord Cormack and Lord Bilimoria—picking just three out of what could have been a much larger number; I could certainly have included the speech from the noble Lord, Lord Watson, which we have just heard—I found myself lamenting with a sinking feeling the fact that we did not hear more of them on the airwaves than Messrs Johnson and Gove and the other mendacious purveyors of snake oil, to whom we are so relentlessly subjected.
We should be grateful to the noble Lord, Lord Boswell, and his committee for making clear, particularly in their report on the process of withdrawing from the EU, a number of things that will be of pressing concern if the British people vote to leave the European Union. However, while the noble Lord’s committee has done us a signal service in helping to get to the bottom of these questions, I hope that they will remain purely academic, because I hope that the British people will not vote to withdraw from the European Union.
I say that as a disabled person because it is clear to me that disabled people will get a much better deal by remaining within the European Union. I therefore propose to come at this from a slightly different—I hope not too self-regarding—angle. In so far as it is self-regarding, I declare my interest as a disabled person, but I venture to think that what I say about the situation of disabled people could be said, mutatis mutandis, about numerous other specialised constituencies.
As president of the European Blind Union between 2003 and 2011, I was involved in advocating for disabled people’s rights at a European level. On the basis of that experience, I would argue that we were able to achieve a great deal for disabled people using EU mechanisms that we could not achieve at a national level. I said something about this in the debate on the humble Address three weeks ago, but I am even clearer about it now, having attended a seminar last week where disabled people considered whether they would be better off in or out of the EU. They were in no doubt that they would be better off in.
I could illustrate that by reference to a number of areas where the EU has competence to legislate, but I will limit myself to the single market, where disabled people probably have most to gain from remaining within the EU, and will take as examples just three pieces of legislation or proposed legislation.
In 2014, disabled people successfully influenced the revision of the EU’s public procurement directive. Accessibility is now a mandatory criterion for all public tenders above a certain financial threshold. According to the European Commission, public procurement accounts for 14% of the EU’s GDP. At home, according to a 2015 House of Commons briefing paper, in 2013-14 the UK public sector spent a total of £242 billion on the procurement of goods and services—33% of public sector spending. In sectors such as energy, transport, waste management, social protection and the provision of health and education services, public authorities are the main buyers, so public procurement regulations offer a substantial lever to improve accessibility and bring about change, just as they did in the United States many years ago.
Turning to accessibility of the world wide web, despite initial strong resistance from national Governments, we are now on course to have a European directive that will ensure the accessibility of all public sector bodies’ websites. It will cover their mobile applications and include an enforcement mechanism. This will ensure that disabled citizens can access e-government services right across Europe. In conjunction with the previously mentioned new rules on public procurement, this directive should ultimately ensure that industry delivers digital solutions that are accessible to all. We already have European standards for accessible information and communications technology—ICT—but technology is moving very fast in this area and it is good to have this new legislation to ensure that disabled people are able to keep up.
Finally, on accessibility of goods and services, the European Commission has now tabled a proposal for a directive that would harmonise accessibility requirements across the EU on a wide range of goods and services, including smartphones, computers, ticket machines, ATMs, retailers’ websites, banking, e-books and associated hardware, such as Amazon’s Kindle, as well as audio-visual media services and related equipment. Travel-related information is also included. Items not complying with the standards will not be able to be brought to market.
In the UK, neither the Disability Discrimination Act nor the Equality Act applies to manufacturers and manufactured goods. At first sight this is unfortunate, because that is where many accessibility barriers are built into the things that we need to use to live independently, to keep in touch with friends and family and generally to be part of the world in the same way as everybody else. But what initially looks like a major defect in disability legislation may ultimately be for the best. A harmonised market of 500 million EU consumers is far more attractive to industry than the much smaller UK market, and a common set of accessibility standards will drive innovation and encourage investment. This proposal does not include everything that one would want—it does not include white goods such as washing machines or microwaves—but it does provide a very good basis for legislative change.
Disabled people in the UK and across Europe have much to gain from the proposal for a European Accessibility Act, which is probably the most important piece of disability legislation yet to come out of Europe. In the debate on the humble Address, I spoke of one’s general philosophical orientation being more important than what the noble Baroness, Lady Ludford, who will be speaking after me, more aptly termed “bean counting”. What I omitted to say was that, whereas the UK is often spoken of as punching above its weight, I have absolutely no doubt that, if we were to withdraw from the European Union, we would soon find ourselves punching well below our weight.
Baroness Ludford (LD)
My Lords, as a fully signed-up member of the Boswell fan club, I was very impressed not only by the report but by its introduction today from the noble Lord, Lord Boswell. It has been very useful to have the three reports melded into one debate. I was a little uncertain about that originally, but I have been proved wrong, not least because of the reform and withdrawal elements being brought together but also because we have had a very strong contribution on the scientific work that is supported by the European Union. I agree with the noble Lord, Lord Hannay, that, as an arts person, the more I learn about science, the better.
It has been amply demonstrated that the leave campaign has no feasible post-Brexit plan: it would be a leap in the dark, as the noble Lord, Lord Liddle, said. Others have also emphasised the dangers of a chaotic withdrawal in the context of a lack of trust, as my noble friends Lady Falkner and Lady Smith said. The noble Lord, Lord Jay, reminded us that the negotiations would be of a hardball nature, with up to 10 years of fraught discussions. The noble Lord, Lord Howell, recalled that we are not Canada or Japan. We are in Europe, and so we cannot use those models to guide us.
To the noble Lord, Lord Pearson, I say that what the remain campaign and most people in this debate are talking about is Project Reality, not Project Fear. It is about what will happen if, due to what I and others would regard as a very bad decision, this country was to decide on Thursday next week to leave the European Union and follow the Pied Pipers of the leave campaign—a phrase which I have pinched, and will probably use again, from the noble Baroness, Lady Neville-Jones.
I was impressed by the recent entry of former Prime Minister Gordon Brown into the heat of the campaign. He has not traditionally been associated with passion but more with post-neoclassical endogenous growth theory. However, he has come up trumps—not Trump, I hasten to add—with his video filmed in the ruins of Coventry Cathedral. I saw one reference to that video having had 2 million views, and that was a day or so ago.
The Select Committee’s report noted how the Government’s approach had downplayed any visionary or emotional element in their proposals for the future of the EU, focusing almost exclusively on pragmatic and transactional arguments—although that has improved in recent months. Of course, pragmatic arguments are essential, but a dose of what the noble Lord, Lord Boswell, called “feelings and ideals” has the advantage of putting everything in context, set against the past and looking ahead to the future. The noble Lord, Lord Browne, referred to his family history to illustrate the inspiration for the EU. That resonates, and is something that has not come out enough in the referendum campaign. I was at a meeting last night, and the biggest applause of the evening was when I got a bit emotional about the 70 years of peace that we have had.
It is not just vision and emotion that need to be taken into account; we need also to look at the factors beyond the economic, important as those are. The geopolitical and strategic implications of the UK’s exit from the EU are considerable, as is touched on in the EU Committee’s report, and would mean a hit to our security through the loss of key EU co-operation instruments and a loss of diplomatic and political influence.
Following a short break earlier, I came back to the Chamber in the middle of the speech by the noble Lord, Lord Howarth. He enumerated the very unpleasant political forces that are abroad on the continent. We are pretty disputatious as a nation, but we are largely free from the nastiest of the political elements. The injection of our history and stability is much needed in Europe. A couple of days ago, the Financial Times commentator Wolfgang Münchau said that,
“whatever the referendum’s outcome, the chances of the UK playing an active role in shaping Europe’s future are minimal”.
I hope that we will be able to prove him wrong.
I also hope that, in just over a year’s time, the UK will be about to assume the presidency of the EU as a leading, not a leaving, member—in the words of my noble friend Lord Maclennan, echoed by the noble Lord, Lord Hannay. I hope that we will be able to commit to making the EU more streamlined, more effective and possessing of greater legitimacy. I believe that the EU is democratic, with directly elected MEPs and elected Ministers in the Council. However, what we have is a legitimacy deficit. As the noble Lord, Lord Judd, mentioned, we can bring confidence and our outward-looking approach to improve the European Union.
The remain side is not complacent about the current state of the EU, which the noble Lord, Lord Howell suggested. However, he is absolutely right that we have to prepare the EU for the storms to come. It must lift its eyes to the horizon and not be introverted. We can contribute so much to making the EU stronger in addressing the many challenges that there are. For example, we can contribute to making Europe more competitive, with a growing economy, and more ambitious in trade deals. We can also contribute to a Europe that distributes more fairly the gains from globalisation, as the noble Baroness, Lady Armstrong, remarked.
The noble Lord, Lord Low, spoke very interestingly about the contribution of the EU to accessibility criteria for goods and services. That is essential. We all know what we need to compete in a single market, and there are digital, energy and financial services dimensions.
I absolutely agree with the noble Lord, Lord Boswell, that we have wasted the enormous asset that was the balance of competences review. No other member state has done anything so comprehensive. So please, after next Thursday, when, as I sincerely hope, we vote to remain, let us use the information and contributions in that review. It is disrespectful to everyone who did so much work in contributing to and writing up the report not to draw on that exercise. It would help the EU get smart regulation. Let us build the quality, not the width.
The noble Earl, Lord Selborne, strongly emphasised the importance of a strong regulatory framework in the EU as providing a good basis for scientific collaboration. He also highlighted the things that had not worked so well. However, I am glad that, for example, in the clinical trials directive, the Brussels machine did listen and improve that.
My noble friend Lady Sharp made interesting remarks on the bureaucracy around grants. There is a bit of a “cannot win” dilemma for the European Commission. With the Court of Auditors breathing down its neck, maybe 30-page forms are necessary to be able to audit and track the funds. What I would like to see is Finance Ministers and our own Chancellor sign declarations to say that all money spent in their member states is properly spent. Funnily enough, they never want to do that, because they quite like Brussels being blamed.
So many speakers—too many for me to name them all—emphasised how Brexit would severely hit our universities and scientific collaboration, which has been such a success story. That feeds into the reform of the European budget. Big progress has been made, but more needs to be done with the continued switch to innovation, research and infrastructure. We can do that only if we are in there arguing for those changes.
Also, of course, we are very aware of our unique contribution in security and counterterrorism. The UK is a crucial partner. Having the current director of Europol and the former president of Eurojust, the network of prosecutors, is, I think, a tribute to our first-tier legal and policing status. On defence, foreign policy and the European neighbourhood, we need to capitalise on what my noble friend Lord Watson called our “three circles of engagement”—Europe, the Commonwealth and the transatlantic relationship. There is no country in the world that has the networking assets that we have. We are a sort of Tatler of the diplomatic and political world.
I shall say a word on migration, which is an important part of this campaign—and not only external migration, where we must work with the rest of the EU to get a credible policy of migration management, whose challenge is only going to grow, coupled with development aid, as the noble Lord, Lord Hastings, said. On intra-EU free movement, we have had very helpful judgments from the European Court of Justice, including one just yesterday about the payment of child benefit, which have confirmed that free movement is the right to move for a job. It always was, but there has been clarification and firming up of the rules, including through the Prime Minister’s renegotiation. We need to do two tough things. One is making sure that public resources are targeted at areas in this country which are under migration pressure, and being more nimble in switching the money. The other is the investment in training and skills for our own young people so that employers do not automatically put advertisements in Polish newspapers.
Lastly, I shall say a word about our engagement with the EU institutions. It will not come as a surprise, perhaps, to the noble Lord, Lord Judd, that I, as a former Member of the European Parliament, do not agree with his regret regarding a directly elected European Parliament. We certainly need much better partnership between the European Parliament and national parliaments. Perhaps one little step that we could help achieve would be to give MEPs a pass for the Palace of Westminster. It is absurd that we regard MEPs as some kind of foreign body that should not be allowed on the premises. The stress in the reform report on allowing national parliaments a positive and proactive role—a green-card role, not just a reactive and negative red-card role—is very important.
Many remarks have been made, including by the noble Lord, Lord Browne, about the importance of having British officials in European institutions. I think that there are two things the Government could do. They could revive and beef up the fast-stream program in the Civil Service to prepare people for the “concours”, or competition. Also, as far as I know, they have not reversed the much-regretted decision of some years ago to cease funding scholarships at the College of Europe in Bruges—you could call it the Eton of Brussels—which helps provide a channel into the EU institutions.
We need to be careful what we wish for in a “flexible, multi-layered, diverse Europe”. That is fine, as long as it does not become a pick ‘n’ mix, where we end up losing out. Therefore, I end on the warning from Manfred Weber, the present leader of the EPP group, the biggest group in the European Parliament, who sounded a note of caution about British exceptionalism. We are not in the euro; we are not in Schengen; and I wish we had not been half-hearted about justice and home affairs co-operation—and thank you to everybody in this Chamber who worked so hard to get us opted back into the 35 measures. We need to be very careful that we do not undermine the voice of British Members of the European Parliament in getting senior positions, such as chair of the Committee on Economic and Monetary Affairs, which my colleague Sharon Bowles got in 2009. We should not undermine either the chance of that being repeated for the chair of the Committee on Civil Liberties, Justice and Home Affairs or our weight in the Council. I would say yes, perhaps, to a kind of special arrangement for the UK, because if that goes too far we will actually lose the leading voice that many of us here want.
Lord Collins of Highbury (Lab)
My Lords, I, too, thank your Lordships’ EU Committee for its excellent reports, and the noble Lord, Lord Boswell. The reports have focused on key issues arising from the Government’s negotiations and have addressed that vital question of plan B. Since their publication, events have overtaken us. With just seven days left, the shape of the campaign has been pretty well determined. As the committee demanded of the Government, I shall today focus on a positive vision for a reformed EU. However, there is no disguising what the committee highlighted and has been confirmed by the IMF, the OECD, the Bank of England and many economists a vote leave will lead to a lengthy period of uncertainty while any future relationship with the EU is concluded, causing a serious shock to the UK economy.
The Brexit campaign cannot sweep away the effects of this period of limbo, as my noble friend Lord Liddle called it, nor can it dodge any longer the questions about what alternatives to membership may look like. Boris Johnson and Nigel Farage will take us back to a future reminiscent of the 1980s, when unemployment was said to be a “price worth paying” and things such as paid leave, health and safety and equality rights were considered red tape holding back progress.
However, as we have heard in this debate, the EU is not just about economic security; it is about a vision of a continent where co-operation overcomes conflict. As a nation, we have a moral and practical interest in preventing conflict, stopping terrorism, supporting the poorest in the world and halting climate change. Britain leads in Europe on these issues and, in turn, Europe helps to lead the world. Those who advocate that Britain should turn its back on the European Union have a very heavy responsibility to prove their case.
As the committee reminded us, the Government were clear throughout the negotiations that their support for continuing EU membership would depend on reaching a successful outcome. Yet the referendum question makes no reference to the “new settlement”. The simple truth is that this is not a referendum on David Cameron’s reforms; it is on weighing up the benefits of membership of the EU overall.
Nor is reform just about what Britain asks for now, as we have heard in this debate; it is a constant process of trying to make Europe more effective in generating jobs, investment, growth and security, and our influence in the world. Labour has an alternative agenda for progressive change in the EU: to strengthen workers’ rights in a real social Europe; to put jobs and sustainable growth at the heart of European economic policy; to democratise EU institutions; and to halt the pressure to privatise public services. It is a vision of a real social Europe, one which protects the “going rate” for skilled workers, prevents the undercutting of wages and directs EU funding to places where the pressures are greatest.
As Jeremy Corbyn has argued, the only way to secure these changes will be to remain in the EU. I am confident that the public will trust the Labour movement to stand up for working people rather than the likes of Nigel Farage or Boris Johnson. As we have read in the reports and heard in the debate, what progress we have made on reform will be lost if we vote to leave. Instead, we will be left with just two years in which to negotiate not only a new trading relationship with the European Union but also with the 53 other countries with which we currently have trade agreements because we are members of the European Union. We would be entering a negotiating process where EU member states would retain significant control despite the Commission having responsibility for its conduct. As the committee pointed out, there is the potential for some countries vetoing certain elements of the agreement to secure better deals on others. That is what negotiation is about, and if you think that can be conducted quickly, you are living on a different planet from me. In effect, nothing would be agreed until everything was agreed.
One of the most important aspects of the withdrawal negotiations would be determining the acquired rights of the 2 million or so UK citizens living in other member states and, equally, of EU citizens living in the UK. As my noble friend Lord Judd said, for many people, immigration is the issue in this referendum. They feel that our country has become too crowded, that our services are under pressure, that we are losing our identity and that leaving the European Union would restore control over these things. We have an obligation to be honest with one another about the nature of the world in which we live and the changes that have happened—and will happen whichever way people vote on 23 June. Immigration into Britain will continue whether we stay or go, as the leave campaign has now admitted. Immigration brings challenges to the UK, which is why Jeremy Corbyn and Andy Burnham said last week that we want to see EU protections for people’s wages and a special fund to help the most affected communities. But being in Europe helps Britain to control immigration so that it works for us. For example, it helped us to persuade France to move Britain’s border from Dover to Calais. Leaving would put that at risk.
