Public Procurement

John Redwood Excerpts

Monday 13th May 2024 Commons Chamber

[The Parliamentary Secretary, Cabinet Office (Alex Burghart)]

I beg to move,

That the draft Procurement Regulations 2024, which were laid before this House on 25 March, be approved.

This statutory instrument represents a significant legislative step in implementing the Procurement Act 2023, which seizes the opportunity, following Brexit, to develop and implement a new public procurement regime for over £300 billion-worth of public contracts. The new regime helps to deliver the Prime Minister’s promise to grow the economy by creating a simpler and more transparent system that will deliver better value for money, reducing costs for businesses and the public sector.

The regulations bring to life and set out the practical detail necessary for the functioning of many of the Act’s provisions. They address many of the points of practical detail that are more appropriately set out in regulations given their detailed nature and propensity to change and need updating from time to time. Many of the measures set out the detail required to be provided in notices required by the Act, which allow contracting authorities to conduct their public procurement in an open, transparent and informative manner. They include the particular contents of various notices that will be used to communicate opportunities and details about forthcoming, in-train and completed procurements.

[Sir John Redwood (Wokingham) (Con)]

Does the Minister think the regulations are duly simplified so that it is feasible for the self-employed and very small businesses to have access to contracts? Is there any provision for breaking down contract sizes so that the self-employed and small businesses have more opportunity?

[Alex Burghart]

My right hon. Friend asks a pertinent question—one that was at the forefront of Ministers’ minds when the legislation was drafted and as it made its way through both Houses. A number of provisions in primary legislation are there specifically to increase the chances that small and medium-sized enterprises, which are more likely to be British, get a bigger share of the £300 billion-worth of public procurement. Those provisions include everything from the online procurement system that we are building—which will increase transparency and allow greater notification of pipelines, helping small and medium-sized enterprises to prepare for those procurements—to reduced red tape, which will take the burden off those SMEs and reduce their barriers to entry. We are hopeful that a lot of local businesses in his constituency and in mine will benefit from this landmark piece of post-Brexit legislation.

The contents I was describing would typically include the contact details for the contracting authority, the contract’s subject matter, key timings for the procurement process, and various other basic information about a particular procurement that interested suppliers would need to know. The provisions also cover the practical measures that authorities must follow when publishing those notices, such as publishing on a central digital platform and handling situations in the event that the platform is unavailable.

Beyond transparency, the instrument includes various other necessary provisions to supplement the Act that will be relevant in certain situations. We provide various lists in the schedules so that procurers are able to identify whether certain obligations apply in a particular case, including a list of light-touch services that qualify for simplified rules, and a list of central Government authorities and works that are subject to different thresholds. The regulations disapply the Procurement Act in relation to healthcare services procurements within the scope of the NHS provider selection regime, which has set out the regulatory framework for healthcare services procurement since its introduction in January this year.

The regulations also set out how devolved Scottish contracting authorities are to be regulated by the Act if they choose to use a commercial tool established under the Act or procure jointly with a buyer regulated by the Act. The provisions of the regulations apply to reserved procurement in England, Wales, Northern Ireland and Scotland, and to transferred procurement in Northern Ireland. The Welsh Government have laid similar secondary legislation that will apply in respect of devolved procurement in Wales, and if the devolved body carrying out that procurement mainly operates in Wales, elsewhere.

The Government have consulted carefully with stakeholders throughout all stages of the reform process, and we published our response to the formal public consultation on these regulations on 22 March. That consultation was a great success, evoking a good response from the various representative sectors, and confirmed that the proposed regulations generally worked as intended. Many stakeholders urged that certain matters be clarified and explained in guidance and training, which is a key part of our implementation programme that is being rolled out across the UK. The Government response demonstrates that we have listened to feedback, and confirms a number of areas in which the consultation led to technical and drafting improvements.

Once the instrument has been made, contracting authorities and suppliers will need time in order to fully adapt their systems and processes before go-live. As such, the Government have provided six months’ advance notice of go-live of the new regime before these regulations come into force, which will happen on 28 October this year.

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[Sir John Redwood (Wokingham) (Con)]

It is difficult to come up with a good system that has the right balance, because the taxpayer’s interest is very much in favour of economies of scale and availability, while the small business struggles to meet the possible volumes of a successful bid for a contract and to satisfy all the criteria that the large company finds easy to manage. I am grateful for the fact that the Minister and the Government generally have been thinking rather more about how small business and the self-employed can make a bigger contribution and how contracts can be broken down into more manageable sizes, both in primary legislation and now in the detail.

[John Spellar]

The right hon. Gentleman is absolutely right on that, but very often the primes get the contract and subcontract to the SMEs and put on a huge on-cost and profit margin. Those SMEs are therefore never able to grow properly, and they are stifled, because Whitehall prefers to deal with very large conglomerates.

[Sir John Redwood]

There will be that bias. Sometimes it is right, and it is always understandable, but Ministers and, above all, the senior officials implementing this new policy will have to bear that in mind. They will have to try to correct for the ease of going for a large company solution, where all the boxes will be filled impeccably and all the right things will be ticked, although that can lead to a contract disaster, because getting the electronic responses right is not the same as delivering the right good at the right price in all the right ways.

I have another worry. We are in an era of exciting and rapid change. Technology is changing even more quickly than over much of our lifetimes so far, as the Prime Minister was mentioning in his remarks this morning. None of us can be sure what opportunities artificial intelligence will produce in wider digitalisation, but we know that digitalisation will make an increasing contribution to, and have an impact on, service provision. So much of government is about the provision of personal services and administrative services, and so much of that can benefit from the intelligent application of these exciting new technologies, but they need careful handling.

The big problem in public procurement is when the innovators are moving so quickly that the invitation to bid is about things that are out of date; they are what the system has been used to handling and the state feels comfortable with. The state can define the old products and old services perfectly well, because it has experience of them, whereas maybe what is needed in certain cases is the innovative product or service. I remember innovating in industry in the past. Often, we had to be willing to license a competitor of our own breakthrough, to give people comfort that there would be some competitive check on costs and availability. Such things are complicated to model and to build in to big procurement systems, such as the state. It means that the state tends to lag and the private sector makes much more rapid advances, because people take more risk and are prepared to change what they wish to procure when they see something better. In the case of the state things have to go through many committees and many memos, and it is probably easier not to bother or to wait a few years until something has happened.

I do not have any easy answers. I understand that the Government and the Minister have the best of intentions, and they have come up with rules that they think are more flexible, but the proof of this pudding will be in the eating. I just emphasise that we need a system that is flexible enough to understand that sometimes it does not know what it wants, or does not know what is available, or that something that is available might be better than the thing people thought they wanted.

My final observation is that we have lost a lot of the self-employed in recent years for one reason or another, but the issues over tax status are part of the problem, with the toughening of the rules over IR35. I worry that a lot of self-employed people will struggle to get any work from the Government, because it is much easier for those procuring just to say, “It’s too much hassle; we would be to blame if this person were taking liberties with the tax system, and although they say they are compliant and self-employed, we aren’t so sure.” Of course, someone can become genuinely self-employed only if they win enough independent contracts. If a big part of procurement is not allowing them to win state contracts, it is much more difficult for them to become genuinely self-employed.

[Sarah Champion (Rotherham) (Lab)]

The right hon. Member makes a very good point. The self-employed have been telling me about the amount of administration they have to do even to be in the running. Also, they do not tend to find out about contracts. I hope that the regulations will extend their promotion and the length of time, and that the Government try to break down those contracts into smaller chunks, so that small British businesses can genuinely be in with a chance.