Anyone who thinks that voting leave will solve problems—such as the shortage of housing and the crisis in the NHS—in time will be bitterly disappointed. As we have heard in this debate, failure to prioritise those issues is the fault of government, not Europe.
What is plan B if the UK votes to leave? Will the Minister address how the Government plan to deal with the fundamental issues raised by the committee? What alternative arrangements are considered for the UK’s Council presidency in the second half of 2017? What oversight will the UK Parliament have over the negotiations on withdrawal and the new relationship beyond existing ratification procedures? What is the Minister’s assessment of the timeframe to disentangle EU law from domestic law and how this may impact on the devolved nations? Does the Minister agree that it may be necessary in the national interest to maintain a significant amount of EU law in force in national law?
As we heard from the noble Earl, Lord Selborne, the excellent report by our Science and Technology Committee makes a number of interesting points about the situation facing UK science if there were to be a Brexit. For example, it stresses that the UK is one of the world’s leading scientific nations, in terms of both fundamental and applied research, and that we have retained this leading position in the face of growing competition from around the world. It also says that the overwhelming balance of opinion made known to the committee from the UK science community valued greatly the UK’s membership of the European Union.
That point was made effectively by Sir Paul Nurse in his article in the current New Statesman edited by Gordon Brown—I strongly recommend that issue to all noble Lords. Sir Paul highlighted the recent survey in the science journal Nature, which showed that 83% of UK scientists want Britain to stay in the EU—a much higher proportion than in the general population. That is because science flourishes in environments that pool intelligence, minimise barriers and are open to exchange and collaboration. The EU helps to provide such an environment, and scientists value it. There is no doubt that some will see no problems if the UK leaves the EU, but as Sir Paul says,
“the great majority of scientists”,
support remain. He goes on:
“In contrast, hardly any accomplished scientists are arguing that leaving the EU would be good for UK science”.
Does the Minister agree with Sir Paul when he says that superb science is one of the UK’s biggest assets, one that makes all our lives better? Over recent decades, the EU has played a critical role in helping UK science. What is good for science is good for the UK, and what is good for UK science is staying in the European Union.
In conclusion, I turn to my noble friend Lord Howarth and quote what I read in yesterday’s FT, which summed up the position in which we now find ourselves. It states that,
“the continent’s present troubles should serve as a reminder of its capacity for self-harm. The rise of populism, drawing from the well of economic and social discontent, carries disturbing echoes of the 1930s. A confident Britain would see this as a moment to lead rather than leave”.
Lord Pearson of Rannoch
Will the noble Lord explain the difference between populism and democracy?
Lord Collins of Highbury
Democracy is David Cameron and populism is Boris—what is his name?—Johnson.
The Minister of State, Ministry of Justice (Lord Faulks) (Con)
My Lords, this has been a fascinating debate. It has covered an enormous amount of ground and the House has displayed great expertise and, indeed, passion. I do not exclude from that observation, despite the fact that they were very much in the minority, the noble Lords, Lord Howarth and Lord Pearson.
I must say that I had no expectation of a reference in the debate to PG Wodehouse, which was provided by the noble Lord, Lord Hennessy, in his pertinent and witty speech. I am a little concerned that the great man might have supported Brexit, however. We even had an excursion into fairy tales. I got a little lost between the second bowl of porridge and the disadvantages of having a mistress, but, broadly speaking, I agreed with the noble Baroness.
I would particularly like to congratulate the noble Lord, Lord Boswell, chair of the EU Select Committee, and my noble friend Lord Selborne on their chairmanship of the committees which have produced the three reports before us today, and to record the Government’s appreciation of the work of the respective committees. Naturally, I understand that the committees wished to have their reports debated before the date of the referendum, notwithstanding the fact that the government response will not be available until after 23 June. I do not want to pre-empt the detailed response that will be provided. However, on this final day of business, I would like to take this opportunity to set out the Government’s position on the referendum.
First, I want to restate what my right honourable friend the Prime Minister achieved in his renegotiation. This is also set out in the government paper The Best of Both Worlds: the United Kingdom’s Special Status in a Reformed European Union. Last year, the Prime Minister set out to address four key areas in the EU where the UK wanted to see reform, and at February’s European Council he reached a deal that delivered on all those areas. The noble Lords, Lord Boswell and Lord Jay, and the noble Baroness, Lady Falkner, suggested that insufficient attention had been paid to the settlement. I think they were right. On economic governance, he obtained permanent protection for the pound and our right to keep it, as well as guarantees that UK taxpayers will never be required to bail out the eurozone. We have protected the UK’s rights as a country within the single market, but outside the eurozone, to keep our economy and financial systems secure and protect UK businesses from unfair discrimination.
On competitiveness, my right honourable friend secured from the EU and all member states commitments to reform the EU in line with the vision for a more globally competitive Europe which we and others share. The EU recognised the need to act to,
“promote a climate of entrepreneurship and job creation, invest and equip our economies for the future, facilitate international trade, and make the Union a more attractive partner”.
The Prime Minister also secured a clear commitment to,
“doing more to reduce the overall burden of EU regulation, especially on SMEs and micro enterprises”,
which account for 95% of all UK firms. There will be a new focus on further extending the single market to help bring down the remaining barriers to trade within the EU, particularly in key areas such as services, energy and digital.
Our new settlement has secured a clear commitment that the EU will pursue an active and ambitious trade policy with the world’s most dynamic economies, prioritising the US, Japan and other important partners in the Asia-Pacific region and Latin America to reduce or eliminate the tariff and regulatory barriers faced by UK companies in large and growing non-EU markets.
The UK benefits from the EU’s greater economic leverage, which has allowed it to negotiate advantageous free trade agreements with more than 50 other countries—agreements with terms that are far more favourable than any we could have negotiated on our own because of the combined negotiating muscle of a marketplace that is five times greater than our own. Concluding all the trade deals already under way could ultimately be worth in total more than £20 billion a year to the United Kingdom’s GDP. Once these deals are completed, around three-quarters of UK exports to non-EU countries will be covered by EU-negotiated free trade agreements.
On sovereignty, the Prime Minister secured formal agreement that the UK will not be part of ever-closer union, that it is not committed to further political integration, and that the treaties will be changed to that effect. We will also have new powers to block or remove unwanted European laws. Until now, there were insufficient means of stopping the EU from passing laws that should be left to individual countries. There was no way of introducing a “downward ratchet” to EU lawmaking, as the Foreign Secretary and others have long demanded. This has led to unnecessary regulation and interference. However, under the new settlement, the European Commission has committed to,
“establish a mechanism to review the body of existing EU legislation for its compliance with the principle of subsidiarity and proportionality”.
This mechanism will ensure that the EU acts only where it really needs to do so. The European Commission will report its findings to the Council of Ministers every year. If Ministers decide that the EU has gone further than necessary, they will be able to ask the European Commission to withdraw or amend the legislation in question.
Finally, on welfare and migration, the deal secured new powers to tackle the abuse of free movement and reduce the draw of our benefits system. This will help to meet our aim of reducing immigration, by making sure that new arrivals from the EU cannot claim full benefits for up to four years.
The decision of the Heads of State or Government agreed at the February European Council is legally binding and irreversible. It has been registered with the United Nations as an international treaty. The February European Council conclusions and the texts of the deal agreed at that Council clearly set out the legally binding nature of the deal. This was briefly an argument mounted by the supporters of Brexit, that it was not binding, but I think that their argument has largely evaporated. It was in any event supported by the legal opinions of both the Council Legal Service and Sir Alan Dashwood QC. The deal is irreversible because it can be amended or revoked only if all member states, including the United Kingdom, agree unanimously.
The Prime Minister has, however, made it clear that more reform is needed; Europe needs to improve. The task of reforming the European Union does not end with this agreement, a point made in his characteristically thoughtful way by my noble friend Lord Howell. But as I have set out, our new settlement will give the United Kingdom a special status within the EU that no arrangement outside the EU could match. As the Government have previously stated, the UK’s national interest will be best served by our country remaining part of a reformed EU. Membership of this reformed EU offers opportunity and security for jobs, investment and doing business, as well as for tackling crime and dealing with global issues such as climate change and terrorism. We also heard from the noble Lord, Lord Low, about the advantages to those who are disabled. It offers us certainty compared with years of disruption and the uncertainty of leaving for an unknown destination outside.
Ultimately it is of course for the British people to decide. The Government have a democratic duty to give effect to the electorate’s decision. Should the majority vote to leave the EU, we would start the Article 50 process. As set out in the Government’s own analysis, The Process for Withdrawing from the European Union, the EU treaties would continue to apply to the UK until the Article 50 agreement had entered into force, or for two years if no agreement had been reached and no extension to the two-year period had been granted. A request for an extension could be granted only with the unanimous agreement of the remaining member states, a point that is either ignored or not sufficiently understood by those who want us to leave. Perhaps I may refer noble Lords to Chapter 3 of the document, which makes this point:
“An extension request would provide opportunities for any Member State to try to extract a concession from the UK”,
which is hardly a strong negotiating position. Article 50 does not specify how much the withdrawal agreement itself should say about the future relationship between the EU and the departing member state. Any sort of detailed relationship would have to be negotiated separately from the withdrawal agreement using the detailed processes set out in the EU treaties. Article 50 does not specify whether these negotiations should be simultaneous or consecutive. This would be a matter for negotiation.
The use of Article 50 is unprecedented. Consequently, there is a great deal of uncertainty about how it would work. It would be a complex negotiation requiring the involvement of all 27 remaining EU member states and the European Commission. What is certain is that the UK’s withdrawal from the EU would mean unravelling all the rights and obligations that the UK has acquired since accession, a veritable cat’s cradle, as referred to by the noble Lord, Lord Hannay, ranging from free access to the single market, to structural funds for poorer regions of the United Kingdom, to joint action on sanctions. My noble friend Lord Caithness emphasised the complexity of the process and he was right to do so. Sir David Edward QC, a distinguished lawyer, said in evidence to the European Union Committee:
“The long-term ghastliness of the legal complications is almost unimaginable”.
The noble Lord, Lord Watson, also referred to that.
We would also need to negotiate a new relationship with Europe outside the EU. The Government have previously set out their view that leaving the EU would begin a process that could lead to a decade or more of uncertainty for Britain and for the economy. But what about the alternatives: what would this new relationship look like? The Government looked at a number of options in the paper entitled Alternatives to Membership: Possible Models for the UK. These included Norway, Canada, Turkey and a World Trade Organisation-only relationship. The paper summarises that:
“These models offer different balances in terms of advantages, obligations and influence … the precedents clearly indicate that we would need to make a number of trade-offs”.
In return for full access to the EU’s free trade single market in key UK industries, we would have to accept the free movement of people. Access to the single market would require us to implement its rules, but the UK would no longer have a vote on those rules. There is also no guarantee that we could fully replicate our existing co-operation in other areas such as cross-border action against criminals.
Lord Pearson of Rannoch
Before the noble Lord leaves the trade aspects, is he going to answer the points I put to him? For instance, they have two and a half million more jobs selling things to us than we do to them. Taking as I did the specific example of our motor trade, given that they send us 2.4 cars for every car we send them, and they have 64% of our market, are the noble Lord and the Government really saying that the eurocrats in Brussels would actually try to impose a tariff on that? Is it not perfectly obvious to anyone used to international trade that all this would continue as it does now?
Lord Faulks
The noble Lord is very confident about the future. I do not share his confidence. Of course trade will continue in one guise or another, but how can we be certain that the trade arrangements will be exactly as he would want them, given all the uncertainty that exists?
Lord Pearson of Rannoch
I am merely saying that they would continue as they are.
Lord Faulks
I do not think there is any guarantee of that. I will make some progress, if I may.
Full access to the single market would require us to continue to contribute to the EU’s programmes and budget. An approach based on a free trade agreement would not come with the same level of obligations, but would mean that UK companies had reduced access to the single market in key sectors such as services—almost 80% of the United Kingdom economy—and would face higher costs. We would lose our preferential access to 53 markets outside the EU with which the EU has free trade agreements. This would take years to renegotiate, with no guarantee that the UK would obtain terms as good as those we enjoy today. In order to maintain the rights of UK citizens living, working and travelling in other EU countries, we would almost certainly have to accept reciprocal arrangements for their citizens in the United Kingdom.
As the paper also sets out:
“Whatever alternative to membership the UK seeks following a decision to leave the EU, we will lose influence over EU decisions that will still directly affect us. We need to weigh the benefits of access to the EU and global markets against the obligations and costs incurred in return. It is the assessment of the UK Government that no existing model outside the EU comes close to providing the same balance of advantages and influence that we get from the UK’s current special status inside the EU”.
As to science and technology, we have seen both sides make their case for and against EU membership over the past few months. I am pleased that today, we have heard from members of the Science and Technology Committee, who bring another important angle to this debate, and to whose inquiry the Government have provided evidence. The UK plays a leading role in many aspects of EU research and science programmes. These provide access to opportunities of a different scale and scope from those that are possible nationally.
The UK received over £7 billion in EU funding for science and research between 2007 and 2013, second only to Germany. However, there is still scope for improvement, both in how the EU manages science funding and in simplifying the bureaucracy and transparency of funding instruments. The Government are keen to ensure that EU decision-making is based on the best scientific evidence. The UK has robust systems in place for providing science advice to government. Similar systems at EU level are currently being reformed.
Universities and science Minister Jo Johnson gave evidence to the inquiry earlier this year, saying:
“Britain's success as a science powerhouse hinges on our ability to collaborate with the best minds from across Europe and the world. This report is further evidence that the UK’s influential position would be diminished if we cut ourselves off from the rich sources of EU funding, the access to valuable shared research facilities and the flow of talented researchers that provide so many opportunities to our world-leading institutions”.
I will conclude by once again welcoming these reports. The noble Baroness, Lady Smith, rightly described them—perhaps rather rare in this debate—as showing objectivity. The Government will respond in due course, but I am grateful for all the contributions noble Lords have made to the debate today.
I have described the reforms that the Prime Minister secured in the UK’s settlement with the EU. There is of course more work to be done in reforming the EU, but the settlement shows the commitment of the European Commission and all 27 other countries in the EU to taking action. The Best of Both Worlds: the United Kingdom’s special status in a reformed European Union sets out the Government’s view that the UK’s national interest is best served by remaining in a reformed EU.
I have explained that the process of withdrawing from the EU is untested. The UK and the 27 other member states, along with EU institutions, would need to negotiate the UK’s new relationship with the EU. There would be difficult trade-offs, and this would lead to a considerable period of uncertainty, as we set out in the government paper.
On EU membership and its relationship to UK science, I have taken note of the committee’s report and restated the Government’s position that they believe the UK’s influential position in this field would be diminished if we cut ourselves off from EU funding, shared facilities and talented researchers.
As my right honourable friend the Prime Minister has said, this will be a once-in-a-generation vote. The Government’s position is clear. Our new settlement resets the balance in our relationship with the EU. It reinforces the clear economic and security benefits of EU membership, while making it clear that we cannot be required to take part in any further political integration. It creates a mechanism for reviewing existing EU laws and ensuring that decisions are taken at the national level whenever possible. It is in our national interest to remain in that reformed EU.
My noble friend Lord Cormack rightly referred to paragraph 258 of the committee’s report on the EU referendum and reform, with its emphasis on values as well as pragmatism. What unites the 28 member states is much greater than what divides them. I hope noble Lords will forgive me one personal observation, just as the noble Lord, Lord Browne, provided one. My grandfather fought at the Somme. My father fought in a number of theatres of war between 1939 and 1945. My generation has been spared that. We should not take peace for granted. For all its imperfection, the EU has helped to provide peace. It represents values that endure. Let us remain within it.
Lord Boswell of Aynho
My Lords, the House will be grateful to the noble Lord, Lord Faulks, for his generous response to our three committee reports collectively, and for the tone in which he explained the Government’s position. I was rather moved by his final remarks, although that will not shake our formal position of independence on this issue.
As the noble Lord said, this has been a very remarkable, extended and unusually balanced debate. The epithets I will attach to it are “rich” and “reflective”, because it has gone through a very wide area. As I indicated at the beginning, I have welcomed the contribution on science, which has added to the debate. We have ranged widely and properly through subjects such as, from the noble Lord, Lord Hastings, the position of the poorest countries of this world in relation to this, which we so often forget, and, from the noble Lord, Lord Low, disabled people. This matter touches us all.