[Sir John Redwood]

I entirely agree. That is where the more transparent and simpler system will be very good, and we should give that a good trial. I am concerned about someone who is genuinely self-employed struggling to prove that they are sufficiently self-employed, and whether the state would want to take less risk on that. Again, I would like the Minister to put a stronger case to the Treasury that, perhaps, to have more successful self-employed people working for the state under contract, we need to review how we enforce and police their tax status.

[Mr Deputy Speaker (Sir Roger Gale)]

I call the Scottish National party spokesperson.

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[John Spellar]

It is true that the social weighting applied here is insufficient, but European countries also send a clear subliminal message to competitors, putting up, as it were, a sign saying “Just don’t bother.” When Germany did procure a design for naval vessels from Holland, the prerequisite was that they had to be built in German yards.

[Sir John Redwood]

Is there not also a strong national security argument for procuring all defence items in Britain and creating a more competitive market at home to have honesty on prices?

[John Spellar]

That is exactly right. One of the arguments for buying steel from, mainly, Sweden—and possibly from France—was “We do not produce steel of that quality here”, but if we do not provide the orders for that quality of steel, our plants will gradually stop producing it, and we will also lose the skills. That has been a constant row. The same has applied to trains. When I was a Transport Minister, Alstom came along, having taken over the Washwood Heath factory, and said, “Our problem is that when we go to corporate headquarters, we will be told that if we want to sell trains in France we must produce them in France, and if we want to sell trains in Germany we must produce them in Germany. Britain will buy from anyone; where do you think the investment goes?” That has been a regular theme.

During the period of Labour government—and I fear that it is probably still the same with this Government —we heard Ministers say, “We have to abide by these rules because otherwise we cannot expect other people to do so.” I say, “Join the real world, the world in which people do fight their corner, the world where people battle for their corner!” The real, deep irony is that the failure to protect our industry is also a failure to protect our industrial communities, and to protect not just the livelihoods but the life of those communities. We talk about left-behind towns, which are very much at the heart of this issue, but it has also happened to quite an extent in America. It drives a populist feeling that people decry, but which they have been instrumental in bringing about.

If the argument that we have to follow some theoretical rules, rather than be part of the practical world, was wrong previously, which it certainly was, it is even less sustainable now. What the Ukraine conflict has shown is the need for industrial capacity. When I say “industrial capacity”, I do not just mean a plant; I also mean trained personnel. I do not just mean scientists, high technicians and skilled trades—semi-skilled production workers with the ability to make the machines work and to turn materiel out are also a core part of this.

We have seen that drain and drift away, so when we are faced with an existential crisis and Ukraine is on the frontline for freedom against an aggressive and assertive Russia, it becomes incredibly difficult—regardless of whether we will the money out of the Treasury, which I accept is important—to get production ramped up because of the lack of skills throughout the economy. I accept that some of the equipment in the second world war was less technically advanced, but the allies were quickly able— America was astonishingly quick—to move civil capacity into war production. Although we often focus on the “whizz bang” stuff—the hi-tech stuff—a lot of it is about good machining, which requires those abilities and that capacity.

When I argue for maintaining capacity in the UK, it does not mean that we should not co-operate with other countries, but we should do so on the basis of ensuring that our interests get dealt with as well, which will be mutually beneficial in the long run. If we are able to play our part, we will have that greater industrial capacity, but we cannot be the universal donor. We also have to have a degree of reciprocation and investment coming into the UK.

As I said, I accept that the changes introduced by the regulations are an improvement, but they have still not broken the psychological grip inside the civil service, which is not interested in industry and does not rate it, even in the face of the Ukraine crisis and the world dividing up into trade blocs. I am asking not for Britain to be an outlier, but for Britain to become part of the international community, behave like a normal country and have prosperity spread out much more across the country. I think it is called levelling up—we even have a Department that is supposed to be dealing with that.

Debate on the Address

John Redwood Excerpts

Tuesday 7th November 2023 Commons Chamber

[Mr David Davis (Haltemprice and Howden) (Con)]

It is a privilege to follow the Public Accounts Committee Chairman. She will understand that I have a certain affection for her in these debates because of her position.

The hon. Lady made a comment about looking forward 30 years. The whole western world faces a paradox that goes back 30 years. In the 1990s, three massive things happened in the world: first, there was a dramatic reduction in tariffs, which led to a huge increase in global trade; secondly, there was the collapse of the Soviet empire; and finally, there was a dramatic acceleration in the creation and adoption of new technology. All those things raised well over 2 billion people out of oppression by starvation and out of political oppression. They changed the world dramatically for the better, but those dramatic changes have had a number of effects.

Today, we face a series of challenges in the western world, not just in Britain, that are more complex and more difficult to deal with than any I can remember since 1979, whether it is Ukraine and the series of wars that are breaking out, whether it is the migration that results from that, whether it is domestic challenges such as the impact on the wages of the western working class—much of the impetus for Brexit was the result of working-class wages across the west being depressed by competition with the rest of the world—whether it is the impact on public finances, which derives partly from that, or whether it is the impact on public services, which are failing not just in Britain but in many countries, to some extent for the same reasons.

That is why, unlike the hon. Lady, I welcome what I think of as the common sense in the King’s Speech. There are a number of sensible measures, including on crime and justice to promote safety, justice and closure for victims, which is important, and on net zero, where the approach is intelligent and measured, rather than headline driven. That is important—the old net zero strategy would not have survived the public reaction. Like the hon. Lady, I vehemently welcome the policy on smoking. We have done far too little for many decades to focus on public health, rather than patching people up in the last three years of their life, which is what our national health service has been reduced to doing. In education, we are building on some of our successes, including in PISA—the programme for international student assessment—and our international competitiveness. There is much to recommend in the proposals in the King’s Speech, particularly with respect to apprenticeships and vocational education. The Minister for Skills, Apprenticeships and Higher Education is brilliant and is making a great difference.

Broadly, the proposals are sensible, but the House would be surprised and disappointed if I did not find something to criticise in the Home Office proposals. I will not surprise the House—I am going to pick up on something that I think is a fundamental mistake. I hope that Ministers will think hard before they introduce the proposal, which has been aired in briefings in the last day or two, to allow the police to search homes without a warrant. This is one of the fundamental foundation stones of a free British society, along with jury trials and the presumption of innocence. The right not to have the state kick your door down and search your house without judicial approval is a massively important British value. If anybody has any doubt about that, I have two words to say to them: “Damian Green”. They should go back and look at what happened with the Metropolitan police’s handling of the case, as it were, of my right hon. Friend the Member for Ashford (Damian Green). The Leader of the Opposition was then the Director of Public Prosecutions, and he in effect struck down the Metropolitan police’s behaviour. We have to think about that very hard indeed, because the judicial control of the police is vital and must be preserved.

Beyond that, the education measures are good as far as they go—as I have said, particularly on skills—but I would go further, as I will explain in a moment. Indeed, all King’s Speeches are basically just frameworks, not the whole agenda for the coming year, and this one is the same. As a result, the last line of every King’s Speech is always the same:

“other measures will be laid before you.”

I want to talk about what I think those other measures ought to be.

What should those measures be? I think most of them should be in areas where the state is struggling to cope with the worldwide problem I have talked about arising over the last 30 years. By the way, it is not an accident that I say “30 years”; that covers Governments of both persuasions, and neither have managed—in some cases, I might say they have failed—to solve the things I am going to talk about. The one advantage we have when it comes to the problems I am about to lay out in education, health and housing—the three critical areas on which we need to go further—is that for the first two, technology may come to our aid to some extent. I, like the Public Accounts Committee Chairman, welcome the move on AI. I thought it was quite risky to have that conference, but it worked diplomatically. It has not got a solution yet, but that has got us on the first step.

Let me talk about health for a second. All parties have taken the approach for my entire lifetime, which is much the same as the lifetime of the health service, of putting more and more money into the health service. We are now talking about a huge amount of money; it swallows the entire amount of national insurance contributions, and what was supposed to cover health and pensions now simply covers health. We spend more money than the OECD average on health—that in itself is quite extraordinary—but it does not deliver. We can put all sorts of excuses in the way, but this is more about management than it is about money. Before we got to covid, from 2017-18 to 2018-19 we put about £3 billion extra into health in real terms—and what happened? Productivity went down by 0.75%. The next year, we put in £7 billion, and productivity went down by over 2%. That was before covid started.

Those dry numbers sound bad, but they do not quite carry the terror of the actual effect, and I am going to give an example from my own constituency to explain what I mean. I had a constituent whose name was Richard. He had had cancer, and had been operated on and cured, and as a result he had regular six-monthly check-ups thereafter to watch for any outbreak. But through administrative failure, he did not get the check-ups, so was at least six months behind the timetable. We all know that the later we diagnose a cancer, the more difficult it is to solve. The operation he was supposed to have was then delayed as well, and it got to the point where basically there was no chance of recovery for Richard. He came into my life, as it were, as I was his constituency MP and his family wanted him out of hospital for Christmas so that he could die among his friends and family rather than surrounded by strangers. That is what we are talking about thousands and thousands of times over. That is the impact of this failure. I think there are a lot of things we can with respect to the re-management of the health service, but I will talk about one.

[John Redwood (Wokingham) (Con)]

Is my right hon. Friend aware that the Office for National Statistics published figures for the three years from 2020 to 2022, which state that public service productivity in general fell by an unprecedented 7.5%? That means that we needed to put roughly £30 billion extra into public services to achieve the same thing.

[Mr Davis]

My right hon. Friend is right: it is a systemic problem. It does not just affect Britain or the health service. Indeed, I think that numbers for those years for the health service were about 25%—so huge, huge numbers. I bring this back to the reality of the individual. If we delay diagnosis and treatment, we sentence people to death. It is as harsh as that.

I would like us dramatically to increase the amount of diagnostic capacity we have. If we look at OECD numbers on CT scans, I think we are third from worst. This is why I say it is not a single Government problem—we do not get to be third from worst in one term; it happened over the course of the whole 30 years. On MRI scans, we are the worst in the OECD. How on earth a country such as ours gets to that position is astonishing.

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[John Redwood (Wokingham) (Con)]

I have declared my business interests in the Register of Members’ Financial Interests.

I hope the Government are listening to the right hon. Member for East Antrim (Sammy Wilson) on those important matters for Northern Ireland. It is vital that there are changes to the Windsor framework, so that Northern Ireland is properly a part of our United Kingdom and can accept our commonly agreed laws on everything from taxation through to the arrangements over products and trading.

I welcome very much the emphasis in the King’s Speech on the United Kingdom’s producing more of our own oil and gas in substitution for that which we are currently importing. The logic of substitution is most obvious in the case of gas. We have gas pipelines already installed to bring gas from the fields to the mainland, with capacity in them because gas output has been declining; and, of course, if we deliver it directly through gas pipelines we have none of the extra cost and trouble of transit involved in importing liquefied natural gas, usually from the United States or Qatar. Those who are keenest on the road to net zero should recognise that having our own gas down a pipe greatly reduces the amount of world carbon dioxide because so much more carbon dioxide is generated if it is necessary to liquefy the gas, to transport it for long distances, and then to recreate it as gas when it arrives. All those are very energy-intensive processes which we do not need if we generate more of our own gas from the North sea.

I have good news for Ministers. Let me remind them that although they say they think we need a bit of additional legislation for future licensing rounds, what we really need to do is concentrate on developing the existing fields and the new discoveries that have been well known about, in many cases, for a great many years, and maximising the output of what we already have so that the gas and the oil come more quickly and at lower cost, because we need it now. Most of our constituents still need gas for their domestic heating and will need it for the foreseeable future, most of our industrial plants run on gas as their main source of energy, and most of us have petrol or diesel cars, so we still need the fractions of oil to run our transport. It is important for us to get on with that—and, as the right hon. Member for East Antrim has said, another great bonus for all of us, including the Treasury, is that the sooner we get that oil and gas landed, the sooner we will secure a big increase in tax revenues from which we could benefit, enabling us to get the deficit down and support the public services that we wish to see.

I am very pleased that the King’s Speech began with the mighty topic of the economy. I am sure that the Government and the Prime Minister would agree that what we do over the next year to get inflation down more quickly, to bring about faster growth to create more and better-paid jobs, and to secure the extra investment that we want to see is absolutely vital. Again, I have good news for the Government. I think there are measures that they can take in a future Finance Bill—which, I am sure, will constitute part of our proceedings over the next year—that would help to achieve all those aims. They are not incompatible, and we do not have to wait. Some people seem to think it is necessary to sequence it and to spend a year of misery—with a massive credit squeeze and an austerity Budget—to get inflation down before we can think about doing the other things, but if we cut the right taxes, we can bring forward the reduction in inflation, and that, of course, has a direct knock-on effect on the cost of running public services. One of the reasons we have seen such a big increase in public spending in the last year or so is the massive rise in inflation, because so many things are directly geared to the inflation rate.

So, Government, let us have a year of temporary tax cuts on energy, because British energy is far too expensive. It makes us much less competitive, and it is a burden on household budgets. I would pay for that— because I do not want to increase the overall deficit—by selling all those NatWest shares that we still have. Interest rates have gone up a lot, and banks should be making a lot more money. Let us just sell all the shares and use that for a one-year advantage while the oil and gas prices are still very elevated, and to ease the transition from slow growth to higher growth and to a faster reduction in inflation, which will then help reduce the deficits.

We also need measures to help small business and the self- employed. It is of great concern to me, as it should be to many other Members, that we have 800,000 fewer self-employed people today than were known about, at least, in February 2020. Some of that is due to covid and lockdowns or to natural retirements, but some of it is due to the sharp change in the tax system called IR35, which took place in two tranches, one at the end of the last decade and one at the beginning of this one. It is now very difficult for people to grow businesses, particularly if they want contracts from other businesses. This has put many people off, and we are not seeing the new generation of self-employed people coming through that we have seen in previous generations—and that is mightily important, because they provide much of the flexibility in our economy, and can also provide extra capacity. Such measures would also help to provide worthwhile things for people to do, because some will be currently without a job and will be on benefits generally. So, Government, change the tax system back to the pre-2017 one which allowed a phenomenal growth in the number of self-employed people, and helped the workings of not only products and services markets but the job market itself.

We all have many small businesses in our constituencies and we know how important they are to the services and output of our local community. We know how flexible they are, how hard so many of them work and how prepared they are to go the last mile to win clients and to look after clients and customers. They need a tax break, and the first thing we should do—now that we no longer have to accept the EU rules on VAT registration —is to have a big increase in the threshold level at which businesses register for VAT, because this is now a major constraint. I am sure we all know small businesses that turn down work or close down for a month extra during the year because they do not want to go over the £85,000 turnover, with all the burdens of the compliance, regulation and paperwork that that would cause, as well as having to put 20% on prices and so forth.

Let us allow small businesses to enjoy their flexibility for longer and to get to a bit bigger size—let them have one or two employees—before they have to go through all the hassle of registration and the legal pressures that that generates. I think that would generate more revenue from other types of taxes, and even on the strange Treasury arithmetic it would be quite a cheap item. For example, we could easily pay for it out of modest improvements in productivity, which we will need to ensure if we are to deal with the collapse in public sector productivity identified by my right hon. Friend the Member for Haltemprice and Howden (Mr Davis). There must be ways to do something about that, and I believe that the Chief Secretary to the Treasury is working on them.