Inevitably, I will concentrate more on the political, diplomatic and legal matters. There will not be time to comment on everyone’s contribution. If I may single out without invidiousness the noble Lord, Lord Howell, who often takes the House to another stage of perception towards the future, he chided us a little bit—and rightly so—for perhaps not giving a full flavour of that vision, although we said that the Government needed to do that. We certainly do have a contribution to make in this House and through our committees in taking the argument further, whether we stay in or move out. One of our sub-committees has very recently reported on digital platforms—one of the subjects that the noble Lord specifically mentioned. As it happens, its last report was on the control of pilotless drones, so we are keeping up with this. In fact, we took some of that sub-committee’s observations to an international meeting only this week, where we shared them with colleagues. So we will not mess about with that; we will do our wider duties as well as the more particularly political ones.
I will turn to two areas that I think have not had quite enough attention in this debate but which reflect, in a sense, the remit of our committee. Of course, we report to this House, but one area which is certainly not our direct responsibility but which we should bear in mind—some noble Lords referred to it—is the question of our colleagues, the other 27 members of the European Union. Occasionally, some of the public comment here suggests that we operate on our own without reference to them, but I will pick up, on this occasion entirely with approval, the remarks of the noble Lord, Lord Pearson of Rannoch, who said that we are not their enemies. Of course we are not their enemies. Indeed, we do not want to make them our enemies; we want to have a good relationship.
If I may refer again to the international conference I have just attended on behalf of the House with the noble Baronesses, Lady Falkner and Lady Armstrong, who both contributed so thoughtfully to this debate, we had all the other 27 member states represented, in one form or another. Though they did not make large, pro-forma pronouncements, the number of them who came up to us in the margins and said, “What is going on? We are concerned about this. We are concerned for ourselves as well as for you”, was quite remarkable.
The second constituency I am conscious of—and while I do not expect people to read every word of our report I hope that some of the messages will distil—is the wider constituency of the electorate who have to make this decision next week. We have a lot of people who yearn for clarity, objectivity and a degree of sensible, sober presentation, and, as a number of noble Lords have said, they do not feel that they have entirely had it yet. I would like, in concluding this debate, to draw out two areas.
The first is the complexity side of all this, perhaps best expressed in our short report on withdrawal. In looking at that, I would say to people who have not read it, “Just read the appended Article 50”. If that is too long—and the number is just a coincidence—just read Sir David Edward’s evidence at paragraphs 49 and 50, the latter of which has been referred to by a number of noble Lords, including the Minister. This is a very complicated process. It involves us all. We do not always remember that it involves us all. I have declared, although I did not mention it this afternoon, that I am in receipt of payments under the common agricultural policy. In that case, there does not appear to be a conflict, because in fact the leave campaign has undertaken to restore those payments. I will leave that one for contemplation.
Let me be a little more down to earth. I do not often bring out a visual aid, but here is a European health insurance card. I recently renewed this. It was done with huge efficiency online and came back virtually by return from the Department of Health. It tells me that I am covered until 18 April 2021. Well, I do not know whether I am or not. I do not know whether I would be told if I was not, or whether the UK Government would pay for me to be even if it were not part of a European scheme. I just mention that because it is a small, hands-on example of the complexity of this.
I can understand, in a sense, that that is adding to people’s difficulty in making their decision. We have had some indications of passion and vision from a number of noble Lords, including the Minister. There comes a time when you move from the tabloid headline or the saloon-bar comment, or the fact that you wrote to TripAdvisor after you had had a bad night. That is one area of how we live our lives and we do it perhaps too often, but you then move to the other decision, where you think, you reflect, you count twice and then you decide at the ballot box. That is the moment when it really matters. It is not the duty of this House to tell people how to do it, but it is our duty to tell them that we will help them to think seriously about it. It is a serious decision that we want them to take and we will then respect it. I beg to move.
The Process of Withdrawing from the European Union (EUC Report)
Lord Boswell of Aynho
That this House takes note of the Report from the European Union Committee The process of withdrawing from the European Union (11th Report, Session 2015-16, HL Paper 138).
EU Membership and UK Science (S&T Committee Report)
The Earl of Selborne
That this House takes note of the Report from the Science and Technology Committee EU Membership and UK Science (2nd Report, Session 2015-16, HL Paper 127).
EU Action Plan Against Migrant Smuggling (EUC Report)
(7 years, 10 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Prashar
That this House takes note of the Report from the European Union Committee The EU Action Plan against migrant smuggling (4th Report, Session 2015–16, HL Paper 46).
Baroness Prashar (CB)
My Lords, as chairman of the EU Home Affairs Sub-Committee, I thank the members of the committee, as well as the clerk, Theo Pembroke, and policy analyst, Lena Donner, for their assistance with the inquiry and preparation of this report.
The current refugee crisis is the greatest humanitarian problem to have faced the European Union since its foundation. Last year, more than a million people entered the EU irregularly. In the process, thousands died en route to or through Europe, and more continue to do so. According to the International Organization for Migration, at least 2,500 migrants died in the Mediterranean in the first five months of this year. Migrant smugglers are very often the cause of these deaths. According to Europol, more than 90% of irregular migrants arriving in Europe used facilitation services at some point in their journey and, in most cases, these services were provided by migrant smuggling networks. We have witnessed how migrant smugglers force desperate people on to unseaworthy vessels and refrigerated lorries. Accounts of fatalities among those embarking on these perilous journeys have sadly become a regular feature of daily news, while testimonies of inhuman and degrading treatment have multiplied.
Migrant smuggling is a crime against the state. Dealing with migrant smuggling, managing refugee crises and migration and protecting the fundamental rights of those in need of international protection have become pressing priorities. But there are no quick fixes. Preventing and fighting against migrant smuggling is very complex and affected by long-lasting political crises, endemic civil wars, economic and social disparities, difficult co-operation with source and transit countries, and limited legal and safe migration channels to the EU. The weaknesses of the Libyan state is a case in point. A comprehensive approach is required, which addresses the root causes and brings together policies on migration, security and external affairs, and greater co-operation with third countries.
The EU and its member states initially vacillated in taking responsibility for dealing with the crisis. The response has been inadequate and, in some cases, regressive. In May 2015, the Commission adopted a wide-ranging agenda on migration, with a view in part to address this crisis. Shortly afterwards, the Commission presented the EU Action Plan against Migrant Smuggling, one of the agenda’s many immediate measures. In July last year, the EU Home Affairs Sub-Committee decided to investigate that action plan and to examine its four priorities: to reinforce investigation and prosecution of smugglers; improve information gathering, sharing and analysis; better prevent smuggling and improve assistance to vulnerable migrants; and improve co-operation with third countries. The purpose of our inquiry was to investigate the efficacy of the action plan with a view in part to feed into the Commission’s proposed review of the legislation in this area, which will be published later this year. Since the report was published in November 2015, the situation has continued to change. We have had responses from the Government and the Commission. The Commission launched a consultation on EU legislation against migrant smuggling in January 2016 and the EU Council published its conclusions in March, encouraging further interagency and intra-member state co-operation, in line with our recommendations. It also includes references to the protection of humanitarian groups. There have been other developments—for example, the EU-Turkey agreement—but there are of course concerns about conditions in Turkey.
Let me turn to the main conclusions and recommendations of our report. We concluded that the Commission has rightly sought to place an action plan within the context of a broader approach to migration and welcomed its attempt to bring together policies on migration, security and external affairs, and its emphasis on co-operation with third countries—as long as this can be achieved by respecting the human rights of vulnerable migrants. The action plan includes several measures intended to enhance co-operation with third countries. Because the inquiry was conducted by the EU Home Affairs Sub-Committee, we focused on migration, law enforcement, policing and the internal security aspects of the action plan rather than on the broader questions of EU external relations, which I am sure the noble Lord, Lord Tugendhat, will touch upon in speaking to his Motion.
The evidence available to us about where the migrants are coming from suggested that a majority of those entering the EU as irregular migrants are “prima facie refugees”, as defined by the United Nations High Commissioner for Refugees. The most recent figures available from FRONTEX show that from January to April this year, more than 100,000 of those detected making irregular border crossings were from Syria and Iraq —two countries ravaged by war. Based on that evidence we concluded that this is essentially a refugee crisis and that, in response, equal emphasis should be placed on its humanitarian aspects and on law enforcement.
Protecting the fundamental rights of irregular migrants requires differentiating between smugglers and those providing humanitarian assistance to those who are smuggled. Migrant smuggling is a complex phenomenon, which can involve organised criminal gangs at one end of the spectrum, and local groups, including groups of migrants who may have humanitarian motives, at the other. This complexity needs to be recognised in any effort to tackle migrant smuggling and any policy responses.
Rightly, the director of Europol was concerned by the possible connection with terrorism. Although Europol had not actually witnessed this, he felt that smuggling networks might be exploited by extremists and that Europol was very sensitive to this. We support and welcome the priority which Europol is giving to this issue. Our report was, however, published before the Paris attacks on 13 November. Since then, more information has come to light regarding the nexus between terrorism and migrant smuggling. The need for consistent vigilance and thorough checking is therefore self-evident.
We also support the objective of tackling migrant smuggling through enhanced law enforcement, which is a necessary and fundamental objective, but given the scale and nature of the problem this alone is not sufficient. A multipronged approach is needed. To make a meaningful impact, greater priority should be given to the creation of safe and legal routes for refugees to enter the EU. The Commission recognises this in the action plan but does not set out any details. While we recognise that initiatives such as the Khartoum process, regional development programmes and aid will have impacts, law enforcement and the creation of safe and legal routes should be seen as part of this multipronged approach.
We welcome the interdisciplinary approach taken by the action plan but emphasised that this comprehensive set of actions should be conducted in a balanced way and with due regard to the safety and rights of the individual concerned. In this context, the EU protocol is relevant. The action plan refers to the UN protocol, but there is no explicit connection between EU and UN action and no common definition of migrant smuggling. We recommended that there should be greater synergy between the EU and other international organisations and that as a first step towards this, the inclusion of internationally accepted definitions of key terms in EU policy documentation and legislation.
In the action plan, the Commission raised the prospect of further legislative action. We looked at the facilitators’ package and recommended that the Commission should propose an EU framework that builds on the humanitarian aspects of the UN protocol by criminalising only those acts committed for financial gain and adding clauses to avoid the criminalisation of individuals or organisations for their action for humanitarian purposes. We also said that we would welcome the addition of inhuman and degrading treatment as an aggravating factor in the sentencing of convicted smugglers. I am pleased that in response to our report the Commission said that it is taking into account the need fully to reflect the spirit of the UN protocol on migrant smuggling.
The responsibility for much of the implementation of the action plan has been given to EU agencies such as Europol, Eurojust, the EU’s judicial co-operation unit and FRONTEX, the EU’s external borders agency. In some cases, extension of the mandates of the agencies is proposed. Enhanced responsibilities of these agencies will test their mandates, resources, modes of communication, intelligence gathering and operational co-operation.
Our concern is that such enhanced responsibilities may encourage member states, which under international law are required to protect refugees and asylum seekers, to distance themselves from those obligations. We therefore argue for greater accountability and transparency in the way these agencies operate. We drew particular attention to the extension of FRONTEX’s mandate, and recommended that the suggested changes should be monitored by the Fundamental Rights Agency.
Since our report was published, the Commission has proposed legislation to transform FRONTEX into a European border and coastguard. This reformed body will have greater powers to conduct return operations and to operate outside the EU. We remain concerned that insufficient consideration has been given to how law enforcement and protection of fundamental rights will be balanced. I therefore repeat our recommendation that the Commission should undertake its planned evaluation of the returns directive within at least six months of the reform of FRONTEX becoming operational, rather than in 2017.
The Commission must ensure that the agencies are adequately resourced to perform their tasks, and that the funds are allocated transparently and based on clear criteria. The action plan’s call for greater co-operation, co-ordination and information sharing between agencies and member states is essential, as is the concept of hotspots, and progress on these fronts should be monitored and evaluated.
The networks, practices and routes used by migrant smugglers are constantly changing. The fluidity of the situation presents significant challenge to law enforcement. Urgent work therefore needs to be undertaken at EU level to ensure that information collected and shared is of high quality, and that gaps are identified and remedied. The necessary focus on gathering information on migrant smuggling in the Mediterranean must not result in the neglect of migrant smuggling operations elsewhere, including within the EU borders.
We recommended that a single agency, ideally Europol, should be responsible for collating and sharing information and intelligence. I am therefore pleased that, since our report, Europol has established a European Migrant Smuggling Centre to help member states and agencies to share information and act as an intelligence hub. We also recommended that funding should be made available for academic and field research to address the lack of comprehensive understanding of migrant smuggling. There is a critical need to collect and share information on the modus operandi, routes and economic models of smuggling networks to understand the business models and design adequate responses.
Whatever the outcome next Thursday, the migrant crisis is not going to disappear, so it is important that urgent action is taken at EU level and by member states. This is a wake-up call. I beg to move.
Lord Tugendhat (Con)
My Lords, this is the second time in two weeks that I have the pleasure of introducing our report by the EU External Affairs Sub-Committee of the European Select Committee. As on the last occasion, I begin by thanking our staff for the outstanding service that they have provided to us, and also my colleagues for their constructiveness and hard work during the course of the preparation of this short report. It is appropriate that the report should be taken in conjunction with the one that has just been spoken to by the noble Baroness, Lady Prashar, because we are dealing with two sides of the same problem.
Our report about Operation Sophia had three basic findings. The first was on the impossibility of the challenge facing it. The second was that, despite that, the mandate of the operation should be renewed in the hope of, and to be ready for, more propitious circumstances, which would enable the operation to work more effectively. The third was the very important work that the operation has conducted in saving lives. It was not what it was set up to do; it was set up to disrupt and deter the smuggling networks. But saving lives is very important, and I commend the men and women serving on the naval vessels for the work they have done in that respect.
In the light of our recommendations, I am pleased that, since we reported, the European Union’s Political and Security Committee has agreed to extend the mandate. I am pleased, too, that the high representative, Federica Mogherini, has called for a UN Security Council resolution to authorise Operation Sophia to expand by enforcing the UN arms embargo on the high seas off the coast of Libya. I am glad that the EU wants to help to train and share information with the Libyan coastguard and navy. These are all positive steps—and they come since we concluded the report. I am delighted to welcome them, and they make the challenge facing Operation Sophia somewhat less impossible. However, it will still be beyond its power to disrupt and deter people-smuggling until a great many more changes occur.
In the long run, the operation can succeed in its primary task only if there is a much greater degree of co-operation with a viable and stable Government in Libya. Of course, we are some distance from seeing such a Government established. Therefore, the European Union must do whatever it can, however limited, to help bring about that desirable eventuality. In that connection, I welcome the Foreign Secretary’s recent visit to Libya and wish the British Government, along with their partners in the EU, well in their efforts to bring about change in Libya, while not expecting any immediate results.
The other leg of a long-term policy, as we point out in the report, must be to address the root causes of mass migration of mainly young men from African countries to Europe. This phenomenon has to be seen in the context of similar moves from south to north America, from central Africa to South Africa and within the Asia Pacific area. It is a simple matter of people living in poor countries with limited opportunities wanting to seek better lives and more opportunities in richer countries, but if the problem is simple to define it is extremely difficult to do anything about. We must help the countries from which the migrants come to establish more effective governance, combat corruption and improve their economic performance and opportunities, but this is a very difficult task. When one considers that one of the countries from which migrants come in very large numbers is Nigeria, which is one of the two largest economies in Africa, an oil-producing country and a country with many very rich people and many successful businesses, one can see that the issue is not simply a question of money, but of good government and a willingness of civil society to take up its responsibilities. None the less, we must do whatever we can to help and we must not be deterred by the scale of the challenge, nor expect speedy results, nor be deterred by their failure to materialise as quickly as we would wish.
We must also work out with these Governments a workable system of repatriation, building on the precedent of the EU-Turkey agreement. Of course, where people are refugees from war and persecution, the European Union has obligations that it must observe, but many of the people we are talking about are not refugees in such a situation, and we must consider the repatriation aspect of the problem as well as other aspects.
The drivers behind the mass movement of people come from the countries from which they originate, but another aspect of the solution is to seek the support of the countries through which the migrants are passing. The more the borders of these countries can be strengthened and the more the flow of migrants can be tackled before they reach the Mediterranean, the better it would be. Once they have got to the Mediterranean, there is not only the difficulty of handling the very large numbers but the fact that many of those people face the prospect of a watery death. It is important to prevent that at the outset.
I have one final point. While the Governments of the European Union must fulfil their obligations to refugees and victims of persecution, it must be clear beyond doubt that the European Union cannot and will not accept all who wish to come here. The citizens of receiving countries have rights that must be respected, just as refugees and migrants have rights that must be respected. Immigration is a highly sensitive issue in all our countries, as all of us in this country have particular reason to understand at present. It brings benefits as well as problems, and it is a great pity that Governments in this country and elsewhere have not done more to bring home to public opinion the benefits that immigration has brought and continues to bring and why we will continue to need immigrants in this country. While more needs to be done to draw attention to the benefits, Governments must also take full account of the public’s legitimate concerns, as I think the most reverend Primate the Archbishop of Canterbury pointed out some time ago. If public opinion is given good grounds for believing that Governments are not looking after their best interests, there will, I am afraid, be hell to pay.