My final point relates to the Bank of England. The Bank is independent in the setting of the base rate and the work of the Monetary Policy Committee, but it is not independent in managing the mighty portfolio of bonds that it currently owns on behalf of the institution and wider taxpayers. The proof of that is the fact that successive Chancellors from Alistair Darling onwards signed a concordat with the Bank of England giving it permission to buy bonds and agreeing to pay any losses, should losses be made, when it came to sell them or when they matured. The Bank of England now wishes to sell £100 billion-worth of bonds over the next few months, now that they have crashed on the markets because of the Bank of England’s changes in interest rate policy and bond policy, meaning that huge bills are being sent to the Treasury. I believe that the bill was £24 billion of losses in the first four months of the current fiscal year, and the theoretical liability is over £170 billion of losses of that kind and of the kind of running losses due to the way in which the Bank holds bonds at the moment.

I would like to advise the Chancellor and the Governor of the Bank of England to look at what the European Central Bank is doing. It too made the colossal mistake of overinflating, over-creating money and buying too many bonds at very expensive prices, just as the Bank of England did, and it too ended up with the predictable excess inflation that we have seen. But the ECB is not panicking out of those bonds; it is holding them until they repay, which will result in fewer losses for it. There will still be losses, because it often paid more for the bonds than their actual repayment value, but it is not incurring big losses by selling them at very depressed prices on the market, now that the central banks have decided to smash the asset values of the bonds that they spent quite a lot of time acquiring just two or three years ago in many cases.

We need to do this because the Treasury should not have to make those huge losses and because money has now lurched from being crazily too expansive and likely to generate inflation to being far too tight and likely to overshoot in slowing the economy too much. So please, Government—listen, watch and on this occasion I say learn from the European Central Bank, which seems to be getting this just a bit more right than we are. Then we might start to make progress in bringing together the perfectly compatible aims of getting some growth, which we will not get if we have too severe a credit squeeze, and getting inflation down, which could be speeded up with the right type of tax cuts.

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

I certainly welcome this King’s Speech, particularly because at the end of the King’s Speech we saw—I see a former Lord Chancellor, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling), looking at me with a beady eye—the reintroduction of an important tradition: the Lord Chancellor went backwards down the stairs, rather than the modern innovation that we have been infected with in recent years of the Lord Chancellor turning his back on his sovereign. So we have one occasion when the Tories, after 13 years of Government, have at last turned the clock back. Evelyn Waugh complained that in all his life the Tories had never turned the clock back, but we now have one good example.

In the King’s Speech, we also have an opportunity for growth. I endorse every word said by my right hon. Friend the Member for Wokingham (John Redwood) on growth, the need for growth and the need for us not to treat the withdrawal from quantitative easing in the way the Bank of England is doing it, which is insanity. The men in white coats, who were once called upon by John Major, could be sent in a different direction on this issue.

Two key parts of growth are set out in His Majesty’s Gracious Speech. The first is in the comprehensive and progressive agreement for trans-Pacific partnership and in having legislation for that. Free trade is the real opportunity to make this country and the world richer. My right hon. Friend the Member for Haltemprice and Howden (Mr Davis) pointed out that, since 1990, the growth in free trade has had a phenomenal effect in reducing absolute poverty from 36% of the globe’s population to 9.2%—from about 1.9 billion people to seven hundred and something million people. That phenomenal success in prosperity comes from free trade. With the CPTPP, we have the opportunity to push that further, but we should go further still.

We should get rid of tariffs and barriers to trade unilaterally, because opening up our market is beneficial for our consumers. Protectionism is always the provider of the port for vested interests, but free trade is to the advantage of consumers and individuals. So yes, the Government are going in the right direction and the King’s Speech is going in the right direction, but I would encourage His Majesty’s Government to go further, as I would on the issue of using the Brexit opportunities.

We have a chance to become a light-touch regulated economy that can be efficient and competitive. Again, we should be challenging vested interests. Many Members will remember that, when the REACH regulations came in, the chemical industry was up in arms, saying “These are terrible, awful European innovations. We don’t want them, they are costly, they are ghastly.” Then industry said, “Oh, these regulations are marvellous because they keep out any competitors.” We want to change things like the REACH regulations, so that we recognise regulators around the world that provide a similar level of safety, rather than allowing regulations to be used as a means of covert protectionism. That is the challenge for this Government.

Using these advantages is mentioned in the King’s Speech; we need to use them aggressively. I have an interest in financial services, declared in the Register of Members’ Financial Interests, but these advantages should be used particularly in financial services, where we should restore our position as one of the most competitive areas in the world. We should be using them in agriculture to take the burden off the backs of our farmers because, when I advocate free trade, it is only fair that the quid pro quo is that we allow those who produce to do so in an easier way—in a way that takes burdens off their backs.

Talking of taking burdens off backs, there is a part of the King’s Speech that is essential, but does not go far enough. A few weeks ago, my right hon. Friend the Prime Minister made an excellent speech about lifting some of the net zero burdens and some of that will be coming forward to this House in the coming months, but it is nothing like enough. On the motor cars issue, most of the regulations, as I think my right hon. Friend the Member for East Antrim (Sammy Wilson) pointed out, will remain and will still make it harder for people to buy cars; they will make it more expensive. That is a burden on British people. We want to be getting rid of things such as that. We do not want to force people to do things; we want the technology to be there first so that they want to do it. No one had to regulate to make people give up the horse and carriage and move to the motor car—the horseless carriage, as I used to call it—even though His Majesty came to Parliament in a horse and carriage. They did so not because of a regulation or a penalty, but because market forces meant that we favoured the motor car. If an electric motor car is so good, people will buy it; if it is not so good, they will stick to petrol—I am certainly going to stick to petrol for the time being.

[John Redwood]

Does my right hon. Friend agree that it does not work in its own terms? If somebody gets an electric vehicle today and goes home and plugs it in, they will have to burn more gas in a gas power station, because there will not suddenly be more renewable power to recharge that car.

[Sir Jacob Rees-Mogg]

My right hon. Friend is absolutely right but at least, thanks to this King’s Speech, it may be a little bit more British gas that we will be getting out, and that of course should be pushed further. There has been some talk that the proposals have been watered down. Well, they should be watered back up again, so that we get as much out of the North sea as we possibly can. It is in our economic interests and our environmental interests because the emissions are lower when we use domestically produced resources. But, as I say, we have to go further.

We have heard the news about our steel industry. The reason our steel industry is being changed, so that we will have no pure steel manufacturing, is because of Government policy. It is because of the emissions trading scheme. It is because of having the third most expensive electricity costs in the world. It is about putting burdens on industry that make it impossible for it to operate and this utterly bogus view that, if something is made in China, the emissions are Chinese and, if it is made in the UK, they are British emissions, even if the steel is used for exactly the same purpose. This is the ridiculous thing about Drax. The chips put into the Drax machine count as Canadian emissions even though they are burnt in the UK. This is barmy in wonderland stuff. We need to be putting British industry first, and not using silly statistics—legerdemain of carbon emissions—to try to pretend that we are doing something that we are not.

This ties in with the growth agenda. Let us look at what we have already achieved. Since 1990, the UK has reduced emissions by 44.1%, the United States has reduced emissions by 2.6 %, and the People’s Republic of China, our red friends, has increased emissions by 426.5%. We have done our bit. Our economic growth has been lower in that period than it otherwise would have been because we have forced upon ourselves the high cost of energy, which the Americans and the Chinese have not done.