Baroness Suttie (LD)
My Lords, it is a pleasure to follow two such distinguished speakers. This debate also provides me with a second opportunity to say what an excellent chair of our committee the noble Lord, Lord Tugendhat, has been. Today really is his final debate in his role as chairman, and I think all noble Lords would agree that his speech today was a thought-provoking and powerful way to finish in that role.
We are facing the movement of people on an unprecedented scale. The reasons are multiple and complex, including civil war, population growth and economic and environmental pressures. We have also witnessed the emergence of a new kind of ruthless people smuggler. These people smugglers now use smart technology to relay information through social media on the best routes into Europe and the current price lists for the various routes available. There are people so desperate to come to Europe that they are willing to pay several thousand dollars to risk their lives and those of their families, travelling in rubber dinghies across the Mediterranean or in containers that are unfit for human transportation.
The report on Operation Sophia concentrates on the central Mediterranean route from Libya to Italy. At the time of drafting the report, the Turkish deal was in the process of being agreed. We asked several witnesses whether they thought there would be a resulting shift from the eastern Turkish route to the central Mediterranean one if the Turkish deal was successfully concluded. The predictions that this would happen have proved tragically accurate. As the noble Baroness, Lady Prashar, said earlier, over 2,500 people have died trying to cross the Mediterranean this year already. The middle route is the longest and most dangerous, particularly if carried out in a rubber dinghy.
As the report states, we believe that Operation Sophia is carrying out a successful role in providing a search and rescue function, but is doing little to destroy the people-smugglers’ business model—at times, indeed, quite the reverse. The lack of a stable regime in Libya is further hampering the situation and makes it exceptionally difficult for international organisations to control and monitor the situation on the ground.
We need to be able to differentiate more clearly between refugees and economic migrants, as the noble Lord, Lord Tugendhat, has said, although I accept that there is a lot of grey space between the two: abuse by people smugglers of young and vulnerable migrants, particularly women and children, often leads one to become the other. According to the United Nations, over 15 million people could move from the desertified areas of sub-Saharan Africa towards north Africa and Europe by 2020. Missions such as Operation Sophia are just too small to be genuinely effective in dealing with the scale of people movement we are facing. We need to have a comprehensive and overarching strategy that tackles issues such as legally recognised official routes, provides even greater support for reception centres and delivers an ambitious economic and investment plan to provide support for the countries in the MENA region. We need to find new and effective ways to penalise the people smugglers, perhaps even by using the mechanisms of the International Criminal Court. We also need to be creative and ambitious in coming up with long-term solutions to the economic and environmental problems that are forcing so many people to travel northwards from sub-Saharan Africa.
In the last year I have been working once a month on a project in Jordan, assisting with the political reform programme there. I refer noble Lords to the register of members’ interests. Last month I spent a day with UNHCR visiting refugees in Amman. Jordan currently has over 600,000 Syrian refugees registered with UNHCR, and is having to cope with over 1.5 million Syrian refugees in total. Although the media have, understandably, mainly concentrated on the camps, over 80% of the refugees in Jordan are living in towns and cities in rented accommodation, attics and basements and wherever basic accommodation can be found. The stories of two families I met on that day stick in my mind.
The first was a Syrian family living in a small flat in Ashrafiya in central Amman. Before the conflict, Raslan, a father of five, had been working as an engineer for a Canadian oil company in Syria. He had previously been earning $2,000 dollars a month. Their home town had been blown to pieces and is now controlled half by ISIL and half by the Syrian Government. He managed to flee legally to Jordan with his passport, and the majority of his family then followed. Their accommodation was basic but damp, and the whole family were sleeping in one room. They had a living room with a simple kitchen and bathroom. The UNHCR field officer who was with me that day said it was one of the better examples of refugee accommodation that she had seen. During the interview, Raslan emotionally showed us a school photograph of a young boy. He was their eldest son, whom they had not seen for four years as he was currently fighting with the Syrian Government army and had been forced to stay on at the end of his conscription. Their middle son had not received any education whatever since arriving from Syria two years earlier because all the local schools were full. It was clear that his family wanted to return to Syria as soon as it was safe to do so.
The second refugee family we met was a Sudanese family living in very primitive accommodation. Their kitchen was a gas camping stove on two breeze blocks and the toilet was a hole in the ground. The husband had fled by plane to Jordan on a medical visa after two of his brothers had been murdered in Darfur. He was suffering from migraines and blackouts and, being unable to work, had accumulated considerable debts, mostly in rent arrears. His wife was due to give birth to their second child that day. Their first child was quite badly malnourished, as they were trying to survive on one meal a day of bread, water and occasional vegetables. I am pleased to say that I have since been told by UNHCR that this family will be resettled in the United States.
I share those two stories with your Lordships because, in this fevered atmosphere of headlines in the media saying that hundreds of thousands of migrants are going to flood our shores, I believe it is our human duty to remember that behind each of these statistics lies a personal and often tragic story.
On the other side of 23 June, I sincerely hope that the British Government can again help to take the lead on these issues within the EU and in the international community. The London donors conference was a positive initiative, but less than half the money pledged has actually arrived. Despite the current populist rhetoric to the contrary, this is a challenge to which there are no quick-fix solutions, and we in Britain cannot solve the migrant crisis on our own. We will have to work with our European partners, as well as with the wider international community, to find long-term solutions, whatever the outcome of the EU referendum.
Lord Horam (Con)
My Lords, I think that all of us in the Chamber agree that international migration, wherever in the world it is, on the present scale is a huge problem. It is bad for the countries that originate it. For example, I learned recently that Jamaica loses over 80% of its graduates every year. Imagine trying to substantiate sensible systems of government if you are losing four-fifths of your graduates every year. How can you possibly do that? No wonder Jamaica has huge drug and crime problems.
A few years ago I was in Botswana, which has a severe AIDS problem. It has a drug programme to try to control it, but I found that the problem was getting worse because the drugs were not available. That was because they were not being administered as there were not enough nurses. I asked why there were not enough nurses and the answer was that they were all in Britain helping the NHS. I was made to feel very guilty, understandably. That is the sort of detailed problem that we somehow forget when we talk about international migration. En passant, that makes me suspicious of the rather glib solution of the Australian points system that the Brexit people have come out with recently. How is it right for us to take the people we need and totally ignore the requirements of the originating country? That cannot be morally correct.
Apart from the problems in the originating countries, there are problems in the transit countries. The strain on facilities in Lebanon, Turkey, Jordan, Greece, Libya and so forth at the moment is huge—it is far greater than we are experiencing in this country. There are also problems for the receiving countries, and I very much echo what my noble friend Lord Tugendhat said in his opening remarks: we must consider those extremely carefully. People are understandably alarmed at the thought of more than 300,000 people a year coming to the UK. How will they fit into this small island? They are also concerned that we have no control over the EU portion of immigration. People expect their Governments to have control over these issues—and so they should.
I was delighted to serve on the committee under the chairmanship of my colleague and noble friend Lord Tugendhat. In looking at Operation Sophia, we discovered that this early stab at trying to control immigration through Libya, across the Mediterranean to Sicily and Italy was not working at all well and that a much broader approach was required, as the noble Baroness, Lady Prashar, said in her remarks.
We need a two-pronged approach. We need development aid to tackle the originating problems in the countries of north Africa. As the noble Baroness, Lady Suttie, said, 50 million people may emigrate from those countries over the next five or six years if we do not tackle these problems. That needs to be coupled with a proper programme of deterrence.
I will deal with the deterrence issue first. As has been said, the problem with Libya is that there is no coherent Government at the moment. However, a unity Government is being established—an embryonic Government. They will need our help, and they are getting our help in some respects. As I understand, we are giving some military, financial and logistical help. I am also delighted that the Foreign Secretary was out there to co-ordinate that and give some diplomatic support. They need, for example, help with their coastguard service. The coastguards are patrolling a huge area of coastline and, inevitably, cannot deal with all the smugglers who are trying to get their poor immigrants across to Italy. We need permission to go inside the territorial waters to help their coastguards be more effective, to give them more resources and to stop it being simply a save and rescue operation, as it is at the moment, and to deal with the problem in a systematic way. The deterrence, as we all agreed, is well short of what is required.
We also need help for the countries of origin. I am delighted, therefore, that on 7 June the European Commission issued a communication talking about a new external investment fund totalling, I hope, €62 billion, which will be invested over a period of years into the countries of north Africa.
Again, quite clearly there are huge problems. As my noble friend Lord Tugendhat said, there are problems in Nigeria, where very rich people are making quite a lot of money. There are problems in Niger, where already the politicians have demanded £1 billion, almost in blackmail. There is corruption, there are dictatorships and there are human rights abuses. These are all problems in that part of the world and they mean that we have to conduct our affairs in helping them in a far more businesslike and efficient way than perhaps we have done hitherto.
Development aid and deterrence are required, working together. In that way, we may be able to manage down to a level that people can accept the migrant flows that are appearing. It is a huge challenge for the European Union, but it must be met with competence and realism, as well as humanity.
Lord Anderson of Swansea (Lab)
My Lords, I congratulate the noble Baroness, Lady Prashar. I also congratulate the noble Lord, Lord Tugendhat, on what is yet another final appearance on behalf of his committee. The two reports make sensible recommendations, including the case for co-operation of the EU agencies, the sharing of information and so on.
Migration, as we all well know from the Brexit debate, is what the Americans would call a “neuralgic issue”. For as far ahead as we can see, the affluent, secure, stable Europe will remain a magnet for the huddled masses, the persecuted and the ambitious of the third world. There are heart-rending stories of individuals, some of whom I have met, and which the noble Baroness, Lady Suttie, set out so well. We in this House made the right response to the issue of unaccompanied children, which the Government now appear to accept. However, we have to accept that, overall, demand is unlimited. We cannot accept all those migrants who would like to come. However difficult, we must strive for an ordered and managed policy.
The present migration crisis illustrates well that the European Union is not a superstate. The Commission proposes; member states dispose. If walls will not solve the problem, we need, nevertheless, to control our EU borders.
As the noble Baroness, Lady Prashar, acknowledged, the reports have already been partially overtaken. There is now, for example, clear evidence, after the revelations of the Paris bombing, that terrorists have used migrant routes to enter Europe. The EU announced a new policy on 7 June which aims to stem the flow of migrants, building on the template of the EU-Turkey deal. There are concerns about the new scheme, the raiding of development funds and the likely deals with African dictators. What is the Government’s view on this? Is the new policy likely to achieve its aim? Is there any prospect, for example, of countries receiving back—repatriating their migrants? All the reports, and the noble Baroness, Lady Prashar, and the noble Lord, Lord Tugendhat, referred to tackling the root causes, as set out in paragraphs 107 to 109: sectarian conflicts, poverty, economic inequalities and so on. This is all very well, but there is surely a reason behind the reason.
There is a curious reluctance on the part of the drafters of the report—and, indeed, so far in this debate—to mention the population boom in Africa. According to the UN World Population Prospects, published last year, there are more than 1 billion people in Africa. The UN projects a figure of almost 2.5 billion by 2050. Since 1975 the population of Egypt has doubled, to more than 80 million. Nigeria has been mentioned. In 1960 Nigeria had 50 million people; now, there are more than 180 million. By 2050, according to the UN prospectus, there will be more than 400 million, surpassing the United States and making Nigeria the third most populous country in the world.
We have to ask ourselves: where are all these young people going? Will they find jobs in their country of Nigeria? Will they find food? Will they find water? The scale of the problem is enormous. The Population Institute report of June 2015 contained case studies of the most demographically vulnerable countries. I mention Niger, as did the June EU report, as it is the worst case. It is the poorest country in the world, with the fastest-growing population. Among the demographic indicators are that women have an average of 7.6 births; that is a projected population growth to 2050 of almost 300%. Only 8% of married women use modern contraceptive methods. Economic drought could add to the chronic food insecurity. Severe poverty and hunger and climate change would make matters worse. It has the second-highest score in the world on the Gender Inequality Index. It is so important that women be educated in family spacing.
A high percentage of young people in these African countries see little prospect of advancing themselves at home. There are demographic pressures, obviously, from conflict, and the danger is not only Libya but Algeria next door, with its high population, environmental degradation, felling of trees, desertification, and increasing conflict for resources, including water. These are further reasons for exodus. All these factors feed on themselves. I ask the Government: are DfID’s responses adequate? Should it invest more in reproductive health and family planning? Or is it too sensitive a subject—or deemed to be, as experts parrot the word “culture” to excuse inaction?
There are no easy solutions. The Sophia report is entitled an impossible challenge, but it is necessary to recognise and meet the problem. Short-term solutions, of course, include a government in Libya who can govern, helping to stabilise Algeria, and open legal channels for migrants, but such numbers are likely to be limited and may deprive Africa of its professional elite. Some say that the 1951 refugee convention should be revisited to provide temporary shelter until conflicts are eased.
As the noble Lord, Lord Tugendhat, asked, what are the rights of receiving countries faced with these problems of culture? In the longer term, we need to work closely with African countries, as shown by the partnership framework. Last November’s Valletta summit, between EU and African countries, was unproductive. What incentives are there for African countries to co-operate with us? What chance is there of being able to accept returned migrants? We need to lubricate the deal financially, as Spain has done with west Africa, to protect the Canary Islands. Yes, we need carrots and sticks, trade deals, investments and enforcement in Europe of laws dealing with employers and landlords. The message must surely get through that non-convention migrants will be returned, or at least many of them, to their country of origin. Even then, we are likely to fall far short of the demographic challenge I have outlined. It is no wonder that the Sophia report is entitled an impossible challenge—one that we have not yet fully recognised in our policy response.
Lord Jay of Ewelme (CB)
My Lords, I speak as a member of the Home Affairs Committee and as a former member of the External Affairs Committee. Migration is a huge global problem, but it is particularly acute in Europe, whose stability and economic success act as a magnet for people from poorer and less stable parts of the world. It is particularly acute now, with the crisis in Syria creating the worst humanitarian disaster since the end of World War II, compounded by civil war and strife in Iraq, Afghanistan, Eritrea, Sudan and Libya. The EU is right to try to formulate a new, comprehensive and coherent response to this crisis, not least because its existing policies and structures were designed for a different era and are no longer fit for purpose. Hence the descent into national responses that we have seen—noble as far as Angela Merkel’s is concerned and less noble, if understandable, as far as other countries’ were concerned.
The bold and, at least for me, unexpected EU decision to send migrants back from Greece to Turkey in return for settling Syrian refugees in the EU has had a marked effect on the level of migration from Turkey to Greece, but it has not had any effect on migration across the Mediterranean—indeed, there may have been some diversion from the Aegean to the Mediterranean. As the report makes clear, smugglers are ruthless, entrepreneurial and flexible, seeking out the weakest and most profitable routes irrespective of the consequences for the people whom they smuggle.
Against that background, Operation Sophia was never on its own going to deter the smugglers. Indeed, the prospect of rescue may have been an incentive to send people out to sea on fragile boats in the hope that they would be somehow picked up. However, to say that Operation Sophia is only, or even primarily, a humanitarian mission is not in any way to belittle it—that is a crucial task and a task in which the Royal Navy is rightly involved; I speak as the son and grandson of naval officers who used to sing in church every morning “Eternal Father, Strong To Save” with the lines:
“Oh, hear us when we cry to Thee,
For those in peril on the sea!”
It does not matter how people get into peril; what matters is that they are saved.
What for the longer term—for this is a longer-term, perhaps a generational, issue? There are no easy solutions, but it seems to me that the aim should be to work with EU partners and others for stability in the Middle East and north Africa and for economic development in sub-Saharan Africa, difficult though that is, not least for the reasons that have just been explained. A second aim should be to support those countries, notably Lebanon and Jordan, which are bearing the brunt of the refugee crisis, as the noble Baroness, Lady Suttie, said. Thirdly, we should try to establish safe havens or camps for refugees in north Africa, too, ideally under UN auspices, whenever political stability makes that possible. Fourthly, we must try to distinguish—because it is extraordinarily difficult—between economic migrants and those fleeing from war or civil strife, and to work to return economic migrants to their home countries and establish legal routes for genuine refugees, thereby reducing demand for smugglers. Finally, we must ensure that genuine refugees are properly settled within the EU, including within the UK. That is a long-term, imperfect and difficult agenda, but I find it hard to see a better way forward.