Therefore, we need a growth strategy with cheap energy, but there are problems that we have to deal with. There is a bit about enforcing the rules against the small boats, but we have to go further than that. We are not building enough houses, as the Leader of the Opposition pointed out. We are not building the infrastructure for 606,000 net migrants to come to this country a year, and we are finding, as we see there is trouble on our streets, possibly even on Armistice Day and Remembrance Sunday, that the integration that we hoped we had in this country is not as deep as we thought it was. That is something that should concern us. I thought that we could be very proud of the integration that we have in this country and the good relations, and we want to keep those, and the way to keep them is to control migration and to have it at levels that allow for integration to take place.

Therefore, I am disappointed that we are still focusing on illegal flows. I am afraid we are caught up in the HMT-OBR understanding of migration that is wrong because it focuses on total GDP, rather than GDP per capita. We are actually making ourselves poorer as a nation by the excess of migration that we are having, and we are risking what I might call the comfort of the nation—the ease with which we all live together—by allowing the arguments of countries away from the United Kingdom to be heard on the streets of the United Kingdom, which is unwelcome. We want a growth strategy, we want cheap energy, we want to control migration, but we do not want to abandon our ancient liberties.

I was not planning to mention this, but I was inspired by my right hon. Friend the Member for Haltemprice and Howden, who is standing at the Bar of the House, when he talked about warrantless entry. If the police always got things right, we might think that was a good idea, but over the last few years we have had any number of problems of police behaviour and police leadership.

I say that cautiously, and I concentrate on leadership because when we go around this Palace, we speak to as fine a body of men and women as we could hope to meet, who keep us safe every day, and whenever I meet constables in North East Somerset, I find exactly the same—fine, brave people who look after us. But their leadership, we must acknowledge, has been pretty poor, and this seems to me not the time to give them a power that goes against one of our most ancient constitutional safeguards.

I know that there is a rule in this House that discourages tedious repetition, Madam Deputy Speaker, so I hope I can assume that the House was not paying sufficient attention in March 1763 to a comment made by our old friend Pitt the Elder, because he said:

“The poorest man may in his cottage bid defiance to all the forces of the Crown. It may be frail—its roof may shake—the wind may blow through it—the storm may enter—the rain may enter—but the King of England cannot enter!—all his force dares not cross the threshold of the ruined tenement!”

That is such an important liberty. It does not mean that the police cannot run in after someone if they are caught in the act, but it means that if they are to come through someone’s door, they need evidence and a warrant. It is a foundation of our liberties, and I do not think a King’s Speech, as a prelude to a manifesto, is a place in which to water down our ancient liberties.

UK Automotive Industry

John Redwood Excerpts

Monday 18th September 2023 Commons Chamber

[Ms Ghani]

I would love to. More importantly, I was recently at a site where we saw trucks that used hydrogen, ensuring that construction sites achieve their net zero ambitions. Leyland will not be forgotten, due to my hon. Friend’s hard work.

Although we are not reinventing the wheel, we are witnessing the biggest transformation this sector has gone through since the first Ford models came off the production line. New vehicle technologies are emerging and shaping our understanding of mobility daily.

In the transition, the UK’s aim is to lead the future by creating it. Our primary objective is to boost private sector investment across the whole of the UK and create the right conditions for all businesses to innovate, by giving them the confidence to do so. That is why Government have created a comprehensive and long-standing programme of support, which includes the Advanced Propulsion Centre, the automotive transformation fund and the Faraday battery challenge—all tangible interventions that industry can access. We believe that, through those programmes, we can de-risk private investment in R&D, fast-track the commercialisation of new technologies and unlock the industrialisation of our EV supply chains.

[John Redwood (Wokingham) (Con)]

Would the Minister like to give us a few thoughts on what she thinks the opportunities are for synthetic fuels, sustainable fuels and hydrogen? How will they fit in around her battery vision?

[Ms Ghani]

My right hon. Friend’s views on electric vehicles and zero emissions are well documented. As I mentioned, a hydrogen strategy is also in place. I have been to a number of projects where vehicles are using hydrogen to ensure that that technology is exploited and that there is supply and demand in the chain, too. We are looking at sustainable alternative fuels not only in the automotive sector but in the aviation sector, so it is not just in that space. All alternative fuels will be investigated.

The future of the auto sector is electric—although I know that my right hon. Friend would like it to be much wider—automated and connected. The UK is well placed to consolidate its position among global R&D leaders as these technologies begin to commercialise, creating jobs and valuable new services for our businesses and communities. Our flagship Commercialising Connected and Autonomous Mobility programme will bring benefits across the UK. The Centre for Connected and Autonomous Vehicle’s recent £66 million Commercialising CAM programme 2025 aims to create an early commercial market that could be worth £42 billion by 2035. This innovation will save lives, create jobs, enable more efficient movement of people and goods, address chronic driver shortages, and better link under-served communities to vital services. As part of the programme, on 5 September, I was pleased to announce £18.5 million of public grants to 13 projects and 43 organisations across the UK to strengthen our capabilities in the CAM supply chain. I then had first-hand experience of a self-driving vehicle with Wayve, near King’s Cross. These technologies are here. They are no longer something from science fiction. Today, we can take automated bus journeys in Didcot and Edinburgh, with more world-class automated passenger and freight services to follow in the coming months.

In addition, through Government policies, we are enabling future mobility in the UK. We launched the full local electric vehicle infrastructure fund in March 2023. Following a pilot, it provides a further £381 million over the next two financial years to deliver tens of thousands of local charge points across England. Furthermore, to enable long-distance journeys, the rapid charging fund will future-proof electrical capacity at strategic locations to prepare the network for a fully electric car and van fleet—not just cars.

Tata Steel: Port Talbot

John Redwood Excerpts

Monday 18th September 2023 Commons Chamber

[Ms Ghani]

It is unfortunate that the hon. Member decided to politicise such an important sector. It was not me but Gareth Stace for UK Steel, the trade association for the UK steel industry—the voice of the country’s steel manufacturers—who said:

“This is a really important day for our steel sector in the UK, with the Government showing a real commitment to the future of steel making here in the UK. We will get a true transformation of our sector to create steel for the net-zero economy, something which our customers are asking us for. We have the ability to completely transform our sector and boost the net-zero economy in the UK. We can really seize the opportunity to increase production in the UK and increase exports. We all know that a net-zero economy will need more steel, not less.”

The hon. Member is putting on a very poor display over a serious decision that has been in discussion, I am told, for more than a decade. I have spoken to Ministers who have held the portfolio over many years before me, and they tell me that these matters are nothing new.

More importantly, the hon. Member knows that the blast furnaces were at the end of their life. The right decision is to provide certainty, security and continuity, and that is exactly what we are doing. The UK is a world leader in producing steel, but we need to decarbonise, and this is the best way of ensuring and guaranteeing jobs, of which there are 8,000 on the site and 12,000 in the supply chain.

As well as the £500 million, £100 million has been put together for a group to consult and work with the unions, the staff, the Welsh Government and the Secretary of State for Wales to ensure that the transition is as appropriate as it can be and not so challenging for the people who are impacted. The proposal is to go for electric because other energy sources are underdeveloped. If the hon. Member will reflect on what is happening in Europe on hydrogen, for example, he will see that nothing else can work at this scale and within the tight timeframe that we want to work in to ensure that the site continues to be viable not only for manufacturing steel in the UK and supporting all the jobs in the supply chain but to support Wales, too.

The proposal will also transform the Welsh community and the Welsh area. A huge amount of work is taking place with the freeport, and a huge number of businesses and jobs will be coming out of the transformation to green steel. It is unfortunate that the hon. Member cannot recognise that, without this decision, there would have been continued uncertainty, no security for the staff and definitely no security for the UK steel sector.