The Lord Bishop of Sheffield
My Lords, I welcome the two reports before us in all their complexity and I thank the members of the European Union Committee for their expertise, which is already evident in this debate. I particularly welcome the committee’s recommendation in paragraph 8 that the mandate of Operation Sophia is reviewed and renewed, along with the EU’s subsequent decisions. Clearly, this operation alone cannot be the complete answer to the challenges that we face. However, the European Union must not return to the position that it held before the Lampedusa tragedy of apparent indifference to those who seek to cross the Mediterranean in danger of their lives. Nor can we neglect the spread of people-smuggling on and across our borders.
I focus my remarks on two areas. The first is the complex emerging ecology of care for refugees and migrants across Europe, which is a sign of hope. Lines of help and support connect our towns and cities in Britain with the supply and delivery of aid—a counterweight to the emerging networks of people-smugglers. The responses that have emerged over recent years form a complex ecology of care; a partnership between national and local government, aid agencies, faith communities and individual charity.
The Church of England is engaged through its networks right across its Diocese in Europe and the wider Anglican communion in responding to the refugee and migration crisis and is working with the DfID to get the aid committed by the UK Government to those in most need. The Anglican communion is assisting those who remain in the camps with health, hygiene kits, shelter and education. Those who have decided to leave the region and have arrived in Europe are being supported with spiritual, psychological, health and clothing support as they cross Europe by the Anglican Church in Athens and the Anglican churches in southern Italy. These churches are themselves working in partnership with Roman Catholic and Orthodox Christian communities.
Throughout Britain, churches and faith communities are working in similar partnerships to build this ecology of care for refugees here and across Europe. Sheffield is the original city of sanctuary and the ideas have spread to many other places. The Sanctuary Movement works with local charities and local authorities to welcome and support those who need a place of safety. The Muslim community in Sheffield, led by the Islamic Society of Britain, has been particularly active in collecting and transporting aid to the camps in Syria and to the refugee centres in Greece. Listening to the stories of Muslim friends who have visited these camps is heartbreaking, as are the stories that we have heard this afternoon. The crisis in its many different forms represents an impossible mission, but one which demands the best from every part of our society.
My second point concerns the scale of the present crisis. There is a sense in the reports that this is acknowledged, but not yet fully comprehended. This is not surprising, as we are clearly dealing with a situation without precedent in modern times. As we have heard, the global migration of peoples is not simply the consequence of terrible conflict in a small number of countries. As the most reverend Primate the Archbishop of Canterbury said in his recent evidence to the Home Affairs Select Committee, there are millions and millions of displaced people across the world. The causes of migration are more extensive than war or persecution. Global warming plays its part as livelihoods disappear. A rising inequality between nations is part of the deeper narrative. Populations are rising. The dominance of a single, western and materialistic culture in the urban centres of the world makes its contribution. Global communications play their part.
The crisis we face in Europe and in the Mediterranean must be understood against this deeper and broader picture. There is a pressing need to keep in focus the United Nations vision for a more just and sustainable world, and to hold in our minds our commitment to the recently agreed sustainable development goals. There is need for more comprehensive study and further debate on the root global causes of migration and what can be done to respond to this great movement of people globally, as well as locally, strategically and tactically.
I warmly welcome these reports and plead for still deeper analysis and an ever richer ecology of care.
Lord Patten (Con)
My Lords, the first time that I can recall ever hearing the term “economic migrant” was when it was used in the other place by the then Home Secretary Douglas Hurd. His phrase neatly encapsulated a growing issue then for the UK and our European neighbours, but it was rather more of a challenge than a crisis. It was something new and it seemed to be in manageable numbers at the time. Fast-forward from the later 1980s, when I heard my noble friend Lord Hurd of Westwell, as he now is, use that phrase, to 2016, and just as the new economic normal for western Europe has become ever-low everything—low inflation, low interest rates and therefore low economic growth—the migrant issue has mutated from a border issue to a supposed economic and social existential event, in parallel with that low economic growth and therefore relatively low European capacity to deal with some of these issues because the money is not being produced by a growing economy.
The events that are now being played out in the Mediterranean Sea, with its never-ending toll of death and tragedy, appal us all. Operation Sophia, under a mandate now to be renewed, has done its best with some planes, some helicopters and some other military borrowed assets and a few ships to do a lot to save often economic migrants from death in its search and rescue tasks, which my noble friend Lord Horam referred to in his speech, as the pressure grows. I certainly do not decry that search and rescue effort; it is a vital humanitarian issue. But its law and order, border patrol activities have caught few of the organised criminals behind the sickening people-smuggling scams that we see. Why is this? It is because the intelligence needed to manage the task of dealing with them is highly underdeveloped. The European writ large has neither the people on the ground nor the writ to control the supply of this great and growing surge of people from states in economic difficulty down through Africa.
They are coming up through the very often ineffective and imperfect, if not sometimes in danger of failing, state of Libya—or, to me, what now seems to be the two almost separate blocs that reflect the way Libya is divided today between east and west, as it was back in the time of the Roman Empire with Cyrenaica to the east, centred on what is modern Benghazi, and Tripolitania to the west, centred on Tripoli. I hope I have that right. I am no classical scholar, but I see the noble Earl, Lord Oxford and Asquith, in his place and he can doubtless correct me if I have my historical geography of the later Roman Empire a bit wrong. But whatever, there are flows from the east and to the west where those Roman provinces once reached deeply down into Africa. Today the flows of migrants from Sudan, Ethiopia and Eritrea are funnelled up towards Benghazi while those further to the west from Niger, Mali or indeed Nigeria flow towards Tripoli.
The intelligence-gathering efforts that should inform a renewed Operation Sophia mandate are in their infancy, and we must be straightforward about that. There are certainly a lot of action plans along with a blizzard of acronyms and a welter of “contact groups”, “policy cycles”, “hot spot approaches”, “thematic groups” and much more of what to me is the impenetrable language of the action plan, but not enough people there on the ground. With great respect, I sometimes see more acronyms than there are actual feet on the ground. What is needed is a much greater effort to target more aid and to anchor more people with the foundations of hope to stay at home, which most want to do, whether in Ethiopia, Sudan or Chad. I am very proud of what the UK has done in this context and I am a strong supporter of my right honourable friend the Prime Minister in the way in which he has increased our overseas aid effort and targeted it better, whether that be in Syria or in some areas down in Africa. I only wish, not to beat about the diplomatic bush too much because that is not my way, that other countries such as Germany and France, which could afford to spend more, would do so. They are not spending anything like as much as the United Kingdom and they should get on with it.
What is also needed—perhaps being even less diplomatic—is to deal with Libya itself. It is a fulcrum of instability as well as a funnel of migration of the most desperate sort, helping to damage global stability. There have been UN-type mandates within Europe in the Balkans in the past few decades and there are others presently in sub-Saharan Africa. There may soon need to be some sort of mandate offered to the Libyan coast in order to create a less penetrable land barrier with the Mediterranean to stem the flow in a way that we have not yet managed to do. There may need to be helpful European shoes in greater numbers on the ground in Libya than there are now helping to stop migrants from reaching the sea and to support the hard-working Italian and British ships in their Operation Sophia tasks, which otherwise will be with us for decades. Let us hope that the good Libyan people will soon ask for that help. My noble friend the Minister will probably not be able to answer me today—why should he when I have not given him any notice?—but have they ever asked for that kind of help? Perhaps he could write to let me know if they have and what our response has been.
As the Sophia or its successor mandate is renewed, and important though ships and other borrowed military assets are, the real challenge is for the countries of Europe, members of the EU or not, to develop not just the projection of soft power into Africa but its actual use quite deep in Africa as well as in the Middle East, to develop and sustain those intelligence-gathering activities on the sources of migration, and to develop the ability to help more people in those countries to stay put for a better life at home rather than ending up on, or more tragically in, the Mediterranean.
The Earl of Oxford and Asquith (LD)
My Lords, I shall confine myself to Operation Sophia, but first I should like to offer my own words of tribute to the excellent chairmanship of the committee of the noble Lord, Lord Tugendhat. Operation Sophia has done some very creditable work in its search and rescue role, but as we have heard and as the report concludes, it is unable to perform its mission of preventing illegal migration, at least not until it is able to operate in Libyan waters much closer to the launch point of the trafficking. Since that is the case, we shall need to reconsider in due course what will be required in practice to stem the flow of migration across the central Mediterranean route, always assuming—it is a very big assumption—that we have the political support of the Libyan Government.
Most member states of the EU have a good understanding of what is involved in migrant trafficking, and for obvious reasons much of that knowledge is related to the operations of traffickers within the destination countries themselves—how they exploit the people under their control. But the problem we are facing in the Mediterranean and the central and western routes is of course a different one. How do we deter the flow of migration coming from the supplying states of north Africa and well beyond: Mali, Nigeria, Guinea, Eritrea, Somalia and so on? It is a long chain, as the noble Lord, Lord Patten, has said, and seems inexhaustible in its volume.
Our experience of trafficking in Europe has led us to understand how the market works, and how these people are exploited in prostitution, the construction industry and debt bondage. As Sophia has shown, those who are conducting the trafficking closest to our borders are seldom the ones who play a determining role. Often the people who steer the boats are migrants themselves. The beneficiaries and organisers of the trade can be stretched across great distances, far removed from the Mediterranean coast, and they perform diverse functions.
The trade is conducted by merciless criminals, to be sure, but their facilitators can take the form of corrupt border guards, police, embassies and politicians. We know that tribal communities and settled municipalities alike conspire to earn money along the line, exploiting in their own economies the trafficked migrants who are effectively temporarily enslaved before they are moved on to another destination in the line. Certainly there will be benefits, most of all in saved human lives, if the EU were able to interdict the traffic off the Libyan coast, but the evidence indicates that this will simply bottle up the problem in Libya and Morocco.
On deterrence, we can see that there is a much more complex process that will have to be addressed within a conceptual framework. Clearly for the success of their business the traffickers have to move their victims into a country. There has to be transport, an entrance point, the providing of identities and false documents, housing, which is often illegal, and work places, and financial mechanisms for foreign accounts, bribes and money-laundering. At every stage in these networks identifiable operational facilities are required by the traffickers, which act like choke points, against which some counteraction can be conducted. Indeed, some countries promote admirable educational programmes in the supply states themselves in an effort to inform potential victims of the dangers they face. In other words, there is an enormous process to be undertaken, a comprehensive migration policy, as the report concludes and as the noble Baroness, Lady Prashar, also concluded.
The question in my mind is really this: clearly, phase 2B of Sophia, operating in Libyan waters, requires naval capabilities. There must be some doubt, however, as to whether it is really practicable to designate phase 3, even now, as a security and defence mission, something that will be seen throughout the region as a military mission. Unless it is to be purely ephemeral, going ashore and establishing a presence on Libyan territory in the foreseeable future carries some obvious risks—physical risks, certainly, but several political risks too, not least the one of acceptability.
To achieve any significant success in stemming the trafficking trade there will have to be close co-operation with the Libyan and other neighbouring Governments at all levels, including coverage of the domestic issues embedded deep within the culture and structures of Libyan society. We are not at the moment close to implementing phase 3, but I am not yet convinced that we should continue addressing that possible step in the context of extending Sophia’s remit under a quasi-military endorsement. The objectives, status and planning of onshore preventive activity will prove to be a large departure from what we have been doing so far, and it seems more appropriate to prepare for such a contingency within the framework of a civil programme.
Baroness Coussins (CB)
My Lords, I too had the privilege of serving on the EU External Affairs Sub-Committee and would like in this debate to draw attention to the evidence that we heard from the NGOs, Médecins Sans Frontières and Amnesty International, and to pay tribute to the important work that they do in the context of Operation Sophia. Other NGOs, including Save the Children and the Red Cross, are also involved, but Amnesty and MSF were invited to give evidence to our inquiry.
Amnesty’s report of a dramatic increase in deaths as a result of shipwrecks was instrumental in prompting the EU emergency summit that resulted in the reinstatement of a search-and-rescue operation. MSF told us that when 1,305 deaths were recorded in April 2015—a massive increase compared with the same month only a year before—it took the unprecedented step of launching its own rescue boats, and has to date rescued nearly 24,000 people. Both these organisations supported our conclusion that, although search and rescue was essential, the objective of targeting and disrupting the networks of traffickers and smugglers was an impossible challenge. Indeed, Amnesty has received accounts that many of those intercepted and believed to be smugglers were probably just refugees who had been nominated the person in charge of the boat. Amnesty said that those at the top of the smuggling chain are,
“no doubt making huge profits and probably go nowhere near anyone they are smuggling”.
Both Amnesty and MSF confirmed that closing down certain routes was no deterrent to smugglers, who quickly find alternative routes. These were usually even more dangerous and more costly to the refugees than the previous routes.
Amnesty also impressed on us the scale of the migration challenge and put it into perspective with the specific challenge for Europe. The level of migration into what we have called the “magnet” of western Europe is unprecedented, but it is not disproportionate when looked at globally. As we have heard, at the end of 2013 there were 10.5 million refugees globally and by mid-2015—less than two years later—this had gone up to 15 million. We were reminded that these figures leave out the 5 million Palestinian refugees. These numbers are difficult enough to grasp as statistics, never mind as real people trying to stay alive and doing the best for their families. But despite the magnet of Europe, the vast majority of the world’s refugees—86% according to Amnesty—are being hosted not by European countries but in the developing world.
MSF gave evidence about the desperate situation of refugees as they wait in Libya for the chance to board a boat to Europe. Conditions are dehumanising. Refugees may wait for weeks or months, and many are subject to violence and abuse, including forced prostitution. Both MSF and Amnesty viewed with grave concern the suggestion by the Prime Minister in March that Operation Sophia might return boats and refugees back to Libya. The NGOs said that this would merely return severely abused people to the hands of their abusers and would just present the smugglers with a further opportunity to exploit the same people for even more money. Only yesterday, Amnesty published a report with an even graver warning: the EU’s plans to co-operate with Libya’s transitional Government on migration policy is harming refugees and is very likely to result in further shocking human rights violations.
We were also made aware of some degree of tension between NGOs operating in the area covered by Operation Sophia and the military authorities. The director-general of the EU military staff told us that one NGO was advising migrants against giving information to military officials about the smuggling networks. MSF told us that it had never come across this, but our witness from Amnesty said that there had been reports of volunteers and NGOs feeling intimidated in their work by the authorities. This tension is clearly undesirable and ultimately unhelpful for the refugees. In the light of the committee’s conclusions on the importance of intelligence gathering and sharing, I hope that relations between the military authorities and the NGOs can be improved and tensions resolved.
Finally, the NGOs stressed to us the importance of creating safe and legal routes as the only means to prevent the market for smugglers continuing to grow. Amnesty proposed three options: first, a resettlement programme; secondly, an increase in family reunion; and thirdly, a system of humanitarian visas to people to come and claim asylum—a strategy it said had been used so far by only Brazil and France.
We are very grateful to the NGOs which took the time to contribute to our inquiry and, of course, for the committed humanitarian work they undertake every day. Like the committee, they took the view that the challenge of migration and the plight of refugees cannot be resolved until and unless the root causes of the problem are addressed. This is, as others have said, a massive and massively urgent challenge for all EU member states.
Lord Risby (Con)
My Lords, it is a great pleasure to follow the noble Baroness, Lady Coussins, who will be greatly missed on our committee. I know I speak for all members of the committee when I pay tribute to the excellent chairmanship of my noble friend Lord Tugendhat. I thank him for so superbly chairing our proceedings and for so effectively summarising our report on Operation Sophia. I also applaud the work of the committee of the noble Baroness, Lady Prashar.
Every day, tragically, our television screens are filled with dramatic pictures of anxious people arriving in Italy from Libya. There are horrific reports of people drowning, seduced by criminal gangs into travelling in flimsy vessels, often having parted with their life savings. We have heard of the inadequacy of the remit of Operation Sophia and the inadequate resources to deal with the flow of migrants, but at least lives have certainly been saved.
There are 7 billion people living on our planet and there are millions who are on the move, who would like to be on the move or who plan to be on the move, either internally or externally. What is clear is that there is a very limited overall framework to deal with this phenomenon, even regionally in Europe. Public opinion all over the world is divided as to how, in practice, to deal with this, the phenomenon of our age, ranging from the compassionate to the violently antagonistic.
Of course, determining in principle and in practice how to distinguish between genuine refugees from war, violence and persecution and those simply seeking a better life, in order to react appropriately, is hugely difficult. Mercifully, we in this country do not have an extreme right wing but even perfectly legal migration to this country is clearly dramatically affecting public opinion. It is infecting public discourse in the United States and creating fissures in the European Union, and is something democratically elected politicians will not ignore. I mention this because what Operation Sophia has shown and the refugee influx has provoked is a need for a much more broadly based and coherent response from Europe.