[John Redwood (Wokingham) (Con)]

Have the Government ascertained that there is enough old steel and metal around for the recycling facility? Do their wider plans for steel in the United Kingdom include retaining capacity to produce new steel?

[Ms Ghani]

My right hon. Friend is always absolutely hot on these topics. There is enough steel, because we export so much of it and we can now use it on the site. Considering the age of the current furnaces, the reality is that electric arc furnaces are, within the timescale, the best way for us to transition. There is of course a supply chain in place that enabled Tata to put the business plan forward, for it to commit a substantial amount of money, and for us to support its plan.

G20 Summit

John Redwood Excerpts

Monday 11th September 2023 Commons Chamber

[The Prime Minister]

I refer the hon. Gentleman to my previous answer on Mr Johal. Most recently, the Foreign Office Minister met Mr Johal’s family to discuss the case in detail.

Turning to the hon. Gentleman’s other points, on our investment partnerships, the British investment partnership approach with India, for example, has invested over £2 billion to support 600 different enterprises, employing about half a million people. That is just to give him some sense of the scale of the alternative projects we are involved in.

Lastly, I turn to the hon. Gentleman’s point, which the Leader of the Opposition also raised, about the US Inflation Reduction Act and the approach of other countries. Neither seem to recognise that the approach we have taken is working for the UK, not least with the recent announcement of a £4 billion investment in the UK by Tata, which represents the single largest investment in our auto industry, potentially ever, to build a gigafactory here. That was followed by investment by Stellantis and BMW to secure future electric vehicle manufacturing in the UK. Any which way we look at it, our auto manufacturing sector is receiving record amounts of investment to make the transition to electricity-oriented vehicles. That is because of the tax, regulatory and incentive regime we have put in place, which is delivering real jobs and real opportunity for the British people.

[John Redwood (Wokingham) (Con)]

Did the Chinese representatives give any indication of when they might stop their big increases in carbon dioxide and start to reduce them? Does the Prime Minister agree with me that it makes no sense for the UK to rely on Chinese imports of electric vehicles, solar panels and other green products when they are so CO₂-intensive in their production, and deny us the jobs and added value?

[The Prime Minister]

My right hon. Friend makes a good point. He will see in the G20 declaration a commitment by all members recognising the need to peak emissions in the next couple of years. To his broader point, that is why the Government have consulted on measures to address carbon leakage. It is absolutely right that there is a level playing field, and that if we take action here it should not come at the cost of British workers if it ultimately makes no difference to global emissions. That is why we have consulted on proposals on carbon leakage, and I very much welcome his thoughts on that.

Northern Ireland Protocol

John Redwood Excerpts

Monday 27th February 2023 Commons Chamber

[The Prime Minister]

This is about ensuring the free flow of goods within our United Kingdom; that is what the green lane is there to do. It was always going to be the case after we left the European Union that sending things to the European Union from the UK would be different. What this agreement is about is prioritising trade within the United Kingdom’s internal market, and the green lane that we have delivered through this framework does exactly that.

[John Redwood (Wokingham) (Con)]

Who will decide which EU laws will apply in Northern Ireland, and on what basis will they make that decision?

Tributes to Her Late Majesty the Queen

John Redwood Excerpts

Saturday 10th September 2022 Commons Chamber

[John Redwood (Wokingham) (Con)]

We meet together in mourning. Once again, our late Queen has united the nation, but this time, unfortunately, she has united us in grief and our common sense of loss. We here in Parliament suspend our differences, our party and our political views, because something so large has happened—that constant in our national life who has always been our Queen is no more.

All those of us here who are all privileged to have supporting roles in public life have learned a great deal from observing just how well the Queen carried out all her public service over the years. Everyone here has met her at invitation at Buckingham Palace, or at a national event in London, or, perhaps, hosted her in their constituency—some of us had the honour on many occasions to be with her and to see her. What always came across to all of us was just how much she respected every person and every institution that she visited. She showed that respect by impeccable manners and great courtesy—always on time, always properly briefed, always appropriately dressed for the occasion.

But, as so many have said from their personal experiences, there was something so much more than that. She was not just the consummate professional at those public events: there was the warm spirit, the personality, and above all the understanding that everyone else at that event was terrified that something was going to go wrong, that they had not understood the protocol, or that there was some magic way of doing it—as my right hon. Friend the Member for Welwyn Hatfield (Grant Shapps) was explaining—that they had to get right. At those public events, the Queen always relaxed people and showed them that there was no right way, because she was there for the people; she was there for the institution; she was there for the event. That is what we can learn from.

Of course, she was also Our Majesty. She was the embodiment of the sovereignty of people and Parliament; she represented us so well abroad and represented us at home, knowing that as a constitutional monarch, she represented us when we were united. She spoke for those times when we were gloriously happy and celebrating, or she spoke for those times when there was misery and gloom and she had to deal with our grief and point to the better tomorrow. That was why she held that sovereignty so well and for so long—a constitutional monarch who did not exercise the power, but captured the public mood; who managed to deal with fractious and difficult Parliaments and different political leaders, but who was above the politics, which meant that our constitution was safe in her hands. I wish her son, the new King, every success in following that great lead as he has told us he will do, and I can, with others, say today—“God save the King.”

UK Energy Costs

John Redwood Excerpts

Thursday 8th September 2022 Commons Chamber

[The Prime Minister]

Instead of taking the Opposition’s approach, we are taking an approach that is pro-growth, pro-business and pro the investment we need for our country’s energy security.

[John Redwood (Wokingham) (Con)]

Does the Prime Minister agree that we are too short of energy but have plenty of taxes, and that if we had an over-supply of taxes, as the Labour party wants, we would have less supply of the things we were taxing?

[The Prime Minister]

My right hon. Friend makes an extremely good point. The reality is that we cannot tax our way to growth. The policy that I am setting out today is all about helping people with their energy costs, as I promised, and making sure that we have the long-term energy supplies that we need for our country.

--- Later in debate ---

[Mr Rees-Mogg]

That is structurally wrong. Taxes need to be certain. If we are to encourage investment—and we need investment in this country—the tax policy has to be set for the long term. We cannot retrospectively pick people’s pocket; we need to tell them what the charge will be beforehand and keep it clear.

[John Redwood]

Would the Business Secretary like to remind the House that the Republic of Ireland deliberately chose much lower corporation tax rates than the rest of the advanced world and collects a far bigger proportion of its economy in taxes on business than we do?

Northern Ireland Protocol Bill

John Redwood Excerpts

Committee stage
Wednesday 20th July 2022 Commons Chamber

[Stephen Doughty]

It is a pleasure to see you in the Chair, Dame Rosie, for the second part of this debate. I will speak to new clause 12 in my name and those of my right hon. and hon. Friends.

In the debate so far, we have focused, rightly, on the Henry VIII powers that the Government seek to gift themselves, but of course the problems with this Bill stretch far beyond the sweeping powers that Ministers are attempting to take. We seem to have forgotten at various points during its passage that this is a Foreign Office Bill because it relates to an international treaty and our international obligations. Indeed, there are many crucial issues at stake in that regard, because, as has been recognised by right hon. and hon. Members in all parts of the House, the Bill is incompatible with international law. It is not just those who have spoken up in the House who have said that. The Bingham Centre states unequivocally:

“The Bill is in clear breach of international law”

and that the breach is “without legal justification”. It, along with many others, has argued that the Government’s so-called defence of the Bill, grounded in the doctrine of necessity, is completely baseless. As the shadow Foreign Secretary my right hon. Friend the Member for Tottenham (Mr Lammy) set out in great detail on Second Reading—many more have done so subsequently —each of the elements of the justification for the doctrine of necessity fall flat. This is a difficult situation that we all want to see resolved, but it is not a situation of grave and imminent peril, no more than the doctrine of necessity is an excuse for countries to abandon other responsibilities or dig themselves out of holes.

Similarly, the Government’s proposed actions are not the only way possible to resolve the issue. Although imperfect, there are clear mechanisms within the protocol for resolving disputes, meaning that the passage of this Bill is not the only way to resolve these challenges. Indeed, the Government themselves continue to maintain that they seek a resolution with the EU through negotiating, which is of course what Labour Members would want to see. Therefore, not only is this Bill a clear obstacle to these apparent efforts, but for as long as a solution is even remotely possible through negotiation, breaching the obligations of the protocol cannot be the only way to protect the UK’s interests. We have discussed at great length the fact that trust is at an all-time low with this Government, and this will do nothing to help to rebuild it. Unilateral action will not find us a way forward. Either the Bill is necessary because the Government are certain that negotiations will not lead to any kind of resolution or they still hope for a breakthrough with the EU, rendering the Bill unnecessary under the doctrine.

Given this confusion and the flawed justifications offered, we have tabled new clause 11—although we do not seek a Division at this stage—which would prevent powers of the Bill from coming into effect until an authoritative and independent expert set out whether it is consistent with international law. The Government keep stating their position, but that is their interpretation. The problem is that we do not trust the Government on this, and neither do many others outside the House, while many have criticised the Bill from an independent perspective, so it is important that we understand all those views. An independent expert could make a determination on the legality of this issue before any clause unilaterally altering the protocol came into effect.

There was a time when having to table an amendment to this effect would have been unthinkable—a time when we would have legitimate political differences here in the Chamber but would never wilfully break with our international obligations as a first recourse. As I said, we do not intend to seek a Division on new clause 11, but I hope the other place will look carefully at the Government’s legal justifications to see whether they stack up. I do not believe they do and neither do many others.

[John Redwood (Wokingham) (Con)]

Has the hon. Gentleman or his party ever once lobbied the EU in public or in private to shift its position to accommodate the very reasonable grievances and to deal with its illegalities under the protocol?

[Stephen Doughty]

I do not agree with the last part of what the right hon. Gentleman said, but actually I sat around the table with EU ambassadors and, indeed, the EU ambassador to the UK to discuss these very issues just weeks ago, so I have sat down in private, and we have said so publicly on a number of occasions. The right hon. Gentleman should be reassured on that point.

It is not just Members on the Opposition Benches who have talked about the incompatibility with international law; Government Members have done so, too. The former Prime Minister, the right hon. Member for Maidenhead (Mrs May) said:

“My answer to all those who question whether the Bill is legal under international law is that…it is not.”—[Official Report, 27 June 2022; Vol. 717, c. 64.]

The Chair of the Northern Ireland Affairs Committee, the hon. Member for North Dorset (Simon Hoare) said:

“Respect for the rule of law runs deep in our Tory veins, and I find it extraordinary that a Tory Government need to be reminded of that.”—[Official Report, 17 May 2022; Vol. 714, c. 550.]

Beyond this House, the Taoiseach has said:

“Unilateral action to set aside a solemn agreement would be deeply damaging”,

and would

“mark a historic low-point signalling a disregard for essential principles of laws which are the foundation of international relations.”

Is that what global Britain has come to mean to this Government?

The Bill must comply with Britain’s international obligations, or we risk a collapse of our global reputation, discord with allies at a time of crisis in Europe and the risk of a raising of trade barriers during a cost of living crisis where billions are already struggling to make ends meet. That is why we want to see new clause 12 put to a separate vote today, because a piece of legislation that runs even the remotest of risks of breaching the UK’s international obligations should never pass this House, but we must be prepared if it does.

Under new clause 12, if an international court or tribunal found that actions taken by the Government were inconsistent with the UK’s legal obligations, the Government would have to immediately set out to Parliament what steps they would take to rectify the breach. Quite simply, once the Bill is passed, if the Government’s actions are found to be unlawful, it is only right that a Minister is brought to the House to explain how that has come to be and what they will do to put it right. The Government should not be afraid of that measure, because if their arguments hold sway, it would not be needed, although many others out there disagree with the position they have taken. There must be a mechanism to ensure that we can urgently restore our compliance and mitigate further damage to our global reputation, if indeed this Bill is found to be unlawful. We should not need to be pushing for this change, but if the Government insist that this is their chosen course, Members are duty-bound to do everything in our power to ensure that the Government do the right thing.

In the TV debates in the latest Tory leadership contest, the Foreign Secretary has been boasting about this legislation as an example of her effectiveness and her ability, but we see it differently. If she were so effective in her role, she would get back around the negotiating table, rather than countenance the UK breaking the international legal framework it should be championing, with huge impacts for Britain’s wider reputation and effectiveness. [Interruption.] The Minister, who I have a great deal of respect for, is chuntering from a sedentary position, but the collapse in trust in this Government has been made clear to us. With this zombie Government, it is likely that that trust has fallen to an even lower level.

I will speak briefly to some of the other amendments. I will not rehearse the arguments we have already made about the Henry VIII powers and the related amendments that we discussed in the earlier debate, except to add that many reasonable amendments have been tabled, including amendment 2 by the Chair of the Justice Committee, the hon. Member for Bromley and Chislehurst (Sir Robert Neill). Taking back control for this Parliament should mean that parliamentary approval is required for operationalising provisions of this Bill.

Equally, we support the principle behind amendment 3 in the name of the hon. Member for North Down (Stephen Farry), which would make the consent of the Northern Ireland Assembly required—we all want to see the Assembly functioning again—and ensure that the views of all communities are heard and considered before unilaterally making changes with wide-ranging implications, as this Bill does. Both those amendments would undo the real power grab by this zombie interim Government, trying to approve large numbers of unaccountable powers in areas of huge sensitivity. It is simply not the way to proceed. I will seek a Division on new clause 12, but we will not press new clause 11 at this stage. I look forward to hearing the contributions of others in this debate.

Northern Ireland Protocol Bill

John Redwood Excerpts

Committee stage
Tuesday 19th July 2022 Commons Chamber

[The Chairman of Ways and Means (Dame Eleanor Laing)]

I am happy to tell the hon. Gentleman how impressed I am by that.

[John Redwood (Wokingham) (Con)]

I welcome the notion of measures that restore our control over VAT and subsidies in Northern Ireland. It is entirely within the spirit and the text of the protocol, which says that both parties will respect the internal market of the United Kingdom. How can we have a proper functioning internal market if we have to have rates of VAT in Northern Ireland that are different from the rest of our internal market? And how can we claim that our country’s sovereignty is respected by this part of the agreement, as the EU originally said it would be, if we are not sovereign to change VAT in an important part of the United Kingdom? It is right that we legislate on this issue, because we took back control and we wish to restore the sovereignty of this Parliament. How can we say that we have a sovereign Parliament properly restored if our Chancellor of the Exchequer cannot change VAT in part of the UK? It is right and it is legal that we legislate within the terms of the protocol and the agreement, and it is essential that we do so. Those who favour a negotiated solution with the EU should recognise that a huge amount of time and talent has been put into negotiating with the EU in recent years on these matters, and it has been unwilling to be reasonable or to respect the spirit and even the letter of the protocol itself. It is time to legislate.

I say to those who favour a negotiated solution and still have this idea that the EU will, in due course, negotiate properly over one that it is far more likely to negotiate in a more sympathetic and realistic spirit if it knows that we have the firm backstop of clear legislation, which means we will do the right thing by Northern Ireland and the whole UK if the EU cannot be bothered to meet us and understand what it means for the communities in Northern Ireland.