In April 2014, working with the African Union, the EU agreed an action plan which focused on trafficking in human beings and all that flows from it. In part, the object of the exercise was to find a balance that would enable defined migrants who make it to Europe to be integrated successfully, and to deal with the issue of remittances, while looking towards the root cause of the migratory flows. This was taken further later that year with the Khartoum process, aimed at enhancing existing co-operation and specifically addressing the issue of people trafficking and smuggling. I therefore welcome the orientation of the EU Regional Development and Protection Programmes towards north Africa, the Horn of Africa and Nigeria, as recently proposed by the European Commission. A pilot project in Niger will encourage local protection and resettlement opportunities and offer assisted voluntary return options. Under the common security and defence policy, a key meeting this autumn with the African Union will try jointly to further address irregular migration, with all its ramifications.
Of course, greater political stability in Libya is the key to the more immediate resolution of the cross-Mediterranean flows. Sadly, there are very limited grounds for optimism at this time. However, I note that yesterday the United Nations Security Council unanimously authorised a crackdown on arms smuggling on the high seas of Libya, allowing the inspection of vessels to seize and dispose of illicit weapons, which are undoubtedly the source of terrorist activity in Libya by extreme radical groups. All this is important in both reassuring European public opinion and trying to bring about some acceptable governance to the chaotic situation in Libya.
What I have described are simply parts of what our report made clear: that the EU must with urgency develop a strategy that tries to tackle mass, irregular migration at source. Last week the European Commission proposed a new partnership framework with third countries, based upon the European agenda on migration. The aim is a good one: to deliver coherent EU engagement to encourage member states to combine their respective instruments and tools, and to agree to a collective compact with third countries in order better to manage migration, giving direct encouragement to those third countries to co-operate in migration management. A substantial sum of money has been envisaged for this purpose.
Clearly, and ultimately, this phenomenon of our time, mass migration, will require something even more comprehensive and a fresh architecture. In 1990, the UN agreed the Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families. Of course, many countries today are extremely sensitive to what they perceive as unwarranted interference by regional or international organisations. However, building on what is now emerging in Europe, it would be useful and important for a more international process to be considered, by trying to bring together existing protocols and by examining the responses and practices of different countries.
If this is seen as something far into the realms of impossibility and impracticality, it is worth noting that in the last few years we have acted internationally in considering the consequences of the environmental degradation of our planet and the destruction of forests and wildlife. But the human, worldwide migratory challenge is now centre stage, and we ignore it at our peril. Operation Sophia has simply highlighted one facet of the enormous difficulties surrounding international migratory flows, but I hope that, through this report, it has added something to the necessary and inevitable debate about how to deal with the greatest human and social challenge of our age.
The Earl of Sandwich (CB)
My Lords, the scope of these two reports extends almost beyond our imagination, over new horizons. As we approach the referendum, despairing Eurosceptics are playing on the Napoleonic fears of some of our citizens that we are going to be overrun by migrants and refugees and that, after Brexit, they must presumably rebuild pillboxes and checkpoints along our sea frontier. These absurd fears have not exactly surfaced in this debate, but they are present and are nevertheless real ones that we must address.
I can say from limited experience what while we may as world citizens be facing mass migration, this is not occurring or likely to occur in the United Kingdom, where we receive relatively small numbers, most of whom—as we have heard—are essential to our economy and our welfare. In my lifetime we have dealt with large-scale migration before, starting with the effects of the aftermath of war in Europe, then the migration from Communism, the Vietnamese boat people and, more recently, the vast numbers of migrants, refugees and those displaced in Africa. Let us not forget those who cannot cross frontiers: internally displaced people. There are 40.8 million displaced by conflict worldwide and, on top of that, 19.2 million were displaced by disasters last year alone. These figures come from the May issue of the excellent Forced Migration Review from Oxford.
It is often said in the media that the relief agencies cannot cope; the most recent example is the chaos along the Macedonian border. Of course, to begin with, nobody can cope, because of the unexpectedly large numbers. But host countries have to cope, and the United Nations agencies have been dealing with these emergencies for years. The scene will be messy and inadequate, especially in terms of sanitation but, in the end, the situation will stabilise and people will just about survive, although there are always serious deprivations, inequalities and grave breaches of human rights. A Greek farmer has apparently even fired on the Bangladeshi strawberry pickers whom he had himself recruited. Resettlement is desirable but an option only for the very few.
What is new to us is the surge of numbers across the Aegean and the Mediterranean. The refugees from Syria, we can expect, will be largely cared for in time. Refugees from north Africa have not had such a warm reception, and we are going to see more of them, but economic migrants from Africa pose a different problem. We in Europe will have to expect that, so long as our economies improve or remain stable and while their own countries are in turmoil, people will continue to come in search of freedom and prosperity; it is only natural.
Most of this pressure is hitting the UN agencies head on, especially the UNHCR and WFP. I have had a huge respect for the work of UNHCR ever since I visited refugee camps in various countries in the 1980s on behalf of Christian Aid. The staff are always highly committed, often performing remarkable tasks of improvisation to meet humanitarian need, yet they are always short of funds and never given the necessary resources by UN member Governments.
Appendix 6 of the report on the action plan is a letter from UNHCR to my noble friend Lady Prashar, saying that we need to,
“expand legal avenues for seeking protection”,
and have,
“enhanced resettlement, family reunification … and ‘refugee-friendly’ student and labour migration”,
visa schemes. Safe and legal routes for refugees are fully dealt with on pages 18 to 20 of the report, which, as my noble friend Lady Coussins mentioned, comes out with recommendations on the use of humanitarian visas and on resettlement and relocation schemes for migrants. However, it concludes that the EU is not doing nearly enough.
A lot has of course happened since the report was published in November, notably the Government’s own gateway resettlement scheme, which I am sure the Minister will mention, and the temporary fix of the EU’s exchange deal with Turkey, which I hope he will comment on. Both reports confirm the accepted view that the EU, while it has useful instruments such as Europol and FRONTEX, is not very good at resisting migration or even refugee movements. The muddles at Calais and in the Balkans seem to provide evidence of this. I think that it is because Schengen is failing the European Union and the nation states are, not surprisingly, reasserting themselves. My humble advice to the EU Commission would be to stick close to the United Nations and not create too many new initiatives. The EU also needs to proceed cautiously when it comes to stemming migration in Africa and the Middle East. As a Union, it has no particular mandate except in humanitarian situations, where its excellent agency, ECHO, has been active in many parts of the world.
Last week, we debated similar issues and I mentioned the relatively new Khartoum process by which the EU co-operates with north African countries. Under the Khartoum process, as I am sure the Minister knows, we have decided to get closer to authoritarian regimes such as the ones in Sudan and Egypt, as well as the more unstable ones such as in Libya. The idea is that we will help them to tackle smuggling and improve their policing methods at checkpoints and frontiers. That sounds good on a fine day but, remembering Somalia in particular, one wonders what will actually happen to the money invested and whether the EU can possibly exercise any control in such remote, divided and corrupt parts of the world. The noble Earl, Lord Oxford and Asquith, mentioned that, too.
The report on Operation Sophia provides a sober assessment: as long as there is need for asylum and demand from migrants, smuggling will continue to exist. It says in paragraph 136:
“'The EU needs governments … that it can work with. Therefore, building the resilience of these countries is critical”.
As the noble Lord, Lord Tugendhat, said, that is a very tall order, although an admirable aim. Most of us hold the view that international development has to be the ultimate insurance against conflict and emergency, but we are also aware that the conditions have to be right. For me, that implies good governance and the involvement of civil society throughout any project. We have many examples of eventual success through the EU, even in countries such as Somalia, but root causes are tackled not just by development aid and investment but by a range of policies, including diplomacy, foreign affairs, international trade and security.
Education is one fairly reliable route to good development. To conclude briefly on student visas in relation to migration—it is an old chestnut, I fear—the Minister will know that many of us cannot accept that students should be treated as immigrants. Three years ago, the PM made a reassuring statement to Indian students in Bombay, which was widely reported, yet the successful clampdown on bogus students also hit genuine colleges that had taken on some of those students and should not have been abruptly closed. The number of Asian students here has fallen drastically. Our universities have suffered because parents can no longer afford the high fees, even if they acquire temporary visas. Many students who would and should have come here have gone to alternative universities abroad. I expect and hope that this policy will be debated again and again in this House.
Lord Selsdon (Con)
My Lords, I have no locus standi in this at all and therefore may be an ungifted amateur intervening on other people’s activities, but at the time of national service, I wanted to go into the Navy, which was quite a difficult thing to do. Somehow, I managed to get down to Portsmouth and asked if they would take me, and they said I had to go through the normal procedures but there was a little bit of a crisis coming up. Before I knew it, I was taken on and told that if I wanted to get ahead, I had better take a few exams and they were looking for new officers, but I was totally unqualified.
They put me on a crash course and somehow I managed to pass. Before I knew it, I was going out effectually to the Mediterranean, to Cyprus and Suez, to find myself as a junior officer on board a coastal minesweeper called HMS “Floriston”, which was to be a patrol vessel for illegal activities in the whole of the Mediterranean.
It was a great experience for me, because the whole Suez situation was just coming on and there were a lot of illegal activities of smuggling and aggression. We would do night patrols, which meant that I as the most junior officer was the one who was up all night and then had to get up early in the morning. We used to board vessels with an outboard and a rubber dinghy, because the main barge did not work. We found that a surprising amount of illegal trade was going on—but it was not illegal in any way other than people trying to avoid taxation. In our stop and search for things, we found an amazing pattern of movement of people and of smuggling of people, even in those days, which it is hard to understand now.
Later, I found myself involved in the banking world. I was dealing with trade and became chairman of the Committee for Middle East Trade, which had responsibility for trade development for the whole of north Africa and anywhere to do with the Middle East. I learned a lot from our Arab friends, all of whom are traders by nature and many of whom were great seamen, but it was the business of stop and search for illegal activities in the Navy that taught me. We have found that there is an awful lot of this going on right across the Mediterranean today.
I found that I had got hooked, and something I had longed to do was the travels of St Paul. So I went out and bought myself a sailing boat—not a particularly great one—and spoke to a bishop or two, got the route and sailed around the Mediterranean following St Paul. I then found to my surprise that the boat was quite acceptable for other people to charter, so I did that activity for 10 years. But in the back of my mind was the movement—the migration—of people. I used to study the maps and look at where they were and where they came from.
Even today, I find it a difficult world to work and live in. I am not sure what we can do about it, but I believe that greater co-operation with the Middle East might be helpful, because it is difficult to stop and search in many places. I would be quite like to be back in the Navy—but anything that I can do to help the committee I would willingly do.
Lord Soley (Lab)
My Lords, I start by congratulating the noble Baroness, Lady Prashar, on the way in which she chaired our committee—not only her efficiency but the obvious compassion that she felt on the subject that we were dealing with. It is very important in debates such as this to remember the very real people who have been referred to in this debate, whom we have seen on our television sets and in newspapers.
I will also mention in passing that the reports that we are debating today are a good example of how much impact we can have on the European Union. In fact, it has already picked up on some of the suggestions that we have made. One thing that I heard from evidence given at the time was that our reports are well received in the European Union. It is a simple message: if we are in the European Union, we can, if we want, lead. If we just sit on the fence, we cannot lead. That is perhaps the most important message underlying the political discussions on the European Union at the moment.
On the issue of migrant smuggling, it is a very depressing picture. One recommendation that we made, recommendation 79, is about trying to get the language right and co-ordinating this with other international bodies and organisations. Migrant smuggling is a title that is not strictly accurate. This is also a refugee crisis, and it is very important to say that. Obviously, a lot of the people are migrants for economic reasons, given some of the countries that they are coming from. But it is equally obvious that a vast number, particularly in relation to Syria, are refugees. Within that, you have other groups that are very difficult to recognise as having separate needs, most obviously the trafficked people, particularly women, trafficked for sexual purposes, or children, for both sexual purposes and others. Trafficked migrants or refugees—whatever label you wish to put on them—require another way of dealing with people. That is why we rely so much on the various agencies, both public and private, which are trying to help people in these conditions.
There is a much wider debate here, which people have been touching on, about how we deal with the crisis around the world in migration and refugees. A country such as Jordan is dealing with it incredibly well, but one reason why it can deal with the problem better than others can, and with much larger numbers than we have dreamed of—in the millions, or certainly much more than a million—is that the country has a good, stable Government with the rule of law. It is not as perfect as one would like—it never will be—but it is a lot better than others. If we are going to talk about aid in this respect, one thing that I was told many years ago is that, frankly, any help that we can give to achieve the rule of law and stable government is more important than almost anything else. If we can get that, a lot of these troubles will go away.
Underneath that issue, there is the problem of the United Nations Security Council. If it was operating as it should have done, and was not so divided, frankly, we would have put up holding centres in Libya. There is no reason why you could not cater for very large numbers of refugees in that area, preventing the abuses that are already happening to refugees. But you have to have boots on the ground. Ideally, they would be United Nations ones with a camp—but we are nowhere near that at the moment, so we have to pick up the pieces by having Royal Navy, Italian navy and French navy ships in the Mediterranean, trying to stop people crossing.
The other problem, which the report addresses, is with the criminal activity of smuggling. There is absolutely no doubt in my mind that a large number of gangs and individuals go in for criminal smuggling to make large amounts of money out of it, but I am also aware that a lot of the smuggling is done by small people with boats who are making them available for a sum of money. I often wonder what would happen in a court case if you tried to charge one of them with smuggling and they said, “Yes, I felt sorry for them—I took them across but I charged them some money”. I am not sure whether that would count as smuggling or as assistance. None of that solves the problem. We have to have some sort of external force on the European borders; we have to face up to that.
One of the most impressive bits of evidence given, written and verbal, was by Rob Wainwright, the director of Europol. Again, Europol, and his particular role in it, is highly regarded among the other EU states. He was saying that unless we get better co-operation between the various forces there, we cannot have a common approach to what are in effect the borders of Europe. I think that such an approach is emerging—and the sooner it does, frankly, the better.
The other thing that comes out as very important in what Rob Wainwright is doing is intelligence gathering. It is no good just trying to stop ships in the water; you also need intelligence about what is happening on the ground in areas such as Libya and who is organising this—when we are dealing with criminal charges—so we can try to stop them. I noticed that a man was arrested a few days ago in Italy, with co-operation between the British and Italian police. Whether that will lead to a conviction I know not, but it is an indication that that sort of work is going ahead.
My final point is that if we are to have at least a temporary solution on this, we also have to be clear about our returns policy. I think it is pretty clear to most people that we cannot return someone to Syria, but it is different when it comes to Nigeria, which is a very large country. There is one problem area in it where, if you were returned to it, your life expectancy would be short or grim, but large parts of Nigeria are stable. We need the co-operation of the Nigerian Government to ensure that if we return a person there, we do not return them to an area controlled by Boko Haram. There are similar examples that I would give but time is against me. I will say simply that there is a whole package of measures here.
When historians look back on this, I do not think that the European Union, our Government or the rest of the world will come out of it very well. But I acknowledge, as I think we all must, that it is an incredibly difficult problem for which there are no quick fixes. We have to start building up these procedures and improving them, and I hope that our report, along with those that we have heard about today and the others that I know are in the making, will have some impact on that—but it is a slow and painful process.
Baroness Janke (LD)
My Lords, as a relatively new member of the Home Affairs Sub-Committee, I too pay tribute to the noble Baroness, Lady Prashar, for her chairing of the committee and for the succinct and wise nature of the recommendations in the report. I welcome also the fact that the report on the EU’s action plan on migrant smuggling is being considered by your Lordships’ House.
I know we have all been deeply moved by the terrible sights we have seen of desperate migrants clinging to woefully inadequate crafts in the Mediterranean, of destitute and forlorn groups of survivors, and of the deeply shocking scenes of those who have drowned, some of them tiny children. The illegal practice of people smuggling is one that preoccupies us all when we see the abject misery of those who have been exploited and exposed to mortal danger. In highlighting some of the issues that are not always considered by the media, the report makes clear in its evaluation of the EU action plan that the issue is a complex one with, as many people have said, no easy answers.
We heard evidence that large and powerful criminal networks are involved as well as smaller, more opportunistic operators. The committee supports the high levels of collaboration and information sharing that currently exist, and urges the commission to continue to co-ordinate the collection of intelligence by member state authorities. We also urge that proper resources must continue to be made available to ensure that levels of policing are maintained.
One of the key issues raised by witnesses to the sub-committee was the fact that these migrants, as others have said, are refugees fleeing from war and violence, not, as has been suggested, economic migrants seeking a better life. The report provides evidence from a variety of sources that this is the case. It is therefore appropriate to refer to a refugee crisis, and we would support the EU action plan being amended to reflect the fact that victims of smuggling may be refugees—vulnerable people with complex needs. It is also crucial that the humanitarian needs of refugees are provided for and that proper services are provided for the many who have suffered intense trauma and violence, in addition to the needs for basic food and shelter, as was so well described by the right reverend Prelate the Bishop of Sheffield.