The EU should also take on board the good advice from the Democratic Unionist party and other members of the Unionist community in Northern Ireland. The whole fabric of the Good Friday agreement rests upon the consent of both communities. The EU says it fully signs up to that and sees it as of prior importance to the protocol, so the EU has to understand that there is no cross-community consent for the current position. The sooner we legislate to sort that out, the better.

[Sammy Wilson]

Although the proposer of the amendments, the hon. Member for Hove (Peter Kyle), has said that these are complex issues, for people in Northern Ireland they are very simple. First, simply the inclusion of Northern Ireland under the VAT regime of the EU means that when there are tax changes that can apply to the rest of the UK, they cannot apply to Northern Ireland. I know that he has placed considerable faith in the willingness and ability of the EU to negotiate its way around some of these obstacles, but the fact of the matter is that despite two years of negotiations, these obstacles have not been removed. When it comes to the kinds of things that the Government may wish to do, and which he would like the Government to do, for example, on VAT on electricity bills, the action required is not something to be done some time in the distance future; it is something that is essential now, because people are facing the high fuel and energy bills now. Frankly, many people in Northern Ireland, where fuel poverty is higher than it is in most parts of the UK, would find themselves disadvantaged for not weeks or months but perhaps even years while negotiations went on as to whether or not the EU would be prepared to permit the UK Government to exercise the fiscal freedoms that we thought we had obtained when we left the EU and to apply them to Northern Ireland.

I believe that this Bill and this clause are necessary. I also believe that the wording is correct, with the Government deeming the issue “appropriate” rather than “necessary”, because it could be argued that in some instances although it might be good to change the VAT rate, it is not necessary to do so; it could be argued that it is not necessary to keep in line with the rest of the UK and that particular circumstances pertain in Northern Ireland that do not make it necessary. That is why I believe the threshold of appropriateness is correct.

When it comes to state aid, the issues are also not complex—they are very simple. They have implications for the constituents of all Members of this House, because let us not forget that the state aid provisions refer to any state aid and any support that the Government may give to industries or firms anywhere in the UK if it impacts on trade between Northern Ireland and the EU. That is what article 10 says about any respective measures that affect trade between Northern Ireland and the Union, and that are subject to the protocol. Annexes 2 and 5 of the protocol contain lists of the kinds of sectors that would be impacted by that.

That means that the Government are always looking over their shoulder when they seek to give support to businesses. That support may be peripheral—for example, if the Government decide, as they have done, to support the production of batteries for motor cars in a factory in GB. If those cars are selling in Northern Ireland and, as a result of the subsidy and support, cars made in GB would have an advantage on the Northern Ireland market—compared with French cars, for example—that could be an area where the EU Commission would say that state aid rules apply, and the Commission and European Court would make a decision on that.

That is why it is appropriate that the Government have such a provision, because we cannot define or be sure at what stage the EU may say, “The support you have given that industry will impact on and give a Northern Ireland seller an advantage on the EU market, and therefore we wish to interfere in the support that you give to industry.” That is not just about Northern Ireland, because state aid provisions do not just apply specifically to Northern Ireland firms; they apply to those firms that may sell in Northern Ireland and get support elsewhere in the United Kingdom. That is why it is correct that Ministers have the ability to make a decision on whether something is appropriate.

Secondly, Ministers should have the flexibility to consider circumstances and issues that may emerge, and actions that the EU may wish to take. Those actions cannot be foreseen now, but we might have to act on them quickly in future. For that reason, I hope the amendments will not be pushed to a vote, and that Labour Members will see that rather than being complex, these are simple issues that require the kinds of actions already included in the Bill.

--- Later in debate ---

[Lucy Frazer]

As the hon. Member will know, because the point has been raised across the Committee over the past few days, negotiations have been taking place for almost two years. There have been 300 hours of negotiations with our EU counterparts, UK officials have shared 17 further non-papers with the European Commission, and we have been attempting to find common ground across these areas. Since the date that the hon. Member mentioned, the Foreign Secretary invited Vice-President Šefčovič to a joint committee meeting, where she announced our intention to table legislation. We would like to resolve the issue through negotiation, but it simply has not been possible.

In future, businesses in Northern Ireland will be subject to new EU VAT, excise and energy tax directives even where they are inappropriate and burdensome for Northern Ireland. That includes forthcoming changes to the application of the EU VAT registration thresholds, which could have a significant administrative impact on businesses in Northern Ireland. Under the Bill, however, we will be able to introduce targeted reliefs to support individuals with the cost of living crisis and achieve net zero, in addition to being able to reform our complicated alcohol duty system, bringing our tax system into the modern era and benefiting the entire UK.

It is not right that there should be unnecessary tax discrepancies between Northern Ireland and the rest of the UK. Clause 17 will enable the Government to lessen or eliminate those discrepancies.

[John Redwood]

Will the Financial Secretary confirm that the Treasury will never use the argument that we must not press ahead with the very necessary VAT cut on energy in the cost of living crisis because we cannot apply it in Northern Ireland? It could damage GB as well as NI if that argument were used. Will she promise that the Government will energetically pursue complete sovereignty over VAT?

[Lucy Frazer]

After this legislation has passed, we will be able to introduce VAT legislation across the UK in the interests of both GB and Northern Ireland. I can assure my right hon. Friend that the Treasury consistently looks at tax policies, including VAT, and the benefits and disbenefits of bringing in changes.

I turn now to amendments 37 and 41 in the name of the right hon. Member for Tottenham (Mr Lammy). I should note that this issue was addressed in a previous debate, so, in the interests of time, I shall aim to be brief. The amendments would restrict the use of the Bill’s powers to only make provision that is “necessary” rather than to make provision that the Minister considers is “appropriate”.

As my right hon. and learned Friend the Minister for the Cabinet Office and I have said previously, “necessary” is a very strict legal test. The amendments would therefore remove the policy discretion for the exercise of these powers, potentially limiting Ministers’ choice of the right solutions to the problems caused by the protocol. Changing the test to an objective one will provide additional uncertainty to businesses and consumers and it would severely limit the ability to facilitate consistent VAT, excise and other relevant tax policies between Northern Ireland and Great Britain, as well as a domestic subsidy control regime that applies to the whole of the UK.

I want to comment on how that was expressed by the hon. Member for Hove, who suggested that Ministers could make changes on a whim. That is simply not the case and is a misrepresentation of the position that is clearly set out in the legislation. Clause 12(3) clearly states:

“A Minister of the Crown may, by regulations, make any provision which the Minister considers appropriate in connection with any provision”.

Therefore, he or she would need to consider those matters very carefully, as Ministers from across the House would do. The amendments might also prohibit the Government from responding in a flexible way to issues facing Northern Ireland. That, in turn, will have a negative impact on Northern Irish businesses and individuals, so I ask the hon. Gentleman to withdraw his amendment.

Many hon. Members discussed the negotiations, and I hope that I have answered those points in my response to the intervention from the hon. Member for North Down (Stephen Farry), The hon. Member for Hove talked about the single electricity market. The right thing to do is not to impact the single electricity market. As the Foreign Secretary has said, we want to cement the provisions in the protocol that are working, including the single electricity market. That is why this Bill does not seek to exclude article 9 or annex 4, which maintain the single electricity market. The Government are committed to preserving it and the benefits that it provides to UK citizens in Northern Ireland.

For those reasons, taken together, these clauses will ensure that the Government can set UK-wide policies on subsidy control and VAT, ensuring that those in Northern Ireland can benefit from the same level of support as those in the rest of the United Kingdom.