Paragraph 56 of the report urges the Government to participate fully in the Commission’s discussions regarding possible measures for dealing with the root causes of migrant smuggling. The UNHCR and others who gave evidence highlighted the importance of safe and legal routes. Currently those fleeing from war and violence have very few means of entering the EU legally. The UNHCR suggests a number of admission programmes, including the admission of relatives, humanitarian visas, community-based private sponsorship, medical evacuation, academic scholarships and resettlement schemes. Our report makes the point that these too need to be considered.
Many of our witnesses, including the Refugee Council and Amnesty International, urged the Government to participate in the EU measures for the relocation of migrants and criticised the action plan for not giving this objective sufficient priority. The action plan, rightly, distinguishes between human trafficking and people smuggling. I very much support the recommendation that the 2004 directive, requiring member states to provide residence permits to victims of human trafficking, should be extended to smuggled migrants who have assisted in criminal proceedings against people smugglers.
As the noble Baroness, Lady Prashar, said, we are confronting the greatest humanitarian crisis to have faced the European Union since its foundation. It is clear that the enormous number of refugees seeking to come to Europe is unlikely to reduce in the near future. For many of these people, the prospect of being killed on the high seas is not a deterrent. Fleeing from desperate circumstances, likely death or torture, most will feel that they have little choice.
It is only through collaboration and shared responsibility that the means of answering the needs of so many can be found. The recommendations in the committee’s report welcome the action plan and make some key additional proposals. However, it will be vital that member states, including the UK, collaborate and show responsibility and leadership if there is to be any progress in addressing this crisis and providing basic safety for so many people in need.
The prospect of generations of children being abandoned in barely adequate refugee camps or being left to the mercies of human traffickers and organised crime is chilling, and it is fertile territory for those who practise terrorism. I very much support the recommendations in the report and hope that the UK Government will play their part in working with other member states to address the current crisis and seek long-term solutions, as many noble Lords have suggested today, to the immense challenges of global migration.
Lord Marlesford (Con)
My Lords, we read every day that immigration has become the central issue in the referendum, and perhaps it will determine the outcome of the vote. This is hardly surprising because it is probably the biggest and most urgent challenge to the West. I think that the British people have little confidence that anybody has a grip on it, and the two reports that we are debating indicate that they are right to feel that way.
Of course, the problem is huge. Conflict has displaced 12.5 million people in Syria alone. The present situation in Greece, Italy, France and probably Germany, which now has a backlog of 460,000 asylum cases, is already unsustainable. The UNHCR expects a further 1.2 million in 2017. The migration challenge is an issue that EU policymakers, which means the EU Commission, have failed to meet.
First, the EU did not recognise that it is a global challenge and not primarily a European one. Command and control should be in the hands of the UN, as the noble Lord, Lord Soley, has indicated.
Secondly, the EU has failed to make, let alone implement, practical but crucial distinctions between asylum seekers, refugees and economic migrants. Nor has it produced reliable methods of identifying Islamist jihadists who have been infiltrating the present crisis.
Thirdly, the EU Commission has been focusing on the symptoms: the people smugglers who have caused so many deaths with unscrupulous methods by both land and sea. As we now know from my noble friend Lord Tugendhat’s report, although the EU’s Operation Sophia has, wonderfully, been saving 1,000 lives a day, it has failed to reduce illegal migration or deter the criminals who facilitate it. In practice, it has, from the start, merely offered a safe passage to destination for those in peril on the sea. Therefore, it is, in itself, a huge incentive to take the risks. Indeed, for the coming summer surge of migrants across the English Channel, it would probably be cheaper and more humane to issue them with Eurostar train tickets if, when intercepted, they cannot be returned directly to the country from which they set sail.
Fourthly, the EU Commission has laid down for each Schengen state unenforceable and unenforced quotas for the number of immigrants to be received. These quotas have, quite predictably, been ignored.
Fifthly, the Turkish deal is collapsing. In part, that is because the Turks are demanding visa-free entry into Europe, which EU Governments will not grant; added to which they have also been given the prospect of EU membership. However, both sides on the referendum campaign have made it absolutely clear that that will not happen for decades, and the Turks rightly recognise it to be a bogus offer. Also, from last week, the repatriation of migrants to Turkey is being challenged in the European Court of Justice on multiple human rights grounds, ironically by two Pakistanis being held on the Greek island of Lesbos. This strikes at the heart of the legal architecture of the Turkish deal.
In place of conscience-salving tokenism, surely it is better to face up to the horrors of reality. There has always been pressure for economic migration, but it is now magnified a thousand times by the spread of knowledge of world conditions through social media and by the current military conflicts. In practice, economic migrants will not be deterred until the standard of living in the countries to which they wish to move is only marginally higher than what they have at home. This is not a social issue: it is simply the operation of market forces. It can be controlled only through economic assessment by the recipient Governments of the numbers they need. Ultimately, that is a national political judgment—it is certainly not one for the EU Commission to make.
Last week, the EU Commission proposed a €62 billion investment fund, mainly for Africa, as an inducement to co-operate in curbing migration. I am afraid that in most African countries, a lot of that will end up in the bank accounts of the “big man” and his cronies. I am not sure that that is a clever use of EU funds.
I hope very much that the migration partnership framework, which the EU Commission announced one week ago, and which I gather could include a UN-led global resettlement scheme, may mean that it is at last moving towards what I proposed in this House a year ago. I return, therefore, for the third time, to my proposal for a holding area, probably in Libya, to which migrants would be transferred. Libya is huge—it is three times the size of France, and with only 6 million people, it is sparsely populated. It is in a state of chaos with an expanding ISIS presence, for which the international community bears quite a bit of responsibility, and where military intervention, probably by the West, will soon become necessary.
I have no time to repeat all the details, except to say that it envisages using solar power for desalination of the sea, thus making the desert bloom, and the use of NATO forces in blue helmets under UN mandate to establish, administer, protect and guard the holding area to which all migrants can be taken. There they would be sustained, cared for and processed, with some going where they want, and others returning home, with perhaps the eventual establishment of a permanent population in a new state, which I have called Refugia.
Baroness Kidron (CB)
Many noble Lords will recall the last weekend in May, when more than 700 refugees drowned in quick succession. It is in their memory that I wish to call on this Government to open up further safe and legal routes of migration as requested in this excellent report.
Desperate people do not make rational decisions. They take to unstable dinghies, put their families at risk and entrust their future to the hands of the unqualified, who may well have pure motives, or the unscrupulous, who do not. In either case, neither offers very good odds. The report we are debating expresses regret at the refusal of the UK Government to participate in EU relocation strategies, and it urges, both at UK and EU level, that more emphasis be put on establishing safe and legal routes of migration. Many noble Lords have called for community-based private sponsorship, medical evacuation, humanitarian visas, family reunion, academic scholarships and labour mobility schemes. Any one of these offers an orderly and controlled form of migration. Collectively they describe a minimum human response to desperate neighbours.
The arguments against such mechanisms were also captured in the report. It is suggested that the number of beneficiaries would be so few in relation to potential refugees that it is not worth it. There is a fear that these routes would expose us to terrorist threat, and that establishing such routes would act as a pull factor.
These are poor arguments. The fact that we can do little is a wholly inadequate reason for refusing to do what we can. In spite of intelligence from Europol, it is simply the case that people are coming in in this way, those intent on doing harm will do so by any means, and they do not need the sanction of formal status to do so. The bloodshed in Syria and the conflict in failed states within the Middle East and north Africa are driving millions to flee. They are not being pulled. They are being pushed. Even those in the relative security of refugee camps face decades in limbo, in circumstances that do not offer a life with prospects or dignity.
All this is not just about what is right for those fleeing. This is about what is right for us. This is the country that gave refuge to my parents, Michael and Nina, the children of Samuel, Ruchel, Soloman and Maternal, who themselves had been given serial refuge both as children and as adults—five countries in just three generations, three generations that survived and prospered, unlike so many of their friends and family because they were given repeatedly safe and legal routes of migration until my siblings and I were born in the safety and security of the United Kingdom.
The philosopher Peter Singer famously asks: “If you had just bought a beautiful pair of shoes and saw a child drowning in a shallow pond, would you save your shoes or save the child?”. Unanimously, people answer, “Save the child”. He goes on: “If there are others present, would you still save the child?”. Invariably, the answer is yes. People recognise that their obligations belong to them, irrespective of the obligations of others. Finally, he asks: “What if the child were far away, perhaps in another country, but it remains equally within your means to save them at no great danger to yourself?”. Virtually all agree that distance and nationality make no difference to one’s obligations.
Her Majesty’s Government talk of solving the problem “upstream”, yet upstream we have problems of great magnitude, poetically described by the right reverend Prelate—proxy wars, climate change, unequal distribution of global wealth, food scarcity, conflicts, failed states and terror. And we have no expectation that those problems will be resolved very soon. That leaves us, I am afraid, with Peter Singer’s challenge: do we let people drown because they are out of our sight?
The safe and legal routes proposed describe an achievable lifeline for a human being in desperate need. They undermine smugglers, give hope and choice in the intractable lives of those forcibly on the move, and allow us the privilege of not standing by, dehumanised by our inaction.
I had hoped to say the names of the dead, just as we do for those who perished in 9/11, 7/7 and Hillsborough, and just as we do for fallen soldiers or indeed Members of your Lordships’ House when they pass away—we name our dead to honour their memory—but in spite of considerable effort, no one could provide me with names. The final indignity of the desperate is that they are a number, not a name. But I can remind the House of three year-old Alan Kurdi, who washed up on a beach last year, and the outpouring of compassion that accompanied that young child’s death. It is in his name that I ask Her Majesty’s Government to reflect the long-standing values, compassion and leadership that my family benefited from and open up new, safe and legal routes to the UK and, in doing so, offer safety to the few—too few perhaps—but dignity to us all.
Lord Balfe (Con)
My Lords, I thank the chairs of our two reports, the noble Baroness, Lady Prashar, and the noble Lord, Lord Tugendhat—under whom I had the privilege of serving on this committee. I do not want it to sound like Tony Blair if I keep wishing him goodbye, but I hope he will not go too far away.
I found that it was not until the speech, relatively late in the debate, of my noble friend Lord Marlesford that we really got round to gripping the problem here. The subtitle of the report of the committee on which I sat, An Impossible Challenge, is really what we should address. In a democratic state such as we are in, we have to realise that this impossible challenge must be met. The current problems and perception in Britain have to be faced head on.
I have risen in this House previously to point to the many legal migrants in this country, particularly from the EU but also from elsewhere, and the huge contribution they make, but I am afraid that in the way this debate is often handled people conflate illegal and legal migration, not recognising that the vast number of people in Britain who were not born here are here legally and are contributing enormously to the community. This is one reason why we have to tackle the problem and come up with a solution. Frankly, whatever the rights or wrongs may be, Europe will not accept unlimited numbers of refugees, as Chancellor Merkel is currently finding out.
We are also in a situation where, as our Prime Minister said, many,
“are not asylum seekers, but people seeking a better life”.—[Official Report, Commons, 3/6/15; col. 583.]
Seeking a better life is not wrong. Most of the legal migrants in Britain are here seeking and finding better lives. But we have to look at ways in which we can deal with the problem of illegal migrants. Sophia is part of it but only a small part. The noble Lord, Lord Soley, outlined a way forward. There are other ways forward, but they will probably involve some sort of haven in north Africa. One problem at the moment is that if you are rescued at sea, you have effectively won the jackpot. All you have to do is get on a boat and be rescued, as opposed to sink, and you are okay. That is a very lottery-based approach.
A long time ago, a great Conservative politician, Robert Peel, drew the distinction between legitimate public expenditure and other public expenditure. I believe that one mistake this Government have made has been in cutting back public expenditure on both the coastguard service and Border Force. Why do we not look at the lorries as they get on boats to come to Britain? Because we have cut the number of people working for Border Force. Dedicated civil servants were doing an extremely good job and we decided to cut back the numbers employed. We decided not to put the latest technology on the docks in Calais and other places to X-ray and look through the sides of lorries to see whether human, breathing life was inside. One thing we must face up to is the need to reverse those cuts and not to continually tell civil servants and union members that they are useless. If we want to control borders, let us start by taking the legitimate steps within our own hands to control our own borders.
We also need a slightly less sentimental attitude towards some of the illegal migrants who are here. I was interested to see last Sunday—I am looking at the right reverend Prelate, because this is largely about his profession—Reverend Pete Wilcox, Dean of Liverpool, who has baptised 200 asylum seekers in the past four years. He said:
“Mixed motives are not unheard of”.
Later he admitted that,
“there was no similar rush to convert to Christianity from Muslims who already had British citizenship”.
It would appear that that is a fairly open loophole. The reverend prelate also said:
“I can’t think of a single example of somebody who already had British citizenship converting here with us from Islam to Christianity”.
That is clearly an abuse of process, and there is a lot more in this article and elsewhere. We need to toughen up a little because it is not fair to the legal migrants who are here if we behave in that way.
All migrants in Britain should be treated properly and should be given an honoured place in society because they work very hard when they are here. I also believe, however, that our current migration policy is not fit for purpose, so I challenge the Government to follow the advice of the great John Maynard Keynes:
“When the facts change, I change my mind”.
I believe that the facts have changed over recent years and I invite the Government to have a fundamental rethink about how they approach the problem.
Lord Rosser (Lab)
My Lords, I add my thanks to those already expressed to the noble Baroness, Lady Prashar, and the noble Lord, Lord Tugendhat, and their committees for their respective reports on subjects of more than usual interest at the present time.
Operation Sophia has been running since the middle of last year. Its purpose is to disrupt people smuggling in the southern central Mediterranean through gathering information and intelligence and by destroying boats used by people smugglers. The committee’s report indicates that the operation has not been an outstanding success to date, with no arrests of key figures in the smuggling networks, no effective disruption of the networks since the operation acts only on the high seas, and an inability so far to even operate in Libyan waters, let alone onshore, with the weakness of the Libyan state being a key cause of the rise in smugglers using that route through the Mediterranean. The report concludes that Operation Sophia does not and cannot deliver its mandate. It goes on to state that there is an urgent need to address the root causes of irregular migration to Europe and calls on the European Union to build resilience in the countries of origin, target the profits of the smugglers, provide support in-country and inform and engage the public on the phenomenon of the mass movement of people.
If there is to be a coherent and sustainable solution to the irregular migrant crisis, there must be a crackdown on those who seek to take advantage of people in their time of need, and that means dismantling and putting out of action, by bringing to justice, the ruthless criminal networks that organise the precarious and dangerous journeys of large numbers of migrants who are desperate to reach Europe.
The second EU committee report we are discussing, which is on the EU action plan against migrant smuggling, considers the broader strategic challenges of migration policy and recognises that migration to Europe is part of a much larger phenomenon of the mass movement of people globally from the developing to the developed world, with the countries of western Europe, whether in the EU or not, acting as a magnet to those in the Middle East and Africa.
The purpose of the committee’s report was to look at the 2015 EU action plan against migrant smuggling ahead of the European Commission’s own review of the legislation on migrant smuggling which is due to be published this year along with proposed reforms. The action plan, which is one aspect of the European Commission’s 2015 European Agenda on Migration, sets out four priorities: enhanced police and judicial response; improved gathering and sharing of information; enhanced prevention of smuggling and assistance to vulnerable migrants and stronger co-operation with third-world countries.
The aims of the committee’s inquiry were to assess how the action plan against migrant smuggling contributes to the stated objectives of the EU’s agenda on migration; to establish whether or not its four objectives and the actions set out are the right ones to achieve the EU’s stated goal of rendering migrant smuggling a “high risk, low return” undertaking; to identify whether the action plan strikes the right balance between security considerations and the protection of migrants’ human rights; and to identify gaps and deficiencies in the current EU response to migrant smuggling in order to make recommendations for planned legislative reform.
The committee’s report reached a number of conclusions and made a number of recommendations; they appear overall to have been rather more enthusiastically received by the European Commission than they have by the Government, judging by the tenor and content of the respective responses. Its recommendations for creating safe and legal routes for refugees to enter the EU, and its regret that the Government have declined to participate in the EU measures for the relocation of migrants—allied to their urging that the Commission and all member states should make greater efforts to reach consensus on EU proposals on relocation and resettlement—did not go down well with the Home Office. The Home Office Minister for Immigration reiterated the government line on providing support to those countries facing particular pressures, with the focus on helping the most vulnerable who remain in the region which migrants arriving in Europe have left. The best way of reducing irregular migration flows, and with it migration smuggling, is of course to address the issues that have led to people fleeing or otherwise simply deciding to leave their own country or region. Conflicts in whatever part of the world lead to spikes in mass migration as people living in fear of atrocities and persecution flee for their lives in the hope of finding a safe, secure and peaceful environment elsewhere for themselves and their families.
Conflicts have adverse economic consequences as well. The loss of a home, employment and the prospect of any reasonable life ahead leads to migration flows. Climate change can have a similar impact. My noble friend Lord Anderson of Swansea drew attention to the impact of the population explosion, particularly in Africa. But achieving lasting peace in areas of conflict and addressing the tyranny of oppressive dictatorships and corruption, as well as appalling levels of poverty, as a means of eliminating the root causes of mass migration is neither a smooth nor a quick process. It involves nations, particularly those in the developed world, working together to deliver agreed common objectives and being prepared to put in the resources, both financial and human, to achieve those objectives. It involves a recognition that international development activity and the associated necessary resource provision in its various forms has very considerable benefits for the nations providing those resources as well as for the nations receiving them.
However, we are a long way from being in that position, and in the meantime the issue and impact of mass migration, and with it migration smuggling, will continue to have to be faced up to by many countries around the world, including in Europe and including ourselves acting both jointly and collectively, and individually. In this country we had our own migration impacts fund to provide a resource to expand essential public services in areas where such services were coming under pressure as a result of an increase in population arising from migration. It was abolished by the incoming Government in 2010, which was not exactly a far-sighted or enlightened move.
The response to the committee’s report from the European Commission refers to the EU Asylum, Migration and Integration Fund, which was set up to promote the efficient management of migration flows and the implementation, strengthening and development of a common EU approach to asylum and immigration, as well as to regulate specifically when emergency assistance could be activated. The EU Commission allocated emergency assistance funding to France last August to set up a site offering humanitarian assistance to around 1,500 irregular migrants and to support the transport of asylum seekers from Calais to other locations in France. Can the noble and learned Lord say what, if anything, has been our involvement with this fund, including as a beneficiary or potential beneficiary? The Commission’s response also refers to the setting up this year by Europol of a fully operational European migrant smuggling centre as part of the creation of a hub for sharing information on migrant smuggling in the EU. What is our involvement with and input into this newly-established centre, including the sharing of information? Perhaps the Minister could tell us when he responds.
The European Commission has also said that the recent EU-Turkey statement and co-operation with Turkey have been fundamental in tackling the exploitation of vulnerable people seeking to cross the Aegean Sea. It has, it says, ensured greater humanitarian assistance in Turkey in parallel with opening up new legal channels to the EU, and that credible action inside the EU to discourage smuggling and irregular entry while showing that legal pathways to Europe exist is critically important. Can the Minister say whether the Government agree with that view?
The European Commission has recently set out plans for a new results-orientated partnership framework to mobilise and focus EU action and resources in its external work on managing migration. The EU’s intention is to seek tailor-made partnerships with key third countries of origin and transit to achieve results with the priorities being saving lives at sea, increasing returns, enabling migrants and refugees to stay closer to home and, in the long term, helping third countries’ development in order to address the root causes of irregular migration. Some €8 billion will apparently be provided over the next five years.
The Commission says that partnerships with third countries will take the form of tailored compacts that will reflect whether they are a country of origin or transit, or one hosting many displaced persons, and that in the short term the EU will deliver compacts with Jordan and Lebanon, and take steps to agree further cuts with Niger, Nigeria, Senegal, Mali and Ethiopia. The EU also intends to increase its engagement with Tunisia and Libya.
The Commission goes on to say that member states’ contributions in these partnerships—diplomatic, technical and financial—will be of fundamental importance in delivering results. Can the noble and learned Lord say what our contribution will be to these partnerships? In their response to the committee’s report the Government say that they are participating fully in the EU’s discussions regarding all possible measures for dealing with the root causes of migrant smuggling at ministerial and working levels through playing a leading role in the implementation of the actions agreed by the EU and African partners at the Valletta summit last November. Can the Minister say what “playing a leading role” means in terms of specific actions that we have taken or have committed to take?
Also in response to the committee’s report, the Government say that they are working to assist in building greater judicial and law enforcement capacity from source and transit countries for the migration crisis as part of the Organised Crime Taskforce by exploiting every opportunity at source, in transit countries and Europe, to destroy the operating model of organised crime groups involved in organised immigration crime. Can the noble and learned Lord say how long this task force has existed, and what specific improvements have been achieved as a result of its endeavours?
I thank once again the noble Baroness, Lady Prashar, and the noble Lord, Lord Tugendhat, and their colleagues for their respective reports, with their conclusions and recommendations on these increasingly important, high-impact and challenging issues that we have been able to discuss and consider today, and to which we now await the Government’s response.
The Advocate-General for Scotland (Lord Keen of Elie) (Con)
My Lords, I would like to thank the European Union Committee for producing its report on the EU action plan against migrant smuggling and its report on Operation Sophia, and to thank all those who have spoken in this debate.
I would like to touch on some of those contributions for a moment. The noble Baroness, Lady Pashar, alluded to various proposals in the committee’s report. In order to see these in context, it is important to remember that as a nation we must maintain border security. We must maintain a coherent immigration policy. As has been acknowledged, public opinion, if nothing else, would demand that we maintain such a coherent policy.
A number of your Lordships observed that the European Union cannot accommodate all those who wish to come. That is clearly a truism. The Government’s opinion is that there is little evidence to support the proposition that providing opportunities for a small number of migrants to travel legally from source countries will have any significant impact on the very large numbers of migrants who are prepared to travel illegally into the European Union. As the Government recognise, there will of course be some vulnerable people in Syria and the region who can be effectively supported only in countries such as the United Kingdom. That is why the Prime Minister announced the major expansion of the Syrian vulnerable persons relocation scheme, under which we will provide refuge for vulnerable people.
I turn to the contribution of my noble friend Lord Tugendhat. I congratulate him on his chairmanship of the committee, which is now coming to an end. I hope he will accept that what is impossible today may become possible tomorrow. As many of your Lordships observed, this is a complex problem for which there are only long-term solutions. There are no simple immediate answers, although I note that the noble Lord, Lord Rosser, has asked me for some. I will come on to that in a moment. Looking forward, we have to see changes in areas such as Libya, with stability of government there, before we can reach any kind of effective result in the Mediterranean.
The noble Baroness, Lady Suttie, referred to the crime of people smuggling. It is an immense problem, considered to be the fastest-growing crime in Europe at present. Indeed, the sums involved have been estimated at anything between €3 billion and €6 billion. She mentioned the shift from the Aegean to the middle of the Mediterranean. On that, the Turkey agreement appears to be succeeding. The numbers crossing the Aegean up until the beginning of June are about 10% of what they were a year ago. We have not seen an entire shift of those numbers into the middle Mediterranean. Indeed, the most recent numbers from the middle Mediterranean were slightly lower than they were a year ago. But we will all accept that these smugglers are ruthless criminals. They will find another route, and we have to be prepared to address that as it emerges. Indeed, we have to be prepared to seek the intelligence that will allow us to pre-empt these criminals when they seek these alternative routes.
The noble Baroness also made the point that it is important to distinguish between refugees and economic migrants. That is an important part of the issue. Indeed, we find that so many of those who present themselves as refugees, as asylum seekers, are in reality economic migrants. That is often not an easy issue to resolve. One has to acknowledge that the more economic migrants come forward to claim that they are asylum seekers, the greater the pressure on our resources and therefore the more difficult it is to process those who are genuinely refugees. Indeed, I note in passing that more than 90% of the asylum claims in the United Kingdom are made by persons already here, and who have therefore arrived illegally or under a visa and overstayed their visit. That is the extent of the problem.
Again, as the noble Baroness, Lady Suttie, acknowledged, long-term solutions are needed. Those will be found at source more than anywhere else. My noble friend Lord Horam pointed out that the problem lies at source. That is what drives people away from these countries in sub-Saharan Africa. He also mentioned Jamaica. He made a further important point. As these countries lose their best, their youngest, their best-trained and best-educated, it exacerbates the problem at the source. They lose their doctors, nurses and engineers; they lose a viable economic future. That is why it is important not only to stop this economic migration but to have an effective and viable returns policy. That is welcomed by some of these countries, which want to see their best-educated return to their own country.
The noble Lord, Lord Anderson, alluded to the fact that we cannot accept all who wish to come here. That is absolutely clear. It is therefore necessary to invest our resources in dealing with the problem at source, whether it be health, economic or otherwise. Indeed, we ought to try to maintain a system whereby we give temporary shelter to genuine asylum seekers so they can return in due course. That is why we have encouraged and sought to support those countries that are doing so much in the vicinity of Syria, such as Lebanon and Jordan. They are maintaining facilities for many refugees who want to remain in the Middle East and want the opportunity to return to their own country in due course. We acknowledge the importance of that.
The right reverend Prelate the Bishop of Sheffield alluded to what we need to do when people actually arrive here. Of course, we cannot ignore the need for sanctuary of those who arrive, and I do not believe that any of us would wish to do so.
My noble friend Lord Patten raised the question of what we are doing on the ground, and when we might do something on the ground in Libya. Of course, part 3 of Operation Sophia deals with moving into territorial waters and on to the coast to try to address people smuggling. That cannot be done until we have a stable Government in Libya and appropriate approval from the United Nations. It remains part of our medium or long-term proposal for that project. I am not aware of any request from the present Libyan Government for us to put people on the ground in Libya. If it transpires that there has been such a request, I will write to the noble Lord, but I believe it is widely understood that we cannot take that step into territorial waters or into the territory of Libya until there is a stable Government.
In that context, I have a further observation on a point raised by one of your Lordships about returns to Libya. Let us be clear: there is no question of persons being returned to Libya unless and until it is a safe place for their return, whether they have been picked up in the Mediterranean or elsewhere. When my right honourable friend the Prime Minister alluded to the possibility of returns to Libya, it was in the context that it would occur only when it was safe for such persons to be returned.
I appreciate that I have not mentioned the contributions of all noble Lords expressly, but I hope it will be appreciated that I have taken all of them into account and wish to consider them. The noble Lord, Lord Rosser, raised a number of specific questions about policies that have yet to be implemented and decisions that have yet to be made in the context of certain proposals. In particular, he referred to our contribution to the proposed EU partnerships. I am not aware of any decision having been made on that, but I will inquire and write to the noble Lord on that point. On specific improvements arising from the implementation of the task force, I suspect that it is too early to say that there are improvements we can isolate and report on, but, again, if there are, I undertake to include that in my letter.
We have to remember that the EU action plan against migrant smuggling is intended to shape the EU’s law enforcement response to immigration crime. It sets out concrete actions to counter and prevent organised immigration crime. The Government share the view expressed in the action plan that there should be a focus on an enhanced police and judicial response, improved gathering and sharing of information, and stronger co-operation with third countries. The UK’s response to the migration crisis must be comprehensive, utilising expertise and resources from across government and law enforcement. In order to be successful it must include a humanitarian response, law enforcement activity and capacity building in source countries.
Of course, some of those making the dangerous journey to Europe are fleeing conflict but others are economic migrants. That is why we are leading the argument in Europe about the importance of breaking the link between these journeys and achieving settlement in Europe for those who are not refugees. We are playing a leading role in tackling organised immigration crime. We have established a multiagency Organised Immigration Crime Taskforce, which brings together officers from the National Crime Agency, Border Force, Immigration Enforcement and the Crown Prosecution Service. Its purpose is to exploit every opportunity to identify and tackle people smugglers.
The Organised Immigration Crime Taskforce is working in 17 countries, giving UK law enforcement unprecedented reach in source and transit countries. The task force is achieving success, both on land and at sea. Land enforcement agencies have had some notable successes. Between 1 April 2015 and 31 March 2016, immigration enforcement achieved 175 disruptions against criminals involved in organised immigration crime. The recent interception at sea of the MV “Haddad”, which was detained by Greek authorities en route to Libya, is another notable success. There were weapons, ammunition and smuggled cigarettes on board and, had the vessel reached Libya, there is strong evidence that it would have made the return journey with migrants on board.
The task force is also working to enrich the intelligence picture. Officers have been deployed to the existing Frontex debriefing centres in Italy and Greece. There, they are assisting other agencies to gather intelligence from migrants arriving at external EU borders. This information is passed to the host member state for it to disseminate to law enforcement agencies.
The UK also engages closely with the European Migrant Smuggling Centre—which was mentioned by the noble Lord, Lord Rosser, and I think by the noble Baroness, Lady Prashar—which leads for Europol on organised immigration crime. The UK is a key contributor and we are working to improve the overall intelligence picture by encouraging countries to share information effectively with the centre.
In addition to our relationships at a European level, we are also engaging with our closest neighbours to create a strong joint response to migration. We are working closely with the French, Dutch and Belgians to increase the security of ports with links to the United Kingdom and increase co-operation against organised immigration crime. Such work has so far seen improvements in joint work on security measures at ports, intelligence sharing and returns. Activity will continue to determine what additional operational, technological and infrastructure assistance could be provided at relevant ports.
As well as pursuing the criminal gangs involved in immigration crime, the UK is also working with source countries to address the root causes of migration. Through our aid programme around the world we are growing economies and creating jobs. This in turn helps to build more effective states and societies, reducing some of the pressures to migrate. It also helps undermine the business model of organised crime groups. We are also at the forefront of the response to the crisis in Syria, where the United Kingdom has committed over £2.3 billion—our largest ever humanitarian response. The UK’s support is helping refugees to remain in host countries in the region and supporting host countries to accommodate them.
In Libya, the UK is supporting the Government of National Accord to regain control of Libyan borders and tackle the organised crime groups. Operation Sophia, the EU’s naval operation in the central Mediterranean, has already seen some success. Since its inception last summer, Operation Sophia has destroyed more than 120 smuggling boats on the high seas, apprehended more than 70 suspects and saved more than 15,000 lives. This is good progress on which we can build.
The UK survey ship HMS “Enterprise” has been participating in the operation. To add support during a surge of assets in October and November, we also contributed HMS “Richmond”. But the smugglers are of course adept at changing their tactics, so we must be aware of that and be prepared to respond. That is why we have agreed with EU partners to expand Operation Sophia’s scope to include activity to build the capacity of the Libyan coastguard and to prevent the trafficking of illegal arms into Libya. We remain committed to moving to the later phases of Operation Sophia, to prevent smugglers putting to sea, once the right conditions are in place. With a new Government in Libya, we have an opportunity to take this forward—and, therefore, what has seemed impossible may in the medium to long term become possible.
In May of this year, the Prime Minister announced that four military planners had deployed to the Operation Sophia headquarters in addition to the UK personnel already present. They are working on options to build the capacity of the Libyan coastguard and, in due course, we expect to support the delivery of this with a UK training team. This activity will help secure the coast of Libya and harden the operating environment for people smugglers.
The Prime Minister also announced that we will seek to commit a second ship to Operation Sophia to tackle arms smuggling to Libya. The UK has worked hard to secure a UN Security Council resolution authorising member states to take action to support the embargo. This was agreed unanimously last night. The arms that are illegally supplied from the Mediterranean reinforce violent armed groups, and Daesh in particular. Countering the flow of weapons and military equipment will support the wider effort to promote stability in Libya and a stable Libyan Government.
The work of Operation Sophia is just one element of wider UK efforts to support the humanitarian needs of migrants. The United Kingdom is providing £70 million to the Mediterranean migration crisis response. Some £60 million of this is allocated to Europe to provide lifesaving aid to migrants and refugees, as well as support to Governments to build their capacity to manage arrivals. At the EU-Africa Valletta summit, the Prime Minister announced a further £200 million in bilateral aid to Africa to deal with the root causes of migration and a €3 million contribution to the EU trust fund for Africa. I say that in response to the observations of the noble Lord, Lord Rosser.
In the Horn of Africa we are supporting the Khartoum process that was mentioned by the noble Earl, Lord Sandwich, which focuses on combating organised immigration crime and human trafficking in the region. The goal of the process is to encourage member countries to work in a co-operative manner to tackle the shared challenge of organised immigration crime. It aims to achieve an improved understanding of this threat and to establish ways to strengthen capabilities in the region. It is not easy and requires us to engage with certain regimes when we might otherwise not wish to do so.
The law enforcement approach outlined in the EU action plan against migrant smuggling is one element of the EU’s response to the migration crisis. This is complemented by the United Kingdom’s law enforcement, as well as wider activity such as Operation Sophia to meet the humanitarian needs of migrants, tackle the root causes of migration and respond to the ever-developing challenge posed by criminal people smugglers —and in that we maintain our intent. I thank noble Lords for their attention.
Baroness Prashar
My Lords, I thank all the Members of the House who have participated in this debate and the Minister for his response. This has been a very thoughtful and compassionate debate and some very good suggestions have been put forward. It is encouraging that we can discuss an issue of this nature with humanity and with some constructive thoughts. I underline my thanks to all the Members but, at this time of the evening, I do not wish to respond to each point that was made but to say that I beg to move.
EU: Operation Sophia (EUC Report)
Lord Tugendhat
That this House takes note of the Report from the European Union Committee Operation Sophia, the EU’s naval mission in the Mediterranean: an impossible challenge (14th Report, Session 2015–16, HL Paper 144).